Chinese wheelbarrows with sails.

Another great article from one of my favorite blogs. Note that despite his admiration for the Chinese wheelbarrow design, they have the same back-twisting problem of our one-wheel wheelbarrows.

Note also that this might actually be a use for computer-controlled unicycles. He speculates that the roads were poor and narrow, allowing for only a single wheel. A computer-controlled one-wheel balancer would be able to negotiate the narrowest of trails. Of course you might object that any society still capable of building them would have a transport system, but what about niche uses, like Afghanistan or trekking Antarctica?

Carrying a passenger

The Chinese wheelbarrow – which was driven by human labour, beasts of burden and wind power – was of a different design than its European counterpart. By placing a large wheel in the middle of the vehicle instead of a smaller wheel in front, one could easily carry three to six times as much weight than if using a European wheelbarrow.

The one-wheeled vehicle appeared around the time the extensive Ancient Chinese road infrastructure began to disintegrate. Instead of holding on to carts, wagons and wide paved roads, the Chinese turned their focus to a much more easily maintainable network of narrow paths designed for wheelbarrows. The Europeans, faced with similar problems at the time, did not adapt and subsequently lost the option of smooth land transportation for almost one thousand years….

Read much more.

Why New Danger Of A Systemic Collapse Is Far Greater Today Than At Almost Any Time .

Martin Weiss: Some stock investors never seem to learn. They hope and pray for a new government rescue from Washington or Brussels. They wait with bated breath for each official sign of money printing, interest-rate cuts, or financial bailouts.

Then, as soon as something is finally announced, they breathe a sigh of relief, applaud with enthusiasm, even buy a stock or two.

But it’s a fool’s game. Because within a few months — or even just a few days — the government rescue crumbles, investors run for cover, and, ironically, they begin a whole new cycle of hoping and praying for the NEXT big rescue.

Just this year alone, European authorities have held 19 high-level emergency meetings … proposed dozens of rescue packages … and delivered an endless stream of promises.

read more

A discussion of how oil prices affect the economy, including some (polite) explanation of the technical economists positions who disagree that it does.

Have rising oil prices just put the final coffin nail in the entire 2009-2011 economic recovery?

Given the slowdown in China, the new recession in Europe, and the rocky bottom in the US economy, it certainly seems that way.
Oil’s Relentless March Higher

Oil prices emerged from their spider hole over two and half years ago. Having fallen from the towering heights of $148 a barrel in the summer of 2008, the early months of 2009 saw a return to prices in the $30s. Interestingly, during that great oil crash, the price of West Texas Intermediate Crude Oil (WTIC) spent only 20 trading sessions below $40. That is the exact price that most analysts only three years prior believed oil could never sustain as the world would pump “like crazy” should prices ever reach such “impossibly high levels.”

Given the enormous debt troubles the West is currently facing and the fact that oil has averaged over $100 during several months this year, it does seem reasonable to suggest that, once again, the economy has been pushed off a ledge by oil. Let’s take a look at oil prices over the past several years.

Martenson talks about the gathering storm attacking market confidence. There is a great graphic from the BBC showing who owes what to whom.

One of the most important things we need to track is simply untrackable, and that is market perception. When faith in a faith-based money system vanishes, the game is pretty much over.

If you have been reading my work (or anyone else’s) with a decent macro view, you likely lost your faith in the system a while ago and marvel that it can continue along for another moment, let alone all the years it has been creaking towards its eventual date with reality. But along it creaks, day after day, week after week, and month after month, threatening to wear down the observant and vigilant before finally letting go.

Bitter and pointed look at debt ballooning and false affluence. Basically the author points out how little of growth in the last decades was value-added ( my phrase) and how much of it was just debt inflation. He doesn’t allow for the fact that the US is the largest or second-largest exporter still, but its a rant not an overview.

So how does a society deal with the End of Debt-Driven Consumerism, the End of Cheap Oil and the End of Work when it also means The End of Affluence, even for many of those with jobs? How does government deal with declining tax revenues and rising interest rates?
The death throes of the debt-based consumerist lifestyle are already visible beneath the glossy propaganda of “rising revenues this Christmas season.” Those revenues were obtained by selling goods at below cost, in the absurd hope that income-strapped, over-indebted consumers would make profitable “impulse buys.” As Mish has documented, the “impulse buys” are being returned even before Christmas to the tune of hundreds of millions of dollars.
The Fed is desperately attempting to re-inflate the debt bubble by lowering interest and mortgage rates and buying up all sorts of semi-toxic/impaired debt. What the Fed dreads is the reality we all feel and see: fear of the future due to diminished wealth and insecure incomes. If your assets have fallen in value, you feel poorer because you are poorer. Borrowing more at any interest rate will not make anyone feel wealthier.
People who fear their income may plummet due to layoffs or their hours being cut are not in the euphoric mood to borrow more, and banks which cannot dare to lose more money loaning to people who will default have cut off credit to millions of previously rabid consumers of debt. Ask yourself this simple question: how much stuff could people buy if they could only spend surplus cash, after all their expenses and debt servicing payments were paid in full?
And let’s not forget that much of what is purchased in this consumerist frenzy is needless, superfluous crap. My wife saves the most egregiously gift-buying-frenzy advertising circulars, and one from Bed, Bath & Beyond caught my eye.
There is no difference between this “1001 Best Gifts” from BB&B and a parody of consumerist excess. Hmm, how about an “executive standing valet” rack of wood and plastic for $99.99?
To make this poor-quality contraption, a forest somewhere in a Third-World kleptocracy was cut down and precious, irreplaceable oil was burned shipping the lumber to China and from that factory to the U.S. across 6,000 miles of Pacific Ocean.
We know this spindly piece of garbage will break in a matter of days, weeks or maybe if the owner is especially careful, months; then the legs will break loose of the base, the towel bar will pull out, etc. and the “we cut down a priceless rain forest to make this” piece of human handiwork will be put on the curb where a diesel-burning garbage truck will haul it to the landfill along with all the spoiled food Americans throw out.
The 16-bottle wine cellar/cooler from China (labeled Cuisinart for your consuming pleasure) for $199.99 might come in handy storing something once it’s unplugged–but a cardboard box will probably do just as well.
I for one will not mourn the last debt-consumerist Christmas in America. Good riddance to the flaunting of borrowed money and the heedless, desperate purchase of valueless “goods” as gifts for an insolvent nation awash in too much of everything but common sense, integrity, gratitude, accountability and healthy living.

Read more:2011: The Last (Debt-Consumerist) Christmas in America

Various points of view from a commentator who runs a gold and commodities company.

The Energy Report: Peak oil has returned as a popular topic of conversation, and you’ve been talking about it for some time. Are we really in the era of peak oil, with oil production diminishing? Or do we just lack cheap oil?

Bob Moriarty: It’s both. We’ve reached the peak of oil production, which doesn’t mean we’re going to run out of oil, but we’ve run out of cheap oil. When the Saudi oil fields opened in the 1940s and 1950s, their return on investment was $350 per barrel. When OPEC formed in 1959, they were profitable selling Saudi oil at $0.10 a barrel. The cheap, high-grade, high-quality oil is all gone now, and the days of finding giant oil fields with high-grade oil that was relatively inexpensive —such as Ghawar in Saudi Arabia and the Cantarell off Mexico—are gone. They’re history.

…

TER: Could you expand on that counterparty risk and the concept of investing in something real to minimize investors’ chances of waking up poor?

BM: With the collapse of the major global commodities broker MF Global at the end of October, up to $2.5 billion worth of its customers’ money evaporated. Investors as financially sophisticated as Trends Journal Publisher Gerald Celente went to bed rich and woke up to worthless accounts.

Some very important concepts, hypothecation and re-hypothecation, are involved when it comes to derivatives, which are financial instruments that gain their value from something else. Suppose that you open a commodities account because you expect the price of gold, silver or oil will go up. You deposit $100,000 margin and buy a contract for gold, silver or oil. Let’s say things go wrong because of hypothecation, re-hypothecation and counterparty risk.

Here’s what happens with hypothecation. The broker-dealer usually goes to a bank and borrows money to loan you. But in this scenario you put up twice as much as the margin required, so he doesn’t even loan money to you. Regardless, you are required to sign a statement saying you will allow the broker-dealer to hypothecate the account. This pledges everything in your account to the bank. Broker-dealers borrow money from the bank at, say, 3% and loan it to customers at maybe 6%. That’s how they make money. In this scenario, the problem is that the broker-dealer created a risk for you that never occurred to you. If the broker dealer reneges on the loan, the bank can demand all the assets you have deposited even if they are in your account and you don’t owe anyone anything.

Read more: Business Insider Bob M Interview

http://www.gocomics.com mattwuerker

WSJ OpEd
Bloomberg explains

Alex Gourevitch writes in the Chronicle of Higher Education ( referred by Bruce Schneier ) about the Fear Complex:

Quoted from An Era in Ideas: Fear

August 7, 2011
Fear

By Alex Gourevitch

In Edward Bellamy’s classic 19th-century novel, Looking Backward, a young man named Julian West falls asleep in 1887 and awakens in 2000.

….

One major element is that we do not even know what to reach for, what it is that our fears prevent us from achieving. In Looking Backward, the utopian vision of America in 2000 had a foothold in the real. There was in Bellamy’s time a universal yearning, buried by the crushing poverty and extremes of industrial capitalism, for something like the shared purpose and human freedom that the book portrayed. A society based on free and equal relationships and cooperative ideals seemed possible.

We, on the other hand, have trouble imagining that kind of society. We’re told that utopia leads to dystopia; that we should fear our hopes. Fear itself has changed, from an obstacle to a diversion. For Bellamy, fear was repressive, because it prevented the expression and realization of higher ideals. In the war on terror, eliminating fear has become an end in itself. Of course, we can all agree we want to be safe. But that is a dodge, a way of avoiding the harder discussion about what it means to live free and equal lives.

The great lie of the war on terror is not that we can sacrifice a little liberty for greater security. It is that fear can be eliminated, and that all we need to do to improve our society is defeat terrorism, rather than look at the other causes of our social, economic, and political anxiety. That is the great seduction of fear: It allows us to do nothing. It is easier to find new threats than new possibilities.

A decade after 9/11, we look backward and find ourselves in all-too-familiar surroundings. We have, in fact, accomplished very little. We have yet to do any of the serious thinking that might carry us beyond the banal, stifling quest for security. That kind of thinking would require us to have a different relationship to fear: a willingness to accept it, even cause it.

Radical demands for justice are dangerous—they inspire fear in those committed to the injustices of the present.

Alex Gourevitch is a postdoctoral research associate at the Political Theory Project at Brown University. He is an editor of Current Moment, a blog.

Gourevitch sounds a bit of a Utopian himself, and probably he and I disagree on what’s possible. I don’t think we have space or time or energy to spend on quixotic crusades for justice – at best these get bogged down in legal minutia and at worst they produce the heavy-handed nanny state the conservatives complain about. In any case, there are much bigger problems on the horizon. Egalitarianism and fair distribution of wealth are products of rich, educated society, and we are falling back in both measures. Instead, we are confronted with the population and energy-use bomb predicted back in the 1970′s. Understanding that we aren’t very good at predicting the timing of resource shortages, it’s perfectly clear that the raw numbers are inescapable. Sometime, at some population, there is an outside limit on energy use, and economic growth. Like dieting, there are only two answers: be fewer and use less.

Lowering the population radically, while it ages demographically, while we run out of cheap energy, and find that we can’t fund economic growth with cheap credit any more, is a huge undertaking and there is no sign at all that will be accomplished in an orderly way. In fact the military seems a more likely tool than planning, science, and policy.

But yeah, fear has been used to distract the US populace, safety has been the dangling carrot, and it’s all a sham.

These reports show whats really behind so-called Globalization of the auto business. The industry is totally interlinked in a complex mesh of shared suppliers and internal sources. For instance, loss of one nuclear power station in Japan affects jobs in North America. In other words, the great efficiencies of the network are also its greatest vulnerability. This echoes a historical point made by Joseph Tainter ( see this commentary on his ideas) that increasing complexity in civilization leads to its downfall. In scientific terms, it takes ever-increasing energy to maintain the network of civilization, and eventually it takes more energy to prop it up than is produced, and the civilization itself collapses.

The following quotes are all from one source: Automotive News, an industry website. It’s an interesting source because of its specificity. from here:

Japan Automakers Brace for Looming Shortfall Not enough electricity to run plants.

Quake delays Honda r&d by at least two weeks

Ford:

• Restricted dealers from ordering vehicles in 10 paint colors (brilliant black, blackberry, deep cherry red, redline, inferno red, bronze star, rugged brown, hunter green, ivory and billet metallic) produced at factory in Japan.

Chrysler:

• Restricted dealer orders for “tuxedo black” and three red paint shades; affects F-150 and Super Duty pickups, Explorer, Expedition, Focus, Taurus, Lincoln MKS and Navigator.
Europe:
•Will idle Genk, Belgium plant (S-MAX, Galaxy and Mondeo) for five days starting April to conserve parts

Subaru:

U.S.:
• Canceled overtime shifts at Subaru of Indiana (Legacy, Outback, Tribeca and Toyota Camry) until April 1; no parts shortages reported

Japan:
• Extended production suspension through March 31; facing rolling blackouts and supply shortages
•Will restart limited mini-vehicle production March 31

Honda:

U.S.:
• Likely disruptions in North American production beginning April 1 because of parts shortages.
• Orders suspended from U.S. dealers for Japan-built models including the Fit, Insight, CR-Z, Civic Hybrid, Acura TSX and Acura RL. Also affected are a small number of CR-Vs
• April U.S. launch of the redesigned 2012 Honda Civic on schedule

Japan:
• Production halted at Sayama (CR-V, Accord, Fit, Acura RL and TSX), Suzuka (Fit, Civic, Civic hybrid, Insight and CR-Z) until April 3 at the earliest;
•Resuming motorcycle and power product production at Kumamoto Factory March 28
• Expects product development to be delayed at least two weeks; transferred some employees from damaged tech center in Utsunomiya to other sites; expects several months to reopen center
• Hamamatsu (transmission and engine), Ogawa (engine) and Tochigi (powertrain) plants may begin limited parts production before March 27

Toyota:

U.S.:
• North American vehicle and engine plants (13) running; overtime curtailed
• Sent memo to workers in U.S. and Canada March 23, warning thinning supplies will cause some interruptions in production; no definite time frame for stoppages
• Prius availability in the U.S. could be affected by damage to a hybrid battery plant; RAV4 crossover also affected

Japan:
•Resumed limited production of Prius at Tsutsumi plant; Lexus HS250h and CT 200h hybrids at Kyushu plant March 28
•Will halt production of hybrid vehicles in Japan March 30 to check for adequate parts supply
•Will resume production at its Tsutsumi and Miyata plants on March 31
• 18 assembly plants closed indefinitely
• Resumed production of replacement parts for vehicles already on the market on March 17; resumed production of parts for overseas production on March 21
• Damaged: The Central Motor plant in Miyagi, which manufactures the Yaris; the Kanto Auto Works Iwate plant, the Scion xB and xD models; parts plants in Hokkaido and Tohoku
•Delayed Japanese launch of wagon-style Prius; not expected to affect U.S. or European launch