Ghost Dog's Journal
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Hometown: Canary Islands Archipelago
Home country: Spain
Member since: Wed Apr 19, 2006, 01:59 PM
Number of posts: 13,685
Hometown: Canary Islands Archipelago
Home country: Spain
Member since: Wed Apr 19, 2006, 01:59 PM
Number of posts: 13,685
(Brit gone native).
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Wednesday night may have marked the “emperor’s new clothes” moment of the Great Recession, in which the world suddenly realizes its rulers are suffering from a delusion that doesn’t have to be humored. That delusion today is economic fatalism: the idea that nothing can be done to break the paralysis in the global economy and therefore that a “new normal” of mass unemployment and declining living standards is inevitable for years or decades to come.
That such economic fatalism is nonsensical is the key message of a truly historic speech delivered on Wednesday by Adair Turner, chairman of Britain’s Financial Services Authority and one of the most influential financial policymakers in the world. Turner argues that a virtually surefire method of stimulating economic activity exists today and that politicians and central bankers can no longer treat it as taboo: Newly created money should be handed out to the citizens or governments of countries that are mired in stagnation and such monetary financing of tax cuts or government spending should continue until economic activity revives...
The Adair Turner lecture:
<cut>... Even to mention the possibility of overt monetary finance is however close to breaking a taboo. When some comments of mine last autumn were interpreted as suggesting that OMF should be considered, some press articles argued that this would inevitably lead to hyper inflation. And in the Eurozone, the need utterly to eschew monetary finance of public debt is the absolute core of inherited Bundesbank philosophy.
To print money to finance deficits indeed has the status of a moral sin – a work of the devil – as much as a technical error. In a speech last September, Jens Weidmann, President of the Bundesbank, cited the story of Part 2 of Goethe’s Faust, in which Mephistopheles, agent of the devil, tempts the Emperor to distribute paper money, increasing spending power, writing off state debts, and fuelling an upswing which however “degenerates into inflation, destroying the monetary system” (Weidmann 2012).
And there are certainly good reasons for being very fearful of the potential to create paper or (in modern terms) electronic money. In a post-gold standard world, money is what is accepted as money: it is simply the “fiat”, the creation of the public authority. It can therefore be created in limitless nominal amounts2. But if created in excessive amounts it creates harmful inflation. And it was John Maynard Keynes who rightly argued that “there is no subtler, no surer means of overturning the existing basis of society than to debauch the currency”.
The ability of governments to create money is a potential poison and we rightly seek to limit it within tight disciplines, with independent central banks, self-denying ordinances and clear inflation rate targets. Where these devices are not in place or are not effective, the temptation that Mephistopheles presents can indeed lead to hyper-inflation – the experience of Germany in 1923 or Zimbabwe in recent years. But before you decide from that that we should always exclude the use of money financed deficits, consider the following paradox from the history of economic thought. Milton Friedman is rightly seen as a central figure in the development of free market economics and in the definition of policies required to guard against the dangers of inflation. But Friedman argued in an article in 1948 not only that government deficits should sometimes be financed with fiat money but that they should always be financed in that fashion with, he argued, no useful role for debt finance. Under his proposal, “government expenditures would be financed entirely by tax revenues or the creation of money, that is, the use of non-interest bearing securities” (EXHIBIT 1) (Friedman, 1948). And he believed that such a system of money financed deficits could provide a surer foundation for a low inflation regime than the complex procedures of debt finance and central bank open market operations which had by that time developed.
Friedman was not alone. Henry Simons, one of the founding fathers of the Chicago school of free market economics, argued in his seminal article “Rules and Authorities in Monetary Policy” that the price level should be controlled by “expanding and contracting issues of actual money” and that therefore “the monetary rules should be implemented entirely by and in turn should largely determine fiscal policy” (Simons 1936). Irving Fisher argued exactly the same (Fisher, 1936). And the idea that pure money finance is the ultimate answer to extreme deflationary dangers is a convergence point of economic thought at which there is total agreement between Friedman and Keynes. Friedman described the potential role of “helicopter money” picked up gratis from the ground (Friedman, 1969): Keynes, surprisingly, since he was not usually a puritan, wanted people to at least have to dig up the “old bottles with bank notes” (Keynes, 1936) (EXHIBIT 2). But the prescription was the same. And Ben Bernanke, current Chairman of the Federal Reserve, argued quite explicitly in 2003 that Japan should consider “a tax cut … in effect financed by money creation” (Bernanke, 2003).
When economists of the calibre of Simons, Fisher, Friedman, Keynes and Bernanke have all explicitly argued for a potential role for overt money financed deficits, and done so while believing that the effective control of inflation is central to a well run market economy – we would be unwise to dismiss this policy option out of hand. Rather, we should consider whether there are specific circumstances in which it could play a role and/or needs to play a role, and even if not, whether exploration of the theory of money and of debt helps us better understand the problems we face, problems that may be addressed by other policy tools.
In this lecture I will therefore address both appropriate targets and appropriate tools, and will consider the full range of possible tools. But I will also stress the need for us to integrate issues of financial stability and of macroeconomic policy far more effectively than mainstream economics did ahead of the crisis... <cut>
/(.pdf 48pp)... http://www.fsa.gov.uk/static/pubs/speeches/0206-at.pdf
Posted by Ghost Dog | Thu Feb 14, 2013, 09:44 AM (1 replies)
... (H)anding out newly created money to citizens and governments could solve economic woes globally and would not lead to hyperinflation.
Government-issued money would work because it addresses the problem at its source. Today, we have no permanent money supply. People and governments are drowning in debt because our money comes into existence only as a debt to banks at interest...
... The threat of price inflation is the excuse invariably used for discouraging this sort of "irresponsible" monetary policy today, based on the Milton Friedman dictum that "inflation is everywhere and always a monetary phenomenon." When the quantity of money goes up, says the theory, more money will be chasing fewer goods, driving prices up.
What that theory overlooks is the supply side of the equation. As long as workers are sitting idle and materials are available, increased demand will put workers to work creating more supply. Supply will rise along with demand, and prices will remain stable.
True, today these additional workers might be in China, or they might be robots. But the principle still holds: if we want the increased supply necessary to satisfy the needs of the people and the economy, more money must first be injected into the economy. Demand drives supply. People must have money in their pockets before they can shop, stimulating increased production. Production doesn't need as many human workers as it once did. To get enough money in the economy to drive the needed supply, it might be time to issue a national dividend divided equally among the people...
... With the proviso that not just any kind of supply will do to meet the pent-up demand. New supply must come from economic activity healthy for the environment as well as for humanity.
Posted by Ghost Dog | Thu Feb 14, 2013, 07:15 AM (0 replies)
... The psychologist Carl Jung notes in his observations of collectivism in Nazi Germany and Stalinist Russia that most citizens of those nations did not necessarily want the formation of a tyrannical oligarchy, but, they went along with it anyway because they feared for their own comfort and livelihoods. Many a German supported the Third Reich simply because they did not want to lose a cushy job, or a steady paycheck, or they liked that the “trains ran on time”. Socialism is by far the most selfish movement in history, despite the fact that they claim to do what they do “for the greater good of the greater number”.
Rand (The Rand Corporation) also used Rational Choice Theory as a means to remove questions of principle from the debate over social progress. Rational Choice propaganda commonly presents the target audience with a false conundrum. A perfect example would be the hardcore propaganda based television show ‘24’ starring Kiefer Sutherland, in which a government “anti-terrorism” agent is faced with a controlled choice scenario in nearly every episode. This choice almost always ends with the agent being forced to set aside his morals and conscience to torture, kill, and destroy without mercy, or, allow millions of innocents to die if he does not.
Of course, the real world does not work this way. Life is not a chess game. Avenues to resolution of any crisis are limited only by our imagination and intelligence, not to mention the immense number of choices that could be made to defuse a crisis before it develops. Yet, Rand would like you to believe that we (and those in government) are required to become monstrous in order to survive. That we should be willing to forgo conscience and justice now for the promise of peace and tranquility later.
This is the age old strategy of Centralization; to remove all choices within a system, by force or manipulation, until the masses think they have nothing left but the choices the elites give them. It is the bread and butter of elitist institutions like Rand Corporation, and is at the core of the push for globalization.
In my studies on the developing economic disaster (or economic recovery depending on who you talk to) I have come across a particular methodology many times which set off my analyst alarm (or spidey-sense, if you will). This latest methodology, called “Linchpin Theory”, revolves around the work of John Casti, a Ph.D. from USC, “complexity scientist” and “systems theorist”, a Futurist, and most notably, a former employee of Rand Corporation:
Casti introduces his idea of “Linchpin Theory” in his book “X-Events: The Collapse Of Everything”, and what I found most immediately striking about the idea of “Linchpin Events” was how they offered perfect scapegoat scenarios for catastrophes that are engineered by the establishment.
Linchpin Theory argues that overt social, political, and technological “complexity” is to blame for the most destructive events in modern human history, and it is indeed an enticing suggestion for those who are uneducated and unaware of the behind the scenes mechanics of world events. Casti would like you to believe that political and social tides are unguided and chaotic; that all is random, and disaster is a product of “chance” trigger events that occur at the height of a malfunctioning and over-complicated system.
What he fails to mention, and what he should well know being a member of Rand, is that global events do not evolve in a vacuum. There have always been those groups who see themselves as the “select”, and who aspire to mold the future to their personal vision of Utopia. It has been openly admitted in myriad official observations on historical events that such groups have had a direct hand in the advent of particular conflicts.
For instance, Casti would call the assassination of Archduke Franz Ferdinand of Austria an “X-event”, or linchpin, leading to the outbreak of WWI, when historical fact recalls that particular crisis was carefully constructed with the specific mind to involve the U.S.
Norman Dodd, former director of the Committee to Investigate Tax Exempt Foundations of the U.S. House of Representatives, testified that the Committee was invited to study the minutes of the Carnegie Endowment for International Peace as part of the Committee's investigation. The Committee stated:
"The trustees of the Foundation brought up a single question. If it is desirable to alter the life of an entire people, is there any means more efficient than war.... They discussed this question... for a year and came up with an answer: There are no known means more efficient than war, assuming the objective is altering the life of an entire people. That leads them to a question: How do we involve the United States in a war. This was in 1909."
So, long before the advent of Ferdinand’s assassination, plans were being set in motion by globalist interests to draw the U.S. into a large scale conflict in order to “alter the life, or thinking, of the entire culture”. When a group of people set out to direct thinking and opportunity towards a particular outcome, and the end result is a culmination of that outcome, it is obviously not coincidence, and it is definitely not providence. It can only be called subversive design.
In the economic arena, one might say that the collapse of Lehman Bros. was the “linchpin” that triggered the landslide in the derivatives market which is still going on to this day. However, the derivatives market bubble was a carefully constructed house of cards, deliberately created with the help of multiple agencies and institutions. The private Federal Reserve had to artificially lower interest rates and inject trillions upon trillions into the housing market, the international banks had to invest those trillions into mortgages that they KNEW were toxic and likely never to be repaid. The Federal Government had to allow those mortgages to then be chopped up into derivatives and resold on the open market. The ratings agencies had to examine those derivatives and obviously defunct mortgages and then stamp them AAA. The SEC had to ignore the massive fraud being done in broad daylight while sweeping thousands of formal complaints and whistle blowers under the rug.
This was not some “random” event caused by uncontrolled “complexity”. This was engineered complexity with a devious purpose. The creation of the derivatives collapse was done with foreknowledge, at least by some. Goldman Sachs was caught red handed betting against their OWN derivatives instruments! Meaning they knew exactly what was about to happen in the market they helped build! This is called Conspiracy…
One might attribute Casti’s idea to a sincere belief in chaos, and a lack of insight into the nature of globalism as a brand of religion. However, in his first and as far as I can tell only interview with Coast To Coast Radio, Casti promotes catastrophic “X-Events” as a “good thing” for humanity, right in line with the Rand Corporation ideology. Casti, being a futurist and elitist, sees the ideas of the past as obsolete when confronted with the technological advancements of the modern world, and so, describes X-event moments as a kind of evolutionary “kickstart”, knocking us out of our old and barbaric philosophies of living and forcing us, through trial by fire, to adapt to a more streamlined culture. The linchpin event is, to summarize Casti’s position, a culture’s way of “punishing itself” for settling too comfortably into its own heritage and traditions. In other words, WE will supposedly be to blame for the next great apocalypse, not the elites…
Note: When Americans refer to 'socialism' they always appear to refer to dictatorial forms of political collectivism. Bolshevik rather than Menshevik rather than Anarchist; Fascist rather than either of those...
Modern European and Latin American types of socialism, on the other hand, are not dictatorial. They are not dictatorial to the extent that the (at least five) pillars of democracy are in place and function as they should. See eg. http://www.rand.org/publications/randreview/issues/spring2004/pillars.html
- edit: (sorry, that last link was meant to be http://india.5thpillar.org/home.html - but do look at the above).
Posted by Ghost Dog | Tue Feb 5, 2013, 10:57 AM (1 replies)
(Bloomberg) Federal Reserve Chairman Ben S. Bernanke’s unprecedented bond buying pushed the Fed’s balance sheet to a record $3 trillion as he shows no sign of softening his effort to bring down 7.8 percent unemployment.
The Fed is purchasing $85 billion of securities every month, using the full force of its balance sheet to stoke the economic recovery. The central bank began $40 billion in monthly purchases of mortgage-backed securities in September and added $45 billion in Treasury securities to that pace this month.
“We’re in uncharted territory,” said Julia Coronado, chief economist for North America at BNP Paribas SA in New York, and a former Fed economist. Even as “the easy money will flow through financial markets and into the real economy at some point and lift us to a better growth trajectory,” the U.S. faces “a lot of risks,” she said.
The Fed’s total assets climbed by $48 billion in the past week to $3.01 trillion as of Jan. 23, according to a release from the central bank yesterday in Washington. The announcement came as the Standard & Poor’s 500 Index closed at the highest level since December 2007...
Bank of America issues `bond crash' alert on Fed tightening fears
The US lender said investors face a treacherous moment as central banks start fretting about inflation and shift gears, threatening a surge in bond yields.
This happened in 1994 under Federal Reserve chief Alan Greenspan when yields on US 30-year Treasuries jumped 240 basis points over a nine-month span, setting off a “savage reversal of fortune in leveraged areas of fixed income markets”...
...Most emerging markets now raise debt in their own currency but the effect of a worldwide tightening cycle could expose a host of problems. “Frontier markets are attracting tremoundous capital inflows and this new carry trade could reverse quite violently. The risk of local bubbles bursting is high,” said Mr Hartnett.
Bank of America said the “Great Rotation” under way from bonds into equities closely tracks the pattern of 1994, with bank stocks leading the way.
Over the past seven years US investors have pulled $600bn from US equity funds and poured $800bn instead into bond funds. This process is going into reverse. Equity funds have drawn $35bn over the last 13 trading days alone, creating the risk of an unstable “melt-up” in stocks over coming months...
Posted by Ghost Dog | Fri Jan 25, 2013, 07:29 AM (4 replies)
January 24, 2013
The renewable energy revolution is under way. Renewable power generation now accounts for around 50% of all new power generation capacity installed worldwide.
The combination of rapid deployment and high learning rates for technology “has produced a virtuous circle that is leading to significant cost declines and is helping fuel a renewable revolution,” according to a new global study of renewable power generation costs in 2012 produced by IRENA, the International Renewable Energy Agency, which announced it is establishing its global headquarters in the United Arab Emirates during last week’s Abu Dhabi Sustainability Week.
Additions to global wind power generation capacity totalled 41 gigawatts (GW) in 2011, according to IRENA’s “Renewable Power Generation Costs in 2012: An Overview.” That’s in addition to 30 GW of new solar photovoltaic (PV) electricity generation capacity, 25 GW of hydro power, 6 GW of biomass, 0.5 GW of concentrated solar power (CSP), and 0.1 GW of new geothermal power capacity.
“Renewable technologies are now the most economic solution for new capacity in an increasing number of countries and regions,” IRENA concluded upon analyzing the levelized cost of electricity (LCOE) among the some 8,000 renewable power projects in its database and related literature...
Clean Technica (http://s.tt/1ySx9)
Read more at http://cleantechnica.com/2013/01/24/renewable-energy-revolution-declining-costs-surging-capacity/#hKAKybxAEug8XQdS.99
“Renewable Power Generation Costs in 2012: An Overview.” (.pdf) : http://www.irena.org/DocumentDownloads/Publications/Renewable%20Generation%20Costs%202012.pdf
Posted by Ghost Dog | Thu Jan 24, 2013, 10:20 AM (28 replies)
Here, there and everywhere: After decades of sending work across the world, companies are rethinking their offshoring strategies, says Tamzin Booth
Jan 19th 2013 | From the print edition: Special report http://www.economist.com/printedition/2013-01-19
... The original idea behind offshoring was that Western firms with high labour costs could make huge savings by sending work to countries where wages were much lower (see article). Offshoring means moving work and jobs outside the country where a company is based. It can also involve outsourcing, which means sending work to outside contractors. These can be either in the home country or abroad, but in offshoring they are based overseas. For several decades that strategy worked, often brilliantly. But now companies are rethinking their global footprints.
The first and most important reason is that the global labour “arbitrage” that sent companies rushing overseas is running out. Wages in China and India have been going up by 10-20% a year for the past decade, whereas manufacturing pay in America and Europe has barely budged... Second, many American firms now realise that they went too far in sending work abroad and need to bring some of it home again, a process inelegantly termed “reshoring”... Choosing the right location for producing a good or a service is an inexact science, and many companies got it wrong. Michael Porter, Harvard Business School’s guru on competitive strategy, says that just as companies pursued many unpromising mergers and acquisitions until painful experience brought greater discipline to the field, a lot of chief executives offshored too quickly and too much. In Europe there was never as much enthusiasm for offshoring as in America in the first place, and the small number of companies that did it are in no rush to return...
... Third, firms are rapidly moving away from the model of manufacturing everything in one low-cost place to supply the rest of the world. China is no longer seen as a cheap manufacturing base but as a huge new market. Increasingly, the main reason for multinationals to move production is to be close to customers in big new markets. This is not offshoring in the sense the word has been used for the past three decades; instead, it is being “onshore” in new places... Companies now want to be in, or close to, each of their biggest markets, making customised products and responding quickly to changing local demand...
...Under this logic, America and Europe, with their big domestic markets, should be able to attract plenty of new investment as companies look for a bigger local presence in places around the world. It is not just Western firms bringing some of their production home; there is also a wave of emerging-market champions such as Lenovo, or the Tata Group, which is making Range Rover cars near Liverpool, that are coming to invest in brands, capacity and workers in the West... As in manufacturing, the labour-cost arbitrage in services is rapidly eroding, leaving firms with all the drawbacks of distance and ever fewer cost savings to make up for them. There has been widespread disappointment with outsourcing information technology and the routine back-office tasks that used to be done in-house. Some activities that used to be considered peripheral to a company’s profits, such as data management, are now seen as essential, so they are less likely to be entrusted to a third-party supplier thousands of miles away...
... That offers a huge opportunity for rich countries and their workers to win back some of the industries and activities they have lost over the past few decades. Paradoxically, the narrowing wage gap increases the pressure on politicians. With labour-cost differentials narrowing rapidly, it is no longer possible to point at rock-bottom wages in emerging markets as the reason why the rich world is losing out. Developed countries will have to compete hard on factors beyond labour costs. The most important of these are world-class skills and training, along with flexibility and motivation of workers, extensive clusters of suppliers and sensible regulation...
Posted by Ghost Dog | Thu Jan 24, 2013, 09:23 AM (0 replies)
Posted by Ghost Dog | Thu Jan 17, 2013, 10:25 AM (1 replies)
... The A380’s size means its fuselage and wing sections are shipped via a surface transportation network that includes specially-commissioned roll-on roll-off ships to carry these sections from production sites in France, Germany, Spain and the United Kingdom to the French city of Bordeaux. From there, sections are transported by barge along the Garonne River to the Toulouse final assembly line.
As for other Airbus aircraft programmes, production of the A380 takes place in different sites across Europe. Each site produces completely equipped sections, which are transported to final assembly .
Most A380 sections are transported to Toulouse by sea, river and road. A number of smaller components, such as the vertical fin produced in Stade or the nose section produced in Meaulte, France, are carried in Airbus’ Beluga fleet... - http://www.airbus.com/company/aircraft-manufacture/how-is-an-aircraft-built/transport-of-major-aircraft-sections/
... Starting in Hamburg-Finkenwerder on the River Elbe, the ship loads the front and rear sections of the fuselage, from where they are shipped to the United Kingdom. The wings, which are manufactured at Filton in Bristol and Broughton, Flintshire in North Wales, are transported by barge to Mostyn docks, where the ship adds them to its cargo. In Saint-Nazaire in western France, the ship trades the fuselage sections from Hamburg for larger, assembled sections, some of which include the nose. The ship unloads in Bordeaux. Afterwards, the ship picks up the belly and tail sections by Construcciones Aeronáuticas SA in Cádiz in southern Spain, and delivers them to Bordeaux. From there, the A380 parts are transported by barge to Langon, and by the oversize road convoys of the Itinéraire à Grand Gabarit from there to the assembly hall in Toulouse.
After assembly, the aircraft are flown to Hamburg Finkenwerder Airport (XFW) to be furnished and painted... - http://en.wikipedia.org/wiki/Ville_de_Bordeaux
Posted by Ghost Dog | Sat Jan 12, 2013, 06:48 AM (0 replies)
Tinariwen - Live at Womad
Posted by Ghost Dog | Sat Jan 12, 2013, 05:19 AM (2 replies)
Rose windows are particularly characteristic of Gothic architecture and may be seen in all the major Gothic Cathedrals of Northern France. Their origins are much earlier and rose windows may be seen in various forms throughout the Medieval period. Their popularity was revived, with other medieval features, during the Gothic revival of the 19th century so that they are seen in Christian churches all over the world... - http://en.wikipedia.org/wiki/Rose_window
Also this at Chartres: ... The north transept rose (10.5m diameter, made c.1235), like much of the sculpture in the north porch beneath it, is dedicated to the Virgin. The central oculus shows the Virgin and Child and is surrounded by 12 small petal-shaped windows, 4 with doves (the 'Four Gifts of the Spirit'), the rest with adoring angels carrying candlesticks. Beyond this is a ring of 12 diamond-shaped openings containing the Old Testament Kings of Judah, another ring of smaller lozenges containing the arms of France and Castille, and finally a ring of semicircles containing Old Testament Prophets holding scrolls. The presence of the arms of the French king (yellow fleurs-de-lis on a blue background) and of his mother, Blanche of Castile (yellow castles on a red background) are taken as a sign of royal patronage for this window... - http://en.wikipedia.org/wiki/Chartres_Cathedral
Note on origin: ... The German art historian Otto von Simson considered that the origin of the rose window lay in a window with the six-lobed rosettes and octagon which adorned the external wall of the Umayyad palace Khirbat al-Mafjar built in Jordan between 740 and 750 CE. This theory suggests that crusaders brought the design of this attractive window to Europe, introducing it to churches... - http://en.wikipedia.org/wiki/Rose_window
Suggest accompanying music:
See also: http://www.therosewindow.com/pilot/Paris-N-Dame/table.htm
Posted by Ghost Dog | Sat Jan 12, 2013, 04:49 AM (0 replies)