About a decade ago the idea of encountering a ‘black swan’ was again brought to mainstream discourse by Nassim Nicholas Taleb’s bestseller, the ‘Black Swan’. This time around however, the black swan notion was employed to illuminate unexpected scenarios that can come about from within or from without the human collective. Taleb used an analogy from the old zoologists of the 18th century. At the time, the fixation within the community of ornithologist was; ‘all swans are white’! The intent of Taleb’s ‘Black Swan’s’ was to shake up established routines. As a player in the securities market, his interests were mostly focused on such matters as; survivorship bias, blindness to randomness, fat tails etc.!
Most of the strategies currently employed in the financial markets have innate pitfalls. They have tendencies to follow what others are doing, the ‘herd mentality’. In addition, these models rely on abstruse mathematical derivations with dubious results/values. To start with, mathematics cannot really be trusted in the feeble world of humanity. Yet, econometrics insists that it is better positioned to understand what is going on in the real world of exchanges; commodity, financial, labor, etc. We beg to differ! To those who are befuddled with this, we suggest listening to those who actually know what they are talking about. ‘As far as the laws of mathematics refer to reality, they are not certain; as far as they are certain they do not refer to reality’ Albert Einstein. The shortcoming of economics is not limited to the excessive utilization analytical methods and brute quantification. On this point Taleb has something to add. ‘Taleb has called for cancellation of the Nobel Prize in Economics, saying that the damage from economic theories can be devastating. He opposes top-down knowledge as an academic illusion.’ To be sure, Alfred Nobel did not bestow a Prize for economics. It was the Bank of Sweden in 1968, who took it on its own, to concoct an annual prize in economics, bearing the name ‘Nobel’. What bankers do to look respectable!
One must clarify the ‘Black Swan’ animal before the establishment completely abuses it, like the above story of ‘Economics Nobel’. For example, the current Covid-19 pandemic is not a black swan event according to Taleb. This is because it has been anticipated by many long before its actual occurrence. Just because the MSM (Main Stream Media) and establishment pundits are not interested in issues, it doesn’t mean things have not been studied or anticipated. For instance, there are plenty of Yemeni children who are currently dying because of the ongoing war of aggression. Yet, the MSM is not interested in covering such cases, while fully engaged in massive propaganda campaigns about all and sundry! There are plenty of laboratories in the world that are fully engaged in the research and production of bio-weaponry. They employ thousands of scientists whose main occupation is to come up with man-made pestilences/WMD. Almost all of these pestilences are intended to do considerable damage to some (ethnic specific) or even all of the human species! So if an incident involving a bioweapon happens, either by accident or by design, can one honestly claim it to be a black swan event? To those familiar with the workings of the existing world order, projects of these nature are a dime a dozen. The new nuclear weapons program of the USA, reinvigorated by the Nobel Peace Prize winning president, Barack Obama, is a case in point. Incidentally and like many other international treaties, the USA has also withdrawn from the bioweapon treaty, which it signed in 1972. Humanity cannot remain naïve to the potential consequences of such ongoing evil projects.
In the business world, white elephants are defined as those capital wasting useless investments or mal-investments. We cite some examples from the real estate industry. There are about 90 million vacant housing units in China all brand new and still waiting for occupancy, in a country that is now undergoing depopulation! There are many brand new ‘ghost cities’ in China that await massive residents who will be eager to engage in the business of family formation. There are about 30 million residential units unused in the USA. Even though many such properties in the world do not earn incomes commensurate with their asset prices or even their initial investment costs, they continue to significantly appreciate in value, albeit vacantly. If these assets are seriously devalued, there might be a top down revolution, this time to be led, paradoxically (don’t laugh) by the upper classes (asset owning classes) of the world system! Even the African cities (Nairobi, etc.,) are full of such white elephants; after all, we Africans do not make our own policies, but only follow, rather blindly, what is ordered by the masters of the world system!
White elephants can easily give rise to white swans, trivially. For example, there is now an impending catastrophe of sand shortage all over the world. It is already studied and is sufficiently anticipated. Can the climax of this disaster be labeled a black swan event? There are plenty of other mal-investments on the planet, primarily caused by the global fiat currency system. The overextended industry of travel and tourism, which is now the largest industry in the world, has become an epitome of mal-investment. From Miami Beach to Mombasa Beach the number of white elephants (hotels, condos, guest houses, airbnb, etc.) are so mindboggling, one might be forced to doze into the world of pink elephants! Since investment capital can be had for a whistle in a fiat system (so long as one is connected), every Tom, Tori and Tinny can become a respected investor, by the measure of crony capitalism, compliment of the bankster-cum-state cabals. The built-in inflation of the global system discourages savings and keeps the sheeple (human mass) pedaling on a fixed bicycle or running on a conveyor belt of real estate investment. What the ongoing depression will bring to inflated asset prices (everything bubble; such as the global real estate, securities, etc.), is something that remains to be seen. ‘By a continuing process of inflation, the governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.’ John Maynard Keynes. Good Day!