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SOVEREIGN MAN

Can you see this gorilla?

I had lunch yesterday with one of the sharpest financial minds I’ve met in a long time at a rather picturesque setting overlooking Evergreen Lake, west of Denver.

The restaurant patrons were all well-to-do residents of this wealthy community… in fact, the whole area is like a bubble, largely shielded from any negative effect of the economic fallout thus far. Most of these folks have gone about their lives over the last few years completely oblivious to the global financial crisis.

My friend agreed; he told me, “Most of the people sitting in this restaurant haven’t felt a thing. Their guard is down, and they have no idea what’s coming. It makes me nervous.”

Indeed, there’s a large segment of people in this country who have not been directly affected by the meltdown. They still have their jobs, they haven’t been foreclosed, they haven’t been directly threatened by the government, they haven’t been robbed (by the private sector).

Their experience with the poor economy is second-degree… what they read in the papers or see on TV. But overall they live in a bubble. I can only describe this as the calm before the storm… and people are completely blind to the clouds forming around them.

Being blind to the obvious is part of the human condition.  And this morning, a friend from London sent me an email describing a rather interesting experiment on the subject. It’s called the Invisible Gorilla.

Subjects in the experiment are asked to watch a video in which groups of players are passing basketballs back and forth. Half of the players in the video are wearing black uniforms, half white.

The subjects are asked to -ignore- the players wearing black jerseys and count the number of times the players wearing white pass the ball to each other. Halfway through the short video, someone wearing a gorilla suit walks on to the screen, thumps his chest, and walks off.

Here’s where it gets interesting– about half of the subjects participating in the experiment don’t notice the gorilla. They’re so focused on counting the white team’s passes and ignoring everything else that their minds naturally filter out something completely obvious.

What’s more, when they’re told about the gorilla after the experiment, most people refuse to believe it. It shows without doubt that (a) people can be blind to the obvious… and (b) people can also be blind to their blindness.

There’s a lot of this happening right now. A lot of people live in their bubbles, detached from reality and completely blind to obvious signs.

The truth is that the insolvency of entire nations in the western world is an unequivocal fact.  And it’s not just Greece or Italy or Ireland. It’s the United States as well.

According to the US government’s own 2010 financial statements, the cost of just three sacrosanct programs– Defense, Social Security, and Medicare– exceeded all of the tax revenue collected that year by $10 billion.

In other words, the US government was already in the hole by $10 billion before it paid the light bill at the White House. Or hired any child molesting TSA agents. Or provided bailout funds to Solyndra. Or even paid a single dime of interest on the federal debt.

For several years now, the government has been in a position where it has to borrow money just to pay interest on the money it has already borrowed.

This is the point of no return. Examining the long and distinguished list of countries over the last 800-years that have been in this position before, there is hardly a single example of a nation escaping default and/or hyperinflation. This time is not different.

Now… when the decay comes, it comes quickly. Remember the 2008 Lehman collapse? The markets were plodding along with minor volatility for the months leading up to it. The warning signs were there, but almost everyone was blind to the gorilla thumping its chest. Then suddenly, poof. Trillions of dollars of wealth wiped out.

The same thing happens when a nation collapses. Everything is fine until it isn’t. Look at how quickly the situation deteriorated in Greece. Or Argentina.

We have to force ourselves to wake up… to stop being blind to the giant gorilla thumping its chest right in front of us.  It’s easy to believe that nothing bad is going to happen. That this time is different. That this country is different. That the system can’t collapse.

Dangerous words. Things may be fine now, but as quickly as the situation can deteriorate, rational, thinking people have a limited window of opportunity to take action. The gorilla is thumping its chest now. How soon will the next ‘Lehman-style’ event be? Can you afford to wait?

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

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About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

Comments on this entry are closed.

  • Cj

    I wish a membership to smc was included with the DVD kit as I believe it used to be. Not complaining but it seems like a logical bonus. Although since I haven’t been through the payment process I’m assuming it may have been dropped and now an upsell. Either way still considering the new offer as it is a 200 price reduction…matt huge week for you. Bummed I missed the Florida thing with you and Craig. That was definitely in my price range. Always glad to get my emails from anything simon/ matt related.

  • Val

    Nice to have you in Denver. Today is an exceptionally nice day for this time of year.

  • http://twitter.com/MichaelPorfirio Michael Mason

    I just tried the test on one of my biz partners.

    Had no idea about Magilla Gorilla.

    Expand it out, and yeah, most people, even most very astute people have no idea what is going on.

  • spirit_30

    Well … we certainly know what gender the gorilla is … I have friends and family that are completely clueless as to what is going on.  I tell them to prepare but some of time are more interested dealing with what is happening in their bubble.

    • reina

      same here. I have friends in USA & Europe. I live in Asia, I am telling them to prepare for what’s to come. Noone believes me! One of them told me that OWS is just a small group.. really?!?!

    • Pollywog

      My family sees me, the matriarch, as the eccentric loon and tie it up to my old (?) age (64). Prepare… beans and rice can go a long way when there is NO FOOD in the stores.

  • Lenzorizzo

    A perfect example of the unreliability of eyewitnesses. Plenty of people are sitting in jail on the basis of eyewitness testimony.
    “Who you gonna believe, me or your lyin’ eyes?” -R. Pryor

  • http://www.facebook.com/people/Hank-Warren/1670642137 Hank Warren

    Fiat money, yet another violation of our rights. The gov’t constantly violates our rights. They violate the 1st Amendment by caging protesters and banning books like “America Deceived II”.
    They violate the 4th and 5th Amendment by allowing TSA to grope you.
    They violate the entire Constitution by starting undeclared wars.
    Impeach Obama, support Ron Paul.
    Last link of “America Deceived II” before it is completely banned:
    http://www.amazon.com/America-Deceived-II-Possession-interrogation/dp/1450257437

  • rick s.

    Simon, thanks for the post today.  I live in Lafayette, about 20 miles northeast of Golden.  I see the same thing as you and your friend did in Evergreen.   People in the region are clueless.  And my town is not nearly as affluent as Evergreen.

    Thanks for keeping MY head out of the clouds.

  • apeman2502

    Brilliant. Thanks for the picture.

  • http://www.marketmentat.com/ Kratoklastes

    OK fine – somebody has to be ‘that guy’, so it may as well be me. 

    Seems to me that the photo (of a guy airing his junk) is of a CHIMPANZEE, not a gorilla.

    It would be like showing a photo of Denver in a story about Seattle.

    • dogsniff

      Thats the first thing I noticed too.  Anyone with any scientific curiousity would know the difference just based on testicle size alone!  But  clearly the author does not study why things are the way they are with other species.  At least the rest of his article was good.

  • http://www.facebook.com/donovan.kerr Donovan Kerr

    What you see, is not necessarily what you see !!!

  • dale

    According to the GAO, Social Security is secure until 2036.
    Medicare is payroll deducted.
    Trillion Dollar wars and a defense budget of almost a trillion is where
    the paid for politcians are wasting our Tax Dollars.     

  • Dave_Mowers

    Hmmm.. why does this not make sense?

    “The
    U.S. government has a technology, called a printing press (or today, its
    electronic equivalent), that allows it to produce as many U.S. dollars as it
    wishes at no cost.”

    -Ben Bernanke, Chairman Federal Reserve

  • Roidos

    “We can evade reality, but
    we cannot evade the consequences of evading reality.” AYN RAND

  • Matthew Lee

    The psychological term for what you describe in your article is ‘normalcy bias’.

  • http://twitter.com/Akiyama64 Akiyama

    I like how I read this after CNN calls America’s decline a myth. Seriously: http://www.cnn.com/2011/11/17/opinion/asghar-globalization/index.html?hpt=op_mid

    Of course, I don’t see a rise for Americans. What are they going to do? Make a new, huge bubble to pretend that things are okay next?

  • Neretva

    The Invisible Gorilla: And Other Ways Our Intuitions Deceive Us

    http://www.amazon.com/Invisible-Gorilla-Other-Intuitions-Deceive/dp/0307459659

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