Miljenko's Blog

I am quite bemused by the widespread puzzlement over decline in long term interest rate over the past year in the face of continuous rate hikes by the Fed. If all of these economists and market analyst just read more Marx, they would be much less puzzled. They would know that Marx said money is just another commodity. The price of goods depends on their supply and demand and the price of money is the interest rate. The prevailing interest rates reflect the market conditions in terms of supply and demand for money (savings VS profitable projects in which those savings can be invested). The interest rates have been going down because more and more liquidity is available as economic growth continues and relatively few additional opportunities for investing are available. The Fed can no more dictate the level of all interest rates than could a real estate market seller who would simply post a price for his house where his house accounted for 1% of the total market turnover in the city. For...

US GDP numbers for the fourth quarter were just revised upwards to 3.8% from 3.1%. Growth for the year was 4.4%, just a tad below the 1999 growth of 4.5%. The source of the revision were stronger exports which means that things are working the way they are supposed to and the way they always have - the weak USD is making exports more competitive and over time this will work to reduce the trade deficit. Business investment is increasing and consumer spending is keeping pace. The economy is no longer resting solely on the shoulders of the consumer. Inflation still remains benign with Greenspan's favorite metric of personal spending minus food and energy running at an annual rate of 1.9%. Things are as good as they have been in 30 years and yet there is no widespread jubilation. This is very good and makes it more likely that the good times will be sustainable. Which would you rather be - Japan and Germany with large trade surpluses and no growth or the US with large deficit and treme...

In a newspaper commentary this week David Suzuki laments how he does not understand why in the world where so many electronic gadgets are being miniturized "are cars fatter, bigger and more polluting than ever". Yes, some of the cars are bigger, some may even be fatter (whatever that means) but none of them are more polluting than ever! In fact, even the Hummer is much less polluting than the smallest cars were 20 years ago. This is not an argument of values and principles, this is an argument of measurable science and quantities of emissions. Both emissions and fuel consumption of cars have improved dramatically in the last 30 years. Peter Foster points this out in the National Post column today.

Recently the man from ForestEthics by the name of T. Berman wrote an op-ed piece entitled Threat To Boreal Forest is Real. In it he mentions the statistic that 5 acres of boreal forest are logged every minute. What he fails to do is add that with natural forest growth and human interevention in additional forestation, the rate at which wood is growing is 20 times the rate of logging. If the boreal forest was disappearing at such an alarming rate as he implies, he would be hard pressed to explain how is it that the tree cover of North America is now bigger than it was 100 years ago. The other thing he fails to point out is that for his purposes, second-growth beech and maple forests "don't count". He only looks at the white pine forest which was logged off in the 1800s. They actually show maps of "frontier forest" as it was 8000 years ago and compare it to today. Much of North Amercia shows as devoid of trees when in fact there is much tree cover, only of differe...

Now that Korea has proudly announced the world's worst kept secret, namely that it has nuclear weapons, I wonder if anyone will wake up and realize that the missile shield (and free to boot for Canadians) is not a bad idea at all? Korea also has fairly sophisticated ballistic missiles so far tested to a range of less than 2,000 km but under development for 6,000 km. Teapo Dong 2 based on old Soviet Scud designs will have a range of 4,000 to 6,000 km and is obviously designed to reach the U.S. Of course, on the way over, they have to fly over Canada and in particular Western Canada. I for one would feel much better knowing there is something out there that can shoot them down before we all glow in the dark. Thankfully, there will be such protection irespective of the Canadian position.

Everybody everywhere is talking about it so why should this be any different? About 60% of the people voted in Iraq, facing danger unlike any other people who have ever voted in any other democracy. That is simply staggering. Even the usually anti-American and even more anti-Bush Toronto Star simply had to agree that - "on the defining, fundamental question, Bush was right. He understood that to defeat an idea, no matter of how perverse and brutal it might be, it was necessary to have an opposite and superior idea. He understood ... that the only way to win the war against terror is to turn it into a war for democracy. This is now happening." It was gratifying to see the pretty much universal amazement on Monday that what so few have said has actually come to be - people of Iraq, just like any other people anywhere, are deeply committed to being part of their own future and will step up against some pretty poor odds in order to make it happen. The world'...

This was a while ago after the U.S. election but it is so good it is worth posting at any time. It's by Pete McMartin of the Vancouver Sun: "By my reading of national and international opinion, the average Republican voter is a slack-jawed cracker named Cletis who lives in a double-wide in Hogspittle, Miss., where he worships rapturously at the First Baptist Church of the Second Coming. He loves NASCAR, hates hockey. He likes his beer with a shot, his shot in a double-barrel, and his double-barrel trained on gays, Darwinists and anyone with pigmentation duskier than his own. Cletis - quelle houreur! - believes in the Bible, the sanctity of heterosexual marriages, the war on terror and the idea that any peckerwood who buys a Honda Civic instead of a Dodge truck is a traitor. Cletis is not just a southerner by inclination or geography: His IQ is south of the Mason-Dixon line, too. He cain't read or write good, except to mark his "X" beside George Dubya's na...

The recent incomprehensible shenanigans over the Canadian flag in Newfoundland were just that - incomprehensible. In most countries, the national flag is the most powerful national symbol, something to shed blood over. Not an "optional" symbol and a bargaining tool to be used for negotiating royalty sharing with the Federal Government. It reminded me of this piece by Andrew Coyne of not too long ago: "You see, in Canada we gave up believing years ago: in religion, in ideals, in much of anything, really. Secure as we were under the American defence umbrella, we were infantilized; having no need to defend ourselves, we could not understand why anyone would have more. Or perhaps it was this: having renounced even the wish to defend ourselves, having absorbed the notion that the country could be destroyed at any moment by a vote of half the population of one province, what was left to believe? If we cannot bring ourselves to believe in the country's existence - ...

For a while now I have been asking a (rhetorical) question: Is Iran having nuclear weapons a good idea? If not, who is going to do something about it? Recently, Germany and France have reiterated their opposition to any kind of military or even firm action along the lines of sanctions against Iran. But if the approach of working through the IAE and the UN has not worked in the past what makes anyone think that it will work in the future? A temptation for an American Commander in Chief is going to be great a year down the road when the problem continues and he has to make a decision whether to bring 150,000 troops home only to face the possibility of having to ship them back out in an action against Iran in not too distant future. The temptation and the pressure will be great to just deal with the problem while the military capability is in place.