Category: Social Issues

Doug Casey on Internationalizing

Doug Casey on Internationalization

By Doug Casey, Chairman

Since writing The International Man in 1976, I’ve had quite a bit to say about internationalizing yourself. The book’s subtitle was Making the Most of Your Personal Freedom and Financial Opportunity Around the World; but in going over past editions of our newsletters, I find that most of what I’ve written in recent years has been about the financial aspects of expatriation. Now seems a good time to confront the rest of the subject head on – the reasons to very seriously consider leaving your home country, and to do so now, not next year.

The International Man is long out of print, of course, and only available through used bookstores and finders (including amazon.com). While I’m obviously biased, it’s actually still an excellent read, although the world is a different place and I’ve learned a few things since 1976. The book was directed to Americans, but found a fairly broad international market – becoming, among other things, the biggest-selling book in the history of Rhodesia. That, in and of itself, provides a bit of an object lesson in how things can change, I think.

When I first went to Rhodesia in 1978, war was still raging, but I was able to find an entrepreneurial local publisher, Gordon Graham. At the time, there were still about 250,000 people of European extraction among the 6-million population. And it was clear most of them were eyeing the exits and wondering where to go.

Most of the whites were native Africans, born to families that had been in the country for generations, and they felt they had just as much right to be there as the blacks. But when it comes to such things, it’s not a question of rights but of political power. Today there might be 5,000 whites still hanging on. But making what they called “the chicken run” 30 years ago was definitely the smart course. However, few of them had a “bolt hole” elsewhere. In any event, my book flew off the shelves, as people desperately scrambled for alternatives.

The problem – your problem – is that any country can turn into a 1970s Rhodesia. Or a Russia in the ’20s, Germany in the ’30s, China in the ’40s, Cuba in the ’50s, the Congo in the ’60s, Vietnam in the ’70s, Afghanistan in the ’80s, Bosnia in the ’90s. These are just examples off the top of my head. Only a fool tries to survive by acting like a vegetable, staying rooted to one place, when the political and economic climate changes for the worse. When the going gets tough, the mentally tough go elsewhere. The way your forefathers once did – at least, if you live in an immigrant-built country like the US, Canada, Australia, New Zealand, or Argentina.

I don’t know exactly when I became interested in exploring other lands. Maybe it began with reading Uncle Scrooge comics when I was a kid in the ‘50s. Uncle Scrooge (who is a fantastic character and one of the great heroes of American literature) was always taking Donald Duck and his three nephews off to an exotic clime for a high-adventure treasure hunt. Maybe it was when I wanted to be a paleontologist and read about Roy Chapman Andrews (a model for Indiana Jones) rooting for fossils in Mongolia. Or when I decided I’d like archaeology better and read about Heinrich Schliemann discovering Troy. But a couple of specific things really set the bit in my teeth.

One was when I was in Milan, looking to buy a Ferrari. The seller was a guy I remember well, Viviano Corradini, who was actually an American. I asked him why he was living in Italy. “You see this?” he said, as he veered the car way into the opposite lane and back again a couple of times, then slammed on the brakes, then accelerated – a wild little ride. “You can’t do this in the States. They’ll throw you in jail. Here, you can do anything you want!” He was right. After I bought the car we realized I didn’t have any plates, so he reached up into a closet and found some old New Jersey plates. “Here. Use these.” I did, no problem, for the next six months, all over Europe. It gave me some practical reality about not being controlled by other people’s arbitrary rules.

Another was in Switzerland, when I was hanging around for about a month with an ex-Foreign Legionnaire named Ron Schneeberger. He was planning to rob the national bank of Haiti, figuring that Papa Doc had about $50 million in negotiables sequestered there. That was a lot of money in those days. Ron reasoned, quite correctly, that if you robbed the corner liquor store, you’d get $50 and likely get killed. If you robbed an ordinary bank, you might get $5,000. But if you hit a government… who was going to pursue you?

Of course the world in general – and absolutely, positively Europe – is a bit more tightly wrapped now. And I don’t endorse the idea of reckless driving. Or of robbing national banks – at least not without the cover of being an executive with Goldman Sachs…

But the point is that, at different times, there are places that are good for doing certain things. And places where it is bad to be. Who wouldn’t have preferred to be in the USA, rather than the USSR, from 1920 to 1990? Ireland was a dismal, depressing place for decades after WW2; then in the ‘90s it blossomed. Africa was a very safe, prosperous, and enjoyable place before about 1960, when it started to degenerate into a giant hellhole.

About every country on the planet has had its good times and its bad times; that’s one reason the original Baron Rothschild sent his sons to several different ones. Some countries, like Russia, have been living at Hard Times Central since day one; others, like the US, have had good times for a long time.

A wise man, at least in my view, doesn’t allow himself to be limited by an accident of birth.

It’s most unfortunate (for them, anyway) that most people have a peasant mentality. They’re idiotically indoctrinated into thinking that their country is the best place in the world, simply because that’s where they were born. It makes sense in a way; their ancestors rarely ventured more than a day’s walk from the village where they were born. After all, there were stories of dragons and demons over the hill. Things haven’t changed much, except people have exchanged the mud hut for a McMansion. But they’ve retained that medieval serf worldview. And the CNN and BBC newscasts on their widescreens only reinforce the notion that things are dangerous outside their borders; they’re probably even more scared than their primitive ancestors. Assuming they watch anything beside sitcoms and sports.

It’s certainly possible to be happy living your whole life in the place you were born and grew up. But unless you were born a member of the lucky sperm club, it’s almost always suboptimal, and sometimes it can be disastrous. I suspect now is one of those unhappy times.

We’re of the opinion that the world at large, and the US in particular, is heading into some seriously turbulent times. The diminution of personal and financial freedom looks like a hyperbolic curve, at first with an almost unnoticeable slope, then one that gets steeper and steeper, at an accelerating rate. I think an excellent case can be made that the current crisis is an inflexion point, beyond which it goes vertical. As one of Obama’s closest counselors (and he’s a very scary guy) has said, “One can’t let a good crisis go to waste.”

A crisis (and this will be a very real one) always draws exhortations from the authorities to “unite” and “pull together” – which usually boils down to following orders and turning in those who don’t. People will want, and will get, “strong leadership.” This does not bode well for libertarians, classical liberals, and free thinkers, in general.

As the crisis deepens, it’s likely to be dangerous for someone who doesn’t agree with groupthink. Things are likely to be much mellower if you’re living somewhere they consider you a tourist, than to stay on your home turf where questions will be asked if you don’t join the hooting and panting chimpanzees that will surround you. You can absolutely plan on unwelcome social pressure in the years to come, especially as the wars expand.

Coincidental with this is going to be the near destruction of the US dollar; I just don’t see any realistic way around that eventuality at this point. The consequences of that are going to be disastrous, but it’s possible to insulate yourself from many of them. The biggest problem, and also the one most people just don’t see, is political. There is almost no way you can effectively insulate yourself if a government, and society as a whole, goes crazy.

You might argue that really tough times in the US are a long shot; the US is “different” from other countries. It’s certainly true the US has been particularly blessed for most of its existence, because it actually was different. The problem is that what made the US different from every other country – a Constitution that expressly limited the powers of the state, and an explicit acceptance of property rights and the free market – has evanesced. It’s why I refer to it as the US, which is just another country, rather than America, which was a unique and excellent concept.

In any event, I suggest you at least consider the possibility of transplanting yourself, or at least start by transplanting some assets. Don’t look at it as a negative thing. The world is your oyster. Make the most of it. This is directed not only at Americans, but at everybody, everywhere. It just seems a little more urgent for Americans, as well as for Europeans, at this point.

In many ways the world seemed to turn over a new leaf in the ’80s. Not just with the election of Reagan and Thatcher, but with the appearance of many more like them, almost everywhere. Whether it’s the “hundredth monkey” hypothesis, or whether there really is such a thing as the “spirit of the century,” the majority of people tend to hold similar views at the same time. It’s strange. From about 1980-2000, all over the world, tax rates went down, regulation was relaxed, markets were freed up. The Soviet Union collapsed, apartheid in South Africa nonviolently disappeared, New Zealand fired two-thirds of its government employees, China liberalized. Even the constipated continents of Europe and South America loosened up. It looked like freedom was in the ascendant. But it couldn’t last.

Now, certainly since September 11, 2001, the tenor of the world has changed again – radically. And the negative new trend has been supercharged by the financial crisis that began to unfold in 2007. Now practically everywhere, much higher taxes, onerous new regulations, border controls, and capital controls (to prevent the make-believe crime of money laundering), among other things, are the new order. It seems as if the clock has been turned back to the 1930s, but much worse, in that governments are much more powerful. And I fear a redux of the 1940s is in store. The whole world acted pretty much the same in the ’30s and ’40s as well, you’ll recall.

One thing I think you can plan on is foreign exchange controls. A government turns to FX controls during a currency crisis, to prevent its citizens from swapping the local currency for something foreign – transactions that would further weaken the local currency. FX controls, in effect, force people to stay with a sinking ship. But they are politically popular, for a number of reasons. They allow the government to “do something” during a crisis. They appeal to the average yahoo, partly because he doesn’t travel abroad and tends to question the patriotism of those who do. Only the rich (especially the “unpatriotic” ones) have assets out of the country, and it’s now time to eat the rich.

We’re heading into a currency crisis for the record books, and I think you can plan your life around some type of FX controls. If you don’t get significant assets out of your home country now, you may soon find it costly and very difficult to do so. Already, very few foreign banks and brokerage firms will take accounts from US persons. But although there are reporting requirements, there’s currently no law against Americans having overseas accounts, and no laws against foreign banks and brokerage firms accepting American business. Many institutions find that it’s simply not worth the aggravation and worry to deal with Americans.

At a bare minimum, you should have a meaningful amount of gold in a foreign safe deposit box. In addition, you should own some foreign property, preferably in a location where you would enjoy spending some time. These things are currently not reportable, and it would be impractical for the government to get you to repatriate that capital.

The ideal scenario, of course, is to have your main residence in one country, your assets in another, your business in a third, and your citizenship in a fourth. That isn’t practical for most. But you can certainly get assets abroad. And you may want to consider acquiring a second citizenship, which can considerably expand your options. The International Man has a lot on this topic. It’s not necessary, and often not even desirable, to establish official residency in the country where you’d like to spend time, because that risks getting stuck in its tax system. It’s usually smarter just to leave every 90 days to renew your tourist visa and not spend more than six months per year in any one country. That way you’ll be treated as a valued tourist, who should be courted, rather than as a citizen, who can be milked like a cow.

Once you do acquire another passport, the next question is whether you should renounce your US citizenship, which could give you huge tax and regulatory benefits. As everyone knows, the US is one of the few countries in the world that taxes its citizens regardless of where they may live – although it must be said that other governments seem to be moving in this direction.

The problem with renouncing your US citizenship is that the US assesses what amounts to an exit tax on Americans who do so.

Since 2004, any high-net-worth individual who renounces his citizenship is automatically assumed to have done so for tax reasons. And any individual deemed to have expatriated for tax reasons is deemed to have sold all his assets at fair market value on his last day as a US citizen. And, if the expatriate spends more than 120 days per year in the US, he can be taxed on his worldwide income and potentially is subject to estate tax.

In the near future, however, even that option may not be feasible. So let’s plan ahead…

I wrote The International Man as a guide for those who were looking for a place that could offer more of what they want. I can’t rewrite the book in this short report. But it’s worth making a few observations about the world in general, then about some areas and countries in particular.

First, there may not actually be any one “best” place, simply because you’re dealing with the human animal, who’s subject to all manner of fears, hysteria, vices, and assorted aberrations. I don’t know where Shangri-La is located. Therefore, you want some degree of diversification, so you always have a “Plan B” available.

Second, there are roughly 225 distinct political entities around the world, and there are likely to be more as time goes on. There are advantages to places that are unstable, poor, repressed, and backward, just as there are disadvantages to places that are stable, rich, free, and advanced. A lot depends on who you are and what you want to do. Try to keep an open mind.

Third, I don’t think there’s any doubt that the West – meaning North America, Europe, Australia/New Zealand, and Japan – is in relative decline. Meanwhile, places like China, India, and Vietnam are on the way up.

The reasons are simple. In the developing world, a worker earns between 1/5 and 1/30 what his counterpart does in the West. But he’s just as smart, might be even better educated, is likely to work twice as hard, and has less of an attitude of entitlement. It may be true (but less and less) that the developing country has less infrastructure. But now a number of them have telecoms, roads, airports, and such that are among the world’s newest and best, while many of those in the West are falling apart. At the same time, the general level of taxes and regulation tends to be much lower in developing countries; that’s a big reason why they’re developing. Part of the better social ambiance is reflected in people being free of debt; they may not make much, but they save something like 10% to 20% of what they do make. So, instead of a mountain of debt that must be paid off, there’s a growing pool of savings to be invested.

The days of automatically having the odds tilted in your favor simply because you were born an American are coming to an end. By the end of this century, wages will be more or less normalized the world over. Americans also have had a huge advantage in speaking English, the world’s most commonly spoken language, its lingua franca, and the language of science, business, aviation, entertainment, and other fields. But that advantage is also diminishing, as almost every educated person now has English as a second language. Most Americans have only English.

Negatives? Many of these places have large bureaucracies, as a legacy from buying into various strains of socialism imported from Europe. There may not be much regulation (of the type we have in the West), but there are still plenty of forms that need to be processed and approved. In order to make things happen, bribes must be paid. I’ve discussed the ethical implications of paying bribes in the past, but suffice it to say that as developing countries become freer and wealthier, bribery and general corruption will likely diminish. At the same time, as the US becomes less free and wealthy, bribery and general corruption will greatly increase.

I think it’s incumbent upon any self-directed free man to go where he can most fully realize himself. But where that is depends on who he is. And sometimes happenstance plays a part. I’m reminded of one of my favorite scenes in Casablanca. Claude Rains, as Renault the police inspector, asks Bogart:

“Rick, how’d a guy like you ever wind up in Casablanca?”

“I came for the water.”

“But there’s no water in Casablanca – this place is a desert…”

“Yeah, I was misinformed.”

Doug Casey is chairman of Casey Research and a highly sought-after speaker on investments and the economy. At 2 p.m. EDT on Tuesday, April 30, you can hear him discuss how to legally move your assets abroad in a special web event, titled Internationalize Your Assets. Joining him will be Euro Pacific Capital Chief Global Strategist and CEO Peter Schiff; GoldSilver.com founder and owner Michael Maloney; World Money Analyst Editor Kevin Brekke; and Casey Research Managing Director David Galland.

Get the details and register here.

SHADES OF 1929

For those not paying attention, we have entered a global deflationary depression. The nutjobs running the world’s central banks and the moronic politicians elected by the sheep have tried Keynesian fiscal pork, zero interest rates, fraudulent accounting, printing money at hyper-speed, propaganda, austerity for the peasants, bonuses for the criminal bankers and crony capitalism for the super rich. It is five years later and it hasn’t worked. The grand experiment has failed. Bernanke and Krugman’s theories have been discredited. The world is on the edge. Bad shit is happening. Behind the scenes, the oligarchs are panicked and scrambling to retain their wealth and power. They are criminally inept. Their solution will be to accelerate what has already failed. This is how deflationary depressions turn into hyper-inflationary collapses. The massive buying of physical gold and silver by individuals and Far East countries is rational and prudent. The oligarchs won the battle in the past week. They may win a few more battles, because they have many weapons, but they will lose the war. This Fourth Turning is about to get really interesting.  

Fed and Bank of Japan caused gold crash

Commodity prices have been falling since September, culminating in a rout over the past two weeks. That is a classic warning for the global economy.

Traditionally shaped pure raw gold bars stacked in a secure bullion room safe

By

7:22PM BST 17 Apr 2013

It is becoming ever clearer that the roaring boom in global equities since last summer has priced in an economic recovery that does not in fact exist. The International Monetary Fund has had to nurse down its global growth forecasts yet again. We are still stuck in an old-fashioned trade depression, with pervasive over-capacity in manufacturing plant and a record global savings rate of 25pc of GDP.

German car sales fell 17pc in March. That should puncture the last illusions that Germany is about to pull Europe out of a self-inflicted slump.

As you can see from the chart below, the divergence between stock markets and the Deutsche Bank index of raw materials is astonishing to behold, so like the pattern in early 1929.

Steel has fallen 31pc this year. Brent crude is off 17pc since early February, and copper 15pc.

You have to be careful reading too much into commodities, distorted by China. The time-honoured cycle is a surge of investment that comes on stream at once with a lag. America’s shale drive has turned the gas market upside down, diverting liquefied natural gas to Europe and Asia. Copper output in Chile rose 7pc last year. The crash in the Baltic Dry Index for shipping rates is partly a tale of too many ships.

Yet excess supply does not explain the collapse in gold over the past week. Cyprus may have been an incidental trigger. If the EU-IMF Troika is determined to strong-arm the Cypriots into selling most of their pint-sized holding of 14 tonnes, it may do the same to Portugal when the time comes, and then you are talking about the world’s 14th biggest holding of 382 tonnes.

Bank of America says the gold crash since Friday has already discounted sales of the entire Cypriot, Portuguese and Greek gold reserves combined. “As we believe additional gold selling in the European periphery is highly unlikely, we find it hard to fully justify the sell-off,” it said.

The central banks of China and the emerging powers bought 535 tonnes last year to escape dollars and euros, the biggest wave of state purchases since 1964. Their strategy is to buy the dips, and they are no fools. The head of China’s reserve manager “SAFE” used to run a US hedge fund.

They won’t try to catch a “falling knife”, prefering to wait until the dust settles. The upward trend of the great bull market has been broken. The technical damage is brutal. Bank of America expects a further drop to $1,200. Be patient.

My view is that the US Federal Reserve and the Bank of Japan “caused” the gold crash. The rest is noise. The Fed assault began in February when it published a paper warning that the longer quantitative easing continues, the harder it will be for the bank to extricate itself.

The report was co-written by former Fed governor Frederic Mishkin, often deemed Ben Bernanke’s “alter ego”. It said the Fed’s capital base could be wiped out “several times” once borrowing costs climb. The window will start shutting by 2014, with trouble then compounding at a “dramatic” pace.

This was a shock. It suggested that the Fed has lost its nerve, and will think long and hard before launching a fresh blitz of money if growth falters.

Then came last week’s Fed Minutes, with hints of tapering off QE earlier that expected. That was the next shock. What they seemed to be saying is that the US economy is groping it way back to normality, that the era of silly money is over, that the dollar will stand tall again.

If that were the case, gold should fall. But it is not the case. The US economy is growing below the Fed’s own “stall speed” indicator. Half a million people fell out of the workforce in March. Retail sales fell in March. So did manufacturing.

The US faces fiscal tightening of 2.5pc of GDP this year, the most since 1946. Ex-labour secretary Robert Reich said the effects have been disguised so far, but a “stealth sequester” is just starting: $51m of grant cuts to Brandeis university; $1m for schools in Syracuse; and so on, the reverse of the stealth stimulus before.

My guess is that the Fed will be forced to row back smartly from its exit talk, but first we must look deflation in the eyes.

As for the Bank of Japan, it had been assumed that the colossal monetary stimulus of Haruhiko Kuroda would revive the yen-carry trade, leaking $1 trillion into world asset markets. But the early evidence is the opposite. Japanese investors brought money home last week.

“Mrs Watanabe” is selling her Kiwi and Aussie bonds to bet on stocks and property at home. And she is selling gold like never before. That too is a shock.

Japan’s “Abenomics” may prove a net drag on the world over coming months. It is exporting deflation through trade effects. This already visible in Korea and China, where soaring wages have eroded competitiveness. “Investors may have forgotten that yen weakness was one of the immediate causes of the 1997 Asian currency crisis and Asia’s subsequent economic collapse,” said Albert Edwards from Societe Generale.

China’s growth rate fell to 7.7pc in the first quarter. It will fall further, though the catch-up boom in the hinterland cities of Chengdu, Chonquing, Changsa and Xi’an may have further to run.

Fitch Ratings says credit has surged from €9 trillion to €23 trillion over the past four years, a rise equal to the entire US banking system. Beijing pumped up loans yet again after its recession scare in the summer, but is gaining less traction. The GDP growth effect of credit has halved. It is the classic sign of an economy sated on debt. China too will have to deleverage.

The world is still in a contained depression. Sliding commodities tell us global money is if anything too tight. “There is a threat of deflation almost everywhere. A lot of central banks will have to follow the Bank of Japan, whatever they say now,” said Lars Christensen form Danske Bank

The era of money printing is young yet. Gold will have its day again.

 

DO YOU WANT FRIES WITH THAT COLLEGE DEGREE?

The number of 18 to 24 year olds rose from 27.3 million to 30.7 million between 2000 and 2010, a 12.5% increase. The percentage of 18 to 24 year olds enrolled in college rose from 9.7 million (35.5%) to 12.6 million (41.2%) over the same time frame. So even though the overall population of 18 to 24 year olds has grown by 12.5%, the percentage in college has risen by 30%. This is a fascinating development because test scores reveal that students have gotten dumber since 2000.

Over this time frame average SAT scores have fallen. In 2012 1.66 million students took the SAT exam and 43% met the minimum score necessary to achieve a B minus average in their first year of college. That means that 700,000 high school seniors were intelligent enough to attend college. Based on these scores, there are only between 2.8 million to 4.2 million 18 to 24 year olds that have the necessary ability to attend college. But, somehow there are 12.6 million attending college.

For the 2010–11 academic year, the average annual price for undergraduate tuition, fees, room, and board was $13,564 at public institutions (including $5,076 for in-state tuition) and $32,026 at private, not-for-profit and for-profit institutions. That’s a pretty penny to be paying when two thirds of the kids in college shouldn’t be there.

Of course we all know how these kids are able to attend college. The government has lured millions of young people into debt servitude by handing out hundreds of billions in cheap loans for college. Total student loan debt now exceeds $1 trillion and federal student loans outstanding exceed $600 billion, headed to over $1 trillion by the end of the decade.

Banks wrote off $3 billion of student loan debt in just the first two months of 2013, up more than 36% from the year-ago
period, as many graduates remain jobless, underemployed or cash-strapped in a slow U.S. economic recover. Delinquencies have spiked, with about 17% of the nearly 40 million student loan borrowers at least 90 days past due on their repayments, a February report from the New York Federal Reserve Bank showed. So, while students are defaulting at a record pace, the Federal government accelerates the issuance of new loans. They aren’t worried about getting paid back. They’ll just stick the American taxpayer with the losses. The purpose has been to artificially deflate the unemployment rate and hoping their Keynesian fantasies would eventually lead to an economic recovery. But it didn’t happen.

The Obama “Big Mac & Fries Jobs Recovery” has done wonders for our recent college graduates. McDonalds is now requiring fry cooks to have college degrees. College graduates are finding tremendous opportunities at Taco Bells, KFCs, Pizza Huts, Burger Kings, Wendy’s and McDonalds across the land. At least their jobs can’t be outsourced to India. I think this development offers the University of Phoenix a tremendous new opportunity – a degree in “Do You Want Fries with That?” They can offer a Masters Degree in Advanced Fry Cooking. Maybe even a Doctorate in “Hold the Pickles, Hold the Lettuce”.

food services as proportion of the economy

Enslaving millions of young people in billions in un-payable debt to get degrees that obtain them jobs at fast food joints is going to backfire on the Feds when these young people get pissed off enough and when the taxpayers get a bill for hundreds of billions in bad debt that will be written off.

THE GREAT POSTAL FRAUD

“One of the things the government can’t do is run anything. The only things our government runs are the post office and the railroads, and both of them are bankrupt.” – Lee Iaccoca

You may have heard that the U.S. Post Office lost $16 BILLION last year. You may also have heard that Congress snuck a requirement into a bill that had nothing to do with the Post Office, mandating that they must deliver on Saturdays, even though eliminating Saturday delivery would save the Post Office $2 BILLION per year. Congress evidently can’t read a financial statement or interpret a chart. I’m sure the trends detailed on this chart will reverse themselves shortly.

While reading an editorial today supporting the Post Office in its efforts to save money by eliminating Saturday delivery I saw another MASSIVE LIE perpetuated by the MSM and the government.

Here is the Orwellian statement:

“The U.S. Postal Service is an independent governmental agency that doesn’t take taxpayer funds.”

This is complete and utter bullshit. This statement also described Fannie Mae and Freddie Mac until 2008. They were just little old independent government agencies helping out the housing market – until the shit hit the fan!!! Then they became albatrosses around the necks of the American taxpayer. You own them now. They have lost $200 billion of your tax dollars, and will lose billions more before all is said and done.

You can access the U.S. Post Office financial statements online. Here is their December 2012 report:

http://about.usps.com/who-we-are/financials/financial-conditions-results-reports/fy2013-q1.pdf

The honesty of the people writing this report is refreshing. They essentially admit they are BANKRUPT and unable to meet their financial obligations. In other words, a truly INDEPENDENT entity admitting they can no longer operate. How is this for honesty:

“The Postal Service continues to suffer from a severe lack of liquidity. The Postal Service held total cash of $2.9 billion and $2.3 billion as of December 31, and September 30, 2012, respectively, and had no remaining borrowing capacity on its $15 billion debt facility (See Note 3, Debt, for additional information). The increase in cash balances for the quarter is largely attributable to the seasonal impact of holiday mailings, along with additional revenue resulting from this year’s political campaign and elections. Cash balances generally decline during the remainder of the fiscal year, as revenue is not as strong in the remaining quarters. By the end of this fiscal year, the Postal Service projects it will have a liquidity balance that will be less than its average weekly expenses of $1.3 billion. This low level of available cash means that the Postal Service will be unable to make the $5.6 billion legally-mandated prefunding of retiree health benefits due by September 30, 2013. Further, this level of cash could be insufficient to support operations in the event of another significant downturn in the U.S. economy.

Through the three months ended December 31, 2012, the Postal Service has suffered 5 quarters of consecutive net losses and net losses in 14 of the last 16 quarters. The net loss of $1.3 billion for the first quarter of the year included $1.4 billion of expense accrued for the legally-mandated prefunding payment for retiree health benefits. The requirement of the Postal Accountability and Enhancement Act, Public Law 109-435 (P.L. 109-435) to prefund its retiree health benefit obligations, a requirement not shared by other federal agencies or private sector businesses, plus the precipitous drop in mail volume caused by changes in consumers’ uses of mail, have been the two major factors contributing to Postal Service losses since the recession ended in 2009. Without structural change to the Postal Service’s business model, it will continue to be negatively impacted by these factors and, absent legislative change, it anticipates continuing quarterly losses for the remainder of 2013.”

The politicians that are mismanaging this country use governmental accounting fraud to cover-up the fact that the obligations of this bloated pig of an operation are going to be paid by YOU, the taxpayers of the United States. Today, none of the past, current, or future liabilities of this INDEPENDENT GOVERNMENT AGENCY are reflected in the Federal budget projections or the National Debt calculation.

Do YOU want to know how much YOU really owe? Brace yourself.

  • In the past six years they have lost $41 BILLION and they have a cumulative deficit of $36 billion. How many INDEPENDENT organizations can run up deficits of $36 billion without going out of business? YOU are on the hook for these accumulated deficits, just like you were on the hook for all of the Fannie and Freddie backed toxic mortgages.
  • The Post Office will lose another $10 to $15 billion this fiscal year. You will be on the hook for that too.
  • They have $15 billion of debt on their balance sheet, with $9.5 billion payable in the next 9 months. How will this INDEPENDENT government agency that is losing $16 billion per year pay off $9.5 billion? They won’t. The government drones will pass a bill in the middle of the night extending the terms with no cash flow requirements or expectation of repayment. I wonder if I can get a loan like that?
  • The really interesting stuff is buried on page 42 of their report. I wonder why it is all the way back there? In addition to their $15 billion of debt, they have another $70.5 BILLION of unfunded future obligations. The two biggest are:
    • $33.9 Billion of payments for pension and health benefits for retirees, all due within the next 5 years. It’s not cheap providing gold plated benefits to government workers.
    • $25 billion for workers compensation and sick leave payments. Yikes!!! It must be all that stress, because the mail never stops. It keeps coming and coming. It’s almost enough to make someone go postal, or at least file a stress related workers comp claim.

This really sounds like a promising story. Mail volumes continue to plummet. Someone should tell Congress the internet age has arrived. The Post Office has thousands of money losing, unneeded outlets. It has 637,000 employees when it only needs 300,000. Over 70% of Americans favor ending Saturday delivery, so Congress passes a law making that impossible to implement, ensuring $2 billion more losses per year. That’s par for the course. Over 70% of Americans were against passing TARP too. And according to your leaders in Washington, and parroted by the MSM, you are not on the hook for their losses.

It’s beyond laughable, but so is most of what is going on in this tragedy of a country, disguised as a comedy. The truth is that you are on the hook for the $36 billion of accumulated deficits, the $85 billion of debt and contractual obligations, and the annual $16 billion losses they continue to pile up. But what’s $120 to $150 billion among friends? Bennie can print that out of thin air in a few days. Why run an operation efficiently at a surplus, when you can keep hundreds of thousands of union government drones employed (until they go on workers comp) by sticking it to the working American taxpayer. I sure hope I don’t get a visit from the Postmaster General because of this article.

http://youtu.be/6nKlzQo3Wqo

 

MAIN STREET VERSUS WALL STREET

Do small businesses, which account for 65% of all the new hiring in the country, become less optimistic during an economic recovery?

“After another false start, small business confidence has sputtered and stalled again. For the sector that produces half the private GDP and employs half the private sector workforce -— the fact that they are not growing, not hiring, not borrowing and not expanding like they should be, is evidence enough that uncertainty is slowing the economy. Virtually no owners think the current period is a good time to expand, because they simply don’t know what the future holds. So why invest? And with the lack of any sustainable fiscal policy or a federal budget, no one’s banking that Washington will be at forefront of any meaningful change. Overall, it appears that there will be little growth coming from the small business half of the economy; as the world economy slows, even big business may suffer.” — NFIB chief economist Bill Dunkelberg

Small Business Optimism Down in March

The March NFIB Index of Small Business Optimism ended its slow climb, declining 1.3 points and landing at 89.5. In the 44 months of economic expansion since the beginning of the recovery in July 2009, the Index has averaged 90.7, putting the March reading below the mean for this period. Of the ten Index components, two increased, two were unchanged and six declined. Among the greatest declines were labor market indicators, inventory investment plans and sales expectations. 

Small business optimism report for April 2013

Small business owners are on the ground near the real people. They aren’t sitting in ivory towers at Princeton playing with regression models. They aren’t programming their high frequency trading computers to buy the dip. They aren’t calculating their bonuses and stock option compensation. They are trying to make payroll. They are trying to sell products. They are trying to understand how badly Obamacare will screw them. They are trying to navigate through the hundreds of thousands of rules, regulations and laws that are passed by politicians. They are paying experts thousands of dollars to decipher and comply with the IRS tax code. Well guess what? They have no plans to hire anyone and they expect sales to go lower.

Small business optimism components

Ben Bernanke’s money printing is not benefitting them in any way. His policies are not generating jobs. His policies are impoverishing savers, who now have less money to spend at small businesses. Ben Bernanke’s policies are designed to benefit Wall Street banks and mega-corporations. His policies are designed to drive stock prices higher and enrich the connected crony capitalists that control the country. Meanwhile, small businesses and small people are dying on the vine. The real economy is withering away under the weight of massive debt, crushing taxation, and ponderous government regulations and red tape.  

Top problems of small business owners

There has never been a greater disconnect between Main Street America and Wall Street in our history. It will not end well. Bill Dunkelberg seems to be an economist with common sense, as opposed to the Keynesian morons like Krugman and the other Wall Street shills paraded on CNBC.

 

COMMENTARY BY CHIEF ECONOMIST BILL DUNKELBERG

Bill "Dunk" Dunkelberg
NFIB Chief Economist
William Dunkelberg

Small business produces half the private GDP and employs half the private sector workforce. But it is not growing, not hiring, not borrowing and not expanding enough. Small business owners have been depressed since 2007 and that has not changed. In the March survey of NFIB’s 350,000 member firms, 77% expect the economy to be no better or even worse 6 months from now that it is currently. Only 4% think the current period is a good time to expand substantially, compared to an average of 17% for the period 1973 to 2007. More owners plan to reduce employment in the coming months than plan to create new jobs. More owners plan to reduce their inventories than plan to order new stocks. The bulk of growth comes from the increase in our population of about 3 million people and the growing need to simply replace stuff that is wearing out, not enough to get the economy back to trend growth much less the strong growth needed to restore employment to 2007 levels.

The Federal Reserve continues to assert its intention to purchase a trillion dollars of Treasury securities and mortgages, adding a trillion dollars to its portfolio and stuffing a trillion dollars of new liquidity into the banking system, until the unemployment rate falls below 6.5% or inflation breaks out. Then it will “consider” changing policy. Unless something really bad happens, this is a winning strategy for the Fed because eventually the private sector will improve, the labor force will shrink (as boomers leave), the unemployment rate will fall and the Fed can claim its policies “worked”, even if their policies made no contribution to the improvement or even slowed it down by creating uncertainty and fear among investors and business owners.

This is a risky strategy. The evidence that “uncertainty” is slowing the economy is pretty clear now (research at the San Francisco Federal Reserve for example) and uncertainty probably increases with the size of the Fed’s portfolio (as has the price of gold). The real economy is hardly growing yet the stock market and corporate profits are at record high levels. How do we make a record amount of money without producing more output and employing more workers? Such contradictions breed uncertainty.

In the meantime, a record low percentage of small business owners claim that credit is their top business problem (3%) while taxes get the most votes (23%). Record numbers of owners have no interest in a loan (over 60%), because they have no use for the funds that have a high probability of successfully generating a return so the loan can be repaid. The Fed has made sure that there is plenty of money to lend, but in the process may have reduced the confidence that borrows need to take risks, borrow, spend and expand. And then there’s the impact of fiscal policy (or the lack of a policy). The President is flying around the country doing fund-raisers and stumping for gun control, but he still has presented no budget proposal. Enough said.

WHY SO PISSED?

2 injured in Northeast Extension crash in Whitpain Twp.

Last Friday I was stuck on the Northeast Extension for an hour as an accident had blocked both lanes for two hours. I listen to the Preston & Steve Show on WMMR as I drive to work. Preston lives up near me and was also stuck in this traffic jam, making him late for his morning show. Yesterday he received a call on air from the guy who caused the accident to apologize for making him late. He was driving a tractor trailer at 5:00 am going South on the Extension. Traffic had come to a stop up ahead due to a minor fender bender further down the road. This guy said he was distracted and looked down. When he looked up again it was too late. He crushed an SUV that had stopped in front of him. Here is some advice for assholes across the land. Don’t get distracted when you are driving a lethal vehicle at 70 mph. Don’t look down. Don’t text. Don’t talk on the phone. Don’t be an asshole. 

Besides seeing idiots all over the road being distracted by their gadgets, I’ve noticed something else in the last few weeks. Extremely aggressive, angry, ignorant drivers seem to be proliferating on all roads. I’ve been cut off by dickheads at least three times in the last week. I’ve seen pricks barreling up the shoulder of the highway with traffic stopped, as if cutting off drivers following the rules will get them to their destination sooner. I’ve seen dozens of idiots flying by in turning lanes and then stopping completely to cut into the non-turning lane. Then there are just the general jerk-offs who are zigging and zagging on the Schulykill, cutting off anyone that slows them down.

I don’t know if it’s just me, but most of the aggressive motherfuckers seem to be driving BMWs or other expensive cars. I don’t know if this proves anything, but I wonder if this is another example of the deteriorating mood in this country that goes along with the Fourth Turning. People are growing increasingly angry and lashing out, especially the people who have bought into the lies spun by those running the show. Most of those BMW driving assholes are probably leasing them and are in debt up to their eyeballs. They are terminally pissed off because their life built upon delusions and debt is crumbling. Buying shit on credit did not make them rich. Their techno-gadgets, leased luxury automobiles, and underwater McMansions are an anchor around their necks. They take out their frustrations on the world by driving like maniacs on a suicide mission.  I expect to see further aggression when the economy really implodes over the next two years.

I’ve said this before and I’ll say it again, if one of these assholes ever has an accident with me and fails to kill me, I will get out of my car, grab a tire iron and beat them to death.

But meanwhile Philly went directly from Winter to Summer, with no Spring. It will be 82 degrees today. Have you ever been on a college campus when it is 82 degrees? It is hard to be in a bad mood.

AT LEAST HE WON’T HAVE THAT AWFUL COMMUTE

I guess that turnaround touted by the idiots that pass for Wall Street analysts isn’t going well. Poor Ron. I wonder whether his severance package was $3 million or $4 million for destroying a 100 year old retailer in 15 months. That lear jet commute from Palo Alto every Monday morning must have been a real bitch. His acumen in deciding not to move to Plano Texas proves how smart this douchebag really is. Maybe Apple will rehire him so he can work his magic in their Apple stores. 

Next stop – Bankruptcy.

JCPenney CEO Is Out

 
Tyler Durden's picture

Submitted by Tyler Durden on 04/08/2013 17:06 -0400

So much for the “transformation” CEO. As per CNBC, he “is out”:

  • J.C. PENNEY TO OUST RON JOHNSON AS CEO: CNBC
  • J.C. PENNEY’S CEO JOHNSON `IS OUT’: CNBC

At least he lasted just a bit longer than the former JCP president Mike Francis, who came, saw, collected $10 million, and quit nine months later.

Why the stock is soaring after hours on this latest admission of defeat is beyond us. If anything, this means JCP is closer to filing than ever as the last bastion of hope at the distressed retailer is now gone.

FRIDAY IS ALREADY A FAIL

Admin was parked on the Northeast Extension for 30 minutes this morning due to an accident that blocked both lanes for two hours. The frustration began to build.

Then he made it to the Schuylkill Expressway and it was gridlock. Now Admin was really getting pissed off.

After finally making it into lovely West Philly, he attempted to make his normal left turn onto 36th street.

But there he was behind a school bus with its red lights blinking. Not only was this bus picking up a kid, but it was picking up a disabled wheelchair bound kid with the special lift. Do you know how long it takes to get a kid in a wheelchair onto a school bus?

My Friday trek to work, which normally takes 45 minutes, took 90 minutes. I feel sorry for the department that has to present their FY14 budget to me at 9:30 this morning. This is how I will arrive at the meeting.

And now I have this weekend to look forward to as I slog through my overly complicated tax return and try to write an article for you shit throwing monkeys. I recommend that no one disagree with me today.

IF AUTO SALES ARE BOOMING THEN WHY……..

GM and Ford reported “strong” sales for March, up 6.4% and 5.7% respectively. The current annual rate of auto sales has “surged” to 15.2 million. Last year sales rose to 14.5 million from only 12.7 million in 2011. This sure sounds like a tremendous recovery led by great new models from our “saved” GM and wonderful iconic Ford Motors. The MSM was crowing about the results today, except the details tell a different story. GM’s car sales FELL 3% in March. The surge in sales was due to fleet sales going up 12%. It couldn’t possibly be the Federal government buying vehicles, could it? Cadillac sales surged as subprime loans in West Philly to the FSA reached record levels. There were 1,478 Volts sold in the whole country – so there will be 15.2 million vehicles sold in the country and the Obama Volt will account for less than 20,000 of these sales or .0013 of all car sales. Ford car sales FELL 0.2%. Their increase was also driven by fleet sales and truck sales. How dense is the average American? Gasoline prices are above $4.00 per gallon in many cities and they continue to buy low gas mileage trucks and SUVs.

The auto market is completely dependent upon 7 year 0% financing for good credits and subprime lending for 45% of sales and this is all they can achieve?

If sales have been so awesome for the last two years, why are their stocks and their profits in decline? Inquiring minds want to know.

If auto sales were 12.7 million in 2011 and they are pacing at 15.2 million in 2013, why has GM stock dropped from $38 to $28, a 26% decline? I thought Obama saved GM and they were doing awesome. Vehicle sales are up 20% since 2011 and GM still managed to earn $3 billion less in 2012 than they earned in 2011. This doesn’t even take into account the massive channel stuffing that has artificially boosted their sales figures.

It seems that selling vehicles to your dealers and to deadbeats through Ally Financial doesn’t generate profits. But who needs profits when a storyline will do.

 

Chart forGeneral Motors Company (GM)

 

If Ford Motor is doing so well why is their stock at $13 today when it was at $19 in 2011? For the math challenged, that is a 32% drop when auto sales are up 20% since 2011. Is the MSM reporting that Ford sales dropped by $2 billion in 2012 and their net income from operations dropped by $1 billion? Are we really having a strong auto recovery if the two biggest US automakers are making significantly less profit?

Chart forFord Motor Co. (F)

The MSM is not in the truth business. They are in the propaganda business. The storyline of auto recovery is false. The reported sales increases are due to channel stuffing and easy money from Bennie. The 45% of sales from subprime loans will bite the taxpayer in the ass when Ally Financial reports billions in losses over the next few years. You own Ally Financial. So it goes.

 

SECTION 8 STILL DOING GREAT

With the kids on Spring Break, we took a three day weekend in Wildwood. Today was beautiful. It was nice enough to ride our bikes to the lighthouse and take a nice four mile hike on the boardwalk. Easter Sunday’s weather was dreary so we did some bowling at the Wildwood Bowl and almost won a trivia competition at Owens Pub in North Wildwood while watching the Flyers make a dramatic comeback to keep their playoff hopes alive. Our four year ordeal regarding our defectively built deck is over. The new deck is awesome. There was virtually no noticeable damage from Sandy in Wildwood. I hope the deck work and Sandy didn’t inconvenience my Section 8 next door neighbors. They seem to be in good spirits. For newbies, these previous articles will bring you up to speed.

http://www.theburningplatform.com/?p=32788

http://www.theburningplatform.com/?p=18085

I have nothing personal against these people. They are fairly quiet. They did move my deck chairs into my garage before Sandy hit. They are there all year and keep an eye on the place. I do have a big problem with the asshole owner of the unit -Fat Pete. I’ve given him the name Fat Pete because he is a 350 pound scumbag that isn’t capable of climbing the steps to his unit.

Pete bought 3 of the 7 units in our condo pre-construction in 2002. He flipped two (one of them to me) at a nice profit and kept one for friends and family to use. He fancied himself a real estate mogul because his daddy owned one of the biggest blueberry farms in NJ and provided plenty of opportunity for Fat Pete. One problem. Petey found himself with 8 properties in Wildwood when the housing market collapsed. He mistook a bubble for intelligence and real estate savvy. After a couple years without being able to sell any of his properties he somehow managed to get the condo next door to me approved for Section 8 housing. It boggles my mind that a condo in a resort town, located 50 yards from the beach, can qualify for Section 8 housing.

Not only did Fat Pete single-handidly bring down the value of every condo in the complex with his brilliant strategic move, but he then rented it to white trash drug dealers who harassed our tenants all summer. After a number of us threatened him with bodily harm, he gave these tenants the boot and replaced them with the family unit that currently occupy the unit. We have a perfectly able mid fifties man who is not legally employed. He drives a nice pickup truck and appears to do some landscaping work for cash payments under the table. We have his rotund loud mouthed wife who tips the scales at about 275, and drives a newer model SUV with a handicap sticker. We have an ancient artifact grandmother with a walker, who likes to chat with us, but we can’t understand one word she says. There is also a slow-witted teenager who hardly ever leaves the condo. Then there are various “relatives” or acquaintances that come and go.

And now for the best part. Fat Pete, even though he’s been getting a monthly check from the Federal government for the last three years, hasn’t made his condo fee payment for the last four years. He is $7,000 in arrears. The other six owners had to pony up $3,000 apiece to cover the difference in the insurance payment for our deck repairs and the amount owed to the contractor. Fat Pete is taking $2,500 out of our pockets by not paying his fair share. I’ve tried to embarass his fatass with a sarcastic email copied to all the owners. He makes excuses for why he hasn’t paid. I don’t care. If this asshole ever shows up at the condo, I’ll stick my foot up his enormous ass.

As I said previously, I don’t personally have anything against my Section 8 neighbors. What I do have are questions. Questions that aren’t allowed to be asked in polite politically correct company. So I’ll ask them here:

  1. How can the Federal government subsidize Section 8 housing in resort communities?
  2. How much do the Obamanistas pay to Fat Pete and how much do the tenants pay?
  3. How many people in the condo are receiving SSDI payments?
  4. Is the 1st of the month their favorite day?
  5. When did being extremely fat qualify someone for handicap parking and SSDI?
  6. Did everyone in the condo vote for Obama in 2012?
  7. Would anyone in the condo ever seek a real wage paying job if it meant their welfare checks would stop?
  8. How does a family that can’t afford to rent an apartment, with no one working, afford two vehicles, cable TV, internet service, and cell phones?
  9. Do these people feel any shame and will they ever attempt to get off the dole?
  10. Does the able bodied man pay taxes on the cash payments he receives for doing landscaping?
  11. How long can this country subsidize such behavior on such a large scale?
  12. What will happen when the millions of entitlement recipients have their cashflow cut off when the system collapses?

In the meantime, Section 8 continues to do great.

 

Reflections on the Future of Mankind – Part II

Where we’ll end up – the long view

 

by

 

Muck About

 

Part II

 

Major Wars (Civil, I and II) were fought over land, resources and loot. The crusades? Obviously religious in the history books but they were truly fought in retaliation for hundreds of years of brutal and deadly Muslim expansion from the middle East and Northern Africa into Spain and Europe. There were huge treasure hunting and resource overtones and outcomes as well.    Hey, the winner of a war gets to rape, plunder and pillage a little, right?

When land or vital resources (oil, water, minerals or land that is arable and capable of growing crops or running livestock) runs short for any given population, without action, economic activity declines, hunger and deprivation sets in and standards of living drop unto death and the eventual destruction of that civilization.

Migration and flight/fight inevitably begins as will happen eventually between Bangladesh and India – India is already building a fence to keep the Bangladeshi out (and so is Burma) and I don’t even want to talk about India and Pakistan or India and China  (although the Himalayas do provide a impressive bit of a fence!)  and most deadly of all, if the populations have not been starved completely to apathy, war will follow when countries try to annex resources, arable land, water, et al of those areas and populations nearby. War also happens when migrants clash with those neighboring peoples who are inundated by fleeing populations. This is especially true of populations trapped so far below their abilities to improve their standard of living or even survive given the slightest interruption in the food chain (by nature or politics). After all, when there is nothing left to lose and life is not worth living, why not fight?  If I wasn’t so “mature”, I’m sure I would..

Think of what Haiti would look like and be like with no relief supplies, no security, no boats or planes bringing food and water and evacuating the injured, building shelter (however slowly) and rendering medical assistance.  Civilization is miles wide but has the thickness of three days with no food and one day with no water.   In other words, civilization is not very durable if anything goes wrong at the infrastructure level.

India, China, Pakistan, Indonesia, several chunks of Central and South America and most of Africa are excellent examples of countries likely to implode if the intricate globalization of supply chains fail. As I write this, India and Pakistan have “made nice” over Kashmir all the while polishing and expanding an atomic warfare capability.

Iran may be close behind with both rocket and nuclear capability according to the war mongers among our elite powers that be (who I personally don’t trust to tell the truth if their life depended upon it!) . I can think of nothing that brings fear to my poor old black heart more than an Islamic Bomb – and it’s already there in Pakistan!

An Islamic bomb that falls into the hands of a suicide ridden Imam is one that cannot be stopped.  When an aggressor (or assassin) is willing to die in the delivery of his/her weapon, they are beyond defeat except by exceptional luck.

Control of land is the basis of the dispute in Kashmir, stirred up with the old Muslim/Hindu hatred of several thousands of years.. The next war, if it happens, will likely be nuclear in nature. Boom! Radiation and particle fallout is no respecter of national borders and the wind blows and blows in that part of the world. Let us hope that rational men can prevail But don’t bet your life on it since “rational” is not an important topic in that part of the world while “national” is of the highest priority.

Only a relative few, compared with overall population levels, within the huge numbers of people of those countries mentioned above are smart enough or rich enough to climb out of the pit. The smart Pakistani and  Hindu are the ones we see in our own diminished and ever poorer United States as physicians, scientists, mathematicians and other highly educated professionals. They have already “beat feet” to a better place. We would be much smarter to make it easier to vacuum this “cream of the crop” up for our use – but our Government is moving in the opposite direction, limiting immigration and restricting green card issuance even to highly trained scientists and engineers who try to come here (which may change in the appropriate direction shortly – I hope!).

In my humble opinion, this is so short sighted as to be classified as idiocy and incompetence.  This is a country of immigrants and constantly changing.  To deny good minds the opportunity to make us richer is – simply – nuts.  But then who ever said the Federal Government is sane..

China, at the moment, is making a valiant attempt to drag itself away from the abyss of a centrally planned economy and begins to now compete for natural resources with the rest of the developed world. They are doomed by demographics to failure as within a generation there will millions of men with no women to marry thanks to misguided “one child” policies.  Their population is aging even faster than ours which is another anchor around their national neck.

China is trying mightily to encourage wealth generation while retaining central control and ignoring human rights, environmental issues and freedoms.  I wish them lots of luck at any distance beyond the short term.

At the same time, every year, China must create 150,000,000 new jobs from a population of 2 billion and climbing. How long do you think that will last? Not very long I assure you. Don’t forget – for every Chinese who manages to raise his standard of living to the level now enjoyed by the United States, more and more pressure is put upon us economically through “globalization” and our standard of living is rapidly dropping!!.  This is now happening as we all know as higher paying manufacturing jobs have vanished overseas to lower wage countries and prices rise as competition heats up for available natural resources such as oil, copper, zinc, and steel and rare earth minerals. China has adopted Africa as its’ own playground and is investing heavily in many areas thereof to capture needed resources and doing a fine job of it too.  We fought a war in Iraq (remind me why, please!) and China is now sucking up Iraqi oil and didn’t lose a man in the process.

We, in this country are left with two wage earners sometimes working two or more jobs and prior to 2008 were borrowing more and more to maintain what is perceived to be an acceptable (i.e.”wanted”) standard of living. It is no surprise that our national savings rate was negative until recently. Now 1.0% or so —  but according to the BS numbers by the St. Louis Fed it’s 3.7%.  Wow!  Past years saw savings rates averaging 6-9%. Now we are in the midst of a financial debt/credit crunch of worldwide proportions that will insure that, thanks to misguided political efforts to “do something” and “kick the can”, we will be all be poorer by and by.

While we sometimes see media driven cheerleading of scientific and industrial production in these developing countries, the truth is that the vast majority of the population of these countries cannot and will not improve their standard of living significantly over their lifetimes or the lifetime of their children or children’s children. Resource depletion and shortages will see to it.  In most of Africa, people are doomed to live very short, nasty lives because they have never managed to progress economically or educationally (Islam has a part of the blame to shoulder here) to even start the process of climbing out of the pit they are in.  I somehow doubt that China (or anyone else) will furnish them a ladder to do it.  The Chinese are far too interested in digging holes in the ground to dredge minerals and drilling oil than making contributions to the general populations.  I’m sure the “rulers” of those dictatorships will do well, retiring to other and less savage places with suitable Swiss bank accounts.

As an aside, my Oncologist (I have CLL/Lymphoma that’s I’ve been doing battle with for 17 years – so far, I’m still here!) is a native of Haiti, an extremely smart man to whom I trust my life. He is President of a Charitable Foundation and flies to Haiti every other week.  Far away from Port au Prince, up in the poorest of poor mountain villages, his Foundation is building homes for Haitians that were displaced by the earthquake, quietly, no fanfare and no publicity.  He’s saving his own people one family at a time.  If you want to contribute, contact <http://www.haitihelpmed.org/> and you will find a true charity that’s worth your time.

Within these countries, there are simply insufficient resources and wealth to allow any but a select, very smart or very evil few to rise above the herd. The evil ones are the ones in charge who siphon off the relief efforts for their own and their crony buddies’ benefit and profits.

Eventually, as the size of the population continues to increase , the poorer masses will be heard from and that voice will be death and destruction. The fairly recent tribal violence in Rwanda (forgotten that already?  Shame on you!) that killed eight hundred thousand people is a good example – and gee whiz – in our country the Main Stream Media didn’t broadcast news about it and it was totally ignored. The exact same thing  happened in Sudan recently on a slightly smaller scale and while words and broken promises litter the bloody landscape, nothing is (or probably could) be done to stop it.  More misery and no solutions.

As an accepted fact, the poorer, less educated and more religious a country’s population is, the more offspring they will produce. The cultural and genetic drive to produce many children so that some of them may survive to hopefully take care of elderly Mom and Dad is both

irresistible and deemed necessary in these countries and cultures.

Population expansion , regardless of how fast it explodes will never overrun the Earth. Again, sooner than later, population density will contribute to our demise, either through resource exhaustion, pestilence  or war.

In the more densely populated areas of the world, pestilence is a likely result of packing too many humans in with too many of earth’s other creatures that are required to feed us. Look at China, India and Indonesia today. The National Institutes of Health openly estimates that a disease will cross over the animal/human barrier within the next few years (one already has – except it’s not sufficiently virulent to cause alarm yet) that will adapt to a human/human basis of transferal. Because this disease (such as the avian or “swine” flue) is new to the human race, no defenses are there to combat it and a vast world-wide pandemic will follow that has the potential of killing billions of humans. It is not a question of “If” this will happen, it is a question of “When”.

We were lucky with the last “swine flu”.  Will we be equally lucky the next time?  I’ll borrow a Grant Williams, “Hmmmmmm”.

One does not have to actively be involved in war to die from it, especially in our not so brave new world of nuclear and genetically engineered possibilities, biological and chemical agents none of which are contained at nor recognize national borders. The availability of such devices is only going to proliferate with time.

The new kids on the technological “better watch me” block are a totally different animals in that they can either destroy us or save us, depending upon how they’re used.

The two potential technologies with the most promise of either doomsday speculation or great advances for the human species is that of genetic modification and nanotechnology . Genetic modification has been going on in slow motion for centuries in many agricultural laboratories, gardens and kennels and is a chief reason why we are able to feed those multitudinous mouths of an ever expanding horde of people. But until relatively recently it has been used on veggies, plants, animals and trees and other slow growing and slow spreading things that offer an excellent chance of control. It has been done v-e-r-y  s-l-o-w-l-y.

Now however, we are applying genetic modification to corn, soy, dogs, cows, sheep, pigs, one monkey (according to rumor), frogs, viruses, bacteria and probably humans (Shhhh!) and now it’s being done really, really fast.  DNA and nanotechnology are two genies that are out of the bottle and racing each other to practical application.

Genetics is not a new science. Agriculture has been in the business of genetic modification for centuries and the major thing changing for them now is the speed at which these modifications can be made and tested – or not.

In days past, agronomists and animal breeders would breed and breed and cross pollinate (including sperm) and breed some more in order to select the traits in a plant, or tree or animal they desired to have. Dog owners have been modifying genes in dogs forever in order to create new subspecies of canines with critical (to the breeder) traits.   They have been successful in that dogs are the first species on Earth to totally subjugate their existence to another breed of animal – us.  They can no longer survive in the wild but must have us to nurture, feed, care for and play with them to live.

So what’s the big deal about modifying DNA or playing around with the human and plant and animal genetic makeup directly instead of just cross pollination or breeding experiments?

Well, for one thing, instead of just modifying a single species by breeding or selecting for desirable traits within that species, we now can do something better.

We can insert a gene from a luminescent insect (think lightning bug) into a frog. We get a glowing frog. How convenient! No more big lights required for frog gigging at night. (This is a true example of a genetic modification that has already been done some time ago).

The serious thing here is that we are no longer limited to single specie genetic sources for modification of a selected species. We can take a gene from a bug, virus, animal or plant and insert it into some other plant, virus, bacteria, animal or bug that is not related to the original genetic sample at all. We can now cross-modify from specie to specie and genus to genus and that is a whole new ball game.

This makes for some pretty broad experiments in modification of living things. Picture a human with owl genes – big sexy eyes and he can walk around in the dark without a flashlight. And think how the ladies will be wowed by the length of his eyelashes! How about a human with gills and a modified skin that makes him truly amphibious. Not an impossibility in the future and a great idea to populate the 6/10th of our world now under water.  Of course, I wonder what the modified human will think when he finds out about us land dwelling varieties!

There are two voices that can be presently heard on this very broad and complex subject. One voice is very loud and strident and full of end of the world as we know it screeching.

This voice includes the noisy output of all religious groups across the board and political persuasions that pander to those religious groups. It boils down to the fact that all religions are terribly threatened by the idea of us being able to grow a human being from the guts of a cell and an empty egg. Or that we may be able to modify a human being in some wild and wooly manner by inserting or removing genes of human DNA or some other species’ DNA to get something that “god” didn’t design. (Oh please forgive me for even mentioning “design”!)

You know the arguments – it’s immoral, against the word of god (used in the same sentence to try and make it sound better), tampering with nature, unnatural behavior that will lead to all manner of terrible things like designing humans to custom specifications.

Well, what’s wrong with that?

If we create a human being without “gods” help then how does the religious community make peace with something that is obviously not the work of their gods. Of course religions would either collapse or have to do big rewrites of “the gospel truth” should we discover evidence of life elsewhere in the Universe, but genetic science is here and now and SETI research is there and who knows when, so religion worries about what’s more immediate. (I love Steven Hawking’s reply when once asked “Is there a God?”. He replied, “I don’t answer God questions.”)

The second voice crying for caution has a much better point to make. It is scientific in nature and more truthful of its motives.

What happens if a genetic mistake is made that produces something that is extremely deadly or simply overwhelmingly successful and through an “oops!” or the purposeful release into the environment, we may have a big problem? Since it’s absolutely new and with no or only a partial real world genetic connection (and maybe no natural enemies), will it lay waste to us all?

That is a distinct possibility and examples of such experiments have already happened several times, though none of the results have escaped into the environment.  It has been dubbed “The Grey Goo” result of a too successful genetic or nanotech creation.

Experimenters at research laboratory at a University in Canberra, Australia, were working with a non-human disease called mousepox in hopes of discovering a way to control a hugely excessive and annoying mouse population in Queensland by preventing mice from reproducing. Mousepox, in itself, is a more or less innocuous virus that only affects mice and is not deadly even to them in its native form – kinda like human flu. You catch it, live with it and pretty soon it goes away unless you’re very young or old or have a crippled immune system.

These experimenters modified one single gene in the DNA of the mousepox and then grew some of the resultant mutated virus. To their astonishment ( and horror I expect), when introduced to the lab mice, it killed every mouse in the lab, quickly and thoroughly and mice given vaccine against the pox died just as rapidly.

I do not know the rest of the story as it vanished from scientific magazines and the MSM and I haven’t bothered to be a detective, but I would be very surprised if the lab was not decontaminated and stocks of the modified mousepox summarily destroyed (I hope).

For further information feel free go to Google and search “mousepox mistake”.

Think about smallpox being modified in the same manner. It affects humans and is an absolutely horrible killer. A university research laboratory in the mid-West has modified a gene within the smallpox virus to produce a protein that (get this now!) assists the virus in overcoming the human immune system! They insist (rightly so, I think, even though it makes me sick!) that in order to fight the virus they need to know what makes it tick. But now that they recognize this genetic bomb they’ve made, they say it is a possibility they “may be able” to modify the protein to enhance the human immune system to fight smallpox instead. Jeebus, I hope so. Smallpox is bad enough in its generic form.

Researchers at the University of Kyoto in Japan were recently working on a variety of HIV virus to investigate whether genetic modification by insertion of a human protein producing gene would slow down the virus by stimulating the human immune system. Instead, the mutated HIV virus they created was a super HIV virus that was much more virulent that any of the five strains of “common” HIV. It reproduced at lightning fast rates and was, in essence, a super killer. I hope they burned that one up too.

And all this is lurking out there right now. Today. And there will be much more on tomorrow’s menu!

Again, world renowned theoretical physicist Steven Hawking once said that unless the human race escapes the Earth’ gravity well and establishes itself on other planets or satellites within the solar system, that we would likely be extinct within 200 years from introduction, either by accident or design, of a genetically designed disease or a bioweapon run amok or simply an accident that escaped into the environment.

Steven Hawking is no dummy and when he fears something, I’m terrified of it (and so should you be!).  I think his “200 years” is much too conservative and a shorter 50-75 years should be used instead.

Yet there is no way to ever stuff a genie back into the bottle. Whatever tools humans discover, design and fabricate, they use. Whatever weapons humans design and are capable of building, they will use it; be it nuclear, biological, genetic, chemical or anything else..

As an aside, I am all for genetic redesign of humans myself.    How about humans that are genetically designed to thrive in zero G? They would be the ones to lead the way to the stars. When or if we reach the stars, who is to say that planets circling those suns will be compatible with our native and fragile human physiology? The odds are heavily against it. If we are able to genetically modify human beings, we can then populate those otherwise unlivable planets by literally making humans to match the environment of the world we wish to settle.

Would these genetically modified “people” still be human? Of course they are. They are based on human DNA and because they are designed for the world on which they live they are – surprise – exactly like we are. We evolved within our environment so that we are, if not perfect for the world on which we live, are at least well accommodated by it. All we would be doing is the same thing for extraterrestrials, only faster. What’s wrong with that? (But would they appreciate being modified when they grow up and find US here? Ah! That’s the question!)

I also have no objection to genetically designed trigger drugs or stem cell therapies that will cause the body to repair specific breakdowns within itself or stem cell generated spare parts that can be developed from cells of my own body to replace a failing heart, a bad kidney or a liver or an ear. Anything to allow me to live longer than my scheduled three score and ten would be welcomed! (Which I’ve already exceeded by a good number of years!)

I have no objection to custom DNA modified and genetically tweaked embryos to allow parents to pick a brown/blue/green/violet eyed, blond/red/black/brown/straight/curly haired, boy/girl baby that will have an IQ of 200+. Or one genetically enhanced so the child will never require a vaccination or fall prey to any currently known disease.

Would there be abuses of genetic modification of human embryos? Of course there will. So what?

If society determines that these rogue modifications are a bad thing, then catch those who are doing the bad thing and take their genes away from them – permanently – preferably by gentle lobotomy. But don’t trash an entirely new and most valuable science to keep out a few bad guys.

Why should anyone object rationally to such developments? All that would happen, if such genetic modifications were done would be the passing of some superstitions which, in my opinion, is not a bad thing.

The current political/religious/ethical debate (ethical being an interchangeable word for religion in some conversations but being pushed as some undefinable but separate discussion) is nearly 100% against genetic modification of any sort in order to save current religious beliefs and organizations from collapse.

But that mischievous genie is out of the bottle and countries ruled by little minds and populated by less than rational people that prohibit the continued research into cloning, stem cells and genetic science are destined to fail in that attempt.

Bad laws drive out good people and the experimentation and perfection of such techniques will merely go over the border, leaving the prohibiting country at an eventual huge disadvantage and unable to benefit from the great and wonderful things (and, I’m sure, suffer some bad ones as well) that will come from such research. Which is where the United States would be right now except that the science of stem cells has figured out a way to make an end run around the use of embryonic cells.  Now skin cells can be modified into stem cell fairly well and others advances will follow rapidly if quietly.  Eventually, if all works well, the sources of stem cells will become irrelevant.

Yet those countries who prohibit the science are at exactly the same risk from the mistakes, errors and potentially evil uses as are countries who sanction the research.

Cool, huh. Prohibit genetic research and loose an enormous range of benefits while risking the same disasters as if you hadn’t banned it! It sounds like something politicians are good at.

My thinking on the subject is that it would be far better for us (we are the good guys, even if we are fading a bit) to know all we can about genetic modification, DNA manipulation, stem cells and the whole nine yards, thereby being far better prepared to deal with the potential buggers that lurk therein and thereabout.

Genetic research is just like anything else the human race has come up with.

Prostitution for example. Far better to acknowledge its existence and its necessity in the scheme of things human and allow it to do business openly with as little hindrance as possible. Regulate it only as much as is required to protect the participating public and do that only based on scientifically peer reviewed evaluations of actual (not perceived) dangers. I know – fat political chance of that ever happening.

As yet another short aside, I once managed a NASA Site on top of a mountain near Ely, Nevada. Nevada enjoys the legal, supervised and regulated operation of brothels. In my three years of living in Ely, which had three houses of prostitution at the time, there was only one case of a sexual nature brought before the people’s court. It happened that a cab driver picked up a lovely young lady as a fare and during the ride, exposed himself to her in an obscene manner. The young lady, outraged by such crass behavior, turned in the cabbie who was subsequently arrested and fined appropriately. The young lady was employed by the Green Lantern as a prostitute and obviously preferred to leave her work behind when she was off shift (so to speak).

I was raising two teenaged daughters when we lived in Ely – which is tough mining town with a lot of transients. I never worried about them a minute when they were out and about as far as anyone accosting them or doing them harm. It just didn’t happen there (or anywhere else prostitution is legal and practiced openly and policed).

Tells you something about “morality” doesn’t it??

End Part II

Click here to read Part I

Reflections on the Future of Mankind – Part I

 

Where we’ll end up – the very long view.

by

Muck About

Part I

 

I am of the opinion – born of what I feel is a long, productive existence and a life that has been one extended study-hall of immense satisfaction – that unless the developed countries of this world and those people who live therein rapidly modify their actions and priorities, we humans are doomed to be yet another Earth dweller that will sooner than later vanish in a like manner of the Neanderthals, dinosaurs, dodos and the multiple thousands of other species that have dominated or lived upon and disappeared from the face of this Earth.  I also feel this modification of the current “Growth, Growth, Growth Forever” attitude and actions will and can never happen and the fate of the human race is not in doubt; we will be extinct (or hugely reduced in numbers) far sooner than anyone today believes or even considers.  We have already exceeded the sustainable rate of extraction and usage of resources of our small blue planet – including water, mineral and agricultural and further expansion of such resources will be at a very high price of not just money, but environmental cost as well – much higher than local populations can afford.

Not a cheerful way to start an thought exercise article, is it?

We will very likely be extinct or existing at significantly reduced numbers in a much shorter time frame than the dinosaurs (after all, they lasted millions of years) because of our own extraordinary technical skills, questionable intelligence  and the equally extraordinary stupidity of our beliefs, behavior and inability to really accept the limits of growth, cooperative problem solving across nations, the human beings central drive of “I’ and ”me” and the simple fact that there are too many rats in the box. That is, too many bodies worldwide to support, having exceeded resources and to get along with each other.

Dinosaurs topped the food chain on earth for many millions of years before they just happened to be riding this big blue and brown rock that was in the way of a not-so-big asteroid that put them all out of business along with about 90% of all other life on Earth and in its seas. Small mammals escaped this holocaust in some areas through fortuitous location and pure luck which allowed further evolution to eventually lead to us.

I feel it will not be long, by any measure of time, much less cosmically speaking, before the last poisoned and diseased band of nomadic humans fall, one at a time; until the last man, woman or child dies.

Mother Earth will get along without us just fine and in a few hundred thousand years, an alien visitor might not be able to find more than a few concrete (no pun here) remnants of the race that once ruled the world..

That lonely, painful and pitiful ending of the human race will occur on this Earth relatively soon and it is very likely,  no matter what we do. How sad it is.

As long as mankind relies more on maximized economic growth, superstition, wishful thinking and short term selfish personal gain than fact and science and an awareness of species survival, we, as humans are simply dead and don’t know it yet. Unfortunately, capitalism as an economic system is far too successful at generating wealth and growth and scientific progress than it is at focusing on the long term survival requirements of future generations and the human race in general.  Capitalism is the philosophy of profit right now, growth, capture of natural resources and never thinks for a moment of tomorrow – much less the long view of species survival.

I think that John Maynard Keynes statement, “In the long term we are all dead.”, should be interpreted in a much stricter manner than he intended. No doubt, shorter term too.

There are several areas where general modification of human behavior is required sooner than later merely to slow down the extinction  of the human race. Not to keep us alive here on Earth, you understand, but to slow down the process of killing ourselves while we can take action to prevent racial extinction.

First on the list of things to try and deal with is that infamous bugaboo “global warming”.

The subject of global warming is guaranteed to either bring yawns from those who have heard the arguments before and are bored to tears by the mention of it or screams from those who are passionate in their desire to have us all ride horses (which produce methane – another greenhouse gas) or walk everywhere we go and burn supper over a renewable energy source. It seems that the subject is too big for consensus by those knowledgeable enough to study and understand the data,  much less achieve any understanding by the great masses of people in the world who are not at all scientifically literate nor think with any critical ability and rely on “allah”, “god”, “government” or their so called “elected” (which is a joke all in itself) representatives to do their thinking for them and to determine their fate.

Scientists have proven without doubt that global climate change is a reality. The fact that anthropogenic heating of our atmosphere and oceans is not in question. Why it is happening is being debated (to death) and is, in fact, of no consequence whatsoever..

From temperature records recovered from Arctic and Antarctic ice cores, tree rings, ocean bottom cores, permafrost, ice sheet boreholes in Greenland the Antarctic along with other sources, science has proved beyond any doubt whatsoever that the current warming trend we are experiencing is not unique in our Earth’s history. Earth has heated up and cooled off relatively rapidly many times before, the last ice age terminating a mere 11,000 years ago – less than a blink of the eye as far as geological time is concerned. Barely time, in fact, for the ice to melt from between the toes of the last Neanderthal (which happened to be another failed experiment on the branching tree of evolution) and permit modern man to waltz onto the scene.  In fact, there are some facts that more than suggest that modern homo sapiens had a little hanky-panky going for them with Neanderthals on the way by!  We share DNA with Neanderthals and that can happen only one way!  We were likely smarter than our predecessors and just bred them out of existence. We’ll never know for sure but science is making great strides to try and find out.

Science has also proven that the major reason why our atmosphere and oceans are heating up this time is because humanity is burning fossil fuels at a furious rate while eliminating carbon sinks (such as rain forest) at the same time.

In fact, a close look at the temperature records hint that we may have been starting to slide into another mini-ice age way back in 17th century or so and the industrial revolution in the 19th century stopped the trend cold (pun intended) and reversed it.

Existing and efficient carbon sinks such as the oceans are becoming warmer, they are expanding as they warm and they are becoming more acidic from CO2 absorption much faster than predicted.  This, in turn, kills corals world wide, modifies mating capabilities of fish and is killing even the krill in Antarctica which ends up destroying the basis of our own food chain. Such destruction is causing an unholy mess in the Arctic as the ice melts, polar bears starve and all the Nations with Arctic Ocean frontage are fighting over who gets to drill and plow up the now open Arctic Ocean floor firstest and mostest!

Those fossil fuels lurking hither and thither under the Arctic seabeds, Canadian tar sands and elsewhere have accumulated in the Earth’s crust over millions of years. It took hundreds of millions of years for natural evolution, climate change, decay and huge pressures to form and store the hydrocarbon deposits and the deposits of chill, semi-stable methane hydrates now laying about on the Arctic seafloor. We are burning the oily portions of these hydrocarbons up billions of times faster that it took to create and store them in the first place. And another thing:  It doesn’t make a damn bit of difference whether we burn coal, oil in either its’ “natural form” or refined as gasoline or “natural” gas.  They all end up emitting CO2 and assorted pollutants such as soot when burned.  Period.  Further and even more serious, when the oceans warm sufficiently, those frozen methane hydrates will begin to evaporate, bubbling methane up and into the atmosphere.  A Summer occurence in the Canadian North every year! Methane is a much worse greenhouse gas than CO2 and will, in turn, accelerate greenhouse effects.

Fossil fuels are literally giant storehouses of carbon which is a component of hydrocarbon fuels that results in carbon dioxides, soot and monoxides when it’s burned. These hydrocarbons are locked into safe forms such as carbonates in rock and soil and sea bottom, oil and natural gas, methane in solid deposits on the floor of the oceans (the previously mentioned methane hydrates) in the Arctic and elsewhere and they were all placed there by natural processes that happens to lock up the carbon far from Earth’ atmosphere in such a way that it can’t cause trouble. Too much carbon dioxide or methane in the atmosphere (along with other more esoteric gasses both naturally occurring and of human creation) and we get the overused and abused “greenhouse effect”. More solar energy is absorbed by the atmosphere, ground and sea than can be radiated back into space, or otherwise dissipated.

It is also a demonstrable fact that in the past, rising temperatures of the Earth’s atmosphere and oceans are very capable of suddenly tipping Earth’ climate into a cooling phase that will eventually end up as an ice age. This transition into a cold phase can happen in as small a span of time as a decade.  When and how fast are unanswered questions, we only know of rapid oscillations in the geological past.

The observable fact that Earths’ atmosphere and ecology is a dynamic one versus something static, makes it very probable, barring the poisoning of those organisms that transform carbon dioxide into oxygen that we will never attain or even closely approach the status now existing on Venus. Venus is an example of a static environment and the “greenhouse” effect taken to extremes but it is very likely that Venus also never had the ecological opportunities of a closed oxygen/carbon cycle or even possibly plate tectonics and vulcanism in the first place. This last statement is still subject to some scientific argument but the arguments “for” are too weak to convince me.  The planet is too close to the Sun and too hot to start with.  A trip to the planet will be required to determine if plate tectonics ever had a chance to modify the surface features of the planet or not.

Mars likely had such a carbon/water (and even oxygen) cycle millions of years ago. We know there are vast quantities of water ice merely inches below the surface of Mars and it once flowed as liquid on the surface. Recent instrumentation mining on Mars has proven that drinkable water was, at one time, plentiful on the surface of Mars and I suspect that sooner or later, hard evidence of extraterrestrial life will be discovered.  Our robot explorers have found pretty absolute proof that liquid water once flowed on the surface in large quantities and that in numerous locations, contitions were favorable for life formation.

Methane has been detected in Mars’ atmosphere – and methane must be renewed in some fashion or it oxidizes and  vanishes over time. Most likely Mars’ water ice came from comet impacts and other infall from space over time as it did on Earth and was possibly, though not proven, maintained by an oxygen/water/carbon cycle such as we have today. Over time, due to lesser gravity, weaker magnetic field (more on this later) and less solar heating, the cycle was gradually broken and the atmosphere leaked away into space, leaving frozen water behind as a clue to what used to be.  Whether life had time to evolve on Mars has yet to be answered — but I’d bet yes.

However, on Earth, should those organisms that convert carbon dioxide to oxygen fail in their job, the ever greater buildup of carbon dioxide would indeed eventually turn the Earth into a static, blistering no-life world as more and more solar heat is captured, unable to radiate back into space and sooner (astronomically) than later, alter the very basics of the physics of our planet’s ecosystem.  We will be long gone before that happens.

How do I know personally that global warming and ocean expansion is alive and well? I went to Kwajalein Atoll in the Marshall Islands back in 1973, and worked for five years at the Biggest Bullseye in the world which was the terminus of the Pacific Missile Range that was located there. Twice a month (lesser) and twice a year (major) depending on the sun and the moon’s relative positions with regards to earth, there would be extraordinary low tides – just perfect to walk the reefs between islands searching for shells and to observe the wondrous sea life that inhabits the reef. Twice a year, during these extra low tides, the sea would actually recede to the extent that the reef surface was bare – no water at all – and the salt water would flow beneath the surface of the reef so one could stand quietly and listen to the reef “talk”, bubble, moan and gurgle as water made its way into and out of secret and normally flooded passages.

It was a magic place to live in more ways than one.

I returned to Kwajalein a second time in 1995, some 16 years later. No more does the reef “talk”. No more is the surface of the reef laid bare during these twice-monthly or twice yearly low tides. Now, at the lowest tides of the year, 12 inches or more sea water flow across its surface, drowning the magic singing of the reef. The Pacific ocean is rising as are all the oceans of the world. In the mid-1990s, on Kwajalein and other Marshall Island atolls, barriers had to be built along the windward side of these low islands. Storms waves that normally broke against the protective barrier reefs now sometimes flow clear across these low islands from the ocean into lagoons, uprooting trees and making permanent habitation impossible.

In another 30 years or so, these low islands will likely be gone forever, completely submerged or at the least uninhabitable because of storm surges that put the islands completely awash.

On average, the seas have risen 7-10 inches since accurate sea level measurements have been available (since radar bearing satellites refined the data).  That’s a lot of water, all of it from melting ice in Greenland, the Arctic, the Antarctic and glaciers.  Floating seas ice doesn’t count as it displaces as much water as is contained in the ice itself so sea ice melt is a null factor.

Further, last week (2/9/2013) a report was issued by climate  scientists and oceanographers that there will be further two foot rise in general sea levels within the next 30 years.  The particular study was a risk analysis of sewage treatment plants in Souther Florida and showed that within 30 years, most of Southern Florida and the three major sewage treatment plants will be isolated on little islands as the water rises.

Seas are rising roughly three times as rapidly as initial scientific estimates.  Get that?  THREE TIMES AS FAST!!

Of course, it won’t take 30-40 years for sea level rise to make itself apparent as storm surges and tidal action will disable these sewage plants, ports and much of populated Southern Florida.  there will be large tracks of land from the Gulf Coast through New England that will also be made uninhabitable (including NYC), as this general rise in ocean level progresses with as much impact, over time, as ice sheets durning an ice age.

Katerina, Hurricane Sandy, Staten Island and Long Island are excellent examples of storm surges couples with rising sea waters and how storm surges will eat us alive as time passes whether we “believe” in global warming or not!

This is all not to say that periodic changes in the Sun’s intensity, Earth’s orbital variations and a natural warming period of our Earth is not a contributor to the problem but we’re doing the most damage faster than natural changes in nature can do it.

If you take the trouble to study the a graphic of CO2 and methane concentration in the atmosphere over time, the ever rising levels of greenhouse gas is directly coupled to the Industrial Revolution starting in the mid-19th Century, with exponentially rising populations and the burning of fossil fuels. The effect is too obvious to be disputed.  We may be experiencing a normal solar cycle of earth heating and cooling but many scientists, myself included, feel that without human input to atmospheric heating, we’d already be 150 years into the next ice age.

These rising oceans will slowly make themselves felt along all continental coastlines world wide with Katerina, the destruction of New Orleans and the recent destruction along the New Jersey and New York shores from Sandy as dramatic examples.  Believe me when I say that New Orleans was only the first mega-distruction of an urban center.   New York and New Jersey followed and more will happen based on the luck of steering winds and Hurricanes and storms.  Next will come Miami (as explained above) or Corpus Christi, Jacksonville or Charleston, Houston or other coastal cities along the Gulf and Eastern Seaboard all depending on the capriciousness of rising sea levels and nature.

It will not be wind and tornados that do the damage but storm surges riding atop the tides that will provide the mother of all destruction of ocean front properties and the death of millions who cannot or don’t flee these storm surges in time.

Whole countries most likely to die first are the low, marvelously beautiful islands of Bahamas, Pacific and Indian Oceans that reside on both sides of the equator. They are mostly poor, sparsely populated and easy to overlook and ignore. Some of these island nations are now in negotiation to move their entire population to a mainland country.  Do you truly think this would happen if seas were not rising?

The biggest country at risk is impoverished Bangladesh. This hapless country, carved from India first as Eastern Pakistan and then as an independent nation is geographically situated on the delta of the Ganges River. Almost the entire country is only a few feet above mean high ocean tide. The Bay of Bengal into which the Ganges flows, is the home of the nastiest tropical cyclones you’d ever not want to see.

This country is doomed and so are the people in it that do not migrate.

When I was a boy, raised in Mississippi and Northern Florida, there was a poem about hurricanes we knew by heart:

June- too soon

July – stand by

August – it must

September – remember

October – all, over

 

Not so 65 years later. Now hurricane “season” starts the first day of June and ends the last day of November. Soon hurricane season will start in May and end in December. This poem, as originally composed, is no longer applicable.

So is global warming a doomsday threat? I doubt it. We will never do anything  to slow it down. We will experience flooded coastal cities and huge loss of life and economic disaster long before we’ve admitted and contained the ramifications of what we have done and Mother Nature has done in response.  What we desperately need to do on a global basis is to stop arguing over “whether global warming is real”, regardless of what caused it and start figuring out what we are going to do as a race to deal with what’s coming. We must not continue to argue and fuss over whether or not it is coming because it is.

So instead of arguing about whether “global warming” and all its ramifications is a fact, we simply need to start working on how we are going to deal with it.  Period.

The next thing on the list of doomsday subjects we need to recognize is population expansion.

The problem of too many people has been beaten to death in debates and is generally now ignored. It is a calculable fact that if one conservatively projects current world population growth for another 150 years, all things being equal in logistical support, food and such, the people at that time would be literally shoulder to shoulder covering all the exposed land masses on Earth. Way too many rats in a box.

Of course, this won’t happen. Paul Ehrlick and others predicted catastrophe years ago from population growth due to the lack of our ability to feed all those hungry mouths. That hypothesis that gathered rust in the junk heap of failed extrapolated predictive theories and a bad timing call is not being resurrected as better communication and surveys show that poverty and hunger are not expanding in lesser developed areas of the world. For some interesting exceptions : see Collapse: How Societies Choose to Fail or Succeed by Jared Diamond.

I personally think Mr. Ehrlick was simply too early in his predictions as was Mr. Malthus.  (Timing is a bitch!)

We are not exempt from resource exhaustion, hunger and poverty as our population continues to increase – first and not the  least in the so-called developing world.  Most of the developed world, The United States, Japan, Europe, Russia and China have entered demographic Hell and are losing productive population much faster than natural birth rates are renewing them.  The developing nations of the world – at the top of the heap –  are doomed to be populated by smaller, younger, stupider and less educated populations and much larger non-productive aging populations as time goes by – and it will happen faster than anyone realizes.   Unfortunately, the undeveloped (3rd World) countries and even as few mid-developing countries have populations that are expanding far faster than their abilities to house, feed and support them.

Technology, yet again to the rescue, is continually providing the means of higher agricultural production with lower costs with genetically modified bread and beans and there is no reason to believe this increase in agricultural productivity will slow down in the foreseeable future. (Barring tragic mistakes – but we’ll address that later).  It will also place these countries at the mercy of Monsanto and other hybrid seed producers, forcing farmers in the those country to use genetically modified seed every years instead of harvesting their own seed crops for the following years.  This will not end well.

Today, there would not be a hungry child or adult on the planet if the infrastructure was in place to enable delivery of food staples to the general populations of those hungry countries. In those countries where starvation is a real problem, the political barriers of civil wars, ruthless warlords, tribal leaders, religious genocide and greedy, immoral politicians are a much bigger barrier to distribution than lack of roads, bridges and other infrastructure.

Because of our (so far and failing) ability to feed more and more people, starvation has turned into a political problem, not one of food production.  At least for the next decade or two.  One severe world wide crop failure due to changes in climate and rainfall (not only likely but probable) can overturn things in a single growing season. So far, we are growing agricultural products in a distributed fashion to sufficiently buffer such changes but that is likely not to last as planetary climate change modifies atmospheric jet streams, storm patterns and wet/dry seasons all over the Earth.  Not to mention political use of food as a weapon as time goes on to wage war against those populations deemed a “bother” or perhaps considered to be hindering the continued expansion of developed nationality of advanced countries.

The higher productivity of agriculture is the reason why population density and growth has fallen off the table as a popular subject to debate (temporarily), even though it is still a vitally important subject of discussion and study. Additionally, religion that espouses moral opposition to birth control in any fashion (including abortion) is spreading throughout religiosity in both developed and developing areas of the world even as the USA swings to evangelical prominence.   Muslim populations are exploding.  At the same time, women’s rights are swinging to the fore and will probably win in developing countries, given the endurance and really tough female humans’ determination for self-direction.  In Muslim directed Islamic countries, no so much and we war may come in the long run pressured by population growth within less educated, highly religious and much poorer developing countries.  It appears that developed and more educated countries will simply commit suicide by birth rates so low as to limit their ability to hold their own against both legal and illegal immigration.  At that point, the original settlor’s of such developed countries will simply be overwhelmed by new comers, poorer, more ignorant but in over whelming numbers.

“Por español, oprimo numero uno.”

Worse luck, that, and our great-grandchildren will live to regret it as one result will be the lack of new workers to finance their old age.  And they will recognize the fact, slowly but surely.

On the other hand, one plus to the equation of population control lies in the developed countries better treatment of women including education.  The more educated a woman is, the fewer children she will likely have, which contributes to both the good and the bad of it all.  That is one reason that, in my humble opinion,  Fundamentalist Islam in any number of its’ incarnations is quite evil and immoral for they forbid females any control over their own bodies and forbid any education at all for females if they can manage it.  That is also why they will eventually fail ideologically as they are wasting one half of their population’s brainpower, creativity and soothing effects of feminine thinking and abilities by suppressing female education.  Islam is, sadly, at its’ base, a religion of death and world conquest, driven by selfish and ignorant men, bent on forcing the world to think and act as they do.  Islam has been fighting this war for several thousands of years and there is no end in sight. The EU is the latest to experience Islamic immigration and will rue the day they began pandering to this fundamentalist surge.  I await the outcome of that situation with non-baited breath..

What is far more likely the result of continued developing (as opposed to developed) national population expansion is war. Wars are fought over possession and control of land and resources, one of which is fixed and the other being used up and declining. There are, of course, other excuses for fighting a war, such as wars based upon tribal or religious differences or the simple urge to rape and pillage, but throughout the history of human conflict, the need for control of land and the resources thereon is the basis for war.

Need I illustrate? The Iraq “wars” were over oil and ego and failed thinking. We now have no presense in Iraq and it is now slowly slipping back into savagery as Shiite/Sunni warfare is increasing there daily and soon the Shiite majority in Iraq may join with the Shiite majority in Iran to form a new basis for Islamic expansion (i.e. Iraq/Iran = New Persia) with a large die off in Sunni Muslims in the process.  Not conducive to production of wealth or knowledge (or oil) in any way or form for either country. (besides, China is buying all the Iraqi oil they can lay their hands on – at our expense. Is that stupid or what!!).

WWII was over oil and mineral resources – Germany wanted them and had no way to pay for them after the ridiculous repatriation and “pay back” conditions placed upon it post-WWI.

WWI? Again, over resources that were unevenly divided in the then politically defined Europe. Vietnam and Korea? Artificial wars created by political stupidity in splitting up spoils of WWII. Vietnam and Korea were similar to the Middle East conflicts as after WWII the Middle East was carved up (mostly by the British, Stalin and FDR) into “countries” and no heed was paid to tribal differences, logical borders or past history.

In the Mid-East, this had to lead to the pain and agony that we are witnessing today as Islam fights to bring these tribal differences to heel under a crushing 1600th Century set of rules in a 21st Century World.

End Part 1

 

 

To be continued.

 

 

QUOTE OF THE DAY

There’s a reason that education sucks, and it’s the same reason it will never ever ever be fixed. It’s never going to get any better, don’t look for it. Be happy with what you’ve got. Because the owners of this country don’t want that. I’m talking about the real owners now, the big, wealthy, business interests that control all things and make the big decisions.

Forget the politicians, they’re irrelevant.

Politicians are put there to give you that idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations, and they’ve long since bought and paid for the Senate, the Congress, the State Houses, and the City Halls. They’ve got the judges in their back pockets. And they own all the big media companies so they control just about all the news and information you get to hear.

They’ve got you by the balls.

They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest. You know something, they don’t want people that are smart enough to sit around their kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago.

They don’t want that, you know what they want?

They want obedient workers, obedient workers. People who are just smart enough to run the machines and do the paperwork and just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it.

And now they’re coming for your social security money.

They want your fucking retirement money; they want it back so they can give it to their criminal friends on Wall Street. And you know something? They’ll get it. They’ll get it all from you sooner or later because they own this fucking place. It’s a big club and you ain’t in it! You and I are not in the Big Club. By the way, it’s the same big club they use to beat you in the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to believe, what to think and what to buy.

The table is tilted folks, the game is rigged.

Nobody seems to notice, nobody seems to care. Good honest hard working people, white collar, blue collar, it doesn’t matter what color shirt you have on. Good honest hard working people continue, these are people of modest means, continue to elect these rich cocksuckers who don’t give a fuck about them. They don’t give a fuck about you. They don’t give a fuck about…give a fuck about you! They don’t care about you at all, at all, at all.

And nobody seems to notice, nobody seems to care.

That’s what the owners count on, the fact that Americans are and will probably remain willfully ignorant of the big red, white, and blue dick that’s being jammed up their assholes everyday. Because the owners of this country know the truth, it’s called the American Dream, because you have to be asleep to believe it.

George Carlin

 

AVAILABLE

“Facts do not cease to exist because they are ignored.” – Aldous Huxley

 

 

Six months ago I wrote an article called Are You Seeing What I’m Seeing?, describing my observations while traveling along Ridge Pike in Montgomery County, PA and motoring to my local Lowes store on a Saturday. My observations were in conflict with the storyline portrayed by the mainstream media pundits, Ivy League PhD economists, Washington politicians, and Wall Street shills. It is clear now that I must have been wrong. No more proof is needed than the fact the Dow has gone up 1,500 points, or 11%, since I wrote the article. Everyone knows the stock market reflects the true health of the nation – multi-millionaire Jim Cramer and his millionaire CNBC talking head cohorts tell me so. Ignore the fact that the bottom 80% only own 5% of the financial assets in this country and are not benefitted by the stock market in any way.

The mainstream corporate media that is dominated by six mega-corporations (Time Warner, Disney, Murdoch’s News Corporation, Comcast, Viacom, and Bertelsmann), has one purpose as described by the master of propaganda – Edward Bernays:

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. …In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.

These media corporations’ task is to use propaganda and misinformation to protect the interests of the status quo. The ruling class has the power to manipulate public opinion, obscure the truth, alter government data, and outright lie, but they can’t control the facts and reality smacking the average person in the face every day. Based on the performance of the stock market and the storyline of economic recovery being peddled by the corporate media, the facts must surely support their contention. Here are a few facts about what has really happened in the last six months since I wrote my article:

  • The working age population has grown by 1.1 million, the number of employed Americans is up 500k, while the number of people who have left the labor force has gone up by 600k. The BLS reports the unemployment rate has fallen without blinking an eye or turning red with embarrassment.
  • The number of Americans entering the Food Stamp Program in the last six months totaled 1 million, bringing the total to 47.8 million, or 20% of all households (up 15 million since the Obama economic recovery began in December 2009).
  • Existing home sales have increased by a scintillating 2.9% on a seasonally adjusted annual basis and average prices have fallen by 6% in the last six months. It is surely a great sign that 32% of all home sales are to Wall Street investors and 25% are either foreclosure sales or short sales. A large percentage of the remaining sales are funded by 3% down FHA government backed loans.
  • There were 31,000 new homes sales in January versus 34,000 new home sales six months prior. Through the magic of seasonal adjustment, this translates into a 15% increase.
  • Single family housing starts were 41,600 in February versus 51,400 six months prior. Even using seasonal adjustments, the government drones can only report a pathetic 4.7% annualized increase and flat starts over the last three months, with mortgage rates at all-time lows.
  • The National Debt has gone up by $750 billion in the last six months, while Real GDP has gone up by less than $150 billion.
  • Real hourly earnings have not increased in the last six months.
  • Consumer debt has risen by $65 billion as the Federal Government has doled out student loans like candy and auto loans (through the 80% government owned Ally Financial – aka GMAC, aka Ditech, aka ResCap) like crack dealer in West Philly.
  • The Federal Reserve has increased their balance sheet by $385 billion in the last six months by buying toxic mortgages from Wall Street banks and the majority of Treasuries issued by the government to fund the $1 trillion annual deficits being produced by the Obama administration. It now totals $3.2 trillion, up from $900 billion in September 2008, and headed to $4 trillion before this year is out.
  • Retail sales have increased by less than 2% over the last six months and are barely 1% above last February. On an inflation adjusted basis, retail sales are falling. Other than internet sales and government financed auto sales, every other retail category is negative year over year. This is reflected in the poor sales and earnings reports from JC Penney, Sears, Best Buy, Wal-Mart, Target, Lowes, Kohl’s, Darden, McDonalds, and Yum Brands. I’m sure next quarter will be gangbusters, with the Obama payroll tax increase, Obamacare premium increases, 15% surge in gasoline prices, and continued inflation in food and energy.

Considering that 71% of GDP is dependent upon consumer spending (versus 62% in 1979 before the financialization of America), the dreadful results of retailers and restaurants even before the Obama tax increases confirms the country has been in recession since the second half of 2012. In 1979 the economy was still driven by domestic investment that accounted for 19% of GDP. Today, it wallows at all-time lows of 13%. In addition, our trade deficits, driven by debt fueled consumption, subtract 3.5% from GDP. These facts are reflected in the depressed outlook of small business owners who are the backbone of growth, hiring and entrepreneurship in this country. Small businesses of 500 employees or less employ half of all the private industry workers in the country and account for 65% of all new jobs created. There are approximately 27 million small businesses versus 18,000 large businesses. The chart below does not paint an improving picture. The small business optimism has dropped from an already low 92.8 in September 2012 to 90.8 in March 2013.

Small business optimism report for March 2013

The head of the NFIB couldn’t make the situation any clearer:

“While the Fortune 500 is enjoying record high earnings, Main Street earnings remain depressed. Far more firms report sales down quarter over quarter than up. Washington is manufacturing one crisis after another—the debt ceiling, the fiscal cliff and the Sequester. Spreading fear and instability are certainly not a strategy to encourage investment and entrepreneurship. Three-quarters of small-business owners think that business conditions will be the same or worse in six months. Until owners’ forecast for the economy improves substantially, there will be little boost to hiring and spending from the small business half of the economy.” — NFIB chief economist Bill Dunkelberg

If consumers, who account for 71% of the economy, aren’t spending, and small business owners, who do 65% of all the hiring in the country, are petrified with insecurity, why is the stock market hitting all-time highs and the corporate media proclaiming happy days are here again? It can be explained by the distribution of wealth and income in this country. Every media pundit, politician, Wall Street shill, Ivy League PhD economist, and corporate titan you see on CNBC, Fox or any corporate media outlet is a 1%er or better. The chart below shows the bottom 99% saw their real incomes decline between 2009 and 2011, while the top 1% reaped the stock market gains and corporate bonuses for using “creative” accounting to generate record corporate profits. The trend in 2012 through today has only widened this gap, as real worker wages have continued to decline and the stock market has advanced another 20%.

The feudal financial industry lords are feasting on caviar and champagne in their mountaintop manors while the serfs and peasants scrounge in the gutters for scraps and morsels. This path has been chosen by the king (Obama) and enabled by his court jester (Bernanke). Money printing and inflation are their weapons of choice. We are living in a 21st Century version of the Dark Ages.

On the Road Again

I’ve been baffled by a visible disconnect between deteriorating data and the storyline being sold to the ignorant masses by the financial elitists that run the show. The websites and truthful analysts that I respect and trust (Zero Hedge, Mish, Jesse, Karl Denninger, John Hussman, David Stockman, Financial Sense and a few others) provide analytical evidence on a daily basis that confirm my view that our economic situation is worsening. We are all looking at the same data, but the pliable faux journalists that toil for their corporate masters spin the data in a manner designed to mislead and manipulate in order to mold public opinion, as Edward Bernays taught the invisible ruling class. As you can see, numbers and statistical data can be spun, adjusted, and manipulated to tell whatever story you want to depict. I prefer to confirm or deny my assessment with my observations out in the real world. I spend 12 hours per week cruising the highways and byways of Montgomery County and Philadelphia as I commute to and from work and shuttle my kids to guitar lessons, friends’ houses, and local malls. I can’t help but have my antenna attuned to what I’m seeing with my own eyes.

As I detailed in my previous article, Montgomery County is relatively affluent area with the dangerous urban enclaves of Norristown and Pottstown as the only blighted low income, high crime areas in the 500 square mile county of 800,000 people. The median household income and median home prices are 50% above the national averages. Major industries include healthcare, pharmaceuticals, insurance and information technology. It is one of only 30 counties in the country with a AAA rating from Standard & Poors (as if that means anything). On paper, my county appears to be thriving and healthy, with white collar professionals living an idyllic suburban existence. One small problem – the visual evidence as you travel along Welsh Road towards Montgomeryville or Germantown Pike towards Plymouth Meeting reveals a decaying infrastructure, dying retail meccas, and miles of empty office complexes.

I don’t think my general observations as I drive around Montgomery County are colored by any predisposition towards negativity. I see a gray winter like pallor has settled upon the land. I see termite pocked wooden fences with broken and missing slats. I see sagging porches. I see leaky roofs with missing tiles. I see vacant dilapidated hovels. I see mold tainted deteriorating siding on occupied houses. I see weed infested overgrown yards. I see collapsing barns and crumbling farm silos. I see houses and office buildings that haven’t been painted in 20 years. I see clock towers in strip malls with the wrong time. I see shuttered gas stations. I see retail stores with lights out in their signs. I see trees which fell during Hurricane Sandy five months ago still sitting in yards untouched. I see potholes not being filled. I see disintegrating highway overpasses and bridges. I constantly see emergency repairs on burst water mains. I see malfunctioning stoplights. I see fading traffic signage. I see regional malls with rust stained walls beneath their massive unlit Macys, JC Penney and Sears logos. I see hundreds of Space Available, For Lease, For Rent, Vacancy, For Sale and Store Closing signs dotting the suburban landscape. These sights are in a relatively affluent suburban county. When I reach West Philly, it looks more like Dresden in 1945.

                      Dresden – 1945                                                     Philadelphia – 2013

 

I moved to my community in 1995 when the economy was plodding along at a 2.5% growth rate. The housing market was still depressed from the early 90s recession. The retail strip centers and larger malls in my area were 100% occupied. Office parks were bustling with activity. Office vacancy rates were the lowest in twenty years during the late 1990s. National GDP has grown by 112% (only 50% after adjusting for inflation) since 1995, with personal consumption rising 122%. Domestic investment has only grown by 80%, but imports skyrocketed by 204%. If the economy has more than doubled in the last 18 years, how could retail strip centers in my affluent community have 40% to 70% vacancy rates and office parks sit vacant for years? The answer is that Real GDP has not even advanced by 50%. Using a true rate of inflation, not the bastardized, manipulated, tortured BLS version, shows the country has essentially been in contraction since the year 2000.

The official government sanctioned data does not match what I see on the ground, but the Shadowstats version of the data explains it perfectly.

My observations also don’t match up with the data reported by the likes of Reis, Trepp, Moody’s and the Federal Reserve. Reis reports a national vacancy rate of 17.1% for offices, barely below its peak of 17.6% in late 2010. Vacancy rates are 35% above 2007 levels and more than double the rates in the late 1990s. But what I realized after digging into the methodology of these reported figures is the true rates are significantly higher. First you must understand that Reis and Trepp are real estate companies who are in business to make money from commercial real estate transactions. It is in their self -interest to report data in the most positive manner possible – they’ve learned the lessons of Bernays. These mouthpieces for their industry slice and dice the numbers according to major markets, minor markets, suburban versus major cities, and most importantly they only measure Class A office space.

I didn’t realize the distinctions between classes when it comes to office space. The Building Owners and Managers Association describes the classes:

Class A office buildings have the “most prestigious buildings competing for premier office users with rents above average for the area.” Class A facilities have “high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.” Class B office buildings as those that compete “for a wide range of users with rents in the average range for the area.” Class B buildings have “adequate systems” and finishes that “are fair to good for the area,” but that the buildings do not compete with Class A buildings for the same prices. Class C buildings are aimed towards “tenants requiring functional space at rents below the average for the area.”

So we have landlords self-reporting Class A vacancy rates in big markets to a real estate company that reports them without verification. Is it in a landlord’s best interest to under-report their vacancy rate? You bet it is. If potential tenants knew the true vacancy rates, they would be able to negotiate much lower rents. There is a beautiful Class A 77,000 square foot building near my house that was built in 2004. Nine years later there is still a huge Space Available sign in front of the building and it appears at least 50% vacant.

I pass another Class A property on Welsh Road called the Gwynedd Corporate Center that consists of three 40,000 square foot buildings in a 13 acre office park. It was built in 1998 and is completely dark. The vacancy rate is 100%. As I traveled down Germantown Pike last week I noted dozens of Class A office complexes with Space Available signs in front. I’m absolutely certain that vacancy rates in Class A offices in Montgomery County exceed 25%. When you expand your horizon to Class B and Class C office space, vacancy rates exceed 50%. The only booming business in my suburban paradise is Space Available sign manufacturing. We probably import those from China too. Despite the spin put on the data by the real estate industry, Moody’s reported data supports my estimates:

  • The values of suburban offices in non-major markets are 43% below 2007 levels.
  • Industrial property values in non-major markets are 28% below 2007 levels.
  • Retail property values in non-major markets are 35% below 2007 levels.

The data being reported by Reis regarding vacancies in strip malls and regional malls is also highly questionable, based on my real world observations. The reported vacancy rates of 8.6% for regional malls and 10.7% for strip malls, barely below their 2011 peaks, are laughable. Again, there is no benefit for a landlord to report their true vacancy rate. The truth will depress rents further. This data is gathered by surveying developers and landlords. We all know how reputable and above board real estate professionals are – aka David Lereah, Larry Yun. A large strip mall near my house has a 70% vacancy rate, with another, one mile away, with a 50% vacancy rate. Anyone with two eyes and functioning brain that has visited a mall or driven past a strip mall knows that vacancy rates are at least 15%, the highest in U.S. history. These statistics don’t even capture the small pizza joints, craft shops, antique outlets, candy stores, book stores, gas stations and myriad of other family run small businesses that have been forced to close up shop in the last five years.

The disconnect between reality, the data reported by the mouthpieces of the status quo, and financial markets is as wide as the Grand Canyon. Even the purveyors of false data can’t get their stories straight. Trepp has been reporting steadily declining commercial delinquency rates since July 2012, when they had reached 10.34%, the highest level since the early 1990s. The decline is being driven solely by apartment complexes and hotels. Industrial and retail delinquencies continue to rise and office delinquencies are flat over the last three months. Again, the definition of delinquent is in the eye of the beholder.

The quarterly delinquency rates on commercial loans reported by the Federal Reserve is less than half the rate being reported by Trepp, at 4.13%. Bennie and his band of Ivy League MBA economists have reported 10 consecutive quarters of declining commercial loan delinquency rates. This is in direct contrast to the data reported by Trepp that showed delinquencies rising during 2012.

Real estate loans

All

Booked in domestic    offices

Residential 1

Commercial 2

Farmland
2012:4

7.57

10.07

4.13

2.67
2011:4

8.48

10.34

6.11

3.26
2010:4

9.12

10.23

7.96

3.59
2009:4

9.59

10.54

8.73

3.42
2008:4

6.04

6.67

5.49

2.28
2007:4

2.91

3.08

2.75

1.51
2006:4

1.70

1.95

1.32

1.41

The data being reported doesn’t pass the smell test. Commercial vacancy rates are at or above the levels seen during the last Wall Street created real estate crisis in the early 1990’s. During 1991/1992 commercial loan delinquency rates ranged between 10% and 12%. Today, with the same or higher levels of vacancy, the Federal Reserve reports 4% delinquency rates. When the latest Wall Street created financial collapse struck in 2008 and commercial property values crashed while vacancy rates soared, there were dire predictions of huge loan losses between 2010 and 2012. Commercial real estate loans generally rollover every 5 to 7 years. The massive issuance of dodgy subprime commercial loans between 2005 and 2007 would come due between 2010 and 2012. But miraculously delinquency rates have supposedly plunged from 8.78% in mid-2010 to 4.13% today. The Federal Reserve decided in 2009 to look the other way when assessing whether a real estate loan would ever be repaid. A loan isn’t considered delinquent if the lender decides it isn’t delinquent. The can’t miss strategy of extend, pretend and pray was implemented across the country as mandated by the Federal Reserve. This pushed out the surge in loan maturities to 2014 – 2016.

In an economic system that rewarded good choices and punished those who took ridiculous undue risks and lost, real estate developers, mall owners, and office landlords would be going bankrupt in large numbers and loan losses for Wall Street Too Stupid to Succeed banks would be in the billions. Developers took out loans in the mid-2000’s which were due to be refinanced in 2012. The property is worth 35% less and the rental income with a 20% vacancy rate isn’t enough to cover the interest payments on the loan. The borrower would have no option but to come up with 35% more cash and accept a higher interest rate because the risk of default had risen, or default. Instead, the lenders have pretended the value of the property hasn’t declined and they’ve extended the term of the loan at a lower interest rate. This was done on the instructions of the Federal Reserve, their regulator. The plan is dependent on an improvement in the office and retail markets. It seems the best laid plans of corrupt sycophant central bankers are going to fail.

Eyes Wide Open

There are 1,300 regional malls in this country, with most anchored by a JC Penney, Sears, Barnes & Noble, or Best Buy. The combination of declining real household income, aging population, lackluster employment growth, rising energy, food and healthcare costs, mounting tax burdens, and escalating on-line purchasing will result in the creation of 200 or more ghost malls over the next five years. The closure of thousands of big box stores is baked in the cake. The American people have run out of money. They have no equity left in their houses to tap. The average worker has only $25,000 of retirement savings and they are taking loans against it to make the mortgage payment and put food on the table. They can’t afford to perform normal maintenance on their property and are one emergency away from bankruptcy. In a true cycle of doom, most of the jobs “created” since 2009 are low skill retail jobs with little or no benefits. As storefronts go dark and more “Available” signs are erected in front of these weed infested eyesores, more Americans will lose their jobs and be unable to do their 71% part in our economic Ponzi scheme.

The reason office buildings across the land sit vacant, with mold and mildew silently working its magic behind the walls and under the carpets, is because small businesses are closing up shop and only a crazy person would attempt to start a new business in this warped economic environment of debt dependent diminishing returns. The 27 million small businesses in the country are fighting a losing battle against overbearing government regulations, increasingly heavy tax burdens, operating cost inflation, Obamacare mandates, a low skill poorly educated workforce, and customers with diminishing resources and declining disposable income. Small business owners are not optimistic about the future because they don’t have a sugar daddy like Bernanke to provide them with free money and a promise to bail them out if their high risk investments go bad. With small businesses accounting for 65% of all new hiring in this country and looming healthcare taxes, mandates, regulations and penalties approaching like a freight train, there is absolutely zero probability that office buildings will be filling up with new employees in the next few years. With hundreds of billions in commercial real estate loans coming due over the next three years, over 60% of the loans in the office and retail category, vacancy rates at record levels, and property values still 30% to 40% below the original loan values, a rendezvous with reality awaits. How long can bankers pretend to be paid on loans by developers who pretend they are collecting rent from non-existent tenants who are selling goods to non-existent customers? The implosion in the commercial real estate market will also blow a gaping hole in the Federal Reserve balance sheet, which is leveraged 55 to 1.

federal reserve balance sheet

I regularly drive along Schoolhouse Road in Souderton. It is a winding country road with dozens of small manufacturing, warehousing, IT, aerospace, auto repair, bus transportation, retail and landscaping businesses operating and trying to scratch out a small profit. Most of these businesses have been operating for decades. I would estimate that most have annual revenue of less than $2 million and less than 100 employees. It is visibly evident they have not been thriving, as their facilities are looking increasingly worn down and in disrepair. Their access to credit has been reduced since the 2008 crisis, as only the Wall Street banks and mega-corporations with Washington lobbyists received Bennie Bucks and Obama stimulus pork. These small businesses have been operating on razor thin margins and unable to invest in their existing facilities or expand their businesses. The tax increases just foisted upon small business owners and their employees, along with Obamacare mandates which will drive healthcare costs dramatically higher, and waning demand due to lack of income, will surely push some of these businesses over the edge. There will be some harsh lessons learned on Schoolhouse Road over the next few years. I expect to see more of these signs along Schoolhouse Road and thousands of other roads in the next few years.

The mainstream media pawns, posing as journalists, have not only gotten the facts wrong regarding the current situation, but their myopia extends into the near future. The perpetual optimists that always see a pot of gold at the end of the rainbow are either willfully ignorant or a product of our government run public education system and can’t perform basic mathematical computations. As pointed out previously, consumer spending drives 71% of our economy. As would be expected, the highest level of annual spending occurs between the ages of 35 to 54 years old when people are in their peak earnings years. Young people are already burdened with $1 trillion of government peddled student loan debt and are defaulting at a 20% rate because there are no decent jobs available. Millions of Boomers are saddled with underwater mortgages, prodigious levels of credit card and auto loan debt, with retirement savings of $25,000 or less. Anyone expecting the young or old to ramp up spending over the next decade must be a CNBC pundit, University of Phoenix MBA graduate or Ivy League trained economist.

There will be 10,000 Boomers per day turning 65 years old for the next 18 years. Consumers in the 65-74 age segment spend 28% less on average than during their peak years. It is estimated that between 2010 and 2020 there will be approximately 14.5 million more consumers aged 65 or older. The number of Americans in their peak spending years will crash over the next decade. This surely bodes well for our suburban sprawl, mall based, cheap energy dependent, debt fueled society. Do you think this will lead to a revival in retail and office commercial real estate?

We’ve got $1 trillion annual deficits locked in for the next decade. We’ve got total credit market debt at 350% of GDP. We’ve got true unemployment exceeding 20%. We’ve had declining real wages for thirty years and no change in that trend. We’ve got an aging, savings poor, debt rich, obese, materialistic, iGadget distracted, proudly ignorant, delusional populace that prefer lies to truth and fantasy to reality. We’ve got 20% of households on food stamps. We’ve got food pantries, thrift stores and payday loan companies doing a booming business. We’ve got millions of people occupying underwater McMansions in picturesque suburban paradises that can’t make their mortgage payments or pay their utility bills, awaiting their imminent eviction notice from one of the Wall Street banks that created this societal catastrophe.

We’ve got a government further enslaving the middle class in student loan debt with the false hope of new jobs that aren’t being created. We’ve got a shadowy unaccountable organization, owned and controlled by the biggest banks in the world, that has run a Ponzi scheme called a fractional reserve lending system for 100 years, and inflated away 96% of the purchasing power of the U.S. dollar. We’ve got a self-proclaimed Ivy League academic expert on the Great Depression (created by the Federal Reserve) who has tripled the Federal Reserve balance sheet on his way to quadrupling it by year end, who has promised QE to eternity with the sole purpose of enriching his benefactors while impoverishing senior citizens and the middle class. He will ultimately be credited in history books as the creator of the Greater Depression that destroyed the worldwide financial system and resulted in death, destruction, chaos, starvation, mayhem and ultimately war on a grand scale. But in the meantime, he serves the purposes of the financial ruling class as a useful idiot and will continue to spew gibberish and propaganda to obscure their true agenda.

It is time to open your eyes and arise from your stupor. Observe what is happening around you. Look closely. Does the storyline match what you see in your ever day reality? It is them versus us. Whether you call them the invisible government, ruling class, financial overlords, oligarchs, the powers that be, ruling elite, or owners; there are powerful wealthy men who call the shots in this global criminal enterprise. Their names are Dimon, Corzine, Blankfein, Murdoch, Buffett, Soros, Bernanke, Obama, Romney, Bloomberg, Fink, among others. They are using every means at their disposal to retain their control and power over the worldwide economic system and gorge themselves like hyenas upon the carcasses of a crippled and dying middle class. They have nothing but contempt and scorn for the peasants. They’re your owners and consider you as their slaves. They don’t care about you. They think the commoners are unworthy to be in their presence. Time is growing short for these psychopathic criminals. No amount of propaganda can cover up the physical, economic, social, and psychological descent afflicting our world. There’s a bad moon rising and trouble is on the way. The time for hard choices is coming. The words of Edward Bernays represent the view of the ruling class, while the words of George Carlin represent the view of the working class.

“There’s a reason that education sucks, and it’s the same reason it will never ever be fixed. It’s never going to get any better, don’t look for it. Be happy with what you’ve got. Because the owners of this country don’t want that. I’m talking about the real owners now, the big, wealthy, business interests that control all things and make the big decisions. Forget the politicians, they’re irrelevant.

Politicians are put there to give you that idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations, and they’ve long since bought and paid for the Senate, the Congress, the State Houses, and the City Halls. They’ve got the judges in their back pockets. And they own all the big media companies so they control just about all the news and information you get to hear. They’ve got you by the balls.

They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest. You know something, they don’t want people that are smart enough to sit around their kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago.” – George Carlin

 

My Life as a Caregiver and How it Affected my Future

Inspirational story sent in by a reader named Cameron. These are the stories that teach you what is really important in life. Family, friends and community are an unbeatable combination. We should all remember that.

 

At a time when my wife and I should have been hanging Christmas ornaments and preparing to spend the holidays with our three month old daughter Lily, our lives were torn apart by terrible news.  My wife, Heather, had been feeling ill for a while after giving birth to Lily.  When we started to think her tiredness was more than just new mother symptoms, we booked an appointment with our doctor and received the heartbreaking news – Heather had mesothelioma, a rare and extremely deadly form of cancer.
We were not familiar with this disease and our doctor carefully explained as much basic information as he could.  Heather and I were completely stunned as we listened to him list the potential outcome of the disease and how imperative it was that we immediately get her to see a specialist.  It did not take long for us to make plans to travel to Boston to get her in to see a reputable doctor who had long-term experience in helping patients fight mesothelioma.
As we were leaving the doctor’s office after getting the diagnosis, I could tell how worried and anxious Heather was.  I was fighting my own fears and I realized I would have to become a caregiver for her.  Heather’s face revealed all of her anxieties, and I tried desperately to hide the worries that were bubbling up inside of me as I made the decision to do everything I could do to take care of her and help her to get better.
Facing the possibility of your wife dying due to cancer is not something anyone should have to go through, but it happens to numerous people every single day.  I can only say that it is important to let your determination take priority in helping your loved one to get better.
Becoming Heather’s chief caregiver expanded my already full list of things to do. Heather and I both had been working full-time while also taking care of Lily.  Due to her illness, Heather had to leave her job and focus on getting better.  I stopped working full-time and worked only part-time hours so I could pick up the slack in other areas.  I did my best to be there for Heather every moment possible, and I still tried to spend as much time with Lily as I could.  My responsibilities and my anxiety about what could happen overwhelmed me, and many days I felt like I simply couldn’t go on.  Luckily, I found out that we did not have to fight this battle alone.  Family, friends and even strangers came through with invaluable support when we needed it most.

 

Members of our community helped us financially, and they also provided immensely helpful care for Lily.  It would have been difficult beyond belief to try to survive the whole ordeal without the help that was so generously given to us.  If I had to give one piece of advice to others in the caregiver role today, it would be to accept every offer of help that comes your way.  The support you receive from others can be a huge weight off your shoulders, and will remind you that you are not alone in the fight.
After months of difficult treatments for mesothelioma, Heather was able to defy the odds and beat this terrible cancer.  While she was originally told she may have only 15 months to live, she has now been healthy and happy for over 6 years.  Now, we wish to help spread hope to others in their own cancer battles by sharing our story of success over cancer.