How Far Is DOWn?

Thankfully, we have a weekend to cogitate on the next moves of the financial markets because like a mathematical permutation, every data point seems to lead to another, such that on Saturday mornings like this, the balance of the weekend could be spent with calculations that ultimately culminate on little more than an educated dart throw. 

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We start with just the most basic of reports: The Dow closed under the psychologically significant 12,000 mark on Friday.  Some of the angst was no doubt caused by the weaker than expected jobs report (see yesterday's discussion) but there are other metrics popping up adding to the jitters; things like the declines being evidenced in Las Vegas at the tables.

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A very alert reader called my attention to an error in Friday's column, which I need to explain to you because it's somewhat complicated.  I wrote that...

“So now let's go to the intraday lows which we hit in January and have a look at them: The intraday (*during the session) low back then was 11,508.74. Again, the intraday low would have to fail - and by a few points to make me anything approaching a believer, before I'd get panicky.”

The reader, however, offered this important 'reality check':

"YAHOO shows theoretical low.

Look at a candle chart. The DOW never got below 11,600 on that day.

Theoretical low is what the LOW would have been if all the DOW stocks when they were trading at their lows would have been on the average."

Sure enough, I went back to my daily close notes from back then and sure enough, the lowest shown was around 11,634...so yet another lesson learned. 

 

If you're getting the feeling that there are literally thousands of rules involved in tracking stocks and making forward projections, you're right.  In the knowledge engineering field such things are called 'rule sets' and it's the life work of the 'quants' - the quantitative analysts who figure up this rule set or that, and then bushel baskets of first algorithms, then spreadsheets, then trading code, then calls to the code repair experts to keep their particular mechanistic view of the future working.

 

Zooming Out A Ways

We must be getting close (*within a year or less) of the ultimate top and then collapse of the global(ist) economy.  Why?  Because my mailbox over the past month or two has picked up a significant increase in emails from past contributors to the old University of Colorado Longwave economic discussion group. 

 

A project of the school's Center for a Sustainable future, there were a lot of us [academics and interested parties] through the mid and late 1990's worked on gaming out whether the Long Wave (http://en.wikipedia.org/wiki/Kondratiev_wave) would come to a catastrophic end this way or that.  There was even one fellow who maintained (*and I think to this day still maintains) that the micro-crash of 1987 was "It" - the replay of 1929's Great Crash.

 

Most of us who were part of the group back when, don't think so.  One of the requirements of a Kondratiev Long Wave Collapse is that the 'sins of the past' must be reset such that the entire game can be restarted again and another 50-80+ year cycle of inflation/boom/and bust can commence.

 

I think it's safe to say that most of us who looked at the events of '87 concluded that there was not sufficient 'damage done' to reset the debt clock in a meaningful way.  Instead of a recognition of 50+ years of malinvestment and the repudiation of huge amounts of debt from said malinvestment, all we got was Alan Greenspan's boyz turning on the printing press and printing out way though the crisis.

 

In the intervening years, one might discern an increase in the economic work-arounds that have kept the global(ist) economy going:  There was Gulf War One, the Asian Contagion, the LTCM near-global-meltdown, the internet bubble, followed by the terror boom (which as I've explained many times has been a marvelous economic driver, not only wiping ouit lots of financial records in the Towers, but also giving government a new economic stimulus (the anti-terrorist industries) and with that, an excuse for a continuing series of foreign wars and occupations which are modulated this way or that in order to keep the economy perking along.  And the late, great, Housing Bubble, of course. Which has resulted in banks being (linguistically) 'flipped off', if I may.

 

War Bets

With the Dow dropping below 12,000 Friday, the odds of a greatly expanded Middle East shooting war have increased.  Not only is the Cole headed for Lebanon, the IDF in Israel cracking down on the Gaza where things haven't been so bad since 1967, but this morning, we see reports in the Israeli press that "Egyptian Official: Syria may be behind Jerusalem attack" and "Egypt official: Gas conflict serves Syrian interests" which puts Damascus right in the sights for the next escalation in fighting.

 

I trust you remember the old military planner's adage: No one ever gave a war that couldn't be seen coming" or, as another reader wrote, "The Russians never go to war until the crops are in..."  Couple of good nuggets there.

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Returning to the Longwave Group, it's interesting to see where some of the contributors have ended up.  One, who manages serious money (where $serious starts with a b) is writing an insiders account of what this period is like - I just wish we could read it along the way. 

 

Another, is a top bond trader - and expert on generational economics (we've got more from him for Monday's report) along with others: One,  known as 'simple country lawyer',  has steadfastly maintained that market moves aren't complete until the pain stops.  And for now, it hasn't:

"George,

 

More and more reports of FORCED liquidations due to margin calls to various entities. NO BOUNCE has staying power UNTIL the margin calls are FINISHED.

 

I have seen this a few times over the years and support levels just get taken out, taken out, taken out since the forced selling overwhelms the market buyers who come in at the various support levels. 10:1 that is what happened today [*Friday]  near the close.

 

Your expected bounce is NOT going to occur ... until this round of margin calls is complete. There will be NO bounce into the 22nd unless the margin calls are completed by mon/tues, which I doubt since more entities need to square up their accounts for their banks for the quarter's end on Mar 31. In fact it could get very very ugly as March goes on if more and more players are forced to DE-leverage.

 

As Kit Webster [Another extraordinarily bright LW contributor - G] has been saying, any surprises will be on the downside ....

 

Anyway a few comments from one board that I noted on this issue:"

This gets us to the issue of malinvestment across a wide variety of time scales. 

In the very short term (pun intended) we see things like margin calls while in the longer term, we see the continuing spread of malinvestment pain.  From subprime to ALT-A, to SIV, SWF's. and now commercial real estate, and bundled consumer debt.  Credit card renunciations and walk aways are rising fast.

 

As often happens, information seems to cluster in the inbox.  Another ex LW contributor who has been eyeing things (from Australia) is Bryan Kavanagh who sent this:

Hi George,

I saw a reference to your “Degrees of Panic” which I visited and enjoyed. Yours remains a great website, George! It’s been a while since the Longwaves site, eh? And most enjoyable days they were - apart from the rabid excesses of a couple of people whose ignorance drove out people the likes of Peter Eliades. [sigh!]

[Peter has remained active in economic analysis and has a site www.stockmarketcycles.com - G]

 

Would this not be the most inevitable, relentless, and slowest-motion train wreck in history, George? And the ineffectualness of highly-paid analysts, risk-managers and policymakers is rife and complete. Did I not assert that it would be real estate excesses, rather than stocks, that would be the final coffin nail, George? Of course, the share market must come into play its final, integral part in our denouement. The role of taxes in killing off productivity and directing people into real estate remains unknown, or, at least, understated, and I was most surprised to see Mike Huckerbee call for the abolition of income tax! How right he was – but, of course, it won’t happen because we love to inflate our costs with that WW1 ‘temporary’ tax in order to handicap ourselves, so that we are unable to compete with China, India ..... (place name of next emergent nation here).

I trust that most primary of elements remains safely stashed away you-know-where, me hearty?

Best regards George,

Bryan Kavanagh   www.lvrg.org.au 

There's a simple explanation for what's wrong with the economy, as Kavanagh sees it and it all starts with a very simple formula explained at his "Land Values Research Group" web site.

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Standing back you can see the outline of the investment continuum changing shape.  On one side, the decline of real estate evolving, and with that comes the collapse (*readjustments always go to excess) of real estate debt.

 

Always seeking the highest possible return, this has forced 'hot money' into the commodity side of things where Elaine and I are playing now.  While this is going on (real estate down, commodities up) we can also notes that the stock markets are in a sort of 'holding action' somewhere in between.

 

This is what sets up my expectation for the short (6-month) term - I mean besides the linguistics from the www.halfpasthuman.com studies.

 

As the stock and commodity markets put in 'final highs' this summer, the inexorable decline begins, which would be where the linguistic crisis of the first week or two of October comes from, and then a general depression lasting through to spring of 2010.

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As I've got it penciled out, we're now inside a 9-month window that leads to economic collapse - and it will be commodities that lead the final leg of the collapse that will change how you live for the rest of your life.  I'll explain...step up to the white board here:

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Before an earth-shattering collapse, you get a huge spike up in commodity prices.  Let me show you some headlines pointing in this direction:

• "Commodity futures can spice up your holdings" advises the Globe & Mail.

• "Copper hits record as interest in commodity surges..." says Forbes.

• "Commodities boom to keep breakfast hot for a while" says the Guardian.

 

Is it all peaches, cream, and short term gains?  Yes, but only for a while.

 

An article in the Financial Times today suggests (as would I) that the "Commodities' rally may signify trouble." 

 

Their explanation is too long a read to distill down into a sentence or tow, so this note from a reader in response to my "Cotton Question" in the Coping section of Friday's report says it all quite neatly:

 "I posted it on www.investorvillage.com  at the fnm site and this is one response....the others were similar...commodities have a lot of spectators in them..I think you might have said that as well....anyway from the fnm board:

 

I think your husband and his boss are way off base with their conclusion.......

" a few big buyers that are trying to manipulate the market to bring the price way down."

In reality the reason no one is buying is that a few large "Speculators" have bid the price so far up that there are NO BUYERS that actually want to take DELIVERY of the Commodity........ IN other words those who actually MAKE SH*T with Cotton aren't BUYING..... The Stupid Speculators have now bid it up so far that its too damn expensive to actually make shit you can SELL with Cotton........

 

The commodity asset bubble is going to end very badly....... Same as always..... Tulips anyone?

 

No one is buying the cotton because its TOO EXPENSIVE........ How your husband and his boss came to any other conclusion is kind of Baffling....... More so since they are actually involved in the business........

 

IMO, a lot of these commodities that have been bid up by speculators as a response to the falling dollar never had any intention of taking delivery......... The People who actually need the commodity to produce products with it can no longer afford to purchase many of these and make a profit selling it to the consumer....... As a producer your not going to be able to pass a lot of these costs on to a consumer who simply no longer has the ability to spend more then they make in Wages....... The ATM is closed for business...... This flight to commodities into what is prolly going to be the worst recession in my lifetime is the most Absurd Investment strategy ive ever seen......... Its as if no one sees a parallel with the Housing Bubble of a few years ago.....

They are pricing the BUYER / PRODUCER OUT OF THE MARKET........ "

Degrees of Panic

While lots of people are hand-wringing over the market taking out the weekly close from mid-January, and reading that as a tea leave warning "Flee the Market!" my view is a little more considered based on seeing the economic death and rebirth of America coming since the artificial bail-out in 1987.

 

Our first stop on the pre-open 'fact-finding mission' is the Yahoo Finance historical numbers on the Dow for the month of January 2008 and for the middle two weeks of the month in particular.

 

The first line in the sand is the weekly chart.  As you'll see (hitting the above link) that came on January 18th with a closing Dow of 12,099.30.  Yesterday's close of 12,040.39 is worrisome, but only slightly so until the close today.  If we close below the 12,099.30 level today, then yes, I'd be eyeing the exists.

 

Our next 'line' is the daily close and as the data seems to show, that would mean no real panic until the daily low of 11,971.19 of January 22 is taken out.  Again, yesterday's close is uncomfortable, but it's not the end of the world. 

 

On the other hand, if we get a daily close below 11,971, while it doesn't mean we're about to sail off the edge of the world, but you'd at least be able to hear something like a waterfall at that level.

 

So now let's go to the intraday lows which we hit in January and have a look at them: The intraday (*during the session) low back then was 11,508.74.  Again, the intraday low would have to fail - and by a few points to make me anything approaching a believer, before I'd get panicky.

 

All of which is not to say that economic times are 'good' - they're not. 

 

Consumer Confidence is at the lowest level since 2002.

 

Then we have to consider the trumble (*as in trouble/trumble) in world markets overnight.

 

Oh, and I suppose you could throw in the record weakness in the Buck versus the Euro.

 

Yeah, there's $105 oil - and maybe much higher, as the number of what's-its to trade paper for oil goes up.

 

If you insist, we might even heap on the questions popping up about the "We Did It" letters in the wake of the military recruiting station bombing in NYC on Thursday which harkens back to the Vietnam War protest era, and the early arrival this weekend of Daylight Savings Time. 

 

Long as we're at it, let's throw in the Kitchin (sic) sink, a partridge in a pear tree, and the Easter Bunny.

 

IN the face of all this, I refuse to panic for several reasons, not the least of which is the predictive linguistics.  While they certainly can be wrong, they just haven't missed the mark by much so far (getting 9/11 sketched out as a military/accident about two months before events is no mean feat) and so my expectation set continues to be:

• Regardless of the Jobs Report (which we'll get to next...just hang on) I expect to see the Dow end up at least 50 points today in order to close above the weekly low from January.

• I don't expect intraday that the Dow will fall below the intraday low of 11,508.74 for more than five-minutes at best.

 

From there, I'd be eyeing a rally in both stock prices and commodity prices into mid-summer, and from there a slippery slow decline into September, and then the world ending (*in economic terms) by the second week of October which ought to become visible somewhere between the 5th and the 8th of that month.

 

If I was still a wild eyed stock trader, I might be tempted to buy boatloads of the short-term index call options and bet that by the time the triple witch arrives in a few weeks that the market would be higher.  It's just that I wouldn't touch anything with a ten-foot pole if we take out 11,508 today.

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The price of gold and silver has something to tell us, too.  It's been sitting just under all time highs waiting on the jobs report.   But, gold, silver, and oil are not mute: They seem to be saying "inflation's coming...inflation's on the way..."  Just, so few people understand what all that means at the emotional and pocketbook levels.

 

'One of the Forbes pages I went to this morning offer this "Thought for the day"  "A man's got to believe in something.  I believe I will have another drink." -- W.C. Fields.  By golly, those Capitalist Tools have it right.  This is a day to just sit back, have Italian food and a glass of wine for lunch and chill out.  You can bet the PowersThatBe are.

 

Anti-War Meme Builds

Part and parcel of the 'revolution/rebellion' meme we've been watching, interesting to note that airmen in uniform in the UK have been subjected to verbal abuse.  Gold-seller Gordon Brown condemns the public abuse of armed forces, but somehow misses the point that it's not the people in the uniforms, its the policies they're enforcing that are the objects of scorn.  Denial is a strange thing - so is displacement.

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Watch that word scorn evolve over the next few weeks, too...not lingu8isticvs, just a sort of gut feeling.

 

War Weekend?

(We'll get to the jobs report, but it's not nearly as important as you might think...).

Linguistic modelspace that the HPH folks look at is fairly clear: Israel is going to 'lash out' in some way shortly that will bring generations of scorn for the harshness of their actions.  If you ever wanted to see pressures building toward a future event, consider the data sets:

• The murder of eight students at a Jewish seminary in Jerusalem has resulted in a lock-down of the Palestinian territories as the hunt for the shooter continues.

• Even though Egypt is walling up the Gaza strip, regional news outlets report that conditions in the area are "worse than 1967" which was followed by the Six Day War.

• Syria, the US and other countries are warning their citizens to stay out of Lebanon or just be really damn careful if you have to be there.

• We're at dark of the moon, which is when night-vision equipped forces have maximum advantage in conflict.

 

If I were scenario building, my 'highest probability' events would go something like:

• Better than expected jobs report

• Weakness in the Dow trading briefly under 11,800 or so...

• A real move up of oil, perhaps to $107-$108 today (I'll be taking commodity call option profits when that happens).

• A push by gold later in the day to nearly $1,000

• A last hour rally by the US stock market to close over 12,090 on the weekly charts

• A two-fronts war by Israel aimed at specific objectives in the South and the North/Lebanon border, but perhaps going to Syria and even beyond.

 

On this last point, if you infer that 'beyond Syria' might be meaning a shooting war/sudden attack on Iran, then that would be a fine bit of brainwork on your part. 

 

Let me quote you something I offers in my free daily update in July of 2007:

"I'd then look for a "surprise resignation" of Admiral William Fallon as Commander of the US Central Command in the late August to mid-September arena. Fallon, as you may recall, has made it clear there would be no 'first use' of delivered mushrooms on his watch. I have immense respect for Fallon."

We're now seeing headline that "Bush may fire CentCom Chief Adm. Fallon, Replace with Command More 'Pliable" to War with Iran".  That's a very bad sign.  If Admiral Gallon is canned/marginalize, or however you want to put it, that would clear the way for the neocons and their 'yes-men' to move forward with 'first-use' of the sh*t stick. 

 

All of which would lead to much higher oil prices, as well as making the case that the US is absolutely out of moral control.  But, very short-term, that doesn't matter to the PTB:  They are desperate to keep the economic situation from collapsing, and if it means a widening of the Middle East conflict(s), then that's the price to be paid - by others, not them.

 

Still, that's not likely during the market session.  I would look for the Israeli outburst which goes badly (that's the linguistic flavor of things) to happen after markets close. 

 

Touting "success" the markets could rally, perhaps for several months, but in the end, the US dollar would be toast, and in the economic hard times to follow.

 

An old adage "Sell in May and Go Away" might take on additional meaning this year.  "Away" might be out of North America if the option appeared.

 

See how the jobs report sort of fades to the "Who cares?" level?

 

In keeping with this morning's theme of "Degrees of Panic" you should be thinking to yourself that the lowest level panic would be the jobs report, the next higher threshold would be a Dow close under 11,508, and then fear the weekend because Israel is seriously angry and a consensus has evolved that something must be done in the wake of the seminary shooting Thursday.

 

All of which is not to say that this is how things will work out, however they could work out this way.  Time, as always will tell...

 

The Jobs Report

Let's see how the linguistics are playing out here.  Back over New Years, I was on CoastToCoastAM and one of the predictions was that in February "Acceleration in the employment crash meme, construction slows dramatically including commercial" (*see the Feb slide) would be appearing.

 

Here's how the jobs report looks today:

"Nonfarm payroll employment edged down in February (-63,000), and the unemployment rate was essentially unchanged at 4.8 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Employment fell in manufacturing, construction, and retail trade. Job growth continued in health care and in food services. Average hourly earnings rose by 5 cents, or 0.3 percent, over the month.

Unemployment (Household Survey Data)

The number of unemployed persons (7.4 million) and the unemployment rate (4.8 percent) were essentially unchanged in February. Over the month, the unemployment rates for adult men (4.3 percent), adult women (4.2 percent), teenagers (16.6 percent), whites (4.3 percent), and Hispanics (6.2 percent) showed little or no change. The jobless rate for blacks fell to 8.3 percent, in line with the average rate for 2007. The unemployment rate for Asians was 3.0 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

Total Employment and the Labor Force (Household Survey Data)

Both the civilian labor force, at 153.4 million, and the labor force participation rate, at 65.9 percent, declined in February. Total employment (146.0 million) and the employment-population ratio (62.7 percent) were little changed over the month. "

The percent of workers under-utilized/underemployed was 9.5% in February, a slight improvement over January's 9.9%.  The CES Birth/Death model contributed 135,000 jobs to the reported numbers.

The CES model steadfastly asserts that 9,000 new construction jobs were created. All of this is predicated on some 450,000 people leaving the labor force for the month - which is a 'raised eyebrow' for me:  Did almost half a million people decide that they didn't need jobs all of a sudden and unemployment dropped 195,000 people at the same time?  You smell something?

Speaking of Screwed Department

The headline "French women 'are the sexual predators now' is certainly eye catching.

 

Global Hot Air

Take your pick here:

Prince (Charles): Global effort needed to counter climate change...

or

Weather Channel Founder was to sue Al Gore for Carbon Credits

Play nicely, now...

 

Law School for 8-year Old?

No kidding department: 8-year old Brazilian boy passes law school entrance exam.  File under Legal>Lawyers>Childish

 

Email of the Day

Remember the story yesterday on wheat fungus?  A reader offers this:

"Wow, wake up, George!

...our arch enemy all of a sudden gets wheat fungus? And it conveniently blows over to all the "Stans" that have Muslim population....? (see your listing!)

What a co-incidence!"

Hell, I thought I was cynical...

 

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Coping: Click Points

A number of interesting links to explore:

Hi George,

My friend has a gardening website worth checking out. In my opinion, anyway.

http://www.astone.com/stonework/garden/garden.html

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http://www.cnbc.com/id/23508499 

s1: Read the part about the multiple financial groups unable to meet their Margin Calls.

Cotton Questions

Here's an interesting fundamental question for you:

"I live in rural Eastern NC. My family works for a couple different businesses related to cotton growing, picking, ginning, storing, and selling. They have been noticing that NO ONE IS BUYING COTTON AT ANY PRICE ! I am going to look into it a little more, but from what I have heard from my husband and his boss is that there are a few big buyers that are trying to manipulate the market to bring the price way down. It looks like May and July cotton has been selling around the 85-87 range. My husband's boss tried to sell and said that he would take as low as 70-76 cents. There are no takers.

A few things crossed my mind. Are the traders tapped out? How can the price be that high with no demand? I don't know if this is an isolated problem with just cotton, or is this becoming a problem with other commodities as well? Several of the local brokers in Eastern NC are not trading cotton at all right now. What gives? Maybe they are right, there are a few big players trying to bring the prices down. I am trying to see how this fits into the big picture and I just don't see it.

Anyway, I thought you might be able to make use of this information in case this is signaling something bigger that I just don't get. Thanks again for all your work"

Outsourced Chompers?

Consumers are being advised to ask about where their dental lab work is done.

 

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Send snip & save comments and such to george@ure.net.  anything that helps people get along better - being sane people in an un-sane world - is fair game.

 

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Around the Ranch:  "How Cool Is That?"

Well, about this cool:

 

 

People in other parts of the country seem to have this impression that Texas is a place inhabited by road runners, wily coyotes, and a bunch of sage brush & tumbleweed.  While that may be true out west of the Pecos, here in the piney woods of East Texas, we have trees, snow, and high taxes, just like everywhere else.  ---

Last year we had snow on April 7th.  This year, we have snow on March 7th.  Guess what I expect on February 7th of next year?

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As soon as this report is posted, I'm  going to take the tractor out for a quick 'roundy-bout' of the property with the camera.  Although it's only to last for another hour or so, it's the kind of weather than brings out the National Geographic in us...Drop by tomorrow - might put up a short video from tractor...

 

This week for Subscribers to Peoplenomics:

13 Acres and Independence Part 4:  The Art of Buying Land

When the Depression Era classic "Five Acres and Independence" was written as many as half of the modern considerations in buying land hadn't been dreamt up yet.  This week I'll run you through the basics of buying land in today's much more complicated times.  Questions like the regulatory environment, modern utilities (like the internet) not to mention a development plan that avoids becoming embroiled in government power grabs such as the National Animal Identification Program ( NAIS ) deserve close study.  Under the guise of "food surveillance" corpgov is inexorably pressuring out small land owners (whether by design or not)  by ensuring through appointed 'courts' that the "voluntary programs" morph into mandatory when the public's attention is diverted this way or that by the Tweedle Dees and the Tweedle Dumbs on the campaign trail.  I'll try to park my cynicism for a few minutes here while we objectively look at buying land.

 

                More for Subscribers      Subscription Information

 

Tell Your Friends About This Site!

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.  And the CONgressional folks?  Don't even get me started... Primaries this week in Texas and Ohio, to name just a few - eyes wide shut?

 

Mr. Cheap's Tricks

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.  Still just $10.

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Last week's report is here.    If for back issues of this site, click here.  (Goes back to 1997!)

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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

 

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Thursday March 6, 2008

Special Update

Eyeing the Debt Monster

The Federal Reserve (which is neither 'federal' nor does it have reserves) has issued its quarter report Z.1 "Flow of Funds of the United States".  This is about the straightest dope on the economy you'll find because the bankers can't hide everything.  Here's the summary of the report which can be found (all 124 pages of it) here. (I've added bolding to make some points clear)

Debt of the domestic nonfinancial sectors is estimated to have expanded at a seasonally adjusted annual rate of 7¾ percent in the fourth quarter of 2007, about one percentage point slower than in the previous quarter. The deceleration in the fourth quarter was concentrated in the household and federal government sectors. Domestic nonfinancial debt rose 8 percent over 2007 as a whole, ¾ percentage point slower than in 2006.

 

Household debt expanded at an annual rate of 5½ percent in the fourth quarter of 2007, 1¼ percentage points below the pace in the previous quarter. In the fourth quarter, growth of home mortgage debt decreased to a rate of 5 percent―the slowest quarterly pace since 1997—and consumer credit rose at an annual rate of 4 percent. For 2007 as a whole, household debt increased 6¾ percent, about 3½ percentage points less than in 2006. The deceleration of household debt last year owed mainly to much slower growth of home mortgage debt. Nonfinancial business debt rose at an annual rate of 12 percent in the fourth quarter of 2007, the same as in the previous quarter. Stronger bond and commercial paper issuance offset weaker C&I and commercial mortgage lending. Nonfinancial business debt increased 11½ percent over 2007.

 

State and local government debt increased at an annual rate of 7½ percent last quarter and expanded 9¼ percent during 2007 as a whole. Federal government debt expanded at an annual rate of 5 percent in the fourth quarter of last year, and increased 5 percent for the year as a whole.

 

At the end of the fourth quarter of 2007, the level of domestic nonfinancial debt outstanding was $31.2 trillion; household debt was $13.8 trillion, nonfinancial business debt was $10.1 trillion, and total government debt was $7.3 trillion.

 

Household net worth—the difference between the value of assets and liabilities—was an estimated $57.7 trillion at the end of the fourth quarter of 2007, $0.5 trillion dollars less than in the preceding quarter.

And worst of all, the American percentage of equity in their homes has now dropped below 50% - for the first time on record since 1945.

 

Like I said - the debt monster.

 

Seeing Ahead and 40-years Back

I guess this morning's theme was foisted on me by Universe when I looked at the local weather icon on my personal home page ( here ) and spied the word "Advisory".  For a moment, I about blew it off because the Weather Service/Weather Underground often have the just lifted flood advisories from recent heavy rains on the site for a period of time.  But, for some reason, I clicked and sure enough, a chance of a bit of winter snow comes to this part of East Texas tonight.

 

Well, about half a cup of coffee into the day, at this point, it occurred to me that humans have a very odd sense about looking the future square in the eye, although as Cliff and Igor at HPH are constantly reminding, you can either ride out to meet the future on your own terms, or be trampled when it comes along anyway.

---

While in computer modelspace, we're expecting something that at the archetype level will be like a veteran's group taking over some kind of a monument this spring/summer, we are already seeing headlines appear that are reminiscent of the public backlash to the Vietnam war.  Just two data points necessary to make the case:  There are reports circulating on the net that the International Longshoremen & Warehouseman's Union is planning a May 1 shutdown of West Coast ports, as a protest against the (Bush) wars.  Then this morning there was a small explosion at New York's Times square - and the location, a US military recruiting center, was slightly damaged.

 

It's a 'flavor' of headlines that I haven't read since as a reporter (38 years ago) I was stampeded while interviewing Vietnam war protesters by the Seattle Police Department's "tac" squad, and then later tear gassed while interviewing demonstrators in front of the Federal Courthouse steps kitty-corner from the Public Library on the 5th Avenue side.

 

Somewhere, down in the prehensile brain area the phrase "You don't need a Weatherman to know which way the wind blows..."  (from Bob Dylan's Subterranean Homesick Blues  and later adopted by the Weather Underground...& I'd hasten to add the protest group Weather Underground, not the dotcom weather outfit) comes back - an echo from a time I hoped would be a once only period of American history.  Seems not.

---

The replaying of the 1970's themes can be seen elsewhere, too.  Take for example the US plans to continue spraying Colombia's coca crops, and now plans to expand into spraying programs in Afghanistan.  Without commenting on the goodness or badness of it all (I'm just reporting and providing context here) it's historical prequel, the spraying of marijuana with Paraquat in the late 1960's and early 1970's, fits the almost half wave length of a saeculum temporally, although I need to check  today with generational studies colleague, Trader Jim Goulding, who is far more expert in generational studies (and accompanying market correlations) than me.

---

If we are going through a 'late 60's / early 70's harmonic of some kind, then we should be able to see evidence elsewhere.  For example, in the area of inflation.

 

Here, we note that gold has been getting close to $1,000 per ounce, and silver - which we expect to start moving dramatically higher as the spring moves along - has also come back to life. A 27-year high again puts us back into the after war leftover inflation from Vietnam.

 

Frankly, I've yet to concede that a deflationary Depression is a necessary outcome of the collapse of fiat currencies because an inflationary case can be made.  I've been making bets all along that commodities would continue higher, not just because Hedge Funds are looking for a new (and arguably less regulated playing field) but because supply is being outstripped by demand or will be shortly.

 

Oil is back over $104 when I checked this morning and in our commodity account, we'll likely pick up another three week double (or close to it) having anticipated the move.

---

But, that's not the real story on the commodity side.  The one I am watching most closely is the story leaking out of Eastern Europe/Persia that wheat rust is back.

 

You'll recall that one of the linguistic trends we've shared is the seeming acceleration in the upside price moves of grain.  It would also dovetail with another linguistic vision out of modelspace for later this year: huge grass lands fires that cause global smoke.

 

Let me explain how all this could fit together in one version of the future.

 

First, let's look at the size of the Wheat Rust problem.  I did some research yesterday to see how much of the world's wheat production could potentially have some impact from wheat rust.

 

Country	MT's	Source Data
Iran	12900000	2003 UN FAO #'s
Afghanistan	3710000	(UN 2006 figures)
India	65129300	2003 UN FAO #'s
Pakistan	19210200	2003 UN FAO #'s
Turkmenistan	5234000	2003 UN FAO #'s
Uzbekistan	5331000	2003 UN FAO #'s
Kazakhstan	11518500	2003 UN FAO #'s
World	549433727	2003 UN FAO #'s
Maximal Rust Impact	123033000	(add countries to subttl)
Max percent of world wheat:	22.39%	countries/world prod.

 

I'll remind you that this is not trading advice - it's just a little back of the envelope calculation of things.

 

And the tie-in to grass fires?  Going back to a 1905 NY Times article, you can read how the rusts propagate and see that plowing under or simply burning fields is the solution.  Given the cost of energy to plow fields under (and the risk of a rust resurgence, seems to me that a couple of matches would be a reasonable outcome to infer.  Chemical solutions cost money, and in the areas involved, that seems an unlikely outcome.

 

Just something to keep an eye on, although almost certainly, not the entire 22.4% of the wheat crop worldwide would be impacted.  However, seems to me that the potential is there to make the recent move in the cereal grain just the start of what could be an all-time move. 

 

Throw in damaging winds and unusual precipitation in the Midwest US this year (and the weather service charts show tornado occurrences are already way out of bounds - see second chart down here...) and increased purchases by big consumers (like China which is controlling grain exports and increasing imports) and a case can be made for very high food price inflation as the year wears on.

 

NONE OF THIS IS TRADING ADVICE!!!

 

As long as I'm giving you a demonstration of news equals money, consider what the spraying of Colombia could do to agriculture programs there.  One source says Colombia produces about 12% of world coffee...

 

We'll just keep an eye on returns for the keyword "famine" in various news searches.  Another great resource for tracking such things is the Famine Early Warning Systems Network.

 

Spike or Trend

Oil over $105 today...

 

Numbering Wars

OK, I've got to come up with a simplified way to keep track of all the wars we're involved in (directly and otherwise).  So, The Cold War was the 300-series of wars.  And now we're in the 400 series.

 

I might label them something like this:

401:   1990 Gulf War 

402:   2003 OIF

403:   Afghanistan

404:   Kosovo

405:   Israel (Six Days II, -- pending)

406:   US/Colombia versus oil-rich Venezuela  (pending)

407:   Ukraine (pending)

408:   Iran (pending)

408:   (open for assignment to any resource rich country

We'll start the 500 series when China finishes arming and takes Taiwan.  And we'll start the N-series when nukes are used.  Now, where are we?

 

402: Turkey's Shooting

Turkey's curb the Kurds campaign is back on high.

 

403:  No Spring Offensive

Afghanistan's spring may be quiet says Admiral Fallon.

 

404:  Indy Winds

The world winds continue to swirl around whether Kosovo should be independent.  India is saying "No..."

 

405:  Simmering War

Tensions continue to build in the Gaza Strip region.  Some say this is the worst it's been since 1967.

---

A quick run to the history books brings up the 1967 Six-Day War.  (312?) Again, we're at that half saeculum wave length, huh?

 

I reckon it will go very hot and very soon.

 

406: Colombia

The strategic question now is whether the US will commit forces to the evolving war between Colombia and Venezuela...

 

407:  NATO's Thoughts

Skeptical of Ukraine in NATO

 

408:  Talks Delayed

Talks?  Us & Iran?  What talks???

 

War Box Scores

In our efforts to echo the half saeculum-ago insensitivity to war and human suffering, we'll soon be able to take all these wars and reduce them to daily box scores.  Reading the scot scores should be easy enough.  A sample might be something like this where the combatants are labeled A (US/Western) B (anyone opposing us) and C (extra players) and then the body counts reported.

402: A 5 B 5 C 21  (e.g. Turkey is C, an 'extra player' as Ecuador is an extra player (C) in 406...

403:  A 10, B 23

All of which gets down to the point that humans have become so insensitive to war/death/destruction/and such that box scores really are a much for efficient approach.  I'd like to thank all the videogame developers and Hollywood producers have have helped us in this regard.

 

Tabloid Grist

The Princess Diana inquest is dragging out longer than the final 2-minutes of a football game...

 

Unions Returning: British Coastal Event

The British Coastguard is about to strike over a pay dispute.  Say, maybe after being kicked around by globalism, Unions globally are growing some...er...higher testosterone levels?

---

Weather works are joining growing strikes in Germany.

---

Axel strike impacting at some GM plants now.

 

Markets

I'm not the only one expecting the Dow to break out in a violent move one way or the other, although I'm betting on the upside.

 

This period of quiescence has been noted by colleague Michael Nystrom, although his site www.depression2.tv seems to be having a few issues at the moment - still worthing checking later.

---

Did you notes in the Middle East that NRI's (non-resident Indians) are being urged to invest in gold or UK sterling?  Tres odd...or is it?

 

--- snip and save section ---

 

Coping: Rural Land Hint

A word from Dusty...

"There is an important item to consider when buying rural property on a dirt road. Always pick property on the side that is upwind most of the time. This will be appreciated when the summer dust clouds roll out from under passing automobiles. Also, water should not be underestimated. During power outages I have used water from my pond for flushing the toilets. I also raise fish in my pond. It is very relaxing to feed the fish after a day's work. I don't eat them, but they are there for emergencies. I rigged a pump to use the pond water to water the garden/landscape plants."

Fine point and one I will add to the book I'm writing in serial-fashion for Peoplenomics.com subscribers: 13 Acres and Independence.

 

Question and Answers

Here's another good one:

"Good morning George, I enjoyed listening to you on Coast to Coast last night. I've read your newsletter for about 4 months and I really enjoy and learn from it. But I was wondering if there's a special place for the old Snip & Save articles, I know I've missed a lot of good ideas.

 

Please tell your readers that if they want to learn about gardening, food preservation, food safety and sewing to contact their local Extension office about taking classes. The classes are generally free but you're expected to volunteer and share your new knowledge with others. "

Yes, putting all the snip and saves into a single page (*or a $3.00 pdf when it's big enough with the money offsetting bandwidth costs) is on my list of things to do.  You can read back on old issues by hitting the library/archive page here.  There's stuff going back to 1997 there...

 

Next Trend?

Here's one to get you thinking:

"I have noticed in the last couple months that Walmart has virutally no 'sales' on any food items any more. We go through the grocery circulars religiously to try to save enough on food to help pay for Gas and heat and electricity, and it is getting tough. It used to be Walmart food was 10-20% less than King Soopers, Safeway, and Albertsons, here in Denver, But not any more. Soon all the weight loss business will go out of business, because so many folks will simply not Be able to afford to eat enough to stay fat. "

Do I need to remind you again???

 

DO YOU HAVE YOUR GARDEN IN YET?

---

Send snip & save ideas to george@ure.net.  Antyhing that helps you life life bettter or more efficiently - big city or rural - is fair game...

 

--- end snip and save section ---

 

This week for Subscribers to Peoplenomics:

13 Acres and Independence Part 4:  The Art of Buying Land

When the Depression Era classic "Five Acres and Independence" was written as many as half of the modern considerations in buying land hadn't been dreamt up yet.  This week I'll run you through the basics of buying land in today's much more complicated times.  Questions like the regulatory environment, modern utilities (like the internet) not to mention a development plan that avoids becoming embroiled in government power grabs such as the National Animal Identification Program ( NAIS ) deserve close study.  Under the guise of "food surveillance" corpgov is inexorably pressuring out small land owners (whether by design or not)  by ensuring through appointed 'courts' that the "voluntary programs" morph into mandatory when the public's attention is diverted this way or that by the Tweedle Dees and the Tweedle Dumbs on the campaign trail.  I'll try to park my cynicism for a few minutes here while we objectively look at buying land.

 

                More for Subscribers      Subscription Information

 

Tell Your Friends About This Site!

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.  And the CONgressional folks?  Don't even get me started... Primaries this week in Texas and Ohio, to name just a few - eyes wide shut?

 

Mr. Cheap's Tricks

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.  Still just $10.

----

Last week's report is here.    If for back issues of this site, click here.  (Goes back to 1997!)

----

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

 

---

Wednesday March 5, 2008

Pondering The Oil Patch

There's a headline this morning that the government's "Loans program for coal plants suspended" which goes to the idea that because of global warming and tons of uncertainty, new technology coal plant development should be suspended.  This, after a lot of states including in our backyard here in East Texas, were out fighting tooth and nail to get nods for new coal-fired plants.

---

Curiously, the price of oil has not yet reacted, although it certainly seems possible.  Although oil took a dip on Monday, there's an OPEC meeting today which could see output held steady which wouldn't help the US economy any.  The US is pushing for higher production quotas in order to contain prices.

---

Meanwhile, the US has decided to back Colombia (read: no oil) over Venezuela (Read: Oil out of strict corpgov control) in the recently warming border skirmishes.

---

In the Middle East, stress is building because Syria is floating a proposal for a transitional government to lead to early parliamentary elections.  And in Iraq, the Oil Ministry has been given the green light to sell oil to key Western corporate customers.

---

Although it's not yet mainstream, and while the prospect of $4 gas is still out in the future a ways, the reality of $4 diesel is already pressuring the independent truckers, and that's just another round of inflation in the pipeline on its way to consumers as costs get passed through the supply chain to the end users this spring.

---

In all, it's not a pretty picture.  To us it's not a question of the direction of oil's next move.  The only question is how far?

 

Accidental Statistic

Once you figure out a way to afford gasoline, your problems aren't over.  Nope: Triple A has a new study that says traffic crashes cost America $164 billion a year.

 

Enough Is Too Much Department

Citigroup drops as word leaks out that Middle East money sources don't want to pile more dough into a developing (fill in your own image here).

 

Productivity

After being up all night with the radio interview on CoastToCoastAM with George Noory last night, wolfing down some chow and getting into this morning's column, I am hoping to be asleep when the BLS folks release the latest "productivity numbers about 8:30 Eastern.

 

The problem with these numbers is that things like improvements in computer horsepower get factored in, but in truth, a faster processor has never influenced my typing speed - it's unchanged from back when I had a Commodore 64.

 

When you play with productivity, you can quickly see that the highest possible productivity is the one which eliminates the most jobs and that means higher unemployment, so I've always taken such numbers with a grain or salt.  Or, more candidly, several aspirin.

 

The Runs: Yuk

She's back. McCain's in.  Did I just mention aspirin?  Or corporate duopoly?

 

Corpgov Dialectic

While reading that the White House is defending NAFTA, don't we all have it figured that the folks running for office will all offer verbally to back out of the job-jacking arrangement?  Until they're elected.  Then, it's just "Too bad for voters...where's my pac/percs?"

---

I don't mean to sound overly cynical about it (I am, I'll admit) but politicians have low rankings because why?  They promise the moon and deliver bumpkis.  Or, they promise free lunch and then moon us, maybe...

---

Doesn't anyone besides Ron Paul had the goanies to say "Yeah, Ross Perot was right about the big sucking sound"?

 

Dot Connector

Remember a week or two back I was telling you about the flurry of quakes in the Salton Sea and south central California?  Now look what happens: A train derails and people are evacuated.  The real story may very well turn out to be one of earth movement although time will tell the tale.  Just don't be surprised if moving grounds have something to do with it.

 

Look at the quake map and then map Mecca, California.  Get it?  Sort of sets the expectation for something bigger up north along that line, doesn't it?

 

Chinese Inflation

At least someone understand that inflation is afoot...  Me?  I just look at the 4.8% inflation in China, figure it will show up at Wal-Mart and other retailers in the US in short order, even though price hikes will be either a) denied or b) marginalized by a nonsensical argument that food and energy bills shouldn't be counted when considering inflation from a policy standpoint.

---

Sounds like French Revolution thinking, this kind of what passes for thinking.  Translation: "We'll worry about everything in our elite interests.  You just be good little peasants while we starve, freeze, and strand you..."    Oh, and charge $4 for diesel for your trucks...

 

---- snip and save section ---

 

Coping:  What Are Your Values?

For years I've known people who hold that they want to run or work for "values-based organizations."  It's wonderful to watch the monkey-mind dance around how people want to work good but at the same time get rich or at least very well off doing it.

 

One of the callers on the radio interview last night wanted to know what do do if the banks ever shut down their ATM's and wire transfers in the event of a 'cyber attack' or some trumped up 'terrorist' action.

 

The answer is pretty simple - almost deceptively so.

 

But first, you need to read something.  Last week the US Army released their updated operations manual FM3-0 and there's a part in it which every thoughtful person may wish to consider.  (It's an open release document and sequel to the 2001 version).  It looks ahead at the operational environment that our military is considering in coming years and it's summed up this way:

"INSTABILITY AND PERSISTENT CONFLICT

1-1. Operational environments are a composite of the conditions, circumstances, and influences that affect the employment of capabilities and bear on the decisions of the commander (JP 3-0). While they include all enemy, adversary, friendly, and neutral systems across the spectrum of conflict, they also include an understanding of the physical environment, the state of governance, technology, local resources, and the culture of the local population. This doctrine pertains in an era of complex local, regional, and global change leading to both opportunities and risks. This risk component of this change manifests in certain trends that drive instability and a continuing state of persistent conflict. Some important trends that will affect ground force operations in an era of persistent conflict include:

􀁺 Globalization.

􀁺 Technology.

􀁺 Demographic changes.

􀁺 Urbanization.

􀁺 Resource demand.

􀁺 Climate change and natural disasters.

􀁺 Proliferation of weapons of mass destruction and effects.

􀁺 Failed or failing states."

I routinely try to look at the world the way a few friends in the "kill people and break things" department and the "Kill 'em all and let God sort it out" department do:  There's fallout - or at least potential for fallout - from each of the bullet point items.

 

FM 3-0"s section 1-2 happens to resonate very closely with my outlook on the world:

"1-2.  Globalization will continue to affect global prosperity positively but is also believed to export terror worldwide. Interdependent economies have enabled great wealth. The benefits of this wealth remain concentrated in the hands of a few while the risks of failure are borne by many. This unequal distribution of wealth often creates “have” and “have-not” conditions that can spawn conflict. This dichotomy is evident between developed nations in the northern hemisphere and developing nations to their south and in the southern hemisphere. By 2015, experts project that up to 2.8 billion people—almost exclusively in economic “have-not” areas in developing nations—will live below the poverty level. These people are more vulnerable to recruitment by extremist groups. Globalization has also contributed to the rise of nonstate actors to economic, informational, and even military and diplomatic positions rivaling or exceeding those of states. The decline in state power and influence makes diplomatic interaction more difficult and complex. Globalization has already left several states behind, and more nations will lag in the increasing tempo of globalization. As a result, their populations will both suffer and become more apt to embrace radical ideologies to express their frustration and increase their desire, if not ability, to share in global prosperity."

All that's missing to round out a wide perspective is the environmental collapse potential (death of the oceans, for example) and the impacts of climate change.

 

Now back to the caller's question:  What to do if banks close or ATM's freeze up?

 

Let me hold up the Army's macro trends in the operational environment again:

􀁺 Globalization.

􀁺 Technology.

􀁺 Demographic changes.

􀁺 Urbanization.

􀁺 Resource demand.

􀁺 Climate change and natural disasters.

􀁺 Proliferation of weapons of mass destruction and effects.

􀁺 Failed or failing states."

How many of these do you think you'll be able to buy your way out of with a credit card IF the ATM's ever do go down?  Or, even if they stay up?

 

Money of the notional type, whether in the derivatives world, or in the digi-dollar consumer world, is only a storage medium; an agreement that some paper with ink, or a piece of plastic with a magnetic strip that incurs debts, will be immediately and universally exchangeable for real goods (food, water, shelter) or the tools for basic survival (like seeds, shoes, a hoe, and so forth).

 

All the charge slips in the world won't walk the first mile when gas pumps are turned off.  Nor will they trap a meal, build a shelter, start a fire, except at kindling.

 

If the ATM's hiccup, banks close, or money fails, you should have an alternative plan at the ready. 

 

By applying just a very few of your unused brain cells, you can get what videogamers call "First look - first shot" advantage.  While there are lots of 'first looks' available thanks to the web, an amazing number of people won't take the first shot.  instead, they will wait until they can't buy hiking shoes, can't buy storable foods, can't buy ammo, can't buy foul weather gear...all those kinds of things.

Waiting for the systemic failures is like jumping from an airplane and then asking about a parachute.  And with similar consequences, I'm afraid.  I wonder how many people over the next decade will think "I wish I had bought shoes or food, instead of that new video by so and so, or that new car lease...

 

Probably 98% of people have an inflated value of money because basic 'things' have been so universally available.  Change that availability equation and suddenly practical things can rule again. The choice is whether to change you values now on your terms, or wait for the changes to be forced on you by circumstances.

---

 

Send snip and save ideas to george@ure.net

 

---- end snip and save section ---

 

This week for Subscribers to Peoplenomics:

13 Acres and Independence Part 4:  The Art of Buying Land

When the Depression Era classic "Five Acres and Independence" was written as many as half of the modern considerations in buying land hadn't been dreamt up yet.  This week I'll run you through the basics of buying land in today's much more complicated times.  Questions like the regulatory environment, modern utilities (like the internet) not to mention a development plan that avoids becoming embroiled in government power grabs such as the National Animal Identification Program ( NAIS ) deserve close study.  Under the guise of "food surveillance" corpgov is inexorably pressuring out small land owners (whether by design or not)  by ensuring through appointed 'courts' that the "voluntary programs" morph into mandatory when the public's attention is diverted this way or that by the Tweedle Dees and the Tweedle Dumbs on the campaign trail.  I'll try to park my cynicism for a few minutes here while we objectively look at buying land.

 

                More for Subscribers      Subscription Information

 

Tell Your Friends About This Site!

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.  And the CONgressional folks?  Don't even get me started... Primaries this week in Texas and Ohio, to name just a few - eyes wide shut?

 

Mr. Cheap's Tricks

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.  Still just $10.

----

Last week's report is here.    If for back issues of this site, click here.  (Goes back to 1997!)

----

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

 

---

Tuesday March 4, 2008

Life In The Blender

A reader sent me a critical note late last week, unhappy that I reported a recent trading success (or 3) when he and his family were facing  foreclosure - as many Americans are.  I responded that the goal of this site is not to brag about my trading skills, but to give people ideas about how they can get back in charge of their lives rather than become victims of process.

 

Overnight success doesn't really happen overnight.  If you were reading this column back in early 2005, when we were buying a few ounces of silver around $7 an ounce, I explained the reasons for our decision, disclaimed the hell out of it as 'not being financial advice' - just craziness in our own accounts, but clearly, if this was an "Oh look at me" kind of site, I wouldn't be putting up my trades, for better or worse, for the world to jeer at.  Admittedly, there's not much jeering at our silver move with the price over $20 an ounce this morning, nor does our 2001-2002 acquisition of a couple of gold coins in the $260-$280 range look absurd, either, now that gold is flirting with $1,000 an ounce.

 

My stock market account was trashed last year:  I essentially took a little over $1,000, made what seemed like they would be decent options trades, and promptly lost ever penny of it.  On the other hand, the commodity options have been amazing and the returns nothing short of remarkable.

 

All this is not to boast "Lookie here!" But, if you've been thinking about playing stock options, seeing me run over while playing in that street might give you some sense of caution. 

 

Our decision to buy farm/ag land  and flee the city, has also been very publicly done since the idea came up in 2002.  It, too has turned out to be a good move (to date) and the idea of sharing all these things has been to act the role of pathfinder.

 

True, we've also been guided along the way by the predictive linguistics work of Cliff at www.halfpasthuman.com, but some of the moves would have occurred anyway.  At age 50-something, almost 60-something, you know when TV shows about 'flipping houses' show up that the absolute peak of the housing bubble was upon us.  You had only to open your eyes to it.

 

---

Monday March 3, 2008