[gurusid]

Hi Illarghi,

Actually the situation in Cyprus plays nicely in to the hands of those who want to quash doubts over the efficacy of austerity; that and the fact the UK budget is coming up:

Press Association via yahoo:

Chancellor George Osborne has insisted that ditching his plan to restore the nation’s finances could leave the UK facing an economic disaster like Cyprus.

The bleak assessment came as Mr Osborne rejected calls for a change in approach ahead of Wednesday’s Budget, saying there was no “miracle cure” to the country’s troubles.

The Chancellor said the crisis in Cyprus was an example of “what happens if you don’t show the world you can pay your way”. He told BBC1’s Andrew Marr Show: “That is why in Britain we have got to retain the confidence of world markets.”

The Cypriot parliament is set to consider a European Union and International Monetary Fund bailout, with the possibility of a levy on bank deposits of up to 10%.

Mr Osborne, who has promised to protect British military personnel and Government personnel from the levy, added: “It is an extraordinary situation. I remember coming on this show a couple of years ago and we were talking about Greece then. Since then we have had Ireland and Portugal, problems in Spain, problems in Italy, now in Cyprus.

“Anyone who thinks Britain is alone in having these challenges should look on their TV screens, look at tonight’s news and realise that it’s a very tough economic situation out there. Unless we in Britain front up to our own problems, the problems in our banking system, the problems that we are borrowing so much money, the problems that actually our businesses need more help to create jobs. If we don’t do those things then the difficult economic situation in Britain will get very much worse.”
…
Shadow chancellor Ed Balls, appearing on the same programme, called for a stimulus package funded by increased borrowing. “Vince Cable, the International Monetary Fund, myself, many others are all saying unless you get the economy moving, unless you get some growth back, the deficit will stay high. Whereas if you act now with some stimulus to kickstart the economy, that’s the way to get growth moving.”

He accused Mr Osborne and Prime Minister David Cameron of refusing to consider a change in approach because of the political fallout. “The only reason why they won’t now change course is to avoid their own political humiliation. That is no reason to stick to a failing plan. Stimulus now, kickstart the economy, get growth moving, that’s the only way to get the deficit down.” He added it was the “economics of the lunatic farm” to call for more spending cuts and tax rises when those were the policies which had choked off the recovery.

They will of course bail out British military personnel (don’t want any mutiny in the ranks!) its a handy base to have to have in the region (for the geographically challenged like me, its next to Syria) but plain old UK citizens will have to take the hit unless their branch is in the UK:

Osborne issues Cyprus levy pledge
He said: “First of all, that is an example, in Cyprus, if you don’t show the world that you can pay your way. That is why in Britain we’ve got to retain the confidence of world markets. (again!)

“What I’d say specifically about the Cyprus situation – first of all, we are not part of the bailout because David Cameron got us out of these euro bailouts when he became Prime Minister.

“Second, I’d say that the Cypriot banks in Britain – this is important because there are many thousands of people who bank with Cypriot banks in Britain – those banks are not going to be included in this bank tax.”

There are several more reports on the ‘crisis’; given that propaganda is always proportional to policy:

Cyprus Postpones Vote On Savings Raid Bailout

Chancellor Warns Of ‘More Tough Choices’

Cyprus Bailout: Savers Lose Money In EU Deal

And of course like any system:

…To Those Within A System, The Outside Reality Tends To Pale And Disappear.
This effect has been studied in some detail by a small group of dedicated General Systemanticists. In an effort to introduce quantitative methodology into this important area of research, they have paid particular attention to the amount of information that reaches, or fails to reach, the attention of the relevant administrative officer. The crucial variable, they have found, is the fraction:
Ro/Rs
where
Ro equals the amount of reality which fails to reach the relevant administrative officer
and
Rs equals the total amount of reality presented to the system.
The fraction Ro/Rs varies from zero (full awareness of outside reality) to unity (no reality getting through).

Of course from a deflationary point of view, this ‘tax’ could also be seen as the ‘correct rate’ of interest, nobody complained when they got 10% or more back in 2008:

Halifax offers 12% interest on savings: Is there a catch?
The Guardian, Friday 6 June 2008
On Monday, the high street bank opens a ‘limited offer’ regular savings account paying 10%, and – at a stretch – as much as 12%. Rupert Jones investigates

Just how do bubble realities burst? Maybe its a case of ‘green bottles’ rather than dominoes:
https://www.youtube.com/watch?v=99XPHwuGjMI

L,
Sid.

[gurusid]

Hi Dave,

Your reply summed up nicely the whole conundrum. Practically speaking, i.e. in the real world it doesn’t work; but in the fantasy worlds inside the deluded minds of many people on the planet today, and especially the ‘financial world’ it does.

if you ignore the logistics and storage aspect, its a no-lose trade

When humanities little bubble bursts and they find themselves in the Real world – what’s left of it – they will find out how much they truly have ‘lost’. That time is fast approaching… :ohmy:

L,
Sid.

[gurusid]

Clown or comedian,

They just elected a bigger one:

👿

:woohoo:

‘New pope, lets party!’

:cheer:

Where as most people (a Billion hits)would rather do the Harlem Shake:

Harlem Shakers Surprised By Dance Craze

Welcome to the Idiocracy:
https://www.youtube.com/watch?v=BBvIweCIgwk

L,
Sid.

[gurusid]

Hi Alan,

So, prices are being driven UP artificially, but are also being held DOWN artificially. Maybe you could explain in more detail.

I just did. Its down to a distorted value system which assigns an arbitrary monetary value to everything, even when a ‘price’ cannot be put on it to start with. How can you put a monetary value fresh clean water to drink? How can you put a monetary value fresh clean air to breath? How can you put a monetary value on good soil and fertile seeds that provide food? How can you put a monetary value on an energy source that gives you the equivalent of one to seven years of constant human toil (twelve if you give them a break now and again)?

It is the ‘wetiko psychosis:

Now, were Columbus and his fellow European exploiters simply “greedy” men whose “ethics” were such as to allow for mass slaughter and genocide? I shall argue that Columbus was a wétiko, that he was mentally ill or insane, the carrier of a terribly contagious psychological disease, the wétiko psychosis. The Native people he described were, on the other hand, sane people with a healthy state of mind. Sanity or healthy normality among humans and other living creatures involves a respect for other forms of life and other individuals, as I have described earlier. I believe that is the way people have lived (and should live).

The wétiko psychosis, and the problems it creates, have inspired many resistance movements and efforts at reform or revolution. Unfortunately, most of these efforts have failed because they have never diagnosed the wétiko as an insane person whose disease is extremely contagious.

Jack D. Forbes (Derrick Jenson quoting Jack D Forbes on the ‘insanity’ of it all)

If your value system is corrupted or worse your value system is not based in reality at all, then it is quite easy to assign arbitrary* notions of value to anything, including court judgements on the very sanctity of life.

Dictionary ref: arbitrary. adj. 1 based on or derived from uniformed opinion or random choice; capricious. 2 despotic. (Concise Oxford, 9th Ed. 1995)

On conflating the measure with the thing being measured, well it kind of goes to eleven…

https://www.youtube.com/watch?v=EbVKWCpNFhY

😆

L,
Sid.

[gurusid]

Hi Folks,

Forgive me but this is critical:

Alan: Right. Synonyms: PRICE RISES. PRICE INCREASES. Those phrases, in common parlance, are SYNONYMOUS with inflation.

And that is the problem, because most synonyms are context dependant and the context has changed so that this ‘synonym’ is no longer (if it ever was) valid.

Nassim: Why not just say “price inflation” so that everyone is happy.

Because it is incorrect.
Why? Because it’s a category error . Price is a measure of value. It’s not the measurement that inflates but the thing being measured. In this case it is the relative value of the currency, which can be valued relatively to many things. When you ‘inflate’ a balloon, its not the ruler that gets bigger, but the balloon that gets bigger regarding the measure of the ruler. Price is a measure of many things, from expectation and to some extent demand, but also of affordability and notions of value. By conflating inflation and price, one distorts the very notions of value. Its not the ‘value’ that is increasing, but means to acquire that value that is inflating. That can happen if there is more of the means available, or if that means itself loses relative value so that you need more of it. Whether that means is money, goats or pink elephants, does not matter, it is the means that inflates or deflates, not the price which is a measure of relative value. At the moment the means (money, debt/credit) is disappearing. Wages unlike the previous inflationary eras are falling not rising, except for the very rich elite such as CEOs and bankers: the ‘FED’ and for that matter all the other ‘banks’ are not handing out free cash to people in the street. However, the prices of many ‘goods’ are being bet upon by the stock market system that is assigning arbitrary(1) prices and hence arbitrary value irrespective of what the true value is worth. As TAE have said, these stocks (and derivatives and financial products) have yet to be ‘marked to market’ to discover their true ‘price’ or value. What the ‘measure’ of their true worth is. Thus currently we have a situation in which price has become divorced from the money supply; it’s a bit like an authoritarian government ‘fixing’ the state price of bread, regardless of what is affordable or what the bread is actually worth, only here its called the ‘free’ market, and instead of party officials fixing the price, we have stock brokers and computerised algorithms. These are price rises driven by speculation on value (virtual digital value at that) NOT inflation of the money supply. The irony here as regards ‘energy’ prices such as oil is that they would go through the roof, as their value has been held down as regards their true worth, say when compared to the equivalent in human labour energy. As regards ‘price inflation’ – good luck with trying to measure anything with an inflatable ruler… 🙁

The boys and girls in the Bubble? Damn right:

“”Reality” is what we take to be true. What we take to be true is what we believe. What we believe is based upon our perceptions. What we perceive depends upon what we look for. What we look for depends upon what we think. What we think depends upon what we perceive. What we perceive determines what we believe. What we believe determines what we take to be true. What we take to be true is our reality.”

(2)

L,
Sid.
1 A category mistake, or category error, is a semantic or ontological error in which “things of one kind are presented as if they belonged to another”,* or, alternatively, a property is ascribed to a thing that could not possibly have that property. (*Simon Blackburn 1994. The Oxford Dictionary of Philosophy, Oxford University Press, p. 58.)

2 This is attributed by many to a David Bohm lecture at Berkely, 1977, however in Gary Zukav’s “The Dancing Wu Li Masters”, (1980, p.310) he writes this phrase without reference to Bohm with the opening word “Reality” in inverted commas, and this gives me reason to think he is the originator – perhaps inspired by Bohm..

[gurusid]

Hi alan,

alan: I am going by the dictionary definition of inflation — universally accepted, though rejected by TAE — of higher prices

No they don’t ‘reject’ it:

Alan’s dictionary ref:
http://www.bing.com/Dictionary in·fla·tion [ in fláysh’n ] — higher prices: an increase in the supply of currency or credit relative to the availability of goods and services, resulting in higher prices and a decrease in the purchasing power of money. Synonyms: price rises, increase, price increases, rise.

Stoneleigh: This source points out that changes in the money supply are the cause, and price changes are the effect. We do point out our definition regularly, and our readers understand that that definition underpins discussion here. We have also explained regularly why we use this definition.

Also I suspect that your view is incommensurate with that of the TAE:

Stoneleigh:The apparent paradox of deflation is that even as prices fall, things become less affordable for most (with the exception of those who have preserved capital as liquidity). We have been pointing out that things that people use would be getting less affordable. You seem to be suggesting that this will happen at higher nominal prices, while we are saying it will happen at lower nominal prices. The important point is the affordability.

Further:

Stoneleigh: We have had the inflation, only instead of a currency hyperinflation, we experienced a 30 year credit hyper-expansion. Either one amounts to an expansion of money plus credit compared to available goods and services, and is therefore inflation. Credit is equivalent to money on the way up, but not on the way down. Credit loses ‘moneyness’ and credit instruments are massively devalued in a great deleveraging. This is deflation by definition and it is already underway. Debt monetization is nothing in comparison with the scale of the excess claims to underlying real wealth that stand to be eliminated.

Also:

What we have said at TAE is that the money supply will contract substantially on the collapse of credit. Prices will follow to the downside, but as purchasing power will fall faster than price for most people, everything will become less affordable (ie prices will rise in real terms even as they fall in nominal terms). As a much larger percentage of a much smaller money supply starts chasing the essentials, they will receive relative price support and will therefore be much less affordable than everything else.
And:
You (alan) say that prices have risen for many years. Of course they have, as we have been in an inflationary credit hyper-expansion for 30 years, and prices generally follow changes in the money supply. Prices have, however, fallen where international wage arbitrage has been a major factor, such as for electronics, which illustrates other price drivers at work. (And where nominal prices fall despite inflation, real prices are going through the floor.) These confounding factors are one reason we use our clear and precise definition of inflation. To do otherwise takes all the explanatory and predictive value out of the concept, which suits the powers that be perfectly well by the way. They don’t really want people to understand the system.
And:
It is not TAE that has co-opted the term inflation. We are simply using the traditional definition, and the one it clearly make sense to use if one wants to actually understand what is going on. Many others use the same definition for the same reason. The alternative is confusion that leads to widespread ignorance as to the situation we are facing. It is that ignorance we are trying to combat. The definition underpinning discussions here will remain the same.

Inflation is an increase in the supply of money relative to goods and services. Deflation is a decrease in supply of money relative to goods and services. ‘Stagflation’, is ‘Inflation’ (money supply increase) without any concomitant growth in GDP, and a relatively high unemployment rate. It resulted when banks increased the money supply to counter the recession bought on by the 1970s oil crisis. Most neo-classical economists cannot explain what happened because their theories do not work – read Steven Keen’s “Debunking Economics” to see why.
As Stoneleigh says:

Keeping terminology clear is important to presenting a consistent argument that all discussion participants can understand. Otherwise we end up talking past each other and appearing to disagree while we are actually describing the same dynamic.

IMHO price ‘inflation’/‘deflation’ is a non-sense term used by the media to obfuscate and dumb down the reality of what is actually happening (and I have been guilty of thinking this way myself before I clearly understood what the concepts meant). It’s a version of Orwellian double speak, and more ominously of ‘double think’ “the act of simultaneously accepting two mutually contradictory beliefs as correct”:

“To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in both of them, to use logic against logic, to repudiate morality while laying claim to it, to believe that democracy was impossible and that the Party was the guardian of democracy, to forget, whatever it was necessary to forget, then to draw it back into memory again at the moment when it was needed, and then promptly to forget it again, and above all, to apply the same process to the process itself – that was the ultimate subtlety; consciously to induce unconsciousness, and then, once again, to become unconscious of the act of hypnosis you had just performed. Even to understand the word ‘doublethink’ involved the use of doublethink.”
“ The power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them… To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just as long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies – all this is indispensably necessary. Even in using the word doublethink it is necessary to exercise doublethink. For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth.”

‘Prices’ go up and they go down, dependant upon what people will ‘pay’ or what the seller thinks they will pay. They do not inflate or deflate, they are results not causes.

Don’t get me wrong, I am learning about all this stuff too, but it is important to hammer out the key concepts clearly and concisely. Other wise its double think and speak time… :dry:

L,
Sid.

[gurusid]

Hi Jal,

Somehow, the saying

“KNOWLEDGE IS POWER”

does not seem to apply to this choir or to any other ancient choir.

IMHO, that’s because the term ‘Knowledge is Power’, depending upon the context, is both an oxymoron and a category error… 😆

L,
Sid.

[gurusid]

Hi Dave,

Ahh, food and ‘oil’:

The thing that stunned me was the closeness of the correlation. For you math geeks, the correlation coefficient of the two data sets is 0.93!

The next thing that’s fascinating is that changes in the Food Price Index appear to lead changes in the price of oil by a few months. Since food prices don’t drive oil prices as far as I know, this implies that they are both responding to the same underlying situation, but that food prices are a more sensitive indicator.

The last thing that I noticed is the behaviour of food and oil prices in the last six months. The sharp rise in food prices is being noticed in the media now, but the graph hints that the story is just beginning.

The key could be here: “Since food prices don’t drive oil prices as far as I know” actually with the rise of bio-fuels in the form of corn ethanol, there is an even greater link perhaps – oil price goes up, food price goes up so does the ‘bio’fuel price leading to higher fuel price (not ‘oil’ price) – but I’ll bet any correlation is down to speculators hedging their bets. It might be that oil inventories have longer lead times than food inventories and so betting on prices feeds through quicker – who knows? Definitely ‘some’ sort of correlation. :woohoo:

Wait until there’s real scarcity, then we’ll see some ‘price shocks:
Energy used to produce food:

When the last tree has been cut down, the last fish caught, the last river poisoned, only then will we realize that one cannot eat money.

…or oil! :sick:

Though in the search for ‘truth’ I prefer perhaps the ‘original’ (?) version:

Greenpeace helped to popularize this expression in the 1980s, but the earliest instance located by QI was in a collection of essays published in 1972 titled “Who is the Chairman of This Meeting?”

A chapter called “Conversations with North American Indians” contained comments made by Alanis Obomsawin who was described as “an Abenaki from the Odanak reserve, seventy odd miles northeast of Montreal.” (The book uses the spelling Obomosawin.) Obomsawin employed a version of the saying while speaking with the chapter author Ted Poole. [AOTP]:

Canada, the most affluent of countries, operates on a depletion economy which leaves destruction in its wake. Your people are driven by a terrible sense of deficiency. When the last tree is cut, the last fish is caught, and the last river is polluted; when to breathe the air is sickening, you will realize, too late, that wealth is not in bank accounts and that you can’t eat money.

In later years Obomsawin became famous as an award-winning documentary filmmaker based in Canada.

:whistle:

L,
Sid.

[gurusid]

Hi illarghi

the lazy sloppy “journalism” in the international press

Just as I thought, the propaganda machine has gone into overdrive… Pizza spring and Grillo warfare here we come…

L,
Sid.

[gurusid]

Hi Trivium,

Careful of preaching to the choir, the choir is well aware of the score…

As for functional illiteracy:

Ed West in the Telegraph:
One in five Brits is functionally illiterate – and public schoolboys like Nick Clegg will keep it that way
Back in the days when I used to work at Nuts magazine, the bosses brought in a sort of marketing guru during the first few weeks to help with struggling sales.

After presenting us with the amazing revelation that “men like breasts” (for which IPC paid him a handsome amount of money) he also told us to reduce our typical story length from 400 to 150 words because, as he explained, “a quarter of British men are functionally illiterate”.

Within weeks we were selling hundreds of thousands.

As John Taylor Gatto says:

“…‘How will they learn to read?’ you ask, and my answer is ‘Remember the lessons of Massachusetts.’ When children are given whole lives instead of age-graded ones in cellblocks, they learn to read, write, and do arithmetic with ease, if those things make sense in the kind of life that unfolds around them.”

“It’s absurd and anti-life to be part of a system that compels you to sit in confinement with people of exactly the same age and social class. That system effectively cuts you off from the immense diversity of life and the synergy of variety; indeed it cuts you off from your own past and future, sealing you in a continuous present much the same way television does…”

“Whatever an education is, it should make you a unique individual, not a conformist; it should furnish you with an original spirit with which to tackle the big challenges; it should allow you to find values which will be your road map through life; it should make you spiritually rich, a person who loves whatever you are doing, wherever you are, whomever you are with; it should teach you what is important, how to live and how to die.”

– John Taylor Gatto

Here’s Derrick Jenson quoting Jack D Forbes on the ‘insanity’ of it all:

Now, were Columbus and his fellow European exploiters simply “greedy” men whose “ethics” were such as to allow for mass slaughter and genocide? I shall argue that Columbus was a wétiko, that he was mentally ill or insane, the carrier of a terribly contagious psychological disease, the wétiko psychosis. The Native people he described were, on the other hand, sane people with a healthy state of mind. Sanity or healthy normality among humans and other living creatures involves a respect for other forms of life and other individuals, as I have described earlier. I believe that is the way people have lived (and should live).

The wétiko psychosis, and the problems it creates, have inspired many resistance movements and efforts at reform or revolution. Unfortunately, most of these efforts have failed because they have never diagnosed the wétiko as an insane person whose disease is extremely contagious.

Jack D. Forbes

Unfortunately most of the infecting takes place in the schools…

L,
Sid.

[gurusid]

Hi Folks,

I posted this elsewhere a while back, but thought it pertinent in the current discussion about politics:

John Taylor Gatto on trust, competence and ancient Athens:

For a long time, for instance, classical Athens distributed its most responsible public positions by lottery: army generalships, water supply, everything. The implications are awesome— trust in everyone’s competence was assumed; it was their version of universal driving. Professionals existed but did not make key decisions; they were only technicians, never well regarded because prevailing opinion held that technicians had enslaved their own minds. Anyone worthy of citizenship was expected to be able to think clearly and to welcome great responsibility. As you reflect on this, remember our own unvoiced assumption that anyone can guide a ton of metal travelling at high speed with three sticks of dynamite sloshing around in its tanks.

When we ask what kind of schooling was behind this brilliant society which has enchanted the centuries ever since, any honest reply can be carried in one word: None. After writing a book searching for the hidden genius of Greece in its schools, Kenneth Freeman concluded his unique study The Schools of Hellas in 1907 with this summary, “There were no schools in Hellas.” No place boys and girls spent their youth attending continuous instruction under command of strangers. Indeed, nobody did homework in the modern sense; none could be located on standardized tests. The tests that mattered came in living, striving to meet ideals that local tradition imposed. The word sköle itself means leisure, leisure in a formal garden to think and reflect. Plato in The Laws is the first to refer to school as learned discussion.

Of course one thing that would change the whole shebang is to decentralise the whole political process creating a network/nodal structure rather than hierarchical pyramid. This helps to build a more sustainable community structure as well as giving back autonomy to local regions to do what is most suitable in that region and to local needs. Its similar in some respects to the polycentrism being developed in Finland. These structures tend to be inherently more resilient, and have existed traditionally all over the world such as the Haudenosaunee (Six Nations Confederacy) was founded over 1,000 years ago, and ironically the ‘Mafia’ which has its root in feudalism prior to the annex of Sicily in 1860:

The ‘mafia’ is generally thought of as an Italian secret crime society, but the origins of the Mafia start way before the onset of automatic guns and cocaine. The Mafia began as a way of life: a way to protect one’s family and loved ones from the injustice of the government.

.

Social entrepreneur and Chiarman of the Schumacher society, Herbert Girardet talks about sustainable cities and the democratic process:

Herbert Girardet: The self-sufficient city

The characteristic of a truly sustainable city is, first and foremost, that it powers itself entirely by means of renewable energy systems. Herbert Girardet encourages us to make a quick switch to renewable energy to power our houses, our urban transport systems and our daily way of life.
…
Another important issue is not just the economics and the environmental aspects of sustainability but also what one might call cultural sustainability. It is critically important to have the flow of ideas and to include the way people think into city planning. Decisions affect our daily lives.

One of the big problems in modern democracies is that we are only asked to manifest our views every four-five years when an election takes place. But, in a world where sustainability and concern about damaging the world fatally is becoming such a big issue, it is of critical importance to voice our views much more actively today and to use them in decision-making.

For instance, in the Brazilian city of Porto Alegre the city government decided to involve the general public in the budget setting process. People started considering what the money should be spent on. On better schools, better transport systems, playgrounds and so on. This was a creative process where everyone was asked to participate with their views and ideas on how to do this. By way of process Porto Alegre has become a dynamic city. Suddenly people think about these issues on a daily basis.
…
In our present world, particularly in Europe, we take the unlimited access to food for granted. But food supply is becoming a big problem.

One example of a remarkable development is the urban agriculture of Havana in Cuba. When the Soviet Union collapsed in ’89, trade stopped and they had to come up with new ways of feeding their cities. They turned unused land within the city into little farms. A response to a crisis situation turned into new opportunities to create a high degree of food self-sufficiency. When you go to Havana today the whole city is covered with small cooperative farms that are cultivated by people from surrounding apartment buildings. Tens of thousands of hectares of land within the city are now turned over to growing crops for the local people.

You can find similar things in Dar Es Salaam in Tanzania, which has similar urban agriculture projects, but also Accra in Ghana and in many Chinese cities. Urban agriculture is a very important part of the future of cities.

After all what do people really need:

To help focus our discussion we have taken a provisional definition of a sustainable city from Herbert Girardet. By city he is actually talking about all significant human settlements.

A ‘sustainable city’ is organized so as to enable all its citizens to meet their own needs and to enhance their well-being without damaging the natural world or endangering the living conditions of other people, now or in the future. (Girardet 1999: 13)

This definition has a number of things going for it. It places people and their long term needs at the centre. These include:

Good quality air and water, health food and good housing.

Good quality education, a vibrant culture, good health care, satisfying employment or occupations and a sharing of wealth.

Safety in public places, equal opportunities, freedom of expression and catering for the needs of the young, the old and the disabled. (op. cit.)

This is clearly a greener, and more inclusive approach to sustainability than exists within the current policies of most countries (see below). It looks to the environment and to economics and to social relationships and social justice. As such it is a more hopeful vision – and this, we believe, is vital to education and community development.

The only ‘national’ policy you need is to let the locals get on with it, but of course that would mean the death of the beast*, and I doubt it will go without a fight…

L,
Sid.
* corrupt system of governance

[gurusid]

Hi Oilobserver,

It depends what sort of biology you are studying. Definitely do what Illarghi suggests; this site is one of the best in terms of ‘big picture’ analysis. The recent primer guide is probably a good place to start.

What do young people (like me) have to do in order to ease the transition from our current system into a sustainable one?

Well that really is a tough one. As you don’t (I assume) have much wealth yet, it is going to be a case of investing in yourself. Your biology background is a good start as this can be useful in many area such as medicine, but especially as the sustainable growing of food is going to be a key issue going forward. Check out these links:

Masanobu Fukuoka link:
https://www.onestrawrevolution.net/One_Straw_Revolution/One-Straw_Revolution.html

If you can get a copy of his “One Straw Revolution”; get it and read it, also his “Natural Farming” though this one is harder to get. This man was a ‘scientist’ with the Japanese agricultural bureau before abandoning this approach to discover how to truly ‘work with nature’. His approach of ‘do nothing’ farming is truly remarkable in both its simplicity and the yields which were more than modern practices with machinery and fertilizers and pesticides could produce.

Sepp Holzer:
https://www.krameterhof.at/en/
Another remarkable pioneer, his book “Rebel Farmer” and his ‘Permaculture’ book are highly recommended.

Robert Hart:
https://www.naturewise.org.uk/page.cfm?pageid=nw-forest
&
https://www.pfaf.org/user/cmspage.aspx?pageid=93
Again his book “Forest Gardening”, and the pamphlet “The Forest Garden” describe a sustainable perennial garden of fruit and vegetables that can provide for a very large part of ones diet.

The ‘Soil Food Web’ is something that should interest any biologist interested in sustainability and growing food, there is lots on the internet though you will have to dig for it (or not – digging is very destructive to this ‘web of life’):
https://www.ecoversity.org/archives/soil_ecology.pdf

Along these lines the book “Teaming with Microbes” is also an eye opener:
https://teamingwithmicrobes.com/home/

And Paul Stamets’ “Mycelium Running” is also a must:
https://www.fungi.com/about-paul-stamets.html

The key thing to realise is how much has been discovered on the way that nature really works, and also how much more there is needed to be discovered as we move away from the dogmatic mechanistic reductionist paradigm towards a more wholistic symbiotic one.

Finally on ‘education’ in general, check out John Taylor Gatto:
https://www.johntaylorgatto.com/

Morpheus: I’m trying to free your mind, Neo. But I can only show you the door. You’re the one that has to walk through it.

L,
Sid.

[gurusid]

Hi Illarghi,

On the depression and child poverty in America, for those that can get it, check out this film: This World – America’s Poor Kids

It supports your reduction of per capita square footage of living space (families crammed into one room having previously lived in a house), and accommodation based upon what people can afford, from low rent to no rent and the social consequences for all concerned, especially the children. Heart wrenching in places…

The Director Jezza Neuman’s blog is very insightful too.

Over half a million more kids in poverty since 2007 and its getting worse. Says a lot about the true ‘state of the Nation’…

L,
Sid.

[gurusid]

Hi folks,

Pipefit:

So with such a low fertility rate, once emigration gets going, population is going to tank hard, and the remnants of the economy tank harder.

In the UK net immigration is boosting population as this report by Rosamund McDougall, Co-chair of the Optimum Population Trust 2002-2005 and joint Policy Director 2006-2009:

Britons are marrying later in life, having children later in life, and dying later too – affecting the number of deaths each year. With expected increasing life expectancy, boys born in 2005-7 could expect to live to the age of 88.1 years and girls
to 91.5 years. Men aged 65 in 2004-6 could expect to live another 16.9 years and women 19.9 years, which contributes to the Ageing of the UK population. Births have exceeded deaths every year since 1901, except in 1976. But uncomfortable though it has been to say so, the main cause of UK population growth remains high net inward migration flows and the effects of this on the number of births. “Of the 5.6 million natural increase projected between 2008 and 2033,” reported the ONS in its 2008-based Population Projections, “only 3.3 million would occur if net migration were zero (at each and every age)…Thus just over two-thirds of the projected increase in the population over the period 2008 to 2033 is either directly or indirectly due to migration.” Of this, 45 per cent is directly attributable and 23 per cent indirectly.

Annual population growth has quadrupled since the 1970s. Continued growth at the officially projected rate would involve adding a population of nearly 10 million – more than London’s – to the UK by 2033, with all its needs for additional housing,
energy and power supplies, reservoirs, schools, hospitals, transport, shops, waste disposal, prisons – and all its impacts in the form of waste and emissions. Those who argue for population growth will not answer the question of what they think is an environmentally sustainable level, nor at what level they believe growth should stop. Our numbers cannot grow for ever.

Also Nassim:

It has always been my contention that when women have few babies – let’s face it, they make the decision – it is a sign of declining expectations. The fact that this decline – in native European women – has been so great over the past few decades is highly significant, IMHO.

In the UK, the fertility of native-born women is significantly less than that of other women (1.89 versus 2.28)

Women only have that choice when the culture allows it, and also where they are educated and have control over their lives. While the social support for having children has been blamed for the high level of teenage unmarried mothers for instance (recent data shows a decline), there are many other factors such as social deprivation/isolation, peer pressure, male sexual dominance in those communities and low levels of education (education that has excluded and dumbed them down). Also the religious/cultural is probably still the biggest influence; the secularity of ‘western women’ means they have access to contraception, which combined with education and sexual equality suggests that they have the most choice over having children. While Catholicism still preaches abstinence from contraception, their birth numbers are not as high as they used to be, and the scares over the birth rate of Islamic families in the UK are down to demographics: these imigrants tend to come from Pakistan and Bangladesh, which have traditions of large families (as seen in Nassim’s link above), and first generation immigrants tend to keep this tradition, so boosting migrant community numbers, though second and further generations tend to become more secularised and adopt the ways of the country they were born into. Coupled with shifting demographics of people living longer, and one can see that population dynamics is a complex thing.

Also, population growth has always been linked to the economic ideal of a never ending ‘growth economy’ which expresses itself in extreme exploitation of both the planet and its inhabitants of all species.

However if humans are to live sustainably upon the planet, then a smaller (much smaller) population needs to be aimed for over the coming centuries, other wise long-term depletion of soil, water and mineral resources will do it for us, and in the process probably kill off most of the other life on the planet too… Either that or we all learn to live on the same resources as the average Indian, and somehow I don’t see that happening in a hurry:

L,
Sid.

[gurusid]

Hi Dave,

Interesting point about the stage of pay down/bailout of Irish debt (posted here about it yesterday), especially in the commercial sector, that further explains why they have cancelled the ‘state guarantee’ for deposits over €100,000:

Ireland to remove bank deposit guarantee from end-March
DUBLIN (Reuters) – Ireland (OTC BB: IRLD – news) will remove a state guarantee on bank deposits next month to help ease pressure on loss-making lenders and move the country further towards exiting its EU/IMF bailout, finance minister Michael Noonan said.

Ireland’s almost fully state-owned banks, whose rescue cost the equivalent of 40 percent of annual economic output, have had widening losses partly because of fees they had to pay for the guarantee, and they have been clamouring for its removal for months.
…
The removal of the guarantee will not impact the vast majority of bank customers because deposits over 100,000 euros are covered by a separate guarantee which has been in operation in Ireland since 1995.

The Eligible Liabilities Guarantee (ELG) scheme guaranteed deposits over 100,000 euros in case banks got into trouble. Lenders had to pay a fee to the government for the guarantee, which cost the country’s three remaining domestic banks 1.1 billion euros last year.

And it also points to a ‘get it while you can’ attitude on mortgage repayments:

Trackers don’t track and fixes move: The truth about mortgage deals
The Bank of Ireland is about to increase the cost of its tracker mortgages, despite the base rate not increasing, but is your mortgage rate safe?
Thousands of Bank of Ireland mortgage customers are to be hit with higher repayment costs on their tracker mortgages, whether the Bank of England Base rate changes or not.

The lender has announced rate hikes to take effect from May, seeing rates for 13,500 customers on base rate tracker deals double.

The changes mean that a buy-to-let mortgage customer on a typical interest rate of 2.25% will see their rate climb to 4.99% from May 1.

Residential customers will see increases introduced in two stages: 2.49% plus base rate will take effect from May 1, changing again to base rate plus 3.99% on October 1, jumping to an overall rate of 4.49% if the base rate stays at 0.5%.

That is they seek to reap as much flesh from the loans before they are paid off or defaulted upon, though the rate rise might prove very counter productive if many start to default earlier on those mortgages…

L,
Sid.

[gurusid]

Hi Skip,

The same goes for the UK:
Where in some places you can’t sell property at all.

Going forward there is likely to be an increase in this very ‘localised’ type of situation, especially as benefits are cut, and work remains non-existent.

The same for the US, Canada, and the UK, only here we turn it into a business…

L,
Sid.

[gurusid]

Hi Nassim,

Well, after all said and done, an “Englishman’s home is his castle” n’est pas? Such is the power of propaganda and social norms. That and the fact that decent affordable housing for rent has always been problematic in the UK due to the feudal class system of serfs and lords and the dehumanisation by each party by the other. So the serfs (latterly working class) saw the upper class as greedy morons; the upper class saw the poor as ignorant wretches. (Noblesse Oblige, if it ever existed was killed off with the French revolution.) Thus the rise of the slum landlord, both then and now. It was only with the rise of socialism in the twentieth century that saw a brief respite with the ‘homes for heroes’ and slum clearances, which worked for a while (in the inter war years) till the elite saw again a way to make a quick buck with cheap poor quality development rolled out across the land in the sixties and seventies. Couple with bad government planning and the destruction of existing communities it was a recipe for disaster. Then came neo-liberalism in the 1980’s and the buy your own council house bonanza (though that right had in fact existed for quite a while already), which saw lucrative gains for those fortunate enough to live in a ‘nice’ area, and total loses for those on sink estates.

The British model of renting and the whole attitude is summed up in that FT article:

By Ed Hammond, FT. March 1, 2013 7:16 pm
“Britain’s inability to wean itself off home ownership is perplexing. Every other large European nation has managed to foster a sensible market for rented housing alongside traditional owner-occupation. From the sprawling ex-industrial workers’ estates of West Germany, now leased out on 30-year terms, to Switzerland’s luxury housing complexes, renting is a professionalised mass-market phenomenon. In those two countries, half and two-thirds, respectively, of all households rent. In the US, too, renting, both short- and long-term, is – certainly within the country’s metropolises – the norm.

In contrast, renting has never been considered a “grown-up” option in Britain. Rather, it is still seen, predominantly, as a stopgap between parental nest and home ownership. This view of renting as a dissolute middle ground has stunted the growth of a functional market. The country is the poorer for it. Where continental Europeans have an efficient rental market stewarded by responsible and, crucially, accountable institutional landlords, Britons have buy-to-let: the opportunistic love child of Dickensian skulduggery and pointy-shoed speculation.

The British rental model, if it can rightfully be called that, is primarily a way for the landlord to siphon some cash from his investment while waiting for the market to inflate enough to flip it. In this lies a big part of the problem. If the homeowner is renting only as a passing measure, the uncertainty inherent for any tenant makes it impossible to consider it as a realistic long-term option any more than they might a friendship with a lion.”

Thus status in the caste/class system is paramount:

A firm demonstration of one’s importance in the world, as my poker companions showed, often matters more than quietly playing the hand that makes most financial sense.

Of course that doesn’t mean that they are actually that ‘sharp’:

Mortgage borrowers crippled by foreign currency loans
By Jessica Winch | Telegraph – Mon, Feb 25, 2013 09:40 GMT

British home owners who took out foreign currency mortgages have been badly hit by the strong appreciation of the Japanese yen and now face crippling debts.
…
“The key reason to take out a foreign currency mortgage should be to take a view on exchange rates, in particular if one expects sterling to improve against the currency in which the mortgage is denominated. Too many people took out these loans simply because the interest rate was lower.”
In 2004, yen mortgage rates were around 1pc, while UK rates were around 5pc.
…
However, the risk with a foreign currency mortgage is that if sterling falls in value against the foreign currency, the monthly repayments go up in sterling terms and more importantly the total amount of the debt in sterling also rises.
…
The rising level of debt meant that borrowers had to stump up more collateral, such as cash or savings, or the bank could switch their mortgage back into sterling to avoid further losses.
Some of the affected borrowers said they were not fully warned of the risks. Others also discovered they were not covered by UK financial services jurisdiction.
“If individuals do not understand the risks associated with borrowing in foreign currency, then it’s incredibly dangerous to do so.”
The Sunday Telegraph was initially contacted by Paul Coates, 51, an ex-financial agent who works in Singapore as a property agent. He had a yen mortgage with RBS (LSE: RBS.L – news) switched back to sterling in December 2008, which increased the size of his loan by 50pc to £302,688.
Four years later, he is facing legal action in the UK to repossess the property in north Wales, which Mr Coates had bought for his mother.
He said: “I have been very stressed about this for four years and it’s very likely I’ll lose my home in the UK.
“I expected currency risks but what I did not understand and what wasn’t made clear to me was that the bank would switch the mortgage the way it did.
“I think they should have had a stop-loss arrangement to convert the loan at an earlier stage.”
He had fallen behind with his mortgage repayments as he was out of work for a year when the financial crisis hit.
An RBS International spokesman said: “Due to client confidentiality, we are not able to comment on the specifics of this matter.”
David Lewnes, a retired advertising executive, went to live in Singapore nine years ago, after working in east Asia since 1985. He bought a two-bedroom property in east London in 2004 as an investment and was advised to take out a yen mortgage to help reduce the payments on the property.
He took out a mortgage of £345,000 with RBS’s Singapore office following advice from an adviser.
However, the rapid appreciation of the yen from 2007 onwards led to RBS forcing Mr Lewnes to switch his loan back to sterling as the loan exceeded the maximum loan-to-value of 75pc. As a result, his debt increased by 50pc and the total debt of £525,000 exceeded the value of the property.
“While everybody appreciated there was some currency risk, they had no idea of the magnitude of that risk,” Mr Lewnes said. “When the exchange rates started to move the bank should have warned their clients, but they didn’t. They waited until it was a disaster.”
Mr Lewnes has paid down the debt to £450,000 and intends to continue with interest repayments until the loan expires in 2021. He plans to sell the house and use the proceeds to service the debt.
An RBS International spokesman said the bank did provide foreign currency mortgages to clients who requested them in Singapore from 2004 to 2011.

Again hindsight is always 20×20, but as for being a sharpie, I think this shows their edge is somewhat blunted.

But ““When the exchange rates started to move the bank should have warned their clients, but they didn’t.” I mean, didn’t they think to check the exchange rate and set a bail out point themselves? Didn’t they bother to check their mortgage repayments? Seems to me they were perhaps too attached to their ideas of who they were in the world and about how things work. Attachment truly is the source of suffering…

Shed with a bed anyone? Somewhere to store your tulip bulbs I suppose…

L,
Sid.

[gurusid]

Hi folks,

Sorry just couldn’t resist:

This is Money:

‘Super zombie’ households face disaster – even without an increase in loan rates

On top of fears that one million or more ‘zombie households’ face instant insolvency the moment interest rates return to normal comes new research today uncovering a sub-category of ‘super-zombies’.
These specimens of the financially undead are households unable to pay what they owe, even if interest rates stay where they are.

Zombie households: These specimens of the financially undead are unable to pay what they owe, even if interest rates stay where they are.
More than one million households have interest-only mortgage debt totalling £120 billion on which they are currently on course to default.
Some have no investment plan of any sort to pay off the capital sum. About 700,000 mortgages are in this position, with a value owed of about £75 billion.
Some have a plan that on current form will be unable to clear the debt. About 400,000 mortgages fit this description, with a total owed of £45  billion.
The message from today’s report, by research consultancy BDRC Continental and published exclusively by Financial Mail, is that 1.1 million households are in effect hoping for the best.
Not only that, but the option of simply selling the property for a big capital gain is not the tried and trusted solution that it once was, given the subdued state of the UK housing market.
Zombie households are made up of those individuals and families who are barely keeping afloat financially and who would slip beneath the waves were the current level of interest rates – the lowest in more than 300 years – to return to anything like normal.
There are about one million such households, the influential National Institute of Economic and Social Research estimated last year.
Now BDRC’s findings have exposed another, more frightening aspect of the phenomenon.
…
Its survey found only 31 per cent had an investment plan that was on course to clear their debt, while eight per cent of the total either did not know or answer.
Wornell added: ‘Many interest-only borrowers are not engaged with the end-game – what happens when their mortgage term finishes and they have to repay the capital? Everyone with such a mortgage needs a credible repayment plan.’
Elsewhere in the financial graveyard, new figures from R3, the body representing insolvency professionals, has found a rise in the number of people who are paying only the interest on their credit card statements – to 3.4 million against 2.9 million a year ago.
One ray of light is that the total number who are paying only interest on their overdrafts has declined over the same period, from 2.4 million to 2.2 million.
But figures last month from the Office for National Statistics showed the proportion of people who said they would be unable to meet an unexpected but unavoidable expense had risen from one in four in 2007 – at the start of the economic downturn – to two in five today. And a detailed Business Department report from 2011 found 23 per cent of the adult population either ‘constantly struggling’ or ‘falling behind with bills and commitments’.
The Bank of England has expressed concern about the effect of large household debts on consumers’ willingness to spend, and City regulator Martin Wheatley, head of the new Financial Conduct Authority, described the £120 billion of unfunded interest-only mortgages as ‘a ticking time-bomb’.

As I just posted elsewhere, and Stoneleigh and Illarghi have been saying, things are about to get very interesting… as in historically interesting – like 300 years since interest rates were this low, oh and the South Sea Bubble burst about then as well, oh and the Mississippi bubble…

Dawn of the Dead anyone?

L,
Sid.

[gurusid]

Hi Folks,

Stoneleigh wrote:
Europe is indeed tipping over the edge again, into phase II of the credit crunch. For those minded to gamble with something they can afford to lose, shorting would be the way to go at this point IMO (bearing in mind that all gambling is risky, that governments can change the rules so that you may not be able collect on having been right, and that there will be far more ways to lose your shirt than to make a lot of money, even if you’re right about the trend).

The unnaturally low level of volatility, combined with strong insider selling against a backdrop of optimism verging on euphoria, is a strong red flag warning. deflation is a very powerful force, and can take hold very quickly. When it does it very rapidly becomes a self-fulfilling prophecy.

Watch Europe as it’s in the vanguard of deflation, and in some countries acute liquidity crunch already. This is where the rest of us are headed.

And so it begins (again and in earnest this time):

Bank of England mulls negative interest rates

Paul Tucker, deputy governor for financial stability, raised the possibility in front of MPs after saying the Bank could be doing more to help the economy, including measures to boost lending to small businesses.

Negative interest rates would mean high street lenders paying the central bank to place their money with it. The move would be intended to encourage more lending to businesses and households. But it could also lead to a reduction in the interest paid on individual savers’ accounts held with high street banks.

The Bank has considered cutting rates from their record low of 0.5pc in the past but decided against doing so for fear of bankrupting a number of smaller building societies. To get round the problem, the Bank is reviewing a possible change to its remit so it can set a separate interest rate specifically for excess deposits placed by financial institutions at the central bank.
…
Other central banks, such as the European Central Bank, have two rates – a base rate and a deposit rate. In the UK, Bank sources said, a new so-called deposit rate could be charged on funds placed with the central bank above a certain level. For example, the first £1bn of banks’ money held could be charged at the existing base rate, and the rest at the new ‘deposit rate’.

So in other words the banks can no longer get ‘cash on their cash’, albeit at the paltry 0.5%, but rather are effectively paying the BoE to hold their money for them so forcing out into the ‘market’.

But maybe they don’t want to lend due to all the ‘risk’ that they suddenly see out there, and so will find other ways to get their pound of flesh:

Couple unable to pay its interest-only mortgage ‘bullied and intimidated’ by government agency

By August 2012, with under two years to run, UKAR said that monthly payments of £2,982 were due – and these were now being added to the Jacksons’ total mortgage in the form of arrears.
Arrears on their account today are £15,000 and increasing at the rate of £2,700 a month. When the property is eventually sold, UKAR will claim these arrears along with the original mortgage balance.
The arrears could, within less than a year, wipe out all the equity in the property. The Jacksons say UKAR is effectively enforcing a brutal mortgage arrears policy to obtain a far greater part of the property’s eventual sale value.
‘We are sick with worry over these arrears,’ the Jacksons say. ‘We accept the house will have to be sold to pay the outstanding mortgage but all we ask is that we are allowed to pay interest only for the rest of the term, which we can afford to do.’
UKAR admits that its handling of the Jacksons’ case has been poor in some minor respects, but maintains it is right to demand full monthly repayments and, if these are not met, to add them to the total owed.

And even if you can pay the mortgage now, you may not be able to for much longer:

Trackers don’t track and fixes move: The truth about mortgage deals
The Bank of Ireland is about to increase the cost of its tracker mortgages, despite the base rate not increasing, but is your mortgage rate safe?
Thousands of Bank of Ireland mortgage customers are to be hit with higher repayment costs on their tracker mortgages, whether the Bank of England Base rate changes or not.

The lender has announced rate hikes to take effect from May, seeing rates for 13,500 customers on base rate tracker deals double.

The changes mean that a buy-to-let mortgage customer on a typical interest rate of 2.25% will see their rate climb to 4.99% from May 1.

Residential customers will see increases introduced in two stages: 2.49% plus base rate will take effect from May 1, changing again to base rate plus 3.99% on October 1, jumping to an overall rate of 4.49% if the base rate stays at 0.5%.

I guess they must think that the ’greedy landlords’ are putting up their rents deliberately to cash in a make money, but while there are many who are profiteering – usually those with little in the way of debt and or who bought before the boom, the fact is being a landlord does still (just) have its obligations, such as providing appliance and services safety certificates and maintaining the property to a reasonable standard. That costs money, and those costs are also going up. Also given that many bought on ‘interest only’ mortgages, at some stage they might find themselves in negative equity. As TAE have often said, and even despite increasing rents, the risk to the landlord is still greater.

Maybe that is why the FSA are targeting Banks who ‘game’ their liabilities:

Banks wary as FSA targets “gaming” of risk weights
* UK tells banks to take more conservative view of loan risk

* Bankers see risk to economy and models from standardisation

By Steve Slater
LONDON, Feb 25 (Reuters) – Britain’s banks could need tens of billions of pounds more capital as part of a crackdown on internal risk models that are deterring investors and undermining efforts to shield the global financial system from future shocks.

The Financial Services Authority has been assessing how lenders calculate the riskiness of their mortgages and other loans to make sure they are setting aside enough money to cover potential losses.

The FSA has stepped up that scrutiny in the past two months, banking sources said, as part of a wider trend in Europe towards standardising guidelines on how banks should calculate the riskiness of loans amid concern some are gaming their internal models to flatter their financial health.
…
To meet the new rules, lenders are cutting their risk-weighted assets (RWAs) through disposals, by cutting risky businesses, and hedging. They are also tinkering with their internal models to make their holdings appear less risky, undermining the credibility of Basel III.
…
A DELICATE ISSUE

The Bank of England’s Financial Policy Committee (FPC), which looks out for trouble spots in the financial system, said in November the way that banks calculated RWAs was too “complex and opaque” and needed fixing. The FSA was told to assess the problem and report back for a March 19 FPC meeting.

No wonder then that some have started to remove ‘insurance’ cover for certain ‘liabilities’:

Ireland to remove bank deposit guarantee from end-March

DUBLIN (Reuters) – Ireland (OTC BB: IRLD – news) will remove a state guarantee on bank deposits next month to help ease pressure on loss-making lenders and move the country further towards exiting its EU/IMF bailout, finance minister Michael Noonan said.

Ireland’s almost fully state-owned banks, whose rescue cost the equivalent of 40 percent of annual economic output, have had widening losses partly because of fees they had to pay for the guarantee, and they have been clamouring for its removal for months.
…
The removal of the guarantee will not impact the vast majority of bank customers because deposits over 100,000 euros are covered by a separate guarantee which has been in operation in Ireland since 1995.

The Eligible Liabilities Guarantee (ELG) scheme guaranteed deposits over 100,000 euros in case banks got into trouble. Lenders had to pay a fee to the government for the guarantee, which cost the country’s three remaining domestic banks 1.1 billion euros last year.

So between the hard place (negative interest on their capital) and the rock (inherent risk re-emerging and no way to cover it up) it looks like the future of lending is getting decidedly Hobsonian…

and deflationary. Has the FIRE finally gone out?

L,
Sid.

[gurusid]

Hi again,

And here is a taste of that hell:

How GMOs Unleashed a Pesticide Gusher

GMOs have added more than four pounds of herbicides to US farm fields for every pound of insecticide they’ve taken away.
The chemical war against pests will likely get yet another boost from the failure of Roundup. As I’ve reported before, GMO seed giants Monsanto and Dow are preparing to roll out seeds designed to resist both Roundup and older herbicides including 2,4-D, the less toxic half of the formulation that made up the infamous Vietnam War defoliant Agent Orange. The industry insists that weeds won’t develop resistance to the new products. But last year, a group of Penn State weed scientists published a paper warning that the new products are “likely to increase the severity of resistant weeds.” Indeed, 2,4-D-resistant weeds have already been documented in Nebraska.

In his paper, Benbrook created a model for how a 2,4-D-resistant corn product, if released in 2013, would affect 2,4-D use. One of the actual benefits of Roundup Ready technology is that it has until recently made 2,4-D almost obsolete—its use on corn crops went from 4.4 million pounds in 1995 to 2.4 million in 2000. It hovered at that level for a while before jumping to 3.3 million pounds in 2010, as farmers increasingly resorted to it to attack Roundup-resistant weeds. If 2,4-D resistant corn is widely adopted, Benbrook projects, making what he calls “conservative” assumptions, 2,4-D use will hit 103.4 million pounds on corn fields per year by 2019. Overall, Benbrook projects a 30-fold increase in 2,4-D applied between 2000 and 2019. Because 2,4-D is so toxic, the result will not be pretty. Here’s Benbrook’s study:

Such a dramatic increase could pose heightened risk of birth defects and other reproductive problems, more severe impacts on aquatic ecosystems, and more frequent instances of off-target movement and damage to nearby crops and plants.

The only question on GMOs and pesticide use Benbrook’s paper leaves open is: When will Monsanto correct the absurd claim on its website that its highly lucrative technology has allowed farmers to cut back on herbicides?”

The answer is never as that is the real business of Monsanto and companies like it, selling toxic chemicals. The bigger the lie, the bigger the profits… :dry:

L,
Sid.

[gurusid]

Hi Illarghi,

Unfortunately I have found that it is very difficult to explain to people just how nefarious this technology is. Aside from the profiteering and law breaking there are some serious unanswered questions regarding the health implications of GMO, and the scientific basis for their ‘technology’:

Although the body of safety studies on GM foods is quite small, it has verified the concerns expressed by FDA scientists and others.

– The gene inserted into plant DNA may produce a protein that is inherently unhealthy.
– The inserted gene has been found to transfer into human gut bacteria and may even end up in human cellular DNA, where it might produce its protein over the long-term.
– Toxic substances in GM animal feed might bioaccumulate into milk and meat products.
– Farmer and medical reports link GM feed to thousands of sick, sterile, and dead animals.

But there is not a single government safety assessment program in the world that is competent to even identify most of these potential health problems, let alone protect its citizens from the effects.

(that last bit is the ‘missing’ science bit)

Also people have no idea just how crude the current commercial gene modification techniques are as this 2009 report states:

Research led by scientists at Iowa State University’s Plant Sciences Institute has resulted in a process that will make genetic changes in plant genes much more efficient, practical and safe.
…
The breakthrough was developed by David Wright, an associate scientist, and Jeffery Townsend, an assistant scientist, and allows targeted genetic manipulations in plant DNA, which could have a huge impact on plant genetic work in the future.
Until now, when scientists introduced DNA into plants, they would randomly inject that DNA into the plant cell. There was no way of knowing if it was in the right place or if it would work until many resulting plants were tested.

I mean, c’mon, “they would randomly inject that DNA into the plant cell… no way of knowing if it was in the right place or if it would work” and their feeding this sh*t to people I hear you say?

It reminds me of the Radium toothpaste days:

That’s right, radioactive elements were used in all manner of things for due to ‘their curative powers’ – yeah your teeth fell out so it ‘cured’ you of having to brush the damn things!

I guess this one would alleviate the need for a face lift. You’d just peel your skin off yourself.

Ok, ok hindsight is always 20×20, but don’t forget those guys saying it was ‘safe’ and ‘curative’ were some of the top ‘scientists’ of their day:

Marie Currie and her tragic but real scientific experiments that cost her her life.

So is it no wonder that today’s top ‘scientists’ think they are doing ‘gods work’:

The new technique harnesses a natural process called homologous recombination to precisely introduce DNA at a predetermined location in the plant genome through targeted DNA breaks generated by zinc finger nucleases.
This occurs about 1 in 50 attempts and is very efficient compared to unassisted methods that allow the same changes at a rate as low as 1 in 10 million.
“I’ve been working in this field for 29 years, just when we started learning how to modify genes,” said Townsend. “From that day, this was the goal — to actually get the research to the point where you can have homologous recombination. Now, we’ve done it.”
Using this process, a specific gene is located in a living cell, then a break is made in the DNA of that gene. When the cell begins to heal itself, existing DNA can be deleted or modified, or new DNA can be added near the break site. Afterward, the cell carries the genetic change and passes the change on to its offspring.
“It’s like surgery, only on the molecular level,” said Wright. “It’s been known for a long time that you if you make a break in a cell, you can get some DNA into that spot,” said Wright. “It’s just that you have three meters of DNA in a cell if you unwound it. Putting the break where you want it has always been the problem.”

Ok the guy’s good at what he does, but don’t you get the impression he might have been in the lab a bit too long…

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”
– Upton Sinclair

And this was just one random sample of the attitude of technicians, sorry scientists in this field. Actually most so called ‘science’ today is in fact a manipulation of technique and is therefore a technical endeavour done by technicians. Real science involves hypothesising and doing real (i.e. double blind) experiments to check and discover whether the theory is correct, not fudging some data to get a technique approved for commercial use. And this god like hubris has to be seen in the flesh to be believed, and I’ve seen it up close and personal. :ohmy:
But the real crux comes with this:

In addition to the difficulty introducing changes where researchers want them using current methods, government regulations often slow the movement of research from the lab to the field.
Wright and Townsend hope the precision of this technique will speed the regulatory process.
“In the random process, regulators would say, ‘You really don’t know what you’re doing,'” said Townsend. “With this new technology, we can tell them, ‘The genome looks like this, this is exactly the change we want to make.’
“That’s the power of this technology. It makes it (genetic engineering) practical and much safer. It was impractical, and now it is practical.”

“…government regulations often slow the movement of research from the lab to the field.” If only! Of course there is no mention of what happens when these totally untested gene combination get out into the broader environment, yet alone their effects when fed to animals and humans. But then doing ‘gods work’ has so many potential benefits:

There are many applications for this that could allow stunning advances for many crops, according to Wright and Townsend.
For instance, canola is a commodity grown for its oil, just as soybeans. However, after the oils are extracted, soybean meal is sold as feed. Once oils are extracted from canola, the meal has a much lower value as a livestock feed due to several factors, including the presence of the chemical sinapoylcholine, also called sinapine.
The new technique could allow scientists to remove the genes that make sinapine. The result would be a more versatile canola product.
Farmers, especially in the upper Midwest and Canada, would benefit from this new market for canola meal.
plants could benefit as well.
Removing the genes that are responsible for peanut allergies, or removing genes that produce harmful chemicals or anti-nutritionals in other crops are just a few of the immediate crop improvements that Wright and Townsend envision for this technology.

No-one asks whether livestock should be eating canola in the first place, or what might happen if that gene got into other closely related species such as “Turnip, rutabaga, cabbage, Brussels sprouts, mustard, and many other vegetables are related to the two natural canola varieties commonly grown, which are cultivars of Brassica napus and Brassica rapa.” So a good excuse not to eat your broccoli I suppose. :whistle:

Oh and if you want GMO free honey, forget about it! Proof positive this stuff is everywhere… :blink:

Still, look on the bright side, unlike Radium, at least your face won’t fall off…

Byers began taking enormous doses of Radithor, which he believed had greatly improved his health, drinking nearly 1400 bottles. By 1930, when Byers stopped taking the remedy, he had accumulated significant amounts of radium in his bones resulting in the loss of most of his jaw. Byers’ brain was also abscessed and holes were forming in his skull. His death on March 31, 1932 was attributed to “radiation poisoning” using the terminology of the time, but it was due to cancers, not acute radiation syndrome. He is buried in Allegheny Cemetery in Pittsburgh, Pennsylvania, in a lead-lined coffin.

Due to Byers’ prominence, his death received much publicity. The Wall Street Journal ran a headline reading “The Radium Water Worked Fine until His Jaw Came Off” after his death. His illness and eventual death also led to a heightened awareness of the dangers of ingesting radioactive materials, and to the adoption of laws that increased the powers of the FDA.

William Bailey was never tried for Byers’ death, although the Federal Trade Commission issued an order against his business. However this did not stop Bailey from trading in radioactive products. He later founded a new company – “Radium Institute”, in New York – and marketed a radioactive belt-clip, a radioactive paperweight, and a mechanism which made water radioactive.

:sick:

Yes we’ve been here before, many times… Ignorance, corruption, law breaking and the hubris of ‘doing gods work’ are all too human traits as history shows, but the consequences of uncontrolled use of GMOs could lie not in the realm of the gods but those of the damned hellish. 👿

L,
Sid.

[gurusid]

Hi Folks,

He won! (sortof…):

(Reuters) – The outcome of Italy’s national election is still uncertain but what is already clear is that the massive winner is Beppe Grillo, a shaggy haired comedian whose anti-establishment 5-Star movement could well become the country’s largest party.

Markets don’t like it though:

(Reuters) – The Italian stock market fell and state borrowing costs rose on Tuesday as investors took fright at political deadlock after a stunning election that saw a comedian’s protest party lead the poll and no group secure a clear majority in parliament.

The markets ‘no-likey’ and the press isn’t that enamoured:

(Reuters) RECESSION
“It’s a classic result. Typically Italian,” said Roberta Federica, a 36-year-old office worker in Rome. “It means the country is not united. It is an expression of a country that does not work. I knew this would happen.”
Italy’s borrowing costs have come down in recent months, helped by the promise of European Central Bank support but the election result confirmed fears of many European countries that it would not produce a government strong enough to implement effective reforms.

Rather than focus on the possibility of real change, the system just chokes. It remains to be seen how this pans out, will this be the straw that (finally…) breaks the Euro’s back?

(Reuters) – Spain said it was extremely worried about the impact of Italy’s deadlocked election result, warning on Tuesday the deadlock could affect the entire euro zone.
Foreign Minister Jose Manuel Garcia-Margallo said there was a feeling of “extreme concern” over possible movements in bond spreads as a reaction to the results.
“This is a jump to nowhere that does not bode well either for Italy or for Europe,” Garcia-Margallo told journalists on the sidelines of a conference in Madrid.
The Spanish government said it was monitoring the situation, especially the fallout on financial markets as the premium investors demand to hold Spanish 10-year debt rather than the German benchmark jumped to 393 basis points, a level not seen in several weeks, when it emerged a cabinet could be hard to form.

Are we going to see Grillo warfare and a pizza spring? 😆

I expect the propaganda machine to go into overload…

L,
Sid.

[gurusid]

Hi Folks,

Insurers may deny, or seek to reduce, a claim if they can place some, or all, of the responsibility for an accident on to the victim

Unless you’re a wealthy celebrity!

Atkinson, worth a reported £71 million, hit a slippery patch of road near Peterborough in August 2011, he lost control of the F1 and hit a tree – leaving the car’s 6.1-litre engine 20-yards away from the rest of the vehicle. It was the second time Atkinson had crashed his F1, with the actor front-ending it into a Rover Metro in 1999.

Maybe his insurers will sue the tree! I’d love to see his ‘revised’ premium…

Meanwhile the UK gov’t tries to persuade insurers to continue insuring flood prone properties:

Floods Insurance Payouts Top £1bn For 2012.

Nick Starling, ABI’s Director of General Insurance, said: “2012 may have been a record-breaking wet one, but it was business as usual for insurers, who helped thousands of customers recover from the trauma of flooding.

“Flooding is the greatest natural threat facing the UK and the risk is rising so political consensus and commitment on investment in flood defences, sensible planning decisions and working with the insurance industry is essential.”

The figures comes as an agreement between the Government and insurers to ensure cover for high-risk homes is due to expire at the end of June.

The ABI said talks with the Government are ongoing about how affordable premiums in high-risk areas can continue.

But the insurers are set to claw back all those payouts in the form of big premium hikes:

Four of the top five wettest years on record have been since the year 2000 which is putting pressure on the Government and insurers to renew their 10-year deal to provide universal cover for all homes, including those in flood prone areas.

Mohammad Khan, a partner at PricewaterhouseCoopers (PwC), said: “The weather events of 2012 have dented insurers’ profits and will probably lead to renewal premiums rising by up to 5% for those unaffected by the floods and by up to 50% for those flooded.

“The UK floods therefore, have also brought into sharp focus the current standoff between the insurance industry and the Government on the renewal of the Flood Principles – agreement needs to be reached in 2013.”

More like no insurance for those flooded and 50% or more premium hikes on everyone else…

L,
Sid.

[gurusid]

HI Illarghi.

Snap!

L,
Sid.

[gurusid]

Hi Dave,

For instance, if the political class thought that oil prices were rising for monetary reasons, they might consider tightening credit, which wouldn’t really help the situation if oil prices were actually rising because of scarcity and/or resource depletion.

IMHO I see it as differing ‘systems’ reacting. The ‘political’ system which in the UK tends to be very ‘policy’ reactive compared to the say Germany’s more ‘precautionary’ approach, though more recently the Germans have been forced down the reactionary path due to the shear force of circumstance, something which will be much more prevalent as things really start to kick off. Thus in terms of energy, the Germans tended to have a more forward looking precautionary approach with plenty of structured planning, the UK on the other hand with its ridiculous ‘laissez fair’ leave it all to the market approach has only a reactionary response. Thus, instead of doing something about the problem which they knew about years ago which has led to the current looming crisis with fuel bills and supply constraints:

Thus:

– By 2015 the Energy Demand in the UK Could Exceed Supply by 23% at Peak Times
– The Impact of the ‘Real’ Energy Gap on GDP Will be Equivalent to GBP108bn a Year
– GBP3.7k a Year Cost for Every Working Adult In The Country
– Powercuts are Now Just as Likely in the Summer as the Winter
The UK energy gap is much larger and closer than currently being reported, according to a new white paper issued by LogicaCMG, a leading provider of business services to the energy sector. Within ten years the gap could cost UK businesses over GBP108 billion a year.

It’s a good job the Prime Minister is in India he can get to see how a country manages with constant blackouts and power shortages, as that is soon to start happening here in the UK.

The chance of large power cuts – those that hit more than a million homes – will be 300 times more likely by 2015.

The only upside would be if the UK gov’t pushed some of the ‘quantitative easing’ into the power industry to renew the infrastructure. Who knows that might even boost GDP and ‘Growth’.

However the other system of Finance and Investment will put paid to all that by betting, sorry ‘speculating’ on fuel and energy prices, regardless of the actual costs of production. Fuel prices in the UK are set to hit record highs due in part to a falling sterling but also to speculation.

L,
Sid.

[gurusid]

Hi Dave,

One of the very confusing things about this pop is that absolute prices of many things are rising. I believe resource constraints (declining ore grades, oil finds, etc) are a big reason why some prices are increasing. Government support of particular sectors is another reason. It is important to be clear about which prices are going up, which ones are going down, and why. But I believe that over time, the level of credit money in the economy will eventually have a strong influence in the general direction of prices, so that’s the thing to watch.

History rhymes but never repeats? Unlike the 1930s when oil was in a glut due in part to the Texas wildcat strike, today we have an increasing ‘difficulty’ increasing oil and other energy supplies without incurring huge fiscal costs too, yet alone the extra energy needed to find the ‘extra energy’ which decreases the EROEI. And as Ayres and Warr have shown, energy or more specifically ‘work’ (exergy services) is a key (if not the key) driver of economic expansion.

Our understandings and expectations of the world have been shaped by our experience of economic growth. The dynamic stability of that growth has habituated us to what is ‘normal.’ That normal must soon shatter. – David Korowicz

…Since crude oil production has been on an undulating plateau since 2005 while demand has increased (Hirsch et al, 2010), this has put huge upward pressure on the price of oil, and several commentators have drawn the conclusion that these high oil prices signify the end (Heinberg, 2011; Rubin, 2012) or at least the twilight (Alexander, 2011a; 2012a) of economic growth globally. If this is true, we are living at the dawn of a new age, and should be bracing for impact.

We are in a new paradigm: not only has the rug been pulled out from under all the old world theories of perpetual economic growth, but the ground beneath is not there, but way back yonder at the cliff edge we passed over a while back, having been hidden by said rug. All 7 billion of us and counting…

As I have posted elsewhere:

One thing on the three ‘Es’ of Economy, Energy and Environment, is that I suspect we will not get one after the other, but rather one feeding into the others, thus while we currently have an economic crisis, energy is now feeding into that crisis and causing greater disruption. So too as we go further down the road the environmental crisis (here I am referring to things like ocean depletion and pollution, soil erosion, groundwater and aquifer depletion amongst many others never talked about) will feed into the other two and together will form a maelstrom of consequences.

And as Dave said (which could be said of most neo-classical economists):

Honestly it felt like I was listening to a pair of virgin psych grad students having a long and detailed discussion about sex.

Ain’t that the truth! :whistle:

L,
Sid.

[gurusid]

Hi Dave,

Is that a head and shoulders forming in that EU Total credit chart?

Also, on Prof’s Zero Hedge link:

Conclusion

The deflation death spiral is a theoretical description of a situation but it does not describe the reality of human action, for any number of reasons:

1. There is in reality always a diversity of expectations among the public. While some people will expect prices to continue in the same direction, others will form the opposite view. Everyone’s expectations will change not only in response to changes in the data, but taking into account their entire life experience, their own ideas, and their situation.

2. Expectations are not entirely driven by prices. A broad range of things influences our expectations about price.

3. Lower prices are not always sufficient motivation to delay purchases because everyone prefers to have what they want now, rather than later.

4. Expectations of buyers tend to be met by sellers, if not at first, then fairly soon. In some cases, buyers can hold onto their cash for a bit longer, but most businesses have no choice but to sell their inventories at what the buyer will pay. In other cases, buyers may not be able to delay purchases, or may not wish to, and will pay what they must in order to buy.

5. Everyone—buyers and sellers (and every one of us acts in both of these roles at different times)—has expectations not only about consumer prices, but about wages, employment prospects, even asset prices, the economy in general, the progress of our own life, and the future of our family. A coherent plan of saving and spending takes all of these things into account.

6. Expectations can be met. Buyers have a buying price. Even if not known in advance, they know it when they see it posted. Even if they do not know what they plan to buy in the future, a bargain price will be met by buyers.

7. People only need so much cash. Beyond that, they start to look around for either consumption goods, or investments.

This is the outlook form a neo-classical ‘demand-constrained’ economy. However as Steve Keen shows with Janos Kornai’s analysis of a Resource-constrained economy:

The question is the following: what are the constraints limiting efforts at increasing production? […] Constraints are divided into three large groups:

1. Resource constraints: The use of real inputs by production activities cannot exceed the volume of available resources. These are constraints of a physical or technical nature […]
2. Demand constraints: Sale of the product cannot exceed the buyer’s demand at given prices.
3. Budget constraints: Financial expenses of the firm cannot exceed the amount of its initial money stock and of its proceeds from sales.
From Steve Keen, 2011, “Debunking Economics”, Zed Books. (p.114)

So far from the ‘rational actors’ “only needing so much cash” and deciding whether to spend or not, rather as budget constraints for ‘rational actors’ manifest in an absence of credit and lack of work/income, it will come down to a case of what they can afford. And with money in both the form of cash and credit disappearing, together with resource constraints keeping the price of things like energy higher despite falling demand, demand for anything is going to start going off the edge of that cliff. When hunger kicks in it won’t be the latest £7k smart phone they hanker after but the early potato:

{in Greece} We are now seeing on the island the formation of alternative, collective systems of survival where people are trading not on the basis of cash but on the basis of skills sharing and co-operative working. Local trading systems are now up and running both in Karlovassi and Pythagorio. Friends in the south of the island are now harvesting olives in return for oil and wood. Barter systems are emerging. The owner of one of the biggest hotels in Karlovassi was telling me only the other day that he confidently expected to see such activities become increasingly common place on the island as people traded their garden surpluses (chickens, vegetables, etc) for goods and services they could not otherwise secure as they had no cash.

The irony here is that neo-classical economics sees every economic transaction as a form of barter and so does not consider money or debt in their theories.

I can just imagine the neo-classical economist hedge fund manager trying desperately to fit that into their HFT algorithms…

L,
Sid.

[gurusid]

Hi Stoneleigh,

We do need to find a forum format that encourages discussion. My personal preference has always been for combining discussions rather than dividing them. Otherwise one doesn’t reach a critical mass of participants to sustain a discussion.

How would people feel if we ran open threads, like the Drumbeat at The Oil Drum? If they appeared on the front page, say, once a week, they would attract a lot more participants than topics buried in the forum.

If readers have other suggestions, we’re all ears.

IMHO one has to be careful about fixing something that ain’t broke. TOD is something that is quite unique as we all know, and quite prolific. Too much really. TAE is finding its own ‘unique’ niche and that takes time. But the key is to check out the viewing figures, which seem to be pretty healthy given the nature of the material.

Perhaps you could invite some of the commenters to post more in depth articles on their favourite subject matter? That would take pressure off both yourself and Illarghi, and engage some eager energy. Also make that more explicit, as I don’t think that many people realise that they can start up threads, and also where to put them, as the ‘lifeboat’ section is quite deep and hard to navigate – perhaps why ‘a home education journey’ ended up where it did and not in the Education section in the Lifeboat area. BTW how does one comment/start a thread there anyway??? Or am I missing something?

But generally I think the site is extremely valuable and IS working, and there is just so much out there you cannot possibly attempt to have it all on one site or even attempt that – it would fry both your brain and your eyeballs just checking out all the sites!

L,
Sid.

[gurusid]

Hi Folks,

For those that can, this BBC program on French gardens by the veritable Monty Dom is worth checking out, and while watching remembering that France has seen it all before. Especially relevant is the reference to the ‘paysant’ literally one who lives off the land which in France is an honorific, as opposed to the UK where it is a derogatory title:

They maybe broke, but at least some of them will still get to eat…

L,
Sid.

[gurusid]

Hi Folks,

The never ending story continues, with the caveat that the following article does not mention that food prices have fallen to a third of their 1971 ‘value’ due in part to cheaper food, but also to earnings increases:

How house prices have risen 43-fold since 1971
A carton of milk would cost £10 and a roast chicken would be a £51 price tag if food costs had risen in line with house prices.
A carton of milk would set a family back by £10 and a roast chicken would have a £51 price tag if food costs had risen in line with house price increases over the last 40 years, research by Shelter has found.
The charity said that the typical value of a house had increased by just over 43 times since 1971, from £5,632 to £245,319.
If a family’s weekly shop had increased at the same rate, it would now stand at £453, which is six times the actual figure of around £75.
Applying the house price rate of inflation to everyday food and drink items means that a bunch of six bananas would cost £8.47, a four-pint carton of milk would cost £10.45 and a leg of lamb would be £53.18, Shelter said.
Shelter’s chief executive Campbell Robb said: “The high cost of food is already a real concern for people, so if prices reached these levels there’s no way we’d accept it.
…
If food prices had risen with house prices:
– 4-pint carton of milk would cost £10.45
– a chicken would cost £51.18
– a bunch of 6 bananas would cost £8.47
– a box of 6 eggs would cost £5.01
– a loaf of sliced white bread would cost £4.36
a leg of lamb would cost £53.18

So maybe time to move to sunnier climes? (But watch out for the Zombies…)

Is now the time to buy property in Spain?
Cheap places in the sun…
One problem for prospective British buyers is that Spain currently has a two-tier property market. There are the prices you see advertised by estate agents and property developers, and then there are the true prices from sales, which often take place at discounts of up to a quarter (25%) off ‘official’ prices.
In other words, this is the sort of buyers’ market where bargain hunters thrive, snapping up premium properties at bargain-basement prices. This is especially the case in such a stagnant market, where a near-total lack of selling activity means that prices are purely guidelines.
For example, some Spanish banks have been off-loading repossessed (seized) properties at discounts of 60% to 70% from original purchase prices. With such deep markdowns on offer, there should be no need to rush into buying, especially if prices continue to weaken this year.

…but there could be more pain to come
While the arguments for investing in post-crash Spanish property are growing, only fools would rush in to this bombed-out sector without doing their homework first.
Indeed, one leading economic consultancy in Spain, RR. de Acuña & Asociados, warned last December that the Spanish property slump could continue for another 10 to 15 years. The firm expects prices in major cities to fall a further 30% by 2018, while popular coastal regions could see prices halving from their current levels.
This would be a disaster for the estimated 400,000 Brits who already live in or own homes in Spain, some of whom might see their homes fall in value by three-quarters (75%) from peak to trough.
In a strongly worded report, RR. de Acuña & Asociados warned that “The [Spanish property] market is broken,” because there are close to two million properties awaiting sale. This unsold stock breaks down as follows:
Used homes on the market 800,000
Completed development units 700,000
Foreclosures 300,000
In foreclosure proceedings 150,000
Under construction 250,000
Total 2.2 million
Of course, classical economic theory tells us that when supply greatly exceeds demand, prices can go only one way: downwards. With a massive glut of 2.2 million unsold homes and only 200,000 to 250,000 properties changing hands each year, Spain has a property overhang that could take a decade to clear.
In this scenario, there is simply no way that the Spanish market can gain any upwards momentum. What’s far more likely is that prices will resume their downward slide, before levelling off when Spain’s economy finally starts to show sustained strength

The true picture: Spain in numbers
To show you how dangerous it could be to bet on Spanish property right now, I’ve pulled together some stats on the state of Spain (and the UK) today. As you can see from my table below, there are plenty of problems for property investors to worry about.

Country Spain UK
Population 48 million 62 million
Yearly property sales 200,000 900,000
Unemployment rate 26.6% 7.8%
Youth unemployment rate 56.5% 20.2%
Economic growth (2012) -1.8% 0%
Predicted growth (2013) -1.3% 0.7%

As you can see, the UK economy was flat in 2012 and is expected to grow slightly this year. Alas, Spain is still firmly in recession, with its economy expected to keep shrinking until 2014. Also, with unemployment running at more than three times the UK’s rate of 7.8% and youth unemployment at record high, there seems to be no light at the end of the tunnel for Spain just yet.
What’s more, with Spain’s ‘zombie’ banks and property developers locked in a ‘death spiral’ of fire sales, write-downs, bad debts and defaults, there is no reason to expect any lasting property recovery in the immediate future.
In summary, while property prices in Spain are well below their former highs, they could yet have further to fall. So this is a market only for the brave, foolhardy or risk-hungry!

And as we know, ‘classical economic theory’ is mostly bunk: as TAE often points out, its what people can afford that is important and drives the market, and people are being squeezed left right and centre by higher rents/expensive mortgages that need 20% deposits (a sign of the real risk of falling prices), rising fuel costs and falling income and the increasing scarcity of full time work.
Also, as TAE have also pointed out, government and bureaucratic responses to the crisis can prove devastating:

Bedroom tax: why social tenants will soon be taxed on their spare bedrooms
There are over 26 million households in the UK, of which nearly 3.8 million are classified as ‘social housing’. These rented homes are owned by local authorities or non-profit housing associations and usually occupied by low-income tenants.
…
Taxing extra rooms
One way the Government aims to curb the bill for social housing is by imposing a yearly cap on total state benefits paid to working-age households. This limit has initially been set at £26,000 and is already affecting thousands of households, particularly in high-priced London.
In what’s being already called the ‘bedroom tax’, housing benefit will be cut from April for those tenants who have one or more spare bedrooms in their homes. One extra bedroom triggers a cut in housing benefit of a seventh (14%). Two or more spare bedrooms produce a cut of a quarter (25%).

What will be the consequences?
For a family receiving, say £100 a week in housing benefit, a 14% cut equates to a loss of £14 a week from April (£728 a year). Likewise, a 25% cut to the same benefit would mean losing £25 a week (£1,300 a year). For many council tenants, this shortfall could mean the difference between heating and eating.
Of course, this coming cut to housing benefit is intended to encourage council tenants to ‘downsize’ by moving from larger, under-occupied homes to smaller, more affordable social housing.
But people living in social housing (notably those that rely solely or mainly on state benefits for their income, such as the unemployed, disabled and low-paid) are not renowned for living the high life. Many struggle to make ends meet already, particularly when big bills suddenly hit the doormat.
So these cuts are sure to send many thousands more council tenants into rent arrears. With yearly rises in other working-age benefits capped at a below-inflation 1% from 2013 to 2016, the household budgets of welfare claimants will be placed under even greater pressure.
…
What’s more, families that do agree to move to smaller homes may find that such housing stock simply isn’t available in their area. So while being physically unable to move to smaller accommodation, they must carry on paying the bedroom tax. How absurd is that?

Bedroom tax? Almost matches the ‘window tax’:

The Window Tax existed from 1696 to 1851. It was introduced during the reign of William III as part of the beautifully named “Act of Making Good the Deficiency of the Clipped Money”.

Though the burden of that tax fell on the better off.

The point of all this rambling is that the story is always much more complex than the black and white crash/no-crash, inflation/deflation type dichotomies that tend to dumb down any real analysis.

Here is ‘This is Money’s’ story of how the value of money has changed since 1900, with a snap shot of the last 49 years:

and with a snap shot of the ten years between 1999 to 2009, where its interesting to note that house prices rose 123%, salaries only 13.6% and UK consumer debt by 158%!

Take away debt, and what can they afford then?

L,

Sid.

[gurusid]

HI Stoneleigh and Ilargi,

Happy 5th Birthday!

Stoneleigh, this is a great distillation of the pertinent points. For those (like me) who wondered what ‘thirds and fourths’ were, check out this site:

Instead of working in gangs as they had on antebellum plantations, the freedmen became tenants. The planter or landowner assigned each family a small tract of land to farm and provided food, shelter, clothing, and the necessary seeds and farm equipment. When the crop was harvested, the planter or landowner took the cotton to market and after deducting for the “furnish” (the cost of the items the tenant had been furnished during the year), gave half of the proceeds to the tenant. This arrangement became known as sharecropping.
In the decades after Reconstruction tenancy and sharecropping became the way of life in the Cotton Belt. By 1930 there were 1,831,470 tenant farmers in the South. What began as a device to get former slaves back to work became a pernicious system that entrapped white as well as black farmers. After 1900 the number of white tenant farmers grew alarmingly. By 1935 nearly half of white farmers and 77 percent of black farmers in the country were landless.
As farm tenancy grew, a tenancy ladder evolved. From the bottom rung, the hapless sharecropper could climb to share tenant if he could accumulate enough of his own equipment and money. Share tenants kept two-thirds or three-fourths of the crop, depending on how much they could furnish. If a share tenant progressed to a point of needing nothing but the land, he could become a cash tenant by paying a fixed rental. Cash tenants kept all of the proceeds from the crop.

It also goes on to say how people got into the dire circumstances they found themselves in. For me this is a typical example of the industrial mindset applied in this case to agriculture, with the myth of ‘infinite competition’ versus a monopoly, in this case the old monopoly of slavery (note: for the actors there was little difference in terms of welfare and wellbeing) (this is one of Steve Keens arguments for debunking neo-classical economics in his book “Debunking Economics” ), and the ‘mono-culture’ approach to everything – there is only one way that typifies industrialism. This is Vandana Shiva’s ‘mono-cultures of the mind’:

One area of hope comes from the fact that the trajectories that have been laid out by these monopolizing monoculture minds are so nonsustainable that something will have to happen. The system will crack. When you industrialize food and farming too much, there will be outbreaks of disease. People will want local, organic food as a secure supply. Alternatives are built into the very logic of the system because it’s designed to fail and will lead to environmental catastrophe.
The second reason I’m hopeful is the work we are doing. We begin with tiny steps. We say, OK, there are suicides of farmers. Let’s take ten quintals (1,000 kg.) of wheat to the farmers of Punjab. They’re not satisfied with ten. They want a hundred. We rush back and multiply seeds again. Wherever there are initiatives to build sustainable, just, democratic systems, they are spreading like wildfire.
People want another world, and they’re building it. People’s love for freedom is more powerful than any coercive authority. That love for freedom is more powerful than the love of the dominators who are trying to control the planet.

Stoneleigh, on your foray into Permaculture, may I humbly suggest you check out Masanobu Fukuoka’s (died 2008 aged 95) “One Straw Revolution” and if you can find it his “Natural Farming”; also Sepp Hoplzer’s (very much alive) “Rebel Farmer” to see just how hard one man has had to fight the ‘authorities’ to build a true polyculture farm. Sepp Holzer’s multi decade farming experience has changed many times over the years, but the key was always diversity. And not forgetting the Uk’s own Robert Hart, whose Forest Garden is often the basis of many Permaculture projects in the UK.

One thing on the three ‘Es’ of Economy, Energy and Environment, is that I suspect we will not get one after the other, but rather one feeding into the others, thus while we currently have an economic crisis, energy is now feeding into that crisis and causing greater disruption. So too as we go further down the road the environmental crisis (here I am referring to things like ocean depletion and pollution, soil erosion, groundwater and aquifer depletion amongst many others never talked about) will feed into the other two and together will form a maelstrom of consequences.

The other thing is population, which when combined with the above three Es produces a giant EEEP!

Good luck for the next five years!

L,
Sid.

[gurusid]

Hi Folks,

Of course, some people tell an entirely different story:

House prices back on track and no sign of a crash… :whistle:

L,
Sid.

[gurusid]

Nassim wrote:

The website http://www.measuringworth.com suggests that in 1955 average nominal annual earnings were £434 and that that was equivalent to £8,887 in 2010.

There’s that factor twenty again!

L,
Sid.

[gurusid]

@ Nassim:

Riiiiiiiighhhhht ok. Do you know what propaganda really is? (no its not slang for taking a look aka proper gander) In my mind it’s the telling of a lie using selected truths and creative story telling that the teller believes to be the whole truth. Ro/Rs internalised in the mind of the propagandist, and often the propagandee

In the ‘propaganda’ in question here, there is also the ‘historical’ anomaly of the old ‘sterling currency’ of pounds (P) shillings (S) and pence (D). As twenty shillings to the pound gives a factor of twenty, when applied to ‘their’ data I suspect that the spread sheet might have choked. That or they are just making it up as above! (The old PSD pounds shillings and pence could be seen as the ultimate in feudal control, one currency for the elite, pounds (or ‘Guinies’ £1 S1), Shillings for the middle classes, and pence for the serfs.)

In terms of ‘their’ data, they have obviously conflated shillings with pounds, hence the factor twenty error in ‘their’ 1950s and 1960s slides. As for the other slides, I think they have cherry picked ‘their’ data. (The original slides were by Savills of London Estate agents so they may be referring to their own historical wages! LOL!)

You went to Stowe – bully for you! As for public and other schools real purpose, check out John Taylor Gatto, and as Rugby state on their website:

Rugby’s greatest Head Master Dr Arnold (1828–42) instigated this practice so that boys could see him privately and the tradition continues today. Arnold is famed for ridding the School of its Flashmans and emphasising subjects that were a good ‘preparation for power’. He treated his senior boys as gentlemen, increasing their power and duties so that they shared responsibility for moral tone and discipline with him. As Arnold put it: ‘First religious and moral principle, second gentlemanly conduct, third academic ability.’ Masters were expected to supervise as well as teach; the dames’ houses were abolished and pastoral care was born.

“preparation for power” make no mistake, indoctrination at all levels must start early.

The Antithesis to the propaganda? Education as in Educe: 1, bring out or develop from latent or potential existence; elicit. 2 infer; elicit a principle, number, etc, from data.Origins from middle English from Latin educere educt- ‘lead out’. As in to lead out of darkness… just how deep does the rabbit hole go?

Take Athens:

For a long time, for instance, classical Athens distributed its most responsible public positions by lottery: army generalships, water supply, everything. The implications are awesome— trust in everyone’s competence was assumed; it was their version of universal driving. Professionals existed but did not make key decisions; they were only technicians, never well regarded because prevailing opinion held that technicians had enslaved their own minds. Anyone worthy of citizenship was expected to be able to think clearly and to welcome great responsibility. As you reflect on this, remember our own unvoiced assumption that anyone can guide a ton of metal travelling at high speed with three sticks of dynamite sloshing around in its tanks.

When we ask what kind of schooling was behind this brilliant society which has enchanted the centuries ever since, any honest reply can be carried in one word: None. After writing a book searching for the hidden genius of Greece in its schools, Kenneth Freeman concluded his unique study The Schools of Hellas in 1907 with this summary, “There were no schools in Hellas.” No place boys and girls spent their youth attending continuous instruction under command of strangers. Indeed, nobody did homework in the modern sense; none could be located on standardized tests. The tests that mattered came in living, striving to meet ideals that local tradition imposed. The word sköle itself means leisure, leisure in a formal garden to think and reflect. Plato in The Laws is the first to refer to school as learned discussion.

Know Thy Self. Self educate.
In the Buddha’s parting words:

“Therefore, O Ananda, be ye lamps unto yourselves. Rely on yourselves, and do not rely on external help. Hold fast to the truth as a lamp. Seek salvation alone in the truth. Look not for assistance to any one besides yourselves.
“And how, Ananda, can a brother be a lamp unto himself, rely on himself only and not on any external help, holding fast to the truth as his lamp and seeking salvation in the truth alone, looking not for assistance to any one besides himself? Herein, O Ananda, let a brother, as he dwells in the body, so regard the body that he, being strenuous, thoughtful, and mindful, may, whilst in the world, overcome the grief which arises from the body’s cravings. While subject to sensations let him continue so to regard the sensations that he, being strenuous, thoughtful, and mindful, may, whilst in the world, overcome the grief which arises from the sensations. And so, also, when he thinks or reasons, or feels, let him so regard his thoughts that being strenuous, thoughtful and mindful he may, whilst in the world, overcome the grief which arises from the craving due to ideas, or to reasoning, or to feeling.
“Those who, either now or after I am dead, shall be lamps unto themselves, relying upon themselves only and not relying upon any external help, but holding fast to the truth as their lamp, and seeking their salvation in the truth alone, and shall not look for assistance to any one besides themselves, it is they, Ananda, among my bhikkhus, who shall reach the very topmost height! But they must be anxious to learn.”

“But they must be anxious to learn”

L,
Sid.

[gurusid]

HI Folk,

A reminder of the stories we tell ourselves:

Footsie at 6344 (29-01-13), UK housing recovery under way with mortgages available again , unemployment down, the economy is really buzzing!

£600m worth of flats sold in less than five days:

Prices start at £338,000 for a studio, from £423,000 for a one-bedroom apartment, from £613,000 for a two-bedroom and from £894,000 for a three-bedroom.
… It is expected to be announced as sold out and the fastest selling development of all time after this weekend when a tour of buyers in Hong Kong and Singapore finishes.

UK Gov’t launches new green deal:

The Government hopes that its Green Deal will ‘transform’ British homes, which are among the least energy efficient in the world.
… The initiative replaces the Warm Front scheme, which offered free insulation and help with bills to households on income-related benefits.
… Households can choose from 45 different types of improvements, including insulation and new heating systems. The money borrowed through the scheme is paid back through your electricity bill – the idea being that money saved on bills should cover the cost of having the work done.
… As the money is a loan it comes with a fixed interest rate attached and this will be confirmed in the plan. The Green Deal Finance company has been set up by the Government to provide funding at a rate of 6.9%, but not all providers will need to use this mechanism so rates could vary considerably.

But:

Luciana Berger MP, Labour’s Shadow Climate Change Minister, hit out at the loans and said that the Green Deal will cost most people more that it will save “because of sky high interest rates, hidden charges and penalty payments”.

Australia set to become energy independent and a net oil exporter:

https://uk.finance.yahoo.com/news/major-20-trillion-shale-oil-040750293.html;_ylt=AqPMW_roS8hwHaMx9UkhNDozvrFG;_ylu=X3oDMTNqNDMwdTI4BGNjb2RlA2N0LmMEcGtnA2FkZmNmNmVlLWZkMzYtMzBkZC1iZDJlLThjNjQ3Mjk4NDBjYgRwb3MDNQRzZWMDbW9zdF9wb3B1bGFyBHZlcgNmZWQzZjkxNC02NmQ4LTExZTItYmU1Yy0yYTk4NDBlZTUwYzg-;_ylg=X3oDMTJydXFwaHJlBGludGwDZ2IEbGFuZwNlbi1nYgRwc3RhaWQDZWI2NWZkMzItYzRhNC0zMmZlLWEyZWUtMDJhNjVkMTA3NDJmBHBzdGNhdANwcm9wZXJ0eQRwdANzdG9yeXBhZ2U-;_ylv=3 “>

Tom Koutsantonis, mining minister in South Australia state, where the deposit is located, said the sheer amount of oil would be enough to see Australia become a self-sufficient net exporter.
…
“If the reserves and the pressure was right over millions of years and the rocks have done the things they think they’ve done, they think they can extract vast reserves of oil out of South Australia which would have a value of about $20 trillion,” said Koutsantonis.”

(but watch out for the small print)

“He warned that it was not yet known “whether it was economic to recover or not”, with the oil trapped in “low-permeability, clay-rich rocks” that needed to be fractured to release the fuel.

So what’s not to like? Every silver lining has a cloud huh?

Weeeeell this kind of puts a dampner on a few things:
How much UK house prices have really risen (note the error in their early data, out by a factor of twenty due possibly to conflating PSD with decimal – see reply to Nassim below:):

Compared to now (ish –2011):

This neat little graph sums it up:

Note the most recent ‘rise’ is actually due to falling income.

Oh, and not only but also:

Britain’s economy shrank 0.3 percent in the final quarter of 2012 and recorded zero growth for the year as a whole, official data revealed on Friday, placing the country on the brink of a “triple dip” recession.”

And don’t forget the myth before the flame that is Greece:

The International Monetary Fund estimated on Friday that Greece faced a financing gap of between 5.5 billion and 9.5 billion euros (4.6 billion and 8 billion pounds) for 2015 and 2016 and said it had assurances from Europe it would deliver the aid in the final years of the bailout.

It was the first time the IMF had estimated a range of possible financing needs for Greece’s international bailout program beyond 2014. The European Commission said in December the money needed for Greece over the two-year period encompassing 2015 and 2016 would amount to 5.6 billion euros.

… The IMF board agreed on Wednesday to pay the next aid tranche of 3.24 billion euros to Greece under the 240 billion-euro international bailout involving a troika of lenders including the IMF, European Union and European Central Bank.

Brazil, which has long expressed concern over the IMF’s large financial exposure to Greece, opposed the decision, arguing that the prospect of Greece regaining market access in the medium term was “highly doubtful.”

… IMF staff also questioned in documents released on Friday whether Greece would be able to repay the IMF if its program “went irretrievably off track” and Europe halted support for Athens.

… Thomsen said Europe had not said exactly how it would provide additional debt relief, but options included reducing interest rates on Greek loans.

“The key is that Europe has recognized for the first time that debt is not sustainable without direct transfers in one form or another from Europe to Greece and that there is a commitment to do that,” he added.

… He said the new Greek government was determined to crack down on tax evaders and to boost tax revenues, although there had been no significant impact on tax collections so far.

After all said and done, “it’s the system, stupid”:

The observant Systems-student will no doubt be able to supply a number of variant readings of the same Law, gleaned from the newspapers and his own observations of government officials, corporation executives, et al. The net effect of this Law is to ensure that people in systems are never dealing with the real world that the rest of us have to live in but with a filtered, distorted, and censored version which is all that can get past the sensory organs of the system itself.
Corollary No. 1:
A System Is No Better Than Its Sensory Organs.
This Corollary, the validity of which is crystal clear to you and me, is viewed with perplexity by the personnel living within the system. For them, the real world is simply what their intake says it is, and any other world is only a wild hypothesis. A true Systems-person can no more imagine inadequacy of sensory function than a Flatlander can imagine three-dimensional space.
Corollary No. 2:
To Those Within A System, The Outside Reality Tends To Pale And Disappear.
This effect has been studied in some detail by a small group of dedicated General Systemanticists. In an effort to introduce quantitative methodology into this important area of research, they have paid particular attention to the amount of information that reaches, or fails to reach, the attention of the relevant administrative officer. The crucial variable, they have found, is the fraction:
Ro/Rs
where
Ro equals the amount of reality which fails to reach the relevant administrative officer
and
Rs equals the total amount of reality presented to the system.
The fraction Ro/Rs varies from zero (full awareness of outside reality) to unity (no reality getting through). It is known, of course, as the COEFFICIENT OF FICTION.
Positive Feedback (P.F.) obviously competes with Reality (R) for input into th.e System. The higher the P.F., the larger the quantity of Reality which fails to gain entrance to the System (Ro) and the higher the C.F. In systems employing P.F., values of C.F. in excess of 0.99 have been recorded.[*] Examples include evangelistic religious movements, certain authoritarian governmental systems, and the executive suites of most large corporations.
[Footnote. In theory the C.F. may attain 1.00, but in practice removing the last shred of reality from the sensory input becomes increasingly difficult.]
A high C.F. has particular implications for the relationship between the System and an Individual Person (represented by the lower-case letter i).[*] We state the relationship as follows.
[Footnote. In mathematics, i represents an imaginary quantity.]
Corollary No. 3:
The Bigger The System, The Narrower And More Specialized The Interface With Individuals.
In very large systems, the relationship is not with the individual at all but with his social security number, his driver’s license, or some other paper phantom.
In systems of medium size, some residual awareness of the individual may still persist. A hopeful indication was recently observed by the author in a medium-sized hospital. Taped to the wall of the nurses’ station, just above the Vital Signs Remote Sensing Console that enables the nurses to record whether the patient is breathing and even to take his pulse without actually going down the hall to see him was the following hand-lettered reminder.
The Chart Is Not The Patient.

Unfortunately this slogan, with its humanistic implications, turned out to be misleading. The nurses were neither attending the patient nor making notations on the charts. They were in the hospital auditorium taking a course in Interdisciplinary Function. (*)
(*Footnote. Interdisciplinary Function: The art of correlating one’s own professional activities more and more with those of other professionals while actually doing less and less.)

If a medium sized system has a problem, there is absolutely no hope for a global system. After all, the patients been dead for years… sorry kept on ‘life support’ like some totalitarian leader (mmm..) And Zombies make for such a good story too!

L,
Sid.

[gurusid]

@ Viscount ; nice video.

L,
Sid.

[gurusid]

Hi Illarghi,

I get that CalPERS tries to hide losses through unrealistically high return assumptions, nothing new there. But these numbers are something else altogether. And I don’t get it. Do you?

All pension schemes were a good idea at the time, that is at the early stages of industrialisation, whereby the exhausted worker would be spared the ‘poor house’ or worse and allowed to live out the few remaining years of their lives in modest comfort. Given the growth that the industrial model has led to, both in population size and life span as well as a dynamic for investment, this led to a heavy discounting of the future. Well the future is now here, and all those ‘extra’ people who happened along during the population explosion are now looking for a promise to be fulfilled, only to find they are in that ‘discounted’ future. Most pension schemes will end up making Bernie Madoff look like a saint!

Btw if anyone thinks all this is a recent problem, they should check the early history of railways replete with ‘rampant capitalism’

In the late 1830s the railways arrived in London and linked the capital to Birmingham, Liverpool and Manchester. This was the start of a truly national network – and one of the greatest civil engineering projects in history.

The spread of the railways triggered a mania across Britain. Railway tycoons like Samuel Morton Peto and George Hudson made and lost fortunes as the stock markets boomed around these new developments. Yet the bubble burst in 1847 and shares plummeted. Thousands of ordinary shareholders filled the bankruptcy courts.

So much so that the government bailed them out. A few years later and Overend & Gurney went bust in 1866, 10th May, known as Black Friday, having been invested in amongst other things the railways. But this was on the ‘upswing’ of resource exploitation, and the resources made accessible by this burgeoning technology led to enormous profit that made the initial loses pale by comparison. The 1000 mile Grand Trunk rail-road in Canada literally created a nation for instance. But now those days are gone. despite the consensus that Dont-panic-weve-seen-this-before. There is no more wilderness to conquer, no more nations to build, and very few resources to exploit and little ‘cheap’ energy left to do it with, and certainly no capital. Industrial civilisation has peaked, welcome to ‘the downside’. 👿 (needs smiley with Darth Vader mask!)

L,
Sid.

[gurusid]

Hi Folks,

…the zealotry component of the belief in neoclassical economics: their capacity to believe in this approach is as firm as the capacity of a Doomsday Cult to believe that the world will come to an end on a particular day. When each time the given day passes, a new one is constructed. The irony for neoclassical economics of course is that it’s the opposite of a Doomsday Cult: it preaches that nothing bad will ever happen (so long as governments are kept under a leash and unions are cowed). Then something really bad does happen given nearly unregulated markets. They can’t deny that it has happened, but already they’re starting to interpret it as the result of government policy!

Read more here

Says it all really – reverse doomsday cult, guess that would be a ‘Happy Days’ Club. Go the Fonze dude…

L,
Sid.

[gurusid]

HI folks,

The last two comments by Ishkabibble and milliepickle are very pertinent as they highlight the gap between what people imagine might happen and what actually does. The problem lies with terms such as community which hide the actual social dynamics. Community means generally ‘from the common’ and refers to relations that are more mechanical than contractarian (see my own previous post). Also historically they are based around necessity, often to do with food production or defence, especially of small towns and villages where everyone pretty well new each other and where they stood in that society. Trying to have this sort of ‘community’ in a society where you have only ‘known’ someone for a few months or maybe years if you are lucky, where there is no real necessity and instead it is as much a lifestyle choice as much as anything is doomed to failure.

As for what happens in ‘communities’ when necessity does hit check out the results of the current UK moderate snow fall:

Nice community response in clearing the shelves :whistle:

IMHO if you want a taste of post ‘collapse’ check out some of the rougher areas of sub-Saharan Africa or anywhere where ‘colonialism’ has gone from governance to exploitation.

L,
Sid.

[gurusid]

And as Jal pointed out:

For those who are not aware of small towns/communities dynamics, the “pecking order”, and the resulting dynamics of bullying, shunning, and exploitation by others will be present and obvious.

This is human nature, don’t think that for one moment contractarian organisations are also not rife with this sort of behaviour, it’s just that their organisation makes it less prevalent and ‘obvious’.

L,
Sid.

[Author]

Posts