Saying Goodbye or Hello to The Good Old Days

Janus, of course, was the Roman god with two faces, one to always look backward and one to look forward.  The name was chosen for this month for good reason and I'll do the same.

At the end of 2010, American freedom is - at best - on the ropes. No matter where you look, you see the appearance of an emerging police state: from the TSA "molocaust" (H/T - Cliffs of Insanity) to neighbors being urged to snitch on neighbors to vindictive, overzealous prosecutors seemingly abusing the laws they're supposed to be protecting.  Big Brother shows no signs of wanting to let up, but rather is acting to spread the insult to malls, stadiums, stores - anywhere people gather.  It's only going to get more widespread and more intrusive.  If you're new here, you may be interested in a column I wrote on Labor Day about the emergent police state.

These are direct assaults on the 4th amendment to constitution:

“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

They are direct assaults on freedom of movement.  How long until any attempt to move between cities or states brings the "show me your papers" order from deep in our collective nightmares? 

Government corruption is widespread.  A list of government "ruling class elites" who get away with things that you and I would be rotting in jail for is trivially easy to put together: Timothy Geithner, Charlie Rangel, Barney Frank, Tom Daschle, ...

Those whose names don't return pages of "corruption" links in Google say the stupidest things you can imagine.  Our executioner in chief, Dr. Donald Berwick believes having a shortage of health options keeps costs down, apparently the only instance in the known universe where the law of supply and demand doesn't work.  Kathleen Sebelius, secretary of Health and Human Services, says insurance companies competing against each other in a free market constitute a monopoly.  Julius "Seizure" Genachowski, head of the FCC and trouser mouse to self-described communist Robert McChesney wants to take over the internet and hired a guy who wants to destroy broadcasting to be in charge of it.  Let's stop there.  It's making me kinda sick.

I decided to join the "blogosphere" last February with the intent of writing on the techno-geeky things I love.  The top of the page describes it pretty well. Instead, I seem to write the most on the economic mess we are in because I feel I need to spread the word.  I would not take a bet that by this time next year, things will be better.

What's ahead?  We can be sure the current trends will continue.  Inflation will get ugly.  Remember, the official government inflation numbers don't include energy and food, so the numbers they report don't show how badly your budget is hurting as the costs of gasoline, and heating oil, as well as all food items go up.  Clothing costs will go up as well.  As the effects of the quantitative easing work through the market, all tangible items will get more expensive.  I would not be surprised for food costs to be up around 25% this year.  I expect gold to go over $1500/oz - really a modest increase - and silver to go up more percentage wise.  $50/oz would not surprise me.  At around $31 (today) you should still consider it.  Silver is notoriously more volatile than gold, so you need to have a strong stomach.  On the other hand, I have silver I bought at $5/oz - a 6-fold increase in value.

My most widely linked and read post was On Germs, Weeds, Companies, Governments and Skunks - a long post that ended with this observation:

We are strangling in a bureaucracy with a Code of Federal Regulations that has grown like a bacterial culture.  A nation that was founded by a constitution that fills about 14 printed pages in today's technologies, passes financial reform bills that go over 2000 pages, health care bills that go almost 3000 pages, and more.   Each bill creates hundreds of new regulations, which are so poorly written they have to be refined by hundreds of court cases.  The court cases effectively create new law and new regulations.  Since congress is in session every year and passes at least one new law every year, the total number of laws and regulations increases without limit and everything eventually becomes illegal. 

In my mind, the central problem we face in the struggle for personal liberty is how the web of regulations is tightening around us more every day, regulating the most minute aspects of life; how this "sand in the gears of life" is choking off businesses, moving jobs overseas, and grinding this country away.  We absolutely have to pare down the amount of regulations.  Instead, we have an administration that regulates by fiat what it can't get passed as law. 

Is 2011 the year the western economy collapse?  Could be.  Is 2011 the year the open shooting starts?  Same answer.  I wouldn't take the bet it doesn't. 

Waiting to Get Your Street Snow Plowed?

Listening to the commotion about "the government isn't plowing the streets in NYC" brought this to the mind of the lovely and fiercely independent Mrs. Graybeard.  I have to agree. 



{obligatory small print} While this is called "Democrats on an Escalator" and that's the way we first heard of it, we find it's actually a commercial for a heart health clinic that will help you get in shape in case you have to walk those few steps.  And don't have a government to come carry you. 

The 800 Pound Gorilla In The Room

The Federal Deficit.

I've written before that we don't have a revenue problem; we have a spending problem.  With federal debt virtually at 100% of GDP, not even counting the major entitlements of medicare, social security, and the new Obamacare, we simply have to cut our spending.  In a few years, sooner if inflation causes interest rates to rise, all of our tax revenues will have to go simply to cover the cost of the interest on our debt; then there will be no spending on anything else.  No defense budget, no entitlements, nothing will be left. 

Simply put, to reverse the course toward destruction that we are on, spending must be cut drastically.  Everything must be cut.  As soon as someone says, "that's not on the table" about anything, they've proven themselves useless.  Everything must be on the table.  

It would be handy if there was a budget for 2011 to talk about, but our despicable congress refused to put a budget together, instead "deeming" it passed - avoiding their main constitutional responsibility.  Without a budget, the government is funded by continuing resolutions, such as the omnibus spending bill that was subject of flaming rhetoric just 10 days ago.  Not having a budget makes it harder to see how bad things really are.  I'm sure that was one reason they use this method.

In 2010, we borrowed around 40cents of every dollar we spent.  We can't go on that way.  Clearly, we need to cut spending by at least 40% to balance the budget.  We also need to count the real expenses, including those "off-budget" items like Medicare and social security.

One other thing: you hear a lot about earmarks.  I'm not saying it's not a good thing, but cutting earmarks is doesn't get you there; they're simply not big enough to get us out of this mess.  For example, according to Taxpayers for Common Sense, in that 1.1 Trillion dollar omnibus spending bill, the earmarks totaled $8.3 billion, or 0.75 %.  When the spending needs to be cut by up to 40%, cutting earmarks doesn't get you anywhere.  Besides, congress is 99% corrupt lawyers: if you make "earmarks" illegal, they'll find ways around.

I've said that I find day-to-day politics pretty disgusting and this is a pretty good example why.  Still, we should contact our congress-critters and let them know we mean business.  I've heard dozens of pundits say that "those people" (that is, those opposed to this madness) want spending cuts but don't want it on their pet projects.  Our representatives probably believe that.  We need to convince them we're willing to see massive cuts to many government agencies, including closing some and sending people home.  Want to shutter NASA?  So long, it's been nice.  Want to shut down the national parks?  Just leave the gates open.  Want to call home our troops from overseas?  I'm sure the towns near bases would like having a few thousand more customers.  Get the picture? 

The alternative really is collapse, and if that happens, the parks will close, the agencies will close and the troops will come home.  It would be better to have some orderliness to all this. 

Entering the Sea of Doom

I hope you all had a wonderful Christmas, assuming you observe it, and a wonderful day no matter what you observe.  I purposely avoided news yesterday, just to have at least one day of without the nonstop bad news we are barraged with.  As the joke goes, "Break is over.  Back on your heads".

Frequent visitor and fellow electrical engineer-geek, LeverAction, posts on something I saw the other day that made shivers run down my spine.  In "Just How Bad Is It?" he points out:

Our national debt has risen by $2,000,000,000,000 to the level of $13,473,000,000,000.

The last figures I have for US GDP are from 2009, $14.1 Trillion.  I don't know what this year's figures are, but using the 2009 GDP (which will be close) and 2010 debt, that's a debt ratio of 95.5% of GDP.  It probably goes without saying that I'm skeptical of government numbers for growth in the economy and most generally reported statistics.  There's ample evidence that the Fed.gov leviathan changes the way they report such things all the time, in whatever way makes those in power look good.  John Williams at Shadowstats has made a nice little career of keeping track of these lies changes so that businesses and others can keep track of the stats they need without having to constantly fight them. 

How bad is 95.5% of GDP?  It makes us one of the worst in the world.  It's difficult for me to tell you exactly where we rank compared to other nations because the latest statistics I can find seem to be from various different years.  This graph (from here) is closest, and it's from 2009. 

The source here is ranking the countries by both the government and private debt as percent of GDP.  If you ignore the private debt side, you see that we're around third worst in the world.  I'm not sure why Japan isn't in this chart; it's possible the bank (Credit Suisse) that generated this didn't consider Japan. I think no matter who you count we're in the five worst government debt to GDP ratios. 

Conclusion?  The US is in really bad shape.  No surprise.  What really concerns me is that I'm not familiar with any country with debt to GDP ratios like ours ever becoming prosperous again.  They all fade to gray.  Or worse.  Or even worse.  What do you think?

It Came Without Ribbons. It Came Without Tags.

"And the Grinch, with his Grinch-feet ice cold in the snow, stood puzzling and puzzling, how could it be so? It came without ribbons. It came without tags. It came without packages, boxes or bags. And he puzzled and puzzled 'till his puzzler was sore. Then the Grinch thought of something he hadn't before. What if Christmas, he thought, doesn't come from a store. What if Christmas, perhaps, means a little bit more."
-- Dr. Seuss

(from)
It's a time for family and for holding close the ones who mean the most to you.  Yesterday, Mrs. Graybeard and I drove to the southern end of the state to visit my mom and brother, along with my niece and nephew.  Both of my in-laws passed away long ago, and my own dad preceded them by many years.  I have one brother; both my wife's older sister and younger brother have passed on.  The number of family members is dwindling.  My own kids are a thousand miles away, and won't be visiting.  No grandkids.  For the first time in our lives, Mrs. Graybeard and I won't put gifts for each other under the tree.  It has been a good year for us, and we've been blessed to be able to pick up toys as we wanted along the way.  Neither of us could put together a little list of things we'd like.

Things are not important.  Family is.  People are. 

Hold close the ones you love.  If we're very lucky, this will be the worst Christmas of our lives.  If we're not that lucky, these will be the good old days.  Either way, hold tight.  "Before you dot another 'i' or cross another 't', Bob Cratchit!"

It's one my of my blessings that a small group of really high quality folks stop by here to share my blather.  Thanks. 

ASM826 at Random Acts of Patriotism has a nice posting on the nativity that's really worth reading. 

Merry Christmas, "and may God bless us - every one" 

Net Neutrality - A Solution In Search of a Problem

So Chairman Julius "Seizure" Genachowski staked a claim on the Internet, despite being told by both Congress and the Courts not to.  This is the Executive branch declaring that the rest of the Government is meaningless.   Balance of power?  "I got your balance right here".  If you've been here for a while, you know I've been on this topic since last summer. 

A quick summary for the new readers, from June 19,

Julius Genachowski is a pawn of Marxist Robert McChesney. (did you ever notice how the Marxist groups always name themselves misleadingly?  Like McChesney's group Free Press, which is dedicated to the destruction of a free press).   They appointed the total tool Mark Lloyd (who vociferously praised Hugo Chavez) as Chief Diversity Officer.  Doesn't this guy realize Chavez arrests people like him?  Guess not.  He figures he'll do the arresting.  Tyrannies are cool if you get to run the gulag, right Mark? 

The left has been drooling over this idea for at least 10 years - I think I remember reading about this in the 90's.  But there's no need for it; ISPs aren't blocking services from any site, it would be economic suicide.  The 'net is the wonderful place it is specifically because the Fed.gov has kept its fat, ugly hands off it and private business developed it.  I'm sure commies like Genachowski, Michael Copps (FCC Commissioner) and Robert McChesney honestly think the ISPs want to make customers mad, just like they think most food companies want to kill off their customers (S510), and that oil company executives want to kill their own children.

McChesney said in 2008 that net neutrality is just a part of his plan to destroy the capitalist system in the US

"McChesney wrote in the Marxist journal Monthly Review that "any serious effort to reform the media system would have to necessarily be part of a revolutionary program to overthrow the capitalist system itself." Mr. McChesney told me in an interview that some of his comments have been "taken out of context." He acknowledged that he is a socialist and said he was "hesitant to say I'm not a Marxist.""

So since Net Neutality says that the ISPs may not discriminate against any legal 'net traffic (leaving the door open to shutting down any dissenting voices) here's a thought for the ISPs: 

Right now, around 2/3 of the Internet traffic is Unsolicited Commercial Email: spam (this article measured 90.4%!).  The way I read that statement, all of the filtering and fighting the ISPs are doing to keep spam under control will be illegal.  Doesn't that say they have to let the spam flood the world?  It's giving the leftists what they want: all legal traffic treated equally.  Perhaps an ISP that's connected to the Fed.Gov buildings in the District of Criminals might let them drown in spam.  Flood the congressional offices until the aides are demanding they do something.  Maybe the congress will get rid of the stupid FCC takeover of the 'net and put the filters back in place. 

As much as I hate spam (in my world, spammers should get the death penalty) maybe it would work.  I hate spam as much as anyone.  I had a web page 20 years ago, when you could put your email address on it and nothing happened.  Then I started getting 50 spams a day, then 100, then 150... had to dump that address.  But I could put up with it for a while to shut down the FCC. 

A Short Course on Why The Economy Was Going To Crap Anyway

The first thing to bear in mind is that the Ben Bernank and the other financial experts don't know what they're talking about - or are profligate liars (or both).  Do you remember Alan Greenspan, or the previous secretaries of the treasury in, say, 2006 saying that really bad times were coming?  You don't remember it because they didn't.  Therefore, either they didn't know bad times were coming, or they were lying to serve the "greater good" (making themselves and their friends safe from what they saw coming).

Ergo, why should you believe them now? 

There are some very simple reasons why the economy was essentially destined to start slowing down in the early 21st century.  A recession was inevitable.  Let me outline some reasons:

• The biggest demographic group in the country, the boomers, are entering retirement.  As adults age, their spending slows for a couple of reasons: first, they tend to have a lot of stuff and don't need as much as twenty-somethings, and second, they look at their retirement preparations and start to save a lot more, crimping spending even more. 
• The housing bubble was destined to pop.  The stupid and corrupt practices that led to unqualified people getting loans have been well documented (for example).  The essential thing to remember is that the historical requirements for a mortgage (that your payment was about 1/4 of your gross pay) were there for a reason: when it was followed, mortgages didn't default at a high rate.  This, in turn, says that the price of an average house can't grow faster than an average salary grows, and the housing price was growing much faster.  When that happens, people can't afford houses anymore.
• Generational cycles - sort of an extension of the first bullet point.  In addition to simple curtailing of expenditures of the older generations, the students of this cycle assign a set of characteristics that describe the various living generations.  While I'm not sure I like it as a general rule, it's predictive ability seems decent.   A good summary from a financial planning firm is here.  My version of the short summary goes like this: each generation differs from their parents and strives to not repeat their mistakes.  Boomers were raised by "Ozzie and Harriet" or "Leave it to Beaver" parents ("Greatest Generation" WWII vets).  The boomers became "both parents working" families with latchkey or daycare center kids.  They did this to "get ahead" in a society where there was a lot of competition for every job.  Their kids, Gen-X, are more likely to home school, have one parent at home more often, and are less likely to try to turn themselves inside out to "get ahead" than their parents.   While boomers were the arch-type of the birth control generation, their kids are more likely to have more than just one or more than two kids than their parents.  Because of this, they will have less to spend.  Because they saw the excesses of their parents, they probably want to spend less.  
• The incredibly profligate government spending was going to have to stop.  Not stopping it 10 years ago has only made the need to stop it more dire.  

When you combine all of these aspects, the economy was destined to at least go into a slowdown (a.k.a - recession) as we got past Y2K and into the 21st century.  Winter was already coming.  The actions of the detestable Federal Reserve to keep the "good times rolling" undoubtedly contributed to, helped inflate the bubble, and worsened what we're going through now.  If they had stayed out of it, we would have had, I believe, a more bearable slowdown, rather than the collapse that is upon us.  A Florida winter, rather than a Montana winter.

What Would You Do If You Had A Year Left? Two Years?

Because you do.  This post is almost a year old and most of it is happening already, to some degree:

Celente says that by 2012 America will become an undeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts and job marches, and that holidays will be more about obtaining food, not gifts.

Sometime in the next two years, it's almost certain that the final collapse of the western economies will happen. At that point, it's hard to know what will be left of society and what we will turn into.  One thing I'm sure of is that it won't be the end of the world, just the end of the world as we know it. 

A couple of years ago, Tim McGraw had a monster hit song in the Country music world, "Live Like You Were Dying".  The basic story is conversation with a guy who in his early 40s discovers he has a terrible disease.  His answer is:

I went sky divin'
I went Rocky Mountain climbin'
I went 2.7 seconds
on a bull named "Blue Manchu"

This all sounds terribly self-centered, although maybe some would say self-actualizing.  It's the kind of thing you do if you have problems, but your children and family will just have to muddle on without you.  What we're looking at is a situation where everyone in the family, the extended family - your tribe - has problems.  Will you be a leader?  Will you be protector?  A guardian?  Will you be useful when there are problems?

Useful is the best thing you can be.  School started a while back, and while we don't know the exact date for the final exam, we know there will be one.  Doing any training?  Are you putting a few cans aside? 

(image from Kellene at PreparednessPro)

Word

(from the wonderful XKCD - my M/W/F morning opener)

I haven't written anything on the whole Wikileaks affair here, other than a comment last weekend.  Basically, I've said,

"... my view of the whole Wikileaks thing is not positive toward Assange. ... In a nutshell, I am extremely skeptical that their motives are good. That, in turn, probably makes me see people attacking the world in their defense as not working from good motives as well. The tactic of leaking classified documents that make an opponent look bad, after all, is straight from Alinsky ("4. Make the enemy live up to their own book of rules. 5. Ridicule is man's most potent weapon.")

I have not tried to wade through the leaked documents; I just don't have the time. I've only come across the occasional reference to an item that is not at its core anti-US, though, and it could simply be accident that they let out something that isn't anti-US. "

It's a crude statement, but you can consider things that happen less than 5% of the time to be random events.  It looks to me like Assange and his group is virulently anti-American, and they simply let out some items that aren't anti-American every now and then - either by accident, incompetence, or (possibly) to make it appear they're not just anti-American.  Probably random events. Add to that the fact that organizations supporting Julian Assange are supported by George Soros, and it just smells too much like yesterday's fish. 

I know a lot of (small "L") libertarians have no problem with what Assange has done, and believe there's no need for secrets in the world.  While the general answer to all political questions is more individual liberty, no matter how much I think about this it, I also know that wanting a world with no secrets and complete openness is a "skittles crapping unicorns" mindset: idealistic to a fault.  Sun Tzu said, "all war is based on deception" and it's absolutely imperative for nations to have secrets. 

No surprise: there are some really heinous governments in this world.  You don't have to look farther than Cuba or Venezuela - and from where I'm sitting, Cuba is closer than Washington DC.  Seen any really close looks at what goes on in Venezuela coming out of Wikileaks?  Cuba?  Read Babalu any day and you'll find stories leaking out of the Castro regime daily.  What about truly secretive governments like Myanmar (Burma) or North Korea.  The NorKs regime is horrific.   China routinely violates human rights. Seen any Wikileaks out of Burma?  How about China?  Any mention of any of these I've seen relates to things the US is saying about them. 

I'm not saying the US is perfect.  If you've spent any time here at all, you know that I'm not a fan of much of what's going on in the US.  But trying to make us look like the source of all evil in the world makes the person doing so appear not to have a tremendous attraction to truth and openness at all.  It makes them look like just another anti-US operative trying to destroy us.

How Come Nobody Told Me...

that there's a whole genre on YouTube of people making Laurel and Hardy dance to music recorded years and years after their movies were filmed?  I feel like I live such a sheltered life!



Hey - it's Friday.  It's a week until Christmas.  The universe will keep unfolding as it will, whether we fret about or not. 

Go to the YouTube page and check out the different songs people put this scene to.

I Think I'm On The Wrong Planet

There isn't a day that goes by that I don't get a "WTF???" reaction when I read the news.  This isn't where I grew up.  This isn't the country I knew as a kid.  This isn't even the planet I grew up on.

Did I fall into some sort of wormhole, and I'm really on some obscure planet around Tau Ceti or Wolf 359?  I keep expecting to look up and see Worf, or Quark, or a shape shifter from the Delta quadrant like Odo.  There ought to be a babe with a funny looking nose any second now... 

Where I grew up, the garbage cans didn't spy on you.

Where I grew up, we put mufflers on cars to make them quieter, we didn't try to make them noisier.  (Confidential to the morons in Congress: did you know that the noise from an internal combustion engines is one of its inefficiencies?  If it was perfectly efficient, there would be no noise, and the exhaust would come out colder than liquid nitrogen).

I remember, in the 1980s, when liberals were making fun of Reagan and his folks for saying nuclear war was survivable.  They wanted to die in neat little piles.  Now the democrats are talking about how survivable nuclear war is. Did that happen recently?  This fall?  Huh. 

When did the world turn upside down?  As Instapundit says (as if he needs a link from me!)

They told me if I voted Republican, we’d be plunged deep into a scary 1950s-style pre-nuclear-war “duck and cover” posture. And they were right!

One thing that is constant is that we did do duck and cover drills under our school desks.  So maybe this is home....

but, no, where I grew up, we didn't think we could cure bankruptcy by borrowing more money.  No, people started businesses and worked hard to provide for themselves and their families, not expecting handouts. 

When did they start making laws so complicated and so big that congress not only can't read them, but thinks it's a waste of time to read them?  Why is an obscure weapons treaty so incredibly important that it has to be rushed through a lame duck, over the Holiday session, and signed without reading it, either? Are they trying to weaken the US?

Gort, are you out there?  Gort?  Klaatu barada nikto. 



 

That Slippery Slope Keeps On Tilting

Ambrose Evans Pritchard at the Telegraph (UK) had an article over the weekend that is unique in its honesty.  It's titled "The Eurozone is in Bad Need of an Undertaker" and lays out the brutal truth that the Euro is in dire trouble.  Simply put:

"The EU’s Franco-German "Directoire" and the European Central Bank have between them ruled out all plausible solutions to the eurozone’s debt crisis", explains the article heading.  (emphasis added - GB)

Farther down it contains this gem:

“If the Eurozone follows this path, either all of the sovereign debts become German public debt, or the Euro will collapse,” ... says " Stefano Micossi from the College of Europe, the sanctum sanctorum of the European Project".

An earlier article (12/8) in the Mail exclaimed, "It's not IF the euro collapses... but WHEN"

As Angela Merkel herself has said, if the Euro collapses, the European Union collapses.  When you remember the Fed "loaned" trillions to EU banks, do you think the dollar survives?

The problem, quite simply, is that there is not enough money in the EU for all of the debt that has been accrued.  The Euro is essentially funded by Germany first, then France and the UK.  In essence, to bail out the countries in trouble, if it's even possible, the upper income taxpayers in those three countries must have their lives confiscated.  It's punishing good taxpayers in some nations for problems other nations have created.  How long can that go on? 

In London they're doing this over having to pay college tuition.  What happens when you ask them to pay someone else's tuition?  Someone in a different country? 

News From The Southern Front

This may not have made news where you live, but I notice that Hugo Chavez has made a deal with Iran's AhmInAJihad to place Iranian Intermediate Range Ballistic Missiles in Venezuela.  Missiles with this sort of range could hit much of South America and the Caribbean, and even reach the southern US.  More details at Babalu and Fausta.  Caroline Glick's column (first link) has great coverage of more of the nuances of why this is going on. 

Just about a half century ago, 1962, the Russians did the same thing in Cuba, and the Cuban Missile Crisis ensued.  President Jack Kennedy, for perhaps the only time, showed he had some balls and stood up to Khrushchev, enforcing a naval blockade of the island.  The period is remembered by locals who lived through it here on the Space Coast; there are stories of highway A1A being closed by military transports, and massive movements of troops.  Me?  I was a snot-nosed grade school kid in Miami.  I knew something important was going on, but didn't grasp the "adult situation".

Do we expect Obama to live up to this example?  Not hardly.  Not with the Boy King.  As James Carville recently said, “If Hillary gave him one of her balls, they'd both have two”. 

Iran's Shahab 3, said to be one of the missiles in deployment in Venezuela. 

When Will Really Bad Inflation Hit?

It's a tough question, but one heavy on my mind as we come to the end of the year.  If I'm going to get most of my 401k emptied and into inflation hedges, this would be the time to do it, I think.

The National Inflation Association published an article a few weeks ago answering questions about when they think we'll see their food price predictions, "There is a very good chance of our projections being reached by the end of calendar year 2015 and a slight chance that they will be reached as soon as the 2012 elections."   John Williams, of Shadowstats.com, says in this interview (from 12/8) thinks it could be much sooner; that it could be as soon as this spring. 

The Bernank is 100% sure he can handle inflation.  (I'm not sure he'd know what it was if it bit him on the ass.)  But bear in mind that if he did raise interest rates, it would collapse the US economy into a deep black hole.  Shadowstats says the real inflation rate is running around 8% per year; if the Fed's Discount Rate were to be raised from zero to that, yes, it would stop inflation -- as well as everything.  It would help Treasury Bond Sales, which are currently crapping out (as anyone with even a nano-particle of sense realizes we're in trouble and they want more "yield" to make up for the risk of buying our bonds), but that's the only thing that might be considered help.

Collapsing the US economy might not necessarily be a bad thing - sometimes, when you're really sick, you need very strong medicine.  Think chemotherapy.  Maybe a reset pulse is what we need; a chance to demolish the welfare state, tear up 2/3 of the CFR.  There's good that could come out of it.  But whoever allowed it to happen would not survive.  Politically, and possibly, well, maybe not survive at all.  And it's entirely possible that during the chaos, the state could be taken over by communists, or other morons.  

So when will it get really bad?  I can't answer that.  But I can't stay here long; need to go buy some more silver and gold.  The brass, copper and lead got ordered last night. 

a little depression-era humor... 

Now is The Winter of Our Discontent*

This is a winter of severe disruption around the world, as the old order edges further down the slippery slope, and chaos beckons.  Europe is burning, and I wonder how long until it hits our shores.

(from the Daily Mail, 12/10)

Today's college students in the UK grew up hearing stories from their parents about attending college for free, but that ended under John Major's administration in  the 1990s - when these students were children or before they were born.  These riots are supposedly the result of increasing college costs from 3000 to 9000 pounds (roughly $14,000) maximum.  It's also possible that the increase is justification for riots the left has been looking for an excuse to hold.

There is no doubt that there are groups trying to cause chaos and governmental collapse.  One of the hackers defending Wikileaks, for example, goes by the name of "Cold Blood" and says,

"We will fire at anything that tries to censor WikiLeaks." Really? Adding that the group wanted to be a, quote, "force for chaotic good."

"Chaotic Good"??  There is only one force at large in this world who thinks chaos is good.  I don't know what the kids call him these days, but he's known for throwing Jews into gas chambers, sowing killing fields in Cambodia, China and Siberia, shooting abortionists, and pretty much any instance you can name of coming to "steal, kill and destroy".  Does it not look like we are re-living this haunting work?

The Gods of the Copy Book Headings - Rudyard Kipling

AS I PASS through my incarnations in every age and race,
I make my proper prostrations to the Gods of the Market Place.
Peering through reverent fingers I watch them flourish and fall,
And the Gods of the Copybook Headings, I notice, outlast them all.

We were living in trees when they met us. They showed us each in turn
That Water would certainly wet us, as Fire would certainly burn:
But we found them lacking in Uplift, Vision and Breadth of Mind,
So we left them to teach the Gorillas while we followed the March of Mankind.

We moved as the Spirit listed. They never altered their pace,
Being neither cloud nor wind-borne like the Gods of the Market Place,
But they always caught up with our progress, and presently word would come
That a tribe had been wiped off its icefield, or the lights had gone out in Rome.

With the Hopes that our World is built on they were utterly out of touch,
They denied that the Moon was Stilton; they denied she was even Dutch;
They denied that Wishes were Horses; they denied that a Pig had Wings;
So we worshipped the Gods of the Market Who promised these beautiful things.

When the Cambrian measures were forming, They promised perpetual peace.
They swore, if we gave them our weapons, that the wars of the tribes would cease.
But when we disarmed They sold us and delivered us bound to our foe,
And the Gods of the Copybook Headings said: "Stick to the Devil you know."

On the first Feminian Sandstones we were promised the Fuller Life
(Which started by loving our neighbour and ended by loving his wife)
Till our women had no more children and the men lost reason and faith,
And the Gods of the Copybook Headings said: "The Wages of Sin is Death."

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four
And the Gods of the Copybook Headings limped up to explain it once more.

As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return! 


* confidential to any dweebs who studied Shakespeare or Literary Criticism in general: yeah, I understand that's not what the famous quote is really saying.  It was saying the bad winter was over, not starting: "Now is the winter of our discontent, Made glorious summer by this son of York".  

A Look At An Unseen World

Mrs. Graybeard and I have our first Christmas get together of the year tonight, so just a short post pointing out something most people don't see everyday.  A video showing how air traffic on the European continent responded to the Icelandic volcano last April...



Similarly, Flight Aware, a free site where you can track any reported flight in the US, has this video showing the flow of traffic across the US in a 24 hour period.  You can watch the ebb and flow, watch it move coast to coast, and see how the transoceanic flows mostly come in, then go back out.  In the morning, the US East Coast is lit up with activity.  It shifts west as the day goes on, and then drops in activity level to the middle-of-the-night "red-eye" flights, only to start up again the following sunrise. 

If I Got To Dismantle The Fed.Gov

Yesterday, there was a post on The Smallest Minority, along the lines of "What's Wrong With A Little Socialism?", and commenter Jeff C. posted one of those stupid liberal things you see: a list of government programs that they obviously think are just fantastic and challenge you to say you don't want to use them.  (Most liberal philosophy is on the intellectual level of a bumper sticker; this is too long to fit on a bumper sticker, but at that same level).  Like Obama challenging the idea of faith guiding our daily decisions by quoting Leviticus (I think it was...).

But it got me thinking, despite the "tax the rich" crap we've heard so much it sickens us, we know that it's the spending.  We know, thanks to Dr. Hauser, that tax incomes remain around the same as percent of GDP regardless of tax rates - tax rates determine if the economy grows and creates opportunity for more people to improve their standard of living.  We all know that deep cuts in spending from both discretionary and the entitlement budgets have to be cut if we're going to turn this ship around.   So it got me thinking, if I were king of the forest, what would I cut? 

Some of it is easy, and you've heard it all before.  The Department of Education has not educated a single person, and needs to go.  The Department of Energy was founded to help us get independent of foreign oil, and we have become more dependent on foreign oil.  BATFE is a useless black hole of suck, and needs to go.  The tax code needs to go, and the IRS sent home. 

But here's a couple that will surprise you.  I deal with a couple of "big name" agencies that have undeserved good reputations, the FCC and the FAA.  Both of these were useful at some point, but have long outlived it.  The FCC needs to be cut back to a bare bones couple of geeks who help keep services from stepping on each other, maybe monitoring the spectrum to find violators.  Originally, they provided technical direction for the development of radio and television, and helped get broadcasting started.  Now their technical side is routinely stepped on by stupid political hacks with unimaginably stupid ideas like Broadband over Powerlines while the political appointees advance insipid attempts to regulate the content of news and programming, including whether you have the required number of women and minorities.  The FCC probably hasn't done anything useful since the mid 1960s and needs to go.  Upset you saw Janet Jackson's Wardrobe Malfunction?  Complain to the network and the advertisers.  

The FAA is likewise just about useless.  When it comes to the systems that keep airplanes communicating and not flying into each other in mid-air, they leave all the technical decisions to the industry committees who define the systems, and just have you verify you meet the industry standards.  There's no reason we couldn't just report to the industry committees, with minimal changes.  Did you know that the FAA has us certify radios repeatedly, for every different aircraft they might get mounted on, and the cost to put a newer design radio on an old aircraft is so high that airlines just won't do it?  Why have standards-based acceptance if you then have to certify on each aircraft?  Why not just go to the airframe maker and prove you work on their plane?  It's needless duplication of efforts. 

NASA needs to go.  This pains me for many reasons.  I grew up in the Mercury/Gemini/Apollo days and idolized them.  I've worked on a NASA satellite, for the JPL, with people who put satellites out at Jupiter.  But events this year have proven that they lost their recipe sometime long ago.  Then, of course, there's this abomination.  Buh-bye.

And don't get me started on the government takeover of student loans.  Or Amtrack.  I could do weeks on this topic.

Headline of the Day

I've never had a headline of the day, but Junior Deputy Accountant wins the Interwebs with "Bernanke on 60 Minutes: I Did Not Have Sexual Relations With That Free Money",  wherein we learn that Ben is 100% confident that he can prevent runaway inflation.  He insists that the economy is in bigger danger of deflation and that inflation is under 2%. 

Srsly.  You just have to wonder about a guy who reads his econometric data and doesn't cross check it with the real world.  Inflation is here.  Ben - go grocery shopping.  Buy your own gasoline.  Pay a bill.  Inflation is here now.  I've written on this many times, as have many others. 

"The Bernank" and the other central bankers around the world have failed at every step of the way because they're using bad theory.  Dumping money into a broken system just makes it a broken system with lots of money in it.  It is already causing inflation, and exporting inflation to China - which isn't going over well.  Governments can't resist the lure of money that doesn't have to be limited by some scarce commodity (think gold).  They always want more money: to buy votes, or to go on foreign adventures.  If you're limited to a standard, you have to be disciplined. 

Oh, and they're not "printing money".  They're not going to affect the monetary supply.  They're just buying Treasuries with their own money, that's all. Must see TV:




Now let me go off into my own wild, crazy idea.  I believe that Ben, at the behest of Fed.gov, is deliberately crashing the dollar - to correct our trade imbalance with China.  We have pestered China to not peg their currency to ours and let it float up in value, as it should.  They have told us where to stick that.  So if we can't raise their currency, we can crash ours.  Sort of a giant game of chicken to see who gives up first. 

In Case You Forgot - Why Politics and Politicians Suck

So The One has signed a deal to not increase tax rates on everyone for the next two years.  Someone had to get the credit and it might as well be him, right? Almost as if it was planned that way, and this was all theater.  Do you think?....

It helps to remember some things.  First off, this question could have been handled at almost any time up to now, and certainly could have been settled before the election.  The rates have been in effect for 10 years, and everyone knew when they were going to expire.  Only to get the maximum political theater, they waited until the last possible minute. 

The same goes for unemployment benefits.  Why did the bill have to come up now?  Again, everyone knew from the day the last bill was passed, giving essentially two years - two years - of unemployment benefits, that it was going to expire this month.  Clearly if they wanted to, they could have addressed that months ago.  The whole purpose of letting it sit until now was to allow those arrogant, pompous buttheads to get photo ops for commercials that will air two years from now.  "How could they be so cruel to cut benefits at Christmas?? "

Never forget - you're being played.  Always look for the other hand.  Always ask why they're putting on a show.  Never accept at face value. 

Ahh Geek Out

The last couple of days have been taken up with getting my system to be a successful Linux Ubuntu system.  I've been running XP Home on a three year old Dell desktop since I got it, and the rest of our home network is on XP.  I've been telling myself that I was going to break with the Micro$oft empire, and finally got around to it.  It has been straightforward, and I'm blogging from Ubuntu now.

Ubuntu seems to be generally regarded as a pretty simple distribution of Linux to get up and running (Ubuntu, by the way, is the Swahili word for "self-impressed", or smug).  Sure enough, I ran off the CD in live demo to make sure most of my internet apps got up and running easily, and once I saw that, I installed it as a dual boot option.  That way, when the computer wakes up, it presents a boot option screen of Linux-Ubuntu or XP.  Ironically, I've done this partly because of system security guys like Borepatch recommend doing your online banking with Linux simply because of fewer attacks being possible, but my main financial/checkbook software won't run under Linux and requires me to use my Windoze partition. And a hat tip to another engineer I know who helped with some demonstrations for me. 

Being an old guy (Graybeard is a description, not an honorific), my first home computer was actually an S-100 bus computer with a tape recorder for program storage.  Kids, S-100 was the standard before the Commodore 64 and IBM PC were invented.  I got my first PC"compatible" (not "clone") in 1986, and have had an XT, 386, 486, Pentium, now a Dual Core.  I worked on DEC computers with octal programming switches that turned into very large, heavy paperweights if the program crashed.  I used command line Unix at Major Southeastern Aerospace Contractor but not a WIMP-interfaced version (WIMP = Windows, Icons, Mouse, Pointer), so I have my home computer chops.

A little learning curve must be climbed, but nothing wrong with that. 

But you shouldn't have to be this guy...

Button Up Your Overcoat

Button up your overcoat,
When the wind is free,
Take good care of yourself,
You belong to me!

(c) 1929,Henderson, DeSylva & Brown


The news is reporting that "At least 60 people (source of image) have died across Europe during the current cold snap, as snow plagued transport in Britain on Friday and serious flooding prompted mass evacuations in the Balkans."

My first reaction was, "What's with the freakin' Europeans??  They die when it gets hot.  They die when it gets cold.  It gets really cold up there.  Think of those Currier and Ives images of ice skating on the Thames, and those images of fighting in the snows during the Battle of the Bulge.  It gets cold up there."

Then I read this stunner:

Police in Newcastle in the northeast of England reminded locals to wear a coat when they hit the pubs this weekend. 

I guess that's what you get when you become so dependent on the nanny state: people so sheep-like they don't even think to put on a coat when it's dangerously cold outside. "You belong to me" indeed.

Simple Investments for Inflationary Times

I've been beating the drum on the coming inflationary times, and commenting on where you can see it right now.  In the last few weeks, the story has been breaking that JC Penney, the GAP and some other clothing stores expect cotton prices to be up drastically - perhaps 30% - by the spring - just three months away.  That doesn't necessarily mean clothing prices will be up 30%, but the amount of increase in materials pricing the clothing companies can absorb isn't that great.  It's entirely possible the price we pay may be up 25% or more by April. 

With Christmas coming, and Hanukkah in full swing, clothes may be appreciated as gifts; it's hard to get more practical.  If you're going to need to replace some of your clothes soon, make it sooner rather than after the price increases. 

Another practical item is always food. With food prices going up now, and worse inflation to come, any food that you can put away is worth grabbing when you can.  Every store runs specials: when they have a "buy one, get one" or some such offer, take advantage of it. 

Don't overlook coins.  This isn't a very well kept secret, but the US nickle is currently worth over 6 cents in melt value.  That means if you had 5 nickles, they're worth over 30 cents, not 25, and you can see that the more you have the better off you could be.  US coins have been devalued many times over the years; in 1965, they stopped minting silver quarters, dimes and half dollars, and changed to a sandwich of copper and nickle.  The penny became copper clad zinc in 1983.  1982 and earlier pennies made of solid copper are worth 2.6 cents in melt value, and are still out there in circulation.  With nickles at 125% of face value, they can't make them the same way for too much longer, especially with inflation being designed into the system.  Will they try to remove the old nickles from circulation, like they did with the silver certificate dollars in the 1960s, or just substitute cheaper versions, like they did with the pennies in 1983?  I don't know. 

It couldn't hurt to keep nickles and copper pennies you get.  Even if they don't buy them back, there may be opportunities to sell them at the real melt value. 

Words Fail Me

Sometimes, there just are no words.  Like when a member of the board of the Federal Reserve says more Quantitative Easing (QE3) may be required.  Thanks to Zero Hedge again, who is really on a roll. 

"If the economy grows more quickly than I currently anticipate, the purchase program will need to be reconsidered and perhaps curtailed before the full $600 billion in purchases is completed. On the other hand, if serious risks of deflation or deflationary expectations emerge, then we would need to consider whether expanded asset purchases should be used to address these risks."  (Charles Plosser, president of the Philadelphia Federal Reserve Bank).

I note the Chinese haven't gone insane.  Bloomberg reports their gold imports soared as they dump dollars and turn them into something with value.  They clearly see that the Fed intends to destroy the dollar. 

China’s gold imports jumped almost fivefold in the first 10 months from the entire amount shipped in last year as concern about rising inflation increased its appeal as a store of value, said the Shanghai Gold Exchange.(emphasis added -GB)

Got gold and silver?  If the Chinese government is getting rid of our dollars, buying fewer bonds, and buying hard commodities, does that tell you anything? 

An Interesting Moment At Work, Today

We have a weekly staff meeting at work, every Wednesday at 11 AM.  My boss, thankfully, wants this meeting about as much as we do, but holds it because his boss told him to, which means all of us are there because our boss told us to be there.  Anyway, our boss was late to the meeting, and the group of seven engineers (most of us "higher pay grade" engineers, which is to say older guys), started talking about the economic situation.  We're a group with diverse backgrounds; three of us not even born in the US, and of the seven, six believed the Euro can't survive; the seventh didn't seem to be following any of this.  The consensus seems to be that it will definitely be gone by this time next year, and summer to early fall seems to be what the guys are thinking.  A guy whom I shared an office with 10 years ago, and who was very financially savvy, said that he had recently gotten out of stocks and into bonds for safety for a while.  I've said before that I've positioned myself with as little exposure to the broad stock market as I can manage.

I have a couple of points here.  The first is that the I'm often concerned that the population at large isn't really aware of what's coming, and it's nice to know that we're not alone in thinking of this.  Tyler Durden, over at Zero Hedge reports that there have been 30 consecutive weeks of equity fund out-flows from the market.  It's encouraging to see people doing this to protect themselves from too much exposure to stocks.  Individual investors are shifting away from stocks. (chart from Zero Hedge)

The second point is that the guys at the meeting never broached the subject of the role of the US dollar in all the life and death of the Euro.  CNBC reported a little while ago that the US is going to give more money to bail out the EU.  We have been bailing out the EU since 2008.  Again, thanks to Tyler at Zero Hedge:

One may be forgiven to believe that via its FX liquidity swap lines the Fed only bailed out foreign Central Banks, which in turn took the money and funded their own banks. It turns out that is only half the story: we now know the Fed also acted in a secondary bail out capacity, providing over $350 billion in short term funding exclusively to 35 foreign banks, of which the biggest beneficiaries were UBS, Dexia and BNP.  Since the funding provided was in the form of ultra-short maturity commercial paper it was essentially equivalent to cash funding.  In other words, between October 27, 2008 and August 6, 2009, the Fed spent $350 billion in taxpayer funds to save 35 foreign banks. And here people are wondering if the Fed will ever allow stocks to drop: it is now more than obvious that with all banks leveraging the equity exposure to the point where a market decline would likely start a Lehman-type domino, there is no way that the Brian Sack-led team of traders will allow stocks to drop ever... Until such time nature reasserts itself, the market collapses without GETCO or the PPT being able to catch it, and the Fed is finally wiped out in one way or another.

I realize a lot of people view Glenn Beck as more clown than news source, and I originally subscribed to his online site because I find him to be rather funny, but he has been telling a story for quite a while that the world's economies were linked in the 1960s as a form of Mutually Assured Economic Destruction.  The Euro and the dollar are so linked that if the collapse of the Euro doesn't bring the collapse of the dollar, it will weaken it so badly, almost anything will knock it the rest of the way over.  Ironically, the people who linked the economies said their plan was resistant to almost anything, except for a group of non-state actors, who wouldn't really be affected by the chaos and have nothing to lose. 


Finally, on how well known this all is, the Lovely Secretary of the Homeland, Mrs. Graybeard recently placed an online order with one of the providers of long term storage food items, and got this response (in part):

With the announcement of QE2 on November 3rd, many of our customers became concerned about inflation in commodities prices, in particular food. As a result, we have experienced an unprecedented increase in sales that has continued until now. Because of this, many of our vendors have had a difficult time keeping up with the industry wide demand, especially for canned food storage.

So, yes, a lot of our neighbors seem to be waking up and bracing themselves for the storm that is coming onshore.