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Published Monday through Friday about 8 AM Central Time Except Holidays Depending on my mood...
Updated:
Saturday February
7, 2009
07:00 CDT
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Drug Lab Economics I wasn't going to do Saturday columns anymore but a number of readers have asked me to explain how it is that we can have 600,000 new people unemployed announced on Friday and then have the Dow zoom up a couple of hundred points?
"What do you know about crack or being a bag man for a drug lab?" I'd begin with, in an only slightly humorous way.
Professing to know nothing, as I'm sure you don't, I'd then launch into an "ask me what time it is and I'll build you a watch" explanation of the way it works: "It's all about Customer Service...remember that: Customer Service and demand drive everything. From what I read, the customers/people start small. They take just a hit on a crack-pipe- and then another - and next thing you know they've turned into criminals to support a death-spiral marked by a wanton disregard for Reality. Anything is fair game...morals get all twisted, right and wrong get all f''ed up, and next thing you know you're either in a crime wave, or you have an O.D. or all of the above. But the drug lab has made a pile of dough."
"Which has what to do with how the markets behaved on Friday?" you're thinking, noticing my pipe on the table....
"Look: It's OBVIOUS isn't it? This is all about pimping NEW DEBT."
Unlike some kinds of money that gets into people's hands, unemployment checks get spent - and damn quickly. So, when unemployment rates go up Friday, at least for some period of time until the benefits run out (or the State goes broke ala California) the economy is going to hang together in at least some fashion or other. The Baltic Dry Index is in bounce mode, got it? --- You can see what the market was 'getting high' on Friday if you just look at the Yahoo Economics Calendar for yesterday. (If you don't read this until Sunday, you may have to click on the 'last week' tab--- this is the price of being lazy and late.). See anything where the actual is different than the expected?
I'd draw your attention to the latest Consumer Credit Report which came out Friday from the bankster bailers at the Federal Reserve. I should spare you the reminder that Consumer Credit is the bankerese term for Consumer Debt - which might as well be called the prevailing level of Wage Enslavement, but you should be alert enough to have figured that part out for yourself if you've been visiting here for any length of time.
What you'll see is that (looking at the amounts in Billions of dollars, is that we went from 2,568.9 billion of consumer debt in November to just 2,562.3 billion in December. So that's how the Yahoo calendar came up with consumer debt decreasing by $6.6 billion for the month.
But that's not what got the market rolling Friday.
Nossir. I think it was the change in the annual percentage rate. Let me histogram you:
Thus, the Friday rally, which I'll admit was 217 points by the Dow, and due in part to the fine presidential speechifying, the happy-talk that the "Obama recovery plan on track in Senate" , and a coming speech Monday by our favorite taxpayer (when he can remember) Tim Geithner who has been playing the role of Son of Paulson in this money printing fantasy-frenzy.
Oh? I forgot to mention a sprinkle of pixie dust and a few hits on the crack pipes before heading off to Long Island for the weekend.
My more steely view is that one month of Fed data doesn't spin things around on a dime and that in order to get through this bad and not-yet-getting-better period, the economy needs to check into a serious recovery center; one that deals with basic addiction problems like food, roof over the head --- things like that.
So, while the corpgov lackeys are busily trading favors on the Hill this weekend setting up for next week's Big Stimulus Vote, I'll just get out a classic Beatles tune and fire it off on the Bose. Lemme see....Ah. Here's one...perfect music for the weekend in Washington....bring on the Sergeant Pepper album!
Fool on the Hill. Perfect tune for the weekend.
Then I'll spin up
Dark Side of the Moon by Pink Floyd and maybe
Alice's Restaurant after that...ending with something like
Lucy In the Sky With Diamonds. All of which is not to say that anyone associated with the markets, or politics, or Big Government, or the war industries is really on drugs. Of course not. The markets are rational, politicians have our best interests at heart, Big Government can spend us into prosperity, and the right way to get Peace is kill everyone who disagrees with us or withholds free resources. And I'm the Pope.
See you Monday. Be sure to lock up and don't forget to turn off the Bunsen burner when you're done. I'll be UPS'ing spare lighters and pipe cleaners to Washington.
And the Deal Is Somewhere between $780 and $827-billoin. Any chance I can keep the change? Split it with you?
The Next Einstein VP Joe says he can see a voter backlash to the stimulus bill.
And the Einsteins After That? "Congress risks criticism over luxury retreat trips..." Oh? N.S.S.?
And the Point Is? Spied a headline that "Venezuela behind on payments to oil contractors." Chavez is behind and it becomes an OMG headline. Schwarzenegger's whole state is behind on payments and could be repo'ed by China and MSM just buries it. Not part of an agenda somewhere, maybe?
Captain's Log US Navy Missile Cruiser Port Royal managed to go aground on a reef off Hawaii on Friday.
It's OK, we know how those damn little coral-critters can build up a reef in no time!
But seriously, don't you guys have like a depth sounder on those things? Hundred bucks at West Marine, you know...wanna get a GPS while you're at it?
Tell you what: On my sailboat I had Visual Navigation Suite - and so on behalf of US taxpayers, please pick up a copy and install it. Here's how it works:
You put VNS on a laptop. You plug the GPS NMEA output into the laptop. Load up the chart for Hawaii. The green boaty-thing in the middle of the chart is your ship. Now, the object is not to bump into shit....if this is too hard to follow, replace helmsman until you get one that understands. --- All kidding aside, I'm sure there's some logical explanation. But if you think your week went badly, can you even begin to fathom (pun intended) the paperwork these folks will be going through? OMG....
A Good Start "Dow Jones costs News Corp $2.8 bln write-down." --- Here's a flag from my logical-thinking referential integrity checker: How long will it take for the owners of media empires to figure out that since the cost of moving information around (thanks to the 'Net) is about zero, therefore the pricing power for information products has dropped to the point where cutting down trees and spraying poisonous dirty sh* that comes off on your hands on paper is not a viable business model?
And....with the advent of YouTube, how long before someone besides me (and I don't have time for it, so go do this make millions, and send me 2%) starts producing 10-minute "micro-series" product for the YouTube market and supports it with micropayments via PayPal? Bye-bye TV networks.....
Am I like the only guy who can see the future, or what? --- "Chicago Tribune plans job cuts, salary freeze..." --- OK, so maybe I am.... what of it?
Around The Ranch: It's In the Name From this morning's wake-up conversation about 4:38 AM...
Elaine: "So you knew that the name Smith came from someone in the family being a 'smithy' already?"
"Yeah..."
Elaine: "And did you know that Eisenhower means something like "iron worker"?
"Of course. But, since you brought it up, here's one I bet you didn't know: The family name "Short" comes from a family of very early and very bad electricians...."
(silence)
(rim shot)....no, it's the weekend. Screw it: (rum shot)
Scholarship, Scope, and This Week's You-Know-What I'd be lying if I didn't admit to some degree of envy of Fed Chairman Ben Bernanke's economic study of the Great Depression because in some ways, it uniquely qualifies him to lead the world's more important monetary authority. But while his economic scholarship may be peachy, there's the ugly matter of its limited scope; I hold that economics is a result of the social contract, a foundational element of it, but that the social self-interests are superior in most regards to just money. I'd point specifically to a passages in "As We Go Marching" by John T. Flynn (Doubleday, 1944):
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Why, sending an email to everyone in your 'contact' file and tell them about www.urbansurvival.com of course!
"Live on $10,000" Updated What? You haven't ordered the ebook "How to Live on $10,000 a year -- or less"? Suit yourself. We're all going to live it shortly, anyway. I just thought you might like a heads up by reading about how to do it before you get pink-slipped. But, suit yourself OR visit www.liveontenthousand.com or, click one of the following button:
Yep - still possible. I also took a bit of additional material that was pertinent from recent issues of Peoplenomics and included them. The whole thing runs about 65 pages, but it gives you a vision of how to not only live on the aforementioned dollar amount, but also how to migrate up the economic foodchain if you make a little more than that and do some active savings... Click here for the page with more details on it. ---- Last week's report is here. For back issues of this site, click here. (Goes back to 1997!)
Friday February 6, 2009 How A Depression Unfolds - Jobs We're in a hugely interesting period of time, one that arguably is one of the best possible times in which to experience Life, since there is just so much going on, so much opportunity to change at the personal/soul/spirit level, that nothing has been like it --maybe ever!
When I was born, which wasn't that long ago, there was no microwave cookery, no cell phones, no air conditioning in most cars, worldwide there were less than a dozen (or so) nuclear weapons. Land was cheap, the skies untainted by pollution or chemtrails, the first satellite was years away and solar power was a laboratory novelty used by photographers for light metering and that was about it. In photography, chemicals were the order of the day, computing was done by vacuum tubes, AM radio ruled the day.
But above all this, the social contract was solid. A middle class couple in America could look forward to the husband working in one job for perhaps 30-40-years, collect a decent pension, and have time for hunting or fishing. A commute of more than 30-minutes to work was unheard of. Transit systems were largely electric save Southern California where diesels had been bribed into service based on arguably false pretenses.
A wife could expect to be a 'stay at home' mom, do some canning when local fruits and vegetables were cheap, and projects like picking blackberries were, at least where I grew up in the Pacific Northwest, one of those summer chores that paid dividends for the rest of the year. There were no gangs because the legions of stay-at-home moms wouldn't hear of it; you got out of line and an adult administered a directly felt lesson in what authority was all about with a hand, hairbrush, or even a belt. No one called the cops claiming 'abuse!' and a legal industry based on payback and retribution was still decades away.
People not only owned large equities in their homes, but they had regular mortgage-burning parties and the 'special interests' had not yet completed their insidious, slow-motion coup d'état. Government was still by and for the people, and it was a fine time for liberty and the pursuit of happiness.
THAT was the spring and summer of the Kondratiev Long Wave in economics. It was the period following the long wave Winter, when prospects were good. A bit late, the pop song "The future's so bright, I gotta wear shades" really was how the country felt.
But that was then; this is now.
My friend Jim Goulding's book "Winter is Coming (94
pages, free, read it on your lunch hour) a number of years
back looking at the work of Strauss & Howe ( The Fourth Turning
Excellent strategic thinking and a prescient outlook, given Goulding wrote that in the fall of 2003.
Just this week, we saw Dick Cheney predict the 'probability' of another terrorist attack orders of magnitude greater than 9/11. And, there's of course California running out of money and in places like Illinois, news reports are asking a most pertinent question: "State can run out of money, but can't file for bankruptcy" so whatcha gonna do?
In a word: Watch.
This 'Year of Transformation' is only a tad more than one-twelfth into it, yet already the headlines are about that "Revolt Spreads Across the Globe as "Crisis" Continues to Unfold Unrest rocks the streets of China, France, Russia, Mexico, and elsewhere. And it is spreading..."
It is, in some ways, very much like the 1920's and 30's globally. Somewhere is just waiting for a beer hall putsch, like the one that followed the Weimar inflation in Germany. As a little science experiment, let's see if we don't see an iron-fisted ruler arise in Zimbabwe, the closest thing to a Weimar analog in present day, or whether Robert Mugabe will both orchestrate the inflation and be the megalomaniac filling that social cycle. --- Goulding's bespoke worry from 2003 - devaluation of the dollar - is cropping up right on his timeline, though: No hiding from that one.
While the Dow is off it's 2007 highs by about 40%, gold has managed to hold above $900 - a mere 11% loss of value by comparison. Again, evidence that at least relative to one commodity, paper is being devalued. Of course, trade is collapsing all over the place because [don't mention this around people you don't trust] we're in a Second Great Depression right now.
Like all previous Depressions, this one is going to last longer and bite deeper than anyone can imagine. For heaven's sake, we haven't even gotten to the blow up of commercial real estate; that's still in the bull pen warming up. And famine - soaring food prices - shortages and a great turning inward by masses of people? That too is still just barely visible at the event horizon, although if you key word "draught" you'll see that "China suffering worst drought in 50-years" and while crops are failing from drought in Africa (Kenya), the report out of Australia that the ocean is believed responsible for droughts fails to point to significant ameliorative action. One could go down to the beach and yell at the tide, I suppose, but I doubt that'll do much. --- While I've been telling you for some months that you should "Watch out - food prices are going through the roof this summer..." based on the www.halfpasthuman.com predictive linguistics work, the number of new 'Victory Gardens' in America is likely small. This despite reports about the coming California drought's impacts expected by experts. In fact, says Channel 10 in Sacramento-Stockton-Modesto: "Officials: Worst Drought in History Might Be Coming."
Remember the Robin Landry-ism? "What kicks a recession into depression is a famine..."
So if the MainStreamMedia is not exhorting and cajoling you to plant a garden - and in half of the country you could get the first couple of hours of work done on it this very weekend, instead the HUGE stories that should be holding national attention -- like "Virginia drought prompts waivers for hay, feed haulers" - we get reworked 'heart tug' stories from the MSM about this little girl's murder, or so-and-so's trial. And OMFG what a terrible thing for some iconic athlete to take a hit on a bong! Dijjah see that? A hit on a bong! ---- The problem with the future - especially if you get to see bits and pieces of it clearly and well in advance if you happen to befriend a time monk or two, is that there's an incredible sense of frustration. My friend chief time monk Cliff describes himself as a 'raspy old bastard' because there are going to be people who 'get it' and people who don't. He's made a personal policy decision not to waste any of his time arguing with those who don't for the simple reason that it's like trying to teach a pig to sing: You're not likely to do much more than irritate the pig and frustrate yourself.
While we agree that most people are well described by a few choice words ["lazy, dumb-shits" comes to mind] I continue to be unabashedly hopeful that MainStreamMedia will figure out where the 'hole in its soul' is; it's obvious! We don't have a national focal point or focal person upon which the media can depend for cogent, well-founded criticism. So instead, we get fed political hucksters and special interests.
Not that MSM doesn't have some incentive to start looking at how to mold the future into something a little more comfortable. It's just that what's the economic incentive to do so when you can hire one talk-show host to fill up hundreds of radio stations and reach into every corner of America and then use the same talent (I use the word loosely sometimes) to do play-by-play! What absolute genius in cost-reduced programming! Oh, sure, it wasn't cost-reduced enough to keep WTKI-AM in the Huntsville area on the air, but hey! Cost whacking is cost whacking.
I should mention the newly empowered democorps may hold hearings on talk radio and the death of the fairness doctrine.
But, facts are facts and the fact is that America has been Bush-wacked and out-foxed by media moguls with dollar signs in their eyes. That Rupert Murdoch's News Corp lost $6.4 billion in Q2 may be related; I don't know. But, not like they're alone: McClatchy lost money in their most recent quarter, too.
What I do know is that the War On Savings has been declared and is being waged right now in Washington. This morning's jobs numbers, which I'll get to in a second are wholly the fault/responsibility of the previous administration's fixation with lining the pockets of the already-rich will be argued by those who've quaffed the democorp Kool-Aid. That it's because of those damn democorps will be just as stridently argued by folks sucking down the other flavor Kool-Aid.
Along the way, "GE's chief warns on US depression threat" is reminiscent of an old military axiom: "I haven't met a man on a battlefield yet who didn't believe in God." Facing financial collapse, I expect the flood of True Believers to really ramp up the hawking of their Big Government wares: "Gross says U.S. must spend to avoid Mini Depression."
President Obama, while repeating the absurd concept of 'spending our way into prosperity' continues hopeful that the Senate will come up with a $900-billion stimulus plan today.
If that happens, it's just another nail in the coffin of the US dollar, and it's really just huge slabs of pork that don't get to the core of the problem....but just what is the core of the problem, you think?
Ugly Answer you won't find on MainStreamMedia: We don't have a sustainable paradigm and this one is blowing up. --- Well, now that we have the foreplay out of the way...and we can see events in a nice, nonpartisan, detached kind of way, we can turn to the biggest story (lie?) which will bounce around the MSM today (and will echo over the weekend and spill in to the 'stimulus' debate today)...
Job Numbers Here we go:
Now, some of my favorite parts. The Underemployed and underutilized number? 13.5% in December (last month's number) versus 13.9% in today's report.
Which reminds me: A reader in Luxembourg shares this:
Ah...but we know where economists go for a good screwing, don't we? --- Humorous Aside: In a second email this reader offers this cool insight:
My kind of straight-thinking fundamentalist. High Rollers --- Tell me again: Why are they too big to fail? Oh yeah...paradigm preservation...How silly of me to forget. Couldn't have just paid off the folks who got screwed with FDIC insurance and saved all that future 'stimulating' now could we? What? And have unsound speculators brought to heel? ROFLMAO....
Driving Downward "Toyota sees first annual loss since 1950". Oh what a felling, huh?
Strange Bedfellows How is it that "Russia to help U.S. deliver cargo to Afghanistan"? The moved forced by Kyrgyzstan closing a key base to US operations. What was going to be a 2-year visit has turned into eight and the locals there are not amused.... Where this gets twisted is that Russia gave the Kyrgyzstan folks $2-billion...so I'm wondering why would they pay $2-billion and then run around and run our cargo....something more going on, eh?
---- snip and save section ---
Coping: A Jim Rogers Lecture Get bandwidth and 7-minutes where you can have your speakers on then click here.
"Find the thing where the fundamentals unimpaired and that's what you buy..."
Too Many Governors? Hey! Here's one number which I think I will start tracking: Out of the 'workforce' in America - 153.716-million how many do you figure are in government of one stripe or other?
22.539-million.
You got it cowboy: 14.663% of the workforce is 'government' But that's not clear enough. Let's instead consider what percent of just the working people are working at governing us:
15.86% of workers are doing "government." One person out of every 6.3 people working today in America are being paid for by the other 5.3.....LOL.
No, don't hold your breath waiting for MSM to report that number, LOL.
--- Send snip and save items to george@ure.net --- end snip and save section ---
Around the Ranch: Better, thanks Zeus's eye is much better - looks a little wonky with one eye dilated but seems to be open much of the time now. Should get him down to the vet next week for a follow-up, though.
My flu is far enough gone that I can get back to meetings between now and Monday to work out the new direction for Independence Journal.
Rebecca of graphics came up with this for a concept...Amazing what a couple of snap shots of Elaine and I can be morphed into...
Pretty good huh? But, we have a problem: I found a note slipped under my office door about 4 AM today. The goats are demanding Screen Actors Guild scale for any appearances on the reworked web site if there's video...they say it's not covered in their existing contract.
Crap. Hey! Wait a minute! Who was that media lawyer and why are they drawn to goats?
Thursday February 5, 2009 Stand Up Thursday Sometimes the economic news is just so bad...just so unbelievable, that the best coping tools in my personal skills war chest usually come down to two favorites: The bottle of el Don and humor. Being an adult (or marginally so) I really can't afford to take as many shots of el Don as I report, but balancing that off, my sense of humor on matters economic ranges much wider than I often write. ---
--- At the core of the economic problems in America are the twin myths of fractional reserve banking, which our graphics department will explai0n in a moment, and the idea that an 'interest' bearing system can work any longer than, oh, 84-years or so, before completely blowing up; which in case you haven't noticed is going on right now. ---
---
--- The problem with most economists is they have more formulas than sense, a keener ability in algebra than logic, and a firm belief that in an economic system with $100 in circulation, interest on a total of $100 of lending can just magically appear and "It's OK!"
Except for the tiny detail (that IT'S NOT!), it's a perfectly understandable position. Think about this...Where does interest come from in a sound money system? Say there is $20 in the whole world and you have it all. I am flat-ass broke. I borrow $10 at 20% interest all due in one year.
Spin the clock forward one year. You still have your other $10-spot. I have gotten back that $10 and am ready to pay you. But, since I also have to pay you $2 of interest, just where the hell do you suppose that comes from?
Answer: We 'make it up'. Someone off stage prints it up and throws it in.
Except, of course, the making up is incredibly convoluted in an abracadabra sort of way.
Maybe you have NOT read enough linguistics to know that abracadabra is from the Aramaic "I create as I speak [ evera kedevera] which is related to the Hebrew evera which has the further implicate of 'from nothing' such that a full meaning of abracadabra distills to something like "I create from Nothingness as I speak". Hide that concept well enough and make it laudable and you can bag a Nobel in Economics.
Who needs a study of linguistics/semiotics when we have the "Federal Reserve Act?"
I wrote with a colleague in very early 2001 that fractional reserve banking will inevitably blow up (e.g. go into an unrecoverable nonlinear region) somewhere around 84-years into a currency regime unless the 'clock is reset'. Which is what Depressions are: Clock resetters. You with me?
That note is here including how we got to the math of it - and even if you're not into number crunching, you'll see that I wasn't any more acquainted with a spell checker then than I am now.
Rebecca, who does graphics for this site, has created a dandy
visual of what happens to the public's tax pie when it gets to
Washington:
(apologies to the linguistics folks for the use of the 'pie' imagery...)
So to sum up:
Now you have the 'thinking tools' to see what is going on not only in America, but in all the other countries of the world which have decided *NOT* to answer the hardest of all economic questions ("Where's that interest come from, again?"). Instead the answer is "Shut up while we just print it up...no harm in that is there?" ---
--- Instead of reading Rousseau, a sincere student in search of economic truth should probably start by reviewing some of the excellent video is available on YouTube like this one.
The answer is by promoting The Big Lie...namely that money is the most important thing there is and that it is somehow beyond questioning. As long as government can criminalize mentioning that "The Emperor Has No Clothes!" the game goes on.
But then one day, 10-million Americans wake up kicked out of their homes, the economy is on the ropes, and there's a huge danger that a mass awakening will occur and people will suddenly question The Big Lie.
this is where it gets interesting - and the social contract gets rewritten, but the Liars behind systemic usury always lay the foundation for their own resurrection, which as I explained yesterday, is why Big Government always finds that More Government is the answer. How long did silver certificates last? Only until the social contract with the people who make America's wealth could be hoaxed again.
And, since that time (somewhere in the late 1950's to mid 1960's) the interest component has been zooming up like mad and the working folks that create wealth have been screwed out of it by the paper-money mongers. --- All of which gets a bit far afield from being Stand-up comedy, because it's certainly no laughing matter. However, if you can't laugh at the comedy of it - and find some way to extract yourself from the charade, you're gonna get angry and that's not a happy ending.
Speaking of which: A reader asked me after yesterday's report:
I want to be really clear on something here - and this is a matter of personal choice. When I use the word 'overthrow' I refer to entirely peaceful and legal means. Legal means are best because anyone taking up arms or refusing to pay taxes, or conform with state powers immediately goes onto the endangered species list, as anyone who watched Waco knows.
So from a strategic planning perspective, what are the options? Turns out there are many.
One of these days I will get around to rolling out this project - a national political recall information clearinghouse - because you don't need guns or going off lawbreaking to effect regime change. Just a concerted legal effort to recall public officials who breach the public confidence and trust. Like those sorry folks who were bought by banking lobbyists and didn't keep faith with people who put them in office who were calling at 300:1 rates denouncing the bailout insanity.
"I voted what I felt was right" would say the pol. But the voter should respond "We put in in office to represent us - not come up with YOUR own feelings on crap...got it?"
So no, you don't need an uprising. The best way to gum up the works is to study a system carefully, operate completely within the law, and declare yourself powerful in a way that is independent of paper money.
Lot's of folks out here in what you may think about as the 'backward/rural/hick' areas of the country that have figured this out - live ijt - and sit back watching what goes on in Washington and other world capitols with a sense of awe, anticipation, fear, shame, and hope, knowing that in the end they're still going to eat because the family has own that little farm for three generations. --- Meanwhile, back at the pressing/scary/exciting headlines of the morning, we read that "Obama warns of need for stimulus bill right away..."
What you may be missing the how the much hyped executive salary caps are nothing more than fear-mongering by the money printers. "Goldman, JP Morgan won't feel effects of Executive Salary Caps" reports a Bloomberg story.
Wanna see some of these outfits paying back their fed bills in unbelievably short times? Amazing how this works, isn't it. And you know what? If, when push comes to shove, these bankster outfits can pay back quickly and get out from under salary caps, answer me this: Did they really need to be bailed out in the first place? Oh, this is such high theatre!
The answer is coming - as I ponder setting up a national recall clearinghouse to remind folks that there's a simple way to take matters back into the public's own hands- It's easy to recall. --- Since everyone with a good economics education knows that we are in the death-rise portion of the compound debt curve, what do you think the easiest course of action is? Answer: Slam on the interest brakes. So when the "Bank of England Cuts Main Rate a Half Point to 1%" you should just smile and understand that market dynamics of growth and recession, with intermediate interest rate changes is like a big skateboarding half-pipe. Rates go down, the rider head down, and rate go up again on the other side. Graceful...but like half-pipes, does this really get us anywhere? --- The MainStreamMedia/ Paradigm Promoters would have us take headlines like this one seriously: "U.S. Automakers 'choking' without credit await Fed Loan Program."
You're supposed to be dumb enough not to connect the facts over on YouTube ("Ford Fiesta ECOnetic 65-75 mpg...Will NOT be Sold in USA.") with the death of car sales.
Lemme see here: America had to wait years for SmartCars and now Ford is holding back, You smell that funny odor yet, or are you that hypnotized?
Well, enough. Stand Up. It's stand up Thursday and while comedy is the vehicle, so to speak (along with way too many puns) the facts seem pretty clear. And they are no laughing matter.
Productivity Drops Well, Hallelujah. Economy taking brought down some productivity numbers. Who'da thought?
Durable goods manufacturing productivity was down 13.4% in the fourth quarter. --- Meantime, retailers are generally reporting sales down, but the number of people going to Wally World are up...
--- Snip and Save section --- Coping: Spinning Depressions Well, lookie here...I'm not the only one who has noticed that the Smoot-Hawley Tariff Act was wrongly beaten up in the last Depression. Yessir, it didn't cause the Depression any more than the man in the moon. It was cast (like this one) by events many years previous (Clinton/Bush this time around and the serial bubbles).
So here's this interesting email:
I sure wish this fellow had included his phone number - would love to have a chat about the rest of the dynamic. Namely, that the reason businesses didn't spend (after Smoot-Hawley) was that worker pay was already collapsing, demand saturation had shown up - which is the Grim Reaper behind the curtains...and yeah...if would be a long conversation. Maybe it's just as well we keep to our work..
Another Chance for Sound Money Congressman Ron Paul's bill to abolish the Federal Reserve is here: Where Do I Get One Department Where's the line? "State employee: I get $93,803 for no work Native American claims retaliation by state superiors who set him up in an office without meaningful tasks " --- Send snip and save items to george@ure.net --- end snip and save section ---
Around the Ranch: I must be feeling better My sense of humor/wry/awe is coming back to life. I've lost 8-pounds from this flu so far. Figure another 10-12 by the time it runs (pun intended, LOL) its course.
"And your cost is only 10-¢ a meal!"
Hell of a diet plan!
Wednesday February 4, 2009 New Depression, Old Whipping Boy Can't be that we're in a Depression, could it? But, yeah... Let's beat up on 'protectionism'. Just what the globalists ordered.
Granted, I've only been studying the likely track for the Second Depression for about 34 years -- since I was introduced to the concept over a couple of martinis at Trader Vic's in Seattle by the late Dr. Paul Erdman; so understand my knowledge of how depressions work is limited.
But one of the key things that seems to be playing out now - as was played out in the previous Depression - is the false assertion that international trade and protectionism might somehow be a part of the evolving global financial mess. Specifically, the headline "President Obama to water down 'Buy American' plan after EU trade war threat" underscores for me how the globalist elites are willing to do anything they can in order to protect their system of worker exploitation under the thin guise of 'global prosperity'.
Since I'm still down with the flu (although it seems to be running its course) let me give you the short tirade about how global trade works:
Ok, that's how international trade works. On one side of the equation you consider the costs of making the product in the country of use. If you make a product for the US in one of the US states, you would have to pay whatever the prevailing local labor rates are, taxes, and of course materials costs. If you make it offshore, the equation is cost of production in least-cost country, cost of shipping, currency exchange rates, duties and tariff's (which are pretty much gone) and the tax savings because the goods are now an offshore good.
Easy to see why America's largest IT operation is India and why Kia is challenging upscale German road iron. Got it?
Why You Should Embrace a Depression OK, you're thinking, if the first Depression was a function of normal financial system overshoot - where prices of certain assets were run up out of all proportion to underlying valuations, which in turn could not be corrected without catastrophic results when pricing power collapsed in the late 1920's, setting off the fall of the house of cards then, where did the blame for Smoot Hawley Tariff Act come from?
Clearly, an increase in tariffs had some impact of international trade:
Now let me ask you something - because as an economic fundamentalist I have to make a point here: Where is it cast in stone that we all have to work harder and harder just to keep even? Where is it cast that more trade is better? Isn't it just possible that ever-increasing trade simply ramps up the burn-rate of resource depletion?
If you want to solve most of the world's growing list of environmental issues, here's a dandy - simple solution: Have everyone start working 3-days a week. All of a sudden, greenhouse gases, energy depletion, and all kinds of other problems become manageable. Focus on the stuff that matters: gardening, reading, personal relationships...forget the dollar mania! Let crooked banks fail - the country made it through the crisis in the past, and we will again.
However, as long as the manic high tech lifestyle fixation can be promoted the interests and excessive gambling debts (via derivatives) of the multinational/anti-human corporate giants will be blamed on 'trade laws.'
What's missing from such simplistic analysis? The real causes of any depression I've ever studied seems to come around to unsound money, speculation, excess production of goods leading to a lack of pricing power, in many, a key technology change, and famine.
In the 1930's example, the unsound money became clear when the government had to confiscate gold. The excess production was evident as farmers dumped milk and burned crops because they couldn't get enough money to make their land payments; prices had fallen so low. That was all set up by the fundamental change as gasoline powered equipment replaced 7,000,000 draft animals (mostly horses) that had been used to power American agriculture in the early 1900's. It was the displacement by a key technology that was the kicker. It's notable that as draft animals were going by the wayside, a new technology - radio - was coming to the fore.
Just as the fundamental technology cause of the Great Depression was spelled out by Richard T. Ely in "Hard Times: The Way In, the Way Out" and it was accompanied financial excesses, so too, today's economic depression will, I expect, over time be shown to be a result of Moore's Law in computing having huge impacts on our 'old ways of doing things'. Oh, accompanied by what? Financial excesses and criminal behaviors, just as before.
Automobiles, tractors and their combined massive impacts on the economy of the 1920's caused the displacements which resulted in the 1930's Depression. The internet, massive computing horsepower, and human displacement by robotic automation are all in the process of revealing their huge economic impacts in this latest Depression. Pretty simple concept, huh?
Amazingly, most mainstream economists are busily coming up with new formulaic dispensations from their ivory towers - just like the Keynesians did - ignoring the fundamental dynamics of systemic change. --- What's really going on, as I see it, is that the losers who made bets which have soured because their projected futures gains not take the cumulative impact of underlying technology changes into account, don't want to be held accountable for their debts. They want you to pay.
As a result, the Nation's money is again being debased by printing up more than is justified on a goods production basis. Simple, huh?
The reason you don't hear about realists like Ely, and instead B-schools force-feed Keynesian economics is that the latter argues for Big Government. After all, one of the biggest problems to the Keynesians is that of "Excessive savings".
Saving money causes depression? I file this kind of stuff under the heading 'crack-pipe economics'.
Let me see here: How did the 1930's Depression work out? Big Government held hearings and concluded in a marvelous example of self-justification that the answer was what? More of the Same! More BIG Government. Woo hoo!
Say, do you think that's why something that cost $1 in 1940 costs $15.40 today, do you? Naw...tell me it ain't so!
Want some more economic heresy? OK. "Why do humans work?"
There's an obvious failure of the economy to perform as touted when only one of my parents had to work 40-hours a week to raise a family and own a house, a car, and a TV...while in today's world, some 40-years later, not only do both parents have to work 40-hours a week, but one just got laid off and the house has been foreclosed. WTF? Two parents working was once a choice. No more - yet the political types insist the Nation has made progress. Oh yeah?
The greatest con in the world is that somehow going from one family member having to work to support a family to both parents working is sold as 'progress'!!!
Keynesian types can be excused, as they are in the business of paradigm preservation. What they have yet to be held accountable for is that in their slander of 'savings' they have caused it's opposite: Unchecked debt inflation. --- So all this related to this morning's headlines how? Lemme see....
Panasonic is cutting 15,000 jobs, shutting plants. Excess production compared with demand has destroyed pricing power; a modern-day analog to the dairy farmers dumping milk in the late 1920's.
"Job Loss, oversupply weakens multi-family" housing outlook for the balance of this year says a report out of St. Louis. Does this mean apartment house prices could come down hard? Maybe...
Bright spot? One of the most interesting headlines of the morning - which isn't being trumpeted by the MSM is the story out of the Reno area that an "Assessor to ask for decrease in assessed property values."
The Keynesian hangover - massive growth of government - continues to build unchecked. This part of an article in "Contrarian Profits" caught my eye:
Turns out a number of states - other than New Hampshire which I told you about earlier this week - are considering petitions to Washington saying, in effect, if we didn't grant you power specifically in an area of governance, we're not going to take marching orders from you.
Examples include Washington State, Arizona, Oklahoma (from 2008), and Missouri. --- So when does the American Dream end? Maybe it already has. You're just a little behind the curve since about the only fellow on MSM getting it right is Lou Dobbs who points out with some regularity the absurdity of the so-called US Chamber of Commerce opposing "Buy American" initiatives. Slick paradigm marketing, huh?
"US car sales below 10m despite discounts" says the Financial Times. But that isn't the story. The real kick-in-the-ass is that Ooops!
So, while the whining from the financial community about salary caps of $500,000 being announced by the Obama administration will be expected, the real problems of America come down to promises versus performance:
What you thought you were working 40-years for was:
What you got and are getting more of is:
Are you getting even a little insight as to why the social contract is ripping globally?
As we are now halfway through another work week, be ready to pinch yourself tomorrow when productivity numbers come out: Remember 100% productivity means no humans need apply. Oh, and Friday's unemployment numbers should be a gem, too. I can hardly wait.
In the meantime, while Depressions are big and scary, I doubt they are any more so that Omni government and the continuing loss of our Constitutional Rights and Liberties.
Wanna talk about 'signing statements' some time?
(From a Tuesday afternoon update) Worse Than My Flu? Viral marketing...yes, something I would normally not have let get past my 'shields' but I was sucked in my the IHC content...
So what is it? IHC really?
The web page source code reveals a hint:
And the WHOIS listing on the net reveals:
So, I get to blame my flu for my getting a viral marketing piece, LOL. Better content, at least in terms of 'What's out there" from places like www.terminusreality.com. Now comes the personal choice: Will I go see the 2012 movie when it comes out, or pass based on this kind of marketing?
--- Tomorrow, assuming the flu continues to improve (or more correctly, my recovery continues) I promise to get back to my more structured reports... --- Tuesday February 3, 2009 IHC: The Larger Problem is 2012 Oh, sure, everyone is wailing and moaning about the economy, and such, but there is a possibility that there are much larger problems ahead just a couple of years out from today which just maybe you should devote a few brains to pondering.
A great starting place might be the Institute for Human Continuity web site. Among other things, you can check out some of the possible 2012 disaster scenarios that include things like a Planet X, crustal displacement, or a major solar flare that toasts earth,; not to mention what it does to all electronics on the planet.
The IHC is planning a number of survival efforts to ensure humankind's continuity and toward this end, you can sign up for their lottery...which I assume, if you were to win, might increase you chances of getting to 2013.
In terms of news items, the group is warning Dutch citizens to start acquiring disaster kits because they figure that heating in the polar regions could raise sea level by 11 inches in 2012.
Not that you need to be Dutch to have problems in 2012, as the IHC web site claims that "In 2004 IHC scientists confirmed with 94% certainty that in 2012 cataclysmic forces will decimate the planet and much of its inhabitants. Yet governments of the world refused to listen."
All of this is worth noticing because later on this spring, the predictive linguistics have been pointing to the beginning of public awareness of the 'global coastal event'. So, what are the odds that this is something like the leading edge of awareness of such things? 100% maybe?
Barter's Return As I read the report out of Miami that hundreds lined up to compete for 35 fire fighter positions, I got to thinking "Wonder how fast barter will make its return into global economics?"
A couple of stories might point the way: "Barter is New Medium of Exchange as Credit and Payment Systems Collapse " says one story. Even a "Russian maverick backs barter to combat crisis."
That settles it - this weekend in Peoplenomics, we'll get into the nuts and bolts of bartering.
Global Revolution Growing As we've been reporting for what, six months? The failing economic picture is leading to a lot of global unrest. Here's a summary of the unrest in France, Russia, Madagascar, Iceland, Davos, Greece, Guadeloupe, Bulgaria, Latvia, Britain, and Lithuania. The number of countries experiencing social unrest will probably top 50-60 by the time we get to the summer of hell.
Feel better now? no? Well, here's something that may help:
New Hampshire's HRC 6 Seems that those doggone Constitutionalists up in New Hampshire are pulling Washington's chain again with a piece of legislation called HRC 6. Basically, the New Hampshire bill would tell the federal government to take a hike on matters where power has not been given to the feds. Specifically:
A friend in South Carolina sent me an email saying that he was personally embarrassed as a Southern to have such a fine State's Rights position taken in the North while the South continues to kowtow to runaway federalism. --- Meantime, California is broke, so I figure some states will have no choice but to play BOHICA with anything coming out of Washington.
Ice Deaths Mounting That ice storm of a week or so back has now claimed 55 lives and 24 of those in Kentucky. Meantime, CNN reports a quarter of a million are still without power.
This is one of those stories that I'd urge you to think about because there really are some personal action points that can be learned. One could start by asking "If the commercial mains went dead, where would my electricity come from?" --- Britain continues to dig out from the worst snow in 20-odd years.
Iran's First Satellite Report in the UK's Guardian is worth noting. Seems that Iran has launched its first satellite. But what I found really curious was the wording of their headline: "Iran launch first homemade satellite".
Homemade? Don't know how the word 'homemade' plays in the UK, but here in the Checkbook Republic "homemade" can be used in a somewhat pejorative way. Hmmm....
While Iran says it's satellite will be used exclusively for 'peaceful purposes', I'm left wondering what data they so desperately need that building a satellite is cost-justified. But that's old cynical George. Putting my consultant hat on I'd suggest that just buying LandSat data would be cheaper...even cheaper? Google Earth.... --- "Obama has begun discreet talk with Iran, Syria" says a report. But they can't be too discreet, if we know about it, can they? ---- Then we see the report in the Washington Post today that North Korea is getting ready to test fire another missile which might have the capability of getting to the US West Coast. Hell, not point sending missiles...just show up in Sacramento with a couple of hundred bucks oughta do it...just buy the state.
Gold Outlook How does $1,500 an ounce in the next 12-15 months sound?
--- snip and save section ---
Coping: Here Comes the 'Prime Directive' The headline in the Financial Times that goes into some detail about how NASA and Google are setting up a school in Silicon Valley to prepare scientists for the coming time when computers are 'smarter' than people presents an interesting question; one which has been the plot line of dozens of science fiction books.
While it may be possible for computers to be bred which can out calculate humans, and there are risks attendant to that [like they could decide humans are a virus to be eliminated] the larger problem I have with the notion of 'the singularity' boils down to a definition of 'smart'.
While its true that on mornings like this, even an antique Commodore 64 can 'out think' me, but I'm at least 'self aware'. By that I mean that spontaneous emotions, touching 'the stream' (the force if you're a Star Wars fanatic) or deep meditative states will likely remain elusive.
Moreover, stream-touching, deep prayer/meditation and such seems to have the ability to actually 'touch' and 'influence' the future because of the intimate relationship humans have with the Life Force.
While computation limits will continue to fall, thanks to Moore's law, I've spent many hours trying to figure out how to write a computer program that can actually influence the future. One of the learning points of the web bot project is that to a limited degree, future-jacking is possible, but to what end? More money, end of diseases, end of famine? But then what?
Part of the joy of being a human is working through the tests and difficulties of life (even flu) because each event is an opportunity to appreciate the larger dance with Universe. Yeah, computers can count, slice & dice databases, and performance massive math calculations. But there's more to the concept of 'smarter than humans' than that.
Until computers are able to develop, discuss, and help to resolve differences between humans, under a consistent moral and ethical framework, I'll remain skeptical.
As best I can figure the whole earth is in a race...between that point where we all learn to get along and the other path, the one ending in self destruction.
And since we're a good distance down this latter path, while the idea is laudable, seems to me that it's a bit of a long shot.
Lowest Common Denominator Programming Having spent nearly 20-years of my working life in media, I've always been appalled by the concept of 'lowest common denominator' programming. What's that? Well, radio and TV station programming execs are always trying to get more listeners (or viewers) and it's well established that repetition of a 'Top 40" garnered many more listeners than deeper radio station playlists. Which is why if I even think a radio station is going to play "Hey Jude" one more time, I will hit the button and go elsewhere. Problem is that LCD programming works and once you come to terms with that, you'll likely become depressed with the general public taste.
Why mention this? Two reasons this morning. One is the report that "CBS picks up arranged-marriage series" got me to thinking about how TV programming execs have the same problems as their radio counterparts.
And #2, while I was snoozing through my flu yesterday and Elaine was out feeding birds, some TV show was offering people $20 to pull out a nose hair and eat it! I swear I can't make this kind of stuff up. Bidding got up to $100, if I was following right.
Brought up an interesting thought: Would the Founders have entrusted the public with 'voting' if they had a better understanding of the statistical performance of the mass-media hypnotized public?
Not that it matters, for sure: Corpmedia/lobbyists and spinsters have already hijacked free decision-making. Still....
Should I even mention the Onion's fine little satire piece "Asian Teen Has Sweaty Middle-Aged-Man Fetish"? I know there's a series in there somewhere, too... --- Speaking of media...here's support for my position on talk show hosts trying to be sports announcers:
Mariner's Myth Remember that story from Monday that was headline "Shipping industry runs short of young Mariners"? Well, guess what: Seems that US mariners aren't in short supply. Check it out:
Well, there's the problem, right there! Who would want to pay a well-qualified US fellow $15,000 a month when for about $3.25 an hour, you can hire folks from wherever? Just get 'em a SOLAS cert and if they run the ship aground, hey, that's what insurance is for, right?
Money for Nothing How to fix the economy? Simple says a reader:
Then we'd have a budget surplus....
Peoplenomics Follow-up Remember the Peoplenomics report a couple of weeks back on how living aboard a boat takes a certain kind of person and is fraught with risks if not done exactly so? Here's a liveaboard story about how "2 rescue man from icy South River" - seems a liveaboard got wet... --- Send snip and save items to george@ure.net --- end snip and save section ---
Around the Ranch: Figuring Out Zeus, Flu One of the luxuries of having the flu is being able to not answer the phone, leave the heaping up inbox of mail where it is - without the usual guilt - and focus on things that really matter. Like the cat's gas issue I discussed yesterday.
It hit me like a ton of bricks yesterday: Because he's getting the feline ophthalmological version of Cipro for his scratched eye, it is no doubt ingesting some via tear ducts! Aha! That would screw up his digestive flora and in turn that would explain his...er.....EPA violations. One problem solved.
Second problem: Is this a nasty cold or the flu that I've got? Chest is relatively dry, nose is not running, body aches like crazy including head, lower back, legs...yup...it's flu. Rather than continue with aspirin, I had a couple of left-over serious pain pills from my last root canal. Even had some leftover penicillin, too...so no pneumonia and for that matter, no aches. Temp is running in the 99-100.5 range...so this miserable thing will just run its course and I will be healthy for another 4-5 years till I get whacked again.
Thanks to everyone who sent in suggestions...the one that seems to be working best is just getting lots and lots of sleep.
Monday February 2, 2009 By Way of Explanation You'll notice that this morning's report is a lot shorter than usual...I have come down with a hum-dinger of a cold/flu whatever it is. Temp as high as 103º and impaired breathing as the asthma kicks in. And, to make it better, we had 50-cent (the coin, not the rapper) sized hail last night. Still, I feel an obligation to provide a little comic relief from the oh-so-serious MainStreamMedia, here's a collection of notes I made overnight.
You'd Be In Jail Department If you goofed up on $146,000 in back tax payments, you'd probably be in jail. You need to take lessons from HHS Secretary Nominee Thomas Daschle. (If you missed Geithner's course.)
Money For Nothing Asia Inflation, exports, point to rate cuts figures a Reuters report. Call me when they start paying me to borrow... Curiously, "Shipping industry runs short of young mariners" says and AP report. Shipping out was how Louis L'Amour started...so grab some books and paper and head for the hiring hall...
The Global Revolution More calls for Vlad Putin's resignation as rioting continues in Russia. Meanwhile, "Governments across Europe tremble..." is on a similar track.
Are They Kidding? Department "Scientists: Cows with names produce more milk" Wonder if this is tax dollars at work?
Chinese R.E. Want to sell more real estate? Maybe learning Chinese would help...
Thank You Note Remember last week I put a note about www.urbannaturals.net on? Well, apparently some generous folks bought some of the hand crafted soap from these folks (besides me) and I got this really nice 'thank you' note worth sharing...
Thanks to those who bought some product... ---
I'm going to take some more aspirin and see if I can knock out
this flu or whatever it is. See you in the morning.
Before the chart, a little background: Once upon a time, a long while ago, I observed during my quest for 'truth' in economics, that the PowersThatBe, 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.
So one of our charts for Peoplenomics subscribers oughta be widely circulated - it shows that if you line up the peak of the Dow in January 2000 with the peak in early September of 1929, we're on a very very close replay track. Much closer than even the chart shows if you were to back out inflation, and put in the effects of 1929 deflation, but that'd be real work, and I'm sort of lazy if the truth be told.
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:
"George, that's only a coincidence!" your monkey-mind will protest.
Why sure it is...you bet. A 9½ year long coincidence...yessir....just a coincidence, I'm sure...
Write when you get rich,
George Ure, The People's Economist |
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) and said
something very prescient and what would kick us into Long Wave
Winter somewhere between now and just a short ways into the
future:
