Published Monday through Friday about 8 AM Central Time Except Holidays Depending on my mood...

 

This site is supported by subscription to Peoplenomics.  For additional content, please subscribe.

 

Critics and Distractions

Although I am loathe to do Saturday updates, specially since I am working on vastly more important things like this weekend's Peoplenomics update (The REAL Problem of 2012 which is a chapter in my new ebook "The Crash Handbook"), there are a number of reader complaints/observations worth sharing, although most are distractions.

 

1. "Your .PDF of the Coast to Coast show is completely blanks - can you fix it?" 

 

No.  That was created using current software.  The folks who have not been able to open the .PDF, as far as I've been able to figure, have older versions of Adobe Acrobat Reader installed.  A free update from www.adobe.com should get you current and reading.

 

2. "You didn't mention the failure of you Dec. 10-12 earthquake in your 'predictions report'. 

 

Correct:  I did, however,  cover that on the air with Ian Punnett as our "Worst Prediction of 2008" and made two points (from my notes):

• "We expected a December 10-15 ‘twin quake’ and that was simply a bad read on our part"

• And... "What we got was a lot of' financial earthquake’ and ‘after shocks’ language around the breaking Bernie Madoff story that happened at the same time as the isolation/shutdown of the Pacific Northwest - just a case of getting pieces right but not the whole"

 

3. Here's a dandy email: "You still are trying to take some kind of false credit for predicting some kind of incident on 07 October 2008. Your .PDF which lists 2008's "accomplishments" puts the Icelandic bank failures at 06/07 October 2008. NEWSFLASH -- they were precipitously failing a WEEK PRIOR the failures did NOT begin on 06/07 October 2008. Another NEWSFLASH -- They still are. Again, you had the trend but you faltered by listing a specific date and time."

 

WTF is this?  First, look at the wording of the prediction from Jan 2 2008:  See slide # 3, October 2008 prediction, fourth bullet point: "May be a global replay of what the 1932 bond crash in the Great Depression was."

 

Second, we refined this to a roughly Bell curve distribution around Oct. 7th.  That's a distribution centered on a date.  Now, look at Wikipedia's entries for September 2008 and there is no reference to "global financial crisis."  Now look at the October entry below it.  There are three references including the October 7th loan of $4-billion to Iceland by Russia to bail them out as they experienced a national financial failure.

 

I have informed the individual that it is not my role in Universe to engage in further debate on this, and despite that I have received yet another insulting email criticizing the accuracy of the prediction made 10-months in advance.  As evidence 'you weren't right' the reader quoted news item about a smaller  $600-million loan from the week before Oct 7th was attached.

 

Lemme see here: Jan 2 a year ago we point to Oct '08 and the large-scale crisis.  Mid summer we refine it to October 7 as the peak of a distribution.  And non-subscriber (without access to all the data) claims a minor article appears the week before and that somehow invalidates 10-years of work in a new area of science?  OK, sure...whatever

 

No we don't get everything and, as demonstrated in the Madoff case, this is only a fledgling science prone to errors.  Fine so far...  But then I get this:

"My version agrees with the facts; YOURS does NOT. It always amazes me that when one is caught as a liar that he considers the claims as "trivialities" and takes umbrage at being caught!

Too bad you lack the honesty and good moral character to admit when you are in error. A mistake has grown into a lie! You should be ashamed of yourself! Trouble is, your lack of good moral character probably immunizes you, like Bill Clinton, from personal shame."

Lemme see: No contribution to development of the technology, argumentative wrong-headed self-righteous criticism, personal insults...  Yep: Congratulations!  Junk mail filtering applied.

---

This brings up a very important point about personal energy:

 

Although this site is largely focused on the uncertain/cloudy future, it is nevertheless positive in that it's all about coping and preparedness for whatever may come.

 

I don't mind questions and trying to help when someone disagrees but I draw the line at self-righteous personal attacks.

 

4.  Here's an example of a thoughtful email:

"Hi george, Love your site except the last couple of days. I really don't like your tone towards Israel. The only reason they are bombing Hamas is they are shooting misses into Israel. I was a volunteer at an Israeli army base for 3 months in 05. Everyday before work they would give us a quick news and weather update. ANd everyday several rockets fell in Israel In 05 after Israel left Gaza and even removed Israeli's and left business Gazans were lobbing missiles. How many years would it take you to respond if it was somewhere in Texas? How many thousands of rockets would it take for you to respond. The Israelis want peace. They have given up acres of land, which when you live in a tiny country, means just a little more security, to prove it. Arabs that live in Israel have a better life and more heath benefits and rights than arabs anywhere else, OH except those that are on the top of the heap. The IDF calls on the phone and warns civilians where they are going to strike, but that is not why suicide bombers carry cell phones. We live in a time when evil is called good and good evil.5 times a day I could hear the Muslim prayers from the base I worked at in Israel. How many Jewish prayers do you think you can hear a day in Saudi Arabia? Which side are you on George? "

The answer is complicated, so bear with me.  Simply:  I am terribly disappointed in both sides and consider myself on neither. That deserves some discussion as I am not an Egyptian (which administered Gaza prior to the 1967 war).  I am not Israeli (which has administered it since the 1967 Six-Days War). And I am not Palestinian.

 

In terms of the timeline here, we are now, as the AP puts it, in "Week Two of Israeli blitz on Gaza with no end in sight."

 

When it comes to geopolitics, I a consider myself akin to the American Whig Party...

"...the Whigs supported the supremacy of Congress over the Executive Branch and favored a program of modernization and economic protectionism. This name was chosen to echo the American Whigs of 1776, who fought for independence, and because "Whig" was then a widely recognized label of choice for people who saw themselves as opposing autocratic rule."

Got plenty of that autocratic rule stuff going around, in case you've lost count of the Executive Orders and Signing Statements.  And Executive-run agencies which claim powers to violate our Constitution more or less on a whim.

---

As I see it, we live in an age where complexification rules and any simplicism of complex events into "You're either with us, or against us" as the Decider put it, denies the fundamental complexity of the world.

 

At a macro-level, the Middle East Wars (which are part and parcel of what I refer to as the "Manufacturer's Resource Wars") are a combination of resource grabs (oil and drugs) and employment programs.  Yup, in a sense Jihad may be viewed an employment program, but in a sense, so is Iraq. Even the Crusades and be looked at as an economic initiative.

---

I don't like war - anywhere.  You know what's the most war-promoting country in the world?  The Netherlands.  How'd I figured?

 

If you look at top weapons exporters here and population over here, you can see that between 2000 and 2007, the Netherlands increased arms exports by 5.23 times.  $82/per capita of weapons exports

 

Now, to their credit, Israel's exports are down 26%; they are # 5 on a per capita basis at $37.47.  The US exports from 2000 to 2007 are about even and we do $24.97 per year of arms exports per capita.

 

Anyway, my point is I don't choose to be on any side of war. It's a business and one I don't choose to support.  Don't misconstrue: I will defend America.

---

Globally, arms sales are up 61% among top exporters since 2002.  This is global economic progress?  I just get bummed out about it...I'll try to be a little more Hoo rah! about it.

 

Peoplenomics.com 

The Crash Handbook Part 1: "Ready Or Not..."

The little ebook I wrote called "How to Live on $10,000 a year...or less!" has been incredibly successful.  No, it hasn't been stocked by Amazon, nor has it been picked up by a major publishing house.  But it's been successful by the number of lives it has changed & improved; things publishers and retailers may give lip service to, but when comes right down to brass tacks in publishing, everyone's got to make a buck, and that's cool.  I'm undeterred from my personal mission, however, which is to open people's heads a bit, give them new ways of looking at old problems, and above all remind people that the only wealth that survives death is the bank vault of riches between your ears.  If that vault is empty, then Life hasn't been properly lived.  So over the course of the coming month or two, we'll step back far enough from the theoretical  trading and investment side of Peoplenomics to address the nitty-gritty of "Whatcha gonna do when?"   Because that "When" is getting really damned close now.

 

       More For Subscribers        Subscription Information

 

 

What is better than a Christmas  New Years Card?

Why, sending an email to everyone in your 'contact' file and tell them about  www.urbansurvival.com of course!

 

"Live on $10,000" Updated

What?  You haven't ordered the ebook "How to Live on $10,000 a year -- or less"?  Suit yourself.  We're all going to live it shortly, anyway.  I just thought you might like a heads up by reading about how to do it before you get pink-slipped.  But, suit yourself OR visit www.liveontenthousand.com or, click one of the following button:

 

 

 

Yep - still possible.  I also took a bit of additional material that was pertinent from recent issues of Peoplenomics and included them.  The whole thing runs about 65 pages, but it gives you a vision of how to not only live on the aforementioned dollar amount, but also how to migrate up the economic foodchain if you make a little more than that and do some active savings...  Click here for the page with more details on it.

----

 Last week's report is here.    For back issues of this site, click here.  (Goes back to 1997!)

 

---

January 2, 2009

Coast To Coast Annual "Predictions Show"

Click here to download the Coast To Coast AM radio show notes in which Cliff's 2009 predictive linguistics outlook is summarized along with a few of my personal 'things to be watching for'.  Ian Punnett did a really good job of it, too...lots of guests with lots of predictions.  Quite interesting.

 

Quick!  Hide Your Wallet

Yeah, I know - six months ago gasoline prices were north of $5 some places - and since the election was coming, along with the economic collapse, gas prices have been cratering.  Down to around $1.66 a gallon nationally, last time I checked.

 

But if you think this is an opportunity to 'make back' some of the screwing at the pumps earlier this year, think again: "Panel wants fuel taxes hiked to fund highways."

 

This is exactly the kind of Depression Inducing Half-think crap (can't think of a more polite word, sorry) we've come to expect from Washington. 

 

First, to raise the tax on diesel will take even more truckers off the road and will drive up prices of goods. 

 

Second, it will push the cost of commuting to work back up.  Third, why can't government cut back on wasteful spending in its own ranks? They behave like it's OK for working people to have their hours cur, but what about government?  Where's government's 10% cuts and 4-day weeks?  Those of us writing the checks want to know!

 

And fourth (this is my pet peeve) we see a tax hike so the slimeballs in office can do what?  Sell off more publicly funded highway projects to private greed-driven corporations which in turn will put in toll booths?  Notice how no one is arguing that roads should only be operated by not-for-profit organizations?  Nope - goes to outfits with ties to the elite, 'natch.  Even royalty/bloodline freaks of southern Europe I hear....

 

The predictive linguistics are very clear:  2009 is a year of transformation and a 'fuzzy/global' soft revolution.  But given enough stupidity on the part of policy makers, that 'soft/fuzzy' could turn really hard and really ugly.  Here's my new bumper sticker:  "Watch the botch."

 

The Global Depression Digs in

"Singapore economy shrinks at 12.5% in 4th quarter".  West coast port trade is adown about that much.  Anyone connecting the dots besides us?

---

One reader apparently is...sending in this email:

"The story below has me wondering what will China do with all it's unemployed people. Seems like wars are often used in situations like this. What do you think?

"Rising desperation as China's exports drop"

That's one of the points I made to Ian Punnett on CoastToCoast last night.  We were talking about the Russian (Igor Panarin's) prediction that the US would likely break apart or experience some kind of revolutionary change due to the economic implosion this year..

My point to Ian was that Panarin's thinking that other countries will have enough 'energy' to spend exerting 'influence' over other countries - like the US West - ignores the notion that globalism fundamentally means there is no safe place for capital to hide during economic chaos

A Chinese-dominated West?  A European dominated Atlantic Northeast?  Where are those regional trade powers going to be getting energy and goods to keep their own houses in order?  No, I think this soft revolutionary change coming will be much more global and all-encompassing.

Just as globalism on 'the way up' made all countries 'winners', the collapse of the consumer economy (and its Services Sector bubble), will likely beggar the planet.

What I characterized as the Third-Worldization of America will really be a global affair, so when you read about things like Russia and Ukraine fighting over natural gas now, it's just foreplay to the main events to come soon enough. 

I look for resource warring and sparring to spread such that over 2009 your personal experience of the Year of Transformation will vary by where you live.  The Midwest may have grains, but no veggies.  California may have veggies but no power.  The Pacific Northwest may have power but no grains or veggies - that kind of circularity applied globally.  And the shortage of clues in Washington will intensify the mess, of course.

Oh well, stuff happens, right?

Denial Department

"Experts keeping mum of 2009 market outlook" says this morning's NY Post.  Well sure:  Like I was raised, "If you can't say something nice, don't say anything at all..."

 

What's Enough Bloodshed?

OK, Israel has killed more than 400 in Gaza.  Are they like trying to hit some kind of number, or is there a metric of "How many dead equals a 'win'"?  Number of wounded is over 2,000, too.  So folks get to sit back and guess as to when enough will be enough.  But, obviously, we're not close yet.  Maybe it's 1,000 dead?  I dunno...

 

At what point does the world label as terrorists those who bomb places of worship?  It's a question worth asking because as the AP reports "Israel targets Gaza mosques used by Hamas."  Which brings up the discussion about whether it's cricket under the Geneva convention to target places of worship and civilian populations...The IDF claims missiles were stored there.

 

Might be ending soon, though:  gold's down.

 

MSM is reporting "Gaza's rocks put Israel's nuclear plant in battle zone." No, Dimona hasn't moved, it's still 42.1 miles from Gaza and earlier the same media outlet reported the Iranian-made Fajr-3 rockets had a range of "more than 30 miles" ... not more than 40.  Whips up emotions, though doesn't it?  Mention of 'nuclear plant' and 'missiles'?  Where's my KI pills...

--

Israeli PM Ehud "Olmert vows 'iron fist' against Hamas."  So is it Truce or Consequences time?

 

Deadly Fire

61-dead in a Thai nightclub fire...police looking into it.  Given the recent political turmoil in the country, I find myself wondering about this one..

 

Murder Rates Drop

An ABC report has it that "Some big cities see homicide rates drop in 2008."  While it seems like good news, I wouldn't count on it staying low for long.  As the layoffs come along this year and the rising unemployment rates, I expect lawlessness, and particularly street robberies to spike.  It'll be interesting to see how that portion of the stats will play out...

 

The Future's a Gamble...

There's a thoughtful piece in the Wall Street Journal this week headlined "Will Gambling continue to Grow?  All bets are off..."

 

Best I can figure, gambling is on the skids - and it may never recover. Not only does the "Slump mean identity crisis for Las Vegas", as the Washington post reports, but a story earlier this week that Housing Prices fell at their fastest pace in October (the most recent figures) included this remark: "Prices in Las Vegas and Phoenix, where developers built subdivisions stretching into the desert, fell by nearly a third in October from 2008. "

 

As the predictive linguistics work out of HalfPastHuman notes, America is about to undergo a major transformation.  I expect a large part of that will be to return to some thrifty Yankee ways.  Gambling, and it's mis-named 'investment' analogs have likely run their course.

 

There's simply not money to waste in most households, along with too much employment uncertainty.

 

Folks that haven't saved for 'rainy days' are feeling the first drops. So are the gambling Mecca's.

 

--- snip and save section ---

Coping: The Ice Worm Cocktail Story

As a newcomer to a remote Air Force site up in the 49th state back in my youth, I was treated to a fine blend of humor and hospitality arriving at Murphy Dome AC&W site, some 30-miles outside of Fairbanks.  The site's not there any longer, but you can still see pictures of it here. I ran the 'microwave shack' for a defense contractor, and it's located just below and to the left of the high power acquisition radar dome in the upper left of the picture.

 

My first day on site I wandered into the officer's club (at age 19 I was a GS-14 equivalent) and announced myself as "George the microwave tech rept."  Properly introduced to Colonels King & Hillis as "George-wave", I got around to learning how to put a checkmark next to my name on the honor-system bar tab.  Scotch was 2-bits a shot - and you just put a checkmark down each time you poured one, and that was that.  The count seldom came up short.

 

After a couple of checkmarks, I forget which Major it was came over and asked if  "Are you a real Alaskan yet?"

 

Puzzled, I had to confess that I had no idea what he was talking about.

 

"Have you had an ice worm cocktail yet?"

 

Well, no, since I'd been in Alaska for all of about 3-weeks at that point, and all that was spent in the basement of the StratCom building at Fort Rich during Operation Snowtime that year, and after that barely managing to learn what an Alaskan calls a Black-Label Sandwich is (a shot of Johnny Walker Black and a bottle of Carling Black Label beer chaser), I admitted this was a new one on me.

 

The Major disappeared into the mess for a few minutes and returned with a glass of brown somethingorother which had what looked like a pale bluish-purple purple worm down at the bottom of it.

 

After a couple of minutes of having the anatomy and behavior of 'ice worms" explained to me, along with a detailed description of how they could 'eat a mans guts out if not properly killed' I was offered the glass with the 'ice worm in it' and all eyes focused on me around the room while I decided on the risks of drinking the somethingorother  with the worm in it.

 

Having been raised proper-like, Pappy had allowed me to sample Mezcal which comes with a worm in it, and so I figured this worm couldn't be much worse than that.  I hoisted the 'ice worm' and then spent another half hour hearing stories of folks who couldn't be forced even at gunpoint to down the concoction.  Turns out some drink and then 'lose the worm' within minutes, too.

---

This weekend being the end of the Holiday season, and since Elaine may not read my column today (she was up part of the night because I was on CoastToCoast last night) I may have to bless her with an East Texas variation on the ice worm story.  Having folks over and wanna have some fun?  You're welcome to play along...

 

I'm thinking, given our farm critters, that a 'goat worm cocktail' might be kind of interesting.

 

Not saying you should engage in this kind of playful mixology, but if you happen to have a bottle of gravy browning, and maybe some grape juice for good measure, an Xacto knife any old piece of leftover spaghetti noodle can be turned into a fine imitation of a worm. 

 

Feeling really creative? Wide spaghetti (of the sort used for Stroganoff) can be crafted into other buggy shapes, too.  Cottage cheese curds dipped and briefly dried can be turns into other (how do I say this at breakfast?) challenging garnishes.

 

Might want to wear eye protection.  There's always a chance the goat worms or ice worms will be returned - via airmail.

 

Y2K Redux

Microsoft says a software glitch that occurred on some (30 gb) versions of its Zune product should be self curing as the date rolls past January 1st.

---

Send snip and save items to george@ure.net

--- end snip and save section ---

 

---

Wednesday December 31, 2008

Last Day Trading Day Thoughts

What's about to be revealed, at the close of trading today, is the real nature of what a multi-billion dollar industry insists is "investing" in paper assets.  It's generally not, of course, really investing at all.  The more precise word is gambling.

 

One definition of investing does like this:

"An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. "

The definition of gambling is quite similar is many regards:

"...referring to wagering money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods."

The difference is so slight that it demands honest discussion.  Gambling is differentiated by two things:  hopes of perhaps a higher return than an investment, and over a shorter period of time.

---

I looked at a couple of the indices last night after the close and got to wondering if it's really honest anymore to call allocating money into paper assets - like the Dow Industrials (directly through shares, or through a third-party for the weaker willed - those things called mutual funds) - 'investing'. 

 

When December 31 rolled around last year, the closing Dow was around 13,265.    The Dow is down this year 34.65% going into today's session. 

 

You may have noticed that I often call the paper assets trading "today's action".  Perhaps you're not awake enough to understand the subtlety of my word choice: 'action' but it's a common phrase in Las Vegas and other gambling Mecca's:

"This is a general gambling term which refers to the total amount of money bet in a specific period of time. Ten bets of 15 dollars each is $150 of action."

If percentage of return and shortness of time define 'gambling' how does an honest and introspective individual look at the NYSE this year:  Was it 'gambling" or "investing"?  I'd argue for the former.

 

If a nearly 35% drop in average share price on the Dow isn't gambling, consider these numbers: 

 

The S&P 500 closed last year about 1468 compared with yesterday's 890.64.  A decline of 39.3%.

 

The NASDAQ Composite closed last year at 2652.  It closed yesterday at roughly 1551.  That's a 41.5% decline.

 

You might want to ask yourself "What's the threshold?  When does investing become gambling?"

 

My view is that ship has sailed and that anyone who doesn't understand that paper is a gamble needs to have their head examined.

---

The actual returns are much worse than these, of course, because we also have to look at how the House has rigged the game.  Monetary Inflation is alive and well.  A friend mentioned to me that "Social Security benefits are going up about 4.8% for 2009 payments...isn't that great?"

 

No, not really, because it means (loosely) that the purchasing power of the nation's money has fallen somewhere between 4% and 5% overs the past year.  While the last month has been OK at the store, on average, prices for 2008 were up as reflected in the Consumer Price Index.

---

I frequently look back at the stock market's real all-time-high - which came in the Spring of 2000.

 

On April 10, 2000, the Dow closed at 11,287.

 

Flipping over to the Minneapolis Fed Inflation calculator, top right side at this link, and putting in 2000's Dow figure, we see that for the Dow to have stayed even on a purchasing power parity basis it would have to soar to 14,131.60.  OK, add in something (4.3-4.8% for 2008 inflation if you want)...but let's not get depressing in our quest for knowledge here...

 

Now, to be sure, the Dow closed at 14,087 on October 1st of 2007,  so on an inflation-adjusted chart, the Dow has almost completed what technical analysts could point to as a 'classic double top formation'.  Care to guess what happens next?

 

Of course, that doesn't bode well for people who insist on throwing their money into paper assets because while the first week or 10-days of the New Year might seem like just a test of the recent lows, by the middle to end of February, we ought to have taken them out (decisively) before we get  the arrival of inflation from there through the late days of spring, if my read of things is right.  (No, not investment advice, just how I may place a couple of commodity bets...)

---

Gold, meantime, which closed out last year around $833.75 seems destined today to fulfill its traditional role as a 'holder of value' and seems destined to end the year up[ a modest 4.3% which is guess what?  About the most recent 12-months worth of inflation.  Gee, look surprised.  Gold up for the year...while paper crumbled.  Who told you?

---

The problem of building personal net worth is ever so complicated against this kind of background.  For an 'average' investor, who would have made market-tracking returns - not only was there the roughly 40% decline in the market but there were those fund management fees on top of things. 

 

Which is why I told you I was parking some dough in Savings Bonds back this summer, because I just knew down in the gut that when the government changed the limit on how much an individual can buy in savings bonds, dropping it from a maximum of $30,000 a year to just $5,000 a year per taxpayer, that the reason government was doing that was probably because it would be a 'best bet' - and can't have too many people playing 'safe' and winning now, can we? 

---

Honestly, I don't trust government when it comes to money for the simple fact that government turned over control of the money supply to the bankers cabal at the (not really) Federal Reserve in the wee hours before Christmas in 1913.

 

The banksters have watered down the money's purchasing power so far that if you had saved $100 in 1913, in order to buy the same goods and services at the beginning of 2008, you would have shelled out $2,177.78.

 

Worse:  Since the price of gold (a placeholder for purchasing power over thousands of years), we could add another roughly 4% to that figure to account for 2008's inflation of the money-supply. That won't show in the Fed numbers until new calculations are put up, usually around February or so.

 

$2,264.89....or, to look at it another way, your money has only 4.435% of its purchasing power compared with when the bankers started their slow-motion coup d’état.  That a buck is worth less than a nickel isn't supposed to register.

 

So don't feel bad if your 401(k) got its ass kicked this year.  You're playing in a rigged casino and paper is gambling.  It's just they use really fancy markers.

---

Now, to be sure, there may be some fat paper profits ahead in 2009.  I'm planning on bagging a bunch of dough in trading because I think I've got a reasonable outlook put together here.  But I'm only looking at trades that can return 4-10 times my risked capital and if you infer that limits me to options, you're darned right.

 

One reason I can even contemplate such a thing is that the volatility index, the VIX, has come down a fair bit over the holidays.  I reckon when it gets down into the 30-35 range, then it might be time to plunk down a few bucks.    Even more appealing are commodity options and if I can pick a sweet spot where there's low option premiums, a last-gasp run up in the US dollar, and dire predictions about the economy such that oil takes out $30 on the downside, then a bounce that could follow oughta just pour out profits.  Can you imagine the leverage of commodity options, bought super low, when the market turns as the coming make-work programs spur demand, the US dollar declines overseas, and the current glut at Cushing dries up a bit?  Makes me positively giddy.

 

But not yet.  Timing is everything - and this is pure gambling.

 

If there's one lesson I've learned in 2008 it's that I need to do a better job of using stops.  I can see a number of trades where I could have (and should have) locked in profits, but I let things ride far too long.  Not the first guy to do that, eh?  As much as I hate 'mechanical trading' it helps to remove testosterone from the equation.  Perhaps saltpeter in the milk before trading?

---

As usual, we had a pretty good 2008, but let me remind you why.

• Seeing that there were 'hard times ahead' for the country & economy since 2002, we bought real estate which appreciated - not the other way around.  That continues to pay off.

• We have shunned any purchases that we can't pay cash for.  If the money's not in checking, we don't spend it.  There's no credit card debt here.  Rates over 30%?  Many people would stop using their cards they just took a few moments to realize that their are paying twice as much for something if they put it on plastic and pay those horrible interest charges.

• We have continued to upgrade our property.  More fencing, better land management, home improvements (like a new central a/c system) and so forth.  Wherever possible, we do the work ourselves.  Just as an example, Elaine's rework of the kitchen counters cost us less than $100.  The bid to have 'professionals' come in and do the work?  North of $1,500.  And that's typical.

• We made a major (nearly $20k) investment in solar energy, again, steered by the concepts of self-sufficiency and independence and reducing future cash flow demands.

 

The ideal would be to reduce monthly cash obligations to nearly zero.  If you grow some of your own food, n o trips to the store.  If you grow your own power (and you have a grid-tied inverter) power bills shrink.  If you improve your own home, you get some relaxation and skills build not to mention increased value.

 

And I think that's what most people forget when they see all those fancy ads for investment houses on television.  Those outfits are trying to lure you with the same 'grabbers' as the casino industry, but without the floor show and great buffets.

 

What they are not telling you is that investing (of the non-gambling sort) is all about one thing - and one thing only:  building your personal net worth.

 

It doesn't get you one step close to financial independence to make 20% in a paper market if you pay 3% back in management fees, another few percent in taxes, and then bump up your lifestyle/spending habits such that at the end of the day you have nothing to show for it.

---

On this, the last trading day of the year, I reread the predictive linguistics outlook, look at Landry's outlook and ask myself one simple question:  "What do I really need that's going to probably be a lot more expensive in 2009 than it was in 2008?"

 

Time to go fire up the rototiller, and turn over the soil again. 

 

When a 'basics of life' word like rototiller isn't  even in my Microsoft FP/Office 2007 dictionary (it offered 'rot tiller' and 'retailer' as alternative choices), I figure society's preoccupation with high tech has gone way too far; and a focus on the basics of independence and self-sufficiency seems the soundest bet to be made in this here rigged casino.

 

Red Christmas, Redder New Year

More summary stories are coming out about the terrible Christmas shopping season.  One  report figures 73,000 retail locations will be shuttered in '09.

 

Silver Crimes in Progress?

You need to click over to Ted Butler's commentary this morning on manipulation of the silver market.  (click Ted Butler commentary on the left menu once there).  A quote from the article:

"There continues to be an extraordinary "net short concentrated position" in the silver futures market. The COT report indicate that 2 large US Banks held short positions that total 25% of the annual silver supply. This pattern has been ongoing to a severe degree for the entire 2008 year and even years prior. "

Gee! Imagine that!  Trying to suppress PM (precious metals) prices...who'da thought?  Don't want people getting out of crooked currencies, nossir, can't have that, huh?

---

This doesn't even touch on the other precious metals scam: trading of paper mini-contracts but not making them 'deliverable' physical unless three mini's are presented at the same time...which takes as much dough as a full contract.  See how they 'make paper' and smash the underlying metal demand?  LOL... don't get me started on how the PowersThatBe are trying to scare people away from the metals markets, because we don't have all day here...

 

Gaza Fighting

Worth a read: The Jerusalem Post's story "IDF launches YouTube channel."

 

Meantime a reader says he's expecting a flashpoint between Israel and Iran over humanitarian aid:

"Dear George, I couldn't help but notice that Iran sent a ship last Saturday full of humanitarian aide to the Palestinians, complete with 10 doctors. It is due to arrive 12 days after it left. After what the Israeli military did to the last humanitarian aid ship yesterday, it should be an interesting development when the Iranian ship arrives. If Israel attacks it that may be the catalyst you were worried about. To tell you the truth I couldn't care less if Israel got whipped again. I am no Hamas lover, but it seems like Israel wants to steal other peoples land, and then claim moral superiority when they wont give ground, quite literally, in negotiations. Lebanon, Syria, Gaza, and the W.Bank. Geez...I thought we had problems playing nicely with others! If we one day find that Canada, Mexico, Cuba, etc. are lobbing home made missiles at the U.S. on a daily basis, it probably has something to do with what we did, not just ideology."

Ramming seems to be the likely outcome, after the ramming by the Israeli Navy of a relief boat earlier this week.

 

A point/counter-point to ponder is the issue of disproportionate use of force, on the one hand, and the death toll which is quickly approaching 400 Palestinians.

 

McSuit

"Lobbyist linked by Times to McCain sues paper."  $27-million at stake.

 

Replacement Senators

Carolyn Kennedy's latest tour getting bad reviews as she goes after Hillary's seat.

 

Former state AG Roland Burris has been named to fill Obama's senate spot. The Blagojevich merry-go-round continues.  If you listen closely, you can hear the calliope of this circus, too.

 

--- snip and save section ---

Coping:  Back to Long Underwear

A curious email from a reader:

"Subject: Rich's Rule of Powerful Frugality

Hey, I just had a realization: some folks are cold sometimes, and some hot sometimes. Some just can't seem to live happily in an ever-changing environ without changing their clothes, putting blankets on and off, jumping in the pool, changing this and that, etc etc. You know the type.

My amazing new realization: this happens because they don't insulate themselves well enough BY DEFAULT.

By extension, I will say they play the game of the nation -- or are drawn to view the game and buy into the game sponsors' products. They don't do the hard prepwork that makes them INSULATED.

I am going to develop my Rich's Rule of Powerful Frugality right now.

Done.

It flies in the face of the US consumerism. Ready? I'm not. First an explanation:

Point at hand, and root of this realization: I am wearing my new thermals. They are THICK, poly, thick, and, ummm..... thick, and you know what else? They didn't roast me in Wal-Mart, or the library. Nor in the house. And outside in the wind they kept me warm while I was changing my oil in the last hour or so. I was wearing these things everywhere today. In fact, I have been wearing poly things nearly every day since the average temps outside hit 50 or so.

Why is it that I am so tolerant of not only cold, but heated areas as well -- all while I am wearing this sealgear which on other bodies would cause irritation and discomfort if worn inside a warm house?????

Answer: It's because I am used to the world inside them sealgears.

Yeah, I know I complained about them being TOO warm not long ago. I'm now used to them.

Dig this. My body is 98 degrees or so. In my thermals, it is 98 degrees or so. Thermals don't make me hot anymore. Outside in the ripping winds, bod is 98 degrees. And moving about, they are part of my system. As my frugal system, they breathe away any slight moisture.

Inside, outside, leave me alone. (I'm 98). (Sorry, Mr. Daltrey!)

Rich's Rule of Powerful Frugality accepts that if you have varying needs you aren't unusual. But if you bow *AND* cater to them tiresome needs, you will never be comfortable everywhere without too much support BAGGAGE (for these trying times). You will always need to have this or that -- blankets, less blankets, ice water, better whiskey, heated seats, big TV's, mistresses, crack, automatic weapons, etc.... You see my point? BAGGAGE ON YOUR BACK and in your wallet. You like baggage? Fine. Not me. I have a Rich life and am going to continue to trash my baggage at least until this economy turns around (key, for those coming to this party late).

Keep it simple. Work it down. They say it only takes six weeks to change your taste buds. Ask who "they" is and I'll tell you I don't know, but as someone who has forced change in habits over the past years I think "they" is me, and I have changed, and that's good enough for me IMNSHO.

The point I am trying to share is FINALLY here:

Bundle up, folks. It's gonna be a cold one and I'm not talking about the season. Get used to it now. You'll be better off later -- while your competition is struggling. "What competition" you ask? I hope you are lucky and don't have any......

Peace and love **and insulated durability** to each and every one of ya (cuz I love you all, I hope you know)

Hmmm...not sure what to make of this.  I don't own any long-johns and even after living on a sailboat in the Pacific Northwest for 10+ years I still seldom (if ever) even wear a T-shirt except in summertime.  Still, an interesting thought: How cool could the house get and us still be comfortable with a set of 'woolies' on?

 

Inflation Corrected Gold

Reader asks:

George, Would you consider (continually) posting on your web site in current year dollars the price that spot gold would have to reach (i.e. ~$2,400) to exceed the old 1981 high. People need to have that number in their face to be smacked out of the complacency that even $1,000 an ounce is some kind of too high price. You might also put side by side with it the DOW inflation adjusted price, again, to smack JoesephSixPackski upside the head that no matter what the DOW looks like, it is in fact another phony number. Thanks

Oh sure...$800 in 1980 applied into the Fed Calculator (right menu) gives $2,093.20, which with 4.3% for the year of 2008 would put gold around $2,183.20.

---

Send snip and save items to george@ure.net

--- end snip and save section ---

 

---

Tuesday December 20, 2008

Markets Marking Time

Since the Dow hasn't bothered to come through with my projected low - which might be as low as 4,000 - I got to wondering if I was completely whacked/out of my mind.  So I picked up the phone after the market's little decline on Monday and dialed up Robin Landry's office.

 

"So what do you make of this here pig...?"

"The first thing George is that the bottom is NOT in contrary to what you're hearing on television."

"I didn't think so, either.  So how's it look to you?"

"The indicators that I use are still saying that we have a fifth wave down.  What's changed since our last conversation is that they're now telling me that we have reached the minimum of the fourth wave upside bounce and that we could turn down into the fifth wave at any time.

 

I suspect that with the holidays and the low volume and everything, that we will gyrate up and downs in a sideways move for a little while longer and create a triangle.  That in turn oughta break to the downside at least the 7,400 area. 

 

But, as you and I have discussed before, the fifth wave over the last few years has tended to be the longest and thus, the possibility of the 5,800 level is still feasible.

"We're synched up there - how about a timeframe?"

"I believe that if we break down into this fifth wave that it's going to be only an event lasting 2-6 weeks at most.

 

What has been interesting to me is the happenings over the last three days in the Middle East: That has caused the oil to rally a little and gold to rally somewhat and if the fighting spreads, then the alternative view I have for gold and oil in the short term would probably change to bullish.  But, that would fit in with the fifth wave decline.

 

However, if the market goes down in the fifth wave, and the oil prices are still not able to rally, then the negative forces of deflation are even greater than I thought.  The supply in Cushing Oklahoma, which is the storage for many of the oil futures, is at (or real near) maximum capacity and I hear that there are tankers out at sea floating around full, taking their time.  So the 'normal' market reactions may not happen."

"Why wouldn't the price of oil keep dropping - just the Middle East jitters in the medium to longer term?"

"Yes.  As long as we have the excess capacity and inventory it means that in the near future the prices of oil will, if they rise at all, will rise very slowly.

 

I am concerned that the fighting, according to my sources in the Middle East, could get out of hand and escalate.  If it does, then the Iranian situation could really blow up. 

 

The reason I bring this up is because for the first time in a year or so, we now have the Middle East background causing uncertainty on top of the global economic uncertainty. 

 

Remember: It's never the events that you believe are going to happen that cause the market to respond in a certain way; it's always something out of left field.

"True enough...I'm a life-long left-field watcher myself...What's your top couple of candidates for 'left field events' that could put a stake through whatever's left of folks 401(k) plans?"

"If Iran does get involved and it begins to spread, and they are further along in the developing of a nuclear weapon, we will all be in deep, deep trouble. 

 

Israel, as everyone who reads news of the region knows, has been practicing their 'going it alone' strategy.  If that happens, then the Dow will go down. The question is how far.  Of course we'd likely see a big run to Treasuries, and gold may go down initiative.  I'm watching the trendline on gold from it's recent high.  We're close to hitting it now.  I believe it will take a very drastic event in the Middle East to cause it to break through to the upside from there, though.

 

If gold breaks out, then I will go long gold with a very close stop.  The oil trade, on the other hand, with this large a supply picture, is going to be much more difficult unless we start seeing the market acting in anticipation of a cutoff of supply. 

 

All in all, it points to a very difficult next couple of months as I see it.

And what happens after we hit either the 7,400 or maybe down into the 5,800 range, or my nightmare 4,000 drop?"

"I believe we are going to have a rally that will be a real barn burner.  It will be volatile but very rewarding for those who have the stomach for the volatility.  It will last at least into March of April and possibly into July and August, but that will depend on the domestic situation.

 

And that in turn may be driven by what's happening in the Middle East

 

As a side note,  it's interesting to me that when the market makes dramatic declines the email requests I get for advice and assistance rise dramatically.  However, once the market starts going sideways or  seems like it's stabilizing  the calls and emails slow down.   It's like people are hoping it's over. What they fail to grasp I believe, is the magnitude of the current situation. 

 

Responding when things get bad is exactly the wrong thing to do.  Getting advice and assistance in rebounds and the quiet periods to prepare and avoid the next decline is the wiser choice.  But, that's human nature, as you know..."

Ah yes...those pesky humans again.  Darned if the world wouldn't be a much better place if we had a lot fewer humans, though I'm not inclined to be the first to go any more than the next guy...

---

My friend Roger Reynolds has a further advisory out which is of interest:

"IN MY OPINION, A FEW DAYS AGO THE LONG TREASURY BOND GAVE A REVERSE WAVE SELL. IT HAPPENED LAST WEEK. I BOUGHT TBT TODAY. YOU CAN ALSO SHORT TLT "if" YOU ARE A SHORT SELLER. WHY WOULD LONG BOND INTEREST RATES GO UP AND T BONDS DOWN??? MAYBE LOTS OF REASONS, BUT THE CHART SAYS IT'S COMING. Investors doubt the accuracy of reverse wave signals unless they study them. But, remember that the DOW gave a reverse wave sell two days after the all time high in Oct 2007. "

In yesterday's note, Roger said he was watching 6-stocks that he thought were pretty good.  Here's his email address to send your queries to: randkreynolds@usa.net 

 

Supplier Shock

Readers of our subscription newsletter Peoplenomics will remember that a long while back I wrote a 'heads-up' paper called "Death by J.I.T." which dealt with inflexibility of the supply chain when things get dicey for the economy in general.

 

Well, lookie here, now:  "Toyota may modify Just-In-Time to ease Supplier Shock". 

 

I'll just go over here and carve another notch on the pistol handle, what's left of it...

 

The Gaza Distraction

The year-end stories about millions having their 401 (k) programs wiped out by the crashing stock market, down 40% (plus or minus a six-pack) is being shoved off the front pages by the Israeli attack on Gaza.  Headlines like "Defiant Hamas hits Israel with dozens of rockets" should not come as much surprise after 300 Palestinians were killed in the fighting.  This is not 'turn the other cheek' stuff.

---

What's being pushed into the background is the whole perilous state of the global economy and headlines like "Holiday sales drop to force bankruptcies, closings" or the Chinese report that the US lost international standing in 2008 while Russia gained...

 

For that matter, the USA socialist/bankster coup is going along almost unchallenged, except by a few in the Republican National Committee who are skeptical of the bailouts.  Must be those darned Constitution readers again...

 

Oh, and speaking of the coup - you did see this morning where GMAC is being thrown $6-billion tax dollars - just as I told you to expect when the (not really) Federal Reserve granted bank status to GMAC in the wee hours before Christmas?  Merry Christmas and Happy New Year to GM, huh?  GM gets a $1 billion loan to invest in GMAC....

 

Latest "Conspiracy Email" Flood

I've been flooded with emails about the "Attorney Registration & Disciplinary Commission listing for president-elect Obama's wife Michelle which notes that her last year registered to practice law was 1993.  Seems to buzz is trying to imply something nefarious.  But, when I looked at her work history, Wikipedia notes that starting in 1993 she was in a position administering not lawyering:

"In 1993, she became Executive Director for the Chicago office of Public Allies, a non-profit organization encouraging young people to work on social issues in nonprofit groups and government agencies.[12] She worked there nearly four years and set fundraising records for the organization that still stood a dozen years after she left.[10]"

What it reads is that she stopped practicing law voluntarily (probably because of malpractice insurance requirements)...but if you want to go chasing after theories, have fun.  There are more important stories on our radar...like the Second Depression, just to name one.  The record says "Public record of discipline and pending proceedings: None. 

 

I've turned on a 'garbage filter' to take out emails about this...

 

On the other hand, it looks like Dan Rather's lawsuit against CBS (which involved purported special treatment of George Bush in the Texas Air National Guard) will be going to trial in early 2009.  That oughta be worth firing up the popcorn for...

 

Dancing Mountains?  Seneca Guns?
While the linguistic work has lately been filled with imagery of 'dancing mountains' a number of readers have noticed that the seismographs around Yellowstone have recorded 80 minor quakes over the past few days.  Dancing mountains linguistics fill underway?  Could be...

---

But what was the loud boom in Mt. Pleasant South Carolina?  Channel 2 Charleston report is here...  Sonic boom?  Maybe....but I for one hadn't noticed before that USGS talks about 'Seneca Guns".  Hmmm...

 

--- snip and save section ---

Coping:  Monday's "Time Pie"

About this 'time' yesterday, I was remarking on how there should be more attention paid to how 'apparent time' is running compared with clock time.  The distinction being that 'apparent time' is what is experienced by humans while mechanical time is what's experienced by (consciousness-lacking) quartz crystals and free-running stable oscillators and what-have-you's.

 

 

Small sample numbers, but 70 said timer ran slowly and they were more productive, while only 43 said the opposite.  No change showed up in 51 cases.

 

We should o another one of these polls in a week or so, to see if the numbers change around much.

 

A number of reader comments:

"JB Priestly addressed some of your "time" issues in a book titled "Man and Time". If you can find a copy, it addresses these questions about the aspects of time, psychological and mechanical, and which if either is real? There are a lot of the same observations that you are making."

---

"Rudolf Steiner talked about this in relation to winter and summer. in winter the hours in a night are much longer - so that winter nights always seem to be a long time, while in summer the hours in a day are longer - long summer days. Much more than related to sunrise and sunset - the actual hour is longer. Hope that makes sense. I'll see if I can track down the reference."

---

"Terrence McKenna has a rant somewhere out on utube on the end of time membrane ripples(waves) heading "back" this way causing increasing congruence/incongruence with ripples in our "current" consensual reality that increases as we move through time....this may be a way of looking at the phasing we feel at particular moments as the ducks line up or they don't (but they do appear to be getting bigger) and the subsequent shift we feel - like standing in a downpour and getting the sense that we're falling up - gotta stay away from the brown acid."

---

"I understand the 'car crash' analogy, having been in one myself when i was 18, and i just get a strong sense that we're heading into some sort of 'event' that we cannot yet conceive of or describe. Like we're about to hit something big, but it's heading towards us so fast that our brains haven't caught up with the events unfolding yet."

 

Reader Feedback/Attention Deficits Department

Boy, sometimes I wonder if readers actually absorb any of what I write on this site (free, I might add) when I get emails like these:

"Dear Mr. Ure, Why is it that you and the other alternative economists have an impossible time addressing the possibility of a massive interest rate hike taking place sometime next year to protect the solvency of the US Dollar and to prevent a US Govt. debt default? Alan Greenspan even predicted in his autobiography that "we will see a return to double digit interest rates in the near future." Once again, your silence on this issue is rather stunning. ARE YOU IN DENIAL?? HAPPY NEW YEAR!!"

DENIAL????  Are you nuts?  Can't you read?  I've been writing for months that we're in housing-driven deflation now and that government overspending will flip us into hyperinflation as the dollar dies, which is something I've been writing about for YEARS. 

 

How many times do I have to mention that the dollar is only worth about 4.5% of what it was worth when the Fed was created for people to 'get it'?

 

Hells bells, Reader, this is probably the ONLY site you'll run across that says "Hey!  There's likely to be a swing from low interest to growing appreciation that there may be a depression going on, and further, that the reason I am looking at buying things over the next couple of months (and locking in a low interest rate should I decide not to write a check for whatever) is precisely because I expect that by next summer, all this funny-money being printed up for the bankster bailout will cause a fall in purchasing power of the dollar overseas which means rising prices in the domestic USA markets!

 

Sheesh!!  Don't you read what I'm writing here?  I've been parked (with some portion of my assets) in a Treasury Direct account (to avoid systemic bank risk) and I've been promoting the hell out of gardening and self-sufficiency for three reasons:  Systemic risk, quality of food, and likelihood of higher prices!  OMG, how much more clear can I be???

 

Silence on the issue?  What the hell do you think I'm holding gold and silver for?  Why would I be pimping the precious metals if the longer term outcome was deflation?  The trick will be to catch the Big Changeover....maybe in the spring.

 

Why have I mentioned how many times that stair-step locks down as interest rates fall makes sense to mortgage holders?  Somewhere along the line I even mentioned that the one real estate loan we have (under $25,000, LOL, just so we keep some kind of credit profile), was refi'ed down 3-months back when rates crumbled?  Why am I considering the new Solstice hardtop (with turbo and LNF package (a kind of stage 2-lite) kit if/when GM comes up with buyer incentives in February that include zero percent interest? 

 

Doesn't that sound to you like 'lock (in) and load (up) thinking?  Isn't that how one deals with a swing into hyperinflation?  Isn't opting out of the system with your own food and energy supplies a strategy, too?  Who put in 2 KW of solar power this year to get part way to power independence?  Hello?????

 

Who is always mentioning his commodity guy JB (817-717-5489) and commodity options?  Why would I buy commodity call options?  Think hard now....

---

Handy me my coffee, wouldja?  Let's see what else is in the poison-pen emails this morning, shall we? 

 

Oh here's another dandy...

"I have enough of reading your self indulgent hogwash . I'd rather listen to Rush Limbaugh who tells the truth . Its a shame that someone of your prejudice , narrow mindedness and inability to comprehend the truth or unwillingness , to be involved in a project as important as the Web Bots , but that's America and why we're gong down the drain . The wrong people , like you , are involved in important segments of American society and are helping bring this nation down . You and your radical nonsense are just as much to blame as the people you blame . Its hard to believe that anybody with an IQ above 40 would continue reading your garbage . Your no different than MSM that you constantly critisise."

Let me see:  I write about how to live on less, publish a FREE site (since 1995), have saved families literally millions of dollars and 30,000-50,000 people a day visit here of their own free will.  Add to that I support my local food bank, have a pretty clear course ahead in terms of general direction I expect the economy to go, and publicly discuss what I'm investing in. 

 

Did I mention promoting the green lifestyle and bogslife?  Or, that I'm trying to 'buy American", or that I'm for a strong country, sound currency, minimal foreign entanglements and won't support any party that is run of graft, payoffs from lobbyists, and can't even build a border fence in eight frigging years?  Did I mention household-level agriculture?

 

My radical nonsense?  Do you mean because I can read and support The Constitution?  Or, because I can read one of the rule books of life that mentions "Thou shalt not kill" and doesn't list little countries with big oil or drug resources as exceptions?  Bad on me, huh, for being anti-genocide, and pro honest money? 

 

The "wrong people" like me?  (an MBA, 15-years in major market news management, SDX and other awards, and 30-years in general & sales management of mainly successful companies doesn't count?)  Not sure who you'd offer up...some neocon publisher's columnists, perchance? Put on your jackboots....

 

Wait!  Why am I engaging in a worthless debate?  I should just say: "Ya'll rush off and have fun listening to whichever MSM groupthinkers you want...." and let it go at that...

 

Radio Program

A couple of people have asked for more details about the Captain Jack appearance of chief time monk Cliff of www.halftpasthuman.com tomorrow night.  This note from his cohort has a few more details:

"Igor here. clif will be on the Paranormal radio network with captain jack on New years eve. I think it is from 6:30 pm pacific time to 9:30 pm. But not sure about the time. Probably best to check that on the captain jack site.

No. I don't know what jack is captain of.

Here are some of the links I have

>> >> http://www.paranormalradioshow.net/ 

 First Time Caller Line >> >> 312-239-8902

http://wprtradio.com 

Weasel Words Dept.

I keep getting emails about the tax 'rebate'...like this one:

"From beginning of page 6 of 1040 instructions for 2008: "Economic stimulus payment. Any economic stimulus payment you received is not taxable for federal income tax purposes..."

I'm just saying this (one more time):  If you got the tax rebate, your amount due IRS will be that much higher than if you didn't get the tax 'rebate'.  It can be weasel-worded both ways - which is what we get when we send 99% lawyers to Washington to 'represent' us, OK?  I'll let you know if any of that changes in TurboTax, but that's how it works on my copy... If you think it was 'free money' you don't have to pay back, send us $1,200 right now because my tax form says I now get to, in effect, payback the 'rebate' which was really nothing more than a 'cash advance' which Uncle now wants back.  OMG how dense are we?

---

Sense snip and save items, bottles of fine booze, heritage seeds, classic ham radio gear, and prepaid phone cards to george@ure.net... OK, just kidding about the phone cards...

--- end snip and save section ---

 

---

Monday December 29, 2008

Beneficiaries of War

It's such a short point - but so obviously true - that I almost feel it's condescending to mention it to you because I reckon you're old enough to figure out that part of how the world works is the network of industries that profit on misery.  In fact, if you could have invested in just one class of business from mid 2001 I'd just have to venture that the arms/defense/'security' industries as a group would likely be up around the top of the pack.  If I had no moral scruples, of course, which I do, so I didn't.  (That to complicated for this hour?)

 

With that apology-in-advance out of the way, the morning headlines certainly fit the mold:  "Oil jumps to near $40 as Israel-Gaza clash widens". "South Korean weapons sales top $1 bln for first time."  "Sources: US to arm local Afghans."  Makes you proud to be a human, doesn't it?  A certain pride, perhaps in knowing that the "IAF uses new US-supplied smart bomb" in the conflict?  But come on, what do you want?  Blood or profits?  Pick one, but not both.

 

And then there's the matter of the Gaza situation escalating into a genuine regional conflict - which may see Gaza becoming a 'kindling' event.  Iran 'orders Muslims to defend Palestinians' and then there's a Debka report headlined "FM spokesman in Tehran: Iran has began preparing operations against Israel." 

 

In Gaza with more than 1,000 wounded so far with death tolls over 300 reported and of these, 50 civilians, the only unanswered question is whether Israel will follow up with a ground attack.

 

And even more to the point, what will this evolve/kindle/expand/ or morph into next?  Best I can reckon, this is just a 'going away present' from the neocons and a stake through the heart of any serious Middle East peace initiatives.

 

It's not all bad news of course.  You'll find the occasional headline like "Bomb survivors seek to end nuclear arms" but last I heard, it hasn't emptied the parking lots at Pantex.

 

So what's an investor to do?  Watch gold soar and currencies decline?

 

"Rand rises as Gold reaches 11-week high on Middle East tension" says one report while another offers some insight into Russia's financial woes as "Ruble falls to record low versus Euro as Russia weakens defense."

 

Coupled with the intractable US position in Iraq, the increase of Afghan troop levels by another 30,000, if you like investing in the death industries, it doesn't get much better than this.

 

Or does it?

 

The Wars to Save the Economy

The latest outbreak of warring and killing is a convenient distraction from the underlying ills of the economy and fits in uncomfortably well with my observation that just as the US economy was cratering in 2001, along came the events of 9/11 and that conveniently spun the U.S. economy on a dime by giving the country a fabulous new growth industry overnight.

 

And so, with reports out that "Discounts not enough to revive online retail sales" this year, or that a "Fresh survey shows gloomy US retail sales" and with all this against a background of "Wall St. faces record losses in last week of 2008", I'll trust your good judgment to determine how much of the world's current events are really as 'spontaneous' as the rip & read news headlines might lead the shallow-thinkers to believe.

 

Can't speak for you, but there seems to be a rhythm to it all, a beat, a cadence, a cycle, and perhaps an arrangement beyond pure chance.

 

Yup, a last ploy of the greed oriented parties to push and spin the reality of Peak Everything: Waking Up to the Century of Declines and the start of the Second Depression.

 

I wonder if the PowersThatBe, who have gotten a would-be second FDR have read FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression?  It's on my reading list.

---

Of course the reality of the markets being down ~40% for the year will be hard to 'cover' no matter how many war headlines come along.  Still, it provides a break in the economic drama,  pulls attention off the Madoff case, and will from an historic perspective make it feel like the pending 4-6 million new unemployed that will hit the rosters in the New Year are somehow the work of the democorps.  It isn't.

 

The problems of the world are vastly complex, interrelated and bounded.  The Western globalist crowd is trying quiet desperately to mix just the right amount of socialism with 'laissez faire' capitalism thinking that will let them continue to milk the system for power and money.  But, in fact, it's like mixing vinegar into milk...everything curdles. 

 

Don't take my word for it, though.  Stick around and watch 2009 because what the linguistics team calls the Year of Transformation should be (here comes the bad pun of the day) whey out.

 

National Layoff Festival Plans

No 'way out' of this one: "Pros say: Employment collapse is coming" says a CNBC post.  Gee, gosh, oh really?

 

Quakes Plus

We finally got linguistic 'fill' on the twin quakes language that we've been waiting for.  A note from Cliff to www.halfpasthuman.com subscribers lays it out this way:

"Salve,

It is possible you may receive this email twice due to subscription lists.

Well, the 'twin quakes' language has struck with a vengeance. In the source articles from China, the earthquakes are repeatedly referenced as 'twins'. So, looks like that language has indeed surfaced. This is just a quick update to set that linguistic structure to rest.

Extract below:

95,000 affected by twin quakes

"From correspondents in Beijing Agence France-Presse December 27, 2008 09:13pm ? CHINA says more than 95,000 people have been affected by two earthquakes that rattled south-west China's Yunnan province. Nineteen people were injured, including four seriously, in Friday's twin quakes, the Xinhua news agency said today, citing the Yunnan provincial civil affairs administration. Nearly 10,000 people were evacuated and were unable to return to their homes on Saturday, according to Xinhua. The two quakes, with magnitudes of 4.3 and 4.9, struck in the early hours of Friday in different parts of Yunnan. Meanwhile, a quake of magnitude 4.0 hit in neighbouring Guizhou province on Friday, with no casualties reported, Xinhua said. "

http://www.news.com.au/story/0,27574,24848583-23109,00.html 

We will be running the data sets into processing as of late today, so there is some expectation that the Part Zero report may be posted early. We will let you know."

You noticed the earthquake swarming in Yellowstone?  Normal or something pending?  Time will....

Subscription information about the next predictive linguistic run is here. I expect the timing will be better on the next run because of some technical changes - usually not off by two weeks on an event in modelspace like [twin quakes], but I think it may have had something to do with keeping the data streams up to capture the tipping point area from October 4-10 when the global economic slip happened as any Icelander knows.

 

Schedules: Cliff will be doing a two-hour guest appearance with Captain Jack New Years Eve.  10:30 to 12:30 Central Time - you do the math.  And, I'll be doing a short update on the outlook for 2009 with Ian Punnett on Coast to Coast AM Where January 1 runs into January 2...  And, only for subscribers to Peoplenomics, a draft of the outlook for 2009 that I wrote for Coast to Coast's After Dark newsletter.

 

I Must Be Dumb Department

Speaking of Iceland a second ago, here's a mystery I am trying to sort out.  I start with the headline that "Iceland not using IMF money to strengthen currency" which seems to suggest that Iceland hasn't needed the dough to stabilize the krona.  OK so far?

 

But then comes the headline  that the "Icelandic government take stake in House of Fraser owner Baugur."

 

So let me see if I have this right:  The PTB in Euroland crush the Icelanders, bust up some banks that aren't playing by PTB banking rules, and then lend Iceland $2.1 billion.  Then, the Europowers turn around and give the Iceland government an ownership in a retailing outfit in a debt swap?  'Nother shot of Jack, please?

 

The UK "government may acquire a stake in Baugur in return for the cancellation of some of its debt with state-owned banks, under one plan to help the troubled company."

 

Baugurs is a troubled company?  As in 'US automakers are 'troubled' companies'???

 

So does this mean the Crown or the PTB orchestrated part of the Iceland financial attack at some level to bailout some powerful folks at Baugurs, and will Iceland use that IMF credit facility on the pretext that owning an interesting in a UK retailer will help the krona?  Where's that damn shot of Jack!!!? 

 

I must be seriously thick-headed...because this story sounds screwier than the Madoff-SEC was just asleep at the wheel stories... It may take me some time this morning to pencil out who is owing who what, but this is slipperier than Arkansas real estate developments back in the days of...oh, what's the point?

 

Roger's Latest

My friend Roger Reynolds has a new advisory out.  Don't think he'd mind my sharing it - usually a very good cross-check on my thinking:

1)Please go to www.thewallstreettrafficlight.com  and read the December analysis. There is a book by the same name that anyone really interested in the analysis might read. The probability numbers listed are scary.

 

2)Robert Prechter, the editor of Elliott Wave, recently made a talk to the Georgia (USA) state legislature. He suggested RADICAL financial changes in state and local governments. He also said that the "new deal" changes done in the 1930's were radical at the time. His presentation showed that consumer confidence it highest at market tops and lowest at market bottoms. BUT, CONSIDER, WHEN CONSUMER CONFIDENCE IS HIGHEST IS WHEN THE MEDIA IS TELLING EVERYONE TO BUY.

 

3)Gold metal was up over 20 on friday and is up another 20 in early far east trading. WHY??? it seems the excuse is the Israel/Gaza fighting. Perhaps!!! But, is this not supposed to be a gold/silver bull market???

 

4)Three to four years ago the number of real estate agents in the USA was growing so fast that IF it had continued for a couple more years then there would have been more of them than school teachers. Yet, manufacturing jobs were falling seemingly just as fast. Manufacturing jobs were going overseas. Yet, to turn the US economy around, then the real estate agents must get jobs in manufacturing. How many years will it take for that to happen???

 

5)Christmas retail sales show to be down about 8 percent. The financial world assumed that when consumer spending went to 70 percent of the economy that this was normal. For the last 5 years I have said that it was abnormal. Normal was about 65 percent. BUT, were you investing in the early 1970's when it went down to 60 percent??? In my opinion, 60 percent is where consumer spending is now headed. Which companies will go bankrupt and which survive???

 

6)Did you read the article on how hyperinflation occurs??? As I understand it: In a bad economy, the govt continually pushes money into the system to try to "fix" it. Consumers, who are scared, save the money instead of spending it. So, consumers start to build large cash balances. At some point consumers lose confidence in the govt and in the paper money. Consumers then try to spend the saved cash on "things". BUT, production of things has been slow causing the prices of available things to soar. ie--hyperinflation. No one can know the "trigger points" of these events, BUT we know the govt spending/consumer saving is in it's early stages.

 

7)Do you believe that SMALL GROWTH STOCKS will always lead the market??? I am following about 6 small growth stocks that have average sales gains of 100 percent year over year. Half of them are priced over their 200 day moving average. Much stronger than the typical stock. E mail me to find out stock symbols.

 

8)Elliott Wave's market analysis is that the Nov low was the bottom of a wave 3 down. The DOW would now be in a wave 4 triangle. When this triangle (think trading range) is over, then the dow will go to a new low. After the new low, then a big rally can occur. BUT FROM WHAT LEVEL??? WHEN/WHERE--BIG UNKNOWNS!!!

On my schedule today: Chat with Robin Landry to see how he's reading market direction - more on that tomorrow if we can hook up...

 

--- snip and save section ---

Coping: About Time

Maybe its because I chat so much with the chief time monk at HalfPastHuman, but lately I have become a bit worried about 'time speeding up' simply because it pops up in our discussions as something to pay attention to in 2009.  I figure it may have something to do with the approaching 'singularity' but whatever it is, don't feel like the Lone Ranger if you start to notice the same thing.

 

"Tick tock...tick: Extra second added to 2008" says a headline about the leap second added on to the end of 2008.

 

As you wrap up the year, we've got a little project for you:  Start doing some benchmarking of 'apparent time'.  This assumes that you have sorted out the difference between 'apparent time' and 'clock time'. 

 

Clock time is when you have a mechanical or digital device which cycles at a predetermined rate.  When you run a production line in a factory, for example, I wouldn't expect there to be any measurable time differences.  In 2008 and 2009 you should still be able to run 'x' units per 'time unit' just fine.

 

But, where things seem to already be changing is in the passage of 'apparent time'.  You know the type?  Apparent time is the dilation of time in the split second before your car is hit in an accident you see developing.  It's the stuff of 'life passing before your eyes' as you face a situation where serious personal injury is involved.

 

I've been doing a lot of thinking about this lately.  Some days it's like apparent time is running fast and on other days (like today so far) apparent time runs slow.  On a day when 'apparent time' is running fast, I 'run out of time' on project after project.  Simple 3-minute phone calls eat up 15-minute blocks of my schedule.  A trip to the coffee recycling station (bathroom if you're still asleep) seems to take 20-minutes instead of 2-minutes.  That kind of thing.

 

On days when 'time is running slow' - like today - I've gotten most of the day's report done a half-hour earlier than usual.  Same number of words, same number of emails scanned, it's just that things seem to be working super smooth on my end.

 

The 'dance with time' is a two-way street.  It could be that on 'slow time' days, I'm just running super-fast and at peak efficiency.  The flip slide is that on 'fast time days' I'm running at half-speed or something.

 

I haven't found any site that polls and tallies this problem of some days having a different time-base than others, but it would sure make one hell of an interesting study.  Wouldn't it be nice to know on a near real-time basis if the day was "normal" or if a particular day is going to 'whiz by because time is running fast/you're running slow" or if instead, 'time is running slow/you're running fast"?

 

Make one hell of a fine web site...I'll put it on my to-do list  Heck of an interesting notion.

 

Let me test something out here.  About half way through today, please click on one of the following two links to vote on how 'apparent time' seems to run on Monday December 29 for you personally:

(VOTE) Apparent time is slow or  I am running very fast today.

 

(VOTE)  No change, you're nuts

 

(VOTE) Apparent time is running fast or I am running very slow today.

Please leave the subject line unchanged so my email router will tally things up for me - thanks...

 

If the rest of the day runs like this (apparent time is slow/I'm hyper productive) it'll be interesting to note if it's a group / global phenomena or just a localized event.  Might even lead to 'time mapping' which would really be (as folks from the 70's would put it) tripsidaisical.

Negative Thinking Meme?

A reader wonders:

"Hey George,

I just had a very chilling thought that i wanted to throw out there to you because you are a very smart person and I would really like to know what your opinion on this thought is.

We all see something very bad coming for America, I have read what you have said on your webpage I am subscribed to and even before that the news you gave at urbansurvival.com...everyone senses very dark times are ahead of ous...including the webbots which are not even human. But what if, what if the webots were here for a reason, to feed into a theory and help to deceive a more mass crowd of people. Think about this, right now more and more Americans are starting to believe there are horrid scary times ahead for america, including the webots. It has put us all in survival mode, made us all start thinking the end is upon us. Im thinking you are on that page, as am I and many other people around the world that are seeing everything that is unfolding, not only in our country here but in the world in general.

But think about this...what if Barack Obama comes in and saves our country like 100 percent without failure....what if he comes in and makes America the superpower it was again, it will make the supporters trust him more solidly and it will make his doubters, even his harshest critics praise him and belive in him, they will begin to think he is a miracle (you and myself included...we both see horrid times ahead including the web bots...but how amazing would it be if someone came in and saved us from this horrid divide?) Everyone would be behind him and the superower that is America will be supporting whatever decision he makes, much like a dictator...and isnt there much evidence about the end of the world coming in 2012? The only way to distract the people that are starting to see it is to suck them in, truly make everyone in society believe on all tangibles that we are doomed then miracously the calls this person makes saves our country completely. Now think about how you me and all your subscribers are thinking these times are coming and we are all preparing for them but then all of a sudden, this new president takes over and fixes everything beyond belief....on a really scary level almost everybody will be hooked and be 100%behind whatever his plans are....Including you and me.

I hope i dont sound crazy, this is just something that has ran into my head and think is very capable of happening, but most anybody i would say that to would think i am crazy, lock me up and throw away the key...however after reading many of your articles I can see that you are a very smart and deep thinker, and hope that maybe this makes sense to you and I am not crazy...after all anything is possible."

No, I doubt that it would/could happen.  There are likely far too many large-scale dynamics already in play such as the huge hole in federal budgets that can only be financed away through inflation, the continuing decline in consumer spending, I know you've got the list. 

 

I think what you're maybe tripped over is the 'save us' gene.  That's the denial gene's first-cousin that says "Something will come along as save us..."  In the meantime, I'll be out in the garden working on food, thanks. You have heard the 'three boats' joke, yeah? 

 

Let me know when my tax burden has been cut, Americas troops are home, the dollar holds its value, and the gap between the haves and have nots narrows.  Then we might have something to talk about.  But in the meantime, I'll keep working on Plan B, while there's time, thanks.

---

Send snip and save items to george@ure.net

--- end snip and save section ---

 

---