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"CQ, CQ, is Anybody out there?" (The Day the Dollar Died Part VIII)

by John Galt

December 16, 2009

The following is an ongoing FICTIONAL ACCOUNT…..

February 25, 2010 00:10 A.M. CT

Mike’s annoying alarm went off on schedule and as was habit when he was under dispatch, he threw his winter snow gear on over his long johns, threw his boots and gloves on and went outside to check his tractor and trailer. He walked out into the globally warmed temperatures of twenty-seven below zero and as the snow crunched beneath his boots he started to ponder the phone call he received. His attempts to call his office and reach his dispatcher were for naught as all he got was the voice mail tree at his company but considering the circumstances, he figured this was the way the new world would operate, under total government control. He crawled up into the icy cab after checking the oil heaters and covers and turned the engine on the massive Kenworth over, satisfied to hear his old girl start right up in the cold Minnesota air as she had done for the past seven years.

While the truck idled and the reefer unit cycled as it was supposed to, he realized he only had fuel in the trailer for another twenty hours thus the muttering “thank God I can dump these pigs and come back home” while checking the grease on his fifth wheel and seeing what else may need to be thawed before he rolled out in an hour or so.  “12:40 in the damned morning” he whispered through his parka’s face wrap as it evaporated into the icy air. Mike trudged back inside to clean up and get ready for his “escort” which meant looking professional and making sure his .38 caliber was tucked away where she couldn’t say a darned thing much less see it through all of the winter covering.

Precisely at 1:45 a.m. just as F.D.O.T. Tillens advised, there was a knock at the door. By this time his wife was up and had the shotgun leaning against the sofa as she had learned from him not to trust anyone at anytime when the world was in a world of deep stuff that smelled like a pigpen. “Mike Elmendorff with unit 1024?” the voice said on the other side of the door. Mike replied “yes, please identify yourself and show some identification about a foot away from the peephole please as we don’t trust no one” and then he took one step back from the door, his hand on the holster of his pistol. The voice on the other side said “Certainly sir” and put an identification card up that said “BLACKWATER SPECIAL SECURITY SERVICES, OTUMWA, IA BADGE#123779 MICHAEL THOMAS”, to which after holding it for a second he said “Can I come in out of the cold now sir? I am your escort to the cold storage for this morning’s delivery.”

Mike opened the door slowly, with his wife’s hand firmly gripping the shotgun now laid across her lap as a large man entered into the foyer. “Thank you Mr. Elmendorff, I appreciate you letting me in. I am with Blackwater and your special escort for the evening over to St. Cloud and the cold storage.” The icy air was soon shut out of the home as Mike said “Please step in and warm up. Would you like a cup of coffee?” Mike motioned to his wife to take her hand off the trigger guard and waved her away to which she gladly nodded, moving her hand to the butt of the twelve gauge. “Thank you sir, I would love a cup, it is brutal out there tonight” the guard said.  After a quick cup of coffee and kiss on his wife’s cheek, Mike told her goodbye and promised to call her after he was empty. The Blackwater guard thanked her and bundled back up as did Mike to depart for St. Cloud. It was now 2:12 a.m. and Mike’s wife started to pray as she never has before. The tension was killing her inside and she just did not feel something was right about making him deliver this order without hearing from the company.

The  Kenworth lumbered slowly on to I-94 south as the sheriff’s guard pulled his squad car out of the way, satisfied after he saw Mike’s familiar truck and trailer behind the black Ford LTD with the green and blue light panels flashing in the windshield and rear window  like a Federal vehicle pulling out in front of him on to the interstate. Mike was happy to feel the warmth of the heater finally kicking in and since he was finally moving forward with his escort, he felt relaxed a bit, and turned the radio on to see what was coming in on the Citizens Band and on the old A.M. radio clear channel stations.

The C.B. was eerily silent except on Channel 9 where someone sounding either drunk or crazy was screaming about his house being invaded by agents and begging for help with what sounded like gunfire in the background. “Damned kids” Mike thought to himself as he cranked the squelch up and turned the volume down to see if he could pick up WCCO or WOI to find some news or music.  As he departed Fergus Falls he noticed some sights he never thought he would see on the interstate as he got up to speed, cars in the emergency lanes, burned out, as if someone was trying to collect the insurance or something. “That’s pretty strange for around here” he thought to himself. He tuned his C.B. up to Channel 36 as per the Blackwater instruction sheet and called for a radio check to his escort, who replied in kind. Everything was normal it seemed and thus he could take breath as soon this last burden for the time being would soon be gone.

As they hit the exit for Highway 75 into St. Cloud he notice the Sheriff’s officer was giving the Blackwater guard a hard time at the checkpoint at the end of the ramp. The deputy walked up to Mike’s cab, tapped the door with his gun and Mike slowly rolled the window down to reply. “Can I help you officer?” he asked calmly. “Son, I need to see your bills and dispatch instructions. This security guard in front of you tells me you have D.O.T. orders to proceed to the cold storage but I have no paperwork telling me such nor any radio orders to allow you through here.” Mike slowly handed the paper work to him and explained the orders he got by phone from the Federal D.O.T. and why he was up this time of the morning. “Son?” Mike said, “Boy, I took kids like you into the paddies forty years ago. I could be your father!” Mike said to lighten things up a tad. “That’s okay sir, I understand what is going on, we are getting conflicting instructions from the Feds, the governor’s office and hell, even the county every ten damned minutes it seems!” the deputy replied. “You can proceed through and have a good day!” were the last words from the twenty-something deputy from Stearns County who was just doing his job.

Mike was glad to keep moving and the radio crackled “Follow me please and keep your doors locked. We have lots of hijacking reports Mr. Elmendorff” the Blackwater agent said. Mike confirmed the instructions, grabbed the pistol out of its holster and put it on the doghouse, close enough for action if need be. As if something weird was happening when the clock flipped on his radio to 3:35 a.m. the Qualcomm unit in his truck came back to life. As Mike was winding down the highway trying to avoid hitting abandoned cars and icy spots, he notice a series of new messages as the unit booted back up. Suddenly it started to seem like life was normal as the Qualcomm emblem emblazoned the screen and a message started to be received. Mike took his eyes off of the unit as the Blackwater guard slowed down to the gates of the cold storage and started to chatter with the guard at the gate. Everything looked normal and Mike slowly crept through the gate noticing the guard with either an AR-15 or M-16 plus lots of friends.

The radio crackled “Mike, please get in line with the trucks to warehouse two and re-tune your C.B. to Channel 19 for further instructions.” Mike acknowledged and turned left to join the other four trucks in the line this early morning. As he waited patiently listening to a little Johnny Cash from WOI on the radio, he noticed his Qualcomm unit flashing, something it had never done before. “WARNING! WARNING! DO NOT ACKNOWLEDGE ANY DISPATCH ORDERS FROM F.D.O.T. VIA TELEPHONE! THESE MESSAGES COULD BE AN ATTEMPT TO SEIZE YOUR TRUCK, TRAILER AND/OR LOAD. CONTACT YOUR DISPATCH OFFICE BY 0800 OR REPLY TO THIS MESSAGE FOR INSTRUCTIONS.” Mike grabbed his .38  and laid it on his lap. He slowly started to type where he was and what the orders were without attempting to get the attention of the guards on the dock. A reply came back from the unit in very short, terse terminology:

“STANDBY FOR INSTRUCTIONS. WE WILL ATTEMPT TO SEND HELP.”

February 24, 2010 4:50 P.M. ET

“Mama, I don’t understand. You just had me grab every bit of food in your house. Just what are you planning for?” Sandy asked with a puzzled look on her face. “Honey, you and I and that husband of yours are going to spend a lot of time together and my ideal meals are not Spam, Spam and more Spam or whatever crap he bought at Chinamart, much less watching him learn how to cook, hunt, or figure out what surviving is all about. I’ve been through ice storms, the depression and your father’s unemployment in the 1970’s so I think I know a thing or two about gettin’ by” Lillian told her daughter,”Now grab all of my white linens while I grab my bottled water and gas cans out of the garage so we have a shot at making it to your place.”

Sandy was amazed at everything her mother had assembled on such short notice and took a moment to just gaze in amazement that this elderly woman who raised her so well was so prepared for what she thought was the end of the world. “Mama, I just love you, and wish I had your strength” she said.

“Honey, you do have it and this time I will force it to the surface, that I can promise” as she hugged her daughter in a deep embrace. “Now let’s get it loaded in your SUV so we can get out of here and get home before dark. Who knows what the idiots are up to and I want to get there before they figure out that we do have gas and food.”

February 24, 2010 3:40 P.M. ET

The wife looked at me as I was nuts. I explained that I had to know the news and the wind up cheapo shortwave survival radio was useless. I grabbed my pistol and promised her I would be back by the six o’clock curfew as I told her to lock up and headed next door to Fort James if I was not back by six. “James, get your butt out here” I yelled to him from his front door. “Darned if he didn’t need to add sandbags and armor plate” I muttered to myself admiring the aluminum  window shutters and plywood covering the openings in the front of his home. “I’m here, but I’m carrying, are we heading over to Old Man Lewis or what?” James asked. I nodded and we started the half mile walk up the street in an attempt to find out what the hell was happening in the world since now we were in the ultimate bubble, created by our own making and ignorance.

I took the lead and knocked on the door yelling loudly “Old Man” as he liked to be called and sure as all get out, a few minutes after banging away Old Man Lewis opened the door slowly only to stick the barrel of a .30-06 rifle through the crack in the door as he yelled “who the hell is this?” I told him it was me and James his neighbors from down the street and he unlocked what sounded like four chains before opening the door. “Dangit son, you could have called first” the old guy yelled at me. “Sir, how the heck was I supposed to do that?” I replied. “I guess it would have been too much to ask for you clowns to get an ARO rig before the fan got pooped up and call me on seventy-five meters. You yuppies are too young to understand, so I’ll forgive ya!” he replied back.

As Mr. Lewis motioned us downstairs, we noticed his windows were boarded up from the inside, so the curtains and blinds looked normal to the outside. I shrugged my shoulders to James as we headed downstairs to where he kept his amateur gear, a place where we had been visiting since we were kids, fascinated with the idea of talking to the world. “Boys, you ain’t about to believe what is going on. They’ve roadblocked the major interstates to stop the looters. The radio and TV stations are all under government orders now. This isn’t like a hurricane, it’s like the end of the world. People are calling me from around the world to ask me what is up and I’m begging them for information. Sit down and here, pass this bottle around, you’re going to need it” and after saying that he handed James a fifth of Canadian Mist and tuned his radio to the forty-one meter band.

“I know you’re not going to believe what I’m telling you, so sit tight while I tune into to one of my friends VE9 RA7 up in Canada. I have to actually contact them for information in other states to see what the hell is going on. I won’t remain on long as they are shutting down hams everywhere” he advised us. Mr. Lewis then asked “Is there any family you’re trying to reach while the hops on the East Coast are decent?” James spoke up “Yes sir, I have folks just outside of Birmingham, Alabama sir.” I had to pipe up also “I have folks just north of Buford, if there are any operators up there.” The old man looked at me like I was a three year old and replied “I don’t know son, the space aliens might have eaten everyone from Buford by now. What kind of stupid danged question was that?”

He mumbled a bit, turned the power button to his speaker on, took a swig of the Mist then tuned int around 7.221 Mhz and started the call:

“CQ, CQ, CQ, this is K9L5AV calling for anyone in the Atlanta, Georgia or Birmingham, Alabama areas, CQ, CQ, CQ” and he let off the mike and reclined back. Again a few minutes later the call went out but nothing came back. “CQ, CQ, CQ, is anybody out there, Georgia, Alabama, is anyone there, CQ, CQ?” he tried again and again. Suddenly a voice came back “This is VE9L5K in Ontario, Tom, is that you? Acknowledge please.” Old man Lewis perked up, grabbed the bottle from in front of James, took a swig as to lubricate his voice and yelled back “Sam you old dog, this is K9L5AV you’re coming in 3 over 3! How are ya doin’?” Mr. Lewis tuned the rig a bit more as the voice replied “FORTY- FOUR HERE OLD FRIEND! I’m glad to hear you’re in one piece. I was worried after the Buffalo stories we heard, over” the voice replied. The old man looked deeply concerned. He keyed the microphone and stared intently into the speaker as looking into someone’s face “What Buffalo stories? We’re blind, deaf and dumb down here, over?”

As he leaned back he turned the volume up “VE9L5K over, I’m not sure if we are authorized to tell you this but there was a bank riot in Buffalo. We heard over two hundred were arrested and five shot trying to break into a bank to get their money. The Peace Bridge is shut down, Niagara is closed and your Coast Guard has shut down the waterways in the area, OVER.”

Mr. Lewis was not pleased as he had friends and family everywhere. He keyed it up again “Any word from W6L 77J in Tonawanda? He’s an old friend, over, this is K9L5AV, over.” The voice was polite but short “No sir, nothing at all, over.” He signed the conversation off and tuned it up a few kilohertz after saying thanks to his buddy and logging the contact into his laptop for the call into Canada. “CQ, CQ, CQ, this is K9L5AV does anyone in Georgia or Alabama acknowledge this transmission, CQ, CQ, CQ” he repeated again. James was now freaking out a bit as I was getting even more nervous also. The whiskey was gone and the temperament of Mr. Lewis had changed, “Boys, get some coffee on. This is going to be a long night.” I told him we could not leave our wives alone and he replied “One of you should stay and get the news so we can spread it as fast as we can. Things ain’t what they seem and I can’t get an answer on any of the networks. Something big is up and I’m scared to guess what it might be.” James nodded to leave but before he did the old man grabbed his arm and said “Come with me.” He lead James to his workbench and handed him an old Zenith Transoceanic radio with a box of batteries. “You need to tune into the news from overseas and get the word out. I’m afraid something really bad has happened” he told him as he handed the rig to him and patted him on the back.

“Now let’s see if we can find the world” he replied to me, motioning back to the radio room. “But my wife…” I started to say and James cut me off saying “Don’t worry, I’ll escort her over here before curfew and watch your house. I want to know that is up and as soon as you know, tell me in the morning.” It was already five fifteen and darkness would arrive soon. “Thank you James, be careful out there, this is getting weird” and he nodded as he walked out the door as to acknowledge that our friendship had grown instantly. “Son! Get in here! You ain’t going to believe this!” the old man’s voice crackled out as I locked the seven locks on his front door. “Now what?” I thought to myself. Darned if I had not learned to quit asking that question, as the more information might scare me a tad bit more than the lack of information. “Sigh, another sleepless night” I said as I walked down the stairs.

When I walked into the radio room Mr. Lewis has the speakers blaring with military march music. “Why are you tuned into Cuba?” I yelled at him over the din.

“It ain’t Cuba!” he yelled back.

Security for Liberty for All (The Day The Dollar Died Part VII) by John Galt is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.
Based on a work at johngaltfla.com.
Permissions beyond the scope of this license may be available at www.johngaltfla.com.

Obamarket Update for 12/10/09: Beware of the Sovereign Wealth Funds

by John Galt

December 10, 2009

The 30 year bond auction I was worried about yesterday fulfilled my concerns today:

When you add the current yields (My 1-3-6 Rule) of the short term Treasuries as I discussed on Glenn Beck’s program this morning, there is a major storm brewing should the trend in the 10 and 30 year bond auctions continue. Here is a quick and dirty picture except the 6 month has already fallen back to 0.14% after the market close:

These short term charts strongly reflect the massive moves into the short term maturities over the past 90 days and begs the question as to who is scared of what and why? I have a theory that I shall propose tomorrow night after I speak with a few contacts inside the securitization industry but what I am smelling is a real estate, employment, and consumption nightmare all peaking again within 60 days along with Sovereign Wealth Funds extracting funds from our markets due to domestic instability within their own nations. The list of countries beyond the PIIGS (Portugal, Italy, Ireland, Greece & Spain) which are experiencing issues within their economies is starting to get rather lengthy and when nations like Mexico, Ukraine, GCC members beyond Dubai, and the Baltic nations start to have banking problems we will see an even greater flight to safety and away from any long term investments.

In my opinion, the SWF crisis could be the trigger for a divergence with high long term interest rates, 0% short term rates, a strong dollar (technical surge) along with a recovery in the gold price and other liquid commodities (Financially liquid). Thus why you can no longer depend on the canned news from the MSM or local media and must continue to explore the news sources beyond our borders to get information about problems before they hit here. We might be enjoying a Christmas ham or opening presents while a banking collapse initiates half a world away. Thus I say enjoy the holidays and pay attention.

Domestically the news of an expansion in the unemployment claims for last week is not a shocker and to pile on to the bad news, Clusterstock.com comes up with a chart from DiscoverCard Small Business Watch which reflects the dangerous problem of small business owners with cash flow issues:

Why does this relate so strongly to employment and inventories? That’s simple. The cash flow problems first slow the efforts if not eliminate the idea of expansion. The lack of available credit is stifling any hope of small businesses with a successful model expanding rapidly thus keeping the lid on hiring and dimming the hopes of millions who keep hearing about this recovery thing the news keeps promoting along with the Bubbleconomist crews.  I fear that tomorrow morning’s retail sales report will simply reinforce the notion that there is no recovery under way, no how, any time soon. This is a statistical recovery created with government money and the final revision to GDP will probably reflect that fact.

Thus I must give today’s market action 3 full Obama Fails based on the bond auction and his actions in Europe. He can not be happy after being called out by the Norweigen king and then finds out that the aliens he summoned were late for the program and thus could not get a seat at the Nobel presentation for the peace he has yet to create. Sort of like all those jobs he has yet to create.

A Quick Reminder

Sometimes I’m bad or unclear in many ways and it is due to ADD that Glenn Beck got rid of with a Snickers bar which bounced off of a fat German guy in his basement and hits me daily.

The Blovel series, the Day the Dollar Died will resume next Wednesday, December 16, 2009.  The next chapter is titled:

“CQ, CQ, Atlanta, Birmingham, is Anybody out there?” (The Day the Dollar Died Part VIII)

I’ll keep cranking it out weekly from there but I have another project to work on at the same time. In the interim, look for a “Footnotes” posting with links to all of the stories that I’ve viewed in the past two years (at least as many as I still have bookmarked).

I hope everyone has been enjoying it and I think you’ll really enjoy the next chapter.

-John

The Bananas of our Banana Republic Wish to Offer this Brief P.S.A.: Oh Crap!

by John Galt

December 9, 2009

Yes, the Bananas, upon threatening to kick the snot out of another mascot again as pictured above demanded equal time tonight. So instead of our regularly scheduled rants about the markets they wish to offer something of a warning, of great importance, and a follow up to a previous thread on the bond market:

Oh Crap!

To say that today is a reason to worry, well, that’s an understatement. The 10 year auction indicated something that many blew off as “year end” nonsense. I view it as something dangerous and different that the Treasury and Fed will never admit to publicly:

That the world is tired of investing in a loser and the process of rotation out of the long end and into the short term has accelerated.

The results say it all:

This was not a good auction and even old Rick Santelli gave it a grade of “C”. Thus why the concerns about tomorrow’s 30 year auction and how the yield curve has steepened because the 1-3-6 month maturities have dived and the long end is spiking up (Chart courtesy of FINRA):

If the long end cracks 4.80% then 5.00% watch out as the cheap money for mortgages will dry up overnight and the cost of loans to small business, something the administration is touting will be horrible for the statistical recovery.

The one month yield chart on a weekly basis best reflects the gravity of where we are compared to where we were and why this “rally” in equities is about to come cratering down:

The three month chart is much the same message with the bananas screaming “oh crap” and the large institutional and foreign SWF”s stuck with dollars are piling into the short end of the curve:

Lastly, the 30 year yield chart, this time on a daily time line indicates we are within striking distance of the higher yields which means demand for our long dated toilet paper is coming to an end. A break above 5% and I would expect a fast, furious and damaging move to above 7.2 to 7.6% within a year:

Once we cross that “Line of Death” I have drawn on this chart be very, very scared as to what is next. This means the low volume we have seen the past five months in the equity markets is not a fluke. It means the very tentative rally in the U.S. Dollar might just be a technical bounce and nothing more. It means that if the foreigners continue to threaten default, especially in Eastern Europe and the weak sisters of the EU, the Dollar will continue to have support but the long end of the U.S. bond market will have reduced bids as those nations  will sell their U.S. holdings to attempt to raise capital and cash for the home front, not wishing to gamble at Casino Federales Reserve any longer.

Buckle up, everything is point to a wild ride in the first four months of 2010. And the data does not look good for the “Obama Miracle” which he wanted to tout going into next year’s election season.

Thank You to all of My Fans

By John Galt

December 9, 2009

Gang, I want to thank all of you for your support. This month I was published in an online magazine titled “DGC Mazaine” which reflects a fantastic move into digital currencies and gold (good reading for geeks like me) and also a Canadian Magazine that is putting original posting from ‘The Day the Dollar Died’ series into print. I volunteered these articles with no profit or intent to make money from those publications to spread the word about the amount of trouble our currency and society just happen to be in at this moment.

Thanks again to everyone for your support and I shall continue to try to do better with my writings, timeliness and information as my time permits.

-John

Death of the Gold Bull? Nah, He's Hiding with Tiger

by John Galt

December 8, 2009

Remember this thread:

Be Leery of this Parabolic Move in Gold

Yeah, that one. I got a lot of grief email on it but let’s be honest, the charts don’t always lie and history says that their is a concerted interest of the central banks of the world to suppress the price of gold for many reasons, most important of which is to price it at a point so low that it is not worth one of the emerging nations to buy it and convert their currency to some sort of gold or commodity standard even on a partial basis. Unfortunately for the old fogeys (BoE, JCB, Fed, ECB, etc.) the world no longer views gold in the same manner that it was in the post World War II Bretton Woods period. The interesting thing about this move down in gold is that for the old timers, we’ve seen this movie before and without ruining the ending, let’s review the first chart one more time:

That’s the same chart from the original article and guess what? Nothing has changed. The support area is the same. The move the same. The lies from the media the same. The “gold is dead you had better buy all those stocks the insiders are selling” from CNBC is the same. The Bubbleconomists all proclaiming that the U.S. Economy is recovering is the same. Now that we have established all of that, let’s go find out why the gold bull went into hiding with Tiger Woods over in the Orlando Area and hope that his help has a nice silver shovel to scrape up the bull’s er, uh, mess. Or Tiger’s mess. Whichever smells worse and is bigger.

First, let’s clear the air about the historical comparisons. I do not think we are in the blow-off phases of 79-82. In fact, here is what many of the “experts” on the Bubblenetworks are trying to proclaim:

I heartily disagree. In fact I had to blow the chart up, shrink it down and show you, my fellow cohorts who prefer real money and honest (snicker) banksters to run their nation. Here is what I think and why it is important:

Exactly. I think we are at the down leg of the first 1973 post-Nixonian blunder decision to inflate and then wonder why price controls did not work. I honestly believe that the markets are going to fluctuate not for years, but maybe a month or two but hold the higher support levels around 1020-1080. The one month chart reflects the first fill of the gaps appears to be underway in conjunction with the U.S. dollar rally:

The GLD ETF is a good proxy for the current move and gives you some perspective as to what the big money is thinking and right now that “big money” happens to wear swimming pool towels from foreclosed hotels and ride camels praying to the east for the ChiComs to bail their butts out and buy their little kindom in Dubai. As this liquidation of their over valued properties continues they are desperate to raise cash and the long term prospects for that Emirate are not good. Thus you will see even more dollar and gold related action as they sell anything that is not nailed down.

(Pssst, buddy, want to buy one of my 19 wives? Maybe I’ll give you a 3 for 1 deal?)

Since some have asked me, silver is in a similar situation and I think we will test support by filling the gap in on the SLV and hold at about the same time the second or third gap on GLD fills.

Once this fills you may don your spacesuit, your g-suit (That’s suit, not spot Tiger) and get ready for a liftoff that should send silver up into the $40-$80 range in very short order. With just my back of the napkin calculations, if and when (more like when) gold pierces $1800 silver should be trading in excess of $80 easily as it plays catch up after all these years and foreign central banks move in on the market demanding physical delivery causing “issues” for some of our favorite institutions. Oh, and one hell of a short squeeze, which makes one wonder if Tiger dated any porno star midgets also…hmmmm.

Finally, let’s look at the big picture one more time for some perspective:

The chart says it all and instead of years to achieve the next and probably final parabolic move before we dump our dollar or change the exchange rate policies to accommodate a new reserve currency, this could happen in less than 24 months easily the way this group of clowns are managing our banking system and economy.

If you think the “big money” has any faith in the economy, here is your 2 year weekly chart of the 3 month T-Bill yield:

Thus why I think the January to March 2010 window of doom could well be opened. The markets could be clubbed like a PGA golfer who pissed off his Swedish wife who is apparently experienced using long irons and whacking someone allegedly with a three iron. If you don’t believe me, look at today’s 28 day (1 Month) T-Bill auction results and the yield from it today which had HUGE demand with a Bid-To-Cover of 5.33:

I’m with the gold bull. Tiger, do you have room for one more in that now big empty mansion? I won’t drink all your beer nor beg to read all your old text messages. I just want a place to hide out until this storm passes over.

Security for Liberty for All (The Day The Dollar Died Part VII)

by John Galt

December 7, 2009

First a brief commentary. I want to personally thank everyone who has forwarded, copied, reposted, and promoted this web site and the series as it exists today. I was not attempting to present a “professionally written” speculative series novel online (also called a ‘blovel’ I have learned) but rather a series of stories that tied the reality of what could happen to the average person.  While many people view this as a potentially good novel to proceed with, I’ll take a pause on this matter and simply remind people of why I wrote this:

To make you and I  think about the future.

What mistakes will the powers in charge make? How does this reality set in on the average household? Will America survive? What will the world do to us in retaliation? What do I need to do to get my house in order and survive the insanity?

Those questions and I am sure thousands of others come to mind. I know that it seems somewhat insane to consider this story as a potential reality but in my book, all stories have some merit, except maybe those with the Mad Max twist and shout angles that I do not believe will occur in the short to intermediate term and are only possible should there be an all out war in the world we live in. Instead,  I fear we will live in the world of a bifurcated dollar where the rest of the world decouples from the United States in an effort to survive the collapse of the empire we have created. Pax Americana could indeed lead to a resurgence in or ascendancy within the nations of Asia, led by China and crossing the Steppes, much like the Mongolian hordes did a millennium ago. Thus I continue this series and shall start one new chapter every Wednesday so I can continue focusing on every event and finishing another work at the same time.

I hope you enjoy this blovel and continue to provide feedback as you see fit. There is no right or wrong, only opinion as everything from this point forward is FICTION…..

February 24, 2010 10:55 A.M. Eastern Time

Lillian was sipping coffee by the cash register when Sandy ran back inside and yelled “Mama, I need your help with the State Patrol.” Lillian carefully placed the cup down and complemented the cashier on her courtesy and understanding, realizing that this could well be the last cup of coffee she got from her favorite restaurant for a long time to come. As she approached her somewhat bedraggled daughter the trooper was getting his report book out and starting to interview his daughter. The trooper started to speak in that South Georgia drawl to Sandy, “Ma’am, I hate to say this, but you really shouldn’t be this far from home ’cause their aren’t any gas stations open with fifty miles of here and I’m not sure if I can help you.” Sandy looked somewhat distraught at her mother who asked the most basic question that anyone could have and should have asked of the officer; “Sir, do you happen to have any spare gas that I can purchase from you?” Sandy looked relieved until the officer snapped at both them in a very firm voice “We can’t spare a drop at this point in time. There is too much going on and I have spent enough time on a case that will never be processed. We are only working major felonies, monetary crimes and area enforcement cases at this time.” Lillian had heard this before as her mother had to deal with the rations manager in the small town of Adel during the big war. Lillian  batted her eyes in that adoring grandmother pose and looked into the trooper’s eyes as she said “Sonny, I’ll give you all my money, forty bucks, if you can just spare five gallons so she can get home. I promise that she’ll drop me off west of town and then head on to her house.”

The trooper, exhausted after twenty hours of solid duty, nodded, popped open his trunk and handed Sandy a full five gallon can from one of the six he had in his trunk and then looked over at the smiling little old lady and said “Ma’am, you can keep your money. It’s not worth a thing anyways. Y’all need to get home, lock the doors and hunker down for a few days until this thing sorts out. Hopefully they’ll get the grocery stores and banks open in a few days.”  Sandy snapped right back in a submissive voice, “Sir I promise you, we’ll go to her house, pick up some supplies and lock up at my house. I promise!” The trooper nodded and Lillian smiled and handed him a small gold ring on her pinky and whispered into his ear “Sonny, God Bless you. I have had a full life and now I have my daughter for whatever is next because of you. Take this as a token of thanks, it isn’t much but we’re all going to need real money for what is next.” The officer smiled, kissed her on the cheek and ducked into his car to hear the radio call “10-34 in progress, all units near Pitts Shell off Highway 54 in Peachtree City respond immediately. Officer is down on scene and requesting assistance.” He confirmed the call, slammed the door and peeled out of the parking lot lights and siren blazing away. Sandy was finishing up pouring the gas into her car and looked up at her Mama and tearfully said “I wish I was as strong as you Mama!” Lillian could tell her daughter was upset by today’s events and looked back at her with a reassuring smile with the words only a mother could say, “You’ll be stronger than ever after this honey, that’s a promise.”

February 24, 2010 12:00 P.M. Central Time

Mike’s phone rang as if almost on schedule, except instead of his dispatcher being on the company phone, it was the Federal Department of Transportation. The voice on the other end was quite blunt “Unit 1204, Mike Elmendorff, is this you on the  line?” Mike hesitated and replied, “Yes, it is me, can you please identify yourself?” The female voice blurted out “This is Sandra Tillens with FDOT calling all truckers currently with foodstuffs on their trailers under dispatch in the Minnesota district. According to the information submitted by your company on Pro number 47762IBP1011 you have approximately 15,000 lbs. of boxed frozen pork destined for Duluth Meat Supply in Duluth, MN.” The hesitation in Mike’s voice turned into concern when he told her “Your information is correct. How can I help you?” Ms. Tillens replied sternly “You are hereby instructed to deliver this order to Superior Cold Storage at 1123 Mullins Avenue in St. Cloud, Minnesota at 0400 in the morning. We will send an escort from the State Police to insure you arrive safely.” Mike’s blood pressure hit a boiling point by now as he was not in any mood to be dictated to after all that has happened in the last seventy-two hours. “And Missy, when do I get paid for hauling this load and will I get my fuel reimbursement my jack ass dispatcher said I would get when I spent my own money to keep this unit running for the last two days?” She was not going to take any huff from the old driver “Sir, you are under orders as this load has been transferred to FEMA for redistribution. You can fulfill this delivery and contact your company on Monday about settlements which will be processed by the state of Minnesota or we can send a unit with the proper escort to take the trailer from you and deliver it back to you when we are finished unloading it or a time of our choosing.”

Mike knew he was licked, “Ma’am, I will be there at 0400. For your sake, I hope my wife is safe while I am gone.” The lady hung up at that point and Mike called grabbed his personal cell phone to try to get in touch with Deputy Monckton. “Jack, I need a huge favor” Mike asked when he picked up the phone. “Mike, I’m in no position to do anything. We’ve been issued full body armor and I have roadblock duty with a National Guard unit out at 210 and 75 north of Breckenridge. I can’t do a thing to help you old friend” Jack replied. “Damnit man, my wife is going to be all alone tomorrow and I fear that those nuts we heard on the interstate are still around!” Mike said somewhat exasperated. Jack paused and said “Mike, I wouldn’t sweat it. You’re going to have an escort and anyone caught out after dark without proper authorization is shot on sight. This is the old days new again old buddy, just like the crap sandwiches we ate in ’70 in the jungle. I’ve got to go, we’re mounting up now to get into position before dark. I’ll call you on Friday or Saturday when we’re relieved.” Mike said his goodbyes and walked into the other room where his wife was sitting looking at him with that glare that only a woman you’ve known for years could give. She started speaking before Mike said a word as he started to open his mouth and told him “Just leave me a pistol and a shotgun. And you had best identify yourself mister when you knock at the door or I’ll blow your butt away.” Mike smiled, walked over and hugged his wife and whispered in her ear “I love you baby. I’ll leave you the 357 and I’ll take the peashooter. You’re the greatest.”

February 24, 2010 3:00 P.M. ET

“This is the Voice Of America Domestic News Service, welcome to the afternoon update from Washington, D.C.” the voice boomed over the television. I turned the volume up because some information was better than none at all and I needed to find out anything about what was happening in the world beyond the canned garbage coming out of the radio. At the conclusion of the five minute update, of all things, CNBC returned to “normal” programming except that instead of the afternoon market update, it was a bizarre studio setting with a very exhausted looking Federal Reserve Chairman about to be interviewed by Maria Bartiromo. For this, I had to stay tuned in and called my wife into the room to watch the show as this could set the course for years for this nation.

Maria Bartiromo: “Good afternoon Chairman Bernanke and welcome to the Voice of America’s Business Report. ”

Stunned, I immediately did what about half the nation did and hit the “INFO” button on my remote control to insure that yes, I was on Channel 39 and the Comcast ID did say “CNBC” so I guess the insanity I was witnessing was not about to end.

Chairman Bernanke: “Thank you Maria, I hope to enlighten everyone about the great success we have accomplished in Geneva.”

Bartiromo: “With the financial markets shut down worldwide and the banking system paralyzed in this country, what actions were agreed to in Geneva to restore the system?”

Bernanke: “The meetings we held were basically an acceleration of the prior agreements signed off on at the last G20 and G8 meetings. The first priority will be to open the Asian and European financial markets since the nations in those blocs have established an accelerated schedule to use the new Universal Currency Unit for international trade and to discontinue the current single nation reserve currency system.  In the interim, the United States will operate under the emergency declaration issued by the Federal Reserve banks and the President of the United States for the next ninety days.”

Bartiromo: “With the emergency declaration set to expire in a few months, does this mean our equity and bond markets will not reopen any time soon or will they have to wait for other actions to be completed before we restart the system?”

Bernanke: “The actual process is not that complicated. The devaluation agreements have been completed and now we are in the process of assigning new valuations to all equity and bond holdings traded openly on the markets plus issuing new domestic debt bonds to substitute for Treasury issues held by domestic institutions and individuals.  After the new issues and exchange process is completed for Federal, State and municipal securities, the markets will reopen after the pricing configuration for non-Government issues and forced defaults are assigned within the new system. The pricing process has been assigned to committee within the Federal Reserve system at the New York branch and should be completed by March 8th. The financial markets are projected to open under the new six hour trading rules on that date at 9 a.m. Eastern time barring something unforeseen.”

Bartiromo: “Why six hours and not the traditional hours as set by the exchanges?”

Bernanke: “Per the new international regulatory authority, IFROB or the International Financial Regulatory Oversight Board, which reports to the International Monetary Fund and the United Nations, we must comply with all transaction authority until the Federal Reserve system is one hundred percent compliant and merged with the new World Reserve Bank established in Geneva as per the G20 Washington Accords of 2008. The stability from using international regulations  over domestic oversight, which has failed and created the situation we find ourselves in today,  shall enhance the power of the reserve bank branches via internationalization yet prevent the gaming of the system and creation of untested financial instruments that destabilize world markets.”

Bartiromo: “Mr. Chairman you hinted in previous statements from Geneva that despite the domestic issues which are vexing the systemic restart, there would be a major impact felt by individual investors and the average citizen, changes which would revolutionize our economy and create a true free market with controls to insure stability. Could you please expand on those statements?”

Bernanke: “Certainly Maria. The accords which have been working on are designed to prevent a default by the United States and to stabilize the currency exchange process via a non-singularity which was the weakness originally designed in the post war Bretton Woods agreement. The approach of a unified currency system and allowing individual nations to opt out and continue financial transactions or economic activities in their own domestic monetary units will allow for a slower compliance period for debtor nations needing to fulfill obligations and balance their national books before accepting the new international system. The United States is the largest debtor thus the compliance period for our country will be ten years, of which the President has signed off on the austerity accords which the Reserve banks concurred with and allows the United States to return to a stable economic participant in the world by 2021.”

Bartiromo: “What does this mean for Main Street?”

Bernanke: “Ultimately it will return us to an era of prosperity we have not enjoyed for almost fifty years ago. It provides a budgetary discipline which allows the country to provide economic security for the citizens and to preserve the important liberties for all.  Soon enough,  as the price stability quotas are implemented, things will start to calm down and the business of America will return to being focused on the economic growth engine of the world.”

Bartiromo: “Are there new regulations for equity and financial markets that will be issued? There are many viewers concerned about their 401K’s and IRA’s who are watching this afternoon.”

Bernanke: “Yes Maria, and fortunately for all participants in retirement programs or investment vehicles like that, the United States Government with the approval of the IMF has agreed to insure and guarantee the market values of all of these instruments as of the close of business on Friday, February 22. The price and valuations are locked in place and can be converted to the new DTI’s or Domestic Treasury Issues on March 8th or submitted to the Social Security Administration for the new Civilian Retirement Fund Management Program which opens for subscriptions on March 2, 2010. Either solution should re-assure the average investor that their life savings will not be lost during this turbulent transition period.”

Bartiromo: “Thank you Mr. Chairman for your time this afternoon and back to the new VOA studios for a panel discussion on today’s revelations.”

I was stunned silent again when my wife nudged me and said “I guess this means we will never really see our retirement funds, will we?” I nodded my head with a very saddened negative connotation and asked her one important question which was bothering me since this began, “Will you still love me if I dig ditches or become a bureaucrat?” She hugged me tight and kissed me with a whispering “yes” in my ear. The untenable situation had hit home and hopefully tomorrow the mailman will bring us information about what happened to the tens of thousands of dollars we had been saving for our future or at least give us a hint as to what the future may bring.  I knew one thing though, I had to find some sort of communications outlet beyond the new government controlled media or I would go insane. With that in mind, I told my wife “Honey, I’m going for a walk at five. Why don’t you stay home and guard the house with our neighbors. I have to go a few blocks over and see if old man Lewis still has his amateur radio gear all hooked up and see what the news is not telling us.”

Little did I know what you don’t know might hurt you far worse than the truth.

Security for Liberty for All (The Day The Dollar Died Part VII) by John Galt is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.
Based on a work at johngaltfla.com.
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November 09 Unemployment Report – My Monthly Perspective

by John Galt

December 6, 2009

The celebrations, fireworks and head fake by the markets on Friday illustrate the celebrations of our usual monthly data dump from the BLS but those numbers, insane as they appear to be from the ground, created the “hope and change” long promised by the current administration when in reality it has nothing to do with government policy but more so the impact of a cyclical recession running out of gas as some businesses attempt to profit during this seasonal peak. You heard the blubbering from the “you better buy stocks now” economists who’s agenda is set not by independent analysis but by the direction their firms demand so they can move the dead fish off their decks and into your accounts. One of my favorite and oft repeated themes was the “increase in temporary hiring the last three months” which was heard over and over and over again but never put into context by these clowns as they only study statistical rather than fundamental reasons for the rebound in this area. There are two considerations when you hear this and number one is obvious: It’s Christmas you idiots, of course temporary help is hired.

Then of course there is the harsh reality some of us witness at ground level the Bubbleconomists deny and do not even attempt to understand what Middle and Lower class Americans are enduring right now. People are desperate. People are freaking out. The moral dilemmas facing the average American oft ignored by these Ivory tower elitists and their huckster friends on the networks are ignored and not considered within the greater scheme of things. There is a harsh reality setting into the mindset of Americans nationwide and that is the fact that things are only getting better for those within 100 miles of D.C. or tied to certain groups now entitled to permanent government benefits and employment preferences.  The other reality with regards to the large “hurrah” about the temp numbers is a failure to understand that many companies, primarily in the small and mid-size business categories (Less than 300 employees; just an estimate on my part) have and are continuing to reduce pay anywhere from 10-30% per week and/or reduce hours which believe it or not is reflected in the average hours statistics but nor discussed as an important issue by the Bubbleconomists.

First, let us look at continuing claims (Not Seasonally Adjusted) and get some idea of the severity of the downturn we are still engaged in.

I guess one could call this “good” news as the Bubblevisionistas would call it as we are now back to the 1976 and 1981 recession levels. Of course the fact that our population was considerably smaller at those points in time escape the pumperdumpers so we’ll call this news “better” but in reality the people losing their benefits are in for the seriously hard times that their grandparents who endured the Great Depression of the 1930’s had to deal with except this time the concepts of “forced bankruptcy” and the fact that the “new” bankruptcy laws do happen to favor the very banksters their taxpayer dollars were used to support and ensure that their losses were socialized. Despite the rah-rah of our President and the talking heads on television, there is an underclass of our citizens now entering and becoming the main stream with a very bitter attitude towards the very institutions they once idolized a decade ago.

While that number looks like an improvement, take it in context of the level it is at over the number of years, then look at this chart from CLUSTERSTOCK.com and their Chart-of-the-Day from Friday December 4th:

That’s right boys and girls. As more and more qualified citizens (key word there) drop out of the work force and as more and more citizens (once again, a key word there) who are qualified to work but elect to accept the welfare bonanza or are forced out of their profession due to other circumstances (Translation: Construction, illegals, 1+1, etc…) this number has exploded to a saddening and maddening point of no return since the manufacturing base has been eviscerated.  If you do not believe me, here are some more graphs to reflect the Civilian Participation rate. The first chart is a 20 year figure to demonstrate the dive:

That percentage might look horrid but when you see the raw numbers, not seasonally adjusted from the BLS, those percentages start to make sense:

Basically in this “Lost Decade” we have been pretty much flat at the end of the period and no real increase in the number of civilians participating despite normal population growth. To get some idea of just how drastic this change is, you have to refer to a 25 year chart to understand the drop in the percentage of participants:

From this graph, without putting my usual assortments of comments and lines, rocket science is not a requirement to deduce that the percentage of participants in the work force has zoomed all the way back up to 1987 levels. How’s that Hopey-Changey thing working out again?

But I digress.

While the Average Hourly earnings are up as inflation when properly interpreted reflects:

the BLS charts also reflect that the Average Hours worked remains mired in a better than decade long low and no massive improvements are in sight once the Christmas retail season ends:

Both of those graphs are not seasonally adjusted so the drops and distortions you see are what is happening in reality, not in the world of statistics. Thus one can conclude that fewer people are working fewer hours but being paid more per hour to do it. Until you start breaking down the industries impacted. Unfortunately when one goes to a long term historical charts, this is not your Mom and Dad’s America any longer:

I guess if we are happy to see a 30% drop in the average hours worked in a 45 year period, we should all be Happy-Happy Joy-Joy and shut our mouths and be glad that with 20-30% less pay than we had before, we get 30% fewer hours than before to go with but we’re still “full time” employees according to the BLS and Political types. Gang, this is the reality and I don’t care how the clowns on CNBC, FBN or Bloomberg spin it, small business in America is dying or being murdered by a bunch of regulatory hyper enforcing bunch of buffoons, just as it was warned to be in the book Atlas Shrugs.

Nondurable Manufacturing is still at Pre-World War II levels:

Construction jobs? Yeah, right, don’t believe the NAR/BLS/Obamabs hype:

I had to use a 20 year chart for perspective and as you can see, we are now at levels well beyond the boom years and back towards the numbers from the late 1990’s. Hardly a ringing endorsement that we are going to see this “massive” recovery any time soon. Without construction, especially new home and commercial construction, this economy is not recovering any time soon.

Even the proponents and participants in Bubblevisionland are impacted by this as since the only financing that appears to be happening is that which the U.S. Government buys or guarantees and the Financial Service industry is back to pre-Dot.com crash levels:

For those that long for the “Happy Days” of Fonzi and cool American made cars, well, the “Goods Producing” category tells the tale:

“I like Ike” is all that chart screams.

If you think Ike was popular back in the day, well, Truman was to a point until he started to try to shove more idiocy down the throats of American business. And come to think of the parallels with this administration and the Bushies, this chart should make you reflect as here is a 50 year chart to reflect the level of Durable Goods Manufacturing  employment, something we have not seen since Truman was running the circus in D.C.:

And one more time, manufacturing will lead us out of the recession via exports making what again? 49 Chevies?

That’s right, modern technology will lead us out of this recession?

Of course  I meant it would lead India out of their slump, not the United States. When you see that chart you realize just how severe this problem is as the areas with increases in employment are sadly the “service” industries, medical/education (mostly Government related), and of course Government at every level:

While this might give one pause to wonder just how our deficit laden government can hire anyone else, keep in mind that the Census employees will be hired and immediately distort the January through May statistics to reflect a huge spike in employment even though it is temporary. IF anyone with more than one brain cell turns off the Bubbleconomists like Steve LIESman and starts to reflect on the real data, PRIVATE business and corporations are not indicating any massive hiring spree for permanent jobs and the hours are not recovering at a pace consistent with any recovery in the past 30 years. We will see nothing more than the proverbial “jobless” recovery in the next five to six months and that should be alarming to anyone considering our economy recovered, recovering or getting healthier any time soon. The only thing recovering right now are those involved in the upholstery business and that’s about it.

As usual, I have my own monthly charts and since my favorite charts are the reality vs. the perception, let’s start with Table A-12, Section U-6 chart which I like to call the “real” unemployment rate (Although Shadowstasts.com does a better job of incorporating the unemployed contractors trying to find work):

Despite the seasonal adjustments, still an ugly chart. When compared with the Non-Seasonally adjusted chart it is not providing much hope:

Thus my prognostication for the future is to not “get your hopes up” for any sustained recovery for the private sector.

The Birth/Death Harry Potter calculations are also out and what do we see? A normal seasonal minimum but still quite some fiction being estimated in those numbers:

The most amazing thing to me in the entire report is that some way, some how, Obama forgot to have his staff add construction jobs!

Maybe they just copied last years report to save time. When you see the differential when you subtract the fiction of Birth/Death from the totals, you see we still are losing jobs, we still are not adding jobs and thus validating the Private Sector theory of “we’re too terrified of what is next to hire anyone” theory of of our current economic situation:

The revision circus continues building up optimism that all is well and the 10% who are unemployed should quit their bitching. Of course you know I feel otherwise but explaining to a politician that numbers and statistics are often manipulated to make them look and feel good is hard to get through their skulls unless it is attached to a check with six figures on it.

Well, there appears to be some consistency that those who don’t count, won’t be counted and the lack of participation doesn’t mean squat to those in charge. Lastly the differential in the revisions continues building up momentum for the big January reset when the BLS does its annual “oops my bad” on their piece of monthly fiction and resets their calculations:

Thank goodness the Obama team had training from the Bush and Clinton teams on how to move the numbers. The reality we are witnessing gang is that despite the feel good crappola being spoon fed to the masses to get them shopping, the pain we have felt is not over. Banks are not lending, businesses are still failing, and lastly the housing situation is about to become somewhat more severe along with the commercial real estate situation. Get ready for a wild 2010 gang and perhaps, just perhaps, if we get lucky we will not kill our dollar along the way.

I doubt it though.

A Musical Tribute, The Elves of the Great Depression of 2009

By John Galt

December 4, 2009

First and foremost, blame Bill O’Reilly as he pointed me out to the ElfYourself.com website and thus, it was born. So I thought, hmmm, who are the five little evil bastards most responsible for the onset of the next Great Depression we have really been enjoying this year.  It isn’t really fair to blame Jim Cramer but I had to choose him because he represents all the hucksters on the various Bubblevisons plus he just annoys the dog crap out of me. Turbo Timmy because he represents the years of incompetent political appointees working in government who never held a real job their entire lives. Ben Bernanke as if any explanation is needed. And of course Presidents Tweedle-Dee (Obama) and Tweedle-Dumb(Bush) who have managed to take a nice, ordinary run of the mill financial crisis and turn it into a flaming, smoking hulk which eventually turns the U.S.A. into one giant crater for the Chinese to stop by and pee in like an old urinal as they tour the ruins of our civilization.

Thanks to all of you for all this and in return, dance you little jerks who have made this year one for the history books…….