opec braces for sharp drop in oil prices

BloggingStocks | Why is OPEC expecting a sharp drop in oil prices? First, much of the rise in oil prices has followed the rally on Wall Street. Investors reasoned that higher stock prices means that business is doing better and hence a need for more oil, and prices rise.

Not so fast. Business demand for oil is weak, and the consumer got clobbered by the recession and is holding back spending money. So the classic relationship between the stock market and oil that investors follow is not there this year.

The Wall Street Journal is reporting that stockpiles are at a 24-year high. Distillate demand for gasoline and diesel fuel dropped by 15%. Refiners have cut back production to 85.8%, from 87.9% the previous week. Distillate stocks surged to 160.5 million barrels, the highest level since 1985.

The price of September crude closed at $68.05 per barrel on Friday, up 89 cents. The futures contracts for crude in are a contango. What is a contango? It is a futures market where the prices for distant contracts are higher that those for nearby delivery. For example, the September futures contract closed at $68.05 per barrel while the December contract closed at $72.52 per barrel. This sets up a huge profit margin for oil traders. They simply buy the cash crude oil and sell distant futures contracts against them. The profit spread between September and December is $4.47 per barrel. Figure that profit on say 1,000,000 barrels.

The effect of these factors are that the buyers of nearby oil have no more room to store it. They are using tankers and barges and running out of room. So now we have a glut of oil. OPEC sees this and is bracing for a sharp drop in prices.

This is also how banks are racking up huge profits. They are borrowing money at 0.25% from the Fed and lending it out longer term at much higher rates to businesses and consumers.

Would you sell oil contracts at these levels?

more grain, fewer nutrients

Farmonline | SINCE the Green Revolution of the 1960s, the world has produced a lot more grain—but there may be a lot less in it, a unique experiment in the United Kingdom has revealed.

Recent analysis of 160 years of crop samples from Rothamsted Research Station near London discovered that levels of essential micronutrients remained consistent in wheat grain from 1844 to the late 1960s, but then began a decline that continues to this day.

The nutrient decline began when traditional long-straw wheat varieties where phased out in favour of higher-yielding semi-dwarf varieties.

As wheat plants have grown smaller since the 1960s, grain nutrient density has continued to decrease.

Compared to the old long-straw varieties, Rothamsted’s modern dwarf wheat grain carries on average 20-30 per cent less zinc, iron, copper and magnesium.

For zinc, a critical human nutrient, the decline is even more pronounced if the most recent five years of data are compared, with average nutrient levels in wheat harvested from 1844-1967.

the new reality

Fist tap Dale for making me aware of Loretta Napoleoni

u.s. government completely out of wheat

Barternews | Quietly, the last of the U.S. government’s wheat reserves, held in the Bill Emerson Humanitarian Trust, were sold in late May onto the domestic market for cash. The cash was put in a trust for food aid. With no other government wheat holdings, U.S. government wheat stocks are now totally exhausted.

The following recent statements by Rebecca Bratter, director of policy for U.S. Wheat Associates, provides insights:

“While the U.S. wheat industry strongly supports the administration’s goal of maintaining current food aid programs to prevent rampant hunger worldwide, there is concern regarding the impact of selling reserve wheat on the domestic market and over the lack of commitment from the administration to replenish the Bill Emerson Humanitarian Trust.

“U.S. Wheat Associates has shared these concerns with high officials at USDA and on the President’s staff and has asked about the Administration’s intent regarding replenishment of the Bill Emerson Humanitarian Trust. Staff from the office of the President’s Special Agricultural Assistant noted that while there is no commitment at this time, the administration intends to replenish the Trust once the supply and price scenario stabilizes.”

(Note: U.S. Wheat Associates works in 90 countries promoting U.S. wheat exports.)

The Bill Emerson Humanitarian Trust was established in 1980 by an act of Congress and is authorized to hold up to 4 million metric tons of wheat, corn, sorghum and rice, as a reserve for global food crises. The wheat is purchased and managed by the Commodity Credit Corporation and included in the total amount of wheat owned and held by the U.S. government. Holdings by the BEH Trust for corn, sorghum and rice are also zero.

For the decade of the ‘80s, government wheat holdings (including those in the BEH Trust) averaged 358 million bushels. For the decade of the ‘90s, government wheat holdings averaged 133 million bushels. Since 2000, government wheat holdings dropped steadily until recently when the last of the government-owned wheat was sold.

With no formal plan for wheat stocks by the U.S. government, wheat stocks have defaulted to the arena of the private free-market sector. Unfortunately, the private sector has no plans for any kind of minimum wheat stocks that would protect the American public from a price and/or availability standpoint.

Private wheat stocks are divided into two major categories — on-farm wheat stocks owned by farmers, and off-farm wheat stocks owned by warehouses and grain companies. These two together held 305.6 million bushels of wheat as of June 1 (or roughly 1 bushel per person living in the United States) the lowest level in 60 years.

Of these stocks, on-farm wheat stocks are at 25.6 million bushels, the lowest level of on-farm wheat stocks since the USDA started keeping tabs back in 1934. So as you are driving in rural America before wheat harvest, the farmer’s bins have never been so empty.

The USDA, projects America to have a bumper wheat crop in 2008, producing 2.43 billion bushels and consuming and exporting 2.30 billion bushels. This leaves a meager 133 million bushels (5.5 percent of production) as a margin for error. Globally, the USDA projects wheat production to be 24.36 billion bushels, consumption to be 23.74 billion bushels for a relatively smaller margin of 622 million bushels or 2.6% of production.

The recent wheat crises in America was sparked by the nation exporting more wheat than it produced. This means the true 2008 wheat margin for Americans is really the global margin of 2.6%. Any decline from global projections could precipitate greater wheat exports from America and further draw down already low domestic and global wheat stocks.

Food security is emerging as a global focal point. With the U.S. government and the private sector lacking visions for stocks, food security is poised to grow as a grass-roots issue around the nation.

political, social, and economic forecast

Interesting analysis, channel, and video series.

charlie gibson's "the truth about oil"

ABC | From the trail of oil pipelines snaking through Oklahoma to the middle of the Gulf of Mexico, Gibson crisscrossed the country in search of the answer to one salient question -- what is the true cost of oil? He reports from Cushing, Oklahoma, a remote outpost where the price of a barrel of oil there dictates the price nationally. He travels 160 miles off the coast of Louisiana to see one of the deepest drilling oil rigs in America and visits "refinery row" along the Gulf Coast, where a third of America's oil refineries are concentrated.

Despite talk of dwindling oil reserves, new technologies have vastly increased the amount of oil, providing a larger reserve today than a decade ago. Last summer's $147 a barrel price baffled many Americans, but Wall Street insiders tell Gibson that speculators caused the price to skyrocket.

Americans consume a quarter of the world's oil, yet make up only 3 percent of the global population. When confronted by Gibson, Energy Secretary Steven Chu admits "we're headed for a train wreck." Chu explains how a new generation of biofuels could help the U.S. decrease its dependence on foreign oil. In addition to interviews with dozens of experts and industry leaders, Gibson also sat down with General Wesley Clark, the former NATO commander who discussed the role that oil played in the Iraq war.

softening you up for the goldman frontrunning fiasco

NYTimes | Traders Profit With Computers Set at High Speed - It is the hot new thing on Wall Street, a way for a handful of traders to master the stock market, peek at investors’ orders and, critics say, even subtly manipulate share prices.

It is called high-frequency trading — and it is suddenly one of the most talked-about and mysterious forces in the markets.

Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else’s expense.

These systems are so fast they can outsmart or outrun other investors, humans and computers alike. And after growing in the shadows for years, they are generating lots of talk.

Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed. High-frequency trading is one answer.

And when a former Goldman Sachs programmer was accused this month of stealing secret computer codes — software that a federal prosecutor said could “manipulate markets in unfair ways” — it only added to the mystery. Goldman acknowledges that it profits from high-frequency trading, but disputes that it has an unfair advantage.

Yet high-frequency specialists clearly have an edge over typical traders, let alone ordinary investors. The Securities and Exchange Commission says it is examining certain aspects of the strategy.

“This is where all the money is getting made,” said William H. Donaldson, former chairman and chief executive of the New York Stock Exchange and today an adviser to a big hedge fund. “If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage.”

detroit - the post-apocalyptic future of american cities

AlMartinRaw | Last week I had a chance to talk to a friend who just got back from Detroit and boy did he get an eyeful of America’s Future. After listening to him describe Detroit , it’s obvious that it has all fallen apart. First of all, there’s very little civil authority or regular civil government remaining and in operation. Almost everything has been turned over to these so-called Private Management Companies. And this is how it’s being done. They block out areas, in which 80% or more of the houses have been foreclosed on, which happens to be almost the entire city and county. They have selectively begun to bulldoze the properties which have been foreclosed on. The rest have been boarded up. Then they have turned over management of these 100 block area to private companies which have become defacto governments. They have the literal authority of “governments” and they’re paid a flat fee from the city, county or state to “manage,” as they say, a square block of this urban wasteland.

These Private Management Companies sell themselves as residual property management firms. Most of these companies, as it turns out, are in fact off-shore subsidiaries of Private Military Contractors (PMCs). They provide a catchall service. In other words, they regulate how much electrical power and natural gas flows through these areas. They also act as police force, and they act as management for local civil government.

However this Urban Wasteland Management has been pretty efficient. They want to protect what remaining wealthy areas that still exist, like Bloomfield Hills. These companies come in and effectively build large barbed wire fences, around these mostly abandoned square block areas. Some people are still living in them, by the way, even though most of them are boarded up because they’re no longer bothering to serve process through the entire foreclosure procedure. Oftentimes once the house has been taken back and is ultimately owned by the city or county or some government, they let the people stay there until it’s abandoned and then taken over by squatters. Then they’re given a 72 hour notice to leave, by this private management company – before they come in and bulldoze the house. If you’re not out, that’s it. The bulldozers run. They can bulldoze the place with you in it – with legal impunity.

the guardian institutions of hierarchy

paulchefurka | One aspect of human culture that seems irresistible to the ancient status-seeking part of our brain is the development of hierarchies. The encoding of personal status and power into social structures is evident in the tribes and troops of all the great apes, but human beings have gone much further. We built an entire globe-spanning civilization on the foundation of hierarchy.

One inevitable effect of social hierarchies (in fact the effect that made our global civilization possible) is the consolidation of power. As new power comes into a hierarchic social system it flows preferentially to the top. As the system develops, even the small amount of power available to those at the bottom of the social pyramid is removed and ends up concentrated at the top in a power elite. This becomes a positive feedback loop: the more power is consolidated at the top, the easier the consolidation becomes.

This consolidation of power is seen in all social hierarchies. As you would expect, our most hierarchic societies, from ancient Egypt to Stalinist Russia to the USA, exhibit it most profoundly.

You can think of this effect as a form of social reverse osmosis, in which power is pumped through a semi-permeable membrane up a gradient from social regions of low power concentration to regions of high concentration, with class boundaries forming the membrane between them.

Physical reverse osmosis requires both a semi-permeable membrane and a pump, so it's logical to look for similar mechanisms in this social metaphor. What drives social power from low to high concentrations? And what keeps the semi-permeable membrane of social class boundaries intact so that the whole system can function?

In our metaphor of reverse osmosis, these mechanisms are provided by what I call the Guardian Institutions. These are the corporate, economic, financial, political, legal, religious, educational and communications institutions that form the structural skeleton of our civilization.

iPS cells yield live mice

The Scientist | Researchers have created live mice from induced pluripotent stem (iPS) cell lines, demonstrating iPS cells are as pluripotent as embryonic stem (ES) cells, according to two studies published online today.

"This ability to make a mouse from the cells of a Petri dish is the most stringent standard that mouse embryonic cells are held to, and iPS cells now meet that standard, which has been a lingering doubt," said stem cell biologist George Daley of the Harvard Stem Cell Institute and Children's Hospital Boston, who was not involved in the work. "It assures us that iPS cells can do all the things that ES cells can do."

subreality mainstreamed?

NYTimes | This week, the 40th anniversary of the first moon landing, there’s much talk of exploring other worlds. Which is exciting and grand; such is the stuff that dreams are made on. Yet we don’t need to go abroad to find amazing new life forms. We just need to look at the palms of our hands, the tips of our fingers, the contents of our guts.

The typical human is home to a vast array of microbes. If you were to count them, you’d find that microbial cells outnumber your own by a factor of 10. On a cell-by-cell basis, then, you are only 10 percent human. For the rest, you are microbial. (Why don’t you see this when you look in the mirror? Because most of the microbes are bacteria, and bacterial cells are generally much smaller than animal cells. They may make up 90 percent of the cells, but they’re not 90 percent of your bulk.)

This much has been known for a long time. Yet it’s only now, with the revolution in biotechnology, that we’re able to do detailed studies of which microbes are there, which genes they have, and what they’re doing. We’re just at the start, and there are far more questions than answers. But already, the results are astonishing, and the implications profound.

Even on your skin, the diversity of bacteria is prodigious. If you were to have your hands sampled, you’d probably find that each fingertip has a distinct set of residents; your palms probably also differ markedly from each other, each home to more than 150 species, but with fewer than 20 percent of the species the same. And if you’re a woman, odds are you’ll have more species than the man next to you. Why should this be? So far, no one knows.

But it’s the bacteria in the digestive tract, especially the gut, that intrigue me most. Many of these appear to be true symbionts: they have evolved to live in guts and (as far as we know) are not found elsewhere. In providing their habitat — a constant temperature, some protection from hostile lifeforms and regular influxes of food — we are as essential to them as they are to us.

And they definitely are essential to us. Gut bacteria play crucial roles in digesting food and modulating the immune system. They make small molecules that we need in order for our enzymes to work properly. They interact with us, altering which of our genes get turned on and off in cells in the intestinal walls. Some evidence suggests that they are essential for the building of a normal heart. Finally, it seems likely that gut bacteria will turn out to affect appetite, as well as other aspects of our behavior, though no one has shown this yet. (Imagine the plea: I’m sorry, sir, my microbes made me do it.)

Together, your gut microbes provide you with a pool of genes far larger than that found in the human genome. Indeed, the gut “microbiome,” as it is known, is thought to contain at least 100 times more genes than the human genome. Moreover, whereas humans are extremely similar to one another at the level of the genome, the microbiome appears to differ markedly from one person to the next.

What determines these differences? Good question. Diet has some effect: a diet rich in sugars and fats reduces the diversity of gut bacteria, and shifts the balance towards those that are more efficient at extracting energy. Start eating more plants and you can shift the balance back, and increase the diversity of your gut microbes. Your own genetic background may play a role as well, though we are far from understanding how, or how much. It probably also matters which other microbes are present: as in any ecosystem, relationships among different inhabitants are likely to be complex.

(At this point, I’d like to introduce a caveat. We know that the diversity of microbial species differs between your gut and mine, and that the less related we are, the more that will be true. Family members tend to have more similar gut microbes than nonrelatives, and preliminary evidence suggests that geography matters, too. So the gut microbes of people in China are different from those of people in the United States — though whether this is due to diet, human genes or geography is entirely unknown. But despite this variation at the species level, we don’t yet know how much variation there is at the genetic level. It may be that different sets of gut microbes provide broadly equivalent sets of genes.)

Naturally, a huge effort is now under way to see whether differences in gut bacteria are responsible for differences in health. But what interests me most about all this is that it suggests another mode of human evolution. Bacteria evolve quickly: they can go through many thousands of generations for every human one.

This has two potential consequences. First, during your lifetime, your bacteria can change their genes even though you cannot change yours. (You do have some flexibility: your immune system has a built-in capacity to change.) It may be that gut bacteria evolve in response to short-term changes in the environment, especially exposure to food-borne diseases. They may thus act as an evolving supplement to the immune system.

The second potential consequence is further reaching. Because bacteria can evolve so fast, it may be that some of what we think of as human evolution — like the ability to digest new diets that accompanied the invention of agriculture — is actually bacterial evolution. We know that hostile bacteria — those that cause diseases in ourselves and our domestic plants and animals — have undergone dramatic genetic changes in the last 10,000 years. Perhaps our friendly bacteria have, too.

why personal change does not equal political change

Orion | WOULD ANY SANE PERSON think dumpster diving would have stopped Hitler, or that composting would have ended slavery or brought about the eight-hour workday, or that chopping wood and carrying water would have gotten people out of Tsarist prisons, or that dancing naked around a fire would have helped put in place the Voting Rights Act of 1957 or the Civil Rights Act of 1964? Then why now, with all the world at stake, do so many people retreat into these entirely personal “solutions”?

Part of the problem is that we’ve been victims of a campaign of systematic misdirection. Consumer culture and the capitalist mindset have taught us to substitute acts of personal consumption (or enlightenment) for organized political resistance. An Inconvenient Truth helped raise consciousness about global warming. But did you notice that all of the solutions presented had to do with personal consumption—changing light bulbs, inflating tires, driving half as much—and had nothing to do with shifting power away from corporations, or stopping the growth economy that is destroying the planet? Even if every person in the United States did everything the movie suggested, U.S. carbon emissions would fall by only 22 percent. Scientific consensus is that emissions must be reduced by at least 75 percent worldwide.

Or let’s talk water. We so often hear that the world is running out of water. People are dying from lack of water. Rivers are dewatered from lack of water. Because of this we need to take shorter showers. See the disconnect? Because I take showers, I’m responsible for drawing down aquifers? Well, no. More than 90 percent of the water used by humans is used by agriculture and industry. The remaining 10 percent is split between municipalities and actual living breathing individual humans. Collectively, municipal golf courses use as much water as municipal human beings. People (both human people and fish people) aren’t dying because the world is running out of water. They’re dying because the water is being stolen.

Or let’s talk energy. Kirkpatrick Sale summarized it well: “For the past 15 years the story has been the same every year: individual consumption—residential, by private car, and so on—is never more than about a quarter of all consumption; the vast majority is commercial, industrial, corporate, by agribusiness and government [he forgot military]. So, even if we all took up cycling and wood stoves it would have a negligible impact on energy use, global warming and atmospheric pollution.”

is the sun missing its spots?

NYTimes | The Sun is still blank (mostly).

Ever since Samuel Heinrich Schwabe, a German astronomer, first noted in 1843 that sunspots burgeon and wane over a roughly 11-year cycle, scientists have carefully watched the Sun’s activity. In the latest lull, the Sun should have reached its calmest, least pockmarked state last fall.

Indeed, last year marked the blankest year of the Sun in the last half-century — 266 days with not a single sunspot visible from Earth. Then, in the first four months of 2009, the Sun became even more blank, the pace of sunspots slowing more.

“It’s been as dead as a doornail,” David Hathaway, a solar physicist at NASA’s Marshall Space Flight Center in Huntsville, Ala., said a couple of months ago.

The Sun perked up in June and July, with a sizeable clump of 20 sunspots earlier this month.

Now it is blank again, consistent with expectations that this solar cycle will be smaller and calmer, and the maximum of activity, expected to arrive in May 2013 will not be all that maximum.

For operators of satellites and power grids, that is good news. The same roiling magnetic fields that generate sunspot blotches also accelerate a devastating rain of particles that can overload and wreck electronic equipment in orbit or on Earth.

gothic alchemy

Science Alert | Stained glass windows that are painted with gold purify the air when they are lit up by sunlight, a team of Queensland University of Technology experts have discovered.

Associate Professor Zhu Huai Yong, from QUT's School of Physical and Chemical Sciences said that glaziers in medieval forges were the first nanotechnologists who produced colours with gold nanoparticles of different sizes.

Professor Zhu said numerous church windows across Europe were decorated with glass coloured in gold nanoparticles.

"For centuries people appreciated only the beautiful works of art, and long life of the colours, but little did they realise that these works of art are also, in modern language, photocatalytic air purifier with nanostructured gold catalyst," Professor Zhu said.

He said tiny particles of gold, energised by the sun, were able to destroy air-borne pollutants like volatile organic chemical (VOCs), which may often come from new furniture, carpets and paint in good condition.

"These VOCs create that 'new' smell as they are slowly released from walls and furniture, but they, along with methanol and carbon monoxide, are not good for your health, even in small amounts," he said.

"Gold, when in very small particles, becomes very active under sunlight.

"The electromagnetic field of the sunlight can couple with the oscillations of the electrons in the gold particles and creates a resonance.

"The magnetic field on the surface of the gold nanoparticles can be enhanced by up to hundred times, which breaks apart the pollutant molecules in the air."

Professor Zhu said the by-product was carbon dioxide, which was comparatively safe, particularly in the small amounts that would be created through this process.

He said the use of gold nanoparticles to drive chemical reactions opened up exciting possibilities for scientific research.

"This technology is solar-powered, and is very energy efficient, because only the particles of gold heat up," he said.

"In conventional chemical reactions, you heat up everything, which is a waste of energy.

"Once this technology can be applied to produce specialty chemicals at ambient temperature, it heralds significant changes in the economy and environmental impact of the chemical production.

peeling back pavement to expose watery havens

NYTimes | For half a century, a dark tunnel of crumbling concrete encased more than three miles of a placid stream bisecting this bustling city.

The waterway had been a centerpiece of Seoul since a king of the Choson Dynasty selected the new capital 600 years ago, enticed by the graceful meandering of the stream and its 23 tributaries. But in the industrial era after the Korean War, the stream, by then a rank open sewer, was entombed by pavement and forgotten beneath a lacework of elevated expressways as the city’s population swelled toward 10 million.

Today, after a $384 million recovery project, the stream, called Cheonggyecheon, is liberated from its dank sheath and burbles between reedy banks. Picnickers cool their bare feet in its filtered water, and carp swim in its tranquil pools.

The restoration of the Cheonggyecheon is part of an expanding environmental effort in cities around the world to “daylight” rivers and streams by peeling back pavement that was built to bolster commerce and serve automobile traffic decades ago.

In New York State, a long-stalled revival effort for Yonkers’s ailing downtown core that could break ground this fall includes a plan to re-expose 1,900 feet of the Saw Mill River, which currently runs through a giant flume that was laid beneath city streets in the 1920s.

Cities from Singapore to San Antonio have been resuscitating rivers and turning storm drains into streams. In Los Angeles, residents’ groups and some elected officials are looking anew at buried or concrete-lined creeks as assets instead of inconveniences, inspired partly by Seoul’s example.

economics and the american revolution

NYTimes | When Benjamin Franklin returned to America in 1762, after almost five years in London, he was shocked at the housing prices.

“The expence of living is greatly advanc’d in my absence,” he commented. “Rent of old houses, and value of lands ... are trebled in the past six years.”

Franklin, it seems, had come home to a real estate bubble. It eventually popped — bringing on a credit crunch and deep recession that was the macroeconomic backdrop to the American Revolution.

Sound familiar?

The parallels between the current economy and the one Franklin saw highlight a debate among historians: how big a role did economics, as opposed to ideas, play in fomenting revolution?

“I think there’s reason to doubt the Revolution would have happened as it did if it weren’t for these economic conditions,” said Ronald W. Michener, an economics professor at the University of Virginia, in a radical departure from today’s popular notion that the Revolution was a product primarily of grand ideas about self-government.

smart people are on top of this, right?!?!

financial ruin of the western world beckons

Telegraph | Events have already forced Premier Brian Cowen to carry out the harshest assault yet seen on the public services of a modern Western state. He has passed two emergency budgets to stop the deficit soaring to 15pc of GDP. They have not been enough. The expert An Bord Snip report said last week that Dublin must cut deeper, or risk a disastrous debt compound trap.

A further 17,000 state jobs must go (equal to 1.25m in the US), though unemployment is already 12pc and heading for 16pc next year.

Education must be cut 8pc. Scores of rural schools must close, and 6,900 teachers must go. "The attacks outlined in this report would represent an education disaster and light a short fuse on a social timebomb", said the Teachers Union of Ireland.

Nobody is spared. Social welfare payments must be cut 5pc, child benefit by 20pc. The Garda (police), already smarting from a 7pc pay cut, may have to buy their own uniforms. Hospital visits could cost £107 a day, etc, etc.

"Something has to give," said Professor Colm McCarthy, the report's author. "We're borrowing €400m (£345m) a week at a penalty interest."

No doubt Ireland has been the victim of a savagely tight monetary policy e_SEmD given its specific needs. But the deeper truth is that Britain, Spain, France, Germany, Italy, the US, and Japan are in varying states of fiscal ruin, and those tipping into demographic decline (unlike young Ireland) have an underlying cancer that is even more deadly. The West cannot support its gold-plated state structures from an aging workforce and depleted tax base.

As the International Monetary Fund made clear last week, Britain is lucky that markets have not yet imposed a "penalty interest" on British Gilts, given the trajectory of UK national debt – now vaulting towards 100pc of GDP – and the scandalous refusal of this Government to map out any path back to solvency.

"The UK has been getting the benefit of the doubt, both in the Government bond market and also the foreign exchange market. This benefit of the doubt is not going to last forever," said the Fund.

France and Italy have been less abject, but they began with higher borrowing needs. Italy's debt is expected to reach the danger level of 120pc next year, according to leaked Treasury documents. France's debt will near 90pc next year if President Nicolas Sarkozy goes ahead with his "Grand Emprunt", a fiscal blitz masquerading as investment.

why we must ration healthcare

NYTimes | You have advanced kidney cancer. It will kill you, probably in the next year or two. A drug called Sutent slows the spread of the cancer and may give you an extra six months, but at a cost of $54,000. Is a few more months worth that much?

If you can afford it, you probably would pay that much, or more, to live longer, even if your quality of life wasn’t going to be good. But suppose it’s not you with the cancer but a stranger covered by your health-insurance fund. If the insurer provides this man — and everyone else like him — with Sutent, your premiums will increase. Do you still think the drug is a good value? Suppose the treatment cost a million dollars. Would it be worth it then? Ten million? Is there any limit to how much you would want your insurer to pay for a drug that adds six months to someone’s life? If there is any point at which you say, “No, an extra six months isn’t worth that much,” then you think that health care should be rationed.

In the current U.S. debate over health care reform, “rationing” has become a dirty word. Meeting last month with five governors, President Obama urged them to avoid using the term, apparently for fear of evoking the hostile response that sank the Clintons’ attempt to achieve reform. In a Wall Street Journal op-ed published at the end of last year with the headline “Obama Will Ration Your Health Care,” Sally Pipes, C.E.O. of the conservative Pacific Research Institute, described how in Britain the national health service does not pay for drugs that are regarded as not offering good value for money, and added, “Americans will not put up with such limits, nor will our elected representatives.” And the Democratic chair of the Senate Finance Committee, Senator Max Baucus, told CNSNews in April, “There is no rationing of health care at all” in the proposed reform.

Remember the joke about the man who asks a woman if she would have sex with him for a million dollars? She reflects for a few moments and then answers that she would. “So,” he says, “would you have sex with me for $50?” Indignantly, she exclaims, “What kind of a woman do you think I am?” He replies: “We’ve already established that. Now we’re just haggling about the price.” The man’s response implies that if a woman will sell herself at any price, she is a prostitute. The way we regard rationing in health care seems to rest on a similar assumption, that it’s immoral to apply monetary considerations to saving lives — but is that stance tenable?

pandemic 2

Description: Customize your disease and wipe out the population!