In a Dublin talk last week, Dmitri Orlov bears out my repeated theme of diversity, dispersion and disconnection - the way in which efficiency and survival are at odds. It's also a theme of James Howard Kunstler. Even Rob Kirby's latest post refers to a "financial ecosystem" and asserts that the concentration of power at the top threatens the structure.
Big changes are on the way. Jesse reports on how the world is weaning itself off the dollar; the Contrarian Investor notes how China is cornering the market in rare minerals vital to modern technology.
There is a power struggle - a host of power struggles - going on. The good news is that life goes on, too. The bad news is that not everybody makes it.
Don't be the doughboy this time.
Tuesday, June 16, 2009
Sunday, June 14, 2009
What the blackbird said
Every morning, a blackbird in our neighbourhood starts to sing. It begins with two distinctive melodies, and then (like Eric Clapton in his Cream days) improvises beautiful, complex variations on these themes.
We do the same. We complain of encroachments on our liberty, the debauching of our currency and national wealth, the weakening of the bonds that tie society together, and so on. And we do it many times, passing judgment with our "wise saws and modern instances", like Shakespeare's magistrate.
We're not alone. In a well-worth-reading article today, former Tory minister Neil Hamilton tells it like it is now with our rulers: democracy is dead (not that it was ever much alive). It's especially disturbing that senior politicians will say this now, not just the cranks among the public.
But why are we singing? Simone de Beauvoir said, "Every good book is a cry for help"; who do we hope will make speed to save us? And why does he have a sword and sceptre in his hands? Because to ask for help is to surrender power.
So let us combine against the oppressor. But who will lead us? And how will they mutate as they convert our assent into fresh authority? Is a libertarian party ultimately doomed by its oxymoronic essence?
George Orwell said, 'All historical changes finally boil down to the replacement of one ruling class by another. All talk about democracy, liberty, equality, fraternity, all revolutionary movements, all visions of Utopia, or "the classless society", or "the Kingdom of Heaven on earth", are humbug (not necessarily conscious humbug) covering the ambitions of some new class which is elbowing its way to power ...'
Like charity, liberty, wealth and happiness begin at home. Let us waste no more of our dreaming time on the puppets that wish to master us; in a Berkleian way, they are created and maintained only by our perception. Neither vote nor revolt; ignore. Trying to change society is like sending flowers to a soap opera wedding.
The revolution is personal. How much of your time and money could you save, reorganise, invest to make you and yours happier? "Il faut cultiver notre jardin."
And in our garden, the birds will sing.
We do the same. We complain of encroachments on our liberty, the debauching of our currency and national wealth, the weakening of the bonds that tie society together, and so on. And we do it many times, passing judgment with our "wise saws and modern instances", like Shakespeare's magistrate.
We're not alone. In a well-worth-reading article today, former Tory minister Neil Hamilton tells it like it is now with our rulers: democracy is dead (not that it was ever much alive). It's especially disturbing that senior politicians will say this now, not just the cranks among the public.
But why are we singing? Simone de Beauvoir said, "Every good book is a cry for help"; who do we hope will make speed to save us? And why does he have a sword and sceptre in his hands? Because to ask for help is to surrender power.
So let us combine against the oppressor. But who will lead us? And how will they mutate as they convert our assent into fresh authority? Is a libertarian party ultimately doomed by its oxymoronic essence?
George Orwell said, 'All historical changes finally boil down to the replacement of one ruling class by another. All talk about democracy, liberty, equality, fraternity, all revolutionary movements, all visions of Utopia, or "the classless society", or "the Kingdom of Heaven on earth", are humbug (not necessarily conscious humbug) covering the ambitions of some new class which is elbowing its way to power ...'
Like charity, liberty, wealth and happiness begin at home. Let us waste no more of our dreaming time on the puppets that wish to master us; in a Berkleian way, they are created and maintained only by our perception. Neither vote nor revolt; ignore. Trying to change society is like sending flowers to a soap opera wedding.
The revolution is personal. How much of your time and money could you save, reorganise, invest to make you and yours happier? "Il faut cultiver notre jardin."
And in our garden, the birds will sing.
Giant US slush fund?
Karl Denninger continues to reflect on a story that hasn't had much coverage - two Japanese have been caught in Italy, attempting to smuggle $134 BILLION in bearer bonds. KD thinks it's part of secret additional financing for the US.
This is not quite as ludicrously James Bond-ish as it seems. Bear in mind that some time ago, Brad Setser studied Treasury bond purchases by China and the UK and concluded that the latter country was acting as an additional conduit for the former's loans.
Good news for the Italians - their law says they'll take 40% of the contraband.
This is not quite as ludicrously James Bond-ish as it seems. Bear in mind that some time ago, Brad Setser studied Treasury bond purchases by China and the UK and concluded that the latter country was acting as an additional conduit for the former's loans.
Good news for the Italians - their law says they'll take 40% of the contraband.
Saturday, June 13, 2009
The housing market: qualifying my comments
Like many others, I'm in the habit of talking about "the housing market" in general terms. Surely this is no more helpful than talking about the average person's health, or the average temperature and climate of the Earth. In reality, there's a host of niches and scenarios - it's a sort of ecological system.
The London-based retiree looking for a bungalow in the South or South-West; the cereal packet family-of-four headed by a breadwinner; the pair of teachers deciding whether one can afford to go part-time; the buy-to-renter who sold out in time; the one who didn't; the rich guy dashing off a cheque for a Park Lane house to add to his international collection; the divorcee who bought out her ex-husband's share of the family home because she just can't let go; the car worker who's just lost his job; the Last Of England emigrant; the oldie looking for a sheltered housing apartment.
Houses sold by estate agent, by private treaty, by auction; houses sold, repossessed, swapped, abandoned, divided, combined, left as legacies, sold for care costs, seized by the law, occupied by squatters; flats, terraced houses, semis, detached dwellings. Brick and mortar, cruck, stone, straw bale, genuine and mock Tudor, eco.
Houses in central London, the London boroughs, the Home Counties, the provinces, Wales, Scotland and South-West; houses in thriving, decaying and recovering cities; in towns, villages, hamlets, lonely moors, islands; even a house on a pair of rocks on Newquay's beach.
How can one generalise meaningfully?
The London-based retiree looking for a bungalow in the South or South-West; the cereal packet family-of-four headed by a breadwinner; the pair of teachers deciding whether one can afford to go part-time; the buy-to-renter who sold out in time; the one who didn't; the rich guy dashing off a cheque for a Park Lane house to add to his international collection; the divorcee who bought out her ex-husband's share of the family home because she just can't let go; the car worker who's just lost his job; the Last Of England emigrant; the oldie looking for a sheltered housing apartment.
Houses sold by estate agent, by private treaty, by auction; houses sold, repossessed, swapped, abandoned, divided, combined, left as legacies, sold for care costs, seized by the law, occupied by squatters; flats, terraced houses, semis, detached dwellings. Brick and mortar, cruck, stone, straw bale, genuine and mock Tudor, eco.
Houses in central London, the London boroughs, the Home Counties, the provinces, Wales, Scotland and South-West; houses in thriving, decaying and recovering cities; in towns, villages, hamlets, lonely moors, islands; even a house on a pair of rocks on Newquay's beach.
How can one generalise meaningfully?
Why I think house prices must continue to fall
The West doesn't save enough and has borrowed too much, so it's going to be a moneylender's market. So, either:
- Interest rates go up, to make it worthwhile for lenders to continue financing us. This will cut into take-home pay and make it more difficult to service large mortgages. House prices will drop, and so, eventually, will rents.
- The government will continue pumping cash into the system, one way or another. Our currency will depreciate further. Imports will become more expensive - and we import essentials like food and fuel. Since we have let our industries wither, we cannot quickly turn to providing for our own needs. So prices will soar and remain high for a long time. This will cut into take-home pay and make it more difficult to service large mortgages. House prices will drop, and so, eventually, will rents.
"Eventually" is happening now, as it happens. We were looking for a place to rent, found one on the Internet at £595/month, looked round it last week and the agent handed us a details sheet with the asking rent: £450.
Friday, June 12, 2009
Return of the spiv
Schiff's on a roll - read him. It's long, but worthwhile, epecially the predictive part at the end. An Eastern credit strike, a collapsing dollar, rapid inflation, price controls and the development of a black market. Unless we bite the bullet and accept high interest rates and a further, bigger crash in house and share prices.
Charles Hugh Smith agrees.
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