Stuart Staniford takes a point I've read recently in Vernon Coleman's "Oil Apocalypse", about biofuels threatening food supplies for the world's poor, and extrapolates frighteningly:
... both oil and cereals are global commodity markets. If it's profitable to make food into fuel in the US, even without a subsidy, then it's profitable elsewhere also - possibly more so given lower labor costs. So the basic growth dynamics are the same. The infection just hasn't got as strong a grip on the whole globe yet, but it's growing at similar rates.
... I expect oil prices to increase in the medium term, though certainly they could go down in the short-term if the credit crunch affects the global economy enough.
... When we have a bidding war between the gas tanks of the roughly one billion middle class people on the planet, and the dinner tables of the poor, where does that reach equilibrium?
... We noted earlier that according to the UN about 800 million people are unable to meet minimal dietary energy requirements. That is 12% of the world population. [...] we can estimate that a doubling in food prices over 2000 levels might bring 30% or so of the global population below the level of minimal dietary energy requirements, and a quadrupling of food prices over 2000 levels might bring 60% or so of the global population into that situation.
Monday, January 07, 2008
Zero sum for the lower echelons
Martin Hutchinson (07 January) makes my case, with particular reference to Tata and Jaguar-cum-Land Rover :
... it seems likely that the most skilled Westerners will continue to give their countries a comparative advantage against emerging markets. However, there is no guarantee that these research-intensive sectors are likely to support the entire Western population, far from it. They are highly cyclical, benefiting hugely from an active stock market and venture capital market. Further there is no evidence that innovation itself, as distinct from the fruits of recent past innovations, is significantly expanding as a percentage of output -- indeed, research expenditure has if anything declined.
... Since the majority of location-dependent jobs in Western countries are low-skill it therefore follows that if governments wish to protect local living standards, they need to discourage low-skill immigration. Except in Japan, they have not been doing so; both in the EU and the United States low-skill immigration, frequently illegal immigration, has got completely out of control and is immiserating the working classes.
... the economic histories of a high proportion of the Western population under 30, except the very highly skilled, will involve repeated bouts of unemployment, with job changes involving not a move to higher living standards but an angry acceptance of lower ones. By 2030, it is possible that the median real income in the United States and Western Europe may be no more than 50-60% of its level today.
This will expose the democratic divide between those who vote and influence the system in their favour, and the rest. The class division could sharpen as "I'm all right Jack" is replaced by "One can't complain, Piers".
Sackerson awards a Prose Prize for Hutchinson's use of the term "immiserating".
P.S.
... and presumably this will have an obvious effect on residential property prices. Who's for selling up and buying a caravan?
... it seems likely that the most skilled Westerners will continue to give their countries a comparative advantage against emerging markets. However, there is no guarantee that these research-intensive sectors are likely to support the entire Western population, far from it. They are highly cyclical, benefiting hugely from an active stock market and venture capital market. Further there is no evidence that innovation itself, as distinct from the fruits of recent past innovations, is significantly expanding as a percentage of output -- indeed, research expenditure has if anything declined.
... Since the majority of location-dependent jobs in Western countries are low-skill it therefore follows that if governments wish to protect local living standards, they need to discourage low-skill immigration. Except in Japan, they have not been doing so; both in the EU and the United States low-skill immigration, frequently illegal immigration, has got completely out of control and is immiserating the working classes.
... the economic histories of a high proportion of the Western population under 30, except the very highly skilled, will involve repeated bouts of unemployment, with job changes involving not a move to higher living standards but an angry acceptance of lower ones. By 2030, it is possible that the median real income in the United States and Western Europe may be no more than 50-60% of its level today.
This will expose the democratic divide between those who vote and influence the system in their favour, and the rest. The class division could sharpen as "I'm all right Jack" is replaced by "One can't complain, Piers".
Sackerson awards a Prose Prize for Hutchinson's use of the term "immiserating".
P.S.
... and presumably this will have an obvious effect on residential property prices. Who's for selling up and buying a caravan?
Gold boom, gold bust
Brady Willett offers his predictions for 2008, including (at some stage) a major correction in the gold price, and Chinese equities.
I've reported expert comment before, about the vulnerability of gold to market manipulation and speculation. I think I'll keep on sitting out this dance.
I've reported expert comment before, about the vulnerability of gold to market manipulation and speculation. I think I'll keep on sitting out this dance.
Inflation or deflation: an expert writes
So it's not just me, even chart analysts like Captain Hook can't decide about IN vs. DE.
Also heartening to see my suggestion re insider jiggery-pokery echoed here:
As an aside, I still don't know what to make of the triangle / diamond in Goldman's chart (see Figure 4) other than they plan to squeeze stocks higher under the cover of low volumes over Christmas holidays in justifying their bonuses.
Also heartening to see my suggestion re insider jiggery-pokery echoed here:
As an aside, I still don't know what to make of the triangle / diamond in Goldman's chart (see Figure 4) other than they plan to squeeze stocks higher under the cover of low volumes over Christmas holidays in justifying their bonuses.
Sunday, January 06, 2008
A winning combination
The Daily Mail alleges a new craze called "celebrity maths", where you combine two famous faces to make a third. Who might be the third here?And what other political combinations would you like to see?
Gold and liberty
Fear, and the resentment of the oppressed, are more dangerous than bullish aggression.
I watched a programme last night about how we very nearly had the Third World War in 1983. This was a time when Russia was especially paranoid about the West's military intentions - spies were even ordered to report how many lights were on in late evening at the Ministry of Defence in London, apparently not knowing that the offices were lit so the cleaners could do their work.
Then in September, a Soviet spy satellite, fooled by sunlight reflecting off high-level cloud, reported not one, but five missile launches from America. The Russian monitor on duty ignored the klaxon and flashing screen, backed his judgment and told his superiors it was a false alarm, for which he was ultimately discharged from the Army. Wikipedia says his name is Stanislav Petrov. He's certainly worth more than the $1,000 the Association of World Citizens could afford to award him. We may owe him our lives.
Looking for updates on the gold dinar, I came across this blog by a Pakistani, in which he looks to the Islamic dinar as a way of breaking the enslavement of the world by a fiat-currency banking cartel. Irrespective of whether he's justified in his analysis of the situation, or reasonable in his hopes for such a currency, we should note the victim-perception. I seem to recall a maxim (from Sun Tzu?) that you should fear a weak enemy.
Which brings us back to the economic vulnerability of the UK and USA. Weakness can invite aggression, but also makes the weak fear an attack even when it isn't coming. Worryingly for a potential aggressor, weakness may be feigned:
22. If your opponent is of choleric temper, seek to irritate him. Pretend to be weak, that he may grow arrogant. ("Laying Plans")
I don't think you can truly be free until you are strong and independent. We need to get our houses in order, so we can deal with others from a secure base - which is safer for all involved.
I watched a programme last night about how we very nearly had the Third World War in 1983. This was a time when Russia was especially paranoid about the West's military intentions - spies were even ordered to report how many lights were on in late evening at the Ministry of Defence in London, apparently not knowing that the offices were lit so the cleaners could do their work.
Then in September, a Soviet spy satellite, fooled by sunlight reflecting off high-level cloud, reported not one, but five missile launches from America. The Russian monitor on duty ignored the klaxon and flashing screen, backed his judgment and told his superiors it was a false alarm, for which he was ultimately discharged from the Army. Wikipedia says his name is Stanislav Petrov. He's certainly worth more than the $1,000 the Association of World Citizens could afford to award him. We may owe him our lives.
Looking for updates on the gold dinar, I came across this blog by a Pakistani, in which he looks to the Islamic dinar as a way of breaking the enslavement of the world by a fiat-currency banking cartel. Irrespective of whether he's justified in his analysis of the situation, or reasonable in his hopes for such a currency, we should note the victim-perception. I seem to recall a maxim (from Sun Tzu?) that you should fear a weak enemy.
Which brings us back to the economic vulnerability of the UK and USA. Weakness can invite aggression, but also makes the weak fear an attack even when it isn't coming. Worryingly for a potential aggressor, weakness may be feigned:
22. If your opponent is of choleric temper, seek to irritate him. Pretend to be weak, that he may grow arrogant. ("Laying Plans")
I don't think you can truly be free until you are strong and independent. We need to get our houses in order, so we can deal with others from a secure base - which is safer for all involved.
Iraq may have the last laugh
A company called Sebastian River Holdings is substantially increasing its investment in Iraq:
... prior to the war with Iraq the Dinar was $3.00+ per US Dollar.
...Today the country is almost debt free; Iraq is one of the leaders in oil, natural gas and holds a huge amount of gold in its country.
... The Company believes in the near future there will be a revalue of the Iraq Currency, it is the Company's opinion after doing its due diligence and public statements from Iraq's government officials, that the revalue could come in at between .82 and 1.00 per US Dollar.
... prior to the war with Iraq the Dinar was $3.00+ per US Dollar.
...Today the country is almost debt free; Iraq is one of the leaders in oil, natural gas and holds a huge amount of gold in its country.
... The Company believes in the near future there will be a revalue of the Iraq Currency, it is the Company's opinion after doing its due diligence and public statements from Iraq's government officials, that the revalue could come in at between .82 and 1.00 per US Dollar.
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