Ecclestone fails again

For a man who has made a lot of money, F1 impressario Bernie Ecclestone doesn't come across as someone who is terribly bright or aware of the world beyond his rich friends and the glamour of F1.

He had this to say as the FIA gathers to decide whether its appropriate to run a major sporting event in a nation which has stands accused of a litany of past and ongoing human rights abuses.


"Nothing to do with money at all. Nothing, in any shape or form," the 80-year-old said as he arrived in Barcelona. "This has to do with whether people … I don't know, to be honest, with this occasion whether people are concerned with their safety if they go or whether people are concerned with what has happened in the past. What has happened in that whole area, in all those countries, is not good in any way, so we will have to wait and see."


Never occurs to Bernie that there might be an over-riding issue about human rights.


And quite what he means by "all those countries"  and "not good in any way" we can only guess. Does he mean the entire Arab Spring ? Does he mean Saudi troops pouring over the Bahrain border to shoot and beat peaceful protestors? Does he mean doctors who treated the wounded being arrested and beaten up?


Formula 1 should not be in Bahrain at this time. An oppresive regieme who are commiting brutal and criminal violations of human rights should not be allowed the publicity coup they so desire of a grand prix.

A Bahrain grand prix at this time will give implicit support to the governement in its attempts to imply that shooting unarmed protestors, beating up medical staff, ejecting journalists and trying to cover that up is all somehow OK.

It isn't - Formula 1 should be ashamed of itself for even considering going to Bahrain this year. 

Recovery slowest since 1830

The UK economy is set to experience the slowest pick-up in consumer spending of any post-recession period since 1830, according to a Financial Times analysis of official forecasts.

Given that consumer spending powers the bulk of British economic growth, the impact will be massive.


The FT looked into forecasts by the Office for Budget Responsibility, which projects spending in 2015 to be just 5.4% above the 2008 peak.

But a survey of 18 major recessions since 1830 showed that consumer spending on average recovered to 12% above previous peak within seven years.

At the equivalent stage after recessions in the early 1980s and 1990s, spending was 20 per cent and 15 per cent higher respectively. This will make the current economic recovery the slowest of any comparable post-recession period.

These are government projections.

Anyone with a shred of understanding of fractional reserve banking and money supply knows why.

Our esteemed chancellor is an ideologue who is doomed to follow the IMF mantras of privatisation and austerity budgets. Austerity will simply lower confidence and shrink the money supply.

And guess what - only 1 in 10 people have any confidence in the economy and the economy is at best stagnant.

The great fear is that a vicious spiral will engulf the UK economy. Rising oil prices will cause inflation - that will trigger a rise in interest rates and a house price collapse. That will surely lead to another UK banking crisis as household after household defaults on their mortgages.

One has to question whether "Bail Out II - who can we blame this time" will be swallowed quite as dumbly by the public as the last one.

Is the stage slowly being set for a scenario when monetary reform emerges into the mainstream?

New financial crisis 'inevitable'

Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved.

“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,”


“Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”

The total value of derivatives in the world exceeds total global gross domestic product by a factor of 10, said Mobius, who oversees more than $50 billion. With that volume of bets in different directions, volatility and equity market crises will occur, he said.

Tell the public about money creation

For many years, if anyone had asked me the question 'who creates money in the UK?' - I would have thought of who printed the notes in my wallet and the coins in my pocket - I would probably been a bit puzzled by the question and said something like 'erm - the royal mint?' or perhaps 'the Bank of England'

It was only when I started learning about Peak Oil a few years back that I was introduced to the realities of how money is actually created in the UK and around the world as part of a global banking system.

I was astonished to learn that over 97% of all the money in circulation in the UK was created as debt when banks made loans - simply writing the new balance into a customers account.

I was further astonished to learn that using this method banks loaned many times the level of their initial deposits as loans - indeed prior to the banking crash of 2008 the average UK bank had just £12.50 on deposit for every £1,000 it had loaned.

I will in future posts talk in some detail about the inherent instabilities, hidden subsidies and inequities of a system that loans money into existence - but for now I have a few simpler questions.

Given that the vast majority of people in the UK have no idea that the nation's money supply has been effectively privatised and that they are subsidising this system to the tune of some £30 billion a year...

(a) Isn't it time they were told?

(b) Isn't it time they were ASKED if they want the nations money supply in private hands?

(c) Isn't it time that people were offered an alternative?

the answer of course is YES, YES, and YES.

Is our money supply created as debt?

Here are some quotes gleaned from the wonderful folks at Positive Money.

 This is Martin Wolf, chief economics editor for the Financial Times:

"The essence of the contemporary monetary system is creation of money, out of nothing, by private banks’ often foolish lending..." Financial Times, 9th November 2010



Here's further confirmation from a Bank of England paper. Note that the term 'bank deposits' refers to the numbers in your bank account.

“When banks make loans, they create additional [bank] deposits for those that have borrowed the money”¹

So when you take out a loan from the bank, the 'money' is just typed into your account and created effectively out of nothing. Here's further proof from Paul Tucker, Deputy Governor of the Bank of England and Member of the Monetary Policy Committee:

"...banks [make loans]² by simply increasing the borrowing customer's current account...That is, banks [make loans] by creating money."³

Or this, also from the Bank of England:
"The money-creating sector in the United Kingdom consists of resident banks (including the Bank of England) and building societies"⁴

That's a very mundane way of saying that the creation of money in the UK has been privatised. In other words, banks are able to create all the money in the economy and lend it to us.

This has a wide range of rarely-discussed consequences and effects upon the economy and society, and is surely something that we should be questioning in the wake of a huge financial crisis.

There's more:

"... changes in the money stock [i.e. the total amount of money in the economy] primarily reflect developments in bank lending as new deposits are created."⁵

And if you need further proof, here's a letter written by the Bank to a correspondent of Positive Money (see the original here).

they asked them:

 "When a commercial bank makes a loan to a borrower, does the commercial bank in effect create new money? In other words, when a bank makes a loan to a borrower, is that 'money' just created out of thin air?"

Bank of England response: "When banks make loans, commercial banks do indeed create much of the money in the economy."⁶

Bahrain F1 GP should not happen in 2011

Bernie Ecclestone should not even consider holding the F1 GP at Bahrain this year.

Human Rights Watch have posted a litany of ongoing and vile abuses committed by the minority Sunni Governement against its Shia majority.

Bahrain's King Hamad bin Isa Al Khalifa recently decreed that martial law, imposed on March 15, would be lifted with cynical calculation on June 1st, days before the FIA (F1 Governing body) meeting to decide the grand prix's fate.

In an open letter to the FIA - HRW said

"Sadly, serious violations like arbitrary arrest, incommunicado detention, and alleged torture by Bahraini authorities pre-date the imposition of martial law in mid-March,"

 "There is little reason to think that ending martial law on June 1 will make much difference in Bahrain's menacing human rights climate."

F1 has always been a glamour sport and a draw for wealthy people who enjoy the limelight. Its head honcho Bernie Ecclestone could not run F1 without schmoozing with very rich people like himself - I expect he asks very few questions about where they get their money from and how they keep it - but there are limits to the tolerance one can have for the garish charms of F1.

While human rights are being abused in the most bullying and criminal manner in Bahrain the idea of pandering to the needs of an oppressing government by giving them the GP bauble they prize so highly is unconscionable  - it will reinforce the fiction of a peaceful status quo that the governement is desperate to peddle to the world - and would be a venal insult to the victims of human rights abuses.

There should no F1 GP in Bahrain this year - or ever until human rights violations in that nation end.

F1 is dependent on sponsorship and so vulnerable to public opinion.


admin@fiacommunications.com


e-mail them today and let them know that the world is watching their meeting on June 1st.

What does 'progressive' mean?

Beyond its dictionary defintion - I have no clear idea of what the word 'progressive' actually MEANS in a political sense.

It is the top buzzword at The Guardian being used by all manner of columnsists and journos - but I am baffled by it.

If you have chanced by my little blog - please drop an explanation into the comments box to ease my manifest ignorance.


Then I might have a hope of understanding what Julian Glover or Simon Jenkins are on about... (well perhaps not!)

The Fukushima lies

Since the early days of the still unfolding disaster at the Fukushima Daichi nuclear power plant, TEPCO the plants operators have released both unintentional and deliberate mis-information about what had happened to the plant after the earthquake and resultant tsunami.

We now know this because TEPCO under intense international scrutiny have admitted it.

NHK - the Japanese TV station reported that:

Tokyo Electric Power Company, the operator of the Fukushima Daiichi nuclear power plant, says most of the fuel rods in the No.1 reactor had dropped to the bottom of the pressure vessel within 16 hours of the earthquake on March 11th.

The utility revealed its study on the subject on Sunday.

TEPCO said it analyzed the data and calculated a timeline for the developments in the No. 1 reactor on the assumption that the reactor lost its cooling system as soon as it was hit by the tsunami.

The firm said that within about 3 hours after the reactor automatically shut down, the cooling water had evaporated to a level at the top of the rods.

In the next hour and a half, parts of the fuel rods are believed to have begun melting.

***

Almost of all the fuel rods melted and dropped to the bottom of the pressure vessel by 6:50 am on March 12th.

This flatly contradicts what TEPCO had been insisting all along - but confirms what a great many experts had said.

The pro-nuclear lobby were quick to jump on TEPCO's false data and trumpet that all the reactors had shut down 'perfectly' after the quake and that damage to the reactor pressure vessels had not occured.

In fact,  all three of the stricken reactors were in meltdown after just 16 hours and some experts now believe that it was the quake itself and not the tsunami which knocked out cooling systems at the plant.

While one might expect pro-nuclear lobbyists to be given free reign to soothe and spin on the BBC - many of us were unprepared for celebrity eco-columnist George Monbiot to jump ship on the basis of this 'good news'

In an article in the Guardian provocatively titled "Why Fukushima made me stop worrying and love nuclear power" he was a suprise supporter of a consensus built on abject lies.

He said;

"A crappy old plant with inadequate safety features was hit by a monster earthquake and a vast tsunami. The electricity supply failed, knocking out the cooling system. The reactors began to explode and melt down. The disaster exposed a familiar legacy of poor design and corner-cutting. Yet, as far as we know, no one has yet received a lethal dose of radiation."

We now know more about the real timeline of events and worse still his delight that no-one died in the accident itsself will surely be tempered by news like this from the Washington Post. just 5 days ago.

"The six-reactor complex on Japan’s northeastern coast continues emitting radiation into the air and water, and Tepco has said that it will not be able to bring the three heavily damaged reactors under control until late this year or early next year.


The radioactive material already spewed by the plant could cause 120 cases of leukemia in Japanese children over the next 10 years, scientists from the National Cancer Institute said at the meeting.
“You can see there might be considerable number of leukemia cases,” said NCI’s Kiyohiko Mabuchi."

Will George Monbiot and others now retract the mis-information they have helped to circulate about the Fukushima disaster?

THEY SHOULD.

Meanwhile wiser heads prevail -  the Japanese prime minister has announced that Japan, is dropping plans to double its nuclear power capacity and the construction of 14 new nuclear plants. Instead, Japan will “start from scratch” with its energy policy, by developing wind, solar and biomass energy sources.

Germany too has announed a wholesale abandonment of nuclear. Where will our electricity come from now?

How about the never used word - conservation!

Shale Gas - not a 'saviour' fuel

Just as many of us surmised - Shale Gas, the wonder fuel that was apparantley going to power the US for the next 100 years is not the perfect techno-fix that all sides on the energy debate yearned for after all.

This report compiled by the Post Carbon Institute illuminates the problems and the delusions of shale gas.

They rightly say:

"The biggest losers in this misguided rush to anoint shale gas as America’s energy savior are members of the public, who need sound energy policy based on realistic expectations for future supply, as well as sound assessments of economic and environmental costs."

President Obama touted natural gas as a cornerstone of his Administration’s “Blueprint for a Secure Energy Future" and the UK government is very keen too.

Meanwhile in the UK work on gas fracking was suspended after it was implicated in earthquakes near the test well. Oh dear.

Expect many miracle techno fixes as part of the energy descent.

Peak Oil - what is missed

Fab article on the Energy Bulletin reflecting on what is often missed in the debate about Peak Oil.

Contributions from lots of people - some I agree with and some i find daft to the point of being annoying - but I think the best was from the ever reliable Richard Heinberg.

Richard in my view is an international treasure who speaks so much good sense on so many topics - but especially peak oil. I highly recommend a trip to http://www.postcarbon.org/

Peak Oil and Peak Coal are by themselves seldom acknowledged, but there is a further problem that gets even less attention in the media. It’s one that could have greater short-term impact than anything else (short of a truly apocalyptic natural disaster). And that is the impact of Peak Resources upon the world’s financial system. It’s the End of Growth.

We’ve already seen a dry run in 2008, with an oil price spike triggering the worst financial meltdown since the 1930s. As resource supply limits tighten, we’ll eventually see a re-run - but this time the world’s governments and central banks will already have exhausted their bailout capacity. Politicians may rail about deficits, but few if any of them understand the relationship between Peak Debt and resource limits - and their ignorance will make it all but impossible for them to mount effective responses. That’s why it’s probably up to communities to design their own resilience strategies.”

Nearly 100% correct - although I have little faith in the notion of local resilience strategies.

I also liked this from Keith Farnish.

“In discussions of Peak Oil and other shortages, we seem to have lost our sense of deference to what, after all, is something we only have the right to borrow. Every drop of oil extracted by civilized humanity is a drop of oil that won’t be returned: yet we view that as a Resource, something that is there to be used rather than something that just happens to be there. The oil was not put there for us to use, it just exists, and we happen to be using it, to our likely tragic denouement.

Jeff Vail had this to say.

“In my opinion the biggest AND least discussed issue is that the hierarchal nature of our economic-political system demands perpetual growth. Accordingly, any “solution” that does not promise a return to growth will be rejected out of hand by that system, but any “solution” that does promise perpetual growth is a false hope.

Hierarchies compete in a peer-polity ecosystem and must adopt short term strategies to maximize growth or be out-competed by others that do, no matter how unsustainable the pattern in the long term. This will not change in a broader environment of perpetual real contraction - there will always remain opportunities for competitors to pursue a maximization strategy at the cost of others. Energy descent will not put an end to the pursuit of growth by hierarchies - it will only make the game more cutthroat and zero-sum.

Why the focus on hierarchies? This systemic demand for growth is a symptom of centralization and the accompanying competition for resources from the periphery (both geographic and conceptual). This systemic need for growth does not exist where there is scale-free self-sufficiency (a resilient characteristic hierarchies trade for efficiency), either localized, networked, or both.”

i think he is right about the problem of perpetual growth - probably right about the competition leading to a zero sum game

...and flat wrong in his fantastical notions about scale-free self sufficiency which is an idealised throwback to an era when we didn't have the population we have now.

NICOLE FOSS said

“We need to start addressing the cause of our problems - the hierarchal structure of out political-economic system that we generally take as a given - rather than continue to focus in isolation on the many symptoms of this structure.

I get so utterly frustrated by the eco-new-age cause celebre fixation with some ridiculous notion of a world without heirarchy.

The Transition movement in my area is a local by-word for vexed failure to really achieve anything much - and this determination to avoid any and all organisational structure that might place the right people in the right roles is the reason.

I think Peak Oil has been filed by most people as a niche interest for eco-cranks and new age hippies - not making any link between rising petrol prices and the supply of oil.

I wish Peak Oil could be seperated from the identity politics of some of its proponents and make its way into the mainstream of public opinion - I suspect by the time it actually does the opportunity for any kind of a soft landing will be lost.