Doc Robinson
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The border with Ireland shouldn’t be a deal-breaker. Canada and the US don’t have an “open border”, yet somehow they manage when the border goes through towns and even buildings.
“There are 15 official border crossings along Vermont’s boundary, averaging out to one every six miles.”
“[In] the community of Derby Line, Vermont/Stanstead, Quebec… a large Victorian house is divided by the boundary.”
“[Also] bisected by the line is the Haskell Library and Opera House, intentionally built on the line by its benefactors in 1904, to celebrate the friendship between the two countries. The line hits the east side of the building obliquely, where two separate fire escapes had to be built, one in the US, and one for Canada. Many such redundancies and building code complexities have to be tolerated by the building managers. After repairing the roof a few years ago, the building’s owners were sued for not hiring a Canadian contractor to work on the Canadian portion of the roof.”
Re: “It now requires ever increasing levels of debt to create each $1 of economic growth… It now requires nearly $4.00 of debt for each $1.00 of economic growth.”
There’s some hocus-pocus going on. Debt (an account balance expressed in dollars), when divided by GDP (a periodic production expressed in dollars per unit of time, typically per year) actually results in a number with the units of time, not a percentage. If it’s shown as a percentage, as in this article, the correct implication is that it’s a percentage of a full year.
Thus, a Debt/GDP ratio of 4.00 means that it would hypothetically take 4.00 years of the full production value to pay off the debt (in other words, 400% of the specific year’s production value). This does not mean that $4.00 is required “for each $1.00 of economic growth”, as claimed. Growth isn’t even part of the picture being considered at this point!
For conclusions about growth, we’d obviously have to examine the changes in GDP, but this just appears as an “ornamental” blue line on the graphs.
Re: “I don’t normally post 3-week-old articles…”
No worries, you already posted it on September 28.
Why that forced low volatility is so dangerous. No price discovery.
• China’s Mortgage Debt Bubble Raises Spectre Of 2007 US Crisis (SCMP)
Young Chinese like Eli Mai, a sales manager in Guangzhou, and Wendy Wang, an executive in Shenzhen, are borrowing as much money as possible to buy boomtown flats even though they cannot afford the repayments…https://www.nytimes.com/2017/09/25/opinion/hurricane-puerto-rico-jones-act.html
The link was missing the “l” in the .html
I’m strongly anti-debt, but the following could be misleading:
“For each $1.00 the economy grew in this 1 year period the total debt outstanding increased by $5.48.”I won’t go into the portion of the $5.48 that is due to the increase in residential mortgages outstanding, which doesn’t really grow the economy anyway (except for the fraction related to new construction). Instead, I take issue with it being presented as some sort of cost/benefit relationship, with the “benefits” of the growth being limited to the single year that it grew.
A simplified example:
Joe’s income has stagnated. He could acquire additional credentials, which would raise his income, but he would have to borrow money to do it. The credential program for Joe has a one-time charge of $5,480. Should Joe take on $5,480 of debt if it would raise his annual income by $1,000? Joe’s growth in income would occur just one year, and then it would be stagnant again. But Joe would reap the benefits of that growth (the extra $1,000 of annual income) every year thereafter. (Until the economy crashes and nobody is hiring…) If the interest rate on the loan is “reasonable”, then a typical cost/benefit analysis could conclude that Joe should take on the $5,480 of debt.Not mentioned is military service, a form of indentured servitude that survives today. Add a draft (for both genders?) and presto, coerced servitude. In the name of Homeland Security, to prevent and quell uprisings? To keep the “have nots” in their designated places (once they become too numerous to ignore)?
Conditions in “Third World” countries could provide glimpses of the rest of the world’s future. Shantytowns, household servants galore (for the privileged class), and people willing to work for a pittance to scrape by.
I recall a stunt by “The Yes Men” where the speaker impersonated an official from the WTO. He gave a talk about slavery being economically inefficient, with the present day practices of paying low wages, and letting the workers feed and house themselves, being less costly for the employers.
Found it:
The Fukushima radiation article link:
https://blog.safecast.org/2017/02/no-radiation-levels-at-fukushima-daiichi-are-not-rising/
Re: Fukushima radiation measurements
The open-data citizen-science volunteer-based group “Safecast” published a response titled “No, Radiation Levels at Fukushima Daiichi are Not Rising”.
In brief, “Yes, TEPCO has measured very high radiation inside Daichi Unit 2. No, it does’t mean radiation levels there are rising… This has led to a number of alarming stories claiming that radiation at Daiichi has “spiked” to unprecedented levels. That’s not what the findings indicate, however… In addition to finding the area covered with molten material likely to be fuel debris, radiation levels of 530 Sieverts per hour were detected, which would be fatal to a person exposed for only a few seconds… It must be stressed that radiation in this area has not been measured before, and it was expected to be extremely high. While 530 Sv/hr is the highest measured so far at Fukushima Daiichi, it does not mean that levels there are rising, but that a previously unmeasurable high-radiation area has finally been measured… In addition, Safecast’s own measurements, including our Pointcast realtime detector system have shown radiation levels near Daiichi to be steadily declining…”
The subject of Negative Interest Rates came up in a family conversation, and the resident teenager immediately pointed out the absurdity: “You won’t have to repay a loan; the loan will repay itself.”
A while back, I checked the fine print for buying US Treasury securities (like T-bills), and it clearly stipulates that you could get back less than you put in (i.e., a negative rate of return), depending on the auction results. “Safe haven” my foot.
Re: “It took $10 in new debt to create $1 in GDP in Q1 2016”
I’d like to see how this looks on an annual basis, or for each quarter of the past year (not just Q1). For the past 25 years, it looks more like $1 of added debt for $3 of added GDP (a far cry from $10 of added debt for $1 of added GDP). Details in June 8 comments.
That graph is bad news, but perhaps not as bad as it appears (at face value), since GDP corresponds to individual years, while the debt levels are cumulative. It seems that a better comparison to cumulative debt would look at cumulative production (not just the production for any given year.)
For example, from 1990 to 2015, it looks like the total debt increased by roughly $45 trillion, while GDP increased from roughly $7 trillion to $18 trillion PER YEAR. From some ballpark calculations based on that graph, the total production during the 25 year period was roughly $310 trillion (or about $135 trillion more than what would have been produced during that period if there was zero growth since 1990).
In other words, it looks like roughly $135 trillion is the increase in total production (above the 1990 level) during the past 25 years, which corresponds to a $45 trillion increase in total debt (above the 1990 level). $135 trillion more production for $45 trillion more debt.
Which means roughly $3 more production for every $1 more debt (since 1990). Looking at it this way, production is increasing faster than debt, which seems to contradict the assertion that “The Only Thing That Grows is Debt.”
[Again, these are rough calculations which take that graph at face value. What goes into those “growth” numbers is another matter entirely.]
Re: “Accept and embrace your inner Don Quixote.”
The Story of the Hummingbird
One day a terrible fire broke out in a forest – a huge woodlands was suddenly engulfed by a raging wild fire. Frightened, all the animals fled their homes and ran out of the forest. As they came to the edge of a stream they stopped to watch the fire and they were feeling very discouraged and powerless. They were all bemoaning the destruction of their homes. Every one of them thought there was nothing they could do about the fire, except for one little hummingbird. This particular hummingbird decided it would do something. It swooped into the stream and picked up a few drops of water and went into the forest and put them on the fire. Then it went back to the stream and did it again, and it kept going back, again and again and again. All the other animals watched in disbelief; some tried to discourage the hummingbird with comments like, “Don’t bother, it is too much, you are too little, your wings will burn, your beak is too tiny, it’s only a drop, you can’t put out this fire.”
And as the animals stood around disparaging the little bird’s efforts, the bird noticed how hopeless and forlorn they looked. Then one of the animals shouted out and challenged the hummingbird in a mocking voice, “What do you think you are doing?” And the hummingbird, without wasting time or losing a beat, looked back and said, “I am doing what I can.”
https://sechangersoi.be/EN/5EN-Tales/Humminbird.htm
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Self-preservation is a strategy that will ultimately fail. We shall lose our lives some day, but we don’t have to lose our humanity in the process.
Re: “Squeeze oil and you squeeze the entire economic system.”
I see low oil prices as being largely a result of the current state of the world economy (and some poor business decisions), instead of causing the bad economy. Falling oil prices may be correlated with a worsening economy, but correlation is not causation. The portion of the global economy that directly benefits from lower oil prices is much larger than the portion that suffers losses from falling oil prices, no?
I’m with Ilargi. Europe still has enough “room in the inn” and can be doing much more to prevent these drownings.
Re: Farmland investment
The WSJ reports,
“The market often is opaque and hyperlocal, professional investors say, with deals sealed privately in rural cafes or in small-town auctions, unlike more structured asset classes including residential or commercial real estate. Farmland sales and price data also are far more limited than in other real-estate segments…”
https://www.wsj.com/articles/farmland-investments-take-root-1438661041Some clues:
Most of the U.S. Rented Farmland is Owned by Non-Farmers
WASHINGTON, Aug 31, 2015 –Agricultural producers rented and farmed 353.8 million acres of farmland, according to the results of the 2014 Tenure, Ownership, and Transition of Agricultural Land (TOTAL) survey results released today by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS). Of these acres, 80 percent are owned by non-farming landlords…” [including 32 million acres owned by corporations]https://www.agcensus.usda.gov/Newsroom/2015/08_31_2015.php
https://www.agcensus.usda.gov/Newsroom/2015/TOTAL%20Infographic.jpg“…just as (almost certainly) happened to Barack Obama at some stage in his journey.”
A related article and video clip:
“Obama told friends he reneged on progressive promises out of fear of assassination — former CIA analyst”, by Philip Weiss
“Obama has abandoned progressive principles, such as stopping drone attacks and shutting down Guantanamo, because he is afraid of being assassinated, telling friends, “Don’t you remember what happened to Martin Luther King Jr.?” retired CIA analyst Ray McGovern said today…”
https://mondoweiss.net/2013/06/reneged-progressive-promises@ Caith:
Top 10 German Exports to UK
Germany’s exports to the UK amounted to
$105.8 billion or 7% of its overall exports.1. Vehicles: $31.8 billion
2. Machines, engines, pumps: $15.3 billion
3. Pharmaceuticals: $8.1 billion
4. Electronic equipment: $7.8 billion
5. Plastics: $4.2 billion
6. Medical, technical equipment: $3.8 billion
7. Gems, precious metals, coins: $2.3 billion
8. Iron or steel products: $1.8 billion
9. Paper: $1.8 billion
10. Aircraft, spacecraft: $1.8 billionFrom
https://www.worldsrichestcountries.com/top-germany-exports.htmlRegarding food, the supermarket chains Aldi and Lidl are German companies.
@ Raleigh re: “…exports leaving China are from U.S. multinational corporations, and I wonder who gets to claim these as exports – China or the U.S.”
According to this source, Chinese export statistics would even include all the value-added contained in components imported into China and then “re-exported” to the United States:
“The US multinationals allocate their low-end manufacturing segments based on the global value chains in China, making lots of their manufacture and service value-added segments transfer to China directly. When the manufactured goods are re-exported from China to the United States, the total value-added contained is fully brought into China’s exports by the current trade statistics system.”
From page 365 of “Education Management and Management Science”, Dawei Zheng, CRC Press, Jul 7, 2015
[This proceedings volume contains selected papers presented at the 2014 International Conference on Education Management and Management Science (ICEMMS 2014), held August 7-8, 2014, in Tianjin, China.]Ongoing tally of votes, direct from the Greek MInistry of Interior site:
“Seas are rising more than twice as fast as the global average here in the Sundarbans”
“Encroaching”, including the effects of erosion, would make more sense than “rising”.
Quoted from the full article:
“A 2013 study by the Zoological Society of London measured the Sundarbans coastline retreating at about 200 meters (650 feet) a year. The Geological Survey of India says at least 210 square kilometers (81 square miles) of coastline on the Indian side has eroded in the last few decades. At least four islands are underwater and dozens of others have been abandoned due to sea rise and erosion.”
From the aforementioned book, Local Dollars, Local Sense, by Michael Shuman (Chelsea Green, 2012):
“Every job in a locally owned business generates two to four times as much economic development benefit as a job in an equivalent nonlocal business. Local businesses spend more money locally, which helps to pump up what is known as the local spending multiplier.” (p. 18)
Table 1 (on page 19) lists an average “Local Jobs Advantage” of 2.6 resulting from studies done for various cities. Quoting the book again, “The local jobs advantage represents the relative number of jobs (direct and indirect) produced by a given purchase (say $100) from a local business versus the same purchase from a similar nonlocal business.”
Local currencies could take this further, as they generally cannot be spent outside the local area.
Back on topic
Re: The Meaning of Your Life is Other PeopleExcerpt from The Dark Mountain Blog, 28 December 2014,
by Andrea HejlskovTHE SIMPLE LIFE OF SOLIDARITY
After I quit social media my whole way of thinking has changed. As have my reading habits. What kind of author doesn’t read any books? Well, me for one. I read social media instead. I dove right into it, head first. I wanted to read *you*. But somehow it all got corrupted, somehow the deep human need for connection and communication got distorted. We were bought and sold. We were manipulated. Social media has become a weapon and they took away that which could have saved us.
…I might be weird and I might be angry about society (it’s an evil empire, run!) but you know why I write? Why I didn’t just turn my back on everything and engaged with ‘the simple life’, so pure, spiritual and whole?
Because I’m still into you.
I always was. Even Thoreau and Abbey were. We all were. Always.
CHALLENGE OF OUR TIME
I believe this to be the true challenge of our day and age. The age of individualism and egoism is over. We know this. We know we need to connect and communicate to solve the mess that we’re in. On the deepest human level. The collective soul. Aren’t we flock animals? After all? Don’t we realise that lately things have become seriously dangerous and we need to… rise?
What we need to do now is to shape these vague contours, articulate, tentatively, that which have dawned on us.
We. Need. Each. Other.
[quoted from
https://dark-mountain.net/blog/time-is-of-the-essence/%5DHuckleberry said: “…Now most single companies have rarely gotten into trouble until Debt to equity exceeds 4… This is actually Statistics Canada’s graph…Showing Canada’s debt to Assets of 0.2! That would imply a Debt to Equity of 0.25! …so incredibly low.”
That graph with Statistics Canada data is actually from a report titled “Debt and family type in Canada”, and refers to “personal and unincorporated business assets per household.” Apples and oranges?
The related section of this report:
“As well as the day-to-day ability to pay for debts from income, another indicator of financial insecurity is the debt-to-asset ratio. This ratio tracks the degree to which debts are backed by assets. Higher ratios indicate there may be more Canadians who carry debt that is not secured by assets. Although household debt increased between 1990 and 2009, the value of personal and unincorporated business assets per household almost doubled over the same period. As a result, the debt-to-asset ratio remained relatively stable between 1970 and 2007, hovering around 16.7% (Chart 3). However, in 2008 and 2009 the debt-to-asset ratio increased to 19.6%, the highest level in more than 35 years.”https://www.statcan.gc.ca/pub/11-008-x/2011001/article/11430-eng.htm
Huckleberry, what happens to these debt-to-asset ratios when real estate values collapse? How is the demand for a company’s products related to the debt levels of the would-be customers? What happens to “most single companies” when their market dries up (regardless of their debt-to-equity ratios)? What’s the effect on a company’s debt-to-equity ratio (and the effect on the economy) when corporate assets, like production facilities, are suddenly non-productive? In your opinion, what’s the range of debt-to-equity ratios in which companies will “get into trouble” (when real market values are considered), during prolonged periods of no growth?
Huckleberry said: “…Now most single companies have rarely gotten into trouble until Debt to equity exceeds 4… This is actually Statistics Canada’s graph…Showing Canada’s debt to Assets of 0.2! That would imply a Debt to Equity of 0.25! …so incredibly low.”
Huckleberry, what happens to most single companies when their market dries up (regardless of their debt-to-equity ratios)?
That graph with Statistics Canada data is actually from a report titled “Debt and family type in Canada”, and refers to “personal and unincorporated business assets per household.” Apples and oranges?
The related section of this report:
“As well as the day-to-day ability to pay for debts from income, another indicator of financial insecurity is the debt-to-asset ratio. This ratio tracks the degree to which debts are backed by assets. Higher ratios indicate there may be more Canadians who carry debt that is not secured by assets. Although household debt increased between 1990 and 2009, the value of personal and unincorporated business assets per household almost doubled over the same period. As a result, the debt-to-asset ratio remained relatively stable between 1970 and 2007, hovering around 16.7% (Chart 3). However, in 2008 and 2009 the debt-to-asset ratio increased to 19.6%, the highest level in more than 35 years.”
https://www.statcan.gc.ca/pub/11-008-x/2011001/article/11430-eng.htmHuckleberry, what happens to these debt-to-asset ratios when real estate values collapse? What’s the effect on the economy when corporate assets, like production facilities, are suddenly non-productive? In your opinion, what’s the range of debt-to-equity ratios in which companies will get into trouble (when real market values are considered), during prolonged periods of no growth?
