Thursday, May 15, 2014

Rising Resource Costs Escalate Odds Of Global Unrest






Why people in country A are ready to revolt, while those in country B are not, is worth exploring; especially for those considering moving to another country. If you plan to re-locate to a "better" society, you really need to make sure you fully understand the community and culture you'll be placing yourself into -- and whether its benefits are indeed extended to new-coming 'outsiders' such as yourself.


If you were going to try and understand why revolts happen, but wanted to limit yourself to a single variable, you’ll be hard-pressed to find something better than the price of food.
There's quite a bit of research to support the idea that people who spend above a certain percent of their income on food are more likely to protest, riot, or otherwise become restive. That number seems to have a minimum threshold of 40% of income to food costs, give or take:

Since the beginning of 2014, riots have occurred in countries including Thailand and Venezuela. Although they’re different cultures on different continents, these mass protests movements may all have one commonality; increasing food prices may have contributed to their occurrence. The cost of food has been steadily increasing in both Thailand and Venezuela; last month demonstrators in Caracas took to the streets marching with empty pots to protest food shortages. According to Dr. Yaneer Bar-Yam and fellow researchers at the New England Complex Systems Institute (NECSI), events such as these may be anticipated by a mathematical model that examines rising food costs.
The events of 2014 aren’t without precedent; the price of food has provoked (and placated) throughout history, beginning in Imperial Rome when Augustus introduced grain subsidies. In recent years, the Middle East has been particularly affected by the cost of grain. Centuries after Egypt developed bread as we recognize it, the nation experienced a bread intifada – the country rioted for two days in January 1977 following Anwar Sadat’s decision to drastically decrease food subsidies. More recently, under the rule of Hosni Mubarak, the price of grain rose 30 percent between 2010 and 2011. Then, on January 25, 2011 a new revolution began in Egypt.
While the study used data through 2011, so much has happened since that I strongly expect the results are even stronger now. To wit, if we were to update the above chart we'd have to add Thailand, Argentina, Ukraine, Greece and Venezuela to the list.
It’s delightfully intuitive that food prices and people’s sense of contentment are tightly linked. Where the various meddlers in the Ukrainian situation were able to obtain quite large reactions from relatively simple efforts, it might be nearly impossible to incite a similar reaction in Switzerland, even with 50x more provocation and propaganda.
This conforms to my views on terrorism which I see as a very rare occurrence that results when a group feels they have literally zero other options left. Usually what governments call terrorism is not even that; rather, it's the type highly asymmetrical warfare that one gets when a vastly weaker party believes it has to react to a stronger foe.  That is, it's a tactic not a genetic defect or cultural ideology.
The main connection between these points on social unrest and terrorism is that people are generally very slow to react, and will only resort to unrest and violence if they already have their backs against a wall. A very effective wall is the lack of access to affordable food.
But there are others. From the same article as linked above:
Of course, man cannot riot off bread alone; factors such as unemployment, oppression, economic instability and corruption also contribute. Still, there is something so fundamental about food, and the implications of not having it, that makes people react. As Bar-Yam explains,“The analysis suggests the doubling of food prices we have seen since 2005 pushed many in the greatest poverty across the line from bare subsistence into desperation and starvation. When people are not able to feed their families, they have little to lose and become willing to take strong actions.”



Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world.
- Henry Kissinger


There are numerous research studies showing that rising food prices are highly correlated with oil. Analysis reveals that the price of oil influences the price of food but that, in reverse, the price of food does not influence the price of oil. That is, there’s more than correlation, there’s causation -- with oil driving the price of food over the long haul. Specifically, the price of corn, soybeans and wheat, with rice not showing much of an effect possibly because so much of it is planted and harvested with muscle-power vs. oil.


It seems quite likely that food prices will only continue to rise from here for a number of reasons, high oil prices being just one. There’s also increasingly chaotic weather impinging on harvests, which seem to be a part of our new normal. Already driving the price of food is a fair degree of speculation on the possibility of the emergence of El Nino in the Pacific later this year (2014); previous similar weather patterns have proven to be especially damaging to global grain harvests.


Perhaps droughts have always been a staple in the global climate tool kit but when you combine drought with high population densities, ruined soils, and generally dim economic prospects they can be quite destabilizing as has proven true across the Middle East - North African belt.


Dwindling resources produce the least admirable human behaviors, something science has tested and understands quite well. Ukraine is a bellwether; we will see other conflicts like it elsewhere in the world, and likely, in time, within our own nation. Which is why understanding the nature of social unrest is so important, particularly to those considering relocation (within or outside of their home country). You certainly don't want to leap from the frying pan into the fire as resource scarcity and conflicts are now part of the global equation.










While government statisticians claim robust growth, recent data points suggest otherwise. Consumers are quickly running out of money, home sales have collapsed and hit their biggest drop in three years, there are more Americans out of the labor force than ever before, and one third of adults under the age of 35 are living with their parents because they can no longer afford to pay their own mortgage.


By all accounts, the reality is that we are now factually in a recession, a point further emphasized by the recent revelation that American companies are experiencing near zero percent earnings growth.
But that’s just the beginning. As we warned earlier this year, food prices would see a steady rise through 2014 because of increased global demand, drought and continued degradation of the U.S. dollar.


The Producer Price Index made available by the Bureau of Labor and Statistics this morning has now confirmed those fears. Consumers are seeing an immediate impact to their wallets in the form of food price inflation and in all likelihood the trend will continue going forward.
These latest numbers are serious. So much so that according to Zero Hedge, “the last time food prices spiked by this much in one month, the resulting Arab Spring wave of revolutions tumbled governments across north Africa and the middle east.”

The trend over the last several months shows a clear and sustained rise in prices for food, something that nearly 50 millions are already struggling to acquire, even with assistance from the government. Now their food stamps buy even less. And if people are spending more on food, it means they’ll be spending less in other sectors of the economy.
Karl Denninger at The Market Ticker warns that this is bad news because consumers are now paying 7.4% more for food on an annual basis than they were last year, a scenario which could lead to macro-economic repercussions by Fall.


Within the next couple of months we’re going to have a very good idea of where this is all headed. If prices don’t turn down, then by Fall we’re going to have a big problem:
There is no ability in the economy to absorb such price increases as productivity and unit labor cost figures have shown.  Instead, what this will produce is recession – deep recession.










While many Americans understand why the NSA is conducting mass surveillance of U.S. citizens, some are still confused about what’s really going on.
In his new book, No Place to Hide, Glenn Greenwald writes:

The perception that invasive surveillance is confined only to a marginalised and deserving group of those “doing wrong” – the bad people – ensures that the majority acquiesces to the abuse of power or even cheers it on. But that view radically misunderstands what goals drive all institutions of authority. “Doing something wrong” in the eyes of such institutions encompasses far more than illegal acts, violent behaviour and terrorist plots. It typically extends to meaningful dissent and any genuine challenge. It is the nature of authority to equate dissent with wrongdoing, or at least with a threat.

Those revelations led to the creation of the Senate Church Committee, which concluded: “[Over the course of 15 years] the bureau conducted a sophisticated vigilate operation aimed squarely at preventing the exercise of first amendment rights of speech and association, on the theory that preventing the growth of dangerous groups and the propagation of dangerous ideas would protect the national security and deter violence.”


The opportunity those in power have to characterise political opponents as “national security threats” or even “terrorists” has repeatedly proven irresistible. In the past decade, the government, in an echo of Hoover’s FBI, has formally so designatedenvironmental activists, broad swaths of anti-government rightwing groups, anti-war activists, and associations organised around Palestinian rights. Some individuals within those broad categories may deserve the designation, but undoubtedly most do not, guilty only of holding opposing political views. Yet such groups are routinely targeted for surveillance by the NSA and its partners.
One document from the Snowden files, dated 3 October 2012, chillingly underscores the point. It revealed that the agency has been monitoring the online activities of individuals it believes express “radical” ideas and who have a “radicalising” influence on others.

People are aware of J. Edgar Hoover’s abuses. The nature of that series of events is that the United States government looks at people who oppose what they do as being, quote-unquote, “threats.” That’s the nature of power, is to regard anybody who’s a threat to your power as a broad national security threat.








Armageddon is a step closer to reality. USA today has a report that should disturb anyone concerned about the mad mullahs of Tehran getting their hands on nuclear weapons.  Their avowed goal is Armageddon, that could usher in the 12th Mahdi.


U.S. diplomats met Wednesday in Vienna with Iran and other world powers to begin writing the text of a final deal. Though the sides remain far apart on several issues, the Obama administration may allow an Iranian nuclear program that retains the capabilities to produce a weapon.

“Significantly reduce” is a weasel word phrase meant to create a favorable impression without committing to anything meaningful.  President Obama clearly wants a deal, something that would allow him to pose as a peace-maker with a significant diplomatic accomplishment under his belt. And the timing, with mid-term elections in November, is suspicious, hence the rush to a deal.

It is hard to say what will be regarded as the most historic disaster of the Obama presidency. The competitors are numerous, from wrecking the health insurance system of the country, to emboldening Russia and China to become aggressive, to keeping the economy from growing in a “recovery” that has no growth, todriving millions out of the labor force.
But in the end, permitting Iran to acquire nuclear weapons could be The Big One, because the mullahs will use them. Mutual Assured Destructiuon will not deter them; it is their goal.







Supplying gas to China is a logical move for Russia, given Chinese demand and the country's willingness to pay a fair price, Gazprom advisor Marcel Kramer said Wednesday.
“The Chinese are making an important step of getting more natural gas in their energy mix,” said Kramer, an advisor to Gazprom’s management on the South Stream pipeline and European affairs.
“It is wise from a Russian point of view to work on diversifying its markets and on supplying those people who want to get the supply and are willing to pay a fair price for it,” Kramer said during a conference on EU-Russian energy cooperation in Brussels.
He added that the move is a signal for the EU, amid considerable uncertainty about whether US natural gas will actually be supplied to Europe.

Preparations are underway for the visit of Russian President Vladimir Putin to Shanghai next week to cement economic ties with China, including on energy. During the visit, Russia and China could agree on long-term gas supplies and increasing oil supplies.
The current standoff between Russia and the EU over tensions in Ukraine is likely to give an impetus to Moscow’s long-awaited deal on exporting up to 60 billion cubic meters of gas per year via the eastern route to China, the largest market for Russian gas in the Asia-Pacific region.







China must guarantee its citizens’ rights to freedom of religious belief and expression, a coalition of lawyers, religious leaders and academics have told Beijing as church demolitions and the arrests of Christians stoke fears of a nationwide “anti-church” campaign.
“Religious freedom is a basic and core value of modern nations and societies,” argued the “Purdue Consensus on Religious Freedom” which was signed by more than 50 people, including some of China’s foremost rights lawyers, underground church leaders and intellectuals.
All Chinese citizens had the responsibility "to respect, to protect, and to fight for” religious freedom, the statement added.
The consensus was published on Wednesday following a three-day summit at Purdue University in the United States where activists and religious leaders discussed their concerns over religious freedom in China.
High on the meeting’s agenda was the demolition of churches in the eastern province of Zhejiang and the recent detentions of Christians in Beijing and Guizhou province in southwest China.

Missionary work is currently illegal in China while Beijing’s State Administration for Religious Affairs tightly controls the construction and administration of places of worship.
The statement comes at a time of growing pessimism over the Communist Party’s handling of religious matters.
Many Christians fear Beijing is planning a nationwide campaign to slow the growth of their community, which now counts tens of millions of members.
Those concerns have been fuelled by the total or partial demolition of at least half a dozen churches in Zhejiang province and a spate of detentions across China. Tan Jianhua and Zhang Yuncheng, two members of Beijing’s Shouwang church, have been in custody since last Sunday on charges of “disturbing public order”, said Jin Tianming, a church leader.





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