All Victorian records have now been ecilpsed ; the longest dry period ever without rain -none this year except for a few drops, only 2% humidity, 3 consecutive days of temperatures exceeding 43 C (109 F) and with catastrophic consequences last Saturdays hottest day ever at 46.4 C (115 F) became the catalyst for over 100 raging bush fires which aleady represent the worst natural disaster to ever befall Australia.
Over 5,000 homeless and it is thought there could be up to 300 people dead. Just about everyone knows somebody badly effected in in way or another. If you would like to read or hear some of the stories of this unprecedented disaster click here.
There is also a good coverage at Bloomberg.
Bush Fires down under are like hell in all it's fury, since the oils from leaves of the giant eucalyptus ignite the whole tree and causes such heat intensity the tree literally explodes with such force that fireballs ignite bushland up to a kilometers ahead of the main fire front. Burning embers travel another 15 km further on to create spot fires.
The intense radiation and accompanying heat and smoke fanned by fierce winds of up to 100 km/h decimated whole townships as no dwelling was spared. In some towns everything was raised to the ground whilst in others up to 50% were destroyed.
The death toll continues to rise as emergency fire teams and the army gain entry to previously completely inaccessible hostile regions captive to the raging fire. But new spot fires continue to ignite dense nationl parkland areas in addition to those fires which are already burning out of control and threatening the Glenhope area north of Melbourne and towns of Beechworth and Yackandandah in the northeast.
Our family and close friends are all safe and their homes are intact but a good friend of my wife lost her house whilst another's grandson has perished.
That is the the news for the moment- "The nation should brace itself for a very challenging time ahead," said Prime Minster Kevin Rudd - see his interview here.
Monday, February 9
Friday, February 6
Reverence for life
Reverence for life is terms not widely used today but a Google search will easily identify those words with Albert Schweitzer.
I was first interested in his writings in my youth, but it wasn’t till much later as a member of a monthly friends philosophical monthly meeting that I revisited that interest to present a brief paper on his life and thought.
I have decided to update that paper which is now included below.
In researching his life I was drawn to a quotation by Sir Winston Churchill: “We shape our strategies and then they shape us,”since that applied to Schweitzer throughout his long and dedicated life devoted to serving others.
Firstly after obtaining Doctorates in philosophy and theology and establishing himself in academia he felt the call to be a jungle Doctor. It was during his time in Africa that he abandoned his incomplete work on the Mystercism of St Paul to return to the Philosophy of Civilization in an attempt to provide a philosophy which would guard against the terrors of war which he witnessed first hand.
During this period he gained his “insight” on the “Reverence for Life” principles.
I will begin with a brief outline of his life and thoughts, attempt to explain his interesting philosophy, then follow with selected quotations that provide further valuable insight and finally talk about the effect of his thinking and his enduring legacy.
A Brief Outline of His Life and Thought.
Albert Schweitzer was born in Alsace in Germany (later to be annexed to France) as the son of a Lutheran Pastor in what was then a predominantly Catholic place. He showed extraordinary skill as a youthful organist under the tutilige of Europe’s finest professionals.
In adulthood he was both an acclaimed concert artist and a sought after speaker of sufficient popularity so that during those brief periods whilst engaged he was able to fund his beloved African Hospital.
His early life was dominated by music and academic research with a brief interruption for compulsory military service before obtaining in 1900 Drs of Philosophy and Theology and a post as Professor of Theology.
In 1903 he became Principal of the theological seminary of St Thomas in Srassburg. At that time in his life he recalls his delight in teaching the simple Biblical truths to students in the hope his teaching would provide a refuge against life’s stormy weather. Students in later life thanked him, stating their faith would not have survived the “cruel sea of doubt” of life’s existence had it not been so firmly secured.
His published theological research at times was contrary to conventional wisdom as he did not accept that the Gospels (Mark, Matthew Luke & John) represented a collection only of Jesus’ sayings interwoven loosely with his life story. He contended that the expectation of the Messianic Jewish belief that the “End of the World” was imminent influenced profoundly many of Jesus’ sayings.
Hence his interpretation was that Jesus and the Gospels can only be understood from the point of view of the false eschatology that permeated Jewish thinking at that time based on the expectation the end of the world would occur within their lifetime.
Schweitzer contended Jesus’ ideal love could be replanted from within the original metaphysics background from which it arose, just as his philosophical insight on the idea of reverence for life could likewise bear fruit.
In 1905 after reading an article in the Paris Missionary Society describing the desperate need for medical doctors in Africa in the region then known as the Congo he decided to enlist and change his life course.
It was to shape the rest of his life.
Once he decided to become a jungle Doctor he was ridiculed by friends and academia that put a fist in his heart so to speak arguing he could do more from his existing privileged position in society than to undertake such a rigorous long course of study.
In 1913 as a qualified Doctor he departed for Lambarene with his wife (whom he had married the previous year) and who was to be of incalculable support in the Hospital and as a research assistant over the next 40 years. His base remained at Lambarene for the reminder of his life except for internment during World War 1.
However it was the outbreak of hostilities in 1914 that triggered within him the change of heart to abandon his nearly completed work for publication on the Mystercism of St Paul and return to the Philosophy of Civilization. His writings in this book contain his famous Insight” on the "Reverence for Life” principle.
His achievements were recognized in 1952 when he was awarded the Nobel Peace Prize and later he formed collaborations with the leaders at that time including Bertrand Russell and John F Kennedy.
In 1958 he made calls on radio Oslo for the abandonment of nuclear tests and the production of atomic bombs.
He passed away in 1965 but his spirit continues today in enduring ethical thought and work.
His philosophy – Reverence for life
It is difficult to describe what is meant in a few sentences but his theory acknowledges the reality of our own conscious will to live and all that is around us. Reverence for Life is the end result of a fusing of ethical principles within our conscious will to live and hence world and life affirmation. It is the spiritual act in which one ceases to live unreflectively but adopts a reverence for all life in order to raise it true value. Its aim is to create values, and to realize progress of different kinds, which shall serve the material, spiritual and ethical development of mankind.
At first glance one might regard these ideas as somewhat vague but on further analysis they represent much more deep thinking than appears at the outset and his philosophy become very interesting. I will attempt to expand what I think he meant in a little more detail.
Firstly Schweitzer was a believer in rational thought and as a Scientist his philosophy followed a rationale that sought to find a way through the fog of the present day decay of civilization as he saw it evidenced in the ultimate horror of War. Schweitzer abhorred philosophical abstract thinking and believed in the reality of life and the will to live that enveloped all life. I am life he said ‘in the midst of all life that wills to live’.
In that respect he shared similar views with Nietzsche and Arthur Schopenhauer insofar as either adopted a will to live or will to power in recognition of our natural biological reality.
But there is where it ended for Schweitzer who contended that such a will to live in itself cannot be confused by attempting to obscure its reality with abstract values that nullify our existence or conclude that the only way forward is withdrawal from the world we live in. Hence he wanted to introduce ethics into philosophy but not of the kind that attempts to define them in the sense they become simplistic rules or represent enslavement to someone else’s abstract values. Similarly Schweitzer resisted any attempt to grade life based upon whether or not that life might have feelings which in turn would determine our ethical stance towards it but rather his ethics were based upon mysticism; a seeming contradiction in itself. Schweitzer contended the values of compassion and empathy for all living things will become self evident when we adopt a reflective reverence for all life which in essence is a spiritual dimension based upon a practical life affirmation.
Reverence for life harnesses our emotive compassion for all living things that will to live as we will to live in our ongoing relationship in the world which will be manifested instinctively in our service to humanity.
Hence reverence for life includes a reverence for our own lives and Schweitzer was not against self defense and common sense dictating some form of killing but only as was necessary for survival.
Rather what he wanted us to avoid is the ethics of expediency.
Schweitzer’s philosophy concluded that the failure of civilization was due to the failure to show reverence to all life (not just human life) which has led to the decline of civilization and the decimation of our spirituality. In that sense his philosophy has some affinity with Buddhism concerned for all sentient beings but he also contended it made no sense for one to conclude the only sensible thing is to withdraw from the world, since his philosophy is life affirming.
Hence his insight to show reverence to all life involved a change in thinking to embrace the ethic of love in life to live our life to the fullest in the service of life within its midst and to alleviate suffering in the most practical ways possible in accord with our natural spiritual dimension or instinct in harmony with nature.
Selected Quotations and extracts
Schweitzer was also influenced by Goethe who he admired and completed 4 studies into his work.
Here is an extract …..Goethe is well aware that in all the thoughts of guilt and guilt-consciousness with which we are occupied we are touching upon a great secret which we cannot comprehend and cannot fathom. He surmises, however, that the power which guilt seems to have over us is not appointed to destroy us, but in the end must contribute to our purification. ... When guilt begins to operate in a man he is on the way to salvation through the unfathomable secret of love, which penetrates into the darkness of earth like a beam of eternal light."
On Life
Anyone who proposes to do well must not expect people to roll stones out of his way, but must accept his lot calmly if they roll a few more upon it.
The most valuable knowledge we can have is how to deal with disappointments.
Religion & Philosophy
Any religion or philosophy which is not based upon a respect for life is not a true religion or philosophy.
It is good to maintain life and further life, it is bad to destroy life. And this ethic, profound, universal has the significance of a religion. It is religion.
When we observe contemporary society one thing strikes us. We debate but make no progress. Why? Because as people we do not trust one another.
Because I have confidence in the power of truth and of the spirit, I believe in the future of mankind.
Nature and the Environment
Never say there is nothing beautiful in the world any more. There is always something to make you wonder in the shape of a tree, the trembling of a leaf.
The deeper we look into nature the more profoundly we know that it is sacred and we are united to this life.
The effect of his writings on religious and secular communities.
His quest for truth and the spirit of “liberty” as he put it at times led him to conclusions on biblical interpretation at variance to accepted orthodoxy. Indeed they cost him some considerable hardship with the Parisian Missionary Society for his strict instructions as a Jungle Doctor was to refrain from any form of religious discourse with the locals for fear he might introduce them to some doctrinal errors.
However at the insistence of the missionaries at Lambarene the Parisian Missionary Society relented on their embargo as the realization slowly sunk in that his views in no way contradicted the simple gospel of salvation understandable by the local inhabitants.
His attitude to African culture was not to try and change their way of life to ours but to serve their physical and spiritual needs. His approach was the forerunner to to-days generally accepted missionary objectives seeking to include cultural aspects and tradition within worship and Christian life practices.
His life as a devout Christian had a profound effect on the Christian community at large as although the shadow of sacrifice hung over his life he was able to “find his life.”Whosoever loses his life for my sake shall find it”.
When he left for Africa he was prepared to make 3 sacrifices.
1. To lose his financial independence and become reliant for the rest of his life on donations from friends.
2. Discontinue his career as Concert artist.
3. Renounce academic teaching and lecturing activities.
However to his great joy found himself in the same position.The Paris Bach Society donated a piano with organ pedals specially adapted to the tropics.
He was able to return (between long intervals in Africa) to Europe as an esteemed professional as his performances continued to grow in popularity.
He was only totally reliant on the financial help of others for a short period as his publications and acclaimed recitals soon made him financially independent.He was also highly acclaimed and sought after as a Lecturer in Europe and in the leading universities in the USA.
Effect on Society.
Schweitzer was clearly ahead of his time in calling for the human treatment of animals in medical experiments and in food production and today many such organizations continue to quote selectively from many of his publications.
His reverence for life principle continues under the Albert Schweitzer Foundation supporting ethically based aid and educational projects.His work is of appeal to any group that has a common interest in the general wellbeing of peoples around the world.However in the earlier post 2nd World War period his thoughts were of great appeal to a society ravaged by war and mindful of the need to establish a new “world order” to prevent a recurrence of past atrocities. Invitations flowed to him to give lectures abroad from world-renowned academic, ecclesiastical and musical bodies.
His view was eagerly sought after and at times he must have felt some satisfaction as it is recorded “He dashed off a letter to John F Kennedy congratulating him on his recent peace initiatives”.
Legacy
His enduring legacy of thought contained within his writings on “Reverence for Life” provides a “Bridge over troubled waters” for to-days contemporary society.
Its enduring interest is in the bridge his philosophy creates between Christian orthodoxy and a naturalistic world view which contends plants, animals, and humans all interact in complex chains of interdependency, thus we are all united with nature and dependant upon it for our existence.
He was a philosopher that both acknowledged that competition and killing were essential elements to the survival of the food chain but perhaps of far greater importance was the cooperation and tolerance which have evolved in the shared struggle of survival. The ethical consideration as to ultimate sustainability can have no better focus than that aligned to the "Reverence for Life" principle. It blends in with concerns over “Mother Earth” and her ultimate sustainability in the face of depletion, waste and pollution attributable to mankind.
The missing link is the principle that establishes our conscious “will to live” that affirms our relationship with the world but requires us to create values that in turn generate outcomes sustainable to all life. In essence Schweitzer was ahead of his times and one of the first modern day philosophers to introduce to us a life affirming bio centered ethics.
The ethical basis contained within the "reverence for Life” principle is then the essence of the way forwards as the global village becomes more and more interwoven. This is essential if globalization is to become civilized and deliver benefits in a uniform manner to all mankind.
I was first interested in his writings in my youth, but it wasn’t till much later as a member of a monthly friends philosophical monthly meeting that I revisited that interest to present a brief paper on his life and thought.
I have decided to update that paper which is now included below.
In researching his life I was drawn to a quotation by Sir Winston Churchill: “We shape our strategies and then they shape us,”since that applied to Schweitzer throughout his long and dedicated life devoted to serving others.
Firstly after obtaining Doctorates in philosophy and theology and establishing himself in academia he felt the call to be a jungle Doctor. It was during his time in Africa that he abandoned his incomplete work on the Mystercism of St Paul to return to the Philosophy of Civilization in an attempt to provide a philosophy which would guard against the terrors of war which he witnessed first hand.
During this period he gained his “insight” on the “Reverence for Life” principles.
I will begin with a brief outline of his life and thoughts, attempt to explain his interesting philosophy, then follow with selected quotations that provide further valuable insight and finally talk about the effect of his thinking and his enduring legacy.
A Brief Outline of His Life and Thought.
Albert Schweitzer was born in Alsace in Germany (later to be annexed to France) as the son of a Lutheran Pastor in what was then a predominantly Catholic place. He showed extraordinary skill as a youthful organist under the tutilige of Europe’s finest professionals.
In adulthood he was both an acclaimed concert artist and a sought after speaker of sufficient popularity so that during those brief periods whilst engaged he was able to fund his beloved African Hospital.
His early life was dominated by music and academic research with a brief interruption for compulsory military service before obtaining in 1900 Drs of Philosophy and Theology and a post as Professor of Theology.
In 1903 he became Principal of the theological seminary of St Thomas in Srassburg. At that time in his life he recalls his delight in teaching the simple Biblical truths to students in the hope his teaching would provide a refuge against life’s stormy weather. Students in later life thanked him, stating their faith would not have survived the “cruel sea of doubt” of life’s existence had it not been so firmly secured.
His published theological research at times was contrary to conventional wisdom as he did not accept that the Gospels (Mark, Matthew Luke & John) represented a collection only of Jesus’ sayings interwoven loosely with his life story. He contended that the expectation of the Messianic Jewish belief that the “End of the World” was imminent influenced profoundly many of Jesus’ sayings.
Hence his interpretation was that Jesus and the Gospels can only be understood from the point of view of the false eschatology that permeated Jewish thinking at that time based on the expectation the end of the world would occur within their lifetime.
Schweitzer contended Jesus’ ideal love could be replanted from within the original metaphysics background from which it arose, just as his philosophical insight on the idea of reverence for life could likewise bear fruit.
In 1905 after reading an article in the Paris Missionary Society describing the desperate need for medical doctors in Africa in the region then known as the Congo he decided to enlist and change his life course.
It was to shape the rest of his life.
Once he decided to become a jungle Doctor he was ridiculed by friends and academia that put a fist in his heart so to speak arguing he could do more from his existing privileged position in society than to undertake such a rigorous long course of study.
In 1913 as a qualified Doctor he departed for Lambarene with his wife (whom he had married the previous year) and who was to be of incalculable support in the Hospital and as a research assistant over the next 40 years. His base remained at Lambarene for the reminder of his life except for internment during World War 1.
However it was the outbreak of hostilities in 1914 that triggered within him the change of heart to abandon his nearly completed work for publication on the Mystercism of St Paul and return to the Philosophy of Civilization. His writings in this book contain his famous Insight” on the "Reverence for Life” principle.
His achievements were recognized in 1952 when he was awarded the Nobel Peace Prize and later he formed collaborations with the leaders at that time including Bertrand Russell and John F Kennedy.
In 1958 he made calls on radio Oslo for the abandonment of nuclear tests and the production of atomic bombs.
He passed away in 1965 but his spirit continues today in enduring ethical thought and work.
His philosophy – Reverence for life
It is difficult to describe what is meant in a few sentences but his theory acknowledges the reality of our own conscious will to live and all that is around us. Reverence for Life is the end result of a fusing of ethical principles within our conscious will to live and hence world and life affirmation. It is the spiritual act in which one ceases to live unreflectively but adopts a reverence for all life in order to raise it true value. Its aim is to create values, and to realize progress of different kinds, which shall serve the material, spiritual and ethical development of mankind.
At first glance one might regard these ideas as somewhat vague but on further analysis they represent much more deep thinking than appears at the outset and his philosophy become very interesting. I will attempt to expand what I think he meant in a little more detail.
Firstly Schweitzer was a believer in rational thought and as a Scientist his philosophy followed a rationale that sought to find a way through the fog of the present day decay of civilization as he saw it evidenced in the ultimate horror of War. Schweitzer abhorred philosophical abstract thinking and believed in the reality of life and the will to live that enveloped all life. I am life he said ‘in the midst of all life that wills to live’.
In that respect he shared similar views with Nietzsche and Arthur Schopenhauer insofar as either adopted a will to live or will to power in recognition of our natural biological reality.
But there is where it ended for Schweitzer who contended that such a will to live in itself cannot be confused by attempting to obscure its reality with abstract values that nullify our existence or conclude that the only way forward is withdrawal from the world we live in. Hence he wanted to introduce ethics into philosophy but not of the kind that attempts to define them in the sense they become simplistic rules or represent enslavement to someone else’s abstract values. Similarly Schweitzer resisted any attempt to grade life based upon whether or not that life might have feelings which in turn would determine our ethical stance towards it but rather his ethics were based upon mysticism; a seeming contradiction in itself. Schweitzer contended the values of compassion and empathy for all living things will become self evident when we adopt a reflective reverence for all life which in essence is a spiritual dimension based upon a practical life affirmation.
Reverence for life harnesses our emotive compassion for all living things that will to live as we will to live in our ongoing relationship in the world which will be manifested instinctively in our service to humanity.
Hence reverence for life includes a reverence for our own lives and Schweitzer was not against self defense and common sense dictating some form of killing but only as was necessary for survival.
Rather what he wanted us to avoid is the ethics of expediency.
Schweitzer’s philosophy concluded that the failure of civilization was due to the failure to show reverence to all life (not just human life) which has led to the decline of civilization and the decimation of our spirituality. In that sense his philosophy has some affinity with Buddhism concerned for all sentient beings but he also contended it made no sense for one to conclude the only sensible thing is to withdraw from the world, since his philosophy is life affirming.
Hence his insight to show reverence to all life involved a change in thinking to embrace the ethic of love in life to live our life to the fullest in the service of life within its midst and to alleviate suffering in the most practical ways possible in accord with our natural spiritual dimension or instinct in harmony with nature.
Selected Quotations and extracts
Schweitzer was also influenced by Goethe who he admired and completed 4 studies into his work.
Here is an extract …..Goethe is well aware that in all the thoughts of guilt and guilt-consciousness with which we are occupied we are touching upon a great secret which we cannot comprehend and cannot fathom. He surmises, however, that the power which guilt seems to have over us is not appointed to destroy us, but in the end must contribute to our purification. ... When guilt begins to operate in a man he is on the way to salvation through the unfathomable secret of love, which penetrates into the darkness of earth like a beam of eternal light."
On Life
Anyone who proposes to do well must not expect people to roll stones out of his way, but must accept his lot calmly if they roll a few more upon it.
The most valuable knowledge we can have is how to deal with disappointments.
Religion & Philosophy
Any religion or philosophy which is not based upon a respect for life is not a true religion or philosophy.
It is good to maintain life and further life, it is bad to destroy life. And this ethic, profound, universal has the significance of a religion. It is religion.
When we observe contemporary society one thing strikes us. We debate but make no progress. Why? Because as people we do not trust one another.
Because I have confidence in the power of truth and of the spirit, I believe in the future of mankind.
Nature and the Environment
Never say there is nothing beautiful in the world any more. There is always something to make you wonder in the shape of a tree, the trembling of a leaf.
The deeper we look into nature the more profoundly we know that it is sacred and we are united to this life.
The effect of his writings on religious and secular communities.
His quest for truth and the spirit of “liberty” as he put it at times led him to conclusions on biblical interpretation at variance to accepted orthodoxy. Indeed they cost him some considerable hardship with the Parisian Missionary Society for his strict instructions as a Jungle Doctor was to refrain from any form of religious discourse with the locals for fear he might introduce them to some doctrinal errors.
However at the insistence of the missionaries at Lambarene the Parisian Missionary Society relented on their embargo as the realization slowly sunk in that his views in no way contradicted the simple gospel of salvation understandable by the local inhabitants.
His attitude to African culture was not to try and change their way of life to ours but to serve their physical and spiritual needs. His approach was the forerunner to to-days generally accepted missionary objectives seeking to include cultural aspects and tradition within worship and Christian life practices.
His life as a devout Christian had a profound effect on the Christian community at large as although the shadow of sacrifice hung over his life he was able to “find his life.”Whosoever loses his life for my sake shall find it”.
When he left for Africa he was prepared to make 3 sacrifices.
1. To lose his financial independence and become reliant for the rest of his life on donations from friends.
2. Discontinue his career as Concert artist.
3. Renounce academic teaching and lecturing activities.
However to his great joy found himself in the same position.The Paris Bach Society donated a piano with organ pedals specially adapted to the tropics.
He was able to return (between long intervals in Africa) to Europe as an esteemed professional as his performances continued to grow in popularity.
He was only totally reliant on the financial help of others for a short period as his publications and acclaimed recitals soon made him financially independent.He was also highly acclaimed and sought after as a Lecturer in Europe and in the leading universities in the USA.
Effect on Society.
Schweitzer was clearly ahead of his time in calling for the human treatment of animals in medical experiments and in food production and today many such organizations continue to quote selectively from many of his publications.
His reverence for life principle continues under the Albert Schweitzer Foundation supporting ethically based aid and educational projects.His work is of appeal to any group that has a common interest in the general wellbeing of peoples around the world.However in the earlier post 2nd World War period his thoughts were of great appeal to a society ravaged by war and mindful of the need to establish a new “world order” to prevent a recurrence of past atrocities. Invitations flowed to him to give lectures abroad from world-renowned academic, ecclesiastical and musical bodies.
His view was eagerly sought after and at times he must have felt some satisfaction as it is recorded “He dashed off a letter to John F Kennedy congratulating him on his recent peace initiatives”.
Legacy
His enduring legacy of thought contained within his writings on “Reverence for Life” provides a “Bridge over troubled waters” for to-days contemporary society.
Its enduring interest is in the bridge his philosophy creates between Christian orthodoxy and a naturalistic world view which contends plants, animals, and humans all interact in complex chains of interdependency, thus we are all united with nature and dependant upon it for our existence.
He was a philosopher that both acknowledged that competition and killing were essential elements to the survival of the food chain but perhaps of far greater importance was the cooperation and tolerance which have evolved in the shared struggle of survival. The ethical consideration as to ultimate sustainability can have no better focus than that aligned to the "Reverence for Life" principle. It blends in with concerns over “Mother Earth” and her ultimate sustainability in the face of depletion, waste and pollution attributable to mankind.
The missing link is the principle that establishes our conscious “will to live” that affirms our relationship with the world but requires us to create values that in turn generate outcomes sustainable to all life. In essence Schweitzer was ahead of his times and one of the first modern day philosophers to introduce to us a life affirming bio centered ethics.
The ethical basis contained within the "reverence for Life” principle is then the essence of the way forwards as the global village becomes more and more interwoven. This is essential if globalization is to become civilized and deliver benefits in a uniform manner to all mankind.
Thursday, January 22
Would you eat genetically modified food
Our immediate reaction may be to say we would avoid eating GMF based food due to the risk to our food source and possibile undesirable long term side effects.
But it is a difficult question becuase of the complex biology and many conflicting scientific views concerning GMF’s safety or otherwise. Patented GM food also represents a concentration of control and ownership over the global food cycle which similiarily applies to new medical discoveries and drugs. The legal protection afforded new patented discoveries with royalty rewards is usually reasonable enough, however whether or not a revision is pertinent to GM foods and medicines (which universally affect our wellbeing) is an unduly complex matter better suited to a separate future posting.
There are many claimed advantages to GMF; reduced need for fertilizers whose run off results in huge problems of leaching into adjoining lands and river systems, more drought tolerant features which conserve our precious water, crops that are resistant to diseases, improved yields and so forth versus the risks of a reduction in our crop diversity, the risk of possible (as yet unquantifiable scientific data as to why this should happen ) undesirable long term biological changes such as the release of killer viruses or contagion to micro orgasms which might attack us and to which we may not be able to find a cure, the risk that the claimed advantages are overstated and the concentration of an exclusive DNA based complex technology to hold poor countries and farmers to ransom.
What is GMF food?
One contentious point concerns the definition itself and the reluctance in many commentaries to succinctly provide an easily understood definition. What we are talking about is any activity that alters genes, (genetically modified) since genes are units of genetic material which make up a string of DNA which enables or carries the directions for cells to perform a specific function.
A definition
GMF must involve the modification of DNA by man made intervention.
If such a definition is appropriate, and it seems to me it is, then we have been consuming genetically modified food for thousands of years; from the time when homo- sapiens first made the major transition from a society of hunter- gatherers to communities supported by harvested agriculture able to sustain its inhabitants beween seasons. Archeological evidence confirms agricultural communities engaged in a wide variety of genetic engineering; in selective breeding, cross pollination and in taking cuttings for subsequent regeneration of altered plant genealogy, since all plants are capable of a single cell development. They generated many new species which not only improved crop yields but were more suited to the rapidly changing weather patterns following the end of the last Ice age.
The proponents of genetic engineering argue they are continuing this age old tradition by using methods such as naturally occurring soil bacteria as the agent to change plant genealogy and alter its DNA composition for improved outcomes. What is clear however is that this new technology represents a much more rapid alteration of a plants genealogy than what occurred in the past and hence its long term effects remain unknown.
Current GMF procedures use an agent (such as soil bacteria) to infuse the desired gene and marker genes to indicate changes within a plant’s DNA. Proponents of GMH counter the argument about long term unforeseen biological risks to remind us that we have been consuming plant genes for thousands of years for no known ill effects, nor have we suffered from soil bacteria present in the soil or marker genes which are no different to any other gene. Problems have arisen much more to do with the domestication and breeding from wild animals for human food comsumption which exposed us to new viruses and pathogens.
Naturally enough there will not always be general agreement between farmers as to the best way to farm alongside nature. There are the large scale technologically based farming that is more reliant on chemicals versus those in favour of a more bio diversified approach that relies more on nature for its sustainability.
Some farmers are keen on the GMH technology while others are more wary or totally against it since they fear it will contaminate their existing crops. Farmers have already tentatively adopted the latest technology and GMH crops have been grown in over 22 different countries by over 10 million farmers from the early nineties.
In Australia in Victoria the government has recently reversed a long standing ban on the planting of genetically modified canola to allow farmers to adopt this technology.
How long ago did GMF first begin?
The latest scientific research puts the time frame for agriculture at about 10,000 years ago (although some assert the date to be as early as 13,000 years as the world emerged from the 'Ice age' ) when the earliest experiments arose in genetic engineering as farmers created the first maize crop from Mexican wild grass. See http://www.sciencedaily.com/releases/2008/06/080626075534.htm
Hence humans for the past 10,000 to 13,000 years or so have practiced this form of gene manipulation to create food combinations that otherwise would never have evolved naturally. Practically all of the cereal crops and fruit we consume today have already been genetically modified in one way or another in the past. In the natural plant world there are an enormous number of compounds that are produced and chemicals to make them attractive or otherwise to bugs. Some are beneficial for humans, some benign and others reach very high degrees of toxicity. Nature uses many different interesting forms of chemical reactions such as ants who have been so engaged in genetic engineering for over 50,000 years. See http://www.innovations-report.com/html/reports/life_sciences/report-38311.html
Selective breeding of plants is also a form of genetic engineering, e.g., only those plants that have the desired characteristics are chosen for further breeding and so on and until such time as a resistant strain is found. If you wanted to create a corn resistant to a fungus, you plant corn and observe how individual plants react to the fungus, replanting the seeds least effected and so until you have created that strain best resistant to the fungus in question.
It is also true that many new species have been bred in this selective manner to reduce the initial harmful known level of toxicity to acceptable levels so that the new variety can be safely added to the human food choice.
What's the different about modern day GMF processes
In the past the practices involved thousands of new genes being added to existing plant genealogy and so the effects were more of a lottery spread over longer periods until the best results were finally achieved whereas today the technology allows for single rapid gene changes. Hence genetic based laboratory engineering is now more specific as it allows scientists to select a single gene for a single characteristic and transfer that DNA from one organism to another - even between different species. When scientists genetically modify plants they do so by inserting another gene into the plants existing genes. Only a small number of cells will take up the new gene which will be identified by marker genes for subsequent collection. There are many different biotech technologies used to subsequently infuse the genetically modified plant tissue into plants such as by using soil bacterium as the agent.
The plant seeds are then grown to ensure the gene modification remains intact. Sometimes the gene technology works by effectively 'switching off 'a particular gene characteristic such as allowing fruit to ripen more slowly which diminishes its wastage during packing and transportation.
Conclusion
Once you undertake research into this question what emerges are many shades of grey rather than the definitive answers that seem to fiercely divide communities who are either emphatically for or against GMF Food.
I am afraid there is no common methodology when dealing with nature and how to respect and learn from her. At the end of the day it is more to do adaption and contined vigilance than anythng else. Mankind has been attempting to mimic nature from time in memorial and our endeavors in genetic modification are no exception.
Hence it would be a very good outcome if the sensible genetic modification of crops was able to substantially reduce our reliance on both herbicides and pesticides and lead to more nutritious agriculture. The burning question however is whether or not it is injurious to long term health and to the environment. So far no direct link or undesirable health effects are known, albeit recent large scale production only dates back to the period from the early nineties. Certainly it is important we maintain seed banks of existing types and varieties so that in the future larger scale agriculture is not wholly dependant upon a handful of varieties.
It seems sensible then to proceed slowly and observe the outcomes of GNF crops for any unforeseen heath outcomes.
Food is our source of security and constant vigilance is required over its safety and in understanding through food labeling what we are consuming.
Currently there is a global treaty, called the BioSafety Protocol which regulates any trade in genetically modified food. The EU requires all GMF foods to be labeled, as apposed to the US which does not require transparent labeling of GMF foods.
I think as there are unanwered questions regarding the safety and risks associated with GMF foods, the public should be given the freedom of choice about what they are eating and hence all GMO products should be appropriately labeled. The European Union legislation provides the best approach in the form of labeling -the presence of gene-modified elements must be stated on food packaging if any ingredient contains more than 0.9 per cent of gene-modified components.
The national Academies Press in their comprehensive report indicate some concerns over the results of animal testing but I agree with the overall conclusion of this independent research institution as stated:
Genetic engineering is one of the newer technologies available to produce desirable traits in plants and animals used for food, but it poses no unique health risks that cannot also arise from conventional breeding and other genetic alteration methods. Any of those methods could result in unintended changes in the composition of the food.
The report concludes that all altered foods should be assessed on a case-by-case basis before they are sold to the public to determine whether unintended changes in the composition of the food could adversely affect human health. Surveillance after a food is on the market might also be needed in some cases. See http://www.nap.edu/catalog.php?record_id=10977 for the full report.
But it is a difficult question becuase of the complex biology and many conflicting scientific views concerning GMF’s safety or otherwise. Patented GM food also represents a concentration of control and ownership over the global food cycle which similiarily applies to new medical discoveries and drugs. The legal protection afforded new patented discoveries with royalty rewards is usually reasonable enough, however whether or not a revision is pertinent to GM foods and medicines (which universally affect our wellbeing) is an unduly complex matter better suited to a separate future posting.
There are many claimed advantages to GMF; reduced need for fertilizers whose run off results in huge problems of leaching into adjoining lands and river systems, more drought tolerant features which conserve our precious water, crops that are resistant to diseases, improved yields and so forth versus the risks of a reduction in our crop diversity, the risk of possible (as yet unquantifiable scientific data as to why this should happen ) undesirable long term biological changes such as the release of killer viruses or contagion to micro orgasms which might attack us and to which we may not be able to find a cure, the risk that the claimed advantages are overstated and the concentration of an exclusive DNA based complex technology to hold poor countries and farmers to ransom.
What is GMF food?
One contentious point concerns the definition itself and the reluctance in many commentaries to succinctly provide an easily understood definition. What we are talking about is any activity that alters genes, (genetically modified) since genes are units of genetic material which make up a string of DNA which enables or carries the directions for cells to perform a specific function.
A definition
GMF must involve the modification of DNA by man made intervention.
If such a definition is appropriate, and it seems to me it is, then we have been consuming genetically modified food for thousands of years; from the time when homo- sapiens first made the major transition from a society of hunter- gatherers to communities supported by harvested agriculture able to sustain its inhabitants beween seasons. Archeological evidence confirms agricultural communities engaged in a wide variety of genetic engineering; in selective breeding, cross pollination and in taking cuttings for subsequent regeneration of altered plant genealogy, since all plants are capable of a single cell development. They generated many new species which not only improved crop yields but were more suited to the rapidly changing weather patterns following the end of the last Ice age.
The proponents of genetic engineering argue they are continuing this age old tradition by using methods such as naturally occurring soil bacteria as the agent to change plant genealogy and alter its DNA composition for improved outcomes. What is clear however is that this new technology represents a much more rapid alteration of a plants genealogy than what occurred in the past and hence its long term effects remain unknown.
Current GMF procedures use an agent (such as soil bacteria) to infuse the desired gene and marker genes to indicate changes within a plant’s DNA. Proponents of GMH counter the argument about long term unforeseen biological risks to remind us that we have been consuming plant genes for thousands of years for no known ill effects, nor have we suffered from soil bacteria present in the soil or marker genes which are no different to any other gene. Problems have arisen much more to do with the domestication and breeding from wild animals for human food comsumption which exposed us to new viruses and pathogens.
Naturally enough there will not always be general agreement between farmers as to the best way to farm alongside nature. There are the large scale technologically based farming that is more reliant on chemicals versus those in favour of a more bio diversified approach that relies more on nature for its sustainability.
Some farmers are keen on the GMH technology while others are more wary or totally against it since they fear it will contaminate their existing crops. Farmers have already tentatively adopted the latest technology and GMH crops have been grown in over 22 different countries by over 10 million farmers from the early nineties.
In Australia in Victoria the government has recently reversed a long standing ban on the planting of genetically modified canola to allow farmers to adopt this technology.
How long ago did GMF first begin?
The latest scientific research puts the time frame for agriculture at about 10,000 years ago (although some assert the date to be as early as 13,000 years as the world emerged from the 'Ice age' ) when the earliest experiments arose in genetic engineering as farmers created the first maize crop from Mexican wild grass. See http://www.sciencedaily.com/releases/2008/06/080626075534.htm
Hence humans for the past 10,000 to 13,000 years or so have practiced this form of gene manipulation to create food combinations that otherwise would never have evolved naturally. Practically all of the cereal crops and fruit we consume today have already been genetically modified in one way or another in the past. In the natural plant world there are an enormous number of compounds that are produced and chemicals to make them attractive or otherwise to bugs. Some are beneficial for humans, some benign and others reach very high degrees of toxicity. Nature uses many different interesting forms of chemical reactions such as ants who have been so engaged in genetic engineering for over 50,000 years. See http://www.innovations-report.com/html/reports/life_sciences/report-38311.html
Selective breeding of plants is also a form of genetic engineering, e.g., only those plants that have the desired characteristics are chosen for further breeding and so on and until such time as a resistant strain is found. If you wanted to create a corn resistant to a fungus, you plant corn and observe how individual plants react to the fungus, replanting the seeds least effected and so until you have created that strain best resistant to the fungus in question.
It is also true that many new species have been bred in this selective manner to reduce the initial harmful known level of toxicity to acceptable levels so that the new variety can be safely added to the human food choice.
What's the different about modern day GMF processes
In the past the practices involved thousands of new genes being added to existing plant genealogy and so the effects were more of a lottery spread over longer periods until the best results were finally achieved whereas today the technology allows for single rapid gene changes. Hence genetic based laboratory engineering is now more specific as it allows scientists to select a single gene for a single characteristic and transfer that DNA from one organism to another - even between different species. When scientists genetically modify plants they do so by inserting another gene into the plants existing genes. Only a small number of cells will take up the new gene which will be identified by marker genes for subsequent collection. There are many different biotech technologies used to subsequently infuse the genetically modified plant tissue into plants such as by using soil bacterium as the agent.
The plant seeds are then grown to ensure the gene modification remains intact. Sometimes the gene technology works by effectively 'switching off 'a particular gene characteristic such as allowing fruit to ripen more slowly which diminishes its wastage during packing and transportation.
Conclusion
Once you undertake research into this question what emerges are many shades of grey rather than the definitive answers that seem to fiercely divide communities who are either emphatically for or against GMF Food.
I am afraid there is no common methodology when dealing with nature and how to respect and learn from her. At the end of the day it is more to do adaption and contined vigilance than anythng else. Mankind has been attempting to mimic nature from time in memorial and our endeavors in genetic modification are no exception.
Hence it would be a very good outcome if the sensible genetic modification of crops was able to substantially reduce our reliance on both herbicides and pesticides and lead to more nutritious agriculture. The burning question however is whether or not it is injurious to long term health and to the environment. So far no direct link or undesirable health effects are known, albeit recent large scale production only dates back to the period from the early nineties. Certainly it is important we maintain seed banks of existing types and varieties so that in the future larger scale agriculture is not wholly dependant upon a handful of varieties.
It seems sensible then to proceed slowly and observe the outcomes of GNF crops for any unforeseen heath outcomes.
Food is our source of security and constant vigilance is required over its safety and in understanding through food labeling what we are consuming.
Currently there is a global treaty, called the BioSafety Protocol which regulates any trade in genetically modified food. The EU requires all GMF foods to be labeled, as apposed to the US which does not require transparent labeling of GMF foods.
I think as there are unanwered questions regarding the safety and risks associated with GMF foods, the public should be given the freedom of choice about what they are eating and hence all GMO products should be appropriately labeled. The European Union legislation provides the best approach in the form of labeling -the presence of gene-modified elements must be stated on food packaging if any ingredient contains more than 0.9 per cent of gene-modified components.
The national Academies Press in their comprehensive report indicate some concerns over the results of animal testing but I agree with the overall conclusion of this independent research institution as stated:
Genetic engineering is one of the newer technologies available to produce desirable traits in plants and animals used for food, but it poses no unique health risks that cannot also arise from conventional breeding and other genetic alteration methods. Any of those methods could result in unintended changes in the composition of the food.
The report concludes that all altered foods should be assessed on a case-by-case basis before they are sold to the public to determine whether unintended changes in the composition of the food could adversely affect human health. Surveillance after a food is on the market might also be needed in some cases. See http://www.nap.edu/catalog.php?record_id=10977 for the full report.
Wednesday, January 14
Treat the patient
What has happened to the US bailout package? Ask top Senate Democrat majority leader Harry Reid who said on Tuesday the Senate was likely to approve the $US350 billion package this week as President-elect Barack Obama asked outgoing President George W. Bush to request lawmakers to unlock the second half of the bailout package approved last October. But many are echoing their concern about where the money is going “What we really need is something with more details so that we can truly make those decisions about how the money is gonna be spent," said Democratic senator Ben Nelson who echoed general concern.
But you may recall I agreed with what was originally planned under U.S. Treasury Secretary Henry Paulson’s troubled Asset Relief Program, or TARP.eg that the $700 billion rescue package would be used to repurchase the toxic debt securities held by institutions which were causing the underlying credit crunch and resulting in stalled lending. The amount of toxic debt removed would have been 4/5 times the original value, since the securities to be disposed of through the reverse auction system would have been at a fraction of their original value. In the longer term there was good chance the funds would be fully recovered when the securities were finally liquidated or sold and hence the cost to the taxpayer could be zero. But instead of proceeding on that basis funds were channeled into direct type bulk payments to recapitalize banks and rescue companies including American International Group Inc and Citigroup.
Yet the continued barrier to private investment in financial institutions remains the very large quantity of these toxic assets which remain in the Balance Sheets of the major institutions despite write offs amounting to nearly a trillion dollars. Until this cancer is finally removed the patient will continue to be in a dire position. I think there is real risk the new stimulus package to be approved by incoming president –elect Barrack Obama will be far less effective unless the financial system is itself cleared of the mess with accompanying adequate regulatory control that ensures less reckless risk taking in the future.
But you may recall I agreed with what was originally planned under U.S. Treasury Secretary Henry Paulson’s troubled Asset Relief Program, or TARP.eg that the $700 billion rescue package would be used to repurchase the toxic debt securities held by institutions which were causing the underlying credit crunch and resulting in stalled lending. The amount of toxic debt removed would have been 4/5 times the original value, since the securities to be disposed of through the reverse auction system would have been at a fraction of their original value. In the longer term there was good chance the funds would be fully recovered when the securities were finally liquidated or sold and hence the cost to the taxpayer could be zero. But instead of proceeding on that basis funds were channeled into direct type bulk payments to recapitalize banks and rescue companies including American International Group Inc and Citigroup.
Yet the continued barrier to private investment in financial institutions remains the very large quantity of these toxic assets which remain in the Balance Sheets of the major institutions despite write offs amounting to nearly a trillion dollars. Until this cancer is finally removed the patient will continue to be in a dire position. I think there is real risk the new stimulus package to be approved by incoming president –elect Barrack Obama will be far less effective unless the financial system is itself cleared of the mess with accompanying adequate regulatory control that ensures less reckless risk taking in the future.
Monday, January 5
Old bush track
Fine dust baked along a rivers bush track
Shaded curtains of yellow tree spray
Reflected in eddies and fast currents display
In the noonday stillness, hear the bush rhyme
Resounding chords of the lost dreaming time
When the sky was black and rains never stopped
Until they washed away that old bush track
Hunters and gatherers remembered the flood
No longer have camps by the rivers in the scrub
Those tribes danced to the tune of a hunt
No longer, no more, spear and club now defunct
Sunday, December 21
Gipsland holiday
Monday, December 8
IOU’s back in fashion.
California is the 8th largest ranking economy in the world and is about roughly the same size as Australia. I noticed its Governor Arnold Schwarzenegger recently warned about the likelihood of having to issue warrants (IOU’s) to temporarily satisfy amounts due to contractors for landscaping, carpet cleaning, construction and food services as cash reserves dwindle.
IOU’s were once popular measures to tide you over some difficult times but it then involved trifling amounts generally borrowed out of the Petty Cash tin. It reminds me of a time in the early eighties when I attended a conference is the south of England on behalf of my employer. Having a young family and lacking in financial resources I was delighted to be able to substitute one Business class air fare (because of the long journey) entitlement at no additional cost for 2 economy fares which enabled us to travel and enjoy a holiday afterwards. We found a suitable minder for our young children and left her with some initial money on the basis the balances would be settled when we returned.
But there must have been a misunderstanding since our minder tried valiantly to mange on that initial amount until such time it was realized the children were either going to starve to death or emergency funds would have to be sought; in this case a well orchested raid was made on the contents of the Petty Cash Tin at work. The children were all very relieved when we returned and I hurriedly made good the IOU in case my reputation, already tarnished as a ' skin flint’, become too firmly established.
The trip itself was one of the more memorable and as it turned out we did have a blissful holiday. I was rather busy beforehand and my preparation for the conference itself left a lot to be desired. Bear in mind at that time in the early eighties presentations were rather limited and even basics like power point presentations were unknown. So I was only armed with a hastily procured large map of Australia with few coloured pins for locations and butcher paper on which to scribble a few forlorn facts to my large audience. My concern was heightened to near panic when I was asked by the Communication Manager what technical assistance I needed. Some of the other presentations from other countries were stunning and I soon felt rather foolish. There was nothing left but to grin and bear it.
Fortunately I had heard a half decent joke about Aussies getting lost in a hotel the night before which provided an ideal opener and to my immense relief was greeted with hoots of laughter. I didn’t think many people would be so interested on the business side after that (I had been tipped off a few from the UK were interested in emigrating) and so I abandoned my previous presentation material and confined most of the session to vague discussions about Aussies, Ausssieland, business and all about the country in general combined with some questions and answers.
Nobody seemed to notice the presentation wasn’t about what it was supposed to be.
The rest of the stay was wonderful, scuttling around the south of England in a little Fiat I had borrowed from one of the UK divisions on the off touristy season whilst soaking up some of the best scenerary imaginable in a very pleasant autumn season.
IOU’s were once popular measures to tide you over some difficult times but it then involved trifling amounts generally borrowed out of the Petty Cash tin. It reminds me of a time in the early eighties when I attended a conference is the south of England on behalf of my employer. Having a young family and lacking in financial resources I was delighted to be able to substitute one Business class air fare (because of the long journey) entitlement at no additional cost for 2 economy fares which enabled us to travel and enjoy a holiday afterwards. We found a suitable minder for our young children and left her with some initial money on the basis the balances would be settled when we returned.
But there must have been a misunderstanding since our minder tried valiantly to mange on that initial amount until such time it was realized the children were either going to starve to death or emergency funds would have to be sought; in this case a well orchested raid was made on the contents of the Petty Cash Tin at work. The children were all very relieved when we returned and I hurriedly made good the IOU in case my reputation, already tarnished as a ' skin flint’, become too firmly established.
The trip itself was one of the more memorable and as it turned out we did have a blissful holiday. I was rather busy beforehand and my preparation for the conference itself left a lot to be desired. Bear in mind at that time in the early eighties presentations were rather limited and even basics like power point presentations were unknown. So I was only armed with a hastily procured large map of Australia with few coloured pins for locations and butcher paper on which to scribble a few forlorn facts to my large audience. My concern was heightened to near panic when I was asked by the Communication Manager what technical assistance I needed. Some of the other presentations from other countries were stunning and I soon felt rather foolish. There was nothing left but to grin and bear it.
Fortunately I had heard a half decent joke about Aussies getting lost in a hotel the night before which provided an ideal opener and to my immense relief was greeted with hoots of laughter. I didn’t think many people would be so interested on the business side after that (I had been tipped off a few from the UK were interested in emigrating) and so I abandoned my previous presentation material and confined most of the session to vague discussions about Aussies, Ausssieland, business and all about the country in general combined with some questions and answers.
Nobody seemed to notice the presentation wasn’t about what it was supposed to be.
The rest of the stay was wonderful, scuttling around the south of England in a little Fiat I had borrowed from one of the UK divisions on the off touristy season whilst soaking up some of the best scenerary imaginable in a very pleasant autumn season.
Monday, December 1
More urgent land releases needed for Aussie market.
It was interesting to read an article today by Housing Industry Association‘s Chief Economist, Harley Dale which echoes my own thoughts about the need for more land release in Australia if we want to achieve desirable house price affordability. The conclusion reached by Dale for the Australian housing market is it cannot ultimately benefit from the current falling interest rates and a tripling of grants unless more land is released. The past evidence for this conclusion can be found in the compelling statistics which show a rapid increase in land values arising from restrictive land release polices and burgeoning planning delays.
Tomorrow I think we will see our Reserve Bank of Australia make another large interest cut and I am betting on a 100 basis rate cut to add cumulatively to the 200 basic points already announced which has benefited borrowers with corresponding lower home mortgage rates. Concurrent to these official rate cuts the Federal government doubled the first home owner grant paid to recipients for first time home buyers for any existing properties amounting to $14,000, and a tripling to $21,000 for first new home buyers. The cash incentives are part of the government’s $10.4 billion economic stimulus package underpinning a welcome jump in new houses of 6.7 per cent for October.
Harley Dale said “Both new home sales and building approvals fell sharply over the first nine months of 2008. It will be a long road back, but it is hoped that an improvement in new home sales in October could mark the beginning of a stabilization followed by improvement in leading housing indicators over 2009,” Harley Dale then said. “The unfortunate and avoidable caveat is that any housing recovery that emerges over 2009 will be constrained by a lack of readily available land, planning delays, and the excessive cost of state and local government taxation on new homes”
Personally I think the highest level of dissatisfaction must be reserved for successive administrations over our country areas which gave little thought to new land releases to encourage a much higher proportion of migrant (up to 150,000 to 180,000 people arrive each year largely made up of the skilled migrants) intake to settle in the country rather than our overcrowded cites by investing in infrastructure and incentives for planned land development with co ordinated business regionalization
Australia is one of the most highly urbanized countries in the world. This situation is not sustainable.
Conservatism has prevented us from implementing the bold new initiatives which would immediately make land more affordable by addressing the lack of supply and give sensible consideration to relief from excessive imposts. Hence both residential and rural land in Australia is over valued and subject to unwieldy beurocracies who impose unnecessary restrictions and impose revenue targeted imposts.
In the longer term subsidies for first home buyers will simply increase a demand for land without a corresponding increase in supply. Hence Federal initiatives in consultation with existing state governments and their local councils need to implement policies which the remove self imposed supply restraints, eliminate bureaucratic restrictions and reduce the tax imposts if we are to avoid future rapid real land price escalation.
If you restrict anything so it underlying supply can never meet an underlying demand then the inevitable consequence must be a rise in real prices due to the operation of the price mechanism. It is clear that this purely relates to the land cost as the actual cost of building material and labor has remained constant in real terms over the past 30 years.
I do not imply the desirability of unrestricted releases of large landholdings or that you even need to own it, (since you could lease it) but rather I am drawing attention to the fact that in Australia our long term lack of affordability for housing has as it’s nemesis the self imposed artificial supply restraint on land acquisition with its labyrinth of unnecessary restrictions and unrelated revenue generating imposts.
Tomorrow I think we will see our Reserve Bank of Australia make another large interest cut and I am betting on a 100 basis rate cut to add cumulatively to the 200 basic points already announced which has benefited borrowers with corresponding lower home mortgage rates. Concurrent to these official rate cuts the Federal government doubled the first home owner grant paid to recipients for first time home buyers for any existing properties amounting to $14,000, and a tripling to $21,000 for first new home buyers. The cash incentives are part of the government’s $10.4 billion economic stimulus package underpinning a welcome jump in new houses of 6.7 per cent for October.
Harley Dale said “Both new home sales and building approvals fell sharply over the first nine months of 2008. It will be a long road back, but it is hoped that an improvement in new home sales in October could mark the beginning of a stabilization followed by improvement in leading housing indicators over 2009,” Harley Dale then said. “The unfortunate and avoidable caveat is that any housing recovery that emerges over 2009 will be constrained by a lack of readily available land, planning delays, and the excessive cost of state and local government taxation on new homes”
Personally I think the highest level of dissatisfaction must be reserved for successive administrations over our country areas which gave little thought to new land releases to encourage a much higher proportion of migrant (up to 150,000 to 180,000 people arrive each year largely made up of the skilled migrants) intake to settle in the country rather than our overcrowded cites by investing in infrastructure and incentives for planned land development with co ordinated business regionalization
Australia is one of the most highly urbanized countries in the world. This situation is not sustainable.
Conservatism has prevented us from implementing the bold new initiatives which would immediately make land more affordable by addressing the lack of supply and give sensible consideration to relief from excessive imposts. Hence both residential and rural land in Australia is over valued and subject to unwieldy beurocracies who impose unnecessary restrictions and impose revenue targeted imposts.
In the longer term subsidies for first home buyers will simply increase a demand for land without a corresponding increase in supply. Hence Federal initiatives in consultation with existing state governments and their local councils need to implement policies which the remove self imposed supply restraints, eliminate bureaucratic restrictions and reduce the tax imposts if we are to avoid future rapid real land price escalation.
If you restrict anything so it underlying supply can never meet an underlying demand then the inevitable consequence must be a rise in real prices due to the operation of the price mechanism. It is clear that this purely relates to the land cost as the actual cost of building material and labor has remained constant in real terms over the past 30 years.
I do not imply the desirability of unrestricted releases of large landholdings or that you even need to own it, (since you could lease it) but rather I am drawing attention to the fact that in Australia our long term lack of affordability for housing has as it’s nemesis the self imposed artificial supply restraint on land acquisition with its labyrinth of unnecessary restrictions and unrelated revenue generating imposts.
Tuesday, November 25
Australian market wrap
Against a backdrop of modest declining business profits, combined with a marked slowdown in global production and falling sales, economic forecasters are becoming more and more bearish and dire as each day passes. However as individuals and corporate save more, the slack in investment can be ameliorated to some degree by increased spending from reserves by the government sector on any number of very worthwhile investment projects which will have beneficial multiplier impact on their local communities. Hence it is in an excellent position to ensure large scale initiatives start to make some impact in countering the daily swag of negative thinking. The purpose of this posting is to examine the current state of play in the Australian economy and its effect on sentiment in our markets.
Risk of a housing price collapse
One identified risk relates to the relatively high level of private and consumer debt (linked to existing high house prices) and the adverse effects of a severe diminution or collapse in house prices on the solvency of our lending institutions. Lending by our instructions has for the most part been responsible and our defaulting provisions allow mortgagors in bankruptcy (unlike the USA where mortgagees are only linked to the property which was the subject of the mortgage) to pursue all defaulter assets in any recovery action. Hence mortgagees are much more likely to try and keep their homes during periods of economic hardship. Mortgages are also predominantly written on the basis of variable type interest rates which are currently declining rapidly. The risk of higher unemployment will cause concerns of course but there is also a severe shortage of housing stock supply which ensures any increase in stocks can comfortably remain below underlying sustainable demand.
It’s much more likely there is a softening in house prices in the order of say an annual decline of 5%. If that was to continue over the next 5-10 years it would be ideal (although unlikely) to ensure housing affordability was restored to more sensible sustainable levels.
Risk of a Business Lending collapse
The danger on the business front would be if banks shut off existing lending for investment projects to the extent such action might turn a recession into a depression. At the moment considerable press coverage is devoted to concerns about whether companies or individuals will continue to be financed. This is despite the fact our banks remain in good shape and are rated amongst the top in the world. The fear about lending being terminated or cut back is not borne out by any data or reported by any viable companies, but rather it is all about why it might happen.
Central bank governor Glenn Stevens summed it up well in a speech last Wednesday night in his relatively upbeat assessment of Australia's economic prospects ………….."Given that we have that scope, and given the underlying strengths of the economy, about the biggest mistake we could make would be to talk ourselves into unnecessary economic weakness,"
What’s causing our market downturn to mirror the USA?
Share markets in Australia continue to plunge. Australian shares have fallen nearly 50% from its peak last year without corresponding falls in profits. Many large Fund Managers see the nexus between reduced demand from the USA (confirmed to be in the middle of a very deep recession expected to last at least until the 3rd quarter of 2009) and the flow on effect to the Asian region including very adverse effects for Australia.
There seems little appreciation of the fact that in many of our service, manufacturing and exporting industries price contracts with customers are negotiated either on a yearly basis or even over several years and hence the dire predictions are simply not possible within the short periods anticipated. Asian economies such as Japan and Honk Kong are currently in recession whilst others are in decline which has not helped sentiment about the Australian economy.
Nevertheless I think it’s been just one factor amongst many that has caused Fund mangers outside Australian to dump Australian stock indiscriminately across the board. We represent only a small proportion of the total world market and hence it’s relatively easy for it to be oversold within a simplistic regional response to risk.
Listed below are other factors weighing against the Australia market.
Effect of an Aussie weakening dollar-The situation is also not helped by the weaker Aussie dollar, (historically it has always been linked to commodity prices and hence rises and falls with commodity price movements ) acting as a temporary catalyst to defer overseas investors investing in stocks here, until such time as the currency confidently stabilizes. Although we have seen commodity prices collapse the lower Aussie dollar also translates into much larger export receipts which offset what otherwise would translate into reduced export earnings.
Further reductions in interest rates- Australia will be further reducing our interest rates which puts a floor under any currency movement to the upside. This reduces buyer interest in our stock, fuelled by unsubstantiated fears of offsetting currency deterioration. If the currency was to temporarily reduce to below the rate of 60cents US than the Reserve Bank has already indicated its intention to become buyer until such time as it regains its value.
Inflation and the danger of stagflation -Our annual inflation was five per cent in the September quarter and will remain high because of our falling dollar which has reduced from a high of 98.49 US cents in mid-July to a 5 year low to around 62 to 64 US cents. Consequently this means lower fuel prices arising from the reduced cost of oil will not be fully passed on at the bowser price. Also that reduction will be offset by increased food and imported price rises as consequence of the exchange rate. Hence the danger for stagflation is zero.
In a nutshell the fall in the USA mirrors adverse economic developments whilst those same falls (in terms of magnitude) on the Australian market are largely anticipatory. The danger is what is anticipated may turn out to be a self fulfilling prophesies.
Margin selling –The market is also being held down by a surge in margin calls (Margin lending refers to loans to buy stock where the loan is not to exceed certain percentage of the current value of the stock – usually the loan is to be a maximum of 60/70%) in good quality stocks when there is insufficient confidence for the bargain hunters to enter the market and buy up those stocks at bargain basement prices. Paradoxically it is the better quality companies who have sustainable responsible operations which were subject to the initial margin lending proposals which perversely, by virtue if that strength now bear the brunt of indiscriminate forced selling.
So in conclusion I return to the statement by our Reserve bank governor, which I fully endorse ‘"Given that we have that scope, and given the underlying strengths of the economy, about the biggest mistake we could make would be to talk ourselves into unnecessary economic weakness,"
Notwithstanding I think (as a consequence of the recent considerable financial wealth destruction, combined with falls in commodity prices flowing from recessionary impacts in the USA, Europe and Asia ) it maybe difficult to avoid a very short recession in Australia but it need not be anywhere near as bad as is feared. In the meantime we could still see further weakness in our share market driven largely by anticipatory fears until there is a return of confidence and a return to uncommon common sense.
There is also an irrational view that successful businesses and sustainability depends upon continual growth for any prosperity, similar to that other equally perverse idea that you have to populate or you will perish. Nothing could be further from the truth.
If I have only learnt one thing in business it is this; success is not dependant upon size or growth or coups or cleverness but has more to do with being in the right place at the right time. When your not there your success is contingent on being able to hard peddle and adapt to both changing circumstances and the environment whilst understanding what your core competences are and how they are attractive to customers. In fact that has always been the case and in essence it is not that much different to nature which we attempt to mimic in many different subtle ways.
We are going through a deleveraging period to return us eventually to a more sustainable economic position which means we will be less reliant on credit and more on investing from a savings pool, not a borrowed one.
Within that context companies and individuals can prosper just as markets will finally mirror that prospect.
Risk of a housing price collapse
One identified risk relates to the relatively high level of private and consumer debt (linked to existing high house prices) and the adverse effects of a severe diminution or collapse in house prices on the solvency of our lending institutions. Lending by our instructions has for the most part been responsible and our defaulting provisions allow mortgagors in bankruptcy (unlike the USA where mortgagees are only linked to the property which was the subject of the mortgage) to pursue all defaulter assets in any recovery action. Hence mortgagees are much more likely to try and keep their homes during periods of economic hardship. Mortgages are also predominantly written on the basis of variable type interest rates which are currently declining rapidly. The risk of higher unemployment will cause concerns of course but there is also a severe shortage of housing stock supply which ensures any increase in stocks can comfortably remain below underlying sustainable demand.
It’s much more likely there is a softening in house prices in the order of say an annual decline of 5%. If that was to continue over the next 5-10 years it would be ideal (although unlikely) to ensure housing affordability was restored to more sensible sustainable levels.
Risk of a Business Lending collapse
The danger on the business front would be if banks shut off existing lending for investment projects to the extent such action might turn a recession into a depression. At the moment considerable press coverage is devoted to concerns about whether companies or individuals will continue to be financed. This is despite the fact our banks remain in good shape and are rated amongst the top in the world. The fear about lending being terminated or cut back is not borne out by any data or reported by any viable companies, but rather it is all about why it might happen.
Central bank governor Glenn Stevens summed it up well in a speech last Wednesday night in his relatively upbeat assessment of Australia's economic prospects ………….."Given that we have that scope, and given the underlying strengths of the economy, about the biggest mistake we could make would be to talk ourselves into unnecessary economic weakness,"
What’s causing our market downturn to mirror the USA?
Share markets in Australia continue to plunge. Australian shares have fallen nearly 50% from its peak last year without corresponding falls in profits. Many large Fund Managers see the nexus between reduced demand from the USA (confirmed to be in the middle of a very deep recession expected to last at least until the 3rd quarter of 2009) and the flow on effect to the Asian region including very adverse effects for Australia.
There seems little appreciation of the fact that in many of our service, manufacturing and exporting industries price contracts with customers are negotiated either on a yearly basis or even over several years and hence the dire predictions are simply not possible within the short periods anticipated. Asian economies such as Japan and Honk Kong are currently in recession whilst others are in decline which has not helped sentiment about the Australian economy.
Nevertheless I think it’s been just one factor amongst many that has caused Fund mangers outside Australian to dump Australian stock indiscriminately across the board. We represent only a small proportion of the total world market and hence it’s relatively easy for it to be oversold within a simplistic regional response to risk.
Listed below are other factors weighing against the Australia market.
Effect of an Aussie weakening dollar-The situation is also not helped by the weaker Aussie dollar, (historically it has always been linked to commodity prices and hence rises and falls with commodity price movements ) acting as a temporary catalyst to defer overseas investors investing in stocks here, until such time as the currency confidently stabilizes. Although we have seen commodity prices collapse the lower Aussie dollar also translates into much larger export receipts which offset what otherwise would translate into reduced export earnings.
Further reductions in interest rates- Australia will be further reducing our interest rates which puts a floor under any currency movement to the upside. This reduces buyer interest in our stock, fuelled by unsubstantiated fears of offsetting currency deterioration. If the currency was to temporarily reduce to below the rate of 60cents US than the Reserve Bank has already indicated its intention to become buyer until such time as it regains its value.
Inflation and the danger of stagflation -Our annual inflation was five per cent in the September quarter and will remain high because of our falling dollar which has reduced from a high of 98.49 US cents in mid-July to a 5 year low to around 62 to 64 US cents. Consequently this means lower fuel prices arising from the reduced cost of oil will not be fully passed on at the bowser price. Also that reduction will be offset by increased food and imported price rises as consequence of the exchange rate. Hence the danger for stagflation is zero.
In a nutshell the fall in the USA mirrors adverse economic developments whilst those same falls (in terms of magnitude) on the Australian market are largely anticipatory. The danger is what is anticipated may turn out to be a self fulfilling prophesies.
Margin selling –The market is also being held down by a surge in margin calls (Margin lending refers to loans to buy stock where the loan is not to exceed certain percentage of the current value of the stock – usually the loan is to be a maximum of 60/70%) in good quality stocks when there is insufficient confidence for the bargain hunters to enter the market and buy up those stocks at bargain basement prices. Paradoxically it is the better quality companies who have sustainable responsible operations which were subject to the initial margin lending proposals which perversely, by virtue if that strength now bear the brunt of indiscriminate forced selling.
So in conclusion I return to the statement by our Reserve bank governor, which I fully endorse ‘"Given that we have that scope, and given the underlying strengths of the economy, about the biggest mistake we could make would be to talk ourselves into unnecessary economic weakness,"
Notwithstanding I think (as a consequence of the recent considerable financial wealth destruction, combined with falls in commodity prices flowing from recessionary impacts in the USA, Europe and Asia ) it maybe difficult to avoid a very short recession in Australia but it need not be anywhere near as bad as is feared. In the meantime we could still see further weakness in our share market driven largely by anticipatory fears until there is a return of confidence and a return to uncommon common sense.
There is also an irrational view that successful businesses and sustainability depends upon continual growth for any prosperity, similar to that other equally perverse idea that you have to populate or you will perish. Nothing could be further from the truth.
If I have only learnt one thing in business it is this; success is not dependant upon size or growth or coups or cleverness but has more to do with being in the right place at the right time. When your not there your success is contingent on being able to hard peddle and adapt to both changing circumstances and the environment whilst understanding what your core competences are and how they are attractive to customers. In fact that has always been the case and in essence it is not that much different to nature which we attempt to mimic in many different subtle ways.
We are going through a deleveraging period to return us eventually to a more sustainable economic position which means we will be less reliant on credit and more on investing from a savings pool, not a borrowed one.
Within that context companies and individuals can prosper just as markets will finally mirror that prospect.
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