... and goodbye to a colourful industry player: see Nick's latest here.
All original material is copyright of its author. Fair use permitted. Contact via comment.
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Tuesday, 29 January 2013
Saturday, 26 January 2013
The Chinese are facing unemployment, too: Foxconn replacing workers with robots
See this on SingularityHub. Hat-tip to "backwardsevolution" commenting here (comment dateline 23 January at 9:21 am).
Thursday, 24 January 2013
Wednesday, 23 January 2013
Nick Drew: EDF angling for guaranteed profits from building nuclear power stations
Our expert is caustic about the wily French operator and supine British Government - see the Energy Page.
Tuesday, 22 January 2013
Saturday, 19 January 2013
Fiji: trouble in Paradise
Fiji's blogwires are humming with discontent at Prime Minister Bainamimara's decision to scrap a draft Constitution that would have required respect for democratic principles. The island has been under military rule since 2009, but has suffered civil unrest since the late 1980s.
As in Ulster, the establishment of peaceful, settled democracy in Fiji is permanently problematic, and for the same reason: the historic importation of outsiders. In 1879, five years after becoming a British colony, indentured labourers began to arrive from India, mostly to work in the sugar industry; some 60,000 were brought in until the scheme ended in 1916.
The workers' contract allowed them to return home after five years, but at their own expense (likely unaffordable); otherwise, free passage would be provided at the end of the tenth year. The subtlety of this plan was that naturally, by that time many of the workforce would be married, have young families and generally have put down roots.
It looks like another legacy of colonialism in the service of business interests. You can follow developments on some of Fiji's blogs on our World Voices page - see the sidebars there.
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
As in Ulster, the establishment of peaceful, settled democracy in Fiji is permanently problematic, and for the same reason: the historic importation of outsiders. In 1879, five years after becoming a British colony, indentured labourers began to arrive from India, mostly to work in the sugar industry; some 60,000 were brought in until the scheme ended in 1916.
The workers' contract allowed them to return home after five years, but at their own expense (likely unaffordable); otherwise, free passage would be provided at the end of the tenth year. The subtlety of this plan was that naturally, by that time many of the workforce would be married, have young families and generally have put down roots.
It looks like another legacy of colonialism in the service of business interests. You can follow developments on some of Fiji's blogs on our World Voices page - see the sidebars there.
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Friday, 18 January 2013
Nick Drew: Why Germany is forced back to coal
Our expert explains why eco-minded Germans have returned to the energy source we thought we needed to stop using.
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Thursday, 17 January 2013
When money velocity stabilises, inflation will let rip
A while back, before the trillion-dollar-coin idea that was publicly kited and then smacked down, I too was wondering why, if the government can conjure up money out of thin air and lend it to itself, it can't similarly forgive itself.
Insofar as banks are allowed to get involved brokering the deal, I suppose debt cancellation might deprive them of some of their income stream, but other than inconveniencing a few thousand banking families it wouldn't seem to be a bad scheme. As President Andrew Jackson famously said, "You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! " One longs today for such un-mealy-mouthed leaders.
But this kind of living on debt causes real damage, whether or not it is ultimately extinguished. Because the government is trying to keep things normal in the economy, and spends the borrowed money on salaries and other benefits. This is increasing the stock of cash in the economy.
The reason we don't have high inflation at the moment is that money is changing hands more slowly during the recession - its "velocity" is dropping, and counteracting the boost in the quantity available to spend.
When the velocity stops dropping, inflation will begin properly. (Food and energy prices may be rising at the moment, but there's other factors at work there. Houses, cars and all sorts of other things are trading at a discount still, for ordinary people. Overall, I think we are still experiencing deflation, partially disguised by increased prices for the things rich people buy because they are benefiting from the collapse of the middle class.)
If velocity increases, inflation will roar. Unless government removes money at just the right rate (by taxation, or higher interest rates) - and it will be reluctant to do so because it won't want to be seen to be "killing the recovery". Ordinary savers will be sacrificed for the sake of apparent health in stock and property markets. But the economy will still not have been fundamentally set right, and sooner or later we will need some reset in the currency. In real terms, in the currency of "stuff", the average Western person will be poorer.
And that is why smart, privileged money is pouring into tangible assets. A small fraction of the population will become the "Sultans of stuff".
UPDATE:
Charles Hugh Smith thinks the deflation is unstoppable. But there will be an end, however far off it now seems. I think spotting the turn and moving out of cash fast will be the test for investors.
John Ward opines, "...there is no such thing as a gradual panic. Those ahead of the panic are openly opting for the last place left offering financial long-term and physical short-term safety: top-end property." Not all of us can afford it. It's the small saver who is being hauled to the stone table.
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Insofar as banks are allowed to get involved brokering the deal, I suppose debt cancellation might deprive them of some of their income stream, but other than inconveniencing a few thousand banking families it wouldn't seem to be a bad scheme. As President Andrew Jackson famously said, "You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! " One longs today for such un-mealy-mouthed leaders.
But this kind of living on debt causes real damage, whether or not it is ultimately extinguished. Because the government is trying to keep things normal in the economy, and spends the borrowed money on salaries and other benefits. This is increasing the stock of cash in the economy.
The reason we don't have high inflation at the moment is that money is changing hands more slowly during the recession - its "velocity" is dropping, and counteracting the boost in the quantity available to spend.
When the velocity stops dropping, inflation will begin properly. (Food and energy prices may be rising at the moment, but there's other factors at work there. Houses, cars and all sorts of other things are trading at a discount still, for ordinary people. Overall, I think we are still experiencing deflation, partially disguised by increased prices for the things rich people buy because they are benefiting from the collapse of the middle class.)
If velocity increases, inflation will roar. Unless government removes money at just the right rate (by taxation, or higher interest rates) - and it will be reluctant to do so because it won't want to be seen to be "killing the recovery". Ordinary savers will be sacrificed for the sake of apparent health in stock and property markets. But the economy will still not have been fundamentally set right, and sooner or later we will need some reset in the currency. In real terms, in the currency of "stuff", the average Western person will be poorer.
And that is why smart, privileged money is pouring into tangible assets. A small fraction of the population will become the "Sultans of stuff".
UPDATE:
Charles Hugh Smith thinks the deflation is unstoppable. But there will be an end, however far off it now seems. I think spotting the turn and moving out of cash fast will be the test for investors.
John Ward opines, "...there is no such thing as a gradual panic. Those ahead of the panic are openly opting for the last place left offering financial long-term and physical short-term safety: top-end property." Not all of us can afford it. It's the small saver who is being hauled to the stone table.
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Wednesday, 16 January 2013
Nick Drew: "Green" initiatives have contradictory effects
See our energy expert's latest squib here.
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Wednesday, 9 January 2013
Sunday, 6 January 2013
Max Keiser and George Galloway: a deafening silence in the media
On 20th November, Max Keiser addressed a large audience in the Grand Committee Room in the Houses of Parliament, as the guest of George Galloway MP.
Galloway pointed out that this was the second largest public room in Parliament (the first had already been booked) and all MPs had been invited in writing, twice - yet none of them had turned up.
In some ways this is understandable: Galloway is "colourful" and, to me, something of an enigma, and his fellow Parliamentarians must have considered the risk of tainting by association.
Or worse, reputational entrapment: for although Keiser had strong criticisms to make of Gordon Brown's gold sale (1999 - 2002), which he said is the moment when Britain's independence was surrendered, he also laid the blame for the present crisis on the monetary expansion that began under Reagan and Thatcher. Additionally, he had harsh words to say about George Osborne and David Cameron, whom he sees as fighting for corrupt City interests. In the circumstances, MPs on both sides must have seen little political advantage in attending.
Yet there wasn't that much else on in Parliament on the evening of 20th November. The House of Commons Order of Business after 7 p.m. was a handful of decisions to be made without debate, plus the presentation of a petition and the Adjournment Debate. Granted, many MPs would be heading home for the weekend - but another hour or so, of worthwhile economic instruction, might have done them some good.
And it's surprising that, try as I may, I can find no mainstream media report of Keiser's speech. Remember that he is possibly the most-watched TV journalist in the world, talking on a subject of the utmost importance in the very heart of London. This, perhaps deliberate neglect plays into the growing public cynicism about our political elite and the Fourth Estate.
Regular Keiser-watchers will have heard much of his material before, many times, though it may be news to some that the reason he's shifted his base of operations to London is that he wants a ringside seat to cover what he sees as the coming, full-blown disaster of historic proportions, and expects our poor country to be the epicentre.
He also says that Germany will use its gold hoard and massive Eurobond issuance to establish its advantage over the City; Frankfurt will become the centre of banking and trading in Europe, he feels. Britain, having allowed its financial sector to swell to over 10% of national GDP, has set itself up for a terrible fall.
According to Keiser, only raising interest rates sharply - as Paul Volcker did in the USA (20% by 1981) - can cleanse the speculation and malpractice from the system; and he doesn't see us doing that.
Also interesting in this film, is the naivety of questions, underlining Keiser's (and George Osborne's) observations about the financial illiteracy of the British public.
Like Nigel Farage (another ex-financial trader), Keiser is loud, brash and fast-talking (he starts more sentences than he finishes); and both are also, in my assessment, completely sincere in their concern and indignation.
The film lasts slightly more than an hour, but you can simply listen to it while doing something else, as I did. I think you'll find it worth your while.
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Galloway pointed out that this was the second largest public room in Parliament (the first had already been booked) and all MPs had been invited in writing, twice - yet none of them had turned up.
In some ways this is understandable: Galloway is "colourful" and, to me, something of an enigma, and his fellow Parliamentarians must have considered the risk of tainting by association.
Or worse, reputational entrapment: for although Keiser had strong criticisms to make of Gordon Brown's gold sale (1999 - 2002), which he said is the moment when Britain's independence was surrendered, he also laid the blame for the present crisis on the monetary expansion that began under Reagan and Thatcher. Additionally, he had harsh words to say about George Osborne and David Cameron, whom he sees as fighting for corrupt City interests. In the circumstances, MPs on both sides must have seen little political advantage in attending.
Yet there wasn't that much else on in Parliament on the evening of 20th November. The House of Commons Order of Business after 7 p.m. was a handful of decisions to be made without debate, plus the presentation of a petition and the Adjournment Debate. Granted, many MPs would be heading home for the weekend - but another hour or so, of worthwhile economic instruction, might have done them some good.
And it's surprising that, try as I may, I can find no mainstream media report of Keiser's speech. Remember that he is possibly the most-watched TV journalist in the world, talking on a subject of the utmost importance in the very heart of London. This, perhaps deliberate neglect plays into the growing public cynicism about our political elite and the Fourth Estate.
Regular Keiser-watchers will have heard much of his material before, many times, though it may be news to some that the reason he's shifted his base of operations to London is that he wants a ringside seat to cover what he sees as the coming, full-blown disaster of historic proportions, and expects our poor country to be the epicentre.
He also says that Germany will use its gold hoard and massive Eurobond issuance to establish its advantage over the City; Frankfurt will become the centre of banking and trading in Europe, he feels. Britain, having allowed its financial sector to swell to over 10% of national GDP, has set itself up for a terrible fall.
According to Keiser, only raising interest rates sharply - as Paul Volcker did in the USA (20% by 1981) - can cleanse the speculation and malpractice from the system; and he doesn't see us doing that.
Also interesting in this film, is the naivety of questions, underlining Keiser's (and George Osborne's) observations about the financial illiteracy of the British public.
Like Nigel Farage (another ex-financial trader), Keiser is loud, brash and fast-talking (he starts more sentences than he finishes); and both are also, in my assessment, completely sincere in their concern and indignation.
The film lasts slightly more than an hour, but you can simply listen to it while doing something else, as I did. I think you'll find it worth your while.
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Saturday, 5 January 2013
Looking for a widget!
Help wanted! We thought we'd found a multiple blog widget so you can follow all pages in one simple device, but the one we got can't be installed by readers. Anyone out there know a good one?
Thursday, 3 January 2013
Nick Drew: Solar fad a waste of money
Energy expert and journalist Nick Drew has written a new piece for The Energy Page on cost-effective ways to reduce carbon dioxide emissions. Turns out that the fashion for roof-mounted solar panels is just about the worst possible option - read the full story here.
Nick is a regular contributor to the Capitalists@Work blog.
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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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Wednesday, 2 January 2013
Does the stockmarket correlate with energy usage?
I've suggested recently that not only does modern money fail to act as a store of value, it is failing as a unit of account because of central bank/government interference in its quantity and distribution. It's an elastic ruler and its unreliable measurements are a factor in unsatisfactory decisions (misallocation of resources, as the monetarists say). So we look for alternative ways to assess relative advantage.
One more scientific-seeming (but complex) measure is energy. Professor Charles Hall adapted the notion of energy return on (energy) investment (EROI, or EROEI) from the biological sphere (where he began his studies) to human social-economic systems. This appears to be a promising method for analysing different forms of commercial energy production.
However, the entry linked above goes on to claim a correlation between the stockmarket and energy usage:
... a century's market and energy data shows that whenever the Dow Jones Industrial Average spikes faster than US energy consumption, it crashes: 1929, 1970s, the dot.com bubble, and now with the mortgage collapse.
I'm not so sure, and I've had a look for the evidence. So far, I've come across a study by the US Energy Information Administration of oil futures vs stock and other indices, and over the admittedly fairly short period covered, the correlation with the Dow is not uniformly high, though it has increased since the Credit Crunch:
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
One more scientific-seeming (but complex) measure is energy. Professor Charles Hall adapted the notion of energy return on (energy) investment (EROI, or EROEI) from the biological sphere (where he began his studies) to human social-economic systems. This appears to be a promising method for analysing different forms of commercial energy production.
However, the entry linked above goes on to claim a correlation between the stockmarket and energy usage:
... a century's market and energy data shows that whenever the Dow Jones Industrial Average spikes faster than US energy consumption, it crashes: 1929, 1970s, the dot.com bubble, and now with the mortgage collapse.
I'm not so sure, and I've had a look for the evidence. So far, I've come across a study by the US Energy Information Administration of oil futures vs stock and other indices, and over the admittedly fairly short period covered, the correlation with the Dow is not uniformly high, though it has increased since the Credit Crunch:
Granted, energy usage and energy prices are not necessarily tightly bound together, but does the above tend to disprove or prove the assertion that the Dow cannot long outrun energy use?
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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
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