Lessons from Spain; A Caution for China

This article is taken from an earlier published posting on abu al-fin blog

Beijing-based economist Michael Pettis has family roots in Spain. Michael's personal experiences with friends and family involved in the Spanish real estate bubble provide object lessons on a much wider scale:

I remember in 2003 my mother had a New Year’s Eve party at our family home in Málaga, in southern Spain, at which over 80 people sat for dinner, including most of my old friends still around from high school days. That night I had one of those epiphanies (as you often do on New Year’s Eve, I guess) about the real estate market when I suddenly realized that nearly every one at the party was involved in one way or the other in real estate. Most of the people there (including my Persian sister-in-law) were real estate developers, real estate agents, real estate lawyers, architects, or owners of building and construction companies. All of them lived off (and had prospered mightily from) the real estate boom in southern Spain.

But this cannot be, I thought in my naiveté. If the only industry around is real estate, then we must be living through a real estate bubble of enormous proportions.

Later that night I spoke to one of my old high-school friends, Andy, who was at the time a prosperous real estate agent with houses in Marbella (purchased on borrowed money, naturally), a Mercedes, and all the trappings that accrue to an immensely charming and self-confident real estate agent during a real estate boom. In our conversations, and ones that took place subsequently over the next few years, I warned him that the property market in the south of Spain looked out of control, and it would be a good idea from him to diversify his savings out of real estate.

Same old same old

Of course Andy didn’t. He explained to me that what we were seeing in southern Spain was not a bubble because there were very strong reasons to believe that real estate prices were undervalued and were going to rise a lot more. Europe, he told me, is aging rapidly, and old people, as everyone knows, like nothing better than to retire in some warm and sunny place, preferably on the beach. With an infinite supply of European old people and limited European beachfront property, mostly in Spain, Italy, and Greece, where in addition you had great food, warm-hearted people, and plenty of immigrants to keep the prices of services (and servants) down, it was certain, Andy explained, that real estate prices would not decline. The demand was insatiable at almost any price.

This seemed like a perfectly reasonable argument on the face of it, and it was widely proposed to justify ever-soaring Spanish real estate prices for many years, not just on the Spanish coast but also, perhaps a little bizarrely, in every nook and cranny of the country, including some pretty gray and inaccessible building projects outside cold, northern industrial cities.

The weakness in the argument, of course, was that although there might have been near-infinite demand, this could not justify near-infinite increases in prices, especially since the demand itself was likely to be highly pro-cyclical because the Spanish economy had itself become dependent on real estate development. As long as the economies of the cold northern European countries were booming, in other words, the demand from retirees for beach houses would stay high, but any slowdown in the economy would reduce demand in Spain at the worst possible time.

And as Spanish real estate slowed, the impact would be exacerbated by a much sharper slowdown in the Spanish economy caused by the slowdown in real estate, which had become a major driver of the economy. If a substantial portion of the Spanish workforce depends on a booming real estate market – and not just those directly dependent, but also those indirectly dependent, like bankers, restaurateurs, retailers, travel agents, and so on – then any slowdown in the real estate sector is itself seriously self-reinforcing.

We have now seen how this works in Spain, but in China we are still using a similar argument to explain why real estate prices cannot drop significantly. Our Chinese version of the old-people-love-to-live-on-the-beach argument is the urbanization argument. As long as Chinese workers continue to move from the country to the cities – and urbanization has been one of the most dramatic consequences of Chinese growth in the past three decades – then there is likely to be a near infinite demand for city property, and so prices can only go up. And because prices can only go up, speculative demand for real estate is not speculative, it is precautionary.

This claim seems at least as plausible as the Spanish argument justifying infinite price increases, and was probably true a decade ago, but it runs into the same problem that the Spanish story ran into (and indeed that nearly every previous case in history of a real estate bubble, which has always started with a plausible story). First, no matter how much demand we can project into the future, rising prices can nonetheless outpace rising demand because rising prices can themselves stimulate further demand, in which case rising prices are unsustainable. This should be obvious, but the point is often lost in the giddiness that accompanies rapidly rising prices.

Second, and this is key, the rising demand is itself pro-cyclical. This is the most dangerous part of the process and perhaps the least well understood. Rising demand driven by the urbanization process is itself subject to underlying growth in the economy, since it is growth in turn that drives the urbanization process.

What’s more, when we reach the point as we did in Spain several years ago, and have reached in China too, in which a substantial part of the growth that drives the urbanization process is itself created by real estate development, then any slowdown in underlying growth is likely to be seriously exacerbated by a corresponding slowdown in real estate development. This is because the economy is caught in the reverse side of the feedback loop that helped drive prices on the way up – slowing growth leads to slower demand for urban real estate, which leads to slower real estate development, which itself leads to slower growth. _Michael Pettis

Patrick Chovanec explains why his cautionary language about the Chinese economy is not just empty words

Walter Russell Mead remarks on the falling Chinese growth numbers, and wonders what they portend for the future of the global economy.

Most of the developed world is caught up in the twin destructors of exponentially rising debt, and demographic decline. Up until recently, it was thought that China, India, Brasil, and Russia were exceptions to this widespread decline. But that rosy viewpoint may be wrong.

In fact, it seems that the Anglosphere may be in the best position to weather this lengthening global recession, if the US can rid itself of the parasitic regime that is currently sucking the life's blood out of the US private sector.

Good luck this November.

The Insurmountable Challenge to Drug Enforcement

Drug enforcement agencies around the world are battling the production, transport, and sales of drugs from the opium poppy, drugs from cannabis, drugs from coca, and synthetic drugs such as methamphetamine and designer drugs like ecstasy, MDMA.

The genetic code for making opium, cocaine, and tetrahydrocannabinol (THC) resides within the individual plant, and is recreated every time the plants reproduce and make seeds.

It is possible to make these drugs in the lab, but it is too much trouble and far too expensive, when compared with letting the plants make the drug naturally. So geneticists have discovered how to take these genes and place them in bacteria, farm animals, or other plants. This allows for covert drug synthesis across a much wider range of plants, climates, altitudes, etc.

Eventually, production of synthetic drugs such as ecstasy and methamphetamine are likely to be automated -- either by coding into genes, or by nano-sizing the synthesis in a tiny assembly line of nano-enzymes.

Just as coca, cannabis, and the poppy are able to take sunlight, water, and soil nutrients, turning them into mind altering alkaloids, so will future bio- or nano- drug factories take cheap feedstocks and energy inputs and convert them into high priced, illegal drugs -- covertly.

A nano- drug factory might fit inside a lady's handbag or a student backpack, for example, operating off batteries. A bio- drug factory might actually be implanted inside the drug user himself, producing the illicit drug only in response to a particular epigenetic command signal, such as coded laser light pulses in specific frequencies.

The problem for future drug enforcement agencies is much bigger than keeping people from getting high, however. Future drugs will make people smarter, faster, stronger, and more creative. These drugs will make people "more" than they are in some ways, and once people experience themselves as "more," they will typically not want to go back.

Combining the greater power of future drugs to facilitate a person's goals, with the increasingly covert nature of producing future drugs, will make drug enforcement exponentially more difficult -- approaching impossible.

Global societies are going through many changes. Modern civilisation (western nations plus East Asia), in particular, is experiencing an existential crisis, with unsustainably low birth rates and widespread loss of direction and purpose -- beyond desiring a life of ease -- among the young.

Such societies are vulnerable to mind-altering experiences, including drugs and cults. If these societies wish to see the dawn of the 21st century, they had best take inventory and make some hard choices.

The twin destructors of massive debt and demographic decline are only the prelude to coming attractions, for those who fail to wake up.

Why Russia Hates the Global Gas Bonanza

Multiple voices out of Russia have been condemning the global shale gas movement -- deriding unconventional gas as "unsafe," "uneconomical," and "irrelevant." In other words, Russia is running scared, hoping that irrational lefty-green influences over western governments will subdue Gazprom's unconventional competition, before Russia loses all of its lucrative, high priced natural gas contracts.

Economist

Poland is just one of many countries suffering under extortionate Russian natural gas prices, which would like to develop its own cheap shale gas resource:

If geologists are right, up to 768 billion cubic meters of natural gas sits trapped in shale deposits deep beneath the surface in Poland, enough to meet the country's needs for the next 50 years and more. The estimates have tantalized Poles with visions of ending their reliance on Russian gas, which warms them through harsh winters but puts them at the mercy of their former masters far more than they would like. _LA Times

Other of Russia's customers looking to slip the Gazprom chains from around their necks include the Ukraine, China, and a number of central and western European nations.

The unconventional-gas bonanza has roughly doubled the gas resource base, a measure of the total gas in the ground rather than what might be economically recoverable. In 2009 the IEA estimated the “long-term global recoverable gas resource base” at 850 trillion cubic metres (tcm), against 400tcm only a year earlier. The main reason for the rethink was shale gas and other unconventionals. Not just America but parts of Europe, China, Argentina, Brazil, Mexico, Canada and several African countries, among others, sit atop as yet unknown quantities of gas that could transform their energy outlook.

...Historical factors have led to another anomaly: much of the gas traded across borders is sold at prices linked to those of crude oil. When gas was first brought to market as a commercial fuel in the 1960s, as an alternative to home heating oil, it made sense to price it against a substitute. But there was also a more subtle reason. Oil was used as an independent price arbiter for Dutch gas in the 1960s and then for Algerian and Norwegian gas in the 1970s because neither side could influence the supply and demand for it. The system persisted as Russian gas came to Europe in the late 1970s. But the economics have changed, and valuing one commodity in terms of another now seems bizarre.

...A more competitive market the world over would doubtless make gas cheaper by breaking the link with oil, but that will be difficult to bring about. Gazprom, Russia’s huge state-run gas producer and supplier of 25% of Europe’s gas, is strongly opposed to dropping oil indexation. A tussle is under way between it and the continent’s big buyers. Some pundits say that gas must eventually become a global fungible product like oil, with regional price differences closing as more gas is shifted in the form of LNG, draining gluts and making up shortfalls in regional production in North America, Europe and Asia......

Gas producers are naturally happy with the high prices resulting from oil indexation, arguing that without them the economics of big gas projects would never work. But Rick Smead of Navigant, a consultancy, thinks there are good reasons for all concerned to want competitive gas prices. He points out that they would reduce regional price volatility and provide gas producers with a broad and flexible market instead of having to rely on a single consumer at the end of a pipeline. That should offer an incentive to make the huge investments required.

If the “shale gale” blowing through America can be replicated worldwide, the huge surpluses it would bring could hasten the advent of a global market. Just as the 20th century was the age of oil, the 21st could prove to be the century of gas. _Economist

In early 2009, at the height of winter, Gazprom withheld gas from Ukraine in a dispute over prices and payment, a shutoff lasting for days that also affected delivery to more than a dozen other shivering European nations. On at least one day in February of this year, Poland detected a sudden 7% drop in supply from Gazprom; some suspect Russia was holding back some of its gas for itself to combat a nasty cold spell. _LATimes

Russia not only stands to lose its ability to extort high gas prices from its customers -- it is in danger of losing many of its customers altogether. Since Russia's government depends upon Gazprom profits to finance many of its "unofficial" expenditures, the crony-ocracy at the highest levels of Russia's government is extremely concerned.

Losing China and Eastern Europe would be a significant blow to Gazprom. But the loss of western Europe might be the final straw, leading to revolutionary changes inside Russia.

These are basic, earth shaking trends which should be taught to every school boy and girl. Unfortunately, almost all school boys and girls are too busy being indoctrinated into climate hysteria and politically correct multicultural mind pablum, to have time to understand what makes the world go around.

Unconventional natural gas is just the beginning. Unconventional liquid fuels are closing in on economic production when oil sells for between $100 and $120 a barrel. As technologies continue to improve, that breakeven price is slowly but surely dropping.

If Russia is to benefit from its vast resources of energy wealth, it had best open itself to foreign investment and development as quickly and cleanly as possible -- cleaning out the destructive corruption and cronyism from top to bottom to make way for a better future for Russia's people.

For if Russia continues down its current path, it is certain to lose everything East of the Urals in a matter of decades, and perhaps everything else shortly thereafter.

On the Path to Autonomous, Insect Sized Hunter Killers

More 23 July 2012: Brian Wang Looks at Mini Drones and Autonomous Micro Air Vehicles

via NBF

Raytheon's small, 2 foot laser guided bomb is virtually ready to roll out.

The drone war could be shrinking faster than anyone expected. Raytheon’s teeny, tiny drone bomb might be ready to arm a small drone within months, the defense giant says.

...That would open new worlds of possibility for the U.S. drone arsenal. There are a lot more small drones than there are Preds and Reapers. The small-fry robots are used as flying spies, since they’re too lightweight to arm — until now. The Small Tactical Munition is supposed to arm the Shadow, a drone that’s only 12 feet long. The U.S. fleet of killer drones would significantly increase.

...having an armed Shadow to launch would be a big asset to a commando team in, say, East Africa. Smaller also means cheaper, and easier to deploy. _Wired

Special forces recon and strike teams could easily pack a small squadron of mini-drones behind enemy lines, for either reconnaissance or lethal attack missions. Armed with either laser guided mini-bombs or mini-missiles, such teams would have expanded reach for superior real-time intelligence-gathering and target destruction.

Earlier article on Raytheon's Small Tactical Munition

Here are more plans for mini-drones and munitions being developed for special operations:

The petite, 13-foot Tigershark drone, already used for surveillance and reconnaissance, will be outfitted with an even smaller drone — developed by Air Force researchers under the Precision Acquisition and Weaponized System program — that doubles as a warhead. The baby drone would detach from its Tigershark mother and relay real-time video to ground support as it was directed toward a target and then detonated on impact.

...Several military branches and drone companies are working on teeny-tiny robotic killers. The Acturus drone, which is the aerial equivalent of a compact car and carries a 10-pound missile, is currently undergoing military tests, and earlier this year the Army doled out $4.9 million for “rapid fielding” of AeroVironment’s Switchblade suicide drone, essentially a tiny flying robot with a death wish.

The logic behind these teenier missiles and self-detonating drones (sometimes inside bigger drones!) is simple: A smaller boom and a more targeted explosion — right through the car windshield, for example — keeps unnecessary damage to a minimum. _Wired

The size of these tiny killer-drones is quickly shrinking, so that it will not be long before lethal drone packages can be delivered under stealth in the form of birds, bats, or insects -- right in the lap of an enemy base or command and control centre.

It has become clear to militaries that remote controlled drones are subject to being hacked, hijacked, or having their communications jammed. Consequently, there is a rush to develop semi-autonomous or fully-autonomous drones capable of carrying out a mission after communications is lost.

Unmanned Systems Integrated Roadmap 2011 (PDF) describes some of the US' future plans for unmanned military robots and drones.

China is also hard at work developing sophisticated drone weapons systems:

New Scientist reports that the Chinese are developing what they call “genetic algorithms” that will be used in their pilot-less drones to teach them to “think.” According to the report: “A genetic algorithm is one that works much like natural evolution. It narrows down search results, weeding out the weaker, off-topic responses, and recombining the ‘stronger’ returned values into a better hybridized result.”

These Chinese drones, which will be used to hunt submarines, will be programmed to hunt to some degree on their own by responding and adapting to such things as changing weather patterns, fuel consumption and sonar readings. —— _AFP

So, when should we expect stealthy bird-like or insect-like killer drones?

Why do you ask? Do you have a guilty conscience?

Heh! Just kidding. The simplest and most credible answer is that they are already here, but they are not yet autonomous. And once autonomous, there is no guarantee that they will ever be trusted with more than simple reconnaissance. It seems to me that tiny, undetectable spies should be quite enough, without also making them autonomous killers.

But, perhaps I am being a bit naive.

Brave New Cuisine: Eating Bugs and Molecules

The ability to feed our population is incredibly important.... Land-use for meat could be cut by 90% which would drastically lower greenhouse gas emissions from cattle. There would also be no need for large-scale transport. Post hopes one day each kitchen would be capable of making its own meat. _Molecular Food and Lab Grow Meat - Cosmos

Kitchen grown meat, synthetic molecular food, and insect farms -- O brave new world, that has such cuisine in it!

The population of the Earth's third world is growing rapidly -- particularly in Africa. North America, Oceania, and Europe will probably have no problem feeding themselves for the foreseeable future. But in the face of relatively high birthrates, and decreasing aid from the developed world, Africa and parts of Asia and Latin America may be pushed to the limits by even occasional revolutions, insurrections, and bad growing seasons.

Food scientists have been hard at work devising methods to feed parts of the world which may run short from time to time. Building insect farms is one of the proposed approaches:

Today’s insect farms primarily serve the pet food and bait markets. In the U.S., they produce enough food to keep approximately 13.6 million pet frogs, toads, and lizards satisfied, but humans tend to have bigger appetites, and there are a lot more of us. In the future, we will not only need far more insect farms; we will need bigger, more productive farms as well.

...There will also be a great demand for processing—increasing shelf life, ensuring product safety and consistency, and, most of all, making mealworms and crickets look and feel and taste a little less like mealworms and crickets. While many people may never eat insects even after they’ve been beheaded, declawed, and dewinged, they might eat insect flour or sports bars fortified with insect protein. _Reason

Another approach to brave new foods, is molecular cuisine -- as in synthesized food, a la Star Trek.

Molecular gastronomy in the lab can also lead to new, and rather odd, combinations on the plate. It turns out that foods that go well together often contain the same aroma molecule, as do fish and chips and, surprisingly, coffee and garlic.

...rather than growing meat from a complex set of compounds, Post’s lab uses cow stem cells. These cells are given the right nutrients to grow within the lab to create tissue. So far meat has grown into small strips about 3cm long, meaning around 3,000 of these will be needed to make the long-anticipated hamburger. _Cosmos

This is just the beginning, of course. If chemical engineers can make gasoline, diesel, plastics, and high value chemicals from garbage and biomass waste, it is likely that they can also learn to make edible food from the same materials.

Such skills will be invaluable for generational space missions, or for permanent manned space colonies far from Earth. Clever chefs can make just about anything taste good, given the right spices -- synthetic or natural.

"Have You Always Wanted to Change the World?"

The world has produced a handful of truly disruptive individuals for the current generation of change. Peter Thiel, Elon Musk, Burt Rutan, and Ray Kurzweil immediately come to mind. Many others who belong in that category prefer to remain out of the limelight. Others, such as Craig Venter and Dean Kamen, are on the brink of membership.

But one who is often overlooked -- but shouldn't be -- is Peter Diamandis, of X Prize fame. Here are excerpts from an interview with Diamandis, published in Wired.com:

Ted Greenwald: Have you always wanted to change the world?

Peter Diamandis: No. My first ambition was to get off the world. My childhood dreams were focused on being part of the effort to make humanity a multiplanetary species. I believe we have a moral obligation to back up the biosphere, take it off-planet, and give ourselves the safety of ubiquity. Ultimately it’s what we do. We have the exploration gene.

...A child of the Apollo era, Diamandis grew up expecting the US government to colonize outer space. But decades of NASA timidity eventually convinced him that the only way to get off the planet was to build a private space industry. His breakthrough idea was to resurrect a brilliant notion from the early 20th century: Offer substantial cash prizes for achieving milestones of flight. Civilian aerospace would grow contest by contest, innovation by innovation.

It worked. The $10 million Ansari X Prize resulted in the first repeatable private flight to the edge of space and became the first in a slew of aerospace competitions. Diamandis then applied the same method to other issues like fuel efficiency, oil spill remediation, and health care costs. The upshot was a series of breakthroughs and a mini-boom in innovation-spurring competitions.

Greenwald: When did you give up on the government’s ability to open the space frontier?

Diamandis: I can pinpoint the moment. The 500th anniversary of Columbus was in 1992. The first Bush administration was supposed to start a massive effort to go back to the Moon and on to Mars. It fizzled. That’s when I got it: This was never going to happen. Any time a new Congress came in, it would cut NASA’s budget. Commercial industry was the only way to generate long-term funding for bold, risky projects. I thought, how can I create the economic engine that will open space regardless of the government’s ups and downs? That’s when I cofounded Zero Gravity, which let customers experience weightlessness on parabolic airplane flights.

Greenwald: How does experiencing weightlessness drive space exploration?

Diamandis: Two forces have opened most frontiers: tourism and resources. People go for the experience or for the gold, spices, and tobacco. I had tried to get on NASA’s zero-g plane and couldn’t. I thought there must be a market for this, so in May 1993 I partnered with NASA engineer Ray Cronise and Byron Lichtenberg, a friend who had flown two Space Shuttle missions, and we raised $500,000. We walked into Federal Aviation Administration’s office and pitched the idea. They said the regulations wouldn’t allow an airplane to do parabolic flight and with passengers whose seat belts were unstrapped. I said that’s bullshit. I proceeded on an 11-year effort to get permission from the Federal Aviation Administration. We finally became operational in October 2004, and today we’ve flown 300 flights for 12,000 customers, most famously Stephen Hawking.

Greenwald: Where did the idea of incentive prizes come from?

Diamandis: It came from Charles Lindbergh’s memoir, The Spirit of St. Louis. In 1919 a hotel owner named Raymond Orteig put up a $25,000 prize for the first nonstop flight between New York and Paris. Nine teams spent $400,000 to try to win. Lindbergh had the least experience. He was called the flying fool. But he won, and within three years there was a 30-fold increase in passenger air traffic. Aviation didn’t get easier, but his flight changed people’s belief in what was possible. I thought, this is how I’m going to get my butt into space! How many things don’t happen because people don’t believe they can? Getting the public to change its beliefs is the underpinning of an X Prize: demonstration leading to paradigm change.

Greenwald: What contests do you now have in development?

Diamandis: Perhaps the most audacious and important one is the Qualcomm Tricorder X Prize. It’s a $10 million challenge aimed at developing version 0.9 of the Star Trek tricorder, the medical device that allowed Dr. McCoy to assess someone’s health status. By 2020 the US will be short 91,000 doctors. There’s no way we can educate enough doctors to make up that shortfall, and other countries are far worse off. You’ll talk to this device, cough on it or do a skin prick, and it’ll diagnose 15 disease states more accurately than a board-certified doctor.

Greenwald: What persuaded you that the world is headed toward an era of unprecedented abundance?

Diamandis: As I watched what small teams could accomplish with powerful, change-the-world technology, it struck me that the world’s biggest challenges are also its biggest market opportunities. Multi-hundred-billion-dollar industries will form at the leading edge of exponentially developing technologies. Think about AI and robotics. Each one of these fields will displace and reinvent existing billion-dollar industries. We’re on the verge of reinventing life. In the next five years, people will program living systems the way we program computers today. I became utterly convinced that abundance is where we’re going to end up. That’s the direction we’ve been heading for 100 or 200 years. A Maasai tribesman in Kenya today has better mobile communications than President Reagan had 25 years ago. If they’re on a smartphone, they have access to more information than President Clinton did 15 years ago. Their Google is as good as Larry Page’s.

Greenwald: Could anything derail us from this path?

Diamandis: Yes: the risk aversion we’ve developed as a society. Lawyers have ubiquitous power. If someone is always to blame, if every time something goes wrong someone has to be punished, people quickly stop taking risks. Without risks, there can’t be breakthroughs. I got this from Internet law expert Jonathan Zittrain: We’ve gone from a society where if something wasn’t prohibited then it was legal to a society where if something isn’t explicitly permitted it’s illegal. In the early days of aviation, you could do anything you wanted as long as it wasn’t illegal. Now the laws are so extensive that they say, “Show me where it’s allowed.” _Peter Diamandis in Wired

Read the entire interview at the link above.

Disruptive individuals are generally driven to bring important change to the world. This drive is not necessarily something that they have ever thought through, nor have they necessarily come to understand it clearly. And without that drive, it is unlikely that they would have accomplished even a fraction of what they have done.

The intelligence was always there, as was the executive function and future orientation. The persistence and grit was there. But the importance of a focused drive cannot be overstated.

Diamandis has functioned more as a facilitator than as an inventor or discoverer. In this complex age, truly skilled facilitators are extremely valuable -- and are well compensated in the corporate arena.

Freelance facilitators can have a tough go of it at times, but if the grit and drive are there, they are likely to find their way into a generative -- if not outright disruptive -- niche.

Russia's Business Climate: An Uphill Battle

Russia still suffers a brain drain. A study by the World Economic Forum (WEF) suggests that bright young Russians are flocking abroad even faster than they were in the early 2000s. Many are fleeing the insecurity of living in a mafia state—the fear that a well-connected goon will show up one day and announce that your business now belongs to him.

“Everybody pays [bribes], even those who insist they are totally clean,” says an investment banker in Moscow. Companies owned by the state or powerful oligarchs enjoy some immunity from extortion, but smaller private firms do not, which is why Russia has so few of them. _Economist

In the WEF’s study Russia fared worse than India, China and Brazil on the affordability and availability of finance. The other BRICs are not exactly models of lean, clean government either, but their states are less predatory than Russia’s. And their economies rely more on talent and less on hydrocarbons. Reviving Russian industry will be a long struggle.

...Three years ago Mr Deripaska brought in Bo Andersson, a former GM man, to turn GAZ around. A conscientious Swede, Mr Andersson insisted on zero tolerance for corruption. For a Russian factory this was a tall order. But he has got rid of various “managers” who ran businesses on the side, helping themselves to GAZ’s supplies. He has introduced bonuses for workers who turn up sober and refrain from stealing, and the sack for those who do not. Thousands of surplus workers have been laid off; more will follow. This has not made Mr Andersson popular in Nizhny; hence the bodyguard who accompanies him everywhere, even inside the plant. GAZ is now in profit and producing double its 2009 output, despite cutting its workforce by half to 23,000, says Mr Andersson. In 2010 only 16% of vans rolling off the line were fit to be sent out without remedial work; that is now up to 64%. _Economist

Good enough for Russia, perhaps, but not good enough to compete internationally. It will be an uphill battle all the way.

Besides fighting corruption and crime, businesses must find and keep good conscientious workers. Unfortunately, in Russia that is easier said than done. Disease, alcoholism, mental illness, and drug addiction all plague Russia's working age population.

Most of Russia's 2.5 million drug addicts are aged 18 to 39 — a generation of Russians lost to heroin.

"The only thing the government can do is save the new generation, because we cannot be saved," said Valery, a former heroin addict from the Volga River city of Samara. He gave only his first name because his support group does not allow contacts with the media. _SFGate

Russia's fertility rate is still below 1.5 -- far below replacement level. When one counts only ethnic Russians -- excluding immigrants -- the fertility rate is much lower yet.

Russia is in many ways the world's richest country, in terms of natural resources. But due to bad government, Russia is also one of the world's poorest countries in terms of realistic hope for the future.

Russia needs tens of thousands of men like Bo Andersson -- the man mentioned above who tried to clean up GAZ, and succeeded to a certain point. But where is Russia going to find them? And how can Russia keep them alive and out of Putin's prisons while they are trying to save the country?

Private Space Launch: Enter the Virgin

Richard Branson's Virgin Galactic has decided to enter the orbital satellite launch field, using air-launch technology already developed for its sub-orbital space tourism project. Interestingly, asteroid-mining venture Planetary Resources is one of the investors in the Virgin project (more).

Virgin Galactic Orbital Air Launch

The announcement isn’t a huge surprise, as it’s long been assumed the WhiteKnightTwo carrier aircraft would serve as a launch platform for other space-bound vehicles beyond SpaceShipTwo. Keeping the naming of its space vehicles relatively simple, LauncherOne is capable of carrying up to 500 pounds (225 kilograms) to low earth orbit for less than $10 million.

“Virgin Galactic’s goal is to revolutionize the way we get to space,” Branson said at Farnborough. “Now, LauncherOne is bringing the price of satellite launch into the realm of affordability for innovators everywhere, from start-ups and schools to established companies and national space agencies. It will be a critical new tool for the global research community, enabling us all to learn about our home planet more quickly and affordably.” _Wired

Also, see Brian Wang's take on the Virgin Galactic - Planetary Resources teamup

The Stratolaunch air launch system pictured above is a much larger version of an air-launch to orbit system, allowing for heavier payloads. Like the Virgin system, Stratolaunch allows for a very versatile approach to orbital insertions. The huge carrier craft serves as the "first stage" of the launch system, carrying the launch craft to altitude and providing a wider range of opportunistic launch attitudes than is conveniently possible for fixed launch sites.

In other recent space-related news:

The US Defense Department's DARPA is resuming efforts to develop a hypersonic "X-plane (HX). DARPA's plans are ambitious, and will require very rapid innovation and development in order to meet its schedule -- achieving a rocket launched hypersonic craft by the year 2016.

Wired

The hypersonic X-plane (HX) will launch using a disposable rocket stack, unlike previous models which have used space launch rockets, then begin its hypersonic glide. The plan is for the "highly manoeuvrable" vehicle to be recoverable, meaning it will either return to Earth with the help of a parachute, or possibly land on a runway.

Darpa is reigniting the hypersonic flight research with the intention of launching future missions ranging from "space access to survivable, time-critical transport [troop deployment] to conventional prompt global strike." _Wired

Wired

Development of the Skylon spaceplane has passed a critical milestone following tests on the key component for its Sabre engine.

The engine, being developed by Reaction Engines Ltd, looks set to revolutionise not only space travel but also air transport around the world.

It promises to allow a new generation of aircraft to fly from one side of the Earth to the other, e.g. the UK to Australia, in just four hours instead of the 22 or so needed nowadays.

But it will also provide sufficient boost to send the Skylon spaceplane into orbit where it could deliver satellites or link up with the International Space Station.

What makes Sabre different from other aircraft engines is a revolutionary ability to switch from an air-breathing mode to that of a rocket engine.

This hybrid function will allow it to power aircraft at up to five times the speed of sound within the atmosphere or directly into Earth orbit at 25 times the speed of sound. _Wired

Brian Wang has more on this development.

Hybrid engines of this type may provide a crucial weight savings in the early stages of the development of workable hypersonic craft. Engineers need to be cautious in avoiding excessive complexity in this new type of engine. KISS (Keep it simple, stupid!) is the key, as far as it is possible.

The type of craft pictured above has been discussed by Brian Wang in multiple articles. It is powered in multiple ways: by chemical rocket, air-breathing propulsion, by MHD, and by dense plasma focus fusion -- all of which should combine to allow it to travel at very high velocities. It will require significant development of several components, including the focus fusion module, before it becomes practical.

Parts of the above posting were excerpted and adapted from an earlier article published on Al Fin Potpourri

Ideally, all components of the system would be reusable, to save on costs. There are several tradeoffs to be made in terms of launch platforms, launch attitudes, propulsion strategies: pure vs. hybrid vs multiple etc., numbers of propulsion stages, orbital vs sub-orbital flight, method of terrestrial return, and so on.

Hypersonic flight inside the Earth's atmosphere is very punishing, physically. Better types of outer covering materials are needed to provide greater durability for multiple flights. Alternatively, inexpensive spray-on outer skins may be applied prior to each flight, which will naturally ablate in the course of the flight.

An earlier Al Fin article on this topic

Obama Takes His Wrecking Ball to US Science & Technology

Since its founding, the US has been a fertile ground for scientific and technological innovation. Increasingly over the past century and a half, the US economy has been driven by scientific and technological discoveries and advances. Still, it would be quite easy for bad government policies to change all of that.

Science and technology are male-dominated areas in the US and in virtually any other nation in the world. There is a good reason for the male preponderance in math, the hard sciences, and the technological occupations. But US feminists are unhappy about this "gender imbalance," and they want President Obama to do something about it.

Quotas limiting the number of male students in science may be imposed by the Education Department in 2013. The White House has promised that “new guidelines will also be issued to grant-receiving universities and colleges” spelling out “Title IX rules in the science, technology, engineering and math fields.” These guidelines will likely echo existing Title IX guidelines that restrict men’s percentage of intercollegiate athletes to their percentage in overall student bodies, thus reducing the overall number of intercollegiate athletes.

Obama hinted that Title IX quotas would soon come to engineering and techology, saying that “Title IX isn’t just about sports,” but also about “inequality in math and science education” and “a much broader range of fields, including engineering and technology. _OpenMarket

In American universities, science, math, and technology departments are relatively free of the leftist indoctrination which pervades most other departments and divisions of modern universities. If feminists can get their man Obama to bring those recalcitrant and untamed departments under control, they will have a virtual lock on all areas of the university -- faculty, staff, and students.

The fact that fewer women than men major in science and engineering is the result of their own voluntary choices, not sexism or sex discrimination by schools, notes researcher John Rosenberg, the proud father of a daughter who got a Ph.D. from CalTech. My daughter is bright, and I’d be happy if she got a graduate degree in engineering (or became a physicist, like her grandfather), but I can’t force her to do that if she doesn’t want to, and a college shouldn’t be deemed liable for sex discrimination against women if women like her don’t want to study engineering.

Gender disparities in a major are not the product of sexism, but rather the differing preferences of men and women. The fact that engineering departments are filled mostly with men does not mean they discriminate against women anymore than the fact that English departments are filled mostly with women proves that English departments discriminate against men. The arts and humanities have well over 60 percent female students, yet no one seems to view that gender disparity as a sign of sexism against men. Deep down, the Obama administration knows this, since it is planning to impose its gender-proportionality rules only on the STEM fields (science, technology, engineering, and math), not other fields that have similarly large gender disparities in the opposite direction. _OpenMarket

Such an overwhelming difference in interests between the sexes, statistically, hints at deeper differences within the biology. Social engineers would be wise to show caution when tinkering with deep biological differences which have evolved over many millions of years.

As Susan Pinker notes, “A mountain of published research stretching back a hundred years shows that women are far more likely than men to be deeply interested in organic subjects—people, plants and animals—than they are to be interested in things and inanimate systems, such as electrical engineering, or computer systems.”

Women are well-represented in scientific fields that involve lots of interaction with people. As The New York Times’ John Tierney noted, “Despite supposed obstacles like “unconscious bias” and a shortage of role models and mentors, women now constitute about half of medical students, 60 percent of biology majors, and 70 percent of psychology Ph.D.’s. They earn the majority of doctorates in both the life sciences and the social sciences.” By contrast, “They remain a minority in the physical sciences and engineering,” which deal more with inanimate objects rather than people.

These gender-based differences are not the product of discrimination, and manifest themselves at a very early age. As a book on the biology of male-female differences notes, “Girl babies in their cribs are especially inclined to stare at images of human faces, whereas infant boys are likely to find inanimate objects every bit as attractive”; “this difference persists into adulthood: when shown images of people as well as things, men tend to remember the things, and women tend to remember the people.” _OpenMarket

Obama intends to enlarge upon his already catastrophic program of experimental social engineering, using US citizens, businesses, and institutions as his experimental mice.

It would be nice if these experimental mice were well informed about Obama's intentions prior to the November US elections.

Wasting Resources and Corrupting the System

MJPerry

This visual display of US federal prisoners by category of offense helps to place the US system of law enforcement and imprisonment into perspective.

There are currently 93,876 Americans serving time in federal prisons for drug crimes, which is by far the No. 1 offense that results in a federal jail sentence (see chart). Drug offenders make up almost half of our federal inmate population, and that help explains why the U.S. retains the status as the World's No.1 Jailer with a prison population of 730 per 100,000 population, more than even any of the world's most notorious and oppressive regimes like Burma (120 per 100,000 population), Cuba (510 per 100,000 population), and Iran (333 per 100,000). _MJPerry

US popular demand for illegal drugs drives a huge global industry of drug-related profit making -- from Burma to Afghanistan to Bolivia to Colombia to Mexico and beyond. The gigantic profits in the drug trade lead to the corruption of military, paramilitary, and civilian enforcers in every nation that is touched by the illicit drug industry.

The drug trade likewise generates high rates of violence, as competing groups vie for control of lucrative drug transport and distribution routes and territories.

The only reasonable strategy for achieving a more rational balance of imprisonment, as well as reducing drug related corruption and violent crime, is to slash the profitability of the drug trade.

The answer is not a simple one, given the all too demonstrable human weakness for self-medication, experimentation, social augmentation, escapism, and the chemical manipulation of others.

On the one hand, we are faced with bloated and corrupted governmental agencies which resist any change in current practises. On another hand, we are faced with a strong societal fear of what would happen to the working links of societies, should burden-easing drugs become too readily available.

This fear of societal dissolution in the face of the legalisation of drugs is far more realistic now, than it would have been 150 years ago, when modern anti-drug laws and enforcement were not in effect. The overprotectiveness of an all-pervading nanny state has yielded a cumulative effect on the public character of dependency, helplessness, and a lack of internal grit, substance and sense of solid purpose.

Such persons -- who are today all too common -- have very few defenses against the promise of easy euphoria, megalomania, or sense of calm, peaceful fulfillment from a chemical.

In other words, a sudden and complete legalisation of illegal drugs is likely to create a number of strong and disruptive wave effects crashing through society.

That would not necessarily be completely bad, as long as the productive and protective aspects of society were prepared for the event well ahead of time.

What we are doing now is certainly not sustainable.

Good Genes and Educational Achievement: The Straight Dope

Well, actually straight dopamine, to be honest. More specifically, how particular genes of dopamine transport and dopamine receptors relate to educational achievement. The study in question, by Kevin M. Beaver et al (PDF), was recently published in Developmental Psychology. (H/T HBD Chick)

Here's more:

Researchers have identified genetic markers that may influence whether a person finishes high school and goes on to college, according to a national longitudinal study of thousands of young Americans. The study is in the July issue of Developmental Psychology, a publication of the American Psychological Association.

“Being able to show that specific genes are related in any way to academic achievement is a big step forward in understanding the developmental pathways among young people,” said the study’s lead author, Kevin Beaver, PhD, a professor at the College of Criminology and Criminal Justice at Florida State University.

The three genes identified in the study – DAT1, DRD2 and DRD4 – have been linked to behaviors such as attention regulation, motivation, violence, cognitive skills and intelligence, according to the study. Previous research has explored the genetic underpinnings of intelligence but virtually none has examined genes that potentially contribute to educational attainment in community samples, said Beaver.

...The genes identified in this research are known as dopamine transporter and receptor genes. Every person has the genes DAT1, DRD2 and DRD4, but what is of interest are molecular differences within the genes, known as alleles, according to Beaver. Subjects who possessed certain alleles within these genes achieved the highest levels of education, according to the findings.

Dopamine transporter genes assist in the production of proteins that regulate levels of the neurotransmitter dopamine in the brain, while dopamine receptor genes are involved in neurotransmission. Previous research has shown that dopamine levels play a role in regulating impulsive behavior, attention and intelligence.

The presence of the alleles alone did not guarantee higher levels of education, the study found. Having a lower IQ was more strongly associated with lower levels of education. Also, living in poverty and essentially “running with a bad crowd” resulted in lower levels of education despite the genetic effects.

Even though the genetic variants were found to be associated with educational levels, having a specific allele does not determine whether someone will graduate from high school or earn a college degree, according to Beaver. Rather, these genes work in a probabilistic way, with the presence of certain alleles simply increasing or decreasing the likelihood of educational outcomes, he said. _APA.org

Dopaminergic Polymorphisms and Educational Achievement . . . Developmental Psychology July 2012

Data Source Used in Study

There is more to achievement in life than good genes, of course. A benevolent and sensory-rich upbringing and a solid social support structure are extremely helpful. But there is no better support upon which to build than good genes.

There is much more to be mined from data sources such as the one used by the authors of the study. The study looked at only three genes out of at least hundreds which are likely to influence intelligence, attention, impulsivity, future orientation, and other determinants of cognition and executive function. There is so much more to be learned, and the tools to do so are becoming more widely available and affordable -- even to the amateur scientist.

The problem seems to be access to reliable population data, and unfettered random access to different population groups which might well be compared in order to answer some questions of great importance both to science and to society.

But this type of study -- limited and cautious, to be sure -- makes a good starting point.

Obama: "Just Call Me Mr. Recession"

More: Devastating Net Job Losses Under Obama

US President Obama inherited an economic recession from his predecessor -- and promptly made it worse, and prolonged it to the point that there is no end in sight. There is no rational reason why Obama should have made a bad situation worse. Not a rational reason, but certainly an ideological reason. Obama's anti-private sector and anti-energy biases collaborated and conspired to bring the employment to population ratio down, and hold it there.

The dearth of business startups and consequent new employment are directly related to Obama policies of taxation, regulation, energy starvation, and a general anti-private sector bigotry that pervades the current US government like a deadly plague.

Calculated Risk Blog

Under Obama, the new normal is depressed. Depressed economy, depressed employment, depressed national mood.

The timing of this prolonged Obama recession could not be worse for the global economy, with both Europe and China underperforming badly.

Europe, in particular, is in trouble. Viewing both Europe's debt crisis with its demographic decline in the same light, it becomes difficult to envision an easy way out of the continental mess.

China will continue to struggle as long as its prime export markets remain depressed. And when China struggles, the problems propagate all the way down the chain of exporting nations.

Without Obama, the natural tendency of US capitalism to power startups, new energy sources, and new employment could come into play. But as long as Obama and his wrecking crew remain in control, the US -- and thus the global -- economy will continue to subsist in a dwindling manner on artificial stimulants.

More for those with an extraordinary interest in economics

New Magic Bullets Against Emerging and Chronic Infections?

Emerging infections -- both human engineered and naturally evolved -- present a difficult challenge for modern and future medicine. Recent scares from SARS and Bird Flu have sent journalists and health watchers into a frenzy, although fortunately neither outbreak proved as rapidly contagious and broadly lethal as anticipated -- so far.

A "magic bullet" that could provide resistance against a wide array of new viral, bacterial, and fungal infections would give medical practitioners and public health officials new confidence for a healthier human future.

Two potential "magic bullets" have been recently developed. The first is an artificial protein -- EP67 -- which appears to boost mammalian immune systems -- even when given alone without other drugs or vaccines.

Mice treated with EP67 within a twenty-four hour window of non-lethal infection were significantly protected from influenza-induced weight loss. Furthermore, EP67 delivered twenty-four hours after lethal infection completely blocked influenza-induced mortality (0% vs. 100% survival). Since protection based on innate immune induction is not restricted to any specific pathogen, EP67 may well prove equally efficacious against a wide variety of possible viral, bacterial, and fungal pathogens. Such a strategy could be used to stop the worldwide spread of emergent respiratory diseases, including but not limited to novel strains of influenza.

...In summary, this report shows that the C5a agonist peptide EP67 provides both prophylactic and therapeutic protection against influenza infection. Protection results from the rapid induction of a robust innate immune response that includes high local concentrations of anti-viral cytokines and the influx of several populations of innate immune effector cell types. These results have profound implications for influenza therapeutic development and, ultimately, for broad-spectrum emergency therapy against unidentified respiratory pathogens. _PLoS

Medical Express News Release on EP67

Another potential "magic bullet" approach to both new and old infectious diseases, is the T Cell vaccine.

For some infectious diseases, traditional vaccines just don't cut it. Microbes that hide inside human cells and cause chronic illness aren't stymied by the antibody response generated by the kind of vaccine available at the doctor's office. T-cell vaccines, which activate a different type of immune response, could, in theory, better prevent or control such chronic infections, but so far nobody has been successful at transitioning T-cell vaccines from the lab bench to the clinic.


A Cambridge, Massachusetts, biotech company called Genocea thinks its high-throughput method could change that. The company will begin its first clinical trial later this year, when its experimental herpes vaccine will be the first test of its claims.


All existing vaccines rouse the body into creating antibodies that attach to the surface of infecting microbes and flag them for destruction. But pathogens that live inside our cells, such as the viruses, bacteria, and other microbes that cause AIDS, malaria, herpes, and chlamydia, can evade this surveillance. "In order to deal with those types of pathogens, oftentimes we have to stimulate what we call cellular immunity. Unlike antibody immunity, which recognizes pathogens directly, cellular immunity has to recognize the infected cell and get rid of your own infected cells," says Darren Higgins, a biologist at Harvard Medical School who studies the interaction between hosts and pathogens and is a cofounder of Genocea.


... our understanding of how T cells control infection is still developing. The challenge is to identify the right protein—or antigen—from a pathogen that will grab a T cell's attention and signal that a human cell harbors an infectious agent. "If you can figure out what those protein pieces are, then you can use those proteins as a vaccine to sort of educate your immune system on what to respond to," says Higgins, who is now a consultant and scientific advisor for Genocea.


...Genocea plans to enter clinical trials with its genital herpes vaccine later this year. If successful, Genocea's herpes simplex 2 vaccine would be the first to combat the disease, which affects one out of every six people aged 15 to 49. Currently, patients can take antiviral drugs as a treatment, but there is no cure. Genocea's candidate vaccine would be used as a therapeutic treatment for patients who already have the disease.


Genocea's herpes vaccine program is moving faster than typical vaccine research, which can take 10 years to go from discovery to proof-of-concept and 20 years to reach the market, says Higgins. "Now you can screen very rapidly what is going to be the optimal vaccine component that allows you to get into clinical trials at a rapid rate." _TechnologyReview

These two distinct approaches to triggering immune system activity work on different parts of the immune system. EP67 protein induces an immediate immune response against acute threats. T Cell vaccines induce cellular immunity to destroy cells which are already infected, often chronically.

Human knowledge of the immune system was advanced significantly by the $billions spent on HIV / AIDS since the 1980s. Research tools and computational power have advanced along with this growing knowledge. Understanding the immune system better is one of the most important keys to effective treatment of a wide range of cancers, as well as to the development of effective anti-aging treatments.

Brian Wang looks at T Cell vaccines

IBM's Nano Approach to Killing Drug Resistant Bacteria

Chemists at IBM Research have been working to create "ninja polymers" that can target MRSA-infected cells in the human body and destroy their harmful payload.

Bacteria such as methicillin-resistant staphylococcus aureus (MRSA) are resistant to commonly-used antibiotics. IBM has drawing upon its experiences with semiconductor technology to create antibiotic-free bacteria killers. While they were researching ways to etch silicon wafers at a smaller scale than currently possible, they found some materials that could produce an electrostatic charge when chained together to form a polymer.

When these "ninja polymers" are introduced to the bloodstream, they self-assemble into biocompatible nanostructures that are electrostatically drawn to infected cells while not affecting healthy ones. When the reach those cells, they destroy the bacteria and then biodegrade with no side effects or accumulation within the body. Because the attack is physical, rather than chemical, the bacteria are les likely to be able to build up resistance to it.

These sticky nanostructures work in a very different way to antibiotics, according topolymer chemist Jim Hedrick. "They try to mimic what the immune system does: the polymer attaches to the bacteria's membrane and then facilitates destabilisation of the membrane. It falls apart, everything falls out and there's little opportunity for it to develop resistance to these polymers."

In addition to being useful vehicles for the delivery of drugs, these polymers could also be added to every day cleaning solutions. The research team believes that they could be used to replace the widespread distribution of antimicrobial agents found in hand gels, antibacterial wipes, toothpaste and even socks. _Wired

An earlier description of this research

There are a number of physical approaches to attacking drug-resistant bacteria, which are less likely to induce bacterial resistance -- including metal ions such as silver and titanium.

Nanotechnological materials research is likely to discover large numbers of other physical approaches to destroying drug resistant bacteria before they can spread.

Russia Suffers Drain of Brains

A brain drain from Russia has been funneling its brightest minds to the West, while the nation’s embattled higher education system struggles to find its place in the post-Soviet world. _NYT

Russia's educational system has been losing ground for decades. Consequently, Russia's brain-drain is occurring at earlier and earlier ages and stages of the educational process.

Not only are the best Russian science and technology graduates being lured overseas, sometimes the recruiting takes place even before graduation.

And those students who stay behind in Russia are studying more superfluous subjects, rather than the much needed scientific and technological areas of concentration.

Comfortably settled under the gilt ceiling and surrounded by statues of tsarist-era heroes, the participants of the Strong Russia 2012 summit were in an amicable state of mind, at least until the deputy economics minister of the Kaliningrad region stood up.

Mikhail Gorodkov spoke about an issue that few in the room could ignore: the lack of specialists needed to support Russia's development.

"With the excess of economists and lawyers that we have right now, there will simply be nobody left in 10 years to add to gross production [in Russia]," Gorodkov said.

The issue, although not a novelty to the summit participants, is a sore one. While authorities are soliciting more local and foreign investment by positioning Russia as a technological leader, the quality of the country's working staff has steadily declined.

Eighty-six percent of companies in Russia experience a deficit of qualified personnel, according to a study by Antal Russia. The June 2012 poll was based on information gathered from 200 companies.

Technical specialists, qualified retail workers, engineers and IT staff are the hardest to find. This shortage of qualified workers is expected to worsen in 10 to 15 years as Russia's demographics show fewer people of working age.

Part of the problem is the current fashion among youth to train to be economists, lawyers and managers, said Viktor Sadovnichy, rector at Moscow State University.

There is such a surplus of these professions on the market now that the newly graduated professionals are having trouble finding jobs or are forced to settle for jobs that pay 10,000 to 12,000 rubles ($370), Sadovnichy said.

The results of the Unified State Exam are a good indication of the professions that graduates are choosing to study. The number of students who pass the physics exam, which is necessary to go on to study engineering, is currently only 2 percent of the number that the technology sector needs to function, Sadovnichy said._Moscow Times

Capital flight from Russia continues, although at a lower level since the price of oil has dropped.

Should the price of oil remain for long below break-even for the Russian government budget ($120 - $150 per barrel), Russia's problems will have just begun.

Vladimir Putin has big plans for Russia, but he will need to find a way to bring in greater profits to the one-trick-pony energy state. The global price of natural gas is likely to drop lower -- making it difficult for Gazprom to support unofficial state projects. And Putin needs for the price of oil (Brent) to exceed $120 a barrel in order to pay off cronies and to finance all the new weapons systems he wants to build.

Putin's best hope for the future is if US President Obama is re-elected, prolonging the extreme dysfunction and weakening of his greatest enemy nation. Because it is only a matter of time before Russia will have to confront China militarily. And when that happens, Putin does not want the US to be in any condition to take advantage.

Demography is Destiny

The human population of planet Earth is expected to approach 10 billion sometime between 2050 and 2100. The number itself is not nearly so disturbing as the places where the greatest population growth is expected to occur.

As seen on the graphic above, most of the growth within the 10 most populous nations, is expected to occur in nations which are already impoverished, corrupt, and in some cases seminal hotbeds of global terrorism.

Since the above graph only includes the 10 most populous nations as of now, it does not provide a glimpse into the rapid population growth of Africa.

Data summary

World population by country

All figures in 000s. Click heading to sort table. Download this data

Country	1950	2011	2100	% change, 1950- 2011	% change 2011- 2100	% change, 1950- 2100
SOURCE: UN POPULATION Total population (1 July annually interpolated) in thousands - Medium variant Revision 2010 - WUP Revision 2011 Source: United Nations, Department of Economic and Social Affairs, Population Division: World Population Prospects DEMOBASE extract. 2011
Africa	229,895	1,045,923	3,574,141	354.96	241.72	1,454.68
Asia	1,403,389	4,207,448	4,596,224	199.81	9.24	227.51
Europe	547,287	739,299	674,796	35.08	-8.72	23.30
Latin America and the Caribbean	167,368	596,629	687,517	256.48	15.23	310.78
Northern America	171,615	347,563	526,428	102.53	51.46	206.75
Oceania	12,675	37,175	65,819	193.28	77.05	419.27
World	2,532,229	6,974,036	10,124,926	175.41	45.18	299.84

Table Source

The table above provides a broad global overview of regional population growth over the next several decades. The table below looks exclusively at expected growth in the ten currently most populous nations.

But in a few decades, we should see changes in the ten most populous nations, just as we have seen such a change over the past several decades. Different populations wax and wane depending upon a large number of factors.

Table
10 Most Populous Nations: 2000-2011: Population Trends
Rank	Nation	2000	2011	Change	% Change
1	China	1,278.0	1,348.0	70.0	5.5%
2	India	1,071.0	1,241.0	170.0	15.9%
3	United States	285.5	313.1	27.6	9.7%
4	Indonesia	216.2	242.3	26.1	12.1%
5	Pakistan	147.1	197.4	50.2	34.2%
6	Brazil	176.9	196.7	19.8	11.2%
7	Bangladesh	131.9	150.5	18.6	14.1%
8	Russia	146.1	142.8	(3.3)	-2.3%
9	Japan	125.9	126.5	0.6	0.5%
10	Mexico	97.0	114.8	17.8	18.4%
Population in Millions
Population data from UN, except for Pakistan (from Pakistan census)
2000 Pakistan population estimated from 1998-2011 growth rate.

Table Source

1850

1. China 429,931,000

2. India 203,415,000

3. Russia 64,903,000

4. France 35,783,000

5. Japan 33,111,000

6. Germany 29,800,000

7. Turkey 26,636,000

8. Italy 25,017,000

9. U.S. 23,192,000

10. U.K. 20,817,000 __Most Populous Nations in History Source

The above list looks at the most populous countries in 1850. Follow the link to observe the metric changing over multi-decadal intervals from 1800 to the latest available up to publishing.

Since the most rapid population growth is occurring in the most impoverished tribal areas of Earth, in populations with some of the lowest average IQs and highest homicide rates measured, the Earth is in store for what could easily be a wild and violent ride downward into rapid impoverishment.

This coming anarchy is developing at the same time that populations in more advanced nations of the world are beginning to shrink, while the governments of the most advanced nations of the world are themselves sinking into a quagmire of debt -- due to social policies of promoting dependency upon the state, and due to government strangulation of private sector economies.

Wiser persons will make preparations for this coming anarchy. Such preparations will go well beyond preparation for peak oil doom, EMP catastrophe, or simple economic collapse from any number of widely anticipated causes.

To meet the coming anarchy with a chance to survive and prosper on the other side, you will need to step out of the common herd, escape your indoctrination and conditioning, and consider the problem without preconceptions or moral judgments as best you can.

Hope for the best. Plan for the worst. And plan wisely, without expectation of wise action on the part of anyone else -- particularly your government.