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.

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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.
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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.

CCNSAcontclaims

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:

CLUSTERSTOCKcotd12_4

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:

CIVPART20years

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

participationNSA11_09

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:

CIVPART25years

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:

AVGHOURLYEARNINGSnsa

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:

AVGHOURSallpvtNSA

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:

AWHNONAG_Max_630_378

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:NDMANEMP_Max_630_378

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

USCONS20YR

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:

USFIRE10yr

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

USGOOD50yr“I like Ike” is all that chart screams.

ILIKEike-pin

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.:

DMANEMP50yearAnd 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?

USINFO15yr

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:

USGOVT_Max_630_378

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):

A12U6SAjgflaNOV09

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

A12U6SEASNONjgflaNOV09

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:

BIRTHDEAHADJjgflaNOV09

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!

BDCONSTRUCTIONjgflaNOV09Maybe 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:

BDEXTRACTjgflaNOV09

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.

REVTRACKINGjgflaNOV09

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:

DIFFTRACKjgflaNOV09

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.

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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…….

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Oops! Sorry about that Folks….I'm human, I think…

By John Galt

December 3, 2009

Oops.

Sorry.

My Bad.

I human, at least despite what my wife thinks. I was so thorough in editing the grammatical errors in my last chapter, of which I always make quite a few,  that while doing so, I glossed over my notes and screwed an important part of the story up and I apologize if that fries the train of thought or flow of the blovel. The exchange rates were incorrect in the first part and in other words arse backwards. Sorry about and I shall continue to attempt to do better.

Family_Guy_Stewie_Spank_Me_Red_Shirt

-John

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"Pass Me the Butter and Blueberry Syrup, Please" (The Day the Dollar Died Part VI)

by John Galt

December 2, 2009

The entire story below is FICTION. Before I post Part VII I shall have a summary of the events  with some commentary since the first installment then a brief discussion about the Appendix I am putting together for the first seven parts.

February 24, 2010 9:45 A.M.

Sandy’s mother was no spring chicken but being a true Southern girl from Adel gave her the toughness and experience to ride out many a weird situation. Here she was seventy-nine years old and with a south Georgia name like Lillian, she knew that everyone would always come to “Mama Lil” for wisdom when times got tough or the pie didn’t turn out just right. As she looked up at her forty-five year old daughter, she just shook her head as she sipped the coffee in the IHOP her daughter insisted on taking her to this morning. Lillian glanced up and started on Sandy with “Honey, you didn’t have to come all the way over here. It’s not like it hasn’t snowed in Georgia before and I have plenty of fresh canned meat, fruits and vegetables. I’ll bet you haven’t even got a can of Spam in your house.” Sandy just sighed and replied “Mama, Tom went out after work Monday night and loaded up on all kinds of canned stuff that’s unhealthy and bought some toilet paper then made five bucks per package on it in the parking lot. We’re set for a few weeks and don’t worry about a thing with us. We’re worried about you.”

Lil leaned back as the waitress refilled the coffee then another server placed the first plate in front of Sandy loaded with eggs, bacon, pancakes and that selection of syrups that made the IHOP famous for creating business for dentists for decades before. While Lillian was stirring some sugar into her coffee, her plate full of three eggs over easy, the bacon still sizzling, two links and two pancakes with a bowl of steaming hot grits with butter was set in front of her. The waitress, obviously exhausted said politely “Is there anything else y’all need? This might be our last morning open if the supply truck doesn’t arrive, we’re going to run out of food in about an hour and that will be that.” Lil smiled and said in that drawl, “That’s OK honey, we’ll enjoy it as I’m sure y’all took care of us, I have more than I can ask for, don’t you Sandy?” Sandy looked puzzled and just nodded her head no as she dug into the best meal she had had in past day plus.

“Mama, what did you mean by that?” Sandy asked puzzled as she took a bite of butter and syrup loaded pancakes. “Pass me the butter and blueberry syrup please dear,” her mom replied, “and I’ll explain why you’re going to have to get used to what I grew up with as a baby.” Lillian went into a story Sandy had heard a million times before when she was growing up, but this time she paid attention. “Mama, why did you have to eat turnips every night? Didn’t that get old?” Sandy asked as she interrupted the story. “Honey, we were thrilled to take some fat back and turnips with black pepper on some nights frying them up to add some spice to the meals.  If we were lucky the potatoes would come in and we could have turnip and potato soup or maybe even a chicken once a month. You have to remember all that nonsense that Roosevelt spread in 39 about a recovery did not mean we recovered. Heck it took the draft to get rid of enough labor to open up the job market down there. We would have starved if it weren’t for the war” she replied seeing the concern in her daughter’s eyes.

As they finished breakfast an hour and a bit later, Lillian insisted that she gets the tip and left the waitress a nice new ten dollar bill. “Mama!” Sandy gasped out, “that’s too much!” Her mom glared back and sternly said “Don’t make a scene, she earned it and will probably be without work this afternoon. You need to worry about you and that husband of yours!” As they walked to the front with the receipt, Sandy reached in her wallet and handed the cashier her debit card and the receipt. The assistant manager, a somewhat exhausted fifty something lady from Villa Rica who looked like she’d been working three days solid said politely “Ma’am, we aren’t taking any cards at this time. The sign on the door says cash only.” Sandy looked over at her mom and with a wee bit of panic said “Mama, I don’t…” and before she could finish Lillian cut her off and handed twenty-five dollars in cash to the bedraggled employee and told her to keep the change. “Honey, I told you I was ready for this years ago” as she held her daughter’s hand and they walked out the door.

Sandy walked around to the passenger side of her GMC Sierra and opened the door and helped her mom into the SUV. As her mom was settling in fumbling with the seat controls and seat belts, Sandy walked around to the driver’s side and screamed out “OH MY GOD! HELP SOMEBODY HELP ME!” There was a small section of rubber hose sticking out of her gas tank nozzle, with what appeared to be drops of gasoline evaporating into the bitter winter wind. The adventure of Sandy in Peachtree City was about to begin even though she was less than two hours away from her home.

February 24, 2010 10:00 A.M. Central Time

Deputy Monckton finished the coffee and as he expected after the speeches from the President and Geithner a call came in on his radio. “All units return to base” was all the voice uttered and as everyone replied with a confirmation he waited for a pause to reply after a deep breath. He looked over at his old friend of many years and told him “This is the call we have all been dreading. We were trained for this in 2002 and 2007 but never thought it would really happen.” Mike said in a somewhat softened, uncharacteristic tone of voice “What call is that Jack? Hell, you have me spooked now.” The deputy handed Mike a copy of a memo they received on Monday morning from Washington from the Federal Emergency Management Agency and Department of Homeland Security. Mike scanned it and blurted out as he read it “NATIONALIZED? OUR LOCAL SHERIFF HAS BEEN NATIONALIZED?!? Jack are you freaking kidding me?”

“No Mike, I’m not. They have been waiting for the official call from the governor’s office relieving us of our state duties. Bush set this up as an option after the September 11th attacks but nobody ever thought we would see the orders signed by any President” Monckton said, putting his coat on and looking down at the floor. “Jack, just what will you do? You’re going to have some tough choices if they order you against the citizens of this town” Mike said now somewhat agitated. The deputy put his hat and gloves on and looked into Mike’s eyes, “I’ll do my job old buddy, just like I always have.”

February 24, 2010 11:00 A.M. Eastern Time

AUTOMATIC REDIRECT. PLEASE TRY AGAIN LATER.

THANK YOU THE U.S.I.A.

– 404 UNAVAILABLE –

I was getting somewhat frustrated. The messages were similar, the annoyance complete. First my bank goes offline, then the Wall Street Journal, then the New York Times, then Drudge, then my message boards and now Yahoo and Google so I can’t even check my own email or chat with friends to find out what is going on in the rest of the country.  The only websites that I could access were state and Federal government websites which had not been  updated in twenty-four hours.  Just as I was ready to rip the computer out of the desk and smash it against the wall, the phone rang. And rang. And rang. And it kept ringing. “Damned voice mail must be down too” I thought to myself. Finally after about twenty rings I picked it up and the call that just made my day dandy began:

“Hello to the citizens of this household.”

I had to ignore it for a second and yell out “Honey pick up the phone, the President is calling us.”

“….to contact everyone we can and reassure them during this time of crisis in our nation. Our staff is working day and night to return all systems to normal. No doubt you have heard the speech this morning and perhaps the follow up information from Treasury Secretary Geithner about the functioning of our financial markets in the days ahead. I want to assure that this incident is under investigation as it is possible this attack on our nation’s financial security was an act of terror but in the interim, the collapse of our dollar is a needless rumor spread by the enemies of our great nation to diminish our ability to function in the world community. I shall repair, rebuild and insure that the United States dollar will forever be a currency that we the people can be proud of and have faith as an instrument of commerce. If you wish to receive more information about the new policies and obtain the application for G-GAP or Generalized Government Assistance Program, designed for all citizens you can go to ggap.gov or press 2 at the end of this phone call to leave a recorded message and request a consultation with your regional or neighborhood financial management specialist. Thank you and God Bless you and God Bless America and the citizens of this great planet.”

“BEEP..press 1 to end this call, press 2 to set up a consultation, press 3 for an emergency conference location near you, press 4 to replay the message or hang up to terminate this call.”

I slammed the phone down only to hear an angry swear word and down the hall a somewhat perturbed wife yelling at me “Damnit, I was on that line still when you slammed it!” After an apology and a promise not to do it again, I decided to see if I could get on any foreign news sites on the internet for any information and that was blocked also.  Just as I feared, the overseas websites were blocked including the BBC, Canadian newspapers and the wire services and that meant that the only source of information was our local television and radio plus the government websites. The information clamp down to prevent rampant rumors and speculation had begun and that was why my friend told me to go home and get ready for the announcements.

I went to the website mentioned and what appeared was a poorly constructed website with links to all sorts of government assistance programs and after searching it long and hard the information I wanted “Links to Important U.S. Government Agencies” which I clicked and after some scrolling found the U.S. Treasury website. I figured that they had to post some news about the banks and since I was unemployed now, how to access our accounts.  As the web page slowly loaded up, there was a new display from the one I had remembered in the past. The links were for everything from news to “Updated International Currency Exchange Information as of 02.24.10” and a brand new section on “Investing in the New America.” Just to see what was going on in the world of international currencies, I clicked on the link about currency exchange and to this day I wish that I had not.

My eyes felt like they had bugged out of my skull when I saw the exchange rates:

1 IMF UCU = $8.00 U.S.

1 IMF UCU = $T 1.00*

1 Euro = $5.00 U.S.

1 Pound Sterling = $1.50 U.S.

10 Yen = $1.00

2 Yuan = $1.00 ** Exchange rate expires 03.25.10 future rates yet to be determined**

0.25 Swiss Franc = $1.00

*=$T not available for United States or United Kingdom citizens, for corporate or international trading purposes only with participating nations.

and on and on and on. I was stunned. Our currency had indeed been either reset or collapsed for some reason despite the cheery “we can do it” speeches of the past thirty days and this morning. Then it hit me like my wife clubbing me with a frying pan upside the head; what the heck is an IMF UCU? I clicked on the currency links provided and there it was a “brief” explanation:

“The IMF Universal Currency Unit is a new electronic exchange currency designed to expedite and accommodate all participating nations for intnational trade and settlements. The IMF UCU rates are set by the Joint Council consisting of the World Bank, IMF, and United Nations Bank Central Committee.”

As I sat stunned in my office chair, I clicked back to the main page and the other link was equally important that I reviewed next:

Elimination of United States Coinage and Expiration Dates

$0.01 United States Penny – Phase out date 04.01.2010

$0.05 United States Nickel – Phase out date 04.01.2010

$0.10 United States Dime-Phase out date 04.01.2010

$0.25 United States Quarter-Phase out date 05.01.2010

$0.50 United States Half-Dollar-Phase out date IMMEDIATELY

$1.00 United States Dollar Coinage-Phase out date IMMEDIATELY

Retail outlets were being instructed to accept all coinage but offer no change and instead provide SUSDR (Special United States Depository Receipts) for which customers will be able to deposit in their bank accounts or trade for electronic credits via the new GGAP cards. Holy smokes, I thought to myself, they just increased the price of everything and eliminated everything but paper currency! What was more alarming was that those of us who dealt with some international suppliers now had to figure out the impact of the new Trade Dollar and how we would do business again. Then it hit me hard as I realized my business was burned to the ground this morning and my wife’s job working for the state in the transportation department was still frozen as they said to “standby” for instructions for employees. Everything now had changed and the void of information except for that filtered by the government was creating more panic than reassurance.

February 24, 2010 1:42 P.M. Eastern Time

Suddenly the BOOM, BOOM, BOOM, BOOM of what sounded like gunshots rang out in what sounded like my back yard. Without hesitation I grabbed my shotgun and yelled at my wife to take cover in the bathtub with my pistol and the kittens. She yelled at me “Hell no, who’s going to cover the other windows!” Good point I thought as I crept window to window trying to figure out who or what was shooting at us. BOOM! BOOM! BOOM! BOOM! rang out again echoing through the neighborhood and soon sirens started to blare in the distance. I would hear the noise about every few minutes and figured it was a gang gun fight or a homeowner defending themselves from the scumbags of the world.

As I peered out of the blinds in my side window, I placed my finger over the trigger guard only to see our neighbor’s ten year old kid carrying a piece of plywood and James standing on a ladder with his nail gun firing away blasting nails into the wood to secure the wood over the windows. I walked over to my wife and handed her the shotgun telling her what was going on and talk to him. “James just what the hell are you doing? We are not in hurricane season son!” I yelled at him. He wiped his sleeve on his forehead to get the sweat out of his eyes, sat the nail gun down on the top of the ladder and stepped down. “We’ve already been hit by the hurricane and I’m not going to take any chances. You should do the same thing John so you can sleep at night as I’m hearing stories from the neighborhood of a lot of break ins and armed burglaries in other parts of towns including home invasions and worse” he replied with a very worried look on his face. “James, just how the heck are you going to see who is coming to your house if you have all the windows boarded up and what if you need to get out due to a fire?” I asked innocently enough. “Same way you would deal with it John” he replied motioning over to his shotgun leaning up against the wall.

“Maybe we should start a neighborhood watch and block off the cul-de-sac so we can guard each other’s homes” he suggested. I told him it was not a bad idea and when he was through asked him if I could borrow his nail gun. He was right I realized. The hurricane had hit and this time we had to board the windows up to be safe afterwards, not before the storm. Little did I realize how insane his suggestion was though about a neighborhood watch. The BMW and champagne crowd we lived among were totally clueless as to what was going on in the real world and as long as the sheeple networks continued to broadcast non-news related drivel, they would not take the seriousness of our situation at heart. I now realized what happened when you’re trapped in suburbia and limited with a route to escape or deal with the new reality.

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Be Leery of this Parabolic Move in Gold

by John Galt

December 2, 2009

I am not one to question the reasons behind the move we are seeing in gold but from every logical bone in my body and the history of moves like this, we are in what could be considered a short to intermediate term parabolic blow off which will top and come down hard. I know that the gold bugs will hate me for saying this but this move has all of the indications similar to the head fakes we saw in the late 1970’s before a correction set in then the final parabolic move to all time highs. The problem with this move is that it is unique and could violate all technical reality much like the current U.S. equity markets which are also considerably overdue a move to the downside based on fundamentals and technical reasons.

Here is a chart of the gold futures with the dramatic portion of the action highlighted with the obvious parabolic characteristics and my projected region of support:

Gold12_2parbolicjgfla

I am not saying that we will test the support levels but the lofty moves above the 50 day moving average will eventually come back to earth as the Fed and the world central banks feel that the recent inherent weakness in the U.S. Dollar has gone far enough and artificial moves are attempted to bolster the price and move the U.S. Dollar Index back up over the 78 level. In my opinion that will cause a correction in gold but ultimately fail leading to the big move in gold up over the $1500 price level and hitting Jim Sinclair’s angel above the $1650 area. There are two things that could prevent this technical correction from happening, number one being a war in the Middle East or military action by Israel against Iran and the second would involve an announcement by the Chinese or another major central bank of a major increase in their gold reserve purchase plans which could double the price in very short order.

The GLD ETF, America’s favorite paper phony gold play is also exhibiting similar characteristics, but the gaps in the price moves tells me we have some backing and filling to do that could create a headache for the permabulls and also cause a false sense of optimism for the “gold is a relic” crowd:

GLD6MOjgflaGAPS

If we fill all three gaps, which I think is likely, then the move up from the teset of the lower end will be quite dramatic and remove any doubt that the U.S. Dollar is in its final death throes. I’m not saying what WILL happen gang, but based on the voracity of this move and the dramatic manner and volumes involved, eventually it should burn itself out, retrench and then surge higher from these new higher lows I have outlined and provide a long term healthier bull market in the metal.

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The Recovery Myth on Wall Street

by John Galt

December 1, 2009

So why am I mocking the Bubblevisionistas once again? It’s quite simple when you think about it. The preaching, screaming and praying that we are in an actual recovery continues on the various networks yet reality is telling us that this is a myth. The reality is that the equity markets have been pumped upon liquidity only as the banksters had no desire nor incentive to risk loaning money to Joe SixPack and those evil Ma and Pa stores on Main Street because the government did not tell them they would back those loans with explicit guarantees; instead the idiots like Turbo Timmy just screamed at them to raise capital immediately.  Thus the banksters without the yoke of Glass-Steagall holding them back they went to the great casino on Wall Street doubled down with the taxpayer’s money and have been reaping massive returns and pocketing cash to preserve their precious ratios. Well, you know, I know and they know that when they have to start marking down all of the garbage on their books, the results could become catastrophic as the street and world realizes that “gasp” we were lied to again.

For example, my favorite examples are the very basic, self explanatory and logical MarkIt ABX indices. Here is a good one for you to see which illustrates the “rally” but requires some perspective:

ABXHEAA07_2That’s right, it’s recovered around 1% of approximate 97% it has lost since the high bid of 97. This means that no matter what is said, done or spoken about there still is no bid for RMBS unless the Federal Government or Federal Reserve elects to buy them and that will keep the pipelines pretty much shut down for credit to flow to potential homeowners who want non-conforming (GSE) loans. There is no recovery in residential real estate despite the flowery bullcrap you hear each month from the NAR and their ilk. Starts and permits are telling the tale and we are at levels that we have not seen since the Eisenhower administration.

Lastly, if anyone thinks this stock market is rallying, let’s see what happens if you took all the money ouf off of the sidelines. What am I talking about? A picture is worth several hundred billion dollars worth of words:

3yr6MONTHTREASYLDjgfla

If the new normal is a 0.50% yield or lower, then God help us the minute the “official” CPI-U ticks past 0.5% on a monthly basis. As of now, the 1, 3 and 6 month yields are all negative when you subtract inflation from their current yield levels. People are so scared, translation= large investors and international banks, that they are willing to lose money in short term Treasuries than gamble on the unpredictability of this administration and government plus the instability still inherent in our financial systems.

Until our financial system stabilizes and you see the short term rates tick above the levels that we have seen over the past year, then the recovery is a myth on Wall Street and Main Street and nothing more.

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