Rare Commodity

Modern economists are prone to shouting fire in a crowded theater.  The world is full of seeming incongruences. Economists puzzle over things like population growth and arable acres of farmland. They project out a linear scenario of increasing divergence, and see a catastrophe in the making.


Professional scaremonger Thomas Robert Malthus, one in a long line of scarcity prophets who failed to recognize the capacity of human ingenuity and free markets to solve the perceived problem of “finite resources”. The effects of demographics are the exact opposite of what the scarcity scaremongers claim: there is no overpopulation problem based on the allegedly “limited carrying capacity” of the planet (as an aside, note that most of the land area of the planet remains completely devoid of people). On the contrary, the more human beings there are, the more tacit and outright knowledge exists and the more ideas and innovation can be tapped for the benefit of all – provided a free market remains operative. Unfortunately, the free market and its “anarchy of production” as Marxists used to derisively refer to it, is precisely what the scarcity prophets ultimately attack – since their demands can only be fulfilled by applying the most vicious statist coercion. [PT]


Yet it is beyond individual human capacity to precisely fit each piece of the puzzle together, particularly where the shapes and numbers of pieces are continuously changing.  That is what markets are for; to make real time corrections and adjustments, which keep things from slipping too far into disorder.

Most of the time markets work remarkably well.  But occasionally, and especially where governments have commandeered a nation’s economy or its money, disaster strikes. That’s when it’s time to get out of Dodge.

Today we greet you from beyond the outer margins of civilization.  Here in Joshua Tree, in Southern California’s High Desert, we are on a quest to unearth a rare and valuable commodity.  One that is in low supply and high demand in our day to day activities. Perhaps it is in low supply and high demand in yours too.

Specifically, the rare and valuable commodity we are after is silence.  We don’t get enough of it.  We need more of it.


The silence of outer space, where Neptune the Mystic sails on the silent wings of noise while reflecting on the ironclad principles of probabilistic processes (we’ll let you know when he comes up with a definitive theory). [PT]


Without question, silence is an essential element needed to think, contemplate, and discern just what in the world is going on.  Silence is also essential for lucid conjecture.  Without silence, it is near impossible to rise above the noise and distractions, and peer out beyond the horizon to see what’s coming.

Yet silence is not all that we are after out here in the middle of nowhere.  We are also after perspective and empirical awareness.  We want to observe how it is that anything lives in these bleak and rugged conditions. We also want to understand where and where not to go when the time comes to get out of Dodge.

The wickedness we see developing just beyond the horizon has been gathering for some 80 years.  We are talking about nearly $70 trillion in combined public and private debt. This debt is supported by about $20 trillion in nominal GDP.


Total US credit market debt vs. nominal GDP – an ever widening gap. Eventually, something will have to give. It is not debt per se that is “bad” – it is the fact that much of it has supported overconsumption and malinvestment of capital. In other words, real wealth was diverted into unproductive channels and much capital was consumed. This is a process that will indeed turn out to have a limit. [PT]


Conversely, the GDP, which is an abstraction, is supported by the extraordinary levels of debt. How can the GDP support all this debt while all this debt simultaneously supports the GDP?

Over an extended period, the impossible can be made possible with greater and greater issuance of debt.  But ultimately, a giant pyramid of debt that is constructed on top of a faulty foundation of debt based collateral always comes crashing down. That’s a fact.

Hence, a complete financial meltdown and mass debt reckoning that reverberates through the economy for several decades is in order.  There is no way to stop it. So we must learn to delight in it.  Even in the harshest of conditions, there are still things to be grateful for… if you stop to count your blessings.


Finding Perfection In A Strange Land

Sunrise is always perfect at Joshua Tree National Park.  As the day eclipses night, and countless stars fade away, the desert landscape dances about in a state of magic.  From Cholla Cactus Garden, the sun peeks over the eastern horizon like a glowing orb.


Cholla Cactus Garden in the Joshua Tree National Park [PT]

Photo credit: Axel


The sky’s colors dramatically sequence from purple, to pink, to orange, and then yellow.  The brightening sky also awakens the winds, which propel the color glinting clouds across the expansive sky like a twisting kaleidoscope.  Our words cannot properly describe it.  Our eyes could not hold onto it.

Alas, the enchantment is fleeting.  Soon the colors dwindle and the potent desert sun takes over.  Before long it feels like you’re walking through a gigantic oven.

Here at the confluence of the high Mojave Desert and the low Colorado Desert, the landscape functions with a rugged imperfection.  Massive boulders and outcrops, sharp and rocky mountains, dry low-lying cactus, abandoned gold mining prospector pits, and expansive desert valleys characterize the setting.

Fringe-toed lizards use their webbed feet to dart across the loose blow sand.  Ground squirrels rise up on their hind legs like homo erectus and stare at you with a frozen gaze.  This, indeed, is a really strange land.


In case you were wondering: meet the fringe-toed lizard Uma Inornata (unadorned Uma).

Photo via reptilefact.com


Getting Out of Dodge

The namesake Joshua Tree dots the landscape and has an appeal that grows over time.  At first look, a Joshua Tree appears to be some sort of deformed mutant.  Is it a cactus or is it a tree?

As far as we’re concerned, the answer doesn’t matter.  Each Joshua Tree has been warped and twisted about by the hot desert winds in its own unique and sometimes eccentric character.  What to make of it?

Mormon pioneers, upon first observing the curious trees, thought they saw the likeness of Joshua of the bible; the extended limbs appeared to them as Joshua with his upraised arms.  They named the trees accordingly.

The Cahuilla Indians, who somehow inhabited the area long before westerners ever passed through, used Joshua Tree fibers to make sandals and nets. Branches were used to make quail traps.  The spirits of dead men tell these tales through the petroglyphs etched on the rock formations.  To our untrained eye this rock art appears to be the scribbles of a 3-year old.


A bunch of Joshua trees in the process of surrendering. Their ancestors may have immigrated from France (sorry, we couldn’t resist…). [PT]

Photo credit: NPS/Larry McAfee


Apparently, the secret to the Cahuilla Indians’ survival in these hard conditions was their ingenuity.  Where most people saw a barren desert, the Cahuilla saw a land of plenty.  According to Archaeologist Charlotte Hunter, 121 plant species have been identified as having been used for food, medicine, or as raw materials for making objects.

As a practical area to go to when getting out of Dodge, Joshua Tree is not a long-term option. Only the craggiest of desert rats can survive out here for an extended period. Nonetheless, there is an abundance of silence out here.  If you are in need of this precious commodity, this locale is worth the visit.


Traditional Cahuilla desert dwellings and portraits of Cahuilla people [PT]


Chart by: St. Louis Fed


Chart and image captions by PT


MN Gordon is President and Founder of Direct Expressions LLC, an independent publishing company. He is the Editorial Director and Publisher of the Economic Prism – an E-Newsletter that tries to bring clarity to the muddy waters of economic policy and discusses interesting investment opportunities.




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