I haven't blogged for a while.... the news about the global economy has been so widely reported and I didn't feel I had anything significant to add that hadn't been said before.

Suffice to say that I have been blogging about the problems in the US economy and the inter-connectedness of other economies for quite a while... And people are starting to wake up to the concept that if you spend a trillion dollars or so on a war and have to borrow the money from other countries at some point someone wakes up and smells the coffee and says "by the way what are your assets really worth?"

The opportunity now surely has to be for people around the world to subscribe to a new vision.

That vision has to be to move away from the cultural meme that was originated in the US by Edward Bernays. That meme goes, "We have to move the US from being a needs based society to a desires based society". I would venture to say that this concept was the most significant cultural export since the advent of Christ.

That meme which in essence is about self interest drives consumerism in China and India and everywhere. And it is out of control greed that is wrecking the planet. Every shareholder looking for a guaranteed ROI and every consumer looking for the latest greatest flat panel screen to view the latest blockbuster movie is a contributor.

And I am no different. I'm also looking for the quick investment in a stock that is going to go through a three to four x growth over the next six months and make an easy buck....

So how do we break free from this downward spiral?

The answer is that we are not going to, but it will be done for us.

I was reading a report from Ken Rutkowski earlier this morning about American consumerism. What I think is interesting is that the speed of the transmission of memes is increasing at a massive rate. And populism of an idea is going to cause the shipwreck regardless of what anyone does at the top to try to keep the ship of state afloat.

Here is what Ken's article said:


This is the thing that is going to truly alter society next. People are going to run from one side of the boat to the other as contrary stories appear. Eventually the boat capsizes. Sorry to be a doomsayer, but this is what is going to happen.

It is really about the big ideas in society.

Look at Afghanistan. That seems to be the next big focus for the western world's military misadventures.

The unfortunate reality is that while there may be Taleban or Al Quaida there using it as a staging base and they may be the problem, the real issue is the asymmetric issue of how they work. Afghanistan is the global centre of the opium trade. And from opium you get heroin. And heroin is sold at huge profits. While heroin is illegal it attracts high margins. If you legalized heroin you would remove its black market mark up and remove its profitability.

The problem is that the profits from illegal drugs like the profits from illegal arms are the life blood of the global banking industry. Think about it: Even drug dealers have to move their money around somehow. And the easiest way to do that is through the legitimate banking industry. I read sometime ago that around a third of the money in the financial system is from illegal drugs. So the point is that the people who touch that money are making money from it. They don't want their profits to decline so they aren't going to put any pressure on governments to do what needs to be done - to control the distribution of drugs by regulation.

So while you have that, no change will take place. The Teleban is not really any different to organized crime. And organized crime isnt getting any smaller...

So the train wreck unfolds slowly at first and then suddenly it goes into real time....

Somewhere in the next year or so we will see the results...

If ever there were examples of how interconnected we all are, we are seeing them right now.

First we had the oil price crisis which some people think is caused by speculators, but in reality is caused by the fact that the speculators have formed a belief that there is limited supply and increased demand. Hence market forces will set prices higher and higher until there is no further tolerance for higher price.

Now we have the news that the wild card of the Iowa floods is having greater impact on the local farmers than we might have expected. Check out this story.....(From Moneyweek)

"A catastrophe for Iowa farmers will not be just a catastrophe for Midwestern Americans. In the Iowa floods, we’ll see more evidence of how the problems of weird weather (climate change) combine and ramify the problems associated with Peak Oil. In this particular case they lead to an inflection point sometime around the 2008 harvest season, which will also be our time of political harvest.

These are not your daddy’s or granddaddy’s floods. These are 500-year floods, events not seen before non-Indian people started living out on that stretch of the North American prairie. The vast majority of homeowners in Eastern Iowa did not have flood insurance because the likelihood of being affected above the 500-year-line was so miniscule — their insurance agents actually advised them against getting it."

It seems that not only has the move into corn/ethanol reduced the availability of food, but now with the increased price of delivery via trucks and the reduced amount of recompense that farmers will receive via insurance that there are significant stresses on the whole agribusiness/infrastructure ecosystem.

Expect that the speculators will get onto this next and drive up futures in all food products in the US and that will impact prices in other countries too.

Apparently we are going through a period where there is virtually no sunspot activity. Here is the article.

The last time there was an extended period of zero sunspot activity coincided with the Younger Dryas, mini ice-age. We also had global cooling over the year Jan 2007 - Jan 2008 of .7 degrees Celsius, which is said to be the fastest atmospheric cooling in history.

Interesting that while on the one hand we are seeing the breaking up of the big ice shelfs in both the Arctic and Antarctic, we are also seeing this kind of cooling off. Scientists have been saying that the change in salinity from the ice melts can bring on an interruption to the thermohaline escalator and that it is already measurably slower than normal. Could it be that we will experience a sudden mini ice age?

Looks like the price of putting solar into your home is about to get a whole lot cheaper... The shortage in the kind of silicon used in solar panels is coming to an end.

Now all we need is for the governments - state and federal - to do what should have been done years ago - to put a premium on home generated solar energy that goes into the grid, so that home owners are encouraged to install solar. If this was done instead of a subsidy payment for the installation there would be a lot more investment in solar in this country.

Last night an old friend of my wife stayed overnight. They knew each other back when they were both doing PR in the music business.

The friend has been working in Canberra for some years now, for the Federal Government. (Even the Government needs PR!)

She remarked about the change from Liberal to Labour and how it has personally affected her. There was an internal announcement that the minister would be visiting the office so everyone should be on their toes. The staff was expecting the minister, as was the norm during the Howard years, to walk past all the offices and go into the senior bureaucrat's office for a meeting. Surprise, surprise. Julia Gillard went up to each person in the office, shook hands and introduced herself. And then told each person that if she wanted information on a specific topic that they should be prepared to be called directly to provide that information. Direct, personal, non-threatening and totally refreshing.

And more pointedly this comes after apparently a lengthy period during the Howard years, where there has been a growing level of needing to comply with a political imperative in order to ensure that annual bonuses were available to staffers - corruption of intent, if not provable, illegal behavior.

Apparently Penny Wong has done the same thing. As I would expect all other ministers. Strong work ethic, smart people working to generate a new sense of what is right in the legislative capital of Australia.

Now all we have to do is to kick out labour in New South Wales so that the state can recover from the same indigence that developed under the Liberals in Canberra.

All political parties are the same it seems. All run by people who get in power because they provide a shining light of honesty, truth and righteousness. But after a while the rot sets in and they fall in love with the free travel, the commonwealth cars, the gofers and the huge pension plans that come with the job. 

This is a video that I discovered on Home Page Daily. Those guys are doing some of the best aggregation of video available on the web today for people who are awake and who care about the planet and the issues. Definitely worth visiting. Unfortunately they haven't yet figured out how to run personalized RSS feeds or alerts in the way that Real News Network has...

This is Lester Brown at the recent Pop Tech:

What a wonderful story!

Daniel Barenboim, the conductor, who also is an Israeli, has accepted a Palestinian passport.

His comment in this article in the UK Independent says it all:

There is some really important news developing at the moment.

Just like Bill Clinton said, "Its the economy, stupid". It's the economy of the world, though. Not just that of the USA.

Here are some important ingredients of the story that we all need to really take on board:

1. President Bush has convened the Plunge Protection Team. This is the group that gets together to try to save the stock market in times of major stress. The last time it got together was after 9/11. The fact that it has got together should be like the fire alarm going off in the building for all of us.

2. The Sub-Prime Crisis. This is not just something that is going to affect the US. Look what Anna Schwartz has to say about it. When they say she wrote the book, believe it.  Professor Anna Schwartz co-authored the seminal work about monetarism with Milton Friedman. She says that Allan Greenspan screwed it and that he should admit it.

3. Peak Oil. By now everyone should know what Peak Oil is. Now read this interview with Matthew Simmonds. He is one of the elder statesmen of investment banking in the oil industry. He is saying that we are now beyond the peak. And just in time for demand to go through the roof from India and China.

There is a tendency from people to try to point fingers and apportion blame.

We actually have to get beyond that right now. Pointing fingers now is like being on the Titanic post iceberg and debating whether it was the captain's fault for not posting more lookouts or the company that made the ship's fault for not putting more lifeboats into the design spec. Once you are taking on water that is all quite irrelevant.

Over the last weekend my older daughter told me that she recently saw an interview with David Suzuki where he said that the most important things for us to learn was how to fish and how to preserve fruit. How right he is!

The Christian Science Monitor is running a series of pieces about the big challenges ahead for the coming year.

The first one is about the end of the era of cheap food.

It is worth reading...

Beyond that however we have the biggest challenge - which is that while the Presidential race in the US is on, no one over there is paying any attention to the real issues - survivability of the planet. So we are going to have to wait another year while the various candidates blast the media with rhetoric and do nothing.

At the same time, look at this trend, which is all too visible in Australia right now - government held hostage by a single industry and lobby group. In the case of Australia one of those lobby groups with huge power is the oil industry. As the price of oil continues to rise, so too does the marginal rate of tax on petrol at the pump. The federal government now has too strong a vested interest in the continuance of revenues from the pump to have any motivation to change the revenue collecting dynamic. That means that the government will now do exactly what the oil industry wants, if it didn't do it before!

In New South Wales the 500lb gorilla in the room is the poker machine business. There is so much revenue going to support the cost of infrastructure build (and incidentally salaries and benefits for politicians too) to allow the politicians to make any decision other than one that allow continuance of the industry.

We need to have a public analysis of the trends relating to these gorilla industries that fund government. We need to understand which industries are likely to be the key funding engines for the nation and the states and for the elected officials who are charged with making decisions that affect all of us.

When food prices double as is predicted by the Christian Science Monitor and petrol prices double there is going to be growing hardship in the community. We need to have a look at whether government is really capable of making an unbiased decision, when they know that in many cases making the 'right' decision for the community will almost certainly negatively impact the companies that are providing both money by campaign contributions or by indirect taxation of utilities etc.

More thoughts on the Social Networking Conference, Day 2, are here.