Jill Jordan, a great Australian passes

JILL JORDAN: I think they just couldn’t be bothered with us. They thought we were a mob of fools, I think. It’s really only been through doing the sorts of things that we’ve done, by getting involved in starting co-operatives and so on and really having an economic impact on the town that probably many of them have changed their minds. After I’d been living up here for about a year I sat on a knoll up at the top of the valley up here. It’s a funny thing to say, but I swear that the land spoke to me and said, “You need other people here to help you look after this.” And it was at that stage that I decided that I would form a community.

From Australian Story http://www.abc.net.au/austory/transcripts/s355648.htm


Jill Jordan was not some wooly-headed idealist but a very practical person

Jill’s factors for sustainability in community enterprise.

  • Sound financial base
  • Good management
  • Flexibility (to change with changing needs)
  • Broad base of members to encourage/maximise involvement
  • Accessible training opportunities
  • Ensuring people are doing what they love to do
  • Valuing everybodies contribution.


I never met Jill Jordan but her work in Maleny inspired thousands of Australians including myself.





Mish Shedlock at Google Techtalks

Mish Shedlock on a post entitled “Thoughts on blogging and the economy.”

Why watch? This video gives more insight into Mish, the person and into his ideas. Mish’s ideas are clear and well thought through as you would expect from a person who comes from an engineering background.

Mish the person, seems to be the kind of person you would like as a friend or neighbour.

This is part fan post and part aide memoire.

Michael Hudson on GFC , solving by debt jubilee

From the Renegade Economist.



Hat tip to Red Tory.

Michael Hudson is also a regular contributor to Counterpunch (link on side).

Peter Morici on Breakfast, Radio National, Australian Broadcasting Corporation – Alice-in-Wonderland financing

Peter Morici

Peter Morici

Peter Morici is a regular contributor to Counterpunch. From this interview Peter seems to be a fiscal conservative.

Here Peter is discussing the President Barack Obama’s stimulus package.
Quotes –
“We are leaving the era of Voodoo Economics and entering the era of Alice-in-Wonderland financing.”

“We have a test case right now, we call it California… They can neither afford the welfare state they have nor can they trim it.”

Mish Shedlock – Fiat World Mathematical Model

Mish Shedlock has written a most elegant post entitled Fiat World Mathematical Model.

This article should be read in full.
The intro –

In a fiat world, money is printed into existence by the central bank – in the United States the Fed. Given there is nothing backing up this money, it is inherently worthless. However, one can think of as real. It was printed (even if only electronically), therefore it exists.

In addition to the previously mentioned money supply, fractional reserve lending allows credit to be extended by banks and financial institutions on top of that inherently worthless money. Indeed, banks and financial institutions have leveraged credit to base money at ratios of 30-1, 50-1 or even higher.

It’s pretty amazing if you think about it: Credit is extended with 30-50 times leverage on inherently worthless paper.

As an Australian I love Mish for honouring Steve Keen of the University of Western Sydney.

There are a lot of points worth noting but I have selected the points that affect me every day.

Finally, it is important to consider the role of attitudes going forward. Attitudes affect the willingness of consumers to take on debt and banks to extend it.


Boomers are heading into retirement. A significant portion of their retirement plan (home prices) has already been wiped out. Another portion of boomer retirement plans is being wiped out in the stock market crash. Toy accumulation is out. Fears of insufficient saving is in.
Boomers will be traveling and spending less than they planned.
A secular shift to frugality and risk aversion in all age groups has begun. Signs are everywhere.
The lend to securitize model at banks is dead. So are toggle bonds where debt is paid back with more debt, and a myriad of other financial wizardry schemes.
Children who have seen their parents wiped out in bankruptcy or foreclosed on are going to have a completely different attitude towards debt than their reckless parents did.

Expect to see more frugality from parents and their children alike.

Because Mish lives in the real world consider what he raises at the end of his post.

Global Stimulus Kicker

There is yet another kicker to this model. And that kicker is the Eurozone, the UK, Japan, and essentially every county on the planet is all attempting some sort of stimulus plan or other. This is bound to cause a major distortion at some point, as no country has anything remotely close to an exit strategy for this. What kind of distortion and when cannot be certain because we are indeed in uncharted territory, worldwide.

Political Will vs. Consumer Psychology

What happens next depends somewhat on the political will of the central banks and politicians. However, it depends more on the psychology of the borrowers. If consumers and businesses refuse to spend and instead pay back debts (or default on them along with rising unemployment), the picture simply is not inflationary, at least to any significant decree.

The credit bubble that just popped exceeded that preceding the great depression, not just in the US but worldwide. Thus, it is unrealistic to expect the deflationary bust to be anything other than the biggest bust in history. Those looking for hyperinflation or even strong inflation in light of the above, are simply looking at the wrong model.

At some point the market value of credit will start expanding again, but that is likely further down the road, and weaker in scope than most think.

If there was a people’s choice category for the Nobel Prize for Economics I would nominate and vote for Mish Shedlock for his contributions to the understanding of the complexities of economics in the real world.

Nuclear vs Alternate energy – playing with AUD$10 Billion




The state of the Art Nuclear reactor is the European Pressurised Reactor, one of which is being constructed at Olkiluoto Finland. Originally estimated to cost €3.7 billion however now with speculated cost over run of €1.5 billion (total cost in AUD$10.2 billion). It is designed to generate 1600 MW and have an operating life of 60 years. 

I will admit the total cost figure is a bit rubbery. It is difficult to discover hidden subsidies given to sustain industries that are considered strategically important to maintaining nuclear arsenals. There is no estimate of moneys set aside for the deconstruction of the plant.  (Imagine telling some CEO that AUD$ 2 billion must be set aside for the next sixty years.)


Ausra solar thermal

Ausra solar thermal

Ausra, a company spun off using technology developed by Australia’s CSIRO is building a plant to generate 177 Megawatt at a cost of  US$550 million. Converting at todays rate this would cost AUD$880 million. AUD $10 billion would build you enough plant to generate 2000 megawatt (25% more than the Olkiluoto plant). Yes, it would take up more space but Australia is neither short of Sunshine or space. A very important advantage is that there would very little that we would need to purchase overseas. 

Grid Connected Solar

Home Solar (Braemac Energy)

Home Solar (Braemac Energy)

Using figures derived from a webpage of BRAEMAC energy (Rough guide only for back of envelope calculations) where the company gives an estimate for materials and labour of AUD$30 000 for 3.2 kilowatt system. AUD $10 Billion would pay for 333 thousand installations generating 1066 megawatt at peak.

The solar panels used in the quote are made by Suntech a company started by one of my Chinese-Australian heroes, Dr Zhengrong Shi. Suntech, the worlds largest producer of solar panels could provide all the panels required. Being a dynamic company employing newer technologies, Suntech could achieve the cost reductions so that for AUD$10 billion more than 1600 megawatt could be produced at peak.


Wikipedia gives an estimate of €1300 per kilowatt installed cost(2007). Change to AUD and you find that AUD$10 billion will buy 3900 megawatt of wind power. 

In Australia with our open spaces, why couldn’t we build a 1000km long wind turbine “spine” composed 400 to 500 5 Mw turbines running close to our major transmission gridlines.

Saving – shifting from Standby to Nil power

Charles Hugh Smith supplied an estimate of 5% of electricity production is just for standby power. Conveniently this is almost the same as the power that would be produced by one state of the art 1600 megawatt nuclear power station. Since this would be achieved by regulation, education and retro-fitting, it is difficult to put a dollar value on this.

Ropatecs demonstration installation at Bolzano Italy

Ropatec's demonstration installation at Bolzano Italy

Using a multi-faceted approach, allowing AUD$ 1 billion in cost of regulation and education over ten years still leaves AUD$9 billion to used for retro-fitting older buildings with solar and wind turbines it is hard to believe you could not achieve savings and new generation equivalent to a 1600 megawatt nuclear power station.


To build a state of the art 1600 megawatt nuclear power plant in Australia would cost over AUD$10 billion. This is approximately twice the cost of the Snowy Mountain Scheme. For the same amount of money more electricity can be generated by big project Solar Thermal and Wind.

Can a Government spend its way out of a recession?

Comment on a post by Tom Elliott called “Talk is Not Cheap” dated 10 December 2008 at ABC’s Unleashed

Tom Elliott’s statement

“It is the Federal Government which, once it gets over its 1996 election loss fear of budget deficits, just might be able to spend its way out of economic recession.”

My response

An appeal to the more learned among us, is there any examples of this actually working without massive tariff barriers going up de facto or otherwise?

Government expenditure comes from taxes (paid mostly by Aussie battlers), not from some mythical magic pudding.