So, we rise from the rubble...
Friday, October 21, 2022
"Forward… Into The Past"
"Forward… Into The Past"
The fuel crisis deepens, food shortages loom
and the lights are about to go... out.
by Bill Bonner and Joel Bowman
Delray Beach, Florida - "A news item from Tuesday. OilPrice.com reports: "Diesel Crisis Deepens As Inventories Fall To Dangerous Levels." "U.S. buyers are snapping up diesel cargos originally planned for Europe as the crisis deepens. Reuters reported earlier this month that at least three tankers carrying diesel from the Middle East had changed their course mid-journey and were now traveling to the United States. And this new competition is about to intensify.
Europe is in for a major diesel supply shock because of low inventories and strong demand. And the level of inventories had a lot to do with the unplanned outages at European refineries before maintenance season, including the four-week drop in French fuel output amid the workers’ strike."
Why are supplies running short? Because of America’s proxy war against Russia? Because virtual-signaling investors have taken their money out of the energy sector? Because oil and gas companies are not investing in new refineries, new wells, or new pipelines? Because governments are declaring war on fossil fuels, and pledging to exterminate them? Because inflation has made long term investing (the kind you need in the energy sector) too uncertain and too risky for most investors?
Of course, it is all of those things. A real ‘cluster,’ says a friend. This is not the first ‘cluster’ for mankind. Many have come and gone. But this threatens to be the biggest ‘cluster’ ever seen.
One Giant Step Backward: Perhaps it will turn out like China’s Great Leap Forward… a giant step backward for those involved. But this time, the disaster won’t be confined to a single country; it will be worldwide. Of course, Mao probably didn’t intend to kill 30 – 50 million people. It was an “accident,” said some historians (others regard it as cold-blooded murder). “Collateral damage,” might be a better description.
Mao and his henchmen were right. In 1961, China needed to industrialize. But after a few years of Mao’s policies, Deng Tsaio Ping, who had barely avoided torture and execution, realized that instead of catching up with Japan and the West, China was falling further behind. He saw the secret, too – that real wealth cannot be created by politicians and bureaucrats… and real prosperity cannot be led by central planners and central bankers. It has to arise, naturally, from the bottom up. A real, successful economy is vernacular, in other words. Not anti-vernacular.
A prosperous economy only needs the government to allow it to exist, by recognizing and protecting private property (including savings and capital wealth) and by giving people the freedom to innovate and do deals with each other. Otherwise, it should stay out of the way. “To get rich is glorious,” said Deng in 1979. Thereafter, a lot of Chinese did get rich. It was the largest, fastest build-up of wealth the world had ever seen.
No one was tortured to make it happen. No one was killed. No one starved to death. No decrees from the government told people to make steel or to build skyscrapers. Businesses were created. They paid wages. People from the countryside moved to the city for jobs and income. Chinese earnings soared. Average wages went from almost zero in 1979 to over 100,000 Chinese yuan per year (about $14,000). That’s the difference between an organic, bottom-up economy… and one where the people in charge make the important decisions. The first works; the latter doesn’t.
Theory vs. Practice: Which brings us to the point of this series. The idea of the Green Revolution is to move us quickly into the future – at least as some people see it – whether we want to go there or not. And the people behind it have their ‘scientific’ studies, their theories, and their Ph.Ds. to prove that it is the way to go. Whether they are throwing virgins into a volcano, outlawing alcohol, or invading Iraq, the know-it-all busybodies are always on board. Each time, they are wrong. And each time, there is collateral damage. And this time, we risk collateral damage on an epic scale.
China’s Great Leap Forward gives us an idea of what could happen. Trying to move the country, by force, into a new kind of economy, things soon got out of hand. “Mistakes were made,” said the communists later. But that is the story of all major government crusades. They attempt to replace something that works in practice, with something that only works in theory.
Today, Europe is leading the way. Germany has put up windmills and solar panels all over the place. It has also decommissioned its nuclear power generators. This left the country dependent on Russian energy. Then, it joined America’s proxy war against Russia in the Ukraine, hitting Russians with ‘sanctions’ designed to cripple the economy and force Russian troops out of the Russian-speaking areas of the Ukraine. That might work in theory too; but not in practice. The Conversation: "Sanctions on Russia are increasing, not decreasing, its revenue. The European Union has just approved new sanctions against Russia, including a price cap on oil sales, following the United States’ Sept. 30 announcement of new economic sanctions. Both announcements are in response to Russia’s annexation of four regions of Ukraine."
But there are still countries willing to purchase Russia’s petroleum products, sanctions are increasing Russia’s revenue, not decreasing it. Worse yet, the sanctions are driving up global oil and natural gas prices, causing spikes in inflation worldwide and, ironically, reducing the world’s access to the metals and minerals necessary for the transition away from oil and natural gas.
Virtue Shivering: In Europe, already, streetlights have already been turned off. Thermostats have been turned down. People have been urged to bathe in cold water. Supplies of firewood are running low. This is just the beginning. To the hearty Teuton householder, so far, it is little more than a nuisance… or even an adventure in virtue. Germans can feel good about themselves; they are ‘saving the planet’ even as they shiver. In America, too, rising energy prices have yet to cause a crisis. But diesel fuel is already running low.
Energy is food; Food is energy. When you eat, you are eating energy. The sun’s energy produces fruits, grains and vegetables. These are fed to animals to produce meat. But even before a single sprout appears in a field, energy has already contributed to the production. Soil has been tilled, usually by giant diesel-fed tractors… it has been raked… it has often also been treated with herbicide, insecticide, and fertilizer, made, delivered, and applied using oil and gas.
In today’s news is the following headline: "A Bill Gates fund invested $50 million in a startup that's building a massive refinery to turn alcohol into jet fuel." Where do they get the alcohol? From corn and sugarcane, produced and distributed by diesel fuel. But what a feeling of satisfaction it must give Bill Gates. Now, he can fly over the heads of millions of desperately poor people, with great peace of mind. His jet will not be powered by evil fossil fuels – but by the food of the hungry people beneath him.
Without fossil fuels, crop yields collapse. In 1850, in the UK, harvests of oats, barley and wheat averaged about 2 tons per acre. Now, they are three times as much. Corn yields per acre in the US have increased, too, by about two bushels per acre since the 1950s. And since the 1960s, yields for sugar-beets and potatoes have approximately doubled.
There’s no need for complicated math. Today’s harvests, at today’s prices, achieved with all of today’s fossil fuel inputs, feed 8 billion people. Take away any of the inputs – fertilizer, herbicide, fuel for tractors and delivery trucks, refrigeration – and food output will go down. How much? We don’t know. But since output and consumption now match up, when you reduce yields, someone is going to go hungry.
In Germany, one of the most prosperous countries in the world, there are now 3 million children living in poverty. In Italy, shopkeepers put their gas and electricity bills in their windows, to let customers know how much they pay to keep the lights on. In France, fights are breaking out in long lines of people waiting to buy gasoline. People in Prague are demonstrating to force the government to subsidize their energy bills. And the Poles are loading ‘brown’ coal in the trunks of their cars… building up a stock for the winter ahead.
The world burns about 100 million barrels of oil per day. That’s what powers our economy… puts food on the table… and electricity in our sockets. Could it be reduced? Of course, it could. But at what price? And who will pay it?
Forward… into the past: In 1973, war broke out between Israel, Syria and Egypt. The US took the Israeli side. The Arabs were the Russians back then, and they cut back on oil production by 5%. The Nixon Administration nevertheless authorized $2.2 billion in aid to Israel. This further annoyed the Arabs who retaliated with a total embargo of oil exports to the US. Prices soared. The US economy went into recession.
We recall those days. The gas stations would run out of fuel in the morning. The only way to make sure you could fill your tank was to line up in front of the pumps early. We got up at 4am, hoping to be the first in line when the station opened at 7. But there was already a long line. What else could we do? We got into line, curled up on the seat and went back to sleep. The embargo was lifted in March 1974.
It was this experience that led to the Strategic Petroleum Reserve in 1975. We pumped huge quantities of oil into vast salt caverns, where it would be available in case of emergency. It was into that reserve that Joe Biden dipped his straw earlier this year. Biden feared that high gas prices would cause his approval ratings to sink even lower, and Democratic candidates would suffer losses in the November midterm elections.
Even without a real emergency, in other words, our reserves have been depleted of about 300 million barrels – or nearly half the total. And what will happen in a real emergency? If oil production were suddenly halted altogether, our SPR would last about 2 and a half weeks. That’s why the production of new oil is essential.
But the US government is systematically strangling the industry that makes our standards of living possible. Spending in the old and gas sector dropped more than 60% from 2010 to 2020. Investment in the shale sector fell by more than 70%. The total cutback in capital spending was more than $1 trillion.
Why? The answer is another question: would you want to invest your money in an industry the government wants to put out of business? And not just your government – almost all governments are gunning for it. Globally, oil and gas investment has been cut in half since the 2014 peak.
Meanwhile, existing wells run dry – at the rate of about 8% of output per year. Since the US uses 18 million barrels per day, that means it needs to find an additional 525 million barrels of oil each year. If not… we’ll soon be sleeping in our cars waiting for gas stations to open. In other words, the elite in Europe and America are preparing another Great Leap Forward. They will stifle the vernacular, energy-based economy and replace it with their own centrally-controlled system. Europe has already made clear that it intends to “correct market mechanisms.”
Yes, they will correct the choices made by millions of their citizens with choices of their own. What will that mean? Hang on… we’ll come to that next week.
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Joel’s Note: "Some good news to end the week on, dear reader… Sure, investment portfolios are suffering their worst performance in living memory (and then some)… inflation remains stubbornly non-transitory, at 40yr highs… the US housing market is beginning to teeter, with sharp monthly price, sales and listing declines, coupled with decade-low homebuilder sentiment… and an energy shock the likes of which we haven’t seen in (at least) half a century looms large on the horizon… with widespread food shortages just around the corner…
BUT… Bill Gates is here to assuage your unfounded concerns. Essentially, reckons he, you’re looking at this all wrong. We need to see this as an opportunity… not to learn from our mistakes, per se, but to double down on them. Answering the tough questions on CNBC earlier this week, Mr. Gates praised BlackRock and the firm’s founder Larry Fink, in particular, as “great examples of private sector leadership” when it comes to dismantling what Bill Bonner has been calling the “vernacular economy” and ushering in a decidedly non-vernacular, top down, green economy.
Said Gates: “Anyone who says that climate shouldn’t be a factor in how you evaluate the future of a company, that’s not capitalism, because companies that have emissions are going to be subject to border adjustment tariffs or taxes.”
But wait, isn’t heavy-handed government meddling in the market - in the form of taxes, tariffs and subsidies to insider cronies - a step away from win-win capitalism? Don’t we call that cronyism? (Shhh!) According to Mr. Gates, instead of re-investing in the exploration and production of the fuel that brought 8 billion people to the standard of living that they so blithely take for granted, it’s time to hasten the renewable transition that has left them facing a winter without heat or light.
Viewed from this angle, that whole skirmish over in the Ukraine is really a net positive for hungry, shivering Europeans… and a valuable lesson for the rest of us. Although the lack of Russian natural gas over on the continent constitutes something of a “setback,” according to Mr. Gates, “It’s good for the long run, because people don’t want to be dependent on Russian natural gas, so they’ll move to these new [renewable] approaches, more rapidly.”
So buck up, Germany! Walk it off, France! Stiffen that upper lip, Britain! War… hypothermia… starvation… consider these the “teachable moments” of the coming Winter Catastrophe Celebration!"
"Batten Down the Hatches"
Full screen recommended.
Dan, iAllegedly 10/21/22:
"Batten Down the Hatches"
"We’re getting a fresh perspective on where the economy is heading. Jeff Bezos stepped forward and said that it’s time to batten down the hatches. Elon Says that it is Full Steam Ahead for Tesla. You decide!"
Comments here:
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Related:
Gregory Mannarino, "The Bond Market Is Burning, And It's About To Become An Inferno - Total Meltdown"
Gregory Mannarino, AM 10/21/22:
"The Bond Market Is Burning,
And It's About To Become An Inferno - Total Meltdown"
Comments here:
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"Economic Market Snapshot 10/21/22"
Market Data Center, Live Updates:
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Down the rabbit hole of psychopathic greed and insanity...
Only the consequences are real - to you!
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Latest Market Analysis, Updated 10/21/22
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A comprehensive, essential daily read.
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Financial Stress Index
"The OFR Financial Stress Index (OFR FSI) is a daily market-based snapshot of stress in global financial markets. It is constructed from 33 financial market variables, such as yield spreads, valuation measures, and interest rates. The OFR FSI is positive when stress levels are above average, and negative when stress levels are below average. The OFR FSI incorporates five categories of indicators: credit, equity valuation, funding, safe assets and volatility. The FSI shows stress contributions by three regions: United States, other advanced economies, and emerging markets."
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Job cuts and much more.
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Commentary, highly recommended:
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"The more I see of the monied classes,
the better I understand the guillotine."
- George Bernard Shaw
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Oh yeah... beyond words. Any I know anyway...
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And now... The End Game...
"How It Really Is"
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Full screen recommended.
Adventures with Danno, 10/21/22:
"Shopping At Target! Checking Prices And Food Options!"
"In today's vlog we visit Target and are noticing ridiculously high prices. Prices on groceries continue to rise, as we are also witnessing more empty shelves everywhere! It's getting rough out here as stores are struggling to get in products."
Comments here:
Thursday, October 20, 2022
Greg Hunter, "Weekly News Wrap-Up 10/21/22"
"Weekly News Wrap-Up 10/21/22"
by Greg Hunter’s USAWatcdog.com
"Russia wants to end the war in Ukraine, but it is simply not going to happen. Ukraine wants all their land back the way it was in 1991. Russia annexed a large chunk of southeast Ukraine, and is not giving it back. Meanwhile, the west keeps funding the Ukraine war that is going to get much more painful for Ukrainians. No more parties in Kiev when the power and water is turned off. Martin Armstrong says the west wants a war because the debt is defaulting, and they need someone to blame it on. The satanic globalists say they want to “build back better,” but there may not be much left when it’s all over.
Another week and another bunch of perfectly healthy people who “died suddenly.” A five-year-old died of a brain rupture, a 17-year-old star softball player died when her heart stopped for no apparent reason, and a star bodybuilder who took the CV19 shots and said, “Those of you who think the vaccine kills people can use me as a test.” Bodybuilder Doug Brignole died this week. So, the CV19 vax does kill people. There is no end in sight for the death and disabilities caused by the CV19 injections, and now the CDC just made it mandatory for public school kids.
The problems for the Democrats just keep piling up. The economy keeps tanking, and Democrat midterm candidates are running from the press and any sort of debate for fear of being creamed. Dem campaign managers are bailing out, and more court cases are being won to curb the cheating. The Dems have a bad message, a bad economy and a bad President. Joe Biden is lucky to have 10% approval if the polls were not all a bunch of fraud. Now, more and more cheating is being whittled down, and it all spells disaster in November or there will be a gigantic false flag to stop the election.
Biden says, “The economy is strong as hell,” but for most Americans, it’s just hell. Inflation is officially at 40-year highs. Mortgage giants Fannie and Freddie are in big insolvency trouble–again. The 30-year mortgage has doubled since January. Home sales have tanked, and the stock market is following the same pattern that it did just before the monster 1929 crash. Experts say it will be far more destructive because the debt is far more out of control and unpayable. Black Monday 1929 was on October 24th. October 24, 2022, is this coming Monday. Bo Polny says look out for a modern Black Monday and a rough next few weeks."
Join Greg Hunter on Rumble as he talks about these
stories and more in the Weekly News Wrap-Up for 10/21/22:
Canadian Prepper, "OMG...They're Going To Detonate A Nuke!"
Canadian Prepper, 10/20/22:
"OMG...They're Going To Detonate A Nuke!"
"Both side are accusing the other of plotting to blow
a hydroelectric plant or worse detonate a nuke."
Comments here:
Gregory Mannarino, "Situation Critical: B of A Warns Of Systemic 'Breakdown' Of Financial System"
Gregory Mannarino, PM 10/20/22:
"Situation Critical: B of A Warns Of Systemic
'Breakdown' Of Financial System"
Comments here:
Gerald Celente, "Duck And Cover, Markets Crashing, Bombs Dropping"
Full screen recommended.
Strong Language Alert!
Gerald Celente, Trends Journal 10/20/22:
"Duck And Cover, Markets Crashing, Bombs Dropping"
"The Trends Journal is a weekly magazine analyzing global current events forming future trends. Our mission is to present Facts and Truth over fear and propaganda to help subscribers prepare for What’s Next in these increasingly turbulent times."
Comments here:
"The Countdown For An Imminent 80 Percent Stock Market Crash Has Begun"
Full screen recommended.
"The Countdown For An Imminent 80 Percent
Stock Market Crash Has Begun"
by Epic Economist
"The collapse of the greatest stock market superbubble continues to unfold, with losses spreading from sector to sector, and a wave of panic and pessimism starting to take over Wall Street. New research tracking real-time data exposed that the number of stocks that crashed over 80% is no longer in the hundreds, but in the thousands. However, experts say and indicators show that despite the catastrophic drops seen so far, the market has a lot further to fall in the coming weeks, and things are going to get even more turbulent as liquidity gets tighter and corporate earnings miss investors’ expectations. A day of reckoning has arrived, and from now on, we will watch the implosion of the biggest speculative bubble in history as the wild bull market switches into a hibernating bear.
After the September CPI report was released, it became clear that the most aggressive monetary tightening cycle is nowhere near its end, and that means more downside for stocks both in the short and long term. That’s really bad news for investors, especially considering that nearly one in six stocks have already crashed by 80% or more, according to a new study tracking real-time data published by WolfStreet.com. The analysis showed that as of October 15, 2022, 1001 of the 6281 stocks traded on US financial markets have “imploded,” meaning that they’ve dropped 80% or more from their highs.
It is estimated that over 50% of the market is still overvalued, which is to say that many more zombie stocks are set to collapse as the Federal Reserve raises interest rates even more. And despite all that tightening, inflation isn’t coming down and economic imbalances aren’t fading away. Instead, slower consumer spending is silently driving a myriad of companies an edge closer to bankruptcy. At this point, it’s getting harder and harder to deny reality. Global stocks and bonds have already lost a record $46.1 trillion in value over the past nine months, as a wild selloff steamrolled numerous assets across the risk spectrum.
For indexes that started the year with valuations at multi-year or even record highs, the liquidity pullback has been pretty much like pressing a reset button. From a math standpoint, the situation is so bad, liquidity is so tight, that’s only a matter of time until the whole house of cards comes down, and when it does, millions will be left empty-handed, according to precious metals expert and financial writer Bill Holter.
“The action you are seeing now is exactly what you saw in 1987, and this is what you saw in August and September of 1929. This is what happens prior to crashes. It’s massive volatility both ways... people are losing both ways. The longs get stopped out on the downside, and the shorts get stopped out on the upside. Then, the whole floor gives way, and that’s where we are. We are right on the doorstep of a crash that will make 1987 and 1929 blush... Many people are going to lose everything overnight,” Holter alerted.
When the market falls as dramatically as it has since the beginning of this year, suddenly all of these semi-believable stories about making easy money will stop making sense. Investors will be forced to confront cold, hard reality and look for cold, hard cash. There’s no way to avoid a disaster that is already underway. So be ready for the most devastating asset bubble collapse of this entire generation!"
"Car Lot Apocalypse; Builders Will Dump Homes, Price Reductions Have Begun; Prepare For Epic Meltdown"
Full screen recommended.
Jeremiah Babe, 10/20/22
"Car Lot Apocalypse; Builders Will Dump Homes,
Price Reductions Have Begun; Prepare For Epic Meltdown"
Comments here:
Musical Interlude: Disturbed, "The Sound Of Silence"
Full screen recommended.
Disturbed, "The Sound Of Silence"
848,791,984 views
"A Look to the Heavens"
“M13 is one of the most prominent and best known globular clusters. Visible with binoculars in the constellation of Hercules, M13 is frequently one of the first objects found by curious sky gazers seeking celestials wonders beyond normal human vision.
M13 is a colossal home to over 100,000 stars, spans over 150 light years across, lies over 20,000 light years distant, and is over 12 billion years old. At the 1974 dedication of Arecibo Observatory, a radio message about Earth was sent in the direction of M13. The featured image in HDR, taken through a small telescope, spans an angular size just larger than a full Moon, whereas the inset image, taken by Hubble Space Telescope, zooms in on the central 0.04 degrees.”
- http://apod.nasa.gov/apod/ap160727.htmlChet Raymo, “We Are Such Stuff...”
“We Are Such Stuff...”
by Chet Raymo
“Be not afeard; the isle is full of noises,
Sounds and sweet airs, that give delight, and hurt not.
Sometimes a thousand twangling instruments
Will hum about mine ears, and sometimes voices,
That, if I then had wak'd after long sleep,
Will make me sleep again.”
"Caliban is talking to Stephano and Trinculo in Shakespeare's “Tempest”, telling them not to be "afeard" of the mysterious place they find themselves, an island seemingly beset with magic, strangeness, ineffable presences. And you and I, and, yes, all of us, find ourselves inexplicably thrown up on this island that is the world, and we too, if we are attentive, hear the strange music, the sounds and sweet airs, that seems to come from nowhere and everywhere
No, I'm not talking about the usual ubiquitous clamor, the roar of internal combustion, the blare of the television, the beeping of mobile phones. I'm not talking about the Limbaughs and the Becks, the televangelists, the blathering politicians, the twitterers and bloggers (including this one). I'm not even talking about the exquisite music of Mozart, the poetry of Wordsworth, the theories of Einstein.
I'm talking about the sounds we hear in utter silence, in moments of repose, in the heart of darkness, when we are a little bit afraid, disoriented, off kilter. A strange music that comes from beyond our knowing, a felt meaning. You've heard it. I've heard it. You'd have to be deaf not to have heard it.
Where we differ is how we describe it. Mostly, we give its source a name. Angels. Fairies. Gods or demons. Yahweh. Allah. Father, Son and Holy Spirit. Nixies, E.T.s, shades and shadows. Naiads, dryads, Ariel and Puck. A host of invisible creatures who are, in one way or another, images of ourselves. And, in naming, we are a little less afraid.
And some of us are just content to listen, to take delight. Having woken to the inexplicable mystery of the world- the sounds and sweet airs that give delight and hurt not- we let the music lull us back into a sweet slumber, a kind of dreamless dream, a reverie. Does reverie share a deep root with reverence? I don't know.”
- http://blog.sciencemusings.com/
The Poet: Wendell Berry, "The Circles Of Our Lives"
"The Circles Of Our Lives"
"Within the circles of our lives
we dance the circles of the years,
the circles of the seasons
within the circles of the years,
the cycles of the moon,
within the circles of the seasons,
the circles of our reasons
within the cycles of the moon.
Again, again we come and go,
changed, changing. Hands
join, unjoin in love and fear,
grief and joy. The circles turn,
each giving into each, into all.
Only music keeps us here,
each by all the others held.
In the hold of hands and eyes
we turn in pairs, that joining
joining each to all again.
And then we turn aside, alone,
out of the sunlight gone
into the darker circles of return,
Within the circles of our lives..."
- Wendell Berry
"It Is Our Fate..."
"Well, it is our fate to live in a time of crisis. To live in a time when all forms and values are being challenged. In other and more easy times, it was not, perhaps, necessary for the individual to confront himself with a clear question: What is it that you really believe? What is it that you really cherish? What is it for which you might, actually, in a showdown, be willing to die? I say, with all the reticence which such large, pathetic words evoke, that one cannot exist today as a person, one cannot exist in full consciousness, without having to have a showdown with one's self, without having to define what it is that one lives by, without being clear in one's mind what matters and what does not matter."
- Dorothy Thompson
Judge Napolitano, "Scott RItter - Ukraine Russia War Latest"
Judge Napolitano, Judging Freedom, 10/20/22:
"Scott RItter - Ukraine Russia War Latest"
Comments here:
Good Citizen, don't you want to know where the $70 BILLION
we sent to Ukraine went, which you will pay for?
"Blood On The Tracks"
George Galloway, 10/20/22:
"Blood On the Tracks: Gonzalo Lira: Don't Be Fooled
That Russia Is Losing The War, The Worst Is Yet To Come"
"Zelensky’s troops are paying a huge blood price for the empty ground that Russia hasn’t wanted, says Gonzalo Lira from the front line."
Comments here:
Gregory Mannarino, "Be Ready For Anything! Watch For A False Flag Event, Ignore The Fake News Propaganda"
Gregory Mannarino, AM 1020/22:
"Be Ready For Anything! Watch For A False Flag Event,
Ignore The Fake News Propaganda"
Comments here:
"Have Bank Bail-Ins Already Started?"
Full screen recommended.
Dan, iAllegedly 10/20/22:
"Have Bank Bail-Ins Already Started?"
"Banks will not be bailed out. They will be bailed-in using your money. Banks are already starting to collapse around us. The fractional banking system is a complete joke. It is at zero right now and your money is not safe."
Comments here:
"A Cold Day in Hell"
"A Cold Day in Hell"
A look at what happens when vernacular economies break down.
by Bill Bonner and Joel Bowman
Delray Beach, Florida - "In the news this week, The Hill: "Home sales declined the most on record in September as mortgage rates surged and pushed prospective buyers out of the once-hot housing market, according to a new report. A report from the real estate company Redfin shows the number of homes sold fell by 25 percent and new listings dropped by 22 percent last month, marking the biggest declines on record in both categories - excluding numbers at the onset of the coronavirus pandemic in April and May 2020. Although prices have declined recently, sky-high mortgage rates have pushed monthly payments up by more than 50 percent year over year, according to the report."
Middle class Americans store much of their wealth in their homes. If house prices are cut in half, so is much of their wealth. And, houses are typically a leveraged asset, a liability as well as an asset. They owe money on it. As their asset declines, the gap between the asset and the liability narrows… and sometimes closes altogether. Then, they are ‘under water,’ with no more asset left. Only liability.
But household wealth is not an easy-come, easy-go matter. It is the story of who we are and where we came from. It is a vernacular story; it echoes personal challenges, successes and failures over many years. We might have labored for an entire 40-year career in coal mining, truck driving or biological research. We invested in Amazon… we missed Tesla… and how were we supposed to know the market would turn down in 2022?
Blood, Sweat & Years: In a normal, honest, give-and-take world, people do the best they can with what they’ve got. They suffer failures… they enjoy successes; they spend much of the money they earned. But they made their mortgage payments and saved as much as they could. And now those savings are stained with sweat… and often tears. And then, when they go to their graves, a lawyer does a financial obituary, adding up the hours worked…subtracting the pizzas ordered; he comes up with a final tally.
But sometimes an anti-vernacular event – a rip-off – intrudes. The novelist Stefan Zweig described hyperinflation in Germany in the early 1920s. “The mark plunged down, never to stop until it had reached the fantastic figures of madness – the millions, the billions and trillions. Now the real witches’ sabbath of inflation started….
I sent a manuscript to my publisher on which I had worked for a year; to be on the safe side I asked for an advance payment of royalties on ten thousand copies. By the time the check was deposited, it hardly paid the postage I had put on the parcel a week before.
On street cars one paid in millions, trucks carried the paper money from the Reichsbank to the other banks, and a fortnight later one found hundred thousand mark notes in the gutter; a beggar had thrown them away contemptuously. A pair of shoelaces cost more than a shoe had once cost; no, more than a fashionable shoe store with two thousand pairs of shoes had cost before; to repair a broken window cost more than the whole house had formerly cost, a book more than the printer’s shop with a hundred presses.
Teachers had been held in high esteem in German society – before this episode of hyperinflation. But the poor professors’ wages were cut down to nothing by the inflation. They had to roll up their sleeves to pick through the garbage… or turn their daughters out onto the street to prostitute themselves… so that the family might eat."
We’ve seen a more modest version of this with our own eyes.
Promises Broken: We had a meeting with the then-president of Argentina in the late ‘90s. He had connected the Argentine peso to the US dollar, one to one. Everything seemed fine. And he swore that they would never abandon ‘the peg’ with the dollar. “It would be disastrous,” he predicted.
But just months later, we got to see how disastrous it was. The government had spent too much money. It could no longer afford to redeem pesos for dollars. So, it ‘broke the peg.’ Bank accounts were seized. Accounts that had been in dollars were converted to pesos. People who saved in dollars, ‘just to be safe,’ suddenly found their wealth clipped of 65% of its value.
Salaries were slashed by inflation. Picking through trash became common. Some people looked through the trash to find something to eat. Others pulled out the cardboard boxes which they could sell for pennies to recyclers. There were riots and demonstrations… which ended in the election of one of the most corrupt and incompetent governments in Argentina’s history. Inflation rose. The peso was worth about 30 US cents in the early 2000s. Now it is worth less than half a penny.
Civilized, vernacular order broke down. People came to see that the system was unfair… and that it rewarded people who cut in line. Each payday, they felt cheated. “What’s the point of working,” they asked themselves. And then…“These guys are crooks… and they’re getting rich. I should be a crook too.” When that happens, the whole system breaks down.
China’s Great Leap Forward: In the late 1950s, China began an ambitious campaign to modernize itself. Led by Mao Tse Tung and the communist party, the Chinese embarked on a great crusade. The whole society – its government, politics, economics, finances, and industries…all were all brought together, like an attacking army, to transform China into a modern industrial powerhouse.
At the time, China was an agrarian society. Most people still tilled the soil… and stuck to their traditional ways of life. It wasn’t the most sophisticated economy in the world. But it was capable of supporting 600 million people. In Mao’s new plan, farmers were forced onto collective farms. Private plots were made illegal. People who tried to keep their own gardens were branded as ‘counter-revolutionaries,’ and often tortured, imprisoned, killed outright, or worked to death.
So too, the customs of the countryside were banned. Weddings, funerals, feasts – traditional rituals of vernacular society – were outlawed. They were replaced by propaganda meetings and ‘struggle sessions,’ in which the ‘deniers’ and unreconstructed peasants were beaten… forced to admit their crimes… and often killed.
Early on, Mao had played a little trick on his enemies. He invited criticism. This flushed out his adversaries, conservative intellectuals, and ‘bourgeois elements.’ Later, these people were targeted. The intellectuals were sent to the countryside, where they were worked and starved. The resistors were tortured, tried, and executed. Critics learned to keep their mouths shut. Even at the height of the madness… when millions were dying, and it was obvious that the modernizing crusade was a ghastly failure… there was very little criticism or debate.
Mao knew nothing about metallurgy. Somehow, he became convinced, in the way confident ignoramuses often are, that the peasants could make steel in backyard furnaces. Millions of trees were cut down to fire up these primitive steel mills. Billions of man-hours were wasted trying to do what couldn’t be done. The result was only a few lumps of useless pig iron.
Meanwhile, those left on the farms were given new directives – from bureaucrats who knew nothing about farming. They were told to plow deeper, in the belief that the roots would have more room to grow… and to plant the seeds closer together to increase the harvest. Then, the deciders set productivity quotas based on their fantasy projections and confiscated almost all the food the farms actually produced.
Elsewhere, crops went unharvested because so many people had been diverted into the fruitless campaign to make steel in backyard ovens. The result was the largest famine in history – manmade… and unnecessary. How many died? Maybe 30 million. Maybe 50 million. Jung Chang and Jon Halliday, historians who wrote what many consider the definitive biography, Mao: The Unknown Story, reckoned 70 million. Of course, no one knows exactly. But the suffering was on a scale not seen since the Black Death haunted Europe. Whole families tried to survive by eating tree bark and clay… but starved to death anyway. There were widespread reports of cannibalism. Trying to escape or begging were punishable – even by death.
In addition to the famine, the communist police and militia did their part. In their efforts to force the Great Leap Forward onto the people, they are said to have tortured and killed more than 2 million of them.
The Next Great Crusade: China’s Great Leap Forward is worth studying. Because it is recent history; it happened during the lifetimes of many people reading this. Science was already well developed – including chemistry, metallurgy and agriculture. China, for all its faults, had automobiles and trains… it had tractors and trucks. And it had a civilized culture that was thousands of years old.
And yet, its elite – then in charge of the communist party – thought they knew better. Even when they saw that their new crusade would actually reduce China’s GDP and its population – they refused to admit failure. Instead, they stuck with it, only gradually and quietly dropping the worst elements of the program.
Chairman Mao, by the early ‘60s, was responsible for causing the deaths of millions of his countrymen. But he was neither disgraced nor hung… instead, he was a hero, and reclaimed power in 1966. Then, he began yet another Great Crusade, the Cultural Revolution, which resulted in maybe a million more deaths.
How was it possible? How did so many people allow themselves to be bullied and bamboozled into such lethal programs? People are neither always good nor always bad… neither always smart nor always dumb…but always subject to influence. And the influences are not always good ones. The big-mouths, the meddlers, and the power-mad monsters always cause problems. And then, they offer solutions that are worse than the problems they are meant to solve.
There is no record of any public crusade, intended to make the world better, that actually did so. The Great Crusades of the middle ages, the religious wars of the 15th, 16th and 17th centuries, the French Revolution and the Terror, WWI, the Russian Revolution, Nazi Germany, the Soviet Union… Prohibition, the War on Poverty, the War on Drugs, the War on Terrorism – all were disasters.
And now, the people who brought you these marvelous mishaps bring you another big campaign. It may be the most ambitious crusade in human history. Like the Great Leap Forward, it is led by fanatics. Dissent is repressed as “misinformation.” And it will up-end our traditional, vernacular economy.
There are now 8 billion people on planet earth. They depend on fossil fuel. More important, they depend on the system that brought us fossil fuel – a system of bid and ask… please and thank you… give and take…that is, they depend on a vernacular economy that gives them what they want – fairly, freely, and effectively. Take away that economy… substitute central planning by bureaucrats and party hacks, armed with statistics, quotas, rifles, tear gas, penalties, subsidies, and ‘printing-press’ money…and what do you have?
A cold day in hell."
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Joel’s Note: Just sticking on housing for the moment… it is perhaps unsurprising, given the precipitous fall in both home sales and listings for the month of September, that homebuilders would be suffering a lack of confidence in the market. A survey out this week from the National Association of Home Builders shows homebuilder confidence plunged for the tenth straight month in October, to its lowest level since 2012. The New York Post had the details…
"The NAHB index fell eight points to 38 in October – five more points than economists had expected. Index readings below 50 are considered a sign of negative sentiment among homebuilders. The latest downturn occurred as mortgage rates creep toward 7%. Coupled with still-high home prices, the higher rates are driving many prospective homebuyers out of the market due to an affordability crunch."
Remember, these are the folks with their finger on the pulse, who build homes for a living. As such, sentiment among homebuilders is often considered a “forward indicator” for health in the housing sector. Take note.
Meanwhile, desperate sellers are already lowering prices at quite the clip. According to Redfin, a record 7.9% of home listings reported price drops for the month ending Oct. 9, compared to just 4% over the same period last year, as rising rates dampen demand. Based on the current median home asking price and the 6.92% average long-term mortgage rate, buyers are looking at a 51% increase in their monthly mortgage rates year-over-year, from $1,698/month this time last year, to $2,559 today. According to the Census Bureau, around two thirds of Americans (65.5%) own real estate."
"This Is Going To Be A Winter Like No Other"
"This Is Going To Be A Winter Like No Other"
by Michael Snyder
"It is starting to get cold outside. Are you ready for a winter that will be unlike any other? As I have been documenting on The Economic Collapse Blog for months, the nightmarish global energy crisis that has erupted is not going to end any time soon. In fact, it has the potential to get a whole lot worse in 2023 and beyond. Energy prices have already risen to absolutely absurd levels, and now winter is coming. Unfortunately, many forecasters are warning that this winter is going to be a doozy. Colder than normal temperatures are expected across much of the northern hemisphere, and if that actually happens that would put a tremendous amount of strain on the system.
For example, just look at what New England is potentially facing. According to the Wall Street Journal, residents of the six states which make up the region could actually experience “rolling blackouts” if this turns out to be a really cold winter…"New England, which relies on natural-gas imports to bridge winter supply gaps, is now competing with European countries for shipments of liquefied natural gas, following Russia’s halt of most pipeline gas to the continent. Severe cold spells in the Northeast could reduce the amount of gas available to generate electricity as more of it is burned to heat homes.
The region’s power-grid operator, ISO New England Inc., has warned that an extremely cold winter could strain the reliability of the grid and potentially result in the need for rolling blackouts to keep electricity supply and demand in balance. The warning comes as executives and analysts predict power producers could have to pay as much as several times more than last year for gas deliveries if severe weather creates urgent need for spot-market purchases."
New England will likely be directly competing with the European Union for dwindling supplies of natural gas this winter. Unfortunately, there is probably not going to be enough to go around. Europeans have been urged to conserve energy for months, but much of the population is not heeding those warnings. As a result, many EU countries could also be facing blackouts in the months ahead…"The European Union could face blackouts this winter as the continent faces an ongoing energy crisis amid Russia’s war in Ukraine, but Brussels is preparing for worst-case scenarios, according to EU Crisis Management Commissioner Janez Lenarčič. Asked in an interview published Tuesday by Germany’s RND media network whether EU countries would need disaster relief due to the energy crisis, Lenarčič responded: “Yes, that is quite possible.”
If the power is completely shut off where you live for several hours on one of the coldest days of the year, what will you do? You might want to start thinking about that.
In Ukraine, much of the country is without power right now. The Russians have started to systematically go after the nation’s power grid, and at this point approximately 30 percent of all Ukrainian power stations are not functioning…"Blackouts have struck more than 1,000 towns and villages in Ukraine after a series of Russian attacks. The Kremlin has killed more than 70 people in the past fortnight after ordering rocket and drone strikes on Ukrainian cities. President Volodymyr Zelensky said 30% of Ukraine’s power stations have been knocked out in the blitz. Sections of Kyiv have been left without water and power following further blasts today."
The Russians can completely destroy the Ukrainian power grid if they wish to do so. Will they go that far? Needless to say, the weather is already starting to get really cold in some parts of Ukraine, and we are being warned that a long-term lack of power could result in an unprecedented humanitarian crisis…"WHO Regional Director for Europe Hans Henri P. Kluge said at the media briefing that the organization is working to anticipate and prepare for the challenges of the approaching “brutal” winter in its humanitarian response to Russia’s war on the country.
Kluge remarked that risk of COVID-19, frostbite, hypothermia, pneumonia, stroke and heart attack will likely increase among Ukrainians who are living “precariously,” whether in substandard shelters, without access to heating or by regularly moving to different locations."
I got the chills just reading those two paragraphs. It is starting to get cold here in the United States as well. In fact, some cities near the Great Lakes just received more than a foot of snow…"The cold front has seen freeze alerts issued for more than 89 million Americans in states in its path, already offering rounds of snow, rain, and high speed winds in the Great Lakes. More than 13 inches of snowfall recorded in cities near the lakes such as Ironwood and Marquette, as well as up to four inches in nearby Minnesota and Wisconsin."
And we are being warned that “the coldest air of the season” is now hitting the South…"The coldest air of the season so far has the South in its grip and near-freezing temperatures could set new record lows across a wide swath of the region into midweek.
AccuWeather meteorologists have been tracking a powerful disturbance since last week as it swept out of Canada and into the central and eastern United States. While this storm continues to bring the first snowflakes of the season to parts of the Midwest and Northeast, areas farther south will be in line for a dose of cold air that some may not be accustomed to handling so early in the season."
It already feels like winter for tens of millions of Americans. But the official beginning of winter is still more than two months away. That is not a good sign. For years I have been urging my readers to become less dependent on the power grid, but up until now being dependent on the power grid hasn’t been a problem. However, now things are changing in a major way. Energy prices are absolutely skyrocketing, and officials all over the globe are warning of “blackouts” this winter. I hope that you got prepared ahead of time, because this winter is going to exceedingly challenging for millions upon millions of people."
"Texas AG Urges Prosecution Over "Grotesque" 'Child-Friendly' Drag Show Near Dallas"
"Texas AG Urges Prosecution Over "Grotesque"
'Child-Friendly' Drag Show Near Dallas"
A Comment: You know, folks, I've been doing this blog for 14 years, thought I'd seen it all, and then ran across this. I'm not posting the article, read it at the link, but this shows just how far we've fallen into total, absolute disgrace. How could any parent expose their child to such vile, absolutely repulsive and disgusting conduct and say it's ok while laughing? Look at the parents in that picture, laughing and cheering! Look at the words to that song, and you play it to children in school? OMG... I don't give a damn who you are, who you love, how you love them, be Proud all you want, that's none of my business. But this is outrageous, damn you, you monsters, for exposing the children to this! And god damn these parents, they deserve only utter contempt and disgust.
I was horrified reading this, then so furious and enraged I wanted to vomit. Shame, shame on us! This isn't just an isolated incident, everywhere you look it reflects the character of what we as a country have become. And I thought, I'm too well informed to not know the unimaginable horrors on their way - you haven't seen anything yet! - and I thought, we deserve it all, and we'll get it too, and should, and I won't feel the slightest pity for them. I always believed, despite the enormous evidence to the contrary, that given the chance we as a people were basically good, morally decent and honorable folks doing their best. Sadly, I was wrong, so wrong, all along... - CP
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