My rants and raves on politics, Peak Oil and anything else that comes to mind.
Tuesday, March 31, 2009
Right On Schedule
We're still following the Argentina script.
The next big step is to shut down America's factories. The automakers will have to go.
Our federal government will spend big bucks now, reorganizing the automakers, then sell them off for parts at huge losses. Then the plants will get shut down, one by one.
I foresee similar troubles for Boeing's commercial aircraft division.
Argentina's railway system was also dismantled. The railway played a large role in that nation than it does in the USA however. Shutting down the railways, killed a lot of factories outright, that shipped all of their goods by rail. In the USA, we may see some serious damage done to our railway system, but i think it's more likely that more trucking will be shut down. The easiest way to do that is gradual hiking up of fuel prices.
As we follow the path to the USA's intentional demolition, our last big industry to wipe out will be in defense. As the other industries get wiped out, our defense industry will find it more difficult to operate. Materials shortages, and price swings will make production difficult.
I think that it's likely that the UAE's current efforts to build a more enclosed economy will continue. They are currently building factories, so that they can use their oil and gas at home, to make things that they need to fuel their own economic growth. As they expand their factories, weapons production will likely shift from the USA to the UAE. Halliburton has already made the move. I think it's only a matter of time before most of out hi-tech weapons manufacturers will also move their operations to the Muslim nations.
This isn't about money, or politics. The folks destroying America are likely looking at the bigger picture. The USA uses 25% of the world's oil. The USA consumes far more than it's share of resources. If the USA is shut down, then other nations will enjoy a higher standard of living for a longer period of time. For them, this effort is simply a triage exercise. After the USA is shut down, the UAE and Dubai can experience another boom in growth.
We've enjoyed the spoils of economic destruction in country after country, since the 1970s. Preventing Africa's economic development, and in fact destroying their economies, made sure that more resources would be available to first world nations. Had Africa become a center of investment, it's rich resources would've led it to become a shining beacon of industry. the intentional destruction of Africa, then South America by the IMF, kept the nations there from entering the competitive arena, and allowed us to enjoy their resources for our own consumption at ridiculously low prices.
That triage effort though, ran out of steam. The world is running out of nations that can be shut down, to leave a little more steam to grow on.
It's our turn now. Good luck.
Update, I just discovered Senate Bill 6117. Looks like Boeing is getting another bailout.
Some choice quotes that made me throw up in my mouth a little:
President Barack Obama will seek support today from executives of the nation’s largest banks for his plan to stabilize the financial system and try to get beyond the furor over bailouts and bonuses.
In other words, a meeting to figure out how to keep stealing without making people mad...
Lawrence Summers, Obama’s top economic adviser, said the meeting was a measure of the ties between the government and banking industry at a time of economic crisis.
“This is about our duty to do everything we can to support a robust and sustained economic expansion and the reality that the country’s major financial institutions have a major role to play,” Summers said.
Yeah, Good old Larry who worked to get Glass Steagal repealed is happy that his guys will continue running the finances in the US Government.
White House advisers said the meeting will focus on stabilizing financial markets, boosting lending to businesses and consumers, reducing foreclosures and imposing regulatory overhaul rather than specific issues at individual institutions.
The plan hasn't changed. It's the same plan Bush had. Get people who are going broke, to borrow more money.
With the U.S. economic recovery tethered to the health of the financial industry, Obama has proposed a public-private partnership to soak up the banks’ toxic assets and help unlock credit, as well as new regulations on banks, hedge funds, private-equity firms and derivatives markets.
Yes, borrowing and spending other people's money is the basis for our economy. Finally a little truth and recognition that our economy is not based on the productivity of the American Worker.
“A recovery based on a public-private partnership will depend, to a large extent, on the business community believing that they are in a partnership rather than enthralled to politicians and a punishing public that wants to extract the last ounce of blood,” Levitt said.
In other words, the administration doesn't want to have anyone arrested for fraud and stealing. Instead, they want to find innovative knew ways to defraud and steal, without making the public angry.
We are still continuing down Argentina's path. I know I keep harping on this, but it scares the hell out of me. As Obama has argued, "This isn't a rowboat, it's a big ship and big ships are hard to turn around." And so, the administration is not even going to try to turn it around. They are simply shoveling the coal faster, and holding course, with a major landmass in the way. It reminds me of that joke with the ship captain and a radio operator, arguing about who should change course to avoid a collision. The captain doesn't realize he's arguing with a lighthouse keeper.
Before Argentina really went down the drain, the IMF took complete control over the nation through it's Austerity Program. There is lot's of good info on the net about what this program means and what it does. But under the program, the bankers take control over a nation's economic policies. The government is then directed by appointees from the IMF. This is the prelude to looting and pillaging the country. Under the Austerity Program, a nation must give away 30% of it's revenue to the bankers.
After this step, you'll find that the press continues to report that the government is doing awful deeds, but it's the IMF representatives that run the government's financial branches, that are setting up the policies and taking a share of the lucre. the politicians are all bought and paid for. Those that resist are killed, or their family members and friends are kidnapped and killed. Opposition to death squads, is typically short lived. No pun intended...
Here in the USA, we are implementing the same program, except that the IMF isn't forcing it on us. Our politicians are being bribed to follow the script, and they are doing so happily. Obama from all appearances is happy to go along with it. He is leading us into a financial hell, and a New Great Depression.
I've posted such arguments on other forums, and folks that haven't done any research into Argentina, Venezuela or the IMF in general, have nitpicked my arguments around the edges. So far though, I haven't read an argument that really addresses the meat of the issue.
1. The same bankers in charge of Argentina's finances are running the finances of the USA. 2. The politicians in both countries are almost completely corrupted and in the pockets of the banking system. 3. Neither nation is demonstrating any consideration in changing their policies. 4. The financial policies of both nations are converging. 5. Argentina is thoroughly screwed. If we continue to do what they did, we will meet the same fate.
It only took a few years for Argentina to devolve completely into a financial nightmare. Obama is retrenching his position and sticking to the same plan that got us here. There is no indication that he intends to ever change course. This ship is not turning. Let the reef and rocks change course. We will not. We will persevere and make the hard choice, to ram the land mass at full steam.
As our leadership won't change in time to avoid disaster, we must continue to prepare. Do what you can to mitigate the series of personal crisis we will all be facing. Don't worry that you'll have to do everything alone. Not everything runs out at once. Simply worry about the essentials. Even during Perestroika, the grocery stores had food. But from day to day, different shelves would be bare. The food wasn't always what you might choose, but they provided something. As I say this, I am reminded that many people have starved to death in Argentina. This is because the bankers killed many of the farms and ranches, along with the railroads that delivered the food to the cities. I hope that things don't devolve in a similar situation in the USA. But I worry they might.
It's not the end though folks. Each morning the sun will come up. Everyday, there is something to do, something to live for. We can survive this and still find some happiness in it. The world is changing. But it will be what we make of it. We can't fix the big things, but we can address the local impacts.
There is always something you can do. And doing something, is the best cure for depression, that I know of.
I find it fascinating how the Republicans have redefined the term socialism. It didn't help that some fascist governments, claimed to be socialist. They did so, because in those days, socialism was a popular movement. The USSR (United Soviet Socialist Republic for the youngsters) for instance, was as much about socialism, as the Texas Railroad Commission is about boxcars.
Loosely defined, socialism is a system whereby human beings have power, and the government works in service of the human beings. Collectivism and unions are socialist structures whereby the people gain power through self organization.
If you delete the people, and replace them with corporations, then you don't have socialism, you have fascism. The people rigging this game are fascists, not socialists. If they were socialists, they'd be rigging the game for to enhance society's welfare. They are rigging it for select corporations. Corporations are not human beings. So this can have nothing at all to do with socialism.
Our country's most famous words, are socialistic, "We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America."
These words are meant for human beings, not corporations. We've become a nation that hates it's founding ideals, and look where that has brought us.
This increased regulation, proposed by Geithner and Obama, will be used by the top corporations to regulate their competitors out of business. It will not be used to promote the general welfare. When crooks write the laws and regulations, you can be assured that these laws and regulations will benefit them, and no one else.
You can be sure that these regulations and the new laws coming will not be borne out of such socialistic ideals, as to secure the blessings of liberty to ourselves and our posterity. They will be used to promote a fascist agenda.
Words and ideals are twisted by our radio and television propagandists to remove them from acceptable discourse. With the meaning of socialism gone and the golden rule derided, we have no common words or memes to share, to engage in conversation on these concepts.
When you misuse the word socialism, in a manner that the fascists have prescribed, you're giving them another small victory. You're letting the thieves have power over your words and thoughts. You're letting them dictate your use of language, and accepting their Newspeak Dictionary.
''Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,'' Treasury Secretary Lawrence H. Summers said. ''This historic legislation will better enable American companies to compete in the new economy.''
The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation's financial system. The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression.
''The world changes, and we have to change with it,'' said Senator Phil Gramm of Texas, who wrote the law that will bear his name along with the two other main Republican sponsors, Representative Jim Leach of Iowa and Representative Thomas J. Bliley Jr. of Virginia. ''We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.''
''I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010,'' said Senator Byron L. Dorgan, Democrat of North Dakota. ''I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.''
''The concerns that we will have a meltdown like 1929 are dramatically overblown,'' said Senator Bob Kerrey, Democrat of Nebraska.
But other lawmakers criticized the provisions of the legislation aimed at discouraging community groups from pressing banks to make more loans to the disadvantaged. Representative Maxine Waters, Democrat of California, said during the House debate that the legislation was ''mean-spirited in the way it had tried to undermine the Community Reinvestment Act.'' And Representative Barney Frank, Democrat of Massachusetts, said it was ironic that while the legislation was deregulating financial services, it had begun a new system of onerous regulation on community advocates.
I saw bits and pieces of Obama's speech last night.
All of his hopes and dreams depend on 2.6% GDP growth. He needs US productivity to rapidly increase, to provide additional tax revenue to offset his increased deficit spending. As the US government makes up 50% of the GDP now, that's going to require 5.2% in private sector growth. Or the government debt increase will just offset any pretend GDP gains. I don't see private sector growth hitting 5.2% this year. So GDP growth will have to come government taking an increasing share of the economy. This doesn't help in reducing the deficit.
He talked tirelessly about the need to return to an era of endless growth.
He clearly does not understand the exponential function. Or he's just spinning a fantasy for us.
But he seemed sincere. He believes that our energy consumption can grow to infinity, if we switch to renewables. He did not mention Peak Oil, or demonstrate any knowledge of our resource limits. His plan seems to be to put up more electric lines and encourage the use of fluorescent bulbs.
He believes that our nation's ills can be cured through borrowing and spending, if only the banks would only lend more. Mark Denninger likes to point out that unicorns don't poop Skittles. But this seems to be the heart of Obama's plan.
And he explained that he needed complete power to regulate the banks, so that he can prevent future financial collapses. No one pointed out that he already had this power, as did Bush. So we didn't get to hear the rationale as to why total power fails, but total power succeeds.
Change is more of the same. Hope springs eternal. He hopes that hope will bring the changes he wants, while largely continuing in Bush's footsteps. He does do a great job of scribbling on the margins though, doesn't he? Though he cuts all the meat off the ham first, he does throw us the bones.
I'm aching today from double digging in my garden over the weekend. I got my tomatoes, peppers squash, artichokes, cucumbers and more blueberries planted.
The gorilla glue on the second trellis was hardening overnight, I'll be setting up lateral supports sometime this week.
I suppose everyone has been paying attention to the news about Geithner. Obama gave him a ringing endorsement. If Bush had done that, I'd expect Heck of a Job Geithner to be booted out the door. But with Obama, I suspect that he'll be staying a while longer. He is after all protecting the wealth of many people in Washington, including the Obama's, when he wastes trillions of dollars of our money, trying to save what is already dead.
Some might think that Obama's credibility and chances for a second term, rests on his skill in curing America's financial ills. I believe that battle has already been lost, for reasons I've outlined in earlier posts.
What Obama needs now is an attack on Americans, and new war. Bush's friends in the House of Saud and the Bin Ladens, financed an attack for him. Had his friends not financed 9/11, he may have only been a one term president.
I believe that a major new war is the only way to save the Obama presidency. All he needs is an excuse. Someone will give him one.
Oh I almost forgot... the heart of Geithner's plan is to use a combination printing money and pension funds to buy up the toxic crap. That's one way to stick it to Americans. Encourage them to save, then steal their money when the need it the most.
I was wrong about the USA following Argentina's lead. We're becoming Argentina on steroids.
This is a bit off topic. If you'd rather read about politics or other exciting stories, you might skip this post.
Some of you know that I'm an amateur musician. I play semi-regularly at various sessions and open mics in the area. I've had offers for paying gigs, but need to take the time to learn more songs to fill the time slot.
Anyway, I bought a Tascam US-144 back in January, from Murphy's Music. When I brought it home. My system had some serios problems with the drivers that came with it. I upgraded the drivers, firmware and the software that came with it. Simply plugging in the device, without using it, caused Adobe Flash player to crash when browsing Tascam's web site. It's clear that there are some serious problems with the driver.
I contacted Tascam's tech support. They assured me that their drivers are bug free. I could tell be their revision history and notes that they'd fixed a series of issues with their drivers, so I wasn't convinced. The suggestions they gave me were to get a new computer or change the OS. This system is an AMD Athlon 64 with XP Pro 64. Actually the first tech said he'd research the issue and call me back, but never has. The second tech saidthat perhaps the VIA chipset in my machine can't handle the high performance that audio requires. I find this odd as it handles video and audio together, from other devices just fine.
I had intended to get a laptop anyway. So I purchased a mid grade latop with a large hard drive to do field recordings with. It has Windows Vista Business on it. On this system, I can record 20 seconds of audio, then nothing. I have to reinstall the drivers and reboot to record more audio.
I returned the unit to Murphy's Music in Irving. The sales rep there tried to get it to work with my laptop and failed. He wrote up an order to exchange it for another product, but said they would have to order it.
I went back yesterday, (two week later), and got a bullshit story. They can't refund or exchange it, because Tascam has a no refund policy on hardware bundled with CuBase software. The rep said he was going to be out of town for a few weeks, I could check back then and see if anything has changed. I was closing to blowing up by then and left before I did something stupid.
So now Murphy's Music is stealing my money and keeping the unit. I don't have the time to take them to small claims court. So I don't think I have any redress. If i stole moeny from them, I'd go to jail, but being a business, Murphy's can steal my money and not lose anything but a customer.
I've been doing business with them for ten years and my grandfather was a steady customer of theirs when he was alive. But no more. The reputation of Murphy's Music in Irving has declined in the music community over the years, and now I know why.
At this point, I don't recommend that folks from them, or buy Tascam products bundled with Cubase, without trying it first to make sure it works for you. If it doesn't work with your equipment, you've just thrown your money away.
What we learned is that if you give a corporation $Billions in free money, at a rate that is faster than they are losing money, then they can post profits!
Citibank announced that they were currently seeing profits, so investors got excited and drove their stock price up.
This is the new economy, just as predicted. The Government prints and borrows money and gives it to the largest corporations. Those corporations post profits. The market goes up. The GDP continues to grow. Our government based economy shows great numbers even as unemployment rises!
Even now, the US Government makes up 50% of the GDP. This trend has passed the critical point and over the next few years, we may well see the US Government become over 75% of our GDP.
We're moving to the stage where the US Government is America. The US Government will completely manage the markets by controlling the flow of money from one enterprise to another. Unless you accept free government money and the bureaucracy that goes with it, you won't be able to own and operate a business in the US. Further, you'll have government agencies telling you how to operate your business from day to day, and those officials will expect you to give them generous tips. The US Government will effectively own your business and make your life hell, for the privilege.
At 50% of the GDP, the US Government is strangling Free Enterprise. It is ending Capitalism in all but it's most corrupt forms. It is sucking the economic health out of the nation. And still it must grow. And keep growing.
America's business isn't GM or finance. America's business is government. We're becoming a nation made up of a government and a government that is a nation. America's #1 product even now is bureaucracy, and that is one hell of a growth industry.
There is a lot of fear projected, regarding these bills. Below are a few YouTube videos on the topic.
The bill just seems to make things that are already illegal, extra double illegal. It looks like feel-good legislation.
I don't see anything in it that eliminates organic farming. It looks like this is just hoax being perpetrated to generate a bit of hype.
On another point, I believe that restrictions on food processing and production is too stringent. This bills would reinforce these rules.
Read the bills yourself. Let me know if you see something in them I missed. I'm not so much worried that it would give enforcement authorities too much latitude. They already have a lot of latitude in enforcement and I don't see this as changing that. What I'm concerned about are the claims that these bills would make organic farming illegal. I don't see that.
Criminalize Organic Farming? EXCUSE ME?! BILLS: HR 875 and S 425
The End of Local Food (HR 875)
H.R. 875 Food Safety and Modernization Act, poor language and broad powers
Obama to Globalize American Farms - HR 875 and S 425
In the following video, we have Bernie Sanders grilling Ben Bernanke on $2.2 Trillion already loaned to unknown banks. Not $700 Billion, but $2,200 Billion. Bernanke points out that so far, the taxpayer hasn't lost a penny on these loans. He's smug in doing this because he's our high prophet of finance and knows that you can't see a loss on a loan for which there is no payment schedule defined. If payments aren't due, then no one can be late in paying them. Thus, even if the money is never repaid, there are no losses. We haven't lost on the deal, because we haven't asked for repayment yet. So we will likely never ask. Still, 2,200 billion of our dollars has been given away. Right now, I'll declare that a loss in my book. Ben can call it what he wants.
Back in 1999, on forums that no longer exist, I began formulating a mental model of what I thought would happen financially, Post Peak. These early thoughts shaped my later understanding of what Peak Oil would mean on the ground. What has surprised me is things have followed this model so well, so far.
Essentially, I broke down my thinking on this as to what the big players would do as the financial world broke down around them. I looked to the USSR and Perestroika for insight. I realized that the biggest financial players had the clout and the resources to fight dirty and to direct politics to make a long series of short term decisions to save their bacon. Each of these decisions were likely to have long term negative consequences. But they would allow these institutions to survive another business quarter.
Essentially that's the plan. From business quarter to business quarter, the behemoths must survive and be protected at all costs. Further, they must try to grow. If they don't grow, they die. The nature of our fiat money system requires growth in business and growth in the money supply to cover growth in debt, fueled by usury.
So in 1999, I worked out that the biggest banks and biggest industries would get a series of bailouts, giant contracts, and favorable but evil legislation passed, to keep them alive. We haven't seen the legislation really hit hard yet. But I still predict that Congress will be passing legislation aimed at destroying small businesses in the years to come. So far, they've been trying to cripple small businesses, they will become more overt in the near future. Walmart must survive at all costs. Mom and Pop shops must die, so that Walmart may live...
So fast forward to the present. The bailouts are here. The behemoths have grown to large for the world to support. Yet they must grow. The talking heads on the media, proclaim this at every turn. We must divert the planet's resources to feed these dinosaurs, and as we do, their hunger increases and they need more and more.
And as we sacrifice our economies to feed them, we go hungry, our economies dry up and these monsters are losing customers. As they lose customers that are unable to survive the sacrifices they are making, they need bigger bailouts to cover the losses.
This is Financial Overshoot. These behemoths have grown so large and their appetites so huge, that they have destroyed the economy that supports them. They are lumbering on, feeding on whatever they can find to sustain them a little longer. For now, they are surviving off the fat, the goodwill and trust in the world currencies. Soon, they will have exhausted that and they will lash out in their death throes and destroy anyone that get's in their way as they go down.
What we are evolving to is a business climate in which the customers and citizenry don't matter. The system is moving to a state where government and behemoth businesses coexist to serve each other, while sucking the life out of everything that exists on a smaller scale.
I worry that this stimulus plan will evolve to be the only business anyone can hope to participate in. If you can't get into that chain, you'll be unemployed and hungry. The government does not have the resources to replace the private economy. But it does have the power to suck the private economy dry. As the government competes with private industry it will outbid everyone. Materials will run short, and run high in pricing. The government will buy them at increasing prices by printing money from thin air. Private industry that would use those materials to generate profits, will go bankrupt.
A large portion of those materials will be gasoline and diesel fuel.
From this state, a black market will evolve as government agencies become increasingly corrupt and their resources used to buy materials and 'lose' them. Organized crime will take advantage of this and as everything falls apart, all levels of the government will cease to function as we're accustomed to it, and a private citizen will have to pay extra for every service that they are now accustomed to getting for free.
As we get to real dark side of this process, trouble private enterprises will likely be seized by local governments and given to 'business associates'. The big behemoths that destroyed so much, in their struggle to grow past the planet's capacity to support them die ugly deaths. Lawyers, judges, and cops will prosper off the sale of justice. In Argentina these days, cops pull people over to ask for 'tips'. If you don't tip, you can find yourself in trouble. Soldiers will likely be augmenting police, then get hired out to protect neighborhoods and businessmen as they do in Argentina.
Nothing the government does on a big scale will be maintainable. The government will start a lot of huge projects, designed to save the economy, then abandon them as resource prices rise faster than budgets can compensate. Any military actions to lock down cities will likely degrade. The conspiracy theories on camps to house civilians in, may or may not come to fruition, but I doubt it will last. The fears that the military will confiscate guns, may come true, but not long after, black market trafficking in military weapons and ammo, will make the lack of guns a non-problem.
I applaud those of you trying to make a difference and forestall these coming events. But I fear you're shouting at the tide. Each step in our downfall, will be guided by short term self interest. No one with a long view and an understanding of history will be allowed near the reigns of power. First of all, they'll all be called tin-foil hat conspiracists. I know this from experience as a couple of years ago, when I insisted this housing bubble would end in bailouts, I was called a tinfoil hat wearer by most people I discussed this with. Anyone predicting any major event since 2000, before it happened, would and was labeled a loonie. Anyone now who can see the long term trends will be labeled a loonie, or unrealistic as long range planning, suggests strategies at odds with the ideal short term fixes.
And the best way to insure long term survival is an intentional effort to decentralize our economies and government. Tin Foil Hat wearers like myself and many others have been pointing this out for decades. Distributed systems, societies, electrical grids, computing networks, ecologies, etc... work better than centralized ones, during a downturn. When problems arise, distribution of power makes a system more robust than centralization. Ideally at this time, we'd let the morbidly obese banks fail. We'd cut power and spending in the Federal Government. We'd give the states more power over their funding and destinies. We never would've done the damage to the National Guard that we did in Iraq.
Though our world will be forced to evolve to a more decentralized state, we will waste resources fighting the trend. Our way of life is after all, non-negotiable. We will not negotiate and work with natural laws, we will fight them, and force nature to bring us down in her own, very interesting but painful ways.
But for those of you, fighting the good fight. Don't get yourselves arrested. The system will need scapegoats. Our world has had enough martyrs.
And to add another data point, here is a report from Democracy Now. It details how the financial industry has bribed/lobbied politicians to the tune of $5.1 billion, in order to get us into the current mess.
New Report Follows The Money Trail Behind Deregulation Part 1/2
New Report Follows The Money Trail Behind Deregulation Part 2/2