Inflation - this time its different

Robert Samuelson’s article “Inflation won’t happen this time round” [p13, 30th Oct-05] gives me little comfort based on his reasoning. He asserts correctly that oil prices in themselves don’t cause inflation, but ignores the credit creation that has sparked the recent internet, equity, property booms and commodity booms. Yes the global economy is more competitive, but oil costs are inherent in every aspect of GDP, allowing business to very easily pass on costs, whether those costs are incurred in the US or China. Productivity has been strong over the 1990s, but has shown signs of abating, whilst wage growth pressures are building and corporate profit margins are being squeezed. Whilst Samuelson describes the rise of inflation in the 1970s, he gives little regard to the current economic conditions. US monetary policy is still easy, mortgage rates have yet to respond to Fed tightening (11 consecutive 25bp increases), and the US is running record deficits at a time of high national debt and low tax receipts – potentially squeezing households from all sides. Japanese & Asian (China, Taiwan, Korea) monetary authorities are equally to blame for financing the debt, and for preserving their mercantilist policies. Either way we will experience inflation or gross over-capacity. Will the Fed tolerate all this? Its too late for them to avert crisis. Isn’t it about time the media developed some analytical skills and stopped writing articles scripted by the Fed? We were feed news that oil would never breach $US40/bbl. We are told inflation is the sole measure of monetary health. Expect headline inflation to lead core inflation – just as it did in the 1970s. Expect gold to be the last bubble before the undertaker moves in.

Australian Government disintegrity

The top ranks of the Australian government are making more embarrassing blunders. The head of the Australian Federal Police would have us believe “Top Cop defends Bali 9 tip off” [27-Oct-05] that there is no contradiction between tipping off Indonesian police about Australia’s Bali 9 drug importers and its strong opposition to Indonesia’s death penalty. They could have argued that Indonesia has a right to its own sovereign laws, except for the precedence it set with its criticism of the Indonesian judiciary in the case of Muslim cleric Abu Bakar Bashir for his involvement in the Bali bomb blast. In last case the Australian government applied pressure for a longer incarceration. Of course this contradiction is easily resolved by recognizing that the AFP and Australian government have different policies. As an Australian overseas, I’m just wondering which policy applies to me.

Coral reef scare

“Half of the world’s coral reefs could die within 40 years” [27-Oct-05] according to the World Conservation Union unless measures are taken to address climate change. The reality is that the edifice of reefs is already dead, and that dying is a natural part of their evolution. There are a great many natural processes that depend on the birth & death cycle, and coral reefs are just one of them. Australian flora requires bush fires to regenerate. Whatsmore whilst death is occurring near the surface, the reef is expanded by regenerating in the sub-zone (at depth) where temperatures are compatible, but no one documents this activity because it would go against the politically-correct conclusion that the world is coming to an end due to climate change. Thus we seem to have another scare campaign by the greenies, having conceded that nuclear power is desirable afterall because it produces no greenhouse gases. I guess they needed a header for their donation campaign.

Re: Spare a thought for Japanese nags

An article on ‘retired husband syndrome’ (RHS) can hardly do justice to men without considering men’s affliction - ‘nagging wife syndrome’ (NWS). In defence of men [“Wives sick of their men in greying Japan” [p.3, 20th Oct 2005], should not Japanese women take it upon themselves to negotiate a better relationship. Isn’t each partner 100% responsible? Gender identities are so entrenched in Japan, even the youth of Japan are hard-pressed to change. Unless women are prepared to negotiate a better deal from partners then they will not be respected and they will continue to feel like victims. Victims rarely take responsibility. Certainly in a culture where men hold all the power there is a requirement from them – but why would women want to externalise responsibility. The capacity of Japanese partners to tolerate suffering is a bit self-righteous and pious. Coming from a mixed relationship, I’ve left my partner 3x in an attempt to negotiate a better deal. Each time I don’t know whether she will humbly concede or grow. Maybe she just hopes I will, or maybe the thought of being ‘emotionally’ independent is just too intimidating. I’d suggest for a culture which does not value achievement or personal efficacy as much as social harmony, there are just too many partners around who aren’t interesting enough to be married to. Unless they are prepared to grow in their relationships, partners will seek outside relationships. I suggest it’s a western stereotype that young Japanese working women are more independent. One need only look at their motive (finding husbands) and (servile) roles to see that little has changed. A women with responsibility in Japanese companies is a rare ‘beast’ indeed – pardon the pun. Lets hope they exhibit some self-control when that self-expression evolves.

My notes from original article - Japan Times
“Wives sick of their men in greying Japan” [page 3, 20th Oct 2005]. The story of Sakura Terakawa, 63yo, being wooed by her husband with love letters & flowers. The relationship however descends into ‘demands for his evening meals and nitpicking over the quality of her housework’. He would go to work at dawn, social after work, returning home late, so her & the children would rarely see each other. She wanted to divorce, as she could not bare having him around the house. Some 60% of Japanese women are regarded as having ‘retired husband syndrome’ (RHS). The problem is they feel compelled to remain dedicated to their husbands. When he left work he was virtually friendless, so stayed around the house, watching TV. He became dictatorial, and she developed rashes & polyps related to the stress. The problem is not men’s attitudes to women, as much as the nature of Japanese relationships. “Though after retirement stress is a common problem in most developed countries” its more prevalent in Japan because of aging. Although more ‘women are entering the workforce in record numbers’ older people have remained far more rigid”. He ‘demanded strict obedience’.
Why is he staying out late? She ‘had developed her own life, her own way of doing things, in the years when he was never home”. She can’t even stand to look at him across the dinner table. Its due to a lack of respect. With 7mil men set to retire in 2007-9. Men cling to the outdated notion of ‘wives as servile attendants’ leaving many elderly women to view their longevity as more of a curse than a blessing”. Japanese men are not accustomed to doing anything. He joined a support group “Men in the Kitchen”. For men, is it about respect of an intellectual nature, or being used?

WB are exponents of fascism not equality

The World Bank (WB) is misguided if they think “inequality is the biggest obstacle to economic progress” [14 Oct 05, p17]. It would be nonsense to suggest India is under-performing because its women can't get jobs, when there are millions of men facing a similar blight. Look at the rule of law and government intervention in the Indian economy. There is a whole swag of subsidies to protect ‘poor farmers’ – and that is precisely the harm that results from ‘equality’ as a political ideal. In addition, the government expropriates domestic savings through control of the banking system to finance its budget. Certainly the poor will always be potential consumers, but without deregulation and export-based industries to build domestic savings sustained prosperity will prove difficult. The protection of ‘foreign’ capital investment is the first step towards prosperity for developing nations, and a precursor to the protection of indigenous people's rights, since they have little voice/knowledge (under democracy) or capital to plunder. Sadly democracy is only able to achieve an ideological shift through pragmatic ‘carrot & stick’ policies. Notwithstanding the importance of other factors such as market size, domestic savings and infrastructure, the WB policies are inclined to achieve fascism rather than individual rights (the foundation for a truly just & prosperous society). One need only look at what the World Bank’s sense of ‘equality’ (whatever that means) has done to India. The WB needs to rethink its premises.