Hide the Sausage

Dodging Thieves 

(A guest essay from “Of Two Minds” – edited)

“Today, as we try to preserve capital and earn a return on it, are we investing, or are we really just trying to dodge thieves?

First of all I question how much real investing is really going on . We continue to lose manufacturing in this country, so in manufacturing, disinvestment is what is going on. People speak of investing in houses, but today’s McMansions, if you look at how they are built, do not qualify as long-term investments. They are built more to allow their owners to participate in a real estate asset bubble rather than to live in and enjoy for generations (which is the purpose houses would be built for in a sane and honest world).

Investments in strip malls and big-box stores do not increase the wealth of the nation. When you have enough retailing, it is enough. You don’t need any more. Adding more retail space is malinvestment. A lot of retail space that is being added now will have to close down if ‘Quantitative Easing’ ever starts tapering in a serious way.

So there is reason to suspect that not very much productive investment is really taking place at all.  Regardless of that, investors still have to dodge the ubiquitous thieves who are swarming all over the landscape.

If you leave your money parked in cash, you will lose it to inflation. Albeit, each person experiences a differing inflation rate; for some people, today’s rate could easily be 10%-15%. That’s how much they lose if they stay in cash.

If you buy commodities futures, you are at the mercy of the thieves who suppress prices with massive naked shorting. Price manipulation is a form of stealing, and many precious metal investors have been victimized lately by the thieves who do it.

If you buy bonds, you are likely buying at the top of a bubble. Running Ponzis in the form of asset bubbles is, of course, another kind of theft.

How about stocks?  I believe that Chinese stocks, like commodity prices, have been manipulated in recent years by the Powers That Be.  Does it make sense that Chinese stocks should have lost 40% of their value since 2010 if their economy is growing 8-10% a year? Does it make sense that U.S. stocks should have gone up as they have? The whole investment environment today stinks of price manipulation.

So the skill we need today is not traditional investing skill; it is thief-dodging skill. It consists of knowing the thieves’ techniques and whom they are targeting, of knowing the bad neighborhoods to avoid, knowing how to avoid being a target, trying to stay one jump ahead of them as they target new victim groups. These are skills people had back in the Dark Ages, and as we enter a new Dark Ages, these are skills we need again.

Millions of middle class people are being wiped out by thieves, and millions more will be wiped out as the trends continue.

~ Jeff W.

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You can keep what you can hold on to… or hide

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A Changing Economy

First up, an ‘edited’ article from ‘CHS-Of Two Minds‘ blog.  Then some comments on the subject by me.

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What Marx Got Right   (July 12, 2013)

The crisis of capitalism has not been resolved; it’s simply been papered over.

First, a disclaimer: this is an interpretive discussion of some aspects of Marx’s analysis (which was based on the capitalism he observed in the late 19th century) applied to present-day cartel-state capitalism. It is not a scholarly or academic presentation.

The discussion covers a lot of ground, though, so please refill your beverage container and strap in….

That Marx’s prescription for a socialist/Communist alternative to capitalism failed – does not necessarily negate his critique of capitalism. Marx spent hundreds of pages analyzing capital and capitalism and relatively few sketching out a pie-in-the-sky alternative that was not grounded in historical examples or working models.

So it is no surprise that his prescriptive work is an occasionally risible historical curiosity – while his critique stands as a systemic analysis.

Marx got a number of things right, one of which appears to be playing out on a global scale. You probably know that Marx expected capitalism to experience a series of ever-larger boom-bust cycles that would eventually precipitate revolution and overthrow of the existing financial-political order.

One driver of these cycles was the interplay of increasing production and declining labor costs. In broad-brush, Marx recognized that industrial capital (as opposed to finance capital) could only increase profits and accumulate more capital by raising production and/or establishing a price-fixing cartel or monopoly.

Mechanization characterized industrial capitalism in the late 19th century, and Marx observed that as mechanization increased productivity, the marginal value of labor decreased on a per unit basis.

Here is a real-world example. When I first visited China in 2000, there was a massive glut of television production: the capacity to manufacture TVs had expanded far beyond China’s domestic demand for TVs. To wring out a profit in a highly competitive industry, manufacturers had to ramp up production while lowering the unit cost of labor and the unit cost of each TV to undercut the competition.

If an assembly line of 100 workers could produce 1,000 TVs a day, the only way to lower the price of the TV is to either lower the wages paid to the workers or invest capital in machinery that enables the same 100 workers to produce 2,000 TVs a day.

At 2,000 TVs a day, the per unit labor cost falls in half. For example, at 1,000 TVs a day, the labor cost per TV might be $40. At 2,000 TVs per day assembled by the same 100 workers, the labor cost per unit drops to $20.

The key point here is that labor’s share of the total production cost declines. If workers had taken home $1 million in pay to make 100,000 TVs at the old production rate of 1,000 TVs/day, they now take home $500,000 to make 100,000 TVs at the new production rate.

In other words, labor’s share of value creation constantly declines as mechanization boosts productivity. Marx described the impact of another factor: oversupply of labor. As rural agricultural workers flooded into cities for jobs that paid cash, there was an abundance of factory labor. Competition for jobs pushes wages lower, so workers faced a double-whammy: their share of production relentlessly declined as productivity rose, and the pressure on wages constantly rose as per unit labor costs declined.

The competition to outproduce industrial rivals with cheaper per-unit production costs and labor’s competition for jobs both generate a structural crisis in capitalism: as production of goods rises, both the cost per unit and the number of workers earning enough to buy the goods declines.

Lowering the cost of the TV no longer sells units if there are not enough workers with jobs to buy them. If you think this is only a 19th century or developing-world phenomenon, think again.

Labour’s share of the economic output is declining sharply. The reasons? The same two Marx identified: a surplus of labor and declining per unit labor cost. In effect, the economy produces more goods and services with less labor. Since the demand for labor is declining while the supply of workers increases, competition drives wages lower.

The crisis Marx envisaged appeared to unfold in the 1930s, but the expansive central state became a Savior State, marshalling its ability to borrow huge sums of money to create demand by fiat.

In the postwar boom, the low-productivity service sector expanded as labour shared the bounty of cheap energy and rising industrial productivity.

Increasing cost of energy and marginal returns pushed capitalism back into crisis in the 1970s, but three forces emerged to increase labor’s purchasing power:

1. The discovery of supergiant oil fields in Alaska, the North Sea and Africa.

2. Computerization improved the productivity of the service sector.

3. Financialization of the developed economies artificially boosted the purchasing power of labor and finance capital via highly leveraged debt and declining interest rates.

All those forces have been spent. No new supergiant fields have been discovered in the past 20 years, and while improving technology is extracting more oil from existing fields, that is maintaining global production rather than ramping it up by 25%-50%.

Digital technologies, software and automation have reached the point that capital is able to replace or reduce service labor in virtually all sectors of the economy. What happened to assembly-line jobs in the 1960s-70s is now happening to service-sector jobs.

Financialization has reached diminishing returns: interest rates are near zero and stagnant incomes cannot service more debt. Leveraged debt and phantom collateral have created shadow banking systems which are largely outside state control and vulnerable to systemic shock.

In effect, the Marxist crisis in capitalism has re-emerged. The “fixes” of declining energy costs, more service jobs and leveraging debt have run their course.

…  [emphisis mine ~R]

Though Marx didn’t use the term rentier skimming operation, he described the mechanism in other terminology. Finance capital also plays a role in the emerging crisis of capitalism, as finance capital (aided immensely by the Federal Reserve /central banks and the Federal government /central states) uses its access to nearly-free credit to buy assets that generate rents without having to produce any goods or services.

By way of example, consider the recent purchase of thousands of rental homes by institutional investors. Finance capital buys 10,000 homes and rents them to people who earn their income from their labor. Finance capital is not producing any good or service; is collecting rent from labor, i.e. a rentier skimming operation.

Cartels are also rentier skimming operations, as the cartel price reflects the cartel’s pricing power rather than the market value of the good or service. What is the market value of healthcare in the U.S.? Since healthcare is dominated by cartels, market pricing is purely for show: if you want to buy health insurance, there are only a few providers, and the price is roughly the same. ObamaCare simply institutionalizes the healthcare cartels.

The key feature of cartel-state capitalism is that increases in price do not reflect an increase in value provided, they only reflect an increase in rentier skimming. In effect, eliminating competition is the only sure way to maintain profits and accumulate capital. The best way to accomplish this is to influence the state to impose or support one’s cartel.

This further squeezes those with jobs, as rentier skimming transfers more of their dwindling earned income to cartels.  Since the State acts as the bagman for cartels, rising taxes are simply another form of rentier skimming.

You see the crisis brewing: earned income is under pressure and labour is in structural decline. The only way the system can maintain demand for goods and services is either cash transfers from the Central State or loans extended to those with enough earned income to service more debt.

Once their ability to service more debt vanishes, so does demand for goods and services.

The rentier skimming of finance capital and the increasing productivity /decreasing need for labour, both crush small business.  When a rentier skimming operator buys commercial property, rents for small businesses instantly rise, driving out all but chain stores and stores catering to high-margin luxury markets. As the number of workers with discretionary income declines, labour’s support of small businesses also drops.  Once a niche market becomes profitable, a high-volume corporation will step in and either buy up the small suppliers or source lower-cost goods from its global supply chain and undercut the small producers.  This dynamic is clearly visible in the erosion of self-employment and small business:

This is the result of competitive squeeze and finance capital’s access to limitless cheap credit:

All this creates a problem for the Savior State, which must provide incomes to unemployed labour – and protect politically powerful cartels. The only way the State can placate labour, industrial capital and finance capital is to keep interest rates very low and borrow $billions a year to fill the structural gap between tax receipts (based largely on earned income, which is in relative decline) and State spending, which must rise as labour’s share of the economy dwindles and the demands of banks and other cartels constantly expand.

This state solution to capitalism’s structural crisis only works if interest rates remain low and the buyers of state debt believe their capital will be returned to them at maturity. Once it become clear that their capital cannot be returned (or the money returned to them will be heavily depreciated), the only marginal buyers of state bonds will be central banks which can print money to buy state debt.  This “solution” doesn’t resolve either the crisis of capitalism or the state’s structural deficits; it simply papers over these crises with financial legerdemaine.

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Interestingly enough, there isn’t actually a shortage of work, or things that need doing.  Things that only people can do: and which can’t be, arbitraged across jurisdictions, distances and countries – or automated.

However, our economic system is structured towards producing “Value” and “Profits” from production/manufacturing, and from Renting.  And most people couldn’t even conceive of anything different.

Just as Marx’s “relatively few sketching out ‘pie-in-the-sky” alternatives”  that were “not grounded in historical examples or working models“, represents our problem.  It doesn’t mean that there aren’t workable solutions.  It just means that you can’t see them.  That’s not the same thing AT ALL.

For instance:  a lot of things in society currently are handled on a voluntary or charitable basis – because there is no money to be made in them.  Currently.

But it doesn’t need to be that way.  Mostly our systems and processes have to do with it being EASIER that  way.  It obviates the need to think about things – and avoids disrupting the status-quo.

If I am making money under the current system, then it is in my self-interest to maintain the current system.  And it is in my self-interest to justify and rationalize the current system.

The arguments against changing the system have less to do with the merits of any changes and alternatives, and more to do with the security and certainty of a known, understood and comfortable current shared paradigm.

Right up until it isn’t – secure, certain, known, understood, comfortable and shared …that is.

~R

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Being Evil

[Hat-tip: Karl Denninger-Market Ticker]

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Real And Practical Ways To Avoid The Snoops

You may have read my previous post entitled “Tired of Snoopfest?” in which I outlined how to set up an extremely secure IPSEC/IKEv2 VPN that can encrypt data between device(s) of your choice and your home or office network.

What’s shown up recently, however, are some really bad and maybe even dangerously bad piece of advice on evading the snooping that goes on out there.

This article is intended to disabuse those notions.  I’m going to use the following assumptions and note that I rely on them — if they’re wrong, then so are my conclusions!

• Modern cryptographic algorithms themselves are extremely secure.  It is very unlikely that the NSA, for example, can break AES-256 in any sort of reasonable amount of time.  Remember that we’re not the only nation with high-powered computers or mathematical geniuses — so anything that can be broken with those, can be broken by other than the US.  And our military and other government agencies do need and use encryption.
• It is easier to attack your key, most of the time, than to attack your algorithm.  That is, a crappy password is easily broken.  A good password (1) does not contain dictionary words, (2) does contain upper and lower case letters, numbers and symbols, and (3) is used to seed a high-quality key generation algorithm.  The last is hard to verify.  The other two are under your control.  Therefore, worry about #1 and #2.
• Open-source software beats closed source in the general sense.  The reason for this is that smart people can look at it and if someone tries to play games with it to insert a “back door” it can be detected.  With closed-source or worse, closed-service you’re trusting everyone involved to have not stabbed you in the back.  As has been recently revealed this is a bad bet.
• If I can’t break your key generator or algorithm the easiest way to break your encryption is to coerce (bribe, blackmail, threaten to or actually pull off fingernails, etc) someone into giving me what I need to break it.  This is usually overlooked but shouldn’t be.  Push comes to shove, if I want your password I will get out the vice-grips, drill or hammer.  It’s faster and cheaper than trying to break AES-256 by far.   However, and this is critical, this is not only applied to you.  More on that in a minute.
• You cannot trust any commercial entity or indeed anyone other than yourself to protect your data.   Period.
• If you have to compromise absolute levels of trust then minimizing the number of such incursions grossly minimizes risk.  In fact the odds of compromise go up exponentially with the number of points of exposure.   Thus “one” is not half as bad as two, it’s 1/4 as bad — or less.

Ok, so let’s start demolishing fools.

First, “SSL” certificates and everything based on them are only as secure as the certificate authorities.  What this means is that all commercially-issued certificates cannot be trusted.  You must assume that every public CA hasgiven their private key to the NSA, either voluntarily or not-so-voluntarily.

This means that if you’re going to be using public-key cryptography of any sort, whether to authenticate or encrypt VPN traffic, to secure email, or to secure access over the Internet you must either be the CA or the CA that signs your certificate must be some entity you trust entirely.

No, Verisign does not count.  I have no knowledge that their keys have been compromised but I am forced to assume that all of them have been, no matter who the CA is!

So you must generate your own certificate authority, publish the public key and make damn sure the private key is secured and not compromised.  

The reason for this is that if I can interject myself in the middle of the conversation (as the NSA has to be assumed to be able to do) and I have compromised the CA I can replace your key with another one that allows me to decrypt the transmission and your browser or other tool will not detect it.  I can then use the original certificate to send on the communication undetected.  Since a web server doesn’t know who’s talking to it and thus doesn’t verify a machine certificate for the client and even if it did your key would probably be signed by a “public” CA there is no way for the server to detect the tampering.

Note that you can detect a server being attacked in this fashion if you connected to it before it was tampered with and if you saved its key fingerprint.  That’s a lot of “ifs”, but if you did then you can detect that the fingerprint has changed.  The problem is that there are perfectly-valid reasons for the fingerprint to change (the key expires and is replaced, the company changes its address, etc.) — but it at least can raise an alarm.  Unfortunately browsers in general don’t flag this (nor should they) because the model presumes that CAs are trustworthy.

In short you cannot use any key that requires verification against a public CA because it can be spoofed by someone interjecting themselves in the middle if the CA has been compromised. Since we now have bald assertions that companies that have claimed to be secure have in fact cooperated with warrantless interception you can’t trust any of them.

This leaves you in a pretty rough spot.  Specifically:

• Any web or other online service that relies on SSL using a certificate “vouched for” by a public CA has to be considered suspect.   It doesn’t matter if the entity itself is trustworthy. This includes virtuallyall online services except for ones controlled by people you trust and who have given you their own CA key that validates their certificate.  In practice this means that using “https” (the nice “lock” symbol) isprobably safe to use for shopping if you’re worried about a criminal stealing your credit card number.  If your concern is that the government has a complete and true record of everything you did on the site you must assume the security value of https against a publicly-verified certificate is zero.
• S/Mime email cannot be considered secure if you got your keys, directly or indirectly, from a public CA.  If you run your own CA then it is as secure as is the CA (you.)  But this makes interoperability somewhat of a pain as verifying certificates forces correspondents to install your CA public key.

• PGP Email is probably secure.  Because PGP does not rely on a key being vouched for by a central authority, there is nobody’s arm to twist.  PGP Email is thus probably more secure than S/Mime using a public CA, and likely about equally secure as S/Mime with a private and trusted CA.  PGP has a reasonably-robust and solid infrastructure for distributing public keys, but you have to submit yours.  For email use you thus probably want to strongly prefer PGP over S/Mime.
• For files on your local PC, network or cellular device encryption of the device should be strongly encouraged.  It can be a pain in the ass to use, however.  I have no knowledge of the security afforded by things like Bitlocker, and given recent revelations I wouldn’t trust it.  Truecrypt, on the other hand, is open source and therefore probably secure.  Other open source solutions (E.g. GELI on FreeBSD, etc) are probably secure provided your key is good.  Note that if your machine is “seized” while “in use” and powered up there exists the potential to extract the key.  It’s not easy to do but if you’re a high-enough value target they very well may come prepared to do exactly that.  Just remember that if you’re that high of a value target that the use of vice-grips and hammers is easier than cryogenics and other special equipment.
• For remote access to files or resources only a strong VPN should ever be used.  This means OpenVPN or IPSEC/IKEv2 with machine certificate verification for the server with the CA being private, yours, and you having hand-loaded the CA public key on the remote device.  If you’re using PPTP/LT2P or similarforget it.  If you’re not going to use a machine certificate verified against your own private CA then you’re probably safer using a password with no machine verification at all!
• Remember that the security only goes as far as the encryption does.  If you’re in a “free” Hotspot Internet cafe and have your phone out browsing, everything you do over the web is visible to anyone sitting in the same cafe (or within a few hundred feet of it.)   If you VPN to your office network via IPSEC (secure) and then browse the Internet all you’ve done is force the bad guy to spy on your office connection instead of at the cafe.
• If you have a wireless router in your home or office and are not using WPA2/AES with astrong password, you’re screwed.  WEP in particular is trivially breakable, usually within minutes.  WPA2/AES is theoretically breakable but it requires a long time and a lot of connecting clients that are valid in order to glean enough pattern data to try to attack it, and even then it may fail.  Machine certificates are even better but a serious pain in the ass to administer (since you have to load them on the client machines) but are something to consider.
• You cannot trust so-called “anonymous” networks such as TOR.  There is no way to know if a given node is “clean” or compromised.  There are a fairly-small number of high-bandwidth nodes in the TOR network, which means that the task of actually intercepting your traffic in terms of statistical probability isnot all that difficult.  I have to assume that TOR is thus “secure” against a random website operator knowing I’m browsing their site but that if the government wants to track me using it, they not only can but probably already are.

• There is no such thing as a “chat”, “video chat” or “phone” (voice) network that can be considered secure except for true peer-to-peer where you know the certifying authority is secure.  This, for all practical purposes, means that no online chat or “phone” application no matter which one it is, can be considered secure in today’s world.  Sorry.
• All cloud services, no matter what they are and who runs them, other than your own personal cloud on your own hardware, must be considered compromised.  There is no other reasonable posture to take at the present time.  This means that nothing you care about ever goes on any cloud service from anyone unless the file is first encrypted with strong encryption.  This explicitly includes all “cloud” storage services and all cloud computing resources.  If you are a business using “cloud computing” for your operations given these revelations and facts you are a fool.  Again, if you think the United States is the only nation doing what has been disclosed you’re stupid beyond words and deserve to have the Chinese steal everything on your so-called “secure” cloud service and use it.

Any compromise you make on the above is a bet not just on the government of today not wanting to do evil things to you but on all instances of the government from this day forward until you are dead.

Understand this well — the government is building a data center right now capable of storing everything they can grab that you do or any data you allow to leak out of your hands forever and they both are now and intend on a forward basis to do exactly that.

That data, once collected, will never be deleted.  Your only defense against this is to not allow them to acquire the data in the first place, and that means the data has to be encrypted to the best of your ability at all times.

This won’t stop them from showing up with a warrant and seizing your computers.  But it will stop them from taking and indefinitely storing your data without you knowing about it and without said warrant.

If you think this is nothing to worry about consider how many Jewish people had any clue that Hitler was going to come and start gassing them in the 1920s.  That was less than 20 years before it happened!

Whatever you do today will be in that database 20 years from now.

Are you willing to count on the government NOT being evil – from today until the day you die?

THAT is the bet you’re making.

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Less Chicken-Little

[Hat-tip Charles Hugh Smith]

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The Sky Is (Not) Falling: a “Little More Chicken” Tale.

A guest essay by Eric A. questions our attraction to Armageddon – July 2013

[edited ~R]

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Lately John Michael Greer has been popping up in the blogosphere with thoughts and  insights about the Arc of Empires throughout history. He proposes that Empire rises in a certain recognizable fashion, peaks in a certain fashion, but most importantly falls in a predictable fashion.

An Empire, by definition, is the process of extracting wealth from the periphery to the core.

What happens once the colonies, frontier, the developing world is already paying all possible tribute?  The only remaining expansion is to both expand the periphery by colonizing ones own citizens, and to shrink the Core to ever-fewer insiders, both of which we see now. Ultimately, the core becomes an oligarchy of a few dozen while the colonized people become everyone else in the system–a 99.9999% vs the 0.0001%, an unstable situation that predictably collapses.

Greer has two returning points with this: one is that this never leads to the end of the world, and the implied point I remarked on in my previous essay: that these things unfold in their own time over the expanse of many years.

The attraction to believe in cultural, financial, or ecological Armageddon is deeply compelling. One can even find data to support these beliefs from commentators or scientists that share one’s outlook. However, in over 2,000 years this has never turned out to be the case.

Let’s take two sudden and remarkable ones: The Crash of 1929 and “The Year Without a Summer” in 1816.

The Crash of 1929 and the Great Depression is well-known; a 90% loss of value for the proxy(stock exchange) of the largest US companies. This was accompanied by the closure of hundreds of banks and the confiscation of savings accounts, along with a drop of trade by 60%, GDP by 25%, and a rise in unemployment to 25%.  This was a sudden, severe break in events that had broad, deep repercussions.

Was it severe, unprecedented even? Yes. Yet even with a crash of this magnitude, what happened? 99% of people tightened their belts, made do, and carried on.

There were points of extreme desperation recorded by photographers such as Dorothea Lange and writers like Steinbeck, however, this under-reports the same conditions throughout the previous 100 years of Industrialization, such as the Massachusetts child mill workers, the Ludlow Coal Massacre of 1914, or the beating or shooting workers during the steel strike of 1919. Although the numbers and locations fluctuate, there are poor people and oppressive conditions in all countries at all times. We need to compare the average trouble to the peak trouble.

So let’s compare:  Statisticians such as John Williams mark our(sic) present unemployment rate as high as 25% — the same as during the Great Depression. He also records a 2% drop in GDP every year for 8 years, or a 20% drop in GDP—same as the Great Depression. How did it feel in 1935? How does it feel now to you now? Because that’s how it was.

So what should we do to prepare for the Great Depression? Well, I hate to inform you, but it’s already too late. We’re already in it, so you already know what should you have done in 2001, 2007 or now.  Is it Armageddon? Would stocking beans or bullets in 1999 or 2005 have been helpful to you? For more on this subject, you could read reports from other countries where similar things have happened, writer FerFal from Argentina for instance, or Selco from the war in Serbia, but I think you’ll find the same thing: the problem did not happen that fast, nor did the world end.  Challenges were mostly composed of steadily increasing economic pressure with ever-increasing risks of failure. Rent, taxes, debt, sickness, crime: the same challenges as in the good times, only harder.

But the Depression is surely light stuff: let’s move on to an epic ecological catastrophe, the “Year Without a Summer”.

In 1815, Mount Tambora in Indonesia exploded with earth-shaking force. It was the largest eruption in 1,300 years, with an explosion audible in Sumatra 2,000km away. Volcanic ash filled the skies, blotting out the sun, and snow fell in Albany in June. River ice flowed in Pennsylvania in July. Frost fell every month of the year in areas of Canada, the US, and Europe. The entire crop was lost before the bitter and endless winter of 1817 where deep-harbor New York recorded temperatures of -26 F (-32 C). Prices rose suddenly through the western world and food riots broke out. This is as close as the modern world has ever come to a nuclear holocaust and nuclear winter.

Never heard of it? That’s odd. You would think the largest explosion and climate event in 1,300 years would have more effect on daily life.

And that’s my point. The world doesn’t end. Nor does it change very quickly or without going through a long series of steps.

I could recount the 85 Million killed in World War II, the 200 Million killed by the Black Death in the 1300s, Communist purges of Stalin and Mao and so on, but the point is the same: things don’t change very quickly or very much. In fact, we’re already in the middle of the next great crisis and you didn’t notice.

So are things going to suddenly change tomorrow, next week, next year?  I bring this up because what we THINK will happen determines what we DO in response. For many this has been ignoring risks completely, complete with buying new houses, investing in that 401k, and taking Caribbean Cruises.  For others, it’s to stock up on guns, canned goods, and bunker down waiting for the zombie apocalypse.

I propose neither way is sensible, because of the way the world changes ponderously and one step at a time.

Our emotional desire to find either a return to normal or an instant end of everything colors our approach, fatally compromising our ability to accurately prepare for real challenges that are far more likely or even certain. However, comparing to previous crises we can reliably predict what is most likely to happen and where our real risks lie.

As there are a constellation of risks, let’s just take one example of risk and its solutions: Food Security.

Do you need food security? If you don’t need it already, there’s a reasonable possibility you will in the future, if only for economic reasons, and this is presuming that we have the money to buy food or that we won’t be turned out of our homes by eviction, foreclosure, or war.

Starting with our two historical events, how could you have best prepared?

Preparations for 1816 are simple: enough food for 1-2 years along with a reserve of heating fuel for the pounding winter of ’17. Alternately, you could say that food was available even in this hard time—the problem was price, not availability. So arguably one could have stored a year’s worth of either food or money. Looked at another way, you could say that food rose sharply in price relative to money and rent. So if you had food in store, you could have sold it to get by – under those conditions, storing food WAS storing money.

How does this compare to the 1929? In the Depression, wholesale prices collapsed and food got far cheaper—but only if you could find the scarce money to buy it with. The Depression wasn’t over in a year, either, but lasted from ’29 through ’39, then through 1945 with the war rationing for 16 years of grinding hardship. In Europe, the food and fuel crisis persisted far longer as whole nations were tediously reconstructed from rubble.

While storing food might have helped a little, it’s clearly unrealistic both to buy 10 years’ worth ahead of time and expect to store it safely through the greatest turmoil of the 20th century. If instead you had stored money, you might have done well in America, but only if you were outside stocks, bonds, banks, commodities and real estate. And storing money in the battle zones of Europe would not have been much help at all.

Two very different events with two very different responses, and with food concentration and weather volatility, our needs are different again today. Is there any way to create food stability at low cost, with broad genetic, political, and weather stability, with low storage requirements?

Let me ask you a question: why are you storing food in the first place? Is it to eat it? And where does food come from? From the cupboard, from the store, from your paycheck? No. It comes from the ground.

We live in a money paradigm. All things are delivered for money (trade). All goods are compared to money (prices). Then we live and die by our trade and the money-signals that prices give us.  Stop trade, wobble the prices around, and we starve by the millions.

We work to get people halfway around the world to buy our stuff so that we can buy stuff back from them. Why?  Are you worried by prices and all those middle men who must be paid?

What I’m saying is; if you want food, then GO MAKE FOOD. Be a producer, not a consumer.

And the best part is that if you produce food, whether by seed or tree, it will produce over and over for 10, 20 or 100 years. Through the long Depression. You can sell it in a war or food interruption. You can pick varieties that do not require inputs of oil or water and are not susceptible to genetic crisis.  For stability, for price, for size, for long-term reliability, nothing beats making your own.

How do you get cheap, food-stability?  Make it yourself.

In Part Two, I’ll cover a variety of ways ordinary people can create their own food plan.

copyright 2013 by Eric A.

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Eric touched on something here that I talk about on my home page.  Our crisis of economics is a long term and slowly developing thing – like watching snow melt.  Nothing happens it too big a hurry.

And there probably isn’t any real issue with being caught out by too-rapid changes – and not having time to adapt.

Unless of course you are being willfully blind…

~R

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There’s never just One

There’s never just one.

There’s never just one.

There’s never just one.

There’s never just one.

There’s never just one.

There’s never just one….

etc.

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Or these either – BTW

 

 

 

 

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Alegal

……………………….[hat-tip: Mish]

Definition:

An unambiguously wrong, disruptive and often deliberately committed act for which there is not yet a specific law making that act expressly illegal. (See Extralegal)

Alegality is a parallel to the distinction between amoral and immoral, as applied to legality.

Particularly relevant to financial and white collar ‘crimes’.

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Mish Definition of Alegal

A blatantly illegal action conducted with immunity, because perpetraitors understand they will never be prosecuted or held accountable in any way.

Over the Line 

On very rare occasions, someone like Ollie North steps way over the line and is prosecuted.  (re  Iran Contra Indictments) Although, note how prosecutions eventually pan out (numerous presidential pardons, convictions overturned, etc)

When the President Does It, That Means It’s Not Illegal…

 [4 sec’s]

In France as with the US, their spy activities are clearly illegal.

But it’s easy for the spies to do whatever the hell they want – because none of them will ever be prosecuted for what they do. .

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Dealing with an Enemy

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After you have identified (and/or defined) an enemy, what do you do about them?

Assuming you don’t run away and hide…

You are left with several options:  Kill, Co-opt, or Shape.

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Kill – is the attack and aggression approach.  Hunt them down and execute them.

To Arms, cry havoc and let slip the  dogs of war…

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Co-opt – is (was?) the preferred approach of the Spooks.  Recruit, bribe or blackmail an enemy (typically a low level indian, but sometimes the chiefs too…) so they flip sides and come work for you.

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Shape – all very Machiavelli and Sun Tzu.  Manipulate and pressure your enemy so that they are  tempted and inclined into decisions and behaviours that they might not have made otherwise. In the nature of a trap – use their nature to trap them.

This is the long game typically, for when you don’t have the strength to confront your enemy frontally.  Trick them into making mistakes and weakening themselves – to the point where you can either Kill, or Co-opt them…

Take/lead them to a place where you can defeat them.

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The Art of War, is not necessarily direct Force-on-Force.

Sometimes it is about achieving Victory without having to (physically) fight.

Sometimes it is Diplomacy and Politics.

And sometimes – it is the Long Knifes.

There isn’t really much new under the sun…

Only things that are new to you.

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Additional reading – The 48 Laws of Power.

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