Archive - Mar 2011

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.

The next shoe drops as Japan realizes that what radionuclides go up, they typically come down, even despite a relatively short half life (and say goodbye to sushi unless one has a penchant for 15 eyed albacore). Bloomberg reports that "Radiation was detected in water in Tokyo and the prefectures of Tochigi, Gunma, Saitama, Chiba and Niigata, Japan’s Ministry of Education, Culture, Sports, Science and Technology said today in a faxed statement." But since nobody has any reason to doubt what the Japanese government says, here is the dislaimed: "Samples of tap water taken yesterday in Tokyo and five nearby
prefectures showed traces of radiation that were within acceptable
levels, the Japanese government said." And with the radioactive cloud about to loop back and hit Japan head on, things are about to get far worse, but in the meantime those living in Tochigi Prefectuve are advised to not drink the water: "Tochigi Prefecture’s reading of radioactive iodine-131 was 77 Becquerel per kilogram, the highest among the prefectures, while the level of iodine found in Tokyo’s Shinjuku district was 1.5. All the numbers were within the 300 Bq/kg limit, the ministry said." In the meantime the "Under Survey" farce continues: "Readings couldn’t be taken in Miyagi and Ibaraki prefectures because of disruption of water supply following the magnitude 9 earthquake that struck Japan on March 11, while Fukushima Prefecture takes its own readings, the statement said." But as long as people are indoors, and preferrably under their desk, when they drink radioactive water, all should be well, yes? Something tells us this total and utter bullshit, will lead to at least one more TEPCO executive profuse crying bout in front of the cameras within 48 hours.

It has begun - From the AP: "Top officials from the United States, Europe and the Arab world have announced immediate military action to protect civilians amid combat between Libyan leader Moammar Gadhafi's forces and rebel fighters. French President Nicolas Sarkozy said after an emergency summit in Paris on Saturday that France has already taken military action against Libya. Sarkozy said "our determination is total." Earlier Saturday, Libyan government troops forces stormed into the rebel capital of Benghazi, apparently ignoring a proclaimed cease-fire and potentially complicating any allied military action."

Given the presidency’s dual role as chief of state as well as chief executor, celebration of a multitude of ceremonies is necessary and fitting – all the more in times of peril when the nation’s spirit needs uplift. But Mr. Obama’s sports addiction, his gliterrati extravaganzas, his causal acknowledgement of our closest allies’ tragedies, and his wife’s Marie-Antoinette progressions are increasingly bizarre. Importing a Chicago Daley mob family member, supposedly as a pragmatic chief of staff, so far has not injected restraint much less austerity.

The stakes are high ...

According to the latest Digitalglobe overflight, the situation in Reactor 4 continues to deteriorate. We wonder where precisely in the Reactor 1,3, and 4 wreckage are the working water pumps that are about to be electrified? Far more importantly, since heat appears to be the biggest issue, why have no thermal or IR photos been released to the public, and most importantly why is the Japanese government actively covering up thermal data? From the JPost: "As the world continues to gaze with concern at Japan’s Fukushima nuclear power plant, hi-tech security cameras installed by an Israeli defense firm are recording events at the troubled core from an insider’s vantage point. The Arava-based Magna BSP company, which specializes in producing and installing stereoscopic sensory and thermal imaging cameras, had been contracted to place cameras around one of the plant’s six cores – the core that has been experiencing explosions and overheating. Speaking to The Jerusalem Post on Monday, Magna’s head, Haim Siboni, said the thermal cameras also had the ability to detect the presence of radioactive clouds in the air, but added that Magna had not been able to gain access to the images recorded by the cameras at this time." Stunningly not even the contractor is allowed to see its own recorded data: "Although Magna is able to gain remote access to its computer system, which receives the cameras’ images, Siboni said his company had not yet been authorized to do so. “We have not been allowed to take control remotely yet,” Siboni said." Surely the classified data must be perfectly normal if the completely discredited Japanese government is keeping it under such tight lock and seal.

Three days ago, Zero Hedge asked the question that seems so mindnumbingly logical and obvious, it was perfectly normal that nobody in charge had asked it yet, i.e. "Why isnt Fukushima crawling with iRobots armed with cameras?" Luckily, someone in Japan appears to read our Twitter account: as was just reported, "The Special Ops group of Japan's Self Defense Forces has asked iRobot for some robotic assistance with the situation at the Fukushima Dai-1 nuclear plant, where several reactors are dangerously unstable after a 9.0-magnitude earthquake followed by a tsunami led to failures of their cooling systems last week. Four robots, including iRobot's Packbot 510 and Warrior 710, left Bedford, Mass., this morning on their way to Japan, along with a team of iRobot employees to provide support, an iRobot spokesperson told me." Um, it took them one week to figure out that there is a public company (probably trading at nosebleed valuations) that does just what everybody has been bitching and moaning can not be done in Fukushima by humans...ONE WEEK!? Anyway, at least the option will now be there. Although as the following video presents, a comparable option was available 25 years ago in Chernobyl. Well, with a few minor differences...