Thursday, June 26, 2008

Central Banking Tyranny: The Next Phase

You know the first phase. The central bankers took control over the gold supply.

And you know the 2nd phase. They severed all ties to a gold standard. This unleashed the ravages of inflation.

In the 3rd phase, they used slave labor, outsourcing, and technological advances to justify the inflation to the dumbed down public. They convinced everyone into believing something that walks like a duck and quacks like a duck is not a duck. And at the same time, they convinced the dumbed down public that anyone who talks about this duck is a quack.

For years there were arguments over whether or not there was any inflation as prices on most things have doubled over the course of 10-15 years. The real rate of inflation was somewhere between 4.5 and 6.5 percent. (Note that an inflation rate of just 4.6% leads to a price doubling every 15 years.)

One of their favorite lines of bull is the concept of "relative price changes". They say that if the cost of some goods or commodities goes up, and this increased cost is offset by decreasing costs elsewhere, then there is no inflation.

Sounds good doesn't it? Perhaps, until you actually think about it. You should, because that one single line of bull has been used to scam the middle class out of trillions of dollars in wealth.

The key phrase is "decreasing costs elsewhere". For this to make sense, you have to envision the central bankers out on the golf course trying to come up with ways in which to disguise the inflation. Relative price change was one of the scams they came up with. How is it a scam? To answer that we need to look at the mechanisms for price decreases:

1. Technology and innovation boosted productivity to the point where manufacturing costs could be lowered and we could all benefit from that. In theory anyway. But instead of us all benefitting, the central bankers said "hey, we can use this to disguise the inflation". ("Randolph, that's a great idea....", "Why thank you, Mortimer.") So they got richer and everyone else got poorer, despite all the innovation and creativity and technological advance. Great deal eh?

2. Outsourcing, offshoring, slave labor, prison labor, etc. This has been a huge cost reducer. But this has enough drawbacks and downsides as it is. Namely the longterm health of the nation. Michigan is becoming a model example of what outsourcing can do to an economy over the long term. But in addition to all the drawbacks and downsides, the central bankers had to go and add one of their own: Every time America sent jobs overseas, it reduced the price of some item. The central bankers then used that price decrease to say that there was no inflation! What a scam....

3. Destruction of organized labor. This ties into outsourcing a bit, but there is an additional point to make. The central bankers like to claim that wages aren't increasing, so there is no inflation. They say this over and over again. One of the reasons wages can't increase is because workers have little bargaining power. Both because of weak unions and because of outsourcing. So when the costs of food and energy go up, people just have to bend over and take it. They don't have the ability or organization required to demand higher wages. And that's fine with the bankers because they've got everyone believing inflation is at 2%.

Ok, so that in a nutshell is how they have been able to get away with Phase 3 for so long. The more research you do, the more you realize how the central bankers actually created the conditions I outlined above. They created the conditions which are having such a deleterious effect on this country, and they actually then turn around and use those same conditions as a means to try and cover up the inflation they create. Isn't it sadistic? It's occultic. But for whatever reason, few seemed to care as this Phase 3 was implemented over the last 35 years. The people have pretty much accepted 5-6% inflation as a fact of life. How they can accept this when it will completely destroy the entire economy eventually? That, I do not know. (Black magic? Science-fiction type mind control perhaps?) But anyway that isn't the real problem.

The real problem is that the central bankers are no longer content to stay in Phase 3. They are moving to Phase 4. For whatever reason, they apparently believe the cattle, err sheeple, are ready to be more than just sheared.

The money supply, the debt, the propaganda, the media compliance, it is all moving into overdrive. Real inflation rates are pushing 10%. In case you haven't figured it out yet, yes, the real estate bubble was the final key. This was what they needed to create the facade of normalcy and cover up the true rate of inflation. They are going to use the falling value of real estate to try and claim that will somehow offset the inflation, and then use that as an excuse to say that all the money they are printing is not causing "excessive" inflation. How they are going to explain it exactly, I have no idea. Because it's complete gobbledegook. But gobbledegook is what they've been feeding the public all along. This is merely the next logical step. At any rate it does not matter how absurd their actions are, because the media will do their best to convince everyone that the central bankers are heros. At this point we're pretty much living the real life version of Idiocracy anyway, so I doubt they will have a difficult time convincing the general public to go along with this, and to laugh at anyone who tells them how badly they are getting ripped off. Hell I wouldn't be surprised if by this time next year, they got half the population believing Osama bin Laden has 500 million barrels of oil packed into his caves, and that is why the price keeps rising.

Tuesday, June 24, 2008

That Dark, Oily Cloud Over Texas

Call me propagandized, but I am one of the few who is willing to pay 2, 3, or even 10 times as much for gasoline than what I'm currently paying now. I dont have a problem with it, because I know that civilization itself is threatened by artificially low fuel prices. There isnt enough for everybody right now, and just imagine what is going to be left for anyone who is growing up right now. I wish so much of it wasn't going to waste, because it is going to be missed it when it becomes out of reach for most people. Hell, it's already out of reach for most of the world's population. It is only a matter of time before most of America becomes like most of the world.

People in this country are being stripped of their humanity to the point where they dont even care about their own children's futures. For what? To go to a ball game or a concert? To drive to a fast food joint? Really, how much of what we do actually contributes to any meaningful economic growth? That's why Europe raised their fuel taxes a long time ago. They knew this was coming. (As any person with even a high school level education should have known.) A higher fuel price increases efficiencies - not just in our vehicles but in our culture too. Efficiencies in all systems are increased. And that is precisely what needs to happen. Somehow, America allowed itself to be dominated by the culture and presumed eternal affluence of "Texas Oil", as if that oil was going to be around forever. As texas oil started to fade, this cloud of denial just sort of rolled in to take its place.

That denial is a big part of what is stripping people of their humanity. We had the oil, and we wasted it. Just like we'd do with any winning lottery ticket. We'd make grand plans about how we're not going to waste it, and then we'd waste it. That's just how it goes I guess. You know how bad it can be for one person who knows they made a horrible mistake with their finances, and then tries to deny it until it destroys them to the point where they are many times worse off than being broke. Possibly even dead. Now imagine an entire culture with that ailment. Yes, cultures suffer and die too, and they dont die alone.

The most important thing to do now is to move on. To go on pretending we still have what we had could prove to be worse than never having had it at all.

Thursday, June 05, 2008

Jobs for Oil

Today I just read about how container shipping costs have gone from $2000 to $8000. That is how much it costs to ship one of those giant 40 foot steel containers from China to New Jersey.

I've been talking about this for years... it didnt take a prophet to see this coming. I am not too happy about the hole America has dug for itself.

Lets say you can squeeze 1000 toaster ovens onto one of those giant shipping crates. If it costs $2000 to ship it to america, that is $2 per toaster. Not too shabby, eh? This is, in a nutshell, the business model of the 90's. Yes, thousands of people sat in thousands of boardrooms, crunching the numbers and seeing $$$$$$ and $$$$$$$$$.

Let me see if I got this straight...

A thousand CEOs got rich because it made financial sense to close down factories here and open factories in China. Because it is SOOO BLEEPIN SMART to trade American jobs for Chinese slave labor PLUS the foreign oil required to import the fruits of that labor. And all these really smart CEOs just assumed that the price of oil was going to stay low, even though their own country had little control over the price of oil. So unbelievably brilliant!

But with the shipping cost at $8 a pop, does it still make sense to import? Can we not build a toaster oven here in America for less? If not now, then when? When it costs $20 a pop to import?

By the way, this isnt just capitalism gone mad. This was all done by design, to destroy America and deplete the world's fossil fuels so that the global elites could have more control. (You know I just had to throw this comment in.)

Most of the people responsible for sending jobs overseas probably couldnt give a damn about the longterm survival of this country. But I seriously doubt they would destroy our production base if they knew the profits were only going to be short to medium term (less than ten years). But that is exactly what they did. And they did it because the military industrial complex controlled media censors the petroleum industry data and analyses required to make informed decisions. This is yet another example of the cancerous nature of the military industrial complex. Their attempts to control information resulted in many poor financial decisions across the board. This is why I say they are sucking the wealth right out of this country, and the world at large. Because they are. Through taxation, currency devaluation, and control of information.

Taxation. (Socializes the costs so that no one takes a personal stake in removing the waste in government systems.)

Currency devaluation. (Cost overruns result in deficits which in turn result in the creation of new money, which inflates the money supply and makes each dollar worth less.)

Control of information. (The public is kept completely ignorant of the mechanisms used to control them. What isnt talked about in the media, basically isnt talked about. People have been conditioned to literally not see a giant elephant crapping in their living room.)

At this point it is tough to decide which of those three weapons has been the most deadly. And it is really tough to even guess at which of those weapons might be disarmed first.

I Got Your Peak Oil Myth Right Here

This was written in response to the many cornucopians who think that a fall in oil prices means that peak oil is a hoax and it is time to dust off the Hummers.

Many in the peak oil community understand that one of the key symptoms of peak oil is high volatility.... in other words price spikes. And with spikes come dips. I would not be surprised if oil fell to $70. That doesnt mean it is going to stay there. And it definately doesnt make peak oil into a myth.

In order to prevent a peak, new production has to be brought online to replace the current 3~4 percent rate of depletion PLUS another 1.5% to allow for continued economic growth. That is over 4.5 million barrels a day that needs to be brought online to break us out of this plateau. That is one Saudi Arabia every 2 years. There is not one petroleum expert in the world who can tell you where all that oil is going to come from. Even IF the oil was found, there simply is not enough infrastructure (drilling rigs, qualified personnel, etc) to bring it online fast enough to ramp up production in time to offset current depletion rates. The current megaprojects have everything tied up. New rigs have to be built, new people have to be trained, and all of that takes too much time. And worst of all, the price premium on any rush order can be exorbitant. That rush to build more equipment and train more people... not to mention the energy and commodity costs to do so... THAT is what will drive oil to $300 and beyond.

Oil may drop in half to make Oblama look good for the cameras. Oil may drop to keep the focus of this election on watered-down issues. But it will not stay there until demand is destroyed. Obamanomics will ensure that this whole process accelerates.