The Curse of Bad Governance Hangs Over Earth Like a Shroud

Australia's Finance News Network recently interviewed Jim Rogers by teleconference from his home in Singapore. Rogers' insights into the sad underpinnings of the ongoing global economic crisis are useful for anyone who is making short, medium, and long-term plans.

First Rogers explains his pessimistic outlook for the US and Europe, then he moves to Asia:

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Lelde Smits: You say Asia will suffer, do you see signs this suffering has already begun?

Jim Rogers: Oh of course it has. If you look at China, China’s already got problems they have inflation. They’re doing their best to calm things down in China, wisely in my view, and then China’s been hit of course with the slowdown in America and Europe. So no, everybody in Asia is slowing down.

Lelde Smits: And what about Chinese property prices. The latest government data from 70 Chinese cities shows the average price of Chinese property has fallen for the second straight month. Do you believe Chinese property is in a bubble and are we witnessing the bust?

Jim Rogers: Some parts of the Chinese real estate market have been in a bubble. Certainly urban coastal real estate in China was in a bubble - that bubble has popped. How far down it has to go, I don’t have a clue. Probably a lot further because usually when bubbles pop, a lot of people get hurt. But it’s not like in the US where in the US, people are buying four or five houses with no job, no down-payment. You know, and then the banks were taking the mortgages and jigging them up even more. China didn’t have that kind of problem. You’re going to see real estate developers go bankrupt in China - no question about that. But it’s not going to be the end of the Chinese economy as it was in the US, the UK, Spain and a few other places.

Lelde Smits: OK Jim, so we’ve spoken about US and European debt, and a potential Chinese slowdown. How do you see global markets reacting in 2012?

Jim Rogers: Well I’m not optimistic for the most part about stock markets. I don’t own many stocks anywhere in the world. The only offset of the caveat for me is the fact that there is an election in the US, in Spain – sorry in France, a few other places. So whenever there are elections coming governments spend, spend, spend they throw money out the window to buy votes. So some people are going to be much better off in 2012. Is it enough to offset the world’s problems? I don’t think so, except in some sectors which will benefit.

So for myself, I’m short stocks around the world, I’m short American technology stocks, I’m short emerging market stocks and I’m short European stocks.

Lelde Smits: And what else are you buying Jim and why?

Jim Rogers: Well I own commodities, because if the world economy gets better Lelde, then commodities will do well because of the shortages. The lucky countries will continue to be lucky for a while. I own some currencies, which I mentioned, I’m worried about currency markets. I’m short stocks. I mentioned the things I’m short. So I anticipate problems in stock markets. If the world economy doesn’t get better, you’re not going to make money in stocks. But then central banks will print more money and when they print money Lelde, the thing to do is to own real assets. _FNN

Rogers can afford to live almost anywhere on the planet, and he has chosen Singapore. He states that his reason for choosing that location is so that his children can learn to speak fluent Mandarin Chinese, away from a polluted environment such as one might find in Beijing or Shanghai.

I suspect that Rogers is not being entirely truthful here, since he does not want to earn the enmity of the CCP government in China. Nevertheless, a person tends to vote with his feet and with his bank balances, and Rogers is likely to be particularly honest in those cases.

The western nations which comprise modern western civilisation continue to innovate in the scientific and technological areas. This innovation is dependent upon the underlying financial productivity of these nations.

In other words, the scientific and technological promise of the future is warring against the political realities of today, in order to come to reality. Keep that in mind when making your plans. And always watch what the "smart money" is doing.

All governments are corrupt, all ideologies are false, and everything you think you know just ain't so. Other than that, the way ahead is relatively straightforward.

Men Waiting to Start a Family: Mature Men and Younger Women

Young women hold a strong erotic attraction to men of all ages. So it is natural for mature men, once they have achieved success and comfort in life, to seek relationships which give him the most pleasure. Throughout history, older men have started families with younger women, who are still in their fertile period. In most human cultures such things are considered normal and natural.

But in many decadent western societies, ideologically radical feminism has taken over politically correct cultures. Relationships involving older men and younger women are strongly discouraged by the PC thought police.

Scientific research in mice has been performed in an attempt to prove that older fathers lead to disabled and dysfunctional children. But however much feminists would like for human males to be mice, humans are not actually mice and should not be treated as such. A better science would look at human subjects in order to determine the facts about the children of older fathers and younger mothers.

And that is what Sweden's Karolinska Instutute has done, in a massive study:

This present study is based on data from over 135,000 children in Stockholm, who left compulsory school between 2000 and 2007, and tested the hypothesis that any negative consequences of the father's age on the child's IQ would be offset by the social advantages that being raised by older parents brings.

"To the delight of fathers choosing to wait before having children, our results suggest that children of older fathers perform no worse in school," says Anna Svensson, study leader at the Department of Public Health Sciences. "When we studied children's final year-nine grades we could see no difference between children of fathers in their 50s and children of fathers in their 30s."

Children of even younger fathers performed slightly worse in school, although these difference could largely be attributed to differences in the parents' own educational background. _SD

According to the report above, children of older fathers actually performed better than children of younger fathers.

The point is not to advocate the pairing of older men with younger women. The point is rather to be honest about the consequences of such pairings, in order to allow humans to make informed choices. When science is subsumed within political ideology -- as in modern PC science -- no one can truly trust the results of such politicised research.

From "climate science" to cognitive science to reproductive science to energy sciences and technologies, the destructive influence of PC leftism and lefist green dieoff.orgiasm has cost modern societies trillions of dollars in dysfunctional economic and social policies. Much of the modern economic and cultural malaise being suffered by modern societies is directly due to the malignant influence of a dieoff leftist influence on science, politics, and culture.

In modern times it takes men longer to mature and become financially independent, on average. The pairing of mature and economically self-sufficient men with younger, fertile women of erotic appeal, makes a lot of sense when these men do finally get around to starting a family.

If feminists cannot keep their hands off normal human relationships, perhaps it really is time for the backlash.

Update 8Oct2011: Here is a news report of a Dutch study that attempts to link older sperm with mental disabilities in offspring. The actual findings do not actually support the claims being made for the study, and in fact contradict actual results studies performed by the Karolinska Institute, as noted above.

Just as older mothers increase the risk of chromosomal and genetic problems in offspring, it is also logical that a theoretical risk of genetic problems from older fathers also may exist. But such a risk still needs to be proven beyond the merely theoretical -- and needs to be quantified and individualised so that appropriate precautions can be taken, if needed in the particular case.

In the meantime, humans should be free to go about their lives without being held hostage by a feminist-overlord culture of PC repression.

What Does it Mean for Africa to Grow at 4.9% per Year?

Africa boasts an abundance of riches: 10 percent of the world’s reserves of oil, 40 percent of its gold, and 80 to 90 percent of the chromium and the platinum metal group. Those are just the known reserves; no doubt more lies undiscovered. _MQ

Global Map of Nations by per cent Living Under $1.25 per dayMcKinsey Quarterly has published a fascinating look at recent economic growth in the continent of Africa (h/t Brian Wang). According to the report, real GDP growth over the continent averaged 4.9% per year between the years 2000 and 2008. This was twice Africa's growth rate over the decades of the 1980s and 1990s. The report goes on to discuss the many issues leading to such growth, and other factors that will be involved in future African growth. From McKinsey:

Africa’s collective GDP, at $1.6 trillion in 2008, is now roughly equal to Brazil’s or Russia’s, and the continent is among the world’s most rapidly growing economic regions. This acceleration is a sign of hard-earned progress and promise.

While Africa’s increased economic momentum is widely recognized, its sources and likely staying power are less understood. Soaring prices for oil, minerals, and other commodities have helped lift GDP since 2000. Forthcoming research from the McKinsey Global Institute (MGI) shows that resources accounted for only about a third of the newfound growth.1 The rest resulted from internal structural changes that have spurred the broader domestic economy. Wars, natural disasters, or poor government policies could halt or even reverse these gains in any individual country. But in the long term, internal and external trends indicate that Africa’s economic prospects are strong.

...Natural resources, and the related government spending they financed, generated just 32 percent of Africa’s GDP growth from 2000 through 2008.2 The remaining two-thirds came from other sectors, including wholesale and retail, transportation, telecommunications, and manufacturing (Exhibit 1). Economic growth accelerated across the continent, in 27 of its 30 largest economies. Indeed, countries with and without significant resource exports had similar GDP growth rates.

...To start, several African countries halted their deadly hostilities, creating the political stability necessary to restart economic growth. Next, Africa’s economies grew healthier as governments reduced the average inflation rate from 22 percent in the 1990s to 8 percent after 2000. They trimmed their foreign debt by one-quarter and shrunk their budget deficits by two-thirds.

Finally, African governments increasingly adopted policies to energize markets. They privatized state-owned enterprises, increased the openness of trade, lowered corporate taxes, strengthened regulatory and legal systems, and provided critical physical and social infrastructure. Nigeria privatized more than 116 enterprises between 1999 and 2006, for example, and Morocco and Egypt struck free-trade agreements with major export partners.

...The continent’s four most advanced economies—Egypt, Morocco, South Africa, and Tunisia—are already broadly diversified. Manufacturing and services together total 83 percent of their combined GDP. Domestic services, such as construction, banking, telecom, and retailing, have accounted for more than 70 percent of their growth since 2000. They are among the continent’s richest economies and have the least volatile GDP growth. With all the necessary ingredients for further expansion, they stand to benefit greatly from increasing ties to the global economy.

Domestic consumption is the largest contributor to growth in these countries. Their cities added more than ten million people in the last decade, real consumer spending has grown by 3 to 5 percent annually since 2000, and 90 percent of all house-holds have some discretionary income. As a result, consumer-facing sectors such as retailing, banking, and telecom have grown rapidly. Urbanization has also prompted a construction boom that created 20 to 40 percent of all jobs over the past decade.

...If recent trends continue, Africa will play an increasingly important role in the global economy. By 2040, it will be home to one in five of the planet’s young people, and the size of its labor force will top China’s. Africa has almost 60 percent of the world’s uncultivated arable land and a large share of the natural resources. Its consumer-facing sectors are growing two to three times faster than those in the OECD7 countries. And the rate of return on foreign investment is higher in Africa than in any other developing region. Global executives and investors cannot afford to ignore this. A strategy for Africa must be part of their long-term planning. _MQ

The report excerpted and linked above is quite optimistic toward the economic prospects for Africa over the next 3 decades. Al Fin economic and social forecasters do not take quite the sanguine view as those of the McKinsey Institute.

As seen in the map at the top of this entry, Africa is quite diverse in terms of economic conditions. It is an act of false parsimony to consider the entire continent as one unit, economically. Instead, one should look at SubSaharan Africa separate from North Africa, economically and socially. Further, one should subdivide SubSaharan Africa into tropical and temperate regions, when considering investments and partnerships. McKinsey failed to stratify African nations other than by "economic diversification" and "exports per capita." Useful, but not sufficient. It is difficult to draw useful conclusions when data is so badly conflated.

The time period selected for extrapolating may not be representative of what to expect from a future Africa. The ongoing instability in Egypt and Libya, for example, suggest that the chronic instability of most of tribal Africa may be spreading into nations where tribal and religious instability had been temporarily suppressed by strong political regimes of long duration.

Urbanisation may bolster GDP growth numbers temporarily, for example, due to the more quantified economic nature of more modern city living vs. quasi-ancient rural life styles. Yet there are limits to how large stable cities can grow under certain demographic conditions. Many of Africa's cities are already pressing those limits.

Modern high tech infrastructures -- such as those which allow more advanced nations to enjoy the fruits of modern trade and sci-tech development -- are dependent upon an infrastructure of human capital which is capable of maintaining and improving the underlying technological infrastructure. In the absence of capable maintenance, repair, and construction, societal infrastructure tends to collapse at the most inopportune times.

Here is the blunt truth, which Political Correctness tries to obscure: Infrastructures to support widespread modern affluent lifestyles require a high tech infrastructure which can only be maintained by populations with average IQs close to 90 or above. The only exception is if the nation hosts a "market dominant minority" of higher IQ persons to maintain markets and infrastructures -- such as the Chinese in Malaysia or Indonesia, or the shrinking population of high-IQ minorities in South Africa.

For some countries of North Africa, the average population IQs are near 85. But for most SubSaharan African nations, average population IQs are well below 80. The reasons for such low average IQs are debatable, but the blunt facts are clear and stand in the way of large scale indigenous economic development across many chronically underdeveloped parts of the world.

Global IQ Map by Nation
For Africa to grow sustainably, it will need to attract leadership and energy from the outside -- and keep it there rather than driving it out, as was done in Zimbabwe, Kenya, Uganda, etc. An expansion of what it means to be "African" is mandatory -- but it can only be made to last in an Africa of greatly expanded opportunity and radically reduced corruption and populist demagoguery.

Al Fin futurists suspect that perpetually ambitious and corrupt African tribal leaders and strongmen will only accept the changes that are needed, under the sanction of a non-human "superior being." In real terms, that would mean either an extraterrestrial invader of superior technological capacity, a genuine artificial intelligence of superior wisdom and cognition, or a sufficiently convincing imitation of one or the other.

Bitcoin Anonymous Virtual Currency Stimulates New Marketplaces

Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network.

Bitcoin is meant to be an anonymous digital currency placed online, beyond the whim and caprice of greedy governments and their corrupt co-conspirators. An anonymous marketplace where almost anything could be bought or sold, is the dream of free marketeers across time and space. Perhaps Bitcoin will pave the way to this nirvana of free marketdom. More about Bitcoin:

Bitcoin—a pseudonymous cryptographic currency designed by an enigmatic, freedom-loving hacker, and currently used by the geek underground to buy and sell everything from servers to cellphone jammers. No, this isn't a cyberpunk artifact from Snow Crash or Neuromancer; it's a real currency currently valued several times higher than the US dollar, the British pound, and the Euro.

Bitcoin is a virtual currency, designed to allow people to buy and sell without centralized control by banks or governments, and it allows for pseudonymous transactions which aren't tied to a real identity. In keeping with the hacker ethos, Bitcoin has no need to trust any central authority; every aspect of the currency is confirmed and secured through the use of strong cryptography.

Over the last few months, Bitcoin's value has risen by an order of magnitude as the sagas of Wikileaks and Anonymous (among others) have highlighted the limits of a financial system which relies on centralized intermediaries. With a current estimated market capitalization of about $100 million, Bitcoin has recently graduated from a theoretical techno-anarchic project patronized by libertarians and hackers to a full-fledged currency prompting comment from technologists and economists. At the time of this writing, one Bitcoin (BTC) is worth about US$15.

...The Bitcoin solution uses cryptography and an open transaction register. Whenever you spend a Bitcoin, you cryptographically sign a statement saying that you have transferred the coin to a new owner and you identify the new owner by their public crypto key. Whenever they need to spend the coin, the new owner uses his private key to sign it over to some further owner. As soon as a transaction takes place, the recipient (who has a very strong incentive to ensure that you don't spend the coin twice) publishes the transaction to the global Bitcoin network. Now every Bitcoin user has incontrovertible evidence that the coin has been spent, and users won't accept that coin from anyone but the new owner.

...In a process known as mining, individual Bitcoin users attempt to generate new coins by checking the integrity of the transactions list. They confirm the previous transactions and attempt to solve a difficult proof-of-work problem which involves exhaustively trying different solutions. There are a very large number of such potential solutions, so the likelihood of finding the solution depends how many other people are looking for it and how much computing power you devote to the problem. The first client to find the solution announces its good fortune to the whole network and earns a little reward for itself in the form of some shiny new Bitcoins. _ArsTecnica

One new marketplace taking advantage of Bitcoin's anonymity is Silk Road.

Silk Road, a digital black market that sits just below most internet users’ purview, does resemble something from a cyberpunk novel. Through a combination of anonymity technology and a sophisticated user-feedback system, Silk Road makes buying and selling illegal drugs as easy as buying used electronics — and seemingly as safe. It’s Amazon — if Amazon sold mind-altering chemicals.

Here is just a small selection of the 340 items available for purchase on Silk Road by anyone, right now: a gram of Afghani hash; 1/8 ounce of “sour 13″ weed; 14 grams of ecstasy; .1 gram tar heroin. A listing for “Avatar” LSD includes a picture of blotter paper with big blue faces from the James Cameron movie on it.

The sellers are located all over the world, a large portion from the United States and Canada. _Wired

Silk Road accepts Bitcoin as payment, and is accessible only via the Tor network of anonymous proxy servers.

More about Silk Road from Kevin Kelly:

Silk Road is all of four weeks old, so its stealthiness is unproven. In theory it looks viable. But Tor and Bitcoin are open source, so the savvy can see what they are standing upon. But there are inherent challenges with any private currency, and there are inherent challenges with any encryption scheme. At the point where either of these systems touch the legitimate world (and they must to be useful), there is potential for breakdown, scams, break-in, or disruptions.

Bitcoin in particular has serious complexities. It is a private currency, and all private currencies are liable to scams. But an anonymous peer-to-peer one is even more liable, because there is no central enforcement -- by definition. The technicalities of Bitcoin are impressive, complex, and almost beyond the understanding for most lay users. For a sobering critique of Bitcoin, I recommend reading at least one skeptic's take on it before you decide to use it. His argument is that the way Bitcoin is engineered makes it biased towards the earliest users (the value of their "dollars" will increase more than later users) and is therefore a type of pyramid scam. That is a long-term consideration; this deflation probably will not deter a kid who wants to score some speed this week.

And the critique says nothing of the potential weaknesses of Bitcoin's encryption aspect. Usually these cypher schemes are not broken directly, but indirectly via patterns of use. As the cypherpunks say, encryption is economics. Anything can be hacked if you apply enough money. As long as the amount of money in these stealth markets remains modest, they will be secure. But once they rise to some threshold, they will trigger investments into cracking them. Perhaps bit traffic is analyzed network wide, or honey pot sellers rated high by shills set up to pounce on the unsuspecting -- whatever. _KevinKelly

The economic arms war between governments and free marketeers is as old as organised human society. Anonymous online versions of digital currency are likely to take the contest to a new level, as government enforcers devote ever more time and tax resources to stamping out the competition and incorrigible independent minded.

What is Bitcoin?

National Debt by Country

Public Gross Debt as Percent of GDP by Country – 1992-2011

gfmag

This table uses data from the Organisation for Economic Co-operation and Development (OECD) and measures gross debt as a percent of GDP. Most major statistical organizations measure debt with fairly consistent results, including the International Monetary Fund (IMF) and Eurostat.

The 2007-2009 financial crisis led to a dramatic increase in the public debt of many advanced economies, with many of them experiencing their highest levels of debt since World War II. This was in large part due to the huge stimulus programs in countries around the world, in addition to government bailouts, recapitalizations and takeovers of banks and other financial institutions. Another contributing factor to the increased debt was the decrease in tax revenues.

Public debt as a percent of GDP in OECD countries as a whole went from hovering around 70% throughout the 1990s to more than 90% in 2009 and is projected to grow to almost 100% of GDP by 2011, possibly rising even higher in the following years. It could already be higher, as potential costs of aging populations may not be entirely reflected in the budget projections of some countries.

The rise in public debt has been seen not only in countries with a history of debt problems - such as Japan, Italy, Belgium and Greece - but also in countries where it was relatively low before the crisis - such as the US, UK, France, Portugal and Ireland. _gfmag

Massive Entitlement Spending Growth Prevents a Better Future

Images via MJPerry

The US government is stuck in the entitlement racket -- the "votes for cash" scam. By channeling more and more private sector income through government redistribution channels, more private citizens are becoming dependent upon government incomes -- and forgetting how to take care of themselves.

This wholesale shift to government dependency might be okay if it were sustainable. But as anyone who follows international and national economic news should know by now, the entire pyramid scheme is not sustainable. But it is very addictive.

The end result of this massive, exponential growth in government entitlement spending, will be very ugly. Try not to get engulfed by the growing clash between an ever more grasping government, and the people who have to pay the bills and do the productive work. If you get caught in the middle, you may not survive the aftermath.

Images via MJPerry

Come to Europe and Watch the Unions Go On Strike

Europe's springtime of strikes is turning into the summer of strikes

Europe's economic problems begin and end with public employee unions (the US too)

China isn't looking too prosperous lately either

You could even say things are bad all over

There is never a good time to elect a clueless clown president, but US voters seem to have chosen the worst possible time to do so. By electing an empty icon rather than an experienced and competent leader, voters doomed themselves and their children to an endless avalanche of debt from the top down. After successive generations of "dumbing down", psychological neotenisation, and academic lobotomisation, the American voter is now so stupid as to vote for his own economic suicide.

Will air-headed American voters come to their senses and stop sawing at the limb they are hanging on? Never underestimate the stupidity of a voting population that is increasingly dominated by government employees and public sector unions.