Europe's Safety Net has caught them round the neck

Europe's safety net? It has frazzled into a noose. Does anybody in the U.S. see this? Quite fascinating, really. And Europe does not even have to pay for its own defense!

The real question is: Who is going to bail out the U.K.? They aren't part of the Euro cluster f*ck. They are in awful shape, and I guess the only entity left to save the U.K. is the I.M.F.

Now who is going to save the IMF?

"I Fought the Fed, and the Fed Won."

"I fought the Fed, and the Fed won. I fought the Fed, and the Fed WON."

Those lyrics will be taped to the front of my computer for the REST OF MY LIFE.

I am a battered and worn deflationist. I was CERTAIN that the Fed could not re-inflate to the extent they have... there is an old maxim on Wall Street: "Do not fight the Fed."

UGHGHGHGH!

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I am not sure which is worse: The hypocrisy of age or the arrogance of youth. Since I am right in the middle I expect I show a touch of each...

I received this in an email today, it is going around the Web fairly briskly:

YOU WANT TO GET MAD? We had eight years of Bush and Cheney, but now you get mad! You didn’t get mad when the Supreme Court stopped a legal recount and appointed a President. You didn’t get mad when Cheney allowed Energy company officials to dictate energy policy. You didn’t get mad when a covert CIA operative got ousted. You didn’t get mad when the Patriot Act got passed.. You didn’t get mad when we illegally invaded a country that posed no threat to us. You didn’t get mad when we spent over 600 billion(and counting) on said illegal war. You didn’t get mad when over 10 billion dollars just disappeared in Iraq. You didn’t get mad when you found out we were torturing people. You didn’t get mad when the government was illegally wiretapping Americans. You didn’t get mad when we didn’t catch Bin Laden. You didn’t get mad when you saw the horrible conditions at Walter Reed. You didn’t get mad when we let a major US city drown. You didn’t get mad when we gave a 900 billion tax break to the rich. You didn’t get mad when, using reconciliation; a trillion dollars of our tax dollars were redirected to insurance companies for Medicare Advantage which cost over 20 percent more for basically the same services that Medicare provides. You didn’t get mad when the deficit hit the trillion dollar mark, and our debt hit the thirteen trillion dollar mark. You finally got mad when the government decided that people in America deserved the right to see a doctor if they are sick. Yes, illegal wars, lies, corruption, torture, stealing your tax dollars to make the rich richer, are all okay with you, but helping other Americans… oh hell no. AND NOW YOU’RE MAD?

I have been a stone cold capitalist and registered Republican all of my life, even moved from Pro-Choice to Pro Life sometime in early adulthood. That does not mean I cannot recognize some legitimate criticism when I see it (not that there aren't a number of issues that were bi-partisan efforts within the aforementioned). People on both sides really, really, really need to recognize when their political leaders are FOS. BTW, note to Lefties... not every Republican/Conservative/Libertarian - whatever you want to call us - supported the illegal and immoral War in Iraq or an intractable War in Afghanistan against some truly, truly bad people that have probably worn out their welcome on this earth (but what's that got to do with War?). Not every one of us believes that the Military budget of the U.S. should equal 50% of the total military expenditures on the planet. Not every one of us wants to continue the "War on Drugs".

There are quite a few of us that want all of us to accept personal responsibility, shrink government (including the military and law enforcement/prison industrial complex budgets... not just the social programs), and firmly believe that the Right to Life should extend to fetuses, Bedouin tribesmen, Iraqi goat herders, Israelis, and American Service Personnel, and people working in the Twin Towers on 9/11. This is not to say that criminals should not be brought to justice, but it is to say that a cost/benefit analysis brought to bear long ago would have yielded fantastic dividends. Unfortunately, we do not have a Department of Cost/Benefit Analysis (though we really should).

What we have is an unending manipulation of the American people by special interest groups and their contacts in the media. Let me give you a couple of examples:

We've all heard that the folks at the SEC were watching PORN when they should have been policing Wall Street, right? Is there any difference, as far as their not doing their duty, if they were watching "Little Oral Annie" or "Little House on the Prairie"? Believe me, there were plenty of folks at the SEC, and every other government agency, using their computers to access the Home Shopping Network, YouTube, Ebay, The American Energy Crisis... (hell, a urologist I know told me that men my age should watch Porn to up their testosterone and keep their prostate from going Chernobyl.... just saying.) What's the difference?

When the war mongering jag offs want to do something really dumb, and they can't get the populace to go along with sending their sons off to death and dismemberment they trot out the "rape story". It worked in Afghanistan , Iraq, Somalia.... and if you watch closely, "they" will use it again. Sometimes they call it "subjugation of women". I wonder how it is that an American mom goes from being unwilling to lose her son in some pointless conflict to being willing to do so over an alleged crime half a world away.

You saw it when the Feds raided that FLDS compound in Arizona a couple of years back. Yep. "RAPE"!!! Cried the authorities, and so 500 families had to be seized and broken up. I watched as my wife cursed the TV... it worked on her. Have you heard anything about those "Rapes!" since? No, they needed to cover their goose-stepping, invasion of Poland style storm trooping. The retraction was on page 17 in very small type right under the ads for "used microwaves"..., and never mind that if you took ANY random 500 family sampling in the US you would likely find far more child abuse at first blush than these jag-offs found by taking the entire community hostage.

When the government needs an excuse to engage in immoral or unpopular wars, or to crush an unpopular church, out comes the tried and true "Rape"!

I am sure that I would be outraged at the way the Afghani's treat their women - does that mean my son has to go to war to right the world's wrongs? What about the "collateral damage" folks? I'll pass, thanks.

We are under constant manipulation by the MSM, and if you find my thoughts have any basis in fact, it would seem that the MSM is being manipulated pretty effectively, too.

Oh, and I don't want to pay government workers to do ANYTHING but work when they are at work. I don't care if its Porn or Christian Outreach... do it on your own time.

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So... prosecutors are investigating Goldman Sachs... what a surprise. I am not suggesting that there is not a good chance that some laws might have been broken - just not what you might think or where you might think. Besides, what the U.S. needs is a revamped banking system. The current system has been dominated by the same old/same old, group think cronyism B.S., for so long this was the completely expected outcome. I mean, come one... anybody notice the one school that nearly every top exec of the bailed out firms had in common? You mean there are no smart people anywhere else?

More on this and the real issue... the reason Credit Default Swaps REALLY exist... coming soon.

The Road to Hell...

"The Road to Hell is paved with good Intentions."- unknown

Healthcare, extended unemployment, Goldman Sach's on mission from G-d, Medicare, Social Security, Deep Water Drilling(!), Bank Bailouts, Abortion "Rights", overindulging our kids... the RTH is indeed pave with the best of intentions...

Said another way... its OK to blow up the best political endeavor in the history of mankind, as long as you publish nice platitudes about judging a society by how they treat their weakest members, blah, blah, blah... and it always seems to be said by someone getting or expecting a government pension or some other non net taxpayer...

Our healthcare system IS broken... I will give you that, Mr. President et al (by the way, I am not picking on Obama who I believe has started to show some promise; maybe I am being optimistic, and no I have not become an Obama policy supporter, but it seems the man has found his footing as well as his b*lls... one can only hope. I would love to see him recall troops from Germany, Japan, Korea... and anywhere else that is not currently a hot point, and then I would like him to use that as leverage with the hotpoint folks to bring those troops home, too... not to worry, though... the troops will be there until our financial system implodes)... so is our financial system, our legal system, our justice and law enforcement system, our transportation system, our infrastructure system... and just about every other system political meddling can kerbolix... Here is where this rant is going.

Folks on the Left and the Right in America should take a good, hard, long look at Europe. The difference between Europe and America is that Europe has a geographical divide to its most productive and least productive peoples - and that imbalance you are now seeing in unraveling of Portugal, Spain, Italy, and Greece (PIGS) and its effects on the Eurozone - while America, which has the EXACT SAME IMBALANCES!!!!!!! just not geographically... No, our least productive peoples are spread around fairly well creating the exact same imbalances as we are seeing in Europe, only the U.S. cannot eject their slackers from the Union like the European Union can.

I can hear the fuse burning, and smell the cordite... I am just waiting for the Ka-BOOM.

The Dual in Congress Today

After watching the Goldman Sachs Senate hearings today I came away with the impression that I was watching a dual. An intellectual dual between two opponents, only one of which was actually armed with a brain - with predictable results.

The PROBLEM was not the Goldman traders! They were doing what they were supposed to be doing. 100% of the trades discussed today were ZERO SUM TRADES. For every winner there was an equal and opposite loser. Only the unsophisticated nitwits running the hearing and perhaps a couple percent of their constituents believe that there was no one on the other side of these trades! Or that the folks ON THE OTHER SIDE were unsophisticated widows/orphans.

If this is the tack that the government is going to take, we are all doomed. Rather than fix the really f&*^ed up system, the government appears to wish to make an example out of a few unfortunate individuals and let the system keep grinding the American people into the cement.

Way to go, Senators.

Let's Talk Homesteading

I thought I would report in on my findings on homesteading, this being my 5th growing season on the farm. (Those of you interested only in energy or politics can tune out... )

There is no such thing as "self sufficient". That's not what homesteading is about. Homesteading is a part time job for someone that has a family business or a very flexible work schedule. Have a 9 to 5 job that you MUST be at? Homesteading is not for you. That probably means that Homesteading really is not for folks in debt. If you are sweating a big mortgage, I don't see how you cut it Homesteading. This is not a way to get rich, this is a way to become more self-reliant. I think any mortgage at all makes it untenable. That means save a lot of money and/or buy a homestead with modest improvements.

In order to grow most of your own food you will need at least 5 productive acres, a small barn - large enough to hold a winter's worth of hay and hold your animals for working, whatever that may be - a full acre garden as a minimum and maybe up to all 5 acres in cultivation if you want a reasonable cash crop, but lets talk about what you will need to produce to provide most of your own food and grow or raise enough stuff to trade for feed or seed or what have you.

You do not need breeding animals necessarily. Raising one, or perhaps a couple of weanling pigs (you can buy them for $35 to $50 each when they are about 20 lbs) takes about 6 or 7 months until they reach slaughter weight and will supply all of the pork your family could ever eat in a year (about 180 lbs of dressed meat from each 250 lbs hog; a family of 5 with 3 teenagers would need to raise 2 hogs, and roughly half of their feed will come from kitchen refuse - hogs are the ultimate in recycling). Lard as a cooking oil is an option if you raise pigs (I didn't say you HAD to do that, or that I do, only that you have the option).

A herd of 6 goat does and 2 bucks (just in case one dies) will give you all of the milk, cheese, and goat meat you can stand (and you won't have to weed or cut the lawn if you move them around right by picketing them, especially if they have been bottle raised... but, be careful not to let goats get loose - they will HAPPILY kill every fruit tree, garden plant, and decorative bush you have in the blink of an eye. Each goat will only consume $60 per year in feed IF you have an acre of pasture (for the 8 goats) and decent rainfall. Droughts change the picture somewhat. We spend ZERO on vet bills for goats - we vaccinate and worm them ourselves, and do our best if one gets sick but we do not spend money for healthcare for goats. You shouldn't lose many goats if your slaughter rotation is correct (livestock lifecycle management is a science as well as an art. Which animals you choose from a herd, and when you choose them, for slaughter affects the future production of the herd. It is REALLY, REALLY dumb to lose (that is, died) an animal that you have fed and cared for rather than slaughter it to feed your family). If the herd becomes outsized, dairy does can always command a decent price in the market place, meat goats less so... perhaps $1 per pound on the hoof, which would barely cover your gas money in delivering them.

Milking is WORK. You have to do it everyday at roughly the same time. I don't like to milk twice per day... so I leave the kids on the nannies and only milk in the evening. We get less milk per nannie, but far more than we can use. Another thing... most nanny goats will go dry for 2 to 4 months per year, usually at the same time, so you won't have fresh milk all year round with goats. Either get a cow, or freeze the goat milk, or go to the store.

Goats are FANTASTIC for improving pastures in an organic environment. Their hooves do no damage, and they eat broad leaf weeds, which cows, horses and even sheep will not eat. This takes competitive pressure off of the grasses in your pasture, and their manure does not kill a couple square feet of pasture with each "flop" as is the case with cows - in fact their manure is evenly distributed and fertilizes the pasture nicely.

Raising "Bottle Calves", unwanted bull calves from dairy farms and such, can be purchased for about $100. If you have enough grass, that with $50 of calf milk replacer will get you a 1,000 lbs steer in about a year which will yield 600 to 650 lbs of meat. Usually that is too much for a family (unless you have a bunch of teenage sons...), but it is not hard to find another family to sell a side of organic, grass raised beef to go in with you on the steer.

Chickens are a must. 50 dual purpose chickens and 5 roosters left to free range - you will still have to provide some feed, and of course water - will supply all of the eggs and poultry meat a family of 5 can consume, provided you have an incubator that can handle at least 50 eggs. I let our birds free range all year except spring and early summer (at which time I use chick tractors) because at that time of year they are a danger to my garden and I want to collect all of their eggs (free ranging saves on feed but you won't find all of their eggs... but you will find most of them once you know where their favorite nesting places are) to go into our incubator (I have a 280 egg commercial incubator and I will hatch out 500 to 600 chicks per year). I use them to trade and as gifts and keep about 150 each year. 50 meat roosters, 50 chickens for next year, and the balance for loss and predation.

Dual purpose birds like the Rhode Island Red will lay 5 to 6 eggs per week in June, but only 1 or 2 per week in December. You will have too many eggs during spring and summer, even if you have a big incubator, and that's ok... the hogs are only too happy to consume the excess eggs, and your neighbors will never be offended to find a box of fresh eggs at their doorstep.

Feed and hay are inexpensive if your slaughter rotation is managed properly, and that means keeping few animals over the winter... so you don't have to grow all of your feed. If you live in the country like we, it won't be hard to find a farmer to trade pork for corn...

The Garden.

There are kitchen gardens... and then there is the homesteader's garden. Kitchen gardens grow a couple of tasty tomatoes... I grow 400 lbs of potatoes and sweet potatoes per year, and a similar, if smaller by weight, volume of sweet corn, field corn (for corn meal and flower), beans, and peas. I will grow 50 broccoli heads (they freeze well), 25 to 35 heads of cabbage (think slaw), 50 to 100 roma tomato plants (for canning), onions, garlic, spinach, turnips (for root and greens), cucumbers for salads and pickling, peppers (hot and sweet), carrots, lettuce, squash, zucchini, artichokes, asparagus, rhubarb, watermelon, cantaloupe, blueberries, strawberries. Any thing that goes bad, is infested, or we have too much of goes to the hogs. Some folks play golf; I like gardening.

I have peach, pear, plum and apple tress from which we get barely enough fruit for the family... I should have planted more trees. It takes 3 years to get any production out of these tress, and then only if you buy yearling or 2 year old trees (I like the dwarf varieties). 6 trees of each is the bear minimum.

I don't grow wheat, I buy it. I am not a "locavore". I love bananas with my breakfast, citrus all day long, cook with olive oil and use it like most folks use butter. I LOVE coffee in the morning.

Most of your food calories will be in the form of grains, meat, dairy, eggs, and potatoes/beans... vegetarians and vegans would simply not be able to get enough calories out of their diet to do the kind of work that goes on at a homestead IMHO (this is when I get the "farmers in India don't eat meat" routine... usually from somebody who couldn't find India on a map). Also, organic farming/gardening requires manure - LOTS of manure - and manure comes from animals, and if you don't eat the excess (males) animals they will eat everything - including your garden.

Back to manure... We literally have TONS of the stuff accumulate under and around the hay rings during the winter, and pay a neighbor to use a front end loader to scoop it up and dump it in the garden. A better approach for the small holder might be to fence the animals in the area you intend to cultivate or garden during the winter. One of my neighbors plants his corn where ever the cows were wintered.

You can expect to spend $7k to $15k to outfit your place with all of the tools, materials, fencing, and livestock you need to get started. Yes, a piglet only costs $50... but you need a pig pen and that might run you $150 (they last decades), and feed ($75 - $100 per hog till slaughter), and a "coffin freezer" ($500) to keep your meat. Laying hens are $10 each - and you need 50 (alternatively, you can buy day old chicks for $2.50, feed them and wait 5 months for them to start to lay eggs...), and they need a coop. Raised beds don't just show up in your garden - you need blocks, or pavers, or garden timbers, as well as shovels, picks, tines, hoses, etc.... and the dirt doesn't jump into those beds, either, and the weeds don't jump out on command - expect to do some work. You will need to maintain barns and sheds if you have them, and build them if you do not. You will need a chop saw, a table saw, and a bunch of hand tools...

On the other hand... we NEVER have to "run to the store" to buy milk, eggs, and bread. In fact, we go days without moving a vehicle. The savings on gasoline and food purchases make the initial investment an excellent bet. The amount of time one spends driving around doing "errands" (and harming the environment, killing animals crossing our roads, risking your life and the lives of others) begins to pile up in earnest. Some people respond well, taking up hobbies and intellectual pursuits. Others without this capacity might say they are going stir crazy. That's up to you.

I have not, as yet, installed a green house. That is next. I do collect and save seeds, and seed potatoes and sweet potatoes. Its probably cheaper to just by the started plants... but I like to do it from scratch just for practice and fun.

A quick summary: 1 or 2 meat piglets purchased each spring and slaughtered in late fall. 1 bottle calf to be slaughtered at 12 to 18 months (there is always a risk that an animal dies, and if you have only one....), 8 goats (6 female, 2 male), 50 hens and 5 roosters, one mother of a garden, and 6 fruit trees of each sort (at a minimum). This will provide 100% of the meat, milk, and eggs, and over 50% of the fruit and vegetables for a family of 5. This will require a burst of effort and time each spring and fall (preserving is bigger than harvesting), but it will not be a full time job by any stretch - unless you want it to be. Of course, you can expand your efforts and leverage your time by raising more of one or all and marketing your production.

Oh, and time... 3 or 4 growing seasons before you start to put it all together, make your contacts and establish relationships, repair the damage the previous guy did to pastures or lack of maintenance on out-buildings, make mistakes, learn skills like food preservation, animal husbandry and care, and provision all of your hardware, tools, and equipment. It is doable, just not by reading books like "Gardening When It Counts". You have to actually do it, and its a lot more than gardening.

Let's Talk Oil

Let's Talk Oil and Petroleum products (that will have to include ethanol as that is now primarily a gasoline blending component).

Oil is back over $85 per barrel (and now Nat Gas and Coal are firming). Let's take a look at the EIA data (not that this is any longer indicative of any price signal... I am going somewhere else with this). Hit the link, and scroll down to Table 1., and then down to "Products Supplied".

While gasoline BY VOLUME has experienced a slight increase in YOY supply, by BTU's, gasoline YOY supply by BTU has remained flat as ethanol production (and consumption) has increased 8.2% and ethanol contains 65% of the BTU's of gasoline. Diesel & Jet fuel supplies has fallen YOY; this is notable considering how far of a decline 2009 was from 2008 in these fuels. Propane is up a bit, with the biggest gain coming from "Other Oils", that is: Bunker fuel, asphalt, etc.. defined by the EIA as: "Oils with a boiling range equal to or greater than 401º F that are intended for use as a petrochemical feedstock". In other words, the stuff that cannot be used in transportation fuels but can be used in industry.

To sum it up: Imports are down 8.9% YOY, and all products supplied OTHER than industrial/petrochemical feedstocks are down a a rough average 3% YOY. Since this is coming off a crash in the 2008/2009 year over comparisons that 3% is somewhat more dramatic than it might otherwise appear.

After reviewing the dramatic increase in ethanol and domestic production of of Crude & NGL's since 2005 (the more I examine this the more I believe the doomers would have been right had it not been for ethanol and hurricanes Katrina & Rita (which created slack in the production system)), it then follows that the question really is: can the U.S. continue to increase these items to make up for the loss of imports IF those imports continue on their rate of decline(?). Since the U.S. is consuming 42.5% of its corn crop (using last quarter's numbers) to produce ethanol it would appear that the answer is "NO" regarding ethanol. Given that the industry is shuttering refining plants and removing a large portion of refining capacity it would appear that the industry has voted with its $$ a big NO on a significant increase in production capacity. Further, Transocean's experience last week with a blow out in GOM that killed 11 of their workers and sunk a $360 deep water drilling ship would lead me to believe that these very deep water and deeper Terra fields are not going to give up their resources cheaply.

The U.S. has pulled out all of the stops in order to keep the headline unemployment number under 10%, flooding the system with liquidity and cheap credit... with the unintended consequence that Oil is creeping back into the danger zone - this is the "Rock and a Hard Place" we have been speaking about - and any economic recovery or contraction is entirely tied to Oil.

The FOS, part 1

Apple Computer's market capitalization (that is, the total number of shares outstanding multiplied by the share price in $$) has surpassed Microsoft's. YAY!!!!! Steve Jobs is brilliant fellow, and I take my hat off to him...

Apple is the darling of Hollywood, the Media, the super cool, hip, techno wow, pro-choice, save the world folks that brought music to your pocket.

Only thing is, that's all a bunch of Horse Sh*t.

Apple, like Dell, IBM, Hewlett Packard and the rest of the techno-gentry... internalizes profits, and then pays taxes so that the U.S. can continue to overfund an absurd military budget in order to externalize costs across the rest of the planet.

Take a gander at the photo above (I lifted it from Sharon Astyk's excellent blog... I am sure she won't mind...). We (The U.S.) send our e-waste to India, Africa, the Caribbean and any country desperate enough to employ their people handling heavy metals and other nasties in the absence of a HazMat suit.

Believe you me, I am not the only Republican out there that sees this for what it is, contrary to what you read about in the papers... just follow the money... its the Democratic party, Pro-Choice groups, Liberal groups et al that are the beneficiaries of payola largess of the techno-gentry.

Hypocrisy knows no bounds, no party affiliation, no special interest group - it only knows money.

If the Techno-gentry had to pay for the environmental costs of disposing of their products they would not be worth 25% of their current market cap (IMHO), nor would their shareholders be paying all that capital gains tax (still believe in Corporate welfare? Get a grip.)... The costs easily surpass the profits - it ain't even close.

The "enlightened" are not merely blind... they are FOS.

Eurozone No More?

Americans should take a good, HARD look at what is going on in Greece and the rest of the Eurozone... and they should take off their politically tinted glasses when they do so.

Southern Europe's notoriously lax work ethic is likely the primary driver between the imbalances in the Eurozone (or Northern Europe's famously hardworking folks might have to tone it down a bit) (funny, the American Left always points to Europe's social welfare state with joy and envy... I wonder if they ever did the General Population/Worker calculation... Europe blows the U.S. away - they do not have a permanent and entrenched underclass consuming production (nor our military budget), and hence they would have been able to stretch out the time between here and their fiscal mushroom cloud a bit more than the U.S. - had it not been for the PIGS).

"Instead of punishing the Greeks for their free-rider and fraudulent gaming of the Maastricht rules -- either by ejecting Greece from the Union to propel them to reform and come back at a competitive exchange rate or by forcing them to restructure their debt within the confines of monetary union, either of which would have eventually strengthened and solidified the euro -- the European leaders have decided to reward the prodigal Greeks with a bailout, socializing their ills and taxing once again the prodigious Northern European workers," - Louis Moore Bacon

The U.S. public employee unions are doing the same thing to the U.S.

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If you have been reading here for a while, and you read the comments, you might have read some of the commentary made by "Pioneerpreppy"; also, you will have noticed that I LOVE to quote a guy by the name of Gene Logsdon - a guy I have never met, and probably share little in common with politically, but whose obvious intellect and, more importantly I would call Logsdon a "KEEN observer of the Human Condition" (THAT is my HIGHEST (intellectual) COMPLIMENT, and what I strive to be myself each and every day) is so overwhelming at times... anyway, here are some recent comments from these two gentlemen:

What we are really looking at is sectionalism and it hasn't really worked itself out yet. The flyover country is pissed about being ruled by the progressive coasts but yet they cannot bring themselves to admit it because of the last major sectional crisis. The problem is further complicated by progressive strong holds in the form of major cities within flyover country itself.

It is also why the various sides will never see eye to eye as someone from Manhattan can not even dream what life is like for say a small farm owner in rural Missouri, and vice versa. Yet they (the Manhattanites) wish to put in place laws that maybe logical for them without even a care for how they really effect those others who are worlds away in actuality. - Pioneerpreppy

And, from Gene Logsdon's recent blog posting:

First of all, if you let big food business rule the roost in agriculture, you are going to get just what you pay taxes for: more big food business. For example, most people don’t even know that they are eating potatoes that have been genetically modified to kill potato bugs. If sometimes you get a notion that potatoes don’t taste as good as they used to, you just might be right. The potato bugs would surely agree with you.

But there’s something else that I think is important in this regard. The fact that our country has become divided into so-called red and blue states is an outcome directly traceable to the urban-rural division of our society. This is something of a simplification, but food producers and their social allies tend to vote red and food consumers and their social allies tend to vote blue. The division is thought to be between conservative and liberal philosophies, but it much more reflects the difference between rural and urban values. (There are plenty of urban conservatives and rural liberals.) This division is hopefully coming to an end but has a long way to go yet. We are doing a fairly good job of bringing the city to the countryside but a very poor job of bringing the country to the city-side. Both sides need each others’ viewpoints for good government and social interaction. A good way that we can heal the friction is to bring farming to the city. There is nothing that will cure an overly zealous wildlife lover quicker than to make a farmer or gardener out of her. On the other hand, there is nothing that will change the overly-isolationist view of life cherished by rural people quicker than bringing them into close contact with city life. The rural dweller may think that all those rules that cities make are silly — until he is surrounded by suburbs. - Gene Logsdon

Notice anything?

More soon

When All Else Fails

Today's Quote:

"Perfect numbers like perfect men are very rare." - Rene Descartes

The U.S. Oil Import data to compare 2009 to 2010 are in: Net imports for the first 105 days of 2010 are DOWN 8.9% as compared to the first 105 days of 2009. Domestic production of Crude, Natural Gas Liquids, and Ethanol were all up. Some of this is just good fortune (in the form of ethanol) and some random acts of nature (The Gulf hurricanes of a few years ago damaged production that has now been brought back on line). Where will the domestic production come from in the future to make up for the decline in Oil imports?

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I dislike Goldman Sachs. I nick named them "The Anti-Christ". That does not mean that I want them indicted if they did not commit a crime. This was a politically motivated action, and win or lose, it won't hold up on appeal. It is EASY to get a conviction against a member of the elite if you stack the jury with regular Joe's and appeal to their sense of anger and resentment. Surviving the appeal process is another story all together. Just ask Rudy Giulianni (the OTHER anti-Christ). He won ALL of his cases that went to a jury in the 1980's Wall Street witch hunt. He lost 100% of those cases when they went up on Appeal.

You see articles about how people lost money in a Goldman CDO or derivative. What you DON'T SEE, and should, is that all derivatives, and all bonds (including CDO's), and all commodity futures contracts are zero sum games - for every winner there is an equal and opposite loser. OF COURSE somebody lost money! Somebody else MADE that money on the other side of the trade... and these were NOT widows and orphans. These are the most sophisticated folks on the bleedin' planet. Shed no tears for them.

We are a nation of laws - disgusting, mean-spirited, slanted, bought and paid for laws... but laws just the same. Encouraging the government to commit political prosecutions has not worked out in the past.

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4.5% of the world's population sustains 50% of the world's military spending. That would be the U.S.

Does that sound like an imbalance to you? It sure sounds like one to me. Entrenched interests and the temptation to USE that power has all sorts of issues and unintended consequences. How much collateral damage do we and the ROW have to endure?

Where Was I?

Today's quote - "No matter how busy you may think you are, you must find time for reading, or surrender yourself to self-chosen ignorance." - Confucius

Now, where was I?

Oh, yes, I have been gardening and enjoying the spring time here in Middle Tennessee, so I have been a bit busy... my apologies... more importantly, where are WE?

Pissed off... and we want somebody to pay. Goldman Sachs, Wall Street, Washington, Republicans, Democrats, Liberals, Tea Party types... everybody I know hates somebody - and they hate them good.

Why is everybody so angry? This is unlike anything in history. The most powerful nation to ever grace the face of the earth, replete with nuclear weapons (and conventional weapons) enough to pave the place over several times, and a military expenditure to match... is as close to a powder keg type political explosion as any other convulsion in history (IMHO)... and the best our political system can do seems to be to wage silly and immoral wars over Oil and lock up more of our citizens in cages than any nation on earth, while addicting the populace to government programs that absolutely require the continuance of US$/military diplomacy in order to enforce US$ hegemony.

Sometimes I think I am the only normal person left.

Does anybody really think that fanning the flames of hate and resentment is going to come to a good end? The Left AND the Right in the U.S. are doomed, and they know it. In their death throws exactly what will they leave us? No movement or political organization ever relinquishes power once the agenda they organized for in the first place has been achieved - no, they stick around FOREVER... and in an effort to be relevant they inflame their constituents with whatever insult-de-jour is available. Groups that served a noble or honorable purpose fall into this phenomenon in addition to the not so savory groups, forever dividing and multiplying and morphing into still more special interest groups of pissed off: White People, Black People, Brown People, Yellow People, Liberal People, Conservative People, Christian People, Jewish People, Muslim People, Atheist People, Tea Party People, Coffee Party People, Peaknic People... in the past we at least had sex to hold everything together... but the Internet and the Sex Police have kerbolixed that soothing medic... so now we are just fat, pissed, frustrated, and full of hate.

What a world.

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The U.S. Federal Reserve Bank and the U.S. Treasury have prevented the U.S. financial system from completely imploding FOR NOW. They have not fixed anything, the very imbalances that put the system into 2008's death spiral are now back in spades. Their answer to our collective problems? More debt. In fact, under the best of circumstances the U.S. Treasury will issue $10 TRILLION! of new debt (on top of the debt we currently have and will need to keep rolling over) over the next 8 years or so, bringing the National debt to over 150% of GDP. When, not if but WHEN, interest rates increase the U.S. will be looking at a situation wherein the taxes collected cover only 3X the INTEREST costs on the debt - and then it gets really bad.

I told my clients and partners this would be an EXCELLENT time to: take the trip they have always wanted; quit work to write that book, learn to paint, or play the guitar et al; indulge yourself in any reasonable way. Holding onto paper or intangible wealth is going to be very, very difficult in the coming years. If Life is short, the financial system's lifetime will be even shorter. Not only can't you take it with you, but soon you won't be able to hold onto it while you are here. Now is the time to enjoy the fruits of your labors. If you feel guilty, email me and I will write you back a forgiveness email. Its ok, enjoy yourself. Speaking of which, I am going to enjoy spring and summer on the farm and then head to Costa Rica for a month with the family this winter.

The Dam has been breached...

The Goldman Dam has been breached... expect severe flooding.

For the Government to go after Government Sachs, er.... the Anti-Christ, I mean Goldman Sachs... well, there is a lot to it.

Did Blankfein & Co.'s endless lobbying irk Obama to the breaking point? Or was it just the weight of the Mob overwhelming the weight of Goldman's gold bags? You can count on criminal indictments from the various States. The convictions are a foregone conclusion (even if they are factually innocent, which I doubt...).

This is BIG stuff. And just how bad will this all get to be on Paulson & Co.? Will he be forced to liquidate his financial stocks and Gold? If so, it won't pay to stand in front of a freight train... you gotta let it go past. Can the markets survive Goldman's demise? Very, very good question.

More soon.

A Brilliant Idea

Every once in a while you read something that somebody wrote that just overwhelms you with their good sense.

This is one of those times. Herewith is the article from the above link in its entirety.

"Riffing off of the fact that 47% of Americans aren't expected to pay federal income tax for 2009, and the fact that the highest 40% earners pay 86% of total federal taxes, we have a small suggestion.

How about we just end the ruse.

Most Americans either don't pay any federal tax or barely support the federal government. Yet as our latest 20 Tax Facts To Blow Your Mind show, these Americans are wasting massive amounts of their own time, and others' time, filing taxes just to pay a relative drop in the bucket. Plus they feel entitled to using money they probably didn't contribute, because they feel as if it's 'their tax dollars'.

So let's just exempt the bottom 60% from paying federal taxes. It might actually be in the interest of the top 40% earners.

That's because the charade will be over. It will be very clear who pays the bills for the federal government and then instead of an F.U. for paying the country's bills, people who earn substantial sums through their own skill and efforts and thus pay large amounts of taxes might get a small thank you. It would then be far more difficult, politically, to expand wasteful entitlement programs because it would just be glaringly obvious who is paying and who is simply receiving. It's not that all entitlement programs are necessarily bad, we believe in some form of support for the less fortunate, but at the very least there would be far more emphasis on entitlement spending for the very needy only, if it were so clear that most Americans aren't even funding the federal government.

Finally, given all the work that goes into tracking 60% of Americans that provide just 14% of the tax revenue, one wonders if the economy as a whole might actually come out with a net benefit due to lower paperwork and tracking costs. The government could surely slash its 100,000+ army of IRS employees as a start, and Americans wouldn't have to hire one million accountants. Sounds like a win-win for all. Except bureaucrats and accountants."

End of Brilliant Idea article.

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This is one of those things that actually COULD happen.

U.S. Military warns on Oil

Posting has been a bit light as it is spring time, and there is simply soooooo much to do on a family farm where the primary labor input is yours truly. I bought the place 4 years ago next week, ergo this is my 5th spring on the farm. I cannot begin to express just how much I have learned, and how much there is to know, in doing this. When I got here, I didn't know a horse shoe from a hammer. Not that I am ready to write books and teach courses, but I feel I actually know how to do this now. I say this only to point out how long it takes to provision and figure out the permaculture family farm - and tell you that you really, really, really need to be in good shape to do this (especially if you are of a "certain age").

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The U.S. military is out in force warning of immanent Oil shortages - particularly for the U.S., China, and India.

We can argue about the time frame, and we can argue about the ultimate price. Being off by a year or two (or 3. Most of the well informed prognosticators used 2010 +or- 3 years... now the U.S. military, a no B.S. organization if ever there was one, is joining the fray with a time frame not that far off from the others) just does not make a bit of difference to John Q. Public, as John Q. is hardly buying futures contracts... just retail gasoline, as well as the imbedded costs of energy.

What comes to mind to me is what happens to the life savings and portfolios of folks that spent a lifetime accumulating these "assets". Markets are "discounting mechanisms", that is, they predict the future. What happens in the various market places over the next couple of years as the Oil Boa Constrictor tightens down? The equity, bond, and commodity markets predict the future... when do the markets begin to predict this? Are some of the commodities already doing so?

This is going to prove to be a very interesting time to be alive.

Sour Grapes

The Deflation Bloggers (of which I am/was one) are sour grapes at having missed the biggest market rally in our lifetimes.

Many of us, yours truly included, saw clearly for a while... and some how lost our way in the markets of late. Yea, my precious metals have done well, but I sold out my paper metal 12% ago (ouch) and missed the equity rally.

There's a lesson here. In the short run FUNDAMENTALS DO NOT MATTER. Technicals do not matter, either. So many of the doom and gloom crowd are disappointed that Bernake et al, have so far, won this battle (the WAR is a different thing)... that's the thing about this business. You have to be able to acknowledge when you are wrong. The market is ALWAYS right.

In Gold/Dow terms the market is NOT up. That, too, does not make us Deflationists look too smart. Oh, well. It is a blown opportunity, and hopefully there will be more blown opportunities with some not blown opportunities in the future.

Not that the Fed was perfect in their moves... they flooded the system with liquidity hoping that the money would show up in housing. That didn't work out so good... the fund's flowed to U.S. equities, Gold, and Oil. Some of that was welcomed, some not. The end game should prove rather interesting... but those defaltionist bloggers? They got this one dead wrong.

The good news is, nobody stays cold (or hot) forever. The markets are open for business every single day, and each day is a new day.... BTW, this is not a "throw in the towel and go long moment"... just venting that I wish I went long equities... that does not mean I would do so now.

The Politics of Hate

"When strange peoples meet... first they fight... then they fornicate." - Unknown.

The political expediency of hate reared its ugly head when a well known African American Congressman John Lewis claimed that someone in a Tea Party demonstration hurled the "N" word at him and Congressman Andre Carson.

I don't know for sure what happened there. I was not present. I will say that in 2010, with all of the media microphones, digital cameras, cell phones, etc... it strikes me as EXTREMELY unlikely that such an exchange would have gone unrecorded, especially when Andrew Briebart has offered $100,000 for proof that the denigration was hurled at the Congressman.

If no such recording of the event turns up (I have no opinion on that eventuality whatsoever... it either does or it does not), it would seem to me that not only is the Congressman hearing things, he is actively seeking to rekindle hatred to marshall his forces. If such a recording does turn up, it would seem that the Congressman and the Democrats will have a very, very potent sound bite to use to hammer the opposition. My bet is a great many people are listening to every second of every recording from that event.

Let's go with option "A". No recording of such exchange. If so, it would then seem that this is nothing more than a bald attempt to capitalize on the politics of hate, and to prevent the very natural outcome of assimilation (I have some experience here... I am white, my wife is a beautiful brown, my kids are sort a mocha capuchino, my sister is an orthodox Jew, I was raised catholic and am as secular as it gets for a Right To Life Republican). Congressman Lewis and his NAACP cohorts are on the wrong side of biology and history. In a couple generations there WON'T BE any black or white people... there WILL be a great many shades of everything in between. That's what happens when you are successful in efforts towards equality - people WILL make babies with folks from different ethnic backgrounds. The only way to prevent this is to keep up the HATE. Groups that wish to avoid integration must follow certain strategies. They must control the reproductive options of their women. They must wear certain clothes and continue certain customs designed to separate them from others (kosher diet, head scarves, burkas...), and they must convince their people that the other guys hate/dislike/are less worthy.... than us, the "good guys".

Congressman Lewis and his supporters NEED the "N" word (They need "fat, angry, middle aged white people"). Without it, they will be relegated to history... a respectable place in history, but history none-the-less.

What is the difference between a "White Supremacist" and a Black Congressman, or a religious leader - if the one thing they have in common is a desire to prevent their kind from intermarrying? You can't really be "FOR" a particular group without being "AGAINST" another. Barak Obama is not our "First Black President" (Bill Clinton was). Barak Obama is the-first-of-many-very-difficult-to-define-and-so-we should-stop-defining presidents. The only diversity that biology favors is "hybrid vitality". It would be nice if we could get over ourselves, but that just ain't gonna happen. Next best option is to not be baffled by the Bull S**t.

Life in these United States...

I got this from Zero Hedge. I am sure many of you have already read it... I thought it was important enough to repost:

Submitted to "Zero Hedge" by Graham Summers of Phoenix Capital Research

It’s Impossible to “Get By” In the US

While the market cheers on the fantastic job “growth” of March 2010, the more astute of us are concerned with a growing tide of personal bankruptcies. March 2010 saw 158,000 bankruptcy filings. David Rosenberg of Gluskin-Sheff notes that this is an astounding 6,900 filings per day.

This latest filing is up 19% from March 2009’s number which occurred at the absolute nadir of the economic decline, when everyone thought the world was ending. It’s also up 35% from last month’s (February 2010) number.

Given the significance of this, I thought today we’d spend some time delving into numbers for the “median” American’s experience in the US today. Regrettably, much of the data is not up to date so we’ve got to go by 2008 numbers.

In 2008, the median US household income was $50,300. Assuming that the person filing is the “head of household” and has two children (dependents), this means a 1040 tax bill of $4,100, which leaves about $45K in income after taxes (we’re not bothering with state taxes). I realize this is a simplistic calculation, but it’s a decent proxy for income in the US in 2008.

Now, $45K in income spread out over 26 pay periods (every two weeks), means a bi-weekly paycheck of $1,730 and monthly income of $3,460. This is the money “Joe America” and his family to live off of in 2008.

Now, in 2008, the median home value was roughly $225K. Assuming our “median” household put down 20% on their home (unlikely, but it used to be considered the norm), this means a $180K mortgage. Using a 5.5% fixed rate 30-year mortgage, this means Joe America’s 2008 monthly mortgage payments were roughly $1,022.

So, right off the bat, Joe’s monthly income is cut to $2,438.

According to the US Department of Agriculture, the average 2008 monthly food bill for a family of four ranged from $512-$986 depending on how “liberal” you are with your purchases. For simplicity’s sake we’ll take the mid-point of this range ($750) as a monthly food bill.

This brings Joe’s monthly income to $1,688.

Now, Joe needs light, energy, heat, and air conditioning to run his home. According to the Energy Information Administration, the average US household used about 920 kilowatt-hours per month in 2008. At a national average price of 11 cents per kilowatt-hour this comes to a monthly electrical bill of $101.20.

Joe’s now down to $1,587.

Now Joe needs to drive to work to make a living. Similarly, he needs to be able to drive to the grocery store, doctor, etc. According to AAA, the average cost per mile of driving a minivan (Joe’s a family man) in 2008 was 57 cents per mile. This cost is based on average fuel consumption, tires, maintenance, insurance, license and registration, and average loan finance charges.

Multiply this cost by 15,000 miles per year and you’ve got an annual driving bill of $8,550. Divide this into months (by 12) and you’ve got a monthly driving bill of $712.

Joe’s now down to $877 (I’m also assuming Joe’s family only has ONE car). Indeed, if Joe’s family has two cars (one minivan and one sedan) he’s already run out of money for the month.

Now, assuming Joe’s family is one of the lucky ones (depending on your perspective) they’ve got medical insurance. Trying to find an average monthly medical insurance premium for a family in the US is extremely difficult because insurance plans have a wide range in deductibles, premiums, and co-pays. But according to eHealth Insurance, the average monthly premium for family policies in February 2008 was $369.

So if Joe has medical insurance on his family, he’s now down to $508. Throw in cell phone bills, cable TV and Internet bills, and the like, and he’s maybe got $100-200 discretionary income left at the end of the month.

This analysis covers all of the basic necessities of the average American household: mortgage payments, food, energy, gas, driving expenses, and medical insurance. It also assumes that Joe:

1) Didn’t overpay for his house

2) Made a 20% down-payment of $45K on his home purchase

3) Has no debt aside from his mortgage (so no credit card debt, student loans, etc)

4) Only has one car in the family and drives 15,000 miles per year

5) Keeps his energy bill reasonable

6) Does not eat out at restaurants ever/ keeps food expenses moderate

7) Has no pets

8) Pays for health insurance but has no monthly medical expenses (unlikely with two kids)

9) Keeps his personal budget under control regarding cable TV, Internet, and the like

10) Doesn’t spoil his kids with toys, gadgets, trips to the movies, etc.

11) Doesn’t take vacations.

Suffice to say, I am assuming Joe maintains EXTREMELY conservative spending habits. Personally, I know NO ONE who meets all of the above criteria. However, even if the above assumptions applied to the average American, you’re still only looking at $100-200 in “wiggle” room for spending per month!

If Joe:

1) Overpaid on his house

2) Didn’t have a full 20% down payment

3) Owns two cars

4) Eats at restaurants

5) Splurges on heating & A/C bills

6) Has any medical expenses aside from monthly premiums…

… he is running into the red EVERY month.

I also wish to note that my analysis didn’t include real estate taxes and numerous other expenses that most folks have to pay. So even if you are extremely frugal and careful with your money, it is impossible to “get by” in the US without using credit cards, home equity lines of credit or burning through savings. The cost of living is simply TOO high relative to incomes.

This is why there simply cannot be a sustainable recovery in the US economy. Because we outsourced our jobs, incomes fell. Because incomes fell and savers were punished (thanks to abysmal returns on savings rates) we pulled future demand forward by splurging on credit. Because we splurged on credit, prices in every asset under the sun rose in value. Because prices rose while incomes fell, we had to use more credit to cover our costs, which in turn meant taking on more debt (a net drag on incomes).

And on and on.

Does this mean the market is about to tank? Not necessarily, stocks have been disconnected from reality since November if not July. Bubbles (and we ARE in a bubble) take time to pop and this time around will be no different.

Best Regards,

Graham Summers

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See, the thing is... this predicament or condition, whatever you wish to call it... is NOBODY'S fault. This is phenomenon. It just happened. Sometimes bad things happen to good people, good groups, even good countries... and that's life.

The answer to this is NOT political - no amount of government or regulation is going to satisfy anyone in this regard. Nope. THIS IS PERSONAL. This is your problem and you have to work out its solution for you and yours.

The Harm Done

Before I get on with the rant... yesterday was a big "Happy Birthday" on the farm. 75 chicks hatched out and are setting comfortably in the brooder... In case you were wondering, "Dad" and chicks are doing fine...

We expect to hatch out 500 to 600 chicks this summer

The data depends on who is doing the counting:

Retail sales have not increased. If they had, sales taxes would have increased. They have not, and are down, year over year.

Housing is not improving. In order to improve, demand needs to improve, and in order for demand to improve FINANCING has to be available (I mean, come on... how many people buy a home with no borrowed money?), and JOBS have to be available. Pretty simple really. Households are DEFORMING, non forming.

Consumer Debt continues to fall. In a fractional reserve banking system such as ours, a contraction in debt is incompatible with "growth".

This includes mortgage debt.

So where is the U.S. equity market rally coming from? Good question. In short - Government Stimulus Money. All of the "growth" in "demand" in the U.S. economy for the past 12 months or so has come from the Government's stimulus. That is coming to an end (sort of. One could successfully argue that running $1 Trillion deficits is AWFULLY stimulating, and they would be right... in its absence TPTB would have lost everything (that would include me, so I should not complain) and we can't have that, can we?). Still, the extraordinary stimulus is coming to an end.

Ans the unintended consequences keep coming...

American society, led by those brilliant folks that brought you the California socialist miracle (ROFL!! LOLOLOLOL...HAHAHAHAHAHA.... HEHEHEHEHEHE!) and the Marriage/Divorce/Abortion Industrial Complex have now given you the disposable child! No need to go through the unpleasantness of abortion, ladies... or even pregnancy... if the child does not meet your specifications... just send them back!!! First it was that pesky husband... not to worry, we fixed him (PUN INTENDED) with our disgraceful divorce/family law. Responsibility? Accountability? Not for you, young lady! That was sooooooo 19th century! We can vote now! Don't want to cook? Of course not! That's beneath you! (Just get an illegal immigrant...) Don't want to care for your children? How very tedious! Get a nanny! If your husband complains, divorce him, and you too, can have an unearned annuity for life! Looking for a career, but don't want to be bothered with all those long hours and other sacrifices! We'll create a "glass ceiling". After all, its not you - its THEM!

Nothing... NOTHING! Comes without unintended consequences. Sorry, Gloria Steinem et al, you can't duck this. The unintended consequences of breeding hate, jealousy, and resentment do not release themselves in a positive way.... Way to go!

What the...?

Any rational person watching the markets and the data has got to be scratching their heads.... its a "WTF" moment if ever there was one.

Gold, Silver & Platinum are back to "End of the World" prices... Oil is knocking on that door... consumers continue to shed debt and refuse new credit... a number of countries could easily default on their debts... and stocks are partying like its 1999 at a time when bonds are "Sh*ting the Bed" (technical Wall Street speak for dying). Go f#@*&ing figure!

The battle between deflation and the central banks is on, and it certainly looks like the central banks won round 1. Still, its a long, long fight.

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The world Oil market does not seem to care about the U.S. any more. Clearly, the U.S. is no longer the marginal consumer - and that means we no longer set the price of crude in the market place. As I pointed out in my recent post, at today's price the U.S. "Oil only" trade deficit is about $302 Billion at today's price. This is one reason why I am NOT that bullish on Oil, not that we couldn't see surges in price, but a sustained price of $160 per barrel would DOUBLE the U.S. Oil only trade deficit to over $600 Billion... and that just ain't gonna happen (barring some geopolitical event, that is) at a time when the Fed is quitting its MBS purchase program, and the balance of the stimulus programs have run their course. All those houses that were bought because of the $8000 credit? They came out of next year's purchase. Same with cash for clunkers. Those air pockets have yet to be hit.

I don't think Oil sustains triple digit yearly averages until imports have declined quite a bit from here.

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On a completely silly note....

Why is it that lover's betray each other other the way they do in the media? If some famous media starlet threw me a bone and later the entire media circus showed up at my farm... She could count on me to do 3 gentlemanly things: Deny, deny, deny.

WTF is up with these people? Do they have a shred of loyalty? Have they no decency? Anybody that would throw their lover under the proverbial bus is a POS.

Sometimes I despair for my fellow (wo)man.

$302 Billion

$302 BILLION.

That's how much money the U.S. is paying annually for the Oil it imports at today's rate and price.

At our peak of Oil imports back in 2006 - 12.5 million bpd, given today's price that number would have been $397 BILLION. Same price, far less imports.

See how the Oil import decline is going to fix our trade deficit?

Here is something else to think about...

If the U.S. does not run a trade deficit... the mirror image is some other country is no longer running a trade surplus... and that means they won't have any US$'s to lend us... which means either we will save enough to fund our deficits, or we will engage in perpetual quantitative easing (yes, I know that it is really "qualitative" easing, but that's not how its known in the media).

The question of the moment is just how high an Oil price can the U.S. economy and the industrialized West withstand? Is it the price per barrel? The % of GDP? Or the physics of declining ability to do "work" (as that word is defined in physics)? Does the difference in unemployment since the U.S. was last importing 12.5 million bpd and now with our 9.5 million bpd in imports, change the equation?

And why is the stock market screaming ahead with $87 per barrel Oil and 4% 10 year bond yields? Housing prices have only declined further over the past 12 months, yet the financial sector, along with retail (RETAIL!), is leading the charge (you might recall that the banks still have this stuff on their books marked-to-fantasy). Maybe things were that over sold... maybe I am just sour grapes... maybe...but I don't think the laws of physics or economics have been repealed.

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Our politics just keeps getting weirder and weirder. Our national psyche is - to use a technical term - FUBAR. All f*&^ed up. We hate. We're angry. An episode of Nancy Grace is indicative enough of the sorry state of affairs... night after night of who cheated on who... WHO CARES? Well... Somebody does. Call them the Sex Police.

We have Tea Bagger's, Civil Righter's, Feminazi's... and militant gays, christians, jews, muslims...fatso's ... good grief, what next? Militant Boy Scouts? Maybe terrorist elderly?

"This is the duty of our generation as we enter the twenty-first century — solidarity with the weak, the persecuted, the lonely, the sick, and those in despair. It is expressed by the desire to give a noble and humanizing meaning to a community in which all members will define themselves not by their own identity but by that of others." - Elie Wiesel

I used to live in the same building in New York as Mr. Wiesel for a year or so. In New York you see celebrities fairly often, but when you would ride in the elevator with Elie Wiesel you feel his weight and his history on you... I never said more than "good morning" or "good evening" to the man, but as far as I could tell, and given his passion, I never felt a sense of anger - at least not in the way that the cigarette smoking skin head that seemed to want to kill me for not driving fast enough on I40 the other day.

I watched it rain last night. My 3 year old son and I sat on the front porch and watched the clouds and winds gather in an incredible display of nature's power and fury - it was breathtaking... We must have watched nature's fireworks for a couple of hours from our warm and dry vantage point, and when I went to bed I wasn't even remotely concerned about who Tiger slept with... I wasn't angry with Nancy Pelosi... but I was impressed with the show right outside our front door.

I have no idea what it means... but I do think we are being made angry by our media addiction. And some how, I don't think its good for us.

Common Sense meets Intelligent Economic Analysis

Every once in a while, somebody, somewhere makes a breathtaking show of good common sense, and in this case, an understanding of the economics involved. Still no good deed goes unpunished... he will probably get fired for this.

Nobody ever talks about independence for other products. We don’t care about automobile independence, or bottled water independence, or underwear independence. We avoid asserting that those would be worthy goals, for a good reason: Free trade enhances our welfare by allowing us to import products from those who have a comparative advantage producing them.

Why should energy be any different? Three arguments are most commonly offered.

Fluctuating Prices

The first is that oil price fluctuations harm the economy, and that owning more oil would help inoculate against them. This is specious. If the U.S. does discover a mother lode of oil, that discovery will affect the global price of oil. After the price adjusts to the new supply, it will go on and fluctuate from there. Before the discovery, Americans would pay the world price of oil, and watch and suffer as it moves up and down. Ditto for after the discovery.

It might be nice, of course, to own the oil or oil companies if the price increases sharply. That way, U.S. citizens see their wealth increase to offset some of the damage of the higher price. But if that hedge is viewed as attractive, we don’t need to drill to acquire it. We could just encourage Americans to invest in the equities of publically traded foreign oil companies such as BP Plc, PetroChina Co. or Royal Dutch Shell Plc.

Fear of Embargo

The second reason sometimes given for more U.S. production is that a foreign enemy might decide to organize an embargo against us and shut off our supply of oil. Such an embargo might, indeed, harm the economy, as it did back in 1973.

Still, think about it. If we fear there might be an embargo in the future, the optimal response is to purchase more oil from abroad today, not less. We should try to get as much as we can before the spigot is turned off. We should also reduce domestic production, not increase it, secure in the knowledge that the oil is there, available when we need it, in places such as the Arctic National Wildlife Refuge. If we ramp up production today, then we may find ourselves facing an embargo down the road after we have drained all of our own domestic reserves.

The third argument one sometimes hears is that we should stop buying oil from evil-doers such as Iran, as that only provides them with resources they can use to do us harm. But the problem is, oil is a commodity, and if we do not purchase it from a given supplier, someone else will. Such a boycott has no effect whatsoever.

Jeesh!

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The price of crude oil in the market place is dangerously close to snuffing out the U.S. "nascent recovery" we hear tell about in the media (the data on employment and energy use in the U.S. do not give me a warm and fuzzy feeling about a "recovery" here. Still, the world economy probably IS growing, and since half of the S&P 500 profits come from international sales... well, I should have listened to "Coal Guy" - he posted back when the S&P was at 850 to look for 1250 or so... Oh, well... my precious metals have tracked the equity market, but my bonds sure haven't). Also, while the high price of crude oil might be bad for the U.S., there is somebody on the other side of that trade - and they are part of the "world economy", too. (Remember to ALWAYS look in the mirror: IF oil prices were to slide, that might really goose things along in the economy AND the stock market. That is the mirror image of the above.)

It is my sense that this last 36 months or so was the first of many waves in the price and supply of Oil to the U.S. as well as prices levels of everything else from stocks and bonds to corn and copper. I think we will see surges in the price of Oil and then full scale declines. Trading Oil futures will not be for the faint of heart - and irrespective of the price action by 2020 or so, imports of Oil into the U.S. will be a trickle of what they are now, which in turn is 75% of its peek of just 4 years ago - with all of the issues and outcomes attendant upon that.

Living in the Southland

Before I get on to today's rant...

I don't know where the Peak Oil community gets its "The South is uninhabitable without Air Conditioning" schtick from - probably from Jimmy Kuntsler and the rest of his Middlebury College types (just teasing! sort of)... the weather here in Middle Tennessee is just as mild and as pleasant as can be. Yes there are some hot stretches, but nothing like the heat waves I experienced standing on a New York City subway platform in a suit and tie, waiting for the express. The winters are mild and short, spring and fall are delightful. Anyway... Here are a few shots of late March here in Tennessee...

The Barlett Pear tree in our back yard with the world's greatest horse, "Mike", in the background. I've had a lot of horses come through here, but none like "Mike" - he is a keeper. He was given to me as a 2 year old (Tennessee Walking Horse) "junk" horse by the previous owner of the farm. I don't know how he arrived at that decision, but it has worked out for me. Mike can best be described as a real life cross between Mr. Ed and Hidalgo.

Plum Blossom. I have 3 dwarf plum trees outside our barn that produce wonderfully.

OK, back to Oil, energy, and the markets. I have been away from the computer lately. Seems there is a big difference between blogging about self sufficiency and actually living it. Getting the farm ready for Spring is no small task. Babies are born, animals have to be processed, the garden has to get dug and plants started... I can tell you with great confidence that all of the petty mental diagnosis's de jour would be a thing of the past if their sufferers did this everyday...

But I digress...

West Texas Intermediate front month traded above $85 per barrel, and closed trading a dime or 2 off that number. Given that U.S. inventory and usage would seem to say, and have been saying, that Oil should be much cheaper... it would now appear that the U.S. is no longer "the axe" in the Oil market.

Of course, if you are lame brained member of the media, or worse, a politico... the culprit is those scum bag speculators. I mean, read that story. Talk about a desire to inflame the jury. Where is the story on the continuing slide in Oil imports into the U.S.? Can't run that one. Might have to deal with reality.

Oh, well.

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If you have been reading my stuff for a while, you know that I feel that the political Left and Right in the U.S. are the walking dead. Dysfunctional, mean-spirited, hypocritical in the extreme, this 2 headed, incestuous, siamese twin needs the other while simultaneously needing their respective throngs of true "believers".

I wrote this piece nearly 2 years ago. Recently, Chris Hedges, for whose intellect I have a great deal of respect, posted this article. Mr. Hedges has some very good points. Some others are the wide-of-the-mark drivel one must expect and tolerate from a "True Believer". Notice the accusatory tone of the article - its the Right and the Republicans that are the Fascists! While we, the noble and intellectually elite Left, are here to save the day... BS! Your "true believers" are just as non-sensical as the Tea Baggers by any and every measure.

Why does it have to be Fascism? Why can't it be Libertarianism? American Liberalism and what was passed for Conservatism are dead, as complete failures SHOULD BE. The "true believers" on BOTH sides have held the debate hostage with their constant barrage of pointing out the inconsistencies in the other folk's argument while frothing at the mouth with their own.

In truth, this is how political advantage is gained in our current system. You see, I think Fascism hasn't a snow ball's chance in hell here in the U.S. The U.S. is far, far more likely to break up into autonomous regions than to tolerate a Fascist government. We are coming apart at the seams with the current regulatory environment, we won't likely tolerate much more. Did I mention we don't have the ability to pay for it?

Folks like Chris Hedges are terrified to see how close they came, only to see their dreams of totalitarian Liberalism go down in the flames of Libertarian personal responsibility. Too bad, Chris. The gig is up. It was OIL that funded your group's bribes and pandering, just as it funded the Right. Then, with US$ hegemony as the world reserve currency and the currency in which Oil was priced, the international bond market continued to fund the 2 headed monster that your group is half of... but that is coming to an end.

America is NOT "yearning for Fascism". America is addicted to cheap Oil, cheap credit, and free social services - and like any addict deprived of its fix... it is going through the Detox Tremors at the moment, and that will continue for some time... until the people have been weened off the junk - the junk the 2 head monster has been pushing since FDR.