Song of the South, Lament of a Nation.

For some of us there are times when the tendency to reduce complex phenomena to simple causes over rides more sophisticated analysis. With that in mind, I submit that over the last few decades the south has played an especially large role in the degradation of national politics. In making my case for the south's role in this "degradation", it might be helpful if I first establish some evidence relating to the putative scope of the south's influence on national politics. To that end, I offer that for twenty of the last twenty eight years, by my count, southerners, two from each party, have occupied the White House. From Jimmy Carter to two terms of Bill Clinton and three from The Bush family, the results have been, by common consensus, less than scintillating. In more recent times the results
have been nothing short of appalling.

I offer as some sort of disclaimer, that though I no longer live there, I too am from the south, born in the erstwhile capital of The Confederacy, Richmond, Virginia, raised there and in a small town, a village really, just west of Charlottesville, famous in some parts as the home of The University of Virginia, the proudest creation of the nation's third President, Virginian, Thomas Jefferson.

Years ago, political analyst Michael Lind wrote extensively about the south's inordinate and damaging influence on the conduct of national politics, and in the
roughly fifteen years since he made his initial observations little has changed. In fact, the trend seems to have only intensified as a plethora of mountebanks such as former White House occupant Bill Clinton, our sitting President, and presidential wannabee Mike Huckabee, a proud proponent of creationism, collectively pollute national politics with a combination of sloth, stupidity, and retrograde thought that would make an average high school history student blanche.

The demographics of the south are likely at least partly responsible for that region's overweening influence. More people have settled in the south over the last few decades than any other region in the country, and unfortunately, rather than raise the consciousness of the region regarding such issues as global warming, gun control, abortion, the place of religion in the public sphere, etc. etc., the newer citizens of the south seem to have been subsumed by the region's longstanding and infamous backwardness.

Another contributor to the south's special power may be due to the dominance of the visual medium as our primary means of mass communication. National political campaigns are determined by the vagaries of the boob tube, where complex thinking and nuance have never played well. In such an environment, it is no wonder that the sort of folksy and fatuous drivel of the sort profferred by the Clintons and Bushes, and lately Mike Hick, er Huckabee, finds a large and eager audience. This in turn influences other political players, who ought to know better, to dumb down their own message and approach to politics. This phenomenon may have something to say about why there is so little variation in thought within each of the respective political parties as compared to times past. Alternatively, if there are substantial gradations in thinking in the two parties, which I doubt, the generally dumbed down approach to politics simply stifles any forward thinking that might dare to manifest.

It would be hard to find, at least in any advanced nation, a political class that is more behind the curve than the collection of half wits who occupy the seats of power in Washington. Where in the halls of government is there even a vaguely intelligent energy policy being crafted? Once again, we must turn, in the manner of one facing the Medusa, towards the south. Our energy policy, such as it is, is spearheaded, I use that term advisedly, by a failed Texas oilman who uses armed force to attempt to control the planet's fast dwindling oil reserves. That is the essence of our nation's energy policy and no area of the country has more to say about that than Dixie.

As I write this entry I am aware that my thesis is, to some extent, flawed, and that the question of regional influences on national trends in politics is indeed quite complex. However, in the meantime, while I ponder the issue more deeply, don't be surprised if our next President possesses a bit of a draaaawl and has a special fondness for fried foods, and of course, Jaeeesus.

NIMBY REVISITED.

For those of you who read my NIMBY piece from late last summer, you might find the following of interest.

http://www.boston.com/news/health/blog/2007/11/scientific_pane.html

On Track For..."The Greater Depression."

There really isn't a whole lot to say that I haven't already commented on regarding the fast imploding U.S. economy. However, in the event that I left some things out in prior discussions, the following are what amount to proximate causes for what may one day be referred to as "The Greater Depression."

1.) The greatest housing bust since the thirties, the result of mendacity, appalling judgement, and an absolute abdication of responsibility on the part of a whole host of players from The Federal Reserve, Congress, the greater banking community, mortgage originators, home builders, and borrowers.

2.) A U.S. financial system (as represented by money center banks and Wall Street broker dealers) that is almost certainly insolvent due to capital reserves that are presently non-performing or destined to become so. The marked to myth models that have heretofore allowed financial institutions to mistate their balance sheets will not persist and can not be swept under the rug by figures like Treasury Secretary Hank Paulson via preposterous nostrums such as The Master Liquidity Enhancement Conduit.

3.) The early stages of a massive global dollar dump that will not reverse itself unless and until the monetary and governmental authorities do that which they are clearly utterly averse to, namely demand complete balance sheet transparency by financial institutions coupled with a new commitment to thoroughly responsible financial and fiscal policy. As per their Constitutional prerogative, pardon me, responsibility, Congress, ought to be playing the major role where the conduct of the money supply is concerned, but given the calibre of deliberative body they have become, that is most unlikely.

Make whatever preparations you can now for the difficult times ahead.

A Respite...of Sorts.

More evidence, as if we really needed it, (see yesterday's suddendebt blog entry) has arisen asserting that a recession is all but inevitable. While some of us have wondered how oil at 90+ dollars a barrel could manage to translate for so long into sub $3.00 dollar a gallon gas, as the sudden debt entry elucidates, those days are numbered. The fearsome pass through costs of vastly higher raw commodity prices that have heretofore been somewhat restrained are coming our way sooner rather than later, just in time, I imagine, to deleteriously effect the vital Christmas retail shopping season.

The silver lining is that we stand an excellent chance of seeing a cessation in the seemingly inexorable rise in crude prices as the U.S., and then the rest of the planet, experiences a massive economic contraction. Of course the reality of Peak Oil will put a floor under the price of crude oil, but where that floor will be is hard to say. If the all but certain economic contraction morphs into a severe recession or worse, the floor could easily be half again as low as it is presently. Yes, that's right, $45.00 dollar a barrel oil. Sounds cheap, doesn't it? Such a price would be a blessing of sorts, as it would present a last chance for certain gluttonous nations to re-fashion their energy infrastructure. Don't count on the unamed energy gluttons taking advantage of such an opportunity, however, as they are more likely to use the lower prices to return to business as usual and to hoard. Such is the nature of individuals and nations.

I would be remiss if I didn't mention that today is Fed day. Will they or won't they, lower rates that is? To date, and to my knowledge, this question has never been asked about the prospect of The Fed raising rates. Funny that. I operate under the simple, but I hope not simplistic premise, that as the Fed does the bidding of its masters on Wall Street, not Main Street, that the Fed will administer the short term cost of the dollar lower. The only question is by how much? The consensus is a "safe" .25 point reduction in Fed funds. Why safe? Once again, the conventional wisdom would say a .25 point is enough to soothe the Wall Street crowd but not enough to send the dollar swirling the bowl. We'll see, but please know that it's a load of puffed up nonsense, since in truth cuts in the cost of short term borrowing can't even begin to address the massive insolvency that resides just below the fragile crust of the entire financial system, a system that in its toxic, bloated, condition, now manages to hold our entire economy, to the extent it hasn't become our entire economy, hostage.

Hill's got the most bills....

On one of the blogs I visit regularly, sudden debt, the proprietor has bemoaned the financialization of presidential elections such that "even Presidential races have now been reduced to dollar figures?" I must admit that to me this seems something like old news, but I do suppose that a case can be made that where presidential elections are concerned, the "process' has somehow managed to become even more crass than ever. Then again...

I must admit I pay little attention to election year(s) goings on because my strong sense is that the entire process is a fraud. Each ghastly election cycle we are given the false sense that what we voters have before us represents meaningful choice. This is pish. While it is almost certainly the case that had Al Gore made it out of the vile clutches of the Supreme Court he would not have amounted to the same sort of catastrophe as George Bush, I still believe that the general state of the nation would be, give or take a few dozen democracy eroding signing statements, every bit as screwed up as it is under the epic cretin, Bush. But I digress from the precise issue which initiated this discussion, namely the financialization of presidential elections.

Suffice it to say the entire nature of Presidential politics could be radically changed for the better by simply making one significant alteration, that is shortening the election season by roughly two thirds. This would remove the death grip that money, especially big money, has on Presidential politics. But because we have about as flaccid a polity as can be imagined, and since, as Frederick Douglas observed, "power never relinquishes its grip voluntarily", it isn't going to happen.

Goodness, when I think of the capabilities of our modern electronic information apparatus coupled with the vacuousness of what is on offer from the majority of the candidates, there is absolutely no justification for the entire rigmarole of campaigns, debates, primaries, party conventions, (followed by more debates), and finally, mercifully, general elections, to last more than three months, tops. Does anyone disagree?

WEIMARIZATION!

The Fed followed the script today, with gusto, and as a result the currency of the realm is once again fixed on a catastrophic course. The Fed administered a surprise half point reduction of the fed funds rate, and the same for the discount rate. The criminals of Wall Street rejoiced their stay of execution and sent shares crashing upwards. Their stay won't last though, and when the commutation is reversed, as it must be, it will make what occurred in the stock market a mere month ago look like the proverbial Sunday stroll.

A strong hint of the ugliness that lies ahead occurred in the dollar pit as the greenback was hammered lower on news of the rate cut. Going forward it will be beaten down even more savagely than heretofore as the upshot of a precipitously falling dollar will likely result in capital flight from the U.S. That's right, foreigners and foreign governments, who, to put it mildly, have been shafted over and over in myriad ways for years, are going to say "no mas" to any substantial investments in dodgy dollar denominated assets. Today's action in the bond market, a market which dwarfs equities, evidenced long rates staying put, and in some cases even moving higher. The bond market, which has an I.Q. of 130 compared to the equity market's double digit I.Q., gets it. And It is screaming that interest rates at the long end will ineluctably head higher and higher and higher as they must to attract foreign capital that is just now running for the exits. Make no mistake, the ever increasing cost of capital going forward will be massively deflationary as business and government alike starve for the lack of funds available to conduct their affairs. So the Fed's action is for naught except for temporary albeit wild partying. In the meantime, while we wait for the bull to finally croak, you and I will be paying a lot more for absolutely anything that is imported, which is pretty much everything.

As a banker client of mine recently observed, once governments embark on an inflationary course to relieve indebtedness, it is fiendishly difficult to control. Just so. So as unthinkable as it is to imagine financial conditions here in Freedom's Land becoming as dire as, say, Argentina circa the 1980s, or Zimbabwe today, or perhaps the most infamous case of hyper-inflation ever recorded, 1920s Weimar Germany, we should not kid ourselves that we are so special as to be exempt from the sort of future where wheel barrels full of money are required, literally, to put (a loaf of) bread on the table.

Protesting the Protesters.

There hasn't been an anti-war protest of note since January, so yesterday's large demonstration on the Capitol steps was something of a revival for the anti-war movement. Likewise, it was an opportunity for a bit of vile counter protest by some of the more mindless members of the populace who have swilled the toxic balderdash served up by such folks as President Bush and Senator John McCain. It's beyond fathoming how anyone with a grain of intellect could subscribe to the idea that, "Even though the parents have paid the price, they know the price of losing this war would be too much for any of us to bear." Equally stupefying, though considerably more revolting, is the thought expressed by Marilee Carlson, a chairwoman for Families United for Our Troops and Their Mission, that war protesters are "despicable."

I have news for folks of your persuasion. The WAR was won long ago, but the AFTERMATH of the war- you know, that critical part of the political/military operation that has been going on since the Commander in Chief, (the one I bet you voted for twice), stood on an aircraft carrier attired in a flight jacket sporting "Mission Accomplished"- was lost long ago. And though you may not care, for some time now a substantial part of the nation has decided it can no longer support the continued cost, in lives and taxpayer dollars, to maintain U.S. involvement in what is, by any reasonable assessment, an absolute catastrophe.

For my own part, I see no reason to compound the nation's already considerable discomfort on behalf of an endeavor that was clearly launched in bad faith. In defense of the anti-anti war crowd, (if the following can be considered a defense) they seem to be suffering from a kind of psychosis such that they simply can not admit into their consciousness the possibility that a.) a fundamental and profound mistake has been made, and b.) that extricating ourselves from the aforesaid profound mistake makes far better sense than wallowing indefinitely in a lethal quagmire.

NO WAY OUT!

A recession, and not one of those tepid kinds either, is coming soon to our shores. In fact, a recession is likely already here. The BLS stats are so doctored that when the numbers turn definitively weak, as they did according to last week's official release, one must assume that the employment picture is far worse than advertised. This is just one piece of evidence pointing to an impending recession, but there are far more.

I am not one to crow, well maybe a little, but so far my prognostications from a few months back have been spot on. And since the conditions that informed those predictions have not changed, but rather intensified, I must expect a continuation of events whereby the dollar and the stock market fall, and precious metals, especially Gold, do the opposite. Oh, there will be lots of volatility along the way down, which might serve to fool some folks, but don't be fooled, as a steady deterioration is in the cards for the greenback and for shares.

What seems increasingly clear to this observer is that the Fed can do little if anything to salvage the situation, so those hoping for a rate cut to buoy stocks and other financial instruments really ought to prepare themselves for the worst. In fact, the most recent comments made by the Philly Fed Chief (see link below) seem to be telegraphing that a rate cut is not in the cards when the Fed convenes in roughly two weeks. What would you do if you were a Fed governor, cut rates and risk a run on the dollar with all that entails, or let rates stand pat and watch the equity scene, among others, turn to liquid excrement faster than you can say sub-prime sinkhole? Ultimately the Fed will be forced to cut rates because a depression is more to be feared than hyper-inflation. And while the inevitable rate cuts probably won't have the desired result, one still has to try.


http://www.bloomberg.com/apps/news?pid=20601087&sid=aun1ssvumPyM&refer=home

Sociopath?

I watched football star Michael Vick's recent press conference in the hopes that he might have justified some measure of pity. After all, the man, whose reputation as a decent citizen is severely tarnished, if not ruined, is facing the loss of his career, hundreds of millions of dollars in income, and jail time. Unfortunately, what I saw, and I am no expert in psychiatry, was someone who appeared sociopathic. I do not say such a thing lightly. After all, sociopaths are people without conscience and are therefore the perpetrators of the most heinous crimes imaginable...like murdering a kennel full of dogs by electrocution, hanging, drowning, bludgeoning, etc. etc.

Typically, those with Anti-Personality Disorder, which is a common diagnosis among the criminal element, display no hint of authentic remorse for or real understanding of their crimes. Equally typically, when caught, clever sociopaths, who generally well know the difference between right and wrong but have no compunction about issues of ethics, let alone morality, will cop to understanding the moral compass they clearly lack, and preposterously, quickly claim that they have inculcated it. This is what Michael Vick appeared to do. Dog fighting is wrong he now claims to understand. There is only one problem. Why, after who knows how many years of engaging in such activity, should he? One doesn't anymore unlearn and discard such things in a few days than one walks blindfolded and backward to work.

Ahh, but sociopaths would like you to believe they not only get it, but get it in record time. In this case, the motives are easy to suss out. Vick's sentencing is months away, so finding Jesus (poor Jesus) and offering up that he now knows that dog fighting is wrong, is just the thing to say to get a dog owning judge and one's detractors off one's back. Unfortunately, Mr. Vick, at least to this observer, just wasn't credible.

For me, he gave the game away as to his real nature when he systematically referred to himself in the third person, a typically narcissistic trait. He also, by my runes, did himself no favors by continually referring to himself and his actions as "immature." No, as my wife observed, immature is living with your parents for too long, or not committing to your girlfriend. Training perfectly innocent animals to engage in a savage blood sport, and then cruelly slaughtering the less able ones isn't a sign of immaturity. It's a sign of something badly warped.

NIMBY!

My wife and I just moved to The South End of Boston only to discover that a government high security lethal virus lab attached to the Boston University Medical Center is slated to become part of the neighborhood. By lethal virus, I am referring to the most virulent viral strains known to man like Ebola, Marburg and Anthrax to name a few. The community is being assured by the Feds that the planned lab represents "no serious threat" to the community. I must admit to a personal outbreak of, um, concern at this news. And as language goes, at least for me, "no serious threat" falls well short of seriously assuaging my worries. After all we do live in a time rife with terrorism and false flag events, so who in their right mind would want to tempt fate. I would have preferred a statement that offered that the lab was no threat at all, none, nada, zip, zilch. After all, given that Ebola, for example, causes its victims to bleed profusely from every orifice, and that's just for starters, I have to wonder what a less than serious threat constitutes.

So why couldn't this lab have found a host, I mean home, somewhere other than in the middle of New England's biggest city? I realize that there is a wonderful medical infrastructure here in Boston, but aren't there other considerations, like public safety? Oh, that's right, I forgot, "no serious threat." My wife supposes some zealous administrator, looking to feather his cap, is responsible for luring the government facility here. If so, good for him, and God Forbid it isn't for the rest of us.

Building Bridges... To Nowhere!

An association of Civil Engineers recently rated the United State's infrastructure, which includes bridges such as the one that recently collapsed in Minneapolis, a ‘D’, and estimated the total upgrade cost to be $1.6 trillion. That amount is roughly what has been blown in the Iraq & Afghan Wars." So, offers Jim Willie, the shrewd proprietor of the newsletter, The Golden Jackass.

If one data point could possibly sum up the absolute criminal madness, the lunatic idiocy of our Executive's priorities, and much of the Legislature's as well, that might be it. Putting aside the Afghanistan escapade for a moment, the invasion of Iraq, under baldly false pretenses, has, in effect, left the entire U.S. motoring public, and all commercial roadway and railway traffic, vulnerable to the travails of roads, railways, bridges and tunnels that are literally disintegrating under our collective wheels. This stark reality certainly gives whole new meaning to the, by now, bitterly ironic Bushism, "Mission Accomplished." If Peak Oil doesn't curtail happy motoring in the not too distant future, collapsing highways and such just might. And don't expect the government to come to your favorite local crumbling bridge's aid anytime soon, After all, what with the government's bailout of the big banks, broker dealers and such all but a certainty, there won't be much dosh around to repair anyone's falling to pieces freeway, that is assuming they could be bothered to anyway.

It's Worse Than It Looks!

Though they aren't at present, various financial markets ought to be the center of our culture's attention right about now. The reason is simple. The bond and stock market's behaviour is forecasting recession or worse. And for the (insert number here) time, the Fed will be expected to come to Wall Street's rescue. In fact, if you are the somewhat lunatic, Jim Cramer, the Fed should have come to the rescue yesterday, because "they have no idea how bad it is out there." I suspect the Fed does, Jim, but how would it look if the Fed openly took their cues from you?

Perhaps there will be a Fed induced rally of some sort starting soon. Most market crashes (and make no mistake, we are in the early stages of an equity collapse) don't just go straight down. Then again, I posit that things are indeed different this time as the vaunted Fed does not have the power or clout it once had. More importantly, neither does our economy, not by a damn sight, and that makes a rescue of the sort that have become commonplace over the decades far more difficult to achieve. For what it is worth, rest assured that the monetary authorities will try to bail out the suffering haves. In the meantime, I will not, like some, be screaming for the Fed to do something to save the jobs of those who profited hugely on that which is now falling apart like a cheap suit in the rain.

Prepare Yourselves.

Whether one is an investor or not, the hideous action in the bond and stock markets should be of great concern to all as it presages even more unpleasant events down the line. The banking sector is looking very unwell. Pay attention to the ever increasing drumbeat of well advertised agony coming from the mortgage/credit sector. It seems clear to this observer that we taxpayers are about to get asked to bail out the entities that have greedily and stupidly made an absolute hash out of their balance sheets via stupefying debt shenanigans. Nothing ever changes on the Street or in the world of high finance, as base criminality is first allowed, then fostered, and finally, when the con goes bad, a rescue is organized which is generally paid for by those who were conned in the first place. Lovely.

So what does it mean for you and me?

Here are just a few of the things one should look forward to so to speak.

1.) Lower share prices
2.) Higher interest rates
3.) Higher precious metals prices (after the world's banks and their henchman exhaust their vile precious metals beat down routine)
4.) A sinking dollar (managed as much as possible) in the manner of a terminally ill patient. Think morphine drip.

All of the above are, of course, interrelated, and while the timing of the evolution of, for example, lower share prices, is uncertain, look for late Summer and Autumn to be a particularly scary time.

VICKTIMS!

Dear Atlanta Falcon's Management,

Today I read your team's official response to the accusations against your star quarterback, Michael Vick, in which you state,

"We are disappointed that one of our players -- and therefore the Falcons -- is being presented to the public in a negative way, and we apologize to our fans and the community for that.''

Without reservation I must tell you that in my view your organization's response to the present situation appears woefully inadequate. You are disappointed? Is stating that the Atlanta Falcons are disappointed the best that you can muster by way of a response to such heinous allegations? Where is your sense of perspective and propriety? One registers disappointment when one finds that the weather will be poor for an outside event, or when one has dined at a restaurant and been treated to an overpriced meal with wretched service. However, when one finds that a key member of one's organization, one's family, or one's community has very possibly been engaging in unspeakably sadistic acts of cruelty against helpless animals, in this case, canines, one DOES NOT merely express "disappointment", one expresses, at the very least, deep dismay and shock.

That you were so far off the mark in your response to these sickening allegations speaks of a callousness and insensitivity on your part that is in itself reprehensible. Perhaps the fact that your organization is in the business of exploiting people with extraordinary athletic ability until they can no longer perform due to either injury or old age, may have more far reaching implications than I had originally considered. In any case, by virtue of your paltry response to the allegations against your marquee player, Michael Vick, who it would seem stands an excellent and well deserved chance at being found guilty of some or all of the charges against him, you have proven that The Atlanta Falcons organization is itself unworthy of respect or support.

The Crack up Boom! A Special Report

If you mosey on over to the suddendebt blog, you will see some very interesting charts that portend much higher long term interest rates. How, you may well ask, can a wobbly economy sporting a first class housing bust, and a tapped out consumer, be due for higher rates? It doesn't make sense. Actually it does, if one considers the possibility, if not the likelihood that the powers that be are set to flood the system with credit at an unprecedented rate. It is about as ironclad a law as exists in economics that the more there is of something the less valuable that something becomes. With that in mind, some of you may have noticed that for some time, since roughly 2002, in fact, the dollar has been acting rather poorly against the rest of the world's fiat currencies. That's what happens when supply swamps demand. As this trend continues and even accelerates, borrowers of U.S. debt, who are generally foreigners, can reasonably be expected to demand higher rates as compensation for the falling greenback.

The "crack up boom", a colorful term coined by Ludwig Von Mises to describe a phenomenon seen in such diverse cultures as 1920s Weimar Germany, and 1980s Argentina, is one in which prices for many assets are bid through the roof as folks become desperate to trade in their rapidly depreciating currency for items that will maintain purchasing power. Purchasing power is the name of the game, which is why, though we should not get overly excited by the present action of, for example, the stock market, as it makes nominal new highs (After all, if we have, as I contend, experienced high single digit inflation year over year since, oh, say, 2002, then the Dow Jones would need to be closer to 17,000 then 14,000 to be equal in real terms to where it was at its highs in early 2000.) seemingly on a daily basis, we might equally worry that the market is going to go parabolic as people look for places that might conceivably compensate them for their rapidly eroding currency.

For years now, the monetary authorities have created an environment of revolving asset manias that have, to some degree, masked general economic deterioration. Alan Greenspan, and now, Helicopter Ben Bernanke, aided and abetted by all sorts of dodgy private sector credit schemes, have, for years, literally and figuratively papered over the structural hollowness of our burger flipping, consumer on steroids driven, domestic economy. Over the better part of the last fifteen years the U.S. ecomony has experienced several stock market booms and busts, and most recently one real estate boom and epic bust. And one of the prices we have paid, since approximately 2002, for official and unoffical financial profligacy, is that the dollar has been absolutely drubbed by every other major fiat currency and precious metals.

In truth, the greenback has been beaten down on a purchasing power basis since the inception of the Federal Reserve System, such that a dollar today will buy what a nickel would in 1913. But I only mention that fact to provide context. Fiat regimes, without exception, always end badly, because any system that abandons discipline, no matter what arena we are speaking of, political, military, or financial, is ultimately doomed to failure. However, we may now be at the point of acceleration of the dollar regime's implosion. The fact that we are staring at prospectively higher long term interest rates even as our domestic economy seems poised for a downturn, is merely the most recent and perhaps best sign that things are about to enter a new phase of deterioration.

Tum Ta Tum Tum!

Grab the antacid, Michael Chertoff, head of Homeland Security, has a "gut feeling" that we are in for something nasty from the "tearists" this summer. The queasiness Mr. Chertoff feels may be the result of the recent attacks in Great Britain, or so one is inclined to think. After all, if it happens there, it can (and will?) certainly happen here, right? Of course, being of a "conspiratorial" bent, meaning, I believe that people in power do convene with one another in such forums as the Trilateral Commission, Council on Foreign Relations, and Bilderbeger Group, (to name a few secretive organizations of the powerful) and subsequently plan and implement policies to maintain their hold on the reins of power, my tendency is to think that any terrorism that may occur would be of the false flag variety.

In any event, Mr. Chertoff's "gut feeling" could just be more scaremongering, as there never seems to be a shortage of that these days. In any case, be mindful that whenever the PTB show a desire to have the attention of the populace diverted, a terrorist attack is just the ticket. Recall that 9/11 came in the teeth of the last recession, and nicely provided the lie as to why the stock market and general economy looked sicker than a picnicker with salmonella. My view at present is that the economy here in Freedom's Land, what with such doleful events as a collapsing currency, a fast spreading sub-prime mortgage contagion/housing debacle, etc. etc., is in deep do-do, and therefore the need for diversions of the 9/11 sort, is growing fast. One always does well to ask, when analyzing events driven by we humans, who benefits?

Polluteapalooza!

The vast amount of waste and general carbon foot printing that will ensue as the result of today's Live Earth festivities will be, no pun intended, off the charts, by the time the event runs its course. Live Earth may be as fine a testament to how mindlessly idiotic humans can be as one could imagine. We just can't seem to get it through our thick skulls that nothing less than fundamentally altering our mode of existence will do to successfully address our impact on the planet's general health. Had all the luminaries, functionairies, and the rest truly wanted to make an honest statement about the way forward, they would have made sure that no one performed more than a car, train, or boat ride from home. Attention, pop stars, please park your private jets in their hangers, leave your entourages at home, and check your pampered selves at the door. The Columbian singer, Shakira, the last time I checked, does not reside in Hamburg, Germany. Apparently, Madonna, these days primarily a resident of the U.K., performed in London, though the idea of the Material Girl acting as any sort of a representative against excessive carbon foot printing is beyond stupeying. I know, what a wet, charcoal smudged, blanket I am. However, I appear not to be alone, as more than a few groups and individuals, like Radio Head and erstwhile Who frontman, Roger Daltrey, have, without undue effort, figured out that this latest global feel good initiative is mostly a load of bollocks. Now excuse me while I go fill up my Hybrid.

A Prayer for Scooter Libby.

Surprise! Criminals are running the prison, so likeable, and most importantly, loyal, crooks, such as Scooter Libby, receive a get out of jail free card, while upstanding airhead celebs like you know who can be jailed for over a month for a mere DUI. Well, anyone who puts his name to as many signing statements as King George can't be expected to do the right thing and let a subordinate of Vice King Richard do time. No siree. Neither of the dual potentates occupying the White House really care what you think, and what's more, for them, the rule of law is something that exists to be twisted like a pretzel to suit whatever purposes the King and Vice King desire at any given moment. We'd all do best not to forget that.

So, I've looked into my dust covered crystal ball and here's what to expect next. The latest acts of terror have already energized such human butt cracks as Joe Lieberman to opine that we should have the same sort of ubiquitous camera surveillance as they have in Great Britain. Yeah, sure, Joe, look what wonders those cameras have done for the U.K. By all means, lets copy it. Never mind if civil liberties take another direct hit. Safety first! My advice to myself is I better start writing my congressman right now that I don't want little cameras on every street corner. My appeal probably won't work, but it might make me feel less like the sort of passive citizen-victim that has become common here in (vanishing) "Freedom's Land". In the face of the seemingly endless drive towards a total police state it's the very least one can or should do.

Is The WOT A Hoax?

Today, Britain is at Def Con one, or color code purple, or whatever scheme they use there to indicate a "terror" threat at its highest. For the second day in a row, seemingly extraordinarily incompetent terrorists have bombed a public facility. Yesterday they took out their anger with minimum effectiveness in London, and today it was in Glasgow, Scotland, an erstwhile ship building capital on the west coast. In the latest attack launched at the Glasgow airport, an SUV filled with fuel was deliberately crashed into a terminal. The vehicle subsequently exploded, and at least one of the perps was badly burned. Most of the other members of the jihad attack group are said to have been apprehended. As they say in the U.K.,"fucking brilliant."

There is very little use, or so it seems to me, in asking questions such as why now, if one operates under the assumption that such attacks are necessarily launched by actual terrorists, as opposed to operatives intended to appear as terrorists in the service of a false flag operation. Madness you say? Perhaps, but other than blind faith of the sort sensible folks condemn in religious fanatics, is there a compelling reason, other than massive societal pressure, for you and I to accept the view that we are unerringly presented with, namely that Islamic jihadists are the single greatest menace to our well being, are constantly plotting to do us harm, and are, in fact, responsible for all these bizarre attacks?

The best evidence I have that the WOT is a hoax, (at least here in the U.S), likely designed to allow elites to enact agendas they otherwise couldn't, is the fact that since the attack on the World Trade Centers, the U.S. southern border has remained, for all intents and purposes, as porous as cheesecloth, yet there has not been one attack on U.S. soil since
9/11. I leave it to you to decide if our security forces are that good, or whether it is possible, perhaps even likely, that the threat we have been led to believe we are constantly under is either wildly exaggerated or non-existent.

I Had to Chuckle...Ruefully

So, Wall Street, according to a report yesterday on NPR, is worried about the gap, make that the epic yawning chasm, between rich and poor in the U.S. I doubt they are worried in the slightest about the gap, per se, but they may well be concerned about how the rich are treated when those the rich have screwed (that would be everyone who isn't rich) behave when their painkiller of choice, aka easy credit, er, debt, is taken away. That's a concern I can well believe they have. Well, they won't have long to wait to find out how great the fury of the restless and financially ruined will be, since, in my humble opinion, TSHTF ( see fan on high, and shit on sloppy), with full force sometime later this year and into '08. The last economic collapse of renown was, of course, The Great Depression. We should all gird our loins for tumult that at least rivals the early thirties as the global mania goes supernovae. The housing market collapse here in the U.S. is, of course, far greater in its ill effects than the MSM has heretofore portrayed it, but with each passing day, (see the freshly minted Bear Stearns sup-prime mortgage hedge fund debacle), the ugly truth becomes harder and harder to gloss over. So let "The Street" appear to fret over the financial inequities that they engineered and fostered. I for one am not impressed in the slightest over what is almost certainly nothing more than empty hand wringing.

A Test, This is Only a Test. Part 1

Today I am going to muse on the topic of where to deploy one's hard earned boodle, should one have any boodle (hard earned or not) to deploy. The following is not investment advice, just some thoughts on investments that might offer decent returns or perhaps just safe havens in our volatile investment universe. The time horizon for the as yet to be named investments is not tomorrow, or even next week, though price appreciation between now and then certainly can't be ruled out. To be precise, the investments I have in mind are meant to hold up in real terms, i.e. adjusted for inflation, over the span of many months and years.

My world view is such that I subscribe to Peak Oil and Gas as well as Global Warming, and therefore, as one might imagine, my investment outlook is biased towards investments in natural resources. However, that does not mean I think buying shares in Exxon Mobil, Marathon, or BP, or any of the other major petroleum companies is warranted at this precise moment. Price appreciation in the aforementioned has surely been impressive over the last few years, but there are several factors that make me cautious about such investments going forward. First, we may be, believe or not, and most will surely not, on the cusp of a severe deflation. Perhaps the best evidence that such a scenario is more than a little possible, is that almost no one thinks it remotely possible. In fact, the mere suggestion that deflation might be in our financial future is generally met with scorn and derision. So at the risk of being scorned, I'll explore some deflationary scenarios.

Were Peak Oil to be the proximate cause of a deflation, then oil investments, and most raw material investments would be, for a time, absurdly profitable provided the operations of the aforesaid were not subject to interference or cessation due to armed conflict, sudden crushing taxation or outright confiscation, all distinct possibilities as things would, by an order of magnitude, be more desperate than they are even now. However, were the catalyst for severe deflation be the result of a calamity in the world's financial structure, or due to, oh, say, the outbreak of a global avian flu epidemic, then, petroleum and mineral investments would, along with everything else, collapse like a tin shack in a typhoon.

Obviously, if the inflation we are now experiencing persists, or morphs into hyper-inflation, then any and all commodities will continue to outperform all other assets. Bear in mind that this outcome is the one that the vast majority cling to with an almost religious fervor. It is certainly true that in fiat based economies, which are all we have, all roads lead to inflation, and it is equally true that India and China are incipient economic behemoths seemingly smack dab in the middle of their growth spurts. However, despite these truths, there are massive imbalances in the global economy that will, in time, and perhaps sooner rather than later, rear their ugly head in such a way as to badly upset the happy apple cart that has heretefore given rise to fat profits in global shares. Next time, I will discuss my favorite investments. Hint: the title of my next post will be Amber Fields of Grain.

Part III Middling Through

Is it an accident that the proliferation of, ahem, opportunities to make a buck through the crucible of humiliating public spectacle seems to have grown by leaps and bounds at the same time that the purchasing power of the dollar has steadily collapsed? As the average American finds it more and more difficult to stay afloat, let alone get ahead, the temptation to gamble, with one's self respect as well as one's savings, has become, for quite a few, irresistible. How else are we to explain the growth of such desperate and false vehicles for self advancement as Big Brother, Fear Factor, Survivor, and, of course, casinos, ocurring at the same time that the standard of living of the average American has deteriorated.

At least casinos have the relative advantage of being somewhat private affairs, where one loses in front of the house and not in front of millions of TV viewers watching with Shadenfreude infused delight. I have no doubt that another factor that drives so many of hoi polloi to degrade themsleves on unreality based canned "entertainment" is the ramping up over the years of the culture of personality, where one is made to feel that the only humans that matter are those in the public eye, regardless of why they are in the public eye. We are, in short, a desperate culture, and while the proximate reason for the cancerous increase in unreal TV is due to an unhappy accident where a series of writer's and actor's strikes necessitated the manufacture of cheaply produced content, the reason it all persists is because there is an endless supply of folks who have no compunction about making complete asses of themselves, and, plenty of voyeurs who are only too happy to watch them do it.

Interestingly, the public display of desperate avariciousness started pretty much with the advent of television, some sixty years go, but the game show craze didn't really take off until the nineteen seventies, another period of economic distress, when game shows became ubiquitous on the boob tube as evidenced by such charmers as Let's Make a Deal, and The Price is Right. Of course today's offerings make those shows seem quaint, tame, really, by comparison. Ummm, the scent of progress, rarely has it smelled less sweet

Part II Middling Through

The connection between the destruction of the middle class and dwindling Democracy here in the U.S. is almost certainly a complex one. However, there is no doubt that the national condition of poorly distributed wealth has been thoroughly aided and abetted by a Federal Legislature and Executive that are, for all intents and purposes, owned and operated by corporate interests. The jury is in, and Globalization, and its progeny, NAFTA and GATT, to name a few examples, have done nothing to sustain, let alone elevate the coffers of our once solid and sizeable middle class. Rather the opposite has occurred, as the spawn of our new economic world order has, for the most part, only elevated the accounts of the heretefore wealthy. It is they who have seen the value of their holdings vastly increase. This is due in no small measure to companies that make everything from cell phones to sneakers being able to easily employ dirt cheap labor overseas. This, in turn, has allowed those business interests to raise their already profitable bottom lines. The Global village has been and is being pillaged, and now, glory be, members of the investment/trust fund class have an even bigger slice of the pie than ever before.

Karl Marx may have been dead wrong about the ultimate evolution of Communism into the dictatorship of the proletariat, but he was most certainly correct about the existence and nature of what is often snarlingly referred to by some members of the better off as, "class warfare." Now, as in Marx's day, class warfare is being vigorously waged in the U.S., but far more successfully by those at the top who have managed to insure that the much ballyhooed ownership society is, instead, one where the vast majority are owned, lock, stock, and barrel. The evidence for this is plain. Witness the very handy changes in the law making debt forgiveness, less, uh, forgiving. At the same time, not surprisingly, (though no less sickening for not being so), the Legislature has done nothing by way of providing necessary oversight of a rapacious banking sector thereby insuring that the number of citizens requiring debt relief in the coming years-see the ongoing housing debacle- will be steady and more probably steadily high. Well somebody got what they paid for, but it sure wasn't the middle class who most recently gambled on the Democrats to deliver a bit of Democracy. To date, however, the ever shrinking middle class seem to have lost that bet big time. Which brings me to the next subject in the next installment in this series, namely, our casino culture.

Part I Middling Through?

There are oodles of sites in the blogosphere the vast majority of which I am unacquainted with. I imagine that most blogs, likely mine included, are not sufficiently compelling to inspire repeat visits. However, there are a few that I have encountered that are worthy of regular stops on my internet forays. One I have in mind, an estimable blog entitled, SuddenDebt, is an excellent site for musings on economic and financial goings on here in the U.S. and around the globe. I urge anyone possessing even a modicum of interest in such matters to drop by. In fact, it is the most recent entry on suddendebt.blogspot.com that has inspired today's little jeremiad which will represent the first part in a series on the subject of the dissapearance of the U.S. middle class.

By now it is well known that globalization has delivered something like the coup de grace to the existence of decent, well paying, semi-skilled employment (aka manufacturing jobs) in the U.S. What may not be as well known, let alone acknowledged, is that concomitant with the vitiation of the U.S. manufacturing base has ensued the not coincidental erosion of Democracy.

With the removal of well compensated, semi-skilled employment, the U.S. would no longer have what still passes for a middle class save for the easy issuance of debt to just about any homeowner regardless of their financial circumstances. Once, it was taken as an article of faith that the middle class was the essential component supporting widespread social stability. To further flesh out the idea, the thinking went that the middle class acted as a buffer between the prosperous few and the restless many such that the very existence of a middle class gave hope to the denizens of the lowest echelon that it was within their reach to elevate themselves above their difficult and deprived circumstances.

But what does this have to do with Democracy? More precisely, what does the dissapearance of this nation's middle class have to do with the erosion of Democracy in the U.S? Stay tuned.

Prevent Forest Fires.

Nature has mechanisms to cope with excesses and imbalances, which though often unpleasant and destructive, tend to be necessary and ultimately beneficial to the long term health of any ecosystem. In the case of forests, where old trees tend to become an obstruction to new growth, fires act as a remedy of sorts, allowing the forest to replenish itself. Call it creative destruction. Nature, however, like its almost infinite creations, isn't perfect, and so one must cope with, so to speak, collateral damage, where fires not only destroy old plant life, but a lot of old (and not so old) animal life as well.

Recently I was pondering the many ways in which mankind has seemed, the operative word being seemed, to skirt naturally occurring corrective processes, and what the consequences are likely to be. The short answer is there are far too many examples outside my understanding to answer my own question. However, an educated guess tells me that if the premise that imbalances in nature, and for that matter, outside of nature, are destined to be corrected, is rock solid, then every sea wall ever built is a goner, perhaps spectacularly so, as in the case of New Orleans in the aftermath of Hurricanes Katrina and Rita. In the realm of economics, a man made phenomenon that intersects with nature, as everything man made ultimately does, it seems apparent to this observer that the powers that be have successfully avoided natural corrective processes in markets through the seemingly endless creation of debt.

Imagine, if you will, a giant, water tank located right next to an enormous forest. The water tank not only has a vast, apparently inexhaustible supply of water, but an elaborate and far reaching sprinkler system with which to douse the forest should even the mere hint of a fire arise. Of course it's all a nonsense, since outside of sunlight, which majestic as it is, is itself not eternal, there can be no inexhaustible source of water. The terrifying upshot is that at some point, who knows when, all the old growth that has been propped up by the elaborate water tower system is going to go up in smoke, almost certainly with more collateral damage than would have been the case had the system been allowed to naturally restore itself. So, while playing with matches, as per Smokey the Bear's warning, is a no no, a bigger no no might be not allowing any conflagration at all.

Bye Bye U.S. Republic

As we enter the Memorial Day weekend, I'd like to strongly suggest folks pick up a copy of Chalmers Johnson's, "Nemesis: The Last Days of The American Republic." If, for some reason, you think purchasing the aforesaid treatise simply isn't in your plans, perhaps you will consider acquiring the June 14th edition of the New York Review of Books instead. In Nemesis, Mr. Johnson makes striking comparisons between the present geo-political incarnation of the U.S. empire and that of Great Britian and Rome at their respective imperial zeniths. His comparisons are compelling, and though they represent the better part of the foundation for his argument, they are by no means all he has to offer by way of evidence to buttress his thesis that the American Republic is, in fact, in terminal decline.

For those who wish to see, none too veiled signs abound to indicate that the United States has indeed ceased to function as anything but a facsimile of a Republic. Indeed, evidence can be found in more pedestrian realms than those where the conduct of U.S. Foreign policy claims center stage. Por ejemplo, the realm of government statistics, particularly that area that pertains to the general economy, is a marvelously fertile field in which to locate appalling signs of rot. As some great sage once observed about the waging of war, "The truth is always the first casualty." Apparently this is also the case with respect to the official calculation and reportage of economic statistics in a decrepit Republic. Here in what was once proudly referred to as Freedom's Land, official tabulations of employment, consumer and producer price levels, general economic growth, and productivity, home sales, home prices, commodity prices, and on and on and on, are buried beneath moutains of statistical piffle such as hedonic price adjustments, seasonal adjustments, Birth-Death models, and many other metrics that seem designed to do nothing so much as make the U.S. turd blossom economy appear to look, act, and smell like a rose blossom.

The whole process has become such a sham that when official numbers are released, markets often behave as if there was no news released at all. Such was the case earlier this week when the latest real estate sales asserted that home sales had risen 16% percent last month. Even the most casual observer of the ongoing housing debacle could immediately see that such numbers were more reminiscent of the product of a boiler room operation than, say, the United States Commerce Department. As such, the stock market greeted the news with a severe across the board markdown of real estate investments. Such is day to day life in a Republic whose days remaining as a Republic are numbered.

The NBA?

Yes, the National Basketball Association, the nation's oldest professional basketball league, the one that used to proudly air commercials featuring various preening actor fops blurting, "I love this game?" The very same NBA that is in the midst of its playoffs, and a mere week away from the championship round. Well, as fate would have it, at roughly the same time the aforementioned giddy commercials were first being aired, the league was at the apex of its popularity. Alas, those halcyon days are gone, as most folks, even those who still watch NBA games with some regularity, don't really love it. Old habits are like that, hard to get rid of even when the pleasure principle that once inspired them is as withered as the skin on a month old mango.

So, while the league, as it likes to refer to itself, still rakes in money hand over fist, what with all their clever merchandising schemes and such, the NBA's salad days, like those of the once holy NBA trinity, Magic, MJ, and Bird, are long gone. I say this as one who once loved watching NBA games. In fact, for all my youth, and into early middle age, I was interested in the goings on of the NBA. But gradually, for a variety of reasons such as a degraded style of play, a certain punitive top down administrative rigidity such that players are treated as chattel, precious and overpaid chattel to be sure, but still chattel, I have mostly lost interest. There is also a sense that like the larger culture in which the NBA inhabits, it too, like so many far more important institutions, has become a bloated and not so faintly corrupt entity that might well serve society better were it dismantled, re-thought, and then perhaps, just perhaps, rebuilt in a vastly different manner.

Perhaps I wouldn't feel as strongly as I do that the world would survive nicely without the present day incarnation of the NBA had I not witnessed the aftermath of one of the most mind numbing featured events of each NBA season. I am speaking of the NBA's "draft lottery", where the five worst NBA teams are given the chance, the operative word being chance, to have first dibs on the collegiate rank's best prospect. That's right, the NBA doesn't, as in every other sports league, just automatically award the team with the worst record the first draft pick. On no, instead, in their infinite wisdom, the NBA has a hopper into which go the highest number of ping pong balls sporting the logo of the franchise with the worst record, thereby guaranteeing that the team with the absolute worst record not only has a chance- a 75% chance apparently- of not getting the top pick, but of not even coming close to obtaining the top pick. Smart! And indeed, on more occassions than any egg head statistician is sure to deem remotely possible, the worst team, as per the NBA's dunderheaded system, has been screwed out of the top pick. Such was the case again last night, as the poor, hapless, Memphis Grizzlies-formerly of Vancouver- thus explaining such a senseless name for a team from Memphis, wound up with the fourth pick. The team with the second worst record, the Boston Celtics, a once wildly successful franchise, but now perhaps the most unfortunate in all of sport, wound up in the fifth and last, nay, worst position. To a once very interested party such as I, never has the phrase, "NBA action, it's fantastic", seemed more ruefully ironic.

We've Been Had...Again!

More and more it appears that citizens who voted for Democrats in the last mid-term election hoping that a congressional overhaul would usher in a new mode of federal governance are seeing their hopes dashed unceremoniously. As a jaded, er, wizened observer of the machinations of politicians of all stripes, I must observe that with respect to dashed hopes, the handwriting was on the wall pretty much from the get go when the newly installed speaker, Nancy Pelosi, went out of her way immediately after the election to proclaim that impeachment of President Bush was off the table. Some observers surmised that perhaps she was just talking nice for appearances sake. Alas, on that score, the California congresswoman seems to have meant what she said, and more’s the pity, since less than half a year after the big Democratic victory, not only does the Chief Executive’s hold on his office remain unthreatened, but so do most of his policies and initiatives.

A close examination of the legislation connected to the war in Iraq reveals the thinnest of gruels where prospective troop withdrawal is concerned. In fact, rather the opposite has transpired as the Democrats, despite some grumbling, have gone along with the idiotic “troop surge”. But that’s just the beginning of their weak acquiescence to the nasty, if not insane, status quo. A quick examination of the latest trade agreement, crafted just a tad too easily between Democrats and Republicans, evidences another sellout as the tough pro-labor language in the agreement only applies to those two trading behemoths, Panama and Peru, to which I say, piss poor.

Amnesty, Yea or Nay?

It's a new and very happy day in the U.S.A for the illegal immigrant cohort, a group that is estimated to number in the neighborhood of twelve million. Here in the Commonwealth of Massachusetts there are thought to be nearly two hundred thousand "illegals", several of whom, I must admit, I have personally employed. Frankly, I'm not sure if the official estimates can even be remotely trusted; I certainly don't trust official economic statistics, and with ample reason. In any event, everyone can agree that the numbers are substantial and meaningful. But that is where general agreement ends on this very contentious issue, as almost no group of any size can agree on the adviseability of instituting what is essentially an amnesty program.

Some critics assert that the new, pending legislation is nothing so much as a cop-out, and it is hard to argue that the authorities, who would prefer to craft a new law rather than enforce the onerous old one, are engaged in a massive dodge of responsibility. Another valid criticism, and one I find especially compelling, is that the new legislation is a bonanza for large, and small business interests, rammed through by the best Congress corporate money can buy. After all, if globalization has mostly been about exporting jobs where labor was plentiful, and most importantly, cheap, this is nothing more than an inversion of that process, where cheap and marginally skilled labor is, if not imported, clearly accomodated. So for the price of five thousand depreciated greenbacks, illegal immigrants who can prove they have resided in Freedom's Land prior to the beginnning of the year, can place themselves on the track for citizenship. For my own part, as the new legislation goes to the House for possible final approval, the one question I will continue to ask myself is, who benefits?

Condi's Cold War Denial

There's an old adage attributed to Otto Von Bismarck, "Never believe a rumor until it has been officially denied." Following on that wisdom, as per Condoleeza Rice's public statement that despite a few niggling differences, relations between the erstwhile implacable enemies is fine, one can now assert that the U.S. is, in fact, in the midst of a revived Cold War with Vladimir Putin's Russia.

Strictly speaking, to say that we aren't in a new era of hostile relations with Russia is balderdash, as the evidence shows the two nations are on the opposite side of just about every major issue one can name. What's more worrying, for those inclined to be worried by such things, is the reality that Russian hostility is but one branch on a tree with Chinese, Venezuelan, and Iranian appendages. These nations are easily as hostile to the U.S. as Russia. What's more, according to Gary Dorsch, 77% of the world's 1.15 trillion barrels of oil reserves now reside in the hands of government owned oil companies in nations like the aforementioned.

As this data suggests, at least to me, our new Cold War, which is neither all that cold nor neccessarily centered on one primary adversary whose word for no is nyet, isn't a conflict that has much to do with ideology, but rather, resources, primarily oil and mineral wealth. So, thanks, Condi, for perhaps unwittingly pulling the mask off our crummy relations with the Russian bear, and giving us a big fat warning to buckle up in preparation for a rough ride.

Inflation or Deflation?

It is accepted wisdom that in a fiat currency system all roads lead to inflation. I, myself, have trumpeted that view many times on other forums. If we operate on the premise that the trump card where the U.S. economic system is concerned resides in the dollar's reserve currency status, particularly with respect to the petro-dollar trade, then hyper-inflation presents a most dangerous course to take by the monetary authorities. Why?

The U.S. is able to engage in its financial profligacy, to owe the world as much as it does, because the world trades the essentials, particularly petroleum, in dollars. Remove that prop, and a hyper-inflation most assuredly would, and the U.S. economy resembles an economic banana republic almost overnight. The fact is the world is trying to get out from under the petro-dollar regime and there really is nothing that can be done other than to forestall the day of reckoning.

Clearly the dollar's demise is being managed, as in the manner of a terminal cancer patient, in a slow motion sort of way. Let me amend that, it appears as if the dollar's slow death is being managed. However, the look of an orderly decline may be just a mirage, or a temporary condition that will give way to a runaway debacle at some unspecified point in the not too distant future. I am keeping my eye on multi-decade support in the dollar that is being tested for either the fifth or sixth time, right now. In my view, all bets are off as to how ugly things will get when, there is no IF as far as I can tell, the multi-decade support fails.

The deflation argument has more going for it than one might be tempted to think from the standpoint that Peak Oil, Peak Resources, in general, are ultimately massively deflationary since they in essence create enormous and irrevocable demand destruction. As some of you may know, demand destruction and Peak Oil/Resources go hand in hand. If folks like Matt Simmons of "Twilight in The Desert" are right, we should expect unhealthy doses of inflation first, (sound familiar?) followed by deflationary collapse.

Of course sans peak everything, the advent of the prosaic phenomenon known as pushing on a string, where available credit/debt is not tapped because those who would tap it are tapped out, may wind up providing the context for the onset of a runaway deflation. The ongoing housing debacle comes to mind as a state of affairs that will have a great deal of influence on the U.S. consumer's wherewithal going forward; And that in turn will have much to say about which outcome we are faced with, inflation or deflation. Make no mistake, a defeated consumer means a defeated economy.

Carbon (Dis)credit

It is the middle of the merry month of May, and the ongoing lethal game of Global Warming denial continues unabated by the U.S. government. The latest evidence of the U.S. government's fierce recalcitrance towards the realities of Global Warming comes in the form of U.S. attempts to weaken the language of a planned G-8 climate change declaration. In brief, the G-8 declaration includes "a pledge to limit the global temperature rise this century to 3.6 degrees Fahrenheit, as well as an agreement to reduce worldwide greenhouse gas emissions to 50 percent below 1990 levels by 2050", and it is this language that the U.S. seeks to eliminate.

And while this smacks of another embarrassing, if not disgraceful obstruction by the U.S. government of international attempts to deal with the effects of Global Warming, what may be at least as troubling is the gradual acceptance and proliferation of a mode of dealing with Global Warming known as the carbon credit, or emissions trading. Carbon credits are, in short, a tradable permit scheme that attaches a monetary value to greenhouse gas emissions. The ownership of, for example, one carbon credit, confers the right to emit one ton of carbon dioxide. With the advent of the carbon credit, we have a hideous real world example of capitalism at its most perverse, as a fixed dollar value is placed on the cost of polluting the air.

As George Ure of Urbansurvival.com observes, the carbon credit amounts to the following:

"Upon discovering your house is on fire, instead of calling the fire department or grabbing a fire extinguisher, you instead opt to set up a fund trading pool with your neighbors and begin trading futures on your house. Your thinking is that at some point, if an investor in your housing pool is really interested in securing their position, they [not you ] will call the fire department or actually do something."

In our case, the burning house in the above scenario, is, of course, the very air we breath, and the carbon credit trading scheme that is created to address a crucial factor associated with the causes of Global Warming, simply takes on a life of its own as traders discover there is a profit to be made buying and selling not just pork bellies, precious metals, t-bond futures, grains and oil, but what amounts to oxygen futures. Score one for Capitalism, and zero for the environment.

Good Cop, Bad Cop

The situation between the U.S. and Iran is one that seemingly won’t fade away, however devoutly some of us wish it would. And while it is arguable which nation, Iran or the U.S., stokes the flames of the present low intensity contretemps the most, (I would argue the U.S does by a wide margin for several simple, but not simplistic reasons. First, the U.S. is clearly on a mission to re-assert control of the region’s energy supplies and Iran is a key player displaying an alarming penchant for defying U.S. aims in the region. Second, the U.S. has, despite Iran’s growing ties to Russia and China, far more wherewithal, geo-politically, militarily, and otherwise, to be disruptive.) it is clear that a near term resolution of U.S. and Iranian differences is not in the offing.

In fact, the International Herald Tribune reports that Darth, er, Dick Cheney has recently issued another warning to the Iranians. And while the substance of the rotund Vice President’s latest adumbration was nothing new, the location used to deliver his address, the aircraft carrier, John C. Stennis, located a mere 250 miles offshore from Iran in the Persian Gulf, was unique in its menacing aspect.

Interestingly, as the International Herald Tribune reports, “It also came just a week after Secretary of State Condoleezza Rice talked briefly and inconclusively with Iran's foreign minister, a step toward re-engagement with Iran that some in the administration have opposed.” http://www.iht.com/bin/print.php?id=5675647

Are we in the land of good cop, bad cop, with respect to the present U.S. posture towards Iran, and if so, what, if anything, can be gleaned by this new strategy? Is this indeed even part of a new, well thought out approach? After all, we are talking about arguably the most bungling administration in U.S. history, so it is more than reasonable, it is prudent, to wonder if this is merely the sign of further disarray and confusion on the part of the Bush administration as it oscillates between different approaches at bringing Iran to heel. We will have to wait and see, but given the miserable track record of the Bush administration, it is very difficult to give the benefit of the doubt to the notion that the apparent turn towards good cop, bad cop is more by design than not.

Hideous Neighbors.

We've all had them, no doubt some of us are them. I well recall Mrs. Thacker who lived at the end of my street when I was growing up in the West End of Richmond, Va. Mrs.Thacker was, to put it bluntly, grotesque, a withered, old, neighborhood scold who systematically pilfered ours and other neighbor's garbage desperately seeking prurient material such as...gasp... Playboy Magazine, the mere existence of which she could then use to justify her predisposition to be scandalized by her obviously morally degenerate neighbors. Deeply reminiscent in her demeanor and raison d'etre to Mrs. Gulch/The Wicked Witch of The West, Mrs. Thacker appeared to live no life to speak of, except one where she could, with a sort of grimly lunatic determination, project onto we poor neighbors all manner of awfulness. Her reward for her warm and winning presence was to one day have all the neighborhood's children present her with a chocolate cake laced with ex-lax.

Lamentably, I have, of late, been reminded of the aforementioned meddlesome monster by some of my present day neighbors who have, themselves, fatally meddled in my and my wife's plans to build an addition at the back of our very small home. In fact, our home is the smallest on the street by a wide margin and sits on a very peculiarly shaped lot, a concave plot that vanishes to a two foot wide point some fifty feet or so from the back of the house. And while it was absolutely the case that we required a variance to build, it was also equally the case that had our abutting neighbors not objected as they did, the zoning board would have granted us the needed variance. The objections from all but one source were specious, claims of loss of sunlight and view were systematically shown to be without merit by me and the architect, but as we were dealing with a wholly unreasonable group on a holy mission to save the neighborhood from certain ruin, (this despite the fact that the project was deemed an aesthetic improvement on the existing house and a boon to the neighborhood by the historical commission) the zoning board, in fear of a lawsuit, refused our petition. I know this to be an accurate account because I was told this by a city employee who works with the zoning board.

Having lived in the neighborhood for many years, I knew several of my closest neighbors to be less than friendly, at times haughty, and in the case of one, a bit of a bully and busy body. However, I did not realize the degree of pettiness and blatant hypocrisy (one abutter, who has made several external improvements to her own home, actually tried to block the project on the basis of construction noise) that would emerge in response to our attempt to put on an addition. I imagine there are likely several morals to this story, one of which must be, when contemplating a building project that requires historical commission and/or zoning board approval, know they neighbors and know them well.

Whither Faith In The Feds.

For what it is worth, a recent major poll indicates that Americans are at least as disenchanted with Congress as they are with the President. Had I been polled, I would have expressed a similar sentiment, since Congress seems to display nothing so much as a peculiar and unsavory mixture of mendacity, fecklessness, sheer lunacy, and, of course, corruption.

And as is it so happens, Congress is the arena supplying much of this election cycle’s Presidential, er, kindling. I imagine you know most of the names, and I will be anxious to know your thoughts on the lineup. I do use the term, lineup, advisedly. Mitt Romney, a powerful candidate, but not of the legislative cohort, comes immediately to mind as one I will avoid with prejudice. Perhaps this is because he was once governor of the Commonwealth of Massachusetts, my home, and I know Mr. Romney to be a person who possesses a surfeit of ambition, but little else that should inspire the electorate, unless, of course, knowledge that the former governor's favorite novel, some woeful tome from the oeuvre of L. Ron Hubbard, yes, that L. Ron Hubbard, is appealing.

But my brief discussion of one candidate aside, it is a serious matter that we Americans are deeply disenchanted with both the Legislative and Executive branches of our government, and I maintain the frightfully obvious position that it augurs poorly for social stability going forward. I will also argue, perhaps less obviously, that a broad distaste for the political class inside the Beltway is indirect evidence that the nation's economy, despite Wall Street’s incessant happy talk, is in rapidly deteriorating shape.

The ongoing nationwide housing debacle, the damage from which is systematically discounted by the MSM, has far from run its course, or exacted its full pound of flesh from the general economy. In the meantime, for other reasons, the average American is losing purchasing power at an alarming rate as the actual rate of inflation runs far in excess of official government numbers. I suspect that John Q. Public is increasingly aware of the chicanery that would have him believe falsely that the contents of his wallet are not under attack. And while the hideous bungling of our criminal escapade in Iraq is almost certainly a more substantial tributary to the national mood of discontent with Federal officialdom, the corrosive effect of embedded economic mendacity, whether it is known consciously or not, should not be underestimated.