Davos din starts; China adds banking system liquidity; Canucks depressed; Japanese machine tool orders recover; Aussie judge lays into 'cultural' defenders ; UST 10yr 3.98%; gold up but oil down; NZ$1 = 62 USc; TWI-5 = 70.5

Anyone claiming that China’s economy is collapsing should look at this graph. A collapsing economy does not alleviate poverty. A collapsing economy doesn’t improve the lives of the majority. There isn’t a historical precedent for such a thing, unless you buy into typical anti-communist historical distortions that is. Source: UkraineHumanRightsAbuses  Link

I disagree with a part of the Oxfam report. They say it will take 229 years to eliminate poverty. I suggest they are wrong - poverty will never be eliminated. There is a part of human psychology where people will seek to secure more for themselves at the expense of others. It is about power, greed and survival (even though the accumulated wealth is much more than required for survival). So ways will always be found to subjugate the masses and poverty is perhaps the strongest tool of them all.

"By 2015, the share of the world's population living in extreme poverty fell to 12 percent from 36 percent in 1990"

https://www.nytimes.com/2021/12/02/world/global-poverty-united-nations…

A rising tide...

‘Only around a third of younger Britons now own their home at the age of 30, compared with more than half of earlier generations at that same age’ https://economist.com/britain/2024/0    Link 

Thus instead of the central banking narrative that lower rates lead to higher growth, the empirical and verifiable reality is that higher growth leads to higher rates and lower growth leads to lower rates. If rates are the result of growth, they cannot be the cause.

This raises some new questions. Firstly, if it is not interest rates that drive growth, what then? And secondly, why do central banks keep insisting that they are using interest rates as their main monetary policy tool, when this is simply impossible? Recently, central banks have been lowering rates, while proclaiming that this is a measure to stimulate the economy. But the empirically verifiable fact is that they lowered rates, because economic growth has decelerated. Falling growth means interest rates must follow down. And what has been the role of central banks in the growth slowdown preceding the lower rates? We may presume that they had not used their vast powers to engineer economic growth – powers they worked hard to obtain in previous decades, in the form of independence with little meaningful accountability.

Instead of unravelling this mystery, central bankers have been making counter-factual assertions about the causation of interest rates and growth. Yet we know them to be in possession of thousands of highly trained staff and the best quantitative data sources on the economy of anyone. Since the hypothesis of complete incompetence or irrationality is a last resort, it stands to reason to adopt the working hypothesis that central banks have employed these counter-factual assertions on purpose. Two reasons come to mind: Firstly, they are using the interest rate narrative in order to suggest that they are adopting beneficial policies, when this may not really be the case. Secondly, they may in this way be able to distract public attention from the true causal relationships in the economy. In this case, a far less benevolent interpretation of central bank policy becomes suggestive.

As Forder (2002) has argued, obfuscation has served central banks particularly well since they have become so all-powerful: the danger for them in this era of unprecedented powers is that the general public may simply (and rightly) link bad economic outcomes to bad economic policies adopted by central banks, not to the – now far less powerful – governments. In other words, since almost all economic keys have been handed over to the central banks, one can reasonably expect them to be blamed for the economic mess that is such a recurring feature of economic policy during those decades of ever greater central bank power. As a defense mechanism, central banks could be expected to argue that they are doing all in their power to help the economy, while pinning the blame on other actors. But for this to work, observers need to be misinformed about what the true levers of monetary policy are.

A desire by central banks to misinform would explain why they have spent vast resources on “economic research” – pseudo-scientific writings that are often far removed from reality, but are designed to place any blame for the terrible economic performance that they have been responsible for on other actors – preferably the government, fiscal policy or ‘irrational’ and ‘uneducated’ ordinary people who are looking for ‘easy answers’ or seeking ‘populist explanations’, while anyone contemplating the possibility that big banks and central banks might not always look after the public interest and instead might collude in order to put their own objectives first is identified as a ‘conspiracy theorist’. In other words, the “economic research” produced by central banks is usually of a kind that at best looks like political PR to objective observers, if not outright propaganda. Link and further analysis

The lesson, which many of us Greenies already know, is that nuclear is a great power source and in many countries should be the core of their generation. Possibly our only hope of getting away from fossil fuels without dramatic reductions in our energy use (which would likely mean widespread discontent and/or starvation). 

Wind and solar can't do the job on their own without dramatic overbuild and storage. Something like Onslow and NZ's hydro infrastructure could have gotten us close, but imagine the scale of the Onslow equivalent required to make a difference in a country like France or Germany. 

profile,

France kicks wind and solar targets to the curb and focuses on reliables. Indeed, realities begin to bite.

I think you made the point very recently that India intends to roughly double its coal production by 2030. I thought it would be interesting to see just how much additional CO2 this would release into the atmosphere. Given that we know, based on their atomic weights, that CO2 is 3.67 times heavier than carbon, we can do the maths. On the assumption that it will be largely bituminous with an average carbon content of 66%, then we have some 660 carbon atoms per kg of coal. Assuming an additional 600 million tonnes( a very conservative figure), then we can work out that by 2030, an additional 1,500 million tonnes of CO2 will be entering the atmosphere annually. NZ's current total(CO2e) emissions are under 80 million tonnes annually and stable/falling. Interesting?

Lesson is invest in uranium :)

Yes Yvil.   We in Nu Zilund have drifted into a political driven unreal situation I think.   It's a great realistic decision in Australia.

But Australia has it's weirdness as well.   Sitting on a Qantas jet last week they were acknowledging traditional owners of something.  Could not think what that was as we were at 10,000 meters on a piece of great modern economy.

But I think we have been through the depths of that and it's turning around.

Must be ramifications there then for nations that are dependant on supply of Russian gas? In other words they will no longer be as vulnerable to Russia choosing to shut down supply.

Perhaps we should invest in an LNG terminal for importing, so we can run Huntly on gas (and other domestic use gas) instead of dirty Indonesian coal for the next decade or two.  Probably 1/10th the cost of that daft Onslow plan, and it could be online much sooner.  

Ramaswamy lives in an alternative universe.