Updated:  Friday   January 16, 2004              "News with a twist of money..."

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A Personal Note

All those stories about jobjackings and layoffs became very real for me this past week when the new COO of the software company I'm with informed me that my position would be phased out at the end of the year.  One sort of expects regime change when COO's change, and this time I'm part of the change.  So, if you know of any job openings where an MBA with a great sales track record of both tangibles and intangibles, a prolific writer, and expert in turnarounds is needed, please let me know by clicking here.  I'll be pleased to share my resume.  Thanks!

What's Up with Gold?

More than a few readers are no doubt asking "What's up with the gold price dropping?" OK, so gold took it on the chin yesterday, but like a motivated boxer, it's not down for the count - it's just tiring its opponent. Most of the answer is found by simply observing the calendar: Yesterday and today are options days and a lot of the commercial shorts needed a good hit to minimize their losses. And that, we think, is precisely what has happened. We look for a full recovery in a few weeks, although even a test of $400 support is not worrisome.

One factor in our confidence is the continued problems of foreign exchange (forex) for the US dollar. The dollar has just hit a three-year low against the Japanese yen http://ap.tbo.com/ap/breaking/MGAPRHX7IPD.html and we're seeing selective weakness in Europe as the effects of the weaker dollar and stronger Euro are being felt: http://www.eupolitix.com/EN/News/200401/d4bed5cb-2d98-4c3c-905a-09ff3a4252a8.htm.

The bottom line is that big NY firms are still calling for $470 gold later this year, and if their predictions are right, that'd be a 15% no brainer gainer. So unless your idea of sweet profits is something like Bonn bons, we continue to look at the present price action as base building and normal trading action.

No Kerry, Thanks

We've been sitting artound our motel room sorting out what mnight happen next, now that our house has burned out: Everything from buying a replacement, rebuilding on the site ourselves, all kinds of things like this are going through our minds. We should find out early next week. What all this time has done is give us the opportunity to assess TV coverage of the election. We noted yesterday that fellow Skull & Bones frats Bush and Kerry would be a joke. Cut from the same cloth at the same school, it's the same policies and insiders.

What's interesting, though, is to read up on how Bush's immigration amnesty plan is backfiring at the campaign funding raising end of things: http://www.washtimes.com/national/20040115-112519-2334r.htm We noticed a cartoon depicting Bush as granting amnesty and immediately registering new "legals" and didn't see anything particularly funny about it...

South Korean Gamblegate

Interesting case of gambling via North Korea going on in S. Korea: http://ap.tbo.com/ap/breaking/MGABVXS1IPD.html

DDSS

Different day, same stuff out of Iraq: The people there don't like our plan for their freedom: http://news.bbc.co.uk/1/hi/world/middle_east/3401559.stm

SEC Whimps

If you think the Securities and Exchange Commission has been coopted, sold out, or excessively influenced because most of its honchos are appointed from insider ranks, you're not alone. In fact, a bunch of states are planning action on behalf of screwed-over pension funds because the SEC's track record pales compared to what NY AG Spitzer has done. Just think what a real enforcement group would do... http://www.nypost.com/business/15364.htm

Where we do see a company getting monitored or slapped, as in the case of Microsoft's antitrust case, we notice that it's Attorneys General, not the SEC which is on top of things: http://www.nypost.com/business/15365.htm

GE Wins

GE earnings are out today and their better than most. http://www.theglobeandmail.com/servlet/story/RTGAM.20040116.wbgege0116/BNStory/Business/ Before I rush out and buy shares in GE, I think I would ask several questions though: First, what portion of their earnings are coming from credit operations where the company charges high interest rates to borrowers? How many GE jobs have been moved offshore? How many new jobs were created in the US? I mean, not to be a party pooper, but these are the kinds of issues I would research before buying any stock of any company. Maybe being almost unemployed is a strong motivator, you think?

This week our Inside Report explores the ramifications of Alan Greenspan's trip to Germany and what Condi may learn about economic meltdowns in South America. For subscription information, please click here.

Pilot Error

A story about a pilot landing at the wrong airport yesterday caught our eye today: http://www.centredaily.com/mld/centredaily/news/7716354.htm?template=contentModules/printstory.jsp. While it sounds like landing at the wrong airport should be impossible, it's not. There are something like 5,000 airports in the US - and having recently played around with a simulator of Garmin's latest aeonautical GPS unit, I remembered how easy it was to punch in the wrong airport code. SCE is the code for State College, but SCF gets you to Scottsdale, Arizona.

A decade or two back, when I was busy being VP of an airline, I remember making fun of a Jamaican carrier for landing on the wrong island in the Bahamas. One of our pilots piped up "I almost did that a couple of times myself..." Ever since, I vowed I would stick up for the pilot on the wrong approach, unless, of course, I happened to be on the airplane involved.

Thursday

Can We Trust Polls?

The latest Zogby poll out in Iowa is a shocker - in that it shows John Kerry out front: http://www.whotv.com/global/story.asp?s=1601723&ClientType=Printable While we admire the Zogby organization, we're also not surprised that a fellow Skull & Bones frat of Bush should pop into the lead - something we have been noticing for what, 6-months or longer? Polls in our view are dangerous because they promote "me-too" kind of behavior of voters. Who wants to admit voting for the wrong guy? (Yeah, I voted for Perot....but that makes me a quirk. But he was more right than wrong...)

Kennedy Blast

Like we hadn't figured this out for ourselves, but Senator Edward Kenedy says the Iraq war was made up for political purposes at the Texas White House: http://www.itechnology.co.za/index.php?click_id=3&art_id=qw1074126601925B224&set_id=1 But can we trust Kennedy? He's promoting John Kerry! Help! Where do I find the lever labeled ":None of the above!"???

More Pickled Stats?

We already know that there's all kinds of monkey business behind most US government stats - in the form of hedonic corrections - or simply stopping to measure things that don't suit the stat makers. You know the price of milk, for example, was dropped in the late 1990's from US calcs, right? Well, seems like the Ukraine is learning about how to print up good stats, too: http://www.interfax.com/com?item=Ukr&pg=0&id=5681226&req=

Fund & Games

Couple of worthwhile stories in the NY Post today. One about another money management firm in trouble with the NASD: http://www.nypost.com/business/15757.htm while the other is more an overview piece at: http://www.nypost.com/business/15760.htm

Iraq's New Money

Guess what's coming to Dinar? Landscapes, history, and a stronger currency than the US dollar! http://ap.tbo.com/ap/breaking/MGAB7GUPGPD.html The exchange rates quoted make it appear that the new dinars have appreciated some 40%. What an opportunity for someone, huh? But old dinars at 2,000 for a buck months back and sell them for 1,200 for a dollar today. Wonder how many banks played that move?

How to Build Democracy?

US forces have killed either 7 or 8 protesters who have turned out to protest the snail's pace plan to count nosed and hold elections in Iraq. http://english.aljazeera.net/NR/exeres/38504C54-8377-4121-A506-3AF5ADC8FB59.htm. More to the point is the apparently large numbers of people who are protesting: http://www.jihadunspun.com/intheatre_internal.php?article=91270&list=/home.php& BBC coverage at http://news.bbc.co.uk/1/hi/world/middle_east/3398665.stm. Want more? http://www.atimes.com//atimes/Middle_East/FA16Ak03.html

Drug Danger Update

Another one of those stories about the dangers of the designer drug ecstacy. This one says you become more ...er.....

...where was I? Oh yeah...forgetful... if you use it...http://www.innovations-report.com/html/reports/medicine_health/report-24750.html. The study involved 763 euphoric participants...

Depression Fears? Greenspan on Protectionism

The founding concept of Urban Survival is that we either are now, or shortly will be, experiencing an economic depression that will dwarf the 1930's Great Depression. We'll see higher unemployment, more unrest, and perhaps the collapse of the US dollar. That's because unlike the last depression, where people had the option of returning to the land, there's not much land left for people to return to. Prices will keep most folks trapped in cities. Yet the demographic trends are clearly in place - especially when you look at the huge number of Baby Boomers who will retire and will insure that stock and bond sales will soar as an aging population tries to cling to an unsupportable lifestyle.

We've also noted that one of the hallmaks of this Second Depression will be missed because although the broad outline of history replays itself, it's in a different form every time. Nothing is quite the same, for as Mark Twain noted, history only rhymes. It's against this backdrop that we call your attention this morning to Alan Greenspan's fear that creeping protectionism is afoot in the world: http://biz.yahoo.com/ap/040113/greenspan_trade_44.html "The costs of any new protectionist initiatives .... could significantly erode the flexibility of the global economy," Greenspan added. "Consequently, it is imperative that creeping protectionism be thwarted and reversed."

While the Fed boss is well intentioned, the facts are pretty ugly. More than $20-million Americans are unemployed or underemployed by the government's own numbers. What's worse? Not that much could be worse than jobjacking. But we note that China has announced plans to slap steep tarrifs on imported steel to prevent harm to its economy: http://english.aljazeera.net/NR/exeres/2A2EE74E-4C01-42B0-ADC3-C58263DAD7A5.htm

Clearly, the reason George Bush and others who have bought in to the corporate consumption lifestyle need so desperately to pass the Free Trade Area of the Americas is to further reduce the purchasing power of Americans. Without a falling dollar and competing with people making a fraction of our incomes in other countries, the collapse will happen sooner than later.

Female Bomber Tactic Change Foreseen

If you listened to the interview Cliff & I did on the Art Bell AM Coast to Coast show recently, you know that a possible interpretation of the very small bot run was that we might see a female and male terrorist bombing. Today with note with interest that a female bomber has been used for the first time: http://news.bbc.co.uk/1/hi/world/middle_east/3395973.stm With the change in tactics, the odds of the web bot prediction becoming reality would seem to increase. The "perfect fit" with prediction would be a male and female bomber attacking an underground area such as a tunnel, with three devices, two of which detonate. We'll be scanning headlines for this event.

Healthy Marriage Money?

With all the unemployed, George Bush and company apparently want to spend money on psychological counseling for low income people: http://www.nytimes.com/2004/01/14/politics/campaigns/14MARR.html?ei=5062&en=4de1d4434bd90853&ex=1074661200&partner=GOOGLE&pagewanted=print&position=

An interesting use of funds to buy what? (Votes!)

Roadblocks OK

The Supreme Court has OK'd the use of "informational roadblocks" by police...which gives just that much more unsupervised powers to people in blue, green, black, etc... While we are not impressed with roadblocks, which could be viewed as illegal search and seizure, we are really impressed with some fine police work which continues to bring nogoodnicks to justice. Latest example: Sweden, where good police work has gained a confession from the killer of a popular politician: http://news.bbc.co.uk/1/hi/world/europe/3394377.stm.

New View of Windows?

Well, here we are, stuck in a motel in Palestine, Texas, waiting for the insurance company to figure out what to do with our burned out home. The first repair estimate is somewhere north of $45K to repair with a structure value of $55K on the policy...odds seem like they will total it, so Elaine and I are off shopping to see what's available in the price range. The good news is that there is quite a bit available, the bad news is that we don't know for how long we'll be in limbo waiting for the insurance paperwork to wind its way through the process.

One surprise we've had is how well built some of the new modular product is. We looked at dome homes, but they don't have high resale value, and it's doubtful the mortgage company would sign off on anything innovative. So we wait. At about $60/ day of unplanned expense, but that's what good financial management is about.

A story about some of the new things happening with windows caught our eye today. With advances in technology, windows are becoming electronic marvels with details at http://ap.tbo.com/ap/breaking/MGAMZ5C7FPD.html.

We'll keep you posted as this adventure/nightmare continues....for now, looking at changes in building materials chews up a little time. The rest is spent trying to find high speed data service for the ranch location.

Bush Admin: Get the Messenger

No question about it, the Bush administration is super ticked about the tell-all contents of the new book which features comments of Treasury Secretary Paul O'Neill. The Treasury Department is reportedly looking at a criminal investigation, although in our view, it is probably meant to shut up O'Neill so he doesn't blab any more about what you can bet will be suddenly classified contents. http://apnews.myway.com/article/20040112/D801J3781.html Of course we all know that Treasury wouldn't make any comments, but we remember who their boss is and how mad he is. (Angry, too!)

Another Heretic?

Yet while Paul O'Neill's book is getting a lot more press, the hidden story almost invisible in US media is the one about a report from the US Army War College which says, in effect, that the Iraq War was a very bad strategic decision - an assessment that precisely lines up with our views of the subject. Click over to a watered down summary at: http://news.bbc.co.uk/1/hi/world/americas/3391583.stm.

Detroit Catching On?

Maybe, but then again, maybe not. The article at http://biz.yahoo.com/ap/040113/na_fin_us_auto_show_environment_2.html says the Big Three are looking at alternative energy (hybrids and fuel cells) for other than small cars. The problem is that Detroit acts like a 19-year old male on a hot date - willing to say darn near anything to "make the sale" if you follow my drift.

Wal-Mart Audit

Results of an internal audit by Wal-Mart are out: http://www.nytimes.com/2004/01/13/business/13WALM.html?ei=5062&en=5030f110b04e18f4&ex=1074574800&partner=GOOGLE&pagewanted=print&position=. Bottom line is there were apparently violations of labor laws, but the spin is they were few compared to the size of the company.

Weather Forecasts

Short term, the Northeast is in for more bitter cold. Not that we are sweltering in 40-50 degree Texas, but the outlook for the next month or so will put more pressure on fuel sources. Longer term? More excessive heat waves: http://www.nature.com/nsu/040105/040105-16.html. Hotter summers and colder winters doesn't sound like a friendly planet, does it?

Crudele on Economists

John Crudele of the NY Post - one of the few financial writers worth reading in our view - has a great "open letter to economists" today in his column at: http://www.nypost.com/business/15538.htm.

The Roll to Chinese Banking

You'll recall our article yesterday on how the Chinese with the help of the World Bank are preparing to start offering Yuan denominated bonds (story below). Today, there's another article that you need to read and understand: The Chinese are getting ready to open up their country to foreign banks, another sure sign of movement to replace the US dollar as the world's reserve currency: http://english.aljazeera.net/NR/exeres/8D01DC18-2E1D-40DA-904B-83A3265760EB.htm.

We don't have anything to offer in the way of direction here, except to watch the developments closely. In each major economic turning, power seems to roll from east to west. From Britain to the US, and now from the US to Asia. Start a notebook for yourself and start clipping items. The reason is that in time, you'll be able to use the accumulated material to figure out which currencies will be winners (such as the yuan) and which ones will be losers (such as the US dollar). If you are able to do nothing more than put your investments in the right currency, you may be able to retain purchasing power.

China Tackles the Bond Market!

Say, here's a story that we have been expecting for a long time, but which other financial media won't touch. China, which as all Urban Survival reader's know is ascendant and implementing a plan to take over the role of world reserve currency from the US dollar, has unveiled its plans to begin issuing bonds late this year that are denominated in yuan. http://english.peopledaily.com.cn/200401/12/eng20040112_132375.shtml. You'll note from reading the story that this is being done hand in glove with the World Bank - so you can draw a good map of how all this fits into the corporatist's world-grab.

The administration. meantime is off selling its "give everything to illegal immigrants" program at the summit of the Americas in Mexico City - http://news.bbc.co.uk/1/hi/world/americas/3388099.stm. You can expect boardroom applause and unions to be appalled at this latest gaffe on immigration. The US Border Patrol's union for example, says the new Bush proposal is insulting: http://www.washtimes.com/national/20040112-123623-1914r.htm

And, as if this isn't enough, the U.S. corporatists are pushing for stalled WTO trade talks to be reopened: http://biz.yahoo.com/rb/040111/trade_zoellick_9.html. The motivation is absolutely clear: Keep the jobs in the world in the hands of people who make the least money. This way, the claim of economic progress globally may be made, but the reality for the 20-million or so unemployed in America is something different. It's called the NAFTAfication of the U.S. Globalism may be a great economic engine, but it blows up populations and screws over the world's environment by exporting our unsustainable lifestyle. Count me squarely in the isolationist camp, or at least in favor of requiring purchasing power parity wages globally for all classes of manufacturing and agricultural workers. Is this concept that hard to comprehend?

We wouldn't be buying clothes and athletic shoes from offshore if the workers were paid U.S. minimum wage - the incentive to export your job would evaporate!

Oil Toll

OK, so it's maybe not politically correct to be so blunt, but with Paul O'Neill's disclosure over the weekend that there were no WMD's in Iraq and that the war was planned regardless, we feel there are several stories you should read back-to-back. First, the latest oil price containment efforts: http://biz.yahoo.com/rb/040112/energy_oil_abraham_1.html. Next, read up on the Iraq death toll sustained by our U.S. forces - now 504 dead: http://www.hipakistan.com/en/detail.php?newsId=en50478&F_catID=&f_type=source. For good measure, let's also remember that the Iraqi's don't seem to want us "fighting for their freedom" - this after six Iraqis were killed this weekend: http://apnews.myway.com/article/20040111/D800U26O0.html.

Super Computer Snoop Planned

Meantime, fear of terrorism is continuing to erode our personal freedoms from governmental review. The latest is that CAPPS 2 is going ahead - which means all kinds of personal background will be checked out before you get to fly: http://www.washingtonpost.com/ac2/wp-dyn/A8504-2004Jan11?language=printer Not that it matters, but Britain is now the most watched country by security cameras - more than 4-million security cameras there. Smile next time you leave your home.

Linux Defense Fund

In the battle over "open source" programs and operating systems, plans for a $10-million Linux Defend Fund have been unveiled: http://www.nytimes.com/2004/01/12/technology/12fund.html?ex=1389243600&en=75ac9ce169893e3a&ei=5007&partner=USERLAND. I don't know how effective such an effort could possibly be: $10-million in major computer litigation is like an initial consultation and filing - maybe not even that. Ask Bill...

Fire Followup

We got a fair amount of work done this weekend at the ranch. The phone lines are in to the outbuilding, which I may be able to turn into a workable office. Today, we will get the initial paperwork started. One of the issues is getting the police report - and then filling in everything else. Did you see in the Philippines today there was a shanty town fire that caused 35-thousand to become homeless? We know the feeling...

New Magazines: Rural

A piece in the New York Post caught my eye this morning - it's about a new Connecticut magazine dealing with gardening and rural living. The article is at http://www.nypost.com/business/15440.htm if you want to read it. The NY Post report ascribes it to life coming back to the publishing business, but we'll suggest it is something else.

With the U.S. dollar freefalling - and don't be surprised by gold over $430 this week - more and more people will lose their jobs. The administration may be good at playing chess against two-bit dictators like Saddam, but one level up there is a whole game they're not getting. At this upper level, the corporations of the world are moving U.S. jobs to least cost producing countries in order to pump up their bottom lines and they're giving billions of support to international banks and groups like NAFTA and the WTO to move their corporate agenda in that direction. The Bush administration doesn't seem to understand that by pimping legislation like the wrong-headed plan to grant legal status to millions of illegals already suckling off the federal government, they are perhaps unwittingly contributing to the downfall of a country they are sworn to protect and defend. They are not supposed to protect and defend invasion forces from other countries, yet this is precisely the goal of this latest policy gaffe.

So when I read a report, like the one in the Post this morning, about an increased in interest rural homes, I smile, as should you. To think that a new magazine indicates "health" in publishing misses the point. Go reread www.schizomania.com and some of the other sources we have pointed out to you. More and more smart big city people - including me - are moving to the rural parts of America because cities are sick. If our reckoning is right, that will become evident this summer when unemployment fears and hunger boil over.

American's are a lot smarter than most politicos give us credit for being. The move to rural is not a "publishing trend". It's urban survival.

Weekend

Hell Week Arrives

Not only were the jobs numbers a piece of crap on Friday, but the biggest PR nightmare of the Bush Administration is coming from one time Treasury Secretary Paul O'Neill.  In his new book, he describes George Bush as "a blind man in a room full of deaf people."  read the details at : http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1073280927272&p=1012571727088, but realize that the O'Neill slam is only one of the problems on the Bush platter next week.  But the killer is that O'Neill says the Iraq war was in planning long before 9/11 - and that means it was a family vendetta/oil grab after all... (shocked or awed?)

I was sitting in the motel coffee shop this morning about 6 AM - and some of the local "good ole boys" were having their Saturday morning breakfast.  "Damn Bush - I supported him all the way - hell, I even contributed money7 to him, but this (expletive deleted) with the illegal immigrants has gone too far..." He then told his compadres how he'd be writing to everyone on the planet about this and how he didn't take to it no how, no sir.  The group at breakfast also expressed the fear that Hillary might run, but after listening to the local rap here about 100-miles from the Texas White House, you can almost smell the distrust in the air.  And distrust is not something people in  East Texas cotton to.  A man's word here is considered his bond, and word quickly gets around about who's a good guy, and who's a bad 'un.  So Bush will have growing resentment and fall out to that one, but the administration has obviously sold out to the corporatist's bottom line - if you want jobs in the US, bring in illegals, make them "legal" and they will fill in the jobs.

An example?  The fellow who was driving the moving truck that brought our goods here was a nice Uzbekistan fellow - a degreed engineer (hydraulic) and the only job he could get when he arrived was in a hotel for $40 a day (10+ hours).  Now, he's driving a semi for $0.35 a mile.  I'm unemployed and all, but with the few subscribers coming in and the last few shekels from my last gig, I figured he and his partner deserved more than 4¢ a cubic foot for unloading our furniture (twice because the semi wouldn't make it up our driveway...I ask you to consider whether you would unload a 17' fully packed "shorty" for $34 if that was what you had to do for a living?  So I tipped 'em - which they genuinely appreciated.

See?  That's the kind of environment out there right now.  The good news?  When the insurance squares up, we will get to buy a fair replacement for our burned out home, but the administration isn't likely to hear this kind of feedback.

The Jobjacking Issue

The jobjacking issue is one we've been ragging on for a long time (the export of US jobs to least cost producing countries).  But the Friday jobs report was a genuine cluster you-know-what.  Gory details at http://www.nypost.com/business/44756.htm.  Only 1,000 jobs created for the whole month!!!

You Expected Summer?

It seems like a long ways off, but the lows here in Texas in the low 30's last night are nothing compared to the temps last night.  Check out the map below:

All of the cold will go a long way towards keeping up the pressure on heating oil which is moving up smartly.

The New Bubble?

We note with interest the reports today that the markets are now at multi-year highs: http://biz.yahoo.com/rb/040108/markets_stocks_23.html What's driving it? The answer is obvioius as all get-out: Super low interest rates and a lot of hype around good financial numbers and nearly burying the bad. What you don't see on American media is the role of jobjacking in this. What's booming is the economy in places like Indonesia: http://ap.tbo.com/ap/breaking/MGAVLCK18PD.html But the U.S. dollar, despite an uptick today, appears to be in a long downward trend. We note the low interest rates are being held by the ECB - http://www.euractiv.com/cgi-bin/cgint.exe?204&OIDN=1506940&-home=home - and if this continues, it will mean a possible overheating of the European economy. But, in light of what appears to be the "big picture" - conversion to a global economy and the elimination of fiat (paper) money and its replacement with digi-dollars, the risk of the ECB holding rates low should be minimal. The trick, of course, over the longer term will be to spot the end of the decline of the dollar and adjust portfolios at the right moment.

Quagmire and Misdirection

With the U.S. elections now about 10-months off, the Bush administration is turning up the heat on the UN to put forces into Iraq. http://www.msnbc.msn.com/id/3911140/ The reason? To make sure the prez can lead into the election with a hype "I ended the war" (when in fact, the UN and Japan will take it over, if all goes by plan). So that's the quagmire part. Now, the misdirection part will be the hugely orchestrated "announcement" that Bush will declare (in Kennedy-like fashion) that "We will put a man on Mars within 10-years". The official announcement will be made next week: http://apnews.myway.com/article/20040109/D7VV5E0O0.html. The harsh realisty is that Iraq is becoming an armed gangland with two religious factions (or more) fighting for control with the latest being five dead in a mosque explosion : http://news.bbc.co.uk/1/hi/world/middle_east/3382547.stm.

Reminder: I noted Andrea Mitchell was a guest again on Don Imus on MSNBC (living in a motel has few advantages, but you get plenty of time to watch TV...) I'd just like to remind everyone to listen closely to what she says. The reason? She's the wife of Alan Greenspan...remember?

Farm Fish Warning

Scientists confirm what most sportsmen already knew: http://news.yahoo.com/news?tmpl=story2&cid=97&u=/hsn/20040109/hl_hsn/toxinsinfarmraisedsalmonposehealthrisk&printer=1.

This week in Inside Report: Currency Corrected US Markets.  Subscription information by clicking here.

Housing Followup

About 9 AM today, we will meet with the insurance adjuster to go through our options on what to do with our partially gutted house. The floor is all ripped up and the heating system and some walls are gone from our fire. I will try to respond to all the well wishers, but first priority goes to subscribers - and new subscriptions. Every subscription helps... Meantime, if you want something to write me about, figure out a business plan. If the insurance company totals the home, we will have $55K to replace it. Do we a) buy a new home or b) a 1-2 year old home? c) Build a dome house? or d) ?? Send your business plan to george@ure.net as a text document - as my connection speed is a lousy 26.4K until we get the barn rewired to have phone lines into it later on today...

High Price of Eggs

Must be fun to be Forbes...and make $80+ million for selling a dozen eggs... http://ap.tbo.com/ap/breaking/MGABQ0A88PD.html.

Here's our text for the day: Thems that haves, gets.

Burned Out!
I could not make this up: We were approaching Tyler Texas today after wrapping up things on our end in Florida. We called Panama Bates at the ranch. "Why the hell haven't you had your cell on?" We have...what's up?

"Well, your house burned down..."

"You're kidding, right?"

"Nope - there were 25 firemen here from 11 PM last night till about 4 AM. They figured the cause was a wiring problem in the electrical system of the furnace."

"Oh my God..."

So, tonight, we find ourselves in a hotel in Palestine, some distance from the ranch, and asking ourselves, "What next???"

More details in the morning. For now, I'm going to fetch Elaine and Panama, as they have spent this evening at a laundromat getting the clothes from stinking like a BBQ gone mad and I've gonna round up the biggest steak, baked potatoe and a few shots of rum, I can find here... Thank Heaven there was no one hurt, including the fire fighters, and tomorrow we meet with the insurance people. I have a wake up call, though for 5 AM to get the columns going again.

If you have an electric heating system, dust it off and make sure you don't have vynil ducting.

I figure the good points: 1) no one was hurt 2) we have a good reputable insurance company and 3) we have the biggest damn smokehouse in Anderson County Texas.

Arnold's Fiscal Fitness Plan
California Governor Arnold took to the tube yesterday and talked about fiscal responsibility. He's working on keeping his popularity up as he takes on a number of "sacred cows" in the California state budget. Details at : http://www.drudgereport.com/flash.htm

Yellowstone Watch:
Not that we're overly concerned yet, but the earthquake up in Wyoming certainly has our attention: http://ap.tbo.com/ap/breaking/MGAQXSLA5PD.html

Dollar Firms
We expect that gold's new $420 range will be tested later today, but we also expect it will hold. As you would expect, the price of gold won't be straight up, nor will the purchasing power of the U.S. dollar be straight down. Still, it's worth keeping up on the overall trend and you can do that by reading the day's latest at: http://ap.tbo.com/ap/breaking/MGAINBXC5PD.html

Presidential Security or Hide the Emporer?
There have been a number of stories lately about the expanded Secret Service role in hiding the president from anything that looks like protest. Moreover, it's not just to keep dissent out of Bush's view - it's also carefully orchestrated to keep national media from seeing signs like the "Reichstag Fire" placards that have been seen at some events. We'd suggest you read the coverage of a protest restriction case at http://www.thestate.com/mld/thestate/news/local/7645909.htm?template=contentModules/printstory.jsp and ask yourself if being able to protest inside a chanin link fence, fully half a mile from the site of a presidential visit, means Freedom of Speech has been shredded. Say what you will about the ACLU, they have been on the Constitution's side on this one. While we don't have a strong view yet, we've got some concerns that when the national media doesn't do it's job - airing all sides of the story - that it creates the very problems the White House is trying to avoid.

Moving Adventures
Our first day out on the road trip to Texas got underway a lot later than we expected on Tuesday. The moving people came in and had everything packed on the track in under 3-hours. But then we ended up napping after some of our landlord's wonderful grappa (Italian for moonshine) took hold. As a result, we rolled into a Holiday Inn up here in the Orlando area about 9 PM last night. We didn't want to drive under the grape, so to speak. This morning, our plan is to head out after showers and another shot of coffee...figure one more night on the road. Sorry if the formatting looks odd, but I forgot to put FrontPage 2003 on this laptop, so I'm cobbling on FP 97.

The Missing Story

I have to admit I am shocked by the lack of coverage of the falling U.S. dollar, it's implications for our inflationary future, and the eerie silence of U.S. media on the subject.  But, in case you haven't focused on the price of gold (chart above), it has been running well over the $420 level, and while most people were sleeping, it popped up to only 90¢ distance from $430!  There is some pretty good coverage from al Jazeera - which we have mentioned previously is building a BBC-like reputation for solid coverage: http://english.aljazeera.net/NR/exeres/F1BB1749-1E4D-4955-8BA7-4384D2ECF84F.htm. Shocking lack of coverage, but we'll continue to give it to you straight: Even if you don't have gold, you can look at what gold is doing as what will happen to oil and imports later this year.  What's shocking is that as long as the Dow keeps going up, none of the U.S. follow-the-leader media seem to care. 

In a conversation yesterday, my colleague Cliff observed that from a linguistic standpoint, when Greenspan and company note the decline of the dollar has been "orderly so far" what they imply - despite their best efforts to avoid it - is that disorder could break out.  When that happens, gold will shoot toward $1,000 an ounce (possibly by February) and the stock market will decouple from the free ride. 

What could trigger it?  Let me ask you how many other companies are out there will Parmalat kinds of financial  problems? Answer that and you'll know how to time the ride.

Help that Hurts

Also doing some great financial coverage is the Associated Press's Leigh Strope.  See the  story at http://ap.tbo.com/ap/breaking/MGATB42M3PD.html which details how the much publicized change in overtime wage pay was weasel worded in such a way that many workers won't see a dime more. Key portion:

"While touting the $895 million in increased wages it says those workers would be guaranteed from the changes, the Labor Department is suggesting ways employers can keep their labor costs from going up.

Among the options: cut workers' hourly wages and add the overtime to equal the original salary, or raise salaries to the new $22,100 annual threshold, making them ineligible.

The department says it is merely listing well-known choices available to employers, even under current law. "

Here Kitty Kitty

China is rounding up civet cats following the new SARS scare: http://ap.tbo.com/ap/breaking/MGATK05R3PD.html.  Quick, hide Morris!

Libya Still in Trouble

The recent "getting religion" of Mohamar Qadhafi hasn't convinced the neocons at the White House.  Nope:  George Bush et all have renewed sanctions on Libya.  http://english.aljazeera.net/NR/exeres/57632F35-A1B3-421D-A4FE-082E8062617E.htm.  That keeps a source of evil intact, I guess.  But there are bigger problems ahead...

Spiraling Kingdom

There's a move afoot in Saudi Arabia to reel in the powers of the Saudi Royal family.  http://www.debka.com/article.php?aid=760 is worth reading because you know the Islamists of the Wahabi (read: 9/11) sect are very powerful there, right?  What this sets up is a situation where a serious power grab by the Islamists would likely cause the U.S. to go after oil in an Iraq way.  The risk if we don't is that Saudis would be strongly in favor of higher priced oil at OPEC.

The War's Over!  (sort of...)

Army has psy-ops groups in Iraq trying to sell the idea that the war is over: http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2004/01/05/international0152EST0423.DTL&type=printable. I remember this from the Vietnam playbook...

No Mad Chances...

About 450 cattle are being killed to make sure mad cow is contained: http://apnews.myway.com/article/20040106/D7VT3R300.html.

Web Wars

Google search technology is about to be bounced by Yahoo.  Click over to the dotcom sounding battle coverage at http://story.news.yahoo.com/news?tmpl=story&cid=808&ncid=808&e=3&u=/dowjones/20040106/bs_dowjones/200401060157000411.

Moving Day

Here we are, up at 5 AM writing today's column...at first light the DirecTV dish comes down and we click out of here this afternoon.  Tomorrow's column is anyone's guess, but I'm hoping that we'll have a high speed access link from wherever we sleep tonight.  Within 48-hours we'll be up at our ranch in Texas.  With the world entering a currency crisis, we expect to get some crops in early this year.

All Time Loser?

Interesting story out of Cleveland about a woman who says she dropped her purse and lost a lottery ticket worth $162-million: http://www.mansfieldnewsjournal.com/news/updates/3184.html. Whether the woman actually had the winning ticket is not the story to us.  We see the whole question about how you think of the woman making the claim as more interesting. Some people are trusting and want to believe. They will no doubt side with the woman, while the news-hardened cynics will blow it - and the woman's claim - off. 

My colleague Cliff makes the point that from a karmic standpoint, lottery tickets have a lot of "slime" on them because there is so much fear, greed, hope, and other emotions attached to them.  On the other hand, as Art Bell so accurately picked up in our Sunday night/Monday morning interview, I am the more dollar-denominated one, I've got a few bucks on the Florida numbers for this Saturday.

Carlos Castaneda notes that we each call forth our own "petty demons".  Being unemployed at the moment, I'm ready for the demon of excess cash to show up any old time now. It may not be karmically "clean" but I figure I might just be able to buy my way back into the good graces of the kalapas by giving a lot of it away to good causes.  Less my 40% service charge, of course.  I hope the woman in Cleveland can find the ticket she claims she had.

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Monday

$420+  Gold -  A Day Off Schedule

You'll recall last week what our expectations were, right?  Let me remind you what we said last Monday:

"What do I expect this week?  Among other things a terrorist attack and $420 gold.  The reason?  The central bankers of the world have a serious problem of their own making that is about to unravel and they desperately need something to become the "cause" of our rapidly unfolding economic woes in order to maintain confidence in our disintegrating Wal-Buck as long as possible."

OK, so it's a day late.  But our outlook is pretty much the same.  We think there's an ongoing risk of terrorism (that's what Orange means, right?) and coupled with word from Brit FoSec Jack Straw that the latest tape from Osama bin Hidin is probably real ( see: http://english.aljazeera.net/NR/exeres/51F960A8-117A-4B2B-9FB4-3A021CEF9018.htm ) it's a wonder gold has only hit just under $423.  But then the day is young...  Remember, the web bots have been saying for more than a year that once we hit November of 2003, the Federal Reserve (notes) would become irrelevant.  Gold's pop seems to lend some support to this year-old view. Keep an eye on the dollar index (chart above).

SARS Back?

With a new tape from Osama and with gold lunging higher, you'd think the big story in al Jazeera would be Middle East or money related?  Wrong guess if you said yes.  The headline today is about the return of SARS to Southeast Asia: http://english.aljazeera.net/NR/exeres/51F960A8-117A-4B2B-9FB4-3A021CEF9018.htm. It's not outside the region, but if this is anything like the last go round with SARS, it will be almost no time at all before international aircraft traffic could be bottled up going in or out of Asia.  Not what the stuttering world economic recovery needs right now.

Reader Note: 

The updates this week may become a little unpredictable, because we're moving to Texas.  So check back often and I will update reports as I can.  The DSL link here will go down early Tuesday, so we'll be on Elaine's laptop till we get the big computer going up in Texas.

Sunday & Monday overnight

Special for Art Bell Listeners:

Mini-Bot Run

How much can we suck out of a very limited "pipe" to the Internet?  Well, this morning, my colleague did a "mini run" with just a few web bots, looking strictly for items with immediacy.  The results in detail at http://www.halfpasthuman.com/alta/alta01042004.htm but the gist of it is:

"The obvious interpretation, which is rarely correct, is that an attack will be undertaken by a pair of attackers (one male, one female) using 3 explosives to set off some form of respiratory distress weapon in a crowded place which was approached from a tunnel. It is very unlikely that any plot this neat and tidily encapsulated is close to developing events. The Universe is rarely so orderly and the truth of developing circumstance is usually far more convoluted than most humans care to pursue. In the case of this ALTA interpretation, the data set is so small, and our 'condensation' lexicon scales so slowly at low read levels that the reliability factor on this is considered to be low. " (linked 11:55 AM EST Sunday)

We'll be watching the news for the next week or so looking for something like this...even tough odds are low because it's such a small sample run.

My guess?  I read the outputs and figured it would be something like an attack on a BART station as the trip to Oakland over the nearby Bay Bridge (looks like a leg) and travels through a mountain (Treasure Island) but San Francisco is just a dartboard guess on my part.  Anywhere with a subway would be a candidate...especially where there's an old city on one side...

-----

12:48 AM (EST) Monday Update:

Two items of note.  First, my web bot colleague doesn't think the web bot mini-run means there will be a terror attack - it could be just a "state-of-mind" report, noting that we haven't got a large enough sample to be sure of anything other than this.  I, on the other hand, am never quick to dismiss web bot outputs - I think even in small runs they have high predictive value (as evidenced by the NE Power Outage work, which was a small run by bot standards).  We go back and forth on how to interpret them...until the news events unfold over anywhere from a few days to 2 1/2 months after the run. 

The second item to watch is a new bin Laden tape is out - the full story at the al Jazeera web site, but what makes it significant is that in this tape, Osama refers to quite recent events including the capture of Saddam Hussein: http://english.aljazeera.net/NR/exeres/51F960A8-117A-4B2B-9FB4-3A021CEF9018.htm.    It wouldn't surprise me if the web bots are right, even with a small sample, although the odds are pretty staggering against it.
 

Greenspan's Dire Confusion

You can learn a lot about the mindset of people in leadership positions by simply reading what they say and seeing if it squares up with reality as you know it.  As a case in point this week, let's review the comments of Alan Greenspan to the American Economic Association's meetings this weekend in San Diego.

As you read my remarks, recall that I have an odd bias:  I believe the Fed tries to take credit where it can, redirect blame where it can't, and believes itself almost omnipotent because of this.  I'd suggest that a review of history demonstrates my alternative viewpoint has some basis in fact.

Spin notwithstanding, this short analysis followed a quick word search of Greenspan's speech, driven by my belief that jobjacking (the movement of core goods-producing jobs to least-labor-cost producer countries) and the development of the Internet, have been the two major engines of deflation. 

To me it appears Fed policy has reinforced jobjacking and Internet-driven deflation, although in ways policymakers won't get right till after the economy implodes, a situation which will necessarily occur if compounding of interest on underlying debt (what Ehor Mazurok & I call the Debtberg) outstrips new engines of deflation.

Pathetically, the chief banker of a country where officially 14,255,993 are un or under-employed (see http://www.bls.gov/news.release/empsit.t12.htm  and http://www.bls.gov/news.release/empsit.t01.htm for source data)- and perhaps 20-million by the time you count folks who've had benefits run out - gave an entire speech without using the word "job" or "jobs" once in his prepared remarks. The word unemployment is used once, and is an apparent reference to the dotcom bubble days:

"Those views were reinforced as inflation continued to fall in the context of a declining unemployment rate that by 2000 had dipped below 4 percent in the United States for the first time in three decades."

The False Premise

I'll argue with anyone that jobs are the basis of a healthy economy.  Greenspan began his remarks this weekend by invoking the name Paul Volker, his predecessor at the Fed, who grabbed credit for breaking the back of inflation, when the truth appears to this researcher to be related more to jobjacking than monetary wisdom:

"The tightening of monetary policy by the Federal Reserve in 1979, then led by my predecessor Paul Volcker, ultimately broke the back of price acceleration in the United States, ushering in a two-decade long decline in inflation that eventually brought us to the current state of price stability.

The fall in inflation over this period has been global in scope, and arguably beyond the expectations of even the most optimistic inflation fighters. I have little doubt that an unrelenting focus of monetary policy on achieving price stability has been the principal contributor to disinflation. Indeed, the notion, advanced by Milton Friedman more than thirty years ago, that inflation is everywhere and always a monetary phenomenon is no longer a controversial proposition in the profession. But the size and geographic extent of the decline in inflation raises the question of whether other forces have been at work as well."

I believe the true engine of dis-inflation (the PC term for deflation) is jobjacking - that is, moving formerly American jobs offshore.  Interestingly, when you review the Census Bureau  figures at http://www.census.gov/foreign-trade/balance/c5880.html, you discover that in the period for which Greenspan credits monetary policy wisdom, Japan wasn't the big jobjacker - Japan had already done it's damage.  In 1985, Japan's trade deficit with the U.S. was already $46.152 billion, plus or minus a Honda or Toyota.  In 2003, that had increased to just $54.538 billion.  When viewed in context of inflationary impacts of watering down U.S. currency by printing more of it, Japan's balance of trade (BOT) actually improved.

Our new trading partners were where the damage was about to be done.  From 1991 through 1994, the U.S. according to the government's own numbers ran a trade surplus with Mexico.  We sold Mexico more than we purchased.  See: http://www.census.gov/foreign-trade/balance/c2010.html.  However, as Ross Perot so correctly noted in his presidential bid, that "Big sucking sound you hear on our southern border" has been the impact of NAFTA. Bye-bye to U.S. jobs.

The hoax sold to the U.S. was that NAFTA would be good for American workers.  Today, there are more than 14-million unemployed in America, not counting the overlooked unemployed whose unemployment benefits have run out, who would probably dispute the presumption of the globalists.  We ran a $34 billion dollar deficit with Mexico last year. 

Spin the globe and you'll find evidence of jobjacking abounds.  Unemployed textile workers in South Carolina?  Look how Thailand's balance of trade deficit, a mere $579 million in 1983 has popped up to $7.867 billion in 2003. I'll save you the calculator work: That's 13-times the deficit.

What Greenspan and company are disconnected and insulated from is the welfare of the once-great American middle class...American workers.

Write this down where you can find it for future reference:  A balance of trade deficit reflects goods and services that are not made in your country.  In 1963 when John F. Kennedy was assassinated, the U.S. had a trade surplus of $4.2 billion dollars.  Overseas sourcing got underway as in the mid 1960's, but as to the question of monetary wisdom, we think the balance of trade numbers speak for themselves.

So please forgive us if when our favorite Subject of the Queen of England (which is, after all what Knights like Greenspan are after all...) struts claims like this:

"Yet, during the last quarter century, policymakers managed to defuse dangerous inflationary forces and dealt with the consequences of a stock market crash, a large asset price bubble, and a series of liquidity crises. These events did not distract us from the pursuit and eventual achievement of price stability and the greater economic stability that goes with it."

Bah Humbug!  I'd suggest greedy capital did it by exporting jobs to foreign workers who labor for dimes while American workers held out for dollars. Yes, we got a bump during the Wild West days of the Internet Bubble, but who created that with easy money?  I figure I can round up  about 21-million unemployed people for my point of view, not to mention perhaps 50% of working people who haven't been hypnotized by Cyclops in the family room.

I don't think the American Machine Tool Distributor's Association would mind if I printed some supporting numbers from their site:

There: a 60% reduction in machine tool orders in just six years.  We couldn't compete if we had to, because we don't have the tools.  This is like a gift to Howard Dean's people.  We need jobs...and a good starting point would be to demand a new kind of tarrif - based on purchasing parity power in offshore producer countries.  That would end a lot of the (globalist) slave labor that is saving their P&L's today.

The complete text of Greenspan taking credit for almost everything except Creation is at http://www.federalreserve.gov/boarddocs/speeches/2004/20040103/default.htm. 

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Bush Plans the Next Recession

We can just about plan on having a second recession in the first year or two of the second Bush presidency.  Why?  Well, Bush has suddenly got religion about reigning in the Federal Budget - which as we all know from reading the government's own numbers, has been awash in wild spending to try and pump up what's left of the domestic economy.  In the New York Times today:

http://www.nytimes.com/2004/01/04/politics/04BUDG.html?ei=5062&en=67f8901a2ea8bd35&ex=1073797200&partner=GOOGLE&pagewanted=print&position=

OK, numbers:  Without the pumping of Federal spending, especially with the War in Iraq which is far from over, the economy would be much worse off than it is right now.  Here's how politics works:  Bush can pawn off budget-cutting zeal to reduce the impact of a Dean attack on his spendthrift ways, and try to look like a budget cutter - because it's a cinch that right-wing media won't ask "How come you were using Federal spending to pump things up while we were exporting jobs to India and Thailand?  What about those 14-million IT jobs that Gartner Group figures are gone for good?  No...that would involve in depth reporting - and who's got time for that?

On the other hand, if you figure that the Iraq War has created a minimum of 500,000 direct + indirect jobs, we can calculate its minimum impact on unemployment this way:

Ah...so the way brings down unemployment by one-third of one percent (or more).  That's 250,000 military jobs plus all the supply and logistic supplier employment.  See how good war is? 

For more details, scroll down our October 2001 piece at http://www.urbansurvival.com/nloct26.htm for how to use a war to skip a Depression. Perpetual War = No Second Depression.

News From Elliott Wave International

On to the Charts!

Write when you get rich - or sooner if you feel like it.

George Ure

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All contents (c) 1998-2003 by George A. Ure, MBA, except authors as linked or noted