Peoplenomics | Financial News, Trends, and Stock Market Analysis

Yes, there really is a proposed federal bailout of Fannie Mae and Freddie Mac. Unfortunately, as I'm about to show you, developments in the fixed income markets are already telegraphing that the bailout won't 'save the day' and that a substantial further decline of the Dow is almost certainly in the cards. Regrettably, we have arrived at a point in history where war of some magnitude becomes a 'management alternative' to dealing with the very real, and still growing, economic problems facing the West. To put it gently, the Country is nearly broke, we're about to become broker, and the fixed income markets are already signaling "Broken! Look out for Dow 4,280.98!" Should you be skeptical of such an assertion? You bet! So let's start with a steely-eyed assessment of the real-life Price to Earnings Ratio of the Dow Jones Industrials - something you won't find in the MSM with a microscope or fine tooth comb...for reasons that will become abundantly clear.

This is more like a fasten seat belts, return tray tables to their upright and locked position, and be out of paper three days ago note...

Some global conditions are appearing to soften quickly and a related technical note for subscribers is here:

Access Note: If you receive a 404 error or if a link doesn't work, please refresh your browser and empty all 'temp' files. Then try again. Apparently there is an issue with this week's report but if you refresh it goes away...thanks.

While most of the MainStreamMedia hypnotized public was feeding on the pabulum pushed out by the PowersThatBe-owned 'state media' there were numerous indications going on Sunday afternoon that news events were being pushed as much by the actual events surrounding Gustav, as the need for the PTB to keep things from falling part for two more weeks. Fortunately, having access to the predictive linguistics reports out of HalfPastHuman.com, I already expect relative order until September 15th because shortly thereafter, and centered around October 7th, we're due to start The Big Slide to Transformation which will happen between now and March of next year. Still, there was almost a sense of either panic, (Or, was it disbelief?) as my broker called to say "There's a special Sunday trading session in energy due to the hurricane..." I know, you're thinking to yourself, "hmmm...that's odd..." Yup, sure was...yet here's the story bigger than life. And close on the heels of the change in margin requirements installed Friday (oh, what a coincidence, eh?) With the Dollar on life support (and a hit of meth lately) it shouldn't come as a surprise.. My broker had never heard of a special Sunday session before, but then again, he's only been in the game 20-some years. But not to worry, seems we're not the only ones worried about the end of the month and then October 7th-ish events to follow.

While at first blush, you might think we're covering one topic in this week's report, there are actually two: The first being a sequence of events that might lead to Hillary getting the nod (or at least the Presidency) and separately, how crooked finance may be blowing up in slow motion while most of the world stands by in disbelief. Grab a fresh cup, this is going to be fun. Except for the part about the latest "after the close Friday"/ "bank Failure of the Week" but more on that after we see how Ms Clinton could get herself back into the White House....

While the strong hands (industry pros) have been busily selling their stock shares to the weak hands (the retail investors) as quick as they can (more in this week's ChartPack), I've become much less concerned with the day-to-day market moves, and much more worried about something that the HPH folks have had crop up in modelspace between now and perhaps year's end: rationing. This week, therefore, we'll outline a scenario which could lead to rationing, and then explore some of the ways rationing arises, operates, and is then ultimately resolved. Since we've always had a fair ration of foresight, we'll start by outlining a scenario that could lead to gas lines (and much worse) before St. Nick flies

This may be one of those Peoplenomics issues that I should really publish as a book, not just a weekly report. But, since so many readers have been writing in wondering how I did this, or that, I figured it would be a good thing to start from the grounding rod up and go through how to design a home power system that will give you maximum bang for the buck and take some of the fear our of the grid going down. Properly done, you should be able to take a 'system approach' to living and figure out a way to thrive while most other folks are whimpering and complaining about the loss of power.

Without giving away the store, there's a chance - albeit a small one - that millions of people could be forced into relocation from their present homes/residences by events expected this fall. Whether it's an attack on an American city, or a regional power outage which takes too long to recover from, or just economic callout resulting in a huge lack of jobs, thus sparking a 1930's style mass 'wandering', some thought might be given to how one would prepare for such an event. But the 'single design' bug out bag isn't adequate for the range of possibilities over the next year or two, so let's get to work designing a better approach. We might begin with a fresh look at terrorism...

I'm not going to beat around the bush on this: The numbers are horrific. But, step by step, I show you this week how I arrive at the most painful financial conclusion I've ever reached: If your 401(k) has retained even half its value by the end of this year, you will be doing very, very well, compared to most. If you're thinking "Gee, wonder if that means a Dow under 9,000?" You may be horrified how far under. Plus, a few more thoughts on PCP (personal contingency planning) for October.

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Just as pilots go through checklists (pre-flight, take-off, and landing), it's useful at times to step back a ways and survey all the major areas of life we can think of to see what can be improved upon. We'll organize it this way: Ure's 'seven major support systems of life [food, shelter, transportation, communication, energy, environment, and finance]. We'll do a quick scan of the headlines to get a sense of 'current status' of that life-supporting system, update the 3-month to 3-year outlook, and then list different ways of coping with the range of possible outcomes at a personal level. Along the way, we'll set some 'trigger levels' for further action as the likelihood of a particular outcome changes...

If you have a fair idea of how the rest of 2008 and early 2009 will work out, you may have already started working on your plans for how to cope with unemployment on a massive scale, $500 a barrel oil, and the arrival of shortages at virtually all levels in America between now and this time next year. In case you haven't and still have a job, I thought it would be useful to build you a "How to get fired kit" because either you - or someone near and dear to you - will likely need it. Along the way, a short libretto on how events seem likely to play out...

Money is in the midst of a huge decoupling from its traditional role as means of storing wealth. We've got several factors at play here which demand analysis. Among these we can count the declining underlying value model, where over time (and enough printing) money stores more 'interest' than 'value'. A second is that a transition from specie to paper and now digimoney is underway. And the third, and perhaps most important aspect is that 'money' as most folks think about it, is in the midst of decoupling from physical reality as the printing of paper assets may continue ad infinitum, while the available resources (oil, oxygen, and fish as examples) is not unlimited and is likely peaking, as anyone who likes Copper River Salmon will tell you. This week, a reexamination of the old problem "What is money, anyway?" and "Can we come up with something better?"

For a typical family that was able to save $150 a month on an after-tax household income of $3,600, an increase in the price of gasoline from $4.00 to $5.00 could result in them having to draw down $94.40 per month from savings, and further, with savings of just $6,500, this typical family would be out of savings in 68.9 months. How'd I figure that? Aha! This week I've written up a quick spreadsheet template so you can plug in your own household budget numbers and make an intelligent estimate of how long before you run out of savings if the price of gas goes up or down. Along with it I've included a super-short introduction to spreadsheets and design notes on how to tweak the model this way or that...

It happened again on Saturday night when I was chatting with a group of folks around the Southwest on ham radio. The future tapped me on the shoulder. One of the hams in the QSO (conversation) said that although he loved his older Porsche (928), it was getting to be a real pain to drive because it isn't easy on the gas. Now that gas is nearing $4 a gallon even here in the "Land of Oil Rigs" (Texas), this reminded me how things presently held in high regard for their "status" value may be changing in tradable ways over the coming few years. Not that the meek shall necessarily inherit the earth maybe, but at least if they drive a high mileage diesel Jetta with a 25-gallon tank, they might at least be able to raise a down payment in the future. Anyone want to sell a good Honda Insight which a CNN-Money page listed as turning in 60 MPG city and 66 MPG highway?

Although there's a good chance that the markets will continue the decline set up last Friday as the markets open on Monday, the drop even if a thousand points, would only be a 'drop in the bucket' compared to some of the longer-term counts in Elliott, some of the predictive linguistics work, and just common sense. The macro-problem is that somewhere between 2000 and 2015, a Grand Super Cycle top will be in. As that occurs, we won't be looking at a decline from 14,000 to 12,000 that became evident last week. Nope: it will be more like 14,000 to 2,000 to a Dow somewhere between 2,000 and zero. If there's a number I fear more than any other, it is a weekly close under 11,893.7. Let me show you why...

"Psst! Buddy...got a hot tip for yah on a stock that's going to the moon...." You probably get as many emailed 'tips' as I do - and some days it's dozens touting this stock or that. This week, we take on the task of trying to assess the various methods of predicting the future both of markets in general and particular securities and commodities by combining multiple inputs. On the way, some thoughts on graphically representing and weighting of the various (multiplexed) inputs, but first we begin by stepping back to understand the true purpose of market research. This is really part one of two because next week, we'll explore whether financial remote viewing, as yet another non-traditional method to intuit future market direction might be another avenue of study....

Not that I would ever expect someone like Warren Buffett to come out and say "Second Depression!" as I've been writing about for 10+ years as the inevitable outcome of consuming ore than we make and printing up phony financial instruments ala Ponzi to do it, but when someone of Buffett's standing "sees "long, deep" U.S. recession" ahead, then perhaps there's still enough lead time to actually get ready. So, if you're willing to ride out and meet Fate, it's time for some contingency planning for the aftermath of what may have been America's Golden Age.

It occurred to me recently that I’ve never seen a really good survey book covering all the ways that a motivated human could get rich in this world. If such a book or short survey existed, everyone ought to be interested in studying it. After all, who doesn’t want to be rich? So this weekend, let's see if we can't logically group the various routes to riches. Sure, I expect the dollar to crash this coming week (or at least resume it's downward dive) but that shouldn't stop the aware person from at least keeping an eye out for opportunity. Within every crisis there's usually a new way to get ahead of the pack by thinking in unconventional ways about conventional problems.

Next week, Peoplenomics will be into it's economic groove with a survey of ways to get rich in theses times. But what will life be like on the other side of an economic calamity? While we're waiting to find out this week's report is a short "quickie overview" of basic tools that may come to play an important role in your life, even if you never thought of yourself as "handy". Hard times might make being "handy" a very useful thing indeed, as the people in the Southeast found out this weekend as tornadoes came calling. Part of our 13 Acres and Independence project, a short chapter on the basics of how to make almost anything and under almost any conditions seems a useful thing indeed. If you were too busy learning computer science, accounting, or day trading skills to take the industrial arts courses (especially wood shop and metal shop), here's a 'quick start' I hope you'll never need...

This week I'm going to place a number of major "dots" before you, suggest a possible meaning of the dots -- namely that an extinction level event is pending in a couple of year -- and then propose that we all just go on as though everything is dandy and everything will work out right in the end because lining dots up in just a certain way is no guarantee that it's how the future will really work out when it gets here. Instead, it's only one wildly speculative version of how the future could work out. As the time monks are prone to reminding me "George, if you can imagine it, that about assures us that your particular version of the future won't show up." After a preview discussion of this week's content, they suggested I send out sample sized bottles of Imodium AD in advance for readers of weak constitution, but I'll leave such frivolities to Big Budget Newsletters, although a shot of Jack at the end of this report might be comforting. Forewarned is forearmed - so to the dots!

A number of conferences have been held recently dealing with the general topic of “mass customization”. The main thrust of mass customization is that because an ever-increasing portion of manufacturing is software-driven, intuitively it should be possible to easily customize virtually any product. However, in some ways mass customization is encountering the same kinds of obstacles to widespread adoption that hamstrung the infant videotext field when it arose as precursor of the Internet. Therefore, to help identify obstacles to widespread use of ‘mass customization’ it’s useful to review why videotext didn’t ‘catch fire’ while the internet did. We’ll also discover why the evolution of software-defined radios (SDR’s) may help business evolve into what I call SDMC’s – software defined manufacturing companies.

Two items on the agenda this week: First up is a lesson on how to gauge the winds of change blowing through the housing market and how to build your own local housing index to help you spot the bottom if you're looking to time buying of a house or picking up a rental unit or two. Then, a special report from a reader who's a retired nuclear industry emergency planner. He details a layered approach to personal emergency plans, based on high to low consequence triggers. Fresh coffee in hand?

I've been pondering the investment performance of a colleague the last week or two, and I've come up with an interesting - and perhaps useful - new way to look at investment decisions. Part of it comes from reading "Secrets of the Unified Field: The Philadelphia Experiment, the Nazi Bell, and the Discarded Theory." Not to worry, the report this week won't be getting into the woo-woo area of borderland science. But, the book does get me to thinking again about something most people give very little (if any) head space to; the concept of the phase relationship between their individual behaviors and overall group/societal level behaviors, and in particular that social oddity called "The Market". In short, a new way to look at your trading track record and one that I haven't seen discussed in any of the literature. I'll show you how learning to think of your trading in electrical engineering terms used in AC distribution systems may be a very good thing, indeed.

Lot's to cover this weekend: I'm going to show you the Elliott wave count that would put us in the 'fifth of the fifth" which could lead to a Fall in the Fall, and we're going to consider a batch of historical data to ask the question "How would you have played The Crash of 1929? - What would have tipped you off?" But before we get into hypothetical topics, let's start with a little chart work and I'll show you how I pencil in a Dow of 14,966 as one projected rally high for the summer....

One of the occasional criticisms leveled at my writings is that I don't spend enough time offering solutions to what are the obvious problems that face the world's humans today. This week's report will be very short and to the point with three major solutions being offered. The first action point is a response to numerous emails from readers who say "I'm poor - and I can't get to debt-free and a paid up place to live, because of my miserable circumstance." I explain how to team with other family members or families to set up a very robust self organizing collective (*SOC). The second sketches the outline of a global political party to counterbalance rampant global corporatism; a short discussion of why a global political party (GPP) might actually work. The third is a short discussion focuses on the question "What is money?" and how we store 'value'.

Before this weekend I was pretty confident that this weekend's "Camp In" preparedness test would find me totally ready. Yessir, I was set - or at least so I thought. It only took about 6-hours to arrive - somewhat humbled - at the realization that even though I've got some of the "big stuff" (food, gun, water, medicine, and the usual stuff you read about on the 'net), I've also got a huge 'punch list' of things to correct before I rerun the test in September, just before the linguistics tell us 'Beware October.' I think you'll find some of my 'blind spots' instructive, and they explain why I'm planning to make "camping in" a quarterly event around here...

A lot of non-subscribers ask me "George, how will I know if my family is really ready, and what will the problems coming be like?" While there's no way to know for sure what will happen in October (5th-8th) when we get another 9/11 sized or maybe larger, shift coming through lifespace, there is a simple way to find out how it will 'feel': Hold a personal disaster readiness test next Saturday. But, don't tell your friends - they'll think you're a survivalist nut. Instead, tell them you're trying "Camping In" - a 'don't-have-to-go-anywhere' version of 'camping out'. No camping gear to buy - just shut off your water, power, gas, and communications for 12-hours (or longer) and you're there. No camp site fees required.

Reader Notes: There will not be a daily update of the www.urbansurvival.com Saturday March 22. There won't be any power here at the ranch during the test. In order to make this as real as possible, it is suggested that subscribers don't even read the rest of this week's report until after stores have closed Friday night in order to get the most benefit from the test... I mean 'camping in' adventure.

This being Spring Break, let's postpone the actual developing, and building of your 'next life' farm/ranch/habitat/retreat/sanctuary to define the knowledge you'll need to make it really work, then plan to acquire the knowledge in the most cost-effective way possible. We'll tread on sacred ground again by discussing how Higher Ed often SELLS useless (or very low value) knowledge in return for mountains of student loan debt. But if you believe that a student loan will secure you're future, you could be DEAD wrong. We begin with the distinctions between schooling, knowledge and education, understanding the pricing models of each, and build a plan to have the right mix of knowledge for the future. No, it hasn't escaped our notice that the subprime meltdown has extended to student loans....

When the Depression Era classic "Five Acres and Independence" was written as many as half of the modern considerations in buying land hadn't been dreamt up yet. This week I'll run you through the basics of buying land in today's much more complicated times. Questions like the regulatory environment, modern utilities (like the internet) not to mention a development plan that avoids becoming embroiled in government power grabs such as the National Animal Identification Program ( NAIS ) deserve close study. Under the guise of "food surveillance" corpgov is inexorably pressuring out small land owners (whether by design or not) by ensuring through appointed 'courts' that the "voluntary programs" morph into mandatory when the public's attention is diverted this way or that by the Tweedle Dees and the Tweedle Dumbs on the campaign trail. I'll try to park my cynicism for a few minutes here while we objectively look at buying land.

I received an interesting email from a fellow who I'll call (*for labeling purposes only) 'Doc' which really deserves widespread discussion. What's ahead this fall came clearly and quite personally into focus as he read the latest Global/Europe Anticipation Bulletin with it's not-exactly-reassuring headline "Global Systemic Crisis /September 2008 - Phase of Collapse of US real Economy". It fits with the HalfPastHuman predictions a little to closely (October 5-8 timeframe for collapse) for his tastes. Don't worry, Doc, you're not crazy; the world is. But while your friends and colleagues enjoy life to come from de banks of de Nile, here's a simple plan to keep up appearances, make money and reap tax benefits, and yet still be ready for unanticipated consequences - like economic collapse. Sound too good to be true? Not only is it achievable, I have two friends who are very successfully operating exactly the business model I describe this week, and I'll explain how our little piece of the Texas Piney Woods will be developed in a similar mode...

We've lost track of the number of folks who have asked us to write up a short booklet on how to go about dropping out of the Big City - High Consumption Lifestyle, which we've managed to pretty much ditch over the past six years. So, this week I'm starting to write a short e-book (which as a subscriber to Peoplenomics, you'll be able to read here as bits and pieces of it come out. ) For those addicted to the rush of the markets (like me, for instance) this week's ChartPack (click here) will give you the economic overview and set out what I expect in the very near term. In a nutshell, while we seem due for a major increase in commodity prices (food and energy sectors) there continues to be an erosion of housing prices and what works out as illiquidity in the bond markets. This latter seems more because of fears over the fate of bond insurance companies, than a fear of default on underlying commitments, but the work-out is the same: Bond's that don't move.

Our discussion of matters economic is more to the point than usual because we all need to be watching the time dilation of the final two minutes of a football game later on this afternoon. But, before heading off to the kitchen for a few cold ones and nachos, a moment reflecting on the market being at what feels like an 'inflection point', may be worthy of deeper consideration than, say, adding up the weights of an offensive line, for example. Things are likely to become offensive in the markets this week, and instead of 52" of HD escapism, it could be your 401-K or retirement plan at risk. But I know how loud nachos can be calling on semi-holidays like this one. So let's quickly flip through some charts and some comments about the new oil bourse up this week and how it may be connected with "cable breaks" and then... well, throw some extra cheese on the nachos for me...

Since it's looking more like the US is in a recession - and things could really fall apart toward the end of the year (think Depression 2 ) I thought it would be useful to have a discussion about the nature of service economies, so-called higher education, and offer at least one innovative solution to the soaring cost of sheepskins. In order to understand the playing field, we'll start by differentiating what's currently available in the market: Accredited, state licensed, and unlicensed schools....then a surprising idea or two.

I'll let you in on a little secret: Elaine & I don't have a 401-K, we don't have an IRA, and we don't have any kind of retirement plan except for a few modest investments in land, precious metals, stores, and cash. So naturally, when people ask my advice about a 401-K, they look at me funny when I say "You have one of those?" Don't get me wrong, the theory of a 401-K sounds enticing enough. It's just that when you look at how the money supply is being debased, and the growing risk of being in any kind of financial abstraction, repositioning at least some of your 401-K money into something else might make sense. We start with some numbers from the Fed which almost no one talks about...

So many people wrote in over the past week, saying how much they enjoyed the 'mind map' approach to trading, that I decided to put up a little longer view of the map (what my tentative trading plan is through early fall. What I was going to write about -- redefinition of higher education to reflect economies of information delivery -- will have to wait until next week. You should be able to figure out without too much effort, that something's amiss when information is getting cheaper and higher ed keeps costing more, that there's a structural fly in the ointment somewhere; more on that next week, though. For now, let's focus on taking a few bucks from the corporate elite to fund our own personal (r)evolution with a trading mind map...

This week, I'm combining the ChartPack with the report because we might be approaching the leading edge of global economic collapse in the coming week. The charts below will illustrate some things you could consider because if they are anywhere near right, there are things you may still be able to do in order to avoid tremendous economic pain and suffering later on. We begin by putting some precise numbers for the key lines in the sand on the table:

"Jumping Jehoozeldorf! That's the answer!" Why my subconscious had decided to use a middle 1960's Seattle fire house slang adaptation of "Jumping Jehosephat" to advise me that 2008 was in need of a new word to adequately describe it, while I was happily in the midst of bush hogging a new goat field Friday afternoon, will remain one of life's mysteries. But, remembering that the chief guru of predictive linguistics and I both failed to nail down the word "terrorim" in advance of the huge linguistic tipping point seen in mid 2001 (getting aspects of military and accident however), I had been rolling around what modelspace was predicting for our immediate future now. Simply labeling 2008 as the "Year of Manifestation" following 2007, the "Year of Emergence"... was not was not cutting it. That the lexicon was pushing 200,000, plus thousands of non-English words, meant the word to describe 2008 likely not been overlooked this time. Perhaps 2008 needed was its own new word - one that didn't exist until it condensed as a thoughtform, a few words before Jehoozeldorf's oddly timed return.

This coming year promises to reveal some of the largest difference between humans ever. Not because of things like the onset of the Kondratieff Long Wave Winter in the macro economic world, but because we may get glimpses of how poor the upper middle class of well programmed humans can treat other humans, not as financially endowed. This week we will connect the dots between housing confrontations in New Orleans, the tent cities of Southern California, the years 1421 and 1491, and if that's not enough, we'll throw in the business model of the Catholic church along with moveable type, Martin Luther, UFO's and symbiotic networks. Sounds like a lot to bite off in a quick 15-minute read? Not hardly - in fact it's quite simple, really. It's "paradigms in collision."

Our annual report and outlook. Why I'm planning for 9% inflation in my own spending but reported deflation in 2008.

"George, could you comment on the manipulation of gold prices?" I can't count the number of readers who have asked me to answer that question, especially since the filing by GATA last week of a Freedom of Information Act to force disclosure of information about gold swaps. So, this week my simple mission is to answer definitely - or at least as best I can with available information at hand - is the price of gold being manipulated? We begin...

"I tell you George, it could work," the voice on the other end of the phone insisted. "There is just so much waste from running wars and the whole defense industry, that we could take all that wasted resource and create a 'professional leisure class' and have a much healthier world for it." This intriguing thought, offered by Dr. Ron Klatz, who heads up the American Association of Anti-Aging Medicine, deserves a little closer inspection. Also, a few notes about the future of mechanical trading systems. Shall we?

What would Santa pull out of his bag if he were an economist? Three things come immediately to mind including a plan to move Christmas to a better time of the year (and don't worry, theologically it's OK), a simple chart to unravel most political/economic news stories you'll encounter, and some pointers on how to "store value" while balancing risks. Ready to open some presents? Let's start with some sound reasons to move the date of Christmas...

Money, as a means of storing value, has evolved through three major stages. Beginning with the ‘tangible assets” phase, consisting of land, crops, livestock, fruits of labor (housing), and natural resources (level 1), and progressing through the precious/monetary metals stage (level 2), the world is presently in what may be the final phase of several paper currencies (level 3). Chief among these is the U.S. (level 3) dollar, which has seen purchasing power fall from an absolute dollar since the 1913 implementation of the Federal Reserve to what is now less than 5-cents of purchasing power (e.g. PPP) through expansion of the monetary base out of relation to value produced. In light of this, an alternative fourth generation of value storage is proposed: Digital Currency. Highlighted are the anti-crime, tax avoidance, two-tiered currency aspects, banker/corporate control of governance (PAC’s, et al), and privacy issues related to a true National Digital Currency (NDC) as an alternative to the conventional fiat (level 3) currencies. A method of implementation is inferred along with one big social impact.

We also have that potentially trillion dollar plus foreclosure/debt issue... includes spreadsheet and track of 1987 and 1929 comparisons...

Elaine and I were just about to sit down to dinner when an old friend called Friday night, concerned about how things were looking in the fixed income market. I've got sources in a lot of places and some of them are seeing the market priced as though the foreclosure rate will increase to where between 20% and 50% of all subprime loans will be foreclosed on in the near future. Later this week, a spreadsheet I'm putting together based on how the next two years will look, but if you can wrap your head around 1-million+ being foreclosed on, you'll get the idea. But, that's not the really bad news. It actually gets worse from there...

It's not open yet, so don't jump. But, contingency planning is key about now, so a quick review of pre-crash planning....

How's this sound: "Global War in Two Years"? I've written many times in past columns about how as the world comes to the end of its resource 'string' we will see the outbreak of fighting over what little scraps of oil, arable land, untainted food, and such that remain. What I haven't tried to do is put down a specific sequencing of events that could lead to such an outcome within a very short period of time - like a couple of years - tops. Just like a doctor running tests to find out how a disease will progress, this week's report will give a short summary of where current trends take up, and we'll seek the key inflection points which put us on the road to the most deadly of outcomes.

While it would seem that the Dow is doing just dandy, and the US economy is doing better than any reasonable person would have expected, except for the the profits/spoils or war, it's instructive to review how the Dow and other indices look when valued in something other than falling US Dollars. What we find, for example, is that the global aggregate index I track, is down nearly 15% since its peak in 1999 when valued in Euros rather than native Dollars. In US dollars it looks like it's up 17% in the same period. You don't hear much about this in mainstream financial publications, but it supports my notion that competitive currency devaluations are the modern-day (before the Crash) equivalent to the (after Crash) Smoot-Hawley Tariff Act, or will be seen as such by future researchers. Once we're through a little 'chalk talk' on that, we'll wade through some interesting things in the inbox.

Although I admit to being publicly bullish for a while, that window is quickly closing. Later this week, I expect the market will experience a modest recovery, and while it may yet reach new higher highs, the longer term view is that the Dollar is in a world of hurt. We're in the present position because of our own making, and it boils down to this: The very people who were supposed to ensure that the US Dollar was always sound somehow redefined their role from one of monetary quality to one of corporate economic policy implementation. In other words, due to various political pressures, the value underlying the US dollar was eroded because of the political pressure to 'manage the economy' rather than support sound money. Where does it end? As always, with a crash of major proportions. I've pulled out seven of my favorite books on the subject of market crashes, and using some of the ideas in them, we'll throw a dart or two at the calendar for when the Big One to occur. We won't have long to wait.

This is an especially conflicted time of year for millions of Americans. We don't know if we're supposed to be Baseball Fans or Football Fans - and most of us don't have enough money in the bank (or a big enough severance package from the last gig) to pursue both. Besides, little matters like lawns, leaves, and families do require attention. Along with the nest egg. So in keeping with season I'm only going to cover three things today and be "Out!" - mind amplifiers and computers, a macro-trend to be on the lookout for in high tech stocks, and a high water timing mark for a major decline in Winter. Of course, the only way I can cover all that ground in about two minutes is to use football minutes. That's a particularly anomalous area of physics where "2-minutes remaining" is a long enough period of time to kill all humans daring to hold their breath for just two minutes. Most pearl divers would die with more than a minute left.

A strange and subtle thing will happen if Ray Kurzweil is right - over the coming few years, the world will move into a twilight zone where creation of new 'things' will become almost instantaneous. If you can think it, it can be built - in many cases right online with services like www.emachineshop.com (disclosure: a client) and the whole new class of 3-D printers; devices that will output "things". While this outputting of things sounds really neat, there's a whole other class of possible investments which might make sense specifically because they can not be mass produced: things like land, fish, air, and for lack of a better term, 'natural resources.' The problem, which I didn't see addressed in Kurzweil's "The Singularity is Near" is that just like physics (of the classical sort) requires an object approaching the speed of light to be pushed by ever greater amounts of energy, so too, ever-faster computational powers and lightning bolt fast development, also call for exponential growth of capital for infrastructure - and what I call "Ure Corollary 13: Accelerated obsolescence which (you may not like this) translates to wasted resources.

No, this is not a discussion of what's ahead for the dollar -- as in the "dollar's fate being in limbo". Nope, this as we do each week, is an examination of options available to us 'little people' as the dollar goes limbo -- using the word as in the Caribbean "how low can you go Limbo" dance. As simple chart, a simple question, a review of Russia and Argentina's experiences, and a quest for some simple contingency plans, that's what a number of readers are asking about. The trick, as with any good Limbo (the dance) is how to figure out how 'low you can go' without hurting yourself or having your personal economic fall over. To steal half a lyric from Bobby McFerrin, "Don't worry, be happy, be limbo..."

There's a whole dimension of economics that's not taught to most people, first because they'd likely go to sleep during the class, but secondly because it's a very hard concept to explain - the whole notion of how international paper money exchange works. But you can short-circuit a lot of the boredom by considering economics as an analog to the well-established principle called "redshift". In interstellar space, a star moving away from us looks more red, while a star moving toward us looks more blue. That's called blueshift by the scientifically studied. This week, we'll discuss economic redshift, which as the term implies, is what happens to economic dreams of average folks when the purchasing power of their currency moves away from them. Rather quickly, at that.

This promises to be one hell of an interesting week, and although the original plan (Saturday's, but these things are constantly changing) was to write up the likelihood of China not putting up with Taiwanese independence (to the point of UN recognition) has to take a backseat to the more complex global economic stew: "Can dollar death be cheated, once again?" We've got a number of things to look at, including my "peak to crash" chart, some nuances from my OBV options theory, the Fed meeting, Greenspan comments, and more, not to mention building tensions in the Middle East and even a new investment idea - so let's turn on the 'analysis blender' and see if we get daiquiris or garbage disposal output, shall we? The 19th/Turn Date is almost here, and there are plenty of 'life shifting' events out on the horizon to be considered. Got coffee?

Although one faction of the "powers that be" (PTB) might seem to have pushed the USA past what was an emerging Second Depression when the 'terror' event of 9/11 occurred with such amazing convenience in late 2001, and launched the country on its "War on Terror" and "Wars for Freedom" gambit, which I characterize from an economics perspective as a modern-day equivalent to the Works Progress Administration and Civilian Conservation Corps equivalents from the 1930's, it turns out we will likely have a major world war about 10-years after the 2000 'slow crash' anyway because the WOT and OIF has not 'reset the clock for other factions in the global power structure. The outcome, as WOPR would say, is probably global thermonuclear war. Which, to my way of thinking, would qualify as a largish historical "Ooops!". This week, how we got there and where to next as we enter what could easily be a crash week.

We don't go to work for nothing - there has to be some cheese in the trap, or we wouldn't keep going back to work day, after day, after day. Gear up with your 'skeptical helmet' it-s time for the Peoplenomics annual state of labor review. This is the stuff that escapes daily notice by most folks, amidst the drone of mass merchandising, selling you junk you don't need to live this week's version of the American Dream, because the assumptions are not questioned, and thus, the Big Trends are safely hidden in plain sight. Maybe laboring for a living at what you do is really worth more this year than last. But then again... Let's look behind the curtain, and see what we shall see, shall we?

So what if this week's chart of the current market looks like it's eerily following a similar post-peak trajectory compared with 1929 and 1987 (see this week's ChartPack). The real question for world's 37 remaining rational investors is to spot the Next Bubble so we can all pile in on the ground floor of that one and make a bunch of money before the rest of the world catches on. But, what if there is no next bubble? Maybe we better continue our study current economic thinking about bank runs. Recent events in California, not to mention the recent trouble in Second Life's virtual economy should be a smack upside the head' for even the most confident of investors.

A chart and some comments on what I expect the market to do between now and the Labor Day holiday.

Before I explain to you how I use open interest in options to spot potentially tradable market discontinuities, let me first give you the REALLY BIG news: The end of corporate globalism may be pulling into view. No doubt an outlandish claim from a back woods economist/academic in East Texas, but consider that on a purchasing power basis the global markets are down more than 28% from their 2000 peak, and a 400 point decline from here would put the global market index where it was in nominal terms in March 2000. A little less 'global progress' than you thought? But it may be tradable as I'll show you with two charts and a discussion of options equilibrium.

This is a special mid-week update for subscribers containing three important items. The correlations between the market decline in 1929 and 1987 updated, our correlation tracking chart, and an update on the "instant millionaire program" which seems unlikely to be dining on prime rib anytime soon - more like hamburgers or dumpster diving...Projected closes for three trading days based on a 1929 track.

Before we get into this week's overview of developments in global finance, let me first ask you a simple question: At what point does the open conspiracy of Central Banks to intervene in otherwise free markets by pumping more than a third of a trillion dollars begin to meet the definition of "price fixing"? I found myself Sunday morning asking "At what point can victims of subprime loans, and those of us who have been short the market, claim damages as a class and go for a class-action lawsuit to set things straight?" A quick call to my attorney got a longer version of "Why would anyone think the casino isn't rigged?" That may be, and this huge printing-press spree will ultimately cause the very inflation the Fed has been talking about (and it will no doubt buoy gold prices, too), but I'd argue that dispossessed homeowners and those who short financial markets for sound fundamental reasons are demonstrably victims of price fixing. The subprime promotion by the Fed might never have occurred if speculators didn't have the fat cats in the back room urging them forward while the printing presses were readied for the bailout. Anyone up for a little pro bono work?

It's been called the 'derivatives bomb" and everyone is hoping that it won't be going off any time soon. But, with the collapsing in the mortgage obligations market, one can never be too certain of what's ahead. The choices are basically shelter or ride things out in place, or go before the crowd. This week, a short excursion through the media hype to rethink our philosophy of being "ready for anything" with some updated options for bugging out.

I had first starting writing about what I projected would be labeled the "Manufacturer's Resource Wars" by future historians in one of my free UrbanSurvival.com articles in September of 2002, or maybe earlier. At the time, it was not-yet-in-vogue to view the future as holding an end of cheap energy and the planet running out of resources as main lifestyle-driving issues. Amazing what a few years will do, though, isn't it? This week, we focus on an interesting duality emergent here on the ant farm called "Earth": The emerging differentiation between declining choice in physical goods and the increasing choices in intellectual content and how declining energy resources will likely push that gap wider. Our first stop: The U.S.S. Enterprise...

Financial Outlook by the People's Economist
of www.urbansurvival.com

The Peoplenomics^© Newsletter

Financial Outlook by the People's Economist of www.urbansurvival.com

The Peoplenomics© Newsletter

Financial Outlook by the People's Economist
of www.urbansurvival.com

The Peoplenomics^© Newsletter