Mark Steyn joins the discussion about Roman Polanski's arrest, adding some revolting and disturbing detail - Jerry Lee Lewis' marriage to his own 13-year-old cousin Myra, this isn't.
My question is, why have the authorities left it so long? There's some hidden agenda, surely. And surely, for justice to be seen to be done, there should not be hidden agendas.
Saturday, October 03, 2009
Private life, public life
Alice Miles is a breezy columnist for the Times and one of a number who are fortunate in being able to turn their private life into copy, like Liz Jones in the Daily Mail (Jones' Mail on Sunday diary pieces are sadly irresistible).
Miles' opinion of the NHS, she wrote in 2006, was that some doctors are "arrogant and stroppy," an observation sharply resented by some in the profession. Perhaps this judgment was coloured by her personal experience during pregnancy, for she returned to this theme a year later in a piece titled "Natural birth! Hello? This is the 21st century": "... I remember when I told my very nice and until then helpful midwife that I was going to have a Caesarean (I, fortunately, had a choice). I might as well have said that after careful thought I had decided I would feed my baby heroin. When she had recovered sufficiently from the shock, Maureen, a large, broad-hipped woman and mother of about eight, suggested I might have been swayed by Posh Spice: “A lot of women want to follow their favourite celebrity.” Then she asked whether I was doing it at my husband’s request to keep myself perfect for him “down there”. " And then last year, she had a nice holiday in Madeira (pictured with her daughter in the article), which if it wasn't paid for by her paper, at least gave her the material to earn her salary. More, we don't know, unless and until she announces it.
You see, the Fourth Estate want to earn money talking about themselves at some times, yet preserve their privacy when it suits them. To dare to hoist them with their own interrogatory petard is treated almost as a sort of lèse majesté. When did journalists become, I don't know, not just celebrities, but a kind of minor royalty? Is it because the Left has been consistently undermining the Royal Family, so that a replacement has to be found?
At any rate, journalists can become quite chevalier in the exercise of their prerogatives. Last year, the former editor of Private Eye, Richard Ingrams, commented on Andrew Marr's use of a court injunction to suppress not only certain information about his private life, but also the very fact of his having obtained a court injunction to that effect (the magazine successfully defied the second part of that attempt).
The battle for press freedom continues: in this week's print edition of PE, the lead article is reduced to muttering, "Last month a certain institution obtained a high court injunction to prevent a certain newspaper from publishing a certain document. More than that we cannot say; to do so is fraught with danger." The article goes on to remind us of the debt we owe to the 18th century rake, wit and publisher John Wilkes, and reflects that "prior restraint" is rolling back the tide of Liberty.
I don't think this is a minor matter: I fear that we are witnessing the seemingly unstoppable reconstruction of aristocracy in all its worst aspects, on both sides of the Atlantic. And even their flappers are dressing themselves in the livery and rights of the Imperial Court.
Ironically, Marr himself recently interviewed the new owner of the London Evening Standard, Alexandre Lebedev, who in response to suggestions that the latter might have problems with Putin said, "I think the only right I'm defending is the freedom of speech and of course I am using to a certain extent my limited resources in actually supporting the freedom of information and freedom of press." Exactly one year earlier, Marr was also questioning Russians Gary Kasparov and Dmitry Peskov about press freedom in Russia. Following Marr's interview with Gordon Brown, in which he controversially asked the Prime Minster not only about his blindness but about rumours of drug treatment, he defended his right to ask such questions.
In August last year, Mazher Mahmood told Emily Maitlis on Marr's own show, "... what's happening is that a privacy law is creeping into Britain through the back door. Investigative journalism is slowly being strangled. The Max Mosley case is testament to that if it were needed."
Back in 1997, in his fine tribute to the late Ruth Picardie, Marr wrote, "She asked awkward, embarrassing questions, including about herself, and didn't flinch from nasty answers. And embarrassing questions are good, the lifeblood of journalism. Without them, we are duller, stupider bipeds.
These Ruth Picardie qualities are the opposite of what our accountancy- dominated culture, and indeed some politicians, seem to want journalists to be - obedient, emotionally-controlled and humble little information- processors with no life outside the profession, reliably mincing factoids into munchable, pain-free, sesame-coated pieces. And Hell, where's the pleasure in that? You might as well write a novel."
When powerful people - and, backed by the judges that at other times they may criticise, journalists are powerful - are allowed to determine the limits to liberty, it is unreasonable for us to expect it to retain its character. These quasi-liberal censors are like Douglas Adams' stupid philosophers Broomfondle and Magicthighs, who "demand rigidly defined areas of doubt and uncertainty!" Understandably seeking to prevent their own social embarrassment, they set the precedent for other, potentially wicked and dictatorial people to exploit for worse ends.
And it's not slow in coming. Alastair Campbell, himself a former journalist for the Daily Mirror and Today, earned a reputation as a fearsome handler of the Press when he became Prime Minister Tony Blair's spokesman. As a poacher-turned-gamekeeper, he knows the tricks of the journalists' trade, but his communication sources also yield him plenty of ammunition to keep the scribblers' heads down when he wants to; and the threat to Marr, via Campbell's blog, came swiftly:
"It was sad to see Marr, perhaps with an eye to a few Monday morning cuttings, feel that he had to raise blogosphere rumours about Gordon going blind, or being on heavy medication of some sort. I know it will give him the passing satisfaction of pats on the back from journos … But it was low stuff. I'm sure Andrew would agree that everyone has certain areas of their life that they'd prefer not to be asked about live on TV."
That's how it works, and that's why people in Mr Marr's position need to tell the truth and shame the devil, for otherwise the devil will know how to build on the weakness.
Friday, October 02, 2009
Eden, Noah, speculation and Bible truth
Without believing every detail in the Genesis account, I think the Noah story plausible. Rather than undermining it, I would say that the Epic of Gilgamesh corroborates it.
Graham Hancock has spent a long time developing his theory that the Flood is a mythicised memory of the melting of the northern European ice sheets some 10,000 years ago. I recall reading somewhere that some Australian aboriginal tales may be as old as their first arrival to the continent, 40 or 60 thousand years ago. Why not? If a story can be passed down from one generation to another, why should the transmission cease, unless the tribe is destroyed by invaders?
I think - I speculate - that there may have been many Noahs. The ice sheets can't have melted in a single season, so quite possibly there was an annual flooding in warmer weather every year for very many years, and this could have stimulated men to learn to build larger and more robust ships, to keep their families and livestock safe, rather than canoes suitable for shoreline fishing. Perhaps this led to the colonisation of central America by oceangoing tribes, since I've read the hunters that came down the ice-free corridor through Canada didn't get that far.
Years ago, I bought my mother the Times Atlas of History, in which it stated that agriculture was invented in Anatolia, northern Turkey, which happens to be the area where the Tigris and the Euphrates rise (two of the rivers that flowed out of Eden). Agriculture and fishing, around the Pontian shore, a shore that would rise every year. And hasn't there been some evidence that there are indeed remains of man-made structures in the oxygen-starved mud in that sea-shelf?
Just because an old, old story doesn't agree in every point with current scientific theory, that doesn't mean it isn't essentially true; the Ark may or may not have been 300 cubits in length, yet it may still have been very big. And many people have noted how the account of Creation itself also comes close to accepted cosmological opinion.
It's like Schliemann and his discovery of the remains of Troy: we're so used to dismissing traditional stories that we may fail to be guided by them.
Graham Hancock has spent a long time developing his theory that the Flood is a mythicised memory of the melting of the northern European ice sheets some 10,000 years ago. I recall reading somewhere that some Australian aboriginal tales may be as old as their first arrival to the continent, 40 or 60 thousand years ago. Why not? If a story can be passed down from one generation to another, why should the transmission cease, unless the tribe is destroyed by invaders?
I think - I speculate - that there may have been many Noahs. The ice sheets can't have melted in a single season, so quite possibly there was an annual flooding in warmer weather every year for very many years, and this could have stimulated men to learn to build larger and more robust ships, to keep their families and livestock safe, rather than canoes suitable for shoreline fishing. Perhaps this led to the colonisation of central America by oceangoing tribes, since I've read the hunters that came down the ice-free corridor through Canada didn't get that far.
Years ago, I bought my mother the Times Atlas of History, in which it stated that agriculture was invented in Anatolia, northern Turkey, which happens to be the area where the Tigris and the Euphrates rise (two of the rivers that flowed out of Eden). Agriculture and fishing, around the Pontian shore, a shore that would rise every year. And hasn't there been some evidence that there are indeed remains of man-made structures in the oxygen-starved mud in that sea-shelf?
Just because an old, old story doesn't agree in every point with current scientific theory, that doesn't mean it isn't essentially true; the Ark may or may not have been 300 cubits in length, yet it may still have been very big. And many people have noted how the account of Creation itself also comes close to accepted cosmological opinion.
It's like Schliemann and his discovery of the remains of Troy: we're so used to dismissing traditional stories that we may fail to be guided by them.
Violence, illusion and reality
Nice extract here on what violence is really like. Interests me because indirectly, it reveals how much our world-view is skewed by fictional artefacts.
Sucking out the poison - or injecting it?
Padders has directed me to the latest financial craze, the re-remic. And, no doubt, in all the detail will hide another toxic djinn, while bankers, ratings agencies and quants run far, far away with their salaries, fees and bonuses.
Sit up and take notice!
From time to time, you get a piece of longer-term thinking that initially seems interesting, is then forgotten in the pell-mell of daily life, and finally haunts you with its truth years or decades later. For example, I remember one TV discussion back in the 70s where terrorism was flagged as the theme for the future; and another, criticising commercial advertising, where one ad honcho said the worrying thing was the increasing importance of the government as an advertising client.
This post by Edward Harrison seems to me one of those keep-it-by-your-desk pieces. He says too many things for me to summarise easily, but it has "secular bear market" written all over it, and Harrison goes further (into the territory recently explored by Michael Panzer in "When Giants Fall"):
... Needless to say, this kind of volatility will induce a wave of populist sentiment, leading to an unpredictable and violent geopolitical climate and the likelihood of more muscular forms of government.
This post by Edward Harrison seems to me one of those keep-it-by-your-desk pieces. He says too many things for me to summarise easily, but it has "secular bear market" written all over it, and Harrison goes further (into the territory recently explored by Michael Panzer in "When Giants Fall"):
... Needless to say, this kind of volatility will induce a wave of populist sentiment, leading to an unpredictable and violent geopolitical climate and the likelihood of more muscular forms of government.
Principles of investing
Bob Farrell’s Ten Market Rules to Remember
1) Markets tend to return to the mean over time. This is especially noteworthy now, for the housing market is returning to its mean by plunging, as are equity market, the dollar, the Yen, et al.
2) Excesses in one direction will lead to an opposite excess in the other direction. They always do, and the excesses of the housing bubble and excessive, lenient bank lending, are giving way to the housing collapse and inordinately tight lending practices.
3) There are no new eras — excesses are never permanent. And how strongly does that speak to us now, for the supposed era of unending housing price increases and of globalisation has given way to weak housing and growing protectionism.
4) Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways. Markets correct by going in the opposite direction, falling sharply after sustained, broad rallies, and rallying after sustained broad weakness. The world ebbs and the world flows; it has always been thus, and shall always be thus.
5) The public buys the most at the top and the least at the bottom. Of course they do; they always have and they always shall. The public buys when euphoria reigns, and it sells when depression does years later.
6) Fear and greed are stronger than long-term resolve. We are human beings dealing with rational and irrational markets; to believe that "fear" and "greed" can ever be lost is naive for they are the most fundamental of human traits.
7) Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names. Just as volume must follow the trend, so too must good markets have broad support and weak markets have broad weakness... and at the moment, the market is very, very broadly weak.
8) Bear markets have three stages — sharp down — reflexive rebound —a drawn-out fundamental downtrend. This really is how this bear market shall end; not with a hoped for "V" bottom, but with a great washing-out... a capitulation... and then months, or even years, of base building.
9) When all the experts and forecasts agree – something else is going to happen.... or as we like to say, "When they are yellin', you should be sellin,' and when they are cryin,' you should be buyin.' "
10) Bull markets are more fun than bear markets.... or as a friend of ours from Raleigh, N. Carolina used to say many years ago, "Bears don't eat; bulls party!"
1) Markets tend to return to the mean over time. This is especially noteworthy now, for the housing market is returning to its mean by plunging, as are equity market, the dollar, the Yen, et al.
2) Excesses in one direction will lead to an opposite excess in the other direction. They always do, and the excesses of the housing bubble and excessive, lenient bank lending, are giving way to the housing collapse and inordinately tight lending practices.
3) There are no new eras — excesses are never permanent. And how strongly does that speak to us now, for the supposed era of unending housing price increases and of globalisation has given way to weak housing and growing protectionism.
4) Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways. Markets correct by going in the opposite direction, falling sharply after sustained, broad rallies, and rallying after sustained broad weakness. The world ebbs and the world flows; it has always been thus, and shall always be thus.
5) The public buys the most at the top and the least at the bottom. Of course they do; they always have and they always shall. The public buys when euphoria reigns, and it sells when depression does years later.
6) Fear and greed are stronger than long-term resolve. We are human beings dealing with rational and irrational markets; to believe that "fear" and "greed" can ever be lost is naive for they are the most fundamental of human traits.
7) Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names. Just as volume must follow the trend, so too must good markets have broad support and weak markets have broad weakness... and at the moment, the market is very, very broadly weak.
8) Bear markets have three stages — sharp down — reflexive rebound —a drawn-out fundamental downtrend. This really is how this bear market shall end; not with a hoped for "V" bottom, but with a great washing-out... a capitulation... and then months, or even years, of base building.
9) When all the experts and forecasts agree – something else is going to happen.... or as we like to say, "When they are yellin', you should be sellin,' and when they are cryin,' you should be buyin.' "
10) Bull markets are more fun than bear markets.... or as a friend of ours from Raleigh, N. Carolina used to say many years ago, "Bears don't eat; bulls party!"
Thursday, October 01, 2009
Haw, haw!
The above is a photo of Clive Sinclair (later Sir Clive) with one of his inventions, the miniature TV (1966). Life magazine dubs it one of "30 Dumb Inventions" (slide 18 in the sequence).Oh, yes? iPhone, anyone? (and see slide 26, to boot).
The difference between mockery and admiration is often a matter of timing (think of da Vinci's helicopter, or Noah's Ark). It's Sinclair's misfortune that, like many a genius, he led the market by too great a distance. But without people like this, we wouldn't have got here.
Tuesday, September 29, 2009
Two questions on productivity
A couple of quick ones:
1. Turn on, tune in, drop out
Robin Hanson says we are living in a "dream time", when survival instincts have been dulled by wealth so that Nature has (temporarily) let us get away with acting stupidly. I recall the old saying, "From clogs to clogs is only three generations" (i.e. the middle generation spends it all).
In this context, it's also interesting to note how at a time when we're drugging children and old people to stop them being a nuisance, libertarians are calling for young adults to have the right to zombiefy themselves with "harmless" mind-altering substances. Yes, they will still be able to work, some of them, for some time; I guess the same argument goes for functioning alcoholics. Dream on... until, as the Germans say, "Aus der traum, lieber Freund."
I've known black people who maintain that drugs liberalisation (and the associated laissez-faire approach to law enforcement) is a plot to keep their children in subjection. I tend to put it down to middle-class selfishness, instead; but I can see why they might think that.
2. Think big, think small
As higher taxation looms, some are already trying to draw a distinction between "productive" and "unproductive" workers. Well, effectively, practically everybody (including the poor) pays 40% tax already, when you look at the combination of income tax, National Insurance and sales taxes; though I do agree that a proposed 50% higher-rate income tax rate is likely to generate various avoidance strategies that will mostly wipe out the hope-for extra revenue.
But if Mish's friend "BC" is right, we are entering a "Schumpeterian Depression", during which big biz uses its access to finance to crush small enterprise; and so it may be a decade before young entrepreneurs develop the muscle to get out from under and start to succeed.
Besides, how much big business is founded on destroying small businesses and the self-employed? What, for example, if we looked at it closely, would be the real, total net benefit of the giant supermarkets? Weigh up the cheaper prices against the exploitation of their suppliers and the ruination of small shopkeepers - and the smashing of one of the ladders by which the aspirant working class - and their children - could rise and become self-supporting.
Monday, September 28, 2009
Where to turn, for financial security?
Richard Bookstaber (whom we've met before, here) looks at asset allocation and makes a point he's made before: in a crisis, everyone wants out, and the relative merits of different assets are ignored in the dash for cash. Provided cash (at bank) hasn't itself become risky - and after last year, that's not a given. Even outside the bank, there's inflation, devaluation and also, potentially, the fate of the Confederate dollar.
Leo Kolivakis comments, "I happen to believe that diversification is still important, but loses its power as huge inflows are going into all sorts of public and alternative asset classes."
That's the problem: we no longer know where to turn. As Kunstler comments, "the most perplexing part is that there hardly seems any safe place to preserve one's savings."
How about the smart, nimble operators? Investment guru Marc Faber spends his time looking at liquidity flows, trying to predict the next sudden tide and get in beforehand - not a game for the type of clients I have usually advised. And even he appears to be readying himself for the worst, "a total disaster, with a collapse of our capitalistic system as we know it today."
Recently, I seem to have been reading more commentators tending to the view that we are heading for that Mises "crack-up boom" - outlined here nine years ago, for example. And worse:
"And 'mid this tumult Kubla heard from far
Ancestral voices prophesying war!"
The great pleasure gardens of China's Emperor took some 40 years to build, in the first half of the eighteenth century. Vast, complex and exquisite, they were testimony to the wealth and power of the Middle Kingdom, only to be methodically destroyed in an act of punitive vandalism by the French and English in 1860. Premier Zhou Enlai decreed that the ruins should remain unaltered, a monumental lesson for the Chinese about the Western powers.
Of all the curses on humankind, long and vengeful memory may be the worst.
Leo Kolivakis comments, "I happen to believe that diversification is still important, but loses its power as huge inflows are going into all sorts of public and alternative asset classes."
That's the problem: we no longer know where to turn. As Kunstler comments, "the most perplexing part is that there hardly seems any safe place to preserve one's savings."
How about the smart, nimble operators? Investment guru Marc Faber spends his time looking at liquidity flows, trying to predict the next sudden tide and get in beforehand - not a game for the type of clients I have usually advised. And even he appears to be readying himself for the worst, "a total disaster, with a collapse of our capitalistic system as we know it today."
Recently, I seem to have been reading more commentators tending to the view that we are heading for that Mises "crack-up boom" - outlined here nine years ago, for example. And worse:
"And 'mid this tumult Kubla heard from far
Ancestral voices prophesying war!"
The great pleasure gardens of China's Emperor took some 40 years to build, in the first half of the eighteenth century. Vast, complex and exquisite, they were testimony to the wealth and power of the Middle Kingdom, only to be methodically destroyed in an act of punitive vandalism by the French and English in 1860. Premier Zhou Enlai decreed that the ruins should remain unaltered, a monumental lesson for the Chinese about the Western powers.
Of all the curses on humankind, long and vengeful memory may be the worst.
Inflation and the money supply
Interesting graph from Eric Janszen - he ignores the velocity of money (which can change quickly) and concentrates on money supply. He sees our situation as akin to that in 1981; I'm still thinking we're in the mid-70s, because round about 1982 was when we started to see real (post-inflation) returns on investments.
Sunday, September 27, 2009
Poverty is OK
Robin Hanson looks forward to being poor. But I fear the path there won't take us to the anonymous semi-contentment of the Dark Ages, because it passes through population crash first.
Duty
Update: the media are focusing on rumours of Brown's taking painkillers, allegedly related to his eye problems, which the PM denies. I thought they wanted a regime change? If so, they'd be keen to keep him on, as the Tories must be, and so wouldn't probe him like this. But maybe they're also keen not to be shown up by the blogosphere, which maintains that the news media are colluding to avoid raising a more serious health issue - this one is doing the rounds.
He's not the only one suffering from dark whispers. There was that mysterious 2004 family crisis of Blair's, which some suspected really had to do with his own supposed nervous debilitation; and Leo Abse's book on Blair attempted to unravel the man's psychology. I myself was asking friends within a year or two of 1997 whether they thought he was mad; at that point, they looked at me as though they thought I was, instead.
Saturday, September 26, 2009
Squaring the circle, packing your bags
In Britain, there are 28.89 million employed - 72.5% of the "people of working age"; median earnings approach £25,000.
In China, the average urban wage in 2006 was 1750 yuan per month, or (at today's exchange rate) slightly less than £2,000 per year.
_______
In Britain, there are 3 million homes where no-one works, with an average household benefit payment level of over £4,000 p.a. This doesn't factor in the cost of other benefits provided by the State, such as health and education. For example, State schooling costs something like £6,000 yearly per child.
In China, the official urban unemployment rate at the end of 2008 was 4.2%, or nearly 9 million people. This statistic does not include unemployed not eligible for benefits, or migrant workers - about 20 million out of 130 million migrants have no job. In industrialized Guangdong Province, for those who qualify, unemployment benefit for the first 24 months is 688 yuan per month, or £757 per year.
_____________
In Britain, the 27.5% of the "people of working age" that might be employed but are not, number approximately 10.96 million.
In China, estimates Eric Janszen of iTulip, there are 20 million officially unemployed and the real tally should be 40 - 50 million.
_______________
China has over 1 billion people and is desperate for land, and natural resources such as wood, water and arable soil. Despite restrictions on family size, her population continues to increase, largely because her people are getting to live longer (and will one day incur the high additional costs of growing old). She has industrialized at high speed and has built a massive skill base. She is continuing to acquire technological and scientific know-how, and is sucking in the world's steel and a panoply of key African and Australian minerals and rare earths. She sits on vast reserves of coal. The ruling Communist elite have not spent a long lifetime climbing the exceptionally dangerous slippery pole in their country, to see their beloved nation sink into chaos and their equalitarian beliefs defeated.
You are a British (or American) politician. You know all the above - or your handlers will tell you just before you go on "Question Time" or some other grill-the-pol show. (1) What will you say to your voters? (2) What private plans will you make for yourself, your family and your friends?
Wednesday, September 23, 2009
Trusting soul
So we're to lose a quarter of our sub-borne nuclear deterrent. Mexican standoff unilaterally defused by putting your gun down first, eh? On the other hand, remember what Churchill observed about the Hun.
Cut the cr-- and send 'em down
My wife (the smart one in this partnership) thinks Judge Judy should present the Jeremy Kyle Show, too. Now if only JJ, with her brisk, trenchant, from-the-shoulder, don't-pull-one-on-me style, could try all the soigné , sock-suspendered financial twisters that have jeopardised our collective wealth; five minutes in court and 20 years each in the hoosegow.
I had a dream last night
What a lovely dream it was
I dreamed we all were alright
Happy in a land of Oz...
- John Sebastian
I had a dream last night
What a lovely dream it was
I dreamed we all were alright
Happy in a land of Oz...
- John Sebastian
Tuesday, September 22, 2009
A glimpse of the past
Out with my wife's relations on Saturday in the Black Country (the old coal-fired industrial area). One elder recalled that when they were poor, his mother would put the kettle on the stove on a Sunday, so the windows would steam up and the neighbours would think that they were cooking lunch.
Up with bonds, down with equities, out with with-profits
After the stockmarket ructions, pension funds are getting more cagey and thinking about weighting more towards bonds (htp: Pension Pulse). (A seminar I went to maybe 10 years ago predicted this trend.) Bill Gross of Pimco is also thinking that way; at the same moment when others reckon the recession's over, or nearly so.
My concern is that the market is now so volatile that only active traders will be interested. The smoothing approach of British with-profits funds has been undermined by downswings so sharp that more than once recently, they have had to apply penalties to investors seeking to exit early; which in turn will make those investors less inclined to reinvest in with-profits, and indeed quite possibly put them off investment generally.
That, plus the need to take more income as the population ages, plus a poorer next generation that will work longer, be taxed more and have less in State and other pension provision, plus the burgeoning of the world population, the gradual equalization of world average income (and it's a very low average), plus increasing ecological limits to fast-buck-type growth, all tend to make me more a bear than a bull for as far as I can see, whatever may happen in the short term as a result of desperate overstimulation with fiat cash.
Yes, there'll be opportunities for the agile financial player; but for the mom-and-pop saver?
My concern is that the market is now so volatile that only active traders will be interested. The smoothing approach of British with-profits funds has been undermined by downswings so sharp that more than once recently, they have had to apply penalties to investors seeking to exit early; which in turn will make those investors less inclined to reinvest in with-profits, and indeed quite possibly put them off investment generally.
That, plus the need to take more income as the population ages, plus a poorer next generation that will work longer, be taxed more and have less in State and other pension provision, plus the burgeoning of the world population, the gradual equalization of world average income (and it's a very low average), plus increasing ecological limits to fast-buck-type growth, all tend to make me more a bear than a bull for as far as I can see, whatever may happen in the short term as a result of desperate overstimulation with fiat cash.
Yes, there'll be opportunities for the agile financial player; but for the mom-and-pop saver?
Monday, September 21, 2009
Where's the gold, really?
As the price of gold continues to float above $1,000, I do wonder where it all is, really. Thinking about the Federal Reserve, I suddenly remembered Joanna Southcott's box.
At its peak, the Fed held 12,700 tonnes of the metal, but it's hard to establish even what it claims to have now - try making sense of the prose the Fed issues on the subject here. Some think the vault now contains no more than a lottery ticket and a horse-pistol.
Could they be snorting with laughter over their glasses of Petrus as they look down at us trusting plebs?
At its peak, the Fed held 12,700 tonnes of the metal, but it's hard to establish even what it claims to have now - try making sense of the prose the Fed issues on the subject here. Some think the vault now contains no more than a lottery ticket and a horse-pistol.
Could they be snorting with laughter over their glasses of Petrus as they look down at us trusting plebs?
Sunday, September 20, 2009
The coming tide
Thanks to Tyrone for his comment directing us to a YouTube presentation by W E Pollock, someone I've viewed with interest before. The comment was in response to an FTAphaville piece that asked why the Dow was rising so strongly.
Pollock, whose presentations are useful to the layman because he is at pains to be clear and calm, notes that the volume of trade is low, which may mislead us as to the value of the market as a whole. It is as if, in a slow-moving housing market, your neighbour suddenly manages to sell his house for much more than expected, because the purchaser has certain private reasons to get in.
He also notes that the gains on the Dow are counteracted by the fall in the dollar's value, and this is a theme I've touched on many times. You have to look at real gains; and even when you think you're beating the present rate of inflation in your country, currency exchange movements may be the early indicators of higher future inflation. This is why, comparing where we are now to the period 1966 - 1982, I think we may yet see the real-terms equivalent of Dow 4,000 and FTSE 2,000.
Pollock goes on to consider gold, over which he puzzles (but then, there's a lot of dirty work and hugger-mugger in that market); and oil - if foreign economies begin to recover and industrial production rises, increasing the demand for oil, then if the dollar continues to be weak the price of energy in the USA will become so high as to damage growth prospects there.
So, where are we with all this?
Even academic economists are beginning (very belatedly) to question the validity of their models. Across the world, the games are so weighted and rigged, the rules so suddenly variable, that we are talking about how things ought to work, rather than how they really do. This is why it's now a fertile ground for conspiracy theorists: there really is a lot of conspiracy. Trouble is, we don't know all of the plots, all of the players, and all of the details.
What I think we can do, is look at the ocean tide, and not at the individual waves.
Historically, Western countries became wealthy on technological advances and were able to sell goods not just to each other, but to undeveloped countries in exchange for cheap resources. Then the latter countries began to industrialise, and goods could be carried at low unit cost in vast bulk across oceans and continents. All that remained was to break down political barriers to trade, as Nixon began to do with his visit to China in 1972.
Trouble is, controlling the rate of change. It's one thing to turn on your oil-fired central heating, another if your fuel storage tank catches fire. We want to carry on as we are (or as we used to be), but poor people are in a hurry to attain our wealthy lifestyles, and are disinclined to progress more slowly. Vast international businesses and globe-trotting billionaires stand to do very well out of facilitating this trade; national politicians are under pressure from their voters to resist it - but on a personal level, will know how rich they themselves will be when they leave office, so long as they don't try too hard for the people who elected them.
So, while I don't quite subscribe to the Dick-Dastardly-and-Mutley view of politician's summits (G-name-a-figure, Bilderberg, et al.), I can see the natural attraction for them of a world (or at least supranational) government. It means being further away from the Great Unwashed, mixing with all the Right People, fine wines and yachts etc; it means going with the flow, helping wealth and power to gather into certain centres, and organising dole handouts to regions that lose out as a result. Only the fools will try to play King Canute.
Imagine the world economies as a series of canal locks descending a steep hill. We are in the top section, the poor countries lower down. Now if all the gates are opened at once, there will be a destructive gush of water; the narrowboats in the top lock sink into the mud; the ones at the bottom float on a higher tide; a brave soul on a surfboard (the international trader) rides a thrilling wave down the hill.
Free-traders will argue that trade brings mutual benefits; but I don't think the argument works when world income disparities are so great. A Dutchman bought Manhattan from the occupying tribe for $24, but I doubt they'd get it back for that price now, not even with 400 years' interest.
It's coming, it's coming fast, it's coming destructively; and the people we pay to stop it are telling us the lies we want to hear and planning their personal advancement*. Let us return the favour.
* “It is a totally wrong notion of people to assume that the government does anything for the people; the government is there to do something for itself, and not for the people” – Marc Faber on GoldSeek, 12 September 2009
Pollock, whose presentations are useful to the layman because he is at pains to be clear and calm, notes that the volume of trade is low, which may mislead us as to the value of the market as a whole. It is as if, in a slow-moving housing market, your neighbour suddenly manages to sell his house for much more than expected, because the purchaser has certain private reasons to get in.
He also notes that the gains on the Dow are counteracted by the fall in the dollar's value, and this is a theme I've touched on many times. You have to look at real gains; and even when you think you're beating the present rate of inflation in your country, currency exchange movements may be the early indicators of higher future inflation. This is why, comparing where we are now to the period 1966 - 1982, I think we may yet see the real-terms equivalent of Dow 4,000 and FTSE 2,000.
Pollock goes on to consider gold, over which he puzzles (but then, there's a lot of dirty work and hugger-mugger in that market); and oil - if foreign economies begin to recover and industrial production rises, increasing the demand for oil, then if the dollar continues to be weak the price of energy in the USA will become so high as to damage growth prospects there.
So, where are we with all this?
Even academic economists are beginning (very belatedly) to question the validity of their models. Across the world, the games are so weighted and rigged, the rules so suddenly variable, that we are talking about how things ought to work, rather than how they really do. This is why it's now a fertile ground for conspiracy theorists: there really is a lot of conspiracy. Trouble is, we don't know all of the plots, all of the players, and all of the details.
What I think we can do, is look at the ocean tide, and not at the individual waves.
Historically, Western countries became wealthy on technological advances and were able to sell goods not just to each other, but to undeveloped countries in exchange for cheap resources. Then the latter countries began to industrialise, and goods could be carried at low unit cost in vast bulk across oceans and continents. All that remained was to break down political barriers to trade, as Nixon began to do with his visit to China in 1972.
Trouble is, controlling the rate of change. It's one thing to turn on your oil-fired central heating, another if your fuel storage tank catches fire. We want to carry on as we are (or as we used to be), but poor people are in a hurry to attain our wealthy lifestyles, and are disinclined to progress more slowly. Vast international businesses and globe-trotting billionaires stand to do very well out of facilitating this trade; national politicians are under pressure from their voters to resist it - but on a personal level, will know how rich they themselves will be when they leave office, so long as they don't try too hard for the people who elected them.
So, while I don't quite subscribe to the Dick-Dastardly-and-Mutley view of politician's summits (G-name-a-figure, Bilderberg, et al.), I can see the natural attraction for them of a world (or at least supranational) government. It means being further away from the Great Unwashed, mixing with all the Right People, fine wines and yachts etc; it means going with the flow, helping wealth and power to gather into certain centres, and organising dole handouts to regions that lose out as a result. Only the fools will try to play King Canute.
Imagine the world economies as a series of canal locks descending a steep hill. We are in the top section, the poor countries lower down. Now if all the gates are opened at once, there will be a destructive gush of water; the narrowboats in the top lock sink into the mud; the ones at the bottom float on a higher tide; a brave soul on a surfboard (the international trader) rides a thrilling wave down the hill.
Free-traders will argue that trade brings mutual benefits; but I don't think the argument works when world income disparities are so great. A Dutchman bought Manhattan from the occupying tribe for $24, but I doubt they'd get it back for that price now, not even with 400 years' interest.
It's coming, it's coming fast, it's coming destructively; and the people we pay to stop it are telling us the lies we want to hear and planning their personal advancement*. Let us return the favour.
* “It is a totally wrong notion of people to assume that the government does anything for the people; the government is there to do something for itself, and not for the people” – Marc Faber on GoldSeek, 12 September 2009
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