Tag: finance

Getting Started: Bullion (Stored Locally)

Getting Started: Bullion (Stored Locally)

I’m always surprised by how few people understand the options for buying precious metals. Even the very affluent.

I recently returned from a conference full of highly-qualified investors who “get” the economic risks we discuss here at PeakProsperity.com. And on multiple occasions, I was asked if I could demystify the purchasing process for folks who wanted to build a position in gold and silver.

It seems the precious metals industry does a bad job of educating the curious buyer, probably because each player has a bias towards their particular slice of the solution set.

I find myself guilty of assuming that everyone is as familiar as I with the full spectrum of gold-silver purchase options available. So to correct that, I’ve taken the time this week to detail those options out for the novice buyer.

So, if you’ve been thinking about converting some of your paper fiat money into precious metals but are unsure how to start, wonder no more.

Below is a primer of the main options available to you, and in which situations each makes sense to consider.

But before continuing further, let me make a few things absolutely clear. This is NOT personal financial advice. This material is for educational purposes only, and as an aid for you to discuss these options more intelligently with your professional financial adviser(s) before taking any action. 

Suffice it to say, everything discussed in this report should be reviewed with your financial adviser before taking any action. Am I being excessively repetitive here in order to drive this point home? Good…

The primary reason for buying precious metals is Armageddon insurance; to own a form of money that will still have purchasing power should our paper-based currency suddenly become valueless.

Don’t think that’s a risk in modern society? Just talk to someone in Venezuela or Argentina today. They’d gladly trade you millions of bolivars or tens of thousands of pesos for a single gold coin.

Which is why many believe it wise to have a stash (or “stack” in PM-parlance) of gold and silver, in physical form, that you can quickly get hold of in your hot little hands should a currency crisis arise.

Physical gold and silver is referred to as “bullion”. It’s most common form factors are coins and bars.

When buying gold bullion for your emergency stack, most experts recommend restricting your purchases to 1-ounce sovereign coins. These are coins currently minted each year by select governments around the world; most notably the Eagle (U.S.), Buffalo (U.S.), Maple Leaf (Canada), Krugerrand (So. Africa), Philharmonic (Austria), Panda (China), Kangaroo (Australia), and Sovereign (U.K.).

Why stick to the sovereign coins?

First off, they have a low premium to the “spot” price of gold. So you’re buying your gold at a good value versus most other options.

Wait. What’s the spot price? And how does that differ from the price I pay at the store?

The futures market sets the price of an ounce of gold (called the “spot” price) at any given minute of the trading day. Because it takes cost and effort to convert a lump of gold into a specific shape and then ship it to a dealer, the mints tack on an extra fee when they sell their products to precious metals dealers. Those dealers in turn add their own mark-up. The total price above the spot value that you pay at the store is referred to as the “premium”. 

OK, got it. So my goal is to try to buy my gold for the lowest premium per ounce?

Yes, in general. And that’s why experts recommend sticking to the 1oz sovereign coins. If you purchase gold in increments smaller than 1oz, the premium per unit of gold increases sharply the smaller you get in size. And if you buy numismatic coins, the collectible value often results in large premiums over spot price.

You lost me again. What are “numismatic” coins?

Numismatic coins are coins that have collectible value. Generally, they are no longer minted today and exist in a secondary market where they’re traded between collectors. Those building their emergency gold stack should steer clear of numismatics — in a crisis, coins are likely going to be valued primarily for their gold content. Any collectible value could be easily discounted or disregarded altogether. Also, unless you have years of experience trading them, it’s easy to lose money or get plain ripped off buying numismatics.

OK, stick with the sovereign coins. Any other reasons why?

Coin dealers — the folks you’re going to sell your gold back to someday — are by far the most familiar with these coins over all other forms. They can spot fakes more easily. So, if you’re buying from a reputable dealer, you can have confidence you’re getting a pure product. And, when the time comes to sell your gold, if you’re holding it as sovereign coins, a dealer will be most likely to accept them.

What about silver?

Government mints also make sovereign silver coins. Those are fine to buy. 

There are private mints that also make coins, which are referred to as “rounds”. These tend to have a lower premium to spot that the sovereign silver coins. But you need to be careful here. If you buy rounds, make sure to buy a brand that your local dealer recognizes and agrees to accept. Otherwise, when it comes time to sell, you might find he’s only willing to buy them from you at a discount to spot (or perhaps, not at all).

By far the cheapest way to buy silver is by purchasing bags of pre-1964 US coins (quarters, dimes, etc), aka “junk silver”. Prior to 1964, these coins were comprised of 90% silver. Today, dealers sell pre-weighed bags of these coins at very small premia over spot. Bags of junk silver also give you the option value that, should a crisis ever force us back to transacting in silver, you’ve now got small-increment coins with which to buy low-cost everyday items (bread, milk, etc).

But as every silver investor learns quickly, silver is heavy! And beyond a certain amount, it becomes challenging to store and transport stacks of coins/rounds.

Which is why those looking to own hundreds or more ounces of silver typically purchase silver bars. As with rounds, there are many mints that issue bars, but there are two brands that have been around for a very long time that dealers prefer to deal with: Johnson Matthey and Engelhard

All right, so where can I buy gold & silver bullion?

You can purchase sovereign gold coins from your local coin dealer or from an online dealer.

In both cases, deal with a firm that has been in business for years — ideally a decade or more — and has a well-respected brand. These firms have a reputation to protect and thus will be less likely to gouge you, sell you inferior product, or do anything shady/illegal. If possible, choose a firm recommended by a longtime gold buyer who’s opinion you respect.

There should be no product quality difference whether you buy sovereign coins from a local or an online store. But there is an important advantage to buying from a local dealer: the relationship.

It’s highly valuable to have a local dealer who knows who you are, values your patronage, and knows that he sold you good product. In a time of panic, bullion supply can quickly dry up — as it did in supreme fashion in 1980, when coin shops had lines around the block of people desperate to exchange their dollars for gold. In that kind of limited inventory environment, being on a dealer’s “preferred customer” list  — getting first access to restricted supply if you want to buy more, or receiving discrete VIP treatment should you want to sell — will be a tremendous advantage.

And a local dealer can be a font of useful intelligence and advice. Good dealers have their finger on the pulse of the PM market: are people net buyers or sellers? Are inventories tightening/expanding? Are premiums rising/falling?

Also, they can advise you on your purchases. For example, if you buy less than $1,000 worth of bullion in certain states, the transaction is subject to sales tax. Similarly, transactions over $10,000 are required to collect personal information from you to protect against money-laundering. An informed dealer can guide you to a purchase amount where you avoid both.

A quick Google or Yelp search should be able to identify the nearby coin dealers in your local area. But as mentioned earlier, if possible, it’s better to select one based on a recommendation from an experienced bullion buyer who’s opinion you respect.

If instead you prefer to purchase online, there are many good merchants out there. As a data point, the PeakProsperity.com audience has reported good experiences with GoldSilver.com and with APMEX

How much gold and silver should I buy for my Emergency stack?

This is one of those uniquely personal decisions that a general article like this can’t give you a specific dollar amount for.

The right answer is: Consult with your professional financial advisor to determine the amount that best suits your risk tolerance and goals.

But time and experience has proven that an effective rule of thumb is: Whatever amount lets you sleep well at night.

Buy enough that you no longer worry about having no Plan B should a currency crisis suddenly hit. But don’t buy so much that you’ll worry about getting robbed, or that you’ll panic every time the gold price drops in the market (which will be often, as gold is very volatile.)

For most people, this will be a few $thousand worth, or a low 5-figure $amount. Remember that 99.9% of US households own less than 1oz of gold (if any). If we suddenly reverted to using gold and silver as currency again, with only a few ounces of gold and a little more of silver, you’re going to have WAY more than most other people.

So, once I’ve bought my Emergency stack, where do I keep it?

The first rule of owning bullion is to convince the world you don’t own any. DON’T TELL ANYONE ABOUT IT! 

Greed and crisis do weird things to people. Don’t make yourself a target unnecessarily by revealing your holdings or where you’ve stashed them.

Except perhaps to your spouse, or key family members you trust. You don’t want the gold disappearing forever should you suddenly kick the bucket (from natural causes?….)

The point of having an emergency stack is to be able to get your hands on it quickly should you need to. Some people put it in a home safe, some in a bank safety deposit box, some hide it in the walls or bury it outside. There are pros and cons to each. You’ll need to decide for yourself which is the best option for your unique situation.

The main risks to holding precious metals on your own property are personal safety and loss. If you decide to keep bullion in your home, in a safe or elsewhere, the smart thing to do is to TELL NO ONE. The fewer people who suspect you have any gold, the lower your risk of robbery. As for loss, many insurance companies will not cover more than a small sum if your bullion is lost due to theft or disaster. Be sure you’ve reviewed your homeowners policy to know what your limit is.

Holding your metal in a bank reduces the theft/loss risks, but introduces others. For example, your access is more limited as it depends on the bank being open (it might not be during a financial crisis).

In the end, you’ll need to decide for yourself which option (or combination) best fits your personal risk tolerance level.

As mentioned, most households’ Emergency stash will range between a few $thousand to a low 5-figure $sum.

Among those households, a number will want to own more precious metals beyond the Emergency stash — for increased protection against monetary devaluation/economic crisis/asset price bubbles. But they don’t want exposure to the increased risks involved with storing greater amounts of bullion.

For investors like this, who are likely the majority of those reading this article, bullion storage companies can be an excellent solution.

In this space, PeakProsperity.com has, for years, endorsed solutions like the Hard Assets Alliance, which is representative of the benefits these storage companies can offer.

The Hard Assets Alliance (HAA) is commercial-grade platform that allows you to purchase gold and silver at very competitive prices, and then have that metal stored in your name in a high-security vault of your choice.

The HAA offers such good pricing because it uses Gold Bullion International‘s industrial-grade platform (the same used by major financial institutions like Merrill Lynch) which ensures that a minimum of 4 dealers are competing to fulfill your order. 

In terms of storage options, the HAA holds any precious metals you buy in your name. This is “allocated” storage — no one else has claim to that same bullion. This differs from “unallocated” solutions where buyers have a fractional claim on a pool of bullion. When using a storage company, definitely choose allocated solutions over unallocated.

The HAA gives  you the choice of storing your bullion in any of six ultra-secure non-bank vaults around the world, which are audited several times each year. These vaults are owned and operated by world-renown security companies (Brinks, Loomis, Malca Amit) and are in US (New York), US (Salt Lake City), Switzerland, Australia, Singapore and the UK. So you can diversify your country risk, should you wish to.

And should an act-of-god impact the vault, the contents are insured at full replacement value in bullion — meaning if anything were to happen to your bullion, you’d get back the same amount of metal, as opposed to compensation in cash. 

They also offer a “worry-free” automated purchasing program that lets you create a set-it-and-forget it plan for accumulating bullion over time. This lets you tap the power of dollar-cost-averaging without having to actively manage the process.

And should you decide at any point you want your vaulted bullion sent to you, the HAA will ship it upon demand.

For most investors, a reputable industrial-grade vaulting service offering these benefits is an excellent solution for expanding your gold and silver holdings beyond your initial Emergency stash.

For those looking to go beyond a defensive position in bullion, there a number of options for risk-seeking investors to speculate on the price of gold and silver. (NOTE: this is heading into riskier territory vs owning physical bullion.)

Those who wish to bet on the price of precious metals rising or falling can trade within the growing number of ETFs and ETNs tied to the price of gold and silver.

ETFs/ETNs  are securities that trade on the financial markets much like a stock does. They are essentially funds that have exposure to the price of the precious metals, either by owning bullion or futures contracts.

It’s very important to understand that most ETFs/ETNs are not fully-backed by bullion. They are exposed to counter-party risk, which is why they are often referred to as “paper gold” or “paper silver”. Don’t think of owning them as the same thing as owning an equivalent $amount of bullion.

The main reason to own an ETF/ETN is as a bet on where the price of the underlying metal is headed. If your time horizon for the bet is short, ETFs/ETNs can be the better choice: they’re extremely liquid and they don’t have the premiums and storage/shipping fees that come with buying physical bullion.

The most heavily traded ETFs/ETNs are GLD and SLV, which are heavily stacked with futures contracts. For folks looking for funds fully-backed by bullion, Sprott offers PHYS (gold), PSLV (silver), and CEF (both); and VanEck Merk Gold Trust offers OUNZ, which has the additional option of converting your stake to physical bullion which it will ship to you upon demand.

There are also an array of leveraged precious metals ETFs/ETNs for those really looking to take big risks on the price direction. Unless you are an experienced PM trader with discretionary capital to lose, stay away from these.

Where do gold and silver come from? Mining companies dig them out of the ground.

When the price of the precious metals rises, so do the prices of the companies that mine them. But the mining shares generally rise/drop much more than the price of the underlying metal.

Why is that?

Because the miner is still sitting on ore in the ground. As the price of, say, gold goes up, not only is the gold the miner is selling today more valuable, but all of the ounces it will dig up in the future just became more valuable, too. So in this way, shares of stock in gold mining companies is said to be a leveraged play on the price of gold itself.

Investors who think that gold is undervalued right now and positioned for a sharp bounce can buy shares of gold mining companies and expect to ride a much bigger wave higher if their prediction indeed comes true.

But there’s no guarantee of that. Mining shares introduce company risk (and many of them are run quite poorly). It’s absolutely critical to understand that mining companies are EXTREMELY risky. And over the past decade, precious metal mining shares have been once of the worst-performing sectors of the market. They have been absolute widow-makers.

Experts strongly advise that those investing in this space diversify, and do so by owning general indexes of mining companies (GDX is an example for the major mining companies, GDXJ offers an index of junior miners = even more risk!), or by following the guidance of analysts who follow the space closely and do their best to identify the more promising/solvent companies from the riff-raff (Gold Newsletter and Gold Stock Analyst are two respected newsletters tracking these companies).

While shares of individual precious metals mining companies can offer truly staggering returns in a gold bull market (e.g., in excess of 1,000%+), don’t put any capital at risk in this space that you can’t afford to lose. These are wildly risky.

As you look at the spectrum of options for owning gold & silver covered by this primer, how do you decide how much (if any) of your capital to allocate to each level?

The answer lies in clearly understanding your current financial situation, your future goals and needs and your risk tolerance. This is why we’re so adamant in encouraging investors to make the decision in partnership with their professional financial adviser (hopefully, one that doesn’t sneer at the mere thought of owning a little gold!).

Those having difficulty finding one can schedule a free consultation with the financial advisor endorsed by PeakProsperity.com. They have years of experience working with investors to answer the question: What percent of my portfolio does it make sense to hold in precious metals?

So, why issue this primer now?

As mentioned, I was at a conference recently where precious metals were a key topic. At that conference was Peter Schiff, who underscored the trap the Fed finds itself in. While nearly quintupling the money supply, through QE1, 2 and 3, the Fed promised us it would ‘normalize’ by selling off all of the assets it hoovered up from the market. But its recent capitulation has unveiled the lie — the Fed can neither raise interest rates nor reduce its balance sheet without killing the economy. There will be no ‘normalization’.

From here on out, it’s going to be ever more easy credit and ever more stimulus until the economy collapses under the weight of Too Much Debt. On that journey, the purchasing power of the US dollar is going to be destroyed.

The best hope for the average investor is to own tangible assets that can’t be inflated away. Gold & silver are the easiest for the average investor to access.

To get a sense of what’s in store for precious metal prices under these conditions, watch this analysis from Mike Maloney:

But to benefit from the purchasing power protection of precious metals, you have to be positioned in them in advance of the coming fiat currency devaluation.

If you’re not well-positioned already, make it a near-term priority to become so.

Looking for a financial adviser who sees the world through a similar lens as we do? Free consultation available.

Prosper! is a “how to” guide for living well no matter what the future brings.

 

I’d mention that if you hold > $10,000 in aggregate in foreign accounts, then you have to file FBAR paperwork. So, buying bullion through HAA in Switzerland may seem like a good idea, but then you then fall under FBAR if you own more than $10,000 in aggregate in any overseas accounts. From my understanding, you can get away from FBAR reporting if you are the only person with access to the items in the account (like a safe deposit box). However, that is just one interpretation I’ve seen and of course isn’t legal advice. 

Of note, the Feds won’t let you slide easily if you don’t report. You absolutely must know what you are doing if you’re holding assets in foreign accounts.

United States persons are required to file an FBAR if:

United States person includes U.S. citizens; U.S. residents; entities, including but not limited to, corporations, partnerships, or limited liability companies, created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.

Note regarding civil penalty assessment prior to August 1, 2016: For those violations occurring on or before November 2, 2015, the IRS may assess a civil penalty not to exceed $10,000 per violation for non-willful violations that are not due to reasonable cause. For willful violations, the penalty may be the greater of $100,000 or 50 percent of the balance in the account at the time of the violation, for each violation. (https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar) 

FBAR/FINCEN does not apply to HAA accounts:

the Hard Assets Alliance differs from other OGSPs in that you don’t have to file an FBAR. That’s because your account is managed by a U.S.-based company. The only paperwork you have to contend with is reporting the sale on your Form 1040 Schedule B if you sell… and Hard Assets Alliance will send you a 1099 form in the mail to help you with that.

But your general point is a good one to make folks aware of: most other storage solutions outside of the US will require the holder to file FBAR/FINCEN reports.

Buying and holding gold for the long term is arguably sensible for the reasons mentioned but why would anyone buy a coin which is valued 10% or more above the spot price.  Buying one or maybe half a dozen is a novelty but who in their right mind is going to buy $10,000 in gold coins physically worth $5000 to $9000.   At the end of the day the coin market is just another retail business taking retail profits from vulnerable savers.  It is also more prone to forgery than certified bullion (because it’s simply easier and cheaper to forge 1toz of gold than it is a 1kg bar – though forgeries in the latter category are known).

The bigger the bullion the less you get treated like someone buying jewelry and the closer you get to the spot price – by at least 2% because the bullion banks have to make a profit after all.  Buy from bullion banks who test their gold and can demonstrate its integrity on the spot – ie. sellers who keep a working XRF and ultrasound scanner on the premises and can weigh your purchase on laboratory scales with 10mg precision.  Or get them to do an accurate density test to verify it’s not just tungsten.

Don’t forget, when you sell back your gold that the banks will want another 2% or 3% of the spot price.  If you can buy and store gold at its spot price its probably too good to be true.  In other words expect a minimum 5% loss on your original purchase, assuming the market value is flat.  No wonder the bullion banks market themselves so aggressively – who gets a guaranteed 5% anywhere these days?

As for silver the same rules apply but silver is an industrial metal, subject to corrosion and is even easier to forge.  It’s cheap and nasty for a reason. 

 

….but silver is an industrial metal

…is also an industrial metal, as well as a precious metal … and that’s a strength, not a weakness.

subject to corrosion surface tarnishing in some conditions

Fixed. Note that silver can last indefinitely under the sea. Here are some coins that lay for 300 years under the sea:

and is even easier to forge.  It’s cheap and nasty for a reason.

While silver can be filled with lead, gold can be filled with tungsten. There is much, much more incentive to make fake gold than fake silver. Your only real protection with either metal is to make sure the company you are dealing with is an authorized dealer of a recognized governmental mint.

Also worth noting : Silver is mostly mined as a byproduct of base metal mining. It is used up in making solar panels and other processes, and some goes into jewellery, investment coins etc. In times of economic collapse, base metal mining will also collapse, and silver will become unobtainium, unlike gold, all of which is still available above ground. We have much, much more gold in our hands than silver.

What about BullionVault? Depending on quantity they have lower commissions than even GoldMoney! And 24/7 buying and selling on tight spreads, with instant settlement.

great article…have to disagree about where you place the ETFs on the risk spectrum however.

the Gold etfs are leverage over 300 to 1 in terms of physical gold to paper contracts sold….meaning there are over 300 claims on each 1 ounce of gold.  don’t expect to get any return on that investment at all…that is a house of cards ready to tumble.

 

 

Foreign Financial Account. A foreign financial account is a financial account located outside of the United States. For example, an account maintained with a branch of a United States bank that is physically located outside of the United States is a foreign financial account. An account maintained with a branch of a foreign bank that is physically located in the United States is not a foreign financial account. FinCen Form 114

My uninformed interpretation of that second sentence is that even if your bank is a US bank, if the account is maintained (what does that word mean in this context?) outside of the US, then it’s considered a foreign account. So, the question I have is would the account be maintained onshore here in the US (i.e. HAA is US company), or does maintain mean where the physical assets are held. The second sentence seems to indicate it’s where the assets are held, i.e. Switzerland, Singapore, etc. as even if you have a US Bank, but your account is overseas, then it’s subject to FBAR. 

Have the HAA lawyers issued an opinion on whether or not HAA accounts must be reported on FBAR? If so, can you share a link to their legal opinion on the matter? I pulled that quote straight from the FINCEN instruction form. I would like to believe that it’s not required to be reported, but it’s not worth the risk, IMO.  

P.S. I invest money into metalstream and was holding gold/silver in Singapore (not > $10,000 worth at any one time) but I have now changed that to be held in Utah. As a side note, I used to live in UT and they treat gold/silver on par with the US dollar in that you can pay your state taxes in gold/silver if you would be so foolish to do so.  

 

 

I liked a remark that, I believe Catherine Austin Fitts made: You should always have enough in your personal possession to bribe the border guard.

Great article Adam! I like that you clarified the different options so well, and steered people away from numismatics.

One clarification about delivery by HAA: they ship only to your address of record. You can change that of course, but you can’t just have them ship to an arbitrary location.

In response to pgp’s comment about bullion: while I agree that you’re getting a better price, it has its drawbacks. You generally can’t carry it around with you, sew it into your clothes, hide it in small places, or bribe the border guard with it. You probably won’t be using it for small transactions such as buying food or ammo if the price of gold jumps to $10,000 an oz (but who knows, maybe a loaf of bread will cost $1000). I.e. It’s not as fungible as coins, IMHO.

 

I have always wondered if I can purchase an $11,000 tractor with a bag of junk silver and pay sales tax on the face value of the silver. 

https://www.garynorth.com/public/18383.cfm

https://www.fff.org/2013/12/09/the-u-s-vs-robert-kahre-a-horrific-miscarriage-of-justice/

The Ninth Circus Court didn’t like the idea so much.

We have draft ‘orses, and all other 19th century farming wisdom and tools. Diesel as well as the diesel burners are available till… Diesel may be in short supply so I recommend ‘orses and a good miller, a tanner would be busy as well.

godspeed,

I will sell you a 274 international with side dresser and cultivating equipment for 11k in junk silver…….don’t worry about the taxes.

Two concerns that have stopped some people from buying  PMs are the possibility of gov’t confiscation (as was done in 1933) and/or new “windfall” taxes on your gains if the value skyrockets. Both of these worries can be neutralized by keeping your gold in a Roth account held by HAA in Zurich. This is especially viable if you are near retirement age. But your limit is $6500.00 per year, so buy while the price is on the low end.

Assuming that you already have strong positions in food, fresh water supply, tools, medications, precious metals, etc. any thoughts on stockpiling ammunition?  After the Sandy Hook shooting ammunition disappeared from store shelves almost immediately, presumably that could happen again.  I live in an area with a strong gun culture (rural Michigan), so perhaps I have answered my own question.  I am totally surounded by heavily armed people so I may not need much for defense, the area is probibly already saturated with ammunition, so perhaps little trade value.  Perhaps “how much do you need to sleep well at night” is the metric.

John G

Best “storage” option is for the owner to have physical possession of his gold. It should be kept in a hidden safe, in a hole in the ground, or hidden somewhere.that only YOU know the location. This may sound “primitve” to those of you who think you are above actually physcially putting your hands on your assets and taking personal responsibility for them. If so, gold IMO is not for you.

When you are talking about gold, you are talking about a safe, a loaded shotgun in the closet, and a big dog. Thats a certain level of personal security that I think people understood 80-90-100 years ago that many people today just cant wrap their heads around. “You mean I actually have to guard my own asset??” Its like “you mean I actually have to grown my own potatoes?”.

ecb: You make a good point on taxes/confiscation.

Been playing the PM game for decades and many years ago long ago accepted that nothing will be safe when things start to unwind worldwide. Look at what happened in ’31 or ’08. All laws were subject to the “emergency”. One’s PM cannot be visible or international. It must be local and deniable.

It’s gotta be underground or “outside the system”. This is problematic if you like silver in addition to gold (which I do) and have large holding (ditto). But it’s doable, and the only way to be safe.

This one is easy IMO: Reloading is pretty easy, inexpensive, and all you need to store is primers and powder. Just use airtight containers and keep backup with one’s PM.

I forgot to mention: this is an excellent primer. I would add a few things (apologize if they were here but I missed them):

If anyone has any other tips please add to the thread.

I am a farmer and don’t take American Express, however will provide sustenance for junk.

Buying PM with cash <$10k from a local dealer is private and can be done over years.

I’m honestly not very worried about confiscation. By US law the government can confiscate anything it wants in an emergency and if an emergency of massive magnitude happens they would start with bank accounts and move up the chain to savings/retirement accounts, safe deposit boxes etc. Physical gold not held in a safe deposit box is really hard to confiscate even if you know who owns it because you have to give a visit to each owner, then locate the owner’s stash and to top it off the average person owns very little gold.

Regardless, buying from a local dealer is not a lot safer than buying online. Most local gold dealers I’ve visited have cameras and they save the footage for a lengthy period of time (one told me indefinitely). Many even take a photo of your ID, especially if you sell. Some parking lots have cameras too and there may be license plate readers along the way. Your cell phone metadata can also show all places you’ve visited and how long you stayed there. However, if the government becomes truly desperate it can find gold holders who haven’t made any online purchases by simply obtaining people’s internet viewing habits from e.g. google. Basically you’ll be caught if you’ve googled/read a lot of articles about gold or discussed gold online.

Now, I don’t think it’ll get to it, because by the time they would come after your physical gold not held in a safety deposit box the government is likely too dysfunctional to obtain purchasing records from online gold dealers let alone trying to figure out all the people who likely own gold through physical dealership visits.

 Your cell phone metadata can also show all places you’ve visited … you’ll be caught if you’ve googled/read a lot of articles …

In today’s world we’re subject to all sorts of monitoring that we don’t even know about. We can do things to reduce it but it’s wise to assume that nothing is as private as you would wish.

Learn about ways to protect your privacy and start doing the things you can. Maybe leave your phone at home sometimes?

I wouldn’t be surprised if the unrelenting pressure of publicity on climate ( change) breakdown, such as the book: ” The Unhabitable Earth ,” soon seeps into the gold price.

For a different disaster, story see on Amazon, Kate Brown’s ” Manual of Survival “, about the Chernobyl and  nuclear testing fallout cover up.

I seem to be partial to a good disaster.

Thanks for the feedback (both public and private) on this primer, everyone. Glad to see it being so well-received.

I’ve had several folks say this was ‘just the resource they were looking for’ to share with close friends & family who are novices when it comes to bullion, helping them understand how to navigate the purchasing process.

I’ve even had a few bullion dealers ask if they can share it with new customers. That’s been a pleasant surprise to hear!

Sp if you have anyone in your life you know is trying to make sense of how to begin accumulating precious metals, feel free to send this to them.

cheers,
A

Many fear a full-blown currency crisis when gold/oil reserves would define national security. Confiscating private bank accounts make no sense here as the goverment can print worthless dollars at will (and does).

But the US will likley become interested in PM horders (and PM leaving our shores). Unlike the 1933 gold confiscation we are no longer a net exporter with hard money pouring into our treasury. Today, as a net importer, gold is exiting and USD inflating. The US may seriously need hard assets to back the USD in the future.

This may seem off-topic to this primer, but it’s not. Why? Because PM is a liability (as defined by Kiyosaki). That is, it is expensive to buy/sell/hold, and generates zero income. The reason many pay this expense is currency insurance. So how one buys, stores, and sells it should be congruent with times of instability.

BTW, other tip: 12. Ttrack off-grid PM holdings in Quicken using GLD/SLV ETFs, and buy/sell to keep one’s % ownership constant…which forces one to buy low & sell high like dollar-cost-averaging (plus stay practiced at staying liquid). One can make good money over the years doing this while still holding the same % NW of PM.

I just got off the phone with Hard Asset Alliance.  I asked them whether I would receive specific information on the name/location of the vault in which my metals would be stored, and whether I would have a personal account number with them.  My concern is having any layers or bureacracy between myself and the vault.  I was told that the account is actually with HAA, and they open an account with the vault.  If HAA becomes unreacheable (in a crisis perhaps), I would need to contact Gold Bullion International, the parent company, to retrieve my gold from the vault.  So what makes this better than owning a gold-backed ETF such as PHYS, BAR, SGOL, AAAU, etc?

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Getting Started: Bullion (Stored Locally)

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B.S. From The BLS

B.S. From The BLS

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We’ve enjoyed years of “recovery” since the Great Financial Crisis by literally papering over our problems with newly-printed money, instead of addressing their root causes.

But we’ve now arrived at the awkward part of the story; when all of our prior mistakes finally catch up with us, and the plot heads in a much darker direction.

Despite more than a decade of an “all-hands-on-deck” propping up of the financial markets, all the central bankers have to show for it is the widest wealth gap in history coupled with stagnant wages.

That, and a skyrocketing cost of living.

Depending on which OECD country you live in, you can take your ‘official’ inflation measure and multiply it by either a 2x or a 3x to get the true rate.

For example, in the US we’ve been told that inflation is running at just under 2% for years. In reality, it’s been trucking along at closer to 4% to 6% (for rural and urban dwellers, respectively).

To summarize the situation simply: the central banks have been printing up new money and then handing most of it to the wealthy (via QE, which boosts the prices of the assets the rich own). Then they put on a good show of “worrying about inflation being too low” when the government issues its laughably doctored numbers.

Anybody living in the real world (especially those trying to live on a fixed income) already knows that their actual inflation is much higher than 2%.  Ditto for anybody that has bought a car, is paying for college tuition, depends on prescription medication, or has recently been to a hospital.

Here are two examples of how ridiculous the situation is now:

Average New-Car Prices Up More Than 4 Percent Year-Over-Year for January 2019 on Tesla, Full-Size Trucks

Feb 1, 2019

IRVINE, Calif., Feb. 1, 2019 /PRNewswire/ — The analysts at Kelley Blue Book today reported the estimated average transaction price for a light vehicle in the United States was $37,149 in January 2019. New-vehicle prices increased $1,481 (up 4.2 percent) from January 2018.

(Source)

4.2% yr/yr is a pretty hefty increase. But it’s right in line with annual increases stretching back over the past decade:

(Source)

From 2007 to 2017 that’s a +20.4% increase in new car prices.  Combining the data from the above article and chart, between 2007 and January 2019 new vehicles experienced a whopping +29% increase in their average selling price.

As a real-world shopper, that’s how much more cash you have to spend to buy a car today vs a decade ago. 

However, according to the BLS, new car prices have only increased by 6.6% over the same time frame(!).  In fact, in the BLS’ eyes, prices today are exactly the same as they were 5 years ago (2013 vs 2018):

(Source)

To compare apples-to-apples: the BLS says that new cars are the exact same price, with zero inflation, between 2013 and mid-2018. Yet the real-world data says that new cars went up by +17% in price.

So which is it?  Is it a 0% increase or a +17% increase?

Well, the answer lies in all of the mumbo-jumbo ‘adjustments’ that the BLS uses, such as hedonics, in attempt to convince us that our pockets are not being picked in broad daylight. (For a refresher in the many tricks used by the BLS, watch Chapter 18 of the Crash Course: Fuzzy Numbers)

The BLS has a lot of fancy explanations for their “math’, but the simple fact remains that a new car will cost you +17% more real cash dollars than it did 5 years ago.

The government says $0 extra. The dealership says +$3,000 more. The former is a fake number. The $3,000 coming out of your wallet is a real number.

I could go through example after example of where the BLS undercounts inflation.  They do it with health care especially wildly, telling us that health care is increasing by ~3%-4% per year when everyone’s health insurance premiums are rising by 15% to 25% per year (or more!).

Beyond the direct financial harm that results as Social Security recipients get very low or even 0% Cost-Of-Living-Adjustments (COLA) — which are based on the BLS’ reported inflation numbers — there’s an even more subtle and corrosive effect that results from being lied to by those in authority.

With each fib, the populace loses more and more trust. And at some tipping point – bang! – they’re suddenly protesting the streets wearing yellow vests.  It may take a while, but eventually folks catch on to the idea that “fairness” and “justice” are merely fantasies of the middle class. 

Both the rich and the poor already know better. But once the middle-class loses its faith in the dream, then it becomes a lot harder to convince them that another massive tax break for corporations is really in their best interest.

As increasing concern spreads across the social landscape, for reasons well beyond the financial fibs outlined above, it’s becoming increasingly difficult to follow the competing narratives in play. 

For example: the economy is either doing great, or it’s busy imploding.  Technology promises an amazing future, or it’s ruining our minds.  The world is awash with cheap fossil fuels, or peak oil is in play and our standard of living is at risk.  Either man-made global warming is an imminent existential threat, or there’s nothing to worry about.

Making sense of all these — and many other — competing narratives is a full-time job. Almost nobody’s got the time for that.

Lurking beneath every one of these dueling plot lines is this nasty, inescapable realization: Our entire way of life is unsustainable.

It’s simply not possible to extract exponentially more raw materials year over year, forever.  We all know that. It’s not a difficult concept to grasp.

But the entirety of our political system, the mainstream media, and our economy are all predicated on the opposite being true, that endless exponential growth lies ahead.

Like all delusions, this false belief will have a terminal encounter with the limits of reality at some point.

There will come a time when attempts at further growth are counterproductive and cause more harm than benefit.  In fact, we’ve already entered that period.

We know that growth is killing the planet. Yet each day we are bombarded with messages imploring us all to invest in and hope for more growth.

Those who have been paying attention know, quantitatively as well as morally, that more growth is not the answer. Yet it’s the only path forward offered by those in power.

Stuck between an impossible idea and the strident repetition of its opposite, the populace grows ever more anxious.  We can all see and feel that the end of the growth narrative is near — yet not even the barest glimmer of that inevitability is debated in the news or in any halls of power.

(At least not publicly.  Who knows what they’re saying to each other privately? Perhaps something very different, as evidenced by the rise in doomsday prep by the super-rich).

As the social anxiety grows over facing a dimming future, our feckless Western press exploits that emotional tension to sell more consumer products and push political agendas, committing sins of commission and omission in the process. Outright lies are published. Key issues are left entirely out of the conversation (just look at the dearth of coverage on Europe’s Yellow Vest protests). And alternative information sources are denounced as peddlers of ‘fake news’ or Russian agents.

Often it seems as if what’s truly important is intentionally avoided, while that which is absolutely unimportant is minutely examined with excruciating repetition.

As I recently chronicled, the very bottom of the terrestrial and oceanic food pyramids are being knocked out. This is an existential threat to our species, but it’s hardly addressed in the mainstream media. It should front page news in a sustained and complete call for action. But it never is.

This terrifying information should be commanding a large share of our attention. But it takes a very distant back seat to utterly meaningless political and social trivia that comes and goes like waves of petit mal epileptic seizures upon the national body.

Huge signals of collapse that everybody needs to know about are breaking out with greater frequency and ever-larger and more worrying amplitude. It’s only a matter of time before something truly systemic snaps and we’re all forced to contend with terrible ramifications, ones entirely of our own making.

Maybe it will be a nightmare collapse of key ecosystems within the planet’s web of life. After all, we’re carelessly and swiftly disrupting the interconnected relationships that species took hundreds of millions of years to develop.

Or maybe it will be a political flashpoint resulting in war. A conflict resulting in even a temporary blockade of the free flow of global trade so critical for keeping all of our just-in-time production and distribution systems running smoothly could cause store shelves to go empty in just a matter of days.

More likely in the near term, we’ll see an economic/financial meltdown. The third credit bubble of the new century is breaking down just like its predecessors did. Except this one is the and largest and most universal in history.

A recession lies dead ahead. An even though recessions are an inevitable part of the economic cycle, and it’s been uncharacteristically long since the last one, we’ve been operating as if the current “recovery” will last forever. We’re woefully unprepared for what’s coming.

And this next recession promises to be a doozy. The world is fraught with political and social tensions that were absent in 2008. And it’s saddled with many $trillions more debt than existed back then. 

But worst of all?  The public has lost faith in our institutions and political bodies after having been so obviously, comprehensively and repeatedly lied to over the years.

It’s kind of hard to ask people to embrace shared sacrifice during tough times after the political and financial elites greedily lined their own pockets at the expense of everyone else during the good days.

In Part 2: You vs The Recession we scour the multiplying data exposing just how advanced the global recessional already is, how we expect its impact will manifest in the financial markets, and what steps you can take now to dramatically improve your odds of making it through the coming crisis.

The central banking cartel, despite its increasingly desperate attempts, has not and cannot tame the business cycle. Our major concern is that this current credit cycle will burst far more viciously than the prior two — and those were painful enough.  Because its effects are likely to be so damaging, we can’t overemphasize the need to prepare prudently now.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access).

Looking for a financial adviser who sees the world through a similar lens as we do? Free consultation available.

Prosper! is a “how to” guide for living well no matter what the future brings.

 

As I recently chronicled, the very bottom of the terrestrial and oceanic food pyramids are being knocked out. This is an existential threat to our species, but it’s hardly addressed in the mainstream media. It should front page news in a sustained and complete call for action.”

—————————————————————————————————————————————–

Everyone needs to watch this Special Report from Skynews and pass it on. This is how we are slowy killing our oceans and future generations will have to deal with this, if the oceans don’t die first. Besides plastics, we are dumping toxic chemicals and radioactive waste into our oceans courtesy of Fukushima.

 

 

More than eight million tonnes of plastic is thrown away each year and washed out to sea. It takes centuries to break down. It’s eaten by marine creatures. And it’s in our food chain. Your seafood supper may have a synthetic garnish. Scientists just don’t know what effects it has on our health.”

Great article. The most useful things I’ve found on the internet over the past year are the crash course, and shadowstats.com. When I introduce someone to the crash course, the first video i show them isn’t the first video (sorry Chris), it’s Fuzzy Numbers. It connects on a visceral, immediate level with everyday experience. If they want more data, I show them shadowstats. Light bulbs generally result.

Everyone plans. Every plan is based on assumptions. Most people’s plans are pretty good, it’s the underlying assumptions that will get you in trouble. Instead of arguing with people on why they need to change their plans, I try to change their assumptions.

 

 

For some reason, I forgot to check my favorite pre-recession indicator after the January Nonfarm Payrolls number was reported last Friday: “Working part time/economic reasons.”

See the chart below.  its a “quarterly” chart, so the moves stand out a bit more, but Q1 is not looking very good at all right now.  At the moment, it totally agrees with the “impending recession” prediction, and/or that we’re already in one.

This one is really pretty reliable over the years – as a slightly predictive and/or coincident indicator.

If I had been paying attention, I could have posted this last Friday!!

Can’t say I’ve been looking forward to the end of life as I know it.

Rodster, I can’t bring myself to watch the video you linked. 

My wife and I are certified rescue divers, with logged dives in the Caribbean totaling more than two weeks under water.  We saw the plastic problem, up close and personal, 15 years ago, off the coast of Belize.  Where we were, you couldn’t walk on beach sand.  It was completely covered with plastic.

Many people would agree that the Federal Reserve is making a mess of things. I often come across the notion that this is by design for nefarious purposes. I disagree! To me, the simple explanation is that they really are captive to muddled and wrongheaded thinking. Econometrics is what is taught in all of the major universities and the people at the Fed are steeped in it and genuinely believe in the mathematical equations and the models that incorporate them. And they really think that their equations and modeling allow them to apprehend economic dynamics in a way that gives them a window of understanding not available to the uninitiated. This view also infuses them with the confidence that they have the ability to centrally control the economy through enlightened manipulations; pushing, nudging, touching the gas pedal or the brakes, determining interest rates, buying or selling bonds, etc.

To one who subscribes to the Austrian economic understanding, the problem is that the people at the Fed lack even a basic understanding of economic fundamentals. Even worse, some of their tenets are the opposite of reality. One of the most misguided underpinnings directing their actions is the belief that spending drives economic growth and prosperity, and savings hinder it. The exact opposite is true.

These guys don’t even understand what money is.There is a thing called “Say’s Law” which is fundamental to economic understanding, and a critical failing in modern economic policy is the denial of Say’s Law. Keynes and the neo-Keynesians pooh-pooh it because it gets in the way or their theories and inclinations. So they phrase it as “production creates its own demand”. This can be ridiculed because it sounds like a claim that there will be demand for whatever anyone wants to produce in whatever amount. What Say’s Law actually says is that commodities trade against commodities. So if you imagine a barter economy, a farmer who grows corn now has the means to purchase a pair of shoes by using his corn in trade and the shoemaker derives his purchasing power for the corn from the shoes he makes.

But this is clumsy with inherent problems. A pair of shoes is worth more than a bushel of corn but you can’t cut the shoes in half to equal the amount of corn wanted. That’s where money comes in. Real money that exists in limited amount takes on a value relative to the various commodities in an economy. As the commodities increase relative to a fixed money supply the purchasing power of each unit of the money increases and it decreases if total commodities decrease. The value of a unit of money also changes up or down against individual products as well according to supply. So purchasing power derives from commodities and a person’s production of a product creates that person’s purchasing power either directly via barter or indirectly by first exchanging the product for money. Thus production does create demand.

In this process you get honest price signals as money is received in exchange for commodities that can then be use to purchase other commodities. So honest money represents something real. A real commodity was produced and exchanged for the money. Money is just a medium of exchange and represents something real that has been produced. Honest money means honest price signals and results in rational organic growth in an economy.

When a Central Bank prints money nothing has been produced. It is fake. But participants in the economy can’t distinguish between this money and honest money. This creates a false impression of demand and the robustness of the overall economy. It gives false price signals, temporary profits where there shouldn’t be any, excited “animal spirits”; a bubble has been engendered.

The longer this goes on with ever increasing money printing, the more distorted the economy becomes with mal- investments everywhere and multiplying fragilities that can potentially lead to a cascading unraveling. Also, when the money is injected into the system via debt mechanisms, the huge accumulated debt monster itself becomes the greatest danger.

This same focus on inducing spending prompts another mistake by the central banks and their economists. Ideally, interest rates should be allowed to find their own natural level and not arbitrarily and artificially determined, but rates below the natural level are actually more destructive over time than rates a couple of points above. Interest rates are a hurdle business projects have to overcome to be successful. Rates that are too low allow otherwise marginal or non-profitable projects to be undertaken. The result is overuse and misuse of resources, and misdirected energy and capital. Conversely, if rates were somewhat above the natural rate only the most productive enterprises could be successful and resources would be used very efficiently. On the one hand you end-up with a sluggish and wasteful zombie economy and on the other a vibrant efficient one. Of course with the present monstrous debt situation created by the central banks, even a move to natural interest rates would now blow the whole thing up.

The Federal Reserve fancies itself a savior that rescues the capitalist economy from itself by stopping a downward spiral into depression. In reality the extreme highs and lows are always caused by the central banks and or governments. Without the antics of the bankers the natural undulations in a market economy would be very gentle as honest price signals within an honest money regime would allow for self- correction of minor distortions in almost real- time. Any bubbles would happen only in isolated corners of the overall economy and be self-limiting and quickly corrected.

In reference to the inflation rate, I think it would be much higher but for a mechanism not fully understood that comes into play. As a certain commentator likes to say, ” the money has remained in the canyons of wall street”.

A major mechanism for goosing consumer spending has been via cheap money that induces borrowing. That mechanism is not functioning well as in aggregate consumers are carrying all the debt they can.

What I am referring to however is the drag on consumer spending that results from this heinous level of debt. So not only are consumers having difficulty taking on more debt, but the existing debt is exacting debt service requirements, even with the artificially low interest rates, that is emaciating consumer spending capacity. The outlandish spending in the past was spending borrowed from the future and the future is now here with the added cumulative interest burden.

This presently represents a huge drag on spending and hence has prevented inflation in the consumer price index from being even more. I doubt the central bankers considered this in their calculations.

This hasn’t stopped inflation in stock and bond prices.

Another extremely deleterious effect of all the money printing is the massive waste in resources that it encourages. In an honest money regime resources would be used much more prudently.

The shale oil boom in the US is a good example. It has been financed with ultra-cheap bank loans and stock issuences based on cheap money being available. Even so, it is a mirage as with the rapid decline rates in the wells the sunk capital costs will never be fully recovered. The up-front cash-flow from newly drilled wells is putting the wool over people’s eyes. Ultimately there will be large losses. This would not have been possible with honest money and honest interest rates.

Without the abundant freshly created money, as scarcity in resources develops, prices would rise accordingly and work their way into products, thereby discouraging flippant spending and wasteful use of resources. They would be utilized much more prudently and alternatives sought-out.

I think you may have used the wrong approach, Chris:

Another extremely deleterious effect of all the money printing is the massive waste in resources that it encourages. In an honest money regime resources would be used much more prudently.

The shale oil boom in the US is a good example. It has been financed with ultra-cheap bank loans and stock issuences based on cheap money being available. Even so, it is a mirage as with the rapid decline rates in the wells the sunk capital costs will never be fully recovered. The up-front cash-flow from newly drilled wells is putting the wool over people’s eyes. Ultimately there will be large losses. This would not have been possible with honest money and honest interest rates.

Without the abundant freshly created money, as scarcity in resources develops, prices would rise accordingly and work their way into products, thereby discouraging flippant spending and wasteful use of resources. They would be utilized much more prudently and alternatives sought-out.

The problem with ending money printing so as to discourage flippant spending and wasteful use of resources is that unemployment would rise to 70% because most jobs these days are in the service sector (to sell stuff to people to consume via cheap debt), in construction of new homes, in construction of the new infrastructure to support the homes, and in the financial services sector administering all this easy money from thin air. Furthermore, technological automation would remain after the easy money regime ends so the manual labour jobs that have been displaced over the last 50 years would not return. 

70% unemployment would result in riots. The elites know this and they know that without this easy money driving everything we’d be there. It scares them. The only way to avoid this would be to completely overhaul the taxation and wealth system and give the wealth back to the middle class, so that they don’t have to work 8-5 M-F to pay their mortgage. The eiltes are not going to do this, for two reasons: 1) they aren’t smart enough to understand how to do this (possibly, but unlikely), or 2) they know that the way to do this would be to dramatically lower taxes to the middle class and increase taxes to the elites via a wealth tax to claw back the trillions they have stolen from the middle classs over the previous few decades and could never be repatriated via some clumsy income tax. The elites will not voluntarily do this since their whole focus over the last 100 years has been to get us where we are now, a world of debt serfs.

Therefore, when the monetary system shifts over and easy money ends, expect 70%+ unemployment and riots.

Mark,

I think you are right. The central planners have manipulated themselves into the proverbial “between a rock and a hard place”. The problem is that if they keep doing as they have been, the underlying rot in the economy will metastasize until something breaks and  triggers an unraveling. An alternative scenario is that there is an ongoing deterioration in economic vitality and the continual erosion of the greater standard of living, slowly grinding the majority into poverty. I think the first scenario is more likely.

The BLS can be a frustration, but car pricing is not a good example of poor tracking of reported inflation. It clearly doesn’t show a 4.3% inflation rate as the post implies. If you’re going to attack someone else’s statistics, it helps to start with some solid examples, which I do believe are out there. 

The example of a car going from $28.8K to $37.149 over 12 years! is very much in line with the reported US CPI. Or use an inflation calculator from one of the other central banks, and you’ll find the increase would be below the reported rate of inflation in the UK for example. Car pricing does not make the case for following shadowstats.

Then there is hedonic adjustment. I greatly dislike the lack of transparency around this. In general there is some merit to the idea that you’re getting more for your money. Even a garden variety auto these days would come with features such as automatic windows and doorlocks, air bag, more sophisticated electronics, that would have been considered luxury or add-ons at an earlier time. And yet, for this thinking to work, for this customer, you’d need to still make a stripped down model of the auto available, which would track the original vehicle, and therefore the flat cost. The purchaser would have the choice of crank windows – lower cost, or add-ons – higher cost. It doesn’t work that way. 

Nor do you get the option of buying a lower cost computer with a 500 MB hard drive, and it wouldn’t run today’s software even if you did. But it is indeed true that the price of hard drives has declined hugely, along with other components. Tell that to the teenager going off to school with a laptop and an iphone. 

It is indeed a complicated issue.

 

The BLS can be a frustration, but car pricing is not a good example of poor tracking of reported inflation. It clearly doesn’t show a 4.3% inflation rate as the post implies. If you’re going to attack someone else’s statistics, it helps to start with some solid examples, which I do believe are out there. 

The example of a car going from $28.8K to $37.149 over 12 years! is very much in line with the reported US CPI. 

You are missing how the CPI is constructed and used.

It is made up of subcomponents, of which vehicles is one.

What I show above is that while the CPI new vehicle subcomponent sported a 0% increase between 2013 and 2018 the real world experience of people was that new vehicles went up 17% in price.

That’s not “in line with the CPI” that is a part of the CPI.  One that showed a 0% increase thereby dragging or holding down the reported CPI.  

Meanwhile, what sorts fo valuable new hedonic adjustments can we point to over that 5 year period that were “worth” slightly more than $3,000 per vehicle?

Airbags?  Nope.  Those were both government required and standard the entire time.

Automatic windows?  Nope, standard as well.

Seat belts?  Sound systems?  Nope, and nope.

Better engines?  Wipers?  Windows?  I’m stumped.

It must have been something subjective like “a smoother ride” or a “more pleasing color palette” or something, because the features on my 2011 vehicle are the same ones listed on its exact same 2019 model but for a lot more money.  I’d call that inflation, wouldn’t you?

Fortunately, using hedonics, the BLS tells us we can all just walk into a store and walk out again with a TV for free, or better!

[Just kidding.  Nothing can fall in price by more than 100%.  The above chart is from the WSJ and it shows the relative change of components to the overall change in CPI.  Everything below the 0% mark has subtracted from CPI, those above have added since the baseline year.  From memory I think that was 2005, but I could be wrong.]

or you can dig into the statistics. You clearly state vehicle costs have been increasing at a rate of 4.2%.

4.2% yr/yr is a pretty hefty increase. But it’s right in line with annual increases stretching back over the past decade:

But we both know that a $28,800 car in 2007 would cost $47,185 in 2019 if that were true. So I think you’ve made a mistake there, or engaged in a bit of hyperbole. According to your own numbers, new vehicles have been increasing at a rate of 2% over this extended time period.

So on to the kvetching about what goes into the hedonics on autos. Is it the ride or the color palette, you ask? Why speculate? The BLS publishes the exact composition of the new vehicle adjustments each and every year. I don’t agree with them, and I don’t agree with the whole regime, so I don’t have a dog in this hunt. But it is not a mystery. 

I drive a Honda CRV with air bags and automatic windows. The newer version has all that and a lot more, including in dash display, back up camera, and on and on with a long list of stuff I don’t want. Like Siri. I couldn’t care less. I really don’t even care if I have automatic windows. A few of the adjustments are a stretch and more in line with your suspicions. One example: to put down the back seat in my CRV, I have to go to both back seats, take off the headrests, fold the seat forward, fold down the back. Both sides It is time consuming – a minute or two! In the new CRV you just pull a lever at the tailgate and the whole thing just happens. It’s brilliant. But what would I pay for the new system, if anything? And worse still, I don’t have the choice whether I want some of these features. They become part of the base model, are therefore included in the BLS pricing model, and you get a corresponding adjustment.

I suspect that most people are like me – what does it take to buy a car? Period. Don’t adjust anything! But if I want to be honest about what is picking my pocket it’s insurance, property tax, and education, not cars.

 

I think this article accurately mirrors the mindset of people on this site. I am posting it as a description and not as a criticism. When Paul Ehrlich’s book came out in the late 60’s I was taken by it and wrote a college paper based on it. I have since reshaped my thinking.

by Pierre Desrochers and Joanna Szurmak

[Note: The following text is adapted from the authors’ recently published book Population Bombed! Exploding the Link Between Overpopulation and Climate Change in which the validity of the belief in the inherent unsustainability of economic growth is challenged more thoroughly.]

Numerous population control advocates have linked anthropogenic climate change to population growth, or tried to revive interest in invoking anthropogenic climate change as the key negative outcome of continued economic growth linked to, foremost among causes, an increasing population. One pioneer of establishing and cultivating population growth – anthropogenic climate change linkage was the “Population Bomber” himself, Paul Ehrlich, who during a conference in 1968 identified anthropogenic carbon dioxide emissions as a “serious limiting factor” to economic growth.[1] By the 1970s, Ehrlich, his wife Anne and his collaborator John Holdren raised fears that carbon dioxide “produced by combustion of fossil fuels in quantities too large to contain” may “already be influencing climate” and, as such, constituted one of the “gravest threats to human well-being. . . [i.e.] the loss of natural services now provided by biogeochemical processes.”

What motivated the Ehrlichs and Holdren to worry about a looming disaster threatening humanity just twenty years after the end of the Second World War (1939-1945)? After all, the war had brought with it wholesale destruction of infrastructure and loss of life throughout the world on a previously unparalleled scale. Was it the tension of the Cold War? Was it a specific epidemic or a natural event? We argue that no specific trigger events were necessary to spark the anxieties of these activists as they already espoused a neo-Malthusian eco-catastrophist mindset that is part of a wider pessimist perspective.

Among others, the ecological economics theorist John S. Dryzek recognized at least two distinctive perspectives on the understanding of the nature, role, and future of humanity – the pessimist, and the Promethean or optimist – each possessing a distinct set of assumptions, narratives, values and ultimate goals.[2] The pessimists, like the Ehrlichs and Holdren, apply a limit-driven narrative to define the place and goals of humanity on earth. According to the pessimist view, the earth’s resources are severely limited while the balance between planetary health and disrepair is exceedingly tenuous. The pessimists model people as bacteria that, in their Malthusian exponential growth, tend to quickly outstrip the resources of their “test-tube earth,” swiftly destroying both themselves and their environment. Only – perhaps – the timely intervention of top-down expert planning may avert this preordained debacle. The optimists see resources as limited primarily by human ingenuity and ability to utilize them, and humanity itself as a gathering of creative individuals, each capable of being much more than a mouth to feed. Optimist individuals may be driven by seemingly local needs, such as the replacement of a scarce resource or the improvement of the efficiency of a process, but the outcomes of their individual efforts benefit others in a spontaneous diffusion process.

Thus, the Ehrlichs’ and Holdren’s preoccupation with human population numbers and their impact on global development or resource use did not need a specific cause or trigger. Population and resource use anxiety were part of their pessimist perspective that had them always on the lookout for humanity’s confrontation with the inflexible natural limits of the finite earth. The late 1960s and early 1970s belonged to an era when other pessimist scientists like the climatologist Stephen Schneider, a Stanford colleague of Ehrlich, were theorizing about impending glaciation caused by anthropogenic atmospheric pollution reflecting sunlight. The Ehrlichs – who, truth be told, were also worried about every possible (and always negative) impact of increasing human population numbers, including, for a time, the effects of population growth on global cooling – were casting about for a development-related scourge of humanity that would be, perhaps, less easy to redress with fundamentally optimist fixes than global cooling was thanks to technologies such as smokestack scrubbers. For this reason, anthropogenic carbon dioxide emissions were the ideal villain – or, pun intended, windmill to tilt at – as their neutralization does require a fundamental reworking and re-thinking of humanity’s key stable technologies – including its electrical power grid – on a scale that, thanks to the quickly mounting “scientific consensus” and political pressure, poses a significant challenge to human innovation.

While admitting he was not a climate specialist – thus just as “qualified” as Ehrlich, a biologist specializing in entomology, to theorize about climate – the economist Julian Simon suspected over two decades ago that global warming was a dubious pessimist scare mostly rooted in older neo-Malthusian concerns about population growth. He observed then that the “latest environmental justification for slowing or halting population growth is supposed global warming.” Simon cited a World Bank paper on the new “global negative externality” represented by greenhouse gas emissions, which he summarized as follows: “[The] old rationales for World Bank population control programs – economic growth, resource conservation, and the like – having been discredited, a new ‘rationale’ has been developed on the basis of speculative assumptions about global warming’s economic effects derived from controversial climatological science.”

Simon then summarized the position of most environmentalists as follows: “But isn’t obvious. . . that additional people and additional economic growth will cause us to use more energy and hence emit more greenhouse gases? Therefore, even if we can’t be sure of the greenhouse effect, wouldn’t it be prudent to cut back on growth?” The economist Jacqueline Kasun similarly believed at the time that “by the 1990s the doomsayers had shifted their attack” as they could no longer invoke resource depletion as the key growth-limiting issue. As she wrote, “the alarmists didn’t miss a step. The problem, they now said, was that people were using too much energy and were causing Global Warming.”[3] Both Kasun and Simon thus identified pessimist limits-based thinking as the chief impetus behind the elevation of anthropogenic CO2-caused climate change to the status of a global catastrophe.

Closer in time to us, retired Canadian academic Michael Hart has commented that “for alarmists, climate mitigation policy is as much a means of achieving their larger goals as it is a matter of addressing a possibly serious issue.”[4] As another retired Canadian academic, historical climatologist Tim Ball, has long argued, the climate change policy agenda is based on certain assumptions ultimately related to a fear of reaching another terrestrial set of limits through overpopulation. Indeed, Dr. Ball goes so far as to argue that while global warming is a “contrived problem,” most of those “who know it is contrived still believe overpopulation is a problem.” It is indeed remarkably easy to find influential climate bureaucrats and scientists who will either admit this much or else acknowledge their neo-Malthusian pessimist stance rooted in enforcing limits to human (population) growth.

Maurice Strong (1929–2015), who was described by business journalist Peter Foster as “[m]ore than any other individual. . . responsible for promoting the [UN] climate agenda,” is the most obvious case in point. Strong first achieved some degree of notoriety in Canada as young deputy minister – a high-ranking civil servant – when he ended up on the record by stating that “with a growing global population, we will have to recognise that having children is not just a personal issue but a societal issue and at a certain point we may be faced with a need to have a permit to have a child.” He also referred to the need for “national population policies” in his opening speech at the 1972 Stockholm Conference. Strong reportedly stated the following Malthusian prediction at the 1992 Earth Summit: “Either we reduce the world’s population voluntarily or nature will do this for us, but brutally.”

Having started with the idea of limits to population growth, Strong eventually connected it to the limits of economic growth problem as defined by climate change. At the 2009 Copenhagen Summit, Strong declared: “The climate change issue and the economic issue come from the same roots. And that is the gross inequity and the inadequacy of our economic model. We now know that we have to change that model. We cannot do all of this in one stroke. But we have to design a process that would produce agreement at a much more radical level.” In one of his last extended interviews, Strong said that “growth in the world population has increased the pressures on the Earth’s resources and life-support systems.” He added that “China’s one-child policy is not a perfect policy by any means, but, on the other hand, how do you control growth in your population?” Strong viewed widespread aspirations for a better life as problematic, for if everyone “enjoyed the same patterns of consumption that we in the West do, then we would have an unsustainable situation, and we’re actually on the way to that now. We are in a situation that is unsustainable.” Thus, for Strong, the issue of population growth was clearly part of the pessimist narrative and a clear an issue of limits to growth.

The first chairman of the IPCC (1988-1997), Bert Bolin, was not only an early convert to the alleged catastrophic impact of CO2 emissions,[5] but also a pessimist on population and resources issues, as evidenced in his stance on the controversy surrounding the 2001 publication of The Skeptical Environmentalist by the Danish political scientist Bjorn Lomborg. Bolin later wrote he “largely share[d] the gist of the . . . analyses” of Lomborg’s critics John Holdren and John Bongaarts.[6] Bongaarts, a demographer long associated with the Population Council and a former chair of the Panel on Population Projections of the National Academy of Sciences, had then opined: “Population is not the main cause of the world’s social, economic and environmental problems, but it contributes substantially to many of them. If population had grown less rapidly in the past, we would be better off now. And if future growth can be slowed, future generations will be better off.”[7] For his part, John Holdren contradicted many of his earlier warnings of imminent resource depletion by arguing that while the word was not “running out of energy,” it was “running out of environment,” by which he meant “running out of the capacity of air, water, soil and biota to absorb, without intolerable consequences for human well-being, the effects of energy extraction, transport, transformation and use.”[8]

The second chairman of the IPCC (1997–2002), Robert Watson, would later go on the record with the following line of reasoning: “The more people we have on the Earth and the richer they are, the more they can demand resources. There’s more demand for food, more demand for water, more demand for energy. . . So, there’s no question the threats on the Earth today are far more than, say, 50 years ago and in 50 years’ time, there will even be more threats.”

The third chairman of the IPCC (2002-2015), Rajendra K. Pachauri, was even more explicit when he stated in 2007 that humanity has “been so drunk with this desire to produce and consume more and more whatever the cost to the environment that we’re on a totally unsustainable path.” He was “not going to rest easy until [he has] articulated in every possible forum the need to bring about major structural changes in economic growth and development. That’s the real issue. Climate change is just a part of it” (our italics). When asked why Indians shouldn’t aspire to the same standard of living as westerners, Pachauri answered: “Gandhi was asked if he wanted India to reach the same level of prosperity as the United Kingdom. He replied: “It took Britain half the resources of the planet to reach its level of prosperity. How many planets would India require?” In his IPCC resignation letter (apparently no longer available on the IPCC website) Pachauri admitted that, for him, “the protection of Planet Earth, the survival of all species and sustainability of our ecosystems is more than a mission. It is my religion and my dharma.”

In Pachauri’s statements, and in others we have quoted so far, there is ample evidence of a passionate commitment towards the protection of the planet,but there is no sign of recognition that humanity can do, and has done, more than simply consume resources. At no point do neo-Malthusians like Pachauri admit the possibility that technological innovations and human creativity have a place among the things that deserve a place on Earth. What pessimist activists desire is a consensus on the classification of humanity as out of control and inherently driven by destructive greed, thus in need of top-down regulation by the few remaining clear-thinking and benign autocrats – that is, functionaries – of the global government.

Another important figure in the anthropogenic climate change institutional apparatus is former American senator Timothy E. Wirth, one of the main organizers of the 1988 James Hansen hearing on climate change, and from 1998 to 2013 president of the (hardcore Malthusian) Ted Turner-funded United Nations Foundation. While no longer in the news or on the frontlines of the US government, Wirth is still actively promoting a population control agenda. He is on the record as stating in 1993: “We’ve got to ride this global warming issue. Even if the theory of global warming is wrong, we will be doing the right thing in terms of economic and environmental policy.”[9]

Needless to say, many other influential politicians and bureaucrats share a similar outlook. In 1998 Christine Stewart, then Canadian Minister of the Environment, when speaking before editors and reporters of the Calgary Herald said: “No matter if the science is all phony, there are collateral environmental benefits… Climate change [provides] the greatest chance to bring about justice and equality in the world.”[10] More recently, Connie Hedegaard, European Commissioner for Climate Action (2010–2014), argued that the European Union policy on climate change was right even if the science was not. As she put it:

Say that 30 years from now, science came back and said, “wow, we were mistaken then; now we have some new information so we think it is something else”. In a world with nine billion people, even 10 billion at the middle of this century, where literally billions of global citizens will still have to get out of poverty and enter the consuming middle classes, don’t you think that anyway it makes a lot of sense to get more energy and resource efficient… Let’s say that science, some decades from now, said “we were wrong, it was not about climate,” would it not in any case have been good to do many of things you have to do in order to combat climate change? I believe that in a world with still more people, wanting still more growth for good reasons, the demand for energy, raw materials and resources will increase and so, over time, will the prices… I think we have to realise that in the world of the 21st century for us to have the cheapest possible energy is not the answer.

Executive Secretary of the United Nations Framework Convention on Climate Change, Christiana Figueres, said “We should make every effort to change the numbers… obviously less [sic] people would exert less pressure on the natural resources,” and humanity is “already exceeding the planet’s planetary carrying capacity, today.” She also added that population control was not enough and that fundamental changes need to be made to our current economic system. Figueres, like Strong, Wirth, Bongaarts, Stewart and Hedegaard, was speaking from the depths of the neo-Malthusian pessimist limit-based perspective.

Professor Hans Joachim Schellnhuber, the director of the Potsdam Institute for Climate Impact Research and an adviser to the encyclical Laudato Si, has long been on the record as estimating the carrying capacity of the planet at “below 1 billion people.” More recently, researchers associated with the Population Reference Bureau and the Worldwatch Institute stated: “Human population influences and is influenced by climate change and deserves consideration in climate compatible development strategies. Achieving universal access to family planning throughout the world would result in fewer unintended pregnancies, improve the health and well-being of women and their families, and slow population growth – all benefits to climate compatible development.”

Since leaving his academic appointment, prominent Canadian climate scientist Andrew Weaver has become the leader of the British Columbia Green Party. As could be expected from a pessimist activist, Weaver is on the record as stating: “Technology itself will not solve global warming. Individual behavior and consumption patterns will need to change as well. For too long we have lived by the axiom that growth is great. We strive for economic growth year after year. We drive it by increasing population. But infinite growth cannot occur in a finite system. Collapse is inevitable.”[11]

The late climatologist Stephen Schneider was a leading advocate for major reductions of greenhouse gas emissions. Schneider was sometimes derided by his critics for having switched, almost overnight, from being a major proponent of global cooling, as we mentioned earlier, to becoming one of the most prominent supporters of global warming. Less well known about him, however, is the fact that he never changed his Ehrlich-inspired belief in the existence of a “wide consensus that exponential growth, for both economies and human populations, cannot continue indefinitely,” and that “population growth must ultimately be controlled.”

Thus, Schneider was a classic neo-Malthusian pessimist thinker. As he wrote in a 1977 popular book mainly devoted to describing the perils of global cooling, the “obvious point about population growth [that] must be stated and restated” is that “population increases will only dilute the effectiveness” of achieving “rapid improvements in per capita living standards for the present 4 billion people on earth.”[12] Twenty years later, having become a major proponent of global warming, he still believed that “control of population growth has the potential to make a major contribution to raising living standards and to easing environmental problems like greenhouse warming.” Not surprisingly, he urged the United States government to “resume full participation in international programs to slow population growth” and to “contribute its share to their financial and other support.”[13]

Whether its goal was curbing anthropogenic global cooling or global warming, the pessimist narrative’s endgame was always to institute top-down expert controls over population and centrally limit the human impetus to grow, create and aspire to change. In effect, the pessimist goal was to combat and control the optimist narrative through fear and discrediting its foundational impulses.

Thanks, Old guy for the tumescent narrative on the Ehrlich-ian predicament facing this world. I’m curious to what end all this meanderous documentary is to my day to day existenence. Unfortunately, each one of us is limited to one’s ability to influence the actions of others on the betterment of society and the world in general. So, it seems that the only hope we have to direct the actions of ourselves for betterment. This concept is woven throughout the PP doctrine with its emphasis on resilence. IMHO, our focus must be more local. What are you willing to sacrifice for the greater good? What has that got to do with your relationship with others

 

I think this article accurately mirrors the mindset of people on this site. I am posting it as a description and not as a criticism.

SNIP

 Whether its goal was curbing anthropogenic global cooling or global warming, the pessimist narrative’s endgame was always to institute top-down expert controls over population and centrally limit the human impetus to grow, create and aspire to change. In effect, the pessimist goal was to combat and control the optimist narrative through fear and discrediting its foundational impulses.

First,  I have to disagree that cut and pasting this long winded article on the inherent “neo-Malthusian pessimist limit-based perspective” of foes of exponential growth and their misguided and interventionist history and ‘observationaly stating it : “accurately mirrors the mindset of people on this site” is “not a critique” is disingenuous at best.  It’s clearly a criticism which is fine, you’re free to criticize, assuming you can defend your position. 

I suspect your broad brush aspersion more accurately reflects an unfamiliarity with the site and it’s denizens.  It is true that  If there is one unifying precept that there is general agreement on here, it is that  unlimited growth in a finite world is not only impossible it is a bad idea.

 If believing that precept makes me (us) a “neo-malthusian pessimist with a limit based perspective, that I will gladly own that label.  Hell, I would wear it on a t-shirt.

 Beyond that there are a whole range of viewpoints and socio /political persuasions represented here from the from diehard statists who think that voting for this or that establishment politician  within the current system can effect change, to a full range  of ideological beliefs from libertarian  to socialism and points in between. 

However I suspect there is a larger constituency of open minded  individuals capable of thinking outside the bounds of linear ideologies, aware of the holistic predicaments inherent in Industrialized  civilizational model predicated on continuous growth and who don’t think there are any top down solutions, but remain interested in personalized and localized strategies and in the potential for bottom up mitigation to the consequences of our  emergent predicaments.

Leaving aside the argument presented in this paper that climate change activism of both the global cooling and  warming varieties was always a stalking horse for top down social control by hand wringing Malthusians pessimists terrified of population growth and it’s environmental impacts, ignores the the more salient  issue of the validity of the the underlying  premise.

If I were to extrapolate your position as being in agreement with the “Optimists” underlying counter thesis of the authors, i.e. that: economic growth (exponential by definition) on a finite planet is inherently sustainable because of ” technological innovations and human creativity”  Would that be correct?  i.e. in a perfect Ayn Randian world of libertarian free market forces would we  innovate and ‘substitute’ our way to unchecked populations living in a first world techno utopia?  …Would we not have to pay the butchers bill of ecological overshoot?
 

However like all constrained ideologies  it falls down on critical points.  It does not recognize that their is a public commons or good, a ‘social’ right to clean air or water for example or to the extent that it recognizes it, erroneously assumes that right is served by market feed back loops of unfettered individual benefit seeking behavior.
mm

I seems to me that there is a kind of person who is psychologically predisposed to readily latch on to the notion that humans are despoilers of a perfect nature and indeed a disease vector upon the earth. The Malthusian theory of population growth outstripping resources has been around for 220 years now and is also enthusiastically embraced by some. There is a significant overlap between these folks and they take up the belief with a passion that exhibits itself as a religious fervor in various calls to action. I have seen some evidence of what I have just said in some postings here but apologize for the broad brush insinuation.

Certainly, I accept the concept of the public good and the right to clean water and air and the necessity of agreed upon rational regulations. To the extent that people here are concerned with developing resiliency and bottom-up solutions from within their small groups, that is laudable. But be that as it may, and at the risk of sounding the pessimist, that represents no greater solution as humans, being as they are, and natural momentum will carry things forward the way we’ve been going. Unless you think that you can educate and persuade the great majority to your point of view you will just be crying in your beer. Things will go on until they can’t and then reality will impose itself and force change.

Now, some people will immediately think that last sentence is callous and glib. But what worries me is the calls to action via government and laws.The changes people want would mean expanding the power of governments well beyond what already exists. That’s a real problem! When people favor strong government action they always imagine that their wishes will be the guiding light of the gov. action. But not so! Even if you formed a government only from people from this site and other like- minded people, within a short time there would be disagreements on action quickly leading to internecine warfare. When the Bolshevics took over Russia it didn’t take long before policy disagreements and power struggles led to people who had been in the forefront of the movement being sent to the gulag or receiving a bullet in the back of the head-committed communists all.

Governments almost never do things right and as they become powerful they attract sociopaths and ambitious power hungry people and become utterly corrupt to go along with the usual incompetence and wastefulness. Governments throughout history have destroyed countries , empires, and societies, whether through warfare, inflation, debt, or economic interference. Today will be no different.

I consider Alexandria Occasio- Cortez’s “new green deal” a good example. Apart from the fact that the core of her plan is directed at what I consider a non-problem, her solution would be disastrous beyond belief. It would require government control and intrusion into society and the economy to a totalitarian level. The massive building and rebuilding she proposes over ten years would require more resources than normally used in a hundred years. The despoilation of the environment with her “green” infrastructure would be massive, the economy would be destroyed and people would be lucky to escape the situation in which people today find themselves in Venezuela. The lady has a religious zeal to transform society into her imagined utopia via government power. It’s an old story that never ends well.

So yes I think that not only is the free-market approach the best, it is the only one that could possibly work. If it doesn’t then there will be no greater solution. Today we have only weak facsimiles of free markets with massive government and central bank intrusions. That doesn’t mean an absence of environmental protection. It also requires discussion and education within that context as well as honest ideology free science.

By the way, I’m not sure that the notion of a very limited government societal structure is not itself a utopian vision that can never actually endure for reason that is as a law of nature. I consider it a great unsolvable human dilemma and maybe we are just doomed to repeated cycles of the rise and fall of civilizations. But that’s another discussion.

and not quantity. Malthus was right if you consider all life from a quality standpoint. If you are a quantity sort, you can’t even see the lack of quality and therefore think that Malthus was a loony tune. There are billions of folks around the world that have an extremely low quality of life as the result of folks who make policies and personal decisions based on thinking (feeling?) that Malthus was wrong.

Note: This applies to other comments that have appeared at PP in the last few hours.

I’ve saved the link to this article (below) for several years and posted it previously as the topic seems to surface on a regular schedule here.  The section below is one of my favorites for a glimpse at different personal thought processes on the topic.  Likely a good probability, IMO, that the problem “will be solved”, with or without our input, in some manner.

Weisman travels to several countries with moderately to very high fertility rates. When he asks people in these countries what should be done to bring down the numbers, mostly the answer is “Nothing.” In Niger, in the village of Mailafia, he encounters a mother of eight who laments the lack of milk in her town. “All we want is food so we can produce children,” she exclaims. Also in Niger, in the city of Maradi, he meets an imam who tells him, “We know the future is alarming. But man cannot hold back doomsday.” In the Israeli city of Brei Brak, Weisman meets another mother of eight. She tells him she’s not the least bit concerned about the world’s burgeoning population, because “God made the problem, and He will solve it.” At a clinic in Karachi, Pakistan, he meets a technician who refuses to administer the contraceptive injection that one of the clinic’s patients has just been prescribed. “I don’t believe we should practice family planning,” the technician says. “Our community should increase in number.”

entire article here: https://www.newyorker.com/magazine/2013/10/21/head-count-3#

I consider Alexandria Occasio- Cortez’s “new green deal” a good example. Apart from the fact that the core of her plan is directed at what I consider a non-problem, her solution would be disastrous beyond belief. It would require government control and intrusion into society and the economy to a totalitarian level. The massive building and rebuilding she proposes over ten years would require more resources than normally used in a hundred years.

 

Ahem (cough), Old Guy, any evidence to back up those rather grandiose claims? 

 

I thought this summary was interesting…

https://www.theguardian.com/us-news/2019/feb/11/green-new-deal-alexandri…

If you don’t see it you are beyond hope.

To understand requires some understanding of economic cause and effect relationships. That seems to be well outside of the Guardian’s grasp.

You can’t explain university level math to someone who doesn’t know grade 6 math.

In what its supporters have claimed is “visionary,” the congressional media darling, Alexandria Occasio-Cortez (AOC) has released her short-awaited Green New Deal , and she has called for nothing short of destruction of life as we have known it:

Rep. Alexandria Ocasio-Cortez said she has no qualms about acknowledging a so-called “Green New Deal” will mean unprecedented governmental intrusion into the private sector. Appearing on NPR, she was asked if she’s prepared to tell Americans outright that her plans involve “massive government intervention.”

On one level, AOC is being honest; such a plan would be unprecedented, at least in the United States, but it hardly would be the first government-led massive intrusion into a nation’s economy. The 20 th Century was full of such intervention, beginning with World War I, and continuing through the years of communist governments. The century was full of intervention, and the earth was full of the dead bodies to prove it. What AOC and her political allies, including most Democrats that have declared they will run for the U.S. Presidency, are demanding is the U.S. version of Mao’s utterly-disastrous Great Leap Forward.

For all of the so-called specifics, the Green New Deal (GND) reads like a socialist website which is full of rhetoric, promises, and statements that assume a bunch of planners sitting around tables can replicate a complex economy that feeds, transports, and houses hundreds of millions of people. The New York Times declares the plan to give “ substance to an idea that had been a mostly vague rallying cry for a stimulus package around climate change, but its prospects are uncertain.”

Actually, there is nothing we can call “substance” in this proposal if we mean “substance” to be a realistic understanding that it would be impossible to re-direct via central planning nearly every factor of production in the U.S. economy from one set of uses to another, since that is what the proposed legislation actually requires. For example, the following is what AOC and others call the “scope” of the proposed law:

(A) The Plan for a Green New Deal (and the draft legislation) shall be developed with the objective of reaching the following outcomes within the target window of 10 years from the start of execution of the Plan:

Dramatically expand existing renewable power sources and deploy new production capacity with the goal of meeting 100% of national power demand through renewable sources;
Building a national, energy-efficient, “smart” grid;
Upgrading every residential and industrial building for state-of-the-art energy efficiency, comfort and safety;
Eliminating greenhouse gas emissions from the manufacturing, agricultural and other industries, including by investing in local-scale agriculture in communities across the country;
Eliminating greenhouse gas emissions from, repairing and improving transportation and other infrastructure, and upgrading water infrastructure to ensure universal access to clean water;
Funding massive investment in the drawdown of greenhouse gases;
Making “green” technology, industry, expertise, products and services a major export of the United States, with the aim of becoming the undisputed international leader in helping other countries transition to completely greenhouse gas neutral economies and bringing about a global Green New Deal.

It is hard to know where to begin in analyzing such an ambitious plan, especially when one understands the ramifications of what is in this bill. No doubt, many will believe it to be bold and long overdue. The CNN website breathlessly declares :

Public investments should prioritize what the resolution calls “frontline and vulnerable communities,” which include people in rural and de-industrialized areas as well as those that depend on carbon-intensive industries like oil and gas extraction.

And in a move that may draw support from a broad range of advocacy groups, the resolution sweeps in the full range of progressive policy priorities: Providing universal healthcare and affordable housing, ensuring that all jobs have union protections and family-sustaining wages, and keeping the business environment free of monopolistic competition.

However, CNN adds that the specifics – paying for the whole thing – are not included, at least not yet. In addition, the news organization adds the following for those worried that the entire operation might prove to be prohibitively costly:

… the New Dealers argue that a federally funded energy transition would stimulate growth by providing jobs, improving public health, and reducing waste. In addition, they argue that the government could capture more return on investment by retaining equity stakes in the projects they build.

In other words, this whole operation allegedly will generate so much new wealth that it will pay for itself, lift millions from poverty, and transform the entire U.S. economy. The plan is so generous that it promises an income even to people, according to the Democrat’s press release, who refuse to work still will be provided a “living wage” income.

The plan also is famous not only for what it purports to create (out right utopia) but what it also calls to be banned: cows and airlines. The plan calls for phasing out air travel within a decade to be replaced by a network of high-speed rail, as though this were even feasible. Cows, as the released document acknowledges, have flatulence, so they must be totally eliminated from the earth and meat from the U.S. diet, but there is nothing to address the massive disruption to life as we know it in order to implement such a plan.

Not surprisingly, The Atlantic is nearly breathless with praise for this monstrosity, but even that publication admits that the scale of AOC’s “vision” is beyond anything we ever have seen before:

Yet even in broad language, the resolution clearly describes a transformation that would leave virtually no sector of the economy untouched. A Green New Deal would direct new solar farms to bloom in the desert, new high-speed rail lines to crisscross the Plains, and squadrons of construction workers to insulate and weatherize buildings from Florida to Alaska. It would guarantee every American a job that pays a “family-sustaining wage,” codify paid family leave, and strengthen union law nationwide.

To be honest, “untouched” is not the appropriate term here, as “smashed” or “destroyed” is much more accurate and descriptive. We are not speaking of ordinary government intervention that marks most of the U.S. economy, but does allow for something of a price system to continue to exist. Instead, something of this magnitude would require a complete government takeover with central planning on a scale so huge that it would have to surpass the grandest dreams of the old Soviet Gosplan.

One of the most-asked questions, of course, is: “How do we pay for this?” Perhaps it is natural to ask such things, but we are not speaking of a particular project for which we have to purchase materials and pay those who create it. Instead, this plan would simply redirect nearly every resource, almost all labor, and every other factor of production away from current uses to something as determined by government planners and overlords. There is no other accurate way to describe what we are seeing.

The resolution naively assumes that all that needs to be done is for government to “finance” these projects through huge increases in taxes, borrowing, and (of course) printing money, and that such infusions of money will enable the government to “pay” for all of these new projects as though one were building a new skyscraper in Manhattan:

Many will say, “Massive government investment! How in the world can we pay for this?” The answer is: in the same ways that we paid for the 2008 bank bailout and extended quantitative easing programs, the same ways we paid for World War II and many other wars. The Federal Reserve can extend credit to power these projects and investments, new public banks can be created (as in WWII) to extend credit and a combination of various taxation tools (including taxes on carbon and other emissions and progressive wealth taxes) can be employed.
In addition to traditional debt tools, there is also a space for the government to take an equity role in projects, as several government and government-affiliated institutions already do.

Such statements demonstrate a profound ignorance of even basic economic concepts. The authors and supporters of this document believe that all it will take is for the government to direct massive amounts of money toward these new projects, and everything else will fall into line. But that is not even close to reality, as the only way to redirect such massive amounts of money would be to use force, and deadly force at that.

First, and most important, much of the present capital in the USA is geared toward the kind of economy that AOC and the Democrats demand be made illegal, so huge swaths of the capital stock would have to be abandoned, as little of it could be redirected elsewhere. One cannot overestimate the kind of financial damage that would cause, and it would impoverish much of the country almost overnight.

Second, the entire economy would be required to pivot toward capital development that would not be possible, given current technologies and opportunity costs, to create, especially in the 10-year time frame that the Democrats are demanding. Diverting new streams of finance toward such projects would be useless and even counterproductive, as the system simply would be overwhelmed. It would not be long before scarcity itself would mean that entire projects either would be stalled (like what we see with the infamous “Bullet Train” in California) or even abandoned. The human cost alone would be staggering.

As pointed out at the beginning of this article, for all of the “grand vision” rhetoric that accompanies the rollout of the AOC plan, this is nothing less than an attempt to re-implement Mao’s Great Leap Forward, albeit with high-speed rail instead of backyard steel mills. One cannot overestimate the disaster that would follow if this were forced upon the American economy.

So-called political visionaries rarely are willing to be truthful about the destruction that follows their schemes. When Baby Boomers were in college a half-century ago, many saw Mao as their political hero, a man with great vision who had the political will to do what was necessary to advance the fortunes of his own people. That he was a murderous tyrant who presided over mass death that exceeded even the killings of World War II was irrelevant or even ignored.

Today, we are told by her adoring press that Alexandria Occasio-Cortez is the New Visionary, a person who is far-seeing and knows what we have to do in order to survive the coming consequences of climate change. That her grand vision is little more than a mass-depopulation scheme is ignored, and we ignore it at our peril.

Hi Dennis,

thank you so much for your reminder!

I really should have thanked you for posting this article from the Newyorker back in late March 2016, but, it sent me down a rabbit hole, and it seems I’ve only just arrived back up for air.

The October 2013 Newyorker article was written by Elizabeth Kolbert, who later won the 2015 Pulitzer Prize in general nonfiction.

Her book, which I ordered at the time from Amazon was a joy to read, which I almost succeeded doing in a single sitting.

I have just found a pdf copy I’ll link below of the book from Archive.org, to pay you back a kindness – especially for your very timely humor that’s had me laughing often here at Peak Prosperity : –

The Sixth Extinction by Elizabeth Kolbert pdf

Finn

That was a fascinating read, Dennis!  The overall population of the world is growing, but that masks the fact that some areas are rapidly growing and others are gradually declining.  When overpopulation is discussed as a problem I almost never hear about this.  And to make matters worse, most of the people I read or listen to talking about the problem of overpopulation live in a part of the world that has a contracting birth rate.  So when “those people” (us!) talk about overpopulation they’re talking about a problem their own country is no longer contributing to!  It sure seems a little silly for those of us in the US, Japan, or Western Europe (which have a stable or declining birth rate) to get ourselves all atwitter about overpopulation in Africa or some MIddle Eastern country.  Not counting Africa and a few other places where their population is rapidly growing, most of the developed world has a shrinking population (based on birthrate, not factoring immigration).  If we’re going to be honest and actually address the REAL problem, shouldn’t we be discussing overpopulation, and what to do about it, in Africa and Pakistan?  That would change the whole tenor of the conversation.  Personally, since no one in those parts of the world has asked for my opinion or help with overpopulation, I’m inclined to stay out of that discussion.

So when we who live in stable or declining birth rate countries talk about overpopulation we should also have the wisdom to tie that in to a discussion on how to manage societies and economies that have a less-than-replacement birth rate, and a declining and aging population.  There are some big, thorny problems there and I don’t know of anybody who has good answers on how to handle the problems that arise in that situation.  Wow, I don’t even hear these things being seriously discussed.  The nearly universal assumption is that returning to population growth and economic growth is the ONLY possible answer.  Japan is probably the preeminent example.  Japan’s birth rate is slightly less than China’s, and they don’t have anything like China’s “one child policy.”  It’s happening naturally there, and observe how mightily The Elite have been trying to grow their population and economy anyway.  

That brings me to immigration.  It seems to me that “The Elite” are aware of these problems and have decided that the way to solve the problems created when advanced, prosperous countries naturally go in to population decline is to 1) eradicate the whole concept of nations and borders, and 2) take people from “zones” that have skyrocketing population growth rates and re-settle them in “zones” that are shrinking.  That neatly solves the problems created by “zones” which are not growing by skimming off the excess “human carbon units” where it’s too crowded and re-settling them in the shrinking areas. At least that looks like it will kick the can down the road a little longer. If you live in low earth orbit (like The Elite did in the movie “Elysium”) this makes sense and enables The Elite to continue to manage and milk the system as they see fit.  But down on the surface of the planet all hell is breaking loose.  The carbon units who live in relative comfort in the shrinking population zones generally don’t want to be “invaded” by greedy, starving masses from the overpopulating and poor “zones.”  They would rather someone come along and help them manage their declining and aging population with an economic system and form of governance that is NOT built on the assumption of permanent exponential growth.  (I think I’ll go invent that and secure my place in history!)  The average carbon unit in the declining population zones is not thrilled with large numbers of “invaders” especially if they are a drain on the system instead of net contribution to it as a whole.  They probably would appreciate a slow, thoughtful way of metering in carbon units who will legitimately contribute to the society as a whole.  I don’t see anything like that in the US, but some places are starting to apply the immigration brakes and demand a better plan than just dumping excess carbon units from other zones and hoping everyone can get along.

Diversity is NOT our strength (at least not automatically and without wise planning and control).  I’ve wondered why, if diversity is our strength, no one is demanding that the poorer monocultures of the world become diverse themselves.  You know, like Pakistan and Nigeria, for example.  Why aren’t there any demands that Pakistan take in large numbers of whites or east asians who are not Muslims?  Why aren’t Swedes trying to emigrate to Nigeria?  Why do countries like Pakistan and Nigeria have strict border controls?  Why is South Africa trying to eliminate it’s white population and return to its historical identity as a monoculture, and why are the diversity advocates remaining silent about that?  Why is it that diversity and uncontrolled immigration are only claimed to be an absolute necessity for the more prosperous countries of Europe, the US, Canada, Australia and New Zealand?  That’s a rhetorical question, because I know the answer.  Without asking our opinions or taking a vote, The Elites have decided to rebalance the Earth’s populations as they see fit and in a manner they believe will benefit themselves first and foremost.

Whatever theoretical solutions we could propose for these predicaments, I’m sure The Four Horsemen of the Apocalypse are going to end up “solving” these problems for us.  The Elites aren’t as smart or as powerful as they imagine, and I’m sure their “project” is going to fail spectacularly eventually.

Wow, that was dark.  How about this for a little comic relief?

If you don’t see it you are beyond hope.

To understand requires some understanding of economic cause and effect relationships. That seems to be well outside of the Guardian’s grasp.

You can’t explain university level math to someone who doesn’t know grade 6 math.

 

See, it’s that kind of mud-slinging that, you may find, alienates you even from people who might sympathize with some of your views on this site. You pretty much declare that anyone who disagrees with you is simply an idiot, incapable of obviously rational thought. Beyond that, once you sling mud, most PPers will assume you have no real credible argument to make.

 

Your opinions are welcome here, but you’re going to be asked for detailed evidence-based rebuttals, so get used to it. Notice how few likes your posts have? That’s not because there is an absence of people who might share some of your views, as much as it is a reflection that many people stopped listening to your posts due to the manner you conduct yourself here sometimes.

 

Stop being a douchebag, brah.

 

-S

 

PS- if you just come back butthurt that I said “douchebag” at you, you missed the point.

as a teamster/horseman, that was a post worthy of rereading and thoughtful consideration. 

robie,husband,father,farmer

 

DennisC quoting the New Yorker article:

In Niger, in the village of Mailafia, he encounters a mother of eight who laments the lack of milk in her town. “All we want is food so we can produce children,” she exclaims.

Time was when I would have thought this an idiotic point of view, but now I see that it’s an entirely rational goal in view of her social and economic circumstances. These people swim in an entirely different cultural river to us, and indeed, an entirely more ancient river. Through much of history the number of one’s children has been crucial in determining whether in old age one dies comfortably or starves miserably.

I am constantly glad and thankful that I live in a (so far) wealthy country which has systems in place making it unnecessary for me, who lacks children, to dig ditches until I drop dead.

If you don’t see it you are beyond hope.

To understand requires some understanding of economic cause and effect relationships. That seems to be well outside of the Guardian’s grasp.

You can’t explain university level math to someone who doesn’t know grade 6 math.

 

See, it’s that kind of mud-slinging that, you may find, alienates you even from people who might sympathize with some of your views on this site. You pretty much declare that anyone who disagrees with you is simply an idiot, incapable of obviously rational thought. Beyond that, once you sling mud, most PPers will assume you have no real credible argument to make.

 

Your opinions are welcome here, but you’re going to be asked for detailed evidence-based rebuttals, so get used to it. Notice how few likes your posts have? That’s not because there is an absence of people who might share some of your views, as much as it is a reflection that many people stopped listening to your posts due to the manner you conduct yourself here sometimes.

 

Stop being a douchebag, brah.

 

-S

 

PS- if you just come back butthurt that I said “douchebag” at you, you missed the point.

 

Agreed Snydeman, it’s pretty pathetic weak response to a reasonable request for solid evidence. ie Why (so far in his opinion only) will it use up more resources in 10 years compared to the last 100?

Not cool and certainly not in keeping with the ethos of this site.  It says a lot about the quality of the “facts” supposedly backing up the points Old Guy attempts to make.

For an “Old Guy”, he certainly displays a distinct lack of maturity and wisdom.

When challenged with the question “how much horsepower can your tractor deliver?” Robie responded by hitching up his team and making a show of it.

* primary rent up 3.4%
* medical care up 2.8%
* tuition/childcare up 2.8%
* drivers’ insurance up 3.4%

That’s a lot of mares to settle…

 

;P

JHKunstler, If I remember correctly, described our time as the remedievalization of modernity. “Settling ones mare” is an active choice to avoid the rush towards collapse.

Fed’s plan for the economy, simple and there is only one. Expand the bubble till it pops, it’s the only one in an fiat based banking system. What to do after the pop, easy, when your fiat currency has lost all value,(they all do), replace it with different one, I think it will be based on IMF special drawing rights. Alexandria O-C plan, simple, lie that climate  change is based on carbon, ignoring deforestation and geo-engineering purposely so have even more control and regulations to take away even more of our freedom.  Alexandria O-C plan for health care. Free health care enslaving us even more in the extortion racket of medical care, ignoring the subsidized sickening of the world with corporate food(subsidized GMO grain production) taking away any personal responsibilty from either the corpations producing our frankstein food supply and individual’s personal’s responsibility’s for making the right choices.             With only 3% of our country population producing food and just in time devilery of just about everything, our road will be bumper than we can ever imagine. 

For anyone interested.

https://www.thenewamerican.com/tech/environment/item/31472-un-ipcc-scien…

“By putting so much emphasis on climate alarmism and the alleged dangers of CO2, meanwhile, Mörner said the UN has diverted resources and attention away from “all the real problems” of the world that really do exist. “This is a terrible thing, this is the terrible thing,” he said. It is especially sad because “the world is full of real problems” such as hunger, starvation, killings, natural disasters, diseases, and so much more, he said. Yet because of the incessant focus on demonizing CO2 and trying to control “climate,” those very real problems get ignored.”

Old Guy,

I’ll go along with you at this instance and post up an interview I found in PDF of Nils-Axel Mörner, and others here can debate the finer detail within it.

To save people from stepping over the link, I’ve gone to the trouble of spending 20 minutes of my time over-riding the metadata of the pdf so I can copy and paste below.

I’d really appreciate that you at least recognise my time by offering a response that involves communication of some higher order than the pre-chewed fodder you’ve been serving up to date.

I am indeed a real, live, breathing, cognitive, sentient human being behind these words on your screen, and not your mirrored projection.

 

INTERVIEW: DR. NILS-AXEL MÖRNER

Sea-level Expert: It’s Not Rising!

Dr. Nils-Axel Mörner has studied sea level and its effects on coastal areas for some 35 years. Recently retired as director of the Paleogeophysics and Geodynamics Department at Stockholm University, Mörner is past president (1999-2003) of the INQUA Commission on Sea Level Changes and Coastal Evolution, and leader of the Maldives Sea Level Project. Mörner was interviewed by Associate Editor Gregory Murphy on June 6. The interview here is abridged; a full version appeared in Executive Intelligence Review, June 22, 2007.

Why coastal dwellers should not live in fear of inundation.

Question: I would like to start with a little bit about your background.

I am a sea-level specialist. There are many good sea-level people in the world, but let’s put it this way: There’s no one who’s beaten me. I took my thesis in 1969, devoted to a large extent to the sea-level problem. From then on I have launched most of the new theories, in the ‘70s, ‘80s, and ‘90s. I was the one who understood the problem of the gravitational potential surface, the theory that it changes with time. I’m the one who studied the rotation of the Earth, how it affected the redistribution of the oceans’ masses. And so on.

Sea-level Expert: It’s Not Rising!

I was president of INQUA, an international fraternal asso- ciation, their Commission on Sea-Level Changes and Coastal Evolution, from 1999 to 2003. And in order to do something intelligent there, we launched a special international sea-level research project in the Maldives, because that’s the hottest spot on Earth for [this topic]—there are so many variables interacting there, so it was interesting, and also people had claimed that the Maldives—about 1,200 small islands—were doomed to disappear in 50 years, or at most, 100 years. So that was a very important target.

I have had my own research institute at Stockholm University, which was devoted to something called paleogeophysics and geodynamics. It’s primarily a research institute, but lots of students came, I have several Ph.D. theses at my institute, and lots of visiting professors and research scientists came to learn about sea level. Working in this field, I don’t think there’s a spot on the Earth I haven’t been in! In the northmost, Greenland; and in Antarctica; and all around the Earth, and very much at the coasts.

So I have primary data from so many places, that when I’m speaking, I don’t do it out of ignorance, but on the contrary, I know what I’m talking about. And I have interaction with other scientific branches, because it’s very important to see the problems not just from one eye, but from many different aspects. Sometimes you dig up some very important thing in some geodesic paper which no other geologist would read. And you must have the time and the courage to go into the big questions, and I think I have done that.

The last 10 years or so, of course, everything has been the discussion on sea level, which they say is drowning us. In the early ‘90s, I was in Washington giving a paper on how the sea level is not rising, as they said. That had some echoes around the world.

Question: What is the real state of the sea-level?

You have to look at that in a lot of different ways. That is what I have done in a lot of different papers, so we can confine ourselves to the short story here. One way is to look at the global picture, to try to find the essence of what is going on. And then we can see that the sea level was indeed rising, from, let us say, 1850 to 1930-1940. And that rise had a rate in the order of 1 millimeter per year; 1.1 is the exact figure. Not more. And we can check that, because Holland is a subsiding area; it has been subsiding for many millions of years; and Sweden, after the last Ice Age, was uplifted. So if you balance those, there is only one solution, and it will be this figure….

There’s another way of checking it, because if the radius of the Earth increases as a result of sea level rise, then immediately the Earth’s rate of rotation would slow down. That is a physical law, right? You have it in figure-skating: when skaters rotate very fast, the arms are close to the body; and then when they increase the radius, by putting out their arms, they stop by themselves. So you can look at the rotation and you see the same thing: Yes, it might be 1.1 mm per year, but absolutely not more. It could be less, because there could be other factors affecting the Earth, but it certainly could not be more. Absolutely not! Again, it’s a matter of physics.

So, we have this 1 mm per year up to 1930, by observation, and we have it by rotation recording. So we go with those two. They go up and down, but there’s no trend in it; it was up until1930, and then down again. There’s no trend, absolutely no trend.

Another way of looking at what is going on is the tide gauge. Tide gauging is very complicated, because it gives different answers for wherever you are in the world. We have to rely on geology when we interpret it. So, for example, those people in the IPCC [Intergovernmental Panel on Climate Change], choose Hong Kong, which has six tide gauges, and they choose the record of one, which gives a 2.3 mm per year rise of sea level. Every geologist knows that that is a subsiding area. It’s the compaction of sediment; it is the only record which you should not use.

And if that [2.3 mm] figure is correct, then Holland would not be subsiding, it would be uplifting. And that is just ridiculous. Not even ignorance could be responsible for a thing like that. So tide gauges, you have to treat very, very carefully.

Now back to satellite altimetry, which shows the water, not just the coasts, but in the whole of the ocean, as measured by satellite. From 1992 to 2002, [the graph of the sea level] was a straight line, variability along a straight line, but absolutely no trend whatsoever. We could see spikes: a very rapid rise, but then in half a year, they fall back again. But absolutely no trend, and to have a sea-level rise, you need a trend.

Data Fudged

Then, in 2003, the same data set, which in their [IPCC’s] publications, in their website, was a straight line—suddenly it changed, and showed a very strong line of uplift, 2.3 mm per year, the same as from the tide gauge. And that didn’t look so nice. It looked as though they had recorded something, but they hadn’t recorded anything. It was the original data which they suddenly twisted up, because they entered a “correction factor,” which they took from the tide gauge.

So it was not a measured thing, but a figure introduced from outside. I accused them of this at the Academy of Sciences meeting in Moscow—I said you have introduced factors from outside; it’s not a measurement. It looks like it is measured from the satellite, but you don’t say what really happened. And they answered, that we had to do it, because otherwise we would not have gotten any trend!

That is terrible! As a matter of fact, it is a falsification of the data set. Why? Because they know the answer. And there you come to the point: They “know” the answer; the rest of us, we are searching for the answer. Because we are field geologists; they are computer scientists. So all this talk that sea level is rising, this stems from the computer modelling, not from observations. The observations don’t find it!

I have been an expert reviewer for the IPCC, both in 2000 and last year. The first time I read it [the report], I was exceptionally surprised. First of all, it had 22 authors, but none of them—none—were sea-level specialists. They were given this mission, because they promised to answer the right thing. Again, it was a computer issue. This is the typical thing: The meteorological community works with computers, simple computers. Geologists don’t do that! We go out in the field and observe, and then we can try to make a model with computerization; but it’s not the first thing.

So there we are. Then we went to the Maldives. I traced a drop in sea level in the 1970s, and the fishermen told me, “Yes, you are correct, because we remember”—things in their sailing routes have changed, things in their harbor have changed. I worked in the lagoon, I drilled in the sea, I drilled in lakes, I looked at the shore morphology—so many different environments. Always the same thing: In about 1970, the sea fell about 20 cm, for reasons involving probably evaporation or something. Not a change in volume or something like that—it was a rapid thing. The new level, which has been stable, has notchanged in the last 35 years. You can trace it so very, very carefully. No rise at all is the answer there.

The Case of Tuvalu

Another famous place is the Tuvalu Islands, which are supposed to soon disappear because they’ve put out too much carbon dioxide. There we have a tide gauge record, a variograph record, from 1978, so it’s 30 years. And again, if you look there, absolutely no trend, no rise.

So, from where do they get this rise in the Tuvalu Islands?

We know in the Tuvalu Islands that there was a Japanese pineapple industry which extracted too much fresh water from the inland, and those islands have very little fresh water available from precipitation, rain. So, if you take out too much, you destroy the water magazine, and you bring seawater into the magazine, which is not nice. So they took out too much freshwater and in came salt water. And of course the local people were upset. But then it was much easier to say, “No, no! It’s the global sea level rising! It has nothing to do with our extraction of freshwater.” So there you have it. This is a local industry which doesn’t pay.

You have Vanuatu, and also in the Pacific, north of New Zealand and Fiji—there is the island Tegua. They said they had to evacuate it, because the sea level was rising. But again, you look at the tide-gauge record: There is absolutely no signal that the sea level is rising. If anything, you could say that maybe the tide is lowering a little bit, but absolutely no rising.

And again, where do they [the IPCC] get it from? They get it from their inspiration, their hopes, their computer models, but not from observation, which is terrible.

We have Venice. Venice is well known, because that area is tectonically, because of the delta, slowly subsiding. The rate has been constant over time. A rising sea level would immediately accelerate the flooding. And it would be so simple to record it. And if you look at that 300-year record: In the 20th Century it was going up and down, around the subsidence rate. In 1970, you should have an acceleration, but instead, the rise almost finished. So it was the opposite.

If you go around the globe, you find no rise anywhere. But they need the rise, because if there is no rise, there is no death threat. They say there is nothing good to come from a sea-level rise, only problems, coastal problems. If you have a temperature rise, if it’s a problem in one area, it’s beneficial in another area. But sea level is the real “bad guy,” and therefore they have talked very much about it. But the real thing is, that it doesn’t exist in observational data, only in computer modelling….

I’ll tell you another thing: When I came to the Maldives, to our enormous surprise, one morning we were on an island, and I said, “This is something strange, the storm level has gone down; it has not gone up, it has gone down.” And then I started to check the level all around, and I asked the others in the group, “Do you see anything here on the beach?” And after a while they found it too. And as we had investigated, and we were sure, I said we cannot leave the Maldives and go home and say the sea level is not rising, it’s not respectful to the people. I have to say it to Maldive television.

So we made a very nice program for Maldive television, but it was forbidden by the government (!) because they thought that they would lose money. They accuse the West for putting out carbon dioxide, and therefore we have to pay for our damage and the flooding. So they wanted the flooding scenario to go on.

This tree, which I showed in the documentary, is interesting. This is a prison island, and when people left the island, from the ‘50s, it was a marker for them, when they saw this tree alone out there, they said, “Ah, freedom!” … I knew that this tree was in that terrible position already in the 1950s. So the slightest rise, and it would have been gone. I used it in my writings and for television.

You know what happened? There came an Australian sea- level team, which was for the IPCC and against me. Then the students pulled down the tree by hand! They destroyed the evidence. What kind of people are those? And we came to launch this film “Doomsday Called Off,” right after that, and the tree was still green. And I heard from the locals that they had seen the people who had pulled it down. So I put it up again, by hand, and made my TV program….

They call themselves scientists, and they’re destroying evidence! A scientist should always be open forreinterpretation, but you can never destroy evidence. And they were being watched, thinking they were clever.

Question: How does the IPCC get these small island nations so worked up about worrying that they’re going to be flooded tomorrow?

Because they get support; they get money, so their idea is to attract money from the industrial countries. And they believe that if the story is not sustained, they will lose it. So, they love this story. But the local people in the Maldives—it would be terrible to raise children—why should they go to school, if in 50 years everything will be gone? The only thing you should do, is learn how to swim….

Yes, and it’s much better to blame something else. Then they can wash their hands and say, “It’s not our fault. It’s the U.S., they’re putting out too much carbon dioxide.”

Question: Which is laughable, this idea that CO2 is driving global warming.

Precisely, that’s another thing.

And like this State of Fear [book], by Michael Crichton, when he talks about ice. Where is ice melting? Some Alpine glaciers are melting, others are advancing. Antarctic ice is certainly not melting; all the Antarctic records show expansion of ice. Greenland is the dark horse here for sure; the Arctic may be melting, but it doesn’t matter, because they’re already floating, and it has no effect.

A glacier like Kilimanjaro, which is important, on the Equator, is only melting because of deforestation. At the foot of the Kilimanjaro, there was a rain forest; from the rain forest camemoisture, from that came snow, and snow became ice. Now, they have cut down the rain forest, and instead of moisture, there comes heat; heat melts the ice, and there’s no more snow to generate the ice. So it’s a simple thing, but has nothing to do with temperature. It’s the misbehavior of the people around the mountain. So again, it’s like Tuvalu: We should say this is deforestation, that’s the thing. But instead they say, “No, no, it’s global warming!”

Question: Here, over the last few days, there was a group that sent out a power- point presentation on melting glaciers, and how this is going to raise sea level and create all kinds of problems.

The only place that has that potential is Greenland, and Greenland east is not melting; Greenland west, the Disco Bay is melting, but it has been melting for 200 years, at least, and the rate of melting decreased in the last 50-100 years. So, that’s another falsification.

But more important, in the last 5,000 years, the whole of the Northern Hemisphere experienced warming, the Holocene Warm Optimum, and it was 2.5 degrees warmer than today. And still, no problem with Antarctica, or with Greenland; still, no higher sea level

Observations Vs. Computer Models

Question: These scare stories are being used for political purposes.

Yes. Again, this is for me, the line of demarcation between the meteorological community and us: They work with computers; we geologists work with observations, and the observations do not fit with these scenarios. So what should you change? We cannot change observations, so we have to change the scenarios!

Instead of doing this, they give an endless amount of money to the side which agrees with the IPCC. The European Community, which has gone far in this thing: If you want a grant for a research project in climatology, it is written into the document that there must be a focus on global warming. All the rest of us, we can never get a coin there, because we are not fulfilling the basic obligations. That is really bad, because then you start asking for the answer you want to get. That’s what dictatorships did, autocracies. They demanded that scientists produce what they wanted….

You frighten a lot of scientists. If they say that climate is not changing, they lose their research grants. And some people cannot afford that; they become silent, or a few of us speak up, because we think that it’s for the honesty of science, that we have to do it.

Question: In one of your papers, you mentioned how the expansion of sea level changed the Earth’s rotation into different modes—that was quite an eye-opener.

Yes, but it is exceptionally hard to get these papers published also. The publishers compare it to IPCC’s modelling, and say, “Oh, this isn’t the IPCC.” Well, luckily it’s not! But you cannot say that….

When I became president of the INQUA Commission on Sea-Level Change and Coastal Evolution, we made a research project, and we had this up for discussion at five international meetings. And all the true sea level specialists agreed on this figure, that in 100 years, we might have a rise of 10 cm, with an uncertainty of plus or minus 10 cm—that’s not very much. [See Figure 3, p. 32.] And in recent years, I even improved it, by considering also that we’re going into a cold phase in 40 years. That gives 5 cm rise, plus or minus a few centimeters. That’s our best estimate. But that’s very, very different from the IPCC statement.

Ours is just a continuation of the pattern of sea level going back in time. Then you have absolutely maximum figures, like when we had all the ice in the vanishing ice caps that happened to be too far south in latitude after the Ice Age. You have more melting than after the Ice Age. You reach up to 10 mm per year—that was the super-maximum: 1 meter in 100 years….

People have been saying, 1 meter, 3 meters. It’s not feasible! These are figures which are so large, that only when the ice caps were vanishing, did we have those types of rates. They are absolutely extreme…. We are basing ourselves on the observations—in the past, in the present, and then predicting it into the future, with the best of the “feet on the ground” data that we can get, not from the computer.

Question: Isn’t some of what people are talking about just shoreline erosion, as opposed to sea-level rise?

Yes, and I have very nice pictures of it. If you have a coast, with some stability of the sea level, the waves make a kind of equilibrium profile—what they are transporting into the sea and what they are transporting onshore. If the sea rises a little, yes, it attacks, but the attack is not so vigorous. On the other hand, if the sea goes down, it is eating away at the old equilibrium level. There is a much larger redistribution of sand.

We had an island, where there was heavy erosion, every- thing was falling into the sea, trees and so on. But if you looked at what happened: The sand which disappeared there, if the sea level had gone up, that sand would have been placed higher, on top of the previous land. But it is being placed below the previous beach. We can see the previous beach, and it is 20-30 cm above the current beach. So this is erosion because the sea level fell, not because the sea level rose. And it is more common that erosion is caused by a falling sea level, than by a rising sea level.

Finn

am highly unconvinced. Given the nature that the glaciers I am aware of are melting, not growing; and given the nature that the Northwest Passage opened up about five years ago (thus eliminating resistance to more glacial seaward travel); and given the nature of the problems polar bears are having; and given the nature of the calving down in antarctica…and given the LOCAL anecdotal evidence (admittedly) that Tangier Island near me is slipping away..

..his conclusion that sea levels will drop is QUITE unconvincing.

NOW….

Given also the nature that New American is a publication of a political (that is, a government-lobbyist) organization, I refer you back to your own thesis that I identified and affirmed:

“government can’t do science”.

Has it never occurred to you that corporations have governance too? And that they, just as parents, act as governments as well? And that they have their own voices, even as the US government has its own media, its own spokes people, and its own politicians?

https://skepticalscience.com/sea-level-not-rising-intermediate.htm

The claim sea level isn’t rising is based on blatantly doctored graphs and conspiracy theories that are contradicted by empirical observational data.

Sea level is not rising
“Together, these two unaltered [sea level] datasets indicate that global mean sea level trend has remained stable over the entire period 1992-2007, altogether eliminating the apparent 3.2 mm/year rate of sea-level rise arising from the “adjusted” data.” (Christopher Monckton)

 

Most claims that sea level is not rising are based on arguments made by Nils-Axel Mörner (i.e. see here).  Figure 1 shows the mean global sea level data whose accuracy Mörner denies:

sea level

Figure 1: University of Colorado global mean sea level time series (with seasonal signal removed)

Mörner claims that the “true experts” think this data is wrong (emphasis added):

“The world’s true experts on sea level are to be found at the INQUA (International Union for Quaternary Reseach) commission on Sea Level Changes and Coastal Evolution (of which I am a former president), not at the IPCC. Our research is what the climate lobby might call an ‘inconvenient truth’: it shows that sea levels have been oscillating close to the present level for the last three centuries. This is not due to melting glaciers: sea levels are affected by a great many factors, such as the speed at which the earth rotates. They rose in the order of 10 to 11cm between 1850 and 1940, stopped rising or maybe even fell a little until 1970, and have remained roughly flat ever since.”

This is quite different from the INQUA official position on climate change, which opens by saying (emphasis added):

Climate change is real
There is now strong evidence that significant global warming is occurring. The evidence comes from direct measurements of rising surface air temperatures and subsurface ocean temperatures and, indirectly, from increases in average global sea levels, retreating glaciers, and changes in many physical and biological systems. It is very likely that most of the observed increase in global temperatures since the mid-twentieth century is due to human-induced increases in greenhouse gas concentrations in the atmosphere (IPCC 2007).

As George Monbiot has documented, INQUA has been trying to dissociate itself from Mörner’s views.

Current president of the INQUA commission on Coastal and Marine Processes, Professor Roland Gehrels of the University of Plymouth, says his view do not represent 99% of its members, and the organisation has previously stated that it is “distressed” that Mörner continues to falsely “represent himself in his former capacity.”

Tuvalu is among the various individual locations Mörner focuses on in his attempt to distract from global sea level rise.  However, it is a rather poor choice, since sea level rise around Tuvalu is faster than the global average (Figure 2).

  

Figure 2: Map of the Pacific Island region interannual sea level trend (linear variation with time) from the reconstruction 1950-2009. Locations of the 27 tide gauges (black circles and stars) used in the study are superimposed. Stars relate to the 7 tide gauges used in the global reconstruction. Dark areas relate to non-significant trends. From Becker (2011).

So how does Mörner explain the global sea level rise record, in which both satellite altimeters and tide gauges show average global sea level rise on the order of 3 mm per year (Figure 1)?  It’s all a conspiracy, of course:

“In 2003 the satellite altimetry record was mysteriously tilted upwards to imply a sudden sea level rise rate of 2.3mm per year…This is a scandal that should be called Sealevelgate. As with the Hockey Stick, there is little real-world data to support the upward tilt. It seems that the 2.3mm rise rate has been based on just one tide gauge in Hong Kong”

Obviously this conspiracy theory is utterly absurd, and is easily disproven by simply examining the IPCC Third Assessment Report (TAR) published in 2001, two years before Mörner’s accusation of falsified sea level data, which shows an approximately 10 to 15 mm rise in average global sea level from 1993 to 1998 (Figure 3).

ipcc tar sea level

Figure 3: Global mean sea level variations (light line) computed from the TOPEX/POSEIDON satellite altimeter data compared with the global averaged sea surface temperature variations (dark line) for 1993 to 1998. The seasonal components have been removed from both time-series. (IPCC TAR)

In short, Mörner’s conspiracy theory and accusation of falsified data is complete nonsense.  It’s also ironic that Mörner accuses others of falsifying data, since he has previously doctored photographs in his own presentations (i.e. see multiple photos of the Maldives ‘marker tree’ spliced together here and here).

However, even if we disregard the satellite altimetry data and instead examine the tide gauge data that Mörner prefers, his assertions are still clearly false.  Church and White (2011) examined sea level data from both tide gauges (TGs), satellite altimeter data (Sat-Alt), and the estimated contribution to the sea level rise from various sources (Figure 4).  The net estimated mean sea level rise from tide gauges and satellites is essentially the same.

church white

Figure 4: The observed sea level using coastal and island tide gauges (solid black line with grey shading indicating the estimated uncertainty) and using TOPEX/Poseidon/Jason‐1&2 satellite altimeter data (dashed black line). The two estimates have been matched at the start of the altimeter record in 1993. Also shown are the various components contributing to sea level rise (Church and White 2011)

Rather than being flat since 1970, as Mörner claimed in The Spectator article, mean sea level has risen more than 80mm over that period, according to tide gauges.  In fact, not only is global mean sea level data rising, but the rise is accelerating.

Highlighting the degree to which his arguments are divorced from reality, in testimony to the British House of Lords, Mörner even presented this laughable graph (which was later reproduced by Monckton and the SPPI), simply rotating Figure 1 to produce “the evidence that sea level is not rising” (Figure 5).

bizarro sea level

Figure 5: Tilted global sea level data produced by Monckton and Mörner in the SPPI Monthly CO2 Report for January 2011

Nils-Axel Mörner’s claims regarding sea level rise are the very definition of denial, involving nothing more than conspiracy theories and unsubstantiated accusations of data falsification wich are easily proven untrue.  The mainstream media needs to realize that Mörner is simply not a credible source of information about sea level rise or climate science in general.  One individual’s unsupported conspiracy theories do not trump empirical observational data.

Intermediate rebuttal written by dana1981

Update July 2015:

Here is a related lecture-video from Denial101x – Making Sense of Climate Science Denial

 

Last updated on 8 July 2015 by pattimer. View Archives

Try not to go 10 rounds with this guy.Every article he has cited can go back to one place,The Heartland Institute.It is funded by the Kochs,Mercers,Exxon and every other polluting Industry in the country.The tentacles are far,wide and the stakes are high…

But, other people were discussing the Morner article as if it might have some legitimacy. I didn’t want them wandering down some denialist trail of illogic without fair warning.

Finn,

With a  quick read I found two glaring errors tells me that either this guy doesn’t know what he’s talking about or is deliberately twisting things:

Old Guy- no doubt we are all caught in the net/web of our making – confirmation biases etc – 

and with the Daily combination of google/internet, social media , vested interests anything can (and is) be found and disseminated on the grand World Wide Web , (not to mention Levels of Consciousness /worldviews/Development – Where the “Higher” is Literally Over the heads of The Lower (See Harvard Professor Robert Keegan book Over Their Heads, estimated 65% world , 30% of America at a Pre-Rational level of thinking – Facts/Data literally mean nothing to them – while Facts/Data do have a kosmic address for those with “eyes” (cognition ) to see) 

your “man” seems to have a  skeptical past 

https://www.skepticalscience.com/Nils-Axel-Morner-wrong-about-sea-level-rise.html

 

again I concur with Charles Eisenstein (& premise of his new book – Climate – a New Story) – focusing overwhelming on Co2/Climate change (and regardless of what is causing it … or not) is too narrow a focus for the vast array of interrelated global predictiments upon us (& even IF under the greatest techno-fantasy we could “solve”/mitigate global warming /co2, it still doesn’t begin to address these other array of issues)

You are sure (like other’s aren’t ) that Nero didn’t drop “the match” and we all argue …. as Rome burns 

 

I tried but couldn’t read all the above comments.  Too many tangents.  I cannot and will not argue about global warming.  I do know that the powers that be are convinced that stratospheric aerosol injection can stop it or slow it down.  I see evidence of it almost daily with my own eyes.  I really don’t know what they are doing or how bad it is.I find it pretty shitty that there has not been a public debate before the all powerful forces decided on what was best for all of us. What chemicals or compounds are they using? What is the possible downside to insects or higher forms of life.  But they know best, they are the government right? So back to my said it before, store more food.  When you think you have enough, double it. Then do it again. Yep I’m a simpleton. 

Old Guy,

It kind of undermines your argument to kick it off with what appears to be a false statement:

UN IPCC Scientist Blows Whistle On Lies About Climate, Sea Level

It’s possible I missed something, but a brief search for Nils-Axel Morner online yields no evidence that he ever was a scientist affiliated with the UN IPCC.  I wondered when you mentioned it because I had the pleasure of meeting Robert Watson, who was chair of the IPCC at the time, in 2002.  I was curious what Nils-Axel Morner’s involvement was in what time frame, and what caused him to disavow IPCC’s work. But it looks like he’s alway only been a critic – at least, that’s my impression.

Our views on climate – at least mine, anyway – aren’t formed by reading one article or hearing from one person like Nils-Axel Morner or Robert Watson.  For me, it’s formed by decades now of various experiences – including gradual changes in weather patterns over the course of my lifetime in California, many time lapse videos of melting ice over years, reading endless articles, discussion, hearing from a lot of different people about their personal experiences, and so on. 

And importantly, for me, it involves making judgements about the character and motivations of people who express their views, present studies, or relate their own experiences on climate, or any issue.   Robert Watson, for example, was quite kind, extremely intelligent and down to Earth.  I also heard descriptions (at the same conference where I met Watson) from an Eskimo elder who described how areas now were starting to thaw where he lived that had been permafrost since he was small.

Nothing is certain in this world, and so we all have to make judgements about almost everything based on the ‘perpondance of evidence’.  As far as climate change goes, for me, it’s not even close. 

People that are denialists, it seems to me, often have a strong characterological or philosophical reason not to believe in man made climate change.  I’ve noticed that libertarians and others with strong anti-government feelings are (like yourself, Old Guy) very concerned about what urgent climate action implies about the need for synchronized global government action, intervention or control.  It’s pretty clear to me those folks would really like that urgent need for mass collaboration to go away and be found unreal.  It doesn’t compute with the more ideal world they would like to move toward.

Well, facts are facts – at least, as well as 97% of relevant scientists can determine, whether anyone organizes to do anything about them or not – and I’m not particularly optimistic that humans can organize to field an response that fends off the major climate disruptions that we already see ramping up.  You can find the occasional denialist like Nils Axel, and some of their points may be plausible, but overall, the amount of documentation and data out there supporting human caused climate change is staggering, it seems to me.

Lousiana Prepares to Abandon Its Coastal Flood Plain (Larger than Delaware to Climate Change)

http://350marin.org/louisiana-floodplain/

Antarctic Is Melting Faster Than any Time in History

http://350marin.org/antarctic-melting-faster/

etc., etc.

Glaciers time-lapse melting

NASA Time-lapse Artic ice-cap disappearing for first time since humans walked the Earth

https://slate.com/technology/2014/12/the-last-time-the-arctic-was-ice-fr…

Old Guy,

yesterday I chose to set a little experimenthoney trap into play here at Peak Prosperity, and it came out exactly as expected within hours.

Above me you’ll find – in the most part – free thinking adults who chose the longer, harder path of researching the marrow out of their subject’. This is why I wander within the walls of this little oasis, this font of knowledge, and why people without the ability to think for themselves, don’t last long.

My thanks to – in order of appearance: – Michael_Rudmin, Doug, Edwardelinski, Belmontl, Quercus Bicolor, Barnbuilder, and Kelvinator, who, in quick succession, mopped the floor with you, tipped your turgid detritous down the toilet, and flushed …

Finn

 

“tipped your turgid detritous down the toilet, and flushed …”

 

Finn,

If you’re going to be at the seminar, I’m buying you a beer (or beverage of choice) for using turgid and detritous together, in context no less! 😉

 

On a more serious note, I noticed your honey trap for Old Guy, but I realize now that it’s pointless. Old Guy is likey a coroporate shiv whose sole purpose is to foment confusion and distract us from focusing on the scientific data (and anecdotal evidence), and he neither listens to nor truly discusses anything with anyone directly. Life is so much better with him on the /ignore list. He will not acknowledge that the sources he draws from are evidently connected with corporate interests, as well as considered outliers by most experts in the field at best, and outright quacks at worst.

 

Still, it’s fun watching many PPers rip apart his thin veil of untruth and obfuscation.

1) I don’t think Old Guy is a paid corporate shill.  Or if he is, his hourly rate is dismal and/or the company’s ROI on his efforts is really unfortunate.  He’s far too wordy and ineffective to be a shill.  Of course, I could be wrong.  The shills I’ve seen that visit us here put about 1% of his effort into their responses, and they achieve much the same outcome.  He has triggered the Backfire Effect on perhaps 50% of the people here.

Hmm.  Something comes to mind.  Perhaps he’s a Climate Change Reinforcer, whose job it is to run around the net triggering the backfire effect on all the True Believers, further nailing their strongly held beliefs in place. Might he be just that good?

2) I am reminded of a comic that a friend of mine once posted that I never forgot.  I can’t say I always take it to heart, but I think it might apply here:

 

1) A valid possibility. Very sneaky!

 

2) I often fail at that. Like, daily.

 

Here’s a post I just saw on a friend’s timeline that I thought was pretty funny and pertinent:

 

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Keep Me Logged In

It’s a dark time for online publishers. This week alone, hundreds of journalists and other employees were laid off by BuzzFeed, Verizon Media Group (which includes HuffPo and Yahoo) and Vice Media.

The perils of digital media are well documented. As advertising dollars shift online, the vast majority of the growth is going to the biggest audience aggregators, mostly Google and Facebook. Some digital media companies focused their attention on viral-potential content that historically did well on Facebook, or plowed big money into video because Facebook and advertisers demanded it, only to find themselves stranded when Facebook shifted priorities or audiences never showed up.

Now, the digital media industry seems focused on two possible solutions:

But maybe news organizations should be asking the question that drove Netflix in its infancy. How can I deliver my product in a new way that maximizes customer satisfaction?

Here’s one possibility — it requires cooperation and some polite copying of already existing technology. But it’s not overly complicated.

Imagine a bundled mobile product, for one reasonable price per month, that spits out new stories as they’re published. Algorithms or humans could curate the articles to suit each reader’s interests, promoting the “big” stories that will be conversation-drivers.

In other words, think a subscription Twitter, but each account is a news organization (or subsections of a news organization), not an individual.

There could be different bundles: choose three news sites for $12 a month, five for $15, or all of them for $40, for instance. Initial adoption of such a product may have to come with a Netflix-like enticement — a shockingly low price that can slowly be raised as the years go by. But if you’re in trouble (or have limited upside), you need to think outside the box.

Paying for this “news Twitter” would grant paywall access to all of the stories from those particular news sites. The content would still be available from the publications’ web sites directly, or from social media links, as long as you paid for the bundled subscription. But the idea would be to pay once at a discount, so readers would walk away with subscriptions to (say) The Athletic, New York Magazine and Business Insider in one fell swoop and have access to them in one place.

I don’t think anybody wants to pay 14 different news organizations $4.99 or $9.99 or $12.99 a month, each with separate log-ins and a different username and password that are too easy to forget.

We’re actually seeing the exact opposite of this phenomenon play out with traditional television. Fewer people want to pay $100 for a huge swath of channels (many of which they don’t watch), and consumers want to see the video they’re paying for on their mobile devices.

The traditional pay-TV model was a golden goose for media companies for decades, until Netflix upended it with a much cheaper, more technologically advanced offering: Get the content you want, when you want it, at one low monthly price. Now the largest media companies — Disney, Comcast, CBS, Viacom, Fox, Warner — are all catching up with their own over-the-top services, or getting out of the game altogether by selling or consolidating.

But that proliferation of subscription video services cannot last. It’s only a matter of time before we get a new bundle of streaming services, with better curation of content. Because, again, no one wants to pay for 10 streaming services, each with their own independent passwords and application. It’s clunky and annoying and quickly gets expensive.

The question, then, is can digital media companies figure out a way to keep everyone happy and work together on such a product? General business history suggests this is very difficult. Broad partnerships typically fail. (One benefit to consolidation is there are fewer companies to work with.)

Perhaps working with a third-party aggregation service is necessary. Apple is trying to play this role with its magazine application Texture, but sources say Apple has run into problems with untrusting media organizations that don’t want to hand over the customer billing relationship. Controlling the consumer’s buying decisions is important.

The TV industry dealt with this issue by having periodic re-negotiations between distributors and content originators on price (typically every few years or so), with ratings often driving the conversation. The pay-TV operator ends up with the joys and pains of dealing with the customer while content companies like Viacom and AMC cede control.

The traditional pay-TV model may be eroding, but it’s a great example of a broad partnership that lasted — media companies and distributors played by a set of rules, each side with some leverage, and hammered out agreements year after year.

If digital media companies want to swing big and avoid more rounds of depressing layoffs, they should be thinking of what customers really want. The status quo won’t cut it.

(Disclosure: Comcast owns CNBC parent company NBCUniversal and is an investor in BuzzFeed.)

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Building resilience in northeast Iowa, southeast Minnesota, and western Wisconsin

Nordic brothers sharing thoughts and ideas on pre-crisis investment strategies and contingency planning.

Looking for likeminded people

Living a resilient life on both sides of the MO/KS state line

Looking for like minded folks near me. Anyone want to discuss the 3 E’s?

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Greed & Fear

Greed & Fear

Now that the world’s central banking cartel is taking a long-overdue pause from printing money and handing it to the wealthy elite, the collection of asset price bubbles nested within the Everything Bubble are starting to burst. 

The cartel (especially the ECB and the Fed) is hoping it can gently deflate these bubbles it created, but that’s a fantasy. Bubbles always burst badly; it’s their nature to do so. Economic suffering and misery always accompany their termination.

It’s said that “every bubble is in search of a pin”. History certainly shows they always manage to find one.

History also shows that after the puncturing, pundits obsess over what precise pin triggered it, as if that matters.  It doesn’t, because ’cause’ of a bubble’s bursting can be anything.  It can be a wayward comment by a finance minister, otherwise innocuous at any other time, that spooks a critical European bond market at exactly the right (wrong?) moment, triggering a runaway cascade.

Or it might be the routine bankruptcy of a small company that unexpectedly exposes an under-hedged counterparty, thereby setting off a chain reaction across the corporate bond market before the contagion quickly spreads into other key elements of the financial system. 

Or perhaps it will be the US Justice Department arresting a Chinese technology executive on murky, over-reaching charges to bully an ally into accepting that unilateral US sanctions are to be abided by everyone, regardless of sovereignty.

How was it that the famous Tulip Bulb bubble came to a crashing end back in the 1600’s?  No one knows the exact moment or trigger. But we can easily imagine that in some Dutch pub on the fateful night on the Feb 3rd 1637, a bidder on the most-coveted of all bulbs, the Semper Augustus, had an upset stomach and briefly grimaced when hit by a ripping gas pain:

Interpreting this face as distaste for the opening bid price, the assembled crowd may have suddenly realized the absurdity of paying so much (enough to clothe and feed a family for more than half a lifetime) for an ungrown flower. The bids were pulled, and the rest is history.

The point is: it doesn’t really matter what the pin actually is. The fatal trigger is often something completely unexpected and impossible to have predicted. So obsessing over what will end the Everything Bubble is a fool’s errand.

Rather than the “pin”, what’s important to focus on is the “pop” — what the aftermath will be. The duration and height of a bubble is directly correlated with the scope of the destruction its bursting will wreak, as is the number of asset classes that get caught up in the mania.

It’s much wiser to spend our time focusing on where the damage is going to occur, what path it’s most likely to take, and how bad the losses will be — so that we can position ourselves accordingly in advance for safety and, for the more adventurous, profit.

We’ve never seen anything like the current bubble we’re in. Stocks, bonds, real estate, fine art, you name it — nearly everything has been inflated to all-time highs. When this Everything Bubble pops, the pain is going to be epically calamitous.

And it’s increasingly looking like the “pop” has sounded.

Every bubble requires two essential inputs to fuel its rise:

If either is missing, no bubble.

Price bubbles are not financial phenomenon, but rather psychological constructs born and nurtured in the human brain stem. Greed and fear — that’s what drives bubbles.

Greed on the way up and then fear on the way down. But neither has much influence without a tempting yarn and a lot of easy credit.

In their quest for power and glory (and accompanied by a dead-flat learning curve), the world’s central banks are now pursuing their third, largest, and most ill-considered attempt to defeat the business cycle by replacing it with a credit cycle.  The fact that the prior two credit cycles blew up spectacularly doesn’t seem to be deterring them in the slightest.

A rather minor business cycle slowdown in 1994 was fought with a tidal wave of new credit under Greenspan. That ultimately resulted in the Dot Com Bubble crash of 2000, but the lesson went unlearned. 

Instead the Fed concluded that the idea was sound, but was simply not taken far enough. The elite cheerleading squad, captained by Paul Krugman, fully supported a doubling down, and the media unquestioningly went along with the program.

So Greenspan and Bernanke created the Housing Bubble 1.0 by offering the world’s credit markets a price of money so low it couldn’t be refused.  Housing was the story, and the Fed supplied the credit.  As predicted by a scant few of us, that all blew up spectacularly in 2008. And no constructive lessons were drawn from that experience, either.

With the political aircover to “save the system” (from the problems that it created!), Bernanke, Yellen, Kuroda and Draghi then led the most aggressive, coordinated central bank bender in all of human history.

$Trillions and $trillions were printed up, and many times that amount were leveraged and loaned throughout the banking and speculative finance universes:

(Source)

If you can’t clearly see how the above chart explains the massive price inflation over the past years in stocks, bonds and real estate, you’ll have no chance of understanding what’s coming next.  Best of luck to everyone choosing to avoid paying attention to this critical information; you’ll dearly need it.

Paying attention or not, here we all are; stuck together in a world awash with credit. $250 trillion in debt. 4 times that amount in unfunded liabilities. And a mind-bogglingly massive amount of tangled financial derivatives roughly the same size as both those debts and liabilities put together.

All that credit had to go somewhere. And it did.

Rare art fetched record-breaking prices. As did top-end trophy properties the world over.  Rare cars and large gemstones commanded the highest prices ever seen.  Stocks were bid up to ridiculous Price/Earnings multiples. And the Housing Bubble 2.0 returned to many metros around the globe — housing has never been more unaffordable to more people than it is now.

Can you feel it?  How greed is now giving way to fear? 

Sure, you probably know people who are hanging onto the Wall Street marketing slogans (“Buy the dips…hang on…don’t panic…successful investors don’t sell into weakness, they buy more!”). But the party atmosphere is now over. 

Just ask anyone who bought a house in Seattle in June (now down 11%). Or FAANG stocks in July (down 20%+). Or cryptocurrencies in January (down 80%+).

We’ve seen more downside volatility in the financial markets this year than in all of 2012-2017.

Until and unless the central banks reverse their current tightening course, everything is headed lower.

And I mean everything.

How bad will it get?  Honestly, pretty damn bad. Worse than 2000 and worse than 2008.

The credit cycle is just that much larger this time.

It’s the airgap between the economic value added (EVA) lines below and the spiked tops above that defines the amount off pain involved in the unwinding. This chart clearly shows the reckoning is going to be on a scale we’ve never experienced before.

Which is why our our advice continues to be protect your money, develop all 8 Forms of resilience (especially Emotional), and prepare to be a source of support for shell-shocked neighbors and loved ones.

The recent market volatility is just the beginning of the downslide.

There will be many starts and stops along the way, but coming soon will be a shock that wakes people up and scares them badly.

Perhaps it will be another institutional failure like Lehman Brothers.  Or maybe a sovereign default.  Or even a central bank failure (yeah, I’m looking at you Swiss National Bank!).

Just “printing less” is causing the major stock indexes to stumble, while plunging the peripheral emerging markets into bear market territory. 

What’s going to happen when the central banking cartel is in net “money withdrawal” mode? Will today’s teetering markets be able to withstand that headwind?

We won’t have to wait long to find out. We should hit that milestone in the next quarter.

For now, the Fed and ECB lack the political capital to resume printing anytime soon. The Bank of Japan hardly has the muscle to muster anything more than temporary speed bump on its wind-down. And China increasingly has less and less motivation to help the US financial elites by rescuing their markets for them.  Besides, the Chinese authorities have their own massive collapsing bubbles to contend with right now.

And to add insult to injury, recession indicators are piling up faster and faster now. 2019 is looking primed to be The Year That Mass Layoffs Returned. Should that be the case, the resultant slowdown in consumer spending is certainly not going to help matters.

Against this backdrop, how far could the markets fall from their current prices? Easily 30% to 50%. And that’s if we’re lucky.

In Part 2: What To Do Now That The “The Big One” Is Here, we detail out the key indicators to watch most closely to track the great unwinding ahead, so that you can stay head of events and increase your odds of positioning for safety (and profit).

Those of us who have spent the past years watching in concern as the Everything Bubble grew, this is the moment we’ve been anticipating. Time to put your crash plans into action.

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Just surveying the DrudgeReport and ZeroHedge news feeds, The Trump assault climaxes together with the market downturn.  

Prosecutors Say Trump Directed Illegal Payments During Campaign...
President Goes Off On Special Counsel Hours Before Bombshells...
MUELLER: COHEN HELPFUL... MEMO...
SDNY: LOCK HIM UP... 40-PAGE FILING...
'MOTIVATED BY GREED, LIVED DOUBLE LIFE'...
Paid More Than $4,000,000 For Promising Access...
Claims Russian Vowed Political 'Synergy' for Trump in 2015...
Got $60,000 'bonus' after Stormy Daniels payout...
MANAFORT ACCUSED OF 'DISCERNIBLE LIES'... MEMO...
Contacts with admin while under investigation...
Details Remain Under Seal...
White House chief of staff questioned in obstruction probe...
TRUMP: I'M CLEARED... 

Yep, it definitely looks like the financial bubbles have popped.  But it’s interesting to note the various perspectives of the people and commentators most invested in the subject.  Those following financial events or with active money in the game see rising fear but for the masses, the middle class, with little interest in stock, bond or gold prices, anger will focus their point of view.  The anger from declining opportunity that will eventually turn to rage as financial foundations crumble.

The immediate future therefore might be about to change radically for those holding assets and living off the central banking system but for the rest of the voting population nothing much will change for years, except perhaps the rate of change itself.  The same lack of opportunity will prevail or worsen, salaries will continue to stagnate or decline, worthwhile jobs will become fewer and housing prices will drop but still be out of reach.  Food and retail choices in general will become more difficult.  Homelessness will accelerate and destitution will spread like disease through all of the classes,

Meanwhile the multinationals will continue to exist in some form or other so that enough people will keep their jobs, hold on to their mortgages, their debt and some semblance of family security.  In other words the errant global financial system will continue to tick over.  Just as it did during the Great Depression. 

The real sea-change will happen in the political system as representative parties become more and more extreme.  Though ultimately useless each new government will fail to turn things around until finally the inherent corruptions blocking justice are expunged; at the point when some form of social revolution finally develops sufficient desperation, energy and order to overthrow the imperfect ideologies that drive man’s religious belief in concepts like democracy.

The real end to this socio-financial disaster is therefore decades away, the true misery just beginning.  Recovery only comes when people finally realize that governments, like all wielders of power, ultimately corrupt no matter what their constitution.  In the meantime, we should hunker down because there will be nowhere to hide in the century it will take to redefine justice and social order.

I think it’s slightly disingenuous to give examples of bubbles and not mention what happened to both Gold and Silver in the last decade….

I think that we have a huge opportunity masquerading as a problem.

We have two problems: the immediate one of the everything-bubble.
The other problem the gigantic financial system that distorts not only the economy, but our politics.
So much money in the hands of so few gives them hegemoinc power over most aspects of life.

This financial bubble is an opportunity to fix this second problem using the first.

The fault of previous bubble bursts has been that the central banks bailed out the financial sector.
As Mr. Martenson has pointed out, this merely perpetuates the problem.
The solution is not to destroy the Fed, but repurpose it.

What should happen is that the Fed should allow the private financial system to totally collapse.
The Goldman Sachs of the world should be completely liquidated. 
I suspect that their resulting value would be about $0.
This would take away their economic stranglehold on our society.

But productive industries such as factories located in the US need the money markets to function.
The Fed should then use its Section 13(3) powers to set up its own money-market window
and allow these businesses to directly access Fed funds, bypassing the financial system.
Some will howl that this is socialism,
but let’s face it, free-market financial capitalism is a failure.
(This Fed power should be temporary.
A well-regulated private financial system should be developed.)

This would destroy the current malignant financial system which would be a definite good.
It would remove Wall Street as a king maker in our society.
It could make the Wall Street the servant not the master of Main Street.

 

The Fed should then use its Section 13(3) powers to set up its own money-market window

and allow these businesses to directly access Fed funds, bypassing the financial system.

Some will howl that this is socialism,

but let’s face it, free-market financial capitalism is a failure.

It seems somewhat ironic when pots start calling kettles black. Monopolies are the logical conclusion of vested interests. Why compete when you can just buy the competition or steal their technology using government money and resources? Being connected has its privileges! Was it China that invented gunpowder? 

https://www.forbes.com/sites/haroldfurchtgottroth/2017/05/08/chinese-government-helps-huawei-with-5g/#3a982fdd6bae 

I found a small family run business that sells their own brand equivalent of the Big Berkey Water Filters and filter inserts cheaper than the brand name products.

St Paul Merchantile

They also sell the Butterfly Kerosene Stove that was in common use in the USA early in the 1900, before the electrical grid was built out.  (Liquid kerosene seems more likely to be available in my imaginary lower tech future than pressurized propane–just my guess.) 

Over counter cupboards throughout our kitchen make the table top stove below impractical at our house.  They have an equivalent model with legs, and a high BTU output model for pressure canning

The Kerosene goes into the  container on the right and wicks bring it up to the flame.

Almost as interesting to me is the mention that the stoves are build to third-world standards with imperfections in the hand painting that are hard for American customers to accept.

“Recovery only comes when people finally realize that governments, like all wielders of power, ultimately corrupt no matter what their constitution.”

the “limits to growth” are not political. this is math and science.

https://www.colemancanada.ca/en_CA/classic-2-burner-stove/3000003649.html?cgid=coleman-stovesandgrills#start=16

I’ve used mine for the last 40 years and have only had to siphon gas out of someones car 3 or 4 times over those years to eat warm food and can jam and tomatoes. White gas works the best but I’ve gotten by less quality. Kerosene? Uh, a bit pricey. I can still get parts, as well.

David Graeber’s exceptionally perceptive essay has since been expanded to book form by its author: https://strikemag.org/bullshit-jobs/

An interesting question raised by your analysis, pgp, is whether corporate executive suites understand which employees actually generate wealth, and which are simply holding the positions described in the essay.  I think it’s entirely possible that our existing top managers will discard the muscle and tendon and keep the pretty hair.  Of course, it’s also possible that all the folks with degrees in management and grant-processing will get laid off while the factory workers stay employed. Either way, one class of people is going to be extremely unhappy.

Interesting times.

Drudge linked to ZH version of this article. That ought to garner a wide audience.

… the people who are permitted to make decisions all have a vested interest in maintaining the banking system, even to the exclusion of everything else.  That, and for another reason:  The banking system immensely empowers war machines, and any war machine without a banking system will lose to one with a banking system.  It’s main advantage is its ability to subert EVERYTHING to destroying an enemy and taking his lunch. 

To the main headline, what to do now? 

I can offer my song:

Have yourself a very little christmas,
Make it yuletide-lite!
From now on, our troubles will be….      … outta sight!
HAve yourself a very little christmas,
As jobs all go away, now they simply legislate to make us pay!
Here we are, in great recession days, worse than depression days of yore!
A friend in need is a friend indeed, so we’ll have friends galore!
Through the years, we’ll share a tent together,If the law allow. 
Barack and Dubiya, please stand up and take a bow!
But have yourself a very little christmas now!

Sung with a sigh, and tongue in cheek, but… somewhat serious.
 

AP reported today that Yellow Vests protests have spread Belguim and the Netherlands, though are much smaller outside of France.

BRUSSELS (AP) — Belgian police fired tear gas and water cannons at yellow-vested protesters calling for the resignation of Prime Minister Charles Michel after they tried to breach a riot barricade, as the movement that started in France made its mark Saturday in Belgium and the Netherlands… around 400 protesters were gathered….

About 100 were detained, many for carrying dangerous objects like fireworks or clothing that could be used as protection in clashes with police.  [SP comment:  Apparently you are not allowed protective clothing when being beaten up by riot police.]

The reasons for the protests are not entirely clear. Neither Belgium nor the Netherlands has proposed a hike in fuel tax — the catalyst for the massive and destructive demonstrations in France in recent weeks.

Instead, protesters appeared to hail at least in part from a populist movement that is angry at government policy in general and what it sees as the widening gulf between mainstream politicians and the voters who put them in power. Some in Belgium appeared intent only on confronting police.

In the Dutch city of Rotterdam, a few hundred protesters in the high-visibility vests that have become a symbol of the movement walked peacefully across the downtown Erasmus Bridge singing a song about the Netherlands and handing flowers to passers-by.

Sisters Beb and Ieneke Lambermont, aged 76 and 67 respectively, were among them.

“Our children are hard-working people but they have to pay taxes everywhere. You can’t get housing anymore. It is not going well in Dutch society,” Ieneke said. “The social welfare net we grew up with is gone,” she said.

The government is not there for the people. It is there to protect its own interests,” she said

… we recover from this crash?

People talk about the algos taking over, let me hypothesize a second.

Suppose the ppt manages to save this one, and we recover from this crash?

We nonetheless have completed two full cycles of the three cycle triple top, which is one of the most salient features a person or computer can recognize.

So let’s not forget that there are whole armies of investment people out there (bullshit jobs) whose job is to look for ways to profit handsomely, and then program the algos to carry it out.

And if there is a well financed algo out there that can shape the third shoulder, and then short sell the markets hard (possibly through VIX), then all the other algos will recognize and sell too. So will the investment bankers, and the fund managers. And the one who short sells first will be very handsomely rewarded.

Of course, the game can continue indefinitely if nobody does; but that’s a perfect prisoner’s dilemma, with one exception: in a normal prisoner’s dilemma, you only have two or three real players. Here, you might have five hundred. Do you think that of those five hundred, NONE will try to tip the pan into their own pocket?

So any rational person out there should be noticing this, and recognize that it doesn’t make sense to buy into the next rise. Yeah, most people aren’t rational. And there’s actually a reasonable chance that the PPT can manage to overturn even an algo. Shoot, maybe that’s where all the missing pentagon trillions went. But really, I’d want to see us well past any third shoulder before I bought.

Ryan Broderick Twitter Feed

The real end to this socio-financial disaster is therefore decades away, the true misery just beginning.  Recovery only comes when people finally realize that governments, like all wielders of power, ultimately corrupt no matter what their constitution.

If this were only the mother-of-all financial bubbles, then perhaps decades before complete collapse and perhaps recovery would only require political and economic structural changes.  However, factor the size of the bubble, combined with energy, environmental and over population issues into the mix and I’m betting on a much faster collapse followed by a much longer recovery into a much lower per capita wealth society.

I’m hoping you are correct,  but not buying it.

 

Section 13(3) was used after the bursting of the 2008 bubble. 
But it was used to bail out the private financial sector.
You must admit, that sector was bailed out very completely.
This proves that Fed action is effective.
The financial sector is now back in business and doing even more damage than before.

When the next bubbles burst, we must bail out the sector that really matters.
Namely the productive sector of the economy.
To pursue a policy of leave-it-alone liquidationism will lead to a death-spiral of the productive sector.
(I may be wrong, but I assume that you would like some semblance of the productive sector to survive.)

I suspect that you would object to piling more debt on top of the already-too-high pile.
But don’t forget, if we allow the private financial sector to collapse,
trillions of dollars of debt will be destroyed.
And trillions of actual dollars will disappear from that financial speculation machine too.

So yes, the agency that created the bubble, if repurposed properly,
could fix the problem it was instrumental in creating.
(As far as the Fed being a monopoly, I accept the world the way it is not how I wish it was.)

While I can’t speak for pgp, I think the main difference between you and they is a disagreement over the amount of desperation that will be required before revolution occurs.  I agree with pgp that true revolution will not happen for decades.  I probably disagree with pgp in that I don’t think a true revolution will help, unless it involves a smarter species or smart aliens.  

I really thought that 2008 was the end of the existing power structure.  Eight years later and the result of a complete delegitimization of the financial system has included:

 

Assumption: Bubble to burst duration is a time measure of the masses “loss of faith” in the market.

Dot Com Bubble/Burst

RE Bubble/Burst

16/25 = 0.64 (duration reduction ratio between events)

x/16 = 0.64 (applying reduction ratio)

x = 10.2 months

Assuming bubble peaked in 9/2018 and the ratio holds, +10 months gives 7/2019…maximum economic pain just in time for the elections….

Police on strike on Wednesday?” – Le Parisien

Article translation via Google Translator:

“Two unions call for “act 1” of the police sling (strike) and one of them to “close the police stations”.

Two police unions are calling Monday for an “act 1” of the police sling. While law enforcement has been accumulating overtime since the Yellow Vest crisis began, the Alliance and SGP Police Unity unions have released news releases on their respective Twitter accounts.

“The police are exhausted and receive no recognition, UNIT SGP POLICE / FMSI-FO solemnly announces ACT 1 of the anger of the police” thus published the union of police labeled FO.”

 

Next few days should be expository on whether this is the case. We’ll see if you’re right, Dave.

Right now, we are in the middle of tax-loss-selling season. All the items which have dropped this year are under pressure, due to people selling in December in order to match off gains vs losses. Those same items will generally bounce at end of December/early January, but right now, the beaten-down stuff is being sold fairly hard. For the last few years, that has been the lot of the mining shares; this year we seem to have dodged this particular bullet.  Hmm.  Maybe that’s even what is causing some of the pressure on SPX.

https://business.financialpost.com/personal-finance/taxes/time-to-sell-how-to-offset-your-gains-by-swallowing-your-losses

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The Federal Reserve has sown the seeds and now the backlash grows.  Watered with injustice and fertilized with media complicity, a populist uprising begins. 

 

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On Friday, gold rose +12.75 [+0.99%] to 1303.13 on extremely heavy volume, while silver jumped +0.33 [+2.20%] to 15.36 on heavy volume. The buck retreated [-0.38%], SPX avoided disaster [-0.21%] bonds rallied [+0.42%] while crude moved lower [-0.65%]. It was a day of risk off, for the most part – much of the move came following a payrolls…

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Saving for Retirement When You Have a Pension

The biggest mistake that many people make is to not save for retirement because they think that they have a good pension. The reason this is a mistake is obvious: pensions are not as reliable as they used to be. Most of us probably know somebody whose supposedly great pension plan disappeared leaving them with a lot less retirement income.

Pensions are Not What They Used to be

The days when almost everybody could work for thirty years at the same job and look forward to a nice pension check in the mail each month are long gone. Most of us work at several different jobs with different retirement plans during our careers.

Even when a pension is available it could be unreliable in the last decade questions have even been raised about the security of government pensions. Many private pension plans have collapsed and been placed under the administration of the Pension Benefit Guarantee Corporation. The PBGC will continue paying the benefit at a much lower rate that is more vulnerable to inflation.

Finally pensions are a defined benefit which means retirees receive a set amount each month. This payment may not keep up with the rate of inflation and pensioners could end up in a situation where their income will not cover their expenses.

Retirement Savings Mechanisms for Pension Holders

Everybody who has a pension should have some retirement savings as a backup. A person can also get tax benefits from such savings because many retirement products are tax-deferred or tax-exempt. There are two excellent savings mechanisms available to everybody even if they have a pension.

Anybody can set up a tax-deferred Individual Retirement Account or IRA. A person can contribute up to $5,000 a year to an IRA and invest the funds in a wide variety of instruments including stocks, bonds, mutual funds, ETFs and even annuities. The gains on the investment will be tax-deferred which means no taxes are due until money is withdrawn. A person can also invest in a Roth IRA in which funds are tax exempt after initial taxes are paid. Most persons who withdraw funds from IRAs before age 59½ will have to pay a 10% tax penalty in addition to normal income tax on the funds taken out.

A deferred annuity is a plan that allows a person to purchase an annuity through a series of payments or regular contributions. When they retire the plan will start making regular payments to them. The main advantage to this arrangement is that the funds are insured so the beneficiary will get them. Another plus is that there is no limit on the amount of tax-deferred funds a person can keep in annuities. Unfortunately it is also subject to the same withdrawal penalty for those under 59½.

How Much Retirement Savings Should You Have

A person should try to save as much additional retirement income as possible. A good rule of thumb is to have a minimum of one year’s income saved when you retire. The more you save the better off you will be.

What If I Have Little or No Savings and I’m About to Retire

A person who has little or no savings who is about to retire has a number of options. An individual with a lot of cash can purchase products called immediate annuities. These are tax deferred, they are insured and they will provide a regular income. Some of them are designed to provide income for life. Other options for such a person include reverse mortgages and universal life insurance policies.

Steven Hart is a freelance writer and a Financial Advisor from Cary, IL. He writes about finance topics like annuities, insurance, investment, and retirement.

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The 6 Daily Habits of Highly Successful People

Have you ever wondered why some people seem to have the Midas touch while others fail no matter how hard they try or how much effort they put into something? Me too. So much so that I decided to really look into what it was that made the successful people successful and the rest, well, unsuccessful.

What I learned was astonishing. There was actually a commonality in the set of daily habits, or activities, that successful people take on each and every day. It is these activities that make them successful. It gives them that “Midas Touch”.

So what are these common activities?

Personal Development

At any moment we are where we are because of our best thinking. Our current situation is simply a culmination of our past thoughts and actions. If we want different results, better results, then logically it makes sense that we should start with our thinking. Evolution through personal development will have an astounding impact towards the accomplishment of one’s goals

Our success is going to be predicated upon ‘who we are being’ more than any other factor.

Visualization of Goals

This is one of the most crucial steps in this success process. Not surprisingly, it is also one of the things that you will almost never hear about from a person who is failing.

The visualization that I am talking about here isn’t merely a quick “close your eyes and think about what you want for a minute” visualization. No, this is a full, blown-out, five senses type experience. You want to bring the visualization to life. You want to see it, smell it, taste it, hear it and feel it – you want it to be real.

Why is this so important? Well, if you don’t know where you are going then how in the world are you ever going to know when or if you get there? The visualization makes the experience real and the amazing thing is: Once you know the end result, the how pretty much takes care of itself.

Income Producing Activities

We can spend all day making ourselves better, aligning our thoughts with those who are where we want to be and we can visualize our wants and desires until the cows come home. BUT, unless we take some action, nothing will manifest itself.

So, what are your income producing activities? You have to think about this and it really shouldn’t be that difficult. But be careful and don’t fall into the trap of thinking that all the ancillary things you do are actually producing income, because they’re probably not.

For me, in my business, it’s simple. I generate leads. I sort those leads and get the qualified leads information and then I collect a decision. That’s it. Nothing else I do is income producing. The writing, blogging, social networking, etc., those aren’t putting any money in my pocket. They are fun and they might generate a lead or two but that’s not why I do it and I need to keep that in perspective.

Do the things that make you money first and then get to the other stuff.

Mastermind with Other Leaders

Earlier I talked about our best thinking. What is the best way to change the way we think? It is to surround ourselves with people who are getting the results we want. By surrounding ourselves with these individuals something amazing happens. We start to model the behavior of those individuals and this is vastly different than imitating them. We start thinking like them. We start becoming them. (And remember earlier when I talked about your success being tied to who you are being… )

This masterminding can be done in various ways: conference calls, personal calls, email, etc. The important thing here is that we cease to take the advice from people who aren’t getting the results we want (which are typically those closest to us) and we start modeling those who are.

You can even create a board of directors for yourself. Depending on what your desired goals is, choose people who are where you want to be. These don’t even need to be people you know, or talk to. For instance, if you are looking for success in business then perhaps you’ll have Donald Trump on your board. When you are confronted with a pivotal decision, think to yourself, “What would Donald do?” There’s your answer and there’s your mastermind.

Cultivate the Expectation of Leadership

If you want success then you better damn well be the leader. Nobody wants to follow a loser. Step-up and take on the role of leader.

Do you want to know how you become a leader? It’s easier than you think… Just ‘be the leader’. Make the decision to do it and take action like a leader would.

In addition to expecting leadership from yourself, you should also expect that the people you are now attracting into your life will be leaders as well. You are going somewhere; make sure that the people coming with you deserve to be there too.

Gifts & Gratitude

Let’s start with gratitude. The most powerful position to operate from is that of gratitude. Why? You might ask. Well it is simply because if you are operating from a state of gratitude then you have already achieved your desired result. You are thankful for it and no longer wondering about it and wanting for it. You are thankful for the result and it has been realized. There is no doubt. There is nothing holding you back.

Now comes the point where I get a little ‘new age’ on you and talk about how giving opens the floodgates to receiving. Whether you want to believe it or not, there is a harmonic flow of wealth in the universe. If you horde everything you get then there is no room for whatever it is that you want. You must make room in your life for the things you want and the best way to do that is by giving.

For instance, if you want a new wardrobe then you better clean out the closet first, why not donate, or there won’t be room for all those new clothes. Similarly if you have been eyeing that new luxury car but your garage is cluttered with mess, where is that going to go?

The universe knows when there is or is not room for the things you want. If you make the room, it’s funny how things start to show up.

So there you have it. These are the things that you will find highly successful people doing on a daily basis.

Here’s the great news. You can choose to incorporate these activities into your daily routine. Before long, they will become your daily habits and you too will find the success that you’re looking for.

To learn more about creating wealth in any area of your life visit www.BrianPray.com.

You can also listen to Brian’s motivational podcast series The All You Want In Life Podcast by visiting www.AllYouWantInLife.com.

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