There is a channel on YouTube called TheYoungTurks. Watch a few of their videos. They are nothing more than a rehash of the mainstream media (NBC, CBS, etc.). Yet that channel has 203 million views. It got me thinking... 203 million! That is probably more than NBC or FOX news! The channel spews out nothing but the same elitist rhetoric seen on mainstream news channels, but with a more light-hearted "comedic" approach.

203 million views. What does that say about the numb ignorance of Americans? No wonder they elected Obama. Were they completely blind to the blatant machinations that led to Obama's triumphant election victory? Or perhaps the genetically modified beef from cattle raised ankle-deep in their own feces has finally managed to alter the brain chemistry of the average American enough to keep them forever ignorant of the blatant abuse to which they are subjected every day, preferring instead to watch mediocre comedy mocking their stupidity, rather than wising up and examining the real dark world which they now inhabit.

It's time to wake up, America. The world ain't pretty. Your country is falling apart. It's not Alice in Wonderland, and the American Dream is the American Nightmare. Perhaps my cries will never be heard, perhaps all of the warnings issued by countless people will fall silently upon the dumb masses. No matter what, I can say with certainty that the only thing that surprises me these days is the profound stupidity of the average American.

I was in Virginia Beach. It was August, 2008, just months before the elections. I asked a random person who they were planning to vote for in the elections. The response I got was startling: Rudy Giuliani. Or maybe Hillary Clinton. They were undecided. That is the stupidity with which a small minority of Americans are battling. The machine that produced this stupidity is the same one that worships it every chance it gets. It's the US media. It's the super-giants, ultra-giants, the Rupert Murdochs, the three-letter channels that all look so familiar yet so intimidating in their grandeur.

I admit I am not the most informed person who can pass judgment on these sorts of issues, but I believe I have enough knowledge at this point to realize that without a free press, you cannot have an informed population. And without an informed population, you cannot have fair elections. You cannot have democracy.

The press is the most powerful instrument of a democracy. Most people are too lazy to research things for themselves. Most will happily accept whatever Brian Williams tells them is the truth. The media can create such indecision that people will literally go to bed the night before the elections not knowing who they will vote for. How do they do that?

It is not solely the media's fault, but it does bear the majority of the responsibility. The non-choice is ensured from the very beginning. The contenders that could challenge the system are immediately weeded out by instilling powerful negative images in the media. Candidates like Ron Paul are smeared and declared to be "cooks" or "nuts". There is a powerful machinery involved in the pre-decision process, involving selection of facts, creation of talking points, and so forth. By the time the average American is ready to vote in the primaries, the media images are permanently perforated into their skulls.

There is one way to fight the system, and it's relatively simple: start learning things on your own. Unfortunately, the vast masses of ignorant Americans choose to remain ignorant. There are now powerful forces outside the media working to ensure that Americans remain ignorant, including vaccines, genetically-modified foods, synthetic foods, drugs, etc. A whole environment is created to keep the American ignorant, obedient, childish, and lazy. This cycle cannot be broken without major efforts, and therefore is rarely broken.

The elite have a grand plan to save themselves and screw everybody else. They literally believe themselves to be genetically superior to the "dumb masses." They consider the dumb masses to be "cannon fodder, to be used as pawns in foreign policy." The elite are insane and have to be stopped.

For the average dumb American, I have a simple one-step program for how we can all stop this madness: non-cooperation. Simply stop delegating your power to these elite. Take back your money. Take money from the bank and put it in gold. Ask your employer to pay you in gold or silver. Stop dealing in fraudulent paper currency. Stop buying things made overseas. Get to know your local farmer. Trade silver for food. Trade labor for food. Barter becomes your new religion. Only deal with those who in turn are not co-operating with the system. If you encounter a police officer or other public official, educate them about the deep government corruption, and how they can subvert this corruption by not cooperating with unjust laws or mandates. And most importantly - vote. Make an informed vote, and choose the candidate who is aware of everything I just said and has a proven record of not cooperating with the system. This is how we can start to create our own reality, outside the corrupt power system imposed by the elite with our permission.

Last but not least, ignorance is bliss only as long as you've still got a roof over your head. Those who take the steps now to begin non-cooperation will be much less impacted by the social collapse which is coming. Become informed and inform others. Stop cooperating with the system. It's hard, but unfortunately it is the only way that we can take back power.

Einstein said it best: "There are two things that are infinite - the universe and human stupidity, and I'm not sure about the former."

This was originally posted over on my other blog (thelogicspace.blogspot.com) but I think it's important enough to post it here as well...

"
I've recently developed a phrase I like to use to remind myself to take the time to invest in myself. It's called "Play to Win": You've got to PLAY to WIN. Think of the lottery: you MIGHT win IF you play, but you CERTAINLY won't win if you don't play.

You've got to think as if every action you take will result in the most spectacular success even if it won't. Think of yourself as if you're constantly buying lottery tickets. Every minute you spend is productive only if it has resulted in you buying another lottery ticket. This idea is also sometimes called "planting seeds." In the sense that, a tree will not grow unless you plant a seed. Planting a seed takes very little time, but could potentially result in a big reward later on.

Have you ever found yourself thinking, "this is a waste of time. It hasn't worked before, so why would it ever work?" I find myself thinking that a lot. When I release a new product, when I write a new blog article, I think that constantly, because I don't want to feel like I'm wasting time.

Whenever you find yourself thinking that something is a waste of time, you've got to ask yourself two things:
1. What have you got to lose?
2. What have you got to win? What is the biggest potential win?

If the potential win (regardless of probability) is large enough, and the potential loss is almost insignificant (e.g. a few minutes of your time), then why not do it?

You would happily buy a lottery ticket every week. Yet in all logic that seems like wasted money & time. But it's not. You have to apply this same idea to every action that you take. Invest in your future. Plant seeds. Play to win -- emphasis on the "play" part.
"

So now you should understand why you must buy two lottery tickets every week for the rest of your life. I'll be doing that starting this week. It's less than the cost of two subway rides, but the payout could be substantial. I plan to play only when the jackpot exceeds $10 million. I think that's a big enough payoff to be able to retire and live well, but any less than that doesn't seem worth it to me.

Interesting fact: if you buy two lottery tickets every week for 50 years, your chances of winning lotto 6/49 are 1 in 2700 lifetimes. On the other hand, if you never play, your odds are ZERO. I'll take 1 in 2700.

Last week, the SEC voted in favour of limiting short selling on stocks that have fallen by more than 10%. This latest move echoes previous attempts by the SEC in 2008 to limit short selling, during the collapse that occurred in September and October of 2008.

Are we in for another stock market crash?

While it's impossible to say with certainty, I think this is an ominous sign that we may be headed for another rapid decline in the US stock market over the coming months. We've certainly had the longest recovery rally since the Great Depression. No uptrend lasts forever, and when this one turns around, we can expect nothing less than a spectacular and terrifying decline.

I think it's a matter of weeks before some major downward moves in the stock market. The probability of a crash is high enough to warrant evasive action.

Here's a handy chart that explains exactly why Japan had "deflation" for nearly 30 years, and why the US will not experience deflation anytime soon...

Original Article: US Not Going Down Japan's Road (Safe Haven)

I suggest you read that article for more in-depth analysis. Here's my quick summary:

Look how slowly Japan's M2 grew from 1992 until 2004. The average rate of growth is just 2%.

How can you have inflation without monetary expansion? You can't. Japan clearly proves it.

So when you hear a deflationista argue that Japan pumped money relentlessly into the economy, that is simply not true. If they had done that, there would have been inflation. But they didn't.

Now look at the US. Different story entirely. The US money supply expanded at a rate of nearly 10% in 2008.

Bottom line, watch the money supply. If it grows, inflation will soon follow. It's a law of nature. Like gravity. You can't argue against it and make it go away.

Update: It turns out in 2009 the US money supply (M2) only expanded by about 2%. Could this be the start of a long term trend, or just a temporary anomaly?

Toronto residents must pocket $35,000 per year just to stay afloat.

Yes. Anyone in Toronto who is earning less than $35,000 (net) per year is falling behind and will be unable to retire.

This shocking conclusion is based on a careful calculation of required retirement savings based on the cost of living. In Toronto, the typical cost of living is $2000 per month (including food & housing).

For someone who earns $35,000 per year, what is left over after paying off living expenses is just $10,000.

Now, assuming you are 25 and plan to work until 60, that means you can save up $350,000. Assuming you've paid off the mortgage at 60 and your living expenses are reduced by $1200, to $800 per month, that amount will allow you to last 36 years.

That should be just enough to get you to age 96.

The math is more forgiving if you increase the retirement age from 60 to 65, or to 70. However, even if you were planning to work until 70, you would still need to save up $6,000 per year for every year you work (assuming you start saving at 25).

Even in this most forgiving case, you would still need to earn a net income of $31,000 per year. Still very close to $35,000 per year.

How much is $35,000 per year in terms of gross salary? $45,000. Yes, $45,000. That's $23 per hour based on a 40-hour work week with two weeks vacation. $23 is more than double the minimum wage.

Effectively, $23/hr ought to be the minimum wage in Toronto, because it's impossible to get ahead on anything less than that (unless you continue living with your parents).

Here's an article I've posted over on my other blog. It's worth a look so I'm cross-linking it here:

Do Repeat Yourself... If It's Easy

"How many times have you thought of a great idea only to discover that somebody else has already done it?"

(read the full article)

This is a follow-up article to this majestic piece of writing: How a New Jobless Era Will Transform America (The Atlantic)

After reading the above article, a few ideas popped into my head which may not be known to the writer, given that the writer (and his/her sources) are probably members of an older generation. However, since I am a member of the so-called "generation Y" or the "echo boom" generation, I may be able to shed some light on what I am thinking (and maybe what other members of my generation are thinking) with respect to this issue.

First, it's evident at this point that the idea of upward mobility - the idea that you could work your way up the corporate ladder - is no longer an idea that can be embraced. It is far too risky. It used to be that if you worked hard enough, you would eventually end up in a highly-prestigious position, earning lots of money, and having a fair amount of authority (all of which are highly potent aphrodisiacs to undisciplined individuals).

OK, I said a mouthful so let's backtrack a little. What is an "undisciplined individual"? Put simply, all humans have instincts and most humans make decisions solely based on feeling (emotion), rather than rational thought. In basic sociology, a human has several aphrodisiacs which elevate his/her sense of self-worth. These are (to name a few): power, wealth, and social status. Most individuals act as robots seeking these three aphrodisiacs for their entire lives. Unless you are aware of this fact of nature and discipline yourself to be content with seeking happiness in other forms, you are considered an "undisciplined individual," who is purely seeking to maximize one's social status, power, and/or wealth. The vast majority of Americans are what I consider "undisciplined individuals."

Now, believe it or not, there are many people in the world who define themselves largely by the position they hold, or by the organization in which they are members. This is one way you can define yourself, but what happens when you lose your position, or the organization you are in collapses and you're left without a position? It is my belief that if you define yourself in such a way, you will suffer enormous emotional scars resulting from your "break-up" with your organization. In fact, it is almost identical to the break-up of a marriage. In a sense, many people are "married" to their jobs.

So what is the antidote to this madness? And why do I consider it "madness"? Well, it's madness because first of all, you are probably not a founder of the organization in which you are a member. Quite probably you have a very low-ranking position within that organization and even more probably you will never reach the level of power / control that the founding member has. That's number one. Number two, it's madness because in this economic environment, anybody can be fired from any position for any reason (or no reason at all!). While this has always been the case to some extent, it is only now that it is happening on a mass scale, reaching levels where the risk of being fired from a position to which you are married actually exceeds the benefit of "becoming married" to that position.

So what is the antidote to the madness? You have to think clearly and look at the facts. The facts are that these worker-organization relationships are becoming increasingly more transient. This idea was put forth by Alvin Toffler in his 1970 book "Future Shock," in which he describes a condition where relationships (of any kind) become increasingly more transient in the not-too-distant future. This has come to pass in the form of increased divorce rate as well as increased job insecurity. I think there is no question at this point that Toffler was right and that this trend will continue for a long time.

So given all that, it is far more rewarding to think of yourself in terms OTHER THAN your relationships with other organizations. When I look at myself, I value myself based on my ability to solve problems creatively, or by my ability to think logically. These are attributes that are fundamental to survival, but which have been almost eternally ignored at the societal level. I believe these attributes are far more fundamental than anything else. You need to define yourself based on your fundamental attributes that make you a resilient individual in the face of any natural or environmental situation. Always avoid the trap of thinking that your identity is defined by what others think of you. This is a fundamental shift in mentality that needs to occur on a massive scale. This shift is what separates a "disciplined individual" from an "undisciplined individual." We, as humans, need to become far more self-disciplined and far more aware of the destructive aphrodisiacs I mentioned earlier.

As an aside, two things I try to avoid constantly are:
1. Believing (or becoming attached to) others' opinions of me.
2. Following popular beliefs or behaviors unquestioningly.

Coming back to the idea that upward mobility is dead, imagine you start out your career as a Walmart cashier. Then, 20 years later you're back at Walmart as a cashier. If you grew attached to the idea that you would advance over time, you would be devastated to find yourself 20 years later in exactly the same position. However, if you defined yourself by other characteristics which may not be as socially respectable (yet) as the idea of career advancement, you would be relatively unaffected by your career path, however erratic it may be. It is an idea from many oriental religions which must be embraced: "avoid attachment to things which are invariably transient."

Sadly, many are refusing to accept the new reality and construct a belief system which is more consistent with it. Instead, it appears that many are resorting to having children as a way to escape their insecurities and gain social approval. It's understandable that we are social beings. And it requires an enormous shift in thought patterns in order to avoid the common traps that cause us to do undesirable things purely for social approval. Yet, in order to evolve as a species, we must engage in precisely this sort of detachment from the base aphrodisiacs that have driven society for generations. So if you find yourself unemployed, become a Buddhist monk. It's a step in the right direction.

To close off, I will give one last example which illustrates what can happen when jobs disappear but the parasitic aphrodisiacs of power and social approval remain. In Philadelphia, white neighborhoods are now becoming increasingly black. White males, who have held blue-collar and even white-collar jobs have now been unemployed for years. Some are now resorting to precisely the same kind of behavior that blacks have been struggling with for decades: fathers abandoning their children, drug dealing, violent crime, and domestic violence. This is all because, fundamentally, blacks are no different from whites. It is only the economic circumstances which produce a difference. Now that the differences in economic circumstances between blacks and whites are beginning to narrow, we are seeing a convergence in terms of behavior patterns. Unfortunately, this convergence is happening in the wrong direction: instead of blacks becoming more affluent, whites are becoming poor.

All too often, persistent widespread poverty results in a loss of dignity among members of a society. This is certainly understandable, but there are many societies which, by our definitions of wealth, are extremely poor. Yet, these societies are very cohesive and peaceful. We do not have to go through a break-up of society as a whole as a result of increased overall poverty. In fact, the society of the 1930s was very cohesive and generally in good spirits. People helped each other. We should work toward a healthier society, by valuing those things which are fundamental to survival: knowledge, and creative problem solving, rather than those things which are the primal aphrodisiacs of undisciplined individuals.

The latest food stamp report is out: 38 million people in the US are now (October, 2009) on food stamps.
Here is the stunning part: "an increase of nearly 6.9 million people compared with the prior October."

Questions arise:
- How is it that 38 million people in the US are on food stamps yet only about 20 million are considered unemployed?
- 7 million more people are on food stamps now than in the fall of 2008. Where is Obama's recovery?
- What are the social consequences of having one eighth of the US population on food stamps?

For the social consequences, I will write up another blog post shortly, as things are quite troubling.

Recap

First of all, let me clarify that I think C is a great language and excellent for the development of low-level system software. I think C++, specifically, adds an extra unnecessary layer of complexity which makes it less suitable for low-level work but in some cases it's the only option. I would readily choose C over C++ for low-level software projects (e.g. drivers).

When dealing with C code, I would aim to write as little code in C as possible and provide an interface for writing the remainder of my code in another "safer" language, such as C# or Java. By "safe" here I mean something that is detached from the OS, so that it has a lower risk of corrupting the system's memory or file system upon failure. Again, C# and Java run in virtual machines which provide an extra layer of safety should things go horribly horribly wrong. The layer of safety may not be perfect, but it's better than having no layer of safety at all.

Also, when I said C++ sucks (sort of), I meant that C++ sucks for most types of applications (e.g. GUI or web applications). There are some cases where C++ is a decent choice, but those cases are rare and limited in scope. For the most part, C++ is just plain awful, because it consumes more time and produces more lines of code than either C# or Java. It also induces programmers to produce substandard code and has the inherent property of creating very difficult-to-debug code.

There are certainly cases where using C++ is unavoidable. When such a case arises, it does not usually mean that C++ as a language is in some way superior. It just means that C++ is not completely useless. I still write C++ code occasionally, because I have to.

The Debate Goes On

Recently I came across an article that attempts to refute my claim that, in most cases, C++ sucks.

I have a couple of remarks related to that article:

"What do you do when writing cross-platform code in C and you need to make heavy use of the filesystem?"

I assume by "heavy use" here you mean low-level operations. In that case, you need to make a file system driver in C (or whatever language the OS supports for drivers) and expose APIs that can easily be called from a higher-level Java or C# client application. Again, minimize the integration between high-level application code and low-level driver code.

"On that note, nobody, and I mean nobody should be using C++ without Boost"

If that is the case, why is Boost not a feature of C++? Maybe it will make its way into C++0x? The very fact that Boost exists indicates that C++ is a deficient language. Boost is merely a patch over those deficiencies. And when I talk about C++, I'm also referring to the standard library as well as the language itself.

"I guess the author has never worked on embedded software or real time systems. Or games for that matter. Or I guess anything other than canned business software."

Actually I have built games using DirectX in the past. I can confidently say that C++ was not needed for any feature. Given the extra time that C++ adds to the development of any app, being able to use any other language (and minimize the use of C++) is quite important.
Here is a simple 3D demo I built with OpenGL and Java in 4 intensive days of coding: http://www.dacris.com/article.aspx?name=demos. I probably would not have been able to perform such a feat with C++.

"C++ has a keyword called sizeof() that lets you determine how big a pointer is."

Again, that's nice, but I'd rather not use pointers and not write sizeof() statements all over the place. The time I save by not thinking about pointers (and by not reading code that contains pointers) is enormous.

"Perhaps an even better answer is in order though. I won't use any Gui toolkit, because I won't develop GUI code in C++. Why would I use the language for something which it doesn't excel at?"

Exactly. If you're content with building console applications, use C++. No problem. But for any kind of UI, C++ just sucks.

"C++ has a very strong, flexible type system."

Flexible, yes. But the problem is it's also lacking some very useful features compared to C# or Java. For example, how do you enumerate a class's fields or properties in C++? How do you detect that class A inherits class B at runtime, or get an object's type at runtime? In C# this is called "reflection." There is nothing like it in C++. For this reason, it's very difficult to do generalized serialization in C++. In C# and Java you can literally serialize any type.

"Code generation"

I can't think of any reason why you would ever want this. Macros and templates are a symptom of bad design. Instead of using code generation to deal with repetitive code, why not build a reusable component? Generated code is hard to maintain, hard to understand, hard to verify, and hard to debug.

Write as Little Code as Possible

Let me end by saying, I'm not a "substandard programmer." I'm merely a lazy programmer. I like to write as little code as possible. I keep track of the lines of code in all my projects, to make sure that number stays low. I guess if I was paid by KLOC I'd be pretty broke.

Have you ever woken up one morning thinking you deserve a raise? Well, if you think logically, if your performance has been excellent (praised by your boss), you'd think you definitely deserve a raise. Not quite. This type of logic no longer applies in today's business environment. Shocked? Confused? Don't worry - I'll elaborate.

Imagine a stellar employee, praised often by his/her manager, is working at a salary of $60,000/yr and gets called into the manager's office for a talk. The talk is about how the employee is exceeding the employer's expectations and the employer wants to assign the employee duties that will be more challenging and possibly more useful for the business. The employee is certainly excited, thinking he/she might end up getting a raise. The employer finally reveals the key figure: the salary. It's $45,000/yr and requires that the employee sign some additional restrictive agreements that are not applicable in the employee's current position.

Is the employee being promoted or demoted?

From the employer's perspective, the employee is being promoted. Duties are being expanded and greater responsibility is placed on the employee. But, from the employee's standpoint, things are not quite so rosy. The employee sees a decrease in salary, and an increase in work and in restrictions. What benefit is there for the employee? ... Give up? There is no benefit!

That's right, the employee is being demoted for achieving excellent performance. Outstanding performance is being punished rather than rewarded. I would be willing to bet that this is happening in a lot of companies these days. In fact, I'd go as far as to say it's becoming a market-wide phenomenon.

So don't be shocked if an employer offers you a demotion for exceeding expectations. The world is, as they say, a little more complicated than it appears to be. This paradox is, like most paradoxes, a mind-boggling one. And its implications are huge. It means that the best employees are those who walk the fine line between doing too little and doing too much. They are those who stay inside the box, and live a life of mediocrity.

In the world of business, mediocrity is rewarded. Creativity is punished. I've just given a concrete example based on personal experience. Yes, it's based on a true story. When you add it all up, isn't it better to just mind your own business?

I would like to take this opportunity to encourage users of old PCs (pre-2005) to take extra precautionary steps before installing Windows 7.

Otherwise, you could end up baking your hardware. Yes, baking, in the oven.

How I ended up baking my laptop:

I installed Windows 7 on an older Toshiba laptop (from 2004) with a GeForce Go 5200 graphics card. First, it was not recognized - Windows 7 actually decided to use the Standard VGA Adapter driver for the card, which forced me down to 1024x768 resolution and extremely slow rendering. Well, I decided to look for a driver. Toshiba didn't have one on their site, NVIDIA no longer supports the 5xxx series, so I ended up finding a shaky third-party (modded) driver and modded it a bit myself to get it to actually recognize my card.

So after all that, I installed the custom modded driver and it seemed to work great at first: I even had Aero Glass! But little did I know there was a major problem lurking in the shadows... A few days after installing the new driver, I start up the laptop and it starts displaying columns of random flashing characters (at the BIOS screen). Immediately I concluded that this was a video card problem - it had happened to me before, with a GeForce 4 Ti4200 card.

Great, so now I had a dead video card. I looked around the web for people who had experienced the same problem, and found one who took his laptop to a repair shop and the technicians there diagnosed it as a "BGA failure." So I looked for BGA-related problems and found what seemed to be a re-occurring theme on various forums: "bake at 375*F for 5-10 mins". Surprisingly, those who tried it said it actually worked!

But how does it work? The BGA (Ball Grid Array) is what a video chip is most often connected to. This thing is just an array of tiny balls of solder that can melt at very low temperatures (even 120*C). When the video chip gets insanely hot (like over 100*C), it can warp the BGA so much that the chip disconnects from the balls and you end up with the problem I had (random characters at the BIOS screen). The solution, apparently, is to heat up the entire PCB (in this case the motherboard) evenly at a high temperature, so that the solder melts and reattaches itself to the chip. The prescription, in my case, was to bake at 375*F for 7 minutes.

Of course, I had to remove anything that might melt or explode - like batteries. I made sure to remove even the CMOS battery and remove all attachable parts (RAM, hard drive, etc.). I only baked the actual motherboard. But at the end, it worked! The video is fixed now, thanks to BGA baking!

The problem was caused by Aero Glass overheating my card. I'm 99.9% sure of it. And I'm also 99.9% sure that's why NVIDIA doesn't have any official Vista / 7 drivers for it. So immediately when I booted up my laptop after baking, I booted straight into Safe Mode, removed the graphics driver, and rebooted into Windows 7. Then, I reinstalled the graphics driver and made sure I was on the Windows 7 Basic theme, without Aero Glass. I also disabled the DWM service, so that there is no freak occurrence where Aero Glass gets re-enabled.

Precautionary steps that would've saved my behind:

Like I was saying, with Windows 7 on older hardware it's very important to take a few extra precautionary steps:

1. Run the Windows 7 Upgrade Advisor. Ensure that your essential hardware (the stuff you can't boot up without) is supported.
2. Take an inventory of your hardware. For me, the easiest way to do this was to just run Dacris Benchmarks (version 8.0) and create an HTML report under the System Information tab. This makes it much easier to find drivers online when everything in Device Manager is listed as "Unknown." But, if you have perfect memory, you don't need to do this.
   
3. Make sure you download any necessary network adapter drivers before you install Windows 7. Otherwise, you won't have Internet access. Usually the Windows 7 Upgrade Advisor will tell you if you need to do this, but do it even if it doesn't tell you - just in case - unless you have another PC connected to the Internet and a USB key.
4. For hardware that is shown as not compatible in Windows 7 Upgrade Advisor, try to find official Windows Vista drivers for it. If no official Windows Vista drivers exist, and the device is essential, you may want to reconsider upgrading to Windows 7.
5. For software that is shown as not compatible in Windows 7 Upgrade Advisor, try to find a newer version online that supports Windows Vista. If no such version exists, and the software is essential, you can still upgrade to Windows 7 but the software will probably need to be run in XP Mode. While XP mode is great, there are some things it can't do - like Direct3D. So if the software in question is a game, you may want to keep Windows XP. In that case, I would recommend dual-booting Windows 7 and Windows XP.

Now, in fairness, I couldn't have run the Windows 7 Upgrade Advisor on that Toshiba laptop I mentioned, because it had no working OS at the time (the reason I installed Windows 7 was because XP died). I should've really just reinstalled XP and then run the Windows 7 Upgrade Advisor.

A side note - hardware manufacturers (especially NVIDIA) have failed us:

While I was thinking about baking my graphics card, I had a thought: was it really the fact that Vista had such a different driver model that caused hardware manufacturers to produce unreliable drivers? Did hardware manufacturers really not have enough time to adapt to Vista? I remember Microsoft in 2005 mentioned that any PC made in 2005 or later would be able to run Windows Vista. So hardware manufacturers in fact had 2 years to produce Vista drivers. The Vista development cycle lasted 5 years. Plenty of time for IHVs to get involved, learn the Vista driver model, and develop drivers in consultation with Microsoft.

So who really failed here? Microsoft? Was NVIDIA's discontinuation of support for the GeForce 5xxx line a Microsoft decision? Who is to blame for NVIDIA's inability to produce drivers? I would say it's NVIDIA that's to blame here. I've had so many NVIDIA cards fail on me: I witnessed a friend's NVIDIA card go up in flames, literally, then my own NVIDIA card did the same thing! Then, I had an older NVIDIA GeForce 4 Ti card that died with the classic BGA failure, then I had this latest failure: another NVIDIA card. That's four NVIDIA cards, three of which were mine. So out of all the NVIDIA cards I've ever had (about 5), only two remain. Now, I've had my share of ATI cards (roughly 5) and not a single one has ever failed. Not one.

Sorry NVIDIA, but I'm afraid I must buy ATI cards from now on. Sure, NVIDIA's drivers are more polished, and sometimes NVIDIA wins in terms of performance, but the cards rarely last very long. I would urge anyone who is thinking of purchasing an NVIDIA card to think twice and consider the ATI alternative, and think of which card you'd most likely have to bake. Now, of course, if you like baking, NVIDIA is your friend. :)

Microsoft is keeping unusually quiet about their mobile strategy these days. From the various stories I've been reading on the Internets, it looks like MSFT is set to announce a major breakthrough at the Mobile World Congress next month that has the potential to be an iPhone killer.

My prediction: The first Windows 7 smartphone will be announced at the Mobile World Congress, along with APIs for smartphone programming on Windows 7 that match the APIs provided by Apple for the iPhone.

But, we'll just have to see...

KEY TECHNOLOGY INNOVATIONS OF THE 2000s THAT MOST OF US USE EVERY DAY:
- LCD monitors and TVs
- Solid State Drives (SSDs)
- Cloud computing
- Wireless networking (WiFi/802.11g)
- Multi-core processors
- USB flash drives
- Streaming audio / video
- Torrents
- Online game consoles
- Touch screens
- Bluetooth

KEY TECHNOLOGIES THAT DIED IN THE 2000s:
- Floppy disks
- CRT displays
- Modems
- DOS games
- VHS tapes

PREDICTED TRENDS FOR 2010s:
- Software development re-focuses on hardware limitations & performance optimization (yes, hardware is still very limited!)
- Streaming 3D - enormous worlds with terabytes of content loaded from the web in real-time on your mobile phone or gaming console
- Pen-like computers & 3D glasses - this is the next logical combination of input/output devices overtaking the old PC & monitor
- Popular novels become 3D-ified - entertainment now puts YOU in an immersive 3D world of fantasy - be on Mars battling aliens
- Enhanced vision - while you wear 3D glasses, your PC will see the real world for you in many ways: real, infrared, X-ray, and so on
- The OpenWorld3D project: a perfect online replica of the entire Earth as a 3D world (with buildings, streets, cars, weather, etc.)
- Collaborative 3D modeling online - 3D model wikis are born: allowing the online community to build 3D models collaboratively, online
- 3D will be THE buzzword of the decade, like "online" was for the last decade; expect highly immersive & realistic 3D worlds
- Flexible paperlike screens allow creation of rollable (and maybe even foldable) tablet PCs and phones - OLED will make this happen
- The data web: a computer-friendly version of the entire world wide web, allowing greater sharing of data between sites
- The Internet goes 3D: toward the end of the decade, expect more and more websites to be full-blown 3D worlds

Quick! How many times did I mention 3D?

It was about 4 years ago when I started saving money for the first time. I opened an ING Direct savings account. Didn't know what I was going to do with it all, but I knew one thing: nobody was saving their money. There had to be a reason. Not only that, but saving was frowned upon. It still is. "Live your life, man!" is what everybody would say. But no. I was saving every penny.

At times, I found it somewhat absurd. Why should I keep saving? What's the point? Why not live for today? Life is short, after all. But I kept saving. I decided to treat it like an experiment. I wanted to find out where it would take me. What advantages would I gain (if any) from saving as much as I can?

Mind you, 4 years ago I was 19 years old and was just becoming acquainted with the vastly complex world of finance. I didn't even know where exactly to put my savings. CDs? GICs? RRSPs? What does it all mean?

So 3 years ago I started researching finance, in depth. I started reading online materials on stocks, bonds, GICs, money markets, and everything else. Basically, I wanted to become aware of all the options I had.

A few months passed, it was July of 2007, and I was observing the stock market. I observed one thing: stocks had been rising since 2002. So, it had been 5 years of continuous rise. If I put my money in stocks now, I reasoned, I would probably lose a whole bunch of it when the stock market crashes (at the time I figured it was a matter of months before the next crash).

So I decided to hold off on buying stocks and keep exploring. Maybe there was something I could put my money into that wasn't just a plain vanilla savings account. I turned my eyes toward inflation. At that point, my only recollection of inflation was the disastrous hyperinflation that my parents experienced in Romania during the 1990s. I remembered clearly that there was a time when every week the price of bread would double. I wondered if something like that could happen again, in North America.

After doing a bit of research on the CPI and noticing that inflation had been going on, though at a slower pace, in the western world as well, I realized there was really no difference between Canada and Romania in terms of currency. Fundamentally, the currency system was exactly the same. So, technically, even though my savings account was CDIC ensured, the purchasing power of that money was not.

I decided to look for ways of protecting against inflation. Initially, my idea was to actually start an inflation insurance firm. Yes, I was determined to sell inflation insurance!

But there already was inflation insurance - and in October, 2007, I finally found out what it was. Gold. My research quickly took me on the path of precious metals, which had been inflation-proof for thousands of years. A good enough track record, I figured.

Great, so I decided to move some of my savings into gold. Of course, I realized it must not be too much, because gold is extremely volatile. Not only that, but gold had been going up for 6 years - longer than the stock market. Surely it was due for a correction. I started small, and moved slowly, making sure that my bullion position never exceeded the "safe" limit that I had set for myself.

But how did we end up talking about gold? The topic was savings. In general. And why it's important to have savings.

Well, first I must make it clear that gold is the only true form of savings. Paper depreciates, and is vulnerable to political turmoil. Stocks are risky - companies go under all the time. Real estate also depreciates and is vulnerable to political turmoil. If you want something that can withstand many generations and has a track record of preserving value through time (which is what savings is), that something is gold, and silver. Precious metals.

Now we can talk about why savings is power. What does it mean to have savings? It means you have the power to readily take on adversity, for a prolonged period of time, in the hope of achieving a greater income. For the individual, it means you can go without a job longer, so you have the latitude to negotiate higher pay in full view of the risk of remaining unemployed, because that doesn't bother you, because you have savings. It means you can explore new business ideas and have no fear of failure, because you know you have savings.

But this applies not only to individuals. Savings is power for countries as well. You see, the country that is able to take on the greatest adversity for the longest period of time will come out on top. Wars are won by those countries that have accumulated the greatest savings. In World War II, the US had the most gold of any country in the world. The US won the war and continued to dominate the world for decades thereafter. Remember: gold is savings, and savings is gold.

Now, 4 years after I started saving, I think I can finally appreciate the power of savings. I see now that debt is servitude, and savings is power. For you see, those who are in debt are subservient to those who have the savings. This has always been the case for all of time. Which side are you on?

My 10 predictions for 2010:

1. Inflation will surprise everybody. Watch prices carefully. Everything will be up 10-15% by summer. Your lunch will no longer be $7, but $10, and soon $12. Your bus ticket will no longer be $3, but $4 and soon $5. All in 2010.
2. Revolution will surprise the powers that be. The US is ripe for a revolution. Especially when it becomes perfectly clear that Obama has done nothing but lie, and that the propaganda machine around Obama is more powerful and more terrifying than what Bush could've ever dreamed of.
3. The big important theme for 2010: Cost cutting. The words "budget" and "low cost" will be what keep most businesses alive. It'll be about stretching every dollar, stretching every penny, despite the growing unacknowledged inflation.
4. China will be a big story in 2010, specifically recognition that China is now the world's dominant economic superpower and that US treasuries will soon be liquidated en masse. Furthermore, China will be a story because all of the inflation we'll be seeing will be originating directly from China!
5. Not to be outdone, mobile phones will go big in 2010 (or rather, small). There will be a surprise in the mobile market that neither Google nor Apple will appear to have prepared for - and that will come from Microsoft. Google, Apple, you have been warned! Yes, we're talking about Windows 7 phones.
6. Steorn, and a few others, will surprise the oil companies. Yes, free energy will arrive in 2010, if you know where to look. Steorn will be doing a demo early in the year, so it's pretty much a foregone conclusion. The human race has reason to celebrate, and reason to rise up!
7. Electric cars will reach power parity with gas-powered cars. Range will be hundreds of miles on a single tank. Batteries will charge in seconds! You have been warned...
8. Government will expand to take over every aspect of our lives. Yes, this is a sad one, but as private sector jobs disappear due to income tax bracket creep caused by inflation, government will expand to take over nearly every aspect of industry. We could see 90% of jobs becoming government-run or government-backed in some way.
9. Masses will be waking up, in a surprising way. TV will have a decreasing influence in everyday life, and you will become surprised to know that your next-door neighbor knows as much about the New World Order as you do, plus a lot of other things about free energy, UFOs, and other "black-listed" knowledge.
10. Wage inflation, yes wage inflation, will begin. Your salary will probably be up 50% by the end of the year, but inflation in everything else will have been closer to 100%.
    

Overall themes for 2010: surprise, reform, and revolution! Change will come, but not because of Obama.

Is time linear?
Does every interval of time contain the same amount of information?
What does time contain anyway?

Time is a container for change. Time contains the delta between one state of the cosmos and another. Each finite interval of time contains within it the amount of change that has occurred from the beginning of that interval to the end of that interval.

In a sense, change is novelty and novelty is change. Novelty is merely a synonym for change. So when we think about novelty theory, to refer back to the work of Terence McKenna, we're really analyzing the content of time.

We know that the content of space is matter, and energy. But what is the content of time? It's a perplexing question for those who cannot see the logical conclusion that time in fact contains information. For it is information that informs change. Information is nothing other than change, and change is information. Novelty is therefore information. We're running around in circles describing the same phenomenon with different words, each word trying to out-grandiose the others.

But the fact is simple and yet stunning: Time contains information, much like how space contains matter.

Now, we know another interesting fact from basic observation of the world around us, and that is that information is cumulative. You never lose information. This has been elaborated by Terence McKenna as well. Essentially, the fabric of time itself is cumulative. At every stage in the evolution of the universe, we have gone from a state of low complexity to a state of higher complexity. We've never "devolved" into a state of lower complexity. Complexity has always increased.

Well, what is complexity? First, it helps to understand how we obtain complexity. At the start of our universe, if we accept the big bang theory, the highest level of complexity in the universe was characterized by a primordial soup of electrons and elementary particles. From that evolved the first atom, clearly a structure with an order far more advanced than what had existed prior to its emergence out of the primordial ontos.

Now, this first atom, the hydrogen atom, contained a whole lot more information than its parts, or even the sum of its parts. Because the hydrogen atom has a logical structure far more elaborate than the logical structure which represents an electron. Indeed, it is this logical structure that we must talk about when we're talking about complexity and information. The hydrogen atom is an entity which requires far more information to describe than the electron or the proton alone. So basically, the primordial soup required a very small amount of meta-data (meta-information, or logical structure) to describe, compared to what followed (i.e. the hydrogen atom). This is where we get the notion of increasing complexity. Complexity is the measure of the quantity of information required to produce the simplest possible explanation of a particular physical phenomenon.

As the universe evolved further, we got more and more complex structures. We got other atoms, molecules, organic compounds, and then biological life, and finally social life; intelligent life. Each of these complexities builds on the previous level of complexity. Molecules build on atoms. Social life (cultural or intelligent life) builds on acultural, biological life. Microbial life builds on essential organic compounds. In essence, each new level of complexity contains within it all existing levels of complexity.

Thus, complexity is conserved. We can in fact emphatically state that complexity is never destroyed. It is strictly conserved.

So what does this all imply for the nature of time? Well, time contains within it descriptions of changes within entities of varying complexity. At the beginning of the universe, each second of time contained a only a very minute description of changes, because only a minute description was needed for the level of complexity at which the universe had arrived at that time. Basically, God only needed a handful of bits of information to describe a change in the state of the universe when the universe was still in its primordial soup state.

As the universe complexified, necessarily the amount of information contained within each second of time needed to increase, in order to completely describe the more complex universe that was emerging. Basically, each level of complexity required more information about the changes within that level of complexity.

Thus, as the universe cooled and complexified, time became more and more burdened with information, so that each moment of passing time contained within it more information than the previous moment.

This process continued to this day. With every passing moment, time "expands" to contain more information than any previous moment that has ever existed. This is a profound concept to grasp, with profound consequences for our perception of time. It means that our linear time assumption, the assumption that time is isotropic and linear - that each moment is the same as every other moment, and that each interval of time is qualitatively and quantitatively the same as every other interval - is absolutely patently false and misleading.

We have to ditch the idea that time is somehow plain, linear, and uninteresting. Time is extremely interesting, and ought to be studied by science like nothing else, because we don't have a sufficiently clear understanding of the nature of time.

But the interesting implications of this "expanding time" theory are many. This theory actually validates intuitively-derived beliefs in many cultures that time is accelerating, or that time is heading towards an ultimate end. In fact, even modern science has managed to create a theory mainly involving human culture and cultural progress which indicates that there may be a point in the not too distant future where all of our knowledge, having been preserved thanks to the law of conservation of complexity, leads to a point of infinite temporal acceleration - a point of asymptotic discovery and asymptotic change, putting an end to time itself. Indeed, this very idea has been prophesied by others, including the ancient Mayans with their apocalyptic 2012 prophecy, or the Christians, or even modern-day prophets like Terence McKenna, although I'm sure he would despise being called a "prophet."

We must challenge all of our dearly-held assumptions about time or else we will not proceed to make true scientific discoveries. Today, we carry notions about time that are akin to believing that the Earth is flat or that it sits atop the backs of four turtles. For example, we believe that causal connections can only exist from the past to the future. We have established one predetermined direction for causality. Yet, we can clearly observe retrocausal effects all around us that seem to defy the laws of physics and all too often get classed as mere coincidences or worse, paranormal phenomena. In fact, such occurrences should be observed experimentally and we should try to develop a theory for explaining such retrocausal phenomena as the appearance of 9-11 as a motif in various artifacts well in advance of the actual event which occurred on 9-11-2001. Other retrocausal phenomena include such cases as the flight of animals to safety prior to a devastating tsunami or earthquake. Anything that is often classed as premonition or prophecy ought to be investigated as a potential candidate for retrocausality - events from the future having causal links to events in the past. It's crazy to think that the future could have a causal influence on the past, as it means that the past is now just as malleable or perhaps more malleable than the future!

Anyway, I hope I've been able to shed some light on the strange nature of time and why what we humans often think is obvious is really not so.

I could probably talk further here but instead I think I need to actually summarize what I described:

1. Time is a container for... change in information, also known as novelty. Necessarily, then, time has at least two dimensions.
2. Complexity is conserved. Each new level of complexity builds on lower levels. Complexity is never destroyed or reduced.
   
3. Time is non-linear and quite probably anisotropic.
4. Time is expanding, with each one-second interval containing more information than any previous one-second interval. This is subjectively perceived as an acceleration.
   
5. There may be an endpoint for time, consisting of an asymptotic acceleration of the rate of progress toward infinite complexity.
6. Causality probably works both ways, even if it seems odd to us. Retrocausality seems to explain perfectly the phenomenon of prescience in some organisms.

Bend your mind, but be careful not to break it!

Spring Solstice

‘Tis the season to be jolly, as the sun begins to dawn.
Spring hath right now just begun.

The solstice ends the sun’s decline.
Soon the snow will melt, the sun will shine.

The sun will burn, high in the sky...
Just like your love did, last July.

Dan's Gold & Silver Recommendation: Buy (with caution)

---

We've now corrected 10% in both gold and silver, from the top reached a few weeks ago.

I think it's time, given the speed and severity of the correction, to start buying again.

However, I do think that further downside is possible. So cautious buying is advised.

---

I will try to have this segment at every major turn in the market so that you can stay up to date with the latest market movements.

So stay tuned for more of "Dan's Gold & Silver Alert."

Internet Explorer 9 will be coming out soon. It is going to have hardware-accelerated rendering of web pages. In essence, it will use the video card (instead of the CPU) to render web pages. This means much faster performance, awesome effects (even 3D), and less CPU usage.

Channel 9 has posted a demo of IE 9. The video shows some of the awesomeness of this new version of IE.

So here are some highlights of what's coming:

1. Web page rendering on the GPU (instead of CPU)
2. Better standards support
3. New JavaScript engine, with performance similar to Firefox

Here is a comparison of browser performance, from Ars Technica:

As you can see, IE 9 is now on par with Firefox and Chrome.

Not good news for Firefox. Or is it?

It seems the Firefox people aren't sitting idly by. They're busy implementing hardware accelerated rendering in Firefox 3.7.

So it's certainly going to be an interesting competition between IE and Firefox. It looks like the browser wars are on again.

Not long after I posted my first topic outlining the idea of Windows 7 smart phones, I found this...

Razorfone: A Conceptual Windows 7 & WPF-powered Multi-Touch Phone Retail Experience

It looks like the idea of a Windows 7 phone is alive & well. While the "Razorfone" is a concept for retail environments (a kind of kiosk), it's nice to see others considering the idea of putting Windows 7 on phones.

One more piece of good news on the mobile phone front:

WIND Mobile Takes Off - National Post

WIND Mobile - www.windmobile.ca - has finally been given the green light in Canada. No longer will we be limited to the triopoly of Rogers/Bell/Telus. Hopefully, this means no more 3-year contracts and lower prices in general. Canada is the most backward country in the world when it comes to mobile phones, largely because of Rogers & Bell's huge political influence.

I urge all who are upset about Rogers or Bell to check out WIND Mobile and consider switching over. Actually, I urge all to check out WIND Mobile. From what I can see, their plans are quite cheap and straightforward.

Today I just discovered a neat little WPF graphing library called D3 (DynamicDataDisplay).

It's amazingly architected so that it's fast and extensible. Although it requires .NET 3.5, I was able to downgrade it to .NET 3.0 by using LinqBridge, a free library that emulates 99% of Linq without requiring .NET 3.5.

Actually, LinqBridge deserves a topic on its own - there is literally no reason for you to require .NET 3.5 in your apps, unless you use Linq-to-SQL. Linq-to-Objects is 99% emulated by LinqBridge.

To .NET library developers: start distributing .NET 3.0 versions of your libraries using LinqBridge, so that my Vista users don't have to download .NET 3.5. Saves me a boatload of headache as an ISV.

So, back to the main topic. If you're looking for a WPF line plot library that's free or simply want an example of how to build a WPF control library the right way, just take a look at D3.

Those are my findings for today. I guess it's been an exciting day!

So, it seems Moore's Law is at it again. And those who are not aware of it (by now) will be left in the dust. Read this article and you'll know what I mean.

First, I must warn you that you may be offended by reading this article. If you are an ardent fan of Google or Apple and/or a hater of Microsoft, you may not like what I'm about to tell you. That's fine. Just be prepared, if you do plan to read on.

Yesterday I installed Windows 7 on a 5-year-old laptop with 512 MB RAM and only 7 GB of free disk space. It installed (surprise!) and ran flawlessly! It even ran smoother than the XP installation I had on it before. Probably because with all the service packs, XP has actually become more bloated than Windows 7.

Now, I want you to note the specs: 512 MB RAM, 7 GB of disk space. Impressive. A high-end PC from 10 years ago would've had these specs. So literally, Windows 7 supports a decade of computers!

But what's more fascinating is the mobile arena. Currently, Apple is still dominant and yet still afraid to lose its iron grip on the iPhone. On the surface, Apple appears to be very friendly to developers, but behind the scenes they are the control freaks they've always been - I'm looking at you, Steve!

Anyway, there are quite a few frustrating things about the iPhone. First, you can only sell your app through Apple's app store and it has to be approved by Apple. Second, there is no Flash on the iPhone, and no web browser other than Safari. This ought to raise eyebrows and even get Apple into legal trouble like Microsoft got into trouble with IE and Windows, for supposedly abusing their monopoly. But it seems only Microsoft is the unlucky one.

Next we have Google's Android OS, which is a commendable OS. It has everything. It is, for mobile devices, like Windows is for PCs. It is open to developers and developers can share & sell their applications without Google's approval. The only "problem" with Android is that there are too many variants of it. I wouldn't really call this a problem. It's a natural drawback of having to support a wide variety of devices. I mean, look at Windows: Windows XP, Windows Vista, Windows 7, and do you hear Windows developers complaining about it? No. They've adapted to it. They expect it. Only Apple fanboys complain about "too many variants" of Android because they don't understand it.

Next, we have Windows Mobile. Or do we? Windows Mobile is laughably dated and limited. Microsoft seems to have lost it completely on the mobile front. But have they? Or are we all missing something that's actually staring us in the face? Are we missing the elephant in the room?

Yes.

Let me introduce you all to the elephant in the room. It's Windows 7. Yup. And it's moving to smart phones. Remember, I installed Windows 7 on a PC with 512 MB RAM and 7 GB of disk space. Why do you think Microsoft decided to actually support old devices this time, and not raise hardware requirements like before? Why do you think Microsoft developed multi-touch capabilities in Windows 7? Is it for all those giant useless tablets out there? Is it for all the giant useless netbooks out there? No! It's for MOBILE PHONES!

Suddenly it all makes sense. But wait, I hear you say, how can Windows 7 ever fit on a phone? Simple: There are smart phones today that have 512 MB of memory. There are smart phones today that are extensible (via microSD card) to as much as 32 GB of storage. Last but not least, is Intel's Atom processor. It's an x86 processor (just like the desktop ones) with speeds of nearly 2 GHz! But the best thing about Atom is, it's extremely low-power and low-heat.

So the situation is now ripe for Windows 7 to start transitioning onto smaller and smaller mobile devices. There are MIDs / UMPCs currently available with screens of 4.8" which is about as small as a PSP. They fit in your pocket. And they run Windows 7. The leap from here to mobile phones is tiny. There is no leap. It's a baby step.

In conclusion, if you thought Microsoft lost the mobile space, you are totally mistaken, and you'll be in for a shock next year. All the Android and Apple fans out there won't know what hit them. Better get on for the ride.

As for what I'm doing to prepare, I'm back developing client-side Windows applications. I use WPF and .NET. They are extremely easy and fun to work with. Microsoft has always had the best support for developers, which is what helped them gain (and maintain) a monopoly for so long. Windows has more software than any other OS, and will continue to do so for many years thanks to Windows 7.

Apparently some of my older blog articles were really quite popular, because today I stumbled upon something I wrote 5 years ago:

Application.DoEvents() - The call of the devil.

DoEvents messes up the normal flow of your application. If I recall correctly, DoEvents is asynchronous which means it terminates before the application has actually processed any outstanding events, so if you're using it in a procedure with many sequential statements, calling DoEvents causes a huge disturbance whenever it's called. Basically, if you find yourself needing to call DoEvents anywhere, think about starting another thread instead, or using asynchronous delegates.

Imagine this if you will: You have a button on your form that, when clicked, does some complex processing. During the complex processing it also intermittently calls DoEvents to keep the application's user interface "responsive" -- not the best method, I would have used async delegates, but we're talking about a mediocre programmer here. Anyhow, the user sees the application still responding and no indication that there's some processing going on. So the user clicks that button again WHILE the processing is going on! The button responds to the event and starts another processing thread but it isn't actually a thread here, I hope you get what I'm saying. So, like I said earlier, DoEvents screws up the flow of the application too easily.

I want to comment on this further, because I don't think I was really clear at the time.

DoEvents really is evil. Horribly, horribly evil.

In fact, the whole Windows Forms threading model is deficient. The fact that you can set a Label's Text property from any thread is a clear warning sign that something is wrong. This is only now becoming evident to me after having worked for a few months with WPF, which doesn't allow any such nonsense. It will throw an exception if you try to execute UI code on a non-UI thread.

DoEvents should have never been included in the .NET Framework, because it gives a programmer the illusion that you can get by without worker threads. You can't. If a programmer wants to keep the UI responsive while another task is executing, that programmer should use a background worker thread. To update the UI from that thread (to show changing progress), the programmer should call Invoke on the appropriate control and pass in a delegate that will be executed on that control's UI thread. Not only does this serve to keep things consistent, but it also reduces the chances of odd bugs related to threading (which are always difficult to troubleshoot).

So, in short, avoid DoEvents and do what good programmers do: use worker threads. WPF makes it easy (and dare I say fun?) to create & use worker threads, and it's perfectly safe. Windows Forms has a somewhat sketchy UI threading model, mainly because it still has to deal with Win32 API behind the scenes. This is also a reason why you should migrate to WPF and stop releasing production software built with Windows Forms. The sooner Windows Forms dies, the better.

So today will be the last time I use System.Diagnostics.Process.Start without explicitly setting UseShellExecute to true.

Why?

Oh, it started out innocently enough - I was building a simple load testing tool in C# to load-test a custom ASP.NET HTTP handler I was implementing. The tool would basically run wget many times to simulate HTTP requests. Don't know why I didn't just use System.Net.WebClient (because I certainly could've), but I guess I just had wget on my mind.

Anyway, so the tool ran fine but it slowly leaked away memory and handles. Initially I thought it was my HTTP handler. So I ran it with an invalid URL, just to test if maybe the load testing tool itself had a memory leak. Sure enough, it did!

The leak seemed to be coming from my call to System.Diagnostics.Process.Start.

So I did a quick Googling and it turns out that System.Diagnostics.Process.Start causes the child process to inherit handles from the parent process. That means, whatever process you spawn (e.g. Internet Explorer), that process gets all of the handles owned by your process! So even if you free up handles in your process, if the process you spawned is still running, your handles won't really be freed because the child process is supposedly using them. A more detailed explanation can be found here.

As it turns out, the CreateProcess call in System.Diagnostics.Process.Start has a certain parameter that is hard-coded: the bInheritHandles parameter is hard-coded to true. Well, that's a shame now isn't it?

So what can we do instead?

I would prefer any solution except calling the CreateProcess API directly, since API calls are ugly. One option is to set ProcessStartInfo.UseShellExecute to true before calling Process.Start. However, you won't be able to redirect stdio. In fact, if you want to redirect stdio you either have to accept MS's buggy implementation or roll your own with pipes, API, and all that funky stuff.

One last thing...

With the Process class, be sure to explicitly Close the process object (not just Dispose) after starting the process or after you're done using it, because otherwise the process handle may leak.

Not even two months after I wrote this article, where I described why desktop .NET is finally ready for take-off, the news is out that Visual Studio 2010 is a managed (.NET) application. Finally, Microsoft are setting an example.

What does this mean to you, the developer? It means that if you've been sitting on the sidelines regarding .NET and are still coding with *gasp* MFC, or Win32 API, it's finally time to move to .NET.

This also means that WPF is here to stay, unlike its predecessor - Windows Forms. Many early adopters of .NET were under the impression that Windows Forms would be supported and actively developed for many years. As it turned out, Windows Forms was a dead end.

The good news: WPF is now fully endorsed by Microsoft through Visual Studio 2010. This means WPF is finally mature enough for adoption. Plus, it's included in Windows 7 and Windows Vista. You don't even have to distribute the .NET Framework (provided you target version 3.0 and not 3.5 or 4.0). Visual Studio now makes it easy to target a specific version of the .NET Framework, unlike some of the early versions (VS 2003/2005).

Personally, I think we're going to start seeing an explosion of new WPF apps in the coming months. It could be like the explosion that happened with the iPhone (and I'm not talking about the screen).

These are the most exciting times for Windows developers since Windows 95.

So gold just shot up above $1090 today - a new all-time high, oil is up above $80 a barrel again, and I'm getting emails in my inbox about contract opportunities with rates of $60+ an hour. So what does all of this have to do with Bob Prechter?

Who is Bob Prechter anyway? For those who don't know, Robert Prechter is a semi-popular financial analyst who occasionally pops out of his wooden shed to warn us all about the impending danger of deflation. Much like Mike "Mish" Shedlock of globaleconomicanalysis.blogspot.com, he was right in the fall of 2008, when the price of everything collapsed spectacularly. However, most prices have pretty much recovered since then and some (like gold) are actually making new highs!

Robert Prechter has an interesting theory, however: that short-term market movements are entirely random - influenced by a recurring cycle known as the "Elliott Wave," which is based on the Fibonacci ratio of 1.618. In short, markets are irrational, but predictably so - they can be predicted by applying this Elliott Wave theory.

I agree with Robert Prechter on the "markets are irrational" bit. I even think he might be on to something with the Elliott Wave theory. But as far as deflation goes, I am strongly against it. I do not believe deflation can happen in a system of fiat currency (where money is created out of thin air).

One example that deflationistas often like to bring up is the case of Japan in the 1990s, and how allegedly Japan experienced deflation from 1990 to now. That is just totally wrong. Japan experienced roughly -0.5% inflation for 3 years. That's it. That's all the "deflation" it ever experienced. Japan is not a valid example of deflation.

One other example some deflationistas hearken back to as a last resort is the Great Depression. However, during the Great Depression the US was still on a gold standard, so that example is totally invalid in today's fiat world.

So given the track record of these "deflation" predictions, why does Robert Prechter think that "this time is different"? And where is he now, when his predictions appear to be falling apart by the day?

Let's talk a bit about assumptions and what can happen if you make wrong ones and never bother to correct them. The example in this article will, fittingly enough, be Microsoft - and specifically .NET.

.NET is supposed to be an OS-independent API. It was designed to hide most of the OS behind a convenient, consistent API that does not expose any underlying OS details. That's what I mean by "OS-independent API." But it turns out, Microsoft is still a little confused about what "OS-independent API" really means.

Starting with .NET 1.0, Microsoft has continually made the assumption that the less unmanaged code they had in their implementation of .NET, the better. This is best evidenced on this web page - called "Is .NET a Win32 Wrapper?"

In reality, an OS-independent API does not have to be entirely OS-independent. Only the API - the part that the programmer sees - is OS-independent, hence "OS-independent API". The implementation need not be OS-independent, and should not be.

The developer does not care how many unmanaged calls are happening behind the scenes. The only thing the developer cares about is the API, because the only thing the developer sees is the API. As long as the API is OS-independent, the implementation of the API does not matter.

So why is Microsoft reinventing the wheel by reimplementing basic controls like buttons in Windows Forms, and then again in WPF? Why not just create a thin wrapper around Windows API, like SWT? (SWT, by the way, is a thin Java wrapper around standard OS controls like Button, TextBox, etc.)

Right now, .NET is completely lacking a thin wrapper for Win32 API. WinForms and WPF are both thick wrappers. They only call the Windows API for extremely low-level tasks like GDI. They are more like Java Swing than SWT. The trouble is, when you build a thick wrapper, you inevitably run into performance issues and UI inconsistencies. You're also reinventing the wheel, often unnecessarily.

Another issue you run into when building a thick wrapper is size. SWT is 2 MB (small enough to fit into the L2 cache of a Core 2 processor!) because it's a thin wrapper. You also have the issue of maintainability: a thick wrapper is more complex and therefore harder to maintain than a thin wrapper.

Sure, there are advantages to thick wrappers. I'm not sure exactly what they are, but there probably are some. However, developers often prefer simple, clean, and small applications. And so do users. So, Microsoft, where is the SWT for .NET?

It was 2002. I had just finished developing Dacris Benchmarks 4.9 using pure Win32 API. I was proud of myself. It was the first 100% Windows API application I had developed. No more Borland OWL crutches. It was a clean start. The application went on to become a phenomenal success. But something was not quite right in the land of Windows development. A major new player was just entering the arena. Its name was ".NET", previously known as NGWS, and it promised to change everything.

From the beginning it was clear that this .NET thing was not going to be popular right away. It was a gigantic change at a time when the world was still trying to recover from the collapse of the dot-com bubble. It was, furthermore, a behemoth in the days when broadband Internet was still a rare commodity. Weighing in at a hefty 23 MB, the .NET redistributable was just too much of a penalty to pay for the convenience of developing "managed" applications with a truly object-oriented language.

From the developer's perspective, .NET was amazing from day one. Sure it still had some kinks which ultimately led me to develop NetXP, but as a development paradigm it completely overshadowed the archaic Windows API. It was a dream come true - garbage collection, Windows Forms, remoting, and a whole bunch of other goodies.

.NET immediately took off on the web. Within one year, nearly every major company was developing ASP.NET web apps with .NET 1.1. The release of Windows Server 2003 only served to accelerate that trend even further. .NET web development soon reached a frenzy as the advantages of ASP.NET over other technologies (PHP, JSP) became evident.

However, something was wrong on the desktop. Three years after .NET came out, virtually no .NET desktop applications were being developed. The reason? Most ISVs, especially the small ones, saw the gigantic size of the .NET framework and the support headache associated with its deployment as a major roadblock to adoption. Even though .NET was great for developers, it was not so great for end users.

The fact that Windows XP SP2 and SP3 did not include the .NET Framework only made the situation worse. For most ISVs, it was clear that if they wanted to develop Windows apps, they would have to continue using Windows API, until something better came along.

Well, something better finally did come along in 2007. It was called .NET 3.0 (or WinFX), and it was embedded in Windows Vista. Suddenly, the deployment obstacle to .NET adoption was removed. Now, there was really no reason for ISVs not to adopt .NET. Or was there?

The reason was one word: "Vista." This word soon came to be reviled among the Windows community. Nobody wanted to touch Vista with a ten-foot pole. The truth is, Vista was plagued with problems for at least a year after its RTM. Finally, in 2008, the initial Vista problems started getting resolved and users started adopting Vista at a more rapid pace.

Today, there is a two-word reason why .NET adoption on the desktop finally makes sense: "Windows 7." Windows 7, which includes .NET 3.5 by default, is leaner and meaner than its predecessor. Every PC that can run Vista can run Windows 7 and do so with better performance. In a few months, the combined market share of Windows 7 and Windows Vista will exceed 35%. It's practically there right now.

From an ISV's perspective, however, it is not only market share that counts. It is also the value per customer within that segment of the market. For example, a Mac user typically has 4 times more value than a Windows user because Mac users tend to buy applications more readily than Windows users. Now when it comes to Windows XP versus Windows Vista/7, the Windows XP user at this point is basically stuck in the stone age. The odds of a Windows XP user purchasing a new application are much lower than the odds of a Windows Vista/7 user purchasing a new application. The Windows XP user generally runs old applications on old hardware, and is very conservative when it comes to making new purchases. The result is that the value of a Windows XP user is (sorry XP users) generally lower than the value of a Windows Vista/7 user from the point of view of an ISV.

Anyway, to make a long story short, despite a market share of "only" 35%, Windows Vista/7 users are now actually a more important market for ISVs than Windows XP users. This is only now starting to happen, after about 8 years of XP dominance.

What does this mean for ISVs and the software industry as a whole? It means that .NET will finally be adopted on the desktop. .NET makes development much easier, there is no question about that. However, for a long time there was a question about whether Microsoft would embrace or at least continue to support .NET. That question has finally been answered. .NET is here to stay and the future for Windows applications is .NET. Windows API has finally come to the end of its life. It's an exciting time to be a Windows developer.

OK, remember this article?
"Imminent Stock Market Crash"

On August 24, I warned that a stock market crash is "imminent" and that the "coming weeks" would be "turbulent to say the least."

Well, I was wrong.

The market did dip on August 28 and fell a few hundred points but has since rallied to a new 2009 high.

Where did I go wrong?

I got the timing wrong. That's all. The crash is still coming. The Dow is still going to 2000.

At this point, I think the Dow will probably reach 11,000 before the crash begins. The peak will come in October.

Only suckers are buying now.

That's all I'm going to say.

I want to draw your attention away from the talking heads on CNN/FOX/CNBC (who are all shouting "recovery") and toward a recent video by TheModernMystic:



Apparently, M3 - a measure of US money supply - has been declining now for over a year.
Credit as well as money has been declining at an annual rate of at least 5%!
In other words, we are in deflation (in the US) since March of 2008.

Banks are being paid to hold money in reserve and NOT lend. Why is the Fed doing this?
Could it be that China now has enough power over US monetary policy to prevent inflation (and thus devaluation of their dollar assets)?

Additionally, consumer attitudes toward credit & spending have changed dramatically. This has been pointed out by Mish on his blog many times.
High & rising unemployment has forced people to save (US savings rate now 7%) and has driven salaries lower (people taking 30%-50% pay cuts).

The big question is whether deflation can/will continue.
I believe that it can, and it will. It all has to do with what is in the interest of those who control the money supply.

Let's look at it this way. If you're a bank, and you've given out $5 billion in loans,
you would ideally want to be paid back in full (with interest) on those loans. What happens if there is a sudden 50% inflation?
You get 50% less than what you gave out in loans. That is, you are not paid in full, because the dollar has lost 50% of its value.
So, given this reality, you would ideally want the dollar to maintain its purchasing power or even gain in purchasing power.
In other words, the ideal condition for banks (and other lenders) is deflation!

Now, let's look at China. China has at least $1 trillion in US bonds. They've lent out $1 trillion to the US. They would ideally
want to be paid back in strong dollars so that they can purchase US assets on the cheap. They want to maximize the bang for their buck!
China wants deflation. How much control does China have over US monetary policy? I would argue that, since they are the biggest exporter to the US
and the biggest supplier of cheap labour to US companies, they have at least a tangible influence over what Ben Bernanke decides to do at the Fed.

Clearly, US banks and China want deflation. The US government, however, wants inflation because they have no way of paying their gigantic debt burden.
How much say does the US government have in monetary policy? None. That is just a fact. The Federal Reserve is a private institution, independent of the
US government. The US government has no control over monetary policy. No matter how much inflation they want, they aren't in charge of the printing press.

Now a clearer picture starts to emerge. The picture is a little shocking for those who have been led to believe that the US dollar is headed for hyperinflation.
The picture shows what is likely to happen for the next 5-10 years, and it ain't pretty. The US dollar is likely to maintain its purchasing power or even gain
purchasing power. What is likely to unfold is another depression, similar in magnitude and character to the Great Depression. Prices of all non-essential items
will fall or remain stagnant. Wages will fall or remain stagnant. The stock market & real estate market will collapse.

So what can you do to come out ahead? First, if you have a job and can save some money, save it in gold. Have enough dollars to get by on for a few weeks but
beyond that all savings should be in gold. Why gold? Gold maintains its purchasing power. The likelihood that the dollar will gain significantly in purchasing
power is very low, simply because it's a fiat currency - its supply can be increased arbitrarily. Even if the dollar does not inflate over the coming years, you
will not have lost anything by owning gold, because gold never loses its value. Additionally, gold has no counterparty risk. It's not a loan or a promise to pay.

Secondly, get out of stocks and real estate. Real estate prices are going to continue to collapse. The Dow will go to 2000. Real estate will probably go back to
1980s price levels - $100,000 for a house. The time to buy these assets for the long haul will be in 3-5 years when the lows have been hit. However, these assets
will not perform well for the next 10+ years, so you have plenty of time to wait before getting back into "the market."

Third, bonds are going to be problematic. In a deflationary depression, first comes the stock collapse, then the bond collapse. The bond market collapse will be
far more painful than the stock market collapse. US treasury bonds are in a bubble. Bonds are the last thing to peak after a speculative mania. 0% yields are not
sustainable for more than 2 or 3 years. I've said it before and I'll say it again: owning US treasuries now is like owning dot-com stocks in 1999.

Finally, consider owning some silver. It's more risky than gold but has the potential for higher returns over the long term. Silver outperformed gold from 1932
to 1979 by a significant margin. If gold is your rainy-day fund, silver is your 401k. Regardless of whether there is inflation or not, silver will gain in value
relative to every other asset. That's what's important.

Again, let me emphasize that the inflation/deflation debate has no bearing on whether precious metals will continue to gain in value over the coming decades.
That question is answered by looking at supply & demand over the long term. The same goes for stocks, bonds, and real estate. What matters is the relative
performance of one asset compared to another.

The future of the dollar only concerns those who hold dollars and those who owe dollars. It concerns China and US banks. They wish for deflation.
The Federal Reserve, being in bed with US banks like Goldman Sachs, will probably grant them that wish. The US government will probably continue to borrow and hope for inflation. They will probably just default, like Russia in 1997.

Here are some stories I found very interesting:

Rich people panic over new IRS rules
"2 million" march in Washington, DC
Barrick Gold will cut its short position in gold

My comments:

The first story explains the rise in the gold price. If companies can't keep dollar-denominated assets in foreign offshore bank accounts, they will just move those assets into gold in undisclosed locations. If it can't be audited, it can't be taxed. Problem solved.

Barrick Gold is reducing its short position in gold, which it has been keeping for at least the past 5 years. This is short-term very bullish for gold. In addition to this, many central banks have stopped selling gold and China wants to get out of the dollar.

If you are a gold investor, I think it's time to seriously consider "selling the news" after buying the rumour for the past 10 years. This gold bull market is about to come to an end, or at least cool off for the next 3 years. Take advantage of the big gold rally coming this fall to liquidate some longs.

Update:

I have to comment on the Washington march story, because apparently there were nowhere near 2 million people at the march. Regardless of how many people there were, the fact that many signs praised FOX News is a giveaway that this rally was staged by FOX News and its minions. Edit: BBC confirms "tens of thousands" attended the protest, not millions.

Sadly, a legitimate point of view about the importance of the US constitution has been hijacked and turned into a freak show of uninformed "morans" who can't even put together a coherent thought. It's a fake revolution. All efforts toward an intelligent debate about the role of the US constitution have been stifled by the controlled corporate media.

I'm still waiting for the REAL revolution.

Article:
Infowars.com - Twenty Minutes with the President

Some 9/11 smoking guns:

1. NORAD standing down
2. Operation Northwoods
3. Memo on "Bin Laden determined to attack inside US"
4. Saudis flown out while nobody else could fly
   
5. PNAC
6. Blacking out of "Saudi Arabia" in 9/11 [C]omission Report
7. Omission of Building 7 in 9/11 [C]omission Report
8. WTC buildings falling down at free-fall speed
9. Larry Silverstein insurance policy & "pull it" comment
10. Record level of put options on airlines prior to 9/11
11. Giuliani knowing WTC was going to collapse
12. BBC knowing that Building 7 was going to collapse before it actually did
13. Bin Laden was a CIA asset, known as Tim Osman

Time to wake up!

Article: Up to $3,800 fine for failure to get health insurance

"WASHINGTON (AP) - A top senator is calling for fines of up to $3,800 on families who fail to get medical insurance after a health care overhaul goes into effect."
...
"The plan from Democratic Sen. Max Baucus of Montana would make health insurance mandatory, just like auto coverage."


I'm not going to comment too much other than to say that this just another example of fascism in the US. Public-private partnerships. Government subsidizing private industry. And guess who gets stuck with the bill? The dumbed-down American people, that's who.

The American people lost their country in 1913, when the government took over the financial industry via the Federal Reserve and declared a monopoly on money creation. The US at that point became a fascist state. Ever since 1913, America has been nothing but a banana republic, ruled by brute force rather than law.

I will leave you with this alleged quote from Woodrow Wilson:

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men." -Woodrow Wilson, after signing the Federal Reserve into existence

I'm going to get a little more personal in this post and tell you all about my latest insights into life. Seems like while everyone is starting school again, I'm here looking for work trying to forge a new path into an uncertain (and increasingly bleak) future.

I graduated from Waterloo Software Engineering in June with no job, and no idea what to do with my life. That much hasn't changed -- yet. But what has changed is my level of knowledge of the so-called "real world."

A major economic depression started in 2008, along with a gigantic paradigm shift in people's attitudes towards spending. Regardless of why or how that shift happened, it's now certain that it happened and it won't be reversed. It's here to stay. How did this affect me personally? Well, the place I was working at before I graduated basically went into a hiring freeze in November, 2008 and so I lost the full-time job I may have been offered otherwise. I ended up graduating without a job.

Following an enlightening trip to Romania, where I witnessed some rather spectacular things which I might describe in more detail in a future post, I came back with a somewhat revised outlook on life. Specifically, I realized that in order to make it in the "real world" I had to be far more easy-going and roll with the punches as it were.

I'm gaining even more insights every day. It's as if years of uncertainty are finally meshing into a coherent mass of wisdom. It's hard to describe, but it's as if the hormonal fog through which I was trying to navigate during my teenage years is finally lifting. So I will now share with you some of the pearls of wisdom that have formed inside my brain recently.

1. Reality is Negotiable
There's a lot more flexibility in everything than you might at first believe there is. An example of this is with respect to lifestyle. It's amazing to me how people in Romania can live on as little as 500 euros per month and afford all the modern aspects of American life, including cell phones, cars, travel, and of course lots of alcohol & partying. There's flexibility wherever you choose to look for it. Never be afraid to negotiate. You have nothing to lose.

2. Eliminate Expectations
When I started university in 2004, I had some pretty lofty ideals of what my life would be like after graduation. I envisioned a steady income of $60,000 or more per year, I saw myself driving a European car, living in a stylish condo downtown, and being able to travel to interesting places. Of course, I still have those visions. I still want that lifestyle, but I've come to terms with the fact that I probably won't have it for many more years to come, if ever. The party is over. What I've found is that if life does not match your expectations, you'll be unhappy. Happiness is often found when you eliminate expectations as they relate to status, wealth, and other materialistic desires. The frugal lifestyle doesn't have to be a depressing lifestyle. It's just different. It's still life.

3. Take Advantage of Black Swans
Building on wisdom from the "Black Swan," there can be both positive black swans and negative black swans. Try to minimize your exposure to negative black swans but maximize your exposure to positive black swans. They say that luck favors the well-prepared. Take risks whenever you have little to lose and much to gain. Go all-in on a good hand, to use a poker analogy. It's extremely important, and I can't stress this enough. It is extremely important to recognize the situations where you have nothing to lose and something to gain. A lot of businesses fail because they focus too much time on reducing minute losses instead of actively looking for large gains.

4. Disarm Weaknesses
The most uncomfortable (i.e. scary) things are the things from which you'll learn the most. As a well-known philosopher once said, "do something that scares you everyday." Recognize what scares you the most, and approach it, confront it, and disarm it. Not only that, but why not go on and master it? Why let fears be your master, when you can master your fears? Talk about the things you'd rather not talk about. The only way to grow is by recognizing your insecurities and disarming them. By "disarming," I mean dealing with them in any way you feel is most efficient. Don't try to become a master in something you have no interest in. But just recognize what it is that makes you uncomfortable and find a way to disarm it. If you're afraid of dogs, recognize that fact (stop denying it), and disarm it by exposing yourself to that which you fear.

5. Stop Seeking External Validation
The world is a brutal place. Nobody is going to appreciate you, hold your hand, or treat you in a special way just because you think you're special. A lot of people have incredibly fragile egos which are based purely around what other people think of them. Some will go as far as to create false impressions, manage their public appearance, and hide any weaknesses that they might have. This is suicide. If you do this, you might as well kill yourself because the same objective is achieved - your personal life, your life as an individual, ends at that point. Recognize situations where you are seeking validation and disarm those situations. Your self-esteem should not be dependent on what others think of you. Try to humiliate yourself at least once a day.

6. Loss of Control is an Illusion
Control freaks will often run into situations in which they feel that they have no control, and typically they will feel very uncomfortable -- even terrified. The loss of control may feel complete, but it's not. Typically, in an unfamiliar situation you feel the most sense of "loss of control." Again, you have more control than you think. So just chill. If you think more deeply you'll realize just how much control you actually have.

7. Always Test Assumptions
I have to give credit to the author of "The 4-Hour Workweek" for this golden piece of advice. Left-brained people always love to read books and follow prescriptions (instructions) for everything. I hate this approach, because I have to know WHY a certain step has to be taken, and what the alternatives are. I guess that's why I'm an engineer. But really, following assumptions (blindly) is akin to following a religion. Also, just because an assumption is socially prevalent doesn't mean it's right. It's often easy to overlook this reality and say that, well, the masses are always right. The masses are seldom right. And even if they were, what does it matter to you? You should be looking at assumptions as if they were hypotheses, and try to test them by experimentation.

8. Only You Can Establish Boundaries
People seldom establish their own boundaries. Sad but true. There are many boundary-pushers out there. These are the bullies of middle school, the bosses that belittle their employees, the abusive girlfriends or boyfriends, the students who tease the inexperienced supply teacher, the children who bankrupt their parents. If you do not assert your boundaries, people will assume that there are no boundaries there. I've had experience with this all my life and I always hate it when my personal boundaries are violated, and I make it clear that it's not cool. You have to be willing to say "no," in a reasonable way and be prepared to make enemies. That's life.

9. Ignore the Inconsequential
There's far too much information (and entertainment) in the world today. A lot of it is totally inconsequential relative to your own life. A lot of it is a complete waste of time. You can spend a lot of time worrying about minutiae. I've been there. I know what it's like. A lot of people with OCD probably know what I'm talking about. Spending countless hours doing something totally meaningless because you don't want to get started on that massive Anthropology assignment. You just sit there surfing the net aimlessly. You don't even go out, you don't do anything productive. Procrastinators actually have a form of OCD. Worrying about a major undertaking is pretty normal, but just don't let it consume too much of your time.

Why 9 points? I like 9. It's a very complete number. It's the highest single-digit number. How many 9s are there from 1 to 100? Google it, I won't give you the answer. I won't hold your hand. Nobody will. It's time to grow up and do things on your own. Just like you have in the past.

The next 10 years of my life will certainly be more fun than the last 10 years of my life. Maybe it's time to say goodbye to this lost decade for good. It's time to embrace the real world, free of school, free of the left-brain prison where you must accept assumptions and regurgitate them on command. It's time to enter an enlightened state of mind.

Fascinating video:

"Cut My Pay" Nonsense

Inquiring minds may want to read the following article:
Cut my pay... please! - CNN Money

Apparently workers in the US are taking 30-50% cuts in salary in order to get jobs. This is grim, folks. Really grim.

"Rebecca Eason, who used to make a comfortable $33,000-a-year living in Tennessee."

Hmm... $33,000 was a comfortable living? I wonder how that's possible. If you just take rent, add food and electricity, and sprinkle a dash of transportation costs on top of all that, you can easily get up to $1800 a month in living expenses! Now suppose you want your "comfortable" lifestyle to include some savings for retirement ($400 a month), plus a few nights out ($100 a month), a small vacation ($300 a month) and a very limited clothing budget ($200 a month) and you get to $2800 a month necessary for a comfortable lifestyle. $33,600 in annual cost. Assuming a very modest tax rate of 15%, you would need almost $40,000 for a comfortable lifestyle.

But now Rebecca isn't even making $33,000. Apparently she's making $18,000/yr in a temporary position! You can't even survive on that kind of salary. Or if you do, it's in a very compromised lifestyle. The economic situation in the US must be extremely dire for people to resort to such madness!

Downsizing of the American Lifestyle

It's now become quite clear that the American dream is finished. The US is rapidly devolving into a third-world country. That has been the plan all along, at least since the 1970s when manufacturing jobs started moving to China. Slowly, the US became a hollowed out consumer-driven "service" economy (in reality, the vast majority of wealth was concentrated in the financial sector, which was just a money-laundering front for the arms & drug trade).

But no matter how it happened, it's clear that the American lifestyle has been downsized. In the 1960s, the average salary for 2 years was enough to afford a house. Now, it takes at least 6 years worth of the average salary to buy a house. The real wage has declined to a third of what it was in the 1960s! No wonder it takes 3 salaries nowadays to support a household!

The average CEO makes up to 500 times what the average worker makes. The difference was 10 times smaller in 1980! Times have changed. The rich have gotten richer while the poor have gotten poorer.

Power Corrupts: US as the Lone Superpower

The only reason why US society was so equitable, just, and civilized 30+ years ago, post World War II, was because of the cold war. The cold war was the main reason why the US maintained such an elevated standard of living for its citizens. Social decline could not happen in the US, as it would immediately show the "weakness" of the capitalist system and, as a result, give credence to the socialist system. As long as these two rival systems fought for supremacy, the US had to maintain an image of prosperity and fairness.

The Soviet Union collapsed in 1991 for economic reasons, and since then the US has been the lone superpower in the world. As the old saying goes, power corrupts. No longer charged with maintaining an image of prosperity, the US gradually declined into a society of poverty and inequality, which is the typical outcome of a capitalist system. Capital concentrates increasingly into the hands of the few, the well-connected, the corrupt few who have absolutely no morals and total self-interest. Power begets power. Money begets more money. Influence begets more influence.

To give credence to this theory all you have to do is look at the evidence: the decline in US standard of living from 1969 (the peak of US-Soviet rivalry as exemplified by the moon landing) to today. Nothing could be clearer than the steady downward trend in real wages and upward trend in income inequality that started in the 1970s.

The Future: Economic Crisis, Followed by Revolution

The US will follow the path of the Soviet Union in its final decline from its throne of global superpower. The first signs are already occurring. The economic crisis that the US is now seeing is far different from previous recessions. There is a deep, fundamental problem with the US economy that was caused by 30 years of easy credit, corruption, and out-of-control unproductive spending.

This economic crisis will only deepen, and it will deepen as a result of present policies being put in place to "stimulate" the economy. The current policies only serve to increase government spending, expand military operations, and continue the unsustainable American empire. The collapse of Empire America is what is necessary for the US to begin recovery.

There will come a point when Americans will become so sick of the injustice which is currently occurring that they will rise up in a new American revolution. This time, it will be a revolt against every single unconstitutional policy that has served to destroy the foundation upon which America was built. America was once a land of opportunity, and there was great prosperity because the government adhered to the US constitution and was not in bed with giant multinational corporations or hostile faraway nations.

A Look Back

Go back to 1932 and imagine that you saved a year's salary ($600) worth of silver, a total of 2400 oz. Now suppose you did not touch your stash of 2400 oz until 1979, when you decided to sell it all for $30 an ounce. How much money would you have earned?

Answer: $72,000

You could have bought a decent house with that money in 1979. $72,000 was 9 yearly salaries in 1979. Good investment, I'd say.

Now suppose you did the same thing, but with gold. So, you would've bought $600 worth of gold in 1932 (29 oz) and then sold it in 1979 for $800 an ounce. How much would you have pocketed?

Answer: $23,200

OK. Still a decent investment. I mean, that was 3 average salaries back then, but certainly not as good as silver.

Now imagine you did the same thing, but with the Dow Jones Industrial Average, which you would've bought at the rock-bottom price of $40 a share. That's 15 shares. How much would you have gotten for your investment in 1979?

Answer: $13,500

That's still a bit above the average salary. Certainly not as stellar as gold or silver though. And you had to get the market timing exactly right to snap up 15 shares at precisely the all-time low in 1932.

My point should be evident by now. Over a period of 47 years (almost an entire adult life) in the last century, starting in 1932, the best-performing asset class as an investment was silver. The worst-performing was the Dow!

A Multi-Decade Trend is Ending

The last 29 years have been exceptionally good for stock market investors, and exceptionally awful for precious metals investors. This trend will change, just as it has in the past.

Already, the metals have been outperforming the Dow for the past 8 years. However, they are still very cheap by historical standards. Silver is just $0.28 in 1930s dollars, which is close to the actual low of $0.25/oz in 1932.

Even after going up 3-fold in the last 7 years, silver is still undervalued!

The Future Looks Bright for Silver

In 1979, silver hit a high of $50/oz which it has yet to surpass. That high, adjusted for inflation, is $153. However, if I use M3 money supply growth and adjust it for net silver supply growth, I get about $250. Considering that I see gold hitting $5000 and the gold:silver ratio has been as low as 12:1 in the recent past, I don't see why silver can't even go above $400 when the real speculative mania sets in.

Assuming the odds of hitting $8 are about the same as the odds of hitting $500, the midpoint falls around $60/oz. That means, to properly balance out the downside risk & upside potential, the price of silver should be $60/oz right now. That's over 4 times higher than today's actual price.

Warren Buffett, eat your heart out! Silver will likely have incredible returns for the next 40+ years, just as it did from 1932 to 1979. Forget about buying gold. Why not get the best returns? Why not buy silver?

I decided to use the Bank of Canada's Inflation Calculator to see what some prices from 1968 would amount to in today's dollars. I got the 1968 prices from http://www.thepeoplehistory.com/1968.html

The average house in 1968 cost about $15,000. I challenge you to find me a house today (that isn't a dump) that sells for $91,000 (the price given by the Inflation Calculator).
The price of oil in 1968 was about $5 a barrel. Is oil anywhere near $30 today?
Gasoline was 35 cents a gallon (10 cents a litre). Is gas 60 cents a litre today?
A brand-new GM car was $2800 in 1968. Show me ONE new GM vehicle I can purchase for under $17,000 today and I'll buy it.

The CPI is understating inflation (since 1968) by anywhere from 50% to 200%. The CPI should be at least 200, not 114.7.

The consistent understatement of the CPI is causing major problems for savers, retirees, and tax payers. It is essential that this problem be rectified or else the Canadian standard of living will continue to decline.

Bank of Canada, if you keep adjusting the CPI downward (for whatever reason), there will come a time when the CPI will be so out of touch with reality that people will revolt and the corruption that has been going on will become evident for all to see. So I would say it is in your own interest (for the purpose of maintaining credibility) to provide a CPI that is as accurate as possible.

Or maybe I'm just mad that I'm only getting 1.2% interest on my savings account, while the Core CPI as reported by Bank of Canada itself is 1.8%!

Article:
Preparing for the Worst - Robert Kiyosaki

"
The stock market has been going up since March 9, 2009. Talk of "green shoots" fill the air. Yet, in spite of the more positive news, I continue to recommend that people prepare for the worst.
"

He then goes on to outline several reasons why the talk of green shoots is all baloney:

1. Market manipulation, with which I agree 100%. The correlations between the Dow, TSX, and other unrelated indices are just freaky. The mysterious uptick every Friday afternoon just before the close. The signs are there that there's something fishy going on.

2. The Fed caused the problems we are seeing now. I couldn't agree more. The policy of interest rate manipulation by an independent central bank interferes with the free market. This causes all sorts of bubbles and mal-investments leading to a fundamentally weak economy.

3. Demographics. Boomers are retiring, and in the process are becoming more frugal. This is a trend that will continue through the 2010s.

4. Social Security & Medicare are unsustainable and will slowly drive the US into bigger & bigger deficits.

"
Demographics show that we are entering a battle between young and old. I call it the "Age War." The young want to hang onto their money to grow their families, businesses, and wealth. The old want the tax and investment dollars of the young to sustain their old age.

This war is not coming...it is upon us now. This is one of many reasons why I remain cautious and say, "The worst is yet to come."
"

This is all the more reason to get out of the stock market now, while it's still high.

This is an alert that a stock market crash is imminent in the TSX, Dow, and other global stock markets.

Get out now before it's too late! Safety can be found in gold, silver, and bonds.

It is imperative that you take cover now. The coming weeks will be turbulent to say the least. The crash will start Wednesday or Thursday of this week.

Get out of long positions. REPEAT: Get out of long positions! I don't care if you're invested for the long term.

The Dow is going to 2300. It will be a stomach-churning ride if you have any money in the stock market.

Forget all the rosy nonsensical predictions made by Bernanke & gang. The US is in a depression. 34 million are on food stamps. Dow 9500 just doesn't reflect that reality.

The FDIC went bankrupt on August 14, 2009!

You have been warned.

Source: chartoftheday.com

Meanwhile Bernanke is talking about recovery. The same man who never saw this recession coming. Why hasn't he been fired yet?

Abolish the Fed.

Story:
Dow Jones Mulling Sale of its Indexing Business - FOX Business

Did I not say a few months ago that there won't be anymore Dow Jones?

And I quote...

"There will be no Dow Jones anymore. This will be such a spectacular and catastrophic collapse that it will be talked about for GENERATIONS. It will be written about in the HISTORY BOOKS."

- March 9, 2009

Mark my words, there will be no Dow Jones just like there will be no dollar 10 years from now (probably sooner).

Nothing is forever.

China reduces holdings of US debt - BBC
"
China reduced its holdings of US government debt by the largest margin in nearly nine years in June, according to data from the US Treasury.

China holds more US government debt than any other country and cut its holdings of US securities by more that 3% in June, said the BBC's Chris Hogg.

"China has said it would like to establish an alternative to the US dollar as the world's favoured currency for foreign exchange reserves," said our correspondent.
"

Stiglitz sees risk to dollar - Bloomberg
"
The dollar’s role as a good store of value is “questionable” and the currency has a high degree of risk, said Nobel Prize-winning economist Joseph Stiglitz.

“There is a need for a global reserve system,” Stiglitz, a Columbia University economics professor, said at a conference in Bangkok today. Support from countries like China should ensure orderly discussions on a new reserve system, he added.
"

And lastly, a sign of the times... Man Charged For Stealing Railroad Tracks!

So much for green shoots.

Original Article:
The Greenback Effect - NY Times

"
An increase in federal debt can be financed in three ways: borrowing from foreigners, borrowing from our own citizens or, through a roundabout process, printing money. Let’s look at the prospects for each individually — and in combination.

The current account deficit — dollars that we force-feed to the rest of the world and that must then be invested — will be $400 billion or so this year. Assume, in a relatively benign scenario, that all of this is directed by the recipients — China leads the list — to purchases of United States debt. Never mind that this all-Treasuries allocation is no sure thing: some countries may decide that purchasing American stocks, real estate or entire companies makes more sense than soaking up dollar-denominated bonds. Rumblings to that effect have recently increased.

Then take the second element of the scenario — borrowing from our own citizens. Assume that Americans save $500 billion, far above what they’ve saved recently but perhaps consistent with the changing national mood. Finally, assume that these citizens opt to put all their savings into United States Treasuries (partly through intermediaries like banks).

Even with these heroic assumptions, the Treasury will be obliged to find another $900 billion to finance the remainder of the $1.8 trillion of debt it is issuing. Washington’s printing presses will need to work overtime.
"

My Comments:

To say that Warren Buffett's assumptions regarding demand for US treasury notes are optimistic is a MAJOR understatement. You'd have to live in fantasy land to imagine $900 billion in demand for US treasury bonds!

China doesn't want anymore US paper. And it's perfectly understandable. US bonds are currently a non-performing asset, just like US real estate and US stocks. In fact, the whole US stinks. It reeks of poverty and despair. The US lacks prospects for future economic growth. The US consumer, 70% of US GDP, is maxed out and won't be back for at least 20 years. Where am I going with all this? I don't see a single dollar worth of demand for US bonds coming from China.

What about US citizens? They should have some demand for US bonds. How much is a bond yielding these days anyway? 2%? 1%? HA! Even if US citizens HAD savings they surely wouldn't put them in bonds. Sorry Uncle Sam (US). I'm guessing there might be about $200 billion worth of sucker money AT BEST that might make it into bonds.

So, let's see... $1.8 trillion deficit, $200 billion in revenue... That means $1.6 trillion in brand spanking new money, hot off the printing presses! Yikes!

Brace yourselves for inflation.

Since 2007 when I first started tracking the price of gold, I have never been more bullish than I am right now.

Basically, I see no downside risk at all. Back in the fall of 2008, there was VERY STRONG buying pressure when gold fell below $900. I mean, so strong that there were gold shortages everywhere. Even the Indians were buying, and buying more than usual! So I can't possibly imagine gold going below $900 ever again.

According to my own research, the right price of gold is somewhere around 2000 current US dollars. That's where the upside potential equals the downside potential.

Basically, to calculate where the price of gold should top out, take the $850 price it was in January 1980, multiply by the change in money supply, and then multiply by the change in demand and divide by the change in supply. This calculation gives me $4700, using the supply & demand data from 1979.

The supply & demand data is available at Kitco's website, and M3 is available at nowandfutures.com.

Now I already identified $900 as a key support level. So now taking the geometric mean of $900 and $4700 I get just over $2000. That's the price necessary for the downside risk to equal the upside risk. Below that, gold is undervalued. Above that, gold is overvalued.

I'm pretty sure I can even put a date to when gold will go above $1000. Gold will be above $1000 by April of next year (2010). My guess is it will happen well before that date. Probably this summer.

Let the debate begin!

Here's my 3-part YouTube video series:

Part 1

Part 2

Part 3

It was 2001 when I first started developing with Win32 API. Back then, Win32 API was the only way to develop a Windows application. Sure, you could use a variety of different wrappers, including MFC and Borland's OWL. However, the Win32 API was always at the core of the application. This resulted in applications having a very consistent look & feel. Every application looked like it belonged in Windows.

In 2002, a new phenomenon started, called the .NET Framework. The .NET Framework was supposed to be Microsoft's decision to improve developer's lives by replacing C++ with managed code (written in any language). At least that's what I hoped back in 2002. However, from the very beginning it became clear that Microsoft's intent was not to replace Win32 API with .NET but in fact to carry two separate development frameworks, and ultimately to confuse and alienate Windows users and Windows developers.

Let's look at what "mistakes" MS made with .NET that have been causing ongoing pain for Windows developers.

1. Not including .NET in Windows.

Microsoft has an ongoing policy of keeping .NET & Windows separate. For some bizarre reason, Microsoft will not distribute the latest version of .NET with the latest version of Windows. Windows XP SP1 could have included .NET 1.1. It didn't. Windows XP SP2 could have included .NET 2.0. It didn't. .NET should've been a required update from the very beginning. It should've been an inextricable component of Windows, just like IE. Though it's unclear which version of .NET will ship with Windows 7, what is clear is that when a later version is released, Microsoft will make damn sure that users won't even know about it.

2. Not making the Win32 API obsolete.

With Windows Vista, Microsoft could've made all new APIs available only to .NET developers. Why do that? To discourage Win32 API development. To make it clear to developers that .NET is the future. Starting with Vista, Microsoft should've moved all of its innovation into .NET. Instead, they added new features to Win32 API! Features that they didn't add to .NET! In other words, they showed that Win32 API is still the only way to develop Windows applications.

3. Not setting an example.

Microsoft could have migrated all of its apps to .NET. Office 2007 should've been entirely written in .NET. Visual Studio .NET (first version) should've been written in .NET! Microsoft should've set an example, that .NET is the future. Instead, they keep writing apps in MFC or Win32 API. Clearly, MFC and Win32 API is still the future. I challenge you to find any major Microsoft application written in .NET.

4. Reinventing the wheel.

Rather than using native Win32 API controls in .NET WinForms applications, Microsoft instead decided to reinvent the wheel, coding an entire UI toolkit from scratch using managed code. What for? Sun already did that! It's called Java!

The inconsistencies in look & feel in .NET are hideous, but even worse are the inconsistencies in behaviour. .NET 1.1 was notorious for its non-standard controls. It's the reason I developed NetXP. It's the reason why I had to write a gigantic .NET wrapper around Win32 API. .NET itself should've been that wrapper. Here's an exercise: Try popping up a balloon tooltip (a feature of Win32 API in Windows XP) in .NET 1.1.

This is the biggest issue with .NET, and Microsoft still hasn't fixed it. Take the XAML menu for example. It's totally different from the standard WinAPI menu. Even the ClearType looks different in a XAML app! This decision by MS not to enforce OS UI conventions will lead to a wide range of UI variation on Windows, and will ultimately lead developers (and users) away from Windows, and toward Mac or even Linux.

Conclusion - My Message to Microsoft

It's painful to develop apps in Windows API (or MFC) in 2009. You (Microsoft) could've changed that. You had the opportunity, with .NET, to create a new way of programming Windows. You blew it. Until you fix the 4 issues above, I will be programming in Java. Java is everything .NET is and more. Java is cross-platform, free software, and has a wider user base. Why should I limit myself to Windows when the choice I have is between Windows API (a 25-year-old technology) and .NET (a clone of Java that runs only on Windows)?

To those out there who remember Visual Basic, .NET is another Visual Basic. VB was great for RAD (Rapid Application Development). So is .NET. But the problem with VB was that it was non-standard. It didn't wrap the Win32 API well enough. The same is true for .NET. Now, if .NET was going to be cross-platform, I'd understand. But it was never intended to be cross-platform. Microsoft totally blew it with .NET. Developing a Windows application in .NET is as ridiculous as developing a Windows application in Visual Basic.

Windows 7: A Review

By Dan Tohatan

In 1994, Microsoft unveiled a user interface that was truly revolutionary at the time. Code-named "Cairo", it was to become the interface of the new Windows 95 operating system. When Windows 95 came along in July of 1995, the new shell (Windows Explorer) totally surpassed the old Program Manager / File Manager combination, which had been a staple of Windows since Windows 3.0. Windows 95's unparalleled multimedia capabilities became evident very quickly.

I remember how amazed I was when I first saw the Windows 95 boot-up screen, in all its 256-color beauty. Microsoft got it. The world was moving toward true color displays. No longer were UIs going to be boxed into the 16-color (or less) paradigm which had dominated displays since the 1980s. A revolution was beginning, and Windows 95 was going to lead it.

Fast-forward to the present, and a new revolution is beginning. This time, it's a move from bitmapped graphics to vector graphics. It's a move toward 3D-accelerated vector graphics. You can see it in the new Web 2.0 websites out there: smooth gradients, subtle 3D effects, animations, and heavy use of mouse-over events. You could call this the second UI revolution.

Windows Vista was supposed to bring in this new UI revolution. However, Microsoft bit off more than it could chew. Vista over-promised and under-delivered. The result was, as everyone now knows, a total disappointment. Today, almost 3 years after Vista's release, the market share held by Windows Vista is around 25%. The market share held by XP? 60%. What's even worse for Microsoft is that Mac OS X and Linux have been gaining feverishly thanks to Vista's lack of stability and incredibly slow performance.

Windows 7 is what Vista should have been. It is to Windows XP what Windows 95 was to Windows 3.1. I would encourage everyone reading this review to go out and download & install the Windows 7 Release Candidate. I have (so far) only used the OS for a day, and I am extremely impressed.

The most interesting thing about Windows 7 is that it's the first Windows OS to have lower system requirements compared to the previous version. While it has been demonstrated that Windows 7 can be installed on a system with only 512 MB RAM, it's not a realistic requirement if you want to run the latest applications. A system with 1 GB of RAM or more should be able to run Windows 7 at least as fast as it would run Windows XP. Also, while Windows 7 requires 16 GB of free disk space to install, it only ends up using about 9 GB, which is far better than Vista.

I'm going to start this review by looking under the hood - at how the OS performs. One of my biggest problems with Vista is the size of the WinSXS folder. Apparently, in order to solve "DLL hell", Microsoft decided to keep every single version of every DLL forever. Before I installed Windows 7, my Vista SP1 WinSXS folder was 7 GB, with no apps installed. This was after I ran the SP1 clean-up tool. Before that, it was over 10 GB. With Windows 7, it's only 4 GB. Seems MS was able to cut out a whole 3 GB from the WinSXS folder, which is excellent.

Another thing that MS improved with Windows 7 is the speed of shutdown. While boot-up is about the same as Windows Vista, shutdown is noticeably faster. Also, the speed of installation (if you're doing clean install) is much faster than a comparable Vista installation. I remember when I installed Vista that it seemed to take longer than an equivalent XP install. Windows 7 actually installs faster than XP.

I remember with Vista having issues with the TrustedInstaller. It would just start up randomly and my hard drive would start thrashing, and my system would slow to a crawl. Windows 7 seems much more quiet (in terms of hard disk activity) and CPU usage is actually at 0% most of the time! It's incredible how Windows 7  release candidate (not even final release) outperforms Vista so much. The final release will probably be even better.

Moving on to the UI, the first thing you notice about Windows 7 is how much cleaner it is compared to Vista. Gone are the incessant notification popups or the glaring UI inconsistencies that made Windows Vista such a pain to use. UAC is totally gone. In Vista, just about everything you did would pop up a UAC dialog. It was extremely annoying. In Windows 7, the UAC prompts, even where you would obviously expect them (e.g. Task Manager), are totally gone. It's a mystery what MS did here, but it's a really good thing. I really hope that this is permanent and that UAC doesn't come back in the final release.

The other pleasant surprise I had with Windows 7 was that MS added new accessories! This is the first time MS did something like this since (probably) Windows 95! Not only that, but the existing accessories (Wordpad, Paint) have been totally revamped. You will also notice the UI consistency in Windows 7 (versus Vista). Finally, I'm pleased to announce that MS has finally removed the "Install New Font" dialog that still had a Windows 3.0-like UI. This calls for a major celebration! This dialog existed in Windows - unchanged - since 1990! Now it's finally gone!

What I really like about Windows 7 is its new Libraries feature. A library is a special folder that is actually the aggregate of multiple folders. Libraries makes organizing files so much easier. Microsoft also implemented a fairly complete set of filters (or views) for each library. For example, you can view your music by artist or by album. The views are customized to fit each library type. For example, the Music library only has views that are relevant to music.

But it's the small things that make Windows 7 so impressive. For example, when copying files, the progress is shown in the taskbar as the background of the taskbar button, and it updates in real time. So you can just look at the taskbar to see the progress. You no longer have to Alt+Tab. Also, the extensive use of mouse-over effects really adds to the usability of the OS. For example, hovering over a taskbar button shows you a preview of the window that corresponds to that button.

Windows 7 is probably the first Windows OS for which screenshots aren't enough. This is because of the extensive use of mouse-over effects. Screenshots just don't do it justice. When I looked at various screenshots of Windows 7, I thought "what a bad UI design!" But in practice, the UI design is very usable. Not only is it usable - it's fun! This is the first time I'm having fun using Windows since Windows 95!

To conclude, you really have to use it to fully appreciate it. There are many pleasant surprises in this OS. When I switched to Ubuntu back in 2007, I never thought I'd see another version of Windows as great as Windows XP was. Well, it turns out I was wrong. Windows 7 is the new Windows 95. Windows XP was an evolutionary change. Windows 7 is a revolutionary change. Windows 7 leaves its competition in the dust. In the end, Microsoft still gets it.

Mike Shedlock is suggesting that US treasuries are a good buy at this point. Let's see if he's right...

Currently yields are at 4%. If yields drop to 2%, that means the price of 30-year treasuries would be double the current price. Could it happen? Short-term, based on this chart, it sure looks like a possibility.

Short-term (i.e. within the next 12-18 months), the outlook for US treasuries is quite bullish.

But let's look at the longer term. Since 1980, yields on US treasuries have been going down. We have a 29-year unbroken uptrend (bull market) in treasuries (downtrend in yields). The current bull market in treasuries seems just a tad ancient. When this trend finally reverses, look out below.

Fundamentally, you'd be mad to own US treasuries right now. The average rate of inflation in the US since 1971 has been 7% per year. A long-term yield of 4% makes absolutely no sense. Ignoring inflation when buying bonds is like ignoring P/E ratios when buying stocks.

Buying US treasuries now would be like buying dot-com stocks in 1999. Sure it might go up 100% in three months, but if you don't time the trade perfectly you'll be wiped out. You better get the timing exactly right, or else you could lose your money.

By 1999, the US stock market had been in an unbroken uptrend for 16 years. In 2000 the trend finally reversed, and all the suckers that got in after 1997 have yet to make any return on their investments.

Don't be a sucker.

I've taken the time to compile a timeline of global economic stats for 2009. It will be an interesting year. I'm not ready to drink the kool-aid that the worst is over. The worst is yet to come. After a quiet summer, the next leg of the collapse will start at some point in August. I really hope what I say does not come true, because if it does, it will be a living nightmare.

• Unemployment figures (officially) in the US will hit 10% by July. However - the government may massage the figures, keeping them under 10% until late September.
• I'm expecting very little volatility in the markets over the summer, until early August when unemployment figures in the double-digits will be first released. I'm expecting the Dow to continue somewhere between 9000 and 10,000, and gold between $900 and $1000, until at least early August.
  
• Watch out on August 8, 2009. This is exactly a year after the Georgia incident. Russia may again try to attack Europe, in retaliation to growing NATO influence over former Warsaw-pact territory. The men behind the curtain may give Russia the green light, in light of the horrendous economic stats coming out. In other words, to make a quick buck and prevent social unrest, the corrupt banksters may choose to start a third world war.
  
• By fall it will become clear that the world is in total economic collapse. In September, 2009, the Dow will begin to crash violently, along with the US dollar. News will be coming out that US unemployment has just hit 12% and the US economy is expected to contract 15% in 2009.
• From a high of 9000, the Dow will end up at 4000 by November. US treasuries will go into hyperinflation in October, 2009. The entire world will enter a World War II-like state economically starting in October.
  
• In October, 2009 a dangerous new influenza virus begins to spread. It begins by claiming 200-300 lives every day. It is clear that it is a bioweapon, because it is spread by way of covert agents, appearing simultaneously on different continents. By December, this mystery flu is killing 1000-2000 people every single day. It has a kill rate of 40%. This means 40% of people who become infected die. The government encourages vaccination, not knowing that the vaccine also has a kill rate of 40%. It will turn out to be the worst pandemic the world has ever seen.
  
• Somewhere in early October, gold will definitively cross the $1000 barrier while the Dow crosses 4000 on its way down. Shortly after that, the COMEX will be shut down and all markets in the US will be closed. All commodities will be declared illegal. The US will be under full martial law. No person will be allowed to own property, and all land will be seized by the US Federal Government. Movement will be strictly controlled with military checkpoints. UN peacekeeping forces will be deployed worldwide to contain civil unrest.
  
• Although no longer reported, unemployment will continue to climb, reaching 16% by the end of 2009 (by official measures) or 30% according to shadowstats.
• It will not be visible, but the US dollar will reach hyperinflationary collapse by November, 2009. The US dollar will only be exchangeable on the black market. Exchange controls will be in place worldwide. Gold will sell for over $4000 USD on the black market.
• At some point in October, 2009, there will be a concerted effort to take down the Internet. ISPs will be forcefully shut down for allowing "subversive" material to be downloaded. If the attempt is successful, there will be mass riots. 70% of every city's population will be violently protesting. All economic activity will go underground. The Internet may be forced to go underground.
• Be prepared for widespread long-lasting power outages starting in August, 2009. Remember what happened in 2003. It will be similar to that, but it will last longer. Blackouts may end up lasting for weeks. It's quite possible that by the end of 2009, reliable electricity service will be a thing of the past.
• One also needs to prepare for food shortages and shortages of other essential goods. The government and corporations will hoard all food for themselves and possibly give some out in small rations (e.g. you are allowed 3 eggs per month). The blackouts will make it hard for supermarkets to continue operating. The fixed exchange rate and worthless fiat currency will mean that imports & exports will be impossible.
  
• By November, 2009 nearly every country on the planet will have instated a total military draft. Every single citizen will be openly apprehended and forced into either military service or civilian service (forced labour).
• The speed with which all this happens will make "shock & awe" seem like slow motion.

I suggest to everyone (including myself) to prepare for all of these possibilities. What do you do if your city's power goes out for 2 weeks? Or if the Internet is shut down? What if all the local grocery stores close down for 3 weeks? What if all your paper currency becomes worthless, or you're no longer allowed to withdraw money from your bank account? And lastly, what are you gonna do... when they come for you?

Peace. Love. Understanding.
Hope for the best. Prepare for the worst.

It's tax refund time, and my suggestion to you all (especially US citizens) would be to spend 50% of your tax refund on precious metals. Here's a little known fact: The average rate of inflation in the US over the past 40 years has been 7% per year. This means in 10 years you lose half your money.

The case for precious metals as an inflation hedge really doesn't need to be re-stated. But before you get into precious metals, here are some important things to know:

1. The COMEX price means nothing. Be prepared to set your own price.
The COMEX is just one of many markets for precious metals. Other markets are eBay and Craigslist. The COMEX is in fact a very small market. Use the COMEX price (like all other prices) to your advantage. When the COMEX price is the lowest, buy from the COMEX (or from dealers who base their price on the COMEX price). The primary objective here is to always buy low and sell high.

2. For buying, coin shops and bullion dealers are the most reliable & usually the cheapest.
eBay is very expensive these days, mainly because of cash-back. If you're in the US, take advantage of the cash-back offer. Otherwise, forget about eBay. Craigslist rarely has bullion up for sale and if it is, it's usually local pickup and quite expensive (because the seller knows how valuable bullion really is).

3. Always tally up all your costs (shipping, exchange rates, and other fees) before determining price.
It's often easy to forget about shipping costs, customs fees, eBay fees (for selling), or exchange rate arbitrage. Typically, exchange rate arbitrage is 3% of the price (if you're paying in a currency other than your bank's).

4. Always prefer domestic dealers over foreign. But not necessarily local.
There's certainly more risk involved in sending precious metals across international borders. You could be hit with customs fees or run into some kind of draconian restriction on imports. Now, in Canada, if you choose a dealer within your own province, you'll have to pay provincial sales taxes. So it's usually better to buy from dealers outside of your province (or other regional jurisdiction) to avoid taxes.

5. Do not sell anything unless you must.
Given the uncertainty of a fiat monetary system, you never know if something is a bubble or if it's hyperinflation. There's really no way to judge if precious metals have become overvalued. The best exit strategy is to never sell. However, there are those cases where you desperately need some money. In such a case, you are forced to sell. There are also situations where you may find a better investment (e.g. a stock or a piece of property) but don't have enough money to invest in it. In that case, again, you are effectively forced to sell to raise cash.

6. There is such a thing as having too much.
Keep enough cash lying around so that you won't be forced to sell in the event of some minor setback (e.g. losing your job). The problem with selling precious metals is that in many cases you are hit with taxes & fees, on top of the premiums you paid originally to purchase the metals. Therefore, too much buying & selling will cause you to lose all your money.

7. Keep yourself busy.
Sometimes it's tempting to obsess about the daily spot prices or constantly second-guess your investment decisions. To avoid such foolishness, you should keep your mind occupied. Basically, forget about the fact that you have precious metals and go on with your life.

There is another question precious metals investors struggle with, and that is, "Which metals should I buy?" My belief in this regard is that the oldest metals, those that have been money for thousands of years, need to be given priority. You should have a much larger proportion of gold & silver relative to platinum & palladium.

Deciding between platinum & palladium is quite easy. Palladium can be substituted for just about every use of platinum and it's much cheaper. Plus, Russia controls much of the palladium supply, meaning it could create artificial scarcity quite easily, raising prices dramatically. Palladium can be used to produce the cold fusion effect observed in 1989 by Fleischmann & Pons. There's also a growing palladium jewellery market in Asia. I would recommend palladium over platinum any day of the week.

Now, deciding between gold & silver is more tricky. On the one hand, gold is owned by central banks and is therefore more capitalized. It's more liquid & less volatile. The problem with silver is it's a wild ride. If you don't like wild rides, you should keep more gold than silver. However, silver has the potential to go much much much much higher than gold. Silver can be substituted for all other precious metals, and there's less silver bullion out there than gold bullion! So if you want maximum upside, you should go with silver. And because silver is correlated with gold, you won't miss out on gold's upside by owning silver. However, I would recommend holding some gold because of its low volatility. In cases where you need to sell something, you would sell the gold & keep the silver.

Historically, the best performing portfolio is 50% gold, 20% silver, 5% platinum, and 25% palladium. However, it's also very volatile & illiquid because of palladium and not very well exposed to silver. So instead, I would recommend a portfolio of 40% gold, 40% silver, 5% platinum, and 15% palladium.

In the end it's up to you. Remember: DYODD (Do Your Own Due Diligence).

My word is not gospel. Amen.

I love how ignorant people often accuse bearers of bad news of spreading "FUD" (Fear, Uncertainty & Doubt). Let me just address this by saying, FUD is the only way to find truth. It's the only way to learn new things. Were it not for FUD, we'd still believe the Earth is flat. All of science is based on FUD. Ignorance is caused by the absence (or opposite) of FUD.

What's the opposite of FUD anyway? It's gotta be TCB (Trust, Certainty, and Belief). Trust, certainty, and belief are the three fundamental pillars of religion. You must TRUST that the preacher is honest, you must be CERTAIN that there's a God. You must always BELIEVE that there is a God. No questioning. There's no room for FUD in religion.

So let me just finish this by saying, I will ALWAYS promote & encourage FUD. We have too much TCB in this world. Obama and his Wall Street crooks keep spreading TCB about everything. Hope. Faith. Trust. Confidence. I have a better word for it: CONTROL!

Haven't had much time to update the blog lately, but here's my take on the latest events...

• Swine flu: Dry run for martial law. Mexico was on the verge of financial & social collapse. Obama just finished 100 days in office. US treasuries were in trouble. In a prior secret meeting in 2008, the US congress discussed the imminent collapse of US finances by May of 2009. How convenient then to have a "pandemic" at this point. It's a total diversion from more important issues at best, and at worst a pretext for governments to launch full-blown martial law. No more talk about torture or prosecuting Bush admin officials. WHO is at level 5 now. Level 6 means the US government has the authority to apprehend any individual and detain him/her indefinitely and seize his/her property without warrant. This authority was given by a piece of legislation passed in the summer of 2008 which specificially mentions "threat of influenza pandemic" as a potential event that would trigger martial law. All of this is documented on infowars.com.
  
  
• Do not panic, yet: Although governments around the world have full authority now to do whatever they want, it doesn't necessarily mean that they will. Just because I can jump off a bridge doesn't mean I will. At this point, it's a matter of wait & see. In the meantime, we must all do our best to inform our fellow citizens in any way possible that the government is not on our side. The government is owned by individuals who want to see the world's population reduced to 500 million. Does this mean they will? Maybe, maybe not. But their stated intent is clear. It's like living next door to a person who has threatened to kill you. It's only a matter of time.
  
  
• Anthropogenic global warming is a convenient lie: I have to throw this in here because of all the nonsense I keep hearing about anthropogenic global warming. It's false. It's a politically-motivated lie. The world is warming, but your car is not causing it. If anything, we should be putting more CO2 into the atmosphere. Plants need CO2 to grow. Studies have shown that trees grow bigger if their supply of CO2 is greater. The greatest limiting factor on plant growth is lack of CO2. Plants produce oxygen and clean out toxins from the air. If you want to support a greener planet, put more CO2 into the air. Lastly, CO2 is not a pollutant. It's what humans breathe out. Do you want a tax on breathing? Oh right, I forgot, you're a sheep! BAAAAH!

Well I'm done. Not much time to blog these days but I'll be back in about a week with another summary of this kind. I find it fun to rant as long as it's a meaningful rant.

The people who believe the worst is over in terms of real estate are completely delusional.

The people who believe real-estate in Canada will continue to appreciate are lunatics.

The truth is simply this: Real estate prices will go to zero. Capitalism is finished.

Suppose you're looking to buy a shitty-ass single-bedroom apartment for $140,000. First of all, good luck finding such a low-priced apartment. However, if you do, what will your monthly mortgage payment be (supposing you take out a $140,000 mortgage)?

A simple calculation using ING's mortgage calculator yields $740 / month (with 4% interest rate). Let's suppose for simplicity that mortgage payments are 0.5% of an asset's price with today's low interest rates. For instance, if you took out a $140,000 mortgage, you'd be paying $700 / month.

Now let's add utilities, property taxes, and condo fees, totaling $400 / month.

Total now is $1100 / month in the "expenses" category of your balance sheet.

In order to be in the black marginally you need to rent out your apartment at a minimum of $1100 per month. Now, considering that you actually want to make a decent profit, let's say you want to make $400 in profit per month, so let's go for $1500 per month rental cost.

Who in their right mind pays $1500 rent for a shitty-ass single-bedroom apartment? The rent would be more like $600 at best. But if I rented out my apartment at $600 I would be losing $500 every month! Clearly not a good investment.

So how much do real estate prices have to fall before real estate is a profitable investment again? Let's see... Supposing you'd be happy with even $1 in profit per month, we're looking at mortgage payments of $200 per month (maximum). This means the apartment would have to cost $40,000.

Bottom line is real estate prices need to fall into 5 digits again. It's also not impossible for real estate prices to go to zero or negative. Suppose you have a property that costs $500 per month to maintain (not counting mortgage payments) but only returns $400 per month in rent revenue. How much would you sell this for? Wouldn't it make sense for the price to be negative? You would be willing to pay someone to take the property off your hands. This is already happening in Detroit.

The broader reality is that capitalism is finished. Property taxes have eaten away all incentives to own real estate. Unemployment just puts the final nail in the coffin. Banks can lower rates to 0% and it won't do any good. It's over. We are all slaves. The people who own the government now own everything.

APRIL 2009 --
The economic downturn leaves no company unaffected. MSFT is finished.
July, 2008 Bill Gates stepped down. The company will not release one single product
worthy of investigation this year. IE 8 has been surpassed by Mozilla and there is
absolutely nothing MS can do to resurrect IE. The major theme this year will be the
death of Microsoft.

In the open source arena, Linux continues to make advances. At some point this year,
Linux market share will rise dramatically. There may be an event which triggers
a mass migration to Linux on the desktop. My belief is that an amazing software
product comes out which only runs on Linux. People are so drawn to this product that
they are willing to ditch their Windows OS (or at least dual-boot Linux with it). The
product will be intentionally designed NOT to run on Windows.

In the hardware realm, Intel will be going the slow & steady route. AMD is finished.
The video card industry is finished. They've pushed it too far. PSUs can't handle
3 cards in SLI. It's pure madness. NVIDIA will suffer this year, and so will AMD,
because of its ownership of ATI. All graphics card manufacturers will suffer. I don't
think we will see any further advancements this year in graphics hardware.

In addition, the recession means less spending on high-end hardware. Therefore, any
high-end hardware product will drop in price dramatically. Look for deals on top-notch
video cards and super-fast memory. DDR3 will get very cheap, very fast.

I almost missed it - the biggest story this year will be Apple. Specifically, the
iPhone is taking over the world. Those who were slow in adopting blackberries or other
smart mobile devices will now swarm to the iPhone. The iPhone will replace the iPod,
cell phones, digital cameras, video cameras, and many other portable devices. The
iPhone is part of the new iLife trend which is all about unifying mobile devices into
one incredible everyday-life-enhancing device that you can take with you everywhere.

Continuing the trend with the iPhone, it will soon start to replace devices used in
industry. For example, on construction sites, the inclination of the ground will be
measured using an iPhone. In your car, instead of having a real map, an iPhone plus
Google maps will do.

The trend towards minification of laptops (i.e. netbooks & tablets) will merge with
the iPhone trend. The trend is towards a fully portable computer (i.e. a computer you
can carry in your pocket). This computer will be capable of having all sorts of devices
attached to it (as peripheral extensions). It will be a virtual sensor - an extension
of the human senses.

Touch is the biggest trend in terms of UI. Without touch, a screen is nothing. Every
screen is going multi-touch. There will be a shift toward touch-friendly UIs.

In the UI realm, there is a growing trend towards 3D-ization of everything, even the
web. I believe 3D accelerated web browsers are coming soon. Whoever makes the first
move into 3D-accelerated web browsing will become famous. All UIs will be
3D-accelerated. The exact form that this will take remains to be seen. The idea is
that a whole new concept of "3D layout" will need to be developed. Web 2.0 is a first
step in this direction, with its pervasive use of realistic 3D gradients. These will
soon be replaced with real 3D surfaces (perhaps designed with Bezier curves and
ray-traced). Yes - real-time ray tracing. It will be very exciting.

On the topic of ray tracing, I believe ray tracing is slowly going to overtake the
old polygon + projection model that we're all so familiar with. The reason? Ray
tracing lends itself to parallel processing. In particular, photon mapping will soon
be done in real-time and scenes in 3D games will be rendered with photon mapping, for
unbelievably realistic lighting. The photon map will be precomputed for static scenes
to save processing speed. Models (meshes) will be made using Bezier splines, so that
meshes will be totally smooth (no more polygons!). The result will be unbelievably
smooth surfaces. It turns out that with ray tracing, splines (curves) are much easier
to process than polygons! Bottom line - the buzzword (or phrase) these days in
graphics is "real-time ray tracing".

Because ray tracing produces such realistic graphics, I believe we're trending toward
a world where a lot of the images you see as design elements on websites and other UIs
will be ray-traced, either in real time or rendered once and saved as an image. You
can quite easily imagine a building contractor having on their website a ray-traced
image of the inside of a virtual apartment, with such perfect graphics that you would
instantly be amazed. Ray tracing will become the holy grail in graphic design.

The biggest trend rising in 2009 is the use of portable computers for entertainment.
This will grow, over many years. Rather than performance improvements, improvements in
hardware will most likely be focused more on functionality rather than performance.
You're going to start seeing a lot more innovative input & output devices in the
coming years, directed mainly towards entertainment & improving day-to-day life.

Projecting trends into 2010, Apple will dominate the mobile arena. MSFT is history.
In the server & business world, MSFT is being replaced by Linux at a rapid pace. The
ever-present need for standardization means UNIX is becoming the de-facto standard
OS, similar to how HTML became the de-facto standard web presentation language. All
new software is built for Linux or some UNIX variant (like Apple's OSes).

Graphics cards manufacturers will continue to suffer. Integrated graphics comes on
in a big way this year. Intel now manages to capture 90% of graphics performance with
its latest integrated graphics chip + integrated memory controller & DDR3 RAM. The
idea of a separate graphics chip falls by the wayside and soon graphics cards will be
a distant memory of an ancient past. Why have 1 GB of dedicated video RAM when the same
RAM, at the same speed, can be allocated from system RAM? Soon, the GPU + CPU will
merge into one unit, much like the way math co-processors disappeared back in the 1990s.

The biggest trend this year is the realworldization of the virtual world. The idea
of taking the desktop computer outdoors. Custom sensors will become an enormous market.
E.g.: Imagine checking your iPhone's UV sensor when walking out on the beach on a sunny
afternoon. Or imagine connecting your iPhone up to a telescope to align it perfectly
with the moon on a clear night. A whole new computer (the "real world computer") will
appear, for this purpose alone.

2010 is when I believe a "Microsoft" will emerge in the real-world computer realm.
Apple will have competition later this year. I'm not sure who will be that next Bill
Gates but I'm certainly a contender.

In 2010, computers will start to replace books for casual reading. Already the Amazon
Kindle is making huge headlines, but this trend will fully take off only in 2010, when
90% of newspapers go bankrupt and everyone starts reading the news on their new
real-world computer.

In 2010, the support-based software model becomes the only viable business model for
software. The idea is you pay separately for licensing and support/customization. The
idea is that by paying for support you're guaranteed that the company will provide
that support. In other words, many companies lose potential clients because those
clients are afraid that the company might go out of business or that they might release
a new version of the software tomorrow that is fully incompatible with the old version.
This is the nightmare of every IT department. Naturally, business models that make life
easier for IT departments will grow. The idea of "we guarantee that we won't go out of
business" is a very seductive one for any IT department.

The home computer will remain, but it will remain as a sort of appliance where
data can be centralized. Its sole purpose will be the centralization of data. In other
words, it will become more of a server.

What is the future in terms of hardware? By 2011, we should expect 22nm processors
with 4 to 8 cores. Clearly, the trend will be towards parallel computing and more
integration as I believe Intel will finally merge the GPU & CPU into one with its
new "Sandy Bridge" technology which comes out in 2011. This technology will be as
revolutionary for Intel as the "Pentium M" was (which then led to the Core 2).

Intel will rapidly become dominant in the area of graphics, forcing AMD to adopt a
similar strategy of integrating its ATI chips onto its CPUs. This may actually give
AMD a competitive advantage over Intel, because let's face it - Intel's graphics chips
suck compared to ATI. I believe at this point NVIDIA will be begging to be acquired,
and guess who will acquire NVIDIA? Intel!

So the biggest story in 2011 will be the rise of Intel to total domination of the
desktop computing world. On top of that, the trend towards innovative display devices
that started with touch screens will intensify by 2011. I believe we'll see the first
holographic or projective displays in 2011. The idea is the image is projected onto
any surface. Imagine a pen that projects the daily news onto an 8.5x11 piece of paper.

Another example of an innovative input device would be an exercise machine that is
designed to interact with your desktop computer (or game console). For example, a
treadmill that corresponds to a virtual car driving around a city. When you run
faster, the car goes faster. The idea is to turn physical effort into positive UI
feedback, thus producing positive reinforcement and turning people into fitness
junkies.

PC gaming will make a comeback. Game consoles have been slowly replacing PCs when it
comes to gaming. However, I think this trend may actually reverse. People will soon
discover that they can connect their PC to their TV and save the money that they
would otherwise have spent on a game console. Thus, PC-to-TV output devices will
become extremely popular. Also, on your PC you can obtain games for free (via
downloading) and you can obtain an unlimited number of games, and you can even make
your own games. Therefore, I don't believe that PC gaming is dead. In fact, I think
it will come back in a big way, mainly because of the current economic downturn
which I expect to last well into the next decade.

In this article I will attempt to explain why this is not 1929, and why it will get worse.
Economically, America is on a path toward certain death, if it's not already dead.
The only thing that can revive America is a revolution and a new declaration of independence.

Anyway, let's explore the reasons why it's worse than 1929:

1. The US is a military superpower
   How is this bad? The US is totally dependent on continuing its military dominance over the rest of the world. It forces countries to accept T-bills at gunpoint. Any slight weakness or decline in this military dominance spells disaster. It would lead to hyperinflation and shortages of just about everything. The US imports more oil than any other country. The US economy is heavily reliant on imports, mainly of oil and drugs. These imports usually come from hostile regimes like Iraq, Iran, and Afghanistan.
   
2. The US produces nothing
   There was a time when the US was a leading producer in the world. It produced automobiles, commodities, and other tangible products. However, partly because of rising taxes, these days hardly anything is produced in the US. Why do that when it's so much cheaper to produce it in China and import it? Of course, when the US was a producer, people had jobs. With jobs, people were able to save, invest, spend, and thus contribute to the growth of the US economy. Nowadays, the only jobs left are government jobs, and the US produces only fiat currency, which is worth nothing.
3. The US Federal Government is gigantic and wants more
   Income taxes are rising. They are already higher than in many of the developed nations (including Canada!). Property taxes are high and rising. The reasons why house prices are falling are two-fold: first, there are no more jobs and therefore rent income has diminished. But also, property taxes are still as high as they were in 2006 if not higher, and certainly rising. So what you have now is houses with negative earnings, selling for $1 on eBay!
4. The US dollar is worthless
   In 1971, Nixon removed any ties between the US dollar and gold. In 1929, the US dollar was still backed by gold. Today, it's backed by nothing. In the absence of a stable currency, all economic activity in the US is distorted, unpredictable, and volatile. Speculation runs wild, and everyone makes miscalculations and misallocations of capital while the Federal Reserve quietly manipulates the markets. The result: through repeated cycles of inflation & deflation, the private Federal Reserve takes ownership of all property and the people are left homeless.
5. Auto workers no longer make $5 a day
   Just to give you an idea of what it was like in 1920s America, Henry Ford established the $5 per day "efficiency" wage. In today's money, this would be equivalent to about $500 per day (or $120,000 per year). This was way above the average, but Ford believed that it would motivate employees and lead to increased productivity. This is the polar opposite of what most employers are doing these days (i.e. slashing wages in every possible way).
6. Farming has disappeared from America
   Back in the 1930s, many people moved back to the countryside where they could live off the land. Nowadays, most people are crammed into cities where everything is 100% dependent on reliable supplies of goods from overseas. If those supplies are interrupted for any period of time, chaos will break out. Just imagine what it would be like in a major city without electricity for 2 weeks.

We need to stop comparing the present situation to the 1930s. Things today are very different, and much more perilous. We are treading through unprecedented historical territory. As I see it, Americans need to reverse the 6 things I listed above. Otherwise, the US is headed for disaster. I believe that, at this point, the US government has become so totalitarian and so unconcerned with the will of the people that only a revolution (i.e. a total overthrow of the government & return to the constitution) would affect any change.

To put things more clearly, the states need to remove their support for the federal government by seceding from the union, citing the 10th amendment.

Stumbled upon this:



In the words of Jordan Maxwell, someone better wake up & do their homework!

The proud reassertion of nationalism shown in Moldova this week marks the end for the New World Order.

You cannot suppress nations and divide them up with arbitrary borders. You cannot erase national history.

The elections were not the object of protest in Moldova. The protest was in fact a call for reunion of two Romanian countries: Romania and Moldova. It was a reassertion of nationalism.

Much like North & South Korea, Romania & Moldova used to be one & the same, until they were divided (quite arbitrarily) under the USSR.

This is why "one world government" will never work. You cannot kill nations, and you cannot kill individualism. You might as well try to extinguish the sun.

Need I say more??

Here's a scary story. This is how hyperinflation (defined here as >20% per year or the doubling of prices in 4 years, as measured by the gold price) has crept up on Canadians over the past 2 years.

It was the summer of 2007. Gold was below $700 US. The Canadian dollar was reaching parity with the US dollar. Thus gold was around $700 Canadian.

Gold shot up through the fall of 2007 until November, when it reached $800 Canadian. The Canadian dollar was stronger than the US dollar!

Through March of 2008, gold was on the rise. Price in March? $1000 Canadian. The Canadian dollar was still close to parity.

Through the summer of 2008, not much change. Still $1000. Then came the great devaluation. The crash of August, 2008.

Gold fell precipitously. But the Canadian dollar was now far below the US dollar. So, in Canadian dollars, gold was still around $900. (At the worst of the Great Collapse in Everything that was the fall of 2008)

Then, gold quickly shot up through $1000. By January 2009, it was $1100.

Today, it's just over $1200.

So the Canadian dollar inflated 71% in 18 months! That's 43% inflation per year!

Still waiting for a correction to buy gold?

What's more is that central banks still haven't raised interest rates!! They're all expecting deflation! What a bunch of fools! Now is the time to take advantage of the greatest contrarian trade in the history of the world. Short currencies and buy gold.

To put a final nail in the coffin of the "fiat currency deflation" argument:

Japan's so-called deflation - the only example of a fiat deflation - lasted 3 years and had a maximum annual decline in the CPI of just 1%.

If we define inflation as the rise in CPI, within a margin of error of 1%, then Japan had absolutely NO deflation.

Of course, there have been short-term periods of deflation in just about every fiat currency. For instance, the year 1970 in the US was a major deflationary year. However, I'm talking here about periods longer than 2 years (length of your average recession). I'm talking about 4 years or more of deflation. There's never been such a case. Not even in Japan.

So again, one only needs to adjust the definition of inflation slightly to mean "net inflation over a period of 4 or more years" to state confidently that all fiat currencies have always inflated.

And what exactly is inflation? The way I define inflation is "a rise in consumer prices without a corresponding change in supply & demand."

Deflation would be the opposite: "a fall in consumer prices without a corresponding change in supply & demand."

The latter part is critical, because prices rise & fall all the time due to supply & demand imbalances. However, when you have the same supply and the same demand and prices are rising, it can only be because there are more dollars with which to denominate the price.

So knowing all this, what would you rather prepare for? Inflation, or deflation? If you say deflation then you're probably also preparing for the second coming of Jesus Christ and you probably already have a bunker set up in preparation for the 2012 arrival of Planet X.

I've been reading Mike Shedlock's financial blog for a while now, mainly to have a contrarian view to the inflationary perspective that the US dollar will collapse.

He posts great news and analysis and always very timely. His deflation thesis always seemed rather bizarre to me. I mean, here you have the US dollar - a fiat currency - and yet his thesis is that because of debt destruction, we're going to see deflation in the US and a rise of the US dollar. Also strange because no fiat currency has ever deflated for more than a few months. Look it up. Prove me wrong.

Anyway, for a long time I gave him the benefit of the doubt, mainly because his arguments all seemed so compelling. But here's what he posted in an article yesterday:

"Hyperinflation?

No, this madness is nowhere close to causing hyperinflation. You do not get hyperinflation with this much consumer and corporate debt when unemployment is soaring globally, overcapacity is rampant, and wages are falling. Please see Fiat World Mathematical Model for more details."

Well, he's finally lost it. There is NO way I'm going to agree with that argument. That sounds more like something Jim Cramer might say on CNBC. Here's why...

In the history of the world, there have been MANY recorded incidents of hyperinflation occurring precisely at moments when there was "overcapacity" in the economy, huge indebtedness, soaring unemployment, and falling wages.

Look at Zimbabwe. How many people have jobs there? How many people can actually spend money on anything but the most basic necessities of life? Yet there's hyperinflation.

Mish, you have totally lost your credibility with this one argument. Maybe it was an honest mistake. Maybe a moment of total absent-minded foolishness. But if your entire thesis of deflation relies on this argument, then you are just plain wrong.

The bottom line is, the value of a currency has little to do with economic fundamentals. If the US dollar went down 50% tomorrow (i.e. prices doubled), you'd say consumers went on an insane over-the-top shopping spree. Maybe Obama finally gave the PEOPLE a stimulus package. But you'd be wrong. The dollar could depreciate 50% without ANY FUNDAMENTAL CHANGE in the economy! This is very important to understand.

For example, you might have salaries $27,000 one day and $32,000 the next. Gas would also go from $2.70 a gallon one day to $3.70 the next. If you were Mish, you would argue, "consumers just got a raise and so they're spending more!" Or, "there's a glut of savings!" In reality, what happened is consumers got a PAY CUT! REAL wages went down. Savings didn't change. The dollar just depreciated nearly 40%. That's what happened.

This depreciation of the dollar thing is very hard to understand intuitively, because it's a complex mass-psychology phenomenon, and because it has never happened in the United States. But it will happen. It's not a matter "if" but "when". All fiat currencies in the history of the world have eventually become worthless. The question is, are you prepared for this eventuality? What good is the FDIC if you have $100,000 in the bank and the minimum wage is $50,000 an hour?

I consider the possibility of hyperinflation in a fiat regime to be far more likely (by a factor of 100) than the possibility of a sustained multi-year deflation. I'm much more in agreement now with Peter Schiff than Mike Shedlock.

It seems that these days every company out there is losing earnings. However, there are some companies that are still making money and will make even more money in the future. These are companies that have restricted themselves to local markets, produce real stuff, and as a result are mainly unaffected by global financial collapse.

In the next 10 years, the following sectors will do well:
- Rail (most cargo will be moved by rail rather than by plane or truck, due to fuel shortages)
- Energy (anything needed for the production or distribution of electricity)
- Minerals (gold, copper, silver, zinc, uranium)
- Agriculture (soil, fertilizer, seeds, and anything else needed for growing food)
- Information (innovative processing & distribution of information; keyword "innovative")

Also, for a company to prosper in the coming decade, they will need to be highly local due to the fact that a lot of political upheaval is coming. Companies that have expanded globally will see their market share shrink dramatically. Companies that have assets in unstable countries will lose revenue.

So with that, I present to you 5 companies I have selected based on the above criteria:

CNR - Canadian National Railway
ECA - EnCana Corp.
G - Goldcorp Inc.
POT - Potash Corp.
T - TELUS

One for each sector. I would argue that these are the best companies in each of the 5 sectors I described earlier.

The stock prices of these companies may not go up tomorrow, or next year, but perhaps over the next 10 years these companies will provide a very good return on your investment. They should greatly outperform the market.

WARNING: Do not blindly buy the stocks I mentioned above. Do your own research.

Check it out:

Here's an idea I came up with a few days ago...

I was watching a Glenn Beck rant on term limits when it suddenly dawned on me: there's a better system than democracy. I'm calling it randomized democracy. Here's how it goes...

Instead of selecting a candidate as a representative by voting, why don't we do a random selection?

For example, you might have 1000 candidates for the office of President of the United States. They all want to be President, so they all apply. From then on, it's like a lottery. The winner is selected randomly.

What are the benefits of this approach? Quite a few surprisingly...
1. No more campaign nonsense. There is $0 spent on campaigning by all candidates.
2. Fair playing field. No more corporate contributions, lobbying, and media partisanship to worry about.
3. It puts an end to the possibilities of vote fraud, pre-selection of candidates by a shadowy elite, and all that nonsense.
4. No more parties, partisanship bickering, "divided we fail" nonsense, abortion, gay marriage, and other BS.
5. No more manipulation of the political system by the international bankers (add scary echo).
6. An equal (random) distribution of left-leaning and right-leaning politicians. Can't complain about fairness.
7. No hassle of voting. You don't even have to know it's election day.
8. The political system would be so simple a dog could understand it.

But of course, as with any revolutionary idea, there are potential pitfalls...
1. The random selection system could be rigged. Of course, we should design it so that it can't be rigged. Maybe we use a repeatable random number generation technique based on astrological alignments that can be independently replicated.
2. We could end up selecting someone worse than Bush. I know, the odds are REALLY low, but still, it could happen. To avoid something like that, we could easily establish a mandatory competency test. Questions would be on topics like law, history, geography, and "do you know what the hell you're running for?". Nothing too hard, just a high school level test. We could also require that the individual receive support from at least 100 citizens in every state via signature of a petition. You know, nothing ridiculous like a million signatures, but just something to demonstrate that the individual has some (minimal) level of charisma. That way we don't end up with an evil cybernetic robot like Cheney.
3. Random selection doesn't stop us from having REALLY BAD LUCK. But then again, neither does voting.

So there you have it. This is one example of a system better than democracy.

Here's a neat little story for you. The Bank of Canada claims that over the past 14 years (from 1995 to 2009), there has been only 28% inflation in consumer prices (Core CPI). That averages out to 1.78% per year. But that's not the most shocking thing about this story. The shocking thing is, they're more or less right!

My own calculation of inflation (using various commodities, housing prices, and wages) indicates that we had just 49% inflation since 1995. That's 2.87% per year. For 14 years.

How can this happen in a fiat currency regime? I mean, aren't all fiat currencies supposed to inflate at faster & faster rates until they become worthless? Isn't growth in the money supply supposed to translate into higher prices?

By that logic, if we look at the Canadian M3 money supply, we should see little growth there as well. But guess what? M3 money supply grew from about $470 billion in 1995 to $1.3 trillion today. That is a 177% growth! That should have translated into 7.55% inflation per year!

We are operating today as if the M3 were just $699 billion. Where did the other $600 billion go?

Why am I saying all this? Because, arguably, inflation is better than deflation for the average person, in a debt-based monetary system, because it reduces the burden of debt over time. We should all be rooting for inflation, especially wage inflation. Everyone should get out there and strike!

But I would go further and say that it is not inflation, but an uncontrollable money supply, that leads to rapidly-changing property ownership and shifting societal structure. It means that few people ever gain the wealth & power to control society. It makes societies more prudent (saving for a rainy day) and leads to a more equitable distribution of wealth, since no one person can amass a huge amount of wealth. It also leads to a fairer distribution of wealth, because only those who are competent will end up retaining their property for any period of time. Therefore, it should be in everyone's interest (except those who wish to control society) to relinquish all human control over the money supply and turn it over to mother nature.

Abolish the Fed.

Here's how I see things right now...

If you look at the last 10 years, what do you see? I see a period of little to no change. Just briefly go back mentally to 1999. You had powerful computers, 3D graphics, Internet, Google, hip hop, house music, Seinfeld, and all sorts of things that are (remarkably) still popular today. The Dow Jones Industrial Average hasn't moved in 10 years. Hardly anything has changed.

If you look at history, such long periods of stagnation are usually followed by periods of MUCH MORE RAPID change. I believe we are entering one of those periods now. In 10 years, we'll look back to 2009 as if it were ancient history. Seinfeld will no longer be relevant. "The Simpsons" will be regarded as we regard "I Love Lucy" these days. There will be such a profound change in society that a whole new culture will emerge, which will regard the "old culture" of the 1990s and 2000s as irrelevant to the new present-day reality.

There is the real possibility that THERE WILL BE NO Dow in 10 years, and no US dollar, because the US government will have defaulted on its debt, and the US will have split up into separate sovereign states by 2020. We are at the beginning of an unprecedented period in world history. I expect that we'll see major political upheavals and a major restructuring of the current world order similar to what took place during World War II. Currencies will fall. There will be exchange controls. Countries will cease to exist. Borders will be redrawn. Only gold & silver will protect wealth.

In terms of lifestyle, people will go back to farming and a heavily rural, heavily local way of living. Transportation will be very difficult. Most people will simply ride bikes. Petroleum or gasoline will be a very unusual item to see in the 2020s. This is because the global interconnected system of distribution that currently still (barely) exists will be completely dysfunctional. It's not that there won't be enough oil. It's that it will be very hard to convince countries like Venezuela or Iran to sell it to us or distribute it to us, with global currencies in hyperinflation and price-fixing mechanisms like the COMEX in default.

Traffic will be scaled back to 1920s levels. People who can afford to drive will be regarded as extremely well-off financially. Companies will be forced to adapt to this new lifestyle. People will simply not go to work if it costs them more to get to work than what they're getting paid.

As far as food is concerned, you will only be buying items that are "in season." That means locally-grown produce. For us Canadians, that means no more oranges in February I'm afraid. Although such items will still be available. They'll just be very expensive. Oranges, and other exotic food items, will be given as gifts for Christmas.

There will be a general negative attitude toward debt, banks, and conspicuous consumption. Those who flaunt their wealth will be ridiculed because it will be assumed that they are actually in debt to finance their extravagance. People will work diligently at building up savings. The neighbour across the street might look & behave as if they are poor when in fact they have amassed quite a bit of wealth in the form of savings. But all of this will be known & obvious to everyone.

The era of the full-time permanent job with benefits is over. People will enter labour contracts of a very different form from what they are today. The contracts will be very short-term, very uncertain in their duration, and very uncertain in compensation. They will also often times be quite informal. In other words, nobody will have a guaranteed income. It will be quite common to see one person doing 3 or 4 jobs simultaneously, and those jobs may not all be in the same field. In other words, it will be possible for people to truly do what they love, expanding in multiple dimensions of their personalities, *provided* that they are OK with the fact that they have no guaranteed income.

Incomes will drop dramatically. A worker in China will make roughly the same amount as a worker in Canada. That is, a typical salary for a Canadian worker might be $7000 to $8000 a year (in today's money). Of course, lots of other prices will also drop, so rent would cost only $300 a month or so... and even less if sharing an apartment. To own a modest apartment will cost somewhere between $20,000 and $40,000 in today's money, and I'm more inclined toward the low side.

University will become cheaper if not free. Attendance at colleges and universities will drop off a cliff in the coming years. The reason? Price. And pretty soon professors will realise that if they want to keep their jobs, they better (a) ask the government for assistance by socializing post-secondary education or (b) lower tuitions and accept pay cuts as a result. I'm more inclined at this point toward (a) as the solution that will be sought, simply because no professor would ever ask for a pay cut.

The most secure jobs will be government jobs. There will still be teachers, doctors, police officers, and other government workers. These will be paid the highest and have the highest job security. I would put public school teacher as the top job for the next 20 years. High pay, high security, low stress, and 3 months of summer vacation.

During the tougher periods, there will be shortages of many essential goods. Some people will be prepared to go to extraordinary lengths to obtain certain things. Be prepared to witness more bribery and underground commerce. There will be MANY shadowy deals done under the table. Some may be 100% legit, others may be scams. It will be a dangerous world.

Barter will be an accepted method of exchange. Barter may be in terms of labour (e.g. I will mow your lawn for 2 weeks if you give me 3 cans of coffee), or "I will pay you $50 a month if you let me rent your garage to sell widgets.

How do I know all of this will happen as I described? Well, I've seen it before. I've lived through it. My parents lived through it. This was Romania, from 1978 to today & still ongoing. It is a perfect example of a once-great society destroyed by greed and corruption. It was a *little bit* better than what I think is coming, because you had a lot of government safety nets in place, like guaranteed employment and guaranteed housing, and you had a lot of surplus wealth of previous generations that had been kept and passed down to the younger generations. Plus, you had farms all over the place. Farmers were a major part of society and encouraged and heavily subsidized by the government. People could go to farms to obtain produce that they would not normally find in the city, and many had relatives who worked on farms.

Here in North America the principal difference is that everyone is broke. All the wealth was sucked out by the central bankers. Second difference is there is little or no farming. Food could become nearly impossible to obtain for many people. There's also no safety net in place. Unemployment could easily reach 40% or higher - there's nothing to prevent that from happening. Homelessness could become a major problem. There could also be a revolution, or multiple revolutions where various groups of people take over the government by force. Also, with such bleak economic prospects, crime is sure to rise. The government will be nearly broke, so it will have a very hard time keeping crime in check. See, this is what I mean by "it will get worse."

Anyone who disapproves of his policies will simply be labeled "racist".

The elite have chosen the perfect candidate for the role of absolute dictator.

Beware:
It will be VERY hard for anyone to disapprove of Obama. Under the guise of racism, those who disapprove will be rounded up and sent to FEMA camps, and Obama's mindless supporters will loudly cheer such events. I see a very bleak time for America.

Disclaimers:
This is not to say that there are no racists in America. However, if one disapproves of Obama, that does not automatically make one a racist.

There are people out there who claim Obama is the Antichrist. Those people are nuts. You should be concerned for your personal safety if you are in the presence of one of these people.

I, on the other hand, disapprove of Obama's choice of personnel in the White House *and* of the policies he has followed since he was elected. I am NOT a racist, but there's no way I can convice you of that any more than someone who is suspected of being a witch can convince people that that is not the case.

ONE MORE THING:
I'm not implying that somehow Obama WILL become a totalitarian dictator or anything like that. Only time will tell.

For some reason, I'm in a really revolutionary ("revolted") mood today.

Anyway...

I have a theory:

The 1950s and 60s - an era regarded as an era of "prosperity" by most historians - was actually the EXACT OPPOSITE.

Starting with World War II, and going on until today, the real wealth of Americans has been slowly sucked away, to the point where most Americans today not only have NO wealth but they actually have NEGATIVE wealth, where they are on the hook for hundreds of thousands of dollars of debt which they took out to buy a giant mansion, multiple imported cars, and of course a whole lot of Chinese junk.

The era of conspicuous consumption, starting in the 40s and going on until recently, was actually the slow process of bankrupting America and plunging it into the darkness of the third world.

It was engineered by design, using Nazi-style propaganda...actually even the Nazis would marvel at the American propaganda of the 1950s where the middle class was always portrayed as owning a really large house, multiple top-notch cars, and lots of useless (but expensive) decorative trinkets.

It all started after World War II. Using the savings that Americans had built up over the Great Depression (and in the century prior to that), the international bankers created an incredibly convincing propaganda image of the middle-class American living the suburban lifestyle with a giant house, etc. All Americans of more modest means, who didn't have giant homes but who had savings and maybe even a modest house, were lured into this consumerist materialist lifestyle of "more stuff is better". The result was that Americans gradually slipped from savings into debt, while moving from frugality into conspicuous consumption in trying to keep up with the Joneses (because that's what they saw on TV).

International corporations were fooled too. They were given money and told to expand, just keep expanding. As long as they expanded exponentially every year, everything would be great. So they started out expanding nationally first. Then, once they saturated that market and profit margins started to slip, they expanded internationally, looking for cheap labour and resources. They secured cheaper & cheaper labour for a long time. They harvested rainforests and cleared the Earth of all its precious natural resources, all the while getting deeper & deeper into debt. But finally, the game is up. The bankers have come to collect on their debt. Once-giant international companies are falling into bankruptcy. They have no more rainforests left to exploit. They have no more Malaysian children left to exploit. It's over. Just like the American consumer who was lured into mountains of debt, so were once-respectable American corporations lured into more and more debt. With each generation, as they devised new ways of paying off that debt, they became more despised all over the world and their day of reckoning drew closer.

We're now at the endgame. It is checkmate for the international bankers. The world owes trillions to them, but they won't be able to collect, because the people will revolt and the international bankers will be exposed for the gigantic fraud they created, and for the rigged monetary system that led to unfathomable destruction of the Earth and of the human spirit.

Like they did in the 1960s, we must unite in love & peace. We must maintain solidarity, because the bankers will not go without a fight. We must model heroes like Gandhi and MLK in the struggle for justice. We must not give in to their plan of global despair and poverty. We must fight for a future of prosperity and peace.

The time is NOW to get into debt - at a fixed interest rate.

Consider 1970. Average house prices were down to $26,000 after a sharp recession. By 1982, house prices had risen to $80,000. A tripling of prices in just 12 years!

Interest rates are now 6% or less. People are defaulting left right & center. House values have collapsed. Interest rates will only go up from here. Inflation will take hold in a BIG way - erasing fixed debts. By 2025, a debt of $200,000 will amount to about $30,000 in today's money, and that's if the US dollar still has any value. Get as long an amortization as possible, with as low an interest rate as possible (but it must be FIXED!).

Of course, it is extremely difficult to get a loan these days EVEN IF you are in good credit. The reason for this is that the banksters on Wall Street (who are in control of the banking system) don't want anyone to get in on what will become the biggest inflation in history.

You see, the banksters WANT credit to be frozen up until people build up enough savings in the form of bonds & cash. That could be several years. Then those savings are going to be utterly wiped out by inflation, while they (the banksters) make even bigger profits thanks to low-interest (0%) loans directly from the Federal Reserve, which they took out during the so-called credit freeze, and used to purchase all the depressed assets at that time. Through deflation *and* inflation, they can distort the markets in a way that allows them to make enormous profits at the expense of the "little guy". It's all about blowing bubbles and then popping them.

We really need to abolish the Fed.

A few hours ago I posted the following:

"
That's it. I'm calling a bottom.

It's here. It's now. The bottom of this bear market has arrived. (In *nominal* terms)

Dow 6000 will NEVER be broken on the downside. Don't look for it, it's not going to happen.
"

I was wrong. It WILL get worse. It will be worse than the Great Depression. In fact, comparing the Great Depression to what's coming would be like comparing a helicopter to a Boeing 747. Sure both are flying machines, but that's where the similarities end.

In fact, the present situation we are in ("we" = North America) has NO PRECEDENT in the history of the industrial Western world. The closest thing is the situation that led to the American Revolution, which was when Britain basically forced the US into a depression by forcing them to use the British Pound as currency.

Here's the sad (and revolting) truth: You are slaves, folks. You've handed over all your assets and those of your ancestors to the international bankers. You have nothing. Welcome to the third world.

I have come to realize that what is to come will be nothing short of the most revolting economic conditions ever seen in the Western world since the early 20th century. The first world will resemble the third world. In fact, the "first world" will MERGE with the third world, because the entire world will be plunged into an economic depression. It will be so bad THERE WILL BE NO ECONOMY. There will be no Dow Jones anymore. This will be such a spectacular and catastrophic collapse that it will be talked about for GENERATIONS. It will be written about in the HISTORY BOOKS.

Let's look at the Great Depression. Many people *truly* owned their homes (no mortgage). People were property owners. Many people had farms or had relatives who had farms. An income was considered a bonus, nice to have but not necessary in order to live. People had savings. People were WEALTHY in the 1920s and 30s. People went to the city to take advantage of the economic boom there, fully knowing that it could end at any time.

In the Great Depression, people used to rent their garages to underground whiskey producers. This means the middle class OWNED homes! So people were wealthy, but they were just frugal. They chose not to spend their money. They chose to save it because they had recently seen hard times and knew that jobs were not guaranteed. Furthermore, during the Great Depression, tax rates were low. States were solvent. The Federal Government was in its infancy. There was no war spending. There was no US military global empire. There was no global bond market flooded with worthless paper.

Anyway, the point is, comparing the current situation to the Great Depression is like saying Germany and Russia are the same country. It's a totally false comparison. Now is worse.

Now let's compare the downturn in Romania (and Eastern Europe) of the 1980s to what's happening now. First, there was a tyrannical government. This means there was little freedom and no economy. However, people were property owners. Seems ironic that in a communist regime, people owned property. But they did. People had guaranteed housing, and a guaranteed job. Sure, they couldn't buy much of anything with the money, but at least they had jobs and housing. EVERYONE was employed. There was no such thing as unemployment. EVERYONE had housing. So, comparing the current downturn to the downturn of the 1980s in Eastern Europe, again, is a false comparison. Now is worse.

So we've established that now is worse than both the 1980s in Eastern Europe *and* the Great Depression. What about Japan from 1990 to now?

Well, let's see... The downturn in Japan was caused by excessive SAVINGS (not debt). Actually - the bubble was caused by excessive savings. The downturn was simply a correction of the bubble. Also - Japan has no military and runs trade SURPLUSES - not deficits.

Our present situation in North America is unprecedented. And it may lead to unprecedented consequences, such as REVOLUTION. The bottom line is, we are in a situation that is worse than the Great Depression. We cannot apply Great Depression techniques to get us out of this. The closest thing is the American Revolution, so we should apply American Revolution techniques: restricting government, restoring freedom, establishing a stable independent currency (gold/silver), and abolishing international central banks.

Of course, we could just continue as usual. But if we do, there will be no economy, there will be no freedom, there will be no property, there will be no progress, there will be no innovation, and we'll just end up under a new form of high-tech feudalism world-wide, ruled by a few secret individuals who own the world.

If there's one thing that gives it away that we are ruled by forces outside of the democratic process, it is the drug laws of most countries around the world.

In Canada, you can be imprisoned for life for selling marijuana. For simple possession of marijuana you can get up to 5 years in prison. Part of the reason why the US prison population is the largest on the planet is due to the irrational war on drugs.

Now, consider methanol. 60ml of the stuff can kill you. Yet it's perfectly legal. There are many other legal poisons out there. Just imagine what would happen if drug laws were applied to gasoline.

So ask yourself this: why are some substances considered "drugs" and are *highly* restricted, while others are not? Why don't we define methanol as a "drug"? You know, some people sniff gasoline to get high. Why don't we declare gasoline a "drug"? Cigarettes are very addictive. Why not outlaw them and apply the same laws to tobacco that we apply to heroin?

I believe the reader now has enough informational ammunition to continue this thread to its logical conclusion.

They have won. It's over. Welcome to International Socialism.


Stand up, all victims of oppression
For the tyrants fear your might
Dont cling so hard to your possessions
For you have nothing, if you have no rights
Let racist ignorance be ended
For respect makes the empires fall
Freedom is merely privilege extended
Unless enjoyed by one and all

So come brothers and sisters
For the struggle carries on
The internationale
Unites the world in song
So comrades come rally
For this is the time and place
The international ideal
Unites the human race

Let no one build walls to divide us
Walls of hatred nor walls of stone
Come greet the dawn and stand beside us
Well live together or well die alone
In our world poisoned by exploitation
Those who have taken, now they must give
And end the vanity of nations
We've but one earth on which to live

And so begins the final drama
In the streets and in the fields
We stand unbowed before their armor
We defy their guns and shields
When we fight, provoked by their aggression
Let us be inspired by like and love
For though they offer us concessions
Change will not come from above

In looking at historical data for the Dow, gold, and treasuries, I was able to find some interesting correlations which could be used to predict what will happen over the next 30-50 years.

First of all, gold is inversely correlated with US treasuries. Next, the Dow is positively correlated with US treasuries. Here's what that means:

A secular bull market in treasuries => A secular bear market in gold => A secular bull market in Dow
A secular bear market in treasuries => A secular bull market in gold => A secular bear market in Dow

We can illustrate this by looking at the past 80 years...

1932-1960	Secular bull market in treasuries	Gold up 100% ($21 to $42)	Dow up 1300%	Interest rates went from 20-30% (depression-era) to 2% (1950s)
1961-1981	Secular bear market in treasuries	Gold up 1900% (from $42)	Dow up 25%	Interest rates went from 2% (1950s) to 20% (1980)
1982-2008	Secular bull market in treasuries	Gold up 100% (from 1980s average)	Dow up 1400%	Interest rates went from 20% (1980) to 0% (2009)
2009-2030	Secular bear market in treasuries	Gold up ????%	Dow up ??%	Interest rates will go from 0% (2009) to ??% (2030)

This means we can say what the financial world will look like in 2030:

Dow: 12,000 to 15,000
Gold: $15,000 to $19,000 (don't laugh! this is scary!!)
Interest rates: 15 - 20%


To get some sense of how much money that is, we have to take into account inflation. From 1961 to 1981, wages went up about 120%. This means inflation was *at least* 120%. The price of oil went up 400%. This means inflation was *at most* 400%. The geometric mean of that is 230%. This translates to a yearly inflation rate of 6.2%. I'm not using the CPI because it's heavily massaged.

So let's assume that the same rate of inflation (6.2%) takes hold over the next 20 years. This means that, in today's dollars, gold would be between $4500 and $5700. Plausible, given that the 1980 peak is $2200 in today's dollars. Now, how much would the Dow of 2030 be in today's dollars? 3600 to 4500. Many analysts (including Peter Schiff) contend that the Dow will go down to 3000 in the next few years. So it's VERY plausible.

Let's do some more math and see what other things might cost in 2030 (using the 6.2% rate of inflation):

Average Salary: $91,000 / year
Average House: $650,000
Oil (if there's any left): $130 / barrel
Gasoline (if we still use it): $7.15 / gallon
Rent: $3000 / month
Car (new): $90,000
Bread: $6.29
Can of Coke: $3.30
Fancy Dinner: $400
Movie: $30
Pair of Shoes: $200
Decent Suit: $1200
Really Nice Suit: $2900
Flight to Amsterdam: $3500

I shall attempt to prove once and for all that the theory of manmade global warming is a fraud.

Let's start by proving that (at least in theory), CO2 does cause a greenhouse effect.

A simple physics law is all we need.
It's called Wien's Law.

What is Wien's Law? It's a formula that relates the temperature of an object to the wavelength of light it emits. Why is it important? Because as you'll see, CO2 only absorbs a few precise wavelengths - corresponding to a small temperature range...

Most objects on Earth emit infrared light (according to Wien's Law). The greenhouse effect consists of the reflection (absorption & re-emission) of infrared light back to the Earth's surface. So what's important - in order to quantify the greenhouse effect that CO2 has - is to compare the wavelengths emitted by the Earth to the wavelengths absorbed by CO2. Where there is absorption, you have the greenhouse effect. Where there's no absorption, there's no greenhouse effect.

The CO2 absorption spectrum indicates that CO2 absorbs in the range of 15 microns to 25 microns, 4 to 5 microns, and a narrow band around 2.6 to 2.8 microns. The first band corresponds to a temperature of 116*K to 193*K. The second band is 579*K to 724*K (which makes it irrelevant because it's over 300*C), and the third band is totally irrelevant because it's over 800*K (500*C).

So the only relevant band of absorption occurs between -157*C and -80*C, where the absorption done by CO2 is virtually total (i.e. 100%). So we should expect that CO2 prevents temperatures on Earth from falling below -80*C. And that is indeed the case because if you check out Antarctica, the lowest temperature recorded there is -89*C. Or, if you check out Mars whose atmosphere is 100% CO2, the lowest temperature recorded there is -87*C (even higher than on Earth!).

But when it comes to temperatures above -80*C, it gets really interesting. Take a look at Wien's Law again. Notice how the intensity of emission drops off on the right. Basically, if you have a surface at -30*C (average winter temperature in Nunavut), how much will be emitted in the wavelength that CO2 needs in order to produce a greenhouse effect?

After consulting this handy calculator (scroll down), it turns out that over 30% of the energy emitted by an object at -29*C is absorbed by CO2. I didn't bother to do the exact integration, but a rough visual calculation of the area under the curve gives 67 W/m2 absorbed by CO2, out of 195 W/m2, resulting in a percentage of 34%. Since -29*C is a regular temperature in the arctic in the winter, this means CO2 has a huge impact on temperature up there. The impact is reduced at higher temperatures because the Wien curve shifts toward smaller wavelengths.

The next question is, how much CO2 (what concentration) is necessary to achieve the full absorption potential? The answer is 1 molecule per 15 cubic microns. How much is that? CO2 weighs 7.3e-26 kg. The volume is 1.5e-17 cubic meters. So the answer is 4.9e-9 kg/m3. What is the mass of a cubic metre of air? 1.29 kg/m3. That means we need 3.8e-9 kg CO2/kg air. 1 kg/kg is 1 million ppm. So to find ppm we need to multiply by 1 million. The result: 0.0038 ppm. That's 3.8 ppb!

How much CO2 do we have today? ... 380 ppm! How much did we have before the industrial age? 270 ppm. Keep in mind it only takes 3.8 ppb of CO2 to achieve the full greenhouse effect of CO2.

Conclusion? The CO2 we added to the atmosphere makes no difference, because the greenhouse effect was already 100% before the industrial age.

NOTE: This article may be revised in the future if I come across new information.

Ladies & gentlemen, I see before me a crisis that will lead to the thirdworldization of America.

Okay, so "thirdworldization" isn't really a word. But it could become one.

One thing is clear: the United States of America is rapidly heading toward third-world country status.

"But... this has never happened before" you say! Actually, it has. The Roman empire collapsed in a similar way. The government became more and more draconian while trying to fight inflation (caused by all the excesses of past politicians), which led to disenfranchisement, factionalization, and a 50-year period of relative anarchy known as the "Crisis of the Third Century".

But history aside - I'm going to show you how America is set to enter the third world.

I'll begin by defining the term "third world" in terms of the way it's used in the modern vernacular. Initially, "third world" was used in reference to specific countries during the cold war. But today, it's used more broadly to describe countries where the standard of living is very low and the level of political organization borders on anarchy.

So what are the characteristics of a "third world" country? One only needs to look at Mexico for an example. Here are 7 characteristics of a third world country:

1. Militias and/or warlords control much of the country's means of production.
2. All public officials are corrupt, even at low levels (e.g. police officers).
3. Most business owners/officers are tied to militias and/or corrupt government officials, and are themselves corrupt.
4. Trade relations with foreign countries are very limited or non-existent.
5. The country has little in the way of credit rating, and as a result has high inflation (possibly even hyperinflation).
6. Unemployment is high, wages are very low, and the standard of living is similar to the Great Depression.
7. The country is incapable of producing enough to sustain its own people (i.e. GDP is very low).

Romania from about 1985 to 1995 met all 7 of these criteria. Though I was only a child then, I still remember it quite well. After 1995, #4-7 improved considerably, but #1-3 still continue unchanged.

Back to the US - how many of the criteria are met right now? Let's see...

#1 - No. A secretive elite controls America's means of production. Better than a militia...I guess.
#2 - Yes & no. At the high level, it's called lobbying. It's not happening yet at the low level.
#3 - Yes. This is absolutely the case with 99% of US corporations. They lobby the government, and the government does what they want.
#4 - No.
#5 - No.
#6 - No.
#7 - Yes. If you take social security for instance, that is unsustainable. Also, all of America's manufacturing has been exported, and agriculture is being done by a handful of multinational corporations.

So America meets 2.5 out of 7 criteria right now. But where is America heading? What will it look like in 2012? Let's look at current events, because as Gerald Celente says, current events form future trends...

#1 - Squatters are busy taking over abandoned properties these days. If you think you can defend your property with a gun, think again. Squatter "tribes" are large - maybe as many as 100. Bigger than gangs. Think your guns can help you now?

There is increasing factionalization (development of tribal factions) in America. Some are united by ethnicity, others are united by political beliefs. These factions are growing in size and power. The vacuum of power left by the bankrupt US government will be filled in by these factions. There is one thing in common among all these factions: disenfranchisement by the US government.

#2 - When police officers have virtually no food on the table because their government paycheque has either disappeared or shrunk because of inflation, they will gladly accept bribes. A little disenfranchisement will also help. Many will feel disenfranchised when their government paycheque has become a cruel joke. If that doesn't do it, increased taxes will. Not to mention the fact that the government will be perceived as powerless and incompetent after its collapse. Most police officers will become sympathizers of the "people" (the disgruntled masses) as long as they receive some decent bribes.

#5 - When China realizes it's been royally screwed, after the default of the US on all of its dollar-denominated debt, they will no longer lend to the US so willingly. Or perhaps all it takes for China to dump its dollars is for the US to be downgraded from AAA credit rating. The day that happens, the US dollar will begin to resemble the Zimbabwe dollar pretty quickly.

The US is not AAA no matter how you put it. Even if you believe they have 8,500 tons of gold at Fort Knox, that's only worth about $250 billion. The total amount of US dollar-denominated credit outstanding is about $36 trillion. So the gold at Fort Knox doesn't even cover 1% of that. Gold would have to go to $13,000/oz just to back 10% of the US dollars sloshing around out there. And that's if you believe the whole Fort Knox business.

#4 - See #5. Basically, with no more credit, the US will be forced to withdraw from all of its global outposts purely for financial reasons. Since they are heavily reliant on imports, a loss of credit rating would immediately result in shortages of the most basic goods out there, including gasoline and food.

#6 - Unemployment in the US will go above 10% and likely even above 15%. After inflation, a salary of $30,000 a year will look similar to what a Chinese worker makes today. Without basic goods such as gasoline (see #4), the average American will be plunged into - literally - a "dark age".

So now you see that it is possible for the US to fall into third world country status. Out of all the criteria, I have to admit that #2 (street corruption) seems the LEAST likely to happen. I just don't see your typical God-fearing American bribing a police officer. But I could be wrong. Actually - let's hope I'm 100% wrong and none of these doom & gloom predictions ever happen.

Based on historical data, I make these predictions:

1. The Dow will bottom at 2400.
2. Gold will reach a major top at 2600.
   ...but it could fall to 600. If it does, consider that the buying opportunity of a lifetime.
   
3. Housing will bottom at 140,000.
4. Commodities have bottomed.
   This includes oil, gasoline, copper, silver, palladium, platinum, cotton, lumber, sugar, etc.
   Buy commodities now or you'll regret it for the rest of your life.
   
5. Real wages have bottomed.
   ...but they may not rise for another 3 years.
   After that, protectionist government policies will cause real wages to skyrocket.
6. Interest rates have bottomed.
   There's no way we can go below 0%.
   Here's an idea: buy commodities with borrowed money (if you can get a loan at all).
   
7. Deflation is at its peak. Inflation will follow.
   We've deflated 10% in 6 months. In the worst year of the Great Depression, deflation was 8%.
8. Unemployment in the US will peak at 25%.
   Official government figures may peak at 10-15%, but in reality, 1 in 4 people will not have a job.
9. This recession will last until May/June, 2011, which is about 3 months longer than the first phase of the Great Depression.
10. The world will NOT end in 2012. There are no end-of-world events in the historical record.

So I've met a couple of people (who shall remain nameless) over the past few weeks who insist that C++ is better than Java. I am truly impressed by the stubbornness of these people. So here goes. I'm going to argue once & for all why ...
OH NO! I'm not falling into that trap.

I'm just going to pose questions that any developer should ask before choosing either C++ or Java. NOTE: I'm not advocating just Java here. Mono has comparable features, or .NET if you don't care about cross-platform.

Before I start I'd like to mention that I was once a die-hard C++er. I started programming in C++ back when I was 11, but 5 years after that I found .NET and never looked back. So I technically have 5 years of experience with nothing but C++, and I have used it off & on and will continue using it whenever I absolutely need to.

1. Ant vs "make"

What's better? Ant or "make"? Would you rather write a Makefile (no extension) in a proprietary hard-to-read language, with a text editor like "vim", or would you rather write an XML file (build.xml) which could easily be generated by a tool (perhaps with a GUI)?

Secondly, which one has more capabilities? Ant or "make"?

2. Pointers

Do you really need pointers? Do you really need to convert integers (memory addresses) to objects? Are you willing to put up with the hassle of manually collecting garbage (using "delete" statements)? How are you going to test that you don't have memory leaks?

What if the architecture you're working on uses 48-bit memory addresses and you want to port your program to an architecture that uses 64-bit memory addresses? Have you thought about how you're going to do that? Because you know, in Java you don't need to think about any of this.

3. CPU Architecture and OS

What CPU are you programming for? What OS? Do you need little-endian or big-endian integers? Are you going to use Unicode? Which kind? UTF-8 or UTF-16? With Java, you don't need to think about it.

Suppose you are coding for multiple OSes/CPUs. Do you like having lots of preprocessor statements in your code? There is no need for preprocessor statements in Java. If you do want to check what OS or CPU you are running on, you can do so at runtime.

How are you going to know what libraries to link to on each OS? And how will you know that you have the right version? For the right architecture/OS? In Java, you have only one shared library: the JDK. In C++, you have a variable number of shared libraries.

4. JUnit

One question: Unit testing: how will you do it in C++? Or will you just rely on integration testing all the way through?

5. Graphical User Interface

Suppose you want a GUI for your application. What toolkit will you use? Gtk, Qt, Win32, MFC, .NET? Console is starting to look more attractive already, isn't it? Will you use a different toolkit for each OS? At least in Java, SWT handles all that dirty work and you can get a native GUI on just about every OS.

6. Web Applications

What are you going to do for web applications? Make/use a CGI application? Use Perl/Python/PHP? Does the ugliness of those scripting languages bother you at all? Or the fact that you'll have to learn yet another language? With Java, you can build a totally custom web server in about 300 lines of code. You also have JSP.

7. Dynamic Linking

Suppose you want to enable your application to have plugins, so that other developers can contribute parts of your application without seeing the core application's source code. How exactly are you going to do this? In Windows, you can use DLLs. What about in Linux? How are you going to distinguish between the two?

What if somebody submits a plugin built for Linux and your application is built for Windows? Maybe you want to load that plugin anyway, because it technically shouldn't have any OS calls. How will you do it? The plugin is an .so file and your application is an EXE. Feel like figuring that out?

8. Exceptions vs. Core Dumps

Think about this carefully: Would you rather receive a core dump (segmentation fault) if something goes really seriously wrong, or would you rather it be an exception?

Conclusion

This is it for now... I may add to this article if I come up with anything else.

So this weekend I installed Ubuntu on my machine. Downloaded version 8.04 (x64) and burned it to a CD. Played around with it for a while, compiled a lot of source code, and guess what OS I'm in right now. Windows XP.

Now granted I'm not an open source fanatic. Never been. Probably never will be. So I'm coming to Ubuntu with a sceptical attitude. Somewhat like an atheist going to church.

I've used Ubuntu many times in the past 2 years, starting with Edgy Eft. After my various cumulative experiences with it, I have to say that Linux still has a way to go before even coming close to the two major commercial OSes out there: Windows and Mac OS. As you'll see in this review, what's "good enough" for Linux users isn't good enough for everyone else.

I'll start with Ubuntu's weak points, because the strengths are discussed too often.

1. Installation

I was lucky to have all the supported hardware. It even detected my sound card! I say "lucky" because I know from a previous experience with Ubuntu just how difficult it is to find drivers if you happen to have the kind of hardware that the open-source geek community considers uninteresting.

For instance - in a previous attempt to install Ubuntu, I had a motherboard with an NVIDIA (nForce) chipset. The integrated sound didn't work, and the RAID - forget about it!

So suppose you have hardware that isn't supported out of the box. Are you really out of luck? Well, not completely. You can google it and hope you find someone who ran into the same problem as you. That's pretty much your only recourse.

During installation, my problem was that it didn't detect my RAID array. Even though it supported it. The installer just didn't bother to load dmraid and mount my RAID volumes. I consider that pretty awful. If that happened in Windows I'd be unable to access any of my data. But since it was Linux, I was able to hack around and install dmraid and edit my fstab to mount my RAID volumes.

One more thing: installation was somewhat slow - given that it was only one 700 MB CD. It felt slower than Windows XP setup. Suggestion for Ubuntu developers: improve install speed.

Here's another idea for the Ubuntu people: why not have a Windows Update-style website, where users can go and download drivers for their hardware, install optional OS software, and stuff like that? Instead of hunting around for the right apt-get command, I'd just go to that website.

2. Software Installation

This is the part that I find most laugh-out-loud tragically outdated in Linux compared to every other OS. Suppose you want to download Mozilla Firefox. It is the same for every application, so let's just use Firefox as an example. You go to the Firefox website...

There's only the 32-bit version. How do we get the 64-bit version? It's nowhere on the Mozilla site! WTF!! They don't support 64 bits?! Oh, wait...MAYBE they expect me to COMPILE this darn thing. Oh yeah! I heard Linux people talk about compiling things all the time! It must be so easy!

So I get the Mozilla source code: I download another .tar.bz2 file from some random FTP server at the University of Oregon. I extract everything, now to a separate folder ~/firefox-source.

Wow! Extraction was surprisingly quick for 40,000 files. Now what?

Pop open a terminal and "ls". Let's see... there's a bunch of random text files. There's a "configure", another "configure", a README - oh! I'll read the README! README file points me to a web page for instructions on how to build Mozilla. Hey, I'm a developer now! Feels kinda cool... Ok. Let's see... "For the impatient!" YES! Let's read that.

OK. So I have to do a bunch of apt-gets. Not a lot. Let's do that. After getting a cryptic error I remember I have to do "sudo apt-get". (Funny thing is, the error doesn't mention "su" or "sudo" or "running as root" at ALL.)

(10 minutes & quite a bit of downloading later) Next step: there's a bunch of commands I have to run. These should work. Wait: what's this "hg" thing? Isn't this going to download the Mozilla source all over again? Whatever. Run it.

(30 minutes and LOOOOTS of downloading later) Whew. I swear I just downloaded Mozilla all over again! And now we build...

autoconf-2.13 - "not found". Huh? Fine, "autoconf". There we go... (Thinks: What if "autoconf" didn't work? Would that have been the end of my journey?)

Now "configure" and "make" run perfectly, but we've spent another 20 minutes. Now finally we can run Firefox. Where is it? "objdir-ff-release/dist/bin". Run firefox in there. No problems. We now have Firefox.

So that took what... 60 minutes? Not that bad. But thinking back on it, there was a lot of "hoping" that we had to do. We had to tweak the autoconf command and hope it doesn't screw up anything. We had to hope that we had compatible versions of all the required libraries. We had to hope there were no extraneous config files anywhere on our system messing with anything. We had to hope we had the right version of "make", the right version of "gcc" or whatever compiler it needed to use, and so many other environment-specific things. Oh - and we had to hope that no output from "autoconf" was not an error.

Now do you see why this is so laugh-out-loud tragic? Because in all these years of GUI installers, and GUI development environments, on Linux you still have to open up a terminal to compile something. There should be NO excuse why that should still be the case in this day and age.

I have some minor pieces of advice for people distributing their source code:
1. For every operation, provide consistent, meaningful feedback. Provide a progress window with a progress bar, with status text that describes the operation presently taking place. Use LOG files. Stop outputting everything to the console. Stop inputting everything from the console. Again - use files! God!
2. Error messages should tell the END USER what to do to fix the problem - NOT spew out an internal error message that at most one programmer understands.
3. Want the user to configure something? Use a DIALOG BOX! With checkboxes, radio buttons, combo boxes, and all that good stuff. Stop using command line parameters and these arcane "configure" scripts. For God's sakes we are no longer in the black & white terminal days!
4. If your build instructions involve more than one step, consider making an application that combines all build steps into one. There is no excuse for "If running Linux, do this", "If running Windows, do this" kind of instructions.

For the Ubuntu team, I suggest creating a GUI application called "Build Manager" which takes a source code package and does all the dirty compile & install work for you. You should have the choice of where to install it (after compilation) and any custom build options should be shown as checkboxes. Error messages should be logged and the log file should be shown to the user (in some graphical text editor) if there are errors. It should automatically find & use the right dependencies for each project.

3. OS and Software Configuration

Another one of those weak points. In Windows, we have something called the registry. Now, granted, most end users have no idea what the registry is. However, advanced users hack the registry on a regular basis. No matter how you put it though, the registry is a great way to keep settings organized.

On Linux, you have config files. Lots of them. In just about every place on the file system. Imagine if Windows were still using INI files today instead of the registry. It would be a nightmare to configure things. On Windows, you have user profiles (a folder where all user-specific settings are kept). You also have them on Linux, but hardly any app uses them. Whereas on Windows every application is forced to put its settings somewhere in Documents and Settings or HKEY_CURRENT_USER, on Linux anything goes.

Think of Windows like a nice garden when it comes to configuration - it's very organized and every plant (application) is in its proper place. Linux is like a jungle. There is no organization. Every developer does as he/she sees fit. Many Linux developers are comparable to savages. They have never heard of directories, GUIs, or other civilized software concepts.

Again, for Ubuntu to alleviate such headaches, it should provide very advanced configuration applets in its shell. What it provides now is fine for very simple configuration, but ultimately it should allow you to access any configuration file in any location in some kind of organized fashion.

4. The Good Things

There are a few things that Linux does better than Windows, hands down:

- Security is the primary benefit. The UNIX kernel is top notch when it comes to security. To do any real damage to a system, you need to access it as "root". Only in Vista has Microsoft tried to provide a similar level of security. But the security in Linux is at the kernel level. In Vista, it's in the shell (UI) layer. It's just not the same.

- X Windows is in every way superior to USER+GDI. You have no idea how many times X Windows saved my ass, because I was able to log into a UNIX server at school (with GUI) from home. Unlike Remote Desktop, X Windows sends vector graphics over the net, saving bandwidth dramatically. Remote Desktop sends bitmap images.

- Mounting. There's no concept of it in Windows. You have 26 drive letters and that's it. You can't mount a folder to a drive, or a drive to a folder.

- Memory Management. Without a doubt, Linux is better at memory management. You can feel it. The hard drive is less active. The system is more responsive. Fewer page faults.

- Everything is a file. You can treat any drive like a file, or any file like a drive. You can treat your sound card like a file. Write something to it and it'll output some weird sounds. It's kinda cool. In a slightly geeky way.

- Boot Loader. The "GRUB" boot loader is fantastic. It's the most configurable boot loader I've ever come across. You can dual boot anything with anything. Of course, Microsoft has no reason to provide a good boot loader. After all, they want to maintain their monopoly.

5. Conclusion

Linux is still immature. Mainly because Linux applications are immature. Linux could be a lot better if the applications written for it were written to the same standard as they are for other OSes. Linux has a lot of kernel-level features (borrowed from UNIX) that completely rival the Windows kernel. But application developers keep insisting on one formula: C++ & console. That formula worked in the 90s, but today it is just ancient. Now that it's open source, I'd like to see Java replace C++ in the Linux world much like .NET replaced Win32 API in the Windows world. There should be no more C++ developers except for those doing drivers or the OS itself. But that (why C++ sucks) is going to be another article.

Addendum:
The "immaturity" problem is not really a Linux problem. The OS is stable, secure, and very capable. The problem is with Linux software. Windows has a huge ecosystem of well-written, well-packaged applications. Linux just doesn't. It has a huge ecosystem of applications, but most of them are pure crap (to put it simply). Now, there are also some excellent Linux apps out there, ones that rival Windows apps, like "gedit" which rivals Notepad in a million ways. But those are the exceptions.

An example of such an "immature" application is aMSN. The GUI acts like it was written from scratch by a 12-year-old kid. You have to click submenus to open them! It is totally non-standard. And that's because it uses Tcl/Tk, which totally sucks. I don't see why any developer in their right mind would use that toolkit. But there you have it. A really useful Linux application that (unfortunately) totally sucks! I use it only because I have no other choice.

So I'm developing a streamlined Java web browser (just a window with a browser control), and I was rather torn between Mozilla (xulrunner) or WebKit. On the one hand, Mozilla was very easy to embed (SWT Browser widget). On the other hand, Mozilla is also much slower than WebKit when it comes to JavaScript processing.

So I went through all the trouble to download & build WebKit (GTK port) only to realize that it doesn't support HTTP responses without a content type. In fact, it's extremely picky about content types. That's no good because I'm building a custom web server and I don't want to be forced to provide the content type. It would just enlarge my web server code by thousands of lines! To the WebKit team: PLEASE FIX THIS! Not every web server will hand you perfect responses on a silver platter. In fact, I don't even know how Safari can reach 90% of the websites out there.

Mozilla, on the other hand, lets me respond with no content type. Good job Mozilla! In fact, Mozilla also provides Java (JNI) bindings for all platforms. I can't imagine why WebKit doesn't. It's not rocket science guys, come on.

So these are my two biggest complaints about WebKit, and why I'm going to go with Mozilla. There is a rumour out there that the next JDK will include a WebKit-based browser control. I certainly hope they change their mind and use Mozilla instead. It's no wonder there's still no WebKit-based browser for Linux. Because WebKit sucks!

The Federal Reserve is printing rapidly. Right now. Right at this moment. It's just not being reflected in bond prices. Here's why:

Ever wondered how the Federal Reserve has been able to keep interest rates so low? What have they been doing, behind the scenes, in order to prop up US treasury bonds? Why is it that now, when the US's financial future looks so shaky, 30-year treasuries yield less than 3%? Are investors really THAT stupid?

The answer is simple: The Fed is printing. Fast. Ultra-fast. Super-duper-fast. Constantly. Right now. ...and now.

Here's how it works.

The US government issues bonds which it sells to any investors willing to buy them. An investor swaps his/her cash (money) for the bond (i.e. buys the bond) and can then hold it and sell it at any point in the future.

The bond market is then the place where investors buy and sell bonds. Every bond has a price, as well as a coupon (a fixed interest rate). The yield (or interest rate) of a bond is the ratio of the coupon to the price. When most people refer to interest rates on bonds, they refer to yields.

The interest rate of a bond is inversely proportional to the price of the bond. For instance, if a bond costs $100 now and yields 3%, and it drops to $80 tomorrow, the yield goes up automatically to 3.75%. Therefore, you can refer to a bond simply by its yield or by its price (using both is somewhat redundant).

Suppose investors start to lose interest in US bonds, because they don't believe the 30-year inflation rate will be under 3%. Let's do a survey. Do YOU believe the average inflation rate for the next 30 years will be under 3%? Thought so.

Just to give you some historical background - for the last 30 years, the inflation rate averaged 7% per year. Yes you read that right. 7% per year.

So let's suppose 80% of investors want nothing to do with US treasury bonds. Thus, 80% of the US bond market drops out. This means bond prices might collapse to $20 from $100. That would force the yields (which are currently under 3% but let's assume 3%) from the current 3% up to 15%! What does this mean?

An interesting thing about bonds is that they directly affect the interest rate set by the Federal Reserve. That is, the Fed can't just arbitrarily set rates with no connection to the bond market. It always bases its benchmark rate on the current yields in the bond market.

So what happens if the bond market collapses like I described earlier? Well, the Fed would be forced to raise interest rates to around 12%. Nobody wants that right now. Entire companies would collapse (not that enough haven't collapsed already).

So wait a minute - how can the Fed control interest rates if it's constantly getting pushed around by the bond market? They devised a clever trick:

The Fed can issue currency (i.e. print money) with which it can buy bonds. Note that this is fictitious money - it has NO backing whatsoever. In the event of a bond market collapse, the Fed can act as a gigantic investor with a blank cheque that has an unquenchable thirst for bonds, sucking in bonds and thus raising bond prices.

The Fed can also take in money and sell bonds to investors. It would do that if it wants to raise interest rates. It did that between 2005 and 2007, causing the current "deflation" crisis.

So what is a bond collapse, and when does it happen? Whenever investors lose confidence that bonds will at least keep up with inflation. That is, when the real (adjusted for inflation) interest rates on long-term bonds become negative, investors lose confidence in bonds.

Therefore, it follows that during a bond collapse the Fed must constantly keep printing money to keep bond prices stable. It doesn't suffice for the Fed to just print a giant sum once and then stop. Whenever the interest rate of the Fed is under the rate of inflation, the Fed must constantly (24/7) run the printing presses at a rapid pace just to keep bond prices from falling.

So what does it all mean to you? Simple: If interest rates at the Fed are under the rate of long-term inflation (i.e. 7%), save your money in gold instead of cash or bonds. You'll be very glad you did. Oh, and expect BIG inflation.

Remember this post I made on August 8, 2008?

In that post I called for $640 gold, $1100 platinum, $11 silver, $200 palladium, and Canadian dollar at 84 cents. I also predicted that the US would pull out of Iraq, and predicted that oil would slide to $55 a barrel. My prediction was that all of these things would happen before the US elections.

Let's look at just how remarkably right my predictions were.

When I made that post, prices were as follows:
Crude oil: $120/barrel
Gold: $870/oz
Silver: $16/oz
Platinum: $1550/oz
Palladium: $350/oz
Canadian dollar: 94 cents US

Today's lows?
Crude oil: $62/barrel (Prediction: $55)
Gold: $680/oz (Prediction: $640)
Silver: $8.60/oz (Prediction: $11)
Platinum: $760/oz (Prediction: $1100)
Palladium: $165/oz (Prediction: $200)
Canadian dollar: 79 cents US

Clearly some of the prices overshot to the downside but that's to be expected in any bear market.

So what about my prediction that the US would pull out of Iraq in October? Well, let's see...

US to pull out of Iraq within a timeframe of 18 months (Obama) to 48 months (McCain).

US forces to withdraw from Iraqi territory no later than Dec. 31, 2011.

I strongly encourage you to read both those articles so you can see for yourself that this Iraq timeline is a very important (and recent) development, and it applies to both Obama and McCain.

Stay tuned for the bitter-sweet celebration of the fulfillment of my final prediction: McCain becomes President.

It's official: The Council on Foreign Relations now calls the US dollar a "historical anomaly," a "piece of paper of no intrinsic merit."

Check it out - straight from the horse's mouth.

What is the Globo?

By now, you should have heard about the Euro, as it is Europe's currency. If you look hard enough you can also find something about the Amero - a proposed currency for North America. But the Globo?

The globo is the global currency to be imposed by Russia, Saudi Arabia, Brazil, Japan, China, the EU, Canada, Australia, and possibly the UK, in a joint effort to detach themselves from the US dollar.

Why do all countries want to detach themselves from the US dollar? Are they even attached to the US dollar to begin with?

Unless you've been living under a rock, you should know about the Bretton Woods agreement signed after World War II that gave the then-gold-backed US dollar reserve currency status for the entire world. The dollar then was said to be "as good as gold," and was in fact 100% backed by gold. $35 was an ounce of gold - literally.

In 1971, after a decade of deficit spending on the Vietnam War, Apollo, and Great Society programs, the US had to end the Bretton Woods agreement. The US-gold link had come under pressure from France and the UK which were buying up gold like mad and dumping US dollars, knowing that dollars were intrinsically worth less than gold. Thus, Richard Nixon was forced to terminate the Bretton Woods agreement on August 15, 1971. What followed was a decade of inflation known as the "stagflation" era, after the dollar essentially became a worthless piece of paper.

However, in the early 1980s, after the middle east was driven into bankruptcy, a new deal was established with the Arab nations (except for Iraq and Iran), whereby those countries would sell their oil in exchange for US dollars, which they would then keep in gigantic savings accounts - called "reserves" - for ever & ever & ever (because if they ever spent those dollars, the US would experience hyperinflation and the US empire would come to an abrupt end).

During the Reagan, Bush, and Clinton years, a new kind of American imperialism flourished, where the US struck deals with increasingly more countries for those countries to purchase enormous amounts of US dollars (like the Arabs did) to finance a growing US debt. Japan is now the world's foremost holder of US dollars. China also holds a lot of dollars. Keep in mind that the dollar is nothing but worthless paper. Worse still, all the countries holding US dollars must be forced (coerced) NOT to sell those dollars because if they ever did, the US would suffer a Zimbabwe-like hyperinflation.

Today, virtually every country in the world holds large quantities of US dollars in reserve. The US dollar is a price-fixed currency. The US treasury (or more accurately the Federal Reserve) sets the price of the dollar. The dollar has no purchasing power, because it's a worthless piece of paper. However, the Fed gives it the illusion of value by DECREEING what its value is. It does so by simply readjusting the number of dollars in circulation. The dollar is a FIAT currency (FIAT implies "by government decree").

Whenever the value of the dollar is driven upwards (by the Fed selling treasury bonds), all other countries suffer because their own currencies inflate relative to the dollar. Thus, it becomes harder for those countries to purchase things (like oil) on the market, because those things are sold in US dollars. However, if the dollar is driven downwards (if the Fed buys treasury bonds), the US dollar reserves of the other countries now become less valuable. Furthermore, the rapid appreciation in the domestic currencies of the other countries causes problems for exporters. So you can see why the more volatility there is in the dollar, the harder it is for other countries to maintain stable economies.

For countries other than the US, the US dollar as a reserve currency is extremely detrimental. The current system of US dollar hegemony (where the dollar is used as the de-facto global currency) is an offshoot of American imperialism and is a way for the US to control world markets.

The problem we are faced with today is an impending devaluation of global currencies (other than the dollar). The Canadian dollar has been devalued enormously this week. The Australian dollar has been totally decimated. Every currency other than the US dollar has been falling. The Japanese Yen thankfully was spared, but if the US has its way, all other currencies will be devalued massively. Why? Because the US must inflate away its debt. In order to do that, it has to print more dollars. It can only do that while maintaining stable prices (otherwise inflation will result). The ONLY way to do that is by devaluing the currencies of ALL OTHER COUNTRIES.

So China, Japan, Russia, and other economically-strong countries are now deciding (behind closed doors) that in order to maintain some kind of economic stability, they must - ASAP - decouple their currencies from the US dollar. The only way to do that is by making some other currency the global reserve currency, and therefore forcing the US dollar to be valued against that currency. And that currency is the Globo.

So as not to repeat the mistakes of the past, the countries proposing the Globo have decided that it will be backed 100% by gold. In other words, the Globo is gold. Therefore, gold will be the new global currency. One ounce of gold will be worth exactly G2461. (G=Globo)

This year, Yom Kippur falls on October 8th, 2008.

Web Bots are saying there will be an important 9/11-like event on October 7th:

This correlates with my earlier prediction that we are "days away" from a world-changing event.

The common wisdom of Warren Buffett, Benjamin Graham, and other great investment mentors has always been that you should pick an asset that you believe is undervalued, and go long (purchase and hold that asset) for many years as its value increases exponentially. However, since the introduction of short selling, this age-old wisdom could not be more wrong.

In today's market, it is far more advantageous to be short for the long term, than to be long. The reason is simple: when you are long, you are paying a price for holding an asset that may or may not appreciate in value. Every day that you hold that asset, you are missing out on the interest that you would otherwise earn if you had not purchased that asset and instead kept your money in a savings account. However, when you are short, you don't have to pay that price. You borrow the asset at a specific lease rate. If the lease rate is less than the interest rate that you would earn in a savings account, then you are actually being paid for being short.

Nowadays, it is very hard to find an asset that grows by more than the interest rate in most savings accounts. It is (and has always been) very risky. However, it is very easy to find a bank that will lend you a particular asset (e.g. gold) at a near-zero lease rate. You then sell that gold immediately, pocket the money, and put it in a savings account where the growth rate is guaranteed. If gold goes down, you cover your short and make extra profits. If gold goes up, you simply double your short position. As long as the rate of return in gold does not exceed the rate of return of the savings account with virtually no volatility, you can always eventually cover your short position for a profit or simply use the interest to gradually cover your short.

Longs are getting killed, especially in the precious metals, precisely because shorts are always fundamentally favored. Lease rates on gold and silver are almost always zero or negative. Negative lease rates mean that you actually get paid for borrowing gold!

In recent news, the SEC banned short sales on all stocks. Too many ordinary people had caught on that short selling big financial firms could be extremely profitable. However, despite the short ban, the Dow plunged 7% today. Yet, the SEC remains silent on the shorting of commodities. If you cannot see the political agenda here, you are blind.

Bottom line - as long as short selling commodities is fundamentally favored by the banks (through low or negative lease rates), it is far more profitable to be short than long. Last month, three banks shorted one tenth of the yearly supply of gold (that's 250 tons), causing a devastating plunge in the gold price - all the way from $990 to $745 with no rebound. The shorts made it out with a 33% profit, even though they never sold any physical gold. The longs got destroyed. This is the sad reality of the "free market" casino. If you want to make money, you better be short, because long just doesn't pay.

We are mere days away from some VERY big news.

There is a greater chance than ever that the world will be VERY different by October 1.

Yom Kippur is approaching, and the Russians have expressed great fear of a second Yom Kippur War, between Israel and Iran. They are intent on "preventing" it, by launching an earlier strike in Iran - September 28th.

Israel has been positioning itself in Georgia, in order to invade Iran. NATO bases have been built in Georgia. Georgia represents the perfect strategic location (other than Iraq) for attacking Iran. Iran is now surrounded by enemies: Iraq, Georgia, and Afghanistan - all are now occupied either by the US (NATO) or Russia.

Russia has positioned itself in Georgia and Syria. Take a look at what countries border Georgia and Syria. The US is in Iraq, ready to help Israel with its Yom Kippur Iran invasion. Russia will attack Iraq from Syria and Iran from Georgia, and the US will not know what hit it.

Prophet Alois Irlmaier sees "two eights and a nine" for the start date of World War III. 9/28/2008.

Congress is going on vacation at the end of this week. McCain has decided not to show up for the debate in Mississippi. Americans will be totally taken by surprise by the events that are about to unfold.

Guess what, American taxpayers just got SCREWED OVER by their OWN government! The government just used their OWN money to erase the debts of PRIVATE COMPANIES.

If you're an American, now would be a good time to yell, "I'm as MAD as HELL, and I'm not going to take it anymore!"

Here's a video from Don Harrold that should get you fired up:




This is the greatest example of government tyranny since the days of Nazi Germany. Everyone should be up in arms. But the ignorant debt-slave sheeple are just happy that they still have their low-paying jobs at Walmart or McDonald's and their infinite lines of credit, while owning NOTHING.
 
Way to go America, land of the FREE, home of the BRAVE.

What is "indeflation"?

It's inflation and deflation, at the same time. And it's what's happening right now in the financial markets.

Let me explain to you how it works. As you may already know, inflation is a loss of purchasing power. Deflation is the opposite of that. So how can both be happening at the same time? Isn't that a paradox?

Right now, vast amounts of money are being wiped out as the Greenspan derivatives bubble finally implodes. There is no doubt that money is disappearing from the system at an alarming rate. As a result, prices are collapsing in just about every asset class, including commodities, and the dollar index has rallied from 70 to 80 in just a few weeks.

Yet, there is inflation going on as we speak. The dollar is losing its purchasing power. Just look at gasoline prices at the pump. Even though gasoline futures are now under $2.50/gallon (!), gas prices at the pump are unchanged! Check out the price of bullion on eBay. Just try to obtain any gold or silver at current spot prices. You will be faced with severe shortages. Bullion dealers are even offering to buy back bullion at a premium to the spot price!

Even though most asset prices are about the same as (or lower than) what they were in 2007, and even though the money supply has not grown at all, the dollar has lost purchasing power because you cannot obtain the same quantities of REAL STUFF that you once were able to obtain. The limitation is imposed by supply shortages, rather than price. The US dollar fantasy has finally slammed against the hard concrete wall of reality.

The cold reality is that the liquidity of the dollar has evaporated. The dollar is no longer liquid. Nobody wants dollars, even though the supply of dollars is dwindling. Basically, demand for dollars has dried up faster than supply. Demand for REAL things, on the other hand, is stronger than ever.

Remember how everyone was saying in 2007 that the global financial system was suffering a liquidity crisis? Well, now the US dollar is suffering a liquidity crisis. Soon, every currency in the world (since they are all backed by the dollar) will also become illiquid.

Check out the LIBOR rates this week. They were as high as 6%. The money markets are coming apart at the seams. All of this is indicative of a liquidity crisis in fiat currencies themselves. All signs are pointing toward indeflation. The REAL purchasing power of the dollar (and other fiat currencies) is going down at the same time as prices are falling and the US dollar index is rising.

A most dire thought ran through my mind... What if the US dollar has bottomed? What will happen between now and the US presidential elections?

Long-term trends in commodity prices would surely be broken if the US dollar staged any sort of rally. Already, the long-term bullish trends in palladium and oil have been broken (trends going back at least two years). Where will commodity prices be four months from now?

I have some rather shocking predictions which I hope will NOT come true, because if they do, the US will be going right back to its terminal oil addiction, and the world will not make the progress towards renewable energy that it needs to make.

I predict that by December, 2008, prices will be as follows (again, I HOPE this doesn't happen):

$55 a barrel oil

This has been predicted a while ago by Lindsey Williams, who has stated that the oil cartel will open up two gigantic oil fields: one in Indonesia and one in northern Russia. They will both be foreign, so America will continue to import its oil, when there is still plentiful oil under US soil sitting untapped.

$640 an ounce gold

We're going right back to mid-2007 levels. If you're invested in commodities, hold on to your gold because it will be the one commodity that will decline least. Gold is far less volatile than the other commodities, so you won't lose much if this scenario unfolds.

Canadian dollar at 84 cents US

This one seems almost incredible, but it will happen. The Canadian dollar is heading down, fast. Why? As commodity prices collapse, so will the Canadian dollar. Already it has broken down below a key level of support and it's now sitting at just 94 cents US! The resulting inflation, combined with extremely low oil prices, will push the Canadian economy over the edge into a recession. The only positive is that manufacturing would slowly return to Ontario thanks to the weaker dollar. Also, the lower Canadian dollar will cause Canadian commodity prices to decline less than in the US.

Collapsing commodities --
$11 an ounce silver
$1100 an ounce platinum
$200 an ounce palladium

Palladium will retreat to levels not seen since 2003. I have a feeling Russia has way more palladium than it's telling the world. Remember that palladium has only been mined for 200 years. Therefore, the total world reserves are still very uncertain. Also, palladium has virtually zero industrial applications. Plus, with cheaper platinum, the use of palladium as a cheap alternative to platinum in catalytic converters would decline substantially. Silver is also vulnerable because it's not gold. It's not held by central banks. The decline in all of these metals will be greater than the decline in gold. The prices I'm predicting are the absolute worst-case scenario bottom prices. So you might actually want to hold on to silver and platinum because the decline will be fairly small from where we are now.

And the October surprise will be...

The October surprise that will seal McCain's victory in November is this... are you ready for this?

Victory in Iraq

Yep! There. I said it. In October of 2008, the Iraq war will come to an end. Troops will be redeployed to Afghanistan temporarily while war plans are drawn up for a war with Iran, right after McCain's landslide victory.

You may wonder what sort of psychedelic drug I took to give me this level of clairvoyance. I'll tell you in November, right after all of my predictions are fulfilled :)

I've taken the liberty of coming up with a list of very specific things that I would do if I were US President...

• End all combat operations, in Iraq, Afghanistan, and elsewhere
• Bring those troops home and station them at the border (80% at the US-Mexico border, 20% at the US-Canada border)
• Place a permanent cap on military spending during times of peace (or undeclared war)
• Implement a GST (Goods & Services Tax), a national sales tax of 5% on all discretionary consumption goods
• Eliminate income taxes for incomes of $30,000 or less per year
• Institute a flat 20% income tax on all income exceeding $30,000
• Institute a 25% tax on gasoline and diesel fuel, to encourage the development of alternative technologies
• Give the US Treasury legal authority to produce silver coins and certificates
• Create a public education campaign on the benefits of using silver as opposed to Federal Reserve Notes as money
• Create a 3-year program for phasing out the legal tender status of Federal Reserve Notes and the Federal Reserve itself
• Give the federal government the authority to finance itself directly by issuing US Treasury bonds (denominated in silver dollars) rather than by borrowing from the Federal Reserve
• After the use of Federal Reserve Notes is phased out, finance the entire national debt using 30-year US Treasury bonds denominated in silver dollars
  
• Create a system of transfer payments between the states, where rich states give a small percentage of their tax revenue to poor states
• Create a 3-year program to move medicare, social security, and prescription drug coverage to the state level
• Eliminate the DEA and all anti-drug legislation, legalizing all drugs from cocaine to marijuana
• Eliminate the national minimum drinking age
• Get rid of the FDA and FCC
• Revamp the government statistics program so that official statistics are realistic again
• Create a federal (public) TV + radio station, with a clear mandate to provide balanced journalism, that competes with the private networks (like the CBC in Canada)
  
• Start a 10-year plan to develop an interstate rail system similar to the interstate highway system
• Deliver a state of the union speech with the sole purpose of telling the truth to the American people
• The speech would discuss false-flag attacks, the US constitution, the Federal Reserve, secret societies (CFR, Bilderberg, etc.), and who owns the private media
• The speech would conclude with, "My fellow Americans, we have nothing to fear but fear itself."

Of course, by the time I get to the silver stuff, I'd probably be assassinated, or some odd scandal would come up that would force me to resign, or I'd be impeached. Power always does what it wants folks. The owners of America would never allow any US President to do what I just stated.

Arguably the most important skill of any investor is the ability to predict the future. Why is this an important skill? Because investing is like placing a bet on a particular future outcome. If that outcome occurs, you can win many times your original investment. Take for instance Microsoft. If you could somehow have predicted in 1986 that Microsoft would take over the computing world, and placed money on that prediction by buying 1000 shares of Microsoft's stock, at 10 cents a share, you would now have $27,390 worth of Microsoft stock, from an initial investment of just $100. Predicting the future is clearly a lucrative skill.

Now, what if the primary goal for your investment strategy was less ambitious? Let's face it, Microsoft was just one tiny stock out of thousands. The chances of losing all your money were very high; over 95%; virtually certain. Not everyone has that kind of appetite for risk. Suppose you have $10,000 and want to primarily, above all, preserve its purchasing power for 50 years. How would you invest that money so as to minimize risk? How would you ride the waves of inflation and deflation safely into the future? Before we look at investment strategies, let's first look at what exactly happens to each asset class during inflation and deflation.

But before we can even do that, we need to define what it is we're talking about:

Inflation: When the value of money falls. As a result, prices generally rise.
Deflation: When the value of money rises. As a result, prices generally fall.
Steady State: When the value of money remains the same for a period of time.
Purchasing Power: The quantity of goods & services that can be purchased with a particular good or service

The Value of Money

Notice that in my definitions of both inflation and deflation I mentioned the value of money. What exactly is the value of money? How is it measured? It really depends whom you ask. But one definition which I believe to be the most correct is this: the value of money is the quantity of goods & services that one unit of money can purchase.

The CPI (Consumer Price Index) measures the price of a basket of goods & services. If you invert the CPI (take 100 and divide it by the CPI), you get the value of money. Thus, the value of money = 100/CPI. Why is this so? Recall that the value of money is the quantity of goods & services per unit of money. The CPI is the number of units of money (price) per (fixed) quantity of goods & services. Therefore, 100/CPI is the (fixed) quantity of goods & services per unit of money. That is none other than the value of money.

Note how we defined purchasing power. The value of money is exactly the same thing as the purchasing power of money. Keep this in mind for later on.

Asset Classes

Three asset classes are considered for this discussion. They are:

• Resources (Commodities)
  
• Obligations (Money, Bonds)
• Capital (Stocks, Real Estate)
  

Each asset class behaves differently during inflation and deflation, so let's take a look at each of these.

Resources

Resources are your typical commodities and hard assets. They are the physical products of an economy. They are no one's liability. Gold and silver, though considered monetary, are included in this category because they are not debt-based.

Whether it's inflation or deflation, resources (a.k.a. hard assets) are guaranteed to preserve their purchasing power. They are only subject to the laws of supply & demand. The value of money theoretically has no effect on the purchasing power of these assets, because purchasing power itself is measured in terms of hard assets. It is impossible for hard assets to lose or gain purchasing power, except through fundamental changes in supply and demand. Hard assets are a hedge against both inflation and deflation, in that they never lose purchasing power.

Many argue that deflationary periods cause hard assets to lose purchasing power. They argue that hard assets are only a hedge against inflation, not deflation. That is not the case. If milk goes down from $5 a gallon to $4 a gallon and you purchased 2 gallons of milk at $5 a gallon as an investment, rest assured that you'll still be able to exchange your 2 gallons of milk for 2 gallons of milk at any time. Now, suppose gasoline cost $2.50 a gallon prior to the deflation and $2.00 a gallon after the deflation. Before the deflation, your 2 gal of milk could buy 4 gal of gas. Guess what? After the deflation, your 2 gal of milk can still buy 4 gal of gas! As long as the supply-demand fundamentals remain the same for both items, the ratio between milk and gas prices will remain the same whether there's an inflation or a deflation.

In a steady state, something interesting happens. Resources fall in price, because production is increased. However, once again resources preserve their purchasing power, by definition.

Obligations

Obligations are of a different nature than resources. They are somebody's liability. Governments, corporations, and even individuals can finance themselves by issuing bonds. Money is also in this category because all money is created from debt.

In an inflationary period, stay away from obligations that pay less than the inflation rate in interest. Why? Suppose you hold a bond that pays 5% interest and the inflation rate is 7%. You're guaranteed to lose 2%. Worse still, the bond will have to collapse in price so that the interest rate can rise above the inflation rate. The same goes for money. In an inflationary period, money is by definition losing purchasing power.

In a deflationary period, however, money is the place to be. Debt is hoarded, especially if it pays an interest rate, no matter how small. Suppose the inflation rate is -1%. Now, suppose you hold a bond that yields 3%. In reality, you gain 4% in purchasing power. Plus, the bond will also have to appreciate in price so that the yield can fall to about 0% because it is too high above the inflation rate. Either way you win.

In the steady state, obligations generally gain in purchasing power, because interest rates always tend to be higher than the rate of inflation. For example, inflation might be 3% and interest rates might be 6%. In that case, you would be gaining 3% in purchasing power.

Capital

So what is capital? Anything that helps produce income. Stocks and real-estate are very similar to hard assets, but they are actually capital, because they help produce the goods in an economy. Also, both of these assets produce income. Stocks produce income through dividends or if the company's market cap expands. Real-estate produces income through rent. Real estate is very closely tied to stocks. If stocks do poorly, so does real estate, because as companies lose income, stocks fall, people lose jobs, and there is less money available for buying real estate.

Whether it's inflation or deflation, capital will lose purchasing power. In an inflationary period, income from stocks is weakened because input costs rise. The higher input costs are initially swallowed and not passed on to the consumer. The result is shrinking balance sheets. Real estate also suffers because people lose jobs, so there is less money for buying houses. In a deflation, it is a similar story. Deflation means that people prefer to save money rather than spend it. As a result, company balance sheets shrink (this time sales shrink, rather than input costs rising). The result is people lose jobs, less money for real estate, etc.

So what is a good time for capital? When neither inflation nor deflation are occurring. In other words, when the economy is in its normal steady state, capital tends to do very well.

Conclusion

So let's conclude by summarizing what the best investments are for each of three possibilities:

• Inflation
  100% Resources
  
  
• Deflation
  80% Obligations
  20% Resources
  
  
• Steady State
  50% Capital
  30% Obligations
  20% Resources
  

I used the 80-20 rule for things that gain in purchasing power versus things that only preserve purchasing power. Now let's suppose that over the next 50 years, there's a 60% chance of steady state, a 25% chance of inflation, and a 15% chance of deflation. What should your portfolio look like?

Final Portfolio

30% Capital
30% Obligations
40% Resources

Real-World Example (Canada)

30% S&P/TSX 60 Index (XIU)
30% DEX Bond Index (XBB)
40% Central Fund of Canada (CEF.A)

Real-World Example (US)

30% Vanguard Total Stock Market ETF (VTI)
30% 20+ Year Treasury Bonds (TLT)
40% PowerShares DB Commodity Tracking Fund (DBC)

I was reading the article about it on Wikipedia and came across several interesting things. But before I go into that, here's what Wikipedia has to say about the Georgia Guidestones:

"The Georgia Guidestones are a huge granite artifact in Elbert County, Georgia, USA. It is sometimes referred to as the "American Stonehenge"^[1], a title which has been applied at times to a number of other structures."

So, as I mentioned earlier, I found a few interesting things in the article...

1. It was erected on March 22, 1980. March 22! ... 322! That's the number used by Skull & Bones. These people are obsessed with numerology!
2. It was written in several ancient languages including Sanskrit, Babylonian, and ancient Egyptian hieroglyphs! At this point, it became clear what the intent was. It was to make a monument that could be unearthed and understood by future archaeologists. Like the Rosetta Stone. It's an archaeological artifact meant for future civilizations.
   
3. The stones themselves weight about 42,000 lbs each and are astronomically aligned. Why the astronomical alignment? Well, because future civilizations will be able to tell the time when the monument was erected by using past star alignments, in the same way that the Great Pyramid was found to be about 10,000 years old based on its astronomical alignment.

Clearly, the purpose of the Georgia Guidestones is to send a message into the future - several millennia into the future in fact.

So what is the message? It is this...

MAINTAIN HUMANITY UNDER 500,000,000
  IN PERPETUAL BALANCE WITH NATURE
GUIDE REPRODUCTION WISELY —
  IMPROVING FITNESS AND DIVERSITY
UNITE HUMANITY WITH A LIVING
  NEW LANGUAGE
RULE PASSION — FAITH — TRADITION
  AND ALL THINGS
    WITH TEMPERED REASON
PROTECT PEOPLE AND NATIONS
  WITH FAIR LAWS AND JUST COURTS
LET ALL NATIONS RULE INTERNALLY
  RESOLVING EXTERNAL DISPUTES
    IN A WORLD COURT
AVOID PETTY LAWS AND USELESS
  OFFICIALS
BALANCE PERSONAL RIGHTS WITH
  SOCIAL DUTIES.
PRIZE TRUTH — BEAUTY — LOVE —
  SEEKING HARMONY WITH THE
    INFINITE
BE NOT A CANCER ON THE EARTH —
  LEAVE ROOM FOR NATURE —
    LEAVE ROOM FOR NATURE

I found two articles that confirm my view that the US is currently insolvent...

The United States is Insolvent (by Dr. Chris Martenson)

Is the United States Bankrupt? (Google cached version)

Sign of a Speculative Bubble?

It is very possible that the recent rise in oil prices (after Hurricane Katrina) be due entirely to speculation. In fact, it is very possible that oil is in a gigantic bubble right now, just about to burst.

To understand why, let's go back to 1998 and check out what prices were like back then...

Oil: $16/bbl
Gasoline: $1.10/gallon

Now return to the present (2008) and check out what the prices are...

Oil: $135/bbl
Gasoline: $4.11/gallon

Something looks odd...

Did you catch it?

Oil went up 744%. Gasoline went up only 274%.

Since gasoline is produced directly from oil, this doesn't add up. Either gasoline would be $9/gallon today or oil would be $60/bbl. The oil-gas ratio was about 15 in 1998. Today, it's 33.

In other words, gasoline today is ridiculously cheap given the rise in the oil price. None of the oil price has filtered through to the cost of gasoline. The oil price is inflated 120% over "normal" levels. Oil would need to return to a price of $61/bbl to be "in line" with the price of gas at the pump.

Historical Perspective

Let's see how this ratio has varied over the ages (all-time highs are in bold type)...

1973 - 18
1978 - 23
1979 - 41
1980 - 28
1983 - 25
1988 - 19
1990 - 24
1993 - 17
1998 - 15
2000 - 19
2003 - 18
2004 - 27
2005 - 30
2006 - 26
2007 - 30
2008 - 33

The only time when the ratio was higher than it is today was in 1979! And we all know what happened that year. That year the 1970s oil bubble peaked. Huge inventories were suddenly "discovered" in 1980 and released onto the market.

Conclusion

The numbers confirm my hypothesis that this is a speculative bubble, which has been in force since 2005 and really picked up steam in late 2007. This oil-gas ratio of 33 cannot be sustained for much longer. Either gasoline will have to go up in price substantially (i.e. up to $8 or $9 a gallon!) or oil is set for a spectacular crash (from $130 down to $65 a barrel!). If I were an investor right now, I'd go long gasoline. It is ridiculously cheap right now.

The emperor has no clothes! The emperor has no clothes!

The collapse of Freddie & Fannie is the admission of the insolvency of two companies together holding about $5 trillion...
$5 TRILLION
in mortgages.

$5 trillion amounts to about 35% of US GDP, and about 50% of the US public debt!

We're talking about 35% of the entire US possibly being insolvent!

Here's a revealing video of what could happen now...

We are about to enter the last inning of the biggest financial unwinding in the US since 1979. There must be a reason why the gold price surged this week to almost $990 per ounce, during a time of extreme seasonal weakness.

Here's some data that will shock you:

• IndyMac which failed last week was 3 times bigger than all the bank failures since 2000 combined!
  IndyMac had $32 billion in total assets.
• The bond market is finally turning south. We are talking US treasuries here. These have been in a bubble since late 2007.
• A collapse of US treasuries would force the Fed to raise interest rates. Watch out! The Fed may raise interest rates early, and fast! Rising interest rates are the final step in this paper-bearish gold-bullish cycle.
• Oil fell the most in 17 years today.

I urge everyone to read this article: "What if gold gave a party and everyone came?"

What is transpiring here is nothing short of a perfect storm for gold. There are no other assets to be long right now. Oil is weakening. Housing has lost favor. The dollar is certainly not bullish. All US stock indices are falling precipitously. And now the last safe haven, treasury bonds, is overbought and crashing.

Next steps:

• Fed will raise interest rates surprisingly high, surprisingly fast. They will be forced to.
• More US banks will fail. Main Street banks where your average American holds money.
• The words "depression" and "hyperinflation" will come to be used to describe the US financial situation.

Sit back and relax because the show has just begun!

In this segment, I give you my view of where certain stocks/indexes/commodities will go during the next week, based on my own research into technical trends. I also look at my previous week's calls to see what I got right and what I got wrong.

Let's begin...

But first, last week's score: 4.5 / 6 (okay)

1. US Dollar Index

Last Week's Prediction: LONG (Stop 72)... HALF RIGHT (got the stop right)

Right now, the US dollar is at 71.89. This is lower than last week but it's not an all-time low. For next week, a short rally is to be expected followed by more downside. I'd jump in short on the next rally.

My call: SHORT
Stop: 72.70

2. Dow Jones Industrial Average

Last Week's Prediction: SHORT (Stop 11,450)... RIGHT

The Dow took its embedded stochastic and fell some more. It's sitting at 11,100 now. If you went short on 11,290 you'd be about 1.7% up. Continue to be short but take 50% off the table. Move your stop in to 11,240. Enjoy.

My call: SHORT
Stop: 11,240

3. Gold

Last Week's Prediction: LONG (Stop $925)... HALF RIGHT

OK I'll admit it - I was wrong about my stop. Gold fell to $918 this week then rallied all the way to $970! If you held in there, good for you. Otherwise, you just missed a gigantic move to the upside. I'd continue long but narrow my stop over to $945. Don't put too much money on the table now because resistance at 1000 is a sure thing.

My call: LONG
Stop: $945

4. Silver

Last Week's Prediction: LONG (Stop $17.70)... RIGHT

Unlike gold, I got silver spot on! (Pun intended). The pullback happened exactly as I described and if you hung in there with your long position you'd be up about 3.8%!! Booya! What's next? A slight pullback to $18.20 then the moon! $21 is the next stop to the moon so put your stop at $18.20 and continue long and enjoy the ride.

My call: LONG
Stop: $18.20

5. Crude Oil

Last Week's Prediction: LONG (Stop $140)... HALF RIGHT

Oil plunged to $137 this week then recovered to above $142. Not bad but not good either. If you were stopped out great. Now's the time to load up again. Keep trying that $140 stop with your long position. Something's bound to happen.

My call: LONG
Stop: $140

6. Pick of the Week - Platinum

I think platinum is going to make a move next week. Usually platinum leads gold and silver in rallying but this time it was the other way around. In fact, platinum has been sitting idle for months now. Resistance at $2100 is futile. Go long, put a stop at $1950 and enjoy.

My call: LONG
Stop: $1950

Last Week's Pick:

Remember last week I picked NVIDIA. I told you to go long after the stock had crashed 30%! I told you to put your stop at $10 (to allow for a bit more downside). Now, generally stocks like NVIDIA are for the long-haul so what happens in a week is pretty meaningless. However, this week NVIDIA didn't fall much. It fell to $11.67 a share. I was DEAD ON ACCURATE!

I stumbled upon this article randomly today...

Atheist soldier sues government

The headline got me to thinking: What business does a Christian have being a soldier? Isn't that an oxymoron? Shouldn't the army be composed entirely of atheists?

Here's how I got there...

The Bible, a text that is somewhat respected by Christians, says that you must fear God and respect His commandments. Why? Because if you don't obey God's commandments, you go to hell. At least that's what Christians believe.

So what are God's commandments? Well, one of them is "Thou shalt not kill."

So how come we have Christian soldiers? The job of a soldier is to kill. It is the ultimate oxymoron.

But is the commandment of "Thou shalt not kill" even practical? I mean, what if God meant that you shouldn't kill ANY living organism? Think about how many bugs you killed in your life.

This is why I enjoy being an atheist. I don't believe in an invisible man and I don't follow ridiculous "commandments" like "Thou shalt not kill" which are totally impractical in life.

And I know at least one person who agrees with me...

Need I say more?

I'm going to be as blunt as possible by putting several important historical truths in point form. These are all facts.

WARNING: You may be deeply disturbed by what I'm about to say. But I'll say it anyway.

1. Prince Philip, husband of Queen Elizabeth II, is quoted as saying, "In the event that I am reincarnated, I would like to return as a deadly virus, in order to contribute something to solve overpopulation."
2. The United States of America is a British private corporation. All US courts have a gold-fringed flag to indicate maritime admiralty (the law of the sea). Maritime admiralty is a system of international laws governing international commerce (done by merchants). ("mer"="sea" in French)
   
3. Franklin Delano Roosevelt, on April 5, 1933, issued an executive order requiring all American citizens to turn over their gold bullion to the Federal Reserve, or be subjected to a $10,000 fine. He enforced this executive order even though it was not in his jurisdiction to do so (executive orders only apply to persons in the US federal government).
4. The attacks of Pearl Harbor were aided by the US government. Not only did US officials have prior knowledge of the attack, they let it happen, so that it could be used as a pretext to enter World War II.
   
5. The sinking of the Lusitania in WWI was a staged event. It was done in order to gain public support for the US entering World War I.
6. The dropping of not one but two atomic bombs on Japanese civilians, authorized by Harry Truman in World War II, was an act of genocide by the United States of America. Japan had already surrendered.
   
7. The Vietnam War lasted 16 years, resulted in 58,000 American casualties, and over 1 million Vietnamese civilian deaths. It was a worse genocide than Hiroshima and Nagasaki combined, and neared the magnitude of the Holocaust.
8. Henry Kissinger often referred to military men as "dumb, stupid animals to be used as pawns for foreign policy."
9. The twin towers of the World Trade Center, along with WTC 7, were demolished in a controlled fashion using thermite on September 11, 2001.
   
10. Rudolph Giuliani hired a private company after 9/11 to carry away all molten metal debris from ground zero to private, guarded trash dumps so that no investigation could be carried out into what actually caused the buildings to collapse.
    
11. Dick Cheney ordered NORAD to stand down on September 11, 2001, while the attacks were taking place.
12. When asked to testify before the 9/11 commission, George W. Bush insisted that he testify only together with Dick Cheney (not separately).
    
13. The air near ground zero was unsafe to breathe on 9/11 and as a consequence thousands NYC citizens are experiencing respiratory illnesses. However, the EPA has consistently denied any link between the air quality after 9/11 and these illnesses.
14. The Gulf of Tonkin incident during the Vietnam War was a staged event, just like the Lusitania, and just like Pearl Harbor. It was used to justify an escalation of the Vietnam War because the public's approval of the war was vanishing.
    
15. George W. Bush received a warning stating "Bin Laden determined to attack in the United States," a few months before 9/11.
16. In 1972, Chester M. Pierce, a Professor at Harvard University, stated: "Every child in America entering school at the age of five is insane because he comes to school with certain allegiances toward our founding fathers, toward his parents, toward a belief in a supernatural being. It's up to you, teachers, to make all of these sick children well by creating the international child of the future."
17. David Rockefeller stated in 1991: "We are grateful to the Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries."
18. Under the Treaty of Lisbon, the EU is officially a sovereign entity, with a privately-owned Central Bank, a European Court, a Parliament, and a President. The EU has its own flag, anthem, and currency.
19. The British Crown owns and directs almost all of the world's wealth. The current system of global commerce (a.k.a. globalization) is entirely set up and controlled by the British Crown.
20. Osama bin Laden remains at large. He is on dialysis and presumed dead, yet videos of him still surface occasionally.
    

To be continued...

In this segment, I give you my view of where certain stocks/indexes/commodities will go during the next week, based on my own research into technical trends. I also look at my previous week's calls to see what I got right and what I got wrong.

Let's begin...

But first, last week's score: 5 / 6 (excellent)

1. US Dollar Index

Last Week's Prediction: STAY AWAY... RIGHT

Right now, the US dollar is at 72.72. This is less than 0.5% higher than last week. There was no major change, so my call to stay away was right. Now, for next week, you should expect a rally in the dollar, to over 73 and maybe even over 74. Place your stop on 72.00 and enjoy.

My call: LONG
Stop: 72.00

2. Dow Jones Industrial Average

Last Week's Prediction: SHORT (Stop 11,700)... RIGHT

The Dow took its embedded stochastic and fell, but not by much. It's sitting at 11,290 now. If you went short on 11,350 you'd be about 0.54% up. Continue to be short. Move your stop in to 11,450. Enjoy.

My call: SHORT
Stop: 11,450

3. Gold

Last Week's Prediction: SHORT (Stop $930)... RIGHT

Last week I called gold SHORT. Well, gold called my bluff by crashing (up) through $930. If you placed your stop on $930 you would not have lost anything. The spike up to $950 was nothing, so you couldn't have gone long either. But now, gold's stochastics are starting to embed (on the BUY side). Gold is at $934 now. Go long with $925 as your stop.

My call: LONG
Stop: $925

4. Silver

Last Week's Prediction: SIT TIGHT... WRONG

If you followed my prediction and stayed out of the silver market, you would've not lost any money, but you would've stayed out of a very nice rally. My predicted pullback to $16.80 never materialized.

Silver now is sitting at $18.15. I could not be more bullish on silver right now. We may see a pullback to $17.70 but there's the very high chance that silver will challenge $19 next week and maybe even make it up to $20.

My call: LONG
Stop: $17.70

5. Crude Oil

Last Week's Prediction: LONG (Stop $140)... RIGHT

Oil struggled this week. Although it hit $146 at one point, it's back down to $144. If you went long last week you would've made about 2% on your investment. What should you do now? I'm waiting for a pullback to $140, but then we should see crude challenge the $150 area. However, if we fail to hold $140 next week, all my money will be on the short side at that point. In any case, reduce your long position.

My call: LONG (cautiously)
Stop: $140

6. Pick of the Week - NVIDIA

Everyone knows NVIDIA. They make excellent graphics cards. So why did they fall 31% today? Earnings forecasts weren't very good. However 31%? It seems like an over-reaction, and a great time to buy this amazing company at a discount.

My call: LONG
Stop: $10

Last Week's Pick:

Remember last week I picked the S&P/TSX Composite. I told you to go short. Well, I was RIGHT! It never touched 14,500 but it came close... my stop was DEAD ON accurate! Now it's down to 14,000 and you'd be foolish not to take a profit at this point. Hope you enjoyed the ride!

May 5, 2018. Somewhere in New York City.

It was just after 10:00am on a Saturday and Richard and his 7-year-old son, Jake, were getting close to Central Park. It was a wonderful spring day, and the fresh breeze almost made Richard forget that he hadn't gotten much sleep last night.

As they got closer to the park, Richard started remembering the dream he had where the Empire State Building collapsed in a huge cloud of smoke. Then, he remembered World Trade Center and the attacks that took place on September 11th. He couldn't remember the exact year, but he could remember that, on that day, he was in his high school music class and the music teacher came in with a radio describing the attacks as they unfolded.

Richard: "Hey, Jake, you know, back when I was a kid there were these two towers in New York City called the World Trade Center. They were huge! Over 100 stories tall. Then one day, there was an attack by some evil people, who crashed two airplanes into the towers. And the towers fell down and lots of people died. And the planes were full of people too! It was a horrible tragedy."

Jake: "Wow. That must've been so sad... Hey dad, what's an airplane?"

Richard: "You don't know what an airplane is? I thought they taught you in school... It's a machine that people used to fly around in. Like a giant bird, made of metal. And people could live in it, while it flew high above the Earth!"

Jake: "Awesome! How come we don't have airplanes anymore?"

Richard: "Well, it's complicated... I'll tell you when you get older."

Jake: "Oh... Daddy, I want to fly too."

Richard: "Hey, you never know. Maybe someday we'll be able to fly again."

(To be continued...)

Last week, I did my first installment of my "Weekly Market Calls."
In this segment, I give you my view of where certain stocks/indexes/commodities will go during the next week, based on my own research into technical trends. I also look at my previous week's calls to see what I got right and what I got wrong.

Let's begin...

But first, last week's score: 2.5 / 6 (pathetic)

1. US Dollar Index

Last Week's Prediction: LONG (Stop 72.90)... HALF RIGHT

If you went long on 73.04 with stop on 72.90, you would have lost 0.19% (1.9% leveraged 10:1). Not a major loss, but I admit I got this one totally wrong. However, I did get the stop right.

Right now, the US dollar is at 72.37. This is not a bad time to cover your shorts (if you went short). Why? Because we are hitting the bottom of the Bollinger bands, so my prediction is the US dollar will rebound next week but it may fall further by the end of the week. There is too much uncertainty to go long though.

My call: STAY AWAY!

2. Dow Jones Industrial Average

Last Week's Prediction: LONG (Stop 11,800)... HALF RIGHT

Boy did I ever get this one epically wrong! However, with that tight stop in place you would've lost only 0.4%! I got the stop right, but I got the direction wrong.

The Dow took a beating late this week, or better said, it crashed like it was 1929. For the moment stochastics are getting embedded, which means SELL the next rally. This is a classic case of a downward spiral, and we may have a lot more downside room remaining. My feeling is we could see Dow 8,800 before we level off.

My call: SHORT
Stop: 11,700

3. Gold

Last Week's Prediction: LONG (Stop $890)... HALF RIGHT

Gold fell through $890 down to $880, so if you followed my stop you would've been stopped out. However, if you only followed my call, you would've been right (and up by 2.8%).

Gold is now extremely overbought. I'm looking for a (potentially sharp) pullback next week to perhaps as low as $876. I'd be willing to venture a short here with my stop on $930. If you went long, SELL SELL SELL...NOW (unless you can stand losing 5% next week).

My call: SHORT
Stop: $930

4. Silver

Last Week's Prediction: LONG (Stop $17.00)... HALF RIGHT

Well, this week silver fell well through my stop of $17.00, so on that part I was wrong. However, I was right about going long, because silver is up 1.8% on the week.

Next week, I see a pull-back to the $16.80 area, before the next rally. I certainly wouldn't go long at this point, nor would I go short. Just sit tight, and if you went long last week, reduce some of your position now.

My call: SIT TIGHT

5. Crude Oil

Last Week's Prediction: SHORT (Stop $140)... HALF RIGHT

Well, last week I told you crude was overbought and would probably break down. I was wrong on that part. Crude just burst through $140 today! However, my stop was DEAD ON ACCURATE.

Now that we've busted through the "psychological" $140 number, it's basically smooth sailing ahead (and up). This one is easy to call: Go long, set your stop at $140, and enjoy the ride!

My call: LONG
Stop: $140

6. Pick of the Week - S&P/TSX Composite

The Canadian version of the Dow has been doing quite well this year. However, has the tide turned? The chart looks ominously bearish. There's a triple top, followed by a break-down. However, for the medium term, we're looking at a potential rally back to the 50-day moving average at 14,500. So if you're going to go short, set your stop there. In any case, this is NOT a bull market.

My call: SHORT
Stop: 14,500

Last Week's Pick:

Remember last week I picked palladium. Well, as it turns out, palladium is down now but only by a bit. My call was wrong and my stop was wrong, so I got that one TOTALLY WRONG. Oh well...

Today, the Dow just crashed below the all-important 11,800 support level... and all hell broke loose. Here's a collection of MAINSTREAM articles that just came out showing the gravity of the situation:

CNN Money - "Buffett vs Bernanke: The Inflation Showdown"

New York Times - "Fuel Prices Shift Math for Life in Far Suburbs" (i.e. the end of suburbia!)

USA Today - "Hitting Home: New faces join ranks of the homeless"

The last one reminds me of a prophetic quote by Thomas Jefferson:

"If the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."

But on the plus side, gold is up today...by nearly 3%!

Remember how, before its collapse, Enron was driving up energy prices in California through unregulated futures trading?

Remember how traders at Enron cheered every time a transformer burned out or every time there were forest fires?

Well, try applying this idea to oil. How do you control the oil market? If you make a country politically unstable to shut off its oil supply, what happens to the oil price?

This is exactly what Iraq was about. It was NOT about gaining access to "highly valuable" oil supplies. It was NOT about finding those weapons of mass destruction. It was NOT about Iraqi freedom!

It was about DESTROYING oil supply in order to drive up oil prices!

Just like Enron, the cartel controlling oil which included Bush, Cheney, Haliburton, and the Carlyle Group, decided it was time to boost profits for their little share of the oil industry by creating events which would lead to a rise in oil prices.

Think about it: Bush & Cheney live off-grid, independent of oil. In fact, they're some of the "greenest" individuals in America! There's a good reason for this, and it has nothing to do with peak oil. It has everything to do with the fact that they knew that they would cause an oil price spike of gigantic proportions and they simply didn't want to be paying those high prices. I mean, what good is a rising investment if you then have to pay more for the things you need?

Right now, for example, the price of oil is significantly higher than all other commodities. It's out of sync. The gold-to-oil ratio which has traditionally stayed around 15, is now below 7! Oil is at a ridiculously high price even when priced in gold! That cannot be explained by inflation alone.

Even more puzzling is the fact that oil supplies have remained flat or declining since about 2003. Now, you could say peak oil has arrived, but I think far more likely is that supply has been deliberately kept at that level. Why? First of all, peak oil theory does not predict a flat line longer than about a year. The current flat-lining for 5+ years is HIGHLY atypical of peak oil. Second, look at Venezuela's internal oil prices. They are ridiculously low! This indicates Venezuela is not exporting as much oil as it could be. Look at China, which is subsidizing the cost of oil without a problem. There seems to be plenty of oil to go around, but somehow it does not reach the global market. The PRIME reason for the flat oil supply in the past 5 years is NOT peak oil! It is political instability! Iraq's oil supply has dropped significantly since the invasion. And Venezuela (since the arrival of Chavez) has had its supply fall off as well. By "supply" I mean the amount of oil reaching the global market. We have a situation which is much more like the oil shocks of the 1970s than a global peak in oil production.

So now, naturally, Bush & Cheney are talking about invading Iran. McCain is even singing about it! There's a good reason for this. Iran has a fairly large oil reserve that is coming to market rather undisturbed right now. If they could go in there and f**k things up (to use Cheney's language), oil would go through the roof!

So there you have it folks, a perfectly logical explanation for why oil prices are so high, and why America's increasingly getting bogged down in unnecessary wars. Much of America's military involvement in the world right now is related to cornering the oil market.

In the long run, though, this strategy will backfire for the oil industry. Why? Because when enough people stop consuming oil, the price will crash and the price will end up LOWER than where it started because demand has been destroyed. The massive stockpiles of oil will then be revealed and rapidly released into the market, driving prices even lower. So, they may be able to game the system for now, but sooner or later the system will be gaming THEM.

Aside: Have you noticed Alan Greenspan going to the Saudis telling them to de-peg their currency from the dollar? Why would he want to do that? Do you think he has ANY concern for the Saudis' financial well-being? I think he just wanted the Saudis to get into trouble with the US so that the Saudi oil supply would be disrupted, driving up oil prices even more. There seems to be a lot of sabotage going on if you look for it, where agents of the US government (like Alan Greenspan) are going around trying to deliberately get the US into trouble with other countries.

I'm starting a new segment on this blog known as the "Weekly Market Calls."
I'll be giving you my view of where certain stocks/indexes/commodities will go during the next week, based on my own research into technical trends. Every week (starting next week) I'll also be looking at my previous week's calls to see what I got right and what I got wrong.

Let's begin...

1. US Dollar Index

The US dollar is at a temporary low of 73.04 right now, just touching the 50-day moving average. I see the dollar moving higher next week, possibly taking out the 74 level decisively. This is on a purely technical basis. If you are short, definitely cover some of your position now.

My call: LONG
Stop: 72.90

2. Dow Jones Industrial Average

The Dow is at a very dangerous low right now of about 11,850. This may look bearish but my gut says this is a bear trap. The stochastics are dangerously oversold. I would NOT want to be a bear right now. I'm looking for the Dow to rally next week, but I'd be cautious about going long or short (short especially).

My call: LONG (with caution)
Stop: 11,800

3. Gold

Gold has rallied nicely and seems to be staying above $900. However, it is in a medium-term bear trend. In the stochastics, it is getting slightly overbought. I'm looking for a minor pull-back in gold next week but it's definitely nothing to trade on. There's a nice base of support at $890 so if you're bullish you might go long at this price.

My call: LONG
Stop: $890

4. Silver

Silver is making a turn-around toward bullish after being very oversold for several weeks and maintaining a solid bottom at about $16.50. I would be a bull right now simply because silver is sitting right on its key support (of several moving averages). Support is at $17.10. With respect to silver, I'm bullish as can be.

My call: LONG
Stop: $17.00

5. Crude Oil

Crude is overbought right now and it's making lower lows and lower highs. There is major psychological resistance at $140. This is not good and is an indicator of weakness. The stochastics have turned down and it could be that we'll finally see a major sell-off in crude next week. I would take my chances and go short crude next week. The downside target is a juicy $122. I'd put my stop right at the $140 resistance level and see how it goes.

My call: SHORT
Stop: $140

6. Pick of the Week - Palladium

Ah! My favourite precious metal! Palladium in case you haven't noticed is making higher highs. It has turned around after a major sell-off. It is however very high above all averages right now. Could it run higher? Sure. Could it pull back? Of course! I would definitely not be short right now (there's not much downside). So what else can I be but long?

My call: LONG
Stop: $420

A note about the Pick of the Week:

Every week I will choose one additional item to report about (different from the previous week). It'll be my way of keeping things interesting.

The era of cheap labour is ending. Here's how I came to that realization:

The average wage of Chinese workers in 2007 was around 25,000 yuan per year, according to this article. This was an increase of 19% over the previous year! Now, keep in mind the yuan is artificially pegged to the US dollar. China could at anytime choose to revalue its currency versus the US dollar. In fact, the RMB is rising right now, so the average wage increased by more than 19% in US dollars! Taking the USD-RMB exchange rate into account, the average wage in China actually increased about 27% in US dollars in 2007.

In India, the story is the same. In 2007 alone, the average wage of Indian workers rose by 14%! And if you look at the rupee, the exchange rate went from 44 INR to 1 USD in early 2007 to 39 INR to 1 USD in early 2008. In total, Indian wages rose 28.6% in US dollars in 2007!

What does it mean when wages in the traditionally-cheap countries are rising at about 28% per year in USD dollar terms? It means US companies will soon run out of places to exploit cheap labour. It means the average American will soon start paying more for manufactured goods but at the same time the average American worker will finally have some bargaining room in terms of wages. This all seems to point toward a nasty wage-price spiral coming soon in the US. Bernanke has repeatedly stated that US dollar devaluation will only cause the prices of imported goods to rise. Either he is an idiot, or he is deliberately lying, because I've just demonstrated how US dollar devaluation can cause US workers to receive higher wages, which in turn can fuel domestic inflation through the dreaded wage-price spiral. America, you have been warned.

I hate to be the bearer of bad news, but it appears we have problems bigger than just Canadian copyright laws.

In an article by Paul Joseph Watson on PrisonPlanet.com,

"

• Time magazine reported last year that researchers funded by the federal government want to shut down the internet and start over, citing the fact that at the moment there are loopholes in the system whereby users cannot be tracked and traced all the time.
The projects echo moves we have previously reported on to clamp down on internet neutrality and even to designate a new form of the internet known as Internet 2.


• In a display of bi-partisanship, there have recently been calls for all out mandatory ISP snooping on all US citizens by both Democrats and Republicans alike.
  
  
• The White House's own recently de-classified strategy for "winning the war on terror" targets Internet conspiracy theories as a recruiting ground for terrorists and threatens to "diminish" their influence.
  
  
• The Pentagon recently announced its effort to infiltrate the Internet and propagandize for the war on terror.
  
  
• In a speech last October, Homeland Security director Michael Chertoff identified the web as a "terror training camp," through which "disaffected people living in the United States" are developing "radical ideologies and potentially violent skills." His solution is "intelligence fusion centers," staffed by Homeland Security personnel which will go into operation next year.
  
  
• The U.S. Government wants to force bloggers and online grassroots activists to register and regularly report their activities to Congress. Criminal charges including a possible jail term of up to one year could be the punishment for non-compliance.
  
  
• A landmark legal case on behalf of the Recording Industry Association of America and other global trade organizations seeks to criminalize all Internet file sharing of any kind as copyright infringement, effectively shutting down the world wide web - and their argument is supported by the U.S. government.
  
  
• A landmark legal ruling in Sydney goes further than ever before in setting the trap door for the destruction of the Internet as we know it and the end of alternative news websites and blogs by creating the precedent that simply linking to other websites is breach of copyright and piracy.

...
"

The plan is to shut down the Internet as we know it today and start up a new highly-supervised Internet known as Internet 2.0, which will resemble cable TV, with a few corporations controlling all content.

Enjoy!

(BTW, in Sydney I could be breaking copyright laws by just linking to things! Yikes!)

M2 money supply in 1930s = $40 billion
Gold price in 1930s = $35/oz
Silver price in 1930s = $1.30/oz

M2 money supply today = $7.7 trillion
Expected Gold price today = $6,700/oz (7.5 times today's actual price!)
Expected Silver price today = $250/oz (15 times today's actual price!)

Conclusion:
As the legendary Mogambu Guru (Richard Daughty) would say, We're freakin' doomed!

You should be able to buy a very decent house with 60 oz of gold or 1500 oz of silver.

Instead, with today's prices, it takes over 400 oz of gold (over 22,000 oz of silver!).

Those who hold gold & silver will be greatly rewarded in the years to come.

This is how FOX and other networks lie to you all the time for profit.

(This is an excerpt from the documentary, "The Corporation." Watching the rest of the documentary is highly recommended.)

Washington, DC, June 8, 2018 - Today, President Paul responded to some questions from the press about the US government's policies. Speaking at the White House, he responded to criticism that his energy policy was not doing enough to reduce America's dependence on foreign oil. He also addressed issues about the national debt and the economy. Here is a transcript of that meeting:

Reporter: Since the collapse of the airline industry in 2012, nothing has been done to improve the speed of railroad transportation between distant cities. Moreover, some of our railroads still run on diesel, which is now over $20 a gallon. A lot of folks are just stuck because they can't afford the high fares. It costs over $5000 to go from Atlanta to Miami! What are your plans for improving our railroads, Mr. President?

President Paul: As I stated many times, it is not within the federal government's mandate to improve the design of our railroads. All we can do is regulate railroad travel between states. It's up to the states and private corporations to decide how they will address this issue.

Reporter: But, Mr. President, wouldn't the government be able to provide subsidies or tax incentives to the railroad companies? Why do we still subsidize the two remaining oil companies, Exxon and Shell? Couldn't we shift those subsidies to the railroad industry?

President Paul: I am planning to remove the subsidies for the oil companies as soon as possible, but I need to speak with the directors of those companies first to reach a deal. Folks, I know it sounds tough, but we need to cut spending. Our national debt is $20 trillion! Do you want to leave this kind of debt to your children and grand-children to pay off? We have to rely on the free market as much as possible to solve our problems. Otherwise, we'll go bankrupt.

Reporter: Speaking of which, can you give us an update on your plans for reducing the national debt?

President Paul: Well, we've made a lot of progress already! When I started my presidency, we had a national debt of $27 trillion, thanks to the reckless deficit spending policies of the Democrats. So, we're making progress. If the Federal Reserve helps us and keeps its interest rates at 0% like it has for the past 5 years, I'm sure we can reduce our debt to about half of what it is now by the time my term in office is done.

Reporter: Mr. President, do you have anything planned for reducing the nation's unemployment? Currently we are at 11% unemployment and that's by the government's statistics, which tend to be a little optimistic. All of these people are living off food stamps right now, and you said you are planning to cut off all entitlements. Is this reasonable?

President Paul: I mentioned before that I wouldn't cut welfare entitlements until enough people were no longer dependent on them. So, my policy right now is to keep those programs intact for now. We have a serious economic problem because there hasn't been enough investment in the right sectors. Therefore, there aren't enough jobs for people. We need to create investment and stop the mal-investment.

To be continued...

URGENT MESSAGE TO ALL CANADIANS

Please read the following article:
$500 fine eyed for illegal file downloads

As a result of these new copyright laws, your car WILL be searched at the border and any iPods / laptops WILL be confiscated!

Also, if the law passes you can be sued for file sharing just like in the US!

Make your voice heard...
Send a letter to the Prime Minister

For more on this topic...

Digg - URGENT MESSAGE TO CANADIANS, Our way of life is in danger

Also, come next election, I'm voting NDP!


UPDATE: "Copyright reform bill appears to be in limbo"

Back in January of 1980, aside from the fact that I was not yet alive, the price of gold reached a new all-time high of $875 an ounce. It was a brief high but it left its mark in history. This year, the price of gold, for the first time, broke out above the $875 price level and has been setting new all-time highs. Clearly, gold is in a bull market. (Check out my 2008 Summer Gold Price Outlook for a short-term prediction on where this market is going)

Gold was in a bull market all through the 1970s. It started out at a mere $35 an ounce and ended the decade above $800. The current bull market in gold, most experts agree, began in 2000, with Gordon Brown's sale of half of England's gold, for just over $250 an ounce. Since then, gold has climbed an ever steeper wall of worry, reaching $1000 back in March of this year. Clearly, gold's bull market has attracted the attention of investors world-wide. However, nobody quite knows the answer to the question: how much higher can it go?

There are many ways to "calculate" (or "guess") the price of gold at the end of this bull market. One way is to use past performance as an indicator of future performance. Exactly what they tell you NOT to do. Kids, don't try this at home.

Using Past Performance

Using the previous bull market as an example, gold should reach $6250 at the top of this bull market, since gold climbed by a factor of 25 in the 70s, so it must do the same this time. Or must it?

Using M2 Money Supply

Let's look at the money supply versus the price of gold. The last time (before the Bretton Woods agreement) when the public was allowed to own gold was in the roaring 20s, at a price of $20 an ounce, so we'll start from there. I'm using M2 money supply here since there was no M3 back in the 1920s.

In 1928, at the height of that economic boom, the M2 money supply stood at $47 billion. By 1980, it had grown to $1.6 trillion. That is a 34-fold growth, leading to a 1980 calculated gold price of $680 based on the inflation of the money supply from 1928 until 1980. That is roughly what the average price of gold was in 1980. Therefore, it can be said that 1980 was the last time gold was correctly valued, with respect to the M2 money supply.

Today, the M2 money supply is $7.7 trillion. The M2 money supply has grown 4.8 times since 1980. As a result, the price of gold today should be about $3260. But let's not forget that, because of speculation, the gold price in early 1980 actually reached $875. Multiplying that by 4.8, we get $4200.

Using Purchasing Power

Perhaps the most accurate way to find out how much gold is worth today is to look at its purchasing power historically. That is, how much could once ounce of gold buy at a particular point in time?

Using house prices from the 1920s, a bungalow cost $2200. Today, such a bungalow would cost about $180,000, keeping in mind that Oakland, CA was rather rural back in 1921. That's an 82-fold price increase. Using that, and the fact that gold was $20 an ounce back then, gold should be at $1640 an ounce today.

Looking at prices from the 1930s, when gold was at $35 an ounce, a gallon of gas was $0.10. Granted, there was not much demand for gasoline back then, but assuming that supply was in balance with demand (as is the case today), and knowing that gas is now $4 a gallon, that results in a gold price of $1400 an ounce.

In 1980, the median US home price was $74,000. Today, it's around $260,000. The gold price averaged $680 in 1980, so today the price of gold would have to be $2390 to have the same purchasing power.

The average salary in 1980 was $10,000. Now, it is $31,000. A gold price of $2100 today would represent the same fraction of your salary as the $680 price did in 1980.

Averaging all these things up, we end up with a gold price of $1880 for gold to keep up its historical purchasing power.

Averaging It All Up

Let's create a weighted average gold price that best represents the accuracy of the above 3 methods.

The formula would be something like this:
10% x Past Performance + 20% x M2 Money Supply + 70% x Purchasing Power

For past performance, we'll use $6250. For money supply, we'll use $4200. For purchasing power, we'll use $1880.

And the result is...

$2780

This is what the gold price should be by the end of this bull market, with a range of $1400 - $6250. Even the low end of this range is higher than the current price of gold, which means my current outlook for gold is extremely bullish.

For those who believe that inflation leads to higher commodity prices, and deflation leads to a lower commodity prices, historical data would prove otherwise.

First, let's define the terms inflation and deflation. When I talk about inflation, I am referring to an increase in the total supply of money and credit. The opposite - a decrease in the total supply of money and credit - would be called deflation.

The M3 monetary aggregate (a.k.a. M3 money supply) is a value released by the Federal Reserve indicating the total number of US dollars in circulation, either as paper or as electronic credit. This value has been provided by the Fed up until 2005 when they mysteriously ended the M3 data series. However, M3 money supply is still tracked by Shadow Government Statistics, at http://www.shadowstats.com/

Currently, M3 is about $14 trillion. Back in 1980, M3 was just under $2 trillion.

When the M3 money supply expanded by 70% from 1975 to 1979, the average annual gold price rose more than 340% (4.4 times) in that period. The price of oil rose 240% in that same period. If M3 and commodity prices were perfectly correlated, then gold & oil prices would have risen by around 70%. Clearly, other factors must account for the rest of the increase.

In a more recent example, between 2003 and 2007, the M3 money supply expanded only 40% yet the average annual gold price rose 64% while the oil price rose nearly 200%. Again, something else must account for that increase.

From the above examples, I don't see any correlation between the rate of growth of the M3 money supply and the rate of commodity price inflation. The only "correlation" exists in the fact that the M3 money supply is growing along with commodity prices. However, M3 is always growing, even when commodity prices are falling.

In the next article, I will address why it is that commodity prices are rising currently, and why they generally stayed flat (or fell) during the '90s. Stay tuned.

...than those who falsely believe they are free!

Please watch the video below. This is a video of Jordan Maxwell explaining how the United States is still under the control of the British Crown. Scroll to the middle if you're impatient.



We Canadian citizens are also slaves of the Crown but at least we know it. When you go to court in Canada, you have a Crown Attorney. You are judged by the Crown. The Bank of Canada is a British Crown corporation, chartered in the British North America Act. All of its profits go to the Crown. When you become a citizen, you must swear allegiance to the Crown. The Governor General is a representative of the Crown and must sign any legislation passed by the Parliament, in the name of the Crown, in order for that legislation to become law.

For some reason, a lot of Canadians think the Crown is just symbolic, and believe that it really represents the Canadian people. Again, none are more hopelessly enslaved than those who falsely believe they are free.

Using my magic handwaving charting skills, my solid knowledge of fundamentals, and my intimate knowledge of stochastics, I've come up with a chart showing the price of gold from now until mid-August. The good news: gold is going to the moon! The bad news, it's not going to happen in the next few months. Patience is key.

If you are looking to buy into this bull market, the best time to buy will be in early June, at around $875 to $925. Note: I'm not guaranteeing anything, so DYODD, don't try this at home, etc.

I'll revisit this forecast in August to see how I did, so stay tuned! :)

So, without further adieu, I give you my 2008 summer gold outlook:

It has come to my attention that all the major financial institutions of the modern world are lending money that has been literally created from nothing, at interest.

This counterfeiting activity is aided by "national" governments that have long given up the idea of national sovereignty in favor of the policy of a supra-national elite. These governments have legalized counterfeiting monopolies (i.e. central banks) into existence. These monopolies are privately owned. They are allowed to create credit (and thus money) from nothing, and lend it out at interest.

Fiat money, issued by decree (i.e. by entering some numbers on a computer), can expand infinitely based on how much is needed (based on the size of the economy). All fiat money should be interest-free, because there is no upper limit on the supply of money in such a system. Therefore, supply always meets or exceeds demand. When there is unlimited supply of something, the price is almost zero. Interest (the price of money) only makes sense when the money supply is limited.

Read that again carefully. The amount of interest you should be charged for your mortgage or on your credit card is zero. Nada. Zilch. Zip.

Here's the credit system in a nutshell:

Go to your bank and ask for a mortgage. They will be more than happy to conjure up any amount you desire. Why do they do this? As soon as you take out a mortgage, the bank literally creates the money they lend to you. If you took out $300,000, the bank literally becomes $300,000 richer by you signing that contract. Immediately. They can use that money immediately, while YOU can only "use" it after 25 or 50 years when you finally paid off your debt. Think that's fair?

Next time you go to a bank and ask for a mortgage (or any kind of loan), ask them this question:
What do you stand to lose from this transaction, if I default?

The correct answer is nothing. Take Bear Stearns, for example. They were gracefully bailed out by JP Morgan! Banks can't die. Again, banks can't die. Their profits are privatized, and their losses are socialized. They cannot lose anything because they simply created the money in the first place. If they stand to lose nothing from your defaulting on the loan, then they ought to charge zero interest on your loan. Period.

Anybody who tries to make a profit on fiat money makes a profit only if they can arbitrarily restrict the supply of money. Therefore, a monopoly on who can create money must be legislated so that the money supply can be
restricted and profits earned. This is how the current interest-based fiat money scam works. As long as no one else is printing the money (other than the central bank), its supply can be restricted via arbitrary interest rates.

Therefore, the so-called "reserve" banks or central "banks" in the world today are nothing more than legislated monopolies on the creation of money, so that they can earn some profits on the creation of this money.

Is it any wonder financial institutions today are so rich? Bottom line is, if you create money from nothing, you should not charge interest on it. If you rely on money which is restricted naturally by market forces, like gold or silver, then it makes sense to charge interest because the supply is limited. Nowadays banks are trying to have it both ways. They are charging interest on money that can be created infinitely with almost zero effort.

In 1971, the Bretton Woods agreement was ended by Richard Nixon, and the US dollar became completely decoupled from the gold standard.

Also in 1971, Led Zeppelin released "Stairway to Heaven."

What do these two events have in common?

Think about what a "stairway to heaven" symbolizes. A pyramid perhaps?



The song describes the downfall of Columbia (the lady; America; Semiramis) when she starts getting greedy (by believing that all that glitters is gold). The stairway to heaven symbolizes the pyramid scheme involved in creating an infinite amount of fiat currency - hence "buying a stairway to heaven".

And what about that "feeling I get when I look to the West, and my spirit is crying for leaving." Well, the West is our present civilization, also known as "Western" civilization. West also means sunset, so the sun setting on the Western civilization. Powerful stuff.

This group of individuals controls most of the major media organizations in the United States. Never heard of it? Here's an intro:

So what's all this "commodity bubble" stuff I keep hearing about? Well, I looked it up on Google News, and was surprised to find just how many articles on the bursting of the commodity bubble have appeared nearly overnight in the mainstream media. Surely they must be right. Right? Here's a brief subset of the articles that have appeared recently:

1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15... Shall I go on?

Wow! They really nailed the top of this market, didn't they?

I wish there was this much coverage on the day the housing bubble burst. Well, while the real estate market today is filled with bottom pickers, the commodity market seems to be filled with top pickers. There's way too much wishful thinking going on.

My advice to the media: Leave the bottom picking and top picking to psychics and historians, okay? Kthxbye.

The last domino has fallen! Or will fall, very soon.

The outcry caused by the $1.50 Euro is too much to bear for the Eurozone. Look for a rally in the US dollar index and gold as a result.

As the Telegraph puts it, in this article,

"
The euro has surged to an all-time high of $1.51 against the dollar, prompting bitter complaints from European industry and setting off a sharp sell-off in sovereign bonds from southern states deemed least able to withstand a super-strong currency.

Germany's car-maker BMW said it was slashing 5,600 jobs and warned of more drastic action if there was a "sustained rise" in the euro above $1.50.

Charles Edelstenne, head of France's Dassault Aviation, told Le Monde that the euro's rise was reaching asphyxiation level. "We can't cope with a such an exchange gap by producing and sourcing in the eurozone.

Airbus has also drawn a line in the sand at $1.50, warning that it will have to turn its industrial structure inside out if it is to meet aircraft delivery contracts priced in dollars.

A top aide to French President Nicolas Sarkozy fired a shot across the bows of the ECB yesterday, demanding that "monetary policy must remain within reasonable bounds". The comments are a clear hint that Paris may try to force a change of tack by invoking Maastricht Article 109, which gives EU politicians the power to dictate exchange policy. France has lacked allies for use of this so-called "nuclear option", but this may change now that a number of eurozone countries are in trouble.

Spreads between 10-year German government bonds and the equivalent debt across the eurozone's Latin bloc have jumped to the highest level since the launch of EMU, reaching 45 basis points for Greece, 43 for Italy, 36 for Greece. The spreads on Spanish bonds have ballooned to 28 from 4 last May, reflecting an abrupt change in perceptions as the property boom deflates and investors take a closer look at Spain's current account deficit, now a 10pc of GDP.

"The widening spreads are telling us that these countries are going to be hit harder than core Europe in a downturn," said Simon Derrick, head of currency research at Bank of New York Mellon.

Hans Redeker, currrency chief at BNP Paribas, said foreigner investors had largely stopped buying euro-zone bonds, suggesting that the euro rally is now on its last legs. The inflow is mostly "hot money" speculation.

Mr Redeker said there may soon come a point when the ECB's ultra-hawkish turns negative for the euro, causing traders to look beyond instant yield and focus on the risk that monetary overkill could tip the bloc into a deep downturn.
"

Forget nuclear war. Forget global warming. We are on the verge of a genetic holocaust. The biotech industry is destroying all life on Earth as we speak. There is the real risk that every species on this planet will soon be extinct, including the human species. After listening to the 2/29/2008 Alex Jones show, my attitude toward the future of humanity is now one of despair. A massive extinction has begun, and nobody seems to care (except perhaps those who built the Doomsday Vault).

Please listen to the show (thanks to Gatekeeperinvasion) and I dare you not to be outraged:



                                                              Next video...

After listening, I went to Health Canada's website to see what the government has done about this. The website is incredibly dovish on the whole GM issue:

"
What are the risks of applying the techniques of genetic modification to foods?

The techniques of modern biotechnology do not introduce risks which are different from those already associated with the food supply. Many of the issues raised by foods resulting from genetic modification are equally applicable to foods produced by conventional means.
"

Did Monsanto write Health Canada's website? This is absolutely disgusting and shocking.

Please visit SeedsOfDeception.com to find out the truth.

Remember the 70s? Well, I certainly don't. I wasn't around back then, but I do have some impressions based on That 70s Show. I also have lots of songs from the 70s. A lot of Led Zeppelin songs. A lot of Pink Floyd. Those were great times. The war between Rock and Disco. The Vietnam War. The pet rock. The bitter cold, snowy winters (if you lived in North America). I almost feel like I was there. But let's dig deeper... Ah yes! Stagflation!

Many Americans probably remember the long lines at the gas stations, where gas was not only expensive but extremely scarce. They probably remember cutting back on heating to save electricity. They probably remember the push toward more fuel-efficient vehicles and alternative energy during the Jimmy Carter days. But yet they fail to see how eerily similar today's economic climate is to the 1970s!

Let's see. Interest rates were unusually low yet the stock market was going nowhere. However, everything else was going through the roof! Gold prices started at just $35 in 1971 when Nixon abolished the pseudo-gold-standard of the Bretton Woods agreement. By January of 1980, gold reached $850. As chairman of the Fed, Volcker had to raise interest rates up to 20% to stop the inflation. At that point, everybody was panic-selling entire family heirlooms of gold and silver in order to get shiny new risk-free CDs yielding 20% a year! But by then, the 70s were over, and the period of the greatest inflation in the history of the US finally ended.

Today's economic climate is much the same. Gold has climbed from $250 in 2000 to $950 today. Everybody is talking about how the US dollar is losing its value. Bernanke is cutting rates yet the markets are going nowhere. There's a general feeling of "malaise" (a term coined by Jimmy Carter) in the credit markets. Meanwhile, wheat prices have reached $12, up 400% from where they started in 2000. And what's Bernanke doing? Cutting rates even more!

Today, the US dollar index fell through the key support level of 75. Why? Because the Euro and Canadian dollar strengthened. But Carney (Canada's version of Bernanke) is threatening to cut rates again. Now if only "tricky" Trichet (ECB's governor) would finally cave in and cut rates too, then the US dollar would stop sliding for a brief while. And if the Bank of England cuts rates too, it will be green light for Bernanke to cut rates again. And the cycle will repeat. Meanwhile, gold will go all the way up to $1400 and the markets will stay flat just like the dollar index. Despite the talk of IMF selling gold (another reminder of the 70s), gold is positioned to break through $1000 within the next few weeks. Nothing can stop this bull market except 20% interest rates on US T-bills. Might as well wait until pigs fly.

Thinking of buying the Dow? Is it overvalued or undervalued? Let's find out...

Let's analyze the top 5 stocks (by weight) in the Dow Jones Industrial Average.

I'll be using the Warren Buffett method of security analysis which focuses on net earnings relative to the total value of shares issued (i.e. Yield(%) = 100% * Earnings Per Share / Share Price + Dividend Yield). The source of data is Google Finance.

For calculating the "right" share price, I'll use the RFRR (Risk-Free Rate of Return) which is equal to the YOY % increase in the M3 money supply, currently at 15%.

1. IBM
EPS = 7.22
Share Price = $103.27
Yield = 8.54%
Right Share Price = $52.32
Grade: B+
Not bad. Better than holding bonds. IBM also had a 9.8% increase in net earnings from 2006 to 2007. If they can keep it up, it's a pretty good investment.

2. XOM (Exxon Mobil)
EPS = 7.29
Share Price = $81.71
Yield = 10.6%
Right Share Price = $54.81
Grade: B+
Pretty good. Big Oil has big earnings. However, if you look at earnings growth, it was only 2.8% from 2006 to 2007. Looks like good oil fields are harder to come by. Over the long term, Big Oil is a dead investment.

3. BA (Boeing)
EPS = 5.28
Share Price = $79.33
Yield = 8.67%
Right Share Price = $39.70
Grade: B
Not a bad investment, but not too good either. The war in Iraq has definitely helped Boeing's earnings grow 83% between 2006 and 2007, but that's not sustainable. A good short-term bet.

4. MMM (3M)
EPS = 5.59
Share Price = $78.56
Yield = 9.56%
Right Share Price = $44.51
Grade: A
A good investment. Technology will remain strong and with earnings growth of 6.4% between 2006 and 2007, 3M is a pretty strong performer.

5. MO (Altria Group)
EPS = 1.03
Share Price = $73.09
Yield = 5.5%
Right Share Price = $9.45
Grade: D
As you dig deeper, you discover something like this. MO is very overvalued. Earnings shrank from 2006 to 2007. The current valuation is not justified at all. This is a good investment if you want to throw away your money. You gotta admit though, it has a pretty attractive dividend yield. But even so, the share price has too much room to fall.

Conclusion
So, having analyzed these 5 stocks which together make up 28% of the DJIA, we can see that for the most part the DJIA is a good buy. Is it undervalued? No. Is it overvalued? Slightly. It's somewhere around the right value.  It could fall a bit more. In fact, 8000 would be a more reasonable value for the DJIA. Could it go up to 15,000 or 20,000 as some pundits are calling? If you accept 5 to 6% return on your investment, sure. In a low-inflation environment, 20,000 is pretty doable. However, with the monetary inflation that's going on today (15% annualized growth in M3), you ought to find a better investment and wait for the Dow to come back to 8000.

Then again, why would you ever own the Dow? Why let one bad apple spoil the bunch? Just buy individual stocks in good companies. Think of owning shares in a company as owning the entire company. If a company is bad, you shouldn't own a single share of it. Take advice from successful investors, not from Wall Street shills.

Ask yourself this: Why does nearly every democratic country in the world have a central bank, in the same model as the UK (the first central bank was established in London)? I mean, democracy is one thing, but why is it that monetary policy is essentially the same in all "free" countries in the world? Why does nearly every democratic country have a progressive system of taxation? Why does nearly every democratic country have free public education? Do you get where I'm going with this?

All three things I mentioned above are word-for-word planks of the Communist Manifesto. They should not exist in a world that calls itself capitalist. But furthermore, they would not exist so homogeneously in every country if there were no world government working from behind the scenes to impose these policies. And that hidden Marxist government is the New World Order.

As George H. W. Bush put it, "a world where the rule of law, not the law of the jungle, governs the conduct of nations." What *law* is Bush referring to? He is referring to a specific set of homogeneous laws including (but not limited to) free public education, a central bank issuing fiat currency, and progressive taxation. These are laws which are in nearly every democratic country in the world. They are mandated by this hidden supranational government body. Interestingly, these three planks are not in the US constitution and they are in fact indirectly forbidden by the constitution through the restrictions it places on the powers of the federal government. Yet, they exist in the US anyway. Free public education is mandated at the federal level through the Department of Education. The Federal Reserve is the central bank issuing fiat currency. The progressive system of taxation exists as the IRS.

In Canada, free public education exists in every province. The central bank is the Bank of Canada, issuing fiat currency. The progressive system of taxation is enforced through the Canada Revenue Agency (CRA).

Here's another highly revealing quote from that Bush speech: "When we are successful, and we will be, we have a real chance at this New World Order, an order in which a credible United Nations can use its peacekeeping role to fulfill the promise and vision of the U.N.’s founders." Who are the UN's founders? Interestingly, I couldn't find an official list of them anywhere on the Internet. Through a lot of indirect links I came across the name Alger Hiss but the rest seem to be shrouded in secrecy. Why keep such a beautiful achievement secret?

David Rockefeller, believed to have donated the land where the UN headquarters now stands, is known for this quote: "We are grateful to the Washington Post, the New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subjected to the light of publicity during those years. But now the world is more sophisticated and prepared to march towards a world government. The supra-national sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries."

In page 405 of his memoirs, he states, "Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and of conspiring with others around the world to build a more integrated global political and economic structure - one world, if you will. If that is the charge, I stand guilty, and I am proud of it."

So, if you want to see the New World Order, look at the laws. Look at the United Nations and its founders. Marx would be very proud of the work achieved by the New World Order.

Oh boy!

Things are happening WAY faster than I ever thought possible.

Today, palladium (the underdog precious metal) finally broke out. A 7.8% move in one day! Impressive. And it's only the beginning. Buy palladium with both hands and feet right now.

But more importantly...

China's Inflation Hits American Price Tags

Looks like my prediction of higher hardware prices will come to fruition. Better buy that video card soon, because next year the same video card could cost 5% more! I think we've hit the "bottom" in hardware prices. For those feeling uber-adventurous, I'd recommend "investing" in hardware commodities (like CPUs, video cards, etc.) Anything made of plastic will perform very well. Plastic is non-biodegradable, and it's the perfect way to "own" physical oil (without getting dirty). Plastic "bullion" will be highly regarded some day, long after peak oil.

Now I'll end off with an advertisement:
Gatekeeperinvasion on YouTube has all your latest Alex Jones shows.

Palladium has escaped the attention of precious metals investors for far too long. Bet you've never heard of it. Look it up, it's certainly on the periodic table, or on Wikipedia. But it's more than that. Right now, palladium is calling your name. Why? Because it's about to embark on the bull run of a lifetime. True, it has been in oversupply in recent years due to Russia selling off its finite stockpile. But the key word here is "finite." Once the stockpile runs out, the price of palladium is set to rise astronomically.

While nobody knows exactly how much palladium there is out there, a ballpark estimate is that it is about as rare as platinum. And while platinum, the diesel industry's favorite metal, has been getting all the attention lately, with record-breaking highs every other week, new uses for palladium are coming up as well.

There are several indicators that palladium is drastically undervalued right now. First, the platinum-palladium ratio is very high. Never before has there been such a high spread between the price of platinum and the price of palladium. From a technical standpoint, we have had a huge long-term bullish consolidation after the last rally. It is basically one long symmetrical triangle pattern. This indicates that the momentum will be to the upside when it finally breaks out.


(Image courtesy of kitco.com)

As you can see, palladium is now finishing the consolidation of a long-term rally, in order to begin a new one.

While I can't say with 100% certainty when and where the price will go, I'm quite confident that it won't stay under $400 for much longer.

As long as palladium is under $400, you should be buying every last ounce you can get. Then, hang on for the ride of a lifetime. Up she goes. Where she stops, nobody knows.

NOTE: I do not advocate any investment position via this article. Do your own due diligence. Don't take my word for it.

You can't argue with John Maynard Keynes when it comes to economics. His theory of aggregate demand as a primary driver of the economy is largely correct. If a business has more customers, it will have more profits, and more employees. Aggregate demand, whether created artificially by government or naturally by the middle class, is what drives the economy toward expansion. More people buying more goods leads to more businesses to supply those goods. Recession, on the other hand, occurs when aggregate demand falls. This happens when people can no longer afford certain goods or services, because they are earning less income. The global recession today was not caused by bad mortgages or risky lending. Those are merely symptoms. The primary cause of the current recession, if you look at the bigger picture, is falling wages.

The US recession started in 2000 with the dot-com crash. Although the economy has been "stimulated" again and again by the special interests in Washington, there was only a brief recovery from 2005 to 2006. That was largely caused by the speculative housing bubble. So what is behind this persistent US recession? A stunning fact is that middle-class wages have consistently fallen since 2000. Quite simply, consumer demand has slowed because there's no more discretionary income.

"But wages have gone up!" I hear you say. That is true. In nominal terms, wages have risen since 2000. However, when adjusted for inflation, wages have fallen rather dramatically. Take for instance the average US house, which cost only $200,000 back in 2000. Now it costs $300,000. According to this site, median wages grew about 14% from 2000 to 2005. If we suppose another 3% rise until now, we get a measly 17% over the last 7 years. Meanwhile, house prices rose by 50% during the same time. No wonder there's less demand now for houses. Back in 2000, a gallon of gas cost about $1.50. Now, it costs $3. That's a 100% rise in price. No wonder people are driving less and buying fuel-efficient Japanese cars. These facts, and others, indicate a 6% annualized inflation at best, or maybe as high as 10%, while the government says inflation is only 3% per year.

I have further anecdotal evidence that indicates inflation has eroded discretionary income even here in Canada. The typical salary for an entry-level IT professional in 2000 was around $50,000 a year. Today, it's around $60,000 a year. Meanwhile, the cost of a typical house has gone up from $250,000 to $350,000. Gasoline is around $1.05 a litre. It was $0.59 back in 2000. Bread was around $1.50 back in 2000. Today, a loaf of bread costs $2.39. You do the math.

The bottom line is that these high prices reduce demand. With reduced demand come reduced profits for businesses. With reduced profits come fewer job opportunities. That, in turn, leads to lower wages, which leads to even less demand, and the cycle repeats.

To make matters worse, consumer debt is now at astronomical levels. All the discretionary income that went into consumer goods now goes towards servicing debt. Whether it is in the form of credit card debt, car loans, student loans, or mortgages, the level of personal debt now is largely unprecedented in history. Not only that, but interest rates are now rising as mortgages are resetting, making the problem even worse. You can easily see why nobody wants to buy new computers or TVs. Everybody's busy paying off the mortgage.

So what can be done to stop the recession? I know it sounds crazy, but, middle income people deserve a raise. If you're an entrepreneur you might be tempted to think, "If I can hire cheaper workers I'll make more profits." In the short term, that may be true. In the long term, however, you're destroying the income of the very people who were your customers. Without income, your customers slowly disappear, and your profits shrink until you're finally forced into bankruptcy.

The best "stimulus" package, aside from doing nothing, is to mandate a 25% across-the-board wage increase even if it puts companies into the red. Why 25%? Because that's what it would take to correct the drop in real wages that we've seen since 2000. Also, an easy way to facilitate wage increases is to enforce the laws against hiring illegal aliens. Another way is to impose tariffs on trade with China and other foreign countries. That would reduce the incentive for the global wage arbitrage (a.k.a. outsourcing) that is going on now. Reducing taxes on incomes below $100,000 is another great way to put more money back into people's pockets. Tax brackets are notorious for creeping down as time goes on due to inflation, in a phenomenon known as bracket creep. Simply raising tax brackets would have a very positive effect on the economy.

To reduce the debt burden, all adjustable-rate mortgages should be moved to longer term fixed-rate mortgages. All credit card interest rates should have a fixed upper limit. To prevent further growth of consumer debt, strict lending guidelines must be implemented requiring very high incomes for new loans. Basically, we need to do everything possible to facilitate "trickle-up" economics as an alternative to "trickle-down" economics. Higher wages earned downstream will translate to business profits upstream.

The last thing we need is more government spending, though it may be tempting. At a time like this, any government spending would by necessity be deficit spending. That would raise the national debt even more and lead to higher taxes down the road. Nor should we resort to printing money, lest we see another repeat of the Weimar hyperinflation of the 1920s. Instead, government spending should be reduced so that the surplus can pay off the debt and lead to tax reductions. Even if increased government spending is financed "legitimately" by higher taxes, the result would be less after-tax income for consumers, leading to lower aggregate demand, exacerbating the recession. It will be painful, but the only way out is to reduce government spending.

If you're an American, please vote (and donate to) Ron Paul. He's the only candidate who is willing to cut government spending, cut taxes, and put more money in YOUR pockets.

I've come across a lot of "lazy portfolio" ideas lately. These are portfolios that need minimal maintenance and produce high gains with low volatility. A lot of the lazy portfolios I've seen are based on the idea of diversification using bonds. That is, in order to reduce the risk of owning stocks, some bonds are recommended. While this may sound like a perfectly sound idea, it turns out that bonds are actually correlated much more to stocks than is generally believed. That is, when stocks go down, bonds go up. When bonds go down, stocks go up. While this may seem like a perfectly desirable thing, it is not. A negative correlation is just as bad as a positive one.

So here was my idea. What if you replace bonds with gold? What kind of returns would you get?

Here's a chart showing the performance of various assets (starting with $900 invested in 1971) until now:



Note, the portfolio adjustment is done yearly, using plain old dollar cost averaging in order to maintain 50% dollars in one asset and 50% dollars in another.

It can't get much easier than this folks. The 50-50 Dow-Gold portfolio not only outperforms the 50-50 Dow-Bond portfolio, but does it with low volatility! For instance, the Dow-Gold portfolio would've survived the 2001-2002 recession far better than the Dow-Bond portfolio.

So there you have it folks, diversification can be as easy as 50-50, if you choose the right uncorrelated assets having similar risk profiles.

The best lazy portfolio turns out to be 50-50 Dow-Gold.

Now, this is just my own humble research so DYODD. There is a risk that Dow and Gold become correlated, at which point this diversification scheme would be pretty useless. That's what happened in the case of LTCM, causing the whole fund to go bankrupt.

Author: Dan Tohatan

Heads up! Is what I'd say to the stock market investors out there about now.

The word "carnage" is probably the best word to describe what happened in the stock markets today. This day shall remain in my memory as "Red Monday." All the stock market indices were in the red. Thankfully, I don't own any stocks.

But let's put this into perspective for a second. Anyone remember the "Black Monday" crash of 1987? On that single day, the Dow Jones Industrial Average lost 508 points, which amounted to 22.6% of its value. Compared to that, the current correction is nothing.

Back then, the stock market was in a secular bull market. Interest rates had been above 10% for a very long time and were finally easing. Greenspan had just come to the Federal Reserve, and was ready to put his "financial innovation" into practice.

Today, we're at the top. There's no doubt about it. And the ride down looks quite scary. We've had the biggest credit expansion since the 1920s. Interest rates are near all-time lows. Who wants to buy bonds when they yield only 4%, while the dollar is losing 10% a year in purchasing power? It would mean a guaranteed loss. Who wants to buy the Dow, when the Dow-to-Gold ratio is at a whopping 14? The times when the ratio was higher than 14 are few and far between, and were always followed by a major plunge in the Dow relative to gold. Ultimately the Dow-to-Gold ratio must return to 1 by the time we hit bottom. Since the Dow can't return to $850, gold will have to rise massively.

So what are good investments in this climate? Well, if we use the past as a guide, during times when bonds had ridiculously low yields and stocks were flat or declining, gold and commodities did extremely well by comparison. Not only would an investment in commodities maintain its value during such times, it would actually gain in value as more and more investors got word of the opportunity. Eventually, a speculative parabolic curve would result, leading to a huge crash, and a final price much higher than the starting point of the curve, but also much lower than the top.

So my #1 preference in this market climate is commodities, for maintaining purchasing power. Precious metals are a special type of commodity, because the majority of demand comes from investment demand. They're more similar to currencies.

My #2 preference is bonds, due to their traditional safe-haven demand during bear markets in stocks. However, don't put all your money in bonds or you'll lose purchasing power through inflation. And don't think TIPS (inflation-protected bonds) will protect you. They're not inflation-protected at all. They use only the artificially-low CPI as a measure of inflation.

My recommendation right now would be a portfolio allocation of 60% precious metals, 40% bonds and other guaranteed investments. If you take this approach, you reduce some of the risk in precious metals while protecting your bond investments against inflation and negative yields. I would avoid stocks like the plague right now. As real bond yields rise, I would shift my allocation to be heavier on bonds and lighter on precious metals. As for the precious metals, I would be overweight on gold due to its monetary nature. The other metals might fall in price due to weaker demand. Gold, on the other hand, is likely to keep its value due to high safe-haven investment demand. Of course, when I'm talking about metals, I'm talking about physical metals, not ETFs or stocks. Those funds are not likely to remain solvent should a parabolic spike in gold prices occur.

Interestingly enough, there isn't that much risk in precious metals. Suppose you bought gold at the $850 top in 1980 (equivalent to $2200 today). It turns out your investment would only have fallen to about half value by 1988. On the other hand, if you bought gold in 1975, you would've tripled your investment by 1988. And there would've been plenty of warning signs before the $850 top, such as double-digit interest rates on bonds, or the fact that you could buy more than one Dow with 1 oz of gold.



The key investment objective now is preservation of capital. Since you can't have 100% trust in fiat currency, given its history of devaluation (a house was $29,000 in 1971), you have to put some (if not most) of your money in wealth-preserving precious metals, which can't be inflated by runaway printing presses.

Author: Dan Tohatan

It was December, 1989. Romanians were getting fed up with the oppression of their totalitarian communist government. Although the currency (the Leu) was worth as much as the dollar back then, there was nothing to buy. Everything was being frantically exported to pay off some imaginary debt.

Then came the revolution, and in 1990 the inflationaries won out big-time. The debt was inflated out of existence so that people could again live the irrational exuberance of the 60's and 70's. For the next 5 years, the currency would lose 99.9975% of its value. It got to the point where prices were adjusted daily to keep up with the falling Leu. Today, Romania is still struggling with 9% yearly inflation as it tries to peg its currency to the Euro.

But is there really any difference between the Euro and the Leu? Aren't they all fiat currencies printed on worthless paper? What's to stop the Euro from hyperinflating? Or the US dollar? Catch my drift?

The US, Canada, and Europe are sitting on mountains of debt. But don't worry. When the loans come due and the collectors come a-knockin', hyperinflation will be their best buddy.

For those of you interested in protecting your wealth, take a look at DollarCollapse.com, an excellent site giving up-to-date news on the demise of the US dollar, the world's reserve currency. Global hyperinflation is under way. This is only the beginning.

SOURCE: NextEnergyNews.com

Scientists Invent Solar Cell Sheet That Collects Energy at Night

Researchers at Idaho National Laboratory, along with partners at Microcontinuum Inc. (Cambridge, MA) and Patrick Pinhero of the University of Missouri, are developing a novel way to collect energy from the sun with a technology that could potentially cost pennies a yard, be imprinted on flexible materials and still draw energy after the sun has set.

The team estimates individual nanoantennas can absorb close to 80 percent of the available energy. The circuits themselves can be made of a number of different conducting metals, and the nanoantennas can be printed on thin, flexible materials like polyethylene, a plastic that's commonly used in bags and plastic wrap. In fact, the team first printed antennas on plastic bags used to deliver the Wall Street Journal, because they had just the right thickness.

Commentary

Now *this* is what I call revolutionary! Read the article, and pay careful attention to the wording: "a technology that could potentially cost pennies a yard," and 80% efficiency! This is revolutionary folks. If we have more inventions like this, pretty soon we won't care about oil hitting $200 a barrel.

SOURCE: Telegraph.co.uk

"Official figures showed wholesale food prices rose by 7.4 per cent in the past 12 months - more than three times the headline rate of inflation."

"A dozen free-range eggs from Sainsbury's rose from £1.62 to £2.35, and Asda increased the price of its orange juice from 73p a litre to 88p."

"Meat prices are rising particularly quickly. The ONS said the price of beef, pork and lamb products increased by 3.7 per cent in December alone."

"Figures compiled by the Meat Trades Journal show the average retail price of English beef has increased by 14.9 per cent in five years. English lamb rose by 10.3 per cent."

Commentary

So, finally, someone has the guts to report on the rising prices that I observed 3 months ago. And I thought I was going crazy.

Here's the bottom line. The money supply of the world has been carelessly inflated during the 90s and the early part of this decade, and now we're paying the price. We're paying the price for the dot-com bubble, we're paying the price for the housing bubble, and we're paying the price for the Iraq war, all through global price inflation.

Jim Rogers (YouTube video below) is the closest to grasping the full magnitude of the coming stagflation.

Nothing like a bit of philosophy, and some anthropology, to demystify the issue of religion, and why it is needed.

The Role of God in Society
A quasi-essay, by Dan Tohatan

Let me start off by saying, I do not propose in any way that God exists. In fact, chances are there is no God. Science has not shown the existence of a divine being and probably never will. However, strange as it may seem, it could be beneficial for every individual to believe in God.

Why believe in God if He/She/It doesn't exist? Isn't it kind of ridiculous? Not if the reason for your belief is utilitarian. That is, you don't care whether God exists or not; you choose to believe in God because it helps you to believe in your personal truths.

Even anthropologists agree that religion serves important functions in a society. It helps society deal with rites of passage (such as death) and rites of intensification (such as natural disasters). The primary function of religion is to build solidarity among a group of people.

The meaning of "truth" is best described by Gandhi in this famous quote:

"When I despair, I remember that all through history the way of truth and love has always won. There have been tyrants and murderers and for a time they seem invincible, but in the end, they always fall — think of it, always."

Truth is what is concluded on an individual basis, from trial and error, from experimentation, and from logical deduction. But beyond that, truth also includes the moral values that one holds to be fundamental, which are largely based on experience also. This includes ideals like non-violence, freedom, and national sovereignty, which can only come from an objective study of history.

Where does God come into the picture? God helps you build solidarity with yourself, as well as within a group. You can believe certain things without invoking God, but God helps you resist the temptation to persuasion away from your hard-won truths. Basically, God acts as a protector of personal beliefs.

Basically, by choosing to believe in something as irrational and as ridiculous as God, it helps you gain conviction in all your other beliefs. By choosing insanity over so-called sanity, you accept the prospect of being considered insane. Essentially, you immunize yourself against ridicule.

Ultimately, as ironic as it may seem, God helps you build intellectual & moral courage. God builds conviction. God is a very personal thing. By accepting God, you accept that your moral beliefs are valid, and anyone who tries to persuade you from your beliefs will not be able to do so.

One of the reasons why our society is crumbling today, why we have nanny welfare states and global corporate tyranny, is because people have lost their belief in God. Think about the functions that God serves in a society, regardless of whether God truly exists or not. God unites society and brings solidarity between people.

The Sabbath is respected as a ritual to bring people who share the same beliefs together. The Sabbath is necessary in order to consolidate the idea that "we're in this together," that you're not alone in your values and your moral ideals. God helps the common man build courage in the face of tyranny.

The Bible is a codification of the moral ideals of a society. It is described as the Word of God, the infallible truth, which must be respected at all times. In some sense, a manifesto is a kind of text most usable in a religion. Those who believe in God adhere to the Bible as a manifesto of moral values and necessarily must accept all of the teachings of the Bible as being THEIR personal truth.

Where I disagree with the Bible is in its horrifying teachings about the afterlife. The idea of Heaven and Hell is despicable to me. I will never accept the idea that you'll be punished in the afterlife by a God that doesn't even exist. The afterlife is what leads to religious fundamentalism, because we must all be good or else endure the WRATH of God. That just breeds fear and submission. God is an entity of pure love. Therefore, I'm not likely to be a Christian any time soon.

So to conclude, religion is necessary in a society. Without religion, society quickly degenerates into a group of masters (bullies) and a group of slaves (apathetic moral cowards). All that the slaves want is protection, and the masters will gladly give it to them. Look around you today. Do people seem apathetic? Does it seem like nobody has values anymore? Are we letting unelected rulers make decisions for us? Are we putting more power into the hands of the government?

Ask yourself this: Are you willing to die for your truth? If speaking the truth entailed certain death, would you still do it? The time will come when we WILL need to renew our belief in God, or face death for so much as thinking about the truth in a world of lies.

The reason why the mainstream media (a.k.a. the gospel of Satan) has been able to manipulate society so shrewdly is because society has no moral convictions to begin with. The secularization of society has led directly to the indoctrination of society with a new dogma, without a need for priests, kings, popes, gods, or holy texts, to the point where we now accept the tyranny which is CLEARLY present in our world today as being perfectly normal. The people who believe the corporate propaganda (or "news") are likened to "sheep" (isn't that what Christians are called?) and those who "wake up" from this mass-media trance are the new heretics today! The mainstream media acts as the all-powerful Inquisition, and those who follow along with its propaganda are the devout Christians of the Mediaeval period! So basically, Christianity has been replaced with a new religion, of anti-Christianity (because it calls itself "secular") preached by the corporate media!

The reason why this scheme has worked is because people have chosen to abandon their personal truths in favor of moral emptiness. They are then shrewdly manipulated through hypnosis, magick, and a slew of other occult forms of indoctrination which would impress even Aleister Crowley. The only way out is to find out what your own beliefs are. Find out what truths you're willing to die for, and believe in a God who will protect your beliefs.

Another important function of religion is that it assigns the role of "protector" to a non-existent entity (rather than a real one). This is advantageous because it keeps tyranny from prospering. As long as people believe in a divine protector, a real protector will not be able to take its place. This is why Satan is associated with the earthly realm (a.k.a. the material world) whereas God is associated with the heavenly realm (a.k.a. the spiritual world). Since all "protectors" inherently must take away from your freedoms, would you rather your tyrant be real or spiritual? Wouldn't you rather be your own critic? This is why kings in the old days used to claim "divine right to rule," because otherwise their subjects would not accept them as rulers. People were much more resistant to tyranny when they had religion.

The Ron Paul revolution is the beginning of a religion. As the age of Aquarius is upon us, we need to look at our world objectively and determine what it is that brings benefit to humanity, and what must go. Take a utilitarian approach to religion. Refuse dogma, refuse persuasion, and believe your own truth. Once you do that, those of us who know the truth will unite under one God, one religion, and grow stronger every day. Then the corporations will no longer be able to preach their Satanic materialistic messages to us. Our protector (and only ruler) will be God Himself.

It's important to realize that all you need in order to have a religion is a belief in God as your supreme protector, a set of beliefs that you hold to be true, and an unshakable faith in your beliefs.

I'll end off with a quote from the late great Mahatma Gandhi:
"Even if you are a minority of one, the truth is the truth."

Source: www.dennis4president.com

DETROIT, MI –  Democratic Presidential candidate Dennis Kucinich, the most outspoken advocate in the Presidential field and in Congress for election integrity, paper-ballot elections, and campaign finance reform, has sent a letter to the New Hampshire Secretary of State asking for a recount of Tuesday’s election because of “unexplained disparities between hand-counted ballots and machine-counted ballots.”

Commentary

I would suggest you read this article for full details on how Diebold stole the New Hampshire primary.

There is certainly historical precedent, in the 2004 Ohio general election. See video below (courtesy of Google Video).



But of course, you've never seen this on the news, have you?

They keep showing endless footage of Hillary, the media's hand-picked "front-runner." Every chance they get. Next time you watch the nightly news, look at the coverage they give to the candidates, and you'll see the pro-Hillary bias right before your eyes. It's not that hard, if you watch carefully, to see the agenda behind the news.

The first post in any blog always has great significance, and so I'll try to make this post as "significant" as I can. What you see on TV news networks today is little different from the programmed dream-world shown in the movie The Matrix. Therefore, I'll let Morpheus sum it all up:

What is "real"? How do you define "real"? If you're talking about what you can feel, what you can smell, what you can taste and see, then real is simply electrical signals interpreted by your brain. This is the world that you know. The world as it was at the end of the twentieth century. It exists now only as part of a neural-interactive simulation that we call the Matrix. You've been living in a dream world, Neo. This is the world as it exists today...

The real world shown to you on this blog is far different from the "movie" shown to you by the corporate news monopoly. Indicted are networks such as BBC, CBS, FOX News, etc. The crime is fraud, for they purport to report news free from opinion yet do nothing of the sort.

First of all, I'm not here to sell any particular New World Order-style conspiracy theory. I'm not here to put all the puzzle pieces together for you. I'm here to give you the news, as it was meant to be given, by an independent reporter, free from corporate agendas. Quite often, I will also post personal opinion on this blog. It will always be clearly marked. The opinions of others will also be marked. I'm here to give you information. What you do with it is ultimately up to you.