TEOTWAWKIAIFF

Last night I managed to get away with my two best hombres for  a night out on the town. Much alcohol was consumed, and I dare say abused. It’s all good, despite the more puritanical listeners shaking their heads, we had a good night out and let off a lot of built up stress.

After coming home my buddies safely crashed on the couch and spare bed, I started reading the news of the day. I didn’t consume as much, so i was nursing a refreshing cocktail as I reviewed work e-mail along with the news. A word to the wise is NOT to post  to your blog, nor respond to e-mail when in such a state. It is much safer, and less of a CLM (Career Limiting Maneuver) to just flag which e-mails need a response requiring more brainpower than an affirmative, negative or message received for processing when sober.

That’s when I discovered S&P had downgraded us to AA+ with outlook negative, for an added “fuck you” to the ruling class of this country. The same ruling class that has pillaged the retirement accounts of everyone under the age of 55 — who have zero chance of getting a payback on the social security they paid into for umpteen years. I laughed myself to the point I might have wet my pants. (I have plausible deniability as I DID spill my iced-tea / lemonade /  Firefly sweet tea vodka beverage while in a fit of laughter.)  The images that come to mind are the Hindenburg, the Challenger, Titanic, Tacoma bridge etc. How long before China says: “Fuck you, America, I’m going to dump my bonds for whatever I can get, because anything is more than nothing.”?

Meanwhile we have at least a half-dozen kids lemonade stands being closed down because they don’t have a permit. The militarization of our police has turned our local police departments into armed thugs to be feared as much as the gangs our idiotic drug policies empower. Corporations gain tax breaks while cutting American jobs and posting record earnings. We build turtle tunnels and roads to nowhere instead of repairing our crumbling infrastructure of roadways and bridges. Every day some minimum-wage worker gets to feel up supposedly “free” Americans in order to travel within our own national borders. Every night thousands of illegals walk across our borders to tend the lawns, cook and clean for the upper middle class in the southwest.

The game is over, but do the players know the outcome is already set? That the lowly pawns, like myself, are what will rise to topple the kings and queens of the NWO? The music has stopped for us, but they think they still have time to grab one of the chairs.

This is going to be an interesting week.

The stock market’s going south – big time. Better buckle up and have some fun on this roller coaster.

Looks like the Debt Ceiling Crisis has been averted! Oh happy day! There will be a ticker-tape parade down Wall Street, free ice-cream, and  dancing jackasses and elephants. To celebrate, the FCC has licensed a new TV channel that will show re-runs of Dancing With the Stars, American Idol, and Hell’s Kitchen for a national celebration. Please check with your local news outlets for local celebrations for this great day for America.

The groundbreaking negotiations concluded Sunday, when President Obama took charge and brokered the three-way deal. The exact details of this plan are boring and of no consequence, but we have an exclusive report of the highlights.

• 917 billion of spending cuts over the next 10 years.
• A commission will be formed, led by President Obama’s Debt Czar, to investigate further opportunities for spending reduction of 1.5 trillion dollars.
• The Debt Ceiling will be raised by 2.1 trillion dollars, allowing us to avoid any more interruptions in our economic recovery from the 2008 financial crisis.
• 500 billion of this 2.1 trillion cushion is available with a simple signature form President Obama’s steady hand. With additional funds available as needed.
• No new taxes, or increases in existing taxes, are officially part of this plan.
• As part of this Great Compromise, there is language in the bill for all parties to pursue a balanced budget amendment to our Constitution.
• Spending cuts are targeted to impact the well-to-do middle-class, who are not as dependent on government spending.
• The middle class has been shrinking at a steady pace, as our planned economy rewards those who endorse the Benevolent President’s plans, and punish those troublemakers who fail to see his wisdom.

This announcement assures us that there will not be another debt crisis until January of 2013. This is further proof of the robustness of a planned economy.

The bill is on its way to the House and Senate where we are 100% certain the compromise will pass. The current leader of the opposition party to the Most Benevolent President Obama is Boehner, a tyrant who held this countries economic prosperity hostage for political gain. But with this compromise we are able to tax and spend ourselves into economic prosperity.

Defeated, Boehner made some comments to the press that are, quite frankly, not worth reporting. similarly, the Alzheimer’s patient from Texas had nothing worth reporting. His incessant tirade of doom and gloom never ceased during these delicate negotiations.

:dispatch: Ministry of Truth: 1 August 2011:

courtesy of Zero Hedge:

From an email just sent out by Morgan Stanley’s David Greenlaw:

The NY Fed just asked primary dealers to come downtown today at noon to meet with Fed and Treasury Dept officials. We expect to hear them outline a contingency plan for next week. Details to follow.

More from Bloomberg which confirms this is not the previously scheduled meeting:

• The Treasury has canceled its regularly scheduled individual meetings with bond dealers in favor of the group meeting, according to the people, who declined to be identified because the meeting hasn’t been publicly announced
• All 20 primary dealers were invited
• Treasury spokesmen in Washington didn’t immediately reply to a request for comment on what will be discussed at the meeting

Interesting times, indeed.

Buckle your seat belt!

I used to play Advanced Dungeon & Dragons as a kid (I know – big shocker there). Out of all the dragons, demons, and undead there was only one thing scared the willies out of me, the Demogorgon.  He lived in the 666 layers of the Abyss according to the mythology of the world AD&D was set in. Our economy is heading straight for him, on the lowest, darkest level.

Right now I see that we are stuck in a cycle.

1. News from the Euro-zone is bad
2. The Euro is shaky and weakens
3. The Dollar goes up a little
4. Gold and silver dip 2-8% and Oil creeps down some
5. The euro stabilizes from either a deal being announced -or- There is bad news in the US.
6. The euro stabilizes
7. The dollar slides
8. Oil, Silver and Gold rebound and gain a little more (<1%)
9. Rinse and Repeat.

Think of climbing down a long ladder. your left foot is the euro and the right foot the US$. Sometimes they are on the same rung, but your forever climbing down. Which foot drops first is irrelevent in the big picture. You, the world economy in this metaphor, is getting taken for a ride from your feet.

On the subject of QE3+. We have a stock bubble right now. The excess $ is flowing into the DOW because the average investor sees this as the mother of all dips, and the stock market has nowhere to go but up. This is false. The money being dumped into the Dow is there because of the big banks dumping $ from the QE’s into the market (and bonds) because there really is no where else to put it. The mattress is full, and the coffee cans of cash are buried under a 25′ hill that used to be a level back yard. I see the stock market as another asset bubble, the logical result of the stock bubble to the housing bubble. I see the current stock bubble as the grandson to the Tech bubble. If you have cash and can pull out of the market just before it pops you can make some serious money. I’m not smart enough to predict the pop, so I’m not playing the game.

To keep this asset bubble going, because if this stock market rally dies TPTB know the game is up. I expect that the Fed will continue to print money, but The mad scientists over at the Fed will cook up some other way if injecting capital without waking the sleeping sheople (Say that phrase five times real fast for bonus points). Eventually, we will catch on, but the ostrich investor will keep their heads in the sand hoping inflation won’t give them a proper fuck while their ass is flapping in the breeze. The inside investors are selling to buying stock at a ration of 250:1 to 1250:1. The smart money is running from this bubble as fast as they can into tangibles – gold, silver, land, commodities.

We will have severe inflation soon. With over 1 trillion in debt maturing in the next 4 years interest rates are going nowhere. If the fed raises interest rates by 2%, the cost of borrowing new debt skyrockets, and the bond market goes Boom! with a lot of expletives from Congress. The current borrowing rate for the Federal government is ~.33%, so you can see how a measly 2% rise will send shockwaves through whatever deal they make to raise the debt ceiling, causing another debt ceiling crisis just before the elections.

I wanted to post what I see as what is going on on a macro level so you can make better financial decisions for you and your family. This is by no means the only way of explaining what is going on, but I think it is the closest to what is really going on. Take this advice, and compare it with your own research before making a big decision!

I missed it earlier in the week as I was onsite at a customer’s where he filters even regular news due to the horrible bandwidth they get through thier business-class cable modem. But China has had enough of our monetary policy. They released a statement where they stated that its foreign currency reserves are excessive and that they need to return to “reasonable” levels.

That means since us debt is the largest percentage of their foreign holdings, that means our debt will be sold. The multi-trillion dollar questions are how fast are they going to sell, and if they are going to hold the other countries debt and just sell ours?

This is VERY big. It’s not time to hit the panic button, but it is something to keep an eye on. The dollar index is at 74 and is showing no sign of slowing down. Rawles has the magic number at 72, but I think it’s a permeable number and not a hard one.  In  other words if the index dips below 72 to say 69-70 but holds steady, I think that it is bad, but not TEOTWAWKI. Now, on the other hand, if it sails past 72 diving for the bottom of the potato chip bag for the last crumbs, that’s real bad.  TEOWAWKI bad.

So don’t panic! But be ready to panic.