The Global Village Idiots

Posted in Australia, Europe, Global Warming, Globalism, United States on July 15th, 2009 by Jacob

15 July, 2009

The G-8 Plus meeting in L’Aquila, Italy has finished with the usual pre-scripted, tears generating worded declarations which can be summed up along these lines:

We, the one who know best, [rubbing of hairy chests] agree that global problems require global solutions and regardless of what the people who elected us think about [insert issue here] and about spending their money are going spend it on their behalf anyway and by the tonne.

Much of the time and media management (i.e. propaganda) of this charade was devoted to Climate Change, a euphemism for Global Warming, that is much like the tale about Herscheleh from Ostropol, a fictitious folkloristic Jewish comedian, prankster and village idiot figure in !8th century Eastern Europe:

One early morning, just before dawn, as the folks were on their way to the synagogue for the Shaharit (early morning payer) they notice Herscheleh under the lamp post, circling the post scanning the ground.

“Herschel” said the rabbi “What on earth are you doing here this time of the morning?”

“I lost my key” replied Herscheleh

“Where did you lose it?” inquire the rabbi

“There” said Herscheleh pointing into the darkness away from the light of the lamp post.

“So why are looking for you key in here if you lost it there”? persisted the rabbi with a puzzle.

“Because the light is here Rabbi, not there” replied Herschel with a smug.

The same goes for the leaders of G-8, the eight largest economies in the world, are all in deep economic disarray which they have no idea as to how to get out of it, using climate change as a decoy away from their incompetence.

The G-8 Plus (some of the G-20) leaders declared amongst other things that they

[R]ecognize the scientific view that the increase in global average temperature above pre-industrial levels ought not to exceed 2 degrees C. [highlight added]

Scientific view, what is it? Science does not have views, sciences has hypotheses which are either proven, disproven or remained unproven. Views express by scientists are only views and are as valid as anyone else’s view, there is nothing scientific about a scientists’ views.

Don’t let them (the scare mongers) fool you, it is not the first time, and probably not the last time, that politicians use science as a fig leaf. We all remember Al Gore’s proclamation that “the science has been settled” and global warming is has been proven by “a scientific consensus” placing science on par with beauty pageant as to picking winners.

Science is never settled and it is not about consensus, science is about selecting hypotheses and proving them (or not). ask Copernicus and Galileo Galilei who, contrary to massive scientific (and theological) consensus, risked their lives and disproved geocentricism. Had science been about consensus, who knows, we may gave still be walking this earth believing that it is flat and that we are the centre of universe.

One can imagine the UN Intergovernmental Panel for Geocentricism warning us of the danger paused by people such as Copernicus and Gallie.

The “science” of global warming is based on two mutual inclusive hypotheses (meaning BOTH must exist) and they are that the increase in CO2 concentration in the atmosphere is THE CAUSE for global warming of the planet AND that the increase in CO2 is cause by human activities (anthropogenic).

The facts of the matter are that NONE of these hypotheses have been scientifically proven!

Bear in mind, the CO2 concentration in the atmosphere is 350ppm (parts per million), compare it to a teaspoon of sugar in a standard glass at about 2,500ppm. More important the so-called “carbon pollution” is only 4% of the atmospheric carbon dioxide (14ppm).

So what are we talking about? Nothing, nada, tipota, gurnischt! BUT the echophiles always come up with escaper route and their escape route is something called the Precautionary Principle, another non-scientific PC term which is neither precautionary nor a scientific.

Under the pretence of science those echophiles tell although we don’t really know what cause global warming we better pretend and behave as if it is manmade carbon dioxide just in case (JIC).

Absolute crap! We already have scientific (mathematical) tools to deal with decision making under uncertainty, it is the Mathematical branch of Operations Research that deals with such questions.

For example Operations Research is used to determine how many bank tellers or supermarket checkout will be setup given a the pattern of the demand for the service and acceptable level of customer queues. The Bank or the Supermarket does not construct 500 service point just in case a one time unusual demend.

BUT, Operations Resreach is based on sound mathematical rules not some eco-whacko furphies such as the “science” of global warming.

Do you really want to use Precautionary Theory? Fine, go right ahead; lets see: Helmet, sky-divers suit, parachute and ejecting seat for every airline passenger, JIC; mandatory crush helmet and fire suit installed in every family car for every passenger, JIC; a man with a red flag in front of every car (with phosphorous vest and a hard hat), JIC … I guess that you get the idea.

Use the precautionary principle argument when you run out valid arguments for your case.

* * * * *

The last two counties to fall to the global warming hoax was Australia (in November 2007) and the USA (in January 2009). We now have almost a global unanimity on the issue among almost all politicians of all persuasions which is frightening – To me it is a true conspiracy even if I am not one who for conspiracies.

If you think that “conspiracy” is too stronger word for it how about reading of the Declaration Of The Leaders The Major Economies Forum On Energy And Climate that formed a part of the G-8 Plus in L’Aquila meeting which foreshadowed global climate change measures not normally spoken about, not loudly anyhow.

In addition to emission trading (however such scheme named) there is a unanimity on a MASSIVE GOVERNMENT SPENDING, over and above the various stimuli already flushed down the drains, and

dramatically increase and coordinate public sector investments in research, development, and demonstration of these [green] technologies, with a view to doubling such investments by 2015 [Emphasis added]

Simply put this is a hijack of the global economy by putting obscene amounts of money into the “greening” of our economies.

The last ecophile to join the global war4mning asylum, President Obama, glorified Spain and other countries and use them as examples for the USA to follow, for their “progress” in greening their economies, some six moths ago he said in Bedford, Ohio that:

And think of what’s happening in countries like Spain, Germany and Japan, where they’re making real investments in renewable energy. They’re surging ahead of us, poised to take the lead in these new industries.

This isn’t because they’re smarter than us, … It’s because their governments have harnessed their people’s hard work and ingenuity with bold investments – investments that are paying off in good, high-wage jobs – jobs they won’t lose to other countries. [Highlight added]

Not quite Mr. President, a Spanish academic, Dr. Gabriel Álvarez of the Juan Carlos University in Madrid has published a study that shows, amongst other things, that

we find that for every renewable energy job that the State manages to finance, Spain’s experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average [Highlight added]

–Summary, No 2, pg. 1

(I strongly recommend that you read, at least, the whole summary on pages 1-4)

The loss of jobs cited by Dr Álvarez is primarily due to high electricity charges, up to 7 times the market level, that are forced on industry, particularly electricity intensive ones, such as aluminium, steel, other metallurgy, food processing and tobacco. They all move their operation to countries who will not have a bar of this stupidity (eg China, India, Vietnam) and who guarantee low electricity charges for years to come – China is connecting a new (coal fired) power station to their grid every 10 days or so.

In fact the actual loss of jobs to the economy is more then 2.2 per each “smart” job but I leave it for now mainly for sake of simplicity.

* * * * *

As important as jobs are there is something even more insidious that I wish to draw your attention to but I need to explain it a bit first;

Suppose that I am a tomatoes’ farmer, growing your normal humble tomatoes and selling them to the local supermarket for years at market prices that fluctuate with supply, demand quality etc. Nothing to write home about.

One day a man from the government comes around and he want me to grew a new type of pear shaped “green” tomatoes which are environmentally friendly thus give me the opportunity to be part of the movement to save the planet – ain’t that exciting?

I tell the man that I love to help but… those tomatoes are hard to grow, the farm machinery that I need for them is very expensive, and has long period of down time, the yield I would per acre is about 12% of I get now and that them eco-friendly tomatoes are very susceptible to the weather and insects. According to a quick calculation I would probably need to charge about three times the prices I get now and all that I don’t even sure that people would like such tomatoes. “Thanks but no thanks, I pass” I conclude.

To my surprise, the man smiles and says that the government is aware of all the difficulties but here is the deal: The machinery and other investment I need will be provided by the government, the government also guarantees the price I would be getting at about 6-7 times what I get now AND most importantly the government guarantee the sale of the whole crop.

I go back to do my sums and discover that with such massive help I would be earning some 17% on my investment compare with 4% that I get now, wow!

Now my friends, instead of tomatoes think of “renewable energy” and you would immediately understand the attraction global warming has to the likes of GE and Suzlon who adopt global warming AND GOVERNMENT SUBSIDIES all heartedly.

So much so that they even “grow” their “tomatoes” in (wind) FARMS, this gives the farming profession a whole new meaning.

If yo were a CEO of any company and had the opportunity to earn 17% return on your shareholders capital, you too will jump on it irrespective of your opinion on the “science” behind it, I know I would, it would be incumbent upon me to do so.

In fact in total subsidies, paid-up and committed, Spain, a country of 46 millions, spent some $36 billions. If America spend the same on a per capita basis it would amount to about $235 billions.

So generous was the Spanish program that it influenced the financial markets and created an investment “bubble” paused to explode in a middle of a global financial crisis that forced the Spanish government to tweak their generosity back somewhat.

And what does that mean in terms of your air-conditioning and hot water regulators? Dr Álvarez worked it out as an increase of 31% in electricity expenses, payable either on you bill or by your taxes.

I hope that now you see why we all going to get carbon trading of some description – much of that money has already been spent. It is now time to pay for it, just watch it coming.

(BTW, has anyone studied the relationship between wind and photovoltaic farms in their states and their state deficit? e.g. California)

© Copyright Jacob Klamer 2009
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Sleeping On The Floor Movement

Posted in Australia, Current Affairs, Environmentalism, Global Warming, Social Engineering, United Nations, United States on May 21st, 2009 by Jacob

21 May, 2009

Studies have shown that 95% of people die whilst laying in bed. I can no longer remain silent on such mass slaughter of innocent people by the multinational bed and linen corporations, in particular women and children. I therefore resolved to create awareness of the challenges ahead and establish the Coalition For Sleeping On the Floor.

The United Nations Intergovernmental Panel For Sleeping Change (IPSC), that comprises of the best scientists research funds money can buy and Unocrats, recognised my efforts and produced its First Report On Sleeping Change in preparation for the Bedford Protocol On Sleeping Change.

According to the IPCS report, unless a drastic action is taken to reduce sleeping in beds habits, mathematical models have shown that nearly 40% of all people living today will die by the year 2050 and 99.9% will be dead by 2110, shocking results indeed!!!

In a speech before the Bedford Protocol delegations I said:

There is a sufficient scientific body of consensus, the science is settled, we must act and we must act now! sleeping on beds is no longer a sustainable option. We must come together (but not in beds) and meet the challenge bed-head on and rid the world of beds before we shall all perish.

Former Vice-President, the inventor of the Internet and Nobel Prize winner Al Gore, joined my efforts and produced an astonishing docoganda called The Embedded Truth in which he revealed astounding statistics that the death rate per hospital bed is 97.3 times that of a domestic bed actualised the urgency of action. Mr Gore moved for the immediate ban on hospital beds to the applaus of the enthusiastic crowd.

In his docoganda, Mr Gore, holding a hockey stick, pointed to large graphs on the wall behind him showing a steady death rate against number of beds going back to the stone age until the 20th century when both number of beds and death rate picked suddenly hence the name hockey stick. He added:

The is no doubt, ladies and gentlemen, that the increase death rate is due to manmade beds. As you can see [pointing to the beginning of the graph] the death rate in the stone age is very law indeed, we now know for certain that it is attributable to the lack of beds.

Despite a concentrate efforts scientists were unable to unearth any death certificate from the stone age thus concluded that people did not die during the stone age because there were no beds back then

The Bedford protocol for sleeping change called for a gradual reduction in concentrations of beds to 50% by year 2050, 100% by year 2100 and 150% by 2150 (to be on the safe side). At the suggestion of the Women Against Going To Bed With Men, the habit of two people using the same bed was declared disgusting and banned (unless both bedded are of the same sex).

Ms. Penny Worth, the Australian Minister responsible of sleeping change said:

We cannot allow irresponsible people negating the benefits of reduction of beds by sharing the remaining beds. However, we are cognisant of the human rights issues involving with same sex bonking thus have made some welcome exceptions

* * * * *

Sleeping on the floor has been proven environmentally friendly too. Not only you will be closer to nature and to your ancestors but by us all sleeping on the floor we shall no longer be depended on foreign imports of lead pained beds (ichs) from China carried by foreign own ships propelled by dirty fossil fuel!!! Sleeping on a the floor has a smaller carbon print thus it is considered socially responsible.

It was also shown that as people sleep in floors their lower position viz-a-viz the stratosphere means that the carbon dioxide they exhaling is less likely to reach the stratosphere, thus reducing global warming.

In a teleprompter shattering speech, president Bedvasser said:

America is addicted to its beds, we can no longer sustain such out of control beds. In future American bed manufacturer shall be required to conform to the government smaller SBEU (Single Bed Equivalent Unit – a scientific bed measurement unit) per person.

America can no longer afford irresponsible behaviour such as person sleep alone on a king size bed of 2.75 SBEU’s. I therefore announce a new bedding targets which will come into effect immediately.

The Australian Prime Minister Kevin Tucheslaker said me-too and introduced similar measurers in Australia in order to save humanity, as he put it. Somehow the fact that if we all perish tomorrow the affect on the world population would be a reduction of 0.35% escaped him as did the fact China will make up such shortfall by next Friday.

However, member states of the Non-Aligned Movement of the UN, otherwise known as the Third World countries, who in fact controls the voting of the UN General Assembly were allowed to continue to develop sleeping in beds habits. Their UN spokesman, Mr. Bunkie Moon said:

For centuries we slept on the floor whilst people in America and Europe were tucked in beds under worm quits on soft matrasses with electric blankets turned on “max”, it is now our turn to enjoy such luxuries.

(Privately Mr. Moon was concerned that unless there is allowance to his country his first name may be politically incorrect.)

When the USA representative, Ms. Julia Gotobeds, attempted to warn Mr. Moon of the dangers in adopting such risky sleeping strategy, Dr. Shi Tin Bed from China mumbled something in Chinese, a keen simultaneous translator voice was heard whispering in the earpieces a second later:

We don’t care if our people will die, we have too many of the anyway, serve them right for breeding like rabbits.

In order to avoid objections and procrastinations by the all powerful Bedding Industry, the conference decided to establish a new financial instrument Bed Sleeping Credits (BSC) a system by which a Monopoly-like money is transform to real money. Governments will issued large corporations with BSC’s on the basis of contributions in the last elections (when relevant). Those credits will be traded on the stock exchange. People who cannot fall asleep on the floor can buy such credits to compensate society for their anti-social behaviour. The system will be known as Nap And Trade.

* * * * *

One small bald with glasses and goatee German mathematicians, Dr Hans Sensemacher, tried to explain to the conference that the existence of strong mathematical correlation between two variables is not a proof of cause and effect. It is possible, he argued, that laying in bed may be not be a cause of death but a consequence of the more likely causes, such as illness, accident or old age.

He was booed down by angry participants calling him sceptic, right winger, redneck and neo con. Later the conference heard From Congersman Bernie Klieneweewee that Dr Sensmacher been receiving moneys for his research from the giant Gootschluf matrasses manufacture, of Bavaria and the Iranian president’s cousin, Dr Ahmedpeeinbed.

Post scriptum

On the following morning Greenpeace, World Wildlife Foundation (WWF) and the Wilderness Society raised a strong objection to the elimination of beds altogether because, they claim, it destroys the habitat of bed-bugs and, if such destruction of habitat proceeded with, it will bring bed-bugs to the brink of extinction.

A world without bed bugs is considered even greater environmental disaster than a death of a few people.

The BBC together with the New-York Times, launched the Save The Bed-Bug campaign featuring the great environmentalist Mr David Attengetter shown on TV playing with cute bed-bugs providing running commentary of their contribution to our planter’s fragile eco-system (must have one of those).

© Copyright Jacob Klamer 2009 – all rights reserved.

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Stimulate Me, Gi’me A Drink and Make My Bed

Posted in Australia, Europe, Social Engineering, United States on February 12th, 2009 by Jacob

12 February, 2009.

When I wrote the original Thank God There Is A Global Economic Crisis about two and a half months ago, I did not expect my cynicism to materialise, or at leat not so soon.

It was a mere two weeks after another self-proclaimed fiscal conservative Barack Obama joined the host of fiscal conservatives world leaders, including our own hollow man, Prime Minister Kevin Rudd.

Fiscal policy is about government active involvement (or not) in the economy through government revenues (taxes) and expenditures (services such as the law and order, security, social security etc.), fiscal conservativism is keeping the government books balanced.

The collapse of the American Sub-Prime market had little direct affect on Australia, thank to the pervious conservative government who had paid off all of its successive Labor governments debts and left office with nice cushion of budget surpluses, shovel ready for new socialist government to put to waste.

Despite its love affair with globalism, The Howard government ensured that Australian banks were regulated sufficiently to shield them from the effect of the collapse sub-prime market as act of prudence, long before the ugly sub-prime raised its head.

This is not to say that we have not been affected by the economic downturn that followed the financial meltdown on Wall Street, but to spell out that our state of affairs is a lot different from that of the US and Europe by a country mile.

* * * * *

However, being in a better situation does not suit our illustrious hollow man Kevin 747 who wants to be like the big boys on world stage so he can play with them. He wants to appear doing something BIG, anything, thus stimulus out of all proportion to our size is the way to go.

We are going to get it, whether we need it or not, just because Kevin 747 wants to grand stand on world stage as if he is a decisive statesman.

The new buzz word is stimulus. It is a code word that describe how YOUR MONEY and mine is wasted by our governments without any accountability on social agendas, supposedly to create economic activity.

The idea is that a dollar that is spent by our government on building a bridge, as an example, may circulate a number of times and create economic momentum through what economists call the multiplier.

Say, the government build a bridge. They hire workers, buy cement, steel and other components and put it together. To have cement, there must be a cement factories that convert mined limestone, soda ash and other chemical and energy into cement.

To have still, we must have steel mills that need iron ore, coal, scrap and other trace metals and energy to make steel and they also all need ships trains and trucks to move raw materials and bridge components.

The workers on the bridge, the cement factories, the still mills, the ships, trains and trucks get paid and buy food, clothing, cars and plasma TV which in turn need more factories, shops and transport.

In other words, a dollar spent on, say, building a bridge, is spent a number of times through the economy depending on the multiplier of building bridges. This is the theory anyway.

This theory was developed by an English mathematician, turned economist and INVESTOR, John Maynard Keynes and what later became known as Keynesian Economics. Keynes believed that government should make the most of its economic powers and use it to achieve socio-economic goals.

On the other side of the scale is Milton Friedman was an economists who believes in the exact opposites, in free market with minimal government interference in the economy, also known as Friedmanism.

Whilst there is no decisive evidence that Keynes himself was communist or a communist sympathiser, nevertheless, Keynes is the darling of communism, socialism, liberalism and all other social engineering isms. Keynes has given them the left side of politics “scientific” all the excuses to interfere with the economy they need and, as we see, they use.

Here we have two diametrically opposing theories that beg the question “which is the correct one?” The simple answer is: none!. There are many conceptual contradictions and “cherry picking” of “facts” in both theories.

Economics is not a science, it is a set of theories based on empirical studies using (selective) quantitative and non-quantitative observations. Unlike science, economic theories are not results of proven hypotheses, they are just that, theories!

Some say that economics is the science that explains why its last prediction did not maderised.

Some goes as far as describing the economy as a power station and the people in charge of it as engineers who open and close valves, turn dials, switch pumps on and off, whereas the valves, dials and pumps are interest rates, taxation rates, government spending, surplus or deficit and so on – absolute crap!!!

In many case one cannot predict with certainty the outcome of a particular economic measure. Increase in official interest rate may be inflationary or deflationary, there are recent historical example to both. The same goes for other deliberate measures.

Just before Christmas Kevin747 use a stimulus of $ 14 billons and paid Australian age and disable pensioners a one off bonus. The idea was that because government pensioners are one of the poorest people in the land their propensity to spend is high thus most that money will be spent.

Wrong, whilst I had no objection to the bonus as such, stimulus it was not.

As it turned out , although there was improvement is Christmas retail sales, it was a oncer. Much of the money that was spent on Christmas presents ended up in China where it was only a drop in the ocean in tern of stimulating anything but Kevin’s standing in the opinion polls.

* * * * *

I cannot recall so much identical rhetorical hard sell of policies in so many countries, although the circumstances in each vary dramatically. Do you really believe that there is the one, and only the one, medicine that cures all economic ailments? Come-on!

Stimulus will “kick-start” your country’s economy, create employment, unfreeze credit, eliminate toxic assets, get rid of inflation, improve your country’s terms of trades, balance of payments etc. etc. etc. If you believe in it, I have bridge across Sydney Harbour and a fancy looking opera house to sell you.

Although Keynesian economics was dead and buried for many years in many countries, its flame kept burning in the corridors of the International Monetary Fund (IMF), after all John Keynes was one of its founding father. Together with global socialism, which is now in control the governments of most developed nations, they all got this dead theory out of its grave, polished it, resuscitated it so it can be reused and push the socialist agenda once more.

Indeed the IMF has been used as a fig leaf for the socialisation of the western democracies . The IMF, the bastion of globalisation, an organisations with no electoral accountability or allegiance to anyone but itself, is cited by our politicians as the economic authority for enslave us, our children and grandchildren in gigantic debt.

Just look at the proposed “stimulus” of your country and you will quickly realise that it is no more then a badge social engineering agenda. Most, if not all, of the proposed expenditures covers IDENTICAL ITEMS of socialist agendas and common budgetary expenditure that belong in a regular budgetary process. Much like it all came from one place, well it has, the IMF.

Repairs to infrastructure, particularly bridges, “investments” in schools, Internet infrastructure, buildings insulation, alternative energy are no doubt familiar to you from debates about the so-called stimulus in your own country. BUT you may not realise that the actual items that make the stimuli in all countries (that have one) are identical.

So is the rhetoric about the “urgency” to adopt the stimulus measures. Our very basis of democracy, the parliament is being portray as obstruction, that may bring a “catastrophe” upon us, only because it wants to do what houses of parliaments do in democracy. Cesar does not like it when the senate asks question.

Incidentally, if you listen carefully, you will quickly notice the similarity between the scare mongering of the stimulus and that of global warming. The connection is self evident, both are spins of a socialist agenda.

Would you buy a car when the salesman pushes you to hurry up and sign on the dotted line, not ask too many question because you would loose this unique, one in hundred years, opportunity?

Remember these are the very people who want you to live in a dark and have cold showers to save the planet from a looming global warming.

By and large the global financial crisis and the subsequent global economic downturn is a direct consequence of globalism. It is the free market that enabled the toxic assets to freely move across borders among countries as contagious disease would spread across an hospital without an isolation ward.

Now that we have nearly all the hospital’s patients and staff infected, the cure, we are told, is to give them all the same medicine BUT NOT isolate them because they must all get well together, or not at all. This is what globalism is all about.

* * * * *

One of the few idea that made any sense to me in the American stimulus proposal was that stimulus money must be spent on American made goods. After all the idea is that the steel and cement used to construct a bridge should come from home production and generate employment.

The idea that American money (I use America as an example, the same is true to any contry), borrowed by the American people, which the American taxpayer would need to repay back is used to create American Jobs by using it to purchase American goods horrified the globalists who opened a scare campaign about “trade wars”.

Suppose that you may fall on hard times and may consider to severely curtail this year’s Christmas presents for your kids, but the government tells you: “Oh no! don’t even think about as much as symbolic cut in the level of presents you have been giving to your neighbours kids, if you do we’ll call you protectionist or, God forbid, isolationist” – this is in fact what the IMF saying to every country these days. We don’t care what you do to your own people but you must continue and protect other people.

In a recent speech to the governors of the South East Asian Central Banks (SEACEN) the Managing Director of the IMF, Dominique Strauss-Khan said (inter-alia):

Some countries are trying to make government support of banks conditional on their giving priority to domestic borrowers, to the detriment of financing across borders. This will hurt emerging economies, whose growth depends on access to foreign bank financing. It is protectionism in the financial markets, and its consequences could be as damaging and dangerous as the trade protectionism of the 1930s.

Bull dust!

What got America out of the great depression of the 1930’s was not globalism, but the American manufacturing industry production efforts for the war AND the fact that by the end of WWII American industry was the only one standing. Beside, traditionally America always knew how to protect its own interest.

For years American aid was contingent on the fact that the recipients of such aid must use it, as much as practicable, to purchase American goods. For years, at least 50% of American aid MUST be carried on American flags ships, although freight on American flag ships were twice as dear as other flags – those were the rules.

Anyone who tell you that you can stimulate your economy and remain globalist at the same time is a liar, a fool or both. Throughout history you will not find a single instant of economy developing into world class without actively pursuing protection.

Britain of the industrial revolution until 1846 when they repealed the Corn Act, the USA from 1860 to 1914, Germany from 1870 to 1914, Japan, Korea, and India of after WWII and of course China of today all pursue protectionists policies. As a matter of interests all four American presidents carved out in Mount Rushmore, Washington, Jefferson, Lincoln and Theodore Roosevelt were protectionists.

In the face of “cheap” imports from the USA and Continental Europe, even the darling of the stimuluphiles, John Keynes, advocated tariffs barriers in 1930 to protect British industry.

As you see, stimulus is not about kick-starting the economy, it is not about job creation and protection, it is all about IDEOLOGY.

* * * * *

Yet we the people can only watch in horror how our elected representives allow our governments condemn us and our descendants to generations of economic turmoil of debt, high interest, high taxation and inflation. Is this the planet we suppose to save from global warming?

When all those obscene amounts of money be wasted, nothing much will change except we each have national debt of colossal proportion. The so-called stimulus will not work because it cannot work. If you want to rebuild our economy, rebuild our own productive capacity first.

We cannot have economy without a strong manufacturing, construction and agricultural industries. Serving each others’ drinks and making each others’ bed is not an economy.

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Thank God There Is A Global Economic Crisis

Posted in Australia, Other Current Affairs, United States on November 26th, 2008 by Jacob

26 November, 2008.

Those of us who served time in the corporate sphere know only too well how the financial skeletons are hidden from shareholders and the market until they can be buried in an avalanche of unrelated bad news or can be “explained” by “circumstance beyond management control”.

For example, if a company had overextended credit to a customer that later went bad, such bad debt will stay on the books as normal trading debt until something else happens, something that will enable a quite write-off, no ‘irritating’ questions asked.

The current economic crisis is a godsend opportunity to many management teams allowing them to clean out their closets and they do. Take a look at how many skeletons that are bought out are bone dry, they have been dead for years but now is the time to bring them out and blame the death of the respective bodies on the current global financial crisis as if it had just happened … Thank God there is a global economic crises.

In corporate politics, as in political politics there are two simple rules, the first is that your success are in facts your boss’s successes and your bosses stuff-ups are yours. The second rule is that no matter how certain the anticipated benefits are, you ONLY take actions that you can “EXPLAIN” should thing turn sour. Global economic crisis is an ideal excuse, it is big enough to bury just about anything in it. … Thanks God there is a global economic crises.

* * * * *

No difference in politics. Our illustrious PM Kevin707 who is just back from yet another globe trotting exercise embraced the global economic crisis with both hands with the normal clichés such as “global challenges require global solutions”, “acting now will cost less acting later” (hey didn’t we heard this argument in relation to global warming?) and of course the continuing mantra about “free” trade, but that is another issue.

In the midst of all this, our Government is rushing through legislation, that although part of their election campaign, is strengthening the unions and have the potential to increase unemployment.

Until now the government was reluctant to introduce that legislation, to the great infuriation of the unions, because of the risk that it may increase unemployment and as we all know Kevin707 is a fiscal conservative, at least a self professed one (didn’t I hear this term elsewhere? Yes I did!) .

So you can now see, when we all busy watching and reading about government assistance, guarantees, bailouts, stimulus, insolvent banks, crushing car makers etc, Kevin707 slip this stunt on us and sure enough, I bet my bottom dollar that the resultant unemployment will be blamed on the economic crisis. Thank God there is a global economic crises.

Similarly, our government is pushing ahead with their Emission Trading Scheme (ETS) which apart from being a total deception, going it alone is and economic suicide bomb. What would happen to the little manufacture base left here if they have to pay such heavy fine for the privilege of having factories here? You got it! The will offshore themselves more people out work but …. Thank God there is a global economic crises.

And that is not all. The socialist have some more “progressive” policies such as (government) paid maternity and paternity leave. I bet you that we are going to get an influx of “family reunions” from the Middle East shortly, but … Thank God there is a global economic crises.

* * * * *

How is that relevant to my friends outside Australia? As I showed in my previous blog The Hollow Man there is very little differences in socialist policies no matter where you are. It appears that with the election of Barack Obama in the USA he is not only the first African-American president but also the first Labour president of the USA. from January 20th 2009 we will have wall to wall Labor governments in USA, UK and Europe as well as Australia, all following similar policies which are to economic depression what gasoline is to bushfire, but … Thank God there is a global economic crises.

The rhetoric is virtually identical, global warming (climate change), fiscal conservatives, free trade, stimulus, Keynesian economics (of government intervention) etc and are not unique to Australia. What also is not unique to Australia is when such socialist policies will do what socialist policies normally do our politicians around the glob will be quick to point out to the global economic crisis with or without some more summits, but … Thank God there is a global economic crises.

Amazingly all our Labour governments, since the 1970’s all suffered from global economic downturn that led a government of a population equal to that of New York City, to a debt of $90 billion in 1996. It took our conservative government 11½ years to dig us out of our of hard labour sentence, pay our debts and build some nice cushion surpluses, the Asian financial meltdown of 1997 notwithstanding, but a mere year in our current hard labour sentence we already hear something we had not heard for a decade and that is the “D” word, DEFICIT but … Thank God there is a global economic crises.

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The Hollow man

Posted in Australia, United States on November 8th, 2008 by Jacob
8 November, 2008

Once upon a time there was a hollow man with a large ego who, since he was ten years old, dreamed that one day he would become the leader of his people.

Not much is known the man’s childhood because the man had been quite vague about these days and in some cases downright deceitful.

From the little we know, the man’s father died, some said from effect of alcohol, when he was a young boy, leaving the men’s mother to car for him. Notwithstanding the hollow man did well at school and proceed to one of the best universities from which he graduated with high distinctions.

University life also served as a stepping stone for politics for the hollow man. Like some many student his age, he joined the student branch of the party that believe in social reform, trade unions, redistribution of wealth and socialism albeit the word itself does not form a portion of the name of The Party.

After graduation the man went to “work” on his dream. He carefully selected his place of employment on the basis of their political potential; mixing with powerful and wealthy people who can advance his ambitions. He was particular careful to avoid real responsibilities as those can lead for the occasional failure that may blot future résumés.

The hollow man was elected to the legislature when he was in his early forties. His arrival was marked by his famous inaugural speech, hollow or not, his self publicity machine went to work as he waited the opportunity to spring into the limelight.

Indeed when the opportunity arrived he challenged the “establishment” of the party for the party nomination and despite “family ties” and the experience of his opponent the hollow won his party nomination. A bitter election campaign followed.

The hollow man’s opponent now was a conservative man named John, much senior in age and with over 25 years experience as an elected member who also enjoys the benefits of incumbency. The hollow man would need all his wits to and a lots of money to win this battle.

The ensuing election campaign was one that was never seen before. The conservative opponent experience and age were portrayed as stuck in the past, the same old failed policies of the past in clear reference to his opponent’s age whilst the hollow man himself was portrayed as “young” and “cool”.

The hollow man has prove himself as a great orator although despite the hysteria of the young generation, his rhetoric was somewhat lacking when it came to the older generation. He was further greatly assisted by the mainstream media who almost in unison were all openly actively supporting him.

He opposed the war in Iraq but supported the War in Afghanistan (and saw no inconsistence in that) he supported socialistic program but described himself as economic conservative in fact many people said that he walked the two sides of the streets on just about any issue as he modified his policies to suit his audiences

He stuck to meaningless, yet emotional slogan such as change, hope and working families. He was the first to exploit the power of the Internet for political campaigning.

He won the election in the following November decisively, although not in what you would all a landslide.


No, my friends, this is not the story of Barack Obama, that was the story of the election of Kevin Rudd in November 2007 as the Prime Minister of Australia by removing John, Mr. John Howard from office.


I was struck by the similarities between the two from the first time I heard Barack Obama and I often mentioned it to my American conservative friends. As we down under have an handicap of 12 months on you Americans, let me tell you about the “achievements” of our hollow man whilst you were busy with your elections, a sort of Back To The Future, as I dubbed it at the time.

Firstly soon after taking office, our government ratified the Kyoto Protocol an utterly symbolic step but nevertheless gained a round of applause by the world greenery convention in Bali. You see our hollow man LOVES the world stage.

At the same time, and in an attempt to further impress the global eco-whackos, our illustrious Prime Minister and our Minister for the environment and stupid statements, inflated their chests and ordered the Australian Navy into the Southern Oceans to chase away the Japanese Whaler to discover that, according to the Antarctic Treaty to which Australia is a member, no military vessels are allowed – what started in a blast ended in a whimper by sending a “Custom Vessel” to “monitor the whaling.

This was only the first of making policy on the run as we have learned since.

Next the government celebrated a sorry day to the indigenous people of Australia, another divisive feel-good symbolic act that socialists are really good at. You see, this was our equivalent of the race card or the coming together cliché we often hear (and I thought that coming together is something people do in the privacy of their bedrooms 🙂

Next we had a funfest summit of one thousand of the brightest and smartest in the country to “recommend” future action Australia should take in the 21st century. Before the election Kevin07 had told Australians that he had a plan for the country, after the election he needed Kate Blanchett and her like to tell him what to do.

In fact he did not need them to tell him what to do, going by the list of invitees, he needed them to tell him to do what he wanted to hear – the diversity of opinion was limited only by Kevin Rudd’s opinion. It was totally a Kevin07‘s scripted event.

Talking about Kevin07, Within a few month after taking office, our PM was dubbed Kevin707 after the RAAF (the Australian air force) Boeing 707 that used by the PM. By last September, when he was in office for merely 10 months, Kevin707 had accomplished 16 overseas trips, the man really likes the world’s stages which he spins to portray him as international statement. He enhances his image further by selectively leaking private conversation he has with word’s leaders to big note himself.

And of course there is climate change, the imaginary “crisis” that politicians love to exploit by spreading fear that enable them to push their agenda. Until about one year ago, it was only Australia and the US that stood firm against that global deception, Australia “fell” last November with the election of the Rudd government and the USA will no doubt follow under Obama.

It will not be long before we all can play the “spot the difference” game between Kevin07 and Obama08, In the meantime I have placed my bullshit detector on “silent”

© Copyright Jacob Klamer 2008
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Oil Ain’t Tomatoes – Part II

Posted in Oil Prices, Other Current Affairs, United States on July 28th, 2008 by Jacob

28 July, 2008

In  Part I I made some comparison between crude oil and tomatoes for the purpose of illustration. Crude oil, (and indeed petroleum products) and tomatoes are commodities, commodity is an undistinguished article of trade. This to say that you cannot distinguish, nor do you care to, assign value any characteristics which is not  generic to such article. For example you would assign monetary value to octan rating of your petrol (gas) but none to the refinery that produced it or the source of the crude that was used as stockfeed.

The same goes for tomatoes. You would assign value to it’s species, size, and degree of ripening but would not care less where it was grown or who grew it. The “brandlesness” of commodities means that the competition between the sellers (or buyers) is on price only, the nightmare of every marketeer.

In fact millions or even billions are spent on branding commodities by heavy advertising, the idea is to get you to believe that one brand of baked beans is better then the other thus be willing to pay more those beans that are labelled “Heinz” then for the generic brand of your supermarket, although both may well were canned by the same cannery and the only different between the two is the label on the can.

However, there are some fundamental differences between oil and tomatoes and that that is that tomatoes are product that it’s availability is established after it has been produced whilst oil has its value whilst it is still in ground. Further, tomatoes are perishable, meaning that they have a relatively short life after production, whilst oil does not change its qualities with time.

Suppose you bought tomatoes futures options from me for next season, I now MUST produced those tomatoes for you irrespective of market price to be ready to deliver to you should you exercise your option. But, and it is a big “but” if you will choose not to take delivery of my tomatoes because you will be able to get them cheaper elsewhere, I would have to cold store them whilst looking for buyers whilst my tomatoes still have value, otherwise I would lose all that I had spent on producing them.

On the other hand if the crude oil futures option is not exercised, it had costed nothing, such oil simply stays in the ground, the oil producer does not even has to pay for storage, his “next season” oil is waiting. He can offer it spot or just ‘sit on it” for a while.

A short Lesson In Economics

Economics is the art of explaining why the last (economic) prediction did not materialise.

(not me)

Firstly, although some would like to pretend otherwise, economics is not a science. Science is about observation and proving or disproving hypotheses, we don’t do that in economics. In economics we observe, theorise, hypothesise  and hop for the best. Economist cannot carry out experiments that prove or disprove anything.

Secondly, over the years economics was tainted with ideology between the two extremes of laissez faire a la (Milton Friedman) to John Keynes’s government knows best. Both gentlemen fail to convince me with their arguments, mainly because their explanation of (economic) events are mere OPINIONS, not facts.

Thirdly, most economic theories are based on two assumptions, one that all (or most) players act rationally and two that all players has the same information (not necessarily all of it).

Just think how rational is Hugo Chavez’s oil policy or the Arabs place oil embargo on the west in 1974. Further how much information professional traders have about electronic trading outside the USA.

We know, as a fact, that there is no shortage of oil, that the storage tanks of stockfeed (crude oil) and products are in good shape, all pointing to a supposed reduction of prices, yet crude oil reach its highest price ever a week or so ago (I’ll get to the current price fall later).

The feeble excuses from the so-called experts tells me that they are either fools or con artists, I doubt that the are fools. Sure the demand from China, India and other developing counties would certainly increase prices, but such increase is gradual. Chinese and Indian demand does not explain this:

Oil Price Band

Crude Oil Price Band

What about the hurricanes in the Gulf (of Mexico) excuse? How long a hurricane lasts? Three days, four, a weeks? How can that affect the GLOBAL crude oil prices when the storage tanks around the world are full. And once the Hurricane has gone and prices did not come back, they, the so-called experts need to find other “reasons” to explain the high prices,

How about Mahmoud Ahmadinejad threatening Israel and vice versa, Give me a break! Iran is on its last leg to stop being an oil exporter, they are already importing oil products because they lack refining capacity to satisfy their own domestic demand – petrol (gas) queues are commonplace in Iran of today. Iran is expected to continue to export oil until their Natural Gas (LNG) reserves can replace their oil export earnings which is essential for their development.

The crude market has already allowed for no Iranian oil export, when that finally happens the effect on the market will be negligible.

BTW Indonesia already stopped exporting oil for the same reason, domestic demand, and subsequently is no longer a member of OPEC, it did not make the news because the market had allowed for it.

Do you get the same feeling I have that Something is missing from the tale of crude oil prices.

Crude Pricing

As we saw in  Part I crude oil prices are set by reference to prices “Benchmark” or “markers”, those are West Texas Intermediate (WTI), New York Mercantile Exchange (NYMEX), Brent, (Europe), Tapis (far East) and of course OPEC Basket. These benchmarks are similar to the more familiar stock exchanges indices such as Dow Jones, FTSE (London), DAX (Germany), ASX (Australia),  TSE (Tokyo) etc. Each collects in formation on stock trading in real time and express it as an index.

A crude benchmark has two facets; characteristics (quality) and location where the crude is pumped (or gravity fed) into transport. The is expressed in US Dollar per barrel. Any variation in quality or delivery position is usually express as premium or discount off the benchmark, as the case may be.

For example, if the current freight cost from the Persian Gulf to US East coast is say $1.50 per barrel, the price for barrel of oil on the East Coast will be $1.50 higher then the price of similar oil in the Persian Gulf (all other things remain equal), simple logic.

Similarly if the cost of storage is $1.00 per barrel per month (I have no idea what the real costs are) and next month’s future price is say $130 per barrel, I’ll be happy to sell you oil I am holding for $129 today because it will give the same net that as if I sell it in a month time and pay out storage cost.

Crude oil in the ground has no storage costs thus a change in the oil futures immediately translate into the spot price. Do you see what I see?

With regulations and people standing behind your back watching what you are doing, it is quite difficult, if not impossible, to fiddle the spot market, particularly if you are dealing with wet barrels (the physical oil) but with the advent of electronic trading, particularly on non-American markets, the possibilities of manipulating the market are endless, if you have the motive and the dough of course.

Knock Knock Who Is There?

Knowing the motives for trading in the future market tells us who are there. There are basically three reasons for trading any future market:

  • Users of the product that is traded; those who take physical delivery.
  • Hedging and other long term funds; those who use the (future) market to hedge their investments by reducing risk, i.e. shield them from market fluctuations, particularly downturns
  • Speculators; those who are in the market to take advantage of short term changes in prices.

The only users of crude oil  are the refineries; to anyone else crude oil is a useless product. Refiners take positions on oil futures to protect the continued supply of future stockfeed (crude oil) at a known maximum price, remember, they can always not exercise their option to take delivery and buy in the spot market if the spot price is substantially (at least 10%) lower then their option price.

The refiners also participate in the futures markets by offering future contracts for their products, mainly gasoline and distillates (diesel and heating oils), thus it is only prudent for them to protect both their supply and the price the stockfeed needed to meet their obligations.

Sometime ago the aviation industry, namely the airlines “discovered” the futures market and have been high purchaser of jet fuel futures since. The do it to mitigate their fuel costs. The effectiveness of such strategy depends on many aspects but nevertheless the practices is wide spread among the airlines.

However, unlike Europe and Asia, the US does not have a futures market for jet fuel, thus the US airlines take positions on crude oil futures as a hedge against jet fuel price rises. But it goes further then a simple hedge, to hedge the costs  of one barrel (42 gallons) jet fuel the airlines need to buy 3 barrels worth of crude oil futures. Here you have it, a large demand for future “paper barrels” that is bought in order to be sold, those are the very same barrels that the refineries are bidding on to produce the jet fuel the airline are hedging – the dog is chasing its own tail!

Next are the hedge funds who use crude oil futures as part of their portfolio. One would expect the hedge to have commodity futures in their portfolio but the question is whether crude oil is more then just a part of the mix. To answer that one must know who are in the funds and what they actually hold.

Who Are The Real Speculators?

According to the Commodities Futures Trading Commission (CFTC) speculator is an entity that:

does not produce or use the commodity, but risks his or her own capital trading futures in that commodity in hopes of making a profit on price changes.

Such definition puts the hedge funds amongst the speculators, I disagree; speculation, in my view, must have short term aspect to it and whilst hedge funds may well speculate on occasions, by their very nature they are long term funds.

My definition of speculation is:

Speculation is trading with the object of taking advantage of short terms price differentials.

Hedge fund that hold a financial assets for 12 months is not speculating despite the fact that, by their nature, hedge funds “does not produce or use” anything. By the same token a refinery that produce products without having a ready market for it is speculating.

The reason I distinguish is that I see the speculators as harmless and their affect on prices minimal, this is not the case of the big funds, hedge and others such pension and super funds.

On 1 June 2007, the Dubai Mercantile Exchange (DME) , a joint venture between NYMEX and Mohammed bin Rashid Al Maktoum the ruler of Dubai (through a holding company) with the Sheikh of Oman in there too. Needless to say that DME is “regulated” by the government of Dubai, who???? … yes … Sheikh Mohammed himself!

Perhaps you care to take a look again in the crude oil prices and when prices last took off.

Since its inception, just over a year ago, DME traded about 390,000 future contracts (or 390 million barrels) of crude oil, this represents about 1 million barrels per day (mbpd) compares with United Arab Emirates (UAE) total production of about 2.5 mbpd.

How much UAE’s own oil is traded on the DME and what is the US portion is anyone’s guess but may I suggest to you that most of the oil comes from the UAE and Oman and most of it is in fact traded by American kind of hard to see the NYMEX get involved in exclusive trading between Arab Japanese.

Nice work Charlie, a semi American exchange operates under the radar of the American (or other consuming country for that matter) regulator, where the largest trader is the regulator. The optimacy of the golden rule, he who has the gold makes the rule.

And there is the so-called “Enron Loophole” that exempted electronic trading from  much of the regulation, whilst the loophole itself has been closed by the recent amendment to the Farm Bill, how much has skipped the eyes of the watch dog?

Here is a scenario, the total US annual consumption of crude oil is about 5.5 billion barrels, at “only” say, $125 per barrel makes the total value $690 billion, say $700 billion. The actual cash outlay to buy crude oil future is 10% of the value of the contract i.e. it takes a “mere” $70 billions to buy contracts that covers the US consumption for one year.

Question one: Who has the oil to offer such a quantity?

Question two: Who has $70 billion or so that can be used (or freed) to buy that quantity?

Question three: Do you still wish to explain oil prices by economic rules that are applicable to tomatoes?

© Copyrights Jacob Klamer 2008, all rights reserved.

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