Bypassing Lynch.

Has James Comey just bypassed Lynch and Obama in one fell swoop? By outlining the evidence, showing she is guilty and then saying he was not going ahead with a recommendation of a charge. He has booked himself an appointment with congress. Several congressmen have contacted him. This completely by passes the Justice department, Loretta Lynch and the whole Obama administration.
http://www.nytimes.com/2016/07/06/us/politics/hillary-clinton-fbi-email-comey.html?_r=1

This has resulted members of the House and Senate Judiciary committee calling within minutes. Jason Chaffetz has already set up meetings.
http://www.newsmax.com/Politics/jason-chaffetz-testofy-james-comey-fbi/2016/07/05/id/737207/


There is no precedent for impeaching an ex government officer but by setting it up as an enquiry into the Comey statement he has created a situation where he, Comey, the other FBI staff, can speak freely in public and Hillary and her staff can be called by congress under oath.

Note this is the house committee not the Senate where it may be seen as in conflict because Ted Cruz is still in the running for Republican presidential nominee. Cruz of course has demanded all the evidence be made available to congress. This means the James Comey can't hand over originals to the Justice department. Loretta Lynch has openly said she would rather shred the files rather than prosecute her friend Hillary.

If Comey had recommended a prosecution then Lynch could have killed the case within hours or days. Well before the Democratic party convention and the election. By openly redefining the law he forces congress to act and puts the case into the highest courtroom avaliable, congress itself.

The question of intent becomes the the key subject of debate and that goes directly to the question of motivation, Hillarys, Huma Abedin, and other staff. Why was it convenient to go outside the secure systems? Why did they consistently refuse offers to secure their systems; both the servers and the blackberries? We all know the reasons that Hillary had? Freedom of information requests. An illegal reason. There may be another reason. Huma Abedin has family ties to the moslem brotherhood. Some think that the server was setup and data moved to it for the sole purpose of that data being hacked.

Lynch and Obama want the server case cleared and forgotten. This kills any chance of that happening. A congressional enquiry will be broadcast worldwide. Keeping the case alive and ensuring that in the end the congress itself can call a Grand Jury over Lynch's head. While the case is live Hillary is damaged. The left don't care, they don't know anything about classification and hate FOI except when a Republican is in the White house.

However the hard left is not enough to elect a democrat to any post they need independants. This will mean those independents will continue to stay away in droves. It means if Trump fails to seal the nomination and it's Ted Cruz in november Hillery may see millions of independents switch to him as an honest and hardworking alternative.

Why Trump will lose in Cleveland.

Trump is relying on bound delegates to win but those arguing that the binding of delegates is disallowed in the party are now organized and publishing all the details. The Binding wording added in 2012 to block Ron Paul is now being exposed as only really valid for the 2012 convention and is up for revision in the first hours of the rules committee.
http://www.cnbc.com/2016/05/26/trump-hasnt-closed-the-deal-gop-delegates-still-decide-who-the-nominee-will-be-commentary.html It also did not work, see below.

Curly Haugland is fighting hard against bound candidates. The PDF linked to in the above link is free.

In simple terms it argues that a change in the wording of the rules was the dirty truck of 2012 and almost no one today supports it except Trump. Trump does not have the numbers in the rules committees and all delegates are unbound in the rules votes with Cruz way past 50% in those votes. This is why Cruz has persisted in getting his delegates into any vacant Trump spots. The Pledges on the first votes are unenforceable. They contradict all previous versions of the RNC rules except the 1976 one that was revoked in 1980.

The parties are private entities not governments. Corporate rules apply and the courts have confirmed the difference every time.
Also it's not been confirmed that over 17 Ron Paul supporters in the Nevada's delegation, 2012 republican convention, did not vote their pledge to Romney. They did not have the numbers but were not penalized and their floor vote, sans pledge, was fully recorded as a Ron Paul vote. That was the majority of the Nevada's delegation beaching their pledge in 2012. It never even made the news did it?

The election is in November the caucuses are not elections. Under American law they are all beauty contests and always were.

Trump keeps running foul of the residency rule in many states. A delegate must be a resident of the district that he or she represents. Here is the Clause for California. "What are the requirements for being a delegate? You must be a registered Republican and a resident of the Congressional District you are representing. You must attend the Delegation Meeting on Saturday, June 25, 2016 near LAX. You must commit to vote for the presidential candidate by whom you are selected." https://www.cagop.org/national-delegation/

In some cases Trump has either not found anyone or has not even submitted a list of prospective delegates. Note the last line "...by whom you are selected." If trump has not submitted the names then what does that wording mean?

Even rolling stone gets the implications. http://www.rollingstone.com/politics/news/how-zombie-ted-cruz-already-beat-trump-in-washington-20160524 "It is exactly the kind of thing Trump -- back when he still had a rival for the nomination -- would have railed against as evidence the system is "rigged" against his bid. But it's not part of an establishment conspiracy to snatch the nomination from under him; it's just embarrassing proof that team Trump has failed to execute some of the most basic functions required of a competitive presidential campaign. " ... "Cruz was able to win the vast majority of the Washington delegates because, when his campaign still existed, staffers put together lists of their preferred delegates -- a state convention voters' guide. The Trump campaign (and the Kasich camp, for that matter) didn't perform this extremely basic task. "I never saw a slate for Trump candidates," Crabtree says."
           You dance with the guy that brung you.

Trump is conspicuously silent on this and it has happened in all of the west coast states. He either does not understand the process or is not intending to win but is taking that act all the way so as to leave Ted Cruz the only man standing. I still can't tell which. This failure to get delegates lined up, even after being called in by Reince Priebus for a lecture on the point, does not help Hillary Clinton it only helps Ted Cruz.

In the 12th district of California; Central San Francisco, Nancy Pelosi's district, Trump is allocated Peter Thiel a known libertarian and past Cruz supporter, House majority leader Kevin McCarthy, former House committee chairman Darrell Issa and congressman Duncan Hunter Jr. There is no way Trump came up with that list. They are bound but How can the RNC sanction a billionaire and two sitting congressmen for not voting their pledge?
http://www.theguardian.com/us-news/2016/may/10/peter-thiel-paypal-co-founder-to-be-delegate-for-donald-trump


Cruz may beat Trump without the pledged delegate question. California is "winner take most" the worst worded electoral jargon on planet earth. In reality the state is proportional but at the district level. The winner of each district takes all 3 delegates but if Cruz gets 14 districts Trump is blocked at 1236. Trump only got 60% in Oregon unopposed.

This map is useful it shows how California's districts votes. As Gary North says go and vote against the Tax and bond propositions (even anarchist got to the polls to vote against these things). This is one of the best indicators of political positions. Personalities and political popularity is not in play in such a vote. Proposition was a special tax to pay for education (teachers inflated pensions) in bankrupt California. It failed.
https://en.wikipedia.org/wiki/California_Proposition_30,_2012#/media/File:CA2012Prop30-NoColor.svg

Yes Associated Press says Trump already has 1239 but they are assuming California is Winner take all and they are surveying unpledged delegates without saying who, what question they're asking and when they did the survey.

Some think that if Trump loses at the convention there will be a backlash with Trump supporters however that does not work out either. We have seen record turnout at the primaries but Trump has only got 30 to 40 % of the vote. That means that 60 - 70 % of that massive turn out was there to oppose him. It's bigger than the total November 2012 republican vote. The christian conservatives are activated. Only a percentage of Trump supporters will stay home.

The religious people supporting him tend to be new-age Pentecostals powered by dodgy prophesies. A prompt re-interpretation of the vision follows every such folly.

In other words people will vote this time around. If Cruz wins at the convention the huge collective sigh of relief will result in people that would not have supported him six months ago would support him. Even the View TV show that cut Trump off mid sentence would have Cruz gladly as a replacement. He has proved that he has the people and the organization for a campaign.

If the financial crisis hit Cruz's first term he will take it and use it to push through the reforms that are needed. Any one else would just take damage and make the crisis deeper. The anti-Cruz members of the republican party will not be able to attack the man that faced down Trump.

I don't expect to be believed. However if I am right you will be the one person in the room that will understand what just happened! God is in control. He needs no organizing committees to set things up. If I am right he is putting someone in place, a Goldwater republican, to take the coming crisis and turn them into reform.

Republican fun and chaos.

Now the real fun starts.

Ted Cruz has withdrawn. Trump will have 1237 at the republican convention at Cleveland next month.

I was of the opinion that Trump was running a decoy campaign for Cruz. I still think that that was part of someone's plan but it went wrong. I don't think Trump or Cruz were involved. Look for someone Trump has sidelined.

Trump has to fight Hillary but with what? Hillary is an easy scandal ridden candidate but has Trump been paying attention? All the attacks on her have already been made.

Now that Trump is only battling Kasich can he round on Kasich's history, background and policies? Again does he know them? Do they differ enough from his positions?

The greatest danger to Trump is always Trump. He has a month to go and plenty of opportunities to foul up.
Also now that Cruz is out of the picture, or so it seems, the media that has been supportive of Trump, because they hate Cruz's Christian conservatism, are now freed up to try and destroy Trump. And you know that the NeverTrump people will not let up.

Before it gets to the first vote Ted Cruz still has hundreds of delegates that are obligated to vote for Trump but who were banking on it being a hung first vote. What do they do now? If Trump stuffs up further some may decide to do the unthinkable at the first vote; Abstain.

Technically this means they have resigned and they could gladly and loudly do so. That is why all states have alternates. These alternates will step up to an unprecedented second First Vote. Some may vote and some may again abstain. Whole state delegations may take a stand.

Yes it would trigger a brawl, a genuine fist fight and the genuine risk of ending the republican political party. It would be an active decision by some to kick off and run another party by 2020, this year is not possible. A new conservative republican party for 2020. Would it win. No but it may get seats in some state houses. We will see thousands going over to the libertarians.

As several people have pointed out the US Two party system was always a coalition of multiple micro parties mistaken for factions. It only retained its position because other parties were blocked from registering and getting on the voter rolls and ballot papers. However the libertarians destroyed that barrier in all states a few years ago.

Trump would win on the second first vote but even that will be disputed by some because a second first vote is a contradiction. Some will say that the resignations on a first vote makes the next vote the second vote with freed delegates. Even Reince Priebus would be battling for order right beside Trump against that idea. It may come down to Cruz taking the microphone as conciliator. That would work but it would also speak much. Remember the thing will be watched by billions this year.

If no resignations occur Trump will be the nominee and the question will turn to the vice president vote. Rule 40 comes into play if they are still on the books.

Here it is in full. Read it carefully.

RULE NO. 40 Nominations (a) In making the nominations for President of the United States and Vice President of the United States and voting thereon, the roll of the states shall be called separately in each case; provided, however, that if there is only one candidate for nomination for Vice President of the United States who has demonstrated the support required by paragraph (b) of this rule, a motion to nominate for such office by acclamation shall be in order and no calling of the roll with respect to such office shall be required. (b) Each candidate for nomination for President of the United States and Vice President of the United States shall demonstrate the support of a majority of the delegates from each of eight (8) or more states, severally, prior to the presentation of the name of that candidate for nomination. Notwithstanding any other provisions of these rules or any rule of the House of Representatives, to demonstrate the support required of this paragraph a certificate evidencing the affirmative written support of the required number of permanently seated delegates from each of the eight (8) or more states shall have been submitted to the secretary of the convention not later than one (1) hour prior to the placing of the names of candidates for nomination pursuant to this rule and the established order of business. (c) The total time of the nominating speech and seconding speeches for any candidate for nomination for President of the United States or Vice President of the United States shall not exceed fifteen (15) minutes. (d) When at the close of a roll call any candidate for nomination for President of the United States or Vice President of the United States has received a majority of the votes entitled to be cast in the convention, the chairman of the convention shall announce the votes for each candidate whose name was presented in accordance with the provisions of paragraph (b) of this rule. Before the convention adjourns sine die, the chairman of the convention shall declare the candidate nominated by the Republican Party for President of the United States and Vice President of the United States. (e) If no candidate shall have received such majority, the chairman of the convention shall direct the roll of the states be called again and shall repeat the calling of the roll until a candidate shall have received a majority of the votes entitled to be cast in the convention.

This means that Cruz is the only Vice President Trump can name on the day. Cruz has been the only person that Trump has ever talked about. Few people can think of an alternative.

This also means that if Trump is to pick any one else he and Cruz must co-operate in the rules committee to get that rule scrapped on day one. This problem would have excluded Carly Fiorina too. Yet Trumps people will see rule 40 as essential to block Kasich or anyone John Boehner likes. Oh what a wonderful corner the party has painted itself into.

It gets Better. The law was designed to block Ron Paul from any post but the Ron Paul delegates got angry and, then got organised and, now have a significant position on the rules committee. As semi libertarians they care about the issues than the party. As mostly tea party people (Paul), Trump and Cruz rules delegates see this as an outsider versus insiders battle. Tea party versus Rino not Trump versus Cruz.

Trump and Cruz have fought hard, very hard. Could too much damage have been done? Possibly but remember Ronald Reagan and George H Bush fought very hard too in 1980. Yet they teamed up. Most don't know that John Adams was the first Vice President and he ran against George Washington not with him. He was what in most other political systems would be called the leader of the opposition in the Vice President post. He hated it!

Would Cruz say no? It will be hard to say either thing. The questions will be: Can I tame this man? Who better to tame a lawless man than a lawyer that topped all his classes.
Will I lose all chances of running later if Trump or Hillary wins and I'm on the side lines?
Would America survive Trump or Hillary and still be intact in 2020?
Or will I be a guaranteed the presidency if Trump gets bored, impeached or just shot?
Would Trump run for a second term? That is highly unlikely.
How much damage to my reputation can I take and can I blame Rule 40b?
If Trump names someone really stupid that will make Ted Cruz's decision for him; 60-80% will demand him citing the rule.

As I said it's not really one factionalised party any more it's three or four jammed into a box called RNC. The same is emerging in the DNC too. The hard left, students and teachers, socialist faction is backing Bernie. While the wall street left, many Muslim lobby groups and a gaggle of aging feminists and LGBT activists are backing Hillary. The age of political fission is upon us.

It will be a hell of a show. Thankfully God is in control. It will be a day of Judgement but will it be judgement on the country or just the party? We shall see.

Trump's Function.

It may not be Donald Trump's intention.
It may have been in the back of some of his staffers minds.
I think It's definitely God's plan.

Herding the sheep to the master. 

The republican party machine and the congress strongly opposed Ted Cruz. A true conservative was not acceptable. It would ruin their little deals, he would shut down pet projects, a factory in every state and district making one part for a tank. Cruz wants to shut down whole government departments because they are unconstitutional and ineffective. That scares the hell out of a republican congressman because if there are fewer departments there won't be as many bills to hide their earmarks in. Remember the left of any right wing party is just there to claw back a fair share of his voters taxes and redirect them away from socialist projects that he thinks is bad. Even Ron Paul did that.

Those that want the country to continue the spending spree hate Ted. The freight train of national bankruptcy is coming and Cruz, and even Trump, knows it. Reform must come. Yet the lobbyists and their pet politicians resist. They make no money from smaller government and simpler rules.

On his own Ted Cruz would have faced massive protests from the left, attacks from the Rino's and resistance from the RNC party machine at every caucus.
With Trump running they are all decoyed away. The left wing mobs organised by George Soros and the black lives matter people are at the Trump rallies shouting and being shouted down. As a result when Ted Cruz showed up in the Bronx this week only two protesters could find him. He had a chat to them.

With Trump running, dozens of terrified non conservative politicians have turned to Cruz. Some gave him the most unenthusiastic endorsements in human history but that was enough to win. I do not think there terror is based on the possibility that Hillary will beat Trump. They fear that Trump will damage Republican candidates running for the house, the senate and governor posts. Their greater fear is that Trump may win and then not know what to do with the oval office. (If Hillary disappears and it is Sanders then the republicans are guaranteed the white house. )

Trump has been getting the vote but in order to win in Cleveland Trump has to actually have people in the party on the ground in the states to allocate his winning delegate slots to. In some congressional districts he has failed that and the party found a bunch of eligible people standing around to fill those slots. Yes they are obligated to vote for Trump in the first one or two votes but they arrived on the Cruz bus. Always pays to carry a spare or two. This is what Trump was calling stealing the delegates. They were not stolen he never provided any delegate candidates in some places.

With Trump in front but not getting more that 30%, all the effort to manipulate the rules to shut Cruz out is rendered impossible. Any attempt to put a third man in will fail. Trump and Cruz have the votes to vote down any rules change to make John Kasich or Paul Ryan the candidate from nowhere. It will be Trump or Cruz not anyone else. The irony is that the rules that now block Kasich, Ryan, or any other candidate from nowhere, were put in place to block Ronald Reagan (successfully on his first two runs), Ross Perot, Pat Buchanan, and 4 years ago Ron Paul.

Early in the campaign I thought that Donald Trump and Ted Cruz were working together to tag team the others in the party that it was president Crumpz run. The question was not whether they would win but which would be the other guys vice president. Trump even named Cruz once using a joke nickname, Justin Bieber, and once directly. Sadly Trumps PAC supporters blew it all away by attacking Heidi Cruz. Yes someone, not actually on Ted Cruz's team but definitely anti-trump, attacked Trumps wife but frankly if you're going to run for President knowing your wife modeled nude someone's mentions it. You have no right to object or get insulted when that happens, it was obvious. Every other time someone mentioned those pictures Trump just bragged about her good looks. He was not wrong.

I do not believe that the National Enquirer attack on Cruz, with a not even convincing story of extramarital affairs, came from Donald Trump's camp. One of Trump's staff is pictured as one of the women. It may be Cruz's biggest mistake to assume it is from a Trump supporter. It is something some left wing would be scandal reporter cooked up to attack all of the republican candidates. It probably sat around on someone's desk since january. It's irrelevant. Anyone voting for Cruz knows it's fake. Anyone thinking it's real never remembers to vote.
Gawker just got sued for billions in damages over another scandal, hidden cameras in someone's bedroom, will get you bankrupting damages. Gawker is effectively propping up the National Enquirer financially. Gawker essentially is the web arm of the scandal mag. If one goes bankrupt they both do. So suddenly the unbelievably fake scandal on the editor's desk became his parting shot. You can't be sued if you're already bankrupt.

However Cruz and his supporters are making two errors of note. They are attributing all attacks on them as coming from Trump's team. I genuinely don't think Trumps team is that well organised. The attacks are coming from people, some of whom are openly democrats, but have a talent for getting Trump social media fans to follow their lead. Trump has a good media team but the one thing they can't do is shut down attacks on Cruz and others that come from outside. It does not help that Trump repeats them sometimes.

The second common mistake common with Cruz supporters (but not Ted himself) and all anti-trump people is to attack the Trump supporters as Trumpkins, Trumlings or just idiots. They are not fools. They are just really desperate and afraid. Most understand the threat of islam, the dangers of the politically correct social framework and the impact of trade on the industries they once worked for. But like almost everyone else they have not been given any solutions. Yes Ted Cruz and others have solutions but they are complex and detailed and based on ideas and premises that have not been taught in schools for three generations.

Trump supporters are not uneducated or less intelligent. They are miseducated and they know it and their angry and scared. They  see the problems but not the solutions. The most surprising thing is that we few who know of these complex and subtle solutions exist at all. Nothing taught in school got us where we are today. Cruz's teachers at harvard law school were all very left wing.

It is now clear that Trump has peaked and will continue getting 30% or less in the next few states. He may get 40-50% in New York but it is closed primary which favors Ted Cruz and it's Winner-take-most which also favors Ted. New York is a big state not just the city. The up state vote (rural New York) will not go the same way as the city vote. Trump may again win Congregational District delegate slots only to have no one available to fill those slots. Enter Cruz's spares again. Running for President does require a little planning.

I Expect Cruz to win on the second vote. I do not expect Trump to explode. He and his people will focus on stopping Kasich or any other candidate from nowhere from being parachuted in. This is actually a democrat party thing; it's never actually worked for a republican I don't think.
Trump will have two more months to come to terms with the fact that they don't have the ground game at the congressional district level. If he does not win the first vote out right he will switch to playing king maker. That role suits him fine, it gives him bragging rights without the workload.
Remember they worked so well together in the early part of the race against the Party favorites. At Cleveland if Trump does not have a clear majority it will turn into an outsiders versus the insiders. A battle between those that know that a recession is coming and government bankruptcy is pending; and those that want to kick the can one more term and hope for a miracle money tree to sprout somewhere on the Washington lawns.

Trump is the decoy candidate for Cruz. A candidate that is popular, enticing but just a little inferior to the other guy. A decoy product is a product that draws people to another product. It entices people away from the rest of the competition but is flawed relative to another product. This makes the choice binary and people put the decoy back on the shelf and buy the best.

As I said while someone in the wood work may have had this in mind only God can engineer such things. We are in a huge multilayered mess it will take a man of faith, law and genius to save the day; or at least mitigate the damage. Ted Cruz is the only candidate available and capable out there.

     

Rail versus the baltic dry index

Wesley Bruce

Gary North a leading Austrian school economist and historian talked about the Baltic dry index tanking.

http://www.garynorth.com/members/14629.cfm It has fallen badly indicating that an economic disaster is happening, we are sliding into a depression.

Note: the BDI is USD hire paid per day for the four bulk cargo classes and it's down to $402. It's a very bad sign. It's not $ per ton. If people stop buying bulk cargo they have stopped producing at at the scale we have seen in the past.

As I write it looks like the stock market has caught on and, on pretty obvious Chinese numbers that everyone should have expected, the stock markets crashed.

It's even worse because the HARPEX index of containerized freight has virtually sailed off the edge of the earth. http://www.harperpetersen.com/harpex/harpexVP.do It's fallen to 363 TEU 1 TEU is based on the volume of a 20-foot-long (6.1 m) intermodal container going by sea per day. A 45 foot container is 2 TEU. Only 14% of all container shipping is included in Harpex but it is representative.

While this is bad it may be a little worse. Neither may fully recover, ever. They may become obsolete indicators.

Rail heads.

My brother is a rail fan, not a train spotter but someone that is into studying the technology of the tracks and someone that is looking where you would or could put new commuter and freight lines. Over Christmas he showed us a dozen youtube videos of the latest track laying systems. (yep my family is that weird) Our grandfather was a railway man. In his day it took 20 - 30 men and several weeks to lay a 100 miles of track. Today it takes half as many men and a quarter the time. Today it's definitely skilled labor not unskilled labor. This caught my eye:

https://youtu.be/nNo53YktOPU

All the heavy lifting is machines and there is a machine for every job.

https://youtu.be/TNaH4IiTdVU

And this one.

https://youtu.be/w_wKYp4ovTo

Its a track renewal system that literally replaces the rails under itself. The train is riding on rails that it itself is carrying off the ground!

Here are the details of how a new track is laid.

https://youtu.be/i6VYuw52z-0

And this one is the biggest track layer in the world, at the moment.

https://youtu.be/XwiNaHmOscU

But this one is already 5 years old.

There are hundreds of these machines. All slightly different. There are only a few hundred needed. Lay a hundred miles of tracks and it's there for decades.

A question occurred to me.

Could the growth of rail impact on shipping and lead to both the Baltic dry index and the HARPEX being reduced by rail competition? Could it start giving wrong numbers eventually over time? There is no equivalent index for global rail tonnage or rail container tonnage. Or at least not one that shows up on google. Everyone uses differing calculations making tonnage comparisons between rail and shipping difficult.

The cold war cut Eurasia in half. With little or no western cargo going through the Soviet Union. While the transiberia railway exists it took most of the Soviet Union's 70 years to finish what the Tzar had started. It also dives far to the north away from China at key locations. Partly to link with river based traffic in Siberia and partly to avoid being cut in a possible Chinese invasion of disputed regions. As soon as the iron curtain fell railway engineers were looking at recycling the steel into railway tracks across the continent from China to Europe. They are succeeding.

There are some huge rail projects out there. China and Europe are now linked by several thousand miles of track through Kazakhstan. https://en.wikipedia.org/wiki/Trans-Asian_Railway

While the UN is the lead organization on such projects the people involved are rail fanatics that have little time for bureaucrats, a hundred Dagny Taggarts (The pretty railway engineer/ Tycoon in Atlas Shrugged).

The rail trip takes half the time, half the crew, is considered safer. The tonnage is small but will rise fast.

There's a slightly older track too https://en.wikipedia.org/wiki/Yuxinou_Railway

Wikipedia has Usage data on it.

From January to November, 2012, a total of 40 freight trains ran on the Yuxinou Railway, transporting 1747 containers with 21,000 tons cargo, and worth of 1.15billion USD. The freight included 3.062 million laptops and 564,000 liquid crystal display screens.

(Note these numbers are from 2012 when the track was laid but not all the infrastructure finished. 21000 tons on an unfinished line!)

The first direct China to Spain freight run arrived December 2014.

http://www.dailymail.co.uk/wires/afp/article-2867482/First-direct-China-Spain-freight-train-arrives-Madrid.html

It's fascinating how the various sites talking about this project never discuss how its funded. It's a mix of Public-Private Partnerships (PPPs), western aid money, international loans and inflated currencies.

http://www.unescap.org/our-work/transport/financing-and-private-sector-participation/about

[From the UN department for vague statements.]

The problem of how to fund a large rail project goes back to well before Ayn Rand's Atlas Shrugged. Ideally it should be private bonds and shares issued by the railways companies paid for by per-tonnage mile fees on the rolling stock. It's likely that the PPPs will be doing this. Technically this makes it no different to every other railway project since the first in the 17th century. Going bankrupt in the process is also a tradition but the rails once built roll on.

Shipping may be cheaper in a world where trade is from one major port to another major port but shipping has three problems.

Often the cargo must be handled several times. Mine or factory to port, port loading, then port to final destination. In many cases once you have it on a truck or train it's easier to turn around and go direct over land. Forget the bottle neck at port and it's hassles, red tape and potential pilfering. When containerization came to Australia our coastal shipping industry just died. Bottlenecks, particularly unionized bottlenecks are bad for business. Only island nations absolutely need to send everything through ports. This is the key behind the Eurasian land bridge idea.

Secondly many see the middle east and the red sea as a potential choke point. A high risk of trade routes being cut by war and piracy. The Somali piracy drove many more people to consider the Eurasian land bridge idea and the trans-Asian railway as an alternative. Note: In some cases this was less about piracy than about American fleets checking shipping for cargo's going to Iran and other dangerous states. An overland route suits some that are prone to get in the US navies sights. Sometimes I think the US navies reasons are good so the rail may pose a long term risk. A nuke on a train is much easier than a nuclear missile or even a nuclear bomb on a boat. A few more neutron detectors near the track will be needed. A Nuke on a container truck trumps all.

Lastly as cell phones open up a million young entrepreneurs in a thousand villages to the wider world of commerce and capitalism, global trade routes will become less about big city to big city and much more about point to point trade in smaller lots. A fish net not a fishing line.

This favor's containers on land routes, and big ships don't do small lots well. Village A in Tajikistan trading it's beef to village B in China. Tajikistan and Kazakhstan has several million head of livestock that never make it to market. Now that there are railheads and spur lines with stock loading facilities (built by Australian and US companies) that massive stock of beef, goat and lamb will reach the world market but very few ports. The geological resources in some parts of central Asia have been barely prospected. There are area's that could rival the US wheat belt undeveloped.

There are however changes in containerization too. Normally bulk cargo is raw materials and containerized cargo is finished goods. When modern inter-modal containerization was first invented by Malcom McLean it was envisioned as moving bulk cargo as well but loading bulk cargo onto normal containers was tricky. Special top hatch equipped hopper containers never filled fully, were hard to clean and were a death trap to anyone in side if miss handled.

https://en.wikipedia.org/wiki/Malcom_McLean

However it can now be done thanks to two innovations: Container Liner bags from various companies and a New Zealand company, Ward that came up with several container loaders.

Here is one in action. https://youtu.be/4K7Uz-8TYac

These load and unload containers by standing them on end or tipping them carefully up at an angle.

https://a-ward.com/ There machines are a masterpiece of steel and hydrolics. They are selling very well around the world. Here is the unloader. https://youtu.be/5X2Jd54oM3w There are more videos on the site. Check out the horizontal loader. It works like a giant hypodermic full of junk.

New Zealand is a small country so small lots matter. Getting a boatload of sugar delivered to their chocolate factory makes no sense. As the world develops and decentralizes there will be more small countries.

As this technology rolls out more widely more bulk raw materials will be moving by container confusing anyone using the Baltic dry index and the HARPEX. This technology allows raw materials to go out and finished goods to come in, or vise verse with the one container. No more shipping empty containers halfway around the world passing an empty bulk freighter going the other way. It completes containerization. It also suits the future village to village decentralization of global trade. It will take decades to become significant and there is a need to simplify and automate the installation of container liners.

Equivalent global rail index needed.

The Baltic dry index and the Harpex are both only shipping. There is no equivalent global rail index yet. There are national indexes. This is the USA.

https://www.aar.org/data-center/rail-traffic-data

The drop after Christmas is normal and the precipitous drop in the shipping indexes are not matched on the monthly index of US rail traffic. It's too early to see last years results but spot the GFC on the Annual table, you can but it's not as sharp a drop. Rail is cheap, in a crash cheap wins. This will not diminish the bust Gary North is talking about in the top link. It does not invalidate his point. I'm talking longer term.

Russia.

Many of these routes run through Russia. While there are problems political problems between the west and Russia that should pass. Russia will not close these trade routes once they are created. It's an income source and a matter of prestige. There is also a southern route being built through the stans and Iran, Turkey, to Europe. Even major wars do not stop or destroy railways for long. After WW2 the railways were rebuilt within months and at Hiroshima it took only days. The Soviet Union did not stop rail trade it simply botched the process of building the network at all and would have confiscated capitalist cargo's. Outside the Crimea that won't be a problem. Putin is an old cold warrior but not a communist. Neither he nor his rivals in Washington will be there long. I'm looking in terms of decades not years.

The global big build.

Down in Africa there are plans for big networks linking the landlocked countries and crossing the continent in two places. Mozambique to Namibia via South Africa (already exists but needs upgrading); Tanzania to Zambia (and via Zimbabwe to South Africa and Namibia). South Sudan to Cameroon via the Central African Republic. https://en.wikipedia.org/wiki/TransAfricaRail The intention is to match in Eurasia and Africa and South America the success of the US Transcontinental railroad of a century ago. Most are nearing completion.

Some might think that differing gauges might be a problem but that being solved in several ways. Containers are themselves a solution to that problem and in the earliest case a product of the different gauge problem.

Regauging. The Belorussians at the border with Poland jack the carriages up off the bogies. Roll out the bogies and roll in a new set. The track section has both gauges. This involved a lot of men undoing bolts but robots are being deployed and the bolts replaced with container like interlocks. The passenger never need to leave their carnage and some sleep though the process.

https://youtu.be/H-Tr_pamIHY at 3.40. There are several regauging stations around the world. This is a relatively old solution.

However the Talgo system from Spain looks like it will superseded most alternatives. The wheels themselves can be locked into different positions laterally for different gauges.

https://en.wikipedia.org/wiki/Talgo and https://youtu.be/U_LFIUkcPNM

Trains using this system now regularly traverse Europe with with its gauge differences between Spain and France/ Germany. It's being tested in Russia. The mechanism was invented when I was 9. 1969 but we had to wait for advances in metallurgy to make it commonly accepted.

https://youtu.be/qwNl-g_91GE This is every bit as cool as 3D printing.

There is also a Polish competitor with another spring loaded system. https://youtu.be/-pHExOfYkYg

If you know Polish this is a good review of the current regauging technology and related systems.

However the simplest and cheapest solution for older smaller lengths of track is to put a track renewal unit down the track changing it to the commoner gauge. Differing gauges were not an accident often it was to stop rail based armies rolling into your country a long your railways. If the had to stop and change train then you had time and opportunity to set up defenses or bomb the hell out of the rail border crossing. It worked well for the Russians and was a reason why the Nazis left Spain alone.

Conclusion

In simple terms China and Europe are now linked via rail with a capacity exceeding 3 freight trains per week and rising to 21 soon and at half the cost of shipping and equivalent volumes. There are more routes with new or renewed tracks are being laid. The cold wars geography drove shipping but that's over. There are rail links being forged across Eurasia. North south, east and west. As well as China, India, mainland southeast Asia, the middle east are all being inter linked to Europe and even Africa.

This will compete with shipping where it essentially circumnavigates a continent. As a result when the world economy recovers or reforms itself after this next depression. Shipping may lag as an indicator.

I have included a lot of youtube links. A picture is worth a thousand words, a video much much more but you don't need to watch them all the way through unless you have time and find it cool like me. This long but hopefully comprehensive and covers all the variables and caveats.