Sunday, May 16, 2010

Soil Harvest

In Canmore, owing to the bears, it is verboten to have outdoor composters. So our indoor vermiculture worms have been busy converting our vegetable waste into topsoil. I wasn't big on the idea at first as there is an occasional odor from the worm box. You might say they bring odor out of chaos. But after our first big harvest of soil, I'm definitely a convert. I no longer need to buy topsoil which I badly needed for my indoor plant pursuits.

These piles are just the worm castings. What was once table scraps is now very productive (and odorless) topsoil. We even had enough to share with some gardening friends from Calgary.

After scooping into piles, the worms scurry to the bottom of each pile where they can be easily collected and returned to their box.

As I'm off to the woods this weekend for a few months, I'll have to wait till I return to put the soil to use but I'm anxious to see how productive it is.

Wednesday, May 12, 2010

Snowstorms kill hundreds of cattle

from the Calgary Herald today
May 12 2010

Ranchers in southern Alberta's Cardston County are in emergency mode after a barrage of spring snowstorms killed hundreds of cattle.

Losses are mounting as melting snow reveals calves that succumbed to the winter-like weather of the past couple of weeks, said Reeve Cam Francis.

The county declared itself a "disaster area" earlier this week, Francis said, noting that some ranchers lost more than 100 calves

Read more:

I realize that weather anomalies happen all the time. But we are told all the time that we must act now to stop global warming yet you would think that if cold weather in the middle of May is killing cattle, perhaps the rush isn't so great. I realize that AGW theories never precluded having cold weather, but it seems we are being told of catastrophic warmth when the only real catastrophes seem to be cold. There's something Orwellian about that no mater how anecdotal this story is.

Monday, May 10, 2010

Housing, Wages, Illusions.

When I first started to unlearn the Keyensian nonsense I learned in the economics classes I took in University, I found the concept of malinvestment strange. For example, Austrians warn that when interest rates are too low, money flows to malinvestments. I thought this didn't mater in the larger sense because the money "flowed and multiplied through the economy" regardless. After a few simple thought experiments from good authors such as Henry Hazlitt, I now understand the implications.
To see recent malinvestment on a grand scale one only needs to look at the US housing market. Low interest rates for a decade caused a speculative housing boom. Currently there are 20 million empty units in the US! Thats enough vacancy to house Canada! That is the face of malinvestment! It's true that people produced those houses and got paid for their work but now, that capital is just locked up, unavailable and useless. It should be obvious that with that kind of surplus, housing prices must go down. Unfortunately, the government is trying to not let this happen by giving huge tax incentives and reduced interest rates to buy houses. This keeps prices artificially high. It's like a boat filling with water and the government is paying people to get more water in the boat! Given that the vacancy rate is still increasing, that several million houses will be foreclosed on this year, and Fannie will be closing the trough of free money, house prices can be assured to plummet. Anyone who used to build houses will have to find employment doing something else.

The jobs picture in the US is quite funny also. It was reported that some 200,000 jobs were recently created but unemployment rose to 9.9 percent from 9.7 percent. This number bears so little resemblance to actual unemployment it's hard to fathom why it is ever mentioned at all. It's as though temperatures were reported always half their true value! The real number is closer to 22 percent if you bother to include people who don't have a job. For economic stats without the statist political spin see shadowstats. It was started by a finance guy who needed real data for pricing models he built for corporations.

It's ironic that during the recession, minimum wage has risen nearly 40% over the last 3 years. So at a time when wage adjustment is absolutely necessary for economic recovery, the lowest wages are being artificially pushed in the opposite direction. It's difficult to find ways for Main Street to lower prices when wages are rising! Most people who work minimum wage are the young, usually in their first job. It should not surprise anyone then that this is the group with the highest unemployment currently. Disincentives to introductory-type jobs would seem under the circumstances to be exactly the opposite of what is needed.

Government mandates low interest rates and fuels bubbles and then place every obstacle to possible recovery in the way of the economic engine. Then it tries to convince people they are fixing the economy. Terrible.

It occurred to me this week how gullible most stock traders seem to be these days. Today it was announced that the Eurozone had put together nearly a trillion dollars to stabilize the Euro. Of this, 570 billion "comes from" the member nations, 75 billion from the European Central Bank and 300 billion from the IMF. Translation: a trillion dollars got made up.
This is a Ponzi scheme in it's simplest form. Borrowed money must come from savings which are derived from production. Without this saved production, one is forced to print more money if one wishes to spend it. Thats exactly where this money comes from. One fiat currency bails out another. Eventually the music stops and everyone scrambles for a chair. If I were American, I would be in disbelief that my own country, which is totally insolvent, is in any position to prop up a currency with no value. And yet, this news was enough to rally markets? I'm not sure how much of Canadian tax money ended up in this package, but if it's anything, it's too much.

Wednesday, May 05, 2010

Hexette of Notions part ii

Some observations lately:

Will Greece, Spain and Portugal prove to the world that "Austrian economics" explains economic crashes and that Keynesian policies causes them? Greece, rather than merely levy taxes on its citizens, issued bonds which are bought by European banks and then used as collateral to secure loans at the EU central bank. In this way, Greece gets to distribute currency dilution throughout Europe. It also gets to live beyond its means. No one seems to notice that the same mechanics are working within the US. Curiously, measures to control such practices were in place but ignored. All member countries agreed on deficit to GDP restrictions but these were then summarily ignored by everyone. Sadly, these problems can be soon expected with other fiat currencies controlled by clueless Keynesian central banks. I suspect this will be blamed on someone's "greed" and then Keynesianism can go on it's merry way destroying capital and currency. In the short term, the US dollar gets a lift as capital flies out of Europe. It's hard to know how much Euro panic is already priced in, but I would expect gold to do well this year as markets lose this year's gains.

I heard on the radio the other day someone lamenting that if we leave Afghanistan before "the job is done" our soldiers will have died for nothing. I wondered why giving Canadians a meaningful death was one of our mission parameters. Talk about mission creep!

SEC is investigating Goldman Sachs. Seems like early campaign hi jinx. If you bought a car without looking at it and then complained that it was a dud, you wouldn't get much sympathy let alone a court date. The fact that the seller was going to sell it to the scrapyard hardly relieves you of due diligence. As always, if you don't see that the market is a series of voluntary actions, you are doomed to never understand anything.

Arizona passes new law that formalizes how every poor Latino living near the border already gets treated. I'm not a fan of armed men demanding to see my identification, but outrage seems late to the party. Only a few citizens actually enjoyed the rights that are now being trampled. Frankly, I can don't see much difference in the erosion of liberty after this bill.

Glad to see the Canadian government resisting the urge to appear to be doing something lately. Flaherty seems deaf to the cries of the populist bank regulation cries. As unbelievable as it may seem, there have been calls to tax banking products to create a future bailout fund. It's hard for me to put into words how backwards a plan like this is. Many people research MP3 players more thoroughly than their banks and certainly more than their RRSPs. Why the apathy? Because their money is safe because the government insures it. What incentive is there to pull your money from your bank because they have risky practices? The availability of bailout money eventually makes it necessary to bailout a bank! It's kind of a moot point anyway since interest rates are so low that saving is non existent. Since there is no incentive to save, savings are replaced by speculations like the stock market and real estate. Which get over inflated and adjust sharply causing huge losses and the cycle goes on and on. Unfortunately, suppressed interest rates are popular with voters and thus we have institutionalized economic instability.

"Hide the Decline" climate alarmist Mann is being investigated by the Virginia attorney general. Since Mann's work was paid for by the state, the AG is looking at whether any of his actions violate those contracts. It should be an interesting test case that will at least shine a light on the level of professionalism applied to tax payer money. The Va University investigation was a joke, as was the UK parliament inquiry on the climategate emails. Unlike the other investigations to date, this investigation promises to have some testimony by experts with opinions different from the accused.