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Hello Elaine,

“The discipline of forcing investors to eat dirt is important to any system.”

Reminds me of Vladamir Putin's statement that he would make all the capitalists raping Russia 'run around in circles eating dust.'

In college days in the 70's my two favorite economics professors were:

Dr. Erwin Graue
Fr. Jerome Schwegmann SJ

Two of Dr. Graue's favorite phrases included:

"You are a 'Weisenheimer'."
"The great white fathers in Washington."

His favorite mantra was:

"Money easily acquired is more easily spent, until it has no value at all!"

Fr. Schwegmann regularly reminded us that 'inflation' was not rising prices, but too many dollars chasing too few goods.

Naturally, I agreed with both of these classical economists and have suffered the ridicule of my friends and family to this very day; for trying to warn them about the phony paper US money culture of death.

Now of course family and friends will not even acknowledge my references to your WEB site and others spreading the same warnings.

Guess I'll go back home and pick-up the pieces sometime next Spring.

Kindest regards,


Hello Elaine,

I think I found the 'Carry Trade Toilet' here in the USA you refer to in today's article:



It seems that the Federal Home Loan Banks have been doing a lot of “banking” in the past few months! The Bears over at Ticker Forum have found it also, so you may consider reading some of their blog.



Kindest regards,


Hi Elaine,

Here is another interesting perspective from this article:


Hyper Inflation: Crude Oil and Gas The Next Fed Made Bubble To Come In 2008 ……by Eric_Chevrette

Folks are starting to wake up!!

Elaine Supkis

Already the price of anything that saves fuel has risen over 20% in the last year. So this means there is great buying desire which means people can charge more. Gas guzzlers, etc, are cheaper and cheaper, so it looks as if there is little inflation. But anyone trying to escape the energy trap is also trapped in an inflationary spiral when they buy things that are appropriate.

But retrofit, they must! Better doors, windows, insulation, heating sytems, gas miser cars, etc. All are selling rapidly and I know this from my own family and friends. I am retrofitting some doors as well as building more sun rooms on my kid's houses, for example.


Thanks again Elaine!

Those Japanese I used to work for are something else. Secretive. Deceptive. Authoritarian. But all that is clearly the consequence of what could be called a "cultural accident." If I was raised in Japan, I would likely share those traits. It was irksome that my bosses would know I knew they told me lies, but forbade me to express even passive dissent. They are quite big on royalism. It's a power thing. It's almost fun to hear them pretend to lie! But many Japanese are great people!

You, Elaine, are an expert on "esoteric economics." And that's a crucial topic, for sure. I myself am more interested in "primitive economics" — energy sources, production systems, transportation, etc. I am convinced that that needs to be examined just as closely.

By the way, a huge (and masterfully written) story about esoteric economy has hit the front page over at the great blog My Left Wing:


The Road Through Hell Leads to Redemption: Part One
by: gottlieb
Mon Nov 26, 2007

The United States has been on a slippery slope since shortly after its founding. What many of the founders warned against - foreign entanglements and banking interests' control of the money supply - came to pass in the 19th and early 20th Century. Private banking interests - the ability to create money (the super-commodity) out of nothing and then charge interest on its lending - own the government's (the people's) debt. The United States has entered into dark alliances all over the world (how many bases? 700+ in a hundred-plus 'sovereign' nations) - not in the name of life, liberty and happiness, not in the name of the people; the common wealth - but in the name of Capitalism. The rights of capital over human beings. The right of capital over labor. Property over people.

This is their big foray into economics. I did a post on that thread, with links back to here. And I also did a little side research. Here is an absolute gem!

Mike Whitney at CounterPunch has a fascinating article up. The article is called "Cheney's betting on bad news" and provides an account of where Cheney has socked away more than $25 million. While the figures may be estimates, the investments are not. According to Tom Blackburn of the Palm Beach Post, Cheney has invested heavily in "a fund that specializes in short-term municipal bonds, a tax-exempt money market fund and an inflation protected securities fund. The first two hold up if interest rates rise with inflation. The third is protected against inflation."

The Veep's Curious Investment Portfolio
Is Cheney Betting On Economic Collapse?

July 5, 2006

Cheney has dumped another (estimated) $10 to $25 million in a European bond fund which tells us that he is counting on a steadily weakening dollar. So, while working class Americans are loosing ground to inflation and rising energy costs, Darth Cheney will be enhancing his wealth in "Old Europe". As Blackburn sagely notes, "Not all bad news' is bad for everybody."

Elaine Supkis

Mike is a great writer. I love him a lot. I wish he were rewarded with a position at a top publication that pays for such research and work. This is the stupidest part of our present media system: great writers are read all over the earth but totally ignored by our entire media apparatus.

Mike Whitney is a stellar example of this discrimination against elegant, clear and fact-driven writing that is PUNISHED. I pray he sees better days and our media changes for the better.

I wish I had a million bucks so I could hire writers of his caliber.


Gary Dorsch, who writes an economic newsletter that Elaine has mentioned, wrote a commentary a couple of months back about China's voracious appetite for stuff. Not only do they have great demand for oil, iron, copper, and other commodities, but they became a net importer of food in 2004. China's demand for milk has been increasing 25% per year and have doubled their demand for dairy products since 2000. They are consuming 30% of the world's milk production and represent 20% of world's population.


China's inflation rate has gone up to 6.5% officially, the highest in 11 years, but some suspect that it is a lot higher. Meat prices are up 49% in the last year, egg prices 27%, chicken 20%, grains 6.4%, and there is a shortage of pork. China's demand for Brazilian soybeans has doubled since 2000. Their inflation in food prices this year averaged 18.2%. Even in India, where most are vegetarians, chicken consumption has doubled since 2000 according to Dorsch.

Elaine Supkis

Yes, they are eating. We are too but we never noticed our huge slice of the pie until now.


Elaine, you have been complaining about rising food prices for the longest time. Ditto for oil and everything else. The money supply worldwide has been going up in double digits including that in China.

Elaine Supkis

Part of this is production costs are going up due to fuel hikes. I buy hay for Sparky, the last of my big mammals. I used to have an ox team who were on TV, for example. And I had a flock of sheep.

Now we have only the horse. And hay has gone from $1.25 a bale in 1992 to $3.50 a bale today. Grain for the animals has doubled, too. Everything goes up and up and up and I know when I do tractor work, I stopped doing hauling my tractor to work sites, this cost $50 in fuel these days, one trip of just 30 miles and then a day's work! People blanche when I tell them what it costs. So I stopped doing this.


Elaine, so what's going to happen? Are the Chinese going to "industrialize" the other 1 billion of their people, India likewise, and sell the world their value added technology products and stress the planet even further by only buying the world's finite raw materials and food? 15 years ago, the US was suppose to lead the world with the technology revolution and its jobs, but Clinton, Bush, and the financiers changed all this. China (Airbus purchase?) and India better start buying our value added products and reverse the imbalances or World War III could happen. I can't believe that the financial industry sold out this country for a mere 300 million using their lobbyists and that's all it took for Congress and the politicians to go along with it. The factory workers in China are really not participating in their industrialization. Debt slaves are being created around the world which creates class warfare globally.

Elaine Supkis

HAHAHA. Our politicians are cheap, aren't they? The Japanese bought them long ago, the Chinese have followed suit. Everyone is buying them except for the American voters who are stuck with some pretty awful choices.

But this is our own fault. We want Santa Claus for President.

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