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ECONOMICS AND ESOTERICA FOR A NEW PARADIGM

Archive for March 2011

Power corrupts; Nuclear power corrupts absolutely

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by C. Douglas Lummis
date unknown

IN THE EARLY 1970s I HELPED ORGANISE A TOUR OF STUDENTS FROM JAPAN TO THE HANFORD NUCLEAR FACILITY in central Washington State. We timed it so that our guided tour of the site would be on the anniversary of the nuclear bombing of Nagasaki. This knocked the official guide a bit off balance; when we came to the big photograph of the Hanford workers cheering when they learned that it was the plutonium they had made that went into the Nagasaki bomb, his words got a little mumbly and hard to hear.

But he was very energetic when it came to explaining how safe the Hanford Facility was. Waste plutonium, he said, was buried in pits dug deep into the ground, and then carefully monitored to make sure there was no leakage. I asked him, “But didn’t you tell us just now that plutonium has a half-life of 24,000 years? Who is going to monitor it for that long?” “The US Government, of course.” “In all of human history, has there ever been a government that lasted for 24,000 years?” He did not answer, but only looked at me with contempt. Evidently he thought I was lacking in patriotism.

This was the moment I realized that a very intelligent, highly trained nuclear engineer can be a fool.

My field, political science, has produced probably only one scientific law: Power corrupts, and absolute power corrupts absolutely. But few political scientists have noticed that the closest thing we have to absolute power is nuclear power. Nuclear power corrupts the thinking of its believers in a peculiar way. It seems to tempt them to imagine that they have been raised to a higher level, where common sense judgments don’t apply. Common sense judgments like, it’s very dumb to produce a substance that will continue to radiate death, and will therefore require “monitoring”, for tens of thousands of years.

And then there’s the problem of accidents. As my common-sense grandmother used to say, “Accidents do happen”. An “accident” means something unexpected, something you hadn’t planned for. In the case of some dangerous activities, we seem to be willing to take the risk. We (we who are not the direct victims, that is) are satisfied if the probability of auto accidents or airplane crashes is kept fairly low. But in the case of nuclear reactors, a low accident rate is not enough. The consequences of a full-scale meltdown are so horrifying that, to justify building a nuclear reactor, the promoters must guarantee that there will be no accidents at all.

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The Return of Precious Metals and Sound Money

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by Giordano Bruno
Originally posted Neithercorp Press, March 15, 2011

WELL, THOSE DEVIOUS GOLD BUGS AND SOUND MONEY ADVOCATES ARE AT IT AGAIN! They had the audacity to produce economic analysis that consistently outshines and embarrasses mainstream Keynesian pundits. They had the nerve to expose the seedy underpinnings of the private Federal Reserve. They even had the gall to bring the long established short manipulations of metals markets by global banks like JP Morgan and HSBC into the light of day, where anyone whose head was not buried in the dark recesses of their own colon could see and say “My god! There really is an organized cabal against gold and silver!” But if you thought all that was outrageous, these people, who promote the insane notion that our currency should actually be backed by tangible wealth and should be under the control of the voting public instead of some unaccountable parasitic corporate central bank, have now brought state legislators into the mix! The return to sound money has begun…

Thirteen states currently have proposed measures which would reinstitute the long suppressed need for a precious metals standard. Utah is the furthest ahead in this battle, its House just recently passing a bill which would make gold and silver officially recognized as legal tender within its borders. All that remains is a signature from Utah’s governor:

http://www.foxnews.com/politics/2011/03/04/utah-house-passes-recognizing-gold-silver-legal-tender/

Colorado, Georgia, Montana, Missouri, Indiana, Iowa, New Hampshire, Oklahoma, South Carolina, Tennessee, Vermont and Washington all have similar bills to that of Utah in different stages of development. Why, after decades of treating gold and silver standards like a cocktail party joke, have the states suddenly turned friendly towards the idea of commodities as currency? It makes perfect sense when you examine what is happening all around us in the world today…

Necessity is the Mother of Prevention

The states are broke. Not just broke, but destitute. If California had a loan shark, its knee caps would have felt the splintery sting of a Louisville Slugger years ago. Illinois would have turned to prostitution (and maybe still will).

All the clawing of eyes and gnashing of teeth that went on in Wisconsin this past month over the rather tame cuts to labor union wage bargaining power is nothing compared to what many states have to look forward to when they decide to confiscate employee pensions and cut major funding to basic services like fire, and police. Some state governments know what is coming, and they are wisely moving to cushion the fall.

Legislators recognize that if municipal bond investment continues on its current downward spiral, there will be widespread defaults. These city and state bankruptcies will almost assuredly be met with offers from the Federal Reserve of a new bailout; QE3… or QE20 (does it really matter anymore?). This bailout would not be “substantial”, it would be gargantuan! What do you get when states bring in increasingly diminished revenues while constituents demand more and more money for welfare and public services because of inflation and the subsequent rise in poverty?

You get a space-time-debt singularity so volatile it stretches the very fabric of your local economy until it tears wide open, unleashing a gravity well of capital destruction similar to a double-ended tornado that snatches your money and hurls it into the upper stratosphere never to be seen again. The point is, you get yet another Fanny and Freddy; a self perpetuating never ending bailout free-for-all that fizzles only when the dollar has been thoroughly cremated, which shouldn’t be long from now.

Intelligent and fiscally conservative local representatives have seen the obvious danger to the stability of the dollar in this equation, and are moving to PREVENT total collapse of their states, rather than wait until after the fact to initiate solutions. Sound money legislation and the creation of localized markets and barter networks give states the ability to function beyond the lifespan of the dollar and to ensure the continuing personal prosperity of residents.

Honestly, why should the states allow their destinies to be bound forever to the longevity of the ailing Greenback? If there is anything good to come out of our present predicament, it is that Americans, from average citizens to elected officials, are beginning to understand the reality of coming collapse and are preempting it with measures designed to insulate their communities from the inevitable firestorm.

Eventually, as this movement escalates, certain states will come out ahead of the pack, gaining a kind of “safe haven” status, and attracting liberty minded people from around the country to the protective shelter of their borders.

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Japan considers extending evacuation radius after IAEA finds excessive radiation 40 km away from Fukushima

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by Tyler Durden
Posted originally Zero Hedge, March 30, 2011

The International Atomic Energy Agency (IAEA) which is quickly outstaying its Japanese welcome by disclosing actual facts about the radioactive fallout around the power plant, has just announced that it has found excessive radioactivity in a village 40 km from Fukushima.

While the news will not be a surprise to anyone watching the grand lie unfold over the past three weeks, it may hopefully force the Japanese government to finally relent and extend the evacuation perimeter from the existing 20 km, thereby actually preventing the needless loss of life in the long run.

From Reuters:
“Radiation measured at a village 40 km from Japan’s crippled nuclear plant exceeded a criterion for evacuation”, the U.N. nuclear watchdog said on Wednesday, the latest sign of widening consequences from the crisis. Criticized for weak leadership during Japan’s worst crisis since World War Two, Prime Minister Naoto Kan has said he is considering enlarging the evacuation area to force 130,000 people to move, in addition to 70,000 already displaced.

“The first assessment indicates that one of the IAEA operational criteria for evacuation is exceeded in Iitate village,” Denis Flory, a deputy director general of the International Atomic Energy Agency (IAEA), said. “We have advised (Japan) to carefully assess the situation and they have indicated that it is already under assessment,” he told a news conference.” Hopefully our Japanese readers who have been following our coverage of this tragedy, which many have at times called “hysteric” even if always based on facts, have already evacuated long ago.

Ultimately, it is one thing for the government to lie with just the Russell 2000’s closing level being at stake. It is something totally different when people’s mutagenic skills and/or life expectancy is at stake. When this is all said and done, Kan will likely be forced into exile for his tragic botching of an operation whose only downside to disclosing the truth would have been a few hundred points in the Nikkei/S&P. Well, those losses will still come eventually, but at least thousands of lives would not have been put needlessly at risk in the meantime.

More from Reuters:
Greenpeace this week said it had confirmed radiation levels in this village northwest of the plant high enough to evacuate. But Japan’s nuclear safety agency on Monday rebuffed a call by the environmental group to widen the evacuation zone. The IAEA also said it had been told by Singapore that some cabbages imported from Japan contained radioactive iodine above the levels recommended for international trade. “Some samples were over the Codex Alimentarius values recommended for international trade,” said Flory.

David Byron, a U.N. food agency official seconded to the IAEA, said the recommended level was 100 becquerels per kg and that one of the samples in Singapore was up to nine times above that. “Other samples were also over that level,” he said, although not as much. IAEA Director General Yukiya Amano said the situation at the Fukushima plant remained very serious despite increased efforts by authorities to get it under control.

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Japan crisis sparks Simpsons nuclear disaster ban

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from The Telegraph
Posted originally 29 March 2011

Broadcasters in Germany, Australia and Switzerland have decided to ban or censor episodes of The Simpsons that poke fun at nuclear disasters in light of Japan’s atomic emergency.

Photo: REX

“We are checking all the episodes and we won’t show any suspect ones, but we won’t cut any scenes,” Stella Rodger, a spokesman for German private broadcaster Pro7, said. “We haven’t postponed any yet.” Austria’s ORF network has so far banned a total of eight episodes, including one that features scientists Marie and Pierre Curie dying of radiation poisoning. Switzerland’s SF network has done the same.

The nuclear plant in the Simpsons’ hometown of Springfield is a key element in the long-running satirical cartoon, with the hapless Homer in charge of safety despite a slapdash approach evident from the opening credits onwards. Previous episodes have shown nuclear waste dumped in a children’s playground, plutonium used as a paperweight, cracked cooling towers, luminous rats and three-eyed mutant fish, as well as near-meltdowns.

“Of course we can’t completely change the entire content,” Ms Rodger acknowledged. Surveys show that people in Germany are particularly uneasy about the dangers of nuclear power, with shipments of radioactive waste regularly attracting angry protests.

On Saturday, tens of thousands of people – 250,000, according to organisers – took part in demonstrations around Germany protesting against nuclear power in light of events in Japan. Chancellor Angela Merkel announced earlier this month a three-month moratorium on plans to extend the operating times of Germany’s nuclear plants and ordered that the seven oldest reactors be shut down.

Make no mistake

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by James Howard Kunstler
Originally posted March 28, 2011

Taking in Charles Ferguson’s excellent documentary, Inside Job, about the dark doings of Wall Street in our time, I confess I was awestruck all over again at the complete surrender of Obama to the very characters who embodied the corruption that rotted our system from the heart outward.

Summers, Rubin, Geithner, and a host of other revolving door grifters who did everything possible to set up the implosion of banking, defeat the rule of law in money matters, and ruin millions who wanted nothing more than something useful to do in this society for a living wage.

Most impressive of all in this brave film were the shameless academic mandarins caught on camera trying to weasel out of their greed-driven misdeeds – Glenn Hubbard, chair of the Columbia University Econ department, a perfectly programmed polished WASP (like out of a “Ken” doll box) on the outside, slithering corruption inside, who played a major role in removing all restraints on Wall Street, then served as a director on the boards of several predatory financial giants, including the biggest, Black Rock, and pretended not to remember if he got paid for it; Martin Feldstein of the Harvard Econ department, in-and-out of government like a rat in a cheese-box, who sat on the board of AIG in the months before it blew itself up on credit default swaps, and who saw nothing about the company’s operations that gave off a bad odor after it entered the most massive government receivership the world has ever seen; and most memorably Fred Mishkin, former Federal Reserve governor, now an academic rover, who wrote a cheerleading report for the Icelandic banking system about five minutes before it collapsed, then changed the report’s title from Financial Stability in Iceland to Financial Instability in Iceland, then denied it on camera in the face of obvious evidence, then forgot whether he got paid six-figures to write the glowing report, then dissolved on camera into a maundering puddle of indignity and humiliation.

How do these rogues survive the disclosure of their turpitudes? Is there no one at places like Harvard and Columbia who has any sense of shame or even an inkling of disappointment that they employ such odious hustlers? Apparently not. This is a system with no mechanism of self-regulation left. And there’s Obama at the tippy-top of it serving like a department store mannequin with a Department of Justice that someone has hung a “gone fishin'” sign on. I voted for him in 2008, and I want to start a movement in whatever’s left of the Progressive core to get rid of him. Being a decent, presentable fellow with a nice family is just not enough. Even his vaunted speech-making abilities have gotten on my nerves. If I hear him say “make no mistake” one more time, someone will have to restrain me from kicking in the flat screen TV. Obama, it turns out, is the mistake.

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Has Wall Street no decency?

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by Rick Ackerman
Posted originally March 28, 2011

Watching the Dow Industrial Average cavort in the thin air above 12000 while the world goes to hell, we’re reminded of the famous exchange between Senator Joseph McCarthy and U.S. Army counsel Joseph Welch during the Army-McCarthy hearings:  “Have you no decency, sir?” asked Welch after the Commie-baiting McCarthy had smeared a junior lawyer from Welch’s firm with a ruinous accusation.

We might ask the same question of the decision makers who in recent weeks have been driving stocks higher no matter how grave the news or world-shaking the event: Have you, the Masters of the Universe, no decency? Apparently not — at least none capable of registering even a mote of doubt or concern about what is going on in the real world. Granted, there was a fleeting loss of confidence in the literal wake of March 11’s epic earthquake and tsunami. Some investors wondered how global manufacturers would fare with their most important supplier of just-in-time parts out of commission. Others grew nervous that Japan’s very financial stability was in jeopardy. But it didn’t take long before such anxious speculation gave way to the sunny notion that it would take vast quantities of capital investment to rebuild Japan. Ka-ching!

That was more than a week ago. Since then, Japan’s predicament has grown increasingly menacing. Radioactive waste is spilling into the sea, a reactor containment vessel appears to have cracked, and there is no longer even a timetable for fixing the problem. Will Geiger counters in L.A. have to go crazy for Wall Street to at least act as though all of this matters?

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Is the Fed terrified?

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by Graham Summers
Phoenix Capital Research
Posted originally on March 28, 2011

This is the most important chart related to the financial system today:

This is a chart of the US monetary base. In simple terms, it charts how much money the Fed has pumped into the system (at least that it admits). So it’s a kind of visual of the Fed hitting the PANIC button: when the monetary base explodes higher, the Fed is FREAKING out.

You’ll note that during the Financial Crisis the Fed didn’t do much until the autumn of 2008 when it pumped nearly $1 trillion into the system. Think about that, the Fed didn’t go nuts pumping money until the stuff REALLY hit the fan. You’ll also note that there’s only one other time when the monetary base went absolutely vertical: TODAY.

Indeed, the Fed has pumped nearly $500 billion into the system since the start of 2011. Don’t even try to tell me this is QE 2. If it was then the monetary base should have spiked in late 2010, NOT in 2011.

No, this is the Fed FREAKING OUT about the financial system again. And it’s a freak out on par with 2008. So if you think that all is well “behind the scenes” you’re in for a rude surprise. Something BIG is going down and I think it’s this:

This is the 31-year weekly chart of the 30-Year Treasury. As you can see, since 1988, the 30-Year has respected the above trendline. Every time we touched up against it, the 30-Year bounced hard and continued its long-term bull market.

The last time we nearly took out this line? The very beginning of 2011:

Remember, the interest-rate based derivatives market in the US is $196 TRILLION. If the Fed lets interest rates get out of hand, then the entire system breaks down even worse than it did in 2008: 2008’s crisis was triggered by the credit defaults swap market which was just $50-60 trillion in size (less than 1/3 of the interest rate based derivatives market).

Small wonder the Fed is going nuts pumping $500 billion into the system in the last three months alone. After all, once the Fed loses control of interest rates (and it will) we’re going to see a market 4-5 times bigger than the credit default swap market implode.

Are you prepared?