Canada's Place in the Global Economy

[Edward Campbell]

Rebuild the Anglosphere? Aye!

http://blogs.telegraph.co.uk/news/danielhannan/100124393/a-generational-chance-to-recast-britains-foreign-policy/

Daniel Hannan forgets, as people often do, two important Asian Anglosphere candidates: Singapore and Malaysia; the latter is a much better candidate than Pakistan, at this time anyway.

Hannan does mention the Nordic nations, as he should; Denmark, Iceland and Norway are NATO allies and non-Euro (€) countries. Ireland and Finland are both € members, now - one weak and the other economically strong; Sweden is non-€ and reasonably solid.

 

[a_majoor]

The Angosphere does not have to be 100% "anglo" so long as the members share most of the basic values of Classical Liberalism as invented in England back in the 1700's (Life, Liberty, free speech and association, unfettered use of property and the Rule of Law would be the biggest ones), along with a willingness to take action.

The 2004 Tsunami made me think that Japan should be one of the "honourary" members of the Anglosphere, and the Netherlands also has a claim. I agree with the Nordic states as "honouaries", and maybe the Asian Tigers (but there will be much more cultural "friction" there).

Many Commonwealth nations are really no longer proper members of the Anglosphere; having shed a lot of the cultural inheritance of the Empire/Commonwealth, so I would not go out of my way to include them.

 

[Kirkhill]

If Germany, France, Belgium and Luxembourg are the heirs of Charlemagne.  The Baltic States, Britain and Ireland, and all of Britain's spawn could fairly be described as the heirs of Canute...

Britain has been a Danish country since Clovis left the German Confederation and cosied up to the Romans.

 

[Edward Campbell]

More on the Anglosphere in this column which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/report-on-business/commentary/neil-reynolds/the-anglosphere-yet-reigns-supreme/article2274566/

The anglosphere yet reigns supreme

NEIL REYNOLDS

From Monday's Globe and Mail
Published Monday, Dec. 19, 2011

If Rome could survive Caligula and Nero, says American geographer Joel Kotkin, the United States can probably survive George W. Bush and Barack Obama. Indeed, he says, the U.S. and its “anglosphere” allies – Britain, Canada, Australia and New Zealand – will continue to be the primary economic, scientific and cultural force in global commerce well into the 21st century. The economic and political crises of the moment will pass. For the English-speaking world, the best is yet to be.

Author of the 2010 best-selling The Next Hundred Million: America in 2050, Mr. Kotkin is singularly optimistic in his latest assessment of a world in which the anglosphere appears to be in truculent decline. The U.S. and Britain, after all, are experiencing serious crises of confidence. Now, in The New World Order, a study published in November by the London-based Legatum Institute, Mr. Kotkin and nine academic associates conclude that the anglosphere will remain the ascendant player on the world stage for a long time to come.

Mr. Kotkin bases his prognostication on a strategic global review that rates kinship – ethnic and cultural connections – as a better indicator than geography of long-term economic success. Thus, he defines the “sinosphere” as a tribal grouping of China, Taiwan, Hong Kong and Macau; on the other hand, he defines the “indosphere” as simply India, all its important tribal groupings self-contained.

Along with the anglosphere, Mr. Kotkin says, the sinosphere and the indosphere will emerge as the three most important spheres of influence in the 21st century. In itself, this is conventional enough – although more explicitly dismissive of continental Europe (and Russia, too) than most such forecasts. But Mr. Kotkin puts the anglosphere in a class of its own.

The anglosphere accounts for 26.1 per cent of global GDP ($19-trillion U.S.) – the same share the British Empire held at its height. The sinosphere accounts for 15.1 per cent ($11-trillion); the indosphere 5.4 per cent ($4-trillion). On a per-capita basis, the anglosphere leads by lopsided margins: the anglosphere, $45,000 per person; the sinosphere, $7,500 per person; the indosphere, $4,000 per person.

“Today, the anglosphere is predominantly a union of language, culture and shared values,” Mr. Kotkin says, with a population of 400 million. Beyond the anglosphere itself, two billion other people live in countries with a strong English-language bias: the countries of the Commonwealth, for example, and Singapore – which, its Chinese population notwithstanding, is a country where English is dominant.

“Since the Second World War, English has replaced French, Russian and German as the primary language of business and science,” Mr. Kotkin notes. English is now spoken by 40 per cent of Europeans, French by just 20 per cent.

Further, the ascendancy of English in Asia, Mr. Kotkin says, “all but cements its status as the world’s ‘world language.’ ” The number of Chinese who speak English will soon outnumber the English-speaking population of the anglosphere itself.

In cultural industries – movies, television, books, news media – the anglosphere has no real rival. It exports $20-billion in cultural goods a year; the rest of the world, $16-billion. And global demand keeps soaring. In Latin America, sales of anglosphere cultural goods increased last year by 25 per cent; in China alone, by 40 per cent.

The anglosphere has a comparable lead in science. U.S. scientists publish three times as many technical papers as Japanese scientists – who rank No. 2 in the world. (Canada rates 7th, equal to Italy.) Of the top 500 software companies in the world, 450 are based in the anglosphere.

Equally important, Mr. Kotkin says, is the unique capacity of the anglosphere to attract immigrants – and its ability to “incorporate” cultures. In the past 10 years alone, 14 million people have emigrated to the anglosphere, among them 27 per cent of the 20,000 Chinese entrepreneurs whose incomes exceed $15-million a year.

Winston Churchill was always a great champion of an English-speaking union. Indeed, he regarded it as “a common duty of English-speaking people to the human race.” This sounded for a while like a requiem for a dying empire. But Britain still stands apart from Europe, its alternative destiny, and the notion no longer seems quite so quaint. Note the U.S. decision a few weeks ago to build a forward military base in Australia. Churchill’s voice rings louder these days.

The problem for the Anglosphere, for the past generation or so, has been failing American leadership - the Anglosphere began to fall into disrepair when John F Kennedy came to power; he was very much a Europhile and, consequentially, a bit of an Anglophobe - more important he was an instinctive unilateralist, as were most of his successors, including Reagan and  Clinton. America has come far, far away from the constructive, enthusiastic internationalism of the Truman/Acheson and Eisenhower/Dulles era; given the state of the world we, the world, need more Truman/Eisenhower and less, far less, Bush/Obama/(Gingrich? Romney? Perry? Bachman?).

 

[a_majoor]

Given the relative size and power of the "Indiasphere", and the fact that it should actually be considered part of the Anglosphere, I think we may see real Anglospheric leadeship emerge from that part of the world.  Since India is in an "intersting" position, needing global maritime trade and being situated next door to two competing "civilizations" (the Sinosphere and the Islamic civilization), there are enough challenges to make Indian leaders look for wide ranging solutions and to link up with other maritime powers (who are mostly part of the Anglosphere) there are lots of reasons to believe they will have to rise to the challenge. They have the human resources to do so as well, India, after all, has an amazing educational system and now counts 300 milion people in the middle class; similar in number to the entire population of the United States.

 

[Edward Campbell]

Going all Mackinderish, both China and India lack the great, resource and agriculture rich "heartlands," which America and Russia have and which Britain had (in the form of Australia, Canada and South Africa). China has some, limited, "heartland" and it is willing to pay Russia for all the resources East of the Yenisei River - a region China regards as Asian and therefore, 'open' for exploitation by Asians. India is less well positioned ... except that it is close to resource rich Africa, which also has considerable agricultural lands. Of course, China is already in Africa but there is always room for one more when it comes exploiting those who are unable (or unwilling) to fend for themselves.

Sir Halford Mackinder, (15 February 1861 – 6 March 1947)

 

[a_majoor]

I agree with some of the premise that we are into the conditions of a global restructuring, especially with the need for massive deleveraging, the migration of global manufacturing and the abolition of traditional "gatekeepers" due to the communications revolution. The length of time may not be as prolonged as projected, since one of the other ongoing revolutions is the rescaling of things away from large centralized units (be it factories or power plants) to smaller decentralized units that are far more responsive to local markets. Even education will undergo a revolution as people will be able to access lessons and knowledge directly over the internet (such as the Khan academy www.khanacademy.org/).

This still has implications for Canada, since a large portion of our economic power does derive from the large scale export of resources such as minerals, timber and agriculture; economic activities which do benefit from the economies of scale. Will we be able to restructure, or will we see fast moving "Tiger" economies overtake us? (Tiger economies may even be regional in nature, as the example of Texas demonstrates).

http://www.nationalreview.com/articles/286877/long-long-depression-matthew-lynn

The Long, Long Depression
Better days are ahead — in the 2030s.

By Matthew Lynn

The markets were on a roll. New companies were being listed every few days. Germany had a new currency, and its mighty exporters were doing business around the world. Greece had merged its currency with that of France and Italy in a bold experiment in monetary union. A massive new continental economy was flooding the world with cheap goods, disrupting old industries. And new technologies were creating global markets, where money and information zipped from bourse to bank virtually instantaneously. Until the crash came, it seemed as if everyone would keep on getting richer and richer forever.

You could be forgiven for thinking that was a description of New York in 2008. Or London in 2000. Or Shanghai right now. But actually it is Vienna in 1873.

In that year, the Austrian capital was the epicenter of one of the great bubbles of the Victorian era. Money was flooding out of the new, unified German economy, and much of it landed in the lightly regulated Vienna bourse. Over the course of three years, more than a thousand companies joined the market. Preparations for the 1873 World Exhibition in Vienna led to a massive building boom. The Austrian rail network doubled in just five years. Over six months, the Vienna market tripled in value. Then, in May 1873, it all crashed spectacularly. The market plummeted and had to be temporarily closed. The panic quickly spread to Germany, leading to what became known as the Gründerkrach, or “Founders’ Crash,” because it came so soon after the Gründerzeit, or “Founders’ Boom,” that had followed unification.

By November, it had spread to Wall Street, sparking a collapse that started when Jay Cooke & Company, a bank that had been one of the main financiers of the American Civil War and was among the most prominent finance houses on Wall Street, suspended payments on its bonds. “The brokers stood perfectly thunderstruck for a moment, and then there was a general run to notify the different houses of Wall Street of the failure,” reported the New York Times the next day. “The brokers surged out of the Exchange, stumbling pell-mell over one another in general confusion.”

The crash marked the start of what economic historians refer to as the long depression. During Edwardian times, it was actually known as the Great Depression, but rather like the Great War of 1914–18, it had to be renamed once a worse catastrophe came along. Either name would do, however; the slump was both long and great. It lasted from 1873 to 1896, and over that period output crashed, unemployment increased, prices fell, and migration soared. Most of today’s German population in the U.S. is descended from Germans who migrated here during the years after the crash, trying their luck in Cleveland and Milwaukee after they were laid off in the Ruhr.

The long depression was, for many years, of interest only to a small band of economic historians. Right now, however, it seems full of lessons for our own times. The parallels are almost spooky. In the 1870s, Germany had recently reunified, just as it has now. A currency union had been formed in Europe but was struggling to stay together. There was a new form of instant communication, the telegraph, that was more revolutionary than e-mail in the time saved over the technology it replaced. There was a new continental economy, and the U.S. was flooding the world with cheap grain just as China now floods the world with cheap computer chips. There was even a wave of financial innovation. In the years leading up to 1873 crash, new industrial banks such as Deutsche Bank had been formed, and the global bond market was fueling the railway boom. And, of course, there was an epic financial bubble that suddenly blew up. The question is whether we are going to witness another two-decade slump like the one that followed the 1873 crash.

Unfortunately, it is starting to look as if we might. The U.K. is already experiencing its longest depression since records began: The current downturn has lasted longer than the slump of the 1930s. Europe is heading for a deep depression next year as the austerity regime that will be needed for the euro to survive starts to bite. The U.S. will struggle to grow significantly. We are used to short, sharp recessions, because those were what we experienced for most of the 20th century. But it is now more than three years since the crash of 2008, and things are getting worse, not better.

When the markets blew up in 2008, policymakers rushed to make comparisons with the 1930s. True, that was a terrible depression, but one that was over quite quickly. The Great Depression was caused by a sudden collapse of demand and shrinking money supply. Now, as then, policymakers assumed that if the government expanded its deficits and central banks printed lots of money, that would fix the problem. It hasn’t, and it should be clear by now that it isn’t going to. (Interpolation; one of the underlying causes of the Great Depression was the need to deleverage the huge debts of WWI)

Why not? Because what we are really dealing with is a structural depression. In reality, the global economy is facing not one crisis, but three.

There is a debt crisis. The developed world has been building up debts on a spectacular scale for three decades. According to McKinsey data, global debt now stands at $158 trillion; that is up from $77 trillion in 2000. Put another way, global debt amounts to 266 percent of global GDP now, compared with 216 percent a decade ago. While economists used to think that debt was largely neutral — on the grounds that once person’s borrowing is another person’s loan — we are now discovering that borrowing on that scale is unsustainable.

Then there is a currency crisis. For most of the post-WWII period, the dollar was the anchor of the global economic system. That worked when the U.S. was the overwhelmingly dominant economy. It doesn’t work anymore. The dollar is now down to 60 percent of reserves, as central banks diversify away from a currency falling in value. At some point we will come up with a new core currency — perhaps the Chinese renminbi, perhaps gold. But until we do, there will be more chaos ahead.

And finally, there is the euro, perhaps the most dysfunctional monetary system ever created. Welding together the currencies of 17 very different economies, without any kind of fiscal union to compensate for the differences between them, was always a high-risk experiment. By now we can surely agree that it has failed. The euro was meant to promote faster growth and greater stability. It has become instead a cause of depression and volatility. Until it is dismembered, there is little chance of the global economy’s returning to stability.

This is a structural depression — just as the long depression of the 19th century was. And it won’t be over until we have fixed the way the economy works.

The trouble is, none of those tasks can be accomplished easily. The euro will take several years to restructure, and if it falls apart chaotically, it will plunge the world into a deep depression. Any replacement for the dollar will take a decade to establish itself. We don’t even have much idea what it might be yet: Historically, the reserve currency has always been either gold or the currency of the world’s dominant economy, but China is not ready to assume that role yet, and the shiny yellow metal has a long way to go to reclaim its place as the ultimate store of value, even if it is taking a far larger share of anxious investors’ portfolios. Only once those things are achieved will we be able to start reducing our debt to manageable levels.

The great 19th-century depression lasted for more than two decades. On the same reckoning, this slump will last until 2031. That may be too long a time scale: The old joke that economists make forecasts  only to give the weather guys someone to laugh at should stop anyone from making predictions for decades ahead. But the lesson of the long depression is that a downturn can last a very, very long time — and it’s already clear that this one isn’t going to be over soon.

— Matthew Lynn’s e-book The Long Depression: The Slump of 2008–2031 is available now from Endeavour Press.

 

[a_majoor]

Since food has recently become a topic, here is an interesting look at the market volatility of food. Since food is "officially" not part of the CPI for the purposes of calculating inflation (as is fuel), we all see part of the disconnect when going to the grocery store. Investing in a garden looks more and more promising:

http://www.zerohedge.com/news/guest-post-punch-mouth-food-price-volatility-hits-world

Guest Post: A Punch to the Mouth - Food Price Volatility Hits the World

Submitted by ChrisMartenson.com contributing editor Gregor Macdonald

2011 was an abysmal year for the global insurance industry, which had to cover yet another enormous increase in damages from natural disasters. Unknown to most casual observers is the fact that during the past few decades the frequency of weather-related disasters (floods, fires, storms) has been growing at a much faster pace than geological disasters (such as earthquakes). This spread between the two types of insurable losses has moved so strongly that it prompted Munich Re to note in a late 2010 letter that weather-related disasters due to wind have doubled and flooding events have tripled in frequency since 1980. The world now has to contend with a much higher degree of risk from weather and climate volatility, and this has broad-reaching implications.

And critically, it has a particular impact on food.

Many factors seen over the past decade have produced higher food prices: population growth, urbanization, the decline of arable land per person, and the upgrading of diets for example. But more damaging than food inflation has been the pushing of global food prices out of their long, quiet envelope of stability. From the recently released UN Report on the World Food Situation:

The FAO Index (Food and Agriculture Organization of the U.N) shows that, while prices are once again down from a peak, a troublesome volatility started to affect food prices this decade. These are the very prices that caused social instability in countries like Mexico in 2007-2008 (pressure on corn prices, owing in part to US corn ethanol mandates) and more recently in northern Africa (Arab Spring).

Commodity observers will note the rough correspondence with oil prices, and of course that’s no mistake. Inputs to food production are heavily composed of fossil fuels. In the same way that both high (and highly volatile) oil prices play havoc with economies, food prices and marginal speculation in food have done the same.

2011 also saw the highest average oil prices since 2008, at $94.81 per barrel. That is not far below the average high of 2008, at $99.67. In between was a crash in oil prices -- and most commodities -- which unfolded at a rate almost as rapid as the original run-ups from 2006-2008. What happens next?

The USDA has just released its Food CPI readings for 2011, along with their forecast for 2012.

    With 11 months of data recorded, the outlook for the 2011 Consumer Price Index (CPI) and food price inflation has become clear. The CPI for all food is projected to increase 3.25 to 3.75 percent. Food-at-home (grocery store) prices are forecast to rise 4.25 to 4.75 percent, while food-away-from-home (restaurant) prices are forecast to increase 2 to 2.5 percent. Although food price inflation was relatively weak for most of 2009 and 2010, cost pressures on wholesale and retail food prices due to higher food commodity and energy prices, along with strengthening global food demand, have pushed inflation projections upward for 2011.

    For 2012, food price inflation is expected to abate from 2011 levels but is projected to be slightly above the historical average for the past two decades. The all-food CPI is projected to increase 2.5 to 3.5 percent over 2011 levels, with food-at-home prices increasing 3 to 4 percent...

With non-existent wage growth and a dearth of investment opportunities, these price advances in food costs have much more impact than it appears. What asset classes are keeping pace with the year-over-year increases in food? Certainly not stocks, as the S&P 500 has gone nowhere in a decade. Moreover, a 3.5% increase in Food CPI this year, with more to come next year, falls on top of a deeply under-utilized US economy in which tens of millions derive income from government transfer payments, most of which are not sufficiently ratcheting higher from “inflation-adjustments." Food Stamp recipients, for example, are not seeing food inflation adjustments in their benefit checks that would compensate for the price increases. Not even close.

As you may have heard, milk was the top commodity performer in 2011, up 40% on the year in the futures market. A question: do you think milk is a central staple in American family diets? There's more. On a year-over-year basis through November, according to USDA, beef prices are up 9.8%, egg prices are up 10.25%, and potato prices are up 12%. (This partly explains why junk-type grocery foods make up an ever-larger portion of food-stamp purchasers' shopping carts. Sadly, people are buying caloric content, not nutrition).

Now, compare these price increases to the average individual Food Stamp benefit, which is basically flat year-over-year, moving from $133.79 in 2010 to $133.84 in 2011. And to the extent that households use Food Stamp benefits to plug overall cash flow problems, the very central and related pressure from higher gasoline prices also deflates the impact of the Food Stamp benefit.

Food Stamp Nation

The march higher in Food Stamp participation following the 2008 crisis has been relentless. The trend has paid no attention whatsoever to assertions of economic recovery or jobs growth in the US.

Yes, in the aggregate there has been moderate growth in private sector payrolls since the lows. There has also been a very big turnaround in exports, as this part of the economy has seen a veritable resurrection, growing to 15% of GDP. However, the upsurge in national Food Stamp participation (SNAP) has been stronger than them all. In December of 2007, just after the declared start of the “recession,” national participation in SNAP (Supplemental Nutritional Assistance Program) stood at 27.385 million. As of the latest data, this has ballooned to 46.268 million.

Because the national figures are so enormous and harder to comprehend, for several years I have kept track of Food Stamp (SNAP) users in Los Angeles County -- alongside oil prices. Southern California illustrates well the dilemma for most of the nation: Through the force of US demand, we have lost the control we once enjoyed over oil prices, while at the same time we remain locked in to automobile-based transport. Previous recessions in the US would have knocked gasoline prices down for longer. Not so anymore. Earlier this year, it became clear to me that before year end, the number of L.A. County participants on Food Stamps would eventually cross the one million mark. That grim marker has now been achieved:

The above chart of L.A. County SNAP users echoes the FAO chart from the United Nations. Upward-moving volatility in energy is concurrent with wild swings in food prices and waves of people in need of public assistance. Wages in the US have remained flat while millions of workers remain either unemployed or underemployed. Meanwhile, urbanization in the developing world has continued apace, forcing food prices and energy prices up at the margin. The results are not complicated. When demand begins to hit a resource whose supply cannot be easily increased, then price moves to ration demand and price becomes more volatile.

That process, so obvious to many, can unfortunately digress into a series of time-wasting arguments about speculators and whether the world is running out of...(insert your preferred natural resource here). On the contrary, natural resources rarely, if ever, run out in the marketplace. The US is not running out of oil, or corn, and the world is not running out of coal, or copper. What we have seen however in the past decade is that a number of structural changes to human development, primarily industrialization in the Non-OECD, have combined to put an unexpectedly large burden of demand on world resources -- at a rapid rate. Meanwhile, many natural resources, such as copper and oil in particular, had already reached a more difficult place in the arc of their own extraction history when this started to unfold.

The Decline of Arable Land

The result is that energy resources, and thus the ease of using energy resources in food production, began to converge with a long decline in the availability of arable land.

It is not for nothing that farming acreage in the US Midwest is up over several hundred percent since the lows twenty years ago. (As a personal aside, I remember those lows very well; I lived on a struggling soybean farm in Iowa during graduate school in the late 1980s). The world is in the midst of a New Great Game. But this time, the hunt is not on only for energy resources, but for agricultural resources -- mostly cropland.

On my own blog, I recently did a short post on a study of urbanization in China’s Pearl River Delta and its aggregate effect on climate and precipitation. In short? Paving over the earth decreases rainfall. I also found these two photos from NASA, comparing satellite views of the Pearl River Delta over a 14-year period from 1979 to 2003.

The loss of arable farmland per capita in China has placed enormous pressure on the global food system and all of its inputs, especially fertilizer. The miracle of the food revolution, much trumpeted over the past 30 years as the latest achievement of technology and innovation, is not to be dismissed. But there are limits. We can only convert so much farmland to urbanscape while making up the difference with N, P, and K (Nitrogen, Phosphorus, and Potassium) before we lose resiliency -- and redundancy -- in the global food system. It did not used to be the case that a bad wheat crop in Australia or the Ukraine would hit global wheat prices so hard. Moreover, because food is a renewable resource, a level of overconfidence about our ability to respond to demand crept into policy-making and forecasting.

In Part II: Preparing for Higher Food Prices, using the most recent data, I show what’s happened to arable land around the world and talk about how we have created ever more tightly-coupled fragility in our systems of food production. I also chart the relative performance or return on various investments, compared to food, and show that despite the avoidance of the matter, stagflation has now entered the US economy. (How does one cope with flat wages and rising food prices?) Finally, I have just finished reading Julian Cribb’s The Coming Famine: The Global Food Crisis and What We Can Do to Avoid It, 2010, and found his discussion of virtual water very much on point, and relevant to our next set of challenges:

    In theory, countries that lack water can import virtual water as food commodities with those with plenty. So too, countries that lack the energy to grow all their food can import surplus food from countries with highly productive oil based farming systems--provided they are rich enough to afford it. The fact, however, that a billion people starve while another billion wallow in surpluses of food so huge that they throw away half undermines this idea.

    -- from The Coming Famine by Julian Cribb, page 122.

As I discuss in Part II, the United States is also becoming swept up in the globalization of food production, as it remains a titan of commodities exports, on an absolute basis. But the hunger for US food exports has implications for our own population, which struggles with falling (real) wages and depressed purchasing power. Will Americans be able to afford to pay what the world can afford to pay, for food?

Click here to access Part II of this report (free executive summary, enrollment required for full access).

Oddly, one solution may come from the space colonization movement. When the idea of building huge space colonies was popular back in the 80's, much attention was paid to high intensity farming methods to feed people from a small resource base. Techniques such as intercropping (growing different crops in the rows between the corn) and multi cropping (planting new crops befor the old crop was harvested), and experimenting with different species of food plants all showed promise. As an aside, intercropping has been adopted by marijuana growers in SW Ontario, demonstrating that it does work as advertized...

 

[Edward Campbell]

Here is the StatsCan Weighting Diagram for the CPI.

While food and gas, being volatile, are excluded from some calculations they are measured and reported and are used in many indices.

Gross data:

Food:                      16  %
Shelter:                  25.5%
Household:            11.5%
Clothing:                  5.5%
Transportation:      20.5% - of which gas is nearly 1/3 or 6% of the total
Health:                    5  %
Recreation:            11  %
Alcohol & Tobacco:  3  %

 

[Old Sweat]

There is nothing new about intercropping. It was used by both aboriginal peoples and settlers in the colonial era. For example, corn would be planted in hills with  a few squash. As there was some space between the individual corn plants, the squash, which spread out on the ground, would fill in the spaces and prosper.

 

[Fishbone Jones]

There is nothing new about intercropping. It was used by both aboriginal peoples and settlers in the colonial era. For example, corn would be planted in hills with  a few squash. As there was some space between the individual corn plants, the squash, which spread out on the ground, would fill in the spaces and prosper.

To amplify Old Sweat's post, it was called 'The Three Sisters'. Corn was planted first. Then beans. The beans would use the cornstalks as uprights to climb. Squash was planted third. The squash plant spread out providing ground cover which prevented evaporation of water from the three root systems.

 

[Kirkhill]

And to build on Old Sweat's and recceguy's commentary, if I remember correctly, the full recipe called for first planting one fish.  The decomposing carcasse supplied the Nitrogen, Phosphorus and Potassium, as well as some water, that nourished the plants.

If, as has been reported, this system improves yields and trims costs, the biggest hurdle would be redesigning the harvesting system to sort the squash, corn and beans, assuming that they all came to maturity at the same time.  It might be possible to devise something to harvest the beans and corn simultaneously while leaving the squash undamaged (open lanes, a straddling harvester and leaving a long stalk on the corn), but the beans and the corn would be so inter-twined they would have to be harvested concurrently.  Separating mature corn from beans would be a relatively trivial mechanical problem.

The industry is always on the look out for good, workable ideas and adopts them as the economics justify.  Part of the economics is government regulation.  For good or ill.

 

[Redeye]

And to build on Old Sweat's and recceguy's commentary, if I remember correctly, the full recipe called for first planting one fish.  The decomposing carcasse supplied the Nitrogen, Phosphorus and Potassium, as well as some water, that nourished the plants.

If, as has been reported, this system improves yields and trims costs, the biggest hurdle would be redesigning the harvesting system to sort the squash, corn and beans, assuming that they all came to maturity at the same time.  It might be possible to devise something to harvest the beans and corn simultaneously while leaving the squash undamaged (open lanes, a straddling harvester and leaving a long stalk on the corn), but the beans and the corn would be so inter-twined they would have to be harvested concurrently.  Separating mature corn from beans would be a relatively trivial mechanical problem.

The industry is always on the look out for good, workable ideas and adopts them as the economics justify.  Part of the economics is government regulation.  For good or ill.

They didn't understand it, but the beans also provided another vital function - fixing nitrogen. Modern intensive monocultures don't do that anymore, they just rely on massive amounts of artificial fertilizers to provide nitrogen.

Interesting about regulations. I'm reading a lot on Joel Salatin, who is one of the most interesting farmers I've ever read about. He describes himself as a "Christian conservative libertarian" and he is interesting because his main argument against a lot of regulations is that they're basically set up to favour deep-pocketed industry. The rules essentially protect the interests of ADM, Cargill, Tyson, Purdue, ConAgra, etc and make it difficult for him to really expand and do business. Most of the rules are labelled as "food security" issues, but they're actually basically barriers to entry to the market for small producers like him. While some regulations when it comes to food are probably justifiable and important, many aren't, and are a symptom of the bigger problem of what happens when lobbyists and businesses simply buy the legislation they want to protect themselves.

 

[Infanteer]

I found that guy's website a few months ago - although he comes off as a bit of an eccentric, he definitely has a lot of interesting things to say about food and the way it works in our society.

 

[Redeye]

I found that guy's website a few months ago - although he comes off as a bit of an eccentric, he definitely has a lot of interesting things to say about food and the way it works in our society.

Eccentric is an understatement, but he has a lot of really insightful things to say, and it's hard to disagree with him. I first heard of him while listening to Ideas on Radio One, then read the Omnivore's Dilemma in which he features prominently. When I was in the area in September I really wanted to go viist the farm, but I didn't have the chance.

 

[a_majoor]

Inflexible Europe. We are still much closer to the European model, with predictable results:

http://www.nytimes.com/2012/01/08/magazine/the-other-reason-europe-is-going-broke.html?_r=3&ref=global-home&pagewanted=print

The Other Reason Europe Is Going Broke
By ADAM DAVIDSON

One great way to start a bar fight during an American Economic Association conference is to claim that the U.S. economy is preferable to Europe’s. Someone will undoubtedly start quarreling about how G.D.P. per capita doesn’t measure a person’s happiness. Someone else may point out that if you look at income inequality and entitlements, the average European is doing much better.

But G.D.P. per capita (an insufficient indicator, but one most economists use) in the U.S. is nearly 50 percent higher than it is in Europe. Even Europe’s best-performing large country, Germany, is about 20 percent poorer than the U.S. on a per-person basis (and both countries have roughly 15 percent of their populations living below the poverty line). While Norway and Sweden are richer than the U.S., on average, they are more comparable to wealthy American microeconomies like Washington, D.C., or parts of Connecticut — both of which are actually considerably wealthier. A reporter in Greece once complained after I compared her country to Mississippi, America’s poorest state. She’s right: the comparison isn’t fair. The average Mississippian is richer than the average Greek.

Europe is undergoing not one but two simultaneous economic crises. The first is a rapid, obvious one — all about sovereign debt, a collapsing currency and austerity measures — that we hear about all the time. The second is insidious but more important. After decades of trying, Europe as a whole still can’t quite figure out how to be flexible enough to compete in the global economy.

The story of how Europe lost its flexibility can be told in three stages. First came rapid growth that economists called “convergence.” With a lot of help from the U.S., Europe developed massive industrial capacity in the postwar years. Many of Western Europe’s economies grew so fast that governments could easily afford health and unemployment insurance and other benefits that, by U.S. standards, were remarkably generous. Most observers expected that its wealth would soon “converge” upon that of the U.S.

But the European economy did not recover from the worldwide oil shock of 1973 nearly as quickly as its American counterpart. For more than 25 years (phase two), as its population aged, Europe’s economy grew more slowly than the United States’. Its active capitals belied bloated businesses that were losing contracts to U.S. competitors or growing suburban ghettos filled with a permanently unemployed underclass.

Even its major successes — like Germany’s impressive machine-tool and automotive-industrial sectors — were refinements of old ways of making money rather than innovations in new industries. Western Europe played a remarkably small role in the computer and Internet revolutions. (On the other hand, Estonia, with less than two million people, gave the world Skype.) When the economic forecasts were written during Europe’s doldrums, the Continent looked destined to become a decrepit old-age home with too few young people around to pay the bills.

Enter phase three: what might be called the Principled Compromise. Increasingly since the mid-1990s, European leaders have been trying to figure out how to keep up with this new globalized digital economy. To compete with the U.S., China, India and Brazil, Europe focused more intently on broadening its internal market. It’s easier for businesses to stay competitive when there are a few hundred million potential customers using the same currency and not requiring customs forms.

To many American eyes, however, Europe’s creation of a common market and currency was only half the battle — and probably the less important half. It’s a core view of U.S. business that success requires a degree of destruction. If workers can’t be fired, companies can’t drop unproductive businesses and invest in more promising new ones. If workers know they’ll get generous government benefits no matter what, so the theory goes, they’ll get lazy.

But just as the U.S. was dismantling much of its welfare system — replacing it with the welfare-to-work reforms of the mid-1990s — Europe was (somewhat nobly) trying to show that an economy can be humane and competitive. In 1994, Denmark modernized a system, which came to be known as “flexicurity,” that offered American-style flexibility (layoffs, transitions into new lines of business) coupled with traditional European security. Laid-off workers were offered generous benefits, like 90 percent of their last salary for two years and opportunities to be retrained.

And it worked incredibly well. After Denmark’s unemployment rate sank to among the lowest in the world, the flexicurity model spread throughout Europe. It has been successfully implemented, in locally appropriate ways, in Norway, Sweden and Finland. But in other countries — like Germany, France and Spain — similar reforms faced stiff resistance from workers who preferred the old way. Several countries applied the measures in a two-tier system: people who already had jobs were protected by pretty much the same old rules, while the unemployed — who were often younger — were offered less secure work at lower pay. Greek unions insisted on so much security and so little flexibility that now the country has neither. Flexibility has done little to help Italy, which remains effectively two countries. There is a rich nation in the north where workers earn great salaries in highly productive and competitive industries; many people south of Rome are living in a broken, developing economy that’s considerably poorer than Greece.

Many now believe that Europe’s decision to create a common currency ended up pushing much of the Continent further behind. Greece, Italy, Spain, Ireland and Portugal would arguably be much better off if they could simply devalue their old currencies and sell exports at a relative discount. Instead, they’re stuck with a euro whose value is largely based on their more successful neighbors. The U.S. is in no position to gloat, but our basic mechanisms of competitiveness are still in place. We’ll grow again. We just need to figure out how to distribute the spoils. And Europe, we once thought, was supposed to teach us how to do this.

European leaders like to mock the U.S. for its inequality and lack of social safety net. Though, for now, it looks as if Europe is headed for a two-tier society without any plan for improving the lot of the lower tier. How can Brussels excite a generation of ambitious young people — the ones who will determine Europe’s future success — when too many of them are offered low-wage, short-term work in stagnant industries to pay for the far more generous benefits their elders receive? How can Europe compete if its youth experience the flexibility while the old get the security?

Adam Davidson is a founder of NPR's “Planet Money,” a podcast, blog and radio series heard on “Morning Edition,” “All Things Considered” and “This American Life.”

 

[a_majoor]

The Economist and their "Big Mac" PPP chart on this link:

http://www.economist.com/blogs/graphicdetail/2012/01/daily-chart-3

The Big Mac index
Jan 12th 2012, 16:53 by The Economist online

Burgernomics shows Switzerland has the most overvalued currency

THE ECONOMIST's Big Mac index is based on the theory of purchasing-power parity: in the long run, exchange rates should adjust to equal the price of a basket of goods and services in different countries. This particular basket holds a McDonald's Big Mac, whose price around the world we compared with its American average of $4.20. According to burgernomics the Swiss franc is a meaty 62% overvalued. The exchange rate that would equalise the price of a Swiss Big Mac with an American one is SFr1.55 to the dollar; the actual exchange rate is only 0.96. The cheapest burger is found in India, costing just $1.62. Though because Big Macs are not sold in India, we take the price of a Maharaja Mac, which is made with chicken instead of beef. Nonetheless, our index suggests the rupee is 60% undercooked. The euro, which recently fell to a 16-month low against the dollar, is now trading at less than €1.30 to the greenback. The last time we served up our index in July 2011, the euro was 21% overvalued against the dollar, but it is now just 6% overvalued. Other European currencies have also weakened against the dollar since our previous index, notably the Hungarian forint and Czech koruna, which have fallen by 23% and 16% respectively. Six months ago both currencies were close to fair value, but they are now undervalued by 37% and 18%.

 

[Edward Campbell]

More about pipelines and oil sands reproduced under the Fair Dealing provisions of the Copyright Act from the Financial Post:

http://business.financialpost.com/2011/10/29/the-stranded-oil-sands-a-worst-case-scenario/

There is a very, very good chance that a politically weakened Obama will refuse to permit the Keystone pipeline in order to placate the environmentalists.

Protesters against the construction of the Keystone XL oil pipeline hold signs and stand on a
Keith Haring sculpture as they demonstrate outside of the W Hotel before the arrival of U.S.
President Barack Obama on October 25, 2011 in San Francisco, California.

But, and it is a big BUT for Canada, IF the USA shoots itself in the foot and prefers Saudi oil to Canadian oil we have a HUGE and growing market in Asia - mainly in China.

I am confident that Government of Canada will pull out all the stops to guarantee regulatory approval of Northern Gateway and the LNG pipeline and port if Keystone is blocked by the Obama administration.

But we want both: Keystone for quick, easy profits and Northern Gateway to secure competitive world markets (and prices) for our commodities.

The US has, for the moment, at least, nixed Keystone. I expect:

1. Obama to pay a political price for making America more dependent on Arab/Iranian oil; and

2. Harper to do everything in his (considerable) political, legislative and regulatory power to make Northern Gateway a reality ... soon.

 

[GAP]

I think the lost jobs argument, if done right, will cost Obama the election come November. All people see is massive unemployment and it's quite visual, especially with a little help for people to SEE 20,000 lost jobs......

 

[RangerRay]

I can appreciate the economic and strategic importance of a pipeline to the west coast, especially now in light of the Americans turning down Keystone.

However, I remain unconvinced that these benefits outweigh the environmental risks of this particular pipeline project, as proposed.  In this part of the world, it's a matter of when, not if, a disaster occurs.

From the BC Wildlife Federation:

http://www.bcwf.net/index.php?option=com_content&view=article&id=284%3Aannouncements&catid=58%3Alinks&Itemid=716

Enbridge Project Threatens BC's Fragile Ecosystem


The BC Wildlife Federation has submitted a detailed brief to the Judicial Review Panel investigating the proposed Enbridge Northern Gateway pipeline proposal to construct and operate two pipelines that will carry oil from Alberta to a marine export terminal at Kitimat, BC. The proposal also includes the construction and operation of an integrated marine infrastructure that will facilitate the transportation of oil and condensate.

The BCWF brief states that the project poses a significant risk to British Columbia’s rich and vibrant ecosystem, including the Great Bear Rainforest, Kitlope Conservancy, and the Gultoyees/Foch conservancy. The project places not only these protected areas at risk but the entire coastline, estuaries, marine environment and the ecosystem.

The brief asks: "Is it ethical for the Provincial and Federal governments to place high standards of protection by creating conservancies and parks only to consider and possibly of allowing the transportation of bitumen and condensate, thereby placing all of these protected areas at "high" risk? What kind of protection is this? Is this due diligence? Will this Environmental Assessment review process be remembered as a series of oversights and underestimations? We need to balance our desire, as a people, to receive economic compensation for our natural resource rich country with the actual cost of projects, such as the Enbridge Northern Gateway Pipelines."

Full report here:
http://www.bcwf.net/images/stories/pdf/enbridge_brief.pdf


Being BC's oldest conservation group representing hunters and anglers, I doubt that they would be under the influence of foreign radical greenies.