History Revisited?

I have just finished re-watching Jacob Bronowski's wonderful 'The Ascent of Man' series, which I first saw as a teenager.

In his segment on Isaac Newton, he notes that Newton couldn't get the attention of the rich and influential in his middle years. The reason was that there was little interest in science and technology, since so many were making fortunes in the South Sea Bubble scam.

It struck me at that moment that the disinvestment in science and technology in the US and UK for the past 30 years may be due to a similar set of cicumstances, since so much money was being conjured out of thin air, first in the dotcom bubble, and then in artificial housing prices.

Welcome, the Gurkhas

If we're not a country fit for heroes, we're a country fit for nothing. By righting this injustice, we have recovered a little of our honour.

The next Mr Speaker

Vince Cable? Frank Field?

The biggest bubble: human population

I've been watching BBC1's "Countryfile" and there was a reference to some CO2 reduction target, required because the world's population will be 9 billion by some date.

This is cart before horse. If we don't want the world to become composed solely of (a) people (b) things we need for food and drink c) weapons and (d) radioactive and otherwise polluted and barren desert, we need to:

1. limit human population growth...
2. ... without creating demographic gender imbalance
3. ... or demographic age imbalance

I read "Blueprint for Survival" in a Penguin edition in the 70s. One point it discussed, which had not occurred to me, was that the deceleration - population stabilisation/reduction - has to be slow and planned, otherwise we will develop serious imbalances that will destroy the economy and trigger a crash - a real, lethal one, not just the loss of some savings.

Time - time long overdue - for a plan to tackle this super-bubble. Wind farms and CO2 targets are near-irrelevancies.

The memory hole

From The Grumbler, but strangely, on page 9 in the dead tree version, rather than the front page:

Tony Blair dodged possible fire over his housing deals after hundreds of expenses claims were 'accidentally' shredded.

Documents itemising some of the then Prime Minister's receipts for 2001-02 were destroyed by Commons officials 'by mistake'.

Raising his voice above the shredders' roar, a source close to a former Prime Minister bawled that he was a pretty straight kind of a guy. Your correspondent made his excuses and left, pursued by an alcoholic pugilist making dark references to discoveries in woods.

Still stuck on the 'B' Ark

At the university where I work, we have a few good science programs, and a well-respected engineering college.

In the past few years, we have seen significant increases in enrollment. I attribute that to:

a) the fact that there are fewer good jobs out there

and

b) while the typical 18-year-old is lazy and ignorant, they are not stupid. Consequently, they are flocking to the analytical fields (where the jobs are), including mathematics and science education.

However, our student services people are convinced that it is because of the advertisements, 'student appreciation days', and the like, not the teaching that we do.

Accordingly, they recently brought in management experts to help us in recruitment and retention efforts.

And where did these experts come from, to help out academia? The Disney corporation!

I must really work for a Mickey Mouse operation.

Dow 4,000 yet again

The Mogambo Guru is off on one of his comedy riffs again, and reiterating his devotion to gold, but here's a statistic he quotes midway:

“the price-to-earnings ratio for the Dow Jones Industrial Index is now a hefty 43.1! It should be, historically, less than 20!”

Do the math, as they say. In fact, I'll do it for you now: take the Dow at close the night before Mogambo ranted (8,469.11) and multiply by 20/43.1. Result: 3,929.98.

I gues the question is, is the current low level of company earnings a temporary matter caused by recent dislocations, or is it set to continue as the economic climate darkens?

Plus, as we all know, the market can stay irrational longer than you can stay solvent. But I still think that, adjusted for what now seems inevitable high inflation, we're going to see Dow 4,000 sometime, as I graphed back in December:

Why inflation is going to hit us

Scott Burns at MSN Money (htp: Michael Panzner) calculates that unfunded government programs for social security and Medicare ($46 trillion) represent a debt equivalent to around 90% of all consumers' net worth ($51.5 trillion). If Americans' net assets decline by a further 10%, then effectively the American citizen is bust.

Can anyone provide equivalent information for the UK?

Return of The Great Stink

Chinese Yuan now challenging US dollar as trading currency.

See here.

A velvet revolution, or a concrete one?

In a recent post, "Paddington" compared us with our forefathers, to our detriment. Now, Jeffrey R. Nyquist does the same:

We think that we are more sophisticated than our grandfathers. But we are less sophisticated, by far. Our descent into darkness is best demonstrated by listing old artists beside new artists; by listing old statesmen beside new statesmen; by comparing the lives of our grandparents to our own. The sociologist notices that more children are born outside of marriage, that epidemic cheating has taken our schools by the throat, that we have incompetence in business and government, that we find banality and ignorance on all sides. What conclusion can he draw? The powers and advantages of modern life haven’t made us worthy. They merely serve to amplify and accelerate our unworthiness.

I am amazed by those who think the U.S. economy is going to recover, that global peace is attainable, that American liberties are going to survive American barbarism. Look at our culture today: men are no longer men, and women are no longer women; capitalists no longer uphold free market principles; constitutional government no longer adheres to the Constitution; enemies are treated as friends. Nobody reads the signs. Nobody sees what is coming. Look at the birthrate among Europeans. Look at the abandonment of European culture. Look at the Muslim birthrate. Europe will be Islamic in fifty years. Long before that, the Russians and Chinese will achieve nuclear dominance of the globe. What do you think the investment climate will be in 2059?

Again and again, we are reminded that the issues are much bigger than mere money. I think that we could be on the verge of a social and political revolution, especially if whoever next takes on our nations' problems fails as signally as the present administration. To be clear, I don't welcome revolution, and don't expect its aftermath to be better than the state of affairs that preceded it. There must be effective reform, soon.

Us banks vs UK banks

We are now getting used to hearing that the UK is the worst-placed among the G20 countries to recover from the credit crunch. One reason is that we have few banks, and almost all of them in trouble.

By contrast, as you see here, the US has 8,500 banks, most of them in good condition. The problems are concentrated in their handful of giants. Over there, it would be possible to bust them and have others ready to take on their books of loans (discounted) and deposits.

Here, I think we'd have to create a new bank, if only to provide some competition for Barclays and HSBC.

A lighter moment

I wish I could embed this one, but please click on the link to see an outstanding and very funny example of hysterical greed:

http://www.youtube.com/watch?v=70wuAWxOEZA

... but the Revolution begins at home

We attended the memorial service for a friend yesterday, and the following quotation (Acts, Chap. 2, vv. 44-47 - King James version) was included in the readings:

And all that believed were together, and had all things common;
And sold their possessions and goods, and parted them to all men, as every man had need.
And they, continuing daily with one accord in the temple, and breaking bread from house to house, did eat their meat with gladness and singleness of heart,
Praising God, and having favour with all the people. And the Lord added to the church daily such as should be saved.

It's a big ask, as they say; and the more we have, the bigger an ask it is. Jesus' advice to the rich young man (Matthew 19, v. 21) is after the latter has confirmed that he already performs all the normal religious duties:

If thou wilt be perfect, go and sell that thou hast, and give to the poor, and thou shalt have treasure in heaven: and come and follow me.

It was too much for that trustafarian, and it's too much for modern us. So we try to explain it away, Philadelphia lawyer-style. Clever people will explain that if you give away all, you'll merely be a charity case yourself. Or they'll tell you that the advice was case-specific: the young man needed freeing from his attachment to material things (and, presumably, we don't).

Yet the history of the early Church clearly shows that these sophisticated glosses are plain wrong. They were far, far closer to the revolutionary events (and witnesses) of the New Testament, and we must assume that they understood the message better. "Such as should be saved" must join the project, and obey the project's rules.

Reportedly, 82% of Americans are Christians (even the Simpson family). Many sincerely try to follow the early example - think of the people who took in refugees from Katrina-devastated New Orleans, and how some of these good hosts were robbed and even killed as a result.

But writing comments on US blogs suggesting sharing resources (even in the bureacratic form of the NHS) will get sharp ripostes accusing you of socialism or worse.

It's still a big ask, isn't it? And still too big for me, at the moment.

The Revolution is beginning

This Parliament has now lost all moral and political authority and ought, by rights, to dissolve itself.

It is now not only the Government that has ceased to deserve our trust. So many members of the House of Commons have disgraced themselves so completely that their right to make laws for the rest of us has evaporated.

Read the rest of this extraordinary attack on our corrupted Parliament and broken democracy, in the Mail on Sunday here. The blogger-whingeing has now gone mainstream.

The gold bugs are chittering - but don't get over-excited

Jeff Clark at Casey Research (htp: The Mogambo Guru) plays with the numbers to estimate gold's potential.

One stat is created from a comparison of all the world's cash with all the world's gold: "Total central banks reserves (including gold holdings) = $4.8 trillion, divided by 929.6 million ounces total gold reserves held by all official institutions that issue currency = $5,246 gold price." Or about £3,500 per ounce.

HOWEVER: the World Gold Council estimates that all the gold ever mined to the end of 2006 is about 158,000 tonnes, or 5,079.7 million ounces. If we round down to 5 billion ounces (to allow for some permanent loss, but offset to some extent by new mining - esp. in China - since 2006) we get a gold price of $960 per ounce - not far off where we are today. Allow a bit of cash held outside banks, and gold would be worth - what? $1,000? $1,200?

Yes, there may be a spike like in 1980 - and there may not be. But speculation/panic aside, it would seem that, globally, the current gold-to-money ratio is not quite so wrong as might seem at first sight. So the story is not really about gold, but about the weakness of the dollar in a heavily unbalanced US economy. Priced in a different, stronger currency, gold may not zoom to the moon.

Gold, and theft by inflation

A killer graph here from Charles Hugh Smith. Interestingly, the steady real decline of average incomes begins at almost exactly the same time as Nixon shut the "gold window".

Smith's take is that "the speculative mania in housing was fundamentally a tragic last-gasp effort to make up lost ground via speculation in housing". And if housing reverts to mean, it has a long, long way to go yet.

Is it worth a shot?

Our Founding Fathers were not all professional politicians. They were farmers, writers, inventors, lawyers and surveyors. They had organized estates, led men into battle, built furniture, and written books.

By contrast, our modern elite have often never generated anything. I believe that is why they find it so easy to destroy things that they don't understand (which is a long list).

Petty officials in Brussels attack the British banger and English chocolate, not by relevant measures such as taste or safety, but using purely arbitrary scales.

In Britain, the well-educated New Labour, demonstrating their reverse snobbery, diminish the Peerage, and complete the destruction of a once-great educational system.

In the US, we have the legions of draft-dodgers who steer high-ticket military contracts to their friends, while our exhausted troops salvage from junk yards. The managers, accountants and lawyers have brought our economy to its elbows by equating the movement of wealth with its generation. Our fragile education system is battered by consultants and administrators who confuse good grades with competent teaching and actual learning.

Perhaps some of this could be improved by adapting some of the Japanese model, where management trainees first must try every job on the shop floor?