« Derivatives Beast Is Over Half A Quadzillion | Main | Group of 30: the Conclave of Financial 'Geniuses' Meet »



"No no he's not dead, he's, he's restin'! Remarkable bird, the Norwegian Blue, idn'it, ay? Beautiful plumage! "
And in other news, Liz Trotta, ex-NY bureau chief of the WAPO, has agreed with Hillary that killing Obama/Osama/both would be a good thing. The mordant chuckle after saying this on Fox was priceless.
And in yet other news, McCain is one overmedicated bundle of wierd. Ambien indeed. And all of his meds have that do not take with alcohol warning, McCain is not a teetotaler.
The Libertarians nominated ex republican rep. Bob Barr. I suspect that this will not take a whole lot of conservative or libertarian votes away from Obama. Doubt that it will make even Georgia twitch.
Diesel over $5/ gal., and the Fed DOT has new data saying that miles driven went down last month. I suspect that commercial miles led the way, of course an increase in unemployment should also lead to a drop in commuter miles driven.
In the good news deparment, airlines are looking to increase the cost of flying for overweight people.

hakan with the reindeer

It's turning to a 'Dog eat dog' world:

"Even for some of those who survive a job cut, the emotional landscape can change. 'It’s like I woke up and I’m in a different country,' said a person who has worked for Merrill Lynch for more than two decades and has weathered a recent round of layoffs there.

He described widespread anger, mistrust and angst at Merrill, both among those leaving and those staying. 'People are reeling,' he said. 'The culture has turned. It is a nasty culture.'"

Everybody should listen to AC/DC now and then:
Businessman, when you make a deal
Do you know who you can trust?
Do you sign your life away?
Do you write your name in dust?


Elaine: Amr (American Airlines) said we
dont have a playbook for 110.00 barrel of oil.
There not alone.....

Elaine Meinel Supkis

Yes, there is some real nastiness out there, a lot of ...BITTERNESS....

I was amazed at the rage thrown at Obama for telling the truth back then. Since that day, the bitterness levels have risen significantly. Along with this rides the Four Horsemen who tempt us to fix things in the stupidest way possible.


Dear Elaine,
This article sums things up pretty well. http://www.kitco.com/ind/Turk/turk_may262008.html . The US dollar is done. No ones gonna save it. The Global power elites want to destroy the USA. They are succeeding in their plan of borderless communities. God help us.

Patrick O'Meara

Christina the Global power elites want to destroy all nations. Watch that great movie Network (1976) it says it all in the scene where Arthur Jensen (Ned Beatty) lectures Howard Beale (Peter Finch) on the ways of the new world. "There are no nations Mr. Beale only corporations.....
Elaine maybe you could post that scene.


Wouldn't it be better to stop the speculation in oil with drastically increased margins or trading restrictions instead of raising interest rates to the roof? At least at this moment in time? Yes, interest rates should be 5% or higher, but raising them to that level would not stop this speculation, right?

I was trying to enlighten some 20-somethings last night about the fundamentals of the fractional banking system, government enforced money monopoly fraud, and how it is the source of inflation, speculative bubbles and increased debt on all levels. Wow, what hard work it is to hold someone's attention on such a topic! Our young minds have been totally blacked out to such things. Anyone have any good one-line shockers that could help grab the attention of these people?

Buffalo Ken

If you want a one-liner, forget it. There are none. But the young minds sure enough comprehend what we are in the midst of. They know. The question is, what to do?

I still think no debts. Everyone should try to eliminate all debts. If you presently have no debts, then you are in the best situation because you can choose not to become indebted.

It might mean living in a tent for 10 years. It might mean something else. But, I think it would be a wise choice. A good way to prepare for the future.


Elaine Meinel Supkis

The only way to stop the speculators from getting loans is to have the Fed sop up all this extra dough via high interest rates! Alas! THERE IS NO OTHER WAY.

In other words, if they get a 8% or 12% return on savings in a bank, the money will go there. And won't go into commodities which are RISKY. If the Fed was smart, they would have kept rates slightly above the rate of inflation.

THEY DID NOT. It is now several hundred basis points BELOW the rate of inflation. So no one saves money the old way. They want silver dollars, gold coins or oil!

Buffalo Ken

If I could get 8% or more, I would just put all my money in the bank and let it get that. For what it is worth (which may be minimal), I agree. We just need these rates to get things back where they belong.


Buffalo Ken

Plus I think this. I think commerce has to localize. It makes so much more sense this way.

There will obviously be global communication, but commerce is best when it is local.

It just makes the most sense this way.



You are right, higher rates is the way to permanently fix the situation. I was starting to think like the money men, believing that we needed to also minimize the housing pain and depth of this recession. But you guys are right. It is better to get it over with in one big fast correction and stop this nonsense of negative returns on regular savings accounts.

Buffalo Ken

Hey - it is Memorial Day, and me as a young 42 year old, I am just sitting here. Here is waht i think - Memorial for whom? For whom should we be memorializing. I honestly do not know.

I could have gone on, but my wife just came in here so now it is time for me to go. Peace to the rest of you.

Quantum is how it is going and in my opinion this is going to happen soon. In the next week or month or year or even sooner.

Don't most of us recognize that it needs to happen. I think we do.



The vast majority of people I meet do not comprehend the fraud and fundamental instability of the banking system, and it is very difficult to get them interested in the 10-second time frame where they actually listen before drifting back into their own thoughts. Knowledge and understanding is rapidly growing among a minority, but so too is the amount of time people devote to the combination of mind polluting garbage on TV, video games and self-absorption in myspace and facebook.

The fundamental flaw in the system being the concept of interest. In that it creates a system where the total payment obligations are always greater than the amount of money in circulation, forcing either bankruptcies or the need for exponential growth. We all are aware that the planet in finite and exponential growth can not continue much longer.

Secondly, it seems necessary to have a physical item such as gold or silver as the basis of money because from history it appears that humans will never be able to permanently resist the temptation of increasing the money supply.

Laws can and have been made to restrict the money supply, but it eventually all such laws get eroded as history is forgotten. A law could also be made to not let someone graduate high school until they understood monetary systems and their failed histories, and more laws could be stacked upon that. With a stack of laws and educated people a stable system may be possible without gold or silver, but we would still have to trust the few people that create and watch over the money not to lie or cheat.

Education is the first step to finding agreeable solutions, and we are very blessed to have Elaine and others who spend their time writing, thinking, and in doing so educating. But there is an urgency to educate as many people as possible because of how quickly we have/are coming to fulfill Jefferson's prophecy "the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."

Along the lines of localization as a solution, what do you think about Habitat for Humanity's no interest loans as a model for an alternative community banking system? In such a system new "money" is only created to balance the creation of an object (in this example it is a house) of equivalent value. The problem with this is that it is limited by the ability of humans to cooperate. We have been divided and isolated to such a point where it is now difficult to reach simple agreements let alone decide as a community what or whom is worthy for a loan.

Robert Sczech

If the oil speculators are responsible for the rising oil prices (which I doubt), then we should applaud their actions. The insanity is not in the high oil prices. The insanity is in the incredibly high oil consumption. The world burns more than 80 million barrel of oil per day. The US alone burns more than 20 million barrel per day which translates to 10,000 gallons per second (20,000,000/24/3600*40). That is crazy. At that rate, the oil will be gone in 30 years if not sooner. What is desperately needed is not lower oil prices. We need much higher oil prices in order to bring down oil consumption substantially. The remaining oil should be preserved so we have a chance of building an alternative energy infrastructure. And building an alternative energy infrastructure will take more than 30 years.

Why is so difficult to understand such an obvious fact?


Dear Elaine,

I'm going to raise an idea that I'm sure is very unpopular and provactive. I don't endorse the affirmative of this point-of-view, but I would like to bring it up for discussion.
Could someone say that the US is "generous" to "allow" the Middle East countries to have the oil under its soil? Would seizing it ever be considered a justifiable act? The Carter Doctrine stated that oil was a matter of national security but I don't know if it ever made it clear how aggressively our government would pursue this end. This may be tested in the months and years ahead. As a nation and world of laws, how does this square up? Would our actions rest on the "Law of the Jungle"?

Thank you for the valuable content,


Elaine Meinel Supkis

Dear GMG, WWIII will be very ugly. 2/3rds to 3/4rs of all humanity will be killed within the first 24 hours. All the major cities will be infernos. All the oil wells will be blown up.

Afterwards, those of us who know how to knap rocks, shoot bow and arrows, make spears and such will rule the world. Luckily, I have those skills as well as swords and full steel armor...my poor horse died the other day but can be replaced.

So going for the oil via our military isn't very recommended. We got away with it in Iraq ONLY because China and Russia were not ready to choke us off for this. But they made it very, very clear, stealing more oil is OUT OF THE QUESTION. Period.

End of story.

Robert: 100% correct! Thank you for all the details. Every gas guzzler, every house that consumes lots of energy is a money pit. We are the biggest oil users on earth and the PENTAGON is the biggest energy user of any entity on earth, tremendous amounts of energy. And we are the deepest in debt. We have negative savings. Biggest trade deficit in the world.

This is totally wrong and has to be corrected and NOT via war.


I believe Buffalo Ken is asking the key questions.

Not, Should or should not the Fed raise interest rates?

Nor, Should or should not oil be cheaper or more expensive?

These are not useful questions, because no one reading this blog can affect any outcomes in the level of interest rates or the price of oil.

The key questions are:

Do I have any debts? Do I have any savings?

If the answer to the first question is no, move directly to the second question. If the answer to the first question is yes, STOP EVERYTHING! Pay of those debts!! IF you have both savings and debts, use your savings to pay off the debts, since your savings may be at risk (yes, even Treasuries and FDIC insured accounts), while you are GUARANTEED to make money (at the rate of interest you owe) by paying off your debts.

If you have no debts, and the answer to the second question is no, STOP EVERYTHING! Start saving as much money as you possibly can - get assistance in budgeting and saving if you don't know how. Everyone can save something.

If you have no debts and are saving, you are in the most secure group of people on earth. All you need to do is be careful about saving.

Those of us old enough to remember the period from 1966-1979 know that as average prices rise, and oil suddenly skyrockets, and interest rates are lower than the rate of inflation, there is a temptation to invest in precious metals, oil, art, etc (because at such times these things may appreciate faster than other things - including interest on bank accounts). That works out for those who bought BEFORE most of the price increases (it also works for those who buy stocks, real estate, or anything else early in the formation of a bubble). Everyone else will get screwed, because the probability is that the exaggerated prices will drop back - not to their beginning levels, but much lower than their peak levels. People who buy assets, (including commodities and bullion) BECAUSE their price is rising, are market-timing speculators. This is gambling, not creating security. Many people bought gold in the late 70's at $700/oz, $800/oz, and $900/oz telling themselves they were "hedging" against inflation. By the early 1980's gold was under $300/oz, and it has taken TWENTY FIVE YEARS for gold to get back to break-even nominal value with what they paid. Buy some gold coins to hoard if you're worried about Nuclear War or the End of Civilization (that was a common rationalization in the 1970's), but don't plan to use them before the apocalypse.

The main secret to individual financial security in times like these derives from self-discipline. The domestic and international economy are giagantic, and outside of normal individual's practical control - so don't try to outwit them. To paraphrase Charles Kindleberger, "Other than outright greed, the main reason people make risky speculative investments [in Tulips, stocks, real estates, commodities, bullion, etc] is because economic circumstances change [e.g., inflation] in a way that threatens to reduce their standard of living; instead of making the necessary adjustments [reductions] to their standard of living, they seek higher returns than are consistent with safety, and the longer they manage to achieve those returns the less unsafe it seems to them and the more unsafe it actually is."

Elaine Meinel Supkis

I explained that in the past. Yes, Michael, you are quite right!

Even more interesting: I have bought real estate when interest rates are quite high. Over 9% mortgages. But the PRINCIPAL is very low! This is because prices drop rapidly. Then, when interest rates fall, the value shoots up and you can sell for a huge profit and when you are done paying off the PRINCIPAL, you get a huge bonus, more like 100% profit in more than one case.

But that is the important thing: you do have to risk buying at high interest rates. I did this by putting down a 50% deposit. Then, when I sold, the profits were high and if the property dropped further, I wasn't pressured to sell, just for example.

Cash is a good thing sometimes. On the other hand, I only saved money in banks during high interest rate times. About 75% of my life, it wasn't worth it, putting cash in banks. They were a rip off.

Now, it is far worse: only once before was it more than 300 basis points below the real rate of inflation [as it was calculated in the early 1970's]. Today, the 'inflation rate' is totally fake and even so, the Fed rate is over 100 basis points below the fake inflation rate! OUCH.

And thus: easy lending for speculators who use it to create...inflation.


War with Iran is coming!


The George W Bush administration plans to launch an air strike against Iran within the next two months, an informed source tells Asia Times Online, echoing other reports that have surfaced in the media in the United States recently.

Two key US senators briefed on the attack planned to go public with their opposition to the move, according to the source, but their projected New York Times op-ed piece has yet to appear.

Buffalo Ken

So folks should be allowed to move money out of their retirement funds in order to pay of the house - with no tax penalties. Then many houses could be paid off and the debt burden could begin to ease in one way that would help many. I know that I would like to do this, but it currently is not an option.


Buffalo Ken

I said a long time ago, I don't think a war with Iran is going to happen. It would be suicide. We do not need that. Do we?

I don't think so. I hope our so-called "leaders" can get a grip.


Elaine Meinel Supkis

Ken, the banks need us to NEVER pay off ANY loans! You see, the loans they hold are called 'assets' and if we change this to savings in banks, the banks call this 'debits'!

For home owners, paying no mortgage is pure gold. Why?

The money for a mortgage can be turned into 'savings'. And banks will have to pay US for the money, not we pay them for some money! I personally live with no mortgage now. I used to keep a token mortgage for tax purposes, around $32,000. But when my husband had to prematurely retire, I paid off everything and now am debt free since we get not tax advantage anymore.

Timing is everything! No one should have any debt on a house after age 50-55 years old. This gives a good 18 years to pile thousands of dollars a year into some financial savings plan that isn't at a ridiculous interest rate. For example, with my $32,000 loan costing me around $365 a month, this represents over $5,000 a year if there is no mortgage, to put up as 'savings'.

Unfortunately, we are now on a fixed income and the savings grow less and less as the price of all necessities skyrocket. Social Security gives a laughable amount for inflation, like 1-2% a year! While inflation has roared along for years now!

Buffalo Ken

You know I bet there are a bunch of "old farts" (no offense intended) who could retire now and then do something better with their time.


Buffalo Ken

Because think about it, if you have enough to retire and pay off your debts, then why not. Why not get out of the "game" and get to know your neighborhood.

You know what I am saying? Do you?


Israel invaded Lebanon with 3500 tanks and complete control of the air -- and was stopped dead.

Even Buber was impressed.

Short of a Hagee rapture, or an Israeli death wish, an Iran War is off the table. IMHO.


Paul Van Eeden made the argument on CNBC this morning that the inflated price of oil is almost entirely due to increased money supply and falling dollar.

Paul Van Eeden of Cranberry Associates in Toronto is a very well-respected analyst in mineral and mining stocks.

Under Armour Socks

I like the tactical gear because I can wear it for work and for working out.Fits nicely and is comfortable.Very good at moisture wicking.This helps keep me dry and my shirt dry.

Supra Shoes

I want all the stuff about Season 3 and I want no more loan comments! Now-se!

The comments to this entry are closed.

Blog powered by Typepad