This economy is a what?
Updated: Saturday, January 26, 2008 07:55 CST
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Look for another fake virus warning in your email today.
When the US military trains its finest in the arts of 'escape and evasion' there's a concept which is ground into everyone's head on how to react if captured. "Admits nothing, deny everything, and make counter accusations." Seems to also work well in the corporate world, from what I've seen, as a self-promotion strategy.
Key is the idea of causing one's enemy to question what they had thought to be real...hence, the importance of denying everything and instilling doubt.
As we go through daily life, it's easy to suspend skepticism because being a continuous skeptic is a hell of a lot of work. I see evidence of people being sloppy with their mental acuity all the time and it hit me again this morning as I went through the email only to received an urgent/dire warning about a supposed new virus making the sounds. The email claimed that:
What made this virus scam so interesting was that it also included a claim to legitimacy designed to overcome skepticism:
Well, of course, it hasn't been and with 15 seconds of searching you can find the Snopes.com page which says nope, this Life Virus thing is a hoax, not true, and better: it's been around since 2002.
Besides prompting me to hit the "Reply All" button and sending back the question "Is the word gullible in the dictionary?" along with the above link, this provides and abject lesson in how easily soft-thinking can creep into people's lives. The little "This has been confirmed by..." line in the email is likely what pushed the sender of the email into sending my way.
As a long-time news reporter, it's been pretty well bred into my DNA that everything should be questioned, lest we succumb to a sort of waking stupor where clarity of thought drifts into a soft focus, and from there, the herd mentality takes over. Group-think reigns.
When that happens, we all too quickly forget that yes, Bill Clinton lied in office ("depends what you mean by" what?) and the current crop of 'leaders' has done as bad or worse arguably, with regard to their real Middle East Wars agenda. In our waking-stupor state, we've become susceptible to suggestions which usually only serve the purposes of others.
I just got several flyers in the mail this week urging me to run out and buy a new High Def TV so I could watch "The Big Game." Like I should care about some sporting event next weekend. My interest in the Super Bowl is limited to the time-expansion study of how the final two-minutes of a football game can be stretched into 20-minutes of NIST time. And you thought time was a fixed unit? Clearly, Einstein never applied his formulas to network sports programming. He'd have given up - time is not what it seems.
Speaking of running out of time: Although the Dow closed down 171 - points on Friday, the good news is that the Dow actually gained a tiny bit this week: About 108 points worth. Not enough to stem the layoff planning on the Street, but any port in a storm...
If you were really optimistic, you'd bet on a modest (if not semi-meteoric) rise of the markets into mid-summer. After all, the economic stimulus plan is bound to make it through CONgress and over to the Decider's place in short order. About in time to put a set of paddles on the chest of the dying service economy.
We'll just sit in our grains and softs commodity call options and see if the time machine works as well here as it has in our longer term silver and gold plays. At the risk of sounding annoying, silver is up way more than a double since we mentioned the linguistics of in in April of 2005, a return of 2.36 times but it has dragged out to three years come April.
Thanks to Ben & the Printers, I'm expecting to see silver over $50 and gold well over $2,000 long before April and maybe as early as my birthday in late February.
How Cool Is That?
Very damn cold in China. Some much for global what?
Intrusive Government Department
But wait! If they did a tax on video games, wouldn't that mean taxing our day trading platforms? That's a video game, after all...
Web Bots: Purple Haze
Speaking of time, Chief Time Monk Cliff of www.halfpasthuman.com called late last night to advise me that "Our "still air event" has apparently shown up. Just to vastly simplify things, a while back in the predictive linguistics we had mention of a temporal marker before the "wind" event/natural disasters of the spring, to which government reacts badly and ticks people off, of this curious "still air" event.
Seems to have shown up in Kanawha County West Virginia. There's a chemical haze of some kind with all kinds of versions of the story in regional outlets, so with not much else going on nationally this weekend, we should see it pop fully into the MainStreamMedia - LameStreamMedia by this afternoon or tomorrow. The story line should go something like "county officials are trying to determine the source of a chemical haze in West Virginia that..."
Some suggestion that this is linked to power plant emissions, but the key thing from the predictive linguistics team is that we have a 'still air' event, which serves to inform us as to where we are here on timeline 616...
That means we're about a month and a half from the headlines about people's credit card debts going mainstream (late March into April, fading into tax disobedience/late filings)...so yes, emotional building is right on schedule. Maybe that tax language means the stimulus bill will drag out past April 15th causing filing delays?
Purple Haze, Redux
A marijuana dispensing vending machine comes to L.A. reports CBS. Hmmm...wonder if they'll put it next to a pop machine so folks can build bongs on the run...
Hot Streak in Vegas
Behind Door #2...
Here's a story about an internal door problem in a biohazards lab that would make a dandy 'include' when compiling a high tech novel...
Ah, feedback from our Houston Bureau about yesterday's story:
"Work?" Who authorized the use of that word around here?
And Just for Fun
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Coping: Food for Thought
Cheap eats ideas:
Send snip & save ideas (noi more recipes! (Enough!) to email@example.com
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Around the Ranch: Smoke Day
Around 8:30 last night I finally finished up the rebuilding of the SB-221 linear amp. This morning, after this update is posted, I will engage in one of the most delightful moments of ham radio - right up there working working some exotic location halfway around the world. I'll be doing the "let the smoke out" test.
The idea is that if you've done a good job of putting a piece of equipment together, it will work as it should. On the other hand, and especially when playing around with a reasonably powerful piece of equipment (*with the same 'talk power' as a 5 KW AM broadcast station), any little goof here, or there, and you not only can get smoke, but even a chance of fire if you're not careful. Which is why I gravitate toward flameproof resistors in high voltage power supplies, and such.
Regardless of how that goes, there's only two hours in the schedule for play until nightfall. There's more paneling to go in at the goat barn, plus I promised myself I'd put in at least one of the solar-powered lights today.
As soon as that's done, I'll be firing up the tractor and stretching out some portion of the 1,000 feet of goat fence needed to finish off a second large pasture. And, if I get that done, I'll hang the gate for that field. Not to whine, but just to finish the perimeter off is 6,200 feet of fencing - and you can about double that by the time the cross fencing gets done. Ever put in a mile of fencing, let alone 3?
Peoplenomics this weekend takes on low-cost reform of higher education - which should be interesting; focusing on "If information gets cheaper, why is education getting more expensive?" There are alternatives, and we'll get into those...
E and I have been kicking around the idea of a large greenhouse, this being a snaky/buggy part of Texas and all: One idea is to take the current 30' X 50' garden (*surrounded by the chicken moat) and enclose that with PVC and 6-mil sheeting, burying the sides under 6" of dirt to keep out whatevers. The other option is to put in a new pole building (darn cheap to build) and make something a little less grandiose, say 16 by 24. Ponderings on that continue.
As always, there's never enough time, but like the old farmerly saying goes, plenty of time for that when we get planted six feet under. Today's adventure boils down to which will I smell more of: electronic component smoke, or Kubota diesel smoke?
Peoplenomics: The 401-K Problem
I'll let you in on a little secret: Elaine & I don't have a 401-K, we don't have an IRA, and we don't have any kind of retirement plan except for a few modest investments in land, precious metals, stores, and cash. So naturally, when people ask my advice about a 401-K, they look at me funny when I say "You have one of those?" Don't get me wrong, the theory of a 401-K sounds enticing enough. It's just that when you look at how the money supply is being debased, and the growing risk of being in any kind of financial abstraction, repositioning at least some of your 401-K money into something else might make sense. We start with some numbers from the Fed which almost no one talks about...
Pass It Along
If you know anyone who is interested in preserving the Constitution, fighting usury from banksters, and shaking off consumer hypnosis, tell them about this site. Click here to send 'em an invite...
No Incumbents Bumper Stickers
To get your "No Incumbents in 2008" click here. They're just $5. And no, that would not keep Ron Paul from running for the White House he is not an incumbent for that office having never held that job before, you see.
Cost Cutting Ideas
There are lots of ways to save money on food, shelter, transportation, and such. It just takes a little reading and one source of good ideas is our handy ebook "How to Live on $10,000 a year or less. Just $10.
I promised Elaine that I would unload some of my equipment, so if you're looking for ham gear, especially the older tube-type (EMP resistant) type, send me a note and I will send out the list of what I'm selling off when I get it together. Click here to Put Me On Ham Gear List
Friday January 25, 2007
Friday's Simple Bet
Most mornings I wake up with something bugging me - a sort of writer's hangnail about some aspect of the economy. Thanks to a good night of sleep - particularly restful for some reason - I awoke this morning with a mind clear of gripes. Maybe, last night's 2-hour appearance of the Steve Quayle show was somehow therapeutic The show notes are on the www.peoplenomics.com web site as both a PowerPoint and a .PDF. and Steve might put the whole interview up as a free download later today, but not sure on that so go check his site this afternoon.
In fact, about the only thing that is on my mind this morning is the relatively 'safe' bet that a day trader could make today - and that is that the market will likely rally at the open, building on the previous two days of gains. Where does it go? Well, remember the old low which I talked about as being the key level the bears would need to see in order to proclaim even the faintest chance of the market returning to sober valuation levels was 12,743. Today, I expect the market to be almost 'magically' pulled back up to that level.
It's around 12,743 though, that I expect to see things get interesting: When a market takes out a key support level like 12,743, and goes lower, you'll often see 'congestion' or 'overhead resistance' as a newly reenergized market tries to rally higher.
When I look at historical closing levels of the Dow, I notice that last Friday was 12,099.30, so really anything above that at closing this afternoon and Bulls will be able to claim "The bottom is in! Good times are just ahead! Every back into equities, quick!" Gag me.
I'll be skeptical for a while, thanks. And, in any event, our dollars (both of them) are in commodity call options, which seem to offer way more upside potential that the returns offered on the street: single digit percentage gains for all the exposure don't turn my crank so much as triple and quadruple digit potential of the commodities.
Say, did I mention that gold is a commodity?
A couple of things to watch on gold (which I expect to cross the $1,000 barrier in February: First, there's a power crisis interfering with production in South Africa - and it will spill into platinum mining as well. Second, with a sucky economy and the Fed printing money (*or more correctly, letting banks borrow and interest rates around what inflation is running; e.g. free money rates), just what the hell did you expect?
Meantime, in what might be considered good news for small commodity players, some of the major bank trading desks are being scaled back. Example: BofA is closing it's commods desk in London. Ya'll just go on home and leave the money for us little guys, thanks.
Next Hands Out
The mortgage bond insurers have their hands out for $200-billion. Hell, it's only money - print whatever they need... Is everyone on crack & I missed the dealer? Not only are we guaranteeing that inefficient excesses are rewards, but now we're about to guarantee the ratings of the guys who over-extended? Where my bottle of Jack?
Dragon and Sea Monster
Here's a good way to look at it - from a reader:
There might be a golden lining, however...LOL
And we get what? An apology from Societe Generale - which claims to have fallen victim to the biggest trading fraud scheme ever blamed on a single trader. But, I'd have to ask "With all the checks and balances that are supposedly in place to prevent exactly this kind of thing, is that a credible answer?" It may be - Perhaps the people in French banking didn't read about Barings collapse in 1995, assumed that such a thing couldn't happen to a French bank (merci!), or there's a lot more to the story yet to surface. I'd bet on this latter, but I've been wrong before.
Late for the Party
Although globalism seems to have run its course, at least insofar as decimating jobs like customer service call centers in the US, a discerning reader might note that the president of France is suggesting that his country will be able to double trade with India by 2012.
Say, maybe France really does run 15-years behind the rest of the world - I guess that would explain a few things...like wanting to sell more nuclear technology. Oui.
Powers That Be Meeting
Yes, you can read about the World Economic Summit in Davos, but the annual meetings of the world's super-rich are way above your pay grade & mine. They'll just do what they have mapped out for us...
The supposed-to-be catchy headline is "US scientists close to creating artificial life: study".
Hmmm. Let me see: A fractional reserve banking system without reserves, 300-channels of digital wasteland and Second Life. You sure that ship hasn't sailed?
Energies from Space
That's a hot meme that is certainly getting its fair share of play in the MainStream/LameStream - and right on schedule, we notice:
While the boards are abuzz with how all this may set off huge earthquakes and tsunamis on earth, about the biggest 'effect at a distance' will likely be an increase in doombuzz on the 'net. Well, you can relax. Things don't get super ugly until the October 2008 economic meltdown which will go into the history books as the Bush Bust. But, go on and worry, if you must.
Back to the Trough
As expected (*I think I mentioned this a while back, or maybe it was in a recent Peoplenomics.com report) Paul Wolfowitz is returning to US government work, after resigning under pressure from the World Bank over promoting his girlfriend. He'll be Chairman of the Secretary of State's International Security Advisory Board.
HR geniuses in State and the White House...
Seems whooping cough is back - big time in some places. Like Houston, just down the road a short piece from us... I've taken the precaution of isolating our Houston Bureau and issuing 86-proof breakfast shots. This is nothing to sneeze at...
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Coping: Cheap Eats Week Wraps Up
One reader doesn't like the recipes around here, designed to help a family stretch from one pay day to the next. "Have I stumbled in the Crash/Food/& Win channel?"
OK, tell you what: I'm trying to slot some time this weekend to collect all the snip & save's, \so just one recipe today - but more tomorrow:
(I'd throw in some cabbage or bok choy, myself...)
Send snip & save ideas to firstname.lastname@example.org. Anything that will help people do more with less is fair game.
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Around the Ranch: Thanks!
I don't know where all the readers have come from, but this site has set new traffic records this week. Thanks for telling your friends - and keep up the good work. We may be down on stock trade, but we remain high in spirits and belief in the American ideals. 44-thousand page views in one day isn't a bad mark.
Thursday January 24, 2008
Which Way Now? Inflation Versus Deflation
OK, in case you missed it, the stock market collapsed earlier this week, but yesterday managed to zoom to a very impressive 300-point gain after touching technical targets. And, it looks like a higher open will be coming later this morning.
Does that mean the Fed is a bunch of geniuses for their 3/4-point rate drop on Tuesday morning before the open? Maybe not. A reader in Europe offers the notion that the Fed just spent a lot of money it didn't have to:
In the end, I suppose it doesn't matter too much whether there was a little arb'ing being done by the PPT, or whether it was just markets putting in a low (conveniently: right on the eve of the January 24th turn date forecast by the linguistics work of HalfPastHuman, by-the-by) before going into a one-last-shot run-up only to collapse this coming fall in the first week or so of October.
So, what we have now is a rally and gold popping back up over $900 spot (again, just as the linguistics forecast) such that by the end of February, nothing would surprise me less than 'thousand dollar [plus] gold'. Oh, the exuberance also means that a) oil will likely head back up and b) commodities ought to be screaming upward over the next few months.
Sure, that will mean inflation, but that's what happens when the US rate fall too fast, too furious, as it were. An AFX/Forbes headline this morning says "Gold up on safe-haven buying, amind talk of new Fed rate cut" which then goes on to say how another 50-basis point (1/2 percent) drop is possible on the 30th.
Think we're next going to try funding global carry trades? LOL...
Does that mean it's all 'clear sailing' ahead? Just bet on the you-know-what's (genitals) of consumers being tightened some more in the corpgov/bankster's economic vice, but everything else is 'all good'? Not quite. We've still got the same fundamental problems that we had in August when the first little bits of fear entered the market. And, the same problems two weeks back before the markets got momentarily rational.
And today's ugly little 'secrets revealed' meme is that French bank Societe Generale has uncovered massive fraud which could cost it as much as US$10.2 billion in write-offs. Other reports put the figure at only E4.9 billion, which on a 0.67 dollar conversion would put losses more like US$7.3 billion, but no matter how you cut it, it's dinner out, a movie and a year's worth of house payments for everyone who reads this column.
The key elements of real reform that I've suggested here, namely imposing a national usury limit on all credit cards and revolving debt of 12%, and restoring the income tax deduction for interest paid on consumer debt, have exactly not a snowball's chance in hell of being enacted. You see, this is really about bailing out bankers - so the average working family will see little genuine impact.
Consider Plan G
Let me run out some numbers for you, to show you the potential impact of my Plan G when it comes to real (durable) economic stimulus:
If a family has $15,000 of credit card debt, and they have been jacked up to 32% interest, they are racking up $4,800 per year of interest to the money changers. If we simply restored the interest deduction for consumer debt, a family in the 25% tax bracket, that write off would shield $4,800 of income, or $1,200 of taxes (if anyone was listening in DC).
Now, look what happens if both the usury cap and deduction of interest were to be implemented (Plan G): First, the interest on the $15,000 of credit card debt would drop from $4,800 to $1,800 - saving $3,000 top line dollars which would otherwise go to the banksters - and then, 25% of the remaining $1,800, or $450, would be a tax write-off. Total impact on personal budgets: $3,450. Bonus: We bring the banker lobby to heel.
Now, being a rocket surgeon (sic), which do you think would do more to stimulate the economy, and oh yes, keep more people out of bankruptcy and foreclosures? A permanent Plan G which would have an impact of $3,450 on a family's budget, or the mightily hyped "stimulus' package which will impact $800 to $900 or so as a one-time shot?
Like I said, snowballs in hell would have a better chance - as the bankers are crying poor all the time. But, if the nation was pursuing Peoplenomics instead of Bankernomics, or Lobbynomics then a permanent 12% usury limit and permanent deductibility of consumer interest would be the right thing to do. As long as we're at it, let's also throw in a mandate the Fed to "retain purchasing power of the US dollar". Maybe even link it to some outside stand like gold or silver.
Although there are major forces pulling both ways, it's still not clear whether reflation/inflation or deflation will rule the year The only strategy that makes sense is to 'cover all bases' by reducing debt, and structure your personal finances as best you can to weather both potential outcomes.
Outrage is being conditioned out of us by mindless MainStreamMedia, sorry to say. Which is why this site sounds so disconnected from the MainStreamMedia's idea of 'reality'.
GM Wins - Barely
Speaking of Iacocca, that gets us to cars, and a well-deserved hats off to GM (we have a few readers there). They beat Toyota, however barely, in the race to be the biggest automaker in the world. The question is what will happen in 2008?
Lesson from Kenya
This headline is catchy: "State Overpowering People." And there's a dandy quote in the underlying story: "How long can poor people continue to protest on empty stomachs and against the gun power of the state?" Hmmm...let me see....
Democracy Russian Style
Opposition candidate, you say? Going to run against Prince Vlad's hand-picked successor in Russia? Not so fast! Expect the signatures of your sponsors to be questioned - and to be administratively eliminated from the race. So sorry. What do you think this is, democracy?
Of course, our corporate duopoly in the good old USA is much neater about such trivialities. Third party candidates like Ron Paul are just ignored by the MSM - saves all that paperwork. Speaking of which:
The Runs: MSM Buried Story of the Day
Second most buried story: Ron Paul comes in second in the Louisiana caucuses this week.
Madness on Bordering, Redux
Looking at the Palestinians doing 'shop till they drop" in Egypt, after a border wall was blown up, might be something someone and Homeland Security ought to think about while keeping our fence along the Mexican border from being built. Nah, forget I said that. Might be something in the misnamed "Patriot Acts" that could be used against me (without trial...).
Remember when we used to have habeas corpus in America? Those were the days, back when a dollar was worth seven cents and there were paper trails...
Harsh Irony Department
20 Polish Air Force members were killed in a plane crash on their way home from a flight safety conference. Universe is harsh, sometimes.
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Coping: Meal Deals
With after Christmas bills, and tax season just ahead, I've been getting some really dandy cheap meal ideas submitted. Here's a batch to start with:
OK, write down this bit of family wisdom: The main difference between 'noodles' in the grocery store and 'pasta' is what? Price. In the following recipe, to keep costs down, try some of those frozen chicken tenderloins in place of the chicken breasts. Or, if you're in a hurry, try canned chicken - lots less work. And fresh fettuccini is usually way more expensive than the dried stuff in the noodle section...
Throw in a glass of Pisano or five, and I'll be right over...
Speaking of Stewed...
Try this one:
Just a personal observation: The cheaper the wine (for cooking) the better. Oh, and that string for the parsley and bay? If you fish it out of the stew and use it to floss after dinner, you've got farther over the edge than we have... I won't bother you with the old joke about the difference between parsley and...oh forget it...
And, if you just have a hankering for bread, cheese and wine, here's a starting point:
If you haven't visited www.cheesemaking.com, put it on your list. A little homemade cheese can be done even in the smallest of apartments and it's way more fun than paying $8 for a two pound loaf lately.
This sounds good...
$5 in Iowa...
...and you can cook this up:
More tomorrow (Hominy tacos) and keep the recipes coming. Remember, anyone can grill a $20 bacon-wrapped filet. Our target is $5 for a family of four or five. If I get some time, I'll write up the George One-Pot Special...although it runs closer to $6 to feed four/five.
Send any kind of getting along better on less ideas to email@example.com
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Around the Ranch: This & That
The rebuild of the SB-221 linear amplifier may get done this weekend and
ready for test firing. Parts due in today. May use a substitute
Zener, depending on mounting issues.
The new goats and the old goats are getting along better after sorting things out.
Feral cat is still being standoffish, but I've got him hooked on 1 tablespoon of heavy cream at night.
E's about over here flu/disease thing she got last week.
First thing up this morning after goat feeding and breakfast is setting up a couple of Peoplenomics subscribers...got behind due to consulting overload.
Wednesday January 23, 2007
Update: Is the Fed Doing Arbies?
Arbies: Short for arbitrage. Buying up futures/options in order to slow or reverse a decline by the judicious use of leverage between current prices and future prices expectations.
A quick look at the Dow Transport Index and a comparison with other indices for today's trading session brings to mind a very interesting possibility. Could it be the PPT is trying to buy up the Transports on the (Dow) Theory that as go transports, so goes the world?
Of course, it's always possible that some iron-constitution player would wade in and throw gobs of money at the transports - it just wouldn't be me, or anyone I know.
Another thing to consider is GM stock (the old mantra, as goes GM, so goes the world) and we see it's up a bit, too, at least when I looked.
But seriously: if you were the PPT, what index would you be buying right now to keep the markets from going over a cliff? Seems to me the Transports are as good as any - and with a lot of Dow Theory saying it might work, well, a couple of hundred million might be worth a bet.
If it is the PPT, don't send us the bill...and if it is someone else? Well, they've got a stronger stomach than me. Or, they're crazier.
A Banking System in [Slow-Motion] Ruins
No, the biggest story of the day is not about the Mars Rover finding some alien running around on Mars and sending a picture of it back here. Although, I admit it's interesting and right about on schedule with the 'strange energies from space' that's due linguistically about now. And, the biggest story of the day is not about the Asian market 'rebound' on the Fed rate cut. It's overstating things a bit to say "Asia is back" because when you look at India's Sensex, it's still about half of what it was last Friday, and in Japan, the chart of the Nikkei 225 since Friday looks suspiciously like driving down a mountain. Repeat after me: dead cat bounce.
The next leg down could start when investment committees have time for a few more hits of Maalox and contemplate where to go next. The answer is simple: hyper-inflation. That's about as easy a gamble as a person can make, this side of Las Vegas. Why's that?
That's because the real story of the day was pointed out in an email from my friend Trader Bar (www.nowandfutures.com): The Banksters at the Federal Reserve are getting rid of their own reserve requirements!
Here's the pertinent snip of the FOMC Meeting Minutes from October 24/25,2006 where 'the real plan' is exposed:
As I have explained to Peoplenomics subscribers recently, the so-called 'fractional reserve' system has been missing a lot of its fractions lately, what with sweeps and other electronic manipulations able to use every cent not committed to keep it moving around the system and gaining tribute...I mean interest...on its owner's behalf.
A quick reread of the history of fractional reserve banking reveals what?
So, there must be some kind of relationship between bank runs and having ready reserves. BUT, imagine a world where the reserves become notional. As I pointed out in yesterday's report, it looks by the latest H.3 report from the Fed that the "reserves" in America's banking system are already more than 100% 'borrowed money' anyway, so that's the path we're going down.
There's another name for this path: runaway inflation. Along about here, you might be asking yourself, "So, what does this mean for the balance of this year?"
With the Fed turning on what's almost the 'free money machine' by dropping rates incredibly low this week, the stage is set for what could be the grand daddy of all blow off tops. I can easily envision a scenario working out between now, and say the first week of October, where rampant inflation takes hold, much to the delight of the 'bankerly class.' Here's some of what I would expect:
I'm looking at two possible tracks from here: One is a breakout below 11,500, in which case a test of 10,400 is implied. But, more likely, this will be a great place to do some 'bottom fishing' in the very short term - banking on the bankers (so to speak) to print up money so fast and giving it away so fast, that all kinds of assets will appreciate like crazy. Including (and especially) commodities like the gold, silver, coffee call options, and wheat options we're holding.
Tomorrow night, I'll be a guest on Steve Quayle's radio show (he has a new shortwave outlet, too, which seems to have much better coverage), and we'll be kicking around some of these implications.
In the meantime, the futures are pointing down about a hundred on the Dow. But am I worried? No way!
When the bankers control the financial instrument valuations, what's the absolutely worst place to be investing for your future? My guess: Financial instruments.
The Second/Greater/Bush Depression is still ahead and the cautious sailor in these uncharted waters proceeds methodically and takes frequent soundings. No telling when you'll have to reverse course.
Conceptually, I like what I'd call the "Break up, break down spread. Some portion of assets in 'other than paper' such that you could weather a serious deflation with no serious loss of lifestyle, and the other portion in some inflation-sensitive investments (non-paper) so that you can benefit from inflation as well. A paid for house/land/big enough to garden would fit the former, while some grains and metals would fit the latter.
The options trading analogs would be and inflation/deflation straddle or strangle. Weighted as what you think the world will be like in six months drifts around.
Just as I have ghosted into man a new mooring back in my sailing days, under sail, I nevertheless kept the engine going - and ready to pop into reverse - just in case it was needed. The same kind of thinking applies to financial decisions as well.
In the sailing case, the essence of good seamanship is an uneventful voyage. And in the financial case, just keeping your net worth intact is a fine destination under current conditions. Especially with ships around us going down with all hands.
With this kind of news sloshing around quietly in the background, a reader asks:
Yes. The trend has a simple name: China.
No Getting Over It
The European press still reporting on the Princess Di inquest . Isn't this like a 10-year old event?
Same Old Conflicts, Too
Say, here's another timeless headline: "Militants fire rockets at Pakistan military camp..."
Beating the Iran Drum
And then we find commentary in the WSJ online "Stopping Iran.".
Iran, meantime, not to be outdone, is reaching out to Iraq.
Now, here's a practical question for you as an economic realist: How many wars can we fight and still have an economy? But then again, with (effectively) no reserve requirements for our banks, we ought to be able fund more...
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Coping: Eating on the Cheap
We've had some absolutely great recipes come in featuring ways to feed a family of four or five for less than $5-6 for a dinner. But before we get to that, let me put in a pitch for the finest breakfast, lunch, dinner food I can think of: Pizza.
A friend of mine (back in the day) owned a pizza & beer joint just south of SeaTac airport called "The Pizza Company." He made the interesting observation that pizza is one of the best balanced foods you can eat. "Look," he said, "You've got vegetables, meat, grain, and dairy with the cheese - perfect balance in a single dish." Of course, that was helped along by a killer sourdough crust and a few pitchers of beer and some friendly darts in this converted gas station covered with plastic-coated hatch covers (very 1970's, you know).
I just had a couple of slices of pizza for breakfast - and it goes surprisingly well with a hot cup of coffee and warmed up on the Pizza Reheat cycle in the food nuker.
Keep a pound or two of shredded Mozzarella on hand, along with either fresh or (gag) canned mushrooms and whatever turns you on for toppings, and you can see how pie-like creations can really stretch the food dollar.
Along the same lines, I like to keep a good stash of flour tortillas on hand for much the same reason. A bit of leftover stew, for example, may not seem especially appetizing on its own, but throw it on a flour tortilla, put on a lump of sour cream, and a shake or three of Tabasco - and now you've got something worthy of eating.
Another saving grace of tortillas is that being thinner, they will melt cheese faster than regular bread. So, if I have a hunger for something like a Reuben sandwich, I can whip it up in half the time on a tortilla - and while the result would have to be sold as a Reuben Burrito, the taste is very close to that of a traditional Reuben.
It'd be spot on, if I could ever find Rye tortillas - something which doesn't seem to be on the shelves of the local Wal-Mart or Brookshire's. Yet. When I made my first 'breakfast sandwich" in 1970 (toast, a scrambled egg, CheezWhiz and a slice of deli ham) I remember thinking "Gee, why don't people eat sandwiches for breakfast? Well, now the breakfast sandwich business (breakfast burritos and breakfast 'wraps' and all, seem to be widely available. So give it a while - rye (or pumpernickel) tortillas can't be too far off. 30-years at most.
More super-thrifty recipes tomorrow and whatever else comes along - send snip & save ideas to firstname.lastname@example.org.
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Tuesday January 22, 2008
Panic at the Fed: Emergency Rate Drop
Will this slow your 33% APR Debt Burden cards? Nope. Will it refi your house? Nope. Will it save a bunch of bankers? Maybe for a few days...but the real question is this:
How Far Down? Three Worries
Unless you live under a rock, you already know that world markets have collapsed - in some cases more than 10% in the past couple of sessions. But now, charmer of the morning that I am, I thought I'd throw out a couple of more reasons why, as we've headlined on this site since 1997, we're going to have to get around to replaying 1929 sometime in order to reset the money-clock so we can have another cycle of good old-fashioned American Boom & Bust - the stuff that if you play it right, enables one group of people to claw their way to the top. That it's at another groups expense is not worthy of considerations - this is after all, only about money, right?
So with the futures making a big sucking sound, let me roll out my three largest worries of the day and the reasons for them.
Fair enough. One of my local ham radio acquaintances was planning to move some 401-K money around yesterday into a treasury fund), only to discover it was a holiday. Now wondering "Did I wait a day too long?" We'll know soon enough.
Meanwhile, my point in this third worry is to underscore how many people will sleep right through what could be a calamitous period of blood in the street. No doubt, they will be like people watching the Big Screen and going to their garage a few hours after hearing some noise, only to find their car has been stolen. Except, instead of a car, it will be your retirement.
The BIG STORIES being hyped today are not about the risk we all face, or what you can do about it in the early going today. Nope. CorpMedia will sadly report after the fact how the "retirement accounts were hard hit by the market's declines this week..." along about...oh...Friday!
With many of the Asia markets down more than 10% in the past two days, remember a 10% catch-up (or would that be 'catch-down'?) drop would be 1,200 points by the Dow.
With LIBOR rates coming down quickly, we might ask "Why screw the common folks with 33% usury? I'd grab my pitchfork, but we're still a nation of Law. Well, sort of, but that's a much longer (and sadder) discussion. What's needed is a "People's PAC" and candidates that represent something other than business as usual at the public's expense.
If your main source of news is not screaming at you "Warning, warning, danger in the Street!" or offers lead stories about O'himma and She-it, you deserve what you get.
Not enough to worry about? Then how about the Fed doing a half-measure 50 BP cut today and then promising more next week. That would sure water down their impact and make the collapse target a downside break below 10,000...
Glad we're out of paper assets of all types.
Facts notwithstanding, we notice how officials are tripping over one another to declare how the world economy is sound.
Having read a bit more about the Depression than most, I'd have to say that sounds oddly reminiscent of "Good times are just ahead!" and "The Business of America is Business!" Claptrap echoes from bankrupt banksters. The only question is how long can they gool how many?
Oh, and the most important question: Are you one of the fooled?
With questions about the B-52 and the nukes from Minot to Barksdale still plaguing conspiracy-orient discussion groups who think that's where a nuke for domestic terror would come from, we note a sobering new nuclear concern is surfacing; namely NATO is talking about 'first strike' capability as an option.
As one grand tactician wrote:
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Coping: Fighting The Urge to Splurge
As much as I regret writing this, we may end up with runs on financial and so-called 'investment' houses over the coming few weeks and months.
Against this background, a reader sent in this:
I don't think there's any doubt: We should see a huge 'urge to splurge' in all kinds of goods and services as people 'stock up' for what they will perceive as 'hard times'. What's interesting to me is what people will stock up on. Do you need a new HDTV? No, but lots of them were flying out the door when I went to Box-mart yesterday.
No doubt, there will be some of this impulse buying, but I think it will be self-limiting: Those most given to impulse buying/over consumption are likely at (or very near) to their credit limits now. And, realizing that their credit card may be the only thing that allows them to buy food in the future, I think some common sense might show up.
If I were going to do any last minute stocking up (which I am this week) it will be things like unroasted coffee beans. Coffee tree seeds, more vegetable seeds and so forth. My commodities broker sent me a really cool article on roasting coffee in a popcorn popper. (Not bad for a guy getting over minor surgery - click here to send JB a get well note...and maybe besides trading tips you could talk him out of details on the coffee roasting.)
Now here's a kick-butt resource: The "Librums PDF Collection". A genuine gem of a find. Check out some of the titles. Absolutely worth copying most (if not all) to a local drive, and printing a few of the best ones out to have on hand should the global economic collapse start to take down infrastructure.
Are you one? The answer is here.
Is Peak Oil Real?
A reader pointed me at the latest claims that Peak Oil is an Illusion (here).
OK, pay attention here: I am looking for the best way to feed a family of four or five dinner at the best possible price. Send in ideas and recipes today!
Send snip & save ideas to email@example.com .
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Around the Ranch: Two More Goats
I picked up another couple of goats for our herd on Monday (between doing a software analysis and such). One's a 100% registered Boer, the other is an 80% doe. That makes five - one bill/buck and the rest does/nannies (depending on where you're from). This means what? I will be out stringing up more fence with my super-duper fencing installer. The feller across the road says I should go into manufacturing them. That has crossed my mind...
Monday January 21, 2008
Global Synchronized Collapse?
Be happy you're not seeing US markets open today. Those markets which have been open look like crap. Asia went through a mini-collapse last night. India's once go-go Sensex market went-went last night tumbling nearly 7.5%. That would be like our Dow losing 900 points. Something which I assure you won't happen today, but only because the markets in the US are closed in observance of Martin Luther King Day.
Tomorrow, no guarantees.
Blood's flowing in all the European bourses, too. One German commercial real estate lender is down as much as 12%. Remember a few weeks back I said "commercial lending will collapse next"? Hmmm...not my fault the future shows up the way it does.
Now doubt my deflationist friend Jas Jain will be mentioning this: "European government bonds rise as equity markets falls fuel demand for safer assets." Credit where due: He's got it right. Not corporate bonds, mind you. Government instruments.
The NY Post headlines today that "Marts Dread 10,000: Dow Tests Bottom" Want to place a side bet on whether than will hold?
Here's a sobering thought: If you have a retirement plan or a 401-K, you've already got a major bet down...
Gold is down today. Seems investors are unsure whether it will be an inflationary or deflationary end. The US dollar is up quite a bit today. Maybe we should take more holidays; seems to help.
His World Order
Gordon Brown is calling for major overhaul of the World Bank and the International Monetary Fund to deal with changing global circumstances. And we should listen to a guy who sold off tons of England's gold at almost the dead bottom in prices because why? You don't suppose this is part of the elite's plans do you?
Eye Catching Headline
"Thousands pay respects to Hillary". Oh, Sir Edmund.
The Runs: Still Burying Ron Paul
It's amazing to me that a fellow that gets second in Nevada gets significantly less ink that a bunch of other presidential wannbe's, Mind numbing, really. Corpgov duopoly.
Death of Papers
With the internet becoming a much more credible source of news than some newspapers, the layoffs are starting up and we are watching the big papers with particular interest.
Not like it's just papers, though. A souring economy and the 'same old' kind of answers from the Beltway mean even outfits like Yahoo may be eyeing cuts.
And the next round of financial industry layoffs hasn't hit the Big (rotten?) Apple yet. In coming weeks, it'll get bloody, though.
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Coping: Cleaning Electronics
More about how to clean electronics:
Another offers this:
All this said, there is some danger to dishwashers, depending on the boards:
OK, enough on this - send in some new topics - up to my ears in Cat Taming tricks...
Real Economic Justice
Some good ideas from fellow readers:
Boy, wouldn't that be sweet? That and campaigns to limit interest rates to 12% max like back in the "old days".
Send snip & save ideas to firstname.lastname@example.org. How about a new topic: How about best meal for five people at the lowest price?
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Around the Ranch: Ham Radio Work Bench
I spent a few very enjoyable hours on Sunday putting a couple of pieces of ham radio gear on the bench. My small linear amplifier, which does about 750 DC watts input (dead key on 20-meters) was given a going over, looking for why it only does 650 watts (DC) input on 75 meters. I suspect one of the caps on the untuned input is going, going...but rather than tear apart the back panel, I decided not to get deeply into that project. The thing was only designed for 500 watts in the first place, so even after my mods, I guess I should be happy with it. Putting EL-509's into an old Dentron is not exactly taxing. More recently, folks have been shoe horning in Russian GI-7BT tubes, but it's more work. While I was tempted, the return of taking on another mod seems very low on a 'cost-per-watt-gained' basis.
Next up was the Hallicrafters SR-150 power supply. I got after it with the capacitance meter and discovered that the LV [low voltage] power supply, which had an old electrolytic can type cap as a filter was down to 6 uF and 8 uF respectively. A quick installation of a couple of computer-grade 22uF caps there, and some additional capacitance (which I call 'vitamin C') in the bias supply and all traces of hum were gone. Chatting on 75 to some friends in Louisiana and Mississippi, it was about on par with the Icom 746 (processor off mode).
Last, but not least, I started work on the newly acquired SB-221. The reported problem with the radio was that the Zener diode that sets bias had blown, and that had taken out the filter cap in the bias supply. Armed once again with a meter, I set about looking into things only to discover that the Zener in question had different forward and reverse measurements (implying the Zener might not be bad) but that the regular diode in the bias supply (a half-wave rectifier set up) was deader than a doornail. This would certainly explain why the small (22 uF) 150 volt cap reportedly went off like a shotgun on its way to perdition.
After putting a little heftier diode in the bias supply (3A @1000 PIV), and a much larger cap (33 uF @ 450V) I was faced with the question of the 10 watt Zener diode that had been reported bad. Hmmm...trust my measurements alone? Build a small LV source and actually measure the voltage threshold? Or, just be patient and wait a week for the4 already-ordered replacement parts to show up? Laziness won out, at least temporarily.
With a pair of replacement 3-500Z tubes going for $300+, I decided patience was the least-risk path so I went ahead and installed the Harbach soft key module. The original amp was designed for tube-type gear so switching was done with relatively high voltage & current relay lash-up.
Newer equipment (like my Icom gear) doesn't care for high voltage/current switching, so you need something between the amplifier and the radio gear to step-down the switching requirements. The Harbach mod was pie simple to put in; all of 10 minutes including mounting and soldering the four wire connection.
The big problem now is keeping my hands off the amp until parts come in. And just sitting there, I'm now tempted to put in all kinds of other mods before tasking it from the bench to the operating position. As luck would have it, though, there's enough real work to do around here that it may not be an issue.
One of the nanny goats looks close to giving birth, and that means I need to finish up the siding on the goat barn. There's another 1,000 feet of fencing to install, and that means updating my fencing installing tool that I told you about a few months back. But before I get to that, there's the projects for the consulting client...ah, such is life here on the ranch...
Oh, that cat taming exercise? Coming along well. I can now get 20-feet or less from the cat and it is showing up around 4:30 daily. I put a couple of tablespoons of whipping cream out for it, along with the usual gourmet mix of dry cat food.
It's still suspicious though, although I can't blame it. Anyone saying "Here kitty, kitty, got any ideas on what the forward resistance of a 1N3996A should be?" ought to be kept at a safe distance. Even Pusscilla, the house cat, knows the answer is 540 ohms plus or minus a mouse...
An explanation of this chart
Once upon a time, a long while ago, I observed during my quest for 'truth' in economics, that the powers That Be, the talking heads on the teeve, and the other information sources that actively engage in the programming of humans not to think, had conveniently swept several trillions of dollars that disappeared in the Internet Bubble's bursting (since spring 2000) under the rug. Surely, it wasn't unnoticed by the thousands of people who called brokers and said "Where is my money?" "Gone, but hang in there as you're a long term investor!" was about all they heard back.
But, the truth of the matter is that this chart shows what your account would look like if you have taken a few thousand dollars and invested equal amounts in the Dow, the S&P 500, and the NASDAQ Composite in the waning days of 1999. It's not a very pretty picture, and it sort of gives away the other side of the story. You know, the one that no one has an interest in telling, because it's a truth which shows the amazing coincidence of the timing of 9/11, the disappearance of naked shorting evidence and all, along with the impact of The Wars which have managed to keep the economy out of an earlier depression than the one expected by me by late 2008.
No, it's not a perfect replay of 1929, but history doesn't repeat exactly, it only rhymes. So think of this as the rhymes and the crimes chart:
Write when you get rich,
George Ure, The People's Economist
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