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Economics – A Macro and Micro Heads-up

Macro: When we read an article on the economic outlook, national or international, two of the questions  we ask in evaluating the material presented are:

1. What is the track record of the predictor?

2. What’s his forum: both the place he‘s speaking from and his audience?
In the Leo Lewis (Asia Business Correspondent) article in the business.timesonline.co.uk of 2/22/10 – sourced from lifeaftertheoilcrash.net – entitled “Buy farmland and gold,’ advises Dr. Doom”, we get Marc Faber. He is “…the notoriously bearish market pundit, who predicted the 1987 stock market crash…” and he’s speaking “… in Tokyo at a gathering of 700 pension and sovereign wealth fund managers.”
Here’s some of what the article and Mr. Faber had to say:

  • “Speaking today, Dr. Faber said that investors, who control billions of dollars of assets, should start considering the effects of more disruptive events than market volatility. “The next war will be a dirty war,” he told fund managers. “What are you  going to do when your mobile phone gets shuts down or the internet stops working or the city water supplies get poisoned?”
  • “He also said that they should consider holding part of their wealth in the form of precious metals “because they can be carried.”
  • “At the heart of Dr. Faber’s argument is a fundamentally gloomy view on the U.S. economy and its capacity to service a growing mountain of debt.”
  • “His belief, fund managers were told, is that the U.S. is going to go bankrupt.”

Micro: From a number of sources (i.e., drudge.com and survivable.com) earlier this week, we got information that says: “Citigroup Warns Customers It May Refuse To Allow Withdrawals”. This specific article is the one we’ll reference. It is by John Carney, posted on business insider.com on 2/19/10.
Here’s some of what it says:

  • “… we heard that Citigroup was telling customers it has the right to prevent withdrawals from checking accounts for seven days.” This information was presented  “… on statements received by customers all over the country.”, and said in part: “ While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change.”
  • “It seems that this is something of an error. The seven day notice policy only applies to customers in Texas, Ira Stoll reports at the Future of Capitalism. It was accidentally included on customer statements nationwide.”
  • “UPDATE: According to Stoll, Citi issued a statement saying that it had been required to make this change by federal regulations–and it no longer sounds like it’s limited to Texas.”

  • “UPDATE: Citibank has now released the following statement by way of explanation: … ,we have never exercised this right and have no plans to do so in the future.”

PH Comment: That banking institutions would have the foregoing power to prevent withdrawals at their discretion should provide the prudent home with at least a couple of considerations: have your money in at least two banking institutions to increase the chances of being able make a withdrawal from one, and have an emergency “cash stash” around the house (in at least two fireproof places and checked with a counterfeit detector pen) to enable your home to function in an emergency.

If there’s a real emergency, such as one without electricity, cash may be the only thing that works.

Until next time: keep your eyes on the horizon as the weathers moving fast.

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By J.P. Redoubt – February 28, 2010

Story Time

Story Time: We going to tell you a story today. This story is unlike a lot you’ve read recently, such as a great deal of what passes for printed  news, in that it is both true and timely. It comes from some very close family friends.

One of our friends’ family members was grocery shopping recently at a nearby “big box”
market. She had just corralled her two small children for the walk from the parking lot to the store when she noticed a bumper sticker on the back of a nearby pick-up truck. The sticker read, “What luck for rulers that men don’t think.” The young mother was intrigued.

All along her walk across the parking lot she thought, “I wonder who said that?” and  – thinking about some of the bumper stickers she’d read in traffic recently – “ I wonder who would have a bumper sticker like that on their truck?”

All throughout her shopping experience her mind kept going back to the words on the sticker and wondering what the truck’s owner might be thinking in posting such a provocative comment.

She finally finished shopping, got back to her car and had just finished unloading her groceries and putting the kids in their car seats when she happened to look up to see a grandmotherly-looking woman in hospital scrubs putting several grocery bags in the bed of “bumper sticker” pick-up.

She couldn’t resist. “I was just noticing your bumper sticker and I wonder if you know who that quote was from?”, she asked. The woman smiled and said she did and began a conversation that included a number of interesting comments. Here are some of them as remembered:

  • “You know that I’ve been around the block a few more times than you and with a young family like yours, you ought to begin storing up some extra food. I think in about three months or so we’re going to experience an attack right here in our own country.”
  • “Stores like this one only have food for two days or so, even in good times.”
  • “I’m now cooking with dried beans and rice from scratch. They’re especially good for you and they’re inexpensive.”
  • “ Save and clean your used food jars because they’re great to store things like rice and dried beans.’
  • “Start buying a little extra each shopping day and put it away for an emergency.”
  • “People don’t know their history. History repeats itself and we’re about in the 1930’s.
  • “About the quote; it was from Adolph Hitler. When I tell people that, they often think I’m supportive of him and/or his views but it’s just the opposite. However, the truth is the truth no matter who says it.”
  • “We’re on the way to a one-world government now and a number of governments are involved in this effort.”
  • “Imagine how you’d feed your family during a martial-law situation.”
  • “Listen to what the people are saying.”

During the first telling of this little story, we were told that an especially spiritual member of the group listening speculated that the lady might be an angel. One of those with a more historical perspective noted that when a number of the German-Jewish survivors of the holocaust were asked how they could have missed the signs of its approach they said, “ … things happened so slowly.” And finally, a third speculated that the lady represented an example of the deep and growing dissatisfaction abroad in the country; along with a profound distrust in/of government.

Please feel free to draw your own conclusions.

Until next time; keep your eyes on the horizon as the weathers changing fast.

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By J.P. Redoubt – February 22, 2010

Conversations With ’Pop’ Smith: Little Projects

PH: Pop, haven’t seen you around lately. What have you been up to?

Pop: ’Been’ working on some “little” projects. Here are three that may be of interest to your readers:

1. ’Got’ this tip from ’Pack Rat” a couple of weeks ago at one of our coffee and fishing socials: get hold of one of those counterfeit money detection pens from your local business/office supply store. The purpose here would be to check your “stash cash” in order to make sure it’s real money. You can be sure that in an emergency, your local “Quick Stop” clerk will check your cash when you pay up for your gas.

2. You might want to set up some two-pack combos for fire starting kits for your neighbors in an emergency: use a couple of plastic, zip-lock type pill pouches that measure about 1&¾ in. X 3in. In one, put a regular book of matches and one of those little “can’t-blow-it-out” birthday candles, and in the other, put in about a half-dozen Vaseline soaked cotton balls. Put both filled and closed pill pouches in a zip-lock type sandwich bag to keep them together. Remember to tell your neighbors how to use this kit because if they have to ask you for “fire”, they may not know.

3. ‘Took’ your advice and ordered extra garden seed for my 2010 (or an “event”) garden and went a bit beyond that to have enough for next Christmas’ stocking stuffers for family. I guess there might be enough too, to have for barter – if I cut and tape a few of those bank envelopes you get back from the teller at the drive-thru – or charity, if I limit the “new” packs to 10-12 seeds each.

See you around.

Until next time; Keep your eyes on the horizon as the weathers changing fast.

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By J.P. Redoubt – February 17, 2010

Greek Economy = U.S. Economy?

Greek Economy (=U.S. Economy?): For a kind of “This is what can happen when things go into the ‘break bad’ mode” observation, we look to LATOC (lifeaftertheoilcrash.net) on 2/15/10 to find: “Greece passes new law banning ‘large’ cash transactions”. More here: http://www.reuters.com/article/idUSLDE61824V20100209

“From Jan 1, 2011, every transaction above 1500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards.”

LATOC Comment: “Welcome to the NWO. Coming to a country near you soon.”

Until next time; Keep your eyes on the horizon as the weathers changing fast.

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By J.P. Redoubt – February 17, 2010

Book Review and Commentary of Steve Solomon’s “Gardening when it counts – Growing Food in Hard Times”

Weather Report: Continuing Book Review and Commentary of Steve Solomon’s “Gardening When It Counts: Growing Food in Hard Times”, Chapter 5 – Seeds

Steve Solomon was/is a professional gardener and nowhere is this more apparent than in his discussion on seeds. He also continues to demonstrate his understanding of the importance of gardening in our lives and it is in this context that he presents his knowledge of seeds, saying:

“It (gardening) is life itself. It is independence. It is health for my family. And for people going through hard times, a thriving veggie garden can be the difference between painful poverty and a much more pleasant existence.”

The author begins the chapter, topically, with a presentation of “The mail order seed business”. Here he explains the seed business and the development of various seed and seed types from the point of view of the professional seedsman, the retailer and the home gardener.

With the foregoing information in mind he moves on to recommend to the home gardener, in his “Adapted to the region” section, this:
“When you purchase seeds, you have a far higher likelihood of a successful result if the supplier’s trial grounds are located in roughly the same climatic zone as your garden.”

He then continues by presenting and explaining key climates with their individual characteristics until he comes to “Who to buy from”. Here, he presents recommendations for seed buying, based on his years as a seedsman , by climate types. Here is an example for “Warm climates”:

“Park Seed Company: Virtually every variety the company offers represents the finest breeding attainable, entirely appropriate to its semi-tropical climate….It’s as good as it gets.”

Mr. Solomon then briefly discusses importing seeds and follows with his “Making seeds come up” section and intro into a series of discussions of seeding techniques. This series includes germination, watering, and thinning of your garden plants. This a serious discussion providing not just techniques but the all important “Whys”.

The author then moves on to “Growing your own” . Here he discusses topics like “Dry and wet seed “ and “Seed from hybrids” and other seed varieties (i.e., open – pollinated) with an informative chart on “Vegetables by method of pollination”.

There’s a small section in about the middle of this chapter we’d like to call particular attention to: “Saving on seed purchases”. In this little gem-of-a-section, Mr. Solomon not only tells you how to save money in buying your seed but explains the nature of the seed itself and then gives the home gardener clear and concise instructions on how to simply and inexpensively save/preserve your seeds at home. Invaluable!

Chapter 5 would rate as a valuable reference piece for the home gardener all by itself but , fortunately, it is surrounded by a lot of equally important gardening information in the preceding and successive chapters. We plan on reviewing Chapter 6 in the coming days. Stay tuned.

Until next week; keep your eyes on the horizon as the weathers changing fast.

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By J.P. Redoubt – February 16, 2010

Mexico, Venezuela and the Oil Export Crisis

From Investor Village (investorvillage.com) via lifeaftertheoilcrash.net – 2/10/2010, we get this Chris Nelder piece of 2/5/2010 entitled “The Oil Export Crisis Has Unofficially Arrived (E&C)”.
This article gives, among some other things, a status report on our #2 source of oil imports – Mexico – and our #3 source, Venezuela. Here are a few highlights;

MEXICO:

  • “… To update the data on Mexico, its now our #2 source of imported petroleum because Saudi Arabia has fallen from #2 to #4.
  • As of November 2009 (the latest data available) the U.S. imported 1.08 mbpd of crude and finished petroleum products from Mexico. Its exports to the U.S. peaked at 1.46 mbpd in 2004, the same year its production peaked. Net exports (production minus consumption) fell to 1.06 mbpd in 2008.
    For the years 2005-2008, Mexico’s exports to the U.S. declined by 0.51 barrels per day. In 2010, supply is expected to fall to 2.5 mpbd — nearly half a million barrels per day less than 2009.”
  • “Consequently, Mexico’s oil reserves have decreased by more than 75% in two decades (owing partly to the correction of a previous, ridiculously inflated figure), production has begun to decline and exports are falling fast.”

VENEZUELA:

  • “… As of November, the U.S. was importing 0.9 mpbd from Venezuela, making it our #3 source. Its exports to the U.S. peaked at 1.8 mpbd in 1997, the same year as its production peaked. Net exports (production minus consumption) have fallen 38% from the 1997 peak of 3.1 mpbd to 1.0 mpbd in 2008.
    Venezuela’s oil exports to the U.S. have been declining markedly since 2004, after a long period of relative stability, from 2004 through 2009, Venezuelan petroleum exports fell 0.7 mbpd.”
  • “Now Chavez is turning east for help in developing his nation’s oil and gas resources. Recent agreements include a $20 billion joint venture with Russia to develop the Junin 6 field in the Orinoco oil belt, … .
    China has agreed to build a refinery and develop the Orinoco heavy oil fields, and Venezuela has guaranteed 560,000 barrels per day to China this year.
  • “Chavez will put exports to the U.S. on a short path to zero the first chance he gets.”

PH Comment: It looks like oil availability and prices are going to be problems for the U.S. in the not-too-distant future unless we have a war between Israel and Iran: then the not-too-distant future will become NOW.

Until next time; keep your eyes on the horizon as the weather’s changing fast.

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By J.P. Redoubt – February 12, 2010

Higher Food Costs as Agricultural Commodity Prices Increase

“Commodity prices to shoot up: Jim Rogers” is the Commodity Online (commodityonline.com)  headline from its 2/09/2010 post -via lewrockwell.com on 2/10/2010 – and here’s a few excerpts:

  • … Globally renowned commodities expert and investor Jim Rogers says world’s focus in the coming years is going to be on agricultural commodities and food prices. According to him, the prices of agricultural commodities and food are going to continuously rise in the coming years. “Commodity prices are going to shoot up. The challenge is that people are eating more foods these days. But the supply of food products is coming down,” he said. Rogers, who is now settled in Singapore and who has been heavily into agricultural commodities in China, says that THE BIGGEST PROBLEM THAT THE FOOD SECTOR FACES IS THAT THE INVENTORIES OF FOOD ARE THE LOWEST NOT IN YEARS BUT IN DECADES (caps/PH).
  • “Food supply is going to remain down since we have serious production problems. At the same time people are eating more and we are burning some of our foods as fuels.” said Jim Rogers.

PH Comment: Aren’t we glad that we’re continually expanding our stored foods and our food production (e.g., gardening) skills?

Until next time; keep your eyes on the horizon as the weather’s changing fast.

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By J.P. Redoubt – February 12, 2010