Cold Turkey

The rainy season is just about over and the long hot steamy summer of the southern Japanese archipelago is lying heavily and energy draining(ly) on the body and spirit. Moving and sometimes even breathing seems to require a conscious decision. So it's time to depart for hopefully cooler climes or spend most of the time in an ice cube bath. Not being a fish, travel seems the better choice.

Accordingly, then, I'm entering detox and rehab tomorrow. Or, put another way, I'm taking a few weeks for summer travel sans computer, smart phone, iPad or other Internet access toys—unless some Good Samaritan lets me use theirs.

Noilly Prattle will be silent until I come back on line towards the end of August. 

Have an enjoyable summer.

Hope to see you then. 

à la prochaine, hasta luego, またあいましょお、auf Wiedersehen, до свидания, ciao, 

Noilly

the only game in town

Cautious on Growth, Bernanke Offers No Hint of New Action

In a rather eerie echo of my previous post there are some very telling reactions to Fed Chairman, Ben Bernanke's recent appearance before the Senate Banking committee as reported in the New York Times. The issue, of course, is government stimulation of an economy in the doldrums—to do or not to do it.

Mr. Bernanke, playing it coy, talks of a looming “fiscal cliff”. “The combination of higher taxes and cuts in federal spending set for the end of the year 'would probably knock the economy back into a recession and cost a lot of jobs',” Mr. Bernanke said. This, it seems to me, is a rather off handed way of saying, as Richard Duncan suggests, that the economy is, in fact, on government life support. 

As you would expect the senators reactions are purely party line. One example each:

Republicans pressed Mr. Bernanke to forswear additional action, warning that new measures would eventually lead to higher inflation and suggesting that the Fed’s policies were allowing Congress to delay a reckoning with the federal debt. Mr. Bernanke rejected both arguments.

Democrats put countervailing pressure on Mr. Bernanke to agree that he should do more. “I’m afraid the Fed is the only game in town,” said Senator Charles E. Schumer, Democrat of New York. “And I would urge you to take whatever actions you think would be appropriate.”

Does that sound like government life support or what?

on Government life support

There exists one of the most remarkably lucid and intelligent, non-hyperbolic and sobering analyses of the financial meltdown that began in 2007 and continues to affect a significant proportion of the working population in many countries—the US being no exception.

Richard Duncan

Richard Duncan, the author of the book, The New Depression: The Breakdown of the Paper Money Economy, is no left-wing, long-haired, Commie pinko navel gazer. Uh-uh, he's on the management team of a straight shooting, upright (probably Chamber of Commerce card-carrying) investment firm out of Singapore (Lee Kwan Yew's Asian Tiger) that goes by the name of Blackhorse Asset Management.

A short list of the kudos that make you sit up and take notice of what he says:

• worked in the investment industry for more than 20 years
• spent two years at the World Bank in Washington, D. C
• author of the bestselling book The Dollar Crisis: Causes, Consequences
• 1993, one of the first to warn of the impending collapse of the Thai economy
• consultant for the International Monetary Fund

Duncan, contrary to what you might expect from an investment consultant, is an advocate of government spending. He compares the present “New Depression” with elements of the Great Depression of the 1930s. [See table below.] Both are the result of the bursting of credit/debt bubbles wherein the normal flow of credit freezes up and debts can no longer be paid. In the 1930s “the banking system … and global trade collapsed ... the US economy shrank by 46% … and unemployment ranged from 15 to 25% for a decade.”*

                  The Great Depression & The New Depression
                                 1. Gold Standard Breaks Down (1914) = Bretton Woods Breaks Down (1971)
                                 2. Credit Boom: The Roaring Twenties = Credit Boom: Global Economic Bubble
                                 3. Boom Leads to Bust When The Credit Can’t Be Repaid (1930 and 2008)
                                 4. Banking Collapse (1930 and 2008)
                                 5. International Trade Collapses (1930 and 2008)

Franklin D. Roosevelt's “New Deal” helped to alleviate some of the worst effects of high unemployment with government programs in infrastructure spending such as building dams and creating national parks. But, in fact, it was World War II that really ended the depression with massive government spending. “At that time government spending ... increased 900 percent; not 9 percent, not 90 percent. 900 percent.”* Duncan ironically notes that WWII not only ended the depression but also ended 60,000,000 lives. He calls this his “disaster scenario” but is not calling a repeat, necessarily.

I won't go into the details, anyone interested can read a transcript of the quoted interview. There is also an audio version <http://www.financialsensenewshour.com/broadcast/fsn2012-0404-1.mp3>, or, better still, you can buy and read his book. 

 

To conclude this post with what some might find to be a shocking notion, Duncan believes that we no longer live under the sacred cow of Capitalism as an economic system, but something he calls “Creditism”. With the collapse of the credit bubble, Duncan says that credit can no longer expand, the private sector can't take on any more debt because of the nature of the economic cycle of supply and demand (fewer jobs, less money, less demand, less need for supply, reduced economic activity and higher unemployment). Only the government can take on more debt. “So this means we're dependent on government spending whether we like it or not.”* Duncan is not enamored of this situation, but he shrugs his shoulders. 

Under the “dynamic” of Capitalism businesses would invest, profit, accumulate capital, invest, profit, accumulate capital, invest, profit.....ad infinitum The system no longer works this way, says, Duncan. In the new dynamic of “Creditism” the system is “driven by credit (he equates credit with debt) creation, consumption, [debt] credit creation, consumption, [more debt] credit creation, consumption ....”*

The global economy is on life support, says Duncan, and governments are the ICU—like it or not. 

Looks like the governments of the world will just have to keep throwing money at it. That's OK for another five, maybe 10 years, says Duncan, but beyond that, if we keep throwing a few billions at Wall Street to encourage consumption every time the Dow tanks, we are going to find ourselves Greece revisited. Neither do we want WWIII. Duncan advocates government spending as investment in renewable energy technology, infrastructure, investment that, theoretically at least, would both create work and lay the foundation for future expansion. [Currently, 13% of the US's energy comes from renewables including dams. Solar is still <1%. The rest is from coal 42%, natural gas 25%, nuclear 19% and petroleum <1%.] 

Looks like the Tea Party types, austerity advocates and those pitching only-private-enterprise-can-“create jobs” are living in a world that went out with Lehman Brothers in 2008.

Riddle: What happened when Marie Antoinette went out with Versailles! They conceived “la Guillotine”!

* Interview with Richard Duncan in Financial Sense <http://www.financialsense.com/financial-sense-newshour/in-depth/2012/04/04/richard-duncan/the-new-depression>

Catalog of incompetence:

Amid Reports of Ineptitude,... July 14, 2012

• fiasco
• whistleblowers
• chaos
• disarray
• falling asleep during training sessions
• listening to music during training sessions
• failure to spot hidden weapons
• poorly educated and unprepared
• apology – “deep regret” (training company spokesperson)
• “we do not tolerate people not paying attention”
• mismanagement
• imbroglio
• political fallout
• dire conclusion
• worst prognostications
• failures in security planning
• debacle
• major weaknesses
• catalog of disasters
• haphazard planning
• vulnerability to terrorist attacks
• increase in police and military deployment
• $80 million loss on contract
• military plan to intercept potential attacks
• ground to air missiles missiles ringing the Park
• strike force
• supersonic Typhoon fighters
• snipers
• 24-hour “readiness” status
• Panglossian optimism ... “but this time we could (at least) afford to build the venues.”

Are we talking about the police/military training of less than enthusiastic recruits of some puppet regime? Training of airport security personnel? No. All these words and phrases are lifted from a New York Times article about security preparations for the London Olympics. To think the Greeks declared a moratorium on warfare during the period of the games. Seems like the simplest way to ensure “security” for them.

IPI, TAPI, NATO, SCO - acronym soup in “Pipelineistan ”

Remember LBJ on the IRT going down to 4th Street USA and finding the youth of America on LSD? Hint: "Hair" Hair has nothing to do with this post, I just like the colorful poster.

The use of acronyms has grown like mushrooms on damp rotten tree trunks since those innocent days before the revival of the Great Game in Central Asia which has brought us the GWOT (global war on terror) otherwise nicknamed the neverending war. Forget all the media spin about humanitarian interventions; WMD; he-gassed-his-own-people; global war on terror; Taliban, Pashtuns and other “abettors of terrorists”; wars for liberation, freedom and the blessings of democracy; there-is-no-way-WE-will-allow -THEM (Iran) to-develop-nuclear-weapons; yada, yada, yada. Uh-uh boys and girls! Nope! It's all about whose gonna get the gas and oil from where and whom and piped to where and whom. It's not fashionable to state the obvious, you have to have the cover of some noble-sounding purpose to justify occupation (by any other name) and “carefully targeted” drone attacks on hapless populations in the way of the desired pipelines, and enormous payoffs to puppet regimes in the lines of sight of the pipelines. 

The first “Great Game” in Central Asia was a series of skirmishes between the British and Russian Empires in the 19^th Century. “From the British perspective, the Russian Empire's expansion into Central Asia threatened to destroy the "jewel in the crown" of the British Empire, India. The British feared that Afghanistan would become a staging post for a Russian invasion of India...” * Etc., etc.

NATO

The “New Great Game” finds two modern empires--Russia and. the USA--vying for supremacy over the gas and oil fields of the Caspian Basin and the energy rich “-stans” and trying to contain and keep the moving of the stuff away from each other and, especially, away from China. It is also, of course, unfashionable and politically incorrect to call either of the contenders “empires”--especially the latter one. Which brings us to IPI, TAPI, NATO and SCO and the resurgence of the new Russian “Tsar” Vladimir Putin vs. whoever occupies the White House. Basically it's all about moving gas and oil through Central Asia through various pipe lines, some already extant, others in the pipeline, so to speak. So, follow the money and the political rivalries money entails.

SCO

More energy to energy-hungry China equals more competition for an economically and socially weakened United States. Therefore, the US and its “allies” (read NATO) are interested in diverting gas flow away from China. Russia, an “ally” of China, is interested in thwarting that ambition and keeping the USA out of its backyard (pretty much all of the areas under current contention in Central Asia). Afghanistan and Pakistan, the current focus of US military involvement, are critical territories through which both the IPI and TAPI pipelines have to pass. To counter NATO, Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan have set up the SCO (Shanghai Cooperation Organization) which is both an economic and security pact. Afghanistan, India, Iran, Mongolia and Pakistan are “observer” states; Turkey is a “dialogue partner”. A comparison of the accompanying graphics shows two rather considerable power blocs. Of utmost interest is the fact that all the oil and gas “producers” are in SCO; all the “consumers” are in NATO.

Pipelineistan's IPI and TAPI

NATO backs the TAPI (Turkmenistan (not associated with SCO)-Afghanistan-Pakistan-India) pipeline while SCO backs the IPI (Iran-Pakistan-India) pipeline. A quick look at the missing letter (A) in IPI, and you can see what the Afghanistan adventure is really all about whereas the first (I) in IPI strongly suggests what all the brouhaha about Iran's “nuclear weapons ambitions” is really all about. Interestingly enough TAPI and IPI could cross each other, in the planning stage at least, somewhere in the Baluchistan region of Pakistan south of the Afghanistan border near Kandahar. In the Pipelineistan map on the right the TAPI is highlighted in orange and the IPI in blue. India stands to benefit either way and has to be careful to back the right horse and is said to be playing its cards close to the chest while being wooed by emissaries of both blocs. 

If you've actually read this far, any bets on how soon the USA is really gonna withdraw all troops from anywhere in the region anytime soon? If so, I have a nice bridge you might be interested in. LOL!

* Wikipedia quote <http://en.wikipedia.org/wiki/The_Great_Game>

Missing the forest for the trees

Satsumasendai nuclear plant - on the coast as you can see

In the recent election for Governor of Kagoshima (in Kyushu, Japan) the anti-nuke candidate was beaten by the incumbent. “The 64-year-old incumbent has proposed the central government ensure safety and secure local acceptance for the resumption of Kyushu Electric Power Co.'s two-reactor Sendai plant in Satsumasendai, while pledging to freeze a plan to build a third reactor at the plant during his tenure...” He was backed by the major political parties.

“Challenger Yoshitaka Mukohara, the 55-year-old president of a publishing house and secretary general of an antinuclear civic group, pledged to block the plant's restart and seek the scrapping of the reactors as quickly as possible.” He was supported by antinuclear activists and the Japanese Communist Party.

the picturesque city of Satsumasendai

Satsumasendai is one of those small rural cities like Fukushima where one of the important means of  livelihood for the locals is work at the nuclear plant—their rice bowl. The challenger offered to break their rice bowl. What would you do? 

I suppose it was ever thus. It's the way things are. しかたがない！Wrap it up in pretty paper and tie a nice shiny colorful bow around it and even a boa constrictor would look benign.

How do you sell something useful but potentially deadly? Why, wrap it up in caring words and sentiments to the tune of we're-only-here-to-serve-you, or trust-me-and-let-me-take-care-of-you. It's for your own good; you want jobs, don't you? You want air conditioning, don't you? Well then, baby, let us nuke you; our technology is the finest in the world, our flawless inspection and safety specifications are unequaled globally. Y'all know that our reputation for quality control is unchallenged in modern times.

Well, maybe the brakes didn't work on that car that time on the freeway, but that was a fluke—human error—the driver panicked. It wasn't a design flaw in our impeccable technology. Well, maybe the center of gravity was a little high, but if the vehicle hadn't been so out of control (because of an inept driver) it wouldn't have rolled over like that. It wasn't negligence on our part; you're supposed to follow the instruction manual bundled along with every car. It clearly says: keep your car in control at all times. He'd probably had one too many, as well.

What am I saying here? That industry intentionally makes shoddy products? No. After all, nothing is perfect and accidents do happen. My beef, in this case nuclear power plants, is not that shit happens. Avoidable shit like faking records, however, is another matter, as is denial of human fallibility and behind closed doors powwows. I'm not a Luddite; know perfectly well that we are where we are and nostalgia for some mythical agrarian Eden is the stuff of fantasy. No, the only really important question, as I see it, is where do we go from here? Just fire up the aging plants and simply sweep Fukushima under a new and bigger carpet and have faith in hopes and dreams? YUME (dreams) are very big here in Japan. A nice sentiment, but dreams can, à la Fuku, turn into nightmares. Or, consider the longer range goal of sustainable energy without living under the sword of Damocles? Not being big on nightmares, I prefer the latter—investment in renewable and sustainable energy whatever and however long it takes.

While it seems expedient in the short run to “drill, baby, drill”; with some 9 billion people on the planet with an increasing thirst for more and more energy, it doesn't take a mathematical Einstein to figure out that the black gold is running out. If the people on this planet (and not only the fabulously wealthy who can afford their own islands) do not wish lowered living standards we will, sooner or later, have to part company with the energy derived from fossil fuels and maybe even nuclear energy and its difficult to get rid of byproducts—think spent fuel rods hanging precariously above Fukushima #4.

We've got a long way to go, baby!

Fukushima mon amour - How we got Fuku-ed!

Nuclear Crisis Man-made
Japan Times commission report cum expose

Fukushima No. 4

Since we've added Fukushima to the now unholy trinity (think Chernobyl and Three Mile Island), the crowning glories of a whole host of less spectacular “nuclear accidents”--oops, sorry about that!—an “independent” Diet (Japanese legislative body) commission has come to a startling conclusion: it wasn't a natural disaster after all, it was “man made”, the “regulatory system is corrupt, safety steps were rejected”. Oh, my God! Who would have thought?

In a remarkable mea culpa the chairman of the commission, an emeritus of Tokyo University said, and I quote: "What must be admitted — very painfully — is that this was a disaster 'Made in Japan,'". In a damning critique of Japanese society and culture he goes on to say, and I quote again: "Its fundamental causes are to be found in the ingrained conventions of Japanese culture: our reflexive obedience; our reluctance to question authority; our devotion to 'sticking with the program'; our groupism; and our insularity." 

Wow!

Nero fiddled - Edano nibbled
the face of the govt. in the early days of the crisis

We've become more or less inured to hearing about small nuclear accidents at various nuclear power plants here in Japan that are merely a blip on the mainstream radar and quickly pooh-poohed, hushed up and swept under the carpet by the power companies with the collusion of the government. The nuclear carpet is so full of sweepings by now that there simply isn't enough room left to prevent the seepage of the glaring detritus of a major mess like Fukushima.

The quotes above are merely the tip of the iceberg in a Japan Times article published online today. It is a damning indictment of the recklessness and callousness with which the government and the nuclear industry scratch each other's backs for (fun, one wonders?) profits and jobs for dying rural towns with only a wink and a nod to the safety of the reactors—and, yes, the generation of electrical power.

The reactors and we are caught between the devil and the deep blue sea--literally in most cases in Japan. Many reactors, like Fukushima lie on the coast subject to typhoons, earthquakes and now famously tsunamis. Yet, the demand for energy trumps all other considerations it seems. The reactor at Oi is being restarted despite the fact that new regulations have not been finalized and Fukushima continues to emit radiation along with the instability of the No.4 structure, which, according to Tepco (Tokyo Electric Power Co.): "... the pool at the No. 4 reactor, which was not operating at the time of the accident, holds 1,331 spent fuel assemblies, which each contain dozens of rods. Several thousand rods were removed from the core just three months before so the vessel could be inspected. Those rods, which were not fully used up, could more easily support chain reactions than the fully spent fuel." And which is in danger of  collapsing in another severe earthquake and releasing larger doses of radiation than Chernobyl.

It remains to be seen whether this latest report, too, will be swept under the carpet. If so, we are going to need a much bigger carpet.

Persian Odyssey: Part XIX – the chapter is ended

Gold Culture in Iran

Common sense prevailed and I made up my mind to leave Esfahan as soon as an opportunity of any kind presented itself—even if I had to ride out on a camel. There were rumors of evacuation flights offered by Pan American Airlines coming to take out any people who wanted to leave with the caveat that we would lose any benefits we were entitled to upon completing a full contract. Many people were not willing to lose their benefits or had too much money tied up in their inaccessible bank accounts and chose to stay on, but not a few, including me, decided to chuck it all and signed on to the evacuation flights. I suppose the Embassy had finally decided to face the music.

bazaar after hours

gold shop

We would not be allowed to take any cash out of the country and I had a fair amount of rials in cash. I hit on an idea and got in touch with Sandy (nickname), an Iranian guy who was a friend, and who knew his way around Esfahan. Many shops, including those in the gold bazaar, were closed by now but, according to Sandy, they were doing a back door business and he could get me into one of these jewelry shops. Surreptitiously then, one evening we slipped into the jewelry shop just after dark, literally by the back door, and I bought as many 18 karat gold rings as I could get for my rials. My plan was to thread the rings on a gold chain and hang it around my neck inside my shirt and try to slip it out undetected by the customs officials, should there be any, screening the evacuees.

 Queen Farah Diba in happier times

After many hurdles, the Iranian authorities seemingly cut the red tape and cleared the way for the PanAm flights to land at Esfahan airport in mid-January, 1979. The big day arrived, I said goodbye and fare-thee-well to J., who had decided not to leave, told him there was a pot of chile on the stove, and boarded one of the buses at the base that were to take us to the airport. Then the interminable wait in the terminal for the planes to arrive. Everyone was, understandably, on edge and nervous conversations to the tune of “When are they gonna get here?” abounded. A particularly attractive young woman teacher, M. (looked a little like Farah Diba), a recent arrival in Esfahan, was extremely nervous and frightened and we gravitated to each other and helped  keep up each other's courage—then too, there was an attraction as well. Shelter from the storm!

After several hours of anxiety there was an announcement to the effect that the authorities weren't going to allow the planes to land after all, that they were being held up, if I remember correctly, in Athens. Now, nerves stretched to the breaking point, overwrought, we were told that the Embassy was negotiating and that we would all be bused to a nearby hotel pending further notification. At the hotel people were being assigned rooms and had to double up, so M. and I decided to share a room and help each other get through the night. During the night we vowed that if we ever got out of this we would meet again in some bright future and fair land and live happily ever after. Dreams!

In the morning we were informed that, finally, the PanAm flights would be allowed to land and would be arriving from Athens shortly. This news was greeting with a “Yeah, sure, we'll see!” attitude, but everyone packed up and got ready to board the buses one more time. M. and I stayed close together, unwilling to be separated, so that we could board the same aircraft. I don't think anybody really believed we were going to get out of there until we were actually seated and belted, I with my gold safely tucked into my shirt, and were really taxiing to the runway. The PanAm pilot was pretty chipper as he announced: “We're cleared for takeoff!” The engines roared and I felt the familiar push against the seat back as the great bird accelerated down the tarmac, reached takeoff speed and soared “up the delirious burning blue”. Suddenly, an enormous cheer erupted in the cabin as everyone on board went wild with relief and long suppressed emotions. So ended one of the most remarkable periods in my global wanderings.

up up and away

P.S.:

The Shah was forced to leave Iran and went into exile on January 16, 1979—just a few days after I did, and in the resulting power vacuum two weeks later on February 1, 1979 the Ayatollah Ruhollah Khomeini returned to Tehran to the greeting of millions of Iranians. The rest, as they say, is history.

The End.