by Charles Hugh Smith, Of Two Minds:
When expectations are raised to impossible heights based on the promise of exponential financialization, the credibility of the Status Quo is doomed.
Data is important, but not all trends can be quantified. Longtime readers know that I value data and often use charts to explain the forces of transition/collapse. But there are profound dynamics that are not easily quantified, instances in which quantification may obscure our understanding.
Credibility and expectations are two such dynamics. Both credibility and expectations are very real forces, despite their status as inner states immune to direct measurement.
Beneath the surface of financial statistics, the real bedrock of any political and financial Status Quo is its credibility in the minds of its subjects. Once the people lose faith in the system, it will collapse under its own weight, a process I described in When Belief in the System Fades (March 12, 2008).
The corollary to this structural need for highly motivated, dedicated people to work the gears is that if their belief in the machine fades, then the machine grinds to a halt.
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