A number of months back, probably a year without gong to the files to look it up, our friends with the time predictive software came up with an amazing read of the future that included references to "rebellion" and "revolution" as the ruling meme for Winter 2006/2007.  At the time it was a pretty outlandish thing to consider.  The economy was cooling, Iraq was devolving, but there was a sense of - for lack of a better term - normalcy.  Remember, this was long before the November elections.

Fast forward to today.  Despite the election, the military is asking for more active troops to be rotated into Iraq, John McCain says another 15-30-thousand are needed, and Secretary of State Condi Rice has ruled out asking neighboring countries (they're Arab states) for help in getting the sectarian violence under control.  And when coupled with the surgery this week on one key democrat, who could make the difference between an effective  republicorp majority in the Senate, or democorp control, I was still surprised to get an angry email from a reader yesterday that spell out why a lot of Americans are starting to feel like events are no longer under control of the electorate:

"IMHO, the U.S. government, both the Legislative and Executive branches, have, by virtue of their f'ait accompli decision to "double down" in Iraq, given the American public license to openly rebel against the government. The voters mandate was clearly opposed to any increase in military activities in Iraq. What we have right now in Washington is essentially a rogue government, and Senator Johnson's fate is meaningless in such a context since the two parties are one and elections clearly don't work as a means for voter self determination.

REVOLT NOW!"

Just so we're clear for the various government agencies that read this site I (the editor here) am NOT CALLING FOR REVOLUTION.  I'm a rabid Constitutionalist, legal process guy.  And I assume the irate reader means by peaceful means at the voting booth.  What I am reporting on in the above email is key because it points to a developing mood  which we've seen in event predictive linguistics.  It seems to be here.

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There are lots of drivers to this propagating mood shift.  Let me give you some of the most obvious: A well informed reader sent us the following analysis:

"What the Administration is really trying to do is lift the TWO-YEAR cap on deploying Reserve/National Guard. The President is only allowed a two year limit on deployments under a Partial Mobilization Order. Quite frankly, the interpretation of the Partial Mob has been severely abused as it is.

 

What this administration is really trying to do is exercise what would be considered a Full Mobilization. The Full Mob requires that Congress DELCARE WAR. This has not been done. It is highly unlikely that the Congress would do this given the general attitude of the American people right now.

 

What kind of government do we have, George, when the Executive branch under a single leader can continue to conduct war and can use people and resources without seeking the consent of Congress? It is no longer a government following the Constitution which I SWORE AN OATH to!"

But the public anger below the surface of contemporary events is not limited to abdication of lawmakers to the corporate-executive alliance (what Ike called the "military-industrial complex, which now includes big pharma as well).  There's the whole economic dimension.  We'll get to this morning's job report in a moment, but to put it in context, let's quickly review the two biggest developments of the week that are virtually invisible in Mainstream Media.

Deficit, Debt and Coins

The huge stories of the week are first, that the Treasury has made the melting down of coins in order to sell the underlying metal (worth more than the money now) illegal by issuing "regulations."  I told you it would come to this, but it's shocking when you actually read the headlines in the NY Times: "Rising Metal Prices Prompt Ban on Melting and Export of Coins."

This is a HUGE story that is being virtually ignored.  Why?  Because it underscores how inflation has stolen the purchasing power of Americans to this incredible degree!  From the Times story:

"According to calculations by the Mint, the metal value of pennies, which are made of copper-coated zinc, is now more than one cent. The metal value of 5-cent coins, made from a copper-nickel blend, is up to 7 cents. Adding in the costs of manufacturing means the Mint now spends 1.73 cents for every penny and 8.74 cents for every nickel it makes. "

OK, gulp, so that's bad.  But then we go from bad to worse when later today the Treasury is expected to announce the true annual deficit of the USA is now $3.5 trillion.

Here, before we get into the inflation story (which I believe as much as I believe in flying reindeer, by the way) let me map out a key statistic.  Assume that we have about 300-million people in America, plus or minus 32 million illegals.  That means your portion of the annual deficit  is:

$3,500,000,000,000

      300,000,000

Which simplifies after some zero whacking to:

$3,500,000,000,000

      300,000,000

Or, about $11,666 for every man, woman, and child.  But, if we use the workforce number (that's about 150-million lately) then the debt is closer to $23,333 per worker. For the year.

"Hmmm..."you're thinking, "So why is Treasury reporting such a ball buster number when the White House budget says the debt is only $248 billion?"  You reach for a pencil and another swig of joe...

$248,500,000,000

      300,000,000

"Hey! That's only $828 of deficit per person and maybe $1650 something per worker...No big deal.  How can they be off by a factor of time times? What gives?"

John Williams' site Shadow Government Statistics boils our current real economy down to this:

• Broad money measures (M3 reconstructed, since it was hidden in March by the banksters) is running 10%, so banking on inflation makes sense (as evidenced by the Treasury having to outlaw melting of coins...)

• Real GDP is probably running negative 1.5%

• Real Consumer price increases are running closer to 9% than the reported annual rate of less than 2% promoted by government.

• And the dollar continues losing its value.

So this morning's headline "Election?  What Elections?" What does it mean?  Just this:  If you had an delusions about a new Congress making any changes, wake up and smell the coffee.  (If you're having a really tough time waking up, try spilling some on yourself.  I find it's painful, but speeds the awakening process...)

There has been no change in Washington. We all voted, but do you see any change?  Corporate coffers and the special interests of Big Money are still firmly in control and they're serving up the same leftovers that we're already sick of. And if you like rehashed has-beens who are married to the old paradigm, you'll just love 2008.

We look for free access by thinking members of the public to be taken away shortly as the thorny question of equal access comes up again.  Can't have those free people exercising too much freedom, now can we?

This week's report for Peoplenomics subscribers will explore a very interesting question: Why do people accept the rule of "government?"

The latest consumer price index figures are out, and while causing me huge levels of cognitive dissonance (as they have pretty much no relationship to the actuals logged in our accounting software here at the ranch), I report the official press handout for your convenience and amusement:

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent in November, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The November level of 201.5 (1982-84=100) was 2.0 percent higher than in November 2005.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) also decreased 0.1 percent in November, prior to seasonal adjustment. The November level of 196.8 (1982-84=100) was 1.8 percent higher than in November 2005.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) decreased 0.2 percent in November on a not seasonally adjusted basis. The November level of 117.0 (December 1999=100) was 1.9 percent higher than in November 2005. Please note that the indexes for the post-2004 period are subject to revision.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U was unchanged in November, following declines of 0.5 percent in each of the preceding two months. Energy prices, which declined sharply in September and October, fell 0.2 percent in November. Within energy, the index for petroleum-based energy decreased 1.5 percent while the index for energy services increased 1.2 percent. The food index decreased 0.1 percent in November. The index for all items less food and energy was virtually unchanged in November, following an increase of

0.1 percent in October. A 0.4 percent increase in shelter costs was partially offset by declines in the indexes for apparel and for the non-energy portion of the transportation index, particularly the indexes for new and used vehicles and for airline fares.

During the first 11 months of 2006, the CPI-U rose at a 2.2 percent seasonally adjusted annual rate (SAAR). This compares with an increase of 3.4 percent for all of 2005. The index for energy, which increased 17.1 percent in 2005, decreased at a 1.6 percent SAAR in the first 11 months of 2006. Petroleum-based energy costs declined at a 1.7 percent rate and charges for energy services fell at a 1.5 percent rate. The food index has increased at a 2.4 percent rate thus far in 2006, following a 2.3 percent rise for all of 2005. Excluding food and energy, the CPI-U advanced at a 2.6 percent SAAR in the first 11 months of 2006 after increasing 2.2 percent in 2005.

OK, here's our back-of-the-envelop chart on the trend of the reported inflation rate.

We also noticed some revisions to the current series which seem to argue for the deflation case, but as I said before, there have been revisions to the current series that drop the rate (seasonal adjustments bring in down, for example).  Above all, this is a government statistic and your mileage will vary!

Don't need Peak oil to push up prices.  Nope, just a decision by OPEC to cut in order to hold prices and more attacks in Nigeria.

Yeah, yeah, I know.  Technically a hurricane has to have "warm water" but frankly, it's a minor distinction in the Pacific Northwest where another "hurricane" has just ripped through the region leaving hundreds of thousands in the dark.  Accuweather reports winds at Mount Hebo Oregon at 114 MPH, 99 MPH at Mount Hood, while Rockaway Beach Oregon had 97 mile an hour winds.  

At press time, KOMO TV had some tree falls on car pictures... Floating bridges, Tacoma Narrows, closed screws up traffic, that sort of thing.

Thursday December 14, 2006

Republicorp Power Shift Pending?

It's been the conventional wisdom that democrats will control the US Senate when business begins in January.  But hold your horses, partner. Democratic Senator Tim Johnson of South Dakota is in the hospital today with what were thought to be stroke symptoms (turns out not to be a stroke, we hear).  But if something is going on with Johnson's health that might cause him to quit the Senate early, then the republicorps could regain control.  As one report sums it up:

"With Johnson, Democrats, who wrested control of the US Congress from Republicans in November's elections, would control the Senate 51-49 when the 110th Congress convenes on January 4.

 

If the senator had to be replaced, South Dakota law says Republican Governor Michael Rounds would name someone to finish the final two years of his six-year term. An election for a successor would be held in November 2008.

 

If Rounds named a Republican, that would put the Senate at 50-50, with Vice President Dick Cheney breaking any tie and putting Republicans in charge."

So the testing continues today and we may know something by this afternoon. But this goes to underscores how close the republicorps are to being back in the drivers seat in the Senate.

Iraq: US to Send More Troops?

If you read most reports on the Iraq Study Group report, it looks like the document is headed for the dumpster.  George Bush has made it clear he wants until after January to consider options.  A change of the balance of power in the Senate is one thing that might be clarified, for example, but also we may see some indications of how well the Iraqi's can step up to prevent their own civil war from exploding further.  Slim odds of that, I reckon, but there's a chance.

---

Something that's bound to come as a surprise is the Army and Marines are planning to ask incoming SecDef Robert Gates for more troops - and if that's not enough, the Washington Post report mentioning to that the Army will ask for "full access" to the 346,000 National Guard and the 200,000 Army Reserves ought to set a lot of nail-biting in motion over the holidays.

Secrets Revealed Continues

The "secrets revealed" meme is still with us - going strong - and apparently will be around at least through the March of 2007 release period.  The latest little "secret" to catch our eye this morning involves the ACLU going nose-to-nose with the Department of Homeland Security over a December 2005 government document marked "secret".  As the Newsday report seems to hint, this is something that's been labeled 'secret" not because it contains a real "secret" (e.g. ship movements, troops, communications, codes, that kind of thing) but rather because it is a blatant statement of a policy which would embarrass the dickens out of the government should it become known to "reglar folks".  Might event make 'em angry.  So, when in doubt, stamp it "national security - secret" and hope no one (like the ACLU in this case) calls BS for over classification. 

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On the other hand, when it comes to genuine enemy combatants against the US, federal judge James Robertson's decision to keep Osama bin Laden's former driver locked up at GitMo seems reasonable.

"War on the Middle Class"

In the best sense of Independence and Liberty, we noticed an ad for  Lou Dobb "Attack on the Middle Class" tonight on CNN (7 PM Eastern, 6 Central, and when the big hand points down to the the right for our friends on the left coast). The timing of this is magnificent.

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For openers, more than 1,200 have been arrested at Swift meat packing plants in six states in what is likely the largest ever immigration raid in the US. And if that's not enough, we note that in Massachusetts, state troopers will be allowed to detain (e.g. arrest) illegals under a new program.  This is a major change from most states where there's something akin to a "catch and release" program.

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As we've stated many times in the past, our objection is not to other races and cultures.  I grew up a white minority kid in a Black/Asian/Hispanic neighborhood and wouldn't have missed my friends and the cultural experience for anything.  I'm in favor of all immigrants to the Melting Pot but where I draw the line, though, is with illegal immigration.  That's a different kettle of fish.

As a result, when I see Dan Tancredo - one of the few in Congress with the balls to call for enforcement of existing laws as a good starting point - having to cancel a trip to Miami, I'm reminded that the public is not given to a lot of high precision thinking.  The precise point  is that illegals in the US should not be here - we have laws against that.  If we need more people, by all means bring them in the same way my legal immigrant friends from Mexico, Cuba, and dozens of other countries came in.  The Green Card route is there for a reason. But sneaking in and paying for a help by smuggling drugs or whatever?  Nope.

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You may not read about it much in the Northern states, but here in the South, we're fully aware that the leaking border is causing all kinds of law enforcement issues - and the heavy drugs lead to crime. For example, WOAI in San Antonio reports 29-people arrested in a major cross-border coke ring.  Does that get much play in the Mainstream?  Nope.

And within hours, a 500 pound pot bust, with a million dollar street value in Chicago. What's $200K worth of pot is $1-million worth in Chicago. Why?  Glad you asked. San Antonio is about 130 miles from the Mexican track and field event, while Chicago is about 1,140 miles.  You're following this, right?

The national mainstream media (MSM) don't bother mentioning the drugs-across-the-border racket when they cover Dan Tancredo's, or other reasonable positions on illegal immigration, yet to deny the link between illegal border crossing and drug running (and hey, let's throw in corporate "amnesty" lobbying by certain industries as long as we're at it) is ludicrous.

I daresay we middle class folks realize that corporations and drug dealers alike, hard squeezed on the bottom line, will do whatever it takes to maintain profits - and if that means ruining the country with under-the-table labor, smuggling, and a big lobbying push for a a one-time "amnesty" (like the Reagan era "one-time amnesty" in 1986) that's just what will happen.

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While I admire Lou Dobbs efforts, it may be that the corporate war on the middle class is over and the middle class has already lost.  Like my younger sister says "If all hope is not lost, where is it?"

Number Watch

Don't forget that tomorrow's report will be out at about 8 AM Central (maybe a few minutes before) instead of our usual 7:30-ish report. November CPI data is due and that's always amusing.  Never comes close to actual life experience, but you knew that.

Wednesday Dec. 13 2006

HalfPastHuman Subscriber Advisory

Cliff and Igor have advised us that due to the inclement weather in the Pacific Northwest this week, the ALTA 907 (Part IV) will be two or three days late. I would expect to see the report perhaps Tuesday of this coming week.  Phone lines are down for some of the "big pipe" and electrics are a bit hit and miss in parts of the Northwest right now.  With another bout of winds possible in the forecast, they'll get the run out as quickly as possible.

"Sun Disease"

We had a wonderful spring day here at the ranch Tuesday - except for the fact that it wasn't spring - in fact it's technically not even winter year for another week.  70-75° expected again today.  Not that we're alone.  Reuters is reporting on how fake snow is being used in the Alps, and how Moscow might have a green Christmas. Matt Drudge is reporting the weather in the Netherlands is breaking 300-year records for warmth. Perhaps following the lead of Al Gore's "An Inconvenient Truth" politicians globally are picking up the climate chant.

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The economic reason to focus on weather is simple:  As goes the weather, so goes the economy to some large extent.  The US Department of Agriculture says cold, dry weather was the order last week, something some commodity traders watch. But it's not only farms that matter, as a warm winter heating season will be more impetus for OPEC's meeting tomorrow to focus on cuts in oil production to maintain high prices.  I don't suppose I need to remind you that vegetable prices in Australia are going up because of the "thousand-year drought" down under. There's a fair bit of economic dislocation resulting.

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An underlying debate continues, though, over just how much of the present odd weather on earth can be laid at the feet of human-caused pollution, and how much can be blamed on pan solar system forces that we're just now beginning to acknowledge.  You know, for a long time, Jim McCanney has been writing about the sun-earth electrical relationship as a, or maybe the major weather driver.  While McCanney's theories has been marginalized by some in the scientific community (think NASA), we note that mainstream science may be starting to change course toward McCanney's work, although without crediting him. 

A current example (electrical pun intended) is found in the Johns Hopkins University Gazette which headlines this week that "Researchers Identify Driver for Near-Earth Space Weather." The article notes that "The researchers, led by Patrick Newell of APL, have developed a formula that describes the merging rate of the magnetic field lines and predicts 10 different types of near-Earth space weather activity, such as the aurora and magnetic disturbances."

Not to be overly critical here, but McCanney has been writing about the Sun-Earth electrical weather link, and for current science to label such a link as "magnetic" is, in my opinion, to dodge using the term electrical, thus avoiding giving McCanney his due; and error we don't intend making.  Not to take anything away from the hard work of contemporary researchers who have continued to advance the technical art, but credit where due: McCanney as best I can reckon, got there first.

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The sun meantime has been acting a little strangely, compared to what it should be doing at this point in the (formerly?) 11-year solar sunspot cycle.  We're at about solar minima and still popping off with X-class solar flares (that's big) including an X-3 flare overnight. And it was just last week that an X-9 flare occurred.

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We're sort of waiting to see if the arrival of the latest energy blast from this most recent X-class flare to arrive tomorrow and Friday.  If our intuition is correct, we might see some extreme weather over the weekend, or perhaps a large earthquake, as the energetic particles bump into earth's magnetosphere.

A more pragmatic reason to just keep an eye on the sun is to recall that solar storming back in 1989 halted all trading on the Toronto Stock Exchange; something easily overlooked.  And I'd point you at the article "Solar Bear Market" for some further discussion of solar impacts on trading.

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To be sure, the current dis-ease of the sun will likely not be the sole (sol?) driver of the stock market's future direction.  That continues to be what we'd call back in b-school a "multivariate nightmare" with titanic forces at play.  I mean, besides the possibility of some solar influences, we see massive friction looming at the promoters of more global financial paper, to keep the economic bubble expanding, continue to promote the idea of exchange traded credit derivatives, square off against rapidly increasing pressure for credit derivative regulation. 

And if that's not enough to drive you into simultaneous equation hell, despite the relatively good news on the balance of trade figures this week, the US trade deficit with China continued to set records in October, notes CNN. That's why Banker Ben and Hank Paulson are in China now, hat in hand.

Quick, Spend More!

Retail sales figures out this morning gave a swift kick to the dollar.  best increase since July - the curious thing is that retail spending is viewed as good for the economy, in spite of the fact that we have to borrow money (evidenced by the declining national personal savings rate) to pay for things.  Buy them sparklies - that huge consumer spending and packaged debt are America's main claims in international finance lately.  Amazingly few see that, however.

Swift Immigration Bust

Sometime this morning we should get better numbers, but Immigration & Customs Enforcement reportedly dropped the hammer on Swift & Company meat processing plants Tuesday - and with more than a thousand agents involved in the bust of alleged illegals, a fair number of arrests can be expected.  The real thing to watch will be to see who in the management food chain is held accountable.

Bush Ponders Iraq

The White House says George Bush will not announce a new Iraq strategy until sometime in 2007.  A poll meantime says 55% of Americans want us out of Iraq in a year. Meantime, Bush's place in history may be as a "below average to poor" president finds a USA Today/Gallup poll.

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With Jeb Bush not ruling out the White House, and Hillary Klinton already running hard, more than a few folks are asking WTF, will we see "Clinton-Bush '08! Clinton-Bush forever"?

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Cynically, we note that while it's illegal for individual humans to outright sell their vote, it's not illegal for billion dollar corporatist empires from buying votes through humungous campaign contributions, the likes of which "jus reglar folk" can't even conceive of..

Thus, my long term agenda for change is that:

1) All political action groups should be barred from making any time of campaign contribution, and speaking honorariums for politicos should be limited to $100 per day total plus actual travel for the pol and spouse.  No more of this open checkbook theft of democracy by the corporatists.  (You did notice how lobbyist reform when "poof"?)

2) All federally licensed radio and television stations would have to contribute free air time to the political candidates - and while the NAB might whine about such a position, consider it a rent payment to the public for use of spectrum.

3) No corporation would be allowed to make ANY campaign contribution.

4) No citizen, or cleverly disguised entityentity, would be able to give more than $50 to ANY political office seeker.

Disruptive?  Sure.  Change always is.

The reason we have the quality of leadership we have in America today is that the financial considerations of politics are more key than the ideology of the folks we put in office.  Ron Paul, Dan Tancredo and a handful of patriots excepted.  Corporations make contributions based on "electability" and "access"  and legislative votes in return for the big bucks to front their elections.

The Framers didn't envision America being taken over by crooked corporatists, but that is exactly and precisely where we are today.  The corporatists on both sides of issue will claim they're only acting as a proxy for the best interests of the citizens. It never seems to work out that way, though.

Power in America has been stolen and the very folks who should be standing up for our Constitution, fighting illegal immigration, and fighting global job jacking.  Not this cadre who were not - and are not - elected by free thinking voters.  Crass corporate "investments" bought your votes and those advertising bills are at a minimum paid for higher prices and in a worse case by anti-human policies of corporations.

 Why does the "defense industry" contribute?  Because without wars and the threat of wars, they won't get fact contracts.  Why does it seem half the TV ads lately are saying "Ask your doctor about this medicine or that?  Because big pharmaceutical giants don't want doctors who make patients healthy - why do you think there is such a push to make vitamins a "prescription only" business? Why does the booze business contribute?  To make certain God-created plants are made illegal to maintain their monopoly on "buzz" despite the fact that ingesting ethanol kills - you don't have to be MADD to figure that out, do you?   And when the illegal drug business flourishes, to the tune of half a trillion a year, we know the families in power get their secret cuts and see a whole industry built locking up people for pursuing unregulated free enterprise.  There wouldn't be a drug business if there wasn't a need, but solving the underlying social drivers takes work and there's not as much money in that.

Don't get me wrong.  America is (or at least was) the greatest country on Earth.  But what the Framers set up was not cattle/chattel/sheeple programmed by advertising in a land shaped by PACs and corporations and the administrative shadow government.

Without a little outrage and a continuing move toward positive change, what we get in '08 is almost certain to be more of the same.  So maybe we deserve what we get?  Back to my coffee.

The Mogambo

We're pleased every Wednesday to post the economic commentary of The Mogambo Guru, who's also known as the angriest man in economics.  Should be up most Wednesdays around 8:15 AM Central Time at our mirror site www.independencejournal.com - click on the Mogambo tab on the left menu.

Tuesday Dec 12, 2006

Fed Decision

From the FOMC Meeting:

"The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

 

Economic growth has slowed over the course of the year, partly reflecting a substantial cooling of the housing market. Although recent indicators have been mixed, the economy seems likely to expand at a moderate pace on balance over coming quarters.

 

Readings on core inflation have been elevated, and the high level of resource utilization has the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time, reflecting reduced impetus from energy prices, contained inflation expectations, and the cumulative effects of monetary policy actions and other factors restraining aggregate demand.

 

Nonetheless, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

 

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; William Poole; Kevin M. Warsh; and Janet L. Yellen. Voting against was Jeffrey M. Lacker, who preferred an increase of 25 basis points in the federal funds rate target at this meeting.

Balance of Trade

While we bide our time waiting for this afternoon's Fed decision, it's important to note that the balance of trade picture improved a bit last month:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total October exports of $123.6 billion and imports of $182.5 billion resulted in a goods and services deficit of $58.9 billion, $5.4 billion less than the $64.3 billion in September, revised. October exports were $0.3 billion more than September exports of $123.4 billion. October imports were $5.1 billion less than September imports of $187.6 billion.

 

In October, the goods deficit decreased $5.2 billion from September to $65.1 billion, and the services surplus increased $0.2 billion to $6.2 billion. Exports of goods decreased $0.1 billion to $88.5 billion, and imports of goods decreased $5.3 billion to $153.6 billion. Exports of services increased $0.4 billion to $35.2 billion, and imports of services increased $0.2 billion to $28.9 billion.

 

In October, the goods and services deficit was down $7.7 billion from October 2005. Exports were up $15.0 billion, or 13.8 percent, and imports were up $7.3 billion, or 4.2 percent.

 

Before you get wildly bullish on the dollar, I'd suggest you remember that this doesn't mean that we're digging our way out of the Balance of Trade Deficit.  It just means the hole was dug a little slower in the latest reporting month.

Message in the Spy Death

We don't usually publish contributed reports, but this one is compelling because, as it clearly lays out, there may be a very important message in the events surrounding the death recently of a Russian spy.   I believe the bottom line of this report should probably weigh on your family's preparedness plans for next spring.

"On November 1, 2006, a former Russian secret agent named Alexander Litvinenko has a busy day of meetings in London.  In the years since fleeing Russia, he has made a living writing books and articles blasting Russian President Vladimir Putin.  His current project is investigating the recent shooting death of an anti-Kremlin Russian journalist.  The first meeting is with two men he later claims are former Russian KGB agents.  The second meeting is held over lunch in a sushi restaurant with Mario Scaramella, an Italian who had served on a commission investigating Russian influence and intelligence penetration in Italian political life.[1]

 

Litvinenko begins to feel ill a few hours after his meetings.[2]  He later begins to vomit and on November 4, he checks into a London hospital.

 

Confusion sets in.  It becomes obvious that Litvinenko has been poisoned.  All of his hair falls out and his body is wracked by something that is attacking his vital organs.  The hair loss feeds suspicions that someone has poisoned him with thallium.  Thallium is a heavy metal and has been used in the past as rat poison.  Thallium is so toxic that it has been called “The Poisoner’s Poison.”[3]  Things remain curious, especially when one doctor says it might have been “radioactive thallium”.  On the surface this would appear to be absurd, since most of the relatively “easy” to make isotopes of thallium have half-lives measured in minutes or seconds[4] (a half life is the time it takes for a radioactive substance to lose half of its mass by decaying into a different element).

 

Then on November 22, doctors determine he hasn’t been poisoned by Thallium.  By the next day he is dead.

 

The cause of death is later determined to be radiation poisoning.  Doctors say that Litvinenko ingested a highly toxic and radioactive material called Polonium 210 (Po-210).

 

As Litvinenko was a constant critic of Putin, most were quick to assume that the Russian government was involved in some fashion in the killing.  Among other things, Litvinenko had accused Putin of everything from being a pedophile[5], to masterminding the bombing of some Russian apartment buildings – a bombing that was blamed on Chechen terrorists and used as an excuse for Putin to ramp up a war in Chechnya[6].

 

Oh yes, and on his deathbed, Litvinenko publicly converted to Islam.  And his next door neighbor was the Foreign Minister (in exile) of the Chechen Republic Akhmed Zakayev, who came to visit him two days before his death[7].

 

His death seems to be a tale taken from a spy novel, and a lurid, cheap spy novel at that.  Former spy who has defected later meets with other shady characters, investigating the assassination of an anti-Kremlin journalist and later winds up dead, victim of a horrible and complex poisoning plot.  And apparently he was sympathetic enough to at least the Muslim cause in Chechnya that he converted to Islam two days before his death.  And the poison used to take him down is an exotic material with a strange history of its own.

 

What is Po-210?

Doctors would soon confirm their suspicions that Litvinenko had been killed by exposure to Po-210.  This raised eyebrows and set off alarm bells across the globe.

 

The basics don’t sound too ominous.  Po-210 was isolated and named by Marie Curie back in 1898.  It is found in extremely tiny amounts in soil and in more concentrated (but still extremely small) amounts in uranium ore.  It is what is known as an “alpha emitter”.  Radioactive materials (called isotopes) are unstable and want to find a stable state.  To do this, they give off energy.  Sometimes this energy is in the form of gamma rays (a very, very intense type of light).  Other times the isotope will kick out what is called a “beta particle” – a small, negatively charged particle ejected from the nucleus.  Some isotopes are so unstable that they eject the equivalent of a helium atom out of the nucleus.  This is called an alpha particle. 

 

On the atomic scale alpha particles are very large and are often traveling at very high energies.  The good thing is that these particles can be stopped by something as thin as a piece of paper, or the upper layer of your skin.  To cause a person harm, an alpha emitter such as Po-210 must be swallowed or inhaled.  Once the Po-210 is in your body, it continues to throw out alpha particles which tear into the vulnerable cells of your body.  In large enough quantities (a fraction of a gram) this material can eventually kill enough of the cells in your vital organs to kill you.

 

At this point, it doesn’t sound too scary.  Just don’t eat the polonium and you’ll be fine.

 

However, the alarm bells going off are based on a piece of military history.  Po-210 kicks out alpha particles at high energies.  When alpha particles strike a [other element] atom, a neutron is ejected.  In the early days of research into nuclear physics, small polonium-[other element] sources were constructed to make a “neutron source”. 

 

And the Manhattan Project used that setup to build a trigger for the first atomic bombs[8].

 

You needed this neutron source to guarantee that you would get plenty of neutrons to start your chain reaction when attempting to detonate a nuclear bomb.  These triggers were assembled in small golf-ball-shaped spheres (or other configurations) and placed in the heart of nuclear warheads.

 

To get the Po-210 in large enough amounts to make plenty of triggers, scientists developed a way to take the metal bismuth, put it in a nuclear reactor and transmute it into Po-210 and then go through a chemical processing step to pull out the Po-210.

 

Due to its intensity, Po-210 decays fairly rapidly.  It has a half-life of 138 days.  Start off with 1 gram and in a little over four months, you have 0.5 grams.  Four months after that, 0.25 grams, and so on.  If you want to use this material to trigger a bomb, you have to have a constant supply.  The difficulty in making it means you need a nuclear reactor and chemical processing factory.  This is not garage chemistry, at least to get significant amounts.  Remember this.

 

Something else to tuck away in the back of your mind.  The old Soviet Union at one time fielded a fleet of “suitcase nukes” – nuclear weapons made from the lowest amount of fissile material possible (roughly 25 pounds of plutonium 239) and constructed to fit in a carrying case small enough to be transported by a single operative.  Such small devices needed a very reliable and efficient neutron trigger to make sure the weapon would not fizzle.  The triggers were constructed using Po-210.  After the fall of the Soviet Union, a number of these devices went missing and remain unaccounted for[9].  Without the trigger, they are just lumps of warm metal.  And since the triggers would have decayed away long ago, there would seem to be nothing much to worry about.

 

One final point - and this has been made clear by the many news stories of contamination being found in planes, bars, Litvinenko’s home, an apartment in Germany, etc. – Po-210 is very difficult to work with.  It spreads very easily and can contaminate anything it gets near.  For those in the radiochemical processing industry, this is a well-known fact.

 

“…for reasons never satisfactorily explained by experiment, the metal [Po-210] migrates from place to place and can quickly contaminate large areas.  ‘This isotope has been observed to migrate upstream against a current of air,’ notes a postwar [World War II] British report on polonium, ‘and to translocate under conditions where it would appear to be doing so of its own accord.’  Chemists at Los Alamos learned to look for it embedded in the walls of shipping containers when [the Po-210] foils came up short.”

 

            Source: Richard Rhodes, The Making of the Atomic Bomb, pp. 579-580

 

So this material is toxic – but only if ingested.  It is highly radioactive, but decays relatively quickly.  Its main historical use has been as a trigger for nuclear weapons.  It is messy beyond belief.

 

And Alexander Litvinenko died from having been exposed to a large amount of it.

 

The Mainstream Media and Litvinenko’s Death

Polonium is an exotic, toxic material with a few specific uses and odd history.  Alexander Litvinenko was a former spy who spent years insulting and baiting the authoritarian president of Russia.  Litvinenko died an agonizing death from Po-210 poisoning and to his dying breath accused Putin and the Russian government of being behind the murder[10].

 

It makes a certain amount of sense.  The Russians have a history of poisoning defectors on foreign soil[11] and Putin has certainly not endeared himself to the West with his stances on energy supplies to Europe and his tacit support for Iran’s nuclear program.

 

The mainstream media are especially happy to pick up this story line as Litvinenko was supposedly investigating the assassination of “one of their own” – dead Russian journalist Anna Politkovskaya[12].  It makes great news – scrappy muckrakers fighting the Powers that Be and being murdered for their efforts.  It plays well and it allows journalists to trot out the tired old horse of “radiation poisoning” and “potential dirty bomb” – themes that strike immediate fear, make strong headlines and sell newspapers.

 

The problem comes when you take a deeper look.

 

The number one question to ask about any crime is reflected in the ancient Roman maxim ‘cui bono’ – who benefits?  The easy answer that plays well is that Putin benefits, of course.  He doesn’t like people who reveal the dirty secrets of the Chechen war, or black ops by “rogue” FSB elements or his (real or imagined) taste for young boys.  So he obviously killed Litvinenko.

 

Again comes the question, why?  There is zero mileage to be gained from killing a has-been ex-agent who was part of a losing faction (Litvinenko was a protégé of Boris Berezovsky[13], a Russian oligarch who was forced to flee Russia after Putin came to power) in a Kremlin power struggle.  Litvinenko’s writings were not influential in Russia.  And after Putin lifted up the shirt of a young boy and kissed his belly in full public view, Litvinenko was not exactly the only person calling Putin a child molester.  Why would Putin care about him?  Putin is playing a bigger game, positioning Russia as a major player in the petroleum and natural gas markets in an era of high prices and trying to rebuild Russian power and influence abroad.

 

Maybe Litvinenko was killed to send a message?  Don’t talk mean about Putin or else we’ll spend a tremendous effort in radiochemical processing, gather up a fraction of a gram of substance that easily contaminates its surroundings, then find a way to make sure this tiny amount of material is put in just the right place where you will eat or drink it and then you’ll linger over the course of many weeks, allowing you time to scream to the world that “Putin did it!”

 

Is it possible that this complicated process was used as a tool of assassination?  Sure.  Plausible or likely?  No.  If the Russians want you dead, you will be dead.  A bullet or car bomb is far cheaper than Po-210 and, frankly, far more reliable.

 

Another and More Frightening Kind of Message

There are, of course, other kinds of messages such a death could send.  One theory that surfaced, albeit quietly, soon after Litvinenko’s death was that he had accidentally poisoned himself while “playing around with dirty bomb material.” [14] 

 

Litvinenko’s association with Chechen separatists has been noted above.  When still part of the Soviet Union, Chechnya housed a nuclear processing and waste facility near Grozny[15] and there have been reports of the theft and attempted theft of nuclear materials by Chechen rebels surfacing and resurfacing over the years[16].

 

The fact of his “death bed conversion” to Islam is also a very interesting point to note.  Had a KGB and later FSB agent converted to Islam years ago, publicly, one would be forgiven for assuming it was an act, a way for an agent to penetrate a large movement opposing the Soviet, and later Russian State.  Instead, we have a man who waited until his time was almost out to acknowledge this part of his life.  Whether it was merely to express “solidarity with the Chechen people”[17] or whether it was a final public expression of a long-held private belief, this data point should be alarming when paired with the fact that he died from intense poisoning from Po-210.

 

To recap, the Chechens have a known history of searching out and attempting to, or succeeding in, stealing nuclear materials for use against Russia.  If the Chechens have somehow succeeded in stealing, say, a suitcase nuke, it would be useless to them, as by now the Po-210 used to make the original trigger would have decayed into an inert and useless lump of Lead 206.  However, if the Chechens have succeeded in not only obtaining a nuclear warhead, but in stealing enough nuclear waste or material to run through a chemical separation process (something high in Radium content would do, as it can eventually decay down into polonium[18], skipping the need to put bismuth in a nuclear reactor), then we have moved things to a whole new level[19]. 

 

The “dirty bomb” argument will be trotted out by the media, but this is a red herring, at least where Po-210 is concerned.  Po-210 is practically worthless as dirty bomb material.  It barely gives off any gamma rays and can be shielded easily.  For a weapon of mass disruption, which is what a dirty bomb is, you need a substance that will set off Geiger counters at a significant rate, allowing the media to record the hisses and clicks as the detection devices are run over the rubble and use that audio and video to spread terror with misinformed newscasts.  You want something like Radium, Cobalt 60, or some isotopes of Cesium.  Those materials are easier to obtain and play much better on TV.  This is almost certainly NOT some dirty bomb story.

 

Running a chemical separation process on nuclear material is fairly complex and definitely dangerous when working on stolen waste or fuel rods.  That said, if the chemical separation step is the only one you need to make, then your problems have been narrowed down considerably.  To illustrate this point, please note that the first Po-210 mass-produced for the Manhattan Project was purified in an indoor tennis court on a private estate outside of Dayton, Ohio[20].  It can be done with limited means if you have people willing to risk intense exposure to the many other very radioactive isotopes that are in the stew of materials from which you are trying to pull your polonium.

 

What if Litvinenko, in support of his Chechen associates, was involved in the production of a trigger to make a currently-useless nuclear warhead once again operational?  He wouldn’t have had to been involved in the actual processing – if done in crude facilities those men or women are already dead.  He could have been part of a planning team for the next phase in the Muslim Chechen offensive against Russia.  In that capacity, he could have been shown either a device or the trigger itself as proof that their work was yielding results.  As we have seen, Po-210 contaminates everything it gets near.  A speck smaller than the width of a human hair could have been picked up on his clothing or hands and later ingested.  This is not unheard of.  Early in the British nuclear program, two workers were found to have been exposed to Po-210.  One was through lax manufacturing techniques and the other by ingesting material that was dropped on accident[21].  It can happen.  It has happened.

 

Litvinenko falls ill.  As it gets worse and worse, he either realizes that he’s accidentally been poisoned or else at the time truly believes the Russians have caught him playing a dangerous game and have poisoned him.  Either way, he uses his remaining days to focus suspicion not on his Islamic and Chechen ties, but on a regime most in the West dislike and distrust.

 

The real message, the one found by reading between the lines, not the MSM headlines, is much more frightening.  This message states quite clearly that individuals with known ties to Chechen insurgents (beneficiaries of intense support from radical Islamic terrorists from around the world[22]) have succeeded in processing enough nuclear material to produce an exotic substance with one real use – as part of the trigger for a basic nuclear warhead.  If these same insurgents have also acquired a nuclear warhead, especially a small nuclear device that could be easily transported, then we have entered into a new nightmare world where terrorists do have a functioning nuclear warhead.

 

It also means that their supply of Po-210 is almost certainly limited and that every day that passes means their trigger becomes weaker and weaker.  Within a year, two at the most, the material obtained with such painstaking effort (if this scenario is true) will become worthless specks of lead.  They have no reason to delay in using such a device, if that is their intent.

 

That’s some message.

 

 

References

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[1] Timeline:  Former Russian Spy Case.  BBC News (updated 10 December 2006).  Retrieved on 10 December 2006.

[2] Litvinenko Was Told He Was Marked for Death.  Michael Evans, et al, Times Online (22 November 2006).  Retrieved on 9 December 2006.

[3] Thallium.  Wikipedia article (9 December 2006).  Retrieved on 10 December 2006.

[4] Thallium Isotopes.  GE Nuclear Energy and Lockheed Martin, Chart of the Nuclides, 15th edition.

[5] The Kremlin Pedophile.  Alexander Litvinenko (5 July 2006).  Retrieved on 8 December 2006.

[6] Russian Apartment Bombings.  Wikipedia article (8 December 2006).  Retrieved on 10 December 2006.

[7] Did He Let His Guard Down? Ginanne Brownell, Newsweek (30 November 2006).  Retrieved on 9 December 2006.

[8] Polonium article.  Weapons of Mass Destruction at GlobalSecurity.org.  Retrieved on 10 December 2006

[9] Suitcase Bomb.  Wikipedia article (10 December 2006).  Retrieved on 10 December 2006.

[10] In Full: Litvinenko Statement.  BBC News (24 November 2006).  Retrieved on 11 December 2006.

[11] Georgi Markov.  Wikipedia article (8 December 2006).  Retrieved on 10 December 2006.

[12] Her Own Death, Foretold.  Anna Politkovskaya.  Washington Post (15 October 2006).  Retrieved on 10 December 2006.

[13] Boris Berezovsky.  Wikipedia article (10 December 2006).  Retrieved on 11 December 2006.

[14] Litvinenko and His Muslim Connections.  The Islamic Threat (8 December 2006).  Retrieved on 11 December 2006.

[15] Russian Nuclear Material Stolen During War in Chechnya.  World