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Unique Gifts Department With the forecast for this part of Texas calling for a 40% chance of showers on Sunday night, we're actually hoping for a white Christmas, but the odds seem kinda low. Nevertheless, it would be nice. Send a note to the weather control department. That'd be a splendid gift. --- Christmas, being the economic story of the day, I suppose we should start with a quick review of the extended hours at the various malls and such. Elaine and I have sworn not to participate in the madness - yet - electing instead to hold off until the after Christmas sales, when prices will likely be better. I did find the report in Investors Business Daily about internet retailing being up 25% pretty interesting. --- If you're running out to buy a last-minute big ticket item, you'll almost certainly want to consider whether and extended warranty makes sense. A good article by the editors of Consumer Reports is available online and if I read it right, extended warranties may not be such a good deal. But then again, I never buy them, being (as I found out this year) a T2 haplogroup Danish/Scottish mix genetically speaking. A gift from my eldest daughter, Denise, who works at Genelex.
After reading the report of my ancestry on my mother's side, (which was extensive), I decided you might be interested in learning how such things work. My certificate will be framed in my new office, so I can tell visitors that genetically, I'm Clan Tara and and Scottishly, if that's a word, some McEwar/MacIvor mix.
It's a pretty unique gift, to be sure. Details. --- The recent storm in Seattle has Cliff of www.halfpasthuman.com buying another generator. The one he's had for a long time failed at the worst possible moment, so he's getting a big Isuzu 12 kw unit, because, among other things, it comes with on-site service. The HPH data run should resume in a week or two, and the time monks have noodled a way around the data blip caused by the hurricane force windstorm interruption.
Good generators are not cheap, but my "bargain" from China has a bad generator head, and I will likely be able to cobble a new head onto it because I have a couple of tools in my shop (courtesy of my main consulting client) which most folks don't have: A small lathe and a newly arrived for Christmas vertical head milling machine. Not to mention the welder and metal-cutting bandsaw. Between them, they should allow me to fabricate just about anything.
But, even if you have the big-boy tools for such things, and although they are closed until after the first of the year, my favorite bookstore on the planet is Lindsay's Technical Books. Sometime between chores around the ranch, I've sworn that in 2007 I will get some basic aluminum casting done, following the recipes laid down by the legendary David Gingery. If there's a series of books to have on any handyman's bookshelf, it's the complete Gingery series because what he does is show you how to make a great machine shop from the ground up, starting with basic metal casting. I think by book 3, you're making a metal shaping machine, and a ways further into the series, a sheet metal bending machine. Very cool stuff. --- If you don't have a hobby, such as machining things, peering into the future, or writing pretty much non-stop, you should consider ham radio. Yeah, I have a particular bias having been a ham since 1960 something (and a first class commercial ticket holder, now a GROL License too BTW) but it is really a great hobby and there's nothing that compares to the thrill of talking (or sending pictures) around the world without the internet and without a phone company in the mix.
A lot of people consider ham radio difficult to enter (and yes, if your IQ is below room temperature, you might want to pick something else, but the FCC this week issued a report and order eliminating the Morse Code requirement, saying in part: So now, you can click over to the American Radio Relay League's web site, and see that yes, it looks like in February, the Morse Code hurdle should be gone in February, so if you've put off getting into this hobby/public service, stop fooling around and get cracking the books.
Our Houston Bureau raised an interesting question last week (prior to the no-code decision by the Commission). "Can I make a few recommendations on pieces of equipment to buy for someone starting out?"
Sure. You can look around on eBay and come up with some great used radios. I like the Icom 735 because it has a general coverage receiver. At night, you can hear something on virtually every channel on the broadcast band. These are fairly recent radios, so they have good sensitivity and selectivity. eHam.net has a marvelous collection of reviews on a huge amount of ham radio gear, so if something catches your eye, see if there's a review listed.
For a great entry level (new) radio, I would pick (and own) an Icom 718.
I could go on about the various aspects of the hobby - designing and building your own equipment, antennas, and such, or trying to talk to people in 100-countries or more for various awards, or collecting old equipment, or just shooting the breeze with people on the other side of the country, but enough of a sales pitch. No Morse Code come February, so no excuses, next time the power goes down. --- Hmmm...how much have we spent so far for you? Genetics test, generator, ham gear, Gingery books (the bargain pick). Yeah, that should run your bank card up to max! And let's throw in an LCD TV for Elaine so she has a better TV in the kitchen. No wonder consumer spending was up in November, and seems likely be up in December.
Are our suggestions too far out? Here are some more-or-less conventional suggestions.
Product Placement Did you catch the official portrait of Jeb Bush? His Blackberry shows up.
Gas Prices As we've been expecting, Russia is using its economic weapon natural gas. Expect Ukraine to be ticked... --- Did you see where the Alaska Oil Spill settlement with Exxon was whacked about in half this week?
Helping Terrorists Plan? Our double duh of the day goes to the news media that report on a study that says the NY subway system could be flooded in just hours with a few well-placed small bombs.
Saudi-Iran Tensions You might remember a while back that we posited that Dick Cheney's recent trip to Saudi Arabia was to tell him that The US won't pull out of Iraq or the Saudis would use their oil weapon against us? Well, here's a little historical insight into tensions between Sunnis and Shiites in that part of the world as a US federal judge has ruled that Iran has some responsibility for a bombing in Saudi in 1996. Big money involved in this decision.
Peoplenomics: Comparative Economics While the focus of this week's report was planned to be an exploration of why humans accept the role of government to control various aspects of their lives, something more important has been sent in by a reader who demands to know "If you're the People's Economist, why aren't you rich?" First, who says I'm not? And secondly, it depends on how you want to handle a sticky question of "comparative economics." As I pointed out in this week's ChartPack (click here) gold has outperformed the Dow so far this year. So let's spend a few minutes and let me show you how various investment alternatives have performed this year.
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Friday December 22, 2006 Travel and other Lumps of Coal "I'm not the Grinch, I tell yah, I just read too much!" That's the most reasonable explanation I can come up with in light of the travel rush that's going off the scale today. Millions take to the roads, and as long as they stay sober, the oncoming drivers are not half in the bag, and the gift were remembered (say, did you unplug the iron?) everything should be fine.
Until you need to "fill'er up!" on the way to or fro. Typical is this from the Southern California Auto Club:
Not that this should come as any big surprise, as it seems to our credit card slips, that the price has been going up since the elections. --- Energy's strong bounce will likely have the fat dude rethinking lumps of coal, too. We notice that Kansas' governor is talking about putting in coal plants, and we've got some on the drawing board (though no green-lit yet) here in East Texas, too. No point giving bad children lumps of coal - might start them thinking about careers in major oil companies.
Still, getting little notice outside of alarmist sites (like this one) is the report from OPEC that peak oil could be near or here. In fact, their latest issue of the OPEC Bulletin uses the phrase "peak oil" 11-times. And on page 63 of their report, OPEC writes:
It has me asking questions like "Can we put in a wood stove this spring?" and "What kinda mileage do reindeer get?" Obviously there is a Peak Oil out there, and for OPEC's Bulletin to write "...because we are at, or near, the production peak" is some kind of Christmas present. --- I have to remind myself that this is Christmas, and I have almost a duty not to dwell on the underlying economic drivers (no oil equals no food, for example, or high oil prices equals high food costs), but when I picked up a sack of cracked corn for the chickens last week, the 50-pound bag was over $8 bucks. So I've advised Elaine to start loading up on poultry for the freezer because prices don't seem to be heading down. My neighbor across the road noted that his feed costs are "going through the roof," too. --- But back to our travel focus this morning: Santa may need to file under instrument flight rules for his Colorado and central US work, as the Colorado blizzard is screwing up air travel. Those kind of things always befuddle a few travelers in sunny climes who don't understand that "No equipment means no flight" so a 737 grounded in Denver can strand folks in Floriduh.
It's estimated that one person in four (64.9 million as figured by the Land-Star) will travel more than 50-miles this holiday. Here at the ranch, we'll maybe make a run into town for supplies, but that will be it.
In London, the pea soup had grounded much of Heathrow's traffic. But most recent reports have it thinning out. --- Amidst all the stories about Christmas that are popping out today, perhaps none causes me more "Huh?" time than the headline that "Santa Claus at home in Ho Chi Minh City" which explains how Christmas is taking hold in Vietnam. I wonder how many guys who weathered the Tet offensive ever thought this time would arrive?
Then again, who would have thought Santa would be advised to wear a helmet for people throwing things at him in Scotland? Perhaps a case of Scotch and Scots?
Fish and Chips Forecast Knowing that the world's oceans will be bare by 2048, we're half-heartedly watching the various nations who are doing the over-fishing blame one another and demand equal (or more than equal) access to the declining resource.
For those who have not awakened, go read about peak oil, then peak fish, and repeat after me: "Planets have limited carrying capacities!" Maybe that's why Star Fleet had a Prime Directive, huh?
Income and Expenditures Personal Income data is out this morning: But before you start wassailing on this news, read the fine print about personal savings:
Let's see, negative 1% in a month - so you will take out what, 13% something annualized from your savings? Lumps of coal, anyone?
Testing the Draft The Selective Service is planning a test of the military draft, but not before 2009, or at least so say reports. But with George Bush and the compliant democorps sending more troops early in the new year, I'd wager the test gets moved up. Condi's saying the sacrifice of lives and money is worth it. Whatever "it" is.
A Rice quote that caught my eye was this: ""Along the way there have been plenty of markers that show that this is a country that is worth the investment, because once it emerges as a country that is a stabilizing factor, you will have a very different kind of Middle East."
"Markers" madam Secretary? Oh, like the West is now getting some cheap oil from Iraq, or the nearly full-scale civil war between the Shiites and the Sunnis. or demands for more troops? The 3,000 dead US soldiers? I must have dozed off and missed some of the other markers along the way. I wouldn't call judge-swapping in the "fair trial before he's hung" of Saddam Hussein a big show of judicial integrity. Or the death of all those defense lawyers, early in the charade.
I'd love nothing more than to share those positive "markers" with you, because I want America to do the right thing, but they seem as elusive as elves, and the reports don't seem to ask the obvious follow-up question "What markers are you talking about?". Unchallenged by reporters - that's the amazing part - they mindlessly report things like "markers" and expect the public to swallow it. (Which they do, in the main...)
Population Growth Amusing: Montana added 10,000 residents in 2006 according to the Census Bureau. That's nothing. Why, here in Texas we get that many every two or three days from Mexico.
GM to #2? Toyota has its sights on GM for 2007 and figures to take over #1. Fit, finish, mileage, style, support, and Detroit's previous reputation are taking their toll. And most of the Toyotas are now built in America, right?
Don't Remind Us The boys at www.halfpasthuman.com are pleased to report their power is back on and they will shortly be resuming their current future event predictive run. But it might be a week or two because we've never had to deal with "software interruptus" before. And yes, there was something about a 35 day clock for a big West Coast earthquake after the West Coast hurricane (which this probably qualified as) so with the clock ticking, time will tell...we'll see what immediacy values look like as the systems come back on line.
Wise Men and Virgin Birth Yeah, but it's not what you think. It's a story of immaculate conception among Komodo dragons. Lumps of coal for the Komodos.
Thursday December 22, 2006
The Wars/Revolutions/Rebellions Just down the globe from the simmering civil wars of the Middle East, we notice that fears are now that Somalia will break into full blown civil war next. --- On the Iraq civil war front, Bill Wineke of the Wisconsin State Journal figure's George Bush's inclination to put in more troops and bee up the military may have to be made because "No one is afraid of us anymore." A good observation. So is Colin power's observation that a troop boost won't likely stop this civil war. --- If you've got a calculator handy, the Pentagon is asking for about $100 billion more for the wars in Iraq and Afghanistan. I may not be awake yet, but I think that pencils to $667 per taxpayer in the workforce. --- --- And in Bangladesh, the opposition party is warning of the possibility of civil war over their elections. --- Not to be forgotten is the civil war in Sri Lanka. --- So why these reminders of six actual or threatening civil wars? Gee, could it be that while we're all off for the next week singing "Peace on Earth, Good Will toward men" that it's just a scaled up commercialized version of what I think of as "Corporatist Six Days, 'Christian' Sundays Only" syndrome?
Global Stress But don't feel bad, the stress imposed by corporate life is nicely widespread, thanks to the (current) success of the global corporate empire builders. An AP article notes that "About three-fourths of people in the United States, Australia, Canada, France, Germany, Italy, South Korea and the United Kingdom say they experience stress on a daily basis, according to AP-Ipsos polling. Those anxious feelings are even more intense during the holidays." But don't let that stress you out...here, have some eggnog.
Speaking of Eggs and Such Another round of poultry die-off is beginning to be reported in Vietnam. Next thing you know, it will be back in the USA mainstream. What is mainstream is that Indonesia is reported as making some headway in the fight to contain bird flu. We'll just load up on eggnog this year, just in case. Thanks, don't mind if I do...
Blogola? Maybe you're too young to remember the heydays of Payola in the record industry. It was a period when certain disc jockeys on major powerhouse radio stations around the country would receive "favors" (usually money) in return for hyping this new artist or that.
OK, fast forward to today: Apparently there are some bloggers who accept money in return for favorable reviews of this product or that. In a responsible and first-in-the-industry move, PayPerPost is telling their bloggers that they must disclose payments.
Sadly, no one has offered UrbanSurvival or my other sites any money to promote anything, and ads here are clearly differentiated from editorial, as it should be. Shucks, didn't even get a chance to turn down the money. But then again, I wouldn't call this site a "blog" - its more along the line of news analytics and analysis.
Swift Moves Following the widely reported raid on Swift meat packing plants, we read reports that workers are lining up for any jobs opened up.
Snowed Yeah, snow in Colorado. But what do you expect this time of year? Duh-of-the-day. But here's something you might think about while you're denying global warming: have you looked at all the "no white Christmas" stories that are popping up even in places like Michigan?
Here, have some more eggnog.
The Weather Service considers a White Christmas one where there's an inch of snow on the ground at 7 AM on Christmas morning. I'm surprised they haven't been sued by someone over that. Yeah, another drop of nog? Sure...
Life After Bill We note that Monica Lewinsky has graduated from the London School of Economics. MS in Social Psychology. --- "heere...I'll ahb jus wun more negggog...and then git bak to wurk. Brekfust of champyuns..."
Wednesday December 20, 2006 Half Billion Dollar Lessons This weekend, our Peoplenomics report will deal with something very important (at least in terms of real "urban survival") - the lessons and experiences of readers in the Pacific Northwest who were more prepared than most for the windstorm which cut power last Friday to more than a million power customers. Quietly - and you're not reading a lot about this is the mainstream media (MSM) - the losses, and I'm talking insured losses, could top half a billion dollars. That's a lot of dough.
One thing people outside the Northwest don't realize, when they read reports that only 172,500 customers were still out on Tuesday is that Northwest power officials love the word customers. Why? It makes the numbers seem small and manageable. But, if you've lived in the region (where I covered news for more than a decade) you come to understand that a "customer" could be a whole shopping mall, or a medium-sized company. So, when you hear reports that parts of the Northwest will have a dark Christmas, remember that most of the press doesn't make the distinction between "customers" and "humans". We've captured some very important - and I must say surprising - lessons to share with subscribers this weekend. I know, Grinch! --- Steam plume, not an eruption at Mt St. Helens Tuesday.
Screwing the Poor Not that I'm the only Grinch out and about. There's a new report on sub-prime lending saying that thanks to escalating rates, 2.2 million families are facing foreclosure on loans that were made to take advantage of who? As much as $164 billion dollars is involved here. --- I'm must be some kind of nut job: I see a distinction between pure unadulterated capitalism, which will find a market for the shirt on your back, and social capitalism; or for lack of a better term, capitalism with a heart and cognizant of limits to Petri dish earth. No money in that though, at least not when a housing bubble is being blown up, is there?
Credit Bubble Trouble Bill Fleckenstein (was up in the Northwest, last I checked, but I guess he has power...) writes over at MSN Money that you should maybe be looking at sales tax receipts as an indicator of how people are spending (or not spending). One way to look at it is that it's an echo of the 2000 tax revenue drop which led to what in 2002/03?. --- Not that sales taxes are the only key to what comes our way in 2007. Nope, there's the Leap2020.eu folks who remind us in their latest head-up that: Heck, I feel a lesser Grinch already!
But Wait! Here's an email from reader BW who pens:
Clearly, this reader is missing the point that there is no reason for anyone in the financial community to be the first to yell "Fire!". Write this down somewhere where you can read it every day (I might event engrave it over the door of my new office when I get it finished):
Baker's Workaround Speaking of getting the cheese, and such, did you happen to catch this headline over at Israel National News? "Baker Hired Israeli to Collect Iraqi Debt, Evade U.S. Sanctions?" Several readers have.
More Troops! --- My skepticism of the wisdom of investing a generation of our best and bravest out in the sand, when they could be transitioning America to a new lower energy diet economy, has ticked off more than a few readers. One, for example, offered that the British have done much worse in the Middle East than we have (I'd counter "So far!"):
Don't get me started on British behavior. That's a country which was so rotten to some of its people that they came across an ocean and set up a Constitutional Republic to do better than the royals, who, I might note, still keep their long fingers in the banking cookie jar, and not to mention that we (the USA) had to bail them out of two world wars, something they are prone to forget. So please, don't preach the Brits are smart and look what happened to them. The second mouse is supposed to have learnt something, remember? ;-)
Does "Bold" ="Bomb"? Speaking of mouse-like strategic thinking, we find Tony Blair pimping "Bold action against extremism in Iran". My take? Sure, Tony has read how the North Sea oil is plummeting and there are no forests of consequence to cut down in England anymore, so he needs Sunni-controlled oil. But Shiite controlled oil runs fine, too. It's so obvious, yet we're not supposed to "get it." Double duh. --- By the way, the Shiite militia is now considered the biggest threat in Iraq.
Baht to the Future Still bouncy markets in Thailand over the extreme appreication of the Baht which caused market panic earlier this week. Maybe the Thai'ed has turned?
Beautiful World Isn't it? Ms. USA does rehab and repents. Mothers Against Drunk Driving have reportedly severed tied with Miss Teen USA after drinking reports. --- "Here we go a wassailing, a wassailing, we'll go....." Eggnog? For breakfast? Ask me Monday.
I'm busy wondering if that creature who wasn't stirring (not even a mouse) was the first or second mouse?
Tuesday December 19,2006 Inflation's Still around New figures out from the government seem to be showing that inflation is far from dead as prices of finished goods at the producer level jumped dramatically:
For those who were cheer-leading a Fed rate cut, the 2% rise in total finished goods (led by a 6.1% increase in energy prices) should serve as a reality check. When (now hidden) M-3 is going up at about 10% a year (on a reconstructed basis), what in heaven's name do you expect prices to do?
Bigger War Ahead? CBS is reporting that the US is planning a major build up of forces in the Persian Gulf as some kind of a "warning to Iran" but the report, which comes at a time when CONgress is off doing holiday shopping comes amidst reports that the military is seeking more manpower. And appropriately so, given what they are tasked with.
As incoming Secretary of Defense Robert Gates plans to visit Iraq, and is quoted as saying the US "can't fail there" we have to wonder just where the definitions of success and failure are written down. Is success the functional ownership of oil? That'd be successful, for sure. Has someone off in some dark cubicle come up with the idea that "success" is putting Shiites against Sunnis and actually promoting the civil war the country is now in?
I read a speculation piece on the net the other day, sorry can't remember where, but the gist of it was that the Saudis, largely Sunni in makeup had told the West not to leave Iraq in shambles or we would be cut off at the oil pump, something America can't afford.
Nevertheless, there may be something to the speculation. There are recent reports (like today) that Iran has been backing the creation of what is effectively a Shiite state within a state in Iraq. Carrying this a bit further, an op-ed piece on Yahoo today by Raymond Learsy reiterated the report going around the net that Dick Cheney had been summoned to Saudi Arabia two weeks ago for a one short agenda meeting at which the Saudis directed the US not to pull out or the Saudis would enter on the side of the Sunnis in Iraq, and oh yeah, there goes oil to the US.
Naturally, both the Saudis and the Cheney staffers deny this, but Learsy goes on to point out that:
One could have almost seen it coming, and this kind of "end game" where the USA gets stuck playing referee between warring factions of Islam is about as bad an outcome as you can get. We are, as reports seem pretty credible, left vulnerable to oil blackmail, nuclear terrorism, and financial disaster.
And where, I might ask are the neocons in all this? We are, as a country, in a full-blown crap storm, victims of energy blackmail, and the new CONgress is unlikely to be able to do anything about it. (Anyone besides me for mandatory one-term limits?)
Thanks to an incredible lack of foresight that things could devolve into Americans fighting gang warfare on Middle East streets, our best and bravest have been out at the sharp end of American foreign policy stick, longer than WW II, dying to keep one batch of Muslims from killing another batch. Can you say WTF?
While it's true that this war has been a bonanza for a few defense contractors, not to mention a few billion dollars missing which had to land in someone's pocket, I'd offer that a smarter move (back when) would have been to listen to the Peak Oil camp and start actually doing something like a massive lifestyle overhaul in America that would decrease our dependence on foreign oil.
Until that's done, I expect we'll repeatedly find ourselves sucked into hell holes like Afghanistan (protecting heroin supplies) and Iraq, (pressured by the oil brokers). And even if we somehow come up with the brilliant strategy to secure "peace" and reduce force strength (missing at the moment), there's plenty more of this kind of boondoggle where this one came from. So if you see mushroom clouds appearing in late 2007, September 19th perhaps or maybe December '07, remember to thank the energy lobby for putting us on the path to Armageddon. We haven't paid the piper, and the tune has been called.
Middle East news agencies are now quoting the medical journal Lancet's figures: "According to the most recent findings of the Lancet medical journal, the number of "excess deaths" in Iraq since the U.S. invasion is more than 650,000. "Iraq is the fastest-growing refugee crisis in the world," according to Refugee International: nearly two million Iraqis have fled the country entirely, while at least another 500,000 are internally displaced. "
At some point, as the bloodshed continues, even my staunchest republicorp friends will be forced to admit that the US invasion, pulled off as a bait-and-switch off 9/11, will have killed more people than Saddam Hussein is charged with. The key difference being: Saddam is on trial.
Your Turn at Baht Last time I looked in on Thailand, there was some Muslim General fellow who had taken over as a "benevolent leader" on behalf of the royals, or something like that. Now I find Thailand making news because the currency is falling apart, and the central bank is putting in measures to curb speculation. Expecting a miracle? Not me; I sense a bad ending to come.
Ma Jones on Toll Roads Although the republicorps were run out of many offices in this fall's elections, we note their legacy of stealing taxpayer assets to hand the over to corporations, will be with us for a long time in the "conversion" of tax-payer paid for (or bonded) roads into corporate cash flows. I speak, of course, about the growing national toll road "privatization" movement. If you haven't, go check out the Mother Jones report "The Highwaymen. The sub-head to a companion story, "Study says taxpayers have lost out on "very large" revenue in Indiana deal" is hardly a surprise.
Daniel Schulman and James Ridgeway have done a fine job exposing the rollover of roads with thoughts like this one:
Also, be sure to click here for the state-by-state account "Who's buying you commute" by Leigh Ferrara. --- The level of American comprehension of basic economics is something approaching appalling. Here's today's economics lesson: Government operates as a non-profit. Corporations operate for profit. Thus, given identical spending levels, government will always cost less than a corporation because they have to include a mark-up for "profit."
Why such second-grade concepts can't be remembered by public officials when it comes to toll roads and "partnering for major sports facilities" (another fine way of handing corporations access to the public's money and bonding authority) escapes me. Maybe our education system is as big a failure as the notion of integrity in government.
Quaking in Sumatra Four dead in this one, and it was only a 5.5.
HIV Sentencing
Econ Q&A Email of the day:
In a major deflation, the price of gold will go down. But remember it's all relative. If what used to cost a dollar, drops to 50¢ (that's money, not a rap star in this case), then gold could fall from $600 to $300 and everything would be stable. What I personally expect is that gold's fall will be less than the general prices, and thus there will be a relative gain.
Assume $4.00 a gallon milk. Today, one ounce of gold will buy you 154 gallons.
Now halve the price of milk to $2 but only drop gold to say $400. In this new world, one ounce of gold will buy you 200 gallons of milk.
Thus, gold will have gone down (in price) but gone up (in purchasing power).
On your second question, when the stuff hits the fan, paper with seals and stamps on them will mean NOTHING. If you have a piece of paper saying I have an ounce of gold 4,500 miles away that I can't get to (for whatever reason), does it have purchasing power?
Likely not, or at least not much! No one in their right mind would be trading paper for things like milk. But, if I had some coins in hand, then I hold the asset. and I can cut it into quarters (which is where the term came from).
I don't know if you've figured this out, but I'm all about real assets, and rolling out of paper. Paper is fine as long as the world doesn't change and all infrastructure (phone lines, internet, mail service, etc) all keeps working. But turn off all the power (as people in the Pacific Northwest found out last week) and suddenly you can't get milk or gasoline because the credit card machines don't work.
Now place your bet: If you believe in "happily ever after as the only outcome - then have at those certificates. But given a complete breakdown of infrastructure (like an EMP attack), I'll take my one ounce of gold and my 9 mm over any size pile of paper you care to offer. Best strategy: split your bet? For you maybe...
Monday December 18, 2006 Balance of Trade Wreck Because the market seems to rally on bad news lately, here's one that should light fires on Wall Street: "The U.S. current-account deficit--the combined balances on trade in goods and services, income, and net unilateral current transfers--increased to $225.6 billion (preliminary) in the third quarter of 2006 from $217.1 billion (revised) in the second quarter. The increase was more than accounted for by increases in the deficits on goods and on income. The surplus on services increased, and net unilateral current transfers to foreigners decreased."
Quick: Can you say "trade wreck"?
Charting the Future This coming week promises to be a dandy for the financial markets, as we edge ever closer to the ultimate saturation level of the current debt-driven mania. Chief among the figures will be the report on inflation at the wholesale level and industrial production.
While more than a dozen readers sent me emails referring me to the Hal Turner Show's forecast of China dumping a trillion US-denominated dollar investments into Euros, gold, and silver, we haven't seen anything other than what looks like pretty ordinary trading in the markets so far today. Granted, gold price drop of more than $11 on Friday has us watching things closely, but my bet is on saturation economics, not some ultimatum delivered by China. Mind you, I could be wrong.
On the other hand, my friend Roger Reynolds notes in his email this week that "Silver has fallen to it's 50 day average, gold has fallen below both the 50 and 200 day averages. In other words, they have "corrected" an overbought condition. According to normal 200 day analysis, when the 200 day is rising, then any decline to the 200 day is a BUYING OPPORTUNITY. This is where gold/silver are NOW." You might want to sign up for his emails - no charge last I heard, no commercials, and he offers insights now and then that seem to get buried in the mainstream.
The bigger picture of where the economy is today comes from reading the Forbes/AFX report that notes the dollar is doing well today after the sharp gains of Friday. Those were driven by inflation news that was better than expected, but then again, as reflected in our checkbook and maybe yours, the statistics just go to prove for the umpteenth time that Mark Twain was right
As we march up to the starting line for 2007, I'm pleased as punch to report that our investment strategy this year (gold, silver, and rural agricultural real estate) handsomely beat the Dow, the Russell 3000, the NASDAQ, and just about all the other indices. Despite that, it does look like some kind of recession will arrive in 2007, and with it, other parts of the world are already pretending that what happens in the USA will not impact them too much. There's a European Commission report, for example, that pimps just such a notion.
The problem for economists is that they can't have things both ways. We either have a highly interconnected/interdependence global market, where a sneeze in China is felt around the world and the flu in the US spreads faster than a TV headline, or there's some regionalism left. Folks in Kenya still think in terms of "regional economy" as do folks in the San Francisco Bay Area.
Dan Denning's post at the Daily Reckoning makes a really fine point: You have to understand that in Denningese, private equity is synonymous with 'pirate equity' and both are the spawn of their progenitor "leveraged buyouts", but once you get that concept down, his headline today that "Pirate Equity Already Pillaging 2007 - Our Advice, Buy Gold" certainly makes sense.
It even makes sense after Friday's bankster beat-down of gold because the "yellow dog" has still outperformed the Dow for the year by a couple of percentage points, but if you wanted to know that kind of reality check, you'd subscribe to our modestly priced weekly newsletter.
$63 Oil and Up OPEC has a target price for oil of at least $63 a barrel, says the Irish Times.
Nearly Nuked A report today says a nuclear warhead nearly blew up recently in Texas.
Pacific Northwest Clean Up I talked with Cliff of www.halfpasthuman.com on Sunday. He's rebuilding his diesel generator which managed to go down at almost the worst possible time - in the Northwest's hurricane force windstorm. The death count is 6, but bound to go higher as Puget Power has reportedly told some news outlets that many folks will still be in the dark through Christmas. My son George had a close call in the storm, too. He was walking to work on Friday night past a construction site and a blank with a nail torn out fell from some scaffolding and ripped his shin open to the tune of 20-stiches at Swedish Hospital's ER. He was damn lucky that the blank and nail didn't hit him on the head. But, my family has always been lucky - and the luck gene apparently still runs in the next generation.
But getting back to Cliff's generator, it looks like a week or two before the current web bot run will get underway again. Once the power comes back up, there will be the issue of getting telephone lines up for the big pipe (way down the priority list for local telcos) and then there's the software matter to sort out: How will Cliff and Igor find a way to deal with the data gap? We've got a couple of competing theories: One is that it will have no impact on run accuracy, but my personal thought is that because the run will cover a larger time base, the accuracy should actually improve...so I'm looking forward to it, although not quite patiently. Half a million in the dark and cold - under freezing in the Northwest last night.
Ipswich Killer Caught? A 37-year old man is in custody in connection with the deaths of five prostitutes in Ipswich (England). We usually don't get into crime reporting (been there, done that) but a few cases do go high profile and seem worth mentioning. Judging by server speeds, there's hellacious public interest in this. Speaking of which... --- Where's the Media? There was a big march through New York on Saturday over the shooting death of a young man who was killed hours before his scheduled wedding. There were 50-shots fired into the car by undercover cops working a vice operation - and amazingly two survived the onslaught. None of the victims had any weapons, according to reports. While this outrageous story has virtually no mainstream US coverage, folks in China are reading about it.
Expensive Hit There's a report out of MosNews that the cost of the polonium used to kill that Russian spy (who last minute converted to Islam) was in the area of $10-million bucks. And a bullet costs how much? Someone with a DEEP pocket sent this message.
Mexico Backgrounder While events continue largely undercovered and buried by the mainstream, here's an interesting background on revolutionary politics in Mexico where things are still on a low boil in Oaxaca.
Bye Bye Dolphins We're not talking "Miami" here...this is more on the killing off of the world's oceans thanks to excessive exploitation by too many humans. A species of dolphins has gone extinct in China. No idea how long before fish and chip joints shut down, but enjoy 'em while you can. If you're under 30, you might want to have stories to tell your grandkids "Why, I remember back around the turn of the century when there were so many fish, we used to eat 'em!"
News from Elliott Wave International Instead of our customary chart, this week you get a free peak at one of our other charts from www.peoplenomics.com - this is our "Global Markets Equally Weighted" chart:
Write when you get rich,
George Ure, The People's Economist
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