White House Job Changes

OK, here it is Saturday morning, and we all have a busy weekend of chores, so let's run through the highlights of the political power struggles which are going on, because they are likely to bleed over into the market in the weeks ahead.

The headliner is the story that Porter Goss threw in the towel at the CIA.  As he left, George Bush was busy heaping praise on him.  But wait, was it just a matter of conscience? There has been some speculation - and it's only speculation mind you, that Goss is somehow leaving because of the Cunningham prostitution case.  An open question says TPM Muckraker.com.  So that's one personnel mess for Bush to deal with.

The next one is what to do about Don Rumsfeld.  Rummy, as you may be aware is trying to revise history by claiming he didn't say things he really clearly did say about the Iraq war.  Too much aspartame, maybe?  Mainstream Washington media, like the venerable Washington Post, have jumped to Rumsfeld's defense on point, but admitting maybe it's time for him to be sidelined and someone else brought onto the field.

Next up, on our whirligig of White House personnel dramas, we have Scooter Libby planning to call Karl Rove to testify in his trial for allegedly lying to a federal grand jury.  After five trips to the grand jury room himself, it'd be interesting to hear Rove's explanation of all this, but I doubt that will ever come to light.

Here's my thinking:  George Bush didn't come down to his Texas ranch for Easter this year.  Now, because of all the balls up in the air, I'd be surprised if he leaves DC to come down for the Memorial Day weekend.  In fact, I'd bet Bush won't take nearly as many vacations now, because the pressure of events has really been turned up on his administration and with falling poll numbers, and a lot of conservatives figuring they have been screwed over/used by the Bush gang, he's got to stay inside the Beltway and get a little (!) work done.

Speaking of Polls...

A poll on energy use says Americans are driving less, cutting back on heating and cooling use, too.

CONgress Ducks Immigration

You'll notice that CONgress with just a week to go in this session has come out with a poor watered down version of immigration reform.  This is all part of the usual suspects doing the usual things - namely side stepping true reform ahead of elections.  The deal goes something like this:  You're supposed to overlook the incredible lack of leadership by those in CONgress and return them to their jobs again for another term.  Is that crack-head thinking, or what?

Credit to Congressman James Sensenbrenner who's quoted in the Washington Post as saying his committee looked at other countries and found they are harsher on illegals than the US: ""With all the blustery rhetoric coming from opponents about a 'harsh' and 'draconian' House bill ..., I note that five out of the six countries studied _ including Mexico _ make illegal entry and unlawful presence a criminal offense," said Rep. James Sensenbrenner, R-Wis." 

Does the report make Sensenbrenner a good guy?  Depends. Calling it the "Abramoff Effect" there are reports that Sensenbrenner passed up the NAB convention in Sin City recently. While it could be argued that Sensenbrenner is really working for ethics reform, it could also be the "election effect."  No certain way to measure this stuff.  Tough decision for Wisconsin voters, but at least Sensenbrenner appears to be trying.  For now, I'll use Congressman, not CONgressman when referring to him. One reader says that's premature  because I need to read more about the guy...  OK, back to CONgressman, then.

On the other hand, there are folks like CONgressman Patrick Kennedy who checked himself into a drug rehab outfit following a car accident this week (that he doesn't remember).  This should be a no-brainer vote for Rhode Island voters.  Send someone else.

Stocks Up

The stock market bested the 11,500 level yesterday and closed the week on the Dow at 11,577 and change.  Not a bad showing.  But remember, the market's advance is certainly due in part to the falling US dollar - which is also the underlying reason why gold and silver have been showing so much strength lately.

The real fireworks will come later on this year if the dollar continues to decline.  That's because the stock market is presently being priced like a piece of real estate (say a fourplex) would be valued in an inflationary market.  As inflation comes along, the market price of the fourplex goes up (and so did the market this week).  But at some point, the fourplex stops going up in price because the rents can't be increased enough to make it cashflow out.  Well, the same kind of logic applies to this market.  I'm not the only one seeing this.  A reader writes:

"In the past high inflation or stagflation was represented by a drop in the DJIA. Things appear "different now" in that inflation is escalating, yet the DJIA is also increasing. Could it be that we are in a situation where the primary drivers of the DJIA are "uncoupled" to the dollar, ie, will prosper even if the dollar plunges? Or, could it be that they have some "inherent value" and the market is focused on that, and their prices are increasing due to the drop in the dollar. Marc Faber does a good job of covering the Mexican hyperinflation and the effects on the Mexican Stock Exchange on page 308 of his book, Tomorrow's Gold."

The stock carnies have been bellowing about what a "great investment" stocks have been, yet in order to achieve breakeven with the all-time high of six years ago, inflation adjustments would put the Dow's must-do number somewhere north of 14,000.  So while the market may indeed get to a "new high" this year, it seems possible that it will be a phony all-time lie.    The market could perhaps go to 12,000 - a "new high" - and yet really just complete an 80% retracement  on an inflation adjusted basis.  That's when the yucky stuff hits the going around thingy.

Jobs Rant

You're absolutely right, if you noticed that I didn't do my monthly rant about how unemployment is about double - maybe more - than the "official figures" show.  That said, I received a note from a reader who did just a fine job of doing the rant for me:

"George,

I hadn't seen any of your commentary on the latest jobs report. I received this email from the Bureau of Labor Statistics (BLS) this morning. I put some commentary inside a copy of the email in bold, blue italics with some commentary at the end of the BLS email.

From the Bureau of Lying Statistics today.

THE EMPLOYMENT SITUATION: APRIL 2006

Nonfarm employment increased by 138,000 in April, and the unemployment rate was unchanged at 4.7 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Industries with notable job gains over the month included financial activities, health care, and manufacturing. Average hourly earnings rose by 9 cents in April.

Unemployment (Household Survey Data)

The number of unemployed persons (7.1 million) was essentially unchanged in April, and the unemployment rate held at 4.7 percent. The jobless rates for the major worker groups--adult men (4.2 percent), adult women (4.3 per-cent), teenagers (14.6 percent), whites (4.1 percent), blacks (9.4 percent), and Hispanics (5.4 percent)--showed little or no change over the month. The unemployment rate for Asians was 3.6 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

Add the 1.3 million people who are "marginally attached" to the labor force (part-time, under employed, want a job but can't find one, etc.) and the unemployment rate is more like 5.5% and that's still BS.

Total Employment and the Labor Force (Household Survey Data)

Total employment was about unchanged in April at 143.7 million; the employment-population ratio held at 63.0 percent. The labor force participation rate was 66.1 percent in April and has been in a narrow range--66.0 to 66.2 percent--since April 2005. (See table A-1.)

If the total employed was "about unchanged," then how did the economy "create" 138,000 new jobs? See my comments below on the "birth/death" adjustment. The "labor force participation rate" at 66.1% is also below norms of about 70% from the 1990's. 4% may not sound like much, but it's a big number in terms of people working, about 8.69 million people. People aren't "participating" in the labor force because of the low quality of jobs available, or they've just given up completely.

Persons Not in the Labor Force (Household Survey Data)

About 1.3 million persons (not seasonally adjusted) were marginally attached to the labor force in April, down from 1.5 million a year earlier. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 381,000 discouraged workers in April, about the same as a year earlier. Discouraged workers were not currently looking for work specifically because they believed no jobs were available for them. The other 928,000 marginally attached had not searched for work for reasons such as school attendance or family responsibilities. (See table A-13.)

They're unemployed but they don't count. Makes sense, don't it?

END of BLS email with my commentary.

The rest of this email is my commentary on the BLS' numbers.

The "birth/death" adjustment for April was 271,000. This means the jobs reported without the bullsh*t "guess" was a LOSS of 133,000 jobs. Maybe that's why a measure of Consumer Sentiment plunged from 89 in March to 67 in April, that and rising gas prices.

The BLS also revised March's job creation to 200,000, down 11,000 from the originally reported 211,000. The "birth/death" adjustment for March was 135,000, for a net real jobs gain of 65,000 for that month. The net for the last two months is a LOSS of 68,000 real jobs. This doesn't even get into the continuing decline in the quality of jobs going on for the last five years.

A link for the "birth/death" adjustments. http://www.bls.gov/web/cesbd.htm 

The "alternate measures of unemployment" page found at the link below shows that a more reasonable measure of unemployment is 8.2%, not the 4.7% BS number in the headline report. http://www.bls.gov/news.release/empsit.t12.htm 

Another source of the "fantasy" of government economic reports is John Williams of "Shadow Government Statistics.". Williams has been tracking the changes to govt. economic reports and according to his analysis, if the govt. measured unemployment like it did pre-WW II, unemployment would be more like 12%. That sounds more realistic. Here's a link from Gillespie Research to some of William's latest analysis. http://www.gillespieresearch.com/cgi-bin/bgn/  ?

The writer of this email, C.P. in Baton Rouge, should probably go on staff here...he obviously has the same kind of view we have...although he didn't mention that we have half a million of America's young best nd brightest tied up with the Bush Wars worldwide.  Bring them home and the unemployment picture would get worse.  Even more frightening, there would be fewer jobs for illegals...

Copper: A Precious Metal Story.

You'll love this email:

"Hi George, just a quick note. By far the best investment in metals has been copper. I am in the process of building a house (rather apprehensive at this point with the things going on but... to far along to stop and I am doing 90% of the work my self so it will be on the cheap 60-70 per sq ft) In January I bought 2-1000 foot rolls of 12-2 romex for 223.00 today that same wire is 315.00 home depot -lowes to over 507.00 local electrical supply house. Thursday evening I was talking to my teacher (I am taking 2 classes on residential wiring so I don't have the inspector red tagging everything) He said the supply house was 293 last week and he went in Thursday and they were at 507.00. So I went to our local Menards and bought 5000 feet of 12-2 to finish my house and do some speculation they only had 12-2 the 14-2 ( Home Depot and Lowes had 14-2 but it was priced at 53.95 for 250's) they had no idea when they would be getting back in (shortage?) I bought 20- rolls of 250 ft @59.90 after I left half hour (I guess greed set in or my gambler side came out) I decide to go back and buy 10 more rolls, they would not let me buy anymore they had a 5 roll limit on the 250's and the mgr was not happy I already got 20. The kicker is they had raised the price to 73.90 in that half hour. My guess is by the end of next week HD Lowes etc will be substantially higher than they are even today. It's not like you can substitute copper if you need to wire a house or run electricity somewhere. Inflation or dollar deflating--that is the question of the day!

Keep the great work up!!"

I assume this is 12 with ground?.  And don't forget to put a cable staple in within 6" of the box and...where's my NEC book? Now we know why new contractors are using as much 14/2 as they can get away with.  We use nothing but 12/2 (w/gnd) here, though.  Part of being from a

I will probably be ordering antenna wire this coming week for my new 75-meter "dream antenna" - a double-extended Zepp, so I've been watching wire prices too - with drop-jawed amazement.

Elaine's Next Computer?

I'm looking at wood computers - gorgeous - but pricey. Still, what status, huh?

Desperate Acts & The Real Y2K Problem

From this week's report: While most people concerned with the Y2K Problem believed that it had something to do with computers, it is starting to look more and more like the real Y2K problem was that the stock market reached it's latest all-time-high in January of that year on an inflation-adjusted basis, and that things from here on it are starting to look like an "upside down cake" version of the 1930s. But not everything is upside down, just enough things to really throw the average student of history off the scent of the 1930's being replayed right here in front of your nose. As I'll demonstrate in a moment, the "upside down" items include things like labor, while the "right side up" items include things like intellectual property protections.  More for Subscribers.  Subscription information - Just $30 /year. This weekend: Fall scenario planning.

Tell Your Friends

With all the site down time this weekend, I would appreciate it if you would tell your friends about this site.  The outages have had a major impact on readership/traffic.  Curious, don't you think? Anyway, click here to pass the word.

Save Money

Our "How to Live on $10,000 a year or less" continues to sell well in our http://www.peoplenomics.com./bookstore.htm bookstore.  No wonder: $10 is all it costs and most folks save thousands.

Friday, May 5, 2006

Goss Out as Market Nears All-Time Lie

The talking heads are beside themselves with glee at this hour - they are talking UP the fact that the market is only "185 points from its all-time high!"  Well, hold on buckaroo.  Not, as we'd say here in Texas, "presactly."  True the old all-time-high of the market was at 11,723.  BUT that was in January 2000.  If you use the Fed's inflation calculator (left menu down a ways) you will see that works out to 13,785 without taking into account another 2% for the inflation this year, year-to-date to just equal things. As I explained to subscribers a few weeks back, when you pencil it all in, we'd have to hit Dow 14,000 -something to equal the old high. 

Getting while the getting is good?  Porter Goss has thrown in the towel at the CIA. No successor yet, but I'd be betting on a corporate figure to bolster corpgov's control of the apparatchik.

Reader Note:  You may notice that our advertising has disappeared.  Reason?  It seems that clicking on some of the ads resulted in attempts to install tracking cookies.  Additionally, many of the ads didn't reflect my values and I don't have time to be play "ad police" all day. Although the ads did provide some revenue, I'm hoping that the removal of advertising will speed up page load times for you, my reader.  This site is entirely paid for by sales from our bookstore and by subscriptions to our premium service, www.peoplenomics.com. Be advised that you may still encounter ads on archived pages of this site, and set your "block cookies" levels accordingly.  We recommend anti-spy software be run frequently.  We use both Spy Bot Search & Destroy as well as Lavasoft's AdAware.  You might be shocked how casual surfing can pick up tracking cookies.... You'll also see that I have changed the look slightly to clean up the appearance of this page for search engines.

Consumer Confidence Tanks

Tanks as in "gas tanks". The HUGE drop to 67.1% in early May is a huge drop from the 89.4% in April. Politicians should be wary.  The sheeple are getting restless.

If you look at the top of our news links page, you'll see that while gold took a short hit from the numbers, the real damage is to the US dollar which fell dramatically against the Euro.  The People's Economist thinks precious metals will keep going up as the dollar keeps sinking.

Fight the Bankster's Big Lie: Prices aren't going up:  Your money is being watered down.

When in Doubt, Fire Someone

I've seen lots of corporate games in my life (too many, to be honest about it), and one is where a fellow gets in trouble and starts firing the people around him in order to hang on to his (or her) own position.  I mentioned this today because it's the context I'm viewing recent turnover not only in the White House, but also across the pond where Tony Blair has just fired Jack Straw as foreign secretary.

What makes this curiouser and curiouser is that sharp-witted readers (hey!  wake up, that's you) will recall that it was just a month ago that Jack and Condi Rice were off in Iraq telling the confused mess of conflicting interests who are busy with their civil war, that the Crown and der Decider wanted some say on who runs the place.

Tony, being able to read the polls, is trying to play the blame game. With GWB's numbers continuing their decline, we have to wonder who will be the human sacrifice offered up inside the Beltway. I'd suggest Paul Wolfowitz, but he's already thrown in with the World Bank, so maybe it will be Karl "five times to the Grand Jury" Rove or Don "Aspartame" Rumsfeld.

Speaking of which, a new book is out "The Bush Agenda" and there's a good interview with author Antonia Juhasz by Joshua Holland here.  Extract:

"In her new book, The Bush Agenda, Antonia Juhasz peels the veils away from Bush's agenda -- imperialism, militarism and corporate globalization -- and exposes who drives it: a group of hawkish ideologues with an unprecedented relationship to major defense and energy companies.

Juhasz shows that the invasion of Iraq -- an invasion that was as much economic as military -- was the centerpiece of a larger project: the creation a New American Century in which the end-goal of American foreign policy is to enrich the corporate elites, and dissent at home will not be tolerated. Juhasz is a wonk -- she got her start as a staffer for Rep. John Conyers -- but the book is as readable as it is deeply researched.:

Not that you didn't know this already, but there's more.  Not the kind of thing to read if you have a closed mind though; symptoms of which include a belief in the "official" story about 9/11, and the infallibility of the White House gang.

Just so you're not confused: I believe in and support the Presidency and the Constitution.

Paul Revere on a Gold Wing?

The headline on this web site is "You're invited to ride 48-states coast to coast this summer."  21st Century Paul Revere Ride 2006.  They're looking for a rider.  "You will be riding for a great cause to stop illegal and mass immigration into America.: Say, what about one of those high profile guys from Gollywood?

Great Idea from Mexico

No, I am not anti-Mexico or anti-Mexican.  Great country, wonderful people.  Bright, too.  I am only anti-illegal immigration.  Legal immigration is fine with me.  That said, let me share with you a letter from a colleague in Mexico which reveals a practice that makes a lot of sense there - and elsewhere outside of GAAP-land LA LA land..

Hello, Mr. Ure!

I read Urban Survival quite regularly.  Today, I write to you with regard to your recent comments, in which you question the informative value of statements of economic growth (and ultimately, of profits) when there is an underlying inflation in excess of the reported growth.

This is a very valid concern you have.

Let me tell you about our experience here in Mexico, during past decades when we had severe monetary inflation. (Today, it's "only" about 13% per annum) The accounting profession in combination with the fiscal authorities, came up with the practice, which became mandatory for financial statements to the fiscal authorities, whereby certified public accountants had to make adjustments to conventional financial statements and issue what were termed the "B-10" statements. In these statements, most all concepts had to be adjusted for financial loss or gain, according to the (government calculated) inflation. (Which of course, never referred to the increase in money in circulation, but only to the officially sanctioned calculations of increases in PRICES.)

Thus, we had such bizarre adjustments as, for instance, "profits" on debt denominated in pesos! Yes, since the peso value of the debt had decreased due to the loss of purchasing power of the peso, if a company owed pesos, it was deemed to have "profited" from owing pesos. And had to pay taxes on that "profit"! Thus the government, giving us deteriorating money, calculated the "profit" we made on their junk money!

A company's assets in inventory were subject to a "B-10" revaluation to reflect an increase in value, and of course, the profit on sales was correspondingly decreased, for fiscal purposes.

Fixed assets were also revalued to reflect a gain in value.

All this, not on any sound theoretical basis but simply, on an empirical or "ad hoc" basis, a "practical" basis to try to reassess the financial statements to reflect the effects of monetary inflation. Never was there any mention of the monetary cause of the rise in prices of course. (Politically incorrect)

Thus, monetary inflation distorted everything, absolutely, and made it next to impossible for a company to really know what it was doing and whether it was going forward or backward. But, the argument was that "something had to be done" to try to present statements more in accord with reality.

Companies thus adjusted their operations - the timing of purchases, the taking on of peso debt and virtually every decision - to try to present figures which would diminish their fiscal liabilities to the minimum possible. Armies of accountants were required; all costly, of course.

I mention all this, because your concern, which is at the moment just the glimmering of doubt about the true significance of figures showing growth, is going to come forward in the coming years to be a major concern of all US companies. Monetary inflation causes price inflation, and this is just beginning to show itself in the US. As the US Dollar falls, prices in the US will rise faster and faster, and sooner or later, you also, in the US, will have to employ "restatements" of financial statements to reflect inflation. Welcome to the Club!

While the US currency was considered the bedrock of the world financial system, US companies had little to worry about in restating financial statements. But, going forward this concern of yours is going to become widespread. Restatement of financial statements is going to cause havoc with company activity.

I won't go into why monetary inflation in the US has not produced substantially higher prices in the US, SO FAR. Others have dealt with that at length. Briefly, it has to do with the relative stability of the dollar in world markets and the huge imports from the Orient, which has accepted dollars as payment - when in reality, they are only vouchers, as payment for imports can really, in fact, only be done by corresponding exports. This condition is bound to change and as it does, price inflation IN SERIOUS AMOUNTS is going to make itself felt.  (Let me hear an Amen!- G)

And a very good question is, what is the rest of the world going to do about their financial statements, when their "compass" or "lighthouse", the US dollar against which they calculate their operations, turns out to be a compass that doesn't point North or a lighthouse that changes position?

So, in a few words, get ready for restatement of financial statements to reflect inflation. And what a mess that is going to be!

Sincerely yours,

Hugo Salinas Price, Mexico City

My pro-silver money website, with some articles in English: www.plata.com.mx

See?  Hugo Salinas Price "gets it." So why can't US corporations, the SEC, and all the king's men get it? Too many hands in the lobbyist's cookie jar, yah think?

Vancouver (Washington) Congressman Brian Baird has the cajones to call lobbyist reform a "sham."  Bet'cha that won't get big play on mainstream media...it's not the Party Line.

Ode to Cash

Our friend, the Wall Street Poet, has been at it again.  This time he's penned a bit of verse about one of my favorite thing - CASH:

Cash, Cash, Wonderful Cash

Stock markets may tumble, bond issues default

Home prices are quirky, they can somersault

Goldšs upward eruptions, they come and they go

Derivative. products, you just never know

 Cash, cash, wonderful cash You can flash it or stash it, therešs no pain with cash.

 

While its hard to keep track when your assets are many

With cash you can easily count to the penny

Itšs liquid as water, its easy to store

It fits in a wallet or under the floor

Cash, cash, wonderful cash You can flash it or stash it, therešs no pain with cash.

 

Cash keeps your life simple, its drawbacks are few

All waiters, they love it, all drug dealers, too T

his nationšs great leaders appear on its face

Therešs Lincoln and Franklin and old Salmon Chase

Cash, cash, wonderful cash You can flash it or stash it, therešs no pain with cash.

 

Itšs light as a feather, it donšt cost commissions

Unlike credit cards therešs no later remissions

As a gift it is tacky, you may take some flack

But please rest assured, it never comes back

Cash, cash, wonderful cash You can flash it or stash it, therešs no pain with cash.

I think of Mike's poetry site as though it is Robert Service would have written for the had he been around today rather than when the glint of greed in the eye crowd was tearing up the Klondike a hundred years back.  Greed don't change. . My favorite Robert Service (ahead of the Cremation of Sam McGee) is "The Quitter."  Right up there with George C. Scott's Patton Speech (Text) (.MP3), in my book. Patton, sadly, was wrong about "Americans have never lost and will never lose a war."  Wrong one and a half times, so far, as I see it. Or was he?  It could be argued that the wars we've lost have been corporate wars, not wars with the full faith and courage of America engaged.

Lammert: Down From Here

Our fractal whiz, Gary Lammert "The Economic Fractalist,"  thinks it's over - the bull market.  Check it out (my translations in blue):

George, the world assumes linearity, but operates in nonlinear fashion. Earthquakes, forest fires in aging 200 year old mature groves replete with underbrush and decay, hurricanes, tsunamis, taxes due on April 15, and even the greatest and most mysterious of them all for the human condition - death - are all nonlinear occurrences in an otherwise tranquil day-to-day, pleasantly monotonous, seemingly continuous linear landscape. (The saying "If you always do what you've always done, you'll always get what you've always got" may not be correct, especially in finance.)

The nature of fractals are likewise nonlinear. That the the complex debt-money-asset-wage system behaves and travels in a quantum fractal manner with saturation areas preceding nonlinear evolutions is a testable hypothesis that has been recurrently supported by empirical retrospective and occasional prospective data from the readily available equity, commodity, and bond valuation charts. In this quantitative tradable asset fractal world, sudden drops occur at varying proportional time scales: minutes, hours, days, weeks, and years-with predictable periodicity. October 1987, in the clarity and ease of retrospective perfect vision, was a recent example of longer time-unit fractal nonlinearity. (When she goes - shortly - it will be spectacular.)

The nonlinear end of the US second equity valuation growth fractal period beginning in 1858, will have a suddenness and unexpectedness that will be proportional to the magnitude of the unprecedented string of fifty to sixty years of successive, pleasantly monotonous, positive annual US GDP growths. These lulling and comforting last fifty to sixty years, unprecedented in their continuity and magnitude are in the nth degree so antipodal to the balanced annual negative and positive GDP growths that characterized the preceding 175 years of US economic activity. The sixty year period started with American engineering greatness and manufacturing dominance. Inflows of world currencies seeking US made exported products built huge aggregates of US savings. (America was once a Super Power).

In the last twenty-five years, politicians and CEO profiteers have placed the US in a near manufacturingless position. Perhaps using the federal government as a model for fiscal responsibility the citizens of this great country have buried themselves in debt: their major production product, a promise to repay at some point in the future with wages from their progressively less globally relevant and more tenuous service type of domestic jobs. In this new economic paradigm, borrowed money for 800 billion dollars of imports and another 700 billion dollars of new federal governmental debt are responsible for 4.7 percent or 650 billion dollars of US GDP growth. While corporations such as Enron might agree with this accounting assessment, more fiscally responsible corporations such as GM understand that this is a net negative growth with no ammunition in the barrel to pay future obligations and entitlements. The thirty year grace period before insolvency - by similar means of phony accounting, - of the empty social security trust fund is entirely dependent on a linear growth model.  (America is now the world's Super Debtor.)

The preceding 175 years before the late 1940's were tough but mostly balanced years that efficiently took the excesses out of the system and resulted in smaller periods and degrees of economic contractions. The exception was the relatively brief run up of mostly positive GDP's to 1929. This curiously occurred after the creation of the Federal Reserve in 1913. The accumulative imbalances up to 29 , relatively small compared to the present day imbalances, precipitated a self-correcting and equilibrating 45 percent loss of US GDP during the 1930's globally severe economic contraction. (The Great Depression may well be eclipsed this time out.)

The Wilshire inverse growth fractal, the fractal pattern defining the money available and the upper saturation asymptote, was completed on 2 May 2006. ("Sell in May and go away" - Old Wall St. adage.  Although this time, be prepared to stay gone several years.)

Another Kennedy Car Crash?

Making headlines today.  Blame is placed on "sleep medicine."  (I'm the Pope.)

Thursday May 5, 2006

BEA Screw Up

Personal Income was up for March, but not by the amount we reported earlier this week.  The corrective press release is just out today:

Errata to Personal Income and Outlays

The Bureau of Economic Analysis (BEA) reports that its estimates of personal income for March and for the first quarter of 2006, which were released on May 1, 2006 were overstated. Personal income for March is now estimated to have increased $49.9 billion (annual rate), or 0.5 percent (not annualized). For the first quarter, personal income growth is now estimated to have increased by $157.8 billion, or 6.2 percent (annual rate).

This overstatement of income resulted from including in the March estimate of Government social benefits to persons a prepayment for April for Medicare Part D benefits—the new prescription drug plan that began on January 1. Personal income for March was overstated by $38.9 billion (annual rate), and its growth was overstated by 0.3 percentage point (not annualized); first-quarter personal income was overstated by $12.9 billion, and its growth was overstated by 0.5 percentage point (annual rate). In the Monthly Treasury Statement—BEA’s data source for payments for the Medicare Prescription Drug Plan—the payment for the month of April, which would normally be made on the first day of the month, was made on March 31 because April 1 fell on a Saturday. According to BEA’s standard practice for recording government transactions, this prepayment should have been recorded in April.

Corrected estimates of personal income for March and for the first quarter are now available on BEA’s Web site at http://www.bea.gov/bea/dn/nipaweb/SelectTable.asp?Selected=N . The corrections impact the personal income and government social benefits within the following National Income and Product Account tables: 1.7.5, 2.1, 2.6, 3.1, 3.2, 3.12U, 5.1 and 7.1. Gross domestic product was not affected.

Personal savings of Americans was negative 63.4 Billion for the quarter and negative 0.7% for the quarter, which pencils out to a -2.8% annual savings rate or so...(sucks).  Still amazing: Personal taxes still pencils out at an eye popping increase of 9.2% YoY.  Tax cuts?  What planet?  Personal disposable income up 5.1% YoY. 

Our inflation number: (PDI increase and negative savings rate) 5.8%

Sheriff Power

First, a toast this morning to Maricopa County (Arizona, Phoenix area) Country Sheriff Joe Arpaio, who is planning to put 100 volunteers and Sheriff's deputies to work randomly patrolling the desert near his city.  Nice to see someone taking positive action to step the flow of illegal entrants to America.  He knows what comes with illegals...

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Related to "sheriff powers" a number of readers recently sent me a note about a 1990's case in which supposedly a sheriff in Wyoming had stopped the feds in his country by claiming local rights took precedence over federal laws in his county. It sounded too good to be true.  And sure enough, it wasn't true.

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Nevertheless, I feel a lot better for my two sons-in-law who live in the Phoenix area knowing that one sheriff has figured out that where there's smuggling in humans, there's smuggling in drugs, Middle Easterners, and Lord knows what else going on. Nukes, for all we know.

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While newspaper headline writers and editorial boards label folks as "opponents of illegal immigration" we have to note that such Mainstream Media (MSM) labeling is in itself quite revealing of how cowardly most media is.  When you think about it, it's like writing about "opponents of illegal murder" or "opponents of illegally driving while drunk."  I think the labeling should be more like "supporters of law enforcement" which is what the majority of Americans are at their core.  I notice the media doesn't label the other side as "supporters of illegal immigration" yet that's precisely what many are.

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And example as such headlines can be found in such prestigious papers as the (San Jose) Mercury-News that headline "Opponents of illegal immigration sound off".or the LA Times which labels law-abiding folks in headlines like  "Anti-illegal immigration forces share a wide tent."  How about "The law abiding citizens"?  Or are we?

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Spin's in.

Drug Spin

Vincente Fox has backed off a decriminalization after the US (and we presume the neoCON's) convinced Fox that it would promote "drug tourism."  OK, so we'll head to British Columbia then, eh?  Of course, big commercial operations are still discouraged in the province. But, posting a notice saying "we'll be back to inspect within 48-hours" isn't what I'd call real aggressive law enforcement.  7.5% of Canadians smoke pot regularly says a 2004 study.  Still, nationally, Canada still puts on the "tough on drugs" stance.

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If there's one lesson that has come through in the Washington adventures of late, it's that corpgov lawmakers live on money and promises of favors.  So we note in passing that while "traffic injuries" are the number 9 leading cause of death in World Health Organization reporting countries, and you know how many of those deaths involved alcohol, the pot lobby (*1/2 year figures) doesn't pass out money at the same rate as the distillers and their proxies do.  Do you suppose that's why one drug is legal and t' other isn't?

Summer Shakes Follow-Up

We duly reported the big earthquake first reported near MacQuarie Island yesterday.  Today, the experts are trying to figure out why Tonga didn't get the tsunami alert issued as a result.  With the web bots predicting more to come, we expect the Pacific Rim countries will have more chances (maybe two more in fact) to get it right before the Big One.

Lava is flowing at an Indonesian volcano today.  Related?  Your guess is as good as any, I reckon.

Those 'Jacked' Jobs to India

You know the job jacking that was making headlines a year or so back, as thousands of tech jobs were "off-shored" to India?  Now, it seems that India is facing a shortage of techies. I'll be the guy in the rocking chair watching as US wages drop compared to the rest of the world far enough so that India can start outsourcing back to us.

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The People's Economist has had too much caffeine this morning because it just occurred to him that the Bush administration doesn't need to modulate a foreign war to pump the economy and keep 400,000 of America's finest young men and women busy in a shooting war.  "Why the simple and more peaceful solution would be for the government to work with Microsoft on a new server operating system.  Just think of the thousands of jobs installing that and working the bugs out would take!" 

Using this approach, when the economy heads for a soft patch (like it is now) instead of trying to whip up another war front (think Iran), all the government would have to do is ordain premature release of buggy Service Pack!  Hell yes.  Forget about Bolivia nationalizing gas fields.  Let's nationalize operating systems. 

Dick versus Putin

Dick Cheney today is accusing Russian president Putin of "restricting the rights of it's citizens." 

Putin doesn't have to worry, though.  In Pravda's series, The Demise of America,  Half of young Americans can't find New York on a map.

Keep on Spending

The nation's retailers report that sales in April were robust.  Or, were they?  With reports of gains in the 6-7% range as some of the big stores (Wal-Mart, Costco) we find ourselves asking if this isn't people going to single-stop superstores to save gas and money, and then how much is a real gain if inflation is running faster than the "official" CPI numbers?

Rates Stable

The European Central bank left rates unchanged this morning.  As we go to bytes this morning, the price of gold is down a couple of bucks, but the dollar is down a lot too.  So I would expect a bounce in gold based on the falling dollar, but this is not trading advise, just an observation.

Stamp Acts

Postage rates are planned to increase to 42-cents next january from the 39-cents that went into effect this January.  That'd be 7.6% inflation.  See, the truth about inflation keeps leaking out, doesn't it? Inflation is higher than reported and more's to come.

Wednesday, May 3, 2006

URGENT: Summer Shakes Arriving

The web bot project of www.halfpasthuman.com was quite clear a while back - saying the "Summer Shakes" would be revisiting us this year.  With already a 7.7 up in the Northeast part of Russia (west of the Bering Sea and Aleutian Islands) we have to wonder if this is another one of the precursors to the BIG One the bots talk about as lying directly ahead this (summer).

To understand why today's earthquake activity is potentially significant, we need to look back at December 23, 2004 when an 8.1 quake hit the MacQuarie Island area (near New Zealand).

OK, hold that thought.  Now, the news:  We just had an 8.0 / 8.1 in the same area this morning.

US Geological Survey puts the magnitude at 8.0 http://earthquake.usgs.gov/eqcenter/eqinthenews/2006/usmgas/

European Monitors place it eerily at 8.1!  Check http://www.emsc-csem.org/index.php?page=home for an update shortly.  (Alert list email says 8.1)

Remember: The reason this is potentially important is what happened 2 1/2 days after the last big Macquarie Island quake:  The Sumatra tsunami on December 26, 2004.  From Wikipedia:

"The most recent analysis indicates the number of casualties were 186,983 dead and 42,883 missing, for a total of 229,886 affected.[1] Nevertheless, this catastrophe is still one of the deadliest disasters in modern history. The disaster is known in Asia and in the international media as the Asian Tsunami, and also called the Boxing Day Tsunami in Australia, Canada, New Zealand, and the United Kingdom as it took place on Boxing Day."

Got water and food stocks laid in? Especially if you're on the West Coast.

CNN Report: "Tsunami warnings issued for Fiji and New Zealand after earthquake measuring a magnitude of about 8.0 shakes southern Pacific Ocean. "

Grains of Salt

As I was about to dig in to some client work, I noticed three stories that demonstrate why you need to take most of the daily news with a "few grains of salt".

• In German media, we read how the so-called threats of Iran to "annihilate israel" were really more Amerispin coverage rather than fact.  The translations of what was said are here along with some discussion of the spin by the war mongers.

• Then we have the big story that "Time Warner Profit climbs almost 60%".  But wait!  Before you run out and buy Time Warner, catch this telltale: "Revenues rose 1 percent to $10.46 billion from $10.36 billion a year ago."  Oh, oh.  Let me see: 6% inflation (food unadjusted 12 mo: 2.6%, unadjusted energy 17.3%) means, ah...Time Warner lost constant dollar sales...

• Proctor & Gamble earnings are out - and the company looks to me like the poster child for "Acquisitions are Us"  While profit was up, the sales increase (a tad better than inflation, but that may be an outcome of good brand management) was a scant 6% less the Gillette acquisition. Smells like keeping up with inflation to me...guess they will have to keep acquiring to keep growing the top line, huh? God help 'em if people stop shaving - the Gillette boost would falter...

9,300 Mile Miss

A few of my friends have been calling excitedly to tell me "The Sky is falling, the sky is falling...and just eight days from now!".  Well, hold on buckaroo, not so fast. While it is true that a piece of the recently falling apart comet called 73P/Schwassmann-Wachmann 3-BD will come within 0.0001 astronomical units of our home on the range (1 AU=distance from earth to the sun), that still pencils out like this:

Distance Earth to Sun: 93,000,000 miles

Minimum miss distance:  0.0001

Calc: 93,000,000 X 0.0001 = 9,300 miles

There, don't you feel better already?  "No, George you dolt, don't you realize that there could be any number of golf ball to basketball sized objects coming in with this thing that might hit earth a week from Thursday?  Why, that could take out a city, or worse, be a Tunguska-sized event!  Why are you taking it so blithely??"

I calmly explain that things here at the ranch are as prepared as always for a "whatever happens" event. I then go on to explain that if (and I am not saying there is any danger of an impact), there are only about six possible outcomes that I can come up with - and four of them, no make that all six,  involve watching TV...

• Very likely: Maybe we will get some good meteor views this weekend, but that would be due to the take of Halley's Comet, not Schwassmann-Wachmann debris.  So while I might be looking up Saturday, unless there's a change in the near-miss estimates, I will sleep normally on the 11th, 8-days from now. Action: Watch Bloomberg for gold and silver quotes from the overnight session. Just like any other morning around here.

• Very improbable: Something small.  (Golf ball or smaller) Action:  Watch Bloomberg for gold and silver quotes from the overnight session. Then watch CNN for the reports of huge booms, spectacular lights.

• Highly unlikely: Something bigger, say baseball sized.  Action: Watch CNN,  Skip Bloomberg except to see how far down the Dow futures are.

• Very unlikely: Something Refrigerator-sized.  Action: Watch CNN for the missing city/region.

• Extraordinarily Unlikely: Something Bus-sized or that's non-reflective.  Watch CNN as previous world ends and the Nuclear winter scenario begins.  Nomads forming up, Texas is at the edge of the new North American Glacier.

• It won't matter Unlikely: Two-three bus-sized objects, or rail car sized non-reflective object.  Action: More TV. Extinction level event.  Chip into a stone before freezing to death how long CNN stayed on the air. Afterwards, watch DVD's till fuel and food run out. Save 2-shots of rum for final toast to Universe on way out.

The capper from my friend: "Any reason you think NASA or TPTB would tell the world in advance if something bad really was going to happen?"

Good point.  So, while my friends who are watching things worry themselves into a knot about the incredibly small chance that something could happen (way out on the ragged edge of measurable probability), I did do one thing yesterday because their point about candor in government wasn't lost on me:  I filled up the propane tank.

Not that I think the world will end on the 11th, mind you - we are as likely to have a three-way nuke toss with China and Russia over Iran tomorrow.  But, I figure the price of propane is worth placing a small bet on.  So, I filled up our big tank (500 gal) putting in 240.1 gallons at $2.61 a gallon for somewhere north of $600.

I reckon if the world gets socked with a nuclear winter, we'll be warm until the food runs out.  And, if my friend's worst fears don't materialize, my fears run more toward $200/barrel oil and $6 propane by year end, so the propane is effectively buying a 12-month call on $2.61/gallon propane.  A reasonable investment, I expect.

Still, if your Army unit gets called up next Tuesday (or starts digging long trenches), or your local billionaire buddy heads to a cave, let me know, would you? Government's been buying up freeze-dried goods like mad...

Soaring Gold

Gold is off on a tear again this morning, exceeding recent highs and over 25-year ago levels. The conventional wisdom is that gold is reacting the "growing tensions over Iran and high oil prices."

Have you ever heard such clap-trap?  Look:  Inflation is running at 9% internally, so if you want to forecast the year end price of oil, all you need to do is figure out how much 8-9% inflation will add to prices by the end of the year.

Today is 5/3.  So by 1/3/07, at the present (most recent) 8/10th's of one percent per month rate, things will be 6.58% higher than they are now (at the 8% inflation rate) or 7.43% higher at the 9% annual rate.

Year End Current Rate	Oil	Silver	Gold
Today's High	74.61	14.6	677.3
8% Inflation	$   80.58	$   15.77	$ 731.48
9% inflation	$   81.32	$   15.91	$ 738.26
10% Inflation	$   82.07	$   16.06	$ 745.03

Personally, I don't see the powder keg (Middle East Messes/Petrostan) remaining anywhere near stable, so you can throw in whatever multiplier you want. When or if that blows up, again, we'll have the first nuclear winter all snuggled and warm.  (The second one is bothersome, but let denial rule, will yah?)

Will gold and silver replay copper? My friend the Gold and Silver trader figures that at the beginning of 2003 copper's high was $.7915.  Today, copper is $3.3950.  Hmmm, a 4.28 times move.  Now, if I apply that to $677.3 gold, that'd be $2,898 gold and $62.48 silver.  Personally, I expect silver to best $100 shortly thereafter, as that would be the inflation-corrected echo of the $50 all time high in the 1980's...

Iran Mania

Seems like every paper/news outlet in the country is warning about what's to come with Iran. The Boston Globe's pages this week trying to draw a (weak) parallel to the policy of appeasement prior to WW II.  Missing: Any suggesting that the US might actually be the aggressor and the rest of the world appeasing us.  I don't think Iran has its troops on foreign soil, but unlike the US, they do have troops on their own border.  (Hint Hint.)  As I recall we're in about 140 countries and shooting in something like 60.

I've taken to reading the Chinese media more lately, because they have us by the interest rate goanies.  Their take on Iran:  UN considers things today.

British Budget Silly-Think

We read how British Home Secretary Charles Clarke is out with a deportation policy in which he says as soon as prisoners in the country illegally serve their sentences, they will be toss out.

Now think about this:  You sneak into England, commit a crime, and then get a trial and x-years of free room and board before being sent back to whatever third world hell hole you crawled out of.  I've only got an MBA, but wouldn't it save the Brits a lot of money to just skip the trial, skip the housing/feeding on public funds and just send the nerdowells back to the hellhole as soon as they are discovered as perps.  Saves court, saves meals, and sends them to someplace worse than England. 

Tuesday, May 2, 2006

Fat Lady Backstage

While the CONventional view is that the economy is humming along just fine, helped by construction spending, the dollar had dropped Monday to a one-year low against the Euro.  This means, by simple extension, that the price of gold (priced in falling purchasing power dollars) will be going up.

To remind you of the Big Lie about inflation:  Prices don't really go up.  The purchasing power of your money is being watered down by the government and corporations in a deliberate bankster game. Shhh....don't let on that you know the con...$100 in 1913 when the bankster con really got rolling (Federal Reserve, Income Tax) is the same as $2,045.45 today. That's 20:1 dilution of purchasing power.  If the pending dollar decline drops the buck in half, that would push us to a 40:1 decline in purchasing power.  Neat, huh?  Well, at least if you're a bankster.  Speaking of which...

INTERESTting

So here's how things play out: With the international currency disaster on the event horizon, Printer Ben Bernanke's comments on interest rates, which we have been telling you are going up more - possibly a lot more because of our 9% inflation rate [the government is watering down your money that fast] - put the kybosh on the market happy talk yesterday.  And then there's China's recent rate move, which the IMF is applauding and calling for more of the same.  I've been telling you since early December 2005 that we will get to 6.5% inflation (TTM basis) before we collapse... 9% annualized wage inflation and a net negative savings rate is not the stuff of Nirvana (more like Nine Inch Nails...).

Counter Point Tuesday

Sometimes, just reading the headlines, I get a sense of just how seriously out-of-whack the world is by doing an exercise called "Headline Matching".

Let's begin with Darfur, where the US is sending in one of Condi Rice's key players to work on negotiations.  There, we have a war over food and oil going - and talks essentially bogged down. But while we have oil and starvation going on in Africa, we read as a counterpoint that meat producer Tyson Foods experienced a financial loss because of the recent protein glut in the US.  If you're counting: Tens of thousands dead and 2.5 million displaced by the Darfur crisis, figures Time Magazine.

Oil Go Round

Elsewhere, the oil and energy grab by industrial powers goes on.  The Iranians are saying that there's a large possibility of an attack on their country. Obvious enough.  And, quite naturally, oil was above $73 yesterday and today it's over $74.  As measured by WateredBucks.

The counterpoints to this story are many.  First, we see the republicorps latest hold-up of the lobbyists has apparently paid off: as the republicorps have reversed course and are now backing off their photo-op spin that they were going to "by God do something about oil company profits".

My butt. Am I the only one to remember the phrase "Lobbyist reform?" Another CONgressional spin-and-run.

In a great little sidebar about how "little people" are trying to stave off corpgov dominance, we read how Bolivia is nationalizing their natural gas industry.  Indigenous people's want a bigger piece of the pie than corps want to share. How dare they!  They are, after all, just Bolivians and just residents on the land - their not shareholders, right?

Not that any (peak) oil talk matters to polar bears though, or 16,000 other species about to go extinct from greenhouse gases (think cars and jets).  Too late.  So sorry. It's OPK,. humans are immune from die-offs, or so you'd better hope.

Just when scientists figure out that biodiversity and evolution happen faster in the tropical rainforests (duh) countries are rushing headlong to cut them all down as fast as possible. And, disappearing trees are a big deal in Africa these days, not that you'd care, but thought I'd mention it.

In New Jersey, the answer to deforestation talk is shooting more deer.

Worker's Rights

The Global Press seems to see the "Day Without Immigrants" (Monday, in case your life was normal , as mine was) somewhat as we do - a growing rift between corporate masters and just regular folks.  Lou Dobb's coverage was even-handed - enough to make both sides bristle.

In the Dominican Republic, the US National Anthem in Spanish (Our Himno) is rather evenly reviewed - a little different take on Middle America's feedback sites, such as the Wichita Star's site.

Off in Doha, the World Trade Organization is still trying to divide up the world's lowest priced workers on behalf of corporations.

Puerto Rico Basically Broke

Or at least close enough for headline writers as the state/island/nation (what is it?) is in the midst of a budget mess. Yeah, I know it's a commonwealth of the US. But that doesn't make us a colonial power - no sir, not the USA.  We use that label on evil doers only.  Hey you don't think...naw...

Dick in the Bunker

It's all secret - things that used to be publicly accessible - all going secret. Can't trust the plebes with too much information, now, especially in a "democratic republic."  The Bush administration is classifying things as fast as they can...or is that a secret now, too?

Tech Diversions

Workers versus corporations?  Rich versus poor?  haves/Have-nots? Try to put these messy subjects out of your mind for a moment or two and let's talk tech stuff:

My friends in the entertainment/music business used to take delight in rubbing my nose in all the glitches with Microsoft's operating systems.  Now, comes my turn to rub their noses in reports that there's a sharp increase in flaws being reported in Mac OS X.  Neener, neener, neener.

Samsung's new "ultra mobile PC" (Origami) is just the thing if you need to walk around with a PC everywhere you go. But, if you're looking at one of these new sparklies, the Hindustan Times reports a new study says too much time on the net can induce self-destructive behavior.  Like day trading, or options trading, maybe?

Comets Closing

While officially, astronomers are not worried about Schwassmann-Wachmann 3 because it will only come within maybe 12-million kilometers of earth, we're wondering what else is out there aimed at us. Near earth asteroid discoveries have been going up a lot.

So there you go - a nice assortment of things to worry about today that you won't be able to do anything about.  Now, stop surfing the web and get back to work on preparing for the future of your family and loved ones for the really ugly stuff coming this fall.  And don't forget the food and water for this summer's big quake series.  And some ammo for the conflict this fall.

Server Issues

As you might be aware, my hosting provider www.hosting.com/ www.halfpricehosting.com has not been able to figure out how to keep my site up.  I'm aware of the problem and they are (still)  working on it.  Thanks

Monday May 1, 2006

i-Bond Madness

From the Treasury Department site: Yup, i-Bonds aren't gonig to keep up with any inflation we've been seeing lately:

The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which will apply for the life of the bond, and the inflation rate. The 2.41 percent earnings rate for I bonds bought from May through October 2006 will apply for the first six months after their issue. The earnings rate combines the 1.40 percent fixed rate of return with the 1.00 percent annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 198.8 to 199.8 from September 2005 to March 2006, a six-month increase of 0.50 percent.

Treasury’s inflation-indexed I bonds are designed to offer all Americans a way to save that protects the purchasing power of their investment by assuring them a real rate of return above inflation. I bonds have features that make them attractive to many investors. They are sold in electronic form in amounts of $25 and above, or in paper form at face value in denominations of $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000, and earn interest for as long as 30 years. I bond earnings are added every month and interest is compounded semiannually. They are state and local income tax exempt, and Federal income tax on I bond earnings can be deferred until the bonds are cashed or they stop earning interest after 30 years. Investors cashing I bonds before five years are subject to a 3-month earnings penalty.

The previous - and believable rate was 6.73%

i-Bond Rip

Still skeptical of inflation numbers?  OK, try on this email from a reader just in today:

"i-Bonds, supposedly tied to inflation, have been paying 6.73% Since November 1, 2005. They have been very popular With the small savers, of which I am one. As of today the New rate for the next six months is an astonishing 2.41%!!!! And they cannot be redeemed for a full year from date of Issue!

The new rate is way below even the government's lunatic Inflation rates. What a stab in the saver's back!!

Please warn your readers about this rip-off. (Even the low Yield EE bonds pay a higher rate.) "

So, do they know something we don't?  Like the bubble market's going to burst, or is this just "economics" at play ripping off the small guy  [again/still]?  You decide...  Anyone at Treasury want to explain this one to us?  Even off the record/without attribution?

Wage Rate  Up 10% - But look, Ma - NO SAVINGS!

Wow - a blockbuster report this morning on the Personal Consumption and Expenditure rates from the Bureau of Economic Analysis.  Their report puts wage increases at 8-10ths of one percent for the month of March - a whopping 10% annual rate.

While the markets will no doubt call this "good news" on initial spin, the reality shows up on page 4 of the report - people can't save a dime!

"Personal saving -- DPI less personal outlays -- was a negative $32.5 billion in March, compared with a negative $58.3 billion in February. Personal saving as a percentage of disposable personal income was a negative 0.3 percent in March, compared with a negative 0.6 percent in February. Negative personal saving reflects personal outlays that exceed disposable personal income. Saving from current income may be near zero or negative when outlays are financed by borrowing (including borrowing financed through credit cards or home equity loans), by selling investments or other assets, or by using savings from previous periods."

Now, carefully think back a couple of weeks ago, when I told you inflation was running at an 8.7% (using the "old weights" system at the Department of Labor's Bureau of Labor Statistics.  I told you then, and I will tell you now - with these latest numbers supporting the case - that inflation in America is now running at 10% - and will no doubt go up as gasoline price impacts propagate.

The People's Economist will make it very simple for you, in the event that your coffee hasn't kicked in yet:  "When wages going up 10% still results in a negative savings rate, then inflation is going up at something approaching 10%, too!"  Damn, that's simple. 

Welcome to the Argentina North. Watch metals continue their romp.

Provocateur's Day?

With the big May Day demonstrations in support of immigrant "rights" (I'm not sure when ignoring the laws governing entry into these United States became a right...) my biggest concern is that with all the large crowds, some agent provocateur from the Powers That Be will show up and we'll have some kind of "incident."  So, watch for that as it would drive markets.  The demonstrations would be an ideal place for any "hidden hand" to pop out of the woodwork, do something that will drive future events in the desired direction, and then sit back and watch the people on both sides snowball into large masses.  With the www.halfpasthuman.com web bot project hinting that events of May will be a foreshadowing of events turning toward "conflict" August 31/Sept 1, nothing would surprise us less than some kind of confrontation/provocation in today's events.  So if it happens, don't be looking at the proximate cause, see if you can spot the "hidden hand's agenda."

Southern California Latinos are being urged to arm themselves say reports.

As a country we've been down this road before with a "one time only amnesty" for illegals in 1986.  (In the back of my mind, I keep thinking "Fool me once, shame on me...") I guess you're not supposed to remember such things, though.  PC don'tcha know.

I was talking with Panama Bates last night and he made an interesting observation about the "union of poor people" that is taking hold and reportedly flourishing in Las Vegas.  In a sort of echo of the 1930's, immigrants in Vegas are, he reports, Latino immigrants are banding together for job protection.  A "union of the poor" is an interesting notion, that is, if you're not one of the "chosen few" into whose hands the concentration of wealth is falling.

One of the most ridiculous ideas floated by the believers in mythical "Aztlan" (has a Kennedy/Camelot kind of ring) is that we should adopt a Spanish language national anthem!  What the hell are the socialist/corpgov people thinking (OK, if at all....)  Try singing a the Chinese national anthem in English and write us from a prison camp...or for the even more brave, try the Iranian national anthem in Yiddish.  I'm sorry, the world must have gone nuts when I wasn't looking.  The Salem Oregon Statesman Journal figures this crosses the line, too.  Say, you don't suppose there are a few patriots in Oregon, do you?

As Stephen Lendman wrote last week in "The Corporate Control of Society and Human Life" "The lesson is clear. Mass people actions, if large and strong enough, get results. Lots of great thinkers through the years knew this and said it many different ways. I quote some of them often for inspiration, and I'll end by doing it again - 2 jewels from one of my favorites - the Mahatma. Gandhi wisely observed that "even the most powerful cannot rule without the cooperation of the ruled." He proved it. He also famously said - "First they ignore you, then they laugh at you, then they fight you, then you win." He proved that too. "

Still, we reasonably expect that much of what is happening has to do with corporate control of natural resources and the promotion of the vicious lies of 'free trade."  The so-called "free trade" agreements have done little for exploited peoples and have enabled corporations to jobjack American jobs overseas, while lowering unit-labor costs -  something that has not escaped the notice of Venezuela, Bolivia, and Cuba, which are working on revised trade concepts to deal with cannibalistic corporatism.

So watch for the hidden hands, staging photo-ops to move your thinking.

Hijacking Government

I happened to watch the Bush-on-Bush comedy deal at the Washington Press corps dinner Saturday night.  He was pretty good, actually.  On the other hand, nothing funny about his challenging hundreds of laws passed by CONgress which has been trying to rein in the Decider.

Another Way of Looking At the Dow

In case you didn't see it, at iTulip.com there's a report that shows about the same thing as my "Inflation Adjusted Dow" shows - namely that the market peaked in 2000 and has been quietly tanking since.  Maybe if you read it in several places you'll believe it more than if you just read such things here.

Worthy Read

If you have a second cup this morning, you might want to read Michael Ruppert's speech from the "Local Solutions to the Energy Dilemma Conference" in New York.  One reader accused me of ghost writing it, but I didn't.

Instead, I was too busy this weekend (when it was too dark to drive the new tractor around) writing an new piece of music -  I call it "Mogambo's Theme 2" which, as you can hear, was not too successful.  Right click the link and use the "save as" option then play it on your computer with the sound turned up. 

Peak Oil Talk

Should be some interesting coverage later on this week about Shell Oil's plans for finding new oil resources.  You may remember that Shell has been more candid than most companies in talking about the reserves issue.

There has been some speculation that a spike to $100 oil may be possible.  My sister's incredibly happy with her now 2-year old Prius - and getting happier as each oil price report comes in.

Although we've heard that the new Iranian oil bourse would open this week, the most recent reports make it sound a bit further out than now.

Super-size Us!

Good article out of a recent WSJ detailing how appliances are going "super-sized."  Wanna bake two turkeys at the same time?

Farmer George

Due to the server problems, I didn't get the picture of me and my new orange steed up this weekend, but here I am, mounted on the fearsome beast:

OK, maybe not fearsome.  How's about useful?

Ham Radio Story

So there I was Sunday morning, driving in to Tractor Supply for some farm things and I turned on the 2-meter ham rig.  "AC7X monitoring..."  Quickly, a nice female voice responded and we had exchanged pleasantries and the woman signed "/mobile."  I finally got around to asking her is she was running a handheld radio as it sounded a little on the tinny side.  "Oh, probably just the background noise, I'm going 110," she admitted.  "Let me slow down to 90, and see if that helps."

Well, she slowed down, with me wondering what kind of woman drives at 110 and slows to 90 while calmly talking on a handheld?  Hmmm.

"What kind of car are you in that's so noisy and where can I drive 90?" My curiosity got the better of me.  "Oh who said anything about a car?  I'm aeronautical mobile," came the explanation.  Turns out she was just out for a drive in her RV-4 and just up for a spin. Such are ham radio folks.

Desperate Acts & The Real Y2K Problem

From this week's report: While most people concerned with the Y2K Problem believed that it had something to do with computers, it is starting to look more and more like the real Y2K problem was that the stock market reached it's latest all-time-high in January of that year on an inflation-adjusted basis, and that things from here on it are starting to look like an "upside down cake" version of the 1930s. But not everything is upside down, just enough things to really throw the average student of history off the scent of the 1930's being replayed right here in front of your nose. As I'll demonstrate in a moment, the "upside down" items include things like labor, while the "right side up" items include things like intellectual property protections.  More for Subscribers.  Subscription information - Just $30 /year.

Tell Your Friends

With all the site down time this weekend, I would appreciate it if you would tell your friends about this site.  The outages have had a major impact on readership/traffic.  Curious, don't you think? Anyway, click here to pass the word.

Save Money

Our "How to Live on $10,000 a year or less" continues to sell well in our http://www.peoplenomics.com./bookstore.htm bookstore.  No wonder: $10 is all it costs and most folks save thousands.

Server Issues

As you might be aware, my hosting provider www.hosting.com/ www.halfpricehosting.com has not been able to figure out how to keep my site up.  I'm aware of the problem and they are (allegedly) working on it.  Thanks

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On to Our Chart!

I only put up one chart a week as my "freebie" site. There are several more weekly charts including our Global index, the Dow of today versus the Dow of the 1929-37 era, and how program trading is going.  To get these charts plus the very serious minded weekly analysis piece, please look at subscribing to http://www.peoplenomics.com/subscribe.htm for the low $30/year cost.

Write when you get rich,

George Ure, The People's Economist

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