Archive - Mar 19, 2011

Black Swan Clusterflock +1. As if earthquakes, tsunamis, nuclear meltdowns and war was not enough, the Examiner now discloses that a replay of the BP oil spill could be in the making, sending WTI to the (super)moon, the economy collapsing, and Ben Bernanke starting the printer in advance of QE 666. To wit: "The U.S. Coast Guard is currently investigating reports of a potentially
massive oil sheen about 20 miles away from the site of the Deepwater
Horizon oil rig explosion last April." There are no definitive reports yet, but we should now for sure within hours, if the Keppel FELS built TLP is indeed the culprit: "According to Paul Barnard, operations controller for the USCG in
Louisiana, a helicopter crew has been dispatched to the site of the
Matterhorn SeaStar oil rig, owned by W&T Offshore, Inc." And if preliminary reports are correct, BP will have been the appetizer: "Multiple reports have come in of a sheen nearly 100 miles long and 10 miles wide originating near the site." If confirmed, Obama can kiss tomorrow's Rio golf outing goodbye.

The Libyan war has now begun. It pits a coalition of European powers plus the United States, a handful of Arab states and rebels in Libya against the Libyan government. The long-term goal, unspoken but well understood, is regime change — displacing the government of Libyan leader Moammar Gadhafi and replacing it with a new regime built around the rebels. The mission is clearer than the strategy, and that strategy can’t be figured out from the first moves. The strategy might be the imposition of a no-fly zone, the imposition of a no-fly zone and attacks against Libya’s command-and-control centers, or these two plus direct ground attacks on Gadhafi’s forces. These could also be combined with an invasion and occupation of Libya. The question, therefore, is not the mission but the strategy to be pursued. How far is the coalition, or at least some of its members, prepared to go to effect regime change and manage the consequences following regime change? How many resources are they prepared to provide and how long are they prepared to fight? It should be remembered that in Iraq and Afghanistan the occupation became the heart of the war, and regime change was merely the opening act. It is possible that the coalition partners haven’t decided on the strategy yet, or may not be in agreement. Let’s therefore consider the first phases of the war, regardless of how far they are prepared to go in pursuit of the mission.

30 miles from Los Angeles!

According to the BBC, the Gulf Cooperation Council has just gotten involved with the UAE pledging 24 aircraft and Qatar - 4 to 6. It is still unclear if Saudi Arabia will now lead a two front war following its invasion of Bahrain last week. Additionally, Al Jazeera reports that the Libyan authorities had detained one of its reporting teams several days ago when working in west Libya. The channel said, in a report on its website, that the team included two correspondents, one Tunisian and another Mauritanian, and two cameramen, one Norwegian and one British. But most troubling is that per Gaddafi's earlier address to the people he would start arming the civilian population to defend Libya. From Reuters: "Libyan leader Muammar Gaddafi said on Saturday he will arm civilians to defend Libya from what he called "colonial, crusader" aggression by Western forces that have launched air strikes against him. "It is now necessary to open the stores and arm all the masses with all types of weapons to defend the independence, unity and honour of Libya," Gaddafi said in a speech broadcast on state television hours after the strikes began. "We call on the peoples and citizens of the Arab and Islamic nations, Latin America, Asia and Africa to stand by the heroic Libyan people to confront this aggression, which will only increase the Libyan people's strength, firmness and unity," he said." Whether that means that UN forces will treat every civilian as a possible enemy combatants will be seen upon the land incursion which should commence within a few days. Unclear if Xe will be involved this time.

Allied warplanes in a coalition led by France and backed by Arab nations have gone into action to stop Libyan leader Muammar Gaddafi's forces attacking the rebel-held city of Benghazi. U.S. and British ships and submarines fired more than 110 Tomahawk cruise missiles at Libyan targets to take out their air defences, although no U.S. aircraft were flying over Libya. Following are assets that are being used, or could be used, in action against Muammar Gaddafi's troops and those belonging to his military.

Feeling overwhelmed by all the news coming out of the Middle East and North Africa (MENA)? With at least 12 different countries now on the verge of full blown violent rioting, or already having succumbed to a revolution of some form, it is easy to lose track of all the ins and outs. Luckily, the WSJ has compiled a handy real time interactive timeline that highlights the increasing escalation in events in the MENA region, broken both chronologically and cartographically. Bookmark the following link to be always up to date on all the most recent events.

Alas, one hundred years of the government’s attempts to mute the natural business cycle are slowly and painfully coming to an end. A period where the government proactively encouraged consumption until it became 70% of the economy, we produced very little, and our savings rate reached zero. A period where home ownership was promoted as the ultimate supreme goal until the last citizen that could fog a mirror yet was least able to afford it was suckered in. As this leveraged consumption pyramid is finally ending, the government and central bank have embarked on one final mission to prop it up using the same tools that got us here in the first place: more leverage. Only this time on a logarithmic scale. Unfortunately, the scale is so large that it will not only guarantee an endgame, but it will accelerate it. The visual below contains a few pieces of evidence that seem to confirm this, namely that over a ten year period: the consumer is stuck with an underwater balance sheet and the Fed’s attempt to create yet another bubble is only making it worse; outside of government efforts, the economy is unable to generate sustainable job growth; and finally, the leverage scheme is so large that it no longer has a positive impact on growth (“debt saturation”).

Regardless of your traditional investment preferences, tangible assets like gold and silver can help make the profitability and safety of your retirement portfolio far more attainable.

Simply put, gold can reduce the volatility of your retirement savings.  Historically, gold has moved counter to the direction of stocks, bonds and mutual funds.  Technically speaking, precious metals are "negatively correlated" to stocks.

According to NBC, the US has just launched its first attack in the Libyan Offensive whose name is still up for grabs (Operation Wealth Effect? Operation Nobel War Price? - you decide), by firing missiles at Libyan air defenses, which we assume means radar installations. We expect night vision videos of missiles hitting their targets ala Operation Desert Storm to soon push March Madness out from most watched prime time TV post. ABC News is covering this live for those who can't wait to see stuff blowing up in shades of green.

"Sometimes I wake up and I don't know who I am" Nicholas Johnny Scambo

A dramatic video of a Libyan jet being shut down over Libya has been captured and is making the rounds in the YouTube-sphere. As the Independent observes, "A warplane was today shot down outside the opposition stronghold of Benghazi, as international leaders including David Cameron gathered in Paris to make final preparations to impose a no-fly zone over Libya. The jet was observed over the city for some time before reportedly going down in flames, amid the sound of artillery and gunfire. " Yet what is surprisingly and potentially surreal is the stiff insistence by the Libyan government that they continue to preserve the terms of the ceasefire announced yesterday: "Libyan authorities insisted that their forces were holding to a ceasefire announced yesterday and repeated an invitation for international observers to enter the country today to monitor it. Deputy foreign minister Khaled Kaim told BBC Radio 4's Today programme: "The ceasefire is real, credible and solid. We are willing to receive observers as soon as possible, even today." Rebel sources claim that military assaults by forces loyal to Muammar Gaddafi on cities including Benghazi, Misrata and Ajdabiya continued even after the ceasefire announcement." Which begs the question: is Gaddafi really an idiot, or are these merely false flag provocations by the rebel alliance (with or without the assistance of France) to encourage an escalation? The answer should be promptly revealed once it is determined just who was flying the downed jet. We are confident the media will first investigate such an answer before jumping to conclusions.

Recently, the world was subjected to the worst kind of manipulative propganda: that emanating from a so-called scientist who used his tenuous affiliation with MIT to lend his ideas credibility and spread outright disinformation and propagate a false sense of calm, which may have well cost people their lives as it came just days ahead of the biggest explosions seen at Fukushima last week. Today we present what an actual objective, scientific analysis of the risks and pitfalls at Fukushima should look like, courtesy of Ben Monreal of the USCB department of physics. Is this is a comprehensive overview of all that could go wrong (and right)? Of course not- after all the Japanese government still refuses to release actual actionable information (the world should be demanding thermal imagery from Fukushima, but oddly isn't). But under the existing conditions, this is probably one of the better reports we have read on the matter.

Whether related to the broadly escalating violence in the region or not, the latest development out of Israel is sure to bring even more geopolitical tension, especially with Iran adn Syria already on edge following their own violent protests (and arguably looking for a political scapegoat). BBC reports that "Palestinian militants in Gaza have fired dozens of missiles into southern Israel in what appears to be their heaviest such barrage in two years. About 50 mortars were fired - two Israelis were hurt, Israel says." Never one to step away from an escalation, Israel replied in kind: "Israeli tanks later shelled targets in the coastal strip, wounding at least five people, Palestinian officials say." We are confident newsflow out of Israel and Gaza will intensify as the latest and greatest Black Swan out of the middle east is now stretching its wings.

The FBI, which apparently has no major criminals to pursue, is now busting those who are preparing for the dollar's imminent destruction. Bernard von NotHaus, head of the National Organization for the Repeal of the Federal Reserve and Internal Revenue Code, commonly known as NORFED and also known as Liberty Services (his website can, or rather could, be seen here), which since 1998 has been issuing silver coins as a replacement for the relentlessly devaluating US currency, was convicted today by a federal jury of
making, possessing, and selling his own coins. "
Following an eight-day trial and less than two hours of deliberation,
von NotHaus, the founder and monetary architect of a currency known as
the Liberty Dollar, was found guilty by a jury in Statesville, North
Carolina, of making coins resembling and similar to United States coins;
of issuing, passing, selling, and possessing Liberty Dollar coins; of
issuing and passing Liberty Dollar coins intended for use as current
money; and of conspiracy against the United States." The devious scheme for which von NotHaus faces up to 15 years jail time: "NORFED’s purpose was to mix Liberty Dollars into
the current money of the United States. NORFED intended for the Liberty
Dollar to be used as current money in order to limit reliance on, and
to compete with, United States currency." In other words make the US currency less credible. We are confident the Chairsatan will take this shining example of what happens to "counterfeiters" of US currency to heart, and promply proceed to release another cool trillion in green 75% cotton/25% linen products, forcing US jails to promptly fill up with millions of subversive elements who no longer wish to interact with the former reserve currency.

Update: And it's over. Barely a mention of Libya, quote of the day - "I am really looking forward to visiting Rio tomorrow."

Will the glorious Nobel peace prize award winner (whose country according to SkyNews will not be involved in the first action over Libya but instead plans on a sea-launched - as in Kearsarge - missile attack) discuss Libya? Find out in the audiocast below.