Class Envy...

...is sick. Envy is one of the least becoming human traits, and by way of intellectual laziness we have allowed it to become a sharp sword for the political left.

Fact is, there isn't a person out there who wouldn't be thrilled to strike it rich or to win the lottery and thereby join "the rich." Even those few who would reject the lifestyle would happily take the money for the good (or ill) they could do with it.

Wealth is morally neutral. Wealth is also one of the natural outcomes of Liberty and should be revered as such. Class envy - class baiting, if you will - is no more respectable than any other kind of baiting or envy. It's not bank balance but the content of one's character that should occupy us.

This is one of those things that embarrasses the left, when we bother to hold it up for honest examination. Let's do exactly that!

Go Forth and Nullify!

It was Edmund Burke who observed that "Bad laws are the worst sort of tyranny." It's easy to see the course we're on in America - a path of very bad laws and even worse tyranny - which means we, the people need to step our game in every way we can.

When laws turn against our Liberty, it's unpatriotic to obey them. This quote from Thomas Jefferson says it best: "A strict observance of written laws is doubtless one of the highest duties of a good citizen, but it is not the highest. The law of necessity, of self preservation, of saving our country when in danger, are of higher obligation. To lose our country by a scrupulous adherence to written law would be to lose law itself, with life, liberty, property and all those who are enjoying them with us; thus absurdly sacrificing the end to the means."

Just this week another friend mentioned that she had been summoned to jury duty - a chore that meets with almost universal scorn these days. She had originally intended to try to get out of serving, but I think she changed her mind as we talked. I spent a few minutes teaching what I understood about the role of the juror, and particularly the juror's power to nullify bad laws. She had never heard of the concept of jury nullification, but promised to Google the subject and to go in and serve.

I searched the topic myself and came up with this, right from our own Federal Appellate Court: "If the jury feels the law is unjust, we recognize the undisputed power of the jury to acquit, even if it's verdict is contrary to the law as given by the judge, and contrary to the evidence. If the jury feels that exigent circumstances justified the actions of the accused, or for any reason which appeals to their logic or passion, the jury has the power to acquit, and the courts must abide by that decision." - From a ruling by the 4th US Circuit Court of Appeals (US v. Moylan, 417 F.2d 1006, 1969)

I e-mailed that ruling, along with this quote: "The primary function of the independent juror is not, as many think, to dispense punishment to fellow citizens accused of breaking various laws, but rather to protect fellow citizens from tyrannical abuses of power by government." Think about this, and say a prayer of thanks that the Founders gave us this priceless means of holding government accountable.

Anyway, I pointed out to her that it's a tyrannical abuse of power to post artificially low speed limits, then hide in bushes and write costly speeding tickets to people who are doing nothing unsafe. She agreed, and recounted a couple other recent instances of local petty tyranny that had bothered her. I then told her that ALL gun laws are unconstitutional, as they ALL infringe on our right to keep (own) and bear (carry) arms, and that if we need permission to exercise our rights, to in effect be free, then we're not! She saw the point. We'll see how she does next Tuesday! If there's anything noteworthy, I'll report back.

We should serve on juries at every opportunity, and we should spread the word about this power of the people over the government. They're rapidly seeing to it that we'll ALL be criminals, so we'd best ALL become wise jurors! That, of course, would lead them to try to modify or eliminate our right to jury trial, which is another inviolable line in the sand. There's a lot of power in forcing them to declare themselves in ways like this!

Here are our choices: We either serve as citizens in annoying and inconvenient little ways such as jury duty, or we serve as serfs in the New World Order. Those are our options...

I learned a lot at The Fully Informed Jury Association and you will too.

Go forth and nullify!

Revenge of the Octogenarians

Little did I know what awaited this afternoon as I stopped at a local hardware store to have a key made. Two old guys were standing just outside the door, and as I walked past one was saying "I have enough ammo to shoot every Democrat I know." He was so angry he was shaking.

An American! I'd stumbled on an American! I felt the thrill of discovery and such a wave of relief that I almost burst out laughing...

They were gone when I came back out. Crud! I would have bought them both coffee just to revel in their company for a few minutes. As I drove away I reflected on the experiences those old guys had lived through - from the Great Depression to World War II, the atomic bomb, the 60's, Viet Nam, Carter, the Reagan years, then through Clinton and now the Obamanation - from raising kids, to grandkids and probably great grandkids to watching the country they loved - and no doubt fought for - now being destroyed.

Poignant. Really poignant. I'm not ashamed to admit started to tear up a little at the thought. After all, this was America, which was once a free country. No wonder he was so pissed...

Forget the garden-variety democrats and save your ammo for the blue helmets - and may God bless you! You made my day, you old coot!!

Taxing The Wealthy (or "Who Really Pays Taxes Anyway?")

The messiah wants us to believe that we can have "free" health care, painless pork and massive bankster bailouts simply by turning him loose to tax the wealthy. This pitch only works on the economically illiterate, who I don't really expect to be reading this. I'm preaching to the choir, I know, but if you've never crunched them, the hard numbers are fascinating. I hope they make good ammunition for you.

The rich don't have anywhere near enough money to feed our ravenous leviathan government. If you confiscated Bill Gates' entire net worth (I'm using the $58 billion figure from Forbes last year) it would pay for just six days of federal government under Benito's 2010 budget. Six days! In fact, if the government took every last penny from the Forbes 400 wealthiest individuals (2008 figures) there would not be enough money to eliminate next year's proposed deficit!

That's right - one year's federal deficit is now more than enough to wipe out the 400 wealthiest people in America! If anyone was destructive enough to actually do this to the wealthy, the immediate impact on employment would be devastating. I believe it would usher in a much deeper depression than we suffered in the 1930's.

Fact is, everyone's income is down - even the wealthy. Everyone's net worth is shrinking. If you raise taxes on the wealthy at a time like this, you are not just keeping new jobs from opening up - you are destroying existing jobs that would otherwise be perfectly stable. Private sector jobs only exist (and new ones are only created) because there's a demand for the goods produced or the services rendered - in other words, there's money to be made providing for the needs and wants of others. Those demands tend to be ongoing, so a private sector job created is usually a permanent addition to the economy. (At least that's how it works if you're smart enough to not screw up the economy!)

On the other hand, new government jobs tend to be the result of an added imposition on society - a additional and often perpetual burden. The money to pay these workers isn't earned in a win-win voluntary exchange - it has to be forcibly taken from the people who actually produce! This extraction must recur year after year if that government worker is to remain employed. Thus it is that economically literate people cringe at the claim that government creates jobs.

Deficit spending increases the national debt, which increases the interest payment on that debt, which is paid with your income taxes. Last year, interest on government debt was enough to eat up all the income tax we paid! Then there's inflation - the cruelest tax of all. Inflation is what you get when you print up more fake dollars and add them to the existing supply of fake dollars, and it's how you get away with taxing the daylights out of the middle class without them catching on to who's robbing them.

As the burden of government grows, we pay a lot more than just taxes for the show. Every job not created is a cost borne by the middle class. Every regulatory expense imposed on business must be passed on to consumers or that business won't survive. Larger deficits are a given as government grows, meaning higher taxes and soaring inflation. Those taxes crush the economy, and rampant inflation robs entire generations of their efforts, investments and retirement.

One way or another, these costs are passed along to the consumer - in the form of higher prices paid, opportunities lost and Liberty extinguished. It's a mathematical fact that one way or another the consumer pays for everything. No exceptions. Everything.

If only the populace would figure this out - we could solve our problems at the ballot box!

Another day in the neighborhood...

Headlines:

DOW closes down nearly 2% - the worst February since 1933 - now down 50% since all-time high in 2007. (The NASDAQ hit the 50% level day before yesterday, the S & P fell to that mark last week.)

S & P closed down over 2% on the day - its worst February ever and an 11 year low.

Economy shrinking at fastest rate in nearly three decades - Commerce says "oops" - GDP actually declined at 6.2% annualized in Q4 '08 rather than the 3.8% reported earlier this month.

Citigroup essentially belly-up - - about to be nationalized.

GE cuts dividend - by 2/3 - the first cut since 1940.

Prechter of Elliott Wave International predicts deeper bear market and tougher economy than the 1930's.

"Other than that, Mrs. Lincoln, how did you like the play?"

John F. Kennedy

"Those who make peaceful revolution impossible will make violent revolution inevitable"

Being right ain't necessarily a source of joy...

...and if you think I like watching this mess unfold you're sadly mistaken.

All this because I'm on record as pessimistic about the economy since 9/11, and on record predicting the collapse of real estate in 2002. (Premature prognostication!) Taking this in, a friend just accused me of actually reveling in this mess of ours - which is absolutely not the case. Alarmed? Yes. Enjoying myself? Not in the least.

I'd much prefer to be engaged in pursuits of my own choosing, but the damage done daily by government (not to mention the damage proposed) compels the attention of any thinking person - almost to the exclusion of everyday life. To have our nation deliberately harmed, our remaining Liberty stolen - not gradually but boldly, deliberately, rapidly...

(Just how do we describe the folks who can ignore current events? What of those who welcome them? Now there's a topic!)

As I said, almost to the exclusion of everyday life. Almost, but not quite! Just step back and learn from this - it should be obvious by now that placing any meaningful faith in man is a seriously flawed approach to life. Put your faith in God and you'll find real peace - even in this troubled earthly existence.

While times are certainly tough, you can enjoy yourself fully despite the circumstances. We're incredibly, richly blessed in America, and our blessings can be counted daily - even hourly, regardless of what our corrupt politicians are doing at the moment.

Our blessings abound. If you need to, make a list! Then, give thanks...

Hardcore!

Bill and Hillary were fairly alarming, but they were pikers compared to Benito Husseinolini Schickelgruber Mugabe Obama.

This new dude is hardcore! Fast track deficit spending/destruction of the economy. Fast track socialized medicine. Fast track domestic intrusions. Fast track gun control. Fast track carbon taxes. All in all, a fast track police state!

Pay attention!! We're witnessing an EVENT - a power grab of revolutionary proportions. Pay attention!! This is history in the making, and we should savor (not as in enjoy, but as in being fully aware) the significance of this moment as the pivotal event it is. Pay attention!! Succeed or fail, this one will be recorded for future generations to study - either as a socialist triumph or a restoration of Liberty. Pay attention!!

The day no decent person wanted is upon us - do we fight to stay free or do we go down with a whimper? Remember, the winners get to write the history!

An Obituary

Fooled. We were fooled. All the while we thought the anointed one was channeling Mussolini, he was actually busy cloning Robert Mugabe with a few Hitler genes thrown in - sort of a GMO tribal kleptocrat who tastes like chicken (or at least sounds like one) but with a bitter NAZI aftertaste!

This is America's "National Socialist Mugabe Moment."

Why do I say this? Simple - Benito's budget proposal is out, and it literally spells the end of America as we know it. This is an intensely ideological budget, designed to transform the country from the last vestiges of our Constitutional Republic to a totalitarian socialist state. Over three trillion in spending, HALF of which is deficit. That's right - a $1.75 trillion deficit! Further trillion dollar deficits are projected for subsequent years (on the off chance we're still around after this crushing blow.)

On top of the predictable taxes, there are more subtle taxes designed to alter the American landscape. A good example is the proposed tax on "the wealthy" by way of reduced charitable deductions, which translates into weakened charity/strengthened government!

Then come the sledgehammer blows: This budget counts on hundreds of billions in new carbon tax revenue, by way of government auctions of carbon credits to industrial users of energy. Apparently this is how they pass their gun control and new tax schemes - just include them in the budget and they become law!

This carbon scam extinguishes the last glimmer of hope for American industry by guaranteeing an additional permanent cost burden on American companies. Advantage: China & India - who get the rest of our manufacturing jobs if this deal goes through!

If he can't pull off this carbon scam, wanna bet the spending happens anyway and the deficit will handily exceed two trillion? This means a slower death by inflation - the inescapable "backup" fate that awaits us should we muddle through the short term.

If he can pull off the carbon tax, well, we'll die a much faster death. There's simply no way hundreds of billions in new carbon tax costs can be added to the price of goods and services without consumers simply saying "no" - something we're doing already. Add this to food costs and I'm growing a BIG garden. (Goodbye farmers, who use hydrocarbons intensively.) Add this to the price of gas and cars and I'm buying used and driving very little. What the heck - I'll be busy in the garden anyway. (Goodbye Detroit, car dealers and a lot of gas stations.) Add this to the price of a TV and I simply won't replace this one when it dies - I'm sick of their faces anyway! (Goodbye electronics industry, goodbye Hollywood, goodbye broadcast news. Hello radio, in all your fairness doctrine splendor!) The few goods I'll buy will have to come from the cheap labor third world, which of course won't be paying a cent in carbon tax on their use of energy.

If the carbon scam becomes law, look for massive layoffs, business closures and a rapid-onset depression. A MASSIVE depression, triggering widespread unrest followed shortly by a police state.

Exactly what they want - total power!

Referring to this carbon tax scheme during the campaign, Benito stated "utility bills would necessarily skyrocket." He meant homes as well as industry - I believed him then and I believe him now. If this comes to pass - if utility bills triple, quadruple or worse, then this essentially ushers in a new dark age - a pun I quite sadly intend.

I couldn't find that "skyrocket" clip, but here's an instructive montage:



No one is stupid enough to believe this will help America. This atrocity is actually the deliberate destruction of a country from within. Metastatic nanny state socialism, high levels of taxation and deficit spending spells the end of the American economy, the dollar and of Liberty. The only possibilities then are a regional/global currency or utter collapse.

If you wonder why gun control is being fast tracked, it's simple - they can't risk doing this to an armed populace!

America - 1776-2010 - Bled out, died of a thousand cuts.

May She Rest In Peace

Surprise, Surprise!

Benito's pet anti-gun totalitarian Attorney General Eric Holder has weighed in on the administration's plans for renewing the "assault weapons ban"...

ABC News Story

"The Obama administration will seek to reinstate the assault weapons ban that expired in 2004 during the Bush administration, Attorney General Eric Holder said today."

And the NRA types thought this wouldn't happen in the Obamanation.

"As President Obama indicated during the campaign, there are just a few gun-related changes that we would like to make, and among them would be to reinstitute the ban on the sale of assault weapons," Holder told reporters.

Holder said that putting the ban back in place would not only be a positive move by the United States, it would help cut down on the flow of guns going across the border into Mexico, which is struggling with heavy violence among drug cartels along the border."

I guess they really want to help disarm Mexico at the expense of American rights. Sure. This, since Mexico's been such a good neighbor over the years??? Right. What they need in Mexico is armed rebellion. They need to throw the corrupt bastards out and start over.

I have a novel idea - let's close the border! That will solve all of Mexico's alleged "problems" with us, not to mention our problems with them. If I were president (heh!) I'd take care of that problem by this weekend, for free, using citizen volunteers (a militia - fancy that!) with their assault rifles in hand, to do the job.

Particularly telling is Wayne LaPierre's tepid response to Holder's announcement: "A semi-automatic is a quintessential self-defense firearm owned by American citizens in this country," LaPierre said. "I think it is clearly covered under Heller and it's clearly, I think, protected by the Constitution."

He thinks. We need to identify the people who know, and get behind them! Here's a start:

JPFO

GOA

Another Back Door Assault on 2nd Amendment

Kudos to the JammieWearingFool for picking up on this threat against the Tiahrt Amendment, looming in the soon-to-be released Obama budget proposal.

JammieWearingFool

One truly wonders if the Dems are in any way capable of learning from their own history. It was just one Clinton ago that they gave birth to the constitutional militia movement with their machinations to disarm patriotic Americans and socialize medicine. Over these very issues they got themselves deservedly thrashed in the 1994 congressional midterms. Now we get Eric Holder and this kind of mischief. The next congressional midterms offer little hope as far as gun rights are concerned, so one wonders where people will focus their ire this time around. Messing with people's Liberty is a dangerous thing, particularly when the ballot box provides no real hope.

Armed people who basically want to be left alone seem like good citizens and ideal neighbors to me, but then I don't run a meddling nanny state so what could I possibly know about good neighbors?

A Rock'n'Roller's Thoughts on Government...

"Five Year Plans and New Deals,
Wrapped in golden chains,
And I wonder, still I wonder
Who'll stop the rain?"

- John Fogerty, Creedence Clearwater Revival

This song sparked a political awakening in me at a rather tender age. When I first heard it, I asked my dad what five year plans and new deals were. He laughed. I bought the record and played the song for him. He smiled that wise smile of his and said "let me tell you how the world works..." Which he did. It fascinated me that people could be fooled over and over again like that.

This was the conversation that sparked my interest in history and my eventual passion for limited government. It occurs to me that most if not all thinking people must have an "a-ha" moment like this regarding government power at some point in their youth. The difference between folks like me and folks like our politicians is that upon figuring out what that power is I was repelled by it, whereas they changed course to pursue it.

Morality (or amorality) is something God must hardwire in us, because I was able to make the moral choice long before I really understood the other path. Morally, of course, such power shouldn't be available to anyone at all. That was the beauty of America back when it was a free country. History proves that mere mistrust of politicians isn't enough, either - fear is the healthy response!

It's obvious that we've come full circle in this country. We have a government that is disrespectful of the people in every way, and is now pursuing only further expansions of it's own power. If the Founders were alive today, George Washington would pick up his rifle and solve this problem (again) as Benjamin Franklin chided us about the Republic we couldn't keep.

Nirvana Achieved in Our Time...

...including the cure for cancer, middle east peace, galactic free trade and oh yes, economic salvation!



Just add $9.95 (Trillion, that is...) for shipping and handling.

Here's the bold new plan: By spending more money we don't have on more pork we don't need we'll get more debt we can't service. As a result we'll glide smoothly down the road to serfdom lasting prosperity.

Seems unlikely, but it must be true. After all, the Obamessiah has spoken it. Head held high, basking in Himself, Benito Husseinolini Obama assures us: "We will rebuild. We will recover - and the United States of America will emerge stronger than before."

(He's actually telling the truth. His America IS the government, which WILL emerge stronger than before. We the people are just the fuel, and it's not his fault we don't know what he's talking about up there...)

Anyway, we get "a new lending fund that represents the largest effort ever to help provide auto loans, college loans and small business loans to the consumers and entrepreneurs who keep this economy running." (Bankers were bad enough, but now we have to go before the Feds to buy a car?!?! Hope you're current on your taxes...)

We get a new housing plan that will "help people facing foreclosure refinance their mortgages and lower their monthly payments." (Sounds expensive. Good thing it's free!)

We'll shovel even more money into the black hole our banking system, but with fresh promises of accountability. It was amusing to watch Nanny Pelosi, fresh off her junket to Italy, sit with eyes averted as Benito said of this bank aid "This time, CEO's won't be able to use taxpayer money to... ...disappear on a private jet. Those days are over." (Yep. Those days sure are over. Only our rulers get to jet around from here on out.)

Now the bad news obvious: "This plan will require significant resources from the Federal government - and yes, probably more than we've already set aside. But while the cost of action will be great, I can assure you that the cost of inaction will be far greater - for it could result in an economy that sputters along for not months or years but perhaps a decade" (Kind of like the last time we threw big money and government programs at a downturn - the Great Depression - and sputtered along for a decade? But this time will be different. He said so...)

"It's not about helping banks - it's about helping people" (What a crock. If that were true, he'd be giving that money to the people. But no - he's giving it to the banks. Forget the rhetoric - follow the money.)

"We're going to reform our outdated regulatory system" (More alphabet soup government, in other words.)

Speaking on the automobile industry's woes, he fantasized "...we are committed to the goal of a retooled and re-imagined auto industry that can compete and win" and then "I believe the nation that invented the automobile cannot walk away from it" This to thunderous applause. (Is it picking nits to inform the messiah that the nation that invented the automobile is Germany? Interesting choice of words, regardless - if the auto industry fails under the government's heavy hand, we will be walking away...)

Then we get to the collectivist wet dream of socialized medicine. Socialized medicine is an ugly term, so we calls it "health care reform" these days. In classic doublespeak, the first step (the recent government takeover of our medical records) will "reduce errors, bring down costs, ensure privacy and save lives." (Applying the descrambler, that's "Ensuring costs, reducing privacy, saving errors and bringing down lives." Yep - that's what the government's good at, all right.)

Somehow, this will even "launch a new effort to... ...seek a cure for cancer in our time" (Sure. Promise the moon; deliver Gilligan's Island! I wonder - is cancer considered "cured" if you simply don't live long enough to get it? Just a thought...)

At a Hitlerian fever pitch, He said "health care reform CANNOT wait, it MUST not wait, and it WILL not wait another year!" (More thunderous applause. Really thunderous. Precisely as I had feared, socialized medicine is on the fast track. The Anointed One is going to saddle our economy with this debacle on top of all our existing burdens. You've been warned.)

But wait - there's hope: "We've already identified $2 trillion in savings over the next 10 years." (Gee - the exact amount He spent in His first four weeks. Fancy that! Out of that ten years.,the last six are someone else's problem - wanna bet that's when the "savings" are found?)

Another messianic reassurance: "I will not allow terrorists to plot against the American people from safe havens halfway around the world." (Of course not - they're all welcome in DC these days! And why not - those caves can get rather chilly.)

The messiah also stated that he could " stand here tonight and say, without exception or equivocation, the United States of America does not torture." (Our enemies, anyway, and they will sleep well tonight. The American people are somewhat less fortunate.)

This exhausts me. There was much more on education, jobs, etc., etc. - all dripping with teleprompted loftiness. (Turns out that when the loftiness meter is pegged, you're at peak gagging as well.) There was also plenty of blame for the problems He's inherited, to more thunderous applause - which is rather cynical given that the problem He's inherited is the government He's expanding. When the Obamessiah got to the part about about our responsibilities to our children and gravely informed us of "the responsibility to ensure that we do not pass on them a debt they cannot pay" I couldn't take any more.

At least it was enlightening to see our genuflecting Congress get in a few knee bends! They've passed so much legislation without reading it lately that I'd begun to wonder if the staffers and the taxidermists were the only living creatures there! But no - they're alive! And all those knee bends - a foretaste, no doubt, of the New National Health Plan People's Daily Exercise Program - coming soon to a collective near you...

Jubilee?

At crucial moments, it can be challenging to think outside the box, even when thinking inside the box is what brought us to the crucial moment in the first place. Our financial crisis is a great example: Debt and bubbles are what brought us to the cliff, and our leaders seem to think we can fix our debts and bubbles by wrapping more debt in a bigger bubble.

I'd prefer the biblical solution. In Leviticus 25, every 50th year is a Jubilee year. Slaves are freed and debts are forgiven.

In the biblical iteration of Jubilee, all the land went back to it's original owners, so real property was in effect only leased in those times. (Notes were actually calculated based on the number of years left until Jubilee.) I'm for widespread ownership of private property (one of the most powerful instruments of Liberty) so my idea works a little differently.

The Jubilee I've conjured up is arguably our best (and perhaps our only) shot at cleaning up this financial mess and more importantly, salvaging this nation in recognizable form. In my version, all debts will be forgiven, but property will remain in the hands it's in today. If your name is on a mortgage, the house is yours - free and clear. All consumer debt will be forgiven as well, and all financed items are yours to keep. All government debt will likewise be erased, and since that debt is taxpayer funded, the income tax that pays interest on it will be repealed. (This satisfies the biblical imperative that Jubilee free the slaves.)

My Jubilee would be a one-time event, and would usher in permanent changes in how we do business. In the post-Jubilee era, there would be no deficit spending by government, period. The Fed will be completely phased out in a short period, and which money will again be coined out of metals of intrinsic value, as originally mandated by the Constitution.

The immediate effect of Jubilee would be the rebirth of the American Entrepreneur and the rebirth of the American Consumer - not in the unhealthy speculative way we've seen recently, but in the forward-looking "invest for the future" way that built this nation in the first place. Without the burden of all this bubble debt, there will be a resurgence beyond anyone's wildest dreams - an American Renaissance, if you will...

It's obvious this would be a cataclysmic event, but we're headed for a cataclysm anyway, and on our current path the aftermath will be very different and much worse. If we continue down this road, the entire debt and equity bubble will be refinanced into a public debt bubble. (We're at least two trillion dollars down that hole in the first four weeks of the Obama presidency, and they're just getting started.) When all is said and done, America's tax burden on this debt will be crushing. Our taxes will be as high (or higher) than any European nation, but in our case there will be no services returned - all our money (all our efforts, in other words) will go to pay interest on debt.

What we need is not revolution, but Restoration. Restoration of honest money. Restoration of limited government. Restoration of rights, which is also the restoration of incentives. In all respects, a Restoration of Liberty.

If we start out with that in mind, a Jubilee would be a most empowering event. As I envision Jubilee, it would mean we reclaim the original promise of America. A Restoration of our God-given rights, of the chance to work for our own gain and the opportunity to live life as we see fit in the context of our neighbor's right to do the same. A future that has such promise would be a good reason to invest again, too, and I'm sure folks would do just that.

This whole Jubilee idea is only partially developed here. If we manage to erase all of the bad, we'll need a much more ironclad char of the good to replace it. That's a lot of detail to be worked out, and I may revisit this topic and do just that.

We're at the economic cliff, and it turns out to be the moral cliff as well. Doing more of the same equals leaping into a dark and hopeless future - one in which the light of Liberty may be extinguished for generations. The decision is upon us - do we leap into the abyss or turn back to the light?

Shortages Looming? Inflation Rampant? Collapse Inevitable?

A sensational headline to be sure, but there's something rather unsettling going on in retail.

A couple evenings ago I stopped at the Wal-Mart on the way home, and what I saw shocked me: One - there were a lot of empty shelves in just about every department. There was (of course) little ammo to be had. No surprise there. But, there were big gaps on the shelves in the toiletries and first aid aisles, and a lot of empty space where cookware belonged. Thankfully, they had the things I went for - canning jar lids, mainly, and I snagged a few more 100 hour candles and some basic OTC medical stuff.

Because I buy so far ahead on everthing, it's been a while since I bought some of these basic items. What's happened to the hair spray I buy is illustrative: the bottle has shrunk from 12 ounces to 10, and the price is up almost 20% over the old 12 ounce bottle. This is great! In an attempt to mask inflation they've made the bottle smaller, meaning packaging, shipping and handling costs are now a much higher percentage of my purchase. The same has been happening with many things I don't ever buy, such as boxed cereal, and this has been all over the news. Now I've seen it firsthand.

I checked several other items that I stock at home and found the same thing has happened to them. Toothpaste tubes are smaller. Bleach comes in three quart bottles instead of gallons. Not only are we paying more for less, but (due to the packaging/product ratio) the delivery system itself has become markedly less efficient. Rising prices aren't good, but it's this loss of efficiency that concerns me most.

In his book "The Collapse of Complex Societies" Joseph Tainter makes the case that societies tend to to collapse when complexity increases to the point of causing diminished marginal returns. In too many ways we're at - or even past - that point. The regulatory burden springs to mind, as does the shrinking return on our labor - a return which will shrink a whole lot more as the effects of all the current money printing and spending comes home to roost. We're experiencing diminishing marginal returns everywhere I look, and now we have a substantial drop in efficiency in the delivery of basic consumer products to add to our list of woes.

Stock up while you can!

Extraordinary Popular Delusions and the Madness of Crowds

Repeat after me: Bubbles are not wealth! Bubbles are not wealth!

The title of this post is also the name of a book by Charles Mackay. Originally published in 1841, it's a history of man's great delusions through the centuries. The money mania section is fascinating - from John Law's Mississippi Stock scheme to the South Sea bubble to Tulipmania - it's all there. I first read this in 1982 when I started my financial career. It's a life-changing book - not quite up to the Bible but certainly on par with Atlas Shrugged!

What did I learn from Mackay at the tender age of 23? Simple: Bubbles are not wealth!

Remember the internet bubble? That's the one where startup companies that had never made a dime (and didn't even know what dimes looked like) floated stock in much heralded IPO's and watched share values zoom to $200 or $300. Remember that? (And all without the drudgery of products, services or earnings. Those were the days!)

Then, "out of the clear blue sky" the tech bubble burst. (Who'da thunk?) Panic time! In our fraudulent economy, bubbles are all we have and bursting just isn't allowed. We hurriedly refinanced the tech bubble into real property, creating the real estate bubble.

But bubbles are not wealth.

Now the real estate bubble's burst too, so we're frantically refinancing it into this colossal public debt bubble.

But bubbles are not wealth.

The folks at the helm today are the same Wall Street thieves who created these bubbles, only now they're in government instead of working behind the scenes. Their actions, while now "official", are still awful (or is that "offal"?) Hmmm, okay, how about treason? There we go...

Treason.

Take Hank Paulson - While CEO at Goldman Sachs, he was one of the architects of the SEC's abandonment of the net capital rule - a requirement that investment banks and brokerages hold a certain ratio of capital, thereby limiting leverage and risk. (14:1 was scary enough, but Paulson's infinity-to-one is suicidal. Absent the repeal of this rule, our current predicament would have been impossible. He dreamed this mess up, then he caused it and he happily cashed every paycheck along the way.) I wouldn't mind the $700 million net worth he amassed, had he only done so honestly.

Paulson was elevated to Treasury Secretary by Bush in 2006. It is noteworthy that his three immediate Goldman CEO predecessors followed an identical power path - Jon Corzine went from Goldman CEO to US Senator to governor of New Jersey. Then Stephen Friedman went from Goldman CEO to Chairman of the National Economic Council to Chairman of the President's Foreign Intelligence Advisory Board. Then Robert Rubin went from Goldman CEO to Chairman of the National Economic Council to Treasury Secretary under Clinton.

Then came Paulson.

After Paulson we get Tim Geithner. He worked for Henry Kissinger, then went into management at Treasury, then Joined the Council on Foreign Relations, worked at the International Monetary Fund, and became President of the Federal Reserve Bank of New York.

Geithner (a Paulson protege) was an architect of the Bear Stearns takeover, the bailout of AIG, the sacking of Lehman, and now he's Obama's Secretary of Treasury!

Does anyone miss this pattern? Clinton did it. Bush did it. Obama did it. There may be left and right wings, but it's the same dang bird! Check further back and you'll find that this has been going on for decades. Honesty is not possible within this closed loop power structure. We may elect figureheads, but the bankers run our government, and they're all thieves - bubble blowing thieves.

If we're to stay free, we need to take our lumps and then start over with honest money and limited government. Bubbles are not wealth.

This happened on our watch. We got ourselves here. Even if we didn't participate, we looked the other way as it happened. Now it's up to us to set things right.

100 Hour Emergency Candles

I happen to like the soft glow of candlelight. Regardless, you probably want some around for emergency use. Forget the survival stores and catalogs - just go to Wally World and look for the display of the tall candles they market to Catholics. Look past the scented ones with "stained glass" wrappers (try to restrain yourself!). Somewhere in there you'll usually find plain white unscented candles. They go fast, particularly if I'm ahead of you.

Speaking of inflation these little babies cost about 50% more than a year ago. All the same, they're made in America, burn for 100 hours and still only cost about $1.50

Buy lots!

Hey! That was MY idea...

...and I'm still long Scotch. (Red wine too!)

Monster Crash

Contrasts...

"Depressions then and now..."

Thanks to the relentless prompting of this unfolding financial debacle, I often ponder what a modern-day depression would be like. If we experience such a thing again today, I'm not optimistic about our prospects.

In fact, I believe the outcome would be catastrophic. Our population now stands at 304 million souls. We've outsourced much of the production we rely on and become a nation of paper pushers, clerks and service workers. What's left of our manufacturing sector is in a world of hurt. Less than 2% of our people are involved in agriculture, and that system is utterly dependent on high technology and hydrocarbons.

In 1930, the population of the United States was below 125 million. A large percentage of our workers were still in agriculture. Many farmers still plowed fields with teams of horses. Paper pushers were a novelty. This was before the GI Bill, so few attended college - heck, many never finished high school. Nonetheless, literacy rates were higher then and most Americans had a far more realistic perception of the world they lived in.

Family farms were the norm, and almost everyone had relatives who grew something for a living. If you had a city job, you probably had a garden and chickens in your back yard. Regardless of where you lived, there was produce in canning jars in your pantry. If you lost your city job, you could always go stay on the farm with family. There, you had productive work to do raising crops and animals and meals with your very own family awaited every evening. That's one heck of a fallback position!

Today, the pantry is bare, if there even is one. Many people will have to go to the store before cooking tonight's meal. With no one really paying attention, government officials tell us we should have three months food on hand in case of a pandemic. Well, for any kind of emergency, even a pandemic, three months is a pittance. I have nearly three years worth of staples and canned goods on hand right now, purely as a hedge against inflation! It wouldn't be the same diet I'm accustomed to, but I'd certainly not go hungry. Plus, I have seeds. Heirloom seeds.

Gardening is almost a lost art, nobody in the city has chickens and only a few acquaintances have family living on a farm these days. City people who lose jobs and homes now sleep in cars instead of farmhouses. They have little or no family support structure and rely on government. if they fall on hard times. Obviously, if things unraveled today, we'd be in a world of hurt.

This contrast runs far deeper than food. In the 1930's there was a pretty strong consensus on the concept of "America" - we had our problems but they looked nothing like today. There was a very different moral climate, and people had coping skills that are now largely lost. These factors produced innumerable scenarios like the one a client of mine recounted from his childhood in a small Nebraska town. His father owned a store there and many people in and near the town owed him money. They would show up - voluntarily - with eggs, produce or live animals - quite embarrassed because they were broke but honoring their debts as best they could. Voluntarily.

Beyond family support, I suspect this informal barter system was a powerful factor in small town and rural America. Things were better in the cities, too, as churches were a much bigger part of life back then. They all had big kitchens, and many more people had stocks of food on hand to share. These days we'd be far more dependent on FEMA (!) for relief. (Recall Hurricane Katrina and tell me that's a comforting thought...)

Government was small, and the welfare state was a distant gleam in the socialist's eyes. Absent the magnet of entitlements, immigrants who couldn't make it here packed up and returned from whence they came. Those left here were the best and the brightest, and whether they were bootleggers, farmers or Louis Chevrolet, our economy was innovative, productive and highly efficient. These are the folks (and the children and grandchildren of the folks) who made America great. The contrast today couldn't be clearer. Today, government workers and welfare recipients constitute a large, pre-existing drain on society. As of now, our government employs more people than our entire manufacturing sector. The income tax, a recent and relatively minor burden back then, now consumes the fruits of our labor until May of each year. We carry burdens that were inconceivable in my grandparent's day.

A depression today would mean chaos. How many people have enough food to tide them over until their garden produces? How many people even have seeds to plant a garden? A shovel? Canning jars?

In 1930, government debt and deficits were miniscule compared to today. The New Raw Deal no doubt prolonged the doldrums, but we we didn't start out in the same kind of hole back then. The ramp-up of production for WWII was enough to pull us out of depression. I can't imagine us ramping up that kind of production these days, given that our production capacity is long since dismantled and shipped to China. Shoot - even the tools we need to build new production lines are now made overseas.

I could ramble on but the point is clear. Suffice to say I'm worried. I hope you are too...

MOAB

The Mother Of All Bubbles.

I can't stop thinking about the harm being done by printing all this money. Our national debt will easily eclipse GDP this year, and unfunded liabilities are probably around five times GDP. We're approaching the point of no return - the point where there's no chance to fix things.

I'm angry, too. Bloody angry!

I yearn for those balmy days past, when the only bubbles I cared about were in my sparkling wine!

(I'll try to change the subject - really, I swear I'll try...)

Fighting Deflation With Inflation

In a nutshell, that's what they're doing. The bubbles are doing their best to burst (asset deflation) and the Fed is doing their best to keep them from bursting by printing boatloads of money (inflation).

It's a contest between gravity and hot air. Which wins???

My guess is both! There will be further collapse in asset values - real estate, stocks, etc. (this is taking place now and has proven impossible to stop) so deflation will have it's day. Simultaneously, there is inflation in things like consumer products, commodities (metals, food, etc.) so inflation will show it's ugly face in at least some areas of life. (If you're on board commodities this isn't necessarily a bad thing, but if you're onboard real estate you're going to have to pay close attention to the water level and your nose!)

Caveat: if we have any kind of recovery (an increasingly unlikely prospect) then expect inflation to run rampant, in a way that would be more familiar to Robert Mugabe than to us. Same applies if something impacts the oil supply, but then we could have serious inflation without any real recovery.

Inflation actually occurs whenever the fake money supply is diluted with more fake money. It's just pretty dang tough to see it right now, what with all the bubbles bursting. It's there nonetheless - just ask the overseas folks who trade for our dollars!

Tea Party!

Reporting from the floor of the Chicago Board of Trade, Rick Santelli ignited a bit of a firestorm this morning:

http://www.cnbc.com/id/15840232?video=1039849853&play=1

Let's all take a cue from this and send our elected "representatives" a teabag! Please include a note telling the spineless fools that we can't print our way to anything but penury...

"Rights" vs. "Power"

Words mean things. People are using these two words quite a bit lately, and they are not interchangeable.

I just heard, for the umpteenth time, someone say "the government doesn't have the right to do this." That's true. The government has no rights at all. What the government has is the POWER to do things, and far too much of it at that.

Under our laws, only the people have rights, as in "the right of the people". Rights are a good thing. The government has nothing but power, and those powers are supposed to be limited to just powers exercised at the consent of the governed. Power is a dangerous thing, and should be strictly limited.

"Government is not reason, nor eloquence. It is force. Like fire, it is a dangerous servant and a fearful master" - George Washington

(This apt analogy explains that uneasy feeling you have that we're getting burned...)

Any addition to government power must by definition come at the expense of our rights. All increases in power are new paths to, and opportunities for corruption. It is becoming clearer and clearer that fear of government power is a healthy outlook. I would argue that it is the only possible outlook for those who wish to pass any semblance of liberty on to their kids and grandkids. (I would also argue that anyone who believes that unbridled government power can benefit society is mentally ill.)

In the context of Liberty, the word "rights" should bring a smile to our faces and the word "power" should strike fear. We used to understand these distinctions, and until we regain that understanding we cannot make our case effectively. Spread the word.

A Drop in the Bucket

Basking in Himself, Obama just christened a $50 billion mortgage bailout that is mathematically doomed at it's launch. The market is actually UP on the heels of this foolishness, at least for the moment.

This legislation largely rewards the folks who had the least business buying a house, and it does so primarily at the expense of those who never set a foot wrong. As bad as that is, it isn't even the biggest problem with this kind of thinking...

Fact is, each "breadwinner" laid off now in February translates into another foreclosure by this time next year. GM just announced 47,000 such layoffs and Chrysler brought it up to an even 50k. Parts suppliers will soon be joining the layoff extravaganza - rumors of 5,000 at Goodyear are an illustration of what awaits as this ripples through the industry. And that's just ONE day, in ONE industry.

Let's do some math: I'll assume each laid-off worker has a mortgage of $200,000. (This is slightly above the current median home value, but remember that many mortgages were written over the past few years at the height of the bubble and have much higher balances.) 50,000 layoffs times the average mortgage note equals $10 billion in future mortgage delinquencies that weren't even on the table when this plan was announced Tuesday morning!

One DAY worth of new layoffs has eaten up 20% of the money allocated in the bailout! Then subtract the "postage and handling" typical of government programs and viola - one third of the money's spent before the ink is dry!

I know this is a simplistic calculation. Fact is, some of these folks own their homes and may have no problem. Others have auto loans, credit card balances and student loans on top of their mortgages that will have to be added in to the looming defaults. (All in all, I suspect my math is on the conservative side of reality.) Simplistic though it is, it does show the magnitude of the problem. It handily demonstrates the fallacy that the government can save us from this mess. The Fed's printing howitzers are aimed directly at the deflationary pressure on asset values, yet the contraction continues as though the Fed weren't even there. Meanwhile, the money supply and public debt is growing like a cancer (which it is) and the specter of hyperinflation looms ever higher over the economic landscape.

We're addicted to economic delusions, and we're embracing Obama's latest "fix" with eyes closed and a warm rush of relief like the addicts we are. It would be far less expensive to acknowledge the delusional period just ended and allow asset values to sort themselves out on their own. This approach would have added the novelty of being honest - a sensation that would be very good for us as well! Instead, we are attempting to refinance the asset bubble into a grand "new and improved" public debt bubble.

And people wonder why I'm so cynical...

Atlas Shrugged

There are so many great quotes to be found in this classic, and I can think of no work of fiction more pertinent to our times. Here's a great one, from Francisco's money speech: "When you see that trading is done, not by consent, but by compulsion - when you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal not in goods, but in favors - when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed."

- Ayn Rand, Atlas Shrugged

Two Down - Thousands to Go...

Hillary's in Japan. Now Nanny Pelosi has fled to Italy. This is progress! Next, I propose we send Obama to Zimbabwe, Biden to Cuba and Benny & The Banksters to Hell.

Apparently in need of celebration rest after the heavy lifting of the $800 billion power grab, Pelosi and seven fellow travelers jetted off to that pivotal world power. Press releases tell us Pelosi's on a "working vacation" during which she will meet with the Pope and other dignitaries. One hopes the pope will give her a little indigestion over her stance on abortion, but we'll have to wait and see.

Much fuss is being made over the cost of the trip abroad, but considering what it costs us when she's here at home, I'm all for extending the stay. Perhaps she could check back in around 2080 if she's not too busy...

"A Republic, If You Can Keep It"

I'm embroiled in an ongoing argument with an a friend who just cannot get wrapped around the notion that America is not a democracy. This view all is too common (we constantly hear politicians - particularly the leftists - call this nation a democracy) but this one surprises me - he's a sharp fellow - graduated from one of America's elite military academies - and should certainly know better.

"If You Can Keep It" - I chose Benjamin Franklin's famous quip as the title of this post. He uttered these words upon emerging from Independence Hall at the closing of the Constitutional Convention on September 18, 1787: A lady history records as "Mrs. Powell" approached Franklin and asked if we had ended up with a Monarchy or a Republic. Franklin, displaying his characteristic wit, responded "a Republic, if you can keep it."

If, indeed.

Now, Franklin (and likely Mrs. Powell) knew that a monarchy was essentially not on the table - after all, we had just thrown out an abusive monarchy by force. The absolute power of a monarch was well understood and widely feared. A democracy was never under serious consideration either. What the revolutionaries wanted, at that moment in history, was a minimally intrusive government whose responsibility was to provide a framework for commerce and the common defense and otherwise stay the hell out of our way.

The people as a whole might have accepted George Washington as our first king, in that mindless way the Brits still worship the Royals (and Americans worship Obama). Thankfully, the Founders knew better. The hallmark of the Founding was the recognition of man's inalienable God-given rights, and of the urgent need to protect those rights from the power-hungry among us. Thus was born our Constitutional Republic.

It is historically rare and conspicuously noble that a group such as our Founders - who could have handed themselves unlimited power over the new nation - rose above that temptation and set course for limited government and individual liberty instead. American exceptionalism is a very real thing, and this, precisely, is the reason why!

Here's what the words mean: The republican aspect of our government is that our head of state is not a monarch. We're the antithesis of a monarchy. The fact that our head of state and legislators are elected but ALL their actions are governed by the supreme law of the land means that we are not a democracy. We have this rule of law that protects us from our government, called a Constitution - so we're a Constitutional Republic. Once our leaders are in office, that constitutional aspect overrides (or was meant to, anyway) anything our elected leaders might try that diminishes our liberty. No matter how gullible we become when choosing leaders, the law of the land was written to intervene and protect us from ourselves. The overriding power rests in the Constitution. (How many ways can I say this??? We'll soon see...)

"A Republican Form of Government" - Article IV Section 4 of the US Constitution states: " The United States shall guarantee to every State in this Union a Republican form of Government..." Not only must the Federal government take a republican form, it must guarantee the same to each state. Thank God it does, too: A pure democracy is nothing more than mob rule. In a democracy the majority can do anything it wants - hence the illustrative example in which two wolves and a sheep vote on dinner. Rules are needed to protect individuals. Evidence of the Founder's fear of "too much democracy" can also be found in the Electoral College, which was established as a compromise between election of the president by Congress and election by popular vote.

I'll say it again: In a Constitutional Republic the law of the land is in place to supersede the will of the people and the power of government, keeping the rights of individuals safe from mobs and megalomaniacs. (At least that's the idea - not that we've done a great job of "keeping" our precious gift.)

"Democracy" is Never Mentioned - It should be noted that the word "democracy" does not appear anywhere in the Declaration of Independence or the Constitution of the United States.

"The Pledge" - In the much maligned Pledge of Allegiance, we pledge ourselves to the flag "and to the Republic for which it stands." The Republic. The Constitutional Republic.

"Protect and Defend" - In the oath all elected officials and military personnel take when they are sworn in, they make a promise to "protect and defend the Constitution of the United States." (It was chilling when word recently leaked out that President Obama wanted the military oath rewritten to have soldiers swear allegiance directly to him. That's how NAZI Germany worked - soldiers pledged their lives directly to the Fuhrer. We certainly don't need that here!) The one aspect of America worth defending is the rule of law - the Constitution. That's what makes America, so that's what we swear our oath to!

The brilliance of our system of government cannot be overstated. The constitution recognizes only individuals. Each and every right is an individual right. The wisdom of this is more and more apparent as various aggrieved groups have managed to distort the process and negotiate special privileges for themselves. Now we find these groups lined up at the trough, votes for sale, and even vying with each other for government favors and power. The politics of individual liberty have been replaced by the politics of pull, and we are much the worse for it.

That friend I mentioned served in the military after graduating from the academy. When he was sworn into the armed forces, he himself took the oath to protect and defend the Constitution. He served with honor and is now a success in the private sector. He's a good guy, as patriotic as they come, and I'm thankful for all like him who serve.

It's just a little unsettling to discover that he never had a clearer idea what we're fighting for.

A House Divided

“The two great dividers are language and religion.” - Emanuel Kant

Local News Update

Marie Morrow (mentioned below) has been "sentenced" to time served on suspension and will be returning to school.

The superintendent issued a mealy mouthed statement in which she supported the policy that led to this mess in the first place. Apparently these school bureaucrats just can't take idiocy seriously enough.

The superintendent's report card:

Subject: Overreaction
Grade: A

Subject: Damage Control
Grade: C

Subject: Backbone
Grade: F

Not that grades mean much anymore...

Got Food?

Anyone paying attention to the news has probably heard the statement that world grain stocks are at their lowest level since WWII. I've never checked on the veracity of that particular statement, but it is certainly plausible and there is no question that stocks are so low as to prompt real concern.

Before the bad news, though, there is a bit of good news: The drop in oil prices has lessened demand for the varieties of corn suited to ethanol production. This process is so close to energy neutral anyway (energy inputs are nearly as great as yields) that it's great to see agricultural production redirected. This happy news means more US cropland will be devoted to food for people and animals as opposed to food for cars.

Now for the not-so pleasant news: The forces at play today are different and in many ways more challenging than those during the second world war. Foremost is world population, which stood at only 2.7 billion in 1940 as opposed to 6.8 billion today. Our agriculture system is now far more specialized (GMO seeds with designer fertilizers and pesticides) and is much more dependent on hydrocarbons as well. Irrigation has depleted aquifers worldwide, and I have no idea how much production will fall as that dwindling resource is factored back out of the equation in the near future. That brings us to the global drought, which is the specific topic of the article linked here. Behold some impressive research by Eric over at marketskeptics.

Article reprinted below link!

http://www.marketskeptics.com/2009/02/2009-global-food-catastrophe.html

Monday, February 9, 2009

*****Catastrophic Fall in 2009 Global Food Production*****

by Eric deCarbonnel After reading about the droughts in two major agricultural countries, China and Argentina, I decided to research the extent other food producing nations were also experiencing droughts. This project ended up taking a lot longer than I thought. 2009 looks to be a humanitarian disaster around much of the world

To understand the depth of the food Catastrophe that faces the world this year, consider the graphic below depicting countries by USD value of their agricultural output, as of 2006.



Now, consider the same graphic with the countries experiencing droughts highlighted.



The countries that make up two thirds of the world’s agricultural output are experiencing drought conditions. Whether you watch a video of the drought in China, Australia, Africa, South America, or the US, the scene will be the same: misery, ruined crop, and dying cattle.

China

The drought in Northern China, the worst in 50 years, is worsening, and summer harvest is now threatened. The area of affected crops has expanded to 161 million mu (was 141 million last week), and 4.37 million people and 2.1 million livestock are facing drinking water shortage. The scarcity of rain in some parts of the north and central provinces is the worst in recorded history.

The drought which started in November threatens over half the wheat crop in eight provinces - Hebei, Shanxi, Anhui, Jiangsu, Henan, Shandong, Shaanxi and Gansu.

Henan
China's largest crop producing province, Henan, has issued the highest-level drought warning. Henan has received an average rainfall of 10.5 millimeters since November 2008, almost 80 percent less than in the same period in the previous years. The Henan drought, which began in November, is the most severe since 1951.

Anhui
Anhui Province issued a red drought alert, with more than 60 percent of the crops north of the Huaihe River plagued by a major drought.

Shanxi
Shanxi Province was put on orange drought alert on Jan. 21, with one million people and 160,000 heads of livestock are facing water shortage.

Jiangsu
Jiangsu province has already lost over one fifth of the wheat crops affected by drought. Local agricultural departments are diverting water from nearby rivers in an emergency effort to save the rest.

Hebei
Over 100 million cubic meters of water has been channeled in from outside the province to fight Hebei’s drought.

Shaanxi
1.34 million acres of crops across the bone-dry Shanxi province are affected by the worsening drought.

Shandong
Since last November, Shandong province has experienced 73 percent less rain than the same period in previous years, with little rainfall forecast for the future.

Relief efforts are under way. The Chinese government has allocated 86.7 billion yuan (about $12.69 billion) to drought-hit areas. Authorities have also resorted to cloud-seeding, and some areas received a sprinkling of rain after clouds were hit with 2,392 rockets and 409 cannon shells loaded with chemicals. However, there is a limit to what can be done in the face of such widespread water shortage.

As I have previously written, China is facing hyperinflation, and this record drought will make things worse. China produces 18% of the world's grain each year.

Australia

Australia has been experiencing an unrelenting drought since 2004, and 41 percent of Australia's agriculture continues to suffer from the worst drought in 117 years of record-keeping. The drought has been so severe that rivers stopped flowing, lakes turned toxic, and farmers abandoned their land in frustration:

A) The Murray River stopped flowing at its terminal point, and its mouth has closed up.
B) Australia’s lower lakes are evaporating, and they are now a meter (3.2 feet) below sea level. If these lakes evaporate any further, the soil and the mud system below the water is going to be exposed to the air. The mud will then acidify, releasing sulfuric acid and a whole range of heavy metals. After this occurs, those lower lake systems will essentially become a toxic swamp which will never be able to be recovered. The Australian government's only options to prevent this are to allow salt water in, creating a dead sea, or to pray for rain.

For some reason, the debate over climate change is essentially over in Australia.

The United States

California
California is facing its worst drought in recorded history. The drought is predicted to be the most severe in modern times, worse than those in 1977 and 1991. Thousands of acres of row crops already have been fallowed, with more to follow. The snowpack in the Northern Sierra, home to some of the state's most important reservoirs, proved to be just 49 percent of average. Water agencies throughout the state are scrambling to adopt conservation mandates.

Texas
The Texan drought is reaching historic proportion. Dry conditions near Austin and San Antonio have been exceeded only once before—the drought of 1917-18. 88 percent of Texas is experiencing abnormally dry conditions, and 18 percent of the state is in either extreme or exceptional drought conditions. The drought areas have been expanding almost every month. Conditions in Texas are so bad cattle are keeling over in parched pastures and dying. Lack of rainfall has left pastures barren, and cattle producers have resorted to feeding animals hay. Irreversible damage has been done to winter wheat crops in Texas. Both short and long-term forecasts don't call for much rain at all, which means the Texas drought is set to get worse.

Augusta Region (Georgia, South Carolina, North Carolina)
The Augusta region has been suffering from a worsening two year drought. Augusta’s rainfall deficit is already approaching 2 inches so far in 2009, with January being the driest since 1989.

Florida
Florida has been hard hit by winter drought, damaging crops, and half of state is in some level of a drought.

La Niña likely to make matters worse
Enough water a couple of degrees cooler than normal has accumulated in the eastern part of the Pacific to create a La Niña, a weather pattern expected to linger until at least the spring. La Niña generally means dry weather for Southern states, which is exactly what the US doesn’t need right now.




South America

Argentina
The worst drought in half a century has turned Argentina's once-fertile soil to dust and pushed the country into a state of emergency. Cow carcasses litter the prairie fields, and sun-scorched soy plants wither under the South American summer sun. Argentina's food production is set to go down a minimum of 50 percent, maybe more. The country's wheat yield for 2009 will be 8.7 million metric tons, down from 16.3 million in 2008. Concern with domestic shortages (domestic wheat consumption being approximately 6.7 million metric ton), Argentina has granted no new export applications since mid January.

Brazil
Brazil has cut its outlook for the crops and will do so again after assessing damage to plants from desiccation in drought-stricken regions. Brazil is the world's second-biggest exporter of soybeans and third-largest for corn.

Brazil's numbers for corn harvesting:

Harvested in 2008: 58.7 million tons
January 8 forecast: 52.3 million tons
February 6 forecast: 50.3 metric tons (optimistic)
Harvested in 2009: ???

Paraguay
Severe drought affecting Paraguay's economy has pushed the government to declare agricultural emergency. Crops that have direct impact on cattle food are ruined, and the soy plantations have been almost totally lost in some areas.

Uruguay
Uruguay declared an "agriculture emergency" last month, due to the worst drought in decades which is threatening crops, livestock and the provision of fresh produce.
The a worsening drought is pushing up food and beverage costs causing Uruguay's consumer prices to rise at the fastest annual pace in more than four years in January.

Bolivia
There hasn’t been a drop of rain in Bolivia in nearly a year. Cattle dying, crops ruined, etc…

Chile
The severe drought affecting Chile has caused an agricultural emergency in 50 rural districts, and large sectors of the economy are concerned about possible electricity rationing in March. The countries woes stem from the "La Niña" climate phenomenon which has over half of Chile dangling by a thread: persistently cold water in the Pacific ocean along with high atmospheric pressure are preventing rain-bearing fronts from entering central and southern areas of the country. As a result, the water levels at hydroelectric dams and other reservoirs are at all-time lows.

Horn of Africa

Africa faces food shortages and famine. Food production across the Horn of Africa has suffered because of the lack of rainfall. Also, half the agricultural soil has lost nutrients necessary to grow plant, and the declining soil fertility across Africa is exacerbating drought related crop losses.

Kenya
Kenya is the worst hit nation in the region, having been without rainfall for 18 months. Kenya needs to import food to bridge a shortfall and keep 10 million of its people from starvation. Kenya’s drought suffering neighbors will be of little help.

Tanzania
A poor harvest due to drought has prompted Tanzania to stop issuing food export permits. Tanzania has also intensified security at the border posts to monitor and prevent the export of food. There are 240,000 people in need of immediate relief food in Tanzania.

Burundi
Crops in the north of Burundi have withered, leaving the tiny East African country facing a severe food shortage

Uganda
Severe drought in northeastern Uganda's Karamoja region has the left the country on the brink of a humanitarian catastrophe. The dry conditions and acute food shortages, which have left Karamoja near starvation, are unlikely to improve before October when the next harvest is due.

South Africa
South Africa faces a potential crop shortage after wheat farmers in the eastern part of the Free State grain belt said they were likely to produce their lowest crop in 30 years this year. South Africans are "extremely angry" that food prices continue to rise.

Other African nations suffering from drought in 2009 are: Malawi, Zambia, Swaziland, Somalia, Zimbabwe, Mozambique, Tunisia, Angola, and Ethiopia.

Middle East and Central Asia

The Middle East and Central Asia are suffering from the worst droughts in recent history, and food grain production has dropped to some of the lowest levels in decades. Total wheat production in the wider drought-affected region is currently estimated to have declined by at least 22 percent in 2009. Owing to the drought's severity and region-wide scope, irrigation supplies from reservoirs, rivers, and groundwater have been critically reduced. Major reservoirs in Turkey, Iran, Iraq, and Syria are all at low levels requiring restrictions on usage. Given the severity of crop losses in the region, a major shortage of planting seed for the 2010 crop is expected.

Iraq
In Iraq during the winter grain growing period, there was essentially no measurable rainfall in many regions, and large swaths of rain-fed fields across northern Iraq simply went unplanted. These primarily rain-fed regions in northern Iraq are described as an agricultural disaster area this year, with wheat production falling 80-98 percent from normal levels. The USDA estimates total wheat production in Iraq in 2009 at 1.3 million tons, down 45 percent from last year.

Syria
Syria is experienced its worst drought in the past 18 years, and the USDA estimates total wheat production in Syria in 2009 at 2.0 million tons, down 50 percent from last year. Last summer, the taps ran dry in many neighborhoods of Damascus and residents of the capital city were forced to buy water on the black market. The severe lack of rain this winter has exacerbated the problem.

Afghanistan
Lack of rainfall has led Afghanistan to the worst drought conditions in the past 10 years. The USDA estimates 2008/09 wheat production in Afghanistan at 1.5 million tons, down 2.3 million or 60 percent from last year. Afghanistan normally produces 3.5-4.0 million tons of wheat annually.

Jordan
Jordan's persistent drought has grown worse, with almost no rain falling on the kingdom this year. The Jordanian government has stopped pumping water to farms to preserve the water for drinking purposes.

Other Middle Eastern and Central Asian nations suffering from drought in 2009 are: The Palestinian Territories, Lebanon, Israel, Bangladesh, Myanmar, India, Tajikistan, Turkmenistan, Thailand, Nepal, Pakistan, Turkey, Kyrgyzstan, Uzbekistan, Cyprus, and Iran.


Lack of credit will worsen food shortage

A lack of credit for farmers curbed their ability to buy seeds and fertilizers in 2008/2009 and will limit production around the world. The effects of droughts worldwide will also be amplified by the smaller amount of seeds and fertilizers used to grow crops.

Low commodity prices will worsen food shortage

The low prices at the end of 2008 discouraged the planting of new crops in 2009. In Kansas for example, farmers seeded nine million acres, the smallest planting for half a century. Wheat plantings this year are down about 4 million acres across the US and about 1.1 million acres in Canada. So even discounting drought related losses, the US, Canada, and other food producing nations are facing lower agricultural output in 2009.

Europe will not make up for the food shortfall

Europe, the only big agricultural region relatively unaffected by drought, is set for a big drop in food production. Due to the combination of a late plantings, poorer soil conditions, reduced inputs, and light rainfall, Europe’s agricultural output is likely to fall by 10 to 15 percent.

Stocks of foodstuff are dangerously low

Low stocks of foodstuff make the world’s falling agriculture output particularly worrisome. The combined averaged of the ending stock levels of the major trading countries of Australia, Canada, United States, and the European Union have been declining steadily in the last few years:

2002-2005: 47.4 million tons
2007: 37.6 million tons
2008: 27.4 million tons

These inventory numbers are dangerously low, especially considering the horrifying possibility that China’s 60 million tons of grain reserves doesn't actually exists.


Global food Catastrophe

The world is heading for a drop in agricultural production of 20 to 40 percent, depending on the severity and length of the current global droughts. Food producing nations are imposing food export restrictions. Food prices will soar, and, in poor countries with food deficits, millions will starve.

The deflation debate should end now

The droughts plaguing the world’s biggest agricultural regions should end the debate about deflation in 2009. The demand for agricultural commodities is relatively immune to developments in the business cycles (at least compared to that of energy or base metals), and, with a 20 to 40 percent decline in world production, already rising food prices are headed significantly higher.

In fact, agricultural commodities NEED to head higher and soon, to prevent even greater food shortages and famine. The price of wheat, corn, soybeans, etc must rise to a level which encourages the planting of every available acre with the best possible fertilizers. Otherwise, if food prices stay at their current levels, production will continue to fall, sentencing millions more to starvation.

Competitive currency appreciation

Some observers are anticipating “competitive currency devaluations” in addition to deflation for 2009 (nations devalue their currencies to help their export sector). The coming global food shortage makes this highly unlikely. Depreciating their currency in the current environment will produce the unwanted consequence of boosting exports—of food. Even with export restrictions like those in China, currency depreciation would cause the outflow of significant quantities of grain via the black market.

Instead of “competitive currency devaluations”, spiking food prices will likely cause competitive currency appreciation in 2009. Foreign exchange reserves exist for just this type of emergency. Central banks around the world will lower domestic food prices by either directly selling off their reserves to appreciate their currencies or by using them to purchase grain on the world market.

Appreciating a currency is the fastest way to control food inflation. A more valuable currency allows a nation to monopolize more global resources (ie: the overvalued dollar allows the US to consume 25% of the world's oil despite having only 4% of the world's population). If China were to selloff its US reserves, its enormous population would start sucking up the world's food supply like the US has been doing with oil.

On the flip side, when a nation appreciates its currency and starts consuming more of the world’s resources, it leaves less for everyone else. So when china appreciates the yuan, food shortages worldwide will increase and prices everywhere else will jump upwards. As there is nothing that breeds social unrest like soaring food prices, nations around the world, from Russia, to the EU, to Saudi Arabia, to India, will sell off their foreign reserves to appreciate their currencies and reduce the cost of food imports. In response to this, China will sell even more of its reserves and so on. That is competitive currency appreciation.

When faced with competitive currency appreciation, you do NOT want to be the world’s reserve currency. The dollar is likely to do very poorly as central banks liquidate trillions in US holdings to buy food and appreciate their currencies.

Drug War Death Spiral in Mexico Spills Over to US

If you haven't seen the Tuscon, Arizona home invasion video posted on YouTube by now, click here: http://www.youtube.com/watch?v=h-gzI33CL_k

It's unlikely that the victim in this video clip was "innocent" in the way most of us are. Given the proximity to Mexico and that the participants were all hispanic, it's likely drugs are involved. I'll come back to this in a bit.

Crimes such as home invasions and residential burglaries are seldom random events. There is usually some identifiable reason, the biggest being advance knowledge on the part of your attackers. Either they know you, they know someone who knows you OR they have had some reason to notice you. If they know you or know someone who knows you, they are acting on information betrayed by you. This is easy to solve by adopting "need-to-know" - there's no good reason for telling anyone you have a years supply of food, a generator with fuel and 200 ounces of gold, and if you do you should be prepared to pay big for your loose lips.

If they just noticed you, it may be because you left the boxes that held your brand new audio gear out in the trash or that they delivered something to you and got a look inside or were simply working in your neighborhood and could see valuables through windows as they drove by. These are preventable occurrences as well.

Back to events south of the border and the spillover of these events in our country. The drug cartels are as brutal as any humans in history. The Mexican Government has suffered huge drops in revenue. The state run oil business is a great example: Not only has the price of oil plummeted, production at Mexico's giant field Cantarell is down by more than 30% this year over last as well. Millions of expatriates working north of the border no longer send money home from America every paycheck, and many have returned home to add to the burdens there. Things are coming unglued. The government, never highly effective fighting drug crime, has now lost any semblance of control. Police corruption is so rampant that one jurisdiction in Mexico recently tried buying houses for cops if they would not take bribes in exchange. (Thinking you can be the high bidder for someone's honesty has it's problems...)

Drug runners are held responsible by for the drugs they carry. If they lose a shipment, they will commit any kind of lucrative crime, often kidnapping others until they have collected enough ransom money to pay their overlords for lost drugs. Failure to do so results in death, so they act like desperate animals for good reason. These cartels are no longer shy about crossing north of the border to "conduct business."

Cartel violence is off the scale and follows the drugs wherever they are sold. The gangs operating here are brutal as well, and much better trained than one might suspect. According to an LE contact who is a gang specialist, they go so far as to recruit members who purposely keep their noses clean in order to join the military and receive special operations training. They then return home and pass that training along to the rest of the gang members. He views it as just a matter of time before the violence here rivals the violence in Mexico, and day by day the news is proving him right.

Jeff Cooper's doctrine on self-defense bears repeating here: First, I presume that your pistol is in reach as you read this. If not, remedy that and do not be caught without it again!

Second, I presume you are in yellow as you read this. If you are unfamiliar with the color code, here you are (from Volume 13 #7 of Jeff 's Commentaries, in which he restated the distilled code. This is a bit too succinct for the uninitiated, so my comments are in ( ):

"In White you are unprepared and unready to take lethal action. If you are attacked when in White you will probably die unless your adversary is totally inept." (You are unaware of people and events around you and will be caught unawares.)

In Yellow you bring yourself to the understanding that your life may be in danger and that you may have to do something about it." (The awareness produced by Yellow results in a relaxed but alert state that can be maintained indefinitely. You take in your surroundings and can quickly identify anything untoward, but you are not distracted from what you're doing.)

"In Orange you have determined upon a specific adversary and are prepared to take action which may result in his death, but you are not in lethal mode." (You have now identified someone untoward. You are paying specific attention to this threat but you remain aware of your surroundings.)

"In Red you are in lethal mode and will shoot if curcumstances warrant." (The adversary has left no doubt that he is a threat. Your gun is probably still holstered, but you are mentally prepared to present it and shoot immediately.)

Why is all this pertinent? The homeowner in the video was in Yellow. He saw his attackers coming, retreated to cover and then reacted decisively. Due to mindset, he prevailed in a fight where his attackers outnumbered him 4 to 1. Such victories are not unusual when the intended victim is in Yellow. Most attackers arrive with expectation of easy victory and will be deflated and easily defeated if you take from them the element of surprise and the advantage of aggression. Regardless of this person's probable complicity in events, he did everything right when he was attacked.

This kind of attack can occur anywhere, and sometimes it is completely random. However, our southern border areas are now a special case. Thanks to ineptitude and corruption the Mexican government has little left to say about matters. Having conspicuously failed to carry out promises of border security, we must sadly conclude that our own government cannot be trusted on this matter either. These border areas must be regarded as potential combat zones. Plan accordingly if you're traveling in the area.

Just Call Him Senator Backbone...

...as Judd Gregg has displayed exactly that. The temptation of a cabinet post must loom rather large for any Senator, even when it's the cabinet of the enemy. Gregg placed principle ahead of power, which is laudable. (It almost goes without saying that when it's the Obama administration it takes very little principle to run aground. Those are shallow waters...) Still, a laudable act indeed.

I don't know a great deal about Gregg. He is weak on the Second Amendment, which is (regrettably) enough. Much as I'm repulsed by the intellectual laziness of litmus tests it's amazing how predictably folks who are weak in defense of Liberty's Teeth vacillate on so many other aspects of liberty along the way. (Perhaps if I refer to it as a barometer...)

The Republican Party is conspicuously overdue for a renaissance, and our prayers should go with him as he retakes his place in the Senate minority. Perhaps, from this fresh position of moral authority, he will be the one to find whatever the heck it takes to "lead his people out of the wilderness". (They say weight-bearing exercise builds bone density, so such leadership could benefit his own backbone as well. Usually does...)

All the same, don't hold your breath. As respectable as this decision makes him, a single act should never be confused with a trajectory - particularly in these desperate times. Seems like a nice guy, but he's no Reagan. That, and I'm really wondering if Republicans don't actually prefer the wilderness.

(Interestingly, Gregg's birthday is tomorrow - falling on Valentines Day and just three days before mine. It would have been fun to send up a shout to his e-mail inbox but in that inimitable way only government can cause brain damage, the form has so many required fields it would take several minutes and compel the disclosure of too much to just say "happy" and "thanks for the backbone." Imagine complicating e-mail like that. "We have the technology but we really don't want you to use it." I enjoyed it while it flickered, but that form was kinda hard on my nascent glimmer of hope. Way to stay in the dark, there, guys...)