Sunday, August 31, 2008


They are following Gustav over at the Oil Drum. If little things like the bulk of U.S. gasoline refining capacity worry you, I suggest following along and contributing where you can.

UPDATE: Not to go all Jim Kunstler on you, but the topic of railroads came up as I was watching the Weather Channel coverage of what's going on in New Orleans as they prep for Gustav. An Amtrak rep was being interviewed. Amtrak had evac'd 1900 people yesterday and were sending another 1000 out this afternoon. If that doesn't tell the tale of America's decrepit passenger rail system, I don't know what does. A major U.S. metropolis, well-served by rail and they barely even get out 1% of the 223,000 residents of New Orleans in an evacuation. When the reality of Peak Oil settles in, here's hoping passenger rail is at the top of the mitigation list.

UPDATE 2: With the oil rigs and refineries of the Gulf about to be hit by Gustav, now might be a good time to review Jeff Vail's discussion of Demand Destruction and Brittle Systems.

Friday, August 29, 2008

Friday Meditation for 29 August 2008

What happens if this moves from anomaly to trend?

Bank of China flees Fannie-Freddie
By Saskia Scholtes in New York and James Politi, Financial Times
Bank of China has cut its portfolio of securities issued or guaranteed by troubled US mortgage financiers Fannie Mae (NYSE:FNM) and Freddie Mac by a quarter since the end of June.

The sale by China's fourth largest commercial bank, which reduced its holdings of so-called agency debt by $4.6bn, is a sign of nervousness among foreign buyers of Fannie and Freddie's bonds and guaranteed securities.

Foreign investors have been a mainstay of the market for such debt, but uncertainty over the mortgage financiers' capital positions and the timing and structure ofa potential government rescue has made some investors reassess their exposures. Asian investors in particular have become net sellers of agency debt, said analysts.

Thursday, August 28, 2008

A Vision of the Future

Think this can't happen here some day, possibly soon?

Pakistan Sets Floor on Stock Prices to Stop Plunge
By Farhan Sharif and Chua Kong Ho, Bloomberg
Aug. 28 (Bloomberg) -- Pakistan set a floor for stock prices on the benchmark exchange, moving to halt a plunge that has wiped out $36.9 billion of market value since April.

Securities can trade within their daily limit of 5 percent ``but not below the floor-price level'' of yesterday's close, the exchange said on its Web site, without giving details. The Karachi Stock Exchange 100 index capped a six-day, 16 percent slump to 9,144.93. Trading starts at 9:45 a.m. local time.

The exchange is working to restore confidence after President Pervez Musharraf quit on Aug. 18 to avoid impeachment, and ruling alliance members nominated rivals for the presidency. Investors stoned the exchange last month after it removed a 1 percent daily limit on price declines. Today's decision follows a collapse in the index to the lowest in 26 months.

Hat tip to Calculated Risk.

Wednesday, August 27, 2008

A Trillion Here, A Trillion There...

If you have not done a Gamlber's Analysis recently, please do so. Review this short video clip from I.O.U.S.A. and then ask yourself how you would survive or even thrive in an environment of either hyperinflation or severe credit deflation.

Bonus Question: What do you think happens to a political system burdened with the obligations described in I.O.U.S.A.?

Tuesday, August 26, 2008

The Foundations Continue to Erode

The stucco-and-vinyl-siding investment vehicles continue to crash in price:

S&P: Home prices tumble by record amount
NEW YORK - A widely watched housing index released Tuesday showed home prices dropping by the sharpest rate ever in the second quarter.

The Standard & Poor's/Case-Shiller U.S. National Home Price Index tumbled a record 15.4 percent during the quarter from the same period a year ago.

The monthly indices also clocked in record declines. The 20-city index fell by 15.9 percent in June compared with a year ago, the largest drop since its inception in 2000. The 10-city index plunged 17 percent, its biggest decline in its 21-year history...
Come the Revolution

The pain being inflicted in house-buyers is, in my opinion, going to be the driver for the political, social and economic upheaval that will burn the current system to the ground (figuratively speaking, of course) and build something new in its place. I believe we'll all live to see a Second American Revolution - a reworking of the systems we use to bind ourselves together as a country, the methods we use to enforce property rights, to settle disputes, to distribute and protect the fruits of our labors. And a return to labor - specifically agriculture and local light industry, will be a big component in my opinion.

It's still far too early to know for sure what things will look like on the other side of the coming debt tsunami, but start preparing now for a wild ride.

And speaking of that wild ride, this week Charles Hugh Smith is currently doing a very thought-provoking series one the Second American Revolution. They are worth a read:

The First American Revolution, and the Later Ones, Too

The Moral Center of Revolution

Monday, August 25, 2008

More Worst Case

I mentioned some time back that one way to view current events and model for future events is to imagine that only the worst and most stupid decisions will be made by policy-makers or that stories that would be "noise" during most years would ramp up to "worst case" as well, be it flood, fire or hurricane.

Luckily the natural disasters haven't amped up. As a matter of fact, this has been one of the mildest summers in Missouri that I can remember. Refreshing. I hope it lasts through football season.

On the U.S. political and economic front, however, this model has proved quite prescient.

Fannie Mae and Freddie Mac, two organizations that have morphed from some semblance of firms dedicated to helping lower middle class folks get on the propertly ladder (back when that ladder sat on a firm foundation, not quicksand) into cancerous beasts that line the pockets of insiders and politicians, are teetering on the brink of failure. This will result in a massive taxpayer bailout. If it doesn't, and their bonds crater, then China, which will be hurt intensely by the loss in value of these bonds, will surely retaliate economically. Keep an eye on this story. One might hope to move these firms into receivership and wind them down and force the market to find a new way to fund mortgages. My bet - they'll just break them up into many smaller entities, each with it's own gaggle of insiders who hope to feast on fees and political perks. Instead of two gigantic cancers, you'll now have ten or twenty. Amazing how the decision-makers keep turning to the causes of the problems to act as cures.

On the foreign policy front, the U.S. ally Georgia suffered a humiliating defeat. Listening to the incompetents that fill the offices of my country's State Department whine about it is sickening. I swear that the water in D.C. must be laced with high-powered drugs.

And then there is politics. Something fishy is going on in the Democratic party. Obama, Big Daddy Hope himself, looks like he is being set up for a fall. Now, at this point, I regard both parties as equally moribund and corrupt (it took me awhile to lose my faith in the Republican party, I had always viewed them as fiscally smart with a limited foreign policy to my liking - they rubbed it in my face for 8 years and I've had enough of their stupidity. I can give the Dems a pass, they are ignorant when it comes to basic economics. The Repubs have no excuse, they just became corrupt and lazy at exactly the time the Republic needed them the most, but I digress...). That said, Obama is at least running on a positive message. Hope is a lot better than hate or anger. But these little stories of Clinton hacks continuing to snipe at Obama are moving from amusing to worrying, or at least should be for Obama supporters:

Clinton supporter sues Obama on grounds he is constitutionally ineligble for Presidency
By: Jeffrey Schreiber

A prominent Philadelphia attorney and Hillary Clinton supporter filed suit yesterday afternoon in the U.S. District Court for the Eastern District of Pennsylvania against Illinois Sen. Barack Obama, the Democratic National Committee and the Federal Election Commission.

The action seeks an injunction preventing the senator from continuing his candidacy and a court order enjoining the DNC from nominating him next week, all on grounds that Sen. Obama is constitutionally ineligible to run for and hold the office of President of the United States...

Rule #1 in American Politics - Never trust a Clinton. Never. Never. Never. Never. And Obama is going to give both those jokers prime speaking slots at the Convention?

The official Econostorm Warning Flag is flying here at FutureJacked. I think we'll see the rumblings over September. Have your sh*t together by October, friends.

Thursday, August 21, 2008


If IOUSA makes it to a theater in your community, go see it. Take a friend.

A Quick Roundup

Sorry for the lack of posts. A combination of work and other factors are cutting into blogging these days.

That said, it is sometimes difficult to know what to discuss. So much of what we've been talking about is coming to pass.

The credit "crunch" is deteriorating into a full-blown crisis. Again, I think the markets can hold on until late September or October, but reality is swiftly eating into the mass delusion that has kept this market afloat for far too long. Just watch what is happening to tax receipts in New York State and you'll get a feel for just how bad things are getting for the finance boyz.

Pakistan is burning, slowly, to the ground.

Russia commenced a smack-down on Georgia and then wisely pulled back, leaving support troops for the Ossetians and Abkhazians. Far from becoming a new 4GW theater, Georgia displayed an amazing lack of ability to prosecute a conflict they had been planning for years - they didn't even blow the Roki Tunnel to prevent or at least delay Russian intervention. Well, Europe better start teaching Russian in school. Unless they turn to nuclear power in a big way, they are well on their way to becoming a Russian energy colony.

And speaking of Russia, here's another must-read on how that country dealt with their first peak in oil production and the resulting collapse.

The Iran situation continues to bubble along. Again, I can't imagine how any of the parties involved could regard an attack on Iran as being in their interests, but I also expected a deal by now, so who knows. If an attack does occur, you best leave your place of work or residence the minute you hear about it and go buy yourself a bicycle and a stash of food. Fuel rationing will be following the bombs.

And what new to talk about? We've talked a bit about resilient communities/networked tribes but until the true shape of the crisis to come makes itself known, it is tough to talk more about it - they will develop based on the problems. I still worry a lot about how these early communities that will - that must - spring up to fill the gap when the current system collapses. How will they overcome local authorities and things like the existing zoning laws, laws on how tall plants can be in your yard (no Victory Garden for those of you in Omaha - you'll be fined and the city will cut it down), laws on light industry in city limits, etc. Allegiance to the current system is hardwired in most everyone. The cops will round up the leaders of nascent resilient communities just as quickly - if not more quickly - as they would a car thief. These types of folks are direct threats to things like the tax base and "growth." That's a much worse crime than mere car theft or drug dealing. Just when we'll need a burst of creative work, we'll be facing an angy and panicked political class, determined to crush those who would defy their authority.

We'll keep tracking the news and providing what insight we can here. In the meantime, keep you eyes open, keep networking in your community and get your mind ready for a major shift in how the world works.

Friday, August 15, 2008

Friday Meditation for 15 August 2008

Socionomics is often used (or misused) here at FutureJacked as a way, imperfect though it may be, of modeling major sea changes in human attitudes and the herding patterns that result from it. The operating thesis is that much of the population of the United States is ungergoing a significant change in attitudes towards topics such as debt, what constitutes success, openess versus anger, inclusiveness versus secession, etc.

From across the pond, we get a possible view into a future where cash and material success is valued less than other contributions, plus it is a good example of exclusivity in action. Ponder what your town or city would be like if attitudes like this took hold:

London Clubs Rebuff `Braying' Bankers, Favor Style Over Wealth
by Camilla Hall, Bloomberg

Aug. 15 (Bloomberg) -- Jonathan Downey, the owner of the East Room club on the edge of London's financial district, says bankers are the last people he wants as members.

"We don't want the archetypal City idiot, waving his cash about at the bar and braying like a buffoon and annoying women,'' said Downey, 42, whose club charges men an annual membership fee of 350 pounds ($655). Women pay 150 pounds...

Wednesday, August 13, 2008

Cuomo to Cancer Victims: Drop Dead

We take a brief aside from politics and the Great Unraveling that is silently tearing through U.S. households, local and state governments to bring you another example of stupidity in action from the great states of Illinois and New York :

Cuomo, Madigan criticize government's stance on uranium
by John O'Brien, LegalNewsLine
NEW YORK (Legal Newsline) - A pair of state attorneys general say the federal government must ban civilian use of highly enriched uranium before it leads to a terrorist attack.

New York's Andrew Cuomo and Illinois' Lisa Madigan wrote the federal Nuclear Regulatory Commission Tuesday, complaining that the agency does not have strong enough restrictions. They were joined in the letter by Rep. Peter King (R-NY), the Ranking Member of the House Homeland Security Committee.

"It's absurd that the NRC has continued to drag its feet when it comes to banning this highly radioactive material," Cuomo said. "Plain and simple, banning highly enriched uranium for civilian use will remove another potential lethal weapon from the terrorists' hands..."

Idiots. These reactors are home to significant research, as well as serve as production centers for radioisotopes used in industry, research trials and cancer therapies.

Enriched Uranium itself is very, very mildly radioactive, not highly radioactive. Peter King needs a new science advisor. If he is worried about it being used as bomb material, he's even dumber than the "highly radioactive" comments makes him look. The enriched fuels used at these reactors are worthless for a bomb. These fuels have other compounds dispersed throughout the fuel meat. You'd need a sophisticated processing center to make the material even vaguely useful. These guys make it sound like somehow all the safety and security systems will be circumvented, the "terrorists" will steal the fuel, then mold the uranium like silly putty into the amazing precise shapes needed for a bomb and then detonate it. Oh yeah, ignoring that you can't get enough enriched uranium in the first place to make a bomb work.

The American Ship of State, guided by fools and buffoons. Sigh.

Tuesday, August 12, 2008

Socionomic Wrap-Up of the Conflict in Georgia

Okay, we'll be transitioning off this story and back to keeping an eye on the coming debt storm in the U.S.

One final thing I do want to draw your attention to is an interview with and analyst from EWI who wrote a white paper on Russia using socionomic theory that is generating a lot of buzz. This kind of thing is why I find socionomics to be an interesting and useful model for events.

Check it out if you have the chance:

Socionomist and EWI Analyst who predicted Russia-Georgia conflict to appear on Bloomberg TV today at 5:30 p.m. ET.

In November 2007, the Socionomics Institute’s Alan Hall issued the 20-page research report, "Sizing Up A Superpower." It assessed the relationship between Russia's turbulent history and its then-current social mood.

More specifically, he spoke of "Georgia's desire to bring its pro-Russian separatist regions under control, but Russia has military plans to stop any move by Georgia to secure these regions.

"Mr. Hall will discuss the developing situation in the region today, Tuesday, August 12 at 5:30 p.m. ET on Bloomberg television. Be sure to tune in! You can stream Bloomberg TV live online here.

See to download their player.

Click here and scroll to the bottom of the story if you are interested in the full report.

Georgia, Russia, South Ossetia: Russia Halting

UPDATE: If you are interested in some depth and context for this latest round of fighting in the Caucasus, please read Dmitry Orlov's latest post "The Trouble with Georgia" For those interested in how a once-wealthy population handles (or mishandles) the transition to chaos and poverty, the article is a must-read.

Looks like we'll be avoiding the worst-case scenario of a torched BTC Pipeline. That said, a torched U.S. reputation amongst small allies might result in its own problems soon...

Georgia: Why the Russians are Stopping
from Stratfor
Russia is offering a cease-fire in Georgia on Aug. 12. Russia has achieved its goals — demonstrating its ability to strike, destabilizing the Georgian government and proving the West’s inability to act in the Russian periphery. Furthermore, taking Georgia altogether would cross a line that Russia is not prepared to breach and nearly ensure action by Russia’s foes. But most of all, Russia simply does not want Georgia; Moscow does not want to administer Tbilisi, and it does not want to get involved in another prolonged conflict like that seen in Chechnya...

Sunday, August 10, 2008

Georgia, Ossetia, Russia: Info Ops and Fighting

FYI for readers: Just to reiterate. The reason this story is being tracked fairly closely (well, cherry-picking mainstream media stories...) is that, in my opinion deep in the FutureJacked bunker, this is an explosive mix of oil, an effort by Russia to shove a new reality down the throat of the West in its own backyard and to track the potential blowback as relates to Georgia's relationship with Western oil majors, Israel, etc. This is the kind of thing with the potential to spill over into the region as a whole, especially as Russia continues to pound Georgia in the face of calls for a cease-fire.

UPDATE: the hits just keep on coming for Georgia. From Bloomberg, "Russian Troops Enter Georgia, Seize Military Base"

UPDATE: from the NYT, "Georgia Fight Spreads, Moscow Issues Ultimatum" The BTC pipeline is still intact, so it looks like this is more about getting an acceptable (to Russia) "leader" installed in Tblisi and not as much about Western oil.

UPDATE: from the BBC, "Georgia move fails to halt raids" Looks like the Bear is trying to make a significant statement. Watch where the bombs fall - I was surpised to see Tblisi International Airport get hit. I'll be shocked if the BTC Pipeline gets cut.

The conflict on the ground continues, even in the face of expectations that a cease-fire was in the works.

By the way, in the video above, notice the media jackals using that poor woman at the 26 second mark for a juicy photo op while she bleeds out the back of her head. I know, I know, their job is to document things, but still...

Russia takes control of South Ossetian capital
By James Kilner
Tblisi,Georgia (Reuters) - Russian troops took most of the capital of the separatist Georgian region of South Ossetia on Sunday after a three-day battle but the United States condemned Moscow's "dangerous and disproportionate" action.

Russia poured troops and tanks across its southern border into Georgia and bombed Georgian targets after Tbilisi attempted on Thursday evening to retake South Ossetia, a small pro-Russian province which broke away from Georgia in the 1990s.

In a possible opening of a second front in the conflict, Georgia accused Russia of starting a military operation on Sunday in Abkhazia, another separatist region of Georgia to the west of South Ossetia. Moscow denied involvement...

Info Ops Ramp Up

The first casualty of war being truth and all that, the Russians are taking some interesting paths with their Info Ops on this war. They aren't just focusing on accusing the Georgians of genocide and lauding the noble "freedom fighters" in South Ossetia. They are painting a picture of deep Western involvement in a conflict that is killing Russian soldiers.

Note this clip out of Russia, claiming mercenaries are present among Georgian forces:

While probably just propaganda to help fuel the "us against the world" mindset rulers want when going to war, this bears watching. I don't think Russia wants a wider conflict, but they sure seem to be trotting out potential justifications in case they decide a larger war is necessary.

And there's another issue that could add fuel to the fire. This one centers on the issue of Israeli support to Georgian forces.

War in Georgia: The Israeli connection
by Arie Egozi , Ynet news
The fighting which broke out over the weekend between Russia and Georgia has brought Israel's intensive involvement in the region into the limelight. This involvement includes the sale of advanced weapons to Georgia and the training of the Georgian army's infantry forces.

The Defense Ministry held a special meeting Sunday to discuss the various arms deals held by Israelis in Georgia, but no change in policy has been announced as of yet...

With the current tensions over Iran's nuclear program at a fever pitch (at least rhetorically), throwing the ever-controversial State of Israel into the calculus in the Caucasus has the potential for blowback all over the place. Definitely keep an eye attuned for stories involving Israel and Georgia.

Saturday, August 9, 2008

Russia, Georgia and South Ossetia

I'll try to keep some up-to-date highlights of the conflict between Georgia and Russia over South Ossetia. Again, why we care revolves around oil (via the BTC Pipeline), seeing if the U.S. will come to the aid of a tiny ally, and a more general picture of the ability of states to use war as a means to solve problems and not just create a morass of further conflict - basically, will we go back to an old WWIIish mindframe of total war that actually resolves issues or a 4GW world of low-intensity conflict permeated by a variety of loyalties and issues, with primary loyalties driving "criminal" activity, ethnic cleansing and other non-standard warfighting mechanisms.

Geopolitical Diary: Decision Time in South Ossetia
from Stratfor
...But this conflict is about much more than simply which flag flies over a tiny chunk of territory in the Caucasus. Georgia is an extremely pro-American and pro-Western state and represents the easternmost foothold of American/Western power. It has also been in the Russian orbit for the bulk of the past 300 years. As such, it is the hottest flashpoint in Western-Russian relations. Which way the territory falls ultimately decides whether Russia can determine security concerns that literally fall right on the border of its heartland. To put it another way, what is being decided here is whether bordering Russia and simultaneously being a U.S. ally is a suicidal combination. Whichever way this works out, the dynamics of the entire region are about to be turned on their head...

And here is a link to an economic/socionomic take from EWI on the conflict. This is the kind of unique perspective from EWI that I like. Now, there work won't be published in the Small Wars Journal any time soon, but it does help frame these kinds of events and how they relate back to your pocketbook:

"Skirmish," "Invasion," and/or "War" Between Russia and GeorgiaHow the Conflict is "Unscheduled, But Not Unpredicted"
by Robert Folsom, EWI
The erupting conflict between Russia and the Republic of Georgia in South Ossetia can safely be described as an unscheduled news event: Initial news reports of the fighting ranged from "armed skirmish" to "invasion" to "war..."

May you live in interesting times...

Friday, August 8, 2008

The First Flames Over Georgia

If Russia does move ground troops into non-breakaway parts of Georgia, then we are looking at instability and potentially the opening of a new 4GW theater of conflict (note, the link is one of the first about Georgia we did here at FutureJacked, but I believe the implications still obtain).

UPDATE: from Stratfor, Red Alert Intelligence Guidance: The Conflict in South Ossetia. Excerpt - "...The Russians hold a trump card with the Americans: Iran. They can flood Iran with weapons at will. The main U.S. counter is in Ukraine and Central Asia, but is not nearly as painful.Tactically, there is only one issue: Will the Russians attack Georgia on the ground? If they are going to, the Russians have likely made that decision days ago.Focus on whether Russia invades Georgia proper. Then watch the former Soviet states. The United States and Germany are of secondary interest at this point."

UPDATE: from Stratfor, South Ossetia: Moving Russian Forces In. Summary - Russian armor has reportedly made it through the Roki Tunnel into South Ossetia, a critical move to secure the south end and protect the key logistical route into the breakaway territory. And Russia has still other options for moving its forces in.

UPDATE: Stratfor has a page dedicated to the Crisis in South Ossetia

UPDATE: from Stratfor, Georgia: Russia Bombs Vaziani Base

UPDATE: from Stratfor, South Ossetia: Chechens Ready for Deployment

We've discussed the Russia-Georgia-Ossetia-Abkhazia situation for over a year. It's gone back and forth, but always rhetorical vollies and threats. The bullets are now flying.

It's on:

Georgia begins offensive in South Ossetia
from the AP

TBILISI, Georgia: Georgian troops began a major military offensive Friday to regain control over the breakaway province of South Ossetia, and the president accused Russia, which has close ties to the separatists, of bombing Georgian territory.

The fighting was the worst outbreak of hostilities since the province won de-facto independence in a war that ended in 1992, raising fears that war could once again erupt and draw in Russia, which has peacekeepers in the region.

A Russian official denied bombing Georgia. But the Russian prime minister, Vladimir Putin, said the Georgian attack would draw retaliation, and the Defense Ministry pledged to protect South Ossetians, most of whom have Russian citizenship...

Keep your eyes on the BTC Pipeline. It will be interesting to see how the Georgian troops hold up.

I'll post snippets from Stratfor as this develops. They seem to have good intel in the region.

Thursday, August 7, 2008

The System Continues to Eat Itself

I continue to worry about a "tipping point" at which the federal authorities lose the willing allegiance of the People. Much of it will be driven by the drying up of government money when the debtstorm hits, but it will be exacerbated by bureaucrats going after the "doers" in communities. The story below, an excellent example of this, makes me want to puke.

Outrage in Idaho: Feds send man to prison for protecting town from flooding
By Bryan Fischer
Lynn Moses will be locked up in federal prison next Wednesday. His crime? Protecting the city of Driggs, Idaho from flooding...

One day, something like this will light a fire so intense, the smoke and flame will be seen around the world.

Wednesday, August 6, 2008

Test Your Wits Against the Future

Take a few minutes and check out GroupIntel Predictions. It's an ongoing experiment "in collaborative intelligence production."

They ask the question: "Can a group of people accurately set the homeland security level, determine the current threat environment, and predict future attacks?" You get to help answer it.

Basically, it is a futures market where you are given "cash" to "invest" in future events. If you are correct, you profit and have more to invest in future postulated events, plus you get to help out in an experiment on "the wisdom of crowds."

Give it a whirl and think of some interesting markets to create while you are at it.

BTC Pipeline Blast

I go to all the trouble of worrying about a Russia-Georgia showdown cutting the BTC Pipeline and then some group in Turkey comes along and cuts it instead...

Turkey: Implications of a Blast on the BTC Pipeline

from Stratfor

...An explosion occurred on the Baku-Tbilisi-Ceyhan (BTC) oil pipeline in eastern Turkey late Aug. 5. Turkish energy officials say it will take at least 24 hours for the fire engulfing the pipeline to extinguish. Until then, it remains unclear what the extent of the damage is and how long it would take to bring the pipeline back online.

The BTC pipeline pumps one million barrels per day (bpd) of Caspian crude to the Turkish port of Ceyhan on the Mediterranean Sea for export to the Western market. Despite the blast, exports are reportedly continuing from the Ceyhan port terminal, where storage facilities can hold 7.5 million barrels of oil (enough to fill seven large tankers). BP and its partners have also reassured the public that crude production is continuing at Azerbaijan’s offshore fields, for stockpiling until the pipeline is repaired...

Tuesday, August 5, 2008

Christmas in August

Enjoy this latest positive mood swing as expressed in the markets (we are up a little over 200 points on the DJIA as I write this). This is a fantastic gift for those who still need time to prepare their fiscal affairs for a severe downturn.

The "fundamentals" still haven't changed. No one can prevent the coming debt storm and derivatives implosion that is churning our way. But suckers rallies can be fierce and the force of the government's bully pulpit and media cheerleading can convince many that "the worst is over".

I think they can keep things pumped up through most of this month and into September. It appears that most big players are willing to bet that the various schemes put forth by the Treasury and Fed will, at the very least, stabilize the housing markets and calms worries over the financial companies. If nothing else, the big money has to cling to that hope because they have no where else to hide.

Enjoy this final month or so. Please, please, please, at least do the minimum to prepare yourself and your family for "asymmetric events" that could cause financial loss, transportation restrictions or rationing of basic goods. Something wicked is coming. Look past the dancing girls and carnival barkers that are constantly trotted out by the various media and keep your focus on the reality behind the glitter.

On another note, posting may be spotty this week. I am absolutely buried with non-blog work stuff.

Enjoy life to the fullest as summer wanes. Take a day off, spend time with friends and loved ones. Enjoy the now. Things are going to give way this fall, in my opinion, and in a big way.

Sunday, August 3, 2008

Spending Patterns

Compare and contrast -

"...The project, called Knowledge Economic City, represents a first serious step by Saudi Arabia toward building a post-petroleum economy. It is one of six industrial centers planned to rise over the next 15 years. At a cost of more than $100 billion, the sites are expected to provide housing and jobs for the country's fast-growing population; half are younger than 21..." - from 'Saudis prepare for post-petroleum era', Faiza Saleh Ambah

"...the administration talks only about the upfront costs, which are mostly handled by emergency appropriations. (Iraq funding is apparently still an emergency five years after the war began.) These costs, by our calculations, are now running at $12 billion a month -- $16 billion if you include Afghanistan. By the time you add in the costs hidden in the defense budget, the money we'll have to spend to help future veterans, and money to refurbish a military whose equipment and materiel have been greatly depleted, the total tab to the federal government will almost surely exceed $1.5 trillion..." - from 'The Iraq War Will Cost Us $3 Trillion, and Much More', Linda J. Bilmes and Joseph E. Stiglitz

Top-Down versus Net-centric

Now, I will grant you that the Saudi initiative will probably wind up as four parts boondoggle to one part success, as top-down authoritarian efforts to restructure society or build "new cities" trend towards. That said, it shows the Saudis are at least thinking, planning and allocating resources towards a post-petroleum society. They are attempting to plan for the long-term.

Imagine what could be accomplished in the U.S. if, instead of going to bullets and Halliburton, $10 billion each month were allocated to different groups, each with a mandate to experiment with new forms of social organization. $10 billion on month towards resilient communities, next month rhizome nodes, next month seasteads...

Okay, enough blue-skying here. It's little different than the tiresome whines of neo-hippies discussing more money for their pet projects and less on missiles and bombs. But watching my country piss money down a rat hole when we need to be trying out new ways of organizng communities in the face of the coming debt and resource storm saddens me no end.

Friday, August 1, 2008

Friday Meditation for 1 August 2008

"Federal agents may take a traveler's laptop or other electronic device to an off-site location for an unspecified period of time without any suspicion of wrongdoing, as part of border search policies the Department of Homeland Security recently disclosed..." - Washington Post, 1 August 2008

Try to put yourself in the mindset of someone who regards such a policy as a very positive thing. Then imagine what other policies you would be supporting in the coming years...