by Nicole Foss
The Fukushima disaster continues, and will do so for a long time to come. This is hardly surprising given the overwhelming force the plant was exposed to, which far exceeded the worst case scenario it was designed to withstand.
The 2 pictures above were taken at Fukushima Dai-Ni
The immediate devastation from the earthquake and tsunami was immense, even before the accident began. Continue reading “Fukushima: Review of an INES Class 7 Accident”
Detroit Publishing Co. After the Quake 1906 “The burnt out San Francisco Call newspaper building from Grant Avenue”We have now seen a series of explosions at the stricken Fukushima Dai-ichi plant (Fukushima 1), and it is becoming increasingly clear that containment systems have been breached in at least some units. The pervasive consequences of station blackout began with a hydrogen explosion in unit 1, followed by a much larger explosion in unit 3, two explosions at unit 2 and one at unit 4. Units 1-3 had been operational prior to the earthquake and tsunami, but were automatically shut down with the quake. Units 4-6 had not been operational for some months, but reactors require constant cooling whether or not they are operational. It is likely that we will see all units compromised due to the loss of power that has prevented cooling. Continue reading “The Fukushima Fallout Files”
Pillsbury Picture Co. “The Burning of the Call” 1906 The San Francisco Call newspaper building in flames after the April 18, 1906 earthquake
The Japanese earthquake is a tragedy of epic proportions in so many ways. The situation continues to evolve, and the full scope of the disaster will not be understood for a long time. One critical aspect is the effect on Japan’s nuclear industry, which provides over 30% of the country’s electricity from 54 reactors. Some of the largest nuclear plants in the world (Fukushima Dai-ichi and Fukushima Dai-ni, 4696 MW and 4400 MW, respectively) are located close to the epicentre, and on the coast, directly in the path of the resulting tsunami:
A state of emergency has been declared for five reactors, with the worst affected reactors being the forty year old Boiling Water Reactors (BWRs) at Fukushima Dai-ichi, 240 km north of Tokyo. These reactors shut down, as the control rods were automatically inserted to dampen the nuclear reaction (SCRAM). At least two reactors experienced a station blackout, which prevented the cooling system from functioning (a loss of coolant, or LOCA accident). Continue reading “How Black is the Japanese Nuclear Swan?”
Renewable energy has become a topic of increasing interest in recent years, as fossil fuel prices have been volatile and the focus on climate change has sharpened. Governments in many jurisdictions have been instituting policies to increase the installation of renewable energy capacity, as the technologies involved are not generally able to compete on price with conventional generation.
The reason this is necessary, as we have pointed out before, is that the inherent fossil-fuel dependence of renewable generation leads to a case of receding horizons. We do not make wind turbines with wind power or solar panels with solar power. As the cost of fossil fuel rises, the production cost of renewable energy infrastructure also rises, so that renewables remain just out of reach. Continue reading “The Receding Horizons of Renewable Energy”
People occasionally comment that we only consider the circumstances of the relatively wealthy in articles like, for instance, our Lifeboat Primer. It is true that by no means everyone can achieve the ideal circumstance of holding no debt, having cash on hand and having some control over the essentials of their own existence, however there are many other important factors in play that may decide the balance of advantage.
It seems important to consider explicitly the plight of those lower down the financial food-chain. The decisions people have to make will depend critically on their personal circumstances. However unfair it may be, all of us face constraints grounded in where we find ourselves in life, and we do not all have the same options available to us. This may seem overwhelmingly to favour the currently better off, but this is not always the case by any means. There are different ways of being well off besides the conventional monetary definition. Continue reading “The View from the Bottom of the Pyramid”
Despite the continuing atmosphere of optimism and denial (that’s par for the course during long-lived counter-trend rallies), we are witnessing a slow-motion crash of the juggernaut that is the real US economy. The unemployment situation is already the worst since the Great Depression and showing no signs of recovery.
David Rosenberg provides his take on the data from the latest Bureau of Labor Statistics report:
Just How Ugly Is The Truth Of America’s Unemployment
The data from the Household survey are truly insane. The labour force has plunged an epic 764k in the past two months. The level of unemployment has collapsed 1.2 million, which has never happened before. People not counted in the labour force soared 753k in the past two months. These numbers are simply off the charts and likely reflect the throngs of unemployed people starting to lose their extended benefits and no longer continuing their job search (for the two-thirds of them not finding a new job). These folks either go on welfare or they rely on their spouse or other family members or friends for support.
Some time ago, Gonzalo Lira wrote a couple of interesting pieces on hyperinflation, and I promised to respond to them. This has taken me a while, as there is much material to go through, many arguments to pick apart, areas of agreement and disagreement, differences in definitions and matters of timing. The first article, How Hyperinflation Will Happen, is a long, thoughtful and detailed piece that I found interesting. There are many aspects I fundamentally disagree with, however, some for reasons of substance and others for reasons of timing.
Essentially the central proposition is that the US dollar is in danger of imminent demise due to a widespread loss of confidence, and that treasuries will be dumped en masse within a year, leading to hyperinflation, by which Mr Lira means price spikes. I do not see a loss of confidence in the dollar going forward, at least not soon. We have seen a long slide in the value of the dollar coincident with the rally in stocks. This is a reflection of a resurgence of confidence in being invested rather than being liquid, but this confidence is fragile and subject to rapid reversal. Continue reading “Debunking Gonzalo Lira and Hyperinflation”
As our readers know, we do not provide investment advice. We do not exist to help people make money in the markets, but to help them avoid losing what they have in a deflationary crisis, at a time when almost everyone will lose a great deal. Our position is that being in cash on the sidelines is by far the safest option at this point, and where most people would be better off by far. Those who are still in the markets are playing a very dangerous game. Many of them know this perfectly well, but they can’t walk away from the casino. The upside is limited, possibly very limited, and the risks are steadily increasing.
Stock market bubbles (and housing bubbles etc) are ponzi schemes. As with all ponzi schemes, only a few manage to cash out, and the majority are those who do so early. Those who do not cash out become the designated empty bag holders, but that empty bag can look awfully attractive at a market top. Trying to catch the top tick, and wring every last ounce of profit out of a collapsing system, is foolish. Most investors who play that game are likely to lose badly. Continue reading “The Future Belongs to the Adaptable”
Humans are not good at the taking the long term view. Our ability to do so does vary significantly with circumstances though, depending on our perception of stability. When we collectively feel that tomorrow will be similar to today, and that we have our basic needs covered, then we are free to think about longer term concerns and the bigger picture.
In contrast, when we exist under circumstances of little forward visibility, and where we are not confident about our access to basic necessities, then the luxury of the long term disappears, and we are pitched into a state of short term crisis management.
Economics describes this parameter as a change in our discount rate. When the discount rate rises, it means that the future is discounted increasingly steeply in comparison to the present, so that today has far more value than next week, and almost infinitely more value than the far future. This has been the natural state for humanity throughout much of its existence. Continue reading “A Future Discounted”
Relationships of trust are the glue that holds societies together. Trust takes a long time to establish, and much less time to destroy, hence societies where trust is wide-spread, particularly for long periods of time, are relatively rare. In contrast, societies where trust does not extend beyond the family, or clan, level are very common in history.
The spread of trust is a characteristic of expansionary times, along with increasing inclusion, and a weakening of the ‘Us vs Them’ divide. Essentially, the trust horizon expands, both within and between societies. Over time it can encompass higher levels of organisation – from family to community to municipality to region to nation and beyond – so long as the expansionary dynamic continues to support it. Continue reading “Beyond the Trust Horizon”
