1. Dave Bath
    Posted April 29, 2013 at 10:28 am | Permalink

    Trace metals and China … particularly rare earths (for doping semi-conductors) … still a biggie, probably a large part of China’s approach to Africa, so similar to the US approach to the Middle East.

  2. John H.
    Posted April 29, 2013 at 11:32 am | Permalink

    Selenium is a trace metal, small amounts are a necessary part of our diet. A somewhat higher amount is needed to raise healthy horses. The soils of China have sufficient selenium for healthy humans but not so for raising healthy horses. Which meant that the world’s largest economy had to continually import horses, generation after generation.

    Wow. There is a region in Tibet of selenium poor soils which results in a particular form of arthritis and goiter. Selenium is an essential co-factor in thyroid function and also very important for glutathione synthesis, glutathione being a critical antioxidant if not the critical antioxidant. There are even studies linking low selenium with depression(which may sound strange but is not if only because low thyroid function can present as depression). In Australia they also had to introduce selenium into cattle feed in some regions.

    Selenium deficiency is common and a problem, brazil nuts are an excellent source but don’t go crazy because too much selenium is toxic. Maintaining a good selenium level is essential to our health.

  3. Posted April 29, 2013 at 8:23 pm | Permalink

    I wish I could give this fabulous post the attention it deserves.

    Back to tax, alas.

  4. Posted April 29, 2013 at 9:22 pm | Permalink

    The soils of China have sufficient selenium for healthy humans but not so for raising healthy horses. Which meant that the world’s largest economy had to continually import horses, generation after generation.

    And now they’re the predominant supplier of rare metals.

    We are on the roller-coaster ride of trade.

    So what’s the current state of affairs? Australia/Canada/South America/Africa as the mineral suppliers, Middle east for oil, China for manufacturing, America for technology/IP… what’s Europe got left to bring to the table?

    Back to tax, alas.

    What good is a successful trade economy if you can’t tax the bejesus out of it? 😉

  5. Posted April 30, 2013 at 4:49 pm | Permalink

    [email protected] Commodities stopped dominating world trade some time ago, that’s the point about being in the industrial age 🙂

    China is still relatively low end manufacturing, manufacturing production is still dominated by Europe. And Europe has lots of history to sell. Lots and lots.

  6. kvd
    Posted May 3, 2013 at 11:23 am | Permalink

    Thanks for a really interesting essay Lorenzo!

  7. Posted May 3, 2013 at 1:28 pm | Permalink

    [email protected], what about ‘capital’? Does the GFC show how much capital (and debt) drive world trade in this day and age?

  8. derrida derider
    Posted May 3, 2013 at 1:59 pm | Permalink

    wonderful post.

    One thing that used to puzzle me was the prevalence of long-distance trading in rock salt in both Africa and Asia. Rock salt is bulky, is easily substituted by sea salt and is very un-waterproof – not an obvious trade good at all. But this post has got me suspecting it wasn’t the sodium chloride that was being traded but, unbeknownst to buyer and seller (they just thought “a gram a day keeps the doctor away” without knowing why), trace metals in it.

    There’s a PhD thesis for someone somewhere in there …

  9. Posted May 4, 2013 at 1:46 pm | Permalink

    [email protected] The GFC only tells us about the propensity of sustained income surges to produce asset bubbles, problems with prudential regulation and central bank incompetence.

    Trade in capital is huge, but so it was in the C19th. The UK c1900 was running capital account deficits (and so current account surpluses) at a scale considerably larger than Japan c.1980–i.e. was massively exporting capital.

    Various colonial governments were very fiscally restrained–not engaging in public borrowing, discouraging capital inflows. This did not help their long-term prospects.

    The massive turnover in financial markets is new, being a product of communications and information technology. But as it operated during the Great Moderation and the Great Recession, I don’t give its scale much explanatory weight.

    It is also worth nothing that neither India nor China noticed the GFC much, nor the Great Recession, and have continued to elevate millions out of poverty.

  10. Posted May 4, 2013 at 1:49 pm | Permalink

    [email protected] Thanks, high praise 🙂

    Not being at all knowledgeable in the differences between rock and sea salt, the trace metals idea is an intriguing one.

  11. Adrien
    Posted May 7, 2013 at 1:35 pm | Permalink

    The huge crash of silver at the dawn of the ’80s on that chart reminds me of my father’s way with money, he was lousy with it. He put all his savings in silver and kept it there thinking that it would always be dependable.

    He got wiped out.

    My mother wanted to buy property in Sydney in the late ’70s and he declined because, well women just don’t understand these things.

  12. Posted May 10, 2013 at 9:46 pm | Permalink

    [email protected] Misogyny being its own reward. Bit tough on the son-and-heir though …

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