California fires, $250 billion and counting.

 WHERE WILL ALL THE MONEY COME FROM?

WE WILL ALL BE PAYING FOR THIS CATASTROPHE

Sadly, what happens in California will affect us all. While much of the housing may be covered by Insurance, this added hit on the insurance industry will be paid for by all of us with increased insurance premiums on our homeowners policies. These policies have already risen substantially in recent years and the reality is that insurance has an arrangement that they are connected in case of disasters. No insurance companies could cover all these loses without such an arrangement. Premiums in some areas like Florida, and I suspect California, are now so high, often over $1000 a month, that some can no longer afford these premiums. If some decide to eliminate insurance, that makes a smaller pool and again increased premiums.

Some insurance companies are actually exiting certain markets as they become too risky to provide insurance, this is already the case in some areas of California, due to prevalence of fires. Flood insurance is now mostly provided through some sort of Government program.

While we see the cost of housing replacement, then there is the infrastructure that has been damaged, much of this is uninsured and will be replaced by FEMA or extra money in the form of disaster relief. The reality is that, while we are often touted as the richest country in the world, it seems that if we subtract the debt from the assets, much of the country is broke. This will require more spending, more debt, another loss of the purchasing power of the dollar through inflation.

I suspect that we will soon see the insurance industry begin to reevaluate who they insure much more closely. We can expect they will begin to actually look at properties and possibly refuse to insure some if they look too risky. This will be much more likely in hurricane, tornado, flood and fire prevalent locations.

In one way or another we will all be paying for what happens in other parts of the country.

World already in midst of global war.

 POLITICAL AND ECONOMIC WAR UNDERWAY

MAJOR POWERS STILL USING PROXIES FOR MILITARY WAR

We have been hearing warnings about WW3 for some time, possibly so much that many have discounted this reality as just so much political noise. While the major nuclear powers are not yet in direct military conflict, they are in the midst of political, economic and proxy military conflicts for some time now.

The Ukraine/ Russian conflict is the best example, this war has been going on since 2014 and possibly longer. It has been a calculated effort by NATO at the direction of the USA to contain and weaken Russia as a economic, political and military power. It has been decades of pushing the narrative that Russia is to be feared as a threat to western Europe and the United States. While Russia was not an enemy of the United States, some wanted an enemy to solidify political opinion, they have succeeded.

The emergence of China as a global economic powerhouse has resulted in a similar narrative, but so much of the west is dependent on goods imported from China that there is conflict on how far to go with this hostile action against China. Without China's manufactured goods the inflation rate in the west would certainly double or more and create economic hardship in incalculable ways. While western Europe is suffering dramatically by the curtailment of access to Russian energy, a curtailment of China's goods would be devastating to the whole western world.

In the middle east there has been perpetual war since 1991 mostly in an effort to keep the region in chaos and disorganized and to guarantee access to the oil in the region. 

Then there is the political and economic war focused on Georgia, Moldova, Hungary, Romania, Slovakia, Austria, India, Pakistan and other Central Asian nations in an effort to peel them away from a neutral or  Pro-Russian position. It is ongoing and not diminishing.

While NATO and other alliances support this effort, the United States is the big funder of all these efforts. With over 750 foreign military bases in 80 countries, it has caused the United States to become so overstretched that it has contributed to a debt of over $37 Trillion and growing quickly. Dollars have buying allies and supporters, will they still be allies when the gravy train ends?

The U.S. has in effect wagered its future on winning this global conflict one way or another. The ability to create dollars out of thin air and policies that have forced much of the world to accept these depreciating dollars has been the cornerstone of this whole endeavour. In recent history the dollar was involved in over 80 % of world transactions, it has recently fallen to just 52%. Foreign holders of U.S. debt, competitors and allies have been slowly but steadily been liquidating their U.S. debt instruments and moving to do business in their own currencies. 

While the U.S. can still use sanctions and pollical maneuvering in an attempt to control the world,  it is losing this dollar effort by the policies that are undertaken from inside the country, not from foreign efforts alone. 

The reality that China, Russia and now Iran have formed an economic and military alliance because they all fear that they must unify to survive the threats to their existence, is an indication of the futility of the present U.S. policy. Continuing this policy will lead to economic collapse or nuclear disaster. 

 

NATO chief tells members to prepare for war.

 RUSSIA UKRAINE TRADE ATTACKS ON ENERGY INFRASTRUCTURE

RUSSIA  ADVANCES WEST EVERY DAY

Ukraine has used long range missiles to attack Russian oil terminals while Russia is attacking energy, both electric and oil facilities, in Ukraine. All the while, Russia is advancing at an accelerating rate all along the front in eastern Ukraine. It can be expected at this rate Russia will soon have overcome most of the major defensive positions of Ukraine that have been built in the last 10 years.

It is reported that there is also an electronic attack on Russia's internet that may be orchestrated by some western country, if so, maybe we will soon see reprisals that will affect more than Ukraine.

It is estimated that Ukraine has lost over 50,000 soldiers in the Kursk offensive and continues to send more troops, often drawn from the front.

Zelensky says he will not conscript younger Ukrainians unless the west sends more weapons.

It is also reported that Ukraine's losses have now exceeded 1 million dead.

This conflict will soon have been going on for 3 years, while the NATO keeps threatening, it is unlikely they could muster an army to enter the Ukraine conflict. With the social unrest already at a high level any such move would most likely trigger near civil war conditions. 

German opposition leaders are embracing reopening pipelines for Russia gas. The German manufacturing sector, once the largest and most advanced in the EU is crumbling by the day due to energy shortages. 

Slovakia and Hungary are already in open revolt of these policies that are destroying their economies, Austria and Romania are not far behind. Huge demonstrations are occuring in Romania after the court cancelled elections because the opposition to EU policies won. 

This Ukraine war is putting a strain on the EU, NATO and one might expect a revolt against U.S. leadership in the future. It is likely that the whole European community will be suffering from the effects of this conflict far into the future.

A brief history of money.

A BRIEF HISTORY OF MONEY

Money, we are all familiar with it, most want more, some to the point of  excess. It has been described as the, "Root of all Evil".  Realistically, we do need a certain amount, but I would like to talk about a simple brief history of Money.

Originally, most financial transactions were a form of barter,"I'll trade you a goat for that woven shirt that one of your wives made". Or,"I am tired of goats, how about we trade for some of your sheep". This all worked out well and good, but eventually someone got the bright idea of converting wealth to some form of exchange.

There is some record of salt being a form of exchange, or round stones with holes,  but most items were quick to lose their value when someone either found a pit with enough salt to flood the market or a method to mass produce stones with holes.

Eventually they settled on gold and silver as a form of money. Early records show that, as early as 2150 BC, the Shekel and Talent were used in the middle east, These were measures of weight,  A shekel was .36 of a troy weight oz. A Talent was equal to 60 manehs and 3000 shekels. This standard of weight was used by Egypt, Babylon, Phoenicia, Greece, Persia etc.  The ratio was 15 shekel's of silver = 1 shekel of gold.  Everyone had a balance scale to do business.

Finally, as governments grew and became more sophisticated, the minting of money began. This consisted of coins which were of a standardized weight, usually embossed with the image of  the King or individual in power at the time. It made trade much simpler and  must have caused a recession in the scale business.

As is usually the case, it did allow for some skulduggery, clipping and shaving of coins was known to happen. Then Kings sometimes made the coins smaller with the same designation. This may have been the first form of Government endorsed inflation.  "Honey, were did we put that old scale?"

Interestingly, the size and weight of coins varied over the years, but the ratio of gold to silver was fairly constant from 500 BC up to the 20th Century.

Biblical  times-  12-1             Rome          12-1         Europe     0-1492        10-1

Early Greece      13-1             Early Japan  8-1                          1492-1834   15-1

Alexander          10-1             Early China  12-1        England                       16-1

The United States settled on the ratio of 15-1  The Constitution stated that all money was to be gold or silver coin.

O course, we have been talking about gold and silver coins. What about paper money?

In medieval Europe, gold and silver was the medium of exchange. When someone had a little more than needed for survival, they often placed it with a Goldsmith, who had a natural need for security in his business.  He would account for their items and give them a receipt.  The Rothschild's started out this way.  Humans sometimes being a little lazy, and not too careful about things, began to exchange the receipts for other goods and services and leave the gold with the goldsmith.  Goldsmiths, who were a little sharper than the average person of the day, soon realized that his receipts were as good as gold, and no one knew how much gold he really had stored for people. He was able to purchase Real-Estate, finance explorers to the new world and many other endeavors with his own receipts that did not represent gold in his possession. I could expound forever about how they used this power, but I will resist.

There were many known instances were these early bankers got a little too greedy, rumors circulated  that there was more receipts than gold, and a run for their gold started.  When they could not produce the gold,  he might have been found hanging somewhere.

Remember, Politicians and Governments always take note of a good idea to increase their power and wealth.

Early paper money was a receipt for a weight of gold or silver, In the USA. a silver dollar was .7734 troy oz. of silver.  20 silver dollars could be exchanged for 1 Oz. troy of gold, a $20 gold piece. This was a ratio of 15-1. I personally remember silver certificates, which were supposed to be redeemable for 1 silver dollar. Up to 1934 you could exchange a $20 bill for a $20 gold coin. The US dollar had the reputation of being, "as good as gold". The gold-silver ratio today is 72-1.

In 1914, with passage of the Federal Reserve Act,  money no longer represented an asset, but would now represent Government debt. A promise to repay by the government.

In 1934, President Franklin Roosevelt, by executive order, ordered all citizens to turn in their Gold Coins in exchange for paper $20.00 bills. Private possession, or exchange of gold was outlawed. When the government decided they had confiscated all the gold they were going to get, they raised the price of gold to $35.00 oz., this was used for trade between countries. Those wonderful paper dollars they exchanged with the citizenry just became worth 43% less than the gold coins they exchanged.  Citizens were threatened with $10,000 fines and 10 years in jail for not cooperating.  Gold ownership was again legalized in December of 1974.

Silver still circulated as coins till 1964,  when they were replaced by alloys with no intrinsic value.

So now all money that exists, has  no intrinsic value, but only the confidence that someone else will exchange goods and services for it. While there are many instances in modern history where that confidence evaporated, so far most people are still willing to accept modern currency.

Currency itself is now in the process of being replaced with electronic currency, Bitcoin, Debit and Credit cards etc.. Endless possibilities, that will make the ancient clippers, shavers and dishonest goldsmiths envious.

originally published Oct. 12, 2015

It appears we are now coming to the end of fiat currency era, that is currency without any real built in value. What will replace it is yet to be seen. Big government would of course love to have currency that is just a digital entry, that they could manipulate, block, or devalue with a click of a computer. It seems some of the world is exploring another option that would be some form of real money. There is one of those age old truths that good money will always drive out bad money. That is true as long as there is an option of good money available. I expect we will seeing the new options in the near future. 
5/8/23

We now see the plan to introduce a central bank digital currency. Indeed, a monetary unit without any intrinsic value, unable to be held personally. It will allow governments to view every transaction, determine what transactions should be allowed, confiscate all wealth with the click of a computer key and in effect give government ultimate power over the people. It will be the end of all freedom of choice in a free market. It will give government the ability to tax, inflate, confiscate and dictate what can and cannot be traded. It will create all kinds of methods to avoid this trap and will be accompanied with the penalties to enforce that this is the only alternative money.

8/24/23

We can expect the unsustainable debt and deficits of the United States, accompanied by the desire of other countries to flee the use of the dollar, to reach a crisis in the near future. It is very likely that it will soon be clear that this debt will no longer find those willing to risk this haven for their real money. We can expect schemes to rescue this situation with possibly forced investment by IRA and 401's into U.S. debt or a sudden crisis followed by the end of this current fiat money system. We expect the cure to be total control of all assets.

5/3/2024

The EU is pushing to get its CBDC launched this year. As the debt situation in most of the western world is escalating many predict some sort of reset of the financial system. It will most likely be preceded by a debt crisis and then the roll out of the promised solution.

9/27/2024

We now see flight from U.S. bonds from countries around the world. It seems that interest rates are now possibly needed to rise to sell this debt. Those liquidating U.S. debt seem to be buying Monetary metal. The answer to shoring up the U.S. dollar and debt market is a balanced budget. With a $2 trillion deficit either raising taxes or cutting spending will cause a economic recession at best.

1/14/25

Will all this speculation end in one week?

 WILL HE OR WON'T HE, CAN BECOME HE DID OR HE DIDN'T

THE REAL DEALING WILL NOW BEGIN

It is now one week until the inauguration and the presidency of Donald Trump will begin. All the speculation can soon end, we can expect a whirlwind of news out of Washington. Then we can shift to second guessing and condemnations about Trump's actions.

We can expect on day one that Trump will sign executive orders reversing every executive order that is reversible, signed by Joe Biden. It is becoming an American tradition. 

We can expect the firing of all the Federal attorneys appointed under Biden, again another new American custom.

We can also expect the introduction of a lot of legislation. 

There will be a marked difference between the first and second Trump terms that in term # 1 Trump had no idea who he would nominate or appoint to key positions. He hoped that the ex military generals were all patriotic picks that would help him move the country in a new direction. The reality was they were just more bureaucrats who felt their role was to move the President in the direction chosen by the bureaucracy. He now knows many of the real players in Washington and the direction they want to push him into going.

Hopefully a new war will not break out in the next week.

We should expect the border will be number one priority, it had better be, or Trump will get lots of criticism from his supporters.

Kellogg is talking about 100 days for a resolution of the Ukraine conflict, at the rate of Russian advance, that conflict will be very ripe for a resolution in that time.

The middle east is the most nasty problem, very complicated, but there are indications that Iran may be ready to move in a new direction and Israel has realized that destroying Iran is not likely to happen. An end to the Ukraine conflict could add cooperation from Russia and China in bringing about a solution to this long lasting crisis. There is still hope that a new administration can get many to move to a better place.

Russia and China can be expected to be around for a long time and cooperation and coexistence will be the only real choice in avoiding a disaster for everyone, hopefully Trump understands this reality.

All the talk of tariffs on much of the world is likely just a basis for new negotiations, with much of the world. A tariff war will only end badly for everyone.

The FBI and CIA need a rebranding, the FBI needs to focus on investigations in interstate matters and the CIA should be an intelligence gathering agency rather than a unregulated military organization. 

Greenland and Panama is again a negotiating beginning that some changes in the existing order can be had, but in a peaceful negotiated cooperative way.

So, in one week we can end all the speculation and then criticize or praise the real actions, I expect there will plenty of both.

Trump security doctrine, Monroe 2.0?

 IS TRUMP CONSIDERING A NEW GLOBAL SECURITY PACT?

ACKNOWLEDGING AREAS OF INFLUENCE

One must wonder what is behind Trump's references to Greenland, the Panama Canal and now Mexico being run by the drug cartels. If indicates that Trump may be envisioning a new security arrangement that would have the United States focusing on North America and the waters in that orbit. It would possibly be an awareness of the limits of U.S. power to control the world.

Trump has also voiced his opposition to Russian and Chinese warships in adjacent U.S. waters, does that mean that some sort of arrangement could be made to set up recognized areas of influence. Would the U.S. be willing to stop sailing warships through the straits of Taiwan and the south China sea. Would the Pacific west of Hawaii, the east coast of Russia, the Black sea and the Baltic Sea be void of U.S. warships. 

If the citizens of Greenland could have a referendum to become part of the United States, would that apply to Russian oblasts that are now considered inside Ukraine's borders.

As of yet, it is unclear where all of this going, but the reality is that the United States is not likely to be able to afford troops stationed in over 100 counties and be involved in controlling every part of the globe.  It could mend its financial insolvency and enhance its security if it focused on the security of its own neighborhood, essentially North America.

While no one is suggesting that the United States is going to withdraw inside its North America fortress, the reality is that the U.S. is at war with Russia, over NATO expansion, is threatening war with China and is debating attacking Iran, that is recipe for disaster on a global scale. How can the world step back from this precipice of global disaster?

Those who still believe that it possible to control world events with U.S. military power are living in a delusional past. I suspect that all of the major powers of the world recognize that some new arrangement is going to be necessary to avoid catastrophe. It will require a recognition and respect for the security concerns of all and a willingness to cooperate and co-exist for mutual prosperity. 

Arctic. the new Frontier.

 EVERYONE WANTS A PIECE OF THE ARCTIC

IT IS EVIDENT THAT IT WILL BE THE NEW LAND OF OPPORTUNITY

Everyone is amazed at talk about Canada and Greenland. The Arctic may soon supersede events in the middle east and Ukraine as the most important areas in the coming decades. The Arctic shoreline is claimed by 8 countries, Russia, 53%, Canada, 40%, Denmark, Finland, Iceland, Norway, Sweden and the USA. Continental EU nations and most of the world, do not have any claims on this, until now, uninhabitable land mass.

It is all about the prospects of climate change and the reality that if this change continues, these lands will have their mineral and their natural resources available. While most western nations have adopted the idea of attempting to reverse climate change by deindustrializing their economies, Russian scientists have had another view. Their opinion is that while carbon emissions are part of the climate change phenomena, it is a minor player with sun spot activity, pole shifts and other natural changes that leave the ability of man to stop these changes irrelevant. Their plan is to adapt to the changes and the Russian government has been working in that  direction for years.

It seems that western countries may also have belatedly come to that conclusion and thus the increased focus on the new Arctic frontier.

Much of the Arctic is governed by International law and the Arctic council which has all the above 8 as members. so far these rules and negotiations have been friendly and cooperative.

At this time we have "Territorial sea" which is 12 miles and has full sovereignty of sea, land and seabed by the adjoining country.

Then their is the "contiguous zone" that is 24 miles and gives the controlling country the right to enforce laws, considering immigration, customs and sanitary control among other rights.

Then there is the "Exclusive economic zone" which extends 200 miles and give the exclusive right to explore and extract from the water column and the seabed.

The rest is considered the domain of mankind and also international sea travel is protected by a sea treaty.

Russia, most likely due to their experience in the Arctic, is way ahead of the rest of the world in taking advantage of their majority position. They have built the biggest and best nuclear powered icebreakers and also portable nuclear power plants that can be moved to where needed, they are already doing shipments through the Arctic sea that has shortened the routes to Europe and China by as much as 40%.

Some of these countries, do not have the resources or the technology to take advantage of their position and may be forced to take on partners to be able to develop their resources.

Russia has already partnered with China in developing sea routes and also will be able to assist in refining of certain metals and manufacturing needed tools and equipment.

There is no doubt that the Arctic is going to change the geopolitics in the very near future.