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Post by oldnick on Oct 21, 2014 22:08:01 GMT
Sterling, you appear to be gambling that Sterling won't suffer massive devaluation that will make your £85,000 worthless. Surely you should have your money outside the UK now so that you won't be caught up in the inevitable capital controls if that starts to happen? I know, it's nerve-racking. It's a five-year bond. I have no choice. I think it's 50/50 whether there'll even be a Scottish Widows in 2017 lol You're dead right. What seemed for a while like a very lucky piece of timing has turned into a high risk gamble. Makes the old axiom "learn from your mistakes" a bit hairy frankly. adrianc: "Just for reference, would you be so kind as to explain what you see as a low risk investment, then?" The above bullet-point list. Basically anything where your asset isn't simultaneously someone else's liability, so that you're not relying on their continued success in order to prosper. If you buy a Rembrandt then you're not taking a gamble on some third party doing well. (No I don't have fine art works or anything else of value in my house before anyone thinks to come a'hunting.) If you can't stretch to a Rembrandt then a handful of junk silver will do, or some diabetic cereal bars, pairs of shoes, bottles of Scotch etc. Basically if you bought a single malt once a month instead of dining out, you might be glad some day. Owning a Rembrandt, or any of the things on your list, with the aim of being able to sell them one day, still relies on a third party having the wherewithal and therefore having 'continued success' in order that you prosper.
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Post by Deleted on Oct 21, 2014 22:18:13 GMT
That's a very good point. I was lazily quoting Doug Casey about tangible assets not being "simultaneously someone else's liability". You're quite right: they don't exist in a vacuum: they depend on some unknown future third party (or a small number of them anyway) from a pool of billions, rather than one specific third party right now. Also of course the risk of a specific third party sinking you is much greater because the risk with a Rembrandt is that absolutely nobody wants to buy. That may turn out to be true in the UK but the market's global. The risk with a specific third party is that that one third party will cause you losses (say holding shares in Barclays Plc, which seemed like a good idea in April QQ).
With regard to selling on a Rembrandt, short of a major shift in taste, it's likely there'll still be plenty of billionaires ready to snap up your picture after even the most radical shift in the global wealth distribution. Sure you might be selling to someone in Singapore rather than Paris but that's fine.
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Post by Deleted on Oct 21, 2014 22:29:19 GMT
@2 Do you mean that you think the theory of communism has these negative traits, or that the way it has been practised is at fault? @3 I find it difficult to see through all the hyperbole to your actual viewpoint. @4 You must have a very compelling reason for living amongst people that you hold in such low regard. Or perhaps you regard yourself so highly that I would be considered by your standards? It's not really a very constructive point to be making even if you do believe it and doesn't advance the conversation at all. I'm picking up a vibe of anger and resentment from your posts on this forum and wonder why. I suspect you exist in the top ten or even one percent of this nations personal wealth brackets and, assuming you have your health and a long life ahead of you, have much to be grateful for. You exist in an imperfect system yes, but you could perhaps seek to extract more happiness from that situation than you now appear to do. Just a suggestion, not trying to shut you down or anything. @2: yes. There are lots of problems with socialism/collectivism of all kinds. The most serious is the lack of prices. Without prices to serve as a signal for where a need is most urgent, it's basically impossible to allocate resources, which is why in the USSR you found situations where people could get hold of soya beans but not butter, or vice versa. There's no mechanism for automatically handling the various subjective preferences of hundreds of millions of people. The market's perfect for that: if there's suddenly a craze for yoyos, the price of a yoyo goes from 50p to £5 very rapidly, leading to the allocation of the yoyo supply to the most urgent need and signalling to toy producers that they should focus on yoyos rather than marbles say. In the USSR this is impossible (and sadly increasingly in the UK too: think NHS, State Schools, Police, Roads etc.). Another big problem with socialism/collectivism is the core philosophy: from each according to his ability to each according to his need. This is madness: it means if you display too much ability, people will put on you and make you work harder: don't do it!!! Whereas if you have a need, you get an easier time of it, so if you don't have a need you'd better find a way to get one! That way lies madness and ruin. @3 you're right. I'm sorry for my tone. I had a bad experience here last time, which was almost certainly entirely my fault. Having been temp-banned for a while I find myself bending over backwards to be polite, but there's still a way to go with that and by nature I'm an obnoxious git. Sorry. OK to the point of democracy being favoured in certain places rather than others: no clue, you might be right. As to the idea there are places worse off than the "no free market thankyou we're British" Cameroon system, that's trivially true of course but it has no bearing on State actions that have horrible results: it's still better if we don't hike the minimum wage, introduce tariffs and price fixes, make new regulations and indeed regulatory bodies and generally behave like Castro. @4 I like to think my self-esteem is healthy: I don't make bold claims about expertise and ability, but am not shy to stand behind something that seems to be true. The people in my town are mostly government parasites of one sort or another, prone to chronic dishonesty and aggressive outbursts. This is nothing unusual. That's just the social workers. I'd flee to New Hampshire or Chile but I can't really afford it, am too lazy, hate upheaval and am too pessimistic to believe that there aren't any a-holes in those places. There's not a great deal of choice is there: we all have to accept there will be vomit on the pavement and random vandalism from time to time, people who always seem to have a reason why they're not able to work for a living, people who like to lay down the law and claim a wage to "help the poor" and so on. For some reason I'm in Doug Casey mode tonight, sorry: I heard him say at some conference recently that if you had to ask people to name some virtues, in Western societies nowadays they'd probably go for Faith, Hope and Charity, but these are not only not virtues but are in fact vices. oldnick @gratitude: absolutely. We live in the best of all possible times. I just don't see why that necessitates giving David Cameron a get out of jail free card when he's got people like me in his sights. In fact actually I'm going to put that in stronger terms: the fact we have all this material wealth, thanks to capitalism, actually makes it all the more vital that we don't allow well-meaning (and not so well-meaning) Central Planners to send us back to the 18th century. The ungrateful thing would be to just assume that all the convenience and material luxury of our lives is just given by God so there's no need to fight to protect it. That would be to take our gifts for granted. If the rich are only rich because they're hoarding all the stuff they stole from the poor, when exactly was this time when the poor had all the stuff? Prior to the industrial revolution, redistributive taxes would have achieved precisely nothing. There was no wealth to redistribute. The Industrial Revolution created wealth: when one person trades with another, both are better off or they wouldn't bother doing it (Thomas Aquinas). The standard of living (life expectancy and so on) leapt ahead in the 19th century and first part of the 20th. That's gone into decline ever since the Welfare State took over the role of helping the poor. Coincidence? Who knows, but charity is more effective than middleman's-wages-plus-charity as a matter of simple arithmetic. Why did kids stop being sent to work at young ages? Because the kind overlords passed a law? No, because for the first time in human history, it was possible to feed a family without having the kids work. Why did people stop starving to death? Because a Central Planner passed a law against it? Thou shalt not starve to death! Boom, sorted!! No. When child labour was banned in Bangladesh, children either starved to death, went back to agriculture (for lower pay and higher risk of death) or into child prostitution (source: Oxfam). The disappearance of child labour, and slavery, is one of the many crowning glories of voluntary trade and capitalism. Increased productivity doesn't mean working longer hours: it means using a till instead of adding up in your head or on a bit of paper. Your time becomes more valuable. It's the only route to riches: passing a law to pay everyone £100 an hour just makes most people unemployable until such a time as the inflation of the money supply has reduced the value of £100 accordingly. It's a harsh truth that you can't magic progress out of thin air, but when you think about it, it's a good thing: if all it took to increase happiness was a willingness to steal and coerce, what a horrible world it would be (is). The alternative, tried and tested in the 19th century and early 20th, is voluntary cooperation for mutual benefit. We should try it again some time. @1%: don't know, probably not. 10% probably, but then so is almost everyone using these forums. Bear in mind that more than 50% of all people have net negative personal worth and the next thirty percent hover around zero. Anyone with £5k in savings is probably in the top 15% and anyone who owns their home without a mortgage is probably in the top 10%. Basically anyone over 60 who's worked and saved is in the top 10%. I believe the figure is 500k for entry into the 1%, in which case I'm definitely not but many here probably are. Anyone who owns a normal home in London is in the 1% and therefore a villain in the targets of Vince Cable's crosshairs. What people need to recognise is that Ed Miliband is coming after absolutely anyone with a cash deposit account. Only under socialism could working hard and under-consuming be a badge of dishonour.
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james
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Post by james on Oct 22, 2014 5:28:32 GMT
if there's suddenly a craze for yoyos, the price of a yoyo goes from 50p to £5 very rapidly, leading to the allocation of the yoyo supply to the most urgent need and signalling to toy producers that they should focus on yoyos rather than marbles say. In the USSR this is impossible It was somewhat restricted in the USSR but in Russia today it's more possible, particularly for those who can afford to pay the relevant bribes, which unfortunately remain endemic. (and sadly increasingly in the UK too: think NHS, State Schools, Police, Roads etc.). Are you advocating privatisation of those things? Scrpapping the NHS and switching to say the older US system of insurance which insurers could refuse to sell to people they didn't want to sell to, or could cancel cover after a negative event happened that increased their future risk? Another big problem with socialism/collectivism is the core philosophy: from each according to his ability to each according to his need. You aren't a fan of progressive taxation, then? How about VAT which has a flat rate but takes more revenue from those who spend more on goods subject to it? Should it be replaced by a flat rate tax set at £x,000 on all of us? I'd flee to New Hampshire or Chile but I can't really afford it New Hampshire is probably a really nice place to live, much of the US is. You only need half a million Dollars to get an investor visa green card, not out of reach for a fair number of people, particularly those who own property in SE England. Chile is probably far cheaper. too pessimistic to believe that there aren't any a-holes in those places There are some but overall people in the US are pretty easy to get along with and friendly, particularly outside the bigger cities. If the rich are only rich because they're hoarding all the stuff they stole from the poor, when exactly was this time when the poor had all the stuff? For some definitions of rich all it takes to be rich is to be older and have provided for your retirement. A young person has capital in the form of a future ability to do work. An older person has used that capital and better have accumulated financial capital to replace it when they are no longer working at all. Did you know that about 30% of the UK population are millionaires? Many of them courtesy of owning property in SE England, others from adding pension capital that they will need to live on later. A million Pounds invested is enough to generate £40,000 of income if you use the quite common 4% of capital as income in retirement valuation. Does that make the person rich? Maybe that depends on whether you're an 18 year old working for minimum wage who can't think where they might be in thirty or fifty years themselves or who doesn't realise that accumulating a million doesn't take a huge expenditure if you start early and get employer matching. That million would take £375 gross a month for 50 years at 5% real investment return. Employer matching could halve that to £187.50. Basic rate tax relief cuts it further, to £150 net. Do it in a salary sacrifice system and the basic rate (loosely) employee NI saving cuts that down to £127.50 a month net cost. Is it worth £127.50 a month to be a millionaire by the time you retire, or retire earlier with less but still quite a lot? Would the 18 year old even consider it? Probably not if on minimum wage, on the 21 and over minimum wage it's about 11% of net monthly pay at 40 hours a week for 52 weeks a year. Around 15% of the 18-20 minimum wage. Easier to grumble about the rich than do something about getting a million yourself.[/quote]
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Post by Deleted on Oct 22, 2014 18:41:28 GMT
james lol I can't get my head round the quotation system. Sorry about that.... QQ We're getting a bit off topic, but when ideas outside the mainstream of Labour vs Tories arguing about 7% of the £300b budget, it sometimes raises questions that people want to talk about so I'm going to answer you if that's ok. OK NHS: yes absolutely. It's the toughest of the lot, certainly, and I can't think how I would personally get rid of it, but it does need to be gotten rid of. At the moment what we have is a system in which a central monopoly extracts revenue through taxes. This creates a fixed amount of resources to be meted out. These are then distributed to the various providers in all sorts of merry ways, after deductions for administering that process of course. Once it gets there, the service providers are faced with however much work they're asked to do, and they have to prioritise because the resource pot cannot simply be increased: they get what they get, with a certain margin for overspend, and then they prioritise the work accordingly. That's very bad when it comes to your health!!!!!!!!!!!!!! You don't want your GP to be thinking about the cost! Many GPs openly talk about 'triage', as if they're in a war zone and the best they can do is leave the dying to just die and focus on those who might survive. It freaks me out how many people don't see any problem with that system, or indeed see it as heroic! It's anything but heroic, and look at the wages... Jesus Christ! There are waiting lists. People actually die on these waiting lists. Let me just say that one more time to highlight the seriousness of the topic: people die on waiting lists. What would a free market system look like? Well for starters nothing at all like the American system of Medicare, Medicaid and Obamacare, with the FDA and so forth laying down the law at every step. It'd look very different to that: basically any willing provider selling whatever services they can get paid to provide. Insurance would play a huge part I'm sure, but so would agreed-in-advance treatment plans for chronic, ongoing conditions by people specialising in those conditions. Pay-as-you-go may also be popular for younger, fitter patients, though some (probably a majority) may consider insurance wise, at the very least for expensive, catastrophic treatments. Sorry this is already getting long. I'm not here to preach to anyone. This thread was about defining the context for p2p: what is it, what are the implications. But yes, of course it does touch on these wider issues. What wouldn't you see in a free market health system? Well for starters, people would definitely not be dying on waiting lists that's for sure. People wouldn't die waiting for the FDA to approve a new drug: they'd just buy it! If it killed them, that's a risk they had a right to take: far better than dying when a good drug was a year from approval. That too happens all the time under socialised medicine. What else wouldn't you see? Endless about "you're a burden on the NHS": no-one's a burden in a free market - if you want the service, you can bet there's someone who wants to give it to you. If you live a rough life, your premium rises, which deters you from doing more of it (maybe). That's another good thing: what deters people from ending up in A&E once a month with alcohol poisoning, other than death? Under the NHS system, if you get a hip replacement, someone else has to wait. In the free market, I'm pretty sure there'd be enough people capable of doing two hip replacements that week. If not, the wages are likely to be good so go train and enter the profession. And right there's another advantage: get rid of all the licensure and shift to an eBay-style rating&review system. Sure the overwhelming majority will still want the accreditations that come from the various colleges, but in terms of barriers to the industry, we'd be better off if it were much, much easier to enter. A G-grade nurse is usually more than capable of handling many of the duties of GPs. That's why we have more and more "nurse practitioners", but why not open it up completely? If you're capable and trained, and able to get indemnity insurance, and the patient's happy to buy your services, what business is it of a third party to deny both sides the deal they both want? OK this is a wall of text already before even answering the rest. Just assume all the other answers take the same form. Oh taxes: yeah they're a bad thing. Taking 'spare' money from people who've earned it is obviously immoral, since they did nothing wrong to get punished: quite the opposite in fact. But it's worse than that: anything you end up doing with that money is guaranteed to be a worse deal, since you have to pay someone to administer the redistribution first. But it's worse than that: what you do end up doing, unless it takes the form of simply giving it to someone as cash, is guaranteed to be less than optimal in terms of the beneficiaries' preferences. Services in kind are never as good as cash. So at best tax is theft and at worst it's theft plus three types of waste. OK the rest follows from that. Basically the proper role for the State is its own rapid and permanent dismantling. It has no other role.
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Post by oldnick on Oct 22, 2014 20:16:04 GMT
james lol I can't get my head round the quotation system. Sorry about that.... QQ We're getting a bit off topic, but when ideas outside the mainstream of Labour vs Tories arguing about 7% of the £300b budget, it sometimes raises questions that people want to talk about so I'm going to answer you if that's ok. OK NHS: yes absolutely. It's the toughest of the lot, certainly, and I can't think how I would personally get rid of it, but it does need to be gotten rid of. At the moment what we have is a system in which a central monopoly extracts revenue through taxes. This creates a fixed amount of resources to be meted out. These are then distributed to the various providers in all sorts of merry ways, after deductions for administering that process of course. Once it gets there, the service providers are faced with however much work they're asked to do, and they have to prioritise because the resource pot cannot simply be increased: they get what they get, with a certain margin for overspend, and then they prioritise the work accordingly. That's very bad when it comes to your health!!!!!!!!!!!!!! You don't want your GP to be thinking about the cost! Many GPs openly talk about 'triage', as if they're in a war zone and the best they can do is leave the dying to just die and focus on those who might survive. It freaks me out how many people don't see any problem with that system, or indeed see it as heroic! It's anything but heroic, and look at the wages... Jesus Christ! There are waiting lists. People actually die on these waiting lists. Let me just say that one more time to highlight the seriousness of the topic: people die on waiting lists. What would a free market system look like? Well for starters nothing at all like the American system of Medicare, Medicaid and Obamacare, with the FDA and so forth laying down the law at every step. It'd look very different to that: basically any willing provider selling whatever services they can get paid to provide. Insurance would play a huge part I'm sure, but so would agreed-in-advance treatment plans for chronic, ongoing conditions by people specialising in those conditions. Pay-as-you-go may also be popular for younger, fitter patients, though some (probably a majority) may consider insurance wise, at the very least for expensive, catastrophic treatments. Sorry this is already getting long. I'm not here to preach to anyone. This thread was about defining the context for p2p: what is it, what are the implications. But yes, of course it does touch on these wider issues. What wouldn't you see in a free market health system? Well for starters, people would definitely not be dying on waiting lists that's for sure. People wouldn't die waiting for the FDA to approve a new drug: they'd just buy it! If it killed them, that's a risk they had a right to take: far better than dying when a good drug was a year from approval. That too happens all the time under socialised medicine. What else wouldn't you see? Endless about "you're a burden on the NHS": no-one's a burden in a free market - if you want the service, you can bet there's someone who wants to give it to you. If you live a rough life, your premium rises, which deters you from doing more of it (maybe). That's another good thing: what deters people from ending up in A&E once a month with alcohol poisoning, other than death? Under the NHS system, if you get a hip replacement, someone else has to wait. In the free market, I'm pretty sure there'd be enough people capable of doing two hip replacements that week. If not, the wages are likely to be good so go train and enter the profession. And right there's another advantage: get rid of all the licensure and shift to an eBay-style rating&review system. Sure the overwhelming majority will still want the accreditations that come from the various colleges, but in terms of barriers to the industry, we'd be better off if it were much, much easier to enter. A G-grade nurse is usually more than capable of handling many of the duties of GPs. That's why we have more and more "nurse practitioners", but why not open it up completely? If you're capable and trained, and able to get indemnity insurance, and the patient's happy to buy your services, what business is it of a third party to deny both sides the deal they both want? OK this is a wall of text already before even answering the rest. Just assume all the other answers take the same form. Oh taxes: yeah they're a bad thing. Taking 'spare' money from people who've earned it is obviously immoral, since they did nothing wrong to get punished: quite the opposite in fact. But it's worse than that: anything you end up doing with that money is guaranteed to be a worse deal, since you have to pay someone to administer the redistribution first. But it's worse than that: what you do end up doing, unless it takes the form of simply giving it to someone as cash, is guaranteed to be less than optimal in terms of the beneficiaries' preferences. Services in kind are never as good as cash. So at best tax is theft and at worst it's theft plus three types of waste. OK the rest follows from that. Basically the proper role for the State is its own rapid and permanent dismantling. It has no other role. Who knew peer to peer finance meant so much? To my mind p2p should involve lenders in making decisions about who they lend to. Without that element of participation it is merely deposit taking, and shouldn't be lumped into the same category.
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Post by bracknellboy on Oct 22, 2014 20:18:57 GMT
I guess Sterling @ p2p-millionaire.com isn't the only one who can't get his head around the quoting system on this forum :-) (makes sense before the inevitable edit)
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Post by bracknellboy on Oct 22, 2014 20:27:11 GMT
Sterling @ p2p-millionaire.com: I find myself in a curious position. In that on the same thread and topic I find that I am in philosophical agreement with ~ 90% of one of your substantive posts, and indeed recognise one of your 'what if' scenario "plagrisims" (no judgement intended) - albeit I can't recall whether that comes from a P J O'Rouke or Tim Harford text (which of course may itself be 'lifted') - and on the other hand I then disagree with the majority of a subsequent follow on post which is intended as a logical extrapolation. Intriguing.
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webwiz
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Post by webwiz on Oct 22, 2014 20:44:03 GMT
the bank will absorb any losses and if they cant its is guarenteed (up to a certain amount) to be repaid by the government It is not the government. The FSCS is paid for by a levy on IFAs, which is one reason why their fees are so high.
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mikes1531
Member of DD Central
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Post by mikes1531 on Oct 22, 2014 21:01:34 GMT
the bank will absorb any losses and if they cant its is guarenteed (up to a certain amount) to be repaid by the government It is not the government. The FSCS is paid for by a levy on IFAs, which is one reason why their fees are so high. Don't the banks and building societies also contribute to the cost of FSCS coverage?
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james
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Post by james on Oct 22, 2014 23:15:43 GMT
I guess Sterling @ p2p-millionaire.com isn't the only one who can't get his head around the quoting system on this forum :-) (makes sense before the inevitable edit) I'll leave the evidence of my guilt...
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james
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Post by james on Oct 22, 2014 23:24:11 GMT
the bank will absorb any losses and if they cant its is guarenteed (up to a certain amount) to be repaid by the government This £85,000 is not normally paid for by a levy on IFAs. The deposit fund is normally paid for only by deposit takers in fee block A.1, mainly being banks and building societies. There are cross-charging facilities that could be invoked to potentially spread a levy over all seven of the groups of fee payers. Deposit-related things are in fee block A with the IFAs but block A has 16 sub-blocks that split out the IFAs from the deposit takers. The IFAs would generally be involved only in the £50,000 investment-related area or the unlimited insurance area. What the FCA does is ether pay small claims out of its reserves or borrow the money from the Bank of England. Then it sets a suitable levy to repay the amount borrowed and the interest on the borrowing over many years.
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mikes1531
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Post by mikes1531 on Oct 23, 2014 2:11:48 GMT
What the FCA does is ether pay small claims out of its reserves or borrow the money from the Bank of England. Then it sets a suitable levy to repay the amount borrowed and the interest on the borrowing over many years. If the claims can't be paid out of reserves, then I'm afraid it looks an awful lot like QE to me.
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james
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Post by james on Oct 23, 2014 7:59:27 GMT
I agree. Indirectly the Bank or Treasury will have purchased lots of bonds, probably, since the failure is likely to be a failure to make interest or capital payments on time.
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debeast
(o)(o)
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Post by debeast on Oct 23, 2014 12:11:07 GMT
Well you've clearly not been reading my posts if you think I take life very seriously. However I will first deal with any plans you may have to survive some apocalyptic future by stocking up on sardines. There is no certainty that food for five years, or even fifty years, would be sufficient to tide you over till better times come around. You should buy sufficient working horses to form a viable breeding stock, learn to plough with them, and find some defendable land. Oh and have enough children to take over from you when your back gives out. Alternatively, just join the Amish community - how do you look with a beard? This all assumes that those not so far seeing as you don't descend on you like a swarm of locusts and eat your horses - and, possibly, you into the bargain. As you can guess, I don't buy into the Hollywood versions of 'the future', as it's unlikely you'll look that handsome at the end of a days ploughing and you certainly won't have the energy for all those tangled relationships. As for dealing with the real world; with age comes an acceptance of the imperfect. A fair society (communism with a small c) has been tried but humans are incapable of following the rules. Democracy seems to work best the further from the equator one lives. Dictatorships like it hot. We may imagine our society and financial system are irredeemably broken, but consider the millions who would happily swap places with you given the chance. You will have noticed I haven't gone into a detailed financial strategy yet, nor will I. You can make your own mistakes; there's nothing to learn from me on that score. All I will advise is that if you drive a car, let somebody go in front of you - it might be me! (and don't be cross if I don't acknowledge your kindness; I'm clinging on to the steering wheel with both hands as likely as not). Perhaps a christmas present www.amazon.co.uk/The-Knowledge-Rebuild-World-Scratch/dp/1847922279:-)
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