Price inflation starts

The government reports unemployment is under 8% and there is not inflation (Social Security payments remain flat for the second year.)


A quick check in:

*According to the World Bank, the global price of food has risen 36% over the past 12 months.

*The commodity price of wheat has approximately doubled since last summer.

*The commodity price of corn has also about doubled since last summer.

*The commodity price of soybeans is up about 50% since last June.

*The commodity price of orange juice has doubled since 2009.

Think about these numbers! These are astronomical or, at least, they used to be in the "normal" times. We are just starting and you may not really notice what is going on.

Sooner or later, you will listen to me and buy a box of peanut butter. If you can, buy some extra gas and fill up your oil tank at the end of the season. I don't think the decrease in American demand will overcome the deterioration of the dollar.  

Update on Iowa, etc

You remember the Iowa straw poll?  The one Romney won, oh, lost to Santorum.


The latest report is the returns from Ames, Iowa were lost. Eight precincts vanished. Ames, by the way, is Paul's stronghold, at about 50% in the polls.  In addition, there were 131 precincts with erroneous counts. Of note, the delegates have not been selected; I am thinking delegates will be very annoyed.


The next four states to pick delegates will come quickly and they are all caucus states.  


Media coverage will ratchet up regarding the Virginia contest on Super Tuesday.  This race will be the ultimate non-Romney (Paul) goes one-on-one with Romney. Where do conservatives go?  I expect Paul may win. Especially, if he is constantly beat up. This is large state with 37 delegates. 


Apparently, and who can figure these things out, Santorum and Gingrich are mathematically unable to win. They are not in several states. Gingrich purposely avoided Missouri.  


Final tidbit. Delegates are released after one vote at the Republican Convention. Now, that will be interesting. Just like the old days, as I expect we will not see a winner on the first ballot.


I can can visualize the floor rallys, now.

Semper Paratus

Geroge Soros agrees with me. Physical survival is the mandate for the near future. He posits a "brutal" clampdown on American liberty. 


Generally, Soros generally says the opposite of what he is doing, such as announcing last year he is selling gold. He says things to divert criticism, however, the recent concern goes beyond general hustling. Saying survival is key, now, is quite a new thing for him to opine.  Then again, he may be laying groundwork for a future denial of culpability. You decide; however, recognize the level of published concern.

Return to the Article

January 26, 2012

Slouching Toward Armageddon with George Soros

Neil Snyder

George Soros, the billionaire investor and funder of radical leftist causes around the globe, believes that the world is going to hell in a handbasket, and this time I agree with him.  That's not to say that Soros isn't interested in making more money.  It simply means that he thinks the likelihood of global chaos and the concomitant violence that it will engender is greater than the likelihood of making fast money in gold, for instance, which he considers to be the ultimate bubble.

In The Daily Beast, John Arlidge wrote:

Has the great short seller [George Soros] gone soft? Well, yes. Sitting in his 33rd-floor corner office high above Seventh Avenue in New York, preparing for his trip to Davos, he is more concerned with surviving than staying rich. 'At times like these, survival is the most important thing,' he says, peering through his owlish glasses and brushing wisps of gray hair off his forehead. He doesn't just mean it's time to protect your assets. He means it's time to stave off disaster. As he sees it, the world faces one of the most dangerous periods of modern history-a period of 'evil.' Europe is confronting a descent into chaos and conflict. In America he predicts riots on the streets that will lead to a brutal clampdown that will dramatically curtail civil liberties. The global economic system could even collapse altogether.

I'm a realist, not a hysterical conspiracy theorist looking for boogiemen around every corner, and like Soros, what I see chills me to the bone.  For instance,

• China is on the rise economically and militarily, and Chinese leaders are anxious to solidify their country's position as a global power. That means eventual conflict with existing global powers that has the potential to result in bloodshed.

• Russia is back from the brink after having abandoned radical socialism in favor of pseudo-capitalism, and Russian Prime Minister Vladimir Putin wants to play an important part in global geopolitics. Per usual, he is positioning Russia to engage the West -- especially in the Middle East.

• Turkey and Iran have grand designs for achieving hegemony over the Middle East and re-establishing the Ottoman and Persian Empires, respectively. Both countries can't succeed, and the battle to determine which country wins is just getting underway.

• North Africa is a powder keg, with Islamists on the verge of taking complete control economically and militarily. Given their suicidal tendencies, that is not a harbinger of good things to come.

• Europe is in total chaos. The eurozone that was supposed to position Europe to compete effectively with the United States and China, in particular, is coming unglued as country after country comes to grips with the reality that the European style of socialism can't be sustained.

• Latin America is becoming a political sinkhole, with the likes of Venezuelan President Hugo Chávez taking control and doing their utmost to infect the world with Cold War-era populism/socialism.

• The United States is in the early stages of class warfare that has the potential to turn ugly in a heartbeat, and President Obama is stoking the fires of hate and envy with his rhetoric and his policy maneuvers in hopes of being re-elected.

• Last but not least, Islamists are ascending around the world, and Jewish people in general and Israel in particular are their immediate targets. Islamists have made it clear that they want to rule the world and impose sharia law, and they haven't been shy about saying that their first order of business is to eliminate Israel.

We are in the throes of a breakdown of the existing world order and a global struggle to determine what comes next.  Will it be a totalitarian Islamist world under sharia law -- a one-world caliphate, if you will?  Will it be a resurgence of Western political philosophies and liberal democracy?  Will it be a world governed by global economic and military powerhouse nations such as China and the United States?  Will it be a strengthened United Nations with taxing and enforcement powers?  No one knows for sure what will happen next, but these things are certain: political vacuums don't last for long, and historically, wars have decided what world order eventually comes into existence.

Under these conditions, Soros' concern about survival makes perfect sense.  The first order of business is not to see how much gold and silver, for example, you can accumulate before you die.  Job One is to stay alive.  In practical terms, that means two things:

1.      You need food to eat and water to drink, and

2.      You need weapons and ammunition to protect you and your family in case the worst happens. 

I'm being very candid, so I want to remind you once again that I am not part of the lunatic fringe.  I'm simply examining the evidence, trying to make sense of what is happening, and preparing for what looks like a realistic scenario -- something that could actually happen. 

Let me be perfectly clear.  I am not suggesting that you should sell everything you own and buy guns, ammunition, and non-perishable food items, but I am suggesting that you should begin to accumulate all of the things that I just mentioned as though they were a part of your investment portfolio.  You need enough food and water to keep you and your family alive in case violence erupts and the channels of distribution for foodstuffs are disrupted.  You need guns that you can use in case you and your family are attacked and you are forced to defend yourself.  You also need to know how to use them.  You need enough ammunition to fend off a mob in a prolonged engagement in case you and your family are attacked, because guns are of no value without ammunition.

Again, I'm not betting on the worst-case scenario, and I'm not saying that it is inevitable, but I am cognizant of reality, and I'm preparing for what could happen.  Proverbs 22:3 says, "The prudent sees the evil and hides himself, but the naive go on, and are punished for it."  A wise man prepares for what might happen.  That's what I'm doing, and I suggest that you do the same thing.

Neil Snyder is a chaired professor emeritus at the University of Virginia.  His blog, SnyderTalk.com, is posted daily.  His latest book is titled If You Voted for Obama in 2008 to Prove You're Not a Racist, You Need to Vote for Someone Else in 2012 to Prove You're Not an Idiot.

Page Printed from: http://www.americanthinker.com/blog/2012/01/slouching_toward_armageddon_with_george_soros.html at January 26, 2012 - 08:52:38 PM CST

Grab a rock near the edge

The WLI indicator seems the precise indicator to the movement of S&P, or stocks in general. One must allow for emotional reactions, of course, but the trends are dead on. The WLI, World Leading Indicators, is from the Economic Cycle Research Institute. 

The WLI has already hit the -10 level of past recessions. It did so in a fast run down. To the left is the 2008 financial meltdown. Then the WLI went to -30! One can project without any brains, at all, that the green line is coming down (after suckers buy stuff.) Of interest, is mid 2009, it looks like the GDP and PR kept the S&P up.  This makes sense after the wipe out of 2008. Things seemed better. Look at the GDP now.


Then, there is

Chips companies live in cycles, but the month by month and average changes indicate a large cycle. Another green line that will fall. 

Another item to consider is the combined North American rail volume of last week, compared to a year earlier is down 4.%!  Trailers and containers on the rails is down 8.8%!

The ECRI (graphs above) has projected a recession is inevitable. 

The coming recession, of course, will not be a "normal" cyclical one, as we are watching Europe collapse in slow motion, China is having difficulty, and our president transfers your children's money and blocks the 40,000 jobs of the Keystone XL pipeline. Sometime, in the not distant future, our money will begin its inevitable decline and our interest rate, accordingly, will rise. At that point, foreign investors stop buying our Treasury Bills (last warning) and the emperor will be standing in the parade, suddenly aware he has no clothes. 

I have mentioned ways to defend yourself. It is now "post time." Doing nothing may result in extreme loss. If you insist upon keeping your 401k and IRA, then find investments that are removed from the U.S. Dollar. You may not be able to as the government wanted to keep your money prisoner, in the self-dealing hands of Wall Street. You are paying much of those big bonuses that anger you.


If you can, liberate your money and use it to buy solid property - a solid future. 

 

World Snapshot

In a CBS MarketWatch piece today you will find a warning of big shot Gary Shilling.  Shilling is great on the downside.

He notes, among other items, that Europe entered a recession last quarter, that Germany had a negative GDP last quarter, and that China is scurrying around as it sees trouble ahead (however, it is a drop in growth rather than a negative).

2012 was projected as one a major world-wide recession where the U.S. will not have as extensive a recession as one matching the U.S. in 2008.

I captured the chart below to simply catch what is going on. The ETF's listed represent, almost exactly, major stock exchanges.  It is a very good snapshot. It is like understanding your golf swing by seeing it in stop action rather than trying to judge it by one good drive.

Symbol	Price	Change	52-Wk
USA (SPY)	130.77	+1.11%	+3.08%
S. Africa (EZA)	65.18	+3.21%	-6.03%
Canada (EWC)	27.63	+1.25%	-10.43%
S. Korea (EWY)	55.21	+1.64%	-10.90%
Lat.America (ILF)	46.28	+2.82%	-11.45%
China (FXI)	38.32	+1.86%	-11.70%
Singapore (EWS)	11.78	+1.38%	-12.37%
Japan (EWJ)	9.26	+1.20%	-15.45%
Israel (ISL)	13.45	+0.90%	-17.87%
Taiwan (EWT)	12.33	+1.48%	-18.11%
India (IFN)	21.61	+1.12%	-30.98%
Russia (TRF)	14.70	+1.94%	-43.29%

The point of the exercise is to show, first, a current happy face in most markets, then, second, a horror face for the last 52 weeks.

In the U.S. the media promotes a happy face. Gee, things look good. (Not to worry even if Kodak is bankrupt and Google fell 8% yesterday upon a large profit drop.)

A quick look at the rest of the world demonstrates why the U.S. market was up. Where else are you going to go?

As it turns out, money will find somewhere else to live when the neighborhood is on fire. It will leave when the administration promoted future inflation begins.  Smart money will just leave; sleepy American money will devalue as it also loses principal in a 401k.

When you see a Treasury Bill auction generally ignored (and the last one was not a happy face), it is time to get out of the boat, buy ammunition, and store peanut butter.  Of course, the government runs a Ponzi scheme and they buy the bills to con others into thinking there is no problem. What eventually wins is the interest rate vs. risk (including inflation.)

When the music stops and everyone sits down, the your money (in dollars) will be left standing. It is inevitable. It is planned. On a really bad day, you will not be able to go into a bank, ATM, or other Big-Brother controlled financial system. (VP elect Biden predicted this was likely back in 2008!)

A typical trick, at this point, has been to revalue the currency without warning.

Recall the epigram about those who do not study history....

An Argument for the Ron Paul counterrevolution

A long essay: take the time to read it when you are able.

So much for my goal of short pieces, but this is important

An excerpt from They Though They Were Free, The Germans From 1933 to 1945, Milton Meyer:  

But Then It Was Too Late

"What no one seemed to notice," said a colleague of mine, a philologist, "was the ever widening gap, after 1933, between the government and the people. Just think how very wide this gap was to begin with, here in Germany. And it became always wider. You know, it doesn’t make people close to their government to be told that this is a people’s government, a true democracy, or to be enrolled in civilian defense, or even to vote. All this has little, really nothing, to do with knowing one is governing.

"What happened here was the gradual habituation of the people, little by little, to being governed by surprise; to receiving decisions deliberated in secret; to believing that the situation was so complicated that the government had to act on information which the people could not understand, or so dangerous that, even if the people could not understand it, it could not be released because of national security. And their sense of identification with Hitler, their trust in him, made it easier to widen this gap and reassured those who would otherwise have worried about it... 

"To live in this process is absolutely not to be able to notice it—please try to believe me—unless one has a much greater degree of political awareness, acuity, than most of us had ever had occasion to develop. Each step was so small, so inconsequential, so well explained or, on occasion, ‘regretted,’ that, unless one were detached from the whole process from the beginning, unless one understood what the whole thing was in principle, what all these ‘little measures’ that no ‘patriotic German’ could resent must some day lead to, one no more saw it developing from day to day than a farmer in his field sees the corn growing. One day it is over his head.

"How is this to be avoided, among ordinary men, even highly educated ordinary men? Frankly, I do not know. I do not see, even now. Many, many times since it all happened I have pondered that pair of great maxims, Principiis obsta and Finem respice—‘Resist the beginnings’ and ‘Consider the end.’ But one must foresee the end in order to resist, or even see, the beginnings. One must foresee the end clearly and certainly and how is this to be done, by ordinary men or even by extraordinary men? Things might have. And everyone counts on that might.

"Your ‘little men,’ your Nazi friends, were not against National Socialism in principle. Men like me, who were, are the greater offenders, not because we knew better (that would be too much to say) but because we sensed better....

------------------------------------------------------------

Principiis obsta — Resist the beginnings 

Finem respice — Consider the end. 

------------------------------------------------------------

I titled this entry with reference to Ron Paul and what I call the counterrevolution, as we have already lost the nation to a long-term subversive revolution.  


I am not a Paulist with respect to the election game. There is a marginal chance he will be the GOP candidate, thought the year is shaping up in an interesting way, and Paul knows that. The cry of "electability" is inane; it is a cry against theory in favor of mob rule. It is a dismissal of republic in favor of democracy - the end of our nation.  


It is better the power structures realize they better adapt to the people rather than assuming the people will choose sides in the election game. They realize this by losing their own voters. Only then, do the "leaders" deign to pay attention to the masses.


Paul would be amazed if he actually won - he is leading a philosophical movement. It is important we all understand why he is doing that.


I am a Paulist with respect to the strategic push in the campaign: a cry that we had better return to the Constitution and the decentralized government. The cry is finally being understood - no one knows if it is in time. Any GOP candidate who merely cuts the government around its edges is a useful idiot who will carry us all down. 


Analogies hardly work anymore. Let us try this: your entire house is on fire, your garage is on fire and there are explosive chemicals in there. You have a choice: vote for a neighbor who insists the right thing to do is cancel you insurance or a neighbor who thinks you should move your car. Voting to move the car is a fool's vote, a Hobson's choice that is silly.


The distress over Paul's "foreign policy" is a symptom of how we have been trained to react with fear - the ultimate tool of control.  Paul says the Congress must declare war and the President act upon that direction. This is our law, but to say that is somehow "kooky." There is no legal argument offered, just a reaction found in fear - kill the enemy before they kill us, whoever you say they are.  We ignore the fact that we cannot afford anything, let along wars all over the world, because we convinced we are in a survival scenario.


Paul is perfectly happy with signing alliances with foreign friends, the correct tradition, but we are trained that the President can do what he wants. Both parties claim the authority given to the president to act under the War Powers Act is unconstitutional - both parties use it. The process of law must precede the obtaining of a desired result. Merely justifying means to reach an end is tyranny.


Of note, Paul has said the current leader of the Mosad and his predecessor do not think Israel under an existential threat.  On the other hand, our media makes a clear understanding impossible. At the same time, we are told that we need to arm (or something) to defend an Israel by having them take our money to buy our arms, as we tell them, and leftists leaders in government dislike them as the evil doers of the world.  

The Story of Your Enslavement

As a people, we are being used by the Muslims, leftists, and oligarchs. Recall a blog entry of two or three years ago where I noted the jailed "Jackal" wrote in an article the left must align itself with the Muslim terrorists for the time being. Do you see the ongoing game?


Our enemies use our presence in their lands and our blundering actions as a way to increase their power, which, in turn, result in our being told we need to ratchet up our foreign interference, without that ever being identified.  It is a vague notion of hyper-vigilance. This point-counterpoint is the history of man and, I suppose, America was not vigilant in keeping our nation a republic, so we have entered the flow of warlord history. We have a minor chance of waking up.


We are serfs being told the Muslims threaten us, so we go off on righteous crusades. This, in turn, results, as in the past, in active animosity layered on cultural and religious jingoism. The traditional war of the crusades turned into centuries of anger because of the leaders of the crusades had little to do with God.  God was for the serf to believe in as they died on the battlefields. 


Follow the spiral of reactions: the "end" is a police state and never-ending war.  We went through this with the false crusade against Russia. My proof of this is Michael Moore's film Canadian Bacon. 


I just removed a section concerning Russia and the United States and the use of escalating fear on both sides to control people, history, business. Too long. As President Nixon pointed Russia's underlying goal for hundreds of hears was to create a buffer zone around itself. It did and we reacted by placing armored divisions in Europe. The Russian leaders were not communists, they were oligarchs protecting power by manipulating people's fear.


The U.S. is controlled by the "military industrial complex" as described by President Eisenhower. It is also under the control of oligarchs using leftists. (A democratic socialist Congressman recently said Obama was not a socialist, he was a neo-liberal oligarch, which is new term to me, but I understand it.) The complex fanned the fear as well. The two sides played a game of ping pong - serving fear to one another.  Of course, both sides actually took forceful and deadly actions, but those were tactics in a bigger game. 


Russia agreed to remove its missiles from Cuba, if we removed them from its border in Turkey. That was the desired result. They won and we fell into a self-congratulating prattle about staring them down. Few even know we pulled our missiles which were on the doorstep of Russia.  We assumed we were so cowboy that Russia backed down. I should mention the oligarchy relies on the media.


The use of fear continues. The Arabs use it as a cultural gesture, such as Iraq making believe they had weapons of mass destruction. This is a stupid gambit where the enemy is vastly larger and well-trained in reacting to fear.  Iraq did use gas, of course. You can't discount dictators - a major problem. 


You will notice, these days, we take seemingly insane actions against foreign nations and "terrorists" which now means anyone the government decides it does not like.  We have recently put a few troops in Australia now to defend.....?????


The founders completely understood how oligarchs take control: fear, monetary policy, and centralization. We have lost the simple understanding of the Constitution an how it protected us from all assaults. We accept imperial actions of a government that is aloof. A government that is intent on dumbing down the people and ignoring the Constitution.


I will curtail this thread, here, and merely plead that you listen to Paul and understand what he is saying. It is profound, logically consistent, and is likely our last hope. As for the election - focus on state and school board elections. This is where the counterrevolution must take place. If you motivate people to take back their school boards in an election, the other races will take care of themselves.


Over dramatic? Reread the excerpt about Nazi Germany. 

Old Farts

I have been away in Canada and then busy after returning.  I will add blogs from time to time, hereon.  My 2010 mission it to be terse. Where there is a detailed logic to apply, I will link to places where people are sufficiently in agreement with me; hence, generally correct. 


So, now to digest an important economic factor: old farts. Click the title to see the foundational observations in Seeking Alpha. 

•  The wealth gap between those under 35 and people over 65 is at an all time high of 46 to 1.  (The last I saw, it now takes fewer than 3 workers to support 1 Social Security beneficiary. Clearly, this system, as it is, is done though the socialists in charge have no idea what this means, if they even care.)

•  In Japan, 33-60% (depending on the survey) of Japanese youth between the ages of 25-34 either do not work or marginally survives on low wage jobs. The social contract to care for seniors cannot be met. A yen crisis is looming as this impasse will be cured by the hand of reality.

•  Assets will be sold off to meet estate requirements adding to the supply of "expensive" property, that is, property that the young cannot afford.

•  Assets will be sold off by older people not interested in watching inflation and confiscation steal the results of a lifetime of work and investment. (Even selling at an apparent "loss," will not matter where there is a significant profit over time. Normal rules of economic patters will be distorted.

•  The liquidation era will alter economic models. For example, the liquidation may be the reason people have continued to buy treasury bills though they are not a good investment in the traditional sense which gives a false sense of security.   

The supply of homes available will continue to expand, prices go down, real estate tax follow, government "employees" will be fired, etc etc. 

Banks will want to lower borrowing rates, but eventually inflation will prevent that. This will cause housing prices to drop quickly as a selling fear takes control of the gloated market. Few people will qualify to borrow. etc. 

Assets freed from homes, 401k accounts, and stocks will find new homes, but will not be "investments" designed to take a risk in order to produce new capital; they will be put into passive income vehicles, gold and silver, or foreign investments at a rate not seen before in the United States.  The wealth of the nation will concern itself with a shrinking pie while looking to the shrinking worker pool to fund social security. The Obama people will cause a transfer of wealth, but in a way not intended nor understood.

Of course, money being returned into real estate and hard savings may be a good thing in the long run, but it will cause a shudder in our economic structure.

So, as formal lawyers will add at the end of a warning letter: "...govern yourselves accordingly"