Double Bubble Toil and Trouble
I was out for a few drinks with a friend who just so happens to also work in the City one evening last week, as we often do we got to talking about marco-economics and postulating what the future might hold for us all. It’s a funny thing but we first met during a period of economic unrest, that of the post dot-com bubble and how much of a déjà vu the current scenario is turning out to be. Well it should do, it’s the same money.
Is this little game of pass-the-parcel ever going to stop? Probably not. But there’s always someone to brighten your day :
“While the growth of consumption is lower than that of production and the market is full of oil, prices are constantly on the rise and this situation is completely artificial and imposed.”
Mahmoud Ahmadinejad
Now I’m not one of his greatest fans but he is the president of a major oil producing country so I would wager he knows a bit about the subject.
So the tech stock bubble became the housing bubble became the commodities bubble. Where next I do suppose?
Giant biotech companies are privatising the world’s protection against climate change by filing hundreds of monopoly patents on genes that help crops resist it, a new investigation has concluded.
The study – by the authoritative Action Group on Erosion, Technology and Concentration (ETC Group), based in Ottawa, Canada – has found that nine firms have filed at least 532 patents around the world on about 55 different genes offering protection against heat, drought and floods. If granted, the companies would be given control of crucial natural raw material needed to maintain food supplies in an increasingly hungry world.
Biotech giants demand a high price for saving the planet
The food bubble is already starting to swell and with oil playing such a major part in its production it’s a dead cert that spiralling fuel (and fertiliser) costs will push producers towards the adoption of hardier [and sterile] bio-engineered crops.
The next bubble I suspect is going to be really nasty.
Down in the dumps as I am over the outcome of 42 day detention vote this evening, I think personal liberty might also start to be increasingly short supply
It looks like the terrorists are going to have to find something else to hate us for
There is a solution to all these problems - drastically reduced human population. Strangely this is something none of the green or war of terrorism groups seem to want to embrace.
I wouldn’t get too concerned about this yet Stef, I would be very surprised if it made it through The Lords. Even if it was made law it would most likely be challenged on a regular basis and every case would get sufficient media coverage to make it unworkable.
Population reduction is the answer to most of the severe problems that currently face the human race but seeing as neither the politicians nor the people in the developing world want to face that fact so it will be left to the planet to present the solution, and I’m sure in time it will.
Good article. On the food issue, I think we can actually all do something about that - start growing some of your food yourself, and stop buying food that requires huge amounts of oil inputs, be it artifical fertilisers or long distance freight. I think we are mad that we have allowed ourselves to become so dependent on outside influences we cannot control (eg oil). On the GM issue I am very sceptical that GM foods can actually deliver on their promises, and I fear for the potential side effects. Unfortunately, these companies are very powerful and able to influence politicians despite strong community opposition.
This thing is clearly being exacerbated by food pricing and other little nasties to jolly the process along. The bottled water industry is going the same way.
Few countries can control food pricing but the price of oil (which it depend s on) is very controlled by OPEC and the large institutions which exchange the futures contracts. Food production has always been dependent on oil but this dependence has risen in recent years due to increasing “food miles” as Chervil quite rightly asserts and over dependence on petroleum based fertilisers. Now the way around this is to utilise more arable land less intensely local to the centres of demand, but for some reason there has been a boom in the sale of quality land to investors. Now either these canny people see a future in close-to-market or something else is afoot.
I hope they intend to use that land.
I’ve been asking over on mine whether anyone knows of a sim macroenomic model - computer or board game based. Or is it all too complex and diffuse and nobody has a clue?
Nassim Taleb discusses his experiments in macroeconomic modelling using the Monte Carlo method in his book “Fooled by Randomness”. I also understand that some governments have attempted this to disastrous results but are unwilling to publicly own-up.
It would be theoretically possible given enough computational resources if the markets were truly free, which they are not, or if the world were not vulnerable to random “black swan” events, which it is. So not a hope really would be my take.