02 September 2011

Gold Daily and Silver Weekly Charts - Smacked By the Invisible Hand

"People who hold strong opinions on complex social issues are likely to examine relevant empirical evidence in a biased manner. They are apt to accept confirming evidence at face value while subjecting disconfirming evidence to critical evaluation, and as a result to draw undue support for their initial positions from mixed or random empirical findings.

Thus, the result of exposing contending factions in a social dispute to an identical body of relevant empirical evidence may be not a narrowing of disagreement but rather an increase in polarization."

Charles G Lord, L Ross, Mark R Lepper, Biased Assimilation and Attitude Polarization: The Effects of Prior Theories on Subsequently Considered Evidence

This is an elegant way of saying that people tend to talk their books, and treat the truth rather lightly. And that therefore most arguments and anecdotal evidence are so selective as to be worthless because they merely support a bias, and not a scientifically based theory with a coherent model.
"Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof."

John Kenneth Galbraith
In the face of the general and woefully abysmal failure of an idea, people may cling to even outlandish theories, and listen most eagerly to the baseless rationalizations and propaganda that provide them some level of comfort and validation. And so we have the resilience of absurd notions like naturally efficient markets, trickle down economics, the virtues of regulatory nihilism, and the deflationary effect that a failing currency will have on the price of gold.

The dirty little secret is that some people don't really care for the truth when they are just issuing opinions for pay, or talking their books, their perceived self-interest. They just wish to have their cake, and eat it, and the rest of society be damned.
"Après nous, le déluge." Madame de Pompadour
That is very much the story in the US today, and the source of many of its problems. It is a house divided against itself. Honor and duty are quaint notions, trumped by virulent greed. For a few coins and a little power, truth is led down a blind alley, and quietly strangled.

And in that most cosmic twist of irony, when people love themselves and the will to power more than they love the truth, it eventually drags them over the precipice and destroys them, absolutely.

"Then you will know the truth, and the truth will set you free." John 8:32

There are no sidelines, for everyone serves something or someone, if only by default. The most significant choice we make is whom we serve, and to whom we therefore gradually bind ourselves. It is a terrible choice, with profound implications, but so often made with little thought, lightly, without a view to the consequences. We live on forever with whom we have served in this world.

Free will. Ain't it a bitch?

Have a pleasant weekend.