Sex, war and conquest

Peter Hitchens writes about a cloud no bigger than a man's hand on the horizon, namely the gender imbalance in China. By 2020, there will be 30 million more men than women in the breeding-age section of the population. Hitchens observes:

But men without women are altogether more troublesome than women without men, especially when they are young.

All kinds of speculation is now seething about what might happen; a war to cull the surplus males, a rise in crime, a huge expansion in the prostitution that is already a major industry in every Chinese city, a rise in homosexuality.

I've put in a comment but who knows if it'll get through:

"All kinds of speculation is now seething about what might happen; a war to cull the surplus males..."

Yes, but not Chinese males, I think.

Meantime, I recall that Chinese who settle in Tibet are permitted more than one child. I would also think there's a lot of grabbing Tibetan girls as wives, while Tibetan males are pushed off to wander around their country looking for casual employment by a growing class of Chinese entrepreneurs, the latter enabled and abetted by the Party and funneled money.

Next stop for this treatment, Arunachal Pradesh, I'd guess.

Sovereign debt default risk

CMA have released their first quarter report on sovereign debt ratings, as implied by market pricing of the 5-year default risk on government bonds. I give below a rearranged extract to show where the USA and the UK stand in relation to other countries.

It's worth noting that despite recent improvement, the UK is still out of the "AAA" bracket - by two rungs.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Whose bonds would you buy?

CMA have released their first quarter report on sovereign debt ratings, as implied by market pricing of the 5-year default risk on government bonds. I give below a rearranged extract to show where the USA and the UK stand in relation to other countries.

It's worth noting that despite recent improvement, the UK is still out of the "AAA" bracket.

Circles and straight lines

The above chart from here (htp: Global Perspectives) is another of those attempts to perceive underlying order in the apparently random movement of the market and the economy. I've tried the same myself and suggested that the period from 2000 on may be like 1966 - 1982 (the last top and bottom of the market when adjusted for inflation). The interesting thing about the above picture is that the c. 16-year cycle appears to work over a much longer time - starting with the later part of the nineteenth century.

The cycle is not very regular - it varies from about 12 - 20 years - but tends to support my feeling that the real bottom this time may lie in the next 5 - 10 years.

Another quibble is that while some aspects may have a circular form, there are also linear developments that could change everything. One such is China's awakening from its centuries-long economic slumber, with the result that the world's financial centre of gravity is shifting from West to East; another, related to the first, is the unprecedented growth of debt in Western economies. A third is the development of computer technology and lightspeed communications, so that knowledge and expertise that took centuries to acquire can be transferred rapidly to developing economies. What we have lost through folly, we may not be able to regain through hard work.

This is why some commentators have switched their attention to the social, political and military implications of a permanent power shift - from democracies to authoritarian governments of one kind or another. Michael Panzner has tried to follow up the success of his Financial Armageddon with just such a conspectus, but events in the next decades will be determined by even more complex and subtle factors than the ones that led to the crashing end of the twentieth century's money system.

It would be a neat finish to observe that the Titanic had a casino and that the latter didn't have any effect on the iceberg - but (perhaps fortunately for haters of the glib), the ship didn't have a gambling joint. Though there was multimillionaire John Jacob Astor and his cronies, playing high stakes card games in the smoking room.

In short, for those who are focused on the money, I still believe worse is to come than has happened already. Others should remember it's not all about money.
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DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

The turning point may be 2016 - 2020

The above chart from here (htp: Global Perspectives) is another of those attempts to perceive underlying order in the apparently random movement of the market and the economy. I've tried the same myself and suggested that the period from 2000 on may be like 1966 - 1982 (the last top and bottom of the market when adjusted for inflation). The interesting thing about the above picture is that the c. 16-year cycle appears to work over a much longer time - starting with the later part of the nineteenth century.

The cycle is not very regular - it varies from about 12 - 20 years - but tend to support my feeling that the real bottom this time may lie in the next 5 - 10 years.

Another quibble is that while some aspects may have a circular form, there are also linear developments that could change everything. One such is China's awakening from its centuries-long economic slumber, with the result that the world's financial centre of gravity is shifting from West to East; another, related to the first, is the unprecedented growth of debt in Western economies. A third is the development of computer technology and lightspeed communications, so that knowledge and expertise that took centuries to acquire can be transferred rapidly to developing economies. What we have lost through folly, we may not be able to regain through hard work.

This is why some commentators have switched their attention to the social, political and military implications of a permanent power shift - from democracies to authoritarian governments of one kind or another. Michael Panzner has tried to follow up the success of his Financial Armageddon with just such a conspectus, but events in the next decades will be determined by even more complex and subtle factors than the ones that led to the crashing end of the twentieth century's money system.

It would be a neat finish to observe that the Titanic had a casino and that the latter didn't have any effect on the iceberg - but (perhaps fortunately for haters of the glib), the ship didn't have a gambling joint. Though there was multimillionaire John Jacob Astor and his cronies, playing high stakes card games in the smoking room.

In short, for those who are focused on the money, I still believe worse is to come than has happened already. Others should remember it's not all about money.

Paging Lord Tebbit...

I like Norman Tebbit; he is his own man. And he has the courtesy to respond to commenters on his blog, however deranged they may be. Perhaps he will respond to the following, which I have submitted to this post of his:

Are Conservatives really conservative, in the sense of wishing to preserve the country? A message I have been trying to get out for some time, is that the financial bust that has scarcely begun, has its roots in excessive growth of the money supply not only under Labour but also under Conservative administrations.

Regrettably, The Bank of England’s website gives figures for M4 only as far back as 1963, but comparing annual changes in M4 with GDP, it’s clear that that banks have run riot for most of the last 47 years. Far more has been lent into the economy than could be justified by growth in economic activity, and the result has been a debt-fuelled ballooning of asset valuations.

From 1979 to 1990, GDP grew annually by an average of 8% or so, but M4 by 19% p.a., a difference of 11% p.a. compound. The New Labour years have seen something like 10% M4 growth and 5% GDP growth p.a., in other words a discrepancy of only half that experienced during the boom years of the 1980s.

Perhaps one could argue ignorance as a plea in mitigation by both political parties; after all, only some 12 professional economists out of an estimated 20,000 worldwide predicted the credit crunch (because debt does not feature highly in classical economic theory) – though I was relaying warnings from mid-2007 onwards, via my blog. But surely ignorance can be no excuse now.

What, then, do the Conservatives propose to do to deal with a banking system that has brought us to the verge of final national destruction?

Housing - plenty of room to drop

Charles Hugh Smith points out that in some areas, property values have already dropped by over 70% from their heady 2006 peak.