The World To Muse

I'd Like To Buy 20 United States Please

noreply@blogger.com (Indenture) — Fri, 19 Feb 2010 17:30:00 +0000

If the U.S. government has a budget of $3.8 trillion and supposedly governs a $10 trillion economy, yet five commercial banks control $198 trillion of derivatives, who do you think really runs the country?

A Daily Pledge

noreply@blogger.com (Indenture) — Mon, 15 Feb 2010 19:57:00 +0000

Frank Perdue: THE ETHICAL WILL

Be honest.

Be a person whom others are justified in trusting.

If you say you will do something, do it.

You don't have to be the best, but you should be the best you can be.

Treat all people with courtesy and respect, no exceptions.

Remember that the way to be happy is to think of what you can do for others. The way to be miserable is to think about what people should be doing for you.

Be a part of something bigger than your own self. That something can be family, pursuit of knowledge, the environment, or whatever you choose.

Remember that hard work is satisfying and fulfilling.

Nurture the ability to laugh and have fun.

Have respect for those who have gone before; learn from their weaknesses; build on their strengths.

The Euro Waits To Fall

noreply@blogger.com (Indenture) — Sun, 07 Feb 2010 02:31:00 +0000

"Many have asked what happens in a debt default if Greece or Ireland defaults? What if the Euro defaults? What happens if the USA defaults? Many commentators do not tell this side of the story as it spreads fear and panic. However we should be ready.

First, a country like Greece probably would be kicked out of the EMU and they would automatically print Drachmas. If Spain defaulted they would go back to Pesatas and Portugal to Escudos. Italy would revert back to their old Lira. However, the cost to do so would be great. All contracts would be written in Euros and must be honored.

As the country uses its old currency, a huge devaluation occurs as this is the last step a country can do to escape its problems. The devaluation of these old currencies also sends the Euro down to reflect trade problems and imbalances.

Right now we are seeing a huge rise in the USA dollar to reflect this even though the USA is in worse shape than Europe.

The devaluation of those countries automatically raises the costs of imports and thus the country will experience massive inflation. The citizens get angry because of high food prices and we eventually get the "storming of the bastille". You get truckers blocking the highways as the cost to operate a truck rises and his net revenue falls such that he can not make a living.

Before, the IMF would come to the rescue of a nation in need. However this time the problem is global and there is not enough money in the system to bail out major countries. The countries would then try and announce a debt moratorium (a debt default) and try and start all over again. However there is nothing to back their drachmas, their liras, their pesatas!. The confidence in the currency has now dissipated. Those countries would at first go into a deep deflation (depression) as their economy stops. The government would then increase the money supply to pay off all its debts and stimulate the economy.

The drachmas, or liras, or pesatas, in circulation would flow with such speed (velocity) that they would change hands 3 or 4 times in a day. The velocity causes prices to escalate and goods disappear off of shelves in a nanosecond.

While this default has occurred, the USA banks will experience another huge problem, a credit default swap placed on the country in question. The problem will be the health of the counterparties that underwrote the contracts. Most of these contracts were written in the usa , with the largest underwriters being:

1.AIG

2.JPMorgan

The largest overseas bank underwritting the above is UBS.

These contracts total in the trillions of dollars. The default in Europe will bring down the big usa banks and then the usa must print trillions of dollars into the system.

In the USA then you will get the same result as Greece, or Spain, as dollars must flood the system. Citizens take these dollars and run and buy physical goods. In an extremely short period of time, most goods disappear off the shelf and thus we will have a hyperinflationary global depression.

I cannot see how we can avoid the above scenario. I wish it will not happen but I am afraid it will." link

A Psychotic Nation

noreply@blogger.com (Indenture) — Sun, 17 Jan 2010 00:38:00 +0000

Would You Like Door Number One Or Door Number Two

noreply@blogger.com (Museice) — Mon, 11 Jan 2010 03:49:00 +0000

"So we can either have a deflationary collapse where everybody says, okay, well, remember those $10 trillion that we owed the rest of the world? We're just not going to pay them. Or we can go into hyperinflation. Those are the only two alternatives and either is pretty bad." Bob Moriarty

Roll The Dice And Choose A Disaster

noreply@blogger.com (Museice) — Mon, 11 Jan 2010 00:22:00 +0000

EXTREME WARNINGS FOR EXTREME TIMES
The following events are presented as potential disasters looming, spanning the full spectrum, each with triggers in numerous arenas. These are potential disasters, not presented as forecasts, but rather as a list to beware for nasty highly disruptive eruptions. They are loaded with a geopolitical streak, in keeping with Paradigm Shift that signifies a powerful set of changes in altered power. The one common trait all the following potential events have is that they are systemic game change agents. The globe will be reshaped by each and every event that comes to pass.

Saudi Royals fall: The Saudi Arabian royal family would lose government control to the Islamic Fundamentalists and is replaced. Scores of old royals escape loaded with hundreds of billion$ in assets, conjuring up memories of the Shah of Iran. Disruptions and instability spread across the entire Persian Gulf. A clampdown of fundamentalist groups in other Gulf nations invites backlash. Occupation forces in Iraq face renewed resistance. (chance: 20%)

China gains full naval military capability: The Chinese Military would attain aircraft carrier force with three carrier groups. In expert circles they call it blue water capability. With this potential, including long range strike potential, the balance of power in Asia is altered. Pressures are put as a result toward changed alliances in key nations considered loyal to the West. Certain strategic points gain attention, as focus is trained on the Mallacan Straits, the Panama Canal, the Suez Canal, the Bosporus Straits, the access routes to the Bering Sea, Australia, and South America. (chance: 30%)

Russian cuts off natural gas to Eastern Europe: Russia would enter a deep dispute with Eastern European nations, in particular Ukraine, and cuts off the flow of natural gas. Disputes center on return to the Russian fold from the independent factions encouraged by the Untied States motivated by the many Color Revolutions. Caught in the middle, at the end of the distribution lines, is Central Europe, whose ties forged by Germany to Russia remain healthy and strong. Russia later forges an alliance with Central Europe that results in some stability, as it becomes clear that Russia has come of age as a peacemaker with further ramifications in time. (chance: 50%)

Greece defaults on its debt: Great problems would result for the parent European Union, sure to fracture. Germany lets it go, does not cover the Greek debt, but employs plausible deniability on minimal offered assistance. A chain reaction begins, to reach the other vulnerable nations. Portugal, Italy, and Spain teeter upon the event, soon to suffer their own defaults, none aided. Even France suffers the ignominy of default, but is aided by Germany in the end, unlike the PIGS nations. The crux of the matter is refinance rollover of debt, which fails. The non-German EuroBonds then rise in yields, enough to force a split in the Euro currency to form the Nordic Core Euro. Default nations revert to their old former currencies and suffer massive devaluations. (chance: 80%)

Mexico fails as a state: The conditions in Mexico would become fully recognized and openly discussed. Two factors are front & center. The rise of the drug cartels in their control of the nation in numerous aspects is already global news. The unexpected net import of crude oil that ruins the nation's federal finances is not yet global news. The former has been understood, but the loss of oil exports takes the region by total surprise. Hyper-inflation then hits Mexico, which prints money to alleviate the federal budget shortfall. Chaos results on numerous levels. Supply disruption hits the US southern refineries. (chance: 70%)

Credit crisis relapse hits the US banks: The Untied States would suffer a relapse into a second round of bank failures, debt defaults, institutional liquidations, corporate deaths, and market disruptions. The proximal cause is the spread and continuation of the property decline, home foreclosures, and commercial defaults. Numerous bank analysts continue to harp on commercial mortgage loss risk after a 40% price decline, so far covered up by phony accounting rules. Impaired assets sit as bank assets. A trigger is the USFed removal from mortgage bond support, coupled with a powerful second downwave in housing prices from Option ARMortgages. A solution is put forth for wide USGovt purchase of housing inventory and the official advent of Fannie Mae as landlord. The supply chain is disrupted in extreme ways, as commercial paper grinds to a halt, and a deeper recession takes root. (chance: 40%)

The US supply chain suddenly suffers disruptions: The economic supply chain would be crippled by its two primary points of vulnerability. The finance credit lines are tied to wounded commercial paper markets. The actual tangible output supply comes from industries that struggle in credit flow, unstable prices, burdensome regulations, worker shortages, and constricted metal supply. Certain trucking firms have already shut down. Gasoline refineries are below their 1990 capacity. Mexican oil supply is soon to end. The lack of trained skilled experienced workers is chronic. (chance: 40%)

Fannie Mae is revealed as a slush fund, toxic bond haven, and object of grand criminal fraud coverup: Leaks would lead to calls for further Congressional investigations of mortgage bond fraud and past presidential pilferage. At the same time, various alerts would be given that the USGovt is harboring a black hole certain to cost over $2 trillion in additional bailouts, maybe up to $4 trillion. The prospect of wide USGovt home ownership from default sparks research reports and great scrunity, even clamor by younger members of Congress. The unlimited credit line to back USAgency debt securities has opened the door to a nasty effect on perception of USTreasury debt, as global perception of the actual USGovt debt ramps up 50%. Discussion of default rises. (chance: 40%)

Iran is attacked: Great controversy would result from the direct attack of its nuclear facilities and other targets. Controversy would stir from scattered unconfirmed reports of involvement by various nations. Retaliation by Russia and China, long promised, then comes in hidden ways not fully understood. In the aftermath, the banks in the Mideast region are subjected to great scrutiny by several global players, especially one US ally nation. (chance: 10%)

Japan suffers a financial & economic crisis: A recession would take grip, spreading to its financial markets. Reduced export trade eliminated the trade surplus long ago. The Japanese Govt Bond then jumps higher by 2% or 3% in bond yield. The rising Yen currency consequently runs up 20% to 30% from the reverse of the Yen Carry Trade. Their export trade grinds to a near halt, and major conglomerate banks announce insolvency. Then China steps in. (chance: 40%)

UKGovt suffers a debt downgrade: The United Kingdom would be the first major industrialized nation to lose its high credit rating. The UKGilt bond yields then rise above 6% without pause. The threat of sovereign debt default is debated. The British Pound currency falls, which perversely aids the USDollar. Shock waves extend to the Wall Street financial center. Later, scrutiny comes to the USTreasury for its own downgrade and default risk. (chance: 50%)

Talk swirls for eliminating some central banks: Debate would focus on the central bank role as cause for asset bubbles, and extensions to the faulty nature of money itself. Analysts would cite money free from anchors of asset backing. However, awareness rises of the impracticality of central bank elimination, since debt liquidation and cleared decks cannot occur without global depression. In the background is rampant discussion of syndicate involvement and the risks of retaliation by the secretive banker organizations. (chance: 10%)

China faces a degree of chaos: Falling export trade, faltering bank reserves, empty commercial buildings, rising unemployment, idle factories, stalled construction projects, and restive population would contribute to a national crisis that struggles to be told amidst press controls. Armed with a $2500 billion war chest of reserves, China begins to convert assets into tangible rescues, aid, and welfare. The Chinese crisis then ignites a global sale of USTreasurys. As an offshoot to the chaos, the colonization of America then begins, as China cashes in on its USAgency Mortgage Bonds. It exploits it cut deal of Eminent Domain conversion of bonds into property. (chance: 20%)

Food prices soar in the US: The divergence between official crop forecasts would clash with the reality of crop failures and profound shortages this summer. Being the greatest food production source, the US crisis spreads globally. The deCarbonnel threat is realized, as foreign nations sell US$-based assets in order to finance food supply purchases. China enters the fray as a buyer of distressed farm property, amidst accusations of carpetbagger. (chance: 80%)

JPMorgan is object of persistent rumors of gigantic credit derivative losses: The slowly rising USTreasury Bond long-term yield would cause deep painful losses to JPMorgan. Their abuse of Interest Rate Swap contracts becomes a topic of debate. The monetization of USTreasurys becomes a topic of debate. The ability for the USGovt to control its deficits and auxiliary (hidden) losses becomes a topic of debate. Even bond fraud within JPM hallowed halls becomes a topic of debate. To cover the losses, monetary inflation grows out of control, and a USDollar decline ensues, taking the DX dollar index below the 70 level. (chance: 40%)

London metals exchange shuts down: The venerable London Bullion Market Assn would close, unable to fulfill gold orders. The varied stories continue regarding unorthodox practices from the London metals exchange in the month of December, like redemption of gold contracts in cash, like outsized demands for gold delivery mainly by Chinese entities but increasingly by the Swiss, like satisfaction of gold contracts with Street Tracks GLD shares, and much more. Scrutiny with assays upon high volume delivery have been standard since the tungsten gold story emerged, an indirect confirmation often ignored. The supply chain with intermediaries suddenly halts, as they too have no gold bullion to supply the LBMA. Companies shut down. Lawsuits result. Prosecutions begin. Midlevel officials are arrested. Some turn state's evidence. The gold price enters a state of extreme confusion, with vast discrepancies between paper gold price and physical gold price. (chance: 70%) link

If you want to see how a U.S. Food Price Spike will cascade across the globe and cause a Dollar Crash read Food/Gold Shortages Reach Breaking Point by Eric deCarbonnel. But there is no need to worry because one of the best financial statisticians only gives an American Food Shortage an Eight Percent Chance of occurring. Everything is fine.

Twelve Reasons To Wake Up In The Morning

noreply@blogger.com (Museice) — Sun, 10 Jan 2010 03:21:00 +0000

1. Faber: The 'American Empire' has peaked, is on a decline

Hong Kong economist Marc Faber says "the average life span of the world's greatest civilizations has been 200 years ... Once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent ... overspends ... costly wars ... wealth inequity and social tensions increase; and society enters a secular decline."

2. Grantham: Learned nothing, doomed to repeat past, only bigger

Money manager Jeremy Grantham warns that our irrational nightmare will repeat. A year ago we came dangerously close to the "Great Depression 2." Unfortunately, we've "learned nothing ... condemning ourselves to another serious financial crisis in the not too-distant future."

We had our bear-market rally. Next, historical cycles plus our irrational behavior guarantees another, bigger global meltdown. We "learned nothing."

3. Stiglitz: Wall Street creating short respite before next crash

Nobel economist Joseph Stiglitz recently warned: Unless Wall Street's incentive system is drastically reformed, "the financial sector will only try to circumvent whatever new regulations we put in place. We will simply have a short respite before the next crisis." Warning, nothing's changed, it's worse: Lobbyists run Obama, Congress and the Fed.

4. Johnson: Running out of time before Great Depression 2

Yes, "we're running out of time ... to prevent a true depression," warns former IMF chief economist Simon Johnson. The "financial industry has effectively captured our government" and is "blocking essential reform," and unless we break Wall Street's "stranglehold" we will be unable prevent the Great Depression 2.

5. Ferguson: Fed's easy money fuels new bubbles, meltdowns

In the 400-year history of the stock market "there has been a long succession of financial bubbles," says financial historian Niall Ferguson. Who's the culprit? The Fed: "Without easy credit creation a true bubble cannot occur. That is why so many bubbles have their origins in the sins of omission and commission of central banks."

Another bubble (and crash) is virtually certain, thanks to Washington's $23.7 trillion explosion in debt, the Fed's support for the $670 trillion shadow banking system and Wall Street lobbyists getting superrich thanks to Wall Street's insatiable greed.

6. Taleb: Fed haunted by ghost of Greenspan's failed Reaganomics

When Obama reappointed Bernanke, Nassim Taleb, risk-management professor and author of "The Black Swan," warned of a new disaster: "The world has never, never been as fragile," yet Obama reappoints an economist who "doesn't even know he doesn't understand how things work." New proof? At last week's American Economic Association, Bernanke was still shifting the blame: "The best response to the housing bubble would have been regulatory, not monetary."

Wrong: He conveniently forgets he was advising Bush earlier, did nothing. Now Obama's stuck with a Greenspan clone and an insane ideology focused solely on saving a failed banking system by flooding the world with inflated dollars guaranteed to trigger another meltdown

7. Soros: Dollar dead as a reserve currency, nest eggs dying

Billionaire investor George Soros' "New Paradigm:" America's 25-year "superboom ... led to massive deregulation ... blindly chasing free markets ... unleashed excessive greed ... created the dot-com and credit meltdowns" and a "shadow banking system" of derivatives.

"The system is broken. The current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency," warns Soros. "We're now in a period of wealth destruction. It is going to be very hard to preserve your wealth in these circumstances."

8. Hedgers: make billions shorting stupid politicians, bankers

Soros isn't alone. Lots of hedge fund buddies made hundreds of millions and billions betting on the stupidity of Washington with the Fed's cheap-money policies. Alpha magazine reports that four hedgers made more than $1 billion each in 2008. The top-25 "managers made $464 million each on average last year ... a kingly sum, especially during a year of global recession, stock market wipeouts and vanishing wealth."

9. Shiller: Dot-com, subprime meltdowns, 'third episode' next

Economist Robert Shiller a "Dr. Doom?" Remember a decade ago with "Irrational Exuberance?" Now he's warning: "Bubbles are primarily social phenomena. Until we understand and address the psychology that fuels them, they're going to keep forming. We recently lived through two epidemics of excessive financial optimism, we are close to a third episode, only this one will spread irrational pessimism and distrust -- not exuberance."

10. Kaufman: Irrationality replaced reason, science, technology

Henry Kaufman was Salomon's chief economist and "Dr. Doom" for 24 years: "Why are we so poor at managing our key economic institutions while at the same time so accomplished in medicine, engineering and telecommunications? Why can we land men on the moon with pinpoint accuracy, yet fail to steer our economy away from the rocks? Why do our computers work so well, except when we use them to manage derivatives and hedge funds?"

Kaufman warns: "The computations were correct, but far too often the conclusions drawn from them were not." Why? Selfish, myopic politicians and bankers.

11. Biggs: Sell everything, buy guns, food, head for the hills

In his 2008 bestseller "Wealth, War and Wisdom" former Morgan Stanley research guru Barton Biggs warns us to prepare for a "breakdown of civilization ... Your safe haven must be self-sufficient and capable of growing some kind of food ... It should be well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc ... A few rounds over the approaching brigands' heads would probably be a compelling persuader that there are easier farms to pillage." Biggs sounds like an anarchist militiaman.

12. Diamond: Nations ignore obvious till it's too late, then collapse

The end will be swift. In our age of short-term consumerism and instant gratification, few hear the warnings of our favorite evolutionary biologist, Jared Diamond. Societies fail because they're unprepared, will be in denial till it's too late: "Civilizations share a sharp curve of decline. Indeed, a society's demise may begin only a decade or two after it reaches its peak population, wealth and power." link

A Trillion Should Hurt Your Brain

noreply@blogger.com (Museice) — Fri, 08 Jan 2010 02:13:00 +0000

A. A billion seconds ago it was 1959.

B. A billion minutes ago, the year was 1 A.D.

C. A billion hours ago our ancestors were living in the Stone Age.

D. A billion days ago no-one walked on the earth on two feet.

E. A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it.

I Am Not A Keynesian

noreply@blogger.com (Indenture) — Tue, 05 Jan 2010 02:00:00 +0000

The Austrian School’s 7 Commandments:

-The Austrian free-market economists use common sense principles.
-You cannot spend your way out of a recession.
-You cannot regulate the economy into oblivion and expect it to function.
-You cannot tax people and businesses to the point of near slavery and expect them to keep producing.
-You cannot create an abundance of money out of thin air without making all that paper worthless.
-The government cannot make up for rising unemployment by just hiring all the out of work people to be bureaucrats or send them unemployment checks forever.
-You cannot live beyond your means indefinitely.
-The economy must actually produce something others are willing to buy.

We Must All Know How To Bake Bread

noreply@blogger.com (Indenture) — Tue, 29 Dec 2009 04:15:00 +0000

Making No-Kneed Bread

The Terrifying Mathematical Inevitability Of Hyperinflation Or Dollar Default

noreply@blogger.com (Indenture) — Tue, 15 Dec 2009 22:31:00 +0000

It's one of those numbers that's so unbelievable you have to actually think about it for a while...

Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion.

Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30 percent of our entire GDP. And we're the world's biggest economy. Where will the money come from?

How did we end up with so much short-term debt? Like most entities that have far too much debt – whether subprime borrowers, GM, Fannie, or GE – the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss."

What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt, at ever shorter durations, at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.

When governments go bankrupt, it's called a "default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists – Alan Greenspan and Pablo Guidotti – published the secret formula in a 1999 academic paper. The formula is called the Greenspan-Guidotti rule.

The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100 percent of their short-term foreign debt maturities. The world's largest money-management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100 percent of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."

The principle behind the rule is simple: If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default.

The U.S. holds gold, oil, and foreign currency in reserve. It has 8,133.5 metric tons of gold (it is the world's largest holder). At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether, that's around $500 billion of reserves. Our short-term foreign debts are far bigger.

According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44 percent of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months – an amount far larger than our reserves.

Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.

So, where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40 percent of GDP.

Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or Russian central banks, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians recently bought 200 metric tons. Sources in Russia say the central bank there will double its gold reserves.

So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.

One thing they're not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea and Chile. These are the three largest central banks that own the least amount of gold. None owns even 1 percent of its total reserves in gold.

All of this is going to lead to a severe devaluation of the U.S. dollar, which I expect to happen within 18 months.If you haven't taken steps to protect yourself from the coming devaluation – like owning gold and silver bullion, foreign real estate, and farmland – make sure you do it soon. The dollar rout is coming. link

I'm Hungry Just Thinking About It

noreply@blogger.com (Indenture) — Fri, 11 Dec 2009 22:54:00 +0000

United States Counties that have been declared a Disaster Area by the Department of Agriculture.

To qualify for a federal disaster declaration, each of the yellow counties had to show a 30 percent loss compared to normal production of a particular crop (corn, soybeans, etc).

Food is fairly important!

I wonder if prices will increase in 2010?

I Feel Slightly Better About The United States

noreply@blogger.com (Museice) — Thu, 03 Dec 2009 23:59:00 +0000

Myth 1. China is dependent upon exports to the U.S.

Of total Chinese exports, 38 percent go to emerging markets, 21 percent to the European Union, 18 percent to the U.S. and 8 percent to Japan. Additionally, exports have fallen to about 14 percent of China’s GDP if you include only the value added in China. Total exports including those partially manufactured goods brought into China from other countries (and which have value added in China before export), make up about 30 percent of China’s GDP.

The fact is that exports to U.S. make up somewhere between 2.5 percent and 5 percent of China’s total GDP.

Infrastructure and consumer sectors have replaced exports as the main drivers of China’s GDP growth.

Myth 2. Very little is manufactured in the U.S. anymore.

Merrill Lynch provides us with the following facts “…the U.S. is still the largest manufacturer by a long shot, making up 20 percent of the world’s total manufacturing output. Furthermore, when focusing on the value added (as defined by the World Bank), the U.S. contributes more than double the production of the next largest producer, China.”

Myth 3: The U.S. does not export much except software and weapons.

Fact: The U.S. is the world’s third largest exporter (Germany is number one, and China is number two). The U.S. exports value added industrial chemicals and supplies, capital goods like production machinery, computer and telecommunications equipment, motor vehicles and parts, and aircraft and aircraft parts. The U.S. also is the world’s leading exporter of food, feed, and beverages. Additionally, many billions of dollars in consumer goods, medicines, and media and entertainment products are exported by the U.S. each year.

If We Can't Feed Ourselves...

noreply@blogger.com (Museice) — Tue, 01 Dec 2009 01:11:00 +0000

Here is a clear way to comprehend what a Depression looks like.

Food Stamp Usage In The United States:

Roanoke County Virginia-
Percentage on Food Stamps
All People 20%
Children 39%

Change Since 2007 +30%

Think about those numbers for a second, place yourself in a supermarket like Krogers, look around at the people, the families, the children, and then come to grips with the fact that ONE IN FIVE Roanoke County Citizens are unable to afford the cost of feeding themselves without Government assistance.

This problem will get much worse.
If we can add 30% more people in two years just think how many of our neighbors will require Food Stamps just to survive in the next two years. Buckle up people. The ride is just beginning.

2010 Will Be 'Fun Fun Fun'

noreply@blogger.com (Museice) — Thu, 26 Nov 2009 04:16:00 +0000

"It's one of those numbers that's so unbelievable you have to actually think about it for a while... Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?

How did we end up with so much short-term debt? Like most entities that have far too much debt - whether subprime borrowers, GM, Fannie, or GE - the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss." What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt… at ever shorter durations… at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next." link

Words To Live By - Words The United States Has Forgotten

noreply@blogger.com (Museice) — Wed, 25 Nov 2009 17:00:00 +0000

"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is about the end of any nation. You cannot multiply wealth by dividing it." Dr. Adrian Rogers

China Is Done Bending Over

noreply@blogger.com (Museice) — Mon, 23 Nov 2009 01:05:00 +0000

The best humor is based on truth...

Those Who Are About To Die Salute You - With One Finger

noreply@blogger.com (Museice) — Sun, 22 Nov 2009 02:07:00 +0000

"A great civilization is not conquered from without until it has destroyed itself within. The essential causes of the Roman decline lay in her people, her morals, her class struggles and failing trade, her bureaucratic despotism, her stifling taxes, and consuming wars.“ The Story of Civilization III (1944)

We casually watch our morals drift away while we live through reality tv.
Class struggles are a daily saturation in the 'blame the rich for the problems of the poor' nightly news broadcast.

If the United States had something to trade we could possibly lose that also but we only manufacture heavy land moving equipment through Caterpillar and weapons of death through our military businesses. We produce nothing else tangible. We purchase from the rest of the world.

Politicians, those who sell our Nation for a dollar only for their ability to remain Politicians will be the few who still have a job.

Taxes, in a few years we will be unable to even pay the interest on the debt we owe the rest of the world for the life style we have borrowed.

And World War III is coming because it must. Throughout history mighty nations have taken their last gasp while giving their citizens an enemy to concentrate all their hate towards. Anger must be focused away from internal problems.

Enjoy and dance. Eat and be merry.
For tomorrow we go to war as we watch the destruction of our great empire crumbling beneath the weight of it's own greed.

Time For Practice

noreply@blogger.com (Museice) — Sat, 21 Nov 2009 15:07:00 +0000

At 3 yards, draw and fire two shots center mass, time shooter
At 5 yards, draw and fire two shots and each of two targets, time shooter
At 5 yards, draw and fire Mozambique (two to the body – one to the head) at each of two targets, time shooter
At 7 yards, draw and fire two shoots at each of two targets, time shooter
At 10 yards, draw, move to kneeling cover and fire two shots, repeat

I have been shooting guns my entire life (yes this means that when I came out of my Mother's womb I had a tiny 1911 in my hand because I was my Father's son). I have placed bullets into objects hundreds of yards away but I have never fired a gun at a target 3 Yards in front of me. That's spitting distance. But it is also where the bad guy might be.

The Housing Market Recovery

noreply@blogger.com (Museice) — Sat, 14 Nov 2009 03:59:00 +0000

A staggering 22 percent of all mortgages in the state of Florida are non-current, according to a new report from Lender Processing Services.

By non-current, they mean loans that are either delinquent or in some stage of foreclosure; perhaps more troubling is the fact that 10.4 percent of home loans in Florida are in foreclosure.

The LPS October Mortgage Monitor also revealed that the nation’s foreclosure rate was 3.12 percent as of September 30, up 2.6 percent from a month earlier and 88.9 percent year-over-year.

And remember that’s with all the government intervention, foreclosure moratoria, loan modifications, and the like; the national mortgage delinquency rate was 9.37 percent as of September 30.

The report also highlights the large shadow inventory of foreclosed properties that could wreak havoc on home prices and a possible housing recovery.

“The number of loans deteriorating further into delinquent status is now more than twice the number of foreclosure starts, indicating another major wave of troubled loans in an already clogged loan pipeline,” the company said. link

There is no recovery! Period.
I want you to imagine what Florida is going through. As you drive around the City pretend every 5th house you see will soon be the property of The Bank. Every 5th house you see will not be generating income for The Bank or for our Local Government. The Banks are insolvent and Local Governments are next from lack of tax revenue.

2010 will be disastrous. Buckle Up because the failure of Commercial Real Estate is next. Do you think broke people go to shopping malls?

Heaviest Element Yet Known to Science

noreply@blogger.com (Museice) — Fri, 13 Nov 2009 01:52:00 +0000

Heaviest Element Yet Known to Science: (Gv)

Lawrence Livermore Laboratories has discovered the heaviest element yet known to science.

The new element, Governmentium (Gv), has one neutron, 25 assistant neutrons, 88 deputy neutrons, and 198 assistant deputy neutrons, giving it an atomic mass of 312.

These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lepton-like particles called peons.

Since Governmentium has no electrons, it is inert; however, it can be detected, because it impedes every reaction with which it comes into contact. A tiny amount of Governmentium can cause a reaction that would normally take less than a second, to take from 4 days to 4 years to complete.

Governmentium has a normal half-life of 2 – 6 years. It does not decay, but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places.

In fact, Governmentium’s mass will actually increase over time, since each reorganization will cause more morons to become neutrons, forming isodopes.

This characteristic of morons promotion leads some scientists to believe that Governmentium is formed whenever morons reach a critical concentration. This hypothetical quantity is referred to as critical morass.

When catalyzed with money, Governmentium becomes Administratium, an element that radiates just as much energy as Governmentium since it has half as many peons but twice as many morons. link

If It Looks Like A Depression And Smells Like A Depression

noreply@blogger.com (Museice) — Sun, 08 Nov 2009 02:31:00 +0000

All hysteria regarding the supposed "Gold Bubble" aside, please allow me to take this opportunity to present a sober, rational (and lengthy) case for why central bankers and other prudent people are piling into PMs.

Firstly, it has been approximately two full years since the "Ponzi Pyramid of Debt and Derivatives Death" began to implode. It started with the the marginal homedebtor defaults in the fall of 2007, and has subsequently cascaded through the entire financial system, collapsing the following gigantic entities:

1. Countrywide Financial

2. Bear Stearns

3. Fannie, Freddie, FHLBs

4. Merrill Lynch

5. Goldman, Morgan Stanley (who had to be converted to "commercial banks" in a rush 24-hour period)

6. Citi and BofA

7. AIG

8. GM, Chrysler

9. Other banks, pension funds, the entire money market space and additional financial gamblers too numerous to list here.

10. Actual states, with California being the poster child.

In the interim time since the collapse of Bear Stearns in March of 2008, the Fed and Uncle Sugar have jumped in with both feet and have gone on the most massive fiatsco-flinging campaign in the history of mankind. Monetizations, nationalizations, backstops, loans, direct buy-ins, "stress tests", stimulus packages, extensions of unemployment benefits, "Cash for Clunkers", $8,000 fiatsco-bribes-for-homedebtors...you name it, they've done it.

And Europe and Asia have gone on similar campaigns to fight the worldwide economic collapse, with the central banks and governments of the world flinging a total of:

TWENTY TRILLION FIATSCOS

...at the failed financial gamblers.

And an extremely important issue of the Fed's efforts has been their gargantuan implementation of the "Alphabet Soup" programs, which include:

1. AMLF
2. CPFF
3. Interest on Reserves
4. MMIFF
5. PDCF
6. TAF
7. TALF
8. TARP
9. TSLF

...and of course the creation of various "Maiden Lanes" to literally take over Bear Stearns and AIG, paying off counterparties to these failed financial gamblers at 100%.

As part of the myriad programs outlined above, the Fed is now the "proud owner" of the following "collateral" now "backing" the U.S. Nightcrawler:

Cabela’s Credit Card Master Note Trust
CarMax Auto Owner Trust 2009-1
Chase Issuance Trust
Citibank Credit Card Issuance Trust
CNH Equipment Trust 2009-B
Ford Credit Auto Owner Trust
GE Capital Credit Card Master Note Trust
Harley-Davidson Motorcycle Trust 2009-1
Honda Auto Receivables 2009-2 Owner Trust
Huntington Auto Trust 2009-1
MMCA Auto Owner Trust 2009-A
Nissan Auto Receivables 2009-A Owner Trust
SLM Private Education Loan Trust 2009-B
Small Business Administration Participation Certificates
Volkswagen Auto Lease Trust 2009-A
World Financial Network Credit Card Master Note Trust
World Omni Auto Receivables Trust 2009-A

In addition to the above list of trash, the Fed has also taken in unknown quantities of EVEN MORE useless gunk in the from of Wall Street-supplied MBS, CDOs/Squareds/Cubeds.

RobotTrader addition: Don't forget the next round of trash to be heaped upon the Fed Balance Sheet in the coming months:

Allergan Botox Injections Receivables Trust

Lap-Band Financing Master Note Trust

Beverly Hills Plastic Surgery 2009 Owner Trust (Series C and D)

Invisalign Grille Straightener Receivables Master Trust

Best Buy Plasma Entertainment Certificates Trust

Medicare Scooter Receivables Trust

And let us not forget that the Fed is also sopping up Agencies like there is no tomorrow, having purchased approximately $700 billion fiatscos worth so far, of a promised $1.5 trillion or so.

Then there is the $300 billion fiatscos of Uncle Sugar's debt outright that the Fed has swallowed.

Finally, there is the dropping of "Free Market Fed Funds Overnight Rates" to near-zero and keeping them there.

Whew! That's a lot of action in such a short time.

And the result of all of this flinging on the part of Uncle Sugar and the Fed?

Well, the banking system is STILL crippled. The banks are lending very little to the lambs, instead preferring to simply sit on their reserves and collect the .25% annual interest from the Fed.

The residential McMansion market is still in collapse mode, with Fannie and Freddie still showing losses one year after Uncle Sugar took them over and seven months after the Fed started sucking up their MBS and debt. In fact, the McMortgage market is so horrid that BOTH Fannie and Freddie have resorted to converting McLoans to McRental agreements in a desperate attempt to keep the deadbeat, dirtball homedebtors in the rotting McBoxes.

Commercial real estate is no better, with thousands of unfinished strip malls and "see-through" office buildings dragging down the regional banks that piled into these speculative endeavors because the developers are failing and defaulting left and right.

Referring back to the above-listed toxic, horrid trash that the Fed has taken on its balance sheet, the deadbeats that owe these credit card, Harley Hog, student loans and other debts are defaulting in record numbers, as unemployment has now reached:

Sixteen million people

...and rising.

Which means they won't be making the payments on the "assets" that back the U.S. nightcrawler. It's as simple as that.

But that's not even the worst part. The junk that the Fed took on its balance sheet from the failed financial gamblers is in even MORE pathetic shape and there is NO CHANCE that a good portion of the ABS/MBS/CDO/CDO-Squareds/Cubeds that the now owns (and won't disclose, even to Congress nor under FOIA suits) will ever cash flow.

(Ras Conclusion): Despite two full years of unprecedented action by The Fed, Uncle Sugar, and other central banks and governments, the financial system is still crippled. This is why we have witnessed the CONTINUED monetizations and ZIRP action on the part of the major CBs, worldwide.

And with world trade having collapsed approximately thirty-percent in the last year, the situation isn't getting better, but rather worse.

Finally, the single most important stastic--U.S. Consumer Debt--is actually FALLING, not rising, which means that our economy, which is seventy-percent consumer-based, is actually shrinking.

Which means that the "Ponzi Pyramid of Debt and Derivatives Death" continues to implode.

So, it is little wonder that China, India, and now Sri Lanka--as well as other central banks and prudent people looking to preserve their wealth--are scrambling into buggy whips.

Because these central banks and governments aren't going to stop their fiatsco-flinging campaigns, despite the fact that, so far, their efforts have only mitigated the "Great Disintegration I" that has been ongoing for over two years now.

And the Fed will NEVER be able to unwind the majority of the trash they have taken on their balance sheet--unless they can somehow pass it on to either Uncle Sugar (translation: the taxpayer) or foist it off on the money market funds (as they have been floating trial balloons to that effect lately).

So, at this point I have concluded that useless, barbarous, relics are not in a "bubble", but rather the fiat prices are merely reflecting the growing loss of faith in the fiat system.

And this trend looks to continue for some time, until either "Great Disintegration I" finishes playing out, or the governments and central banks manage to pull off "Weimar Meets Zimbabwe", which is what they are now undertaking. link

We Are Failing Our Children

noreply@blogger.com (Museice) — Sat, 07 Nov 2009 03:12:00 +0000

The Washington, D.C., school budget is about the nation's costliest, spending about $15,000 per pupil. Its student/teacher ratio, at 15.2 to 1, is lower than the nation's average. Yet student achievement is just about the lowest in the nation.

Solution:
Spend more money on education? No!
Hire more teachers? No!

Destroy most of the televisions in The United States and somehow pray that men and women who have children are married and will remain married?

That sounds like a good place to start!

It's Just A Couple Billion Dollars

noreply@blogger.com (Museice) — Sun, 01 Nov 2009 02:57:00 +0000

A brief recap of The Fed's moves are as follows:

* The Federal Reserve cuts interest rates from 5.25-0.25% (Sept ’07-today)
* The Bear Stearns deal/ Fed buys $30 billion in junk mortgages (March ’08)
* The Fed opens various lending windows to investment banks (March ’08)
* The SEC proposes banning short-selling on financial stocks (July ’08)
* The Treasury buys Fannie/Freddie for $400 billion (Sept ’08)
* The Fed takes over AIG for $85 billion (Sept ’08)
* The Fed doles out $25 billion for the auto makers (Sept ’08)
* The Feds’ $700 billion Troubled Assets Relief Program (TARP) (Oct ’08)
* The Fed buys commercial paper (non-bank debt) from non-financial firms (Oct ’08)
* The Fed offers $540 billion to backstop money market funds (Oct ’08)
* The Feds backs up to $280 billion of Citigroup’s liabilities (Oct ’08).
* $40 billion more to AIG (Nov ’08)
* Feds agree to back up $140 billion of Bank of America’s liabilities (Jan ’09)
* Obama’s $787 Billion Stimulus (Jan ’09)
* The Fed’s $300 billion Quantitative Easing Program (Mar ’09)
* The Fed buying $1.25 trillion in agency mortgage backed securities (Mar ’09-’10)
* The Fed buying $200 billion in agency debt (Mar ’09-’10)
* Cash for Clunkers I & II (July-August ’09)

When you look at it like this it's just a few Billion here and a few Billion there.
But considering our total debt for Fiscal 2006 was $574.3 Billion I would say things have gotten WAY OUT OF CONTROL!

He have lost our grasp on the immense nature of these numbers!

Middle America Is Toast

noreply@blogger.com (Museice) — Sun, 01 Nov 2009 01:54:00 +0000

The next time you hear someone say the Recession is over, the Economy is getting better, or any form of Good Times Are Right Around The Corner remember this:

"The so called quick surgical bankruptcy of CIT will result in a company that will only be able to provide 20% of its previous level of financial services to Middle America according to Friday’s Wall Street Journal.

Any institutions replacing these services will have:

1. Higher levels of credit worthiness to be met by small business.

2. Less funds committed to these loans.

Further, the assets of CIT in bankruptcy are the middle American loans outstanding that will be brutally attacked by the bankruptcy process.

That is going to result in a flood of middle American businesses declaring bankruptcy." link

Only the United States Government can step in and replace what CIT offered Middle America. Another piece of our Free Market System will be gobbled up by the fictitious unlimited pockets of Government. I can guarantee you that multiple companies in The Roanoke Valley who've relied on CIT for funds in the past will close their doors from lack of loans and if they do get a loan from The Federal Government it will be you and I backing this loan. It will be our fictitious money and our promise to pay a debt we can no longer sustain.

At some point the bottom of this charade will drop away and the only people capable of sustaining our flawed system will finally say, "That's it. We've had enough." With Middle America Broke and Middle Class Businesses Bankrupt there will be very few buyers remaining to purchase the item Wal Mart sells.

There will be no reason for the Chinese to support us. They will be done.