HALF-FULL REPORT 08/05/11

Bagnoli, Naples, Italy.  Who knew Hell could be so beautiful?

I’m sitting in a flower garden overlooking the Mediterranean.  In front of me is the islet of Nisida, where at his villa, Marcus Junius Brutus (85-42 BC) and his conspirators planned the assassination of Julius Caesar.  Off to the left looms Mount Vesuvius, and in the distance is the Isle of Capri.

On the other side of the hill behind me lies The Solfatara, a volcanic crater filled with boiling mud pools and vents hissing and steaming with sulfuric gasses.  For the Romans, it was feared as the home of Vulcan, the god of fire.

Next to Solfatara lies a crater lake called Avernus, Lake Averno.  For thousands of years, from Homer in The Odyssey, to Virgil in The Aeneid, to Dante in The Divine Comedy, it was revered as the entrance to Hell.

My wife and I are not here to go to hell, but to visit our son who, as a USMC Captain, is stationed at the NATO Command nearby that is running the war in Libya.  Nonetheless, this seems a uniquely appropriate place from which to write this HFR as America is descending into economic and political purgatory.

For it’s not just us – Italy is jumping into Lake Averno too, along with Spain.  Greece has already drowned in it:  paying 32.76% interest on its 2-year notes (that is not a typo).  The ECB’s (European Central Bank, the Fed of the EU) buying some 20% of Greek debt has done no good whatever.

Both Italy and Spain are now paying over 6% on 10-years.  Italy is the third-largest bond market in the world with Spain not that far behind.  The ECB has no capacity to support their debt with bond purchases.  With the euro ridiculously overvalued, full-on debt monetization seems inevitable with the eurozone plunging into the hell of  hyper-inflation.

For the only other alternative, kicking the debt-beats out of the euro, would leave the last folks standing like the Germans, with a hyper-overvalued currency that would price their exports out of the market.  Recall that Germany is the most export-dependent economy on earth, more than China.

How far is America from Lake Averno?  Close.  First in will be the idiots currently panic-buying US Treasuries, willing to loan Washington their money for two years to get less than 3/10^th of one percent interest (0.285) and 2.46% for 10 years.  (All government bond figures are at market close yesterday, 8/04).

With US debt now over 100% of GDP thanks to the Congress’ criminally perverse $2.4 tril debt raise, the rating agencies cannot avoid knocking the US off its AAA perch.  The Fed will then be forced to raise interest rates, and all subsequent rates (e.g., mortgages and credit cards) will follow.  The Great Recession will become the Great Depression II.

The only good news is that Zero will own it.  And the more he screams and shrieks it’s not his fault, the more voters will blame him.

This is a perfect set up for Rick Perry to win the Pub nomination and the White House.  If Perry is just half as good as his rhetoric, he’ll get us out of purgatory, if not into political heaven.

Remember that theologically, purgatory is temporary hell, the place where basically good souls go to be purged of their sins and cleansed for heaven.  America is suffering for the idiotic sin of electing Zero, which must be purged.  Electoral actions have consequences.

America’s Purgatory will continue and worsen all next year.  The price has to be paid, the lesson must be learned the hard way.  Then we can exit Hades and live in the sunshine again.

Oh – sure looks like he’s running.  Here’s an ad just put out by a pro-Perry group called Jobs for Iowa that’s spending $40K to run it on Fox News for the next two weeks – in Iowa.

 
 
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As of market close yesterday (8/04), the Dow has lost 1,300 points or 10.5% in the last two weeks.  That means almost $2 trillion in market value has vanished.  And a number of analysts consider that stocks are still overvalued by 30%.

So, thanks to Zero’s destruction of our economy, we get to learn a marvelously big word:

Floccinaucinihilipilification.  It means the process of estimating something as worthless, like what you have to do sometimes on a first date.  It’s pronounced flock-see now-see nilly-pilly-fication.  Practice saying it fast and smoothly.  It’s what we’re all going to be doing regarding the value of our paychecks and assets – and what all voters should be doing regarding the value of the Zero Presidency.

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Time for a couple of international bulletins.

How about this for the head fake headline of the week?  Israel ‘ready to negotiate borders with Palestinians’.  The story, dated Monday (08/01) starts:

"Benjamin Netanyahu, the Israeli prime minister, has bowed to US pressure by agreeing for the first time that a Palestinian state should roughly follow the contours of the 1967 ceasefire lines separating the West Bank from Israel."

That’s the head fake.  We find the real story when we discover that Bibi’s capitulation depends "on the Palestinians… accepting Israel as a Jewish state."

Like that’s going to happen.  Rather than "a major climb down" as the story pretends (did Bibi’s communication director write this article for the London Telegraph?), this is a brilliant move to shaft both Zero and the Palestinians. 

Whatever will Zero and the PIAPS do when Hamas and the PA say no, which of course they will?  These terrorist shmucks cannot even say the name of Israel – they insist on calling it "the Zionist entity" – much less recognize its legitimate existence.

The funniest aspect of this is that Zero and the Hate-Israel crowd dominating the State Department are high-fiving themselves this week and remain clueless that they’ve been royally snookered.

For this, Bibi has to the HFR Hero of the Week.

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The Jerk of the Week has to be Russia’s chief mafiosi, Vladimir Putin.  On Monday (8/01), he told a bunch of kids that America is a "parasite" on the world economy.   Right.  The US produces almost a quarter of the entire world’s GDP ($14.5 of $62 trillion).  We are even exporting chopsticks to China.

Russia, by contrast, produces nothing but overpriced oil and gas which it uses as a weapon against Europe.  When it called itself the Soviet Union, it was the world’s curse, the ultimate parasite of the 20^th century.  It continues to operate today as a country of thugs and gangsters.

It makes every effort to preserve dictatorships and thwart political freedom in its former colonies – Georgia in particular.  Russian troops have seized and control two regions within Georgia’s borders, Abkhazia and South Ossetia. 

On September 22 of last year a bomb went off near the US embassy in Tbilisi, Georgia’s capital, while a second one was found and defused.  A dozen other bombs were found to be planted throughout the country, disguised as boxes of candy.

Last week (7/28),  James Clapper, Director of National Intelligence, released a report on the bombs to both the House and Senate Intelligence Committees, concluding that a Russian military intelligence (GRU) officer, Major Yevgeny Borisov, stationed at a Russian base in Abkhazia, conducted the bombings via his agents in Georgia.

The report further concluded Major Borisov was acting at the direction of the Kremlin.  And that this is part of an emerging policy of threats and intimidation of US diplomats in Russia, including blackmail efforts with photoshopped pictures of them with underage girls, and phony accusations of child rape.

And that bunch of kids Pooty-poot was bad-mouthing America to?  They were part of Putin’s youth group patterned on Hitler’s Brown Shirts.  It’s called Nashi (Ours), and part of its mission statement was directly plagiarized from Joseph Goebbels.

The main driver of the Russian economy is Gazprom, the world’s largest natural gas producer.  Its prices are extortionate as its European customers have no alternatives.  Until now.   

Cheniere Energy is a company based in Houston, Texas, specializing in LNG terminals.  Realizing that shale gas fracking was the death knell of US terminals to import liquefied natural gas (and thus their company), they pivoted to revamp their terminal to export LNG.

Cheniere just signed a deal to export LNG to Lithuania – one of the three Baltic former Soviet Russian colonies – at one-third less the price of Gazprom’s.  Cheniere will supply Lithuania’s entire gas needs.  Gazprom, and Russia, is up the American fracking creek in Lithuania.  It’s a start.

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And here’s another start.  Last Monday (8/01), Ron Paul (R-TX) introduced a bill – HR 2768) – that would immediately wipe out $1.6 trillion of US federal government debt. This is debt the Feds owe to themselves, via the Federal Reserve buying US Treasuries.

The text of the legislation is not up yet on Thomas.gov, so it will be interesting to see the wording and mechanism advocated (it should be up in a few days).

The bill’s purpose is doubly clever.  By wiping out $1.6 tril over Helicopter Ben’s sure-to-be hysterical protestations, it prevents Bernanke & the Fed from further printing money out of thin air.  It’s a start.

But this is the end of this HFR.  Remember the Wheeler family motto, drilled into my head by my father and grandfather when I was in knee-shorts:

There is a solution to every problem
The sun will shine after every storm
The soul’s highest duty is to be of good cheer

We’ve got to remember this all the way to November 2012.  We will get out of purgatory.