Quaking in their Tubes

One perhaps final point for this week, raised by a reader.  Why has there been virtually no mainstream media coverage of the 5.2 magnitude earthquake off New Orleans this week out a bit into the Caribbean/Gulf of Mexico?

Oh this is so simple that I shouldn't have to explain it, but here goes.  The quake this week is  to my jaundiced eye an extension from the bottom of what is commonly called the New Madrid Fault.

Now, the mainstream media is about entertainment, not preparedness.  So with no actual damage done anywhere, and by extension, with nothing to report but a "My ain't that strange..." it's easy enough to blow right past this story with more pressing (but perhaps not as important stories) in the wings...

World is Crazy

When I look at the two major economic events of Friday, I must conclude that either the world is crazy, or I am.  Reason?  The report came out, as reported here and on national media, that the trade deficit for 2005 was 17.5% larger than 2004, and as I showed yesterday, the December year on rear increase was even bigger.

So what did the market do? You might, like me, have expected a slight decline, perhaps a moment of thoughtfulness to consider that we have an economy running on paper.  But no. Gold was pushed down almost $15 and the Dow gained 35 and change.

I'll hold to the view that irrational exuberance as turned into manic psychosis at least until April Fools day, by which time reason, I expect will intrude into the paper lovefest.

Storm of the Week

Lemme see: Last weekend we had the big winter storm go through Washington, Oregon, and into British Columbia.  So this weekend, it must be the Northeast's turn for crappy weather.  Yup - up to 14" of snow is coming today along parts of the Eastern Seaboard.

Down here, in our part of Texas, its looking to a few of us like our drought might be over.  The reason?  The Tyler official statistics show that year-to-date rainfall is 4.97 inches compared with a normal 4.58 inches.  Locals are all hoping the trend holds.  Hedge your grain portfolio accordingly?

Patriot Act on Drugs

Not only is the Patriot Act blurring to become the government's new warrantless enforcement tool for unintended areas like drugs, but, according to the NY Times editorial this week, it's another example of how congress is caving in to the Bush administration's various power grabs.

To be sure, I will admit to a Constitutional bias in my coverage of such things.  But, perhaps that's because I keep reading stories about how the US government spied without use of the CONgressional required FISA Court - and how corporate telecoms played right into the government's power grab.

Fortunately, thanks to the "gag" rules of the Patriot Act, no one would ever tell you if your medical or communications records were checked out by the feds.  Even when I stretch things, I have a tough time figuring out what a health record would have to do with national security.  Perhaps that will make me an 'enemy of the state"?

As luck would have it, I'm not the only one questioning such recent "revelations" such as George Bush's claims that a terror attack against Los Angeles was prevented in 2002. PrisonPlanet.com reports much more to this cleverly orchestrated "revelation".

What does this have to do with the economy, the primary focus of this web site?  Ask me at the end of March, by which time we should see a coming "context changing event" that will put things into perspective.  Not that the web bot project over at www.halfpasthuman.com will tell us precisely what to expect, but every week when the data is sliced and diced we get a little more insight...

Federal Land Sales

There's a really interesting development reported by the Seattle Times about  how the Forest Service will be selling off some federal lands in the future.  If you've ever wanted to be in on a chance to buy some raw land, this is the kind of story to check out. After public comment, not likely this much will be sold, but still, worth watching...

New Tomb

Although we've read lots of interesting speculation that there are "secret rooms" beneath the Sphinx in Egypt, we've never seen the real science behind such rumors.  On the other hand, there are still discoveries being made once in a while and today we read with interest about the discoveries being revealed in the Valley of the Kings.

Woo Woo Department

A woman has been charged with trying to bring a skull - destined for use in voodoo rituals - into the US. Just a heads up.

Peoplenomics

This week we get into the controversial area of predatory taxation and how the banks are writing off bad debts by 1099-C'ing people.

Our subscriber report this week tries to cut through some of this cognitive dissonance caused by inflation numbers in M-3 that seem to line up uncannily with what I've been seeing in my checkbook on the one hand, and the "happy talk" from the beltway bandits and their idiot companions that promise inflation is running around 3 1/2 - 4%.  That's if you don't use energy or eat, they might admit quietly.

"I was struck by the mental balancing act going on in my head. On the one hand, I'm working hard to push the world toward the "business singularity" where ideas move at warp speed to become real, profit making, ventures in an instant. But, on the other, I'm reading web bot output (and getting an occasional deeper look into the bowls of the technology than the public) where I see a world within 2-3 years of looking more like Mad Maxx's 'hood filled with Road Warriors than a Time cover splash....  (Click for subscription information - Just $30 a year and most folks tell me it's one of the best bargains on the web.)

The report that follows gets into how you can use the computer/ERP world's "use case" approach to weigh out your present day decisions which will either come back to haunt you - or bless you - when we get out there into the future.

Frugal is Fine

So is our eBook "How to live on $10,000 a year or less.  In our bookstore.

Go Tell It On the Mountain

And, when you get back, click here to send a note to your friends telling them about this, er, quirky site.

Friday Feb 10 2006

Tagging the Sheep

It wasn't enough that Katherine Albrecht of www.spychips.com was on AM Coast to Coast with George Noory last night discussing how two employees of a government contractor are "chipped" for so-called "security purposes."  And, it wasn't enough that Albrecht then went into some detail about how your supermarket checkout/discount card provides a detailed record of your spending/eating (and potentially drinking and medical) habits, too.

All of that I could lay aside and write off as "excessive concerns" until I received an email from our irate reader in England who is upset today about plans to require pub goers "thumbprint in" before they are served a pint at participating pubs at Yeovil, Somerset. 

What's interesting is that this is a private effort, designed to keep the pubs "safe" by keeping records about who is obnoxious or has caused problems for other patrons in the past. But, knowing how government works (or doesn't, depending on your viewpoints) I expect that within five years, governments will be moving in this direction globally.   Imagine a world where you "print in" to your local sports bar and your drinking record is flagged. 

I can see it now:  Government cross referencing all of your booze purchases and sending you an order to show up for mandatory "treatment" before being allowed to renew your drivers license - or as a rating scheme for federal employment, or even as a condition for receiving social security.

As the reader in England put it: "Bloody hell!"

---

By now in your economic life, you should have figured out that the relative health of the US economy (and by extension, the US's position as a global superpower) depends on American consumers consuming more and more something.  Capitalism is a "grow or die" economic system.  The economy has previously experienced spurts of growth from innovation starting with trains, automobiles, and then airplanes and space projects.  Growth has come from radio, television, and more recently, the internet. And let's not leave out the Housing Bubble. But at some point, the economic stimulative effects of each of these "innovations" wears off.

If you read Everett M. Rogers'  classic "The Diffusion of Innovation" you'll see that there are categories of adopters when a new idea comes along.  Not everyone "buys in" to a new idea when it first comes around.  In my studies, I take the ideas of folks like Rogers and hold them up to the latest "innovations" in the economy to get some sense of how the forces of capitalism are playing out.

Take the events of 9/11 (whether you think they were manufactured or not) and the result explosion not of subsequent terrorist events, but rather the explosion in supposedly beneficial economic impacts of fighting terror.  Everywhere I look, I see terror as a great economic engine released by 9/11.  TSA employs more people. Research is poured into security devises, and the list grows daily. Extra cops for airport shifts. Dog trainers. Face recognition software, biometrics...

When you read Rogers' work thoughtfully, you begin to appreciate that government, being in a hard spot, consciously or otherwise, needed an instant industry in 2001 to keep the paper-based economic game going - and false flag or genuine, it makes no difference the source of terror - because it's the economic effects that are critical to our lives. 

Try looking at the "new anti-terror industries" as growth engines to keep the general economy from imploding and then read Rogers' comments on Innovativeness and Adopter Categories:

"The individuals or other units in a system who most need the benefits of a new idea, the less educated, less wealthy, and the like) are generally the last to adopt an innovation.  The units in a system who adopt first generally least need the benefits of the innovation.  This paradoxical relationship between innovativeness and the need for benefits of an innovation tends to result in a wider socioeconomic gap between the higher and lower socioeconomic individuals in a social system.  Thus, one consequence of many technological innovations is to widen socioeconomic gaps in a social system." [Diffusion of Innovation, Rogers, 4th ed. p.275]

In order words, what the "poor folk" needed was jobs - which "terror" generically produces as the State expands its powers.  The result of the innovation (e.g. terror) is that it provides the thousands of jobs in "security" (baggage screeners, more cops at the airport), first adopted by people who were relatively better off (the class of business travelers), and the socioeconomic gap widens - precisely as we're seeing today.

---

There is, mixed up in the fine stew of terror/surveillance/Big Brotherism, a whole slew of questions that go to credibility of the promoters of this latest incarnation of the "New Economy", a role occupied until September 2001 by the Internet, but which has now been supplanted with "Anti-Terrorism" as the latest "New Economy."

Take, for example, the remarks of George Bush this week on the subject of terrorism.  Bush alleges that numerous terrorist acts have been averted, including a purported 2002 attack on a high rise building in Los Angeles in 2002.  Now, I don't doubt that Bush believes he is reporting the truth as it has been told to him, despite confusing the "Liberty Building" with the "Library Building".

But the difficulty in believing the report is that local officials in Los Angeles knew nothing of the alleged plot, which seems odd.  One would think the mayor of Tinsel Town would have had some clue and not been "blind sided" by the Bush report, although in fairness,  Mayor Antonio Villaraigosa was not mayor at the time.

So the thoughtful person is left to weigh the facts as available - from credible sources on both sides.

Yet off in the background, continuing questions arrive daily: Why won't the administration release memos and records of their behavior during the Katrina disaster?  It's not like the information wasn't available early on in the disaster. We read reports that Dick Cheney was involved in the Valerie Plame outing. Then there are reports that George Bush may a little closer association with Jack Abramoff than the "official" version.

This is not to be critical of Bush, however.  He may very well know at some visceral level, that the only thing holding the solvency of the US together right now is increased spending on Homeland Security and overseas wars.  Indeed, when we read reports that Mexican troops have escorted drug gang loads of drugs across our borders from Mexico, we see DHS' Michael Chertoff right out there asking for another $5.4 billion in funding for border security.  That might be, to an impartial investor, something akin to funding early development of the internet, in the previous "Next Big Thing" economy.

You could hypothetically ask this interesting thought question:  If the US economy were headed for the skids (and a third wave down following the Internet Bubble bursting, how many people would have died from the complete and utter collapse of the world economy?  How many from starvation, how many from urban violence, and how many from freezing, and even oil for heating and power became unaffordable?  In fact, had a global collapse have occurred, would you even be here right now?

It's not a choice I would want to make: fan foreign wars and possibly more, in order to save the Union from economic collapse.  But future historians might well advance the argument that rather than destroy the Western economies that were his avowed enemy, Osama bin Laden may paradoxically have actually saved them, at least for some period of time, from devolving more quickly into a Second Great Depression and a premature global die-off.

Go have another cup of coffee and ask yourself is that irony or planning? Not that your answer matters.  Then turn your sound up and go watch this. (with your sound up)

Trade Deficits Get Worse

Against this backdrop, there was more bad news from the Department of Commerce this morning, the trade deficit has expanded again.

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total December exports of $111.5 billion and imports of $177.2 billion resulted in a goods and services deficit of $65.7 billion, $1.0 billion more than the $64.7 billion in November, revised. December exports were $2.3 billion more than November exports of $109.2 billion. December imports were $3.3 billion more than November imports of $173.9 billion.

In December, the goods deficit increased $1.2 billion from November to $70.6 billion, and the services surplus increased $0.3 billion to $4.9 billion. Exports of goods increased $1.9 billion to $79.0 billion, and imports of goods increased $3.1 billion to $149.6 billion. Exports of services increased $0.5 billion to $32.5 billion, and imports of services increased $0.2 billion to $27.6 billion.

In December, the goods and services deficit was up $11.0 billion from December 2004. Exports were up $9.8 billion, or 9.6 percent, and imports were up $20.8 billion, or 13.3 percent.

If I'm doing the math right, the deficit is up 20% year on year for December.

Thursday, Feb 9, 2006

Crashing March

Although there are a few readers who think that my pessimism about the economy is one of the best counter-indicators of future economic developments available, there's a much larger group that thinks that in the main, I get long term trends nearly right.  One reason for this is that I use the web bot reports out of www.halfpasthuman.com to guide my "news sense."  But there's a lot more to my worries about late March.

What I'm starting to form - around the web bot idea that we'll have a context change between now and say the middle of April - is this sense that our "context changer" might be a serious crack in the economy.  Serious as in Crash. For example, one reader who's a very intelligent investor over at www.thepracticalinvestor.com notes that there are some significant cycles coming together in mid to late march:

"If the Web Bots and my own prognostications that we will see a sharp "orchestrated" decline in all the markets ending possibly in mid-March come about, don't you think that they'll meet even sooner? (referring to the expanded Fed meeting - G)

My projections for the 80-week cycle ending around March 15th are that the SPX could have an average decline of 23%, more or less. In fact, my favorite target is that the SPX will take out the 9-11 low. I suggest that will call for an emergency (Fed) meeting whenever it happens.

Hmmm.  A 23% drop in the Dow from yesterday's close would put around 8,360 on the Dow.  But we all know that once a major decline/stampede like that begins, there's nothing that will necessarily "turn the herd" there - and once we break below the September /October 2001 lows, we enter a land where the third leg of the decline from the All Time Highs of 2000 could be as much as 150% of the first decline (Elliott Rules) of the initial decline from the top. 

In one of my www.peoplenomics.com reports earlier this year, I reminded subscribers that the "rule" or up to 150% works in markets going up as well as markets going down:

(Speaking of Elliott, see the Elliottwave.com links toward the bottom of this page.)

In other words, a Dow of 5,000 this year could be in the cards.

In fact, to do a little scenario planning, how about a market decline to the 8,000 level by the end of March/mid April period, then a sideways move till early September, then an oil embargo and a Dow of 4,900?  Something like that is not pretty. But it would sure fulfill all the predictions.

On top of that I note that some of the stock market astrologers with good records are pointing to this period as a possible serious market break as well.  Now add to that elections in Israel, and reports in the Russian media that on the 28th of March, the Iranian nuclear projects will be bombed.

As I start to get a "Mogambo-sized headache" thinking about this, along comes a report that Alan Greenspan is out promoting the idea that the reason gold has been such a fine investment (doubling and then some since we moved into it before 9/11 based on the web bots) is that somehow terrorism is the reason for its appreciation.

On gold, I think Greenspan misses the point that the US is running on printed paper right now, backed by nothing more (or less) than the "full faith and credit of the government" which, if you haven't noticed is spending like there is no tomorrow.  (There might not be, of course...)

Now, I might be out of place for questioning Greenspan's thought processes (that will be hugely evident after the Crash, so we can leave it till then) but we note that gold has been around longer than American paper assets. 

Then there's the question of silver.  If Greenspan can pass off gold going up, what about Silver?  Scott Stevens, who runs the excellent weather manipulation site, www.weatherwars.info sent along this little tidbit about silver that came out last October that received little attention at the time, but it's worth being aware of:

Another plus for we silver holders.

What do you think George, Dust Bowl 2006 out across the western high plains later this year? That would just be supporting the food woes that the bots are reference. --Scott

Article Details Below: FreeMarketNews.com Tuesday, October 18, 2005 SILVER KILLS VIRUSES, STUDY FINDS

To read the full story go to: http://www.Freemarketnews.com/WorldNews.asp?nid=1401

And as if my own worries about March aren't enough, fractals contributor Gary Lammert reminds us that coming out of the pending collapse period may not be as swift as the 1930's were for the simple reason that energy's past its prime:

"In the background of all of these mechanistic consumer and generational long cycles of expansion and contraction and contemporary to the the US second 'Grand Fractal' is the transient 150 or so year window of a petroleum based world economy. For the US the next 140 year growth period, after this second cycle has its nonlinear end, will evolve in the shadow of oil depleted world coupled with a growing world population - tough times ahead for our children and grandchildren....Warm regards Gary"

OK: let me line 'em up.

1. Web bot context change due.

2. Iran oil bourse opens

3. Iran bombing being openly discussed for the 28th of March

4. Israel elections

5. Astrological signs are a coincident indicator

6. Elliott decline possible

7. 80 week cycle

8. Early announcements of drought impacts possible - Dust Bowl II

9. Greenspan attacking gold prices as a terror reaction

10. Extended Fed meeting announced

11. Then there's the housing problem...

12. Then there's people getting liquid to pay IRS bills...

13. Then there's the ocean currents shutting down and....

Add them all up and it's not for certain anything at all will happen.  On the other hand, I wouldn't be placing big bets against it.  Remember, we talked about an emotional release around February 3rd and the cartoon outrage hit that one spot on.  Between now and mid March, all I'm hoping for is a little peace and quiet...

Economic Fallout

Muslim groups have announced plans to boycott Danish-made products because of the cartoon flap.  It's expected to cost the country millions a day.  Voting with wallets is as powerful as violence.

War With Mexico

What we've described as a simmering war with Mexico has moved to the hotel district of Mexico City.  There, a Sheraton Hotel unit has been closed for expelling a group of 16 Cubans last week.  The Sheraton side of it is that the US has a trade policy against Cuba.  So, Mexico basically shut down the hotel over picky regulatory enforcement.  Tensions continue building...

Florida Oil Plans

Reports are that the Bush administration is planning to push the Interior Department into opening up a couple of million acres of offshore oil leases off Florida.  Not that it will play well, but hey, when the rest of the country needs energy...

Straits Talk

Here's something to ponder:  What if in March, China decided to occupy Taiwan?  That would certainly be a "context changer".  Some military leaders in Taiwan are worried about the ability of the US to deliver support if needed because of our foreign entanglements elsewhere. China does have the US by the goanies in both trade and buying our debt. 

No Gas

Turns out the nerve gas sensor at a Senate office building in DC yesterday was a false alarm.  Lots of nervous reports early on, though.

Jail House Rocks

Racial gang related fighting has gone on for a fifth day in a row in the Los Angeles area.  Not a good time to be doing time there.

Down the road a piece, the LA fire situation is improving thanks to winds dying down.

Lost In Space

A Bush appointee to NASA has resigned after charges that he tried to censor scientists who pointed to science that was at odds with the (corporate) views of the administration on things like global warming...  Virtually a buried story in the US mainstream media...

Wednesday Feb 8, 2006

Is the Fed Seeing Trouble?

We notice that at this hour energy prices are dropping dramatically on the commodity exchanges and that comes on the heels of the big drop in gold prices.  With this in mind, not to mention Gray Lammert's fractal work we posted this morning, the web bot forecasts previously referenced, and lots of other indicators point to a potential crash/collapse window, we throw in the stew this perhaps telltale news release from the Fed today:

The Federal Open Market Committee on Wednesday announced a change in its tentative schedule for 2006 to allow additional time at Chairman Bernanke's initial meeting with the Committee. The upcoming meeting, previously planned for March 28, will be expanded to two days and begin on the afternoon of Monday, March 27, and continue on Tuesday, March 28.

My guess is they will have a lot to talk about - like how to pump money into the economy to fight what could quickly turn into deflation...

Pass the Popcorn

My Bob Bratina and Shiona Thompson interview on CHML (900 AM, Hamilton Ontario) didn't have much time to get into Iran yesterday (notes on what I planned to go over are below), but they raised an interesting question that deserves to be repeated.  I think it was Bob who asked something to the effect "So if you see this collapse coming, why are you so chipper?"  Simple: I'm an optimistic kind of person by nature - and I'm well prepared for whatever comes along.

When you see the "handwriting on the wall" about the economy, come face-to-face with your own mortality once or twice, and take serious lifestyle changing deliberate actions to increase your odds of survival, your stress levels drop dramatically, and you can get on with what humans are supposed to be - namely be happy, self actualizing, smart/clever quite social animals.  A reader (an Army fellow, who caught my appearance on the Steve Quayle show last night) said in part...

I really enjoyed hearing you on Steve Q tonight. I just finished listening to the recording.

---

At any rate, your comment at 39 past the hour regarding you don't have a lot of wealth but you darn near don't have any debt really rung a bell. Me too. It was hard, as I know you are aware of but isn't it great? My ranch is 100% clear, a land patent property even tho I still donate to the county. There are no wires or pipes or anything coming in or across my place. I run it on propane generator and inverter with a huge set of L-16 batteries. I have the 1.5kw three blade windmill; and 1600 watts of 28 volt solar cells but they're not installed until a propitious time. The well is powered but is also hand pumped if need be.

You just sound so much like me, except I'm not married and I thought you were like very rich.

Nope.  We have a miniscule net worth - at least if you count "worth" as piles of paper and ink.  On the other hand, we're outside the urban crazy zones - a sort of psychological cloud that hangs over most big cities, especially ones with limited exits like L.A. We spent some time last night planning the garden that will go in just a few weeks from now - it should put out 300-400 pounds of fresh fruits and veggies before July, and the second crop, about half as much later on.  We have a 247 day growing season here.

Which brings me to a Wednesday morning "pop quiz" to ask yourself to determine if you're even beginning to be ready to cope with "anything can happen day" which could pop up out of the weeds any old time:

1. Without looking up, what phase is the moon in right now?
2. Without looking it up, how many days is the growing season in your city and when is the earliest safe planting day?
3. Do you have a pocket knife on you?
4. Do you know what potassium iodate is for and do you have any?
5. If someone said "Go into your house and don't come out for three weeks" and then turned off the power, what would you embrace the occasion or go nuts?

I reckon you know what our answers would be - and the point is that a little knowledge can be a very comforting thing.  If you haven't gotten a copy of at least one good personal survival book, I suggest that you read one?  The SAS Survival Handbook is a great one.  If it was only George, Steve Quayle, Matt Savinar, Cliff of web bots that were pushing you in this direction of preparedness, you might be able to scoff "damn nutjobs."  But it's not.  The US government itself is pushing you to get a kit, have a plan, and be informed.

While it strikes me as very damn strange that government is presently spending like there is no tomorrow, it occurs to me that they may know something we don't yet realize.  There may not be.

Pass the popcorn, would yah?

All the World is a Stage

...and things may not be as they seem.  As the curtain goes up on Wednesdays theatrics, the Seattle PI posts an interesting opinion piece about the current flap over a cartoon depicting the Prophet Mohamed. Interesting to note how Vladimir Putin is asking people to simmer down. Yet several readers have sent along detailed maps showing how the paper which published the cartoon in the first place is linked to various "powers that be" and that the whole thing seems quite deliberate.

Pounding Down Gold

We're enjoying the current decline in gold prices (and silver too).  Some people think that when a metal, stock, or commodity, is in a huge rally, that it will be a straight up affair.  It's not.  I look at the present drop as a fine buying opportunity, no doubt arranged by some of the big players so they can get in at lower prices, before things swing up again. 

Burning Churches, Cities

If you're keeping count, a total of nine churches have now been set afire in Alabama by a person or persons unknown.  All Baptist churches in western Alabama, too.

Then over in the LA area we have the Cleveland National Forest fire going strong - 6,500 acres up in smoke so far, and yes, this too was arson say authorities.

Unwarranted Assumptions

There's a great recap in the Houston Chronicle this morning that points out the real problem with the administration's budget proposals which are being paraded around Capitol Hill.  Little assumptions like "We'll be out of Afghanistan and Iraq by the end of the next fiscal year" are hidden in this wildly optimistic fictionalized accounting nightmare. 

Remember what I said earlier: doesn't it strike you as a bit odd that government is spending like there was no tomorrow?

Storm Follow-up

Most of the power is back on in the Pacific Northwest, which was hit with near hurricane force winds inland and greater than hurricane force winds on the Oregon coast in this past weekend's Super Bowl  weekend storm.

The War with Mexico

OK, this is not politically correct to point out, but the US is in a smoldering low level war with Mexico.  We keep seeing reports of official Mexican Army involvement with drug runners - and being caught inside the US before being chased out..  The background is that the Mexican economy is not good - teetering on the edge of collapse, some would argue (not that unlike our own, but let's not go into that).  The result is that the biggest cash crops along the US border on the Mexican side is marijuana and people smuggling.

Both are easy enough to stop, but to do so would be far too simple - and besides, the current lining of the pockets of the powers that be is just too tempting.  Still, if the US government would give up on trying to make plants that God put on earth illegal - and if the Border Patrol's frontline agents were armed with 50 caliber hardware (and larger), and instant deportation to Mexico's southern border was mandatory, then I expect the border problems would be over in short order.  But since the feds don't actually want the border tight, those simple solutions won't be enacted, and that little sideshow will continue.  Meantime, providing an avenue for weapons of mass destruction to come into our beloved country.  Oh well...

The Washington Post reports this morning on how new tighter rail security is being implemented in New Joisey for Gotham-bound commuters.

Genetic Imperialism

While we're going out of our way to plant heritage seeds in our garden this year, we note that the World Trade Organization has ruled against Europeans (and sided with the patent life agriculture outfits) in a genetically modified food case.  Frankenfoods on the march and the villagers helpless...  (Instead of calling it the Wrold Trade Organization, the World Charade Organization is a much more honest name for the corporatism deal houses.)

Cisco Earnings

So, are things looking rosy at Cisco which posted a slight increase in second quarter earnings? One of my (deflationist friends) who's initials might be Jas Jain, points out that by his read, the happy talk reports gloss over an operating income drop compared with the previous year.  Go read where the earnings are from - doesn't look like core business, he suggests. Touché.

Fractal Outlook

From Gary Lammert...(with simplified translations from me in blue)

Is there a saturation point where composite wages of a macroeconomic system - diminished by taxes, debt burden, and inflationary cost of basic necessities - can no longer support composite asset price increases? Is there saturation point of over and forward consumption and production, dependent on prevailing lending parameters and interest rates, where demand 'must' wan, leaving an over supply of unneeded products? Are these two saturation points interconnected with the integrative saturation point following, as of now, unknown laws of near-quantum unit time fractal growth and decay? Finally is the near-quantum time length of these valuation saturation nodal high and low points independent of interest rate and lending parameters - with only the degree of over valuation and subsequent under valuation dependent on the system's ongoing lending and interest rate parameters? (Have we already overshot supply and demand and about to crash?)

Last week completed a 31/77/77, x/2.5x/2.5x, maximal daily growth fractal sequence, with day 77, 2 February 2, 2006, of the third daily fractal falling with the timing precision of an atomic clock. Day 77 was a lower low than the Wilshire's recent 3 year high on day 62 (2X) occurring on 11 January 2006. Day 62 was contained within week 75 of the third weekly fractal of a 30/75/75 maximum weekly growth sequence. Did the Wilshire, the composite integral of over 95 percent of US equity valuation, bump into and otherwise deterministically achieve its fractally predestined lower high saturation point on week 75, completing the apogee bony prominence on the shoulder to the right of March 2000's head?  (Some patterns suggest the right should is finishing)

Does the complex macroeconomic system operate according to mechanistic non stochastic laws occurring in discrete fractal patterns? Is there naturally occurring feedback operant within the complex macroeconomic system that, with predictable periodicity, rights imbalances? Will the imbalances created by fifty years of continuous GDP growth be corrected in a nonlinear fashion which is the hallmark of the terminal portion of second fractal growth? Will the 35 year window for the end of the Second US Grand Fractal beginning in 1858, with a preceding First Grand Fractal base of about 70 years, end suddenly and unexpectedly? Will the Second Grand Fractal's second subfractal's nonlinear end - match the time length of the first sub fractal 74 years, from 1858 to 1932?  (Looking at fractal patterns in history, we are facing something bigger than the Great Depression.)

The 'natural fractal laws' - of equity and easily tradable asset valuation growth and decay evolutions- appear to be as exquisitely simple as they are retrospectively and prospectively demonstrable - as easily determined by valuation nodal or near nodal lows and highs. (Hindsight is better than foresight in investing...)

There are four simple fractal rules that appear operative for equity (bond, and commodity) valuation behavioral growth and decay:  (Four fractal "counts" follow)

Rule 1 Fractal valuation growth occurs in a x/2 -2.5x/ 2X-2.5x manner. Valuation nodal lows occur at the end of the first fractal 'x' and near the end of the second fractal '2-2.5x.' Apogee nodal highs occur at 2X-2.5X of the third fractal.

Rule 1A. In the unique ' debt compressing' time period of the Wilshire's great right shoulder to its March 2000 high, the fractal evolution at larger and smaller time scale fractals has been repetitively consistent in following a x/2.5x/2.5x pattern where the nodal lows are at or near the ends of first two fractals(the first nodal low defines the first fractal base unit) and the nodal high is at or near the high of the third 2.5x fractal.

Rule 2. Second fractals (even second sub fractals) are usually characterized by nonlinear drops near their 2 -2.5x ends. In the Wilshire's right shoulder this has occurred at or near 2.5X for the composite Wilshire. Smaller capitalized equities follow the 2-2.5X time frame for second fractal nonlinear decay.

Googles' recent nonlinear drop follows the non linearity characteristics of a second sub fractal terminal area with a preceding subfractal base x of 37.5 days and a nonlinear break after exactly 2x or 75 days. Of greater relevance to the larger picture is the 35 year non linearity time frame window referenced above.

Rule 3. The beginning of a major decay cycle rests in the third fractal of the preceding major growth phase. There is fluidity and continuity of growth and decay cycle where the kernel of the subsequent growth period is found within the last measure of the terminal portion of the preceding decay fractal and vice versa - much like the concepts of Eastern Yin and Yang.

Rule 4. Primary decay cycles evolve in discrete patterns usually a y/2.5y/2.5y pattern where again the terminal phase of the third decay cycles offers a base for the subsequent growth fractal.   (You can work out the counts that support the "here comes the ugly stuff" by looking at past events)

Using these rules, equity, commodity and bond monthly fractal patterns suggest a unified low in the near term with a nonlinear second fractal crash (bonds with lower interest rates) with a nodal point in the March-May 2006 time frame. (Crash expected before May '06)

A nodal low in the oil commodity stocks in this time frame (May-June) would confound most prognosticators who are focused on Kuwait's recent revelations and the volcanic unpredictability and volatility of Iran's recent rantings and threats. (Energy stocks could crash too if demand collapses) [The People's Economist  would be using tight trailing stops and be ready to exit in hair trigger fashion if he was crazy enough to be in stocks at this time.]

 Will this monthly second fractal timing coincide with the 140 year second fractal or is there another US 'zero percent fed funds rate' growth period left for the long cycle?  (Ben "drop money from helicopters to fight deflation" Bernanke just might get his chance this year to test the theory).

Gary Lammert

Tuesday Feb 7, 2006

Waiting for the Context Change

Note: This morning's report may be a tad shorter than usual because the People's Economist has been summoned to the morning show on CHML -900 AM in Canada. (8:40 AM) talk with them about Iran and how it might impact the future of all of us.  No reason not to tell you the same thing that I will try to convey to morning hosts Bob Bratina and Shiona Thompson in about 5-minutes of conversation.  It may bullet point out something like this:

• As background (and as strange as it sounds) I have a friend has what I call a software-based time machine.  Not the H. G. Wells type thing, but a suite of software tools which has been used since the late 1990's to sweep large portions of the internet's public postings and content to come up with a linguistics-based prediction about the future.  For whatever reason, the Universe moved Cliff to run a specific forward look on Iran, based on the first data coming in for the currently available ALTA 806 report and which was used as the basis of Part 1 - of what will turn out most likely to be a 7-part report from www.halfpasthuman.com. (subscriptions are still open, by-the-by.)

• First thing is the headlines: Anti-Danish demonstrations were going on Tehran yesterday. The other key point is that Iran is going ahead with enrichment plans while still talking about some kind of "deal".

• Turning on the linguistics, we can see some interesting thing about Iran:

  • President Amadinejad is a "twelfth'er", which is also referred to (with many spellings) as a member of the Hojitichi Society, a subset of the Shia sect of Islam that believes in the 12th Imam (Mahadi).

  • Linguistically, this is a Messianic group, in that they expect the 12th Imam to show up around End Times, sort of like certain Christian groups expect expect their Messiah to show up for End Times.  Interestingly - because the web bot project as we call this "language over time series" we find that there are about 2,400 words (OK, 2,389 to be exact) which are shared linguistically between Phraci/Farci/Persian/English (some going back to Sanskrit roots).

  • Apparently, the earliest the 12th Imam can arrive would be 2-years from this spring's equinox, or about the 4th lunar month of 2008 (if we've got the calendars sorted right)

  • Iran has a huge internal tension going because there is a very large 15-and under age group set that has tasted Western Media and wants to "get global" which means going for iPods and such.  And the conservative part of the Faith in Iran has started youth-oriented Madrass - something also used by the Wahabi of Saudi Arabia.  .

• Right now, linguistically, there's nothing to indicate "war" with Iran is coming in the near-term future (which would be through the end of this year).  That said, this morning, Farid Mortazavi, an influential publisher in Iran has reportedly started a "Holocaust Cartoon Contest" in his paper to give the West a taste of what religious satire tastes like.

• Between now and the end of April, we don't look for Iran's president to say much, so while Iran in the data sets show prominently in meta data for anger and aggression, at least as of the current data, they don't show up directly in conflict. 

• That's the "good news".  The bad is that we are looking for a "context creation"  something to occur between now and the end of March, which will frame all future discussions to some extent globally, but most particularly within the U.S.  We don't know specifically what the new context will be (more data to come as the runs continue), but we keep getting references to rebellion against the powers that be - encounter with scarcity, and things like that.  A sort of civil war context with points to both the US and Europe.

• The kind of "context changer" could be something like a huge currency collapse - because that would get the civilized West into bread lines, gas lines, and everything bad overnight because our economy is built on paper debt - and when the global economy goes, life's going to change suddenly and dramatically.

• After all this stuff goes down, we get into what "feels" like the R&R War which I described yesterday.

So between now and March, look for something that will "change context" and the bad news, as The People's Economist is that it could be something like a global financial disaster because one of the constant references the web bot project has made is for the US Dollars to be repudiated by all - something we've been reading about for a year and a half or longer.  And in the odd world of web bots, the further into the future we can "see" something, linguistically, the larger in its emotional impact things tend to be. Oh boy, we can hardly wait.

BTW I might be on the Steve Quayle show tonight. Have to check the calendar...

Bad Times in LA

Our friends in LA are back hacking and coughing from wild fire smoke - about 1,800 acres have gone Poof! so far as the fire season has showed up months earlier than normal. Strange winters for LA - you might remember a year ago, we were having record rainfalls and this year it's fires.

Boatloads of Fun

Royal Caribbean has ordered the biggest cruise ship in the world - this one will carry 5,400 passengers and cost over $1.1 billion dollars.

Ben Speaks

Stable prices and jobs are the main agenda items of the Fed says new chairman Ben Bernanke. Wake me up when he says something new.

Monday Feb 6, 2006

Prep Time for the "R&R War"

If you had asked me on Friday whether I thought the web bot "event: predicted for around February 3rd would be a cartoon, I would have probably laughed. "Why how could a simple cartoon be a precursor to anything, other than turning the page of the newspaper?" 

I would have been dead wrong.  No doubt about it in my mind.  It now seems that the "emotional release" event that the web bots had been predicting in here is the outrage of millions of Muslims over the cartoon that appeared in a Danish newspaper.

I was personally cheering for something else - anything else: earthquakes (which were up a bit), strange weather (Northwest wind storm), or darned near anything else - to be the bot's "event."  Why?  Because this means that the next emotional building event (once we get through bumps between now and the end of March) really seems likely to be the battle between the Judeo-Christian world and the Islamic Middle East.  I'm not clear on how it will play out (although the ALTA 806_1 report has the first pointers), but in terms of global "emotional impact" seems little doubt that in retrospect, that Danish cartoon will likely go into the history books as the modern-day equivalent of the shooting of Archduke Franz Ferdinand prior to the outbreak of hostilities in World War One.  Just a longer fuse.

I'd love to be wrong on this one, but I'll be filling up our propane tank as soon as we're through the heating season this year, on the chance that this fall we will be in an oil embargo, gas lines, and the "restrictions on travel" that the web bots have been pointing to for some time.  Remember, it's our experience in this fledgling science of peering through time based on shifts in language that the more lead time we get about an event, the more emotionally powerful it will be.  Thus, the impact on our country and general mindset of "restrictions on travel" late this year will likely be nothing short of huge.  If the bots continue to be right.

As one reader noted after watching the protests and violence of the Cartoon Event on television: "Dude, you're starting to freak me out."  We've been freaking ourselves out since the July 2001 forecast that said the world would be going through a tipping point within the next 90-days such that our lives would never be the same thereafter and that it would have aspects of "military" and "accident".  (We didn't have terror as a concept, because frankly, it was hardly ever discussed outside the Middle East prior to 9/11.  Yeah, freaky stuff, indeed.

Now, we can start to discern what I would preliminarily label as The R&R War - religion and resources.  Coming this fall to a planet near you - if the darned web bot project continues to be right.  Sure got the February 3rd emotional release event right, though...  More on this quirky fledgling science at www.halfpasthuman.com or www.urbansurvival.com/simplebots.htm.

The tragedy of events is that there are plenty of Jews, Christians and Muslims who are people of good heart who would prefer that no conflict erupt.  Yet, as the web bots have so accurately cast the social mood, we are now in "militancy" and swinging into "conflict" shortly.

Terrorists on the Loose

An al Qaida operative involved in the 2000 bombing of the USS Cole was among the group that escaped from prison in Yemen prison break last week.  Not good. Hunt's on.

Gonzalez to Dance

The Senate is calling the tune, but the spin will be uniquely his own as Alberto Gonzalez takes to the Senate today explaining why the Bush administration has placed itself above the laws about spying on Americans.  The short version is the administration's view that the nation is at war - and it's a war where information is everything.  No time for messy details like the foreign intelligence surveillance court.  It's "just paperwork" seems to be the guts of the dance.

We have to expect the Senate to grill only long enough to give the appearance of looking out for our Constitutional rights.  Why?  Elections for the House come up sooner than later and the republican majority won't want to upset the apple cart any more than the public demands.

---

Thinking about the elections to come - I'm considering a new personal rule.  Given everything else nearly equal, I'll vote for the candidate that has raised the least amount of money.  Hand's less likely to be "in the cookie jar" and beholden to special interests, I figure.  Too many sell outs about already.

After the Housing Bubble

I've been scanning the headlines wondering "What will happen to all those real estate agents once the housing bubble blows (this fall).  Strangely, not much going on except the usual discussions about how demand for bi-lingual agents is up - and how real estate is the #1 career choice for young people. 

M-3: Still Going...

I mentioned this a couple in last week's report for Peoplenomics.com subscribers: The M-3 rate of inflation seems to have dropped into what looks like a 12-13 week cycle over the past year.  Not that it's a tradable idea by itself, but it's an interesting eventuality and something I've speculated might be part of a global synchronized effort by central banks to ramp up inflation.  While the Federal Reserve is doing away with M-3 (we call the move "hide the monetary sausage").

I'm anxiously awaiting the update of the M-3 report (part of the H.6 money stocks report which is reported weekly here) so that we can see the January M-3.  If I'm right about this emergent global entrainment, it should show a rate of increase around 10-12 percent (M-3, annualized, not seasonally adjusted - NSA). Seasonally adjusted it should look like around 6.5% on the December-January annualized number.  Notice how that 6.5% is my predicted trailing twelve months inflation forecast for the first half of 2006?  The June to December rate annualizes to 10% (NSA) and the YoY rate is 7.7%.

I built a little spreadsheet which I call my "Inflationator" where I can plug in month-on-month changes and pop out the annualized rate without having to think on Monday mornings. It shows the M-3 rate in the latest reporting month (December) was up 16.56% (NSA) and 10.07% annualized on a seasonally adjusted basis.  Shock and awe: Seasonally adjusted, the annual rate of increase is only 10%.  But hey, what are seasonal adjustments for, anyway?

I dribble on endlessly about this because it makes the case that Alan Newman has made so many times over at "Pictures of a Stock Market Mania" - namely that things are off in the nonlinear portion of the curve.  That's the "magic of compound interest" at work, huh?

Global Climate Changes

Being out here on the bleeding edge of "news before it happens" we occasionally get information from other parts of the world which really grab our attention.  One such current example is the events in the area of Lake Victoria (Uganda).  We here reports that the Lake is 7-feet below normal - not a big thing in some places, but to put the volume into perspective, it takes a boat a week to go around the lake.

At the same time, many of the locals are saying the new electric works being funded by the World Bank in 2010 is in the wrong place and won't solve the problems of Ugandans today who are running generators daily for their power needs, due to the low water in the Lake.

It's worth knowing a little background, because it appears that Uganda's political problems are heating up again with reports that armed warriors have cached some 30-thousand runs in the Northeast part of the country.

---

Climate change - which has brought us an unusual and dry winter here in Texas, as well as other parts of the South - may be kicking up allergies for lots of people who think they have a cold or the flu.  A teevee report out of North Carolina makes the point. 

Valentines Tip of the Day

I have to give credit to WOAI in Houston for their story "The Five Laws of Lingerie".  I would never have thought of green lingerie without prompting. Although it is the color of money...hmmm...

---

On the lighter side, I remember wandering through South Center Mall near Seattle several years back and noticing a sign on a Victoria's Secret store that proclaimed "Bras: 50% off."  I walked in and announced to the best looking clerk I could spy that I wanted to see one of those bras that was half off...  Took her a second to get it.  "You sure you're not half off?"  (I was single at the time.)

---

Planting time is almost here, so here's a farming tip for spring:  My late father advised "Don't plant a garden bigger than your wife can take care of."

Writing Style

A reader or two has asked me to try and explain the writing style I'm after at UrbanSurvival.  Sure.  I think the ideal would be "The Playboy Advisor" writing the Forbes back pages, would be dandy.

News from Elliott Wave International

The Web UrbanSurvival Only

On to Our Chart!

I only put up one chart a week as my "freebie" site. There are several more weekly charts including our Global index, the Dow of today versus the Dow of the 1929-37 era, and how program trading is going.  To get these charts plus the very serious minded weekly analysis piece, please look at subscribing to http://www.peoplenomics.com/subscribe.htm for the low $30/year cost.

Write when you get rich,

George Ure, The People's Economist