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Mar 2009Economic Growth is Ecological SuicideI have been concerned by the response of our governments to the financial crisis. It seems to me that the "stimulus package" is designed to save the institutions whose ridiculous behaviour caused the crisis in the first place rather than cure the problem. As Transitioner, I see the crisis as a symptom of the primary problem which is continuing exponential growth of the use of non-renewable resources. I had hoped that the response of governments would be serious attempts to change the financial system so that it could not create the problem again, but no, I see the response as supporting the unsustainable system which has just failed. My tee shirt will have my new motto. I will replace "Greed is Good" with "Economic Growth is Ecological Suicide". Posted: 30/3/09 9:06 PMEarth HourAs a committed Transitioner I thought it necessary to participate in Earth Hour. I made sure that all our lights were off for the nominated hour. I realise that probably no-one else in Barraba would join in and nobody would recognize my contribution. On a world-wide scale, I guess my participation was insignificant but, as I joined a massive demonstration of commitment to a sustainable future, it made me feel better. Posted: 28/3/09 9:42 PMPeak MoneyI have a most unusual view of the "financial crisis". I believe that the collapse of the credit market was the result of three decades of developments in the financial industry which disconnected the "market" from the underlying reality of real production and service delivery. For example, "short selling" is defended by some as enhancing liquidity and allowing proper downwards adjustments of some stock prices. My view is that short selling is just pure market manipulation with the short seller picking a target stock, "borrowing" that stock, selling to depress the price, waiting for the market to respond with a lower price, and then buying back the shares so that the borrowing can be reversed. The net result of this is that the short seller finishes up with more money which came out of some other market player's pocket, without any connection to real underlying value as the short seller never owned the shares and was only intent on increasing his own bank balance. There are many other examples of the developments I referred to above. One was the deregulation of the money supply. Somehow the banks managed to become the generators of more money simply by lending to borrowers money which were not deposited funds. The result of this was that the money supply increased without any connection to real underlying values and the prices of certain assets increased quite dramatically. The specific example I will quote was the house we bought in 1968 and sold in 1972. In 2004 it was up for sale by auction and the real estate agent expected to sell at about 46 time the price we paid in 1968. In the 36 year from 1968 to 2004 the consumer price index (CPI) had risen by a factor of about 10 so the value of the dollar had been reduced by a factor of 10. Even though it was the same house, in the same place, with the same services and, in economist parlance, with the same utility function, somehow the market had increased the "value" of the house by a factor 4.6 in current dollar terms. I know some would argue that if people wanted to pay more for houses than they would for an equivalent "basket of goods", that was their prerogative. I would argue that these people had been trapped in a "market" which increased the price of houses by extending increased credit to all the house buyers, money which was generated by the extension of this credit rather than any true economic fundamental. There are other examples, such as the development of "derivatives" which culminated in the bundling of bad debt mortgages into packages which had AAA credit rating and selling them to other financial entities. When the truth was revealed and the new "owners" of these bad mortgages found that they had to write off lots of "assets", the market shuddered dramatically. Forgive an old black handed engineer for looking to the past but before this era of "unfettered markets" money was simply a token of exchange for real economic values and the money supply was automatically tied to the production of the economy. In those days, capital was raised by borrowing the savings of individuals, who received a modest interest payment for the use of their assets. The balance between the costs of material, labour, and capital was pretty stable because the players were concerned with the underlying economic values which were simply measured in monetary terms because that was the obvious universal measure. Money has, in my view, become a commodity in its own right which can be used by the rich, using devious financial instruments which bear no relationship to anything but money, to enrich themselves without any contribution to the economic underpinnings of the society. We live in an age when "Greed is Good" is accepted by most people and in which "growth" a measure of this "good" even when the growth is in the money supply and not in the economic fundamentals of the society. As a Transitioner, I study Peak Everything looking to all the non-renewable resources we are consuming at an ever increasing rate and wonder if money is not one of the non-renewable resources. When Peak Oil hits all of our economies and production of goods and services is reduced, the economic fundamental values underpinning the money supply will really force a reduction of the money supply and the "grey suited men" will have to find "proper" jobs if they are to survive. Posted: 17/3/09 4:29 PMWork for the Transition InitiativeThe grandchildren are amazed that I spend so much time "studying". The Towards Transition Barraba Library now contains eight new book in addition to the six books I already had relevant to the subject. I have had to reread several of the old books and I have only got through four of the new ones so there is quite a way to go. I also have to prepare presentations on Peak Oil and Climate Change for various groups in the town. I have bought a digital projector so I need to put together keynote files for these presentations. We also need to do posters and flyers as well as changes to the website so I also have a fair bit of this work head of me as well but I am getting help from some of the committee members. Posted: 9/3/09 4:27 PM Our Transition Initiative has been RecognisedThe Transition Network has granted us official status as a Transition Town. We are the eighth Transition Town in Australia and the 143rd in the world. We are very pleased to join this immensely important world wide movement. We believe that we must work hard to make our town resilient and sustainable before the effects of Climate Change and Peak Oil hit us. We also aspire to participate in a successful global effort to overcome to obstacles to making the whole world resilient and sustainable so that our grandchildren and all future generations will be able to live equitable, happy, healthy, productive and creative lives. I am so happy to be living in a town where the prospects of success in this endeavour are so positive. I don't envy those Transitioners who are attempting this in cities which are filled with people who for the most part aspire to demonstrate their superiority by accumulating things they don't need. Posted: 14/03/09 |
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