30th April  2004


The homeless in San Francisco and LA are very evident.  They can be found standing or sitting in busy streets with signs like "HAVE AIDS, HUNGRY, HOMELESS, PLEASE HELP, GOD BLESS", Some, risking the wrath of police stand shaking a cardboard cup in the faces of passers bye.   Others make an outright request for change.  Some are seen wheeling a shopping trolly, piled up with worldly possessions, a blanket, a few clothes, bags.  Some of them seem to co-operate, one guards the trolley while the other scavenges or scrounges.

In San Francisco I purchased a newspaper called "STREET SHEET" from someone who appeared to be homeless  It's banner was "A publication of the coalition on homelessness San Francisco 1989."  The paper described the history of a SF ordinance forbidding "illegal lodging" CPC 647(j).  Apparently, back in the 1850's, when gold was discovered, (California celebrated it's 150th year in the Union recently) the people with political power introduced an ordinance to prevent illegal claim jumping.  That ordinance had sat unused in the books for more than a century, until it was revived recently as a possible "solution" to the large number of homeless that were appearing on the streets of San Francisco.  The beggars and homeless are everywhere.  Fortunately, San Francisco is not a city where it snows, and in this season the nights are cool (10-15 degrees centigrade).

After buying some food in a workers co-op shop in the western SOMA district, (South Of MArket St.  Market St. is the main drag in "downtown" SF.) I sat with an old timer called Richard.   For some time we happily discussed the many failings of our respective political systems.  Interestingly, part of his solution was meditation.  Later Richard mentioned that he was one of the homeless, and had been living "on the streets" for more than 10 years (he was mid fifties).  He confessed that for more than a decade his most heartfelt wish was for a secure job, a home and a normal life.  Richard was from the hippy generation, and although he did not have a proper home, he rented about 10 square meters of storage space for $300 a month.  Richard struck me as erudite and politically informed.

Shortly thereafter I was sitting in a Starbucks and struck up a conversation with a young man (19) who was writing something.  To my eye he was not WASP, his race was indeterminate.  He confided that he had a girlfriend, who (he was not very clear here) either worked at or owned a local S&M club.  He was, it transpired, filling in a job application for Starbucks.  He confided that he wanted proper work, not making money by selling drugs to other people.

After leaving that area, I saw some goods laid out on the footpath in Market Street.  I purchased a paperback, and started a conversation with the vendor.  He was Latin American.  When I described my meeting with the young man, he was contemptuous.  He said that the young man would have been African-American.  He explained that there was plenty of work, that he knew Spanish speaking people from central America could not speak a word of English, who nevertheless found work cleaning, or in other occupations.  He said the boy was not Latin-American, because he did not have a job.

On Easter Friday, walking back from Market street, I stopped in a camera shop to purchase batteries and a charger.  The Sicilian-Americans who worked there was surprised when I told him that, in Australia, nearly all shops were closed on Easter Friday.  Since 9/11, he said, business has been very bad, and he could not afford to close his shop, and lose the business.


The Economist of 9th April 2004 seems to have finally recognized as fact a proposition that Australian Diarist has been arguing for years, .. " the fact that investors have more money to play with and nowhere better to place it." than, in this instance, third world countries.  Barvennon has gone further and identified the cause of that more money to play with in Australia as the circa 1993 regulations that diverted a huge proportion (approximately 10%) of Australian's wages into investment funds for retirement.  The amount of money now accumulated in those Australian pension funds exceeds the capitalized value of the Australian stock market.  This surfeit of funds has driven the value of stocks to unrealistic levels (PE ratio well over 30), and the overflow funds are being pushed to homebuyers at extremely low interest, which is fuelling a real estate boom.  (In the USA Fannie May and Freddie Mac are accepting funds for mortgage investment.  Those organizations are guaranteed in some manner by the federal government.)  The increased tax take from GST and corporate tax paid by the investment funds has greatly diminished the funds borrowed on the Australian federal bond market.  I am told that similar legislation is operative in the USA and Euromarket.  I speculate that similar legislation will produce similar effects.  I can only hope that the resulting worldwide property inflation will not have as devastating effect on our economies as a similar paradigm (of high community savings being ploughed back in to the domestic economy) did in Japan some years ago.

Of course the situation now is not as simple as it was in Japan.  Now we have a continual flood of investment derived from the wages of the workers.  In the USA Greenspan is holding short term interest rates on the floor.  Even if an investment were poor, the inflow of funds is so huge that some MBA investment manager, somewhere, is desparate or ill-informed enough to purchase it, even if at a small discount.

Will the market bust?  Well if unemployment in Australia rises, then the flood of investment money to the national contributory retirement scheme will reduce.  This will have a positive feedback effect, since unemployed workers cannot pay mortgages, are consuming fewer household goods, autos, etc.  Then investments go bad, new investment in mortgages & stocks diminishes, (both of which reduce employment) the government collects less tax, it must borrow money, it raises taxes, raises interest rates, this further dampens the market economy...

And as any engineer will tell you, positive feedback circuits are v. unstable.

I would note in passing that the US economy looks weak.  Of course I have only been here for a few months, and am more familiar with the Australian economy.   However it is difficult not to see underpatronized malls, notice the savage price cutting by department stores, listen to the tales of woe in small business and note other signs of economic distress.  These signs do not seem to filter up in to the stock market, perhaps because admitting difficulty is financial suicide.

Despite the grim picture, I believe that patchwork solutions to maintain the US and our own economy will continue to function, but believe that any solution will produce a fading balance of trade, losses concentrated in the farming sector.  Minerals, most importantly gold, will continue to underpin the Australian dollar.


It is ironic that the "Peace & Love" movement of the sixties sprang from a place phonetically called "The Hate". (Haight-Ashbury).  The Haight is the cultural heart of SF.  It is located between UCSF (University of California, San Francisco) campus & USF (University of San Francisco), Both are less than half a mile from the intersection of Haight and Ashbury streets.

San Francisco also has the world renowned UC Berkeley campus just across the Bay, the university which spawned the world's computer capital known as Silicon Valley, at the south end of San Francisco bay.

  SF hosted the meeting of international ambassadors that agreed to the formation of the UN.

Fisherman's Wharf is a tourist trap at the NW end of Columbus St, which forms a SE-NW diagonal across the street pattern of N-E SF, which is aligned N-S.  (see map).  Most of the cable cars travel between Fisherman's wharf and the downtown commercial district.  Goods for sale on the waterfront can be purchased atb a 20% discount in the streets behind the waterfront.

Like Columbus, Market street and the streets to it's south (The SOMA area) run diagonally (NE-SW) to the N-S street grid of NE San Francisco.  This is one of the flat areas of SF.

The golden gate is, of course, not gold coloured.  I would call it red lead or ferroprime coloured, or perhaps red ochre.  The handrail has a few rust spots, and about half of it has been replaced.  It is closed at night, and under 24 hour military guard.  In addition the bridge profile is undergoing modification to make the structure more resistant to earthquakes.


I find it incredible that European opinion should be so against Israel's killing of Hamas chief Abdel-Aziz al-Rantissi.  For years Israel has shown restraint, hoping that the Palestinians would recognize that Israel is a proper country, as decided by the UN back circa 1948.  However every bit of money that has come in to Palestinians' hands has gone to promulgating the war with Israel.  One can not help but feel that it is financial opportunism that colours the perceptions of the French and German people.

The Europeans claim to be upset that the military targeting of the self confessed heads of the terrorist organization Hamas are "extrajudicial".  To be even handed, they should have objected when Clinton fired off missiles at Al Quaeda.  They should also have objected to the bombing of civilian targets in Serbia and Kosovo. 
What's that you say? Clinton was a good guy, and you trusted his judgement?

Would those Europeans be satisfied if the Israelis had a trial in Jerusalem of all Hamas personnel?  Something along the lines of:
1    Did you make this broadcast calling for the murder of Jews?
2    Do you deny that you are an executive member of Hamas, as you stated during that diatribe?
3    Do you deny that xxx is an acknowledged member of Hamas
4    Do you deny that xxx announced that such and such a terrorist act was performed at the behest of Hamas".

Those Hamas personnel who wish to defend themselves should be free to do so, Through proxies if they so choose.  As each military execution of guilty Hamas terrorists was performed, time should be purchased on all available major networks of the world, and after an apology offered for the accidental killing of bystanders, the "guilty" verdict, along with relevant details from the trial should be broadcast.  To prevent unnecessary loss of lives during the military executions, Hamas members should be given the option of turning themselves in, and serving "life".

At least they should get a good audience, might make a few shekels out of the rights.  (On the other hand, having the crimes of Hamas out in public view would be such a publicity coup for their cause.  Israel should footage free with the proviso that the recipients do not interfere with the integrity of the segment by making strategic little cuts or voiceovers etc.)

However I doubt that they would accept such a trial as legitimate, no matter how open the court was.

- IRAQ -

So what is my solution to the mess in IRAQ?

Call in the opinion moulders.  Tell them to promulgate the following messages.
  1. We do not want to force democracy on those who do not want it.
  2. Muslims are poor because they have a religion that demands government by a theocratic dictatorship.  Theocratic dictatorship is inefficient and corrupt, and inhibits the production of wealth.  (It also allows the theocrat/dictator to tax wealth into his own pocket, although nominally that wealth is to be used for the good of believers.)
  3. We don't care what OPEC charges for oil. If the price is too high, then the process of extracting fuel from shale etc will become economic.  (Australia alone has reserves of shale oil greater than Saudi reserves of oil).
  4. The US has achieved it's objective in Iraq, which was to remove the Hussein WMD threat.   Anything after that was "tidying up".
  5. The US is leaving.  It is not determined to establish any regime whatsoever.  It is quite prepared to leave the nation of Iraq in anarchy.
  6. The US will not tolerate a government that rules IRAQ by terror and force, but if the Iraquis establish a government that does not rule by terror & force, then the US will not again intervene.
The US has already achieved its aim, which was to provide an exemplary lesson to muslim dictators in the region.  The US should stop trying to enforce democracy on those who do not want it.  If people think that theocratic dictatorship is a superior method of government, they are entitled to live under a theocratic dictatorship.  Even if they then believe (in defiance of all evidence to the contrary) in conspiracy theories that maintain that democratic systems are wealthy because they have "stolen" from muslim regimes.