Another toiler in the vineyard

Safe Haven features an article by "Randy", who predicts that the American economy will go haywire. The good news is that, within a generation, poverty will make the US economically competitive again.

That's not an ironic comment. It seems to me that America's most precious heritage is not her wealth, but her love of liberty and her distrust of power. She has been seduced by Mammon and Empire, and the undoubted difficulties we face may turn out to be the last-minute rescue, the ram caught in the thicket.

Cash is king

Robert McHugh confirms my feeling: sit it out, hold cash.

Deus ex machina

You know you're in trouble when you have to appeal to the Great Leader to do something. Karl Denninger publishes an open letter to the President, the Presidential candidates and others.

1. He complains that 23A exemption letters and the recent TAF facility are being used to hide the scale of banking problems from the public.
2. He points out that over the last 100 years, local house prices trend to 3 times median local income (work that out for your own house).
3. He lists action points to make the system transparent and honest - even though some lenders will be immediately destroyed, like the little slips of flash-burn paper used by spies in Sixties movies.

Being right is not nearly enough - work it out for yourself:

1. Imagine the conversation between interns on receipt of Denninger's fax;
2. List the not-to-be-published reasons why nobody who could solve the problem, will;
3. Compose the official reply.

Now, head for the tree line.

Another Ranter

Alex Wallenwein goes schlock Gothick:

Employment figures, the Thornburg collapse, Carlysle Group troubles, sky-high oil prices, rampant inflation, the dollar-crash, and neverending Fed bailouts of fast failing super banks are pounding the stake deeper and deeper into the global debt-vampire's heart. He will find his much-deserved rest before long. Unfortunately, the portfolios of careless and gullible retail investors, consisting largely of Dracula's debt-spawn, will die along with their master.

I'd give him a "Highly Commended" in the Sackerson's Prose Prize competition for that first, rolling sentence. But he gets pretty apocalyptic, too:

The next Dow-bottom will plumb depths not seen since the early 1990's, maybe even the 1980's!

The early 90s saw the Dow around the 3,000 - 5,000 range. Eat that, Robert McHugh.

Then he shoots for the moon:

... gold can easily go past $3,000 per ounce this year

- and makes a reckless recommendation:

If anyone still has money in any stocks or mutual funds, it's time to exit.

Overstated, I think - but completely wrong? Maybe not.

Another 42 stars?

"Deepcaster" continues to hint at the operations of "The Cartel". His theory is outlined in this post of August 11, 2006. In a nutshell, there's a plot (a) to dissolve the US and make a new entity by combining it with Canada and Mexico, and (b) ruin the dollar in order to replace it with the "Amero", presumably to recommence the thieving by inflation. So it's like what some think the EU project is about.

Except I don't think the EU or its North American equivalent are driven by sinister motives; just venal ones. Concentrating wealth and power makes very juicy opportunities, provided you can simplify the command structure. All that consulting the common people and getting their agreement is so tedious.

America grows. She acquired 29 states in the nineteenth century and five in the twentieth. Where next? Canada has 10 provinces and 3 territories; Mexico has 31 states and one federal district; Greenland is owned by Denmark but has been granted home rule. But Canadians, Mexicans and Greenlanders may have their own views about assimilation.

Democracy is inconvenient, by design. I think the thirteen stripes on "Old Glory" remain there, not just as a historical quirk, but to remind the Federal Government that it's very important to say "please" and "thank you". Even in the first go at making the nation, Maryland, Delaware and New Jersey chose to delay the ratification of the Articles of Confederation, until certain issues had been resolved to their satisfaction.

Here's to the awkward squad.

The Grand Union Flag of 1775, flown by John Paul Jones

Survivalism

Michael Panzner finds another useful article, this time by Laura Coffey on making contingency plans for losing your job.

I sent a circular to my clients in the late 90s, urging them to take out redundancy insurance, because I thought the coming stockmarket crash would be followed by recession; but of course I didn't anticipate that the government would use monetary inflation to defer the reckoning (and, I now fear, make it worse). Articles like Coffey's are straws in the wind, I think.

Diversity, dispersion and disconnection

Karl Denninger continues his heroic (it's always lonely out in front) campaign to call the banks and the regulators to their reckoning. As he points out, we're all tied together, and instead of making it better, that makes it worse, as non-Americans will find out:

The dollar will bounce around before starting to take off. So far, we've not seen people figure out the "rest of world will be f***ed", but if you think the exchange rate problems won't lead to that, you're sadly mistaken. Beware.