Increasers and Decreasers

By John Galt

November 25, 2007

So “decreasers” isn’t a word, so what? I took the liberty of using what I have elected to call the “Quayle Rule” in honor of my friend Steve Quayle who has a talented knack for creating just the right word for just the right occasion. And this occasion is what you might be asking yourself? If you’ve been paying attention to your wallet, your life and your job the last year or so, you’ll realize that there are aspects of our society and economy that are increasing in value and influence and decreasing. Thus with the Thanksgiving holidays now over and the start of the “what lies can we concoct to get folks to buy stock for Christmas presents” season, I present to you my projections for those things, people and problems which will impact our nation either way.

Increaser:

Gold. Silver. Platinum. Palladium. Petroleum. Agricultural products. Jim Rogers was on to something in 2006 when he warned that food prices were about to skyrocket and that inflation in necessities was going to impact our society. Well add that and the sudden demand for everything that has an intrinsic value or use and the apparent war preparations well under way in Russia and China, and you have no reason to doubt that everything in this list is going to continue to rocket skywards in value. My not so off the wall take: Gold will top $1000 per ounce earlier in 2008 than most have projected.

Decreaser:

The U.S. dollar. There is nothing I can see that will add value, desire or usefulness to this debt laden instrument of digital destruction. The US Dollar should continue to decrease in value as we export our inflationary practices around the world unless everyone else goes stupid and desires to follow our own suicidal tendencies and implode their own currencies also.

Increaser:

Baskets. No, not wicker or wire, but currency baskets. It seems that we are about to have a nexus, or paradigm shift in the last gasp effort to preserve the concept of fiat currencies and those nations with the resources be they oil or mineral are going to follow the lead of the Russians and Arabs on this issue. Once those nations shift to currency baskets with the Euro being the lead currency or combined baskets where fiat currencies and natural resources are used to value their own denominations, smaller resource rich nations will follow suit.

Decreaser:

Fiat currencies pegged to the dollar. There are many nations that have elected to peg their currencies to the dollar. Once the basket concept catches on, those nations will have to do the same thing or watch their holdings crash and burn. If the Arab states elect to go to a currency basket for their nations, look for them to tip off the Chinese first so they can initiate the move and protect what’s left of their dollar assets. It will be followed by Russia and the Gulf Cooperation Council (GCC) in short order. The House of Saud will act last so it will appear they are not initiating a currency attack on the United States and our still our “buddies” in the region.

Increaser:

The rising tide of Islamism and Socialism in Latin America. Despite the dismissal of the influences of Chavez and Ortega to our south, the importation of hundreds of millions of dollars in missionary aid and armament into the Central and South America by the Islamists, and the back door support of the Marxist movements by China via North Korea and Cuba is going to have an increasing detrimental effect on our influence in the region. This will result not only in new economic blocs which attempt to shield this region from our own implosion but military alliances which any sane administration would have been working to head off years ago.

Decreaser:

American hegemony. Our inability to finish the job in Iraq thus far may seem like some sort of anti-war statement by the author, but no, it’s true. We could have and should have competed this effort in 2005, but the lack of foresight by the politicians and their desire to deploy the 1st Battalion of the All-American Bureaucratic Brigade to mismanage and fight this war instead of letting our soldiers do what they do best has turned it into a conflagration of the largest proportions. Add in the fact that we have lost territory in Afghanistan over the last year, refused to aid the Iranian people in their desires to overthrow the oppressive regime there, ignored the coming hurricane in Kosovo, and presumed the Somalian situation was now “stable” and you have the makings of international firestorms which will spread over 2008.

Increaser:

Food shortages. The first nations, sadly and as usual, to feel the impact of not just the wasteful American ethanol craze will of course be those third world countries in Africa which are so sensitive to any event when their supplies break down. Add in the communist run governments of Rhodesia (sorry, I still refuse to call it “Zimbabwe”) and South Africa who are in the process of putting the final nails in the coffin of their free market farming systems and Africa will be first in the list of nations to notice failures in the food supply chain. The United States will be next as the situation has been marginal at best this past year with our grain supply teetering just above and below the 50 day mark. In 2008, unless there is a miracle, I look for the grain supply situation to deteriorate below the 50 day mark and hover in the low 40’s for most of the year. That situation had best increase your awareness of how tenuous our food supply really is.

Decreaser:

Ethanol usage. Without realistic free market incentives there is no reason for the American public to rush to the exits from the petroleum hog and into ethanol or E85 vehicles. The political mindset is just not there to provide realistic incentives and the coming food crisis will cause a marked shift in the planting patterns of the mega-corporate farms prompting ethanol grain production to decrease in 2008. Add in the factor that we do not have a pipeline system for delivery nationwide, the inconsistency of state to state incentives and regulation and you have your self-inflicted stupidity wound right there for display for all. Too bad we didn’t listen to Brazil’s example some twenty plus years ago.

Increaser:

The shift of America to the left. The sad thing about our society since FDR is the marked shift in responsibility for just about everything our people used to take care of for themselves. This nanny state so many of us mock and despise is a reality with some 55% plus of all Americans accepting and using some sort of government aid program or accepting taxpayer extorted funds. Thus as the problems in the housing sector, jobs sector and food affordability start to hit Joe Six Pack, I foresee the voters looking not for the most qualified candidate, but for the first one to don the red Santa suit and promise Christmas (that’s “Winter Festival” for all you commies out there) to all the citizens year round.

Decreaser:

The American quality of life. While the debtors continue going deeper into debt, the politicians continue to cover up, and Wall Street continues to paint the tapes to preserve their bonuses, the overall quality of American life will start to deteriorate in 2008. This will lead to the increaser I listed above. After all, if little Johnny or Susie can’t get a Sony Playstation Nineteen (or whatever they are up to), the government should subsidize it or ban it for everyone else. Add in the fact that almost everything we get is from China and we won’t be able to afford it soon as real inflation takes hold, and whoa Nellie, this society in it’s infinite wisdom will forget what 1979 and 1980 were like. We’ll inflate to try to preserve a dying system and way of life instead of taking our lumps and cleaning the system out. As a result, the quality of American life will begin it’s dive at an accelerated pace with many of the non-necessities finally becoming unaffordable and unattainable. Then as the necessities in life start to get expensive and in short supply, you have the makings of a swan dive from the top platform which will end up as a belly flop. Besides, who needs a pink fur lined digital cuckoo clock anyways?

I could probably rant on and on about this, but the reality about to slap us in the face is not pretty. Houses of cards always seem to have this nasty habit of falling at the most inopportune times in history. And this winter, I feel an ill wind a blowing……..

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