Thursday Morning Fairytales: What Deflation?

(Near 20’03” NH by 86’23.5” W – about off Cancun, Mexico)

Peoplenomics Subscriber Note:  The regular Saturday report this week will be posted on Sunday afternoon because I need a lot more bandwidth that what’s here shipboard to run www.nostracodeus.com software scans and  get a better bead on what lies ahead.

We begin this morning with the tale of the three little pigs:  This one printed money, this one printed none and hoarded gold, while the third little piggy was overthrown in a “peoples revolution” which is why neither the proletariat nor royalty can be trusted.

Of course, neither can the bureaucrats since they all work for royalty, and this tees up our next fairytale:  The Consumer Price Index press release, just out.  Nitro pill ready?

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.7 percent in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today.

Over the last 12 months, the all items index decreased 0.1 percent before seasonal adjustment. The energy index fell 9.7 percent as the gasoline index fell 18.7 percent in January, the sharpest in a series of seven consecutive declines.

The gasoline decrease was overwhelmingly the cause of the decline in the all items index, which would have risen 0.1 percent had the gasoline index been unchanged. The fuel oil index also fell sharply, and the index for natural gas turned down, although the electricity index rose.

The food index was unchanged in January, with the food at home index falling for the first time since May 2013. The index for all items less food and energy rose 0.2 percent in January. The shelter index rose 0.3 percent, and the indexes for personal care, for apparel, and for recreation increased as well. The medical care index was unchanged, while an array of indexes declined in January, including those for household furnishings and operations, alcoholic beverages, new vehicles, used cars and trucks, airline fares, and tobacco.

The all items index declined 0.1 percent over the last 12 months, the first negative 12-month change since the period ending October 2009. The energy index fell 19.6 percent over the span, with the gasoline index down 35.4 percent. The food index rose 3.2 percent, and the index for all items less food and energy increased 1.6 percent.

On the Peoplenomics side of the house, I explained yesterday how you are getting shoved into the poor house while at the same time the banker class is worried about deflation.

Vastly simplified, of course, if you don’t count food and energy costs, core PCE will be down and way under the target 2%.  This morning’s data hints at more serious deflation, so don’t worry about a Fed raise just yet. 

And thus, 16-days later than is acceptable is how this morning’s “we’ll get around to it” numbers played out.

As for market reaction?

Stock futures were about flat, oil down a buck.  The herd isn’t sure if this price decline stuff is good or bad.  Does argue for a drop in the 10-year Treasury later on.

Gold being up may not be directly indicating inflation in the wings – could just be the reported government investigation into big bank gold price suppression is getting up steam.

I’ll leave it to you to decide which of the three pigs you want to model your personal portfolio on, but paid up property in a low tax/rent area and precious metals holdings since 2003 has been a reasonable thing.  Even after punitive taxes on the metals, which somehow don’t qualify for long-term gains for the physical. 

Got to admire how the money-printers snuck that in.  Paper trumps physical, but only for so long.  Then the paper collapses and we’re patient.

Obama’s Blame Game

Some of my best friends are or were liberals.   I recommend counseling because everyone’s a crook in today’s world – and everyone plays the Blame Game version of House of Thrones.

This is not to say Fearless Leader is a liar however; we live in a land where things are self-evident.

Take, for example, his blaming  – six years in – the Bush administration for the immigration problem.

Yes, boys and girls, six years on this fellow it still trying to blame everyone but himself for a) the swarming hoards of illegals and the b) tax breaks  for illegals and c) having the option to let illegals who are DUI/DWI off the hook, and shipping illegals to innocent cities.

There’s a reason former henchman Rahm didn’t get swept back into office and will have to face some of the music up in Chicago.  People may be wising up.

“But Wait, There’s More!”

Then there’s the matter of Internet pricing and access.  The FCC is expected to begin issuing what’s bound to be a set of rules on internet access.

A couple of (republicorps) are disappointed (and whining) about how the head of the FCC didn’t come to confessional on the Hill before the report due out today.

Meantime, George Sorespot and the Ford Foundation have been piling in the dough in support of “net neutrality” but since both sides claim their stand is “net neutrality” it’s a little absurd.

I’m deeply in the “all bits are created equal” camp, myself.  Big corps want to be able to pay for bigger bandwidth costs by higher rates.  However….

This gets us to the lack of a real presidential sales job to promote the rollover of ‘Merica to fiber as part of a national infrastructure upgrade.

This is just one of my many disappointments in Obama.  I don’t see he’s done much to rectify the busting up of black families, an unintended consequence of goofy welfare rules, either. But that’s a conversation for another day.  Unless you want to go over how another Obama appointee candidate wants to release illegals; I mean that’d be fine.

I should simply note in passing that keeping people poor and in the clutches of the Nanny State has become the ruling business model, as corporate-run prisons, social service agencies, and toll roads all go to point out.  It’s also what healthcare “reform” was all about:  Mandatory profit-making for health insurance companies.

New Woes for WhatsHerName

Yes, Hillary and Bill seem to be at it again:  While She For Whom I Will Not Vote  was busy playing Secretary of State, the Washington Post has a smashing piece on how foreign governments were heaping money into the Clinton Foundation.

This is not to say the Clinton Foundation doesn’t do good work, mind you.

It’s just that the Clintons continue to ignore one of the tenets of good government taught me by my long-ago mentor, past Seattle City Council president and county Superior Court judge:

You can’t just follow the letter of the law.  You need to avoid even the appearance  of any conflict of breach of the public trust.”

By this simple measure, as I see it, both the Clintons have failed to maintain that trust.  Far as I can figure, anyone who’d give a dime to Hill’s 2016 scampaign ought to seek  remedial accounting courses.

You can’t outbid the big guys and go read the numbers.  This is more like eBay and America.

Just like the insiders get first whack at IPO’s based on portfolio size, so to the American Kelptocracy (like the Bushes and Clintons) “work the circuit” to buy the job.  T’ain’t right. But it is what it is.

I’ll take an honest socialist, like Senator Bernie Sanders over checkbook republicans and democrats any day.  At least he’s consistent and you know where he’s coming from.  Socialists in conservative’s clothing?  No thanks.  Lots of ‘em around, though.

Checking the various administration website makeovers for the White House, ever notice how there’s no “Bad Sell Claim Form?”  There is on a more honest auction site like eBay.

The Dope’s In Washington

Maybe now that marijuana is legal in the District of Coercion, things will mellow out a bit. 

I’d start ‘em off slow on a sativa (B-52?) and if we can’t figure out a flat income tax with a tax credit for under $50,000 annual incomes, we move them up to a Purple Kush, or so.

Maybe they’re already on ‘shrooms…that would explain a lot come to think of it.

This May Not Matter

But some new science being reported explains a bit more about how the Universe evolved.

I’m giving Universe 50-50 odds of outlasting me, but it’s odds seem to be going up daily.

Coping: The Cruising Prepper’s Barter Practice

image(Near 19’.30” N 89’.23” W @ 18.4 Knots)

Our cruising adventure pulled up anchor for the last time on Wednesday evening as we wrapped up a visit to Trujillo, Honduras on what the cruise brochures call “The Banana Coast.” Next stop: Houston early Saturday.

After going ashore for a tour of Trujillo, Elaine and I returned to our balcony for a leisurely snooze (or, in her case snoozette) while the crew put away the tenders that were used to ferry adventurers to shore.

Turns out, there’s an interesting tale of “battling cruise lines” in here:  The Norwegian line didn’t get one of the early (prime) slots at the island of Roatan, so they opted for a mainland stop.

Good call.

We like contrast in life.  The offshore islands are mostly flat and Trujillo has these marvelous mountains as a backdrop.  The reach over 2,000’ feet vertically and we were assured they could be scaled up to a radio tower location in a shade over four hours.

My cardiologist might disagree.  However, since the ship wasn’t going to be here a week, that hike came off the table. 

Despite a mighty police presence, the Honduran woods are not where sane gringos would be hiking, but then again, we don’t know many sane people,just sayin…

imageThe city of Trujillo has a small but very nicely-developed Port district, and since the town is fairly compact along the base of the mountains, when the cruise ship comes to town, it’s a very big civic deal.

The shops spring up along the walkways and all kinds of goods are for sale.

Although we’d rationalized to ourselves we didn’t need anything, there was this turquoise necklace that caught Elaine’s eye that was very inexpensive  ($10). and I thought “Aha!  All this prepper talk about bargaining/trading might be put to good use here…”

The dickering was set to begin….

Before making my offer, a lot of thought went into the process:  Where to draw “my line”?

I wanted to just practice, not insult the fellow on the other side of the table from me.  He was somewhere north of 6’ feet tall and as muscular as I was rotund.  Strategy call:  Insulting low offer, or just guess his markup and go from there.

It’s an article of faith that in the post apocalyptic world bartering will be a critical skill.

Settling on an opening offer of $8-bucks, which the shopkeeper immediately snapped up.  I reminded myself that next time I’m in Trujillo (very low probability event) that I’d open with a 30% off or 40% off and assume the idea of an “insultingly low offer” is something barter book writers made up.  Maybe they don’t get out and practice; can’t say.

Better off taking the Harvey MacKay (Swim with the Sharks) approach:  I should have opened at zero and worked my way up from there.  A fine lesson of American capitalism is this:  If you have the money, eventually someone will buy the insult.  Look around you.

So much for Mr. Hard Bargain Driver.

Remembering the “old days” of the Caribbean from living on Grand Cayman for a couple of years in the mid 1980’s when Zero Halliburton brief cases of cash proceeds from bankrupting apartment complexes was landing there in the Texas S&L scandal days, the next logical place to visit was the duty-free liquor dispensary.

There, the spread in booze price was explored a bit:  Bottle of a so-so name brand rum that would be $17 at the discount liquor store in the next county up from us was going for $11.

Bottom line here:  If you’re looking to save a lot of money on booze by spending a couple of grand on a Western Caribbean cruise, you really ought to instead invest in remedial math classes at the local junior college.  The money would be better spent.

Saving of $6 a bottle didn’t seem like much of a deal.  Once upon a time,; maybe, back in my wilder sailing youth perhaps, but in the “since airplane’s again” mode, fitness and clear-headed trumps everything. 

One of Elaine’s boys has a wee-one:  I think Charli-Jane is about 2 1/2 now, and since her reading is starting early, we got an autographed kids book ($10) that met Elaine’s tough standards. 

E has a bee in her bonnet about idiotic kids books (Grimm’s Fairytales) that serve to do little more than take perfectly good children and install the “fear fonts” in them (to borrow the font module idea from 1980’s coming…yes, we’re that old…).  I still check under bridges for trolls.

With a cut of the dough going to a local school, I didn’t try to dicker on this purchase…just wouldn’t have been right.  Still, it might have been a good idea, since it might be considered practice for running for public office where it seems an equal opportunity to screw everyone, even the nice people, is a necessary prerequisite.

imageWalking and shopping resumed, but by now, I was getting a little warm (it was 91, or so) about the time Elaine (with a twinkle in her eye)  suggested I go sit on a railing which separated the recently-built shops from the beach.

She was busy issuing unintelligible instructions inb my general direction as several groups of tourists wandered by:

I called out to the tourists and asked them if they could smell my burning butt over on the walkway…and somehow that resulted in a good laugh and a picture being snapped.  Locals don’t sit on these railings which is why birth rates are still high here, if you follow.

There’s only one ship per week through this burgh, at the moment, although a local bar owner (who was kind enough to lend me a black marking pen, allowed me to do some “point of purchase advertising (this column may drive you to drink now and then)  on the counter of the Bahia Bar at the top of the tender dock where the tourists flood in and out, like a sea of humanity.  Or fleas.

imageThe bar owner didn’t flinch when we asked for something good – and local – to drink.

He hauled out some native Nicaraguan rum that would make a fine brand for a novel about the tropics and poured us shots about twice the size (and half the price) of drinks on the ship.

This was for a dark golden rum aged in what I swear were old bourbon barrels…as they had that distinctive smoky-corn flavor but none of the corn “nose” to them’

Figuring science was my middle name, the discussion followed quickly as to whether there was a clear version…which there was…and since it didn’t lay down in casks for an hour (or whatever), it didn’t have that corn kind of taste.

You might be able to duplicate the taste of the aged rum with a bit of Makers Mark, a bit of Everclear, distilled water and maybe a dash of Kitchen Bouquet to adjust color.  Maybe a damp spoon of liquid smoke…but not worth the effort.

The bartender runs a place an hour or two drive up the coast where he has a restaurant and bar which keeps him busy because with the cruise ships coming in one day a week (it will go to two ships a week in October) aren’t enough to really keep a business going…yet.\

If all American foreign aid could be administered this way (haggling with locals on the price of goods and drinking Central American rum) I think US foreign policy would be a lot better off.

Back on this ship, we had snacks and rehydrated about 2 PM and waited for dinner time to roll around. 

Elaine struck up a co0nversation with one of the wait staff from the Philippines.  Asked about why she decided to work on a cruise ship, her answer was pretty interesting:

In the Philippines, with a BA in Restaurant and Hotel Management, she was only able to make about $10 a day.  On the ship, she makes several times that.

The best part, however, is that she has plans when she finally ends her cruising days and dreams are what drive people…all people.

Before you rush down to sign up to work on a ship, though, the reality of work should be considered first:

    • Crew work 8-9 months
    • They work 10-hours per day
    • No days off
    • Time in port (when you get it) is about 3-6 hours, depending on port)
    • Crew have a hard time getting cabs to internet cafes
    • They make a bee-line for them on shore because crew has to pay high connection charges on ship.  (That’s because the cost is a pass-through to everyone who uses it)
    • This limits relations to email a couple of times a week
    • Phone calls to home are done with cheap international calling cards.  Which one is a kind of verbal tradition/initiation when joining crew
    • And Houston has a Seamen’s Center nearby when berthed in Houston. 

    Seamen’s centers have played a major role in the writing lives of many writers…thinking back to how Louis L’ Amour described them.  In the days before the Internet, the Seamen’s Centers were where those little books of the Everyman’s Library were passed around, dog-eared and worn, and aspiring writers and poets would read from them  in the forecastle, when there was time at sea…

    Last night’s dinner was the Brazilian themed restaurant.  This is quite a meal, if you go there:  You do the salad bar (great seafood chowder and fresh French bread and Brie somehow ended up on my plate).  Then the staff comes along and slices off whatever meats you want. 

    There we were offered sausages and lamb cuts (pass) and several kinds of steak (filet mignon, thanks, a small bit) and both marinated chicken  legs and bacon-wrapped spiced chicken  (hell yeah).

    The end of the rather perfect evening involved Elaine walking into the casino on Deck 6 where she turned her $20 stake into $89 – how she does this is the 9th wonder of the world.  My $20 stake was turned into a $10 stake, so apparently my luck didn’t make the tender ride back to the ship.

    I’ll be sure and check tonight on whether it has caught up yet, or not.

    Email for the Calendar Impaired

    One of our readers excitedly sent me what I call an “email for the Calendar Impaired:

    Interesting FEBRUARY.

    This year !
    This February cannot come in your life time again.

    Because This year February has  4 sundays,  4 mondays, 4 tuesdays, 4 wednesdays,  4 thursdays,  4 fridays & 4 saturdays.

    This Happens once every 823 years. This is called money bags. So send to at least 5 people or 5 Group’s and money will arrive within 4 days. Based on Chinese Feng Shui. Send within 11 mins of reading.

    Since brushing up on my math skilled (try wading through Wolfram’s Mathematica, right?) I got to thinking “Hold it:  7*4 is 28 and so EVERY February has four of each…”

    I was going to send the reader a note that February of 2009 also started on a Sunday.

    Oh, wait:  Maybe this is a government trick to do a social map of America and see how stupid we really are.

    Bet they won’t be disappointed.

    Time to go wait for the Consumer Prices report from the Labor Department and watch the waves go by.

    Write when you break-even…

    George    george@ure.net