Glimpses of the Future

I sometimes watch a program on the educational network called “Mega-structures,” which generally shows how large structures are built.  Two recent programs dealt with potential future mega-structures that will likely have a large impact on our world.

The first is the idea that the motor car will become obsolete and will be replaced by pods.  In cities these pods will be connected to a system of overhead rails that will transport people to where they want to go.  When you get in you give the destination and the pod will take you there, using GPS and its in-built knowledge of the network.  The whole system will be like the pods that pick up and deliver goods in a huge warehouse, as in such companies as Amazon.  The pods are controlled by a computer system that tells the pod what to do, but each pod has sufficient autonomy that it can find the best way to its destination.  If there is an obstacle in its way, like a fallen package, it detects it and goes around it and also tells the central system that it is there so that it ensures other pods know about it.  There are thousands of such systems working successfully in the USA, but most of them have hundreds of pods, even thousands, but not more.  In order to run a huge system like a city-wide transportation system with perhaps hundreds of thousands of pods will require a significant upgrade of the control system.  But, in effect, it is just an expansion of a working system, the basis is already there.

The other idea is that there will be a tunnel between Siberia and Alaska that will mostly transport freight from China and Russia to North America.  The distance is ca. 62 miles, and this would be the longest tunnel in the world.  Much of the tunnel will be made of pre-fabricated steel sections that will be assembled on the ice during the winter and when the ice melts the sections will be sunk to the bottom, and there connected together and then covered over with earth/sand.  This is called a submersible tunnel and is much cheaper to make than drilling, especially thru rock.  Such a tunnel would reduce energy use significantly since it will replace the need to use ships and planes to transport most goods from China and Russia to the whole of the Americas.  There are many other places in the world where submersible tunnels could greatly reduce the time and cost of transporting goods around the world.


The US-China Trade Deal

Perhaps the most important outcome of the recent Buenos Aires G20 Summit was the hour-long meeting between US Pres. Trump and Chinese Premier Xi Jingping that came to a compromise conclusion.  Those who feared an all-out trade war will be disappointed.  The two trade giants agreed on a temporary truce in which Trump agreed not to boost tariffs on bn$200  of Chinese goods from 10% to 25% on January 1 for 90 days and China will buy a “very substantial” amount of US agricultural, industrial and energy products. Meanwhile, Beijing says the two sides agreed to open up their markets and to engage in further negotiations.  

Many had blamed Trump for starting a trade war that could be ruinous for the US and the world.  But, in effect China blinked first.  As Trump pointed out, not only was China cheating on its trade agreements, but they need the US trade more than the US needs theirs, and so in order to save their economy they had to come to terms.  This is precisely what is happening.  China could ill-afford to have these b$200 tariffs slapped on to their goods exported to the US, so they agreed to change their trade practices, that gave them a very unfair advantage contrary to the regulations of the World Trade Organization.  In future China will buy US goods to even the trade balance between the two countries.  This will be a great boost for the US economy and is in fact a great victory for Trump in re-negotiating trade agreements between the US and other countries.  

Over time, previous Presidents have ignored these unfair bilateral trade practices of other countries, either out of fear of causing a trade war or because they genuinely believed that the US should allow its industry and trade to suffer in order to help these less fortunate countries.  As an example of this Trump signed the tripartite US-Canada-Mexico trade deal at the Summit to replace the previous NAFTA, that Trump deemed unfair to the US.  It must have been acceptable to the leaders of Mexico and Canada because they very quickly agreed to the revised deal and signed the agreement at the Summit. 

Another trade partner of the US that has been using unfair one-sided practices is the EU, principally Germany, that for example expected no US tariffs on its cars exported to the US, but retained tariffs on its imports of US cars.  Trump is also pushing for a level playing field here too.  With his initial victory against China, the fear of an international trade war will be greatly reduced and we can expect positive outcomes for world trade.   

The Oil Reversion

Ten years ago the US was a net importer of oil, importing about 70% of its needs, mostly from the Middle East.  Today the US is a net exporter of oil and natural gas, and imports only 30% of its needs.  The reasons for this are, the cost of shale oil extraction in North Dakota has gone down by ca. 50% and the use of fracking has provided huge amounts of oil and natural gas.  The US is poised to become the second largest producer of oil in the world after Russia, and is about to out-produce Saudi Arabia.  What a reversal of fortunes.

So I think we can safely say that the “oil weapon” that was used by the Arabs in the 1970’s to blackmail the West, will never happen again.  The US exports natural gas to Canada and Mexico and by tanker as liquefied natural gas (LNG) to Europe.  Pres. Trump wants to double those exports in order to wean Europe away from dependence on Russia’s oil/gas supplies.  Also, the fact that the US is a net exporter of oil/gas means that the price of a gallon of oil has gone down from its historic highs,and will probably never rise again.  At present there ise more than enough gas/oil in the world to satisfy current needs.  But, everyone is aware that these needs and demands for energy in the form of electricity is always increasing, hence the need to develop efficient clean energy production.

There are six major forms of clean energy being developed and used: 1. Biomass, especially burning trash and agricultural byproducts; 2. Solar, several types including solar batteries (direct energy) and solar mirror farms (indirect); 3. Waves, both coastal waves and deep-sea water movements; 4. Wind, mainly in the form of huge propeller farms; 5. Hydro; from dams and waterfalls; 6. Thermal, mainly from underground heating.  Each of these forms have their niche, such as underground thermal heating is used in Iceland to supply most of their energy needs.  In Holland, there is a lot of offshore wind energy being exploited.  In desert areas, solar is being rapidly expanded, in Spain, Israel and California.  All of these methods are being developed, thus gradually lowering the dependence on oil.  And then there is of course nuclear energy, and in the long-term fusion energy.

All of these alternative energy sources, as well as the current glut of oil on the world’s market, have reduced the financial power of such countries as Saudi Arabia and Iran. And if that is their only money-earning resource, then they have in the long-term to change and plan for a different form of economy.  In Saudia that is one reason why the King-in-waiting Mohammed bin Salman, is already starting to transform and liberalize their society.  They will need to have women in their work force, which means allowing them to drive and to travel unimpeded by the old ways of needing to obtain written permission from their male relatives (and you thought they were making these changes because they have become humanitarians).  The increased involvement of women in society and their increased economic power will hopefully make Islamic societies more humane in the long run.

The US now has the largest amount of oil as a strategic reserve than at any time in the past, and its oil/gas production is increasing all the time.  The price of oil is bound to go down, thus hitting the Middle East oil producers financially and reducing their political bargaining power.  The world is changing, and we should not be afraid to grasp the advantage.


China and Israel

Israeli PM Netanyahu visited China last week, accompanied by a prestigious group of Israeli business leaders and hi-tech experts, and had meetings with Premier Xi Jinping and others.  They are spoke about trade and technology.  China doesn’t have any strategic problem with Israel because Israel is not going to complain about their human rights issues or their island-building in the South China Sea, like the US, the Europeans and Japan would.  

But, what possibly could China and Israel have in common?  China is so huge and has an enormous population, while Israel is so small and has a population that could fit into one of several Chinese cities.  Yet I would submit that there are two things the Jews and the Chinese have in common.  First is an entrepreneurial spirit.  Second is a desire for stability. Even though China is a Communist dictatorship, some might argue that it had to be in order to unify the country and make material progress.  The cost of course for this was tremendous suffering and privation of the masses.  But, hopefully this is past now that China has embraced capitalism and the natural entrepreneurial spirit of the Chinese people is flourishing.  In that respect they can gain a lot from sharing in the amazing technological advances coming out of Israel’s innovative high-tech sector.  For example, milk production has gone up significantly in Vietnam and  China as a result of Israeli hi-tech milk production methods.    

Meanwhile Israeli President Rueven Rivlin was visiting Vietnam, where he attended a show of Israeli military technology.  These visits to Asia are all part of an Israeli effort to forge bilateral ties with countries other than the USA as a result of the antagonistic policies of former President Obama.  These have included Netanyahu’s tour of African countries and recently visits to Singapore and Australia.  Meanwhile the Israeli economy continues to strengthen and the Israeli shekel is one of the strongest currencies in the world.  It is ironical therefore that the current Coalition Government might fall due to a stupid dispute over the Israel Broadcasting Authority.

The Market booms

During the recent election it was forecast that if Hillary Clinton won, the US stock market would first go up and then drop precipitously.  But, if Trump won, it was forecast that the opposite would happen, the market would first drop and then go up significantly.

The reasons given were that Clinton was a known politician and people would have some confidence in her governing, but after her spending on more entitlements increased (as with Obama) then the market would suffer.  But, with Trump, the initial decrease would be due to lack of confidence in his experience in government, yet his pro-market business approach would subsequently lead to a market rise.

Well, Trump, as you know, won, and the predicted has happened.  The market took a one day drop of over 800 points.  But, since then it has been gradually climbing, and as Trump has staffed his appointments with experienced businessmen, such a Treasury Secretary Steven Mnuchen, the market has risen sharply.  In fact, the market has risen to previously unknown heights, with the Dow Jones Index going over 19,000 points for the first time in history, and it is now approaching 20,000.

For anyone invested in the US market (or anywhere else) this is very good news.  Not only is the US market robust, but the US dollar has gained ground and is now stronger than for some time.  This increases the value of the US economy and as Trump promised, will help to make the US great again.  Everything else depends on a strong economy and Trump is fulfilling that pledge even before taking office.


Turning Left

When the left is defeated, what does it do, it turns further left, as if that will help it.  For example, when Labour leader Ed Milliband was defeated by Conservative leader David Cameron in the last general election in the UK, he resigned and the Labour Party chose an even further leftist leader Jeremy Corbyn to replace him.  Corbyn has almost no chance of ever being elected.  Whatever happened to New Labour and the Blair revolution?  And when Corbyn was rejected by the Labour MPs, who know the reality of the situation, what happened?  The Labour Party as a whole re-elected Corbyn.  This is equivalent to self-induced suicide. Corbyn not only has no charisma and no leadership qualities, but is so far to the left that he called Hamas and Hizbollah, two recognized terrorist organizations, his friends. I am not upset by this move, it is so self-defeating that it essentially rules out any Labout Party involvement in government for another political generation.

Similarly in the US.  When Hillary Clinton was unexpectedly defeated, for being an arrogant, unsympathetic, criminal candidate, what happens.  The Democratic National Committee is holding elections for a new Chairman and who is considered the leading candidate, Keith Ellison!  He is one of only two Muslims in Congress and has far-left views and has twice aligned himself with Muslim Brotherhood positions.  Similarly the leader of the left-wing of the Democratic Party Bernie Sanders is now more prominent than ever, mainly because he opposed Hillary and since she lost he can claim that the Dems might have won if he had been selected as their candidate.

In both the US and UK the moves of the left opposition to the far left as a defensive reaction to their losses will only ensure further defeat.  Instead they should be moving towards the center, but they lack the intelligence to do so.  One example of the failure of socialism is Venezuela, that has oil and should be wealthy but is now bankrupt due to the mismanagement by the socialists Chavez and Madura.  Next door is Chile, that has seen a huge GDP improvement of 250% since the overthrow of the socialist Allende. The facts are there, staring everyone in the face, socialism does not work but the free market and competition does.

Modern Slavery

It may surprise many people to learn that there are estimated to be ca. 46 million slaves around the world today, and maybe many more.  Yes, not only does slavery still exist hundreds of years after it was declared illegal, but it is growing and the cost of a slave has plummeted.  That is because of world over-population and economic competition and the needs of modern industry for ever more production, sometimes for products that are restricted to remote locations and environments, where there is limited access and no supervision.

I happened to watch Steven Spielberg’s movie “Lincoln” recently, in which he recognized the need to abolish slavery before the US could really enter the modern world.  It is a dark and serious subject and treated appropriately, with an exceptional performance by Daniel Day-Lewis.  Yet that slavery was the institutionalized slavery of Black Americans.  The current slavery is quite different.

This article is partly based on a documentary entitled “Invisible Hands” that appeared on the Deutsche Welle network.  Wikipedia has a Global Slavery Index ( ) that lists the estimated number of slaves in each country.  By far the largest population of slaves is in India, over 14 million, although it is a small percentage of the total population (1.2%).  Most African countries have a residual number of slaves, and even the USA is listed as having 60,000 slaves and even Israel at 6,500. Most of these are illegal immigrants who have no means to obtain legal protection.  Their documents are taken from them by criminals and they are forced to work under threat of violence and/or death as sexual workers or in menial tasks.

The largest kind of slavery problems occur in West Africa, mostly in mining and agriculture.  For example, much of the chocolate that we eat is produced from plantations in West Africa that use illegal child slaves, often sold by their poverty-stricken families, and forced to cut cocoa beans for years without pay.  A French reporter who was investigating this situation a few years ago disappeared without trace.  A German reporter has recently produced a film entitled “The Dark Side of Chocolate,” that documents this slavery situation.  The sad fact is that the major chocolate companies signed an agreement several years ago to stop using slavery in the collection of chocolate, but they have obviously not kept their pledge.

Another place where there is terrible slave labour conditions is in the mining of tantalum, a rare metal that occurs in West Africa, where children and young men are worked as slaves in mines under terrible conditions controlled by armed soldiers.  If there is any accident they are left to die because it is too expensive to remove them and treat them. Tantalum is used in smart phones. This is in addition to the better known slavery that occurs in gold and diamond mining in Africa.

In India, the slavery often occurs when whole villages are owned by someone and the villagers are treated as slaves in exchange for allowing them to continue to live there. Most of the slaves in India work in brick making, using mud, that makes construction in India both cheap and dangerous. Notably most countries do not act against their domestic slavery because it is not profitable to do so.  West African countries have little leverage against the chocolate conglomerates and the Indian Government cannot stop the slavery in brick making for fear of causing a rises in the price of construction.  It is mostly private anti-slavery organizations that work slowly and deliberately against these manifestations of modern slavery.