AAA battery…

In Uncategorized on August 7, 2011 at 13:08

We should remain Eveready.

So it would seem that the superpower has taken a kicking and run out of charge and is now considered AA+ by credit agency Standard & Poor.  Not that they are always right.   For example they did back the sub-prime market and many on the hill are annoyed as they reckon S&P have got their sums wrong.  Well that`s as maybe, however it is obvious to the silent masses that if you stack the global debt against the cost of fighting terrorism (for oil) and the crisis (what crisis? to miss-quote Callaghan) in the euro zone then it is an absolute given.   A dead cert, a hole in the bucket, the nose on your face.  As obvious as George Michael , George Melly, George Formby  and Rod Stewarts Georgie boy all being gay.  If you don`t re-charge or change your batteries you`ll run out of power sooner or later.  Investment in the right areas at the right time and for the right reasons is so important in a global economy where the ripple effect quickly bites yer bum.

Such is the intensity of the situation that maybe they should go `Rickrolling` as advised by Brian Deese one of the US national economic council managers who looks after the White House twitter feed.  Things were getting a little heated, a little boring and a little heavy and someone suggested it wasn`t entertaining enough.  The outcome was Rick Ashley’s 1987 hit(!) `Never gonna give you up` was to become flavour of the week.  His `You Tube` video has had 36 million hits over it time on the web!  Mr. Astley was not available for comment on the social phenomena.

Mis-management, a lack of commercial governance and acceptance of things at face value have now crippled the west.  And to my book, that`s what has been going on and this is echoed in what Ross Norman of gold dealers Sharps Pixley says in today`s Independent on Sunday – That politicians and economists don`t know how to handle the crisis.  How could they?  Most of them have never lived through such an experience.   Well they had better learn fast as China are not looking too happy given they are hanging out for 1.3 trillion.  Money they could well do with being re-paid if they are to continue to buy resources from Australia and keep that booming economy booming.

I said in an earlier blog – `back to the future` and it could just be that I`m not far off!  As the west loses its grip the Far East resurgence continues apace, and never more so than in Australia.  Its vast natural resources of coal, gas, Iron and gold make for rich pickings and China wants a fair whack of it! 

This is all well and good however the ripple effect is that it attracts a surge of transient labour and throws out of kilter some of life`s natural checks & balances.  For example costs in Perth are rising at a rate which outstrips the rest of the Au and the poor little town of Karratha is feeling the brunt of the mad, the bad and the downright dangerous as hoards of transient workers descend on it.  Losers are the environment, the local town’s people and any peace & tranquillity which might have existed.  Winners are the alcohol companies, the drug dealers and no doubt the new & emerging market in bordellos, takeaway meals and massage parlours.   Of course the lawyers will make a mint out of it from the mining & gas companies who are managing the work, and the unions will make a mint out of the employed labour.  And of course the lawyers will make a second killing supporting the claims and counter claims of the employing companies who end up wrangling over the contractual terms as they bust through the budget.  And then of course the lawyers and legal types will win for a third time when they offer their services to the employees who get arrested for all manner of misdemeanours they have created through boredom or the inspiration of booze & drugs!

The more religious amongst us might identify an ecumenical flock gathering and maybe (for the right & proper reasons I`m sure!) make a few bob out of trying to convince and convert the masses into attending masses – and before that spiritual alter, find a divine intervention which just might alter them a la Blues brothers style?  I doubt it, but I don`t doubt they`ll make some money out of the chaos, all hidden behind the name of the lord, or whomever.  I`m sure the over worked yet well paid police in that region of our global village would welcome the restoration of some peaceful order, and shout amen to that brother!

The real goal must be to erode the disparity which exists as a direct result of the winner and losers in the global game.  The `Global Shift` (P. Dicken) recognises this and tracks the ever changing contours of the world economy and how events affect the movement of goods and people across the globe, and how this affects the consumption of goods & services.  The old geographies of production, distribution and work are continually disrupted and therefore new geographies are always being created – nothing stays the same for long these days, and certainly nothing lasts forever.  The ability to integrate these ever changing swings is the devils own game.  The outcome of the input must therefore be taken into account by the governments and large corporations who effect these global changes in composition.  These complex changes are created as a direct result of the movement they create as they scurrying around the various emerging markets and continents searching for new sources of business and revenue.  But that`s for another day… (Ironic!)

Quick point to note might be, that they call it a global economy or a global village, but if you take a closer look at where these organisations are based and the locations in which they operate it becomes fairly obvious it`s not really that global!  It is known in some quarters as tri-polar.  East Asia, Europe & North America!!

Talking of Asia.  It is well worth taking a few  moments to remember the dark work of theoretical physicist Dr J. Robert Oppenheimer who brought us the atomic bomb and in doing so remarked that it brought to mind Bhagavad Gita `now I am become death, and destroyer of worlds`.  Yup, it is the anniversary of the fruition of the so called `Manhattan project` which on 6th August 1945 saw Hiroshima forever etched on our conscience by the dropping of the bomb known as `little boy` from a Boeing B29 Super fortress killing 100`000+, followed by `fat boy` on 9th August which took the lives of 80`000+ of our Japanese friends in Nagasaki.  If they had listened to Harry S. Trueman and surrendered under the Potsdam Declaration things might have been so different and the course of history, I suspect, very different indeed.  They surrendered on 15th August six days after Nagasaki!  The dust which blew some 11 miles into the air settled some time later – and in many ways probably still is!

Dust settling!  It will be while until the fall out from last week`s £148bn loss on the market s wiping 10% of FTSE 100 index is resolved and balance re-addressed.  This will push up the cost of borrowing which will lead thee and me to not borrow which will stall the recovery and round & round we go.  `What goes around comes around`…which I think is called or in line with Keynes paradox of thrift, and is part of modern Keynesian economics.  Put broadly it is governments using money supply to correct imperfections within the market.

Paradox of Thrift’ is similar to a rebound effect in that individual savings are good for the economy but if everybody starts hoarding, then consumption and therefore demand in the economy will decrease.  This could give rise to a recessionary effect reducing an individual`s ability to save and therefore close the loop.

This can occur in particular if the banks are not themselves using the savings to increase their loan base and stimulate growth, and is possibly where we are now.  How do you like them apples, Mr. Big Apple?  We shall see.  We – and it is the global we – are not out of the woods by a long stretch.

Not a good day for the alliance in Afghanistan as `team 6` , seven Afghan troops and a dog get taken down by a man with a grenade gun.  All that technology and a man in sandals with an old weapon does for them, and the Obama`s withdrawal policy, by downing a Chinook – not the luckiest helicopter on the market.  Not being flippant about such a tragedy but its timing and content is abysmal for NATO and progress in general.

Tiger tiger burning bright (Kipling)?  Well not really. Tiger Woods is currently 38th and far from out of the woods, unlike Westwood who can clearly use a wood and a mind doctor (Rob Rotella) to his advantage, he`s doing ok as he climbs out of his two year rut.  Maybe Tiger is a metaphor for the USA?  Well they do say golf represents life, and they are both well under par at the moment and neither appears to be able to see the wood or the trees.

Maybe they should all chase after an MBA like I`m doing (up 8%).  Seems that the 100 year old degree is more popular than ever – which will no doubt have the net effect of de-valuing it!  Damn you all!!  Still it`s good to see I`m doing something that is globally recognised as being the benchmark of greatness – ahem!  It is an inverse affect apparently.  When the economy is down business degrees go up.  The economy affects us all in many different ways and events such as the Exxon Valdez environmental disaster back in 1989 can impact upon how business operates which then impacts upon us all.

Especially Enron, (who were responsible for Exxon at this time!)  who were headed up by Jeff Skilling a former Harvard graduate who`s now in jail for fraud.  I take little comfort from this knowledge! Apparently though I`m in good company, Roman`s daughter, Anna Abramovich, is doing a business degree.  Chelsea cha cha cha!!

And finally, since August is the month of Ramadan I thought we`d finish with TIME magazine`s top ten things we might not all know:

  • It`s not just no eating it`s also no drinking
  • In general `dates` are the first thing eaten followed by sweet juice named `Jallab`
  • Some people name their sons Ramadan
  • There is a loophole if you are sick, old or breast feeding
  • Sunnies & Shi`ites break their fast at different times dependent upon prayer times or the last ray of sun
  • The date changes each year
  • The TV rating go up but on the flip side productivity slumps (which is not good news for business especially after the Arab spring
  • Fasting pre-dates Islam (Mohammad was born AD.570).  The Hebrew bible mentions fasting prior to this time
  • Ramadan is not great for diets as people can tend to binge on an additional meal known as `Iftar` which is heavy in carbs
  • Ramadan is a good time for charities as people tend to give more during this religious month


So there you have it, that`s me for this week and I might be missing for the next couple depending on hang over`s!! 

And by the way, the technological breakthrough that brought us the first atomic bomb was in 1930, just twelve months after the great Wall Street crash of 1929, so we`d best keep our heads down!


TTFN Globalagogogo…



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