BP set to make $Trillion$

The blow-out in the Gulf of Mexico is the best thing to happen to BP in years.

Perhaps I'm a bit narrow in my perspective. This BP failure will increase profits for all the well drillers. Just look at the profits of Exxon after the Exxon Valdez fiasco.

Here is how it works. Screw-up and make a mess, all you have to do is raise prices to cover the clean-up costs. Tack a few extra cents on the price and increase the profits. The oil companies know we are addicts. We have to buy the petrolem products. These products include everything from gasoline to road tar to plastics and pharmaceuticals.

Now our most wise Congress is trying to raise the liability cap. Where do you think the oil companies will get the money to cover the increased liabilty? Uh duh, the consumer.

The consumer pays all the bills. We pay for the clean-up costs, we pay for the profits, we pay the shareholders and we pay for all the taxes.

All the oil companies will share in this windfall. We will see increased fuel costs and our Congress will gain substantially increased tax revenues on the profits we pay for. Well at least until the Ponzi scheme runs out.

I don't have any answers. If we cap profits, the oil industry will decline. We are addicts and we will get our fix at any price. If we raise the liability cap, we force the price of petro-chemical to even higher levels. Perhaps it is time to change corporate laws and make the shareholders foot the bill. But this will just transfer the costs to other investors/businesses who will raise their prices. We, as a nation, could seize the corporate assets within our country. But this just transfers the mess to us and puts the operational aspects of the business in the hands of the very same government that has a miserable history of balancing the books and gross mismanagement of almost every program they have ever created.

I don't see an answer. I'll admit I haven't a clue. I just wish Congress would fess-up and admit they haven't a clue either. But its an election year. Every incumbent will do everything they can to blow smoke and move the mirrors. Don'tcha know? Congress has all the answers.

It's the End of the World as We Know It

It's the End of the World as We Know It

Well, I was almost right. The elections in the UK went to the Tories. However I was wrong about the Liberal Democrats. Rather than picking up a few seats, they lost five.

What is important is the UK now needs a coalition Parliment. Already Cameron has approached Nick Clegg of the LibDems.

Here is where it gets interesting. In the debates, Clegg made it clear that the LibDems were unhappy about military expenditures. A reasoning person might interpret this to mean less involvement in the Middle East. This translates to the UK not being such a loyal participant with the bully on the block.

The US will be forced to either stand alone or back off when it comes to foreign countries. Much of the US corporate income is based upon foreign sources. Without the US military, revenue as well as goods decline to zip.

As I pointed out in a previous post, as goes the UK, so goes the US. Come November, the republicans will regain both houses. The democrats have run their course and won't re-emerge as a viable party unless and until they completely re-invent themselves.

Will it matter? In the long run, yes. The US needs a multi-party system. The dems aren't inherrently evil, just misguided. Are the reps better? On some national problems, yes. Otherwise and on the whole, both parties are composed of a majority of self-serving idiots. I state idiots based upon the definition being incapacity to learn.

No matter, likes like likes. Take this to equate to voters elect "their own kind." It is all about money. Money is interpreted as security. Screw with the electorate's security and suffer the consequences.

The US pursued maximum tax returns with minimum investment. We encouraged the exporting of manufacturing and resourse extraction. We produce almost nothing tangible. The electorate voted themselves money out of the common pot. The problem was we had to finance the pot by borrowing from others and inflating the money supply.

We voted to rape our children and grandchildren's financial future. Go find yourself a copy of the movie, "Wild in the Streets."

Watch it and then look at the use of Mood Altering Drugs (MADs), alcohol and illegal drug usage. The whole country is crying, "Don't bogart that joint."

"It's the end of the world as we know it, but I feel fine." Well not exactly. I'm scared SHITLESS!!!

Come Watson, The Game is Afoot

Come Watson, The Game is Afoot

Today is general elections in the UK. I haven't looked, heard of or scried in my crystal ball as to who is getting the votes.

Instead, I'll look at this from the perspective of game theory. Apologies for not remembering the Liberal Democrat's name and admittedly I don't know any British political party's platform. For this argument, it doesn't matter.

The candidates are Gordon Brown (incumbant)(GB), David Cameron (DC) and what's is name.
Scenario: Britian is effectively broke and a large percentage of its populace is on redundancy pay (British equivalent of unemployment). Britian is on a dual monetary standard, pounds and Euros. Credit exposure is in the same league per capita as the US.

If the Brits vote Brown, nothing will change.

If for Cameron, not much changes.

If what's 'is name gets a large percentage of votes and not neccessarily wins, changes will transpire.

So here come human nature. If a country is at war, the incumbant wins. If the economy is doing poorly, the opposition wins.

If it looks like complete doom and gloom, the third party skims off some votes.
Brown and Cameron are mainstream political party hacks. Their parties have been the effective power in Britian. They are flip-sides of the same coin.

Britian has been involved in Iraq and Afghanistan. We mustn't forget that Britian has effectively gone into economic warfare against Wall Street and the entire world banking establishments. You gotta name the enemy.

So here are the probable outcomes in order:

#1 Brown will lose by a slender margin. Cameron will win by a slim margin. The Liberal Democrats will get a few more seats in Parliment.
Six months from now, the coalition goverment will collapse.

#2 Brown wins by a slim margin.
Liberal Democrats get a few more seats and coalition government fails in a few months.

#3 Lastly and the 100-1 odds against, the Liberal Democrats win.
Coalition government fails in less than six months.

Failure is not an option, it is inevitable. Government produces nothing. It is a ravenous consumer of wealth. Wealth is the force behind productivity. The problem arises when wealth takes flight out of the production sector.
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So why this blog? The US is European. We are the prodigal step-child of Europe. To put this in perspective, the national language, English, won out over German by one vote. Furthermore, the US has refused to make English the "Official" language by law.

Ergo, as goes Britian so will go the U.S.A. come November.

People are afraid and will almost always vote the devil they know. The swing votes will make the difference and those votes will be cast for wealth protection. And even these votes will be split. The unemployed will vote for redundancy pay. Big money will vote for bail-outs. It is all about the voter's pocket-book.

Welcome to the "Brave New World Disorder."

Watson, the game is afoot and I have to place my bet.

Labels: Truth or Consequences

Labels: Truth or Consequences

As I have stated in previous blogs, I'm an economic news junkie. One of my most frequented sites is 321gold dot com.

Several times a week, some posting trots out Ayn Rand and her ideas about the economy. Usually it describes some connection to the csars and princes of the economic manipulation community.

Having read several of Ayn Rand's books, I find this more than just a little bit smelly. It just plain stinks of selective quoting to support some talking head's thesis, nay not thesis but rather untested hypothesis.

However, don't mess with what works. We live in a society that believes we are a democracy and therefore all you need to convince is a simple majority.

Still, I find it fascinating. I contend that this is fertile ground for a study of the human ability to use logical reasoning.

Over the last several decades, I have read several thousand books. Currently I'm semi-engrossed in "Sagas of the Icelanders." Would it be fair to state that my reading has influenced my perceptions of reality? Of course. Would it be realistic to claim that these authors shaped my perceptions? No, not at all. The problems most attributed to Ayn Rand is the concepts of self and its step-brother; greed.

Most people will scream loudly against greed unless they have more than their neighbors. Greed is a natural function of the human organism. Imagine the early hunter-gatherers disdaining greed and choosing to eat mice rather than taking down a bison or mammoth. Choosing the mice doesn't provide any food security for tomorrow. Greed insures the future.

None of this is meant to infer that greed without ethical conduct is good or natural. I don't believe in free lunches. Ergo, sharing among friends is the most beneficial and logical activity to insure the future. The harsh reality is that "shit happens."

Consider the Orwellians. You have government using the people for perpetuating government. All sorts of surveillance techniques are used. You have some sub-set of animals more equal than others. We are all in this together. Look around. In London, there are cameras on all the corners. In the US, we have government listening to our phonecalls. We have an Orwellian society. Yet the Orwellians are marginallized and ridiculed.

Don't forget that evil Jules Verne with his submarine warfare. Oh but Rachel Carson is a heroine. Who can forget Thoreau's "Walden Pond" and his endless pursuits of civil disobedience. For those who seek a future different from today, we have science fiction. Heinlein's "The Moon is a Harsh Mistress" hammers on the idea that there ain't any free-lunches. Of course he wrote fiction. Just ask the greedy if they are footing the bill for free lunches. Then ask yourself if the free lunch has strings attached. "Vote for me. A chicken in every pot."

Sure, our reading list influences our train of thought. But it doesn't control it. Ayn Rand repeatedly hammered on the idea of personal responsibility. For shame, according to most from my personal experiences. I am inclined to contend that Ayn Rand's crime was negativity towards insurance companies.

Humans want security and insurance companies offer financial security for a price. Of course there is the problem of fiduciary responsibility to maximize shareholder return on investment. Insurance companies get the money up front and to paraphrase Warren Buffet, "If the people are doing their job, profits are guarenteed." A not-so-insignificant quantity of money the insurance companies recieve is pension plan monies. How much money did the insurance companies lose? How did a national directive for mandatory insurance policy enrollments get passed so easily against overwhelmingly negative public opinion? We are all in this together.
Speak against any sacred cow and you get to wear a label. Most of the labels are derived from some author. The labels exist as a means of pigeon-holing the person. After all, we have to have some means for sorting the millions of files our governments have compiled on most of us.

Who poses the risk today? Is it the Randians, perhaps the Orwellians. Few of us would ever consider anything but utter contempt for the Neo-Nazi skinhead Hitlerites. By holding a labelled group in contempt, we can discount all of their messages. In view of Arizona's new immigration law, I note that this law addresses one of the same grievances held by the Neo-Hitlerites.

I contend that some labels are valid. Most aren't. How do I tell them apart? When someone tells me they are a Democrat, I accept it. When someone tells me that Joe Blow is a communist, I accept the idea that the teller of the tale is trying to manipulate my perceptions.

Ohhh, I must be an Orwellian, huh? Thought crime; warning, warning Will Robinson. But wait! I'm all for free-markets, yet anti free-trade. I'm pro-business, but anti-corporation. I contend that war is absolute proof of failed diplomacy, yet am pro-military. I'm anti-income tax, but I readily agree that government needs a revenue stream. The irony is that I would gladly enjoy making enough money to put me in any tax bracket rather than the poverty I'm essentially stuck with.

Feel free to attach any label to yourself that makes you happy. I am wealthy in life experiences and poor in ducats. I have good friends that only mutual poverty can permit to develop. The wealthy have competitors, the poor have friends. I permit no agency to decree what alliance I shall align with. I am the proverbial duck. Labels wash off with the first rain. How far did Bernie Madoff fall when his label washed off?

The truth is that labels are just more damn advertising meant to encourage or discourage personal conduct. The consequences of accepting a label is someday the label will wash off and you will be exposed as the fraudulent piece of crap you are. Know thyself and be true to thine self. No label, no fraud.

TANSTAAFL

TANSTAAFL
Lately we are hearing about a move to audit the Federal Reserve. It ain't gonna happen. Well maybe, but it will all be behind closed doors.

Here are the reasons:

1. Congress and the President don't want the public to find out that the Fed isn't a branch of government.

2. The probability of Civil War.

3. Without any illusions, the people will quit trying and surrender themselves to death.

4. Politicians love to be politicians.

So let's look at all of these in turn.

If the people find out that the Fed is just a bookie and loan shark to Congress, any remaining confidence in money and banking will disintegrate. Cash will become worthless and GDP in dollars will go to zero. Those dependant upon government money will find wage and price controls will lock them out of the markets. Barter will be king. Those with products or needed services will withdraw from the market. It matters little if bread is $2 a loaf under wage and price controls if none goes to the marketplace.

With little ot no money in circulation, tax revenues collapse. Government can't afford this and sure can't afford to declare war on the citizenry.

There is the possibility that no laws exist making it legal to open the Fed's books. Recall that our Constitution specifically outlaws ex-post-facto laws. This means what happened, happened and we as a nation have nothing to say legally about what happened.

The actual debt, presently due and payable as well as debts due in the future, can't be paid. In order to pay down the debt, virtually all of the entitlement programs MUST be eliminated.
Any of the above will trigger a Civil War. Hungry people do desperate things. To consider that government doesn't realize what is going on would be foolish. If government outsiders can figure it out, there is little doubt that those high up in the government know even more.

So what to do with the endless march of inevitability? Reinvent community. The extended family is gone. The sense of community is gone. Few remember either. Enter the new kid called Communitarianism. We are all in this together. We must cooperate and determine what community assets are available. These community assets are not collectively owned, but rather are privately owned.

Well, they are private until anti-hoarding laws are enacted. The grasshoppers will show up at the ant's door to redistribute your hoarded assets. Sooner more probably than later, the shooting will start. The grasshoppers will be hunted down and any and all supporting cast will be executed.

Those who have nothing but a sense of dispair will quietly roll over and die. Government will wring its hands and plead for cooperation. The mantra will be "we are all in this together." Any and all groups opposed to cooperation will be deemed outlaws. You can bet on the military being called in to put down the rebellion. Violence will beget violence.

With the military involved, the politicians and families will be assured of some measure of safety. Those in power never voluntarily surrender power. To do so will put politicians and their families in extreme danger of execution by the masses.

The politicians will seize farm production and distribution to maintain some measure of control of the hungry masses. Few agri-businessmen have ever noticed that their production is collaterall for the loans and government payments.

The hungry masses will be herded into the cities where distribution of farm products can be centralized and controlled by the military.

The bitter irony is that none of this will work in the long run. Without a viable economy, production of food and needed repair parts, the engine slows and stops. America doesn't produce the goods to maintain itself at any level. With no monetary assets backed by complete confidence, retooling any remaing factories won't happen. Our nation's infrastructure will collapse. Those remaining in the cities will escape into the countryside to plunder the few who work the land.

So is there a way out? Kinda sorta.

We can inflate the money supply a bunch. Think Zimbabwe. Debts can be paid down with worthless dollars. Jobs and production will fall, but the politicians will funnel cheap money into more bail-outs. The politicians must do what ever they can to maintain some sense of hope in the citizens. Of central importance is a common enemy outside the US.

This dreaded enemy requires our military involvement. Can you imagine the effect on our economy if we brought the troops home. War material production ceases, the veterans return to find jobs non-existent and any confidence they had in the system destroyed. Worse of all, these vets are combat trained. All of them have a sense of loyalty and duty. But where will this loyalty and duty be aligned with? You can bet that it won't be with a government that spent the wealth of the nation on crap. And you can bet everything on the vets winning the war against the politicians that sold the soldiers children into slavery.

Our nation, in a fit of compassion, sold future wealth for various entitlement programs that benefit the unproductive masses. The problem is "there is no future wealth only hardship and debt."

There is no such thing as a free lunch. TANSTAAFL. Auditting the Fed will only present the bills that are due and payable. No confidence in the money will be inevitable. It will become obvious that we will pay the piper. We will pay with death and destruction. The irony is that far too many skilled people will die for the sins of the politicians.

I would encourage those of you who can see TANSTAAFL seek out those with the knowledge and skills needed to maintain some semblence of a local economic engine and protect them for your children's sake. If we lose technology, we will be reduced to a hunter-gatherer society that preys on other groups.

It isn't too late to develop skills that will result in production of needed goods. It is almost too late to move to the country and buy a few acres. As the economy declines, outsiders will be unwelcomed. In order to be viewed as an asset, you must have something needed for the survival of the community. That something is tools and the skills to use them.

What we percieved as a free lunch will cost us far more than we could have ever imagined. Audit the Fed and find out. Just understand, it might, nay probably will cost you and your family far more than you can pay. After all, death is not optional, but rather mandatory. Audit the Fed and destroy what little confidence that remains.

I will leave you with this harsh reality. The entire world is inter-connected economically. Why do you think our politicians are passing bail-out legislation? Failure to bail-out corporations will result in immediate delivery of the bill. So many cry "New World Order" when what faces us is "New World Disorder." Duct tape legislation will only work for so long. Some country will default and the the world of economic cards will implode.
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"Hey! How about a little more duct tape over here."

(Pan out to see delivery of new roll of duct tape.)

Politician peels off length of duct tape and patches hole in boat. Sets roll on seat.

(Zoom in on roll of duct tape.)

"Made in China"