ashvin

Jun 182012
 
 June 18, 2012  Posted by at 4:15 pm Earth Comments Off on The Orkin Man: Which Side Are You On?

thesetrees

We're gonna get a bit controversial on the TAE blog today. I know for a fact that some people will be very offended by this posting, written/compiled by Surly of the Doomstead Diner. Therefore, I'd like preface it with a disclaimer, so to speak. I am going to introduce the issues involved here and give you a few of my thoughts on why they are so important to be considered at this point in time.

The long and short of it is that the posting encompasses an ongoing (never-ending) debate between RE, Surly, I and countless others on various forums, including TAE and the Doomstead Diner, about the wisdom of launching a modern day Inquisition, or what I call the Orkin Man Master Plan ("OMMP") – a plan designed to systemically root out very high-level officials of our corporatist financial system across the globe, and ultimately exterminate them. Everyone agrees that the plan will invariably involve a significant number of innocent "casualties of war" along the way.

First of all, RE wants to make clear that this is just his personal view – one that he feels compelled to defend against critique – and is by no means a reflection of the majority view at the Diner or something that dominates the conversation over there. So let's just take this for exactly what it is – a comprehensive debate over the merits and the wisdom of the OMMP – nothing more, nothing less.

RE argues that such a plan is humanity's last best chance to take the offensive against these wicked forces and destroy them before they destroy us, and it is ultimately a Utilitarian issue of sacrificing a certain % of innocent lives to save an even greater %. Surly disagrees. Some of you may have also read the lengthy exchange between RE and I on this issue, and therefore you know that I whole-heartedly disagree with RE as well.

Surly and I both agree that, in the last instance, it comes down to a question of morality and personal values. Although, there is also plenty of room to debate the nitty-gritty details of this particular OMMP and how it will WORK or NOT WORK, as the case may be. Some of you may be wondering – why even give any credence or exposure to RE's view by acknowledging it in a posting here?

The truth is that most of us are eventually going to have to confront these issues in our lifetimes, and there's no sense in hiding from them now or pretending they don't exist. People are out there making similar arguments to RE as I write this today, and they are only going to make them even louder tomorrow, as societal conditions worsen. And they are dead serious…

Seeing as how the Golden Dawn (neo-Nazi) party has gained a good deal of popularity in Greece in its most recent national elections (GD obtained its first presence in the House of Parliament), this issue of radically reactionary policy is nothing if not very relevant to the process of financial, economic and sociopolitical collapse. It is exactly the type of blowback against "the system" that TAE has been warning about for some time.

Many of the people advocating for some form of OMMP, like RE, truly believe that such a path is our best chance to save the human species and the planet from total annihilation at the hands of minority elites, and have justice meted out to those deserving of it in the process. And some of them, like RE, also happen to be damn convincing with their arguments.

My personal participation in this whole whopper of a debate boils down to my belief that it is INCUMBENT on us to be prepared with a response to calls for blood, and to defend our commitments to avoiding such an outcome – whether those commitments are based in ethical, moral and/or practical concerns. If we are not prepared, then we have already lost the argument before it has even started.

Once the calls for retribution start sounding off in earnest, the momentum will be near impossible to stop. That is why I am posting this here and hoping that TAE readers share my concerns on the one hand, but also come to this issue with tolerance and objectivity on the other. If you are already offended just by reading this Intro to the article, then I strongly advise that you skip the rest of the posting altogether… because, trust me when I say, there is a lot more material for you to stomach below.

Now, with all that out of the way, what follows is Surly's article on the OMMP debate, which really does a great job of tying many different strains of thought together in a succinct and coherent manner. The centerpiece is Surly's very insightful look at the life and times of Pol Pot and his Khmer Rouge in Cambodia.

This exposition on Pol Pot is immediately followed by RE's response (separated by lines within the text), which has been excerpted from a more fully-formed response to both Surly and I that can be found on DD – Unforgiven. Surly's concluding thoughts on OMMP continue below the fold, where he ultimately tells us to reflect on the priceless question that must be answered by ALL of us at the end of the day – do you TRULY know which side you are on?

 


The Orkin Man: Which Side Are You On?

 

 

The Orkin man is one of RE's favorite memes, often invoked as a symbol of retribution by the meek against the great. When we watch gangsters confiscate houses with impunity and murder by proxy and a pen (see the story of Norman Rousseau), run the economy into a ditch, commandeered great bonuses and be subject to none of the usual proceedings of justice, it is easy to despair and to look for revenge. This overwritten screed is a meditation upon what has become a thought-provoking thread rife with implications, a thought experiment which, if followed through the course of its own ineluctable logic, obliges each of us to measure where we would fall, and what we would do, in the event TSHTF.

 

 

What has actually happened here in this country on these rare occasions when people have stood up en masse to Fight the Power? In a previous lifetime, I investigated and created a documentary about the Battle at Blair Mountain. You will likely not have heard of this, the teaching of labor history having apparently been classified as a Class I misdemeanor here in the FSA. In the largest uprising in the United States outside of the Civil War, in 1921, thousands of miners waged armed warfare in Logan County, West Virginia against mine owners, sheriff Don Chafin, and federal troops, in an effort to unionize the mines.

In Mingo, Logan and McDowell counties, miners worked under incredibly bad conditions, were paid next to nothing, had no freedom of speech or assembly, and were dispatched with impunity by mine guards and local politicos in an atmosphere reminiscent of a third-world dictatorship, or contemporary South Carolina. In 1921, thousands of miners and families were evicted from their tents after having the temerity to join a union. The Miners' March, as it was called, was set to change all that. The military was engaged, as always, to Protect Property Rights, those most sacred and revered of all rights extended by the Hand of God to the white, male property owners who created the FSA. The miners' intention was to march to the southwestern coalfields and free fellow miners from abominable treatment at the hands or mine owners.

The miners were opposed by a well-armed contingent of mine guards and State Police with rifles and machine guns. These would eventually be joined by 2,000 regular Army troops armed with airplanes, bombs, and poison gas. The two forces met at Blair Mountain, in Logan County, along the ridge line.

This was the Battle of Blair Mountain.

The battle marked the first time U.S. troops were ordered to bomb civilians. Federal troops squared off against citizen miners, many themselves veterans hardened from recent service in WW I.

The union leader Bill Blizzard eventually surrendered his army in order to avoid further civilian casualties. Blizzard was acquitted in court of insurrection. Future UMW & CIO leader John L. Lewis fought alongside Blizzard at the Battle of Blair Mountain and succeeded in getting recognition for the union 14 years later in southern West Virginia.

One of the songs that sprung up in the wake of these labor troubles with the song "Which side are you on?" It was written by Florence Reece, the wife a union organizer for the UMW in Harlan County, Kentucky, when the miners of that region were locked in a bitter and violent struggle with the mine owners called the Harlan County War. In an attempt to intimidate the Reece family, the local sheriff illegally entered their family home in search of Sam Reece. Sam had been warned in advance and escaped, but Florence and their children were terrorized in his place. That night, after the men had gone, Florence wrote the lyrics to "Which Side Are You On?" on a calendar that hung in the kitchen of her home. She took the melody from a traditional Baptist hymn, "Lay the Lily Low".

 

 

A Song by Florence Patton Reece

 

Come all of you good workers

Good news to you I'll tell

Of how that good old union

Has come in here to dwell

 

Chorus:

Which side are you on?

Which side are you on?

Which side are you on?

Which side are you on?

 

My daddy was a miner

And I'm a miner's son

And I'll stick with the union

Till every battle's won

 

They say in Harlan County

There are no neutrals there

You'll either be a union man

Or a thug for J.H. Blair

 

Oh, workers can you stand it?

Oh, tell me how you can

Will you be a lousy scab

Or will you be a man?

 

Don't scab for the bosses

Don't listen to their lies

Us poor folks haven't got a chance

Unless we organize

So the miners organized together to Fight the Power, to take the law into their own hands because the law was an ass. What they got for their trouble was the full response of the state in all of its Majesty and force of arms. Eventually the legal system would catch up. In the fullness of time, union rights would be recognized, at least until after World War II, when the elites mounted their counterrevolution under the banner of "right to work" laws.

In my loathing for the Banksters and their apologists, I take a back seat to nobody. The bailout of 2008, otherwise known as the "banksters coup," was just the cherry on top of the same toxic milkshake served up as economic and social policy over the last 30 years. The insane clown posse that passes for the modern Republican Party has eyeballed the demographic trends, and pasted together an assemblage of what Drfitglass called "the scattered,raving remnants of the Confederacy for one, last glorious bonfire of democracy." Combine the wholesale assault of the remnant of the New Deal in an atmosphere of "industrialized political hatespeech," Fox News, Hate Radio and the Tea Party with its Billionaire backers, and it's easy to succumb to the desire to want to kill something.

Intellectually I hold with Kunstler's "lamppost and 40 feet of sturdy nylon rope" as the due for the "masters of the universe "who have ground down our economy and wrecked the ship of state. But personal morality makes looping the first skein of rope over the lamppost morally fraught. On the other hand, one is left with the spectacle of the pigmen rooting among the remains of the economy and the country, like Wu's pigs disposing of a fresh corpse in HBO's "Deadwood."

 

 

It is this episode that springs to mind as I consider the "Orkin Man Master Plan" (OMMP) as discussed on the forum of the Doomstead Diner.

The Orkin man is a favorite device of RE, the invoking of which I have enjoyed since the same since his days on The Burning Platform blog. The Orkin man is an exterminator who cleanses the dwelling of lice, vermin, termites and all manner of infestations. The analogy is clear. The remedy less so.

One poster on Doomsday Diner posed the question, "Who gets to be the Orkin man?" Indeed. Who gets to be the decider? Being the decider has great costs, which turned on a fundamental moral issue, at a time when our moral and spiritual institutions are in decline, church attendance down, and many people utterly and completely unequipped to weigh moral and ethical questions. And as much as I like to give voice to my inner hunchback, there is that "judge not lest ye be judged" morality imbued by a Catholic education and nun-beatings that inflects one's thoughts, processes and decisions, even decades later.

As I reflected on the more recent exemplars of individuals taking on such a strategy in this country, and after Blair Mountain, my mind skittered to thoughts of Kosovo, Afghanistan, El Salvador, Pinochet's Argentina, and then settled on the best recent example: Pol Pot whose efforts to form a Communist peasant farming society resulted in the deaths of 25 percent of the country's population from starvation, overwork and executions. Those Khmer Rouge wanted to return to the land as well, and also wanted to cleanse the parasites, usurers and useless eaters from the face of Cambodia. A cautionary tale about the work of idealists who want to remake a society by means of "cleansing" the "parasites…"

It took a while for ol' Pol to consolidate power– he needed to throw in with Sihanouk to fight the right wing junta the US had installed, then the US had to leave the 'Nam and Cambodia. But once in power, he began a radical experiment to create an agrarian utopia that would warm the heart of the most doomy doomster. Pol Pot had seen Mao's Cultural Revolution first-hand during a visit to Communist China, so he figured to go The Great Yellow River Swimmer one better.

Mao's "Great Leap Forward" included forced evacuations of Chinese cities and the purging of "class enemies, " a move that would apparently gain favor among participants in this thread. Pol Pot now stood up his own "Super Duper New and Improved Great Leap Forward" in Cambodia, which in itself was new and improved, hence renamed the Democratic Republic of Kampuchea.

Remember Pol Pot's ringing declaration, "This is Year Zero?" Ah, search your memories. Society was to be "purified." Capitalism, Western culture, city life, religion, and all foreign influences to be extinguished. Intellectuals, bureaucrats and other glasses-wearers were to push wheelbarrows, the better to repent of their pointy-headedness, and to learn the glories of peasant Communism. Foreigners were expelled, embassies closed, foreign economic or medical assistance refused. No use of foreign languages. Newspapers and television stations were shut down, radios and bicycles confiscated, and mail and telephone usage curtailed. Money was forbidden. (That will kick those usurers in the ass.) Businesses were shuttered, religion banned, education halted, health care eliminated, and parental authority revoked. Thus Cambodia was sealed off from the outside world, almost as effectively as if information were controlled by a small handful of media companies.

Something about that live-or-die thingy tends to bring out the excesses in our revolutionary heroes. I'll put that in my "Robespierre was overworked and misunderstood" file.

Can't make an omelet without breaking a few eggs. All of Cambodia's cities were forcibly evacuated. At Phnom Penh, two million inhabitants were evacuated on foot into the countryside at gunpoint. As many as 20,000 died along the way. Can't let that stop a man with a purpose.

Millions of Cambodians accustomed to city life were now forced into slave labor in Pol Pot's "killing fields" where they soon began dying from overwork, malnutrition and disease, on a diet of one tin of rice (180 grams) per person every two days, the better to become compost and improve the yields.

 

 

Workdays ran to the 18 hour day, Pol having taken the American South's "right to work" euphemism to heart. The starving were forbidden to eat the fruits and rice they were harvesting, as that was confiscated by the Khmer rouge and loaded onto their own trucks.

And you can't have a party without the purges… a veritable binge of purges. Up against the wall went the remnants of the "old society" – the educated, the wealthy, Buddhist monks, police, doctors, lawyers, teachers, glasses-wearers all, no doubt. Ex-soldiers were killed along with their wives and children. Eventually the taste for human blood leads to a paranoia of sorts, and why not? Anyone suspected of disloyalty to Pol Pot, including eventually many Khmer Rouge leaders, was shot or bludgeoned with an ax. "What is rotten must be removed," a Khmer Rouge slogan proclaimed.

The casualty count rose until Vietnam launched a full-scale invasion of Cambodia seeking to end Khmer Rouge border attacks. On January 7, 1979, Phnom Penh fell and Pol Pot was deposed, and a Vietnamese puppet government put in.

Pol Pot disappeared into the jungles of Thailand with his Khmer Rouge remnant and waged guerrilla war against a succession of Cambodian governments for decades, eventually sputtering out and dying of an apparent heart attack before he could be dragged to trial before an international tribunal.

 

 

So it matters little who you pick as the Orkin Man, or how good your motives are, or how thorough your efforts at re-education or eradication may be. The role seems to carry some occupational hazards, as if the appetite for blood, human death and destruction carries with it the seeds of insanity.

Although the image of banksters and stockbrokers mucking out pigpens and pushing wheelbarrows through knee-deep mud remains compelling.

(Surly continued below the fold…)

 


 

Unforgiven (RE's response to Surly)

I go through this bizness of the Nasty Dictators all the time with Ashvin over on TAE, and certainly it is not an easy position to take on the Orkin Man Idea when you have such nefarious types as Pol Pot in the Terminix bizness.

I am NOT defending Pol Pot here, because he took on this massively counterproductive attempt at social cleansing with tons of wrong ideas and with tons of corruption involved as well. It also was bound for failure because it was undertaken while the Conduits were still functional.

Taking out the Crystal Ball here and looking into the FUTURE though, let's consider some of the ideas involved in this mess.

 

 

Surly: Mao's "Great Leap Forward" included forced evacuations of Chinese cities and the purging of "class enemies, " a move that would apparently gain favor among participants in this thread. Pol Pot now stood up his own "Super Duper New and Improved Great Leap Forward" in Cambodia, which in itself was new and improved, hence renamed the Democratic Republic of Kampuchea.

On the "Forced Evacuation of Big Shities" question. It wasn't true for sure in Cambodia, but look at the Mass Death that may occur in the Big Shities if they are NOT evacuated before JIT delivery fails. You could have a 99% Death Rate in those places. If Pol Pot II was running the show and forcibly evacuating people NOW, maybe you only get a 50% Death rate. So here PPII goes down in History as the Mass Murderer of say 3B People. Except if PPII had NOT done this, 6B would have gone to the Great Beyond instead.

It's obviously a tough call to make for a Political Leader when to pull the plug on the Big Shities and tell everyone they have to EVACUATE NOW. It will inevitably result in a Massive Death Toll. But if you think it will be WORSE if you don't do it, if you are willing to take the heat as the worst Mass Murderer in all of Recorded History, maybe you do it.

Surly: Millions of Cambodians accustomed to city life were now forced into slave labor in Pol Pot's "killing fields" where they soon began dying from overwork, malnutrition and disease, on a diet of one tin of rice (180 grams) per person every two days, the better to become compost and improve the yields.

OK, here we have mostly agreed that Industrial life is going the way of the Dinosaur and people HAVE to go back to the Land as Farmers at least, if not H-Gs. What is going to happen to Obese J6P when you put him out on the land pushing a plow? Instant Heart Attack! Most people currently used to EZ Living courtesy of the thermodynamic energy of Oil simply are not IN SHAPE to work out in the Fields. Is it PPII's FAULT these folks are too fat and weak to pull their own weight out there?

Surly: And you can't have a party without the purges… a veritable binge of purges. Up against the wall went the remnants of the "old society" – the educated, the wealthy, Buddhist monks, police, doctors, lawyers, teachers, glasses-wearers all, no doubt. Ex-soldiers were killed along with their wives and children. Eventually the taste for human blood leads to a paranoia of sorts, and why not? Anyone suspected of disloyalty to Pol Pot, including eventually many Khmer Rouge leaders, was shot or bludgeoned with an ax. "What is rotten must be removed," a Khmer Rouge slogan proclaimed.

Here of course is the EXCESS which occurs in many an Inquisition/Reign of Terror type scenario. There is going to be a lot of BLOWBACK resultant from many people who have lost their comfortable life and who want to see PPII DEAD because of that. He gets blamed for the problems they have; he gets blamed for their loss of economic status in the society. So PPII gets PARANOID, for good reason. People really ARE out to get him. So he starts Killing Them before they Kill Him.

This of course is the Omellette issue Uncle Joe talked about. Its just about impossible to be a manager of massive Die Off without yourself becoming a Target. Yet if SOMEBODY doesn't get int here and try to manage it, the Die Off is WORSE. Morton's Fork situation of course.

Now, back in Uncle Joe, Mao and Pol Pot's era, if they played along with the Illuminati they likely could have avoided all that dieing. Except these guys wanted to Exit the Game early, and to exit it they essentially were cutting off their Noses to spite their Faces. They lost the ability to Trade with the outside world and were attempting to Go It Alone, and this messed up all their in place systems which sorta worked as long as you paid your Vigorish to the Illuminati.

So all of them go down in History as the most vicious and Genocidal Dictators in all of Recorded History, at least in gross numbers if not in Percentages. I still maintain that the Romanoffs were WORSE than Stalin, but that is not really that important here at the moment.

Moving into the FUTURE here, the issue is you cannot even Save As Many as you Can by PLAYING BALL with the Illuminati. Why? Because said Illuminati are Fresh OUT of Cheap Oil to sell you with Loans they hand out to you. So unfortunately here in this Morton's Fork situation, the social dynamic is likely to produce numerous PPIIs and Great Uncle Joes. Because unless somebody does SOMETHING to try to keep the society organized up, the Dieing will be WORSE than it would be if you have some Dictator FORCING people to evacuate the Big Shities. They aren't going to do that on their own until it is too late and they all are starving and Cannibalizing each other.

Surly: Although the image of banksters and stockbrokers mucking out pigpens and pushing wheelbarrows through knee-deep mud remains a compelling one for me.

You know, I paint all sorts of pictures based on the Spanish Inquisition and the Reign of Terror, but the fact of the matter here is that if you simply took away all their wealth and power and dropped these folks into a Housing project in Chicago and left them their Shoelaces, Silk Neckties and Gucci Belts, they would all Hang THEMSELVES in short order. So if you want to go about it this way to absolve yourself of a sense of Guilt for lopping off their Heads, I am fine with that one also.

Regardless of the means here, whether it is Seppuku or Capital Punishment, the situation is going to create the BLOWBACK from people who once had power, now removed. They will attempt Counter Revolutions and so forth. So you get forced into a battle here no matter what, and people DIE no matter what.

Practical sort of fellow that I am, I work my way through this dynamic to try to find the pathway with the least pain and the greatest survivability for the typical Slave in our society. The means I see working best is to take the battle to the Illuminati before they get the Death Camps rolling in earnest here. You do have to wait for the Failure of the Conduits though, because as long as the Illuminati have the Big Ass Military and Gestapo organized up and functioning, you stand no chance here. Once those Conduits fracture though, the playing field is LEVELLED.

Then you don't just get MAD, you get EVEN.


(Surly continued…)

But point was that any kind of social engineering, social cleansing, ethnic cleansing executed by a political agenda will inevitably collapse, most often due to its own corruption and increasingly escalating paranoia on the part of the strongman or the secret oligarchy of "deciders." There is a reason that we are taught from a very early age, "vengeance is mine saith the Lord, " "Thou shalt not kill," and other Biblical admonishments against the taking of life.

It could be that this ancient wisdom recalls that wielding the tools of vengeance is simply above the pay grade of us mere mortals. On the other hand, psychopaths recognize no such compunction. But the question remains: what do we do, what action should we take at a time when psychopaths have commandeered the engines of government and commerce, economic or rate with complete impunity and beyond the reach of such justice as still remains?

We are thus faced with an untenable situation: if any one of us were to put on the Pol Pot T shirt, we would find ourselves in a similar situation, fraught with awful decisions and tinged by paranoia, regions of the mind visited by Joseph Conrad. Far preferable to remember the biblical injunctions that direct our conduct, as Ashvin observed:

Ashvin: It's not about what we you and I can justify to ourselves with our personal beliefs. It is what you can get OTHER PEOPLE to accept based on their beliefs. Anyone who truly believes in Judeo-Christian theology cannot accept OMMP any more than they can accept Infanticide, even when they are committed with "good intentions" for some Utilitarian goal. According to them, God is perfect and they are imperfect. God has commanded them to avoid certain Sins, and they must have faith in God's wisdom no matter what. It is not up to them to decide what sins are acceptable via good intentions or utilitarian calculations.

Matthew 7:14-27

 

14"For the gate is small and the way is narrow that leads to life, and there are few who find it.

 

15"Beware of the false prophets, who come to you in sheep's clothing, but inwardly are ravenous wolves. 16"You will know them by their fruits. Grapes are not gathered from thorn bushes nor figs from thistles, are they? 17"So every good tree bears good fruit, but the bad tree bears bad fruit. 18"A good tree cannot produce bad fruit, nor can a bad tree produce good fruit. 19"Every tree that does not bear good fruit is cut down and thrown into the fire. 20"So then, you will know them by their fruits.

 

21"Not everyone who says to Me, 'Lord, Lord,' will enter the kingdom of heaven, but he who does the will of My Father who is in heaven will enter. 22"Many will say to Me on that day, 'Lord, Lord, did we not prophesy in Your name, and in Your name cast out demons, and in Your name perform many miracles?' 23"And then I will declare to them, 'I never knew you; DEPART FROM ME, YOU WHO PRACTICE LAWLESSNESS.'

 

24"Therefore everyone who hears these words of Mine and acts on them, may be compared to a wise man who built his house on the rock. 25"And the rain fell, and the floods came, and the winds blew and slammed against that house; and yet it did not fall, for it had been founded on the rock. 26"Everyone who hears these words of Mine and does not act on them, will be like a foolish man who built his house on the sand. 27"The rain fell, and the floods came, and the winds blew and slammed against that house; and it fell—and great was its fall."

I'm just using [true Christians] as an example of people whose beliefs are fundamentally in opposition to OMMP. They will become your enemies… but them and who else? I think you can easily make the argument that most true Hindus and Buddhists will as well. Now we are easily talking about a lot of people. How many people who claim to believe in these Immortal Truths will have the nerve to follow through when your so-called Herd is stampeding against them? I don't know, probably only a small fraction.

 

But my point here is that some of them will, and people like me will admire them for doing so. It's an amazing thing, really, to have that kind of total devotion to some higher power even in the face of what appears to be the likely threat of species-wide extinction. Talk about a small gate and narrow way!

(Surly)

The question each of us has to address is, Which side are you on? If you knew that those in control were working to box you into a freight car headed to an unknown future, but which would likely involve Fresh Towels and Hot Showers, would you get on the train or would you take the fight to them? And would you take the fight to them knowing that they controlled all of the vectors and tools of violence with force overwhelming to individual scale?

Indeed, our elites have changed the laws to enable the military to operate with impunity here in the "North American battleground" (yes, friends, if you are paying the least bit of attention, we are indeed the enemy), as they have likewise militarized our local police forces, complete with spiffy looking SWAT team suits, armored vehicles. and drones, as the latest invention. We have as our president the only Nobel Peace Prize winner with a personal kill list. So it may be well to say that we're living in a time where the lessons of history no longer inform what we may be able to infer about the future. All bets are off.

 

 

Ultimately, I hold with RE when he says, "save as many as you can," although we may differ about what that means. As an occupier, I believe that our presence in the streets and withholding our consent is everything that we can do. The community gardening movement is a step toward self-reliance, and teaching others to be self reliant. A self-reliant independent populace is anathema to the powers that be. But even the most psychopathic will find it difficult to dial-up a drone strike against a community garden, unless I miss my bet. Our resistance will be nonviolent, as the state has an utter and complete monopoly of the tools of violence, and a demonstrated increasing bloodthirstiness in applying them. I do not wish to make it easy for them, and have little desire to become a martyr, in a time when even bankster loan officers can murder with a pen and a computer.

Hunter S. Thompson once described himself as a "Road Man for the Lords of Karma." Since nature, or God bats last, my own view is that through education, self-reliance, and nonviolent resistance we can change a culture. The history of this society guarantees a rain of vengeance and disproportionate response on the part of the minions of the elites, in a road that runs from the Cherokee "Trail of Tears" through Logan Country through Zuccotti Park. And even if successful, the victors turn into monsters. Changing a society will take generations; generations which we may not have. Our opponents have been at this for many decades; we should not expect the quick fix.

In the coming days, each of us will need to stand up and be counted. At least I know which side I'm on.

Jun 142012
 
 June 14, 2012  Posted by at 7:16 pm Finance Comments Off on The Cost of Denying Reality

Round 2 of elections in Greece are coming up this weekend, and all of the media spin machines are working in hyperdrive to make sure that A) the elections DON’T go according to plan, i.e. the anti-memorandum Syriza party doesn’t take down as many votes as the stark stench of uncertainty, uneasiness and anger permeating throughout the country implies that it would (forget the polls), and B) if Syriza does win and Greece is forced out, the rest of the EZ periphery is convinced that it would be unwise to follow the same path.

An article in the Telegraph by Jonathan Gilbert, published yesterday, is an excellent example of this type of media propaganda in its most potent form. Just take a look at this headline:

The cost of default – rioting, sieges and death

Why is that the cost, you ask? Gilbert answers by referring to the Argentinian default of 2001. But before we get to that, I want you to take a look at the conclusion of the article:

The Kirchnerist model, which has seen Argentina grow by around 8pc a year since Néstor Kirchner came to power in 2003, benefited strongly from the devaluation of the peso, which encouraged exports, especially of soy, and a fiscal surplus.

 

“Argentina’s economic success since the crisis is based on the default and its fiscal balance,” says Dr Blejer. “A partial default isn’t enough to solve Greece’s problems. It needs to be total.”

That’s not exactly the conclusion you would expect from the headline, is it? Well, it is really the only conclusion that can be reached at this point, but if you stick it in at the very end, most readers aren’t going to take that message away from the article. Instead, they will just see the BIG, BOLD headline, perhaps skim through the article really quick-like, and take away the following – Default = BAD, No Default = GOOD.

Yet, we should all remember that default is only a “bad” outcome for the Greek people right now because it has been put off for much too long. Their economy and society have been strip mined by the Eurocrats and the bankers to keep an inherently unsustainable situation profitable for the minority elites, and to buy time for those same people. The banking system, the pension system, the healthcare system, the civil service system, the legal system, the political system… you name it – all of them range from completely broken to highly dysfunctional, and that’s BEFORE a hard default on external debts.

That is the cost of denying reality for so long, and it is the same cost that was bore by the Argentinian people:

De la Rúa had declared a ‘state of siege’ after thousands marched throughout Argentina banging pots and pans – in what is now termed the cacerolazo.

 

The social unrest triggered further political turmoil: four presidents held office in 10 days after De la Rúa’s resignation. Following an emergency session at Congress, Eduardo Duhalde was sworn in on January 2, 2002, providing some stability.

 

This was the fallout from the collapse of Argentine economy, which led the South American nation to default on $100bn (£64bn) of debt – the biggest sovereign default in history until Greece’s partial restructuring three months ago.

 

Together with the default, Duhalde brought an end to the ‘convertibility’ system of the previous decade, which had tied the Argentine peso to the US dollar. The peso was subsequently floated, leading to its rapid devaluation.

 

Convertibility had been the response by former economy minister Domingo Cavallo to Argentina’s hyperinflation of the 1980s, which peaked at 5,000pc in 1989.

 

It meant the central bank would have to keep enough dollars in reserve to match the value of pesos in circulation, forcing the government into a strict monetary policy.

 

From 1991 to 1998, the economy grew at an average of 6pc a year with almost no inflation – just 0.2pc in 1996 – but the currency peg was “completely unstable”, Leandro Bullor, an economist at the University of Buenos Aires, said.

 

As the dollar strengthened and Argentina allowed up to a third of its reserves to be held in the form of bonds, the peg strained. Government debt rose and the fiscal deficit widened.

 

“The government didn’t suitably adjust its fiscal accounts to back up the convertibility system,” Mario Blejer, president of the Central Bank of Argentina in 2002, told The Daily Telegraph.

 

“And when things started to go wrong – after Russia’s default and devaluation in August 1998 – nobody was brave enough to abandon convertibility. There would have been total chaos.”

 

In the aftermath of the Russian crisis, Argentina was borrowing from international markets at progressively unaffordable rates. As its external debt became unsustainable, the government received huge loans from the IMF, including one of $14bn in December 2000.

 

In a mirror of modern day Europe, austerity measures were introduced in an attempt to cut the budget deficit. However on December 1, 2001, after a bank run by savers, Cavallo imposed the corralito – accounts were frozen for 90 days and capital flight was restricted. “The banking crisis was the most difficult thing to handle,” Dr Blejer said.

 

Days later, the IMF pulled out of a planned rescue package to replenish foreign exchange reserves.

 

The default that followed led to a huge debt restructuring and Argentina was shut out of international financial markets. It still is today. There remain debts to settle. Members of the Paris Club are still owed $7bn while creditors that held out and ‘vulture’ funds have taken their cases to the World Bank.

If there are any parallels worth noting between Argentina in the late 90’s-2001 and Greece right now, it is exactly this one – the longer you put off default, the worse it will be for the country’s population. The politicians and bankers and pundits know that, but they will still pretend that what inevitably ensues in Greece is a result of their decision to default and DEFECT from the Eurocratic nightmare. Right now, a “Grexit” is almost guaranteed, so it is all about convincing other peripheral populations that they should not follow in the footsteps of the Greeks.

“SEE, we told you that it was better for Greece to tough it out, follow through on austerity commitments and stay in the Euro… just look at how those poor Greeks are doing now!”

And they will appear to be right, because Greece will be an ugly sight after the default/exit – much uglier than Argentina. Capital controls, trade barriers, emigration restrictions, hyperinflation, malnutrition, starvation, social unrest, police/military crackdowns – it will be a whopping mess. What will the Spanish people think when they see all of this go down? What will they do when the financial contagion FULLY envelops their bond markets and the bankers demand a pound of flesh for bailing themselves out, just like they did in Greece?

We cannot be sure about that, but one can hope that the Portuguese, the Spanish, the Italian and others remember exactly how the Greek people got to this point in the first place – they were coerced into denying reality for far too long.

Jun 132012
 
 June 13, 2012  Posted by at 12:17 am Earth Comments Off on Ruminations: Faith and Humanity

I’m using this commentary to ruminate on a thought-provoking statement written by TAE reader alfbell and re-posted to the comment forum by reader Candace:

alfbell says…

“No system will ever be successful until the human mind, and the spiritual being that utilized it, have been isolated and fully understood. Psychiatry, psychology, psychoanalysis, et al. have failed in this area as well. Very too bad because THIS is the key to man’s future survival.

 

Find the source of evil and destructive intentions; the need to dominate; the need to destroy what another creates; man’s inhumanity to man; man’s illogic; man’s low level of morality; man’s “animalistic” tendencies; man’s inability to predict consequences; etc. and you will save mankind.”

There are generally 3 types of “Doomers”, or realistic thinkers, out there:

1) Those who believe humanity is doomed to extinction or near-extinction no matter what we do at this point in time.

2) Those who believe humanity is probably doomed to extinction or near-extinction, but there is a slim chance we can avoid such a fate if the appropriate measures are taken and all the stars align in the right places.

3) Those who have FAITH that significant portions of humanity will make it through its numerous trials in the near future, difficult and painful as they may turn out to be.

I generally fall somewhere between #2 and #3 right now, but I can say with confidence that I rely on faith to instruct my beliefs. What is faith?? Most people consider faith a part of spirituality – i.e. a fundamental belief that human individuals and societies can overcome their inherent tendency towards committing “evil” acts and avoid their experiences of mortal suffering.

All major religions today incorporate the two components of this belief into their spiritual teachings – that 1) humans are inherently prone to sinfulness and suffering (we are born slaves to our sin and mortality), and that 2) humans can ultimately avoid those things by following specific paths (we can break the chains of our slavery).

I find a lot of value in that belief, but I disagree with many people about how to acquire the faith necessary to get on the proper path to changing oneself and, PERHAPS, the course of humanity. A lot of people will try to tell you that faith is an irrational, illogical and emotional drive – that it cannot be derived from the rational (or scientific) mind. This view is best summed up by the following quote:

“If you love [have faith in] something, let it go – if it comes back to you, it is yours forever, if it doesn’t, then it was never meant to be”.

I prefer the exact opposite version:

“If you have faith in [love] something, hold on to it with whatever cognitive ability and emotional strength you can muster – if it still manages to escape you after that, then run after it and try to get it back”.

As you may have guessed, my version is not the EASY one to follow. It is not even the one I practice in most aspects of my own life, because I find it much too difficult. Yet, it is still what I believe to be true. Faith is not about a care-free attitude or an unquestioning, dogmatic belief in certain laws or truths. It is about time, effort, logic, critical examination, emotional stability, and, ultimately, free will. If you want to have faith in the survival of humanity through these trying times, you must be dilligently intent on acquiring it through your thoughts and actions.

Faith in humanity is not about perfection – humans will never become perfect beings. What we can become, though, is free from our desires to destroy ourselves and others around us through our actions and addictions – our seemingly limitless capacity to, as alfbell puts it, destroy what others create; to be inhumane towards others. Once those desires are squashed, it is quite irrelevant whether we stumble and fall once in awhile (we most certainly will), because we will be eternally capable of picking ourselves up.

Candace asks…

“What I’m trying to figure out is if we all fail to be our best selves at least some of the time, are there any structures we can impose on ourselves that will at least keep us from causing massive damage to ourselves and the planet?”

 

 

Yes, but these structures will not be any economic, political, religious or legal systems, or even Divine commandments handed down from a Supreme God. They will literally be our conscious, rational, freely-made decisions to have faith in ourselves and humanity. Once we choose to unshackle ourselves from the chains of our addictions, i.e. once we make firm commitments to strive towards the better angels of our nature – to constantly desire something more sustainable in our minds – the self-destructive materialism that currently inhabits humanity will no longer dominate its future potential.

Those are my ruminations on faith and humanity – what are yours?

Jun 112012
 
 June 11, 2012  Posted by at 3:55 pm Finance Comments Off on Keep an Eye on Italy and India

A shuttered shop window reading: “here you can really save your money” in Rome.

When we talk about economies that are looking horrendous these days, it is important to remember that there are other economies out there looking just as bad or worse, either right now or in the near future. The reason is because the global economy is so damn inter-connected that no large national economy can sustain any modicum of growth on its own. This fact is obviously the most apparent in a region such as the Eurozone, which forms a common market and shares a common currency.

Most of the focus is now falling on Spain after it announced that it will indeed need a massive European bailout for its banking sector, in unsurprising contradiction to what Mariano Rajoy stated just a month or so earlier, but soon it will also be Italy in the cross hairs once again. Andrew Davis and Nadine Skoczylas report for Bloomberg:

Italy Moves Into Debt-Crisis Crosshairs After Spain

 

The 100 billion-euro ($126 billion) rescue for Spain’s banks moved Italy to the front line of Europe’s debt crisis as an initial rally in the country’s bonds fizzled on concern it may be the next to succumb.

 

Italy’s 10-year bonds reversed early gains today in the first trading after the Spanish bailout and fell for a fourth day, sending the yield up 20 basis points to 5.98 percent.

 

“The scrutiny of Italy is high and certainly will not dissipate after the deal with Spain,” Nicola Marinelli, who oversees $153 million at Glendevon King Asset Management in London, said in an interview. “This bailout does not mean that Italy will be under attack, but it means that investors will pay attention to every bit of information before deciding to buy or to sell Italian bonds.”

 

Italy has 2 trillion euros of debt, more as a share of its economy than any developed nation other than Greece and Japan. The Treasury has to sell more than 35 billion euros of bonds and bills per month — more than the annual output of each of the three smallest euro members, Cyprus, Estonia and Malta.

 

“The problem for Italy is that where Spain goes, there’s always the perception that Italy could follow,” Nicholas Spiro, managing director at Spiro Sovereign Strategy in London, said in an interview. “There is insufficient differentiation within the financial markets. It is clear as the light of day and has been that Spain’s fundamentals are a lot direr than Italy’s. That hasn’t stopped Italy suffering from Spanish contagion.”

 

 

Italy’s total debt of more than twice Spain’s has given investors pause, especially in a country where economic growth has lagged the EU average for more than a decade. The euro region’s third-biggest economy, Italy is set to contract 1.7 percent this year, more than the 1.6 percent in Spain, the Organization for Economic Cooperation and Development estimates.

 

 

Debt agency head Maria Cannata last week said that fewer foreign investors were turning up at Italian auctions in recent months and that the country could still finance at yields as high as 8 percent.

 

The exodus of foreign buyers has left the Treasury more dependent on Italian banks, which in turn have been among the biggest borrowers in the European Central Bank’s three-year lending operations. Italy returns to markets before Spain does, selling as much 6.5 billion euros of treasury bills on June 13, followed by a bond auction the next day.

 

“If Italy has a problem with accessing the markets because investors lose confidence in the Italian ability to do the right thing, the ECB will be drawn into the fire,” Thomas Mayer, an economic adviser to Deutsche Bank AG, said in a telephone interview. “That could pose a potentially lethal threat to European monetary union.”

 

Once Italy is dragged back into this epic struggle with full force, one of the only remaining questions will be how long before France becomes a full-fledged member of the drowning Euro periphery. Given the potential speed of financial contagion at this point, and the firm policy divide between Francois Hollande and Angela Merkel, it may not be long at all. On the other side of the world, we have India creeping into the focus of the markets, as China’s smaller cousin gets some well-deserved recognition.

It may be smaller, but it is faces all of the same financial, export, inflation and sociopolitical woes as China and it is arguably deteriorating at a much faster pace. India is a very critical economy for people to keep an eye on in upcoming months, as it will have severe implications for global investment and trade flows, as well as the social fabric of the massive Indian populace. Kartik Goyal reporting for Bloomberg:

 

 

S&P Says India May Be First BRIC Nation to Lose Investment Grade

 

India may become the first BRIC nation to lose its investment-grade credit rating, Standard & Poor’s said, citing slowing growth and political roadblocks to economic policy making.

 

“Setbacks or reversals in India’s path toward a more liberal economy could hurt its long-term growth prospects and, therefore, its credit quality,” Joydeep Mukherji, an analyst at Standard & Poor’s in New York, said in a statement today.

 

Indian gross domestic product rose 5.3 percent last quarter from a year earlier, the weakest pace in nine years, stoking concern the nation’s economic prospects have deteriorated as policy gridlock deters investment and Europe’s debt crisis crimps exports. S&P lowered India’s credit outlook to negative from stable in April, dealing a further blow to Prime Minister Manmohan Singh’s development agenda.

 

The rupee and the stocks dropped. The rupee fell 0.6 percent to 55.78 per dollar at 3:20 p.m. local time, while the BSE India Sensitive Index declined 0.5 percent. The yield on the 8.79 percent note due November 2021 declined two basis points, or 0.02 percentage point, to 8.33 percent.

 

S&P’s long-term sovereign credit rating on India is BBB-, one level above speculative grade. Aside from India, the BRIC group also includes Brazil, Russia and China.

 

“Fiscal slippage, combined with persistently high inflation, could further weaken investor confidence,” S&P said in a linked report. “Both the government’s debt burden and fiscal flexibility could continue to erode, in step with rising external vulnerability because of higher trade and current account deficits. India’s credit quality would suffer under such a scenario, and a downgrade could result.”

 

Prime Minister Manmohan Singh’s government is facing one of its most challenging periods since taking office in 2004. The administration is grappling with a trade deficit that reached a record $184.9 billion in the fiscal year ended March, the widest BRIC budget shortfall and an inflation rate of more than 7 percent.

Jun 102012
 
 June 10, 2012  Posted by at 2:43 pm Shelter Comments Off on Retrospective #8: Warm is Always Beautiful

This is number eight in a series of articles documenting the principles and practice of eco-thrifty renovation written by Estwing of the ETR Blog for the Wanganui Chronicle.



To date this column has introduced the concept of eco-thrifty renovation and explained the first three of seven design principles that guided us through this process: solar gain, thermal mass and insulation. I’ve emphasized the concepts of payback period and “low-hanging fruit.” Before I move on to our fourth design principle – draft proofing – I’d like to take a moment to review some of the overarching ideas surrounding eco-thrifty renovation that do not necessarily qualify as design principles. Many of these ideas run contrary to contemporary perspectives on home ownership.

For example, instead of buying the biggest and best house with the biggest and best mortgage, we found one that was within our means with money leftover for the energy improvements I’ve described. In other words, we opted for a $100,000 (purchase plus renovation) insulated, passive solar home than a $250,000 house that might look nicer but have no insulation or substantial solar gain.

People say that buying a home is an emotional decision. That appears to be true, but it also appears to get some people into big financial trouble. At worst, the failure to meet mortgage payments results in the loss of the property. At best, meeting mortgage payments over 30 years means they end up paying roughly twice the purchase price. In other words, a $250,000 home ends up costing $500,000.

The focus on payback period means that eco-thrifty renovation is more like operating a business than managing a home. In other words, the process is often more rational than emotional. But this is not to say that it cannot also be beautiful. Beauty the eco-thrifty way comes slowly, often through our last three principles – reduce, reuse, recycle – and through words of wisdom like those from my friend the solar engineer in the Himalayas, “Warm is always beautiful.” Beauty also comes through the freedom offered by not living under a mountain of debt. British economist E.F. Schumacher insisted that “Small is beautiful.”

Small can mean the size of a cozy, little home, or it can represent the baby steps toward making any home more energy efficient. Those baby steps are what we call “low-hanging fruit.” The low-hanging fruit that I’ve described so far include window battens (insulation), plastic window film (insulation), compact fluorescent light bulbs (electricity savings), and an extra layer of plasterboard (thermal mass). Nearly anyone in Wanganui could put the first three of these to use right away and start reaping savings that represent a greater than 100% return. In other words, the payback period for each of these is less than one year. Please note, however, that an extra layer of plasterboard is appropriate for those homes that overheat in direct sunlight during the months of May – August.

The next idea behind eco-thrifty renovation is having the fiscal discipline to reinvest the savings from low-hanging fruit in medium-hanging fruit, which have payback periods between four and twelve years. Examples of these include solar hot water (electricity savings), pelmets and thermal curtains (insulation), adding north-facing glazing (solar gain), removing south-facing glazing (reducing heat loss), and our Schacklock 501 multi-fuel range (heat source on cloudy days and electricity savings when used for cooking).

We believe that every little bit helps and that the cumulative effects of all these small efforts make for a warm, dry, efficient home that is gentler on the planet and the wallet. This approach to renovation is more about designing for living with a home than designing for living in a home. We interact with the functioning of our home on a daily basis, and as our eco-thrifty renovation winds to an end we are set up for an eco-thrifty lifestyle where we pay about $20 per year in rubbish fees and eat fresh fruits and vegetables we’ve grown ourselves. That is the beauty of freedom. 

Peace, Estwing

Jun 082012
 
 June 8, 2012  Posted by at 2:50 pm Energy Comments Off on Waste Based Society

I’m out of town for the weekend, limited internet access. So the new posting may be a bit scarce, depending on what kind of free time I&S get. For now, I would like to cross-post an article by one of the Chefs over at the Doomstead Diner – RE. He talks about the fact that our system has been designed to promote extreme amounts of energy/resource waste throughout every portion of our daily lives, mainly because that is what maximizes profits for the increasingly few people at the socioeconomic apex. This fact also implies that there is a good deal of room for minimizing waste throughout the system and that people will be forced to do so in the near future, as their lifestyles have completely outgrown their ability to afford them.


Waste Based Society

I love Olives, most any kind really although Kalamatta Olives are my favorite. They are pretty expensive though, the Spanish Manzanilla Olives are generally more affordable.

I also really like BEER. My favorite these days is Sam Adams Boston Lager, but I had many other favorites over the years,including Heineken, Dos Equis, Foster’s (my Aussie years of underage drinking ) and for a while also Grolsch.

Now, what do both Olives and Grolsch Beer have in common here, besides the fact I like both of them? In both cases displayed here, they come Packaged in Glass Jars or Bottles. Both products do come in Cans also of course, but I always liked the Glass packaged ones better.Glass Olive Jars are often quite distinctive in their shapes, and Grolsch bottles are not only distinctive, they have a neat type of Resealable Cap on them.

 

 

Perhaps my first recollection of becoming aware that we were running a wasteful and unsustainble paradigm came from the original Coke Bottles, also made of Glass and also quite distinctive in shape. I was probably only 5 years old most when I couldn’t understand WHY we were throwing out these very nice Bottles which clearly could be reused many times over.

Eventually “recycling” became the word of the day, and you were supposed to separate your Trash into separate Bins, one for Glass, one for Aluminum Cans, one for Plastics of various kinds, one for Paper and one for Organic Waste, aka food leftovers mainly in the typical Suburban Household of the 1970s. Of course, having 5 different trash receptacles in the Kitchen never really gained all that much traction and eventually this worked down to 2, “recyclables” and non-recyclables. Somewhere, some Unidentified person sifted through the Recyclables trash on a conveyor belt separating out the Glass, Plastic, Paper and Aluminum.

Just looking at the Glass though, how was it “recycled”? The Bottles were not sent back to Coke Plants whole for rinsing and re-using, they were Crushed, melted down and Molded again into a new Coke bottle, or some other kind of bottle or Jar or maybe automotive windshield. How much Energy was saved by recycling a Gas bottle? Not much if any, and probably actually was net waste when you consider the transport issues.

 

 

Now, if you have ever seen Glassblowers in action of melted some glass yourself in a laboratory over a Bunsen Burner, you should have some idea how much energy you need to melt glass hot enough to mold into shapes. Now contemplate on how many Glass Bottles or Jars you have used through the course of your lifetime and thrown away after the product inside was consumed. For me, I know it is MANY, pretty much incalculable.

 

 

Anyhow, this problem always bugged me, and bugs me to this day. I have this real PROBLEM of Hoarding Glass Jars and Bottles. The reason I drank Grolsch mainly besides the fact the beer is pretty good was to collect up and Save the Bottles! I figured someday I would Brew my OWN Beer and these would be great to Bottle them in. The collection of Grolsch Bottles currently sits thousands of miles from where I live right now, in a Storage Unit in the Ozarks.

Since moving up to the Last Great Frontier, every time I go and buy a Jar of Olives, I can’t bring myself to THROW AWAY the Jar. Fortunately I have not become overwhelmed by Olive Jars because Fred Myers has an Olive Bar where you can scoop up what you like from the Buffet and drop it into a Plastic Container, which I don’t have too much trouble with throwing away.

Upon returning from Brazil in the late 60s, where I tagged along with the Cook to the Open markets where she bought the food, I became quickly AMAZED at how all the Dishware and Eating Utensils has become Disposable items also. In Brasil when we ate our meals, it was all off of Fine China and we had two sets of Eating utensils, the base metal Flatware we used every day and then the Fine Silver stuff we pulled out when the Rockefellers showed up and we had a big fancy Dinner.

Coming back to the FSofA after my parent’s divorce, we ate off paper plates with plastic forks and knives that got thrown out after each meal was done. I ate at GREAT Pizzeria’s in NY Shitty, buying by the Slice at 25 Cents each, and each slice was served to me on a Paper Plate, along with a Paper cup for my Soft Drink, which I also threw away after the drink was consumed. Mo more Glassware, no more Plates to wash, MARVELOUS! Not really of course, because this was just more MOUNTAINS of endless WASTE, and Recycling never worked at all on an economic level.

 

 

The Frozen TV Dinners now morphed into Microwaveable Meals are yet another example here. I don’t remember the manufacturer, but at one point one of these Frozen Food companies but out a meal that was packaged on top of a Bakelite type plate that was REALLY sturdy and you could wash and use over and over. I started buying those early Microwaveable meals and SAVING the dishes! LOL. They were just too GOOD to throw away! Even today, there are some microwave-ables packaged on plastic dishware you can easily reuse many times if you wash them after use. I do force myself to throw these away though, because keeping mountains of endless Plastic Dishware I will never need is ridiculous.

Anyhow, while the ungodly waste of energy involved in the Carz paradigm of runnig willy nilly around in SUVs is a great current source of Waste, the entire economic system here has been based on Waste through many areas, and probably started with the Glass Bottles. From recent stuff I have read, the Dutch apparently burned through their Peat Bogs making Glassware for export in the 1600s. Eventually the English started pulling up more Coal with the Steam Engine, but once the Dutch had to buy coal instead of use energy from the Peat Bogs to make the Glassware, it lost its economic advantage.

Just about everything we use depends on vast amounts of energy to produce, the refined Metals, the Glass, the Bricks and Mortar etc. We can’t keep making new stuff, using it once and throwing it away. This was clear to me as a 5 Year Old drinking Coke out of Glass Bottles. Exactly why it never became clear to everyone else remains a mystery to me to this day.

RE

Jun 062012
 
 June 6, 2012  Posted by at 9:54 pm Energy Comments Off on Welcome to the No-Growth Paradigm

burningsands

September 1932. “Iraq oil fields. Man with fires in desert.” American Colony Photo Department, Matson Photo Collection.

Western developed economies have been resorting to almost every possible trick they can conjure up to maintain financial stability and economic growth over the last few years. And while stimulus, interest rate cuts, monetary easing, currency swaps, liquidity operations, bailout/austerity programs, bank “re-capitalizations”, loan guarantees, entitlement/welfare programs, data manipulation, etc. have kept them muddling through so far, the undeniable truth is that there will SOON come a time when none of those things makes the least bit of difference anymore.

For instance, Morgan Stanley just produced a report which concluded that the euphoric market effects of quantitative easing, the most potent monetary weapon possessed by CBs, may only last a few HOURS or DAYS, rather than weeks or months. This concept should be so familiar to readers of TAE by now that I don’t even need to link to any of our articles for reference. Here’s the bottom line – the U.S. population is still saturated with consumer, housing and business debts, as well as unserviceable public debts at the local/state level, and the deleveraging cycle is once again gaining momentum on the back of the Eurozone crisis.

And that means no amount of cheap liquidity will be able to substitute organic economic growth with artificial growth on paper. If monetary easing cannot even manage to temporarily juice housing data, jobs data, retail sales data, consumer sentiment data, manufacturing data, etc., then the big market players no longer have anything to hang their hats on. Without support for asset prices and corporate profits on paper via leveraged market speculation, most people in the the corporate AND consumer worlds will not feel wealthy, happy and complacent anymore. Thus, the panicked spiral of debt deflation picks up steam once again.  

Zerohedge: Morgan Stanley Sees QE3 Rally Lasting Hours Not Weeks

 

Global macro weakness seems set to trigger another round of global monetary easing. Prior aggressive policy action has coincided with risk asset rallies. However, those policy actions also corresponded with improving macro data, which we think was the critical factor. There will be a Pavlovian reaction from markets if we get further easing, particularly QE3 from the Fed. But if macro stays weak, expect any QE3 rally to last hours or days, not weeks or months.

 

Macro news is falling short of expectations almost everywhere.

 

 

 

What’s at issue now is whether unconventional policy either works to stimulate activity, or can directly boost risk asset prices. We’re skeptical on the first point. Deleveraging cycles mute the effect of monetary policy on growth. Unconventional monetary policy may be an effective shield – can defend against systemic breakdown – but not a good sword: broadly unable to encourage a return to normal credit creation, where monetary policy can work to stimulate growth.

 

Having said that, the important issue for many investors is whether further unconventional easing can trigger a tradable rally in risk assets, even if there is little or no effect on the macro outlook. We’re doubtful. When growth is the concern, as now, tradable rallies require better macro news.

 

 

Growth concerns, not systemic risk, are now unsettling markets. Investors, rightly in our view, are increasingly skeptical about the ability of unconventional policy to boost growth in developed economies. Certainly, it seems unlikely to counteract fiscal tightening, now under way in Europe and UK, and in prospect in the US. Further easing may trigger an initial market response – there are too many investors who think it works to think otherwise. But without macro improvement, that risk asset rally will be short-lived, in our view.

Over the course of the last year, and [not coincidentally] in concert with the inflection point of credit markets last year, the peanut gallery of pundits has shifted more and more into line with the views of the “gloom & doomers” out there. Morgan Stanley analysts, for example, are now literally telling you the same thing Stoneleigh was telling you three years ago – that QE by the world’s largest central bank would eventually fail to overcome the financial and psychosocial forces underpinning the greatest debt deflation to ever occur in the history of human civilization. Three years later and that statement seems almost like a tautology, rather than a matter of opinion.

Yet, we still cannot rule out the ability of central authorities to extend and pretend with certainty. Let’s say that the Fed decides to defy all expectations and announce the purchase of $2 trillion in MBS and municipal bonds as a part of QE3 in June, and then, on top of that, the ECB announces that it is actively considering the possibility of directly monetizing Eurozone sovereign bonds with Germany’s unconditional blessing. This is an extremely unlikely scenario, but there is no denying that it will boost the markets and maintain artificial economic growth for at least a few months (more likely a year).

What then? Has all of the gloom and doom over the future of economic growth finally been put to rest? No, not at all. Just as it took the pundits a few years to finally hone in on the dire reality of our global financial situtation, it will take them a few more years to hone in on the dire reality of our global energy situation. The fact is that Western economic growth over the last few decades has been fundamentally underpinned by access to cheap oil. Sometimes, we would engage in hard-handed “negotiations” to secure oil in other parts of the world, and, other times, we would just steal it.

I ran across an interesting statistic on Business Insider today, although I’m not sure the author of the article has any idea why the statistic is interesting. The article noted that Norway’s oil exports as a percentage of GDP had peaked at 17.5% in 2000, and has come down significantly to 12% in recent years. It then goes on to argue that countries above the 12% ratio, or “the Norway threshold”, are “some of the nastiest, most dangerous places on Earth, while those below it lead a relatively sanguine existence”. Let’s ignore that ridiculously simplistic description for a moment, and take a look at the countries above 12% (data sourced from the IMF; my commentary in brackets):

The Norway Threshold: The Most Dangerous Statistic In The World

 

Brunei Darussalam: 78.65% [colony of U.K. until 1984]

 

Republic of Congo: 73.41% [colony of France until 1960]

 

Equatorial Guinea: 69.8% [colony of Spain until 1968]

 

Iraq: 66.83% [U.S. supplied with aid/intelligence/weapons in 1980s war with Iran, invaded in 1990 Gulf War, invaded and overthrew government in 2003 Iraq War]

 

Angola: 62.37% [colony of Portugal until 1975]

 

– Turkmenistan: 57.42%

 

Kuwait: 57.1% [occupied by U.S. in Gulf War to allegedly defend against Iraqi incursions]

 

Qatar: 56.34% [colony of U.K. until 1971, currently has strong ties with U.S. military]

 

Gabon: 53.44% [colony of France until 1960]

 

– Azerbaijan: 52.38%

 

– Saudi Arabia: 52.34%

 

Libya: 50.53% [repeated attempts by U.S. to assassinate leader Gaddafi in 80’s, effectively invaded in 2011 – Gaddafi assassinated]

 

– Bahrain: 49.47%

 

Chad: 43.88% [colony of France until 1960]

 

– Oman: 43.73%

 

Singapore: 41.85% [colony of U.K. until 1960]

 

Nigeria: 38.44% [colony of the U.K. until 1960]

 

Algeria: 37.63% [colony of France until end of French-Algerian War in 1962]

 

United Arab Emirates: 30.99% [colony of U.K. until 1971]

 

– Kazakhstan: 30.91%

 

– Venezuela: 27.9%

 

– Belarus: 25.37%

 

– Republic of Yemen: 24.35%

 

Islamic Republic of Iran: 23.42% [Western forces deposed democratically-elected leader in 1953, constant sanctions and threats to attack over past decade]

 

Trinidad and Tobago: 22.59% [colony of U.K. until 1962]

 

– Ecuador: 19.32%

 

– Lithuania: 16.65%

 

– Russia: 14.9%

 

Sudan: 14.22% [colony of U.K. until 1954]

The sheer level of 20th-21st century economic, political and military intervention by Western powers in countries that exceed the 12% “Norway threshold” is clear, and most of the time these forms of intervention lasted well beyond WWII. Even countries that were never technically colonized or invaded, such as Saudi Arabia, Bahrain and Oman, have operated with very strong ties to Western powers for many years. Most of the the other countries, of course, were part of the equally imperialistic Soviet Union until its demise around 1990.

Who could have known that a continuous imperialistic presence in these regions over the course of decades would leave some of the “nastiest, most dangerous” countries in its wake?? Perhaps the same people who could have known that decades of reckless credit creation would destroy the internal organs of developed economies. BUT, now, we are approaching the end game of Western finance and imperialism. Just like the former Soviet Union, the Western imperial powers are now over-leveraged, over-indebted, over-extended and over-developed.

These powers were given a little shove and now we can watch them topple. First, we witness the wrath of a banking crisis that makes 0-1% annual economic growth seem like a miracle, and makes the combined central authorities of the Western world seem impotent. That is exactly where we are now. Next, we watch the energy/resource conveyor from the 12% nations to the rest of the West break down. To be perfectly clear, though, this coerced flow of energy will not be halted overnight, and the tactics used to preserve this flow will make quantitative easing look like amateur hour, with much greater consequences for every country involved.

At the same time, the flow will be under constant threat of disruption and its velocity will slow, leaving the vast Western infrastructure built from decades of imperial energy/resource extraction unable to sustain itself. Those factories, planes, cars, highways, skyscrapers and other monuments to industrial excess will become much bigger liabilities than assets on the “books” of Western populations. They will form a practically impenetrable wall to further economic growth – fiscal and monetary policies be damned. Welcome to the end of our “relatively sanguine existence”.

Jun 032012
 
 June 3, 2012  Posted by at 3:43 pm Shelter Comments Off on Retrospectives #6 and #7: Window Battens and Window Film Insulation

These are numbers six and seven in a series of articles documenting the principles and practice of eco-thrifty renovation written by Estwing of the ETR Blog for the Wanganui Chronicle.


You will recall from last week that I am a big fan of Neil Diamond and of pelmets. Unfortunately, Neil canceled his Wellington show last year. L Also unfortunate is that installing pelmets is probably not an option for most renters. (More on that in a moment.) We made our pelmets by reusing old rusticated weatherboards that we removed while re-cladding the exterior. I ripped the re-used weatherboards to 150 mm wide and inverted them so the scallop faced downward. Installed against the drop ceiling in the lean-to section of our home (kitchen, dining and bathroom), the pelmets also serve as an attractive crown molding. Our thermal curtains are hung inside the pelmets – as you would. But because we have retained single glazing, we have added extra-layers of eco-thrifty window insulation in two ways. The first is a modified version of what are commonly called “window quilts” in North America.

 

Traditionally, a window quilt is an expensive, custom-made quilted cloth that rides up and down in a fitted track installed inside of the window frame. I have never seen one during my four years of living in New Zealand, but, then again, I never saw a pelmet in my 40 years of living in the States. As an international ambassador for all things energy-efficient, I am happy to introduce a special eco-thrifty version of the window quilt to Aotearoa. To avoid confusion, I call this version a “window batten.” A batten is a long, thin piece of wood, in this case about 25 mm by 25 mm. We just used whatever off-cuts we happened to have at hand.

 

 

The main idea behind a window batten is that it replaces a window quilt for a small fraction of the cost. For instance, a window batten made for about $5 can replace a window quilt that could cost upwards of $200. Multiply that by every window in your home and you get the picture. Additionally, window battens can be installed without making any holes (screws or nails) in the window frame. That is because a window batten is held up by friction. This is how to make one.

 

Cut a 25 mm x 25 mm batten 5 mm shorter than the inside width of your window frame. Cut a 25mm x 10 mm batten the same length. Select a wool blanket, duvet inner, or quilted mattress protector (mattress pad) that measures about the same size of the window, but slightly bigger. Next, you’ll need to “sandwich” one end of the blanket between the two battens. Make sure to leave some extra fabric hanging over both ends of the battens. (This will take up the 5 mm shortfall of the battens and wedge the entire unit inside of the window frame.) Pre-drill three to five evenly spaced holes through both battens (and the blanket between them), and then fix a screw in each hole. That is your window batten.

 

 

To install the window batten, fold the ends of the blanket over the ends of the paired battens and wedge the lot into the top of the window frame. If it is too loose, fold up a small piece of cardboard and wedge it in. If it is too tight, you may need to cut your battens shorter and try again. That’s one way we’ve insulated our windows against heat loss overnight. I’ll describe another way next week.
Peace, Estwing

Images courtesy of Space Window Insulation, an excellent source for bulk, inexpensive materials. SWI also accepts our local currency, REBS. Good on you! 

 

 

Dead air is not good on the radio, however, it is absolutely fabulous in your home. Specifically, it is great in your building envelope: the walls, windows, floor and ceiling. Another name for dead air is insulation. As my friend the rocket scientist likes to say, “In double glazing the second piece of glass is not the insulation, it is the air in between.” He went on to show me a graph of the R-values for double-glazing when the two panes of glass are set different distances from one another from 1mm through 50mm. Now you may think that only a rocket scientist can get excited about insulation. Not true, I have managed to get four columns in a row out of dead air! (Maybe that’s why I’m in the newspaper and not the radio.)

 

 

You will recall that last week I described how to make an eco-thrifty version of a window quilt that I call a “window batten.” Before that I wrote about the special relationship between curtains and pelmets, and before that it was pink batts. I promise this week will be the last on the topic…for now.

 

 

While not everyone is in a position to insulate their walls, ceiling or floor, or even to install pelmets, I think anyone could make eco-thrifty window battens. (By the way, did anyone make one after last week’s column? If so, please write a letter to the Chronicle and share your experience.) I also think that anyone could install plastic window film insulation that you can pick up in kit form from a number of places around Wanganui. Just as the second piece of glass is not the insulator in double-glazing, the piece of plastic is not the insulator, it is the air gap in between the plastic and the glass. My rocket scientist friend tells me that a 20mm gap is optimum. Anything wider does not improve performance, but anything narrower reduces performance. And by performance I mean R-value: the Resistance to heat flow.

 

 

For instance, the R-value of an insulated wall is about 2, while the R-value of a single-glazed aluminium window is 0.15. That is so low that even a 5mm air gap that you will get by applying the plastic film to the inside of a standard aluminium window may double that window’s insulating ability to about 0.3. That’s still a lot less than an insulated wall, but one of the mottos of eco-thrifty renovation is “Every little bit helps…so long as it has a short payback period.”

 

 

And while it may take a rocket scientist to calculate the exact payback period of plastic window film insulation, it does not take one to compare its cost versus purchasing new double glazed windows for an entire home. We are talking a few hundred dollars versus many thousands of dollars. And as long as the air gap is well sealed, the performance should be equivalent. As a matter of fact, I learned recently that tight fitting thermal curtains can be just as effective as double-glazing. I might add that window battens are just as effective as tight fitting thermal curtains. In our home we are piggy-backing many of these strategies. For example, 1 pane of glass + 1 air gap + 1 sheet of plastic + 1 air gap + 1 window batten + 1 air gap + 1 thermal curtain = 1 very low power bill. This type of horizontal lasagna of window treatments may not appeal to everyone, but I’m confident that saving money does. To quote my friend who is a solar engineer in the Himalaya mountains, “Warm is always beautiful.”

Peace, Estwing

Jun 012012
 
 June 1, 2012  Posted by at 3:10 pm Finance Comments Off on NFP and QE3 Speculations

So the May NFP report was released today, and it was nothing short of horrendous for the U.S. economy. On expectations of 150,000 jobs created, the actual figure came in at 69,000 AFTER factoring in an addition of 204,000 jobs through the spurious Birth/Death Adjustment, and the unemployment rate rose slightly from 8.1% to 8.2%. What’s interesting here is not the fact that the U.S. jobs market is deteriorating and threatening to consume the U.S. economic “recovery” that never was or never could be – we already knew that was going to happen this year with near certainty. What’s interesting to me is the sheer scale of the deterioration.

 

 

Previously, I was of the view that the Administration and its corporate owners would goose the data and the markets every which way possible for a few more months, until elections were over and done with. In Who Killed the Money Printer?, I suggested that this manipulation would put a lot of pressure on Bernanke and the Fed to refrain from implementing further quantitative easing programs. With the new report out (you can find the gritty details here), though, it is time to re-evaluate the situation a bit. Where before there was almost no opening for the Fed to squeeze through monetary easing, now there is a much wider opening.

It is not only the NFP report which has widened the opening, but also the sharp deterioration in other domestic economic data sets, such as ISM manufacturing, Chicago PMI, ADP employment, etc., and the general down-slide in stocks over the last few weeks in the context of an especially rotten Facebook IPO. In addition, we have general deterioration in economic indicators around the world and especially in Europe, where the intensity of the Eurozone sovereign/banking crises has obviously also grown to epic proportions. All of these things lend further support for CB intervention.

 

 

 

The markets are reacting a bit counter-intuitively to all of this – the major stock indices are all down a whopping 2%, while gold is surging up by 3%. I think it is obvious that the latter is finding its rapid (yet short-lived?) momentum from the idea that the Fed will have all the justification it needs to announce a new QE program in June. That’s true – it will. But, why aren’t stocks sharing in gold’s enthusiasm about the imminent prospects for another dollar liquidity tsunami? In what form and at what scale will any of this new QE take place?

Perhaps the equity markets now realize that the Fed is not as powerful as it seemed to be last year or the year before (see Why Liquidity is No Longer Enough). If the Fed extends its Operation Twist program OR decides to proceed with “sterilized” QE, then most money managers will not feel relieved of market pressures at all (Get Ready to be Disappointed With ‘Sterilized’ QE). If, instead, the Fed brings out a QE bazooka of $1 trillion+ in asset purchases, then they may still end up feeling a bit queasy. How does that $1T or so really stack up against the tens of trillions worth of troubled debt-assets and derivatives that are deleveraging across Europe and in the U.S.?

And what will the Fed purchase – Treasuries? Can those rates even go any lower at this point? We may have finally reached the time at which QE3 is an imminent possibility (within a month), after many months of people screaming that it was perpetually around the corner, but that time may turn out be quite anti-climactic. Will QE3 actually have any bite left behind its relentless bark, or will it quickly fizzle out like a weak dose of Alka Seltzer in a tiny cup of water? It seems that, as of right now, the equity markets are leaning heavily towards the latter.

Politically, I usually shy away from pure speculations, but I will make an exception here – it seems to me that this dismal NFP report is a blatant attack on Obama’s chances for relection by those with enough power/influence within the government. After all, we are all well aware of the lengths the Bureau of Labor Statistics can go to if they want to make a report appear significantly more favorable than it really is. Perhaps this report was SO bad that no amount of massaging could save it, but perhaps there are some with control over the BLS who did not want to save it. Justification for QE3 is certainly one part of this equation, but the ousting of President Obama and the “coronation” of Don Romney may be the other part.

May 312012
 
 May 31, 2012  Posted by at 4:13 pm Finance Comments Off on FPC: Aristotle on Utopia

I am happy to see that some of the FOFOA regulars out there have found this series, read the critiques and commented, even if they are still hesitant to venture outside of their intellectually insulated Freegold Fortress and discuss these critiques in a forum that is not so dominated by Groupthink. But, to each his own! One comment from the FOFOA forum that I'd like to focus on here was made by regular "JR", who is known for answering questions and/or making arguments by quoting the "founding fathers" of F-theory.

JR is very good at what he does, and his recent quotation of "Aristotle" was an interesting response to my critique that F-theory predicts a Monetary Utopia for the world – freely floating gold reserves trading parallel with unbacked, debt-based fiat currencies. The gold serves ONLY as a store of value for savers, while the fiat currencies serve as the medium of exchange. The reason I called it a Utopia is because it seeks to alleviate all of problems associated with both unbacked fiat currencies and gold-standard currencies by synthesizing the two into a new system called Freegold.

Aristotle, writing in what USA Gold has labeled "A Special Gold and Monetary Discussion" from the year 2000, made some interesting observations about the nature of perfect systems, or Utopias, and "shades of gray".

Aristotle (2/7/2000; 8:10:15MDT – Msg ID:24593)
Building the Perfect System by Capitalizing on Gresham's Law

 

At first cut, people fall into one of two categories: 1) those who recognize the value of an honest monetary system built upon Gold, and 2) those who have not yet given any serious thought to the matter. Proceeding with the small but special population that belong to the first category, my own experience has revealed them to be inclined toward idealism. Good people, to be sure — I wish we were all that way! But while their general awareness of what makes for a more perfect world should be providing them with fuel for an enjoyable life, instead, this level of idealism often blinds many of them to any shades of gray — and there is little comfort living in a strictly black-or-white world. I write this with hope in the off-chance that it may help provide a source of comfort to this small group of idealists, offering them some subtle shades of gray that won't completely undermine their idealistic integrity.

 

While reaching out to my idealistic friends, I also hope to present a "roadmap of thought" for that larger, all-important population which falls into the second category mentioned above — those that have not tapped into a more thoughtful, enjoyable life which I have seen to be the general hallmark of my few Gold-minded friends (the ones who have themselves avoided the extremist idealistic trappings.) Why do I call this second category the "all-important" population? Because the Many do indeed dictate the terms under which the Few must also live. I must, therefore, grudgingly devote sufficient attention in this commentary to ensure some of the idealistic readers can see this important "shade of gray" regarding majority rule. It is my hope that they will then be prepared to pragmatically accept the terms/constraints under which this *perfect monetary system* must be designed.

 

In this commentary I shall attempt to clearly lay out what I feel this "perfect" monetary system to be — the *perfect* system for a consistently imperfect world, that is. I am not so bold as to think that the world of human ambition and disposition is something that can be altered to suit the perfection of our preferred (Gold coin) currency's characteristics — especially the limitations (fiscal austerity) it imposes on its users, the population at large. I therefore resolve myself (and hope you do, also) to the humble thought that our currency system as a whole might be artfully developed into a state of harmony with the world in which we do live. The present system, and all failures before it, have been as square pegs in round holes. With the system to be described, I hope to avoid any system that lends itself to the repetition of past abuses and failures.

What Aristotle is doing here is to set up a differentiation of F-theory from other TRULY idealistic theories, such as those which predict a return to a strict gold-standard that will somehow maintain economic equilibrium over time. Both advocates and critics of F-theory, such as myself, can agree that the gold-standard arguments are hyper-idealistic, and one only has to look to recent periods of history marked by a gold-standard to see why. The question is, though, whether F-theory can really be classified as being any more realistic, i.e. any more likely to occur and sustain itself.

I believe that Aristotle answers this question in the negative when he provides us a brief description of what the Freegold system will look like. That's just what I personally believe, though – you can take a look at the description below, particularly the phrases in bold, and decide for yourself what part of the Idealist-Utopian Spectrum F-theory falls on. Oh, and don't hesitate to tell us what you think!

So, what is the proper role of Gold in the monetary system architecture?
 

At this point, the staunchest Gold supporters are likely gnashing their teeth and forming a posse to hunt me down for a proper lynching, I'm sure. After all, I have made no bones about the need to cut Gold out of any ties whatsoever with the various national currencies. Due to inflation and deflation that naturally arise through variations in the rates of borrowing, payback, and growth of the economy, currency fluctuations lead to bank runs which are frankly too disruptive and are not to be tolerated. Fortunately, they are rendered completely meaningless under a fiat currency regime. National fiat currencies allow governments to manage their own national economies to the extent that that are able, and to take whatever efforts needed to avoid falling into those most destructive currency deflations that wreak havoc on economies.

 

Gold must be removed from these currencies so that governments are not tempted to manipulate its perceived value in order to give a boost to their own currency. The goal would be that sudden value shocks will be avoided because at all points in time the currencies will be fairly valued against Gold–there won't be an inevitable and recurring "day of reckoning" in which the pent-up false perceptions are unwound amid calamity and crisis of confidence. Gold must also be removed from any element of the monetary system that would seek to make loans using Gold because, as we've seen, these confound Gold's ability to reach its true physical-based fair market value. Gold derivatives must also be done away with for the same reason. Gold must remain a pure monetary asset, bought and sold and owned outright–nothing else would be allowable. National fiat currencies will ably serve the market's various needs to borrow funds…after all, that's how fiat currency is born in the first place.

 

Although I've seemingly cut Gold out of the monetary system, that is not the case at all. Gold qualifies as the only true money; being able to function as a unit of account, as a medium of exchange, and as a store of value. A fiat currency only meets the first two elements, but they fail as a store of value. Therefore, Gold will be be the money of savings, while national currencies will be the currency of commerce. They will all float relative to each other, and constantly seek out their proper value. Kept with special status as an independent and unlendable currency, Gold will be the ever-rising North Star of the monetary system. Central banks would be inclined to hold only Gold in reserves of any significant size–because Gold is not the liability of any other nation, and its real-world value would continue to grow over time. As said before, quantities held in other national currencies would be done only to the extent that they facilitate trade between active partners. Individuals across the Earth would also choose to hold Gold as their savings; their life's productivity forever protected from inflation and deflation, and from reliance upon another person's (or nation's) liability.

 

The beauty of reserving Gold as an unmanipulated monetary asset is that individual local currencies can still be "managed" by the government in whatever manner is seen befitting that specific country, without having an adverse effect on the meaningful wealth held in reserves (in the form of Gold savings) among other nations and local citizens alike. No single national currency need ever be held by another nation as a reserve currency (which "unfairly" allows the nation that issues the reserve currency to export its inflation.) However, a nation might choose to hold another's currency in a quantity simply because it makes for expedient trade.