Wednesday, May 30, 2012

The Sarcasm Report v.162

May 30, 2012
What's Really Behind Europe's Decline? It's The Birth Rates, Stupid

If Spain, and other Mediterranean countries, cannot pay their bills now, these trends suggest that in the future they will become increasingly unable or even unwilling to do so.

Bills? That sounds an awful lot like debt. I thought birth rates were the problem. Says so right in the title. What's going on? If you have a lot of debt then you will need a lot of children to pay it? Oh, I see. That actually does make some sense.

What's a good annual population growth rate to fix the world's problems then? 1%? Yes! If we can achieve that growth rate over the long-term, then how much prosperity will we have in the year 4000?

2.7 quintillion people (2.7 million trillion people) paying bills! That's gotta be good!

Having a hard time picturing it? Can't blame you. Let me help.

That's 11.6 people per square inch of the earth's land surface. There will be so much prosperity we won't know what to do with it all. I sure hope everyone has a garden attached to the roof of their single-occupancy micro-vehicle as they whisk to and from work. Good times!

January 30, 2009
When Grasshoppers Go Biblical: Serotonin Causes Locusts to Swarm

In the wild, swarms usually appear after a rainy period followed by a time of drought. After rains, populations of grasshoppers explode, Burrows says, because there is food aplenty. But when the land becomes parched and grass scarce, the populations get pushed into smaller and smaller areas, becoming more packed as desirable pasture diminishes, he says. At a certain point of density, the swarm-inducing serotonin gets triggered and the locusts set off en masse to find greener pastures. After that, few things — other than an end to the food supply or an ocean — can stop them.

We're smarter than locusts! Nothing will stop us! Mwuhahaha!

Source Data:
World Population
Area of Earth's Land Surface


Stagflationary Mark said...

I've added a bonus chart to the Hook, Line, and Stinker post for those who are interested.

fried said...

This is slightly off-topic, but I have to admit, those e bonds I bought last month aren't looking so dumb now.
I told nobody what I was up to, but now the 10 year is at what...1.62??? And the yield is heading down....

Stagflationary Mark said...


Today, you said...

I told nobody what I was up to...

Yesterday, I said...

I'm not too proud to lock in 3.53%.

There is a common theme here. For what it is worth, hindsight shows that *all* of my best investment decisions would have been considered "crazy" by the typical investor or those in ivory towers.

I can't say that EE Savings bonds will be similar, but I can say that if EE Savings bonds could be resold, the secondary market would pay roughly a 30% premium for them (based on the effective interest rate if held 20 years).

Stagflationary Mark said...

Steve Liesman was on CNBC saying that interest rates are coming down even though the Fed isn't doing anything right now. The bond market is doing the Fed's job.

That's what I've been saying all along.

If the Fed had NEVER done a thing to support this economy, then we'd be in a deflationary Great Depression right now, and we'd have ultra low interest rates to go with it.

So how has the Fed manipulated interest rates lower? If anything, interest rates were higher than they would have otherwise been.

Why can't more people see this?

Someone, anyone, point out the flaw in my thinking. I'd love to hear a rational counterargument. Seriously. If I am wrong to think this way then the sooner I find out the better.

On the other hand, if I am right then this whole recovery is just a confidence game built upon faulty smoke and mirror logic. That certainly won't end any better than it did the last time, or the time before that.

Put another way, I believe that the Fed cannot create prosperity. At best, they can create temporary confidence. That's great if our problems are temporary (cyclical). It's nearly useless if our problems are permanent (structural).

Mr Slippery said...

US 10 year rates are at historic lows. But, the shocking thing is that they are still higher than Switzerland, Germany, and Japan. We have some catching up to do to get down below a 1% yield.

What I want to read is the missing chapter in Keynes' General Theory on Money and Credit about how this all ends when interest rates die in a fiat system.

If I am the government of Japan and I can't afford to pay back my bonds as they mature, even at 0% interest, what happens? Are the holders of bonds content that the BoJ is monetizing the principal as it comes due? MMT heaven? Or does the system go TILT and we get a PLEASE INSERT COIN message in order to start a new game?

Stagflationary Mark said...

Mr Slippery,

What I want to read is the missing chapter in Keynes' General Theory on Money and Credit about how this all ends when interest rates die in a fiat system.

Yes! The epilogues often hold the best information when death is involved! ;)

Troy said...

If I am the government of Japan and I can't afford to pay

There's always money in the banana stand.

As for population:

Spanish unemployment hits record 5.64 million

The number of unemployed people reached 5,639,500 at the end of March, with the unemployment rate hitting 24.4%, the national statistics agency said.

I think the physiocrats were onto something . . .

Troy said...

Today's Interest rates are a symptom of too many "savers" and not enough "spenders".

The moment it became apparent to me that money was not wealth was an interesting experience indeed.

Money is the medium of exchange to make it difficult for individual consumers in an economy to leech on the productivity of others, but since 1980 the FIRE sector has really gotten out of hand with its compounding yields and lower tax rates -- $20,000 per capita in non-wage income now! $20,000 is actually enough to live on quite comfortably, $40/day after health insurance is paid.

But this non-wage income is not going to the masses of course, it's coming FROM the masses and going to the 1%.

"There's your problem, mate. . ."

Stagflationary Mark said...


Spain clearly doesn't have enough babies!

If Spain had more babies then the babies could be put to work earning money to pay the unemployment benefits of those who do not have jobs!

And what could the babies do for work? Can't ever have too many baby landlords!

Yes! Genius!

P.S. My girlfriend is a big fan of Baby Pearl.