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5th August 2008

Richard K Morgan.

Science fiction is one of my passions.  I prefer "hard" SF, although "Lord of the Rings" type stuff is grist for the mill.  In category "hard" the desirable features are introduction of likely science and the effect on human society.  e.g. "Brave New World" introduced a possible future given mechanical reproductive technology, and how such might affect society.  Richard Morgan has published five books, a series of three placed several hundred years in the future starting with "Altered Carbon", a singleton placed about forty years in the future called "Market  Forces" and a singleton placed about 90 years in the future called "Thirteen".

All Morgan's books disclose an author who has revolutionary politics.  In "Altered Carbon" it was the "Quellists", who were at the core fighting against the entrenched elite.  (One Quellist saying: "Human History happened because of the search by women for a decent orgasm").  The technology introduced in this series was potential immortality achieved via a digital device that stored the personality and memories.  The device could be recovered on death and placed in a new body (either custom designed, or from a criminal sentenced to many years of disembodiment). Of course "resleeving" (as the process of being embodied was called) was expensive.  The hero had a specialized form of psychological commando training, which removed his preconceptions about everything, and thus gave insight into others, and the ability to benefit from the insights derived therefrom. 

In "Market Forces" I could see echoes of our own corporate world with market forces run riot.  The innovation here was a legislative environment that allowed contesting of corporate promotion by challenges to the death on public roads.  The hero is an executive in a corporation that finances revolutions in third world countries so that it can obtain lucrative trade contracts with the client dictator.  Disputes between and promotion within corporations is by legalized games of "chicken" on the highways.  Again the theme is that rife elitism is bad.

A friend to whom I recommended "Market Forces" complained about overemphasis on sex scenes.  That was perhaps fair comment, because they went beyond similar scenes in "Brave New World" or "1984" where the sex scenes were employed to show an aspect of social interactions.

"Thirteen" is placed in a universe where super soldiers were manufactured around 2090 by various nation states by enhancing area thirteen of the cortex, which (apparently) had to do with aggression.  This is again an anti elitist book, in that it defines elitists as those variants (who have become our modern era politicians) who supplanted the "thirteens" who are defined as the dominant genetic variant from the pre nomadic-agricultural era.


12th August 2008

PRIVACY LEGISLATION

The Government has asked the Australian Law Reform Commission to bring out recommendations on PRIVACY.  Their recommendations are that harsh financial penalties should be given to those who infringe the privacy of others.  The media are very much against that bill, and not just the "National Enquirer" faction.  Barvennon has not yet contacted Lee Kwan Yew, but confidently predicts that the Island State would endorse such legislation.

Nicole Kidmann was not asked her opinion on such a law.  I would imagine that most people who make their living from their public image would endorse the notion of having a punitive veto on (true is not a defense) media stories about themselves.  The class of people who make their living from media image includes judges, actors, sportsmen wealthy businessmen and even some of the higher profile media people.  Oh, and POLITICIANS.  Of course the law would not be much use to Tom, Dick or Harry, because where would they find the money to enforce their rights?

We can admit that some people who are famous for scandalous behavior (like Paris Hilton) might not care very much.

However I would reckon that the vote is rigged, and the result a foregone conclusion.  What do you think?


15th August 2008

The Australian Reserve Bank is planning to reduce interest rates?

In the past 25 days the amount of US currency that can be purchased with $AU1.00 has fallen from around US 98 cents to about US 86 cents.  The price of oil has fallen from around US$150 to about US$115.  Gold has fallen from near $US1,000 to about $US800.

My own guess is that the above mentioned currency and resource movements are caused by hedge funds selling down oil and other mineral resources because their predictive software noted reduced world oil consumption.  That reduction was probably due to pollution control restrictions in force for the Olympics around Peking.  The nitwits in hedge fund management are so secretive and knowitall that they did not think to ask their analysts and in which case they might have realized the preceding, and covered their short positions.  I would suggest that my readers short hedge funds, because I do think hedge funds are not going to make very much money in the current quarter.

The Australian economy is showing a tendency to rising unemployment and rising inflation.  So far that rising unemployment is mostly due to the psychological effect of enthusiastic union activism on employers.  That activism results from the change of government and the repeal of the rabidly anti union "work choices" legislation.   The rising unemployment and increasing inflation resulting from the repeal of "work choices" was predicted on this blog last February.

If the Chinese stop buying so many raw materials the rot can be expected to accelerate.  The Bracks report (discussed last February) recommended a handout to the auto unions of several billion dollars (disguised as subsidies to auto manufacturers).  At least Bracks does not recommend an increase in tariffs.

So yes, I expect that the economy is going to grind slower.  Rising unemployment.  Mortgagee sales metastasizing from the poorest to the middle class suburbs.  Rising welfare.  Budget problems.

The Reserve bank is strongly hinting that the interest rates it charges banks will drop, and is attempting to persuade (bully) the big four banks to drop their lending rates commensurately.  They are hedging, and saying that any reduction will be their decision at the time.  As I walked past some of those banks today I noticed that they offering 8% up to 8.75% for 24 months.

GEORGIA and SERBIA

After the disgraceful way that NATO & the Clintons treated the Serbians over their imagined ethnic cleansing of Kosovo, I am not at all surprised that the Russians have moved to protect their citizens from the Georgian murderers in South Ossetia.  Trouble is, nobody trusts the Russians (except maybe the Serbs).  I warned that attempts to recognize Kosovo as a nation would bring problems.  South Ossetia should now be proposed as a new nation.  Admittedly, the population is small, but there are smaller nations.

Speaking of Serbia.  Milosevic was not going to be convicted of war crimes, so he was murdered before the judgment was passed.  (Did anybody say only doctors buried their mistakes?  Add UN liberals to that list!).  I suggest that the recently captured Karadzic should, for his continued existence, plead guilty, otherwise I feel that he will meet the same fate as Milosevic.  There is no way that Karadzic would be permitted a finding of "not guilty".  That would call into question the justice of the NATO intervention.

22nd August:   Christopher Hitchens writing in "The Australian" attempts to demolish the similarity between Kosovo and Ossetia but makes several mistakes. 
  1. There was no governmental "Serb cleansing" of Kosovar Albanians - the only alleged incident I can recall involved a couple dozen fatalities found in Kosovo.  The ethnic background of the fatalities reflected the local ethnic ratio.  The Serbs claimed that the fatalities were the result of turf wars between Albanian drug criminals (which the western press had promptly renamed the KLA).  That single incident, and a few thousand economic refugees seem to have been the sole basis for the NATO war on Serbia.  Russia on the other hand responded to Georgian military (aerial) action that (according to the UN) killed hundreds of Ossetian civilians.
  2. Hitchens uses Iraq examples.  Even he admits that Iraq is not the issue.
  3. Hitchens does not seem to know whether the Russians intend to absorb Ossetia, or create an independent nation, but he assumes both and castigates both solutions.
It would be nice if we could get consistent & unbiased reporting from Liberal journalists.  I suspect that a few years ago Hitchens was probably lauding those he now calls "the Clintonoids".   Subject selection is a political decision by editorial staff, but after that unavoidable political act, I would like to see those who think of themselves as journalists (rather than entertainers) make an attempt at honest reporting based on facts.

28th August

Capitalism in Crisis.

Let me define the term "capitalism".  The USA is not a capitalist government, it is a republic which has an economic system that has relied on capitalism and industrialism for production.  Capitalism arose when the steam engine was invented.  Prior to the industrial advances that followed that invention, road transport was most economical by an owner driver with a horse and cart.  After the steam engine, somebody with large amounts of capital could build a train service, and the horse and cart was marginalised.  So, "Capitalism" was born.  More recently, IC engines have restored the previous balance, and individuals can once again compete with capital(ists) in the transport business.  Extrapolating, Capitalism is going the same place that feudalism went with the industrial revolution.

Back in 2005 I predicted that big business in the USA was about to collapse.  Since the high in 2007 the US stock exchange has collapsed between 25% - 30%, and that is just the beginning.  The reason is that small organizations can now do the job of large organizations cheaper & more efficiently.  (Think Amazon, Google, Drudge, Itunes, Ebay).  There is no monopoly (even infrastructure or copyright & patent) that is safe to buy into.  That is the root cause of the problems in the stock and bond markets.  Large corporations are uneconomic entities in the modern world.  Any that continue to exist will only manage by corruption (eg. purchase legislation that establishes them as a monopoly.)

There are still entrepreneurs, and those entrepreneurs can make lots of money.   The problem for investors is that those entrepreneurs do not go IPO until their business is mature, (which is to say it has already passed the rapid growth stage and has plateaued or is in decline) or until the entrepreneur wants to retire, (in which case the business will decline because MBA's who replace the entrepreneurs are not as good as the academics certified them to be - think Steve Jobs).  It is these entrepreneurs who are giving the paradoxical US economy data.  (The economy is booming, but (big) business is failing.)

How bad can it get?  The great depression began October 1929, when the Dow Jones Industrial Average (DJI) was at just below 400.  After one year it had fallen by about 25% to about 300.   It took about three years for the DJI to bottom for a 90% fall to about 40.  It took a further 25 years for the DJI to recover all that lost ground and again reach 400.

This recession will probably be worse than the great depression.  Factors are converging and those factors will put the basic concept of money as capital under stress.  Those factors are the retirement bulge and failing credit trust.  Global warming and the energy crisis are trivial issues that will pall by comparison.  My prediction is that the recession will continue to erode the value of large corporations for at least five years.  My suggested cure is federal control of M2, negative income tax, government revenue derived from land tax (reference "Progress & Poverty"). 

It was because I foresaw this looming crisis in capitalism back in 2005 that I wrote:

PREDICTION:  The overgoverned (and overtaxed) regimes of Europe will continue in economic decline as their stagnant governments raise taxes in an attempt to maintain the bureaucracy with a declining tax base.  The UK (which has been fighting the trend) will decline as North Sea oil reserves decline.  Performance of the US economy will be spotty to good, as new industries take over from the old.  The caveat is that government not intervene to prolong the death agonies of the old industries.  Japan's economy will improve from it's weakened base.  Australia will continue to prosper on the back of primary product sales to China and further liberalization of the labour laws.

Those chickens seem to be in the coop.  Benanke has the thankless task of keeping (for the next 2-3 years) the US economy between low inflation and deflation while at the same time minimising the recession.  Worldwide there will be large scale destruction of invested wealth.  Australia will do worse than predicted (above) because the "liberals" (i.e. Rudd & the ALP) are now in power.  They will kowtow to the unions, and can be expected to support & subsidise big industry when it should be allowed to decline.  That will make the inevitable decline just that much more painful.


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