Shagang, the Chinese steel company owned by self-made billionaire Shen Wenrong, is raising its prices, according to Steel Business Briefing (4 January 2009).
In a manufacturing recession, this is a counterintuitive move by the man who bought what was left of the German "Phoenix" steelworks and shipped it to the Yangtze, reasoning that a ready-made factory would not only get into production faster, but (at the scrap price he paid for it) without the debt burden that would ruin his competitors when (as he foresaw) the next downturn came.
The company may also push ahead with its plan to "go public" and expand its operations.
We could do with people like him, over here.
Wednesday, January 07, 2009
Tuesday, January 06, 2009
Time for another Jubilee
Karl Denninger elegantly demonstrates that compound interest on debt will always tend to blow up the economy, if the interest rate x is more than y (the average rate of economic growth) + z (the average rate of default).
Lenders will try to achieve this blessed state of affairs, but if they succeed, they will eventually end up owning everything, and the system will go "pop" long before that point. Which is why the Bible talks about a Jubilee year of total debt forgiveness, occurring every half-century.
Getting governments to take over all bad debts interferes with that reset, and so the "pop" must be louder when it finally, inevitably happens.
Lenders will try to achieve this blessed state of affairs, but if they succeed, they will eventually end up owning everything, and the system will go "pop" long before that point. Which is why the Bible talks about a Jubilee year of total debt forgiveness, occurring every half-century.
Getting governments to take over all bad debts interferes with that reset, and so the "pop" must be louder when it finally, inevitably happens.
They could be right, darn it
The British Government claims it wants to do more for our health.
There's the new Change4Life campaign, encouraging us to eat less fat, take more exercise and live longer; and there are the perennial pushes to give up smoking and (after they've extended the licensing hours and vastly increased the number of licensed outlets) reduce alcohol consumption.
On the other hand, we have the prospect of the State pension system hitting the buffers, thanks to millions of coffin-dodgers; not to mention the cost of care homes and the bed-blocker burden on the National Health Service. And if we all became totally abstemious, we would cost the State its £10 billion annual revenue from tobacco, and £8 billion from alcohol. At first sight, if you wanted to destroy the State, you'd follow its advice - a novel strategy of subversion by civil obedience.
Hence, tabloid-style contrarianism! I haven't found the evidence, but I expect that staying healthy (and working longer) will more than pay for itself, by reducing the costs of chronic ill-health and increasing revenue from taxes on income.
There's the new Change4Life campaign, encouraging us to eat less fat, take more exercise and live longer; and there are the perennial pushes to give up smoking and (after they've extended the licensing hours and vastly increased the number of licensed outlets) reduce alcohol consumption.
On the other hand, we have the prospect of the State pension system hitting the buffers, thanks to millions of coffin-dodgers; not to mention the cost of care homes and the bed-blocker burden on the National Health Service. And if we all became totally abstemious, we would cost the State its £10 billion annual revenue from tobacco, and £8 billion from alcohol. At first sight, if you wanted to destroy the State, you'd follow its advice - a novel strategy of subversion by civil obedience.
Hence, tabloid-style contrarianism! I haven't found the evidence, but I expect that staying healthy (and working longer) will more than pay for itself, by reducing the costs of chronic ill-health and increasing revenue from taxes on income.
Monday, January 05, 2009
Deflation, low interest rates and the poor old saver
The British Government claims it wants to do more for the saver. Actually, it's already done a lot: the Daily Telegraph reports that the Halifax estimates house prices fell by 16.2% in 2008. Putting it another way, someone holding cash in a shoebox has made 19.33% tax-free, measured in house price terms; or 32.22% gross for a 40% taxpayer.
And that's a point: the government doesn't tax you on the gains of deflation. But I'm sure they're keen to rectify that: normal inflation will be resumed as soon as possible.
And that's a point: the government doesn't tax you on the gains of deflation. But I'm sure they're keen to rectify that: normal inflation will be resumed as soon as possible.
Sunday, January 04, 2009
MSM admits keeping shtum
Edmund Conway breaks journalistic ranks to admit he should've said something sooner.
Disaster deferred (and increased), not averted
Karl Denninger goes back to basics, explaining how the reflation is merely paying you-now from you-future's account. Knit faster, we're running out of wool.
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