How to Calculate the End of the World - Vivek Kaul's Diary
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How to Calculate the End of the World

May 2, 2018

  • You must remember this.
    A kiss is still a kiss, a sigh is still a sigh.
    The fundamental things apply
    As time goes by.
    - Dooley Wilson, "As Time Goes By"

PORTLAW, IRELAND - Poor Florence Newton.

The young woman was tried as a witch in Youghal, Ireland in 1661. It was alleged that she kissed another woman "violently" and that the victim experienced fits, cramps, and visions.

In another instance, she kissed the hand of an imprisoned man who subsequently died.

Today, we think of "witchcraft" as hocus-pocus. We deny any cause-and-effect relationship between Ms. Newton's kiss and the prisoner's death.

Myth, in other words.

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Myths Rule the World

Yes, Dear Reader, we continue to explore how myths rule the world. We have looked at helpful myths: A penny saved is still a penny earned. A fool and his money are still soon parted. And nobody wants to eat at a restaurant with a skinny chef.

But now we turn to the unhelpful sort of myths: "fake news" and lies.

Making the world "safe for democracy" was a monumental lie when President Woodrow Wilson used it as an excuse to drag the U.S. into World War I.

Sorcery had no more truth in it than an act of Congress. And stimulating the economy with fake money was a scam from the get-go.

Some myths are useful. Others are lies. And today we pose the critical question: How can you tell the difference?

End of The World

This is probably the most important question ever posed: How do we know if a public policy makes the world better... or worse?

How do we know if what we are doing is good... or bad? How do we know if our actions will get us to Heaven... or Hell?

A question of that magnitude is going to take some time... Give us another 24 hours, please!

In the meantime, we turn to the end of the world.

Mr. BJ Campbell, writing on an open-source publishing platform called Medium, pens an essay and uses statistical analysis to calculate the odds of a society-altering event like a flood or armed revolution.

Illustrating his approach - and keeping in mind that there are relatively few data points - he figures, for example, that the odds of a New Orleans-style flood disaster during the life of a typical 30-year mortgage is about one-in-four.

That, of course, will only affect people who live in or near the flooded area.

But what about the kind of upheaval that will affect nearly everyone - a revolution or a civil war, for example?

There have been two in the U.S. since it was colonized by Europeans (not to mention Indian wars... fights with the French and Spanish... and even a battle fought between Catholics and Protestants near Annapolis, Maryland in 1655).

Mr. Campbell uses 1678 as his start date, avoiding some of this confusion.

Calculating the odds based on just two events (the American Revolution and the War Between the States), he concludes that you have about a one-in-three chance of experiencing a major insurrection during your lifetime.

But those odds are probably far too low. Just look around, says Campbell:

  • Since our 1678 benchmark, Russia has had two world wars, a civil war, a revolution, and at least half a dozen uprisings, depending on how you want to count them. Depending on when you start the clock, France had a 30-year war, a 7-year war, a particularly nasty revolution, a counter-revolution, this Napoleon thing, and a couple of world wars tacked on the end. China, North Korea, Vietnam, and basically most of the Pacific Rim has had some flavor of violent revolution in the last 100 years, sometimes more than one.

But even those "facts" don't do justice to the risk you face. Campbell goes on:

  • Since the fall of Constantinople in 1453, there have been 465 sovereign nations which no longer exist, and that doesn't even count colonies, secessionist states, or annexed countries. Even if we presume that half of these nation state transitions were peaceful, which is probably a vast overestimation, that's still an average of one violent state transition every 2.43 years.

    If we just look at raw dialectic alone we reach dismal conclusions. "Do you think the United States will exist forever and until the end of time?" Clearly any reasonable answer must be "no." So at that point, we're not talking "if," but "when."

Based on his numbers, Mr. Campbell believes you should prepare - by stocking, food, water, and firearms.

Vanishing Mist

But the disasters that he imagines are only a small part of the dangers you face. There are also risks of bugs, mutant viruses, crop failures, solar flares, electronic meltdowns, volcanic eruptions, years without summers, and, of course, nuclear wars.

Any one of those things could bring chaos, looting, and death. (Imagine West Baltimore when the power goes off.)

But the most likely threat comes from neither rising water, nor war, nor zombie apocalypse. Instead, the main risk is financial. And it too is not a question of "if" but "when."

And here we find our question, laying on the treacherous ground in front of us, like an unexploded bomb in a playground. Sayeth Proverbs 21:6:

  • Wealth created by a lying tongue is a vanishing mist and a deadly trap.

Why so?

Because the fundamentals still apply; actions still have consequences. You never know exactly what those consequences will be or when and how they will show up. (This isn't science!)

But when you spend too much money you don't have... and go too far into debt... you eventually find out.

Stay tuned.

BILL BONNER Founder, Agora Inc

PS: Have you heard about the exclusive Bombay Investing Society? It's a society that has given its members stock recommendations with a success rate of more than 70%. This exclusive society is now accepting new members. You too can join! Just click here...

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

Disclaimer: The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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