Daily Digest

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Daily Digest 5/15 - It's "Death By A 1,000 Knives” For Farmers, America’s Never-Ending Oil Consumption

Sunday, May 15, 2016, 10:25 AM


Life On The Edge (Nate)

Today we’re going to look at the real-world economic pain that so many people experience in daily life. Some of this will be hard reading, but it’s important. Reading it, you will better understand what is going wrong and how badly we need solutions. You may also come away with a better idea of the direction this country is headed if we don’t see real change in the near future.

In College Essays About Money, Echoes of Parents’ Attitudes (jdargis)

Each year, I put out an open call for college applicants to send in essays about money, work, social class and related issues that they’ve submitted to undergraduate admissions offices. This year, we received 231 of them and enlisted Ralph Johnson, senior director for college success for the Democracy Prep public schools network and a former admissions officer at Brown University, to help pick the four that we are publishing. We pay the four writers as we would freelancers.

MONEY TALK: Retirement calculators are a wake-up call for undersavers (jdargis)

A recent column about private student loans prompted financial aid expert Mark Kantrowitz to reach out with some additional advice for people who co-signed student loans for someone who has stopped paying. Although private student loans don't have the same rehabilitation options as federal student loans, Kantrowitz encourages anyone in this situation to ask the lender, "What are my options?" and "Can you remove the default?"

America’s Never-Ending Oil Consumption (jdargis)

During the 1970s, American leaders were forced to recognize for the first time that the nation used too much oil. In the late 1960s, the United States appeared to be reaching its geological peak of production. New environmental restrictions also limited the extent of production. Feeling the shrinking domestic supply and growing consumption demand, especially as his reelection battle was looming, President Richard Nixon lifted previous import prohibitions. Between 1970 and 1973, oil imports more than doubled, reaching one-third of all usage.

Forget the Saudis, Nigeria's the Big Oil Worry (jdargis)

The Niger Delta Avengers have certainly been busy, forcing Shell's Forcados terminal to shut in about 250,000 barrels of daily exports; and breaching an offshore Chevron facility in the 160,000 barrels per day Escravos system. In April, ENI had to declare force majeure -- letting it stop shipments without breaching contracts -- on exports of its Brass River grade after a pipeline fire.

Underwater discovery reveals 14,550 year-old Florida mastodon hunters (jdargis)

Another crucial piece of evidence from Page-Ladson has to do with the slaughtered mastodon. It’s not clear whether humans killed the mastodon or simply scavenged a dead body, but markings on the bones and tusks show clear signs of butchery with the stone tools preserved at the site. Careful analysis of the sediment layers in the lakebed revealed that the sinkhole was once a pond, likely a popular watering hole for migrating mastodons—and the hunter-gatherer humans who followed the herds. As the researchers put it, these humans were fairly sophisticated hunters, memorizing the seasonal terrain of their prey and possibly even enlisting the help of dogs.

For The American Farmer "It's Death By A 1,000 Knives”- US Farmland Values Plunge Most In 30 Years (reflector)

Agricultural land values in the Seventh Federal Reserve District fell 4 percent from a year ago in the first quarter of 2016—their largest year-over-year decline since the third quarter of 2009. Cash rental rates for District farmland experienced a significant drop of 10 percent for 2016 compared with 2015—even larger than the decrease of last year relative to 2014. Demand to purchase agricultural land was markedly lower in the three- to six-month period ending with March 2016 compared with the same period ending with March 2015. Moreover, the amount of farmland for sale, the number of farms sold, and the amount of acreage sold were all down during the winter and early spring of 2016 compared with a year ago. Nearly two-thirds of the responding bankers expected farmland values to decrease during the second quarter of 2016, with the rest expecting farmland values to remain stable.

The Ruined Neighborhoods Burned by the Alberta Wildfire (jdargis)

After a week of wildfires raging through the town of Fort McMurray and the surrounding area, more than 500,000 acres of forest and 2,400 buildings have been destroyed in Alberta, Canada. Rachel Notley, Alberta's premier, said that 90% of Fort McMurray remains intact, though several neighborhoods were complete losses. Reporters were recently allowed in for a look what the wildfire claimed, and what survived. While the last fires in town are put out, and infrastructure repaired, more than 80,000 residents will have to wait at least another two weeks before they can return.

Gold & Silver

Click to read the PM Daily Market Commentary: 5/13/16

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."


thc0655's picture
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1744
Rogue waves are real and The Big One is on the way


It is the stuff of legends and lore dating back through all of recorded history, of sinking ships and sea monsters, of tall tales and tragic deaths. The problem was obvious; any credible witness to a rogue wave usually didn’t survive the rogue wave, thereby relegating the actual phenomenon to the looney tunes category by the so-called ‘experts’.

In an authoritarian culture only the authorities can declare something ‘real’ regardless of how much evidence has been previously offered. It took an actual ‘scientific’ measurement in the North Sea off Norway on New Year’s Day, 1995 aboard the Draupner platform to convince the scientists (aka the authorities) there really was such a thing as a rogue wave.

The charted output of that instrumented event, described as the Draupner wave, is seen below and clearly indicates an extreme aberration, a bolt of lightning out of the blue if you will, a single wave easily twice the average height of the largest waves and three to four times the average height of the smallest...

Measured from the trough to crest, the Draupner Wave was nearly 25 meters/84 feet tall.

Since the impact force of a wave is an exponential function of its height, you can clearly understand why no modern ship is designed to survive a direct hit from a wave of this magnitude. 15 meter/49 foot waves from trough to crest is the current design standard, while the Draupner was nearly 25m/82ft tall, thus the reason for rarity of eye witnesses to these events. The only reason the measuring device, an on-board laser, survived to tell the tale was because it was secured to a gas pipeline platform anchored to the sea bottom and suspended above this monster wave...

So……aside from being a mildly interesting subject to some, and an even greater fascination to those of us who harbor an inner geek, why am I writing about rogue waves?

The answer is simple……and once we overcome our own cognitive dissonance, glaringly self evident. A socioeconomic rogue wave is bearing down on us. And no one, regardless of our financial security or psychological stability, will remain undisturbed.

Some will be hit broadside and succumb quickly, battered and beaten to a bloody pulp. Others, more prepared, resilient or just plain lucky, will suffer only a glancing blow resulting more in psychological shock at the near miss than actual physiological damage to life and limb.

But for the vast majority of us, and by ‘us’ I mean billions of my fellow humans worldwide (not to mention an even greater number of nonhuman creatures) for better or worse, what is about to unfold will change our lives forever. And from what I have been able to discern, this is not an exaggeration and might just be a colossal understatement...

It truly is different this time because the volume of the coming rogue wave will encircle the globe. Like a massive tsunami, the ripples and reverberations will be massively destructive and circle the globe many times until its energy is finally dissipated.

Only then, after the rogue has passed and the water receded, will the really substantial damage begin to manifest as cultures and civilizations break down politically, economically and socially. In my opinion this will occur relatively slowlyas governments institute stopgap measures and emergency programs in an effort to halt the descent towards a substantially lower energy level. Think of it as socioeconomic Delirium Tremens.

This will also be the time when the next reserve currency fully emerges from its gestation period and takes its spot at the top. But the old guard will not go quietly into the night and I suspect great wars will be fought during this transition period. One can only hope it doesn’t go nuclear...

Spend enough time in a fear based environment and suddenly there seems to be no way out, since everywhere we turn perceptional impediments block our way. Soon enough we believe the only clear path forward is the path we presently travel, often laid out by others who do not share our own best interest.

Believed to be trapped, apathy and depression soon settle in, further compelling us to seek out alternative methods to ‘escape’ via physical, emotional and spiritual diversions. Obsessive compulsive behavior, including the full gamut of various addictions and ‘isms’, often emerges in those who can see no future and wish to ignore, deny and anesthetize.

Speaking as one who remains clean and sober after 26 years, thus possessing a modicum of credibility on the subject, the key to finding an alternative path is to first acknowledge our paralysis, then making the decision to move beyond. This, of course, assumes we even (wish to) recognize our failure to mobilize in the face of the oncoming rogue wave.

I readily acknowledge a universe of reasons why the coming catastrophe can, and will, be denied or downplayed by those who are certain this could never happen (‘they’ will never let that happen) will assume we are all doomed anyway (what’s the sense, we’re all gonna die) or are simply comfortably numb (don’t bogart that SSRI my friend). In reality there are always a million reasons not to act and barely one or two to do so.

As long as the herd is grazing (relatively) peacefully, from a psychological point of view it is much safer to burrow deeper into the perceived safety of the herd than to strike off on a contrarian path. Within the mind of the denier, the apathetic and the depressed, what is coveted above all else is affirmation from the herd we are doing what is best. First we lie to ourselves and then we seek affirmation from external ‘authorities’ that our lie is in fact truth. And the ultimate authority is the mindless herd...

One thing appears clear to me. You and I have more time than we think, but less time than we need to properly prepare. To paraphrase Ernest Hemingway, the rogue wave will approach gradually, then suddenly. The question is not if you will prepare, but do you have the inner courage to prepare now for a nearly certain event of potentially tremendous power arriving at an unknown time.

You'd be rewarded reading the whole essay, and not just the portions I've included above.

saxplayer00o1's picture
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4260
Central Bankers' Wisdom Faulted as Gold Holdings Surge 25%

Chinese bank ICBC to buy London gold vault

Central Bankers' Wisdom Faulted as Gold Holdings Surge 25%

Bloomberg-9 hours ago
“Firstly, the negative interest rate environment and quantitative-easing policies are reducing the pool of suitable investment options, and making gold less costly ...

Japan PM says majority of G7 leaders agree on need for fiscal steps

Reuters-13 hours ago
Lingering worries about Europe's sovereign debt burdens, slowing growth in Britain and uncertainty about the pace of interest rate hikes in the United States are ...

Bank of Japan Haunted by Diminishing Returns

Bloomberg-13 hours ago
After a record stimulus program from the Bank of Japan, the central bank's inflation target of 2% remains far away and other indicators suggest that Haruhiko ...

How Canada May Cope With Negative Rates: Cash Boxes, Waived ...

Bloomberg-50 seconds ago
Canada's central bank on Monday said financial markets could function even if policy interest rates needed to fall to negative 0.5 percent, citing the success with ...

Uncertainty clouds the outlook for pension funds

Financial Times-21 hours ago
Not even in the depression of the 1930s did policy interest rates and the yield on government bonds turn negative. If market valuations revert to the mean, ...

Japanese Companies Forecast More Strong-Yen Headwinds

Wall Street Journal-5 hours ago
MUFG said it expects a tumble to ¥850 billion in the current fiscal year, partly due to the central bank's introduction of negative interest rates on some reserves.

Bonds Trounce Stocks as Aussie Yield Latest to Drop to a Record

Bloomberg-15 hours ago
s Australian unit, which oversees $14.5 billion. Negative interest rates are “driving bond markets at the present time and basically there's nothing to stop that.

China central bank investigates bad loan data at banks: sources

Reuters - ‎6 hours ago‎
Specifically, the central bank's financial stability bureau is investigating whether any NPLs have been miscategorised as normal loans or special mention loans, referring to debt at risk of default, according to two sources who saw a central bank ...

China's bad debt mountain

FinanceAsia-19 hours ago
One of them is the soaring bad debt brought about by Beijing's massive ... that the size of China's non-performing loans to be at Rmb4.2 trillion, more than triple ...

China's economic indicators point to more weakness

MarketWatch-18 hours ago
This followed 1.37 trillion yuan in bank loans in March, and a record 4.6 trillion ... to battle significant headwinds, including rising debt levels and the economic ...

European corporate debt market could double in five years -BAML

Yahoo News-3 hours ago
Issuance of investment-grade European corporate debt topped 18 billion ... It estimates that the U.S. high-grade credit market expanded from $2.3 trillion to $5.3 ...

South Korean Shipbuilders' Overseas Subsidiaries Wallowing in Debts

BusinessKorea - ‎12 hours ago‎
The debts of those of Daewoo Shipbuilding & Marine Engineering increased by 43.2% to 2.1842 trillion won (US$1.89 billion) during the period while the amount of those of Samsung Heavy Industries soared from 431.2 billion won (US$374.9 million) to ...

Saudi Arabia, Gulf Neighbors Suffer Ratings Downgrades on Oil Slump

Wall Street Journal - ‎May 15, 2016‎
DUBAI—Saudi Arabia and two of its oil-exporting neighbors in the Persian Gulf had their debt ratings cut by Moody's Investors Service, as the slide in crude prices continued to afflict the region's economies. The ratings firm during the weekend ...

Treasury's Teamsters Bailout Ploy

Wall Street Journal-17 hours ago
The PBGC's multi-employer program is already running a $52 billion deficit. The PBGC insures about 1,400 multi-employer pension plans for 10 million workers.


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