Why are there stinkbugs?

Why are there stinkbugs? I don’t remember these insects invading my house five years ago. I’ve heard of invading species. This definitely is one. All winter I found them crawling around my home. “Don’t squish them! They stink,” my wife warned. So I’d gather them up and put them outside. I decided to do an experiment and see if once released outside they would return so I thought I would paint fluorescent numbers on their backs. My wife thought this would be a cruel scientific experiment. So I decided I’d do it anyway and just not “publish” (tell her) the results. My wife doesn’t approve of my scientific experiments. However, I was in for some surprises. This is what I learned. Stinkbugs are stupid. Most insects have some awareness that I’m pursuing them and they will try to flee. Stinkbugs just keep walking in the same direction unless you actually touch them with a fluorescent dipped paint brush. So to capture them I’d put a piece of paper in front of them and they’d walk right on to it. It took a while, they move slowly. Which is odd because they also fly. Which I didn’t realize until I tried numbering them with that fluorescent paint which made my experiment super challenging. As in impossible. So I just observed them and forgot about the paint as they seemed to get into my house so easily there wasn’t much point to my experiment. I’m sure 100% of the put outside SB’s came back inside. Right away actually. If irritated, a stinkbug will set off like a launched missile, streaking away with an angry buzzing sound like a German V 2 rocket, they called that the buzz bomb cause the motor made a buzzing sound. But the stinkbug looks uncomfortable as soon as it takes off. “Whooee I’m flying! I didn’t know I could do this. My goodness I’m going fast. It’s hard to change directions. What if I run into something? I’m going to run into something, I just know it I’m not lucky. OK I’m walking again! Whew!” The stinkbug walks slowly. It reminds me of a Tri-Met bus. I am always seeing the back of busses and then passing them, meaning they drive slow and I drive normal. And don’t you hate it on a four lane road if you’re the one that gets caught behind the bus and everyone is passing on the left and they won’t let you in so you have to stay behind the bus? Wait, this was about stinkbugs. Now that it is spring, all the stinkbugs that camped out in my house all winter are going outside. They seem to know the sliding glass door is the exit because they gather there in the morning and wait for me to open the door. I’ve found if I slip my foot behind them they will fly out instead of making me stand by the door for half an hour as they laboriously climb over the giant frame of the sliding glass door. “Me fly over an obstacle instantly when I can take my time? That flying stuff is for the birds.” And for that matter where are the birds? Why aren’t they eating these bugs? Probably because they stink. Maybe we need to import the Chinese Stinkbug Eater Bird. Of course these would probably prefer eating our bees and have no natural enemies so facing starvation and the loss of apples, we’d have to import the Chinese Stinkbug Eater Bird Eater Cat. Which would probably start eating our cats. Invasive species are like ivy. It’s a good thing ivy isn’t invasive. There’s so much of it! Speaking of which, all the stinkbugs that didn’t make the winter decided to end their lives in mass graves of their own choosing, meaning they died in all my opaque light fixtures. It’s sort of depressing to look up when you turn on the light and see 20 or 30 stinkbugs lying dead and mummified at the bottom of the light fixture bowl. I’m tempted to clean them out but I’m curious as to how many I could collect over a period of several years. My wife doesn’t condone my scientific experiments.

We Have the Euro, Why Not the Opec?

The US Dollar is currently the world's reserve currency because Opec insists on receiving dollars for the oil it sells. This has artificially propped up the value of the dollar because all other countries have to buy dollars to purchase oil.

Those countries which have positive oil reserves, like Norway, or now Brazil that lives on ethanol and doesn't import oil, tend to have stable economies with solid reserves and a valuable currency, while those who are energy importers must rely on manufacturing to create dollar reserves to stay financially strong, like China. And America finds itself constantly losing jobs to foreign countries because its currency is propped up by the scarcity and value of oil itself, so we are in a depression, so now the Federal Reserve is creating more dollars and loaning them out at super low interest rates to get jobs going back in our country again.

But recently China, and now the entire G20, has expressed worry about the dollar's value in the future because the Federal Reserve has increased the amount of dollars in the world by $15 Trillion made out of thin air during the past year. The whole world worries their dollar savings, all the T Bills owned by China for example, will deteriorate in value to less than half its current purchasing power, because the Fed is creating so much new currency. Even Opec now complains that the price of oil should be kept at $100 a barrel, a new "fair" value.

As a result, the G20 is calling for a super currency, a basket of currencies that would become the new reserve currency. But unless that currency is backed by something of value, as the dollar now is essentially backed by oil, no one will feel that currency has any value.

So I propose that the new super currency to be created be called the Opec, and that it be valued at the level of 100 Opecs equals one barrel of sweet light crude oil on the dock of an Opec country, ready to ship.

Why not ask Opec to create that currency thus replacing the dollar as the world's reserve currency? The Opec could be created in the same manner the Euro was created.

But because the Opec would be backed, essentially, by the sum total of all the oil left in the world, it would become similar to a gold backed currency because there is something real that it equates to, i.e. 100 Opecs equals one barrel of oil. And, if you think about it, what this currency really is, is a money based on therms of energy, (more later on that).

Everyone in the world would know that the Opec will have value in the future, because oil is getting more and more scarce. As oil becomes more scarce, other countries buying the Opec would find that they have to pay more of their own currency to acquire the Opec. The exchange rate would be set by the market, and initially the Opec would probably be equal to the US Dollar thus giving Opec their $100 barrel an oil number to start.

But what if the Federal Reserve creates another $15 trillion out of thin air when they should only really be increasing the supply of dollars by the percentage growth rate of the US Economy? Well, in all likelihood, the Opec would trade to $2 or even $3.

The only way for more Opecs to be created would be for more oil, or its equivalent, more energy, to be discovered. Which brings us to the fact that the Opec would essentially be a currency equivalent to the cost of energy. And my argument is that with an energy backed currency, we would be halfway between a precious metal backed currency, (awkward) and a paper currency backed by nothing, (dangerous) and this would be a very good thing.

Why is gold backed currency awkward? For years, peopled argued against gold backed currencies, because it seemed a silly waste of people's time to go dig up a scarce metal from the ground for the sole reason that everyone knew gold was hard to find so therefore they all agreed it had value and they would go to work today for a piece of it, then put it under their mattress and sleep well at night, knowing that in the middle of next winter it could buy them food or water or a lump of coal. Go figure, you'd think people would only work for food or water or coal, but those are hard to store and carry around to buy stuff, hence the need for money, gold, and hence the need for paper money which is light, cash, and hence the development of the entire banking system, electrons created out of thin air and only as valuable as you trust the keeper of the bank, (I don't).

But back to gold, why go to all that effort? Why not have all those skilled miners doing something of value? That is a good question, and it is a good argument against gold, but what I propose is, we actually value our money on something that is being dug out of the ground which we all agree does have value? Oil!

With an oil backed currency, everyone could feel safe knowing they have Opecs in their bank account that can be exchanged for a barrel of oil two or five or twenty years from now, well, until the world runs out of oil.

And in the meantime, we could progress in our development of alternative energy, so that in the future we could have a currency based on a therm of energy, so that when a person did some work and got paid, they would know that all the energy producers of the world would give them one therm of energy in exchange for the therm unit of currency, maybe if solar catches on, the unit of currency in the future will be the Sol.

I like the Sol, in one sense it's endlessly abundant, but humans can't do anything with it now except farm or sunburn. But converted by solar panels it becomes a therm of energy, something we all recognize as being of value, and something easily measured, and therefore a unit of exchange, which is all money really is, a unit of exchange that everyone agrees on.

But because solar power is not here yet and we need to learn to walk before running, and since we can all agree that during the next twenty years oil is going to be pretty valuable, why not create the Opec?

Could more Opecs be created, by a scientific breakthrough that made energy half as expensive, like a solar breakthrough? Yes, absolutely, but wouldn't that be preferable to the Federal Reserve instantly creating nearly $15 Trillion out of thin air this year alone?

In fact it would be far preferable, because for the Opec to lose value, energy would have to get cheaper, which would mean in essence that our technology was making it cheaper for everyone to live, meaning, prices would drop as technology improved, just as the price of computers has constantly dropped as discoveries have been made in computing. And I haven't seen anyone complain about that.

The Opec. A good idea if I say so myself.

G20 Super Currency? Don't forget silver

When I began this blog, I recommended silver. At that time it was around $9. It has quietly risen to 13 plus in 3 months and I have not lost faith in it.

China is pressing for a world reserve currency and cautioning the US not to borrow so much money that they devalue the US Treasury bond.

Yet at the same time we learn that the Government has rejected GM's plan, and have pushed out Waggoner, GM's CEO. As long as the recession continues, there will be more and more borrowing to have the government spend our way out of depression ala owning GM.

Is the government good at running a private enterprise? Look no further than the post office to answer that question. Therefore, I doubt that the government's intervention in GM is going to come to any good, and only Ford will remain as a viable, independent US auto company.

But if GM goes bankrupt, another wave of layoffs is going to stimulate even looser lending by the FED, who have recently promised more than $1 Trillion in Treasury bill and FNMA backed securities to be purchased this year.

Currently, yields on FNMA backed 30 year securities are around 3.9 percent.

The US consumer, housing and the economy will not recover until 30 year Jumbo mortgages are under 5%. Only then will refinanced homes with lower payments become a source of spending money for the US. This should happen by this fall as the recession continues. By 2010 demand should be raging for everything from houses to remodels to cars and solar panels. Then we should see demand pull inflation rearing its head as the super supply of the dollar causes it to drop in value.

Will the fed tighten in time to rein in the economy, or will the fear of a depression linger so long we have inflation over 10%? I think the fed will stay too loose too long.

Will the world create a super currency? I don't think so, it's in everyone's interest to keep their currency low and improve their economy by selling cheap products to the world markets.

Without a super currency and with an over supply of dollars, I think gold will be at least $1500 by 2010 and silver at least $20. These two metals are already the super currencies that China wants. US citizens are going to vote with their feet as they see inflation occurring and each buy a little precious metals position.

But a flash flood is built one small rain drop at a time, and if enough people buy a "little precious metals position", it is going to push precious metals to new highs. And don't forget penny mining stocks. They are currently the buy of a lifetime. Don't forget, some mining stocks went up 1,600 times in value in the late seventies. And this time, inflation is going to be worse. $500 invested now in CDE, MDW, UXG and especially STVZF, all stocks I own, may well pay off your house mortgage in 4 years.

The Winter Cow

We went hunting for cow elk in New Mexico in January on the Vermajo ranch owned by Ted Turner. I had the honor of taking the first shot between the three of us, my son Louie and friend Bill. A driving snowstorm began on the first morning of our hunt while we were with the guide in his truck at a tire shop in Raton, buying new tires because one had gone flat the previous day. The people from Arkansas who we had dined with the night before had gone on and on about seeing elk and how wonderful the weather was, but that was not to be the case for us as we headed out into four inches of snow on the road and a heavy dump coming down from a windy sky.

We had never hunted here before and had no idea what to expect, but I felt there was a lot of pressure on me to get an elk and get the skunk off the hunt. We'd already missed our first early morning hunt buying tires, and Louie wanted to get home to his wife of less than one year. Adding to the pressure was the fact that we saw a mountain lion, a huge one, just half an hour earlier, and the guide stated that he thought the lion might have pushed a lot of the game out of the immediate area.

That turned out not to be a problem however, the ranch is 535,000 acres, but I was not used to hunting such a large property, so when we spotted a single cow elk browsing in the trees five hundred yards off the road, I didn't hesitate in saying I'd shoot it and help the guide drag it back across two icy streams. That would give Louie and Bill two and a half days to bag two more elk and put us on pace for getting home when we'd planned.

Louie videotaped as we stalked within 240 yards and I shot from behind some brush. I thought our stalk had been successful, the animal was totally undisturbed. One shot with the 338 Win Mag Remington my son's had given me for my 60th birthday was all it took to dump the cow elk. She struggled for less than a minute, then collapsed dead.

It was a long hike to the elk and we had to ford two streams to get there, fortunately both no more than six inches deep. At first I thought I'd shot a nice animal, but when I got closer, I was dismayed to see how old and bony she was. She had one tooth left, and when the guide gutted her, it was apparent there was very little meat on her. However we tagged her and dragged her out.

The next day the butcher said the elk was inedible, that she was diseased and the marrow was white and milky, a sure sign of disease. We called New Mexico Fish and Game because we were worried about Chronic Wasting Disease, but they assured us that the animal probably had a blood worm which made her deaf and blind as well.

So, that was why I was able to get within a couple of hundred yards, she was blind and deaf and trying to stay alive eating with one tooth in a blinding snow storm. I wasn't allowed a new tag, that was my hunt and elk for the year, so as I continued to hunt with Louie and Bill I started to think that all I had done was act as a mercy killer for this poor old cow elk.

It was almost one year to the day since my mother had died, and I couldn't help think of her because she had many of the same problems as that poor old cow. My mother had been unable to eat or drink in the end, and had more than anything else simply wasted away. It was awful to see her suffer and die slowly but there was nothing any of us could do, and to her credit, my mom retained her faculties almost to the last, so each day we had with her allowed some time to recall memories and talk about her life and the world.

But I have to admit that helping that old cow elk leave the world so quickly satisfied a hollow place in my heart that had been carved out by my mother's death. There is a terrible toll placed on loved ones when death is lingering. Each day that goes by might be the last, and all life is placed on hold until the death comes as a release from a painful vigil.

That poor old cow was alone, unable to stay with the herd any longer, unable to see, just grazing on grass in a thicket of trees, making an effort to stay alive long after any reason to live had gone by in previous springs and summers of bearing and feeding young ones.

Maybe I cheated that mountain lion out of a meal. Predators go after the easiest prey. If I did, I apologize to the mountain lion, though I think I saved him in the long run from indigestion and disease himself, so in the end I helped out two animals, though both will never know.

It was a different hunt, but this has been a different year.

Silver and Recommendation Updates

Silver has made a nice move upwards since I originally advised accumulating the physical metal. It is now holding over $13 an oz. on the spot market, and physical silver seems to be demanding a premium of $2 an oz. or more when you can find it. This metal should continue to climb as more and more money is spent by the US Government in an attempt to turn around the economy and we could see silver crossing $15 by this summer. As long as interest rates remain low, there is very little penalty in holding gold and silver, and if inflation takes off again, which it has to sooner or later, gold and silver will continue to climb.

One correction, I don't think the silver/zinc battery is going to make it into the auto industry after all. A Melbourne company has evidently come up with a better battery using less expensive materials, more later when I have information.

Another correction, more information is coming out now on the preferred shares sold to the gov't by various banks. In some cases it has been revealed that the shares are to pay interest and have a date of repayment. Honestly, if this is the case, then why all the secrecy about the terms and cost? Usually people are secretive when they don't want you to know the details of something because you will not have a good opinion of what they have done, so naturally, secrecy breeds suspicion.

Why these TARP actions were not a matter of public record, and why the Treasury Secretary required protection from criminal prosecution, I will never know.

Where did the Tarp Money Go?

I argued against TARP and was upset when it was approved. So far, roughly half the money has been doled out and I did some research as to where it has gone and how it has been used.

There is an excellent report on the internet. It shows who got what so far, roughly 300 billion has been given out. This report is at http://www.propublica.org/special/show-me-the-tarp-money

So we can see who got the money, but how has the money been used? No one knows! The GAO has written a report stating that unless the Treasury steps up efforts to monitor where the money has been used, that in general, the institutions consider the money fungible, meaning it can blend in and be hard to track, and at least one institution publicly has said they won't keep track of its use separately, meaning it could actually be used to pay manager's bonuses.

What? I thought there would be penalties against this? It turns out, according to a fellow blogger in his article on this, http://www.dubrawsky.org/wordpress/?p=172, that a last minute rule change was made by the Oval Office, and that the penalties for paying executive bonuses would only apply if banks sold toxic assets to the Treasury. But if they didn't sell toxic assets, there was no restriction on bonuses, in fact no restrictions on the use of the money at all, and it could be kept secret, and Paulson would not be held criminally liable for doling out the money!

So that explains why Paulson had the Treasury buy preferred stock from the banks instead of buying their troubled assets, because then legally the banks could do whatever they wanted with the money. Which the GAO says they are powerless to find out because the law didn't require reporting, because it was crafted originally to only buy TARP assets, but was changed at the last minute!

So was it changed and the congress voted on it again and no one read the bill the second time around? Or was it approved and then the President changed it? My bet is that no one bothered reading the amended bill and no one caught this enormous loophole because from what I know of the law, the President can't change the wording of a bill, just sign or veto it. Regardless of the mechanism, this borders on the criminal, even if it was all done properly and legally.

Are you upset? I am! This is $300 Billion of our money! And you know what I think happened to most of the money? Here's the trail I suspect. Treasury gives Bank $40 billion and Treasury gets preffered stock, which has no voting rights and no assurance of paying a penny back to Treasury, meaning, if the Bank had given Treasury a couple rolls of Charmin instead of preferred stock, it would have given us something of value!

Bank takes money and buys... Treasury Bills! Safe investments, they loaned it back to us, the people that gave it to them all in a panic to save them from owning toxic assets, (which the Banks were not forced to invest in in the first place mind you, they took a risk and lost, so we, well, we said, oh no that's awful, rich guys can't go broke, and just gave them money).

So the bank invests their $40 Billion at 3% in T bills and that gives them a tidy $1.2 Billion in income. Guaranteed!With safe profits coming in, I'm sure the executives will get their bonuses and salaries! No work involved in the messy business of helping people avoid foreclosure, just one call and the money is safely tucked away with the Federal Government guaranteeing interest payments.

This is what I think happened. That's why nothing has happened with home mortgage rescue and the economy. The banks loaned it back to the Treasury, i.e. us, and now we're paying interest to the Banks on the money they were given.

I can't prove that this was how the money was used, but no one can prove how the money was used at all, according to the GAO.

Write to your congressman. Maybe something will happen with Obama now in office, although from what I have seen in life, it's a little difficult to become unraped after the event.

Free at Last, and Can Barrack Save the Economy?

I never thought that Martin Luther King's words, Free at Last, would apply to me, but today, watching President Obama sign the Executive Orders closing down the torture facility at Guantanamo Bay, I realized that indeed, they did.

While Guantanamo tortured people, and while our tax money was paying for it, we were all in danger of being illegally arrested and tortured, and we were all responsible for any such act by virtue of paying our taxes. I have friends who have spoken to me about living in Germany during Hitler's rule. They all say that they had to turn a blind eye to the events around them, for if they objected, they could be the next one detained and taken away.

Fortunately, enough people did not turn a blind eye to our torture and illegal detention, and now our President has taken a big step towards restoring our rights. I hope that he continues until the Patriot Act has been completely reversed. After all, as Al Gore pointed out so wisely, during the height of World War II, when our nation's safety was in peril, nothing like the Patriot Act existed.

In fact, the only time in our country's history when Habeus Corpus was suspended was during the Civil War, and Lincoln later said he deeply regretted having done so.

Free at last, free at last, good god almighty, we're free at last. It seems so ironic to me that it has taken the brave action of a Black president to begin to free both Blacks and Whites from the shackles of the Patriot Act. Let us hope he continues down this path until all violations of the Constitution are eliminated.

I am confident he will, but can he do the same with our money and save our economy?

Some of the most fundamental problems that our economy have can be traced to the legitimizing and institutionalizing of laws and ways of doing business in both the Clinton and Bush administration. In an earlier blog, I tried to demonstrate that it is cheaper to pay a laborer to work in China than it is to maintain a slave in America. While tongue in cheek, I remain convinced that we must have tariffs against low wage countries and insist on a manufacturing minimum wage in countries that import into the US. Note that I am not asking for a universal minimum wage in those countries. That would cripple their economies. What is needed is a minimum factory wage that can be tinkered with, until we end up with manufacturing returning to America and full employment occurring here as a result.

Will Obama be able to go this far? Will he be able to institute change on a worldwide basis? Will his advisors even tell him that such a core issue needs addressing in order to return our country and then the world to prosperity?

I'm not sure. So far most of the bailout programs have had little benefit. Banks given money have refused to lend it, because they worry their clients will default anyway. I have to believe that a large part of the money that has been given to lending institutions under TARP has simply been used to purchase Treasury Bills, the only safe "loans" available in most bankers minds. This is an odd and non-productive recycling of the TARP funds which really only guarantees that the highest executives in the Banks won't run out of earnings to pay their salaries, the rest of the world be damned.

However, if Obama and the Fed are really committed to turning around the economy, I have to believe they are going to keep on trying new programs and throwing more and more money at the problem until something works. On Nov. 25th of last year, the fed announced they were going to buy $500 billion worth of Fannie Mae, Freddi Mac and Ginnie Mae backed mortgages, and another $100 billion worth of debt issued by the Federal Home Loan Banks, Freddie Mac and Fannie Mae.

So far they have spent approximately $15 billion buying these mortgage backed securities, home loans at 4.5% and 5% for 30 years. I feel that this program will bring rates down with aggressive buying, and will result in all credit worthy homeowners being able to get new first mortgages up to approximately $417,000 (the current limit) for about 4% by this spring and summer. However, so many houses that are owned by credit worthy customers are worth far more than this, so it is going to take a change in the loan limits to really have a deep impact on this country.

I suggest that the limit on FMAC and other loans be raised to at least $800,000, if not higher, so that people can refinance their homes and save a significant portion of their monthly expenditure.

The Fed's hope in doing this is that people will go out and start buying things again; cars, sofas, televisions, computers. It is interesting to note that in Japan, when their real estate bubble burst about 10 years ago, there was little interest in buying real estate and all the above. They have had low rates since and no end to their recession. Japanese save more than any others.

There is a fear that the same thing will happen in our country. I do not think that this fear is warranted however, and that is because of the fact that in Japan, their population is gradually shrinking, and in the US, by virtue of natural growth as well as illegal immigration, our population is expanding.

I have spoken with immigrants who have told me that the high minimum wage in Oregon, now over $8 an hour, has brought a large number of illegal immigrants into our state to work because they can make so much more than they can in Arizona, New Mexico etc. where minimum wage is far less.

That fact has helped ameliorate the real estate downturn in Oregon, because the bottom of the rental market in this state is holding up nicely, and it is probably due to crowding into a house or apartment by illegal immigrants. If enough people making $10 an hour decide to rent a house, they can pay high rent as long as they can tolerate living with each other.

These illegal immigrants will continue to flood into our country, especially if Obama carries out his pledge to raise the minimum wage to $10, a move I heartily endorse. This flood of immigrants will bolster the real estate market and in combination with the Fed's 4% loans and current low rate of new housing starts, now around 550,000 a year, the lowest ever since WWII, I think we should see home prices rebound nicely, and once they do we will see cars, sofas and other items start to sell.

So I am confident that these initial changes will turn our economy around, at least to begin with. But we can not continue to count on home building and low cost refinancing to keep our economy growing. We need manufacturing back in our country. Perhaps the alternative energy industry, one that Obama insists he will cultivate, will take up the slack, along with manufacturing in America the new alternative energy cars of the future.

So, will Obama turn our economy around? Yes, I think he will, more quickly than most expect, and when it does happen, I think we are going to see inflation coming back, because all that money originally given to the banks under TARP will suddenly come flooding out in the form of new loans when everyone realizes almost overnight that they are going to miss out if they don't get in on the action and snap up the last of the cheap recession priced goods and houses.

In the end, we're going to see worse inflation than we ever have before, because I firmly believe it is impossible for the Fed to do the right thing early enough in any recession in order to prevent inflation down the line. People often say running the Fed is like being at the tiller of a large ship. Unfortunately, as long as a ship is headed for the rocks, it is politically impossible to turn the rudder the opposite direction, even when the Captain knows he has already started a long slow turn that will take him past the rocks, and that now he should be steering towards those same rocks so that he doesn't run into the shallows further along his course. I think the Fed will keep rates too low now and for too long, and in the end we'll have inflation.

Gold and mining stocks are close to historic lows, with some companies who are debt free selling at a stock price equal to their cash on hand. These bargains won't last long, and they should have massive appreciation during the next five years as the economy recovers. I feel that Obama and the Fed will reward you handsomely if you invest in this sector. Thank goodness we are still free to buy gold and silver.