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"What is it about our collective decision-making process that has led us to this state of affairs where we spend much more time in the public forum talking about -- or receiving information about -- Britney Spears shaving her head or Paris Hilton going to jail?" Gore asked. "

Reports here at UrbanSurvival, posted daily except Sundays, try to avoid the 'cult of personality'  coverage that passes for news anymore.  Instead, I try to follow a hierarchical approach based on taking Maslow's Needs Hierarchy, focusing on physiological and safety levels, with a healthy does of economics and doing keyword searches off that.

Maslow's baseline physiological needs include air, water, sleep, body temperature, what might be thought of as environmental balance, food, waste, and sex. Next comes physical security, employment, revenue streams, a sense of morality, family security, healthcare, and defense of property.

Each of these can then be turned into an assortment of http://news.google.com searches. 

Take the first need - air.  If you put in a term like that, all by itself, you will find airline, airplane, and lots of other stories.  Down at the archetype level, what Maslow was referring to was about life sustaining Air, which in turn can be factored out (linguistically) to things like "air pollution" where we notice that a coal plant in Montana is making headlines and folks in  California are talking about banning diesel construction equipment in efforts to reduce air pollution.

Related searches like "breath" reveal that Star Wars was 30-years old on Friday, and the search "breathing" reveals that cemeteries, trying to bolster their income, are doing things like themed dinners for the living / [still breathing] market.  That's a curious thing to find.  The stories about holiday traffic causing breathing problems is more expected.

That's just one of the searches; the next one has to do with water.  Not the kind that ships float on, but more to the archetype related concepts like drinking water, thirst, and dehydration.  Sampling here, we note that Ontario has problems with lead pipes that might be leaching chemicals into the drinking water, swimmers around Pineville Kentucky apparently try to sneak a swim in the city's water supply lake, and some folks in New York are worried about PCB contamination from a PCB dredging project.  On the related search "thirst" we note Coke's purchase of Glaceau this week to buy market share in the specialty water business.

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That's just a "starter kit" of how to build your own system for gathering information which can personally impact you.  There are other ways to do it, using Maslow is not the be-all, end-all.  You could geographically orient your searching and start with your neighborhood, then move up to city, county, state, and country levels.  Or, you might, and I do around here, focus on financial development, using the available frameworks money/financial/oil/precious metals/banks and so forth.

If you're in a profession which demands 100% of your focus, a tightened news regimen of "terms related to my profession" and "stories that might impact my work" would be appropriate (although narrowing in human terms).  Say you're on a CRM implementation team - the searches might be related to computer developments and travel as they relate to your project.

The point is very few people consciously develop a custom tailored strategy to derive the information they need to function well.  Instead, they sort of surf what comes along.  It's like schools in the world are willing to teach you things like "Advanced C++ database interfacing" or "Psychology 403" but where's the course track for "Personal information sourcing" and "Worldview framing"?

Storks and families of ducks aside, there's a battle for control of Ukraine going on, that's of extreme importance to the West.  It's looking more and more like a showdown between the president of the country and the premier.  There are also calls for the military to be faithful to its oath to defend their constitution.

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A reason to watch the Ukraine so closely is that the fundamentals of the situation could be taken as a more intense version of the forces building in Washington - where the administration has increasingly been seizing power without the consent of Congress.  We'll be paying close attention.

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George Bush has signed the latest war spending bill, amidst reports the White House is trying to figure out how to cut 50% of the troops in Iraq in 2008.  Not so much political pressure from the war, but how to keep from having the republicorp suffer horrific loses of power/control in the elections in 2008.

Sometimes, I think the best "reality checks" are provided by readers who send in comments.  Here's a selection from this morning's mail.

"Hello Mr. Ure:

I've been reading Urbansurvival from within China for almost two years now. Your recent take on the five W's of how the next Great Depression will begin was spot on the money, especially how it will start in China.

Having lived in China for the past four years now, I have been witness to some bizarre stuff. The most bizarre is how average Chinese people don't seem to understand basic economic principles that even an eighth grader in the U.S. or Canada is aware of. And I am talking basic things like knowing how supply and demand affects prices, how inflation can influence buying power, interest rates, balancing personal budgets, asset appreciation and depreciation, global interdependence, and how stock markets function. Their ignorance is what will set off a global chain reaction as they begin to panic and sell-off assets at the first sign of any market downturn.

I could cite hundreds of examples of basic economic ignorance, but will only mention the two I think are the most important.

First, many Chinese people just don't get the idea of bust and boom. I am simplifying the notion of cyclical fluctuations down to the level of an eighth grader, I know. I have tried to explain "bust and boom" to many Chinese friends without success. They are of the mindset that since China's economy has prospered since Deng Xiao Peng implemented his "opening and reform" policies over twenty years ago, that it will always do so. In their experience, house prices always go up, stock values only increase, and even the dumbest businessman will turn a profit.

Average Chinese people are buying bigger places to live with borrowed money, putting money into the stock market, and starting risky business ventures. They are sure that the sky is the limit. They plan what they will do when they flip the house for more money than they paid, or sell that internet company stock before it bottoms out, or rake in the profits by exporting widgets to the U.S. They never foresee the possibility that they might lose money when there is an economic downturn, because they have not lived through one in their adulthood. They believe that their country is somehow immune to the same forces which are at work in every economy in the world. Boy, are they in for a surprise!

Second, Chinese kids don't sell lemonade at roadside stands in the summer, they don't get paper routes, they don't hold bake sales at school, they don't hold fundraisers for a school trip, they don't get part time jobs, they don't do household chores to earn a weekly allowance, and they never collect milk money from classmates. Their parents never did those things either.

As a result, they don't understand ideas related to division of labour and compensation (not that I really do either). A 30 year old who has never held a job a day in his life (not even a part-time job) and continues to live at home with his parents while collecting scholarships so he can study to get his PhD is respected more than a taxi driver or waiter who works 12 hours a day every day of the week (It would surprise you how many 20 to 30 year old students who have never had a job there are in this country!) The higher the level of education a person has in China means higher pay for doing a job inefficiently which they are seriously over-qualified for.

As an example, an MA degree is the preferred degree for a teller working in a bank here to have...regardless of what their major was. In the U.S. a teller would most likely have a high school diploma or some community college education related to business. The division of labour in China is seriously screwed up with the highest rewards actually going to the laziest over-educated people. Meanwhile the hardworking cleaners, farmers, and factory workers earn a pittance and gain little respect. Such a system is breeding resentment. It's there and its growing, and most of the people who are currently benefiting from China's economic growth don't sense it or are ignoring it.

I see the resentment painted on the faces of hardworking folk everyday as they eye the toys of the rich (cell phones, cars, laptops etc) and take more abuse from the spoiled nouveau middle class. But, hey, I am a foreigner in China, I can see things that Chinese people don't because they don't have the same life experiences I do.

Your recent analysis meshes with what I see coming down the pike. The fact that one of my Chinese friends, a financial advisor for a leading Chinese Securities firm, told me he expects a downturn to come soon to the Shanghai market confirmed my feelings. He recently sold all of his stock holdings except for Class B Shares in Chinese Banks. He then told me if I had any Chinese stocks to unload them sooner than later.

I think your prediction of September for things to start may be on the late side. My friend is in the know, and from the what he said he believes things will happen sooner.

Love your site George. Keep up the good work.

Another email offers a perspective from North Carolina on how the economy is doing "in the real world" e.g. the one beyond the Beltway:

"Charlotte, may 2007. Most of the illegals have gone, I have work and this may be the best year I have had since 2001. I expect to make $10,000 before taxes, not much, but I will feed myself 2 meals a day this year, quite an improvement but next year does not look good. I am working for people that have for the past 5 years been telling themselves that the economy is great but have realized no improvement in their situation. This year they are "squirreling", a term that I have used to describe people that are acquiring nuts for the cold, hard winter ahead. I don't know if they realize it but they are hunkering down, consolidating on every front in order to save money and hold on to what they have.

Real estate here has slowed, some building going on but not like the past 4 years. Homes are for sale and sitting for months, it appears that there are no seekers as open houses go wanting for viewers.

Employees want to cut a deal, they are concerned about their jobs. Self employed want to spread what they can, because that is their understanding of economics, still they are concerned. They are working from experience, realizing that there is contraction as well as expansion. But my sense is that this time is different and frankly I think that they too sub-consciously think that something is different.

We are a banking city and bank employees are concerned. Branch banking has changed so much in the past 2 years. You can not go into a bank and find someone that you have done business with before. Tellers and loan officers that were a regular at your bank are gone. In place, bank officials that do not know you and do not care about you, your finances or your history with the bank. Courtesy is not offered nor exercised. Illegals are given preferential treatment, citizens are the inquisitors delight.

No courtesy, no empathy and no joviality. I have been to wakes and funerals with more humor.

I have an old friend 30+ years ago with one of the banks, high executives responsible for security in the case of an epidemic or other catastrophe do not want to know what they are responsible for and do not want to be listed as being responsible. They will not cooperate with protocol to demonstrate that they can or will do their job when called upon. Not a comforting scenario.

Obviously something is afoot. As I watch congress and the president it appears that a great fraud is being perpetrated on those of us that have made this country great and that we will not be allowed to participate in any way that may benefit us.

Wealthier clients pretend things are not as bad as they seem and that congress will take care of it all, yet in moments of weakness they admit that something is not right. I suspect that they realize that their money will offer them some protection and I am sure that it will.

I am holding my breathe.

My perspective here and now. Good luck to us all.

Amen.  One more?

I have emailed you before, I skimmed your comments on the abysmal congress and King George. You have an angry tone today which doesn't normally come through. By coincidence, during the past two weeks I was helping my 6th grader with a model UN project, her topic was the Nuremburg Trial. Well if you want to feel really hopeless, start off your bedtime reading with the Geneva Conventions, Brand-Kellogg Treaty and most of all read Justice Jackson's Report to the President on Atrocities and War crimes: June 7,1945. No better, read them in broad daylight better to chase the demons away. I won't quote any of it here, I leave it up to you, but the web site is www.yale.edu/lawweb/avalon/imt/jack01.htm  perhaps your readers would care to look it up. By the way, after showering all this wisdom on my 11 year old what stood out in her mind was a tidbit from the life of Goring, that he had burned down the Reichstag ( "and did you know people died?") and allowed others to lead Jews into the woods. shoot them, and bury them, some of them alive. What will tomorrows 11 years olds remember of our leaders today? (although today, my 10 year old wanted to know which was worse- how the Nazis treated the Jews or our country's age of slavery. I had to think about that one. ) It is very discouraging. I have written to my congressmen, signed the appropriate petitions and am fairly centrist in my views. I truly don't understand why the whole administration isn't on trial. It is frightening that the government is truly ignoring the will of the people. and don't think that a pirate movie is really going to make anyone forget about what is going on. Things are too serious.

By the way, I wasn't particularly angry this week - just frustrated, I guess.  Millions of patriotic Americans voted for change in the last election, and yet the war goes on, same as before, government is still selling off prime real estate (like highways) to private interests, and private militaries are on the rise. And more power is being seized by the elites. 

I think frustrated is a better description.  When we see Alan Greenspan warning of a serious contraction from China ahead, and we see the dollar being debased, it's hard not to be frustrated.  I think that's why today I will gear up (goggles, dust mask etc) and do more battle with plywood for the office.  That's for sure why Cliff over at www.halfpasthuman.com is looking for a "project sailboat" - there's something uniquely American about when times get bad, we just go do things.

I guess that's the nature of recreation - and perhaps over the weekend, we'll all chill out a bit.  But hanging over our heads is next Tuesday when it's all back to work again.  Like the lady said in the email, it's not like watching a pirate movie will really fix anything.

Reducing Personal Impacts of an EMP Event

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Friday May 25, 2007

Holiday Mindset Sets In

Today's report is short and to the point because, with most of us taking off from work a little early - to get a head start on everyone else who is taking off a little early - there's much to be covered in little time.  Today's economics report will try to stick to the highlights because the BIG stories, like the Bush Executive Order granting himself dictatorial powers in event of anything he deems an "emergency" has already been covered earlier in the week - and the abysmal behavior of CONgress on both the War Funding bill and the immigration  reform/ felony forgiveness plan has already gotten us to wondering about the reason for even bothering with Memorial Day's patriotic history.  Seems so damn distant.

This week also saw - in my view - two presidential wannabe's showing us presactly why they don't have the leadership skills to be President of this Great Nation.  I note that with both Hillary (God help us No) and Obama (him either) doing a big show / grandstanding of voting "No" on the war bill, but note that between them, they didn't get the bill revised to put in a pull -out date, so clearly they don't have enough influence to run the country.  Or, am I missing something?

Interesting article in the Daily Mail today about the possibility of an attack by cyber terrorists - as just one more thing to worry about - but if such occurred, given how corporate-controlled via proxy government works, I'd suspect government more than hackers. But enough of this dismal kind of thinking - we've good important stuff to go over this morning.  For example...

House Prices in the Hamptons

At least if you have a choice beachfront piece of property in the Hamptons, you can still make a buck, or so.  Here's one going for $103-million.  Not bad for a patch of sand.

OK, so home prices are still falling in many parts of the country - and so there's angry talk starting to surface on the net about when do Americans take back America from corpgov and corpmedia - Neatly fulfilling the web bot project linguistic predictions of talk of rebellion and revolution in defense of the Constitution.   Sadly, the rich still run everything of importance and just because you got screwed by a predatory lender, that's not going to bring down the rich.  So sorry. 

Maybe you ought to go read "The Global Class War: How America's Bipartisan Elite Lost Our Future - and What It Will Take to Win It Back "  Iacocca's book on missing leadership is a good read, too.

Hand Wringing

The Financial Times reports today that the US has growing fears about China's build up of long range missiles.  Sure, why not?  Has everyone but me forgotten that Bill Clinton sold them the super computer technology and that 3/4's of all consumer goods are from China (and Mexico)?  Give me a break, here.

Bring On the Weekend

The biggest economic event of the long weekend is likely to be Johnny Depp's opening tonight of Pirates of the Caribbean 3 - At the World's End.  Can it do $200-million opening weekend?  Seems a fair bet. If Pirates isn't your deal, maybe Oceans 13 will be.  (Hard call for me, too...)

People read the headlines, and in true bread and circuses fashion - want diversions.  The Bush administration and CONgress should give Johnny Depp an award.  Fun diversions keep a lot of people about taking a serious look at the continuing shenanigans and failed promises that spew like so much 'you-know-what' from the District of Corruption. Watch Pirates instead of pirates, as it were.

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Gee - straight talk from the patriot's heart.  No wonder the White House is setting up a "Rapid Response" group to tackle blogs on the internet.  You apparently can't handle too much truth. Don't mind that "protect and defend from all enemies, foreign and domestic" part of that "piece of paper."

Oh, by the way, just like Depp's movie, the pirates seem to be winning.  This Memorial Day, try to spend a few minutes remember what's worth fighting for.  Dissent, free speech, equality and oh, oh...see you in the camps.

Thursday May 24, 2006

Depression II:  6W-1H

If you were going to place a $5 dollar bet on when the whole could would wake up to the facts of Depression II, or even betting your whole life savings (which you are, whether you are aware of it or not), you couldn't do better than this bet.  The first 5W's are, as any good reporter knows, are Who? What? When? Where? Why? and the H stands for How?  I'll get to the 6th "W" in a moment.  I'd outline the rest this way:

• What?  Sets off Global Primary or Secondary Depression (We can debate that this winter)

• Who?  China

• Why?  These things are cyclical and to hold them off simply makes them bigger.  John Law and the South Seas Bubble will have nothing on us this time.

• When?  September 2007 --  this year - four months out

• Where?  China first, then globally within a month to 90 days.

• How?  Massive crash of investor confidence, market panics, leading to regime change pressure in China.

While I touched on the risk of a China financial debacle lightly in Monday's report, it seems that Alan Greenspan is now thinking something similar because he is quoted as saying that China's stock market could face "a dramatic contraction."

It's rare enough that I would agree with Greenspan on matters like this.  I stopped believing in him as a financial deity about the time he gave up supporting at least a partial gold standard, and effectively started his own Inflationist's Hall of Fame.  I believe that deliberate central bank inflation is simply a government and bankster scam to tax honest savings out of existence and to push the economy into un-necessary consumption at a huge long-term cost to humans (and the environment, in case you haven't noticed). 

Fortunately, there are more believable analyses than Greenspan's or mine.  One of them has been authored by Thomas Au under the title "Why a Chinese monetary tightening could be followed by a Global Depression."  My fear on the China risk assessment is that Greenspan, Au, and a lot of other deep thinkers, could actually be right this time.

Now, about that 6th "W" - That'd be Chinese Vice Premier Wu's visit here.  Lawmakers (or lawsellers, if you read enough about influence peddling and PAC money) not satisfied with how they're doing with US internal and international issues are now calling for "New Measures Against China During Wu Visit."

Meantime, China has problems as the US is starting to check all shipments of toothpaste coming in as people in Panama and the Dominican Republic have been poisoned with tainted Chinese toothpaste.

China, though, while all this is making headlines, is doing a fine job of quietly exercising "soft power" by doing "good space deeds" for countries which have resources they either need now, or might need in the future. Hu would have known.

WOT Outcome

The "War on Terror" is having other outcomes than expected. For example, Amnesty International says the "War on Terror" is dividing the world, but I think that's what it was intended to do.

I'm also sure that more than a few liberals were surprised that  both Darth Vader and Hobgoblin were actually rated worse than Dick Cheney in Amnesty's tongue-in-cheek poll  but please keep in mind that poll loading is script-kiddie/alphabet agency simple and you'd be a fool to trust an online poll.

Immigration Debacle

In Washington, more words on immigration but little else.  Oh, except the latest sales pitch might be "jail time for illegal border crossers."  Yeah, right, sure...like we don't have that law on the books right now.  Who are they trying to kid/How stupid do they think we are?

Then again, sadly, quite stoopid (sic) is the honest answer - after all, look at the elitists and aristocrap we're electing.  "Everyone out in '08! Vote No Incumbents!"  That's my new bumper sticker.

Shortages Hit High

I have to report another new high in our track of the word "shortage" on the Google News Search Engine - 23,431 when I checked today. That's double from a year ago. and this weekend, our subscribers-only publication, Peoplenomics.com, will take on "Laminar Flows, Angles of Attack, and The Shortage Meme"  It's a collection of graphics and thoughts on how shortages now evolving may be a leading indicator of how the global economy stalls out later this year.

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With the crop report looking good this week for corn, there's an interesting possibility of worker shortages. (Yes, this ties back to immigration, doesn't it?) Even more interesting (If you have some vacant land in Ohio and a few thousand yards of concrete and forms handy), is what looks like a coming shortage of grain storage facilities.  All those farmers in the corn belt may find there's not enough silo space and such to store a bumper crop.  Makes me want to set up a still...

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California can look forward to a shortage of educated workers in its future, says a new report. Driven off by (check as many as you want) housing prices, freeway gridlock, pollution, and what have you.

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Newish farming trend to watch: Community Supported Agriculture (CSA).

Oil

Quake Watch

A quake in the Gulf of Mexico yesterday (5.6) caught my eye yesterday - along with a 4.7 in the Gulf of California down off Cabo - A couple of 3.8-3.9's in LA this morning, too.

 

Adding to quake jitters is this morning's a of a "Russian Mine Blast Kills at least 35".  I always think methane gas explosions in mines are related to earth movement and we're in a window in here...

 

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Wednesday May 23, 2007

Showdown With OPEC

Driven by record high gasoline prices, the US House has voted to allow the government to sue OPEC over their oil quota and pricing scheme.  All of this has the potential to upset international relations in a major way, a point noted by the White House.  Nevertheless, the thinking in Washington seems to run to the idea that OPEC is a price fixing scheme and that is a practice which is generally against the law in the USA but somewhat permissible in other parts of the world.

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Something to keep an eye on now, with this kind of legislation pending, is how our "allies" in the Middle East react.  This week, for example, Kuwait announced that they would stop pegging their currency to the dollar (at a time when the US dollar has been showing strength for several weeks), but they are also being very careful to soft-pedal the importance of their move, saying the dollar will still impact rates.  Just how much is not being said.

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There has been some concern expressed that fuel supplies in the US (e.g. gasoline and higher prices at the pump) may push back downstream to oil - and it's on that basis that some reports are suggesting oil is firming today. An A.P. report offers that gasoline stocks are expected to be shown building in an inventory report due out later today, so keep your ear open for that.

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Oil money does interesting things.  With plenty of cash, people with more money than (fill in just about anything here), people tend to show their true colors.  Significantly, I think, we read this week how Venezuela's  Hugo Chavez has announced money ($20-million)  to back a couple of new Danny Glover movies. 

 

The thing that struck me, when reading about the deal, is the nature of the films involved:  One of the new Glover films will be about the life of South American liberator Simon Bolivar, while the other will be about Toussaint Louverture.  Both men play historical roles as "liberators" which from what I read, reveals much about the mindset of Chavez.

 

To take it a step further along the "liberation road", please note the rent acquisition by Chavez of a 49-percent interest in Jamaica's national oil company, Petrojam.  (Petro Jamaica).  Big news on "de islan, mon" is that the Venezuelans will be scoping out their new buy next month.

 

While it is true that much of Chavez's agenda has been based on the takeover of foreign oil investments, the point could be argued (and is by Chavez supporters) that all Chavez is really doing is standing up to the corporate forces of West capital, and in doing so, my sense is that he might well be trying to put something together along the lines of an EU/Caribbean's and South American power block for those countries north of Brazil which are ripe for corporate conquest/acquisition.

 

Speaking of which, the Pope's recent trip to South America has led to criticism for trying to rewrite the history of South/Central America.  And Chavez is on the First People's side of that one; bill by some as the imposition of a foreign culture on native peoples.

 

With an apparent steering star of First People rights, Chavez has stood up to the IMF and World Bank, has been on the local side of things like the natural gas and energy nationalization underway in Bolivia, and to back that up, Chavez has been engaged in a serious arms build-up which is difficult for the US to counter given the weakness of our forces depleted by the Middle East wars.

 

Where is this all heading?  The US may try to signal that we don't approve of collusion/anti-trust/price-fixing/ or out and out bribery as a way of getting things done, because it's not how we (generally) do things here.  On the other hand, given the Glover monies, the defense build up, and oh yes - strengthening local police forces to keep any foreign-back insurgency efforts at bay - I'd venture that Chavez is using the next n years while the US is occupied elsewhere to play the passing of Peak Oil to his regional advantage and fancies himself the Hugo Oilivar of that movement - a good or bad thing, depending on if you hold stock in oil companies having their investment's nationalized.

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While this "showdown with OPEC" idea might make a little political hay, the odds of anything serious coming from it are - in my view - pretty low.  OPEC doesn't operate overtly inside the US, but it sure looks and sounds good, and maybe it's part of the Washington tendency to try and provide full employment for lawyers. 

 

Body Found

We remain hopeful that the two remaining American soldiers missing and feared held captive (or worse) in Iraq will be found.  This morning, authorities have announced the body of one has been found.

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In the war itself, the democorps have pulled a troop withdrawal date out of the new Iraq War funding bill, bolstering my assertion that we really do live under a one-party system.  Both sides take checks from the same paymasters and it's not the grassroots of America.

 

George Bush, meantime, realizing there are no happy endings to this war in sight may turn to the UN in search of a solution.  What the rest of the world might well be asking is the old WIIFM question - "What's in it for me?"

 

Climate & Hurricanes

The national hurricane and weather experts are predicting a large number (7 to 10) named storms this year. 

 

Climate change continues to be a controversial subject.  The House has a committee looking at whether the Smithsonian Institution toned down a climate change exhibit to keep from rocking the boat on the Hill or White House.

 

Meanwhile, you might want to stock up on peanuts.  A report in Italy says that 51 wild peanut species could be extinct within the next 50-years.  Being allergic to them, I look at this as an upside of climate change, but if you are addicted to goobers, and you plan to have them for the grand kids, you will want to start saving seeds at some point. 

 

Not making mainstream headlines (yet) is that the highest carbon emission assumptions used in climate change study have already blown by - so the old assumptions are wrong - and things are likely to go off the rails much, much faster than anticipated.

 

Malaria for Montana?  Or, try this on: "Some Scientists See Link Between Global Warming, Spread of Infectious Disease"

 

Email of the Day

From a Canadian reader:

"Hi George,

I've been reading your columns now for a long time and although I find some of your prognostications way out in left field I am continually amazed at how accurate some of them have turned out. One thing I do find is that your belief that we are heading for a 'Great' Depression is fully in line with what I believe. As I approach retirement I have become much more concerned with what is going to happen with the world's economy, and as a Canadian I am very concerned with what I see happening in the United States. My greatest fear with that is not what the effect will be on the Canadian economy, since I believe our economy is actually more resilient than the American economy right now, but that the social unrest I see rising in your country will cause a direct military threat to us here - when the shortages occur, your government is more likely to try to get resources from us since we are so close and have abundant resources. This line of discussion is more suited for the future than what I want to talk about right now so I'll save it for later.

Right now I want to discuss something which is more relevant to the American economy. I am sure you are aware of John Williams' "Shadow Government Statistics" so I won't get into a description of that. My view of his analysis takes a more practical standpoint and you need to understand my viewpoint. First, I am a Marine Engineer - that is I take care of the large engines and marine systems which keep a ship going. To me, the economy is a huge complex machine, much like a ship with all of its systems. In order to tell if your machinery is working correctly you need to watch your instruments and gauges. In the economy, the instruments and gauges can be represented by things like the employment figures, the GDP numbers, the inflation rates, etc. When somebody alters the numbers to make them look better, mostly for political reasons, it is akin to an engineer changing the readings on a gauge because he doesn't like the way they look - it doesn't change the underlying problem with your machinery. Sometimes it is prudent to change the readings on the gauges because of reasons like the gauge being broken or you now have a more accurate gauge to act as a replacement. Other times it is obvious that the problem is not with the gauges but with the machinery. When you realize that you have changed as many gauges as the US Government has in the past twenty to thirty years you begin to realize that the problem is not with the gauges but with the machinery. When you ignore what the gauges are telling you on a piece of machinery you will inevitably have a catastrophic failure on your hands - this is what I see happening with the American economy and the global economy will suffer has a whole, just like the dirty thirties.

Now to back up my viewpoint I will refer to the monthly BLS numbers. I know that you believe, like I do, that they are totally out to lunch. The so called Birth/Death model artificially inflates the numbers of jobs created and the number of people unemployed is constantly under-reported. The Birth/Death rate is one aspect which totally baffles me. Certainly I concede that the underlying hypothesis is correct, that jobs will be created and destroyed which will go unreported in the current month. What it doesn't seem to take into account is that those jobs will eventually be reported, quite possibly in the next month's report but certainly in some future report. A certain article I read today ("Labor Market Figures That Are Puzzling the Fed" by John M. Berry http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_berry&sid=a0jvfQesFpp8  ) points out that the BLS actually does an update on that number under its Business Employment Dynamics (BED) report that it publishes quarterly. The article also exposes some more serious underlying problems that the BLS does not report.

Now that I have gotten to the actual point of introducing you to this article as well as acting as my introduction to you I will conclude this e-mail. In case the link doesn't work for you I will include the entire article.

Cheers,"

Preachin' to the choir, here.  But important to remember.  The original inflation numbers were based on market basket prices and these are so hedonified (if I can offer a new word today) and so warped, that they bear little resemblance to what was counted in, say, 1967.  Given a choice between believing a Washington lawyer or a Washington statistician, I'd have to believe the lawyer first - and that's going some ways...

 

EMP Update

I was on the Steve Quayle show last night talking about the dangers posed by EMP - and how it's in the same kind of "everyone talks about it, but does little" realm that terrorism was in prior to 9/11.  A heads-up reader & listener sent us a link to an online US Army manual on EMP which you might want to read through when you get time.  Interesting stuff.  Click here.

 

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Tuesday May 22, 2007

Perpetual War Update

Whether Leonard Lewin's book, "Report from Iron Mountain on the Accessibility and Desirability of Peace" (available online here, and well worth the read) was a hoax or not, the book made the absolutely fascinating assertion that at its core, a capitalist economy (like the one ruling the world today) needs to waste resources because there simply is not enough demand otherwise to keep all bottom lines rising.  If I remember right, it was held that waste (excess production) of something like 35-37% had to be wasted in order to keep things in balance.

 

It's not like  the idea of "permanent war" is a new one, either.  A check of Wikipedia reveals that "Examples of wars that seemed perpetual during their course included the Hundred Years' War (1337–1453), Eighty Years' War (1568–1648), the Thirty Years' War (1618–1648), the Crusades (a series of nine related episodes over a long period 1095–1291), and the Northern Crusades (beginning 1193 and ongoing through the 16th century). "

 

A little more recent example - and maybe even within grasp of your memory is the 50-years long Cold War we had with Russia, which kept the economies of both sides alive.  So, as I've argued previously, the outbreak of Iraq II / OIL  - I mean OIF - should come as no surprise.  In the wake of the Post Internet Bubble collapse of the economy, the forces which pull strings behind the scenes were faced with a horrific choice: Perpetrate (or simply 'let happen') an event (9/11) which would give the US/West a reason to go marching off into a war of many fronts, resulting in much waste, and arguably, a good outcome for the economy. Bonus: Keeps the Powers that Be in place and rich & ruling.

 

From the highest strategic planning view, such a choice would not that difficult to make.  Had the Second Depression gotten underway in 2001/2002, as it appeared it might to those of us who follow long term economic trends, the Kondratieff/Kondratiev wave, and even Elliott Super Cycles, it was clear that we were then - and continue today - to sit at the precipice of severe economic decline.  Markets are arguably overbought.  We don't hear about budget excesses though, as we did prior to 9/11, though, and that's important to note.

 

Nevertheless, consider for a moment what might have happened without 9/11: The market would likely have collapsed to a Dow which by today would likely be under 3,000 and perhaps as low as 700, while the life savings of most Americans (and everyone else trying to scrape together enough for retirement) would have disappeared.  Jobs violence would be endemic. The homelands of America's competitors, Russia and China would likely have fallen into disarray, which in turn would lead to increased pressures in those countries for military action (thinking mushrooms) as a bait & switch to keep the powers that be in control of those countries would have become necessary.

 

Moreover, there would likely be massive starvation, disease, and unemployment to the point where, as in the 1930's, there would be calls for massive change - a New Deal - and that would turn the everyday order of everything in Washington, London, Paris, and wherever else you can think of in terms of capitalism, upside down.  Even the Third World would sink back into deeper despair, lawlessness, disease, and isolation. 

 

The answer, as was shown in the 1930's with the massive Works Progress Administration, and the Civilian Conservation Corp, was to ensure that American industry would always have a way to make more goods and this in turn would power the economy through whatever problems were ahead.  While it might be true that a war, such as Iraq II/OIF would begin to be a drag on the economy about now, six years into it, the seeds have been planted for a whole series of easily modulated new proxy wars or pseudo-wars which can achieve the same levels of waste/sacrifice/and continued control of government, as a full-fledged regional war such as Iraq and Afghanistan provides today.

 

The new 'war equivalents' could be labeled the "environmental movement" and "global warming" on the one hand (and you see how carbon credit trading figures into the economic aspects as a war equivalent now) and the low-level resumption of tensions with the Russians over their latest missile plans and our "defensive" moves. Another might be new viruses engineered to reduce population or increase control. 

 

Whether it's consciously directed, or just the nature of interacting complex systems doesn't much matter if the design pattern holds and it doesn't become generally anti-human. Unthinkable thoughts, huh?

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If you've been following this site for very long, none of this is any surprise to you - I'm prone to thinking the unthinkable - and like me, you may be saying, "Well, of course no one in government, or out, is going to stand up and say anything like this because it's not only political suicide, but it also would focus public attention on the fact that corporations really do run the whole world consciously or otherwise, and that kind of admission would stir people up and move things along toward the rebellion/revolution meme that the web bot project has identified as a linguistic probability in the future anyway."

 

"So what's your point?"

 

Just this:  As you read the story "Pentagon Making Preparations To Keep Tens Of Thousands Of Troops In Iraq For ‘Decades’, remember how it all fits.

 

Oh, and this fits too: In event of "Catastrophic Emergency" George Bush has made it clear, the Executive Branch will rule.  "Continuity of Government" is the cornerstone of continuing the existing power structures.

 

One last point:  Wars demand sacrifice because they usually shortages.  Guess what?

 

 

Ain't war grand?

 

Jellyfish

And then we have folks in Washington which have about as much spine as jellyfish, evidenced by the Senate (SINate) putting of action on immigration reform/felony forgiveness.  As one reader asks "If they're going to forgive that felony, why not let all drug criminals out, too?  At least they weren't stealing jobs from people already here." 

 

But, again, you have to step back far enough to see the design pattern:  America needs a whole bundle of new citizens/lower income people to pay the Social Security bills we boomers are about to start collecting on.  There's no money saved for Social Security, just IOU's.   And, as a result, we need people from lower standards of living to show our younger generation how to do that.  And as far as social control? Gangs actually control things more than police in some places already.

 

Plaguing Denver

A monkey is dead from Bubonic Plague in Denver.  Not a big deal, you're thinking, if you don't have a pet semi-wild monkey, but remember what the plague has done in the past.

 

I can hear you muttering into the second cup "Oh, rats!"  Presactly.  Do you know where your monkey is?

 

A Plague on Your House Values

My deflationist friend Jas Jain sends this:

"Trend In Silicon Valley Inventory and Median Listing Price

The link below tracks SFH and condos combined for Greater San Jose Area.

http://www.housingtracker.net/askingprices/California/SanJose-Sunnyvale-SantaClara/ 

Here is data for Santa Clara Co., SFH only, that I collect:

Inventory (excluding Pending Sales): 3,781, +30.3%, YoY

Median Listing price: $765,000, -12.6% YoY (Only $5,000 above two-year low); See graph.

Sales in some high-priced areas like Palo Alto are strong.

Jas

China Quality

A while back, Elaine's brother Panama Bates, who is managing a construction project in Panama at the moment, mentioned how the lack of medical controls in the country had been causing problems: Contaminated cough syrup, pet food, and tainted this and that. Including toothpaste.  So now the story is popping into American headlines. 

 

DNA Case

Does DNA testing for paternity work when twin brothers are involved as possible parents?

 

Service Time

I am always getting marketing ideas - and this morning, as I was staring at my (severely cluttered) desk, I noticed a flyer from the local Dodge dealer about oil change time.  It's funny because I am going to the dentist this morning - so has any dentists done 1,500 meal service flyer?  This morning should be a gas...

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Radio Time

On Steve Quayle's show tonight at 6 PM Central - 7 Eastern.  Talking about (among other things) the EMP series which I did for Peoplenomics.  Speaking of which, a letter worth sharing as feedback for non-subscribers:

"Thanks for your recent informative subscriber site article on EMP protection. As a former USAF communications officer, I can attest that EMP is a serious concern and all branches of the military have protected equipment.

Below is the URL for a good site in re Faraday cages for protection from EMP events. The easiest ones to make/use are to stick your small electronics (cell phone, radio, laptop, etc) into a grounded microwave oven, or to use a grounded space blanket to cover a cardboard box into which you can place your computer, TV, etc. In an emergency time constrained situation a grounded space blanket can also be thrown over your electronic equipment.

Small mesh chicken wire can be used to line a small room, a garage for your car, or a small common steel garden shed can be grounded and used to store spare/emergency electronic equipment.

Faraday cages can be built to totally enclose sensitive equipment NOT in use. Exposed radios, computers, and similar equipment are almost impossible to protect if they are plugged into a 110 volt household electric circuit. If the Faraday cages are sitting on a conductive surface, they should be grounded. Grounding is safer in any case, though.

If items inside a metal shed need to be grounded, the ground wire should be insulated and go to a separate ground rod to prevent feedback!

Ground rods should be driven down to wet earth, if at all possible, to provide a sufficient ground. That may mean an 8 foot ground rod, or even longer, depending upon your location.

http://www.endtimesreport.com/faraday_cages.html 

also see: http://www.endtimesreport.com/EMP.html 

As I told subscribers last week: EMP looks like it's in the same pot with terrorism prior to 9/11.  A lot of talk, little action, and very, very little public awareness.

 

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Monday May 21, 2007

Black Swans and Mondays

You're probably much too busy to read all the books I point to on this site, but "The Black Swan:  The Impact of the Highly Improbable" by Nassim Nicholas Taleb, makes a very interesting observation toward the end of the book.  It goes to the idea that after the quants (quantitative analysis geeks/practitioners - my descriptions, not his) nearly melted down the world financial system with Long Term Capital Management in 1998, nothing changed.  In other words, you'd think that B-schools and trading firms would have done something a little different.  But - count this as strange as hell - no one seems to have learned much from the events.

 

So, we awaken this week to see how the world's financial systems are still running in "the same old ways" of the world prior to 1998. 

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A long while back, I offered a paper about the similarities between Herbert Hoover and George Bush titled Bush II as Hoover II in Depression II.    The parallel was reiterated here, the week before 9/11 when the earliest of the web bot work was calling for a huge tipping point to occur.  As it turned out, the tipping point occurred - and it seems to have bought Hoover II more time.

 

While it's still evolving, and will become highly evident this summer / fall when I expect to see employment crash, it's nevertheless interesting to catch a Bush-Hoover reference in an article in the LA Times this morning headlined "White House doesn't turn the other cheek" which begins this quote: "Perhaps not since Herbert Hoover took issue with the blame heaped on him for the Great Depression by Franklin D. Roosevelt have two presidents or their spokesmen feuded quite so publicly — and angrily — as former President Carter and President Bush. On Sunday, the White House fired a new salvo."

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The role of China will no doubt be key (chi?).  Not only has China taken a $3-billion stake in Blackstone, but this is part of a generalized move to get some of its foreign reserves into something other than US paper.  We're also hearing, through sources, that there's a huge run of new investors in China as middle class folks (a cute trick in a classless society) jump into investments by the millions of new accounts.  Our concern is shared, apparently, by the richest man in China.

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Market watching should be fun this week - we will of course get some new economic numbers, but more interesting will be how the "Sell in May and go away" approach to investing works, especially when we normally see some upward lift to the markets prior to a holiday - and next weekend brings one of those.  (At last!)

 

Life Under Controlled Media

Although the internet is a wonderful channel of free expression and reporting, I don't expect it will last forever, simply because it's such a threat to the "offishul paradigm" of how the world works.  Along this line, we see that people are demonstrating openly in Russia against lies and media censorship.  We should see the same thing here later in the year as people ask "Why wasn't our media on top of this?"  The answer - as always - is money.  There's a 'beyond cozy' relationship between media and corporate boardrooms.

 

Which is why the networks have been sitting on (among other things) the naked short selling scam and the DC Madam case; this latter has been widely ignored since the courts (now arguably a division of the White House/executive branch now) have said "No more talk of releasing more names!  More evidence, as I take it that to tell the truth in crooked times is a revolutionary act.

 

Party On

This Al Gore Global warming concert coming up in July has rubbed the Who's Roger Daltry the wrong way - he's wondering (and correctly so) what holding a rock concert is going to accomplish other than burning more resources.  I don't suppose I need to remind you of how skeptical I am that carbon credits is just a new investment scam.  Then there's a meteorologist who's saying that in five years, global warming will be considered a joke. 

 

The two sides involved can duke it out, for all we care: But, not to be missed is the Hutchinson (Kansas) News report that a "Professor warns of return to the "Dirty Thirties'.  Droughts happen periodically - and when they do, people in impacted areas get rightfully concerned.  Some examples:

• South Florida's drought

• Australia's drought

• Greece's drought

• Wyoming's drought

• South Dakota's drought...

...and you get the picture. So when people are in a drought (or being hit with new record highs in gasoline prices at the pump) it's dead easy to convince them that it's all due to "global warming" or anything else.

 

People under stress will embrace everything from dictatorial governments to you name it.  All of which is not to say that global warming isn't real.  But, it's to remind you that this part of Texas has never had snow on April 7th before, a fact that locals are still talking about.  We'll just watch the evidence and remain skeptical of cheer-leading or sheep herding.

 

There might be a way to make money in this, however. If I were 30-years younger, I'd be looking at drought as a way to make a buck.  I'd find some area of the country where unusual drought has been going on (Wyoming sounds interesting) and I would keep an eye on the place until people lose faith in the cyclical nature of drought and decide to move one.  When they do, local house prices may be fairly low and that could represent a pretty good opportunity to buy.

 

Most places have a pattern of so many good years, followed by so many bad.  You buy in the worst and sell in the best and you might be able to make a bit more than the average, I reckon. 

---

Meantime, back in the forecasting arena, the head of the National Hurricane Center says the pols up the food chain are more interested in image-building than bolstering storm forecasting.  Quick - look surprised!

 

War Outlook

While we read that the US death toll continues to rise in Baghdad, we're nevertheless hopeful (with some reason) that three missing soldiers will be found this week.  In the UK, Gordon "sell the gold cheap" Brown is defending the British role in the war.

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The war in Afghanistan continues too, with the usual suicide bombings.

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All of this is driving the national ammunition shortage we've been tracking for more than a year.

 

Both Hands in Your Pocket

While reading a headline this morning "Frozen Gas Tax Leads to Toll Roads", I'm amazed that anyone would swallow that.  What has led to toll roads here in Texas are greedy corporations, aided and abetted by equally greed-driven politicians, looking for free lunches.  While the highway lobby may be pimping a higher Federal gas tax, I'd bet no one would be willing to put a "no toll roads" clause in place in return for a gas tax hike. 

 

Yeah, hell, let's corporatize everything - food, water, land, roads, power!  Outsource CONgress and the White House to corporate PAC's to operate.  Outsource the Army to Blackwater...Outsource the Courts to a collection outfit...Outsource Michigan to Canada, Texas to Mexico....Hold it!  Haven't we done most of this?

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If you doubt peak oil here's a chart to ponder.  And, if you think I'm a little bit alarmist about "employment crash" check out this chart and 'explain to me Lucy" how we're gonna dodge this one?

 

Two Ugly Facts

The mortgage company Implode-O-Meter is up to 73 now.  And, the M3 (reconstructed) inflation rate is now running 12% since the Fed swept it under the rug a year ago. Print me up some, would you?

 

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George Ure, The People's Economist

 

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