[Nassim]

“Good fences make good neighbors”

[Nassim]

Here are a couple of topics that I’d like to hear from Stoneleigh about: 1) the Canadian housing situation, 2) what she means when she refers to “multiple claims to underlying real wealth” (an example or illustration would be great.)

Barak,

Here is a simple example of “multiple claims to underlying real wealth”:

https://www.zerohedge.com/news/how-chinas-rehypothecated-ghost-steel-just-vaporized-and-what-means-world-economy

I wonder how it will affect the big Australian iron ore miners. :huh:

[Nassim]

I can’t help thinking that this film was somehow staged. I really can’t believe that a Copt can be that daft. However, there are loonies in all religious denominations.

The overlap with 9/11 cannot be fortuitous. I think stuff like the film below are beginning to go mainstream and something has to be done to prove once more that Moslems are all all fanatics and primitive:

[Nassim]

Thanks Ilargi for pointing out how gold isn’t doing nearly so well against the Euro and in fact this is as much about a dip in the US dollar than anything else.

I don’t know where that idea came from, but if you look at the chart below for the past 12 months and using the Euro as currency, you will see that gold has gone up by 10%. In the past month, it has gone up by 4% against the Euro.

https://www.bullionvault.com/gold-price-chart.do

[Nassim]

Ilargi,

Thanks for that eye-opener about the Netherlands. I was based in Amsterdam in 1980-3. There was a property bubble back then. All the people I worked with were borrowing like crazy. The bubble collapsed soon after I left. A Dutch friend of mine got burnt quite badly. He showed us in the office the very first real PC that I ever had seen – a Commodore 64. It cost over $600 at that time.

https://en.wikipedia.org/wiki/Commodore_64

I just did a search and it seems that he is currently running a motorbike club and magazine in Normandy.

Of course, the current bubble is incomparably bigger and the consequences will be devastating for all concerned. The Dutch have not learnt much since the tulipomania.

[Nassim]

Jack,

That is a sorry story. I checked out the details and it would seem that the Azerbaijani side did not keep their deal with the Hungarians.

Anyway, he was locked up for 8 years by the Hungarians before they agreed to let him serve the rest of his sentence in his own country. I guess the Hungarians don’t know or care much about the Azaris and the sort of government they have.

In the UK, most murderers serve an average of 15 years. Please don’t think that I am condoning it in any way.

https://en.wikipedia.org/wiki/Ramil_Safarov

Breivik, the guy who killed 77 and wounded 242 in Norway last year, can only be kept locked up for 21 years, I read somewhere.

[Nassim]

Like bluebird and Marc Faber, I think the Germans – and perhaps some others – will leave first.

Greece leaving makes little sense as the pressure on Spain, Portugal, Italy, Ireland and France will instantly increase.

[Nassim]

Adam Goodwin,

Thank you for the link. The opinions the writer expressed tally with my own.

I don’t believe in the big crash – only in the big financial crash. I believe that there is far more resilience in the non-financial (i.e. real) world than one may imagine.

Of course, loads of people have no real skills or real qualifications or real connections or real wealth or real health. For them, things are going to be bleak. I am in no doubt about that. However, a lot of people have one or more of these real resources (capital ?) and they will do quite well.

[Nassim]

The references to the American Society of Civil Engineers remind me of why I got out of civil engineering in 1973 – appalling short-termism and lack of investment to replace the stuff built in the UK generations ago. Plenty of money for the Olympics though.

[Nassim]

Heineken was a remarkable man. I still remember his kidnapping:

https://www.guardian.co.uk/film/2011/oct/21/kidnapper-heineken-film-willem-holleeder

They made a film of the kidnapping and one of the kidnappers has taken the film-makers to court accusing them of “damaging his reputation”. This guy is in prison again for a much-later offence 🙂

[Nassim]

Too many dear contributors are using the phrase “Nasser’s Pan-Arab-Nationalism” with no real understanding, IMHO, of what really went on. Well, I was brought up under “Nasser’s Pan-Arab-Nationalism” in Egypt, and just a short distance from the presidential palace to boot. I was there from 1950 to 1962 and one of his sons, Khalid, was in my class at one time – I was the youngest in the class and he was a year older than me. Much later, he bankrolled an attack against some Israelis in Cairo – to get Sadat into trouble – and the Israelis put the screws on him and he had to pay a huge ransom to avoid being murdered in reprisal. Of course, you will not find it in the laudatory Wikipedia reference:

https://en.wikipedia.org/wiki/Khalid_Abdel_Nasser

Let’s see in black and white some of the “accomplishments” of Nasser and his henchmen.

1- When he came to power, the Egyptian pound was far stronger than the pound sterling, and there were very substantial gold reserves to back it. When he died, it had become worth less than 20p.

2- Nasser forced all foreigners to leave including those, like the Greeks and the Jews, who had been there for hundreds, if not thousands, of years. He confiscated most of their wealth and property and ensured massive enmity and bitterness abroad.

3- Later, he did the same to any half-decent business in Egypt – factories, hotels, industries – owned by private Egyptian interests. Every company on the stock exchange was sequestrated. He stole all this wealth and spread it among his friends and cronies – especially the officers.

4- Egypt had avoided getting involved in either the WW1 or WW2 (even the British who largely ran the country had been unable to get them involved). Nasser invaded Yemen and gave the Israelis a good pretext for smashing his army and air force and for occupying Sinai and cutting the Suez Canal (a major source of income for Egypt).

5- He imported a large number of East German Stasi intelligence specialists and built up a huge intelligence network (Mukhabarat) which monitored everything anyone of any significance did or said (including the children of these people). He opened many new prisons for political prisoners and torturing prisoners became standard practise.

6- He took any land over 50 acres from its owner and gave it to the peasants. Of course, superficially this might seem a great idea. However, he lowered the controlled prices at the farm gate so that this “benefit” was really a poisoned chalice. Just like Lenin, for political reasons he favoured the town dwellers over the peasants. If you want to know why Egypt imports half its calories, this might be a good starting point. He told the poor to “go forth and multiply” – which they gladly did.

The Nasser family is immensely wealthy (just like the family of Yasser Arafat) and they live like kings of old. This wealth was entirely stolen from ordinary people.

[Nassim]

He is fun so long as you don’t discuss the Middle East in his presence. He is a bit like a musician who only can play one tune, but very well.

[Nassim]

Because Google and their friends have noticed that you are interested in Romney and have been visiting his sites. 🙂

Here is an excellent example of what I mean:

“John Prescott, Grant Shapps and the Thai brides”
https://www.theweek.co.uk/uk-news/sunday-papers/48212/john-prescott-grant-shapps-and-thai-brides

BTW, John Prescott used to be deputy prime minister in the UK – deputy to Tony Blair

[Nassim]

Thanks FrankRichards for that piece of information. I was wondering how they did it since mine are things like NS63.DOMAINCONTROL.COM

However, I am still curious why no one seems ready to respond to my (helpful?) suggestion.

[Nassim]

Just as a historical footnote about the Soviet Union and the Stakhnovite movement.

As recently as 1980, when my wife was a medical student at Smolensk, students were forced to pick potatoes every Autumn for 9-10 weeks at some remote collective farm and neglect their studies. The first year, wife developed a severe sore throat and a persistent fever so she was excused these duties and allowed to do some menial work close to the university. The other girl-students were quite indignant and convinced that she had found a way around this arduous and unpleasant manual work. Afterwards, the students were expected to catch up with their missed studies.

[Nassim]

Please change the million to billion – soon trillion 🙂

[Nassim]

Nice concise explanation of what is going on. I will try to link to it in the FT’s comments. Thank you.

[Nassim]

alfbell,

Your comment “The pro-gold or gold bugs don’t want to listen to these points. They are fixed in their ideas because they have committed themselves and now they have no flexibility.” made me smile. I have posted a “thank you” against your message. I liked it a lot.

I would like to see you, or anyone else here, eating their farmland or putting it in their pocket and moving to another neighbourhood.

All these farms are just sitting there and waiting for the return of “tax farmers”

https://en.wikipedia.org/wiki/Tax_farmer

In British India, they were called Zamindars – Persian for “landlord”

https://en.wikipedia.org/wiki/Zamindar

Some people have no clue about what it is like to live in a repressive police-state. These guys won’t just take people’s crops, they will take their daughters as well.

[Nassim]

There are at least two entirely separate gold markets – paper and physical. The paper market is very much bigger than the physical market and all the big Wall Street banks, plus the Bank of England and so on are keen to keep the price on that market low. Speculators get hit regularly by huge amounts of paper flooding the market at critical points. The other market is in the Far East and that involves many individuals and states loading up on gold. China is the biggest gold miner in the world and yet they bought, through Hong Kong, about same amount of gold as _all_ the UK’s gold reserves during this month of June. In fact, they have surpassed India in their frenzy to acquire gold – the stuff you can touch and feel. Iran is selling its oil for gold to Turkey and India – they deal in Yuan with the Chinese since their trade is two-way.

https://dailyreckoning.com/the-path-to-10000-an-ounce-gold

When that factor is combined with the fact that governments in the West are running out of money and are talking openly of reinstating capital-controls

https://dailyreckoning.com/the-governments-plan-to-steal-your-money

It would seem pretty short-sighted in my opinion not to keep a decent portion of your savings in gold and silver. The other advantage is that it will help bring down Wall Street and the City of London a lot sooner. This has nothing to do with making a quick profit and a lot to do with keeping your options open and knowing who your real enemies are.

As regards these charts showing the price of gold growing exponentially versus the cost of living, I would like to point out one simple fact. Here, in Victoria, Australia, the world’s largest alluvial gold deposits are to be found. However, there are only a handful of mines operating and they are not making much money. The reason is simply that labour is too expensive and the planning rules too restrictive. If the real price of gold reflected properly the real costs of living, there would be a minor gold rush out here.

https://en.wikipedia.org/wiki/Victorian_gold_rush

There are plenty of articles in the financial press which claim that the price of gold mining companies is not keeping up with the price of gold. The reason for this is that investors don’t want to tie up their money in a mine – which can be taxed or expropriated – they want real metal and now. If these people had confidence in the future, it would make much more sense to invest in shares in a mine.

[Nassim]

ZuluBuddha,

I sympathise with your experiences. I had to leave Egypt in ’62 because the government confiscated most businesses and farmland including my family’s factory, farmland and even home – it is now the HQ of their Social Security Organisation, which is rather funny when you think about it. 🙂

However, there is one common factor between these two countries besides the obvious ones like foreign meddling, the corrupt military and so on. In both these countries the population was exploding. Egypt had 20 million when I was born in 1950 and now has around 80 million. In Zimbabwe, 42% of the population is 14 or less. Of course, the early deaths tend to skew the distribution, but it is not unusual for a woman to have 8+ children in places that part of the world. Also, let’s not forget that a huge number left the place.

[Nassim]

Greenpa,

It is worth remembering that the Mau Mau were not the only killers. One can say what one likes, but they were not occupying some foreign country and imprisoning the local intelligentsia to stop them from leading the rebellion.

https://phys.org/news/2012-07-hidden-narratives-torture.html

[Nassim]

The bit about Gordon Brown is especially interesting. I wish some rich individual or institution that can put a number on its losses would start a civil case against him. He is certainly in a position to point at others, and he has a predilection for blaming others – even if his lawyers tell him to keep quiet..

[Nassim]

Here is what Monbiot recently wrote about nuclear power:

https://www.guardian.co.uk/environment/georgemonbiot/2012/mar/15/david-cameron-friends-of-the-earth

He never once mentioned the words “cost”, “radiation” or “risk” – quite an achievement, I would have thought.

However, he did mention “carbon” nine times. I guess his priorities and mine are different. 🙂

[Nassim]

I like reading stuff by Monbiot, he is a very good writer and quite entertaining. However, he has a flimsy scientific background – certainly as regards thermodynamics and global warming. He went to Stowe, like me, but many years later.

Here is an article from 2 years ago explaining why the UK’s unusually cold winters were a sign of global warming:

https://www.guardian.co.uk/commentisfree/2010/dec/20/uk-snow-global-warming

Of course, the winter after that was not so cold. 🙂

https://www.guardian.co.uk/commentisfree/2012/jan/02/sleighbell-winter-climate-change-denial

I mean, how can one take seriously someone who is trying to explain such a long-term phenomenon one year at a time?

BTW, I don’t want to initiate a climate-change discussion. I am merely pointing out that this guy is not a heavyweight. He is a journalist, not a scientist. Stoneleigh is right to point out his short-comings, but regrettably that makes him more credible than would otherwise be the case. He flip-flopped on peak oil. Big deal.

[Nassim]

Here is a letter recently published by the FT from a Western guy in Tokyo:

https://www.ft.com/intl/cms/s/0/ecc3b88e-bc90-11e1-a470-00144feabdc0.html

I know it is not exactly the same as skipbreakfast’s lament, however, it does bear some similarities. People are creatures of habit and they are programmed to be optimistic – like Dickens’ Mr Micawber (“something will turn up”)

https://en.wikipedia.org/wiki/Wilkins_Micawber

================
From Mr Tim Marrable.

Sir, I am at a loss to understand why the FT thinks that reviving nuclear power will lead to greater energy security for Japan (“Japan turns the power back on”, editorial June 22).

Japan imports uranium fuel for its nuclear reactors from some politically highly unstable regions of the world, such as central Asia. It also has to ship the resulting nuclear waste past the coasts of other unstable areas of the globe for reprocessing in Europe because it has failed so far to establish a reprocessing capability of its own. Being seismically active and geologically unstable, neither is Japan able to provide safe long-term storage for the 1,000 tonnes or so of waste, dangerous for centuries afterwards, that its reactors produce each year when operating.

Rather than simply throwing the nuclear switch back on, surely Japan’s first priority should be to cut wasteful electricity consumption. Despite being almost devoid of natural energy resources (except for its barely exploited geothermal riches), Japan has developed an unhealthy addiction to electricity it can ill afford. Even after the Fukushima meltdown, the world’s worst civilian nuclear disaster to date, there is a palpable lack of a sense of urgency here about seriously cutting back. Toilet seats are still being heated across the nation for delicate derrieres, irritating chimes and unnecessary electronic beeping and buzzing noises are as ubiquitous as ever and, mystifyingly, pharmacies and convenience stores across Japan are all so brightly lit that shoppers’ retinas hurt. Even more of a conundrum, hardly any buildings in Japan, even modern ones, are insulated, meaning vast amounts of energy are pointlessly wasted every season in heating them and then cooling them.

On the eve of the end of its long self-imposed isolation in 1868, Japan was entirely self-sufficient in energy and food, and it had a tiny carbon footprint. Admittedly, life expectancy was low, women were mere chattels, and there were no mobile phones, nor convenience stores nor comfortable transport, so no sensible person would wish for a return to that era. But with a dwindling population and with considerable energy savings within reach, Japan should recognise that it now has a unique opportunity to claw back a good deal of the independence it once had without turning to the facile and beguiling, but deeply flawed, nuclear option.

Tim Marrable, Tokyo, Japan

[Nassim]

Makes sense. It also makes all these French, Italian, Spanish and Greek politicians look omnipotent. Looks like a win-win all round. 🙂

The difficult part must be for her to keep a straight face and to keep cool when she is being shouted at in her own Bundesrat. I expect Bismarck had similar problems early on in his career.

[Nassim]

“Hillary Clinton signed a pact with her counterpart in Japan agreeing that the U.S. will continue buying seafood from Japan, despite that food not being tested for radioactive materials.”

https://seniorcitizenspublicsquare.com/2012/03/30/hillary-clinton-signed-a-pact-with-her-counterpart-in-japan-agreeing-that-the-u-s-will-continue-buying-seafood-from-japan-despite-that-food-not-being-tested-for-radioactive-materials/

How about that for deception? A secret agreement by Hilary Clinton to NOT test Japanese food being imported into the USA. Of course, the Japanese promised to do likewise (i.e. to also NOT test the food before exporting it).

I guess we will have to wait for Wikileaks to find out exactly what was agreed.

If you want to know the estimated radiation dosage Californian infants got from Fukushima (Reactor 1 only) check out the NRC’s estimates here:

“DITTRA and NARAC dose estimate that was done for California that we obtained as part of the DOE briefing package. And those were estimating what we believe to be very high doses to children”
https://enenews.com/controversy-after-govt-estimate-showed-40000-microsievert-thyroid-dose-california-infants-after-fukushima-very-high-doses-children-releasing-info-public

[Nassim]

Figmund Sreaud,

Interesting paper. I especially liked the way they did not mention once the rate at which drilling has to proceed to replace decline. The only reference they made to depletion was as in a financial item “Natural gas and oil depreciation, depletion and amortization”

[Nassim]

Hi snuffy,

Charles Hugh Smith has a couple of good articles about how Centralisation has failed (part 1) and how decentralisation will replace it (part 2)

https://www.oftwominds.com/blogjune12/centralization-failed6-12.html
https://www.oftwominds.com/blogjune12/solution-decentralization6-12.html

Personally, I think he is far too optimistic. I agree with part 1 about centralisation failing, but I think it will stop there. Those in charge prefer always to stay in control, even of a broken economy over the opposite scenario. IMHO, it may take a century to move from part 1 to part 2.

The funny thing is that he gives Egypt as an illustration of how it works – or does not. By my estimate, the army has been in power since 1952 and has almost run the country into the ground – 60 years. However, they are nowhere near relinquishing their stranglehold on power and if they were shifted another lot would take their place who are hardly more enlightened. Maybe the West really is different, but I doubt it.

[Nassim]

Pipefit,

For many years, gold miners were selling their gold before they got it out of the ground – to finance the operation. Central banks would lend their gold, the miners would sell it for cash, the miners would pay their way with this cash and eventually return the loaned gold plus interest (in gold). Of course, banks were intermediaries in all of this.

For the past 5 years or so, gold miners have stopped doing this. They are no longer short-sellers of gold. Some of them learnt a very expensive less and will not be doing it again any time soon. Even the gold miners got brainwashed by the fiat crowd.

https://www.silveraxis.com/GSU_Dallas_Mining_Letter.pdf

[Nassim]

RE,

On the one hand, you say (rightly) that the resources per unit of gold will drop.

On the other, you say (rightly) that the gold will not be available as it will be hidden (i.e supply will drop).

I think that the second argument is much stronger than the first one and so gold is going to be a good way of preserving value – Econ 101 🙂

[Nassim]

steve from virginia,

The only trouble with your thesis is that:

Iran is swapping oil against Indian gold
Iran is swapping oil against Chinese goods
Russia is more and more dealing direct with China – without using dollars
Japan and China have set up an account to exchange currencies directly

All of this is quite recent. It is catching on. While I agree that the dollar is a lot better than its alternatives in the short-term, its days are numbered.

Ashvin & RE,

Why bother having energy as a form of currency, when gold is an excellent representation of energy. South Africa’s gold mines should have closed down decades ago – because of ever lower grades – if the price of energy in terms of gold had not dropped. I would much rather carry a few gold coins rather than many oil barrels around with me.

pipefit,

The Indians and Chinese have been hoarding gold and silver for centuries. If you want to know where the precious metals of the Aztecs ended up, you will find them in the Far East. The flow has always been from West to East – never to return. Sure, it is not to be found in their central banks, but that does not mean it is not there. They are not too late at this game.

[Nassim]

Give us a break! Now we have to read the book of revelations. I wonder how many “books” did not make it the King James edition?

[Nassim]

I was wondering around Barcelona with my family three summers ago – on brief visit from France. I was carrying a rucksack on my back and several times people tried to get their hands into the rucksack so that I was forced to hold it against my chest. When I confronted them, they tried to laugh it off.

I guess things must be getting a lot worse by now. Eventually, a lot of people are going to point out that things were not so bad under Franco after all. Sure, he killed off masses of people to get into power and keep in power. However, he kept Spain out of WW2 and people had jobs and some sort of future under him. It seems pretty obvious to me.

The problem will be the getting from the present situation of ridiculous expectations to the situation of no expectations.

[Nassim]

sangell,

I loved this Freudian slip “without the fossil fuel fillup North America will get over the next few decades.” 🙂

https://www.thefreedictionary.com/fillip

Thank you Ilargi for your piece. I know it was not meant to cheer me up, but it did.

[Nassim]

I spent many wonderful vacations in Spain in the 1960’s and 70’s – my parents lived there and I went to school and college in the UK.

It was great. Everything was so cheap. I got around 50 pesetas per day of pocket money when I was 16 and I could get one almighty powerful Cuba Libre for 30 pesetas – around £0.25 at that time.

My French Catalunian friends got me into the discos for free much of the time. Their parents had fled Franco’s armies a generation earlier and moved to France – places like Toulouse.

Maybe the future is to be found in the past?

[Nassim]

I recently read about how people working in relatively secure jobs in the public sector in the USA are paid much more than people doing similar work in the private sector. This is clearly a nonsense.

IMHO, they should keep these public-sector jobs, but reduce their spending by reducing the pay.

RE seems to be a firm believer in the “broken window” theory of economics – where it does not really matter what the spending goes on.

In the UK, I recently read that people in the private sector would have to pay 10 times as much into their pension in order to get what government employees get:

https://www.telegraph.co.uk/finance/personalfinance/pensions/9188690/Private-sector-workers-need-to-save-10-times-as-much-to-get-a-public-sector-pension.html

The only thing I am sure of is that all of this nonsense is going to be swept away. As for the time-scale, I am as clueless as S&I

[Nassim]

Alpha Beta Soup,

Like I said, it is only interesting when there are disagreements – and cliques that war with one another 🙂 Climate change was definitely a good one, as was vegetarianism and slimming. When there are no disagreements, it is called “herding”

Frankly, I miss that “lady”, Cheryl, who made comments about the stock market – to everyone’s dismay. If people had listened to her, they would have made money – so far.

My own put options on AAPL went down the drain – I was perhaps 12 months too early. I did the same foolish thing for GS – and have lost 2/3 of my outlay in two months. These options don’t expire until next January so all is not lost – yet.

[Nassim]

The trick with ZH is to skip any comment that is less than 3 lines long – that leaves only 5% of the comments. I find that works quite well.

I don’t know much about sociopaths – except that I partly moved to Australia to get away from some of them – but it seems that they find this 3 line barrier almost insurmountable.

[Nassim]

Bukko,

IMHO, there is a trade-off between having all the comments in one place and having all the comments sorted by subject.

In a similar fashion, there is a trade-off between having a totally rational and well-argued position and one where it is more emotional and less boring.

[Author]

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