Population Growth – Really a Problem?
I was asked my opinion about David Suzuki’s warning about overpopulation growth. It was brilliantly done and mathematically it is correct. His math explanation is applicable to the Sovereign Debt Crisis and how it will become a Phase Transition. Nevertheless, when applied to anything there is a self-defeating check and balance that I am surprised he ignores. From the Japanese perspective, this is highly focused because there is a tiny island with limited resources. However, this is the theory behind the environmentalists. This idea began with Thomas Robert Malthus and what they fail to see is the interconnect of natural consequences.
The system is inherently balanced that is part of the cycle ensuring nothing will go only in one direction. We will expand population and then create periods of war that sharply reduce population growth and then there is disease. Viruses mutate and are constantly evolving to defeat what we can do to stop them. There huge plagues that wiped out the USA population in the mid 1800s and after World War I. Even in finance, we come up with schemes like Bitcoin, and you can bet government will attack it when it deprives them of enough tax revenue. This is the way everything works.
Even if Suzuki is correct and we reach that point of maximum entropy, we will have a collapse in society from starvation and that will then provide the counter-balance. What he seems to be arguing for is against the laws of physics to reach a perfect state of balance indefinitely. That will never happen and is actually impossible for everything fluctuates within a cycle from light and sound to birth rates.
Negative Interests Rates Comes in Flavours
QUESTION: Marty, thanks so much for explaining the difference between lowering rates trying to deflect capital flows as in Denmark and Switzerland. I understand the difference now and why you say the ECB is the first to apply this in a Keynesian stimulus context. Is this a complete modern development post-depression?
Cheers;
YJK
ANSWER: The first attempt to lower rates to deflect capital inflows as Denmark and Switzerland have done was 1927 when there was a secret meeting and the US lowered its rates hoping to deflect the capital inflows to prevent the financial crisis that happened anyhow in 1931.
It was 4.3 years later (half-cycle) when the Sovereign Debt Crisis hit in 1931 after this attempt to lower rates back then. If we add 4.3 years to this intervention, that will bring us into 2018.
You will notice that 2018 is a Panic Cycle and we have 2017 as a sharp rise in volatility. Interesting how the same timing repeats.
They Are Tapping Phones in New Zealand – Is this really Terrorists or Taxes?
A reader from New Zealand contributed this:
COMMENT: Martin
Happening in New Zealand
SR
Telcos reveal over 70 secret phone taps for govt
5:00 AM Saturday Jun 7, 2014
Vodafone says there were 34 NZ warrants for phone interceptions by four Govt agencies in 2013. Photo / Thinkstock
Phone companies have revealed the extent of Government agency spying on their networks, with more than 70 secret wire taps last year in New Zealand alone.
Mobile giant Vodafone last night published its first global Law Enforcement Disclosure Report, showing phone taps were being used in 29 countries in which it operates to listen in to conversations on its networks.
In New Zealand, the company reported 34 warrants for interception of phones by four Government agencies in 2013.
The police, the Security Intelligence Service, the Serious Fraud Office and Customs all gained access to Vodafone customers’ communications last year, it said.
However, New Zealand’s figure does not include those concerning national security.
Vodafone said it was breaking its silence on government surveillance in order to “push back” against the increasingly widespread use of phone and broadband networks to spy on citizens.
The secret wires had been connected directly to its network and those of other telecoms groups, Vodafone said, allowing agencies to listen to or record live conversations and, in certain cases, track the whereabouts of a customer.
Following the report, Telecom issued a short statement to APNZ saying it complied with the Telecommunications (Interception Capability and Security) Act 2013.
“We can confirm we have received 40 requests over the last year,” a spokesman said.
A single warrant could target hundreds of individuals and devices, however several warrants could be targeted at just one person.
New Zealand is among six countries with laws which either oblige telecoms operators to install ‘direct access pipes’, or allows governments to do so.
In its report Vodafone said: “In every country in which we operate, we have to abide by the laws of those countries which require us to disclose information about our customers to law enforcement agencies or other government authorities, or to block or restrict access to certain services.
“Refusal to comply with a country’s laws is not an option.”
Vodafone called for all direct-access pipes to be disconnected, and for the laws that make them legal to be amended.
The demands for data were “overwhelmingly related to communications metadata”, Vodafone said, adding that it also included demands for customer details, such as name, physical address and services subscribed.
A spokesman for the Intelligence Service said it did not comment on intelligence or security matters.
However, its annual report said 34 domestic intelligence warrants were in force during the year ending June 30, 2013.
Government Communications Security Bureau’s figures for the same period show a total of 11 interception warrants and 26 access authorisations were in force.
There were 84 interception device warrants granted for the police in the 2012-13 year.
Calls to the Serious Fraud Office and Customs were not returned.
- APNZ
Pegs & Negative Rates – Do They Differ from ECB
What the ECB has done is the first time a central bank has gone NEGATIVE to try to force people to spend. There have been NEGATIVE interest rates in a quasi situation with attempts to support a currency peg. This has been the case in Denmark. We also saw rates collapse in Switzerland when the Swiss were defending against the influx of capital fleeing from the Euro and also adopted a peg.
Defending a currency peg is a different style NEGATIVE rate of interest targeted at deflecting capital flows. It differs from the ECB approach that is not concerned with the currency and deflecting capital inflows, but attempting to stimulate the economy by forcing the people to spend.
Indeed, the ultimate NEGATIVE interest rate when attempting to deflect capital flows is a devaluation – plain haircut of assets. Roosevelt did that in 1933 by devaluing the dollar relative to gold from the $20 area to $35. That is the same attempt at lowering rates even into negative territory to defend against capital inflows in Denmark and Switzerland.
State Street Corp. and Bank of New York Mellon Corp., two of the world’s biggest “custody” banks, were charging clients for Danish krone deposits. During the 1960s, Swiss banks were considered to be the safest and as such you paid a fee to have an account – that too was a form of NEGATIVE interest rate. We should expect banks to start charging fees to deposit cash in combination with lower deposit rates on interest. We already have historical spreads between deposit rates and lending rates. US banks will pay you virtually nothing right now.
- 0.20% 91 days
- 0.20% 11 months
- 0.35% 13 months
- 0.30% 20 months
- 0.40% 3 years
- 0.60% 4 years
- 0.85% 5 years
- 1.25% 7 years
These rates when compared with the inflation rate are already NEGATIVE. Your purchasing power will be less than what they pay you when the time is up. Car loans, fully secured, are running 2.24%. When interest rates were 8%, the car loan rate would then be 44.8% at this level of spread. I have never seen the spread between bid and ask so wide.
This entire idea of NEGATIVE interest rates is intended to reduce the incentive to save or park money in the currency or bank. What they should do is directly regulate the lending rate and lower the spreads. That would stimulate more so than hurting the elderly and savers. As always, their approach is more akin to fining your wife because you did not take out the trash.