Eating away the world’s plastic problem ‘It’s not God’s fault. It’s man.’
By Selva Freigedo in Albert Park ‘We live in an era of fraud in America. Not just in banking, but in government, education, religion, food, even baseball...What bothers me isn't that fraud is not nice. Or that fraud is mean. It’s that for fifteen thousand years, fraud and short-sighted thinking have never, ever worked. Not once. Eventually you will get caught, things go south. When the hell did we forget all that? I thought we were better than this, I really did.’ Mark Baum, The Big Short Yesterday we talked about The Big Short. The movie tells the tale of a bubble taking over…and the crash and desperation that followed. While The Big Short does a great job at explaining the crisis and some of the complicated instruments, there is one big criticism, that is, that there is one big element missing. I’m talking about the role of the US Federal Reserve in all of this. In fact, there is barely any mention of it, except from a few remarks that the regulators were asleep at the wheel. The scene above is one of those mentions. In it, investor Mark Baum is at a conference debating against a bullish investor. We are told that Alan Greenspan—‘one of the architects of the whole crisis’—is scheduled to speak after them. But we never hear from him in the movie. It would have been interesting if it had been included. Why were banks and the financial industry so keen in lending? Why had home prices bubbled up? Easy credit and low interest rates played a key role in all of this. ..............................Advertisement.............................. | Australia is celebrating 28 years recession free… But that success might represent a dark future The Australian housing market is falling at GFC speed… Household debt is 189% of our income… The banks are panicking after the Royal Commission… Find all the details right here | .......................................................................... |
There was an interesting article from economist Jeffrey Tucker in the Foundation for Economic Education about it. As he argued: ‘[The film] leaves out any discussion of the main culprit behind the financial crisis, which was not Wall Street “greed” but bad monetary and credit policies from the Federal Reserve and the federal government. The movie barely hints at any exogenous factors behind the boom or bust. […] ‘The question that neither The Big Short nor Margin Call address is the one everyone should be asking: how did so many smart people get it so wrong for so long? Here is where we must deal with the delicate signaling system of interest rates and the way they came to be so distorted through 1) Fed policy, 2) subsidized lending, and 3) the recklessness of traders in the face of too-big-to-fail policies.’ The film makes no mention of the role of the Fed before or during the crisis. But, in looking at this, I think it’s crucial to also look at their reaction following the crisis too. In the aftermath we saw governments bailing out the banking system. We also saw the US Fed drop interest rates for a very long time and use unconventional monetary policies to pump money into the system. In the last years the Fed has tried to bring things back to normal. They have increased interest rates and started to decrease the size of their balance sheet. But the idea that the Fed could go back to normal through quantitative tightening came crashing down in December, as the markets threw a tantrum. Now the Fed has put interest rate increases on hold…we may even see more easing. And this will increase risks. Here is Bloomberg (emphasis added) ‘Some Federal Reserve policy makers seem resigned to running a heightened risk of asset bubbles and other financial excesses as they seek to keep the economic expansion going. ‘That’s one of the messages tucked inside the minutes of the Federal Open Market Committee’s March 19-20 policy making meeting. ‘“A few participants observed that the appropriate path for policy, insofar as it implied lower interest rates for longer periods of time, could lead to greater financial stability risks,’’ according to the minutes, published April 10. […] ‘New York Fed President John Williams said in October that the central bank’s rate increases would help reduce risk-taking in financial markets, though he added that was not their principal purpose. ‘Such talk has since faded. “There doesn’t seem to be the same idea of having tighter monetary policy so as to lessen the risk of asset bubbles developing,” Wright said.[…] ‘“There are reasons for fearing the economic consequences of very low’’ rates, former Treasury Secretary Lawrence Summers said in an April 15 presentation at the Peterson Institute for International Economics in Washington. ‘“These include a greater propensity to asset bubbles’’ and “incentives to substantially increase leverage,’’ the Harvard University professor said.’ The Fed has done a U-turn on policy…but more easing will continue to work as long as investors don’t get fearful, and flee to less risk. All of this is doing is buying us time. At some point, to quote Mark Baum, we will eventually get caught. Best, Selva Freigedo, Editor, Markets & Money PS: We could be heading towards a global crisis…at a time when we still haven’t recovered from the last one. When the next one arrives, being prepared will be key to protecting your wealth. To help you do this, I have enlisted the help of an exclusive group of insiders. Our exclusive insider group is made up of economic experts, traders, investment specialists, geologists…the list goes on. Many of these insiders are experts that have gone through some of the same scenarios we could be facing here in Australia, and can share you with you what they have learned through their experiences. But, these experts aren’t just looking at protecting their wealth. They are also looking at the best ideas and trends to invest in. And I can get you direct access. You can find all the details here. ..............................Advertisement.............................. | You won’t find this genius listed amongst the world’s greatest thinkers like Einstein, Newton or Tesla… | …but his 1942 experiment could go down in the history books as the GREATEST clean energy breakthrough of all time. Bigger than solar, bigger than wind and bigger than the lithium battery. Click here now to see how a small $500 stake in each of the three Aussie companies helping make his energy dream reality… | Source: The New York Times | Could net you $16,375 in the next 16 months! |
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Eating Away the World’s Plastic Problem By Ryan Clarkson-Ledward in Albert Park, Australia When it comes to innovation, it’s all about that ‘eureka’ moment. When the lightbulb in your head finally goes off. The birth of a great idea. For scientists, this moment is usually the culmination of hours of painstaking work. The finish line in a proverbial marathon of lab work. At least that’s what usually happens. Other times, science is just a case of dumb luck. A random accidental discovery that no one expected. Sometimes with some pretty amazing results. For instance, 90 years ago a man named Alexander Fleming made his own accidental discovery. At the time he was a researcher experimenting with the flu virus in a lab. But Fleming had one major flaw, he was a tad careless. And in 1928, an absent-minded Fleming went on vacation for two weeks. When he returned though, he stumbled upon his latest mistake. He’d left a staph infection sample out and it became contaminated. The petri dish now had a fresh coat of mould. But, to Fleming’s amazement, the bacteria wasn’t growing around the mould. He had discovered penicillin, and it was all because he was a bit airheaded. It’s just one example of hundreds. Microwaves, insulin, super glue and more were all, at least partly, accidental discoveries. Just because they were accidents, doesn’t make them any less incredible though. It still takes an inquisitive and bright mind to see the potential. A less astute person may have just cleaned those contaminated petri dishes without even caring. Which is why these chance discoveries are almost more impressive. At the very least, they are certainly more exciting! Now another accidental discovery could be about to change the world as well. One that could clean up our growing plastic problem. Hungry, hungry enzymes Two years ago, Japanese scientists stumbled across a type of bacteria that ate plastic. A rare breed that was found chowing down in a dump. Naturally, scientists decided to investigate further. And now they’ve stumbled upon a breakthrough. The team behind the discovery have isolated the enzyme that produced the bug. But, in their testing to see how the enzyme had evolved, they accidently made it even more effective. Now, the mutant enzyme can begin breaking down PET (polyethylene terephthalate) plastic in just days. A common plastic that is found in almost every bottle globally. Currently, most of these bottles end up in landfill or the ocean. A process that eventually breaks down the plastic after centuries. Or, if they aren’t buried or thrown in the sea, these bottles are burnt. A process that produces massive amounts of CO2, directly contributing to global warming. This enzyme though could be the breakthrough for a recycling revolution. Professor John McGeehan who is leading the research comments: ‘What we are hoping to do is use this enzyme to turn this plastic back into its original components, so we can literally recycle it back to plastic… ‘It means we won’t need to dig up any more oil and, fundamentally, it should reduce the amount of plastic in the environment.’ Despite our current recycling efforts, the material doesn’t get turned back into plastic bottles. Instead, most of it ends up in clothing and carpet fibres. With this enzyme though, we could actually turn bottles back into bottles. That’s a big deal when you consider that globally, one million plastic bottles are sold every minute! McGeehan says the enzyme can perform even faster, as well. It’s still not completely optimised according to the team’s research. And if it’s anything like previous industrial enzymes, then the potential could be massive. As The Guardian explains: ‘Industrial enzymes are widely used in, for example, washing powders and biofuel production, They have been made to work up to 1,000 times faster in a few years, the same timescale McGeehan envisages for the plastic-eating enzyme.’ In other words, in just a few years we may never need to make another plastic bottle ever again… Meaning the US$140 billion PET bottle industry could be about to get a very harsh reality check. Lightning in a bottle Now, I don’t expect this miracle enzyme will solve all our plastic problems. But every little bit helps. In Australia for example, we like to think we’re pretty good at recycling. The latest national waste reports states that we recycled 60% of all our waste in 2014–15. A pretty damn good effort I would have thought. Turns out, we’re not doing great at all. We’re still dumping massive amounts of waste into landfill. Recycling industry experts are reportedly calling it a crisis. And it could be set to get a whole lot worse. In 2016–17 we shipped 1.2 million tonnes of waste to China. Roughly 30% of our recycling ends up in the Middle Kingdom. But in July last year, China said no more. They announced they would no longer import waste from other countries. That ban came into effect in January and now local recyclers are feeling the pinch. Right now, the future looks uncertain as to what will happen. If the government wants to keep recycling, then councils will likely have to foot the bill. And that could mean higher rates for everyday Australians. In other words, there is no easy solution unless we can solve the issue of cost. After all, we certainly have the capabilities right now. Visy actually has a plant that can turn used PET bottles back into 100% recycled bottles. But it’s not proving all that popular because of the cost. As Beverages Council CEO, Geoff Parker comments: ‘It’s about the price of that [recycled plastic or recycled PET]. It’s also about the price of virgin PET — that’s the original PET. And that has a number of different factors at play around world oil prices and electricity prices.’ But despite these challenges, it is possible. And hopefully this new enzyme could be the next big breakthrough in making recycling more efficient. Regards, Ryan Clarkson-Ledward, For Markets & Money ..............................Advertisement.............................. | Crazy!? Tiny ASX company discovers way to instantly charge electric cars with common iPhone tech. It could make early backers bucket loads from a tiny $500 stake. | | Source: Kogan.com | Click here for details. |
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Should Jesus Have Gone to College? By Bill Bonner in Youghal, Ireland ‘When I think back On all the crap I learned in high school It’s a wonder I can think at all.’ Paul Simon, Kodachrome Would Abraham Lincoln have been a better president if he had a college degree? How about Cornelius Vanderbilt? Or Jesus Christ? More education In a recent survey, Americans favoured more education spending over all other categories of the federal budget. Spend enough of other people’s money on their little Jimmy, people must believe, and he’ll turn into Einstein, Erasmus, and Elvis, all rolled into one. But where’s the evidence? Imagine that you had studied under one of the greatest economists of the 20th century, Paul Samuelson, a Nobel Memorial Prize winner. Or another Nobel-winner, Paul Krugman. You might as well have studied surgery under the Boston Slasher or ethics under Heinrich Himmler. Neither Samuelson nor Krugman ever understood how an economy worked. Studies show that people with more education earn more money. But this is entirely misleading. People with private jets earn more money, too, but that doesn’t mean that you will get richer if you buy a Gulfstream. Still, a lot of people think school is worth the money. Here’s the LA Times: ‘Of the many outrageous allegations revealed by federal prosecutors in the college cheating scandal, one stands out. ‘Someone paid $6.5 million to get his or her children into elite schools. But the identity of that parent – and details about which schools were involved – remains a mystery nearly two weeks after authorities in Boston filed the charges against dozens of wealthy individuals.’ Even parents who aren’t crazy seem willing to spend a lot. Here’s a recent post on a private chat line: ‘My college, Trinity in Hartford, Connecticut, is similar to Wesleyan, Williams, Amherst, etc. ‘Here is what is costs, as reported by the college president: ‘“After projecting next year’s income from the endowment and gifts, we’ve determined that providing an outstanding Trinity education will require a 3.75 percent increase in our comprehensive fee. ‘“Here is the breakdown of the comprehensive fee for 2019–20: ‘“Tuition & General Fee: $58,620 Room: $9,960 Board: $5,340 Student Activities Fee: $430 Total: $74,350”’ Holy mackerel! Slave to debt What do you get for that kind of money? We don’t know. But if you pay for four years of college at that rate, you’ve spent about $300,000. That would be enough to buy a decent house. And that would spare you about $1,500 in monthly mortgage payments. If, on the other hand, you go to college, you are almost always condemned to debt slavery. You begin with college debt. Then, you have to get a mortgage and an auto loan. And then, you need to get a job to pay your bills. As you grow older, your wages tend to increase; but so do your expenses. And there’s the federal debt, too — now growing twice as fast as GDP. You can almost never break free. How much better it would have been to take that $300,000 and use it to start a business…or learn a trade…or simply give yourself a grubstake, so you don’t have to borrow. In some cases, of course, going to school is a practical and/or required way to enter a trade. There are not many self-taught doctors…or nuclear engineers. If you’re going to practice rocket surgery, in other words, you’re probably going to need a diploma. But most of the work done by most of the people doesn’t require any college at all. A smart, motivated person can do well with only rudimentary reading and writing skills. It’s grit and gumption that pay off; not college degrees. Besides, you can find out almost anything you want to know online. At least, that is the way it should be…and would be…in a win-win, free economy. Remember, capitalism is ‘what happens’ when nobody points a gun at your head. Make things happen You can make things happen in your own life. You can make a door. Or a pie. Or a business. But you can’t make an economy. That involves thousands or millions of people, going about their own business, with their own plans and own projects. And the more you interfere with the private economy, the more wealth (time and resources) you destroy. And here comes presidential candidate, Elizabeth Warren with a bazooka. The Boston Globe: ‘Senator Elizabeth Warren unveiled a sweeping plan Monday to forgive massive amounts of student loan debt for middle-class Americans as she tries to appeal to the young voters expected to play a major role in the 2020 campaign. ‘The Democratic presidential candidate from Massachusetts also called for free tuition at state colleges and universities as another way to relieve the higher education costs that have financially crippled many millennials. ‘“College shouldn’t just be a privilege for those who can afford to take on the significant expenses associated with higher education,” she wrote in a Medium post that announced the plan. ‘“We need to fundamentally change the broken system that created the crisis in the first place,” Warren wrote in the Medium post.’ There is a phony solution to every problem. Ms Warren has found one of them. Regards, Bill Bonner ..............................Advertisement.............................. | What is AUSTRALIA’S ‘POTEMKIN’ COMPLEX? And why it should make you nervous. Click here to find out | .......................................................................... |
From the Archives... A New Competitor for Uber and Lyft?By Selva Freigedo | April 11, 2019 What’s in a Range?By Matt Hibbard | April 10, 2019 The Aussie Stock Market Is Not Suggesting a CollapseBy Terence Duffy | April 9, 2019 Why It’s Getting Hard to See RealityBy Selva Freigedo | April 9, 2019 Broken CommunicationBy Selva Freigedo | March 27, 2019 |