Thursday, July 26, 2007

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.

Thursday, July 19, 2007


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.

Friday, July 13, 2007

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.

Thursday, July 12, 2007

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?

Saturday, July 7, 2007


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.

Monday, July 2, 2007

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.