Brian’s Morning Newsletter
June 5th 2009
Brian’s Morning Newsletter Discussion Forum
Youtube video of Tusas horno mud making
Tusas horno mud making
Tusas wind turbine raising and lowering
A new youtube video on the Tusas Turbines
Good Morning
Sorry about the pile of links, but I want to promote my Youtube.com videos for a while, then I’ll pull the links. I’m sure I can do more to promote my videos, but I haven’t had time to fine-tune the settings at YT yet. Anyway, my incentive isn’t strong for public promotion when we’ve got each other. So for now, you’re it, and I’m glad. The last link is the newest video I uploaded, so please check it out, let me know what you think. One last note on the videos, and in defense of my redundant wordage,"…Horno Oven…" I did that specifically because youtube is worldwide and I assume many people might not know what an horno is. I should have posted it like this "Horno (oven) building" However with a grand total of 14 views does it matter?
So, all right all ready, where are we on our progress to make the world a better place than we found it? I’ve been busy helping Kevin get driving legal all week. As usual I’m also cracking the get to work whip. We’re helping Louie set up some files called tool-paths for the CNC router.
I use the word "we’re," loosely, Kevin is the pro on this stuff. I get it, on most of what I see, but could I reproduce the processes? Probably not without an arduous learning period. This morning we’ll go into town and give the file Kevin has been working on all day yesterday a whirl and see what it does. We are both hoping that a new set of blades will radically increase the output from our wind turbine.
Plus for me today is the one and only day this week I have worked for money, so I gotta take care of my wireless Internet customers. Yesterday after a very successful and unbelievably brief visit to the Mora DMV we drove north out of La Cueva and Rainsville past the Salmon raspberry farm to visit Ed Littleton.
It was a wonderful visit and great little road trip. We got to see the truck I’m supposed to be making payments on except for this pesky recession cutting our financial means further. We do feel good that we don’t have bank and credit card debt, so getting a loan for a vehicle isn’t an option.
My latest hope lies in a rumor that the government has some type of small wind power grants available for research such as we are doing. So, great, we like grants, now all we need is for the guy who got our hopes up to follow through with the links and contacts so we can receive government money to keep moving ahead with our wind turbine building project can do so as quickly as possible. We don’t need a boat load of cash, just enough so that we can keep moving even as the eco0nomy continues to dive.
So there ya go. The weekend is here, let’s hope everyone finds the time to help the planet somehow, and anyway we can right?
Brian Rodgers
U.S. states to lead in creating high-speed rail: Biden
By Lisa Lambert
WASHINGTON (Reuters) - Despite the U.S. government's plans to spend $13 billion establishing high-speed rail across the country, much of the work to lay the tracks and send the trains chugging will fall to the states, Vice President Joe Biden said on Wednesday.
"We have no illusions. We know your budgets are strained," Biden told a meeting of governors and state transportation officials.
"People say to me ... 'Why the heck are you talking about high-speed rail all the time when these guys and these women are in a position where they're having trouble balancing their budgets?' Well, the payoff ... is really significant," he said.
The federal stimulus plan enacted in February includes $8 billion for upgrading existing passenger rail service and developing high-speed projects. President Barack Obama included another $5 billion for the fast trains in his recent budget.
The Transportation Department will release guidance on June 17 on applying for stimulus funds and will announce how money will be distributed "later in the fall," said Transportation Secretary Ray LaHood.
Biden told the governors the federal government would be "jumpstarting" a process "you all have been talking about but seemed so out of reach before."
The private sector abandoned passenger rail operations decades ago after the government expanded highways and facilitated the rise of air travel. But governors have pushed for a passenger rail network that would zip travelers from city to city, thin air and road traffic and reduce air pollution.
Speaking with reporters after the meeting, governors from Midwestern, Atlantic and Southern states said they would find ways to squeeze money from budgets largely tapped dry.
Illinois Governor Pat Quinn said his state is allocating millions of dollars for rail and said he hopes to leverage private dollars. But he doubts the municipal bond market can round out the financing.
"We had to fight hard to make sure our legislature understood $400 million for high-speed rail is not piddly-diddly. This is a major investment in the future," he said.
For Michigan Governor Jennifer Granholm, high-speed rail could give jobs to hundreds of workers in the state displaced by the downfall and subsequent bankruptcy filings of auto behemoths General Motors and Chrysler.
Documentary-maker Michael Moore, who chronicled GM's decline in the 1989 film "Roger and Me," earlier this week suggested GM be required to use its federal bailout to retool factories and "keep the current work force -- and most of those who have been laid off -- employed so they can build the new modes of 21st century transportation."
Granholm appeared to agree with that view.
"I see this as a means of creating jobs -- jobs building the system and jobs building those railcars, which right now are predominantly made in Europe," she said. "Let me just say we have lots of capacity in Michigan and workers that are hungry and know how to make things."
(Editing by Dan Grebler)
Our Heroine, Angela Merkel
by Bill Bonner
London, England
Angela is a genius. Tim is a schmuck. That's what we took away from yesterday's news.
As near as we can make out, Tim Geithner's trip to Beijing was, at best, a draw.
He told his soothing lies. China listened. The markets reacted favorably.
Stocks fell...with the Dow down 99 points. Gold was down too - $18. And oil lost $2, to close at $66.
But the dollar went up - to $1.41 per euro.
His goal was to bluff and bamboozle the world's investors - notably China - into believing that the US had its finances under control.
Once we're out of this mess, he told China's top man, we're going straight.
No more binges of EZ credit and wild government spending. We just need a little more of that old time medicine...just one more time...to get us through this dark night of economic downturn. But once the sun comes up and the economy is back on the road to recovery, trust me on this, America is going to balance its budget, foreswear Quantitative Easing forever, and join AA. No kidding. Cross your heart and hope to die.
But some habits are hard to break.
The habit of getting something for nothing is one of them.
Spending money someone else earned is like eating a big slice of Black Forest cake and watching someone across the table get fat. You're likely to ask for seconds.
Americans are in the habit of spending huge amounts of money...with no intention of ever paying it back.
Consumers did it in the '09s and '00s. Now the feds are doing it. The federal deficit for this year alone is four times last year's record.
The official US debt is exploding. Bill Gross says it will be 100% of US GDP within 5 years.
Our guess is that it will reach that level even sooner.
At 100% of GDP...even mainstream economists believe the situation will be irreversible...interest payments will be more than the US can afford. At that point, forced to borrow more and more just to keep up with the interest, the system will go into a Ponzi-scheme endgame. You can protect your investments from the inevitable fallout with seven super shields,
.
"Our expectation is the government won't be able to exit" from its deficit spending positions, said Gross in an interview on Bloomberg Radio.
The programs "will be semi-permanent positions on their balance sheets."
Once you go down that road, it's hard - maybe impossible - to come back. The US won't be able to pay off its debt...and it won't be able to unload GM. Nor will the Federal Reserve be able to sell its holding of bonds onto the open market - without causing yields to rise.
Even Ben Bernanke says that "long-term deficits threaten the financial stability" of the nation.
As we've pointed out many times, the problem is more political than financial.
The bums in Washington could still straighten up - if they wanted to. We've already told them how they could bring the deficits...and the economic downturn...under control. But they're not about to take our suggestions. Instead, they're "gonna have fun, fun, fun until Daddy takes the T-bird away..."
Daddy China, that is. The Middle Kingdom. The Red Menace. Now, the leader of the bond vigilantes.
Remember the bond vigilantes? They are supposed to keep a lookout for inflation. And when they see it increasing, they come riding into town guns ablazing...they sell bonds and force up yields, thus bringing inflation back under control.
Inflation rates and bond yields have generally been going downhill for the last 26 years...so the old vigilantes have retired.
But now China seems to be strapping on its six guns. Are you prepared for when this bubble gets shot out? If not, learn how to profit during the burst by participating in the anti-stock market,
.
According to the press reports of the showdown in Beijing, it sounds as though Geithner diverted attention from the main issue - at least for a while. There's some blah blah about China paying a bigger role in the IMF, for example, and more blah blah about cooperation between the US and China on financial matters.
Someone actually asked the Treasury Secretary why he was talking about involving China in the IMF. His answer: "I just see it as the necessary evolution." We won't stop to wonder what a 'necessary evolution' is. Because the whole IMF discussion was irrelevant and pointless blah blah.
The real story is the last thing Geithner wanted to talk about. Partly because he doesn't understand it. And partly because he can't say anything about it that would help.
China has a lot of money with pictures of dead US presidents on it. It's worried that those green presidents may soon by not only dead, but worthless.
"If the US can find a way to protect China's assets," said Yu Yongding, going right to the bottom line, "America's standing here will increase."
If not...well...that's what we're going to find out.
But first, a quick briefing on the latest news from Ian in Baltimore...
"Washington is on track to issue more than $5 trillion in new debt over the next 18 months," begins Ian Mathias in today's issue of
. "Total interest payments on government debt are plotted to exceed $800 billion in the next 10 years, up almost five-fold from 2009. That's if long bond yields stay under 5%, as the Congressional Budget Office forecasts. Every one percentage point higher, says Harvard economist Kenneth Rogoff, will cost the U.S. government an extra $170 billion annually.
"Perhaps our only saving grace; the whole western world has bought into America's economic school of thought.
 |
"'The Fed can only manipulate interest rates so far,' notes our currency trader Bill Jenkins. 'Then the market takes over. Our Treasury bonds are becoming a greater and greater risk to people who buy and hold them. Of course, basic market theory holds that to assume greater risk going forward, one must have a higher rate of return. So no matter what the Fed "dictates" by lowering rates, they are on their way up!'"
Ian's entire daily email brief is free to subscribers to our paid publications, including Byron King's elite service
Energy & Scarcity Investor
,
.
And now, we return to Bill in Big Ben's hometown...
How much of what goes on is just blah...blah...blah...just people talking?
Probably 90%.
People come to think what they must think when they must think it.
Then they blah...blah...blah to convince each other that they're right.
But what really matters are the deep, long patterns...patterns of history that no one can control and few take the trouble to try to understand.
Bill Gross: "I think it is important to recognize that
General Motors is a canary in this country's economic coal mine
; a forerunner for what's to come for the broader economy. Their mistakes have resembled this nation's mistakes; their problems will be our future problems. If the US and General Motors have similar flaws and indeed symbiotic fates, they appear to be conjoined primarily by the un-competitiveness of their existing labor cost structures and the onerous burden of their future healthcare and pension liabilities.
Perhaps the most significant comparison between GM and the US economy lies in the recognition of enormous unfunded liabilities in healthcare and pensions.
Reportedly $1,500 of every GM car sold in the dealer showrooms goes to pay for current and future health benefits of existing and retired workers, a sum totaling nearly $60 billion. The total future healthcare liability for all US citizens can be measured in the tens of trillions."
Our heroine, Angela Merkel, made the front-page news yesterday. She stood up against almost every mainstream economist, politician, and central banker in the world - and gave them all hell.
"What other central banks have been doing must be reversed.
I am very skeptical about the extent of the Fed's actions and the way the Bank of England has carved its own little line in Europe," she said at a conference in Berlin.
"Even the European Central Bank has somewhat bowed to international pressure with its purchase of covered bonds.
"We must return to independent and sensible monetary policies, otherwise we will be back to where we are now in 10 years' time."
You go girl!
"This lady is currently the only person among all of our mighty and famous whom ordinary taxpayers in the western world can look to in order to hope for any protection of their interests," says a letter writer to the Financial Times.
Of course, the professional economists and the earnest press all replied with the typical blah, blah, blah...
"Ms. Merkel's intervention may be a political ploy and will probably come to nothing," says the Financial Times editorial page. "But it is, nonetheless, harmful..."
Bloomberg
reports:
"Ben Bernanke, the chairman of the United States Federal Reserve, said Wednesday that he "respectfully disagreed"
with Angela Merkel, the German chancellor, about her recent criticism of efforts by the Fed and other central banks to stabilize Wall Street and the banking system.
"The US and the global economies, including Germany, have faced an extraordinary combination of a financial crisis not seen since the Great Depression, plus a very serious downturn," Mr. Bernanke told lawmakers Wednesday morning at a House Budget Committee hearing, after being asked to respond to the chancellor's remarks. "In that context, I think that strong action on both the fiscal and monetary sides is justified."
"I am comfortable with the policy action the Federal Reserve has taken," Mr. Bernanke said Wednesday.
"We are comfortable we can exit from those policies at the appropriate time without inflationary consequences."
Ha! That's the question.
Like Bill Gross, we don't think the US can get out of its inflation-causing positions.
It won't want to act too soon - that's the lesson Bernanke thinks he learned from the Japanese. And then, when it finally does act, it will be too late. It may want to unwind its positions by then, but the market winds will be against it. Bond prices will be falling - inflation will be responsible for that. The feds won't want to dump more bonds onto a falling market.
Then, traders - especially the same Wall Street institutions that they are subsidizing - will take advantage of them. In effect, the feds will have a massive short position in bond yields. When yields rise, they will have to cover...and shrewd traders all over the world will know it.
They'll stick it to them...selling bonds ahead of the feds' massive selling.
Finally, the feds will be hung out to dry...like Long Term Capital Management, but with no one to bail them out.
Until tomorrow,
Bill Bonner
The Daily Reckoning
Trying to shut off the comments now
B
I hear ya, nobody ever used until now, no wait yes someone did, oh but it was you,
This is a redundent feature if you want replies to the forum. And it’s hard to find
JD