by Alex Evans | Nov 6, 2010 | Climate and resource scarcity, North America
Here’s the NYT’s Dealbook column on 11 October:
If you care at all about the future of the world’s food supply, you care — whether you know it or not — about Saskatchewan. A consortium of state-backed Chinese companies and financiers may make a takeover offer for Potash Corp. that rivals a $38.6 billion hostile bid from BHP Billiton, and that prospect has lawmakers in Washington, regulators in Canada and bankers on Wall Street all talking.
The politically charged subtext is this: Do we really want the Chinese to control the company that has the largest capacity to produce fertilizer? If that reminds you of 2005, when the China National Offshore Oil Company, or Cnooc, sought to buy Unocal, until an outcry from Congress stopped it, you would be right.
And the FT two days ago:
Canada has rejected BHP Billiton’s $39bn bid for PotashCorp, dealing a potentially fatal blow to the Australian miner’s 10-week pursuit of the Saskatchewan-based fertiliser producer.
Tony Clement, Canada’s industry minister, said: “At this time, I am not satisfied that the proposed transaction is likely to be of net benefit to Canada [as required by Ottawa’s foreign investment law].”
Mr Clement did not elaborate on the reasons for his decision, but said they would be given at the end of the 30 days. He added: “Canada has a long-standing reputation for welcoming foreign investment. The government of Canada remains committed to maintaining an open climate for investment.”
by Alex Evans | Nov 6, 2010 | Economics and development, Global system, North America
Wondering what the implications are of QE2 (as in Quantiative Easing mark II, not Her Majesty) in the US – whereby the Fed will buy up long-dated government bonds of maybe up to a trillion dollars or so?
Well, Marty Feldstein at Harvard University reckons that it’s “a dangerous gamble with only a small potential upside benefit and substantial risks of creating asset bubbles that could destabilise the global economy”. He notes that expectation of the policy has already lowered long-term interest rates, depressed the dollar and upped equity and commodity prices – and that these consequences create real risks:
Like all bubbles, these exaggerated increases can rapidly reverse when interest rates return to normal levels. The greatest danger will then be to leveraged investors, including individuals who bought these assets with borrowed money and banks that hold long-term securities. These risks should be clear after the recent crisis driven by the bursting of asset price bubbles. Although the specific asset prices that are now rising are different from last time, the possibility of damaging declines when bubbles burst is worryingly similar.
But John Michael Greer has a different concern about the US “printing money to pay its bills”:
There may be an example somewhere in the long history of finance when a country has done this without facing catastrophic economic consequences in the fairly near term, but I don’t happen to know of one. Once a country starts covering its debts by way of the printing press, the collapse of its currency and its economy is pretty much a foregone conclusion. The exact way in which the consequences come due varies from case to case; the hyperinflation made famous by Weimar Germany and, more recently, Zimbabwe is only one of the options, and there are good reasons to think that this isn’t the most likely outcome just at the moment.
My own guess, for what it’s worth, is that we’re headed into a state of affairs that might as well be called hyperstagflation: the economy and money supply both contract, but the demand for dollars drops faster than the supply as holders of dollar-denominated assets scramble to cash in their dollars for anything that might preserve a fraction of their paper value. As in the stagflation of the Seventies, but much more drastically, prices go up while employment goes down until the economy shudders to a halt.
Q.v. the excellent When Money Dies: The Nightmare of the Weimar Hyper-Inflation
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by Alex Evans | Nov 4, 2010 | What we're watching
[youtube]http://www.youtube.com/watch?v=nMvARy0lBLE[/youtube]
by Alex Evans | Nov 4, 2010 | Climate and resource scarcity, Influence and networks
The details, courtesy of Good:
Debating climate change can get exhausting, especially when so much of the science is settled. So Nigel Leck, a software developer, created a Twitter chatbot, AI_AGW, to do it for him.
Every five minutes, AI_AGW searches Twitter for tweets that feature common, debunked arguments against man-made climate change. It then responds with its own Tweet, countering the faulty argument in question, and providing a link to published information from groups like NASA that backs up its case.
When someone recently tweeted that “First the Earth goes through #GlobalWarming and #GlobalCooling. Its a natural climatic cycle and contributes to natural selection.” Leck’s chatbot responded “Ancient natural cycles r irrelevant 4 attributing recent global warming 2 humans” and referenced a detailed discussion of the differences between current global warming and natural heat variations.
Sounds entertaining, though I doubt it’ll have much effect on the sceptics (what the hell does?). More fundamentally, I have a few hesitations about bots doing auto-responses to what people say on Twitter – no-one minds when it’s just the climate trolls getting spammed, but how would you feel if every time you tweeted about, say, UK politics, your @ replies filled up with fluff from the political parties?
