Eurozone leaders have brought their begging bowl to China, looking for help in boosting their bailout fund. So what does this say about the shift in the global balance of power?
In October 1911, China rose up in revolution. Four months later the last emperor had fallen and European moneymen were flocking to Beijing, eager to finance the bankrupt new republic.
In October 2011, another European moneyman headed for Beijing. But Klaus Regling, head of the European Financial Stability Facility, did not go there to lend to China. He was there to borrow, asking China to save Europe from economic disaster.
In just one century, China has gone from financial basketcase to the world’s banker, and Europe has made the same trip in the other direction. It is one of the biggest turnarounds in history. How did it happen? And, more to the point, what does it mean?
The turnaround is part of a much longer story.
The average Briton or American earns 10 times as much as the average Chinese. But China is catching up”
It begins around 1600, when China was the richest nation on earth and Europeans, anxious to trade with China, were building new kinds of ships. For millennia, the Atlantic Ocean had been a barrier cutting Europe off from the rest of the world, but Europe’s new ships effectively shrank the ocean, turning it into a commercial highway. By 1700, the resources of the Americas were feeding a European take-off.
Fukushima is now far and away the worst nuclear disaster in all of human history. Chernobyl was a Sunday picnic compared to Fukushima and the amount of cesium-137 released at Fukushima this year so far is equivalent to 168 Hiroshima bombs. The crisis at Fukushima is far, far worse than you have been told. We are talking about multiple self-sustaining nuclear meltdowns that will not be fully contained for years. In an attempt to keep people calm, authorities in Japan (and around the rest of the world as well) have lied and lied and lied. Over the months that have passed since the disaster began, small bits of the truth have slowly started to come out. Authorities are finally admitting that the area immediately surrounding Fukushima will be uninhabitable indefinitely, and they are finally admitting that the amount of radioactive material that has been released is far higher than initially reported. It is going to take the Japanese years to fully contain this problem. Meanwhile, Fukushima will continue to blast all of us with high levels of cesium, strontium and plutonium and will slowly kill millions of people around the globe for years to come.
These days, the mainstream media does not talk about Fukushima much. The reality is that there have beena whole lot of other disasters for them to talk about.
But just because Fukushima is a nightmare that is playing out in very slow motion does not mean that it does not deserve our full attention.
To get an idea of just how nightmarish Fukushima has turned out to be, just consider the words of nuclear expert Steven C. Jones….
(Reuters) – Moody’s Investors Service cut its rating on Japan’s government debt by one notch to Aa3 on Wednesday, blaming a build-up of debt since the 2009 global recession and revolving-door political leadership that has hampered effective economic strategies.
Japan is preparing to elect its sixth leader in five years to replace unpopular Prime Minister Naoto Kan, under fire for his handling of the response to a March tsunami and subsequent radiation crisis at a crippled nuclear power plant.
The downgrade, while not out of the blue, served as another reminder of the debt burdens that nearly all of the world’s major advanced economies shoulder. The United States lost its top-tier AAA rating from Standard & Poor’s earlier this month, and Moody’s warned in June that it may downgrade Italy as Europe’s sovereign debt crisis festers.
~what’s scary is the fact that the Internet community for the most part has been saying this since the accident happened and people laughed~jude
Australia’s CBS exposed the “unspeakable” realities of the Japanese catastrophe in its 60 Minutes program Sunday night during which leading nuclear scientist Dr. Michio Kaku said radiation from Fukushima will impact of all of humanity. The nuclear energy power industry violation of the right to health is apparent throughout the new Australian report.
“In fact the whole world will be exposed from the radiation from Fukushima,” Dr. Kaku told CBS reporter Liz Hayes.
As bad as the Greek financial crisis seems, the land of Pericles is only the second-most-indebted nation in the world. The government of Japan holds top honors: Its debt equals 234% of its GDP. The reason Japan hasn’t been in financial-crisis mode is that it owes most of that money to itself. By contrast, the U.S., seventh on our list, owes $4.4 trillion to foreigners. To China alone Uncle Sam owes a cool $1.1 trillion. Of course, when measured by total debt, the U.S. has the biggest IOU: $14.3 trillion.
By way of comparison, the Chernobyl nuclear disaster that occured in 1986 in the Ukraine, Russia- heretofore the worst nuclear disaster on record- burned for 10 days and cumulatively killed an estimated 1 million people worldwide. The Fukushima, Japan nuclear disaster has 5 nuclear reactors burning, 2 in partial meltdown and 3 in full meltdown- and they’ve ALL been uncontrollably burning since March 11th. Its been over 3 months and this nuclear disaster remains completely out of control. In fact, some industry estimates cite the possibility that these meltdowns will be contained (optimistically) in 1-3 years, at the very earliest.
The amount and intensity of the radioactive fallout from this particular nuclear disaster will assuredly kill hundreds of millions of people worldwide over time. Japan itself is, of course, the epicenter of this radioactive contamination that has spread out from these reactors.
However, the Korean peninsula, China and nations immediately surrounding the Japanese archipelago will also bear the brunt of a significant amount of radioactive fallout from this disaster. Immediately downwind of this radioactive release, though, is the United States of America and the entire northern hemisphere, comprising the majority of the world’s industrialized nations on Earth. Significant amounts of plutonium, strontium, cesium, uranium and a whole plethora of other highly radioactive particles have already fallen on the continental land mass of the USA and have already entered the food chains and water tables of the nation.
To give one an example of how lethal radiation is, one pound of plutonium evenly distributed into everyone’s lungs would kill every man, woman and child on Earth. There are literally “tons” of radioactive plutonium (among other radioactive elements) that have been released into the air and ocean environments since March 11th. Another critical fact to remember is that radioactive plutonium, for example, remains lethal (killing life) for thousands years as it has a half-life of 24,000 years. Some other radioactive elements such as uranium have a half-life of 4.47 billion years.
Note:With so much going on with Europe’s debt crisis, the continuing disaster and economic contraction in Japan, and the potential for a very hard landing in the Chinese growth miracle (which is in the running as my favorite “black swan candidate” for 2011), I am going to return our attention to oil in this report. The next report will assess the developing and unfolding debt crisis that will drag down most of the developed economies at some point, and this report will provide essential context for understanding why this result is inevitable and when it will occur.
The Next Oil Shock
The only thing that could prevent another oil shock from happening before the end of 2012 would be another major economic contraction. The emerging oil data continues to tell a tale of ever-tightening supplies that will soon be exceeded by rising global demand. This time, we will not be able to blame speculators for the steep prices we experience; instead, we will have nothing to blame but geology.
Back in 2009, I wrote a pair of reports in which I calculated that we’d see another price spike in oil by 2010 or 2011, based on some assumptions about global GDP growth rates, rates of decline in existing oil fields, and new projects set to come online. Given the recent price spike in oil (Brent crude over $126, now at $115) and recent oil supply data, those predictions turned out to be quite solid (for reference, oil was trading in the low $60s at the time).
One part I whiffed on was in my prediction that the world community would have embraced the idea of Peak Oil by now and begun adjusting accordingly, but that’s not really true except in a few cases (e.g. Sweden). Perhaps things are being differently and more seriously considered behind closed doors, but out in public the dominant story line concerns reinvigorating consumer demand, not a looming liquid fuel crisis.
How the major economies can continue proceeding with a business-as-usual mindset given the oil data is really quite a mystery to me, but that’s just how things happen to be at the moment.
On April 12, 2011 the Japanese government officially announced that the severity of the Fukushima Daiichi nuclear disaster had reached level 7, the highest on the International Nuclear Event Scale. Before Fukushima, the only level 7 case was the 1986 Chernobyl disaster, whose 25th anniversary was marked on April 26. Two and a half months after the 3.11 catastrophe, the first to affect multiple reactors, TEPCO and the Japanese government continue to struggle to bring the reactors at Fukushima Daiichi under control. TEPCO estimates that the problems could be solved in six to nine months now appearing extraordinarily optimistic and plans have been announced to close nuclear power plants deemed of particularly high risk such as the Hamaoka facility.
Following the upgrade to level 7, Japan’s Prime Minister’s Office released a statement comparing Fukushima and Chernobyl. (Source)
The Japanese government argues that apart from children who contracted thyroid cancer from drinking contaminated milk, there have been no health effects among ordinary citizens as a result of Chernobyl radiation. Is this really the case? Given the Japanese government’s precautions against thyroid cancer in children, is there reason to believe that the Fukushima accident will take no lives except those exposed to the highest dangers in the plant clean-up? (Source)
On April 15, Kyodo, Japan’s major news service, ran an English language piece by Russian scientist Alexey V. Yablokov (source). Yablokov’s stern warnings about the threat of even low levels of radiation had been ignored by the major media but was reported in Japanese in the Nishi Nippon Shimbun. (Source)
The English only Kyodo piece, however, ties Yablokov’s extensive Chernobyl research with the unfolding Fukushima crisis. Under the headline “How to minimize consequences of the Fukushima catastrophe,” Yablokov observed that
The analysis of the health impact of radioactive land contamination by the accident at the Fukushima Daiichi nuclear power plant, made by Professor Chris Busby (the European Committee of Radiation Risk) based on official Japanese Ministry of Education, Culture, Sports, Science and Technology data, has shown that over the next 50 years it would be possible to have around 400,000 additional cancer patients within a 200-kilometer radius of the plant.
This number can be lower and can be even higher, depending on strategies to minimize the consequences. Underestimation is more dangerous for the people and for the country than overestimation.
Based on the Chernobyl experience, he made the following recommendations:
Discussing population dynamics in elite (or is that elitist, let’s just call it Wall Street) circles has always had an aura of taboo about it, due to the inevitable degeneration of any conversation into Malthusian rhetoric, especially if one of the speakers had had a little too much to drink. And for better or worse, name-dropping Malthus does not garner brownie points, nor will it lead to another horrendous straight to HBO faux morality tale about this or that. That stigma, however (and luckily) has not prevented Deutsche Bank’s Sanjeev Sanyal (yes, there are people at DB who do think originally and whose day is not taken up by trips to and fro Englewood Cliffs) from penning a must read macro analysis titled “The End of Population Growth” which we will discuss more in depth shortly, but wanted to bring readers’ attention to one particular chart: namely that comparing world fertility rates in 1950-1955 and 2010-2015. The surprising implication of the below chart leads Sanyal to declare that the period set to begin in just 10 years “will be one of the most important turning points in history” simply because: “the human race will no longer be replacing itself by the early 2020s. Population growth will continue for a few more decades because of momentum from the age structure and people living longer but, reproductively speaking, our species will no longer be growing.” And since global reproduction will not be net additive, it will be net subtractive… and on a long-enough timeline the world’s population will drop to zero…
Remember Fukushima? The exploded nuclear power plant that everyone was talking about two months ago and now the media has imposed a complete blackout on, because out of print/page views, means out of radioactive spewage, right? Wrong. According to the latest update from a now government funded TEPCO, “fuel rods are fully exposed in the No. 1 reactor at its stricken Fukushima Dai-Ichi nuclear plant, setting back the utility’s plan to resolve the crisis. The water level is 1 meter (3.3 feet) below the base of the fuel assembly, Junichi Matsumoto, a general manager at the utility known as Tepco, told reporters at a briefing in Tokyo. Melted fuel has dropped to the bottom of the pressure vessel and is still being cooled, Matsumoto said. The company doesn’t know how long the rods have been exposed, he said.” And apparently even more skeptics are emerging: ““I’ve been saying from the beginning the water tomb plan won’t work,” said Tadashi Narabayashi, a professor of nuclear engineering at Hokkaido University. “Tepco must work on a water circulation cooling system as soon as possible. They’ve been going round and round in circles and now realize this is what they need to do.” And the kicker: “It’s unlikely the situation has worsened with the discovery the rods are exposed because they’ve probably been out of the water since shortly after the crisis started, Narabayashi said.“ Which means that the situtation has indeed been dire from the very beginning, that TEPCO and the government have been lying, that radiation has been spewing, and that prevalent radiation is likely far higher than most have conceived. Pretty much as was predicted on Zero Hedge long ago.