Serguei Vorojtsov Discusses Business During Perestroika

Economic Crisis: My Two Rubles

Ain't That America?

Rewarding failure and punishing success.

Freezing and Canning

I've started a new blog today called Freezing and Canning.

I'll be posting various recipes from time to time and posts about any canning I'm gettign around to doing.

I'm open to the idea of making this a team blog. Send me an email if you're interested in contributing.

John Michael Greer on PeakMoment

Kudos to John for making it to Peak Moment Television. He's the author of The Archdruid Report. In this video he is hawking his latest book, "The Long Descent".

This is a good interview. He explains things very well. At the end though, I don't agree with his happy talk summation.

I don't agree with JMG that civilization has been here before.

And the reason is that never before have we done so much damage to the entire planet at once. Never before has our population reached such unsustainable levels. Never before have we covered the globe with nuclear power plants and nuclear weapons.

This time is different, and not in a good way.

When we go down, we are likely to have depleted 95% of the food fish in the oceans. We will have likely destroyed most of the arable land that can be easily irrigated.

Further, to get back to the nuclear issue. We will have left behind hundreds of nuclear reactors that will not be properly decommissioned. Even now, shutting down and decommissioning a reactor is a costly endeavor. It's been cheaper to refit the reactors to extend their running life. After we slide further into this next Great Depression, it will likely be an economic impossibility to properly decommission them.

I've had the good fortune to discuss this possibility with two nuclear engineers now. First, they don't buy my assertion that during the decline, we might not decommission any reactors.

But in the game of 'what if' they aren't decommissioned, I got horrified looks from them. Essentially the answer I got was, if the core is not removed, they will eventually melt down. they did not waiver on this point. They made it clear that you cannot decommission a reactor without removing the core. It must be dismantled, or cooled for thousands of years.

Then there is the problem of nuclear weapons. How do we dispose of them post peak? Are many going to be left to rot and leak into the environment?

And finally, shouldn't we be expecting more war as times get hard? Maybe a limited nuclear strike here or there? Or maybe a shelling or bombing of civilian nuclear reactors?

I think that as the next two decades unwinds, there is a high probability of more Chernobyl type events. It simply costs too much to keep reactors going and as costs continue to rise, maintenance will suffer.

And what's this about a new strain of the Bubonic Plague being used in biological warfare right now? Normally it takes days for the plague to kill. This strain that seems to target Al-Qaeda, kills in hours. If this continues to be used, I think we can be sure that it will mutate and spread.

Now I'll give a final caveat. I haven't read John's new book. I'll be making a point of getting it and posting a review at a later time.

Saving The Auto Industry

In the following videos, Kim Hill gives a great overview of the problems plaguing the auto industry.

At the end, he makes a plea for a bailout, so the auto industry can get over this hump.

I don't think this is a hump. I know that a lot of Americans don't see this as a hump. If I were in his shoes, I'd likely make the same plea. Hey! For that matter, I'll take a bailout to get me over my current financial hump!

Washington's plan is to get people to borrow more money, to buy more stuff. The idea is that people who can't currently make their monthly payments on their debt, will borrow more, so that they can default on higher payments. This plan has been lambasted to death by most ever intelligent commentator I've heard or read. It's simply ludicrous.

If we doze off into Imagination Land for a while...
The bailout for the auto industry probably needs to be two fold.

1. The Government should just give them a monthly allowance of billions of dollars.
2. Government officials (new jobs!) should just go around to dealerships and buy new cars, to keep sales up.

Now the new cars could be given away to Americans for free. But that would depress sales and prevent a real recovery. So likely the best plan would be to just run them through crushers and recycle them. The auto industry could be sustained for decades, running off the power of the printing press.

Anything short of this, is delaying the inevitable.

So, back from Imagination Land...

The industry is so screwed. The bailout has no hope of doing anything, but slowing the crash a bit.

Kim Hill - Automotive Collapse

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Debt Forgiveness And Hank Paulson The Bank Robber

Over on Automatic Earth, Earthsmile made a comment that we're nearing the point where the extent of the toxic derivatives mess will be fully exposed.

That comment gave me a little spin.

First off, it sure sounds nice. That would put us on the road to recovery. But it sounds so incredibly honest and costly to the banking class!

I've commented somewhere before... (was it here?), that the bank consolidation going on, may be a way to hide debt. If a broken bank, buys a healthy bank that it owes money to, then doesn't the debt get canceled?

I had mentioned this as a way to explain why Paulson is using his powers to seize profitable banks, steal them from their owners and investors and essentially give them away to the bankrupt banks he's trying to save. It seems to me that stealing them for their assets is a good reason to get into the bank robbery business. But perhaps there is another reason that Hank Paulson has become a bank robber, and that is to erase debts.

Well, I don't believe that the biggest banks will ever open their books. So there has to be another way for them to get out of this mess. Robbing healthy banks is a good first step. Next they'll have to work some debt swaps. They could package up debts to each other, that total out to some equivalent quantity, and trade them out.

But finally, after the mergers, after the swaps, there will still be a large debt overhang. They'll still owe a lot, to CDs, pension funds and other trusts. For these, the government will simply forgive their debt. One day, you might have money invested with a bank, and the next, poof, the bank owes you nothing.

This solves the problem of the red ink, and disclosure. Blanket debt forgiveness coupled with further bailouts and no questions asked, will solve this problem for the banks.

And you might ask, won't this ruin trust? Well, when there are only a few banks left in operation, does it matter? Without competition, the worst is still the best.

My City Needs Money - Can You Bail Us Out?

Mayor Gears' message to Mr. Obama

The areas he wants to develop is in Las Colinas. In the 1980s, Irving developed this area at great cost and let IBM and ZEROX setup office complexes for free. After a time, these corporations were to begin paying taxes. When that time came, they moved to another city for another free lunch. After that, there was quite a flight from the area as other corporations fled.

Since then, the empty buildings have mostly been filled and apartments have gone up, and are filled with residents.

From a Peak Oil perspective, this is a bit sad as I've watched farm and ranch land get gobbled up by concrete over the decades. In ten years, we'll be wanting to get some of that back. At least that large pond (Lake Caroline), can be pumped for irrigation.

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Is The Bailout Money Going To Dubai?

Get your tin foil hat out again. You'll need it with this. This is another crazy off the wall theory. It's much like the one I wrote about years ago. Remember when I argued back in the dark ages, that when the banks started loosing money on the housing boom and bust, that they'd get massive bailouts and still get to foreclose and keep the real estate? Here's another tin foil hat conspiracy on that level.

I have no information about where the bailout money is really going. Neither does our Congress. They don't even seem to know how much of the blank check has been spent. In fact, the bailout bill that they signed, denies them the right to know what has happened to the money. It seems that Paulson is likely spending way more money than they authorized, but they denied themselves the right to know if he did.

Further, the Fed has been engaging in private bailouts, without any oversight. Various news outlets, reporting agencies and blogs have noted that the Fed is operating deep in the red, and no one knows for sure where the money is going. Well, we know it's going to the banks...

Paulson says that to make this bailout work, the destination of the money must remain secret.

Then couple all of this, with that billion dollar pallet of money lost in Iraq and who knows what other shenanigans. We can make some educated guesses I think.

The biggest banks are owned in large part by the House of Saud and the Bin Ladens. It is reasonable then to think that since they own the folks that sit on the boards, they decide where the money will go. Where would they put the bailout money?

I have a strong suspicion, but no proof, that much of the bailout money is going straight into accounts in Kuwait and Dubai. It is my opinion that the USA is in fact subsidizing the building boom in Dubai, through this bailout program.

Remember, with oil prices way down, a substantial component of the revenue that was building this playground for the super-rich, has been cut off.

I don't think that it is an accident that the bailout was needed, right after oil prices went over a cliff. I believe that the bailout money is compensating for lost profits in the Middle East.

I keep reading on various blogs that the money is going to cover the giant gaping wounds of derivative losses. This seems like a reasonable explanation on the surface. But the same folks go on to argue, that the money is just a trickle compared to the flood of money needed to cover the debts.

Now we know that these losses are secret. We know that Paulson is winning the fight to keep them secret. So if they don't need to tell anyone, why not just lock the losses away, refuse to cover them, and use the money for something else?

And perhaps this is why Paulson is seizing profitable banks and giving them away to the internationals? Perhaps it's to prevent the loans from being called, so the bailout money doesn't have to be used to cover losses, so that these losses will never be disclosed?

So in the end analysis, we don't know where the money is going. We know that Dubai is still booming. We know that oil prices are way down, and oil revenue is way down. So how is the Dubai Construction Bubble being financed, if not by the bailouts?

Update:
Before I get in arguments about whether or not Dubai is booming..., We have conflicting information on Dubai and it's construction boom. Here's a report that sums it up fairly well 'Dubai Building Boom Cooling'.

What is notable about this situation is that while the rest of the world is reeling backwards, Dubai is still moving forward. In flat economic climate, I think Dubai would still be classified as having a booming economy. It's only from the perspective of the dramatic booms we've seen lately, that Dubai looks like it may be waning.

According to that blog, CitiGroup is still funding construction in Dubai. The same CitiGroup that is broke, receiving bailout funds, and has cut lending in most of the rest of the world.

I think that is one more suspicious data point in favor of my argument.

Silly Money - Where Did All The Money Go

H/T The Automatic Earth

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Lightnin' Friday

The Late Great Lightnin' Hopkins.

Remember, I listen to these first, to insure we in the Lair (mouse in my pocket), uphold the highest standards of quality and safety.

Lightnin' Hopkins - Recorded for The Seattle Folk Society
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Baby Please Don't Go


Lonesome Road


Mojo Hand


Take Me Back


My Starter Won't Start This Morning


Goin' Down Slow

Spring Is Coming!

Or at least my Spring Catalogs have arrived.

This year has started out fairly well for me. My financial situation has improved a bit. It seems my lot in life, that my personal life is always running in the opposite direction of society's.

So I invested this year in more perennials. I'm forward with the plan to put up more trellising. In one section of my garden, I'll be putting in some horizontal trellising and may see if I can get some shade tolerant plants to grow under it.

I've also figured out what to do with a narrow strip beside my driveway. I'm going to try blueberries there this year. To do this, I have to stray a little bit from my organic theme and put down some sulfur to acidify my soil a bit. This will be my worst offense in a decade, I think I can live with myself.

For the trellised gardens, I'm putting in hops, kiwis and more passion fruit. I'll also be planting annuals like casabananas, and some flowering vines for the hummingbirds and bees.

The rest of my garden will still have the traditional beans squash, peppers and tomatoes. I'll be expanding my artichokes this year.

Our average last frost date for this area is April 8. I can't wait. It seems so far away.