PIM(P)

The summer is long gone – now it’s back to work and school. Monday we had the introduction to our courses this semester and it turns out that we have to turn a paper in by the end of October, and that this paper serves as an exam….dreary me. Oh well. It’s probably not any worse than macroeconomics or commerce legislation that I survived last year, so probably it’s going to work out just fine.

The course for this semester is called PIM(P?) a abbreviation to Problem identification, Information theory and Modeling. Quite honestly I think it’s going to be fine fiddling with lots of data and then use a variety of applications to get hold of your information flow, in order to produce a model that fits like a glove to the specific task. On the other hand I thought that I was done with regression analysis etc. but no.

....so no more going out until June next year, instead I’ll use my non-CBS time on my Cannondale – more of that at a later time.

/C

Who will be the next power; BRIC? EU? Santa Clause?

Currently we’re experiencing a financial crisis that nobody has been able to fully comprehend yet. This post isn’t related to what caused the problems (to low interests rates from the federal banks, derivate debt products, subprime mortgage etc.) but rather a speculation of what is next.

In my opinion Fareed Zaakarias book “The Post American World” is highly recommendable on this subject, but he fails to see the real issue here. In the sixth chapter of the book he claims that the main (or at least one of the main reasons) the American dominant era is coming to an end, is the open-ended engagement in Iraq (and Afghanistan) and this is costing the US its freedom of maneuverability. Now it’s important to remember that this work was finalized by the end of 2007 and published in May 2008 i.e. several months before the financial crises really caught on in September 2008. Rather than being the military evolvement that broke/drained the treasury of the US it was (is?) the financial crisis. After this crises first became a world market event governments, including The congress and The White House, around the world have poured gazillions of cash (€£$) into public spending, in order to keep the unemployment rate constant, or at least avoid that it exploded, but sometime soon the governments are going to run out of cash. When this happens then we’ll have the collapse, since consumers still are holding back on their private spending thus private company’s cannot grow their enterprise and we’ll eventually get a long time rescission, unless…..

Fareed Zaakarias assumes that the 21^st century will belong to the newcomers, or at least that the US will have to consult with other states, Brazil, Russia, India, China etc. and act multilaterally rather than unilaterally. Say for moment that we accept the thesis above, and expect the US to run out of cash it can throw into government spending programs by mid 2010. Now the US is hamstrung by its debt, especially to China, and even China on the other hand will have no interest what so ever in forcing the US to repay its loan prior to schedule due to risk of having to deal with a hostile President and/or Congress, and what might be.

One of the key factors to the non-western economical growth over the last 2 decades has been (is) the access to a sort of stable energy supply (oil, gas etc.), the reality that Russia wasn’t a factor, the only superpower left was the US and access to loans with exceptionally low interest rates. Now all of this is changing rapidly. Russia is resurgent, or tough only due to the massive demand for Oil and Gas thus trying to regain its previous super-power status, due to demands especially in China and India energy prices will rice. The possibility to be authorized for a low interest loan is unlikely, so this is where the EU should make its case. I won’t for a second argue that governments should direct research into specific areas but I’d like to see an overall effort to reduce the dependence of fossil energy inside the EU by say 50 % over the next generation i.e. 30 years. What will this accomplish? Most likely universities & business schools in partnerships or while competing with existing companies, will improve and re-think how we think of energy. The BRIC countries have to experiencing the same learning curve that have been creeping up on the west over the next generation, and then the energy alternatives are ready for mass distribution.

Devil’s advocate:

Won’t the non-western countries develop and discover the above themselves? Probably not. One main advantage kept by higher learning institutes in the west, is that when students enrolls on courses they have a sense of critique to the established consensus, whether it’s nature science, economics, philosophy etc. they want to challenge the sitting establishment and somehow I don’t think that’s the way to achieve a meaningful relationship with the rulers for example in China? But I might be mistaken…..

We have enough.

Most of the citizens in Western Europe have a home, a flat, either a rented or an owned. Most families have a small house, a terraced house or larger flat. Their kids go to school the majority of them can get meaningful employment. They have either tax paid health and medi care or through an insurance. I know that there are some areas where thing can get better – there always will be, but shouldn’t we, the west, be able to say that we did something when the end of history and the last man arrived (Fukuyama) rather than just see the western lifestyle burn in the fire of decadence of massive over consumption?

I hope that this crisis will act as a much needed wakeup call to the European Union whom I think and hope will seize the moment an become a world power.

……just some random thoughts from the balcony this lovely summer night.

/C