Posts Tagged ‘economics’

Dutch Disease

Posted: 08/07/2014 by Toby in Informative
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I found this while reading an article which argues in favour of alternative energy for Australia.

Part of the article is talking about Australia’s coal export to Japan, and how vulnerable Australia is to Japanese preferences. An interesting and compelling part of it was the argument that by not having diverse sources of economic growth/income, when the bottom falls out (preferences change) then there is nothing to cushion the shock.

I like this point a lot because I feel that it is extremely short sighted for production and manufacture (and resources) to be sent overseas when in reality a country can and should support local industry, even if it means the cost of goods is higher and the economy is slower. The sustainability of this approach is much more justifiable.

Here’s the relevant section with some editing:

[T]he great majority of coal exports (and other types of commodity exports) from Australia are directed at East Asia [and] the resources sector accounts for more than half of Australian total exports. Moreover, Australia exports more coal to Japan than the rest of the world put together; thus leading to the issue of the Japanese monopsony (where a large buyer controls the market).

Furthermore, these countries’ (most notably Japan’s) energy preferences can also have huge effects on Australia’s terms of trade and trade volumes. For example, if East Asian nations were to apply strict environmental rules in the near future, or even in the presence of market-based policies such as cap-and trade systems, there could be major shocks to Australian commodity exports that would translate into domestic job and investment losses. Australia might face what is commonly known as the “Dutch Disease.”

The Dutch Disease has its origins in Dutch exports of natural gas and, in this case, [is] described as “the negative symbiosis between the mining and other tradable sectors that mutes both the rate and efficiency of economic growth.”

This is an argument for alternative investments in other sectors other than mining. The Dutch Disease will cause a nation’s currency to appreciate, because of an increased demand for the natural resource, and, therefore, make other exports (manufactures in this case) less competitive. This, again, provides an argument for investing heavily in other sectors such as renewable energy technologies. In this sense, expansion of one part of the economy draws resources from the rest creating serious imbalances and inflation. This phenomenon provides important insight for the mining sector and most notably the coal sector.

Article here: http://www.geni.org/globalenergy/research/economic-argument-for-adopting-a-zero-emissions-energy-policy-in-australia/The-Economic-Argument-for-Adopting-a-Zero-Emissions-Energy-Policy-in-Australia.pdf

Tencent

Posted: 20/06/2010 by Toby in Informative
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Reading about Tencent over on Techcrunch. it’s the superbig internet company you’ve probably never heard of. if you read this blog, you probably don’t care who’s bigger than eBay or Yahoo, and honestly nor do I really, but I was struck by what the CTO said, according to the article (here).

Tencent has also made forays in online payments and ecommerce, but it has had the least success in that category. The company isn’t giving up. I met with Tencent’s CTO Jeff Xiong in Hong Kong last week and when I asked him what the company’s core strength was, he answered “patience.”

Frankly, patience isn’t something you hear about in the tech world much. What you do hear more are words like ‘agile’ and ‘rapid’ and ‘nimble’ and ‘responsive’ maybe even ‘cutthroat.’ Is it possible to be nimble and patient? I suppose it is. To wait for the right moment and then to act. It also makes me realise that some of the other large companies, such as Google have been patient in some ways. A lab, for example, requires patience while amazing solutions are cooked up, and the gadgets and tools that come out of Google Labs are pretty neat, but they didn’t get made in one day.

On the other hand, as the article goes on to say, the position that Tencent is in will not last forever, they need to captialise on their position before someone else captialises on theirs.

I just thought I’d share that strange concept of patience applied to technology.

Also, according to the article, Tencent’s main product/portal is QQ.. so I googled it, and the resulting website was very different from the sites I’m used to. It’s a little bit Yahoo! maybe, but still not very interesting, and just covered with words. Utilitarian, you might say. Check it out!

If you build it…

Posted: 02/05/2010 by Toby in Informative
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This was an interesting story, I know linking to an Al-Jazeera clip is tantamount to blowing up the white house, but I’m pretty sure they’re just a TV station like HBO or BBC.

The story is about the idea that in China there’s so much surplus cash in one particular city (because of oil) that they are simply building buildings that no one needs yet.

Check it out! (SLYT)

Carbon Trading

Posted: 10/11/2009 by Toby in Informative
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This one is for Granddad Frater, who has mentioned several times this week that the next big market is going to be carbon trading. I assume he hears this stuff on the radio. Apparently it will be like a mini version of the stock exchange, or a mini version of the property market, where rights to emit x amount of carbon will vary in value according to supply and demand, and according to the ability of smart people to manipulate the market.

For example, according to Granddad, a farmer could make more money planting trees than planting crops, since the trees would create a reduction in carbon, and that reduction be sold on the emissions market.

I have no idea how that would all work. I have a sneaking suspicion that I will not get rich this way. This is on top of my sneaking suspicion I will not get rich at all.

Anyway, I thought this article was interesting, because it didn’t take long after the reality that carbon emissions will become a market unto itself, before someone decided to sound the doom and gloom early, to be able to say “I said it first!! Ha ha!”  I think it’s more the I told you so factor, than it is the actual dire situation that is described, for two reasons 1) This market is relatively new, and I don’t know much about it, so it couldn’t possibly pose a threat, and 2) Hello, tree huggers are drama queens.

First, read part I.

In part II we get into a specific case where your preachy writer had to choose between an ascetic conservationist approach and a crazed consumer approach, and chose crazed consumer.

I recently found myself in a quandary on the buying used issue. We needed to get some more luggage for the trip to Australia.

First, could we borrow some suitcases? Well, no. Not only did we plan to re-use the luggage, but we were also somewhat limited in our ability to borrow the bags we needed for two reasons: One, we don’t have that many friends here in DC, and two, to return the bags from Australia would cost a bunch.

We wanted stuff we could keep, since Sharole and I want to travel, maybe as often as once a year. I have a very nice carry on bag which Sharole got me last year. I’ve used it on countless trips now, and it’s really quite nice to have. Sharole doesn’t have one, so we decided she would get a carry on as well. I then suggested we go for a duffel type suitcase, because they would fold down and not take as much space when they were not being used. We have one from Sharole’s brother Seth which has been great, because when we’re done using it, it just folds up and fits right inside another suitcase.

We sat down and worked out how many items we could carry on, and assigned items to each person. We needed to get three more large bags and a carry on for Sharole. We also needed two smaller bags, on wheels, for the kids to lug their own diapers and snacks in.

We tried to get used suitcases. We saw one ad on craigslist for two practically new suitcases, but we were not quick enough, they sold fast. For some reason there aren’t a lot of listings for suitcases right now. I kept telling myself we should be able to settle for some junky ones, just to get us over the Pacific. The problem here, of course, was one of quality. Even low quality items can be recycled, true, but they don’t last, and their value to others, i.e. selling it to someone else, falls off quickly. Low quality items fray at the edges, break at the seams, need repair, age in the wrong places, or one small part will break, rendering the rest of it partially or completely ugly, and partially or completely useless.

So a high quality used item is ideal. In the end we didn’t find items that fit our needs 2nd hand, even on eBay. Has anyone else noticed they have shifted heavily towards new items, sold at comparable prices to online stores, and the actual used recycled stuff is rare?

So we bought two duffels that were over 30″, and probably could have gone for another large duffel, except I saw a Samsonite hardside that I simply had to have. Ever since my Atlantic vault hardsided suitcase was smashed by.. American? United? I forget at the moment, I have been pining for another of the same. They don’t make that suitcase any more. The airline did replace my Atlantic with a Delsey, but I don’t like it at all, because when one carries it, top or side, the lip pops out. The Samsonite I saw had the 30/70 lid, like the Atlantic, rather than the 50/50 like most suitcases. We will be using the Delsey to travel, but I plan to sell it on the other side, and keeping the Samsonite. We also got Sharole a nice lime green 21″ carry on, with a hard shell bottom and a cloth top for expandability.

To summarize, two things drove us to purchase new: The specific type of bags we were interested in, and our willingness to keep and reuse the stuff ourselves. Driven to buy, we were unable to find used items that fit what we wanted. Maybe our preferences were too specific, and could have been relaxed, but I didn’t even see used items that would meet enough of the requirements to make it usable. We also justified going the purchase route by recognizing that Sharole’s bag should get re-used, and the large bags would get re-used. The large bags were duffel style, so they’d collapse when empty, and wouldn’t take a lot of storage space in between uses.

We Are Russia

Posted: 26/03/2009 by Toby in Informative
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In this interesting talk, Dmitry Orlov discusses Russia during the 1990′s when that country experienced economic collapse, and suggests that we can learn from their tactics.  I have linked to his blog page; he has links to the audio and video in the first paragraph.

It’s very Jane Jacobs, which would explain why I enjoyed it so much.

Allow me to get on my grossly self-important soap box for a moment.

Consider the following scenario: You have an old pair of shoes. At the store, you can purchase some brand new shoes for $60. You also know of a shoe repairman who will bring your shoes up nicely for $50.

Our country is full of those who choose the new and chuck the serviceable. We have lost the ability to recycle not just plastic bottles and aluminum cans, but in clothing, tools, furniture, and other stuff that wears out but can be repaired. By chucking the old stuff, and get some new cheap stuff, we are doing two things: Stuff piles up in the landfills and purchases of new items diverts money from the local economy to the offshore manufacturer. No wonder China holds trillions of US dollars which it does not even need to touch.

While I can pat myself on the back for having my black dress shoes repaired (and the guy did a great job), what do I do when I need something that I don’t have at all?

First question to consider might be, how long do we plan to keep it for, or how often do we plan to use it? Let’s say something is only going to be used once. My preference is to borrow it from someone, use it, and then return it. This saves a heck of a lot of money, and prevents a heck of a lot of waste. If I’m going to use something a lot, well then maybe it does make sense to invest some dollars, not only for the sake of the borrowee, but for the sake of the borrower, since much use also increases risk of damaging stuff that is not my own. I’m not sure what the tipping point between ‘borrow’ and ‘buy’ would be, but I suspect that frequency and duration are both important. Using something once for a long time, or using something more than once every couple years some people might say get your own.

The other factor to consider, that really should be mentioned is whom you’re borrowing from. This can change the tipping point slightly more in your favor if you’re near close friends or family that have stuff that you know they don’t use very often, or they won’t miss, like a hot glue gun for a couple months while you complete your 60′s bowery doll house. Allow me just to make a small jab once again at America for being so migrant that close friends and family are left behind, and this benefit is not an option (we are a case in point, and so have to rely more heavily on the buy used arguments in the next paragraph). I think this migratory non-close to family culture is also part of the reason America is in such a large trade deficit, and consumes so much more than it produces.

Once it’s determined that borrowing is out, then why not get something used? Usually I look on craigslist. This is perhaps the least amount of effort, least cost, no middle man, and so on. The grandpa of craigslist, the classifieds, also still a great place for used items. eBay used to be and sometimes still is another place to get used stuff with lots of life left. I plan to get my next camera this way, and hopefully save like half the price compared to new. Pawn shops, thrift stores, consignment stores, swap meets and yard sales are also little gold mines for items that are used, but not used up, provided you’re willing to do a little digging amongst the items that never should have been made in the first place.

Part II: The Luggage