Silver

Silver is acting unusually in the markets. In 2010, silver has doubled. The 2010 low-price was $14.82. The 2010 high mark so far was $28.638. What could justify such insane increase in the silver price. Speculation is the only possible answer. When can we get to a real economy based on real productivity, producing real and useful goods? We must move away from a speculative, financial economy where gains and losses are all in numbers if we want to avoid bursting bubbles and a unfair and unjust society.

A friend sent me these links: JP Morgan and HSBC are manipulating the silver market since 2008. This is not the first time in history that banks or rich individuals are manipulating the silver market. The interesting part about this current manipulation is that it was picked up by the independent news and activist groups. People like Max Keiser and Alex Jones rallied and promoted people to buy silver in order to financially hurt JP Morgan and cohorts. It is a risky business to put yourself as a single small investor against the bullies like JP Morgan. Nonetheless, it is fascinating strategy - although uncertain in success - to band together many small investors to bring down a giant bank by betting against it on a market gamble, in this case the silver market. According to Max Keiser as long as the silver price remains higher than $25/oz. JP Morgan is punished. As a last note: let's not forget that this war cry to buy silver to crash JP Morgan is also a form of silver market manipulation. But at least this is a public one talked about on the internet, while JP Morgan's shorting is a stealth maneuver hidden from the public.

PS: About 2 weeks later this was posted: Is J.P. Morgan Getting Squeezed in Silver Market? According to this JP Morgan is now manipulating the copper market to offset losses in the silver market.

European State of Affairs

European state of affair is very gloomy. First Iceland. Then Greece. Now Ireland. Next is Portugal. And the prediction is that Spain will follow. Thereafter maybe Italy. Many people have predicted it. It did happen just as predicted. Only the governments said it would never happen. Take Ireland, up to the very last day, the government of Ireland was denying any problems and talks to the IMF and the EU about a rescue plan. The next day it was all official. How can anyone lie so blatantly?

About Spain? Some say the the European Financial Stability Facility will be out of funds to rescue Spain. Will they increment the fund? Where would the money come from? EU printing presses? US printing presses? Currently the Euro/US$ exchange rate is approaching 1.50. The Euro is very strong and the EU economy is suffering under it. This seems a good opportunity to print Euros, rather taking a $-based credit from the US (IMF or similar). Printing Euros would weaken the Euro currency and remove pressure from EU companies, but it would be against US wishes as the only interest of the US is to flood the whole world with printed US dollars. The gain for the US of sending $-based credits to the EU would be 3-fold: more dependency of the whole world on the US currency, weakening the US dollar even more thereby strengthening US companies, and profiting from future interest payments. So, will the political strength of the US be powerful enough to force the EU to take a US credit rather than print its own Euro money?

Will Spain be rescued? I am sure about it, the question is only how, i.e. by whom.

A Lesson in History

This TED video presentation shows a small part of history, as "seen from the other side". It outlines the history of the Native American Lakotah tribe since 1824. History is always written by the victor. 15 griping and sad minutes of video by Aaron Huey. Minority groups and natives around the world have and are still suffering the same treatment.

Germany upholds Restrictions on GMO

This week a German court voted in favor on keeping current restrictions on planting and growing GMO (Genetically Modified Organisms) plants. Overall there is good news and there is worrisome news. The good news:

• Existing restrictions on distance and liability of genetically polluting neighboring fields are kept in place. [Proving pollution and the source of pollution however seems dauntingly difficult.] 
• In April 2009, Germany's government banned commercial production of GMO maize type MON 810 GMO from U.S. biotech giant Monsanto on health concerns despite European Union safety approval.
  

The worrisome news:

• In 2010 Germany accepted an EU decision to approve commercial cultivation of the GMO potato Amflora developed by German group BASF for industrial starches, not human food.
• The EU is responsible for GMO approvals in the bloc, but is considering new rules to permit individual member states to decide whether biotech crops are cultivated in their countries.

Slowly the rules and laws safeguarding us from GM pollution in the EU are eroding. It seems that the industry (Monsanto, BASF, Bayer, etc.) is partially successfully working on a divide and conquer strategy.

The Story of Electronics

It started with The Story of Stuff. Annie Leonard presents her thoughts on the sad story of the production process in a concise, yet cheerful manner. Her upbeat attitude to solve these critical issues make her educational videos nearly fun to watch. Annie Leonard made the Story of Stuff a great story. Over the last four years she has added to it, and made a number of sequels: The Story of Cosmetics, The Story of Bottled Water, etc. And now: The Story of Electronics, 7 minutes worth watching. Here is her site: The Story of Stuff, and here is her YouTube channel. Perfect for us as adults, perfect also to teach teenagers the role of corporations and the outsourcing of cost to other nations. Well done Annie.

Economy

This phrase taken from Tim Jackson's talk "An Economic Reality Check" at TED (time 7:00) sums it up pretty well. No additional comment needs to be added: The world we live in is an economy in which we the people are "being persuaded to spend money we don't have on things we don't need, to create impressions that don't last, on people we don't care about."

Cash

I like Cash. No, not the green bills, I am talking about Johnny Cash. I admire his songs and lyrics. However, listening to his songs we too often get reminded that things aren't changing. The 1960s and 2010. It is all the same. One of the biggest problems - especially for the poor people and the poor nations - remains debt.

You load sixteen tons, what do you get?
Another day older and deeper in debt.
Saint Peter, don't you call me, 'cause I can't go;
I owe my soul to the company store.

This song under the title "Sixteen Tons" was first recorded in 1946 and later in 1987 by Johnny Cash. How far have we come? It is deja vu all over again. Debt is dictating our lives and enchaining us as individuals as well as at the national level. Today we owe our souls to the bank (or the World Bank and IMF in the case of nations).

And environmental pollution is also not something new. He sung about it in "Don't go near the water" in 1974. Here is a video version that will correlate words from 1974 with photos from 2010. Another one of my favorites is "The Man in Black". Listen to it if you have time.

Hemp

Hemp is a truly versatile material. It is well known that it was used for making quality ropes. It can be used for clothing. It is an excellent insulating material. Recently I found this video on hemp as a construction material: Hemp bricks are stronger and lighter than concrete. Hempcrete is sound absorbent , moisture absorbent, and has thermal mass. The list of uses goes on and on: paper, car bio-fuel, plastic-like panels, shampoos, soaps and food. No surprise that hemp is sometimes called the plant of 30,000 uses because it combines the utility of the soybean, the cotton plant and the Douglas Fir tree into one single plant. Now that is an impressive plant.

ParEcon

ParEcon is short for Participatory Economy. ParEcon is a social economic model trying to achieve: equity, solidarity, diversity, and self-management. Equity is defined here as "a condition in which each person gets what they deserve for what they have done, and no one gets more (or less) than that". A key site publishing information on ParEcon is at Z Communications, a company adhering to the parecon principles.

A good starting point might be reading the Capitalism vs. ParEcon comparison sections. The full book "ParEcon - Life after Capitalism" published in 2003 gives additional details.

For those who prefer videos of textual info, have a look at this short intro video clip.

The ParEcon model is certainly strong on equalities, justice and democracy. The resulting economy will be stronger in terms of sustainability and social interaction. It has the ingredients for more happiness and promises to reduced materialism. Its criticism is primarily in the area of efficiency. Capitalism as we have it today has certainly failed as it has failed to serve 80% of the population. We need a new model and studying ParEcon is worth the effort of a few hours of reading.

Competition

Competition is such a crucial concept in our daily lives. Free market economists see competition as a key element to their economic model. Socially, the results of capitalistic competition have been disastrous. There is positive and negative competition or at least one can agree while competition could be seen as something neutral as a concept, there are positive and negative effects of competition.

While competition is a crucial factor in economy and society, the amount of books written on this topic is relatively small. A simple search revealed that most articles deal with the concept of competition in sports and tend to give instructions to coaches on how to introduce, manage and train competition in their sports team. A typical article is this, published by Damon Burton and Thomas Raedeke in Sport Psychology for Coaches. Here is a simple and limited article on competition at the workplace.

In Webster competition is defined as

• 1.a: the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms
• 1.b: active demand by two or more organisms or kinds of organisms for some environmental resource in short supply
• 2: a contest between rivals

This definition is all "negative", it is about one-against-the-other, a zero-sum-game attitude, a fight for scarce resources, and rivalry. Why can't we define competition as something positive? How about a definition like this?

• the effort of two or more independent parties to achieve a desired common result by comparing and contrasting independent ideas

I was criticized once for criticizing competition and labeling it as cut-throat, stab-in-the-back and winner-takes-it-all. Competition could be a positive force, but for most part in our economy it has a negative social impact. Discussing the topic I started wondering why we don't have two words, one for positive competition and one for negative competition. In the English language at least its definition seems to be describing a rather fierce force in a zero-sum game. Maybe other languages distinguish between competition leading to negative effects and competition leading to positive effects.

I am not against competition, we need competing ideas and we need freedom of choice between these ideas. The same for products, let the best product win. What we need is an open and fair competition that reflects human values and is based on respect for the others (the competing teams). A competition based on sharing which has the benefit of all in mind. Forced monopolies are usually not a good thing. One of the most urgent areas were we need to abolish a monopoly and need to introduce competition is at the heart of the monetary system. Let's legalize creation of money and give the FED some competition. 

That reminds me of code competitions and challenges to solve particular problems that are based on an open and positive competition. For example a mathematical problem is publicly posted to all competing teams together with a means of scoring a result. Different teams now start coding different solutions. Whenever a solution is available it is published online and rated on a public scoreboard. All teams can see all current algorithms and their score. All teams can and are encouraged to take existing solutions (source code) and improve on them, combine them with their own algorithms, and re-post these improved solutions. [Our economy would call that stealing ideas.] This iterative game stops when a defined time has passed or a defined goal regarding score has been reached. Astonishing creativity and results have come forward through such competitions. Some universities and companies nurture such challenges. Some events are called code-a-thon or similar where people from different companies come together usually for a day or two to cooperate and compete in a positive fashion to derive a common solution.

In a TED talk an education specialist explained that in a test the best results have been achieved by dividing a class in multiple groups, having them all in the same room, requiring that all share their current results at all time, encourage adopting ("stealing") others' ideas, and allowing team members to switch teams voluntarily whenever they wanted.

On Wikipedia the definition of competition is also in terms of a zero-sum game, as rivalry and it states that competition arises whenever two or more parties strive for a goal which cannot be shared. The page acknowledges the positive and negative competition. It labels the one as cooperative competition and the other as destructive competition. Co-operative competition is based upon promoting mutual survival and strives for a "everyone wins" solution through peaceful exchange and without violating other people. This is clearly the type of competition we must foster.

On a side note: The Wikipedia page makes also a reference to the term coopetition. At first glance it sounded like an attractive term for positive competition. At a second look though, it is not the right term as defined by some people. Webster does not recognize the term. Wikipedia defines coopetition as a dual-faced attitude of cooperating with the competitor (enemy) where victory seems impossible while at the same time continuing with destructive competition against the same competitor in other areas. So, the cooperation only stems from the realization that competition is futile and at the same time destructive competition continues. There is no voluntary cooperation in this at all. It is more or less forced cooperation as a last resort to survival. And still the mind set has not been changed as destructive cooperation is still followed as the principle way of doing business wherever possible. Furthermore, at a linguistic level US First claims a trade mark on the term. According to this definition and the legal claim on the term, coopetition is not what we need, and for lack of having found a better term, I will still need to refer to terms such as "positive competition" and "cooperative competition".

Happiness

Nic Marks talks about happiness at the planet level, the national level and the personal level in his talk "The Happy Planet Index". The HPI (Happy Planet Index) rates all countries on their happiness, or better said on their sustainable happiness, i.e. simply put happiness in relation to the resource consumption. Which is the happiest country? Costa Rica. Why? They did away with the military all together, 99% of the electricity comes from reusable resources, they invested in social and health programs, they enjoy a 78-year life expectancy (higher than US), they have one of the highest literacy rate in the world, they were the first country committed to be carbon neutral by 2020. And they did all this while using only 25% of the resources used by Western countries. Time to get rid of the GDP as measure and replace it with the HPI. Here is the official site of the Happy Planet Index.

On a more personal level, have a look at 5 Ways to Well Being.

An inspiring talk!

Oil and Corexit

Susan Shaw has dedicated a great part of her life to the damages caused by oil disasters such as the Exxon Valdez and the BP crime in the Mexican Gulf. She is an expert on marine toxins and her brief talk "The oil spill's toxic trade-off" is an excellent summary of the dangers of Corexit and the political and big-business attitude in which it is used.

Dark Side of Housing Bubble

This is one of the most touching videos about the negative after-effects of the housing bubble: Foreclosure, a short 8-min news report by KCET bringing it all to a (sad) personal level.

Individualism vs. Collectivism

Why is it that "me", "I" and "individualism" are so ingrained in US culture? How does that compare to Asian cultures that are deeply rooted in "us", "together", "community" and "collectivism"? The TED talk entitled "The Art of Choosing" by Sheena Iyengar shows some intriguing scientific results related to this topic. Is this an explanation why cooperation is difficult in the US and most things in the US are based on hyper-competition?

Find Oil, Get Poor

For some time I wondered why rich countries that find oil get richer, but poor countries that find oil get poorer. There is not a single example of an African nation that found oil and by doing so improved economic conditions for its people. In all cases, in the African continent, income and wealth from oil ended up in the pockets of the multinational exploring companies (MobilExxon and the like), arms dealers and manufacturers, and a handful of corrupt politicians, but never in the pocket of the people. Often the issue is also meddled with by intrusions from the IMF and the World Bank. The involvement of these two organizations in these poor countries having discovered oil does not improve these nations' fate of getting poorer. It is not limited to oil, other resources will do as well, and it is not limited to poor nations in Africa, poor nations in other continents are likely to follow the same path. There are some exceptions, most notably Bolivia and Venezuela.

Today I started reading up on this known issue and I learned that there is even a term for this behavior. It is called "the Curse of Oil" or the oil curse for short. The general term is Resource Curse. The 16-page report by Samuel R. Schubert published in the scientific journal Oil and Gas Business in 2006 entitled "Revisiting The Oil Curse: Are Oil Rich Nations Really Doomed To Autocracy And Inequality?" describes the situation and the facts in an excellent fashion. Read it, it is fascinating.

When Western politicians, organizations, corporations (Bush, Obama, Blair, IMF, World Bank, etc.) say and dictate that poor countries must do what is right for the people, they really mean the western corporations. And they (with help from their credits) have the power to modify policies to see through that the benefits of oil finds in poor countries flow back into the rich nations. An article entitled "When Two Poor Countries Reclaimed Oilfields, Why Did Just One Spark Uproar?" in the Guardian written by George Monbiot also talks about this topic.

Also relevant and compelling is the TED video entitled "Four Ways To Help The Bottom Billion" that suggests that the rich nations should help install good governance in poor countries to avoid the resource curse.

We Feed the World 2

I re-watched the "We Feed the World" video. This 96-minute documentary produced by Austrian Erwin Wagenhofer in 2005 shows the relations between small farmers and fishers and big agro-industry and the effects the global food trade has on individuals, at a personal level. Even the second viewing was interesting. It is the little details that will get stuck in your mind: Austrian farmers today have to work 6 times the size of land to produce the same living standard as their farming parents. ... Every day the largest city of Austria Vienna throws away the amount of bread from overproduction that the second largest city of Austria Granz consumes. ... In the largest vegetable and fruit market in Dakar, Africa, one can find subsidized Spanish vegetables. Subsidized vegetables from European agro-business sell for one third less than local products causing the irreversive death of African farms. ... European governments pay large amounts of subsidies to European farmers to produce wheat and corn. Europe then burns subsidized wheat and corn to fire electric power plant, i.e. wheat and corn are used to produce electricity. Europe then imports soy for feeding its animals, mostly from Brasil. The world's biggest soy exporter is Brasil. Despite being the world's largest soy exporter and one of the world's largest food producing nation people starve in Brasil. ... The global web of interconnections becomes clear. What we eat and how we produce food not only affects us but many people around the world.

World Economy and Global Trade

One line in the 2002 PBS documentary "Commanding Heights - The Battle for the World Economy - Part 3" subtitled "The New Rules of the Game" (19m49s) stuck out: Global Trade consists of a) $8 trillion in trade in goods and services and b) $288 trillion in trade in currencies. That told me something. Global trade and globalization is much more about moving big money around in split seconds and about multi-national financial speculation than it is about actual trading of goods and services. We should keep this in mind when we hear proposals from the WTO. And since currency trading is a zero-sum game, wherever there is a winner there is a loser. We can assume with near certainty that the big winners in the currency trade are the big financial institutions, while the losers are the millions of average income or poor people that hold a little bit of savings or just have enough cash for the day's food purchase. Global trade has been presented for decades in a false light and above all it is measured by false parameters. It is measured by trade volumes. Just like GDP is not an appropriate measure of the health, progress or wellbeing of a nation, trade volume is not an appropriate measure for economic, social or national health, progress or wellbeing. Countries that have seen explosions of trade volume have seen neither an explosion of national health services, nor of national or social progress. Trade in Mexico has grown 700% in 6 years after the enactment of the NAFTA and yet workers are as poor as before. Global trade should be measured by the benefit for the people: Do people have access to more goods at a reasonable price? How did prices of goods and services develop that were dominating the local eceonomy before the new trade agreement? How did the workers income develop? How did workers rights develop? How about environmental impact of the new trade and production? Is it increasing or decreasing national or global divides? These and similar factors combined would form a better multi-facetted indicator to tell us if increased trade was positive on the whole. Just because we grow soy now in Brasil and ship it to the US and Europe instead of growing it locally does not make the trade a positive thing. In contrary, we increase transport, CO2 emissions and place the burden of mono-culture dependency on Brasil while destroying the rainforest for ever greater soy fields. Is it a good thing that 90% of product X are now produced in country Y and then shipped around the world? Is this positive trade? You may replace placeholder X with product like palm oil, T-shirts, sneakers, television sets and place holder Y with countries like China, Indonesia, or Mexico. The goal of trade should be to enrich people financially, socially and culturally and not to add additional power to a few already powerful banks and corporations. We need high-quality trade, not high-volume trade.

On the official PBS site one can find everything, all videos and all transcripts. A subset is on YouTube.

IMF and Indonesia

There are many examples of the wrong-doings of epic scale of the IMF and the World Bank. Here is the example of the rape of the nation of Indonesia by the IMF. The 53-min video documentary was produced by John Pilger for British television in 2001 and entitled "The new Rulers of the World". After highlighting Indonesia as a case study of the IMF processes at a detailed level, the documentary concludes in the last minutes that the newest ruler of the world is the WTO (World Trade Organization) and that the WTO has been created by a few as an unelected embryonic world government above all nations and responsible only to the world's richest corporations. The last sentences is "Why not abolish the IMF, the World Bank, the WTO and replace them with genuine trade institudions that are democratically acountable? ... Why should we accept this? Why should our children have to face these visions and dangers? None of them is god-given, all of them can be changed."

Overdose

The documentary Overdose shows us the future. My favorite sentence is: "The US government has handed out stimulus packages to the tune of ten thousand billion dollars ($ 10,000,000,000,000). That's more than the total cost of the US government for World War I, World War II, the Koren War, the Vietnam War, the invasion of Iraq, the New Deal, the Marshal Plan, and the moon landing". (37:17 or if you are watching the equivalent 3-part series it is Part 3, 6:00-6:22). Wow. Now, that is a good visualization of the amount spent on the bail outs and stimulus packages. My second favorite sentence follows right afterwards: "G.W. Bush has recked up more national debt than all presidents combined before him, from George Washington to Bill Clinton. And Obama is close to create more national debt than all presidents before him, including G.W. Bush."

Watch the Swedish 46-min documentary from 2010 entitled "Overdose: The Next Financial Crisis".

Food Secrets

"Food - The Ultimate Secret Exposed" is a 15-minute video by Alex Jones. In his typical style this video is exaggerated and dramatized. Nonetheless, filtering out some of the theatrical allegations, there is an essence of truth in this video. It is a rapid run through the dangers in today's processed food: Aspartame, GM corn, GM soy, GM cotton seed oil, growth hormone meats and milk, fluoride in water and toothpaste, dimethylpolysiloxane (a type of silicon) in TV dinners, GM salmon, MSG, mercury tainted fertilizers, viral meat spraying, ... For those who do not have time to spend on viewing 1-hour documentaries with more facts on each item of this list, this might be an appropriate summary warning us of the many items to watch out for in the food shopping aisle. Think before you shop.