Taking the boys deep sea fishing on the Royal Flush at 1:00. We plan on catching dinner for tonight. I have to give credit to my son Jimmy. Two years ago I took them deep sea fishing for the first time and he threw up for 3 out of the 4 hours. Last year he tried again. He only threw up for 2 out of the 4 hours. I thought he would trow in the towel and no go this year. But, he wants to try again. I anticipate some extra chum for the fishes.
The quotes below are from the father of public relations maggots. Edward Bernays was hailed as a master of propaganda. He wrote a book called Propaganda in 1928. He was an FDR/Kennedy liberal that believed a chosen few could manipulate the masses to believe anything. The arrogance of this prick was beyond compehension. But guess what? He was right. The government, corporations and Madison Avenue slime have used his methods to manipulate and control the masses for decades, and it continues today.
His major coup, the one that really propelled him into fame in the late 1920s, was getting women to smoke. Women didn’t smoke in those days and he ran huge campaigns for Chesterfield. You know all the techniques—models and movie stars with cigarettes coming out of their mouths and that kind of thing. He got enormous praise for that. So he became a leading figure of the industry.
The master manipulator in his own words:
“It is sometimes possible to change the attitudes of millions but impossible to change the attitude of one man.”
“The best defense against propaganda: more propaganda.”
“Those who manipulate the 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 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 that control the public mind.”
“In theory, everybody buys the best and cheapest commodities offered to him on the market. In practice, if every one went around pricing, and chemically testing before purchasing, the dozens of soaps or fabrics or brands of bread which are for sale, economic life would become hopelessly jammed.”
“Propaganda is the executive arm of the invisible government.”
“A single factory, potentially capable of supplying a whole continent with its particular product, cannot afford to wait until the public asks for its product; it must maintain constant touch, through advertising and propaganda, with the vast public in order to assure itself the continuous demand which alone will make its costly plant profitable.”
“If we understand the mechanism and motives of the group mind, it is now possible to control and regiment the masses according to our will without them knowing it.”
Paul Farrell lives in San Luis Obispo. It is a beautiful place.
How does he manage to write such dire articles while living in paradise? This time it is about our population time bomb. He does a good job detailing the problem, but he doesn’t seem to have the guts to make a recommendation. How do you curtail population growth? China instituted a policy and it will end up destroying their economy. Should we sterilize dumb people? There really is no acceptable policy other than handing out condoms to the ignorant masses and hope they figure out what to do with them.
Therefore, his point has validity. The only way that the population growth will be curtailed is a good old world war. You kill off a few hundred million young men across the world and they don’t have babies. Sounds like a plan. This should occur near the end of this Fourth Turning. I reckon WW III should arrive around 2020.
Have a nice day, and use a condom.
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Sshh. Don’t tell anyone. But “while you are reading these words, four people will have died from starvation. Most of them children.” Seventeen words. Four deaths. That statistic is from a cover of Paul Ehrlich’s 1968 provocative “Population Bomb.”
By the time you finish this column, another five hundred will die. By starvation. Mostly kids. Dead.
Bomb? Tick-tick-ticking? Or economic bubble? Population growth is a basic assumption hard-wired in traditional economic theory. Unquestioned. Yes, population is our core economic problem. Not a military problem. But the bigger this economic bubble grows, the more we all sink into denial, the closer the point of no return where bubble becomes bomb, where war is the only alternative.
Yes, folks, ultimately population growth is an economic nuclear bomb, tick-tick-ticking a silent countdown to global disaster. In denial, we march a self-destructive path to WWIII.
Worldwide population doubled to 3.5 billion between the Great Depression and the Great Society. One generation, from the ‘30s to the ‘60s when “The Population Bomb” was published. Since the ‘60s, we’ve doubled again. This year global population shot past seven billion. Two billion living in poverty, surviving on less than two dollars a day. We do live in a globalized economy. And the math is simple: One death, two births.
Warning: This economic bomb will not stop tick-ticking any time soon. Why? Scientific American said population is “the most overlooked and essential strategy for achieving long-term balance with the environment.” No wonder Bill McKibben, author of “The End of Nature,” warns: “Act now, we’re told, if we want to save the planet from a climate catastrophe. Trouble is, it might be too late. The science is settled, and the damage has already begun.”
We’re on suicide watch and yet population control, the world’s No. 1 economic issue in “off the table.” Why? Last year Mother Jones made it abundantly clear why. In “The Last Taboo,” columnist Julia Whitty asked: “What unites the Vatican, lefties, conservatives and scientists in a conspiracy of silence? Population.” That hot-button issue ignites so many powerful reactions. Politicians won’t touch this third rail.
Our denial is a massive “conspiracy of silence.” Yes, we’re all in this global self-destructive conspiracy. Families love making babies. Economists obsess about their population-growth assumption.
Stockholders demand earnings growth. Wall Street is insatiable. Corporate CEOs shoot for quarterly targets to get ever bigger bonuses. The global Super Rich see population growth as opportunities to increase their wealth, widening the wealth gap. We’re all in this rat race together, in a “conspiracy of silence.”
Yes, you can forget “Peak Oil.” Forget global warming. Forget debt, deficits, defaults. Forget commodities, scarce resource depletion. Forget all other economic, political, military problems. Yes, forget all of them. None of them matter … if our leaders fail to deal with the world’s out-of-control population bomb. Nothing else matters. Nothing.
Still, the silence is defining. We’re trapped in this deafening “conspiracy of silence.” Neutered. Blind to this suicidal path, incapable and unwilling to face the greatest single economic challenge in history. Won’t wake up till it’s too late.
Why? Deep in our hearts we see no acceptable universal solution. So we wait … until this economic bomb stops tick-tick-ticking. Explodes in our faces. Till the wake-up call, a total economic collapse. Till then, the silence is deafening. We stay in denial. Waiting.
The United Nations predicts there will be nine billion or more humans on Earth by 2050. And while demographers want us to believe total population will level off, they’re just guessing. Depending on an unpredictable range of mathematical scenarios, maybe our planet could top 15 billion by 2100, all demanding a better lifestyle, all demanding more natural resources, more commodities, starting revolutions to achieve their economic goals.
Demonstrators shout slogans as they crowd Madrid’s Neptuno plaza near Spanish parliament in Madrid last week.Tens of thousands of Spaniards abandoned their customary Sunday quiet day with families and friends to march against the so-called “Euro Pact” and the handling of the economic crisis.
But the economic problem isn’t just the simple math of adding more bodies. “What really counts,” says Jared Diamond in “Collapse: How Societies Choose to Fail or Succeed,” “is not the number of people alone, but their impact on the environment,” the “per-capita impact.” First World citizens “consume 32 times more resources such as fossil fuels, and put out 32 times more waste, than do the inhabitants of the Third World.”
So the race to 2050 rages on: “Low impact people are becoming high-impact people” demanding “First World living standards.” But unfortunately, if all nations in the world consumed resources at the same rate as Americans, we’d need six Earths just to survive. Today.
Worse, the competition’s growing and we’re outnumbered. While America grows from 300 million to a 400 million by 2050, the rest of the world explodes into a nine billion bubble, with over 1.4 billion each in China and India. The bomb keeps tick-ticking.
What a “conspiracy of silence.” Seems everybody’s on the “economic growth” bandwagon. And with population growth comes chaos, anger, war. Remember 2011: Unemployed college kids in the Arab Spring. Higher pay for China’s workers. Wisconsin unions revolt. Warning, by 2100 the science-fiction solutions of “Avatar” and “Wall*E” will be reexamined seriously, perhaps even the unthinkable in the “Boomsday” novel.
WWIII is no fiction. We’re in the buildup now. During the Bush era, Fortune analyzed a classified Pentagon report predicting that “climate could change radically and fast. That would be the mother of all national security issues.” Population unrest would then create “massive droughts, turning farmland into dust bowls and forests to ashes.” Soon “there is little doubt that something drastic is happening … as the planet’s carrying capacity shrinks, an ancient pattern reemerges: the eruption of desperate all-out wars over food, water, and energy supplies” with “warfare defining human life.”
Forget “Peak Oil.” The real economic force behind “Peak Oil” is “Peak Population.” Fail to defuse the population bomb and experts on sites like LifeAftertheOilCrash.com make clear the inevitable consequences of our denial, silence and inaction: “Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult … it is the scientific conclusion of the best paid, most widely respected geologists, physicists, bankers and investors in the world.”
We are at the tipping point: Failing to defuse the population bomb guarantees global economic collapse.
Will our leaders rise to the occasion? History says no. Diamond put all this in perspective in “Collapse”: “One of the disturbing facts of history is that so many civilizations collapse. Few people, however, least of all our politicians, realize that a primary cause of the collapse of those societies has been the destruction of the natural resources on which they depend. Fewer still appreciate that many of those civilizations share a sharp curve of decline. Indeed, a society’s demise may begin only a decade or two after it reaches its peak population, wealth and power.” Tick, tick, tick ….
So what is this one common flaw that drives nations to collapse worldwide and over the centuries? Diamond says leaders “focused only on issues likely to blow up in the next 90 days,” lacking the will “to make bold, courageous, anticipatory decisions.” Their short-term thinking, unfortunately, sets the stage for a rapid “sharp curve of decline.”
And given the myopic mind-set consuming American politicians today, it’s easy to see how the daily trench warfare of the 2012 presidential campaign is connected to the Pentagon’s prediction of WWIII, of “desperate all-out wars” dead ahead.
Unfortunately, that is the end game of our “conspiracy of silence,” our unwillingness to confront the inevitable. Our inaction means war will be the ultimate economic solution: For America, for capitalism, for civilization, for Planet Earth. The bomb just keeps tick-tick-ticking. Nothing can, nothing will, stop this tick-ticking population bomb. Nothing, except a global nuclear economic bomb.
Sshh, quiet, you’ll wake the babies.
It’s cloudy in Wildwood today. I did my daily bike ride with my son. Then I walked to our favorite store with Avalon – Hooked on Books. I love used book stores. We always walk out of that store with 5 to 10 books.
That gave me an idea. As everyone knows, the average TBP member is ten times as smart and well read as the average American. As I walk around Wildwood, I’m constantly reminded of George Carlin’s observation:
TBP members are constantly recommending books to other TBP members. I would like to add a new section on the right side of the page of recommended books by TBP members. Let’s use this thread to create a list.
I’ll create the section once you post you favorites.
TBP Restaurant
Zero Hedge http://www.zerohedge.com/ with an outstanding piece on the ridiculousness of Obama’s blatant attempt to manipulate the oil markets so his diminishing re-election chances are bolstered. As usual, this moron has no idea how markets work, or the law of unintended consequences. He is doing wonders for making the Fourth Turning as chaotic and desperate as possible. OPEC is now being led by Iran, not Saudi Arabia. The release of 60 million barrels of oil from strategic reserves will be as effective on keeping oil prices low as QE2 was in reviving our economy and spurring the housing market.
The second article is from www.oilslick.com and details the reasons for the Strategic Oil Reserve. Two thirds of the reserve is sour crude, which many of the refineries in the US can not process. We are depleting our reserve of sweet crude and sending it to Europe. Brilliant “strategic” move by Obama. I really think Obama approaches life like it is a game and he is smarter than everyone else. He is a dangerous man. Four more years of this guy will insure the destruction of our country.
Submitted by Tyler Durden on 06/26/2011 11:13 -0400
Last week’s dramatic decision by the US administration to strongarm the IEA into releasing strategic petroleum reserves (of which the US would account for 30 million barrels, or half of the total), is nothing but yet another example of the hobbled and incredibly short-sighted thinking that permeates every corner of the Obama administration. Because as the WSJ reports, “the move by the U.S. and its allies to release strategic reserves of oil could provide a much-needed shot in the arm for the U.S. economy, but risks inflicting lasting damage on the already tense relationship between oil producers and consumers.” The move comes on the heels of the dramatic collapse in OPEC talks in Vienna two weeks ago when Saudi Arabia was effectively kicked out of the cartel, further confirmed by reports that the IEA consulted with Saudi (and China and India) in advance of its decision (more later). Additionally, “OPEC and the European Union are due to hold an energy summit in Vienna Monday that will be the first official meeting of producers and consumers since the IEA’s move, and will provide a platform for OPEC members to express their disquiet over the stocks’ release. However, OPEC’s biggest player, Saudi Arabia, won’t be present.” Make that former player, in an organization now headed by the previously #2 producer, Iran (which just happens is not all that pro-US). The biggest threat, however, is that in direct retaliation against the IEA’s cartel-like decision, which comes at the expense of the remaining OPEC countries, is that as Zero Hedge suspected, the next step will be a more than proportionate cut in crude production by OPEC: “Some analysts speculated that OPEC could respond to the IEA release by cutting output to offset the increased supply.” What happens next is complete Nash equilibrium collapse, with a high possibility of a 1973-type OPEC oil embargo announcement in the immediate future.
“Going ahead with an increase would cut into revenue, said Christof Ruehl, chief economist of BP PLC. But cutting production to offset the release, he said, “would be seen as hostile by IEA members” and “could lead to a war of attrition, at least as expensive,” in which OPEC cuts production and the IEA keeps releasing stocks to make up for the shortage.” The winner of all this, is of course, China, which will gladly benefit from ongoing blue light specials courtesy of the US Strtategic Petroleum Reserve to build up its own reserve holdings, as the rest of the world squabbles over a US-dominated status quo whose time has now officially passed. And just as the rare earth metal price spike in recent weeks demonstrates what happens when China is the marginal anything in any supply chain, one can be certain that the price of Crude will be far, far higher several years from now.
And speaking of Iran, its oil ministry SHANA wasted no time in firing the retaliating round against the IEA’s decision, accusing the US of acting unilaterally and purely for the benefit of Obama’s reelection campaign, warning that the drop in oil prices won’t persist:
Iranian governor for OPEC Mohammad Ali Khtatibi says International Energy Agency (IEA) decision to draw oil from its emergency reserves implies intervention in the ordinary function of the oil market.
Speaking to Shana, Mr. Khatibi said that the trend of falling oil prices would not be sustainable.
‘Following the failure to bring down the prices at 159th ministerial meeting of OPEC in June 8, the United States of America and Europe are using all the means to push oil prices lower, Iranian governor for OPEC said.
Khatibi noted that IEA’s initiative to release oil from strategic petroleum reserves would followed by artificial falling of oil prices but those countries believing in open markets showed they are not genuine in their believes.
According to Khatibi recent days’ developments in oil market is not the result of issues relating to supply and demand or market needs but political pressures by the United States drives the initiative.
‘The United States government plans to influence the results of the upcoming presidential elections of the country by putting pressure on oil prices’ top Iranian oil official said.
Khatibi pointed out that developed countries initiative to draw oil from strategic petroleum reserves is risky because they cannot continue the move in the long term.
He added: these reserves are being held for emergency situations so the consuming countries of the International Energy Agency will have no other choice except to replenish the reserves for further use.
Indeed, if Obama’s reelection campaign is such an emergency that it requires tapping the SPR, what will happen when there is a real emergency: such as a repeat of the 1973 OPEC embargo, which set the stage for Volcker’s last minute and very painful intervention to prevent the US economy from tailspinning into an inflationary supernova?
And just to make sure things get even more polarized, Dow Jones reports that the “International Energy Agency consulted Saudi Arabia, China and India before it authorized the release of some of its emergency reserves, the agency’s executive director said Sunday.”
“They understand, and they appreciate the action,” Nobuo Tanaka said on the sidelines of the second Global Think Tank Summit in Beijing.
The release of some of IEA’s strategic stockpiles is meant only to fill the gap in supply until higher crude volumes from Saudi Arabia reach the global market, he added.
Oddly enough, the leadership at the IEA is just as clueless as that of the US:
Separately, Tanaka said he asked China once again to join the IEA on Saturday. Although there hasn’t been any official response, Tanaka said he was encouraged by China’s recent statement publicly welcoming the IEA’s strategic stockpiles release.
Of course they welcome it you idiot, because they will be buying everything your member countries have to sell, and thanks to your stupidity, at a welcome discount. And why the hell would China want to join the IEA when it gets all the benefits of participation, without any of the obligations of being a member (i.e., adhering to your retarded politically-motivated agenda).
Good luck buying it back at the same price when OPEC fires its own warning shot and announces it is reducing crude output for all remaining OPEC countries (ex. Saudi) by 10-15%. And yes, Goldman will promptly move it Brent sell recommendation to a buy, within hours of said announcement.
Jim Brown
Back before the OPEC meeting the Obama administration held talks with Saudi Arabia on swapping oil in the SPR for new oil Saudi would produce. This revelation shocked many traders and suggests the administration is unaware of the strategic reasons behind the SPR.The Strategic Petroleum Reserve (SPR) holds 727 million barrels of oil that is “reserved” for times when oil is not available on the open market due to war, hurricane, embargo, etc. The oil in the SPR is not there to be used to manipulate prices. It is a “strategic” reserve. Most presidents have forgotten what strategic means and have instead treated it like a “Political Petroleum Reserve.”
The SPR was created by President Ford in 1975 as an answer to the 1973-1974 oil embargo when Arab nations cut off supplies of oil to the USA. Although commissioned in 1975 with construction beginning in 1976 and the first shipment into the reserve in July 1977 it was not until Christmas Day 2009 that the SPR was finally filled to capacity. It took 32 YEARS to fill the reserve. Oil was purchased outright and also procured as a Royalty-in-Kind (RIK) from U.S. producers in lieu of royalty payments to the Federal government.
In 2005 Congress decided the events in the Middle East were suggesting future problems for imported oil and they authorized an expansion of the SPR to one billion barrels. However, despite a comprehensive plan to locate and prepare additional storage facilities there has been no actual construction to fulfill the authorization. The current administration is “reviewing” the plans and the reason behind the SPR.
It has been tapped in the past when national disasters like Katrina knocked out the Louisiana Offshore Oil Platform (LOOP) where oil imported from overseas is offloaded into pipelines for transport to refineries. I view that as a valid use since the amount of oil released is trivial and will be replaced as soon as practical after the disaster. Actually the refineries receiving the oil from the SPR have to replace it with oil within so many weeks after the disaster is over. There have been two major drawdowns from the SPR. Desert Storm saw a distribution of 17.3 million barrels when prices when world supplies dropped after Kuwait was invaded and Iraq production was degraded. The second major drawdown was after Katrina when 25% of our domestic production was halted. The DOE authorized a sale of 30 million barrels but only 11 million were actually purchased by refiners.
The current SPR inventory is 292.5 million barrels of light sweet crude and 434 million of heavy sour crude.
We found out last week that the current administration held talks with Saudi Arabia on taking light sweet crude, the kind in short supply, and shipping it to Europe and replacing it with heavy sour crude from Saudi Arabia.
Europe is facing a very tight situation today with the loss of 1.5 mbpd of light crude production from Libya. Since light crude supplies in general are what controls oil prices the shortage of sufficient light oil has pushed Brent prices well over $100. There is no shortage of heavy sour crude but there are fewer refineries that can process that crude and that makes heavy sour crude a lot cheaper on the world markets.
In the U.S. we have a mix of refineries with some capable of processing the cheaper oil and some only the light oil.
If we were to take out 1.5 mbpd of light sweet crude from the SPR and send it to Europe to replace the Libyan crude when would that program end? The IEA does not expect Libyan crude to be back at full production until 2015. Obviously at the rate of 1.5 mbpd (45 mb per month) we could not supply the missing oil for more than a few months.
By replacing that highly desirable light oil with less than desirable heavy oil we would be reducing the value of our strategic reserves. If this program continued for several months our flexibility in handling future real emergencies would be degraded. It took 32 years to fill the reserve and that period covered times of plenty and times of scarcity, economic boom and economic bust.
With the budget under extreme pressure and spending cut comments in every newscast should we really be depleting our strategic reserves so Europe can have cheaper gasoline and Saudi Arabia can sell more low quality oil without going through the OPEC quota program? I think not.
The SPR is a STRATEGIC reserve that lawmakers saw fit to construct and fill at the cost of billions of dollars. Politically several presidents have talked about releasing oil to reduce fuel prices in the USA but so far they have all been dissuaded from weakening the strategic value of the reserve.
Lawmakers should prevent presidents from making these kinds of political moves. When we actually need this oil we need it to be there. If Iran obtains a nuclear weapon there are two targets at the top of their hit list. The first is Israel although they may not follow through with that attack because of the tremendous retaliation Israel could inflict on Iran. The second target is their archenemy Saudi Arabia. If they could knock out Saudi’s major oil terminal they could inflict severe financial damage on Saudi and eliminate Saudi’s financial influence in the region. The loss of Saudi’s 10.0 mbpd of production would immediately send oil prices well over $200 a barrel and Iran’s oil would be worth triple what it is today. Of course they would still have the problem of selling it because global sanctions would be severe.
Al Qaeda has targeted the Saudi oil fields and production facilities for years but have so far been unable to mount an effective attack. If al Qaeda eventually manages to act on their aspirations the same significant drop in the worlds oil supply would appear.
Today’s Arab Spring uprising all over the Middle East and Northern Africa is another warning that oil supplies from that region could dry up in a matter of days given the right sequence of events. This is all the more reason we should not dwindle away our strategic resources.
Lastly, China is eventually going to be a serious thorn in our oil supply. Chinese generals have said China will be at war with the U.S. by the end of the decade over natural resources. China could cause the U.S. great harm by interdicting oil supplies from the Middle East. If they believe we don’t have the backbone to stand up to them in an armed conflict then they could take action to acquire more supplies and it would be our loss.
As we continue approaching the peak in oil production we are going to see news events increasing in frequency that will make our strategic reserves more strategic. The U.S. military already believes there will be shortages in 2012 and that shortage could grow to 10 million barrels per day by 2015.
U.S. Joint Operating Environment, Page 29
If our own military believes there will be shortages by 2012 and severe shortages by 2015 why would we want to send critical supplies of light crude to Europe in exchange for sour crude from Saudi Arabia?
The administration claims they have a plan “teed up” to use the SPR in the case of market shifts. Let’s hope that plan fails to leave the tee and calmer and less political heads prevail.
Jim Brown
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I wrote this back in September 2009 before I had a website. I was reminded of it this morning as Weezer blared from my radio on the way to work.
For the last three decades millions of Americans have been living in Beverly Hills. How can this be? Only 35,000 people reside in Beverly Hills, California. Millions have acted like they live in Beverly Hills, where the median household income is $125,000. The median household income in the United States is $50,000. There are 116 million households in the United States. Only 12 million households have income of $125,000 or more. There are 60 million households making less than $50,000.
Why shouldn’t the 60 million households be entitled to live like the top 10%? This is America, where the American Dream of wealth and riches is achievable. Just one small problem. Millions chose to live like the privileged Beverly Hills elite without doing the difficult work to earn their way into the top 10%. They made these dreadful decisions of their own free will. No one forced millions of Americans to borrow and spend like drunken soldiers.
It appears that the psychology of the nation transformed in the early 1980’s. Was it the optimistic message of “Morning in America” preached to the country by Ronald Reagan? Was it the fact that the youngest Baby Boomers were turning 35, entering their prime spending years? Or, was it the long-term decline in interest rates from 18% to 1% over two decades? Whatever the rationale, millions are now drowning in deep pool of debt.
Where I come from isn’t all that great
My automobile is a piece of crap
My fashion sense is a little whack
And my friends are just as screwy as me
Living in Beverly Hills – Weezer
I spend 500 hours per year in my car commuting on the Schuykill Expressway to and from work. In my spare time, I’ve calculated that I will spend at least a year of my life in traffic before I retire. While commuting at 5 mph on the Schuykill, I can’t help but survey the cars I’m sharing the road with. There are thousands jamming the highways in the Philadelphia area. There are 230 million cars in the U.S. and approximately 200 million drivers. We are a car crazed nation, with the number of cars per person 40% higher than Europe, 500% higher than China and 6,200% more than India. In 1970, when I was seven years old, the number of cars per 1,000 people was 529. Today it is 765, a 45% increase in three decades. Suburban dwellers have a love affair with their cars.
The average price of a new car exceeds $30,000 today. That is a nice chunk of change. I have a mental block paying that much money for an asset, that losses 20% of its value in the 1st year of ownership. My price limit is $20,000. I finance my cars over 4 years and try to get 10 years out of them. The 6 years of no payments goes directly into savings. My frugality regarding cars probably harks back to my father buying used cars during my entire childhood. Cars were a means of transportation, not a symbol of success. It appears to me that expensive luxury cars are an attempt at filling a psychological or emotional void in people’s lives. We spend half our lives in cubicles or offices and the other half in our shielded houses with gates and fences to keep people at a distance. The only time we are seen by others is on the highways and byways. An expensive sports car tells the world you are a success. A luxury car is a futile attempt at increasing your perceived happiness. Your fashion sense may be a little whack, but your car isn’t a piece of crap.
This brings me to the conundrum that has confounded me as I drive to work each day. There appears to be many more BMW and Mercedes vehicles on the road than people with enough income to own one of these vehicles. How can this be? I was befuddled. After a little research it became quite clear. The graphs below tell the whole sordid story. Borrow today, live like a Beverly Hills hotshot, roll the loan or lease into the next loan or lease in 3 years, and don’t be troubled about the future. According to the Federal Reserve, consumer non-revolving debt grew from $300 billion in 1980 to $1.6 trillion today. About $1 trilion of this is auto loans. The average automobile loan today is for 63 months, with some going as high as 84 months, compared with an average of less than 48 months in the early 1990s. In 1997 banks financed an average 89% of a new vehicle’s price. The average loan amount was $17,000. In 2007 banks financed 101% of a new vehicle’s price, since consumers borrowed to cover the amount they were upside down on their trade-in. The average loan amount is now $29,000. A full 40% of all trade-ins involve upside-down car loans. The average American car “owner” is in debt up to their eyeballs and upside down on their loan, but at least they look like a million bucks in the eyes of their neighbors and co-workers. Looking marvelous is what passes for achievement today.
Of course, it takes two to tango. A car buyer with no money wouldn’t be able to drive that beautiful BMW X5 or that Mercedes ML350 unless someone loans them the money to do so. This is where the creative geniuses from Wall Street entered the picture. Auto loans were securitized into packages and sold off to investors. The banks and finance companies who initiated the loans did not care if the loans went bad. Their sole intent was to move cars off the lots, not lose sleep about silly details like credit scores, income, or ability to pay back the loan. It worked wonders for the car companies. Annual sales rolled along at a 16 million per year clip. Car executives and bankers made ungodly salaries and bonuses. Then reality set in. Many borrowers couldn’t really afford their loans. Delinquency rates have soared to all time highs in the 10% range and are headed higher. The securitization market froze and annual sales have plunged below 10 million units. Another Wall Street success story.
The ability of car companies to make payments extremely low through long-term loans and leases is the reason an average Joe making $50,000 per year can drive a BMW and resemble someone making $150,000 per year. Chrysler and Ford generated 20% of their car sales through leases, while GM led the pack at 40% of their sales. Many of these leases were for SUVs and other giant gas guzzlers. When gas prices soared in 2008, the residual value of these gas guzzlers plummeted as the resale market disappeared. Ford and Chrysler have written off billions. The king of the hill, GMAC accumulated $33 billion of lease assets and is slowly but surely writting off $14 million of these “assets”, while the taxpayer funds their future bad leases.
Leases have made it possible for millions of Americans to drive the hottest luxurious wheels their limited cash budgets would not permit them to buy. Auto makers loved leases because they could sell higher-priced vehicles, which generate a gusher of profits in the short-term. By piling on inducements of their own, such as rebates or 0% financing deals, auto makers were able to subsidize consumers’ lease payments further. As a result, Americans have been able to have access to vehicles their parents never envisioned driving. Leases allowed anyone to look like a rock-star, driving luxury sedans, sports cars and Hummers costing $40,000 to $60,000. The Wall Street Journal describes a common scenario:
For Richelle Babcock, a mother of two young boys in Ann Arbor, Mich., leasing has made it possible to get new cars every couple of years. A few years ago, she took advantage of a trade-in deal and other incentives Chrysler was offering and got a $180-a-month lease on a 2006 Jeep Commander with a sticker price of about $35,000. There’s “no way,” Ms. Babcock says, that she would have bought the Commander outright. “I don’t want to have to own it and drive it forever.” Indeed, in December she turned it in and instead leased a new 2008 Commander. Her payment roughly doubled, but that’s mainly because the lease is much less restrictive about her annual mileage.
I’d like to ask Ms. Babcock a couple questions. Does she have college education funds set up for her two young boys? Does she have an emergency fund of 6 months of living expenses? How much does she have in her retirement account? I’m sure she would be offended by such questions. It’s her right to get a brand new car every two years. These are the people who can’t distinguish a need from a want.
This brings me to the chapter in this horror story that really sticks in my craw. I drive through West Philadelphia every day. The neighborhoods are decrepit, with boarded up houses, trash strewn vacant lots, grade schools that resemble prisons, and a substantial number of unemployed folks shuffling about from morning to night. These neighborhoods appear to have five times as many BMWs and Mercedes as my suburban upper middle class neighborhood. According to the U.S. Census, West Philly is a predominantly Black neighborhood, with a large proportion of unmarried high school dropouts living in poverty, occupying dilapidated houses with Direct TV dishes on their roofs. According to the U.S. Census, my neighborhood is occupied by people who are five times higher on the income scale.
The August unemployment figures from the BLS show that the unemployment rate for Black men is 17.0% versus 10.6% last August and versus 9.3% for White men. The unemployment rate for Black teenagers is 34.7%. With these figures, you would expect unrest, looting, and riots in West Philly. The civil unrest hasn’t happened in West Philly or anywhere else. I think I’ve figured out why. Just picture a 20 year old unemployed Black man calling his homies on his iPhone urging them to drag themselves away from staring at their 52 inch HDTVs with 600 stations on their Direct TV network, hop into their BMW X5, and drive over to the comprehensive healthcare riots. It’s not happening. Our elected officials, Federal Reserve and banking cartel have chosen to buy off the poor at the expense of the middle class, so the rich can get richer.
Easy money allows the poor to live like the rich. This explains why people in West Philly are able to drive $50,000 one year old BMWs, while I choose to drive an 8 year old CRV with 130,000 miles. My choice was to finance my $20,000 car over 4 years at 7%. I had a $500 monthly payment for 4 years and then was able to save $500 per month for the next 6 years, banking $36,000 in savings. The auto financing companies GMAC, Ford Credit, and Chrysler Credit offer rebate incentives, 7 year loans, and 0% interest to entice everyone to drive BMWs and Mercedes for a monthly payment below $500. The poor are more likely drawn to three year leases with even lower monthly payments. You can lease a BMW for $399 per month or lower. Once you are lured into 3 year leases or 7 year loans, you are ensnared in a lifetime car payment, never saving a dime. Over 4 decades, my method will leave me with $200,000 of savings. A perpetual car payment will leave you with $0 of savings. Millions have chosen this negligent path. Not only did they pursue this path, they hurtled themselves down the path with gusto by borrowing against their houses to buy cars. The numb-nuts in California and Florida were the worst offenders.
A drug addict still needs a dealer to get their fix. Politicians in Washington with their cohorts in crime, the Federal Reserve and the banking cartel, provided the drug of easy money. The unholy combination of a psychological need to appear successful and easy money has created a deadly recipe for those in the middle class who drive their modest cars for 10 years and save for the future. The black magic of securitization has allowed banks and finance companies to bestow credit card cards and car loans to high school dropouts making $20,000 per year in West Philly with no concern about getting repaid. They packaged this future bad debt, paid off Moody’s and S&P to rate it AAA, and dumped it on suckers throughout the world. Now, auto loan delinquency rates are at all time highs, 1.7 million cars were repossessed in 2008, with another 2 million likely to be repossessed in 2009.
The underprivileged people in West Philadelphia don’t comprehend that politicians and bankers are actually keeping them entrapped in poverty by providing them with easy credit and persuading them that making perpetual payments for cars, TVs, and other material goods is a normal lifestyle. When reality sets in and these people stop making their payments, no trouble for them. As the financial system came crashing down due to the millions of bad loans made by the banking cartel, their protectors Hank (Goldman) Paulson and Ben (Helicopter) Bernanke funneled TRILLIONS of your tax dollars and your children’s tax dollars and their children’s tax dollars to the banks that committed these crimes. The poor people in West Philly don’t pay taxes, so they got to drive BMWs and watch 52 inch TVs for awhile, and are left relatively unscathed. The middle class is paying the bill, losing millions of jobs, while seeing their 401ks drop by 40% and they are still driving their 10 year old cars. Government now wants you to pay more so the poor will have health insurance when they get injured in a BMW accident.
I didn’t go to boarding schools
Preppy girls never looked at me
Why should they, I ain’t nobody
Got nothing in my pocket
Living in Beverly Hills – Weezer
For the last three decades you didn’t need anything in your pocket to attract a preppy girl. You just needed to whip out one of your 10 credit cards and act like a Beverly Hills hotshot. Cash was for suckers. Credit cards are so easy to use. You just pull it out, buy whatever you desire at that moment and make a minimum payment every month until infinity. We’ve become a minimum payment nation. If you can handle the minimum payment, it’s yours. In 2006, the Census Bureau determined that there were nearly 1.5 billion credit cards in use in the U.S. A stack of all those credit cards would reach more than 70 miles into space — and be almost as tall as 13 Mount Everests. Consumer credit debt has risen from $400 billion in 1980 to $2.5 trillion today. Consumers have an average of 5.4 credit cards with $973 billion outstanding. The average outstanding credit card debt for households that have a credit card was $10,679 at the end of 2008. The average American with a credit file is responsible for $16,635 in debt, excluding mortgages, according to Experian. The most fascinating fact is that the top 10 U.S. credit card issuers held an 87.55% market share of $973 billion in general purpose card outstanding in 2008. These 10 banks are coincidently the same banks that brought down the financial system (Bank of America, Citicorp, JP Morgan Chase, Wells Fargo, Capital One, HSBC, American Express, Discover, US Bank, USAA).
It has taken Americans three decades of overspending and under-saving to get into this pickle. As you may notice, consumer credit debt is $2.5 trillion and has barely budged downward. The pundits and economists predicting a strong economic recovery are blind to the truths of consumer debt. With actual unemployment exceeding 16.8%, 9 million people forced to work part-time wanting to work full-time, the work week at all time lows, and banks shutting down credit lines, consumers will be reducing or defaulting on their debt for years. With 70% of the economy dependent on consumer spending, there is absolutely no chance of a strong recovery. Household debt service payments as a percentage of disposable income reached a peak of 14.2% in 2007 and have plunged all the way to 13.5% today. Disposable income is plunging as people without jobs don’t have anything to dispose of.
A paradigm shift is occurring and the mainstream media, mainstream economists, and clueless politicians running this country do not understand the implications. Three decades of debt accumulation is not resolved in two years. It will take decades of reduced spending, paying down debt, and writing off debt. The Federal Reserve, banking cartel, and politicians are franticly attempting to make consumers borrow and spend with TARP, TALF, Cash for Clunkers, and numerous other debt increasing gimmicks. The consumer is tapped out. The median 401k balance in the U.S. is $26,000. Boomers realize they are 60 years old and have $50,000 of retirement savings and $30,000 of credit card debt. They are learning the brutal lesson of needs versus wants. The implications are disastrous for those dependent on a consumer spending society (i.e. retailers, restaurants, hotels, car makers, homebuilders).
There are 25% of households in the U.S. with no credit cards. Of those with a credit card, 30% pay off their balances each month. These are the people that have chosen to live within their means. They understand the difference between needs and wants. They appreciate the notion of delayed gratification. You buy things when you can afford them. You live a life of thrift and frugality, save for your family’s future, and live within the parameters of a budget. What a concept. The TARP accepting banks that control 87% of the credit card market are recording losses on an unprecedented scale. But no need to worry, the middle class tax payers come to the rescue again. Orwell must be rolling in his grave at the government originated Troubled Asset Relief Program. “Troubled” is an Orwellian word to describe debt that was knowingly issued by banks to people who would never pay it back in order to generate outrageous fees and bonuses for the executives issuing the debt. When the debt predictably went bad, “Relief” was provided to the criminal bankers on the backs of the taxpaying middle class. Bank of America, Wells Fargo and JP Morgan are bigger than they were before the financial crisis, their executives are still making millions, their “assets” are still “troubled”, and we continue to pay the bill, as will our children and grandchildren. Don’t worry. Ken Lewis, Vikram Pandit and Jamie Dimon’s grandchildren will inherit hundreds of millions of your tax dollars from their banker grandpas.
Beverly Hills… That’s where I want to be! (gimme, gimme)
Living in Beverly Hills…
Beverly Hills… Rolling like a celebrity! (gimme, gimme)
Living in Beverly Hills…
Look at all those movie stars
They’re all so beautiful and clean
When the housemaids scrub the floors
They get the spaces in between
I wanna live a life like that
I wanna be just like a king
Take my picture by the pool
Cause I’m the next big thing
Living in Beverly Hills – Weezer
The 8,000 square foot castle-like McMansions are the symbol of extravagance and excess that represent the worst of America’s hyper-consumerism culture. Even though the family unit has gotten smaller since 1970, the average home size has grown from 1,400 sq ft to 2,500 sq ft. McMansions are clearly not necessary due to family size. Essentially, it is another example of Boomers attempting to show the world they are successful. The bigger and gaudier the house the more flourishing you appear. This psychological need for approval combined with the big lie pushed by the National Association of Realtors that a house is always a great investment to generate the biggest housing bubble in history. One glance at Robert Shiller’s chart showing home prices versus population growth and CPI, proves beyond a shadow of a doubt that we have experienced a manic increase in house prices. It is also unambiguous that the downward spiral is not nearly complete. The housing cheerleaders continue to forecast a housing recovery that is still 5 years in the future.
It is mind boggling that home prices could have surged that high while owner’s equity has plunged from 70% in 1980 to 45%. People didn’t earn the McMansions, they borrowed them. The Federal Reserve created spiral in prices upward has trapped millions of late comers in houses that are worth 20% to 30% less than the mortgage debt that is strangling them. Over 16 million home occupiers (not homeowners) are underwater in their mortgage. The decisions to buy houses with nothing down, using option ARM loans, were free choices made by people who should have known better. The decisions to make subprime loans to people making $30,000, to make no-doc loans, and to not verify income or assets were purposefully done to enrich the bankers, mortgage brokers, and real estate agents. The $10.5 trillion of mortgage debt will need to be paid down or written off over many years, before the housing market will reach equilibrium again.
The dream of living like a king in Beverly Hills has come to a shattering conclusion. As mortgage delinquencies soar to all-time high levels, the kings are being led kicking and screaming to the foreclosure guillotine. Neighborhoods of McMansions in California, Phoenix, Florida, and Las Vegas are weed infested crime ridden high end ghettos. The American dream of home ownership spouted by George Bush and legislated through Fannie Mae and Freddie Mac has turned into a debt induced nightmare.
The Alt-A reset crisis which will begin in 2010 and not crest until 2013 is coming down the tracks at a swift pace. The credit criteria used by the banks that doled out Alt-A loans were as lax as the subprime loans that precipitated this crisis. These loans already have delinquency rates of 33%, even before these resets kick in. There is no evading this calamity. There is also no doubt how the Federal Reserve, Treasury, and government politicians will handle this next emergency. If you have lived in a modest home, made your mortgage payments, didn’t use your home equity to buy a Mercedes ML350, and pay your taxes, the government will seize your taxes again and dispense them to the profligate borrowers and criminal bankers. You will pay your mortgage and the mortgages on millions of other houses.
No I don’t – I’m just a no class, beat down fool
And I will always be that way
I might as well enjoy my life
And watch the stars play
Beverly Hills… That’s where I want to be! (gimme, gimme)(gimme,gimme)
Living in Beverly Hills…
Beverly Hills… Rolling like a celebrity! (gimme, gimme) (gimme,gimme)
Living in Beverly Hills…
Living in Beverly Hills – Weezer
The era of excess, gluttony, and overindulgence is coming to a wretched ending. The unraveling is complete. We have entered an epoch of crisis that will last for two decades. The coming winter will be cold, bitter and harsh on most Americans. Millions are learning that living in Beverly Hills was just a delusionary dream. They are just no class, beat down fools and I will always be that way. It is time to enjoy the more basic aspects of life: family, friends, enjoying what you’ve got, and leaving the world a better place for our children and grandchildren. It comes down to choices. It is time for Americans to grow up and take responsibility for their actions and their futures. They must realize that the Federal Reserve and the banking cartel are the only ones profiting from ever expanding debt. The Rising Debt Era has not benefited the borrowers as they borrowed toys they couldn’t afford. The beneficiaries were Bank of America, Citicorp, Wells Fargo, JP Morgan and the other members of the cartel. The 10 biggest banks in the country control 48% of all deposits, 50% of the mortgage market, and 87% of the credit card market, supported and protected by the Federal Reserve and Treasury Department. The “too big to fail” continue to get bigger, as the FDIC will shutter 500 smaller banks in the next year.
The banking cartel has no intentions of relinquishing power. It will be left to average Americans to make the right choices. Government will continue to push Keynesian Cash for Clunkers publicity stunts to keep their debt civilization going. The consumer society needs to be put to rest. Americans must ask themselves a few questions. Do you really need a $35 Aeropostale tee shirt when you can get an identical tee shirt at Kohl’s for $6? They were both made in the same Chinese sweatshop by 13 year old children. The difference is that Aeropostale will say it is a “green” shirt because there was no air conditioning used in the sweatshop ruining the ozone layer. What exactly does a pair of $345 Botticelli shoes do that a pair of $35 shoes from Payless Shoe Source won’t do? Does a $10,000 Rolex watch tell time better than a $50 Timex? Will an $85,000 BMW 750LI get you to the supermarket better than a $15,000 Honda Civic?
When I started researching this article, I came across a Heritage Foundation report called How Poor Are America’s Poor? Examining the “Plague” of Poverty in America. The article makes it clear that the poor in America do not fit the portrayal of living in poverty when compared to real poverty in Africa and much of the developing world. The report concludes:
The typical American defined as “poor” by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry and he had sufficient funds in the past year to meet his family’s essential needs. While this individual’s life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, liberal activists, and politicians.
The main causes of child poverty in the United States are low levels of parental work, high numbers of single-parent families, and low skill levels of incoming immigrants. By increasing work and marriage, reducing illegal immigration, and by improving the skill level of future legal immigrants, our nation can, over time, virtually eliminate remaining child poverty.
The Heritage Foundation report missed one key aspect of being poor in America. The politicians and banks have taken advantage of the poor’s lack of education and ignorance regarding the perils of debt and have enslaved them in a monthly payment plantation. The poor don’t own the cars, electronics, homes and appliances. They are renting them until they can no longer make the payments. The politicians have colluded with the Federal Reserve and banks to provide bad money to the poor in order to keep them satiated and pliable. When the debt predictably goes bad, the banks are compensated by their bought government cronies with middle class’ tax dollars.
“When I was a child I spoke as a child I understood as a child I thought as a child; but when I became a man I put away childish things.” I Cor. xiii. 11.
Americans, led by the Baby Boom Generation, have been living like spoiled children for thirty years. They have thought like children, with instant self-gratification as their sole aspiration. It is time to put away childish things. Hard times have arrived. There is no easy way out. We have kicked the can down the road for a generation. Tomorrow has arrived. Our long-term structural problems have now collided with our current debt induced tragedy. Current policies that further the expansion of debt will ultimately lead to the collapse of our economic system. The timing is all that is in doubt.
Give me something that I need
Satisfaction guaranteed to you
What’s the consolation prize?
Economy sized dreams of hope
When I was a kid I thought
I wanted all the things that I haven’t got
Oh. I learned the hardest way
Then I realized what it took
To tell the difference between
Thieves and crooks
A lesson learned to me and you
Give me something that I need
Satisfaction guaranteed
Because I’m thinking about
A brand new hope
The one I’ve never known
Cause now I know
It’s all that I wanted
Macy’s Day Parade – Green Day
Materialism has not provided what we needed. As our current crisis deepens, luxury cars and Rolex watches will seem so phony. Childish symbols like yellow rubber wristbands and yellow, pink, and rainbow ribbon stickers on our SUVs do nothing to change the world. When you are walking down the street, look people in the eye and say hello rather than staring at your feet or checking your latest email or text message on your “crackberry”. Deeper personal relationships with family and friends will become crucial. The thieves and crooks occupy Washington DC and Wall Street. We do not need what they are selling. Economy sized dreams of hope will sustain the citizens of this great country. Instead of accumulating stuff, give your stuff to people who need it. Donate your stuff to Purple Heart, the Salvation Army, or any other worthy charity. Donate your time to Manna, Habitat for Humanity, or any other worthy cause. Don’t delegate your role in caring for your fellow citizens to the government. Americans will soon realize that what they wanted was not what they needed.
The blogosphere keeping this important story in the forefront.
From Simon Black of Sovereign Man
Late last week, Thomas James Ball reached his breaking point. Driven to desperation by a system that bankrupted him and destroyed his family, Ball walked up to the main door of the Keene County, New Hampshire courthouse, doused himself with gasoline, and lit himself ablaze.
Hardly anyone seems to have noticed.
Conversely, when a 26-year old Tunisian man lit himself on fire a few months ago after police confiscated the fruits and vegetables he had been selling without a proper permit, it launched a wave of revolution across the Middle East.
People were shocked into taking action… protests and riots swept the region and one regime after another crumbled.
Rather than sparking an “American spring” and shocking US citizens into taking their country back, though, Mr. Ball’s act of self-immolation seems to have been largely ignored. There has been scant coverage (and scant is being extremely generous) of Mr. Ball in the mainstream media, and what little coverage there is generally discredits the man as a troublemaker.
This is how the system’s gatekeepers have been so adroit at maintaining the status quo– by suppressing dissent, marginalizing the detractors, and distracting the populace with meaningless, irrelevant drivel.
Mr. Ball left behind a lengthy missive prior to his suicide, which covers a range of topics from political corruption to why the family court system in America is utterly disgraceful. He was, to put it mildly, a staunch advocate of violent change, and it’s clear he hoped a great deal of others would follow in his footsteps to literally burn the system down.
(Ball even left instructions for how to make a proper Molotov cocktail along with specific vulnerabilities of police stations in his area…)
Perhaps the most interesting part of his final post, however, was the observation that the United States is no longer a nation of laws; Ball described what he calls the ‘second set of books,’ which is essentially the collection of policies, procedures, and protocols that courts and executive agencies rely upon.
This includes police departments and other ‘enforcers’ across the country that come up with standardized responses to take judgment out of the equation. TSA agents, for instance, are only following procedure when they fondle children at airport checkpoints. Even the guys who drove the trains to the concentration camps were just following procedures.
Ball argued that the nation is now ruled by such procedures, even in such institutions as family court where judges (by policy) pass the buck down the line to mental health case workers.
His anger and desperation for this system, which tore apart his family and bankrupted his finances, led Ball to light himself ablaze at the local courthouse in a state whose motto is “Live Free or Die.” Ball chose the latter.
The next day, life went on in America. There was no shocking front-page cover story or award-winning photograph to spark a national debate… let alone propel droves of fed-up citizens to flood the streets demanding change.
Rather, the New Hampshire courthouse cleaned up his charred remains and meticulously scrubbed the floors to eliminate all trace of the event. 24-hour news networks ran a quick blurb in their scrolling tickers amid more important coverage of the Miss USA beauty pageant and President Obama’s Father’s Day plans.
In other words, business as usual… suggesting that if there is, in fact, going to be a fight for the soul of the country, it’s a long way off, and many more degrees for the boiling frogs who are stuck in the pot.
My assessment of this situation, however controversial it may be, remains very clear: the great faceless enemy that opposes us, irrespective of our country of origin, is the institution of government.
Over time, this institution has inserted itself into nearly all aspects of life, such that a man cannot so much as enjoy a pint of beer, discipline his children, ride on the train, go to the doctor, open a bank account, apply for a job, go fishing, or watch a sporting event without the heavy hand of government being involved.
This is a beast that feeds on citizens; the more it feeds, the larger it becomes and the hungrier it gets. Of all the solutions out there, including armed conflict, civil disobedience, self-immolation, active democracy, etc., the only one that truly destroys the beast is starving it– take away the feast of productive citizens and accelerate its collapse.
I knew I could count on Kunstler to address the New Hampshire story. He has his own interesting take on what it means to be a man in today’s society. This story is important. It reveals much about America. It reveals much about which direction we are headed.
By James Howard Kunstler
on June 20, 2011 9:30 AM
Last week, in an incident that didn’t get much attention in the national news, a man named Tom Ball set himself on fire in front of the county courthouse in Keene, NH. He left a fifteen-page suicide note explaining his actions. He was angry at the state child protection bureaucracy and the courts after a ten-year battle over a child abuse charge that became, for him, a Kafkaesque struggle with cruel authority. The long suicide note he left was a thoughtful and disturbing indictment of the legal procedures now common across America that have had many unanticipated consequences – from breaking up families to homelessness – but it was also a grim comment on the condition of American manhood.
A casual Martian observer hanging around any convenience store in the “fly-over” zones of this nation must be impressed with the striking way that American men present themselves to the world. Forgive me for revisiting an oft-dredged-up theme – male costuming and adornment in our time – but I wouldn’t keep bringing it up if I didn’t think it was significant. On the whole, American men present themselves as savages. I think they do it because they feel very insecure about themselves – similar to the insecurity that prompts a politician to wear a flag lapel pin. Should there be any doubt that an elected official cares about his country? Or maybe we should ask: what kind of country produces such craven, weak, pandering elected officials? What kind of culture produces men who get themselves up like chain-saw murderers?
The same country that furnishes an endless diet of super-hero movies to pubescent males who are not expected to develop normal adult coping powers. The same country that supplies gruesome, sado-masochistic video games to occupy the idle hours of young men – and then lets them take those “skills” to some tilt-up bunker in Nevada where they sit in air-conditioned comfort and direct drone aircraft ten thousand miles away to incinerate suspected “enemies” in mud villages. (Sometimes “mistakes are made” and they blow up a wedding party or something – but the drone controllers still get to leave the bunker at the end of their shift and roll down the strip for a plastic tray full of burritos.)
This month’s WeinerGate was another instructive incident. Up-and-coming wonderboy politician revealed to be secret sex schlemiel, undone by “social media” – which turns out to have the unanticipated consequence of undermining the impulse control of supposedly grown men. Who knew? But what interested me more than Weiner’s pitiful dishonesty was the parade of women journalists on cable TV news who all agreed that poor Weiner’s downfall was yet another conclusive demonstration of how hopeless men are – not to mention that their male colleagues on-screen, Blitzer, King, O’Donnell, sheepishly agreed with them. This ceremonial posturing for moral brownie points in an extremely moralistic and puritanical culture does tend to obscure the reality that adult male humans are sexually alert in an inconvenient way that is not identical to the experience of females. Notwithstanding the evident insanity of Dominque Strauss-Kahn jumping the hotel maid, men sometimes make passes. American women cannot forgive them for this. Lesson: perhaps American men should not make such an effort to seek forgiveness. I am waiting, personally, for some Mark Sanford type (former South Carolina governor caught in “affair” with Argentine firecracker) to go before the microphones and say to media (and the voters), “this is none of your goddam business.”
Which brings me to the troublesome subject of gay marriage, which is lately up for debate in the legislature of New York State where I live, making it the public’s business. I have an unpopular view of it for men of my demographic (Democrat, Boomer). I’m not in favor of it. I don’t think it is a good idea. I don’t have empirical proof, but I suspect that unsettling such an age-old and fundamental social arrangement will produce strange unanticipated consequences that we are not prepared for. I don’t believe gay marriage is a genuine social justice issue. I think it is a bid for a kind of broad social approbation which does not require ritual enactment in law, and would be socially mischievous to pursue. Civil unions would cover the necessary legal issues. Otherwise, it is a case of unwarranted relativism, a Boomer weakness. Not all conditions or states of being in this world are the same. Some things are on the margins because they are marginal.
What fascinates me in the debate is the narcissism of Boomers, males especially, who advocate so earnestly in favor of gay marriage. Is it really about the law and social relations, or is it about making yourself feel good? Is it just more posturing for moral brownie points, for approval? Is your job and social position or maybe even sense of yourself at stake if you have a differing view?
I had an interesting experience with my last two books (World Made By Hand and The Witch of Hebron), which were set in a post-oil, post economic collapse American future and depicted daily life in a way that was quite unlike the way we live right now. I received a heap of criticism from female readers – including peak oil activists – full of consternation that I did not present female characters in the kinds of dominant valorized roles that are favored today: the post-oil equivalent of CEO, news anchor, CIA-Ninja warrior, Presidential candidate. What struck me was their complete failure of imagination. They could not conceive of male / female relations that were different than today’s, even in a world that had been turned economically upside down.
However, this was not inconsistent with the failure of American men to know how to act like men in this anxious moment of history. The choices are pretty unappetizing: be a jobless loser in a “Pray for Death” T-shirt with neck and knuckle tattoos, or a loser in a corporate cubicle, or a loser in that Nevada drone-control bunker, or a loser in the eyes of the family court, or a loser on cable TV. Tom Ball, the man who set himself on fire in Nashua, New Hampshire recommended something that sounded a lot like violent revolution, though his tone was eerily measured for someone about to commit the most desperate personally public act. I hope we don’t have to go through a convulsion in this land to find out how what it means to be a man.
“So boys, we need to start burning down police stations and courthouses. The Second Set of Books originated in Washington. But the dirty deeds are being carried out by our local police, prosecutors and judges. These are the people we pay good money to protect us and our families. And what do we get for our tax money? Collaborators who are no different than the Vichy of France or the Quislings of Norway during the Second World War. All because they go along to get along. They are an embarrassment, the whole lot of them. And they need to be held accountable. So burn them out.
In the last 25 years they have arrested one in six adults in this country and forced 25% of the men, women and children into homelessness. In 50 years it will be one in three adults arrested and 50% of the men, women and children ending up homeless. Most of our kids will live to the age of 68 years old. As bad as it was for you, your children will have twice the odds of it happening to them.
Some of you will say that 50% homelessness sounds absurd. But 25% is absurd and that is already here. There is no evidence that the police, courts, or government is planning to do anything different in the immediate future. And they will not do anything different until we make it so uncomfortable that they must change. Bureaucracy at its worst. So burn them out. This is too important to be using that touchy-feeling coaching that is so popular with business these days. You need to flatten them, like Wile E. Coyote. They need to be taught never to replace the rule of law. BURN-THEM-OUT!
Most of the police stations built in New England over the last 20 years are stone or brick. Fortunately, the roofs are still wood. The advantage of fire on the roof is that it is above the sprinklers. But even the sprinklers going off work to our advantage. There is no way they can work in a building with six inches of water. And I am certain we will disrupt their momentum once they start working out of a FEMA trailers. If they still do not get the message, then burn down the trailers.
The easiest way of burning a building is with the Molotov cocktail. It was invented by the Finns when the Soviets invaded in 1939. You fill a bottle with gasoline and stuff a rag in the end for a wick. You light the wick and throw bottle, It shatters on impact spraying gas everywhere and the wick ignites the gas. Simple, readily available, and effective. And only two things to remember.
First, use a glass bottle. Thinner glass is better than thicker glass. You want it to shatter on impact. When I was teaching a kid at the high school on the West Side Worcester, MA. threw a Molotov cocktail into his school. Fortunately, he used a plastic bottle. It burned about three square inches of carpeting. I had to laugh when I said to myself, “Thank God for dumb kids.”
Second, you need to tie the rag to the bottle. Nothing worse that throwing a Molotov cocktail, landing where you wanted it, and having it shatter perfectly. Then you noticed the wick had fallen out on the way to the target. No wick-no fire.
Some of these building will have brick faces and metal roofs. Just break a window and throw the Molotov cocktail inside. Carpets, furniture, computer plastic, even paint on the walls will burn. It is okay if the sprinkler goes off. I wonder if you can get hip waders over a gun belt?
We had a kid in my hometown that burned down the old junior high school. He walked up to the front door one night with a can of lighter fluid. The applicator on the end squirts the lighter fluid out. He squirted under the door and along the seams and lit a match. The kid took out the entire old part of the building. Why are kids so competent when it is something they should not be doing?
There will be some casualties in this war. Some killed, some wounded, some captured. Some of them will be theirs. Some of the casualties will be ours.”
THIS STORY NEEDS TO BE SPREAD BY THE ALTERNATE TRUTH TELLING MEDIA. THE GOVERNMENT/CORPORATE MSM IS MISSING IN ACTION.
Keene Police were not giving out much info, but there is a dead body out front of Cheshire Superior Court and a large amount of charring on the sidewalk in front of the courthouse. Police scanner recordings confirm this is a case of suicide by self-immolation. You can listen to the Keene police scanner here.
Makes you wonder what the court did to the poor guy/gal. More details as we learn them:
UPDATE: Here’s the Sentinel’s piece with comments from a witness.
UPDATE: Here’s audio from the police scanner feed after the man sets himself ablaze.
This morning, locals report that government workers were spraying and scrubbing in an attempt to remove the evidence of yesterday’s apparent self-immolation in front of the Cheshire superior court. I stopped by early this morning to file some motions in another case and talk to the Sheriffs about yesterday and took a picture of the damage. Click the pic for a full size version.
It’s going to take more than a hose and brush to make this issue go away. People need to know who this man was and why he made this horrific choice.
More as it develops. Thus far, no return calls from Keene Police or Cheshire Sheriffs.
Gerald Celente’s description is fitting:
“When people lose everything, and they have nothing left to lose, they lose it.”
As the super rich powerful elite continue to ransack and pillage the remaining wealth of the middle class, we inch ever closer to people losing it en masse.
|
Mac Slavo
June 18th, 2011 |
Tom Ball of New Hampshire set himself on fire in front of a Cheshire County family courthouse on Wednesday. The story has received very little attention from the mainstream media, likely because Ball provided the reasons and justifications for his act in a 15 page letter to the New Hampshire Sentinel just prior to his death, in which he unleashed a tirade against the US court system, police, child protective services, the US justice system and its arrest policies, and the Federal government.
From what we are able to gather, his ordeal began in 2001 with what he claims was an accidental injury caused to one of his children when the child was misbehaving. Ball reportedly slapped the child after having warned her thrice and she ended up with a cut lip. The child was not permanently or severely harmed, but the mother called police at the (forced) urging of a mental health practitioner and the state got involved. Ball was eventually found not guilty, but the story doesn’t end there.
Among other things, Ball attempts to explain in his letter what happened that night, and the events that followed for the last ten years, finally leading him to self immolation.
By some he will be referred to as a domestic terrorist for his calls of violence, by others as a revolutionary for his actions and call to arms, others still will dismiss him as a head case. This is, however, an important event and the people, as well as government and their agencies, should take notice.
Some excerpts from his letter to the Sentinel:
There are two kinds of bureaucrats you need to know; the ones that say and the ones that do. The bridge between them is something I call The Second Set of Books. I have some figures of the success of their labors. You and I are in these numbers, as well as our spouses and children. But first let me tell you how I ended up in this rabbit hole.
My story starts with the infamous slapping incident of April 2001. While putting my four year old daughter to bed, she began licking my hand. After giving her three verbal warnings I slapped her. She got a cut lip. My wife asked me to leave to calm things down.
When I returned hours later, my wife said the police were by and said I could not stay there that night. The next day the police came by my work and arrested me, booked me, and then returned me to work. Later on Peter, the parts manager, asked me if I and the old lady would be able to work this out. I told him no. I could not figure out why she had called the police. And bail condition prevented me from asking her. So I no longer trusted her judgment.
After six months of me not lifting a finger to save this marriage, she filed for divorce. Almost two years after the incident, I was talking with her on the phone. She told me that night she had called a mental health provider we had for one of the kids. Wendy, the counselor told my then wife that if she did not call the police on me, then she too would be arrested.
Suddenly, everything made sense. She is the type that believes that people in authority actually know what they are talking about. If both she and I were arrested, what would happen to our three children, ages 7,4 and 1? They would end up in State custody. So my wife called the police on her husband to protect the children. And who was she protecting the kids from? Not her husband, the father of these children. She was protecting them from the State of New Hampshire.
This country is run by idiots.
…
So let us talk about those bureaucrats that do. These are the ones that actually carry out the evil deeds. I like call them the do-bies.
Any one swept up into legal mess is usually astonished at what they see. They cannot believe what the police, prosecutors and judges are doing. It is so blatantly wrong. Well, I can assure you that everything they do is logical and by the book. The confusion you have with them is you both are using different sets of books. You are using the old First Set of Books- the Constitution, the general laws or statutes and the court ruling sometime call Common Law. They are using the newer Second Set of Books. That is the collection of the policy, procedures and protocols. Once you know what set of books everyone is using, then everything they do looks logical and upright. And do not bother trying to argue with me that there is no Second Set of Books. I have my own copies at home. Or at least a good hunk of the important part of it.
I got my Second Set of Books when I sued the Jaffrey NH police department. Under the discovery rule, I write them with the material I wanted and it would arrive in the mail a few weeks later. I got the Police Academy Training Manual. I got the Department’s Policy and Procedure Manual. I got the no-drop protocol that the attorney general sent to all his or her prosecutors. I even got the domestic violence protocols for the court system, one hundred pages worth. Once you read it the material, then you will know what the police, prosecutors and judges will do. They are completely predictable once you know what set of books they are using.
…
I lost visitation with my two daughters when I got arrested. One was the victim-the other was the witness. After a not guilty, I expected to get visitation with my girls. But the divorce judge, Sullivan, decreed that counseling was in order and they would decide when we would reunite. I told the judge that the decision on whether these two girls had a father or a fatherless childhood was not leaving this courthouse.
…
On one hand we have the law. On the other hand we have what we are really going to do-the policies, procedures and protocols. The rule of law is dead. Now we have 50 states with legal systems as good as any third world banana republic. Men are demonized and the women and children end up as suffering as well.
So boys, we need to start burning down police stations and courthouses. The Second Set of Books originated in Washington. But the dirty deeds are being carried out by our local police, prosecutors and judges. These are the people we pay good money to protect us and our families. And what do we get for our tax money? Collaborators who are no different than the Vichy of France or the Quislings of Norway during the Second World War. All because they go along to get along. They are an embarrassment, the whole lot of them. And they need to be held accountable. So burn them out.
In the last 25 years they have arrested one in six adults in this country and forced 25% of the men, women and children into homelessness. In 50 years it will be one in three adults arrested and 50% of the men, women and children ending up homeless. Most of our kids will live to the age of 68 years old. As bad as it was for you, your children will have twice the odds of it happening to them.
Ball also cites the rise of the Tea Party as evidence that insurrection in America is growing, reasoning that one of the primary reasons for why this is occurring is because the middle class is being wiped out. He promotes direct action against agencies of the government, expanding on his call to “burn them out,” by providing details on Molotov cocktails.
And for a possible explanation of why this story did not get coverage across the popular news channels, we need only look at the following set of statements from his letter:
There will be some casualties in this war. Some killed, some wounded, some captured. Some of them will be theirs. Some of the casualties will be ours.
Now, nobody wants to get killed. But let us look at your life. You are broke after paying child support. She and the kids are not doing any better. None of you are middle class any more. You have no say in the kids education, their health treatment, you may not even have visitation with your sons and daughters. And everything you thought you knew to be true-the rule of law, the sanctity of the of the family, the belief that government was there to nurture your brood-all turned out to be a lie. Face it boys, we are no longer fathers. We are just piggy banks.
…
I only managed to get the main door of the Cheshire County Courthouse in Keene, NH. I would appreciate it if some of you boys would finish the job for me. They harmed my children. The place is evil. So take it out
Some where along the line I picked up the crazy notion that it is better to be dead as a free man than to live as a serf. The government needs to be a little more careful about what they teach in our schools.
Perhaps Tom Ball believed that his death would lead to a similar explosion of protests as those that occured in Tunisia after an act of self immolation by a street vendor whose livelihood was seized by police. Many point to this single act of desperation as the catalyst for the entire middle east movement of the last 6 months.
Whatever the case, Tom Ball’s experience was certainly not unique and he makes this clear in his statement to the world.
We are not advocating the violent activities being called for by Mr. Ball, yet we couldn’t help but think about a memorable trend forecast from Gerald Celente of the Trends Journal in which he said:
When people lose everything, and they have nothing left to lose, they lose it.
We saw this with the man who flew his plane into the IRS building in Austin, we saw it a couple days ago with Tom Ball, and we anticipate similar acts of protest and domestic violence in the future, likely with increasing frequency.
Hat tip Charlie, Zero Hedge, Activist Post, NH Sentinel
Author: Mac Slavo
Date: June 18th, 2011
Website: www.SHTFplan.com
Maybe the pic of Smokey at the Street Festival will surface…
– Thu Jun 16, 10:00 am ET
New research issued by weight-management specialists LighterLife reveals that one in ten British men are unable to see their penis because of their protruding bellies.
(PRWEB UK) 16 June 2011
The research into the health of the nation’s men revealed that of those people, 43% hadn’t seen their penis in the last two years, without looking in a mirror or bending over, whilst 16% were unable to remember the last time they saw it.
From the research of 2,000 men it was easy to see why the health of British men was in such a poor state as:
However it seems that only in drastic circumstances would British males consider doing something about their weight, explaining why the nation is becoming more obese each year:
Mandy Cassidy, psychotherapist for weight-loss and weight-management company, LighterLife for men says: “It’s apparent that some British men take a relaxed approach to health and to losing weight. Often, it’s only when something drastic happens, will they consider losing weight and becoming healthier, which is a real worry.
Mandy continues: “The research reveals it is clearly not only women who worry about their appearance when it comes to extra weight. Men should be looking at maintaining a healthy lifestyle at all times not waiting for an obvious change to motivate them into action!”
It seems that men would also consider other options before losing weight and being able to see their penis again. 34% of men would resort to creative shaving in order to make the length of their genitals appear larger, 19% would turn off the lights and 13% would even consider a penis pump before losing weight.
Dr David Bull, a doctor and medical broadcaster said “A man who is not able to see his willy should think seriously about his health. He’s clearly on the brink of being or is already overweight. This simple check to see if your beer gut is a cause for concern, is something that men across the UK should be doing to ensure that a little bit of wobble doesn’t turn into a health issue. Not only is it not aesthetically pleasing, it could be damaging your long term health and survival”.
http://www.statistics.gov.uk/census2001/demographic_uk.asp
http://www.statistics.gov.uk/statbase/Product.asp?vlnk=15106
# # #
Jennifer Spencer-Charles
LighterLife for men
01279 636 998 2073
Email Information
As I perused my local paper this morning I glanced at the story about the North Penn graduation yesterday. Approximately 1,200 Millenials graduated and are moving on to their next step in life. I was about to skip to the next story when I saw the name Neil Howe in the story. The valedictorian’s speech to his class referenced our current Crisis as laid out by Strauss & Howe in The Fourth Turning. This 18 year old kid gets it. He understands these are dangerous times. He told his fellow classmates they are the new Hero Generation, as he referenced the last Hero Generation that did the heavy lifting and dying during the last Fourth Turning.
I know the old farts on this site do the usual bashing of the youth of today, but they are wrong. This country will only get through this Fourth Turning with a positive result if the Millenials are successful in handling the terrible ordeals that await them. I have three Millenials at home. I know their friends. These are good kids. Their eyes are open. They see how badly their elders have fucked things up. They have no choice but to fix it. They have no choice but to meet the immense challenges ahead. While the Boomers scream at each other and threaten to shut down the government and issue more debt to paper over a debt crisis, the Millenials are preparing for the next 15 years. They are faced with modern distractions (iPods, computers, TV, social media), but human nature does not change. They have not been properly educated by the Boomer run education system, but they understand crushing debt, no jobs, stagnant income, and rising food and energy costs. They know the country cannot run $1.5 trillion deficits for infinity without destroying the country. They are our last best hope.
We’ve been here before. The GI Generation has virtually died off, but the new Hero Generation is getting ready to step up. The old fogies who shit on this generation need to step back and understand history. This generation will step up, because they have to.
By Linda Stein
Staff Writer
North Penn High School seniors celebrate as they take the fieldfor the Fifty-Sixth Commencement ceremony at the school on Wednesday evening June 15,2011. Photo by Mark C Psoras
TOWAMENCIN — A sea of newly minted North Penn High School graduates in blue caps and gowns marched into Crawford Stadium Wednesday under a softer blue sky.
Cheering and applauding family and friends clutched balloons and flowers. Some took pictures. Others smiled, waved and blew kisses as the 2011 graduates–more than one thousand strong–took their places on the field, ready to begin a new stage in their young lives.
In an inspiring speech, class Valedictorian Julian Pei spoke of the challenges that his generation faces with economic uncertainties and war abroad.
“Sometimes it feels as if our country is unraveling,” Pei said. “But we cannot fear these times, rather, we must embrace them. The word ‘crisis’ in Chinese is made up of two parts. The first character means ‘danger.’ Clearly we are facing some uncertain and possibly dangerous times ahead. But the second character means ‘opportunity.’
“I believe our generation faces some enormous opportunities in the face of crisis,” he said. Citing historians William Strauss and Neil Howe, Pei said that American history has 80 to 100 year cycles.
Current circumstances comprise a moment of crisis but “we are the ‘Hero Generation,’ mirroring the ‘Greatest Generation’ from about 80 years ago.
“In order for us to properly seize life’s opportunities and become unbeatable…we must be prepared to take on any challenge,” Pei said.
“Go out into the world knowing that the time is now to take the fist step in sculpting a new generation.”
Pei, who plans to go to the University of Pennsylvania, will study biology and finance.
The G.I. Generation (Hero, born 1901-1924) developed a special and “good kid” reputation as the beneficiaries of new playgrounds, scouting clubs, vitamins, and child-labor restrictions. They came of age with the sharpest rise in schooling ever recorded. As young adults, their uniformed corps patiently endured depression and heroically conquered foreign enemies. In a midlife subsidized by the G.I. Bill, they built gleaming suburbs, invented miracle vaccines, plugged “missile gaps,” and launched moon rockets. Their unprecedented grip on the Presidency began with a New Frontier, a Great Society, and Model Cities, but wore down through Vietnam, Watergate, deficits, and problems with “the vision thing.” As “senior citizens,” they safeguarded their own “entitlements” but had little influence over culture and values.
The Millennial Generation (Hero?, born 1982-?) first arrived when “Babies on Board” signs appeared. As abortion and divorce rates ebbed, the popular culture began stigmatizing hands-off parental styles and recasting babies as special. Child abuse and child safety became hot topics, while books teaching virtues and values became best-sellers. Today, politicians define adult issues (from tax cuts to deficits) in terms of their effects on children. Hollywood is replacing cinematic child devils with child angels, and cable TV and the internet are cordoning off “child-friendly” havens. While educators speak of “standards” and “cooperative learning,” school uniforms are surging in popularity.
The linear thinkers continue to be knocked for a loop. They do not understand the dynamics of a Fourth Turning. These people think the world continuously progresses. They think things will just settle down in the Middle East, Europe, China and the US. They think there are no consequences to the horrible decisions of our leaders and the pillaging of the common people by bankers, mega-corporations and politicians. They are badly mistaken.
Fourth Turnings ALWAYS sweep away the old order. Fourth Turnings are ALWAYS violent. Greece is just a preview. The intensity is increasing by the moment. And do not think for a moment that the video in the link below is not coming to America. It is inconceivable to the linear thinkers, but not to those with their eyes wide open.
Does this look like a decrease in intensity?
http://www.telegraph.co.uk/news/newsvideo/8203692/Petrol-bombs-and-tear-gas-at-Greek-protest.html
 Protesters try to remove a fence protecting the Greek parliament during a demonstration in Athens. Thousands of demonstrators besieged the Greek parliament on Wednesday in a large anti-austerity protest marred by violence. (Louisa Gouliamaki / AFP/Getty Images / June 15, 2011) |
Angry protesters pushed the Greek government close to collapse Wednesday, putting Europe on notice that deep budget cuts to tame the region’s debt crisis face heavy public resistance and could crash on the rocks of national politics.
Thousands of people packed downtown Athens in an effort to block lawmakers from debating brutal austerity measures that European finance officials say are essential if near-bankrupt Greece wants their help to pay its bills. The gathering descended into violence — with some protesters hurling water bottles, rocks and firebombs — that took riot police hours to quell and helped spark a dramatic offer by Prime Minister George Papandreou to quit in favor of a unity government.
The volatile situation offered a stark example of the predicament facing the European Union as it tries to contain a debt crisis that has rattled markets for more than a year.
The EU has demanded painful spending cutbacks by Greece, Ireland and Portugal as the price of bailing out their cash-strapped governments. Spain and Italy also have passed major belt-tightening measures to avoid getting sucked into the euro mess.
But public opposition is growing in some of these countries, threatening to topple governments and to torpedo at home the collective solutions approved by EU leaders in Brussels.
In Athens, Papandreou’s Socialist government is seeking parliamentary approval of the austerity plan, including tax hikes, deep cuts in public-sector wages and a fire sale of state assets. Papandreou says the package is crucial if Greece wants additional bailout funds on top of the $146-billion lifeline promised by the EU and the International Monetary Fund last year.
But opposition leaders indicated Wednesday that they expected Papandreou’s resignation and the renegotiation of the bailout package.
After first offering to step down to make way for a government of national unity, Papandreou said on national television Wednesday night that he would reshuffle his Cabinet and seek a vote of confidence in Parliament.
“I have made repeated proposals to political parties for consensus. Today I renewed that attempt…. Despite my stance, the main opposition party handled this attempt like a public-relations drill,” said Papandreou, who is facing his lowest public approval ratings since taking office in 2009. “I will continue on the same path I charted.”
Outraged by previous budget reductions, thousands of Greeks have filled Syntagma Square in the heart of Athens over the last three weeks in protest. On Wednesday, the number ballooned to about 30,000 people, including members of the country’s two largest labor unions, which staged a 24-hour nationwide strike.
After three hours of scuffles, at least 12 protesters were arrested, shop windows around the square were shattered and thick plumes of tear gas hovered over the city, sending tourists scrambling for cover in side streets and alleyways.
“It wasn’t supposed to be this way,” lamented Stella Stamati, 43, a government-employed chemist who joined the protest with three colleagues.
Many of the demonstrators had been inspired by recent peaceful mass protests in Spain, where thousands of young people camped out in a Madrid plaza for days to shake their fists at government austerity policies and to express their frustration over a high level of joblessness that has hit the young the hardest.
Last month, Spain’s ruling Socialists were routed in regional and local elections widely seen as a rebuke of Prime Minister Jose Luis Rodriguez Zapatero‘s plan to slash state spending to bring down the public deficit.
In neighboring Portugal, voters booted the government in a general election last week out of unhappiness with the terms of the country’s bailout from the EU and IMF, which will require difficult structural reforms to the economy. The new government, however, has largely pledged to stick to the conditions.
For their part, Ireland’s new leaders are pushing hard for a renegotiation of the EU-IMF rescue package their predecessors had agreed to, further widening the cracks in the veneer of European unity.
Critics blame Germany, Europe’s paymaster, for having dithered over rescuing Greece last year, when the crisis looked more containable, because of political considerations at home. Many Germans oppose the use of their tax money to bail out their fiscally troubled neighbors.
Markets have reacted to Europe’s infighting and Greece’s woes by pushing borrowing costs for Athens to unheard-of highs. On Wednesday, the cost of insuring $10 million in Greek bonds rose to a record $1.725 million a year, according to data provider Markit. This week, the Standard & Poor’s ratings firm downgraded Greek bonds to the lowest rating of any of the 131 states on its books.
Does it seem like we’ve been here before?
A barrel of Brent Crude (the truest indicator of worldwide oil scarcity) sits at $118, up from $75 per barrel in July 2010 – a 57% increase in eleven months. In the U.S., the average price of gasoline is $3.69 per gallon this week, up 37% in the last year and up 100% in the last 30 months.
The pundits and politicians are responding predictably. They blame the Libyan revolution, the dreaded speculators and that old fallback – Big Oil. When the Middle East turmoil began in earnest in January, gas prices had already risen 15% in three months, spurred by increased worldwide demand and by Ben Bernanke’s printing press. Congressmen have reacted in their usual kneejerk politically motivated fashion by demanding that supplies be released from the Strategic Oil Reserve.
Congress has a little trouble with the concept of “strategic.” They also have difficulty dealing with a reality that has been staring them in the face for decades. Politicians will always disregard prudent, long-term planning for vote-generating talk and gestures.
Peak oil has been a mathematically predictable occurrence since American geophysicist M. King Hubbert figured out the process in 1956. His model predicted that oil production in the United States would peak in 1970. He wasn’t far off. In 1971, when the U.S. was producing 88% of its oil needs, domestic production approached 10 million barrels per day and has been in decline ever since.
(Source: http://www.eia.doe.gov/energy_in_brief/images/charts/
Consumption_production_import_trends-large.gif)
The Department of Energy was established in 1977 with a mandate to lessen our dependence on foreign oil. At the time, the U.S. was importing 6.5 million barrels per day. In 1985 the country was still able to produce enough to cover 75% of its needs. Today, 34 years later, the U.S. imports 10 million barrels per day, almost half of what it uses.
President Obama’s 2011 Budget proposal included priorities for the DOE:
That’s what goes on in talk space.
Back on planet Earth, not a single U.S. oil refinery or nuclear power plant has been built since 1977. Decades of inaction and denial have left our energy infrastructure obsolescent and decaying. Pipelines, tanks, drilling rigs, refineries and tankers have passed their original design lives. The oil industry is manned by an aging workforce of geologists, engineers and refinery hands. Many are nearing retirement, and there are few skilled personnel to replace them.
Denial of peak oil becomes more dangerous by the day. The Obama administration prattles about clean energy, solar, wind and ethanol, when petroleum powers 96% of the transportation sector and 44% of the industrial sector. Coal provides 51% of the country’s electricity, and nuclear accounts for another 21%. Renewable energy contributes only 6.7% of the country’s energy needs, mostly from hydroelectric facilities.
Ethanol works nicely as a slogan but poorly as a solution. The ethanol boondoggle diverts 40% of the U.S. corn crop to fuel production. The real cost to produce a gallon of ethanol (tariffs, lost energy, higher food costs) exceeds $7 and has contributed to the price of corn rising 112% in the last year. The 107 million tons of grain that went to U.S. ethanol distilleries in 2009 would have been enough to feed 330 million people for one year.
(Source: http://perotcharts.com/category/challenges/energy/)
The most worrisome aspect of peak oil is that our government leaders have known of it and have chosen to do nothing. The Department of Energy requested a report from widely respected energy expert Robert Hirsch in 2005. The report clearly laid out the dire situation:
The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.
Some of his conclusions:
World liquid oil production has never exceeded the level reached in 2005. It becomes more evident by the day that worldwide production has peaked. Robert Hirsch was correct. The world will have a liquid fuel deficit for decades.
The International Energy Agency has been increasing its estimates for world oil consumption to over 90 million barrels per day by the 4th quarter of 2011, led by strong demand from China, India and the rest of the emerging world. World supply was already straining to keep up with this demand before the recent tumult in the Middle East. The mayhem in Tunisia, Egypt, Libya, Bahrain, Yemen and Iran has already taken 1.5 million barrels per day off the market, according to the IEA.
(Source: http://omrpublic.iea.org/)
The Obama administration and mainstream media continue to downplay the economic impact of the conflagration spreading around the world. The risk that oil prices gush toward the 2008 highs is much greater than the likelihood that this turmoil will subside and oil prices fall back to $80 per barrel. As the following chart shows, the daily oil supply coming from countries already experiencing revolution or in danger of uprisings is nearly 8 million barrels per day, or 9% of world supply. No country can ramp up production to make up for that shortfall.
| Proven Oil | Oil | |
|
Country
|
Reserves (billion barrels) | Production Per Day |
| Saudi Arabia |
265
|
9,000,000
|
| Iran |
137
|
3,700,000
|
| Iraq |
115
|
2,700,000
|
| UAE |
98
|
2,300,000
|
| Kuwait |
102
|
2,300,000
|
| Libya |
46
|
1,600,000
|
| Algeria |
12
|
1,300,000
|
| Qatar |
25
|
820,000
|
| Oman |
6
|
810,000
|
| Egypt |
4
|
742,000
|
| Syria |
3
|
376,000
|
| Yemen |
3
|
298,000
|
The Washington DC spin doctors are now assuring the American people that Saudi Arabia can make up for any oil shortfall. Saudi Arabia has declared it has already turned the spigot on and will produce 10.0 million bpd, up from 8.5 million bpd.
Is this replacement production real? A leading industry expert revealed that the Saudis were already producing 8.9 million bpd in January. Hype and misinformation won’t fill your SUV with cheap gas. Saudi production peaked at 9.8 million bpd in 2005. When prices spiked to $147 per barrel in early 2008, their production grew only to 9.5 million bpd. Saudi oil fields are 40 years old and are in terminal decline. Their “spare capacity” doesn’t exist.
And the media ignore the quality difference between Libyan crude and Saudi crude. Libya’s oil is a perfect feedstock for ultra-low-sulfur diesel. The oil Saudi Arabia will supply to replace it is not. It takes three barrels of Saudi crude to yield the same quantity of diesel fuel as one Libyan barrel of crude, and only specially designed refineries can process high-sulfur Saudi oil.
The problem isn’t just turmoil in the Middle East. The Persian Gulf provides 17% of U.S. imports; 22% comes from Africa, 10% from Venezuela and 15% from Mexico. Many of these countries hate us. Mexico, although a relatively friendly country, will become a net importer of oil in the next five years, as its Cantarell oil field is in rapid decline. They’ll have nothing to sell to us.
The long and the short of it is that sunshine, corn and wind will not keep Americans from paying $5 per gallon or more for gas in the near future. The financial implications are that oil and energy investments will produce solid returns over the coming years.
This article was originally published in the Casey Report.
The two articles below paint a bleak picture for the owners of SUVs, pickup trucks, Hummers and sports cars.
The Arabs are liars. They know that Americans are dupes and will believe any story that makes them feel comfortable. OPEC hates America. They have been lying about their oil reserves for years. They are lying now. Saudi Arabia declared a couple months ago that they would make up for the 1.5 million barrels per day that left the market when Libya erupted in war. It didn’t happen. They have now declared they will produce 10 million barrels per day. One small problem. They can’t. They have never ever produced more than 9.6 million barrels per month and that was when prices reached $140 per barrel. Their oil fields are 40 years old. They are depleting. That is what happens to oil wells. They run out.
You have the biggest producer in the world that can barely increase production (of sour oil) and you have China and India increasing their demand by double digits. Then you have Saudi Arabia spending $150 billion per year on their military as they prepare for a major war in the Middle East. You already have civil war in all the countries surrounding Saudi Arabia. The rumblings about Israel attacking Iran grow louder. Do you think Iran has any missiles pointed at Saudi oil fields and refineries?
Anyone who thinks this Fourth Turning is going to ratchet down in intensity, just ain’t paying attention. When the Middle East explodes, the US economy will blow sky high. When the price of oil hits $200 per barrel, the American way of life implodes. Nothing will work at $200 per barrel. Riots, looting, and general all around chaos will be unleashed. It should be fun.
Reuters Jun 14, 2011 – 8:05 AM ET | Last Updated: Jun 14, 2011 10:20 AM ET
By Barbara Lewis and Braden Reddall
LONDON/HOUSTON — Saudi Arabia’s cushion of spare oil capacity is thinning far faster than widely believed, threatening to trigger price spikes in the months ahead, energy industry experts warned at the Reuters Global Energy and Climate Summit on Monday.
Concerns are growing over the kingdom’s ability to pump more oil beyond an anticipated summer boost, leaving the world exposed to any further unexpected disruptions. The world’s top exporter promised to produce as much oil as the market needs after the Organization of the Petroleum Exporting Countries last week failed to reach a deal.
Saudi newspaper al-Hayat reported Saudi Arabia would boost output to 10 million barrels per day (bpd) in July, which Goldman Sachs’ global head of commodities research Jeff Currie said would leave only 500,000 bpd spare. Currie and his team have warned for months about overstated Saudi output capacity.
“If you get up to (10 mln bpd), you start to really create a very tight market relative to spare capacity,” he told the Reuters Global Energy and Climate Summit in London.
“But the question that’s more appropriate is when do you get to 9.5, when do you get to 10? Because when you start to look out over the horizon, their ability to create more flexibility in spare capacity increases tremendously.”
Peter Oosterveer, group president for energy and chemicals with global engineering giant Fluor Corp, recently met with executives in the Middle East, and returned with a feeling that Saudi Arabia’s capacity was not as large as some estimates.
He did not provide any specific numbers on the kingdom’s overall production, but said workable spare capacity was in the range of 1.5 to 2 million bpd.
“That doesn’t mean to say that it isn’t ultimately available,” Oosterveer said at the Summit. He added that there did not seem to be a great deal of concern in Saudi Arabia about the current level of capacity.
“There’s always a lot of activity in Saudi, and there’s still a lot of activity in Saudi as we speak,” he added, with more focus there on exploration and production projects compared with two or three years ago.
Saudi Arabia is the only country in the world with a significant base of idle capacity, and therefore can act as a supplier of last resort in times of crisis. It has already ramped up output following the halt in Libya’s over 1 million bpd of oil exports, and is expected to pump more shortly.
Following a wave of investment as oil surged to a record high US$147 a barrel in 2008, Saudi Arabia says its capacity stands at 12.5 million bpd, giving it a comfortable cushion based on recent output estimates.
But analysts are still beginning to debate the risk of a repeat of the last decade, when years of underinvestment and a surge in Chinese demand forced OPEC to pump nearly flat out, drawing down their reserve to less than 1 million bpd.
That fundamental tightness underpinned the five-year rally that lifted prices six-fold until 2008. While few expect that to recur as spectacularly, some are warning of spikes.
“Once spare capacity falls below 2 million bpd, which will be sometime next year, then we will see substantial spikes in the oil price from time to time,” Robeco fund manager Peter Csoregh told the Summit.
“There’s an inherent bias, especially in the Middle East and Saudi Arabia, to overstate their spare capacity.”
In a truly alarming development, Saudi Arabia is gearing up for all-out crude oil war in the Middle East.
Right now, the world is in a deflationary state.
While countless other outlets have gone on endlessly about inflation, we have warned repeatedly in these pages that the “D” word is not dead. U.S. Treasury bond yields, a harbinger of deflation, have been falling, not rising. Now the broad markets are falling too.
There is hope that emerging markets (particularly China) will be able to bail out the world, once again, if the West slows down and falls back into a funk. But it is a weak, false hope.
China ginned up the economic juice of recent years through a massive 2009 half-trillion-dollar stimulus program — far, far bigger than America’s stimulus program, relative to the size of the Chinese economy. China can’t do that again without unleashing melt-your-eyeballs inflation.
The Federal Reserve is similarly “out of bullets”… and Quantitative Easing 2 did not help the real economy anyway. So now things are slowing down again, with crisis in the wings. Deflation pressures are back, as monetary velocity threatens to stall out.
All of the above is very bearish for the price of crude oil. It explains why crude oil could fall all the way back to $60 a barrel under the right combination of events, with long-side commodity bulls getting crushed to powder.
But there is one very big reason to be bullish on the crude oil price — or at least not bearish: The Middle East could soon be in flames.
(Don’t forget, you can sign up for Taipan Daily to receive all of my and fellow editor Joseph McBrennan’s investment commentary.)
Did you watch the Lord of the Rings movies? Do you remember the scene where the wizard Saruman is building his subhuman army, preparing weapons in deep fire pits on a mass scale?
Your editor was reminded of that imagery on reading about Saudi Arabia’s latest. The following, via CNN, is from Nawaf Obaid, a Senior Fellow at the King Faisal Center in Riyadh:
As the birthplace of Islam and the leader of the Muslim and Arab worlds, Saudi Arabia has a unique responsibility to aid states in the region, assisting them in their gradual evolution toward more sustainable political systems and preventing them from collapsing and spreading further disorder.
That the Kingdom has the ability to implement this foreign policy goal should not be in doubt – it is backed by significant military and economic strength.
The foundation for this more robust strategic posture is Saudi Arabia’s investment of around $150 billion in its military. This includes a potential expansion of the National Guard and Armed Forces by at least 120,000 troops, and a further 60,000 troops for the security services at the Interior Ministry, notably in the special and various police forces. A portion of these will join units that could be deployed beyond the Kingdom’s borders.
In addition, approximately 1,000 new state-of-the-art combat tanks may be added to the Army, and the Air Force will see its capabilities significantly improve with the doubling of its high quality combat airplanes to about 500 advanced aircraft.
A massive new missile defense system is in the works. Finally, the two main fleets of the Navy will undergo extensive expansion and a complete refurbishment of existing assets.
As part of this new defense doctrine, the leadership has decided to meet the country’s growing needs for new equipment by diversifying among American, European and Asian military suppliers.
Few countries are able to support such considerable military investment, but Saudi Arabia occupies a unique position in that it has sufficient reserves and revenues to carry out the above plans…
Read it again. Consider the implications. Saudi Arabia is preparing for WAR.
Mr. Obaid, taking the Saudi point of view, sees it as a good thing that The Kingdom has the resources to implement “peace through superior firepower” in the Middle East.
But the whole point is that the Saudis see the need to gear up for war in the first place…
The Middle East is a long-simmering cauldron of ancient hatreds and deadly conflicts. The two major players are the Saudis — who are Sunni Muslim — and the Iranians, who are Shia.
Saudi Arabia and Iran hate each other. They are the Hatfields and McCoys of the region, on a far more serious scale.
And Saudi Arabia has good reason to loathe and fear Iran. Were the Saudi power structure to be toppled, that would leave the Sunni branch of Islam decapitated… allowing Shia Iran to dominate.
The “Arab Spring” of uprisings and turmoil is going to lead to war because significant interests in the region want war. They want conflict. The turmoil and uncertainty of toppling regimes has created a golden opportunity. Out of chaos and rubble, new structures can emerge. New power brokers can replace the old.
As the rich player with the most to lose, Saudi Arabia knows all this. And the Saudis are terrified. That is why they are ordering a thousand tanks. That is why they are building “a massive new missile defense system.”
The Kingdom is preparing for local Armageddon. Too bad all that preparation won’t help them, though, because warfare is no longer broad-based and symmetrical. It is more about terrorism and guerilla ambush than full-scale attack.
Except when it comes to one country attacking another in response to a clearly instigated terrorist event… like the destruction of a major Saudi oil facility…
And by the way, because we are talking Middle East here, local Armageddon means global Armageddon (as far as crude oil prices go).
With deflationary pressures building, Western economies slowing, and the China miracle threatening to stall, a spike in crude oil to $200 a barrel as the Middle East erupts in a giant fireball would be just about the worst scenario imaginable for the global economy.
Crude oil spiking to that price would act like a massive non-optional transaction tax. Millions of Americans would lose the ability to fill up their cars with gas. The transport cost of goods would go through the roof. Store shelves would be left unstocked, as the goods became too expensive to shift and a panicked populace had stopped buying them anyway.
It would be nice if this were all a bad dream, or just some fantastical movie plot. But it isn’t. It is very, very real.
What the Saudis are telling us is that, sooner rather than later, the Middle East could explode… and we understand the rationale as to why.
Will you be ready when the price of crude oil goes to $200 overnight? Ready or not, we may have no choice.
