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>at $1,200 they are way off...or not???
If BoA or Citi get fully nationalized, that could change things in a hurry . . .
NY Times: Is Barack Obma Prepraring to Nationalize the Country's Banks?
Ref - http://www.nytimes.com/2009/01/26/business/economy/26banks.html?_r=2&ref=business
Only five days into the Obama presidency, the new administration and Democratic leaders in Congress are already dancing around one of the most politically delicate questions about the financial bailout: Is the new president prepared to nationalize a huge swath of the nation’s banking system? Speaker Nancy Pelosi has alluded to internal debate over whether large banks should be nationalized, while aides. Privately, most members of the Obama economic team concede that the rapid deterioration of the country’s biggest banks, notably Bank of America and Citigroup, is bound to require far larger investments of taxpayer money, atop the more than $300 billion of taxpayer money already poured into those two financial institutions and hundreds of others. But if hundreds of billions of dollars of investment is needed to shore up those banks, what do taxpayers get in return? And how do risks escalate as government’s role expands to control a vast portion of the financial sector of the world’s largest economy?
Gerald Celente: "Code Red Alert, economy in collapse, drastic measures to be taken, possible bank holidays, gold confiscation, and mega-bailouts"
Ref - http://features.csmonitor.com/economyrebuild/2009/01/21/geithner-pledges-swift-bold-fix-to-financial-system/
Sorry! I forgot the reference in the previous post.
Daily Reckoning: "Secretly, bankers are already being advised about how to handle a bank holiday . . ."
Ref - http://www.dailyreckoning.com/Issues/2009/DR012009.html
"Inflation could return sooner than you think," says MoneyWeek magazine. "Instead of deflation, by the end of this year we could have the beginnings of really rapid inflation," said hedge fund manager Jim Mellon, "which could get out of control, particularly in America." "It could be a year…maybe 24 months," said an old friend yesterday. Terry Easton, who put the key question to Ben Bernanke last week, thinks Obama will follow Roosevelt's program. "Secretly, bankers are already being advised about how to handle a bank holiday," says Terry. "There will be limits on how much money you can take out of a bank. And probably limits on what you can do with it."
Economist: Mounting Joblessness Setting Stage for Dramatic Social Unrest
Ref - http://www.economist.com/world/europe/displaystory.cfm?story_id=12987582
Tens of thousands protested in Zaragoza recently. A city that in 2008 enjoyed the limelight of a World Expo is now one of Spain’s most troubled. The protesters show that negative indicators are more than mere numbers. In the country with Europe’s highest unemployment rate, jobs have overtaken terrorism as voters’ main concern. In few places does the social fallout from recession look so dramatic. Predictions keep getting worse. The government expects unemployment to rise from 13% to 16% this year. The ESADE business school predicts 20% . . . The pain is uneven. Immigrants and the young, many of Aragón’s new workers, were the first to be sacked. They have not built up a decent cushion of unemployment benefit. Some 5m foreigners have multiplied Spain’s immigrant population eightfold in a decade. Offering them lump-sum payments to go home has not worked. Many young people dropped out of school because jobs were plentiful, says Mr Buey. Now they are both unemployed and uneducated.
Wall Street Journal: What to Do if Your Bank is Seized by the Government
Ref - http://online.wsj.com/article/SB123258304319904345.html?mod=todays_us_nonsub_pj
Could your bank turn into the Bank of the U.S.A.? The latest wave of banking problems has investors worried the government will nationalize deeply wounded institutions, such as Bank of America and Citigroup Such a dramatic step could make it easier for some bank customers to get a loan. And customers with deposits will still be protected by federal insurance, just as they are today. Still, consumers could see more branch closings, more standardization across bank products and a deterioration in customer service. Common and preferred shareholders, meanwhile, will likely get wiped out in a bank nationalization. With all of the problems banks are facing, here is a primer on bank collapses and the impact of nationalization.
Gerald Celente: "Code Red Alert, economy in collapse, drastic measures to be taken, possible bank holidays, gold confiscation, and mega-bailouts"
"We are forecasting dramatic measures will soon be taken by the Obama Administration that will worsen the credit crisis and severely damage the nation's economic system," says Celente. For example, Timothy Geithner, President Obama's nominee for Treasury Secretary, has pledged to expand and prolong government intervention in the financial markets. He said his economic team would take "forceful" and "substantial action" on a "very dramatic scale" to "forge an integrated strategy on how best to achieve currency realignment." Celente advises to closely read the signals that have been clearly telegraphed by Mr. Geithner. "From proclaiming a bank holiday, confiscating gold to backstop devaluing currencies, mega-bailouts for the too-big-to-fails to nationalizing public firms and dollar devaluation . . .
>people to distribute the TARP money
Heck, the three blind mice could have come up with a more honest approach than that swindler Hank Paulson. But, just like Madov, he won't be held accountable. They watch out for their own and the rest of of us can just whistle dixie.
>An American's two greatest enemies are his house and his car. But try telling that to most Americans, and you will get ridicule, consternation, and disbelief . . . the problem has no political solution. Tragically, Obama happens to be a politician.
I couldn't agree more. An excellent post from a very credible author and one we should all have been paying a lot closer attention to for a long time now. This one's a keeper.
Catherine Austin Fitts: Will the Government Covertly Confiscate 401(k)s?
Ref - http://solari.com/blog/?p=2005
I had never considered the possibility of overt or covert confiscation of IRAs and 401(k)s until I read one of Franklin Sanders‘ comments about gold confiscation: "Finally, gold and silver today don’t represent the huge pool of wealth they represented in 1933. Why risk wide-spread disobedience to steal such a tiny plum? If the government wants to steal a big pool of wealth, they’ll snatch your pension funds and IRAs, not your gold." In fact, if you look at the value of most 401(k)s and IRAs lately, a great deal has already been "confiscated." The mainstream media has described these losses as part of the normal economic cycle, but this is a fallacy. The losses are the result of a financial coup d’etat, including fraudulent housing bubbles, pump and dump schemes, naked short selling, precious metals price suppression, and intervention in the markets by the government and central bank . . . Which begs the question, where is all this going?
Mish Shedlock: "Pound implodes as Britain teeters on edge of bankruptcy"
Ref - http://globaleconomicanalysis.blogspot.com/2009/01/pound-sinks-as-britain-teeters-on-edge.html?ref=patrick.net
The British Pound has imploded on fears of bank nationalization and Prime Minister Gordon Brown’s plan to give the Bank of England unprecedented powers to buy securities.The technical picture of the British Pound is weak. There has been a major trendline break, the 50EMA seems to be rolling over, and there is a big cross under the 50EMA. A pullback to the 200EMA seems likely. There is a good chance the entire runup from the April 2006 low is retraced. We got that retrace and then some. Dollar bulls were right much of 2008, especially against the Pound. The UK is one country hell bent on outdueling Bernanke and the US in foolish activity. Bloomberg reports: "The U.K.’s imploding,” said Jonathan Gencher, Toronto-based director ofcurrency sales at BMO Capital Markets, a unit of Canada’s fourth-largest bank. "You have all the concern about the financial sector and which banks are going to be nationalized. You have expectations the Bank of England is will be moving toward zero interest rates. That’s weighing on the pound."
>James Howard Kunstler
. . . is a breath of fresh air. So good to hear his opinion on Obama's plan to rebuild our highway infrastructure. It is testimony to how out of touch, and perhaps even irrellevant, our Federal Branch of government has become.
UK Telegrah: "The vast scale of government borrowing may exhaust the stock of global capital. The only solution left may Biblical debt jubilee . . ."
Ref - http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4285187/Biblical-debt-jubilee-may-be-the-only-answer.html
The Treasury's £200bn plan to soak up toxic debt will be followed within days by a US variant from the Obama team. Germany cannot be far behind. As one bail-out succeeds another at ever more inflated price tags, rescue fatigue is becoming palpable. People are bewildered, fearing that good money is being thrown after bad . . . The Fed has cut rates to zero. It is buying mortgage securities on the open market, and eying Treasury debt next. Fellow central banks are exploring their own ways to print money. The $3 trillion fiscal blitz by the US, China, Japan and Europe plugs an emergency gap. With luck, it will keep the economy on life-support just long enough to stop recession and banking crises from feeding on each other with lethal effect, as they did in 1931. There is no guarantee that the measures will succeed. The vast scale of government borrowing may exhaust the stock of global capital. Markets are already beginning to question the credit-worthiness of sovereign states. The Fed may find it harder than it thinks to disengage from colossal intervention in the bond markets. In the end, the only way out of all this global debt may prove to be a Biblical debt Jubilee. Creditors are not going to like that . . .
Cleveland Plain Dealer: Ohio State Employees Union Stunned and Aghast at $250 Million in Concessions, Prospect of Layoffs
Ref - http://investorshub.advfn.com/boards/post_reply.asp?message_id=34975666
The state asked workers in its largest labor union to accept a 5% across-the-board pay cut, a shorter work week and unpaid holidays in order to help balance the state's troubled budget . . . The list of cuts and changes Governor Ted Strickland's administration has asked the workers to accept, which also includes mandatory furloughs and paying more for their health insurance, would amount to $250 million in concessions, according to a members-only e-mailfrom Ohio Civil Service Employees Association president Eddie L. Parks. In the e-mail updating members on bargaining, dated Thursday, Parks said that the union expected to have to fight to keep its wages and health care agreements intact. But the union's team
negotiating team nonetheless was "aghast at the scope of the concessions the state proposed." Parks said the union has been told even if concessions concessions are made, there will be no guarantee layoffs won't happen."
>let it fall, rebuild...
Agreed. I think the world will find that there was never really a choice given the galactic amount of banking fraud.
>What are your thoughts here on Olympus?
I've grown into a bear, and that of course means I have a rosy outlook for gold. However, I will qualify that to gold currently out of the ground. I am growing less enthusiastic about gold in the ground due to new and extrodinary difficulty in the financing of extraction operations.
Maxgold , I think, had the best advice. And that was to go to a coin dealer and pay cash (up to $9900 so it won't be traced) for gold and/or silver coin and put it in a home safe. Nix safety deposit boxes as they are being pilfered in CA by the state. Other states may begin to like the idea and follow suit.
ETF's are also good looking. But, only ot the point that they can distribute funds to you when needed. Their ability to do that is currently being debated.
HTH.
NY Times: More Americans Joining Military as Job Opportunities Evaporate
Ref - http://www.nytimes.com/2009/01/19/us/19recruits.html?_r=1&em
The last fiscal year was a banner one for the military, with all active-duty and reserve forces meeting or exceeding their recruitment goals for the first time since 2004, the year that violence in Iraq intensified drastically, Pentagon officials said. And the trend seems to be accelerating. The Army exceeded its targets each month for October, November and December — the first quarter of the new fiscal year — bringing in 21,443 new soldiers on active duty and in the reserves. December figures were released last week. Recruiters also report that more people are inquiring about joining the military, a trend that could further bolster the ranks. Of the four armed services, the Army has faced the toughest recruiting challenge in recent years because of high casualty rates in Iraq and long deployments overseas. "When the economy slackens and unemployment rises and jobs become more scarce in civilian society, recruiting is less challenging," said Curtis Gilroy, the director of accession policy for the Defense Department.
NY Times: Business Specializing in Layoffs Can't Remember a Busier Time
Ref - http://www.nytimes.com/2009/01/21/business/21layoffs.html?em
As companies across the country eliminate hundreds of thousands of jobs, one field is hiring: the layoff industry. Businesses that specialize in "career transition" can barely keep up with the demand as corporate America cuts staff. Banks, manufacturers, media companies and other industries have relied on the businesses to a greater degree in the last year as economic conditions have worsened. "I can’t remember a busier time,” said Elaine Varelas, a managing partner at Keystone Partners, based in Boston. Right Management, another company that specializes in outplacement, reported a 39 percent increase in profit last fall. And William L. Ayers Jr., president of the 28-year-old Ayers Group in New York, said his business had had a 75 percent spike in so-called career transition work last year.
Reuters: Cost to Insure Against U.S. Default on Debt Soars to Record High
Ref - http://www.reuters.com/article/bondsNews/idUSLJ71150920090119?sp=true
The price investors pay to insure themselves against the U.S. government defaulting on its debt jumped to a record high on Monday, according to data provider CMA DataVision. Five-year credit default swaps on U.S. Treasuries widened to 69.5 basis points from 61.1 basis points at the New York close on Friday, CMA DataVision said. That means investors were paying $69,500 a year to insure against default on $10 million of bonds.
NY Times: "If U.S. policy makers were even remotely honest, they would force [many] banks . . . into nationalization or partial nationalization "
Ref - http://www.nytimes.com/2009/01/21/business/economy/21bailout.html?_r=2&ref=business
Even before they have settled into their new jobs, President Obama’s economic team faces an acute crisis in the nation’s banking system that has no easy answers and that they are not yet prepared to address. A customer last week at a Citibank in New York. Citigroup, the beleaguered bank’s parent, will split in two in a reorganization. The president’s advisers watched most banking shares fall sharply on Tuesday, reinforcing what Obama officials have known for weeks: that their most urgent financial problem is an immense new wave of losses at banks and other lending institutions that threatens to further cripple their ability to resume normal lending.While Mr. Obama’s top advisers view the black hole in bank balance sheets as one of their most pressing problems, they cautioned that they would not be pressured into announcing a plan before they had carefully thought through all the options. Instead, they are scrutinizing an array of solutions, each of which has pitfalls and poses its own risks and dangers.
UK Guardian: "the Fed resembles a drunk driver who, suddenly realising that he is heading off the road starts careening from side to side"
Ref - http://www.guardian.co.uk/commentisfree/cifamerica/2009/jan/08/creditcrunch-useconomy
The United States Federal Reserve, which helped create the problems through a combination of excessive liquidity and lax regulation, is trying to make amends – by flooding the economy with liquidity, a move that, at best, has merely prevented matters from being worse. It's not surprising that those who helped create the problems and didn't see the disaster coming have not done a masterly job in dealing with it. By now, the dynamics of the downturn are set, and things will get worse before they get better. In some ways, the Fed resembles a drunk driver who, suddenly realising that he is heading off the road starts careening from side to side.
UK Telegraph: "Half of Europe now in a Depression. Riots have swept the Baltics and the South Balkans; Trust in the state fallen catastrophically"
Ref - http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4278642/Monetary-union-has-left-half-of-Europe-trapped-in-depression.html
Events are moving fast. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. Standard & Poor has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch. Dublin has nationalised Anglo Irish Bank, moving a step nearer the line where the markets probe the solvency of the Irish state. A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece's social fabric is unravelling before the pain begins, which bodes ill. This week, Riga's cobbled streets became a war zone. Protesters armed with blocks of ice smashed up Latvia's finance ministry. Hundreds tried to force their way into the legislature, enraged by austerity cuts. "Trust in the state's authority and officials has fallen catastrophically," said President Valdis Zatlers, who called for the dissolution of Greece's parliament . . .
UK Telegraph: "Britain [now] stands on the precipice of becoming the next Iceland . . . the political impact will be seismic; anger will rage"
Ref - http://www.telegraph.co.uk/comment/columnists/iainmartin/4295219/Gordon-Brown-brings-Britain-to-the-edge-of-bankruptcy.html
They don’t know what they’re doing, do they? With every step taken by the Government as it tries frantically to prop up the British banking system, this central truth becomes ever more obvious. Yesterday marked a new low for all involved, even by the standards of this crisis. Britons woke to news of the enormity of the fresh horrors in store. Despite all the sophistry and outdated boom-era terminology from experts, I think a far greater number of people than is imagined grasp at root what is happening here. The country stands on the precipice. We are at risk of utter humiliation, of London becoming a Reykjavik on Thames and Britain going under. Thanks to the arrogance, hubristic strutting and serial incompetence of the British Government and a group of bankers, the possibility of national bankruptcy is not unrealistic. The political impact will be seismic; anger will rage. The haunted looks on the faces of those playing supporting roles, such as the Chancellor, suggest they have worked out that a tragedy is unfolding here.
Hello Million. What are you up to?
>If you have a garden, keep expanding it.
Or become real close friends with an Urban Farmer . . .
Santa Rosa Press Democrat: Precious Metals Shine During Economic Crisis
Ref - http://www1.pressdemocrat.com/article/20090118/NEWS/901180350/1036/BUSINESS
Historically, gold has been considered a hedge against a loss in purchasing power of paper currencies. But no one can ever call it a comforting or predictable hedge. While gold prices ended 2008 just a bit higher than they began it, investors were taken on a thrill ride. After climbing to a record $1,030 an ounce in March, gold began a descent. It has lately been trading at around $850 an ounce. Despite the swoon of stocks and gold alike last year, in most years gold performs so differently from stocks that a small dose of gold is increasingly being included in mainstream portfolios. Gold generally also moves in the opposite direction of the U.S. dollar. "I own a small amount -- an insurance policy's worth -- of gold, some in gold coins but most in exchange-traded funds," said Dennis Gartman, publisher of The Gartman Letter financial trading commentary (thegartmanletter.com) in Suffolk, Va., who believes 5% of an individual's portfolio in gold is enough. "I keep the physical gold in a lockbox, just in case, but I hope I lose money on it because that would mean all my other investments are doing better . . ."
Bloomberg: Roubini Predicts Institutional Losses May Reach $3.6 Trillion
Ref - http://www.bloomberg.com/apps/news?pid=20601087&sid=a746r_1q9OOY
U.S. financial losses from the credit crisis may reach $3.6 trillion, in effect suggesting the banking system is "effectively insolvent," said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis. "I’ve found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers,” Roubini said at a conference in Dubai today. "If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis." Losses and writedowns at financial companies worldwide have risen to more than $1 trillion since the U.S. subprime mortgage market collapsed in 2007. "The problems of Citi, Bank of America and others suggest the system is bankrupt," Roubini said.
NY Times: Taxpayer Bailout Is a Windfall to Bankers, if Not to Borrowers
Ref - http://www.nytimes.com/2009/01/18/business/18bank.html?_r=2&ref=patrick.net
At the Palm Beach Ritz-Carlton last November, John C. Hope III, the chairman of Whitney National Bank in New Orleans, stood before a ballroom full of Wall Street analysts and explained how his bank intended to use its $300 million in federal bailout money. "Make more loans?” Mr. Hope said. "We’re not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans . . . Many banks that have received bailout money so far are reluctant to lend, worrying that if new loans go bad, they will be in worse shape if the economy deteriorates. Indeed, as mounting losses at major banks like Citigroup and Bank of America in the last week have underscored, regulators are still searching for ways to stabilize the system.
Cutting Edge News: Ghost Malls Will Soon Litter the American Landscape
Ref - http://www.thecuttingedgenews.com/index.php?article=1050&pageid=37&ref=patrick.net
America’s economy supports more than 1.1 million retail stores. There are approximately 1,100 Malls in the United States, not counting the thousands of strip mall centers. That will soon change as once thriving malls become ghost malls. By 2011, America’s malls within two years will have an entirely different set of numbers. International Council of Shopping Centers chief economist Michael Niemira tries to put a good face on the gloom. He says, “In the midst of all this doom and gloom, it's hard to imagine it getting better... But keep in mind, what happens in strong downturns is there's a hefty pent-up demand. It's wrong to extrapolate these conditions for the next year or two." But Mr. Niemira is probably wrong. There is no pent-up demand. Americans have bought everything they’ve desired for the last twenty years. The over-spending and over-leverage will take a decade to unwind. According to the ICSC, 150,000 stores are anticipated to shut down in 2009, in addition to the 150,000 that closed in 2008 and 135,000 in 2007. Normally, 125,000 new stores open annually. At least 700,000 retail jobs will be lost. The opening of new stores will grind to a halt in 2009.
Below you will find excerpted a very important message that Mike Ruppert sent out via email late last night.
Ref - http://www.mikeruppert.blogspot.com/
---------------------------------------
CIVIL UNREST
By Michael C. Ruppert; (c) Copyright 2009, Michael C. Ruppert. All Rights Reserved.
It Seems as if The World is Holding Its Breath for The Inauguration But…
Jan. 18, 2009 – Perhaps we should be holding our breaths for something else; something that is breaking out all over the world. Civil unrest now moves from a back to a front burner as a landmark on our map and a pressing issue for our discussion.
On January 16th and 17th I saw (either) cowardice or duplicity on the part of mainstream media. Chesley Sullenberger is a great pilot. Coming from an Air Force/aviation family I would be honored to shake his hand. The U.S. Air miracle on the Hudson was indeed that. But for almost 36 hours I watched in rage as the mainstream media, especially CNN, played the same four of five clips endlessly, over and over, rehashing the rehash – hour after hour. The anchors and their producers were either taking a break or regrouping. Several looked very bored. Not since 9-11 have I seen American media shut down news coverage of other important events to such a degree. But the US Air crash landing wasn't a 9-11 was it?
On January 16th the United States shed another 21,000 jobs… in one day. Globally, the economic collapse is hitting other industrialized countries much harder than here. Around the world "emerging" bourses are imploding at a faster rate than ours. Perhaps we should rename them as "disappearing markets" now. The disappearing act has hit turbo charge in Europe as a result of a now three-week old lack of Russian natural gas. Triggered by the economic collapse and compounded by human suffering in unheated, near-zero weather, riots – big ones – have erupted from Latvia in the North, to Sofia in the South. There is serious street fighting. Around the world, from China, to India, to Europe, industrialized nations are "frantically" preparing for civil unrest (China at a very rapid pace). Of course our map says that the US, the UK, Russia and a few others have been preparing for this for years.
Arab nations have lost $2.5 trillion (40% of their investments) thus far in the collapse and have postponed or cancelled 60% of their new development projects… You know? Those hotels where you can snow ski inside when it's 112 outside? That kind of a shutdown will cause the Arab oil-producing nations to explode in civil unrest as aggravated poverty, starvation and disease hit home in short order. Collapsed oil prices have exposed the lack of economic stamina in the region. (You thought Americans were foolish spenders.) The luxuries of the princes will now stand starkly contrasted against the barren desert of their subjects' lives. Thus, geography is giving us our first major political tectonic fault line. From the Baltic south, through Greece, into Turkey, then fanning out across the Middle East is a new frontier of soon-to-be flaming unrest
Unrest will happen here and it will happen in an earthshaking fashion within the next year. Could the evidence supporting this conclusion have been missed as we watched footage on the Hudson for the thirty-second time in 36 hours? Couldn't they have squeezed any of this other news in… somewhere?
WHILE WE WERE SLEEPING great folks like Rice Farmer continued to cull the world press to document the accelerating global collapse and send out stories on a daily basis. Good grief can that man read a map! When meshed with the research from both me and Jenna, the last three days have been an absolute horror show.
As examples:
The EU has effectively nationalized Britain's gas production to cope with the shutdown of Russian gas to Eastern Europe. Over the last two or three years I have received first-hand confirmation from North Sea oil and gas workers that – as a result of the North Sea's serious
decline and depletion – many nearly-empty oil fields are being converted to suck out whatever methane remains in now-depleted oil reservoirs. This has allowed geologists and owners to extend field life (profitability) for maybe a few more years. Now however, for the first time, British natural gas is flowing out to help Bulgaria, Bosnia, Croatia and many other east European countries which are shattering like ice crystals in the cold. British heating rates are soaring and there may be thousands more "excess deaths" there by freezing this winter. Already, a debate is underway urging UK withdrawal from the EU. It remains to be seen whether the heat from public opinion will warm policy making. Britain is a major candidate for imminent riots.
This current reversal is directly opposite to the map I drew at FTW between 2003 and 2006 which said that Britain would surrender its energy sovereignty to Europe. It did in 2006. But the combination of the sudden (if short-lived) surge in British gas production with the crisis in Eastern Europe has turned a few things on their heads. What is happening in Eastern Europe and the many other places around the world where riots are breaking out will give us clues as to what to expect here. I am afraid that we will be seeing civil unrest in the U.S. very soon and this is the gloom the media is cavalierly trying to "spare" us from so that Americans may have their inaugural moment.
As for Britain and the EU, the Russian gas shut-off will end, hopefully by the end of this next week. A human can freeze to death in a matter of minutes. At present I see no substantial progress. The EU is almost blatantly capitulating by throwing Ukraine back to Moscow. Here! We don't want it! The shut off will pass. Britain's momentary ability to act as a swing producer for Europe cannot last. Public opinion in Britain will likely surge towards secession. But Her
Majesty's government knows clearly that this is suicide. Britain will ultimately remain at the end of the Russian natural gas pipeline. But in what condition is anyone's guess. Britain sits along another fault line – the one separating Europe from North America. As Mexico will decide whether it is a Latin American nation or a North American nation, Britain will be compelled to choose whether it is a European nation or a part of the United States, Canada and its far-flung
Commonwealth. As I write, the Russian gas shut off continues and the crisis in Europe nears catastrophic proportions. Please, any regular readers who live in or near the region, send us your reporting, local stories you and find, and your analysis. Artificial conditions in Europe have given us a glimpse of our near future. In Sofia, Budapest and elsewhere people and factories have, as a matter of survival, turned to burning coal and wood to stay alive. This is not as simple as just
a return to the Middle Ages because there are hundreds of times more people, concentrated in smaller areas. Already major cities in Eastern Europe are choking on air and water pollution from these "alternative fuels".
CIVIL UNREST IN THE UNITED STATES
This is little more than hunch at the moment. The three likeliest states to have civil unrest first are Michigan, California and Ohio. These are the states hardest hit by job cuts. Ohio is of most concern to me. California is just huge and fragmented. The "fires" here would be rapidly "extinguished" by a state that has well-developed and longstanding historical plans for civil unrest going back to the 1960s. There are really probably five states in California and the fire is unlikely to spread from one "region" to another because each region has a different economic base and a different culture. Michigan is geographically off to the side of the board and already something of a "wasteland". There are no densely-packed masses of dry kindling nearby.
But Ohio is entirely different. Already devastated by auto layoffs and other massive corporate failures, Ohio's industrial areas border and are in close proximity to Kentucky, West Virginia, Indiana and Pennsylvania. Lots of kindling in those states. At the same time as Ohio is devastated by DHL, auto and other layoffs, much of the nation's high-tech wind turbine industry in Ohio is also shutting down at the same time… just when we need it. The snake eats its own tail
for nutrition. It is the way money works… for now.
Civil unrest in Ohio could easily infect across state lines here, and cross another fault line that runs east and west, separating north from south; the Mason Dixon. Other earthquakes might be triggered. Eastward from Ohio are Pennsylvania and New Jersey. I wonder how much inter-agency advance planning DHS and FEMA have gone through so that they might operate fluidly across many borders, radio frequencies and jurisdictions. Those contingencies were planned for in the Patriot Act which congress didn't or couldn't read before voting on it. I described all of this in detail in my essay, "The 'F' Word" in 2001: http://www.fromthewilderness.com/free/ww3/nov202001.html.
There isn't even ten per cent of the military manpower required to impose national martial law in the Continental U.S. (CONUS). But my guess is that there will be an expansion of troop deployment in the region around Ohio soon. We should all be watching where troops are stationed as they (and if) they start coming home.
We all will have a clear understanding of who Barack Obama is and what he represents in short order. He, his administration, and whatever his base is are going to have to show their cards soon. Very soon. What we know is that many of the so-called energy and economic "solutions" espoused by Barack Obama during the campaign and since the election will fail abysmally, at or near the gate. What we pray for are more frequent and stronger signals that ears are open to any who might have some real answers… namely the Peak Oil/Sustainability movement.
In the meantime… In looking at how civil unrest will unfold in the United States it has become pretty apparent that martial law, as we understand it will not be marked by either large numbers of troops/police in the streets or the oh-so-beloved concentration camp myths of the Far Right. The reason I have made this statement consistently for at least nine years is the same in both cases: lack of resources. There are not enough troops and there is also not enough money, food and manpower to put millions of Americans in expensive concentration camps… AND feed them.
The current economic paradigm's approach will be to leave as many displaced Americans as a self-mobile migrant work force that will feed, clothe and house itself on its own. That is much less expensive! Plus, when massive labor is needed it will take the labor pool to the work like a man dying of thirst will run for fresh water. The basic expense here is just to police and contain the mess, sort of put a fence around it.
I am one of the few fools to have read all of both the Patriot Act and the Homeland Security Act, I mean every word. I dissected both at FTW.
All these landmark pieces of legislation are really preparing for is two things. First, the absolute protection of critical infrastructure (e.g. water, power, telecommunications, Internet, hospitals, police and fire stations, airports, military bases, etc.). This is where the military will be used. Second, the maximized control of civilian populations through technology which can deprive them of access to both cash and credit (i.e. food and mobility). That coupled with nearly ubiquitous electronic surveillance and some very effective, non-lethal, area-denial weapons. Already I can see that millions of Americans are locking themselves into their own "die-off" prisons and the realization will not hit them for several years. I would not want to be locked in that virtual prison knowing my fate there.
I think it is much less likely that TPTB are interested in us… or even me. I think they more fear a Spartacus now – or many of them – emerging from those who are about to die. Those of us here who followed the map and changed our lives have removed ourselves from that demographic. We will be needed, and soon. We must be ready.
So MY FIRST RECOMMENDATION is this:
Unless you live in a place surrounded by concrete canyons, and if you have family or a close network, a real neighborhood, go out and buy 5 watt FM walkie-talkies with rechargeable batteries. It's been a few years since I've done research but these radios, which can reach up to
two-and-a-half miles, are important for two reasons. First, they do not require any kind of licensing. Neither do they require the use of a satellite or a microwave relay tower. They can't easily be jammed or shut off. They are direct point-to-point and they will work when everything else fails.
A few on this blog were talking about Ham and shortwave. Both are going to be important but (repeating myself) we must survive the transition stage first. In all thinking now, start locally and work outward. If you do not command the ground under your feet you will never command the ground beyond it.
In an emergency you and your family might be forced to move in a mass exodus with large crowds. How will you know where your family is? How will you keep them together? How will you find one who is lost? How can you use your family to do things that others can't? Remember that if a bear attacks your campsite you do not have to be faster than the bear. You only have to be faster than the slowest camper. (Wink to Barry Silverthorne.) Quick, effective, close-in intelligence and reconnaissance will allow you to keep your heads while others are losing theirs.
Now I know that the Army Signal Corps and Army Security Agency have equipment capable of jamming all these FM frequencies in any battlefield condition. If you have this kind of communications at your disposal, however, you'll probably be far away by the time anything like that happens.
From now on start all of your immediate thinking from the local outward. Those of us who have tried so hard to save the world must also seriously think about saving ourselves from it as well.
NY Times: Investment Planning in the Oil Industry Plunged into Turmoil
Ref - http://www.nytimes.com/2009/01/15/business/worldbusiness/15oil.html?_r=1&ref=business
From the Indian Ocean to the South Atlantic to the Gulf of Mexico, giant supertankers brimming with oil are resting at anchor or slowly tracing racetrack patterns through the sea, heading nowhere. The ships are marking time, serving as floating oil-storage tanks. The companies and countries leasing them for that purpose have made a simple calculation: the price of oil has fallen so far that it is due for a rise. Some producing countries are trying to force that rise by using the tankers to withhold oil from the market, while traders are trying to profit by buying cheap oil now to store and sell at a higher price later. Oil storage has become so popular that onshore tank capacity is becoming scarce. Only six months ago, companies up and down the energy pipeline were rushing oil to market, struggling to keep up with galloping demand and soaring prices. Now, with the global economy slumping and people driving less, demand for oil has plunged — and the same companies are acting in ways that would have been unimaginable until recently. Oil producers are shutting down rigs, refiners are producing less gasoline, and investment planning throughout the industry is in turmoil. The problem for the companies is not just that prices are lower, but that they have become [extremely] volatile . . .
UK Telegraph: "Americans must prepare themselves for a dollar collapse"
Ref - http://www.telegraph.co.uk/finance/4125947/Willem-Buiter-warns-of-massive-dollar-collapse.html
The long-held assumption that US assets - particularly government bonds - are a safe haven will soon be overturned as investors lose their patience with the world's biggest economy, according to Willem Buiter. Professor Buiter, a former Monetary Policy Committee member who is now at the London School of Economics, said this increasing disenchantment would result in an exodus of foreign cash from the US. The warning comes despite the dollar having strengthened significantly against other major currencies, including sterling and the euro, after hitting historic lows last year. It will reignite fears about the currency's prospects, as well as sparking fears about the sustainability of President-Elect Barack Obama's mooted plans for a Keynesian-style increase in public spending to pull the US out of recession. Writing on his blog , Prof Buiter said: "There will, before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place . . ."
New York Magazine: Elite Wall Street Traders Have Been Busy Stockpiling Gold, Guns, Food, Water, and Generators in Preparation for Total Collapse
Ref - http://nymag.com/news/features/all-new/53372/
During the final months of 2008, as the financial markets imploded, talk on trading desks turned to food and water stockpiles, generators, guns, and high-speed inflatable boats. “The system really was about six hours from failing," says Gene Lange, a manager at a midtown hedge fund, referring to the week in September when Lehman went bust and AIG had to be bailed out. "When you think about how close we were to the precipice, I don’t think it necessarily makes a guy crazy to prepare for the potential worst-case scenario." Preparations, in Lange’s case, include a storeroom in his basement in New Jersey stacked high with enough food, water, diapers, and other necessities to last his family six months; a biometric safe to hold his guns; and a 1985 ex-military Chevy K5 Blazer that runs on diesel and is currently being retrofitted for off-road travel . . . He’s not the only one. In his book Wealth, War, published last year, former Morgan Stanley chief global strategist Barton Biggs advised people to prepare for the possibility of a total breakdown of civil society. A senior analyst whose reports are read at hedge funds all over the city wrote just before Christmas that some of his clients are “so bearish they’ve purchased firearms and safes and are stocking their pantries with soups and canned foods." Meanwhile, while the overall gold market has fluctuated, the premium for gold coins - the difference between the price for gold you can hold in your hand and that for "paper gold," such as ETFs - rose to an all-time high of 20 percent.
Ohio TV: Ohio's Unemployment Compensation Fund Has Run Out of Money
Ref - http://www.whiotv.com/money/18464199/detail.html
Ohio's unemployment compensation fund has been depleted, forcing the state to begin borrowing federal funds. Officials said no disruptions in benefits are expected. The Ohio Department of Job and Family Services said Monday the federal government has already approved $500 million to be borrowed by Ohio to pay benefits in January and February. The state has requested that it be able to use $50 million of that amount to pay benefits this week. Agency spokesman Dennis Evans said Ohio is committed to preventing the unemployed fund from missing any payments. Ohio and other states have seen their unemployment funds decrease drastically as the number of unemployed workers has surged amid the recession . . .
Washington Post: Federal Reserve Report Indicates Worsening Collapse
Ref - http://www.washingtonpost.com/wp-dyn/content/article/2009/01/14/AR2009011402143.html
Business conditions across a broad range of regions and industries have continued to deteriorate in recent weeks, according to a Federal Reserve report released yesterday. The Fed's "beige book," a compilation of anecdotes about business activity around the country, bears out gloomy forecasts of a weak start to 2009. It said that across the country, retail and auto sales were weak, manufacturing activity kept falling and banks remained reluctant to lend. "If you're looking for something uplifting, you won't find it in the beige book," said Bernard Baumohl, an economist for the Economic Outlook Group, a consultancy in Princeton, New Jersey . . .
NY Times: "New wave of [massive] bank losses overwhelming the federal government's emergency response . . ."
Ref - http://www.washingtonpost.com/wp-dyn/content/article/2009/01/14/AR2009011404198.html
A new wave of bank losses is overwhelming the federal government's emergency response, as financial firms struggle with the souring U.S. economy, the rapid deterioration of global markets and the unexpectedly high costs of shotgun mergers arranged by federal officials last year. The problems are intensifying the pressure on the incoming administration to allocate more of the $700 billion rescue program to financial firms even as Democratic leaders have urged more help for distressed homeowners, small businesses and municipalities. Senior Federal Reserve officials said this week that the bulk of the money should go to banks. Some Fed officials suggested that even more than $700 billion may be required, and financial analysts at Goldman Sachs and elsewhere say banks will have to raise hundreds of billions of dollars from public or private sources. This year is expected to be worse for banks than last year, senior government officials and analysts say. The money from the first half of the rescue program helped banks replace most of the money they lost during the first nine months of 2008. But the firms are beginning to report fourth-quarter losses larger than expected, and the economic environment continues to worsen.
>the first test coming from Russia
. . . Take your pick from those below or any number of about thirty or so other new 'tests':
El Paso Times: U.S. Joint Chiefs of Staff Warn that Mexico is at Risk of a Rapid and Sudden Collapse into Somalia Type Chaos
Ref - http://www.elpasotimes.com/newupdated/ci_11444354?source=email
Mexico is one of two countries that "bear consideration for a rapid and sudden collapse," according to a report by the U.S. Joint Forces Command on security threats. The command's "Joint Operating Environment" report, which contains projections of global threats and potential next wars, puts Pakistan on the same level as Mexico. "In terms of worse-case scenarios for the Joint Force and indeed the world, two large and important states bear consideration for a rapid and sudden collapse: Pakistan and Mexico. "The Mexican possibility may seem less likely, but the government, its politicians, police and judicial infrastructure are all under sustained assault and press by criminal gangs and drug cartels. How that conflict turns out over the next several years will have a major impact on the stability of the Mexico. Any descent by Mexico into chaos would demand an American response based on the serious implications for homeland security alone."
and . . .
NY Times: Latvian Capital Plunged Into Chaos as Economic Riots Explode
Ref - http://www.nytimes.com/2009/01/15/world/europe/15latvia.html?_r=2&ref=patrick.net
Violent protests over political grievances and mounting economic woes shook the Latvian capital, Riga, late Tuesday, leaving around 25 people injured and leading to 106 arrests. In the wake of the demonstrations, President Valdis Zatlers threatened Wednesday to call for a referendum that would allow voters to dissolve Parliament, saying trust in the government, including in its ability to deal with growing economic problems, had "collapsed catastrophically." For years, Latvia boasted of double-digit economic growth rates, but it has been shaken by the global economic downturn. Its central bank has spent a fifth of its reserves to guard against a steep devaluation of its currency and experts expect a 5 percent contraction of the country’s gross domestic product in 2009. Salaries are expected to fall substantially, and unemployment is expected to rise . . .
COLIN POWELL SAYS BIG CRISIS JAN 21 OR 22
Ref -
NY Times: Release of More Federal Emergency Bailout Money Gains Favor
Ref - http://www.nytimes.com/2009/01/13/business/economy/13econ.html?_r=2&ref=business
Republican and Democratic Senate leaders signaled on Monday that they would support the release of the second half of the Treasury’s $700 billion financial system bailout fund, despite anger among many rank-and-file lawmakers over the Bush administration’s management of the program. As Congress prepared to act, regulators directed thousands of banks to provide more information about how they have used the money from the bailout program, responding to concern that financial institutions were hoarding the cash rather than lending it to businesses and consumers . . .
Mike Ruppert: "Economic collapse is accelerating . . . you can expect major breakdowns in daily life likely within just a few months"
Ref - http://mikeruppert.blogspot.com/2009/01/this-day-of-reckoning-obamas-speech-on.html
In Thursday's speech the President-elect, in my opinion, began weaning the American people, from their so-deeply ingrained sense of entitlement to wasteful excess. He called for end of an era of "profound irresponsibility". He set the right tone initially about the gravity of the crisis but stopped short of Peak Oil and the fact that there can and will be no recovery. He chided us for living beyond our means and flatly said that there will be cutbacks in government services. He predicted double digit unemployment. (I see 20% or greater unemployment by January 2010.) He continues to talk about recovery but I'm sure he knows there won't be one. In fact he said that this could be a recovery that it might not be possible to recover from. We are being prepared. I wouldn't be at all surprised to see a couple of days with 700+ point losses in the Dow over the next ten days to two weeks. The data is just horrendous and it is becoming torrential around the globe as the Gaza crisis diverts attention. Europe's economy is contracting at a faster rate than in the 30s. In the meantime the Russian shut-off of European gas supplies is wreaking havoc, especially in the Balkans, the Czech Republic and elsewhere, causing factories to be shut because there isn't enough energy to run them and keep people from freezing. Corporate pension funds in the US are facing serious shortfalls. Unemployment claims have crashed three state web sites. Everyindustrialized nation - including the U.S.) is preparing for civil unrest. And we haven't seen Q4 earnings yet.