Links 6 November 2019

Global Macro / Markets / Investing:





Leith van Onselen
Latest posts by Leith van Onselen (see all)


  1. No Australian city has a long-term vision for living sustainably. We can’t go on like this

    how can a city be sustainable, any city, especially large cities?

    • Stewie GriffinMEMBER

      Great link nyleta – awesome link actually.

      This dovetails with my own theory of economic activity and energy input costs. Short theory is that the reason we have interest rates so low, is that this is the level that they have to be held at these ultra low levels in order to enable to the massive capital outlay required to allow the marginal oil producers (shale producers) to deliver oil onto the global market, at a price low enough to keep energy costs within a band that ensures overall global stability. Basically debt is a function of energy.

      We are currently between a rock, i.e. Zero bound, and a hard place, cheap energy can no longer be extracted economically at prices low enough to ensure global stability, without the massive capital subsidisation of ultra low interest rates.

      I maintain that the end of our civilization won’t be as a result of environmental factors (global warming), but the instability that results as higher energy prices become embedded in the price of essential items for the majority of the worlds population, like food, and they rise the resulting instability and wars will be our undoing.

      Gradual but increasingly step rise up the energy production curve, and its correspondence with all the characteristics we use to define our civilization WON’T be mirrored on the downside – it will be much steeper and more jaggered.

      I think we more or less have around 10yrs before this dynamic becomes irrefutable.

      • interested partyMEMBER

        cheap energy can no longer be extracted economically at prices low enough to ensure global stability, without the massive capital subsidisation of ultra low interest rates.

        Energy extraction is measured in energy consumed to extract….not an interest rate.

        • Stewie GriffinMEMBER

          Agreed ‘Energy extraction is measured in energy consumed to extract’ it certainly can be measured that way….but imho interest rates, in our highly energy dependent civilization, are a function of energy.

          What would happen if all interest rates were normalised?

          The enormous amount of Capital deployed in order to extract shale Oil would need much higher prices in order to produce an economic return.

          Energy prices are a large, probably the largest component, of the price of many necessities, especially food.

          Food prices are nearly the entire household budget for the majority of the worlds population. While higher food prices can be absorbed in the West, it produces significant instability in much of the rest of the world that we are not immune to. Events and unrest like the so called ‘Arab Spring’ had far more to do with the high cost of fuel being embedded in wheat prices then they did with access to social media.

          If significant instability emerges in the world, then it becomes much, much harder to stay in control of developments – and our elites LOVE being in control. Instability threatens them more than any other factor.

          As the war in Yemin and the attacks on Saudi oil facilities have shown, it is possible for small dis-organised groups to have an outsides impact on oil production. This was facilitated just by near stone age rebels in one of the poorest countries in the world. Now imagine what would happen if the instability in the middle east resulted in Iran and Saudi Arabia attacking and destroying each others oil fields.

          Superficially complex systems are prone to cascade failure. I would describe most of human activity as superficially complex compared to the complex redundancies built into nature.

          As I said, it is just a theory and the way I think about it – not saying it is correct, but it is a different way of looking at why interest rates are so low other than the debt begets more debt, begets low interest rates thesis.

          • interested partyMEMBER

            A entirely reasonable theory.
            I would add that energy is the base product, and interest is the profit component. A plethora of ticket clippers line the path that is travelled in this process… every industry, every facet of modern life. The lions share ends up with the “owners” of the system.

          • interested partyMEMBER

            And a final thought on the low interest rates.
            The system owners are smart operators. They will not kill the golden goose….so low interest rates are basically a palliative process.

          • “The system owners are smart operators.”

            Not as smart as you’d think..

            “They will not kill the golden goose”

            If that was the case, we wouldn’t have revolutions…. rulings classes get their heads cut off every 150-250 years when they diverge from their core purpose, proper governance of their constituency/citizens/subjects…

            The propensity for revolutions harks back to the ‘smart operators’ hypothesis….


          • interested partyMEMBER

            RP, not to argue the point, but I think things are a little more complex these days.
            I failed to include air quotes on the “smart” bit……lol. My bad. I agree with you.
            Are we entering the next revolution via Trump and the deep state? Maybe so……treason has been committed.

            edit to add….
            It is possible…hell, maybe likely……that the “owners” of the system don’t even have a hand in the day to day operations of this system….silent partners, if you will. The “managers” get the trappings of office, power, and limited control….and when it goes pear shaped….they…..lose their head. A new operator is then installed, and the game goes on. Revolutions are just a pressure release event….so far. Let’s take out the true owners and test this idea.

  2. interested partyMEMBER

    Epsteins revenge…take them all down.
    It begins.

    Just a quick heads up……watch the clip, then ask the question ” who killed off the story? ”
    Who owns this msm outlet? [disney]
    What media/movie giant involves primarily children? [disney]

    Oh, and while the ABC buried this story……they chose to run the russia hoax instead.

    This is massive……too big to digest in one go.

    lets play a game…….how do you eat a whale?

    • well, first you’d want to weigh it, at a whale-weigh station.
      jokes aside, interesting stuff.

      • The Traveling Wilbur

        That comment initiated the very predictable response below…

        Which is why I restrained myself from making that very same joke this morning. Totally on porpoise.

    • interested partyMEMBER

      A whale is eaten one bite at a time.

      The depth of corruption and criminality globally is the whale.

      We are having it exposed…one bite at a time.

  3. From the links- Prime Minister Narendra Modi, who is under domestic pressure to pull out of RCEP, told the Bangkok Post over the weekend that it would create “unsustainable trade deficits”. Indian unions have staged protests calling for more of a say in the final deal.

    Can’t imagine this happening in our democratic & well informed country.

  4. Gees the Politburo censors at the ABC and Conversation must have dialed it in after maggoting themselves on cup day. Imagine actually publishing a piece linking migration to the crap standard of living in our cities.

  5. What the hell does Melissa Price have on this this Government? The most fvck useless minister to ever grace parliament, bar the Rooter but at least he was entertaining, gets another cushy tax payer funded gig. It’s unlikely we’ll never know as she’s a political wombat; a protected species, rarely seen, never to be interviewed.

    • Overfed underworked woman of privilege. A strong force in the modern ‘strayan electoral mix. Haven’t you heard of this new fangled thing they call ‘quotas’?