ENERGY CONSEQUENCES...........
There are consequences to every action. There are also consequences to every inaction. Over the next decade Americans will experience the dire consequences of inaction.
The implications of peak cheap oil have been apparent for decades. The Department of Energy was created in 1977. The Department of Energy's overarching mission was to advance the national, economic, and energy security of the United States. In 1970, the U.S. imported only 24% of its oil. There were 108 million motor vehicles in the U.S., or .53 vehicles per person in the U.S. Today, the U.S. imports 70% of its oil and there are 260 million vehicles, or .84 vehicles per person. America is sleepwalking into a future of hardship and turbulence. The coming energy emergency will change everything.
Globalism will wither. Life will become profoundly and intensely local. The consumer economy will be a strange memory. Suburbia – considered a birthright and a reality by millions of Americans – will become untenable. We will struggle to feed ourselves. We may exhaust and bankrupt ourselves in the effort to prop up the unsustainable. And finally, the United States may not hold together as a nation. We are entering an uncharted territory of history. The land of the delusional has no inkling that their lives of happy motoring are winding down.
The vast majority of Americans believe that oil is abundant and limitless. Their leaders have lied to them. They will be completely blindsided by the coming age of hardship. If Americans had any sense of history longer than last week's episode of Dancing with the Stars they may have noticed that the modern age has lasted a mere 150 years and has been completely dependent upon cheap plentiful oil. This is a mere eye blink in the history of mankind.
Every characteristic about the condition we call modern life has been a direct result of our access to abundant supplies of cheap fossil fuels.
Fossil fuels have permitted us to fly, to go where we want to go rapidly, and move things easily from place to place. Fossil fuels rescued us from the despotic darkness of the night. They have made the pharaonic scale of building commonplace everywhere. They have allowed a fractionally tiny percentage of our swollen populations to produce massive amounts of food. All of the marvels and miracles of the twentieth century were enabled by our access to abundant supplies of cheap fossil fuels. The age of fossil fuels is about to end. There is no replacement for them at hand. These facts are poorly understood by people who are preoccupied with the thrum of daily life. By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. –
Joint Operating Environment Report When worldwide oil demand slightly exceeded worldwide oil supply in 2008, prices surged to $145 per barrel. A 10 million barrel per day shortfall is unfathomable and will drive prices over $200 per barrel.
The entropic mess that our economy has become is in the final blow-off of late oil-based industrialism. The destructive practices known as "free market globalism" were engendered by our run-up to and arrival at the world oil production peak. It was the logical climax of the oil "story".
It required the breakdown of all previous constraints – logistical, political, moral, cultural – to maximize the present at the expense of the future, and to do so for the benefit of the very few at the expense of the many. Soon deviations in price and or supply of oil and gas will crush our economy and make the logistics of daily life impossible. The United States is already tottering, as the oligarchy of the Wall Street banking syndicate, global mega-corporations and corrupt political hacks in Washington DC have pillaged the wealth of the country and left a middle class gasping for air.
The recognition by the masses that peak cheap oil is a fact will contribute greatly to the next stage of this Crisis. American troops are not in the Middle East to spread democracy. They are the forward vanguard in the coming clash over depleting oil resources. Notice that they aren't leaving as Obama promised either, the reason is oil!
The U.S. will be forced to downscale, localize and adapt to a new reality. No technological miracle will save us. Decades of inaction will have a price.
AMERICA NEEDS TO WAKE UP!
THE MOMENT WE LIVE IN.............
In a corrupt, dysfunctional society perfectly incapable of healthy, meaningful change, nothing "good" can happen, not now, not next week, not next year, not five years from now, not ever. That's the historical moment we live in.
For meaningful change to occur, the entire societal edifice would have to collapse and be rebuilt piece by piece from the ground up, as the founders did in 1787 when they convened to create our (now ignored) Constitution in Philadelphia. Unfortunately, collapse invariably makes things much worse, not better.
TAKE A LOOK AROUND.........
Wherever you choose to look — at the economy and jobs, the public schools, the budget deficits, the nonstop warfare overseas — you'll see a country in sad shape. Standards of living are declining, and American parents increasingly believe that their children will inherit a very bad deal.
We're in denial about the extent of the rot in the system, and the effort that would be required to turn things around.
THE FED IS THE PROBLEM...........
The bailout of LTCM was truly the first time the Fed intervened in markets to make sure that losers didn't have to become losers.
LTCM was the epitome of failed economic theory at work in markets. A group of brilliant economists believed they had discovered the path to minting money in the financial markets. On paper their equations appeared flawless. In reality, they were a disaster waiting to happen. The Federal Reserve is not dissimilar in this regard.
For 18 years Alan Greenspan ran the nations central bank based on theories and beliefs that he later referred to as being "flawed". Despite this, much of his work influences the current central bank. In fact, today's Fed is more involved in markets than ever.
S&P SAYS HOUSING MELTDOWN TO CONTINUE THROUGH NEXT YEAR...........
"Standard & Poor's analysts believe
home prices will drop between 7% and 10% through 2011..." I wonder what people think when they read something like this. House prices drive a positive feedback loop. When prices drop, more homeowners become underwater on their mortgages, which drives more defaults and foreclosures, which increases the inventory of unsold homes on the market, which causes house prices to drop, which causes more homeowners to become underwater... It's a continuing meltdown. When will the Housing Market hit bottom and stabilize? 2013? 2015? Never? Meanwhile, the Fed and the government congratulate themselves on how their prompt action stabilized the Housing Market! Yeah, sure, right. And let's not forget to mention foreclosure fraud.
MORE EMPLOYMENT LIES ABOUT UNEMPLOYMENT..............
The government changed the "seasonal adjustment" it made to the payroll numbers — and, in so doing, boosted the number of "jobs" created in October by 100,000.
Stephanie Pomboy of MacroMavens explains: "The seasonal bar which the payroll data must jump was (inexplicably and dramatically) lowered from prior Octobers. "Thus, in October 2009, the BLS set the bar at 870,000 jobs, similar to the 840,000 it anticipated in October 2008. This year, by contrast, it lowered the bar to 768,000. Mumbo, jumbo, payrolls presented "an upside surprise" of 100,000."
The jobs market is nowhere close to making even a modest comeback. And I am sick and tired of being lied to by politicians, government bureaucrats, bankers, Warren Buffett and whoever else thinks it's in their best interest to tell a few whoppers.
GODEN NUGGETS...........
There's a lot of speculation these days about the gold price. One of the favorite theories is dollar weakness. The rising gold price is caused more by a falling dollar, than by increasing demand for the metal. But the data says otherwise. This week, the gold price in yen neared a record. Front-month Japanese gold hit 3,725 yen per gram. Just a hair below the all-time high of 3,788 yen/gram set on February 22, 1983.
Seeing gold at record levels in other currencies is a sign something beyond dollar weakness is afoot.
GM FIXED........... THAT'S A GOOD ONE!
GM is not as clean as it appears, the disclosures on the book (prospectus) notes the following;
"We have determined that our disclosure controls and procedures and our internal control over financial reporting are currently not effective. The lack of effective internal controls could materially adversely affect our financial condition and ability to carry out our business plan."
If any other company put the above statement in an S-1 how long would you bet on their existence? The cancer that caused GM to go bankrupt has not been removed, bad management and bad Union contracts.
The Fed has to raise rates eventually — ending the cheap financing that currently makes GM appear to be a survivor at present. When the facts are considered and realistic analysis is made what one finds is that GM is not strong enough to survive the next recession.
GMs recent IPO is the equivalent of the Edsel.
THE TRUTH HAS BEEN KNOWN FOR A LONG TIME...............
As government and society become more complicated, the individual is apt to lose his understanding of realities. Most people in their daily life forge a single link in a chain of circumstances. In the older and simpler days when a man needed bread, he cultivated the soil, planted seed, harvested it and ground it into flour. It was perfectly clear that if he neglected to do any of these things, he would not have any food. As it is now, the chemist studies the fertilization, the manufacturer makes farm implements, the miller grinds grain, and a sales organization markets the produce of the farmer. The man who gets the reward, or to carry the figure on, who receives the bread, is dependent upon a great number of people each doing his part in a long sequence of events. Under the simpler order, where the farmer carried on the whole cycle from the field to the dinner table, the results of indolence or stupidity affected him directly and him alone. Under the present complicated order, he can suffer only indirectly himself, but his interruption of an involved process will throw the whole system out of gear and injure an infinite number of others. The responsibility of the individual today, therefore, is greater than it was in the past, and while the incentives may be as great as they were, they are less obvious.
The simple underlying principles on which a happy and successful life must be based do not change with the centuries. Because with a complicated social organization they are at times obscured, they are none the less all powerful.
Because the effect of an individual's failure to do his part does not immediately react upon himself as it did in the early days of this country, an opportunity is offered for the irresponsible to preach doctrines which are essentially unsound. None of these preachings is more dangerous than the assertion that the wealth of a nation can be increased in some other way than through stimulating production as a result of work and thrift. We boast of a great deal of progress these days, but if this country ever adopts such a theory it will be committed to a policy almost inconceivably reactionary. Henry M. Dawes
President, The Pure Oil Company,
1938 REAL ESTATE STARTS LAST WEEK INDICATED THAT THE HOUSING MARKET IS NOT GETTING ANY BETTER........
Oct Housing Starts were well below expectations at 519k annualized vs the forecast of 598k.
It's at the lowest level since Apr '09 and was mostly led by a very sharp fall in the multi family category where starts fell to 83k from 147k, the lowest since Feb and is 82% below the peak in '06. Single family starts fell modestly to 436k from 441k. Permits for both sectors were little changed from Sept and for the multi family area specifically, it implies a snap back in construction. Also, the secular drop in homeownership rates should also buoy multi family housing for years to come. In terms of single family starts and the high level of existing homes for sale, we should root for lower starts at the short term expense of a lower contribution to GDP from residential construction.
A FLORIDA JUDGE TAKES A CLOSER LOOK.........
Tampa Tribune:
"Pasco County Circuit Judge Susan Gardner decided to take a closer look at her foreclosure cases after law firms were accused recently of overbilling and forging documents.
She doesn't like what she's finding – a mountain of fees to serve notice of foreclosure lawsuits to homeowners and to people who don't exist.
"Routinely, routinely, I'm seeing charges of $1,600, $1,800, $1,000, $800, any of those are ridiculous, and there had better be a good reason for it," Gardner said, noting that these fees should typically be $45 to a couple hundred bucks.
The judge chose 12 random files and said she found 11 of them had what she says appear to be inflated charges to serve homeowners with lawsuits.
Some of the lawyers who submitted affidavits to the court saying the fees are "reasonable" often sign their names and bar numbers in an illegible scribble, court records show. "I used to think this was just sloppy work, but I truly have begun to wonder if it's not concealment,"
Gardner said. Funny what happens when Judges get pissed off . . .
MICHIGAN CITIES ARE IN BIG TROUBLE..............
This week's attempted
bankruptcy by Hamtramck, Mich. could be the start of an avalanche. Gov.-Elect Rick Snyder says hundreds of Michigan municipalities are nearing bankruptcy, and the darkest hour is years away, according to Bloomberg: There are "wealthy communities that are not in that different a position" from Hamtramck, said Snyder, a Republican who is a former computer-company executive. "They simply haven't had the day of reckoning arrive yet that is liable to happen in the next two or three years, with the way property tax revenues are going,"
"The most challenging period is probably about 2013 to '15. Literally, there could be hundreds of jurisdictions."
Michigan's plan to stave off bankruptcy in Hamtramck is hardly reassuring. The city would receive an emergency loan, while continuing it's suit against Detroit over tax revenue. If Hamtramck survives, it will do so with money from Michigan and near-bankrupt Detroit.
What happens when hundreds of cities are on the brink?
WHAT HAPPENS AS THE BURDEN OF 50 STATES WORTH OF THESE PROBLEMS ARE PILED ON TO THE FEDERAL GOVERNMENT AND EVERYONE IS DEPENDING ON THE GOVERNMENT TO BAIL THEM OUT.
STATES CAN'T PRINT MONEY SO THEY WILL GO BEGGING FROM THE FEDERAL GOVERNMENT. AFTER THIS RECENT ELECTION AND CONSIDERING THE LIKELY DOLLAR VOLUME OF THESE SHORTFALLS THE FEDERAL GOVERNMENT WILL NOT BE ABLE TO HELP, UNLESS THEY ARE WILLING TO DESTROY WHAT IS LEFT OF THE DOLLAR AND OUR ECONOMY.
THE NEXT FEW YEARS WILL BE EXTREMELY INTERESTING TO SAY THE LEAST. PROBABLY PRETTY DESPERATE IN MANY PLACES AS WELL.
IF ANYONE UNDERSTANDS EXCESS IT IS THE FRENCH..........
The French politician, economic & finance expert Jacques Rueff said in 1972:
"It is that when a country with a key-currency runs a balance-of-payments deficit – that is to say, the United States, for example – it pays the creditor country dollars, which end up with the latter´s central bank. But the very same day, they are reloaned to the New York money market, so that they return to the place of origin. Thus the debtor country does not lose what the creditor country has gained. So the key-currency country never feels the effect of a deficit in its balance-of-payments. And the main consequence is that there is no reason whatever for the deficit to disappear, because it does not appear. Let me be more positive: If I had an agreement with my tailor that whatever money I pay him he returns to me the very same day as a loan, I would have no objection at all to ordering more suits from him and my own balance of payments would then be in deficit. Because of this situation, the United States could pay off its balance of payments deficit in paper dollars. As the central banks received dollars, they used them immediately to buy U.S. Treasury Bills or certificates of deposit in New York banks, thus returning the dollars to their country of origin which thus recovered all the assets it had just paid out."
Rueff warned that, if this system is continued for long, it would inevitably have 3 consequences:
"1) A permanent deficit would develop in the United States' balance of payments whose overseas settlements would no longer automatically reduce the amount of credit available at home. Thus the United States was in the privileged position of being able to buy, invest, loan or donate money in other countries without limit since its money markets would not feel any effects from this capital outflow. Having learned the secret of having a "deficit without tears", it was only human for the United States to use that knowledge, thereby putting its balance of payments in a permanent state of deficit.
2) Inflation would develop in the surplus countries as they increased their own currencies on the basis of the increased dollar reserves held by their central banks.
3) The convertibility of the reserve currency, the dollar, would eventually be abolished owing to the gradual but unlimited accumulation of sight loans redeemable in the Unites States gold."
OUR EDUCATION SYSTEM HAS FAILED............
There was a time when the United States understood the importance of educating its young people and led the way in compulsory public schooling. It also built the finest higher education system in the world. Now, although no one will admit it publicly, we've decided to go in another direction.
In New York City, for example, Mayor Michael Bloomberg's choice to run the public school system is Cathleen Black, a wealthy corporate executive with no background in education whose children attended expensive private schools. Mr. Bloomberg has asserted that Ms. Black's management expertise will be a boon to the city's public school children. But the truth is that Ms. Black, if she gets a necessary waiver for her new job, will be presiding over budget cuts that can only hurt the schools. As part of a proposed austerity budget, the mayor is planning to eliminate the jobs of thousands of public school teachers over the next two years. Take that, kids.
Public figures talk endlessly about "transformative changes" in public education, but the years go by and we see no such thing.
I THINK A LOT OF OUR SO CALLED LEADERS WILL HAVE AN AWFUL LOT TO ANSWER FOR ONE DAY...........
"Woe to those who make unjust laws, to those who issue oppressive decrees, to deprive the poor of their rights and withhold justice from the oppressed of my people, making widows their prey and robbing the fatherless."
-Isaiah 10:1-2
Government corruption in these United States has been prevalent and systemic for half a century or more.
Biblical prophecy warns that in the last days - these times – there will be a turn to preponderant immorality
of a bestial nature, and that the people will give themselves up to perversions precisely such as those that were pursued and acted on in Sodom and Gomorrah and their surrounding environs. Scripture makes clear that these perversions were taught by demons and that these very despicable and filthy practices will be institutionalized by governing authority and endorsed and sanctified by an apostate church in the latter days. No one can deny that in this nation and in these days that these predictions have come to pass.
Sodomy is pursued with militant aggressiveness. Activist judges - many of them sodomites - unfettered by ethics, scruples, morality or the Constitution are by-passing the people and legislative prerogatives with judicial decrees that are rapidly institutionalizing sodomy. A majority of the denominational churches now condone, support, and encourage sodomy and the co-occurring spin off of same sex marriage, this even to the point of ordaining sodomite pastors and uniting same sex couples in marriage. That they would pervert the sacrament of marriage and deny the authority of God's word thusly speaks to the depth of apostasy to which they have descended. Those that use Jesus, the very author of the destruction of Sodom and Gomorrah, as justification for their despicable and impious religious dictums in regard to sodomy have reserved unto themselves the punishment of eternal fire.
They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity
. -Ezekiel 7:19
WHEN A COUNTRY AND PEOPLE WON'T STAND UP FOR WHAT THEY BELIEVE, THEY WON'T STAND FOR LONG. I HAVE NOT HEARD ANYONE, NOT A SINGLE PERSON TALK ABOUT HOW EVIL MANY THINGS HAVE BECOME IN AMERICA........ WE DON'T WANT TO DISCUSS CERTAIN THINGS FOR FEAR OF OFFENDING PEOPLE, OUR DETERMINATION TO BE POLITICALLY CORRECT AND OUR FEAR OF OFFENDING ARE DESTROYING AMERICA. WE WOULD RATHER BE CIVIL THAN FIGHT FOR WHAT IS RIGHT. MANY OF THE THINGS HAPPENING IN AMERICA OFFEND GOD AND HIS STANDARDS, IT IS IRONIC THAT MOST AMERICANS ARE FAR MORE WORRIED ABOUT OFFENDING CERTAIN PEOPLE OR GROUPS THAN THEY ARE ABOUT OFFENDING ALMIGHTY GOD. AMERICA IS LOST UNTIL THIS CHANGES.
