Large Hadron Collider set to restart

LargeHadronCollider Large Hadron Collider set to restart

Large Hadron Collider tunnel photograph by Maximilien Brice. (CERN)

 

By, James Rogers on Twitter @jamesjrogers. 2014.

The Large Hadron Collider, the largest and most powerful particle accelerator in the world, is scheduled to be restarted early next year after an ambitious two-year upgrade project that will nearly double its power.

Located near Geneva, Switzerland, the 17-mile LHC was built between 1998 and 2008 to help scientists test some theories of particle and high-energy physics and advance understanding of physical laws. It shut down for maintenance and upgrade work in February 2013.

“During the shutdown, scientists and engineers performed large-scale work to modernize the infrastructure and prepare the LHC for operation at higher energy,” a spokeswoman for CERN, the European Nuclear Organization, wrote in an email to FoxNews.com. The Collider is likely to restart toward the end of March, she said.

In June, CERN said it had already begun cooling down the vast machine to prepare for the restart.

Prior to its hiatus, the Collider ran at a collision energy rate of 7 to 8 trillion electric volts (TeV). CERN’s goal is to run the machine at 13 TeV.

Earlier this week Nature reported that each of the Collider’s two proton beams will contain as much energy as a speeding freight train, with scientists pushing each beam to nearly 7 TeV.

The LHC is a 17-mile ring of superconducting magnets with a number of accelerating structures to boost the energy of particles. As part of the machine’s upgrade, 10,000 of the superconducting connectors that link the magnets have been reinforced or replaced, according to Nature.

Within the accelerator, the two proton beams, in separate “beam pipes” – essentially ultra-high vacuum tubes – travel in opposite directions around the ring before they are made to collide at four points, which correspond to the positions of four particle detectors.

The CERN spokeswoman said new equipment and technology have been placed in each of the detectors. The ATLAS detector, for example, now contains a new piece of hardware that uses 3-D sensors to track particles more effectively.

“These new installations will help the experiments hunt for new physics and phenomenon during the next run of the LHC, as well as improve their ability to take precision measurements of particles like the Higgs boson,” said the spokeswoman.

In 2012 the Collider won global acclaim with the discovery of the long-sought Higgs boson  particle, which explains the behavior of other particles. Physicists Peter Higgs and Francois Englert were subsequently awarded the 2013 Nobel Prize in Physics.

When the LHC restarts next year, scientists will be eager to see whether the Higgs boson is the only particle of its kind or if new, exotic particles will be produced, according to Nature.

Read more at http://www.foxnews.com/science/2014/10/09/revamped-large-hadron-collider-set-to-restart/?intcmp=features

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The Shibumi Seven

shabumi02 e1412882191540 The Shibumi Seven

Commander Mark Divine, SealFit, 2011.

While there is nothing easy about achieving shibumi, if taken together as a cohesive set of design principles, these seven Zen principles can at least put you on the right path. The goal is not to attempt to incorporate every Zen principle into a given design, but rather select those aligned to your goals and use them to guide and inform your efforts. What sets shibumi apart as a powerful design ideal is the unique combination of surprising impact and uncommon simplicity. At the core of this blend, and what all Zen principles have in common, is the element of subtraction. “Perfection is achieved not when there is nothing left to add, but when there is nothing left to take away.”

 

AUSTERITY

 

Refrain from adding what is not absolutely necessary in the first place. Emphasizes restraint, exclusion, and omission. The goal is to present something that both appears spare and imparts a sense of focus and clarity. In the world of mobile apps, Hear is a great example.

 

SIMPLICITY

 

Eliminate what doesn’t matter to make more room for what does. Beauty and utility need not be overstated, overly decorative, or fanciful. The overall effect is fresh, clean, and neat. “Perfection is achieved not when there is nothing left to add, but when there is nothing left to take away.”

 

NATURALNESS

 

Incorporate naturally occurring patterns and rhythms into your design. The goal of shizen is to strike a balance between being “of nature” yet distinct from it-to be viewed as being without pretense or artifice, while seeming intentional rather than accidental or haphazard. Incorporate naturally occurring patterns and rhythms into your design.

 

SUBTLETY

 

Limit information just enough to pique curiosity and leave something to the imagination. The principle of yugen captures the Zen view that precision and finiteness are at odds with nature, implying stagnation and loss of life, and that the power of suggestion is often stronger than that of full disclosure. Leaving something to the imagination piques our curiosity and can move us to action.

 

IMPERFECTION, ASYMMETRY

 

Leave room for others to cocreate with you; provide a platform for open innovation. The goal of fukinsei is to convey the symmetry of the natural world through clearly asymmetrical and incomplete renderings. The effect is that the viewer supplies the missing symmetry and participates in the creative act.

BREAK FROM ROUTINE

 

An interruptive “break” is an important part of any breakthrough design. Imagine that you get a flat tire while you’re driving. If you’re normal, you curse out loud. That curse signals a break from the ordinary, which, being creatures of habit, we don’t much care for. But now suddenly you’re wide awake, with senses on high alert, and you’re aware of a problem requiring your full attention to solve. Suddenly everything you normally take for granted becomes vitally important: How the car handles, the shoulder of the road, safe spots to pull over, traffic around you, tire-changing tools in your trunk, immediate avenues for help. These are all the resources you need for a creative solution. They were there all along, but it was the break that brought them to your attention.

 

STILLNESS, TRANQUILITY

 

Doing something isn’t always better than doing nothing. The principle of seijaku deals with the actual content of datsuzoku. To the Zen practitioner, it is in states of active calm, tranquility, solitude, and quietude that we find the essence of creative energy.

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Simple Ideas for Sustainable Living

Shibumi e1412881771700 Simple Ideas for Sustainable Living

By PENNI DUNCAN. 2008.

I live in Colorado Springs, Colo., and there are many venues here that offer different kinds of classes. One day, almost 10 years ago, a friend asked if I’d like to join a voluntary simplicity study circle. It sounded interesting, so I decided I would, even though I didn’t know the first thing about it.

The class was a Northwest Earth Institute course that was put on by Pikes Peak Justice and Peace Commission, and it required a three-hour commitment every week for eight weeks. That class opened my eyes to what an individual can contribute to the health of our planet.

Since then, my husband, Scott, and I have slowly changed our habits. It’s been an ongoing process, and we do a little at a time. But support from others in my voluntary simplicity group has made it easier. At the beginning, they taught me about things like the benefits of locally grown and organic food. Many of us are still in touch, and we regularly meet for potluck and game nights. We call ourselves the “simple friends.”

Sustainable living can be a challenge, and it’s twice as challenging for me because I have cystic fibrosis, which has reduced my lung capacity by half. This affects my energy level and requires me to complete five hours of self care and treatments every day. Scott works full time.

Many of the choices we’ve made have been affected by my physical limitations. For example, with my level of stamina, I can’t maintain a large garden. But I can do numerous smaller jobs — such as painting, housework, hanging shelves, refinishing furniture and cooking from scratch — so many of the projects I’ve taken on have been those that don’t require a lot of physical strength.

A Right-Sized House

When we first got excited about sustainable living, one of the biggest changes we made was moving into a smaller house. Previously, we lived in a large house that we realized did not fit our personalities or lifestyle. We now live in a 1928 two-bedroom bungalow in the heart of Colorado Springs.

We sold or gave away most of our furnishings as we found secondhand items that better fit our small house. Colorado Springs has many thrift stores, so now we “rent” our clothing and furnishings: We purchase them from the thrift stores and donate them again when they’re no longer needed.

When we want to take on large projects at home, we hire local contractors. In our city we have many choices. An added benefit of hiring help for these projects is that it gives both the contractors and me an opportunity to learn about different sustainable building products and practices. For example, our newly finished basement has cork flooring in the TV room. In the laundry room/bathroom we put in tile from a resale store, and we also installed a dual flush toilet that conserves water.

We love our location. It is “10 minutes from everywhere.” In fact, Scott’s office is even closer — it’s only two miles from our house. He still usually drives to work because his meetings take him all over town. We lived with one vehicle for a year, and during that time I took advantage of our bus system and the three different routes that run close to our house. I still take the bus from time to time, but we did eventually decide to buy a second car. We chose a hybrid to support the new technology.

I walk, bike and study Tai Chi for my health — my Tai Chi teacher is one of the simple friends and lives nearby. There are three parks and a bike trail within six blocks of our home. My bike’s name is Bonnie. I run errands with “Bonnie blue bicycle” whenever I can. The library and bank are both in close proximity, and I chose my beautician and various therapists and healers because they all are within easy walking and biking distance.

Family and Community

Our neighborhood was built in the 1920s and ’30s, and it boasts the oldest grocery store in Colorado Springs. No two homes are alike. There are no covenants, so houses of every color greet me while walking or biking. It’s like a box of crayons: red, yellow, purple, green, brown and white. I also like the large, established trees that are part of this neighborhood.

I’ve met many neighbors along the way. In our previous neighborhood, I didn’t know anyone, even though I walked by the same houses every day. The neighbors just weren’t outside. This neighborhood is more at ease with itself. People are more likely to be outside and willing to chat.

My husband and I met our backdoor neighbor while out for a stroll one evening. On subsequent meetings we learned about each others’ occupations and families. As we got to know each other, we did favors and ran errands for each other. In fact, she let us live with her for three days, while our floors were being refinished. She even invited our cats to stay!

One day I gave her a ride to her car, which was in the shop. I said to her, “Your house is so fabulous. I would buy it for my mom, if you ever decided to sell.” She replied, “I am selling it! I need to be closer to my job.”

With much excitement, I made two phone calls, the first to my mother. I asked, “Mom, the house behind me is for sale. Would you like to live close to me someday?” She was surprised and said, “Of course.” But I knew that Mom wouldn’t be moving anytime soon because when she retired, she left the city and moved closer to my grandmother to care for her. So second, I called a couple who were part of the simple friends group. After looking at my neighbor’s house, they were charmed and said they would be comfortable renting from us. With everyone on board, we bought the house. Someday it’ll be there when Mom wants to move in, but until then we’re happy to rent it out.

Our renter friends have been wonderful. We share rides, chores, tools and dinners. A month after our renters moved in, I had a simple friends potluck, and we built a gate between our two back yards. Mom teases the renters when she visits, and asks “How is my future home?” We miss the previous neighbor for the same reason we love our current neighbors: the sense of community.

As I’ve befriended other neighbors, we’ve had garage sales, decorated, hunted for wild asparagus, subscribed to a Community Supported Agriculture (CSA) group, painted, hauled firewood, swapped plants and cleaned up the park together. The idea of “intentional community” I learned about in the voluntary simplicity course and dreamed of belonging to has quickly materialized around me.

Simple Green Projects

Local and Organic Food. Much of our produce comes from the organic CSA we patronize. This farm also offers eggs, chicken and pork. My favorite Christmas photo of all time came from farmer Ryan — a picture of his chickens! His wife and other volunteers deliver to our city once a week. They deliver weekly at a farmers market less than two miles from where we live.

For our other food needs, there are many locally owned natural grocers, and two national natural grocery chains. It took me a long time to decide to buy strictly organic food, but I’m finally satisfied that the benefits outweigh the cost. It is encouraging to see that the major grocers have started to carry organic products, too. My mother and grandmother both garden, and they freeze and can their excess produce, so we gave our underutilized freezer to my mother. In return, she gives us frozen produce to take home when we visit her.

Composting. Scott had reservations about composting. He didn’t want to see it, smell it or attract rodents. I didn’t either! So we tried a couple of different systems until we found one that worked for us. I first tried worms in a wooden container, but the container wasn’t big enough for the vegetable peelings, and within two weeks, the bin had a million fat happy worms working as fast as they could, but not keeping up with my supply. I passed the worms on to a friend with kids.

After some trial and error, I’ve found that a compost pile that doesn’t require turning works best for me. I simply bury the fresh veggie scraps in a different part of the pile each time. I bury the scraps deep enough that smell and pests haven’t been a problem. To hide the compost pile, my neighbor and I built a stone retaining wall, less than 3 feet high. In front of the wall is a sloping mound covered in xeriscaped mulch and plants.

Xeriscaping. One of our simple friends is a master gardener, and she helped us replace the lawn with xeriscaping — landscaping for dry climates designed to need minimal water. Our friend showed us how to use cardboard and newspaper for weed barriers, and over two summers we converted our lawn to mulch and drought tolerant plants. We hired two neighbor boys to do the heavy work after their parents suggested the idea when we ran into them at a garage sale.

Scott is thrilled not to have to water or mow a lawn. We don’t even have a lawn mower anymore. While walking one day, I happened upon a neighbor working on a mower. As we talked of mowers, I told him we had no use for ours since we had converted the lawn. He came right over and bought it!

I took ideas from neighbors who had already xeriscaped their yards. Several people in my neighborhood have raised beds by the sidewalk, and they plant them with pumpkins and herbs. I love the idea of putting in beautiful plants that also have edible value. It’s something I hope to do in the future.

Energy-Efficient Products. We have slowly replaced our windows, water heater, furnace, washing machine and dishwasher with energy-efficient models. Our water heater is a tankless “on-demand” model. The washing machine is a front loader, and the dishwasher is a super water and energy saver. We received a rebate from Colorado Springs Utilities for the washing machine. They also gave us a rebate for adding insulation to our attic.

Recycling. The one thing we had been doing all along was recycling. Most of the local waste removal companies recycle glass, plastic and newspaper. When we started recycling cardboard, junk mail, magazines and Styrofoam as well, I found a recycling facility that accepts all of them and started hauling it myself.


Simple Living Choices

I’m convinced there are many easy actions nearly anyone can take to live more sustainably. Some projects may take more time and energy, but weaving them into life is satisfying. I enjoy stretching my brain by thinking through the options and learning about alternatives. Scott and I make joint decisions on big projects, and I have free reign on small ones.

Choosing to live more sustainably requires trial and error. Sometimes we make slow progress and sometimes there are quick results. But opportunities always present themselves to learn, be inventive, teach and play. Who knows, maybe 10 years from now we will have wind turbines, passive and active solar, plus geothermal heating working into the mix!

Read more at http://www.motherearthnews.com/print.aspx?id={C341C740-9003-433F-BEFB-F8E3F5CB5827}#ixzz3Ffy4C0xV

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6 Ways To Empower Your Employees With Transformational Leadership

transformation02 6 Ways To Empower Your Employees With Transformational Leadership

By Drew HendricksContributor. 2014. 

Managers can attest to this experience: You ask an employee to carry out a task that has enough flexibility for creative input. Rather than making their own decisions, the employee comes to you with an onslaught of questions, trying to pin down the exact parameters of the task. You become exasperated, wondering why the employee has to ask you permission for every tiny detail.

This isn’t an unusual phenomenon – it can be difficult to break out of the leader-follower mindset at the workplace. In fact, researchers from Penn State, Claremont McKenna College, and Tsinghua University find that only rare, “transformational leaders” are able to prevent employees from being excessively reliant on their bosses, cultivating instead a staff that feels empowered and self-guided. Trust and business acumen are some of the cornerstones in building this type of work culture. We can use this wisdom to train informed and decisive teams that we can trust. Here are six specific ways to empower your employees and get back precious time.

Leadership Buffalo_Team Building Buffalo NY
(Photo credit: Create-Learning Team Building & Leadership)

1. Encourage In-The-Moment Feedback

It’s common for companies to conduct employee surveys occasionally to discover workplace concerns, workflow issues, and success stories. However, these issues can get lost with time, and it’s difficult to bring up specific issues if they happened too long ago.
Instant, on-the-spot feedback is one way for your team TISI -1.65% to communicate workflow issues to one another, so that proper action can taken right away. Make sure to set ground rules for this feedback – it must be both constructive and respectful. Essentially, you want your team to trust you and each other to deliver honest and helpful praise and criticism.

2. Cultivate the Executive Mentality

How often have you heard someone say that they have no idea what their boss does? Even if you’re busy and an effective leader, your team can quickly lose respect for you if a certain transparency isn’t in place. Chances are, most of your employees aren’t used to thinking at the executive level, since they’re busy with their own tasks and processes. However, you don’t want them to get so wrapped up in the small things that they can’t see the big picture.

Host regular meetings with your team, and share with them the large happenings within your organization. Help your team understand the main goals that you’re driving toward. Give them a rundown on how other divisions are performing – the more pieces of the puzzle your team gains, the easier it will be for them to enter the “executive mindset.”

3. Present New Challenges and Opportunities

It’s important to challenge your employees so they can demonstrate and achieve their full potential. For example, you might notice that your sales representative tends to rely heavily on email interactions – challenge them to get on the phone instead, and get outside of their comfort zone. You can also work with their unique interests and abilities – for example, you might notice that an employee loves to assist her team with processes. Invite this person to lead a customer workshop, so that she can develop her presentation skills and build stronger client bonds. Or you might discover that a coworker is bilingual, and ask him to work with international customers. If you’re out of ideas, sit down with each member of your team and ask them what types of experiences would help them grow professionally.

4. Respect Their Boundaries
This step is a natural follow-up to “present new challenges.” While you want to push your employees to embrace new experiences, you don’t want to shove them so far out of their comfort zone that it becomes a negative experience. For example, you shouldn’t ask an employee to take on a task that’s outside the realm of their role – they’ll feel like you’ve tossed them out to the lions. If you’re ever unsure about an employee’s comfort level, don’t hesitate to check in and ask!

5. Give Them Flexibility

Okay, so you might be used to gripping the steering wheel really tight while directing your team. It’s time to let your employees drive. Examine your workflow, and identify key areas that would benefit from greater flexibility and creative input. These tasks might include content creation, marketing strategies, and company events. Sit down with your team and explain how much flexibility they will each have within a task. Don’t leave it open-ended – give them some parameters to work with so that they’re not overwhelmed with options.

6. Don’t Babysit

Giving up control and empowering your team can be a terrifying experience for many leaders. You might feel compelled to watch their every move and peek over their shoulders. But by monitoring someone’s every move, you’re actually impeding his or her ability to grow. Give your team some space, trust them, and you might be impressed by what they’re able to achieve. Tim Ferriss wrote about his difficulty with coming to this decision and how successful it was in his book, The 4-Hour Workweek. He’s now a strong advocate for employee autonomy.

Breaking out of the traditional leader-follower mindset can help you create stronger staff bonds founded on trust, self-confidence, and achievement. When you create room for independent work and decision-making, your team might discover that they’re able to achieve far more than they originally thought possible. Test drive these leadership techniques, and see what your own team is really capable of.

Read more at http://www.forbes.com/sites/drewhendricks/2014/01/27/6-ways-to-empower-your-employees-with-transformational-leadership/

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The Age of Transformation

transformation01 The Age of Transformation

By John Mauldin, 2014.

Below is the June 14th “Thoughts from the Frontline” newsletter, republished in full.

One of the many luxuries that my readers have afforded me over the years is their willingness to allow me to explore a wide variety of topics. Not all writers are so blessed, and their output and responses to it tend to stay focused on specific, often quite narrow topics. While this approach allows them to dig very deep into particular subject matter, it can reduce the total scope of their research, vision, and advice. But don’t get me wrong; these types of letters are very important. I benefit greatly from being a subscriber to a number of letters that give me detailed analysis for which I simply don’t have the time to do the research. There’s just too much going on in the world today for any of us to be an expert in more than a few areas.

I seem to find the most enjoyment and elicit the best response when I try to give my readers the benefit of my broad scope of reading and research as I try to figure out how all the various and sundry pieces of the puzzle fit together. For me, the world is just that: a vast and very complex puzzle. Trying to discern the grand themes and detailed patterns as the very pieces of the puzzle go on changing shape before my eyes is quite a challenge.

To try to figure out which puzzle pieces are going to have the most influence and impact in our immediate future, as opposed to languishing in the background, can be a frustrating experience. I often find myself writing about topics (such as a coming subprime crisis or recession) long before they manifest themselves. But I think it is important to see opportunities and problems brewing as far in advance as we can so that we can thoughtfully position ourselves and our portfolios to take advantage.

Today I offer some musings on what I’ve come to think of as the Age of Transformation (which I have been thinking about a lot while in Tuscany). I believe there are multiple and rapidly accelerating changes happening simultaneously (if you can think of 10 years as simultaneously) that are going to transform our social structures, our investment portfolios, and our personal futures. We have had such transformations in the past. The rise of the nation state, the steam engine, electricity, the advent of the social safety net, the personal computer, the internet, and the collapse of communism are just a few of the dozens of profound changes that have transformed the world in which we live.

Therefore, in one sense, these periods of transformation are nothing new. I think the difference today, however, is going to be the simultaneous nature of multiple transformational trends playing out within a very short period of time (relatively speaking) and at an accelerating rate.

It is self-evident that failure to adapt to transformational trends will consign a business or a society to the ash can of history. Our history and business books are littered with thousands of such failures. I think we are entering one of those periods when failing to pay close attention to the changes going on around you could prove decidedly problematical for your portfolio and fatal to your business.

This week we’re going to develop a very high-level perspective on the Age of Transformation. In the coming years we will do a deep dive into various aspects of it, as this letter always has. But I think it will be very helpful for you to understand the larger picture of what is happening so that you can put specific developments into context – and, hopefully, let them work for you rather than against you.

We’re going to explore two broad themes, neither of which will be strange to readers of this letter. The first transformational theme that I see is the emerging failure of multiple major governments around the world to fulfill the promises they have made to their citizens. We have seen these failures at various times in recent years in “developed countries”; and while they may not have impacted the whole world, they were quite traumatic for the citizens involved. I’m thinking, for instance, of Canada and Sweden in the early ’90s. Both ran up enormous debts and had to restructure their social commitments. Talk to people who were involved in making those changes happen, and you can still see some 20 years later how painful that process was. When there are no good choices, someone has to make the hard ones.

I think similar challenges are already developing throughout Europe and in Japan and China, and will probably hit the United States by the end of this decade. While each country will deal with its own crisis differently, these crises are going to severely impact social structures and economies not just nationally but globally. Taken together, I think these emerging developments will be bigger in scope and impact than the credit crisis of 2008.

While each country’s crisis may seemingly have a different cause, the problems stem largely from the inability of governments to pay for promised retirement and health benefits while meeting all the other obligations of government. Whether that inability is due to demographic problems, fiscal irresponsibility, unduly high tax burdens, sclerotic labor laws, or a lack of growth due to bureaucratic restraints, the results will be the same. Debts are going to have to be “rationalized” (an economic euphemism for default), and promises are going to have to be painfully adjusted. The adjustments will not seem fair and will give rise to a great deal of societal Sturm und Drang, but at the end of the process I believe the world will be much better off. Going through the coming period is, however, going to be challenging.

“How did you go bankrupt?” asked Hemingway’s protagonist. “Gradually,” was the answer, “and then all at once.” European governments are going bankrupt gradually, and then we will have that infamous Bang! moment when it seems to happen all at once. Bond markets will rebel, interest rates will skyrocket, and governments will be unable to meet their obligations. Japan is trying to forestall their moment with the most breathtaking quantitative easing scheme in the history of the world, electing to devalue their currency as the primary way to cope. The US has a window of time in which it will still be possible to deal with its problems (and I am hopeful that we can), but without structural reform of our entitlement programs we will go the way of Europe and numerous other countries before us.

The actual path that any of the countries will take (with the exception of Japan, whose path is now clear) is open for boisterous debate, but the longer there is inaction, the more disastrous the remaining available choices will be. If you think the Greek problem is solved (or the Spanish or the Italian or the Portuguese one), you are not paying attention. Greece will clearly default again. The “solutions” have so far produced outright depressions in these countries. What happens when France and Germany are forced to reconcile their own internal and joint imbalances? The adjustment will change consumption patterns and seriously impact the flow of capital and the global flow of goods.

This breaking wave of economic changes will not be the end of the world, of course – one way or another we’ll survive. But how you, your family, and your businesses are positioned to deal with the crisis will have a great deal to do with the manner in which you survive. We are not just cogs in a vast machine turning to powers we cannot control. If we properly prepare, we can do more than merely “survive.” But achieving that means you’re going to have to rely more on your own resources and ingenuity and less on governments. If you find yourself in a position where you are dependent upon the government for your personal situation, you might not be happy. This is not something that is going to happen all of a sudden next week, but it is going to unfold through various stages in various countries; and given the global nature of commerce and finance, as the song says, “There is no place to run and no place to hide.” You will be forced to adjust, either in a thoughtful and premeditated way or in a panicked and frustrated one. You choose.

I should add a note to those of my readers who think, “I don’t have to worry about all this because I am not dependent on Social Security.” Wrong. A significant majority of the retiring generation does depend on Social Security and also on government-controlled healthcare, and their reactions and votes and consumption patterns will have an impact on society. Ditto for France, Germany, Italy, and the rest of Europe. The Japanese have evidently made their choice as to how to deal with their crisis. If you are a Japanese citizen and are not making preparations for a significant change in your national balance sheet and the value of your currency, you have your head in the sand.

There’s no question that the reactions of the various governments as they try to forestall the inevitable and manage the crisis will create turmoil and a great deal of volatility in the markets. We have not seen the last of QE in the US, but Japan is going gangbusters with it, and it is getting fired up in Europe and China.

Most people in most places will attempt to ignore the transformational wave barreling at them. After all, aren’t bond rates in Europe lower than ever? Indeed, French and Spanish bond yields are at their lowest levels since the 1700s, believe it or not. Isn’t the market telling us there isn’t a problem? If Japan is such a problem, shouldn’t the yen be going into the toilet by now? The US deficit is shrinking, and government spending is actually falling. Seems like the problems have all gone away.

But the problems I’m thinking about are not ones that will manifest themselves this week. The markets did not foresee the 2008 credit crisis or the last two recessions or the European crisis, even just a few months before they hit. When the world doesn’t come to an end as predicted (and there were plenty of prognostications of utter doom last decade), we seem to get complacent and ignore the basic arithmetic that you have to have more income than you have expenditures, and to conveniently forget that debt, even at low interest rates, is compounding. And yes, it is possible to grow your way out of the problem – but only if you have real growth. Now, much of the world is structurally challenged in such a way that structural imbalances inhibit growth at the rate necessary to significantly put a dent in swelling debt levels.

The Second Wave of Transformation

Contrasting with this rather negative set of circumstances is the second great transformational theme that I want to explore with you, and that is the far more positive accelerating trend in a vast array of technologies. It’s not too much of a stretch to say that we’re in a race between how much wealth and value and improvement in lifestyles human ingenuity can create versus how much destruction of wealth and lifestyles governments can destroy.

It is a tendency of ours to take our recent past and project it in a linear fashion into the future. That’s the way we are hardwired. And while we all acknowledge that change is happening faster today than it did 20 or 30 years ago, we really don’t expect the pace of change to quicken in the future. The next 20 years, we figure, will more or less unfold as the last 20 years has. Not a chance. That assumption is missing the second derivative of change – the acceleration of the pace of change.

As a thought experiment, let us assume that we were going 40 miles an hour in 1984, and by 2004 we were going 50 miles an hour. But today we’re going 60 miles per hour. It took 20 years to get that additional 10 miles per hour (from 40 to 50) but only 10 years to go from 50 to 60 miles per hour. If we continue to accelerate, we’ll be going 100 miles an hour in another 20 years!

While the impact of the internet and computers is evident, what I’m suggesting is that we are going to see multiple technologies go from deceptively hiding in the background, with the pace of change they promise frustratingly slow, to suddenly taking center stage and becoming disruptive. It will be as if the steam engine and electricity and the automobile and telecommunications all appeared at the same time, after having been developed in the background for many decades.

The mobile and wireless internet, artificial intelligence and automation, the internet of things, advanced robotics, autonomous vehicles, advanced energy exploration technology, renewable energy (especially solar energy), advanced materials, the rapidly accelerating biotechnology revolution, nanotechnology, and even electronic currencies (Bitcoin et al.) are all rapidly approaching the “elbows” of their own accelerating curves. Each of these areas is going to go exponential in the next 10 to 20 years.

The change I am contemplating is not simply better phones and electric cars and a few new medical therapies. I think we are in for a radical adjustment to the very mechanisms of production and the very structure of our economic and social life.

Joseph Schumpeter described capitalism as the “perennial gale of creative destruction.” In an excellent essay on creative destruction, W. Michael Cox and Richard Alm lay out the paradox between the demise of old industries and the rise of new ones (emphasis mine):

Schumpeter and the economists who adopt his succinct summary of the free market’s ceaseless churning echo capitalism’s critics in acknowledging that lost jobs, ruined companies, and vanishing industries are inherent parts of the growth system. The saving grace comes from recognizing the good that comes from the turmoil. Over time, societies that allow creative destruction to operate grow more productive and richer; their citizens see the benefits of new and better products, shorter work weeks, better jobs, and higher living standards.

Herein lies the paradox of progress. A society cannot reap the rewards of creative destruction without accepting that some individuals might be worse off, not just in the short term, but perhaps forever. At the same time, attempts to soften the harsher aspects of creative destruction by trying to preserve jobs or protect industries will lead to stagnation and decline, short-circuiting the march of progress. Schumpeter’s enduring term reminds us that capitalism’s pain and gain are inextricably linked. The process of creating new industries does not go forward without sweeping away the preexisting order.

Transportation provides a dramatic, ongoing example of creative destruction at work. With the arrival of steam power in the nineteenth century, railroads swept across the United States, enlarging markets, reducing shipping costs, building new industries, and providing millions of new productive jobs. The internal combustion engine paved the way for the automobile early in the next century. The rush to put America on wheels spawned new enterprises; at one point in the 1920s, the industry had swelled to more than 260 car makers. The automobile’s ripples spilled into oil, tourism, entertainment, retailing, and other industries. On the heels of the automobile, the airplane flew into our world, setting off its own burst of new businesses and jobs.

Americans benefited as horses and mules gave way to cars and airplanes, but all this creation did not come without destruction. Each new mode of transportation took a toll on existing jobs and industries. In 1900, the peak year for the occupation, the country employed 109,000 carriage and harness makers. In 1910, 238,000 Americans worked as blacksmiths. Today, those jobs are largely obsolete. After eclipsing canals and other forms of transport, railroads lost out in competition with cars, long-haul trucks, and airplanes. In 1920, 2.1 million Americans earned their paychecks working for railroads, compared with fewer than 200,000 today.

What occurred in the transportation sector has been repeated in one industry after another – in many cases, several times in the same industry. Creative destruction recognizes change as the one constant in capitalism. Sawyers, masons, and miners were among the top thirty American occupations in 1900. A century later, they no longer rank among the top thirty; they have been replaced by medical technicians, engineers, computer scientists, and others.

Technology roils job markets, as Schumpeter conveyed in coining the phrase “technological unemployment”. E-mail, word processors, answering machines, and other modern office technology have cut the number of secretaries but raised the ranks of programmers. The birth of the Internet spawned a need for hundreds of thousands of webmasters, an occupation that did not exist as recently as 1990. LASIK surgery often lets consumers throw away their glasses, reducing visits to optometrists and opticians but increasing the need for ophthalmologists. Digital cameras translate to fewer photo clerks.

And while your job may be one of those that will ride easily into our brave new future, the same may not be true of your stock investments. Companies show the same pattern of destruction and rebirth. Only five of today’s hundred largest public companies were among the top hundred in 1917. Half of the top hundred of 1970 had been replaced in the rankings by 2000.

The chart below was recently produced by Richard Foster at S&P. What it shows is that the average lifespan of companies in the S&P 500 Index was about 60 years in 1960. Today they last about 15-20 years. That means we are currently replacing a stock in the index about every two weeks.

[Permission pending]

Since the index is representative of the largest US companies, that means that each year 25 big companies either can’t grow enough to keep up or are outgrown by other companies, otherwise fail or get merged; but in general terms it means that if you are invested in the S&P 500 Index, it is almost guaranteed that at least 10% of the companies in your portfolio are old dogs.

Blockbuster failed to recognize that the world was changing, and it was Netflixed, to coin a verb. (Actually I think it’s quite a workable word to describe what happens when a company fails to adapt. It gets Netflixed.) There is going to be a bright dividing line in the future between companies that “get” change and companies that don’t. Measuring companies by past performance and recent profit trends will no longer be enough in the Age of Transformation.

No industry is going to be safe. Within the next 10 years, solar technology will develop to the point where it will be cost-competitive with fossil fuels. Currently, the solar industry is growing at 30% a year; and while solar is only 1% of US energy consumption today, if we are able to keep up that compounding effort, it it could be almost 100% in 20 years. Solar roads? Possible. And yes, we need new batteries and storage systems, but those are on the way. What will your mother’s safe utility companies do?

In China they are literally 3D printing 3000-square-feet houses in a day! One company is planning to 3D print a car with 20 moving parts this fall, using advanced materials much stronger than steel and aluminum. Think AT&T is safe? The competition for new wireless systems is brutal. Both Facebook and Google are developing technologies to place “high-balloons” and permanent solar drones at 65,000 feet in order to blanket the globe with Wi-Fi. I’ve read estimates that a “mere” 40,000 such devices could do the job. Netflix itself is in danger of being Netflixed by Hulu and other competitors.

You can’t believe what they’re doing with robots and artificial intelligence. AI, long the poster child for disappointing technologies, is getting ready to go mainstream by the end of the decade.

Just for fun, look at this RadioShack ad from 1991. Essentially everything on that page is in a smart phone. And far more powerfully. And throw in a free camera. For a tiny fraction of the prices advertised then.

Now fast-forward 20 years. I’m not sure what our can’t-live-without-it computing and communication devices will look like, but they will probably be quite small, wearable, and a million times more powerful! We will likely be (or at least some of us will be) connected to our devices in rather unique ways. (Google Glass will seem so odd and quaint, which is kind of how it is perceived now.) Think of being able to access scores (hundreds?) of expert systems waiting in the cloud with answers on any topic, so that the solutions to the problems of improving our personal lives and our businesses will be limited only by our imagination in asking the questions (and doing the work to make those answers real). And we’ll be able to direct those AI experts to work together to come up with powerful, novel solutions. The cross-fertilization of technologies will soar!

Now imagine putting these tools into the hands of practically every person on earth who wants them. Along with all the other tools that are coming from all the other exponentially accelerating technologies. Especially life-altering will be the biotech breakthroughs. We won’t be physically immortal, but the things that kill most of us today will not be a problem. We will just get … older. And we will be able to repair a great deal of the damage from aging. Plan on living a lot longer and needing more money than you think.

I can see many of my readers rolling their eyes and saying it won’t happen in 20 years. Or 30 or 40. Things just don’t happen that fast, you say. But that is just your old Homo sapiens brain extending the past in a linear fashion into the future. Moore’s law tells us that the number of transistors on a chip roughly doubles every two years (and the chip drops in price). But other industries, like solar tech and genome sequencing, are on exponential paths that make Moore’s law look positively snail-like. If the power of exponential change keeps working – and it will – we will see more change in the next 20 years than we saw in the last 100!

I get lots of newsfeeds from services that list 3-5 new advances in some field every day. It can be overwhelming. (We have our own such free service here at Mauldin Economics, called Patrick Cox’s Tech Digest.) The time from proof of principle in the lab until rollout in the factory is dropping as well. We are now using over 200 different materials in our 3D printers, combined in ways that were never before possible. (We’re even starting to print human organs, a feat that I predict will seem like so “last-century” in 20 years). I am lucky in that I get to tag along every now and then with Pat Cox as he interviews the leading scientists and entrepreneurs in a wide range of industries. He does the groundwork in sorting through that gale of creative destruction, and I get to see the pick of his litter.

One of the risks in investing in technology, by the way, is not so much that your company might not discover some new, cool tech that blows away the competition, but that someone else might come along and do it even better and cheaper before you’re even out of the starting gate. You can be right about the tech and STILL lose money.

Homo rationalis

The thing that is going to be overwhelming to nearly all of us is the degree of acceleration of change as the years fly by. We are not psychologically prepared for it. The only way we will be able to adapt is to ignore that primal part of our brain that says change is bad and use our frontal lobes to rationally observe and choose a path forward. Just as Neanderthals gave way to Homo sapiens, we need to evolve, at least in our thinking, to become Homo rationalis.

All of our investments and our businesses – and our very lives – will be fundamentally changed, transformed by these two Super Trends we have looked at. Needless to say, we cannot turn our backs on the nitty-gritty details of the faltering global economy. We still have to read financial statements and government reports and stay on top of which central bank is doing what to whom, and to translate our research and analysis into smart, nimble investments. Simply knowing that things are going to change in technologically wonderful ways will not be enough. Acting too soon will be as frustrating and ineffective as not acting soon enough. We will continue to explore together in this letter to figure out how all the pieces of the puzzle fit.

I would like to remind readers that I will be part of an exclusive webinar with investment industry heavyweights Richard Perry and Jack Rivkin on Tuesday, June 24, at 1:00 p.m. EDT / 10:00 a.m. PDT, hosted by my partners at Altegris. Richard founded Perry Capital in 1988 and is one of the originators of event-driven investing – a very interesting strategy to look at right now, given increased corporate activity this year. My friend Jack brings more than 45 years of direct investing, research, general management, and investment management experience at leading financial institutions to his role as Altegris CIO. Unfortunately, this event is limited to qualified US investors. You can go to http://www.altegris.com/mauldinreg to sign up, and someone from Altegris will call and make sure you get an invitation. I hate to limit it, but that is the rule. (In this regard, I am president and a registered representative of Millennium Wave Securities, LLC, member FINRA.)

Rome, Nantucket, New York, and Maine

I finish this letter on the train from Chiusi (in Tuscany) to Rome, where I will spend the next four nights. Tomorrow I am tourist, probably seeing the Vatican courtesy of a connection from Martin Truax. We met up in Cortona the other night, which turned into an adventure itself, and had dinner at a delightful outdoor restaurant overlooking the old town square, with 1,000-year-old walls as our backdrop. And a nearly full moon. Then I am in business mode, meeting with a series of corporate and government leaders and attending as much as I can of a very interesting conference organized by Banca IMI (the Investment Bank of Intesa Sanpaolo Group) and intriguingly titled “Back to the Future: Are Markets and Policy Makers Ready for Normality?” They have asked Christian Menegatti of Roubini Global Research and me to speak jointly to the main topic. Looking over the attendee list of government officials, bankers, and major market players is quite daunting, but we will try to provide a few useful thoughts. My first thought on hearing the question was, “What can be considered normal in Europe?” And upon reflection I am still trying to come up with an answer. Just saying.

Travel slows down this summer, with just a trip to Nantucket for a speech and to NYC for a few meetings in mid-July – and of course the annual Maine fishing trip. Even though Texas will be hot, I will enjoy being home for what will seem like an extended time.

As I am thinking a lot about change, I keep wondering how it will affect my family and friends. I know the unemployment number keeps falling, but good jobs seem problematical, and so many are going to disappear even as others appear, and that will mean learning new skills. Yet so much will not change. Humans will basically remain the same even as our tools improve. Family and good times with friends will still be important. We will still want to find meaning outside of ourselves. Most of us will still enjoy watching sports or listening to our favorite music. And serving others to take care of their basic needs will never go out of style. I hope to still be writing to you in 20 years, but I am not sure what form you will consume it in. I will adapt. And you will, too – you’ll need to.
They are calling Rome, so I guess that means it is time to hit the send button. It has been a relaxing two weeks, and I took much more time off than I had planned and read a few sci-fi books. I am enjoying Neptune’s Brood, by Charlie Stross, which offers a new version of money and economics in the far, far future (and is based on Bitcoin tech, for those interested). If you want to read a book about the near future and what will be possible with drones and AI, let me suggest Kill Decision, by Daniel Suarez. Frankly, it is the scariest book I have ever read. It is tech run amok, and the possibilities it raises are sadly more than real. While I do my best to be a cautious optimist, I admit to worrying about how some of our new tools will be used. God give us the wisdom…

Your relaxed and ready to get back to work (tomorrow!) analyst,

John Mauldin, Editor

subscribers@mauldineconomics.com

The article Thoughts from the Frontline: The Age of Transformation was originally published at www.mauldineconomics.com

Read more at http://www.forbes.com/sites/johnmauldin/2014/06/14/320/

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The Sun Rises every Morning

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There is a new age emerging, but it is arriving in a state of flux. This new and highly unstable wave is about to replace the industrial revolution that lasted only 200 years, prior to which technological advances were very slow. It is not entirely clear which sphere of influence will take us forward. Nevertheless, let us examine the new reality facing us today.

Companies of the new economy like Google had it figured out, amassing billions in the span of several years. Google shrugged off government pressure and told the world that they would not filter access to information on the Internet. In a similar recent scenario, Google refused to continue filtering internet content in China. China protested but Google stood firm, moving part of its business operations to Hong Kong and continuing to provide unfiltered content to China. The Chinese government partially relented, knowing that if they wanted to become a global superpower they must open their doors to the world. The Beijing Olympics were the precursor of exciting changes to come and the Chinese people were extremely proud of the attention and adulation they had garnered. Whether or not one will admit it, globalisation has hit China, and capitalist Chinese democracy is here!

There are pockets of anti-globalisation movements erupting around the world. But the movements, like suicide bombings, are not a deterrent when moderate sentiment in those same areas of the world craves American rock ‘n roll and shares the excitement of watching American movies. Globalisation is derided in countries rich and poor, but we are all exposed to aspects of a global culture that sometimes go beyond comprehension.

Everyone wants a fast food restaurant in their neighbourhood. Everyone wants a Mexican taco stand or falafel hut on every corner. Wives and girlfriends-even from poorer neighbourhoods-turn into material girls and tell their men to buy the most expensive import automobiles credit can buy, yet once these arrive they remain in the garage in mint condition because they are hardly ever driven. Everyone definitely needs to replace their smart phones. Why are you texting on your phone? OMG! You are communicating with someone on the other side of the planet, for free?

To varying extents, families and communities are influenced by societal behaviour. Let us not forget that it is the moderate movements that shape society for the better or worse, and ultimately, these movements extend beyond narcissistic and self-indulgent leaders. Even they get caught as perpetrators of vice and immorality and break their own rules.

Globalisation is both revered and loathed. Depending on your perspective, it is either associated with great prosperity or blamed for deep poverty. It is commended for expanding the power of the individual to make choices as consumers and creators of great wealth, just as it is condemned by the groups that are becoming increasingly subjugated by the growing power of transnational companies, cartels and black markets, sharing as these groups do a relationship akin to that of the grasshopper and the ant.

Let us not be blind. Most of the world lives under squalid conditions that go ignored by the civilised world, and it is nearly impossible to rise out of that poverty and attain a life of luxury over the course of one lifetime. But how much do we give in order to distribute the wealth more fairly?

In the United States, almost 50% of the population-including the wealthiest of individuals and corporations-do not pay taxes, while in a perverse twist of circumstances the situation appears to be getting worse for the upper middle class. Why should they be penalised the hardest for their earnest work? They are the group creating the most jobs. The middle class is losing their clout to lobbyists and organised labour and sadly, they are slipping into poverty. The most organised perpetrators of this decline are the multinational corporations. They are robbing the power of democratically elected governments and setting new conditions for labour. Organised labour in its current form has become a joke. Worse, schools are passing a slave-dependent consumer mentality onto students.

Globalisation is the great emancipator and the great oppressor. The global economy rewards mobility and a willingness to change more than it rewards loyalty and consistency. This is one of the many paradoxes of globalisation. Conservative political movements in Anglo-Saxon countries and the West in general tend to side with the forces of globalisation because of their support for free markets. Yet the global market is a powerful force against conservatism, as measured by an affection and even reverence for the local networks of borders, language and culture. For smaller bands of family and community, tribal traditions predate the rise of capitalism.

This explains the profound ambivalence of Catholic social thought against the market and globalisation. Catholic social theory finds itself opposed to statism and the disruptive effects of markets. This also explains the peculiar alliance of parts of the left and right against globalisation. The left is critical of the ways in which globalisation strengthens capitalistic institutions; the right is critical of the ways in which those institutions disrupt traditional arrangements and challenge long-held cultural values.

The global market economy can damage social cohesion and wreak havoc upon traditional society. One day, a company wins an enormous contact in a third world country. The region expands and develops overnight, and as a result, its children receive a better education. However, as we have seen in cities like Detroit, the situation can reverse almost overnight, creating disaster zones populated by hopeless ghosts.

Meanwhile, while our narcissistic politicians huddle around cups of gourmet tea and cholesterol-filled crumpets in chilly Copenhagen to chatter about global warming, the rest of the world waits in vain. Our politicians in Washington D.C. choose to pick fights over the protection of polar bears rather than come to the rescue of an ailing city. Borderline morons. Absolutely ridiculous.

In a tenuous and fundamental fight, the radical right and left, like the radical Islamic movements, mistrusts the culture of liberal capitalism, its economic structures and its disruptive power. Globalisation brings both beneficial and harmful disruptions. Learning to live with globalisation requires serious consideration of its shortcomings. Only then can we open to new possibilities that will take us forward.

The Grasshopper and the Ant is an ancient fable attributed to Aesop and brilliantly portrayed in Disney’s animated classic “A Bug’s Life.”

Dr Michael Savage (2003) ‘The Savage Nation: Saving America from the Liberal Assault on our Borders, Language and Culture.

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