Eye of Modok

Ladies and gentlemen, may I draw your attention to the curtain over here, to where the beautiful Miss Wong is standing … Now watch carefully… I am now going to make US$4 trillion magically disappear!!

OK, while it may not have been that dramatic in the execution, that is in effect what the World Bank recently did when they published updated statistics on the economic output of 146 countries, utilizing a method called “Purchasing Power Parity” (PPP) leading to a revised estimate of China’s GDP to $6 trillion. This is down from previous statistics which had it pegged at $10 trillion.

From the World Bank website:

In a report ranking the world’s economies for 2005, the World Bank said its updated survey using ‘purchasing power parity’ (PPP) shows a much smaller value for China than earlier estimates…The [International Comparison Program] study carried out by the World Bank and other partners was ‘the most extensive and thorough effort to measure the relative size of 146 economies using the PPP method which strips out the effect of exchange rates…

So, what impact can be expected by such an evaporation of trillions of dollars? Well, China is still the number two economy in the world, but the point at which it can be expected to overtake that of the US would certainly appear to be pushed back a few years. And the domestic problems it faces due to widespread poverty may begin to seem a bit heavier a burden.

In an article in the Los Angeles Times, Walter Russell Mead summed it up like this:

For Americans, the new numbers from the World Bank bring good news and bad. On the plus side, U.S. leadership in the global system seems more secure and more likely to endure through the next generation. On the other hand, the world we are called on to lead is poorer and more troubled than we anticipated.

While its true that China is one of the largest investors in the house of cards that is the US economy, it may very well turn out that as this century progresses, the rest of the world might start investing more and more in China, and Chinese currency, and less and less in the US dollar. The Chinese yuan may even become the preferred currency in the world. Still, $4 trillion vanishing into thin air must certainly be having a chilling effect in Beijing this New Year’s, beyond that which the cold Siberian wind blowing down from the north brings .

How the advertising industry responds to change

In an article on his excellent website GlobalIssues.org, Anup Shah writes about children as consumers, and how marketers have increasingly targeted children to the point where $15-17 billion is spent each year on marketing to kids, who influence an estimated $130-670 billion a year worth of parental purchases each year in the US alone. In the UK, last the Food Standards Agency (FSA) has promoted several measures designed to restrict the content of junk food advertisements targeted at, or easily viewable by children, as well as proposing a ban on online junk food advertising targeting the same demographic. I must say, I’m sympathetic. In a previous post entitled, “Know your market and hook ‘em while their young” I described first hand how my kids started out playing a coloring game online and somehow stumbled upon a “game” that was little more than a giant cinnamon stick gobbling up Apple Jacks, and how the next day they ganged up on me to buy them a box - not an easy request to accommodate in Beijing at the time.

Mind you, I complain frequently to anyone who will tolerate it about the proliferation of flat screen advertisements in buses, trains, and now even elevators! Mostly people just look at me as though I’m some oddball kook, but I am all too aware of the effect that advertising has on me, who, despite the fact that I am vigilantly on guard against the direct to subconscious metaprogramming tactics employed by marketers, still fall prey to their never ending assault on my senses. (Especially when it comes to food.) What then of the impressionable minds of children?

Well, my approach is to minimize the inevitable exposure to mind controlling media in any way possible, the most obvious of which is to limit TV watching. Now, before you get on your high horse and ask me how I can deny the kids their cartoons etc., that is not the case at all. Fortunately, DVDs are widely available and cheap in China, and offer nearly any content you’re likely to wish to view… without commercials.

The Internet is proving to be a larger problem, and, as, over the course of the next few years, advertisers migrate the vast majority of their advertising budgets to direct marketing on mobile devices, I’m afraid it will tax all my resources to stay the onslaught. I suppose the best I can do is to teach my kids to be aware of efforts to manipulate them at all levels, not just advertising, but also to guard against meme viruses, both organically evolved and contrived, that are rampant in society, and which propagate through peer pressure to accept certain “facts” such as “fluoride is good for you” and “the World Trade Center towers collapsed due to airplanes crashing into them” as “reality”, despite the overwhelming evidence to the contrary. In my opinion, a healthy skepticism is the sign of a healthy mind. Of course, an obsession with conspiracy is a path to paranoia and social ostracism, so where to draw the line is critical to anyone’s development.

There are a lot of great research papers out there on the subject of advertising to kids. Here are a couple I enjoyed:

Food Promotion to Children (pdf file)

Television advertising and children: lessons from policy development (pdf file)

Investors in Liberty Dollars are poised to earn windfall profits in the fiat currency they were meant to replace, while Liberty Services, formerly known as NORFED, Inc., the producers of Liberty Dollars, have been shut down, perhaps for good. The Ron Paul gold Liberty Dollar reached $3,537 on eBay and Nolan Chart gives an account of one investor who is already cashing in. They summed up the situation nicely:

Those who invested in Liberty Dollars from NORFED are poised to reap huge rewards, particularly since it seems likely at this point that they are no longer going to be minted. That makes them collector’s items, and collectible gold, silver, and platinum tend to sell at many times the intrinsic value of a precious metal coin, with the final value tending to be based on how many or few of those coins are in circulation. By raiding NORFED, the Feds are trying to punish that company for conducting transactions which clearly have enriched their customers many times over as a result of that raid.