Tuesday, April 4, 2023

Why a desperate America may soon annex its 51st state

  What's wrong with America? Is the country in terminal decline as hinted by Simon Black below? Hard to say although most recent news seem to indicate that this is indeed the case. 

  If you live in a nice suburb, it probably doesn't feel that way... yet. Although objectively, walking in any European city is now a much better experience than drug infested downtown San Francisco. (Most other cities except a very few being anyway unwalkable.) Taking the train in Japan, Korea or now China likewise is a 21th Century experience. In the US, it's more like the early 1900s. Infrastructure is crumbling while the country is over-extended abroad "managing" it's world order that more and more countries reject.    

  In a way, today's America feels very much like 1975 London with its abandoned docks along the Thames, reflecting past glories and present decay. London did rebound in the following decades although real power moved from Westminster to Washington. Just as England's punks defined the era, LGBT woke crowds will probably define today's sunset of American hegemony. From blue spiked hair to pink generals, it looks like people prefer their downfall to be colorful!

by Simon Black via Sovereign Man

At the center of Sovereign Man’s core ethos is the indisputable view that the United States is in decline.

I take absolutely zero pleasure in writing that statement. But it’s incredibly difficult, if not impossible, to objectively appraise the bountiful evidence at hand and not reach the same conclusion.

Consider the following:

US government finances are appallingly bad. The national debt exceeds 100% of GDP, annual deficits run into the trillions of dollars with no end in sight, and major trust funds for Social Security and Medicare will soon run out of money.

Political incompetence is mind-blowing; politicians fail to be able to even identify problems, let alone understand them, let alone reach compromises to solve them.

Ditto for central bank incompetence. These people simply cannot understand how, by keeping interest rates at zero for nearly a decade and conjuring trillions of dollars out of thin air, they engineered record high inflation. And they also fail to understand how their actions to ‘fix’ inflation are causing widespread havoc in the economy and financial system.

Social divisions across the country are extreme. Censorship and cancel culture prevail, and corporations now wag their fingers at their own customers to “be better”.

The education system is in pitiful shape, with many politicians and school board officials turning classrooms into activist training camps.

The population is terribly unhealthy. Obesity and drug addiction are epidemics. Plus there’s an obvious mental health crisis that drives far too many people to commit horrific acts of violence on innocent people, including children.

National security is in decline. Military readiness is down, yet top officials seem more concerned about diversity and inclusion rather than the ability to prevail in war.

The rule of law has been perverted, including for political purposes and self-aggrandizement. We just saw another example of this yesterday.

Even the national fertility rate continues plummeting– an indication of the rising cost of living and social apathy.

The Wall Street Journal recently published a series of polls indicating that most Americans doubt their children will have a better future; pessimism is strong.

They also found that certain values which once defined American culture, including a sense of community, hard work, and civility, are no longer important to the majority of people.

This is all happening at a time when adversaries are circling. And that includes China.

Now, usually whenever I bring up China, there are always people who are quick to assert that China cannot possibly replace the US as the dominant superpower because they have just as many problems.

And it’s true that China has a ton of problems. They have their own debt issues, financial system chaos, and economic problems. They have social challenges, a major demographic crisis, and even a serious issue with childhood obesity.

But no civilization or empire throughout history has ever been problem-free.

Ancient Rome, even during its early republic days, had enormous problems. They had to deal with constant revolts, civil war, the genocidal dictatorship of Sulla, famine, war, plague, and more.

Yet there’s an enormous difference between taking on challenges while you’re on the rise… versus succumbing to them while on the way down.

Rome was able to deal with its challenges and continue its rise to become the dominant superpower. China may be able to do the same.

The US finds itself in a precarious position where they have a mountain of compounding problems… and no ability to even slow them down, let alone solve them.

I’ve written before about what I call the “Four Forces of Decline”, which I define as

1) Forces of History– the inevitable, cyclical nature in the rise and fall of Empire. No empire, no civilization in human history has ever retained the top spot forever, and most tend to experience similar challenges on the way down.

2) Forces of Society– the vicious way in which a society eats itself from within, vanquishing the ability and inclination to solve complex problems.

3) Forces of Economy– the debilitating toll that enormous debts, deficits, and currency inflation take on a nation and its people.

4) Forces of Energy– when energy is cheap and abundant, prosperity reigns. When energy is expensive, prosperity wanes. The relationship couldn’t be more clear.

Today’s podcast puts all of these together, with a particular focus on #4, Forces of Energy.

Part of being the dominant superpower in our modern world means having access to abundant energy. Yet the US government has spent the last few years trying to destroy its energy (oil and gas) industry.

They’ve been pretty successful. The President of the United States hardly misses an opportunity to bash oil companies. Politicians pass new rules and taxes to punish them. The media beats up on them. Investors have pulled funding for them.

So it shouldn’t be a surprise that US oil production, while not in terminal decline, is failing to keep up with growing demand.

Shale oil is especially problematic given that most of the highest quality “tier 1” sites have already been drilled. Many are already in decline.

This is a big deal. Shale oil is the reason why the US achieved near energy independence. With shale in decline, the US will be forced to import a LOT more energy (which, again, is critical for prosperity) from places where they have an increasingly adversarial relationship.

Russian oil is obviously off the table. So is Iranian oil. Saudi Arabia is rapidly becoming cozy with China; in fact the Saudis are now publicly considering to sell their oil in Chinese currency, the renminbi.

This is an enormous threat to the US. Saudi Arabia has been selling oil in dollars for decades; they’ve even had their currency, the riyal, pegged to the US dollar since 1986.

This concept of selling oil in US dollars is known as the petrodollar, and it’s one of the key reasons why the US dollar is the global reserve currency.

Anyone who wants to buy oil needs to own US dollars. And that pretty much includes every country on the planet. So foreigners are forced to stockpile dollars, and by extension, US government bonds… simply because they need dollars to buy oil.

As a result the US government is able to get away with the fiscal equivalent of murder. They can run multi-trillion dollar deficits every year. They can wage expensive wars in foreign lands. They can go into debt to pay people to stay home and NOT work…

… and they’ve always had a bunch of suckers overseas– foreigners who have no choice but to buy US government bonds, simply because oil is priced in US dollars.

But what if Saudi Arabia started selling oil in renminbi?

Most likely a LOT of foreigners would dump at least some of their dollars and start holding renminbi as part of their official reserves.

America’s biggest privilege and benefit– its reserve currency– would vanish, practically overnight.

Suddenly the US government wouldn’t be able to run multi-trillion dollar deficits. It wouldn’t be able to go into debt to pay people to stay home and NOT work.

They’d have to be like almost every other country– act with some fiscal responsibility.

Think about it– if the President of Mexico shook hands with thin air, investors would be rightfully terrified and panic-sell Mexican government bonds. If South Korea ran a multi-trillion dollar deficit, its currency would probably plummet.

Back in September we saw the British pound and UK government bonds practically collapse… and the Prime Minister of one of the world’s largest democratically elected sovereign governments was forced to resign… simply because investors didn’t like her economic revival plan.

These issues are all linked. If the US continues to demonstrate incompetence and weakness… if they continue to subvert and destroy the energy industry… and if Saudi Arabia starts selling oil in renminbi…

… the consequences will be life-changing.

This is one of the biggest stories of our lives. It’s easy to miss because it’s playing out over a period of years. It gets lost in the day-to-day noise and the crisis du jour.

But rest assured this is happening in front of our very eyes; it’s a slow motion crash that’s already started.

The outcome isn’t inevitable yet. But nothing about these people’s actions demonstrate that they have the slightest clue what’s going on.

Saturday, April 1, 2023

NASA Engineer Tom Moser Reveals the Truth About Climate Science (Video - 17')

    

At this scale we do not have 200 years but 30 years of reliable satellite data.

We do not know much yet about long term cycles although it seems likely that we are still rebounding from the little ice age towards temperatures equivalent to the Middle Ages optimum.

Worse, solar and cloud effects, by far the most important are not well taken into account in the models.

Finally, we are told that human forcing represents about 20% of the current warming, which if you read the small prints of the models is also the degree of uncertainty.

So the truth is that we do not know if there is currently any global warming or if it is natural variability. Much less if it is man made.

But as a scientists, to say so means no grants for your projects, so almost everyone find "something" at the limit of their models.

So here you have it: Man-made crisis certainly but is it warming? We don't know. So much so that nobody calls it Global Warming anymore, just climate change. An oxymoron which guaranty that you can't be wrong footed.

 Here's a video of Tom Moser of NASA putting some flesh on the bones.


 

Thursday, March 30, 2023

Bombshell GPT-4 - 'Sparks of AGI' (Video - 13')

 As discussed yesterday, the box of AI is open and won't close back. The problem is that a quantum leap has been achieved by Open AI, the creators of GPT-4 and now that we know what can be done, the race is on.

 The video below explains clearly that the next steps will be incremental and therefore relatively easy ones. Consequently, the day to stop and thing as proposed by Elon Musk was "yesterday". Now, it's too late. By just tweaking the parameters, the system will be improved. 

 We have not yet solved the mystery of consciousness but is it has complex as we want to believe? What would happen if you just added the ability to seek goals, the necessity to avoid destruction and to ask questions? These are not very difficult modules to create. True we will only simulate consciousness just as GPT-4 simulates intelligence...  but then how exactly do you differentiate the simulation from reality if they are exactly alike? 


 

Wednesday, March 29, 2023

Musk, Wozniak Call For Pause In Developing 'More Powerful' AI Than GPT-4

  Interesting idea but too late! Competition guaranties that someone will develop a AI with military applications. It is unavoidable. This is how arm races work. We can't even negotiate a  truce in Ukraine. How could anyone renounce a weapon which will give a significant advantage?

Musk, Wozniak Call For Pause In Developing 'More Powerful' AI Than GPT-4

Elon Musk, Steve Wozniak, AI pioneer Yoshua Bengio and others have signed an open letter calling for a six-month pause in developing new AI tools more powerful than GPT-4, the technology released earlier this month by Microsoft-backed startup OpenAI, the Wall Street Journal reports.

Contemporary AI systems are now becoming human-competitive at general tasks, and we must ask ourselves: Should we let machines flood our information channels with propaganda and untruth? Should we automate away all the jobs, including the fulfilling ones? Should we develop nonhuman minds that might eventually outnumber, outsmart, obsolete and replace us? Should we risk loss of control of our civilization? Such decisions must not be delegated to unelected tech leaders. Powerful AI systems should be developed only once we are confident that their effects will be positive and their risks will be manageable. -futureoflife.org

"We’ve reached the point where these systems are smart enough that they can be used in ways that are dangerous for society," said Bengio, director of the University of Montreal’s Montreal Institute for Learning Algorithms, adding "And we don't yet understand."

Their concerns were laid out in a letter titled "Pause Giant AI Experiments: An Open Letter," which was spearheaded by the Future of Life Institute - a nonprofit advised by Musk.

The letter doesn’t call for all AI development to halt, but urges companies to temporarily stop training systems more powerful than GPT-4, the technology released this month by Microsoft Corp.-backed startup OpenAI. That includes the next generation of OpenAI’s technology, GPT-5. 

OpenAI officials say they haven’t started training GPT-5. In an interview, OpenAI CEO Sam Altman said the company has long given priority to safety in development and spent more than six months doing safety tests on GPT-4 before its launch. -WSJ

"In some sense, this is preaching to the choir," said Altman. "We have, I think, been talking about these issues the loudest, with the most intensity, for the longest."

Goldman, meanwhile, says that up to 300 million jobs could be replaced with AI, as "two thirds of occupations could be partially automated by AI."

So-called generative AI creates original content based on human prompts - a technology which has already been implemented in Microsoft's Bing search engine and other tools. Soon after, Google deployed a rival called Bard. Other companies, including Adobe, Salesforce and Zoom have all introduced advanced AI tools.

"A race starts today," said Microsoft CEO Satya Nadella in comments last month. "We’re going to move, and move fast."

One of the letter's organizers, Max Tegmark who heads up the Future of Life Institute and is a physics professor at the Massachusetts Institute of Technology, calls it a "suicide race."

"It is unfortunate to frame this as an arms race," he said. "It is more of a suicide race. It doesn’t matter who is going to get there first. It just means that humanity as a whole could lose control of its own destiny."

The Future of Life Institute started working on the letter last week and initially allowed anybody to sign without identity verification. At one point, Mr. Altman’s name was added to the letter, but later removed. Mr. Altman said he never signed the letter. He said the company frequently coordinates with other AI companies on safety standards and to discuss broader concerns. 

“There is work that we don’t do because we don’t think we yet know how to make it sufficiently safe,” he said. “So yeah, I think there are ways that you can slow down on multiple axes and that’s important. And it is part of our strategy.” -WSJ

Musk - an early founder and financial backer of OpenAI, and Wozniak, have been outspoken about the dangers of AI for a while.

"There are serious AI risk issues," he tweeted.

Meta's chief AI scientist, Yann LeCun, didn't sign the open letter because he says he disagrees with its premise (without elaborating).

Of course, some are already speculating that the signatories may have ulterior motives.

Stanford Virality Project EXPOSED (Video - 9mn)

  At this level of censorship, can the US still be called a free country?


 

The Ruination of Children

  On this site we have exposed endlessly the false statistics and narrative of the Covid pandemic over the last 3 years. But what about the terrible effects the lock-downs had on younger children and adolescents? Have we inadvertently created a lost generation? This to my opinion would be a crime beyond the direct casualties of the vaccines. Here's the report of a teacher on this subject.

Guest Post by Christine Black

ruination of children

 

Imagining the worlds of an 11, 14, or 16-year-old in one of my classes over the last three years strikes me with grief at times. Suddenly, with the flip of a switch, everything these children held onto in the world outside their immediate homes ended.

Friends they laughed and gathered with each day in middle school went away; teachers who greeted them or hugged them in high school or posted their artwork or essays in the classroom disappeared; the Dungeons and Dragons club they attended every Friday night with dozens of high school friends stopped; the young musicians they played with each day at school were ordered to stay home; soccer practice and games stopped; church youth groups did not meet.

Teachers appeared on computer screens and tried to act cheerful and normal as computer assignment lists accumulated. No friends came over; no study groups met. Some parents would not let their children gather with friends until a vaccine came out. Spider-Man did not arrive to pluck them out of a devastated city. Superman did not swoop down to open all the doors to let them back out into parks and playgrounds and ball fields.

Week after week, then month after month, children and teens waited for the isolation to abate, for the crisis to be over. But it went on and on, month after month. When schools did open, masks were mandated and adults ordered students to pull the mask up over their noses as though the small bit of their breath, escaping from the corner of their nostril, would endanger others’ lives. A fully masked face was the rule, and they had to follow. They could not eat with their friends. When they did eat together, they were spaced six feet apart at tables.

School was so bizarre and sad that many students did not want to attend anymore. When school resumed in Virginia, in schools where I taught, children endured seeing their friends disappear suddenly for a government-prescribed number of days. An empty desk appeared beside them because a bureaucratic policy dictated the removal of a child with a positive Covid test or the removal of a child being near another child with a positive test. It was all very confusing.

“I miss Lexi,” one of the sixth graders I taught wrote in her journal. “I hope she comes back to school and doesn’t die.” At another school where I taught, students were given a questionnaire after returning, and almost 30 percent noted that they had seriously considered suicide in the past two years; absentee rates have been as high as 30 percent. The Wall Journal recently reported that 30 percent of teen girls have considered suicide in the past two years. School shootings, fights, and drug use seem to be increasing in schools. A six-year-old shot his first grade teacher in the classroom a few weeks ago.

In classrooms, I have watched the light go out in children’s eyes. Teachers try to control students’ cell phone and screen addictions, yet we constantly struggle. They sneak them, hide, text and scroll. As soon as class is over, devices come out, and their eyes attach to them. Smiles creep onto their faces with dopamine shots to their bodies as they scroll and type. Many play hours of computer games at home. They turn to screens that this culture supplied them, to those other worlds — and why wouldn’t they experience those worlds inside screens as better than this one, after what was lost, after what was forced upon them?

With the flip of a switch, the real world they knew ended. When they were confined to their rooms and houses, friends and music, color and life, humor and competition, all lived inside screens. Why wouldn’t they turn there to those worlds when this world could collapse in an instant? No wonder screen worlds seem better than this one. Are fake worlds better? How will we repair this one?

Children and young people will have to make meaning from what happened. They will have to live with the reality that the world could suddenly collapse as it did — and they, understandably, may wonder if it could happen again. Could someone again flip the switch? How do they rebuild trust? I have had students in my classes who have become visibly muted — as though they are still wearing a mask when there is no mask there any longer. The muteness remains. When I assigned an essay for students to write on someone they admire, a teenaged girl said quietly that there is no one she admires.

And yet, most people are not talking with each other about what happened over the past three years. Children and teens are not talking about it. A friend recently said that she sought a therapist to talk to about her doubts on the Covid period, her confusion and anger and heartbreak. She wanted a therapist who would not admonish her for questioning government and medical establishment actions. But there are no therapists like that, she said. And how would there be when Dr. Aaron Kheriaty, a psychiatrist and professor at a major California university, who led the Medical Ethics Department there, was fired for declining a Covid shot because he had recovered from Covid and knew natural immunity was stronger and better? And when Dr. Mark Crispin Miller, an NYU Professor, specializing in modern propaganda, was bullied, vilified relentlessly, and his job was threatened for doing what good teachers have always done, assigning his students readings to explore different sides of an issue — in his case, articles on the effectiveness of face masks.

In this environment, how can any of us find therapists and psychiatrists to honestly process lockdown trauma, to explore Post Traumatic Stress symptoms caused by it, or to discuss our cognitive dissonance when our perceptions and instincts conflict with government or other institutional lies? How can a child or teenager?

We make meanings from our lives, especially traumatic events, by telling our stories, by sharing them with others. Perhaps children are silent about what happened because they are afraid, because there are two stories, very different and not yet reconcilable.

One story might go like this:

A terrible disease broke out in spring of 2020. Thousands died, and millions more would have if populations everywhere did not make painful sacrifices. Governments around the world ordered businesses, restaurants, churches, bars, schools, libraries, and parks closed. Experts told us to stay apart, even outside, and to submit to regular Covid tests and to test children regularly as well.

We could not travel or gather with friends or family for holidays, club meetings, funerals, birthdays, weddings, or reunions; children’s Little League teams disbanded, and their bands and orchestras ceased playing. Loneliness, losses, disorientation, and trauma spread, but the American people endured the sacrifices, stepped up, and met the challenge, banding together to sew cloth masks, to meet on Zoom, to not leave their houses, and to have groceries and other items delivered to minimize human contact.

When we ventured out, we wore masks, as instructed by the CDC, and we put masks on children, even very small children, and pulled them up over their noses. We told others, sometimes sharply, that masks saved lives. Signs and commercials everywhere reminded us to mask our faces. We stepped away from people passing on the street, turned our faces away, and told our children also to turn away, “to social distance,” even on a hiking trail. Restrictions were severe, but necessary. Children and teens’ lives were especially affected.

We saved millions of lives with these strict measures, which were needed and necessary and made sense. We stayed apart, clamped down, remained extremely vigilant, as experts advised, until a vaccine could be developed, and we could get vaccinated against this terrible disease and have our children vaccinated as well. The vaccines required three to four, and perhaps more, injections. Injections were necessary to stop the spread of the disease, to protect others we came into contact with, and to prevent the disease from becoming even more life-threatening should we contract it.

We got through this terrible period doing what we had to do. We may reassure an 11-year-old sixth grader or a 16-year-old high school sophomore or a 20-year-old college student that these sacrifices and losses were necessary for the health of us all. Events would have been much worse if our country did not lock down, if schools did not close, if our government, many employers, and many colleges did not mandate vaccines for people to go to work or school.

We may tell children the above story in the aftermath of this crisis. Or they may discover another one:

Early death projections from Covid were inflated and wrong. Politicians said millions of people would die if we didn’t stay apart and close schools, businesses, churches, and all gathering places. However, this was wrong. States and counties in the US where people continued living relatively normal lives fared no worse, and some better, than states and counties with the severest restrictions. We could argue this point, but studies and reports continue to be published, showing these realities. Time will continue to reveal truths.

Further, the infection-to-fatality ratio for this disease was very low, meaning that the infection may have been widespread, even before spring of 2020, and continued spreading rapidly across the population, but most people with the infection would not get seriously ill or die from it. Additionally, the test for this disease didn’t work reliably from the beginning and wasn’t intended for the ways it was used, so all the alarming red numbers flashing regularly on screens, proclaiming “cases,” which meant positive test results, didn’t mean much.

Many studies have shown that masks do not work to stop the spread of a virus. Forcing healthy people to wear them made no difference, with lots of knowledgeable health professionals commenting on their ineffectiveness. However, this information, or other information, will not change the minds of those who have already made them up When advertising works, and masks were aggressively and relentlessly advertised, it does not matter what facts are or what the truth may be.

Intuitively, we might conclude that air passes through and all around a cloth or paper mask. Air and breath are everywhere. We can’t control or legislate breath or germs or viruses. Billions of viruses fill our bodies and the world around us. We can wash our hands as a normal health habit — and stay home, take medicine when we are sick, go outside in the sun, but probably didn’t need signs and stickers everywhere, advertising these directives.

Many have taken the Covid shots, but now government bureaucrats and even the vaccine manufacturers have said that the shots do not prevent Covid infection or spread. Most people who get Covid these days have had the shots, and many who have been hospitalized with Covid have had the shots. Sadly, Covid shots seem to be causing harms and deaths, many sources report. Furthermore, many doctors, especially from the Frontline Covid Critical Care Alliance, have studied and offered early treatment, such as Hydroxychloroquine, Ivermectin, with Azithromycin, as well as other protocols to treat this virus from the onset.

Yet, sadly, governments and other institutions barred doctors from prescribing early treatments, while officials, reporters, and members of the public ridiculed, threatened, bullied, and fired doctors for doing what doctors commit to do – treat sick people and try to make them well. Pharmacists have refused to fill prescriptions for these medicines. Many writers have commented that thousands of Covid deaths may have been prevented with early treatments, proven to work.

Vaccines companies and government bureaucrats aggressively promoted and advertised Covid shots when many critics noted that the shots did not go through all the safety testing protocols that vaccines have historically gone through before public use. An Emergency Use Authorization for the Covid shots would not have been possible if governments had acknowledged available early treatments that worked.

Finally, perhaps one of the saddest parts of this story is that children and teens probably do not need these shots for an illness that poses almost no risk to them, and the shots may even harm them. Several European countries ceased recommending Covid shots for healthy children. Pharmaceutical companies and their investors made billions of dollars in profits from these shots that do not work.

I wish the first story above were true, that we had all been in this together, rallying against a common enemy, persevering like refugees, escaping a war-torn county, because that story would be easier for young people and children to assimilate – if it were true. I wonder about the cognitive dissonance children and young people will endure when lies are continually revealed, as they always are. Truths will come clearer in time as light shines on what actually happened.

I am not sure how young people will make meaning from what happened, from what they saw could happen to our culture and to their young lives. How will they make meaning from this if the devastation and losses were betrayals and, in fact, did not make sense? How will they assimilate this time and its aftermath into the stories of their lives when the adults with supposed wisdom and experience perpetrated these acts upon them — and for what reasons? How will we help them?

Is Japan's Population Really Going To Fall By A Third

  Here's a great example in the article below of the Dunning Kruger effect where a little knowledge leads to poor conclusions. In this case it is data without understanding the context which unfortunately is what we see almost everywhere nowadays as data has become easily available while context still takes time to grasp,

 Japan and the UK have very little in common but fine, historical parallels can indeed be helpful to understand the past. But can past data help us understand the future? Mostly no but to some extant population data is the exception. 

 In the case of Japan. Reality is unfortunately far worse than the data suggests.

 In most countries birth rates are much higher in the countryside than in the cities. Not in Japan mostly thank to the very high average age outside the urban areas, often above 60. This means that whatever incentives the government proposes the effect will be minimum.

 Likewise in the city centers, birth rates are extremely low, below 1 child per women just as in Hong Kong or in Korea. There too, incentives will have little effect because the high price of real estate is a natural limitation that few young couples can overcome. 

 We are left with the endless suburbs where most younger people live. But even there, high incentives will change little, maybe a few percents at most. If people saw an increase of purchasing power, which is very unlikely in the current inflationary environment, they would either move closer to downtown or upgrade their home to a larger one before having a second child. 

 So the downward trend of the Japanese population will not slow but will conversely accelerate which is by the way already what we are seeing. The number of birth in Japan in 2022 was below 800,000 which is the number which was expected for 2030 not so long ago.

 To some extent, this diminution of the population will necessarily be compensated by an increase of immigration. This is already the case although because Japan does not offer easily long term residency to foreigners, all the recent arrivals from China and Asia are not counted in official statistics. Still, whatever the number of immigrants is, it won't be able to compensate the dramatic fall of the population which will soon be above 1 million per year!

 Japan has a problem of excessive debt as well as of having exported abroad too much of its industrial infrastructure. To this, we will soon have to add a crashing population. So Japan's GDP which already shrank from 15.6% of the world GDP in 1992 to 5.9% in 2020 will see a further decline in the years ahead. This is unavoidable.

By Russell Clark, author of the Capital Flows and Asset Markets substack,

Japanese demographics is often cited in the secular stagnation story, and particularly by bond bulls.

The UN’s Population Division has a forecast for Japanese population to fall below 80m by the end of the century.

I think it is unlikely that Japanese population falls that far, but first of all you need to understand how unusual Japan is demographically. Japan only has a land mass 50% greater than the UK. In arable land terms, the UK has 50% more than Japan, reflecting the far more mountainous terrain in Japan. 120 years ago, Japan and the UK had similar sized populations, but then Japanese population grew rapidly, while the UK stagnated. If you ever visit Japan, you will notice on train trips between cities that ever single bit of flat land is used. This really gives the impression that Japanese overpopulated their island, and now need to see their population fall.

I can get Japanese population and birth statistics back to 1900, and assuming relatively low (to none) immigration, work out births and deaths by year. A few surprising features is how Japanese births peaked soon after WWII. While there was another rise in the 1970s, it was very low compared to number births before WWII. Intriguingly, 1947 and 1972 show negative deaths. This is reflecting the repatriation of 6 million Japanese citizens from former colonies in Taiwan, Korea and Manchuria, and the return of Okinawa respectively. So after the trauma of World War II, mainland Japanese population actually grew at the end of World War II due to repatriation.

For comparison, the UK saw peak births, in 1901. If there is a demographic crisis, its has been brewing for a very long time. The rise in the UK population is mainly due to net migration. Both Japan and UK saw a countertrend rise in the 1960s and 1970s, which I think was due to pro-labour policies - but I will leave that aside for the moment.

The first part of my argument for a change in birth rates is that changes in technology means that women can have children later. In this area, Japan is a leader. In the last available data I have, 6% of all Japanese births, which is far higher than any other large country.

For me ART births take away age as a constraint on fertility rates. Technology means that women well into their 40s and even 50s can now have children if they want and can afford it. And here we see another positive trend in Japanese fertility rates. Working mothers are having more children are having more children than non-working mothers, after being the minority for years.

Another possible pro-labor shift that could reverse fertility trends is the work-from-home shift. I speak from personal experience that working from home is far more conducive to raising children than office based working. I also know that childcare in Japan is both expensive, and culturally women were expected to quit work to have children, as the above chart shows (at least until relatively recently). As we have seen with recent government actions on green energy, once a crisis is declared, governments can quickly accelerate trends. At some point, fertility rates in Japan will be declared a “real crisis”, and policies of free IVF, and free childcare will transform fertility rates. I very much doubt Japanese population will fall below 100 million people.

Saturday, March 25, 2023

G7 Vs BRICS - Off To The Races

 

   The Russia-China multi-level but especially financial agreement and a "peace" treaty between Iran and Saudi Arabia on the one side.

  Derailments in the US and fires and manifestations in Europe on the other side.

  No wonder few people talk about the economy these days. But we should. Behind the daily news, the world is being restructured as we speak. When this is over, a new paradigm will be in place. Let's hope we can go from here to there without a major conflagration.

Authored by Scott Ritter via ConsortiumNews.com,

An economist digging below the surface of an IMF report has found something that should shock the Western bloc out of any false confidence in its unsurpassed global economic clout...

G7 leaders meeting on June 28, 2022, at Schloss Elmau in Krün, Germany. (White House/Adam Schultz)

Last summer, the Group of 7 (G7), a self-anointed forum of nations that view themselves as the most influential economies in the world, gathered at Schloss Elmau, near Garmisch-Partenkirchen, Germany, to hold their annual meeting. Their focus was punishing Russia through additional sanctions, further arming of Ukraine and the containment of China.

At the same time, China hosted, through video conference, a gathering of the BRICS economic forum. Comprised of Brazil, Russia, India, China and South Africa, this collection of nations relegated to the status of so-called developing economies focused on strengthening economic bonds, international economic development and how to address what they collectively deemed the counter-productive policies of the G7.

In early 2020, Russian Deputy Foreign Minister Sergei Ryabkov had predicted that, based upon purchasing power parity, or PPP, calculations projected by the International Monetary Fund, BRICS would overtake the G7 sometime later that year in terms of percentage of the global total.

(A nation’s gross domestic product at purchasing power parity, or PPP, exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States and is a more accurate reflection of comparative economic strength than simple GDP calculations.)

Then the pandemic hit and the global economic reset that followed made the IMF projections moot. The world became singularly focused on recovering from the pandemic and, later, managing the fallout from the West’s massive sanctioning of Russia following that nation’s invasion of Ukraine in February 2022.

The G7 failed to heed the economic challenge from BRICS, and instead focused on solidifying its defense of the “rules based international order” that had become the mantra of the administration of U.S. President Joe Biden.

Miscalculation

Since the Russian invasion of Ukraine, an ideological divide that has gripped the world, with one side (led by the G7) condemning the invasion and seeking to punish Russia economically, and the other (led by BRICS) taking a more nuanced stance by neither supporting the Russian action nor joining in on the sanctions. This has created a intellectual vacuum when it comes to assessing the true state of play in global economic affairs.

U.S. President Joe Biden in virtual call with G7 leaders and Ukrainian President Volodymyr Zelenskyy, Feb. 24. (White House/Adam Schultz)

It is now widely accepted that the U.S. and its G7 partners miscalculated both the impact sanctions would have on the Russian economy, as well as the blowback that would hit the West.

Angus King, the Independent senator from Maine, recently observed that he remembers

“when this started a year ago, all the talk was the sanctions are going to cripple Russia. They’re going to be just out of business and riots in the street absolutely hasn’t worked …[w]ere they the wrong sanctions? Were they not applied well? Did we underestimate the Russian capacity to circumvent them? Why have the sanctions regime not played a bigger part in this conflict?”

It should be noted that the IMF calculated that the Russian economy, as a result of these sanctions, would contract by at least 8 percent. The real number was 2 percent and the Russian economy — despite sanctions — is expected to grow in 2023 and beyond.

This kind of miscalculation has permeated Western thinking about the global economy and the respective roles played by the G7 and BRICS. In October 2022, the IMF published its annual World Economic Outlook (WEO), with a focus on traditional GDP calculations. Mainstream economic analysts, accordingly, were comforted that — despite the political challenge put forward by BRICS in the summer of 2022 — the IMF was calculating that the G7 still held strong as the leading global economic bloc.

In January 2023 the IMF published an update to the October 2022 WEO,  reinforcing the strong position of the G7.  According to Pierre-Olivier Gourinchas, the IMF’s chief economist, the “balance of risks to the outlook remains tilted to the downside but is less skewed toward adverse outcomes than in the October WEO.”

This positive hint prevented mainstream Western economic analysts from digging deeper into the data contained in the update. I can personally attest to the reluctance of conservative editors trying to draw current relevance from “old data.”

Fortunately, there are other economic analysts, such as Richard Dias of Acorn Macro Consulting, a self-described “boutique macroeconomic research firm employing a top-down approach to the analysis of the global economy and financial markets.”

Rather than accept the IMF’s rosy outlook as gospel, Dias did what analysts are supposed to do — dig through the data and extract relevant conclusions.

After rooting through the IMF’s World Economic Outlook Data Base, Dias conducted a comparative analysis of the percentage of global GDP adjusted for PPP between the G7 and BRICS, and made a surprising discovery: BRICS had surpassed the G7.

This was not a projection, but rather a statement of accomplished fact:

BRICS was responsible for 31.5 percent of the PPP-adjusted global GDP, while the G7 provided 30.7 percent.

Making matters worse for the G7, the trends projected showed that the gap between the two economic blocs would only widen going forward.

The reasons for this accelerated accumulation of global economic clout on the part of BRICS can be linked to three primary factors:

  • residual fallout from the Covid-19 pandemic,

  • blowback from the sanctioning of Russia by the G7 nations in the aftermath of the Russian invasion of Ukraine and a growing resentment among the developing economies of the world to G7 economic policies and

  • priorities which are perceived as being rooted more in post-colonial arrogance than a genuine desire to assist in helping nations grow their own economic potential. 

Growth Disparities

It is true that BRICS and G7 economic clout is heavily influenced by the economies of China and the U.S., respectively. But one cannot discount the relative economic trajectories of the other member states of these economic forums. While the economic outlook for most of the BRICS countries points to strong growth in the coming years, the G7 nations, in a large part because of the self-inflicted wound that is the current sanctioning of Russia, are seeing slow growth or, in the case of the U.K., negative growth, with little prospect of reversing this trend.

Moreover, while G7 membership remains static, BRICS is growing, with Argentina and Iran having submitted applications, and other major regional economic powers, such as Saudi Arabia, Turkey and Egypt, expressing an interest in joining. Making this potential expansion even more explosive is the recent Chinese diplomatic achievement in normalizing relations between Iran and Saudia Arabia.

Diminishing prospects for the continued global domination by the U.S. dollar, combined with the economic potential of the trans-Eurasian economic union being promoted by Russia and China, put the G7 and BRICS on opposing trajectories. BRICS should overtake the G7 in terms of actual GDP, and not just PPP, in the coming years.

But don’t hold your breath waiting for mainstream economic analysts to reach this conclusion. Thankfully, there are outliers such as Richard Dias and Acorn Macro Consulting who seek to find new meaning from old data.

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