Tacking after Christmas

Haven't had a lot to say lately. A bit too much holiday cheer perhaps. And duck. Lots of duck.

How do you sail a boat against the wind? You tack.

How do you get gold and the US dollar to rise together? Same thing. There's a lot of zigging and zagging, but the overall trend goes in a direction that seems impossible.

In the figure above, I used the last London fix, which was actually on Tuesday. This is the methodology I have been using all along. If I had used Friday's price, the last point would have been farther to the right.

If I'm right that this trend is signalling deflation, then we just have to wait and see what the Fed does in the New Year. Until then, champagne all around!

Merry Christmas from China

Christmas in China.

Life-sized saxophone-playing Santa.

"Psst! Kid! Santa's got a lollipop for you! No? How about a candy cane? Santa's got a present! Why don't you sit in Santa's mouth and tell him what you want for Christmas?"

Ice falls near Huixian Xigou, Henan Province

It was nice to get off the great loess plain for awhile, just to get out of the smog.

Sunrise over Huang He (the Yellow River) on the shortest day of the year.

Huixian Xigou is the first small village I have seen in China. I don't think more than a few hundred people live here. Every other "small town" I have been to has a population in the millions.

The blue sky is something else I haven't seen here.

I was expecting to see eroded mounds of loess, but was pleasantly surprised to find that the place really is sort of a mountain--in the same way that Hamilton is on a "mountain".

The escarpment alternates between shales and carbonates (the cliffs) with a little karsting at the top to make things interesting.

Ripple marks were quite common on some of the harder surfaces, but there were no trace fossils that I could see.

Persimmons, still on the tree

Real mountain living

Ditto.

Groundwater seeping out of bedrock along cliff exposures freezes into icicles.

With some people for scale.

Anita's mad posing skills.

She doesn't see ice very often.

One day on the beach

Winter is coming, and although it is not cold here as it is back home, my thoughts turn back to warmer days in Ghana.

The only food locally available was from a small restaurant run by a young woman named Sala. She has only a single charcoal stove, and can’t cook food quickly enough.

I wolfed down a hard-boiled egg, some boiled cabbage, onion, and pumpkin for breakfast. There was more of the same for lunch. We were on a parallel line approaching Shama when heavy rain came. We finished the line and ran into Shama towing the gear. The dorsal fin came off during the morning, but the instrument only flipped over once, and that was at high speed during our run in. Apparently at high speed, the weight at the front acts as a brake, and may flip the fish onto its back. Once it starts skipping across the water surface it will continue to do so. 

The data were still good despite the damage to the fish. Kabi has located some wood cut to shape that will be delivered in the morning.

We returned to port and unloaded the boat. As I was paying the boys, an old man came up to me and said he had not eaten and needed some chop money. I demurred, paid the boys and the boat owner. Once again the old man came asking for chop money. I am hungry he said. I too am hungry, I told him. Kabi explained to him that we too were under people, and that our money was not really our own but had to spent only on appropriate things. Oh, he begged, he was hungry. Then I remembered I still had lunch. I climbed into the back of the van, opened my bowl of food, and offered him a hard-boiled egg. He asked what else I had. I showed him the contents. Boiled onion, pumpkin, okra, a garden egg, and some cabbage. This food is too rough for me! he said. He returned the egg. He wanted a cedi. This is the food I am eating! I said. I will not give you a cedi so you can eat better than me. I took back the egg, but now didn’t really want to eat it. A quick, enterprising child held out his hand and I gave it to him. He ran off delighted, pursued by his peers.

The old man who refused my food came by the next morning, saying he would go and come and he would bring me money, so I could eat better too.

I did, actually. Sala had given me the same collection of boiled vegetables (including a whole onion) and eggs. But this time, the boys cooked light soup on the boat. They had brought a charcoal furnace (a hibachi, really), chopped up a fish, and cooked the whole thing on the rolling sea in less than an hour. The soup was explosively hot, but made a nice addition to my egg and boiled vegetables I had, turning it into a stew.

Lost in translation again

The Chinese edition

Well, who doesn't?

When I first caught a glimpse of her shirt, I thought it said "maudits garcons".

These were in a complex which was called either "Provence" or "Province", depending on which signs you read.

The impossible trend, week 6

It continues--gold and the US dollar index rising.

Six weeks of impossibility and counting.

The last time something like this happened, it lasted six months, from November 2009 until late May of 2010.

Interestingly, the current trend begins right where the previous impossible trend left off. Perhaps this is the sign that we are returning to the type of market that favours both gold and the US dollar--probably to the detriment of everything else. It would suggest that the advance and subsequent collapse in the price of gold from mid-2010 to mid-2013 was some sort of blow-out from the trend, although I am a little reluctant to accept this because it is so much longer than the roughly linear trend.

Notice that the advance of USDX and gold together is only a rough trend. Few were the weeks in which both advanced. I expect this behaviour to continue.

Friday O/T with the Animals

A classic.

Hewers of gold; drawers of oil

Two charts here about Canada's mining industry.

First up gold mining, both by weight and dollar value, from 1998 to 2012. The chart has been touched up, but originally is found here (pdf).

Gold production has fallen off, but this has more than been made up for by rising prices. Canada has been pretty lucky, although I wonder how 2013 would look on this chart.

The source material includes graphs of mining production and value for several other metals, and in most cases actual production has fallen while the value has increased. God bless inflation!

Secondly, Canada's balance of trade in the mining sector up to 2012.

And we see that while Canada is doing well in mineral extraction and primary manufacturing (ingots and rolled products), we need to import ever greater values of fabricated products. This is somewhat alarming, as the last country that got wealthy doing this was . . . well, I can't think of one just now.

One thing going for us is that with the recent higher prices for metals of the past several years, the overall balance of trade has increased. But seeing as the increase in value is not due to increased production, but increased price, and as production in many commodities has fallen over the last fifteen years, our only real hope may be deindustrialization.

It is tempting to blame all this on the Conservatives, but the trend was set in motion long before the beginning of the above data set.

National suicide and the nation state

The topic of national suicide seems an appropriate topic for the anniversary of the Japanese attack on Pearl Harbour. The Japanese people bore very little animosity to America. No doubt many of them remembered the aid that came to Japan after the big earthquake in 1923. Sadly, like in all other countries, the Japanese people were not in control of their country.

Like all wars, this war was sold to the people as a matter of national survival. But it was to be a survival in which Japanese people were destroyed in vast numbers to "save the nation." By the end of the war, soldiers were being outright sacrificed in order to achieve limited tactical successes.

The movie For Those We Love*, the pilots are preparing to leave on their final mission. The father, brother, and sister of one of the pilots have arrived to see him off. As he is about to enter his plane, his father pleads for him to come back to talk to him one last time (it's at about 2:35 of the following video). Unfortunately, his last words for his son are a lame cliche ("Do your best. We are all counting on you." And so on). My thought was that if that were my son about to fly off to die, I would have told him, "See that tent over there? That's where your commanding officers will all go as you leave. So after you take off, come back and strafe the hell out of it."



Now I read in this article that at least one pilot did attack his commanding officers. The article argued that the Kamikaze phenomenon in the latter part of the Pacific War was a particularly noxious brew of statism and Zen Buddhism.

I don't believe the Zen Buddhism part to have been necessary. The kamikaze pilots were not driven to suicide out of a philosophical concept of nothingness. They were ordered to, or perhaps pressured ("Come on, you don't want Japan to lose the war because of you, do you?"). The desire for death came down from the top, mostly from people who did not have the grace to kill themselves afterward.

The noxious mix came from a government that equated "the country" with themselves rather than with the people. As a consequence, the government was willing to sacrifice as many of its own people as was necessary to ensure its own survival. The lesson here applies not only to the hapless wartime Japanese, but to everyone in the world from the United States and Japan, to the Ukraine, and even non-state actors such as ISIL. The most obvious antecedents are in the suicide bombers that have struck targets around the world.

Today most of the developed countries of the world are pursuing economic policies "to save the nation". Unfortunately, they are predicated on arguments that the elderly will bankrupt the state: thus the state must strike back through low interest rates and understating inflation.

In fact, President Barack Obama’s budget wouldn’t take a dime from anyone’s current Social Security check. It would merely reduce the growth of future benefits by changing the way the government calculates inflation.

What the president has done is to endorse the notion that our current Consumer Price Index overstates inflation, because it doesn’t account for people’s ability to switch to lower-cost goods. If the price of beef goes up, people eat more chicken.

I like that choice of words: "merely reduce the growth of future benefits". Those future benefits were to compensate for rising prices which are themselves a function of the activities of the state. The remedy, that the elderly can eat chicken when the price of beef goes up; then cat food when the price of chicken rises, is a recipe for poverty. Unfortunately, starving the elderly is necessary to save the "nation".

I have argued that the low-interest-rate policy has harmed employment by reducing the costs of losses in financial speculation relative to productive investment. Thus, starving white and blue-collar workers of all ages is also necessary to save the "nation".

The massive size of the debts accumulated across the developed world will be borne by our children, encouraging a lower standard of living for them. Thus, starving children is also necessary to "save the nation".

In WW2, Japan sent its young men off to die trying to sink American ships. Now governments all around the world are casting off their citizens, stealing their lives a bit at a time to push the day of their own reckoning a little further into the distance. The only difference is they are not yet ordering us to die.


* I have to advise you that this is not a very good film.

Another thing to try before you die

Accupuncture . . . with big blunt copper needles.

It only takes a few tries for them to penetrate. Then he twists them around. It's so good.

And the needles really are copper. Apparently, this is important.

Had that today. I went in because of my back. Now everything hurts so much I don't notice my back any more. Eventually everything that is cramped up should relax and stop hurting, according to theory.

Anyway, I can't hold my hands up to type anymore.