Maqqa wrote on Feb 3^rd, 2013 at 12:17pm:


Facts Maqqa, Facts rule in Macro Economics, NOT SPIN!

Facts, like the population of Japan declining from its current 127.5 million to 116.6 million in 2030, and 97 million in 2050. That means Demand is going to Decline & like a Boa Constrictor, it will slowly strangle Japans Economy, therefore the status quo can not be maintained!

And that is why the Politicians & TPTB can not maintain the status quo that they want, because the Facts & the Paradigm are now different!

So, IF you have any relevant facts, put them up for discussion!

Otherwise, I suggest you join Longy for a LONG NAP, lest you be exposed with your "normal" NFI comments?

Maqqa wrote on Feb 3^rd, 2013 at 12:49pm:


No, that's not possible, BUT if you don't start to turn, THEN you will continue on the same course.

AND, if your existing course is blocked by a massive iceberg, THEN the boat your on won't be the Queen Mary, it will be the Titanic!

Well, there are actually a number of massive icebergs ahead, which we are probably going to hit because we didn't change course soon enough.

What is still in doubt, is whether we hit a glancing blow OR whether we hit them head on?

Do you even know what the largest Macro Factors are?

So, it seems that NFI Maqqa is taking a rest from this thread, whilst she makes a fortune, spreading Liberal party paid threads?

Anyway, back to reality!

If anyone thinks there is any substantial difference between Left leaning Political Party's & Right leaning Conservative Political party's, THEN I SUGGEST YOU NEED TO CATCH UP WITH REALITY.

There is nothing inherently "Honest, Skilful or Professional" about either the Liberals OR Labor.

Just because one party supposedly supports Business & the other supposedly supports Unions, does not mean that the Public can expect anything inherently from either.

Both are limited by Global Economics, to some extent, depending on where the Global Economic cycle is, at that point and to some extent the advice provided by "the professionals" in Treasury.

That said, we have already entered a new paradigm in Global Economics, BUT neither major Australian Political party, nor Treasury have as yet accepted that fact, let alone taken action/s based on our new REALITIES!

There are many examples of inept &/or dishonest Politicians, within the Australian context, BUT the following article about Spain should be noted, as we could be headed for both the similar Economic & Political issues?
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Spain: A Deepening Recession Amid A Widening Political Scandal

Contraction 'Worse than Expected'
Once again economic forecasters are 'surprised' by the depths of Spain's recession. They really shouldn't be. After all, one of the most egregious housing bubbles of all time has burst in Spain. The bubble has produced malinvestment on a truly breathtaking scale. Moreover, it has left the banking system in tatters.

The banking system is now on artificial life support, but effectively the events have left it 'zombified'.

Given the numerous interventions designed to forestall liquidation and keeping the size of the State untouched while 'fixing' its debt problems, it takes much longer than would otherwise be necessary to get the economy back to a sustainable configuration. It is of course clear that the process is very painful; one cannot expect one of the biggest real estate bubbles in history to unwind painlessly. What is at issue is only how to best achieve the best outcome as quickly as possible.

The European Commission this week signaled it may recommend easing Spain's budget goals for the fourth time in a year as unemployment in the euro region's fourth-largest economy rose to a record 26 percent at the end of Prime Minister Mariano Rajoy's first year in power.

"We should be circumspect; the domestic demand contraction is severe and more of the same is likely in the first half of 2013,"said Guillaume Menuet, a senior economist at Citigroup Inc. in London. "The current market momentum is such that investors have to chase the rally, masking economic fundamentals to a large degree."

A Worsening Political Scandal
In the meantime, prime minister Rajoy's government has been caught up in a bribery scandal that seems to become ever more serious, as new allegations emerge all the time. Recently they have ensnared Mr. Rajoy personally, but not only him - practically the entire ruling stratum of his party suddenly stands accused.

According to Reuters:
        Spain's ruling People's Party denied on Thursday that Prime Minister Mariano Rajoy and other leaders received payments from a slush fund after a newspaper published what it said were secret party accounts.

        El Pais published images of excerpts of almost two decades of handwritten accounts that it said were maintained by People's Party treasurers. The newspaper said the accounts showed 11 years of payments to Rajoy of 25,200 euros ($34,200) a year.

        The accounts - which El Pais said amounted to a parallel unofficial bookkeeping system - indicate donations from companies, mostly builders, and regular payments of thousands of euros to a number of party leaders. The report is the latest twist in a scandal that has damaged the credibility of 57-year-old Rajoy as he battles a deep recession and one of Europe's highest unemployment levels.

Rajoy - a longtime politician widely thought of as boring but honest - has demanded sacrifices of Spaniards as he slashed public spending to avert a fiscal crisis that could push Spain into an international bailout.

Hundreds of Spaniards gathered outside party headquarters in central Madrid on Thursday evening in peaceful protests, chanting 'Thieves!' and bearing placards reading 'Resign Now!'.

It has long been known that Spain's political class is e.g. using state-owned industries as a kind of personal demesne, a place where retired politicians go to get cushy and well-paid jobs. 96% of Spaniards are correct with their suspicions: their political class is thoroughly corrupt.

Link -
http://seekingalpha.com/article/1152351-spain-a-deepening-recession-amid-a-widen...
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So, Labor OR Liberal, there is a fair chance you are not getting what you think you should be getting!

Btw, Spain's ruling People's Party is a Conservative Party, BUT it could just as easily have been a Labour oriented party, as they all have a similar problem -
Power corrupts & absolute Power, corrupts absolutely!

The Twilight of Petroleum

This graph, as earlier mentioned, shows that on a global level production of crude oil soon will begin its decline. The forecasts of the IEA contain certain elements which are at the very least “slightly optimistic”, to not say outright fanciful, regarding the expected future production from reservoirs yet to be discovered and developed as well as considerably inflated prospects regarding non-conventional oil

With this as my starting point I prepared a continuous graph (a simple linear extrapolation for the years for which we don’t have data); the colors approximately correspond  to those of the IEA graph:


We are adding various categories of hydrocarbons assuming they are equivalent, when in fact, they are not. Non-conventional oils, (all of them) have lower energy densities per volume, and roughly 70% that of crude oil. In addition, the refining improvements refer to the increase in volume of products derived from the refining of petroleum, and such an increase in volume obviously does not assume an increase in the energy which is extracted from the petroleum.

In reality such products contain more energy than that of the original barrel because their processing uses natural gas for the hydrogenation of the less saturated hydrocarbons. What obviously occurs is that the energy of the refined products from a barrel of oil is equal to the energy of the original barrel plus that of the natural gas used in refining it. Making these adjustments (non conventional oils have about 70% of the energy by volume as normal crude oil(*), the improvements in refining do not increase the energy of the petroleum), we then obtain the following graph in millions of barrels of oil equivalents to crude oil per day:


This is the graph which the IEA should have presented if it had counted properly, that is, by reporting energy flows, not volumes. As one easily can see the prospects for an increase in production when expressed in terms of associated energy are much more meager and less attractive: We will go from 79.5 Mb/d (now understood as energy equivalents) in 2011 to 87.5 Mb/d in 2035.

To do an estimate of the net energy we need to know the EROEI (Energy Returned on Energy Invested) of the various sources of hydrocarbons mixed in with the petroleum.

EROEI = Te/Ep
Where Te is the total energy produced by a source and Ep is the energy required for its production with both taken over the entire usable lifetime of the source in question.

With this formulation, the net energy En which an energy source delivers during its useful life (and if we have many sources at different moments of their useful lives it is equally valid as a snapshot of the whole) is:
En = Te - Ep = Te x (1 – 1/EROEI)

Here are my own values;
+ For crude oil presently in production I assume an EREOI value of 20
+ For the more expensive crude oil which is not being extracted I assume an EROEI of 5.
+ For the petroleum which is yet to be discovered I assume an EROEI of 3
+ For non-conventional petroleum, including shale oil, I assume an EROEI of 2
+ Regarding shale oil, we have indicated already that these estimates are very inflated. I reduce them by half.

With these premises, the graph of net energy that we obtain is as follows:


We know already that classic economic education cannot recognize the concept of EROEI and therefore the explanation which will be given when petroleum production will decline, will be that there is insufficient investment in exploration and development

The final fact is that the petroleum era has come to its end. Our epoch of accelerated economic development based on inexpensive petroleum is already over.

Link -
http://www.resilience.org/stories/2013-02-05/the-twilight-of-petroleum
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The other big Fossil fuel, being Coal, is now also headed down a similar path!

Of the 3 great Economic drivers, 2 are already in relative Decline, prior to going into absolute Decline.

Both Population & Energy Growth are already slowing & have been for some time, BUT the relative effects started becoming apparent for Energy issues around 2000, whilst the Demographic issues followed around 2006.

These major Economic drivers are already slowing, prior to going into reverse. Japan is the Canary in the Coal mine, so to speak & no Politician (Left or Right) can simply "wish" these issues away.

No matter what any Politician may say, the next 20 years will be nothing like the last 20 years, with Economic Growth slowing, before going into actual  Decline and no amount of government or Central Bank action/s will prevent that from happening.

If any Politician says any different, you have my permission, to tell him or her, that they are inept or lying & they have NFI.

Both the Public & Politicians need to face Reality & we need to do it now!

America's Baby Bust

For more than three decades, Chinese women have been subjected to their country's brutal one-child policy. As a result, Chinese women have a fertility rate of 1.54. Here in America, white, college-educated women—a good proxy for the middle class—have a fertility rate of 1.6. America has its very own one-child policy.



The fertility rate is the number of children an average woman bears over the course of her life. The replacement rate is 2.1.

Today, America's total fertility rate is 1.93

The nation's falling fertility rate underlies many of our most difficult problems. Once a country's fertility rate falls consistently below replacement, its age profile begins to shift. You get more old people than young people. And eventually, as the bloated cohort of old people dies off, population begins to contract. This dual problem—a population that is disproportionately old and shrinking overall—has enormous economic, political and cultural consequences.

For two generations we've been lectured about the dangers of overpopulation. But the conventional wisdom on this issue is wrong, twice. First, global population growth is slowing to a halt and will begin to shrink within 60 years. Second, as the work of economists Esther Boserups and Julian Simon demonstrated, growing populations lead to increased innovation and conservation.

Low-fertility societies don't innovate because their incentives for consumption tilt overwhelmingly toward health care. They don't invest aggressively because, with the average age skewing higher, capital shifts to preserving and extending life and then begins drawing down. They cannot sustain social-security programs because they don't have enough workers to pay for the retirees.

There has been a great deal of political talk in recent years about whether America, once regarded as the shining city on a hill, is in decline. But decline isn't about whether Democrats or Republicans hold power; it isn't about political ideology at all. At its most basic, it's about the sustainability of human capital. Whether Barack Obama or Mitt Romney took the oath of office last month, we would still be declining in the most important sense—

demographically. It is what drives everything else.

But our fertility rate isn't going up any time soon. In fact, it's probably heading lower. Much lower.

America's fertility rate began falling almost as soon as the nation was founded. In 1800, the average white American woman had seven children. Since then, our fertility rate has floated consistently downward, with only one major moment of increase—the baby boom. In 1940, America's fertility rate was already skirting the replacement level, but after the war it jumped and remained elevated for a generation. Then, beginning in 1970, it began to sink like a stone.

By 1973, the U.S. was below the replacement rate, as was nearly every other Western country. Since then, the phenomenon of fertility collapse has spread around the globe

If you want to see what happens to a country once it hurls itself off the demographic cliff, look at Japan, with a fertility rate of 1.3.

The Japanese fertility rate began dipping beneath the replacement rate in 1960 for a number of complicated reasons (including a postwar push by the West to lower Japan's fertility rate, the soaring cost of having children and an overall decline in the marriage rate). By the 1980s, it was already clear that the country would eventually undergo a population contraction.

From 1950 to 1973, Japan's total-factor productivity—a good measure of economic dynamism—increased by an average of 5.4% per year. From 1990 to 2006, it increased by just 0.63% per year.

Because of its dismal fertility rate, Japan's population peaked in 2008; it has already shrunk by a million since then. At the current fertility rate, by 2100 Japan's population will be less than half what it is now.

Conservatives like to think that if we could just provide the right tax incentives for childbearing, then Americans might go back to having children the way they did 40 years ago. Liberals like to think that if we would just be more like France—offer state-run day care and other programs so women wouldn't have to choose between working and motherhood—it would solve the problem. But the evidence suggests that neither path offers more than marginal gains.

Which leaves us with outsourcing our fertility. We've received a massive influx of immigrants from south of the border since the late 1970s. Immigration has kept America from careening over the demographic cliff.

If you strip these immigrants—and their relatively high fertility rates—from our population profile, America suddenly looks an awful lot like continental Europe, which has a fertility rate of 1.5., if not quite as demographically terminal as Japan.

perceptions, peak oil is in relative terms a myth, a boogie man to scare people with and a nagging fear for the dire pessimists.
For one reason, you don't know what you don't know.
Case in point, Linc Energy, which may or may not be proved up.

MOSCOW: The Group of 20 nations declared on Saturday there would be no currency war and deferred plans to set new debt-cutting targets, underlining broad concern about the fragile state of the world economy.

Japan's expansive policies, which have driven down the yen, escaped direct criticism in a statement thrashed out in Moscow by policymakers from the G20, which spans developed and emerging markets and accounts for 90 percent of the world economy.

Analysts said the yen, which has dropped 20 percent as a result of aggressive monetary and fiscal policies to reflate the Japanese economy, may now continue to fall.

"The market will take the G20 statement as an approval for what it has been doing -- selling of the yen," said Neil Mellor, currency strategist at Bank of New York Mellon in London. "No censure of Japan means they will be off to the money printing presses."

"I have explained that (Prime Minister Shinzo) Abe's administration is doing its utmost to escape from deflation and we have gained a certain understanding," Finance Minister Taro Aso told reporters.

"We're confident that if Japan revives its own economy that would certainly affect the world economy as well. We gained understanding on this point."

NO FISCAL TARGETS
The G20 also made a commitment to a credible medium-term fiscal strategy, but stopped short of setting specific goals as most delegations felt any economic recovery was too fragile.

The communiqué said risks to the world economy had receded but growth remained too weak and unemployment too high.

The G20 put together a huge financial backstop to halt a market meltdown in 2009 but has failed to reach those heights since. At successive meetings, Germany has pressed the United States and others to do more to tackle their debts. Washington in turn has urged Berlin to do more to increase demand.

Backing in the communiqué for the use of domestic monetary policy to support economic recovery reflected the U.S. Federal Reserve's commitment to monetary stimulus through quantitative easing, or QE, to promote recovery and jobs.

QE entails large-scale bond buying -- $85 billion a month in the Fed's case -- that helps economic growth but has also unleashed destabilising capital flows into emerging markets.

Russia, this year's chair of the G20, admitted the group had failed to reach agreement on medium-term budget deficit levels and expressed concern about ultra-loose policies that it and other emerging economies say could store up trouble for later.

On currencies, the G20 text reiterated its commitment last November, "to move more rapidly toward mores market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments".

It said disorderly exchange rate movements and excess volatility in financial flows could harm economic and financial stability.

Link -
http://www.thenews.com.pk/article-88403-G20-steps-back-from-currency-brink,-heat...
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We are now getting to the point of who is going to blink first!

The Japan Debt is escalating, like there is no tomorrow, on the pretext that it is to reflate the Japanese Economy.

However, the major driver of their Economy, which is Demographics, is now set (in concrete) to both Age & Decline in total, for decades to come.

So, THERE IS ZERO CHANCE OF ANY REAL RESURGENCE IN THE JAPANESE ECONOMY!

But, because the US is in a very similar position, of using "magic money" to achieve what they can not achieve in the REAL ECONOMY, it seems they are happy to allow Japan a continued "leeway", as that then allows the US similar "leeway".

And, with both Japan & the US continuing down "Alice in Wonderland's Yellow brick road", there is no other realistic choice for the other nations, but to go along with Japan & the US & HOPE LIKE HELL THAT A MIRACLE HAPPENS!

However, that is most unlikely to occur & whoever holds the reigns of power after the next OZ Federal election will find they have won a poison chalice, as the world Economy deteriorates back into the worst Economic Crisis since the Great Depression!