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Currency war hots up: what happened to Pittsburgh promises

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Paul Mason | 10:58 UK time, Monday, 11 October 2010

The IMF talks this weekend ended in acrimony, with no agreement between China and the USA over currency manipulation and dire warnings coming from the mouths of all the intermediaries that we are entering a competitive devaluation phase of the crisis that will, with certainty, lead to competitive trade policies once everybody realises currency tactics take you nowhere.

It's all a far cry from Pittsburgh last year, where G20 countries agreed to co-ordinate not only fiscal and monetary policies, banking re-regulation but also macro-economic policies. In a way they are - they are all in a co-ordinated way trying to shovel the economic dirt onto another country. The one certainty - the gold bubble ain't a poppin' anytime soon.

Open thread below while I follow up this story and work on my US films (TXing Tuesday and Wednesday).

Comments

  • Comment number 1.

    Well, it looks like that the SCO countries are not going to 'play ball' with the Libertarian free-market capitalists (aka Trotskyists), as they (SCO) will always win in a race to the bottom.

    http://en.wikipedia.org/wiki/Shanghai_Cooperation_Organisation

    I think the game now is called beggar-thy-capitalist-neighbour!

    In the meantime, we (the UK) cannot even find the money to properly defend ourselves. Our navy is to be halved so as to allow the continued production of the two aircraft carrier ships. Ships which the Chinese already have the capability to knockout with one missile - no matter where they may be located in the world (as detailed on a previous PM blog).

    How have they managed to get us into this position?...remember, the SCO countries have highly regulated capital/finace structures (aka banks/banking). They also retain the ownership of the means of production. We don't even have an industrial policy!

    This is getting intersting...if not a little disconcerting.

    What period of history, over the last 100 years, does this remind you of?

  • Comment number 2.

    IMF, G8, etc: all of them are fiddling while Rome (or now the planet) burns.

    http://www.ted.com/talks/tim_jackson_s_economic_reality_check.html

    I was put onto this by the NEF.

    http://www.neweconomics.org/

  • Comment number 3.

    The slow motion economic car crash continues.

    Those in the know all along can only observe and comment upon it unfolding within the confines of blogosphere it apears.

    This latest shift merely constitutes the latest milestone as the crumple zone extends towards the passenger compartment. It marks the potential transition into nationalism, this is the bit where we get to find out who really has the leverage and who has no trunks on as the tide continues to go out.

    It was interesting to read in the Times this weekend (I wish I was surprised that this was not reported more widely)that during the recent diplomatic spat between China and Japan over the arrest of a fisherman China threatened to halt the export of rare earth minerals to Japan, which would have been deeply damaging to their hi tech industries.

    I understand shortly afterwards the Japanese reached a compromise.

    The little rare earth mineral issue as described above (and predicted months ago by Paul) is a good place to start for an emerging dominant superpower to flex one small economic muscle in its little toe and guage the reaction before moving onto greater things....fancy buying any USA debt anyone?

    Perhaps not just yet, they are engineers at the top by training and would carefully consider any next move, they will probably want to be sure that they have locked in thier own consumer demand and leverage through the developing world before going there ...6 to 12 months maybe...


    As #1 says

    ''Well, it looks like that the SCO countries are not going to 'play ball' with the Libertarian free-market capitalists (aka Trotskyists), as they (SCO) will always win in a race to the bottom.''



    The west has lost already, providing that is realised, ego put to one side and accepted some form of harmony could emerge, but the more the response shifts to one along nationalistic or worse still religious lines the harder it will get to pull back.

    There is very little time to do that before some form of tipping point is reached, and the signs, at this point are not encouraging.

    Politically and economically the west have been totally out maneouvered, worse still the technology edge they had is now also now largely blunted militarily and economically.

    The only honourable thing for the west to do is to seek reasonable economic peace terms now which recognise their revised status in the geo-political world. I dont think the east would be found to be unreasonable in that regard, but equally I think they would be prepared to fight their own corner if forced to.

    I think any reasonable person would pray that it will never come to that and hopefully enough of them are around and can make a big enough noise to stop it.

    It is so important now to try to break through the leveraged media stranglehold, no time to stand on ceremony and respect protocols which only serve to maintain the status quo. This stuff is too important.


  • Comment number 4.

    SO MUCH FOR 'DEMOCRACIES DON'T GO TO WAR'!

    Another 'des res' lie we have been living in.

  • Comment number 5.

    In previous recessions the US economy has been able to pick itself up eventually as its currency has devalued against those who export to the USA, thus allowing the repatriation of production which in turn leads to an improvement in US employment.

    This time it is different as China needs for its own domestic reasons to keep its factories pumping out consumer goods for the west. The result is that the reminbi is not being revalued against its dollar peg thus causing the domestic problems in the US to escalate.

    This is causing the protectionist lobby in the US, which is never far from the surface despite the free market rhetoric, to have a field day.

    The continued and increasing rate of unemployment in the US is causing major political difficulty. There is a risk that the Fed will initiate another round of QE to both boost domestic consumption, stabilise and improve domestic asset values and devalue the US dollar further against all other currencies. You can see how it makes sense to them.

    This will only serve to perpetuate the current imbalances in global trade which are very much part of the current problem. The need for an intelligent resolution of the prevailing conditions is critical. However, are all the domestic elites around the world capable of achieving a basis for currency stability which allows damaged economies to rebuild?

    I can't see it myself; so protectionism seems to be the way chosen to go forward by default. It is all very well economists studying the Thirties and writing text books to that affect, but when reality bites the only thing that counts for the Average Joe wherever he lives is do I have a job?

  • Comment number 6.

    In the regulated economies v. the unregulated ones I know which I will be putting my rapidly devaluing money on.
    The west will need to manage their economies properly and directly and not rely on hopeless variants of monetary economics.

  • Comment number 7.

    We know that the current situation is untenable - if China et al insist on operating a rigged market, they cannot expect the rest of us to remain supine and simply allow our manufacturing industry to die and our debts to go on rising until we have a junk bond credit rating, so we can no longer afford their products anyway.

    Neither should we continue to mess about with currencies as an indirect way to address trade imbalances - we should go straight for the root cause of the problem in the UK and announce a plan of phased import controls/tarriffs to allow UK retailers and manufacturers to plan for and put in place a programme of returning production to the UK if they've offshored it and to take opportunities for import substitution - three years sounds about right.

    This would solve most of our problems - it would create new jobs, reduce our balance of trade deficit, generate new tax income and reduce the volume of welfare payments. It would also stimulate British companies, reduceo our CO2 emissions and increase the demand for skilled workers - the need to slash and burn public services would evaporate and decent jobs with decent pay would absorb the unemployed.

    In parallel to this there should be a new lattice of bilateral and multi lateral trade arrangements, but on the basis of working with comparable economies on a balanced trade agenda, plus a targeted set of specific development trade deals aimed at helping the poorest economies benefit from exporting into the UK and EU.

    The principles are quite simple: if you want access to the UK market, you must either employ British workers yourself, or be part of a trade agreement that recognises that employment is balanced between the parties, where employment in one sector in our economy is balanced by employment in another sector in the other country - and trade from both sectors would balance out.

    The core of the policy should be SUSTAINABILITY - sustainable trade that is in balance, sustainable employment so that our economy and those of our trading partners all live within their means, socially sustainable so that whole generations and communities are not put on the scrapheap but that everyone who can contributes by working in productive jobs and finally environmentally sustainable in our use of renewable energy, reducing carbon emissions and recycling.

    We should start the ball rolling within the EU, which already has a framework in place for European regional development, whilst beginning the process of a Nation Summit on Trade & Industry to identify the sectors that will be targeted for onshoring and investment.

    In walking away from the libertarian delusion of "free" trade, we will be able not only to keep UK PLC working in a sustainable way, but we will also be able to focus our investment in poorer countries directly.

    I really question the sense or logic in forcing millions of chinese people off their land and away from self-sufficiency agriculture, into dangerous, explotative factories being paid barely above slave wages, working excessive hours and generating huge quantities of CO2 from their use of fossil fuels.

    It's a delusion that that huge population could possibly have western lifestyles - there isn't enough fuel, food or the scope to increase CO2 emissions to do this - better to face reality and stop the current unsustainable trade abuse by turning off the import tap now before it runs dry anyway - then the Chinese people can re-evaluate the direction their society is travelling in and shift the focus of development policy back towards making agriculture more efficient.

    Meanwhile we should be levelling down our fossil fuel, raw material consumption and food imports towards that of the less developed countries - we can do this through ramping up renewables, recycling and directing food production away from using imported grain.

    I'm advocating the cause of sustainability - and I do not accept that the global consumer society is environmentally or economically sustainable - WE MUST ALL CHANGE - not just the Chinese - any other strategy (to paraphrase) leads towards "diplomacy by other means" - better known as war.

    It was the trade squeeze on the Japanese and lack pf access to oil and raw materials which in the end drove them to war with the Americans - China is a hell of a lot bigger than Japan - but it still has an undemocratic, authoritarian government - if all they see is a Western attempt to dump the recession on their country, they will react badly - if they see it as part of an attempt to resolve one of the core contradictions in global capitalism, they may be prepared to negotiate.

  • Comment number 8.

    china is never going to let us compete with them and watch the trade cash return this way.
    If we have new innovation then they have a massive network of spies to steal the process and start using it themselves. If it has patent or copyright so what they ignore that. If their workers have no human rights and they dump industrial sludge into rivers so what.

    china is creating imbalance in the world economy and seek to perpetuate their anti law anti humanity strategy.

    unlike the previous ones this is one war we should stand shoulder to shoulder with the usa because it poses a real risk to the uk.

  • Comment number 9.

    It must be over two years since I recommended gold and diamonds as the hedge during the initial phase of the credit crunch and I must say even I'm surprised that its still the case now!

    The Fed is now stuffed full of garbage from the first 'rescue mission' for the banks, but even now its planning more (soon to be joined by the UK) money printing on a colossal scale.

    The equity rally followed the path of the QE programme almost precisely, as did modest rises in UK property prices. Both rallies stalled when QE paused. So this is the new orthodoxy: when property prices stall, pump new money into the economy = the property bubble must be sustained at all costs. This can only lead to stagflation, and creditor nations are correct in suspecting 'the west' is trying inflate away debt and debase its currencies to 'rescue' its collapsing economies.

    Social unrest is certain, whether supine electorates in the US and UK can raise the will to resist is questionable, but populations in Europe and elsewhere almost certainly will. More 'world police' opertaions by the US military will be required, whist at the same time becoming less and less affordable. This is not going to end well.

  • Comment number 10.

    The Telegraph's Ambrose Evans-Pritchard wrote a spectacular column on the subject of QE2 and currency wars; the title is "Currency wars are necessary if all else fails." His 6th, 12th, and 13th paragraphs are true gems.

    My response is on my blog titled "Currency wars, QE2, and cruises to the promised land."

    I would provide URLs, but the moderators often delete them.

  • Comment number 11.

    It seems to me that the State needs to take over the banks and then get them to lend to private businesses etc. It will be capitalism working within a socialist system. When or if the economy gets better again sell them off. Crazy idea I know, but it seems more viable than QE2, and probably a damn sight cheaper. We're all doomed anyway.

  • Comment number 12.

    If the US does decide to bite the bullet and comes down hard on Chinese imports, then I am in no doubt that the UK and EU will be forced to take sides and move to protect their own industries too, as the world's trading system brings down the shutters on globalisation.

    If this happens we will be in the position of having a libertarian government faced with implementing an anti-libertarian programme of trade tarrifs, intervention in the economy and a massive expansion in the role of the state in industry and trade - it will fly in the face of their core values, their beliefs and everything the Tories have built up since the rise of Margaret Thatcher.

    It will also severely curtail the ability of the City to operate overseas, which will further weaken the power of the financial services industry through the Tory Party.

    Given the nature of the Government frontbench, I think they'd rather be in opposition than be forced to destroy virtually everything they believe in - and as recent remarks by Chris Huhne revealed, there is quite a wobble going on about the risks of a deep double dip recession being caused by the scale and speed of the spending cuts, so if a trade war does kick off, I think we can see the ConDems left pretty rudderless, unable to cut the public sector, unable to bring themselves to join the protectionist bandwagon and the tensions in the coalition reaching breaking point quite quickly.

  • Comment number 13.

    To continue on a theme: IF our state assets (Public Sector capital) is being stripped in order to bail-out Private Sector banks which have been profligately funding over leveraged/geared Private Sector (read corporate debts) some of which were PFI projects (note the equivocation/subterfuge in use of terms like 'private', 'we' 'our' when the reference has been debt in recent times).......... with all those Pubic Sector assets going off the public accounts ledger, just what securities will liberal-democratic libertarian non governing 'governments' have as security for their currencies and bonds?

    Does anyone see a possible mega sleight of hand being played by clever international financial privateers, and has everyone noticed how the new pejorative term is 'Nationalist'? ;-(


    "7. At 1:59pm on 11 Oct 2010, richard bunning wrote:
    We know that the current situation is untenable - if China et al insist on operating a rigged market, they cannot expect the rest of us to remain supine and simply allow our manufacturing industry to die and our debts to go on rising until we have a junk bond credit rating, so we can no longer afford their products anyway."

    "Operating a rigged market" - classic. The PRC is a Democratic Centralist Planned Economy.

    http://english.peopledaily.com.cn/200510/19/eng20051019_215257.html

    You need to stop posting and go back to your core assumptions, as you have a naive (young person's) world-view which is radically false. This makes most of what you write here not worth reading as it's based on false assumptions (from which the rest of what you write flows) which have been conditioned by Libertarians i.e it's Libertarian spin/propaganda. China is a Stalinist nation - take that on board. They have over a billion people, and their mean IQ is at least five points higher than ours in the West. Work out how many smart engineers etc that mean they have relative to us (you'll need to understand some basic maths of the Normal Distribution). They don't have to do anything other than keep managing their population and theirs Planned Economy. The rest of the world, to the extent that they are Libertarian (anarchists) are to be changed for their own good or allowed to wither away. See Liberal-Democracies' birth rates, most obviously showing up in a) the shift to the aged predicted back in 1930s with the pension problems, and b) high compensatory immigration which has just served to make matters worse (the later policy rested on naive Lysenkoism as pointed out to LC2 elsewhere). You really do need to take this on board if you don't just want to just keep posting Libertarian propaganda (and it doesn't matter if you know or think you are doing that or not, in fact those who peddle it best do so because 'they know not what they do').

  • Comment number 14.

    9. At 2:42pm on 11 Oct 2010, TheNewPonzi wrote:

    " This is not going to end well. "

    For whom.....? That's what you left out...the for whom. Did you forget?.

    It could end well if we elected an Old Labour Party (as we did after
    WWII) which is precisely what China now has. But most people today have little recollection of that, and if they do, they think of it as PR painted it in the 60 through 80s. Under Blair etc, it was well, just a travesty, not a Labour Party at all - but as most of the electorate is now too stupid to notice, what can one do? As far as they are concerned, if someone markets salmon eggs as caviar, it's caviar.
    Discrimination is now politically incorrect (aka bad for business).

  • Comment number 15.

    The financial world’s top guns at the IMF closed out three days of talks yesterday, but they didn't reach an agreement on how to stop the LOOMING currency war, and this war is LOOMING!
    The International Monetary Fund steering committee has been trying to steer key economies to consensus, but the best it could do was come up with: the organization should continue its study.
    The IMF Panel Statement: “While the international monetary system has proved resilient, tensions and vulnerabilities remain as a result of widening global imbalances, continued volatile capital flows, exchange rate movements and issues related to the supply and accumulation of official reserves.” Yep, couldn’t have said it better myself.
    The IMF Panel Statement failed to call for any specific action on China's part or the part of any other country to change policies of using a low currency and accumulation of reserves to boost exports. This likely made China politely ecstatic.
    Committee Chair, Youssef Boutros-Ghali understated: “There are frictions, obviously. These are being addressed. We have come to the conclusion that the IMF is the place to deal with these issues.”
    I don’t think the IMF is the place to deal with these issues – too much American biased (normally) and much too much “You have to change this, this and this before we will give you one dime.”, which (normally) means sacrifice your social programs and become greedy capitalists.
    IMF Managing Director, Dominique Strauss-Kahn (asked about the lack of a stronger statement) answered: “There is only one obstacle, and that is an agreement of the members.” Now how logical is that!
    Meanwhile US Treasury Secretary, Timothy Geithner said the IMF: “must strengthen its surveillance of exchange rate policies and reserve accumulation practices.” He added: “excess reserve accumulation on a global scale is leading to serious distortions in the international monetary and financial system.” I wonder which country Geithner could be referring to? Recent IMF figures showed Beijing has currency reserves of @ 2.5 trillion dollars, the largest in the world and nearly 30% of the global total, to say nothing of holding the bulk of American debt in the form of bonds.
    This lack of assertion from the IMF seems a setback for the United States.
    Meanwhile, European Central Bank chief Jean-Claude Trichet was seeing optimism. He said: “I have full confidence that the international community will find the appropriate ways to cooperate.” Mr. Trichet also said participants understood “we have a shared responsibility” to avoid excessive exchange rate volatility or imbalances."

    Well, well, well…I wonder what will happen next, when the G-20 gets to FTT and FAT. Can’t wait! It's about time...

  • Comment number 16.

    There can be no recovery.

    This is not a scientific comment, but from what I have read of the current situation and supposedly historical precedents the whole art of economics is more like religion than science with a few competing denominations in the mainstream and a few wacky outsider cults. The QE providers do not even seem to be able to tell us what it is really meant to achieve.

    Just a gut feeling that recovery will not happen in the economy as we understand it at present. Globalisation can only mean an averaging out of what people perceive as their wealth. Many developing countries have always had large disparities of this wealth with extremely poor peasant classes and super rich landowners and industrialists. The USA, for example, has a smaller imbalance of wealth but it is still wide and quite possibly currently wider than for some time. The natural conclusion of globalisation is the averaging out of developed and developing countries wealth. If this happens on a per capita basis then huge amounts of growth are needed in order to prevent a situation where workers worldwide all end up far nearer an Indian or Chinese workers current standard of living than that currently enjoyed in the west. The super wealthy will remain so, or be replaced by new super wealthy.

    Due to this I do not believe that sustained recovery as we would like to define it is possible. If globalisation comes to an end then recovery will still not appear as so much is entwined in a worldwide model that there would be huge upheavel with long lasting consequences.

  • Comment number 17.

    At the risk at sounding like a broken record, the only way out of this economic crisis for the West is a new Cold War. QE will become a currency war, will become a trade war and will, in time, will inevitably become a Cold War.

    It is going to happen so there is no point in beating around the bush for the next decade hoping and pretending that current measures will somehow save the West from its current global decline.

    Back in the real World.

    I just watched a superb report on the UK housing bubble resulting from buy-to-let, liar loans and a Labour, supposedly Socialist, Government policy which appeared to encourage a doubling of house prices in 10 years at the cost of the young & prudent being priced out of housing for a generation. It was on Channel 4 News.

    Sucn an analysis of the housing market is in sharp contrast to much of the BBC's News output which strangely, some might argue, sometimes sounds like the propaganda arm of the UK estate agency industry.

    Wouldn't it be fantastic for this country if we could deflate our currency to nothing so that vast numbers of Chinese could come here and buy up all our houses!

    If that happened it would solve all the worries of the BOE and estate agents overnight! I can see it now - British estate agent wins Nobel Peace Prize!

  • Comment number 18.

    Tawse wrote:

    'Wouldn't it be fantastic for this country if we could deflate our currency to nothing so that vast numbers of Chinese could come here and buy up all our houses!

    If that happened it would solve all the worries of the BOE and estate agents overnight! I can see it now - British estate agent wins Nobel Peace Prize!'

    ------------------------

    Many a word has been said in jest!

    However, what would you prefer...a socialist like landlord...oder...a Rachman like landlord.

    http://en.wikipedia.org/wiki/Peter_Rachman

    The choice 'might' be yours!

  • Comment number 19.

    DebtJuggler

    I personally think that the property bubble started, encouraged and aided during the Labour years to be disgusting.

    Disgusting in how it has turned homes into assets to be accumulated and speculated upon. Disgusting in how the greedy 'got lucky' and have now driven vast numbers of the UK population to either live with enormous mortgage debt or to live in rented accomodation... or to be dependent upon soon to be vastly cut-back housing benefits.

    The fact that all this happened under a supposedly Socialist Government disgusts me even more.

    My disgust does not end there either.

    I think the way in which the British populance have been enslaved by unbridled Capitalism during those Labour Government years to be immoral - I try to refrain from describing such things as 'immoral' as it is more correct to use it in the child that has no food, in the human being who has no rights - but, increasingly, I look at the past 10 years of the Labour Government as an immoral betrayer of large swathes of the British people.

    Instead of protecting the jobs and rights of British workers - you twist everything with a perverse sense of political correctness, change the rules, get into bed with big business and outsource those jobs to the Third World. When that is not enough you allow inter-company transfers to bring in hundreds of thousands of workers to replace the British workers in their own country.

    Then you have currency devaluation and a tax regime that is not punitive upon foreign so-called investors which allows them to specualate on and gobble up houses as ways of increasing their wealth. All this does is deny the local populance of what most people simply want - a home. The UK is for sale and the British people gain no profit from it.

    You mention Rachman - ha, Rachman has nothing on todays modern politicians, property barons and speculators - they are all in it for themselves in my personal opinion. In many other countries, in this country in other times, most of them would have been locked up for good, or worse, by now.

    Thankfully for them a non-stop diet of bland, reality TV has brain-washed a once great people into a nation of clinically-obese, junk-food eating credit junkies who are more concerned about Cherly Cole and who will win 'The X-Factor' and 'Strictly Come Dancing' than anything boring such as... I am ranting... You get my point.

    I am disgusted.

  • Comment number 20.

    Disgusted @19

    I feel your pain. But what were Labour to do? It is what the Great British public wanted and they got what they deserved: unsustainable house prices and plebs on tv.

  • Comment number 21.

    #19 tawse57

    You addressed your post #19 to my previous post.

    You cleverly started off your post #19 by not ascribing any accusatorial blame to any specific person.

    But then half way through your post you began to use the accusatorial blame of 'you' in the following sentances.

    I have seen this tactic used before, many years ago by an east coast North American who attacked a very respectful German (and colleague of mine and) company in a highly pressurised meeting (it all happened in a very high cost manufacturing environ i.e. 100's of millions £'s worth of business).

    The American began by using highly innappropriate language at the start of the meeting: verbatim 'Schnell, schnell, we have a meeting to conduct' fully aware that we were representing a German company.

    He then continued to use the word 'schnell', disrespectfully, many times thereafterwards.

    The east coast American then continued, throughout the meeting, to deliberately confuse the 'potential' blame (considered mortal in the context of the subject) between his company and my company, with regard to the subject being discussed i.e. the meaning of 'you' was deliberately obfuscated throughout the meeting.

    It was all pretended to be hypothetical, but real in the sense of outcomes.

    This was a lesson in inuedo that I learnt early and fast!

    The guy was a real 'showman'....and one I'll never forgot!




  • Comment number 22.

    "20. At 10:28pm on 11 Oct 2010, dceilar wrote:
    Disgusted @19

    I feel your pain. But what were Labour to do? It is what the Great British public wanted and they got what they deserved: unsustainable house prices and plebs on tv."

    If your kids wanted sex, drugs and arteriosclerotic vascular disease inducing feeding 24/7 would you give it to them because they wanted it?

    If large parts of the population demonstrably have the cognitive capacity of children, why serve them the same way? Just because they're over the chronological age of 16/18?

    Government used to mean governance. Butler was being urbane tonight. The government is run by the Civil Service/Public Sector - and without that there is no governance. Let that sink in. Paxman doesn't seem to understand how governance works. How it must work. What its absence is - anarchism.

    tawse57 still hasn't gone away and put together the full picture, have you?

  • Comment number 23.

    "Such an analysis of the housing market is in sharp contrast to much of the BBC's News output which strangely, some might argue, sometimes sounds like the propaganda arm of the UK estate agency industry."

    tawse57 - that's because the BBC TV output is rubbish. IMHO channel 4 news is the only tv news worth watching. I gave up on newsnight a while back thanks to paxman. Faisal Islam is good, but they screwed his blog feed :-(

    I like Paul Mason but why is their economics editor covering hillbillies and their tea parties? The BBC is obsessed with American trivia. There are better stories in America but we want the story, not the detail.

    BBC news, tv and radio, always have Halifax and Council for Mortgage Lenders on like they are somehow impartial. Take solace in the fact that reality will usurp any incorrect coverage. The drop last month and the stories today are tipping the balance. No doubt soon it will tip from exuberance to panic, as news knows no middle ground.

    BBC employees will have to accept it when interest rates go up and I buy one of their houses in Muswell Hill for 30% less than they paid for it :-)

  • Comment number 24.

    13. tabblenabble01:

    Expressing your own view is fine - commenting on other peoples' views is fine - but IMHO you cross the line in making personal remarks that seem to reveal a deep personal insecurity about yourself, so you insult and patronise people instead of making objective observations.

    I am probably old enough to be your father, I knew Tony Blair quite well in his early days and was involved at a senior level in the London Labour Party in the 1980s, I covered the Thatcher government for most major UK broadcasters and the rise of the New Right in the USA. I predicted the credit crisis a full five years before it happened and worked on a documentary in Afghanistan in the 1980s arguing that arming and training islamic fundamentalists would lead to them attacking us once they'd finished with the Soviets - plus ca change.

    So please stop insulting me and others - desist in this infantile posturing - I fully understand the nature of the Chinese Government - I worked behind the Iron Curtain before the collapse of the Soviets and my knowledge of statistics is to post-graduate level.

    Given the lack of independently validated IQ tests in the Chinese population, how many standard deviations from the mean value do you feel your research indicates and therefore what confidence limits apply to your assertions about the relative IQ distributions between the two populations you commented on?

    Did you apply a single or two tail test to assess your assertion of a significance in the differences of the data?

    You can make statistics say anthing, if you try hard enough.

  • Comment number 25.

    DebtJuggler

    I was not referring to you in that post.

    If you wish to take it that way there is nothing I can do about it.

    I think it is pretty obvious what I meant by my use of the word 'you'. Well, I think it is.

    I am going to go away now and write a Hollywood blockbuster script about a protaganist who must battle to save blogging for the World when someone steals the word 'you' from the Internet. Without the 'you' the entire Internet will grind to a halt within, um, minutes.

    He will, naturally, have a kick-ass female assistant with a body that looks great in tight fitting lycra.

    Have a great day.

  • Comment number 26.

    24. At 08:29am on 12 Oct 2010, richard bunning wrote:
    13. tabblenabble01:

    I've excluded the non sequiturs and ad hominems as these just add further weight to my original assessment. You need to go away and read what I have written (see also Debtjuggler) and try to take some of it in. To date you clearly haven't.

    "I knew Tony Blair quite well in his early days and was involved at a senior level in the London Labour Party in the 1980s"

    Whether you knew Blair or not is only evidence of more narcissism in this context, and New Labour was not Labour. It was Libertarian. Labour hasn't been operative in this country for decades judged by outcome (which is all that matters in politics)

    "I covered the Thatcher government for most major UK broadcasters and the rise of the New Right in the USA. I predicted the credit crisis a full five years before it happened and worked on a documentary in Afghanistan in the 1980s arguing that arming and training islamic fundamentalists would lead to them attacking us once they'd finished with the Soviets - plus ca change."

    But this is more grandiosity. This is exactly what 'posturing' means.
    Associating oneself personally with something with power does not give one authority. It's just an example of the other side of the ad hominem fallacy. This is a sign of irrationality, here, grandiosity. It is not insulting to point this out either, it is just descriptive and educational. It may not be received well, but that does not make it offensive or unkind.

    "So please stop insulting me and others - desist in this infantile posturing"

    This is precisely how narcissistic people behave. They treat any exposure of their grandiosity as an insult. Let this be a helpful lesson and I mean this kindly - sadly, all the evidence suggests it rarely works, as this problem is incorrigible because of how criticism is received by narcissists. They make out that all flaws, all challenges to how they behave, is an attack. Think education. How can efforts to educate be an attack. How can learning be an insult (see this in schools and universities , jibs etc, and you'll see narcissists, they are more common than many think, and find their ways into lofty positions more through charisma and superficial charm more than genuine ability).

    Here and elsewhere I've pointed out how your posts are grandiose and deluded. That is an accurate description of your above post which is all about you is it not? None of what you wrote lends credibility to what you have posted elsewhere, it just tries to give it authority.

    "I fully understand the nature of the Chinese Government - I worked behind the Iron Curtain before the collapse of the Soviets and my knowledge of statistics is to post-graduate level."

    This is more of the same. Do you not see that? What you write in this context below shows that you factually do not know anything about this area at all.

    "Given the lack of independently validated IQ tests in the Chinese population,"

    Not true as you would have found out if you just looked it up. What I said was based on a) Chinese standardisations of the WAIS in China and
    b) UK and USA SATs, NAEP data, and in the UK CAT and SATs. In the CATs the results are at every cohort of 560,000 (i.e key Stage 1 through 4) for the past decade at least. It's population level data. Dig out last year's review paper by Rushton and Jensen for more.

    "how many standard deviations from the mean value do you feel your research indicates and therefore what confidence limits apply to your assertions about the relative IQ distributions between the two populations you commented on?"

    I didn't say it was my research (it could be, but that is irrelevant).
    You a) clearly don't know what a standardisation is from that remark (standardisations have to be statistically representative of the parent population to establish norms) and b) you clearly don't know what the performance of East Asian students is in both the US and UK education systems, or East Asians in general like the Koreans, Japanese or HK Chinese in international tests such as PISA and TIMMS.

    You are making all sorts of assumptions which are at odds with what's well established. This is also very clear in many of your other posts on the economy. My concern has been to point out to others (as well as yourself) that your grandiosity may well mislead, not just others, but yourself too.

    "Did you apply a single or two tail test to assess your assertion of a significance in the differences of the data?"

    That's Irrelevant. Literally. Inferential statistics are not the issue here, they are descriptive statistics. You clearly don't understand psychometrics and I suggest your arrogance on this point should make others seriously question what you have been posting here on other matters for the same reason.

    Note: this is not me being rude or insulting to you. I am in fact being helpful. Believe it or not, I write about what is the case out in the world regardless of my own position in it all. Anyone can check this by going to look at the evidence for themselves. I suggest you try to do this. This is how to be objective and impersonal........ How to be rational.

  • Comment number 27.

    26. At 11:47am on 12 Oct 2010, tabblenabble01
    ...this is not me being rude or insulting to you. I am in fact being helpful. Believe it or not, I write about what is the case out in the world regardless of my own position in it all. Anyone can check this by going to look at the evidence for themselves. I suggest you try to do this. This is how to be objective and impersonal........ How to be rational.
    ----------------------------------------------------

    I imagine that you and your protagonists (I call them that as you need each others support for your blogging ping-pong) manage to have a bundle of laughs in the real world of social interaction!

    Two aspects of pomposity lead to many laughs.

  • Comment number 28.

    27. At 12:02pm on 12 Oct 2010, Kit Green wrote:

    "I imagine that you and your protagonists (I call them that as you need each others support for your blogging ping-pong) manage to have a bundle of laughs in the real world of social interaction! "

    Your imagination is not to be trusted, it's a poor guide to rationality.
    See Paul's next blog. If you look more carefully into what's being referred to you'll see that it's no laughing matter. The difficulty is one of getting more people to see past the personal and to what is actually going on. It isn't about personalities, except when these get in the way of understanding what's going on.

    Watch the video below at least, and then look back through the BBC blogs over the past three or four years to see what's being referred to. The key is demographics and how these are managed (follow up the series to see the scope and scale of this). That's politics. Much that is discussed as politics today is just theatrics.

    http://www.ets.org/perfect_storm

  • Comment number 29.

    I THINK THEREFORE I AM (#24 - #28 inclusive)

    Doh!

  • Comment number 30.

  • Comment number 31.

    7. At 1:59pm on 11 Oct 2010, richard bunning wrote:

    Richard in comment No7 wrote along with very many others in this blog about what we perhaps should be doing and some about what our current and previous Governments haven't and wont do....
    In what was a policy-lite general election whilst we all focused on how Nick, David and Gordon LOOKED on the TELLY, and voted like X-Factor for the prettiest we missed the fact that the only balanced political manifesto which attempted to address the issues raised in this blog was the manifesto from UK Independence Party - UKIP.

    UKIP did address these issues at both a financial and economic level and at an industrial and manufacturing level.

    Perhaps if the media read a bit more and reported more accurately we would have had a different election out come. You can still read them at www.ukip.org

    Its time Britain started to manufacture our own goods and for us to actually buy them. Its time our own strategic utility companies and infrastructure companies procured from our own engineering base and that the UK Government took a strategic view on ownership of such businesses and reviewed the take over criteria in line with 'NATIONAL INTERESTS'

    There is always next time, if we have any economy left by then by then.

 

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