An Economist Tells The Truth

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Here is an NPR interview with Jeff Rubin an economist. Finally a mainstream news story that tells it like it is. I can't wait to read this book.

Credit Collapse The Next Bubble?

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In spite of consumer confidence numbers being up, one million card holders accounts are being closed by Saturday. Here is an excerpt.

Advanta is freezing the accounts of nearly one million credit-card holders, most of them small businesses and self-employed professionals, effective next Saturday. The company said it is trying to cut its losses and preserve capital.

An email sent to Advanta clients said:

Your Advanta Business Card account is funded by an independent trust which owns the balances you owe on your account and provides funding for new transactions. We expect the trust to stop funding activity on our accounts. The trust also restricts our flexibility to fund activity on your account. Unfortunately, as a result, effective May 30th all Advanta Business Credit Card accounts, including your account, will be closed.

Read more: http://www.consumeraffairs.com/news04/2009/05/advanta.html#ixzz0GdquIJVG&B

Waterboarding.org

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I must confess that I am proud of Obama for making a stand against torture, and particularly waterboarding. I also must confess that I do not quite understand the methodology of waterboarding. Fortunately these days there is a website for everything. Here is the link. You decide if it is torture.

Blogging From Circleville

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For the next few days I will be blogging from Circleville, Ohio. Circleville is the home of the Circleville Pumpkin Festival.

The Mural:
"A downtown building mural project in Circleville is by world-famous artist and local native, Eric Henn. Henn, a graduate of Logan Elm High School, has developed an international reputation for his large-scale art.

His murals, which are painted on the outside walls of buildings and water towers, have appeared on the PBS special "Super Murals," and have been the focus of feature stories on CNN and the Discovery Channel. Cities where Henn’s murals are located include Chillicothe, Columbus, Franklin and Germantown, Ohio, Hershey, Pennsylvania, and Detroit."
www.wchiam.com/cc-common/mainheadlines3.html?feed=106759&...

The Road

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Here is a movie I am going to see. Movies are not usually as good as the book. We'll see.

The Sinking Titanic - an interview with Michael Ruppert

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Michael C. Ruppert has written a new book called A Presidential Energy Policy. Here is an recent article he wrote about Peak Oil and Economic Collapse.

Happy Memorial Day

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Mandatory Camera Running In All Police Cars

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This YouTube makes it pretty clear that having cameras in Police vehicles is a good idea.

Spring Cleaning

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No more frost! It is officially time to do spring Cleaning. I don't like to share my space with things that crawl. So there will be no official blog today. I will be busy vacuuming away spiders, chasing cobwebs, mopping floors, washing windows, and general maintenance/sanity tasks. Blog post as usual tomorrow.

The End Of The Information Age

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I follow a weekly blog by John Michael Greer, author of The Long Decent. His most recent blog was about the Future of Information Age. He was pointing at how we are making mistakes based on an improbable future of the information highway. His post reminded me of my sisters recent catastrophe. She called me a few days ago. She had burnt out her water pump. So she had no water except from a rain barrel until that water pump was fixed. Even with a new pump she will not have water if the power goes out. then if the power goes out! Virtually everything we have in our lives is reliant on power. We take it for granted until we lose it. My sister is ready to add another rain barrel. We are both going to learn how to filter the water making it safe to drink (most roofs have unsafe ingredients). I have very little faith that our current power grid will always be there as it is totally dependent on cheap abundant energy. Get your rain barrel in place before the power grid goes down. Buy local Got Rain?

P-38 and P-51

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I bought a P-38 can opener from our local army surplus store a year ago to put with our preps. Yesterday I attended my first gun show and purchased a P-51 can opener for larger cans. Here is a YouTube on how to use them.

The Wood Brothers

Another Duo, Two Brothers!

WolframAlpha

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Check out the latest data search engine WolframAlpha.

Earle and Townes (Poncho and Lefty)

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Steve Earle has a new album out called Townes. All Towne Van Zandt songs.

Worst Case Scenario

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This article is from a blog I follow called Seeking Alpha.
Since the economy began sliding downhill in late 2007, mainstream economic and market experts have consistently erred on the sunny side.

As late as June 2008, mainstream consensus held that the U.S. was heading for a “soft landing” and would avoid recession. Several months later, the slump was acknowledged to have started in January 2008, but we were supposed to see renewed growth by mid-2009, with unemployment peaking in the eight-to-nine percent range. A quick “shovel-ready” stimulus bag was supposed to set us back on the road to prosperity.

In January, recovery projections were pushed forward to late 2009. Today, the consensus is for a mid-2010 recovery, with unemployment peaking at just over 10 percent. Clearly, the mainstream has struggled to catch up to reality for well over one year. What are the chances that they finally have it right this time?

Moreover, the mainstream continues to see what is going on as a plain-vanilla recession that will be quelled with some on-the-fly monetary and fiscal tinkering. Washington, we are told, will pull us out of this slump—as soon as the masses can be enticed back to the shopping malls. Then things will return to how they were before. But what if the experts and politicians are wrong not only on their ever-changing recovery timeline, but also on the nature—nay, the very existence—of a recovery?

America’s reigning political-economic ideology has demonstrably failed. Given that its government is obviously fumbling along without a clue, its foreign and domestic credit is tapped out, and its 300 million people are discovering that their hopes for continuous material improvement will never be met, could the U.S. be headed the way of the USSR?

Instead of a recovery as the mainstream envisions it, what if America permanently bankrupts, impoverishes, and marginalizes itself? What if its cherished institutions fail across the board? For example, what happens when the police realize that their under-funded pension plans cannot support a decent retirement? Will they stay honest, or will they opt to survive by any means necessary? These are questions that the mainstream does not even begin to contemplate.

In the interests of providing you with an alternate vision—something outside the mainstream—below are ten predictions for America through the year 2012. This is not boilerplate doom-saying. Rather, I am laying out in highly specific terms what will happen over the next three-odd years. Others have thrown around the term “Depression”, but I am going to tell you precisely what it means for you, your investments, and your community.

When these predictions come true, I expect to be rewarded with a seven-figure consulting gig, a book contract, or a high-level position in whatever administration succeeds the doomed Obama team—that is, if anyone succeeds it at all.

Prediction one. The twenty-five-year equities bubble pops in 2009. U.S. and foreign equities markets will stop treading water and realign with economic reality. Stock prices will cease to reflect the “greater fool” mentality and will return to being a function of dividend yields, which have long been miserable. The S&P 500 will sink below 500. In a bid to stem the panic, the government will enforce periodic “stock market holidays”, and will vastly expand the scope of its short-selling prohibitions—eventually banning short-selling altogether.

Prediction two. With public pension systems and tens of millions of 401k holders virtually wiped out—and with the Baby Boomers retiring en masse—there will be tremendous pressure on the government to get into the stock market in order to bid up prices.

Therefore, sometime in 2010, the Federal Reserve will create and loan out hundreds of billions of fresh dollars to the usual well-connected suspects, instructing them to buy up stocks on the public’s behalf. This scheme will have a fancy but meaningless name—something like the “Taxpayer Assurance Equities Facility”. It will have no effect other than to serve as buyer of last resort for capitulating smart-money types who want to get out of stocks entirely.

Prediction three. Millions of new retirees—including white-collar people with high expectations for a Golden Retirement—will be left virtually penniless. Thousands will starve or freeze to death in their own homes. Hundreds of thousands will find themselves evicted and homeless, or will have to move in with their less-than-enthusiastic children. Already strained by the rising tide of the working-age unemployed, state and local welfare services will be overwhelmed, and by 2012 will have largely collapsed and ceased to function in many parts of the country.

Prediction four. “Quantitative easing” will fail to restart previous patterns of lending and consumption. As the government sends out additional “rebate” checks and takes ever-more drastic measures to force banks to lend, hyperinflation could take hold. However, comprehensive debt relief via a devaluation of the dollar is even more likely. This would entail the government issuing one “new” dollar for some greater number of “old” dollars—thus reducing both debts and savings simultaneously. This would make for a clean slate a la Fight Club.

As there are many more debtors than savers in the U.S., the vast majority would support devaluation. The Chinese and other foreign holders of our bonds would be screaming mad, but unable to do anything. Every country that has not found a way out of dollar-denominated reserve assets by 2012 will see its reserves eliminated.

Prediction five. The government will stop pretending that it can finance continuous multi-trillion-dollar deficits on the private market. By late 2010, the sole buyers of new U.S. Treasury and agency bonds will be the Federal Reserve and a few derelict financial institutions under government control. This may or may not lead to hyperinflation. (See prediction four).

Prediction six. As the need for financial industry paper-pushers declines and people have less money to spend on lawyers and Starbucks (SBUX), unemployment will rise until the private sector has eliminated all of its excess capacity and superfluous or socially needless jobs. The government’s narrow unemployment figure (U3) will rise into the high teens by late 2010. The government’s broader unemployment figure (U6) will cease to be reported when it reaches 25 percent—it will simply be too embarrassing. Ultimately, one in three work-eligible Americans will be unemployed, underemployed, or never-employed (e.g. college grads permanently unable to find suitable work).

Prediction seven. With their pension dreams squashed, and their salaries frozen or cut, police and other local government workers will turn to wholesale corruption in order to survive. America’s ideal of honest, courteous, and impartial cops, teachers, and small-time local functionaries will have come to an end.

Prediction eight. Commercial overcapacity will strike with a vengeance. By 2012, thousands of enclosed malls, strip malls, unfinished residential developments, motels, truck stops, distribution centers, middle-of-nowhere resorts and casinos, and small-city airports across America will turn into dilapidated, unwanted, and dangerous ghost towns. With no economic incentive for their maintenance or repair, they will crumble into overgrown, plywood-and-sheet-rock ruins.

Prediction nine. By the end of 2010, tens of millions of households will have fallen behind on their mortgages or stopped paying altogether. Many banks will be unable to process the massive volume of foreclosure paperwork, much less actually seize and resell the homes.

Devaluation (as mentioned in prediction four) could ease the situation for those mortgage holders still afloat, but it would also eliminate any incentive for most banks to stay in the mortgage business. In any case, the housing market in many parts of the country will lock up completely—nothing bought or sold.

With virtually no loans being made, even the government will finally acknowledge that most banks are fundamentally insolvent. A general bank run will only be averted through a roughly one trillion-dollar recapitalization of the FDIC, courtesy of new money from the Federal Reserve.

Prediction ten. As an economy is never independent of the society within which it functions, the next few paragraphs will focus on social and political factors. These factors will have as much of an impact on market and consumer confidence as any developments in the financial sector.

Whether rightly or not, President Obama, having come to power at the dawn of this crisis, will be blamed for it by over 50 percent of the population. He will be a one-term president. In response to his perceived socialization of America, there will be a swarm of secessionist and extremist activity, much of it violent. Militias and armed sects will be more prominent than in the early 1990s. Stand-off dramas, violent score-settlings, and going-out-with-a-bang attacks by laid-off workers and bankrupted investors—already a national plague—will become an everyday occurrence.

For both economic and social reasons, millions of immigrants and guest workers will return to their home countries, taking their assets and skills with them. The flow of skilled immigrants will slow to a trickle. Birth rates will plummet as families struggle with uncertainty and reduced (or no) income.

Property crime will explode as citizens bitter over their own shattered dreams attempt to comfort themselves by taking what is not theirs. Mutinies and desertions will proliferate in an increasingly demoralized, over-stretched military, especially when states can no longer provide the educational and other benefits promised to their National Guard troops.

There will be widespread tax collection issues, and a huge backlash against Federal and state bureaucrats who demand three-percent annual pay raises while private sector wages remain frozen or worse. In short, the “Tea Parties” of tomorrow will likely not be so restrained.

Finally, between now and 2012, we are likely to see another earth-shaking national embarrassment on the scale of the 9/11 attacks or Hurricane Katrina and its aftermath. This will demonstrate conclusively to all Americans that their government, even under a savior-figure like Obama, cannot, in fact, save them.

By 2012, there will be a general feeling that the nation is in immediate danger of blowing up or coming apart at the seams. This fear will be justified, given that the U.S. has always been held together by the promise of a continuously rising material standard of living—the famous “pursuit of happiness”—rather than any ethnic or religious ties. If that goes, so could everything else. We were lucky in the 1930s—we may not be so lucky again.

Dead Malls Dot Com

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The whole real estate market is now going into collapse. As a result there are several malls closing. I really enjoy the website deadmalls.com. Shopping malls going extinct is a good thing I think. We can start supporting our local mom and pop stores that were pretty much run out of town by the big box stores.

The Story Of Stuff Makes The New York Times!

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One of the most powerful videos that I have ever seen is The Story Of Stuff. It is 20 minutes long and goes right to the point of consumerism. Usually the films and documentaries that I admire never make headlines. It appears that The Story Of Stuff is popular with teachers who find that environmental issues are not prominent or covered in todays textbooks. Good job Annie. Keep up the good work. Here is the link for the whole article from the times.

Neil's Garage

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Check out Neil Young's garage.

CODEX (they don't want you to know about them)

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There are nine parts to this lecture. This is part One.

Computer Humor

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House Of Trash

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Here is a local house made out of recycled materials.

FKN NEWZ

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Good Riddance

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Yesterday it was reported that The Boston Globe is in financial trouble and may fold. While I don't like to see anyone lose their job, I do believe that we need to stop cutting down all the trees on the earth! Losing a few newspapers will help save the planet.

Happy Cinco de Mayo

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May you have a safe Holiday.

My Favorite Story So Far

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Banks can now be fined and held responsible for blighted foreclosed properties! Check out the story here!

Stranger than fiction

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I have been saving this graphic for the appropriate story.

The People For The Ethical Treatment Of Animals (PETA) have chosen Michael Vick as their spokesperson. Hopefully that will be the end of their influence. Perhaps he can tell them how to efficiently dispose of all the animals they kill every year. Certainly a match made in hell. Please don't give them one red cent!

How Frightened Should We Be

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Once again I am pulled into a graphic illustration from The Economist.

Happy May Day (Beltane)

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From Wikipedia
In Irish mythology, the beginning of the summer season for the Tuatha Dé Danann and the Milesians started at Bealtaine. Great bonfires would mark a time of purification and transition, heralding in the season in the hope of a good harvest later in the year, and were accompanied with ritual acts to protect the people from any harm by Otherworldly spirits, such as the Aos Sí. Like the festival of Samhain, opposite Beltane on October 31 Beltane was also a time when the Otherworld was seen as particularly close at hand. Early Gaelic sources from around the 10th century state that the druids of the community would create a need-fire on top of a hill on this day and drive the village's cattle through the fires to purify them and bring luck (Eadar dà theine Bhealltainn in Scottish Gaelic, 'Between two fires of Beltane'). This term is also found in Irish and is used as a turn of phrase to describe a situation which is difficult to escape from. In Scotland, boughs of juniper were sometimes thrown on the fires to add an additional element of purification and blessing to the smoke. People would also pass between the two fires to purify themselves. This was echoed throughout history after Christianization, with lay people instead of Druid priests creating the need-fire. The festival persisted widely up until the 1950s, and in some places the celebration of Beltane continues today.
In our circle we danced the Maypole.