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Category: Economics

  • Possible Bad News

    I fear that if the ceasefire between Israel and Iran fails, USA will be entering into two-front proxy war.

    Our current proxy war in Ukraine is not going well, and we are pulling our weapons help away (every other day, it seems, on the other days we are giving them more). European part of NATO is upset but considering the state of their economies and especially their armies (with a couple of exceptions), I doubt their help will be decisive in any manner. If it would be, this war would have been over years ago.

    I thought the news about us stopping to give missiles to Ukraine was about our economy and military-industrial complex, which in these days is more military than industrial (our industries having been long since outsourced), no longer sufficing for policing the world, but the latest rumor / development, namely China (PRC) strengthening its military support to Iran to counter our support to Israel, if true, means potential opening of a new proxy war. Against the biggest manufacturing powerhouse in the world that desperately needs a boost for its stalled economy. And needs the Iranian oil, the access to which has been complicated by the conflicts involving US backed Israel (although China has benefited hugely from US sanctions which have forced Iran to sell their oil on discount.)

    I have for some time thought about China and Iranian oil and China-Iran railway, and how Japanese got motivated to attack to Pearl Harbor by US blockade of Japanese oil imports. Just having an ominous feeling about this.

  • Rising Rice Crisis

    Japan has a rice shortage. Of staple rice.

    While there has been sporadic rice shortages around the world recent years, Japan is a first world country and a traditional rice producer. The problem is word traditional. According to First Post, the average age of Japanese rice farmer is 71 years, and government agricultural policies in general and rice policies in particular have hit the farmers whose numbers, citing Bloomberg, have shrunk by 25% between 2015 and 2020s.

    Probably not Japanese boiled rice

    The Japanese government rice policies are strictly nationalistic, ostensibly designed to protect Japanese rice farmers and self-sufficiency by preventing rice buying from abroad. Except the consumer prices also had to be regulated, squeezing rice farmer incomes and acreage despite Japanese soft monopoly on domestic rice.

    The some explanations to Japanese rice shortages is that Japanese 2023 rice harvest was bad (already reporting rice rationing in some shops on 2024), there was an earthquake and people are panic buying (also as a hedge for rice inflation, which probably increases the rice shortfall causing more rice inflation), people are eating more rice because the war in Ukraine has increased wheat prices, and that there are hordes of tourists eating rice. And the Japanese government started selling the stored rice from reserves last year. A bit like US sells oil every now and then from strategic reserves to smooth consumer sentiment. Except that Rice News Today blames the shortage on government policy to reduce rice production, which has thinned the buffer between production and consumption to such extent that even slightest consumption increase would cause shortages.

     Now Japan is running low on rice and some shops have implemented rationing. People are upset about the steep rise in rice prices. There has been some talk about buying rice from abroad, but this is against resistance from farming lobby and conservatives, though apparently there is now a trade deal to sell Calrose rice to Japan.

    The Japanese are having an election soon, July 20th. The price of rice and the rice shortages (estimated 1.8 months of annual supermarket sales worth of staple rice – either the consumers will consume something else or Japan will soon import lots of rice) may annoy the electorate enough to lead to political upset. According to Zerohedge, SocGen (a French bank) has predicted that there is about 50% chance of election results leading to governmental crisis in Japan, which may lead to problems in yen bond market. More importantly, the price of rice is part of Japan’s inflation metrics, and if rice prices explode, the rising inflation may trigger BOJ rate hikes.

    The global bond markets are highly interconnected and the financial omnibubble is floating around in search of a pin prick. Thus, the rising rice crisis just could be the trigger of global financial collapse. Though I personally doubt it. The markets are so rigged that full collapse by contagion is unlikely. But what I have seen over the years, is that small retail investors rarely fare well in turbulence. 

  • Chronocide

    is a very important topic.

    Atomized people without knowledge of the past are easier to govern badly. If there are no reference points how things were better (in addition to worse), people will not demand it.

    Atomized people lack social cohesion required for mass movements or revolutions. Every man forges his own fortune. Every woman is equal to man. The weak will get trampled in an increasingly predatory environment that used to be a society. As even family units are eliminated in gender wars and intergenerational conflict, it is no wonder that birthrates fall when atomized people concentrate on their own day to day survival.

    I suspect that the loss of culture and traditions are a result of loss of intergenerational connection. When I was a child, we celebrated Christmas. The tree, the feast, the carols, the gifts (brought by some version of Santa or an elf, this was not all Westernized Coca Cola festival for us), the reading of Bible. Christmas was fun for children. Even in Soviet Union, where Christianity was suppressed, the powers that be had to bring back Father Winter and an associated winter festival, set to be the New Year’s Eve.

    The world’s biggest shopping day is now the newly invented Singles’ Day from China, which began as a student response against Valentine’s Day but quickly ballooned into a massive hit, not only domestically but expanding globally, even having arrived into Finland. If you are lonely, why not have a day and buy something for yourself since the couples are having a day too? The popularity of the Singles’ Day is probably a troubling portent for future demographics and survival of the traditions, and by extension, history.

    By the way, despite the lack of material manifestations of the culture and the breaking of social structures, there still remains an option for inner life – learn things and live your ideals. Become the culture you want to be.

    P.S. Soon it will be Midsummer Festival / St. John’s Day / Summer Solstice time. I will not have a bonfire, nor will I go to a lakeside cabin to drown in a drunken boat accident. As cultural traditions go, I am neutral about bonfires, but against drunken boat accidents. Not all traditions need to be maintained.

  • Signs of economic times


    Apartment close to public transportation

    A former deputy director of Caltrain had had a secret apartment built inside Burlingame train station, discovered by Caltrain 2022. Based on photos, it looks comfy, but about 40000 dollars of public funds were used and the historic building is not his property. Another apartment was found 2019 in Millbrae train station (8000 dollars were used on that), with another defendant was mentioned in connection to that case. Imagine, apartments for under 50k in San Francisco Bay Area! And close to commute!

    While housing prices are crashing and you can find a condominium for under 300k in Bay Area if you are not picky about the commute, and right now Zillow advertises plenty of up to $1300 rentals in Bay Area. How many of these are actual apartments instead of shared housing is unclear, but right now it seems that the main constraint to housing is not the availability of units but of cash to rent or buy.

    Pretend-to-Work companies

    I thought WeWork which officially rented office space with amenities to startups and individual who wanted a workspace not at home was close to this, at least for some people who lacked self-discipline to work without bosses, but in China (the People’s Republic), there are now actual pretend-to-work companies, where people can for a small pay pretend to be office workers the whole day.

    China is presumed to have high unemployment rate (official statistics are unreliable or missing) and there are social pressures for people to work. By paying for pretend-to-work day, people can LARP working in corporation, pretend to others that they are working, or just have an airconditioned space with computer terminal in which to spend time, like an internet cafe.

  • Civil War by Proxy?

    California and Federal government are increasingly hostile in open. California has years of experience in ignoring Federal laws, some notable example issues being cannabis, immigration, and gender identity.

    On the other hand, California has used its soft power as a major economy to enforce environmental and consumer standards on the rest of the states and even abroad.

    During Biden(?) administration, Californian values seemed to become the US standard regardless of other states’ opinions, and California became more assertive also in foreign and trade policy, most notable event being the summit with president Xi and Biden in San Francisco (preceded by a climate lobbying visit of governor Newsom to Beijing.) Various California politicians were also courting China, although also opposite happened. Does anyone still remember 2022 when the then Speaker of the House, California representative Pelosi flew to Taiwan and caused jitters over potential armed conflict between USA and PRC? (Whether this was part of a policy by a bigger faction within the administration and if so, which one of them is murky to me.)

    Now, the issues between quite untethered California and the Federal government have finally come to boil. The trigger to me seems to be the transgender athletes competing against girls, where the Federal government sees California Title IX application to this issue as violation and the regular people just unfair. California continued this practice, despite warnings from Washington DC, and the current administration threatened to withhold Federal funds for California sports. Thereafter, Newsom threatened to withhold the Federal share of California state taxes, a move somewhat reminiscent to the Nullification Crisis prior to the Civil War in 1800s.

    Meanwhile, a group of Antifa or similar group(s) coordinated an attack on ICE that had done a raid in Los Angeles.

    This attack is curious because of its organization and its timing coinciding with the spat over ideologies and money. Reminiscent of the coordinated wave of violent riots in summer 2020, there were clashes between pro-immigration protesters in New York on the opposite side of the continent.

    More importantly, both the Los Angeles mayor Karen Bass and governor Newsom publicly refused to help to quell the rioters, even opposing the Federal efforts. The rioters were attacking Federal law enforcement with stones and were painting graffiti putting things in fire. In fact, a roster of California political people have come in defense of David Huerta who got arrested for participating in the riot, but their support to anti-Federal action.

    President Trump has authorized the use of 2000 National Guard (update: now 4000 plus 700 marines), and the Department of Homeland Security is bringing in reinforcements.

    I am writing this in Helsinki-Vantaa Airport, waiting for a flight that would take me back to California Bay Area via Frankfurt am Main and Los Angeles Airports. By the time I have landed, well before the time I can post this (I need to add links to sources), we will see if the California or Federal authorities have caved in. If the California stops protecting the violent mobs, removes transgender athletes from girls competitions and possibly even ponies up some tax tithes to Federal government, the incipient civil war will be averted. If the Federal government fails to enforce its rules also in California, I fear that this was the opening shot of the active phase of the disintegration of the United States. Worst case scenario, neither gives in, we may have active civil insurgency in multiple blue states by the end of the summer. The most likely outcome will be a frozen conflict, that is: both sides will pretend nothing significant happened but neither will acknowledge that the other side might have won.

    I also predict there will be lots of pundits dissecting irrelevant minutiae from the utterances of either side, and thanks to the strong left bias of the main stream media, the reporting will mostly support California and its allies, meaning tailwinds for civil war or mostly peaceful disintegration of USA and headwinds for peace and prosperity. The biggest losers will be the regular people trapped in the middle, looting and violence disrupting supply chains, especially for groceries and fuel, and then collapsing the teetering economy in general.

    Update: Much has happened since Sunday. California did not capitulate and the National Guard activated in Los Angeles is up to 4000 and 700 marines are in readiness. When I arrived on Sunday evening to Bay Area, I took the BART from airport to hometown. The train did not take or drop passengers at Embarcadero station due to political activism nearby, but let out a handful of burly police officers and while the train waited a couple of minutes next to the platform, I could observe the officers running and so did a couple of the people already there. There was still a crowd waiting for the next train or something, though the trains had started skipping that station for the duration. Sorry, no video footage of that.

    More ominously, a Walmart heiress is funding (in a small part) a nationwide call for unrest June 14th, another weak indicator supporting my hypothesis that the riots that started last weekend are part of elites’ civil war, raging over  who gets to loot the treasury.

    In social media there are reports of incidents in Denver, Charlotte (NC), Boston (MA), Chicago, New York City and Atlanta, things are escalating fast. This indicates that this is not a question of secession (California from USA) but of civil war by proxy between the progressive left and the conservatives over the control of Federal government. The presidency and the Congress are currently held by Republicans, but vast swathes of the administrative state are governed by the Deep State currently (mostly) promoting leftist ideologies (reasons for that are too long to expostulate in a single post and in any case speculative to the tinfoil hattery territory.) Individual states and their administrative apparati are a hodgepodge of ideologies, but the Left Coast in general and California in particular is the current vanguard and bastion of progressive establishment, so troubles beginning here makes sense.

    Meanwhile, governor Newsom and Federal officials are still discussing about who pays what.

    On a side note, a major food distributor supplying thousands of supermarkets got hacked last week and food distribution is off kilter. When I yesterday visited a grocery, they had a sign on meat counter apologizing for ‘warehouse issues’. I did not ask the cause then because I had not then seen this piece of samizdata news yet. I wonder if the food shortages and riots at the same time are a coincidence?

    Finally, whether true or not, the possibility of a fleet of robotaxis fleeing LA riots in order not to get burned by Mexican flag waiving ‘mostly peaceful’ protesters shows what kind of timeline we are living in. In any case, Waymo services have been suspended in downtown LA are for the time being.

    Looks like I need to pick some canned meat while it is still available.

  • Klaus Schwab Has Resigned

    Last weekend, it was announced that Klaus Schwab has resigned from his position as a chairman of WEF. He had been one for 55 years, and was one of the faces of the technocratic globalism that the transnational institutions and Western governments have been pushing on the populaces. You know, things like 15 minute cities, CO2 taxes, energiewende, digital IDs, central bank programmable digital currency, the Great Reset and modified RNA vaccines.

    Now it is said that he has resigned as a consequence of a whistle-blower that had implicated Klaus Schwab and his wife in fiscal (and possibly other types) of improprieties, with the WEF board having a sudden emergency meeting. Somehow I doubt this reason – whistle-blowers do not just conveniently appear after 55 years of people not noticing chairman’s practices. I suspect this has more to do with the disastrous effects of the current forced changes on economy and the cultural blowback against the zealous insistence on the Veblen ideologies of the elites enforced with a surveillance state. Since I have not detected WEF to show interest in actual well-being of the masses, rather than the insistence that masses must adapt to their betters’ vision of the Greater Good, I think Klaus Schwab’s ouster has more to do with the smarter members realizing that sawing the branch they are sitting on, i.e., destroying the countries they live in, is not a viable long-term strategy. Even bugout countries, like New Zealand, would sooner or later be destroyed by technocratic practices.

    In a WEF’s Davos meeting about a year ago, Blackrock’s Larry Fink who also sits in WEF’s Board of Trustees, surprised by praising xenophobic countries which had instead of immigration invested in AI and robotics. At that point I took it as a bad omen – what are they planning to do with the people replaced by AI and robotics? In retrospect, I think that was an outward sign that there will be changes within WEF.

    In summary, I think Klaus Schwab was forced out after his vision of New World Order had proven to be a failure.

  • How Many People Are There in China?

    Sometimes, the conspiracies of the West like chemtrails or other forms of weather modification and QAnon become boring and it is fun to look at the conspiracies in the East.

    One of the more intriguing conspiracy theories (to me) is the claim that China has way fewer people than the official 1.4 billion.

    I first encountered this claim some years ago, but did not pay much attention to it. The message sounded too crazy and was promoted by Falun Gong, which has a real reason for a grudge against the CCP government. I am also pretty convinced that part of the anti-China messaging is or was funded by US government as a psy-op against a competing power.

    However, while the figures as low as 300 to 400 million Chinese left (in the Peoples Republic of) seem extreme, I can believe fewer than 1.4 billion, probably no more than 1.2 billion, possibly below 1 billion.

    My reasoning being:

    1) There are government tendencies for inflating population numbers. In places like Nigeria, where the funds from central government are allocated partially based on provincial populations, and corruption is common, local leaders have a pressure to report their populations generously. I suspect Nigeria does not actually have over 200 million people. So many of their princes have died, that the mortality among the peasants must be horrendous. Ahem.

    Similarly, in United States, we do not know the population even at the accuracy of million, which I suspect in part resulting from allocating federal resources like Congress seats based on state population.

    Also, having a large (potential) labor force is believed to improve the economy numbers (although not universally), which is why many Western countries have been importing people en masse.

    2) Related to governmental pressures is the individual financial fraud. Duplicate (or multiplicate) social security accounts have in abounded, at least in earlier times, whereas 100 billion in social security payments have apparently been paid to people with temporary or no social security numbers, maybe half of it obvious fraud. Since China has in recent years implemented a Draconian social credit system, I don’t know how much an individual can bilk the government there by double IDs though private sector frauds are too prevalent to list here.

    3) Mass immigration has generated a global population of hundreds of millions.Many of these individuals are undocumented, which I presume are still in citizenship lists of their home countries while being part of the head count in their current locations. I remember an apocryphal story in Europe about people getting paid social security by two countries, presumably being counted as part of the population in both. I do not know if this inaccuracy includes dual citizens or just undocumented migrants. In case of China, I think their hukou system is pretty water tight within China’s borders, but I also think that millions, maybe tens of millions of Chinese have slipped over the borders, all over the world. These Chinese exist, but reduce the population at home.

    4) Chinese population policies have been a demographic disaster. One Child Policy meant that many of the Gen-X were not allowed to be born, reducing the population growth rate. Now there are too few Millenials and even fewer Gen Z and the young people are too stressed to reproduce. Yet, China’s population was supposed to have grown during the 1970s – 2010s, though at least the recent year’s have officially had negative population growth.

    Therefore, even if we don’t go with the active depopulation hypotheses,

    I don’t think the current global population exceeds 7.5 billion, and would not be hugely surprised if it were as low as 7 billion people.

  • Slight Delay in My Plans

    I had planned on designing physical jigsaw puzzles for sale. I had been selecting pictures and making test designs and was preparing to order some samples, when the new tariffs came in power. The print-on-demand company I had been planning to use is based in Hong Kong. While we need to in-shore industries, finding a place that prints double-sided postcard jigsaw puzzles and is located in US will take a bit time. Looks like I’ll need to look a bit more and think about my options, maybe rethink my strategy.

    Meanwhile, I have been looking for interesting things to post and writing fiction. The current job market is a horror show, but unfortunately that is not fiction.

  • Death Spiral

    How do you kill a city?

    So many people complain about the homeless problem (which is very visible in many California cities), but these people and their plight are a symptom of a deeper malaise.

    It is claimed that people are homeless because they cannot afford an apartment. Actually, many of the homeless are homeless, because they get kicked out of any normal apartment due to mental illness, drug habit or just for being nasty neighbors and tenants. Poverty is a common companion of mental illnesses, drug habit and antisocial behavior. Supportive housing rarely works, the restrictions to their lifestyle are considered intolerable and most of the hardcore homeless prefer their freedoms. Which in California are accommodated. Not saying that freedoms are intrinsically wrong, I just would weigh them against infringement of other people’s rights for safe enjoyment of parks and other public places.

    In any case, California has some freedoms not available in other states, such as freedom to use cannabis products and the de facto freedom to shoplift wherever and, in many cities, to camp on sidewalks. This has led to an exploitable situation as the fuming taxpayers are told that the reason the sidewalks are choked by drugged out homeless that support their habit by shoplifting because there is not enough affordable housing. Let’s collect a new tax or municipal bond (funded by taxes) to build affordable housing to homeless.

    Homeless advocacy organizations mobilize for this initiative, after all someone must administer the funds to the indigents. Signature collectors are hired to ask good citizens (“are you a registered voter here?” to sign a petition for the tax / bond initiative. Politicians speak warmly for (or rarely against) the initiative. There may be an advertisement campaign, at which point a thinking voter should get alarmed – why would anyone pay for an advertisement campaign when hundreds of millions or even billions of dollars are proposed to be raised for ‘common good’?

    Nevertheless, many voters will back an initiative that sounds good without thinking about the long term effects. Once the initiative passes, property or sales taxes are raised, and now the small property owners and small retail businesses are in trouble. The property owners increase the rents making both apartments and small businesses renting their spaces less affordable, Poorer tenants fall behind and get evicted or move somewhere cheaper. The business owners may hang on a bit longer, raising their prices until the customers disappear, and they, too disappear. With loss of tenants, the properties will undergo distressed sales. Which was the purpose of the original initiative.

    A property developer (with sufficient contacts to the municipal bureaucracy and politics to smooth the permitting) will buy the distressed property cheaply and develop it into ‘affordable’ housing. Which somehow does not reduce the swarms of homeless camping on the sidewalks, possibly because they are still free to camp there and the homeless advocacy organizations are flush with funds to use on homeless services.

    Meanwhile, the older residents are losing their homes and the main streets are becoming ghost towns of shuttered and graffitied empty shopfronts. The city is hemorrhaging jobs and residents, with homeless numbers increasing, despite well-funded homelessness services and more affordable housing being built.

    The solution is obvious – let’s raise the taxes to deal with the homelessness and lack of affordable housing! Or maybe, stop using the homeless to exploit the tax payers to enrich the local moneyed interests.

  • The Problem with Burping Reindeer

    “It became necessary to destroy the village in order to save it”, (said during Vietnam War, where the United States went to help French with their Indochina, ending with Vietnamese eventually kicking out France, USA and China.)

    To me, the modern environmentalism increasingly resembles this insane sentiment.

    Last year, there was an uproar, when Reinhardswald in Germany was slated to make room for wind turbines ‘necessary’ for Energiewende.

    How much of this was hype and how much was counterhype, I don’t know (though I suspect my search engines show me very biased results.) On my recent trip to Finland I saw the changes in the countryside, big wind turbines can cause. It takes lots of land and removal of trees or elimination of agricultural fields to build a wind park.

    In reality, it may be environmentally less harmful to build nuclear reactors than wind turbines (depending on how you calculate EROI – my Google searches were inconclusive because the studies were either old or seemed to be shilling for one form of energy or another), and they kill fewer people (not to mention them having smaller radiation plume) than coal plants.) While there remains need for petroleum, its increasingly difficult extraction reduces its EROI, which means that in future it will probably remain as a raw material for industrial processes, maybe special fuel for internal combustion engines.

    Nevertheless, EU (including Germany) is dedicated to net zero project, which increasingly begins to seem like some weird suicide / flagellant cult with reduction in living standards (rationing energy by rising costs, attacking food production, limiting transportation and movement, and increasing housing density) and reduction in human-accessible territory.

    All these projects, while openly posted on-line, are presented so that opposing voices are portrayed as conspiracy theorists and antienvironmentalists. But is it a conspiracy theory if they themselves tell everyone their plans, or worse, their actions?

    At least the most fanatical theses from the now destroyed Georgia Guidestones are not openly touted. There are people, other than just me, who would consider the reduction of world human population to 500 million from (official) 8 billion or by over 93% rather genocidal.

    But the Green New Leap is not just for UK, Germany, Netherlands or Ireland. Finland, too, is planning ambitious net zero targets, and I mean really ambitious, as in lauded by WEF.

     Most of Finland is above 60° latitude, about the same level as Alaska or south end of Greenland, mostly more north than Yakutsk in Siberia. Energy is of utmost importance there. Roughly speaking, a person can survive a few minutes without air, a few hours without heating, a few days without water and a few weeks without food.

    Finns have survived without fossil fuels for centuries, but that was by burning wood, which is also not OK with the eurocrats – small particle pollution will kill! Presumably freezing to death is more efficient and environmental. At least the official media reassures the Finns that saunas are safe from this regulation. For now. Anyways, the war against Russia and certain realities of energy production have resulted in complications in banning wood in energy production.

    Meanwhile in China, 2024 began to build 94.5 GW worth of coal power plants and resumed 3.3 GW of suspended projects according to two think tanks. Only 2.5 GW of old capacity was closed 2024. (Side note: with China’s economy tanking and exports faltering, what do they need this new energy capacity for?)

    But what about the reindeer burps?

    Indeed, according to our reliable news media, a study was published that Lapland will not be able to meet its greenhouse targets by 2035 because of the large emissions from its agriculture, namely the reindeer. Which as ruminants are burping too much methane, which is a greenhouse gas. Unfortunately, I could not find a link to the original study to check the claims, and to see if the researchers were in earnest or if this was some sort of reductio ad absurdum-document to demonstrate the futility of the Net Zero targets.

    However, assuming the reporting is true, reindeer are part of the Arctic ecosystem, and even if the semidomesticated populations in Lapland were counted as human livestock, those globalist net zero plans that would involve reducing the number of large ruminants, such as grazing cows and sheep, come dangerously close to messing the ecosystems by removing large herbivore guild from the food network. While I can see the point in reducing the use of feedlots and grain / soybean based fodder in ranching, eliminating free-range foraging herbivores is IMHO insane.

    Ironically, the climate war against cattle (products) is not fully compatible with the idea of rewilding the land, which presumably involves switching domesticated large herbivores with wild large herbivores to the net zero effect on burps per acre in case of free grazing animals. Large scale rewilding is currently hypothetical rather than practical, as the numbers of large wild herbivores are insufficient for the switch. Humans and their cattle, pets and pests account for about 96% of terrestrial mammal biomass. The remaining about 4% is everything else from Etruscan shrew to elephant. Cows alone are ~40% of Earth’s land mammal biomass, meaning there are no replacement herbivores. And without ungulates, the grassland ecosystems will collapse.

    But back to the reindeer burps.

    When it comes to climate, worrying about the relative inputs of reindeer burps vs the rest of the nature makes even less sense. In Hunga Tonga-Hunga Ha’apai eruption January 2022 estimated 146 million cubic meters of Pacific salt water causing a couple of years of cooling with effects possibly lasting for the rest of the decade. The atmospheric CO2 concentration near Australia and New Zealand increased from the expected 412 ppm to 414 ppm, about the size of interannual fluctuation on those parts.

    When we consider this and other volcanoes, and the coal plants of China and the rest of the world (not to mention everything else that produces greenhouse gases, such as termites), how much effect would it have on the atmospheric chemistry and global climate change if all the reindeer in Lapland stopped burping?