From High Flyer to Soup Kitchen; the only way is ...

Suppose your neighbour has a good job and, like most people, spends all his income on paying the mortgage, the car repayments, the utility bills and manages to have enough left over for family holidays and occasional dinners out. Then he loses his job. Everybody's nightmare.

Suddenly his expenditure vastly overwhelms his income and, even if he sells everything he doesn't need and cuts non-essentials, but still he cannot continue to live at anything like the same standard. If he doesn't get another, equivelent job and salary fast, he'd have to downsize the home, trade in the car and forgo the holidays.

That's hardest of all on the ego. Words like 'failure' and 'guilt' come to mind, and its no surprise that depression is both a financial and psychological phenomenon. Most people will do anything to avoid this, or will hide the effects as long as possible, perhaps even lying to neighbours; there have been cases of men still leaving each morning, as though to work, because they couldn't even tell their wives! Of course, denial makes it much worse, and the first the wife may know about it is when the bailiffs call at the door. Next stop, the line at the soup kitchen.

So if, say, the credit card company phoned and offered our hypothetical neighbour a lump of money, perhaps around one-and-a-half times his annual salary, borrowed against his possible future earnings. Now he could invest the money in retraining, or building a home business, or creating a workshop to make stuff to sell. Or he could pretend that everything was ok and he could carry on living as though he was still working and earning. He'd then pay his mortgage and bills and carry on until the money runs out in a year-and-a-half's time, and pretend it'll all turn out right in the end. Unless he NEVER gets such a well paid job again.

Most countries have done the latter. The USA doesn't really have a 'job' anymore except printing dollars, but its borrowed enough from its future to pay the bills for a while, in total 1.6 times its current GDP. The result has been a boom in stocks and shares as the Dow climbs 50% based on nothing but hot air and wishful thinking. The next plunge (this is all SO reminiscent of the 1930 second crash) should be sometime soon. My guess; either November or January. Then all that borrowed money will disappear too, like a losing gambler trying to get his losses back.

If the money had been used for something real, like investing is physical infrastructure; railways, local ports, renewables for example, then it could have employed real people and rebuilt local economies, and supported manufacturing based on the cheap dollar ready to rebuild exports. Instead it's all been wagered on a second roll of the dice.

It is said that China, growing at over 8% a year, will overtake the American economy by 2027. I don't think that's true. I think China is actually growing faster than shows because it is investing in infrastructure which doesn't show in the production figures for many years, and the US will collapse pretty fast as the dollar slides in value and hollows out the shell of the US economy, just as Peak Oil decimates its oil-hungry businesses. But the legendary US ego will hold on to its self image as long as it can, lying to its friends and neighbours and pretending to go to work until, finally, one day, the loans run out, Chinese bailiffs bang on the door, and it has to join the line at the soup kitchen.

Britain is little better. It still has some oil (declining fast) and it has the potential for renewable energy. But its debts are overwhelming and, in a poorer energy future, its hard to see how taxes will ever catch up. Real wages must fall and energy prices will rise, and the country imports half its food so food prices will rise too.

If all these essential are to be paid for out of any family's budget then something has to give - thet something is house prices. Britain has the highest house prices in Europe still, and housing costs take a larger chunk of family income that elsewhere; twice that of the USA. Rents show a return of just 2.5% compared to 5 or 6% in most of Europe. If rents are an accurate indicator of affordability, then house prices must be twice what they should be! This property reality will undermine the economy for years.

But for both the USA and Britain, the main borrowers in the global rescue strategy, you'll note references to borrowing against future production, future GDP. What happens if real wages fall? What happens if house prices collapse? What happens as Peak Oil impacts our oil-dependant economies? What happens if China competition and poor financial markets reduce our GDP? How then will these massive debts ever be paid off?

THAT is the real, big, smack-in-the-face question. And I have no idea!

How to Change the World

I sometimes lecture sustainable development and I've become involved in the Transition Towns network, but I have to say that I don't think most people are at all interested in saving the world by changing their behaviour. Most people are worried about their jobs, money, sex lives, being overweight, their children, paying the bills, and a 1001 other things before they get to worrying about global warming, Peak Oil or mass extinction.

I used to talk to company directors and make the point that until their message imposed into the world of the guy sitting in a white van reading the Sun newspaper, or was talked about by young mums waiting for their kids outside the school, they haven't reached most of the people they needed to reach. By that measure, sustainable development is a million miles from public awareness.

But getting the message across is only a small first step - the next big step is getting people to change their behaviour. Most people don't actually EVER really change their behaviour. They might want to, they may decide to, they might even promise to but, like going to the gym or dieting, it never happens longterm. I believe our behaviour is set early, first by our parents and then in childhood by our peer group. By the time we're teenagers we may rebel against our parents views but, by the time we're 25 we're probably doing much the same as our parents did. Most of us get to 40 and realise we're JUST like our mum or dad (and hate ourselves for it!).

All that is depressing if you need to change society's behaviour. For a government (who are certainly doing very little to change THEIR behaviour!) their option is rule of law; punishment for transgressors who, for example, don't recycle or who dump waste. That may eventually change the behaviour but it doesn't really change the mindset until the next generation grows up within the new rules. It's like seatbelts; I knew people who refused for years to wear seatbelts, but younger people wouldn't feel safe without one. Yet young people will drive with a mobile phone to their ear (which is much more dangerous, I'd say)!

One problem is changing the underlying belief system or, nowadays, the lack of a belief system. In the past behaviour was measured against The Church (of whichever denomination) and its rules. Whilst many didn't agree with all the rules in private, following them was an essential if one wanted to be socially acceptable. Nowadays Judaic religions have all but collapsed because their 2,000 year old rules aren't relevant, and their statements of fact are demolished by science. They have nowhere left to hide except in the dark cracks of ignorance and superstition.

But who doesn't miss the certainty of a belief? Which of us who has decided that a god does not exist in our life doesn't miss the reassurance of belonging? And how many people cling to religion 'just in case', hedging bets on an afterlife in heaven rather than hell? Or because they can't imagine their life without clear rules (even if they're stupid rules)

Perhaps its time far a modern belief. One which doesn't make ridiculous claims, or picks a fight with science. One which supports a positive future and addresses the real problems of today, not the tribal conflicts 2 millenia distant. What might such a belief system look like?

Suppose we believed in Gaia, the interconnected system of life, climate and geology as described by famous scientist James Lovelock and developed by others. Now I should say here that Lovelock gets very angry about the idea of Gaia as a religion, but lets investigate the possibility.

First of all, such a belief would be in something real, of which we humans are a part. We can live our lives supporting and helping Gaia (good), or we can act against Gaia (evil). The rules would be simple, coherent and we wouldn't need a priesthood to explain them to us! We all know the pleasure of sitting against a tree or watching the natural world around us, even if for city dwellers it's a rare moment. Being part of nature replenishes us; what better way to communicate with Gaia?

Science, as in the enquiry into the World and its systems, would be good - we'd be understanding more about Gaia. Destructive science, for example nuclear weapons or technologies that pollute, would be bad. This is a religion that wouldn't need to worry about discovering fossils or new theories; greater understanding would all fit Gaia's purpose.

As Gaians we'd see ourselves as part of the natural world, not separated from it. Therefore the destruction of rich natural habitats to grow cow food so we can eat beefburgers would seem as ridiculous to all Gaians as it seems to me now. We'd see that every species heading for extinction is one more step towards OUR extinction, like sand walls collapsing as the tide breaches our puny sandcastle defenses.

In Gaian economics, growth would still be possible for a company, but impossible for all the world because it's finite. That isn't a contradiction because other companies would decline and fail. However as we're all Gaians, competition between countries would seem futile, and even national borders pointless. Politics would have to be less confrontational. Greed, either personal or corporate, would obviously be bad and could even be seen as the ultimate expression of social evil; the theft of elements of Gaia for one's personal benefit.

Hmmm, this is getting interesting! What else would fit? Well, consumerism would be stone dead, we'd make things that would last and could be fixed, because we wouldn't want to waste natural resources. Perhaps people would take pride in creating beautiful things again (shades of the Arts & Crafts movement there). I've often thought that I could have bought some beautiful antiques for the money I've wasted on 'modern' furniture over my lifetime, and the money I'd have saved if I'd just bought one good car and looked after it! 'Waste not, want not' would be back in vogue.

We'd have to work to stabilise population, which has doubled in my short lifetime and is already 2 or 3 times what Gaia will support. But if we are all Gaians and some of us stop being so greedy, maybe a better distribution of resources will mean that poorer children can be properly fed, educated and then won't go on to have big families; a managed retreat from population crisis. After all, if we don't do it soon then Gaia will 'manage' human population in another way!

I think the result of all this can be summed up in a few words; one of them is 'stability', another might be 'permanence', perhaps even 'beauty'. Bottom line is that the clear guidelines for behaviour from belief in such a religion would be easy for anyone to understand, even for our man in a white van or busy mum. It wouldn't be just another intellectual exercise, it would really change minds.

Of course, it takes a long time for a religion to find favour, maybe not the 2,000 years of Christianity or the 1,400 years of Islam, but even Scientology has been around for over 50 years and is still called a cult by many, so it isn't going to change things quickly. And Lovelock himself says that the crisis in Gaia's systems (not as a religion but straightforward science) will result in 90% of the human population of the Earth being wiped out in the next 100 years, so we don't have much time to change things.

But hey, we have to do something, and we have to start somewhere! Any better ideas?

The Sustainable Development Commission and How to Think Outside the Government Box.

I've just been ploughing through the latest 138 page missive from the UK governments 'independant' think tank, the Sustainable Development Commission, on the future green economy, called 'Prosperity Without Growth'. (http://www.sd-commission.org.uk/publications/downloads/prosperity_without_growth_report.pdf).

It is long, worthy, full of great buzz-phrases, and almost useless! Most worrying of all, it cannot seem to get to grips with what 'growth' is, why it is currently considered necessary, what 'capital' is, the consequences of Peak Oil and why energy is so fundamental to the way our society is structured. It isn't sure if its an economic analysis, a philosophical agenda or a political manifesto, but does none of them convincingly. If this is the best these well-financed government advisors can come up with, we are truly doomed!

It reinforces my view that anyone who understands even 10% of what's happening at the moment, and wants to do something save themselves and their families from the consequences, will have to do it for themselves. This Government is squandering whatever chances it once had by trying to patch the doomed Titanic, rather than an orderly launching of the lifeboats and heading to safer future shores.

For the writers of the above Report, here are some hints:
The ultimate capital is the Earth itself; the soil and its continued productivity which, if properly managed, produces surplus food which is its profit. All the original writers in economics, from Adam Smith to Marx understood this, as did any wealthy person who owned land. Money isn't capital; its just a means of exchange. It can represent capital only if it is representative of something of true capital value, otherwise its as valuable as Monopoly money. It is therefore possible to have a money economy without debt.

Growth is only necessary in a debt-based economy; that is one where the amount of money in circulation is in excess of the actual wealth existing in society, debt created on the promise that future real wealth will be created to support it.

Growth pays the interest on loaned money; so no growth = no return on investment. That's the problem with a contracting economy, and that's why we can currently talk of wealth destruction; the 'wealth' was imaginary, it was just debt based on non-existant capital. This leads to the next question; where will that future growth in real wealth come from? It can't come from land because we already farm almost all the useful land in the World. It can't come from printing money; that just means there's the same wealth represented by more paper notes (inflation is the devaluation of money).

The confusing thing, the one example which many so-called economists come up with, is that in some way we've moved beyond this basic economics, that there is a 'new paradigm' in operation today which allows us to move beyond traditional economics into some new Golden Age. These are the Utopians, the Horn of Plenty theorists. Examples of this are that we now benefit from levels of development and wealth unimaginable a hundred years ago, that we live longer, are healthier, have more technology and goods, etc. The actual reason for this is mining of energy.

Mining in economics has a particular significance similar to, but not exactly the same as the common use of the word. Mining is using-up something; whether it is mining coal or rock, or mining trees or oil. If, for example we cut down all the forests and sell them, that means we've mined the forest. If we take oil out of the ground and burn it, we've mined the oil. We talk of producing timber or producing oil, but we don't produce it; we mine it. It is where we take a natural resource, our 'natural capital', and treat it as income and spend it.

One gallon of mined oil has the energy content of 8 weeks of manual physical labour. It's like having hundreds of slaves working for us. That is the basis of our wealth, that is why we have globalisation, and how we can afford the arts, speculative sciences, 12+ years of universal education, the 'service' industries. And think tanks!

But apart from the misunderstanding of concepts, the most disappointing aspect of this Report is its lack of solutions. There are lots of 'should's and 'could's, but nothing that will create useful or meaningful change. Apart from a woeful lack of understanding of the true basics of economics, I think this is because there is an acceptance (despite protestations to the contrary) that the nature of government and society is immutably thus. And perhaps it is.

After all, there are powerful forces arrayed in the continuation of the existing system, almost every aspect of economic and cultural life is based around this system. No wonder then that governments are willing to put us, and the next generation too, into debt to try to keep it afloat.

So if there is to be change, if YOU want change, don't wait for the government solution; you'll have to do it for yourself. It'll be difficult, because every government wants to take more and more responsibility away from you, and to control more and more of your life and behaviour. You, like me, have been brought up to rely on this system; for education, work, security, childcare, healthcare, ...... Isn't this what we've all been working for?

But if you don't want to sink with this ship, if you really want to take back control of your life, I think there are three main things you'll need to do:
You'll need to detach yourself from the trap of complete participation in the mainstream economy.
You'll need to move towards living in some kind of balance with the capacity of the natural systems.
You'll need to educate yourself and your children in the skills of a different way of living your life.

I'm working with some colleagues on something now, based upon all the above. It isn't just more words, but is a real, down to earth, properly financed, dirt under the fingernails way of actually changing things for you and your family. Watch this space!

Looking After Number One.

Is it just me, or do you get the feeling that every politician, big businessman, banker, supermarket owner, newspaper columnist and TV anchorman know each other? I don't mean 'know of ' each other, but that they go to the same parties, belong to the same clubs, call each other by first names, and their secretaries have all the others on the Christmas card list?

If this is even partly true, then there is no hope that any of them will have more than a passing interest in what happens to the average bloke in the street. I mean they'll not want us rioting, or trashing their investments, or going on strike (unless they've given up on that particular industry anyway), but none of their efforts at fixing this crisis, which is a crisis entirely of their own making, will have US in mind, except in making us pay off their debts.

Now, as someone who recently returned to the UK, I have to say you're already getting screwed! In France the local taxes, water rates, electricity bills, and lots of other daily costs are up to one-fifth of the UK! So how is it that a French city can collect the rubbish EVERY DAY, wash down all the city streets every other day, maintain beautiful gardens and urban trees, and still have money left for urban regeneration, tram systems, infrastructure works (usually carried out with style ansd panache)? Where is all the money going in the UK?

Well, I think its going in the layers of hierarchy, middle management, consultants, reports, committees, think tanks, advisors, assistants, civil servants (?), and the 1001 hangers-on that plague our society. Who'd have thought 20 years ago that I could hold up FRENCH local government as an example to British society?

The trouble is, we spend our money on really stupid things. Take cameras, for example. We are, apparently, the most spied-upon nation on Earth. Has it occurred to you that every one of those cameras have to be monitored, at least part of the time, if they are to have any use. How many people are we paying to build these cameras, install them, service and maintain them, look at the screens all day, record all those images of a street? To what effect? I've watched kids throwing bottles at a street camera late at night, and did a police car zoom down the road to arrest them? Of course not!

A few months ago, the Government asked Parliament to approve 42 day detention for terrorist suspects. They assured the public that it was necessary, and that it would be used wisely and in exceptional circumstances. Luckily Pariament refused. But similar justification has already been used over the last few years for new laws to sieze assets of terrorist organisations, and laws for local councils to have access to video camera footage, listen to private conversations, and to install cameras to watch a particular house. So far this anti-terrorist legislation has been used to seize the assets of Icelandic banks when they were in trouble (I never realised Iceland was a terrorist country!) and the local councils have given junior officials the powers to use the legislation over 10,000 times for such terrorist activities as dog fouling, dropping litter, or putting too much rubbish in a bin! This is the State out of control!

If the coming depression means that these organisations; councils, police, civil service and government, end up starved to the point that their ribs stick out, I for one will be very pleased.
But of course they'll fight tooth and claw to maintain their position, and every new protest, strike, riot and anti-government article will be used to justify increased budgets for spying-on, prosecuting and locking up members of the public, most of whom just want to be left in peace to have a just, fair and free life for themselves and their families. It is no wonder to me that people are angry and feel cheated!

I would like to think that there is a political party, or organisation, which can make changes at the top, but all the parties, newspapers and TV stations seem to be saying much the same thing. I think that the only option for most people is to try to get out from under as much of this pressure as they can.

It is in that light that many people are again thinking about self sufficiency, allotments, home schooling, solar homes, etc, all designed to reduce bills, provide some security, take back some control from the state and to try to isolate their families from the state's excesses. It is a sensible move, and as a long term interest of mine I wholeheartedly concur. I'd recommend it, and in fact I'm now doing the same!

Good After Bad.

If you can detach yourself from the fear and pain, it's fascinating to watch the news play out; rescue packages, companies, cities and even countries going bust, redundancies and frauds. And blame; lots of blame flying around.

It is worth stepping back from it to take a more balanced look. There are some things you can't affect and this is one of them. We are watching the complete collapse of a financial experiment which started in 1971 when the US government dumped the Gold Standard and started printing however much paper money it could get away with. Rescue plans may delay the inevitable, but its just good money after bad; it WILL collapse. Of course, if money is going to collapse as a system, it doesn't matter how much new money you create to try to save it, and I'd say this is why Obama is doing all this 'rescuing'!

Asset prices will continue to fall, unemployment will rise massively and the basic systems; local authority services, pensions, healthcare, the university system, and of course banking, are all likely to fail. There is no 'bottom' to this crisis; there won't be a 'bounce'. It isn't like other recessions because there isn't anything on the horizon that will pull us back out of it. If the whole world is down, where will the revival impetus come from? The moment any economy starts to revive, the oil price will rise and cut off growth.

One feature of any society is it's complexity. A society becomes more and more complex because every time it encounters a problem, it fixes it by adding a more complex solution on top (rather than reorganising society to fix the original problem). We're seeing this now - the banking system has failed, so let's rescue the banks and add some more bureaucracy and rules! There are two problems with this approach; every layer of complexity becomes more expensive to maintain (energy, money, time, whatever) and, the more complex the structure, the more vulnerable it is to catastrophic failure. Eventually its impossible to maintain the system, and it collapses back to a sustainable level. In traditional societies that have collapsed, this often means something like 10% of the original population.

Here another thing you can't change; climate change. The norm for carbon dioxide in our atmosphere is between 220 and 280 p.p.m. depending on whether there's an ice age going on. The last time there was 380p.p.m. of CO2 in the atmosphere, as there is now, was before humans even existed and there were tropical forests on the South Pole! If we stopped using fossil fuels today the CO2 levels would still rise to at least 450ppm. We are, to use the technical term, stuffed! Changing your light bulbs and recycling your wine bottles just won't fix it!

One more thing you can't change; over-population and its imminent collapse. When I was born there were 2.9 billion people on the earth, now there are 6.9 billion. Those extra people exist because of the short-term wealth created by our mining huge quantities of fossil fuels, especially oil, which we use for tractors and water pumps and fertilisers and food distribution. An economic crisis and a climate crisis will change our ability to produce and distribute food, and millions of people will die. The WHO and other responsible organisations have tried to estimate the sustainable carrying capacity of the Earth. The highest figure is 2 billion people. That means 4.9 billion people will starve to death if its a short term 'adjustment'. Those condemned people will mostly be the vulnerable in Africa and Asia, but the events in France in the heatwave of 2003, where an estimated 14,800 people died, shows how Western countries aren't immune. (I was living in France in 2003; it's strange how it happened almost without people noticing at the time!)

So if you can't change the financial collapse, climate change and the population crash, what can you do? Well, for one thing you could decide to stop putting your own energy into old dreams; it's just good after bad. The yuppie 80's aren't coming back, nor are the boom 2000's. Buying a house because now they seem cheap (compared to what; last year?) is STUPID! Luckily you probably can't get a mortgage anyway, and at least part of that is because the banks know where asset values are really going and KNOW you probably won't be paying them back!

What you could do is look at the way the less-complex World worked before we had fiat money, cheap oil and 5 billion-too-many people. At that time around 50% of people worked in farming and food production. Most of the rest worked in labour-intensive production, the better off were in trading goods and generally transporting them by sea or by rail. Only a tiny proportion lived in small cities, few were in the professions; doctor, dentist, teacher, etc, and the level of government was minimal. Money was a means of exchange, and savings for the proverbial rainy day or retirement. (There was almost no inflation for 150 years until the 1st World War!) Society could not afford to carry the layers of bureaucracy or the 'service sector' that today we think of as normal.

I'm not saying we'll go back to a medieval or Victorian society, but it IS worth looking to see what a real economy looked like and seeing which parts of our society, built as they are on VERY shaky foundations, may not be there next year. Then perhaps you can see where your skills fit in, what skills and resources your children may need, and how your family could plan to cope with our immediate future. It has to be better that 5, 10 or 20 years of wringing your hands!

A Letter to Our Children

Hi Kids. Well, we've messed up. Whilst we were going through our lives saying we were trying to do the best for you all, the reality was we were just being as selfish as people can be.

When I was your sort-of age there was still the idea that, with the War over (before I was born, but still setting the tone), we could build a better future based on newly-created wealth and cheap energy. The energy then came from coal, and the future new nuclear age, and along the way we found that huge bonus of North Sea oil. We created Concorde and the High Speed Intercity trains, we made cars and ships and steel, we had Windscale Nuclear Plant, we had televisions and bathrooms. We could see what the future held; it was just like in the science fiction films, and Thunderbirds, and eventually Star Trek. (Ever noticed how many devices in early Star Trek are now products? Look at your phone, your laptop, your PDA!). Whilst we may have questioned when 'The Future' would be with us, it was still a matter of 'when', not 'if'.

Of course, it wasn't all a smooth path into the sunrise; that glow on the horizon had other connotations; the atom bomb was a real threat and for a while in my 20's I (and many others I've met since) were convinced we were a button-push away from annhiliation. When Reagan finally instigated arms-reduction talks in 1982 I was in my late 20's with a very young family and I, for one, breathed a sigh of some relief.

But signs of other problems were already there. In 1973, just when I started 'proper' work, the Arab oil producing states organised themselves into OPEC and cut of the supply to the Western countries for supporting Israel in the Yom Kippur War. The effects in the UK were devastating, a 3-day working week, power cuts, the economy all but collapsed. But suddenly people realised how dependant we were on cheap oil, and did start talking about energy conservation.

Also in the 70's some people (often unreconstructed hippies from the 60's) started noticing what we'd been doing to the Earth. In the USA, Silent Spring was published by Rachel Carson, detailing the effects of the pesticide DDT on songbirds. For me it was The Limits to Growth (written by 100 international scientists called The Club of Rome) which I read in the late 70's, detailing the speed with which we were using up the Earths' resources. I've followed the environmental debate ever since. But that doesn't actually help much, does it?

But then came the 80's; Maggie Thatcher's Britain, Reagan's America, city traders, yuppies, and cheap oil again. It was cool to make money (and not-cool not to!) so we were all swept away on a tide of the new confidence of success. That led to the 90's and another recession, but somehow the agenda didn't change. Yes we were in recession, but Maggie's Kids only had one agenda so it was just a temporary blip until the next boom. That boom came with Blair and New Labour; suddenly even the Left thought it was cool to make money and so there wasn't any opposition to more boom. But booms come in different flavours, and this one wasn't based on any reality, like selling more production overseas, or digging more oil out of the ground.

I have to say at this point that, although I've enjoyed the periods of wealth and I'm as much a consumer as the next man, I've always felt uncomfortable with the gambler's mentality, the zero-sum game which goes under names such as 'Investment Banking' and Commodity Trading'. What I mean by this is any business where its profit relies on taking wealth off someone else; my gain is you loss. That's gambling, not wealth creation. For me, investment banking is investing money in a business because you think it is well-managed and likely to do well in the longer term. Commodity trading is buying commodities for future production and manufacturing at home. Old fashioned, huh?

But throughout this period the environment was barely on the agenda. Yes, fish stocks were collapsing (an economic problem), the rainforest was being converted into cheap furniture (which we all bought), and we didn't seem to get snow anymore in winter. But hey, that's good, isn't it? Vineyards in the south of England!

A few people connected resource depletion, the extiction of 1,000's of other species and the World's burgeoning human population (2.9 billion when I was born, 6.8 billion today) and tried to ring warning bells, but few politicians were listening; jeremiahs don't get votes! And anyway, what can you do about it?

For me, Peak Oil was the New Big Thing to worry about, and it seems like we probably passed peak oil production in 2006. In economic terms, oil demand is inelastic; a small change up or down has a big effect on price. But funnily enough, the worldwide recession has now reduced oil consumption, so it may play out that the oil will last longer and price stay lower than we thought. Every cloud......!

Climate Change resuscitated the old concerns from the 70's. In fact, many of the books written at that time are the new best-sellers as today we rediscover the eco-agenda. It'll all be OK, the Governments say; the new economy will be a sustainable one, the new jobs will be eco-jobs, the new technologies will be environmental.

But suddenly it's all too late; we've gone too far over the cliff, there's no going back and now we're starting to feel the wind rushing past as we fall. The triple effects of overpopulation, climate catastrophe and economic collapse are our legacy to you. You will suffer a generation of debt and poverty, energy shortages and decline of living standards, made all the worse because you have grown up with expectations of something better; not just better that what you'll get, but better than we've had too. The skills we've told you you'll need will probably be useless to you for the future you'll face; there won't be many marketing, or media, or legal jobs where you're going. You won't need a degree, you'll need a skill. Better to be a practical farmer or boatbuilder or engineer or growing vegetables.

The hardest thing of all is, you'll see it all happening first-hand. In the past, in a less connected age, a famine in Africa was a 30 second news item, or an inside-page story in a better newspaper. Now the results will be your friends out of work and desperate for your help, and storms which wash away your car or flood your home, and dead would-be migrants washed up on Spanish holiday beaches.

So, here's where I say a heartfelt 'Sorry'. We didn't mean to mess up your World for you but, at the same time, we kinda knew it was happening and didn't do anything about it. We were too busy. We're not entitled to give you any advice, or tell you how to get out of this mess - if we'd known, we'd have done it ourselves. Wouldn't we? Good luck!
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Shame About Obama

I had high hopes for an Obama presidency and, like everyone I guess, had hoped he'd 'do the right thing' in MY terms. On the other hand I have few hopes for the current UK government - since Blair's exit, Gordon has gone from incompetance to mismanagement and back again. Sad to say, both Obama and Gordon Brown have taken the same path of pumping our future wealth into the present failed system. They'd both rather try to save the failed economy rather than build the next one.

It won't work, of course. Already the failure is obvious to anyone who's looking. But neither administration has any options now; they've bet on this horse and have to keep on shouting for it until it falls. Then they can say, "Well, we did everything we could". And it's easier than trying to tell an electorate the truth; we have 10 or maybe 20 years of deep shit to wade through where everything you previously thought of as an asset, including your pension, will become almost worthless and lots of people will be unemployed and lots will be very, very poor. So better get used to the idea.

I almost don't mind that they're wasting these unimaginable trillions (doesn't really matter is I say they're dollars, pounds, euros or pebbles on a beach - it doesn't help us imagine the scale of the waste). What IS disappointing is that we could have spent the money on something useful. .

Like this; instead of the old gas-guzzling technologies of car companies, roads and bridges, how about railways and trams, docks and harbours, all the infrastructure we'll need to get a real economy going again. And instead of bailing out the banks and bankers' bonuses, how about paying off some of the mortgages of poorer people so they don't lose their homes because of other people's greed and cupidity? Surely real families are more important? And that would help stabilise the banks AND property market too.

But while we're at is, how about cutting the obscene levels of pay and pension rights of top civil servants and government appointees gravy train, and spend the money on actually MAKING something! Novel idea, huh? Here in the UK we are world-renowned for our inventiveness, but anyone who knows that fact will also know that we are equally famous for not exploiting our ideas! Surely better to give that money as seed capital to our engineers, scientists and inventors.

But wait a minute; What engineers? What scientists? Well, we still have a few, but most colleges and universities now focus on easier subjects; ones that they can more easily get 'passes' in, like hairdressing, video game design and alternative therapy! How can we build a future society on that?

I'm old enough to remember an economy based on production; you know, making things. With my boring engineering background I have always felt uncomfortable with the idea of the 'service economy' and 'post industrialisation' and all those other buzz-phrases economists use to try to explain imminent failure of a stable and productive social and financial system. Now we have new ones, like 'negative growth'! Negative growth??? It's all bullshit. I think its simple; you make something people need, and make it better than the next guy. You tell people about it, and they buy if from you. How hard can it be?

But, when all this rescue stuff has failed, we'll all be spent out and there will be NO possibility of finding the investment money for the real stuff. There is no Plan B. I cannot imagine what we'll have left.

Luckily I'm also old enough not to have to contribute much to paying back all those trillions of whatevers. Best of luck to those of you who will!

The House Price Scam

When I was young (a long time ago!), my father bought a nicer house for us all to live in; a little bigger, semi-detached, 3 bedrooms, garage and in a pleasant neighbourhood with a good school. He paid about £3,000 for it (I don't remember precisely), and at that time he was earning about £950 per year as the manager of a small engineering business (not owned by him). In other words, the cost of this pleasant house was about 3 times his income.

With the technology of the internet, I can now search for houses for sale in that very same street, and I find that such a house would now cost around £275,000. A a man doing his job today would probably be earning about £26,000, so would have to pay 10+ times his income to buy that SAME house! This isn't inflation because then the prices would have gone up but relationship would be the same. And the cost of labour and materials to build such a house hasn't changed so much. So what's going on?

This crazy difference in cost is the land value. At the moment I'm working on a couple of projects with an architect friend, and so I know that a piece of land to build similarly pleasant semi-detached houses is going to cost you about £100,000 per plot. Now assuming you'd get 10 of these houses on an acre of land, that equates to about £1 million per acre (or £2.4 m per hectare).

But you can easily buy farmland for between £10,000 and £25,000 per acre, so what's going on? Why is the one piece of land worth 100 times the other piece? The answer is Planning Consent, that little piece of paper the local authority may give you to allow you to build a house. By limiting planning permissions they have driven the price up to these dizzy heights. This is a government mandated scam, and HAS to be brought to an end.

Now, I'm not advocating uncontrolled development all across our countryside, but I would like to examine some of the unintended consequences of this situation where house prices are so much higher than they used to be.

For example; my father was able to go out to his job and earn enough that my mother didn't need to work. She was there when we went to school in the morning, she was there with a hot meal when we came in each afternoon. She had her own car and we had occasional foreign holidays (driving to Europe and camping) and, while we weren't rich by any means, we never seemed to be short of the things we needed.

Today, to afford that same house, my mother would need to work too. For families with young children that means childcare for up to 10 hours a day (the working day, plus the commuting) and her wages after paying childcare would be laughable. She wouldn't have a car, we'd have struggled for money and probably wouldn't have had those holidays. My sister and I would have had a doorkeys to let ourselves in, and I probably would have learned to prepare my own dinner pretty quickly! In fact, it soon becomes obvious that we couldn't have lived in that house.

One of the major reasons for the break-up of marriage is said to be financial problems, and the stress of living with a constant pressure of unpayable bills leads to many of the current ills of society; violence in the family, absent fathers, disassociated children, alcoholism, poor aspirations, etc, etc. All this so we can afford to rent or buy an overpriced house!

The good news is that this is one thing the government CAN easily do something about. It is in their remit to release land for construction, and deflate (in a controlled way) this planning-consent bubble. A simple solution is that every community must find land for development in direct proportion to the number of houses it already has. For a village the parish councill may need to find space for, say 5 houses, for a town it may be 100. The plots should be released over a period of time, so everyone know that more plots will be coming along next year. If this is mandated by government but the location of the development is decided at the most local practical level, then there should be little friction. The plots should be offered for public sale, not controlled by a big developer, so local people can buy them, and local builders can complete the home.

For cities, like London, its time to take better control of the environment in the centres. There are many empty buildings, flats above shops, office blocks. It makes sense for city workers to live in pleasant homes in pleasant city centres, not to commute from suburbia. Many of the problems of the city centres relate to this people-transport problem; in particular if you take away the city-centre cars and make most of the streets pedestrian or urban parks, then they become pleasant living places for families.

This again has to be government led. By using a mixture of joint-development agreements with landowners and housing association models to renovate, remodel and release large numbers of apartments and houses into the rental or shared ownership market, rent and property prices would fall, there'd be fewer commuters and families could reclaim the city centres.

There are two other very good reasons to do this too; economy and environment:
The economic advantages are obvious. If people are spending less on inflated house prices or rent, then they have more to spend in the real economy. If land values are lower, then we can afford to build more homes. If we build homes, that's real wages in real people's pockets, not planning-consent profits into the pockets of landowners and speculators.
Secondly environment; we need well-insulated, efficient homes and less commuting to reduce our imports of fuel, and reduce our CO2 emissions, and this is a way of doing this. And we can take the financial pressure of families who just want to have happy, successful lives for themselves and their children.

And isn't that what its all about?

Plan B

The rescue plans aren't working. Unbelievable amounts of future debt are being created to spend today in an attempt to 'reflate' the collapsing economies, but already the evidence shows that it isn't working. Governments, especially the UK and US are committing ever more massive amounts in the vain hope that they can get ahead of the tsunami which will soon overwhelm us.

The problem is that the whole financial system is flawed, and this isn't an unknown, out-of-the-blue phenomenon. It's been known, and written about, for decades, just not in the mainstream press. And governments, bankers and business leaders aren't going to tell you that everything you've worked for, saved and believed in was based on a flawed system, are they?

The problem is that every £ or $ that is created is 'supported' by a £ or $ of debt. That debt is borrowed with interest, and for the interest to be paid, there has to be 'growth', in other words a constantly expanding economy. We can survive a short recession for 2 or 3 years, but a particularly deep or long recession will collapse the whole system; it HAS to. There isn't an option or solution. Sadly the debt that's being created today to rescue this collapsed system is being wasted, and will disappear into the pit. Already the rating agencies are discussing the real possibility of the UK government defaulting on its future bond issues, and anyone following the collapses of local government financing in US states (look at California, for example) will recognise the writing on the wall. The word is 'bankruptcy'!

If this rescue doesn't work, the western economies will be in ruins. Unemployment will be at least 15 or 20% and the governments won't have the ability to raise more debt to pay for benefits, medical care or pensions, leave alone company rescues or infrastructure projects. If that is a serious possibility, what should a government do?

In business (and personal life) its a good idea to imagine where you'll be in 10 years time, and to work back through the decisions you'll need to make along the way to get you there. In a smaller, more local economy, we will need more local food production, cheaper housing, cheaper public transport, less imports, more manufacturing for own consumption and for export. We'll need more suitable infrastructure; local docks and harbour, freight rail (not a third runway at Heathrow Airport!). We'll need to make this country a place for manufacture again, and re-import all those jobs we gave away to cheaper economies over the last 30 years. And we'll need education for a real economy; not economists, marketeers and beauticians, but trained agronomists, engineers and manufacturers. In other words, create a REAL economy.

If we spent the money on these things, we'd be investing in a real future, not trying to reflate a bubble economy which has already burst for ever. Will it happen? Probably not - the government has shown where its loyalty lay by paying out to the bankers without capping their profligacy (or even their paychecks!).

So its up to us, as individuals and families and local communities, to make whatever provisions we can, before its too late. I'm not about to tell you what you should do; you can make up you own mind. You already know your own financial vulnerabilities, your family responsibilities, your ultimate commitments. You need to make brave decisions, talk it through with your partner, think through your own 'Plan B'.

If The System does fail, where will you be in 10 years time?

Fuzzy Logic

Last week the German Finance Minister and a German economic advisor came out against Gordon Brown's 'Saving the Free World' policy of more massive debt, designed to save us from - massive debt! The comments were sensible, and I hope they prick this particular balloon of hot air.

Let me give you an example; suppose your family has a big house, two cars and expensive spending habits. You get into financial trouble so, rather than reduce your spending, you decide to sell your children into slavery for most of their lives. Is that a good idea? Would you support it?

That's exactly what Gordon's Plan is doing; selling all our children into debt as they struggle to pay our debts, our pensions, our healthcare and our climate mayhem. All this while they earn less as our World becomes poorer, for the first time in a generation. Is this what you want?

The solution that NONE of the governments will propose is that government itself must cut back. I don't mean a little tightening of the belt or a few civil servants on the sacrificial altar, I mean massive cutbacks in the layers of bureaucratic gravytrain that swamps our businesses and population. We simply don't need this much 'administration!

Instead all the political parties are proposing various ways of spending their way out of trouble, kinda like digging your way out of a hole! It's like a driver accelerating to try to avoid a car pile-up. It won't work. We cannot financially survive on this path.

Let's hear from a political party that wants to get rid of most of government itself, and then maybe we can start listening to their proposals. How about living within a 10% tax rate? How about an end to lucrative public-servant pension schemes? How about an end to expenses over 5% of salary? How about a really simple tax system? And a really simple benefits system? And one health scheme and pension scheme for all?

But none of this will happen, we'll just go bust bigtime, and our children will be trying to pick up the pieces for a generation. God help them.

Be Happy!

In my last blog, I mentioned that a stack of thousand-dollar bills 4" high is a million $. The latest estimate of total American debt and liabilities, on this same principal, is a stack of 1000$ bills 299 miles high. That means if the space shuttle was orbiting the Earth, it would still have 100 miles of bills stacked above it!

Whilst we may vuse these tricks to help visualise the magnitude of these silly numbers, it doesn't show us a way through this situation, and when all the news is bad news, it's hard to just get on as though the rest of one's life is normal. We are in recession, we will soon be in economic depression, and there is a fair chance the banking system will collapse. There's nothing you or I can do about it, but watch from the sidelines.

I suppose that good things will eventually come out of this. People will reconnect with reality, will consume less, have less debt, value family and friends more, be fitter, start growing food again, make things, start real companies that make real goods. Maybe be nicer to each other.

I've always said that you can only be disappointed if you have expectations. There will be many unhappy people out there, especially young people, whose expectations will never be met.

Happiness is a state of mind, it isn't your circumstances.

The Devaluation of America.

If you were to stack up $1,000 bills to make a million dollars, it would make a stack just 4" high.

If you use those same $1,000 bills to make a stack of $700 billion, the cost of the proposed bail-out of the banks and financial institutions, the stack would be 44.2 MILES high!!! (thanks to http://www.chrismartenson.com/ for an excellent description). I still struggle to get my head around the size, audacity and sheer desperation of the U.S. government's plan.

I also can't believe they think it'll work long-term, so suspect it's only expected to last until George W. hands over to Obama, and then he and the Republicans can sit back and watch as this financial timebomb explodes under the Oval Office, leaving a crater deep enough to bury the Democrats for years to come.

Whichever party takes over, they have only two options in printing $700,000,000,000 new dollars; either increasing taxes and reducing spending to pay off the massive debts (for many, many years to come), or a long and deep and devaluation of the dollar; in other words, engineered inflation. This will devalue the debt and more quickly reduce the burden on the government, and will be the government's preferred option.

This devaluation will have terrible consequences for baby-boomers who have saved and invested for retirement, or anyone with savings, or living off a pension or fixed income. There will not be much of an investment banking market when this is over: Who will trust them? Where will they get there money from? Who will stand by and watch directors raking off huge salaries and bonuses? Talks of regulation are welcome, but too late. As usual.

Massive devaluation will also destroy any companies based on imports, and will also affect shipping, tourism (to foreign countries), and the destruction of wealth will decimate the retail businesses, especially those selling the non-essentials; from Starbucks to nailbars. Back to reality.

But worse of all for America, no-one will lend them money. No sovereign wealth funds, no international investors, no wealthy individuals, will invest in a currency whose only way is down. I'd guess we'll start to see this as foreign investors start to shun U.S. Government Bonds. Bear in mind that the INTEREST alone of 4% on $700 billion is $28 BILLION a year!!! Yet without this investment, the U.S. will not be able to buy oil or gas on the international markets, consumers can't borrow or spend, property will continue to plummet with no 'floor', and unemployment will inescapably keep on rising. There is no backstop - what is there in the future that will stem the decline?

The other aspect of this which no-one has talked about is vulnerability; both China and Russia now hold huge quantities of dollars, dollars which they'd dearly love to get out of. If either or both decide to dump dollars on the market, the value would plummet. Whilst China has little reason to do this at the moment (mostly because it holds $15 trillion and couldn't dump it fast enough) , Russia is different.

The U.S. has been remarkably insensitive in shoving NATO at the old Russian satellite countries, and recent Russian reaction shows it's had enough. While the U.S. is still a customer for oil Russia may hold off action, but if the U.S. is in recession and can't afford to buy the oil anyway, then Russia may become a damnsight more belligerent!

George W. Bush and the Communist Party

S'funny, I always thought of George W. as a dyed-in-the-wool, free-trader, dog-eat-dog capitalist kinda guy. But as his Administration nationalises the banks, 70% of the mortgages (i.e. most property and land), and the biggest insurance company, and dumps the biggest couple of investment houses down the pan, I wonder if maybe I read him wrong! I wonder (along with just about everyone else in the Western world) what is next to hit the skids; GM and Ford are likely candidates, along with 50% of banks, 90% of finance companies, property developers and estate agents. And that's before the REAL recession hits, you know, the one with 20% unemployment.

About the only thing America produces nowadays is dollars, and I have to say that the US has been amazingly successful at flogging those dollars to everyone, especially the Middle East and China. I wouldn't want to be the guy that tells them, "Sorry folks, but we've fucked up; they're worthless"

Wasn't it Marx who said that eventually capitalism would collapse and The People would take over the means of production, and so the new communist world would begin? As American citizens wake each day, turn on the news and find out they've just bought another chunk of failed capitalism with their tax dollars and childrens' future earnings, I wonder if they recognise the irony of fighting communism with capitalism, thinking they'd won the race, only to find themselves owners of their very own bankrupt socialist economy!

So maybe George W. and his croneys are the first REAL communists??!!!

British Empire, American Empire, ...........

Its sometimes easy to forget that until the Second World War, the world power was Britain. The old saying,"The sun never sets on the British Empire" was a reference to both the geopraphical spread of the Empire; Hong Kong, Australia, India, South Africa and Canada amongst others, but also the belief that the Empire would go on for ever. It didn't, the War finished it off, and the final ignominy was Churchill going cap in hand to Roosevelt for rescue, and paying for it with the entire British gold reserves. Britain still ended up in a debt which was finally paid off in 2002!

The USA took over the World Power title and has run with it for the last 50 years, sometimes reluctantly, sometimes (like now) more aggressively. But the current debt crisis of the USA, brought on partly by the dual wars of Afganistan and Iraq, have cost too much money. American total liabilities are now said to amount to a staggering $455,000 for every household in America. (see http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/17/MN8Q11OT2M.DTL&tsp=1)
The interest payments alone on that sum cannot be met by the average household, so the debt can only get worse. If these sums are anywhere close to being true, I cannot imagine what the future is for that Country and its population.

But this isn't 'news' for many in banking or government, and by all reasonable measures one would imagine the markets would be in freefall, to get out of dollars before they compete with the Tanzanian currency for bottom place in desirability (even worse because the dollar has further to fall!). Yet the markets are proving remarkably tolerant. What's going on?

I think the foreign holders of dollars are trying to spend them on anything which may hold value; assets, companies, trading names which give access to world markets. In doing this they are buying up America, just like America 'bought' Britain during WW2. More and more US companies will be foreign controlled.

I recall what Britain was like in the 50's and 60's when I was growing up, as industry after industry collapsed for lack of investment and foreign competition. It was a land of poverty, Union strife and a feeling of hopelessness for the have-nots, alieviated in the late 60's by a resurgence led by music and pop culture. In other words, it took 15 to 20 years to start getting our confidence back, and another 10 years for the economy to start to recover some semblance of well-being.

There are many differences between Britain in the 50's and America now, but there are also enough similarities to warrant comparison. If America thinks this is 'just another recession' and things will get better in a couple of years, I'd strongly recommend a broader look at history.

Those shaky first steps......

The bad news is coming thick and fast now, and wherever in the World you look there is plenty of reason to be fearful. But this is just the start. This isn't a recession, or a depression, or an 'adjustment', this is us all taking the first shaky steps to an understanding of a new paradigm.

The new paradigm is a World with oil and other energy priced at realistic prices, where people have to work hard to earn enough for the basics of family life, like food, and have to pay for all the things we now take for granted, like education, health and retirement. For those of us used to high living standards (let's call us 'The West') its starting to hit home that things will never be the same again. This is one recession we won't ever recover from.

But for oil economies, their time has surely come. They can't find things to do with all the money they're 'earning' at the moment. Actually they can - they can buy arms. Missiles, nuclear warheads, latest radar and tracking technologies, they can't get enough of it. And I don't blame them, while Bush is still in the Whitehouse I don't think I'd feel safe if I was sitting on a desert full of oil. Libya saw the light in time, I just hope Iran does likewise!

Meanwhile, if you are a young person in the West hoping to make a living, I'd say, 'Go East, young man (or maybe woman, but less easy); Middle East or Shanghai by preference. That's where the money is still flowing, that's where the opportunities will be for the next 50 years. Don't stay here, it'll get to be too horrible to contemplate.

The transition to the new paradigm will be the next 30 years of newly-powerful economies scrabbling for advantage before the oil runs dry (because power is, after all, the control of energy). They have to build real economies fast, and protect them. Their new economies may be solar based (like Egypt) or trading based (like Dubai) or manufacturing based (like China), but in the end a day will come when they will have to grow food and produce enough energy for their populations, because there is the probability that there isn't going to be enough spare food produced for export for any countries, whatever they're selling.

In fact, many people will starve. There will be resource wars, not just oil and gas, but water, fertile land, maybe even good alternative energy sites. The transition to the New Paradigm will be messy. Now is a good time to start thinking about how you and your family will fit into it. It's usually better to get prepared and jump, rather than wait in the crowd with everyone else for the push.

Does that sound like scaremongering? Do you think I'm over-reacting? Think about this; how long will your finances last if you're made redundant tomorrow? What happens if your bank doesn't give you access to your account? Can you get home on the petrol in your car right now? What if your local supermarket or petrol station closes down, can you walk to other shops? Can your kids walk to school from where you live? If you lose your job, how long can you pay your mortgage? (because you won't sell your house in a hurry). Do you support your parents or other family members? Do you know how to grow your own food? What practical skills do you have? What other real job can you do to earn money, and how much could you earn?

And isn't it time YOU took a reality check?

The Sensible Party?

Today there are fuel protests in London. There's also the possibility of a rebellion in Parliament over the Government's intention to increase taxes on older vehicles. The Government in each case say they cannot afford a reduction in tax revenues from these sources, and in any case they are designed to reduce CO2 emissions. But few people take the 'emissions' argument seriously when, despite many promises and announcements of 'green' policies, this Government has done very little to reduce emissions. They just don't seem to mean it, and the public are justifiably cynical.

The same sort of debate occurs with speeding and traffic control cameras; now widely perceived as a tax-raising device rather than a safety measure. This has been highlighted by last week's news that one council has used cameras to spy for weeks on benefits claimants, and even on dog owners who let their dogs foul!

The one statement we never seem to hear from any government or council is how they are reducing their expenditure, cutting back on regulations, civil servants, laws, taxes, scrapping whole departments or taking less wages or lower benefits for themselves. I think that there are sensible ways to get Government out of our lives. Here's some examples:

How about a flat-rate income tax. Everyone gets £10,000 basic allowance and then pays 20% on the rest. No more allowances, write-offs, offsets, nifty shennanigans or dodges. Then we can get rid of hundreds of tax inspectors and civil servants, and thousands of accountants can go and find a proper job. And I won't have to spend weeks worrying about filling in my tax form.

Then do the same for companies - a flat 20% tax rate on all profit, and no allowances. Same on capital sales, share sales, inheritance. Think of the money we'd all save!

While we're at it, why is VAT 17.5%? Let's make that 20% too, and then we can all work it out more easily. And why tax some fuels (including avaition fuel) at 5%? Why don't we tax all fuel at 20% too? (That's a small reduction for car petrol, by the way). Then we have some consistency in the message about fossil fuels.

Then cars. Let the insurance companies issue tax discs, or better still forget the tax disc and let the insurance companies keep vehicle records (and show the insurance certificate in the windscreen like in Europe). Then half of DVLC can go. If we could find someone to run Driving Licenses (maybe the credit referencing agencies who seem to know everything about everyone already) then the rest of the DVLC can disappear too.

Then there are all those cameras we've paid for, so councils, police and security companies can spy on us. Get rid of them, and all those useless bastards we pay to sit and watch us on their screens, and all those computer companies and programmers who devise new ways of tracking us all (like automatic number plate tracking, face recognition, and even psychological profiling from the way we walk!). It has been demonstrated that cameras don't reduce crime, don't save lives, and do nothing but entertain the purile interests of control freaks. Get rid of them!

Then there's education. I have recently started working in education. Education is failing by whatever measure you'd care to take. Lower achievements, lower basic standards, higher delinquencies, more violence, ....... Whatever we're doing, we're doing it wrong. The Government points to increased expenditure, new initiatives, latest ideas, etc. After 40 years of 'new initiatives' we're further than ever from a polite, reasonable, well-educated youth culture. Here's my thoughts: let's start by teaching basic stuff in the original way. No fancy theories; just rote learning, basic reading skills, alphabet, counting without calculators, no computers in early years. Let's teach craft skills again, like woodwork and metalwork. And yes, let's even use sharp tools and do school trips (often banned in schools because of Health and Safety fears!!). And if we get rid of the reams of paper that we make teachers fill in, we could lose a few thousand 'administrators' and no-one would miss them.

Then there's crime. We now lock up more of our population than almost any other so-called civilised Western economy, and after 12 centuries of Magna Carta, the Dark Ages, Oliver Cromwell, two World Wars and the Cold War, we now have a Prime Minister who feels that current circumstances (what circumstances??) justify locking people up without charge for 42 days. Our children are so scared that they carry knives to school. Now I've heard many reasons and excuses for all this, but here are my thoughts. If you keep people poor and bombard them with images of rich, successful, good-looking, permanently happy people (via television and adverts) they will react in one of three ways; they will become ambitious and work for those things they feel are missing from their lives (i.e. workaholic) or, if they cannot see a legitimate path from where they are and where they want to be, they will cheat and steal to get the rich-people's perceived trappings (i.e. crime) or, they will give up and fall to pieces at their failure (i.e. despression). Sound familiar?

But underlying the education and crime problems is an even more basic problem; if you devise an economy with housing which is SO expensive that both parents have to work to pay the rent, and you put their babies into childcare, and the cost of housing and childcare and taxes means that the parents are condemned to lifelong poverty, then it isn't surprising that the children grow up thinking that parents and society don't care what they do. I think this is really important.

What's the solution? Well, housing costs are the product of shortage because government planning laws restrict the release of land for building. Farmland is between £5-10,000 and acre but development land is £1 million an acre. Simple solution - release 12,000 acres for development each year and collapse the development land price. Allow people (or even HELP people!) to build their own homes. Families would have a sense of achievement, feel secure, bond with their neighbours, and could live with minimal debt on one wage. They'd have time for their children.

Lastly, financial crises. In my 50-odd years I've seen 3 big recessions, but this one is likely to be the worst. But for me, I hope the banks go bust! I mean seriously bust, beyond the Government's ability to rescue. Those bastards have been gambling our money for years, living rich on the proceeds and not taking any of the downside, and the world would be better off without them. Most importantly they no longer fulfil the basic bank function of safeguarding our savings or investing in sensibly-run companies, so they should go.

There needs to be government rules in place to stabilise banking and the markets, and here's a few simple suggestions:
If you want to borrow money, you can only borrow up to 80% of the true cost (personal or company). You have to find the other 20% in real money.
Credit cards have to be repaid at the end of every month, unless a special (regulated) credit agreement is reached.
You can only borrow what you can afford to repay (i.e. a percentage of net income). If someone lets you borrow more than you can afford to repay, they have to write off the loan.
If you buy shares you have to hold them for at least 60 days. This allows investment and stifles speculation.
Banks must hold 20% of their nominal value in reserves. Real money!
National Insurance is paid into a fund, not government coffers. The government pays the money it owes into the fund to start it off.
Companies can't speculate with their pension funds, because they don't belong to them, the money belongs to the pensioners.

Hardly radical ideas you'd think, but all a million miles from where we are right now. But what about all those out-of-work accountants, civil servants, lawyers, bankers, financial advisors and others of their ilk, I hear you say? Well, with more expensive oil and food we'll need lots more farmers. It all sounds a bit Maoist, but I have to say I'd love to go and lean on the farm gate and watch them be 're-trained'!

OK, end of my rant, I'll stop before I think of more things to get off my chest. It already sounds like a political manifesto - how about The Sensible Party!

Yes, I know ther's no chance anyone will listen to all this. But as they say,

"If you keep on doing what you've always done,

you'll always get what you've always got".

Falling off the Ladder

When I was born there were about 3 billion people in the world. Today the figure is approaching 6.8 billion. World population is expected to stabilise at around 9 billion about 2050.

Last year we reached a milestone; 50% of people, 3.4 billion people, now live in cities. That sounds OK until you learn that 1 billion people, one sixth of the world population and close to one-third of all city folk, live in squatter cities without proper sanitation, power or water supply, healthcare, formal education, support services or security of tenure.

The reason people trek from rural subsistence to city opportunity isn't hard to imagine; the possibility of riches, education for kids, access to medical care, and the potential opportunities that only cities can bring. It suits governments because an urban population becomes part of the cash economy and can then be taxed, and they can more easily be provided with services. But also the land they leave behind can be used for export crops to generate much-needed foreign currency which was the basis of World Bank financial advice for the last 40 years.

But as oil and food prices skyrocket, this economic model falls apart. Urban dwellers HAVE to earn wages each day to buy food the next day, and if food costs 80% of your income (as it often does for squatter-residents) then a doubling of food prices means instant starvation. The safety net of the extended family and subistence agriculture has gone.

For the Third World country too the rapidly rising cost of imported fuel and food can no longer be met from basic commodity exports (even though their prices have risen too). Suddenly the country can't import so much grain, or oil to power its basic industries. Even the charities find their income falls as donors retrench, and the money they have left just doesn't buy so much food or feed so many starving.

Added to all this is climate change; floods in America, drought in Australia, etc, etc. The world has lower food reserves today than ever recorded before.

The result of all this is that I don't believe we'll ever see the projected 9 billion people on the Earth. The next few years, starting with this one, will see starvation of millions in poor countries, especially in Third World cities. We'll see child mortality rates rise rapidly, and life expectancy figures fall. We'll see more riots, local warlords and insurgencies as government control falls apart in more and more poor countries. In fact I believe we'll now start to see population fall to 'sustainable' levels for a post-oil world, probably about 2 billion people, and it'll happen over the next 15 or 20 years at most. I don't want to imagine what that is going to look like, and if you don't want to either then stop watching the international news.

Here in the Western economies we'll whinge about how hard life is, how we can no longer afford the foreign holidays or powerful cars. And even here the vulnerable will fall off the bottom of the ladder as cash-strapped support resources dwindle. We'll talk about 'sustainable growth' and ignore the inherent oxymoron, even as we pull up the ladder from poorer countries and close our borders to the refugees. We'll see a rise in right-wing politics, a demand for more police control, better armies, better borders, harsher penalties.

I like to finish posts on an 'up', but this time its difficult. Yes, in the long term the Earth will be better off with fewer people. Yes, we've been living in a fool's paradise of oil wealth for a long time. And yes, a crisis will 'solve' a lot of the environmental problems, eventually. But the next few years could be VERY difficult.

Bon Chance!

Obama and the Poisioned Chalice

I like Obama. He seems to be intelligent and honourable, and he is perhaps the only candidate that can ease the obvious tensions of a multicultural America. I find Hillary too ambitious and McCain too set in his old military ways. But because I like Obama, I hope he doesn't win this election and I hope he doesn't become President of the United States.

Bush will hand the new President an economy in a crisis so deep there will be no recovery for a generation, a war in Iraq which will cost lives and wealth for years to come and a legacy of thousands of crippled vets, the potential of world hunger and famine, catastrophic climate change, and a deep-seated anger from the rest of the world at what America has done to their economies.

I hope that someone else becomes the next President because, however good they are, they are likely to be remembered as the President that couldn't save America from the pain which is coming now. And Obama is still young enough to get a second chance, perhaps when the pain is easing, when the American people have adjusted to the new realities. Then he may stand a chance of success, and of being remembered as a great President. I like Obama.

Buying a Piece of The Great Satan.

As events have unfolded over the last few days I have not been surprised by the collapse of Bear Stearns. I won't be surprised at yet another cut in U.S. interest rates later today, and I won't be surprised at the collapse of Lehman Bros in the next week or so. There is an inevitability in this downward spiral as banks lose confidence in each other. We are days away from seeing a run on retail banks as savers finally read the writing on the wall and grab what they can from the wreckage.

But what does surprise me is the resilience of the stock markets. Resilience? Markets have plunged in recent days and are consistently down for the last 3 months, so what am I talking about? What I don't understand is, who is buying selected stocks in the U.S. and the U.K. and delaying the downward slide? Perhaps its the governments, trying to prop up the system, perhaps its private buyers with more balls than sense. But I'd guess its sovereign wealth funds, buying up chunks of America's international companies while their shares are on their knees. You can see the sense in it; arab oil money needs somewhere to go, Chinese trillions need a future investment vehicle, Russian oil money spent for future political leverage, ...... It makes a lot of sense, the world's coffers are full of dollars which are devaluing daily! And who's going to look too closely at who's buying what, r complain about the credentials of the new owners, when all eyes are elsewhere. Its not so much waiting for the other shoe to fall, as watching a financial tap-dance, with boots on!

Its strange to think that when Bush Junior took power just 8 short years ago, America had balanced finances, a budget surplus, sound money and a reasonably good standing in world affairs. There were the occasional calls for the overthrow of 'The Great Satan' but the USA commanded popular support, and most people could respect its ideals of freedom and liberty, even if it didn't always get it right.

But I don't think future history will be kind to America. The Iraq War was about greed for oil, and that War was paid for by sucking in an estimated $3 TRILLION of the world's savings. More was pulled in to finance a consumer spending boom, and any thoughts of financial or climate responsibility were somehow seen as an assault on 'freedom'. It seems like that wealth has now been destroyed, and this financial slow-motion train wreck is in real danger of destroying the world's banking system.

Make no mistake - we all blame America; the Government for its corrupting links to big oil and big business, the U.S. Army for Abu Graib and Guantanamo, U.S. corporate practices which promote greed as success, and its voters for their political illiteracy. The next few years will see lots of writers and commentators picking over what is happening right now, about ordinary people around the world losing their jobs, homes, saving and pensions, about homelessness and destitution, about hunger, about climate change. And especially about the greed and selfishness that led to this point.

It used to be just Iran that called the USA 'The Great Satan'; but as America deconstructs itself and the pieces are sold off at bargain basement prices, and as the fall-out from this coming world recession destroys so many lives, I suspect we'll all be cursing a once great nation who fell from grace.

The Power of Voodoo.

I haven't blogged for over a week. This isn't because there's nothing to say, its because I've had so many things going around in my head that I couldn't decide which to pick out for comment. The news is coming thick and fast now:

Financial; Northern Rock nationalised, monoline insurers, oil at $110 a barrel, gold sails past $1,000 an ounce, and Bear Sterns rescued by the Fed (the first of many?). Inflated house prices have barely started to fall and already the news has featured 'tent camps' of dispossessed home-owners growing on the outskirts of Los Angeles, and charity food queues in New York. More and more articles about whether this is really Peak Oil. Desperate actions by governments and central banks to give away money, reduce interest rates and devalue their currencies. Confidence is the true bedrock of currency and the fractional banking system, but it is evaporating and the financial avalanche has started.

Climate change; records for warmest, wettest, stormiest, snowiest and driest all being broken almost weekly. Droughts in Australia (7 years!), China, Africa and the USA. This is not just of academic interest as people's lives and livelihoods are being destroyed and families displaced in a desperate effort to save themselves and find a better life in a more benign environment. European intergovernment meetings this week about preventing mass migration (from Africa) and the 'security' issues.

Food crisis; the combination of climate change and drought has decimated crops. Increased population, biofuels, and the spending power of wealthier countries has increased demand (especially from Asia). Grain stocks are at the lowest in living memory. Add the high oil price and we are reversing the Agricultural Revolution of the 1970's and bringing the spectre of world famine to centre stage, not in some future scenario but THIS YEAR!

All of the above is already news and is happening NOW, but let's look at what hasn't happened just yet:
The 1 billion people in India who rely on the annual monsoon rains to feed them. Climate change may switch off the monsoon at any time - it is predicted by most of the climate models, and most of the triggers are now in place.
The collapse of the Chinese food production system because of current drought and desertification - already the subject of emergency meetings of the Chinese government. Another 1 billion people at risk.
The 1 billion people who now live in slums and favelas around major cities, reliant upon a growing economy for the possibility of future survival. They have no 'fallback' position in recession because they have given up their subsistence land, have no savings, social care or health care.

Starvation is about a lack of money to buy food as much as a shortage of food. You and I can afford to pay double the price for a loaf of bread, but a family living on 1 or 2$ a day cannot, and will literally die of malnutrition. It is the wealth of oil that has enabled to world population to double in my lifetime (3billion to 6.5 billion); I don't want to watch if it 'adjusts' itself back down again.

I consider myself to have been incredibly fortunate to have grown up and worked through the wealthiest period of human history, in one of the wealthiest countries in the world. For my children and grand-children the world is about to become very different. This isn't another recession, or cycle, or adjustment, or correction. This is not going to be fixed by lower interest rates, or a new government policy, or an international treaty.

Realpolitik is that Britain has just announced moves towards building the first new coal-fired power station in 20 years, has just opened the new 5th terminal for Heathrow Airport, and is discussing building a new runway. Realpolitik is that all the northern countries that can make a case, have started arguing over who can claim possession of the newly unfrozen Artic, ready for oil and gas exploration. Realpolitik is subsidised production of ethanol so Americans can drive 4X4's (and drive up food prices) while Africans starve. Yes, it IS that simple! The talk about CO2 reductions is just hot air, climate conferences are just talking shops and nothing real is happening. 'Sustainable development' is bullshit, just another excuse for business as usual.

One feature of human society has always been this idea that we can influence events, even when we didn't understand them. Rain dances, magic charms, praying to the gods, it's all just voodoo. That's what is happening right now. World events are now running faster and faster, we are pretending we have some control but we don't. We are in for the ride of our lives.

For some of us, forward looking and self sufficient by nature, perhaps living in a more protected country or environment and with the wealth to prepare, we can improve our chances. Many assume that things will be alright, it's the government's responsibility, or it's all too depressing and they'd really rather not think about it all. Many more simply don't have the opportunity.

They, like their governments, will just have to have faith in the voodoo.

Getting Ready for the Next Economy.

Over the years I have met quite a few people with Trust Fund income. This is where their parents have put aside a lump of money in investments, and the interest is paid monthly as an additional income. If the fund is large enough, the fortunate recipient need never work again.

Whilst its not always easy to spot these people, they do seem to share certain features; a confidence and security from being separated from the grubby aspects of 'making ends meet', the freedom to make choices about what they really want to do with their time, and sometimes a sense of superiority, perhaps bordering on arrogance.

Western economies have benefitted from their own Trust Funds. In the USA and Britain this came mainly from the oil wealth found under the ground, and where there is no domestic oil by the benefit of paying peanuts for a concentrated energy source which can do all the hard work for you (Japan and Germany, for example). Where this wealth is further invested around the World, the returns continue the income stream.

That has now changed forever. The US now imports over 60% of its oil, the UK is barely oil self-sufficient, the price has risen reducing the oil import/production bonus, and the competitors in India and China can combine oil with cheap and plentiful labour to undercut production costs anywhere else.

What's worse, our governments have used the national Trust Fund to underwrite international debt to support a consumer spending spree. Now, the final step, those countries still with oil are so wealthy they don't need to produce anything, and can buy ownership of all those investments assembled by the Western companies and banks. The Trust Fund is disappearing fast!

The consequences are massive. Like most Trust Fund recipients we have been a little arrogant about our perceived superiority. Like most Trust Fund recipients we have been able to largely choose what we do for 'work'; perhaps design fashion clothes or computer games, or make music and videos, or perhaps market useless things to each other. We have had the income to spend years in university studying increasingly esoteric subjects with little practical outcome. We have had the income to pander to our egos with more toys, bigger houses, and world travel (oooh, look at the poor people!).

I met a guy once who'd lost all the income from his Trust Fund (not by his own actions). He had the accent from a fine education, he had the rich friends (who didn't invite him to parties anymore), and he had some great stories. He was trying to find a job and found that almost everything he's learned counted for nothing, he became very depressed and couldn't handle his 'new' reality. Eventually after a desperate period, he swallowed his ego, became a saleman and re-invented his life.

I think we are now training many of our young people for careers which will barely exist in ten or twenty years' time. Research, financial services, marketing, fashion, music and cinema will still exist, but will be a much smaller part of a smaller economy. Farming, manufacturing, natural resources, environment and energy will be a much bigger part of the new economy. The personal skills I'd like to see for my children and grandchildren would include more practical lessons like balancing a personal budget (more useful than statistics, I think), making and fixing things, gardening, farming and animal husbandry. Perhaps also parenting and succesful relationships. I'd also like to see more about co-operation and working with society, instead of this rampant cult of fake individuality.

The future is there, in front of us, but our egos are clouding our eyes. We can force ourselves to see what is coming and make positive steps to deal with what comes next, or we can wait until it smacks us in the face. The time to do something is now, before the last of our inheritance is gone forever.

Bird Flu and Pandemics

Here's a quote from the World Health Organisation website:

'An influenza pandemic is a rare but recurrent event. Three pandemics occurred in the previous century: “Spanish influenza” in 1918, “Asian influenza” in 1957, and “Hong Kong influenza” in 1968. The 1918 pandemic killed an estimated 40–50 million people worldwide. That pandemic, which was exceptional, is considered one of the deadliest disease events in human history. Subsequent pandemics were much milder, with an estimated 2 million deaths in 1957 and 1 million deaths in 1968.'

And,
'Health experts have been monitoring a new and extremely severe influenza virus – the H5N1 strain – for almost eight years. The H5N1 strain first infected humans in Hong Kong in 1997, causing 18 cases, including six deaths. Since mid-2003, this virus has caused the largest and most severe outbreaks in poultry on record. In December 2003, infections in people exposed to sick birds were identified.
Since then, over 100 human cases have been laboratory confirmed in four Asian countries (Cambodia, Indonesia, Thailand, and Viet Nam), and more than half of these people have died.'

Read the rest for more information; http://www.who.int/csr/disease/influenza/pandemic10things/en/

Note that in 1918 the world population was around 1.6 billion, so 50 million dead was just over 3% of the population. But Bird Flu is actually more lethal, currently 60% of infected people die. So far, of course, Bird Flu is just that; an infection which passes between birds and occasionally to humans in close contact with birds. The possible way it may transform itself into a human-to-human disease would be for a population in contact with poultry, perhaps weakened by malnutrition and with poor medical care, to catch human flu and act as a human petri dish for a new, virulent strain to develop. HIV might be an additional factor, especially if the sufferer isn't on HIV medication (which tends to block other viruses).

Another worrying feature is the demographic; H5N1 infects young people, kids and teenagers, not the old people that most flu epidemics infect. With 50% of the World's 6.5 billion population now living in cities, and 1 billion of them living in shanty-towns with poor sanitation and healthcare, the dangers of rapid spread are horrifying. Typically developing-world cities are predominantly young people because of the high birth rates and the typically short lifespan. And lest you consider yourself seperated from the risk, consider that every one of those cities has airports, with flights connecting to somewhere near you every day.

The WHO say it's a matter of 'when' not 'if'. There are great efforts underway to develop a generic flu vaccination, but the probability of producing sufficient in time, or indeed having the political will or resources to vaccinate everyone, are slim. I'm not sure what happens to a 'fortunate' population who has access to the vaccine, but who is able to watch 24 hour World news of countries without such protection.

But perhaps we are now sufficiently inured to watching poverty and starvation that we will watch it as just another reality TV show.

Cities, Megacities, and the Price of Oil.

One-third of the World's 6.5 billion population live on less than $2 a day. One billion live on less than $1 a day. That's just $365 a year, the price of 2 or 3 tankfuls of fuel for your car.

Behind these numbers is a more complex picture. An urban poor person needs that one or two dollars, to buy everything he or she needs; shelter, food, fuel, medicines, clothes, transport, even taxes. But a rural poor person with a piece of land may be much better off (relatively!) in that their land may provide food, perhaps fuel, and shelter. Their monetary income may be additional to their basic needs. This is why land reform is more important than aid to poor countries, why a standpipe or irrigation system is better than encouraging a move to the city.

But governments like cities. People vote in cities, pay taxes, are easier to monitor and control. Its cheaper and easier to provide healthcare and education, businesses have the critical mass to survive. In fact one of the aims of taxation is to force workers into a society which produces surplus, rather than just self-sufficiency which cannot support a hierarchy or ruling class.

However poor city-societies are very vulnerable. They require imports of energy and food to survive, which must be paid for with the profit from commerce. In poorer countries that commerce usually means commodity trading of the country's natural wealth, perhaps some small scale manufacturing and export, and aid. That is the 'profit' that pays for everything else. But it is not, of course, the main activity of the city which may be government administration, tax collecting and redistribution, perhaps aid agencies, education, hospitals, insurance offices, banks, and all the paraphernalia we are familiar with on every city street anywhere in the world.

As energy prices rise 4-fold and food prices double, poorer cities suffer most, because energy and food are their unavoidable imports. But poor self-sufficient people with their own land are largely unaffected - they have the same food supply and use little imported energy. In fact if they have any surplus to sell at market, the increased food prices make them better off.

Therefore we have two results:
Firstly, if we want to aid the people of a poor country, then land reform (dividing land into self-sufficient plots for local private ownership), education about self sufficiency, provision of basic tools, water supply, non-hybrid seeds and harvest storage are best for the people, at least as a first step towards stable and sustainable future development. They are better off kept out of the cities.

Secondly, cities are increasingly vulnerable as food and energy prices rise. Their needs are immediate, there is no slack in the system, no built-in storage to mitigate disaster. If that fuel tanker or food shipment doesn't arrive or can't be paid for, the city is immediately in trouble.

Cheap oil has allowed for cities to grow rapidly, both by subsidising food production, and by subsidising transport of food into the city. Bombay now has a population of 33 million, Karachi (Pakistan) 27 million, Dhakar(Bangladesh) 25 million, Jakarta (Indonesia) 25 million, in total 18 'megacities' with populations exceeding 10 million and a further 450 cities with populations over 1 million. Lagos (Nigeria) has gone from 300,000 in 1950 to 15 million today, and is estimated to reach 25 million by 2025. One billion people, one-sixth of the world's population, now live in shanty towns around big cities.

Here's a quick calculation; supposing each person ate a modest kilo of raw food produce a day, then a city of 20 million would need 20,000 tonnes of food, that's 4,000 trucks of food per day to supply its needs. Assuming a 50 mile (80km) round trip, that's about 20,000 gallons (90,000 litres) of fuel per day. You can see how vulnerable a large city is to fuel or food shortage, and we haven't even touched on fuel for food production, or heating, or cooking, or lights, or public & private transport.

There is a good reason why in 1950, before the era of cheap and abundant oil, there were only 83 cities which exceeded 1 million people (most in relatively wealthy countries), and most of those were surrounded by productive farmland.

As food and fuel prices rise, the World's poor cities are a disaster waiting to happen, and no-one seems to be noticing.

The End of Globalisation?

The concept of globalisation has been touted by the West as a 'Very Good Thing', and what sane man could possibly argue with it. 'Free markets' were up there with other good things like 'Freedom' and 'Democracy', and governments ignored those so-called Luddite arguments from anti-globalisation protesters at G7 meetings around the world. Hippies, dropouts and New-Agers!

Of course it was always a somewhat one-sided version of free markets; we can sell our subsidised agricultural surplus to you, but your food doesn't meet our standards. Or we can buy your basic commodities at the price WE set, and sell our expensive manufactured goods, burgers and cola back to you so you are forever in our debt. Or we'll sell you our high productivity hybrid seed but you must use our pesticides.

That was all going so well until those pesky Chinese and upstart Indians started taking over the world. Suddenly outsourcing and offshoring hit the headlines, as cheap foreign labour (often with technology degrees) could do what we've always done, but for peanuts. It's OK when its cheap plastic toys, not so good when its computers, cars, ships, steel, furniture, clothes, boats, TV's, prescription drugs, software, and pretty much anything else you can think of.

But there's another side to open markets; labour. If you believe in the principle of an open border for goods, shouldn't you also believe in an open market in people and skills? That is a step too far for almost every developed country, unless it is to fulfil an urgent need for doctors or graduate engineers.

Unfortunately, the people in poorer countries don't agree with border controls and are on the move for a better life, much as most Americans' ancestors did two or three short generations ago. There are an estimated 20 million illegal immigrants in the US and an unknown number in Europe; the EU estimates about half a million new ones per year, but its little more than a guess and its been happening for decades. About 10,000 have died in the last 5 years attempting the various sea crossings from north and west Africa.

But the Western electorates are now rebelling. Protectionism is back on the agenda in the US, and border controls are being tightened all the time. Racist attacks are on the increase everywhere, and right wing parties that support protectionism or racist policies have found their star in the ascendant in France, Denmark, Germany, Greece and even Russia. Even the British Prime Minister (of the left-of-centre Labour Party) is talking of 'Britsh jobs for British people'!

There is a third area of free markets; energy. Experts may argue about if and when Peak Oil has or will happen, but the current reality is flat production, greater demand from China and India, and more oil producers holding on to a greater portion of their production for their own use. The same is starting to happen with coal and natural gas. Few would now try to defend the US government version that the Iraq invasion wasn't about capturing the second-largest oil reserve in the world, especially when Alan Greenspan said as much in his memoirs. Venezuela has seized control of its oil fields in a populist move, much against the wishes (and possibly the actions) of the CIA, Exxon and the Bush administration. Russian state companies have taken over foreign-owned contracts and commentators have indicated a hardening political attitude to energy exports. Exporter countries are increasingly holding onto their remaining energy reserves.

All in all, with increasing calls to control offshoring of industry, tighten border controls, protect energy assets, and keep jobs for one's own workers, I think we can expect mainstream politicians to increasingly play the protectionist card. This will mean a quiet reversal of globalisation policies, perhaps even introducing import controls or taxation on cheap imports from Asia. One excuse may be environment; reducing the carbon footprint of goods travelling long distances. Another may be stimulating the economy by subsidising local manufacture with tax breaks or grants.

Protectionism brings out the worst in people and politicians, and policies can be especially cruel to those migrants already in the country (legal or not). The tolerance exhibited when times are good and labour in short supply can quickly disappear with high unemployment and recession. Government crackdowns can split families (one immigrant parent, for example), justify prejudice, racism and even violence.

In the long term it really doesn't matter because the changes will come about anyway. As energy rapidly increases in price, shipping goods around the world will make Asian products less viable. At the same time a devalued dollar, euro and pound will encourage local manufacture again. And a poorer Britain or America with high unemployment will be a lot less attractive as a destination, both for goods and migrants.

In the meantime though, as the song says, 'There may be trouble ahead...........'

Under the Sun.

It is easy to be depressed at the moment. Stock markets in turmoil, house prices falling, oil is said to be past its peak and will continue its rapid rise in price, climate change, war in Iraq..... This isn't esoteric stuff; negative equity, homelessness, unaffordable energy bills, cars we can't afford to run anymore, and increasingly violent weather, all directly impact our personal and family lives.

But now and again its worth taking a step back from the gloom, and to try to see where we might be going next, and how we might smooth our path into a more successful and sustainable future. Perhaps even learn something from our current predicaments.

I'd suggest one way to analyse the trends is to 'follow the money'. But money (both income and capital) comes from energy, so let's 'follow the energy'. The most successful countries will be those with abundant energy; Middle East with oil (for the moment) and all desert states with solar and access to seawater (for desalination), Iceland with geothermal and its nascent hydrogen economy (one of the few places it's viable) and windy places with wind power.

The other energy source is food, so food production (constrained by high fuel and transport costs) will renew interest in traditional farming areas and practices; Eastern Europe and the Russian steppes for example. Traditionally cities grew up adjacent to agricultural production (but we've now built on those areas as cities expanded), or next to ports for food imports (but we've now redeveloped many old ports for yuppy housing!).

The wealth generated by energy sources is already controlling access to investment, so we can also expect a spread of their ideologies, for example Islamic banking, and also culture in fashion and arts. Hopefully not Russian politics!

For the capital already out there in the world, looking for a return, the 'hot' long-term investments will be agricultural land (for both food and energy crops), and solar and wind power. In the longer term, infrastructure projects such as railways and local ports will replace trucking as fuel prices make road transport increasingly unaffordable.

It doesn't take a genius to work out that productive agricultural land, solar and wind energy sites aren't in the places where political power or population resides at the moment. For countries with a shortfall in these energy and food production capabilities there are two options; go to war to gain control of resources, or enter into agreements with energy-rich states. The U.S. is already doing both; war in Iraq and close ties with Saudi. Already many of the USA's long held 'morals' have been compromised in both encounters.

Most of the proposed technological 'fixes' for future energy shortages are a waste of time, they are simply political sops to a scared public. Biofuels and the hydrogen economies DON'T mean 'business as usual'! But Egypt is already building a mega solar power station (which concentrates solar power to generate steam to drive a turbine for electricity) and plans 50 more, sufficient to power all of Europes needs through 3 undersea cables.

That such a scheme is feasible is reassuring, and points to a new energy paradigm. But it is a small step to realise that energy-hungry manufacturing would be better based next to such a power plant, so we can expect solar-powered manufacturing cities and ports growing up in the old cradle of civilisation, Egypt, and Morrocco for example. Already Iceland's biggest business is aluminium smelting, powered by zero-carbon hydro and geothermal power.

Lastly, internet technology. It's important to remember that this is a tool for a job, not production itself. (After all, 'techno' just means 'tool'). The internet smooths the way for distribution of information, but it doesn't 'produce' anything; not food, not energy, not machinery. In many cases it actually diverts effort and labour from real production, such as turning genuine business investment exchanges into gambling markets (with the current crisis as an excellent example of the results).

Personally I'd like to see our remaining fossil fuels invested in future infrastructure; small local ports, energy-efficient manufacturing near energy sources, freight railways, low energy housing, local solar power plants, peer-to-peer power grids. NOT bigger cars, more roads, media superstars, Second Life, stock market gambling, or any other of the madnesses that far too many people use today to replace reality! I believe that if people can see a realistic and positive path to a successful future, perhaps the present won't look quite so bleak.

The Best of the Best.

The advantage humans are said to have over other species is our intelligence, and if we are to solve our problems and survive and thrive in the future, then I suppose it'll be the superiority of our intelligence that'll help us get there.

But let's look at how we use it now. Let's assume that our education systems choose and nurture our most intelligent kids, and they succeed in the system, go on to university and lead intelligent lives which will contribute to the common good. Where do they go and what do they do?

Well the graduate employment system gives some indication. The best of the best may be headhunted by the big accountancy firms, the financial markets, or go into medicine or law (with a fast track into politics). If they're scientists they will find that the big budgets are in defence, and if they want computing then there are software firms to tempt them. Some will go back into the university back door as research and education staff, perpetuating the system. So how does all this valuable and expensively trained talent help the world?

The software firms have been a great way to make personal fortunes in the last 20 years, but if you take out games, social networking and pornography, I'm not sure even the little that's left has been such a major benefit to the wellbeing of the World. Yes, computers are a great and useful tool to do jobs like accounting, modelling climate and collating research, but that's not where the brains and money are directed.

The big science money goes into defence. Defence? We're really talking offensive weapon development to sell to our own governments and around the world, a total of over $2 TRILLION worldwide, that's $307 a year for every man, woman and child on the planet (and one-third of those people earn less than a dollar a day!). Half of that budget, $1 trillion is spent by the USA (that's $3,300 per year per US citizen). New, more sophisticated ways of killing people - is this what we want our best brains doing?

Then there's accountancy and financial services, including economists. In the last few years almost 50% of the UK GDP has come from the City of London financial sector, and London has become the financial capital of the World. These were the geniuses who devised, bought and sold sub-prime debt, CDO's, secondary insurance, hedge funds and private equity funds, and funders of commercial and consumer mortgages creating the housing bubble. These are the people we entrusted our pensions to. Who invested our savings for us. And these 'best brains' didn't see the crash coming; not this one, or the Dot.Com, or in 1989, or .......

Then there's the politicians (many of them lawyers) who run our countries and provide the framework for our lives. Does their leadership inspire confidence? Are we in awe of their intelligence, wisdom and foresight? Are they visionaries who we can trust to lead us into a better future? Or do we recognise them as pandering to the lowest common denominator with populist policies while they get quietly rich (because none of them seem to end up poor. Unless they get caught!). As we watch politicians talk about climate change, probably the biggest threat the human race has ever faced, but do nothing much, can we really expect them to solve our problems? Wasn't it them that led us into this mess?

Medicine and research. I'd have (naively?) thought that, for $3 per child in the developing World, we could afford to innoculate every child by now, ending unecessary deaths and crippled lives from smallpox, tuberculosis, measles, diptheria, polio, rubella and hepatitis B. Or perhaps find cures for diseases like malaria which infects over 500 million people and kills between 1 and 3 million people each year (mostly children, just like yours). But instead the money goes into keeping old richer people alive for a few extra years (that's nearly 50% of the American healthcare spending), or research into genetically modified animals and plants for profit. Today an anouncement of artificial life being created in a laboratory; a great achievement, but what about the lives that are already out there?

I could go on but you get my point. Little of the intelligence in the World is used as an act of creation, of genuine, succesful contribution to the common good. It is our common laziness that makes it easier for us to trust our lives, money, and futures to the hands of 'more intelligent' people; politicians, bankers, lawmakers, scientists, etc.

But if we look at what they really do with our trust, we may be more inclined to take back that respect, overcome our laziness, find out the facts, do more for ourselves and make our own decisions. Why not start today?

At last! Good News!

As stock markets continue their daily plummet, and the blogs are full of 47 flavours of doom, I thought I'd try to cheer you up with some financial news:
1. There is no 'Global Credit Crunch'
2. The World is not about to run out of oil.
3. The real World economy is just fine.

Now at this point you'll probably have snorted in disbelief and chucked this post into the bin, but hear me out.

1. There is no global credit crunch; there is a Western economies credit crunch. There's plenty of money in the world, OPEC countries have seen an increase in oil prices from $20 to $90 in the last couple of years (and they were doing OK at $20 a barrel!) The rest is pure profit (it costs just $5 a barrel to mine Saudi oil!). China and India is swimming in cash because their populations save, and those savings are underpinning their economic expansion. Its true that their stock markets will crash with everyone else's, but that's mostly Western investment money, which has driven Chinese stocks to over 50 times price/earnings ratios. But China holds $1.5 TRILLION of Western cash now, and if the dollar halves in 'value', it's still worth $750 BILLION!

What's happening is a massive transfer of wealth and a shift in belief. No-one wants to support Western wages, prices, debt and ego anymore. This is the first step to the New World Order, a stumble towards a more real world. Bad news for Western economies, but probably good news for the world because emerging economies will spend most of the money on real things, like infrastructure, manufacturing, basic health care, and education. Unlike the West which will simply waste it on newer consumer crap and big cars.

2. There's no oil shortage. Even though we are at Peak Oil, we are still pulling as much oil out of the ground as last year and the year before. All that is happening is that now we'll have to share it with the rest of the world, whereas before we could mine that wealth and hold onto the massive profits, and kid ourselves of Western superiority. This will involve a massive transfer of wealth and that won't be voluntary; stock market crashes and currency devaluations are just the start, asset and property prices will follow, then unemployment will drive down real wages to a more international level (i.e. competitive with the rest of the world). Which leads me on to...

3. The real world economy is just fine. We tend to forget that the real world doesn't work in financial services or software, live in a new apartment in the city, drive a one year old car and shop in Waitrose. The majority of people in the real world work in a small business making something useful, or farming a plot of land, or teaching kids, or working in a hospital; THAT'S the real economy. In the Western economies they've been sold the ego dreams and the credit cards and the debt, and they'll be paying the price in the next few years, but fundamentally their real skills are still needed.

The combined effects will be a massive devaluation of Western economies compared with the rest of the world. Of the various ways that this might happen; stock markets falling, asset prices collapsing, unemployment, and devaluation of currencies, the least painful will be the latter; currency devaluation. If Western currencies fall (principally the US Dollar, the Euro , the Pound and the Yen) then the whole edifice of each Western economy will slide down the hill together, like a town in a big landslip. A few cracks will appear in the streets and buildings, but life within that economy will go on. We won't be buying so much from outside, and we'll have to re-invent local manufacturing and production. But that's a good thing, isn't it?

So fasten your seatbelts and try to look on the bright side, as we are leaving behind the ego economy and moving back into the Real World!

Making Babies.

Here's an amazing thought; every one of your ancestors was successful. Each of them, male and female, survived childhood illnesses and accidents, wars, plagues and famines, at least until they were old enough to meet a partner and make babies which were, in their turn, healthy enough to survive. Let's go further; you can trace this fantastic line of your family's success all the way back to the first humans; 'Adam' and 'Eve' if you wish.

Religions have different versions of when Adam and Eve were around. But scientists have worked out that Adam (called Y-chromosome Adam because of the genetic tracer) is said to be one African man who lived about 60,000 years ago. That's your Great x 2,700 grandad! Sadly he never got to meet Eve (mitochondrial Eve) who came from East Africa, probably Kenya or Ethiopia, 140,000 years ago; say 'Hi' to Great x 7,000 grandma! Every human on this planet contains their DNA. Hello Cousin!

But why stop at humans? After all, humans didn't just 'happen' one day, sitting on a rock and drinking cappucino. In a hunt to find our collective chickens and eggs, we can all trace our succesful ancestors through monkeys and little shrewlike creatures dodging the dinosaurs (150 million years, give or take), all the way back to the first amphibious fish thingy that slid slimily out of the ooze and took a first breath! And before that there was..... OK, maybe we won't go there!

All this leads me to believe that if there IS a meaning to life, it is to have succesful children. Children that will survive childhood, be fit and healthy, find a mate and have succesful children of their own. Ask any parent and they'll tell you some version of the same, they want their child to have the best chance of success, and most benign social structures are geared to this end. But note that this isn't just 'have children', this is to have SUCCESSFUL children. What does this mean?

Well, first of all it means the parents being around long enough to keep them safe, to educate them in the ways of the world, to pass on our hard-won knowledge and experience, and hopefully guide them away from danger. Secondly it means giving them the skills to earn a living, develop as a well-rounded human being and member of a sociable human race. Lastly it means for them to find a suitable mate and for them tohave children of their own. Ideally it means us having the opportunity to help the future generations too; what's the point of living for 3 times longer than our ancestors if we don't do this?

But there's more; successful children live in a broader world. Whilst as individuals we can make more money to give our own children an advantage, pay for extra achievements in schooling or by wealth inheritence, their real opportunities come from the society they live in. Why else would people try so hard to get a passport to wealthier countries, or war-free countries, or just countries with water? Our real safety and opportunity comes from a stable social system, where there is a rule of law, human rights are respected, and people help each other. No man is an island.......

If you agree with the above, then it will be obvious to you, as it is obvious to me, that modern society is failing in these aims. Parenthood has to be a much broader concept than just having babies, 'education' is a much broader concept than 'schooling', marriage is more than a temporary sexual or financial contract between adults, and 'family' is more than just one or two adults earning the wages while their child is 'educated' at school and college.

A successful society cannot be about an unseemly scramble to get richer at the expense of your neighbours; therein lies envy and despair. 'Haves' with lots and 'have-nots' with nothing result in a fractured society of anger and violence. Don't you think our children must be safer in a world of co-operation than in a world of raw competition? Do you let your children out into the streets to play in your neighbourhood?

If you, like me, are guilty of living a modern life; broken relationships and homes, single parent children, disassociated families, and a non-contributory attitude to society, and if you still have time left to repair some of the damage, I'd urge you to do so. For all our futures.

As the saying goes, 'If you're not part of the solution, ............!'

Sophistication and Complexity

When the dot.com boom was in full swing in the late 1990's, many people spoke of a 'new paradigm', a different way of doing business that would redefine economics and the marketplace. I recall a friend was trying to find a way to turn his company into an Internet business (and pick up some of the capital sloshing around looking for something to invest in), and asked my advice. I said I could see the point as a marketing tool, but that his business wasn't ideal - it relied on personal service which didn't translate. This isn't what he wanted to hear and we ended up having an argument about the 'New Economy'. But history later showed us that old-fashioned economics still worked.

Most people today will also argue that our economy today is much more sophisticated; that banking and financial services are inherently robust, that governments won't stand by and watch anything happen that jeopardises the stability of The System. Its a common assumption that complexity is the same as sophistication, but in reality they are opposite.

A pack of cards is stable until you start building a house of cards with it, and the taller and fancier your construction, the more complex and impressive it becomes, the nearer it gets to total collapse. If it looks shaky while you're building it, you can add a few cards to make it more stable, but once it starts to fall there's no way to save it. Complexity is inherently unstable.

Sophistication comes from the Greek word for 'wisdom', and it makes sense that wisdom has to be based on reality. Complexity which is designed to hide reality can't be sophisticated. An example is money itself. The concept of money; a medium of common exchange across place and time, is a sophisticated idea, but only as long as the money has an agreed and stable value. During the Second World War the Third Reich put great efforts into producing fake banknotes to undermine confidence in pounds and dollars. Similarly after the War the Deutchmark suffered hyperinflation as confidence collapsed. The same is happening in Zimbabwe today. Excess printing of money devalues it, until you reach a point where all confidence is gone.

By now we all know that the complexity of financial arrangements devised by banks and insurance companies in the US has hidden the true level of debt in the system, even if as yet we are still unable to assess the full extent of their shennanigans. This in itself has been enough to undermine confidence in currency and sparked a flight to gold and commodities. But we've barely started.

The governments of the US and Europe (and Japan, to a lesser extent) have decided to print money in massive quantities in the hope of re-inflating the bubble economy and delaying the inevitable for another year or two (surely a political rather than an economic imperative). In effect the governments are doing what the Third Reich tried to do, print money, and the result is devaluing the currencies. This is a very dangerous strategy for the US, which relies on foreign countries buying $2 billion a day of American securities - how long will they do so for securities denominated in fast-devaluing dollars?

But there's more. 70% of foreign-held reserves are held in US dollars. Already many governments are trying to divest themselves of this fast-sinking currency without panicking the markets. Sovereign Funds are in the news, buying companies, banks and investment funds at knock-down prices (and gutting the US economy of its ability to produce domestic wealth). But as these dollars are repatriated into the US system, they inflate the economy by their actual quantity and by increasing the speed of the flow of money though the system, both of which add further to the devaluation (i.e. its hugely inflationary). Whichever way you look at it, these combined effects are very serious because they undermine the whole structure of banking and currency based on fiat money.

So what happens next? Expect to see more Sovereign Fund investment in dollar denominated assets which have international value, as dollar deposits are exchanged for anything which may continue to hold real value into the future. International companies, especially those in mining or commodities, or those with expertise or patents (which can easily be transferred offshore). High quality trading names will also draw attention. This will support the dollar and the stock markets for a while, perhaps even a year or two. But as the real heart of these companies is transferred abroad to cheaper and less regulated environments, and the true vulnerability of the fractional banking system becomes more obvious, then the real impact will be felt.

That's when the pack of cards will come tumbling down.

Urban Life and the End of Suburbia

There's a lot of discussion going on at the moment about urban planning in the light of high oil prices, CO2 emmissions and climate change. I've been working recently on innovations in floating-home developments, either houses which can float during flood events, or (my preference) floating houses on permanently flooded low grade land and mudflats. The advantages are that housing development can take place on land which is of little use for either agriculture or development, reducing the pressure on both. In a country (UK) which has a housing shortage, and with the constant need to upgrade housing stock to higher sustainability standards, the Government plan to build 3 million houses here by 2020. In my view these must not be built on farmland; we need it for food and we need it for energy crops.

In most of Europe the public transport system is good; governments invest in it, people use it, and in urban areas the switch from cars will be less painful. For example in Nice (France) a new urban tram system now runs silently through the ancient streets, connecting the poorer social housing on the outskirts (where there is high unemployment) with the tourist centre, beaches and hotels where the work may be found. The cost is 1€ ($1.30) for any trip (with additional discount for bulk tickets), and the same low prices apply to the excellent modern bus service which connect the rest of the city and along the coast to Cannes and Monaco.

But transport cost (both public and private) are rising fast, and the cheap fuel and universal car ownership which created suburban living and 'The Commute' are ending. The increasing costs can be absorbed in a boom but, as we slide towards recession, many people will re-assess their budgets and the costs of their lifestyle choices. Cars are becoming unwelcome at the other end too; in the UK city-centre companies are taxed if they provide car parking spaces for workers, and the London Congestion Charge costs £8 ($16) per day to drive into London. All this is likely to be fatal to the concept of 'suburban' where dormitory towns empty during the daytime, and often lack the basic services that create a community.

With all these changes going on, its a good time for a major review of our future urban structures; transport, housing, land use. I think the decisions start with transport; fast public transport links between identified urban centres (probably trains), and cheap public transport within centres, these are the key. Then let's build large, free car parks next to rail/bus stations on urban ring roads, so drivers have little excuse to enter the city with their cars. Perhaps then we can pedestrianise large areas of city centres, especially around schools, and give cyclists and pedestrains priority over cars on urban streets.

Suburban areas are likely to decline unless we take radical steps to re-focus them as urban centres in their own right. They already have schools and rail stations, but they also need local shops, street markets, community halls, churches. Most of all they need jobs; workshops, offices, small industrial estates, community colleges. Let's revitalise Parish Councils, involve local people in local government, connect the administration of the police to their communities. 'Transition Town' status may help with this.

The excellent 'Transition Towns' initiative in England is an organisation which encourages local communities to reduce their carbon impact and to develop sustainably, recognising that a post Peak Oil world are changing future priorities for development. In Europe and now worldwide, the Eco Villages movement is also having an increasing impact, spreading as far as Tennessee and Australia. Its early days, but this is surely part of the structure of the future town.

These are exciting times if we want them to be. We have an opportunity to repair the damage done by years of neglect of our infrastructure, which contributes to many of the urban and social problems we find ourselves with today. It is the proper role of government to create the framework of rules and investment that enables large changes, and it is the responsibility of local communities to work with in that framework to make their lives better. Each of us can be part of the solution, so let’s get it done.

Nice and warm isn't it?

Last night was the warmest January night on record for London. The forecast today is supposed to be 15°; thats compared to 7° long-term average temperature and I have the heating turned off and the doors are open. Its warmer here than Nice.
But tomorrow its forecast to snow further north and it's 8° cooler just 150km north of here. And we are breaking records with the rainfall already - highest ever for a January (and that's saying something for Britain!).

This is really bad for the Artic because the temperatures here in England are indicative of the currents and weather heading north from the Atlantic. It'll bring forward the thawing of the summer ice, which is when seals breed on the ice (and polar bears hunt to put on the weight they've lost in the winter).

As the saying goes, 'Two swallows don't make a Summer'. But the changes are coming fast and large - much faster than IPCC predictions would suggest.

The Icy Patch.

You are rushing off to work on a frosty morning, and as you drive down the street, the steering goes light in your hands as you lose grip on the morning ice patch. Or you're driving fast down the outside lane in the rain and suddenly you hit the puddle, the waterspray goes up and the steering goes light and you feel your stomach flip as you realise you're out of control. If you're lucky, you pass out of the other side and regain control in moments.

The American economy is like a bus full of people who, driving fast, have hit a long icy patch. The steering has gone light and, whatever they do with the steering wheel, they are sliding towards the crash barrier. As Ben Bernanke and George W. talk about the direction they are going to steer to get back on the road, they've actually lost control (and must know it by now). Cutting interest rates, giving away tax breaks, and handing out free money is just pissing in the wind (Where does all this largesse come from? More printed money?). No, this bus is going to crash.

This icy patch isn't just the sub-prime crisis; that is just the symptom. The problem is the idea that we can spend and spend without any connection to the reality of our finite resource, whether it is your household budget of wages and expenditure, the balance of trade of a country, or the resources of the Earth. Housing bubbles, living on credit cards and printing more money is Mickey Mouse economics, it has all the reality of Second Life.

It doesn't help that there are curves in the road ahead. We can see the oil price curve but it hasn't really happened yet; every previous oil price hike has caused a recession about 12-18 months later, and may well take this particular bus off a cliff. If by some chance the bus slides through that one, bouncing off the barriers, then the climate change hairpin is next; drought already affects 37% of US farmland, floods, storms, hurricanes, snow storms, ..... They all cost the economy in lost business, huge insurance claims, destroyed infrastructure and businesses, and displaced lives.

The coach following behind is the UK economy, and I fear its about to hit the same icy stretch, with much the same consequences. There is one difference; the UK is still a net exporter of North Sea oil, not in huge quantities but it helps our energy budget a little. But as we suffer the wettest January on record and there are 57 flood warnings in force right now, that climate curve is already right ahead.

If there are solutions, they have to be based on an acceptance of reality:
The World is finite, and we can't just dig it up and burn it forever.
Countries have real, underlying economies rooted in the natural world.
Politicians have responsibilities beyond just getting themselves elected and amassing personal fortunes.
Individuals have responsibilities to their society beyond personal consumption and greed.

Don't forget, YOU bought a ticket for this bus, and YOU climbed on board for this trip. As you sit on the bus clutching the handrails, sliding and swerving down the road and bouncing off the barriers, surrounded by screaming people, perhaps you'll have enough time to think about which of YOUR actions (The property bandwagon? The 4X4? The extra loans? The bigger pay rise? The cheap long-distance flights? Those credit cards?) have been your personal contributions to get us all to this point.

The Perfect Future Transport!

As a designer and sometime inventor, I'm always interesed in new and not-so-new technologies which do things differently.

For example I've been following the growth of bio-fuels, especially ethanol and the subsidies given to farmers and Big Oil companies in the USA to kick-start the bio-fuel market. The result has been startling; food prices up between 40 and 90% as corn and wheat are diverted from food production into fueling cars, and developing countries cutting down rainforests for palm-oil plantations. There has to be a better way.

During the Second World War a number of technologies were developed to produce 'faux-petrol', especially in Germany and South Africa, and subsequently with great success in Brazil (using sugarcane waste). The technology converts sugar to alcohol-based fuels which can run a standard engine, but most research now is looking for a way to convert the cellulose or lignin, like common grasses, bushes, stalks, etc, which makes up the mass of the waste from agricultural production, into fuel for cars. This isn't so hard in small quantities in a lab, but scaling it up into a relevant level of mass production will take years.

There were other solutions, of course. Until the 1950's coal fired steam engines thundered along our railways (and still hold some speed-over-distance records in the UK). Earlier versions of this technology burned wood (which is lignin), and I believe in India and Africa some trains burned sugarcane and other agricultural wastes. Of course in the 1930's one of the most highly regarded cars was the Stanley Steamer, a steam powered car with excellent performance and reliability.

Also during the war, petrol rationing in Britain resulted in cars and buses driving around with huge bags in nets on their roofs. These bags contained Town Gas (then produced from coal) which was piped into the engine carburettor through a makeshift valve, remarkably similar to the LPG conversions available for cars today (to run on bottled LPG gas).

Another technology was Gen-gas, where sawdust or wood chippings were put into a kind-of boiler, where the wood was heated (without air) to produce gas, which was then fed into the engine. To see a modern version of this technology, see http://www.inetlink.ca/a31ford/cgcmb/ which has lots of information on home-built gasifiers and fitting them to cars. Just in case!

All this is available to keep our existing cars on the road, but I got to thinking about the whole subject. Lets look at the problem from first principles. What we want is transport. What would the ideal future car look like?

Well, first of all it has to transport people and goods. Usually one person (70% of journeys) but occasionally a family, and perhaps even a pick-up or estate car to shift that old bed to the dump. Given our love of 4X4's and offroad vehicles, it should ideally have similar capabilities, and maybe be a convertible too, for those sunny, globally-warmer future days!

Then our new vehicle has to have zero emissions, not only when its running but also during manufacture. And when it doesn't work any more, ir should be 100% recyclable or re-usable.

In the New Order World it should be very economical and efficient, and ideally use the new fuels based on cellulose. I fact the perfect solution would be to do away with Big Oil, huge refineries making neo-petrol and shipping it across the country to our local petrol station; what we need is local production, perhaps even at home or in the machine itself. Wouldn't it be cool if we could take bio-materials straight from the farm or field and run our car on it, perhaps more like a steam engine or the Gen-gas car mentioned earlier?

Well, I've designed one! I have to say, I'm very proud of my achievement and I think it'll be a great success, perhaps even replacing the ordinary car in just a few years; what we call in the inventing business 'disruptive technology'. In its standard form its a single seater with a small luggage carrier, but it has optional attachments to carry extra people, or to carry freight like a pick-up truck. It runs directly on bio-mass, for example agricultural waste, and can be refueled with minimum infrastructure. Its emissions are 100% recyclable and mostly non-polluting, and its construction uses natural materials which are 100% recyclable. I'd estimate its service life to be about the same or better than a modern car.

I've decided to call it, 'Horse and Cart'; do you think it'll catch on?

Thinking outside the box; energy, oil, money and investment.

Some (many) years ago I took a course in computer programming. One of the first lessons was how to count in binary; that's adding up in 2's rather than 10's, and it took me a while to get my head around the concept, thinking in a new way which was alien to me. I see that other people have the same problem when I try to explain to them about the relationship between money and energy, because it takes a mental leap which twists the way we see things. So here's another attempt to change the way you think about money.

Suppose we wanted a stable currency, one which didn't devalue every year (inflation) and which actually related to something real. We kind-of had one with the Gold Standard (dumped in 1971 in favour of the U.S.dollar), which related all currencies to an ounce of gold. But gold had no intrinsic worth other than its rarity (and as jewellery and some industries) so its value could still vary.

But suppose we priced everything in energy? Say, for example, the 'price of oil' was turned around to 'the price of money'? Suppose the fixed currency was the Kilowatt/hour or the Joule? What would happen to money, inflation, investment, rate of return, consumerism?

Well, first of all money would be fixed internationally to something real. Governments couldn't
get away with boosting GDP by devaluing money (by printing more of it) without people noticing. Inflation couldn't happen so easily, and growth would be dependant on more energy captured and usefully used.

This phase 'usefully used' has interesting connotations. At the moment there is little distinction between using energy to drive around in circles in a big car, or using energy to build a ship dock or railroad, in other words consumerism or capital investment. If the rate of return would be the energy relationship between the investment and the benefit, then the real economy would be detached from the tinseltown farce of monopoly money and consumerism, worthless 'jobs' and valueless 'assets'.

What we call 'investment' today is mostly nothing more than gambling; the Stock Market is supposed to be an investment brokerage, but in reality is just a casino where high rollers gamble other people's paper money, and swap imaginary profits. Its about as real as Second Life!

This Real Economy isn't just 'pie in the sky'. The origin of money was to exchange labour (energy) for goods (produced by labour energy). 'Investment' was traditionally in land, because land grew crops under the sun and produced a profit (food) over and above the labour required to farm it. Land was a solar collector (still, incidentally, one of the most efficient ways of capturing the sun) and captured solar energy was income and profit. The great estates and dynasties of Europe were built on solar power.

If energy underpinned our currency, we'd certainly value the concentrated sources of energy more. One gallon of petrol has the energy content of 2 months hard, physical labour. How crazy is it that we'll use its concentrated energy to pop to the shops for a magazine? Or use high-energy-concentration oil to heat our homes for low-energy-concentration space heating?

An energy-based currency would also change our priorities regarding pollution. If the investment/energy equation related the energy-in to the energy-out, we'd certainly reconsider our farming methods (between 5 and 10 times as much energy-in as we get out), and some oil extraction like tar sands (5 times as much energy-in as we get out), and these type of investment decisions would greatly reduce our impact on the planet. Farming for bio-fuels, for example, currently has a negative energy equation; we'd have to make it more efficient or no-one would invest in it.

In a way this is the world we already have; the Real World. For the last 45 years we've kidded ourselves that our money is, in some way, 'real' and that lots of 'money' is actually worth something rather than some numbers on a computer somewhere, or that our house, pension scheme and investments have some 'real' value. But this paper economy is like the Emperors' new clothes or Second Life; only 'real' so long as most people believe in it.

The Real World exists, even if our grasp of it is sometimes tenuous. It underpins our economy and we try to ignore it at out peril; as now when so-called 'asset' values tumble. Ultimately the Real World is the only one worth investing in and, if half of the troubles on our planet's horizon come to pass, it will be the Real World investments that will still have value; productive land, natural resources, useful commodities, localised production, skilled & educated workforce.

Perhaps as we change from one tumultuous year to another, it's a good time for each of us to look at our life's path, compare it to the Real World, and take a reality check!

The Titanic Effect

I watched a program last night about the Titanic. A group of divers chartered a research vessel and deep submersibles to dive down the two and a half miles to try to discover more detail about how exactly the ship had broken up, when she hit an iceberg on her maiden voyage.

While watching the pictures of the ship now and old newsreel in her glorious heyday, I was struck by the contrast of the magnificant achievement of her creation and the ignominy of her destruction. The confidence of that famous claim of 'unsinkable' ran up (literally) against the reality of nature. The music played and party continued on board as many people believed thay were safe, right up until the water lapped their ankles.

It reminds me of our world today. Western society is based on mining free oil from the ground, and using its almost-free energy to create wealth. But there is increasing real evidence that we have reached and passed 'Peak Oil' (probably in 1985), the point at which oil supplies start to decline worldwide. In other words, we will never again take as much oil out of the ground as we did last year. We've had a good time with this wealth; built our great cities and technologies, and also partied hard. If you are reading this, there's a fair chance you (like me) are one of the richest, best educated and most widely travelled people who has EVER lived! It's hard to take on board that it will ever stop.

But we have recently started to realise the full effects of using that free oil. For every tonne of carbon we take out of the ground, we put almost a tonne of carbon into the atmosphere. About half has been absorbed by oceans and forests, but the rest is accumulating, and changing our climate. We are about to run up against the full potential of nature.

The latest IPCC Report (Intergovernmental Panel on Climate Change) suggests rapid climate change is a real possibility. It's easy to ignore projections for 'the next 100 years', or even 'the next 50 years, especially if its not in your own probable lifetime, but increasingly some scientists are saying 'the next 10 years'. Plenty of people may argue about the evidence, and the likelyhood of disaster. Let's assume it's as likely as the Titanic hitting that iceberg!

Now, one of the 'features' of Titanic was that she carried lifeboats for 1,200 passengers. The problem was she had 2,200 people on board! Priority was given to the first, and then second class passengers and, in the event, only 700 passengers survived, hardly anyone from 'steerage'. Of those that jumped into the water, barely a handful were rescued by the lifeboats which, although mostly half full, had already rowed away.

Similarly a sinking of the Western economies wouldn't hit everyone equally. If we grow crops for fuel for our cars, its Africans who starve, not Brits or Americans. And closer to home, if a storm destroys New Orleans or the UK's West Midlands, the wealthy families have already left in their 4x4's! Its the poor without transport or even insurance who drown, if not physically then financially.

Storm clouds are on the horizon (both climatic and financial). So if you're one of the wealthier few, you may be able to continue to party until you climb into your reserved space in the lifeboat. But if you're one of the majority who are not, I'd suggest you keep an eye on the news, and get your family your own liferaft!

The Magic Dust Farm and the Collapse of America.

Here's a little parable for you:
Once upon a time there was a farmer, his wife and two children, who worked a few acres of land, sold a little surplus on the local weekly market, employed a few farm labourers when they needed them for harvests or fencing, and generally lived a quiet, self sufficient kinda life.

One day the farmer was plowing the field behind his horses when the plough struck something hard. He pulled out a big bronze chest, and on the lid were these words. "Inside this chest is Magic Dust. Sprinkle a little on anything and it will come to life! But use it wisely, and NEVER let it run out!"

So the farmer carefully opened the chest, and inside was full to the brim of glittering black dust. He took a pinch and, looking around for some way to try it, sprinkled it onto the plough. Suddenly the plough came to life and started ploughing the field on its own, the startled horse running ahead trying to get out of the way! The farmer laughed in amazement and shouted, "Stop, stop!" and the horse and plough stopped and waited for him to uncouple the horse. Then he said "Go" and watched in amazement as the plough quickly ploughed the field.

Next time he went to market, the locals were amazed to see the family arrive in a cart with no horse pulling it. They were even more amazed because it was full of spare produce from the farm, which they sold and made lots of money. Over the coming months the farmer brought more and more to market, and wisely used all the money to buy up all the land he could because the plough with a sprinkle of Magic Dust never tired, and in a few years he was very rich. And although he didn't need labourers for his farm any more, he did need workers to help him build a great house, where he would hold wonderful parties with lots of food and drink.

Of course, word soon spread, and the farmer became famous. Great people came to his parties, musicians loved to play there, artists sold him art for his walls, even religious leaders wanted to meet him because God had blessed him with wealth. His children had once thought they would have a life of hard work and drudgery, but now they could be rich and idle, so they would play games all day and party every weekend.

But one day the farmer went, as usual, to the bronze chest, and suddenly realised there was hardly any Magic Dust left! What had happened? Where had it all gone? Now the farmer was a proud man, and now he was used to being world famous, respected for his wisdom. How could he tell the world that he could no longer do the things he was famous for? How could he tell his wife? And what would he say to his children?

He lay awake that night, scared and sweating, but woke in the morning with a new resolve; he would borrow the money he needed! After all, he lived in the biggest house, he owned the biggest farm, everyone knew he was wealthy, every one knew he was good for the money. So he borrowed from this neighbour and that, he mortgaged his house and farm, and the parties continued as before. His wife and children never knew because he just couldn't bring himself to tell them to change their ways.

For a few years it worked. Until one day a neighbour noticed that he couldn't remember the last time the farmer had taken anything to the market. And the big farmhouse hadn't been painted for a while. And the last party hadn't been so grand. So he called for payment of his debt, and the farmer didn't have it. Within the day the neighbours knew, and asked for their money too. Within a week everyone knew the farmer and his family were broke, and so in disgrace for borrowing so much and conning his friends and neighbours. The children had to go out to work, but the family debts were so huge that they would need to work all their lives and still they couldn't pay back all they had borrowed. And the neighbours who had trusted the farmer and lent him money; they lost all their savings and some of those went bust too.

The moral of this story? Mr America, if you've run out of oil, sorry I mean Magic Dust, and you're going broke, tell your friends the truth and stop partying on other people's money!

The Value of Oil

Let me give you a startling bit of information; a gallon of petrol (about 4.5 litres) holds the energy of 2 MONTHS of hard manual labour! Lets just think about that for a moment. If I wanted to dig a ditch, for example, I could buy the labour of an experienced manual ditch-digger for (in the UK) £5.85 (minimum wage) per hour for 37 hours per working week for 8 weeks; total £1,731. 60 pence. Or I could use the energy in a gallon of petrol for under £5.

Lets look at another example, to get a mental picture of what this is all about. Suppose your car were to run out of petrol. There's a bunch of guys standing around and you persuade them to push your car the 30 miles to your home (the distance a gallon of petrol would take you). It would take 40 fit guys ALL DAY to get you home up and down the hills! (and you'd never need worry about the speed cameras!)

Now in reality the petrol only costs about £1 per gallon (the rest is tax), and the petrol burns at about 30% - 40% efficiency, and then there's the investment in the machinery that uses the fuel (it takes 20 BARRELS of oil to make one car!), but this shows the relationship we have with oil and how we take it for granted. Nothing replaces the cheap, concentrated energy of oil. Nothing else will get a plane into the sky. Nothing else will power your chainsaw in the same way.

Let's take this further. Suppose for every £1 gallon we burn, half of it goes to make the machinery that uses it, and only one-third of the remainder is used for 'useful work'. So the cost of the 'work' goes up to 6 x £1 per gallon = £6.
And that is the equivelent to the manual labourer we talked about earlier who costs £1,731.60 for the equivelent work. Does this mean the labourer is only worth 2 pence an hour? Or is the petrol worth 290 times what we currently pay? This is not an idle speculation because this is the reality of investment decisions.

Suppose I have a Chinese factory. I can employ manual workers at $2 a day, or invest in the machinery to automate the work. I'd do a cost analysis; include the cost of the machinery, the interest on the investment, the cost of the fuel to run it, maintenance; etc. Against this is the smaller building and possibly 24 hour operation, and the lack of 'human management' problems. But I'd also take a view on long-term costs; if there is a shortage of labour looming, labour rates will rise. If oil is in short supply, fuel costs could rocket. What to do?

This is the dilemma facing many Indian and Chinese businesses today; oil prices are rocketing, but there are plenty of workers coming in from subsistance farming, looking for a better future. Is it better to invest in skills for the workforce? Or replace them with machinery and take a chance on the future price of oil? Whichever they choose (and in reality it'll be somewhere between), this underlying relationship between labour price and oil price is suddenly back onto the management agenda. It hasn't been before because Western labour rates have been massively higher and oil prices massively lower, so until now the decision was automatic; invest in the machinery and get rid of the workforce.

But this is also about the internationalisation of labour costs. Oil is the same price all over the world, but labour isn't. With international trade the work will go where the cost is lowest, so work requiring cheap labour goes to Asia, and oil-based work (automated factories for example) can be anywhere.

But here's another angle. All that oil is like having 'spare labour', working for us but not consuming anything, the perfect slave labour-force, pulling our cars around and making things for us. The huge benefits we've been enjoying from very cheap oil have allowed Western societies to support a large population in luxury, with most people not needing to do anything 'useful', like making goods or digging ditches; oil has done it all for us. That's all changing. Farming a huge area with 3 guys and several massive machines might make sense when oil is cheap, but as the oil price climbs it becomes cheaper to have more people and less investment in the machinery.

And real wages HAVE to fall as the market changes, either directly or as the economy devalues (such as the current dollar slide). Those useless jobs will go, partly as recession tightens its grip, but also as profitability falls and companies re-assess what's essential to their businesses. More blue collar workers and fewer 'management consultants', more salemen and fewer marketing 'experts' talking unintelligable drivel! The effects are obviously greater in countries where wage costs are highest, so the UK and France are actually more vulnerable than the US (basic labour rate is double!). Japan and Germany are especially vulnerable; export economies with high wages, where all their production is automated with oil-hungry machinery, and all their oil is imported.

All this is directly related to the ratio between international oil price and local labour price. With petrol priced at £1($2) but valued at £6 ($12) a gallon (including investment and efficiency, as above), and an Asian worker at $2 a day, the petrol would have to rise to a net £7.50 ($15) a gallon before the worker is better value. But with the UK worker on £5.85 per hour and if oil was 289 times more expensive than it is today, it would still be possible to make a case for the machine over the manual worker in Britain!

IPCC Climate Change Report: a Triumph of Mr Average.

Imagine I chose 30 of your friends and aquaintances and put them in a room together. Suppose I asked them to discuss, say, 'What's the best kind of education?' (or 'Does God exist?', or 'Which is the best kind of car?') and after a few hours I asked them to type out a statement which was a consensus opinion of their views. What do you think we'd get?

Now suppose I took 300 of the world's top scientists and put them in a room together, and asked them to agree a statement about the latest research on climate change. And suppose in the next room I put 100 politicians, government representatives and civil servants, and anything the scientists tried to put into their consensus statement had to be approved. That's what the latest IPCC Statement on Climate Change is, and if you don't believe me, have a look at http://www.ipcc.ch/ipccreports/index.htm

Let's also remember that however dedicated and brilliant these scientists are, they are also selected; mostly Western educated, they have learned to be successful in a system of university sinecures, peer-revued papers and government research grants. And the political representatives (by their very nature representing the average) have an eye to their voters, national business interests and the avoidance of panic.

You can imagine therefore that the result is a very moderate document. There is no benefit from representing extreme views, but every benefit to presenting a moderate and optimistic scenario where we can all work towards a successful solution. Hand in hand into the sunset!

That all said, the latest IPCC Report makes scary reading. Amongst the well known catalogue of melting ice caps, increased storms, floods, fires, droughts, water shortages and crop failures, are some less well-known results such as massive population shifts and resource wars (oil of course, but also water and food).

And scariest of all, the official recognition by the IPCC that an increasing number of scientists are warning of the possibility of very rapid change, where a wind, jetstream or ocean current may change from one stable pattern to another stable pattern in a moment. Or when temperatures rise sufficiently for massive releases of methane from Siberian frozen tundra or methane clathrates beneath the ocean, tipping us into large and unconsidered temperature change.

So far, the news about global warming has been about growing grapes in England as much as the droughts, floods and forest fires. Reports of an ice-free North West Passage through the artic were quickly followed by an unseemy scramble to establish legal claim to any oil which may lie beneath the Artic's former ice!

There seems to be no doubt that while the IPCC (and many, many concerned people) may talk about solutions, controls, taxes and mitigation, we'll actually take every last drop of oil out of the ground. In fact there is this unspoken assumption in the Report; where else will the energy come from to implement the costly structural changes proposed? There's no doubt to me that we'll burn all the gas, coal, oil shale, and anything else we can get our hands on. There's no doubt that all that fossil carbon will end up as CO2 in the atmosphere sooner or later. This is because the real decisions are made by the wealthy few who intend to stay that way.

Its the poorer 30%, 50% or 80% who will fall off the bottom of the capitalist system. Africans will starve, but so will the poor in America. Western agriculture may still thrive, but the Western countries will be swamped by desperate immigrants. There will still be an oil economy, but there are very few who will afford to be part of it.

Imagine a cartoon character being chased off a cliff; as long as he looks ahead and keep running fast, he stays in the air. But the moment he looks down, he breaks the spell, gravity takes over and he plunges into the gorge. The IPCC Report is warning us that there may be a cliff ahead, and it may be a lot closer than we think. I think we may be over the edge already, we just haven't looked down yet.

Slavery and Greed

A government report today indicates that 12.5% of the workforce in Britain are immigrants. Most are in well paid legal work, but a proportion work for gangmasters and are exploited to do low paid work, or are tricked and sold into prostitution. It's modern slavery.

But what's the difference if they're working here as slaves, or in Asia or Africa? Is it better if we pay for the products of child labour, sub-subsistance wages, extreme working hours and appalling conditions in a foreign country where we can more easily ignore what's going on as we buy our cheap clothes, trainers and coffee? But these particular chickens are coming home to roost.

In our history we had feudal landlords in great castles who controlled access to the land (the capital of the time) and ensured that the level of taxes and lack of rights kept the peasants poor and politically neutered. Today we live in Castle Britain and Castle America, controlling the capital of our time (investment) and working with states that ensure those peasants workers are denied basic rights and conditions.

Many economists say that this is a transitory situation, a step on the road to development, and hold up China and India as modern versions of success; peasant economies where the influx of investment has created an economic boom, just as happened as development spread across Europe or America. Without picking apart the details and flaws (and there are many), I'd say there is one major difference; numbers. Let me give you a bizarre example:

Suppose two cars of equal weight have a head-on crash at 30mph. They both stop at the same spot because they have equal momentum. But suppose a train is going at 30mph and hits a bee? The bee immediately goes in the direction of the train. While a physicist may say the train is slowed imperceptibly by the impact with the bee, you and I both know what happens to the bee!

Suppose you have 2,000 million Asian workers earning $20 a day, and they collide with 50 million blue-collar US workers on $100 a day, and 15 million British workers earning $200 a day? What will happen to Western real wages over time? They will fall, and in proportion to the size of the Asian workforces relative to the Western ones. And without high real wages, what must happen to the high real costs of the bloated Western economies? Everyone here seems to be in 'service' industries; who's actually making anything anymore?

If you think the economies are fundamentally different because of skills, let me enlighten you. China has more English speakers than any other country in the world. India has more IT graduates than Britain has graduates (and Art History is a LOT less useful). Japan went from copying British motorbikes to destroying the industry in 10 short years, and Toyota is now the biggest car manufacturer in the US. In other words; its temporary. Very temporary.

The US is already taking steps to downsize by devaluing the dollar (20% this year!), but the real cost is being borne by the poorest; the 30% who cannot afford health insurance, the 2 million destined to lose their homes in the mortgage fiasco, and the 25% of kids who lack a proper education. As poorer people fall off the bottom of the economy, the future work they do will be competing with the cheapest basic work done elsewhere; agricultural labour, making clothes in factories, assembly work. Britain has been fortunate so far, partly because of long established international trade but, as the housing boom goes into reverse and the credit crunch bites, there are the first signs of trouble to come.

British castles are a potent reminder of 'greed and glory' times in our history. The fact that most of them are in ruins should warn us of a possible, less than glorious future.

Before Crime and Punishment.

In the news today are several items related to crime, and subsequent punishment; an ex-government minister, once imprisoned, is now part of a prison policy advice committee, the debate about whether to lock up terrorist suspects for more than the 28 days currently allowed, young people increasingly turning to alcohol and crime (often with weapons) and the lack of sanction against them, and a judge proposing reduced sentences because of prisons being full to overcrowding. Add to that Britain's high rate of teenage abortions and births, sexually transmitted deseases, and single parenthood. And the rising rate of teenage suicides.

None of these news articles look to the root causes for delinquency, extremism, routine violence, alcohol abuse by young people, sexual excesses and criminal re-offending. I make no claims to have solutions, but I will comment about some obvious facts:
The well known link between crime and poverty.
The link between crime and low educational achievement, restricted opportunity and low aspirations.
The link between poverty and low educational achievement and single parenthood.

Sometimes insights come from odd directions. An educationalist friend recently commented about one difference in our 23 years of friendship; he'd been married to the same woman all that time, whereas I'd had several relationships and was now single again. "Of course," he said, in passing,"you didn't have any male role models to judge yourself against". He was aware that both of my grandfathers had died before I was born, and my father died when I was young. I had no male role models into adulthood, poor example of stable family life (none beyond 14), no experience of those traditional values. I left home at 16 and never really recreated 'home' for more than short periods of my life.

And I see it all around me; boys drinking on the street corner whose 'family' are equally dispossessed youths, immigrant offspring whose lack of cultural identity compounds the dissassociation and whose sanctuary is religious extremism, teenage girls who crave 'love' and get unprotected sex. I'm not suggesting simple solutions that can turn this around, but here's an observation; these youths need advice. They need a mentor they can respect.

So here's a suggestion; a national mentoring scheme, where volunteers act as mentors to young people. This isn't rocket science I know. We all have met adults in our formative years who affect our judgements, open our eyes, suggest opportunities, support our brave decisions, advise us against an unwise course of action, and raise our aspirations. In the past it might be a teacher, or aunt or uncle, or boss. Ideally it was your parents. Both parents. For boys in particular, a father and grandfather.

But we have a new opportunity here, because social networking sites have given us a new tool. The internet, FaceBook, LinkedIn, Ecademy, MySpace, etc, are a new model for technology which could make national (or even international) mentoring really work. Young people already use it as THE source of information and advice. Not just about work, but family life, education, religion, travel, and living a successful life.

So there we have it. A moderated mentoring website where successful, mature (screened)volunteers post 'CV's of their mentoring credentials, and young people can find suitable advice; from how to get into fashion design to what's it like to have a baby. And from how to escape from your local gang, to how to run a successful small business. Ideally to build long term relationships, perhaps even offer help into work placement, gap year employment, first jobs.

So there it is. I'm not the person to do this, I don't have these skills, but if you think its a good idea and know someone who may be interested, pass it on.

A Different Future.

Early this year I spoke to friends about $100 a barrel of oil by Xmas; the polite ones were silent and the others tried to rubbish the idea. Now we're almost there and the Press is full of it. But $100 isn't a magic number; $120, $150 and $200 follow, because demand isn't going to fall and supply is now at its peak - we'll never pull more oil out of the ground than we are doing right now.

Of course, part of this price hike is because the US dollar is collapsing in value, and this will continue because the US Government sees this as a partial way out of financial crisis. Oil is only just reaching its real cost in 1980 (which generated a worldwide recession) and isn't much above the real cost in 1973 (which also caused a recession). The difference is this time, the share of the oil available to Western countries to trade themselves back out of recession is going elsewhere; oil demand in China is now second only to the USA, and growing very, very fast. India isn't far behind.

Another factor is available oil. International supply is the oil which countries want to sell, not what they produce. As their own economies grow they hold onto more of their production; Mexico, Venezuela, Russia, and Iran are all doing this. Political disruption also reduces reliability of supply, destabilising prices and deliveries. This isn't just recession, its structural change. Get used to it.

So much for the talk of 'world markets', what will it mean for you and me? Well, some things are already showing; expensive petrol and diesel, more expensive food, higher transport costs for goods, high prices for plastics and other oil-intensive materials, commodities, energy-intensive products like cement and aluminium. Asset prices will fall, especially so-called assets that rely on wealthy people to buy them; private jets, motor yachts, Cote d'Azur villas, Bugatti Veyrons, maybe even football clubs! Of course we're already experiencing higher energy bills in the home and workplace, and higher commuting costs. Eventually more expensive flights will decimate the cheap-flight business, reversing the recent phenomenon as passenger numbers fall.

Higher costs will moderate our behaviour. We'll choose to live closer to work, use more economical, smaller cars, better insulate our (maybe smaller) homes, take holidays closer to home and fewer of them. Perhaps forgo buying that holiday villa in Spain in favour of a cottage in Cornwall. So there is a good side to expensive oil; whilst governments struggle to find politically acceptable ways to cut CO2 emissions and pollution, high oil prices and recession will do the job for them!

If you want to imagine what it would be like in a world where oil was less fundamental in our lives, you'd need to look back to, say, the 1950's; homes close to the workplace, fewer foreign holidays, smaller and more local shops & businesses, more shipping of goods by sea and rail, international air travel only for the wealthy. But we no longer have that infrastructure; we've redeveloped our docks as Yuppy housing, decimated our railways, filled in canals and built suburbs, out-of-town shopping and workplaces which you need a car to get to!

Of course we aren't turning back the clock. Technological progress hasn't been undone. The mobile phone, computer and internet have revolutionised business, so working from home is already part of our lives and trading internationally doesn't need a flying visit. Social networking keeps us international, even as our physical lives become more parochial.

I find it fascinating to speculate on these changes. They will be implemented by individuals and businesses making their everyday choices, not by government dictat. They will show themselves in purchasing decisions, regional house prices, business investments, and eventually in surveys. It'll be interesting to watch how it all unfolds.

Carbon Trading. The way it ought to be.

A few years ago, in the warm, optimistic aftermath of the 1997 Kyoto Protocol, many of us hoped that much of the developed world (though not the Bush USA or Australia) would move towards a more responsible, carbon-conscious future, and that would surely lead to cuts in CO2 emissions. Perhaps even the recalcitrant USA would eventually join in?

It was not to be. Here we are, ten years later and the USA hasn't joined, there are new polluters; China and India (never part of the original agreement) who show no signs of curbing their fast-growing emissions. The European Carbon Trading market has all but collapsed because national governments have given away too many licences to pollute. Britain, despite many brave words and a few deeds, still has growing CO2 emissions and shows little sign of meeting its Kyoto obligations.

I think we are doing this all wrong. Let me give you an example:
Suppose you go to buy a car. It has all the gizmos and shiny gadgets and seems to do all you want, so you buy it. But then you find out that to pass the emissions standards you have to pay for a 'Pollution Pack'. You'd feel, quite rightly, that its unreasonable that the car company should make a profit on selling a car that doesn't meet the rules, and you'd object to paying again. You'd feel even more aggrieved if the car manufacturer declared massive profits when you knew they weren't meeting their obligations; you'd feel they were just conning their customers.

This is what the oil companies are doing. They are selling us oil products and making huge profits. Then we have to pay carbon taxes on the products we buy (directly or indirectly) because THEIR products pollute! How crazy is that?

Surely the simplest thing in the world would be a carbon tax at source (or as close to source as we can get) for every barrel of oil taken out of the ground. Polluter pays. Then, whatever happens to that oil; fuel for cars, planes, chemicals for agriculture, and however much fuel is used for processing, its all compensated for.

But there is another point here; that carbon tax should be used to plant trees. I have looked at the schemes allowed under the carbon trading criteria and much of it is crap; grants to electric generation schemes that were being built anyway, support for nuclear power, cutting down forest or taking subsistance farms to plant palm oil plantations or jatropha. Many of these are more 'big power' projects from companies who are the problem, not the solution.

Planting trees is the ONLY current technology proven to capture CO2 from the atmosphere. Trees also stabilise local weather systems, reduce water runoff, shelter land from wind, hold moisture in the soil, shelter livestock, enhance biodiversity, and provide genuinely carbon-neutral fuel and building materials for local people. Trees look better than nuclear power stations and we can do it RIGHT NOW!!

The other important aspect is transfer of resources. The big polluters will pay the Carbon Tax (and they can't avoid it). The tax will buy trees (say one tree per ton of CO2) and the cheapest places to pay to plant those trees will be the poorest countries. This means that people in places like Africa will get wages to plant and maintain forests, supporting unskilled and semi skilled labour in rural areas. This is entirely different to paying grants for power stations to government agencies and businesses.

So to sum up; oil companies should pay the Carbon Tax for every barrel they take out of the ground. The money should pay for planting trees. The cheapest places to plant trees are the poorest countries.

If you believe this is a good way to go, tell your friends. Before its all too late.

Capitalism Rules, OK?

Capitalism has many faults, but there is an 'Economic Darwinism' in action which makes it the dominant system. Saying it should be different is like saying, 'People should be nicer to each other'.

But capitalism may lose its attractions if it fully incorporated the 'externals' which are often ignored or discounted; environmental degradation, mining of earth resources and calling it 'production' (like oil), and the exploitation of third-world workers in near slavery conditions.
Powerful capitalist countries are too willing to be the worlds' bullies and thieves. As individuals who willingly benefit from being members of the strongest gang, its easy for us to ignore the costs to the world's poor when we buy coffee or a cheap pair of trainers, or ignore their requests for truly open markets.

But this form of capitalism is heading off a cliff. Population explosion against diminishing natural resources is the 'elephant in the room' that no-one wants to talk about, and Peak Oil coupled with booming demand spells the end of of an economy based on cheap products, transport and food.

I'm still a fan of Schumacher's 'Small is Beautiful' philosophy: smaller communities, local production and decision-making, stability and a longer term view. This can still be within a national or supra-national framework of law and governance, but with less power and more control over the decision-makers.

But so long as the major world companies, the 'Big Money', wields financial and political power nothing will change voluntarily. We should always remember; they work for profits and their agenda does not support people, or society, of wellbeing, except as a means to profit. It is therefore worth examining their motives carefully, to watch for the divergence of interests. They will hold sway until oil shortages cripple their global reach and hobble their profits. A solar, sustainable world is a more modest world, more local and community based. Perhaps then we'll see a move towards a society which has people, families and communities at the centre.

Al Gore and the Nobel Peace Prize.

While the debate may rage in the USA, most Europeans accept the reality of global warming in a way which too many Americans still see as radical or contraversial. Al Gore has done more than any other American to convince the current generation of the USA (and the world) to take this issue as seriously as it deserves. Despite mealy-mouthed critics who suggest that if you can't be perfect you should put your head above the parapet, I'm glad that he had the courage to use his public profile to promote the education of the US public against the interests of the Bush administration and the well-financed interests of the oil companies and big business.

Regarding the court case in the UK, the judge has stated that 9 statements in his film, 'An Inconvenient Truth' are different to the current consensus as published by the International Panel on Climate Change, and so notes stating the current IPCC position will be attached to the 'Study Notes'. However the film is based on information which is 2-3 years old and the science is fast-moving, and the IPCC predictions have been consistently 'behind the curve', partly because their pronouncements have been politically filtered.

But the most important thing is that the film IS being distributed to every school in the UK as an educational resource on the environment.

An Inconvenient Truth is a commercial success, Al Gore is an Oscar winner and Nobel Peace Prize winner; all this from a man who could (should?) have also been President, yet STILL he's criticised and demeaned; and I thought Americans celebrated individual achievement?

It's OK, we've saved the Stock Market! Or have we?

Commentators are talking about the stock market recovery, that the central banks have acted to 'save' the financial system. To do this the central banks have increased liquidity; that is, pumped money into the system and reduced interest rates to keep credit cheap. This is printing money.

It does seem strange to me that people aren't realising; if something has a 'real' value, like a barrel of oil or a company share (if it's based upon real assets), and a country is printing lots more paper money like dollars, then you'll need to pay more of those dollars for the item of value. In other words oil and shares go up in price. But that's devaluation of money, not a stock market recovery!

The other thing is, when oil becomes more expensive there can be two reasons;
1/. the cost of extraction has gone up, i.e. its harder to get the stuff out of the ground and to the customer.
2/. the demand has risen or the supply has fallen, i.e. shortage.

In the first case the extra revenue goes to pay for the cost of production and is distributed through the workforce of the production companies. In the second case the revenue is extra pure profit which accrues to the countries with oil in the ground; OPEC etc. That's what is happening now, hence investment by Saudi Arabia in the US economy accounts for 7% of US GDP.

While China and India may become the new superpowers, oil producers are the new world investors. Its worth watching where they put their money. And in which currencies. If more OPEC countries decide to price their barrels of oil in Euros or Yuan, watch what will happen to the dollar!

Private and Public; modern versions of society.

The average citizen in Britain is said to be photographed by video surveillance cameras about 300 times a day (much more in London and other major cities). Anti-terrorist legislation allows for monitoring of email and telephone traffic, and mobile phones can be tracked (even by parents). The justification for much of this big-brother state has been crime and terrorism prevention.
Yet antisocial behaviour is increasing and the surveillance seems to have done little to stop terrorism - it simply provides footage for the networks after the event.
The amazing thing is; people seem to accept this intrusion without complaint, the media largely aquiese, and police demands for 'more' seem to be agreed without debate. People seem to feel safer if they are being watched over.
In fact, people like us who participate in networking sites like LinkedIn and Facebook go much further; we are willingly displaying our professional and private lives for all to see.My personal view is that 100 years ago we'd have probably lived in a small community where our neighbours, family and friends would have known everything about us, and that would have constrained our behaviour, for both good and ill. The internet provides an opportunity for a new version; a global village of interconnectivity where we can volunteer to live open lives. Such a display of all aspects of our lives, professional and personal, is perhaps the true meaning of 'integrity', which is often considered to mean honesty, but really means 'to be integral' or 'to be whole'. So I find myself both uncomfortable with the dishonesty of state installation of public surveillance, yet a willing part of the open networking movement. Confusing!

The Real Currency

The dollar's value is sliding, prices of commodities and oil are rising fast, houses are devaluing, the news is full of talk of a credit squeeze, .... What's going on?

Energy (oil, gas, coal, etc) is the true currency, the arbitor of value, because it is the unit of work. Once 'value' was labour; the work a man or horse could do. Today that labour is the work a machine can do; digging a hole, making something, transporting goods or people. Energy isn't just the key to modern civilisation, its also the underlying valuation of everything we produce, or do, or build. We represent this with dollars or euros or yen, but its just a representation of the real currency; energy.

Inflation is just a devaluation of money. The more money that's printed, the greater the devaluation. But if ALL currencies devalue, the effects are partly hidden from currency markets and only show up as increasing oil and commodity prices.

But at the moment there's a wider perspective; investment transfer. If you are an OPEC country and you have oil revenues to spend, where would you choose to invest it; the US or Europe where returns are under 1% and the dollar value is declining, or Asia with 8% growth and an undervalued currency? Hence a recent Bank of China issue of $3.9 bn which was 40 times oversubscribed!

But now China is holding $1.3 trillion of US debt - what can it do with it? It can't buy dollar assets, they'll fall. It can only buy oil and commodities, or $ shares in international companies. The latter may keep the stock markets humming for a while as China buys big company's expertise, distribution networks and management - the 'family silver' of American international trade. But then it will gut the US economy of its revenue-generating ability, and what will be left?

Interesting times!

Should all cars be fitted with speed limiters?

Like I've said elsewhere in this blog; I like vehicles. I've been involved in them all my life, collected them, enjoyed everything from sports cars and motorbikes, 4X4's and 6x6's in the mountains, motorhomes, scooters..... You name it, I've probably enjoyed playing with it! I speak as someone who has a long history with performance cars, and currently own 6 vehicles, including two which have a purported top speed of 150 mph (240kph).

But why aren't cars fitted with speed limiters?Most countries have national speed limits on roads; 70mph in Britain, 60mph in most of the US, 130kph(about 80mph) in much of Europe. Most cars will do over 100mph (160kph) and many will do much more. Why? If ALL cars (except perhaps police cars) were fitted with speed limiters we'd reduce accidents, save fuel, save on police time, save the cost of many speed cameras, save on warning signs, stop accidents where kids steal a car and 'see how fast it'll go'. Can anyone think of any reason why we shouldn't fit every vehicle with a speed limiter?

But for a long time we've lived (and largely ignored) another social cost; accidents. Most fatal accidents are between vehicles and pedestrians or cyclists. If a child is hit by a car at 30mph it has a 70% chance of survival. If it is hit at 40mph it has a 70% chance of being killed. Cars use 30% less fuel at 50mph than at 70mph. Is male ego a good enough reason to compensate for the above?

The technology is simple enough, like the cruise controls fitted to many cars. The speed limiter could be set so it allows, say 100 seconds of acceleration to overtake. Speeds can be automatically reset at borders (although many European countries would just harmonise speed limits - they're almost the same anyway except for Germany).

And the speed limiter could be sufficiently sophisticated that radio beacons would automatically reduce the vehicle speed in built-up areas to, say, 30mph, which would massively reduce both signage and accidents. So trackdays would still be possible.

It could be introduced to old cars first when they get their annual inspection, but you fit it to, say 3 years worth each time. Within 5 years all cars would be included. Anyone overriding the system would be fined or banned.

But in principle, why should any car do 130mph? Its just ego! Great fun for the owner, until some kids steal it and kill people!!

Sadly, I think the golden days are over. Fast cars on the road are turning from a selfish pleasure to an antisocial pariah. Time to update our attitudes.

Innovation, Design and Nature.

I'm a designer, and I for a long time I've been interested in the design process, and the difference between innovative design and development. In particular I've looked at design in nature and any lessons it has for us as designers. Here are some thoughts:

All life on earth, all animals and plants, are energy creatures. Their particular features have developed from the proverbial primordial slime to process energy in the most efficient way. The plants, for example, 'eat' sunlight (the only true input) and use that energy to fix common elements into materials. More creatures capture that energy and materials by eating plants or other animals. When we talk of an 'ecological niche' we are really talking about an energy niche - the most concentrated net energy source available at that time to that life form.

Darwinian theory provides the rest of the answers; life develops to make best use of the net energy source, successful life reproduces and less successful life forms are more likely to perish.
In nature's case, most of design is development, with occasional genetic errors or mutations providing the spurt of innovation which is subsequently tested by the market - life itself. In many ways the deliberate act of our technical design does the same thing. Successful designs are purchased by the market, so they are then developed over many years; cars, houses, boats, computers, software, etc. Ocasionally a truly innovative design comes along (the mutant???) and its tested by the market.

But the mutant design has a built-in disadvantage; it has to emerge fully formed, it has no time to develop or adapt, it must immediately compete with designs that have been around for generations. In technical design we look for sufficient investment in new concepts to allow for some development (incubation?) to meet the market in a competitive form. Nature doesn't usually provide that chance, except on isolated islands where competition is scarce and food resources are available. Technically we can provide the same thing for innovation; providing resources for innovative ideas to be developed to a point where they can compete in the marketplace.

In nature, if the energy source (food) is abundant, all populations boom. For humans too, mining reserves of oil, coal and wood, making them into food (the Agricultural Revolution) has meant the human population has doubled in our lifetime. Similarly a wealthy economic environment provides for a boom in both design and development, hence the resources dedicated to computers, software, communications, etc. As an aside, its interesting to me that this investment is in a technology which largely satisfies non-productive (in the sense of net energy production) needs, and seems more to do with Meme Theory than advancement of any human survival or development strategy.

So I believe nature is a good example of simple and efficient design, with many correlations to our design process.

I'm not sure I like being a designer of mutants though!

Let's get back to Sound Economics.

There is an underlying reality which investors forget and financial markets choose to ignore; there is only so much real 'profit' to go around! The more intermediaries that take a commission and the more the cake is sliced, the less everyone receives for their investment.

The economic dangers come with leverage - effectively increasing money supply. We all know that increasing the money supply devalues real money, but with world markets interconnected its possible that ALL currencies can devalue simultaneously, i.e. commodities and energy prices rocket. Like now!

The answer? Limit leverage. Insist that EVERYTHING requires a 20% cash deposit; house, car, shares, buying a company. Let's get back to sound economics.

Houses, Shares and Sub-Prime Woes

While plenty of commentators have discussed the intricacies of the current stock market falls, I think its time to look at the broader picture.

Stocks are falling because of the end of cheap credit. I'd say both shares and property are about 30% overvalued against long term trends, affordability (for property) and P/E ratios. But that doesn't mean that prices can't fall beyond that, then eventually recover to that level.

However capital follows profits. On the world stage there is a shift to investment in Asian markets, where returns are higher and there is the potential for currency revaluation, rather than Western economies with low real growth rates and possible long term devaluation. This creates a broader credit crunch for western countries, holding down asset values.

Also oil; western economies produce profits based upon the price and their current usage of oil. If oil prices rise or supplies reduce, their economies contract, i.e. they are very vulnerable to the oil market. Asian economies are growing on the basis of much lower current oil use and cheap labour, so while higher oil prices may impact their future growth, their current production levels can be easily maintained. In short, they're not so vulnerable.

There's also timing; a property and share price crash takes about 7-10 years to work through the system (i.e. prices get back to where they were before the crash, in real terms). Oil analysts suggest that oil shortages (where the rising demand curve cuts through the static or falling oil production curve) will hit in 3 to 5 years time and prices could rise rapidly. This would be in the middle of the recession, extending it into something deeper and longer.

In short, I wouldn't bet on your pension being there for you in the next few years!

The Future of Government - who holds the power?

Power is about the control of resources. Until about 1900 resources meant agricultural land and its surplus production, so colonization and wars were to grab more land. After 1900 resources started to include coal and industrial production, so the 1st and 2nd World Wars were for land, plus industry and coal. Since 1950 several wars have been for the above plus oil.

Traditional governments and country boundaries go together because the boundaries largely identified most of the resources under the government’s direct control. Trade deals for resources with other countries are fluid and less reliable (like Russian gas to Europe, and Middle East or Venezuelan oil to the U.S.)

Governments control this ‘power’ on behalf of citizens and rule by consent. The difference between democracy and dictatorship is just the timescale of feedback between the population and the government. Consent is given when the government creates the conditions for the majority of the population to lead a safe and contented life (a benevolent dictatorship can do this as well as a democracy). If a substantial element in that society is dissatisfied, it may move to change the government, or it may break away (independence, civil war or emigration). Often such a movement may be focused around ethnic, religious or other cultural bonds but is ultimately about contentment and control of resources.

So I think the question divides into two parts:
1/. If the world continues as now, what happens next for governments?

In this case, governments lose control as globalization cuts the bonds that tie citizens to single systems. The internet (which speeds up comments about each system’s flaws and benefits) is a driving force in this and even the Chinese government has to take notice of popular criticism about its governance. Also traditional country boundaries are less relevant as globalization, economic migration and internalization of resources spread access to ‘power’ more evenly around the world.

As yet there are no global governance models which have been found to work – we are in uncharted territory. The nearest equivalent in the ‘Old’ world was the Roman Catholic Church which ruled by religious (ethical?) edict over royal families and governments. Modern attempts at world governance tend to follow a similarly ethical raison d’etre; war crimes, crime, poverty, health, corruption, pollution, climate change, are all presented as ethical issues but often come up against government self interest; i.e. retention of power and control. Negotiation between countries, and citizen majority pressure seem the only ways forward until individual governments have less real power than currently.

2/.What happens if climate change and oil depletion rattle the world’s economic stability?

This is a different playing field, and overrides all other considerations because oil is the driving force for globalization. Without cheap and plentiful oil, individuals in both rich, Westernised countries and emerging nations will become poorer, increasingly dissatisfied and will blame their governments for it.

Economic migrations are already a problem on the Mexican border and across the Mediterranean; imagine how much worse it could be in an increasingly impoverished world, for both the migrants and the receiving populations, and the potential for conflict between them. Governments have been proven powerless against such an onslaught.

Climate change makes this much worse. In the last few weeks Britain and northern Europe have had summer floods, and southern Europe has had heat waves. Hundreds have died, thousands have been displaced. The result has decimated many crops, and prices for basic foods have already doubled. Similarly Bangladesh has had flooding which has displaced 21 million people, destroying their homes and crops. The Sahel is in drought and hopeful African migrants to Europe line the North African shoreline or set out in ill-equipped small boats.

So in short, events will quickly overtake moves towards globalization of governance, countries will become more inward looking and defensive of territory and resources, populations will become more dissatisfied with their leadership and this may lead to fragmentation as wealthy countries come to terms with a poorer lifestyle. Ethnic conflicts will increase and be seen as a reason for division.

Solutions? National governments can redistribute wealth and mitigate disasters so citizens feel more secure, avoid politicising migration and poverty, closely monitor internal issues and deal with them before they become divisive. Mostly they must create a common purpose amongst their citizens, an inclusive common goal.

Internationally, the internet is perhaps the most powerful tool for future world citizens. The 100$ laptop and cheap internet connectivity are, I think, the ultimate democracy.

China and India. Whats next?

China and India are in the news. Suddenly it seems they have moved from distant poor places to centre stage. How has this happened so fast?

The first question to ask is; where does wealth and growth come from? Growth comes from the accumulation of resources. This can be over generations of agricultural surplus supporting an increasing population and an excess workforce, or by stealing other people's resources (war and invasion, slavery), or by finding an energy source to mine, like coal and oil.

British imperialism is a good example of the whole cycle; rural surplus, invasion and control of 25% of the population of the world (the British Empire), slavery in the colonies, and mining coal from 1880 to 1970 and then North Sea oil. America has used primarily slavery and then oil to create its wealth, and is now using war to try to source more oil.

But Japan created a different model, that of a purely trading entity. It started with cheap low level manufacturing and quickly reinvested in education and technology, selling its products cheaply into established western markets. This resulted in a massive transfer of wealth to Japan as payment for goods and investment in Japanese companies. Japan also benefitted from cheap oil imports to fuel its manufacturing. It is this model that both India and China seek to emulate.

However this model has a 'lifespan' which may limit its effectiveness. Firstly it will draw wealth from the West as Japan did, but into a much bigger investment market. This will undermine western economies and devalue their currencies, reducing their buying power for Chinese and Indian goods.
Secondly the west has 'satiation'. Every family has a tv, microwave, car, phone, etc. The sales are for a newer one, but that is elastic; in a recession we hold things for longer. The market has limited demand.
Thirdly environment. Conspicuous consumption is ending, we are downsizing our personal consulption of goods. There are opportunities for new technologies, but wasteful throw-away products will be replaced by longer-life products.

The advantage both India and China have is an internal market of millions, all of who want all of the basics; not just the phone, microwave and TV, but also from plastic buckets to houses - everything! This means that as each country gets wealthier, the western market will become a smaller part of THEIR market.

This will have different effects on India and China, because of different policies currently being pursued. In India the highly educated minority are creating the wealth in call centres and computer technology, leaving behind the majority in rural poverty.This is a new generation of the caste system which is historically part of Indian culture. It may limit the size of the internal market for India in the future.
China is different. Its communist period has created a more equal system of education and expectation, and its wealth creation is from manufacturing which can take up unskilled rural workers as they arrive in the cities. Therefore the future wealth will be more evenly spread in the population, creating a bigger internal market (potentially one-third of the world population).

Another factor is oil; its is not so cheap now and demand will drive it higher, which will eventually limit growth for India which has low reserves. China has coal in huge quantities which will underpin its energy needs for hundreds of years. So, in my view, India will boom but run out of steam, China will boom and be the next world power, and much more quickly than most people now believe.

Cars and more cars.......

I like cars. I always have. That's why as a 16 year old I left home in Wales to be an apprentice with Ford Motor Co in East London, but by then I'd already had two cars and was on my third!

At the moment I'm down to just 7 vehicles, but most of them have to go. Now, that sounds like a rich bloke talking about his collection, but it isn't that way at all. There are two reasons for the numbers; firstly I live mostly in France and its hard to buy French registered 'interesting' cars (French burocracy makes it too tough to import them) so I've ended up with British registered cars which have to come back to England to get sold, and secondly, I don't like 'compromise cars' - sporty 4x4 buses just don't do it for me!

So, I have a practical 4x4 for work and the mountains and carrying the dog around (Mitsubishi Pajero Evolution, great car!), a sporty car for when I feel like scaring myself and making my hands sweat (Mitsubishi GTO, terrifying in a satisfying kinda way), and a Winnebago motorhome for wandering around Europe in some comfort. Sensible so far, I'm sure you'll agree.

Then I have my old Pajero (the one before the Evo) up for sale. Its been great, I've had it 6 years and done 180,000km (about 115,000miles) in it with nothing more than servicing and tyres. Just brought it back to UK and its up for sale now. Wanna buy it? I'm also selling my daughter's Nissan Micra - she wants the money to go to New York.

I also have an old Alfa Romeo Guilia; a little boxy saloon which was one of my first cars (when I was 19) and has been 'Under Restoration' for years. Its finally on the road and legal, but may sell that too. There are limits, after all.

But then a couple of years ago I was browsing internet sites (no, not THAT kind of site!) and came across a vehicle called a Pinzgauer 712 - 6 wheel drive! Now I'd more-or-less seen one before; as a kid I was a fan of Thunderbirds Are Go and I'd swear they had one! So I had to buy one, didn't I? But its not that simple (is it ever?). They're made for the military, cost a fortune new and few hit the private market. To see why, look at this:

http://www.youtube.com/watch?v=JOKIeaqtPzY

Then I found out that the Swiss Army were selling some; 400 to be precise! So on the appointed day I drove up to an army base in picture-postcard Switzerland for the most amazing auction; hundreds of vehicles from modern cars and vans to 1930's 4x4 trucks and camouflage motorcycles. Hundreds of people came from all over the world, but there's no doubt that most of them were there to grab a Pinzgauer. One guy had even flown in from Brazil!

I met a few guys from England who seemed to be buying loads (I think they finally bought 8 or 9) so I waited for them to finish before I started bidding, and towards the end of the day I bought my beauty (as 'is in the eye of.....) for about 7,000 euros (around $10,000).

Of course it proved just about impossible to register it in France, so in the end I registered it in England. I've now had it for two years and I LOVE it! I use it as a basic camper in the Provence Alps; with 6 wheel drive it'll go places that I don't have the courage to go! Sometimes its hard not to just 'see what it will do' and point it at a ditch or river or wall, but it usually just trundles over it like it wasn't there. My next Pinzgauer plans are for a month's trip to northern Norway and Finland in the Spring. Watch this space!

And by then I should be down to just 4 vehicles. Much more sensible!

The End of the World?

I like to read. Trouble is, I read books and articles about things like climate change, economics, politics, oil, military...... Depressing stuff really. Inevitably it rubs off and its easy to become disheartened. The end of the world is nigh!

But I've been here before. In the early 1970's the world was a dangerous place. Russia and America faced-off with nuclear arsenals that, they boasted, could kill off the world three times over. Game Theory had led us to the idea of Mutually Assured Destruction (the very aptly named 'MAD'), a system which meant that if either side pressed the button, the other would automatically do the same.

I recall a cartoon of the time. Two eskimos are sitting on the ice, fishing through a fishing hole. They look up as two ICBM (Inter Continental Ballistic Missiles) pass each other in opposite directions overhead, one marked USSR (Russia), the other USA. One eskimo says to the other, 'Perhaps we should have watched the news this morning'.

Some news items weren't reassuring. A flight of ducks in the artic set off radar early-warning systems, and looked sufficiently like an attack to scramble nuclear warhead laden U.S. bombers. Scientists warned that a nuclear war would create a nuclear winter that could destroy all life of earth. 'Hawks' on both sides proposed First Strike - pressing the button unexpectedly in the hope of catching the other side off-guard.

I was in my early 20's then, and read everything I could get my hands on (not as easy as it sounds, pre-internet, no 'Freedom of Information Act, the UK and US governments were suppressing a lot of information). I decided the only possibility for myself and my young family, if the worst happened, was escape to sea and so I bought a 65' motor-sailing boat with room for all of us (it was also a good reason to own a lovely boat!), kept it stocked up with fuel and water, and we moved on board for a while.

Over time, the threat receded. Reagan re-opened arms reduction negotiations, Russia couldn't afford to keep up the Arms Race and imploded, the Doves ruled. Everyone breathed a sigh of relief (except perhaps the military and arms peddlars!).

So here we are again. This time its Global Warming, Overpopulation and the End of Oil. The statisics ARE staggering. Here's a quote from a BBC website;

'Every day we wait, another 30,000 children needlessly die; between 100-150 plant and animal species become extinct; 70,000 hectares of rainforest is destroyed and another 150m tonnes of CO2 is released into the atmosphere'.

In my lifetime the population of the world has doubled! I find that staggering. 3 billion people in 1954, 6.5 billion in 2004. Projected 9 billion people by 2050, when my daughters will be about my age. How can we feed them, when we can't feed the one-third of the people now?

Of course, we can't. As usual, wealthy people will eat, poor people will die. There'll just be more of them poor, and more of them dying. Most of us will live our lives bemoaning their fate but ignoring their plight. What can we do?

But this time its all going to affect us too. We live on oil. Its not just about cars and heating oil, its about our food, clothing, consumer goods, computers. Imagine how a city survives, how much oil is needed to build it, make it habitable, move people and food in and take rubbish out. Half the world's population now live in cities, many of them in cold or hot places which need power just to make them habitable.

But lets not worry too much. We'll muddle through, like we did with The Cold War. Climate change will happen - its too late to change it much, and no-one seems ready to change their lifestyle anyway. Population will continue to explode until something else kills off a few million poor people. Oil will be in short supply very soon (many commentators suggest in the next 2 or 3 years) and the price will rocket. But many people can adapt, bike to work, turn down the heating. We'll get by.

There's reputedly an old Chinese curse, 'May you live in Interesting Times!' Well, we certainly do!! I'm glad I've been around to witness the richest period of human history ever. Its been a great ride, and I hope to be around to see some of what happens next. Meanwhile, maybe its time to start looking at the boat ads........

Sitting in the sun, thinking......

I could easily think that I'm too old for this. Blogging is the latest idea of a long list of 'latest' ideas that I've taken on board and, like most bloggers, I find it suits me very well. As someone who has many thoughts which don't seem to be shared by most of the chattering classes, having a forum to express them will be good for me, and hopefully entertaining for any readers who stumble across this.

So, what will it all be about? Who am I? Why may it be interesting? Who the hell is Donal?

Donal is an inventor, designer, loner, father, traveller, commentator on the world, deeply flawed human being. I'm still looking for a meaning-of-life that suits me and, until I find one, I'll try to amuse myself with projects, cars and boats, occasional friends and companions, going to places that other people have been before, and waiting for things that never happen.

So, here is someone's story. Once upon a time............