Finance / the Economy

• Ecological Economics: The Battle to Preserve the Natural World

  In September of 1982, a group of scholars met in Stockholm intending to reform -- even to revolutionize -- the study of economics. The new ecological economists saw the economy as embedded in, and supported by, natural systems; nature was not simply a factor in, but the foundation of, economic activity. By integrating models from ecology and economics, ecological economists sought to provide scientific arguments for preserving the natural world. The Stockholm meeting came at a critical time. During the 1970s, prominent environmentalists, encouraged by what they saw as a public awakening to environmental concerns, issued best-selling books and reports…

• Is a Reduction in Population Numbers the only Sustainable Solution?

  In a recent post, I talked about why we may be reaching Limits to Growth of the type foretold in the 1972 book Limits to Growth. I would like to explain some additional reasons now. Figure 1. Base scenario from 1972 Limits to Growth, printed using today's graphics by Charles Hall and John Day in "Revisiting Limits to Growth After Peak Oil" http://www.esf.edu/efb/hall/2009-05Hall0327.pdf In my earlier post, I talked about how rising oil prices are associated with rising food prices, and how these high prices can make it harder for borrowers to repay their loans, as is now happening in…

• Out of Africa - Portugal solicits Angolan investment

  The following is an interesting and cautionary tale for investors looking at relatively "stable" Old Europe and Africa, seemingly mired in perennial crisis. Since last year the Portuguese government has been heavily lobbying its former colony Angola to invest its petrodollars there as the nation struggles to comply with the terms of a $99 billion financial rescue package. For 500 years, Angola was Portugal's biggest and richest African colony, with huge reserves of oil, gas and diamonds. The event marks something unique in world history since Columbus first set sail, ushering in centuries of European colonial domination - reverse colonization…

• Argentina's Booming Economy Proves There Can be Life After Default

  Quick. Name the country whose economy despite the global recession nevertheless expanded 9.2 percent in 2010 and has kept growing in 2011 at an annual rate of about 8 percent. Still unsure? The nation defaulted on part of its external debt, roughly $93 billion, at the beginning of 2002 after undergoing three years of brutal recession. Argentina, Latin America's third largest economy. Quite a turnaround in nine years, when the nation quickly became a pariah state, foreign investment fled the country, and capital flow towards Argentina ceased almost completely. The government then decoupled the Argentine peso's parity with the U.S.…

• G20 and BRICs - Who's in Charge?

  As the representatives of G20 nations gather in Cannes, thrashing out a new way forward for the ailing European Union's economies, a major yet little observed economic sea change is underway, as the torch is passed from Europe's capitalist systems, forged over the past four centuries, to countries considered until a couple of decades ago "Second" and "Third World - the BRIC nations of Brazil, the Russian Federation, India and China. While it is as yet unclear what form this historic and dynamic shift will ultimately take, investors would be well advised to take notice of this historic economic tectonic shift. Furthermore,…

• The Faustian Bargain has Enabled an Unsustainable Economic System, but Not for Much Longer

  Historically people have shifted their belief systems in various ways. The Greeks and Romans believed in numerous gods and goddesses and attributed all kinds of powers to them. Then the great monotheistic religions came along and people began to believe in just one god, though they honoured him under different names. Recently, beliefs have shifted again, with people worshipping just one part of a god, the invisible hand. Thanks to Adam Smith and those who followed him, especially the current neoclassical economic theologians, we have seen such an increase in the world’s wealth and sheer numbers that it is hard…

• Is a Green Economy too Expensive in the Current Environment

  There is a looming battle over the cost of energy between the ‘green at any cost’ versus the ‘green enough at a reasonable cost’ where wind/solar forces will battle natural gas—you can sense the fog of war ahead as the battle is being set up. The policy landscape has been designed to drive toward clean energy policies sometimes without much regard to the cost.  It started with environmental groups challenging our polluting ways.  Over time those views gained mainstream acceptance and today there is broad public support for the goal of a clean environment, protecting air quality and water quality…

• China's Bubble of Rapid Economic Expansion Could Soon Burst

  China's problems are piling up, just when the celestial kingdom is attempting an orderly handover of power. Since China's wild grab for commodities over the past 2 years has been a powerful driver of global energy markets, it will be interesting to watch global commodities markets as the China bubble begins to deflate. In economics, "cycles are forever." But China's insular government and its massive population are unfamiliar with economic concepts such as "what goes up, must come down." Watch and learn.  Chinese stocks are flashing warning signs. The Shanghai index has fallen 30pc since May. It is off 60pc…

• Iraq: An Army of Soldiers to be Replaced by an Army of Businessmen

  After nearly nine years, all US Forces are mandated to withdraw from Iraqi territory by 31 December 2011 under the terms of a bilateral agreement signed in 2008. Now the job facing the war-torn country is to re-build its economy. On Tuesday, prime minister Nouri al-Maliki gave a presentation to more than 400 executives representing a wide range of industries including petroleum, engineering and construction, commercial aviation, architecture, maritime cargo and financial services; the leaders of American commerce and industry, to proclaim Iraq’s “limitless” opportunities “open for business” to American investors. He said that, "It is not now the generals…

• What Does China's Reduction in Oil Imports and Trade Suggest?

  Several articles have come out recently drawing on November oil imports, trade and electricity data to suggest China is slowing rapidly and potentially heading for a hard landing. The FT reported this week that Chinese export and import growth both decelerated in November, suggesting Beijing could soon halt appreciation of the renminbi as a result. A move added some credence by comments made by the former vice-prime minister, Zeng Peiyan, and a senior delegation of Chinese business leaders to a New York gathering of hedge funds and bankers seen as a preemptive strike. The Chinese message was stark, according to…