China is why Burma released Aung San Suu Kyi

Why, after 20 years' intemittent house arrest and other restrictions, was democracy campaigner Aung San Suu Kyi freed by the Burmese government?

Last night's BBC This World programme "Aung San Suu Kyi: The Choice" (viewable online until 29 September) sketched the postwar political history of Burma, viewed through the lens of the personal experience of Suu Kyi and her family and touching on the heavy emotional cost for them as well as her steely courage and wily pragmatism.

But neither pity nor admiration were the motive for the junta's rapprochement with her and her party, the National League for Democracy, according to a former figure in Burmese military intelligence who was deputy Ambassador to the USA. At 52:28 in the programme, Major Aung Linn Htut set the decision in its geopolitical context:

"Change is inevitable. The current military leadership knows that. Burma has fallen so far behind the rest of the world. China is swallowing us up economically. It's controlling us politically, too. Burma can only counter China's influence with the West's help. These changes are an attempt to redress the balance."

China and Burma are neighbours and have had periodic flareups since the thirteenth century. summarised by this article on BurmaNet. Post-World War Two, Burma defended itself against the Chinese Nationalist Kuomintang and then Chinese-sponsored domestic Communist subversives. When the latter failed, China switched to encouraging the growth of ethnic minority militias in Burma, which has bequeathed a poisonous legacy and unfinished business as far as the leadership is concerned. Aung Linn Htut's article continues:

Then in 1989, Kokang leader Peng Jiasheng followed Beijing’s advice and contacted Burmese Maj Than Aye, head of intelligence unit No. 9 based in Lashio, Kachin State, to discuss peace without disarmament. Lo Hsing Han, a former drug lord, served as a liaison between the two parties and a cease-fire deal was reached.

The Kokang offer was accepted by Burmese Gen Saw Maung and Brig-Gen Khin Nyunt, then the leaders of the State Law and Order Restoration Council (SLORC), with the approval of Ne Win, who had resigned his official post in 1988 but retained a great deal of influence over state affairs. Later, many armed ethnic armed groups based along the Sino-Burmese border followed the Kokang example and entered into cease-fire agreements with the SLORC.

Snr-Gen Than Shwe and Vice Snr-Gen Maung Aye, both holding the rank of Maj-Gen at the time, were not happy with the cease-fire agreements, but they dared not protest against deals entered into by their superiors. After taking office, however, Than Shwe used to say he was dealing with the Chinese not out of desire but because it was unavoidable. He never shook hands with leaders of cease-fire groups from the northeastern part of the country, and frequently told divisional and regional commanders at quarterly meetings that those groups would be attacked one day.

Read in this context, Suu Kyi's movement presented another opportunity for Beijing to undermine Burma's government:

After the National League for Democracy (NLD), led by pro-democracy leader Aung San Suu Kyi, won a landslide victory in the 1990 election, China was the first country to recognize the party’s victory by sending its ambassador to Burma to the NLD.

Then, he continues, there are the economic issues. China sold arms to Burma, who then failed to pay; international isolation drove Burma to give control over energy, mining and irrigation to Chinese companies. When China "became concerned about the plight of ethnic armed groups" on their joint border, her foreign minister tried to instruct the Burmese leader Than Shwe to deal with it, and he angrily threatened to change the route of oil and gas pipelines between the two countries; China backed off.

Aung Linn Htut's view is that Burma has to seek dialogue with the West in order to avoid being absorbed by China:

Based on an analysis of the past and present relations between the two countries, one can predict that China will be particularly dangerous for Burma in the future and the situation will be very worrisome for the Burmese people. Burmese military leaders, who may have thought they are good at the political game, have played China against the US and India, but they are now in a position to only follow whatever Beijing asks them to do. China has not only acquired many parts of Burma’s economy, it has to a certain extent dominated ethnic relations and culture.

Burma’s current military leaders, including Gen Min Aung Hlaing, the commander-in-chief of the armed forces, are reportedly not happy with the situation, but they do not know all the details of what their seniors previously did and agreed to do. As a result, they do not know what words and actions are right and wrong with respect to China, so they have to follow Than Shwe’s instructions. If they continue the way they are going, Burma will indeed become a part of China, or a Chinese colony, as many people say. Or the discontent of the Burmese people will grow and lead to anti-Chinese riots, which will end up in conflict between the two countries.

Potential conflicts over resources continue. For example, there is China's damming of the River Salween, which continues into Burma. Tibet is vital for China for a number of reasons but one of them is that whoever has Tibet controls several river systems running through East Asia. The 21st century could see an age of water wars.

The British also have major business interests in Burma; and her natural gas and oil are another bone for the world's dogs to fight over.

Suu Kyi has been a bargaining chip that neo-imperialist China, Burma's tiger-by-the-tail military rulers and Western plutocrats have all tried to use, but if she plays her negotiable value as skilfully as Malta's Dom Mintoff she may succeed in benefitting her country in a way that none of the others has a reason to do.

America's political consensus is breaking down

It's very funny, and a brilliant flaying by Jon Stewart, but at the same time it's seriously disturbing, for several reasons:

1. The arrogance and callousness of some of these patricians.
2. The bias obvious in a major mass news broadcaster.
3. The unethical skill demonstrated in all those twists and turns that attempt to minimise, distort and then distract from the truth.
4. The naked breakdown in the American polity: what happened to "We, the people"?

Asserting the right to bear arms is usually seen as a right-wing political marker, but the system is so warped that perhaps the people should remember that arming the citizenry was a safeguard against a counter-coup by the supporters of what the Founding Fathers regarded as tyranny. One senses on both sides the Atlantic that large sections of the public are now regarded as inconvenient "useless mouths to feed"...

``At this festive season of the year, Mr Scrooge,'' said the gentleman, taking up a pen, ``it is more than usually desirable that we should make some slight provision for the Poor and destitute, who suffer greatly at the present time. Many thousands are in want of common necessaries; hundreds of thousands are in want of common comforts, sir.'' ``Are there no prisons?'' asked Scrooge. ``Plenty of prisons,'' said the gentleman, laying down the pen again. ``And the Union workhouses?'' demanded Scrooge. ``Are they still in operation?'' ``They are. Still,'' returned the gentleman, `` I wish I could say they were not.'' ``The Treadmill and the Poor Law are in full vigour, then?'' said Scrooge. ``Both very busy, sir.'' ``Oh! I was afraid, from what you said at first, that something had occurred to stop them in their useful course,'' said Scrooge. ``I'm very glad to hear it.'' ``Under the impression that they scarcely furnish Christian cheer of mind or body to the multitude,'' returned the gentleman, ``a few of us are endeavouring to raise a fund to buy the Poor some meat and drink, and means of warmth. We choose this time, because it is a time, of all others, when Want is keenly felt, and Abundance rejoices. What shall I put you down for?'' ``Nothing!'' Scrooge replied. ``You wish to be anonymous?'' ``I wish to be left alone,'' said Scrooge. ``Since you ask me what I wish, gentlemen, that is my answer. I don't make merry myself at Christmas and I can't afford to make idle people merry. I help to support the establishments I have mentioned: they cost enough: and those who are badly off must go there.'' ``Many can't go there; and many would rather die.'' ``If they would rather die,'' said Scrooge, ``they had better do it, and decrease the surplus population. Besides -- excuse me -- I don't know that.'' ``But you might know it,'' observed the gentleman. ``It's not my business,'' Scrooge returned. ``It's enough for a man to understand his own business, and not to interfere with other people's. Mine occupies me constantly. Good afternoon, gentlemen!'' Seeing clearly that it would be useless to pursue their point, the gentlemen withdrew. Scrooge resumed his labours with an improved opinion of himself, and in a more facetious temper than was usual with him.

Bank boss jailed for "not stealing enough"

A former bankster has been jailed for not taking enough money from the public.

Pronouncing sentence, the judge commented, "The people have a right to expect that a senior professional such as yourself should have sufficient technical expertise to steal billions, or indeed to demand it with menaces from elected politicians, as we saw in America in 2008."

(Bag modelled by Jessica Harper)

The bag used to smuggle the cash (similar to the one pictured) is estimated by experts to be able to contain no more than £200,000 in £20 notes and probably far less, given the tapering and the drawstring at the top. One billion pounds would require a minimum of 5000 separate journeys.

"If all bankers were as unambitious as you," continued His Lordship, "the system would collapse."

What's all the fuss about the Trans-Pacific Partnership?

What is the TPP? Some see it as a creeping plan to"privatise government" and (among other things) stifle the free exchange of information on the internet. There are protests against the secrecy surrounding the talks, and suspicions regarding the effect on small farming and food safety.

The Trans-Pacific Strategic Economic Partnership (TPP) began with four small nations in 2005. It was a sort of mini-free trade agreement.

But in July 2008, the Doha round of the World Trade Organisation stalled after a few days' talks in Geneva. This round had been going for almost seven years, without agreement. The blocking issue was how smaller nations could protect their agricultural base against massive foreign imports and aggressive price-undercutting by competitors. They wanted a "Special Safeguard Mechanism" (SSM)that would allow them to impose import tariffs.

The United States had already started talking to the TPP back in February 2008, ostensibly on the issue of financial services; now (September 2008) she declared her intention to apply for TPP membership. This was like an elephant joining four kids in their inflatable backyard pool:

Perhaps the clue to the USA's interest is in her dominant position in agricultural exports (see Table 852 here):

And if all applicants are accepted, then together they will have almost sealed-off the Eastern Pacific to non-members:

As America turns her face towards the East in the 21st century, this may become significant. Brooking Institution fellow Joshua Meltzer told a Congressional Committee in May, "The TPP has the potential to be the building block for a wider Free Trade Agreement of the Asia-Pacific Region (FTAAP)".

There are powerful players at work, and much smoke being created. Worldwide, but particularly in Africa, there is a rush to grab agricultural land. Protestors are arguing against the dispossession of small farmers; the World Bank counters the interests of producers, expressing its concern instead for poor urban consumers in this 2010 report:

 

"... we note that many of the main arguments in favor of the SSM focus on the well-being of vulnerable agricultural producers. Yet many rural residents in poor countries are net purchasers of food, and in many countries, urban poverty is growing ever more significant. In this context, the potential for policies based on the SSM rules to lessen poverty vulnerability seems very questionable. Future work should take into account the poverty dimension of the Special Safeguard Mechanism."

 

The food prices about which the World Bank is so concerned might be considerably lower if we did not have the harebrained scheme to use corn as a fuel substitute, and if we could keep speculators out of this market - one that could kill millions if trading gets out of hand. Professor Yaneer Bar-Yam recently did a study in Mexico concluding that those two factors have tripled the price of corn.

 

It is possible to see the TPP as a backdoor way in for Big Farmer and Big Pharma. The potential profits - and the power implicit in gaining control over food supplies- are irresistible. One does not have to be a conspiracy theorist to suspect that dirty deals are being done in the shadows.

 

A longer-term concern is what may ultimately happen when the world converts to mechanized and chemicalized methods of food production. There is a tradeoff between efficiency and sustainability. Initially, modern farming techniques (applied for example to the Guinea Savannah Belt that the UN's FAO is now eyeing) could create a period of abundance that may in turn encourage further population expansion. We shall then be dependent on this approach. What happens when this system is hit by fuel price hikes and supply hiccups, and soil quality deteriorates across the globe because of the vastly expanded (and profitable) use of pesticides, herbicides and fungicides in conjunction with crops genetically engineered to tolerate them? Is humanity set for a great leap and then - after some decades, or a century or two - a monstrous crash?

 

What's all the fuss about the Trans-Pacific Partnership?

What is the TPP? Some see it as a creeping plan to"privatise government" and (among other things) stifle the free exchange of information on the internet. There are protests against the secrecy surrounding the talks, and suspicions regarding the effect on small farming and food safety.

The Trans-Pacific Strategic Economic Partnership (TPP) began with four small nations in 2005. It was a sort of mini-free trade agreement.

But in July 2008, the Doha round of the World Trade Organisation stalled after a few days' talks in Geneva. This round had been going for almost seven years, without agreement. The blocking issue was how smaller nations could protect their agricultural base against massive foreign imports and aggressive price-undercutting by competitors. They wanted a "Special Safeguard Mechanism" (SSM)that would allow them to impose import tariffs.

The United States had already started talking to the TPP back in February 2008, ostensibly on the issue of financial services; now (September 2008) she declared her intention to apply for TPP membership. This was like an elephant joining four kids in their inflatable backyard pool:

Perhaps the clue to the USA's interest is in her dominant position in agricultural exports (see Table 852 here):

And if all applicants are accepted, then together they will have almost sealed-off the Eastern Pacific to non-members:

As America turns her face towards the East in the 21st century, this may become significant. Brooking Institution fellow Joshua Meltzer told a Congressional Committee in May, "The TPP has the potential to be the building block for a wider Free Trade Agreement of the Asia-Pacific Region (FTAAP)".

There are powerful players at work, and much smoke being created. Worldwide, but particularly in Africa, there is a rush to grab agricultural land. Protestors are arguing against the dispossession of small farmers; the World Bank counters the interests of producers, expressing its concern instead for poor urban consumers in this 2010 report:

 

"... we note that many of the main arguments in favor of the SSM focus on the well-being of vulnerable agricultural producers. Yet many rural residents in poor countries are net purchasers of food, and in many countries, urban poverty is growing ever more significant. In this context, the potential for policies based on the SSM rules to lessen poverty vulnerability seems very questionable. Future work should take into account the poverty dimension of the Special Safeguard Mechanism."

 

The food prices about which the World Bank is so concerned might be considerably lower if we did not have the harebrained scheme to use corn as a fuel substitute, and if we could keep speculators out of this market - one that could kill millions if trading gets out of hand. Professor Yaneer Bar-Yam recently did a study in Mexico concluding that those two factors have tripled the price of corn.

 

It is possible to see the TPP as a backdoor way in for Big Farmer and Big Pharma. The potential profits - and the power implicit in gaining control over food supplies- are irresistible. One does not have to be a conspiracy theorist to suspect that dirty deals are being done in the shadows.

 

A longer-term concern is what may ultimately happen when the world converts to mechanized and chemicalized methods of food production. There is a tradeoff between efficiency and sustainability. Initially, modern farming techniques (applied for example to the Guinea Savannah Belt that the UN's FAO is now eyeing) could create a period of abundance that may in turn encourage further population expansion. We shall then be dependent on this approach. What happens when this system is hit by fuel price hikes and supply hiccups, and soil quality deteriorates across the globe because of the vastly expanded (and profitable) use of pesticides, herbicides and fungicides in conjunction with crops genetically engineered to tolerate them? Is humanity set for a great leap and then - after some decades, or a century or two - a monstrous crash?

INVESTMENT DISCLOSURE: Mostly in cash (and index-linked National Savings Certificates), but now planning to build up some reserves of physical gold via regular saving.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.

Cameron apologises for (Iraq) Hillsborough disaster

Bearwatch apologises for errors in transcription in the following story, a shortened version of the original which ran on the BBC here. The faulty version below is left online so that readers may compare the two in detail.
______________________________________________________________

Iraq papers: Cameron apology over 'double injustice'

David Cameron has said he is profoundly sorry for the "double injustice" of the 2003 Iraq invasion.

Speaking after an independent report into previously unseen documents about the tragedy, the prime minister said civil servants, political and legal advisers, MPs and the Press had failed to do enough and had also tried to blame Saddam Hussein and the British intelligence services.

109,032 Iraqis died as a result of the Coalition invasion of Iraq in 2003. [...]

The prime minister's statement vindicates what protestors have always claimed: that there was a deliberate Cabinet conspiracy to hide their own culpability and a campaign to divert the blame onto others.

Amid gasps in the Commons, Mr Cameron revealed that intelligence reports were significantly altered and that personal information was leaked to the Press to "impugn the reputation of Dr David Kelly".

But the most significant development is whether the Chilcot Inquiry should be reopened. [...]

Mr Cameron said there were three main areas highlighted in the report - failures by the authorities to protect British interests and tell the truth to their voters, misleading revisions to intelligence service reports and doubt cast on information supplied to journalists by Dr David Kelly. [...]

Paul Dacre, editor of the Daily Mail newspaper when it ran a story claiming that British bases were “just 45 minutes from attack” by Iraqi missiles, offered his "profuse apologies".

He published the story with that headline in the days leading up to the invasion, which alleged that the Iraqi government was close to acquiring nuclear weapons.

In a statement he said: "I published in good faith and I am sorry that it was so wrong." [...]

Cabinet papers are not usually published in the UK until 30 years after they have been written but MPs agreed to their full, uncensored disclosure last year.

QE and inequality

"Pension Pulse" blog author and corporate pensions expert Michael Kolivakis includes in his latest post this Bloomberg interview with Marc Faber, the no-nonsense guru of the bears:



Guru-ji remains firmly convinced that the longstanding policy of monetary inflation will ultimately end in systemic collapse.

Faber lives in northern Thailand, which appears to be socially stable and with a good agricultural base and arable land-to-population ratio, so even if this catastrophe arrives during his lifetime he and his family may stand a chance. Besides, he is also close to several international borders and I wonder whether that was also a factor in his choice of domicile.

Unfortunately, I live in Britain, a hugely overcrowded country whose rulers have allowed scarcely-restricted immigration, unrealistic levels of social benefits and the rapid concreting-over of some of the world's finest farmland. Most survivalist strategies here (other than a bit of hoarding to cover short-term disruption) are simply fantasies.

But what Faber says here about the interim social effects of "money-printing" is put very clearly and starkly. The cash wave reaches institutions first and then the pockets of the well-to-do. Instead of using it to set up businesses and create employment, they look around for existing businesses to grab and merge, thus creating more job losses and depressing workers' wages. Similarly, the property bubble burst and led to the dispossession of the poorer sort, who now do not have access to credit and cannot buy back into the housing market at today's lower prices; so the better-off snap up the houses and rent them out to people who were evicted - and rents are going up.

According to minority economists like Steve Keen, classical economic theorists simply don't understand debt and monetary inflation. Their models assume that if more money comes into an economy, prices go up but so do wages, so no big deal. If they were geographers, they would look at the ocean as if it were a lake on a windless summer's day, and have no knowledge of tides, freak waves and tsunamis.

Traders know different, and if ever we can prove bankers do too, then maybe we will finally get the criminal trials needed to clean up the system. Because this system has become a machine for oppressing the poor and pushing down the middle earners. I tried to show the effects of so-called "free trade" in a graphic a while ago, and before I get trollfarts about socialism I'd like to point out that real free-marketers like Max Keiser attack it from the opposite angle.

Easy Riders

Why have these two never been seen together?

As the LA Times says of one of them, he "... is both a charmer and a cliche. Passionate about truth [...] and a mendacious hypocrite in real life."

The other is a world-class performer.

Europe is paralyzed by personal debt

Inspect data here.

INVESTMENT DISCLOSURE: Mostly in cash (and index-linked National Savings Certificates), but now planning to build up some reserves of physical gold via regular saving.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.

Europe is paralyzed by personal debt

Inspect data here.

I burned my mother-in-law's teeth

We were in Ireland, up in the Galtee Mountains near Clonmel, where my wife's mother grew up. The holiday cottage had its own water supply, whose peat stain got through the filter on our water jug, and in the old fireplace we burned peat brickettes bought from the local garage. I love an open fire, and my motto for anything finished with is "it'll burn".

Peace, sunshine, fresh air. We should have bought a place there before the market went crazy.

I say fresh air, but the farmowner's dog (we called him Fogarty) could be detected going past a high window, by his crusted-cowshit smell. A genial animal, he would roll over when he saw us, displaying the impressive collection of scars on his belly and genitalia earned by jumping over barbed wire fences. Only the threat of sprayed hosewater would send him off on his way.

Morning. Breakfast over, the peat log dying to embers, my wife and her mother getting ready for the car ride into town to get their hair done. I tidied up and grabbed a crumpled paper tissue off the table and flung it on the fire. There's a delicious pause before paper darkens, then blooms into flame.

Only this time it was a blue flame. Wrapped in the tissue was a dental plate for the two false teeth my mother-in-law put on for show, though they weren't very good for the business of eating, which is why she had them out more often than in.

The flame brightened and elongated. It was far too late to save them.

She told the hairdresser, who collapsed, barking with laughter, then staggered across the passageway to the next shop: "Hey Jim, here's a feller burned the Mammy's teeth!"

I felt... accepted.

She passed away some years ago, but my wife says she's forgiven me by now.

George Orwell and sham security

UPDATE (15 September 2012): the camera has now been removed - I don't know why, or for how long.

"In general you could not assume that you were much safer in the country than in London. There were no telescreens, of course, but there was always the danger of concealed microphones by which your voice might be picked up and recognized..."

 

George Orwell, Nineteen Eighty-Four.

 

Left: suburban Birmingham (UK), 9 September 2012

 

This camera was installed recently - and quietly - near to where I live.

 

Like so many things these days, it has its own little slogan: Making Birmingham Safer.

 

Not true. Last Sunday afternoon, the burglar alarm went off on a house across the road. I called the police, who told me they wouldn't come out unless I saw something suspicious; it could, after all, explained the policewoman on the other end of the line, have been triggered by a cat jumping onto a windowsill or something.

 

The response was much as I had expected, but I'd made the call to placate a couple of little girls who'd noticed the noise while trampolining in their garden next door.

 

When there's a real burglary, all you get is a crime number so you can claim on your insurance. And maybe a crime prevention pack from Victim Support officers who want to come in and eat your biscuits (I told them what I wanted was the burglars' heads cut off with a blunt knife, but their reaction suggested that my wish was inappropriate).

 

On the Monday, I returned from work to find a note through the door. It was from the police, asking for witnesses to an attempted robbery on our street on Sunday evening (c. 10:30).

 

No connection? Or would B not have happened if Birmingham's finest troubled themselves to deal in person with A, and show a regular physical presence in our area?

 

What use are cameras? Until burglars and muggers go around with numbers on their chests there'll be no flash-flash-you're-caught, like speeding motorists.

 

I suppose the police could upgrade to automatic face recognition software - but with all its Big Brother potential, that's a cure worse than the disease. Besides, criminals would find ways round: Andy McNab's novels explain how you go into a charity shop, buy a change of gear and put a peaked cap on your head and hey presto, cyber-following is foiled.

 

So what is all this? False reassurance, or an excuse to tighten the snooper's noose round the citizenry in general?

 

Or is it simply easier and safer for the cops to shuffle papers and handle calls from ninny householders who imagine we're still in an age when collars were felt, naughty kids' ears clipped and the bobby would tell you the time? Clock on, clock off and roll on retirement?

Ripped off by pump prices

Americans complain about the high cost of fuel, but compared to us Brits they're sitting pretty. Below (left) is a snapshot of a widget found on Max Keiser's site, where you can check regularly and grind your teeth.

To convert from (US dollars per US gallon) to the current British equivalent (i.e. French Revolutionary decimal pence per French Revolutionary litre), simply divide by 6.

Or 6.058595, if you want to be more exact. Here's a sample based on the latest prices and exchange rates - Brits are paying almost exactly double:













INVESTMENT DISCLOSURE: Mostly in cash (and index-linked National Savings Certificates), but now planning to build up some reserves of physical gold via regular saving.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.

Ripped off by pump prices

Americans complain about the high cost of fuel, but compared to us Brits they're sitting pretty. On the right I've installed a new widget (found on Max Keiser's site) so you can check regularly and grind your teeth.

To convert from (US dollars per US gallon) to the current British equivalent (i.e. French Revolutionary decimal pence per French Revolutionary litre), simply divide by 6.

Or 6.058595, if you want to be more exact. Here's a sample based on the latest prices and exchange rates - Brits are paying almost exactly double:

Food prices, speculation and eco-folly

Max Keiser is a joy, just a joy. In this latest broadcast he lays about him gleefeully, smacking "nay-sayers should commit suicide" Bertie Ahern and faux-libertarian followers of the Mises and Adam Smith Insitutes, and describing Rupert Murdoch as a failed, lifelong anti-competitive, octogenarian porn merchant who should just get out of the Internet's way.

But since I've been touching on food and land recently, I find Keiser's interview with Professor Yaneer Bar-Yam particularly intriguing. The prof published a report in May that finds corn prices in Mexico are three times higher than they would otherwise be, thanks to (a) the diversion of corn into ethanol production and (b) commodity speculation (legalised in 2000).

Here's the graph:

"Fig.1 Corn price (blue line) and curves showing the causes of price increases according to our quantitative model (red dashed line). The green dashed dotted line is the supply and demand equilibrium impacted by the demand shock due to increasing corn to ethanol conversion. The quantitatively modeled speculation contribution to prices is the difference between the total and the supply and demand curve. The corn price without ethanol shock or speculation would be essentially constant (black dotted)."

Similarly, financial greed converts into distress and hunger for the poor. And as Max and his colleague note, the investment "terrorists" think it's funny.

INVESTMENT DISCLOSURE: Mostly in cash (and index-linked National Savings Certificates), but now planning to build up some reserves of physical gold via regular saving.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.

Food prices, speculation and eco-folly

Max Keiser is a joy, just a joy. In this latest broadcast he lays about him gleefeully, smacking "nay-sayers should commit suicide" Bertie Ahern and faux-libertarian followers of the Mises and Adam Smith Insitutes, and describing Rupert Murdoch as a failed, lifelong anti-competitive, octogenarian porn merchant who should just get out of the Internet's way.

But since I've been touching on food and land recently, I find Keiser's interview with Professor Yaneer Bar-Yam particularly intriguing. The prof published a report in May that finds corn prices in Mexico are three times higher than they would otherwise be, thanks to (a) the diversion of corn into ethanol production and (b) commodity speculation (legalised in 2000).

Here's the graph:

"Fig.1 Corn price (blue line) and curves showing the causes of price increases according to our quantitative model (red dashed line). The green dashed dotted line is the supply and demand equilibrium impacted by the demand shock due to increasing corn to ethanol conversion. The quantitatively modeled speculation contribution to prices is the difference between the total and the supply and demand curve. The corn price without ethanol shock or speculation would be essentially constant (black dotted)."

Similarly, financial greed converts into distress and hunger for the poor. And as Max and his colleague note, the investment "terrorists" think it's funny.

Mountain high

From the ever-wonderful Dark Roasted Blend, a series of photos from the Himalayas (example above). Truly vertiginous, and reminds me of a series I watched about truckers who work in Alaska going for a busman's holiday along some of the world's other deadly routes. Plus Welsh comedian Rhod Gilbert and Greg Davies going through Nepal and literally up to the gates of China.

One of the things that make these areas so dangerous is that they are ever-decaying. In his 1958 travel book, A Short Walk In The Hindu Kush, Eric Newby describes a constant clattering of pebbles and rocks from the high places above.

But The Himalayas are still rising as the Indian subcontinent continues to crash into the Eurasian landmass, and the snowfields that created in Tibet gave rise to the great rivers that flow through and feed South-East Asia: the Indus, Sutlej, Ganges and Brahmaputra. I've often wanted to do the a sort of pilgrimage to that area, which in fact is an ancient site of worship centring on Mount Kailash.

The Himalayan range is young in geological terms, beginning about 65 million years ago - coincidentally around the time the dinosaurs died out. If only we could live long enough, and perceive slowly enough, to see the wandering of the continents about the globe:

 

And what of the future?:

 



Mountains are life-givers: without them, much less chance of rain and the fresh water that sustains us.

There is debate about how high a mountain can possibly be. The tallest from root to tip is Mauna Kea in Hawaii, but 60% of that is below the waves. The highest in the Solar System is on Mars and is some 72,000 feet - but that is in Mars' much lower gravity. This commentator says the theoretical limit on Earth is 90,000 feet, or about four times the height of Everest - but I think from what he says that you would have to include the depth of the tectonic plate on which the mountain stands.

Nevertheless, if the Tower of Babel had been completed and constructed as strongly as a mountain, it should easily have got among and even above high-level clouds. Breughel was right:

If the Babylonians had had the EU's translation facilities of Brussels or Strasbourg, they could have finished the building. Who knows what it would have looked like?

However, they tried to make it of brick, which in even the modern version of the material apparently can't make a wall higher than some 840 feet.

Mudbrick structures in Shibam, Yemen go up to nearly 100 feet; the Burj Khalifa in Dubai tops out at 2,717 feet; but the theoretical maximum is 10 - 100 kilometres.

It's even been suggested (see "technobot" comment #7 here) that a structure made out of diamond could stand 6-12,000 km high (they could get the material from this diamond star, I guess). Though there remains the question of economic rationale - whay you'd need to compress that much rentable space onto that base, and who could afford it (bearing in mind that land costs would be dwarfed by the expense of materials and labour).

And would any of them have the beauty of the real thing in Nature?

Mexico and drugs liberalization: a dark side?

Drug-takers and principled libertarians have welcomed the news that Mexico is to decriminalise drugs and close down the country's equivalent of the FBI. But behind it there may be more than the desire to reduce the horrifying death toll from gang wars.

There are disquieting rumours about newly-elected President Enrique Peña Nieto's personal life. His alleged gay lover, Agustín Humberto Estrada Negrete, claimed that Peña Nieto murdered his wife Monica Pretelini; her two bodyguards were subsequently killed while escorting the family, who were left unhurt; Negrete claims later to have been threatened, near-fatally assaulted and then fled to San Diego in California, from where he has continued to denounce his alleged former bedmate, as recently as last April.

There are also allegations of Peña Nieto's dealings with organised crime syndicates. It is even claimed that the latter helped fund his election campaign.

The winding-up of Mexico's "FBI" may not be merely a consequence of the drugs decision. Established in 2001, the Agencia Federal de Investigación (AFI) was tasked to fight not only organised crime but corruption. Reorganised in 2009 and renamed the Policía Federal Ministerial (PFM), it is said to have been penetrated by the gangs. But this is a danger for all intelligence organisations and not in itself sufficient reason for dispensing with them.

Is the President closing the PFM because it will no longer be needed, or because its own security is irredeemably compromised, or because if left in place it could eventually mount a full investigation into his own alleged activities?

As to the drug cabals, it remains to be seen whether legalisation stops the violence or instead steps it up as crime syndicates vie for control of the hugely lucrative industry prior to reincarnation as legitimate businesses.

Not so green: "eco" factors behind landgrabbing and food shortages

After Ethiopia (see yesterday's post), here's Friends of the Earth International on Uganda, and how land-grabbing and speculation is driven in part by high-minded attempts to find alternatives to oil, to get carbon credits and to "conserve"the environment. What a mess.

(Highlights in the excerpted text are mine.)

1.2 The demand for land

A number of different factors lie behind this phenomena. Many cash rich and land poor governments are trying to secure food supplies by buying land overseas for domestic supplies. Land and resource rich but cash poor governments are seeking foreign direct investment in land and agriculture. While many of the governments involved are seeking to expand their domestic production of food crops and crops for fuel, agribusiness is seeking to expand its operations and boost profits, growing more, more cheaply; growing new crops for new markets, particularly for agrofuels – as well as gaining access to new markets in rapidly developing economies. Investors and speculators are looking for good investment returns.

Governments and private companies are both keen to gain access to fertile land at a low cost. Rapid increases in the food prices in recent years left many governments aware of their vulnerability to the market and eager to boost domestic food supplies. Countries such as China, India and Egypt want to ensure they have access to rice and grain. Other countries such as Saudi Arabia have recognised that the changing climate and limited water supplies mean that some crops can no longer be grown at home. Instead they are looking to outsource production to areas where fertile land and water are in greater supply.

Land grabbing for food has been recorded across Africa, notably in the Sudan and Uganda; in Pakistan, in Cambodia; in Russia, the Ukraine and Georgia; and in parts of South America, including Paraguay and Brazil. Some of these are countries which struggle to feed their own populations – but which have enough fertile land to attract foreign investors.

The growing demand for vegetable oils in particular, driven by increased human consumption and the promotion of agrofuels, particularly in Europe, has led to expansion of industrial monocultures. The growing market for palm oil has seen companies buying up land in tropical areas of Africa and Asia to establish plantations. Similarly, soy has expanded in South America, and land has been grabbed for jatropha in India, Indonesia and a number of African countries.

High levels of demand for land have pushed up prices, bringing in investors and speculators. With long term forecasts predicting increasing water shortages and other climatic changes to agriculture, few expect the price of land to fall. As a result, the big investment banks have moved into farming, buying up agricultural land, livestock farms and processing plants.

Another driver of land grabbing is particular types of environmental conservation projects such as Reducing Emissions from Deforestation and Forest Degradation in Developing countries (REDD) projects that generate carbon credits from plantations. The appropriation of land and resources for environmental ends has been termed as ‘green grabbing’ (Vidal, 2008). In many cases communities that have managed and conserved forests for many generations are locked out of their communal forest lands due to conservation needs. As plantations are accepted as forests in international definitions, forested land is replaced by tree plantations aimed at generating carbon credits for companies (FOEI, 2008).

John Company colonizes Ethiopia

Two recent themes on this blog have been (a) agricultural investment and (b) companies that are as powerful (and possibly as wicked) as governments.

How about the "resettlement" of 1,500,000 Ethiopians to make way for corporate agri-grab?

That story ran in January, but there's lots more on this long-running issue - just Google up "land seizure ethiopia" or similar. And it's happening across Africa.

If you need a current hook to hang it off, here's a Norwegian story reproduced on farmlandgrab.org. Google Translate will give you enough to get the gist, e.g.:

Nykolonialisering in the form of landrov may have different face from country to country. The common denominator is that topsoil has been the hottest investment item, after the housing market broke down. Money pursuit of profit. Investors know that food and topsoil is scarce. It is important to position themselves. Liberti citing an unnamed manager of a South American investment fund. He goes straight to the point at a conference for investors, "We need to stop beating around the bush.

Agroindustrielle big companies take croplands, water and markets away from farmers. We can sell our products at lower prices and undercut peasant family farms. It must make decisions which are also of political nature.The world needs an effective agricultural producing on a large scale.

But it is not possible to promote this model without any loses. "Many believe that everything is taken political decisions. Bond activist Henry Saragih from Indonesia is The Guardian hailed as one of the fifty people who can save the world. He says landrov is part of a agroindustriell model that is being promoted by the World Bank, IMF, FAO and the EU:

"On the basis of vaguely worded principles of" responsible investment in agriculture "legitimize these institutions actually broader violations of farmers' rights."

"... the World Bank, IMF, FAO and the EU": as an idealistic teenager/tweenie, I liked the idea of supranational government. Now, I begin to think that it, and the money-forces to which it allies itself, pave the way for an evil worldwide oligarchy. Just wait till they have no further need for ourselves. Meanwhile, Ethiopians are being turfed off like the Chechens under Stalin.