Archive for January, 2011
Military exercise or Top Gun movie footage?

I’ve updated the post on chagning balance of power to mention that  China might have passed off footage from Top Gun as part of a military exercise (hat tip Market Ticker):

Did China Try To Pass Off Top Gun As Air Force Footage?

A few days ago, China Central Television showed footage of what they claimed was an air force training exercise conducted on January 23. From the looks of things, they were actually just playing clips from Top Gun.

The clips in question were reportedly aired during the News Broadcast program on China Central Television, the major state television broadcast company. They supposedly showed a J-10 fighter firing a missile at another aircraft during a practice exercise.

But an internet commenter quickly pointed out that the aircraft the J-10 was shown shooting down was an F-5, an American aircraft, and the very one Tom Cruise guns down in a scene from Top Gun. Comparing frames from the CCTV broadcast (left) and Top Gun (right), well, they’re lookin’ pretty much identical.

As the linked report says:

There’s no word yet on whether or not the Chinese fighter pilots engaged in any beach volleyball after the exercises. [MiniTofu via Geekosystem]

Reality according to Chris Christie

A couple of short videos that are worth watching:

  1. Chris Christie explains reality to a government employee. He points out that earlier politicians made promises they new they could not keep.He will not be the last politician to have to explain this to the beneficiaries of government largess.
  2. PJTV: Bias! The Case Against Lawyers and Judges; Shows that Judges can’t escape the influence of their past. Their world view is hopelessly distorted in favor of their profession.

Hat tip to Instapundit for both.

Plunging UK living standards

There are some great charts and comment in this post:

UK deleveraging: “standard of living to plunge at fastest rate since 1920s

Put simply, the UK economy will remain moribund for years to come as the deleveraging process slowly works its way through the system.

The question then is: with Australia’s house prices now the most expensive in the Western world, and our household debt levels similar to the UK at its peak (i.e. 157% of incomes), how long will it take before we suffer the same fate?

Poor old England. How are the Brits going to afford power and food? The UK had to import food during WW2. It’s added 10 million people since – many housed on formerly prime agricultural land. Sure farming is more productive, but is it sufficiently more productive?

As for power, they closed their coal mines under Thatcher and have built no new nuclear power stations since who only knows when. They have invested and keep talking about green power which was too expensive even in the midst of a bubble economy. Without on-going subsidies they are simply a waste of money. In a de-leveraging economy misallocations of capital are really felt – as Americans will find out.

What agriculture the UK does have is heavily industrialized i.e. requires lots of cheap energy. With a collapsing currency and declining North Sea oil production that is going to be a thing of the past.

The pickle the UK, USA and Spain find themselves in clearly show the folly of relying on immigration induced housing demand to create your economic nirvana. A lesson Australia will eventually learn.

But the post begs the question of what the Australian government will do is if serious de-leveraging does occur in Australia? Australia has the advantage of being able to look at other countries further down the curve – Iceland, the UK and USA… etc.

Allowing covered bonds while indefinitely extending the government deposit guarantee scheme makes nationalizing losses a near certainty. The Australian people have locked in transferring wealth to investment bankers with hardly a murmur of protest. Will the government do less when bankers are warning of anarchy and the need for marshal law if they are not given more hand-outs?

Will the Australian government let those who took the risks incur the losses, and thereby husband resources to help those in most need? Or will Australia transfer money to the risk taking wealthy so it will have nothing left in the kitty for the truly deserving?

What the government should do is obvious. What it will do is less so. The UK, USA…etc precedents suggest there is no way will Australia let those who took the risks wear the consequences. But if our decline happens after the consequences of  the bailouts are manifestly obvious, then surely even the Gillard government would hesitate to go down that path. But given the covered bond precedent….

As for governments being able to create wealth by printing, that is simply stealing from the prudent to give to the profligate. It might work for a while, but in the long run it destroys societies. We want stable prices not inflation, even though this will force politicians to admit the mess they have made.