Replaying 1929: Business, Financial, and earth change news

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Lame Duck, Oiled

An urgent email from my commodities broker JB about 11 PM last night titled 'Heads Up!" got my attention.  It was a link to Jim Sinclair's excellent web site that came out just a few minutes earlier and it read in part...

"I suggest that you cancel all sell orders at any price in precious metals immediately so that no orders exist when Asia opens."

In case you didn't notice the Friday action in the precious metals, gold was up more than $20 an ounce on the spot market and silver was up 29¢.  Silver is now just a few cents under $17 and gold is back over the battle line at $900.  So what's going on?

 

We have to look at oil; it is, after all, the lifeblood of the modern world.  Everything is driven by oil in some form, or another.

 

In the Friday commodity action, oil bumped up very close to $128 a barrel (42 gallons, remember) and this couldn't come at a worse time for American families thinking about vacation plans for the summer.  Gasoline and diesel are both over $4/gallon in many locations.  Even here in 'oil-rich' East Texas, Elaine was shocked when she went into town this week and had to fill up our relatively high mileage farm truck.   "I just stopped when it got to $80!" she reported. 

 

I reminded her of Pappy's old saying: "It doesn't cost any more to run them full." Besides, with the price of oil going up so fast and furious, the gasoline you buy now might be one of your all-time great investments. Who knows what the prices will be like in a week?   I just don't see it getting any cheaper and that gets to the heart of this morning's tale.

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The financial press is full of reports about the George Bush Middle East trip.  He went to Saudi Arabia (after speaking in Israel Thursday) and essentially begged the Saudi Royals to cut the US a little slack:  Either lower prices a bit or raise production - and it would be darned nice if they'd do both.

 

The response Bush got was not what the White House or the republicorp were looking for:  "Saudis see no reason to raise oil production now" proclaimed an AP headline.  So much for begging.

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Behind the scenes, some sources in the oil industry are hinting that it may be more correct to says that the Saudis can't raise production even if they wanted to as a gesture toward the US.  Why?  Peak Oil.  Recall that Peak Oil doesn't mean the world is out of oil, it simply means that we are not able to get it out of the ground any faster than we did a year or two back.  There hasn't been enough exploration, new equipment brought on line and so forth. 

 

Hence, Peak Oil results from aging equipment meeting up with oil fields that are, in many cases, well past their peak.  I've recommended you read oil financier Matt Simmons PowerPoint's every time they come out - it's one way to see what's being talked about at the boardroom level of the oil industry.

 

In his latest report "Oil and Gas "Rust" - An Evil Worse Than Depletion", Simmons lays out the inevitable result when Peak Oil meets aging equipment.  To borrow a couple of his bullet points from slide 26 "Declining Oilfields Accelerate Rust":

􀂄 As oil declines, brine generally takes its place.

􀂄 Sweet light oil turns into sour heavy oil.

􀂄 Declining oil basins rarely have sub-surface or surface facilities replaced (why bother?)

􀂄 All these factors accelerate the encroaching corrosion and rust.

On the following slide #27, a worry-inducing presentation gets downright scary as Simmons says that based on April 2008 figures from the Energy Information Administration, world oil production peaked in 2005!

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The Bushco neocons, republicorps, and corpgov have had a pretty good run during the 28 years that a Bush or Clinton has been present in the #1 or #2 spot in the White House, while the religious right was taken for a ride by political hacks who could "talk the talk, but not walk the walk".  Managing to create a series of serial bubbles in financial instruments, the internet, housing, and by trumping up a war in Iraq under false pretenses of "weapons of mass destruction", they have pretty well run out of ways to keep the game going. 

 

Save, of course, going to the Middle East and begging for a little mercy.

 

A couple of decades of being a reporter of one form or another has left me wondering "When does a political office holder really become a lame duck?"

 

If, as our predictive linguistics friends expect, the earthquake in China set a 7-10 day temporal marker before the next round of US Dollar Collapsing welling up in global consciousness, then next week we should see while acceleration of gold and silver to the upside along with an answer to the question "When does lame duck status occur?"

 

It's possible that it just happened.

 

Collapse of the Paradigms

We're still a long ways from the emergence in most people's lives of the "word for the year" [transformation] that will sum up how the world changes in 2009, but already we can see some of the paradigms beginning to teeter.

 

Columnist Peggy Noonan writes in the Wall Street Journal this week about the falling fortunes of the republican party (the republicorps around here) and calls it the "Pity Party".

 

The concept of 'blind obedience' and 'following orders without questioning them' has come to the fore with solider Matthis Chiroux refusing to serve in the "illegal Iraq war".

 

And, on the financial front, the Federal Reserve's direct loans to banks in trouble has climbed to a record this week.

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Against this backdrop of news events, a thoughtful person could sit back, gaze into space and reasonably ask "Where would a planet in this kind of condition likely end up?" 

I don't know about you, but the answers I'm coming up with make me want to "go spquirrel".  Collect those things that will allow us to provide for loved ones no matter what the next chapter brings, and at a minimum we know it will be some kind of 'transformation'.  The only open issue is "How much pain/discomfort/ and dislocation will accompany that?"

 

Damn Dams and Water

It was only a week ago that we were warning of Wedding Quake - and sure enough, the Chinese earthquake certainly pushed the Jenna Bush wedding off the news channels in short order as the scope of damage became obvious.  This weekend, there are reports that bvesides a death toll that could top 50,000, "Thousands of Chinese quake victims flee possible flooding" amid concerns that dams in the region may burst.

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The predictive linguistics hold that some kind of a global coastal event is due next spring (March/April 2009) so we have to wonder if something like a catastrophic bursting of the Three Gorges Dam would qualify?  It certainly might raise sea levels globally a bit, but would that be enough to qualify linguistically?

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You'll be pleased to know that your weekends in the future will be a bit longer.  Seems that as global warming raises the ocean's levels, it slows down rotation of the earth every so slightly. But before you start the party, remember that it also makes Mondays longer, too.

 

Terra Bits

The weather this weekend is set to warm up - record temps are due in the West -- causing some concern among our friends that there will be only two seasons in the future.  Long cold winters and long hot/dry summers.

 

And what do you suppose happens where the hot season collides with remnants of the cold season?  Tornados:

 

What we forecast back in January to occur in April seems to be spot on.  From our Coast To Coast 2008 predictions posted on January 2nd of this yea for April 2008:

"Natural Disaster: We get high winds/damaging rains over wide enough area to feed another modelspace meme: Diaspora (population in forced relocation). Incredible tornado season with heavy rains or out of season hurricane, that kind of thing and a lack of government response."

That only leaves me wondering whether the veterans group taking over the National Archives building in Washington a while back was "it" for the veterans taking over a public monument, or whether it was a temporal prequel with maybe something else to happen later in the month; say around Memorial Day weekend?  Such is the fuzziness of virtual time machines.

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Maybe we'll all be saved from Al Gore's over-hyped Global Warming by volcanic ash.  There's new rumblings in Chile's volcano district this week.  The Kilauea volcano has prompted a smog alert in Hawaii.  Volcanoes on the Kamchatka Peninsula (Siberia) are pushing ash a couple of miles high (albeit ignored by the global-warming crazed MSM). And Sicily's Mount Etna continues to spout lava.

 

Farm Fight

The White House is making the usual blustering noises about the new Farm Bill passed by the Senate.  it would increase subsidies to farmers and the WH bluster is that in a time of soaring commodity prices, farmers shouldn't get a boost in supports.

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I'm a goat rancher (in the herd-building process with 11 animals now) and I have to tell you the White House and Bushco simply don't get it.  Agricultural input costs are doing up dramatically!  The goat feed that I was buying last year for $8.50 a bag had already gone up to $10 this year, and we just got word in the past week that the next shipment of feed will be going up to $11.50 a bag.

 

That's a 35.3% increase in my feed costs in less than a year!  It's not like goat herders are the Lone Ranger, either.  The folks who raise cattle, plant row crops - we're all feeling the bite.  So when the WH says no to supports, are they trying to dry up food production - which will in turn drive prices even higher from where they are now?

 

This is typical of the kind of half-think that comes out of Washington, as I see it.  Although I still make enough money helping clients build profitable businesses that I haven't looked at support programs -- yet.

 

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Coping:  OOPS!@@#$%^   Transformation - Not "Transition"

I should not write in a hurry, nor early in the morning, it seems.  The word which I told you yesterday was "transition" for 2009 is not that word at all.  A note from chief time monk Cliff explains:

"it is 'transformation' which is the label for 2009. Not transition. Different contexts entirely. We are currently in the transition/manifestation, and will be deeply [transformed] by end of 2009. Transition implies that one foot is still in the current state, and other is stepping forward. The transformation word means that all connections to the current/past situation have been severed, and both feet are firmly in the new state of being...."

Yeah, I knew that...and I'd offer as an excuse only a lack of sleep (or more likely a lack of coffee...) for snoozing through Friday's proof-reading.  If the truth were know, there's little time for proof-reading around here  and the fact the site gets done most days is a free-standing miracle in its own right.  But duly noted and corrected.

 

Coincidence

A reader asks:

"With all the talk about "Dambusters," is it a coincidence that "Force 10 from Navaronne" was the AMC movie this evening?"

Yes.  To draw a wider conclusion would be like suspecting that there's a link between me wearing a blue shirt on the same day there's blue in the sky - one of those 'bound to happen things."

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Send snip and save ideas/comments and letters to george@ure.net

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Around the Ranch: Radios

I will have my ham radio gear fired up on 3860 KHz (LSB) this morning at 8 AM sharp if anyone wants to talk with AC7X, give me a call.

 

Otherwise, tons to do - and a good breakfast awaits...

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My main internet pipe is almost back up - but another radio is on the way.  The one that was installed by the broadband crew on Friday isn't delivering a full 1 mb downlink speed.  In testing overnight, the uplink speed hit as high as 5 mb thought - so hopefully we can get that set up to be a little more symmetric...

 

If you ever want to test your up and download speeds click over to http://www.speakeasy.net/speedtest/ and try looping back through several different servers...

 

Peoplenomics.com 

13 Acres and Independence Part 6: Shops, Tools, and Makings

Next week, Peoplenomics will be into it's economic groove with a survey of ways to get rich in theses times. But what will life be like on the other side of an economic calamity? While we're waiting to find out this week's report is a short "quickie overview" of basic tools that may come to play an important role in your life, even if you never thought of yourself as "handy". Hard times might make being "handy" a very useful thing indeed, as the people in the Southeast found out this weekend as tornadoes came calling. Part of our 13 Acres and Independence project, a short chapter on the basics of how to make almost anything and under almost any conditions seems a useful thing indeed. If you were too busy learning computer science, accounting, or day trading skills to take the industrial arts courses (especially wood shop and metal shop), here's a 'quick start' I hope you'll never need...

 

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Spread the Word

UrbanSurvival has a very interesting business model - one that depends on growth.  So even if you don't subscribe to our premium newsletter at www.peoplenomics.com, please tell everyone you know about this site.  The more this site grows, the more everything grows and the more content there will be on the free site...  Click here to send 'em an invite...  Thank you!

 

Better Living on Less Dough

There are lots of ways to save money on food, shelter, transportation, and such.  It just takes a little reading and one source of good ideas is  our handy ebook "How to Live on $10,000 a year or less.  Still just $10.

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

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I promised Elaine that I would unload some of my equipment, so if you're looking for ham gear, especially the older tube-type (EMP resistant) type, send me a note and I will send out the list of what I'm selling off when I get it together.    Click here to  Put Me On Ham Gear List

 

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Friday May 16, 2008

The Middle East Simmers

The report today "Bin Laden: Palestinian cause fuels holy war" is not surprising to anyone who has a pulse in these times. Nor is the headline "Bin Laden call targets Israel".

 

George Bush was in Israel this week for celebrations of the 60th anniversary of the founding of the country, and a speech to their legislative body.  In the wake of the trip, Israel says the "US sees need for 'tangible action' on Iran.  From Israel, Bush is off to Saudi oil talks that will focus on the two P's in oil: Price and production.

 

Meantime, Iran has continued its belligerence.  I mean besides leading the efforts to get neighboring Arab countries to reprice oil sales in something other than US dollars (namely, Euros), the headline "Iranian defense minister: Israel too weak to attack" is further evidence of a serious miscalculation by Iran's leadership.

 

While Israel I think has only once admitted to having nuclear weapons, my personal 'best guess' is they probably have about 300 in their inventory now, and that's before buying or borrowing from the US.  What Iran doesn't seem to believe is that first use is an option on the table for the West because any fallout from use of a bunker-buster could be partially shielded by Western claims that any radiation release was from targeted weapons programs, not first use.  And that kind of debate would be even more fierce than the one over what the real story behind 9/11 - and about equally conclusive.

 

Looking ahead, I expect that we will see a return of "war premium" into the markets and a resumption of the dollar's decline before the end of next week, which should set the stage for a violent commodity resurgence.  This morning, I note that at press time, gold has been perking up a bit and oil is back over $125.

 

If indeed we hit the time monk's return of dollar woes in a window 7-10 days after the big China quake we forecast last Friday, then by this time next week, the dollar's resumption of a long downward slide should be apparent.  With that will come more economic pressure on the West and that sets up an attack on Iran by late summer (if not before) and would leave the time monk's forecast of a mid-late August revolution in Pakistan on the table as what might be considered an attack on the West's flank.  Oh, and a handy source of nukes and missile technology, too.

 

The Runs: Marketing

Meantime, G.W.'s remarks about 'appeasement' apparently directed by presidential hopeful Barack Obama, has set off a firestorm of controversy. 

 

This left Hillary out of the fray, so she jumped in to criticize Bush's remarks, thereby scoring some ink in places like the Wall St. Journal's site.

 

The thoughtful person, with a little broader perspective, would likely marvel at how well the PowersThatBe are orchestrating these 'emotional hot buttons' of the American Public to keep us from realizing en mass what there is not alternative to the corpgov slate.  And the  MSM Blogs headline things like "Ron Paul loses worse than even Obama in West Virginia".

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The power of the MSM continuers to deteriorate along with falling ratings.  Nowhere could it be more clear than as the "Senate voted to roll back media ownership rule."  In other words, media concentration - a hallmark of the Powell days at the FCC - is in trouble.  Not a Big move, but a move toward broader discussion and away from the previous media concentration of power track.

 

Numbers, Numbers & Housing

While the Middle East continues to swirl around like a bad stew on a low boil, the economic situation in the heartland of America is not improving fast enough to bring relief to the pressured middle class.  "Metro foreclosures show no sign of slowing" in the Atlanta Journal-Constitution summarizes things.

 

This trend, reports USA Today, has led to "Cities sue home lenders" over the skyrocketing foreclosure rates.  The Triangle Business Journal up in Wisconsin says foreclosures are up 40% and it's much the same in broad areas of the country.

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The reality of foreclosures aside, the Housing Starts report this morning was up more than forecast and that led to a short pop in the US dollar.

 

The foreclosures and the starts being up is not as contradictory as you might otherwise think.  The increase was in apartment starts - meaning people who will go back to renting instead of flipping to own.  Single family starts were down to a 17-year low.

 

50K Quake Dead?

As more than 400 dams are being inspected and repaired on an emergency basis in China, the death toll from the quake is edging toward the 50-thousand mark.

 

Wry Universe: Dams, Redux

It's often curious to see how concepts pop out of the archetypes as rhymes with historical events as we read the headlines.  For example, when reading the China dams story (above), my eyes were drawn to a headline about how the "WWII Dambusters raid" was being recalled on this the 65th anniversary of the bombing.

 

So, if you are keeping precise track of such things, write down in your 'news grand grimoire' and cyclical archetypes cookbook that if there are any humans left in 2073 (e.g. 65 years from now), they should be watching out for dam stories...

 

H'Arken

In our 'dots to connect' pile this morning we are trying to fit the Fox headline "German archeologist on trail of Ark of the Covenant" with this older book review on the American Mason web site "Fabulous Kingdom: The Exploration of the Arctic" 

 

I don't know why, but a scaled up version of "National Treasure" comes to mind with something other than the Charlotte and maybe to the extreme south rather than extreme north? Ponders....

 

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Coping:  The 2009 Word of the Year

I don't suppose it will hurt to let the www.halfpasthuman.com "word that describes the year' for 2009 out of the bag - a few people have guessed at the word and it should come as no surprise when I tell you what it is:

 

TRANSFORMATION

 

So, if you want one clue about the future - how to plan, what to expect and so forth, just remember that word.

 

OK, what kind of transformation?  Ah...

 

If you're a long-time reader of this site, or of the premium newsletter I publish called Peoplenomics, you won't need to guess.  Just a scan of  Peoplenomics topics should give you some ideas.  Here are a few:

• 04/20/2008 Double Issue: Waves and Housing - more downside to come and a nuclear planner's personal planning approach

• 1/27/2008: Retooling Higher Ed - where we ask "If data is getting cheaper, why is pricing of education going up?" And alternative is offered

• 11/12/2007 Kiss Off 13,000 - but just for now. Special Update

• 07/15/2007 Conspicuous Deconsumption. Not to pick on Phoenix, but if we get an oil embargo, how would life be without A/C?

• 06/25/2006: The Coming Protein Cost Explosion

 

So if you asked me what kind of transitions are likely ahead in 2009, I'd answer that just about everything is going to change - so get ready for a ton of transforming into whatever life is supposed to be like next.  Rehousing, relearning learning, recovering from a much lower market/lost retirement plans, intermittent power, and oh yeah, higher fuel costs will cause blow-out protein prices.  Got any investment grade canned salmon stored?

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A thoughtful reader (who's obviously in the "I get it!" category), sent this:

Hi George, You said: "So yes, let's throw it out there: What's the right path for those who see what logically follows once the TV is off, the power's down, and food no longer plentiful enough to justify garbage disposals?"

Well, there is a strong movement developing within the UK which is working towards the future in a /very/ positive way, which might answer your question:

The Transition Initiative http://www.transitiontowns.org /

"A Transition Initiative is a community working together to look Peak Oil and Climate Change squarely in the eye and address this BIG question: 'for all those aspects of life that this community needs in order to sustain itself and thrive, how do we significantly increase resilience (to mitigate the effects of Peak Oil) and drastically reduce carbon emissions (to mitigate the effects of Climate Change)?' "

Hope you find it interesting!

I have added a link to the "Transition Towns WIKI" to the left menu of this site right under the useful Solari Action Network and other sites such as Jim "The Long Emergency" Kunstler's www.kunstler.com.

If you look for a common theme that the writings of chief time monk Cliff, Catherine Austin Fitts, Jim Kunstler,  and a host of other writers who live '10-minutes to 5 years into the future' have, it's the word "transition".  And in 2009 the odds are looking like at least half the planet will be participating in a major transition of one sort, or another, like it or not.

Ready?  Got a garden in?

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Send snip and save comments to george@ure.net

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Around the Ranch: Lightning, Part Two

It turns out that not only was the lightning through East Texas bad enough to take out one of our phone lines this week, but it also cut off our Big Pipe onto the internet.  The crew from East Texas Broadband (normally a very reliable service) came out on Thursday to help plumb us back to the backbone of the web.

 

No soap:  The lightning apparently took out the electronics in the microwave transceiver that hooks us up - so we will be back on the Big Pipe later today when new gear is Fed'exed in.  If this morning's column seems a little short, it's that WildBlue's  satellite transit times are a bit frustrating to us hyper-clickers.

 

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Thursday May 15, 2008

One Great Company

Readers often accuse me of being a 'naysayer', a 'doomster', and a lot of other descriptors that go to the idea that all George ever does is complain about the economy.  Not so!  There are still a few great companies out there, or at least companies which are making a sincere effort to be great - and succeeding to the point where if I was buying stock, they'd be a company I would give serious consideration to.  But, I'm getting ahead of myself.  Let me start at the beginning.

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As you know, the predictive linguistics have been warning for better than six months that this year would be one where 'winds would gouge' and there'd be untold damage from them winds.  As if the cyclone in Myanmar, where heavy rains but no second cyclone threaten, was not enough, there's a disaster declaration for Ottawa County where the town of Picher Oklahoma was pretty much sucked off the map.  Slides in the Tulsa World's web extra today will give you a sense of it.

 

Amidst the line of severe thunderstorms that went through the lower Midwest on Wednesday was enough rainfall to almost overnight put Tyler, Texas -- our nearest official climatology site --- back up to seasonal averages after being something like 25% behind for the year just a week ago.

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If you tried to load this site on Wednesday morning, you may have gotten a "Sorry that page not available" error a few times because we also suffered through a major line of thunderstorms and 2" an hour squalls in our area south