Oilman2 and I have a kind of gentleman’s bet going on the price of oil.

For now, we agree on cheap oil, but once the general world economy hits the “Ure Discontinuity” as deflation digs in, I think the price of oil will become almost irrelevant.

I’ll leave it to him to ‘splain…

G –

Attached is a graph of WTI crude spot prices from 1970 to present.  I have indicated memorable events on a timeline.

Now, we all know that everything is a business model…so….

The correction was in 2009 – we hit 40 bucks, and then QE1 was released.

Look at the historical price, then note how reality disappeared in the first decade of this millennium. EVERYTHING was used by traders and national oil companies and every business related to oil in order to wrangle ever more dollars out of the system. This is when prices at the gas pump got linked to crude prices as well, via internet and POS terminals everywhere.

My opinion??  This had QE bubble written all over it – hot, loose money looking for more gains.

We corrected back to $40, which is likely the actual workable price if you accede that we hit Peak in 2005. The climb before the Rec/De-pression had China’s hot economy, the Housing Bubble and Financial Deregulation as the cause for the run-up.

The current one is simpler – QE1 hits and then hot, free money goes-a-looking for even hotter returns.

Read More

A few readers believe me to be a saintly type guy:  Works all the time, eats healthy, gets plenty of reset, has the power to leap tall buildings in a single bound.

Mostly, they’re right.

But even the finest intent doesn’t make up for those two times a year I go to the store with Elaine and something….yesterday it was hotdogs – catches my eye and “just gotta have ‘em.”

Not that hotdogs are bad for you, but not that they’re particularly good, either.

They have plenty of salt, some have nitrates and so forth.  The buns have sugar in the dough and they’re really dangerous in terms of calories, fat, and so forth.

But it’s the time of the year when even though I won’t put up with a football game for more than the final 5-minutes of play (that becomes a time machine, in that 5-minutes of play takes 15-minutes on any normal clock), I still get a hankering for the food of the sport.

Sports to me consists of culinary items:  Beer, hotdogs, maybe chips, no peanuts thanks (allergies), and maybe an ice cream sandwich. Deflating balls or hitting balls with sticks is ultimately stupid…only in America could this be turned into billions; we are so effing stupid.

Since I’m trying to eat healthy, I haven’t touched Elaine’s chips.  How a woman can eat chips now and then and remain the same 121 pounds forever is something of a mystery.  Wish I had those genetics.

Panama, out in his freezer keeps the Klondike Bar stash.  Nothing to an old soldier like a good sweet after a long hike…

So with those items off the table, in our Monday resupply mission to town (after watching the MLK Day Parade (didn’t have much choice, it was between us and the store, but it was a nice parade) I broke down and got some Ball Park Franks.

No artificial ingredients, no by-products, and the salt, well, more on that in a minute.

All the way home I was dreaming of them:  It has been the better part of 18-months since my last hotdog binge.

The Secret is Preparation

Having acquired the devices of sin, it was off to the kitchen to prepare the feast.  Called Panama on the intercom:  He was down with one…admirable self-restraint.  I was going for two, although my personal best is six, but that was set some 50-years ago.

Water was boiled, the franks brought up to perfection and the three buns were microwaved (cover on) for exactly 19-seconds.  Moist, but not gooey.

Then came the assembly process that I first learned about at the old King Dome in Seattle.

The “magic” of a hotdog is in being wrapped in foil. 

I don’t know what it is, but if you have a hot bun, a frank hot out of boiling water, and slap ‘em together and wrap them in foil for 3-5 minutes, something happens.

I can’t tell you whether it’s psychological (maybe) or whether it’s that foil is all glittery-like, but whatever the reason, after 3.5 minutes the hotdog is still hot, the bun is even more moist, and there’s been a melding of flavors that just needs mustard to complete.

I’m not bad like this very often…most of the time I eat healthy.  But sometimes, I confess, I’m bad.  Really, really bad.  Worse:  No regrets whatsoever.

I figure a couple of dogs on a national holiday can’t possibly be a bad thing.

Besides, since all the rest of our food, except for the odd pizza, is hand-built natural, the minor load of preservatives I pick up will pickle me, more than anything. 

And that’s a thought to be…er….relished.

Salt Ain’t All Bad

Following Monday’s discussion of blood pressure, a reader  (Bill #526) tossed this in the ring:

You need to get up to date on that subject.  Link below will help.
Debunking The Salt Myth: Add This Seasoning to Food Daily
from Dr. Mercola who knows whereof he speaks.

True stuff.  But I can personally eat high-salt and low-salt (of the same food) and push my BP around 10-points or more.  Seriously.

You body is one of the few chemistry sets you can buy anymore than hasn’t been licensed, restricted, regulated, or outlawed.  So keep notes and run your own experiments.

PQQ

There was an important note from a reader about PQQ:  Not all brands seem to work the same (for him):

Hi George,

Are you feeling the Pqq? I ran out of the Life Extension mitochondrial support brand, and have used the Jarrow (top rate company per my highly trained wife) result? I am very energetic but not recovering from exertion as fast. I will revert to the Life Extension brand.

Also, BP is more an issue for me due to lard, alcohol, and other issues. But I had real scare this Fall when my cardiologist said to buy a top shelf monitor and do 3 months on a protocol.

Read More

A number of readers have asked questions like this one:

I noticed that you posted your BP results…I am presently sitting around 150 over 92 with 4mg of coversill.

May I ask what you did to get it down so nicely?  Brian

I could wax on all day about blood pressure, and I am NOT a doctor, so don’t do anything without talking to your healthcare professional.

Having said that…let me go into the long rap…

Data, Data, Data

The very first truth about blood pressure is that it changes all the time. I decided a couple of years ago when my doc put me on HZTZ that it was time to get serious about the problem.  In order to do that, I needed data.  So I picked up a couple of blood pressure cuffs (click on the link, they’re about $40 bucks).

Then I got to logging my personal blood pressure 4-6 times a day and noticing the changes in diet, nutrition, and vitamins and herbs and what-not that seem to make a difference for me.  Your results will differ.

First thing is weight.  If you are packing around an extra 20 pounds (or more) from ideal body weight, you will likely have higher than optimum blood pressure.  But that’s not true for everyone because I’m chunked up at 220+ and still had a reading this morning of 119/68 pulse 62 – that’s at age 65.9.

Hereditary effects matter greatly, too.  On my mother’s side there’s pure Danish blood and few Danes look anemic.  The Scottish side of me…a bit thinner…Dad was I think 185 at his high pointe, but you can get a decent idea of which side of your family you take after by looking at pictures.

Then consider getting an outfit to actually run your DNA and from that, you can begin to optimize your eating style.

Before you change anything, collect at least a week’s worth of data.  The more, the merrier.

The Diet Part

My DNA turns out to be northern European T-6 haplotype, so it’s less grains and more cold weather veggies because that’s what grows in that part of the world.  So I go very light on flour and breads.  Oh, sure, I will break down and gorge on cottage cheese pancakes, or nutmeg spiced French toast once a week, or so.  But mainly it’s meat and vegetables.

Read More

Just for grins, we re-watched the Tom Clancy thriller “Shadow Recruit” last night because underlying that movie was a very possible scenario that might fit unfortunately well in times like these.

Although the whole plot is more completely revealed (spoiler alert) over on the Wikipedia site here, the main idea was that a major player could collapse the US into a Greater Depression by simply timing a major selling event (of Treasuries) within minutes of a major terrorism attack.

And, given how the 10-year has been doing lately, down to just 1.78 yesterday at the close as measured by the ^TNX, it begins to look like our posted intermediate term outlook could come sooner than later.

Remember, the old low (1.63) set in June 2012 could fall, and taking out that really means the Fed will have to do something – even if it’s wrong.  And I have every confidence…..

Meantime, the price of oil was up a bit, Asia was down more than one percent, but Europe down only marginally, which means they are waiting for key economic data from the US before deciding how to collapse the Euro.

Forbes is wondering what the Swiss know, and we’re not sure why Forbes can’t see lifeboat building when they see it.

Not that they’d planned that, of course.  But just like a test pilot doesn’t intentionally rip the wings off an airplane, the world has never test-flown a purely made-up notional currency backed by nothing but a multilingual chorus of me-too’s.

With classic understatement,econo- princess Chris LeGarde of the IMF suggested “strong headwinds” are facing the global recovery.  The what?  And she said the Swiss negative rate move was a surprised, but sounds like she wouldn’t recognize incipient deflation if it pistol-whipped her.

Ure’s Discontinuity Revisited

In the interest of keeping the Fed and the IMF on the right track, here’s the ultra-short version of where we are in  the Global Economy for those who missed it, including Ms LeGarde:

Say you have a stock with one dollar of earnings.  When prevailing rates are 5%, we see that is about a $20 stock.  When the prevailing rate drops to 1%, then that same dollar of earnings is suddenly supporting a $100 stock price.  And, by the time rates drop to a quarter of one percent…then what happens?

Stock price zooms up to what?  $400-bucks.

With long-term rates dropping since 1981 (chart here for non-believers) we can expect the market to keep zooming ahead as rates fall until the bottom quite literally falls out.  Then you get the second Mother of All Crashes and the stupid will not understand why nonlinear periods occur in markets.

They’ll be off looking for scapegoats (short sellers and hedgers) when the real problem is the numbers when rates drop past the public recognition point.  Which is why another QE may be needed…to pump up prices of commodities, which in turn supports rates which in turn lowers stock values which in turn buys another 2-years.

Simple, huh?  If only William of Ockham had managed a fund.

Say, did I mention the Baltic Dry index is down to 741 this morning?  Not a particularly encouraging sign, is it?

So the whole problem is rate-based.  If you want to save the world you raise rates instead of further lower.

Reason?  The closer you get to the edge of the cliff, the more likely someone will panic, or try to pull off a Clancy-like terrorism followed by panic because the closer you are to the inflection point, the less powder and bonds it would talk.

That’s because even without the Clancy plot, if rates keep failing, the worse it’s going to get until ultimately at the inflection point (where prices collapse in a heap) there is no exogenous force required  – shit just falls.

The problem (and one we might get into for Peoplenomics subscribers tomorrow because we have an answer – though it may not be perfect) is that only market performance over time will resolve whether we are on the final upside of the discontinuity, or, whether we are already past the crescendo and this bobsled isn’t already heading for the first turn.

Stay tuned for more on this exciting match-up, coming soon to markets near you.

But not till next week – we still have options to get through today and the Consumer Price Index which hints at what?

CPI and Inflation

And what?

BANG!  Serious Deflation

Just out is the Cost of Living report.  Ugly…but this is what happens when deflation comes-a-calling…

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.4 percent in December on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today.

Over the last 12 months, the all items index increased 0.8 percent before seasonal adjustment. The gasoline index continued to fall sharply, declining 9.4 percent and leading to the decrease in the seasonally adjusted all items index. The fuel oil index also fell sharply, and the energy index posted its largest one-month decline since December 2008, although the indexes for natural gas and for electricity both increased.

The food index, in contrast, rose 0.3 percent, its largest increase since September. The index for all items less food and energy was unchanged in December, following a 0.2 percent increase in October and a 0.1 percent rise in November. This was only the second time since 2010 that it did not increase.

The shelter index continued to rise, and the index for medical care posted its largest increase since August 2013. However, these increases were offset by declines in a broad array of indexes including apparel, airline fares, used cars and trucks, household furnishings and operations, and new vehicles.

Read More

The is something of a mystery surrounding market action this week. 

Usually, we expect something of a bounce into option expiration, but there are so many forces running contrariwise in this market that it’s worth looking at a list of factors rather than zooming in on one thing or another as a sole cause:

• Deflation is still here, and still very real.  Then 10-year Treasury hit 1.78% yesterday and if you look at the maximum zoom-out over the past 50 years, or so, here, you will see we’re getting mighty darn close to the 1.63% level set in 2012.
• Negative interest rates (typical of deflationary depressions) are driving up the cost of cash, noted a recent Financial Times report.  Meantime, rates around Europe and heading toward zero for “those still standing.”  The Swiss when to a –0.25% rate in mid December to beat the rush.
• The US Velocity of Money calculations refuse to budge significantly off historical lows.

And if this isn’t enough for you, the latest producer print index numbers are just out:

The Producer Price Index for final demand fell 0.3 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices decreased 0.2 percent in November and advanced 0.2 percent in October.

Read More

We haven’t touched on the World of Woo-Woo (WoWW) for a while, but, as one reader noted over in the discussion forums this week (long time reader up in Arkansas) “it’s like the veil is getting thinner…”

Well, it sure seems that way to me.

First, a word of three about dreaming:  I have predictive dreams and “remote viewing” dreams often enough that I don’t  particularly care for them.

There are dozens I’ve experienced over the course of the past 20-years and the ones that “come true” all have aspects of them which make them quite remarkable. 

Likely, the best documented was the Horizon Offshore oil fire a number of years back – something I wrote up 18-hours before the actual event under the headline “Irwin Allen’s dream” after Hollywood’s “Master of Disaster.”

The dream wasn’t perfect – in that there was supposedly (by the dream) a murder element to things and something to do with a cook/kitchen.  Never saw anything come out about that.

It’s also one of the reasons that I started a project back when called The National Dream Center because enough people have sufficient dream content about the future, that the project seemed more than worthy of at least starting.

Since March of last year, the very serious Chris McCleary has picked up the project, expanded it, and is using some of of www.nostracodeus.com code to help sort out word occurrences and such and if you haven’t read the Dream Center outlooks for 2015, they can be found over here.

Lots of foreplay…on to the dream.

First of all, it was in my favorite dream state:  I had been awakened by my alarm clock at exactly 4 AM, but there was something telling me “go back to sleep” which I promptly did and for exactly one hour.  (It means this morning’s column is written in a bit of a rush.)

The first off thing about the dream is was not exactly a commentary, but more a “showing me” something about an area to the east and a bit north of San Francisco.  There were two time references in it:  One was for an approaching weekend.  The other was about April.

First, though, a word about who was giving me the narrative/view of things:  It happened to be an old news colleague with whom I’ve worked in Seattle radio.  From there, he went on to become a famous newscaster in the SF Bay area for something like five years, and then his career took him to Los Angeles and a famous FM morning show there.

What makes this is odd stand-out dream was that I haven’t thought about him in YEARS.  In fact, when he later in life moved back to the Seattle area, he called up and told me he’d bought a home in a really cool area and let’s get together kind of thing.

Turns out, the house he bought was literally across the green belt from the home I’d purchased in 1973 and his was four houses further down the hill.

And in fact, the last time I’d seen him that I could remember, he’d some how come up with a Mason jar of really good moonshine (the real stuff) and a buddy of ours (*then news director of a/the big news station in San Diego) came over and we’d spent the afternoon chit-chatting about news stories.

It was typical stuff – lots of “gallows/newsroom humor” punctuated by moonshine sipping, and so on.

He passed away something like 20 years back and haven’t thought about him in years, so it was odd in this dream that a personality of the news business was present (unseen, soft of off-stage doing the discussion) and that was notable, I think.

As to the earthquake part, there are actually two.  One (and they are possibly a pairs) are in the 5.3 and 5.6 category and they connect with “Thursday” or “Friday” and after this, people who are involved will be going back to the city (this happens east of San Francisco).

One of the returning news crews will be stopping (on the way back to the city) to have something that’s like an apple fritter or apple scone – as a place somewhere in the area that is famous for those.

There were other oddities about the story too:  Lot’s of dog references, a kind of map of a state or national park area (it was shown as a kind of green glass layer under the area.

All of which sounds like a pretty ho-hum news item.  There was some snow on the hills, and a ski area up a ways, and after peaking at the ski area, there’s a small hydro project somewhere on the eastern slopes.

But the single most important takeaway was this:  “The Big Quake is in April and is a 9+”

There were no indications of where the 9+ would be – and not even any indications as to what year it would be.

What I do know, from having lots of this dreams,. is that the ones that “hit” seem to happen less than a week before the actual events, and often only 24-hours, or so. 

As to where, I got the impression it would be just before starting up into the hills, was south of I-80,  but location was fuzzy at best.  The “green area” (with the glass under it) was basically due east of San Francisco, then up toward Reno (and north of there) and then coming back down toward the north end of the Bay.

That’s about all I  can tell you, except that the dog part somehow involved the UN or UN something having to do with dogs and that the damage from the precursor quake’s would be minimal.  B-roll kind of news story.

Normally, I’m not sure I’d even mention this except that when I got up and started to look at the USGS quake reports from overnight, there’s a whole slug of them continuing in the area just into California from the Oregon side east of Klamath Falls and Lakeview, Oregon.

Although this is extrapolation from here forward, if you go to the area where the quake swarm is happening now up in NorCal, and then draw a line to the next 5.3-5.6 quake that happens in the state sometimes (at least in the dream) before this weekend, then wherever that line goes when it extends out toward the coast/San Andreas, is where the bigger quake, coming in April may be.

All kinds of disclaimers follow here:  Odds of the small quakes (the 5’s) are small.

Odds of getting April massive quake, even smaller.

But there has been a tendency of big quakes to happen in that spring equinox window:  quakes like Fukushima and the Alaska Good Friday quake, come to mind.

So I thought I’d share as it’s one of the strangest damn dreams in a while.

One other personal note:  It seems like this kind of dream shows up when I have taken myself off flour / gluten products for a day, or two.  Maybe (and this is an odd thought) maybe dreams with precognitive content depend on a person’s body and “field” being relatively pure.  No alcohol last night, either.  Hmmm…

If that’s the case, the idea of periodic fasting and low inflammation foods and all that “purification of body” before performing real magical stuff may not be all BS after all.

Remind me to pick up another pound of salt to put in a circle, next time I go to town.  Ever wonder if demons are more repulsed by sea salt or iodized?

Remember, all this dream stuff may, or may not work.  And as to the April part, perhaps it’s just my mind going to what’s next after the big March in Paris.  April would follow March, right?

UPDATE:  This quake near Portola would fit except it needs to be much bigger…so another one (or two) larger to follow?

Something Else Going On?

Meantime, from out trusty news analyst up in Winnipeg:

Dear Mr.

Read More