Ron Paul takes second place in New Hampshire straw poll
By Brent Budowsky - 01/23/11 06:17 PM ET
As The Hill and other media have reported, in the New Hampshire presidential straw poll Mitt Romney came in first and Ron Paul came in second. What does this suggest?
First, the clear front-runner for the Republican nomination is Romney. By comparison, Sarah Palin for president in 2012 is largely a fiction of cable television with too much time to fill and not enough real news to fill it. The big news on the Republican side is the great advantage now held by Romney.
Second and equally interesting, the strong showing by Ron Paul emphasizes a point I have been making for many months, that Paul could make a powerful showing if he runs for the Republican nomination.
Paul, whose visibility and stature will rise as he assumes a subcommittee chairmanship with jurisdiction over the Federal Reserve Board, has a large contingent of very loyal supporters and significant fundraising capability, and his strengths would play well in a Republican primary or caucus system.
I will soon write a column about another underrated Republican possibility (hint: He is now an ambassador). For now, don't underestimate Mitt Romney's strength as the current front-runner, or Ron Paul's potential strength if he enters the presidential campaign.
Friday, January 28, 2011
Egypt Shuts Down Internet, Blackberry, Text Messages; Mubarak Rival Returns to Egypt; Protests Rattle Yemen; Only Certainty is Uncertainty
Egypt Shuts Down Internet, Blackberry, Text Messages; Mubarak Rival Returns to Egypt; Protests Rattle Yemen; Only Certainty is Uncertainty
Posted: 27 Jan 2011 10:22 PM PST
Once again it's the unwatched pot that boils over. A revolt that started in Tunisia has spread to other countries in Africa and the Mideast. Protests in Egypt have gotten downright ugly as demonstrators threw firebombs and chanted "Down with Hosni Mubarak, down with the tyrant." Police responded with teargas and bullets.
Mohamed ElBaradei, an Egyptian dissident flew home to claim his stake in the revolution, but no one showed up to cheer.
Egypt Shuts Down Internet, Blackberry, Text Messages
As noted earlier in Blood on Bernanke's Hands; Riots in Egypt over Food Prices and Unemployment; Twitter in the Spotlight, social media outlets, especially Twitter have played a leading role in organizing protests.
In response Egypt's Internet, Blackberry, and Text Mesaging Shut Down
Reports are emerging that Internet has gone down in Cairo and throughout Egypt, only hours before the largest planned protests yet.
According to a report from The Arabist, "Egypt has shut off the internet."
CNN reporter Ben Wedeman confirmed Internet is down in Cairo and writes, "No internet, no SMS, what is next? Mobile phones and land lines? So much for stability.
The Los Angeles Times is also reporting that BlackBerry Internet has been taken offline in Egypt.
All International Connections Shut Down
The Huffington Post has had numerous updates to that story, each confirming additional shutdowns. Here is the 9:45 PM ET update ...
Confirming what a few have reported this evening: in an action unprecedented in Internet history, the Egyptian government appears to have ordered service providers to shut down all international connections to the Internet. Critical European-Asian fiber-optic routes through Egypt appear to be unaffected for now. But every Egyptian provider, every business, bank, Internet cafe, website, school, embassy, and government office that relied on the big four Egyptian ISPs for their Internet connectivity is now cut off from the rest of the world.
World News Yemen
The New York Times discusses World News Headlines on Yemen.
Yemen, home to one of the world's oldest civilizations, is the poorest country in the Arab world as well as a haven for Islamic jihadists and the site of what amounts to a secret American war against leaders of a branch that Al Qaeda has established there.
In January 2011, Yemen became the latest Arab state to see mass protests in the wake of a revolution in Tunisia, as thousands of Yemenis took to the streets in the capital and other regions to demand a change in government.
Until the protests, the world's attention had mainly been focused on fears that Yemen could become Al Qaeda's next operational and training hub, rivaling the lawless tribal areas of Pakistan where the organization's top leaders operate.
Yemen faces a violent separatist movement in the south and an increasingly bold insurgency by Al Qaeda. An intermittent rebellion in northwestern Yemen that flared up again in August 2009, leaving dozens dead and wounded, has added another element of instability.
Al Qaeda's growing presence in Yemen — where it took credit for a deadly attack on the American Embassy in 2008 — is especially troubling because the country's fractious tribes and rugged geography make it notoriously difficult to control.
Much of the violent tribal feuds, banditry and kidnapping appear beyond the control of the central government. Yemen has the region's largest arms market: the country, with roughly 20 million people, is said to have at least 20 million guns.
Grounds for Extremism
Yemen is fertile ground for extremism not only because of its tribal culture and topography, but also because of its deep poverty, high illiteracy and birth rates, and government corruption.
For more on the Al Qaeda connection and the Yemini threat, please see the 10-page New York Times article Is Yemen the Next Afghanistan?
I am pleased to make the NYT global headlines list for my earlier report.
Tens of Thousands of Yemeni Protesters Demand President Resign
The LA Times reports In Yemen, tens of thousands march against president
Demonstrators angry over unemployment and oppression under President Ali Abdullah Saleh demand political change. The unrest worries the U.S., which has been working with the government to defeat an Al Qaeda offshoot.
The current unrest in the Middle East spread to impoverished Yemen on Thursday as tens of thousands of protesters angry over unemployment and political oppression marched in the capital against President Ali Abdullah Saleh.
Instability in Yemen is a major concern for Washington, which has been working with Saleh's government to defeat an entrenched Al Qaeda offshoot that claimed responsibility for last year's attempted bombings of planes over U.S. airspace. Officials fear anarchy in the country would give militants a strategic base in the Arabian Peninsula and the Horn of Africa.
The U.S. has expanded its intelligence and security roles in the country, and American military aid is expected to reach at least $250 million this year, a major increase from previous years. But Washington has long been wary of Saleh, who runs a government based on patronage networks and has a history making questionable deals with enemies, including Islamic militants, who years ago were tolerated.
Only Certainty is Uncertainty
The Washington Post also picked up on the Al Qaeda Yemen connection in As protests swell from Yemen to Egypt, Middle East faces uncertainty
The tumult in Yemen, where more than 10,000 people took to the streets of the capital, Sanaa, on Thursday, added a troubling new dimension to the regional unrest that began nearly two months ago in Tunisia. Yemen, one of the poorest and most heavily armed countries in the Middle East, is home to multiple separatist movements and has its own particularly virulent branch of al-Qaeda.
"Yemen is a different game," said Khairi Abaza, a Middle East expert and a senior fellow at the Washington-based Foundation for the Defense of Democracies. "If things go out of hand in Yemen, you have many players who will be waiting to try to affect the outcome, from al-Qaeda to Iran."
The only certainty, experts said, is uncertainty - an extended and potentially dangerous period of instability that is probably just beginning.
"What happened in Tunisia is completely unprecedented in the Arab world," said Bruce Riedel, a former CIA officer who served as special assistant on the Middle East and South Asia to three presidents. "We've never had a dictator toppled by the street. As a consequence, there is no safety net, no organized opposition ready to move in. . . . No one has a clue what is going to emerge in some of these places."
Riedel said the uncertainty, combined with speed of the change underway, presents the Obama administration with an array of difficult choices as it seeks to show support for democratic expression while working to preserve stability and prevent violence. Historically, U.S. governments "have never gotten these things right," he said.
Washington Post Video
Thankfully, the protests in Yemen have not been violent.
Mubarak Rival Returns to Egypt - No One Cheers
The Telegraph reports Mubarak rival flies to Egypt as the revolt gathers pace
Mohamed ElBaradei, the Egyptian dissident, flew home to Cairo on Thursday night to stake his claim as the leader of the would-be revolution to overthrow President Hosni Mubarak.
"If people, in particular young people, if they want me to lead the transition, I will not let them down," he told reporters in Vienna before boarding his flight.
Mr ElBaradei presented his offer as a gesture of self-sacrifice, yet it is unclear how grateful the protesters will be.
There were no throngs of people to greet him at the airport and many view the former chief of the United Nations nuclear watchdog with a degree of suspicion, seeing him as a rich outsider whose understanding of Egyptian suffering is limited.
As Mr ElBaradei has seized the limelight, so Mr Mubarak has shunned it. There has been no sign of him since protests began. Members of his family are rumoured to have left the country.
With the president looking ever weaker and more isolated, the outlawed Muslim Brotherhood, by far the largest opposition movement in Egypt, chose to make its first move by supporting the protests. "We are not pushing the movement, but we are moving with it," the group said in a statement. "We don't wish to lead it, but we do want to be part of it."
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
Posted: 27 Jan 2011 10:22 PM PST
Once again it's the unwatched pot that boils over. A revolt that started in Tunisia has spread to other countries in Africa and the Mideast. Protests in Egypt have gotten downright ugly as demonstrators threw firebombs and chanted "Down with Hosni Mubarak, down with the tyrant." Police responded with teargas and bullets.
Mohamed ElBaradei, an Egyptian dissident flew home to claim his stake in the revolution, but no one showed up to cheer.
Egypt Shuts Down Internet, Blackberry, Text Messages
As noted earlier in Blood on Bernanke's Hands; Riots in Egypt over Food Prices and Unemployment; Twitter in the Spotlight, social media outlets, especially Twitter have played a leading role in organizing protests.
In response Egypt's Internet, Blackberry, and Text Mesaging Shut Down
Reports are emerging that Internet has gone down in Cairo and throughout Egypt, only hours before the largest planned protests yet.
According to a report from The Arabist, "Egypt has shut off the internet."
CNN reporter Ben Wedeman confirmed Internet is down in Cairo and writes, "No internet, no SMS, what is next? Mobile phones and land lines? So much for stability.
The Los Angeles Times is also reporting that BlackBerry Internet has been taken offline in Egypt.
All International Connections Shut Down
The Huffington Post has had numerous updates to that story, each confirming additional shutdowns. Here is the 9:45 PM ET update ...
Confirming what a few have reported this evening: in an action unprecedented in Internet history, the Egyptian government appears to have ordered service providers to shut down all international connections to the Internet. Critical European-Asian fiber-optic routes through Egypt appear to be unaffected for now. But every Egyptian provider, every business, bank, Internet cafe, website, school, embassy, and government office that relied on the big four Egyptian ISPs for their Internet connectivity is now cut off from the rest of the world.
World News Yemen
The New York Times discusses World News Headlines on Yemen.
Yemen, home to one of the world's oldest civilizations, is the poorest country in the Arab world as well as a haven for Islamic jihadists and the site of what amounts to a secret American war against leaders of a branch that Al Qaeda has established there.
In January 2011, Yemen became the latest Arab state to see mass protests in the wake of a revolution in Tunisia, as thousands of Yemenis took to the streets in the capital and other regions to demand a change in government.
Until the protests, the world's attention had mainly been focused on fears that Yemen could become Al Qaeda's next operational and training hub, rivaling the lawless tribal areas of Pakistan where the organization's top leaders operate.
Yemen faces a violent separatist movement in the south and an increasingly bold insurgency by Al Qaeda. An intermittent rebellion in northwestern Yemen that flared up again in August 2009, leaving dozens dead and wounded, has added another element of instability.
Al Qaeda's growing presence in Yemen — where it took credit for a deadly attack on the American Embassy in 2008 — is especially troubling because the country's fractious tribes and rugged geography make it notoriously difficult to control.
Much of the violent tribal feuds, banditry and kidnapping appear beyond the control of the central government. Yemen has the region's largest arms market: the country, with roughly 20 million people, is said to have at least 20 million guns.
Grounds for Extremism
Yemen is fertile ground for extremism not only because of its tribal culture and topography, but also because of its deep poverty, high illiteracy and birth rates, and government corruption.
For more on the Al Qaeda connection and the Yemini threat, please see the 10-page New York Times article Is Yemen the Next Afghanistan?
I am pleased to make the NYT global headlines list for my earlier report.
Tens of Thousands of Yemeni Protesters Demand President Resign
The LA Times reports In Yemen, tens of thousands march against president
Demonstrators angry over unemployment and oppression under President Ali Abdullah Saleh demand political change. The unrest worries the U.S., which has been working with the government to defeat an Al Qaeda offshoot.
The current unrest in the Middle East spread to impoverished Yemen on Thursday as tens of thousands of protesters angry over unemployment and political oppression marched in the capital against President Ali Abdullah Saleh.
Instability in Yemen is a major concern for Washington, which has been working with Saleh's government to defeat an entrenched Al Qaeda offshoot that claimed responsibility for last year's attempted bombings of planes over U.S. airspace. Officials fear anarchy in the country would give militants a strategic base in the Arabian Peninsula and the Horn of Africa.
The U.S. has expanded its intelligence and security roles in the country, and American military aid is expected to reach at least $250 million this year, a major increase from previous years. But Washington has long been wary of Saleh, who runs a government based on patronage networks and has a history making questionable deals with enemies, including Islamic militants, who years ago were tolerated.
Only Certainty is Uncertainty
The Washington Post also picked up on the Al Qaeda Yemen connection in As protests swell from Yemen to Egypt, Middle East faces uncertainty
The tumult in Yemen, where more than 10,000 people took to the streets of the capital, Sanaa, on Thursday, added a troubling new dimension to the regional unrest that began nearly two months ago in Tunisia. Yemen, one of the poorest and most heavily armed countries in the Middle East, is home to multiple separatist movements and has its own particularly virulent branch of al-Qaeda.
"Yemen is a different game," said Khairi Abaza, a Middle East expert and a senior fellow at the Washington-based Foundation for the Defense of Democracies. "If things go out of hand in Yemen, you have many players who will be waiting to try to affect the outcome, from al-Qaeda to Iran."
The only certainty, experts said, is uncertainty - an extended and potentially dangerous period of instability that is probably just beginning.
"What happened in Tunisia is completely unprecedented in the Arab world," said Bruce Riedel, a former CIA officer who served as special assistant on the Middle East and South Asia to three presidents. "We've never had a dictator toppled by the street. As a consequence, there is no safety net, no organized opposition ready to move in. . . . No one has a clue what is going to emerge in some of these places."
Riedel said the uncertainty, combined with speed of the change underway, presents the Obama administration with an array of difficult choices as it seeks to show support for democratic expression while working to preserve stability and prevent violence. Historically, U.S. governments "have never gotten these things right," he said.
Washington Post Video
Thankfully, the protests in Yemen have not been violent.
Mubarak Rival Returns to Egypt - No One Cheers
The Telegraph reports Mubarak rival flies to Egypt as the revolt gathers pace
Mohamed ElBaradei, the Egyptian dissident, flew home to Cairo on Thursday night to stake his claim as the leader of the would-be revolution to overthrow President Hosni Mubarak.
"If people, in particular young people, if they want me to lead the transition, I will not let them down," he told reporters in Vienna before boarding his flight.
Mr ElBaradei presented his offer as a gesture of self-sacrifice, yet it is unclear how grateful the protesters will be.
There were no throngs of people to greet him at the airport and many view the former chief of the United Nations nuclear watchdog with a degree of suspicion, seeing him as a rich outsider whose understanding of Egyptian suffering is limited.
As Mr ElBaradei has seized the limelight, so Mr Mubarak has shunned it. There has been no sign of him since protests began. Members of his family are rumoured to have left the country.
With the president looking ever weaker and more isolated, the outlawed Muslim Brotherhood, by far the largest opposition movement in Egypt, chose to make its first move by supporting the protests. "We are not pushing the movement, but we are moving with it," the group said in a statement. "We don't wish to lead it, but we do want to be part of it."
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
The Global Revolution Is Accelerating - Mike Krieger Explains
The Global Revolution Is Accelerating - Mike Krieger Explains
Submitted by Tyler Durden on 01/27/2011 13:39 -0500
Submitted by Mike Krieger of KAM LP
Terrorism is the best political weapon for nothing drives people harder than a fear of sudden death.
- Adolf Hitler
Sometime around the year 2005, perhaps a few years before or after, America will enter the Fourth Turning. A spark will ignite a new mood. It will catalyze a Crisis. In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. It could be a rapid succession of small events in which the ominous, the ordinary, and the trivial are commingled.
Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression
- Strauss & Howe in “The Fourth Turning” written in 1997
All people who try to get elected to government are in love with government, it’s just that the Democrats are in love with one kind of government and the Republicans are in love with another kind of government, and government is going to continue to grow until there is revulsion for government.
- Jared Dillian (he puts out a great daily piece I would look into it at http://www.dailydirtnap.com/)
The Global Revolution: Welcome to Phase Two
When first I mentioned the food riots in Tunisia and Algeria in my note two weeks ago the former authoritarian leader Zine al-Abidine Ben Ali had yet to flee to Saudi Arabia with much of his nation’s gold. What I find so amazing about this whole situation is why someone in their right mind would take the time to take some shiny little element that is in a bubble and that you can’t eat in the chaos surrounding one’s escape to another nation. Surely he has hidden foreign bank accounts and since gold is just another “fiat” currency according to a Wall Street strategist, why bother? He must be some right-wing radical that likes the Constitution and is therefore anti-American. Isn’t that right Mr. Potok?
So back to the food situation. When I say that we are in Phase Two I am actually not referring to the simple fact that a leader with a 23 year rule under his belt was deposed in weeks seemingly out of nowhere, I am referring to the actions that are being taken and will be taken all over the world in response. As I have said time and time again, government’s today throughout the world could care less about their citizens. When they show signs of caring it is merely to satiate the people back to sleep so that they can stay in control. The leaders of governments throughout the world today consist of the worst humanity has to offer. The most egomaniacal, narcissistic specimens on the planet (with some exceptions of course, Ron Paul for one). They care about power and maintaining it. So what does this have to do with food? A lot. I have stated in the past that we are in revolutionary times. The system that has existed for most of our lives (all of my life) is crumbling under its own weight of insanity, immorality and fraud. The last ditch effort by the global elites has been to flood the world with money and make sure nothing they are invested in ever fails or defaults. This bought them a little time and their hope was that rising asset prices would boost confidence and lead to a recovery that could maybe keep this scam monetary system running for another decade or two. The problem with this strategy is that we are in the Fourth Turning. My generation is coming into its own and we don’t buy the bull shit of our parents’ generation. We don’t believe in Democrat or Republican. We don’t believe in the system itself. We will be the ones making the decisions going forward. We will default on the astronomic promises our parents made to themselves. We will create an entirely new monetary and financial system. Real free-market capitalism will flourish, not this socialism for the rich garbage Obama loves so much. We will focus on doing good while doing well. Not because the government forces us to, rather because we are witness to and victims of this sick, twisted creation of our parents generation that celebrates total greed without the slightest concern of the consequences to others.
With this as a backdrop, the leaders of all nations are scrambling to somehow survive in their positions through this time period. What is happening across the emerging world now is countries that had increased prices for food and energy are reversing policy. Countries such as Saudi Arabia are bidding for world grain supplies. Think about this for a minute. What this means is that what is being employed around the world at a time of global crop failures is essentially price controls. What happens when you have price controls? No elasticity of demand. What does that lead to? Even worse supply/demand imbalances and ultimately food shortages and everything goes to the black market and farmers stop planting as much. So what we now have is the very beginning of a food price spiral that will lead to prices in dollars at unimaginable heights. I would start to be very careful of the quality of food you buy and where it comes from. I assume companies will start mixing in all sort of fillers and garbage into their foods. Especially in emerging markets looks for increases in tainted or corrupt food supplies.
This will also affect oil prices and they should move substantially higher. While people still quote WTI as the oil price and claim it is down, this is total and complete nonsense. Nobody pays WTI prices. Brent is $98/b and Asia Tapis is $101.50/b. Anyone that is telling you oil prices are moving lower are either lying or don’t know what they are talking about. For example while WTI is down 7% from recent highs, gasoline is down only 4% and heating oil is at the highs. Do you pay WTI or do you buy gasoline? There is also this idea that OPEC is going to come out and save the world by boosting production. Good luck with that. First of all, OPEC’s true spare capacity number is highly debatable and I am in the camp of those that thinks they do not have control over the market at this point. Banana Ben Bernanke does. Secondly and most importantly these Arab nations are short food and we are in a food crisis. They are also amongst the most vulnerable governments to overthrow. You think for a second that they will crash oil as food prices are soaring? Oil is their currency. For what it is worth I think many of these regimes will be history within a year. Then the Western governments will fall one by one. This is the Fourth Turning. There is no point trying to stop it, the only thing you can do is prepare. There is precious little time left for that.
U.S. Treasury Bond Holders Will Never Be Paid
Remember the old saying, “if you don’t know who the sucker is in the market, you are the sucker.” Well ladies and gentlemen if you own U.S. treasury bond you are the sucker. There is one way these things will be paid back. With completely worthless pieces of paper, OR not paid back at all. The one thing linearly thinking investors are not appreciating right now is that there is a gigantic awakening occurring in the United States that will develop into a successful and peaceful revolution. The new leaders that will emerge will consider this debt illegitimate as I do personally. It will not be paid. Think it can’t happen? Watch.
Meanwhile, looking at the chart of long term treasury yields what we see is a coiled pattern where rates have been in a tight range ever since breaking to the upside in early December. I think these rates are about to break hard in one direction and I think that direction is higher. When I looked at the commentary from the Fed yesterday and I saw this line “expectations have remained stable, and measures of underlying inflation have been trending downward,” all I could think was if I was a bond investor I would just say “alright I have had ENOUGH.” I think that some of the biggest moves ever in the history of financial markets could be coming within the next 1-2 months. I would focus on treasuries and precious metals.
Silver Disobedience
While the 20th century was a brutal and violent one, some amazing things happened. Two prophets, Martin Luther King Jr. and Mohandas Gandhi we able to usher in a period of tremendous social justice for their respective causes through non-violent means. We are now entering a time where the people (completely and totally sold out by their leaders and masters at the banks) must exercise civil disobedience and non compliance with an evil system. Fortunately for us, the most effective and powerful means of this I can think of is completely legal and consists of buying physical silver and taking possession. Although the comex paper silver price is showing a drop, this is not reflected in the physical market which is tight as a drum. Many major dealers are sold out of product all over the world and the U.S. Mint recently stated that they sold 4.7 million silver eagles in January alone, a new record and the month isn’t even over. If you do not like the way the banks and politicians are robbing you blind in broad daylight buy physical silver and take delivery. I think it is abundantly clear that the raid on the comex silver market is a desperate attempt to shake out some supplies since the actually physical market is being depleted rapidly.
One of the irrational “fears” out there is that the Fed will somehow tighten rates. Get out of the emotional brain for a second and into the logical one. The Fed funds rate is 0-25 basis points. The two year treasury yields 0.60%. If the Fed raised rates even to 0.50% with the two year note at 0.60% total and complete chaos would ensue and the government wouldn’t be able to deal with the rising costs of debt service. It is just not going to happen. They will print and print until the whole corrupt house of cards crumbles to dust.
V for Victory
We are in revolutionary times. The new generation will not accept the Federal Reserve. We will not accept feudalism by an oligarchy of banking criminals. We will not forget the Constitution. We will not accept SDRs or any global fiat currency. We will not accept global government or “governance” (sounds so much better doesn’t it).
As I went to grab dinner last night, I noticed V for victory posters plastered all around downtown (http://www.youtube.com/watch?v=s5GlOeEUyQ4&feature=related). Go Boulder we are winning the infowar!
Turn off the tv and think for yourself,
Submitted by Tyler Durden on 01/27/2011 13:39 -0500
Submitted by Mike Krieger of KAM LP
Terrorism is the best political weapon for nothing drives people harder than a fear of sudden death.
- Adolf Hitler
Sometime around the year 2005, perhaps a few years before or after, America will enter the Fourth Turning. A spark will ignite a new mood. It will catalyze a Crisis. In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. It could be a rapid succession of small events in which the ominous, the ordinary, and the trivial are commingled.
Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression
- Strauss & Howe in “The Fourth Turning” written in 1997
All people who try to get elected to government are in love with government, it’s just that the Democrats are in love with one kind of government and the Republicans are in love with another kind of government, and government is going to continue to grow until there is revulsion for government.
- Jared Dillian (he puts out a great daily piece I would look into it at http://www.dailydirtnap.com/)
The Global Revolution: Welcome to Phase Two
When first I mentioned the food riots in Tunisia and Algeria in my note two weeks ago the former authoritarian leader Zine al-Abidine Ben Ali had yet to flee to Saudi Arabia with much of his nation’s gold. What I find so amazing about this whole situation is why someone in their right mind would take the time to take some shiny little element that is in a bubble and that you can’t eat in the chaos surrounding one’s escape to another nation. Surely he has hidden foreign bank accounts and since gold is just another “fiat” currency according to a Wall Street strategist, why bother? He must be some right-wing radical that likes the Constitution and is therefore anti-American. Isn’t that right Mr. Potok?
So back to the food situation. When I say that we are in Phase Two I am actually not referring to the simple fact that a leader with a 23 year rule under his belt was deposed in weeks seemingly out of nowhere, I am referring to the actions that are being taken and will be taken all over the world in response. As I have said time and time again, government’s today throughout the world could care less about their citizens. When they show signs of caring it is merely to satiate the people back to sleep so that they can stay in control. The leaders of governments throughout the world today consist of the worst humanity has to offer. The most egomaniacal, narcissistic specimens on the planet (with some exceptions of course, Ron Paul for one). They care about power and maintaining it. So what does this have to do with food? A lot. I have stated in the past that we are in revolutionary times. The system that has existed for most of our lives (all of my life) is crumbling under its own weight of insanity, immorality and fraud. The last ditch effort by the global elites has been to flood the world with money and make sure nothing they are invested in ever fails or defaults. This bought them a little time and their hope was that rising asset prices would boost confidence and lead to a recovery that could maybe keep this scam monetary system running for another decade or two. The problem with this strategy is that we are in the Fourth Turning. My generation is coming into its own and we don’t buy the bull shit of our parents’ generation. We don’t believe in Democrat or Republican. We don’t believe in the system itself. We will be the ones making the decisions going forward. We will default on the astronomic promises our parents made to themselves. We will create an entirely new monetary and financial system. Real free-market capitalism will flourish, not this socialism for the rich garbage Obama loves so much. We will focus on doing good while doing well. Not because the government forces us to, rather because we are witness to and victims of this sick, twisted creation of our parents generation that celebrates total greed without the slightest concern of the consequences to others.
With this as a backdrop, the leaders of all nations are scrambling to somehow survive in their positions through this time period. What is happening across the emerging world now is countries that had increased prices for food and energy are reversing policy. Countries such as Saudi Arabia are bidding for world grain supplies. Think about this for a minute. What this means is that what is being employed around the world at a time of global crop failures is essentially price controls. What happens when you have price controls? No elasticity of demand. What does that lead to? Even worse supply/demand imbalances and ultimately food shortages and everything goes to the black market and farmers stop planting as much. So what we now have is the very beginning of a food price spiral that will lead to prices in dollars at unimaginable heights. I would start to be very careful of the quality of food you buy and where it comes from. I assume companies will start mixing in all sort of fillers and garbage into their foods. Especially in emerging markets looks for increases in tainted or corrupt food supplies.
This will also affect oil prices and they should move substantially higher. While people still quote WTI as the oil price and claim it is down, this is total and complete nonsense. Nobody pays WTI prices. Brent is $98/b and Asia Tapis is $101.50/b. Anyone that is telling you oil prices are moving lower are either lying or don’t know what they are talking about. For example while WTI is down 7% from recent highs, gasoline is down only 4% and heating oil is at the highs. Do you pay WTI or do you buy gasoline? There is also this idea that OPEC is going to come out and save the world by boosting production. Good luck with that. First of all, OPEC’s true spare capacity number is highly debatable and I am in the camp of those that thinks they do not have control over the market at this point. Banana Ben Bernanke does. Secondly and most importantly these Arab nations are short food and we are in a food crisis. They are also amongst the most vulnerable governments to overthrow. You think for a second that they will crash oil as food prices are soaring? Oil is their currency. For what it is worth I think many of these regimes will be history within a year. Then the Western governments will fall one by one. This is the Fourth Turning. There is no point trying to stop it, the only thing you can do is prepare. There is precious little time left for that.
U.S. Treasury Bond Holders Will Never Be Paid
Remember the old saying, “if you don’t know who the sucker is in the market, you are the sucker.” Well ladies and gentlemen if you own U.S. treasury bond you are the sucker. There is one way these things will be paid back. With completely worthless pieces of paper, OR not paid back at all. The one thing linearly thinking investors are not appreciating right now is that there is a gigantic awakening occurring in the United States that will develop into a successful and peaceful revolution. The new leaders that will emerge will consider this debt illegitimate as I do personally. It will not be paid. Think it can’t happen? Watch.
Meanwhile, looking at the chart of long term treasury yields what we see is a coiled pattern where rates have been in a tight range ever since breaking to the upside in early December. I think these rates are about to break hard in one direction and I think that direction is higher. When I looked at the commentary from the Fed yesterday and I saw this line “expectations have remained stable, and measures of underlying inflation have been trending downward,” all I could think was if I was a bond investor I would just say “alright I have had ENOUGH.” I think that some of the biggest moves ever in the history of financial markets could be coming within the next 1-2 months. I would focus on treasuries and precious metals.
Silver Disobedience
While the 20th century was a brutal and violent one, some amazing things happened. Two prophets, Martin Luther King Jr. and Mohandas Gandhi we able to usher in a period of tremendous social justice for their respective causes through non-violent means. We are now entering a time where the people (completely and totally sold out by their leaders and masters at the banks) must exercise civil disobedience and non compliance with an evil system. Fortunately for us, the most effective and powerful means of this I can think of is completely legal and consists of buying physical silver and taking possession. Although the comex paper silver price is showing a drop, this is not reflected in the physical market which is tight as a drum. Many major dealers are sold out of product all over the world and the U.S. Mint recently stated that they sold 4.7 million silver eagles in January alone, a new record and the month isn’t even over. If you do not like the way the banks and politicians are robbing you blind in broad daylight buy physical silver and take delivery. I think it is abundantly clear that the raid on the comex silver market is a desperate attempt to shake out some supplies since the actually physical market is being depleted rapidly.
One of the irrational “fears” out there is that the Fed will somehow tighten rates. Get out of the emotional brain for a second and into the logical one. The Fed funds rate is 0-25 basis points. The two year treasury yields 0.60%. If the Fed raised rates even to 0.50% with the two year note at 0.60% total and complete chaos would ensue and the government wouldn’t be able to deal with the rising costs of debt service. It is just not going to happen. They will print and print until the whole corrupt house of cards crumbles to dust.
V for Victory
We are in revolutionary times. The new generation will not accept the Federal Reserve. We will not accept feudalism by an oligarchy of banking criminals. We will not forget the Constitution. We will not accept SDRs or any global fiat currency. We will not accept global government or “governance” (sounds so much better doesn’t it).
As I went to grab dinner last night, I noticed V for victory posters plastered all around downtown (http://www.youtube.com/watch?v=s5GlOeEUyQ4&feature=related). Go Boulder we are winning the infowar!
Turn off the tv and think for yourself,
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