Syria and Iran
(Some background)

     Throughout the First World War, assuming the eventual defeat of the Ottoman Empire, the allies planned the carving up of the Middle East. France was planning to claim control over Syria (a claim they dated back to the crusades), leaving 'Palestine' and 'Mesopotamia' (now Iraq) to the British. At the post-war peace conference at Versailles, the Syrian Arabs were given (at the urging or TE Lawrence and others) some autonomy as a reward for their military involvement; by popular acclaim they chose their war hero Faisal I to be their king. However, within months, Faisal's regime ran into money troubles, the French declared they would rule Syria. King Faisal was expelled and went to live in England. The following year (1921), the British decided to foist King Faisal on their mandate in Mesopotamia, creating the kingdom of Iraq with Faisal as king. Faisal (supple, enlightened, and popular) ruled quite successfully until 1933, though his dependence on Britain placed an intolerable burden on him, for his people strongly resented Western interference. He died of a heart attack (or poison) in 1933. His son Ghazi, and his grandson Faisal II, both fared worse. Ghazi was killed in a car 'accident' in 1939, while Faisal II was shot with all his family in 1958, victims of the rising tide of Arab nationalism. Since then Iraq has been a republic. In Syria, the French mandate ended in 1946. Syria became a parliamentary republic but subject to incessant coups d'état until the Ba'ath party took control of the country in 1966. In 1970 the Assad family took control of the Ba'ath party, on behalf of the 'military'. 

     The Ba'ath party was founded in Syria in 1947 jointly by two teachers, an orthodox Christian (Aflaq) and a Suni Muslim (al-Bitar), both Arab, both educated in Paris in the late nineteen twenties where they absorbed ideas on nationalism and Marxism. Its motto became "Unity, Liberty, Socialism", the unity referring to Pan-Arabism. Under this influence, Syria fused with Egypt to form the United Arab Republic (UAR) in 1958, a union which lasted till 1961. Party branches existed in most Arab countries from the Maghreb to the Gulf, but Iraq was the only country besides Syria and Egypt where the Ba'ath were in power. In each national branch there was a political wing and a military wing. Though initially the Iraqi branch contained a majority of Shia Muslims, Pan-Arabism is more a Suni concept and the branch became predominantly Suni. In February 1962 the Iraq branch staged a coup d'état, but in November of the same year were driven underground by a reactionary coup. During their hidden period (1963 – 68) the Iraqi Ba'athists purged Nasserite and socialist concepts, and developed a secret security apparatus (answering to Saddam Hussein) to counter the power of the military wing.

     The story of oil exploitation is a strange mixture of commerce and Realpolitik, of respect for commercial contract law, and the blatant flouting of it. USA found oil in Texas in 1901. The British found oil in Iran in 1908 and created the Anglo-Persian Oil Company (APOC) to exploit it. In 1913, just before the outbreak of the First World War, Churchill switched the British Navy from coal to oil so the British war effort was totally dependent on oil. The British government acquired a controlling share in APOC, and this enormous injection of capital allowed it to acquire rights and access to outlets all over the world. BP (British Petroleum) started life as a exporting branch of a German company operating in Britain. Their assets were acquired by Britain during the war. Exploitation of Iraqi oil began in 1912 with APOC capital and the drive of an Armenian Turk called Gulbenkian, born in Constantinople but who fled with his family after the Armenian massacres of 1896, eventually becoming as a British citizen. The Iraqi oil deposits turned out (October 1926) to be large and a composite company was formed by a number of major European and American oil companies, registered in London and designed to make no profit (and pay no tax!), but to sell its oil at cost price to the component companies. Iraq received royalties. The British suggested that the Iraqi government be allowed to buy shares, but other parties seem to have successfully prevented that. After the Second World War, nationalist movements in Iran and Iraq were pressing for ownership of their own oil. British oil interests in Iraq were nationalized by the Ba'athist Iraqi government in June 1972. 

     (The assets of the Anglo-Iranian Oil Company were nationalized in 1951. Britain appealed to the International court for restoration, but the case was dismissed, whereupon MI6 with CIA help engineered a putsch that ousted the nationalist prime minister (Mossadeq) and strengthened the westward-leaning Shah, who survived until the revolution of 1979.  From 1953 till 1979 BP extracted and marketed the oil on behalf of the National Iranian Oil Company sharing 50% of the profit, but did not let Iran see the accounts! In 1979 all foreign oil assets in Iran were confiscated by the revolutionary government.)

     The Ottomans were not popular 'overlords' in the middle east because no one likes to be a subject people. But at least they were Islamic. And in fact they were peculiarly successful at governing countries of mixed ethnicity and religion; Jews, Muslims (Shia, Suni), Christians (Orthodox, Roman, Nestorian), lived together in peaceful co-existence equally in Turkey,  Arabia, and the Balkans, Constantinople, Damascus, and Sarajevo.) The history of British, French and American intervention has not proved so successful.   

Ebola Screening

Ebola Screening
(The need for education)

The World Health Organization (WHO) data show that the Ebola epidemic is spreading exponentially in West Africa. Using WHO data (reported in Wikipedia) it can be seen that the total number of cases shows a doubling time of 29 days (t_x2 of deaths is 30 days).

Containment and education

This rate has remained depressingly steady from 1st May till the last week in September, showing that essentially nothing was learnt about containment (protection, how to handle the cases, and the corpses) between May and 25^th Sept. If the present doubling time remains steady it means the 7,492 cases on 1st Oct would become 14,984 by 29th Oct (the 3439 deaths would become 6878 deaths by 30th Oct). And that would imply that we have still learnt nothing about containment.

Education must be speeded up. New methods of handling infected material must be evolved (e.g. perhaps remote handling machinery would be more effective than rubber gloves which are presumably removed at mealtimes). New social and religious practices regarding disposal must be worked out and inculcated.

Please tell us all, in simple words in large letters on a A5 poster, how to avoid infection; and what to do with suspected cases. Everyone in Sierra Leone should know these instructions by now.

Screening and tracking

The small amount of anecdotal evidence available in the press suggests that the delay between irreversible infection and overt symptom of fever (the incubation period) is well over 2 weeks and may be 3 weeks. This means that screening at point of boarding and leaving a plane will do very (very) little to prevent the spread of the disease from West Africa. However, as it is very easy to do, it might as well be done. (We did this with SARS in Taiwan in 2003; on entering any public building or aeroplane we filed past a remote thermosensor.)

However, what seems absolutely vital is that the whereabouts of every person leaving an infected area be known and tracked for 28 days. It is essentially pointless to take the temperature on entry into Britain if we then lose the traveller into the population.

Lost warriors of the 'Islamic State'

Lost warriors of the 'Islamic State'
The young warriors who have gathered in the desert to proclaim an
Islamic State, a Caliphate, seem to have got lost. They seem to have
turned away from Allah and the teachings of Muhammad.
Is not Allah Merciful? [Al-Qur'an 4:25; "And Allah is Oft-Forgiving,
Most Merciful."][Al-Qur'an 5:74; "..And Allah is Forgiving and
Merciful."]
Is not Allah Just? [Al-Qur'an 4:40; "Allah is never unjust in the
least degree".]
It therefore seems that the warriors of the so-called Islamic state
have turned away from Islam towards injustice and brutality.
If they die they will not die as martyrs. It does seem that their
victims are nearer to heaven than they.
If any warrior wishes to experience the Mercy of Allah it would be
well for him to seek out an Imam and beg him to teach them the way.
----
Cawstein, Morpeth

"Islamic State" and the present bombing spree

Hear here!
Major General Jonathan Shaw, the only sane voice that I have heard on
IS and the present bombing spree.
Listen 6min 20 sec into the following link.
http://www.bbc.co.uk/programmes/p027gp8k

This is "a battle for the soul of Islam", and it should be left to
them. The involvement of the West is a distraction, a distortion, and
is counter productive.
(Is not democracy a "government of the people by the people for the
people"? )

Some people think of the middle east as an 'oil-rich' area, the source
of much of OUR oil. They forget that it is the homeland of millions of
people who have opted for a way of life and a religion that is
different from ours. Some think our 'homeland security' requires us to
invade their homeland. Golly!
--
Ian West
12 Longhirst Village,
MORPETH, NE61 3LT, UK
Tel: 01670 791880

Index to Economy Posts

Annotated Index to Blog Postings

Economy

[21]  Monetarism 2— Keynesianism probably does cause Stagflation; but its purpose is to stabilize the labour market, not to stabilize the currency 

[20]  Monetarism 1— I read with sympathy the efforts of the Austrian/Chicago school of economics to preserve the inexorable logic and simplicity of their discipline, and to defend its relevance. But I cannot help them.

[19]  Keynes2 — With delight I spot the problem of having rich people living amongst us, or one extra problem; they sequester too much of the global money so that is does not circulate properly.

[18] Keynes1 — Keynes's 'General Theory' is an exciting but frustrating read. This seems generally conceded. I focus on the concept of the 'involuntarily unemployed'.

[17] Interest Rates — trying to follow Gerardo Coco on the Cobden Centre website. Is the essence of his point that no one interest rate will meet all the needs of this 'indicator'. Which is (presumably) why there are lots of interest rates.

[16] How bad is debt? — Bad for some, good for others. Do we therefore monitor or regulate?

[15] Payday Loans — Here I revive an old idea; that high rates of interest may be justified to cover risk, but once the principal is paid, the risk vanishes, and the entire period of the debt reverts to minimal rate of interest. Usury. Shylock. Contracts made under duress.

[14] The Big Six Power Companies — Power companies make a lot of money. On the continent they pay big dividends, in the UK tiny dividends, but they grow!

[13] Winter Fuel Payments — voluntary taxes are a bad idea. Anyway, the better-off do pay for their own fuel and for that of the less well off as well. Silly!

[12] Alcohol Duty and Minimum Price — Our government seem to have bodged that issue (reccommended by experts). Tax rates are a tangle. Seems to me the Scandinavians have the edge on us (again).

[11] The Money Masters & Positive Money — The "Money Masters" is a polemic against bankers. 'Positive Money' is a pressure group against bankers.

[10] Positive Money 2 — 'Positive Money' advocates a real Ring fence; but their suggestions seem to me to be unrealistic. Danish banks score better than ours in regard to clarity; and Danish pensions yield 50% more per 1£ invested. Connection?

[9] Interest and Usuary — First statement of my modification of the way interest is calculated. Is it essentially "Islamic Banking"?

[8] Centrica's Profit — The shareholders seem to think their dividends will go up with a rise in the cost of feedstock. That is funny! Are customers being taken for a ride?

[7] Pre-distribution — This sees 'worker participation' or 'Mitbestimmung' as in Germany and Sweden as the way to reconcile capital and labour.

[6] CPI or RPI — There are two 'cost of living' indices. Why do they differ, and which is better?    

[5] Deficit Spending 2  — I try to decide whether we should clamour for more government spending to tackle the recession. Not convinced at this stage (mid 2012).

[4] Taxation of the Wealthy  — What exactly is bad (for the country) about having wealthy people, and why must they be heavily taxed? 

Monetarism 2

Monetarism 2: Keynesianism and Stagflation

John Butler's recent post on the Cobden Centre website [1]  cogently argues that "Stagflation is, always and everywhere, a Keynesian phenomenon", but to some extent his piece follows in the vein of Punch and Judy argy-bargy between Keynesians and Monetarists that has yanked the truth back and forth across the stage these last 4 or more decades. 

Of course politicians were happy to blame OPEC for the fourfold rise in the dollar price of oil in 1973 following the OPEC oil-embargo. John Butler calls this a "blatant reversal of cause and effect" because in the same year the USA abandoned the Bretton Woods/Smithsonian price of gold at 38$ per ounce and let the dollar float down by a factor of 2 (albeit to float down further by the end of the decade). In my view there were two causes of the oil-price rise in 1973: OPEC power and dollar weakness. One is no more "blatant" than the other.

It seems to me that John Butler is largely right that "Stagflation is, always and everywhere, a Keynesian phenomenon", but this misses the point somewhat. Keynesianism is not a method for stabilizing the value of the currency; it is a method of stabilizing the labour market. Of course the injection of money into the system will devalue the currency (unless it is subsequently withdrawn). And of course soaring unemployment of 10, 20 or 50% will bring down labour costs (unless there is a foolproof benefit system).

It all depends on what sort of country you want to live in.

Reference: [1] http://www.cobdencentre.org/2014/08/

Cawstein
cawstein@gmail.com

Monetarism 1

Monetarism

The changed brief of the central banks makes monetarism obsolete?

 

In 1923, hyperinflation in Weimar Germany [1] was caused by the central government printing money to pay for its obligations to employees and millions of striking workers in the Ruhr. The absurdity of this was (surely) obvious to all. The so-called Austrian School of economics [2] arose based on the apparently inexorable link between an increase in the quantity of money and the decrease in its value.  At that level it was satisfyingly faultless, irrefragable, unassailable, for it was a priori [3].

But what is money? In the twenties and thirties the definition was relatively simple: it meant notes-and-coin. That is to say, the unlimited production of notes-and-coin soon swamped everything else. Over the subsequent decades innovations in banking have made the definition fuzzy and obscure. But obscure because fuzzy. It has become hard to define what should count as money in the context of the monetarist formula because different assets can have different roles depending on time-scales, and personal psychology. Is the money in my current account mine or the bank's? What about in my deposit account, or my 90-day account? Is an asset like a house to be included? No? But what if I sell the house and spend the proceeds? What if I merely think I could sell the house? What if I can sell the house but think I cannot?  Quantitative Easing in the USA and Europe since 2008 has seen a dramatic increase in the  Monetary Base (which on existing theories should have caused an even more dramatic increase in commercial activity), but there has been no sign of concomitant inflation, and surprisingly little effect on employment.

The Austrian School is in trouble. People now spend days and weeks researching and writing papers to define money in such as way that the Austrian School's formula can be shown to be valid. (This problem is thoroughly aired in reference [4].)  Gone is the certainty of the a priori. A fuzzy definition brings in judgments, and fuzzy answers. If money is in short supply, it is not spent; but the reverse is not equally true; money does not have to be spent simply because it is there. Humans are as much emotional as logical.

The Austrian School is in trouble, but worse is to come. It is the duty of Central Banks to maintain: [a] maximum employment, [b] stable prices (including prevention of either inflation or deflation), and [c] moderate long-term interest rates (insofar as it is possible to reconcile those three different aims) [5]. They are not required to maintain a constant supply of money as such. Many years ago it became clear that it was necessary to release more money in mid-December when it is needed, and withdraw it again in mid-January when it is idle. Money is now created when it is needed. If you want to predict inflation, do not look at the money supply, look at inflation; for that is what the Bank of England is doing (or should be doing***). If money supply (however calculated, M₀, M₂, M₄, M_A, M_Aex, etc), is not a leading but a lagging indicator, there is no point in monitoring it. Nothing will be learned from it that could not be learned earlier by looking at the triple target of the Central Banks, viz employment, prices and interest rates. (The only gain will be for the 'Austrians' themselves if they finally find the right measure of the Money Supply; they will then be able to say they were right all along.)

(*** Of course people make mistakes. House prices in South East England are inflating steeply. So let us build lots more houses, in North East England where there is unemployment and plenty spare land. "Oh! Sorry! Now you tell me that house prices are falling in the North East. Wish you had told me earlier!")

Cawstein, Morpeth, U.K.

References:

[1] http://www.historylearningsite.co.uk/hyperinflation_weimar_germany.htm

[2] http://en.wikipedia.org/wiki/Austrian_School

[3] http://detlevschlichter.com/2014/05/the-a-priori-method-in-economics-in-defence-of-ludwig-von-mises-essay/

[4] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2446812

[5] http://en.wikipedia.org/wiki/Federal_Reserve_System

 

 

Keynes2

Keynes2

Government of the People, by the Rich, for the Rich?

There is, I think, no disagreement that we are currently governed by the rich; and there can be little disagreement that it is for the rich. There may, however, be some division of opinion on the advantages for the bulk of the population of being so governed. I am going to argue that being governed for the rich is disastrous for the country, and that, given the force of natural prejudice, being governed by the rich (so for the rich) is also against the common interest. I should like to see a revival of the Common Wealth Party (q.v.)

The marginal propensity to consume.

JM Keynes, in "The General Theory of Employment, Interest and Money" (1936), discusses (among other things) our 'marginal propensity to consume', which can be visualised thus: If you give £100 to each person in the country, some would spend £99 (and doubtless buy a lottery ticket with the change), some would spend £50 and save the remainder and others would scarcely notice the gift. These would represent 'marginal propensities to consume' of 0.99, 0.5, and 0.001 respectively. Keynes points out that, in general, poor people tend to consume a large part of their income, and the rich tend to save (or invest) a large part.

         In Britain during the last two or three decades we have seen a marked increase in the gap between the very rich and the very poor. Worse still, we are seeing an ever larger fraction of GDP going into the hands of well-off people. This would be galling enough if the well-off spent that money; but at least then it would cascade down the social scale, and the makers of smart cars, their chauffeurs, their petrol-pump attendants and their skivvies would all benefit. But if the rich merely sit on their money (or lend it out at interest, or use it to buy out competitors) it is very damaging to the economy; the country goes into recession; we all sit around waiting for signs of recovery, from someone else. We need the 'multiplier' effect. In the classical phrase "supply creates its own demand"; meaning that, in aggregate, everything that is sold has to be bought; and buyers must sell something if they are to be able to buy.

         I am not crying for astronomical rates of income tax. Nor is this an anti-business agenda. Indeed it is a pro-business agenda, because it is arguing for the importance of markets for enterprises. But it is indeed an anti-rich agenda. The money has to be recirculated somehow. If they are smart, the rich will spend it and enjoy it. Otherwise it has to be taken off them by some means or other; by VAT, by domestic rates on large properties (whether lived in or not), and finally, if any remains, when they die. (Rich sons are not noted for their enterprise.)

         Unless you are yourself significantly wealthy you should not vote for the party of private wealth.

Blog1:http://occidentis.blogspot.com/
Blog2:https://ianwest2.wordpress.com/
Blog3:http://cawstein.blogspot.com/

Keynes1

The difficulty of Keynes's Style

While greatly admiring the clarity and confidence of Keynes's thinking I am very critical of the obscurity of his style and the impediment that raises to a close reading of his important book: John Maynard Keynes* (1936), "The General Theory of Employment, Interest and Money" (readable online). Take (for example) the following from chapter 8.

"Since we are here concerned in determining what sum will be spent on consumption when employment is at a given level, we should, strictly speaking, consider the function which relates the former quantity (C) to the latter (N)."

The 'here' is mere pedantry. And the definitions of C and N are unnecessarily delayed. Given that, in English grammar, 'which' describes while 'that' defines, I conclude that JMK has a tendency to confuse the two. So try:

Since we are concerned in determining what sum will be spent on consumption (C) when employment (N) is at a given level, we should, strictly speaking, consider the function that relates the two.

Another example of the that/which problem (from chapter 2):

"....; whereas they do not resist reductions of real wages, which (that) are associated with increases in aggregate employment and leave relative money-wages unchanged, unless the reduction proceeds so far as to threaten a reduction of the real wage below the marginal disutility of the existing volume of employment."

I submit that not all reductions of real wages are of the sort described, so the 2^nd clause is a 'definition', a necessary limitation, and not a 'description'.

Take that obscure but important of definitions in Chapter 2 — that of "involuntary unemployment". Unless you understand this you do not understand Keynes:

"Men are involuntarily unemployed if, in the event of a small rise in the price of wage-goods relatively to the money-wage, both the aggregate supply of labour willing to work for the current money-wage and the aggregate demand for it at that wage would be greater than the existing volume of employment. "

Keynes's "would be" throws me, as it flouts the Humpty-Dumpty rule on conditionals ('If the number were greater the men would be unemployed'). Which men? No-one has been sacked, so are we talking about men currently idle by choice, who wish to become employed because of a rise in real prices, but who cannot find a job (except at a wage below the current)? (I do not see the force of this. Will not the classical school say that there is nothing to stop these men taking a lower wage (unless it be collective bargaining)?) What is the 'aggregate demand for labour'? Does Keynes mean that the entrepreneurs are seeking workers? So, why does not the 'existing volume of employment' increase if there is both rising demand and supply? Are we merely talking about a time lag; the supply and demand for labour go up, but the jobs do not appear immediately? However, we all know that there are people seeking work during a 'depression', and we suspect it is because the entrepreneurs do not see a market for further product.

I find (to my amusement) that people write books* about this important concept of the 'involuntarily unemployed', and the obscurity of Keynes's writing.

References:

1.  John Maynard Keynes (1936), "The General Theory of Employment, Interest and Money"

2.  G. L. S. Shackle (1983) The Years of High Theory: Invention and Tradition in Economic Thought 1926-1939.

--
Blog1:http://occidentis.blogspot.com/
Blog2:https://ianwest2.wordpress.com/
Blog3:http://cawstein.blogspot.com/

Interest Rates

I have been trying to follow the argument of Gerardo Coco in his interesting, but confusing, piece posted on the Cobden Centre website. I wonder if I have got the gist of his argument in the two short paragraphs below. 

Interest rates have to play several different roles.

(1) The first role that springs to mind is that of indicating the price of credit; interest being a regular (e.g. annual) fee paid to the lender for the temporary use of his capital. This capital may be invested in a productive investment, to buy tools, or a mill, or an extra field. A rational investor will pay no more in interest than he can gain (per annum) from his investment. Good times will allow interest rates to rise, and conversely bad times will hold interest rates down.

(2) For some people liquidity is the problem; they want cash in hand, not to invest, but to pay the bills. Their desperation will determine the upper limit of the interest rate they will pay. Let us call this process of turning credit into cash 'discounting'.

(3) People have grown to expect money to breed, to yield an annual income. The relationship between capital and income is of course the interest rate. There is a backwards way of thinking which says "My assets yield £100 a year; interest rate is 1%; so my assets are worth £10,000."  If interest rates were 5% I would value my assets at a mere £2,000. A form of this argument may be driving up current house prices; "My house is worth £300,000 and I can afford a mortgage (at 6%) costing £18,000 per annum. If mortgage rates drop to 3% I can sell my house for twice as much."

(4)  Central banks use their 'base rate' as a means (essentially their only means) of controlling the money supply, and with it the 'growth of the economy', 'unemployment', and 'inflation'.

It is hard for a single 'Interest Rate' to fulfill all the roles required of it. It is true that Bank Base Rate does not impinge directly on the high street borrower, for the normal citizen cannot borrow money at the present comically low rate of 0.5%. But it remains a problem that a lender does not always know to whom he is lending and for what purpose. If Central Banks set a very low interest rate, some entrepreneurs may borrow money (as it is so cheap); but others will conclude that 'times are bad' for investing and consequently will wait for better times. The Bank's one available signal of Bank Base Rate can have a damaging effect while trying to have a stimulatory effect.

How bad is debt?

Debt 6 —  How bad is debt?

"Neither a borrower nor a lender be; for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry." Hamlet 1.3

These words have found resonnance in puritan heads from Shakespeare till the last part of the 20^th century. Polonius could have said more against borrowing. A debtor who is unable to repay his debts finds himself at a considerable disadvantage; he may lose his liberty, or his house, or find himself tied to a tredmill, paying interest he can ill afford without hope of escape. Furthermore, Polonius mentioned none of the advantages of debt.

Is debt, in general, a good thing or a bad thing?

Well, it is a good thing for the lenders who can expect a return on their capital of 2 or more % above inflation, even if their loans are of the non productive sort.  And it is a good thing for the entrepreneur who is trying to expand a winning business model (productive borrowing). But it is a bad thing for the "over indebted". Citizens Advice Bureaux (CAB) estimate that keeping up with bills and other financial commitments is a burden (or worse) for nine per cent of the population [2].

But the 90% who can manage their affairs intelligently can freely choose to enjoy a house and a car while they are young and pay as they get older. Inflation will considerably mitigate the amount they lose in interest payments. If they come on hard times they could lose their house; but end where they started, little the worse.  Many young people nowadays will take thought, and borrow. The case will depend on: [a] rate of inflation, [b] stability of the jobs market; but can be skewed by governmental tamperings  such as [c] capital gains legislation, [d] income tax relief, etc. Another factor is [e] temperament; cautious individuals will overestimate the chance of losing their job while the reckless will underestimate that.

Since 1975 the household debt as a fraction of annual disposable income rose in most western countries; in the UK it almost trebled  from 0.64 in 1975 to a peak in 2008 of 1.80, from which it has sunk in 2012 to 1.55 [1] We are more deeply indebted than the US, but trail Denmark, Norway and Switzerland. Since 2000, Germany has almost halved its debt/income ratio, while most other countries have only reduced personal debt in the last 5 years. One suspects that these data reflect a spectrum of several underlying factors: caution, stability, cost of the housing stock, age distribution of the population.

 (Unscrupulous lending (offering money to someone unable to calculate the consequences) is a social evil, like drunkenness, and should be subject to social and even legal regulation. Predatory lending (where a secured loan is offered in the hope that it cannot be repaid so that the lender can acquire the security) would be criminal were it possible to prove.)

Though it goes against my gut feeling to let myself be beholden in that way, I conclude that there is little case against debt if it is entered into with due thought, but that it should not be encouraged by the state (to the benefit of the bankers and to the detriment of the economy and society generally. Furthermore, there should be closer scrutiny, and better means of regulation and redress.

Ref.1: http://www.zerohedge.com/news/2013-06-04/debt-nations

Ref.2: http://www.citizensadvice.org.uk/pdf_the_value_of_debt_advice.pdf

 

Ian West, 12 Longhirst Village, NE61 3LT

Payday Loans

Payday Loans

I believe that it would be socially beneficial if the rapacious activity of the payday loan industry could be reined in. Though it is possible to argue that these companies serve a useful, even a necessary, purpose, it is nevertheless clear that it is only the desperate (or the foolish) who use the loans. Meanwhile the general public wince at the extortionate rates of interest; it is painful to watch; it seem no less brutal than trussing a weak man and pulling out his toenails. But the evil goes further. The near indigent find themselves on a downward spiral of debt from which there is no (legal) escape.

My remedy is fair, logical, and (with a stroke of the legislative pen) could be made legal. It is not hyper-novel as it enshrines a principle accepted in most civilisations from Roman times till the modern barbarism of the capitalist era; the distinction between usury and capitalism.

As soon as the accumulated interest paid on a loan equals the amount borrowed, the loan should be regarded as discharged. A low interest rate (say,  inflation plus 1%) should then replace the original high rate, but calculated back to the beginning of the loan. 

It can be argued that a high rate of interest is justified if there is a high risk that the principal will not be repaid. That cannot be argued as soon as the borrowed sum has been repaid. Suppose I borrow £100 at 10% per month interest. If I pay the lender £10 a month and keep up the payments for 10 months, the loan company will say that I still owe £100, as I have only been paying the interest. But I will have paid £100, and to my way of looking at it I will have repaid the loan, but not yet the interest. It cannot be argued that I am a high risk, so the due interest should be a trivial £5 (if 5% p.a. Is appropriate).

Ian West, 12 Longhirst Village, NE61 3LT

Statins and Cholesterol

I have now read right through the Stephanie Seneff (2011) essay to the end. Very anti-statin, and full of challenges. But I have also just heard (25th Feb, 2014) Professor Ian Young, (Director of the Centre for Public Health, Queen's University Belfast) give the Albert Latner lecture at Newcastle University on "My cholesterol -- why is it so high?"; very pro-statin and a most frustrating affair.  I shall comment first on Ian Young.

The man presented no chink of doubt. We must all take statins from infancy up. He kept saying that a 1mM (mmol total cholesterol per litre blood) drop in total cholesterol causes a 25% lowering of risk of vascular event; but, while his curves showed a steep line of correlation for 40 year olds, it was an almost flat line for 80 years. (So for me there is practically no benefit).

In no case was the vertical axis on any of his graphs 'General health'; he was only talking about 'Rate (or risk) of vascular event'. To a hammer everything looks like a nail and to a cardiologist the object is to lower risk of a 'vascular event'. What about the adverse side-effects; the muscle pains, and increased risk of diabetes (both of which Young conceded), Alzheimer's, ALS, and Parkinson's (which were mentioned by Stephanie Seneff)?

Cholesterol is essential. Ian Young correctly remarked that blocking the synthetic pathway at HMGCoA synthase (as statins do) will indeed cause a shortage of cholesterol and lead to scavenging pathways and the relocation of existing cholesterol. If the scavenged cholesterol is from coronary plaques, well-and-good; but what if it is in brain myelin or muscle cell membranes (as emphasised by Stephanie Seneff)? And what about ubiquinone and dolicol, which are also essential and also on the pathway blocked by statins  (as emphasised by Stephanie Seneff )? If there ARE INDEED adverse side effects of statins it is easy to see why!

So the clinical debate should be about the side effects versus benefits. I heard a paper in a Glasgow Heart meeting in the late 1990s  which concluded that for over 40 year olds (or over 50) the OVERALL benefits of statins do not outweigh the OVERALL damage. I was impressed (staggered, indeed) at the failure of the clinical cardiologists to see that this trumped the (undenied) fact that statins lower cardiovascular risk.

I am certainly not going to take statins. I do not feel I need them. And whether or not I should lower blood cholesterol there is something too utterly daft about poisoning myself at great expense in order to achieve that; and simply to switch from a healthy death from a coronary to a lingering death from mental, muscular and neurological decay. If I were under 40 and had familial hypercholesterolaemia, I think I would try diet, red-wine, and niacin (e.g. brewer's yeast) before I tried statins. (There are many types of familial hypercholesterolaemia; the most common by a factor of 2 is a defective LDL-receptor, which presumably hoicks LDL particles out of the circulation and into some (presumably) removal pathway.

Professor Ian Young talked away about nuts, expensive margarine, salt, exercise, the 'J'-curve for alcohol, etc. But he conceded that only 10% of our cholesterol comes from diet. So, surely the question is why do we MAKE too much? What regulates the synthetic pathway? [**]  Does alcohol in excess of 2 units per day, or smoking, etc, up-regulate the synthetic pathway, or affect the partitioning between pools of cholesterol, e;g; by enhancing oxidative damage. What is the rôle of lipid oxidation (briefly mentioned by Young)?   [** My colleague Loranne Agius suggests that excess carbohydrate feeds into fat production in the liver which requires cholesterol for its excretion]

Young pointed out that HDL-cholesterol is "good"; that low 'cardiovascular risk' correlates with higher HDL (in the 1 - 2 mM range, independently of LDL or total Ch.); in fact high HDL-Ch is 10-fold healthier than low HDL-Ch (while low LDL-Ch is only 3 times healthier than high); the best predictor of heart disease is therefore the ratio LDL/HDL, the next best is HDL, the least good is LDL or total blood cholesterol. So, what determines partitioning between the various 'pools' of cholesterol: HDL, LDL, its 'locus operandi' (where it is needed, in muscle and nerve membranes), and its 'locus morbidus' (i.e. coronary plaques where it is not wanted - we suppose)?  What is the rôle of lipid oxidation (briefly mentioned by Young) in affecting the partitioning?  Presumably the HDL particle is picking up and re-locating cholesterol and is wholly good. But it is HDL-cholesterol that is measured, so we do not know if the HDL is largely unloaded or nearly full; the latter giving the impression of plenty of HDL particle, but actually being nearly useless as a scavenger. There is a route for elimination of lipid, lipid-cholesterol-ester and cholesterol which involves liver, bile and gut. Guessing here, and maybe naively, but is it damaged (e.g. oxidized) fat/cholesterol that is eliminated, rather than merely surplus?   So many unanswered questions.

Perhaps the coronary plaques are, in a wider sense, beneficial. After all, they protect us against Alzheimer's disease, and a lingering death! What are the evolutionary benefits (to the genes) of surviving beyond age 70?  They must be very small and may be negative; a little 'grandparenting', and 'advice' (perhaps), but is that sufficient to pay for the food and space?

Coming to Stephanie Seneff (2011), I believe this contains errors, and her fundamental technique is strange and (I suspect) fallible; that of looking at a bunch of statin-based and non-statin-based reviews and counting in each the incidence of words like 'dementia'. If 'Statin' reviews mention dementia, that does not necessarily mean that Statins cause dementia. What if statins PROTECT against dementia, or the paper says STATIN DOES NOT CAUSE dementia, while on the other hand diuretic pharmacologists may focus on salt balance and blood volume, even it their drugs do actually cause hallucinations. I do not follow Seneff's argument about lactate and acidosis; splitting ATP to ADP and Pi generates H+, but there is 10 - 100 times as much lactic acid synthesized as ATP split (and ATP is resynthesised while lactate accumulates). I think she has the oxidation of cholesterol-sulphate to cholesterol-sulphide wrong, for that is surely a reduction, and I have never heard of there being any useful energy available from that. (Indeed, I had not heard about cholesterol-sulphate or cholesterol-sulphide.) But she is right about cholesterol being needed. And statins being toxic. Is she right about statins causing raised fructose, or dementia, or ALS, etc? That needs checking, not dismissing.

But I am no expert.
Ian West,  (12 Longhirst Village, MORPETH, NE61 3LT)

Re: Your Amazon.co.uk Enquiry

Dear Jason,

You have been very helpful. However, I shall still warn everyone I
know to beware of "Amazon Prime". I found a page on your website which
said "click this button to begin a 30 day free trial". It DID NOT say
that I would automatically upgrade to a paying member after 30 days.
And in any case I DID NOT PRESS that button. Furthermore, I looked at
all three emails from Amazon sent on 13th Jan and NONE of them say
anything about Amazon Prime, let alone automatic conversion to full
Fee Paying Membership after 30 days.

I may well have opted for "1 day delivery and free 30 day trial of
Amazon Prime", thinking that it was indeed 'Free'. (How naif can you
get!). But as you rightly observe I do not know what Amazon Prime is
and certainly did not wish to join that. The 30 day period was,
however, very educational; I know I want nothing to do with Amazon
Prime; and I did not know that before.

Unfortunately I have stopped that Credit Card. Not, I should say,
because of the erroneous £49.00 charge, for I had stopped the card for
another fraud before I noticed this entry. I think TSB should manage
to credit my account, but there may be some problem.

You have been very helpful. If you are this helpful to all customers I
think this 'Amazon Prime' idea must count as one of Amazon's few
failures.

Best wishes, Ian West
--
Ian West
12 Longhirst Village,
MORPETH, NE61 3LT, UK
Tel: 01670 791880
*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-
On 24 Feb 2014, at 17:25, Amazon.co.uk wrote:

Your Account
Amazon.co.uk
Message From Customer Service
Hello Ian,

This is Jason from Amazon Customer Services.

 
Further to our conversation I've checked your account and found that
the charge of GBP 49.00 relates to Amazon Prime. When you placed an
order on the 13 January 2014, you chose the following delivery option:
"One-Day Delivery with a free trial of Amazon Prime (1 business day)".

While you weren't charged at sign-up, your membership is upgraded to a
paid membership plan for your own convenience once the trial period
ends.

As you didn't cancel your membership once the trial period ended, our
system automatically charged you the annual subscription fee for
Amazon Prime, GBP 49.00.

However, our records indicate that you haven't used your Amazon Prime
membership, so it doesn't seem that the Amazon Prime service is
something you'd benefit from.

I've now cancelled your Amazon Prime membership and requested a refund
of GBP 49.00 for the membership fee.

Refunds usually go through in 2 to 3 business days so you should see
this credited to your account on your next statement. Please note,
this does not include your bank's processing time.

Cancelling your Prime membership means that you'll lose your Prime
benefits. Any new or pending orders may be subject to delivery costs.
Cancelling your membership will also cancel the membership benefits of
any invited household members. You will also lose access to Kindle
Owners Lending Library.

For more information about Amazon Prime, including the Terms &
Conditions, please visit our Help pages at:

http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=200182130

I hope this helps. We look forward to seeing you again soon.

Warmest regards,
Jason S
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