Here is Martin’s latest offering at PrudentBear.com.  Subject matter: the highly political global oil economy, following on rather neatly from James’ antennae-twitching piece on hyper-inflation.

Since the recent drop in oil prices, the market appears convinced that we have seen the last of their stratospheric rise – the NYMEX oil futures contract remains under $70 per barrel for the next 2 years, for example. However the free market economists’ theory that supply will always arrive to meet demand increases is pretty shaky in the oil sector, and the market looks likely to be wrong.

In conventional analysis, the surge in demand from the emergence of India and China and a strong economy in the West is believed to be temporary.  Prices may be boosted by an unexpected event such as Hurricane Katrina or the Nigerian oil disturbances, but a sustained period of high prices such as in 2005-06 produces additional sources of oil supply. These take time to appear but eventually satisfy demand and drive prices down to their equilibrium level, currently thought to be in the $25-30 per barrel range.

This analysis may be wrong for a number of reasons.  On the demand side, this is not an ordinary economic boom, but has been “turbocharged” in China and India by the Internet’s one-off enabling of outsourcing to those two countries.  Thus the world’s economic growth is heavily concentrated in China and India, particularly China, rather than in the countries of the West and Japan in which oil demand is relatively saturated. 

The Chinese automobile market has grown from 3.2 million vehicles in 2002 to 7 million in 2006, and is now the second largest automobile market in the world, just ahead of Japan, 40% of the size of the U.S. market and 10% of the world market. Naturally the buyers of these vehicles are going to drive them, since gasoline remains a relatively small part of the overall purchase and maintenance cost of an automobile. Hence gasoline demand in China is rising not by the country’s 10% overall economic growth, let alone by the lesser figure that might be expected as usage becomes more efficient, but by something fairly close to the 22% per annum growth rate of Chinese automobile ownership. 

While Chinese gasoline usage still represents a modest share of world oil demand, if even a small part of the oil market is growing structurally by 22% per annum, the normal effect of higher prices in encouraging conservation and reducing consumption may be swamped. Indeed, that appears to be the case; in 2005 world oil demand increased by 1.2 million barrels per day, in spite of an average oil price around 40% higher than in 2004. Almost all that increase in demand was outside the OECD group of wealthy countries.

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CNN Money reports that:

“The typical double-income family is worse off financially than ever, a study released Thursday said, warning that few Americans have saved enough to brace for financial setbacks.”

The New York Times reports that:

“The burden of housing costs in nearly every part of the country grew sharply from 2000 to 2005, according to new Census Bureau data being made public today. The numbers vividly illustrate the impact, often distributed unevenly, of the crushing combination of escalating real estate prices and largely stagnant incomes.”

Slate reports that:

“The dollar’s decline against the euro shows no sign of ending. Clearly, currency traders have made a long-term judgment about the relative value of the currencies of the Old and New Worlds. That sounds bad enough. But now there are signs that we’re losing some of the most devoted fans of the greenback: drug dealers, Russian oligarchs, and black-market traffickers of all kinds.”

These are the key ingredients contributing to my question, posed July 16: Hyperinflation within a year? wherein I proposed it is quite reasonable to expect to see the first signs of hyperinflation within a year due to the in-rushing of dollars no longer considered the world’s reserve currency.  Against this pressure the Fed will not have the option of raising interest rates to the levels it did in the early 80’s since there is no wealth of well-educated, dutiful white kids whose fertility can be destroyed in order to pay for the insane policies that place urbanization above the people as organic reality.  (There was no significant “baby boom echo”—merely open borders.)  Then the game of borrow-now and pay back in future inflated currency, in-turn driving inflation faster upward, that was getting out of hand just before the Volker interest spike, will face no containing powers.

“There are different kinds of truths for different kinds of people. There are truths appropriate for children; truths that are appropriate for students; truths that are appropriate for educated adults; and truths that are appropriate for highly educated adults, and the notion that there should be one set of truths available to everyone is a modern democratic fallacy. It doesn’t work.”

Irving Krystol

Many watchful MR readers will have come across the following court report.  I say watchful because it appeared initially in the most out of the way and journalistically humble place, the Colne News Column of Pendle Today, date 6th October.

Chemicals Find

TWO Pendle men have appeared before Pennine magistrates accused of having “a master plan” after what is believed to be a record haul of chemicals used in making home-made bombs was found in Colne.

Robert Cottage (49), of Talbot Street, Colne, and David Bolus Jackson (62), of Trent Road, Nelson, made separate appearances before the court charged with being in possession of an explosive substance for an unlawful purpose. The offences are under the Explosive Substances Act 1883.

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The following is a story about the inherent dishonesty - or possibly leftism - of the little hero of the French right, Nicolas Sarkozy.  It involves guns in private ownership, and actually originates not from a French source but from a Swiss gun website.

Swiss men, incidentally, like their guns - by which I mean not the odd twelve-bore but massively lethal military hardware.  Guns are a central part of Swiss life.  By government decree every adult male who is not on active service is a Reservist.  He must be armed and ready to venture forth in defence of his country … fighting his own way through enemy lines to join up with his unit if necessary.  So there’s cold steel in every true Switzer’s home, and that’s how they like it.  It’s been that way for generations. 

Even so, it isn’t liberal to leave well alone, and all loved customs in the West must come under the “critical” gaze.  Now there is a growing movement in Switzerland to take the gun out of the home.

But that’s Switzerland, and somewhat off-topic.  So we’d better get back to the little Hungarian Jewish guy who, as Minister for the Interior, is the top chief of police in all France.

It’s true that mainstream politicians famously dislike an armed citizenry.  But why does Sarkozy, who enjoys whipping up populist support with his tough-guy posturings on immigration, want to disarm native Frenchmen at this point in time?  Is he simply travelling leftward for political effect, as David Cameron is?  Is he trying to draw the sting from the Socialists?

His reasoning as stated below is certainly no guide.  It is contorted and unconvincing, and I don’t think he can really believe it himself.  It reads as though he confected it on the spur of the moment because the real logic of his argument can’t be made public.  See for yourself.

Here’s a translation from the Swiss website by MR reader Michael R:-

FRANCE: WORRYING NEWS FOR GUN-OWNERS

The pre-electoral campaign is underway in France.  Next year French citizens must choose a new president. The two designated favorites are:

- for the left, Segolène Royal, self-styled “passion flower”

- for the right, Nicolas Sarkozy, disfavoured by his short stature and his Hungarian name, but appreciated by his supporters for his muscular stance on the lack of security, the incapacity of French justice to command respect and restore order in les banlieues, etc.

The majority of private gun-owners and enthusiasts were getting ready to vote for Sarkozy until, during a radio show, the presidential Ccndidate answered a question about the right to keep a gun and the right of self-defence. It was on the RTL radio network on 22nd September:-

“I’d like to say one thing about my conception of the Republic …

Security is the responsibility of the State.  I am against militias.  I am against the private ownership of firearms, and I’m trying to make you think about that.

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It’s no surprise that the kings of the fraud business turn out to Nigerian.

More than $380bn has either been stolen or wasted by Nigerian governments since independence in 1960, the chief corruption fighter has said.

Nuhu Ribadu told the BBC that Nigeria has “nothing much” to show for the missing money.

He said the worst period for corruption was the 1980s and ‘90s, but currently two-thirds of governors are being investigated by Mr Ribadu’s agency.

Does anyone seriously suppose things will change?  That screw-you style of pig-individualism isn’t a spot of temporary bad luck in Sub-Saharan political life.  It’s much more likely that ordinary Africans do indeed like their vaunted “strong man” rulers because they are, basically, what the ordinary African male would rather like to be himself.  A life of quiet dedication and public service doesn’t enter into it.  Lord Acton’s moral sewer does.  It’s all sociobiology.

So, then, what do the dreamers and the Western idealists think they are up to?

Ah yes, striving to devote 0.7% of the national GDP of each developed nation in aid for the fight against global poverty.

That should work.

According to the recently released Department of Justice annual hate crimes report, about 60% of all hate crimes were perpetrated by the racial category of “white”.  You can see for yourself here.  Neither Latinos nor Hispanics are mentioned, but it is well known that somewhere between 88% and 91% of all Latinos are classified as “white” by race in the USA.

However, when we look at the statistics about victims of hate crimes, we see that Latinos/Hispanics are well represented with their own ethnic category.  Look here.

This is profoundly dishonest.  MR readers may want to try their statistical skills to tease out additional problems or information.  Merging “white” and most “Latinos” in a single category of hate crime perpetrator and assigning them all the racial label “white” has been the practise since national statistics of hate crimes were first recorded.  Of course, when it comes to victim status all “Latinos” are bunched together.  Thus, the “white” perpetrator class is pumped up, and the “white” victim class is comparatively reduced.

By the way, this approach also applies in other areas.  When you look at statistics on unmarried mothers, for example, you will find that “Latinos” are scattered within the races as part of “white,” “black,” and “Asian” and serve to seriously expand the “white” racial category of unmarried mothers.

This is also the origin of the “non-Hispanic white” label although you will never see “non-Hispanic Asian” (yes, they are a real category) and “non-Hispanic black” (another big category).

Bo Sears
ResistingDefamation.org

From BBC News:-

The complete works of one of history’s greatest scientists, Charles Darwin, are being published online.

The project run by Cambridge University has digitised some 50,000 pages of text and 40,000 images of original publications - all of it searchable.

Surfers with MP3 players can even access downloadable audio files.

The resource is aimed at serious scholars, but can be used by anyone with an interest in Darwin and his theory on the evolution of life.

From a UPI article titled Gallic Intifada:-

Turf conscious bloggers in Paris’ rundown, mostly Muslim, suburban immigrant housing estates rival in violent messages that threaten to beat senseless and even kill any intruder caught in “our ghetto.” Almost every word is misspelled, in both argot slang and pidgin French. And these are not empty threats. An average of 14 policemen a day are injured in bloody clashes with jobless youngsters.

France’s Interior Ministry said 2,500 police officers had been “wounded” this year. The head of the hard-line trade union “Action Police” Michel Thooris wrote to Interior Minister Nicolas Sarkozy to describe conditions in housing developments turned slums as “intifada.” Police cruisers are pelted daily with stones and “Molotov cocktails” (gasoline-filled bottles with burning wicks that explode on impact) and Thooris said cops assigned to what was rapidly degenerating into “free fire zones” should be protected in armored vehicles. Entire tall buildings empty into the streets to chase policemen and free an arrested comrade.

“We are in a state of civil war, orchestrated by radical Islamists,” Thooris told journalists.

Meanwhile, the Telegraph has finally pondered these last two weeks of ministerial interventions in the veil row, and in this morning’s leader come up with ... the deeply obvious: Labour loses faith in multi-culturalism.

At his press briefing yesterday, the Prime Minister made it clear his Government’s approach to cultural diversity had changed. He may have couched his position in careful language, but the conclusion was inescapable: integration, rather than multi-cultural separatism, is now official policy. By saying that he “fully supported” the decision of Kirklees council to suspend the Muslim teaching assistant who had refused to remove her veil at work, and then reinforcing this point with the observation that the veil was a “mark of separation”, Mr Blair removed any doubt about the Government’s position.

He was, in effect, affirming that the contentious views expressed over recent weeks by Jack Straw, Ruth Kelly and John Reid were not maverick individual opinions, but part of a larger, concerted revision of the Cabinet’s stand.

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