Friday, March 18, 2005 06:10 A PST
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Pakistan's new Missile
Want a missile to carry
convention or nuclear warheads 1,200 miles or more? Call Pakistan:
DETAILS. Again, we quietly wonder why the Bush administration is not
all hot and bothered about this latest arms escalation along the
Pakistan-India border, a place where there has been shooting in recent
days over Kashmir.
LINK Apparently, we're not the only ones wondering what the US
position is: Some leaders in India are asking the same thing:
DETAILS But hey! Who needs to worry about Pakistan when Iran
is where the oil is?
Oil Wars and Per Capita Income
Related to the administration's coming decision over what to do about Iran (bomb for "freedom") I happened across an interesting slide in a presentation by oil industry expert and financier Matthew Simmons. I don't think his company would mind my pointing out this rather remarkable data. SOURCE:
In a presentation to the Austin Society of Financial Analysts last month, Simmons presented data showing that the per capita income in a large number of (Islamic) oil producing countries has been in a serious decline relative to where things were in the 1980's. For instance, in Iran, as measured in 1982 dollars, per capital income has dropped between 1982 and 2002 from $2,922 to $1,210.
The "westernization" of Mohamar Quadafi of Libya may have been more a function of his declining authority to rule, as Libya's per capita income went from $9,493 in 1982 to $2,675 in 1982 dollars by 2002. One might argue that the reason for the invasion of Iraq by the U.S. may have been because Saddam Hussein didn't capitulate despite his country's decline in per capital income from $2,606 in 1982 to $809 in 2002 measured by constant '82 dollars.
If you look at Simmons' figures on page 29 of his presentation, it appears that there may be a relationship between declining per capital incomes (a result of unsustainably low oil pricing in the mid 1990's) and the desire to reassert western corporate colonialism while certain countries are, how shall I say this, available quite inexpensively.
As long as I was looking at Simmons' numbers, where I noted that Iraq was down to $809 in annual per capita in annual income in 1982 dollars, and $1,078 in 2002 dollars, I thought it would be interesting to plug in what the cost of the war has been to dare ($250,000,000,000) and see how much that pencils out to if we just wrote a check to every man, woman and child in Iraq and said "Organize elections, put in a real democratic government, and we will write you a check for....." It works out to $9,852.33 or so per person. Nine years of annual income per person - everyone would have gobbled it up - we would have been humanitarians, and we wouldn't have lost 4,000 of our sons and daughters in and out of the war theater.
Plus, it saves for other used (like energy research) the billions which will be needed to clean up the depleted uranium used, and for the rebuilding the cities and infrastructure which we bombed.
So why didn't we do that? Simple: The $250-billion has pretty much created the "economic recovery" and it has lowered the unemployment rate by 1 or 2-tenthss of a percent. War isn't just about ideals. It's more honestly about economics and politics. Which is why I'm not in office...
In our constant quest for readership, I was looking at yesterday's statistics and noticed that 14,000 people have read this page. Not bad. However, there is still bandwidth for more - so if you find what you read here of interest, please CLICK HERE to send this page address to several of your friends. As for other matters...
Import Price Shock - 9.2% Annual Rate
The prices of imported goods was up 0.8% (9.16% annualized) in February according to numbers out from the Bureau of Labor Statistics today. Worse - Petroleum imports are up nearly 30% compared with year ago levels.
The happy talk will be that export prices were up 0.7% but while that looks good, remember that the amount we sell is far less than what we buy...
More for your dining and dancing pleasure at http://www.bls.gov/news.release/ximpim.nr0.htm This would explain the slap down on gold the past few sessions - we expect the consumer sentiment number will be shaded upward to help offset this. Otherwise, a break below 10,600 might ensue. This brings us to the guts of...
Every once in a while on Friday morning prior to the open, I get up and I look at a few numbers and try to figure out which way the market will go on Friday - barring any news items that would shake the market to its core. Today, judging by how the price of gold has been hammered back to almost $435, I have to expect the market will rally substantially before really bad news arrives in the next week or so, although perhaps sooner.
One reason to rally is that last week, the market closed around 10,774. This morning, the Dow will open
- perhaps with a gap higher open - from yesterday's close around 10,626. This would keep the week's action from looking like an out-and-out rout.
At the same time, it looks like the public has been wading back into the market according to our program trading charts. Let me explain (in case you haven't been paying close attention) how this chart works.
Each Thursday, the NYSE posts what is called program trading volume statistics. These are the trades of the "big boys" - the ones where 15 or more securities and more than $1-million worth of equity changes hands at once. As you can see in my handy dandy chart, the public (e.g. non-program) trading volume has been in a slow-motion decline since its peak in July of 2002:
Despite the hue and cry about one thing or another in news headlines (and I mean the fundamental stuff like whether we blockage Iran's oil islands, not the Michael Jackson case) you can see that the public participation in the market seems to be ready to break out of its long term (nearly three year) decline.
If you want to work out the numbers yourself, you simply find a source of the weekly Dow close and the trading volume. You then go to the NYSE site and download their data library of program trading statistics LINK. You set up your spreadsheet to solve public volume (100 minus the % of program trading gives you "public volume percent") and you multiply your "public volume percent" times the week's total volume, and graph the results over time. The little red line is my moving average line (feel free to make and test your own moving averages) because you'll see that when the public trading volume hits certain conditions, moves to the upside or the downside are at least apparent. I have found it's a useful tool when figuring out the "house odds" that will impact specific option plays...back when I was trading seriously (nearly a million a year in contract values).
Needless to say, I am not doing that any more because either the markets are being manipulated, or what seemed like common sense "cause and effect" has been suspended in this part of the Universe that we're traveling through. Nevertheless, the chart puts into view some trends.
What I said a couple of weeks ago still holds - although I don't trust politicians unless I have the largest checkbook, my mild optimism is intact because it looks like the public is staying invested - and that being the case, one could expect that any large-scale transfer of shares from strong hands (institutions) to weak (regular folk investors) would not begin until the latter stage of the public getting really waded in to the market.
Which brings us to the Friday problem - and may explain why gold is being hammered so hard. Despite the news on the inflation front (bad, in light of oil about doubling in price compared with a year ago and the obvious inflationary implications of that) the market faces an uphill fight.
In 1999, public participation in the market (measured by nonprogram share volume) peaked the week of March 8th. The peak was exceeded on April 12th. In 2000, public volume peaked the week of March 13th, and didn't come back to those levels until January of 2001.
In 2001, there was a nice peak the week of March 19th which wasn't exceeded until the weeks following 9/11.
By the way, the 9/11 case was especially interesting because it was public investment - not institutional volume that led the return to the markets. The investment professionals were a lot less patriotic when it came to buying stocks at that juncture: Program trading was under 30% of market handle until late November of that year. The pro's are a mighty conservative group, it seems.
In March 2002, the peak public volume came the week of 3.4. It wasn't exceeded until July - the all-time high in my date range (>1998) for this little study). 2003's peak came the week of March 17th. The "March Peak" of public participation in 2004 (8,709,800 shares) came the week of March 8th.
This is not offered as trading advice - in order to be really useful, one would need to know the prices paid by program traders versus common folks. But it sums up the problem for the markets at what is an interesting juncture - will the public participation have peaked when we get the week of 3/14 program trading volume stats next week? Again, we're forced into the position of rearview economics unless you have the time for daily program trading analysis...
In what some are characterizing as a slap at the White House, republicans have passed a spending bill which doesn't make the kind of deep cuts wanted by the administration STORY. This means that the fate of tax cuts will be up for questioning at some point - as the public is somewhat wizened about "free lunch" politicians.
Irreversible Climate Change
We've been telling you for a long time that humans are only part of the problem - and today there's a report out saying that even is humans stopped emitting greenhouse gases, global warming is on a trajectory of its own and oceans rising and other side effects are now unstoppable: STORY.
The CIA is busily fending off reports that they fly foreign nationals to countries which practice torture and have them tortured there out of the public view. The CIA says "we don't torture people" LINK. On the other hand, we know from how Bill Clinton narrowly interpreted questions that when someone says "I don't torture people" it doesn't mean the same thing as "are you aware of" and that's likely the semantics game going on here. Sort of like hiring out a gardener and then saying you don't do yard work.
Oil to >$57
The markets are behaving in a very strange way prior to the open today, as it looks like there is a full-fledged attack on gold to try and push it down, perhaps in an effort to bolster the sagging U.S. dollar. Whatever the specific mechanics of the gang that couldn't deal straight, our outlook for the market today is for a pathetic bounce at the open, which will give the powers that be a chance to load up more on the short side for later in the session. OIL's move - along with what we expect will be a "fake out" rally in the dollar - are driving all kinds of events. The two or three biggest are the reduction in bond ratings for GM's debt, a move which slapped down the common to $29.01 yesterday. In the preopen, GM is looking flat, but who know how much dash has been levered in to keep it afloat.
Overall, lacking a large-scale and pervasive recession that verges on global depression, the immediate future looks highly inflationary to us - good news if you have bought into the housing bubble, good news if you own gold, but bad news if you had been planning to hold cash for any period of time.
By the way, if you're a businessman or investor and you're carrying a tax loss carry forward on your personal income tax (as many day traders are, who didn't see the top in 2000) you might want to pencil out how your tax loss carry forward is being stolen by the pernicious effects of inflation. With the kind of inflation we expect, the $3,000 annual limit's real effect will be diminished by 20-30% in a matter of years - long before some of us run out of T/L C/F. We've got three years left of C/F thanks to the PPT.
Another dishonest point about inflation: When you sell a home at an inflated price, you pay a capital gain based on the delta between purchase price and sales price (less improvements etc). The hosing comes from the fact that the dollars you get when you sell wont buy as much gas, as much food, or as much of anything else as they would have at the start of the ownership period. Thus, in our view, Congress is being complicit with banksters in running a crooked game where there's no inflation adjustment to compensate investors for the declining value of money involved in long term gains. But, let's not get the people's economist started on that, shall we?
Drought and Food
We notice that farmers in India are worrying more than ever about the DROUGHT which continues. Not getting as much play in the press are the problems of drought and starvation in Africa where the UN is setting up relief programs: LINK.
Here in the U.S., the problems facing the Northwest are being compared with the Dust Bowl years of the last Great Depression: STORY.
More on Wolfowitz
Despite our front page EDITORIAL about the President nomination of chief war-monger Paul Wolfowitz being pimped for the World Bank position, we're trying to keep an open mind. Thus, we'd encourage you to read the less hysterical COVERAGE or THIS. of the neocons moving into banking and decide for yourself if it would be a good thing or bad. You know our position: Leaders don't desert their troops in the middle of battle.
What's a Defensive Nuke?
We find ourselves asking has the world gone crazier just overnight? Russia today is peddling the idea that North Korea will be building "defensive nuclear weapons." STORY. help me out here: I thought a defensive weapon was one that could be use at the borders of, or inside a country being defended. So does NK plan to keep its nukes on the border and not drive them south? Defensive nukes is like military intelligence - an oxymoron. Sorta like trying to say an ICBM is a "defensive weapon." Yeah right...
Interesting take on who else might be buying U.S. bonds (besides us through the back door) LINK.
A Serious Rumor
We have an unsubstantiated report from some of our usually highly reliable sources that there are some posts surfacing on financial web sites in Europe that are wondering aloud whether the U.S. government has now set up a new mechanism to in effect buy our own bonds. According to the report, the way the process works is this: The US fronts a big pile of money to a cooperating bank (most recently, alleges one post, a Caribbean bank) about a week before the US bond auction. Then, along comes the auction, and the US funds are used to buy up the US debt.
While we don't have any confirmation of the report, it's the kind of assertion that could cause immediate - and serious - repercussions should it start making the rounds in the more mainstream financial media.
Obviously, it would be like a Ponzi scheme, when Ponzi in addition to running the pyramid, would be printing up money to give to potential investors. Our concern is, that if true, it could be viewed as a major reason for the "powers that be" to quickly invent a massivee public "emergency" in order to blame shift and hide what is in effect a financial circular reference in the money markets. Thus, we are on high alert now for a major "event" out of left field because such a ploy - again IF TRUE - would be an unsustainable end game. Ergo, the demand is quickly rising for a "blame shifting" event. Watch the headlines.
Now that President Bush has nominated Paul Wolfowitz to head up the World Bank, I urge you to put aside partisan politics and vote to defeat Wolfowitz's nomination. As you may recall, Wolfowitz is one of the fellows who championed going into Iraq, a country (without WMD's) which in case you have forgotten among your lobbyist visits, is where American soldiers are still dying almost every day. The American people deserve a clean conclusion to the war and letting Wolfowitz "skate" off to a new position before his present task is complete, does not in our view represent the best interests of the American people, nor our brave men and women in the field. Don't move him "up and out" if he can't get Iraq right: Just out would be fine.
Balance of Trade Disaster Continues
The "headline" is that the balance of trade his -$665.9 billion in 2004 - close enough to -$666 billion to make the Biblically inclined pause briefly.
More of this dismal stuff at http://www.bea.gov/bea/newsrel/transnewsrelease.htm for the strong of heart.
Ahead: Nonlinear Markets
A couple of data points about what drives markets into the pending area of extreme nonlinearity: First, we have reports that credit DERIVATIVES are swelling up debt at incredible rates. What's a credit derivative? Well, picture taking piles of consumer debt (mortgages and big ticket items) and then writing options back and forth on the underlying...
For a more practical example of nonlinearity, we'll be watching GM today. Wink, wink, nod, nod. It was down ,almost 10% in the pre-open - and there's an old saying around the street, as goes GM, so goes the Dow.
UCLA-Anderson: Recession Coming?
Folks like us, Lammert, and others think the brown smelly stuff will hit the fan before 2006, but here's something to be aware of if you're an ultra cautious board room denizen: The UCLA Anderson Forecast is talking cautiously about the possibility of a recession in 2006: STORY. Our own best guess, putting snips of web bot outputs together is something like a good sized speed bump in April, with even bigger big ugliness coming in December of this year.
Between now and those events, just a meandering directionless market, as Sir Alan and company try to pimp personal investment in the casino of Wall Street as an alternative to 4% of the government's Social Security noose. That and some verbal sparring with Hillary Clinton occurred on the hill yesterday. DETAILS. If we were ringside, I think we would have given the round to Hillary, as much as it grates on our sensibilities to do so. Seems that even Hil has more econ sense that the world's most overblown financial deity. What does that tell you?
All the hype that preceded the OPEC meetings was just what we were anticipating: A formal adoption of a higher ceiling - by another half a million barrels per day of oil production. Now, the joke: OPEC is already running at their highest possible rates and we notice this morning as we burn phosphors that gold is up $2 an ounce, having seen through the smoke, mirrors, and hyperbole. Coincidentally, our sources are starting to talk about independent trucker actions again. We think the BBC coverage got it right when they reported: "But Opec member states are already pumping above the new daily output ceiling of 27.5 million barrels, so the move may have only a limited impact. " Duh...
No joking matter is the speculation that the U.S. may try to orchestrate a showdown with Iran which would focus on naval issues, including a possible blockade of Iran's offshore oil islands: STORY. The idea seems to be that by keeping Iran from meeting oil commitments to China, they will back off their nuclear development plans.
Now, to anyone with a clear head, and there are damn few around, it won't ever play out that way because China has the equivalent of several hundred megatons of firepower that the rumor-mongers don't understand. All China has to do is retaliate against any aggressive U.S. move by dropping their support of the dollar and we're back into a Depression as the dollar goes Weimar and anything you need for living - food, toilet paper and all forms of energy - doubles in price overnight. Again, we think our investments in food are a very interesting play. After all, we can't go to the vault in Dallas and munch on Maple Leafs, right?
One other thing to watch closely is how the US is HAMMERING the Russians for selling military hardware to Venezuela. You know the new U.S. policy: "If you have oil, we have guns..." Not that it's bad, but for Heaven's sake, let's at least be honest about it, shall we?
A heads up reader on a farm on the East Coast writes:
Well, it's like I said: If the neocon cowboys screw up, China has us by the economic throat. What's Wal-Mart going to sell if China stops "playing nicely with others?"
The scare about the possibility of anthrax at the Pentagon turns out to have been much to do about nothing: STORY. nevertheless, it has the effect of keeping terrorism activity focused in the public mind. Or, was that the whole point? Wed notice the event happened in close proximity to the NY Times report on possible terrorist PLOTS and what they might do to the country.
The Russians are sending a scientific team to size up what6 are now three volcanoes popping of on their Kamchatka Peninsula: DETAILS. Meantime, we expect something will pop in the next day or two from the UW scientific research ship off the Washington coast, looking at the area where 4,000+ earthquakes have occurred in recent weeks.
Follow Up Department
On our story yesterday about the specter of running out of food, or at least seeing massive price inflation, I received a note from a knowledgeable person in agriculture who says...
Let me repeat my points from yesterdays REPORT so there's no mistaking my position: I agree that there is no food shortage right now, or this five minutes. What I am speculating on as an investment is that the price of a bushel of hard white wheat, or rolled oats, will be much higher in a year's time should we wish or need to eat it them. Remember, the price of grain only needs to go up 5% or so to beat what will be the "official" government inflation figures. Of course, we both know (wink, wink, nod, nod) that the real rate of inflation may be two to three times what the government will report. The reason for that has everything to do with people who are retired and union COLA's and so forth...
Something else to be considered while you're weighing out how nuts we might be for laying in more food supplies: Southeast Asia is in a terrible DROUGHT which will undoubtedly increase their demand for grain and other food imports. And, repeat after me, that will drive prices which way? You are quite welcome to connect the dots some other way, but that's how we have voted with our meager funds.
War With Mexico in April?
The www.minutemanproject.com site reports that 956 people have volunteered to help watch the Mexican border starting April 1st. The group is properly concerned that there are places on the border where Border Patrol drives an hour to get to certain locations, then drives an hour back, leaving 6-hours or less on some stretches of the border.
As for the drug gang that has reportedly put a bounty on the ears of the volunteers, the US government so far this week has arrested 103 members of MS-13 (Mara Salvatrucha) the S.A. gang that is very commerce oriented and doesn't want the border plugged because it would slow their drug trade. While we expect more arrests, the U.S. busts won't stop the MS-13 followers on the Mexican side of the border, not will it do anything about the militant Mexican plans for the "reconquista" of the American southwest.
I received an email yesterday which prompted me to spend another $400 on storage food for the ranch. It came in two parts and it was from a wheat and barley farmer in Washington State who I won't identify by name, but I don't think he would have any problem with me sharing his viewpoint with you.
About now, you may be asking, "What is R.O.O.F.?" My shorthand for running out of food. We try to run far enough ahead of the curve around here so that what we do can not be inferred as "panic buying." Instead, we have a program of periodically investing in long term food storage items that we will be able to eat sometime either side of retirement. Our latest order is for organic white and red hard wheat, some white sugar (needed for baking, not pastries), long term storable yeast, baking powder and rolled oats.
Having eliminated debt, we've been planning what makes a good investment in our future. Food storage makes sense. Consider the impacts on our friend the Washington farmer of having no water and having exorbitantly priced fuel to run the farm. Even without a degree in economics, you might guess that higher food prices are to come. This is precisely the kind of thing that led us to forecast a real life 13% inflation rate *(or higher) for 2005. I don't know if you have been shopping recently, but our view is that the forecast will be "right on" before we get through the year.
Consider, too, that food prices are going up all over the world. Here's a sampling and some annual rates of increase for you to consider:
The reality of higher food prices is not being felt globally at this time - and to be sure, the Bush Administration seems intent to keep cutting back programs that have tended to keep our food prices low. A 5% reduction in subsidies and a $250,000 cap on supports is coming. LINK.
Baring a late season weather miracle, snowpack in the Pacific Northwest is running at around 4% of normal. Already, the Columbia River, source of both hydro power and irrigation water is far below normal levels. This means in all likelihood there were very little - if any - northwest power to sell to hungry southwest states including California. There will also be a shortage of water for agriculture.
We're not making any specific predictions of coming food shortages here. What we are doing is, in effect, tithing a few percent to the family larder for future use. If we see a big economic recession arrive such that millions of additional jobs disappear, we will have a little something to eat stashed away. In the event inflation this year pops to our 13% (or higher) rate, investing in food is something that just about anyone can do. It could be that such an investment now might mean something to munch on should gasoline shortages develop this summer either due to power outages, or due to price having the same impacts as formal rationing.
We don't see the world as going the ROOF route just yet, but when everyone sees it, prices will be well into the nonlinear area. For right now, we're buying rolled oats for around $25 a 6-gallon pail, and the wheats for under $35 (each is about 50 pounds worth). There are lots of good vendors out there; we just happen to use www.beprepared.com (800-999-1863, Scotty), but there's a good selection available on the net.
While it's not anywhere near going out to Ruth's Chris, we've got enough for a minimal 2,200 calorie per day diet for a year or so. As fuel prices escalate, we expect the return on investment to do nothing but improve.
Oh yeah - Did I mention that global warming has exposed the summit of Mt. Kilimanjaro for the first time in 11,000 years, 15-years ahead of the expected date? STORY This kind of climate change will also being massive food production shifts (and droughts) to Africa. And that means wars...mass migrations of people looking for food, etc.
My friend the Gold Trader who dabbles in commodities, too, said in a call this morning. "George, you're all wet - there's no grain shortage - conditions this year are great." I suggested that I maybe better add a footnote to clarify my point.
It goes like this: My Washington farmer is short of water - this means the Columbia river dams will run at reduced rates this year. Read: Severe reductions of power to California. Refineries, agriculture, business on the West Coast by June might see rolling power shortages if my read of the severity of the lack of snowpack shortfall is correct.
That's the point - I'm making a bet that I can get grain delivered to the ranch for possible future use today at prices that won't be reachable this summer, or at best, a year from now. I may be wrong, but as we did when gold was at $265, and when propane was at $1.72, and off-road diesel was at $1.35, we are putting our money on the table. I think storage food at today's prices a year from now is a pretty good bet - and remember that no matter what we get something to eat in the deal - and in the event I'm really right about inflation, fuel supplies, and the threats to the economy, it will make most other investments pale in comparison. Unlike close in options, the shelf life of this is 10-years plus, too.
OPEC at Limits
As we mentioned in yesterday's report, the folks at OPEC are producing as fast as they7 can - and still oil prices continue at near-record levels: DETAILS. Again, follow the price increases through the supply chain and figure out what items will go up. Answer: plastics, food, gasoline, anything moved around by trains, planes, and trucks. And what will go down. Answer: Your standard of living. The impact of the backside of Peak Oil is a gradual decline of prosperity. Happy talk about cold fusion and abiotic oil may be fine, but in the first case it's not here yet, and in the latter case, we continue consuming more oil than abiotic processes could ever produce in our consumption lifetimes.
Russia the Arms Dealer
There are two stories popping out of the Russia press today which might cause you a raised eyebrow. The first STORY involves the Russians selling anti-aircraft missile technology to Syria. The second STORY involves Belarus refusing to dismantle its nuclear missile launch capabilities. Couple a few other facts in here (Russia building up an airbase in one of the 'Stans, and selling Iran nuke technology and fuel) and one pictures Russia either profiteering from tensions in the Middle East, or directly stoking up the flames of conflict. Either way, the honesty of detente again becomes suspect. Especially when you see how some Russian interests have crossed some of the European central banker families that wanted to own Russia's new industrial infrastructure and natural resources. It's a path of logic not often covered by the me-too press in the U.S.
Bots on Fake News
I won't go into the January web bot run's forecast about a "press rebellion" but we're clearly seeing it develop in the recent disclosures about how Bush Administration "pr footage" and "reports" were funneled into lazy (greedy?) corporate news outfits feeding the US public. STORY. The reaction to this will be slow in building, but a backlash to the spoon fed press seems to be building as forecast. We also note that long time Bush advisor Karen Hughes is going to work for Condi Rice at State. DETAILS. The State Department has taken the attitude that rules on spoon feeding press stories doesn't apply to them.
Tear Down America's Borders?
Not one of our agenda items, but surprise, surprise, here's a group that thinks rethinking borders would be just the ticket: STORY. Wucking funderful. You read who was behind this, right? CFR... And just when troops are out of the country. While the governor of Montana wants his national Guard troops brought home STORY We don't see such common sense thinking from the governors of Texas, Arizona, new Mexico, or California where the borders like like a sieve.
Congress of Spendthrifts
We can help but point out the report today that members ofr Congress can't seem to keep their credit card spending reined in: DETAILS. Say, you don't think being irresponsible on deficit spend and how they spend with personal credit cards would be coincident indicators of something, do you? naw...
Meteors & Quakes Linked?
Is there trouble ahead for Portland, Oregon, like a surprise eruption of Mt. Hood, a big quake blocking the Columbia River, or something like that? Normally, this might seem like wild-eyed speculation, but let's consider a few data points along the way, shall we?
All of this wouldn't amount to a hill of beans except that the first tidbit out from the current web bot includes imagery which almost sounds like a replay of the events in the December tsunami area, but filtering suggests that this time the image is linked to somewhere in the Pacific Northwest, but that's not certain. Still, there's enough percolating in the preconscious area of human communication, as captured by the technology of www.halfpasthuman.com, that we spent some time rereading the history of the Columbia River Gorge area: HISTORY. It's something to think about, but the other possibility is that Mount Endeavor pops up out of the Pacific Ocean west of Cape Flattery and sends a monster wave down the Strait of Juan de Fuca toward Seattle and Vancouver. That's if anything happens at all...
However, when we read stories like the Vietnam train derailment which killed more than a dozen over the weekend DETAILS we wonder if that's not more "earth movement" evidencing itself in non-obvious ways.
China's Power Outage to Come?
One other item from the previous bot runs was mention of a wide scale power outage expected to cripple parts of northern and central China. While it hasn't happened yet, the Chinese press is reporting that pressure on their electrical infrastructure is building: STORY. We expect that when the event arrives is will be something akin to the Northwest Power Outage in 2003 which the bots correctly forecast.
China may not be able to sustain its economic growth model, but one thing it can do is whip up fears that they will invade Taiwan in order to keep the island national once of its satellites. Not only that, but China is marching out the BIG headlines for countries that support its stand. EXAMPLE. .
Iran Strike Coming
The Times of London is reporting that Israel has put together a blitzkrieg like plan to end Iran's nuclear development program. STORY. We see this as an extremely volatile situation that could place the U.S. and Russia back on a cold war footing. The neocons who haven't been able to extract us from the Arab-language version of Vietnam, are now intent on making sure that Iran doesn't evolve nuclear sovereignty, although when Pakistan did the same thing, it was fine. Oh, but they don't have OIL of course.
We haven't gone over the books lately, but we expect that Israel's economy would melt down into a worthless pile of debt without their huge military spending...and of course, peace would add another two of three tenths of a percent to the US unemployment rate if all our troops were home - and that might even free up forces to close off the border with Mexico which are leaking illegals and drugs at unprecedented rates. But there's the Texas saying, "all hat, no cattle." Permanent war for permanent growth, anyone?
OPEC - No Faster Pumping Possible
An OPEC official said something quite shocking this weekend, which is not getting the play it deserves in the Western press. He said that even if OPEC had a mind to pump more oil, it would not be able to because everything is already running flat out. Meantime, there's a report that Indonesia's oil output fell last month to under 1-million barrels per day DETAILS. All of which should have you quaking at the gas pump, but the public impacts may not be visible for a couple of weeks. This is just one reason we expect the market's bounce this week to be numbered in hours, not weeks.
In the preopen, there was talk about oil prices being held in check with a Saudi call for increased production, but that isn't going to happen, as other sources report that everyone is running flat out. Nevertheless, look for the...
Market to Bounce
At least early today, the market should put on a short-lived spectacular open - STORY. But, we expect that by the end of the week things will be down again. If you even think there's a chance for a happy-ever-after ending, go read this STORY about the growing fears that the credit bubble will implode on its own weight.
US the Terrorists?
What's leaking out of Europe
are reports that the CIA has been snatching terror suspects in
foreign countries and taking them to countries which practice
torture to "interrogate" them.
LINK We have to note
that should this kind of operation (rendition) be as reported, it could
make the Arab world's fears that the US is itself a terrorist nation
News from Elliott Wave International
Write when you get rich,
George Ure, The People's Economist
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