Archive for March, 2009

The World in 2100: A Choice of Futures

Friday, March 20th, 2009

By David L. Brown

Despite all the hullabaloo about global warming, the resulting climate change, and the impact on humanity, I continue to be amazed at the reluctance of those who discuss the subject to face up to the fact that Mother Nature is going to take care of the problem, perhaps quite soon.

A cover story in a recent issue of New Scientist included this image showing how the world might look in 2100 if the average temperature rises by 4º C.

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Now this indicates that a pretty large section of the Earth is going to be quite a bit different from what we are used to. Yellow is desert and brown is uninhabitable. Now this is not going to be very scientific, because I am going to make a wild guess here. If you disagree, please insert the number you think is appropriate. My wild guess: This map indicates that the parts of the world where approximately 95 percent of human beings live is going to become either dry wasteland or totally unfit for human habitation.

So, how can we take this data point and create a conclusion? Well, first I will tell you what the New Scientist article more or less concluded. To wit, that an estimated nine billion people could be relocated to those areas in the far North and along the edge of Australia and a melting Antarctica. (In the interest of fairness, the writer did devote a scant two paragraphs to James Lovelock who opined that such an outcome was unlikely.)

And how is this miracle to be accomplished? Well, by allowing 20 square meters for each of the nine billion people, there will be plenty of space in Canada, Siberia, Northern Europe and so forth to house them. Of course, they will be a bit crowded, but nevermind, the author supposes that all those billions will be living in high rise buildings. Food would be produced by farming the former tundra land by some unexplained means.

Now, I don’t know about you but this sounds a little bit like a fantasy scenario. We will take all the people of the world, Arab camel drivers, Indian rag pickers, Pygmy hunger-gatherers, Wall Street bankers (oops, scratch that, they’ll soon be extinct), and transport them all up to Siberia or someplace in the Arctic region of Canada or Alaska, and put them all together in high rise buildings. All nine billion of them (and no doubt still continuing to breed toward the ten, eleven, twelve billion level)? Well, okay, now let me suggest that the comment she included for editorial balance from Lovelock makes a lot more sense. Here is what he said:

The only places we will be guaranteed enough water will be in the high latitudes. “Everything in that region will be growing like mad. That’s where all the life will be,” says former NASA scientist James Lovelock, who developed the “Gaia” theory, which describes the Earth as a self-regulating entity. “The rest of the world will be largely desert with a few oases.”
So if only a fraction of the planet will be habitable, how will our vast population survive? Some, like Lovelock, are less than optimistic. “Humans are in a pretty difficult position and I don’t think they are clever enough to handle what’s ahead. I think they’ll survive as a species all right, but the cull during this century is going to be huge,” he says. “The number remaining at the end of the century will probably be a billion or less.”

Now here are the two scenarios: First, nine billion people living in high rise buildings while growing crops on former tundra while most of the world turns to scorching desert, or, second, a “cull” during this century that is going to be “huge.”

Well, I know which way I’m going to bet. Meanwhile, we see stories like this one from today;s news:

PRINCETON, NJ — For the first time in Gallup’s 25-year history of asking Americans about the trade-off between environmental protection and economic growth, a majority of Americans say economic growth should be given the priority, even if the environment suffers to some extent.

Now this may sound innocuous on the surface, but think about this: The pursuit of a go-go growth economic model is what has gotten us where we are today, faced with environmental disaster, peak-Everything, famine, economic collapse, and climate change that could make the map above come to be reality. And given the choice between helping stave off the terrible problems that face us, most people in the end vote for the status quo, or even worse, for an impossible return to a condition that is no longer possible.

How will those millions of high-rise buildings be built up there in the presently frigid North considering that we are running out of easily produced natural resources such as oil, iron, copper, and a host of other commodities? Will some Magic Fairy appear and wave a wand? This reminds me of my previous essays in which is invoked The Rabbit of Unreasonable Hope, ready to be pulled out of a magician’s hat to solve all the problems we face.

Unfortunately, there is no fairy, there is no rabbit, there are no easy answers. But that’s okay because even though the problems facing humanity are beyond our ability to solve, Mother Nature is standing by to take control of Her planet once again. She has done it before and she knows what to do. She uses proven tools such as the concept of “overshoot and collapse,” the application of famine, plague, war and death (the famous Four Horsemen). And she can always count on the foolishness of mere human beings to aid her at every step along the way.

Financial Meltdown Mirrored at North Pole

Thursday, March 19th, 2009

by Val Germann

The world’s financial markets and “The Top of the World” are exhibiting a frightening similarity as winter ends: both are melting down.   In a few days the G-20 nations will sit down for a talk as the planet’s flagship currency, the U.S. Dollar,  liquefies around their ankles.  That sinking feeling has to be shared by the world’s polar bears, forced onto land and even to cannibalism by the liquefaction of the Arctic’s ice.  As a contributor to a current article on the TERRADAILY website says:

“We don’t have hard evidence about climate change but we have evidence about the numerous symptoms of climate change on polar bears.”

And those symptoms are very bad news indeed, starting with a continuing decrease in the size and weight of the bears, down more than ten percent over the last quarter-century.   One cause of this sad decline could well be the fact that the bear’s hunting season is three weeks shorter than it was in 1980.  Another is that the loss of sea ice is forcing the bears to swim ever farther in pursuit of seals, their primary food.

Even more disturbing is a new and dangerous behavior on the part of pregnant  bears:

Faced with the growing uncertainty concerning the ice, pregnant polar bears are increasingly denning on land, researchers have noticed.  In northern Alaska, two-thirds of bears now choose to den on land in order to give birth early in the year, an inverse proportion of what was observed a few years ago.  “They are refugees rather than immigrants. This is not a chosen exile, this is a forced exile,” Derocher told AFP.

The bears are much more vulnerable on land than on ice and their food sources farther away.  But even more shocking, and revealing, is the following change in polar bear behavior:

Climate change also appears to have altered the bears’ behavioural patterns.  Several recent incidents of cannibalism in Alaska have observers worried.  “We knew of polar bears killing and eating other polar bears,” Steven Amstrup, a research wildlife biologist with the U.S. Geological Survey, told AFP.  “But the difference was that this time the polar bears were clearly deliberately hunting other bears, attacking for example females in their denning area” in northern Alaska, he said.

It surely cannot get much worse than that, attacking and killing the pregnant females of your own kind.  The future for the world’s polar bears must be bleak indeed if this behavior does not stop, and soon.

But that is not likely to happen because, as one expert said:

“Any of these symptoms taken alone might not be so worrying but seen in their totality it shows a bleak picture of how climate change is impacting polar bears already now,” said Geoff York, a polar bear expert at the World Wildlife Fund.  “And it’s only forecast to get worse,” he said.

And so it may be true that the polar bear is going the way of Lehman Brothers, or that particularly ursine financial entity — Bear Stearns.  Those companies were “eating their own,” too, just as the polar bear seems to be doing, most likely with similar ultimate results.

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Trade Barriers Going Up Around the World

Monday, March 16th, 2009

By David L. Brown

Protectionism is rising as nations struggle to protect their economies in the face of a growing crisis. According to the Financial Times today, Mexico has announced it will place new tariffs on $2.4 billion worth of U.S. products. The action came in response to the cancellation of a pilot program to allow Mexican tractor-trailers to travel over U.S. highways.

According to the FT story, the targeted list is expected to include “politically sensitive” agricultural products. Under the North American Free Trade Agreement, cheap American corn and other farm produce flooded our southern neighbor, forcing millions of subsistence farmers off the land. Many moved to Mexico City and other population centers, causing urban decay and poverty to spread. Others migrated North as illegal aliens to seek jobs in America.

As the specter of famine looms over the world as a result of dwindling food resources, greater demand, and high costs, we can expect more nations to take protectionist actions. Already a number of Asian countries have banned exports of key foodstuffs such as rice. The intent is to assure enough food for domestic consumption, but the result is to reduce the amount of food available in world markets. In effect this constitutes hoarding at the national level.

What we are witnessing is the unwinding of so-called Globalization, a return to a world economy enmeshed in a tangle of trade barriers and protectionism. That bodes extremely ill for nations that rely heavily on exports and whose revenue streams could dry up as trade barriers rise. Ironically, it is also bad news for nations that rely on imports, particularly of food. It seems there can be no winners. Many poor nations are already facing potential famine and actions that raise the cost of food will only fan those flames.

The dream of Globalization advocates may have been misguided, and in fact I believe it was unwise to assume that all nations could enter into international trade as equal participants. However, having gone down that road, if many nations begin to make U-turns toward new isolationist models it will create chaos.

The world is experiencing a “perfect storm” of colliding factors, including the pressure of over-population, collapsing economies, resource depletion and climate change. No matter where you look there are serious problems that need to be addressed, and yet no resources are available with which to do so. At this time of greatest need, most of the world’s nations are essentially bankrupt. We are like people trapped in a house with fires breaking out in every room,  no fire extinguishers at hand and the local fire department on strike.

Like the governments of other nations, the U.S. has been culpable in this, through such actions as placing limitations on bail-out money stipulating that the funds must be spent on products made in  the U.S.A. While such knee-jerk actions seem reasonable and patriotic on the surface, they are seen by our trading partners for what they are: Old-fashioned protectionist trade barriers.

At the heart of the dispute with Mexico are similar factors, with the Teamster’s Union raising a stink about the perceived competition from non-union Mexican drivers. It has been claimed that Mexican trucks are unsafe, and yet studies have shown that in many cases American trucks are even less so.

The spread of protectionism is just one aspect of the overwhelming tide of change that is taking place in  the world. Things will never again be like they were, and there is little reason for optimism about the direction in which we are heading.

Dying Dinosaurs on Life Support

Thursday, March 5th, 2009

By David L. Brown

We all know that investments have been evaporating like dry ice on a July afternoon. The Dow Jones average has dropped by more than half since its peak about 18 months ago.

That’s bad enough, but the real damage to major iconic corporate stocks has been far more terrible. Here are some examples:

General Electric, one of the bluest of Blue Chips, stood at over $40 in the Fall of 2007. As I write today it is at $6.76. That’s a drop of about 85 percent.

Eastman Kodak, another old-time favorite of conservative investors, was at around $30 a share in 2007. Right now it’s at $2.44. A drop of approximately 92 percent.

Bank of America, which sold in the range of $53 in 2007, today is at $3.21. A decline of 93 percent.

Think that’s bad. Try these examples:

General Motors. Peak price in 2007: about $43 a share. Price right now: $1.83. A decline of more than 95 percent.

But wait, it gets worse…

CitiGroup, sold for around $55 in 2007. Current price $1.01. A drop of roughly 98 percent.

And worse…

AIG, which (was) the nation’s largest insurance company. Sold for around $73 a share in 2007. Price today: $0.36. Decline in value: about 99.5 percent.

When separated from the overall market averages such as the Dow, which are terrible enough, the hollowing out of major corporations such as these is absolutely stunning. Can there be a future for a company whose shares sell for a fraction of their former values? Perhaps not. Several of these companies have already received life support from the government, including major commitments of taxpayer money to keep AIG, Citi, BofA and GM above water. None of this has seemed to have much effect on the downward spiral.

The outlook for most of these former corporate giants is grim. Today, for example, GM’s auditors reported “substantial doubts” that the company can avoid bankruptcy. And the review stated that putting GM into bankruptcy protection would cost the government up to another $100 billion. Well, that’s for Chapter 11, with the goal of reconstituting the company. What about Chapter 7, liquidation?

These companies and others like them were the cornerstones of the late 20th Century American economy. Some claim that these entities are “too big to fail”. But those are just words, as are these: “They are too big to save.” It’s almost certainly true that there isn’t enough money on Earth to “save” all these failing companies. It’s time to apply the principles of triage, applying financial aid only to those that have a reasonable chance to survive.

Keeping dying dinosaurs alive on life support isn’t necessarily a wise choice. Better to let them slip into the Great Corporate Beyond and get on with letting them be replaced with new entrepreneurial models. History is filled with examples of sweeping technological changes. In the early days of America, steamboats and canal barges were the big thing. Then the era of railroads came along and made those models redundant. That was followed by the age of the internal combustion engine, the era that is now drawing to a close.

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