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Government Outlaws

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Government Outlaws
Roger Wiegand is Editor of Trader Tracks Newsletter May 28 2009
Welcome To The New Banana Republic Of The United States of America and Black Markets.
We would not, under any circumstances, believe our government would make decisions flying in the face of sacred United States contract law. What they have done to auto company bondholders is to favor unions for political votes forcing bondholders into a lower, non-preferred payment order.  This says corporate contracts in the United States are now meaningless.Auto union people were moved to the head of the bankruptcy line while bondholders with a preferred first lien position by CONTRACT LAW, are now forced to the end of the line.
If your government will do this to auto bondholders, what will they do to the Sheeple?
News this morning told of GM bondholders finally reaching a settlement providing $.17 on the dollar in two parts as GM shares trading was halted. Further news stated GM shareholders are receiving 1% of the deal. Watch for a following clarification as to what all this might mean.
In Our View It’s All Just Grave Dancing
We expect Chrysler for sure and GM being a strong maybe, to enter their final resting places in the automobile manufacturing graveyard. For these companies to survive, they have to build and sell cars. We project years of falling vehicle sales with more lean years afterward. We think they have zero chance to continue in business in the longer view. Ford has a long shot chance to survive IF they can downsize the company another 35-50%. We would suggest their chances are one in three to get through it all and expect their bankruptcy as well. If Ford makes it, Chapter 11 comes first.
I just saw a report that FDR taxes in the 1930’s were temporarily as high as 80-90%. I have not confirmed this but pass it along for what it’s worth. Destruction of wealth by the Obama administration is moving breathtakingly faster in escalation mode reinforcing Marc Faber’s prediction of certain hyperinflation.
Should the Federal Reserve stop their reliquification-reflation program, the whole system could cave-in overnight. So far, they’ve tossed roughly $2 Trillion of taxpayer cash at all these problems but Bill Gross at Pimco says they must inject a total of $6 Trillion to begin to cover the messes creating a recovery market reaction.
We would expect a world-wide systemic crack-up at around $4 Trillion as key components of the global credit and bond markets in Europe, Asia and the U.S. will simply not be able to take it. Our expectations for the next 90 days are for convoluted choppy markets with a mild stocks’ selling event in the shorter term.
After Labor Day, this fall, we forecast a false stock market rise followed by most professional traders selling into strength with ferocity. September, 2009 30-year bond futures are trading this morning at 115.12. Next support is 112.50, 110.00, 108.00 and then 106.00. Our longer range forecast is 80.00 with larger potential for something much worse. We told our readers it gets scary when the 30’s sink under 120.00. Well folks we have arrived.
Our new forecast for later September, 2009 through early October would be a 62% crash from the early fall high. This means a selling event of at least 4-6,000 points lower on the Dow Jones.
Numerous Reasons For System Failure
The big U.S. investment banks wrote crooked deals (derivatives) destroying our financial system. Our Federal Reserve (not federal at all but composed of these same crooked bankers) along with the U.S. Treasury have stolen nearly a trillion to replenish the banks’ capital and financial footing.
Those banks were supposed to lend the money to make the economy find support and rally. Most of these funds have been bank-held to meet capital-to-loan ratios. No loans; no help for businesses.
A further expansion of (TARP), The Troubled Asset Relief Program, will be expanded to cover U.S. states’ budgets shortfalls. The worst example of this problem is California. Obama when asked if he would bailout California said, “No.” This means they get bailed out along with several others crying and pleading for help after recklessly spending their individual states into the fiscal ground.
Many of these idiotic state governments have still not made any serious moves to cut spending. They keep expecting the gravy train to continue on forever. It won’t as the tax revenue crashes.
The administrations’ policies cover funding of two current wars in Iraq and Afghanistan with a new expansion into a third in Pakistan. Potentially, additional wars will open with North Korea and increased action relative to the forthcoming Israeli-Iranian nuclear conflict. We not only cannot afford all these war costs, but do not have the men, women and equipment to manage all of this war-mongering simultaneously.
In our view, enemies of the US are determined to pull us into several wars, and drain the US Treasury destroying America and turning its residents into rural serfs and economic slaves. They seem to be getting a good head start.
We suspect the increased aggression from North Korea is a test to see how Obama manages foreign policy. Since he has no foreign policy except to waffle and hide under the covers and wish it would all go away, these conflicts and new international tensions shall escalate. In our view, this is a lot worse than our economic problems.
Our country is at risk floating in an ocean of disasters with no captain at the helm. Neighborhood organization as a vocation is quite different in scale than leading the engagement of international conflicts going potentially nuclear. Mr. Obama giving the visiting U.K. Prime Minister Gordon Brown some plastic gift K-Mart DVD’s was a strong and meaningful signal this kid is way out of his league.
U.S. housing mortgages of several toxic varieties began their final descent in June, 2005 when we predicted the housing crash. At that date lumber futures tipped-over and the handwriting was on the wall. With skidding lumber prices and Mr. Greenspan’s cash giveaway on the table, the only final solution was a housing meltdown. We were correct in our predictions and the worst is yet to come.
Contrary to current Pollyannish opinions, housing cannot see a new base until 2012 at the earliest, in our view. In recent days we were wondering out loud thinking this might be too optimistic. Our latest forecast is for housing to fall another 30% nationwide on the national averages.
Obviously, some false green shoots appear randomly as bottom feeders bargain hunt, but 95% of America is dead housing hay turning rotten and moldy. This summer in some down-trodden urban areas, housing hay catches fire in an escalation of riots and violence. This is not the preferred method of urban renewal.
Builders are currently operating at 25% of normal capacity. Our new forecast says this number sinks to 10% of the formerly 1.7mm new homes per year; building 170,000 homes annually if they are lucky.
Automobile sales for North American cars and trucks sank from 17mm to roughly 9mm. Our new forecast is a further skid to 5mm. This is why Chrysler, GM and probably Ford cannot survive.
National US unemployment is now officially posted between 8% and 10% depending upon the poll- takers. In our view, current national unemployment is 20%. In Michigan, the rate is 24% and will soon be 30% after the auto manufacturer bankruptcies take hold later this year. In the 1930’s, 25% unemployed was the worst number posted and it was probably accurate.
For a Greater Depression low, national US unemployment could hit 35% with Michigan  at 40-45% before World War III provides military employment for millions more.
War is the usual path to finally escape the trauma of depression. This was true in the pre-US Civil War depressions of 1840-1843 and in the early 1850’s. Preceding WW I we had the Panic of 1907 and its previous US depression of the early 1890’s. We had a preceding 1930’s depression in 1920-1921. This was followed by the 1930’s depression and then World War II finally taking us out of it.
On the K-Wave cycle timeline, our current depression was to begin in 2000. And, in fact it did with the crash of the Nasdaq but was artificially delayed by Mr. Greenspan’s billions of free cash and low interest rate pump-priming. His market interference helped delay the inevitable and cause worse conditions to last much longer. While there is open debate that 2000 repeats 1930 or, in fact it was delayed ten years to 2010, smart analysts compare the chart overlays of 2000-2010 with the 1930’s and they are scarily identical.
Consumers are busted and broken. Unemployment is rampant and escalating daily. Wages are stagnant to down. Homes, cars and other property are being repossessed. Hundreds of thousands of homeless people are living in cars, tent cities and on the beaches of warmer states. Consumer credit is shot. Families are doubling and tripling up to survive. Some households have only one person with a job feeding several. Consumers have lost most of their buying power. They represented 70% of the economy. There is no engine of growth to produce any economic rebound that we can see.
Welfare caseloads are skyrocketing and some states’ funds are nearly empty. Elderly are eating dog food to afford utility bills. Many will die in this forthcoming hot summer and freezing post-crash winter.  Meanwhile governments are not equipped to help as they are disorganized. They all have food and money but no logical organization or distribution means. This suggests millions go hungry while stacks of food reside in warehouses as beltway idiots say things are better and do nothing.
The Sheeple are girding for economic and potentially civil war. Gun and ammunition sales are off-the-charts. Tea parties are growing. The next stage will be street violence confrontations and more civil disobedience. Governmental pushback will only incite more riots and escalate troubles. States are releasing inmates from over-crowded prisons to save money. Crime shall soon go to the moon.
Meanwhile, our president is flying to Las Vegas (where he told others not to visit), to politic and raise funds for the party. He supposes his current Supreme Court nominee will ethnically encourage large Nevada donations to his party. Maybe it will but we also heard news reports of widespread suspicion of this move in the Latin community. More of the voters are catching onto these political games; from both parties. Politics exists to hold power, control the Sheeple and take their money for vote promotion. That is all it is pure and simple. Will we see a new and more voter responsive third party?
In the forthcoming mid-term elections, we would suggest administration powerbrokers get a hard lesson at the 2010 polls followed by something infinitely most harsh on the streets. People vote with their pocketbooks and today and into the longer range future, those wallets are empty. Beware!
This is not a game nor is it a passing bump in the road. This dire situation presents very big trouble with a potential for bank runs, seizure of pension plans to be converted for government usage (theft) and higher taxes. The newly proposed VAT tax could take an additional 25% more of your spendable income. Most will think this is outrageous. We suspect political criminals give it a testing try.
Now is the calm before the storm. This is the eye of the hurricane. This is not a Saturday evening warm gentle rain; this is a systemic fiscal tornado and many will be economically maimed, or destroyed. You cannot imagine how swiftly events could disrupt our system. Picture the arrival of ten simultaneous Katrinas, or even worse with no warning whatsoever. You get the idea.
We are normally, easy-going and not prone to these kinds of discussions. Our view is one of optimism. I am always seeking the brighter side with ideas to protect our homes, families and retirements. However, the quickening deterioration of current events has sincerely frightened me during the past few weeks.
This is not a simple changing of the political guard but perhaps Armageddon. If you think the government is in control and has a handle on these emergencies you are only kidding yourself. They are careening from one disaster to another. More new ones seem to come each day.
Bad news arrived with a rush and its becoming nastier with each passing day.  We’ve seen so much scary stuff we are reluctant to report most of it lest we upset the trading teacart. Batten down the family hatches and count on nothing from anyone to help you. Plan for the worst and hope for the best.
Those who mostly drop out of our phony system and take care of themselves should be winners. We heard similar advice from a premier lady analyst on Jay Taylor’s VoiceAmerica radio show last week.
Markets are nearing a peak in precious metals shares that generally follow primary stock indexes. When the current stock market peaking descends into the Sell in May, PM shares normally follow. With each cycle we think gold and silver shares might sell less posting higher lows. This could be decided on the shorter term by how low S&P’s trade. We expect 800 to 850 with 800 being more probable.
Do not get tangled-up in daily noise. Keep studying the larger view and buy precious metals after each profit-taking correction. Headwinds are building into an economic hurricane. Take care of business right now. My dire fall prediction might surprise us and arrive earlier. Time is short.

by Roger Wiegand
Editor of Trader Tracks Newsletter Posted May 28 2009

Welcome to the New Banana Republic of the United States of America and Black Markets.
WE WOULD NOT, under any circumstances, believe our government would make decisions flying in the face of sacred United States contract law. What they have done to auto company bondholders is to favor unions for political votes forcing bondholders into a lower, non-preferred payment order.  This says corporate contracts in the United States are now meaningless.Auto union people were moved to the head of the bankruptcy line while bondholders with a preferred first lien position by CONTRACT LAW, are now forced to the end of the line.

If your government will do this to auto bondholders, what will they do to the Sheeple?

News this morning told of GM bondholders finally reaching a settlement providing $0.17 on the dollar in two parts as GM shares trading was halted. Further news stated GM shareholders are receiving 1% of the deal. Watch for a following clarification as to what all this might mean.

In our view it’s all just grave dancing…
We expect Chrysler for sure and GM being a strong maybe, to enter their final resting places in the automobile manufacturing graveyard. For these companies to survive, they have to build and sell cars. We project years of falling vehicle sales with more lean years afterward. We think they have zero chance to continue in business in the longer view. Ford has a long shot chance to survive IF they can downsize the company another 35-50%. We would suggest their chances are one in three to get through it all and expect their bankruptcy as well. If Ford makes it, Chapter 11 comes first.

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Written by aurick

29/05/2009 at 11:55 pm

The die is cast in bronze: Plan for war and extreme economic hardship

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Roger Wiegand, Posted http://www.kitco.com May 22 2009
The Die Is Cast In Bronze-Plan For War And Extreme Economic Hardship
Our 2003 forecast said Ford Motor Company would go bankrupt. We hold to this forecast but its obvious GM and Chrysler beat them to it. Also per our predictions, GM has announced they might leave Detroit probably citing affordability of their monster headquarters building. The real reasons are to exit the USA’s failed auto market, and dump all health care and pensions on the US taxpayers. We think they move to Germany using Opel as the new GM base for a corporate headquarters and European operations. Buick stays in China and very few US plants and facilities remain. The US car market is dead for a decade. And, the United States as a world class manufacturer is down the drain. The steady off-shoring of American manufacturing for cheap labor has gutted the US’s ability to provide for itself in many key markets. We think this comes back to haunt.
“General Motors is considering moving its headquarters from Detroit, selling-off U.S. plants and even renegotiating parts of its restructuring plan with its major union, the new chief executive said Monday. A move by GM to leave Detroit would represent another blow for the economy of a region already reeling from the bankruptcy of Chrysler and a sharp downturn in auto manufacturing. GM purchased its glass-towered headquarters building known as Detroit’s Renaissance Center in 1996 for $625 million. GM’s current restructuring plan, which is supported by the U.S. autos task force is headed by former investment banker Steve Rattner, would cut about 21,000 more U.S. factory jobs.”- Reuters & CNBC
US autos are literally crashing as Chrysler buyers stay away in droves due to the company’s bankruptcy, lack of dealer credit and no confidence in the job market. Would you buy a car from  a manufacturer in bankruptcy owned and operated by the UAW and US Government?
Largely unnoticed in the auto news is the demise of dealers. An auto dealership surprisingly employs more people than you would think. The National Automobile Dealers Association says 3,000 dealers will close and that could only be the beginning. They tell us each of those dealers employs an average of 53 people so 159,000 jobs in this sector could be lost. The Detroit News says that’s more than GM and Chrysler’s (domestic) workforces combined. And, this does not include 6-10 parts supplier jobs for each manufacturing position. If 50,000 GM and Chrysler employees are laid-off this could mean 300,000 to 500,000 more auto parts suppliers’ jobs are eliminated. This is shaping-up to be an unbelievable disaster.
The cost to various local communities is staggering. Taxes will not be incurred nor paid. Those huge dealership lots would be a blight on the suburban landscape encouraging crime, stealing store metals and fixtures. Further, those facilities would probably remain empty for many years.
The U.K. has announced they plan to hike taxes for the wealthy to 50% of income. With other province and local taxes, the total take should round out at a nice 75% of gross income. Anyone with a brain and the ability to leave England for greener more friendly pastures will do so. That is beyond socialism. We think it is criminal.
The United States is next. New tax policy is to tax anything that moves as 800 new tax employees seek to grab more from overseas. Domestically, the president will increase taxes everywhere in a strain for more government income. This kills the source of most tax funding; the dominant small businesses.
The state’s are in much worse trouble as they have to balance their budgets by law. Almost all of the 50 states in our union have some problems with many having disasters. California is toast but will be re-funded with big Obama checks. My state of Michigan is now seeing a shortfall for fiscal 2009-2010 of $1.4 Billion. Naturally, instead of cutting-back state expenditures, new state employee raises are proposed and the grabby-grab for more taxes to cover prevails. One of our favorites, Rick Santelli of CNBC asked, How about a federal government pay cut of 20% to match other comparable industry norms? Sorry Rick; they get raises and the Sheeple get nothing.
All governments should have taken a clue from the Teabaggers demonstrationsbut instead they laughed and ridiculed them. What happens when the Teabaggers have an empty bag? More and more we see this while administrations across the land are clueless. The ending will not be pretty as taxpayers no longer pay as they cannot pay. Watch for massive municipal bond defaults with California leading states down the fiscal drain.
Consumers have been the engine of prosperity in America but are tapped out. The savings rates by consumers recently rose by 4% from next to nothing. They are not spending but are now saving out of fear. The big banks have been recapitalized from TARP money but few are lending. They need their capital to keep loan-capital ratios intact. The silly Stress Tests were nothing but a public relations ploy to calm the herd. So far it’s working but underneath this facade of “all is well” lurks trillions in derivatives. Consumers have no remaining credit. Even the upper class has cut-back on spending. In tony Bloomfield Hills, The Corporate Auto Address, a huge mansion of 22,000 square feet offered at $15mm is being auctioned this week end with opening bids at $2.5mm!
Smaller banks not participating in this reckless lending are caught between the Big Boyz who got loads of TARP cash and a skidding local or regional lending market. They are solvent but have no new business and cannot earn money or, even maintain a neutral posture. As Great Depression II grinds on more banks fail.
Commodity inflation signals have popped-up but could wane on the short term cycle of “Sell in May.” This cycle might have begun yesterday. China is buying replenishment copper but in reality their manufacturing continues to sink as Western buyers are absent. China’s stimulus money was formidable but has failed to expand as expected with no buyers for Chinese exports. Those expecting domestic Chinese buying to cover losses are misguided. New reports from China indicate markets and the economy is worse than expected.
Precious metals, grain, and other food-related commodities should continue to do well over the longer cycle. Soybeans remain strong on fundamentals and food prices continue to rise; particularly in those categories related to basic foods. We wonder how well the luxury prepared frozen foods are doing. We know for example, restaurants are suffering with the exception of very inexpensive fast food stores. McDonald’s is fine as are a few others who can deliver in that price category. Diners have down-scaled and are cooking at home.
Housing has actually bottomed and is finding new buying in the worst of the worst markets like Detroit. For example in the up-scale village of Gross Pointe east of Detroit, it was reported by The Detroit News, that a 24 year-old landscaper was able to buy a little bungalow for $92,000 from the previous owner who paid $165,000 only 4 years ago. In my beaten down local market, they are about $30,000 cheaper for a similar product. A decent Michigan home can be purchased for the price of a new car. Yet uncontrolled utility bills are up 35%.
Unemployment nationally is now a true 20%+ but is reported at 8.9%. In Michigan, the official report says it’s near 12% but reality is 25%. Within 2-3 years at the height of our economic problems, we think the US will unofficially post 33% jobless with Michigan near or above 40%; both exceeding the 1930’s Great Depression number of 25%.
New social problems abound. Tent cities have sprung-up in parks and other places across America. The hungry are multiplying by the hundreds of thousands as officials cannot understand the depth of these troubles, or have a real plan to contend with them. There is money, food and resources available but governments cannot deliver and are not organized to distribute to the needy. We will all pay the price in pandemic malnutrition and starvation, particularly among the retired elderly and very young. Food related crimes will skyrocket. People must eat. Milk, butter and cheese will be 34% higher later this year.
On the brighter side in Michigan, the agriculture community is working harder and planting more. California  will lose roughly 1/3rd of its massive vegetable crop in a no-planting situation as irrigation water was cut-off.  In Michigan, food related employment is 500,000 and 65,000 of those are directly related to farm work or food processing in factories. The last sales report from the Agriculture Department reported 2006 revenue of $4 billion for Michigan. This is mostly from beans, blueberries, cherries, cucumbers, pumpkins, pickles, apples, asparagus, sugar beets and milk cow products. There is also some corn. Michigan also has some excellent vineyards.
Newest growth industries are national government make-work jobs and crime.
Those without work and no education in particular, are turning to many forms of crime. Sadly, many folks doing this are participating out of emergency need and were not formerly criminals. Meanwhile, overcrowding in jails in several states causes politicians to free prisoners early as they lack funds and resources to contain them in jails. Add this group to the newly desperate and we expect a massive and continuous crime wave for years.
This is not a hard recession. This is A Greater Depression II Disaster
Those pundits, analysts and over-paid bureaurats are constantly telling us a new economic base is established and we will rebound to old new highs in late 2009-2010. In our view, they don’t get it. We forecast a bottom before the next major war in 2012. If you count and compare the 1930’s six dead cat bounces to today’s situation, we are in bounce number two; soon to end with the Sell in May cycle.
Should this be true, we’ve four more bottom-to-top-to-bottom cycles to endure taking many years. I don’t see any recovery for ten years. Further, with the over-indebted nations competing for crumbs as domestic and international violence escalates, how much longer do you think the cycle extends? No one knows for sure but the old paradigms and “good old days” are gone for good. Deal with it by purchasing, investing and trading gold and silver.
Weekly gold produced a new breakout on 5-21-09. Goal is double top of $1,007.
Support and three resistance points for shares index (XAU) is nearby 150.00 price.
Dollar reached our goal 80.50 support. Next major support is 80.00, plus or minus .50.
We are nearing a peak in precious metals shares that generally follow the primary stock indexes. When the current stock market peaking descends into Sell in May, PM shares will follow. With each cycle we think they might sell less with higher lows. This will be decided by how far down the S&P selling might go. We expect 800 to 850 with 800 S&P’s more probable.
Do not get tangled up in daily noise. Keep studying the larger view and buy precious metals after each profit-taking correction.
Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert. – Traderrog

by Roger Wiegand
Posted http://www.kitco.com May 22 2009

OUR 2003 FORECAST SAID Ford Motor Company would go bankrupt. We hold to this forecast but its obvious GM and Chrysler beat them to it. Also per our predictions, GM has announced they might leave Detroit probably citing affordability of their monster headquarters building. The real reasons are to exit the USA’s failed auto market, and dump all health care and pensions on the US taxpayers. We think they will move to Germany using Opel as the new GM base for a corporate headquarters and European operations. Buick stays in China and very few US plants and facilities remain. The US car market is dead for a decade. And, the United States as a world class manufacturer is down the drain. The steady off-shoring of American manufacturing for cheap labor has gutted the US’s ability to provide for itself in many key markets. We think this comes back to haunt.

“General Motors is considering moving its headquarters from Detroit, selling-off U.S. plants and even renegotiating parts of its restructuring plan with its major union, the new chief executive said Monday. A move by GM to leave Detroit would represent another blow for the economy of a region already reeling from the bankruptcy of Chrysler and a sharp downturn in auto manufacturing. GM purchased its glass-towered headquarters building known as Detroit’s Renaissance Center in 1996 for $625 million. GM’s current restructuring plan, which is supported by the U.S. autos task force is headed by former investment banker Steve Rattner, would cut about 21,000 more U.S. factory jobs.”- Reuters & CNBC

US autos are literally crashing as Chrysler buyers stay away in droves due to the company’s bankruptcy, lack of dealer credit and no confidence in the job market. Would you buy a car from  a manufacturer in bankruptcy owned and operated by the UAW and U.S. Government?

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Written by aurick

29/05/2009 at 4:15 pm

First snowfall of a Kondratieff winter

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by Trace Mayer, J.D.
Posted originally February 1, 2008

A KONDRATIEFF WINTER is the correction of a credit expansion. During an inflationary credit expansion capital moves up the pyramid.  During the deflationary credit contraction, or Kondratieff Winter, capital burrows down the pyramid to safety. This is why stock markets have been crashing as investors flee into T-Bills. Ultimately, investors ensconce themselves within a deflationary but invincible and immoveable golden forcefield.

Legendary investor George Soros recently said in Davos, Switzerland, “The current crisis is not only the bust that follows the housing boom, it’s basically the end of a 60-year period of continuing credit expansion based on the dollar as the reserve currency. Now the rest of the world is increasingly unwilling to accumulate dollars. I think we do have to rescue markets, otherwise we would go into a depression like we did in the 1930s.”

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The Bottom…?

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The Bottom…?
by James Howard Kunstler
posted in The Daily Reckoning 19 May 2009
Euphoria managed to out-run swine flu a few weeks ago, as the epidemic- du-jour, with “consumer” confidence jumping and the big bank stocks nudging up. The H1N1 virus fizzled for now, at least in terms of kill ratio, though we’re warned it might boomerang in the fall with a vengeance. No one was surprised to see Chrysler roll over like a possum on a county highway, but the memory of their muscle cars will linger on like a California surfing song. Here in the northeast, where Sundays are not spent at the NASCAR oval, the spring foliage reached the tenderly explosive stage and it was hard to feel bad about anything.
For now, the “bottom” is in – that is, the bottom of this society’s ability to process reality. It may continue for a month or so, but events are underway that are beyond the command of personalities. We’re done “doing business” in all the ways that we’ve been used to, but we just can’t get with the new program. Let’s count the ways:
1. The revolving credit economy is over. It’s over because we can’t increase energy inputs to the system, which is one way of saying “peak oil.” Of course hardly anybody believes this right now because the price of oil crashed nine months ago, along with global manufacturing and trade. But nothing has changed on the peak oil scene – except perhaps that ever more new oil projects have been cancelled for lack of financing, which will boomerang on us (even if swine flu doesn’t) in the form of much lower future oil production. In any case, the credit fiesta is over, and the “consumer” economy with it, because industrial growth as we have known it is over. It’s over globally, too, though all regions of the world will not experience its demise the same way at the same rate.
The Asian nations may swap things around a while longer but China is basically up the creek without a paddle. They have less oil left than we have (which is saying, not much at all) and they won’t corner the rest of the global oil market without starting World War Three. Meanwhile, they’re running out of water and food. Good luck becoming the next global hegemon. Oh, and Japan imports 90 percent of its energy; India over 80 percent. Fuggeddabowdit.
Credit will not vanish everywhere overnight – even in the U.S.A. – because it is not distributed equally everywhere. But it will vanish in layers, and here in the U.S.A. a very broad layer of the lower and middle classes are now losing their access to it in one way or another – personally, in small business – and they will never get it back. Anyone who intends to thrive in the years just ahead had better plan on doing it on the basis of accounts receivable – and what they receive might not even necessarily come in the form of U.S. dollars. It may come in the form of gold or silver or in the promise of reciprocal services rendered.
This has enormous implications for two of the items in which our credit-dispensing operations are most deeply vested: houses and cars. Unfortunately, these are exactly the things that economic life has been based on for decades in our nation, which leads to the next categories:
2. The suburban living arrangement is over, along with all its accessories and furnishings. Taken as “all of a piece,” the suburban expansion was one sixty-year-long culmination of hypertrophy. We did it because we could. We won a world war and threw a party. We had lots of cheap land and cheap oil. It made lots of people lots of money and all its usufructs have become embedded in our national identity to the dangerous degree that the loss of them will provoke a kind of national psychotic breakdown. In fact, it already has. The completely unrealistic expectation that we can resume this way of life is proof of it.
The immediate problem is that we can’t build anymore of it. The next problem will be the failure of the stuff that already exists. The first stage of that is now palpable in the mortgage foreclosure fiasco and, just beginning now, the tanking of malls, strip centers, office parks and other commercial property investments. The latter will accelerate and become visible very quickly as retail tenants bug out and weeds start growing where the Chryslers and Pontiacs once parked. The next stage, which involves large demographic shifts in how we inhabit the landscape, has not quite gotten underway.
“Anyone who intends to thrive in the years just ahead had better plan on doing it on the basis of accounts receivable — and what they receive might not even necessarily come in the form of U.S. dollars. It may come in the form of gold or silver or in the promise of reciprocal services rendered.”
3. The Happy Motoring fiesta is over. You’d think that with Chrysler crawling into the bankruptcy court, and GM just weeks away from the same terminal ceremony, the news media would begin to suspect that the foundation of everyday life in this country was cracking. Instead, all we hear is blather about “market share” shifting to Toyota. News flash: not only will we make fewer automobiles in the U.S.A., but Americans will buy far fewer cars made anywhere. We’ll keep the current fleet moving a while longer, but when it’s too beat to repair, we won’t be changing it out for a new fleet – despite all the fantasies about hybrids, plug-and-drive electrics, and so on. The masses will be too broke to buy these things. What’s more, they will be very resentful of the shrinking economic “elite” who can afford them. And, anyway, our roads and highways are destined to fall apart very quickly because there is no way we can sustain the necessary rate of normal maintenance. Meanwhile, we remain completely un-serious about public transit – even about fixing the vestiges that still exist. The airline industry, of course, will be toast inside of five years.
4. Our food production system is approaching crisis. There’s no way we can continue the petro-agriculture system of farming and the Cheez Doodle and Pepsi Cola diet that it services. The public is absolutely zombified in the face of this problem – perhaps a result of the diet itself. President Obama and Ag Secretary Vilsack have not given a hint that they understand the gravity of the situation. It is probably one of those unfortunate events of history that can only impress a society in the form of a crisis. It also happens to be one of the few problems we face that public policy could affect sharply and broadly – if we underwrote the reactivation of smaller, local farm operations instead of shoveling money to giant “agribusiness” (or Citibank, or Goldman Sachs, or AIG…). I maintain that this may be the year that the crisis gets our attention, because capital is suddenly harder to get than fossil-fuel-based fertilizer.
All these epochal discontinuities present themselves, for the moment, as a season of muted “hope” and general apathy. The days are suddenly mild. We’ve resumed old and happy habits of grilling meat outdoors and motoring to those remaining places that were not blanketed with franchised food huts and discount malls. We have a new, charming president with an appealing family. Newly-minted dollars are flowing to the “shovel-ready.” The new bad news is less bad than the old bad news (or seems to be). And the year just past has been such a bummer that our hard-wired human nature tells us that good things must be just around the corner.
Personally, I think a lot of good things await us, but not the ones we’re expecting – not a return to buying Slurpees on credit cards. It will be very salutary to leave behind the junk empire we’ve accumulated and move into an epoch of quality and purpose. For the moment, though, our hopes reside elsewhere.
Regards,
James Howard Kunstler
for The Daily Reckoning

by James Howard Kunstler
posted in The Daily Reckoning 19 May 2009

EUPHORIA MANAGED to out-run swine flu a few weeks ago, as the epidemic- du-jour, with “consumer” confidence jumping and the big bank stocks nudging up. The H1N1 virus fizzled for now, at least in terms of kill ratio, though we’re warned it might boomerang in the fall with a vengeance. No one was surprised to see Chrysler roll over like a possum on a county highway, but the memory of their muscle cars will linger on like a California surfing song. Here in the northeast, where Sundays are not spent at the NASCAR oval, the spring foliage reached the tenderly explosive stage and it was hard to feel bad about anything.

For now, the “bottom” is in – that is, the bottom of this society’s ability to process reality. It may continue for a month or so, but events are underway that are beyond the command of personalities. We’re done “doing business” in all the ways that we’ve been used to, but we just can’t get with the new program. Let’s count the ways:

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U.S. Mint plans huge output reduction

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Mint Plans Huge Output Reduction
By David C. Harper, Numismatic News
April 30, 2009
The U.S. Mint isn’t about to tell its workers in Philadelphia and Denver to take a six-month vacation, but it could judging from the coin demand target it is aiming for in 2009.
The Federal Reserve System has placed orders for just 3 billion coins in 2009, down over 70 percent from the 2008 production level of 10.1 billion.
With approximately 1.2 billion coins struck already in the first three months of the year, that leaves eight months into which to divide production of just 1.8 billion coins. In the year 2000 the Mint was striking more than that per month.
The Mint says it will build a coin inventory, but unless the Treasury plans to stockpile the current commemorative Lincoln cents as it once did Morgan silver dollars, with its current business approach, it is hard to envisage the Mint going too far beyond projected coin needs.
Current workers, though, will embark on a six-month productivity maintenance effort that will assure future capacity. The Mint will also undertake capital improvements and maintenance that would be difficult to do with presses operating at a more normal pace.
A hiring freeze also has been imposed.
Already there is a scramble by collectors to acquire 2009 pieces because of their perceived scarcity. These target can only increase that perception.

By David C. Harper
Numismatic News April 30, 2009

THE U.S. MINT isn’t about to tell its workers in Philadelphia and Denver to take a six-month vacation, but it could be, judging from the coin demand target it is aiming for in 2009.

The Federal Reserve System has placed orders for just 3 billion coins in 2009, down over 70 percent from the 2008 production level of 10.1 billion. With approximately 1.2 billion coins struck already in the first three months of the year, that leaves eight months into which to divide production of just 1.8 billion coins. In the year 2000 the Mint was striking more than that per month.

The Mint says it will build a coin inventory, but unless the Treasury plans to stockpile the current commemorative Lincoln cents as it once did Morgan silver dollars, with its current business approach it is hard to envisage the Mint going too far beyond projected coin needs.

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Written by aurick

16/05/2009 at 10:05 am

Myths that control us

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Tag(s): Agenda; CIA; Controlled Media; Government; Media; Other
May 8, 2009 at 12:46:38
The Myths That Control Us
by Matt Kjeldsen     Page 1 of 1 page(s)
Myths prevent people, especially Americans, from discerning and even reaching for the truth.  Myths are created by and used by the elite power structure to control the masses.  It works because these myths create a sense of power in the individual through his/her connection to the group, even though in reality, this faith-based belief in the myth actually neuters any power the individual once possessed.
Let’s look at the two biggest and most powerful myths used to control Americans.
Myth number one—we are a democracy.
First of all, America is a constitutional republic, not a democracy.  Our founding fathers did not create a government of winner take all, 51% rules over the other 49%–this is a lie repeated and repeated by the people who benefit (politicians and press—and those who own them).  The reason this myth is so controlling and destructive to America, is that a two-headed monster dictates all policy and all debate.  Two teams continually battle for control of the system and every citizen, whether they vote or not, is drawn into the false divide and sides with one or the other of the teams.  When one team has worn out its welcome, the voters replace it with the other team.
Battle lines are continually drawn over “morality”, taxation, military expenditures and so on.  Pundits on both sides ceaselessly promote and oppose the so-called positions of the two teams.  Money is raised by grass roots organizations on both sides.  People actually stake their manhood/womanhood on their support and belief in their team.
But, for all of the open sniping, both teams are owned by the same owner.  The teams dine together.  A massive amount of money is given to each side by the same corporations and banks.  No matter which team is currently in power, an agenda of increasing federal control over individual liberties always presses forward.  An agenda of corporate legislation always presses forward.  An agenda of increasing the power of the unitary executive always presses forward.  An agenda of war and surrendering sovereignty to a world authority always presses forward.
Why?  Because of continuity of government.  Because of state secrets.  Because the CFR and Tri-Lateral Commission members dictate all policy.  Because a British secret society formed the CIA and the stifling intelligence apparatus that rules all politics in the name of the owners.  Because the president is a CEO of the Corporation of Washington DC.  He is not the owner, as the democracy myth would have us believe, he is the starting quarterback.  He gets his picture taken, he speaks to the reporters, the people worship him or boo him, but he doesn’t call the plays.  He is just a player.
Myth number two—we have a free press.
No, we don’t. We never have had a free press.  But, now it is more obvious than ever.  Five international corporations own everything that is seen on TV and almost everything heard on radio.  The newspapers are owned by corporations.  Every wire article comes from AP or Reuters and the Rothschilds banking fortune owns them both.  Editors and many of the most influential writers are either directly paid for or covertly controlled by the CIA.  Operation Mockingbird, a CIA plan, created this complete takeover.
Because of the iron grip of corporate/banker control over the American press and media, people are told continuously that they have a free press and that they are the freest people in the world.  This is programming. This is fostering a myth.  It is not true.  In 2008 the United States was ranked 31st in the world in press freedom, tied with Greece.  Pay off your house and fall behind on property taxes and then see who owns your house and how free you are.  The Federal Reserve Bank is private and the IRS collects an unconstitutional tax on your income.  The IRS then gives every penny, every year to the private Federal Reserve Bank for interest on a loan.  When is the last time you heard your free press tell you about this extortion of trillions of dollars from the American people?
The press criticizes or praises one or the other of the heads of the two-headed monster that is our current system of government.  However, the press never questions the legitimacy of the two-headed monster.  The press never questions the legitimacy of elections run by the two-headed monster and counted on electronic machines that are proven to be easily hacked and can be pre-programmed to game a result.  The press never questions the ownership of the two political teams, because the press is owned by the very same owner.
These two myths are responsible for a bevy of other myths that each help to enslave and truncate the enlightenment of all Americans.  The myth of the benign and righteous government.  The myth of spreading democracy through military power.  The myth of organized international terrorists bent on the destruction of America.  The myth of man-made global warming and imminent catastrophe.  The myth of American supremacy, when in fact, America is owned by England and Israel, and is used as a military enforcer for foreign financial oligarchs.  The list goes on and on.  I’m quite sure everyone reading this can think of several controlling myths that I have left out.
We the people are being programmed by a television and a press.  We are lied to and misled by a massive and completely unaccountable federal government.  Even many of the so-called alternative news outlets, provide some fashion of official propaganda.  Only through cross-checking a broad spectrum of sources can one discern a portion of the truth.  It is a formidable task to be sure.  However, the alternative is faith based acceptance of official truth, as told to us by the government and repeated by the controlled, corporate press.  And this official truth is plainly and simply, myth.
The views expressed in this article are the sole responsibility of the author
and do not necessarily reflect those of this website or its editors.
bucketslogg
Any FREEDOM whatsoever… purely MYTHOLOGICAL…
Poverty, education, politics, our entire way of life and everything we buy into is set up to enslave us.  The more things you believe in the more firmly entrenched in this false system/reality you are.
Like any mystery story, great or not, at the end the murderer will tell you why you are being taken out… if you take a look, the answers are everywhere.  If you dogmatically cling to the old myths, you are just as dead, but you will never know why or that you enabled it and the killing of everyone else along with you.
There may yet be time, but first and only if you free your mind.  The lies have been with us from the beginning… from Genesis.   In the first three pages alone we have multiple Gods, aliens, a race of giants and the sons of God gazing upon the daughters of man and finding them “looksome”…. is there truth here?  Why do the creationists not include space ships in their re-creation scenes?
Why is it a manned space flight has never travelled beyond the moon?  Truth is we can’t.  The earth has been quarantined from the rest of the universe by what, unknown, but that we are is known.  It is a fact known to ancient Indian Zuni and Mayan cultures and ancient chemists and astrologers as the great web in the sky and to NASA, though you won’t hear NASA yapping about it.
It is called the real Stargate and if you go looking for information on it, you will find a lot of pollution about a television program of the same name.  Why do you suppose that is?  Who controls the media controls the infomation we receive… to a point.
Free your mind.  Open up to possibility that everything has been bullsh*t from the very start, then there are infinite possiblities.  At the very least you will not lose your soul to a false idol… and stop giving over your life’s blood to an alien species.
That’s a start… click on some of this man’s other links.  He provides a wealth of infomation.   You are not required to believe it,  but you should at least wrap your mind around the possibility of other realities that may provide the answers to how big, evil and ugly it all is.
by bucketslogg (0 articles, 0 quicklinks, 0 diaries, 199 comments [64 recommended, 0 rejected]) on Saturday, May 9, 2009 at 1:28:27 PM
(1+)
Trailing Begonia
To myth or not to myth That is the question.
You call it myth, however, I call it “brainwashing.”  Should we meet in the middle and call it “mythinformation”?  At the end, it makes the same difference:   mission accomplished either way.
Brainwashed and loving it!
Mark Watterson
Matt, thanks for your observations of Plato’s Cave, aka
the Matrix. Everything in life is political and everything is planned. It has to be, too much money at stake (about $3 trillion every year floods into the cofers of the federal mafia in D.C annually). If our minds weren’t controlled by the myths you describe, then the flow of this money would cease. What elitist would want that, be it dem or repub???
by Mark Watterson (0 articles, 0 quicklinks, 0 diaries, 173 comments [66 recommended, 1 rejected]) on Saturday, May 9, 2009

by Matt Kjeldsen
Posted May 8, 2009   www.opednews.com

MYTHS PREVENT PEOPLE, especially Americans, from discerning and even reaching for the truth. Myths are created by and used by the elite power structure to control the masses. It works because these myths create a sense of power in the individual through his/her connection to the group, even though in reality, this faith-based belief in the myth actually neuters any power the individual once possessed. Let’s look at the two biggest and most powerful myths used to control Americans.

Myth number one — we are a democracy
First of all, America is a constitutional republic, not a democracy. This is a lie constantly repeated by the people who benefit (politicians and press – and those who own them). The reason this myth is so controlling and destructive to America, is that a two-headed monster dictates all policy and all debate. Two teams continually battle for control of the system and every citizen, whether they vote or not, is drawn into the false divide and sides with one or the other of the teams. When one team has worn out its welcome, the voters replace it with the other team.

Read the rest of this entry »

Written by aurick

15/05/2009 at 9:12 am

Upside Down Gold

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Upside Down Gold
By David Morgan (0 comments)
John Exter was an internationally known banker and a gold bug in the true sense of the word. He graduated from Harvard and was present when Keynesian economics first came to the fore. He lived through World War I, witnessed the founding of the Federal Reserve, the Great Depression, and the establishment of the International Monetary Fund (IMF). He also presided over the New York Federal Reserve Bank. Mr. Exter’s work can be found on the Internet with a simple Google search.
One of his most famous quotes is, “The U.S. and world economies are on the threshold of a deflationary crash that will make the 1930s look like a boom. Gold will be the single best investment to own. Buy it now while it’s still cheap.”
A pyramid is one of the most stable structures ever envisioned by humans. However, Mr. Exter is perhaps most famous for his inverted pyramid of how a debt-based monetary system is constructed.
See below
Logically, an up side down pyramid implies one of the most “unstable” structures one can imagine.
Mr. Exter believed there would be a deflationary collapse rather than an inflationary blow-off. He stated that creditors would move down the pyramid out of the most illiquid debts. Looking at the pyramid, we almost have to hold back some amusement, from the standpoint of what was known in his day as “illiquid” compared to the casino fiasco, presently.
When Mr. Exter constructed his model, the top of the pyramid had junk bonds, failing banks, failing insurance companies, and, we might add, failed investment banks/brokerage houses. Creditors will get out of weak debts and move down the debt pyramid, to the very bottom! Near the bottom we find currency (dollar bills), even though they pay no interest. Next above currency are Treasury bills, issued by the government and backed by the Federal Reserve. They are almost as safe as currency notes, plus they pay interest. However, you have to liquidate the bills to get money of some sort to buy something.
The higher debtors sit in the pyramid, the less liquid they are, and this is why the Fed has become the “buyer of last resort.” No one wants to buy any of these toxic assets, and furthermore, no one really can price many of them, because in fact some are truly worthless. According to Mr. Exter, this explains why we are headed for deflation. Creditors will move out of debts high in the debt pyramid as many of them will fail through defaults & bankruptcies–that is deflationary.
At the bottom of the debt pyramid sits gold, the asset that needs no bank, Fed, or human “blessing” of any kind to be valued by both the individual and the banking system (although they hate to admit it) alike.
Has the rush to gold started? Yes, but barely, because only recently have we seen a nation admit they are moving into gold. China and of course the gold bugs have been buying since the recent bottom in 2000, but this pales in what this writer sees ahead; now that the structure is failing, more and more nations, institutions, and individuals will be heading to the bottom for safety and liquidity (gold).
A new e-book titled The Great Credit Contraction has been written by a friend named Trace Mayer, J.D., and it gives us more insights into the current situation.
As can clearly been seen from a more modern form of the debt pyramid below, the broadest and most unstable “asset” class is the derivatives at the top. This is what is causing the current worldwide financial adjustment as the central banks continue to assure the markets that everything is going to be just fine, and they pump “money/credit” into the system until …??
_____

© 2009 David Morgan

By David Morgan
Posted  8 May, 2009  http://dollardaze.org/blog

JOHN EXTER was an internationally known banker and a gold bug in the true sense of the word. He graduated from Harvard and was present when Keynesian economics first came to the fore. He lived through World War I, witnessed the founding of the Federal Reserve, the Great Depression, and the establishment of the International Monetary Fund (IMF). He also presided over the New York Federal Reserve Bank. Mr. Exter’s work can be found on the Internet with a simple Google search.

One of his most famous quotes is, “The U.S. and world economies are on the threshold of a deflationary crash that will make the 1930s look like a boom. Gold will be the single best investment to own. Buy it now while it’s still cheap.”

A pyramid is one of the most stable structures ever envisioned by humans. However, Mr. Exter is perhaps most famous for his inverted pyramid of how a debt-based monetary system is constructed.

UpsidedownPyramid

Logically, an upside down pyramid implies one of the most “unstable” structures one can imagine.

Read the rest of this entry »

Written by aurick

13/05/2009 at 10:37 am