Daily Digest

Daily Digest 9/23 - Gold Standard Is Plan B, Economic Black Plague, Rare Earth Exports Banned To Japan

Thursday, September 23, 2010, 10:58 AM
  • Jim Rickards - Gold Standard is Plan B and Revalue Gold at $5000+
  • Rat-Pack Part II Economic Black Plague
  • Wal-Mart's CEO Provides The Starkest Visual Of The Modern Bread Line Yet
  • So Long Summers!
  • China Bans Rare Earth Exports to Japan Amid Tension
  • Stuxnet Bug Targets Iranian Power Plant 
  • Nuclear Waste Worries On St. Lawrence, Great Lakes 
  • British Chip Designer Prepares for Wider Demand 

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Economy

Jim Rickards - Gold Standard is Plan B and Revalue Gold at $5000+ (Davos)

Jim Rickards on CNBC talks about gold, the dollar and their relationship.

Rat-Pack Part II Economic Black Plague (Davos The Narcissist)

The “Part-Time Abolition Release Program” makes up the other 138 days of the year during which time the “American worker” tries hard to fend for him/herself and his or her families.

At best, it is a “Quasi Part-Time Abolition Release Program” for the Corporatocracy Rat and the Globalization Rat have blasted our wages back four decades. We “compete” against someone making two bucks a day. Being an unpaid slave for 227 days and earning 1973 in wages for remaining 138 days birthed the 2 “income” family. Well, for those who didn’t divorce over money problems.

Wal-Mart's CEO Provides The Starkest Visual Of The Modern Bread Line Yet (Davos)

And it's real interesting to watch, about 11 p.m. customers start to come in and shop, fill their grocery basket with basic items – baby formula, milk, bread, eggs – and continue to shop and mill about the store until midnight when government electronic benefits cards get activated, and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher.

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So Long Summers! (Ilene)

Summers was Treasury Secretary when Glass Steagall was repealed. Instead of speaking out against the irresponsible Gramm–Leach–Bliley Act (Financial Services Modernization Act of 1999), he actively supported it. Instead of explaining to the public how Glass Steagall prevented Wall Street crises from spilling over into Main Street for 65 years, he rolled over for Citibank. The repeal of Glass Steagall was not a cause of the crisis, but it allowed the net damage to be far, far worse than it would have otherwise been. And it was emblematic of the corporate takeover of the legislative process. For a fee (campaign donation) you could write your own regulations. How could that ever go wrong?

Energy

China Bans Rare Earth Exports to Japan Amid Tension (SolidSwede)

On Tuesday, Prime Minister Wen Jiabao personally called for Japan’s release of the captain, who was detained after his vessel collided with two Japanese coast guard vessels about 40 minutes apart as he tried to fish in waters controlled by Japan but long claimed by China. Mr. Wen threatened unspecified further actions if Japan did not comply.

Stuxnet Bug Targets Iranian Power Plant (TG)

German security researcher Ralph Langner, CEO of Langner Communications, has theorized that Stuxnet -- a piece of malware that targets computers running Siemens software used in industrial control systems, and can be used to control these systems remotely – is targeting the Bushehr nuclear power facility in Iran.

Nuclear Waste Worries On St. Lawrence, Great Lakes (pinecarr)

Executive Director Jennifer Caddick [of the environmental group Save the River] says there was no public disclosure of the plan---groups found out from a small town Ontario mayor.

Save the River's concerns go beyond this particular case, as well. Caddick says there's no public disclosure process to notify local officials of potential hazardous waste. She also hopes this case will encourage emergency preparedness: more local notification equipment and processes, and more training for first responders, often the volunteers in riverside fire departments.

British Chip Designer Prepares for Wider Demand (jdargis)

In this post-PC era, some analysts say, Intel’s familiar jingle — bummmm, bum, bum, bum, bum — will fade as the central soundtrack of computing. Instead, people will hear nothing, or rather the understated silence that has accompanied ARM’s rise as one of the most important technology companies.

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17 Comments

rjs's picture
rjs
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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...

Rare earth supply and trade implications by Tim Worstall

In brief, the Chinese have just f**ked themselves over if the NYT take on the issue is accurate.

By showing that they're willing to use RE supplies as a political lever they've just made them political for everyone else.

Thus there will be a political insistence that non-Chinese sources will be found.

It will make Mountain Pass' environmental problems easier to overcome, make funding Mount Lynas easier. It'll make it more likely that I'll get my grant to extract REs from the wastes of alumina production (yes, it does work, we just don't know whether it's economic as yet, thus the grant).

Most importantly perhaps, it'll make the politicians concentrate on what's actually important here. REs aren't rare but the ability to separate them is. There are any number of places around the world where I could scare up a few tens of thousands of tonnes of rare earth ores. Really, almost trivially simple.

However, separating them can take thousands (yes, really, thousands) of iterations of boiling them in hot acid. And when you're done you've still got the thorium almost always associated with them to dispose of. So, politicians will have to accept that if they want windmills and electric cars then they're going to have to allow people to play with boiling acids: and they're going to have to find a repository for all that thorium (for it is radioactive, if only mildly so).

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...

When Rickards mentioned that gold isn't going up, that the dollar is collapsing - you could hear the 2 cnbsclowns get winded. Seeing their face - well actually, I would have paid for this clip.

I don't fully agree about the ceiling - imo it'll be capped when the clowns destroying it revalue it.

 

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...

Interesting video clip with Jim Rickards on CNBC, Davos. 

I have to say, one of the things I found most striking about the interview was the absence of ridicule when Jim Rickards talked about gold going to $5,000+ oz, and about it being more a result of the collapse of the dollar than about gold itself.  There were a lot of "wows", and what seemed like expressions of incredulity and concern that it may be coming to that.  But it was more like shock, and like they were having a really hard time comprehending something difficult to comprehend...but it seemed to fall distinctly short of ridicule, to me.  If so, that is a real change!

Maybe another indicator of public perception starting to shift...?

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...
pinecarr wrote:

Interesting video clip with Jim Rickards on CNBC, Davos. 

I have to say, one of the things I found most striking about the interview was the absence of ridicule when Jim Rickards talked about gold going to $5,000+ oz, and about it being more a result of the collapse of the dollar than about gold itself.  There were a lot of "wows", and what seemed like expressions of incredulity and concern that it may be coming to that.  But it was more like shock, and like they were having a really hard time comprehending something difficult to comprehend...but it seemed to fall distinctly short of ridicule, to me.  If so, that is a real change!

Maybe another indicator of public perception starting to shift...?

+1. Totally agree, 100%!

Sick how Wal-Mart created this mess (not all but they contributed to it with their aiding and abetting Globalization and our salary competition with workers making 2 bucks a day). Sick how CNBS created this mess (not all but they can't explain what is happening or what happened) so without problem identification there will be no fix.

 

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Peace in our time!

Worries of war between the USA and Iran is over!  Or at least, so says Harry Schultz:

“I’m happy to announce the end of World War 3. The Iran war, which triggered World War Three, planned by the Pentagon and Mossad, has ended, actually before they began. It’s a first in history!

“How do I know this? Follow the money, not the propaganda. Four US banks are to open branches in Iran!...Citibank and Goldman Sachs are among the first applicants! Since Goldman Sachs is the alternate, or behind the scenes US government, as we all know, that name/news assured me of the good news.”

http://www.marketwatch.com/story/exit-harry-schultz-pursued-by-a-bear-20...

 

Also pretty funny coverage by Max and Stacy at the top of the sept 23 show

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...

Sometimes the truth is more terrifying than what we imagine.

Stuxnet Bug Targets Iranian Power Plant (TG)

German security researcher Ralph Langner, CEO of Langner Communications, has theorized that Stuxnet -- a piece of malware that targets computers running Siemens software used in industrial control systems, and can be used to control these systems remotely – is targeting the Bushehr nuclear power facility in Iran.

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...

So to take this to the next level, imagine how much malware could potentially be embedded in the software of various consumer and industrial electronic devices and equipment by the manufacturer of said devices.  Say, a manufacturer in a country with a long track record of industrial and military espionage against the US and other nations.  A country that has no qualms about telling a private manufacturer how to run their business, much less to look the other way while they make "a few minor additions" to the software.  A country that already manufactures a rather large percentage of the world's electronics for consumer and industrial use. 

I'm not saying I know for a fact this is happening, only that I would be surprised if it were not happening on some level.  If hostilities or serious tensions were to break out between said country and the US or other powerful nations, we could experience a whole mess of interruptions in various aspects of our lives.... anything from cellphones not working to malfunctioning utility systems.  Yet another incentive to simplify and build more resilience into our lives.

- Nickbert

r wrote:

Sometimes the truth is more terrifying than what we imagine.

Stuxnet Bug Targets Iranian Power Plant (TG)

German security researcher Ralph Langner, CEO of Langner Communications, has theorized that Stuxnet -- a piece of malware that targets computers running Siemens software used in industrial control systems, and can be used to control these systems remotely – is targeting the Bushehr nuclear power facility in Iran.

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...

Orwellian Doublethink: Collapse Is Recovery

 When the National Bureau of Economic Research  announced, after much deliberation apparently, that the economic recession ended in June, 2009, it was as if the news were broadcast from some other planet.  It is Orwellian DoubleThink at its finest, where a compartmentalized think-tank uses some off-world calculus to come up with a conclusion that flies right in the face of observable reality and real-world experience here on Earth.

Here are just a few of the key stories of the week for those who prefer real analysis to pure propaganda:

http://vinceseconomicblog.wordpress.com/2010/09/23/orwellian-doublethink-collapse-is-recovery/

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...

This man indicated back in 1/10 that an elitist informed him that the dollars would lose 30%-50% in the next 12 months.  Also said that we would not go to war with Iran.  I didn't believe this man at 1st but he was right about this.

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...

I think Mr. Rickards had a brain glitch. His quotes were using the present estimates of M1 (or M2?) to estimate what the "free" market (non-manipulated) price of gold should be now! NOT after the dollar collapses as he says. After it collapses, there is no limit to how high it can go. Anything divide by what approaches zero approaches infinity. Hence the current Zimbabwe Dollar (ZWD) price for 1 oz of gold is $16178475163650.37 (courtesy of http://coinmill.com).

There are two kinds of paper money that man has ever created here on Earth:

  • that which is worthless
  • that which will be worthless

Given the same methods that have successfully destroyed currencies of the past are being employed to destroy the currencies of the present, I don't  see how the dollar (or any other fiat currency) will be an exception to the rule.

Maybe Mr. Rickards knew that would be way too much reality for CNBers to swallow Wink

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...
MarkWB wrote:

I think Mr. Rickards had a brain glitch. His quotes were using the present estimates of M1 (or M2?) to estimate what the "free" market (non-manipulated) price of gold should be now! NOT after the dollar collapses as he says. After it collapses, there is no limit to how high it can go. Anything divide by what approaches zero approaches infinity. Hence the current Zimbabwe Dollar (ZWD) price for 1 oz of gold is $16178475163650.37 (courtesy of http://coinmill.com).

There are two kinds of paper money that man has ever created here on Earth:

  • that which is worthless
  • that which will be worthless

Given the same methods that have successfully destroyed currencies of the past are being employed to destroy the currencies of the present, I don't  see how the dollar (or any other fiat currency) will be an exception to the rule.

Maybe Mr. Rickards knew that would be way too much reality for CNBers to swallow Wink

+1. I think he may be relating all this to a return to a gold standard. I don't see that. Maybe China will tie it loosely to something weighted. But not the US unless forced to do so.

But as far as how high it'll go - yup divide by 0 or something higher if they re-value a new dollar before we visit Zimbabwe. 

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...
nickbert wrote:

So to take this to the next level, imagine how much malware could potentially be embedded in the software of various consumer and industrial electronic devices and equipment by the manufacturer of said devices.  Say, a manufacturer in a country with a long track record of industrial and military espionage against the US and other nations.  A country that has no qualms about telling a private manufacturer how to run their business, much less to look the other way while they make "a few minor additions" to the software.  A country that already manufactures a rather large percentage of the world's electronics for consumer and industrial use. 

I'm not saying I know for a fact this is happening, only that I would be surprised if it were not happening on some level.  If hostilities or serious tensions were to break out between said country and the US or other powerful nations, we could experience a whole mess of interruptions in various aspects of our lives.... anything from cellphones not working to malfunctioning utility systems.  Yet another incentive to simplify and build more resilience into our lives.

Whoa.  This is worth chewing over.  Very nice, Nickbert!  Scary, but a worthy point...

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edit

edit

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...
SagerXX wrote:
nickbert wrote:

So to take this to the next level, imagine how much malware could potentially be embedded in the software of various consumer and industrial electronic devices and equipment by the manufacturer of said devices.  Say, a manufacturer in a country with a long track record of industrial and military espionage against the US and other nations.  A country that has no qualms about telling a private manufacturer how to run their business, much less to look the other way while they make "a few minor additions" to the software.  A country that already manufactures a rather large percentage of the world's electronics for consumer and industrial use. 

I'm not saying I know for a fact this is happening, only that I would be surprised if it were not happening on some level.  If hostilities or serious tensions were to break out between said country and the US or other powerful nations, we could experience a whole mess of interruptions in various aspects of our lives.... anything from cellphones not working to malfunctioning utility systems.  Yet another incentive to simplify and build more resilience into our lives.

Whoa.  This is worth chewing over.  Very nice, Nickbert!  Scary, but a worthy point...

Seriously.  Who needs an EMP if you hae that kind of malware which can be focused so much better?

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...

Now the following articles appear to involve malware installed on devices after and not during manufacture, but the general concept is the same.

China Bugs and Burgles Britian

http://www.timesonline.co.uk/tol/news/uk/crime/article7009749.ece

Spy's USB Drive Caused Worst US Military Breach

http://www.tomshardware.com/news/military-spies-espionage-department-def...

 

As VeganD implied, it sounds like an ideal approach for both espionage and asymmetric warfare.  That's why I'd be surprised if China or other nations aren't already doing it, or at least intentionally designing certain flaws to make installing malware easier later down the line.  Once used it wouldn't take long for affected industries and nations to catch on, but one could do a lot of damage in a short amount of time.  And if a global economic crash and waves of protectionist economic policies kill your export industries, seems to me the potential gain in information or damage to one's adversary outweighs the additional damage to one's export industry.  One would hope there are mitigation or counter strategies and plans in place, but who knows?

- Nickbert

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...

We had a short discussion on savings the other day.  Here's another take by Laurence Kotlikoff:

http://www.bloomberg.com/news/2010-09-24/poor-kid-on-block-fleeced-by-the-elderly-commentary-by-laurence-kotlikoff.html

Quote:

One of the supposedly good things produced by the Great Recession is a change in the spending behavior of the American public. The personal savings rate is now running at 6 percent -- three times higher than in 2007. Do a Google search on the term “personal saving” and you’ll find articles applauding Americans’ newfound abstinence.

When I read these stories, I cringe. The personal savings rate, like the federal deficit, is a made-up, accounting measure, with no economic content. Its value and changes through time are entirely dependent on how we classify things. For example, counting Social Security contributions dramatically raises the personal savings rate, but lowers its recent growth.

Quote:

The right saving rate to consider is calculated by dividing total national savings by total national income. National saving is a label-free measure because it references physical concepts. It’s the value of a country’s net output minus its consumption.

The national savings rate provides an entirely different picture of America’s behavior with money. As the chart shows, national saving has, for the first time since the Great Depression, gone negative.

You read that right. Instead of adding to our seed corn, we’re eating our existing stock!

Quote:

Fortunately, foreigners, including governments, are investing in the U.S. They see good investment opportunities that we aren’t capturing. The amount of foreign investment coming, on net, into the U.S. constitutes our current-account deficit. Our failure to save explains why this gap is so huge.

Unfortunately, foreigners could turn off the spigot. The Chinese government has started to do so. Since July 2009, it has been gradually selling its holdings of U.S. Treasuries. Other countries may follow suit, leading to the great U.S. bond bust that many fear.

Personal Consumption

So, why aren’t we saving? The answer is personal consumption. Fourteen percentage points of the 16 percentage- point decline in the national savings rate since 1965 reflects a higher rate of personal consumption. A higher government consumption rate explains the other two percentage points.

Quote:

If personal consumption is the main villain for the long- term savings rate decline, whose consumption has risen? The answer is the elderly. Over the past five decades, our policy of taking ever larger sums from young savers and giving them to old spenders has more than doubled the ratio of average consumption of oldsters to average consumption of youngsters.

So, we oldsters can pat ourselves on the back for being so frugal.  Now its our turn to feed at the trough.  C'mon you whippersnappers, pony up.Innocent

Doug

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Re: Daily Digest 9/23 - Gold Standard Is Plan B, Economic ...

Great observations from Kotlikoff, Doug!  Thanks for sharing.

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