Remember in yesterday’s column how I told you I would have a stiff drink at the ready and be on the edge of my Lazy Man recliner waiting for the Fed’s latest money printing confessional due out in the weekly H.6 money stocks report?

Well, NSS, it was worse than I thought.  On a three months annualized basis, M1 is exploding at 16% and M2 is printing blasting away at 9%.

But as bad as these are, the monthly change rate – when you annualize it – works out to?

M1 = 29.8%  and M2 = 13%.  Monthly change, annualized.

Yee gads!  The hidden Weimar is here. 

One of our readers, obviously a genius, sent along a fine explanation which I will have to paraphrase because his original is lost somewhere in my 6-terabyte wasteland. 

The real deal is that the Fed is not gong to raise rates.  For the past several years they have been saying a rate hike is just six months off.  but see how it never happens?  It CAN’T happen.

The reason the fed will NEVER be able to raise rates is the instant they do, the whole compounded national debt balloon will pop and America will be bankrupt on the spot.

So they really have driven us into a box canyon and there’s no way for the herd to get out…

So yes, that IS (take it to the bank) the hard reality  that no one seems to be wanting to talk about.

It also underscores how BAD DEFLATION IS RUNNING.  Just in general terms, if M2 is going up 9% and reported consumer inflation is going up somewhere between 0 and 2% (toss a dart, it doesn’t effing matter) where is the other missing money going?

Into the rat hole of dark pools of capital.

The rich are piling up money left and right because falling interest rates have driving them into cash accumulation mode and it’s going to blow up the country – like it does in every Great Depression.

Here’s why:  When I graduated from high school, I dreamed of making a million dollars:  That would give me $70,000 a year income for life, I figured, with interest rates running 7%.  After I made a million dollars in a 7-year period “playing the game well” I noticed something was wrong.

With inflation missing in action (despite the Fed’s printing festival), care to guess how much money you’d need salted away to get $70.000 a year of income at 0.5% interest – which you’d be lucky to find?  (and without drawing down capital?)

$14-million!

Sadly, this is all true and it’s only a matter of how long it will take the rest of the country to wake up to the -ugly as sin- economic reality.

Oh, sure, when it happens, everyone will come back to the UrbanSurvival campfire,. pull up a rock and exclaim “Why, no one saw it coming!”  And, as always, they’d be wrong.

The ONLY game in town is estimating how high this steaming lump of shit can get stacked on made-up money before it all comes down in a putrid heap.

I’m guessing we could have as long as three more years.  The market ran up 5.6 times its starting level from its 1921 lows to the 1929 high.

Since the 2009 lows, 6,627 on the Dow roughly, you can run the numbers out and see we’re only about 2/3rds of the way to completely bazitzu crazy. 

Which is why you can buy 50 new cars with zero percent down, while we all sit in the Roaring Twenties replay and kid ourselves about what geniuses we are at picking the right investments.

The question isn’t whether you’re nuts…only whether you’ll be a winner or loser when “all comes down.”

Shall we move on to brighter topics?

The Slow Collapse of Globalism

It’s coming – it’s just that the “free traders” don’t see it yet.  We – unburdened by million, minions, and a Gulfstream – are able to see things a bit more clearly.

Take this morning’s just release report on import/export prices.  They argue that thinks are far from Hunky and Dory Land:

“Year on year export prices are down 6.7% and import prices are down 10.5% year on year.”

Another sign of dropping international trade is the drop in the Baltic Dry Index – which (yet again) continues stuck at levels not seen since the 2009 market lows.

Then there was this part of the Retail Trade numbers – inventory is building: And pardon the bad highlighter but you see how inventory tends to build before crap hits the fan?

This is no guarantee that trouble is on the way.

It’s already here – circling the block.  You just don’t see it yet.

Doesn’t matter to the market – futures are up.  Here, have some free money kid , and shut up.

No Wreck on the Freeway?

I know how important it is for gawker nation to slow down and look at video of breaking news.  So the Blaze had some links to the tornados in the upper Midwest overnight that should burn half a cup of coffee’s worth.

It’s OK, no one works on Fridays any more.

So Much for an Iran Deal

Yes, the Supreme Leader of Iran says the White House is lying and that we have devilish intentions toward Iran.

Could it be that the more centrifuges are spun up, the greater the odds that nuclear materials will be used for something other than keeping the lights on? Naw….

Madness on Bordering

While a man popped in Aridzona has been deported to Mexico 20 times, we’re also reading how another human wave of 40,000 kids is on the way.

As we reported for our Peoplenomics™ readers recently, the drought which is getting so much press in the USA is actually WORSE in Mexico so you ain’t seen nothing yet on border crossings.

The Price of Freedom

…to roam the internet is likely to be going up, figures this report.  The recent FCC decision/power grab means there may be higher fees coming to support rural phone improvements. 

When can I get fiber out here in the outback?   Right now it’s a fog mirror vs. fiber race – rural phone providers are in no hurry to speed up the net in the hinterlands…but like so many government programs it’s big on talk and tax, yet slow to actually change things here in fly-over country.

If I could actually get a due-by date on 10 MIPS I wouldn’t mind the Universal Service Fee but it’s mostly not helping us a bit.  If you live in a big city, it’s JAT (just another tax).

It’s a trade off, likely to be arranged by gubmint:  Ure doesn’t get fiber, you don’t get to keep your money.  That is the game, right?

Is She Really?

Hillary Clinton is set to announce on Sunday.  In truth she’s been running for the White House a lot longer – probably since marrying Bill.

As one radio bloviator noted, this signifies the great change from race being the hot ticket in politics to gender coming out for 2016.  Man-haters of the world unite!

Gridding for Trouble

From “warhammer”:

George,

The U.S. national power grid’s vulnerability has been a poorly kept secret for at least two decades:

<http://www.foxnews.com/tech/2015/04/08/power-grids-failing-infrastructure-at-risk-of-cyberattack/?intcmp=latestnews>

The backbone of America’s critical national infrastructure, the grid enables virtually all communication, commerce, heating, cooling and lighting. Taking it down would be crippling.

A wise adversary would diligently work to exploit any weakness or dependency in the grid. Taking down any aspect of the grid could cause serious disaster readiness delays, not to mention degraded military emergency action responses.

It seems the seriousness of these infrastructure vulnerabilities, particularly to a surprise EMP attack, is behind the decision to reactivate the Cheyenne Mountain Complex in Colorado Springs.

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One of my liberal friends called me this week to announce that the NRA was requiring convention-goers to their national gathering up in Tennessee to remove firing pins from their guns before entering the show.

I had to just sit back and listen – since once wound up on gun control, I can invest hours I don’t have in listening to anti-gun propaganda.

But here we have it this morning, over at the Bearing Arms dot com site that no, the only firing pin removal that would be required would be from display guns.  You know, the kind anyone wandering the show could pick up, touch, test the action, weight, balance, and such on.

Otherwise, notes the article is it really big news that the N.R.A. expects its members to follow local laws – whatever those happen to be?

As a gun owner (and user) I have to point out that guns are – like any other tool invented by the crazy upright bipeds – useful for good, or evil.  It all depends whose hands the tool is in.  Criminals who use guns are no different, as I see it, than hackers who turn off traffic signals or mess with air traffic control.  Yet so far we don’t have to register mice and keyboards.

The problem here is, every year, seems, we get a wandering snake come around the house or shop.  Nothing 20-feet long like in Anaconda.  Just your common everyday copperhead, cotton mouth, or coral snake.  I know where the coral snake family lives and we have a deal:  I leave them alone and they leave me alone.

With the weather warm again, we are on the lookout for our first slithering visiting.  When they show up it will depend where they are and how I decide to remove them.  #4 bird shot from a 12-gauge  is a nice stand-off approach while the .22 with rat shot is good for closer –in work.  A Glock or Ruger with rat shot is a kind of middle ground.

Last year, in honor of my liberal friend, when the first snake of the season showed up, I tried an experiment.  I was bound and determines to try liberalism.  So I  began by trying to talk the snake to death.

I’ll told him about Newton, MA, the Boston Bomber, and since he didn’t seem to trust me, I reviewed most of the major gun crimes cases of the past 100-years.

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Yes – NBC as in nuclear, chemical, and biological. The HI is hunger immigration which we’ll come to presently.

Our thinking this week?  It’s time to get a lot more serious about our prepping, why we do it, and the “other agenda” that may be working.

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You may be wondering “How did you manage to blow the outlook for Monday so badly – usually Ure much closer to right?”

The answer is simple:  The markets have entered “Upside-Down” mode.

Here’s how it works:

In “right-side up” mode, the market would have looked at the trashy job numbers of last Friday when the market was closed.  The futures seemed to have it called right – down well over a hundred Dow points in the pre-open.

This would be a normal reaction to sucky data. 

When markets entered the “Upside-Down” mode, however, bad news becomes good news.

The market fears higher rates like some people worry about a heart attack.  What’s going on now is that the bad news is seen as running the Federal Reserve out of the rate-raising game.

This upside-down (bad news is actually good) would persist a while, too.  2,100-2,150 on the S&P is not out of the question. 

The risk of such insanity is also why I have made no secret of my love of cash – the third way – and in Depressions, in which –  as the history books teach us –  Cash is king.

Critical Fed Data Due

The one thing to be aware of in markets today is the release of the Federal Reserve’s Consumer Debt figures.  Called the “Consumer Credit Report” (because they’re on the receiving end of the debt – on this side of the table it’s the yoke of debt slavery) it looked like this going into today’s data due out at 3 PM Eastern:

There are two types of debt reported:  Revolving which is things like credit cards.  Non-revolving is the other and that includes things like student loans.

One of the real problems with the data is that it is aged well before release.  The numbers coming out today will reflect data for February and this is April, right?  So trying to get much more than a general sense of things is like trying to drive by looking in the rearview mirror with binoculars.

This data series, along with retail sales and consumer price data are conditions where “upside-down” market thinking could be a plus for bulls.

I forget where I read it, but the term “best dirty shirt in the laundry pile” certainly is a fair summary of how the US markets look compared to Europe and many other places.  Our Peoplenomics™ Trading Model has been consistently right through this market – proving my gut (although smaller from dieting – see Coping) is still not as good as my math.

Here Comes Paul

I think Rand Paul would make a dandy president.  He comes from good stock, my ultra liberal friends hate him, so he can’t be all bad.  And he’s trying to walk a fine line between Tea Party ideals and conservative GOP purse strings – not an easy hike at best.

The announcement will be coming up at Louisville.

Since we’re months away from football season, this morning would be a fine time to kick off the UrbanSurvival Fantasy Politicians League.

That’s because the American public is denied real choice because of the duopoly that the R’s and D’s have used to smother good ideas.

Hence, I think it would be dandy if voting laws could be changed so we could elect president and vice presidents from either party.

I think a Rand Paul/Elizabeth Warren ticket, for example, would make a lot of sense.  It would chill the reactionary right, be progressive on TP and conservative D issues, yet not wander off the board on the socialist path.  I believe the two personalities would keep each other in check, too.

The Wikipedia discussion of how the VP process worked early in the Nation’s history is worth review:

“Under the original terms of the Constitution, the electors of the Electoral College voted only for office of President rather than for both President and Vice President. Each elector was allowed to vote for two people for the top office. The person receiving the greatest number of votes (provided that such a number was a majority of electors) would be President, while the individual who received the next largest number of votes became Vice President. If no one received a majority of votes, then the House of Representatives would choose among the five candidates with the largest numbers of votes, with each state’s representatives together casting a single vote. In such a case, the person who received the highest number of votes but was not chosen President would become Vice President. In the case of a tie for second, then the Senate would choose the Vice President.^[28]

The original plan, however, did not foresee the development of political parties and their adversarial role in the government. For example, in the election of 1796, Federalist John Adams came in first, but because the Federalist electors had divided their second vote amongst several vice presidential candidates, Democratic-Republican Thomas Jefferson came second. Thus, the President and Vice President were from opposing parties. Predictably, Adams and Jefferson clashed over issues such as states’ rights and foreign policy.^[29]

The key part was the development of adversarial political “parties” which is really an American tragedy – it really spelled “The End” of more directly representative government – and the “forced consensus” that the TP still riles against today.

“A greater problem occurred in the election of 1800, in which the two participating parties each had a secondary candidate they intended to elect as Vice President, but the more popular Democratic-Republican party failed to execute that plan with their electoral votes. Under the system in place at the time (Article II, Section 1, Clause 3), the electors could not differentiate between their two candidates, so the plan had been for one elector to vote for Thomas Jefferson but not for Aaron Burr, thus putting Burr in second place.

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One of our readers up in Illinois (Tom the Toolmaker) is going to love this little tale.

As I think I mentioned, Elaine and I are “remodeling” the area between the house and the 40-x 40 pole building that houses my palatial office, Panama’s digs, and a whole bunch of shop equipment. 

Part of the process – which we arrive at today – involves the application of ground cloth – better know in some parts of the country as “weed barrier.”

And I hate putting it down.

That’s because it will take a few hundred ground cloth staples, which are nothing more than bent-up #8 steel wire about 6-inches long.  In the past I’ve cursed this aspect of landscaping because it means walking on your tired-old knees to put in staples in a 1,500 square food area,

Not my idea of fun…no sir, not at all.

But here’s the trick I wanted to pass along:  I’ve found that whenever I find myself shying away from a large project, there’s usually a reason for it.  The reason in this case is sore knees.  I used to have gout (celery seed extract, bilberry, blueberry, and black cherry extract have killed that problem) but I’m still incredibly gun-shy about getting down on the knees.

“OK, genius:  Solve the problem,” I told myself.

Easily done:  I’ve been telling Peoplenomics™ readers for years that I’d a HUGE fan of structured problem – solving.  Once you get the knack of it, there is no other way to approach most (physical) problems in life.  I believe the best single book out there continues to be And Suddenly the Inventor Appeared: TRIZ, the Theory of Inventive Problem Solving.  It ain’t free – try $40-bucks.

The point is this ground staking problem lived in the physical domain.

Under TRIZ (the theory of inventive problem solving) the “inventor” always begins by inspecting the problem – first up one side and then down the other.

Somewhere in following steps, you envision the ideal solution.

Recognizing that “on my knees” was the key deal point of the problem, the ideal solution would be something that would allow me to put in the ground staples without bending over.

Once this became clear, all that was required was a few minutes of visualization of the forces involved and a trip to the workshop. 

In a matter of 10-minutes, a number of slices on the table saws, including a 30-degree angle cut, so the staple wouldn’t slide out at the top, I had created a dandy stand-up ground staple installer.

It’s just  short hunk of 1X4 that is screwed and glued onto a piece of 2X2 and it holds about the top half of the staple.

To use, I simply put a staple in my installer while standing, lower it to the ground and put down. 

Granted, the staple only goes in about 3/4ths of the way, to I flip the tool around where there’s a slot in the 2X2 that pushes the staple down to within 11/2 inch of the ground cloth.  A firmly planted heel does the finishing touch.

This may not be the biggest breakthrough of the week, indeed, it’s pretty simple.  But being inventive – and our use of tools – is what sets us apart from gorillas.  So inventing a tool for every task is something I always try to remember.

In order to have an above-average output level, you need lots of tools and to understand that everything has a recipe to it.

A Recipe Discovery Moment

Speaking of which, one of these days I really will finish “Victims of Process:  How Unwritten Recipes run Your Life.”  The book is a compendium of my experiences in life using the “recipe approach.”

To show you how it works, Elaine and I were talking about her flying lessons.  She’d backed away from learning to fly the airplane because it is a very complex task and she wasn’t comfortable with many parts of it.

When we got to talking about it last night, she revealed something very interesting.  Both her flight instructor and I had overlooked explaining some of the key “hidden recipes” to flying.

The one she brought out was this (paraphrasing):  “When you do the run-up, you turn the key and say one-two, one-two, then you pause and say one, one.   Why do you do that?”

Well, I explained, there are two complete ignition systems on the airplane.  Either one will run the plane, but we always run on both at the same time.

“Huh?”

Yep.  Think of an airplane engine this way:  “It’s built for ultra-high reliability.  This means that although it’s a four-cylinder engine, each cylinder has two sparkplugs.  There are also two magnetos – one for each system”

The counting, I explained, was to ensure that the ignition systems were in the BOTH position because while either one will run the engine fine, there is a small drop in horsepower when you don’t have dual ignition.  The counting out loud ensures the pilot has tested both and has returned the switch to the correct position for take-off and normal operation.

Should one of the plugs become fouled in flight, you can shut off one system or the other, which will oftentimes smooth up the engine while you make it to the nearest airport where you can find a mechanic to find the fouled plug.”

Well, the light went on.

Something that had been one of those great “secret recipes” of flying.  But now that she owns that answer, she’s sneaking back toward lessons.

But the point is that people aren’t often “dumb” about anything.  Rather, it’s just a matter of sharing the right recipe so that they understand what you’re talking about.  In this case, once she heard that there are two ignition systems and the counting ensured I tested system two, then system one, then confirmed I was in BOTH for take-off, she “owned it.”

Flying – and many other pursuits – are what I would call “fully rationalized.”  In other words, there’s a reason for everything we do.

Just like building a good house is fully rationalized and a poorly built home is not.

The difference?  In a poorly built house, door swings will be wrong or awkward, for example.  Or, plumping won’t be installed in a thoughtful manner.

When you’re building an electronic device?  Same thing:  The time to make sure all the wiring and connections are right is when you’re in the layout phase of a printed circuit board.  Now after you have a nearly completed board.  When this happens, you end up installing cuts and jumps which are about as good an indication of incomplete engineering, as you’ll find.

When it comes to interior design, I am not the recipe king:  Elaine’s head, however is perfectly wired for “whole vibe” design.  Me?  No sense of interior design at all.  But hand me the Skil saw, a cutting rig, anything with electronics to it…and I’m that guy.

Recognizing that each partner has different strengths and weaknesses makes for a good relationship…one of the most important “hidden recipes” in life.

The old saying “Women marry men hoping to change them, while men marry women hoping they’ll never change…” doesn’t have to be a hassle.  Provided both parties see the wisdom in the old saying and are able to step back when they don’t have the right recipe.

Speaking of Airplanes:  Hot New GPS

I think I’ve raved about the iFly GPS systems made here in Texas?

Well, as a long-time customer I managed to get one of the first iFly 740 GPS units that they are now shipping.  Click over here and roll down to the Specifications tab and have a look.

I did the burn-in on the 740 last night and OMG what a delight.

Just as an example of state-of-the-art in VFR GPS platforms, the iFly now allows you to overlay weather on top of a sectional or IFR chart.  This used to be a separate screen.

Another is selective WAAS enhancement.  The new unit has built-in WAAS (wide area augmentation service which yields precision as good as 10-feet).  But, since we also have WAAS data interleaved on the ADS-B wireless data stream, the new 740 selects the better of the high precision streams.  It’s almost like having diversity-receiver capability.

But the main reason I upgraded (no, not free) was for the increased screen brightness.  Yes, the old 720 (on the left)is a grand piece of gear and sunlight readable, but in really bright glare, on the yoke, it can be hard enough to make out fine print that you’ll play with the +/- buttons to zoom in an out.

No more.

The iFly 740 (on the right in my un-retouched snapshot from the kitchen counter) is vastly more readable with 1,300 nit brightness.  It’s really impressive.

Since we fly a lot in the sun and have a low-wing airplane, this improvement in visibility under very bright conditions is a real plus.  Either unit displays ADS-B traffic on the sectional, but the new 740 adds a 30-minute onboard battery backup, as well.

The WAAS GPS doesn’t drift around when you’re not moving like the 720 does (in the non-WAAS mode), either.

We don’t waste money on the airplane – and the only reason we can afford it is living in an old trailer in the woods and having no bills.  But like the other recent additions and changes to the plane (not to mention having aggressive maintenance), it’s all about safety and being able to get in and go somewhere if we need or want to.

I’m sure you’ve seen people with cars that are the same way:  Some people maintain their cars so that they can jump in them and drive across the country without giving it a second thought.  Others though, will have half-bald tires, the oil needed changing six months ago, and that slow radiator leak is a problem…

That’s what separates a good car from a bad one, or a classic airplane from a junker. Though not to be confused with the Junkers J-1.

Having Fun With Jade Helm?

My son’s buddy got a new Inmarsat satellite telephone.  Apparently, prices have come down on these things, although $250 a year sim card) and $250-$500 for a used unit on eBay ain’t free.

But he decided to try it out yesterday…and since my son knows that sat-phones are tightly monitored and since Jade Helm is going on (maybe in the ramp up, I figure) it would be interesting to see how alert people are…

My son called to test it, speaking in code, and doing his best imitation of Michael Weston/Burn Notice.  He mentioned grid coordinates and will advise when package delivered and so forth.  I might have mentioned “Hi Bumblehive” or something similar.  I wanted them to know we were just playing.

This could be an interesting experiment, however.

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