Again apologies for the hiatus in posting from both Nicole and yours truly. It's been a crazy time lately, with 3-4 scheduled events daily, followed by not enough sleep and early buses, cars and speaking engagements. For the past 4 years, and certainly the past 2 when Nicole started developing her lecture tours, TAE for me meant 10+ hours a day 7 days a week on average of reading and writing.
Australia and New Zealand have been the first time that was no longer possible. The lectures take a lot of time, obviously, and besides that, it's not as if we can afford to get satellite based internet access or anything like that, so we depend on available access and available time, which at times are simply not there. Ashvin's doing a great job in the meantime filling in the holes, but he can't do it all by himself either; he's finding out now what I did every single day since we founded TAE.
But that doesn’t mean we don't follow the news. We have active discussions behind the scenes about what goes on.
There are those who feel that the Israel-Iran-SWIFT-Strait of Hormuz news is the most important thread out there. And I'm sorry, but I do not. I still see it as a hyped up piece of war mongering, and not much different today from what it was when Hormuz became a daily news feature right after 9/11. A lot of chest thumping and sabre rattling, but I don't see America going all-out war games with Iran. Not just yet.
China, Russia, the Arab world, none of them would look kindly upon such an endeavor. They all might feel they would need to get actively involved. I don't know any more than you do what goes on behind closed doors, but I don't see it at this point. Not with Obama as the incumbent president. After the November elections, if he gets re-elected, yeah, perhaps; at least by then there'll be a platform, a stage, to proceed. But not right now, while the Santorums and Romneys of the land are allowed to roam freely out there.
Of course, if any of them would be the next POTUS, anything goes. Either of them have expressed such far out of left (or right, if you will) field opinions, your bet is as good as mine as to what comes next. Still, don't be fooled into thinking any POTUS has any real say. US Presidents are bought and sold and marketed like so many flavors of detergent. The decision to go to war or not is not made in the Oval Office, but in places where visibility is a no-no.
Then again, as I said, I don't think Obama as a wartime president is marketable to the US population at large at this point in time. Sure, they could go in tomorrow morning, and I’ll have to eat my words, my socks and my underwear. All I can do for now is to try and feel and understand what could be going on in the heads of those behind the curtains. A risky thing to do for sure, but I'll do it anyway, since there are far too many loud war is here voices out there for my taste.
And that sends the same jittery signals down my spine that the gold bugs do. Too many voices declaring the same made up hypothetical truth at the same time, how can that ever be a good thing? Financial markets never go the way that a too large consensus thinks they will; so why would anything else? We face a huge politica-industria-financia-media machina out there that tries to make us believe things are what they are not.
That is why there is a TAE in the first place. If you got the truth from those guys off the bat, we wouldn't have to re-interpret it for you. But we all know you don't get that truth; Woodward and Bernstein have turned into George Orwell.
How anyone can believe there is an economic recovery going on out there is beyond me; I really truly and simply don't get it. And it's starting to irritate me hugely. I don't want to name names here yet, but I see people writing on the web who just follow whatever direction the wind seems to blow from, without any critical neuron or opinion of their own. And that irks me. A lot.
Look, if we would be witnessing a true recovery right now, this would be proof that you can you can get out of problems caused by too much debt, with more debt.
Because that is all that has happened over the past few years. Mind you, issuing additional debt MIGHT work, but only if you would see phenomenal economic growth numbers. Well, they ain’t there. Not in the US, not in Europe, not even in China. Note: phenomenal would be 8%, and preferably more than that. We're looking at 1.5% max, and negative for much of Europe, and that's if and when we choose to believe official government numbers.
In short: the only reason the S&P briefly went over 1400 recently is that the financial world swallowed up your taxpayer dollars, and those of your kids and grandkids. Not because there's anything at all in the economy that's moving upwards.
In fact, I'd say: are you FCUKING kidding? BHP Billiton reports plateauing Chinese iron ore demand, and media only shift their focus once they report it? We've been saying for years that China must fall, simply because its money comes from western economies which have no way to go but down.
There are still voices out there, believe it or not, that claim domestic consumption will save the Chinese economy. But domestic consumption is hardly rising, if at all. Just not going to happen. Forget it.
I never talk about things that involve violence and related matters on the site, just as Nicole doesn’t incorporate them into her lectures. The reason is not that we never think about such things, but that if we do address them, before you know it the entire focus goes to them, and exclusively so. It's not a matter of not speaking the truth, it's about trying to get your message across.
But, regardless, I‘ve privately been saying for a long time that I don't see how China can escape a full blown civil war in the next decade. I just don't see it. The largest human mass migration in history, by far, only to be met by a huge drop in demand for trinkets and other great value boosters from your main export markets. And when the migration tries to go in reverse, they find their birthplaces too polluted to grow food or even drink the water. Look, France has a reputation for protests. But France is just cute and cuddly compared to China, where there are no holds to bar.
Did that get me banned now?
Don't know if you guys followed this, but China has an obligatory change of leadership coming up later this year. And it's musical chair time. Their high council/politburo/give it a name is about as murky as opaque will go, which allows for a lot of infighting. Makes you think of similar battles under Mao, and the Gang of Four, the Cultural Revolution, Wikipedia them all if you're not familiar, all of which were responsible for millions of deaths and multiples of utterly miserable lives.
Maybe when you have that many people, an individual life starts to appear less important?
Add to that that much of China's economic miracle is based on made-up numbers to start with, plus tons of local buro chiefs trying to look better than they really are through accounting tricks and fake gains, where loans are used for appearances, even if they come from an underground loanshark network that squeezes everyone for years to come just to look good today.
China is a powderkeg if ever you've seen one. The economies where Nicole and I are traveling right now, Australia and New Zealand, voluntarily declare themselves highly dependent on Chinese growth. Well, Beijing itself predicts 7.5% growth now, far below the 9-10%+ of the past years. China’s iron ore demand is flat, not growing, as per BHP Billiton. And those numbers about rising oil demand therefore require a lot of scrutiny too. 7.5% may look great, but it's quite simply not if and when all else is based on much higher numbers.
US and EU oil/gasoline demand, or refinery output, give it a name, is way down, like anywhere between 5% or a multiple of that. China's oil demand must have been hit too in view of other data like the iron ore ones mentioned above. And in the face of that oil prices are near record highs? Excuse me? Looks like demand is not up. And no, supply is not down either. So? Stuart Staniford had a post up on TheOilDrum recently that puts a lot of peak oil assumptions in question, so much so that I intend to write a re-definition of the entire principle in the light of the unfolding financial crisis, as in: Peak Oil: Not in Your Lifetime. If only I had the time to do the research.
And of course Greece is still up there, and Spain, which might be the next big target for the bond markets.
Look, nothing has been solved, no matter what they try and make you think. And we will be back here in full force as soon as we can. Meanwhile, we are finally making some inroads with city councils and the like; tentatively, for sure, but then, we are the biggest potential threat these people have ever seen to their cushy jobs, it takes a brave mind to open up to what endangers any person's very own hard fought position. And we understand that. But it still must be done.
So anyway, I’ll try and do more of these stream of unconsciousness type reports; they are for now the best we can do, but hey, that's not too bad, I hope.
Nicole is as we speak reviewing the latest versions of the 4 part DVD series we are producing, Finance, Energy, Preparation, and Conversations. It's not like we're not present, it's just that we are shifting towards what will hopefully be better ways of doing what we feel needs to be done. And lectures, wherever they take place, are an integral part of that. So we do them. And enjoy the traveling, meeting people, all of it, while we do it.
More to follow as we go along …..