US$ declining as a reserve currency

May 6th, 2008

“Financial Cryptography? reports that use of the US$ as a medium of international exchange and as an international sttore of value has declined to about two thirds of what it was four years ago.

Changes in the way people use money are extremely slow. Because money is a store of value, people are profoundly reluctant to change. Such a change is cataclysmically rapid compared to the normally glacial rate of monetary change.

In my own personal experience, US banks and US financial institutions have suffered a cataclysmic decline in competence, honesty, reliability, and efficiency over the past decade or so, particularly in international transactions. Over the past several years I have been repeatedly astonished and disbelieving at basic failures of integrity and inability to perform the ordinary duties of a bank, such as simply making sure that money does indeed get from where it is, to where it is supposed to go, or to make reasonable and realistic assessments of credit worthiness and financial worth. The propensity of the Bush administration to print money, and the fact that the Iraq war is taking longer and costing more than expected is also having a severe impact. I have no idea which of these several causes is the more serious.

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Paul Collier explains the famine

May 6th, 2008

Paul Collier explains the famine.

In the modern era, famines are usually caused by war or socialism.  This time around, it is a bit different.  Collier lists four causes – one is Chinese prosperity, two are environmentalism – the ban on genetically modified food, and the American biofuel program, and one is social engineering – state intervention to preserve small (and thus ineffectual) farms as a voting block.

As I remarked earlier, the twentieth century was a time of socialist famines.  Let us hope the twenty first century is not a time of greenie famines.

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Coal to oil is not under development

May 5th, 2008

To keep the price of oil from soaring even further the world needs to increase oil production three million barrels per day, each year, largely because large numbers of Chinese want to drive cars.

We cannot increase production except in those places where private property rights are reasonably secure, and there is no oil left in the ground in those places. So it has to be coal to liquids.

Most coal to liquids plants are being developed in China. Du Minghua, deputy director of the China Shenhua CTL research institute, said China could produce thirty million tonnes of liquid fuels each year by 2020.

That is six hundred thousand barrels per day. That is about one sixtieth the rate of increase we need.

In America greenies are taking the same approach to banning coal to liquids as they have taken to banning nuclear power. The proposed regulation is that Americans will not be allowed to convert coal to liquids on a large scale unless they can prove that the CO2 can be permanently disposed of – but of course nothing can ever be proven to those who choose to make themselves too stupid to understand the proof. Presidential candidate Obama goes one step further, and proposes to ban substitutes for oil unless they emit twenty percent less CO2 than oil, which bans any use of coal to substitute for oil

A coal to liquids plant needs to be fairly large scale to be economical, needs to produce at least three million tonnes per year, sixty thousand barrels per day. To stop the price of oil from rising further, the world needs to build one of these plants every week, for the next several decades, to meet the Chinese demand for cars.

Yet we see no political will to permit such developments, and not a lot of enthusiasm amongst developers to doing them. To the extent that developers are working on such projects, their primary focus is on assuaging greenie opposition, rather than the technological problems of converting vast amounts of coal to oil. If it is hard to get oil wells drilled off the coast of California or in Alaska, what are your prospects of getting a coal to oil plant approved?

People are starving yet we still treat energy developers as criminals, rather than heroes.

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Regulation kills

May 4th, 2008

Today, a lot of people are going hungry because of an energy crisis.

When we look at businesses that are attempting to address the energy crisis, for example Linc Energy Systems, we see that ninety percent of their effort, energy, and thought, is addressed to the political problem of getting permits and approvals, and very little to the merely technical details of collecting energy from nature and making it available in usable form.

Linc energy systems plans to use UCG-CTL to produce liquid fuel from coal. They set up a test plant. The major function of the test plant was not to test the technology, but to test the environmental impact of the technology. But the only acceptable outcome was no impact, which result no genuine test could ever produce. Fake environmental science manufacturing fictional crises is met with fake environmental science supposedly avoiding these nonexistent hazards.

And so, while this game is being played, people starve.

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How global warming “science” works

May 1st, 2008

Dr. Tim Ball reports that the IPCC first created the “Summary for Policy Makers” report, then the science report that it is supposedly a summary of.

“Changes (other than grammatical or minor editorial changes) made after acceptance by the Working Group or the Panel shall be those necessary to ensure consistency with the Summary for Policymakers (SPM) or the Overview Chapter.”

Unfortunately, it is not only global warming global warming “science” that works like this, but most science since the late twentieth century

This was, in the end, the unavoidable result of government funding for science. He who pays the piper, calls the tune. He sleeps with elephants, wakes up flat. For science to be science, scientists need to cultivate a wider range of patrons and sources of funding.

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Caplan bets Europe will survive

April 29th, 2008

Bryan Caplan has bet $300 that Europe, and every state of Europe, will survive to 2020. I don’t make these kind of bets, because outcomes tend to be ill defined. What constitutes surviving? But I expect that around 2040, people will look back to around 2020, and say that some substantial portion of Europe, fell back then.

The nation state derives its cohesion from the nation, and the nation is not a patch of land but a people, united by something – perhaps an ideology of governance, economics, and law, but more commonly race and culture, or religion, or some such.

Nation means, still today means, a mutually supporting group of people, not a territory – a people united by culture, or by language dialect, or by race, or by ideology, or religion, or some such. Jews are a nation, Israel a nation state, Kurds are a nation, but Kurdistan is not (yet) a nation state. Iraq is a state, but evidently not yet a nation.

If a state is united by race or religion, the nation state has a disturbing tendency to commit mass murder. Even before the rise of the nation state, even back in the days when nations seldom corresponded to states, the nation was an important and vital part of Europe’s history, leading to lots of disturbingly efficient slaughter – and not just the easy slaughter of disarmed obedient sheeple that we saw so much of during the twentieth century, but the highly successful mass slaughter of armed and united peoples.

Thus a nation state inherently derives its cohesion, its strength, its military prowess from what is now called ethnocentrism, or racism, or bigotry, or ignorant superstition or capitalism/imperialism/exploitation etc.

The transnational progressives are attempting to use the power of the state to suppress that which gives the state cohesion, sawing off the branch on which they stand.

And because they have in substantial part succeeded, Europe suffers from extraordinary military weakness. Europe could not defeat the Serbs, could not defeat the Taliban. The British could not hold the most crucial oil port in the world against Sadr’s forces.

Hence the inclination on the right to predict the collapse of the EU or some of its component states. The prediction seems absurd. The states of Europe have police, tanks, bombers and an immense budget, whereas the various threats to their existence are tiny and have nothing much – but the threats have internal cohesion, and the states of Europe do not.

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The first greenie famine

April 28th, 2008

The twentieth century was the century of the red famines.  Now, in the twenty first century, we are seeing the first greenie famine.  Let us hope it will not be the first of many.

The red famines killed an extraordinary number of people during the twentieth century – famines caused in part by carelessness, in part by active malice as socialists sought to centralize all food under their direct control.  To some extent the red famines were intended to end resistance by depopulating large areas, to some extent they were produced by incompetence, as politicians and bureaucrats directed farmers how they should farm, and some of which were caused by casual neglect, as those politicians and bureaucrats simply forgot to feed their captives.

We are seeing much the same with the first greenie famine.  It should have been possible to figure out that converting enough food to feed near a billion people into fuel was likely to cause problems.

Of course, the failure of capitalism to smoothly convert from oil to coal is also a problem, but the conversion has not been made any easier by the fact that it typically takes ten years to get such a plant approved, if you can get it approved at all.

There is a green path and a brown path to dealing with the failure to pump enough oil.  Environmentalists complain that coal to liquids conversion is on the brown path, and take for granted that the green path is inherently better and more virtuous, so much more virtuous that simply being in favor of it makes them more virtuous.  They neglect, however, to explain that the green path involves a substantial and rapid population reduction.

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Envy and covetousness

April 26th, 2008

Jews are not the only people that suffer from self hatred and self destructiveness, though arguably they are more prone to it than other groups.

The most spectacular and extreme example of self hatred was the Khmer Rouge, which hated intellectuals and especially foreign educated intellectuals, and proceeded to murder most of them. Since the Khmer Rouge was largely composed of intellectuals and especially foreign educated intellectuals …

Rich white Anglo Saxon males also suffer from a fair degree of self destructive self hatred, as illustrated in the the recent Duke University rape scandal, though nothing comparable to Jewish self hatred.

The roots of self hatred are envy and covetousness. If one belongs to a successful group, one compares oneself to others of that group. Inevitably, some of that group are more successful in some ways than than oneself, and so …

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Greenie morons

April 24th, 2008

It seems that even if you are a highly qualified scientist with a great big pile of academic credentials, there is something about being a greenie that causes your brains to dribble out your ears as slime.

There is an ecological crisis on Macquarie Island:

In an accelerating one-two hit, exploding rabbit numbers are denuding Macquarie’s hills of soil-stabilising megaherbs and tussock fields, exposing ground-nesting birds and new seeds to the ravages of rats and mice.

Along with the flora, at least 24 bird species, 12 of them classified as threatened, are under attack.

So why, you may ask, are they under attack now.

Because the brilliant scientists managing the island wiped out the cats. The cats had kept the rabbits and rats down.

When you wipe out the top predator, what do you think is going to happen?

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Oil hits $120 a barrel

April 23rd, 2008

Demand for oil will continue to rise. The supply is not rising. The only solution is massive coal to liquid plants. Coal to liquid plants can produce substitutes for gasoline, such as methy isobutyl ether, at about a dollar a gallon at the refinery gate. So why is it not happening?

Coal to diesel is a more mature technology. Coal to gasoline substitute is still theory and experiment. Maybe it is not happening because they are still working on it. But even coal to diesel is only happening on a rather small scale, a fraction of a percent of the scale needed to keep the price of oil from rising even further.

We are seeing the much predicted resource crisis and associated hunger that the greens have long predicted. Capitalism and the free market should, in theory, remedy this, providing a smooth conversion from oil to coal. No smooth conversion is happening, which may well be part of the reason so many people are losing faith in capitalism. The subprime crisis is not a good advertisement for capitalism either. Of course capitalism, unlike socialism, manages to resolve such crises without murdering millions, but this does not mean that it is working satisfactorily. When capitalism screws up badly, as is happening right now, people are inclined to listen to demagogues who tell them that if only the demagogue got to make decisions, instead of those wicked capitalists, all would be well.

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