Oh, my.

It’s getting thick now…

Thick as a good carbonara over linguini.

All this talk about deflation which, as we noted previously, was a kind of verboten word prior to the NFL scandal put the word back front and center of public mindset.

Ever since, it seems, the word has been showing up in all kinds of news stories as expected:

The Financial Times has an HSBC fellow explaining how deflation in Japan could roll over onto Korea.

Then a think tank is saying that prices are stable for about half of Japan’s core CPI numbers.

The Markit Eurozone numbers just out suggest the world won’t end this quarter in Europe, though (chart left).

Normally, I would be holding up US consumer prices as we talk about incipient deflation in America, but since the Lazy Department doesn’t have its poop in a group, we have to wait until mid next week to receive the Official Narrative from the Obamanistas.

But it’s clear to the keen observer what the game is:  Global, synchronized monetary inflation at screaming rates, but done through quantitate easings, so the public doesn’t catch on.

The fact is, the global bankster class is scared spitless that global deflation is here and while it might provide more of our Roaring Twenties ahead, when it ends, there will be violence of the hopefully just financial sort.  (Yes, you could read that as a double-entendre if you wish…but I assure you, I’m not that clever.)

Say, here’s a story about how scared the EU conquesters are…the only piece not dialed in is the rational for the EUkraine war, but if you think about it…

Spin to Win

With the Baltic Dry Index up another 2 this morning to 511, we love reading articles telling us it doesn’t matter.

But, if this author’s premise were near the mark, either the balance of trade would improve (don’t hold your breath) or the economic recovery is a lie (longer conversation).

Keeping an Instant War Handy

We read the trite statements of the obvious now – fully four or five months since we pointed out that the EUkraine battle is merely a skirmish in the Manufacturer’s Resource Wars – about how NATO and Russia are on a collision course.

Ya’ll get new glasses, or just waking up enough to figure this crap out? 

Go read the petroleum report (see yesterday’s column for the link, I don’t like doing work twice) about now the Dnieper-Donets Basin in HUGE and Russia now owns the ground above the southern part of it.

Here:  Take this tumbler and press it up to the doors of the Halls of Power and let’s see if we can hear what is being said…

“Now, let us read from the Book of Ure, Chapter 1990, verse August, line 2:

Veerily, it was said by the Elder Bush:  there are trials and tribulations being thrust upon these innocents and the demon spawn is slant rig drilling by Evil Empire into the sacred soils of Kuwait.

And so, be instructed, we must have war to right the wrong, to unslant the drills, and partake of the greater gains for all of us.  Amen.

And so, the flock, having bidden the advice of the Sage of Hong Kong to be of a sheeply manner, had their eyes bound up tight, so as not to hear the failing money-changers of Europe.

And so we see in today’s parable of the crippled banker: “ECB: Bankers Saw QE as Only Way to Fight Deflation” evidence of how it is that the Church of the Almighty Demon Dollar must maintain multiple séances.  So as to be able to conjure an instant and (nominally,  “just” war, on demand.

And it was so.  Amen brother, gimme a hallelujah  and a 10-spot on  S&P in the second. Meet on the circles, part of your hair, being all-knowing power is totally rare. ”

(Thereafter, it falls into a jumbled mess of speaking in tongues that doesn’t make any sense.

Read More

Yesterday was spent doing all kinds of things of a rancherly sort.  I’d been out admiring our “south 16 (right) and it was time to go up and talk to my neighbor around how to set his fence for an entrance.  Wants an electric gate.

To get ready, he’d cleared out some cedar underbrush and  while he was burning some small logs in a well-cleared area, we jumped in his 4X4 and he gave me a tour of his fence work.

Between his property, his brothers, and parents, there’s a good 3+ miles of fence line, but he’s got most of it cleared either side of the fence back about 8-feet, or so, allowing it to be bush-hogged.

Then the fence line itself is given a dose of Round-Up and the fence line stays clear.  Strack.

That’s the way most fencing is done around these parts, cleared, bush-hogged, and poisoned.  Needless to say, my fence lines don’t look so neat, and no, I don’t use Round-Up.

This spring I’m looking at using something that would be organic..like salt water (fairly strong salt solution) on the theory that it, too, will kill things where applied, but won’t have such disastrous environmental consequences.

Still his fence lines look amazing.

But that’s not the story.

When we got back to the burn site, one of the logs that has been ablaze has decided to roll down the hill, and caught the dry leaves on the surface on fire.

Two people, one with a rake and one with a tractor had the situation in hand in about 10-minutes time.  The tractor put down an outer perimeter, the rake man pulled dry leaves out from around brush that was left…

Afterwards, we spent a little time on the “narration” of this, since when his S.O. came home, she would no doubt see the burned patch of about 100-feet, or so, up by the front entrance to the property and start asking questions.

“Controlled burn…that’s what this is….”

And so it was. 

I made a note of that:  In the future should we ever have a fire jump outside the immediate burn area, I’ll use that “controlled burn” approach and hope Elaine will believe it, as well.

Come to think of it, though, that’s not the story, either…

—

Figures out from the US Department of Agriculture show that all these homesteading sites that are popping up like fleas on a dog lately, are tilling fertile soil.

Some new 2014 data on farm sales have been released and here’s what they show:

The percent of all farms by sales class are:

* Sales Class $1,000 – $9,999: 50.6%

* Sales Class $10,000 – $99,999: 29.9%

* Sales Class $100,000 – $249,999: 7.0%

* Sales Class $250,000 – $499,999: 4.7%

* Sales Class $500,000 – $999,999: 4.0%

* Sales Class $1,000,000 or more: 3.9%

People are buying up land, something I knew would be coming as we slide down the deflationary skids toward hard times.

A lot of people don’t see if, yet, but that’s what my models have always predicted – a return to the thinking that was behind one of the most popular books of the last Depression:  Five Acres and Independence: A Handbook for Small Farm Management.

Since being published during the last really “Hard Times” this book has sold on the order of 3-million copies, and there’s a lot that can be improved upon today.  For one, we don’t have to wait for the Rural Electrification Agency to come through and put up power, since most last has power to it now, at least at one corner or edge of most properties.

No doubt, a lot of the properties above are bug-out options  that people see a future near for, although in truth, there may be a lot of “squaring up: in there, too.

Take my neighbor and I:  Behind his place, and mine, is about a 20-acres parcel.   About 150 feet of it runs along the back of his property and 450-feet runs along the back of mine.

We kicked around buying it, and each taking a piece of it to “square up” our property, but so far the owner hasn’t shown much interest in selling, or has, and just hasn’t mentioned it to us, yet.

The last asking price we heard was around $75,000 – which pushes out to $3,750 per acre.

That’s actually not a bad price.  Outrageous, but considering demand locally…

Land with good road access may go higher:  There have been some pieces of land go for $5,000 an acre, but that would a piece like ours.  Something with a creek on it, some elevation, decent soil, and above all, some standing timber.

Even though we did a selective cutting in 2004 (which made enough money to buy the tractor and some implements brand new), there’s plenty of wood left.

Read More

Peace can show up, any old time now in EUkraine.

As you would expect, with a whole petroleum reserve underground, the fighting is continuing while the parties who stand to benefit in the long-term are talking about the need for the terms of the cease-fire to be imposed.  Each looking at the other.

So when you read headlines like this one about how Leaders Agree to press forward to Ukraine Ceasefire, have a clothes pin and some Charmin ready.  Because the behavior stinks and the cover about “democracy” sounds like cow chips from the male of the species.

By comparison, the “You cut, I’ll pick” protocol of the drug trade is highly refined and civilized.

If you’ll just read the full geology report over here, you’ll understand one of our unconventional tenets of modern economic:

“If there’s value below ground, there’ll be fighting above ground.”

Works like a charm to analyze global chaos which turns out to be not so chaotic, after all.

Whose Side Is He On?

The story “Obama says world should address ‘grievances’ terrorists exploit” should give you some ideas.  Say WTF?  The main beef of most terrorists if we aren’t sharing their belief system.  Grievances are an excuse, at least in large part.

Could America give away even more foreign aid than we do?  I mean and not go broke?  And our corporate interests are mostly transitioned to China, so go talk to them about corporate social responsibility.

I want you to forget about all the arms we sent to al Qaeda affiliates in Syria, how much military materiel was left behind in Iraq, who trained the locals to repair it, and what happened in Benghazi or who tradee how many from Gitmo?

No, sir, I want you to suspend your memory when your read the news…

Check out the NY Post’s headline about how Obama is refusing to admit to Muslim terrorists at the summit.

Lemme see….is it LA gang members who are blowing up stuff in the Middle East and whacking innocents in Paris, Your Excellency?

I voted for him once…not the second time.  But then, I’m a fool me once kinda guy and I’ll take my cartoons uncensored, thank you.

Speaking of Assault Rifles, Terror, Etc…

I trust you have been following the stories about how the administration is trying to ban AR-15 ammo that has been around for years?  Here’s an example of what’s making the rounds.

The number of law enforcement people shot with such rounds from legit sportsmen?  Zero, last time I checked.

But don’t let that fact stop the government…the very government that cooked up Fast and Furious/gun walker scam to actually bring such arms to drug cartel henchmen and still hasn’t really laid it all out.  And yes, the Bushies have a lot of explaining to do, as well.

And while the new AG promises to be even more anti-Second Amendment than Mr. Holder, we can’t help but notice the unconstitutional abuse of privilege being placed on federal firearms dealers whose banks are being told in no uncertain terms that they will be subject to special audit if they supply credit (as in card services) to gun dealers.  This has been the  Obamanista playbook for over a year… 

Maybe the Hong Kong due was telling us something…

The Hong Kong Hint

That reference, in case you missed it, is to the leader of Hong Kong who has told pro-democracy leaders, in so many words to stuff it.  The pertinent quote?

““Last year was no easy ride for Hong Kong. Our society was rife with differences and conflicts.

Read More

Time we had us a little coffee-side chat about going on cruise ships for vacation.

The occasion of this discussion is a fellow who left a comment (in our comments section) that went to the idea that the only reason people take cruises is so they can brag to their friends about how many cruises they have been on.

Nothing could be further from the truth.

I mention cruising because, for many people, it is a very cost-effective way of traveling. The traveling part is included, the meals are included, there is entertainment, nice exercise equipment, and a whole lot more.

I don’t know if the reader was practicing up to be a “troll” who lives under a post, but the suggestion that cruising is an ego-trip, demands some public discussion so that MY decision isn’t taken out of context as an erudite expression of self-interest.

Cruising is practical.

Let me do a little comparison with other popular “vacation” approaches and you’ll see what I mean.

RV

I have yet to do a recreational vehicle vacation.  To me, it’s just another driving trip but with some major differences:  The “car” is longer, requires much more attention to driving, sucks down a lot more gas, and in many places, you have to pay $30 (and up) to park it.

Say you drive 400 miles in a day.  And let’s say that the terrain is like Utah or Colorado:  You’re looking at 100-gallons of gas or diesel, so round off to $300 to be on the safe side.

Read More

Futures are up 30, oil over $52.50…

Not to put too find a point on this being a replay of the Roaring Twenties, the end of which was overseen by president Hoover, but here we are with markets setting new highs and the future ahead looks…well…problematic is a polite term for it.

Just as the original Roaring Twenties ran from the end of the 1921 market break up through the September 3 peak in ‘29,  an astounding eight-year run, the current run should also end in about 8-9 years which means by this fall, but more likely next year’s fall, we should be seeing economic reality set in.

And there are other indicators, as well. But since this is a shortened work-week, here’s the picture I drew for Peoplenomics readers a couple of months back:

The key thing I look for are the ratios.  For example, we know that the run-up from 2009 to present has been a factor of (roughly) 2.72 times.

Now, let’s look at the chart above:  Where would 2.71 times the 1921 low have placed the Dow back when? 

The answer would be (63.9 x 2.72) =173. 78. 

Given that my chart here is a couple of months old, we can see we’re in  the period just ahead of what should be a screaming rally in stocks that could last another year, and maybe till the closing hours of the Obama presidency.

Then, we would slip into the soup of  Paul Krugman has described in his book titled The Great Unraveling: Losing Our Way in the New Century (Updated and Expanded).

Still, for now, it’s not exactly secret that our Trading Model has been mostly long since 2009 and keeping an eye on the longer-term rhymes is where we can find ancestral evidence of market bubbles going to such extremes:  From the 1921 break’s low, the Dow rallied to 5.96 times that value before breaking.

If we then look at 2009 and use a starting level of 6627 and apply this kind of wild blow-off excess, we could actually make a case for a Dow 39,500.

Yeah, sure, there is fear (and a lot of loathing) whipped up by the rabid right radio rhetoricians (RRRR) but the fact is that the economy doesn’t seem poised for collapse yet, this morning.

I’ll grant you, it’s not likely to play out so smoothly and predictably, but we’ll have some further comments on where smart money might be going in tomorrow’s Peoplenomics report.

In the meantime, Elaine and I are off on our cruise this coming Saturday, so don’t look for really long columns (though quite likely more interesting than usual).  But I wanted you to understand why we are taking time to “sail and smell the roses.”

The picture is not nearly so clear today, as it was in the 1930’s blow-off.  For one, the impact of inflation was pretty low.  In fact, according to the Minneapolis Fed inflation calculator, One Dollar in 1921 was buying about $1.05 worth of goods in 1929.

Using the 2009 low, we see that despite the deflationary picture in general (and given away by the ultra long-term view of the Treasury (^TNX) chart, we still have 10% inflation since 2009.  But whether that will be additive, or subtractive relative to the Dow 40,000 target becomes an interesting area for speculation which we’ll save for the subscriber side.

There’s also the coupling effect of the global economy…so a long discussion about whether we’re running on a clock (the time domain) to blow up, or whether it’s a set percentage increase (the dollar/value domain) should be covered on the subscriber side.

CAUTION:  Whenever I talk about upside potential, a downside reversal is almost always at hand.

Still, the holiday weekend is over…the world hasn’t ended, although the new generation’s Hitler analog ought to be working his way into power in a country where unemployment is high and nationalism is important, so keep a close eye on challengers to Putin/Medvedev.

Watching Brother Alexei

All of which wouldn’t be worth doing except we have a convenient country with high unemployment, strong nationalism, and frankly, a strong challenger who has already been through his Mein Kampf jail time in the person of Alexei Navalny.

You might remember he, and his brother, was boxed up by the Putanists because of politics and ultranational worries.  They seem to be able to read history, like we can.

At any rate, Navalny is back in custody, and with that, calls for another jail term.  But history argues that if Navalny is to be the ultranationalist analog, he will beat this rap and will quickly ascend into a position of strong challenger to Putin/Medvedev.

Or, I could be looking in the wrong place.

Muslims Taking Over France

There goes the Louvre off our tourist bucklist with video of how a Jewish journalist was spat on and called names walking the streets of France in clothing indicating his religion.

Meantime, Jews are being called on to return to their homeland is Israel and Billy Graham turns weather forecaster says there’s a storm coming with the latest ISIS beheadings.

See how easily played the liberals of France were?  Think there’s a lesson in there somewhere?

Read More

We begin this morning, like all good middle manager corporate suck-ups (and Jerry McGuire) by asking government to “Show us the Money!”

So, presto, faster than you can say “I’d like the sausage and eggs, over easy, hash browns extra crispy, a side of ham, bagel with cream cheese instead of the toast, decaf coffee, side of ham, apple juice,  and a piece of pie for desert…make it ala mode with French Vanilla..I also have a peanut allergy and you did get that’s DECAF, right” here is what matters:

-0.8%

If your order takes a while, the detail level goes like this:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $439.8 billion, a decrease of 0.8 percent (±0.5%) from the previous month, but up 3.3 percent (±0.9%) above January 2014.

Total sales for the November 2014 through January 2015 period were up 3.8 percent (±0.7%) from the same period a year ago. The November to December 2014 percent change was unrevised from -0.9 percent (±0.3%).
Retail trade sales were down 1.0 percent (±0.5%) from December 2014, but up 2.4 percent (±0.7%) above last year. Food services and drinking places
were up 11.3 percent (±3.5%) from January 2014 and auto and other motor vehicle dealers were up 10.7 percent (±3.0%) from last year. Gasoline
stations were down 23.5 percent (±1.6%) from the previous year.

And yes, we now have two quarters of back to back declines in retail and a third would be what?  A recession.  Oh, wait, that would be quarters of GDP and we can lie our way around that by making up stuff, but sales don’t lie….which is why we need a large population of economists.

And what is keeping America alive?  Presently nothing.  But last year?  Auto sales.  Behold:

Save the Economy!  Buy something (even if it’s some useless shit you don’t need)!

Meantime, if your extensive breakfast order STILL hasn’t arrived, we could mention the market futures are up, so that means no crash until at least two months out.

With the Baltic Dry Index out there circling the 2009 lows, down another 13 this morning to the 540 level, so lower than 2009 – we know that a combination of longshore talks and delayed shipments may mean more than anything else  that the Fed is seeking any reason it can find to argue that we’re not stuck in deflation.  LOL, hep me, hep me, brother.

Still, gold and silver are chilling.  Say, did you catch this one?

Peace is Bad for the Economy

While retail can’t be blamed for everything that happens, any leftovers can be shoveled onto the rap sheet of Vlad Putin.

The problem, which USA Today doesn’t put in such direct terms in their story here today, is that there is Big Money…come on winners… is War.  And Vlad just agreed to a ceasefire, so that’s off for Q1.  Means another QE in EU is ITB (in the bag).

Of course, we still have ISIS but when Putin in talking ceasefire and the president of Syria was unflappable in his BBC interview earlier this week, how is  Boston Dynamics (a subsidiary of Google) ever going to sell a million robot dog army to the Marines without a hot war to ramp up for?

That, I suspect is why the Spot video has gone viral since we pointed this all out to subscribers in our Wednesday Peoplenomics report:  Peace is bad.  See Spot run.

When running, Spot wants RPGs and silenced human-killers to be made battle ready.  As luck would have it, we will either find a war, or make one, so stand by for a robo-battle yet to come.

Who’d have thought:  Google’s going to become a kick-ass (or dog) defense stock! 

So with self driving cars, internet search, social, dogs of war (pardon the pun) it’s going to be the one ETF of the future.  How come no one is saying this but me?  And where are the anti-monopolists?

We broke up a perfectly good phone monopoly years back, so why not break up a group that has such a strong hold on the future?  Where’s judge Harold Green who presided over the AT&T breakup case when we need him?  (Trivia answer: dead.  Great guy.  We used to grow people like that in this country.)

Where at the pols who should be keeping the future random?  Answer:  Getting campaign contribs hand over fist from where?  (those who own future…)

US Department of Resume Tweaks

Say, looks like NBC seriously considered firing Brian Williams for inflating his Iraq experience, according to reports like this one.

And now, the Washington Post is looking into the educational background of Scott Walker, governor of Wisconsin and serious GOP 2016 hopeful.  I don’t recall the Post looking into the legal conduct of the Clintons prior to their running for offices or Beghazi, but my memory ain’t so good.  I’m getting old and cranky.

At any rate, where this all leads is to the Federal Election Commission trying to slime-ball through Internet controls (on the assumption people can’t figure out which side various media are on, so lets license are mandate reporting…) and after that?

Here’s the way if works:  Citizens United can buy elections.  Internet sites aren’t going to be allowed to, looks like.  Why?  The money goes to site operators, not the political mafia chieftains and their collections teams.  Morality ain’t in trouble – died long ago.  Obstacles to keep little guys with honest opinions and a hundred bucks to start a website is what this is about.

Well, I can see Fearless Leader taking up the cause and demanding a US Department of Resumes.  Oh, except that might lead to a closer look at people like Al Sharpton.  Damn upstart sites like Smoking gun, huh?

Sure, we can’t close the borders, but hey, we can expand the compunist agenda in other ways, can’t we? Faux participation – that’s the democracy for US.

Give me enough money and I can buy any policy you want. Two or three years for really controversial stuff.

Global Health Surveillance

Say, here’s another goody to consider…this from our Winnipeg news analyst:

Dear Mr. Ure,

One is reassured knowing that the WHO utilized a “dedicated internet search engine” for assistance with the ebola outbreak.

Read More