The American Energy Crisis

John Edwards and Arnold

2012-01-11T06:31:00.000-08:00

"Why do we find John Edwards so particularly loathsome?"

Why, indeed? And, by the way... who's "we"? You got worms in your pockets?

There are a number of underlying issues in the Edwards case... but first and foremost, the reason the Left and the Democrats HATE the guy and most of us that do not identify ourselves in those groups do not is simply this:

John Edwards had a baby instead of having an abortion.

That's it. No more, no less. It is the same problem that Arnold is having.

Most men (and women) cheat at some point in their lives... and, for better or worse, they tend to cheat at the point of their greatest appeal - wealth, fame, position - because "men are as faithful as their options" said Chris Rock - and their options increase exponentially at these times in their lives.

We are forever hearing of politicians sexual indiscretions - but only 2 of these sexual affairs, out of THOUSANDS, resulted in a pregnancy? NAFC!!! The OTHER affairs resulted in pregnancies, only instead of doing the RIGHT THING those scum bags killed their unborn child for CONVENIENCE. Arnold and Edwards and their lovers brought those children into the world. In the era before technology this was the NORM. Now it is normal to end a child's life to save face.

These children, Arnold's and Edward's, were meant to be! And Oprah & Co. doesn't like it.

And that's the way it is...

Cutting Through the Propaganda

2012-01-05T06:07:00.000-08:00

"Jeffers Media Theory" states that no "story" makes its way into the media without being bought and paid for by some special interest group (there is a difference between "story" and "news").

The U.S. housing market has not bottomed, and it is not even close. How this plays out could really spell the future of capitalism, or at least fractional reserve lending and "property rights", here in the U.S.

The Federal Reserve, its member banks, and the Federal Housing and Mortgage agencies are at the end of their rope. How else to explain the idea that they are now to become property managers and landlords? And what will they do if The People simply stop paying the "rent"? Are they really going to evict them all? NAFC. The effect that this will have on the "value" (price) of the non-government owned properties will be just brutal.

I have been a stone cold free-market capitalist my entire life... but in an era of Zero Population Growth ("ZPG") and over leverage (that must and will be unwound) I cannot fathom how The Powers That Be are going to enforce "property rights" on these "properties". The houses are built and there are millions of excess homes... Average fertility in America is 2 children per woman, slightly below replacement rate... extension in life expectancy has likely reached it upper limits... that leaves immigration.

Immigration is like the old Marx Brothers' joke about who would want to join a club that was willing to have you as a member... Who wants to emigrate to America? And who does America want? These are 2 quite different sub-sets of population.

The argument that the U.S. will turn on the immigration spigot to fix housing and Social Security is ludicrous. The U.S. has not created a single net job since 2000 - yet the population climbed by over 30 million. Is immigration really a solution for our housing over-supply? And if we tried to force it, would it work in time to solve the problem? Could that strategy backfire?

Technology continues to make labor, well, less laborious (energy might change this at some point... but that could be after the inflection point). Birth rates continue to decline. Immigration is winding down. And America has a massive inventory of empty homes... so much so that the Fed is OK with its members renting the properties back to the (defaulted) "home owner".

Wrap your mind around that for a moment... Ok... so what is their (The Fed's) exit plan? Trust me, they don't have a (legitimate) plan. They are taking the only course possible at the moment. The U.S. simply cannot evict everyone that is behind on their mortgages from their homes (if they did, just imagine the drain on social service, which the government has to fund, not to mention the social unrest given the bank bailouts).

So.... what is the Fed and its brethren going to do when these people stop paying their "rent"? If the Fed was unwilling to dispossess these "home owners" for failure to pay their "mortgage" are they then going to dispossess them for failure to pay "rent"? Is there a difference between "rent" and "mortgage" in this case? Just a slight nuance... people have even less incentive to pay "rent" than they did their "mortgage".

Even if the remaining suckers, excuse me - "home owners" - do NOT default and keep paying their mortgage and taxes - just who is going to buy from them when they go to sell?

Housing is a long way from the bottom. How this all plays out is fraught with a great deal more "risk" than is currently contemplated in the media.

The Straight of Hormuz

2011-12-28T05:46:00.000-08:00

Iran is threatening to close the Straight of Hormuz.

(I've mentioned this threat in previous posts...)

While I doubt that Iran has the ability to take on the U.S. Navy and effect a closure of the Straight for any length of time... you never know. The unintended consequences and unforeseen outcomes of a full fledged conflict with Iran, for that is what would come to pass at that point, are many and varied.

What would happen in the U.S. if Iran were successful in halting Oil shipments out of Iraq, Kuwait, Saudi Arabia, and Iran itself? Oil is a fungible commodity... it would matter little if most of the ME Oil ends up in Europe and Asia. The U.S. imports roughly 23% of the world's exported Oil. Oil exports would be cut by 25% or so... America would feel most or all of that cut... so let's say a little over 2 million barrels per day would come out of American supplies in short order (this is product and crude).

Of course the price of Oil, and hence gasoline, would be a moon shot... but the real problem would be availability - and physics. Without that Oil, a great deal less "work" would take place... with cascading effects across the economy, government, and society.

Police would have less gasoline to respond to 911 calls. Commuters would have less gas to commute. Markets would tumble. And yet, if temporary, such a short term crisis might be very, very helpful in prodding Americans, and our government, into taking action. After all, Oil imports, as we currently define them, will be gone in far less than a human lifetime... a closure in the Straight of Hormuz might give us some idea of what our future might be like and also give us some incentive, and our political leaders some cover, to get on with planning for life after Oil.

Because life will be very different. Yes, we will still have cars... having a car won't be the issue.... the issue will be the number of miles the average American travels by car, and that number is going to plummet (Here's a graph of Vehicle Miles Traveled ("VMT")... perhaps this process is underway right now). Think about that for a moment. In a nation of car commuting, what happens to the need for office and retail work space? It goes down like a rock in a pond, and with it the value of those properties (many of which are owned by the various pension funds... and those funds are already terribly underfunded) and the value of the mortgages held on these properties by the banks...

I could go on and on and on... but you get the idea. American's think nothing of getting in their car and burning $5 in gasoline in order to travel to purchase $1.50 worth of eggs. That will come to a screeching (no pun intended) halt. Now think about the impact on the auto industry... without that kind of wasteful driving how are we going to wear-out our cars so that we are forced to buy new ones? At some point we are going to figure out that we don't need a single additional car in order to burn all of the Oil we are ever going to have.... And what of the impact on retailers of the decline of traffic into their stores and the profits from impulse buying that will no longer be taking place due to an absence of impulse buyers?

And doesn't all of this contract the credit system (deflation of credit)? The Left bemoans how unfair wealth distribution is in the U.S. In this scenario that problem would evaporate... along with all of the tax revenues that currently support all of their favorite Social Programs.

Ah, but its a beautiful day. I have to go feed my livestock and milk the cow and head over to the academy to teach a grappling class. Enjoy your day!

What We Have Become

2011-12-26T07:18:00.000-08:00

Yet another plank in the diseased ship of state of the Left.

Young men of the gang-banger mentality have a new form of entertainment: Walking up to defenseless persons and punching and kicking them in the head until they suffer a concussion and collapse to the ground... and just what demographic is engaging in this repulsive behavior? It ain't farm kids from Iowa or suburban kids from New England.

Oh, the Right has its share of blame here, too... the War on Drugs has created a demographic of unemployable men that have abandoned their families to a life of crime... their offspring's only role model were thugs...

The Left and Right battle reminds of the a National Geographic photo taken of 2 bull seals on a beach so absorbed in their own fight that neither noticed the Orca coming out of the water to kill them.

Willie Sutton famously quiped when asked why he robbed banks - "cause that's where the money is". Really want to fix America's social ills? You gotta go where that illness is greatest. But it ain't gonna happen... the Left needs these votes and couldn't care less about The People.

------------------------------------------

"Correlation DOES NOT imply Causation"

Remember that one?

Clearly the "professor" of "Women's Studies" quoted in this article was MIA for her Statistics and Finite Mathematics classes...

In the first five years after the adoption of no-fault divorce, divorce rates did indeed rise, but the domestic violence rates fell by about 20 to 30 percent, and wives' suicide rate fell by 8 to 13 percent. So we know that divorce actually provides a safety valve. - Stephanie Coontz, professor of history and women's studies, The Evergreen State College

Sounds so right... the way all propaganda should and often does.

Dear Ms. Coontz: You provide only your putative "benefits" of the issue... what of the costs? Children from broken homes suffer from poverty and mental illness in vastly great numbers than the offspring of intact families. Does that matter in your calculation? I could beat you to death with this, but let's move on... Even if I take your data at face value (and I don't... when one is a "hammer" EVERYTHING looks like a "nail"... and if a "professor" of Women's Studies" cannot be defined as a "hammer"... who can?) as a college "professor" (SNICKER) you SHOULD know (and either a: you do know better and are simply engaging in outright propaganda, or b: you DON'T know... in which case you are merely another incompetent. Either way, you are a disgrace to humanity and are harming the women lured into your orbit of hate) that "correlation does not imply causation".

For example... anti-depressant use in middle aged women has gone from essentially ZERO to 24% of that population. Any chance that that had something to do with the decrease in suicide (you f***ing jerk)?

And domestic violence? Police response to a 911 call was non-existent in the 1930's and was few and far between in the 1970's... any chance that increased Law Enforcement had something to do with the decline in Domestic Violence (and domestic violence cuts both ways I might add... and women are far more likely to use a weapon). I am sure in your mind the fact that 24% of women are medicated in order to cope is entirely the fault of rampant paternalism and misogyny in our society... but is there any chance that an unintended consequence of rising divorce rates and the refusal of 50% of the population to marry in the first place is harming the mental health of women? Do you have any better data to support that contention then you do on your previously mentioned assertions? Of course not. You are in the indoctrination business, not the education business.

-------------------------------------------

Christmas Shop(lift)ing and Competitive Materialism (I got that from my Physician in Miami... he was using that term to define the miasmic social environment in the Nouveau Riche cesspool of my adopted hometown Boca Raton).

Got that? Here we are, a nation of obese, petty thieves, judging the fitness of our political leaders by their sexual histories...

We are a nation so poisoned by the Media, Hollywood, "Women's Sudies'" "Professors", et al that we steal $435 per family (and that's just retail theft), our "inner city" youth punch defenseless elderly into unconsciousness, and our college professors engage in rank propaganda and disinformation.

What a world.

The People (of Israel)

2011-12-22T06:28:00.000-08:00

If you have been reading my stuff you know that I am a firm supporter of Israel (as in their Right to Exist) and the Israeli people... but it is much the way I feel about my own country. I love what our country's - America and Israel - have stood for but am deeply suspicious of The Powers That Be.

Too many non-Jewish Israeli supporters and the Diaspora do not know what is going on in Israel right now. Israel is becoming (really has become) a Latin American style "democracy". A dozen or so immensely wealthy and powerful families are in complete control of the government - and its policies and military. The money coming from the Diaspora, fundamentalist Christians (this group provides huge financial and political support to the Israeli government... especially when Likud is in power), and U.S. Government Foreign Aid into Israel is going to further this small group's power and control, and has not (IMHO) helped The People... in fact, given the demonstrations in Israel of the feelings in the Israeli Street I think the temptation to pick fights and engage in military operations for the purposes of distracting the surge in dissatisfaction is very, very tempting.

To say that this set of circumstances is problematic, particularly at a time when Iran is so close to becoming a Nuclear Power, cannot be said forcefully enough. Yet ANY CRITICISM of Israel's government is met with a swift and brutal counter from those controlled by The Israeli aristocracy - Witness Ron Paul's treatment in the American Media.

This is dangerous stuff with some very troubling potential unintended consequences. The flavor of anti-semitism that I smell on some of the Occupy Wall Street folks is one of these. Its threat to the unique relationship between the U.S. and Israel cannot be dealt with in the same manner as other out-breaks of anti-semitism - precisely because it is occurring in the one country that Israel needs most at her side.

To the people of Israel: The American People support you, your right to exist, and your commitment to democracy. I pray you are able to hold on to that commitment in these troubling times.

To my fellow Americans: We must support the people of our closest ally, Israel. We must not let that support be used by their 1% to enslave their 99%.

The Power of Propaganda

2011-12-21T18:29:00.001-08:00

Wanna see the power of Media Propaganda?

Watch this. As a result of THIS?

Bizarre.

What Stock Market Multiples Say About "Growth"

2011-12-21T12:16:00.000-08:00

Many energy watchers in the blogsphere often talk about "the end of growth". IF, and its a big IF, they are correct, you will see it first in the stock market.

The stock market prices in future growth and current cash flow/earnings (no, they are not the same thing). If there is no "growth", PE multiples will (IMHO) contract down deep into the single digits.

So it was with great interest that I saw this article today on Marketwatch.

If the end of growth is here, temporarily or permanently, you will see it in market multiple contraction.

-------------------------------------------

Read this interesting article about the end of the 9-5 workday at the office.

Without doubt this is happening... it is the conclusion as to "why" the author reaches that I must take to task.

Vehicle Miles Traveled is down... Oil imports are down in the U.S., as is total Oil consumption... Oil is primarily a transportation fuel in the U.S... what choice do people, or companies for that matter, have? Commuting is going to contract. PERIOD. As it does the value of all of that commercial office space, and the support business surrounding it (from lunch trucks to dry cleaners) is going to go down like a rock in a pound. Think banks are in bad shape now? They are positively healthy and robust compared to what they will be with a 10% contraction in transportation fuels.

-----------------------------------------------

I wish these "young farmers" good luck.

Unfortunately, for them to make a living farming at the sub-industrial level will require the price of their produce to rise substantially. I speak with local organic/family farm types fairly often at our local Farmer's Coop and at the farmer's markets in the area... and they just aren't making it. Food is CHEAP and still 1 in 7 Americans cannot afford food on their own income and require government assistance... and its far WORSE in the rural heartland, where people are taking a stab at this, with 1 in 5 on food assistance here in my rural Tennessee county. There is a vicious cycle going on here... the government subsidizes people's food budget, giving them little incentive to buy local products from people that do not and cannot accept Food Stamps... and by subsidizing people the people do not learn how to grow and preserve food, even though in our local there is an excess of land and rain. The elderly farmer up the street from me told me that when he was a young man most everyone kept hogs here... now almost no one does. Those that do send their hogs out for "processing", and by doing so pretty much eliminate the economic advantage of raising the hog in the first place (by paying $.70 per pound in processing fees instead of doing it themselves). We slaughter several hogs each year and save a couple $thousand$ per year in doing so.

Yet the small scale farmers around here are having a hard time selling their produce and livestock. The government has removed the incentive and tradition of self-reliance from the descendants of America's frontiersmen and farmers, and in doing so left the farmers and their potential customers in poor shape.

-------------------------------------------

Anti-trade socialists should read this article.

Enough said.

-----------------------------------------

American Family Life continues to just get weirder and weirder.

-------------------------------------

More soon.

A Banker Who Just Does Not Get It

2011-12-20T06:12:00.000-08:00

You just gotta read this.

Dear Mr. Dimon:

I don't know how to tell you this... but you are not Steve Jobs, Henry Ford, or even Michael Dell.

You are a guy born into a family of the 1%. You went to the "right" schools all of your life (and by "right", I don't mean the curriculum, which was the same in every other school... I mean you gained the exclusivity cache that the establishment reserves for its members and their issue), and you had the good fortune to be included in the club due to your unique personal, ethnic, and cultural background... if you were a Puerto Rican kid from the South Bronx I doubt you would have your current position - Harvard Business School or not. When you are born on 3rd base, its just not that far to home plate. As my friend Donal Lang quiped - "is is easy to confuse privilege with talent". You really shouldn't do that. Mr. Dimon.

You did not invent banking and you are not the founder of J.P. Morgan. You and your ilk "captured the flag" of the CEO office, and you (and your ilk) rode the inflation of the U.S. credit system to fame and glory - but please, "don't confuse brains with a bull market." You and your ilk could no more survive the contraction in that system without the support and acquiescence of the Federal Reserve and the U.S. Treasury than a trapped minor survive a mine collapse without oxygen.

You do not "run" J.P. Morgan... but you do bleed it dry. All CEO's know this truth - their corporation runs them. Without the armies of analysts and consultants (Mckinsey, Booze-Allen et al) and the legions of CPA's, Lawyers, Board Members, and support staff you wouldn't know how to get into your building. These other folks run the place in a very similar fashion to a rugby scrum... and that's OK. That's the way it is when you have 60,000 employees... but claiming credit where credit is not due is beneath you.

Not that you aren't smart, driven, hardworking, and diligent - you are. You beat the rest of the pack to that corner office... that in itself is quite an accomplishment - it is simply not worth $23 million per year. I, myself, am at least as smart as you (care to play Chess with me? Or Concentration? I'd wipe the floor with you), and I would do it for $5 million. I know some folks that are a great deal smarter than you and I that would do it for $1 million (but not me... that's not enough compensation for me to come off the bench, quit my farm, and sit through all those meetings every day).

JP Morgan, Bank of America, Goldman Sachs... you folks are nothing more than branch offices of the Federal Reserve Banking System. Your size and financial power derives as much from the U.S. military enforcing US$ hegemony around the world, and the U.S. Navy protecting Oil shipping lanes, than anything else (if you doubt this, watch what happens to "banking" if a U.S. or Israeli dust up with Iran leaves the Straight of Hormuz closed for even a couple days). You and your cohorts were able to toot your horn only because of the unique environment of exponential growth in credit and natural resource supplies of the past several decades... in an environment of exponential decay in credit and natural resource supplies you and your industry will need to be rescued several times over I should imagine... so what, exactly, is so "productive" about you?

In addition to confusing brains with a bull market, you and your ilk have stacked the deck in Washington, DC, and equally as importantly (but flying under the media's radar) in the state of Delaware's State and Legislative houses, where you have written corporate law to ensure that you are NEVER challenged and that your board directors is nothing but a rubber stamp leaving you with a government sanctioned AND FINANCED monopoly. If you guys are soooo smart and sooo competent, what's up with the buying of government protection? When you come right down to it there is little difference between you and the Russian oligarchs.

This is coming from a guy that worked in the banking and securities markets most of his career, not some OWS kid in a tent pissed off because he's $200k in debt for a history degree from Brown. If I were in your position I don't think I would do things that much differently. Except I wouldn't believe my OWN bull sh#!.

I am, however, very impressed with your ability to spin the story and issue propaganda that has led some in the middle class to sympathize with you and to demonize the kids of OWS, many of whom see clearly the workings of the system before them. Unfortunately for the Middle Management Republicans they are unfamiliar with "Jeffers Media Theory" (please feel free to google).

In the final analysis it matters not. You and yours will not be able to stop the Internet from shedding the light of day on the truth of it all... I look forward to seeing how it all works out with great anticipation.

Sincerely yours,

Greg

P.S. What America NEEDS at this very moment is NOT more egomaniacal bankers... we need more small business owners and founders and people that are willing to to go to work everyday, come home to their family every night, and be good neighbors.

Rise of the Machines

2011-12-18T17:45:00.000-08:00

"Wall Street employment is down 9%."

Boy. Now there's a yawner...

Wall Street employment might be down 9%... but compensation is down closer to 25% (and maybe 30%... and its only that high because the senior exec's ripping the government and the shareholders off... trader and broker income is off more)... and that's with all that the Fed and the U.S. Treasury did to soften this blow.

Well, speaking of blows... Europe is blowing. And this wind is going to level what is left of "Wall Street".

(And just who is "Wall Street", anyway? Lehman? Gone. Bear Stearns (my alma mater)? Gone. Goldman is staying off the the radar and out of the media... and don't even mention MF Global (ROFL!!!). Its embarrassing to watch CNBC - they have to struggle to get a dolt capable of fogging a mirror from "Dewey-Fugam & Howe" and "Laydown and Whackett" to entertain the masses of disinterested investors....

Because there are no individual investors left. Its all machines. The volatility going on in the market is the result of infinite buy and sell programs - with the result that people just can't take it any more. I speak to CPA's regularly... first thing I ask is how their clients are doing trading the market... the answer, unsurprisingly is "not too hot". Since high frequency trading is now over 70% of the volume, and it was non-existant 10 years ago... and hedge funds are 30% (just making that number up... but I bet I am close), and they pretty much didn't exist 10 years ago, too... and trading volumes are down... it then follows that there are no individual investors left.

So... IMHO, it ain't long before New York and environs goes feral.

We are in a uniquely bad spot here.

Blowback

2011-12-09T12:42:00.000-08:00

The CIA uses the term "Blowback" to describe the unintended consequences that result when groups or nations that have been dealt with coercively respond with violence in return.

I have no idea what the facts are in the case of the shooting of a Police Officer at Virginia Tech University yesterday... but a thought was nagging at the back of my mind...

I am continually surprised that the police officers involved in the killing of civilians are not then subjected to vendettas and revenge. Police kill people in no-knock raids, traffic stops of unarmed people ("the car was a weapon"), and other encounters... have not then been subject to violent response from the victim's family. I am astounded, frankly.

When I heard this story, well, I am interested to hear what the facts are. This is probably not the case here... but it is only a matter of time before the father/brother/son of one of these police killing victims settles the score the old fashioned way.

We Paid Big Money to get this *&^ed Up

2011-12-08T05:54:00.000-08:00

Big Money.

The "Euro Could Explode"?? ROFL!!

This is what happens when you addict people to social programs and structures that are not compliant with the laws of mathematics. People start to actually believe that whatever condition is some kind of right.

The solution for Europe is fairly simple... unfortunately, several more governments will have to collapse and the people humbled before we get there.

--------------------------------------

Is it War in Iran? I certainly hope not. This analysis is certainly worth considering.

From the article:

Nonetheless, at this point war looks likely. Under our political system, the side that can pay for election campaigns invariably gets what it wants. There is, simply put, no group of donors who are supporting candidates for president and Congress based on their opposition to war, while millions of organised dollars are available to those who support the neo-con agenda. Pundits used to say: As Maine goes, so goes the country. It's just as simple today: As the money goes, so goes our policy.

I am a Free Market, Capitalist/Libertarian... and even I hope to see The Powers That Be running the International money and banking system crushed before they destroy us all. Maybe the Fed saved the system to keep the world safe for future conflicts like this.

-------------------------------------------

Pearl Harbor Day came and went with little fanfare... and that's the way it is. A political disagreement worth killing hundreds of millions (WW I & II) is pretty much forgotten in a single human lifetime... and for a number of reasons... not least of which is this:

"When strange peoples meet: First they fight. Then they fornicate."

My father spent 3 1/2 years in the South Pacific during WWII fighting the Japanese. Me? I am married to a beautiful girl from JAPAN. We have 2 children. Groups that insist on walling themselves off from others - dividing the world into 2 kinds of people - will continue to provide the fuel that stokes the flames of War.

Way to go.

-----------------------------------------------

I have several "go to" guys in my universe. "The Wise Man". "The Mad Scientist". "Einstein".

I had an interesting conversation with The Wise MAN ("TWM") yesterday. He's an older fellow (If someone my age says you are "older", well, you have had a long time on this planet to observe) who has spent a lifetime with a keen eye taking in the human condition.

Says he: "Everywhere I look, I see people accommodating the new reality, and some that are doing so in fact while pretending otherwise... but it is happening. The World just got a lot bigger... and that means our individual "world" has gotten a lot smaller. And it can get a whole lot smaller. We will adjust. Life will go on. But people's expectations are being adjusted as we speak. Many will have to humbled."

I love talking to TWM.

The Anti-Chirst Was Here

2011-12-03T14:50:00.000-08:00

Goldman Sachs the anti-Christ and a member of my most unholy trinity (along with the USDA and the Department of Homeland Security... come to think of it, I may have to expand from a trinity to some larger number) has been out of the news of late. Amazing, really. Goldman was unindicted co-cospirator Numero Uno in the European Debt Disaster.

These guys are like the anti-Johnny Appleseed... only the seeds they leave behind are cancer clusters. And boy, do they get paid well for their trouble.

Not that the EuroZone wasn't doomed from the get go... but with friend's like Goldman, who needs an enema?

It was Goldman (and OK, Lehaman/Bear/Morgan et al... but with Goldman as the Don of Dons) that helped Italy and Greece structure (read: hide) their deficit spending so that it wouldn't appear "on balance sheet"... thereby "maintaining compliance" with their Maastricht agreements (the guys from Enron went to jail for this stuff. Goldman? They got special dispensation for counter party risk... essentially getting paid BIG MONEY for taking no risk and, in reality, actually providing no risk coverage for those seeking such... but they DID go to Harvard... so they must be smart, right? Snicker...).

Not long long after, these doer's of "God's work" helped blow the U.S. financial system up with their contributions to high finance in the mortgage market as well as Washington D.C.'s regulatory and law garage sale.

We have the largest percentage of people in prison as a percentage of the population in the history of mankind... but not one guy from Goldman.

Because everybody works for Goldman. The Department of Justice, the SEC, the U.S. Senate... everybody.

I wonder if they'd hire me?

Prolly not...

Europe, Debt, and the Keynesian Jag-Offs

2011-12-02T08:52:00.000-08:00

Merkel says fixing Europe's debt crisis will take "years".

Madame Prime Minister: It will take years??!! That's if you are lucky. If you are not, it might fix itself over a long weekend.

------------------------------------------

If you are an equity investor you really gotta ask yourself: What is it that the Bond market sees that you don't? I spent an entire morning earlier this week looking around for short term U.S. Treasury paper without a negative yield... why do you suppose that is?

----------------------------------------------------

The U.S. economy and the American worker simply cannot afford the level of "payroll tax". The "payroll tax" is insufficient to support and maintain the solvency of the U.S. Social Programs. If you have read my older stuff, well, this is EXACTLY what I have been saying since the day I started this blog. It does not matter what you think, or feel, or wish... the numbers matter... and the facts on the ground say that these programs will be cut so deeply that they will resemble "defaults" on promises far more than cuts in benefits.

--------------------------------------------

And finally... anybody besides me realize that any "bailout" of Europe by the Fed will be at the expense of American Taxpayers?

Europe Explained by a Regular Guy

2011-12-01T06:31:00.000-08:00

Wall Street economists just love to talk in jargon and show everybody how smart they are... consequently, most people, and most investors, tune them out and few American's really understand what the heck is going on over on the other side of the pond.

Well... it is a very similar story to America circa 2008 when our bank's collateral (mortgages) turned out to not be worth what people thought they were... only in Europe, the asset that is FUBAR is the sovereign debt of the EU members... the bonds sold by the various member country's departments of treasury.

Europe's banks are freaked out, and rightly so, about the potential for spreading defaults on those bonds... so they are in full flight, de-leveraging mode... and since they cannot (or won't) raise capital at these equity prices (some, like Bank of America are down 90%) they MUST work from the other side of the balance sheet - calling in loans and selling off collateral and seized assets. What happens when the banks all try to sell stuff at once? The prices for that "stuff" collapses.... and if the "stuff" happens to be sovereign debt? Well, as asset/prices go down the interest rate for new debt goes UP! When you are on the razor edge, like Italy (forget Greece... they are off they edge and small potatoes, anyway) you go from "Everything's fine" to "my rectum thinks my throat's been cut!" in a matter of days... and what happens when the banks all call their loans at once? Liquidity - CASH - dry's up in the system, forcing down the prices for the stuff they are trying to sell to raise cash and deleverage in the first place... get it? The ultimate negative feedback loop.

And the response from The Powers That Be? Lend the banks more cash printed up over at the U.S. Federal Reserve... which had the effect of lowering the value of the US$ and raising asset prices.

This is a band aid over a festering, gangrenous wound. Italy's debt is such that any rise in interest rates and POOF! They won't be able to fund it any more (remember... Italy cannot print its own currency), and will simply have to default... And Japan makes Italy look like a pilgrim!

But wait! There's more! If you order now we'll throw in a U.S. pension system disaster right on time for the Presidential election! OR... an energy shock! Either way... you are gonna get something!

You see... the U.S. Fed is only to willing to do this despite the obvious draw backs because if they do not... and the markets continue crumble... it won't just be American Airline's that is defaulting on its pension obligations. So the U.S. Fed was willing to sacrifice the US$, at least a little bit, to buy the Europeans some time... with the risk that if it were to actually work the price of Oil could (though I doubt this very, very much) spike and put the kabosh on things in general.

Europe will have to shred its safety nets and generous pensions. Period. End of Report.

Coming Home (to Roost)

2011-11-30T07:06:00.000-08:00

The world's financial system is about to conflagrate and The People need their blow by blow analysis. Therefore, I am (again). Blogging that is.

It is simply not as much fun to blog when the folks running the train set have the trains running on time... From 2005 to 2009 the action was just too good to pass up, and when it appeared that The Powers That Be had patched up the system pretty well, well... that's just not as much fun to cover.

This is different. This is NOT 2008 all over again... this is much better (worse) for blogging... I had remained an unbowed and slightly bloodied deflationist... but it appears that while the FED and the other various central banks were, in fact, able to strike fast and hard (my hat was off to Bernake, Paulson, Bush, Obama and a few other courageous members of the Establishment, hehehehehe), they are pretty much out of gas at the moment.

And not because of the price or supply of Oil! Europe is leading the way in "Keynesian End Game" (I don't know who to credit, but I like that term... may have even used it myself at some point as I love chess metaphors and analogies...)

Oh, sure... Oil prices and supplies are not helping at all, and are in fact contributing to the never ending torture that is the Western economy (because its all relative... ask some Indigenous person living in the Andes if the recession means much to them...)... but that's only because we live in this Television induced fantasy of what our life is - food comes from the grocery store, water from your tap, gasoline out of a pump at the corner store, money comes from the ATM, financial security is bytes on a freaking screen... holy molly! Are we FOS, or what? (We, as jurors, put people in prison to be raped, murdered, and tortured... for "killing or abusing" animals... and then go home and set out rat and mouse traps and poison - I have to wonder... WWJD?!)

But I digress...

The Central Banks are in full panic mode, now... don't let them fool you... check in with me and I'll be happy to set you right...

Remember the incredible growth in China? Here's a link to the Hang Seng Index 5 year chart.

Do you see any "growth" there? Me neither.

OK. Here's a 10 year chart. Looks to me like a market growing at a compounded 7% per year... with harrowing moves... During the best decade that China could have possibly had? What will it look like a decade from now?

For now, the risk trade could be on... use this as an opportunity to sell any long positions you have left... hide out in short term Treasuries and US$... a Bear Market is in the offing, maybe The Big One... this will create the greatest opportunity for Capitalist pigs (like me!) since March of 2009... and perhaps a shade better.

OK. That's if you have money.

No money? Not to worry... things can't get any worse for you... no point worrying about it... but if you are young enough and bold enough to have a thirst for life rather than a thirst for commiserating... Think!
The answers are fairly obvious!

In a deflationary environment you must avoid debt nearly as much as death... because debt will lead you there. Too, you must avoid property taxes like the plague. This likely means that if you are fortunate enough to have not set up shop in some high cost Blue State you'd be better off elsewhere. The life long difference between paying $1,800 in property taxes and $18,000 in property taxes (per year) is overwhelming! (Its the after tax equivalent of being able to spend winter in Costa Rica or other warm local... or working 4 days per week rather than 5...) Let the Keynesian Left eat their own cooking... its poisonous to your freedom as well as your life and health.

The West, and the U.S. in particular, is in for a rapid-rate-of-change-event. Not so rapid that its the end of the world... life will go on... but our economic arrangement will under go a tremendous shake up... it will be sooooo much easier on you to swim with the tide rather than against it. Or "Against the Wind".

Nice tune. Don't let it be your anthem.

"There will be two dates on your tombstone everyone will read them, but the only thing that matters is the little dash between them." Kevin Welch

Blog Has Moved

2011-07-20T12:04:00.000-07:00

I am now blogging at:

Libertariananimal.blogspot.com

Moving

2011-06-30T13:27:00.000-07:00

I am going to be Blogging at libertariananimal.blogspot.com for the most part. I will continue to comment on the energy situation here in the West, and in the U.S. in particular... but I am going to really pull apart the political implications of our energy conundrum, deficit, military budgets, social programs, et al... and take a hard run at my Talk Radio and documentary idea. We are at a cusp here on so many issues. I love my country and I LOVE being an American... I am not looking for votes and I am not looking for money... but I am looking for something. Soon as I figure out what that is, I will let you know.

Posts have been light of late as I have had bronchitis for the past month or so... and that hasn't helped the speaking efforts needed for a regular talk radio segment, either. Please bear with me. I have been prescribed "gorillacylin", after the run of the mill stuff did not do the trick, and hope to be full of piss and vinegar in short order.

Greg Jeffers
Libertarian Animal

The Wisdom of the Masses

2011-06-30T06:40:00.000-07:00

Nearly 40% of Americans believe that the American economy is in permanent decline.

That's only because the other 60% is still employed an unaware of America's energy predicament. And there is no macro solution (IMHO). I have been writing this blog for 5 years or so, and have been noodling this since 2000, and no matter how I move the parts around I don't see any outcome where significant parts of systems that many, many people rely on for their physical and mental well being will not fail.

The pension system? Kaput. Banking? Sunk. Budgets for social services? Glug glug glug... as the water rises around them. Infrastructure? Ka-BOOM! Recreational doomers will take no solace in this, it could take a decade or 2...

I don't know the rate of change... for the people whose financial lives have already collapsed, I don't think it matters a wit - and there are millions of them.

And I don't blame our political leaders... they were set up in all of this by phenomenon beyond their control and blown this way and that by the Zeitgeist. The myriad unintended consequences of the explosion in energy use, ingenuity, population growth and innovation were just too difficult to see past. Assumptions were made, and then those that espoused the assumptions received "qualifications" from our establishment institutions further reinforcing these assumptions... and now we know, or suspect, that those assumptions are all wrong... but too late. We are here. And does not matter if "Peak Oil" is here for the world or if its 10 years away... Peak Oil is here for the U.S... and its not the "end of the world" but it does make operating within the financial economy very difficult for a large portion of the population.

How that is addressed is anybody's guess...

-----------------------------------------------------

This is a must read from Stuart Staniford.

---------------------------------------------------

In The News

2011-06-27T19:19:00.000-07:00

Today's Libertarian Animal Radio Show.

------------------------------------------------

Who oversees the FBI? Who says this is OK?

------------------------------------------------

Former President Jimmy Carter had this to say on the 40th anniversary of War on Drugs.

---------------------------------------------

Liberal Congressman Barney Frank and Libertarian Republican Congressman Ron Paul have introduced legislation to end Federal Marijuana Laws in order to leave it up to the states. Frank just moved up from a complete ZERO in my book. This issue belongs to the states; 16 states have already legalized "medical marijuana". What the hell do we have "states" for if they cannot make this decision? At wouldn't it be nice to be able to vote with your feet (move to states that see it your way).

Its either Libertarianism or Fascism.

Shale Gas in the News

2011-06-26T07:12:00.000-07:00

The economics, or lack thereof, of Shale Gas plays is making its way into the news.''

Lots of serious folks on Wall Street felt this was the case, including yours truly. But no story makes its way into the MainStream Media without being bought and paid for.... and somebody was buying a great deal of space to convince the public and our officials of something many people, like me, thought was simply not the case.

The irony is that the economics would improve, and might even make sense, if the propaganda had not been so successful... or I might be all wet. This is just a suspicion of mine; just a watered down hypothesis. After all... The fact is that there is a great deal of Nat Gas in Shale plays... but it might be an economic sink, or worse, an energy sink. If it is an energy sink, it matters little how much gas exists in these plays... if an economic sink, higher Nat Gas prices will change the things somewhat. Either way, Shale Gas ain't wearing a red cape and leaping over tall buildings to save the day for our industrial society - even if it makes some folks rich.

-------------------------------------------

Sometimes, problems present themselves for which there are NO SOLUTIONS. Af-Stan is just one of these.

War, as it existed for centuries, has been "won" killing everybody on the other side. Is this really a viable option for liberal democracies at this time in history? I absolutely loved hearing the president call it as it is... that we are not able to pacify all of Af-stan and that it is not possible to make Af-stan a "perfect place". Its sad, its horrible, its depressing... it is what it is... the world is not a perfect place. Best thing we can do?... We The People had best work on making sure that their issues don't spread here.

--------------------------------------------
Tongue firmly in cheek:

Congrats to the Gay Community of New York! Now, you too can have the government involved in your personal relationships. A bigger Congrats to the Divorce and Family Law Bar in New York, after all the rate of divorce for childless couples is much higher than for couples with children, and gays just don't that many children... you gotta love the sound of the cash register ringing with all those future divorce filings. Just what we all needed, more congestion in our Court systems... Patience... there will be some serious unintended consequences... Just wait.

What a non-issue. Rather than getting government out of the marriage business, you knuckleheads brought them in a little deeper. People should be able to enter into what contracts they wish to... We have made family law such a cluster f*** as it is... I can't imagine anyone wanting to engage in government sponsored divorce terrorism EXCEPT for those trying to provide a stable home for children... and as I mentioned above, you folks don't have a great many children... but Congrats!

Obama's Release of Oil from the SPR

2011-06-25T05:50:00.001-07:00

I needed to noodle the release of Oil from the U.S. Strategic Petroleum Reserve for a few days (and I have been under the weather... which tends to slow my noodling). CNNMoney had this not too dumbed down article recently:

Four reasons are emerging for President Obama's surprise decision Thursday to release 30 million barrels of oil from the nation's strategic reserve -- economic stimulus; a looming supply shortage; a wake up call to OPEC; and a warning shot to speculators in the oil market.

I think that that line of reasoning is essentially correct... so lets take it apart one item at a time, but in reverse....

1. "A warning shot to speculators in the Oil market." Hmmmm..... This is so wrong on sooooo many levels... but OK, we live within a body politic filled with dingbats and dumbbells... true believers and complete deniers... wing nuts and fruit loops.... Here's my take:

Our command economy control freaks have undertaken an incredible effort to stimulate the economy (most of these efforts are doomed to fail or have a cost/benefit ratio f***ed up beyond recognition). Some of this attempt at command and control had some unintended consequences - just take a look at the US$ - and so the control freaks think they can micro manage aspects of their efforts to increase speculative activity that they find unappealing - even if there is only (and barely) circumstantial evidence that the original efforts to increase risk appetite were the driver behind Oil prices - by driving out speculators?? After all, energy was one of the worst performing sectors in the commodity markets... WhoTF is advising these people? Commodity trading is a Zero Sum Game. For every buyer there is an equal and opposite seller. The market price will ALWAYS get to equilibrium eventually via the supply/demand price discovery between producers and consumers. Reducing the number of trades in between Exxon and Mrs. Smith will absolutely, positively not change the AVERAGE outcome of price... it WILL, however, increase the volatility in the market price... which might have the unintended consequence of reducing risk taking at the Exploration and Production level.

Politically, these knuckleheads have been able to label "speculators" as the evil doers... so this might appeal to the non-thinking viewers of the likes of Oprah and Nancy Grace.

2. "A wake up call to OPEC". ROFL!!! OPEC is keenly aware of their precarious position - there ain't a damn thing they can do about it. IF, and its a BIG IF, OPEC has ANY spare capacity at the moment it almost assuredly is in The Kingdom of Saudi Arabia, and KSA has already said they are going to increase production... my bet is that that was just propaganda... and we will know the truth soon enough.

I am quite sure that a "Wake up call to OPEC" was not part of the administrations thinking... or at least I hope not. While the ruling OPEC's elite might benefit from selling the West and the BRIC's their oil as fast as they possibly can... under NO CIRCUMSTANCE is this in the interests of the PEOPLE living in the OPEC countries. The West's ongoing War with Islam has been the predictable result, and the Arab Spring is just the latest chapter in this ongoing saga.

3. "A looming supply shortage". We need a definition for "shortage". There will be no shortage of $150, or $200, or $300 per barrel Oil... and no $100 per barrel Oil to be found. There will be no "shortages" unless governments attempt to ration by inconvenience. If "rationing" occurs by price, the market will handle everything... now you might not like that; you might have to drive fewer miles and in a smaller car and live in a smaller dwelling and grow your own food and share bath water... amongst all manner of other adjustments. But you will adjust. The problem for the Federal, State and local governments is that this will simply destroy their budgets. The good news is that the "smaller government" folks are going to win by default without having to throw a single punch.

4. "Economic Stimulus". This is just too silly to even address. The amount of Oil in the SPR might, MIGHT, get these folks through the 2012 elections... and then what? Is our economy "stronger" by destroying contingency funds? "I fart in the general direction" of this one.

In the final analysis, this is just another cluster f*** coming out of the 2 Headed 1 Party (2H1P) Monster that has been eating us alive since the end of the Civil War... but the fat is gone, the muscle is gone, and the Monster is gnawing at the bone of the U.S. Strategic Petroleum Reserve.

-----------------------------------------

Peak Oil is unfolding pretty much on schedule. Peak Oil was never going to be an overnight kind of Tsunami thing-a-ma-jig. Over the next 10 years the world will become a very, very different place... and over the next human lifetime things will be every bit as interesting as say, the 75 years from 1925 to 2000. The slow grind of Peak Oil simply will not enjoy a rate of change that will satisfy the recreational doomer. For thinking people, not to worry. Stick around. The end of growth and then outright contraction in Oil supply is going to put a rocket in the pocket of the economic/political environment.

"Forget the Alamo. Remember Vincent Hodgkiss"

2011-06-23T11:23:00.000-07:00

I barely knew Vincent Hodgkiss. The fact that I knew him at all was one of the vagaries of life. The 3rd anniversary of his murder at the hands of the Pembroke Pines police, and the fact that all of people in on the murder were "cleared", has sent me into action.

I am producing a documentary about this killing, and will be airing it out on my blogtalkradio show, The Libertarian Animal.

I spent yesterday and today trying to speak by phone with the Mayor, Frank Ortis; the Chief of Police, Dan Giustino; and, the Administrative Law Judge for Florida's Broward County The Honorable Sharon Zeller. The Judge's administrative assistant has been playing telephone tag with me, but the Chief and the Mayor have yet to call me back.

I hope they will open their doors and answer some questions... I can assure them that I will be showing up, and soon, with a camera crew in tow.

I will be putting up a link shortly to my radio webcast on what I have come to find in the Hodgkiss Killing.

OMG!!!! Vindication!!!1

2011-06-23T06:22:00.000-07:00

The IEA plans to release 60 million barrels from their Strategic Petroleum Reserves!!! What are they going to do? Release 30 million barrels every month until Libya is back to exporting?

ROFL!!!!!

This is the kind of silly sh*! that helps market's find bottoms.

On a more sinister note... there were absolutely no shortages in the market... this is political gambit of some sort designed to help somebody, somewhere, for whatever reason... there are NO COINCIDENCES in this world.

-------------------------------------------

Last month I went out for dinner with some of the other parents in my son's high school graduating class. The scotch, beer, and wine flowed... and we were telling war stories about speaking in public. My buddy topped my story of having to make presentations to the Board at BlueStone Capital when I worked for them in the late 1990's in New York... A couple of times a year the board would assemble... consisting of, among others, 2 Noble Laureates and 1 former soft core porn star... Patricia Kluge, billionaire divorce of Paul Kluge, media titan. Speaking intelligently enough for Laureates while still communicating well enough to the MONEY (Ms. Kluge... BlueStone was just another of her terrible investments) behind the firm would have been a terribly intimidating occasion had I been mature enough to realize that I was completely FOS. Since I was young and arrogant enough, I managed to muddle through... then my buddy tells me HIS story. He was invited to speak to the graduating class at one of Harvard's professional schools... when he gets there, he finds there are 3 speakers: a name brand billionaire, the previous year's Noble Prize Winner in one of the real sciences (not like the economic and peace prizes ... something that can actually be measured) and him. Talk about stage fright. Any time you think you've got a f***ed up situation on your hands... there is always somebody wading through deeper doodoo...

I forgot about our drunken conversation until today's report that the former Mrs. Kluge is now bankrupt. Money is a slippery M.F. It is hard to come by and really easy to be rid of... particularly for people that think that they are somehow special, or who have no business in the shark tank. I remember watching my former senior partners milking this poor, retarded billionaire. It was just disgusting. A couple of times a year she would come to our offices and we would wine and dine her (on her dime)... We had 5th Avenue offices and marble floors and mahogany & teak conference tables... and every department - besides mine; my area printed money, but when I demanded to be compensated I was told the firm was losing money - bled money from every orifice... I wonder if they are willing to help her out now. Just kidding. I feel the need to rinse my mouth out after mentioning the name of that enterprise.

Modesty AND honesty are the best policy.

Americans Weary of War?

2011-06-23T04:52:00.000-07:00

The Philadelphia Inquirer had this to say this morning on the War in Af-Stan.

The writer made the incredible leap that Americans are "War Weary".

Really? I hope so. But weary of which War? The 10 year old war in Af-Stan? The 7 year old War in Iraq? The 40 YEAR OLD War on Drugs? The 50 YEAR OLD WAR between the sexes?

WTF happened to us? We seem to have forgotten how to cook good food, make love, and drink wine. To enjoy the seasons of our lives and revel in the buoyant surge of just being alive, rejecting that philosophy and instead tuning in to watch Nancy Grace bite the heads off of chickens and Gloria Alred display the latest victim of some "evil doer's" sexual conquest (I always wondered where the Male equivalent of Gloria has been hiding - after all, there are no shortage of gold digging, money grubbing, leaches among the fairer sex... marrying for money, divorcing for money... or divorcing for a lack of money... he could set up shop in Boca Raton... the supply of "Material Girls" is simply endless there... not a set of natural boobs in the place... Wait. That's not manipulation, is it?). We have forgotten ourselves and our humanity and have filled our prisons to overflowing with non-violent drug users... and have taken leave of our senses by rejecting the health and beauty of youth for an extra 50 pounds of body weight kept cool in an Air-Conditioned mirage of Television "Media Rooms", Barco loungers, and anti-depressents.

It is a complicated equation that landed us here: Vietnam x Gloria Steinem ÷ Billy Graham √ Jesse Jackson ∑ Charles Manson to the 3rd power of the prison/industrial, marriage/divorce, educational/student loan Industrial Complexes.... or something like that. The other side of the = sign contains even more bizarre data - far too disparate to recount here.

(Now, the only sensible people in the West when it comes to enjoying the fruit of our existence are under attack from Maureen Dowd & Co. I pray that the French and the othe Southern European nations do not crumble before the onslaught of the "The Angst of Empty Beds and Empty Wombs" (that quote is my own, and I place it in quotations as it is the title of a long essay I am writing). Anything for a perceived political gain, eh Maureen?)

America's "Make War, not Love" culture has put billions into the pockets of weapons manufacturers, Law Enforcement and Prison Budgets, Lawyers of all persuasions, Politicians, and a cadre of other miscreants... while most of our wineries are going bust. Clearly, something is wrong with that equation... what's that you say? I mentioned wine twice? Mai Oui! I like wine! (and great food, and great sex... what kind American am I?)

Are Americans really ready to Make Love not War? Not with Gloria Alred on duty.

NAZI Coward Police Officer

2011-06-22T18:12:00.001-07:00

This is not America. Yet another case of government agents SWORN to uphold and defend the U.S. Constitution... and then trampling on the spirit and letter of our founding document.

I pray that this officer's career is finished. Assaulting citizens under "color of authority" should result in a hefty prison sentence and a felony conviction. He is nothing but a coward and a piece of sh#!

The various State legislatures and the Courts had better wrap their collective minds around the new reality - cameras are EVERYWHERE.

Wars Cost Money?

2011-06-21T19:18:00.001-07:00

Wow.

"Sagging economy draws attention to War spending"? No F***ing Duh.

I gotta tell you how disappointing I found this... some how it was OK to kill innocent people with drone missiles and get American teenagers killed and maimed... but its not OK because war costs money?

I swear that it tastes like somebody just sh#! in my mouth.

"The First Casualty of War is Truth"

2011-06-20T06:17:00.000-07:00

The EMU is unwinding, with Greece its first jettison.

The 20th Century will eventually be viewed as the Century of social/fiscal experimentation... with the conclusion being something we adults knew all along - there is no such thing as something for nothing. NOTHING is free, and anything free is NOTHING worth having. Unfortunately, this won't stop people in the future from believing in something for nothing or stopping others from trying to take advantage of people by promising them something for nothing.

I had a nice conversation with Stu Staniford of earlywarn.blogspot.com the other day. I share his view that a Greeek contagion slow down could spread to the other PIIGS... and drop European demand for Oil to its knees (it is my sense that that will be the time to buy Oil).

But I think the Greek thing is small potatoes when compared to the international Corn Crop and Demand picture. In fact, a powerful recession in Europe might be helpful in taking pressure off of Food prices in addition to Oil prices.

Its all about the weather in the growing regions. World inventories of grains (outside of rice... rice is in pretty good shape at the moment) are at multi-decade lows. A weather catastrophe in a major producing region would be very, very interesting politically - even here in the U.S. If you think $5 gasoline is problematic for the 2012 election pols, try $10 per gallon milk.

Pre-Season Continues

2011-06-19T06:04:00.000-07:00

Still practicing... but am putting together a "recording studio" in the farm basement... and with some equipment that should be here shortly, I hope to improve my game. (Libertarian commentary).

The End of Enriched Uranium Reactors?

2011-06-16T07:01:00.000-07:00

The situation in Japan's Fukushima provence is much worse than the world perceives.

The implications are mind boggling.

Dr Sawada says that the creation of nuclear fission generates radioactive materials for which there is simply no knowledge informing us how to dispose of the radioactive waste safely.

"Until we know how to safely dispose of the radioactive materials generated by nuclear plants, we should postpone these activities so as not to cause further harm to future generations," he explained. "To do otherwise is simply an immoral act, and that is my belief, both as a scientist and as a survivor of the Hiroshima atomic bombing."

Gundersen believes it will take experts at least ten years to design and implement the plan.

"So ten to 15 years from now maybe we can say the reactors have been dismantled, and in the meantime you wind up contaminating the water," Gundersen said. "We are already seeing Strontium [at] 250 times the allowable limits in the water table at Fukushima. Contaminated water tables are incredibly difficult to clean. So I think we will have a contaminated aquifer in the area of the Fukushima site for a long, long time to come."

Unfortunately, the history of nuclear disasters appears to back Gundersen's assessment.

"With Three Mile Island and Chernobyl, and now with Fukushima, you can pinpoint the exact day and time they started," he said, "But they never end."

Since nuclear "cleanups", including de-commissioning current nuclear plants is impossible at the moment... is there any reason to think that the situation will improve in the absence of fossil fuels? Keep in mind that nuclear waste is deadly for tens of thousands of years... and we have less than 100 years of fossil fuels left.

This is what happens when lawyers and Special Interest Groups (I have to rinse my mouth out every time I say those 3 words) run the most technologically advanced society in the world.

Gary Johson, Greece, Oil

2011-06-15T18:14:00.000-07:00

In case you missed it, here is the link to Governor Gary Johnson's viral response to the Republican "debate". I must say, the Libertarian/Constitutionalist view point would seem ascendent. His views on abortion (government out of the equation, including government funding), Medicare (back to the states before it destroys the Feds), well, not so much on immigration..., Energy (free market not government)

Here is a link to my webcast rant on the War on Drugs and prison/industrial complex. Its 15 minutes. With practice, I will get the hang of it...

-----------------------------------------

The sell off in equities and Oil today was blamed in the media on Greece. I will reserve judgment on that... I increased shorts and cut longs... my sense remains that one big deflationary wave is in the cards... weather or not this is it I cannot say... but when it comes, you don't want to stand in front of the avalanche, and you want to be there to pick up Oil if/when that comes to pass.

Libertarian Animal Talk Radio

2011-06-14T05:44:00.000-07:00

I have been threatening to produce a Libertarian/Constitutionalist Talk Radio Show for some time. Yesterday, a friend of mine held my feet to the fire and had me step up to a microphone - completely unprepared and sick as a dog - for a rant. This is what came out.

The media is chock full of nuts from both sides of a failed argument. I am going to take a run at this; first as a webcast series and then (with any luck) on brokered broadcast radio.

I will post my stuff here and at my other blog "Libertariananimal.blogspot.com".

Feel free to critique away, my email is libertariananimal (at) gmail (d0t) com

----------------------------------------

Don't know how many of you caught this. A Miami Beach police officer pointed a gun at an innocent bystander for filming a police shooting. This is serious stuff; the kind of stuff that can lead to civil unrest and entire cities being burned to the ground. Having goose-stepping-NAZI-garbed thugs threatening to KILL (that's what pointing a gun at somebody's head is... a threat to kill) for having the temerity and audacity to witness and record a government worker is not going to lead anywhere else. I have lived in South Florida for most of my adult life and I am AT LEAST as terrified of the cops as I am the criminals. And Miami Beach? That city will never see a nickel of my money. That city's government has lost its humanity.

Here is one of the videos. You can google more for yourself.

BTW... a gun was found in the car. Maybe the driver DID threaten a police officer with it. In that case, the police MAY have been justified (and maybe they were not... it has been reported that 4 innocent bystanders were wounded). Or, given the police department in question... maybe the gun materialized in the deceased's car after the fact. I will leave that to Internal Affairs, although I have little faith in them, either. Like I said: The answer for thinking people is to boycott this city. Starve them of the resources needed to continue this insanity. Unfortunately, the risk that NON-thinking people will take matters into their own hands is very, very real.

"Weiner Denial"

2011-06-12T08:57:00.000-07:00

I am especially enjoying the "Three Ring Circus" Washington has devolved into regarding the Weiner "scandal"!!!!!

ROLF!!!!! LMAQ!!!!! F-ING LMAO!!! LOLOLOLOLOLOLOLOLOLOLOL!!!!!

Sorry. That got away from me. The Dems want a man to resign from Congress for NOT HAVING AN AFFAIR? (OK, the writer in the link is a bit over the top regarding impeaching GWB... some of the other points are very well made.)

I am amused because I am watching a group of so-called adults, every one of them has either committed one of more of the following):

Had phone sex, used pornography for "personal reasons", engaged in extra-marital physical contact (which is worse as far as cheating? Kissing someone who is not your spouse or phone sex without physical contact with someone who is not your spouse), or something far, far more significant - EVERY F***ING ONE OF THEM... this goes for the press folks covering this, the politicians themselves, and the hypocrites back home.

For a Christian nation, it seems to me most Americans missed one of the most significant tenants of that belief system issued during the Sermon on the Mount: "Do not judge others, lest you be judged". I believe He was speaking about such things... venal rather than mortal sin... even a secular guy like me can be pretty sure this does not rise to the level of mortal sin...

America the FOS!!!

Obama's re-election bid, Israel, and Saudi Arabia

2011-06-12T06:55:00.000-07:00

The Kingdom of Saudi Arabia has announced plans to "increase production". Perhaps this is factual. Perhaps KSA will simply spend down inventories. We will need more data and time to determine what is actually occurring.

I have been noodling the Administration's handling of Israel of late.... and my deeply suspicious nature can't help but put it all together this way:

Obama realizes that he has little chance of capturing the votes of pro-Israel conservatives and Libertarians (like me), and little risk of losing the American Liberal/Jewish vote. Ergo, he has little risk in taking a less than pro-Israeli position in the "peace process" (read: border negotiations). The Administration now has something with which to bargain with the Saudi's... after all, the Saudi establishment is on pins and needles over the Arab Spring thing... Obama offers to give KSA something with which they can use to placate their masses, and the KSA tries to help Obama by releasing more Oil in effort to put pressure on Oil prices (shades of Reagan and KSA and the USSR) , who would have a tough time getting re-elected if gasoline is north of $4 per gallon, with zero chance at $5 per gallon - particularly given the demographic train wreck facing the Left (after all, who IS the Left? Pro-abortion feminists, gays, beta-thru-delta males et al that quite simply don't have enough children to carry on their socio/economic/political legacy.... one look at California is all you need... hispanics are overwhelmingly Catholic and pro-Life/family, and they are going to DOMINATE California as well as all of the other border states.... like I always say: those who breed, succeed... they also get to write all of the history books).

For those that would deny this... your explanation is that your guy is dumb... I assure you, he is not... if I were working as one of his strategists, doing anything and everything to keep gasoline prices down until after the election would be job #1. This more than a plausible explanation of Obama's handling of Israel.

Corn Crop at Risk

2011-06-10T05:45:00.000-07:00

The USDA, and everybody else, has downgraded the U.S. corn crop.

Inventories were already in horrible shape. In the past, I made the assertion that since so much of the corn crop - and corn is the basis for the poultry, egg, dairy, and meat supply in the U.S. as the system is presently constructed - goes for ethanol that there was little or no chance of a sudden onset food shortage. Perhaps. Then again, perhaps not.

Corn cannot be manufactured. Either it is there at the end of the harvest, or it is not. Yes, we could cut back on ethanol production and divert that material to food production... but the fact is that most of these "brewer's grains" (the material left over after fermenting corn into ethanol) DO MAKE IT back to the feed market... it is not simply "fuel or feed", although the energy in the distilled ethanol certainly came from those grains and is not available in the remaining feedstuffs. Ergo, the supposed "slack" I envisioned isn't there to the magnitude I had suggested. The fact is is that consumption has outstripped production for most of the years in the past decade... it is factual and accurate to say that the U.S. population is at the mercy of the weather for each individual crop from now on, and the weather is simply not cooperating of late.

I would have no idea how to how to assign risk or probability to the issue, but it would seem that the risk is much higher than my previous assessment.

A partial solution will possibly be in the unwinding of the geographical concentration of meat, egg, and milk production... in short, localization would seem to offer some measure of solution, much as it is done in much of the world, even industrialized nations.

--------------------------------------------

Given the media's fascination with our political leader's lack of self-control... I found this article fascinating. I love empirical data. One thing none of the studies appeared to have measured was the other side of the equation: How would the subjects respond if the total volume of tempting input was lowered? Is it relative deprivation? Or total?

Since "I've been rich and I've been poor"... I can confidently say that the stress associated with being poor is, to my mind, accurately recounted in the article.
---------------------------------------------

Oil in much of the world is near $120 per barrel. Libya's supply as been missing for 6 months. Shouldn't that spare capacity everybody speaks of have shown up by now? If it does, Oil prices will fall. If it does not... look for prices to trade from $100 to $150 for Brent, and $90 to $135 for WTI. With Nat Gas futures out on the curve firming, things are looking nothing but good for the Oil patch.

-------------------------------------------

While I DESPISE the politics of Anthony Weiner, and I don't think much of his decision making, I DO THINK that whether or not he remains seated in the House of Representatives is up to his constituents - not the Democratic Party Establishment, the Media, The Feminists, the Religious Right, etc... America has MANY, MANY cultures... I was born and raised in Metro New York City... people there might just feel differently about just how serious Weiner's transgressions were than people from rural Tennessee.

But look ahead, folks... pretty soon, the media is going to corner some politician over his sex life... and the Pol is going to respond: "Yea? So?"

Hopefully that will be the end of this B.S.

OPEC

2011-06-08T11:55:00.000-07:00

OPEC has decided to leave production quota's unchanged.

Well, whoopty-freaking-do.

OPEC doesn't matter anymore. Only Saudi Arabia matters. OPEC needs to appear to matter a little longer, and for whatever reason, that seems to be OK with KSA. What was OPEC going to do? Announce a 2 million barrel per day increase effective immediately? Then what? Wouldn't they actually have to deliver?

My bet is that there is little to no spare capacity, including KSA. I didn't say for sure... that's just what I think is the case, and I believe this because prices are high enough to encourage production from any and every quarter... forget WTI, Brent is almost $120. That is serious incentive. I am long again (actually more short puts than straight long, but I am long, too).

QE3 is not coming anytime soon... Oil production has little left to increase with... but there is certainly a great deal more $100 oil around than we thought in 2005 - 2008 as it turns out.

The Oil slog continues...

How the Social Conservatives and the Feminists MIGHT bring down the West

2011-06-07T12:07:00.000-07:00

I find it kind amusing, and hugely ironic, that I find myself coming to the rescue of 2 Leftist Jackasses in 1 week.

First, John Edwards... and now Anthony Weiner.

Sexual fidelity should be the ideal. Failing this ideal must not be judged too (or so) harshly.

Before you freak out on me... give me a minute and lend me an open (and un-hypocritical... I know what you have done) ear.

Let me start with my assertion. It is BEYOND un/non P.C. Here it is:

If the Social Conservatives and feminists persist in their criminalization, demonization, and voyeur like outing of sexual transgressions, the result will be that people will stop everything else that society considers positive long before they will stop having sex! Or thinking about sex, or asking members of the opposite sex, or tweeting about sex, or visiting porn sites to watch sex...

They will stop marrying, with all of that outcomes concomitant effects (take the African American population's issues - things like 75% of children being born to unwed mothers and 90% of African American children needing government food assistance at some point in during their childhood - and spread it around to the white/hispanic/asian American communities): They will stop forming committed families, stop having 4th of July BBQ's, stop saving for their children's college, and taking them to little league, etc... BEFORE they would let you force them into not having sex.

If you folks persist at outing people's transgressions... young people WILL RESPOND! (Old people, people over 40, don't grasp this... hey folks, we're done! Stick a fork in us! We are stuck where we are! The young are not). And they won't respond by changing human nature ONE F***ING BIT. They will respond to the OTHER side of the equation! They will not commit to a family unit! Rather than being humiliated and made a spectacle of (much like this generation's response to watching their contemporaries become devastated financially in divorce court) by this unbelievable technology we now have of watching everybody, all day, every day... the next generation will refuse to be drawn in! THEY WILL ARRANGE THEIR LIVES AS FREE AGENTS!!!!!!!!!!!!!

But they will have sex. And that means babies. And without committed, EVEN IF IMPERFECT, relationships by their parents that means multiple fathers for most mothers, mix and match families, often more grandparents than cousins, and the MAJORITY of children will grow up in America suffering from the same issues now plaguing the African-American minority.

The internet, smart phones, and video technology along with asinine political agendas are going to overwhelm us. In fact, I think they are going to destroy us if you jag-offs keep it up.

People ALWAYS respond. There are ALWAYS unintended consequences. For years now, women have been betraying their lovers and claiming victimhood; today a man rented a billboard to proclaim his ex aborted his child! You think these are unrelated? You have rocks in your head. Everybody is a victim. And everybody is entitled to shout the most personal information on the Internet (or in this case, a Billboard). We have Reality TV shows that follow cheating spouses and lovers! How much longer before we have a web site detailing your abortions? This does not belong in the public domain... but its impossible to stuff the shaving cream back in the can....

In your battle to scratch each other's eyes out you Social Conservatives and Feminist/Liberals might just bring down the house around the rest of us.

I beg you to stop what you are doing.

Wiener's Frank and Beans

2011-06-06T15:10:00.000-07:00

Dear Congressman Anthony Weiner:

I completely forgive you for the photo of your "frank and beans" on Twitter. If a picture of me with plumber's butt taken while I am out milking the cow makes its way onto the web, well, I hope you will forgive me, too.

Look, Congressman, I know the deal... when it comes to sex we are ALL completely full of sh#! You, too. No big deal. You see, I am a thinking man... and I think your policies suck! I think you are a schmuck! But I don't think its any of our business what pictures you send to who. I pray everyday that American's will stop this voyeur "gotcha" B.S..... but think about it, bro. At least half of this is sh#! is your side's fault. Anything for a vote. You guys are the folks that encouraged and pandered to the loonies over at the Church of Oprah. Yea, I know... The Right did the same stuff with those churches down south... the ones where the preacher rails against the "abomination" of homosexuality, and then leaves the service to get serviced by a male masseuse versed in the chapter and verse of the never ending happy ending.

I think its time we all came clean. Or dirty. Your love life is none of my business. You could start by reeling in your Feminazi's. The Right could reciprocate by tucking in their hypocrisies.... but its not going to happen. Nope. We have too large a chunk of the population believing in fairy tales and pixy dust, always insisting on being forgiven, never willing to forgive.

Sincerely yours,

He Who Lives In a Glass House (and who doesn't throw rocks because he had more fun than the law allows and people would hate him for it)

It Just Gets Deeper and Deeper

2011-06-06T08:10:00.000-07:00

"It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong." -- Thomas Sowell

---------------------------------------------------

Regular commenter and fellow curmudgeon (one of my highest compliments) Donal sent this link on the report from the Global Commission on Drug Policy to me recently:

I am sure many of you have seen it. Here is a link to the actual report.

Most thinking people feel that drug use, at the very least, should be decriminalized... so who is it, exactly, that doesn't want to stop accusing individuals of a crime, and arresting them (which often means slamming people's heads on car hoods or the pavement; or pointing guns at people and accidently shooting them.... does anybody besides me think that guns are worse for people than drugs?) and putting them in jail, for drug use?

Cui Bono (who benefits?)

Lawyers: The legal profession would be flat on its back in the absence of drug offenses (including driving while intoxicated, something I am very much in favor of using law enforcement to influence people to not do). For every big time securities lawyer in Manhattan, there are several dozen work-a-day lawyers throughout the country whose bread and butter is minor drug crime (and divorce law).

Law Enforcement: Our drug laws are the "gift that keeps on giving" to Law Enforcement and their budgets. Once someone is labeled a criminal, they find employment more and more difficult to find... almost ensuring their recidivism. While in the poke, these folks tend to congregate, forging lifetime connections us folks on the outside call "Gangs". Said gangs encourage their members to continue "the life", landing them in prison again and again... one of the unintended consequences of all of this is these people are unable to support their children, and these children grow up in poverty and abuse and anger, to replace their fathers as they themselves enter "criminal menopause". Hell of thing.

Corrections personnel: (No offense, tweel!) Over the past 25 years, California has built 25 new prisons and only 1 new college. Not that we need any more colleges... but something in that data point just jumps out at me.

Judges and Politicians: NO ONE becomes a judge or politician absent an incredible ego... my experience tells me that while people think politicians are the worst offender. I think that that is because they have not watched the nation's judiciary in action.

Organized Crime: The last thing these guys want or need is some nice little old lady growing marijuana next to her petunias. If drugs use was decriminalized the price of illicit drugs would simply implode, overnight. Organized crime would have to go back to prostitution and gambling. Oh, wait! Gambling has been pretty much been legalized... that would leave prostitution... and there's just not a lot of money there to support our nation's criminal network. (Of course, Law Enforcement can see where this is going, and they are defending their budgets with their own propaganda about human trafficking... and they will get some help, irrespective of the facts, the numbers, or truth itself, from that other SIG (that I detest but shall remain nameless) in this regard. That our politicians refuse to acknowledge the economic reality of this is crime in and of itself.

That these groups will be able to hold back the eventual legalization of drugs is extremely doubtful. In the meantime, they will kill as many non-violent drug users (hey, in the 20's Law Enforcement killed people for consuming alcohol!) as they can and collect as much salary and pension as they can. Just how many young lives need to snuffed out in a hail of gunfire from Law Enforcement before we stop this madness? I don't know, and am saddened that there has not been enough.

I am always extremely doubtful that our Creator would give any leeway on his "Thou Shalt Not Kill" to members of Law Enforcement in connection with these abusive SWAT team tactics that keep killing non-violent individuals involved with illicit drugs. I also think it highly likely that people will start to take matters, and revenge, into their own hands, and that this is exactly what this SIG wants. They need a crisis, or their budgets are going to get cut.

-------------------------------------------------------

Nothing much going on in the Oil Patch - for now. I expect that to change relatively soon.

Of Bastards and Cuckholds

2011-06-05T06:36:00.000-07:00

People that have sex will invariably become pregnant. Nature cares little for social niceties, legal bindings, and personal conveniences.

As Kathy so rightly points out in a comment in my previous post, it IS a much bigger deal when a child is born to an illicit affair. There is no question about that! If my wife came to me and said she was pregnant with another man's child, I might not remain married to her... but I definitely will not have the blood of that child on MY hands by encouraging her to abort the child.

Both Left and Right, Abortion supporters and foes... need to put their heads around the implications from the advancements in technology... i.e., Photos and commentary on the Internet to spread rumor and innuendo (worse when it is true) and DNA technology to remove all doubt of parentage.

I know this is a touchy subject... but please follow my line of reasoning:

If women and men are brought together they will have sex, irrespective of the time, place, or circumstance.

WHEN, not if, people have sex, pregnancies will result... irrespective of whether one is married, convenience, propriety, etc...

In this era, someone will ALWAYS try to make political hay from this. Feminists, the religious Right, etc... (it is not possible for me to heap enough scorn on these people. They are not just hypocrites... they are sub-human. The worst of the hypocrites? Hollywood and the Media. These people ALWAYS align with Feminist Left - except when the Feminists agenda affects THEM. How so? When Hollywood marries, which is not often, it is NEVER absent a pre-nup... in other words, they support the Women's Movement mandate of terrorist "family law"... except when it has to do with them.... "do as I say, not as I do"... BTW... I am a BIG BELIEVER in pre-nups as they take the government out of your marriage... and contrary to what some might believe.... these agreements have become enshrined in our jurisprudence, and are not often overturned - if ever. That was soooooo 1980's).

Regardless of said political hay, people will continue to have sex (does ANYBODY doubt this?). This is simply an unstoppable fact of our existence.

Therefore, they will continue to get pregnant.

That these children still deserve to live, irrespective of the circumstances of their birth, and that the birth should be allowed to take place and nature to take its course, should STILL be the view of those that respect the sanctity of life.

Supporters of the Pro-Life position should come to the rescue of Mr. Edwards and Mr. Schwarzenegger and their lovers for respecting the sanctity of Life. The sins of sex outside of marriage are venal, and are simply incomparable with the sin of destroying a human life (I use the word "sin" colloquially, as I tend toward the secular). The Pro-Abortion Feminists are welcome to grind at these individuals for embarrassing themselves - and more importantly to this group, their wives - as they see fit (I am a Libertarian; censorship is "not my bag, baby"), and; people like me are permitted to point out the inconsistencies and faults in their reasoning (and make glorious fun of their inability to reason. Its almost not fair, sort of like being in a duel with an unarmed opponent).

The spouses of the cheaters are free to decide whether or not to remain in the marriage, to live their life in perpetual rage or forgiveness as they so choose.

Life is so short... and it seems to me that these forces, the forces to control the reproductive outcomes of people, have been raging since time immemorial - and Nature continues to win the argument.

The idea that one can use FORCE - physical violence or the institutional violence of present day family law - to control the reproductive efforts of other people is inconstant at its base, and in the extreme. Really want a faithful spouse? You'll catch more flies with honey than vinegar... There is no such thing as a "carrot and a stick" when it comes to this subject. It is ALL "carrot". The "stick" simply does not work. Yet the Feminist agenda has been, and continues to be, ALL "STICK" - with all of the attendant outcomes I have mentioned.

Think about it! Is anybody terribly happy with the outcome? Then somewhere along the line we need to change the equation. In the same way that I reject the use of government force to enforce a ban on abortion, I reject the use of government force to maintain sexual fidelity. Sexual fidelity with your partner is something you must put a great deal of POSITIVE effort into - no amount of violence, physical or institutional, will answer. And when our efforts in this vein fails, punishment, or worse, revenge, will simply not satisfy. I cannot fathom why anyone would want to spend this beautiful yet very short life dwelling on how they might change these natural laws... but they do. (For better or worse, or just because it is... some people absolutely, positively have no reason to expect, and are in NO WAY deserving, of a faithful spouse. Think about that for a moment. There are plenty of circumstances where people are STUCK with lousy/crummy spouses... it is sooooooo easy to pontificate to these unfortunate souls, but for my part I refuse.)

I am merely examining this, and throwing the yellow flag for a foul against reason. There is no guarantee that the person you love now will always love and want you... or you them. There is absolutely NO DIFFERENCE between John Edwards cheating on his wife and a wife leaving/filing for divorce from a faithful husband. NONE. Each brought an outsider in in order to destroy their bond (by some miracle the Feminist/Left has convinced people that there is a difference). These are the circumstances of this Life. I simply reject the idea that any child conceived in this drama is any less entitled to Life than you or I. Ergo, I find the behavior of John and Arnold somewhat less reprehensible than members of the "Women's movement" seem to do.

Nobody is perfect... but Life IS good.

John Edwards cont

2011-06-04T19:46:00.000-07:00

In my first post of he series "Feminists vs the Cheaters", I made the assertion, still unchallenged by any rational Lefty, that the reason Edwards and Arnold were being shredded by the Feminist Left was not that they had had affairs... but because they and their lovers did not have abortions.

Elizabeth Edwards stood by her man, and rightly so, when he admitted to the affair. It was months later, when John Edwards' admitted to having fathered a child, that his wife separated from him. I make no criticism of Mrs. Edwards. I am just laying down the time line.

A quote from OpenSecrets.org:

Edwards first acknowledged an extramarital affair with campaign videographer Rielle Hunter in the summer of 2008, months after he pulled out of the presidential race.

Then in January, after publicly denying it for months, Edwards confirmed that he is the father of Hunter’s young daughter, Quinn. Edwards and his wife Elizabeth, a breast cancer patient who stayed by her husband’s side when he originally acknowledged the affair, have since separated in the wake of this newest development.

Does ANYBODY out there want to counter my assertion that the problem here was not an affair... the problem was the child.

John Edwards and Arnold are no sleezier than Bill Clinton... although Clinton was more judicious in his choice of sexual acts... and certainly not in the same league as Ted Kennedy who f***ing drowned a young woman in a car accident and did not bother to attempt to rescue her... the Feminist Left had no problem doing business with him for decades after that incident... apparently drowning a young woman is somehow less of an offense to these sh*t heads than fathering a child...

Please find a feminist to counter my assertions, or better yet, to have the courage to confirm them.

Let me do some math for you on this subject.

Do you have any idea of how many No Tell/Motel rooms there are in this country? Any idea how many adult female (and male) sex workers are plying their trade in the U.S.? How many clandestine trysts took place last night? By mathematical necessity, there are an awful lot "cheaters" out there. Are they all sleezeballs? Should we fund an "adultery squad" in every Law Enforcement precinct?

Does anybody read Freud anymore? Anybody wonder what the driving force behind building huge companies, and real estate empires, and recording platinum albums, or making $20 million per film as a movie star, or becoming Governor/Senator/President? Anybody think these guys do this so that they can limit their sexual opportunities? Really!!??

Men are already refusing to marry, or a marrying very, very late - and with a 95 page pre-nup agreement - and even then they divorcing early. What is it the Feminists/Left hope to accomplish here with John Edwards? In their grab for power they seem oblivious to the very serious unintended consequences of their actions. The marriage market is not a vacuum! For 30 or 40 years, men watched - in horror - the mangling of married men in divorce court... and long before the end of that period the pre-nuptial agreement comes into being. Is that a coincidence? These agreements essentially wound the clock back to the late 19th century as far as the non-asset/non-earning (or lesser earning) spouse was concerned... did the Feminist/Left see that one coming? Nope. Then men decided not to marry at all... What was "gained" by Feminist/Left in the radicalization of family law since the 1960's was literally destroyed in just a few short years by the marketplace... today's women are worse off financially than their mothers and grandmothers, with 3X more of today's 40+ women having ZERO family or husband to turn to than 50 years ago... tell me again how this helped women?

The Edwards thing might go right over the heads of a lot of men... but not those in the economic establishment. They are not as dumb as they look. These men WILL respond. These forces are not released in a vacuum. Nothing will be gained... actually much more will be lost.

And another nail will have been driven into the coffin of the body politic and the Constitution.

Indictment of John Edwards is an OUTRAGE

2011-06-03T11:12:00.000-07:00

I despise most of the policies of John Edwards.

Having read the law and the facts, I can only can conclude that his indictment is a f***ing OUTRAGE! He has pissed off TPTB in the Feminist wing of the Democrats. They want their pound of flesh.

I PRAY he does not take a plea... he has a better than 50/50 shot at dismissal at trial, and a 99% chance of reversal of any conviction on appeal.

The sad fact is is that this is a lynching.

This is yet again another GLARING example of how our Grand Jury system is irretrievably broken. As the saying goes, a prosecutor could get a ham sandwich indicted... so what protection is being offered to the targets of investigations? How can you be nation of laws if the only way to avail yourself of their protection is if you have $5 million for legal fees?

This is an outrage.

Moving Right Along...

2011-06-02T19:52:00.000-07:00

When things get slow in the world, along with energy, markets, and the politics of these 2 I can't help but point out the stunning level of propaganda and the sordid attempts by Special Interest Groups to manipulate and influence the public. It simply boggles the mind. Well, if you think about it does.

Wall Street, Banks, the Military, Feminists, Ethnic Groups, Trade Groups, Municipal Employees, Religious Organizations, the Clergy, Law Enforcement... the freaking list of propagandists seems endless.

No article having to do with government funding, payrolls, or contracts makes its way into the Main Stream Media without sponsorship. Never. Nunca. Not under any circumstance. They are bought and paid for, sometimes with blood money.

There are no sacred cows here at the American Energy Crisis. I am not running for office, so I don't need your vote. I don't need a job, so I don't have to worry about human resources searching me out.

I have been noodling a few things... stay tuned... in the mean time, here's George Carlin at his best.

Feminists - cont.

2011-06-02T06:53:00.000-07:00

Please read this excellent article in Newsweek: The Failure of Feminism.

Now, look at the date the article was written! 1990!!

Given our benefit of hindsight, most of us recognize that the author had only the benefit of half of our experience with the Feminist experiment.

Societies the world over came up with systems for ensuring the successful launch of the next generation. Western Feminism attacked those systems as being incompatible with equality.

Fair enough. Now, shouldn't they need to show the systems that they envisioned would be an improvement for all concerned?

Can any of you point to a system(s) for raising children that has been proposed by the Women's movement/Feminists to replace those that evolved over the eons?

Look, I get it. These individuals felt the system did not serve their needs... but clearly, given their own peculiar demographic, they were NOT considering an offspring generation as one of their needs... it seems that their solution was either a childless competition with men in the Corporate and Government world (the current women on the Supreme Court, and there are 3, are all childless!) or an only child born at an age (the mother's age) advanced enough to require scientific input after excreting in petri dishes... and sans a man in the house.

And for the millions of women who did marry... from my perspective, the "Movement" absolved them of ALL responsibility in keeping their home intact. For those that doubt this:

What, exactly, are the requirements of a woman in a marriage? I often hear "to be loving". OK WTF does that mean, again EXACTLY? We can see clearly from the Arnold/John Edwards case that men are expected to be sexually faithful to their wives... what are the responsibilities of their wives? Do they have any? Look, show me a bed hopping spouse of either sex... and I will show you a contra party that is simply not taking care of business at home - and "not taking care of business" comes in many, many formats.

Do people have a responsibility to their spouse to reasonably maintain their physical attractiveness? Do we have a responsibility to keep it fun? To fulfill our partner's needs? And do this while working and providing for the children? I think we do, and well, we all know with little doubt what will happen if an individual's needs for food, shelter, sexual gratification et al are not met... the individual will do what needs to be done. For some reason Americans just can't seem to come to grips with this in open dialogue (with the exception of Chris Rock... warning, very UN-pc... yet in his own vulgar way, h captures the truth of it... if you deny this, why does it seem to ring so true to his audience?).

Lastly, and this one is really gonna hurt...

Do we have a responsibility to forgive? To accept human frailties and the various shades of a very, very grey, as opposed to a black and white, world?

Absof**kinlutely.

Is there anything in the Feminists dogma that would lead you to believe the world is anything but black and white, right and wrong... and that they are always right?

Not a f***ing thing.

For better or worse, none of their positions matter in the long run. No one, the Shakers, the Feminists, whoever... can win a multi-generational political battle by not breeding. The danger is that they take a society down in between here and said long run.

The Feminists have left us with 2, rather unpleasant "accomplishments" (their words, not mine) - Divorce (and now a generation of men refusing to marry) and abortion "rights". I say this to the unrepentant Feminist:

In your search for Truth and Beauty in the world... I respectfully submit that neither will be found in a divorce lawyer's office nor the sterile, heartless and cruel environment of an abortion clinic. It is axiomatic that Life is better than Death, Love better than Hate, and Peace of Mind and Heart a damn sight better than a life dedicated to an anger that can never be satiated.

Yours for a better world,

Greg

Memorial Day

2011-05-31T05:02:00.000-07:00

I am interrupting my series for Memorial Day.

I want to speak for someone who cannot speak. Someone I barely remember, because he died when I was 11 years old. His name was Ronny Manca, and he was killed in Vietnam on February 25, 1972.

Ronny was close friends with 2 of my older brothers. He and his family went to the same church our family did, and attended the same very small parochial school my siblings and I attended. My brothers had been friends with him since he was 5 years old; they met in kindergarten. My father was friendly with his dad, who owned the local auto parts store. Unfortunately, what I remember of Ronny most was the news of his death. I came home from school, and brother number 3 was in the kitchen with my mother and they were both crying. He had just given our mother the news.

Ronny did not wish to go to Viet Nam. He did not wish to fight or serve in the military. He was drafted. From what I understand, he considered going to Canada. His father was a WWII vet, and perhaps his family convinced him to "do his time". Ronny lasted some 75 days or so in Vietnam. Not a lot of time.

When I hear people talk about those that "made the ultimate sacrifice" or "laid down their life for their country" I can't help but think of Ronny. Ronny wanted to ride motorcycles, make out with his girl friend down at the Hudson river swimming spot my brothers and I used to frequent, and drink beer. He was a young man in the full bloom of youth. At least these are my limited recollections... I don't think he was in any way interested in making the ultimate sacrifice and laying down his life in a rice paddy on the other side of the world after being shot by farmer/soldiers infuriated that he was walking armed in their backyard. If it weren't for the asinine policy of ego-maniac politicians, Ronny would be in his 60's now, his children in their 30's, and his grandchildren in grade school. But it was not to be. They made the ultimate sacrifice, too.

I get ill when I see the Memorial Day hoopla. The silly exclamations that I read on the Web about thanking the "men and women that gave their lives"... which really should read "were individuals killed while serving in hostilities to protect the elite's economic interests". Always it is in the abstract - BULLSH#!. Getting killed is never abstract - it is very personal. I never see someone say "I thank Ronny Manca for making the ultimate sacrifice". I get ill because it is all "survivor bias" (I think the saying "to the victors go the spoils" needs revision... perhaps it should read "to the survivors go the spoils"). The dead are not here to defend themselves, only the survivors. The dead are not here to tell you their side of the story. My bet is that if they could they would be furious at the people that took everything from them, and furious at the people that were only too willing to benefit from the actions and circumstances that took their lives. That led them to die a violent death in pain and agony far from the comfort of their homes and families. They didn't want to make the ultimate sacrifice! They wanted money for college, or to get away from poverty, or a pay check, or to see the world. I don't think being killed ever entered the equation.

As I remember it, after Ronny was killed, his family ceased celebrating many of the holidays and occasions that Americans and Christians mark throughout the year. I don't know that this went on for the rest of their lives. I hope that they had found some level of peace. I had heard that Ronny's father passed away a couple of years ago.

Ronny Manca wanted to live the life that was given to him. My bet is that the very young men serving in combat zones as I write this want to live the life that was given to them, too.

Feminists vs the Cheaters - cont.

2011-05-28T07:20:00.000-07:00

In any political battle, it helps to have a boogey man, the way despotic regimes in the MENA have Israel (NAZI Germany disposed of any need for truth instead depending on propaganda to recreate "truth"). From there its a simple play book. Everything is the boogey man's fault. Everything. Whatever slight you feel, any shortcoming you have, any error in judgment on your part... all of it was caused by the "boogey man".

(In America we have entitlement AND military spending that is killing us... but the Left believes its the military and the Right believes its all caused by entitlement spending. Like I said, each side only needs a little bit of truth to mix in with their serving of Horse Sh#!.)

In building your boogey man, you only need (barely) enough facts. Most of it is lies, and you mix in enough truth to convince those that want to believe. This is not to say that women's suffrage or the civil right's movement did not have very, very legitimate grievances. They certainly did. What I am suggesting is that all SIG's outlive their originally stated purpose, often becoming the very pariah they so lugubriously decried.

The boogey man the Feminist/Left has created are crazed, if slightly daft and simple religious fanatics. Oh, there are a small cadre of loonies in that camp... but there is no data that I am aware of that supports the contention of a significant population within the electorate aligning with this faction. In fact, the F/L tends to lump anyone that does not support abortion as opposing "reproductive rights", and therefore a religious lunatic.

WTF??!! Men can spend decades in prison for groping a woman, married men can be convicted of a crime and sent to prison for forcing their wives to engage in sex. Access to birth control is near universal. What right to not reproduce is it that the "boogey man" is imposing on anyone? Not a one. When someone buys a car, they accept that they have increased the probabilities of dying in a car accident than if they did not own a car. When people have heterosexual sexual intercourse they are accepting the increased probability of becoming pregnant... that pretty much describes how the "boogey man" see's this. And since that is certainly somewhat reasonable, the F/L needs to infuse something more dastardly into the collective personality of the "boogey man". "They hunt. They love guns. They kill and eat animals. They believe in G-d." Oh, my! How awful. Of course the F/L are superior.... after all they only kill babies.

Inconsistancies do not help the "boogey man". But while there are simply too man people that support killing for economic interests (war) and capital punishment and police killings over drugs, there are millions of folks that (like me) reject all of that, and empire too. MILLIONS. Call us Libertarians or Constitutionalists (I suppose there is a difference, but I think that is really splitting hairs)... I prefer to label this group "thinking people"... the point is that not every pro-Life American is a nose picking war monger salivating to see a public hanging.

Take this Red and Blue state donkey dust you hear tell about. That may work when describing presidential elections, but the fact is that most states are purple, with only a minority of the county level starkly Red or Blue. The U.S. is purple, and world various shades of grey... but not for the Borderline Personalities dominating the "women's movement", a movement dominated by the progeny of the elite.

Let us look at some of the outcomes of said "movement".

Nearly 1/3 of female college graduates will not have children, with 20% of the general population leaving their childbearing years childless. I know this turns on the Zero Population Growth folks, but only because they have not given it much thought.

Highly educated women not breeding means that most (do the math... its the number of children born, not a binary code of "yes" or "no" to parenthood) of the next generation of Americans will be raised in a home absent an ethos of education. Further, education was supposed to increase well being and financial security... but with the exception of those with technical and professional advance degrees (physicians, dentists, lawyers, engineers) this hasn't exactly panned out.

It means MILLIONS upon MILLIONS of elderly women without families to interact with and care for them in their old age. It means millions and millions of immature middle aged adults, too... nothing matures you like having to be the being the adult... No matter how many articles like this are planted in the media to encourage people to join in the childless existence... this is not an acceptable path. What is the writer suggesting? That this is really a viable society-wide aspiration? Or is the writer merely recruiting and providing support for her constituency?

Special Interest Groups ("SIG's") do not wind down and go out of business once their stated founding intentions are accomplished. Nope, their goals continue to morph because the monster has to be fed... and all SIG's are monsters...

More soon....

Feminists and Cheaters - cont.

2011-05-26T08:13:00.000-07:00

Continued from previous post...

As I said in my last post... if you place men and women in proximity of each other under ANY CONDITIONS - battlefield, college, corporate office, boardroom, restaurant/bar, hayloft - many, many, many of these individuals will engage in sexual congress.

"It takes 2 to Tango", or so goes the saying... so how did it always get to be the man's fault? Biology, and brilliant marketing on the part of Leftist/Feminist movement. BRILLIANT. We all know the biology, I'll spare you the discussion... suffice it to say that men and women use each other to advance their interests/agenda in line with what natural law intended - men are attracted to young women (those that were attracted to post-menopausal women over the eons did not pass on their genes), women are attracted to the things they deem desirable.... we all know that this just is what it is. The Left/Feminists have assiduously (or with blind luck) cultivated a system of discrediting those they view as impeding their agenda.

I have written before of the Liberal/Feminist birth/dearth baby bust. Leftist/Feminists do not breed more feminists; from my observation, a higher percentage are gay than is represented in the general population, and they are invariably college educated, which results in decreased fertility (see link below for the effect that has on baby production), ergo they must recruit Leftist/Feminists... and they do so at the top colleges and universities.

Now stay with me, this is going to get tricky... The Liberal/Feminist agenda has dominated college campuses, politics, and corporations for the past 30 years. Our largest corporations almost exclusively recruit from the 50 most competitive colleges and universities. It is FAR EASIER to fill a slot at a corporation or government agency than founding and growing a successful business! While the vast majority of millionaires in America are family men that started rather unglamorous businesses with the help, support, and cooperation of the wives (look, I am not religious and do not support marriage/family life for religious reasons... I don't have to, the data overwhelmingly supports the idea that people live longer, happier, more satisfying lives as members of a family), it is the corporations that wield the power. I assert that corporations are NOT RUN by their managers and executives; I assert that the corporation RUNS the managers and the executives. VERY little talent is required for the vast majority of these folks. One "Steve Jobs" can keep a great many execs and managers busy. The other area that requires very little talent but yields enormous power is the Law. And Finance. Medicine requires somewhat more brains and talent than the previous 2, it seems... though we don't seem to be getting much.

(Here's a fun fact to know... in 1980 only 10% of American women exited their childbearing years childless. Today, that number is 20%. For those with a bachelor's degree the percentage rises to roughly 1/3. I have seen no scientific data covering women with graduate degrees, but my personal observation tells me that the number likely approaches (or exceeds) 50%, with the vast majority of those with children having an only child. I will wind this data point into where I am going with this series. Bear with me... but on a side note - if you want grandchildren, best to pay close attention!)

The Feminists have figured this out! We don't hear Feminists clamoring for more women to start small businesses and become self-made millionaires... the easiest path to power is within the corporation... since nearly ANY nitwit can run a near monopoly (how hard is it to manage Coke's franchise? Really? How about Clorox? Let me take some of those Coke execs and put them in a local printing, pest control, or contracting business... we'll see how f***ing smart they are...) the Feminists (quite correctly and brilliantly) promote those positions for women in order to gain power.

OK, so you are in a blood match for a political position for which there is no empirical way to judge who is better than whom... what better way to demolish the competition than by creating sexual traps that will ruin the them? Because of the vagaries of natural law, a great many more middle aged male execs get caught in the honey trap than middle aged women (per capita; I recognize that there are more male executives.... but this roughly reflects the numbers of math, science, and engineering grads) execs... and, presto! Leverage.

(And contrary to what you might think.... I have nothing but respect (the kind of respect one pays to an enemy in the midst of war) for people that play chess this well!)

For every man out there sexually waltzing around there is a woman dancing just as fast but backwards and in high heels. The Leftist/Feminist agenda made this a crime on the man's part... and a victim out of the woman! Mankind has been shagging each other since the dawn of time... but now it is been made into a political opportunity.

If the Feminist agenda was only to bring equality to women, wouldn't they concentrate on the area that creates the most wealthy people (starting small businesses)? This ain't about equality. Its about power.

Gotta hop... more soon.

The Feminists vs the Cheaters

2011-05-25T09:58:00.001-07:00

This series of posts is going to examine the hyper-politically incorrect reality of sex between American men and women. Don’t read it if that bothers you, or if you only are interested in energy and the markets. I am going to pull no punches nor sugar coat anything. Rational co-examination of the facts and opinions are welcome. Any ad hominem attacks will be deleted.

---------------------------

Arnold had a "love" child, as did presidential candidate John Edwards. Governor Spitzer of New York probably (hopefully) wore a condom with his lover.

Notice the rage within the feminist community at Edwards and Schwarzenegger that seems to be lacking when directed at other politicians who had affairs?

Know why that is?

Because these men and their lovers did not abort their un-born children.

That’s it. Nothing more to it than that (well, other than that elitist feminists feel that the mothers of these children are beneath them). See, the feminists will look the other way if a pro-abortion pol has an affair... Ted Kennedy, Bill Clinton et al.... but don't let that baby be born!

Think I am out of my mind? Only because you have not pondered this issue. Follow my reasoning. When people have sex, pregnancy often results. There have been unlimited numbers of famous and powerful politicians having affairs with nubile young women.

And these are the only 2 pregnancies? Out of thousands of affairs?

Bullshit. There were LOTS of pregnancies. Rather than face up to the responsibilities of the result of their affairs, the other guys were complicit in the murder of their own children.

And what is our response? The U.S. is going to indict John Edwards (and for all I know he violated federal campaign laws).

No one has come to Governor Schwarzenegger’s rescue. Governor Spitizer had Harvard Law Professor Alan Dershowitz come to his aid, with Dershowitz telling American’s to “grow up”. Liberals give other liberals cover, especially if they "do the right thing" and abort the baby!

Allow me to tell you my vision of the truth: If men and women are in close proximity for any length of time they will have sex. The feminists will tell you that this is about powerful men and their subordinates… someone should remind them that correlation does not imply causation. There is no “blame”, dear feminists. Nature, G-d, the Universe… however you prefer to define this has a simple set of rules. These are the rules:

If men and women are brought together, they will have sex. It does not matter who is in charge.

If men and women have sex, it will absolutely, positively result in pregnancies.

The vast majority of pregnancies of the rich and powerful and famous have been terminated. Why? Because of the fear these men have of their wives and divorce, and the female electorate. A fear so powerful, these men are willing to be complicit in the murder of their own unborn child.

One of the unintended consequences of technology is that babies that would have been born because paternity identification was not perfectly certain are now being aborted. How screwy is that?

On the subject of “destroying a family”… how is a man having sex outside of a marriage worse than a woman filing for divorce because of “irreconcilable differences” when there are children involved? Is a lover more damaging to a family than a divorce lawyer? Is a lover more of a betrayal than a divorce lawyer? I am not terribly religious... but it seems to me that sex is a venal sin while abortion is somewhat more serious...

Sometimes I think I am the only normal person left.

More on this soon...

Israel is the ONLY democracy in the M.E.

2011-05-20T19:46:00.000-07:00

Israel is the ONLY democracy in the Middle East, and the only country in that region in which I would enjoy living.

Whatever kudos I handed President Obama from his decision making in the OBL/UBL strike have faded in my memory. I am once again disappointed by Mr. MTVPresident.

Israel has been a tremendous friend to the U.S. The U.S. needs Israel, and Israel needs to know that we stand with her. Peace must be made, and that cannot happen until Israel's enemies, and they are legion, acknowledge Israel's right to exist.

The people of Israel deserve the support of the West. It was the West that failed these people in their time of peril and it is the West that must endorse AND SUPPORT the legitimate right of the Jewish state to exist in peace. I would ask liberal Jews here in the U.S. to step up and press this administration to do the right thing... he's your guy and these are your people. To my conservative, libertarian and orthodox friends - Now is the time to let the administration and your members of Congress/Senate know that we are watching and that we support the Israeli people.

A Wider View - Part 3

2011-05-18T19:15:00.000-07:00

Where was I?

Oh yes, how most folks have gotten the Oil supply and pricing story wrong - so far.

See, "no battle plan survives contact with the enemy". In this case, I think a great many folks are going to pull their horns in right when they are going to be very, very right.

I am not terribly bullish on Oil prices in the near term, primarily because I foresee one final deflationary disaster that will create the greatest buying opportunity since Noah built hisself a boat... UNLESS something bad happens within the boundaries of the Kingdom of Saudi Arabia. Look, the U.S Federal Reserve forced a great deal of money into risk assets, and when the Fed begins its exit it is going to have the opposite effect, not to mention all of the emerging markets whose central banks have been printing like mad will have to stop printing and tighten liquidity, too. If this proves correct, then the deflationary wave will be dumbfounding/tidal in its magnitude. While the Fed has made me look dopey in the near term, I am going to bet big on my vision of the outcome. I know a great many people - the "shorts" and the "doomers" among them - that absolutely HATE Bernake & Co. Not me. I underestimated the capacity of the Fed, and missed a big opportunity. Oh, well. I didn't lose, I just didn't capture the opportunity. You gotta be able to forgive yourself and move on to the next trade. I remember a smart, older trader from my time at Laidlaw; he would say "don't get stuck in a rut on your thinking... keep thinking - and trade."

Too many people in the "Peak Oil discussion" universe get stuck on the price of Oil. Don't. If my deflationary wave comes to pass, it will wash Oil out with everything else - and that includes precious metals, grains (weather permitting), equities, maybe even bonds (got noodle that some more). We are getting a hint of things to come from housing and wages, neither of which are responding positively to the Fed's inflationary call to buy risk assets. These aren't canary's in a coal mine; these are freaking Ostrich's.

I have been hanging onto to my view of that one last deflationary wave, and missed the trade on QE2. I forgive myself. Now what? Now the Fed does not have the political cover to do QE3, and by the time they do, the wave will be overwhelming (my friend, the Mad Scientist, thinks QE3 is in the cards. Maybe. Even probably. But not until the water is coming over the bow, me thinks).

So what's this have to do with Oil supplies, politics, Matt Simmons, and Dan Yergin?

Simple. The emerging markets are going to continue to compete with the U.S. and the West for a declining volume of exported oil even as the deflationary wave (brought about by the withdrawal of liquidity in the same developing nations that are competing for said Oil) makes the production of marginal, unconventional oil very, very unprofitable. This, and I reserve the right to change my mind on a dime, will create the entry point for Oil that most of us missed in 2009. Actually, the entry point for equities, real estate, and other commodities, too.

BTW... I was kidding when I said "Simple". Also, shorting is for pros and big boys. Don't try it at home unless you know what you are doing and what risks you are taking.

A WIder View - cont...

2011-05-17T20:10:00.000-07:00

Before I get on with my rant, this article on why insider trading should be legalized appeared on the front page of Marketwatch.com. Laws regarding drugs, alcohol, tobacco, insider trading, etc... are ill considered and rarely, if ever, in the interests of The People. That is, The People that don't enjoy a good "perp walk". (Nancy Grace and her merry band of fat jag-offs are only too happy to ditch the presumption of innocence... and Habeas Corpus while they are at it). Speaking of which... how embarrassing to our Constitution, particularly the 4th Amendment, is the "prep walk"? Its not just embarrassing - it is a disgrace. An action unworthy of our role in the world. No wonder Ruddy Giuliani invented it; Giuliani might be the worst excuse for a human being here in America since gold ol' Senator Joe McCarthy.

Ok. On to my rant.

Oil supply has proved particularly vexing to the Cassandra's, while Oil price predicting have been unkind, in the extreme, to the Cornucopians. As it turns out Matt Simmons was right about prices for all the wrong reasons, and Dan Yergin was wrong about Oil prices for all of the right reasons... or as we say on Wall Street: "A great call - with nothing to show for it".

Yes, Oil prices are up (and lately down) back around $100 per barrel, and are almost entirely at this lofty price due to the US$'s decline relative to the rest of the currencies AND the political situation in the MENA countries, with just a little "Peak Oil Light" thrown in to screw up the parade. Oil exports might well have peaked, but ethanol, Nat Gas, and the Tar Sands have certainly lessened the blow.

See, that's the thing about the End of the Oil Age or even the End of the World. Industrious folks will try to profit from it. Maybe even call it off (for a while, anyway). They will convert corn into ethanol, build nuclear plants, maybe poison all of Canada to convert the Tar Sands if necessary.

I have mentioned before how much I am impressed with the handling of the financial crisis by the American Fed and Treasury. I am equally impressed by the world Oil industry's ability to squeeze production from non-conventional sources. Think things are bad? If it were not for the motivated actions of these 2 groups they would have been infinitely worse. Yes, I know gasoline is $4 or so, but that's a great deal better than the $6 I was thinking 2 or 3 years ago would be likely at this time.

As it turns out, the world doesn't want to end without a fight. It took 12 years for Oil to go from $10 glut with increasing production to $100 with relatively flat production. It might be another 10 or 15 years of price spikes and collapse before we know what's what with production. And that might be a good thing... because its all about the rate of change.

Everything is relative, and everybody's gotten this thing wrong. While the Cassandra's thought the world would end in 2010 and the Cornucopians said it was all tin-foil-hat B.S. my bet is most can't admit their own errors in calculation. The trend is your friend, and the trend suggests a long, drawn out slug-fest. Said slug-fest will likely eliminate the middle, but not the have's and have not's.

to be continued -

Meanwhile, Back at the Ranch...

2011-05-15T18:29:00.000-07:00

Spring chores on the family homestead have been overwhelming my blogging efforts this week... before I get off into my rant I want to give a plug to the folks at scythesupply.com

I have been experimenting with ways to bring fresh grass, clovers, and weeds to my pigs (and goats when I confine them early in breeding season). I have tried raking up after my lawn mower, a rotary line cutter, an old-fashioned weed whacker, and now a scythe. The scythe wins hands down. In about 10 minutes of quiet and peaceful scything I have a wheelbarrow full of freshly cut green matter that I deliver to my hogs and chickens. I do this because I want all of my livestock to be as "grass fed" as possible. This is easy with the goats and cattle - just leave them out on the pasture - but not so much with confined poultry and hogs. However, with a scythe this process has now become infinitely more pleasant.

I am reading an excellent book, "Cold Mountain" by Charles Frasier (it was made into a good movie, too... but the book is simply excellent). I highly recommend it. In it there is a great deal about the need for knowledge when providing for oneself, and in particular a passage about how without ground working equipments - plows & harrows - nothing much beyond a kitchen garden is possible. I can tell you that that is quite accurate. Besides a huge vegetable garden we have several acres of corn, beans, and sunflowers planted for feed for next winter, as well as for corn flower - wheat will be next years project - that would not have been possible without equipment. If you are serious about homesteading, its either tractor or animal pulled ground breaking and clearing equipment... or failure.

---------------------------------------------

Now to my rant... I will get back to my "wider view" oil post soon, but some things have been bugging me lately... specifically the idea that our Federal Law Enforcement and Military personnel are currently being deployed to protect American Freedoms.

What a bunch of Bull Sh#!!

I love being an American. I love the idea of being able to vote for our president AND my local sheriff. I love our Constitution (with all of its wrinkles and warts from the stain of slavery). I F**king HATE when I am told that the above mentioned forces are being used to protect me and my rights. I have nothing but respect for our military personnel - but they are being placed in harm's way to PROTECT THE ECONOMIC INTERESTS of America's elite. They are not being used to protect The People and serve the Constitution. Iraq??!! Are you f***ing kidding me??!! And Af-stan? Perhaps somewhat more supportable than Iraq (and then again, perhaps not)... but now that we have figured out how to maul al-Queda at will, isn't it time to bring our military personnel home? And now that every federal official with a pulse knows that America's oil importing days are extremely numbered... under what pretext are we still fighting over Oil? So that America's elite can maintain their illusory wealth for a couple extra years.

Bin Laden deserved what he got. What about the group of men killed in Af-stan 8 years ago by drone strike because the U.S. thought one of the men was Bin Laden? Nobody even remembers this missile strike (except the dead men's family and friends). Turns out they were a completely innocent group of human beings going about their lives... Where is the outrage about their murder? Is collateral killing in "The War or Terrorism" somehow higher minded than those that killed on 9/11? NAFC. Worse, it gives incentive to a whole new generation of angry men bent on revenge to harm Americans (which is what a certain part of the establishment wants, no doubt, so that they can keep their outrageous budget's funded).

America's commander-in-chief(s) have not used American military forces to "support and defend the Constitution" in generations. That's the oath sworn by U.S. military personnel, and "preserve, protect and defend" for the president. Law enforcement officials take a similar oath. Where, exactly, in the Constitution is it written that these people have been empowered to protect the economic interests of The Corporations? Of The Pensions? I want to know, because that's what our military personnel have been killing and dying for.

Why are my fellow Americans only too willing to send young people off to war and prison? We have forgotten how to exercise our right to nullify stupid f***ing laws while serving on juries, as well as to nullify the budgets of the very agencies that cause what the CIA colloquially refers to as "Blow Back" (pissing off people to the point where they are willing to swap themselves for an opportunity to mass murder innocent Americans).

Why?

Because our economic system is all about enslaving people. We have given up our Constitutional rights in this plague we call the War on Drugs. Said war hasn't been won, nor even a single battle, and now our prisons overflowith. The establishment fears that addictions would keep the masses from the appointed rounds at the f***ing salt mines (well, that and we love our prison industrial complex... how else can a lawyer make several million dollars per trial unless the sentences are brutal?); its not your health and well being that concerns them.

Look at this asinine waste of resources that is known in the media as this generation's great "insider trading" scandal. What a f***ing joke. Do you know when these laws regarding insider trading were enacted? Back when we were still using rotary phones (if you are not over 50 you might not even know what that is). In the age of instant communication why not deregulate the flow of "insider information" both civilly and criminally? There would be NO WAY to gain the upper hand in that environment - the data would be out on the Web on thousands of blogs, wire services, news aggregators, etc... instantly. That would make things INFINITELY fairer than they are now.... but fair IS NOT what the establishment wants... what they want is to put people in prison and maintain their budgets at the SEC, FBI, and the rest of the alphabet jagoffs running around D.C. You think the U.S. Attorney's office in New York is filled with high-minded Dudley DoRights? Bull Sh#! That office is full of future defense attorney's interested in polishing up the resume and gaining a little experience before working for the other side - and the 7 figure per trial compensation. You think these guys want SANITY in the rule of law? NAFC. What they want are looooooong prison sentences and arcane rules so that the guys in the poke will be willing to write some serious checks to get off the hook.

Anyway, so these Dudley DoRight's have harpooned their whale. And nobody gives a second thought that this is silly and scientifically unsupportable law, and that the system just spent ten's of millions of $$ enforcing something that would not exist if it were handled otherwise, but handled as is will go on forever more. We have hungry children and illiterate adults as far as the eye can see, and an energy crunch looming that will make most of it moot... but the Mob wants blood.

When in Rome...

A Wider View

2011-05-09T08:12:00.000-07:00

Let us take a 25 year view. One generation or so. Let us put ourselves right in the middle, here, in 2011.

12.5 years ago Oil was going down like a rock in a pond, Nasdaq was screaming to the stars, everybody had a job and everybody expected to get rich by buying a house, leasing a Mercedes, and starting a dot.com. You were nobody without an MBA from a prestigious institution (unless you were a Billionaire... even self made multi-Millionaires - doctors, lawyers, small business owners - were second class citizens).

Over the next 5 years, until 2005 or so, the stock market tanked, then rebounded, and the housing market went ballistic. While on very few people's radar screen Oil was making its way higher. Not alarming at first - until it crossed the magical $50 line and Goldman's Murti called for a super spike - maybe as high as $105. A little known brokerage firm in Boca Raton, FL, with yours truly's name on the door tried to tell this story to the individual investor. We made a good living peddling the story... but most people thought I was out of my freaking tree (this is 2000, mind you... many of my old staff read here regularly... most of them thought I was out of my freaking tree, too. It was a hard sell. The Euro was in the crapper, Oil was, too, and the US$ was ascendent. Then came Ken Deffeyes' book "Hubbert's Peak" which gave us some cover, but not enough to make sales.)

From 2005 - 2008 the battle was on. The Fed tried to expand credit, destroyed the financial system, and Oil took flight from $50 to nearly $150. The fight raged between the Cornucopian's and the Cassandra's. The price collapse in late 2008 and 2009 gave the Cassandra's the upper hand, only to be TKO'd by $100 plus Oil in 2011. Over the 2005-2011 housing crashed, banks crashed, precious metals flew, Oil seesawed ever higher (average yearly price, that is), and the U.S. worker earnings crumbled.

Pretty much what the Cassandra's were saying would happen in a fractional reserve banking system given the end of Oil supply growth. Not exactly, and not in line with the more vocal fringe doomers... but close enough for government work.

With me so far?

Oil and the housing crash were coincidental... sort of... for the most part. Oil's price rise certainly put a crimp on extending the housing bubble, but these were 2, very independent events.

Taking that into consideration, I think the end of steady growth in the supply of Oil has had a tremendously negative effect on the U.S. economy over the past 6 years. It is very likely (to me a near certainty, but you never know) the next 12.5 years will see a dramatic decline in the supply of Oil to the industrial West, and the U.S. in particular. Perhaps within 15 - 20 years Oil exports, and therefor imports, will cease altogether.

Looking back on what happened to the U.S. economy when Oil supplies ceased growing and comparing that scenario to one in which Oil supplies are cut by 50% or 60% (imports into the U.S. cease other than those from Canada) is going to take some amount of abstract thinking.... and a willingness to refuse to suffer a failure of imagination.

Markets will tell you all you really need to know IF you pay attention and do not take in only the data that supports your prejudices. Silver and Gold seemed to be predicting some type of currency crisis... yet homesteads, livestock, gardening equipment, "prepper" gear... were all going begging. There is no doubt in my mind that the world's currency system will absolutely, positively blow up at some point... but that point is likely quite a few years out; and you will be able to know when it is real - when consumer goods are in short supply and family farms have become quite dear, the currency crisis is upon us.

That this will unfold at some point I have little doubt... that it will happen in the near future is almost completely up to the politics of the MENA - something that is difficult, if not impossible, to call AND profit from.

-to be continued...

P.S. I pick up my bee hives tomorrow morning. I am very excited about this new addition to the farm.

US$ could rally - BIG (especially against some ridiculously valued currencies)

2011-05-05T19:15:00.000-07:00

The Mad Scientist has been beating the drum, along with Mike Shedlock, about the coming disaster in Australia. I had put off addressing that issue... until today.

Australia's currency, stock markets, and banking system are likely to go through what the U.S. went thru 3 years ago. I have thought their currency to be bubbling for sometime... but I don't short things that are still going up - they have to break first, then I short. I think The Australian $ is doomed, the Canadian $ is over-priced, as is the Yen and the Euro... but the best opportunity to score big is betting against Australia.

Downunder is about to Slip under...

You heard it here first.... sort of. Those guys have been jumping up and down about the Aussie impending implosion... my money says it is here, now, and this is the moment - today's events were the breaking point.

---------------------------------------------------

Al-Queda planned Rail Attack?

ROFL!! What Rail system?

----------------------------------------------

The Baltic Dry Goods Index has fallen completely out of bed. Not a good sign for commodities or commodity currencies. Nor a good sign for industrial growth in China.

----------------------------------------------

Propaganda is everywhere... read this Drek on why you should step in front of a freight train regarding silver. To tired to pull it apart here, but the writer is worse than ill informed... he's FOS. Silver might go higher soon for all I know (though I doubt it... once a bubble gets popped its hard to put humpty dumpty together... even Silver), but not for any of the reasons this jerk lists.

------------------------------

Its all about Oil, and it ain't getting any easier to read the tea leaves. Except the Aussie $$. Party over.

So Much for Commodity Inflation

2011-05-05T11:01:00.000-07:00

Well, the bell has been rung, and its hard to un-ring a bell... That's the end of commodity inflation... and since that's the only inflation we had... well, there is no inflation.

Oil, Silver, Markets in General

2011-05-05T07:25:00.000-07:00

The bloom is off the rose in commodities for a while... Oil might be the only commodity to hold up reasonably well, and then again it might not. I am not long Oil yet, but I do like buying the drillers and Oil services when they are getting beaten up. While AVERAGE Oil prices may have ceiling to them, I think that the ceiling is MUCH, MUCH higher in the budgets of the producers for spending on production and exploration... at least that has been the case for the past 5 years where the Oil service industry revenue has DOUBLED but the equites have not budged.

In short, for investors (as opposed to traders) I think energy equities will outperform Oil for a while. And one day, Nat Gas will outperform them all - and I am working on which day.

The easy money in shorting silver has been made... I still think it is going down, but there can be painful rallies if you are caught short. Best to short rallies and miss opportunities, me thinks. On Gold - I have no opinion.

Remember, there is a big difference between the short and long term. I made that critical mistake and missed one of the biggest rallies ever in the equity markets. There is also a big difference between a "trader" and an "investor". Traders buy "green" and sell "red"; investors buy "low" and sell "high" - there are several world's of difference between the 2.

Short and Long Term

2011-05-03T11:26:00.000-07:00

There is a big difference between the short and the long term. And it helps to have definitions.

Long term ALL paper currencies are doomed. DOOMED. 10 - 20 years out, I think the US$ and the rest of the major currencies will be FUBAR. What's that have to do with 6 months from now?

There are battles, and then there's the war. In chess we have a open/beginning game, mid game, and an end game.

There is "survive" and then there is flourish. There is a great deal one can do to help themselves flourish before the end game.

Like... sell silver and use the down payment for a homestead. Someone who bought just 1000 ounces of Silver back a few years ago when I first started writing about it would now have enough to put 20% down on a homestead and have enough left over to provision it. They would also have the luxury of time to adjust to their new life style (because it takes some getting used to).

I bought my homestead with the proceeds of my Oil trades over the last decade. I PUT my money where my mouth is. I DO think that the homestead was the right investment (though I would like more land and a bigger house). And still I think commodities will break big at some point before they become the only investment worth owning (and not just precious metals.... and of course, I could be wrong).

Silver has become dear, and homesteads are cheap.

----------------------------------------------

On my pet peeve against sports related injuries....

The report is in on Dave Duerson's brain: "moderately advanced" CTE (Chronic Traumatic Encephalopathy) is the diagnosis. If you have children, I hope you will reconsider sports like football and boxing (guilty on both accounts). Heck, not reconsider... I hope will NOT consider these sports whatsoever. Going through life with undiagnosed brain damage from something you did as a kid is just unacceptable. We can't change the past, whatever you did is done... but we don't have to do this to our children... and no amount of denial from the NFL or the UFC or the Nevada bBoxing Commission is going to put the shaving cream back in the can.

The end of the Oil Age is upon us. Sports injuries (WTF??) have NO PLACE in your child's future.

------------------------------------------------

I wonder what the feminist/abortion rights folks make of this unintended consequence.

------------------------------------------------

I added to certain energy equities today... but I am flat Oil.

Great Call, Mr. President!

2011-05-03T08:03:00.000-07:00

After further reflection, I am impressed with the political courage of President Obama.

The president made what many are describing as a "very gutsy call" in sending U.S. Navy SEALS by helicopter to kill or capture Osama bin-Laden.

I have to agree - and I have a new found respect for our Commander-in-Chief's decision making. Helicopters are notoriously dangerous equipment, and given President Carter's experience in the Iran Hostage Crisis, one could see how the president might rely on long range missiles or drones. But killing innocent people to avenge the murder (or bring justice, whatever term of art you will) of innocent people, which is what missiles do, seems altogether unacceptable.

It WAS a gutsy call, and we must give credit where credit is due. A president is first and foremost our Commander-in-Chief, and this president just proved he has the stuff to make very tough decisions. This could have easily gone very wrong, and the president would have had to answer for that at the polls in what will be a bruising election.

Also, I mentioned that there will be unintended consequences - such as ambush of American service personnel in Af-stan. To be fair to the president, I do not think that this "gutsy call" has been lost on a great many other adversaries - open or otherwise. Having a president knocking around the White House with some steel in his spine is worth more than a couple of fancy weapon's systems.

Hail to the Chief!!

Commodities best streak since 1997

2011-05-02T14:02:00.000-07:00

Commodities have had their best streak since 1997 vs financial assets.

Markets zig and zag, they do not zig and zig. Its best to buy low and/or sell high. If you miss buying low, you can always short them high. When one sided markets begin to break... it usually ain't over in a day.

U.S. $

2011-05-02T09:17:00.000-07:00

The U.S. $$ has been going down like a rock in a pond. The price decline versus the other major currencies since 2010 has been unprecedented.

Markets, including currencies, do not zig and zig and zig... they zig and zag. I don't know exactly when the US$ will find a bid, but I do think it will happen relatively soon. The End of the World is not upon us - yet.

----------------------------------------------

Just because I think the US$ and the world are not coming to and end doesn't mean that I think our system won't grind average "Joe" into the muck and mire - I do think that. My response is is to not be "Joe"; its still good to be King, however you define that, and its more fun, too.

--------------------------------------------

Osama Bin-Laden Dead. Even with my rock hard belief in the sanctity of Life, I am having a hard time feeling that this killing was wrong. I did not lose any friends or family on 9/11 but I knew many of the people that died in the Towers from my time working in the Securities industry. I hope that their families, and all of those killed by al-Queda and like minded organizations experience a bit of closure in this.

Of course, there will be consequences; unintended consequences. Killing will always beget more killing. The execution of Bin Laden will result in the ambush of American service personnel in Afghanistan. Somewhere in America, there is a mother who may be celebrating Osama's death... only to receive a knock on her door from a military chaplain and a Major General... and an American flag.

Still, my sense is that Bin Laden had worn out his welcome on this earth... and to our intelligence agencies and the military's credit, a message has been delivered, Israeli style, to those who would commit mass murder of innocents. Rot in H***.

"I've never wished a man dead, but I have read some obituaries with great pleasure." - Mark Twain

Yours for a better world,

Greg

Silver Opens Down 10%

2011-05-01T17:12:00.001-07:00

Silver just opened in the futures market down 10%.

Bubble over. Sell rallies.

"Known Unknown's"

2011-05-01T13:17:00.000-07:00

Calling markets is tough enough. Calling them when the rules and policies change everyday is impossible.

Market's that are head up, including those in bubbles, will keep going up until they stop going up (no sh#!, eh?). Still, this commodity bull's day's are numbered. One, competition from stocks and bonds is going to be steep. Two, the end of the bond buying means the end of that supply of money into that market place. Three, the Fed & the Treasury and the various central banks have proven beyond a doubt that will do ANYTHING to achieve short term policy objectives (think about that for a moment). Four, grains led the market up, and good weather will change that in ways I am not poetic enough to describe.... and bad weather will have the same effect, in the opposite direction. (Making bets on global weather has never been a great way to make a living.) Notice I said grains led the market up - NOT OIL. And Gold is not a reasonable comparison as Gold, unlike Oil and Corn, is not consumed.... only produced. FIVE, and MOST IMPORTANT: There is no inflation in real estate or wages. The market for homes and jobs DWARF'S the commodity pits. If there were any threat of inflation, you would see it in homes and wages.

(BTW... on food inflation? Do you know what would happen to food prices if poor, working class, and middle class American's were incentivized - either positively (a PR campaign) or negatively (denied food stamps) - to produce food? From city gardens to back yard chickens to neighborhood dairies this increased margin of production would/could crush food prices, farmers, Ag companies, etc... think I exaggerate? Any gardener knows I am not. A small plot will yield ALL of the veggies and chicken/hog feed for a month or 2. No, not all year... but think of what would happen to prices in this very inelastic market when food supply increases by 1/12 (the summer harvest)! There is a reason that for THOUSANDS of years Agriculture has not been a profitable business for commerce... and that is because there are no barriers to entry for people to grow their own food... and each and every tomato or potato grown at home eats into the commodity price of the commercially produced tomato or potato.)

I know many people here HATE Bernake, but I gotta take my hat off to him. When I hear him state that "the inflation we are experiencing now is transitory" I believe that he is likely to be very correct. The only place we are seeing price inflation of any sort is in commodities. Some commodities are VERY price inelastic - a small move in supply/demand makes for BIG price moves.

Translating Bernake's "transitory" comments leads me to believe that he is more concerned with deflation (of credit) than inflation, and if correct that dovetails nicely with the Fed's and the U.S. Treasury's seeming unconcern regarding inflation and the US$ (and of course, they could be wrong).

So... here it is... EITHER; Real Estate & wage inflation rises to meet commodities, OR; Commodity prices fall to meet Real Estate and wage price deflation.

EXCEPT!

For Oil.

Oil remains the f*&^*%ing fly in the G** DA** ointment in all of this.

Let me give you an example (of several things, including that journalists continue to prove incapable of independent, abstract thought). Read this article.

Got that? See any conundrum's there? How can the market support higher prices of all of these industrially produced consumer goods with item #9 - falling or stagnant wages? By deficit spending AND/OR increased energy prices/declining energy supplies (and or some combination of the 2). In fact, shouldn't this be the exact outcome of declining energy inputs? After all, declining energy inputs leads to production of less (per capita) consumer goods and lower productivity?

(BTW... Let us define productivity. If you measure it using currency/GDP you will be misled as far as production applies to the USE OF ENERGY. If one used the total weight of goods produced multiplied by the total distance those goods were transported one would have a decent "apples to apples" comparison of productivity, or production, than using GDP (which is not adjusted for currency and a bizzilion other variables that have nothing to do with how much energy was brought to bear)).

(More on that productivity comparison soon. I have been noodling it for a while and I want to open that up for a proper discussion.)

We are back to "its all about Oil" once again. The financial system is functioning reasonably, and likely will until the derivative bomb goes off... and that will probably be brought about by Oil...

One could go looney thinking this through...

Bond Market and a refusal to buy my physical Silver

2011-04-30T06:20:00.000-07:00

I have a decent amount of physical gold and silver. Yesterday, I took 300 ounces to the local coin dealer - you know, the guy that seems to be in every downtown these days - here in Lebanon, TN. There was a big sign:

"WE BUY GOLD AND SILVER!"

So I walk in with a 100 oz. bar, and 200 Silver rounds. I wait 45 minutes, very courteously and patiently I might add, while the porprietor was in the back room talking on the phone. What I didn't know was that he did not want to buy my metal going into the weekend at these prices, so he was calling other dealers.

Guess what?

I left his establishment with the silver I walked in with. None of these people wanted to buy my metal.

This is NOT indicative of anything good for silver. (I think).

-------------------------------------------------

The corporate bond market does not appear too concerned with inflation, if I may make use of understatement. Bonds rally while physical silver dealers refuse to buy? That just does no compute.

Stock Market

2011-04-28T13:55:00.000-07:00

If you take out the financial sector, the stock market has recovered all of its losses - and then some.

You can HATE and gnash your TEETH... but I gotta take my hat of to a number of very unpopular fellows. Yea, their activities caused some negative consequences... but nothing like what we were looking at just 2 years ago.

The financial and political system has survived - and it almost didn't. From here on in it is all about the rate of change - even the end of the Oil age can be handled if it happens slowly enough.

That means that clothes will need to washed, teeth brushed, and the commodity bubble will have to be unwound (just look at the consumer staples sector - it is above its 2008 high and I think will lead the market higher). The end of resource constraints this is not - this is merely the "pause the refreshes", one that, I THINK, will provide the entry point for commodities that stocks gave back in 2009. The unwinding will likely take things down further in that space than you thought possible - do NOT try to catch a falling knife, me thinks.

Some things that have surprised me:

1. $125 Oil did not kill retail (forget WTI... it doesn't really exist... average world Oil prices are in the mid $120's).
2. Interest rates around the world did not take off (and I doubt they will).
3. Technology companies still command outrageous multiples.
4. Silver/Gold ratio as low as it is.
5. That the U.S. government could get away with its vast budget deficits for so long (there is NO INFLATION in housing or wages - what you are seeing in commodities is a mirage. A GOOD mirage if you are long, but a mirage non the less.

What I think it means:

A: Commodities futures contracts will need to be unwound. This will be the story of this decade.
B: High quality corporate bonds and Treasuries will do well to well enough.
C: High dividend sectors like consumer staples and utilities will do well to well enough.
D: Commodity equites are going to get murdered.
E: Real Estate will not be coming back anytime soon.

What we don't know: How Oil will be rationed amongst the industrialized powers. How the markets will react to the end of QE2.

What I think I am going to do: Buy the dips in consumer staples, utilities, and other big dividend names. Sell any rally in the commodity equities. Sell dips, too. Buy quality bonds, sell commercial real estate. Buy residential apartments and mobile home parks. Sell precious metals. Even Gold. There will be a better entry point.

It is all back to Oil. The housing crisis has happened. It is not going to get better, but not a whole lot worse for CREDIT reasons. That does not mean that an energy shock cannot make it much, much worse.

It is all about Oil. And unless there is another political crisis in a big oil exporter, my bet is Oil will come in with the rest of the commodity complex.

As always, I reserve the right to change my mind on a freaking dime.

Crowded trades always end - and badly

2011-04-27T17:18:00.000-07:00

A couple of posts back I mentioned that commodities were, to my mind, as bubbly as NASDAQ in 2000... today, I have been joined by some rather famous company:

Jeremy Grantham also thinks that commodities are WAAAAY overdone.

As I said before... This does not mean that commodities cannot go higher... but when ALL of the speculators (as opposed to commercial users) are on one side of a trade, when they all try to fit going out the exit door... they can run you over.

You heard it here first (and Grantham second). I will absolutely take positions on the short side, but only after my screen is red. When the sell off in commodities comes, and it is coming, it is going to wipe the floor with speculator and investor alike. Think of how much money the short's made in Oil after Oil peaked in 2008. Play this right and you can score - BIG.

You heard it here first.

----------------------------------------------------

Commodities are expensive, and believe it or not some equities are cheap. But not most commodity equities, even if they have incredibly low P/E ratios.

The U.S. financial system nearly extinguished itself 3 years ago. While reviving it has caused the US$ to crash, it has been revived and the US$ has already crashed. The reason to own some things has past. Meals will have to be served, healthcare will still need to be provided, people will still need a place to live (and that does not mean a McMansion). My bet is consumer companies (like McDonald's, Coke, P & G), Healthcare (think United Health and Pfizer), Utilities (electric is going to be very important after the age of Oil), and residential apartment properties (rather than farmland, that was the trade 5 years ago) will pick up from the commodity companies... and yes I do think we will devolve into a developing world level of living... but those countries have plenty of people who do very well for themselves... every environment has winners and losers, might as well be on the right side of that trade... in the long run we're all dead anyhow.

--------------------------------------------------

There is a big difference between a homestead and investment farmland. Rentable Farmland has risen smartly over the past 5 years, homesteads have been crushed with housing. I absolutely, positively believe that a homestead should be the first investment in a family's portfolio (let's define a homestead: a house on at least 5, very usable acres complete with out-buildings for the purpose of gardens and small livestock). If you don't have a family, you don't need a homestead. The other primary investment? A small business. A SMART small business. One that requires skills, has been in demand forever (plumbers, dentists, masons, etc... come to mind. Dog grooming? Not so much). I know a bunch of people... and I don't know anybody that was able to rely on employment, rather than entering commerce, as a means of providing for themselves for the long term. Well, that's not true... outside of public servants, that is.

Saudi Arabia, Peak Oil, Prepping Vs Homestead/ELM-ing

2011-04-24T20:04:00.000-07:00

Post has been edited:

Saudi Arabia just said to the world:

"Don't look at me!"

The EIA and IEA prognostications on future world oil production will have to be ratcheted down once again... their "wishcasting" just got scrubbed.

OK. Who cares? The Peaknics were dead right/spot on. Now what?

The "what" is is that you have been put on clear notice that this is the time to spend your money doing all of the things you always wanted to do, and to take the remaining money and buy residential apartment properties, energy equities, utilities, and high dividend consumer product companies... but most importantly a homestead in low tax local and a local, productive, small business.

The world will not come to an end, but there will be winners and losers in all of this. There will be damn few "good jobs". There will always be commerce and small business. The U.S. will survive, but with a quite a bit of gnashing of teeth by a great many people. Don't let it be you.

There will absolutely, positively be a food crisis here in the U.S. sometime in the next 25 years, probably in the next 10. Will it be next year? I doubt it. Yes, food prices are rising - that's a good thing. It will encourage people to make cuts and adaptions, and to increase efforts to produce. Crop failure will likely not be the problem. The problem will be scarcity. As in a glass of water has no value on the beach at the Great Lakes; a glass of water in Death Valley on the other hand... The food supply's liability is transportation and weather. The weather problem has ALWAYS been there - we have just been lucky - but the transportation problem is going to come to a head in the very near future. Then we shall see what kind of redundancy we have in the system.

Like I said... life will go on. For those of us over 50, you are where you are and you are going to live with your life's vagaries, decisions, and luck (or lack thereof). This is all about the future, and the future belongs to young people. That said, it is hard to find a greater volume of denial than in young adults... these poor people are going into debt for college, spending tens of thousands of $$ on new cars, engagement rings, weddings, honeymoons, travel... even though they are still in debt for their college "education". They could have developed a marketable skill, got married at the Justice of the Peace for $15, and bought a homestead debt free with the money they spent on the ring, wedding party, and honeymoon... and why not? Because of their own ingrained denial helped in large part by the media.

I often hear the feminists rightfully criticizing the advertising and marketing industry for creating problems (in women's minds) that do not exist and then coming up with "solutions" and in the process destroying the mental health and emotional well being of their customers. I watch my Amish neighbors have a multitude of children, teach them skills, help them financially buy a homestead... and get going with their lives... all without the assistance of makeup, hair dye, breast implants, high heels, engagement rings (or jewelry of any type), or expensive weddings. Think about it for a minute. These Amish folks at the age of 25 own a homestead debt free, have kids, and have begun to save money to help their kids do the same (America's 25-year-old-"kids" are broke/in debt, living home with their parents, spending precious hours watching TV and playing video games). How do they do it? How much does it cost to buy 10 acres in rural Tennessee or Kentucky? $30,000? They construct the house themselves, no wiring to worry about, and minimal plumbing, all cabinetry and fixtures are made by the man of the house (remember, he actually has skills).... so what does a 1,200 square foot house cost? $60,000? With barns, livestock, equipment and a well, all in its $120,000. From what I gather, Amish men have this in the bank when they marry at 21 because they have been working since 13, and since they don't waste a great deal of money on marijuana, beer, rock concerts, hookers... all they need do is make barely over minimum wage to achieve this.

On the other hand... There is a non-Amish family farm across the street from ours... and we have been friendly with their kids ever since we moved here and they were little. The farm had been in the family for generations and had all the stuff you'd think you would need - a barn, a well with a hand pump, fruit bushes and trees, gardens and pastures. The place is falling down, the grounds are unkept, weeds choke the garden and the pastures... they have 4 kids and receive food assistance (they aren't married). My wife brought them some "Easter bunny cup cakes" yesterday. Now mind you, I have been working diligently at my garden, fruit patches, and crops every hour that the sun is up for the past 6 weeks.... know what the man of the house was doing when my wife stopped by? Watching T.V. The place is in complete disrepair, they have room to grow food and keep livestock but instead opt for government food assistance ... and he is watching T.V... and receiving food assistance (yes, I am repeating myself...). Did I mention that the property is in foreclosure? For well over 100 years that property provided for that family... and then the government showed up to "help". The oldest, a young man of 20 or so, has been in and out of jail on numerous petty crimes.

And the hits keep coming.

Our systems, not system, are broken. Our financial system, our food system, our family system, our political system - all broken. But you don't have to participate in ANY broken and enslaving system if you don't want to. All you gotta do is not want to. Some young people are getting this and are putting off adulthood as their response. Don't, you will regret that strategy. Do reject all of the norms that will lead you into "a life long hell of debt and indecision". Because there are no norms anymore.

to be continued...

I use isolated groups as control groups, not because I intend to start wearing straw hats and eschew bathing during the week... I make no assertion nor have any opinion on the philosophies, religious beliefs, political views of my control group... only that they seem to be thriving and I want to know why. I assert that our culture has been eviscerated by the education establishment, the political establishment, the entertainment and media industry... as proof, I am discussing their reproductive history, debt levels, and age of attainment (homeownership, marriage, children), etc... when I said that the future belongs to the young, that's only the immediate future - today's young will age, too. The longer term future belongs to those that breed - "those who breed, succeed". And what is standing between today's young people and their future? Debt and/or a lack of savings/resources. There are only 2 ways to fix this: increase net income or cut expenses. There's no mystery here.

I have considered our system ad nauseum. We keep our future young couple in school until they are in their mid - twenties, on average... then we have them buy separate houses (big expense here), cars etc... (keep this in mind: Society NEEDS a new crop of human babies every day - PERIOD - and we have established cultural systems to see that this gets done (although the quality of childhood of these babies needs be considered, i.e. manufacturing less criminals would be nice)... I am merely dissecting that system... just observing it and making notes...) our well-educated marry late, often times not having children until well into their late 30's or 40's and even 50's. This was all done ostensibly so that these people could become established and provide a bette life for their progeny, right? OK, SHOW ME THE MONEY!! American's are NOT better off financially than their parents despite all of these efforts, or am I missing something? If that is true, and we want to know why... we gotta go back to the video tape. My favorite "video tape" in this circumstance is the individual's personal calendar AND their personal checkbooks/financial statements.

Now guess what we find? There, imbedded in all of the minutia of the details of our lives that most people do not look at is the freaking TRUTH of your life. How much gasoline one burned. How much money one spent on drugs in college. How many days one slept in rather than "making the donuts". How many years one "wasted" (from a resources point of view) before actually settling down to the business of Life. Nobody wants to look at this stuff... it is just too painful. They'd rather blame a politician!

And what are the big expenses that prevented our future young couple from achieving some level of financial security? Tuition expenses (not just debt!), automobiles, living separately, engagement rings, weddings, and honeymoons, and divorce - the education/industrial complex and the marriage/divorce industrial complex. Remove that complex from the lives of the young middle and working class people and - Viola! Financial security.

This is not to say that society does not need educated professionals! It certainly does. My bet is that that could be accomplished FAR more efficiently if reconstructed under a vigorous cost/benefit analysis. Until that time, you will have to do that cost/benefit analysis for your own circumstances, because the end of the Oil Age is upon us! The debate is over. Peak Oil won. Now what? Whatever that "what" is for today's future young couple, it ain't the same "what" that worked for the older Boomers.

Why Housing will NEVER come back

2011-04-22T05:39:00.000-07:00

Today's quote comes from Charles Dickens:

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

--------------------------------------

U.S. Housing is dead, and it ain't never coming back. Aside from Oil, the reason for its absolutely, positively sure thing ongoing demise? Property taxes.

Property taxes were the vehicle for government extraction of any gains one might have had in their house during the housing boom. The boom is gone, but the property tax remains... and its like a chronic disease... home owners cannot get rid of it. In most locals (not Cal, but they screwed themselves anyway), these property taxes were the means with which local politicians paid for the votes of the public employees through their unions. These liabilities are never ending. Property taxes have been combined with the lessons learned by people regarding debt and not saving to doom housing for a generation.

Yes, people need a place to live. "A place to live" is a far cry from the mal-investment that housing has become over the past 30 years. Housing will be redefined very brutally over the next 20 years.

Stay clear of home builders and regional and small banks. Any reported improvement in housing will prove to be a mirage. But there will be reports. Propaganda never sleeps. Those that benefit from enslaving you via property taxes will not die without a fight. They will endeavor to place you in debt (what do you think QE2 is all about? An attempt to lure you into enslavement with cheap and easy terms... but once you sign on the dotted line the monster shows himself) by any means necessary. Young folks! Don't fall for it! Old folks, help keep your young from enslavement.

Oh, and by the way... Employer provided health insurance? Just another vehicle of enslavement. Anybody thinks the Obamacare helped them has rocks rolling around their head... then again, anybody who believes Obamacare will help them is likely incapable of grasping anything I have proposed here.

(I was watching a clip on Yahoo finance with James Altucher. All my life I felt that corporations were behind home ownership for the purpose of creating a barrier to moving, leaving the homeowner/employee stuck, toiling forever in some factory or mining town, unable to move easily to take advantage of new opportunities... most people thought I was nutty ("its the American dream"). And then Altucher, unprodded and out of nowhere and hardly germane to the conversation at hand expresses the same sentiments! Vindication! Shortly there after, Coal Guy makes a comment about the "company store" in the mining towns... think about it... the "company bank" lends the worker his mortgage, the company store sells him all his consumer stuff, and the property taxes finish him off. After a life time of enslavement, what exactly does this poor sot have to show for all his efforts? Not a f*&^ing thing. Is my absolute disdain and hatred for this system showing through yet? Perhaps its my working-class-self-educated-white-trash underbelly showing.)

More soon.

Commodity Bubble almost as big as NASDAQ 2000

2011-04-21T19:59:00.000-07:00

The US$ has already crashed. Commodities are in a bubble.

That doesn't mean that the US$ can't go lower against the other major currencies... nor does it mean commodities cannot go higher... Some things take longer to pan out than we'd like to think, but this has gone on far longer than many though possible... and we have the added impetus of the end of QE2.

I like to buy things after they have been mushed, and I like to short things that have gone ballistic but are currently falling (there is an old saying on Wall Street "buy green, sell red" that my desk partner from my Bear Stearns days reminded me of last week when I complained about losing money shorting something that was still going up... NEVER call a top or a bottom... never grab a falling knife or step in front of a freight train).

We are in the 8th or 9th inning for commodities. Oil might be different (MENA and Saudi Arabia will have their say), as might Ag commodities (it is impossible to call the weather)... but that's my story and I am sticking to it.

Good luck.

"A Little Bit Pregnant" - cont...

2011-04-21T09:58:00.000-07:00

In every case there is a best possible outcome and a worse possible outcome. Assuming that it is all pointless is the expression of despair, and despair is hardly the mindset most often associated with figuring out the actions that will lead to the best possible outcome.

Life is to be enjoyed. Running around trumpeting doom has little upside going for it. Going about your life in such a manner as to avoid debt, own a home free and clear, raise children, build a business, and grow food (whether by hobby gardening or homesteading) will hardly be detrimental to your future. Ignoring the future by spending money one doesn't have and going into debt and complaining about the political zeitgeist has not shown to be a winning strategy for personal advancement (however you define that).

Life is about enjoying it - and taking responsibility for yourself, me thinks.

Life as we know it is going to change. Perhaps that rate of change will be slow enough that we won't notice. I reject that out of hand, but you never know.

I am interested in hearing from people that are running a homestead with their families. I am particularly interested in empirical data on the economics of each and every project or product you are involved in. "That which is not measured is not managed."

So let me hear from you.

-----------------------------------------------

For those of you watching the US$ and the commodity markets:

It seems that either the US$ collapses, or the commodity market does. This is NOT A TIMING CALL.

My bet is on the US$ NOT COLLAPSING (yet). But I could be wrong. We shall know soon enough.
Perhaps it is just me hoping that that is the case, but I think the end of QE2 will change the tone of things somewhat. As always, I reserve the right to change my mind on a dime.

-----------------------------------------------

I don't hold out much hope that our political leaders will be able to fix that which they cannot understand. So I am going to go out and get my everbearing strawberries in. Hey, its all about priorities.

You can't get a little bit pregnant. Or prepped.

2011-04-19T20:06:00.000-07:00

An anonymous commenter on a recent post said that land was $40,000 an acre in California... therefore he/she could not have livestock... his/her garden would have to suffice.

There has been a great deal of debate around the web... "adapt in place" or migrate? I chose to migrate. The Universe does not give a good fart about what is convenient for you. I want to say this very nicely... If you think there is going to be challenges and troubles and you think you are "prepping" because you bought some silver bars and a gun... well, my sense is is that your analysis is all f*&^ed up.

I tend to look at things in terms of return on investment, if you will. I think things are going to be very, very different 10, 15, 20 years from now. Where should my children come of age? What experiences will they have that will help them? What will hold value? What provides security? Each of us has to make our own judgement call about what the future will bring and how best to meet that future. For me, it was life in a small town on a family farm (near a hospital, university, and train station) with enough land, fencing, and barns to grow substantial food stuffs, and enough advance time so that I could learn what I needed to learn. I did this because I don't think you can prep in L.A. Or San Fran. Or New York City. Irrespective of how much silver you have or what guns or how many cans of Dinty Moore's beef stew. The Amish are prepped. Very few others are.

Gardens are for growing vegetables. Tomorrow morning, when you are eating breakfast, do a quick count of the vegetable matter you are consuming. Not much, huh? Oatmeal? You ain't growing that in your garden. Bacon & eggs, coffee with cream and sugar? Nope, not from the garden. How about lunch? Take a hard look at how much vegetable matter you are consuming at lunch... my bet is it just ain't that much. Same with dinner. Fact is, most of the plant matter we consume is not "garden" material. Corn? In volumes that matter corn, like other grains, is grown in large fields. Potatoes? Same drill. Pasta? From wheat (in fields). Dairy? Eggs? Meats? Poultry? These require animals, and animals require pasture, fencing, care, feed...

Take stock of what you eat. That's what you have to prep for... "by any mean necessary".

It takes money, it takes time, and it takes effort. That's why few people actually do it. Carrying capacity is carrying capacity, not a lick more... nor a lick less. The markets are telling us that something is incredibly f***ed up. How it all gets reconciled is anybody's guess. One thing for sure, life will go on and meals will need to be served... preferably hot, plentiful, and on time.

To paraphrase Vince Lombardi: Prepped is not a sometime thing. Prepped is an all the time thing. You can't get a little bit pregnant... and you can't be a little bit prepped.

Saudi Production, S & P's Cut...

2011-04-19T06:19:00.000-07:00

What a coincidence that S & P would downgrade the outlook on American debt during budget negotiations. Japan can run a deficit up to 200% of GDP, with far worse demographics, before getting such downgrade... but not the country that prints the world's reserve currency.

Something - someone, some group.... however you want to define them... Bilderberg, Pimco, the Chinese, the Pentagon... maybe all of the above - very powerful "motivated" S & P to make this decision and announcement now. There are NO COINCIDENCES. And not that it isn't the right thing to do... it is. But it ain't a coincidence.

So what are the ramifications? I believe (at least for the moment, and reserve the right to change my mind) that this incident was designed to prod the parties along. And if I am correct, this is what comes to my mind:

Any hint of success at cutting spending will send commodities down, perhaps hard. Commercial real estate and housing, too... though perhaps not as hard from here as commodities. Bonds might surprise you with interest rates heading lower and bond prices higher. Stocks not so much.
A real cut in government spending would mean that deflation and recession would be in the offing - and that's a good thing. In this case its the cure that is far more preferable to the disease. (Americans would start to save and invest rather than consume and go into debt.) Can the economically and mathematically challenged members of the Left get it and cooperate without causing a political or constitutional crisis? I have my doubts. Can the people making bizzilions on pentagon and weapons programs accept the new reality without causing their form of mischief? I have my doubts there, as well.
Any cut in entitlements and military spending would be an incredible move in the right direction, but a meaningful cut will be necessary to bring confidence back to the system. Should this happen, the U.S. would be giving itself its best opportunity to deal with Peak Oil, but it would be very painful for an electorate that has come to view something for nothing as a natural law of the universe.
This would also likely be the beginning of an incredible contraction in the financial services industry - and that's a good thing, too. That industry has been far more destructive of the average American than gambling, Las Vegas hookers, illicit drugs, and McDonald's combined (and 3 of those 4 are illegal). The industry encouraged self-destructive consumption and debt, in the extreme, with its easy money loans and services. What does America have to show for all of that "Financial Service"? Cookie cutter McMansions and shiny Cadillac Escalades complete with spinning hubs (machine gun turrets are extra) that consume dwindling Oil supplies like mad but do pollute like crazy... so they got that going for them...

I look forward, with great anticipation, the next move in this unfolding chess match.

No such thing as a secret

2011-04-18T06:43:00.000-07:00

Standard & Poors' downgraded the outlook for U.S. Treasury paper to "negative" this morning.

The action in the precious metals market, and particularly the Silver market, in the last couple of days makes me think that this downgrade was "released" before this morning.

I don't have time to tear it apart here, but there are a couple of doozies (warnings about assumptions) in there.

Here is a copy of S & P's release:

Standard & Poor’s Ratings Services said today that it affirmed its ‘AAA’ long-term and ‘A-1+’ short-term sovereign credit ratings on the U.S. Standard & Poor’s also said that it revised its outlook on the long-term rating of the U.S. sovereign to negative from stable.

Our ratings on the U.S. rest on its high-income, highly diversified, and flexible economy. It is backed by a strong track record of prudent and credible monetary policy, evidenced to us by its ability to support growth while containing inflationary pressures. The ratings also reflect our view of the unique advantages stemming from the dollar’s preeminent place among world currencies.

“Although we believe these strengths currently outweigh what we consider to be the U.S.’s meaningful economic and fiscal risks and large external debtor position, we now believe that they might not fully offset the credit risks over the next two years at the ‘AAA’ level,” said Standard & Poor’s credit analyst Nikola G. Swann.

“More than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,” Mr. Swann added.

In 2003-2008, the U.S.’s general (total) government deficit fluctuated between 2% and 5% of GDP. Already noticeably larger than that of most ‘AAA’ rated sovereigns, it ballooned to more than 11% in 2009 and has yet to recover.

On April 13, President Barack Obama laid out his Administration’s medium-term fiscal consolidation plan, aimed at reducing the cumulative unified federal deficit by US$4 trillion in 12 years or less. A key component of the Administration’s strategy is to work with Congressional leaders over the next two months to develop a commonly agreed upon program to reach this target. The President’s proposals envision reducing the deficit via both spending cuts and revenue increases.

Key members in the U.S. House of Representatives have also advocated fiscal tightening of a similar magnitude, US$4.4 trillion, during the coming 10 years, but via different methods. House Budget Committee Chairman Paul Ryan’s plan seeks to balance the federal budget by 2040, in part by cutting non-defense spending. The plan also includes significantly reducing the scope of Medicare and Medicaid, while bringing top individual and corporate tax rates lower than those under the 2001 and 2003 tax cuts.

We view President Obama’s and Congressman Ryan’s proposals as the starting point of a process aimed at broader engagement, which could result in substantial and lasting U.S. government fiscal consolidation. That said, we see the path to agreement as challenging because the gap between the parties remains wide. We believe there is a significant risk that Congressional negotiations could result in no agreement on a medium-term fiscal strategy until after the fall 2012 Congressional and Presidential elections. If so, the first budget proposal that could include related measures would be Budget 2014 (for the fiscal year beginning Oct. 1, 2013), and we believe a delay beyond that time is possible.

Standard & Poor’s takes no position on the mix of spending and revenue measures the Congress and the Administration might conclude are appropriate.

But for any plan to be credible, we believe that it would need to secure support from a cross-section of leaders in both political parties. If U.S. policymakers do agree on a fiscal consolidation strategy, we believe the experience of other countries highlights that implementation could take time. It could also generate significant political controversy, not just within Congress or between Congress and the Administration, but throughout the country. We therefore think that, assuming an agreement between Congress and the President, there is a reasonable chance that it would still take a number of years before the government reaches a fiscal position that stabilizes its debt burden. In addition, even if such measures are eventually put in place, the initiating policymakers or subsequently elected ones could decide to at least partially reverse fiscal consolidation.

In our baseline macroeconomic scenario of near 3% annual real growth, we expect the general government deficit to decline gradually but remain slightly higher than 6% of GDP in 2013. As a result, net general government debt would reach 84% of GDP by 2013. In our macroeconomic forecast’s optimistic scenario (assuming near 4% annual real growth), the fiscal deficit would fall to 4.6% of GDP by 2013, but the U.S.’s net general government debt would still rise to almost 80% of GDP by 2013. In our pessimistic scenario (a mild, one-year double-dip recession in 2012), the deficit would be 9.1%, while net debt would surpass 90% by 2013. Even in our optimistic scenario, we believe the U.S.’s fiscal profile would be less robust than those of other ‘AAA’ rated sovereigns by 2013. (For all of the assumptions underpinning our three forecast scenarios, see “U.S. Risks To The Forecast: Oil We Have to Fear Is...,” March 15, 2011, RatingsDirect.

“Our negative outlook on our rating on the U.S. sovereign signals that we believe there is at least a one-in-three likelihood that we could lower our long-term rating on the U.S. within two years,” Mr. Swann said. “The outlook reflects our view of the increased risk that the political negotiations over when and how to address both the medium- and long-term fiscal challenges will persist until at least after national elections in 2012.”

Some compromise that achieves agreement on a comprehensive budgetary consolidation program--containing deficit-reduction measures in amounts near those recently proposed, and combined with meaningful steps toward implementation by 2013--is our baseline assumption and could lead us to revise the outlook back to stable. Alternatively, the lack of such an agreement or a significant further fiscal deterioration for any reason could lead us to lower the rating.

"U.S. Economy hits a Rough Patch"?

2011-04-17T20:05:00.000-07:00

"The U.S. Economy hit a Rough Patch"?

Holy Christmas! I'll alert the media! Oops.... that was the media....

Q1 2011's rough patch has very little to do with weather, and everything to do with Oil... and to a much lesser extent, Japan.

Economists predict? Who gives a good fart? I am far more interested in what the Saudi's have to say.

Anybody here believe a single word the Saudi's have to say (other than the actual number, which will be easily verifiable in the near term)? They decided to cut production because of a glut in Oil at the same time Libya ceased exporting and prices spiked 17%? In what f&@%ing universe doe that make sense?

More on this soon.

---------------------------------------------

So, I am an experienced homesteader now, right? I read these silly articles around the Peak Oil sites about "gardening as if your life depended on it".

Down through history, how often have you heard the line "The Land of Milk and Honey"? Bizzillions, right? Ever heard of "the land of bell peppers and swiss chard"? How about "the land of broccoli and cabbage"?

Me neither.

Look, I love my garden. But I'd rather have a milk cow and some chickens. Let me tell you about the economics of a family milk cow... work with me... I can't help myself.

My family goes through about a gallon of milk per day, 7 days per week, 365 days per year. A gallon of organic milk costs $8.20 here in Tennessee, and that's before 9.25% sales tax on food. Let's call it $9 per gallon. When fresh, our cows give 3 to 4 gallons per day, and at the end of the cycle they still give 1 gallon+. On a tax adjusted basis (remember, I have to pay taxes on income and the $9 per day is after tax), my cow's economic equivalent value is about $5000 per year for that 1 gallon per day. But she gives me 3 gallons per day for more than half her cycle. The balance goes to the 2 hogs I raise for the family freezer per year. This milk, together with garden/farm and kitchen waste is pretty much all these 2 hogs will get... and they will yield us about 400 lbs of pork. In order to give milk, the cow has to calve... and she will calve every year for 10 years.

With me so far? One cow puts over 600 pounds of beef and 400 pounds of pork in the freezer, every year for FREE (well, for the price of 2 acres of pasture in the middle of nowhere, or less than a $5000 investment that will retain its value in almost every scenario, and $600 for the cow and perhaps $200 per year in medications, vaccines, and supplements), PLUS $5,000 of economically equivalent income milk. Did I mention butter?

Try that with gardening.

Balance... and the 2H1P

2011-04-17T06:11:00.000-07:00

There are a great many crowded trades out there in the market place.

Precious metals and commodities are trading at nose bleed levels. Goldman Sachs, the anti-Christ, is out telling their clients to close their crude, cooper, platinum trades, among other items... no doubt, IMHO, because they have intimate knowledge of the Fed's next moves. Don't fight City Hall. QE2 is coming to an end, and I do not see QE3 in our future, given the religion the 2H1P has gotten of late regarding spending.

Housing and lending are as dead as fried chicken, and are just about as resuscitatable. Employment is too, despite the distortions, gimmickry, and out right lies of the BLS. QE1 and 2 were both unmitigated successes, or unmitigated failures, depending on how you look at it. Fact is, I favored QE1 and TARP as we were days away from Martial Law at the time. QE2? Not even a little bit.

The government seems to have come to the belief that its job is to cause perfect, seamless, and unending economic growth, and besides the fact that this is the primary reason the political class cannot come to grips with Peak Oil this is hardly the Constitutional function of government... encouraging the electorate to believe that it is has left us where we are.

(I read with interest the dynamic duo spokespeople of the Left: Robert Reich and Paul Krugman. These are bright fellows, if I make use of understatement, so how did they get to be so daft in how they interpret the environment of the human condition? Liberal, elite, of privileged background... and childless. I (very politically incorrectly) assert that the experience of parenting and providing for the needs of a family is a primary experience necessary to fully be able to see and interpret the entire human condition. Living in perpetuity in Academia without having to make payroll and care for children and deal with government edict and regulations is not conducive to rational interpretation of ones environment, me thinks. For example: That fully 1/3 of the SCOTUS Justices are childless, self-important geeks disturbs me to no end. Think this is a silly point to bring up? Why? Ask ANY PARENT what the most significant, life altering/affirming/maturing event in their life was and invariably it will have to do with becoming a parent. I don't see raising children so much as a "choice" as a civic duty. While it might be acceptable to choose to be childless, it can hardly be defended as the better of the 2 options. And why is it that wealth transfer agents like Krugman & Reisch want so much to make life better and fair by sharing your assets and wealth when they are unwilling to share of themselves with children? OK, maybe I am all wet. Maybe they cannot HAVE children. And adoption was not an option for people of such wealth and power? Should we blame the Liberal's birth-derth/baby bust on their infertility? F*** right off!)

Adults know and understand this out of hand. Unfortunately, we seem to be in a serious shortage of supply of adults at this time in our history. With the vast majority of Americans and the inhabitants of the rest industrial West firmly believing that something can be had for nothing, that there is no such thing as self-interest let alone the ability recognize and act on it, I think it is incumbent upon each of us to prove the majority wrong - for your own self-interest!

"Self-Interest" is perhaps confused in some political quarters as being selfish or self-absorbed. Those quarters, as I mentioned above, often don't have children. Every parent knows how much blood, sweat, and tears goes into raising a family. The chasm between Paul Krugman's and Robert Reich's world view and mine has at least as much evolved from our personal family experiences as anything else. These are brilliant fellows, to say the least. Pretty smart, myself. Very different experiences.

Those supporting the Krugman/Reich view point will often bellow and assert and hold forth on income disparity/tax the rich/Life's not fair! Taking the 400 richest billionaires as an example/reason for destroying the well being and security of the middle class millionaires that grind it out everyday at small business around the country. Look, some of what these guy's bring up is legitimate - our system has evolved flaws that have leant a winner-take-all paradigm that does present serious issues and challenges. Look no further than the recent mortgage and finance crisis in which the moneyed establishment was able to break the rules, profit mightily, and then rewrite the rules with impunity. Believe me, I get it. I spent my life working in finance with these entitled jack-asses (and most of them identified with the Left). The question is whether the cure is worse than the disease.

(It has been my experience that when a view point is extremely weak, the holder must resort to the "nuclear option". For example, when I bring up my pro-Life views and belief that abortion cannot be supported ethically the first response from the pro-choice around me has invariably been "Oh, yea? What if the woman was raped?" WTF??!! What percentage of abortions are motivated by rape? Not a very big percentage, me thinks, but the balance of their argument is soooooo flawed and ill considered that like any drowning person they flail about dangerously.)

I respectfully submit that the cure for much of that disparity is in the offing, but I absolutely guarantee that that cure will not satisfy the Krugman/Reich gang. In fact, as with any organization, they will use what supports their contention and discard the balance. As will the Right.

The folks identifying with the Right are suffering equally from the fallacy of misplaced concreteness. All things are NOT equal... and yet the U.S. military budget must be cut into, and deeply, in much the same fashion as the entitlement programs. The prison/industrial/war on drugs industrial complex simply cannot be financed further, and was never a terribly good idea irrespective of the fiscal environment. The Right will NEVER be able to use government thugs to enforce the (very correct) idea that Life begins at conception. What are they going to do? Issue birth certificates for conception? No, these knuckle heads don't give a good fart for the unborn. They are simply USING well meaning folks to further other political agendas.

There are no macro solutions; only micro solutions. The West's energy situation is going to readjust these attitudes of smug superiority. But that revolution won't be televised, either. There will no "I told you so" moment. We'll all be too busy seeing to our own affairs.

Thank G-d.

Wall Street and Football

2011-04-15T10:06:00.000-07:00

Working on Wall Street is a lot like playing football. When you are young it is glamorous, exiting, and it pays very, very well. If you stick around too long, your REAL life expectancy, the one that counts, is often cut short (actually in the case of football, its not "often". Average life expectancy for pro football veterans is 55 years of age. That sounds OK when you are 22... but at my age, well... that's just unacceptable!).

Joe Battipaglia has died. He was 55.

Most people know of Joe from his constant appearances on CNBC (one of my good friends from my Bear Stearns days is another giant of a man that is often on CNBC... no names, he reads here on occasion.. I hope he takes this to heart. Hint, hint). I knew him back in the day when he was at Gruntal & Co. We were friendly in that people that knew us used to say that Joe was the only guy on Wall Street bigger than me. Only a slight exaggeration. He was a couple inches taller and quite a bit heavier. (Believe me, being known as being larger than yours truly is not a good thing as far as life expectancy. Big people don't live as long as small people. If you are over 6'2" in height, its best not to tempt fate with any excess poundage around the middle.)

And now he has died. I don't know what the circumstances were, but it has been reported that he had a heart attack at work. Spending time making more money when you are already rich ( a great many "rich people" don't even know they are rich... often they have ratcheted up their living expenses in such a way that they simply must continue on the gerbil wheel until it kills them. To my mind, Joe would have been better off as a laborer digging in the earth) and commuting long distances in and out of New York City rather than taking care of your health strikes me as self-defeating.

Bruce Wasserstein, Matt Simmons, Joe Battipaglia... wealthy, respected, and dead... spending your later years sitting at a desk to make more money while not taking care of your health is a self defeating outcome of our way of life. Read this excellent article about spending too much time sitting... and this in today's New York Times... how and why it is killing us even if we make it to the gym several days per week. Over 50 (like me!)? Seems nature and evolution wants us to be more active than 3 visits to the gym every week. This is something to pay attention to.

Life is short enough. We need to be productive, but there is no need to help the Grim Reaper along, he'll be here soon enough. Dying is not terribly productive.

In the end, its all about one thing - To Life!

The End of QE2 is in sight...

2011-04-14T14:35:00.000-07:00

It is easier to blog than it is to run a homestead operation - hence, posting has been a bit light. I did want to share some pictures before I get on with my rant.

I start my garden with seedlings bought from the Amish folks up in Scotsville, KY. I constructed raised beds that are 14 inches deep (12 inches of cedar on top of bricks to keep them off the ground and dry), and am using the square foot gardening method this year. Each bed should produce at least 2 sets of 32 plants per year... or at least that's the plan.

Corn, potatoes, beans, and melons are grown in the field. This is my first year with "soft fruits": raspberries, strawberries, blueberries, and black berries. I'll let you know, but I think we'll be fine as I have good guidance from the Amish family that sold them to me... and we have been doing the "pick your own" thing for 5 years now, making jams and preserves.

I milk at least one cow per day, and in the future when there is more milk than the family and the pigs can consume I intend to get some bottle calves and put them on the cows.

Over all, a family of 5 would need to raise 2 hogs per year, one steer, 100 chickens (for eggs and poultry), keep 2 milk cows (cows dry out every year so you'll need 2), several goats, a 1 acre garden and at least 3 acres in corn to keep everybody fed (we have more livestock than that, for reasons not entirely clear even to me). It sounds like a lot, but I think it takes about the time it would take to get in my car, drive to the gym, change my clothes, work out, shower, and drive home. Instead of dirty gym clothes I have food stuff coming out of my ears, and enjoy being outside and having something constructive to do.

Raised beds. 8, 8 x 4 cedar beds plus 1, 64 foot cinderblock bed.

Seeds planted and forced are outside hardening off but protect from wind in this box.

Here is my Hog Yard. Next month the hogs get penned in the back and corn, beans, and pumpkins will get planted in the yard (a little over .5 acre). The Hogs will harvest the produce themselves. See those Guinea hens in the background? I let them roam the farm as they are excellent natural pesticide.

We have 5 cows, 1 Bull and 20+ goats on pasture. They are grass fed and well cared for. We eat the males and milk females.

This is my breeding pen for meat birds. These are Jersey Giants and 2 Rhode Island Red Roosters whose daughters proved to be good egg layers. At least we think these are the Dads... nothing's perfect.

I use an incubator to hatch out a couple hundred eggs per month during the summer. I give the chicks we don't need as presents to friends and neighbors. We eat 2 birds per week, and only half or so survive to adulthood or harvesting... so we need to hatch at least 200 birds per year for our own consumption

This is the laying/breeding pen for layers. After their second season I give them away. Poor folks do not look a gift chicken in the mouth. During spring and summer we have eggs coming out of our ears... enough for us to eat a dozen a day, fill the 270 egg incubator every month, and give some a way. That pen is on 2x4 sled runners and I move it several time per day so that the birds can have fresh grass and bugs along with their layer ration. Its a bit heavy but I'm only a chromosome or 2 away from being a Neanderthal, so it works for us.

------------------------------------

The end of QE2 is in sight. I have to say that I have egg on my face for underestimating the impact that QE1 and QE2 had on the markets, but I think that the markets will not be kind to the longs as we get closer and closer to the end. We shall see.

All of Washington, T.P. included, has lost its mind...

2011-04-12T09:31:00.000-07:00

Look what got cut in the budget deal - high speed rail. Notice military spending, which needs the same kind of cuts that entitlements do, was spared any cuts at all.

We are losing our collective freaking minds. Dear Tea Party: I thought y'all heard the voice of the people. Must a been something else.

BTW. I am flat Oil. I don't like when market's turn around after a rally this hard... especially with Japan declaring the nuclear situation to be far worse than previously believed. In the near future this will increase demand for fossil fuel... but not in the immediate future.

Wait until somebody does something dumb - then go long Oil (or at least that's the theory).

In fact... I think the markets are extremely dangerous at the moment.

Best to stay clear unless you are a remarkably disciplined and experienced trader.

"I Hate Everything and Everybody"

2011-04-11T19:26:00.000-07:00

"I hate everything and everybody" pretty much sums up my thoughts on the "budget battle". Never have more losers done less for the unknowing in the history of mankind... with the possible exception of the FDR administrations.

I despise the Left AND the Right in America. The "players" on either side have no heart felt beliefs, no "moral compass", and no humanity. "I FART in their general direction."

May they eat sh#! and die.

----------------------------------------------

The Tea Party blinked. No, that isn't fair. The Tea Party wet their pants, and they are proving to be just another group willing to try to kick the can down the road. Notice the next day that Pimco show's up short Treasury Bonds? That ain't a coincidence. Both bonds AND stocks are going to get rocked as will employment and housing... unless something changes drastically.

----------------------------------------------

I was beyond thrilled to see this post by Stuart Staniford over at "earlywarn". If you have been reading my stuff for a while you know that I get peptic regarding the lack of numeracy amongst the political and media establishment. For reasons unknown to me the "intelligensia" here in America simply cannot or will not understand the relationships between numbers, other wise known as ratios.

----------------------------------------------

Oil has had some week. And the propaganda just keeps coming. Please consider paragraph 2 of this inane horsesh#!.

Across the country, people are pumping less into the tank, reversing what had been a steady increase in demand for fuel. For five weeks in a row, they have bought less gas than they did a year ago.

The cessation of Libya's Oil exports is the reason American's have bought less gas over the past 5 weeks, you AP jackass. People cannot buy what isn't there, and the volume that was available has been rationed by price.

--------------------------------------------

The Oil shock cometh. Upon its arrival it shall be known as the new normal. The new normal is the solution.

Saudi Solar?

2011-04-08T05:55:00.000-07:00

Brent Oil traded over $125 today; front month WTI is over $111. I cannot fathom this spread. My bet is it simply won't last. I have read about the supply conundrum at Cushing, Ok. My sense is that the Oil now being piped there that caused this discount will not find its way to the origination point of that pipe system. When, I can't say, but I will bet dollars to donuts that it happens, it happens soon, and when it happens it will happen (the spread will close) fast. Long WTI/Short Brent sounds like a reasonable bet to me (but this is not investment advice and I already have positions).

------------------------------------------

The KSA is in a hurry to spend some BIG BUCKS, no doubt on well connected Western contractors, on solar, nuclear, wind... but notice the silly conclusion/explanation of the author:

That means Saudi Arabia wants to wean itself off oil but keep the rest of us hooked (unless it has plans to become the world's largest solar-panel exporter, too).

That's the writer's conclusion? No wonder the public in the West is so kerbolixed up with this issue.... relying on the media to inform them.

The KSA's agenda ain't keeping us hooked on Oil; that was done long ago, far away, and by another party... their agenda is to matter, politically, to The Powers That Be, and TPTB won't give a good fart about the House of Saud when they are not an Oil exporter... heck, they might not give that good fart once it is common knowledge that Saudi export days are numbered.

The Saud's are between a far bigger rock and a much harder hard place than the U.S. is. Either way - they either skidaddle or wind up hanging on a hook with piano wire for a noose.

-----------------------------------------

I don't know Tracey McMillan, but I love her already.

-------------------------------------------

An excellent article on the merits. Don't miss it. My sense is that as the Oil supply declines, the better nature of man will shine through. Or perhaps I just hope so.

--------------------------------------------

I have more than a passing interest to see how declines in electricity availability in Japan this summer effects productivity and production itself. Before the age of AC for summer cooling, summer was a time of diminished work and production. Japan might well give us a good look at our own future.

More on this soon.

Well, well, well...

2011-04-07T09:43:00.000-07:00

RBOB gasoline, that's the wholesale trading vehicle in the harbor, is $3.17 as I write this. Heating Oil in the harbor is $3.18. And this is the "Shoulder Period"!

Forget WTI. Products, such as gasoline and heating oil, far more likely trade off of Brent, as "products" are exported from Europe to the U.S. and delivered along the coast. Brent is $122 and front month WTI is just over $109. I would have thought we would have seen some demand destruction at this level... but I can't find any evidence of that. So I am still Long Oil.

How much higher will Oil go before it cinches down hard on demand? I don't know... I didn't think we would retest the 2008 highs just yet, but I am having a change of heart. Oil prices are not terribly elastic, and Libya's missing 1.2 million of exports has driven the market $25 higher (and that's not really true... the contango was very, very steep and Libya flattened it quite a bit... in reality Libya probably moved Oil $12 to $15 over the entire curve).

It is my opinion that there is no way to stop the demands of the Arab people. Ergo, there is likely more short term upside to Oil. At some point the U.S. and the West will have to go through another brutal contraction in order to ration Oil by price.

Peak Oil, with all its effects and consequences, is here.

------------------------------------------

Peak Oil is here, and you can still enjoy your life!

My wife and I are planning to spend next winter in South or Central America. We will surf, hike volcanoes, fish, ride horses... for about 1/4 of what many of my friends in Boca Raton consider an acceptable monthly family budget.

Being frugal in the extreme has its rewards. Don't miss them. It does not have to be travel (I can work from anywhere), but to be rich in time is to be truly rich. Rich in money will end your life early - just look at Matt Simmons and Bruce Wasserstein, 2 very wealthy investment bankers that spent 1 too many days at the office and dropped dead in their early 60'swith ooddles of money in the bank - if you have work too hard for it.

Yes, you gotta work and save money, but you have to enjoy yourself and keep your health. Clear the decks of every repeating expense (monthly bills) and work to keep them low. You will love yourself for doing it.

----------------------------------------------------------

Its not often that I find myself on the same side as Slate magazine...

But WTF??!! The Right on the SCOTUS are completely out of bounds. As former prosecutors and government attorneys these Justices are far too sympathetic to prosecutors and other government thugs.

I am sickened by some of their recent decisions. We, as a people, are getting meaner, and meaner, and meaner... so too, it appears are the individuals that are sworn to protect the American People from unconstitutional and oppressive government.

-----------------------------------------

I know that may civil libertarians are bemoaning the fact that our cell phones are tracking our every move. Here is another way of looking at it:

Remember the Duke Lacrosse players falsely accused of rape (and, BTW, their accuser has just been arrested for attempted murder for stabbing her boyfriend... and this is only her most recent arrest)? The only reason the guys are not buried alive in prison IS THEIR CELL PHONES. Without the location data provided by their phones these guys would definitely have gone to trial, at great personal expense in stress and treasure, and at great risk of false conviction (partly because of that anger I spoke of earlier). Yes, your cell phone is tracking you.... it is also giving you the perfect alibi should you come under attack from a false accusation.

That I even feel in any way positive about being tracked says volumes about my respect and confidence in our law enforcement and justice system.

--------------------------------------------------

Climate change is real. If you are a denier, its ok to come around. The data is simply overwhelming. The good news is that there is not enough Oil nor Coal to accomplish the projected damage... and there is nothing to be done with what has been done. Still, it is what it is.

Back from the Scottsville, KY Amish Fair & Auction

2011-04-04T08:09:00.001-07:00

I spent a couple days at the Amish Fair & Auction in Scottsville, KY. This was the 27th annual edition, and it was well organized and very, very informative.

That the Oil Age is coming to a close is approaching "boring" as a discussion topic. It is, in my humble opinion, and there are no macro policy responses that are likely to be worth your time in the offing any time soon.

So best to get on with life.

Before I get on with that, I wanted to share my observations about the people I met and spoke with these last few days. Let us call them the "Amish" and the "English" ("The English" is how the Amish refer to non-Amish).

In appearance, the Amish are, unsurprisingly, in very robust physical shape. Most appeared to have all of their teeth, though my bet is most had not had teeth straightening treatments as children, and those teeth were white. Not one of the men I met had any sort of tire or gut or extra weight hanging around the midriff. We did meet one overweight Amish woman. One. And we met hundreds.

The English were not as appealing to behold as the Amish. The vast majority were overweight in the extreme. Loaded with tatoo's, smoking, chewing tobacco, missing teeth, unkept... the differences were quite striking. In short, the English looked terrible.

The Amish farms were well kept, tidy, and productive. The homes of the English? More than half looked like the stereotypical country mobile home with junk deposited about the structure. The Amish do not appear to favor "yards", as crops grew right up to the eves of the house and surrounded the barns. No doubt that the Amish's large families are instrumental in keeping their homesteads in such pristine condition, but one could not help but see that many of the English living in the area have has lost their way... and I couldn't help but wonder how much the hours spent watching T.V. or in other media took away from their potential as stewards of their (the English) properties.

My bet is the Amish are not big on Prozac, either.

I made some contacts with local Amish farmers, a green house operator, leather worker, and General Store. I bought a Swiss/Gurnsey cross milk cow (I now have 3 milk cows...) 10 Black Jersey Giant hens, assorted roosters (to introduce new genetics into my flock), 2 dairy billy goats (also for genetics) and several flats of garden vegetables.

I ordered a hand planter for corn and beens. For an acre or 2 (or 3), these can work reasonably well.

My homestead is really coming along. I will have some pictures up shortly, if the tornados don't land here today.

Hysterical! "Obama Rolls out plan to cut Oil Imports"

2011-03-30T11:38:00.000-07:00

Oh.... My...... G-d..... "Obama Rolls out plan to cut Oil Imports."

G-d is cutting Oil imports, not President Obama, or any future president for that matter.

Now that Peak Oil Exports has been fully embraced by an American administration... well, you gotta admire how they are taking credit for an ineluctable outcome.

My hat is off to the President for this one... he just one-upped President Clinton in the "Slick" category.

Ok... Just kidding. If I were working as one of his political operatives, this is pretty much the tack I would take. Might as well take credit for something that is going to happen anyway, selling the policy response as being a good thing, and hope to h*ll it gets me through the next election when gas is $5 per gallon.

Most of the reasoning contained in the speech was actually reasonably sound - all except for the actual, practical responses. Still, we are getting there.

Oh, and one last thing Mr. President. Imports will likely be down by 2/3 over the next decade... not 1/3.

Not Thinking Things Through

2011-03-30T05:49:00.000-07:00

I think our political class has a striking gap in its education/training. For the most part, they don't play chess. And I mean that sincerely. Chess teaches you to think about outcomes, intentional and unintentional. Something that is sorely lacking in our policies and politics.

(I grew up in a "chess house" (and ping pong, too). My father and my 4 older brothers would play endless tournaments. To give an idea of our enthusiasm for the game my mother knitted a large chess board and my father built a table around it. Some hard shopping was done to acquire the proper seats that were going to have to withstand our boisterous brand of brotherly chess. Brother number 3, who reads here often so I gotta be nice, and my father were the house champs.)

Here we are in 2011, having come closer to abandoning our Constitution to Marshall Law because of bad economic policy than at anytime time in our history, including times where we faced an opposing army. And what is our Left-leaning administration planning as a response? They are going to get rid of Fannie Mae & Freddie Mac (and its the right thing to do), 2 of the crown Jewels of that paradigm of Progressivism, President Franklin Delano Roosevelt. Turns out that subsidizing home ownership nearly ended the Republic. Social Security, the other crown jewel of that administration, is squarely on the block as we speak with a Federal government shut down possibly in the offing. (Medicare came later, during the Great Society Horse Sh#! came later with LBJ... the brainiac that gave us Viet Nam.)

There are no actions without unintended consequences.

The women's movement creates political opportunities for Hillary and financial opportunities for Oprah... and has caused 55 million abortions, outrageous divorce rates, a population of men who absolutely refuse to marry and others that will only do so with a 95 page pre-nuptial agreement.... and millions and millions of boomer aged women with no savings or husband to share the burden's of life with.... and yes, I realize it is more complicated than that.. but suffice it to say, with a full recognition that correlation does not imply causation, that boomer women, now 50 to 65, are in far, FAR worse financial shape than their mother's were. I respectfully submit that a great deal of that can be laid at the feet of the responses, both intended and unintended, of the "women's movement". And PLEASE! I do not say that there were not some important positive outcomes that came with that movement. We are playing chess here, and in chess one must SURVIVE the opening and mid game in order to win the end game.

Social Security and property taxes combined to make it impossible for the average person to save for their old age. If the data-point in the Susanna Wilson article, that the average Boomer American has about $25,000 in retirement savings, isn't it time to turn down the rhetoric and break out the spreadsheet/calculator/pencil & napkin? Do you want to shout down the opposition or have a rational co-examination of the facts? Well, real median household income in the U.S. is just over $50,000 per year. Social Security seizes 16% of that, and property taxes another 7% or so. Sales taxes consume another 2 or 3%... I have not gotten to income taxes yet! (And I know that at this point out come's the "tax the rich then!" crowd. I just can't respond to their silly and uninformed position. Yes, income taxes will have to rise somewhat... but there is not as much slack there as these people think.) Demographics are killing us! We were able to get away with this silly construct as long as population grew... the moment it stops - POW! Had the folks running the train set played chess growing up this would not be so hard for them to put their arms around.

Drug use! The U.S. has filled up its prisons far beyond the point of being defensible. What do we have to show for it? Is the drug problem cured? NAFC. Have we created a prison culture and gangs that perpetuate a culture of crime? You bet. You know all those men in prison? Well, they have children. And those children are growing up in poverty stricken homes dependent on government assistance. Talk about the gift that keeps on giving (for law enforcement and the justice system, that is)!!!

Speaking of those children... I'd be remiss if I didn't point out the unintended consequences of Aid to Families with Dependent children, or whatever they call it these days. 90% of African American children will receive food assistance at some point in their childhood. Over 70% are born to single mothers. This wasn't the case BEFORE the civil rights era... so what happened? As in everything I mentioned above... the GOVERNMENT happened. The government incentivized an entire culture to self-destruct. Not to worry, the government has a plan to fix it... all it takes is more money. Will it work? Has any government program worked out in the long run? Let's take a look, shall we...? Farm subsidies, the national income tax, the War on Drugs, Subsidizing the mortgage/housing market (Fannie Mae), subsidizing healthcare for the elderly (Medicare), forcing individuals to save while holding their money (lol!!!!) for safe keeping (Social Security), family law (an explosion of wealthy divorce lawyers and poor families and 55 million unborn killed)... I gotta stop here or I am going to blow a f*&^ing gasket.

I am starting to think that the end of Oil might just be a fantastic blessing. I might change the name of my blog from the "American Energy Crisis" to the "American Energy Crisis Is The Solution". In my view of the world and American chess board, it is difficult to see how the outcomes of the end of Oil could be any worse than the path we have chosen.

The Beauty of Spreadsheets

2011-03-29T07:01:00.000-07:00

I have been a stockbroker, investment banker, and money manager. I have no training in "Financial Planning".

That said, anybody with a few minutes and some minor math skills can work out their financial future nearly down to the last $. I say this because I got a couple of phone calls from female friends that took exception to my last post. To anybody that was offended, or took issue, I say:

"Its nothing personal. Its just business."

Open a spread sheet. Enter your age at A1, and then add a year down the vertical boxes B1, C1.... in the next set of vertical boxes list your anticipated income per year.... in the next set of boxes list the amount of savings you anticipate being able to achieve out of that year's income.

Now... Do yourself a HUGE favor and spare yourself the "magic of compounding" sh#! you get from brokers and financial planners, and add 30% per decade (for after tax interest or returns, and to keep this worst case) and break it up by decade adding the previous decades 30% to your savings at the beginning of the new decade (this saves calculating (1 + 1/n) to the n and so you can see it by year).

OK, Done? That number at the bottom, after 40 years of work (assuming you started seriously working and saving at 25 and stopped at 65) is what you have to live on in your old age - no more, no less.

Whatever societal influences that keep you from accumulating a sufficient number to keep you from eating dog food or being homeless really are to be considered as bad for you, in the long run, as heroine.

(And look, I am talking "Joe Six-pack" here. I have friends I have met over the years in Boca Raton that have been rich and bust and rich and bust more times Carter has liver pills. They are like cockroaches, and I mean this in a nice way, in that you just can't kill them. One minute they are scraping the bottom of dumpsters, and the next they pull up in a new Bentley, complete with a new wife, kids, and a McMansion down the street from their last wife. These guys are amazing; but they have skills and chutzpuh most folks just were not blessed (or cursed, depending how you look at it) with.)

Now, see that number on the bottom? Through in a couple of divorces and moves and it is ALL GONE. You're broke, the kids are in debt for education, the family is best described as a "domestic disaster"... and it was all self-inflicted.

Just don't buy the Bullsh#!. That's all you gotta do. Stay away from the Politically Correct and get out the Spreadsheet. Life boils down to some very simple math.

The Sad, Unintended Consequences of the "Women's Movement"

2011-03-28T06:15:00.000-07:00

The Women's Movement had some positive outcomes. We hear about those outcomes everyday in stories planted in the media. This Movement also had some terrible unintended consequences.

I wonder who planted this story? (Remember, "Jeffers Media Theory" states that no article or story makes its way into the media by accident... it is bought and paid for by special interests.) Whoever it was, me thinks they were making a different point than the one I received.... For every Oprah or Hillary there are 100 million women that are going to wind up like the subject of this article.

Read that article. Then read it again. And Again.

Please allow me to translate:

This 70-year-old, destitute woman, Susanna Wilson, no doubt influenced by the Women's Movement, twice divorced/rejected family - except when it suited her, as in when she inherited a debt free home from her non-feminist mother and "patriarch" father... something Susanna is only too willing to take advantage of with no thought for the future of HER own daughter. After all, Susanna is considering a "reverse mortgage", a financial instrument that will consume ALL of the equity in her home (given enough time), leaving her own daughter nothing.... despite the fact that the home was a family asset, not an asset that came about due to Ms. Wilson's efforts and belief system. In fact, it is Ms. Wilson's f*&^ed up belief system that is causing the family home to be removed from the family's resources. Way to go, Susanna!

Allow me to sum it up:

Susanna's traditional, non-college educated parents, lived within their means, sacrificed immediate gratification so that they could be able to provide some level of security for their issue (Susanna). Susanna, Berkley educated, feminist, artist, free spirit... made no compromises (divorced twice), made no sacrifices (moved around, played hard, and saved not). The article does not mention anything about the relationship between good ol' Susanna and her daughter, other than to say the daughter is "unable to help" Susanna financially. My bet is the relationship ain't so hot in any event.

Remember "Broke Ass Grouch"? (Please read the original because the links and quotes work better there than here where I simply copied and pasted). I had this to say in my January 28, 2011 Post about some of the nasty, unintended consequences of the Women's Movement:

-----------------------------

The story from Broke-Ass Grouch that I linked to recently has been rolling around my mind ever since I first read it. Broke-Ass ("BA") is intelligent, witty, insightful, and brutally honest... with a glaring exception: BA assigns blame to the wrong people.

To my mind, and stay with me a moment while I piss off a number of special interest groups, BA was the victim of the university/industrial complex and the Feminist Marriage/Divorce Industrial complex. Herewith, BA in her own words:

Now, to be fair, Broke-Ass Grouch is neither Mexican nor was she poor until three years ago. Like many of you good-doers, Broke-Ass was raised by middle-class intellectuals to be a middle-class intellectual, and graduated from a snooty liberal arts college. Also, like many of you, she spent her career working at high-status, low-paying, terminally insecure work.

To be fair, BA's first critical error - spending the present day value of $200k on a Liberal Arts college undergrad degree In English Literature - was made as a teenager. Having been a teenager myself I can sympathize endlessly. The family resources that went into an English Degree from Bennigton College could not have been more ill spent. Let's give BA a Mulligan for that critical error... and let us learn a lesson. If you are not rich, say liquid-after-tax net worth of $5mm+... don't let the University/Industrial complex extort a fortune for an education that could be had for a library card... $200k for an engineering degree from MIT might well be worth it; $100k for an engineering degree from Georgia Tech is most definitely worth it... knowing your Faust and Thoreau, et al? Not so much. Still, BA can turn a phrase. Somehow, I think she would have been better off with a mortgage free house and a State University degree than the Lit Degree from Bennington. Just saying.

Japan Powering Down?

2011-03-27T17:29:00.000-07:00

Read this front page story on The Wall Street Journal's web site: "Powering Down for the Long Term".

Holy SMOKES!!!!!! You like apples? How do you like them apples??!!

Think about it. The fact that the world's preeminent capitalist media operation is talking about a permanent end of energy consumption growth in the world's 2nd/3rd largest economy means simply this:

The U.S. and China are next. Come on... Is the U.S. or China special? If not, then how far behind Japan is the permanent end of energy consumption growth for the other 2 of 3? Not very long at all.

While the U.S. might not be as efficient in its uses of energy, and therefore might tolerate the first round of "forced efficiency" reasonably well, this is not true of China, India, Japan, and the other large population but low per capita energy consumers (compared to the U.S.). Ergo, these nations will likely be willing to bid the price of energy much higher... with all of that outcome's concomitant effects on the U.S. as the world's largest Oil importer (as well as a nation that has come to rely on cheap Natural Gas... something the continuance of which I think must be questioned vigorously).

This is big stuff. Richard Heinlein, author of "Power Down", should be doing a victory lap right about now. Hat tip to Rich.

Why We/NATO are in Libya

2011-03-25T17:44:00.000-07:00

Most of the current leaders of the Western industrialized nations will not survive their next election if Oil is over $100 per barrel and NONE of them would survive $130 Oil.

And that's why we are bombing Libya.

This is Sarkozy's war. Without it, he was toast. France led the U.K., the U.S. and NATO into this clusterf***.

Rwanda, the Congo, North Korea et al, do not warrant a single bomb despite millions of deaths! Yet Libya does...

This is what Peak Oil looks like politically. For now.

Its not the Nuclear Reactors we need to worry about... Its the Nuclear Waste

2011-03-25T05:32:00.000-07:00

Nuclear Power has proven to be incredibly safe and effective. To be convenient and carbonless.

Under no circumstance is Nuclear Power "clean". The simple fact is this:

The United States has put off its nuclear waste problem for 4 decades, and we are now simply a disaster waiting to happen. While it might be 1 in 10,000 that the Indian Point Power Plant will experience any kind of catastrophic outcome in any given year (and I doubt that probability calculation greatly), the odds that America will suffer a significant crisis due to its unattended nuclear waste approaches the proverbial "sure thing".

Get googling. Read.

How did this come to pass? Given Medicare, Social Security, the Federal Budget Deficit, etc... I think that's a f&%$&*ing dumb question. Our governments - federal and local - are dominated by wordsmiths (lawyers), not engineers, mechanics, mathematicians, and scientists. As our society's complexities have grown exponentially, the ability of the people minding the store to understand the critical issues facing that complexity has not grown to meet our needs.

I hope to good heavens that the American people come around to the real Nuclear issue - and it isn't earthquakes or tsunamis.

More soon.

Saudi Arabia making up for Libya?

2011-03-24T06:30:00.000-07:00

Is the KSA making up for the lost exports from Libya? U.S. Oil imports over the past 4 weeks say no.

Over the last four weeks, crude oil imports have averaged nearly 8.5 million barrels per day, 393 thousand barrels per day below the same four-week period last year.

Seems there is good reason, given Oil inelasticity, for the surge in prices over the past month or so.

----------------------------------------------

Copper reversed course, and Gold and Silver are making new highs. Not sure what to make of it all... I do like Platinum, though.... for whatever that's worth.

----------------------------------------------

Anybody that claims that people don't game ANY and EVERY entitlement program should read this. The demand for free money, or free services, will always be unlimited.

----------------------------------------------

Spring duty on the homestead has been a bit overwhelming. Chasing kids, both mine and the goats', fencing, feeding, starting seeds, digging garden beds... not a lot of time left over for blogging - and absolutely NO NEED to contrive exercise routines at a "fitness club".

Welcome to the Post-Peak Oil world. No bells rang (though not a few bombs have been dropped). First, employment fell... it humbled people, and the people adapted (except those that won't; nature will see to them). The story is unfolding, and will continue unfolding for the next human lifetime. Between here and there, the life of an individual living in the industrial West is going to change fairly dramatically. For most, it may well unfold slowly enough to make adjustments for on the way. For others, not so much. Still, I think this is a time to enjoy... as there are no true "do overs" in person's life.

The MENA Catch 22

2011-03-18T10:12:00.001-07:00

What's the U.N. and the Western powers going to do? Demand individual rights for Libyans but not for Saudis? Or is Totalitarianism OK for Saudi Arabia but not for Libya?

This has just opened a whole other can of worms for the West.

Good luck, fellas.

Mega Cities, Cont...

2011-03-17T19:57:00.000-07:00

The give and take among thinking people on very complicated social outcomes requires all of us to be willing to evolve our beliefs and opinions. Not a few of the people commenting here have turned my head around... and not a few times, either. One has to be willing to evolve...

I have been noodling ChrisinGa's comments in my previous post. One of his lines really got my attention:

I guess I will just have to disagree with all of you. We already see today suburbia contracting back into the core of the cities today. We already see the highway system, its bridges, and drainage systems falling apart.

Resources will be drawn into the cities all along the way. Sure large scale farming will receive resources. Most especially those along rail lines and those that are drawn into what was once suburbia. And we are also likely to see manufacturing come back to the states.

There is no doubt that there will be a process the transforms us from what we are today to what we will be. But I can assure you with the vast majority of the population in the cities that with the exception of farming rural America will get the short end of the stick in nearly every category first.

"Resources will be drawn into cities along the way." That line went on, over and over again in my mind all day... "along the way"... My sense is that Chris is right, only he puts the "along the way" well into the future, and I am starting to believe (not finished thinking about it, but wanted to expand the discussion) that his "Resources will be drawn into cities along the way" has likely been going on for some time, may well continue for some time, but is closer to the end than the beginning.

Look at the U.S. banking center, New York. The only thing keeping the lights on in New York is the Federal Reserve. The Fed has engineered an environment whereby the big New York banks and hedge funds can borrow money for nearly ZERO and take the proceeds and buy long maturity bonds. The Fed has telegraphed every move to this crew along the way, and these folks are printing money.

That does not mean that that strategy won't end badly... I think it will... but it does comport with Chris' idea about resources being drawn in. The money these banks/funds are making on the spread is coming from somewhere... the gain is somebody's loss.

My view of Mega Cities as technological islands that need to import everything ALSO comports with Chris' view AND my assertion that this is already well under way. The resources HAVE been being drawn into the large cities, and I would assert that the tipping point for the failure of that phenomenon is not that far in the future for the mega-cities in the nations importing the most Oil.

Mega Cities

2011-03-16T07:04:00.000-07:00

I can't help but think things out in terms of financial outcomes. When I began writing this blog it was to forewarn clients, family, and friends about what was - at the time - the coming collision of the housing crash and Oil price surge and what it was likely to do to their life savings.

Now, using that framework I want to expand on my thought that "mega cities" will become "uninhabitable" in an energy constrained world.

First, one must accept the assumption - that serious energy constrainment (I know, the word is not in the dictionary... but I like the way it sounds) is coming, at least in how industrial age energy is currently defined. If you reject this, then you will reject the rest of my assertions.

"Amateurs talk strategy. Professionals talk logistics." - unknown

Mega-cities: New York, Sao Paulo, Tokyo, L.A. et al are technological islands - they must import everything. Think about that for a minute. These regions have supply chain infrastructure/liabilities that are completely reliant on the smooth functioning of myriad other systems: commuting and transportation systems to bring workers in, maintenance systems, worker healthcare systems, food distribution systems... now take a look at what is happening in Tokyo right now. Somewhat unaffected directly by the earthquake and tsunami their distribution system has failed miserably.

My parents-in-law live near Osaka another couple hundred miles further than Tokyo from the disaster... and they have empty stores and rolling blackouts. The only difference is this: In a world wide energy constrained system, one like Japan is experiencing now, the cavalry is NOT coming because the cavalry is energy constrained, too. So, here you are on this energy constrained technological island (not Japan, ALL mega-cities are "technological islands) that requires the importation of everything AND it requires the exportation of all of the stuff previously imported (though in a somewhat different form): Refuse and sewage.

My assertion is pretty simple, really. Mega-cities will not be able to logistically support their populations with food, water, and other supplies, and will be unable to process the refuse and sewage during a period of serious energy constrainment... and the outcome would unfold at lightening speed... and, this will have seriously negative effects on property values and employment, and hence banking, within these mega-cities. These cities will depopulate, and will do so long before the "roving bands of looters" scenario unfolds (not that people won't take what they need... they will simply run out of stuff to take and with food imports into the technological island falling will need to find better ways to spend their time).

The economic strains coming from all of this would be profound. Why spend your life working to acquire assets that will, by mathematical necessity, become nearly worthless? You'd be far better doing just about anything else. 20 million people living on a postage stamp piece of land is not a well considered living situation as currently constructed here in the U.S. in the absence of energy inputs in order to provision them.

My friend the Mad Scientist has reminded me often that India has triple the population and roughly the same land area, and that is true (of course, India does not have the U.S. need for space heating). I did not say we couldn't live with what we have... I said that the mega-cities would depopulate and the property prices would decline dramatically with all of that outcome's effects on banking. Americans will have a very hard time adjusting to an Indian standard of living.

If you accept my analysis so far... why would you send your offspring to be educated, at great expense in years and treasure, in a field that will require him/her to live in a mega city in order to make a living? Why pay big bucks to live in squalor? Wouldn't you be better off educating them in something very practical (engineering, dentistry, plumbing.... one of my buddies in Florida is a Dentist of sorts... he reads my stuff and recently told me that his son is going to be studying engineering in undergrad, and credits me somewhat. I was thrilled to hear it, and even more thrilled to here that his son wants to go to dental school after engineering college) acquiring productive farm land (I know I have been beating this drum for years... and farm prices are up BIG... but my bet is that they are a far better investment than a liberal arts degree from a "progressive" leaning college), opening a family business, and getting acclimated to your new life? Why would you continue to pay the mortgage on a condo that will be bird nesting grounds? Or live in a home with a property tax bill that is draining the life from you? Why would you buy an expensive automobile?

The population flight to the mega cities of the past 100 years was a flight towards the energy importing, technological islands I mentioned above. As the energy available for import into these regions declines, so will the pull that these regions have exerted on the population. The events unfolding in Japan will put nuclear on hold, long enough, to demolish the attempt to cushion the energy blow from Oil - not that I necessarily agree that doing so is a good idea; or not - long enough that my scenario, I think, is the most likely scenario to unfold.

Lastly, the rules seem to change every f$&**!! day. These are the rules as I see them given the latest data. If the data changes, I will change my mind.

"Millions in Japan freeze without heat, electricity"

2011-03-15T06:49:00.000-07:00

"Millions in Japan freeze without heat, electricity".

Fast forward that to 2018 and fill in Chicago or Green Bay; Boston or New York City; Philadelphia or Cleveland.

The simple fact is this: We here in the U.S. are seeing our future circumstances now, in Japan. The nuclear mirage is over.

The energy crisis is far more than being inconvenienced by slightly higher gasoline prices (Gasoline makes for a very poor heating fuel, btw. And when crude is cracked the primary output is 1 part diesel and 2 parts gasoline, with lesser amounts of other useful stuff). We cannot shift gasoline production over to heating fuel. That just ain't the way things work.

The U.S. will need to shift HARD to Nat Gas heating, and it really won't have as much time as we might think.

Moreover, you know that debate on the Web about whether City or Country living is best in an energy constrained world? I think we have our answer (although defining "city" is an issue). Mega cities will be uninhabitable. Period.

So much for the Nuclear Solution....

2011-03-14T07:54:00.000-07:00

As a practical matter, nuclear energy as a solution to the West's declining petroleum supplies is a dead issue, at least in my lifetime. The time frame for substantial declines in petroleum availability is short and it is upon us... and the time frame for a nuclear answer to that problem is long and any attempt to ameliorate petroleum's decline with nuclear power has been put on hold indefinitely.

Indefinitely.

In reality, nuclear power was the only energy source that had any chance whatsoever of cushioning the energy shock. Now, that cushion is gone.

Take a moment and wrap your mind around that. Let it wander where it will. The are a great many permutations of outcomes to come from this.

--------------------------------------------

It would seem that with cross boarder forces entering Bahrain that Pioneer's analysis has been borne out in the short term. I must say that I had not even considered that this could happen... I need to give it some thought.

-----------------------------------------

On an entirely different subject... and please don't take this out of context...

I don't watch T.V. for the most part, and I (almost) NEVER watch news (propaganda) channels as there is enough news to be had on the Web absent the commercial pitch (well, at least I can ignore and click away from the commercial pitch online). I have to question how healthy it is for people to be bombarded with the misery one can find in the world - earthquakes in Haiti and Japan, Tsunami's in Indonesia and Japan, wolves eating children in India, Shark attacks in Egypt, car crashes, murders, rapes, child molestations... while I don't watch T.V., that is not true for the rest of my family, and I watch the impact this rolling disaster menu has on them... not to mention the voyeur "news" media, who couldn't possibly care less about anything - except ratings and the rate that they can sell advertising time for for hooking us into events that are beyond our ability to control or influence but that do effect us quite negatively.

It would seem that tuning into disasters on T.V. is not helpful for the victims or the individual watching. If unaffected individual want to do something, it seem to be better to turn off the T.V. and do something to prepare for the day when you and yours are confronted by the unthinkable.

Yours for a better world,

Greg

Nuclear Who?

2011-03-13T08:39:00.000-07:00

Somehow, I think the future of nuclear power isn't what is was a couple days ago... and I hope that I don't turn on my computer tomorrow and find that the worst has happened at that Japanese nuclear plant.

This is not impersonal for us: my wife is Japanese and her parents and 3 siblings live there.... but I'll spare you the platitudes. The really amazing thing to consider is what is happening all around us regarding failures caused by complexity.

There are 2 ways of looking (so far) at the nuclear plants in Japan:

1: Nuclear power is simply too dangerous irrespective of the outcome in Japan.

2: A 9.0 earthquake and tsunami proved that containment systems were sufficient in a worse case scenario (if that proves to be the case here).

I know this is anathema to many, but this disaster might just prove nuclear technology is capable of handling surreal disaster inputs - and it will definitely yield tons of data on what can be improved.

Saudi Arabia's Catch 22

2011-03-10T18:18:00.000-08:00

By now we have all heard reports of security forces firing on demonstrating citizens in the Kingdom of Saudi Arabia ("KSA").

KSA is in a very precarious situation: They cannot survive $50 Oil internally and they will lose their international support and sponsorship should Oil rise to, say, $150 (pulling both numbers out from my hat). If Oil prices were to collapse again, as they did in 2008 - 2009, The House of Saud would be without the Oil revenue they rely on to placate the masses... it then follows that they will endeavor to avoid this outcome at all costs. Given that, isn't it quite possible that they could error on the side of overly constricting output? Could this error lead to $150 or even $200 oil for an extended period of time? Sure it could. Wouldn't that have profound political and economic outcomes here in the West and the U.S. in particular? YOU BET.

I could game this out in scenario after scenario... but I think you get the idea. KSA simply cannot allow another price collapse to unfold... and given the (to my mind) certainty of what would happen as a result, a price collapse does not seem to be in the best interests of the Oil importers, either - $100 is better than $300. TPTB in the KSA simply must be looking at what happened to oil prices following the the 2008 price spike and dirtying their underwear with visions of hangmen's nooses and executioner's axes dancing in their heads. ( My brother recently quiped that they "can go out like the English monarchy or the French monarchy". My sense is that that is not far from what they must be thinking about as I write this.)

This is not to say that the price of Oil could come in, and hard, if China's soft landing fails to materialize. Looking at cooper prices these last couple of weeks leaves me more than somewhat concerned about what is going on over there... far more so than their "surprise" trade deficit. Actually, the trade deficit and the copper price decline should be mutually exclusive events (to my mind).... we shall have to wait for more data... if the price decline for copper is the winning data point, one can't help but become completely freaked about the price of the overall commodity complex... even Oil.

The House of Saud has been sleeping under the Sword of Damocles for quite some time. It appears to me that the thread holding that sword aloft is coming undone.

This is truly a fascinating time to be a thinking person.

-------------------------------------------

I think the great commodity run is done. I know I have alluded and hinted it was there at year end... so sue me. A couple of months off does not make my analysis incorrect. You can stick a fork in it. Copper is leading the way - the correlation between copper and the precious metals is well over 90%. Inflation? NAFC - maybe you THINK you are seeing inflation in commodity prices... let me know when you see it in housing and labor prices or in bank lending... my bet is your vision will be a great deal worse and your hair quite a bit more grey (too late for me, there just ain't much black hair left) before you see ANY of those things... but if you do see it, by all means, point it out to me... cause I must be freaking blind.

Bonds and high dividend paying stocks are where its at in my humble opinion. I know that the guys over at The Daily Reckoning believe housing has bottomed and the precious metals are a long way from the top... I reject housing out of hand, and I will trust in copper more than anything else to lead me out of temptation regarding precious metals. ESPECIALLY if Oil goes up big (and smushes China's and Europe's economy in addition to ours) because of supply issues (which will only lead to demand destruction the likes of which will be absolutely do wonders for the prices of bonds from issuers able to fulfill their obligations).

Of course, there are flies in this ointment, too. Grain prices are ALL about the weather and growing conditions this year (I know some people blame food/grain prices on Bernake... but if that were the case the grain markets would be in contango - not backwardation) but if the crop is good... look for prices to go down like a rock in a pond... at least when compared to the front month prices - that's what backwardation looks like as a practical matter. The better risk/reward play (unless you can predict long term weather patterns) is elsewhere.

Down On The Farm

2011-03-09T20:04:00.000-08:00

This is my year to get my homestead where I have always wanted it.

First things first: upon arriving we set out to provision our pantry with a year's worth of food. Done.

Wilbur IV made the ultimate sacrifice and is now in the freezer. Then it was time to lay out the Hog Yard. We will have 4 breeding sows and a boar this year. Ms. Piggy has already put 2 litters on the ground - 9 in August and 8 several days ago. Her piglets have now grown to breeding age, and we will keep 3 plus Ms. Piggy. I plan to plant out over an acre and a half of corn, beans, and pumpkins that will be primarily next Fall's finishing feed for this years piglets. The hogs will harvest it themselves, and when its gone... deh-deh-deh- DUH....

It would appear that our 4 cows are bred - and that our Dexter bull has been doing the right thing. We are looking forward to having farm fresh milk again. We lost nearly half of our goats over the winter to a parasitic infection that seems to be going around Tennessee. Still, I plan to fence an acre of sloping pasture to hold them next winter as I don't think the wetness associated with our bottom land in winter helped. The market price for goats this year is double what it was 4 years ago. The egg incubator is full - 270 eggs of which at least 200 will hatch, and perhaps 140 will make it to adulthood.

I built 8, 4' x 8' by 12" deep cedar wood raised beds for the garden along with 1, 24' x 4' x 8" cinderblock assembled raised bed. This year I am adopting the "square foot gardening" schematic for most vegetables but corn, beans, melons, and potatoes are still going in the field.

I will share some photos over the coming days. Let Saudi Arabia blow up - I'm prepared.

We have BECOME the Philistines...

2011-03-06T11:30:00.000-08:00

Please read this article about the insider trading trial of Raj Rajaratnam. Notice anything? He is spending $20 million + on his legal defense. Think about that for a minute. That means that no one, except the top 1/100 of 1% can afford to defend themselves against a criminal accusation by the U.S. Federal Government. So what's the difference between the U.S. or China or the Former U.S.S.R.? The charade of a trial?

Our government has run amok. Look at our expenditures. Look at our deficits. Look at our prison population. Look at the number of foreign civilians and conscripts we kill in military conflicts.

Now read this. The government has really outdone itself here. The U.S. Federal Government has indicted an American citizen for distributing reading material on jury nullification near the New York Federal Court House.

Now have a gander at this. The U.S. Federal Government is providing what are essentially military TANKS to local police departments. I can't be the only American that finds this disconcerting....

--------------------------------------------

If you were to look up Borderline Personality Disorder in the proverbial dictionary, you would find the picture of one Ms. Rahna Reiko Rizzuto, she of "Hiroshima in the Morning" fame and a conscript of Feminist Publishing, Inc. (that's the real name of her publisher).

I gotta tell you, we have crossed some strange f*&^ing boundary with this attempt by the FemiNazi goon squad to do I'm not really sure what.

A friend of mine from my childhood that I have become reacquainted with on FaceBook posted this youtube piece ostensibly about how advertising is committing violence against women.

As I watched I realized that I was viewing a recruiting video for a fringe religion/cult and their call for Jihad. I look at those young, impressionable women in the viewing audience.... I see bright 18 to 22 year old undergrads being drawn into a life of misery, loneliness, anger... even rage. Granted, Jean Kilbourne's contribution to the discussion about addiction, alcoholism, and smoking is commendable. Her thinly veiled hatred of men is not.

We're here

2011-03-04T06:13:00.000-08:00

Oil continues to roll.

"Peak Oil" is soooooo passe... and past tense. The phrase itself is now firmly entrenched in the popular lexicon, if not in government and banking's. The implications of the issue are just so overwhelming that even the vast majority of highly intelligent and well educated adults just doesn't know how to address it. Believe me, they would if they could - but that would mean coming to grips with ALL of this phenomenon's implications.

I am speaking about people my age, of a certain age if you will, with offspring that are now young adults. Our issue need our guidance and direction at this critical juncture... and where, and how, are we directing them? In a direction that takes no account of what the absolute certainty of what Peak Oil means.

The new generation of young adults will need the same things that every new generation has needed: A home, skills to make a living, and skills to operate a family unit and within a community. Yet my generation is still pointing our young into educational endeavors that will yield no practical skills but will leave them with debts sufficient to prevent them from acquiring a debt free home BEFORE they reach a certain age (just ask any 60 something person who still has mortgage debt AND a 5 figure property tax bill how his financial health is affecting their physical health).

To be fair, "Peak Oil" likely times well with "Peak People"... and in a Peak People scenario, some folks by mathematical necessity must remain childless and houseless.... but we are talking micro solutions here (you guys know how I feel about macro solutions)... and if you want grandchildren (and I really do), this is a time to pay close attention to your personal forecasting models.

Family businesses and family farms et al, are going to matter a great deal in the financial planning of the future. Financial assets? Beautiful now but could be quite ugly later. The small family business might well be today's "ugly duckling". For middle class millionaires spending $200k on an undergraduate degree in liberal arts, irrespective of prestigious the institution, might well echo painfully for a couple of generations. A modest, debt free home will "echo in eternity", as will practical skills in everyday life. Engineer, dentist, leather worker, horticulturist? Mazul Tov! Sensitivity coach, journalist (rofl!), english prof (really rofl!), political activist (really, really ROFL!!!)? Oy. "And from that you make a living?'

We're "here", and we've been here for 3 years + or -. Things will evolve just the way they do, and at the pace they do... this will present great opportunities and great challenges, and the beer will still be cold, and waves will roll in, and life will always be good - even hard times... hard times are better than no times, if you catch my drift.

Oh, and one last thing... given the future for transportation fuels, if you want to have any kind of relationship with your adult children and their children you gotta think long and hard about just how far away from the family compound the college they attend is. My wife came hear from Asia as an exchange student... and now her parents have to travel 9,000 miles to see their daughter and their grandchildren. How much longer do you think that model will work?

No More War for Oil

2011-03-01T19:16:00.000-08:00

I hope to good G-d that the U.S. does not involve itself in another War for Oil.

I want to doubt that this administration would be that daft... I hope and pray.

The end of America's addiction to Oil is at hand. You can see it from here. Maybe its not what we had in mind.... but there it is.

The public relations machines are cranking full tilt. There is little to no truth anywhere in the media - a lot of guessing, a lot of lying, and a lot of hoping... or more accurately, "wishcasting" is cropping up everywhere in the media. The facts are this. Oil went from $10 to well over $100 over the period 1999 - 2008. After Oil's subsequent crash (along with everything else) the pitch was that that episode in the price of Oil was a once in a lifetime event, a matter of speculation, a "bubble". Jump cut nearly 3 years hence: The MENA are awakening to the facts of their demographics, inability to grow food, and declining natural resources... and the average price of crude oil on the world markets is well in excess of $100.

In the past I mentioned that the oil for food trade will be interesting to watch to see how it balances out. I think that that is now coming to an inflection point. The impacts on employment, tax collection, the deficits (federal, trade, California!), social security/medicare/medicaide/food stamps et al are going to be on the order of "Shock and Awe".

The last thing we need is to waste more treasure, and worse - American lives - on another War for Oil.

Sunni vs Shia in MENA

2011-02-28T09:49:00.000-08:00

Today's Quote:

“There has to be a major rethinking of how the U.S. engages with that (MENA) part of the world. We have to make clear that our security no longer comes at the expense of poor governance and no rights for the people in those countries. All of the givens are gone.” - Christopher Boucek, Carnegie Endowment for International Peace

I got a couple of emails from old friends of mine that read my blog about my political analysis in the MENA. Seems I have not been entirely clear.

I do not think that the MENA will erupt into handholding democrats singing the praises of James Madison anytime soon. I do think that after a period of insanity much of the MENA will evolve into something of a democracy. Could a protracted civil war between Sunni and Shia evolve in the region? Yes, but suspect it will not go on for all that long. In the meantime, I absolutely, positively foresee terrible struggles for power in much of the region that will send Oil to $150 - $250. If I knew exactly when any of this would occur, I would be able to save a great many lives with a few strategically placed phone calls.... alas, that is not to be. I am long WTI futures, so I am eating my own cooking. Irrespective of whoever takes over from the regimes now in power I think the price of Oil goes much, much higher.

But I could be wrong. Oil could go to $300 (or $70, but I think that very unlikely as there is now a new, and semi permanent risk premium in the Oil markets.). No matter what, I would not be short Oil here.

-------------------------------------------

Not a smoker myself, but I love the premise. This is pretty much how I feel about growing my own food.

------------------------------------------

Police agencies brace for federal budget cuts? Wah. Best news I've heard in some time. Time for these people to engage in cost benefit analysis. We need police protection, not police harassment and loss of our Constitutional rights via silly legislation that has only been enforced because of outrageous government spending.

---------------------------------------------

The end of occupation land war? Thank G-D!!! And its only a nice start. While we are at it, let's reconsider dropping bombs from airplanes onto population centers and wasting money on carrier groups that technology will make obsolete. These forces were developed to protect petroleum tankers on the high seas and not for any other reason... we have less than 20 years of oil on ships left in the history of mankind, and perhaps less than 10 with volume worth sweating. Get with the program.

And Secretary Gates, you are a good and honorable man... you don't need to sugar coat things so much. It is what it is. Many of our best and brightest future military leaders will best serve society in other capacities.

--------------------------------------------

Not a few of my Liberal friends read my stuff, and couple of them actually called me in dismay after reading my post about my theory of how abortion, among other things, contributed to the liberal birth dearth/baby bust. Its brutal to be confronted with the realities of demographics. There is good news, dearest Libs: You can marry and have babies anytime you want to. Here's an excellent piece on the analysis of home economics and relationship management using the classical economic theory of comparative advantage. I thought you folks might find this helpful.

---------------------------------------------

When will people stop doing this to themselves? If we can figure that out, we will have the answer to inflation or deflation.

And the beat goes on.

------------------------------------------