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Category Archives: Business & the Economy

The Beginning of the End?

Can anyone explain how Mankind is going to reduce CO2 levels in the atmosphere (now above 4 parts per million), without which GW will be catastrophic, with an average rise of 6̊C or even more in the worst-case scenario?

Pollticians blather on about renewables, but even as I write, many countries are planning to extract shale oil; Iraq and Iran are racking up oil production; nuclear is being phased out in Germany and elsewhere, while coal burning increases – last year China was opening one new coal-fired power station PER WEK – not sure if this extreaordinary rate has slowed, but India is also vastly increasing emissions….

No economy can stay solvent without growth, but growth is currently impossible without even more emissions.

My conclusion is that it is almost impossible to imagine how bad this could get, economically, socially and in terms of natural disasters.

And in the short-term (which is of most interest to politicians), European industry is going to be decimated. Gas prices in the US are now around three times lower than in Europe. How the hell can high-energy European firms stay competitive? Even German industry is looking down the barrel of a gun.

This is from “The Daily Telegraph”:

“Last week, I spoke to Fatih Birol, chief economist at the International Energy Authority (IEA), who is often described as the world’s leading forecaster in this field. He has been telling anyone in Europe willing to listen that the continent faces a major crisis of competitiveness because of high energy prices. “This year is critical,” he told me. “I don’t see many such junctures in the economic history of Europe in which energy could play such a critical role for the long-term prosperity of the European people.”

The problems are these. Europe’s high subsidies for renewables to meet climate change targets, coupled with the switch to gas, which is expensive to import, are damaging energy-intensive manufacturers, who between them employ some 30 million people. Nuclear power has either been blocked, as in Germany, or delayed, as in the UK, and the take-up of shale has been painfully slow. In America, by contrast, the shale revolution has seen energy prices tumble, making industry more profitable and putting extra money into the pockets of consumers – so far, $1,300 a year for every American, expected to rise to $4,000 by 2015.

The head of one of Europe’s biggest energy companies told a conference I attended recently that the EU’s energy policy was a “total mess”. He added: “Not only are we unable to attract investment to create new jobs, but we risk losing them as well.”

My advice? Plant potatoes, prepare sandbags, get a gun – and pray.

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O’Blather & the Debt Ceiling

Obama

When I first read the speech below, I thought it was a joke. How could a serious politician say this and yet once in power 5 years later have the exact opposite view? But this is politics.  We have come to expect politicians to say anything they feel in in their short-term interests and/or based on party dogma – opposing anything the opposition does as a matter of course, no matter how appropriate it might be.

Take Francois Hollande: BEFORE the presidential election in 2012 he castigated Sarkozy for imüosing “austerity”, yet the day after his election he continued with exactly the same policy, only MORE so, with over 70 new or increased taxes.

As it happens, I think Obama was right in 2006 and utterly, moronically wrong ever since his election to the Presidency, but the sheer contrast between then and now makes it – for me – imperative that we do not forget this 2006 speech, which I copy below. I can’t see any way out of the shambles this current generation of politicians has got us into until we get better leadership. Look at what we have!

Obama, Cameron, Hollande, Putin – and several others, not all as bad no doubt, but that is enough to be going on with. How can one tke any of them seriously, or indeed have any hope for long-term solutions?

March 16, 2006 CONGRESSIONAL RECORD—SENATE S2237-2238:

“Mr. President, I rise today to talk about America’s debt problem. The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Over the past 5 years, our federal debt has increased by $3.5 trillion to
$8.6 trillion. That is ‘‘trillion’’ with a ‘‘T.’’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities. Instead, interest payments are a significant tax on all Americans—a debt tax that Washington doesn’t want to talk about. If Washington were serious about honest tax relief in this country, we would see an effort to reduce our national debt by returning to responsible fiscal policies.

But we are not doing that. Despite repeated efforts by Senators CONRAD and FEINGOLD, the Senate continues to reject a return to the commonsense Pay-go rules that used to apply. Previously, Pay-go rules applied both to increases in mandatory spending and
to tax cuts. The Senate had to abide by the commonsense budgeting principle of balancing expenses and revenues. Unfortunately, the principle was abandoned, and now the demands of budget discipline apply only to spending.

As a result, tax breaks have not been paid for by reductions in Federal spending, and thus the only way to pay for them has been to increase our deficit to historically high levels and borrow more and more money. Now we have to pay for those tax breaks plus
the cost of borrowing for them. Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next 5 years.

That is why I will once again cosponsor the Pay-go amendment and continue to hope that my colleagues will return to a smart rule that has worked in the past and can work again.

Our debt also matters internationally. My friend, the ranking member of the Senate Budget Committee, likes to remind us that it took 42 Presidents 224 years to run up only $1 trillion of foreign-held debt. This administration did more than that in just 5 years. Now, there is nothing wrong with borrowing from foreign countries. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours.

Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘‘the buck stops here.’’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

I therefore intend to oppose the effort to increase America’s debt limit.”

In April 2011, Obama said this about his 2006 speech:

“I think that it’s important to understand the vantage point of a senator versus the vantage point of a president. When you’re a senator, traditionally what’s happened is, this is always a lousy vote. Nobody likes to be tagged as having increased the debt limit — for the United States by a trillion dollars. As president, you start realizing, you know what, we, we can’t play around with this stuff. This is the full faith and credit of the United States. And so that was just an example of a new senator making what is a political vote as opposed to doing what was important for the country. And I’m the first one to acknowledge it.”

Yes, Mr President, but the people elect politicians to speak the TRUTH, irrespective of whatever “vantage point” they have. Otherwise we think you’ll say anything that seems to you expedient for your own personal advantage at the time.

Read more at http://www.snopes.com/politics/obama/debtlimit.asp

SOME SOBERING FACTS:

HAVE A GOOD DAY …...

 
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Posted by on February 4, 2014 in Business & the Economy, Politics, USA

 

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Inside a Modern Electric-Car Plant

Great video of the Tesla Electric-Car Plant

(click image for company website)carmaking2

 
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Posted by on February 3, 2014 in Business & the Economy

 

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Whither Russia?

Ambrose Evans-Pritchard thinks that falling oil-price will pose big problems for Putin.

I on the other hand, would not put anything past him. An economic crisis could encourage him to stoke up nationalistic fervour even more and invade the Ukraine (“to support the government”) and Central Asia (“to combat terrorism”) and in doing so to restore his beloved Empire of the USSR.

Anyone who underestimates the potential evil of Putin is – frankly – an idiot. Astonishing that so many people seem to have some respect for an ex KGB officer, part of the same security apparatus that murdered 16,000 Poles in Katyn Forest under a totalitarian regime that Putin has said he regrets the demise of – AND a man leading his country when its security services almost certainly murdered one of its enemies on the streets of London. (remember what happened to Trotsky?)

Putin is also a strong supporter of the mass-murdering Assad, who not only recently gassed several thousand people a la Saddam Hussein but for whom there is also strong evidence that his regime has tortured and murdered in cold blood multiple thousands of his enemies.

Putin as an extremely nasty human being. His country is one of the most corrupt in the world outside Africa. His democracy is a sham. The police, media and judiciary in Russia are almost completely under his control.

This hysterical anti-Americanism is just surreal. Nobody’s perfect, but the following are free thanks to the USA in particular: the whole of Europe, most of Asia, Kosovo, Iraq, Libya and no doubt others I have forgotten. The countries the USA failed to liberate include the dictatorships of North Korea, China and Cuba.

The countries occupied by Putin’s beloved USSR suffered decades of oppression, poverty and misery while those occupied by the USA have become rich and powerful (Japan and Germany in particular). If you are so thick that you can’t grasp all this, just compare North and South Korea.

Only a total moron – or a would-be totalitarian fascist – could possibly prefer Putin to the USA.

 
 

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Surrealism is Alive and Well in France

Another very excellent article from Roger Bootle in “The Daily Telegraph” today.

On the face of it, he announced at last a seismic change of direction which involves reducing these three apparent evils:

– the size of the state
– taxation
– the cost and complexity of employing anyone and therefore
– unemployment

WONDERFUL! one might say. Hollande – the archetypal socialist – at LAST comes out with a programme worthy of Mrs Thatcher. And yet ………. an experienced France-watcher is forced to repeat the time-honoured phrase. “Zee proof eez in zee pudding.” WHERE will he find the FIFTY BILLION EUROS of cuts in government spending? Most of this is wrapped up in state employment, so how many of his own supporters is he going to make redundant? Which bits of the French state apparatus is he going to amputate and toss into the furnace of history? On this, there is a deafening silence.

Sadly, as in the UK, there are plenty of morons in France who think that economic problems are always someone else’s fault, in particular, “the rich” – hence the 75% tax rate which has inspired thousands of well-off French people to flee their country, often for the economic freedom of London, which now has a population of 400,000 French.

Back in France, the lunacy of all this will take some time to sink in, but once all the rich have all left or been taxed out of existence, then just the poor and poorer will remain, only even poorer and poorer. At that point the French mob will revolt and guillotine those responsible – and if they can’t find those responsible (their having escaped to Switzerland) they will guillotine someone else.

This is called “socialisme a la francaise”. It is a system that has its admirers, principally Ed “My Dad was a Marxist and I’m proud of it” Milliband.

Francois Hollande is truly amazing, quite apart from the fact that marriage is apparently too “bourgeois” for him to indulge in it himself. His country is in a death spiral and so he announces – after a delay of 18 months while he was thinking about it – reforms worthy of Thatcher – and indeed those arch-socialist role-models Francois Mitterrand and Gerhard Schröder. However, the evil, loathsome, capitalist sector (which just happens by pure coincidence to be the wealth-creating bit of society) is supposed to create loads of jobs NOW, and yet the govt side of the “responsibility pact” won’t deliver cuts to employers until 2017. (Thanks for this bit of data, Roger Bootle). When the employers can’t employ any more people as they are too busy with the paperwork involved in going bankrupt, they will naturally be labelled “irresponsible”.

This really is “Alice in Wonderland” stuff. It is of course, perfectly logical for French socialists, since the problems are all the fault of employers for not employing enough people. There is a certain logic in this:

  • Not enough jobs?
  • Simples – employers are not employing enough people.
  • ERGO -> it’s employers’ fault.

We’ve seen this sort of logic before in the 35 hour week, which went something like this:

  • There are too many unemployed.
  • We will make those employed work less so that
  • Employers will have to employ more people to do the work required.

This hilariously-surreal reasoning is based on the theory that there is an immutable x amount of work to be done, which should therefore be shared out by all those capable of working.

Surprisingly for the highly-diplomaed ENA graduates of the political elite, this cunning plan did not actually reduce employment much at all. This was of course hardly surprising to everyone else, since it was a plan so cunning that Baldrick himself would have rejected it as insane. Still, rather than admit they were wrong, the French elite pressed on with it with gritted teeth and determination; even Sarkozy could not bring himself to abolish it at a stroke, which would have been the sane thing to do.

“It hasn’t had long enough to work its way through the economy,” said my French friends.

However, as I pointed out to them at the time, we dastardly Anglo-Saxons would look at this from another logical viewpoint:

  • Forcing people to work fewer hour creates more jobs (according to you)
  • The number of hours people are allowed to work is clearly in inverse proportion to the jobs that will be created.
  • We therefore propose legally limiting the number of hours people can work to ONE per week.
  • This will obviously create absolutely teeming millions of jobs.

My friends looked at me sadly and smiled: “British humour ….”

I was in fact serious – a dose of Reduction ad Absurdum being sometimes required to make a point – but they just didn’t get it – and still don’t. I was as it happens working in France when all this lunacy was put in place, and I remember very well listening to someone from the local Chamber of Commerce coming to explain it to our workforce of 6 people. We sat there for an hour until my head was spinning with numbers of hours worked, holidays taken off and/or added, cumulative minutes here and there, what happened about “overtime” and so on, until I could take it no more and asked:

“Yes, but how does this actually affect ME in practical terms.”

Whereupon this bod said. Ah, this doesn’t affect YOU at all since you are a  ‘cadre’, (executive) and they   have a completely different status.” (Everyone MUST have a “status” in France.)

“Well, what am I doing here, then? I do actually have work to do …..” I riposted.

“But you do need to know how the new law works,” was the reply.

Naturally, I wanted to ask WHY I needed to know I (I had absolutely nothing whatsoever to do with employing or paying anyone myself) but decided that life was too short and rapidly getting shorter, and so I excused myself and left.

So, from then on the French worked fewer hours but – as far as I remember – without losing any money (THAT would not have gone down well, even with the faithful socialist sheeple), while the rest of the world – and the ant-like labouring Asians in particular – looked on in astonishment and with no little hilarity. “Have the French discovered the equivalent of perpetual motion in employment practice?” was the cry that rang out all around the world.

Well, unfortunately, “No, they hadn’t.”, though it made the new law’s inventors quite famous for a while, except that fame in these matters does have a habit of mutating into notoriety in the face of reality: Russian communism being just another example.

This was all about ten years ago, but nothing much has changed in French logic. Plus ca change, plus c’est la meme chose.” Still, once the French political elite has reduced France to an economic wasteland, it will be so cheap to go there on holiday that millions will pour in from booming Anglo-Saxonia, Scandinavia, Asia and elsewhere to boost the economy, while at least there is the lush farmland to ensure nobody starves, even if half the French population will have to return there to find anything useful to do at all.

Eventually, we will have reached the Socialist Nirvana of 100% taxation and 0% tax revenue – or maybe Hollande will work a miracle?

VIVE LA FRANCE!

 

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THE IMF PRATTLES ON ….

The IMF is pontificating again. Apparently debt is now so bad that governments are going to have to develop sophisticated “instruments” to – in effect – inflate away, confiscate and/or force us to spend our money. (See Cyprus – “haircut” history)

“The (IMF) paper says the Western debt burden is now so big that rich states will need same tonic of debt haircuts, higher inflation and financial repression – defined as an “opaque tax on savers” – as used in countless IMF rescues for emerging markets.”

I like the reference to “rich countries”. Can a country which is vastly indebted still be considered as “rich”? Am I supposed to consider as rich my mate down the road who has vast debt and yet STILL continually spends way more than his income just because his house is stuffed full with electronic gadgets and he somehow manages to run a posh car?

In layman’s terms, this all seems to amount to a “savings tax” – the confiscation of money legally and frugally acquired but not spent. Please correct me if I am wrong. This must surely be the ultimate in Big Brother lunacy. We ALREADY pay LOTS of tax on what we earn and then we are to be taxed again if we choose to be frugal and careful and save some of what’s left. This really IS in the category of “You could not make it up.” What’s next; a 100% tax and the government spending it FOR us?

And all this financial chaos is NOT OUR FAULT; government over-spending is to blame. The PLEBS did not rack up this insane debt; GOVERNMENTS did. The concept of “living within one’s means” just does not seem to enter into it.

None of these people that we elect have the guts to say to their people: “Sorry, we can’t afford that.” Instead, they spend vast sums they do not have to effectively BRIBE voters with their own money to vote for them. I say “their own money”, but most of it is of course BORROWED.

Yup, the current situation is caused by GOVERNMENTS: people we ELECT and PAY to LEAD US. But I did not ask Gordon Brown to rack up vast debt; I did not ask the Coalition to CONTINUE to INCREASE debt. I elected them to do what is necessary to reduce it, because – bleedin’ obviously – too much debt is very BAD. I know that; all my mates down the pub know that; my 90-year-old Gran knows that, but Europe’s  politicians apparently do NOT.  Or if they do, they do not CARE. In extreme cases, having got their own countries into extreme debt (France) they want some OTHER country (Germany) to bail them out.

I have a theory that Homo Sapiens is basically unhinged when it comes to collective actions affecting the long-term. Can someone convince me it’s not true?

However, it is important to try to read between the lines. All this twaddle (beautifully wrapped up in posh economists’ psychobabble) is from the IMF, an organisation run by French political-crony Christine Lagarde. Having totally failed as French Finance Minister to put a brake on her own country’s lunatic spending she was put in charge of the IMF to tell other people how it should be done.  You might think this to be worth yet ANOTHER “You could not make it up” award. And of course, her secret agenda is to find a way to bail out France so it can continue with its “French model” of high state spending, taxes and general interference and insane regulation. That’s what this is about ……

So, I have seen through your little game, Ms Lagarde ….. and stealing our savings will NOT help you to the French Presidency …… your plebs are going to have something to say about that. Please do something useful: retire and go and plant potatoes and trees: the former to feed us and the latter to save us from Global Warming.

OH, some of the debt crisis might be eased if you would pay tax on your OWN vast salary ……..

 

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More on Banks, Investment & China

Blogger A): “Anyone who insures Chinese debt now is a frickin moron.”

Blogger B): “…which means all the major banks are morons because they all trade CDS like they were hotcakes..we are going to get whacked again by these dangerous loonies who learnt nowt from 2008.”

C) ME!: They may not be morons, since they must KNOW what is going on, but the point is that they DON’T CARE. A) They are making lots of money NOW and B) if it all goes pear-shaped most are “too big to fail” and C) they will pass on any costs to customers anyway.

Unfotunately, there was no cleaning of the Augean banking stables so filthy that Hercules (was it he – I often get my Gods mixed up?) would have had a fit if asked to clean them up.

“… these dangerous loonies who learnt nowt from 2008”.

By “loonies” I take it you are referring to the banks, but I would prefer your statement to be linked to GOVERNMENTS. After all,  governments are supposed to govern for the PEOPLE – not the banks.

The bottom line is that five years after the biggest crisis since the Great Depression NOTHING substantial of long-term effectiveness seems to have been done and we seem to be facing another crisis in the near future.

I personally have concluded that banks are too much like WOMDs to be private, even though public ownership is usually incompetent.

 
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Posted by on December 14, 2013 in Business & the Economy, Politics

 

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