the great depression lasted 18 years

We are facing some challenging times that will test what we are made of. I've been preparing for this for quite some time. The media saying that this "recession" is going to last at least through the year are dreaming. This one is going to be 45-90 years, probably more.

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It is going to be a very tough time for Obama. Bailout plans have a history of not working - the U.S. didn't recover because of FDR's new deal, it recovered because of WWII.

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During the last Great Depression, while there are differences to today's situation that makes it impossible to make a side-by-side comparison, the main cause is that the economy went too happy (roaring 20's) based on I.O.U.'s. There was not enough underlying value to justify the consumer spending. Then the party was over, and the world went through a period of "reckoning".

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People then were saying this is the end times too, and that Jesus was coming. He didn't come then, he's probably not coming any time soon, or at least I wouldn't "bank" on it.

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An entire generation lived through soup lines, and in this case there will be two generations fighting for the soup.

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I am very very sorry, I am watching the world economic numbers, and the banking system as it stands, is insolvent. We are all running on IOU's, and the stimulus plans worldwide are printing IOU's like crazy, further propogating the devaluation of currency.

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I haven't been saying much about gold lately, but if you look it is nearly $1,000 an ounce. I know it sounds crazy, but I'm pretty sure as I sit here that it will hit $3,000 and once it gives way, could go to $10,000/oz.

ted haggard on publicity tour

This man was once the top evangelical Christian leader in the United States. He then lost his lofty position after he admitted having a relationship with a male prostitute, who bought him crystal meth.

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He was just on Oprah, talking about his struggles with homosexuality. He insists he's not gay, even as word came out that his church paid a six-figure hush money settlement to keep mum about his inappropriate relationship with that young man too.

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The amazing thing is he was a leading advocate against gay rights, and now he's doing publicity about his fall from grace and claims to be "completely heterosexual".

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Why doesn't he step down from the spotlight and stay down? Why does he do this to his family, and his own dignity?

A Quote From Karl Marx

I read Das Kapital in my 20's, and though the book was partially responsible for a disaster in human history, at the time I read it, (and if you read it) the book is actually convincing in it's simplicity. One would think - this socialism actually could work!

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But open markets have taken over - or have they? Will Marx be right in his prophetic quote?

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"Carl Marx 1867
"Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism. (Das Kapital, 1867)"

mad about leaving in a wheelchair

Natural Harvest - "Semen Based Recipes"

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This needs to be filed in the "it's a big world, and there are a lot of people in it!" file. Ooops I just burped! Smells like chlorine - what's in these oysters?

in london, a hugely successful ad campaign

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I was reading an article in the L.A. Times today about this author who started an ad campaign in the London tube. He asked for donations to spread the word, and wound up getting $135,000 in contributions

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It appears that atheists want to be heard in the U.K.

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I will be in London in a few days, so maybe I will see these billboards. I am all about free speech, and I myself don't think I will be at a point where I don't believe in God. It is too wonderful a feeling having a belief that somewhere in the great unknown that some being loves every cell of me, besides my wife and my dad, and my auntie (those come to mind right away, I'm sure there are others)

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I do know some atheists, and they make far more sense than any other identifiable group I know of. And they should be able to exercise their beliefs like ad campaigns.

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Surprisingly, a poll of college students showed the greatest increase in belief systems are veering toward atheism. The more advanced a society is, the more tolerant it is of beliefs that differ. That's what used to be great about the U.S. and can't help but wonder how this ad campaign would fly in Flatbush, TX.

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"create your own economy"

I think this is a great phrase for these times. I cannot control what Hank Paulson gets away with, but I can try to stay a step ahead. Creating new and flexible ways to earn money and decrease costs is a good idea in an economy with job losses stacking up and consumer spending dropping.

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All of these things going on (and what is coming next) was all fairly easy to see coming in one form or another. Now would be the time to "de-couple" from the economy by putting some thought into "creating your own economy". I admire those that do.

We need China to buy our Treasuries!

524,000 jobs lost last month - biggest drop since 1945

I did not understand the new year's rally at all. The fundamentals of the economy start with housing, which leads to consumer spending. Both are dropping with the radically down holiday retail numbers. And the first thing that happens in New Year's is the market rallies.

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When the DOW went over 9k, I just couldn't understand it. I think the true value is somewhere around 4,000. Whenever I hear people say, "Now is the time to buy stocks" I just cannot understand from what angle this perspective comes from. Job losses, plummeting house prices and decreased consumer spending does not spell a market recovery any time soon. Markets on the bottom stay low and flat for a while - there is no instant jump to higher numbers. Market tops hold briefly, but bottoms stay low for a really long time.

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I would wait for the dow to hit 4,000 before I would think it has hit bottom.

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Job losses are less resilient than housing. It's like the final whiplash of a bad economy, and the crazy part is job losses are increasing. At this rate, the U.S. should hit double-digits in no time. 2008 was the worst job loss year since 1945 (2.6 million jobs) and it is accelerating and that means double digits in no time.

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I can't believe a single person ever voted for George Bush, especially in the 2nd term.

Why Inflation Is Desirable To The U.S. Economy

Whenever there are huge debt loads, inflation kicks in as a helpful aid to lowering debt. It's simple. If the dollar is devaluing, you pay back in new, cheaper dollars.

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So say you owe $15,000 on your credit card right now. If inflation kicks in, say it goes up 20%, then your 15 grand just became a 20% smaller burden on you. You would pay it back with today's devalued dollars.

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Now, say you are a government with a 14 trillion dollar debt ceiling. Inflation at 20% would reduce your load by almost 3,000 billion dollars.

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For a while, I was pretty puzzled why Obama would propose a stimulus plan, and why he would hit the treasury up for more printed dollars to create jobs. It makes sense. Doing so would increase inflation, reduce relative debt loads, and also spur consumer spending and jobs. But undoubtedly at the cost of the strength of the dollar.

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I can see why he does it, and I can see the risk to the uninformed investor. The U.S. could go bankrupt doing this, and all that is needed is for that to happen is if international investors stop buying U.S. Treasuries. But they won't abandon treasuries because if the dollar plummets, their previous debt gets paid back in increasingly worthless dollars.

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So the U.S. economy and the world are in a mexican standoff. $6 trillion in treasuries owned by China. China is buying up Japanese yen (thus the increase in the yen). If China abandons buying U.S. Treasuries, the U.S. could go tits up, and then China loses six trillion.

Gary's daily scripture reading - this one from Deuteronomy 15:1-3

Hamas, Israel and Iran

Today ground Israeli ground forces started marching on the Gaza strip.

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Americans are hearing about it, but nobody really cares. I care.

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The reason I care is because Iran is very very very anti Israel. And George Bush is very very pro Israel and very anti Iran. This is still in the embryonic stages, but I've said in the past that Bush really wants to go after Iran, and he's running out of time.

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With Israel marching into Gaza, this will whip Iran into a frenzy. (click here to see what I mean). With Iran starting to roar, It will get involved on the Hamas side, and go after Israel. If Israel has some really unfortunate civilian casualties, that will be a P.R. coup for Iran to justify strong action against Israel.

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And because the U.S. has (i believe rightfully) called Hamas a terrorist organization, and since the U.S. has declared war on terror, it will defend Israel against Hamas.  Iran doesn't have nukes, thank goodness, but neither did Iraq.  And look what we did saying that they 'might' get them someday.

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Bush will pound his war drum saying that Iran must be stopped. What if a little nuke goes off before inauguration?  Bush calls for a postponing of the inauguration due to national security issues, and we have a hell of a mess.

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If you frequent my other blog, I've said that I felt pretty certain that the U.S. would be in a conflict with Iran before Bush is out of power. These are the stepping stones.  I see it like this.  With every palestinian life lost, Hamas will vow ten Israelis in retribution.  With every ten Israeli lives lost, it will go after one hundred Hamas in retribution.  This thing is not going to end any time soon, and Iran and the U.S. are ready for any excuse to go after each other.

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I wish they could move the inauguration date up, because with respect to Obama being sworn in, I'll believe it when I see it.

2009

I remember last year like it was yesterday. We had some friends over here at the ranch, and we all sat in the theater and watched Dick Clark's New Years. We all looked aghast at each other as the perpetually young Mr. Clark burble and babble, the unfortunate victim of a stroke. It was hard to watch, and amidst all of the hooping and hollering all of the revelers were doing at Times Square, I honestly wondered if they knew what 2008 was going to bring.

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2008 is like when you discover a leak on your boat, and you know it is starting to gain water, but you don't know where the leak is, nor would you have the tools to fix it once you found it. We found the leak, and the leak was easy credit and a complete abandonment of reasonable expectations.

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2009 is the year the ship sinks. There are 4 million homes about to enter foreclosure, and massive tax bailouts for companies that aren't viable. 2008 was the worst year in the stock market in 70ish years (since the Great Depression) and both job losses and house price losses are accelerating.

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The world should not be about money and number of ipods or the latest cellphones, and this is a massive whap on the head reminder. But the loss of homes, retirement funds, insurance coverage, credit card use, etc. is not the reason 2009 is going to be a hell of a year. It's because of instability.

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As I write this, Hamas and Israel are in full-scale attack. People are dressing up like Santa and shooting families. A woman who was about to have her home taken set it on fire with herself inside. The reason this happens is because people have lost hope, and feel that there are no options.

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I submit that 2009 will be a far easier year to handle if you expect the absolute worst to happen, and lower your expectations drastically. I have a good idea what the markets and economy is going to do, and I'm pretty sure what is going to happen to the U.S. Dollar. And the loss of jobs. If you play this scenario in your head clearly, two things will happen: you will strike a balance between being prepared for tomorrow, as well as enjoying today because disaster hasn't really struck in full-force yet.

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So for pre-visualization, here's what I expect for 2009:U.S. Real Estate - half of today's value. Stocks - hard to say. USD - collapse a lot. Job losses - huge.

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So having said that, doesn't today feel like a comparatively nice day?