St. Dan Louis’ Web-Blog from Estella Vista, West Texas (written by St. Danny in 2009) fyi: DLD passed away on 11-22-2016
My older brother had a thing about numerology, anniversaries (Kennedy assassination conspiracy theories, etc.), justice particularly for minors with a real rough childhood, and establishing a safe haven for those that could benefit from “getting away from it (rat races) all” where the southwest Texas desert air and mountains offer a respite that will last an improved lifetime.
If you have never red any of his writings, now is the time to also pray that Dan L. has no more time to spend in purgatory, which he believed was only a Catholic myth. Enjoy his style and messages often hidden within the paragraphs and diagrams:
HC-65, Box 243 A
Alpine, TX 79830
Dear Family and Friends,
Here is yet another installment of “Wandervogel Diary,” which I hope you’ll please read at your earliest opportunity.
This installment contains important information on the deepening financial crisis which may be helpful to you in your own personal planning and arrangements. Already today I have received three calls from my family members asking me, “What should I do right now?”
I told them to please read this installment of the diary to learn how to protect themselves.
Sunday, January 25, 2009
Tonight we were invited for supper at Bill and Lana Farthing’s home, our nearest neighbors. This was the second time in ten days we were invited there.
They have become very fond of Paul, who’s political and economic views are consistent with theirs. Although I have remained more reserved with them than Paul, I am nevertheless a beneficiary of his friendship with them. Lana is an excellent cook!
Bill is in his late 60s and an all-around handyman and jack-of-all-trades; he operated a small engine repair business near Houston for more than 20 years. Lana is a nurse who works two or three days a week at the hospital in Alpine, 65 miles away. Both Bill and Lana are dyed-in-the-wool survivalists. They are convinced the outside world and economy are experiencing their last gasps and will fly apart in chaos in the near future. They are distrustful of all government and just want to be left alone. They have been here for a little more than a year, have created a self-sufficient homestead, and have stockpiled all the supplies they need to survive. They—and we—believe our local solution is all about neighbors helping neighbors to thrive.
“My kids all think I’m nuts,” Lana told me. “They refuse to believe that things out there are as bad as they are.” She illustrated her vision of the future with stories of her experiences working in a Houston hospital in the aftermath of Hurricane Katrina. “Life will change very quickly,” she said. It’s changing now.
If we had any doubts about this, a phone call Paul had with his brother Conor earlier today would have dismissed any question. The family Conor has married into has been devastated by the economic crisis. His wife, who recently landed some kind of job at an Arizona hospital, is the only family member working. Everyone else—Conor, his wife’s father, uncles, cousins, etc.—have all been laid off, their employers closed down, their homes in foreclosure.
California, where most of Conor’s family lives, has announced it will be suspending or reducing welfare payments, paying state suppliers with IOUs, making huge layoffs of public employees, radically cutting public services, etc. California is the world’s eighth-largest economy, and will be one of the first places where the disruption of America’s economic house of cards will become dramatically visible. Ohio, Paul’s home state, will be particularly hard hit, too.
Paul thinks this week will be the last “normal” week we will see in a long time.
Beginning next week, he says, the economic crisis will begin snowballing as the printing presses begin turning out ever more numerous and worthless greenbacks to make interest payments to the central banks on the government’s escalating debt. Political leaders from America, England, and a host of other world capitals are increasingly speaking of a “New World Order” as the only way out of our dilemma.
The Chinese, Arabs, and Japanese have already stopped providing America with the loans it needs to perpetuate its unsustainable Ponzi scheme. An editorial in one of the official Chinese newspapers has stated that George Bush “took a wrecking ball to the world.” Dubya makes a convenient and convincing scapegoat, but how can anyone believe he was a mastermind and not a puppet?
Expect a devastating period of “hyper-stagflation” to come which will be reminiscent of Germany in the ‘20s, when a wheelbarrow full of paper money was needed to buy a loaf of bread. At the same time, the things you don’t need to survive will be able to be had for a song. This is a development that has been engineered by the money elites to confiscate as much real value in the economy as possible.
A month or two ago, the hackneyed joke making the rounds at Henry’s office was that “my 401(k) has become a 201(k).” Now we are beginning to read about the remaining value in some people’s 401(k)s being confiscated by the government on the justification that the holders of these retirement accounts are purportedly guilty of accounting and other transgressions.
Slavery has been a linchpin of the world economy since ancient times. How can anyone believe that slavery went away in the nineteenth century? Just as southern slaves became “sharecroppers,” the blatant slavery of centuries past has simply morphed into voluntary servitude that today goes by a variety of innocuous-sounding labels including “cardholder” and “consumer.”
Government bailouts are a false solution that only tightens the slave collars around our necks. With every “economic stimulus” of debt-backed currency, our subservience to the elites becomes greater.
We must all learn to be self-reliant producers, not dependent consumers. We must all learn the basics of a new economy that will encourage people to be free, creative, self-responsible, unselfish, and cooperative.
It is the only way out of the mess we’re in. It is the only way forward.
Tuesday, January 27, 2009
As we read the financial news and watch the world financial crisis deepen, now suddenly I see what the new administration’s plan may be for keeping the banks and government afloat.
I will share with you here a number of today’s breaking news headlines which will help you, too, experience a “Gestalt moment” similar to mine:
International Herald Tribune:
Massive Amounts of Drug Money
Being Used to Keep Banks Afloat as it’s
the “only liquid investment capital available”
The UN’s watchdog agency, the United Nations Office on Drugs and Crime (UNDOC), says money made in the illicit drug trade has been used to keep banks afloat in the global financial crisis. The agency’s Vienna-based executive director Antonio Maria Costa was quoted by the Austrian weekly Profil on Sunday that drug money was often the only capital available when the crisis spiraled out of control last year. The UNDOC has found evidence that “inter-bank loans were funded by money that originated from drug trade and other illegal activities,” Costa said. There were “signs that some banks were rescued in that way . . .”
Who on Earth Has $2 Trillion to Loan
to Barack Obama Right Now?
The Obama administration will have to persuade the world that the U.S. strong dollar policy is for real this time as it prepares to borrow $2 trillion to revive the U.S. economy from its worst crisis in decades. Less than 48 hours after Barack Obama became president, his choice for U.S. Treasury secretary, Timothy Geithner, said a strong dollar is in the United States’ interest. That phrasing — first used by former Treasury Secretary Robert Rubin more than 14 years ago — lost its weight and credibility when it was over-used by the Bush administration. The greenback lost about 40 percent of its value versus the euro and more than 15 percent versus the yen between 2000 and 2008. A weaker currency was an important step for the Bush White House in rebalancing a global economy plagued by a U.S. trade deficit and huge Chinese surplus. “Trillions worth of U.S. debt is coming soon to the markets. Which foreign central bank or institution will buy this debt if they’re not fully convinced the dollar will remain strong?” he added.
Wall Street Journal:
“Bankers facing worst nightmare yet as credit losses could balloon unpredictably, setting off unprecedented wave of defaults”
The bankers’ worst nightmare is the unemployment rate climbing toward 10%, a level at which credit losses could balloon unpredictably because of high defaults among people with previously strong credit histories. Right now, bank balance sheets don’t appear to be in a position to deal with unemployment moving sharply higher from its current 7.2% rate. Building up bad-loan reserves to deal with a 9% to 10% rate could produce enormous losses and pulverize capital when banks are trying to preserve the thin cushions they have. As the rate of unemployment exceeds 9%, bankers think charge-offs will start to increase by more than the increase in unemployment because high unemployment could cause an unprecedented wave of defaults among prime borrowers, who tend to have bigger loan balances.
Robert Gates in the BBC:
Barack Obama’s Administration Makes it Clear that
Afghanistan is “our top overseas military priority”
Barack Obama’s new administration sees Afghanistan as its “greatest military challenge”, US Defense Secretary Robert Gates has told Congress. “President Obama has made it clear that the Afghanistan theatre should be our top overseas military priority,” Gates said. He said the Pentagon would probably be in a position to deploy three combat brigades to Afghanistan.
Remember John DeLorean? He was the automobile entrepreneur who, in desperate financial straits in 1982, was suckered by an undercover government agent into making a cocaine deal to help keep his struggling company afloat. Then the same government that had entrapped him tried to hammer him into the ground.
My ah-ha has to do with the answer to the question: Why is Afghanistan so important that our president—who ran as the anti-war candidate—has made this primitive place “our top overseas military priority?” Opium Production in Afghanistan (hectares)
Oh sure, anyone who’s read Zbigniew Brzezinski’s The Grand Chessboard will tell you that the plan is to build an oil pipeline through Afghanistan and exercise US geopolitical primacy in Eurasia. But the real answer probably has more to do with a much fatter pipeline to the West: Opium.
Before the Cheney/Bush administration began its “war on terror” in Afghanistan in 2001, the Taliban had pretty much eradicated opium production in that country. Since then, based on UNODC data, there has been more opium poppy production in each growing season than in any one year during Taliban rule.
Also, more land is now used for opium in Afghanistan than for coca cultivation in Latin America. In 2007, 93% of the opiates on the world market originated in Afghanistan. This had an “official” export value of about $4 billion (the real number is probably many times greater), half Afghanistan’s national income. A quarter was earned by opium farmers and the rest went to district officials, insurgents, warlords, and drug traffickers.
The banks are in a much more desperate and precarious state than any of the Cheney/Bush bailout calculations took into account or publicly acknowledged. According to the most recent report by the Comptroller of the Currency, the banks’ exposure to shaky debt is so great that, no wonder none of them have resumed lending. Instead, they have issued fat bonuses to executives—many of whom won’t be there for long anyway!
Credit Exposure to Capital Ratio (amounts in millions)
|Bank||Assets||Derivatives||Credit Exposure to Capital Ratio|
|J.P. Morgan Chase||$1,768,657||$87,688,008||400.2|
|Bank Of America||$1,359,071||$38,673,967||177.6|
When the “credit crunch” began and Washington began the rush to solve the problem with taxpayer cash, no accounting of this derivative nightmare was ever brought to bear. In all the official deliberations and press releases there was not a single mention of the fact that the primary cause of the banks’ collapse was due to these debt instruments which had, as in a game of musical chairs, been cynically traded among financial institutions, each one betting on the failure of the others. It was widely discussed in the blogosphere but, like the real reasons for invading Iraq, never made it into the mainstream media. As with Iraq, one would have to assume that the reason was to obfuscate the facts and frighten the public in to accepting whatever remedy was proposed by Paulson, Bernanke, and Bush.
Now the banks and government appear to be at a DeLorean juncture, and turning to “the only liquid investment capital available.”
This will not be the first time a great nation has stooped to corruption as an expedient for addressing an economic crisis. The British trade in opium began after 1757 when Britain annexed Bengal into its empire and the British East India Company pursued a government-approved monopoly for the production and export of opium from India to China.
The East India Company shipped tons of opium into China which it traded for Chinese manufactured goods and tea. Because of its strong mass appeal and addictive nature, opium was an effective solution to a flow of silver into China that had threatened to cripple the British and other European economies. The British drug trade reversed this.
Before 1828, large quantities of the Spanish silver coin, the Carolus, had flowed into China in payment for the exotic commodities that Europeans craved; in contrast, in the decade of the 1830s, despite an imperial decree outlawing the export of “yellow gold and white silver,” only $7.3 million worth of silver was imported, whereas the precious metals exported were estimated at $26.6 million in foreign silver coins, $25.5 million in Chinese silver ingot coins, and $3.6 million in gold—$55.7 million total, or a net outflow of $48.4 million.
British exports of opium to China grew from an estimated 15 tons in 1730 to 900 tons ninety years later.
This trade produced, quite literally, a country filled with drug addicts as opium parlors proliferated throughout all of China. In an effort to stem the tragedy, the imperial government made opium illegal in 1836 and began to aggressively close down the opium dens. However, the British bribed Chinese officials to keep the opium traffic flowing. The effects on Chinese society were devastating. In fact, there are few periods in Chinese history that approach the early nineteenth century in terms of human misery.
By the 1830’s, the English had become the major drug-trafficking criminal organization in the world; very few drug cartels of the twentieth century can touch the England of the early nineteenth century in the sheer magnitude of criminality.
British smuggling of opium in defiance of China’s drug laws erupted into open warfare in the Opium Wars of 1839-1842 and 1856-1860. Because of British technical superiority, the Opium Wars were the most humiliating defeats China ever suffered. In European history, it is perhaps the most sordid, base, and vicious event in European history except possibly the excesses of Stalin’s Russia or Hitler’s Germany.
Now this pernicious approach to economic recovery appears to be making a comeback.
Except this time, instead of exporting misery to some backwater in the Third World, we are importing it, enslaving our own people, and soiling our own nest.
Wednesday, January 28, 2009
First day of Elhaz, the rune of warning, caution and protection
Elhaz is a very powerful rune. Its form represents the horns of an elk or the defensive gesture of a splayed hand. It has also been associated with a flying swan, whose feathers adorn the magical flying cloaks of the protective Valkyries.
Elhaz is also known as the Lebenrune, or “Life Rune.” Here is it shown on a patch designating medical orderlies in the German youth movement of almost eighty years ago.
Elhaz has the meaning of elk sedge, a two-edged plant with fibers that can cut like razors.
According to the Anglo-Saxon Rune Poem:
Elk-sedge grows mainly in the fenland,
Flourishing in the water, it gives grievous wounds,
Staining with the blood every man
Who tries to grip it.
Its symbolic meaning is clear: Exercise caution or suffer unpleasant consequences!
It is considered the most powerful rune of active protection against anyone or anything in conflict with, or threatening, us. Therefore, in the spirit of this runic fortnight I want to draw your attention to something which warrants your extreme caution and vigilance: the possibility of a “bank holiday” during which the monetary value of your paper assets will be significantly diminished.
Barack Obama has been repeating time and again that everybody in the country—every man, woman, and child—will have to take an economic hit to help resolve the current financial crisis. As financial pundits increasingly compare our crisis with the Great Depression, the political pundits will increasingly compare the choices facing Barack Obama to those facing Franklin Roosevelt. Watch and listen for this—it will be part of the run-up to a bank holiday or, very possibly, a justification for a fait accompli.
What exactly is a bank holiday, and how is it likely to happen? To answer these questions, we need only look to the past.
On March 5, 1933, the day after Roosevelt’s inauguration, the new president called a special session of Congress which instituted a mandatory four-day bank holiday. The Emergency Banking Act was passed by Congress in only four days, and ostensibly provided for the reopening of banks after federal inspectors had declared them to be financially secure.
But the bill also gave the Secretary of the Treasury the authority to confiscate the gold of private citizens (excluding dentists’ and jewelers’ gold and “rare and unusual” coins). Affected citizens received an equivalent amount of paper currency which was subject to later devaluation in relation to gold. This was how the US dollar was devalued by 41%, ending the monetary crisis the American economy was then experiencing.
By 1934 the paper money supply had expanded faster than the nation’s gold supply, so in order to prevent the nation’s gold supply from being drained, the government decided to devalue the dollar by 41%. Prior to 1934, an ounce of gold could be redeemed for $20.67; but after the bank holiday the government would only part with an ounce of gold in exchange for $35. In gold terms, anyone who had a US savings account lost 41% of its value overnight! In the event that Obama were to follow in FDR’s footsteps, a 41% devaluation would drop the US Dollar Index to 48, and the price of gold would increase 69% to $1,379.
We are seeing a similar process happening right now in the relationship between the US Dollar Index and the Dow. There is an inverse relationship: when the dollar index goes up, the stock market goes down, and vice versa. If you watch one metric and not the other, it is very easy to be fooled by what is actually happening.
If you were to think that changes in the price of stocks reflect changes in the real value of stock, you would be wrong. Like gold, the underlying asset (relatively speaking) is what it is. For at least two hundred years, an ounce of gold has always bought a fine men’s suit. The true value of each commodity has always been comparable to one another. Over time, the only thing that changes is how these underlying values are expressed in dollars.
On the other hand, the value of a dollar is not a constant thing—it goes up and down depending on how much paper currency the government prints and puts into circulation. Print too little, it makes bargain-hunters with dollars think they’re in heaven. But print too much (as the government is about to do now), and you’ll need a German wheelbarrow to do your business. Most disturbing, however, is that whatever value you’ve managed to save for your future—if stored in dollars—will evaporate. It happened in 1934 and it will likely happen again soon.
The thing I have been encouraging my family and friends to do is get the jump on a coming currency devaluation by storing your money’s value in commodities you need to buy anyway, like canned goods, dry foods, etc. Stock up now, and your dollar will buy more than they will after devaluation. If you’ve got money in the bank, it’s not earning interest anyway. You know you’re going to have to buy food, come what may. It cannot hurt you—and it will probably save you—if you transfer some savings into enough food to get you through an extended crisis of at least a year’s duration. Ammunition is another sound investment, as are precious metals. We must all look out for our own interests.
The government isn’t going to do it. It will, in fact, do the exact opposite.
Thursday, January 29, 2009
I know, I know. Right now you’re probably saying to yourself, “Is this going to be another screed about death, financial ruin, or crooked politicians?”
We’re now entering perilous economic times and, like West Texans awaiting the arrival of the vultures, it is essential to be able to see the positive aspects inherent in the economic destruction we are seeing. Otherwise, one will miss out on the opportunities presented to each of us with every change.
I find a great deal of solace and inspiration in the ideas of Joseph Schumpeter, a Harvard economics professor who served as the finance minister of Austria in the years immediately following WWI.
A creative thinker who thought in broad sweeps of time, Schumpeter combined economic theory, sociology, history, and statistics into what he called “social economics.” In the 1920s when there seemed to be no limits to growth, he was one of the first to predict the coming worldwide depression.
Schumpeter evolved a theory of business cycles which visualized a dynamic, irresistible force which results in alternating periods of prosperity and depression. In his massive work Business Cycles (1939), Schumpeter explained economic cycles in terms of innovation, which he believed fuels the whole phenomenon. Schumpeter showed that technological innovations tend to cluster in the trough of the cycle—where we are now—and are the real impetus behind the “spring tides” of expansion. He wrote that depressions are a natural and necessary phase because markets become saturated and innovations grow old and are eclipsed by newer and better ways. Far from being pathological, he said, depressions are a sign of vitality because they bring about the “creative destruction” of outmoded ways. (This is Schumpeter’s most famous and often-quoted expression.)
A lot of “experts” are comparing the period we’re entering to the Great Depression. They’re dead wrong. You can compare them, but they’re not the same.
The Great Depression was a downwave phenomenon. The Great Depression took the world economy into the trough. What we are experiencing is an upwave phenomenon. It is going to take us out of the trough.
To give you an idea of what I mean by “downwave,” “upwave,” and “trough,” please look at this chart for a moment. It is based on the single and only illustration in Schumpeter’s book of the same title:
Kitchen (40 mos.), Juglar (10 yrs.), Kondratyev (54-56 yrs.)
This chart depicts the economic “seasons” through which the world has been passing for hundreds of years (based on recorded economic data), and probably from the unrecorded beginning of time. To appreciate the character of these seasons, refer to the color-coding of the wave and the bar at the bottom, which is a key to the color code. Imagine what the seasons are like during these months on the key in Minneapolis, Chicago, and Buffalo and you will appreciate what the color code is saying.
Now, please understand how the chart was made. What it essentially shows are four things: short, medium, and long smooth economic waves regularly snaking back and forth across a straight horizontal baseline, and the averaging of these three waves into a “squiggly” line which also snakes across the baseline.
Significant economic events like market panics, recessions, and depressions tend to happen when the squiggly line crosses the smooth, regular line of the 54-56 year long wave, which is named after a Russian economist who rediscovered it in the 1920s.
The “upwaves” are obviously when the squiggly line goes uphill; the “downwaves” are when it goes downhill.
The “peaks” of the long wave are at their “highest” near the years 1857, 1914, and 2027.
The “troughs” of the long wave are at their “lowest” near the years 1887, 1945, and 2002.
But all this talk of ups and downs is illusory and misleading. What the chart is actually showing is a three-dimensional spiral that has been flattened into two dimensions. With spiraling movement, there is no “up” or “down,” no “peaks” or “valleys,” no “good” or “bad.”
These words represent an imposition of human emotion on a cyclical phenomenon which simply is what it is. Emotion can cloud one’s assessment of what is really going on and can prevent us from seeing the opportunities inherent in the general situation at any given time. There is opportunity in every economic season, at every point in the cycle.
One final caveat. This chart provides only an approximate idea of timing. Because the chart shows that the squiggly line is crossing the smooth long wave line in 2010, it does not mean what we’re experiencing now in 2009 isn’t really happening or that the whole chart is wrong. Cycles can definitely be affected by the actions of man, and the precisely regular timing depicted in the chart can be thrown off by big man-made events. You must adjust your thinking to the timing and cause-and-effect of actual events.
The financial markets are man-made things and therefore subject to the manipulation of men. We have learned through our own experience that the prices of silver and gold have been suppressed by the powers-that-be at least since the fall of 2008. The official price of silver has recently been in the range of $10 to $13 an ounce—but try to buy some at that price to hold in-hand. In-hand precious metals are in short supply because of heavy buying by big-money interests and foreign governments. This scarcity is not currently reflected in the market’s manipulated prices. In-hand silver is currently selling on Ebay and other outlets at two to three times the official price.
The cycles are God-made phenomena. They course through the universe on a colossal scale, irrespective of what we puny humans may try to do to ignore or alter their effects. Our wars, monetary policies, natural and man-made disasters, etc. may bend and slightly alter their regular pulse, but the cycles will in time always reset to their regular rhythms. They are stronger than man—and they’re eternal. Men might just as well try to hold back the tides or approaching storms.
The whole trick is to dress for the season and figure out how to make the most of the weather you’re going to get anyway.
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