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economics 2

New translation, the Magna Carta
article archives at abelard's news and comment zoneeconomics archives
1 2 III-2004: 29

economics 2

growth of gem diamond technology and manufacture

considerably more detailed than earlier related article

“In a warehouse in Sarasota, Fla., a company called Gemesis is growing diamonds in two dozen or so high-pressure, high-temperature crystal growth chambers, each the size of a washing machine. Within each chamber, a tiny sliver of natural diamond is bathed in a molten solution of graphite and a proprietary metal-based catalyst at approximately 1,500 °C and 58,000 atm of pressure. Slowly, carbon precipitates onto the diamond seed crystal. A gem-quality, 2.8-carat rough yellow diamond grows in just under three-and-a-half days.”

related material
‘invest’ in diamonds ...

the web address for this article is


related material
‘invest’ in diamonds ...


a few years ago, you could trust the franc fort, now china melts it down
meanwhile Europe runs on chocolate EMU tokens.

“Such is China's voracious appetite for raw materials to feed its rapidly growing economy, that the country is snapping up the obsolete coins and melting them down for their metal content.”

the web address for this article is



us deficit? as usual, my analysis accords with that of greenspan

From the current Economist, not publicly available on line.

“Messrs Dooley, Folkerts-Landau and Garber put their faith in the [asian] rigged exchange rates and regulated capital markets of Asia. Mr Greenspan puts his faith in market forces and the flexibility of America. None of them thinks America should lose any sleep over its current-account deficit. All of them caution against protectionism, of which there have recently been unnerving signs.

“Most of the discomfort caused by America's deficit will be felt neither in Asia nor in America but in Europe.”

Europe is already uncompetitive due to endemic government interference in markets.

Meanwhile, the EMU system (Euro) is weakening under the fissures now appearing in the Europen stability pact, as German and French politicians blithely ignore it.

In Europe, there is the fascinating real world experience of watching an inflationary currency grow with unpredictable, but inevitably nasty, results.

You may also watch the awful reality slowly seeping through dull and economically illiterate minds – from another Economist article :

“Does this matter? In the long run, the question that Mr Zalm raises is certainly troubling. How can the euro-area stop fiscal irresponsibility in one country damaging others? And beyond the economics, there is a political problem. The EU is a "community of laws". It is soon to adopt a constitution full of solemn and legally binding commitments, including the same excessive-deficit procedure that has just been wilfully flouted. If law is replaced by political bargaining, with bigger countries bullying their way out of a tight corner, the very basis of the Union is undermined. And it makes it far harder to insist on the new EU members who will join next May observing all the rules.”

Riding the Euro bus is for self-destructive personalities who wish to experience road kill from the inside!!

If you wish to understand, see also the mechanics of inflation.

the web address for this article is


open economies tend to damage poorer countries through corruption

“The most plausible explanation for this disparity, says Paserman, is that in a closed country, corrupt officials are obliged to spend their ill-gotten gains at home. Even if this money is spent on the black market, it still helps boost the nation's economic growth. But in open nations, corrupt money leaves the country, doing nothing to relieve poverty, so encouraging more corruption.”

This is a dubious argument, maybe the data could be interpreted as rich economies tend to beome open.

the web address for this article is


a most interesting short item on greenspan policy

Perhaps the underlying question behind the concerns expressed in the item is, “How to replace Alan Greenspan with a hack?”

Fortunately, I think the USA can do better than that.

To understand the difference between the position of Greenspan and that of New Zealand, start by thinking ‘reserve currency’. This has ever looming, large implications in Greenspan’s decisions.
Incidentally, $US reserve currency status also contains the root cause of the hysteria of European socialists, as they desperately attempt to generate panic over the dollar. It is a large stakes game, socialism may be dying, but the cornered rat can still be dangerous.

The text of Greenspan’s short, clear and sane speech is here.Four GoldenYak (tm) award

In the speech, Greenspan effectively asks two questions.
First, “How much can we rely upon predictive models to automate the setting of economic policy?” It is well established that such automated systems usually tend to out-perform human intuition, with a possible exception of the very best practitioners in any field. An exception that would include Greenspan.

Secondly, he asks, “Do you wish to take a fairly low probability, extremely costly risk, or would you prefer a somewhat more probable, but less costly risk?” These are the decisions that people in highly responsible positions have to take as a normal part of their duties. It is why the most successful of them can command such high rewards.

the web address for this article is


government statistics—the con game goes ever onward
How government falsifies the RPI/CPI.
It is good to see that at last someone takes notice.

The situation is far worse even than the article suggests, as you will discover by reading the mechanics of inflation.

Government statistics everywhere are polluted by these games, the numbers are barely worth the destroyed trees upon which they are printed.

This type of cooked economic ‘statistics’ echoes through any attempt to understand what your government is really up to, or what is really going on in national economies.

the web address for this article is


poverty and distribution of wealth
(lead from lavigne)

“The Argentinean press has taken to talking about "African situations", and the main cause of these appalling scenes is poverty. The recession has made one in five Argentineans jobless, the peso has plummeted in value, and food prices have soared. Bizarrely, while people go hungry, the country is still producing grain, soya, corn, and meat for export.”

Why are there poor in Argentina?
Why is food being exported while people starve? A common pattern in human experience, said to be a contributory cause of the Irish potato famine starvation.

A reason for this state of affairs can be a belief that the poor deserve their poverty, by virtue of not working and that to give them food would encourage them to live on charity. Of course, if they are born in a hovel with no capital and gain only poor education, rising in the society would take extraordinary ability, drive and maybe luck. If your family already has capital and can educate you to a high standard, your ability to survive and flourish is clearly much greater on the average.

Here is an article on the growing concentration of wealth in South America, with the suggestion of opening US markets to Brazil and others. How much is the relationship between large corporations, and the kleptocracies in backward countries, corrosive to the interests of the poor? Does the concentration of wealth raise the country?

Gini data
(Gini is a measure of inequality of earnings: the higher the number, the higher the inequality. See here for more.)

country Gini value GDP per capita (PPP) life expectancy
Brazil 59.1 $7,400 71.69
Chile 57.5 $10,000 76.58
Mexico 51.9 $9,000 75.19
Venezuela 48.8 $6,100 74.31
Argentina 45.0 * $12,000 75.91
USA 40.8 $36,300 77.71
Russia 39.9 $8,300 67.10
UK 36.1 $24,700 78.38
Switzerland 33.1 $31,100 80.39
France 32.7 $25,400 79.60
Canada 32.0 $28,900 80.10
Sweden 25.0 $24,700 80.40
Japan 24.9 $29,400 81.15
Denmark 24.7 $32,200 77.62
Gini values: various dates from 1994 to 2000
GDP values: 2002 approx.
Life expectancy: 2005 estimates
* estimate from world bank data
For population and country land area data, see Wealth distribution and food security table.

All government figures should be subject to the greatest scepticism.. Governments habitually manipulate figures in order to make themselves ‘look good’. Other regard such data as ‘secret’!

see also
stress, status, politics and the human condition

the web address for this article is



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