Human Nature

This post was made in 2020 and was taken down by ????

For some reason YouTube is allowing it to be posted now. It will be interesting to see how accurate my forecast was.  

I haven't looked at this site for awhile - since all the you tube stuff was deleted. Maybe it's time to up load a few things.

We're still working on the Homestead place, just in case, but  have been laid up with RA for the last 5 years and don't expect recovery. So my physical ability is limited but I haven't exhausted alternative methods yet. I think it is still possible to get it back to reasonable living standards. We may need it in the not to distant future.
 

Tiny House 9

Tiny House #8

Alternate Universe

An Alternate Universe

In an alternate universe up maybe down and lies may be the truth but in the world we live in some concocted theory is not a basis in fact. In the world we live in there is no such thing as an economic fact (too many variables dependent on perception) which is why economics is based in economic theory, which in turn is why we are in so much economic trouble. From here this post could take a bunch of different directions so I will guide the prose down the path I believe will identify the biggest problem we face today.

Now remember this is coming from an old redneck that knows a couple big words but operates in a world of common sense where lofty ideology and advanced degrees don’t mean a hill of beans. It doesn’t take an Ivy League education to know that you can’t spend more than you make and if you do it will have to be paid back at some point with interest. A concept our elected representatives can’t seem to understand, a concept that is miscomprehended by the population. Pay the interest on the debt but never pay the debt. The government is a service organization, we pay for protection and for public services, we hire representatives to look out for our interests because we are paying a lot for those services and the propensity for corruption is high. This is the same corruption we fought a Revolutionary War to get away from. Yet here we are cornered by the very people we pay to protect us and involuntarily forced to pay more for ideological social change we don’t want. I was once told by a group of Spanish speaking illegal’s that there was no need for them to learn English because the U.S. would soon be a Spanish speaking country. Are we weak or stupid? The answer is, we are both.

I can’t believe the idiocy I hear and read these days. The days of me trying to explain the truth about economics and politics is coming to an end. I’ve warned and given the signals that indicate a change is taking place. Maybe a monarchy or a socialist nation is what you want, it certainly appears that way.

The biggest problem we face today is a population that lives in an alternative universe where stupid is smart and weak is strong.

Paint on the Tiny House

You folks seem to like the video at the beginning of the blog posts - so here we go.

Now on to more serious matters, namely indications of economic conditions. There has been a lot of bad news in Europe and the Middle East and of course we have our own domestic problems but on a more fundamental level we are seeing an economic trend worldwide toward more financial manipulation. We of course know we are the trend setters in manipulation of every kind and now we have France wanting to debase their monetary supply by printing more currency to be more competitive in the world market place. The same country that proclaimed last month that 60% of their debt was illegal. Doesn't it seem a little coincidental that the head of the IMF is French. How about Germany - the driving force of the EU - looking for more bail outs because half of their country is bankrupt. Here in the U.S. we have the president asking for 4.2 billion to deal with the illegal children coming over the Mexican border when it would only cost 100 million to fly them back home - could that money be for funding a bunch of other things ? He won't say.

I read an article recently by Dr. Rickards about how important the next policy statement of the Fed is to the direction of our economy. If they continue the tapper on QE 3 it will drive us further into recession and if they pause on the tapper or reverse the tapper it will cause international loss of confidence in the our financial system. I don't know but it sounds like there is no way out that isn't going to cause us pain. Exactly how sure are you that our government will do the right thing ?

Building a tiny house 4

Conformity

I've borrowed a passage from Barbs new book for my blog post this week - I hope she doesn't sue me.

"I am overwhelmed by all the things that are going on around us, and I bet you are, too. What 

can you do about it? Hang on and hope for the best? The U.S. has changed so much that it can never go 

back to the "good old days" – and were they so good anyway? But the encroachment of bigger and 

bigger government in this country means that many of our personal freedoms have been curtailed or, in 

some cases, eliminated completely. 

 

So what do we do when we don't know what to do? We look at what other people are doing 

and take our cues from them. In 1951, Solomon Asch, a pioneer in the field of social psychology, wanted 

to see how far people would conform to the opinions of others. Previous research had shown that, 

when a situation is ambiguous, in that there is no right or wrong answer, people tend to go along with 

what others do. Asch set up a situation in which the answers were completely unambiguous. He had 

research participants judge the lengths of lines, showing them a line to compare to three other lines. 

The question was very simple: Which of the three lines is this one most like? The answer was always 

very clear. If I were to show you those comparisons, you'd think I was crazy to ask you. But what Asch 

did was have each research participant sitting at a table with other people. The participant believed 

that the others at the table were also participants but, in fact, they were confederates who had been 

told how to respond on certain critical trials. On the first few trials the confederates gave the obvious, 

correct answer, as did the real participant. But on the critical trials, the confederates gave an incorrect 

answer; in the original experiment, all the confederates gave the same incorrect answer. When the 

participant's turn to respond came, he (the participants were all male) faced a dilemma. It was clear 

what the answer was, but all these other guys gave the incorrect answer. What did the real participant 

do? 

 

Asch believed that, because the answer was so clear, participants would ignore what the others 

said and give the correct answer. However, what he found was that, averaging across all participants, 

one-third of the responses on critical trials were incorrect. Overall, 75% of the participants gave at least 

one incorrect answer. In a control condition, with no confederates, the error rate was less than 1%. 

 I should point out that the conforming responses of the real participants decreased if one of the 

confederates gave an answer different from the rest of the group, especially if he gave the correct 

answer. 

Social psychologists have studied conformity ever since and have concluded that the tendency 

to conform is strong. 

 

The reason I brought this up is that we look at others to find out what to do. If it seems that no 

one is doing anything to alleviate the problems, we think that doing nothing is the thing to do. The 

problem is that we have very little information about what others might be doing. I doubt anyone who 

sees me in the grocery store thinks that Ray and I are preparing the best we can for what might be 

coming. 

 

We are accumulating three-month's-worth of food. There are a number of firms who will sell 

you what I call "apocalypse" supplies; they are expensive and I see no need to buy that stuff. We will 

soon have enough canned vegetables and meat, dried beans, rice, and other relatively nonperishable 

staples to last us three months. Don't buy it all at once, at the same place; Ray says it's like making 

moonshine. You don't buy 200 pounds of sugar at one store. Someone will know that you are up to 

something. And it is relatively inexpensive to do it a little bit at a time by buying a small package of beans or rice or a couple of extra cans of tuna each week. Unless you have a big family, you don't need 

to buy the biggest packages; the food could spoil and go to waste before you use it all. You don't want 

to have 50-pound bags of flour around to get weevil-ridden."

What's next ?

I do these little editorials on this blog ahead of videos or audios about the progress on different projects Barb and I have going on to make our retirement more enjoyable and prosperous. The reason for the editorials is that it is the only warning you are going to get for when things change - not for the better. You will wake up one morning and enough will have changed that it will affect every aspect of your life. No one can tell you what will trigger the events that will unfold but everyone is in agreement that it won't be good. Barb calls it anticipatory dread, I think it is good common sense to be prepared for mid range eventuality, some place between hyper inflation and complete Armageddon. I track a lot of stuff every day, mostly economic data, before I go to work and then again at the end of the day to see what the politicians have messed up during the day. I've done this all my life because it is paying attention that has been the difference between going broke or remaining in business.

We all know our government is grossly mismanaged, that this administration has no clue until it is published in the news, so it makes it kind of easy to figure out what Obama will do next - follow what the Euro Zone or the IMF or the UN are doing. When something happens like Benghazi or the flooding of the Mexican Border he can't follow anybody so he does nothing, pretends he didn't know, makes something up to cover up his lack of action. Well this week there is something happening at the IMF ( International Monetary Fund ) and you can bet the lost puppy will follow the head of the IMF home. Christine LaGarde, the head of the IMF, has released working papers that say when countries have deficit problems to avoid default they should nationalize pension plans as a way to gain capital and call it an investment in government. They should levy a one time wealth tax of 10% and call it the price you pay for being wealthy and to extend the maturity date of government bonds so they don't have to pay the principal. All it takes is one more drop of rain to break the dam - could this be it ?

What's a Person to Do ?

Lets see if I have this right.

Bulgarians are running on the banks, Obama wants us to have the same social structure as France, the radical faction of the Sunni sect of Islam is overrunning Iraq, our southern borders are being assaulted by illegals, the problems at the VA are way worse than has been reported and the IRS is way out of control. That's the tip of the iceberg, that's what we've seen this week. There is no question in my mind that things are going to change real fast, real soon.

Here's a short audio file on the progress at the tiny house.

Drilling a water well.

Since we are going to move out to the house project property we figured we better get the well in. We scheduled the drilling operation with a recommended well driller about a month ago and yesterday he came to do the work. I don't know how I get so lucky but this guy set up, drilled the well, installed the well casing all by himself. He didn't get started until noon time and was out of there by 6 o'clock, I've never seen anyone drill a well alone - it's at least a two person operation.

Around our area water wells are about 300 to 400 feet deep but we sit pretty close to the top of a mountain so who knows how deep it would be. He could have drilled 300 feet and I wouldn't know any different but it ended up 60 feet into the bedrock and 65 feet of dirt for a total of 125 feet and 8 gallons a minute. What great work this guy does. He had to come out this morning to grout the well casing and have it witnessed by the Health Department. We'll have the pump installed next week. There is no question about who I would recommend  to drill or repair a well around here, I guess I owe the guy who recommended him to me a little sipping liquor.

Quick Update

A couple of weeks ago the Austrian government declared that 60% of their sovereign debt was illegal laying the ground work for default. Today was the day they started to default. This is the exact same country that started the debt default crisis back in the late 20s and early 30s. Is this the signal for things to come ? It's something to think about. By the way, on the article about tappering by the Fed, I forgot to mention that the Fed isn't really tappering anyway - in the past few months they have bought almost a quarter trillion in U.S. Treasury bonds through I think Belgium, off the books of course, no reporting. The Tapper looks good to the U.S. population but it is clearly more manipulation.

Why the Federal Reserve has to Tapper.

Why the Federal Reserve has to Tapper

I have been hesitant to post a piece on this subject because I find it difficult to imagine a world with no common sense. Yet I keep hearing relatively reputable economist arguing the case for why the Fed can’t keep tapering the quantitative easing. I've always subscribed to the idea that simpler is better because I personally can’t understand complicated things. The idea that a butterfly flapping its wings in one part of the world will cause a hurricane in another part of the world is plainly beyond my comprehension. The idea that the Fed can continue quantitative easing when it produces no desired results for 4 years would be another of those incomprehensible things. The Federal Reserve is a private business, yes it is owned by the big banks and yes it is up to its eyeballs in politics but it is not part of the Federal Government. There is a profit mandate that governs every business, if you don’t turn a profit or at least break even you go out of business sooner or later. The Fed has no exemption from this business principle although they can’t be audited without an act of congress but you can’t escape the reality of going broke by not reporting the facts or under reporting.

Essentially the Fed is the governments’ bank, they buy Treasury Bonds from the government – loans that have to be paid back with interest – bonds are the collateral.  They are stewards of the dollar, controlling the physical amount and value of dollars in circulation by regulating deposit requirements and interest rates on “participating banks” in the private banking system. In the last few years the Fed has been buying a whole bunch of government low yield bonds and a whole bunch of debt (sub-prime mortgages) from the very banks that own them the “participating banks”   $4,000,000,000,000.00 worth.  These sub primes the Fed has bought will be a very big loss and as the Treasury Bonds mature they will be replaced with an even lower yield bonds as the government can’t survive without borrowing money and no one else will buy the bonds. This is not a balance sheet or income statement I would want to try to defend and somebody is going to have to try to do exactly that to the Federal Reserve Board of Governors. To add insult to injury the Fed has been doing some “off balance sheet” swaps with the ECB to bail out the Euro but because the transactions are unreported the amounts are unknown. Best guess – since 2009, 10 trillion dollars swapped for Euros, SDRs and other foreign currencies.

The Fed has to make an effort to cut their losses and tapering is the very least they can do.

Slow Week

For the last couple of weeks we have been working on a lot of change - getting a well driller scheduled, fiber optic cable scheduled, getting our vehicles squared away for another year, Barb got in a little practice with her new gun and a little work on the tiny house project. Still have to deal with the postal service though.

\\\\\loooooooo this is what the cat writes when she pounces on my laptop while I try to write.

A lot of lag time waiting on engineers, dealing with the health department, paperwork, driving up and down the road. I think we are all done with the peripheral stuff for the move out to the property where we are building the house. Barb has started writing a new book and is practicing card counting for when the new casino opens here in town and I am looking at a couple of commodity trades and getting up to speed on the bad old days of option trading of equities - there is a lot more regulation than there used to be. You know you can make money when the stock market corrects - right ? 

There isn't a day that doesn't go by without some scandal or other signal that we're not in Kansas anymore, it is time for us to take the offensive and exert some control over what happens in our lives. Everyone has different levels of tolerance, we  have reached the end of ours. Barb had her personal checking account hacked and the bank caught it so she didn't lose anything but she has to leave the account open because social security takes 2 months to re-direct her retirement payments to a new account. For 2 months it will be a race to the bank to see who gets those 2 checks, the hackers or Barb. I guess we can pay the bank to hold those deposits but that isn't right. I keep meaning to write a piece on why the Federal Reserve has to keep the taper of quantitative easing, maybe next time.

Keeping Up to Date.

A Gentle Nudge in the Right Direction

Since I have warned you folks of what I think will be the results of 5 years of a very inept government administration, I feel I should keep you up to speed on the bread and butter issues as we approach the unknown. I would really like to tell you why the Fed has to taper their quantitative easing but I will have to defer that conversation to a later date because of new information about your retirement accounts.

We all know what has happened in Greece, they have leveraged retirement accounts with the EU for bailout funds, that’s old news. They need another bailout, no surprise there. Here’s the deal, they don’t have any collateral, so the EU (European Union) has hatched a new plan to take the public road system and public buildings as collateral against the new loan. So now not only will the Greeks only get pennies on the dollar of their retirement accounts but their roadways and buildings will be sold to the highest bidder when they default once again – anyone looking to buy a country at a liquidation sale ? On another front Ecuador has delivered 466 thousand ounces of gold to Goldman Sachs as collateral for a 3 year lease deal to pay its bonds to the Chinese for the money they borrowed from them. I think the total Ecuadorian indebtedness to the Chinese is around 11 billion dollars so a quick 20 million won’t keep them off the hook for long. Lastly the ECB (European Central Bank) has for the first time in history lowered interest rates to negative, a very dangerous precedence and something our own Fed has hinted at recently. Let’s see what the implications are for the US.

The president is at the G7 today and he warned the UK to stay in the EU. This administration has no idea what to do in the US and he is giving advice to the UK, that can only mean one thing, he is planning to take your retirement accounts in the same way the EU does it in Europe. It will be to protect you from consumer fraud, he will take your IRAs, 401Ks and Annuity Accounts and give you government bonds – low yield government bonds and tie them to the economy. Remember he set up MYRA bonds at the beginning of the year, that’s where your retirement account will go and you lose all control of your own money.  Well why not he got away with government controlled health care – a 10% tax on every person that pays taxes – doesn't it follow that he would take your retirement and promise future payments while spending your money giving freebies to the illegal aliens and the undeserving.

Regulations.

It seems everything has some kind of regulation to restrict it's use.

Reminds me of the old Five Man Electrical Band song "Signs". In order to do what you want with what you own you have to comply with the laws and the regulations as the result of the laws. The land we are building on is unrestricted and there is no zoning but to build a house we have to involve the county building department and the statewide building code is enforced. We could pitch a tent and live there, it would be legal from the building departments standpoint but the health department would have a problem with waste disposal. You need water so we could collect water from run off or get it from a stream both which are illegal according to the EPA at which point the health department becomes involved because the purity of the illegal water is now in question. By building a tiny house on a utility trailer we are outside of the purview of the building department, the septic system is in and the well will be drilled in a few weeks so we have eliminated the EPA and the health department but we do fall squarely into DOT regulations and there is no getting around that. 

The simplest thing I can think of is a kids lemonade stand but that has to be FDA approved and a vendors permit paid which brings in the local health department. Even the simplest of things are restricted by back door regulations. Pay checks are almost non existent, no one pays with cash, no federal agencies issue checks - direct deposit - which gives some one access to your bank account. Are we formulating a conspiracy theory here ? All I am saying is think about it. Little pieces one at a time is how a puzzle is put together, how much of the puzzle has to be put together for you figure out the end result.

Don't you wish things were different

Look at Detroit to see how things will be in your neighborhood.

We have put it off for as long as we can and even though we can still afford our lifestyle we won’t be able to for the next 6 years. It’s going to get worse before it gets better. Our grocery bill keeps going up along with utilities, insurance, taxes, gas and even the one thing we have paper on, our house in Missouri where the mortgage payments increased by $360 this year because of insurance and property tax increases. We started a new business last year that will lose money for the next two and a half years, other than that we are pretty much on fixed income.

We have known our economic woes were coming since 2007 and even tried moving out of the county to lessen the impact on our diminishing ability to produce revenue because of old age. We have been hoping the government would do the right thing and lower the tax rate, promote oil and gas exploration, rebuild infrastructure, cut back on spending, get immigration under control, promote small business, anything to move us in the right direction. Now it’s too late. Watch the stock market for a correction, pay attention to what is happening with foreign governments especially in Asia and the EU, when one fails there will be a domino effect that will trigger the deflationary trend the Federal Reserve is so worried about. It could happen today or any day between now and 15 months from now. I can’t see how it can be avoided, I could be wrong but we have decided to consolidate now and hope we can be done before things start getting really messed up.

We moved into a cash position several years ago, hedged our bet with land and 2 small entrepreneurial enterprises which left us renting a place to live for the last 4 years. The only thing left is to shed the rent by moving to the property where we are currently building a house but the house won’t be ready for at least 18 more months. I’ve got 2 months to build something legal and ready to live in - stay tuned to see how that turns out.

Build a House on a Trailer ???

I don't have to go outside to know what the weather is like. I can look out the window, look at a calendar to see what season it is, look up a forecast, I could even ask someone who has been outside. Using that same type analysis anyone can tell what the economy is doing, look at the stock ticker, read the numbers on unemployment, look at the data on GDP, see what kind of deficit we are running, check out all the new taxes that have been passed ( there is a real good one coming next month ). So could you tell me why, with all the information at our finger tips, can no one see the bad economic times that are right on our door step. During the cold war everyone built bomb shelters, building codes take into consideration weather and seismic forecast, lots of folks go into debt to take advantage of a good sale and the most popular thing to do in this guaranteed bleak economic forecast is to buy guns and ammunition. I am all for protecting what is mine but from whom ? If you think from the government your an idiot, they have been taking your stuff for years and you haven't done diddly. You don't stand a snowballs chance in a sauna, put your money into prepaid funeral expenses. Now burglaries and personal protection - that's a whole nother story and you better be talking to whatever law enforcement is in your area about what you can or can't do.

I've read and heard so many stories about this wild west mentality that I can't help but think that most of this gun mania comes from folks who have watched too many movies and have no clue about the real world. Kind of like being presented all the facts about impending gloom in the economy and buying guns to ward off the lifestyle change that is sure to happen. Didn't the price of work boots double in the 70's, the sales were to kids who had no intention of working, they thought they looked cool. I think the gun mania is the same kind of deal which presents a really big problem all by itself. So now when a law enforcement issue arises on any level the issue isn't talked or argued about it is met by lethal force. We cause our own problems.

Point of No Return

Probability Theory

I mentioned in passing on an audio file that I could tell you the day that what everyone is expecting in the economy would happen will happen and I can. Like everything else there is a point in time when things change but no one notices. After a while you realize that was the thing that changed everything. When Clinton was president he passed the Affordable Housing Act, that was the day things changed in residential real estate, allowing people who couldn’t afford a house to buy one anyway. It was popular but unsustainable, no one did anything about it until it crashed the system ( by the way they are pushing this same agenda again ). Well being able to tell you when the system will crash again is one of those type deals. It’s just a matter of time and manipulation as to when the system collapses after the event that changes everything happens. You’ve said you what to know so here it is - the day that this administration signs on to an agreement with the IMF and their 188 member nations to replace the dollar with the SDR as the reserve currency of the world. This happened at the G20 in April 2009 when our president endorsed the global plan and a democratically controlled congress went along with it. There has been a lot of manipulation since then and if you folks would pay attention once in a while you would see how this plays out. It’s not some grand conspiracy they have been flying by the seat of their pants for the last 5 years but it is starting to come together.

Washington D.C. is a direct reflection of the nation, No one knows what to do so they flock behind a popular ideology. They don’t know how to implement so they use the shotgun approach and when something sticks they go with it. If they had any idea of where they were trying to go they could have achieved their objective 4 years ago. This is the story of politics, the blind leading the blind, self interest above all else. The end results are that we give up more freedom, pay more taxes and allow the government more power to control every aspect of our lives. Call it what you want, all I know is that I don’t subscribe to the ideology that is being rammed down our throats and I object to paying more taxes to pay for it.

Now we have reached a point where we are being forced to do the wrong thing to affect change but that is a subject for another conversation.

New Poll.

It seems that a new poll has been published about how people view themselves and the results are pretty telling about our society. 96% of the people polled view themselves as average to above average intellectually. These are the same folks that don't know who the Vice President of the United States is, they think Obamacare is free, the Federal Reserve is a public institution and don't know the IMF from BRB or some other useless acronym. I know that this self inflated opinion depends on your point of reference but if you believe you are at least as smart as everyone else it shuts down the desire to learn and that my friends is exactly why the population in this country is so stupid. Totally dependent on other people to tell you what to think and easily manipulated by a good lie.

This is nothing new but it does point to a much greater self deception than in the past. Unfortunately this almost unanimously thought concept of intellect has never been more prominent than in the very people we elect to represent us in the Federal Government. We believed the lies and now we suffer the consequences but somehow it is not their fault - are you kidding me ? I am not so sure the population has the ability of independent thought or are we so intent on fitting in that we have lost the instinct for self preservation ? Maybe the new self preservation is gaming the system, 35% of the population has some type of government assistance. This doesn't include Social Security or Medicare - we paid into to those - this is welfare, food stamps, Medicaid, subsidized health care, subsidized housing loans ..... etc. Who in the heck do you think pays for this stuff ?

Don't for a minute think that I am subscribing to the idea that we have been duped by some slick talking politicians or that there is some grand plan to socialize our country. The truth is that we are stupid and it is far easier to be stupid and blend in than to do the research and fight back. It is far easier to forget the skin we have in the game .......wait, maybe the 96% of the people polled don't have skin in the game. What ever the excuse the facts are the facts. Politicians are stupid, they don't think past whatever stupid idea they have and never consider the consequences. At this point in our history they are taking advantage of a dumbed down populace never thinking about consequences but taking all the power and money they can get away with. It isn't some grand plan it is simply taking advantage of the situation.