Water wars

James Quinn raises another critical resource issue, namely, water.

Taking his list "Total Renewable Freshwater Supply, by Country" (which excludes Australia, though the situation there could easily become much more challenging), I divided the figures by population size to obtain a per capita water supply, as follows:

From this we note that Canada may have something to offer the USA (Al Capone would be into mineral water now, I guess), and that India may face an even more desperate shortage than China, unless and until desalination plants take off. And parts of South America may have their attractions.

But the Congo: no. I once taught a lad whose family trekked 1,000 miles to the coast to get away from the civil war, and he very nearly didn't make it, because of a blood-thirsty armed patrol. His father nominated him for the chop rather than the favourite son, but they eventually relented.

Any views from survivalists as to where to move the family for a long-term future?

Don't save the planet, save the country

A couple of days ago, the Daily Telegraph reported on threats to our energy supply. "There will be huge reliance in the short term on gas, with up to 50 per cent of electricity coming from gas fired power stations. "

Instead of challengeable pi-jaw about global cooling/warming/okay-let's-compromise-and-call-it-change, why don't we look to reducing our energy use for the sake of liberty? No more dirty deals with Putin, Gaddafi, the Saudis et al. And less chance of another industry-crippling 1974 energy price hike.

An initiative that I think will run long and grow big is "transition towns", started by a man called Rob Hopkins in Totnes, Devon. Out from among the patchouli-scented crystal-wavers and hare-worshippers will yet come ideas to help us adapt to Peak Oil.

The Fourth Horseman

Michael Panzner's prescient book "Financial Armageddon" listed four major threats to the economy: debt, retirement and healthcare benefits for the elderly, government bailouts, and financial derivatives. So far, three have exploded into public consciousness; but the fourth is still to come.

Some say that the derivatives market is now worth over $1 quadrillion, as compared with gobal GDP of some $55 trillion. For most people, these numbers mean nothing, so here's a graphic representation:

Supposedly, this shouldn't matter, since every bet involves two parties and so the sum total is zero. This ignores counterparty risk, i.e. the chance that the other person will fail to deliver when the time comes. It's the sort of thing that busted the UK's oldest bank, Barings.

From what little I understand, the derivatives market suffers from much the same complexity and obscurity as the packaged mortgage mess - the dealers are making loads of bets with loads of other people - so the misery could get spread around rather than just take down one or two incautious players.

If just 1% of the derivatives market fails, this equates to some 18% of global GDP. We in the UK are dealing with an economic contraction of less than 6% year-on-year, and that's causing paroxysms.

An argument for holding some emergency cash, away from the banks?

Fight back against self-organisation

A lovely contrarian piece from Lifehacker: dump your to-do-list. Just do one thing at a time.

I can see the logic in this: when I've listed all I have to do, the heart sinks and then I rebel against the lot. When you've planned your life too systematically, the life-impulse within you is driven to smash the system. A degree of disorder, of randomness, of openness to change, is like opening a window in a stuffy room.

"Delight in Disorder" by Robert Herrick:

A sweet disorder in the dress
Kindles in clothes a wantonness:
A lawn about the shoulders thrown
Into a fine distraction--
An erring lace, which here and there
Enthrals the crimson stomacher--
A cuff neglectful, and thereby
Ribbands to flow confusedly--
A winning wave, deserving note,
In the tempestuous petticoat--
A careless shoe-string, in whose tie
I see a wild civility--
Do more bewitch me than when art
Is too precise in every part.

Unemployment a good thing? For economists?

A thought-provoking piece from Mark Thoma, in which he argues that many jobs that have gone deserved to go; it's the creation of new ones that should occupy our minds.

There is a pipe-smoker-in-a-leather-chair comfortableness about this (I'm not sure what the unemployment rate is for economists; should the 10 - 15,000 who failed to predict the credit crunch all be sacked?), but he may be right.

However, the allegedly self-righting mechanisms of the market may not operate quite so efficiently in a single nation's economy when there are other major causes of disequilibrium at work in the world, including quarrelsome international politics and sharp disparities in global wage rates.

An image: picture a man in his study, happily using a tiny screwdriver to adjust the mechanism in a carriage clock, while a block of frozen waste hurtles silently towards him from a passing jet liner.

PS:

Coincidentally: "... if you fail to heed the roar in your ears and fail to look up what will inevitably come, while it may surprise you, does not surprise anyone who has passed sixth grade math." - Denninger

Welcoming the disaster

Two (among others) good links from Credit Writedowns:

"On April 17, 2007, famed short-seller Jim Chanos and other hedge fund managers met under tight security at the World Bank in Washington for the G-8 meeting. Chanos and Paul Singer briefed prominent policy officials about the growing financial instability. They gave irrefutable evidence that a catastrophe was building. They told officials that banks that were about to sink the global economy. They called for decisive action.

And they were ignored.

Gordon Brown was there..."

- New Deal 2.0

My comment: there's always a nice conspiratorial frisson when you think you can show They Knew All Along. Except there will have been other voices (like the 10 - 15,000 American economists who didn't foresee the credit crunch). And self-delusion. I don't think this nails the guilty parties.

Expect a major house-cleaning, a second American Revolution. We predicted the "Great Depression 2" around 2012. Well, we doubt taxpayers will passively sit one more time, like in the 1930s, in 2000, and the past few years. Next time voters will take a page from the history books about past revolutions in the American Colonies, France and Russia. A perfect storm will erupt in a massive global credit meltdown, bringing down Wall Street and the clandestine $670 trillion shadow central banking system.

- Paul Farrell

My comment: The appeal of revolution is to juvenile minds drunk on testosterone and misled by ignorant optimism. This is why the Communists have focussed on the young. I am reminded of how Rupert Brooke welcomed the onset of WWI:

Now, God be thanked Who has matched us with His hour,
And caught our youth, and wakened us from sleeping,
With hand made sure, clear eye, and sharpened power,
To turn, as swimmers into cleanness leaping,
Glad from a world grown old and cold and weary,
Leave the sick hearts that honour could not move,
And half-men, and their dirty songs and dreary,
And all the little emptiness of love!

I don't think he would have agreed with his younger self by the end of the Great War. After a disaster comes the greater disaster: Romanticism.

What do our politicians control?

Plenty has been said about the EU and how it rules us, withour ever having had our consent to do so. But equally, our daily lives are governed by giant firms, often foreign-based.

For example, (and I offer this merely as a tiny, representative instance) I now have to pay a Frenchman to talk to a Welshman.

On September 8, 1966, the first (and very beautiful) Severn Bridge opened. It was constructed with the inventive help of the Royal Engineers (my father included), who floated prefabricated sections of the roadway on pontoons down the river, to be hoisted into position by cranes atop the towers that would hold the suspension cables.

I stood on the Welsh side with my mother and brother, listening to the Queen's speech from across the water, and watched as the Royal car came through. (Only a West Indian family near us had had the forethought to buy some flags on sticks to wave as Her Majesty passed.) The toll for cars was the then-equivalent of 35 US cents.

30 years later, a second bridge was completed, crossing further down the estuary to Cardiff and West Wales. A new holding company was formed (Severn River Cossings plc), as a partnership between John Laing plc, a French firm, GTM-Entrepose, and others.

John Laing plc is based in London and controls assets worth £698 million (December 2008 accounts); but the revenue from both bridges went to GTM-Entrepose which was subsequently taken over by Vinci Concessions SA, a subsidiary of Vinci SA, which controls assets worth almost 52 billion Euros and is based in Rueil-Malmaison, France.

The toll for cars is now £5.40 (you pay to get into Wales; any fool who wishes to leave can do so for free), and as late as last month there were protests that this highwaymanning is hampering trade and transport. But what, exactly, can the private citizen, the commercial haulier, or even the professional politican do? Doubtless any attempt by HMG to intervene would be challenged in a European court.

I think our national politicans are little better than a species of fraudster, pretending that they can do something for us but (I suspect) privately agreeing among themselves that they are powerless. In which case, all they can do is take instructions from their wealthy patrons and (perhaps partly out of impotent spite) divide and bully the insignificant people, some of whom (at permitted intervals, to be determined by their masters) vote them into office.

And now, I want to wave my little flag.