Category Archives: Physical resources
You can hold in you hand or touch it, but what are you going to do with it?
Actually its this:
Did you notice the glaring outlier? Iceland.
You thought Iceland was doing OK now, well you are right, firstly they jailed the bankers and told the fraudsters they were not going to underwrite the gambling losses of the finance class.
Secondly and most importantly Iceland is the 13th largest Aluminum exporter in the world. Aluminum is a strange material in the fact that the only way to refine it from ore is the addition of vast amounts of electrical energy. Aluminum is very common in the earths crust, almost any random rock you pick up will contain aluminum in some form. Almost any country could become a serious aluminum producer if they had enough cheap energy available. Each kilogram of Aluminum produced contains the energy equivalent of 6.22 barrels of oil or an average lightning strike. So a country that exports aluminum is really exporting electricity or more broadly speaking energy. I’m quite sure that this image dose not take into account the amount of energy in the form of aluminum being exported. Iceland is blessed with a small population and significant geothermal energy resources an the capacity to build hydro dams because of its short steep rivers.
Aluminum prices did in fact double following the financial crisis, showing that it was in actual fact and energy crisis.
So long term Iceland’s economy has good fundamentals, good energy sources in a world of uncertain energy security.
The most recent and controversial aluminum smelter in Iceland actually built its own 600MW hydro dam which had a larger capacity that the entire national grid, just to make its own electricity for refining.
Worldwide peak oil was in 2008 this of course coincided with the global financial crisis this is no surprise, these events are very much interconnected, consider how much your current industrial revolution based lifestyle is dependent on oil.
Oil transports the fertilizer, plows the field, plants the seeds, harvests the grain, powers the truck that drives it to your town or city and then it powers your car when you drive to go and buy it. So obviously shortages of oil in the future will drive up costs and drive down profits, chaos is guaranteed when the speculators find out about this. And that’s what happened.
Q: Why is no one talking about an energy crisis?
A: The same reason they don’t scream fire in a crowded theater when the doors are locked.
Peak oil: It’s when a civilization ‘jumps the shark’, close to the end of ‘happy days’
The new Bentleigh free shop, get down here the initial reactions are good.
By Alfred Heinz 27/11/2011
Henry Kissinger, the most famous living practitioner of international statecraft
NEW YORK - USA - In a remarkable admission by former Nixon era Secretary of State, Henry Kissinger, reveals what is happening at the moment in the world and particularly the Middle East.
Speaking from his luxurious Manhattan apartment, the elder statesman, who will be 89 in May, is all too forward with his analysis of the current situation in the world forum of Geo-politics and economics.
The long awaited protest against Monsanto will finally happen in about two weeks,in order to get in the mood here are some fun images to share:
Apparently the Masons are behind Monsanto. It does sound a bit like” Masonto”. One could also argue that “Monsanto” is Portugese or Spanish and means “my saint”. Obviously an evil saint , clearly not Mother Theresa.
I can see all the kiddies trying to find the pirate flag inside the tomato bought from Coleworth.
Just like the devil is a perversion of the ancient horned fertility god (Pan-Cernunnos) so Monsatan seeds are a perversion of nature. Perfect fit.
Honey bees are in severe decline in the US, the principle culprit is believed to be Neonicotinamides developed by Monsanto. Honey bees are responsible for pollination 2/3 of all food crops people eat, so without them we are in real trouble.
Rather then admitting responsibility for the damage they have done with neonicotinamide pesticides, Monsanto are developing Robot bees to have an even larger control over nature and your food supply.
How would you feel being forced to pay Monsanto to hire its robotic bees to pollinate your crops after its pesticides killed all the natural bees?
It’s not enough for Monsanto to have control over your seeds and food that want to control what get pollinated also, dangerous.
The recent drop in the price of gold has lead to a run on physical gold. and the US mint has run out of tenth ounce coins.
Could this be an early warning sign of the coming econopocalypse?
Note the article link described tenth ounce coins as being 3.4 grams, but i thought a tenth of an ounce was 3.11 grams. who knew?
Game theory is the idea that every activity we do, or decision we make can be thought of as a game. A game may be simple or complex and may have strategy that is obvious or subtle.
If you remember from our last session we were cutting cakes.
There are only two ways to cut a cake really, fairly or unfairly. The way the cake is cut depends on the rules of the game.
Let’s make the rules of the game.
There are two players.
The first player cuts the cake into two parts, each part may be any size.
The second player chooses one of the two parts to keep as their piece of cake.
The first player then keeps the part of the cake the second player did not take.
* I think we can all agree that if player 1 chose which piece before player 2, player 2 would frequently receive nothing.
Most of us learned this game as children, usually a parental figure gives two children a food item to divide and states the rules similar to the way I have described them.
Usually this game results in fair distribution if the rules are followed.
You should be able to see in your mind how this game generally plays out. However there are circumstances where a very different result occurs.
To explain this I will use a pay off table.
Player 1 has two possible strategies 1) be fair OR 2) not be fair in the cutting of the cake.
Player 2 has 2 choices 1) be smart and take the biggest piece OR 2) not be smart and take the smaller piece.
* It is possible that player 2 is not hungry, or is unable to determine which piece is larger (49% vs 51%) or feeling quite generous, or is a woman on a first date.
When playing these games we assume the opponent is rational and is seeking the best possible outcome for themselves. If you opponent is not rational it is difficult to apply in many cases.
Generally in game theory the following convention is used, player 1 uses rows (horizontal) to determine their strategy and player 2 uses columns (vertical) to determine their strategy.
The result of the game is where the two strategies intersect.
For each strategy combination there is the corresponding box in a grid with 2 numbers separated by a coma, the number on the left is players 1 reward, the number on the right is player 2 reward.
Reward numbers are positive for a gain and negative for a loss.
In the pay off chart below I have color coded the rewards to match the players, though this is not commonly done. Think of this as economics paint by numbers.
We can use the pay off chart to analyze the game.
Lets assume I am player 1
The first this you should notice is if I cut the cake fairly I know what my reward will be, and it doesn’t not matter if my friend is smart or not.
The second this you should notice is the highest and lowest rewards in the game for me occur when I cut the cake unfairly. Cutting the cake unfairly is therefore a risky strategy and I am gambling on my ‘friend’ being stupid in order to get a larger reward.
Thirdly because the game seems have an unofficial title of “Are you stupid my friend?” a game like this can be used to test the intelligence of an opponent.
Fourthly an opponent in this game can ‘play stupid’ and let you take the large reward assuming you will assume he (or she) is stupid in the future when you risk even more on a future game ( 75 vs 25).
Player 1 Player 2
Cake 1 60 40 ( Player 1 unfair, player 2 not smart (apparently…) )
Cake 2 25 75 ( Player 1 even more unfair, player 2 suddenly smart ( surprise!) )
Totals 85 115 ( Who is stupid now?)
This type of strategy is the conman game or poker game.
Interestingly the conman game strategy is almost foolproof as long as a second game follows and player 1 is still unfair. The only way a prospective conman game can loose here is if player one switches strategy to fair (or less unfair, 55 vs 45) after their initial windfall. Ironically the conman can be defeated by player 1 getting a conscience or giving up the gamble.
The other important thing about games is sometimes the same games are repeated and sometimes they are played with different games in between and sometimes games are only played once. Entirely different strategies apply to a series of games as apply to ‘one off’ games.
Who thought cutting a cake into two parts could be so complex?
This is why I get very concerned when people talk about ‘redistribution of wealth’.
If all of this was too difficult for you to understand I have some sound advice for you, try to be fair in your dealings, and never trust a socialist, a banker, a salesperson or a anyone employed by the government.
We put the NOM in economics!