Thursday, April 03, 2008

Canadian Silver Bug - April Musings

Today will just be some general stream of consciousness blather on things that have caught my eye this week as somewhat interesting.

First of all I think we are at bottom for the prices of Silver and Gold. Try as puppet television does to convince us good times are coming back soon, nothing has changed. U.S. debt continues to rise, Oil continues to deplete, food stocks shrink in the face of new Asian demand and bio fuel waste, mortgages are still defaulting, and U.S. factory orders are down 2x the estimates, face if folks it’s still plenty shitty out there and nothing is being said that justifies U.S. dollar strength or the recent bounce in financials so this rally like the last couple mini rallies will be weak and fleeting.

Don't panic and run, hold or accumulate

The scariest thing this week is the talk of giving the U.S. Fed more power, What the hell are they thinking? The U.S. Federal reserve is a private company owned largely by foreign banking interests and is the main force that has consistently devalued the U.S. dollar, destroying 93% of its value since its inception. Why on earth would you give them more power? Not only that but Bernanke is a complete idiot, who only now is finally admitting the U.S. may see a recession, Duh! Like who in their right mind does not think the U.S. is in and has been in a recession for some time. How do these lying fools live with themselves?

I loved the Reuter article this week stating that some houses were worth less than their copper pipes.

This gutting of vacant houses is ruining some houses, scuttling valid sales offers and is perfectly predictable as I said early last year. During the Great Depression savvy lenders allowed defaulted people or other to rent houses for next to nothing knowing that having someone in the house to heat, maintain and protect your property allowed you to maintain its value until the market improved. Foolish lenders did not want to be landlords and left properties to be empty only to find them gutted, squatted in, ruined by lack of heat and maintenance.

My belief is the banks should communally or through the Gov should set up a housing authority to act as a massive property management company. Once established put people in these homes with agreements to maintain them, assess rents fixed to income giving holders of bad debt at least some sort of return on bad paper, and build in options for tenants to rent to own.

While this will not recover the total cost of abandoned homes for banks, CDO holders etc, it will however keep people off the streets and in viable communities bettering families and protecting children, it would lower incidence of panicked arson by those soon to be evicted, and it would allow properties to maintain some value until the economy improves.

With the tens of thousands of houses being abandoned why not renovate some of them to be accessible and give them to Iraq veterans who after being crippled will probably never work again.

I still think that with the water shortages and insane prices in the U.S. southwest there would be great opportunity in buying property in the old northern steel belt cities. While the days of big industry might be dead in these regions, eventually the population is once again going to move to where the water is. The idea of buying whole streets or blocks in places like Detroit, Cleveland and many other depressed areas and taking it all down to the ground and rebuilding the right way, will one day be a huge profit maker. With wind off the lakes for power, neighbourhood wide Geothermal heating for homes and newly designed walking communities designed to promote transit and thwart cars these cities could become templates of how N.A. cities need to be rebuilt for the peak oil age. Where else but such depressed areas could you even attempt such a large, bold and potentially profitable citywide urban renewal?

Perhaps when I make big on silver I’ll reconsider such an investment.

Another important factor is the total levels of loans defaults taking place
Total delinquent loans up to 2.65%
Bank credit cards overdue 4.38%
Auto loans 1.9%
Mobile homes 2.92%

200,000 bank jobs are expected to be eliminated. I don't think you'll be seeing many of these people get equivalent jobs right quick!

All this and some fool on CNBC this morning was claiming discretionary expenditures would strengthen and lead the recovery, Ha!
With the rate people are losing their houses the only area I can see discretionary expenditures growing is camping gear, used RVs and Camper trailers as more Homerville’s start popping up.
When can we start calling them Bernankeburgs?

28 Million Americans are expected to be on food stamps by year end but don't expect them to increase monthly value of handouts to match food inflation.

Think this bad now? wait till grain and Hop shortages drive the price of your favourite beer up by 30%+ this year or worse yet, your favourite micro brewery just gets squeezed out, that’s right folks PEAK BEER.

Without beer we may as well just cut our wrists and go for a walk in the forest, it's the end of civilization.


Unknown said...

Should Peak Beer befall Western Civilization, expect a mass migration to Milwaukee... Get in early on The Great 2008 Beer Rush!

The reason the world is so incredulous at the Fed's proposals is that the only people whose interests this coup d'├ętat would serve is, as you rightly point out, the private shareholders of the Fed. (Mostly foreigners, true, but these people don't believe in national sovereignty). It cannot be allowed. On the other hand, it's not entirely clear how strong democracy is south of the border these days... the political elite are no different from the Mafia, as far as I'm concerned, and the banks have a long history of subverting American democracy.

Most people believe that Dubya hails from an old oil family. It is true that the Bushes had been in the oil business, but theirs is a banking dynasty going back to the days of George Herbert Walker and John D Rockefeller. In the thirties, the Bushes and Rockefellers were involved in the so-called 'business plot' to overthrow the US and install a fascist government run by banking and industrial elites. The plot failed, of course, having been exposed by General Butler, but this horror show called the Bush presidency has most certainly been a creeping slide into fascism.

That said, I don't believe that this hand is being played out of strength, but out of weakness. The Fed is scared of losing their power, and they're willing to turn the US into a command economy and intervene to prop up the markets in order to keep that power. The free market lunatics are revealed to be exactly what we always knew them to be: charlatans and hacks.

Anyhow, it's definitely getting ugly down there. We're better off in Canada, but with Goldman Sachs at the helm of the Bank of Canada and the US border an hour south of here, we're going to be taken for a ride as well. (Did you see the story in the Globe and Mail saying the BoC will consider monetizing ABCP?)

Anonymous said...

I guess the need to monetize something if they plan on meeting RBCs claim the loonie will go back down to 90 cents.

The other thing that scares me was that agreement the other week allowing Canadian and U.S. troops to cross the border in case of emergency or civil disturbance. What do they expect to happen that they are not telling us?

Food riots, armed revolt when the dollar fails?

oh well, I wonder where I can grow some hops?

Anonymous said...

Number one selling beer in Canada is Budweiser followed by Coors lite.
Are we as a nation so oblivious to what is happening, or do we just have a fondness for the taste of urine in brown bottles and cans. We are so screwed! By the way Budweiser is made with GMO rice courtesy of Monsanto and the pee flavour? I'm not sure.
MOOSEHEAD Breweries is the only major Canadian brewry left in Canada. This alone should have been enough to wake this country up and give our collective heads a shake. Its Fiday, got a Moosehead in one hand and a 20 oz bar in the other, both have intrinsic value to me.

Unknown said...

I saw that RBC idiot on BNN earlier today. As he was on, I emailed them to say "this guy is going to lose a lot of viewers a lot of money." Unbelievable.

The ethanol policy is economic warfare against the developing world... economic genocide, if you will. It's being exacerbated by the collapse of the USD, too, as any investor can speculate on grains by investing in DBA. I don't see any other way to understand this policy, as it's clearly not 'green' and offers no efficiency gains over gasoline.

Food riots are already happening... not here in Canada, and I don't expect them to, thank god. We're in one of the better places in the world to wait out what's coming, I think... As for what they're expecting but not telling us, well, who can say? These people had a plan, and it's all falling apart all around them... who knows what ill-conceived ideas they might try out of desperation? Wayne Madsen is reporting that there's a classified document circulating around capitol hill talking of possible 'conflict and revolution':

I saw the military agreement... I too wonder what it means. Our sovereignty has become something rather casual in recent years, hasn't it? At the SPP summit in Montebello this past August, there were US troops guarding the site and enforcing a perimeter. On whose authority? Our Canadian politicians might not be the hyenas we see down south, but we've got some cleaning up to do here in Canada as well. For what it's worth, I don't believe Canadians would be as complacent in the face of govt-gone-wild as our neighbo(u)rs to the south would... Evidently, opponents of the SPP are starting to organize:

Carter Apps, dabbler of stuff said...


I don't buy that we can't have food riots, the two reasons for riots are shortages, and increased prices, the first should not be an issue but the second might.

While it certainly will not be as common place as riots in the third world, should food prices rise enough to put the squeeze on the poor, I can see protests by several different groups of anti poverty advocates as quite likely.

For the most part we seem to be on the same page but there is so much to worry about I don't have time enough to blog about it all.

Anonymous said...

I am a long-haul truck driver dependent on diesel. When we drivers can't get fuel cause we will be priced out of market, we will no longer move food to high density urban areas in Canada. Truckers are starting to protest against fuel prices, what will the protest levels be, once more middle class Canadian families are priced out of the food market? BTW, the only trucks working on a Saturday night are carrying fuel or food. Truckers are starving for profits, fuel stations are starving for profits, farmers are starving for profits, we are all starving!

Who is going to start the riots?

Carter Apps, dabbler of stuff said...

good point.

So we can add a 3rd possible trigger for riots, while there will be no real shortage of food the system of distribution could collapse from a withdraw of service by transportation workers.

As I understand it many indy truckers and companies lock in a per mile cost when making contracts, sudden or prolonged fuel inflation can make their commitments total money losers. Of course the advent of peak oil is already diverting some long haul business back to the rails, I don't see truck driver being a growth industry by next decade.

As an aside as truck driver do you have any opinion on the hydrogen/electrolosis injection systems. Do they work? are they catching on?

Anonymous said...

It takes a great amount of energy to pull 160,000 lbs of weight forward. I do not know about the hydro/electro injection system, but the industry is also developing a LNG system (Westport) as a step in between.

Who knows if new systems will work??? Solar is wireless energy transfer.

Some of us people will adapt to our ever changing world. As for my future as a driver??? Well, I can load and lead a team of mules as my grand-dad did in 1908, (100 yrs ago).

Or, I will load and paddle my canoe along the original trade routes (Nation & Ottawa rivers).

Carter Apps, dabbler of stuff said...

The system I was asking about adds a container of distilled water and electrodes to your rig. Taking power from the alternator it uses hydrolisis to crack the hydrogen out of the water and injects into the engine.

The hydrogen adds hp, allows the normal fuel to burn hotter and cleaner giving better fuel economy and less pollution. The decrease in particulates means the engine last longer, less repairs.

I've seen write ups on it but have never found anyone who actually uses it.

Anonymous said...

I have seen a wed page promoting that system but I have not seen it applied in any truck so far in my travels.

Unknown said...

LOTW: Of course you're right, and I didn't mean to suggest that life in Canada would remain comfortable in this coming 'crisis window'(as Jim Puplava at Financial Sense Online likes to call it), but rather that we're in one of the more favorable countries to try to ride this out, as we have:

1. An abundance of resources (though I am concerned that those resources might be usurped by the US -- if you haven't read Linda McQuaig's 'Holding the Bully's Coat', I highly recommend it). We have food, water, energy(including nuclear/hydro).

2. A much more concentrated infrastructure than that of the US: whereas the US is industrialized throughout its continental area, its rail system is ineffective and not capable of replacing existing long-haul transport. As Kunstler says, the US has a rail system the Bulgarians would be ashamed of! Now, the Texas Supercorridor/SPP project is said to indicate plans to build a massive aorta cutting through the middle of the US, but I'll believe that when I see it.

Of course, if we had an effective government in Ottawa we might be able to address whatever weaknesses may exist in Canada, but our elected officials are too busy quibbling over nothing to make themselves useful.

Agreed that there's much to worry about -- far more than can usually be blogged without sounding like a crazy person.

Carter Apps, dabbler of stuff said...

Dan, too late, friends and family refuse to talk politics or finances with me, and I get comments like
"So, why is the End coming this week?"

Frankly I don't give a damn being right and preparing is more important than being respected. I've already warned them many times and warned them that since they refused to help themselves and prepare I will not being using my megre resources to bail them out once it all falls apart. These are often people who started out with more than me and a modest metals buying program of 2% would still make them better off than I will be with a more aggressive plan.

I think this is something all people should buy and store in case of it getting real nasty

under $100 for 7 years of food growing insurance.

Unknown said...

Heh, I know the feeling... my family's not even prepared to address 9/11 properly, and other such 'conspiracy theories'. To be fair, there's a pretty steep learning curve to be able to fully appreciate the magnitude of what is happening right now, and not all people are accustomed to connecting the dots.

I've got my stepdad, who used to be a heavy trader back in the day, to begin to understand what's starting to unfold, at least in economic terms. The seedy political context underlying all of this is a bridge too far for most of the people I'm in contact with. They'd never believe 'conspiracy theories'. My brother's ears will perk up once gold hits its next upleg though.

As for metals, I came to them recently... Just last year, really. Thank god I did too... That's given me the time to properly position my portfolio and get rid of all those income trusts I never really understood to begin with.

Thanks for the link-- unfortunately, I live at College and Bathurst and have no land to plant on, and anything I did plant would likely be doomed :) Still, probably worth ordering regardless... surely someone I know is more useful in the garden than me... I've thought about renting a storage locker and putting some costco hoards in there. I dunno... I was born in 1979, so I'm really out of my element. Reading can only teach you so much.

I'm lucky enough to have a cushion of investments to provide an 'island of safety'. I'm mobile, on a short-term rental agreement and not locked in...

Have to say though... I'm originally from Mtl and have always found Toronto a bit dull. Maybe if this city goes Mad Max it'll add some much needed excitement! :)

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