Comments for Evolve or die: Can we shed our moral primitivism before it’s too late? at http://atlanticfreepress.com , comment 1 to 5 out of 5 comments http://atlanticfreepress.com Thu, 09 Feb 2012 21:33:01 +0100 FeedCreator 1.7.3 http://atlanticfreepress.com/news/1/3964-evolve-or-die-can-we-shed-our-moral-primitivism-before-its-too-late.html#comment-5214 This guy is clueless. He draws in a large check to spew utter nonsense. There are far worse ways to make a living than lactating, I can attest from experience. Many humans who make it possible for him to live in luxury are treated horribly and he is one of the oppressors. Anyone who puts another species above his own doesn't deserve to have a place of dignity in any society. - Meg Thu, 29 May 2008 18:51:34 +0100 http://atlanticfreepress.com/news/1/3964-evolve-or-die-can-we-shed-our-moral-primitivism-before-its-too-late.html#comment-5207 Quite unbelievable! No wonder Best lost his job. Unreconstructed, verbose, drivel, down to the last word. He and Vlasak deserve one another. - watcher Wed, 28 May 2008 13:25:25 +0100 http://atlanticfreepress.com/news/1/3964-evolve-or-die-can-we-shed-our-moral-primitivism-before-its-too-late.html#comment-5204 http://www.atimes.com/atimes/Global_Economy/JE28Dj02.html May 28, 2008 THE BEAR'S LAIR Time to do something about oil By Martin Hutchinson The oil price rise of more than US$50 per barrel since the US Federal Reserve started cutting interest rates in September is beginning to get serious. Since the rise of oil import prices alone removes $170 billion from the US economy, more than 1% of gross domestic product, it is both inflationary and highly recession-producing, especially since it has been accompanied by similar rises in other commodity prices. Its full effects have not been seen yet but they're coming - don't worry! At some point we are probably going to have to do something about it. The question is: what? In general, the populist clamor to "do something" about a sharp move in commodity prices makes no sense. The price mechanism acts as a shock absorber for supply and demand hiccups, so that if storms shut down the Gulf oil platforms or rapid growth in China causes its use of automobiles to soar, oil price rises can signal to other consumers to cut back consumption and to producers to enter into new exploration projects. That's why the fuel subsidies in Third World countries are foolish. They encourage the consumption of a substance that is increasingly scarce and at times like the present impose an appalling burden on local taxpayers or the government's financing mechanisms (as in India, where government deficits threaten to derail that country's magnificent economic boom.) While oil prices were rising from $20 to $80 per barrel in 2002-07, this rationale seemed unquestionable. The rise was gradual, and the price remained well within the parameters that the world economy had survived, albeit with some difficulty, in the early eighties. (Although the peak 1980 price of $40 per barrel was equivalent to about $105 in today's dollars, that peak was ephemeral; the major economic effect of expensive oil came from the roughly six years of oil prices hovering around $30, or $70-80 in today’s dollars, in 1980-85.) However, the $50 rise since September has been sudden, has taken oil prices to a level never before experienced, and shows no sign of abating. Its principal short-term cause has been the excessive lowering of interest rates and relaxation of credit conditions in the United States and elsewhere, but there are a number of long-term factors which may make it difficult to reverse. The International Energy Agency (IEA) is said to be producing a study showing that future oil supplies will be more restricted than had been thought, topping out at about 100 million barrels per day rather than the 115 million that had been thought necessary to accommodate the world's growth to 2030. The IEA's new caution is probably inevitable, given the rise in prices and the considerable uncertainty in reserve and production estimates; it's mostly a matter of IEA geologists seeing the inexorable rise in prices and deciding to use more pessimistic assumptions about future trends. In any case, since current production is only around 85 million barrels per day, the decline in estimated future production is not an immediate problem. However, its psychological effect on the market is considerable. Whatever the views of the IEA, it should be clear that the recent rise in oil prices is not driven by fundamentals. Economists differ about the price elasticity of oil, but the lowest plausible estimates for short-term price elasticity are around 10%, with medium-term elasticity being much higher. Thus if oil legend T Boone Pickens is right that oil supplies are currently 85 million barrels per day and oil demand is 87 million, that is a supply shortfall of 2.4%, which at a 10% elasticity should produce a price increase of 24%, not 60%. The principal influence behind the huge rise in oil prices has been speculation, whether by the international oil companies, by hedge funds deprived of easy pickings in the housing and equities markets, or by the oil suppliers themselves, drunk with the glory of their new-found wealth. Naturally, easy money provided by Federal Reserve chairman Ben Bernanke, European counterpart Jacques Trichet and the rest of the gang since September has empowered the speculators. Indeed, while real interest rates remain below zero oil speculators would appear to be on to a one-way bet, provided they are rich enough to sustain their buying - and the combined resources of the world's hedge funds, oil companies and dubious energy-rich Third World dictators are very great indeed. Hence if we do nothing, but continue to focus on housing, consumer inflation and the NBA playoffs, oil prices will continue rising. This will have only a modest short-term effect, but a highly damaging effect in the medium term, as the recession-producing tendency of high oil prices works its malign magic on the long-suffering world economy. Further rises are additionally dangerous because they may not quickly be reversed. In a market of entirely rational trading robots, the 1980 oil price spike to $40 might have been just a spike, with prices reverting within weeks to the $15 or so that was then the equilibrium. In the world of fallible speculators and other humans, the psychology of a rise to $40 made the price "sticky" on the downside at around $30, so that it was November 1985 before prices collapsed to $10. Thus if the oil price soars to $200 next week, we are probably condemned to $150 oil until 2013 or so, after which the price will collapse to $25 for several decades, as new supplies and bizarre and expensive government-mandated conservation schemes overwhelm the market. To avoid this dreadful fate, what should we do? There are a number of possibilities: We could invade somewhere. Considered as an oil acquisition exercise, Operation Iraqi Freedom has been a smashing success, and only appalling Wilsonian wimpiness in the US government has prevented the United States from taking full advantage of it. Iraq's known oil reserves have been increased by about 100 billion barrels since the invasion, as competent US oil companies have been free to explore for new oil employing techniques more advanced than the 40-year-old dowsing sticks used by Saddam's oil operation. At today's oil price of $130, less a generous $20 for drilling and extraction, those additional reserves have a value of $11 trillion, or approximately 10 times the most alarmist estimate of the cost of the war to date. The problem is that the US did not secure itself a proper royalty on the new oil finds (even 10% would have been worthwhile - $1.1 trillion over the next few decades.) Nor did it ensure, by setting up a privatized oil company and a trust fund for the Iraqi people diverting oil revenues from the Iraqi government, that the new oil finds would be exploited in an efficient manner and the supplies directed properly into the world oil market. Any future invasion of an oil-producing country should avoid these two mistakes and thus make itself self-financing. The obvious place to invade is Venezuela (even if current estimates of Venezuelan and Saudi reserves are wrong and there is in reality more oil in Saudi Arabia that could be unlocked if ExxonMobil and the boys were given free rein, the Saudis are nominally our allies, so an invasion would be considered unsporting by world opinion.) Since the 1.8 trillion barrels of Venezuelan oil deposits consist largely of the Orinoco tar sands, a Venezuelan oil-related invasion would impose an additional requirement: to keep the environmentalists away in order that reserves could be exploited with maximum efficiency. For those who feel that invasion-for-oil is altogether too Bismarckian in its implications, there are other alternatives. The most effective would be to use the interest-rate weapon, reversing the damage caused by the cuts since September and ideally going a little further, to fight the resulting consumer price inflation. A series of small interest rate rises would not be effective, because it would enable speculators to adjust. (The 0.25% rate rises in 2004-06, all 17 of them, we now know were completely ineffective in quelling housing speculation as they allowed the speculating frog to bask in the gradually warming interest rate water, rather than being forced by a sudden temperature rise to jump out of the saucepan.) The most effective interest rate trajectory would probably be an immediate reversal of the post-September cuts, jumping the Federal Funds rate from 2% back to 5.25%. This would still be too low to be effective in fighting consumer price inflation, currently around 4% even on the suspect government figures. However it should shock commodity speculators sufficiently to cause a sharp drop in oil and commodity prices which might, if we were lucky, become self-reinforcing enough to push oil prices down to the $80 level, which is probably the lowest we can currently expect. Once the immediate effect of higher interest rates had worn off, further rate rises, probably to around an 8% Federal Funds rate, would be needed to wring out inflation, but those could be undertaken over the next 18-24 months in the normal manner. # It is quite certain that the interest rate weapon, if used with sufficient vigor, would quell oil prices, but it's not entirely clear whether a single rise to 5.25% would do it. However, draconian rate rises beyond 5.25% to quell oil price rises would be deeply unpopular and would cause further catastrophe in the US housing market. Since invasion is presumably off the table, the political classes may thus attempt to impose other remedies for high oil prices, all of which would be either counterproductive, disastrous or both. These might include some or all of the following: Price controls on oil companies. These would have the cathartic effect of eliminating the profits of Western oil companies, but would have little effect on the market, since the majority of oil supplies are today not controlled by Western oil companies. # Subsidies. The effect on consumers of spiraling oil prices could be reduced by cutting petroleum taxes (as recently proposed by Senators John McCain and Hillary Clinton) or subsidizing gasoline prices directly. Such subsidies would increase rather than reduce consumption and would divert income from taxpayers (the ultimate providers of the subsidies) to the Organization of Petroleum Exporting Countries and other oil producers. Terrible and counterproductive idea. # Rationing. Britain did this at the time of the Suez crisis in 1956, when overall rationing was still a recent memory. Its initial psychological effect would be considerable and it might well prove politically appealing to a populist, economically illiterate president after January 2009. The principal gainers from such a measure would be the Mafia, who would find a new business in stolen and forged ration coupons. # Intensified corporate average fuel economy (CAFE) standards, ethanol mandates and public transportation subsidies. These would be highly politically attractive to the left, and are thus probably quite likely. Their effect would be far too long term to change short-term price movements. Apart from increasing costs in the economy, they would result in tens of thousands of additional fatalities a year, as the feeble mini-cars took to America's roads. # Intensified drilling in Alaska and offshore US areas. The right-wing alternative to CAFE standards; equally ineffective in the short term but much more helpful long term. Would probably intensify the 2013 price collapse as the new sources came on stream. # Closing down the commodities exchanges. The speculators have already found the counter to this one; a new crude oil contract is opening for trading in Dubai. To close that down, we would need to revert to the invasion option. In summary, a sharp rise in US and world interest rates is the best way to solve the problem of spiraling energy and commodity prices, which will probably not solve itself. If that doesn't work or is "politically impossible" it's time to prepare the 82nd Airborne for jungle warfare in the Orinoco Basin. Martin Hutchinson is the author of Great Conservatives (Academica Press, 2005) - details can be found at www.greatconservatives.com. # (Republished with permission from PrudentBear.com. Copyright 2005-07 David W Tice & Associates.) The unequal impact of war (Mar 12, '08) The southern axis of evil (Oct 3, '07) 1. Oil price mocks energy realities 2. How the US dream foundered in Iraq 3. Bernanke takes one more gamble 4. Indiana Jones and the last capitalist 5. The Mosul riddle 6. Where are those Iranian arms in Iraq? 7. Banking on incompetence and theft (May 23-26, 2008) - kohette to kahe Tue, 27 May 2008 17:12:50 +0100 http://atlanticfreepress.com/news/1/3964-evolve-or-die-can-we-shed-our-moral-primitivism-before-its-too-late.html#comment-5203 Capitalism – past its sell-by date? PDF Print E-mail Click Name for Bio of William Bowles Thursday, 30 November 2006 by William Bowles Review: The Chávez Code – Cracking US Intervention in Venezuela by Eva Golinger Chavez & BushPerhaps the greatest triumph of modern capitalism has been its ability to sell itself and to do it by fair means and foul with the emphasis on the foul. Historically, it has been the CIA which up until the 1990s did the dirty work for US imperialism as the record clearly shows. However, the CIA’s record in overthrowing foreign governments is far from being a success story. A new strategy was needed, and one which was untainted with the ‘dirty tricks’ label of the Nixon years and which could be sold to the public under the umbrella of ‘spreading democracy’, Western-style of course. Aside from the obvious harnessing of the corporate and state media in this process has been the creation of innumerable ‘foundations’, ‘NGOs’ and spin-offs of the various organs of the state such as the United States Agency for International Development (USAID) and a plethora of quasi-governmental structures like the National Endowment for Democracy [sic] or NED. Big business has been an integral part of this process funnelling literally billions of dollars into a plethora of foundations and ‘think tanks’ which work hand-in-glove with the state in not only projecting the capitalist way of life but in directly interfering in the internal affairs of foreign countries whenever ‘private property’ is seemingly threatened. These foundations have all the appearance of ‘objective’ and ‘neutral’ institutions, employing an army of ‘experts’ in every conceivable field of endeavour. In addition they also work closely with PR companies and survey organisations whose job it is is to translate their ‘learned’ papers and ‘research’ into digestible chunks for public distribution via a complicit corporate and state media. Taken collectively, they represent a vast resource that has been constructed by the major Western powers largely since WWII, although the two most infamous—The Council on Foreign Relations (US) and its UK equivalent, Chatham House, were set up at the beginning of the 20th century, but both these structures were direct spinoffs of government and they work closely with government in devising broad imperial strategies and analysis. Chatham House for example was a creation of the British Foreign Office. An analysis of these institutions reveals that the boards are dominated by the ‘captains of industry’, the military and security services and leading members of the state bureacracies and the same names crop up over and over again right across the board. Alongside these notables we find an army of academics—most are suitably equipped with the requisite doctorates and masters degrees in their relevant field of study—all the better to give them the right air of authority. The reasons for their success in selling capitalism are not immediately obvious for they not only operate in the background but also in close collaboration with the corporate and state media which uses them as ‘reliable’ sources or whenever the stamp of an ‘expert’ is required, thus legitimising the propaganda. They act therefore as ‘backup’ and a point of reference for public pronouncements made by the state and especially the media, especially when the government line is challenged. - kohette to kahe Tue, 27 May 2008 16:38:42 +0100 http://atlanticfreepress.com/news/1/3964-evolve-or-die-can-we-shed-our-moral-primitivism-before-its-too-late.html#comment-5202 German labour minister Franz Muentefering has compared hedge and other speculative funds to locusts ravaging fragile economies and enterprises for short-term gains. this article appears in the March 2, 2007 issue of Executive Intelligence Review. There are, worldwide, between $500 and $600 billion in investments outside Japan, which took place with the help of cheap yen credits, benefitting from the favorable interest rates. If the yen now starts to rise, on the basis of the rise in interest rates, the effect would be much greater than 0.25%. The main beneficiaries of the carry-trade are the big banks, hedge funds, and equity funds, whose derivatives trading has led recently to a worldwide pyramiding of all segments of the market. The gigantic bubble of the casino-economy has to grow; that is, it must make profits, and for this it requires a continuous flow of liquidity. At the moment that these capital streams start to flow in the opposite direction, because of the changed interest rates and exchange rates, panic and an interlinked cluster of risks could lead to a meltdown of the system. Who Is Really To Blame? A widespread misconception exists, that behind the "financial locusts"—which are massively participating in the carry-trade, and which are now snapping up everything that's not nailed down, including in Germany, from Mittelstand [small and medium-sized] enterprises—there lurks somehow "the U.S.A." and "Wall Street." Indeed they are involved; but as the Economist reported in its Feb. 3-9 issue, in an article headlined "Britannia Redux: A special report on Britain," the City of London boasts that it is henceforth the most important financial center in the world, and thus the British Empire has been revived in the form of globalization. And London is not the capital city of a normal nation, but also that of the Commonwealth, to which, for example, the Cayman Islands, Bermuda, and the Bahamas belong. And according to the the CIMA, financial authority of the Cayman Islands, 7,481 of the 9,000 worldwide hedge funds are registered in the Cayman Islands, a British Crown Colony. These so-called offshore markets are subject to no banking oversight or regulation on the part of central banks or governments. In 1993, the "Mutual Fund Law" was passed, according to which the simplified establishment or registration of hedge funds in a deregulated system should be facilitated. The goal was that the Cayman Islands—which have already been, since the beginning of the bubble economy, with the creation of the Eurodollar market, an Eldorado of uncontrolled credit creation—should be made into even more of a pivot of the "finance industry." Since the middle of the 1990s, the hedge funds were advised to have their financial operations registered in the Cayman Islands, where they could operate outside national laws and regulation. In this way, the hedge funds got the biggest share in the British financial system. In the course of time, the banks that had initially been the main credit sources for the hedge funds, became increasingly consolidated with these funds, which now, through their takeovers, are exploiting and sucking out the wealth of many nations. How the Locust Funds Operate A report by the consulting firm McKinsey & Co., from January of this year, points out that Wall Street and the U.S. are losing out to London as the center of world finance. And this is a matter of insanely huge arrangements: The Bank for International Settlements (BIS) reports that there are $370 trillion in outstanding so-called over-the-counter (OTC) derivatives. The largest type of derivatives are interest-rate derivatives, with $262 trillion, of which 34% are handled in London, and 24% in New York and Chicago. The third-largest category of derivatives is the $38 trillion in foreign-exchange (currency) derivatives, of which 49% are handled in London, and only 16% in New York. And these bubbles are increasing at such an insane tempo that their assets in 2006 grew around 63% (!) in London, and "only" 13% in the United States. But no one, no government, and no central bank, knows the real dimensions of the financial activities of the "financial locusts," who suck the guts out of valuable industrial firms and other objects of speculation worldwide, for their own profit, and then leave them in ruin. Because there is no transparency for these activities, as German Finance Minister Peer Steinbrück has many times complained. And if one accounts for the enormous volume of loot taken by these "robbers and plunderers" (to quote a spokesman for the British GBM trade union), it is not surprising that Great Britain and the U.S. Administration have, so far, directly opposed all efforts for re-regulation of this predatory monster. When [Social Democratic leader] Franz Müntefering in the Summer of 2005, first enunciated the concept of "locusts" for the hedge funds and equity funds, he was absurdly accused by the international financial press of anti-Semitism. Since then, they have constructed the myth that Germany, through these statements and its repeated demands for transparency or even regulation, has caused irreparable damage. In truth, this is a veiled slander campaign by the international financial circles, which John Perkins described in his book Confessions of an Economic Hit Man, which is well worth reading. The fact is, that the completely lawless piracy of the locusts has not only led to enormous losses of public property, but also the limitless greed of the speculation-driven willingness to take risks, poses the greatest danger to the world financial system in a long time. The enormously increasing volume of the carry-trade, backed by the ascent of the hedge funds, could at any moment detonate the system, for the locusts coldbloodedly make use of the fact, that interest rates do not fluctuate with supply and demand, but are fixed by the central banks. Since Japan went along with the pressure from Washington and London to keep its interest-rate rises minimal, for years there has been a de facto zero interest-rate policy, which allowed a spiral of speculation to take off by means of the carry-trade, pumping liquidity into the various bubbles. But now, eight members of the Board of the Japanese central bank have shown more interest in the stability of the yen than in the potential chain reaction that these interest-rate increases could let loose. In September 1998, as a result of the Russian state's default in August, the LTCM hedge fund, which was at that time the world's largest, threaten to go bankrupt, which in turn threatened the meltdown of the world financial system, as the BIS said in its annual report. Only because the 16 largest banks in the world put together a giant bailout fund of over $4 billion for the LTCM hedge fund, which stabilized over $100 billion in derivatives, was a crash of the system averted. Since then, the number of hedge funds and the volume of their raids has grown many-fold. The global financial system, with its totally over-indebted banks, is today a minefield, in which literally thousands of mines are going off and could set off a mega-collapse. Thus, for example, a new war against Iran would be the death-knell for the financial system, which would throw the world into chaos, and it cannot be excluded that part of the financial oligarchy sees this as the only way to try to keep their control, or to prevent their replacement by those who are oriented toward the common good. A New Bretton Woods Now! There is only one way out: a U.S. government liberated from Cheney and Bush must, together with Russia, China, and India, place on the agenda a new organization of the global financial architecture, in the tradition of Franklin D. Roosevelt, as Lyndon LaRouche has proposed, and as is currently being discussed in the American Congress. The hedge funds, equity funds, and their virtual assets will have no place in such a new system. The best thing that the nations of Europe could do in their own interests, is to work for this New Bretton Woods. - kohette to kahe Tue, 27 May 2008 16:33:26 +0100