Bad Art: Karl VS Carl

December 6th, 2015

If you've never seen the Walking and Talking Dead bad lip reading videos you're missing out...I’m so behind on Western media that the first time someone asked if I knew about the Carl Poppa video, I totally had the wrong idea.

The Yuan: Stealing from Piers to pay 保罗

December 1st, 2015

So, indeed the Yuan was made into a reserve currency and the link-by-failure is already being established. It is interesting, though, that the bulk of the value transfer involved is coming from the Euro, not the Dollar or Yen. Linked by the IMF formally or not, though, if either the Euro or the Yuan fail over the mid-term the other will as well. The Chinese and Eurozone economies are intimately linked already, but were linked more by success than failure until now. That the failure of either is a very real possibility is too terrifying for the financial press to discuss, I think, and it is a political landmine public figures are trying very hard to avoid mentioning. It even seems that the made-up nature of Chinese government economic estimates isn’t even in the news much these days. You would think that little detail might enter into the discussion about adding a new currency to the IMF’s reserve currency group.

There is no longer a strong relationship among basic aspects of value assignment, legal ownership, practical control (that is, “real ownership”), vested business interest in terms of the performance value of concerns, and available goods and services in either the Eurozone or Chinese markets. While there are no recipes for economic success, there are several recipes for disaster (ask an economist about this — their responses tend to be as enlightening and humorous as they are depressing on reflection). A lack of correlation between various forms of utility values and assigned values is one of the disaster recipes. There is no easy way to fix this other than a kinetic re-establishment of property rights, and that means there is nothing left to do in the current situation than hope that when they do fail, they fail cleanly. But historically there is no such thing as a clean failure (in theory, of course, all sorts of lovely solutions exist).

Dropping an anvil on the overloaded camel’s back in the Eurozone or China would be rather easy at the moment, as both economies are in precarious situations. In fact, inducing a major market collapse would be so easy right now that failure is almost certain to come as the result of a deliberate action from an external player than by mere circumstance. The more players who realize this is true the more likely such an action becomes: why let a failure happen to you when you can be the one making it happen if the event is inevitable?

In describing the European and Chinese economic situations a financial analyst friend of mine used the phrase “poised to fail” (along with a lot of depressed-looking facepalming). When someone says that to a geopolitical analyst, though, ears perk up. There is always opportunity to be found in crisis, and sometimes when crisis is inevitable the best play is to be the cause of it yourself, because then you are the only one truly prepared. Consider the economic fallout of Russia’s invasion of Georgia in August 2008. A similar performance is absolutely not out of the question, nor is having some “terrorists” conveniently demonstrate the peaceful nature of some religion all over a ship in the Strait of Malacca at a perfectly horrible moment.

2007-2010 SPY chart

Rhetoric forces us to pretend that the August invasion of Georgia did not trigger a reassessment of risk in Eastern European carry trade loans, and instead believe that the already liquidated American subprime loans acted as a magical “contagion” that unfairly crushed the Eurozone. As if the European economies were not profoundly overleveraged and primed to implode.

There really isn’t anything to do about what is going on with the Yuan, really. This course was set about 20 years ago (yes, all the way back in 1995 — after the Cold War, after the first post-Tienanmen Square Five Year Plan was in action; as China started on its “Money is Good” -> “Expansion Above All” -> “Don’t Stop the Train” -> “WTO Rules? Screw the rules, I have money!” chain of policies). The general trend will continue, as none of the players seems to have any inkling of how to change the rules of the game — and the trend is of the end of a decades-long political and financial cycle. The way these stories end is never happy.

1984-2015 Money Base chart

Anyone who thinks that events since 2008 have been business as usual and that geopolitics plays no part in this because “its just a market hiccup” is deluded.


Every end is a new beginning, and that’s what is really worth focusing on. That may sound like small comfort (and it is), but if you already know things are going to get worse before they get better, then at least you won’t find yourself sleeping in a bed of broken dreams. It is too soon to tell which way this Jenga tower is going to topple, but we are nearing the end of this round of the game.

China: Yuan Will Be a Reserve Currency, Come What May

December 1st, 2015

EDIT: Indeed, it has been made a reserve currency, or at least it looks like announcements have already been made to pave the way.

The IMF is considering adding the Yuan to the group of reserve currencies. That would put it alongside the U.S. Dollar, the Japanese Yen, the English Pound, and the Euro in terms of “officially perceived” stash-your-value-here viability. As far as actual criteria for inclusion go, the Canadian Dollar, Australian Dollar, and very likely the Russian Ruble are probably actually closer to being genuine reserve currency material than the Chinese Yuan.

But… politics.

China is much closer to a total financial collapse and internal civil disruption* than recovery and stability in its current form. Long-term, of course, China will still be right where it is and the people there will still be Chinese (but there will eventually be far fewer of them, at least for a few generations). A Chinese collapse right now would be a major disaster for everyone. The commodity markets are depressed more than they have been for several decades (in relative terms, actually, I’m not sure that we actually have a post-WWII precedent for what is happening), energy is cheap, credit is massively overleveraged, and yet people aren’t buying enough stuff to keep the wheels spinning.

What does that have to do with the Yuan becoming a reserve currency? It does three things:

  • Gives China access to an external aggregate value device to prop up the yuan if necessary (links their economy to everyone else’s by failure, similar to the way subsidies can do this within a national economy). This effect is actually more a hoped-for psychological effect on the market than a tangible superpower China is being granted by the rays of a yellow sun.
  • Makes the Yuan a necessary holding for anyone trying to carry a balanced basket of reserve currencies (temporarily spikes demand for the Yuan).
  • Promotes an impression of stability in the Yuan (well-founded or not).

Why would the West agree to this? (And I say “the West” because, let’s face it, Washington and London are pretty much the ones who will be deciding.) Because if China were to fail right now it would be a severe annoyance for the U.S. and a complete disaster for Europe and Russia. Nobody really knows what the fallout of that would be, but it wouldn’t be pretty.

The Yuan will be made a reserve currency, whether it makes sense or not, and whether it actually fits in the reserve currency club by the standards and rules the IMF itself has laid out. These are scary times and nobody has any good levers to pull to “fix the economy” so national governments and central banks are pulling at straws because there is simply nothing left to try. All the control rods have been yanked out and tossed already, or shoved in and locked tightly; all the red buttons have been mashed; all the hyperbolic rhetorical devices have been so over-used at this point that the only thing that might actually influence market participants is a frank exposition about the truth rather than more “we’ll do whatever it takes!” and other gung-ho, “it’ll work this time” and “this is the lastest of the last rounds of QE, and this time it will really be the most effectivest of effective measures… I promise!” blather.

[* China is due for two painful corrections which will likely occur together, as they are linked. The first is a political correction; China’s geography does not lend itself to a central command economy. The second is a property-claims correction; when basic goods cannot be had at any price it means the entire system is so out of whack due to government interventions that only a hard reset can fix things. This will likely take the form of a civil war, but who knows. It could be gradual decline toward state failure followed by a logical and non-violent nation-wide roundtable discussion, or even a bloodless revolution coupled with a voluntary capitulation of material holdings by the power elites. But seriously, this has never happened in history and there is no reason to expect China’s inevitable transitions to occur independently of one another, or for either to be non-violent.]

Bad Art: Ahh! Beer! (Self Portrait)

November 30th, 2015

This is the only self-portrait I’ve ever done. It is from a nice memory I have of taking a trip to Hokkaido with my then-girlfriend (now wife) between contract jobs. If you’ve never been, I strongly recommend Hokkaido in late summer — beautiful people, delicious food, lovely driving.

As with other images, these progress from raw images of the pencil sketch to some image work in gimp to blend lines, smudge things up, etc.


Raw sketch image.

After some chunky background removal…


Sketch after some chunky cropping.

After some closer line cropping…


Sketch after some more detail removal.

Touch up the outline just a bit more…


Sketch after some closer outline work.

Now to start on the line removal and smudging…

Sketch after some initial smudge work.

Sketch after some initial smudge work.

Forgot the darn letters. Working around written text is not easy sometimes.

Sketch after some more detail work on the letters.

Sketch after some more detail work on the letters.

Now to brighten things up a bit.


Sketch after brightening.

And done!

This one came out better than some other attempts I’ve made — hence the only self-portrait that survives. I’ve never tried a real portrait-style sketch of myself. Its not like the world is missing out on anything.

Below are a bunch of in-progress screenshots of this image as I edited it. Nothing magical, its more a testament to the amount of time I had on my hands when I did this — I didn’t have a Wacom tablet or anything. Actually, I don’t think I ever had a mouse. If I remember correctly I did all this editing using a touchpad.

If I did have a Wacom tablet I would probably still draw some. But meh, the world is just chock full of supremely gifted and properly trained artists. I only did these because they were fun.

Screenshot-5 Screenshot-6 Screenshot-7 Screenshot-8 Screenshot-9 Screenshot-10 Screenshot-11 Screenshot-12

Bad Art: The Natsumi

November 30th, 2015

I did a sketch and cleanup of a larger view of Natsumi. Hopefully she won’t get mad if she sees this (I’m married to her now!).

As in other images I touched up, I’ve put the intermediate stages here, beginning with the raw photo of the sketch, moving through stages of touch-up in gimp.


Raw sketch image.

Make it look like the outline of an 8-bit game character…

Sketch with big chunks of the background removed.

Sketch with big chunks of the background removed.

A bit more detailed outline work…


Sketch after detailed outline removal.

After getting a bit of the easy smudge work out of the way…


Sketch after some early smudge work.

Now a bit more detail work…


Sketch after some detail smudge work.

And some brightness/contrast work…


The sketch after some brightening.

It appears I stopped here. I never did refine the hard pencil outlines. Meh.

Bad Art: Natsumi’s Facial Lines

November 30th, 2015

I wanted to take a shot at drawing facial lines, and since my girlfriend’s face had nice lines, it was a perfect subject. I never got good at this style, but I really like the effect it has. Not nearly as cartoony or アニメ as the way I usually do stuff.

I don’t have any touched up versions of these, these are the only images I have. (I wonder if there are sketch books just sitting in my old kit bags somewhere…?)

Natumi's face, direct view.

Natumi’s face, direct view.

Comparing both of these now, I think I like the second one more — but that’s probably just because of the expression.

Natsumi's face, slightly oblique.

Natsumi’s face, slightly oblique.

Bad Art: The Tia — Less Hair

November 30th, 2015

I took a picture of a friend of mine after she shaved her head close, and decided to sketch it to see if I could. The sketch is a bit of a disaster, but the image is still funny to me. This is my only photo of it.

The Tia, after a haircut and demonstrating her typical concern for the impression she makes on others.

The Tia, after a haircut and demonstrating her typical concern for the impression she makes on others.

Bad Art: The Tia

November 30th, 2015

Special circumstances tend to attract special company, at least that’s the way my weird life tends to work out. I met a phenomenal person in Iraq who had a striking profile. I decided to sketch her a few times. Here is the result of one attempt.

The images progress from raw photos of the sketch to a more processed look.

Raw photo of The Tia sketch.

Raw photo of The Tia sketch.

After a little outline removal and cutout work…

Sketch image after from outline removal.

Sketch image after from outline removal.

After a little more gimp work to selectively blend and smudge the paper-lines away (I didn’t have anything other than Iraqi college-ruled paper available)…

The sketch after some smudging and shading work.

The sketch after some smudging and shading work.

The final product still shows the effect of the lines on the paper near the bottom right of the image — but I either didn’t notice or didn’t care. Meh. I enjoyed this anyway.

Here are some screenshots I apparently took while doing the processing work…

Screenshot Screenshot-1 Screenshot-2 Screenshot-3

That was actually pretty enjoyable, almost monk-like work.

Bad Art: Welcome Back From Leave

November 30th, 2015

I made a few sketches a few years ago while bored out of my mind in Iraq. This is one of them. First is the raw image version, the second is after I cleaned it up with gimp. I seem to have either never finished the cleanup, or just lost the finished version. But whatever.

Convoy receiving a welcome-back present.

Raw sketch image

Slightly processed version.

Slightly processed version.

The are signed using my nickname because I was still connected with the military at that time and there was a lot of fuss over whether or not exposing identities was a big bad thing or not. I chose to avoid the issue by never producing anything under my legal name for quite a while, and mostly put stuff on other sites (like this deviantart account to prevent finger pointing).

If I remember correctly, I was drawing this off of an AAR video of an incident that happened just as I started my second contract out there — bad luck. The reason I chose to draw this, though, was I wanted to try to draw an explosion in pencil, and had seen some really awesome explosion sketches on some sketch art sites. I think the explosion turned out OK, but the rest of the sketch isn’t particularly interesting. Meh. I’m pretty bad at drawing fences and trees (at least as background).

2015-2016 Energy Price Drop Will Disentangle Russia, Not Crush It

November 30th, 2015

Energy prices are dropping. Commodity prices are dropping, actually, in general. Production is slowing. People are finally realizing that China is as flimsy as government construction. The Euro is indeed linking Eurozone economies by failure instead of success, and doing so in a way that limits their market rights. The EU is inherently unstable. Cold War II is finally no longer a secret (though many folks are still oblivious to it).

Long story short: a lot of stuff is going on!

This is one of those “interesting” periods in history — the kind that Chinese proverbs use as a curse. Or, rather, we are re-entering a normal period in history, one where there are more than two poles to the world, and the Cold War alignment stresses are not purely polarized — which means more interesting plays for middle empires (like France), and a very strong possibility that empires that are currently viewed as either permanently vanquished (Japan and Thailand) or part of the new world standard (China) are likely to either find a way to rise again, or endure complete collapse prior to changing form entirely upon resurrection.

Japan might realize the space play it could make by diverting public largess toward space instead of beautifully designing dead-end mountain roads. China will very likely endure a civil war, but it could just as easily be won by the standing government which changes form after it wins as it could be reformed as a republic under a totally different political concept. France my find a way to leverage its African empire to provide an energy alternative to Germany and thereby insulate it from Moscow’s control at the same time it forces it into a subordinate relationship (winning a Napoleonic victory without fighting a war — the way the Germans thought they were “re”winning WWI without fighting a war by imposing the Euro as the new European currency under their former central bank, renamed as the ECB). The Turks may find a way to leverage their water control position over Iraq and work to put ISIS in control of Baghdad as part of a bid to force them to normalize by giving them something that can be taken away. Tehran and Washington are very likely to become close allies. etc.

The world is changing.

Many folks feel guilty pleasure at watching Russian financial numbers decline and the ruble fall as energy prices sink worldwide. Folks think “ah, this is finally it, once Russia’s economy suffers enough, Moscow will have to agree to work with Washington and stop bullying the East so much”.

Well, that last part isn’t going to happen. Not because of energy prices, anyway. There are two reasons for this: Russia doesn’t need money the same way other countries do, and in some regions alternatives to Russian energy are impossible to obtain at any price.

The first point is that Russia is a raw-materials exporter, and also maintains a considerable high-tech domestic manufacturing capability. The reason we don’t see more Russian products in the world, though, is because Russia lack much heavy shipping infrastructure. In particular, its ability to push products to ocean ports is severely limited, so it will never make sense to produce finished goods in the interior of Russia, ship them by rail or truck overland to deep water ports (across hostile political lines, no less — if you think pre-Civil War inter-state tariffs were insane within the United States, imagine what they look like in the middle of a Cold War-style mutual embargo and tariff festival), and from there to the world. China is a much easier shortcut. On the other hand, it will always make sense to ship raw materials from the interior of Ukraine or Russia (which are effectively controlled by the same political decision-makers — even more obviously now than ten years ago), because raw materials can only be had at their sources.

A big part of Russia’s power comes not from being able to throw money around, but by being able to make client states become dependent on material subsidies from Russia. If the Russian’s are subsidizing gas at a certain price in Germany, then the existing infrastructure will be built with that in mind. That lowers the difficulty of obtaining and routing that energy source. That means it lowers the cost of extending that infrastructure and thus deepening systemic dependency on that source over time. That means Russia winds up with a lever of control. As long as nothing bad happens Russia will keep the gas flowing. Once things go their way or favors are refused gas lines might “suffer breakdowns” and prices might arbitrarily increase. It doesn’t matter if the global market price for natural gas is X if that gas is physically impossible to obtain in any significant quantity when you are talking about powering an entire national economy’s energy needs. The local spot price of the gas can be whatever Russia makes up — and if Russia wants to cause pain it can simple experience a series of conveniently timed technical difficulties.

The Russians of today can, as they have for the past several waves of their history, substitute labor for capital when necessary. The methods by which this is accomplished change a bit every generation — conforming to the expectations of the peasantry (and for all practical purposes Russia is still a country of peasants and royalty). A drop in the ruble is annoying, it prevents Moscow from keeping the charade of open engagement with Western economies alive, but does not fundamentally change the power relationship between the West and East, and certainly does not change the geopolitical calculus over the long-term.