Saturday, July 7, 2012

Like a duck on a gold bug

Gold surged briefly in the middle of the week, but it's back down again now. In case you are new to this site and haven't heard me rail about the stupidity of buying gold, here goes.

Gold is a commodity, its price is set by a relative handful of traders. At $1600/oz it's less than its peak in the early 80s when adjusted for inflation. The $800 price then, would need to be $2400 now. If you bought gold during that frenzy and held onto it, you have lost money. Even if you bought gold at $400 a few years ago, inflation will eventually consume any profit, even if the price doesn't plunge as it did in the 80s.

Okay, if you have more money than you know what to do with and it makes you feel good, like buying a sports car, have at it. A safe room under your house would probably be a better investment in security, and it won't lose value from inflation. If you can't afford that, consider canned goods, you can't eat gold, and if things are that bad, nobody will sell you food. Maybe they would trade for ammunition, or vice versa.

As for the fancy freeze dried survival food, I understand it tastes worse than 50 year old canned goods. Any can that isn't leaking or swollen is safe to eat in a pinch. The one selling point that the dry food people make is that you can carry a month's food in a back pack. Don't forget a month's supply of water in your canteen. They want an awful lot of money to insure against a scenario you really want to avoid, going hiking with all your food.

Right wingers like to tell me how they hunt (me like real man) so they can live off the land. Along with all the other millions. Game becomes scarce after the first morning of hunting season, with everybody hungry they will be hunting one another after a few days. Knowing what weeds you can eat, and how to find edible roots will get you a lot further. Probably a good idea to wait for the hunters to eat each other before going out. They will eat the dried food back packers first.

It's almost impossible to have a scenario where there is no food. More likely it will just be hard to get, and expensive. Those canned goods will seem like an excellent investment then.   

Friday, July 6, 2012

Would we need to shoot Cracker-backs at the border?


In June, the private sector added 84,000 and government cut 4,000 jobs. The good news is that with government revenues stabilizing, there are signs that the massive losses in public employment may be coming to an end. Still, since May 2010, the government sector has cut 1.04 million jobs. At the same time, since February 2010, the private sector has added 4.35 million jobs. The thing is that most of these government job cuts occurred in the Red states, and they are same states that aren’t producing private sector jobs either. Blue states are even adding government jobs as their economies start to recover.

Another part of the problem with slow job creation is the lack of skilled workers, but businesses refuse to provide job training, or pay high enough wages to allow workers to go to school. Raise taxes to support education? Of course not.

Spain is in the news again as their bond rates are above 7% and rising. This sets the stage for a Euro meltdown with unemployment above 25% in Spain and rising. American rightwingers spout their righteous rhetoric about lazy socialist Europeans. Never mind that Spain was running consistent budget surpluses before the Wall Street bank crash. They also prescribe austerity and lower wages for these countries, like we have in the Red States here.

The thing is, that if you compare the productivity of the average citizen of  Greece to the rest of Europe, and then do the same for our Red States compare to the rest of country, guess what? The Greeks are far more productive than Alabama or Mississippi. Why isn’t there a meltdown going on in the Red States here? There should be, we all have a common currency just like the Euro.

The answer is simple, the rest of us give the Red States massive amounts of welfare, military bases and government contractor largess. Some states get back as much as $1.20 for every USD they pay into the Federal Treasury. If the EU made these kind of transfer payments to the weaker countries they wouldn’t be in bad shape at all.

So really, to solve our economic problems we need to kick the Red States out and make them go back to their own currency. Would the new Confederate dollar (CSD) feature the portraits of their War heroes like Rush Limbaugh? Or, just their Presidents, Jefferson Davis, Ronald Reagan and George W Bush? We wouldn’t need to put up a fence to keep the Cracker-backs out, just enforce the employer penalties if any of them try to get a job in the Blue States. Unions are also very effective in making sure employers are compliant.

Don’t hold onto CSDs, the exchange rate is likely to go through the floor.
www.prairie2.com

Thursday, July 5, 2012

White House, or Big House?


Initial Jobless Claims are down again this week putting in doubt the prognostication that we’re going into the double dip recession. That would be the recession that the Republicans have been working so hard to engineer before the election. Jobless Claims are in fact down 15% from this time last year. This is of no comfort for those who have become permanently unemployed under the universal corporate policy of never hiring people who are unemployed. A permanent oblivion that workers can be cast into focuses the minds of the Neo-feudal serfs.

Gasoline prices continue fall putting cash in the hand of consumers, and retailers are hoping this will trigger a huge surge in back to school sales. There is a certain amount of pent up consumer demand, and the urge to buy stuff for the kids is usually a leading indicator of renewed consumer confidence.

The central banks of Great Britain, the EU and China have launched stimulus initiatives intended to boost their economic output, or at least hold deflation at bay. The ECB (Euro) effort is minimal, but it is movement in the right direction for a change. China is the only remaining super power, and will do what they need to do to maintain their skyrocket trajectory. (rightwing predictions that it is just a bottle rocket have yet to be fulfilled)

More information is starting to emerge about Mitt Romney’s hiding of his money in offshore tax havens (where there is little if anything paid in taxes and no compliance with the tax system). It’s beginning to appear the Mittens maybe worth a lot more than the 350 million that he shows on paper. We know with a high degree of certainty that he has overseas holdings that don’t show up on his campaign disclosure forms. It’s not impossible that Willard could end up living in Federal housing that’s painted gray and not white. Not that I’m laying big odds on that, even FDR had a hard time putting rich traitors in prison.

The Obama Adm has announced that they will being getting tough with those who cheat in international trade (berr-rummfif China). The cynical could say “why did he wait for the election campaign to do this?”, the truth is that he did slap China with a 99% tariff on tires and a 59% tariff on steel pipe early in his Administration. Republican Judges blocked further action in this area based on a technicality in the law. Democrats were able in this election year to shame enough Republicans into voting to correct this technicality, and Obama is moving ahead with more tariffs.  Dozens of factories with hundreds of thousand of jobs were saved by Obama’s first two tariffs against China. New factories have even been built to replace those sold to China by people like Mitt Romney.

The Wall Street editorial board has come out with harsh criticism of the Romney campaign for their handling of the Supreme Court ruling on Obamacare among other things. They are already lining up to scapegoat Romney for the failure of their own philosophy. Trickle down economics was really Voodoo economics all along, and they knew it.

The fact is that economics is not a mystery that only the Masters of the Universe can decipher. We don’t need to invent new economics as if these are problems we haven’t seen before. We all need to work at this, stop listening to rightwing idiots, but also resist clinging to cynical views that preclude doing anything. Both of those lines of thinking lead to the rich pirate class remaining in charge.  www.prairie2.com

Wednesday, July 4, 2012

Independence from corporate power, or, On this day in history, history repeats

On this day in history a bunch of middle class liberals declared their Independence from the British East India Company (BEIC). They had realized by 1776 that they were going have to leave the Empire to accomplish that.

It wasn't about the colonists being taxed, it was about Bain (oops, I mean the BEIC) not paying any taxes. The Crown had not only exempted the corporation from paying taxes in 1773, but refunded all the taxes they had ever paid. After all they couldn't tax the job creators.

It wasn't conservatives that went to war, they sat it out, much to the consternation of the British who expected their help. They did burn the houses of liberals while they were gone to the war, and throw their wives and children into prison.

Conservatives also didn't pay taxes to the Continental Congress either. After the United States was formed, in the so-called Whiskey Rebellion the Tea Baggers of the day were refusing to pay taxes. President Washington had to put his uniform back on and raise an army to put them down.


George Washington is only President lead an army in uniform while in office. President Madison did personally lead troops under fire in the defense of Washington DC during the War of 1812. He lost the battle and the city, but he managed to keep the Army from being captured. George Bush put on a uniform to fly two miles out to an aircraft carrier. Neither Washington, nor Madison needed a cod-piece. 


The Framers wanted to include a ban on corporations in the Constitution, but decided to allow the States to regulate them instead. It worked more or less, for almost a hundred years. You can have democratic government or corporations. The British had a Parliament, but they were all shareholders, and the BEIC was making them rich. The BEIC (I mean Bain)  made Romney rich doing the exact same things. The suppression of the middle class is simply history repeating itself.

Tuesday, July 3, 2012

Blood and Feathers


The Federal Energy Regulatory Commission (FERC) is after the our friends over at JP Morgan Chase for rigging wholesale electricity prices to the tune of $73m. You thought that activity went away with the collapse of Enron? These crooks will steal anything that isn’t nailed down, well okay, they will pry up the nails too. They aren’t the only people the FERC has been going after, Obama was delayed in appointing people by Republicans in the Senate, but things are finally starting to happen.

The FERC has been going after other “banks” (that’s a questionable term) for stealing hundreds of millions by illegal trading schemes. And, this is only the low hanging fruit. More complex schemes, and strategies that were de-criminalized by Reagan, and his successors, have cost us billions if not trillions.

There is an ongoing slaughter of executives over at Barclay’s bank as regulators begin to take them down for rigging the interest rate back in 2008. It is alleged that they systematically conspired with other banks to under report to regulators the interest they were paying and receiving on loans to other banks. This reporting sets the LIBOR (London Inter Bank Overnight Rate), this interest rate affects virtually all financial transitions.

This one conspiracy is being blamed for causing the banking collapse in 2008 that cost trillions of dollars. Everything from home mortgages, to hundreds of trillions of dollars in derivatives collapsed during this banking meltdown. Their defense is that central bankers approved of what they were doing. It’s probably true that they did. It’s still a crime, but that’s what big banking is all about.

We are supporting the 0.01% of the population who do nothing useful at the cost of billions of dollars, but they also destroy what they can’t steal. They are really just a pirate operation, steal it or sink it.

These super wealthy already have more money than they can spend, their real goal is to make sure that pesky middle class can’t challenge them for power. To do that they are committed to relieving the middle class of every dime of wealth, and of all political power. A rigged financial system, rigged voting machines, rigged “news” media, rigged educational system, you get the idea.

Literally, you can go through your entire life without ever hearing actual truth, or ever being treated fairly in a transaction. This sounds like the ravings of a paranoid mad man, but it isn’t that hard to check into it. It doesn’t occur to most people to look, or they just don’t really want to know. People on the right just assume that they are all foxes in the hen house, really most of them are really just fat chickens. We’re getting to the point where all the blood and feathers are hard to ignore.

That being said, you need to avoid cynicism as a solution. Assuming every Republican is lying when his lips move will serve you well 99.99999% of the time. Doing the same with Democrats suggests that you have some form of PTSD. I’ll concede that most Democratic politicians aren’t good for much, but an actual reform movement is required. Democrats compose the only viable movement in town, and you know what? They can be controlled by the majority. That is, by an “informed” majority. That’s your responsibility, to learn, and to spread the truth. The hard, complicated stuff, not just the easy cynical opinions that make you feel good.  www.prairie2.com

Monday, July 2, 2012

The Real "New Normal"


Another big screaming headline today claims that factory orders are at a three year low. This proves the failure of Obama economics, and demonstrates the damage done by his socialist healthcare mandate. The small problem is that this isn’t based on actual numbers, but just on a survey of purchasing managers. The Institute for Supply Management (ISM) takes these surveys and then creates an index that is supposed to serve as a leading indicator. The ISM index is notorious for being what is euphemistically referred to as “volatile”, in plain language it’s panicky and completely unreliable. That doesn’t stop the right from presenting this information as having been chiseled into stone tablets by a vengeful god.

In reality, US durable goods orders rebounded in May after two months of decline. These are actual numbers, not survey results from people who want Romney to be President. With Europe pulling back from its suicide pact based on austerity you can expect factory orders to start picking up again. A big chunk of what we do export consists of parts for European manufacturers.

However, our biggest manufactured export continues to be refined petroleum, 30% of what comes out of US refineries is exported. But Obama isn’t allowing enough drilling, and that’s why gasoline is now $6/gal for the July 4th holiday, just like Mitt Romney predicted.  Remember the giant animated gas pump he used for a back ground at events, it showed the price skyrocketing as he belittled Obama’s conservation policies.

Housing sales activity is now 1.5 percent above the 2001 baseline index that is considered healthy activity. A commitment from the Federal Reserve to further push down mortgage interest rates, that are already at record lows, should further boost home sales. This will help prop up depressed prices in hard hit markets. Fewer Americans underwater on their home mortgages will boost consumer confidence. Rebate checks are starting to come from health insurance companies based on the 85% rule of Obamacare. Insurance companies no longer get to rip you off and keep their ill-gotten gains.

Here’s a new vocabulary word, “derecho” (de ret o), from the Spanish word for straight. It’s not a new phenomena, the name was coined by an Iowa State University professor in 1888 to describe a significant weather event in 1877. These straight line wind events used to occur in the US about every four years on average. The typical event in the past had 60 to 80 mph winds and would travel a 100 to 150 miles.

Today these events occur multiple times per year and have gotten much larger and more powerful. Tens of miles wide or more, with constant winds in excess of 100 mph and gusts up to 200 mph are being observed. The recent event to hit the DC area was actually 700 miles long. While the winds are comparable to those of a major tornado, they don’t have quite the same destructive effect, and are more comparable to a hurricane. But, they can also spawn a series of EF-5 tornadoes as well, depending on how the warm and cold fronts interact.

The Derecho is basically driven by heat, a cold front overriding a warm front creates an imbalance as the warm air must rise and the cold air must sink. They’re common in middle east desert regions. Those impressive walls of dust you see portrayed in desert action movies are created by this phenomenon.

In the US they are super-charged by massive amounts of moisture in the atmosphere that allow these systems to become extremely powerful as moisture stores incredible quantities of heat. As you might guess they are becoming more common as the globe warms. The water content of the atmosphere has increased by 5%, and this amounts to billions of tons of potential energy that gets released under right conditions. Previously rare events are becoming the new normal. Government weather forecasting is one of the things the Republicans want to cut drastically. Ignorance is the real “new normal”.   www.prairie2.com

Sunday, July 1, 2012

Affordable Care Cat is upheld

The US is well on the way to recovery now that all the Tea Baggers have moved to Canada to escape Obamacare. Rush promised to move to Costa Rica, they have Single Payer, just like Canada. It's been reported that there were a lot tweets about the AC Cat, they count everything these days.