Extraordinary Popular Delusions and the Madness of Crowds

I have never found success these days by running with the masses, popular opinion and beliefs. The most intelligent and successful individuals in today’s world are those that have turned left while the whole world was turning right..

Those that think and act opposite to what the rest of society is doing at any given moment will more often than not find themselves capitalizing on everyone else losses.

In his 1841 work Extraordinary Popular Delusions and the Madness of Crowds, Charles Mackay identified a common thread of individual and collective idiocy running through such follies of the past as alchemy, witch-hunts, prophecies, fortune-telling, magnetizers etc..

Is anything different with today’s greater society as a whole? Absolutely not.. except instead of the common delusions of the 1840s, people today are disillusioned more and more by their own financial and social lives.

I wrote last week about how large populations and groups of people as a whole are stupid, illogical, disillusioned and ultimately in the end unsuccessful. Individuals whose minds think separately from the greater fools will always win, and it is those minds that are able to manipulate those large populations into doing and acting in ways that profits the manipulators at the expense of the rest.

This sort of idea plays itself out in real life over and over again.. it is engrained in human nature. Simple examples include the lead-up to the US Housing Bubble crashing where bankers and mortgage industry insiders started to recognize that millions of mortgage loans were junk and were doomed to fail from day one, absurd amounts of money lent to people who would triple the size of their houses overnight.. down payments financed through lines of credits and in often cases no real secure form of job or income. These bankers realized fast that the point of implosion was fast approaching, they packaged up “junk mortgages” and re-named those packages “mortgage back securities” and marketed them to the fools and idiots of the masses who had no idea what they were but they were SOLD on the promises, spreadsheets and upward-pointing arrows on fancy graphs that seemed to promise fool proof returns.. it was the trendy thing to do at the time, in fact many of the same people who were lent money in those junk mortgages in the first place were buying into mortgage backed securities..essentially they were buying into their own stupidity.

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We all know how that played out in the end.. Who won and profited by thinking as an individual and not running with the fools?? Those unethical bankers and mortgage insiders.. as filthy as it sounds it makes a striking point, those that think and act opposite to the majority more often than not profit while the rest lose.

What does any of this have to do with us? Canadians? Well a lot.. we are all subject to the same type of “greater fool” brainwash and entrapment that the winners and profiteers of society lure us into… remember those commercials not too long ago heavily marketing gold as a safe haven to the next “Financial Armageddon”? How many millions of people bought into gold while it was at/near its highest historical levels solely due to what some modern day vacuum cleaner salesman on TV was telling them? How many people bought because “everyone” was doing it? Those of you who are in the know with gold know how far it has plummeted in recent months back to its normal levels, the profiteers were again those that thought and acted against the flow of fools.. sold while everyone was scammed into buying while it was at record highs.. the rest lost.

How many modern day vacuum cleaner salesmen are peddling are streets these days now selling us over priced, poor quality, cookie cutter real estate? How many of these high school graduate marketers and “industry professionals” are pushing products on consumers that are consuming in many cases 80% of some peoples take home pay? How far can this society full of fools, illogical thinkers, disillusioned minds and madness go before it finally collapses on itself, and once again draw that definitive line in the sand separating the losers from the winners.

By the way, you as an average Canadian individual owe $1.60 in debt for every $1.00 of income you make. I assume you passed grade school math and understand what that sort of ratio entails.

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Beware of the winners that will eventually make their profits off your debt. Beware of the Delusions and Madness of Crowds.. are you in the crowd?

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3 thoughts on “Extraordinary Popular Delusions and the Madness of Crowds

  1. Pingback: Have you CONSIDERED the DATA? | My Mind

  2. Pingback: These things never really end well… | My Mind

  3. Pingback: “Management by Best Seller” | Medical Device CEO

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