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Watching The World Go By: Iceland

Energy Bulletin - 15 September 2014 - 11:21pm

When we think of Iceland, thoughts of sustainable fisheries and renewable energy come to mind. Is that really an accurate picture?

Categories: Peak oil news

The Market Ticker - So Now Google Wants Your Kids

The Market Ticker - 15 September 2014 - 11:15pm

From the you gotta be fucking kidding me file...

In her first year as principal of the all-girls Fontbonne Hall Academy, Mary Ann Spicijaric was leading a grand experiment that couldn't be discussed outside the halls of her Catholic high school in Brooklyn. The 38 teachers, along with school administrators and attendees, were under strict rules to keep quiet about the new Web-based software they were testing that helped educators manage assignments, grade papers and communicate with students.

As Spicijaric enters her second school year at Fontbonne, the secret is out and it has a name: Google Classroom.


So now we're gonna give every kid from kindergarten on a Google login ID, and that's going to track everything they do in school.  Oh, and I'm sure it won't be just in school either.  Google will own all of that data, your child will not, it will form a part of their indelible record in the hands of commercial interests that have no responsibility to guard that information or remove it on request.

In fact, Google appears not to be charging for this, which means they're getting value from somewhere -- and you can bet it's not as simple as CNBullShit wants you believe, which is simply the proposition that everyone so-exposed will then "use" Google later in life.

Like Hell.

That data, from school performance to where else that kid goes online has value.  Lots of it, and there is utterly nothing to prevent Google from using it.

They will.

You're flat-balls nuts to allow this to happen.

The simple test is this: Will Google still offer it for "free" if, as a condition of being able to do so, all of the data generated by your kid's use is irrevocably assigned to them and delivered upon their 18th birthday, with the originals being destroyed, and should Google violate that premise they will be held account for felony privacy invasion and a statutory penalty of $100,000 per kid that is so-violated.

The answer to that question, if someone dares ask it, will be "No."

And there you have it.

Categories: Economics

Peak oil review - Sept 15

Energy Bulletin - 15 September 2014 - 11:10pm

 A weekly update including, -Oil and the Global Economy -The Middle East and North Africa -Ukraine -Quote of the Week -The Briefs

Categories: Peak oil news

Who Will Carry Big Dividend Checks at the People's Climate March?

Energy Bulletin - 15 September 2014 - 11:08pm

There are many challenges in communicating about climate change and its best solution, a carbon price. It needs to be simple, allay economic fears, and convey universal fairness.

Categories: Peak oil news

America: You’ve got three more years to drive normally!

Energy Bulletin - 15 September 2014 - 10:49pm

Three more years? That’s pretty scary! Surely there must be a mistake in that headline.

Categories: Peak oil news

Are we on the path of 'Limits to Growth'?

Energy Bulletin - 15 September 2014 - 10:00pm

Researchers are finding that the business-as-usual scenario in the 1972 "Limits to Growth" study is unfolding before our eyes. Will reality follow that scenario further into the beginning of industrial decline this decade?

Categories: Peak oil news

The Market Ticker - We Don't Support Religious Whackjobs -- But We Are Whackjobs

The Market Ticker - 15 September 2014 - 1:19pm

Oh this is nice...... and where is President Zero?

Dozens of Christians arrested at a prayer meeting in Saudi Arabia need America's help, according to a key lawmaker who is pressing the State Department on their behalf.

Some 28 people were rounded up Friday by hard-line Islamists from the Commission for the Promotion of Virtue and Prevention of Vice in the home of an Indian national in the eastern Saudi city of Khafji, and their current situation is unknown, according to human rights advocates. 

So let me see if I get this right.

Saudi Arabia is all bent out of shape about ISIS, and worried about them attacking Mecca.  Ok.

But -- they were almost-certainly involved in 9/11 (and not just as a source for most of the terrorists by birth either), we as Americans still can't see that part of the report 13 years later because it remains "classified", and yet the Great Religion of Peace, as practiced by this very same nation, rounds up and arrests people who pray the "wrong way."

So I, and the rest of the world are supposed to believe two things:

  • This nation does not explicitly support, at an official government level, religious bigotry and extremism.


  • They are not themselves religious bigots willing to use force to compel religious observance of the specific form they prefer.

Uh huh.

Pull the other one.

Categories: Economics

The Market Ticker - Grievance Nation Meets Possible Felony Wire Fraud

The Market Ticker - 15 September 2014 - 7:14am

As they say, heh heh heh....

Two independent journalists have confirmed with the San Francisco Police Department that Anita Sarkeesian, a video game social justice warrior, may have used false pretenses to raise money for her non-profit entity. The police have said that she has not contacted them as she claimed after receiving a Twitter death threat in August. Under Federal law, this may put her on the hook for felony wire fraud.

Wait, what?

Video game social justice warriors?

Yes, they apparently exist.  You know, people who argue that it's so damned unfair that {women|minorities|gays|whoever} are {underrepresented|victims of misogyny|harassed} in {whatever} -- in this case, video games.


There are actually people who do this.  Some of them even set up allegedly "non profit" entities to "benefit" their cause.


It is broadly illegal (at a felony level) to raise money under false pretense.

It appears that this woman claimed she had received death threats and that she had reported them to the cops.  Making death threats is in fact a crime.  But -- it appears -- there were no actual threats and no report was made.

I don't play video games, but a lot of people do.  And apparently the grievance industry is alive and well there, complete with people making a "career" out of it.

This one might get cut a bit short....

Categories: Economics

The Market Ticker - The Corrosive Impact of Stereotyping Race

The Market Ticker - 15 September 2014 - 4:53am

I got into a rather heated back-n-forth with a commenting party on one of my recent blog posts having to do with drug legalization.  You can read it here, if you wish, so you have context.

This person asserted, basically, that there's something "different" about certain groups of people (which happen to share a skin color) and that this was responsible for the thugging -- thus, drug legalization wouldn't materially impact it.

Legalizing or decriminalizing drugs will not address the problem which you have explicitly described. The present prohibitions apply to females, whites, those of northeast Asian descent, etc., but they are not shooting each other, so the "why" you posit above seems very likely to be incorrect. This is not a logic, physics, or arithmetic problem, so I believe you are applying the wrong template.

It continued from there.

The premise I operated from (and still do) is pretty simple: All people in an economy, which is all people incidentally since we all eat, shower and shit, make economic decisions every single day.

You do it.  I'm sure of it.  You drive past a gas station with regular placarded at $3.45 because you remember yesterday there was a station down the road at $3.39.  The amount of money involved is utterly trivial, yet it's enough to motivate you not to stop in one place but seek the other, assuming you have enough fuel to get there.

Amazon and WalMart have created their entire business plan about you making one choice over another for economic reasons.  Remember that economics is all about cost and benefit; not all of either is denominated in dollars.  The package that shows up at your door in two days has a cost (time) .vs. getting it "right now" but it has a benefit (convenience) as well; you don't have to drive to said store.

There are two basic views you can have about people.  The first is that they're all individuals.  The second is that they're all divided into some group that brands them in some fashion.

It doesn't matter which of those is true by the way.  What matters is how you treat people and how you analyze a situation.

If you remember Clinton cut back welfare by a significant amount.  When he did so there was much hue and cry about how he was going to literally kill millions of children via starvation, because their parents (the vast majority of which were black, by the way) were incapable of doing anything productive for money and thus we either subsidized them or they, and more importantly, their innocent children, would starve.

Well the advocates for not cutting welfare lost and thus the benefits were cut back materially.

Then an interesting thing happened: Nobody starved.

Subsequent to that a second interesting thing did not happen: Neither the media or the politicians who had publicly called all these minority people incompetent at the level of being incapable of providing for themselves and their children were excoriated and (politically at least) burned at the stake for what was outrageous and overt bigotry.

Nobody paid politically for that, but they should have because their prognostication was predicated on a simple claim: Poor black people are economic and intellectual infants; they're incompetent to manage their own affairs and that of their children.

The claim was false, outrageous, insulting and racist at a level not much different than what was believed in the 1800s about slaves; that the black family was incapable of managing to provide for itself and therefore the white plantation owner was doing these people a favor by taking care of all of the requirements of life -- and the forced labor extracted in exchange was a "small price" that, on balance, favored the slaves!

That crap still exists among us folks, but now it comes from mainstream politicians on both left and right.

The premise these people put forward is this: The black gang-banger gang-bangs not because he has a willing customer for his economic transaction in drugs and has calculated that he can make more money selling drugs illegally than pulling coffees at Starbucks or framing a house but rather because he's incapable of making that computation!

How the hell in 2014 does anyone allow that sort of crap to form the predicate of any sort of political debate?

Here's my view: Whatever you provide incentives for, intentionally or otherwise, you will get more of.  That which you make expensive, intentionally or otherwise, you will get less of.

Will you ever completely get rid of thugs?  No.  Some people will choose to be thugs.  You can try to argue that this is a matter of race, but you're wrong.  Some of the worst gangs out there when it comes to violence are the Mexican drug gangs.  Doubt me?  Go down and check it out for yourself; they hang people from overpasses on a pretty-much daily basis!

You know who doesn't want drugs legalized?  It's a fairly decent-sized list; let's try it.

  • The Mexican gangs that run billions worth of the drugs into the US.  Their income source would evaporate.  All those guns, ammunition and gang-banging they do requires money, and this would eviscerate their income.

  • The US "street gangs" that distribute the drugs.  Their income source would disappear.  Not only are guns expensive but so are flashy cars, grills on the teeth and $300 "sports figure" tennis shoes.  Suddenly the ability to make a thousand dollars a day, tax-free, would disappear.  By the way, may I ask exactly what job a young black man can opt for that has that income potential?  Good luck with your list of alternatives that have equal earnings capacity, and thus good luck with your argument that this isn't an economic decision.

  • The cops that make billions allegedly "interdicting" said drugs.  Some departments have half of their budgets made up of forfeiture proceeds.  That corrosive impact extends all the way down to your local police department and all the way up to the FBI.  Never mind the jails we have to build, staff and operate to lock up all these participants in consensual economic transactions.

  • The politicians who want their wedge issues -- specifically, gun control and welfare.  Yeah, it doesn't make the news when a black guy shoots another black guy on a corner in Chicago.  But when it spills out where white people can see it (e.g. on Michigan Avenue in the MagMile area) then it suddenly becomes a screaming point for said politicians to exploit.

  • The members of the public who want their polemics to demonize people who aren't like them.  

Here's the ugly truth: The last group is the largest by far, and yet all of you enable the people above that profit, both monetary and in human misery, from the bullshit that spews forth.

There's a very clean argument to be made that we shouldn't be spending welfare money on drug addicts so they can sit around and stick needles in their arm.  Ok, but let's ask the question the other way: Why do we have the present welfare system at all?

Oh, you say, there are real people who are really down on their luck and need some help?  I agree with you.  How about this: Three hots and a cot, along with a place to shower, shave and shit.  Anyone can come there and get a bowl of soup and a cot to crash on in a heated, dry space -- and a place to shower and shit in the morning.  Doesn't matter if you're rich, poor, young or old.  We can certainly afford to do that as a country.  But here's the bargain: One act of violence or thuggery against anyone else in or around the facility and you're barred for life.  Period.  Behave like a human or starve like an animal.  You choose.  That's not a new position by the way; I put it forward during the first part of the crash in a white paper I sent to all 535 members of Congress.

Yes, I know, it would be "degrading" to have to give up your flashy rims and such, along with your 65" widescreen TV and XBox.  Oh darn.  You know what?  You can go get a job instead of taking advantage of the free place to sleep and free food!  Can't find a job?  It's a big country; there is always an opportunity somewhere and mobility is an asset in that case.  Sounds like you just found some mobility, since you have nothing.

If you want to get high then have at it.  Again, so long as you don't commit violence against someone else I don't give a damn what you do.  There's no more money in it with these changes and you can't leech off society either, and there's no reason for anyone to "push" drugs.  They're in the drug store (duh!) and you have to show ID to buy 'em. Injected drugs all come in a package with a one-time-use syringe per dose (make them so they cannot be reused as they have a ratchet mechanism in the body that allows it to be withdrawn outward only once, going a long way toward addressing the transmission of disease, most-particularly but not exclusively HIV and Hepatitis, among IV drug users.)  No kids under 21 permitted, and I'm perfectly ok with making furnishing to minors exactly as it is for booze.  No pharmacist in his right mind is going to risk his or her license and six-figure income to sell to 17-year-old Jane.

We can do this and drop the BS.  All of it.

Or we can keep up with the claims that black people are inferior and incapable of making economic decisions for themselves.

To all the politicians, pundits and citizens: Which will it be?

Categories: Economics

The Market Ticker - It's Not The Salt, It's the Damned Carbs

The Market Ticker - 14 September 2014 - 11:00pm

Another one of these....

As for the factors that did seem to influence blood pressure, alcohol consumption, age, and most of all BMI were strongly linked to a rise. Eating more fruits and vegetables was significantly linked to a drop.

“Stopping weight increase should be the first target in the general population to counteract the hypertension epidemic,” the study authors wrote.

How do you do that?

Get the damned fast carbs out of your diet.  

All of them.

Your body is quite-capable of regulating its caloric intake to what it needs to maintain a healthy body mass if you stop tricking the mechanisms that worked great before we had all that refined crap (e.g. breads, refined sugar, etc.)

Of course the CDC disagrees -- damn the facts.

Yes, I know "it's hard" to stop eating all those carbs because you like them.  Let's call that what it is: Addiction and, therefore, craving.

This addiction is just as nasty as most of those evil drugs the government screams about (and will put you in a cage for) and has a better shot at killing you than many of them.

Everyone's different, but if you've got high blood pressure you're probably overweight and if you're overweight there's a damn good chance you eat fast carbs all the time.

Heh, it's your ass.  The size of your ass.

Categories: Economics

Free fall events in Delco - Delco News Network

Transition Towns in the media - 14 September 2014 - 5:03pm

Free fall events in Delco
Delco News Network
Friends of Glen Providence Park will present ViVaCe Strings for a free classical concert in the park 4:40 to 6p.m., Saturday (Sept. 6). This is the third and last concert in its 2014 Summer Concert Series,. ViVaCe Strings, a quartet of professional ...

Categories: TT news

Free fall events in Delco - Delco News Network

Transition Towns in the media - 14 September 2014 - 5:03pm

Free fall events in Delco
Delco News Network
Friends of Glen Providence Park will present ViVaCe Strings for a free classical concert in the park 4:40 to 6p.m., Saturday (Sept. 6). This is the third and last concert in its 2014 Summer Concert Series,. ViVaCe Strings, a quartet of professional ...

Categories: TT news

The Market Ticker - The Latest Action of Teacher's Unions: Ban Them

The Market Ticker - 14 September 2014 - 7:47am

This sort of activity is a direct assault on the children they claim to be employed to "teach":

'There's no partisan politics about kids. It's all about doing what's right, first and foremost." So declared then Republican Governor Charlie Crist upon signing the nation's largest expansion of private K-12 scholarships in 2010. Now Mr. Crist is running to get his job back as a Democrat, and his new union friends are suing to block his tax-credit scholarship program. Mr. Crist now says he wants to stop the expansion.


The new union lawsuit complains that this growth is undercutting the state constitution's requirement for the "adequate provision" of public education. Their beef is that districts lose $6,944 in state funds for every public-school student who uses a scholarship to attend a private school.

In other words even though no public funds are used the fact that money is paid to the district for each student and those funds go away when the kid does this constitutes "undercutting" the State's requirement to provide an "adequate" education.

Even though the reason it's a per-pupil stipend is that the costs are allegedly linked to the number of kids!

This may not legally rise to the level of racketeering or extortion but it sure as hell does rise to the level of assaulting the educational integrity of the children who are allegedly being educated by these union members.

The simple fact of the matter is that public-sector unions need to be barred as a matter of both State and Federal Law.  They are inherently unable to exist without violating the basic precept of adversarial bargaining, since they can (and do) effort to elect people to sit on the other side of the table that will do as they wish.

That turns all such "bargaining" into an open and notorious, but legal fraudulent edifice and there only one remedy: Get rid of all of them.

Categories: Economics

How To Annoy A Peak Oil Theorist: The Soft Patch In Oil Prices Is Here To Stay - Seeking Alpha (registration)

Peak Oil - Google - 14 September 2014 - 3:21am

How To Annoy A Peak Oil Theorist: The Soft Patch In Oil Prices Is Here To Stay
Seeking Alpha (registration)
One good way of estimating whether oil is expensive or cheap is to take total oil consumption, multiply it by international oil prices, and express the result as a share of GDP. The result is a measure of "oil spend", which, over the past 40 years has ...

and more »

The Market Ticker - So About Your Brokerage Account....

The Market Ticker - 14 September 2014 - 2:43am

Laurence Kotlikoff and I have about as much in common when it comes to how we see economically-related thing as a Southern Baptist and a Gay Pride supporter have in common on sexual congress between adults, but when you're right -- you're right.

If you experience an insured loss and the insurance company doesn’t pay, you know you’ve been scammed. As I’ve discussed in a series of columns posted at www.kotlikoff.net, SIPC (the Securities Investor Protection Corporation) is running an enormous scam in claiming to insure our brokerage accounts against fraud. SIPC’s refusal to pay the legitimate claims of most Madoff victims and all Stanford victims makes this abundantly clear.


Here's the gist of the SIPC "guarantee" -- you're not protected against making a bad investment, even if the broker was the one who suggested or steered you into it.

However, you are protected against missing securities -- that is, theft.

So in the case of Stanford and Madoff what happened is that we had a crook that stole the funds.  If you get a statement from a broker that says you own 100 shares of IBM and when the time comes there really aren't 100 shares of IBM being held in street name for your benefit, the SIPC is supposed to cover that.

That's the entire point of the SIPC.

But what they argued, successfully in court, is that a Ponzi Scheme unknown to the customer is not "missing securities."

In other words theft is only theft when they say it is.

That's sort of like all the Banksters who said that perjury wasn't perjury because, well, they said it wasn't.  And the courts let them get away with that in thousands of foreclosure filings.  The same thing was true with banksters selling worthless securities and all other sorts of games during the "go-go" years -- all of which bit people in the ass when the truth came out.

Or, for that matter, it's like an insurance company selling you fire insurance and then, after the fact, claiming that because your second cousin didn't cause it that's not actually a fire -- as you stand beside the smoldering remains of your home.

This sort of lawless bullshit is part and parcel of everything these days.  And while Laurence is right about there being no remedy other than closing your accounts (where will you put the funds, may I ask?) where he's wrong is that this sort of argument ought to be considered evidence of bad faith at best and possibly even outright fraud in the inducement.

Of course that would require handcuffs, and Mr. K isn't ready to call for those.  I, on the other hand, have been looking for them for years in this regard.

You should read his article, by the way, in full.  

It shows you exactly how depraved our government has become in this regard in that such an argument wasn't laughed out of the court and the attorney making the argument sanctioned.

As for what to do, well, I know what America won't do -- no demand for it to stop will be made.

Bonne chance mes amis.

Categories: Economics

The Market Ticker - Wait -- Big Black Scary Rifles Aren't The Problem?

The Market Ticker - 14 September 2014 - 2:40am

In the mainstream media?  Who woke up this morning?

OVER the past two decades, the majority of Americans in a country deeply divided over gun control have coalesced behind a single proposition: The sale of assault weapons should be banned.

That idea was one of the pillars of the Obama administration’s plan to curb gun violence, and it remains popular with the public. In a poll last December, 59 percent of likely voters said they favor a ban.

But in the 10 years since the previous ban lapsed, even gun control advocates acknowledge a larger truth: The law that barred the sale of assault weapons from 1994 to 2004 made little difference.

It turns out that big, scary military rifles don’t kill the vast majority of the 11,000 Americans murdered with guns each year. Little handguns do.

In 2012, only 322 people were murdered with any kind of rifle, F.B.I. data shows.

The problem is that this isn't a 2012 statistic.  It's an "always has been that way" statistic.  Big, black scary rifles and shotguns are used in almost no murders, statistically.  And as I have repeatedly pointed out the DOJ's own statistics tell a much more-somber tale but one we refuse to talk about: About 5,000 black men are murdered with guns annually, nearly all by other black men -- roughly half of all murders -- but the percentage of the population they represent is six percent, give or take one or two.

In other words that particular group of people is eight times more likely to be murdered than their share of the population would suggest.

It's worse - the public was sold on this ban originally because yes, these weapons are used in one particular sort of gun violence event more than anything else -- mass-shootings.

But your odds of being shot in one are vanishingly small -- there are only about 100 victims of such crime annually, or about 1% of all firearm homicides.

If we got rid of all the other shootings the mass-shooting homicides would still shock and horrify, but we'd have eliminated virtually all firearm murders.

If you want to be serious about putting a dent in homicides you need to look at who's dying on an outsized representation compared against their population share and why.  The "who's dying" is young black men.  The "why" is mostly related to violent gangs, and those are mostly related to the illegal drug trade.

That trade is a wholesale creation of our political process that has criminalized people wanting to get high on something the government disapproves of -- while leaving other things (e.g. alcohol) legal and taxed.

If you legalize and regulate drugs -- all of them with the exception of those that really have no "high" purpose (such as krokodyl) and sell them over the counter with ID checks the outcome would be profound.

The funding source for these gangs would be eliminated as would the reason for them to engage in violence; beefs they cannot take to a courtroom because their activity is illegal.  Yes, people would get high, but people get high now.  We'd dramatically shrink the prison population, eliminate all the "civil forfeiture" games that often catch innocent people and steal their property without recourse, and with all the money that was being spent on that enforcement and incarceration we could fund addiction treatment for those who want and seek it.

But that would mean pulling our head out of our ass and admitting that we have too many cops, too many jails, and we have built an entire industry centered around caging people who have done no violence to another, along with fostering and endorsing homicide as a means of settling beefs rather than imprisoning only those who are a true menace to others -- while we intentionally let out of prison those who are dangerous predators.

Don't expect that much common sense to break out any time soon.

Categories: Economics

Worthing beach clean returns - Worthing Herald

Transition Towns in the media - 14 September 2014 - 2:16am

Worthing beach clean returns
Worthing Herald
Organised nationally by the Marine Conservation Society, the event is being run locally by grassroots sustainability group Transition Town Worthing (TTW). Barbara Shaw, from TTW, said: “The beach clean is always a fantastic day and we're grateful for ...

and more »
Categories: TT news

Home grown veggies and pie-eating competitions at these Tooting food festivals - Time Out London

Transition Towns in the media - 13 September 2014 - 11:34pm

Time Out London

Home grown veggies and pie-eating competitions at these Tooting food festivals
Time Out London
Tooting Foodival runs Saturday September 13 and Sunday 14, organised by Transition Town Tooting. On Saturday donors drop off food they've grown locally and on Sunday guests are invited to come and eat it. It's a proper community event, now in its ...

Categories: TT news

The Market Ticker - You Know That Facebook Messenger App?

The Market Ticker - 13 September 2014 - 11:31am

Gee, they'd never do anything like this at Facebook, would they?

A month later (after being effectively forced to load their messenger application - Ed), Facebook Messenger has reportedly been downloaded more than 500,000 times for Android devices alone. It also remains the number one most downloaded free app on the Canadian iTunes App Store.

Some of those who downloaded the app may be thinking twice this week about keeping the app around, however, in light of one iOS forensics and security researcher's recent assertions that Messenger is tracking more data than most people realize.

"Messenger appears to have more spyware type code in it than I've seen in products intended specifically for enterprise surveillance," tweeted Jonathan Zdziarski, a noted author and expert in iOS related digital forensics and security on Tuesday.

Facebook has denied the accusations, of course.

But heh, it's just a matter of these guys who do this stuff for a living looking at what it does and what it sends to "mother."

You decide who you wish to believe and whether you care if everything you do winds up in Zuckerburgler's hands.

Categories: Economics

3 Things Driving the Biggest Investment Story of the Decade

The Daily Reckoning - 13 September 2014 - 8:39am

The thesis is simple: Wealth is created by real economic growth, not smoke and mirrors.

Real growth, in turn, has historically been created by new technology.

Compare the average per capita economic output and standard of living before the industrial era with what came after the invention of the steam engine. The gains were enormous.

Investors often say, “The trend is your friend.” Technological innovation, therefore, is the mother of all friendly trends.

In all areas, as the developing world has caught up to more-advanced nations in the use of technology, we have seen the differences in wealth between the two shrink or disappear altogether.

A cursory look at the history of science and technology reveals one glaring fact: The rate of change is constantly accelerating. More has been accomplished in the last few decades than in the previous few thousand years. Investors often say, “The trend is your friend.” Technological innovation, therefore, is the mother of all friendly trends.

One of the biggest opportunities is profiting from the obsolescence of the “old internet”.

The Internet and its user base of billions worldwide are in the middle of a crisis — a bandwidth crunch that impacts us all. Every single year for the past 5 years, Internet traffic has doubled with no signs of slowing down.

Since the Internet boom of the 1990s, Internet infrastructure has not had a major upgrade in carrying capacity. Now, for the first time in more than a decade, we are on the edge of an immense spending cycle aimed at upgrading those “old pipes.”

The critical shift in standard necessary to keep those “pipes” from clogging is from decade-old 10G (10-gigabit) bandwidth capacities to the faster, higher-capacity 100G network. This new network bandwidth will become a global standard, running underground from city to city and undersea from continent to continent.

As with all creative destruction, there will be victims and beneficiaries of this trend. Luckily for you, this new spending cycle will be a multiyear benefit for one particular group: fiber-optic networking companies.

The fast lane of the information superhighway travels on pulses of light, moving primarily through fiber-optic cables and secondly through satellite. Over long distances — and increasingly over short ones — fiber-optic technology supplies the communications medium of choice.

Here’s why fiber-optic networking and equipment suppliers will be one of the best tech trades of the decade…

There are three big drivers of big data traffic. The first is video distribution.

Google’s YouTube, Hulu and Netflix have helped video become the biggest single consumer of bandwidth capacity in the network. In fact, Netflix and YouTube combined soak up more than half of all the Internet bandwidth in America.

What happens when we all switch to streaming video online? For one thing, these platforms keep adding higher quantities of video to their services. But video has improved in quality as well. High-definition video doubles bandwidth, for example, and emerging 3-D video formats can redouble it.

The second driver that’s causing this bandwidth crunch is voice.

…if a device can benefit from an Internet connection, it’ll inevitably be connected to it at some point in the future.

Leaving aside the fact that widely used programs like Skype, FaceTime and Google Chat combine high-bandwidth video with their phone calls, communications are becoming more and more international. Such long distances demand more reliability. Moving alongside voice is also music, which is digitized and broadcasted through popular apps like Pandora, Spotify and more.

Last of our big three bandwidth users is data.

Cloud computing, or the shift of software and computing services from independent networks to online providers, is the big kahuna when it comes to data. When we store our data in cloud-based data centers, it’s channeled over vast geographical areas in order to maintain resilience and closeness to users. That means that when you plug into the Internet, the cloud must be able to accommodate incoming traffic from anywhere and everywhere.

There are, of course, less obvious contributors to the bandwidth crisis. But they’ll become more obvious as all “dumb” devices are brought into the “smart grid”.

Ultimately, there is no device that can’t turn “smart.” All that means is that if a device can benefit from an Internet connection, it’ll inevitably be connected to it at some point in the future.

Here are few possibilities:

  • Every appliance in every house, fighting with laptops and TVs for Internet access.
  • Every car you see on the road, downloading maps… and uploading vehicle data.
  • Every hospital bed, sharing patient data with doctors.
  • Your clothes, full of biometric threads that record data for your doctor.
  • Every scrap of data on every computer, getting backed up to the “cloud.”
  • Every plane in the sky, sending in sensor data of all kinds.
  • Every thermostat, street light, and piece of factory machinery, logging in.
  • Every vine in every vineyard or corn stalk in Kansas, talking to farmers.

According to a report Cisco commissioned, you could see as many as 50 billion connected “things” online… within six years from right now. Compare that to less than 9 billion today. Morgan Stanley puts that number much higher — at 75 billion.

That’s not just nine times bigger than our current “connected” economy… it’s also over ten times the number of people walking the planet. I can’t emphasize that enough.

At a potential of value of $19 trillion, that’s more than double the size of China’s economic boom… it’s triple the size of Japan’s output… it’s even bigger than the whole U.S. economy. Imagine taking all of our economic output and demand… along with all the wealth Americans have generated to get here… and tacking that onto the global market… in six years’ time.

The point is big data cannot be stopped. And somebody is going to need to build Internet infrastructure that can handle all the growth. At this rate, bandwidth infrastructure will become as important as road, water and electricity systems within the next decade.


Ray Blanco
for The Daily Reckoning

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Categories: Economics
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