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."

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.

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?

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?

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.

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.

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!

The following articles discuss (in different ways) the demise of the dollar:

1. TIME - America and Its Deficits

2. Bloomberg - UN Says New Currency Is Needed

3. iStockAnalyst - China Now Net Seller of US Treasuries

Still bullish on the dollar?

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.

"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.

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

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.

Right after I posted my "worst case scenario" calling for exchange controls by fall of 2009, Jim Rogers (in this Bloomberg article) is basically saying the same thing!

"
May 12 (Bloomberg) -- A rally in the U.S. dollar has run its course and a currency crisis may take place in the fall, investor Jim Rogers said.

“We’re going to have a currency crisis, probably this fall or the fall of 2010,” Rogers, 66, said in an interview with Bloomberg Television in Singapore. “It’s been building up for a long time. We’ve had a huge rally in the dollar, an artificial rally in the dollar, so it’s time for a currency crisis.”

Rogers may consider buying the yen and prefers the euro to the dollar or the pound, he added.
"

Jim Rogers correctly predicted the dollar rally last fall.

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 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??

An excellent synopsis of what's to come, as predicted by Gerald Celente, and with which I agree 100%.

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.

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.

Check it out:

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.

Greenspan admits that the Federal Reserve is a PRIVATE entity.

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.

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

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.

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.

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.

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 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!

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!

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%!

George Carlin passed away today. He had many fans, including me. The man was a genius on multiple levels.

Here's a video of George Carlin telling nothing but the truth:

This is an historical event:

http://www.nasa.gov/mission_pages/phoenix/main/index.html

The pictures speak for themselves!

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!)

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.)

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"

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.

The following is quoted from: http://www.dailytech.com/Temperature+Monitors+Report+Worldwide+Global+Cooling/article10866.htm
"
Temperature Monitors Report Widescale Global Cooling
Michael Asher (Blog) - February 26, 2008 12:55 PM

Twelve-month long drop in world temperatures wipes out a century of warming

Over the past year, anecdotal evidence for a cooling planet has exploded. China has its coldest winter in 100 years. Baghdad sees its first snow in all recorded history. North America has the most snowcover in 50 years, with places like Wisconsin the highest since record-keeping began. Record levels of Antarctic sea ice, record cold in Minnesota, Texas, Florida, Mexico, Australia, Iran, Greece, South Africa, Greenland, Argentina, Chile -- the list goes on and on.

No more than anecdotal evidence, to be sure. But now, that evidence has been supplanted by hard scientific fact. All four major global temperature tracking outlets (Hadley, NASA's GISS, UAH, RSS) have released updated data. All show that over the past year, global temperatures have dropped precipitously.

A compiled list of all the sources can be seen here. The total amount of cooling ranges from 0.65C up to 0.75C -- a value large enough to wipe out nearly all the warming recorded over the past 100 years. All in one year's time. For all four sources, it's the single fastest temperature change ever recorded, either up or down.

Scientists quoted in a past DailyTech article link the cooling to reduced solar activity which they claim is a much larger driver of climate change than man-made greenhouse gases. The dramatic cooling seen in just 12 months time seems to bear that out. While the data doesn't itself disprove that carbon dioxide is acting to warm the planet, it does demonstrate clearly that more powerful factors are now cooling it.

Let's hope those factors stop fast. Cold is more damaging than heat. The mean temperature of the planet is about 54 degrees. Humans -- and most of the crops and animals we depend on -- prefer a temperature closer to 70.

Historically, the warm periods such as the Medieval Climate Optimum were beneficial for civilization. Corresponding cooling events such as the Little Ice Age, though, were uniformly bad news.

(Update 2/27: Anthony Watts, who kindly provided the graphics herein, otherwise has no connection with the column. The views and comments are those of the author only.)
"

I can tell you one thing, global cooling has certainly made its mark here in Toronto. Just look at the weather forecast for February 28 and take a look at the frozen mountains of snow outside. There was no February thaw this year.

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.

Too much stuff to do these days so I'll be brief:

Read these articles:

The Road To Hyperinflation, Part 2 - A failure of central banking

and

The Sixty-Year Storm, by George Soros

Looks like the skeletons are finally coming out of the closet!

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.

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.

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.

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.