Random Notes  

Michael Klare and Michael Lynch were guests on Phillip Adams' show on ABC Radio National last night (Real Audio) with Lynch doing his usual optimist / cornucopian act (which he does very well, even if the average peak oil aware person will end up gasping in disbelief as the interview goes on) and Klare taking on the peak oiler role (and doing a very good job of it). The oil part starts about 25 minutes in (thanks to the Feral Metallurgist for the tip).

I've been busy discussing my least favourite subject in the world (Sydney house prices) most of the night, so this roundup will be a brief one.

Mobjectivist has continued his excellent modelling work, so if you're interested in the deficiencies of the logistic model (as originally created by Hubbert and remaining popular ever since), go off learn how to do it properly (and get a maths refresher course while you're at it). He also has some comments on the Iraq Oil For Food "scandal".

My colleague in the rainy north east (of the pacific) has a mini roundup of his own which contains some interesting snippets (I always enjoy those Mogambo links - how could anyone resist "the angriest guy in economics" and his gold obsession).

I am, as hard as that is to believe, getting freaked out more and more. The Federal Reserve didn't increase total credit by much, but they did continue accelerating down the Road To Economic Hell (RTEH) by buying, outright, $2.4 billion of debt last week. In short, the government borrows by issuing debt, and the Federal Reserve creates the money to buy the debt! Bingo! Not only creating more money and credit, the damn thing that got us to this point, but to fund the activities of the government! Gaaahhhh!

But the bigger news in this filthy area of the economic world, for me, is that Foreign Holdings of US debt deposited at the Fed went up by a whopping $7.6 billion last week. Whew!

But the biggest, scariest thing of all was that nominal incomes dropped. And when you adjust nominal incomes by the reduction in buying power from all the inflation around here, then it is no wonder that inflation-adjusted incomes dropped so much, too. But I wail like a wounded banshee (ooOOooOOoo!) when I realize that the government's piddly little chain-weighted, hedonically-adjusted statistical adjustment to incomes for inflation is around two stupid little percent. At that, I laugh this big booming Mogambo Laugh (BBML)! Hahahaha!

I am here to tell you, with the courage found only in a guy fully clad in body armor and sporting a machinegun in one hand and a flamethrower in the other, inflation is a LOT higher than two or three percent. Horribly higher. Like somewhere in the range of six to nine percent, at least. And so when you adjust incomes for the REAL rate of interest, then the drop in real, inflation-adjusted incomes is getting to be pretty significant!

If you have the patience to read the whole thing you might conclude that if the Mogambo is to be believed (and not simply locked up in an insane asylum) then running an empire is an expensive business and one not best left to deluded and ideology obsessed lunatics like the ones that inhabit Washington (err - an aside to my latest "visitor of the week" from the Federal Reserve, you aren't included in that group, as you obviously aren't doing much at all if you have enough free time to read my rantings during your work day).

The BBC has an article up noting that the US-Australian led grouping to pretend we're taking action on global warming has postponed its inaugural "climate change" summit. The Independent notes that business should be embracing action on global warming.

As an example of what economists call "market failure", climate change is hard to beat. Normally when something damages or disadvantages us, the market moves to solve and correct the problem. But with global warming, the very reverse is occurring.

Even if the economic and environmental consequences of climate change were immediately apparent, which in the main they won't be for some years yet, the consumer would still buy on price. Paying extra to save the planet is something which collectively we seem unwilling to contemplate unless forced. So we buy our cheap Chinese goods, even though China has become one of the fastest-growing sources of CO2 emissions in the world. To buy the more expensive, greener variety seems just plain stupid when nobody else is doing it.

And finally Seeing The Forest has a note of the perils facing reporters in Iraq. And while I'm on Iraq I noticed an article on a recent Chomsky speech in my feeds tonight.

The four major crises facing the world, Chomsky said, are: nuclear war, environmental disaster, the indifference of the superpowers to the first two problems, and the failure of the superpowers to make amends for past mistakes.

But Chomsky spent most of his 90-minute speech and hour-long question-and-answer session on Iraq, Iran and the War on Terror.

The press is unable to communicate the scale of destruction in Iraq, Chomsky said, because reporters are confined to the safety zones around the capital.

The destruction of a foreign country is not a new phenomenon in U.S. foreign policy, he added. Chomsky mentioned the history of U.S. involvement in Iraq and Iran, including aiding Iraqi leader Saddam Hussein during his war with Iran from 1980 to 1988.

"Bush, Blair, Powell and Rice bitterly denounce Saddam for crimes in the 1980s," Chomsky said, referring to the President, the British Prime Minister, and the two most recent American Secretaries of State. "What is missing is [Saddam] committed those crimes with our help."