Another Warning

BMO Capital Markets says, "Go to cash in plain English". 

Mish has a translation into "Non Financial Guy" although the original link is pretty good, too.  From the BMO piece:

Conclusions

We see credit crisis II as just beginning. Few markets are untouched. Few signs of optimism can be seen. We are now at the tipping point when the crisis becomes more obvious. Markets will get more dangerous during this phase.

We advocate a zero weight toward equity, and that investors convert their equity positions to cash.

We will continue to provide updates in our daily Market Elements, Relative Strength Filter, and our topical Focal Points publications.

Gee didn't Helicopter Ben say everything is just peachy?  Can't understand why people might want to buy gold? 

Asked whether a double-dip recession is likely, Mr. Bernanke repeated a reassurance he offered Monday that he doesn’t think so. The Fed is forecasting moderate growth in the 3.5% range, with modest declines in unemployment, and it’s sticking with that forecast. An important transition could be underway for the economy — away from government support and toward private demand, he noted. That’s a formula for continuing expansion.

When Gasoline Saved the World From Pollution

I used to get a trade journal called "The Industrial Physicist", a free publication for qualified subscribers by the AIP, who publish Physics Today.  I will always remember a handful of concepts I first encountered in those journals. 

The first one is that when gasoline powered automobiles first came out everyone thought they were saving the world from pollution. 

Before the invention of the car, transportation was largely by horse. There are a few problems associated with horse transportation that we don't think of today.  Horses produce large amounts of horse manure and urine, and by the end of the 1800s, American cities were drowning in them.  Horses would die and be left in the road, obstructing traffic.  Flies and other vermin were omnipresent, spreading disease, and the stench was overwhelming.  When it rained, streets turned into almost knee-deep swamps of wet manure.  When it was dry, the manure dust would cloud the lungs of city residents.  One New Yorker in the 1890s calculated that by 1930 the horse droppings would rise to Manhattan's third-story windows.  In 1894, the Times of London estimated that by 1950 every street in the city would be buried nine feet deep in horse manure. No one knew what to do.  The horse had been the basis of human transportation forever. 

Horses need to eat. According to one estimate each urban horse probably consumed on the order of 1.4 tons of oats and 2.4 tons of hay per year. One British farmer calculated that each horse consumed the product of five acres of land, a footprint which could have produced enough to feed six to eight people. Probably fifteen million acres were needed to feed the urban horse population at its zenith, an area about the size of West Virginia. Directly or indirectly, feeding the horse meant placing new land under cultivation, clearing it of its natural animal life and vegetation, and sometimes diverting water to irrigate it, with considerable negative effects on the natural ecosystem.  Horse food had to be transported to the cities, requiring extensive infrastructure to support the effort.  Trains ran on rails under steam power, but getting things to the trains and from them to their final destination required - you guessed it - horses. 

And what goes in must come out.  Estimates were that each horse produced between fifteen and thirty pounds of manure per day. For New York and Brooklyn, which had a combined horse population of between 150,000 and 175,000 in 1880 (long before the horse population reached its peak), this meant that between three and four million pounds of manure were deposited on city streets and in city stables every day. Each horse also produced about a quart of urine daily, which added up to around 40,000 gallons per day for New York and Brooklyn.  Vacant lots became piled high with manure; in New York these piles sometimes rose to forty and even sixty feet deep.

It was into this world that the miracle of the internal combustion-powered, gasoline-fueled automobile arrived.  In the span of two decades, the car eradicated a major urban nightmare that had strained governments to the breaking point, tormented the people, and brought society to the brink of despair.  Cities became much cleaner places. 

Now I'm not saying that cars don't bring problems.  I'm not saying oil exploration and gasoline production don't bring problems.  What I am saying is that we have lost the perspective of just how much cleaners cars and gasoline have made everything, and that the idyllic past was not as beautiful and unscented as we might want to believe. 


Much of the content in this posting is credited to

Morris, Eric, "From Horse Power to Horsepower",  Access number 30, Spring 2007
http://www.uctc.net/access/30/Access%2030%20-%2002%20-%20Horse%20Power.pdf

Odds and Ends And Stuff

Feeling a little better as an unplanned day off closes.  I have an almost Brigid-like post (as if that's possible) about houses, homes and the lives they see rolling around in my mind, but some other time.   

Yesterday, John at Improved Clinch had a link to a post by Vin Suprynowicz "Do You Really Believe They're Going to Pay Off This Debt?".  If you've been around here, you might know that I believe "things that can't go on, won't go on" and we can't possibly pay the debt off.  Vin believes they will default on the dollar, declaring all the bonds worthless.  I tend to think they plan to inflate our way out of the debt.  I commented,

I don’t think they intend to pay off the debt in any real sense. Ben Bernanke once said, “people know that inflation erodes the real value of the government’s debt and, therefore, that it is in the interest of the government to create some inflation.”  I think they may intend a period of hyperinflation to devalue the currency.
Maybe this creates the atmosphere that enables a default, and maybe they just print the money owed to China/whomever on a roll of Charmin (same difference).
I came across a quote from Helicopter Ben the other day that reveals more insight into his “thought” processes. In 1999, he wrote: “A central bank can… extend loans to depositories, other financial intermediaries, or firms and households…. ” Households?? If the Fed directly depositing money into everyone’s accounts isn’t inflating and devaluing the currency, what is?
The guy has not had an original thought since his graduate school work on the depression, which means even more years since he had a correct original thought.

That first Bernanke quote is originally here and the second is here. In the article "50 Statistics About the US Economy That Are Almost Too Crazy To Believe", the authors say the US next year is going to issue almost as much debt as the rest of the world combined.  A couple of months ago, in one of this blog's very first posts, I commented about that, saying

First off, think of how much money that is. With a deficit of 1.4 trillion year to date (again, ATTOTW), we have to sell around 280 billion in bonds per month. Who has the money to soak up that much in bonds? According to the 2009 CIA World Factbook, that’s more than the annual GDP of economies smaller than the 32nd largest economy of the world (South Africa). See: this list on Wikipedia which is pretty much the only kind of facts I trust to the Wikipedia. So who can continue to buy up that kind of debt? Things that can’t go on, won’t go on.

In just the time since the end of February, when I wrote that, the projected deficit has increased to 1.6 Trillion.  If we have to issue more bonds than a country's entire GDP, we can't count on selling them many bonds.  It leaves us with the world's largest economies as our only realistic customers.   That's the EU, China, Japan, Canada, India and a few others.  In case you missed it, they all have plenty of problems of their own.  

Events may keep all those nice plans of mice and men from going forward, though.  The middle east appears to be lurching toward open warfare, possibly between Turkey, Iran and Israel.  Israel is frequently quoted as being a nuclear power, although I believe they have never confirmed that.  Wikipedia says the Turkish air force has 40 (presumably) US B61 nuclear bombs.  Iran, of course, has been working on attaining nuclear weapons for some time, and I suspect they may well have some number of them; either bought or made in country.  The world's first nuclear war?  If a country did not intend to use nuclear weapons, but had nukes used against them, would they then use their nuclear weapons?  What if their entire country was on the verge of destruction or their entire people on the verge of annihilation, would they use them then? 

Turkey has been moving away from US interests for some time - remember how in 2003 they refused to cooperate with the start of the Iraq war? - joining Iran should cause us to drop relations with them, and could conceivably cause the disintegration of NATO.  Not that burying NATO is necessarily a Bad Thing. 

According to this article in the Guardian, the next big attempt to run the blockade could be soon, but probably not later than September. 

Israel's no-compromise attitude to aid convoys could be tested again after two Lebanese organisations pledged to send boats to Gaza in the next few days. Reporters Without Borders is attempting to assemble 25 European activists and 50 journalists for a boat leaving Beirut. The Free Palestine Movement is planning a similar attempt.
George Galloway, the founder of Viva Palestina, announced in London that two simultaneous convoys "one by land via Egypt and the other by sea" would set out in September to break the Gaza blockade. The sea convoy of up to 60 ships will travel around the Mediterranean gathering ships, cargo and volunteers.

Israel is close enough to Turkey that it won't take long for things to happen once the ships are sailing.

The Strategy Page posts this article that offers other viewpoints that moderate the what I've quoted here.  Important points are that Turkey and Iran have never been allies historically, and are probably just joining together for bluster.

Turkey and Iran have offered to provide warships to escort another aid convoy for Gaza. This is pure posturing, as neither Turkey nor Iran could carry that out in the face of Israeli naval and air power. Moreover, the Turkish military is much more pro-Israel than the current Islamic government (which is using all this to divert attention from economic and corruption problems.)

...

Iran, which leads the effort to destroy Israel (and makes frequent public announcements to that fact) sees the May 30th incident off Gaza as an excellent diversion from efforts to move more missiles into Lebanon (for Hezbollah to use against Israel), and gather more European and Arab support to break the blockade of Gaza. Most Arab states fear Iran (historically, a real threat) more than Israel (mainly a threat to Arab pride). But pride and reality don't get along in this part of the world, and currently pride is winning. That will quickly change as Iran makes another move against an Arab state, something that is happening with increasing frequency these days.

...

Iran is also making nice with Turkey. This, historically, is an unnatural act. The Turks and Iranians have been arch-foes for over a thousand years. They have never made peace before, just ceasefires. The current phony peace ignores Iranian calls for Iran to replace Saudi Arabia as the guardian of Mecca and Medina, and for Iran to establish a new Caliphate (Turkey had held that largely empty title for centuries, but gave it up in 1924). The only thing the Turks and Iranians have in common is the rough way they treat their Kurdish minorities. Iran has a large (25 percent) Turkic minority, but these Azeris tend to be anti-Turkey and very Shia.

What's going to happen?  It's hard to say.  I think it comes down to the individuals in all of the command seats at the critical times, as it has so many times in the past. 

It is frequently said that the President of the United States is the leader of the free world.  Right now there is no leadership; there is no leader of the free world.  Indeed, the "free" world itself may be on the brink of vanishing.

Makes Me Want to Dance in the Streets

The Mighty Brady Bunch is almost bankrupt. (formally known as the Brady Campaign to Prevent Gun Violence, but known to many of us as the Brady Campaign to Eliminate Gun Ownership). 

The same group that raised 1.7 million dollars for the Bush v. Gore election has raised $2500 for the 2010 elections so far.  From one donor looking for tax deduction on 12/31/09.

Gosh, I needed some good news for a change.

Saying Goodbye

Today is different.  Today, I don't want to talk about the things this blog is supposed to be about.  This weekend I lost one of my closest friends.  Closer than that.  I had to put my cat to sleep. 

Pets are in a different world than any of our human interactions and we don't really have a good word for it.  I'm not talking about working dogs, or working animals, which don't share that sort of relationship with us.  I'm talking about house pets.  They're not kids, although many people refer to their dogs or cats as their kids.  They're not just friends, they are closer and more intimate in many ways than any friend.  They see us as we are all the time we're home.  We are completely ourselves with them - and they with us.  They love, or they don't, in a more pure way than many of us can.  Gun people seem to be a bit more dog people than cat people.  While I have nothing against dogs, I've always preferred cats around the house. 

Spot was a storm orphan who we adopted in April of '05.  Our last cats had died two years and one year before and it had taken us a while to get over the emotional rides of that time.  One had gone fairly quickly.  A gregarious, maybe even outrageous personality, Fourier was a chocolate point Siamese who could best be described as a living, breathing, exclamation point.  Everything he did, every emotion, every game - everything - was at full-tilt, all out level.  An exclamation point.  One Friday evening, he got up off the sofa to go into the kitchen and fell over, his legs not working.  It had never happened before, and I scooped him up to hold him.  He buried his face tight against me as if asking for my comforting.  In a few minutes, he got up and jumped down on his own, resumed his activities. Still, by the end of the weekend, he "just didn't seem right".  He was sleeping too much, not active, not moving around.  We took him to the vet on Monday morning and nothing appeared wrong (how do you tell your vet, "my cat sleeps too much?").  Tuesday, we made an appointment for a more complete workup.  The next morning, I woke to find he had died in his sleep.  He was 18 when he passed away. 

A more gentle soul, his "brother", adopted separately as a 3 year old, a few months before Fourier adopted at 8 weeks, Spook (a black mostly-Siamese) was a gentle, loving giant, probably 18 pounds at his peak weight, compared to 10 pounds for Fourier.  His last year was a slow descent into complete kidney failure.  The patient Mrs. Graybeard would give him liters of saline solution injected under the skin of his back and he would willingly live with that, just to sit on her lap and interact with her.  He lived with us a year that way.  We believe he was 20 or 21. 

When we decided to adopt another cat, we looked online for a local shelter that was "no kill".  We found an adorable Lynx Point Siamese girl whom they called Olivia, and who was said to be a storm orphan from a housing area destroyed in the '04 hurricanes.  We met her, decided she seemed nice, and took her home. 

It became evident immediately that she didn't know the name Olivia, so we decided to rename her.  After some searching, we noticed that on one finger of each hand and one toe of each foot, she had a black spot.  The idea of calling an obviously striped cat Spot stuck, and her name was given.  Plus, Commander Data's cat (on Star Trek: TNG) was named Spot, and was also a striped cat. 

Spot was the most remarkable cat I have known.  Amazingly intelligent, she learned words in one or two repetitions.  Have you ever drummed or scratched your fingers on the bottom of paper sack to play with a cat?  Every other cat I have ever known dives into the bag to see what's going on.  Spot looked into it, and walked around behind the bag to see what was making the sound.  I was stunned.  While this may seem to be stretching the bounds of anthropomorphism, she was demure, a girly-girl personality.  She would purse her lips and act shocked if we did something that she thought just wasn't proper.  Example: after about 6 months, Mrs. Graybeard asked me if I had ever seen Spot use the litter box.  I realized I hadn't.  She said that she hadn't either.  Spot would only use the litter box if no one was looking.  Likewise Spot would accompany her into the bathroom, but not me.  It just isn't done. 

Unlike other cats I've had, she would watch TV for long periods.  Her favorite show was a episode of Sunrise Earth from Discovery HD; Sunrise on Cape Cod.  We have it on DVR and would show it for her every now and then.  She would watch those birds as if they were in the house, with a longer attention span than many adults I know.  One night I left some science channel on when a show on Jupiter came on and left the room.  A half hour later I got up and saw her sitting up, leaning on one arm watching it intently.  This got me; I couldn't figure out why a cat would be watching a show about Jupiter, so I started watching her.  She turned to look at me and gave me the most perfect "What??" look I have ever seen from a cat.  She was not your everyday cat. 

In April of '09, the Mrs. took her in for her annual checkup.  The vet said, "I can't hear her heart".  Within an hour or so, she was at an animal internist for x-rays and ultra-sounds.  A biopsy was taken.  She was diagnosed with a thymoma, a tumor in the thymus gland.  The veterinary surgeon was optimistic that she could remove the tumor, but the risk was that these tumors can grow intimately around major blood vessels and the heart itself.  I asked her what the chance of surviving the surgery was and she told me 30%.

Now I'm a pretty rational guy; at the least, it's certainly easier to talk with me than a cat, but if you told me I had to have surgery and I had a 30% chance of surviving it, I'm not sure I'd sign up for that.  Add to that, her rib cage would be split completely open, and she would be hospitalized for at least a week.  Then there's the chance of infection.  We asked how long they thought she had, and they told us "weeks to a few months".  After a lot of prayerful reflection, we both decided to just try to keep her as comfortable as possible. 

Before that day and for a long time she never showed signs of being a sick cat.  This April, we took her in for another annual checkup.  This time, the vet noticed she was slightly yellow; jaundice.  We began treating for that, but the last two months has been a fairly rapid downhill.  Still the remarkable girl that she was, she started out hating the medication (someone insists on making antibiotics for cats in children's formulas, like bubblegum and other tastes they hate) but got to where we would say "Pill" and she would walk down to the bedroom where we would give her the medication and hop up on the bed. 

When they told us she had a thymoma that would eventually crowd out her lungs and heart, I expected that one day her breathing would start getting rapid and shallow.  I took to counting her respiration rate (I was an emergency room nurses' aide in another life). 

Saturday, I woke and she wasn't in the bedroom.  She had not come up to snuggle with me in the night.  I immediately thought something was wrong.  She was sitting still, breathing in shallow breaths.  No interest in eating - her appetite was great until then.  By early afternoon she was visibly gasping for breath. I realized she was within minutes of dying right then and brought her to the emergency room.  After some examination, and a talk of history, the vet said there was nothing we could do.  The only compassionate thing to do was to say goodbye. 

I'm not afraid to say I cried like a little girl.  And I continue to. 

Will You Recognize the World By the Fall of 2010?

What if a major war breaks out between Israel and the enemies swearing to destroy them? 

Read this post from Sense of Events.  This is an excellent explanation of the poor summer theater which is the "peace martyrdom flotilla" off Israel's coast last week. 

And don't miss this one (same place). 

I'm left with the sense that the chance of war is very high.  This will affect you and every aspect of you life. 

I have said before, Iran is not content with the destruction of Israel.  They mean to re-establish a Persian empire with total control over the Mideast.  Terrorists tied to Iran have tried to destroy the Saudi oil fields a few times before.  A massive attack from Iranian missiles, even if they are not nuclear warheads, could do it.   

Think oil at $500/barrel, with all Mideast sources offline. 

Because of that, the Saudis are as concerned about Iran as Israel is, and have agreed to allow Israel jets to overfly the Kingdom in conflict with Iran.  The Saudis agreeing with Israel?  

If Tehran really had their dream, the US and Israel would both have smoking holes where major cities used to be, and the major difference would be that not every soul in the US has been killed.  The question really is how much of their dream does Tehran get?

Quite A Recovery, Idnit?

The jobs numbers came out today.  You probably heard that 431,000 jobs were added, but at least 411,000 of them were temporary census jobs.  And since there are many reports of census job numbers being faked (people being hired, let go and hired again, to count more), it's possible that's not true either.  


So there's a possibility that the real economy generated 20,000 jobs last month.  The fine folks at CalculatedRiskBlog give this analysis. 

The dotted line removes the temporary jobs.  


Have we turned the corner, yet?  What about the W shaped recovery people were talking about?  It seems we can say we've hit the bottom.  After that, it should go up.  I don't know how to predict the rate. 

That Pesky "Free Speech" Thing

In my previous post, I said that I thought McCain Feingold was unconstitutional.  Among other things, it restricted ads in the 60 days prior to the general election so that they could only be funded by a few types of groups.  In doing so, it limited the right of people to speak their mind and political speech is the most protected type of speech there is.  You can't just tell people or groups who could afford to buy a campaign ad that their opinions are not allowed in the public sphere.

Again, "unconstitutional" is what I say (and it's a pretty commonly held opinion among conservatives and libertarians).  The Supremes narrowly ruled that a small part of the law was invalid, in the Citizen's United vs. the FEC case last fall.  To the socialist left, allowing people wealthy enough to buy national air time to speak is terrifying, and they want to overturn the Supreme's decision.  Enter the DISCLOSE act.  Readers of Rawles Survivalblog  will recognize when I say it was sponsored by "He who hits the fan". 

There are always unintended consequences from new laws.  This one might be an easy to use database so that when you interview for a job they can make sure you don't contribute to any organizations they don't approve of.  Such as the NRA, - thanks to Snowflakes in Hell, a Pennsylvania Firearms blog.  Naturally, unions such as SEIU are exempt.

Reason Magazine's Jacob Sullum does a great fisking of the DISCLOSE act:

The "stand by your ad" statements required by the DISCLOSE Act also impose a substantial burden on the exercise of First Amendment rights. Under current law, a political ad has to include a statement indicating the sponsoring organization—say, the U.S. Chamber of Commerce or the American Civil Liberties Union. Under the DISCLOSE Act, both the organization's head and its "significant funder" would have to appear in the ad and take responsibility for it. According to the Center for Competitive Politics, these statements would consume one-third to one-half of the time in a 30-second TV spot.

...

The anxiety and uncertainty created by the new rules would be compounded by the fact that they would take effect 30 days after the law is enacted, before the FEC would have time to issue regulations clarifying them. Opposing an amendment that would have postponed the effective date until January 1, Rep. Michael Capuano (D-Mass.) said he wants people to worry about a fine or prison sentence when they dare to speak ill of him.
"I hope it chills out all—not one side, all sides!" said Capuano. "I have no problem whatsoever keeping everybody out. If I could keep all outside entities out, I would."
Similarly, Sen. Charles Schumer (D-N.Y.), upon unveiling the bill, said "the deterrent effect should not be underestimated." For those who view nonpoliticians as meddlesome "outside entities" and criticism of incumbents as a crime to be deterred, the chilling effect of campaign finance laws is a feature, not a bug.

Those people outside the beltway are just so out of touch....

The Fight for Freedom Becomes An Every Day Job - Part 2

The Obama administration, under the auspices of the Federal Trade Commission has announced how it intends to "reinvent journalism".  Which is to turn it from a system with marginal use for facts into a government run media with absolutely zero use for facts.  Washington Examiner Mark Tapscott covers it in good detail.

My first thought is "what does the FTC have to do with journalism?", but more to the point, this thing is unconstitutional on its face.  What can any part of the Fed.gov have to do with journalism?  "Congress shall make no law ... abridging the freedom of speech, or of the press..."  It's one of a few things the Bill of Rights says they can't mess with, so how can it possibly be constitutional?  Well, that's what I think, but I thought McCain-Feingold was unconstitutional too.  Still don't see how the Supremes could say it's not. 

There's a story that the old USSR had two official news sources, Pravda (truth) and Izvestia (News).  The running joke was that "In Izvestia there is no Pravda.  In Pravda there is no Izvestia".  Think it will be any different when any administration owns the news media here?

Add this to their efforts to regulate/take over the internet through Net Neutrality laws that will destroy the private sector's ability to build-in infrastructure, and you have thorough controls over everything you read or see.  Let's see, if that financial bill is passed, it's total visibility over your financial actions.  Got health care, which can regulate every aspect of your life.  Smart grid to make sure you don't run too much electricity; can't run the heater over 62 this winter; so we can reduce our carbon footprint. 

Everything adds up to a totalitarian state that makes 1984 look like a picnic. 

About That Whole Global Economic Collapse Thingy

May be sooner rather than later.   

First, Clive Maund does some pants-wetting technical analysis showing the big picture trends in several things: the S&P 500, copper, light sweet crude (oil), Shanghai, gold, silver, and more.  Can't say I've seen this much in one place. 

In my post on gold and inflation, I forgot to note that technical analysis is one of the things I decided to study in the period when I was trying to make more sense of things and get better performance out of my retirement savings (roughly 2000-2004).  I define TA as drawing lines and curves on charts of financial performance and then assuming those lines and curves mean something. 

Then Mish over at "Mish's Global Trend Analysis" does an overview piece of just a few more contributors to the mess.  Oh, just little things like the Euro collapsing.  Nothing to see here.  Move along. 

OK, so maybe global collapse and financial Armageddon is a bit much.  I just don't think I'd go long on any markets right about now. 

In the famous words of Kevin Bacon in Animal House

(note in some weird way, the blog will now become part of the "six degrees of separation from Kevin Bacon" and show up in some 23rd century anthropologist's paper about the great collapse of the early 21st century)

The Fight for Freedom Becomes An Every Day Job

I guess I just never expected we would have to battle our government every day of our lives. 

How about how the ATF suddenly, by stroke of the acting director's pen, changed 40 years of law to make it a Transfer to move a gun around a store.  Really?  Why?  Why now?  To quote Codrea's excellent piece:

I know the perceived intent here involves shipping guns to contractors, evaluators and the like, but if I just read these words on their own as written, I can see it being interpreted that such transfers could even include renting guns at shooting ranges.  I find the timing curious, because the antis have recently begun referring to this as a "federal loophole" and using anecdotes to stir up the hysteria to close it.

It's a "federal loophole" for a gun maker to send a copy to a laboratory to measure its performance?  Really?  Even if the ruling was to make it harder for the gun companies to send an evaluation sample to a magazine or TV show for review, why?  There are no records of any crime being caused this way.  Note that this is a regulatory nudge, Cass Sunstein's favorite term, that never went in front of Congress.  No way to write your representative or senator to try and head it off. (Hat Tip to Dave Codrea)

How did Clinton aide Paul Begala put it?  "Stroke of the pen, law of the land. Kinda cool!"

If you're not a "gun person" you may not know there is no such thing as "gun show loophole".  The same laws exist for sales at a gun show as anywhere else.  In fact, they can be more restrictive.  Mrs. Graybeard and I spent the afternoon at a gun show in West Palm Beach yesterday, and while I can buy any gun from anyone in my home county in a private sale by just plunking down an agreed upon price, at yesterday's gun show attendees needed to find an FFL, do a full transfer and wait 5 days.  There is an exception for state concealed carry licensees, as there should be, but they've made it harder to buy a gun at a show than when there isn't a show.  Stupid.  Criminals get guns by stealing them, not from gun shows.  How would they like a 5 day cooling off period and a Federal licensee to siphon $50 off every political contribution? 

How about a takeover of the financial industry?  Put together with health care, the big 3 automakers, and all the rest, I've heard from various sources that we're looking at 60% of the economy being in the government's control.  All your financial data are belong to us.  There will no longer such a thing as a private life.  May I add that every market follower I can find who has read the law says it will have no effect on the piracy that caused our financial mess, and will probably help the bad guys?  You knew that already? 

How about our abandonment of the fight against Islamofascism?  Deputy National Security Adviser John Brennan is a man who refers to Jerusalem by its Arabic name, Al-Quds, and who peppered a speech recently with a minute of Arabic. I don't have a problem with him speaking Arabic, I have a problem with how he runs his office.  With three attacks in a few months, we appear to be dropping the ball.

We've seen the enemy and it's not just the jihadists. It's also our own government, which refuses to see this very real enemy. How can we fight and defeat what we refuse to see?

Allowing the construction and dedication of an in-your-face mosque at ground zero on September 11?   As Gates of Vienna puts it, this is a new battle in a very old war.

We have essentially pre-surrendered in Afghanistan, by giving an "out-by" date.  If the enemy had any sense, they would lay low, and the peace would encourage us to leave earlier.  Once we're gone, it would take a completely different America to go back.  The way I see it, our current administration wouldn't go back into Afghanistan if a 9/11 level attack happened again, and it could be proven it came from there. 

How about securing the border?  Citizens shut down the capitol phone system a couple of years ago under GW Bush, when a repugnant amnesty bill almost floated.  Looking at the status of the southern border, it's hard not to conclude the Fed.gov has given up on enforcement.  The people, on the other hand, support stricter immigration controls by large measures.  The support in Arizona is so strong, it's hard to imagine a scenario that backs the "racism" card.

Need I go on?

The administration is attacking the people on every front.  It is requiring not just resistance, contacting our representatives and all of the usual things, it's getting to where citizens are going to need to split up the work: "I'll go fight my representative about gun things if you fight the financial takeovers".  The problem is that there are no lobbyists for us. 

Wasn't this supposed to be a government "of the people, by the people and for the people"? 

A Day of Thanks and Remembering

On this day of remembrance, my thanks to the families of the fallen, of all generations. 

My father served in the Army during WWII, part of what we now call "The Greatest Generation".  All I really know are stories I heard as a kid, so these may be real facts, or they may be bad memories.  I was told he served as a tank driver in the 1st Army, "The Big Red 1", and I was told he was or would have been under George S. Patton's command.  I'm not sure those are compatible facts.  Dad was seriously injured in a stateside training accident and never deployed to the European theater.  Dad was in a lead or observer's tank, one with an open area where the turret goes in regular tanks.  The tank rolled, Dad was thrown out and broke several vertebrae in his lumbar spine.  He spent many months in a body cast in bed, and never returned to active duty.  I'm unsure of many of the details of this, as he rarely ever talked about it.   

Dad passed away of cancer almost 30 years ago.  

When I read the true stories of the acts of the people of that era - not just the fighters but also the families and the ways the country changed to pull off the amazing things we did - I am simply amazed and awed.  It was a time when ordinary people did extraordinary things.  For us.  For the world of today to even exist.  In so many ways it seems the modern US has let them down. 

I never served in the military, and while I never would have guessed these words would ever leave my lips (well, fingers) at the time, I really should have.  I think some of the training would be of use in the coming days.  I came of draft age during the Vietnam war, and due to the timing of events in the war and my age, the war was winding down.  I recall registering for the draft lottery and getting a high enough number that I thought I would never be called (and that was the case).  At that time, enlisting as a volunteer was not something people I knew talked about, and I never thought of it. During my senior year of high school, I recall taking some of those standardized tests, besides the SAT, and getting a pretty good score on one of them (NMSQT?).  As a result, I got a ton of letters from colleges asking me to consider coming to their schools.  Among those letters was one from West Point.  They, of course, could not guarantee admission (the process required being nominated by your congress critter or senator) but would "look favorably" upon an application.  It is rare in our lives for opportunity to knock quite so loudly.  And a shame for us to ignore the door.

Drill, Baby, Drill

Yeah, that's what I said.  Keep drilling. I point out in my profile that I live in Florida, and my own favorite fishing spots, beaches and all are threatened by this disaster.  I still say "drill, baby, drill". 

This week, the Prez declared a moratorium on drilling new wells and a moratorium on simply exploring for new oil offshore.

This is like saying "I got food poisoning, so I'm never going to eat again".  I understand the sentiment, but it's stupid and ultimately suicidal.

Simple truth.  Like it our not, our world runs on oil.  Another simple truth: energy use is directly proportional to affluence.  The news meme that drives me crazy the most is probably the one that goes "the US is 5% of the world's population but uses 25% of the world's energy".  You don't need a Ph.D. in library science, or anything else for that matter, to use Google or Bing or your favorite search engine to see that it's because we produce about that percentage of the world's GDP.  What that meme really means is we have a tiny population for the massive amounts of wealth we produce.  It should be something to celebrate, something to shout from the mountaintops.  Instead, they've made it something to be embarrassed about. Even otherwise brilliant engineers I know have not seen this until I pointed it out.

Do I like oil spills?  Hell, no.  Seems weird to even have to say that.  Do I want to see any wildlife hurt, or lose my favorite surf fishing spot?  Double hell no.  I feel terribly sorry for the families of the 11 who died on the rig, and the people whose lives will be disrupted by having their jobs destroyed; fisherman, guides and so on.  You just can not remove all risk from life.  Obvious science: any energy source has more energy than its surroundings or it wouldn't be much of an energy source.  That means getting it and using it is going to risky.  That means if the greens ever discover the magical unicorn farts they're searching for to replace oil and power everything, unicorn farts will be risky, too. 

Personally, I would rather see us using much more nuclear power.  I know they must exist, but I have personally never met an engineer who didn't want more nuclear power.  The technologies to build reactors that won't  melt down has been around for about a quarter century, now, so that whole "China Syndrome" argument is out the window.  The technologies to safely handle nuclear waste have been around even longer, over half a century.  The only arguments against it are political and NIMBY.  Nuclear is great for infrastructure and electricity, but for portable sources (cars, buses, other personal transport), some sort of fuel like gasoline, natural gas, or possibly hydrogen looks to be needed for a while, yet. 

Since the greenies have almost completely shut down nuclear energy in this country, and have relegated us to the most inefficient and expensive alternative energy sources (wind, corn ethanol) we are stuck with oil. 

Another energy source with great potential would be to produce giant arrays of solar cells in earth orbit and beam the energy down as microwave power.  The energy density can be reduced in the beam to allow birds and aircraft to go through the beam safely, but would require many acres on the ground to collect the energy and large battery banks for storage.  Neither acre-sized solar collectors or large amounts of storage batteries seems to be acceptable to the greenies. 

If we could get rid of the stupid regulations, we could have a cafeteria selection of energy sources choosing the most cost effective answer to the problem we need to solve.

For now, the environmentalists have painted us into a corner.  We either keep drilling or slowly die.  I say, "drill, baby, drill".

I Love the Hurricane Season Forecasts

NOAA came out today with our hurricane season forecast:  NOAA Expects Busy Atlantic Hurricane Season.

They have a few standard forecasts.  "More active than normal", "Extremely active", and "OMG!! Head for Atlanta!!"

Seriously, as one of the young engineers I mentor says, "This is the best job in the world.  You come out once a year and say how bad it's going to be and there are never any consequences!  No one ever gets fired for being wrong, no one ever gets ridiculed in the press.  It's the ideal job." 

Put on your big boy pants, I have some truth for you.  Forget what the Global Warming Believers say about these storms; there is no evidence of link between warmer temperatures and storm number or intensity, hurricane energy is actually declining over the last half century .  Hurricane activity goes in cycles, roughly 40 years long.  We are in the high activity side for the North Atlantic.  I think we went into it during the mid to late 90s.  By rough estimate, we'll have higher than normal numbers of storms for as much as another 10 years, all other things being equal.  And all other things are never equal.  2004 was the 6 sigma season here, we had direct hits from two cat 3 hurricanes in the same month, plus a few that passed close enough to give us tropical storm winds.  It has never happened in history and will probably never happen again.  We have not had a direct hit from a hurricane since then.  Last year we had a very strong el Nino start up, which tends to shear the tops off storms and keep them away from us.  That seems to be ending, so if I was them, I'd be forecasting a busier year than last year, too.  

To paraphrase Tam from a few weeks ago, "if you're prepared for the zombie apocalypse, a little thing like a few days of rain and no power doesn't mean much".

Words I Never Thought I'd Say

The Dalai Lama is an asshole.

Look - the guy is from Tibet. He has personally seen the Chicoms killing Tibetans.  He has seen it up close.  How can he possibly say "(Marxism has) moral ethics, whereas capitalism is only how to make profits,"??  Are the 70+ million that Mao executed somehow better off because they were killed by Marxists? 

Communism has killed more people than any form of government in history.  Compared to Mao, Hitler was an incompetent poseur.  

Big governments are always the problem, because no organization can kill in the kinds of numbers governments can.  Of the government killing over the course of history, communism is the champion mass murderer.  Small minded people object to "the rich" or cry about the "maldistribution of wealth", but the pettiest local government official has more impact on the quality of your life than the richest men in the world. 

What Do You Do When It Goes Over The Line??

Many people have written about the organized thuggery carried out by SEIU goons last week, when they bussed in protesters to a banker's house.  There are reports that the thugs were escorted by police, or at a minimum, the police were not willing to do anything. 

Nina Easton's article on CNN's website has a lot of the relevant facts.  The banker whose home was attacked had been at his child's baseball game.  Another, older, child was at home terrified and had locked himself in the bathroom.  Picture yourself in this situation; your child is home afraid and needs to be protected.  You're with a child that you just can't leave to fend for himself either, what do you do?  You don't have backup.  You aren't  a professional security guy or special forces operator.  You're a dad with two scared kids, and you're probably pretty scared yourself. 

Dad parked some distance away, left the younger kid in the car and managed to force his way into the house.  Got older kid and escaped.  All was well.  Being rent-a-mob union protesters, they're probably just "paid by the hour" and just going through the motions anyway.  Too lazy to get a real job. All's swell that ends swell. 

But what if?  What if it wasn't just rent-a-mob protesters?  After all, these are the same sorts of people who have blown up buildings, blown up radio towers, car dealers, and done real violence.  

I would have been uncomfortable leaving the little kid alone.  First off, I don't know that a thug won't attack him.  After all, they bit the finger tip off a guy at a town hall, hospitalized Ken Gladney, heck - they even intimidate other union groups and socialists - why should I assume they won't hurt my kid?  On a darker note, how do I know I'm going to survive to get back to the kid and get out of Dodge? 

I would probably take the young son with me, and do my best to sneak into my house from another side.  Back door?  Without knowing the layout of the property it's hard to say, but this guy went in through the front door.  Then I would make sure the kids were safe and prepare to repel invaders.  If no one breaks in a door or window, fine.  If they do, "the shotgun sings the song", as Pete Townsend wrote in "Won't Get Fooled Again". 

Look this is way over the line.  The fact that SEIU thinks this is just a dandy way to do business shows you what scumbag thugs they are.  If these keeps up, someone is going to get a load of 00 buckshot in the face.  Take my word: that will completely ruin their day.  As a people, we need to make it clear this is not an acceptable way to protest. Families are off limits.  No exceptions. 

Maybe the reason they do this in Maryland is that they're less likely to come across someone with self-defense capability.

Perhaps more interesting than why they do it in Maryland is why they protest the Bank of America at all?  Could it be they are deeply in debt to the bank, to the tune of over $156 Million at last report.  As Ms. Easton says,

A lifelong Democrat, Baer worked for the Clinton Treasury Department, and his wife, Shirley Sagawa, author of the book The American Way to Change and a former adviser to Hillary Clinton, is a prominent national service advocate.
In the 1990s, the Baers' former bosses, Bill and Hillary Clinton, denounced the "politics of personal destruction." Today politicians and their voters of all stripes grieve the ugly bitterness that permeates our policy debates. Now, with populist rage providing a useful cover, it appears we've crossed into a new era: The politics of personal intimidation. 

America's Cultural War

I worked with a guy several years ago who said, "America's next civil war will be between the 'haves' and the 'have nots', when they are led to believe they have a right to everything the 'haves' worked all their lives for".  Hadn't thought of it until a month or so ago, but I think he was on to something.

"This is not the culture war of the 1990s. It is not a fight over guns, gays or abortion. Those old battles have been eclipsed by a new struggle between two competing visions of the country's future. In one, America will continue to be an exceptional nation organized around the principles of free enterprise -- limited government, a reliance on entrepreneurship and rewards determined by market forces. In the other, America will move toward European-style statism grounded in expanding bureaucracies, a managed economy and large-scale income redistribution. These visions are not reconcilable. We must choose."  (emphasis added)

An excellent piece by Arthur Brooks of the American Enterprise Institute.  Four pages but worth reading.

Put that quote together with this one from Western Rifle Shooters Association,

Do you understand that scores of millions of your fellow Americans ("Americans" at least by nation of residence, if not by individualist ethics) would tear you and yours into bloody chunks were you ever to attempt to reduce their "benefits"?

A few weeks ago, just before the April 19th Second Amendment March, when there was all sorts of media frenzy over tea parties, no less than Bill Clinton quoted Billy Beck's line, "All politics in this country now is just dress rehearsal for civil war."  I believe this is what he's referring to.

The Texas School Book Selection

Earlier this week, I heard the Texas State Board of Education was choosing new textbooks.  One of the items the social studies people wanted to talk about was the role of hip hop in American culture.

I can answer that.  It's a fad.  Hip Hop in 20 years will be like that lower back tattoo your young girl got on on a trip to Capo San Lucas.  Hip Hop will be like a meaningless tattoo that sags as you get older. 

So the answer isn't quite "no role" in American Culture.  It will worse than no role, it will be more like that tramp stamp you regret. 

What’s All This Gold and Weiner Stuff, Anyway?

This past week, Congressman Anthony Weiner (D – Wolf 359) started a campaign against Glenn Beck and Goldline, a company that sells gold coins and bullion. Beck has responded by (1) making fun of his name and (2) posting real facts from good sources that contradict Weiner. Perhaps the most stupid argument was that you shouldn’t buy from Goldline, just buy the gold ETF, ticker symbol GLD. I subscribe to Beck’s website, originally because I found him funny, but really have no dog in this fight. I am not a customer of Goldline, and I fund this blog entirely anyway (notice there are no ads?) as long as my day job holds. The arguments against Goldline are easy to refute and irrelevant, largely just a harassment tactic (get your “enemy” off message, off balance and out of their comfort zone). What I want to talk about is gold, economics and investing.

As mature adults, we are beyond making fun of the name “weiner”.Heh heh, heh heh. He said "weiner".

In the summer of 2000, Mrs. Graybeard and I took a course in lost wax casting - the process by which most jewelry and many small, fine-detailed mechanical parts, are made. We cast several pieces in silver and for my final project, I wanted to work in gold. I noticed gold was around $250/oz., and that seemed cheap. I didn't follow the price of gold, but remembered prices in the $700 - $800 range in the early '80s. As it turns out, that $250/oz was just about the dead bottom of a multi-year bear market in gold.

Why is gold around $1200/oz now when it was $250/oz in the summer of Y2K? Why is oil high when demand is low from the big consumers? Is it those "ebil, debil speculators?" From watching the cable TV channels talk about stocks and other investment vehicles, and from other observations, I'm convinced most people - even people who advise on stock and other financial instruments - don't understand inflation.Most people don't even really understand our financial system.

Around that time in Y2K, it was occurring to me that my 401k had not grown as fast as I'd like and maybe I should do more than just follow the standard recommendations. So I started reading about gold along with other investment opportunities. Remember, this is late 2000; the tech bubble had just burst. I lost money in that like everyone. The real estate bubble had not started. I found that in the '70s it was standard advice to have about 20 to 30% of your IRA in gold as a safe haven, "just in case". As my research moved on, I started to read the commentators on Kitco.com.

 I quickly encountered a group of people called "gold bugs" who seemed like a lunatic fringe.  They vocally say "gold is money" and "all fiat currencies (like the dollar) eventually collapse", "inflation is going to get worse" and so on.  I thought they were lunatics.  I was more interested in the technical analysts who pointed out demand was getting ahead of supply for gold and the time needed to get a mine deposit found, developed, and producing gold (about 10 years) means that the demand will exceed supply for a long time.  Can you say increasing prices?  So I found some ways to include gold in my retirement plans, and have happily watched it do well as everything else is having troubles.

Then a funny thing happened.  Some of the "lunatic" gold bugs' predictions started coming true.  About 2005 (I think), I started reading predictions of problems related to something called "sub-prime mortgages" that I had never heard of, and they warned that it had the potential to take down the entire world's economy.

For you people who still think this just isn't mainstream enough for you, would you listen to Robert Kiyosaki, whose "Rich Dad/Poor Dad" series has become a wealth building franchise and a staple of fund-raising events on Public Television?  One of his guys has a book called, "Guide to Investing in Gold and Silver".


If that's too staid, the "Angriest Guy in Economics", the Mogambo Guru, might be more your speed.  A little tough to "get" the first time I read him, I eventually thought if you took a classic Robin Williams full-tilt-bozo comedy bit from the late 70s and made it about economics, it might sound like the Mogambo.

In the 70's, a guy named Howard Ruff wrote a book on how to survive the inflation  of that decade.  He's still around, and following one little piece of advice from his book has made me thousands.

Inflation is always a result of monetary policy.  Always.  How does inflation occur?

Imagine you had a printer that could make perfect copies of any dollar denomination you wanted.  Because it's technically, you know, highly illegal to do this, you want to be disciplined about how you use it and reserve it for emergencies.  You need to buy a car and get into a bidding war at an auction.  You win because you can always pay a higher bid, just by printing a little more money, and you always get away with it.  Can you imagine that after a while, you would use this power more often?  Now imagine everyone had such a printer.  Can you imagine that the prices of everything would be bid up by the larger supply of dollars?  This is the essence of price inflation: an increase in the number of dollars available to bid pushes up price. 

And that's what the Federal Reserve is doing.  By flooding the markets with "liquidity", they really mean currency.  They used to release data on the size of the money supply, but stopped some years ago.  I assume it was because they thought it was too scary for us hicks to look at.  Too much negative feedback from economics writers.  Ben Bernanke, who was just a member of the Federal Reserve board at the time, famously said (in response to questions about deflation, in 2002), "The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost,"  What would you think if you had a big pile of dollars, like OPEC or China or the various countries that we buy from?  You would think, "If there's much more of them, mine will be worth much less; I'd better store my wealth in something else".  Exactly that happened, and the price of gold spiked immediately after his statement.  The image of the Federal Reserve dumping baskets of currency out of a helicopter was coined by economist Milton Friedman.  Bernanke's remark about the printing press earned him the nickname "Helicopter Ben" (don't remember where I stole this picture - if it's yours and you don't want me to use it, just comment).

Bernanke also said, "people know that inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation."   Maybe, but it's not in the population's interest.  The problem is that if you're a saver, your money is going to be devalued by that inflation.  If you are living on a retirement pension, social security or some other similar benefit, you are screwed.  The government horribly understates the cost of living because they don't include food or energy costs.  Your social security cost of living adjustment will never keep up with the real cost of living.   

And that's largely why oil is expensive today, despite low demand.  Oil costs more dollars because each dollar is worth less.  Thinking oil seems very expensive is like everyone on the Titanic thinking the water seems awfully high, not that they're sinking.  Think the stock market is doing well - or was?  Have you seen the DJIA or S&P 500 corrected for inflation?  Corrected for inflation, you are loaning companies money for about 1.6% per year return.  Some periods are less, others are more.  The $1200/oz price of gold includes inflation and increased demand due to the widespread concern that the worldwide currency system is failing.

We call our dollar a fiat currency because it's worth is declared by fiat.  It's worth exactly what someone is willing to give you in exchange for one.  We do not promise any amount of gold, silver, wheat, rice, pebbles or manure in exchange for one.  Inherently, it's only worth the paper and ink used to make it. 

Money is different from currency: currency is the paper and base metal coins you have in your pockets while money is something that has value and is used as a medium of exchange.  For much of history, money was gold or silver.  People on Yap Island used large stone rings.  Paper money was invented as a way around carrying large amounts of coins.  I've heard it argued that there is nothing special about gold or silver and that's true.  They are simply something that has a universal history as valuable.  People want them.  You could theoretically have a fiat dollar like we do and have it be stable.  It requires politicians, bankers and everyone involved to be honest, and responsible.  It requires politicians not create vast amounts of currency so they can deficit spend, go to war, hand out food, healthcare or any of the other things governments do with this made-up money.  In other words, fiat currency will never work in the long term. 

The basis of money only has to be agreed upon, relatively portable, and dividable (diamonds are out: you can't cut one to give change).  Gold and silver fit the bill.  If the fiat currency system collapses, they will be accepted.  There will be barter and other primitive ways of dealing with each other.  Realize that if there is widespread collapse, your gold ETF will be an abstract, almost worthless thing.  If there is enough gold to fill all their orders, you will still need a functioning world to get it out.  If you buy coins or bullion, you don't have that concern. 

The world currency system collapsing?  There are writers who think we are seeing the death throes of fiat currency.  Historical writers are fond of pointing out that fiat currencies always collapse because politicians and bankers just can't resist screwing with them.  It might also be the death throes of Keynesian economics that essentially asserts governments should spend more when they're out of money (in a depression, tax revenues are down just when Keynes says we should spend more).  While that will be painful, it might be like getting an antibiotic shot for a bad infection: pain now for complete cure in the long run.

Which One is Right?

Here we have two very different points of view on Greece, the Euro, the Dollar and everything.

On the positive side a commentator I know nothing about and have no sense of track record with, Ken Gerbino.

On the negative side, the tremendously gifted writer, Mark Steyn.

Which one is right?  One of my favorite quotes is from physicist Nils Bohr, who said, "Prediction is very difficult, especially about the future".

And where is the US stock market going?  Excellent market Technical Analysis from John Galt at Shenandoah. 

Part 1.    Part 2.  

More on economics 101, inflation, gold and all that later.

The 401k Takeover Lawmaking Proceeds

I have written about this a before, here and need to talk about it some more.

The point in my prior article is that "what can't go on won't go on" and "things that have to happen will happen".  Nothing has changed.  We still need to sell absurd amounts of bonds and can't go on the way we are.  Our customers are less interested in our bonds.  Although almost never reported on in the US, China's Shanghai stock market is in deep correction, almost a bubble burst.  Higher interest rates might get bond buyers back, but will be a death blow to our economy.  The alternative to monetizing our debt is to selling them to someone, but whom?  Enter the 401k. 

Shanghai composite index.  Technical analysis by http://www.stocktiming.com/index.htm

The latest information is that the rule-making process is proceeding normally.  Reports on the total amount of money in 401k accounts vary, but it's in the vicinity of 5 trillion dollars.  My bet is that is an absolutely irresistible pile of money to the current administration.  In this article, one of my first, I wrote:

The stock market crash of ’08, with the concomitant collapse of many 401k plans, has given the .gov an excuse. There is talk of nationalizing our 401k plans – in not so few words – so that we can replace those “risky” plans with a gubmint guaranteed (but teeny tiny) yield. See, for example, this piece on Market Ticker There's a good reason to think this is coming; our unsustainable debt has to be financed by selling bonds. Now that the sales of bonds are failing internationally, the .gov can sell them by forcing them into our 401k accounts!

I am not emptying my 401k .... yet.  I am watching the process as best as I can. 

You should, too. 

Who I Am - What I Believe

A lot of bloggers have posted a kind of position paper: who they are and what they believe in.  I haven't and it's time to do it.  It's hard to figure out a good order for list like this, so I'm just going to dive in but try to keep it organized.  I'm going to start with one that you might not think intuitive, if you've read much here. 

I don't think I'm too much of a pessimist or too much of an optimist.  I prefer to be a realist and see things as they are.  I think that being an engineer tends to make you a realist, and "well-grounded".   It is our job to put reality to our service, to herd electrons in the desired direction and get them to work for us.  That circuit I'm working on doesn't care whether I'm optimistic about it or not, it doesn't care whether I like it or not, and it doesn't care if my computer model is elegant and pretty.   It's going to obey the laws of physics and do what they demand it does.  The world political system, most certainly, doesn't care what I think.  I simply try to see the paths things are following and extrapolate off the end of the trajectory. 

I believe in science.  I believe that science, as an organized, self-correcting set of investigations into how the world works is among the most important things humanity has accomplished.  I believe that as long as that self-correcting process is not hindered (the cardinal sin in those CRU emails), it will right itself.  I believe the Voyager satellite program might well be the crowning achievement of mankind.

I believe in Christ.  I used to be a deist, believing that God wrote the laws of physics, started the grand machine of the universe in motion, and then took off to watch from a distance.  If your science is good, you don't need a God involved in everyday things, but there are places science has incomplete/incorrect knowledge - a concept that I think is known as "God of the gaps".  The Greeks, for example, needed Apollo to drive his chariot containing the Sun across the sky every day.  We simply need to understand the sun is a long distance from us, and our motion causes the things we see - we don't need a god involved at every sunrise.  But if you read the Bible in any of the modern translations, the argument for a personal, involved God is overwhelming.  Are there contradictions in my thought processes?  Is it an artifact of our translations?  Quite possibly.  Doesn't bother me a bit.  When I'm done on this side and I get to learn the real answers, I'll understand better.

My first iteration of college was in biology and chemistry, so I am therefore a "classically trained evolutionist".  I don't accept Darwinism as an explanation for the origin of life anymore; there are simply too many things I can't reconcile.  The complexity of the systems around us doesn't appear to allow for the slow, gradual evolution of Darwinism - too many enzyme pathways would be fatal in some intermediate stage so these complex pathways had to spring up complete.  There are countless examples being discussed.  To say Darwinism has been falsified is not to immediately say special creation has been confirmed, and it does not eliminate a role for Darwinism in natural selection and development of species.  But I think creation must be considered, even if evolutionists are uncomfortable with it. 

I believe the old saying, "the biggest reason people choose to become Christian is that they know a Christian: the biggest reason people don't choose to become Christian is that they know a Christian".  I strive to be the right man in that comparison. 

I believe in personal freedom, liberty and responsibility.  This is the core Christian biblical value; you are responsible for yourself.  I accept the challenge of being responsible for myself and my family, providing for us, defending us, taking care of us as best I can, with the help of God.  Because I believe in personal freedom, I believe that welfare and other government handout programs hurt people more than they help.  As a short term help in an emergency, sure.  I am a dedicated giver to many, many charities.  But making people dependent on the state saps their humanity - presumably to buy their votes. 

Since there is no greater destroyer of liberty than a large intrusive government, I am adamantly opposed to state-ism of any kind: communism, socialism, fascism, environmentalism, you-name-it-ism.  In today's lexicon, I am a small government conservative/libertarian.  I find Republicans share my values most often so I tend to back them, but I am not reflexively Republican.  I'm just as adamantly anti-Republican if they are big government fans (Charlie Crist here in Florida, Lindsey Graham, Arlen Specter - to name a few).  I don't know that any small government Democrats exist any more.  

I am not advocating anarchy.  I believe in a minimal government, much closer to our constitutional founding than the leviathan that now chokes off the private sector.  I do not believe government, like man, is "perfectable", so it must be minimized.  As Washington so eloquently said, "Government is not reason, it is not eloquence, it is force; like fire, a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible action." I believe we could throw out the vast majority of the Code of Federal Regulations - perhaps 90% - and improve the lives of American's tremendously.

"If you put the federal government in charge of the Sahara Desert, in five years there'd be a shortage of sand." - Milton Friedman 

"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries." - Winston Churchill.   

I believe that free market capitalism and its reliance on the enlightened self-interest of individuals is the most potent force for the advancement of humanity ever developed.  More people have been lifted out of crushing poverty in the last couple of decades, by the adoption of market principles in China and India, than have lived so far in history.  I can not imagine how an educated person can embrace socialism or communism or any variant.  Further, I believe the market is so powerful that it continued to advance the US, despite the fact that we haven't had a free market in nearly a hundred years.

I believe the "war on poverty" is motivated by the search for a statistical distribution that doesn't have a bottom 20%.  There is only one way possible: where everyone has exactly the same portion: nothing.  The same motivation insists on giving every kid a trophy.  It's great to do your best; it's better to win, and there's usually only one winner.  Get used to not winning.  Happens to everyone, even the very best.  We are not guaranteed the results of life, liberty and happiness; we are guaranteed the right to pursue them equally. 

I believe Thomas Jefferson was right when he said "If Americans ever allow banks to control the issue of their currency, first by inflation and then by deflation, the banks will deprive the people of all property until their children will wake up homeless".   I believe that almost all of the economic disruptions in the last 100 years, including the current mess, were caused by the central banks charged with preventing such disruptions. 

I believe the anti-gun groups like the Brady Bunch and Mayor Bloomberg's MAIG (I will not give them a link) are at best useful idiot lapdogs to tyrants; at worst, they are willing accomplices.  (This puts NYC Mayor Bloomberg, budding tyrant that he is, in the unique position of being a dog on his own lap!)  In the 20th century alone, governments killed almost 200 million of their own citizens, after thoroughly disarming them.  Yet a determined group of Jews in the Warsaw ghetto, armed with a handful of rifles and a few rounds of ammunition per person held off the Nazi army until their ammo ran out.  The gun is civilization.  The statistics are so overwhelming that I am amazed any educated person can act like gun control is a good idea.  Gun control laws only affect honest people who follow laws. 

I believe environmentalism is a religion, complete with myths comparable to many organized religions.  As I said; I majored in Biology at one time so I have taken college Ecology.  Ecology is a dynamic science.  Basing all of your actions on keeping things the way they were in some prior, "sinless state", which is what modern environmentalism is about, is not science.  Environmentalists are simply angry bigots who think the world was perfect in some previous state and want it to stay that way forever. 

I believe endemic racism is gone in America, although some small percent of people will undoubtedly be racist, just as some small percentage believes we never went to the moon and there are alien bodies in Area 51.  I believe the vast majority of claims of racism are just the product of a racism industry that lives off these claims.  I grew up in a time when there were separate water fountains for the "colored" people (and drank out of them anyway).  Today, a mixed race couple doesn't even merit a raised eyebrow or second glance in this small, southern town I call home. You can't convince me things aren't orders of magnitude better.

I believe that if you think abortion is just fine, that's between you and God, and anyone who would shoot an abortion provider is no less a killer than they perceive the doctor to be.  But I think you owe it to yourself to understand the roots of abortion lie in racism and eugenics.  You need to read about Margaret Sanger and the other death advocates behind the cause - they were actually the inspiration for Hitler's death camps.  That is, you need to read about her if you believe in being honest with yourself. 

I believe one of the most profound things in human experience is mathematics.  Math is based on two assumptions: that the number 1 exists, and that addition exists so that 1+1 = 2.  Given that, everything else is derived and proven.  So why is it that this entirely human-derived set of laws and equations describes the world so perfectly?  Why is that we can create so many intricate mathematical models of so many things in the real world, and have the models work so well?  God must be a mathematician. 

Because of my fondness for math, I am puzzled that a society can claim to put high values on literacy, and conduct public education systems to ensure adults can read, but the same society does little to encourage facility with mathematics.  I can't understand a culture that can accept adults who read at high school level but can't work fractions.  Perhaps it's because lawyers run the show, and they are afraid the ability to do the math undermines so many of their lies.  Can't have the proletariat thinking for themselves, can we? 

I believe our society has an unhealthy infatuation with youth.  To borrow a quote from Al Gore to students, "you know things your parents don't" - but those things are useless.  They know things like who's on which TV show, or what the latest trends are.  The things they know that their parents don't know are meaningless bits of fluff.  Kids, wear the goofy hair now - get it out of your system.  Soon enough, it will be time to go to work.

You Don't Have a Right To Choose What You Want to Eat

The Federal leviathan in court in Iowa has argued we citizens '... do not have a fundamental right to obtain any food they wish'

http://www.wnd.com/index.php?fa=PAGE.view&pageId=153133

"There is no 'deeply rooted' historical tradition of unfettered access to foods of all kinds," states the document signed by U.S. Attorney Stephanie Rose, assistant Martha Fagg and Roger Gural, trial attorney for the U.S. Department of Justice.

If you ever had any doubt that we are heading into a period of tyranny that will rank right there with the Soviet Union, Mussolini's Italy or other such "paradises", this should just about destroy that doubt.


This is related to a frightening piece of legislation that has been languishing since last year, another Food Safety Act.  Since large factory farms have had some contamination issues, you'd think the Feds would target the foreign food imports, the large factory spinach farm located next to the pig farm (remember the e. coli in spinach?) , or someplace like that right?  Silly person!  The Fed.gov is going to clamp down on mom and pop farms, organic farms, and folks who sell the fruit off their trees on roadside stands.   Just like the toy safety act I talked about two months ago, the big companies can afford the lab tests and all the other process (well, they pass on the costs to you); the small farm can't possibly.  The way the law was worded in 2009 made having a lemonade stand, or selling things you grow in your own garden, illegal without absurd fees. 


If there's any food you like that is high in salt, fat or other things they plan to regulate, you should stock up now.

Congratulations! You Are Buying Part of Greece!

If you're an American citizen, congratulations.  As the principal funding nation of the International Monetary Fund, we are paying roughly 17% of the 1 trillion Euro bailout package for Greece.  In return, we get some Greek paper.  I think they use it for currency. 

And you thought it was bad to bail out AIG!  That's OK - AIG is using that bailout money we paid them to sell CDOs on Greek debt - betting Greece will collapse.  So when they do collapse, AIG will make money from it!  The market has pretty much decided this isn't going to work and started betting the Euro will collapse.  It's also a factor in the run up of gold prices, currently about $1230/oz. 

Last I heard, AIG wasn't throwing Molotov cocktails at the police, unlike the Greek union protesters.

This is a funny crisis because in some ways, it is complex, but looked at from another way it is incredibly simple.  Yes, there's a large number of things involved, but the root cause really comes down to one simple problem: too much spending, financed by too much borrowing.  So to fix this, the IMF is going to loan them more money.

Say what? They're going to fix a society that borrows too much money by loaning them more?  Isn't that like fixing an alcoholic by making them a nice, stiff drink? 

Oh, it's more than that, they'll say.  They're going to make the Greeks raise taxes and not retire quite as young.  The numbers I can find are a bit conflicted, but everyone seems to agree that the Greeks retire several years ahead of the Germans, say, who will be paying to keep Greece afloat.  That's only good and fair, isn't it, if you're a German citizen, to work longer so that you can pay for someone else's retirement? I guess we Americans get the privilege of working longer to pay for someone else's retirement, too.  When German citizens objected to working longer so that their Greek counterparts could retire younger than they do, the Greeks shot back that the Germans had not paid them damages for WWII - so there! 

It's really pretty obvious that people only have so much money.  Only the governments can print new money whenever they feel like it.  Every penny people spend on taxes can not go into buying other goods and services, causing an economic slowdown.  That will reduce the tax revenue as the number of people laid off and not paying taxes grows.  So they can't raise taxes too much or they'll kill tax income.  The only substantial change will be the workers who are expecting to retire will have to work longer. 

The risk here is that Greece pulls out of the EU, or the Germans do, or the European Union dissolves.  See, Greece is just first, why should Germany pay for all of them?  The German public is already rebelling against Angela Merkel.  It's not like everyone has a strong economy except Greece.  

Will this work?  Will the world stabilize?  I'm not betting my money on it.

Perfer et obdura; dolor hic tibi proderit olim - Be patient and tough; some day this pain will be useful to you. (Ovid)

Not Dead Yet

Make not doubt about it - seriously bad times are coming.  These will be the new times to try men's souls.  The financial collapse of Greece will proceed; whether they collapse this week or next year matters not a whit - it simply affects the amount of time folks like us have to prepare and become more resilient; more self-sustaining.   After Greece, the EU might well collapse as an economic body.  The collapse of the dollar is absolutely a real possibility.  As Denninger said (my previous post),

There's a lesson in here in that the Greek deficit as a percentage of GDP is just over 10%. 

So is ours.

So is Britain's.

So is Spain's.

The destruction they are witnessing "over there" will come here eventually. 

 There is an essential difference between the US and EU, though.  Mark Steyn points it out at around 31 minutes into this video. 




Iceland, Greece and the EU formed movements to scream at Government, "Why didn't you do more for us?  How come you didn't protect us?"  Only in America was an entire political movement started to scream at Government, "Why don't you do less for us?  Why don't you get the hell out of our pockets?  Why don't you keep out of our lives, Big Government, and we'll do just fine".  That movement, of course, gave rise to the Tea Party, the 9-12 Project, the We Surround Them groups and more.

As long as real Americans think this way, we're not dead, yet.