Wen Jiabao predicts economic recovery? Oh my.

Fascinating mix of threat, surrealism and desperation from Chinese premier Wen Jiabao in his press conference yesterday. Western criticism of the Chinese crackdown on Tibet will be met with ostracism, the fact that the Tibetans have become peaceful after being forcibly pacified means that brutality is “right” … and the USA must make darn sure that the Chinese accumulation of American debt doesn’t go up in smoke.

All a bit rich coming from some tyrant whose economy will be in the toilet by the end of the year, with or without US debt failure.

Sure, China’s GDP is (apparently) still on an upward slope, but it’s perfectly clear that the wheels under the economy have run out of anything to grip onto. Basically, China is in Evel Knievel mode: they’ve left the ramp, they’re still heading upwards, but the other side of the canyon is far, far away and the only hope is their star-spangled parachute.

But … the parachute is designed to burst into flames the moment it’s deployed.

Non-profits and co-ops to erode capitalism

It’s now axiomatic that greed is the most successful motivation for providing goods and services to people. That if entrepreneurs can’t expect to make ever-increasing profits, there’s no point even trying.

The result is that we have greedy developers building us shitty homes, car manufacturers continuing to make petrol- and diesel-powered cars and banks that simply practise legalized theft.

Capitalist dogma preaches that the market will, in time, bring us better, cheaper, cleaner products. But in fact it’s usually only legislation that does this. Hybrid cars and low-energy lightbulbs will prevail through legislation, not capitalism.

Utilities, operated for profit, are examples of a business model diametrically opposed to the public good. In London, Thames Water let its own product leak away into the ground for decades while it rose prices and whinged about shortages, until government forced it to use some of its massive profits to fix its porous pipes. Now it’s creating gridlock all over London while it rips up the roads in its glacially paced upgrade.

OK, I don’t think there’s necessarily anything wrong with the profit incentive. In most cases, it works fine. But it’s not the only incentive. Creative people do their best work when they’re simply trying to create something new and exciting. Businesspeople get as excited by the thrill of competition as by their financial reward.

I don’t believe that Trevor Bayliss created the wind-up radio because he wanted to be rich, or that Dale Vince created Ecotricity, the wind-only energy company, to roll around in piles of money.

That’s why I expect more and more entrepreneurs to follow a not-for-profit business model. Providing things that people want, affordably, with good working conditions and a low salary disparity between management and workers.

Wait and see: consumers will actively seek out co-op and non-profit products and feel better about owning them. Result: loyal customers and motivated workers: a great competitive advantage.

Car-sharing, power, food, homebuilding, furniture, manufacturers and retailers, they’ll be everywhere soon. Check out http://www.cooponline.coop/index.html for co-ops in your area.

Iceland and Scapa Flow - two strategic EU imperatives

The British Navy hasn’t always been based in Portsmouth. Back when Spain was the enemy, it was based on the south-western tip of the country, in Plymouth. Then when France became the No.1 enemy, it was moved to Portsmouth.

Well, it’s time to move again. Northwards. Sure, the nuclear submarines are based in Scotland, but that’s not really enough anymore.

Russia will soon have a rash of grey-coloured craft all over the Arctic Circle to reinforce its ambitious land and seabed claims. The resources available, and the trade routes, are simply too attractive to ignore.

Canada will inevitably be drawn into some form of stand-off. And who else? Norway and Japan definitely. But what will the EU do to assert itself in the Arctic Circle? Denmark and Sweden aren’t all that close to the action. (Denmark’s Greenland would be extremely expensive to get up to speed on the level required, but is certainly an option.)

And what about Iceland? The country is certainly strategically vital in any northern geopolitics, but as it’s just gone bankrupt, it’s essentially up for takeover.

Basically, the EU needs to make them a deal very fast, before Russia steams in. Let’s face it, there a handful of Russians could bail them out in the blink of an eye. Considering what’s to gain, it’s only a matter of time.

Would the Icelanders be able to refuse the right offer – or offers? One company could buy their ports, others could install their merchant and fishing fleets, followed inevitably by the Russian Navy to protect their “legitimate” interests.

Therefore, two things need to happen. One, the EU needs to drag in Iceland and restore their national pride. (The UK hasn’t exactly helped here, thanks Mr Brown.)

Two, the British Navy needs to establish a major naval base as far north as it can – Scapa Flow in the Orkneys. It would not only help to protect British (and EU) interests, it would also make Iceland a lot less isolated. Hopefully, the plans are already on a table somewhere.

Our glorious surveillance paradise

The way it started was that the big chains offered small discounts for card purchases. But of course now we know it was really a Trojan horse: suddenly it was turned around so that the real price was the card-payment price and you paid a surcharge for cash payments.

As different ways emerged for paying cashlessly for small purchases, the banks followed by making us pay more and more for depositing and withdrawing cash.

The government was right behind the trend, the less cash in circulation, the less opportunity to evade taxation. And then, of course, all new cards began to be issued with RFIDs: after all, the banks were losing fortunes to users of cloned and stolen cards and they wanted a way to track them down.

Naturally, all the log data on RFID-tracked movements of cardholders had to be accessible to any government agency that asked for it: MI5, the police, the DSS … it soon turned out that schools were using the data to find out whether applicants for scarce school places really lived where they said they did. (And if you remember, by this point WiFi-enabled RFID readers could be placed pretty much anywhere, seeing as how you could buy them from any electronics shop.)

And then, under the Freedom of Information Act, all sorts of non-government organizations and individuals realized they could obtain the information too: employers, spouses, parents, litigants. A free-for-all.

But hey: if you weren’t breaking the law, if you weren’t concealing some dark secret, what was the problem? Only a menace to society would object to a card-based, RFID-tracked economy. And the advantages were so obvious: more efficient management of the economy, less tax evasion, less underage drinking and dropping crime figures.

And combining the RFID system with mobile phone logs and CCTV cameras proved a bonanza to local authorities: all the laws that people used to break unthinkingly on a daily basis – jaywalking (became a crime in 2011), minor littering, trespass, stopping in no-stopping zones, etc – could now be enforced in a contracted-out, automated and highly efficient fashion. Do you remember when the enforcement agencies eventually won the right to simply siphon the money out of our bank accounts instead of having to wait for us to get around to paying the fines?

Somewhere along the line huge numbers of people decided to leave the country: people who weren’t comfortable with being monitored on a 24-hour-a-day basis. Remember that scandal when it was discovered that home CCTV cameras that people had hooked up to check up on their kids online were being snooped on by the police? And how, when the matter was taken to court, the police won?

The latest? Because random stress-related violence has become so common, this latest directive from the government: personal stress monitors linked to our mobile phones – sending out an automatic distress signal for interception by roaming peace keepers as well as making over-stressed people ineligible to board public transport. Isn’t it finally time to **THOUGHT CRIME IN PROCESS : APPROPRIATE AUTHORITIES HAVE BEEN NOTIFIED**

Gold - the new bubble

It hasn’t taken long for the bubble-makers to come up with something to replace the buy-to-let flat.

Apparently, if we convert our wealth into gold coins we’ll be safe from any financial crash, while our new investment will rise and rise as other assets fall.

Gold, we’re told, is the ultimate safe investment.

Well, “safe as houses” used to be a fact.

And the gold hucksters’ sales pitch sounds rather like the property developers’ tarnished rhetoric. (Watch out for irresponsible schemes that enable low-income people to purchase gold at 'fixed' prices with low monthly instalments.)

The thing is, you can still live in a house. Gold just isn’t all that intrinsically useful. Even as jewellery, it’s tacky in any large quantity.

Take a look at the historical fluctuations in the value of gold – the downside is terrifying. The only thing that’s keeping the price up at the moment is hysteria. And even that won’t be enough when Joe Average realises he can’t afford the stuff at today’s price – and really doesn’t need it anyway, at any price.

The people who moved into gold early have already made their profit. Now the latecomers and the conmen are hoping we'll make them rich. Sorry.

Why trust government to regulate their own banks?

Now, with both the means and the incentive to milk the next economic bubble, why trust the UK government to do an effective job of regulation?

The UK bank bailout is a fantastic deal for the government: giving them a huge amount of boardroom clout, first dibs on profits and all at a fire sale price. In a couple of years, the taxpayer is going to start reaping the benefits. We’re always demanding windfall taxes from whichever corporations are making the most outrageous profits – well, now we’re going to get them.

And the forthcoming regulation won't stop that from happening. Because, after all, when has self-regulation been effective? In the case of governmental self-regulation, it's like putting an alcoholic in charge of the pub key.

Not that financial regulation has any reputation for being successful anyway. What it mostly achieves is to lock the stable doors as the horses head for the hills. That’s what the Sarbanes Oxley and Basel II compliance framework was all about – preventing the reoccurrence of Enron and Worldcom. But for all the extra burden it put on auditors and writers of annual reports, did it prevent the credit crunch?

In fact, by lulling investors into the false belief that balance sheets really did reflect reality, they probably helped to make it happen.

So why do we believe that new regulations will work better? While bankers are often caricatured as extremely dull, greedy people, financial innovation is driven by extremely creative, greedy people. They’re already working on finding a new bubble to inflate. Perhaps it’ll only come along in a year or two, perhaps it’s already a germ in someone’s imagination, or maybe it’s already attached to the footpump.

But at first it’ll look like the cleverest thing ever and financial commentators around the world will pump it enthusiastically, explaining how it makes the financial world more stable, secure, efficient, etcetera. The regulators will prod it warily, then give up under a hail of protest – and a couple of meaningful phone calls from their own paymasters.

Because the government will need to milk its new investment for all it’s worth. And they’ll be able to. As major shareholders, with seats on the board, and as both dividend and tax beneficiaries, they have the incentive and the means.

Massive expenses are just over the horizon for the government. There’s the Olympics, far starters. Then there’s all the infrastructure investment that’ll be forced by climate change. Flood defenses. High speed train links. More tunnels under the Channel. Massive donations to more flood-prone countries to stop their people from all getting on the next boat to Britain. Defence spending, so we can menace them with battleships when the donations don’t work.

And that’s why I’m not convinced that the regulators will be allowed to prick the next bubble. Instead it’ll be cheered to the rafters as a new boom. Faster than you can say tulipmania.

Skydiving Everest? Try a zorb.

I'm blogging from the summit of Everest today using voice recognition software. You don’t dare take your gloves off in these temperatures.

I must say I’d been worried that it would feel lonely at the top of the world, but thankfully it’s anything but.

There’s a school party of girl guides (I’ve just bought their last cookies, hopefully they’ve eaten enough to get them down again), a few superheroes from Dads for Justice having a fracas with the Women’s Institute (they’re doing another calendar shoot, fortunately with clothes on this time) and – oh – here’s my next door neighbour just stuck his head over the top and wanting to know what I paid for my permit, seems he got his at a discount and why didn’t I let him know I was coming here so he could have got me the same deal?

That’s just at the top. We’ve also been buzzed by skydivers, chased by snowmobiles, sprayed by snowboarders and there was some bloke in a zorb (giant ball) who went screaming past at some point (literally).

Of course the body count is horrendous, new today is the ‘first nudist to reach the top’, the jet pack guy and a whole stag party who insisted on inhaling a helium-vodka mix on the way up. At this rate, the mountain’s only going to get higher and higher.

Oh well, time to activate my disposable hot air balloon, let the wind float me off the summit, then open my parachute and zoom down to base camp.

I just wish the guys building the funicular would keep the bloody noise down. How can they expect me to do voice-rec in these conditions?