Friday, July 10, 2009

who will be bitten in the end?

The Commodity Futures Trading Commission has indicated in testimony before Congress this week their intention to crack down on speculative trading especially in oil without waiting for legislation. It seems much of the worst abuses were illegal all along but the Bush Crime Family simply refused to enforce the law. (sah-prise, sah-prise) In the same vein, the DOD is again moving to enforce anti-trust laws on the books since the 1870’s and not enforced since the 1970’s. At least this is what the Obama Adm. says they are doing. I’m not selling my position in canned goods.

The Obama Adm. has also stated they will "pull back the veil" on the people that have been doing the market manipulation that brought us to this point. The small problem is that many of the people who work for Obama used to work for these same companies. There is an old saying about ex-poachers making the best game keepers. We shall see.

Still even if Obama’s regulators and prosecutors move aggressively to contain this pathogen they still have to deal with the underlying problems this disease has caused. It has so weakened the body of our economy that there is a risk of imminent death of our way of life or at least so crippling that democracy could become a wistful memory.

Economic numbers continue to track the slide of 1930 and many are worse, especially if you peel back the whitewash that has been laid over the methods the government uses to make its reports. For example the government has been denying the true number of homeless people but if you look at the numbers of homeless school kids, it is clear there is a massive problem. We know this only because of a law passed some years ago that requires schools to keep these statistics.

The things that keep these problems from being more obvious is that the social safety net is keeping us from having millions of starving people in the streets and the credit card from China is keeping store shelves in the US filled and that keeps people working in the service economy. This is all being maintained by printing money, these dollars are becoming increasingly difficult to unload on anyone. The global instability over the past year has driven smaller countries toward the Dollar but that trend is reversing and at some point will either become a rush to get rid of Dollars or they will simply fade away as they are replaced by other currencies from countries who actually have something to sell.

Republicans chant that our problems are from Americans not living with in our means. But Republicans are completely dependent on this play money that isn’t really worth anything. Hypocrisy is a way of life for Republicans but at some point the reality of this has to grow teeth. The question is who will be bitten by this.

Thursday, July 9, 2009

New normals in dating ahead

New unemployment claims were down 52,000 last week but economists are predicting that this was just holiday week blip in reporting and expect next weeks numbers to be back up well over 600,000. Last week's number was still 200,000 over this week last year. The number of continuing claims rose an alarming 159,000 last week to set yet another record and this number does not include people whose benefits have run out. The US unemployment rate is expected to pass 10% in July with the real figure close to double that.

15 million adult kids were living with parents last year with 55% of college age men (18 to 24) living at home. This was last year’s number, this year’s will be much worse with job offers to graduates at record lows. Men are 70% of the newly unemployed in the past 18 months. One of network infotainment shows this morning used this number as the basis for a segment on dating, the burning question for young women; would you date a guy without a job? Why not, since it’s the new normal.

The major economies of the world are continuing to push for non-dollar trade and China is buying anything and everything from anybody that will still take dollars. We are in for a lot of new normals. A guy that lives with his parents could be the new "catch" compared to the guy that lives in box under a bridge or maybe it will be the size of the box he has or how nice of a bridge he lives under.

Monday, July 6, 2009

Preservation of Assets

From Sam:
you haven't said much about what the labels on the canned goods should read, My thinking, they should read, maple leaf, krugerrand, eagles, and a case of yuans.
I would love to hear your thinking on the preservation of assets.

From prairie2:
there are lots of books on how to protect your assets from society's meltdown. The problem is that they all work from a set scenario of the author's choosing. While there is always something to be gained from prudent planning there is the "best laid plans of mice and men..." factor to be dealt with.

Knowledge is the one thing that can't be taken away from you and the only real safety is in numbers. That being said you might be able to gain more friends in a real crisis if you can feed them, than if you have a safe full of Krugerrands to trade for a loaf of bread. Still, I would act prudently in regard to any assets, you can't eat paper either.

Sunday, July 5, 2009

Gated Communities or Feudal Lord Compounds?

From Anonymous:
No one in charge wants to admit that we need to change the American model of cheap crappy goods to keep Americans consuming. It is a model that at some point has to fail but Wall Street calls the tune and what is good for Wall Street isn't good for Main Street or the middle or lower class family on Mockingbird Lane.BUT most Americans are whistling past the graveyard. They know it is there but somehow they think they will avoid it or some miracle will happen or maybe it will not happen until they are dead. Wall Street thinks that somehow they will be immune to the effects of the system falling apart, gated communities, guards and so on but if people have to quit consuming since they can't afford to consume much of anything the system will collapse and take most everything with it. They will not be safe.

From prairie2: there are countries where the very few own everything and everyone else is crushingly poor. If Republicans want to live like this why don't they leave us alone and move to Somolia?