Sunday, October 22, 2006
Hunker down and put your house in order
Harry Schultz Life Strategies
~ For THINKING humanoids ~ (in 80 nations)
Hunker down and put your house in order
Harry Schultz
extracted from the Harry Schultz Letter [HSL] #656, dated Oct 1, 2006 - DJIA 11,679
Oct 23, 2006
HSL Only US$382 for a 2-yr subscription, an Absolute Must Buy! click
Big Picture
For this double-birthday (mine & HSL) edition, I'm going to boldly go where no one has skateboarded before. If U find it brain-boggling, blame the fumes from scores of birthday-cake candles. This ties in with our cartoon of the month, reflecting that if U want to help "fix the world," U have to stick your neck out -- which I have done for 42 years in HSL. Our seemingly-random choice of the long-neck giraffe as our mascot/symbol was apparently no accident. Here we go, with neck out-sticking:
October 2006 is potentially the most dangerous, risky month in modern history. That's mostly because US elections come on Nov 7. Geopolitically (where HSL "lives"), the US is bound like Gulliver (the giant tied down by the little people, the Lilliputians). Its military is stretched to a danger point & its mostly bumbling politicians (red & blue) are unable to escape the clutches of 2 losing & unwinnable wars... literal tar pits. That makes the following otherwise-illogical moves as logical possibilities in October, when Washington would be acting or failing to act, for election reasons:
1. Washington's so-called neo-cons coerce Bush to bomb Iran & immediately declare Martial Law or a state of war in the US, to stem dissent. This could swing enough disillusioned conservative voters & some war-frightened swing-voters to vote Republican & prevent a Democrat Congress election win, which would in turn block the widely rumoured plan by Democrats (if they control the House) to impeach Bush &/or try Bush&Cheney for war crimes.
••• Flash: 9/20 NYT/CBS poll shows public very unhappy with Congress, favour voting OUT all incumbents. This puts big pressure on White House to reverse public opinion (via radical action?). Or:
2. Israel bombs Iran, alone. Highly unlikely due to govt unpopularity, but if successful would make govt popular again, & may be necessary if they fear Bush won't act, ever. Rumour says it's being considered. Or:
3. Israel bombs Iran with US help/blessing, & both declare a state of war.
4. Russia invades (liberates) Abkhazia & South Ossetia & gets into position to invade or isolate north Georgia. This prediction is certain to come true, if not now, then a bit later. But, Oct would be an ideal month -- when Bush would be loathe to support or help Georgia with US under pressure elsewhere, & when he dare not risk any new US military commitment, strongly opposed by voters. Russia will ignore world outrage. They couldn't care less. They hold all the aces (oil / gas / nuclear / natural resources / public support).
5. If Israel &/or US declare state of war, look for US & Israel foreign exchange controls with immediate effect. Sending funds abroad blocked/limited. (word to wise is-)
6. If any of the above occur, commodity / metal / oil mkts will move notably higher. Oil would lead the way. If Iran is bombed (now or later) they'll close the Strait of Hormuz in the Persian Gulf -- through which most regional oil must pass, increasing oil's price by 50% in one day. Don't be without 1-2 good oil stocks.
7. I'm told in the 3rd week of Oct, US history's greatest personal/character attacks will take place against politicians in key red/blue states, near enough to Nov 7 to prevent a proper defence by the accused, mainly by Republican neo cons who fear losing the power they've come to love. It'll be akin to the attack on John Kerry & his Swift boats -- which probably cost him the election.
8. Some geo-political wild card may be played during Oct when Washington is in limbo, something as wild as a China invasion of Taiwan, or China takeaway of the Spratly Islands, or a No. Korean mega missile test, or a No. Korean attack on So.Korea, or a coup d'état in Pakistan - putting nukes under control of militants, etc. Oct is a free pass month for wild/risky moves.
9. A crisis is brewing at the US Fed. Reread my 6/4 pg 2 report re Fed vice chairman Ferguson, in charge of crisis management, who resigned suddenly - with 8yrs left to serve. Will he blow the whistle in Oct on "illegal" or outrageous Fed actions, to stop the rot? Oct might tempt him.
10. Beans spilling has just begun with revelations that US govt spending/deficits are vastly bigger than reported (& the reported ones are already horrors). This may have political repercussions in Oct. Congressman Jim Cooper (D-Tenn) says US Financial Report by US Treasury Dept (which nobody reads or knows exists) reveals "US debt & commitments total not the $8.3 trillion reported, but $49 trillion, 6x more than reported! Also, the US deficit is not 2.6% of GDP & shrinking, but 6.2% of GDP & growing fast." Also, the true 2005 deficit was not PB's $318.5 billion, but $760 billion. There's more & an explanation of the different yardstick mirror tricks (U can check it out here - to The Financial Report of the United States, which Congressman Cooper is now publishing for the whole world to read. - U can also vet the data from: The Financial Report of the USA [you can buy from Amazon], published by Nelson Current & called by Cooper "the official report the White House does not want you to read." Also contains letters from David M. Walker, Comptroller General & head of the US Govt Accountability Office (GAO), who matter-of-factly states that America has a "broken business model."
11. Nations secretly buying gold, £'s & euros may do so more heavily in Oct, knowing DC unlikely to punish them (being too busy politicking), & sensing a change in Congress & thus US policy via Nov election.
12. Psychologically, the world is moving en masse into a disillusion & despair phase, replacing former fear & aggression phase. Disbelief is becoming dominant. We saw it strongly recently in Thailand, Lebanon, Japan, Germany, Italy, Sweden, UK & in the US - where its effect on US elections will favour the less aggressive Democrats. The Republicans can outspend the Dems 5 to 1, & US Oct TV will be choked with poli-ads. But negative ads may backfire per my observation above.
13. Hezbollah may kick up trouble in Oct, a surprise. US & Israel may be slow or reluctant to act, per # 11.
14. Oct may see a surge into deflation. This reflects less govt credit creation & money pumping. No helicopters dropping $'s. Also reflects rapidly deflating housing bubble. Commodities May-Sept washout may continue into Oct, or if not, can have spillover effect. This probably relates to my 5-year forecast cartoon in HSL640 (5/9/04) showing the transition from rising inflation to disinflation to deflation to recession to X (economic chaos? Depression?).
15. One psychological study sent me pinpoints Mar-Aug 2011 as the "1931" of our future (ie, mid depression). This fits my prediction cartoon if projected 2 more yrs. Cheerful, eh? But nothing is to be feared if one is aware & prepares for various scenarios.
••• Since writing those words, The Economist mag headlines: Weapons of mass disinflation. They note "Cheaper goods from China do not just reduce the prices of our imports, but the prices of all goods sold in [our &] competing domestic mkts." !! And competition from emerging nations holds down inflation not just in traded goods but also in non-traded ones, by restraining wages" !! So cheap goods from China, etc, is a very sharp 2-edged sword that is doing karate-chops to biz profits & wage earners. This is an unexpected (by govt/public) deflationary surge, linking up with a commodity correction. For the shorterm, at least, deflation is a real worry (as friend Hugh Hendry predicted--see last GCRU) & if it gets out of control, it will quickly lead to a mega recession. This will affect US election also, as Oct news reports it daily.
16. This isn't a forecast, but historically, Oct has been the month-of-choice for major stock mkt crashes. I've been moderately bullish on US stocks, but S&P chart is in a bearish rising wedge. Not much left to go; make or break in Oct. Nasdaq is stronger, but is possibly in a year 2000-type blow-off stage. History repeats? DotComs caused the 2000 NAS blow-off. Will the Aug-Sept bursting of the housing bubble cause the Oct 2006 NAS blow-off?
17. If US stks fall, world will follow.
***This list sounds radical, but are we not in radical times? TIME mag thinks so, features Iran's president on its Sept 25 cover & interviews him. Buy a copy. TIME says a US cruiser, minesweepers & mine hunters are ordered to be ready to move (to the Gulf) by Oct 1. There's that word October again. Mine sweeping is essential if Iran plants mines as in last Iraq war. This reminds me of ship movements before the Iraq invasion. It was a giveaway that Bush planned to invade before he heard from UN inspectors or told Congress; he put troopships in place & pretended he had not yet decided. I reported this deceptive anomaly at the time, but the media didn't see it or want to report it. Déjà vu.
Time's excellent analysis notes: "On the face of it, a war with Iran is absurd." But they quote Ali Ansari, top think-tank Iran analyst: "We are headed for conflict." TIME quotes some who say Iran could become able to enrich enough uranium to fuel a bomb well before it actually assembles a nuclear device. "Some believe that is when a nation becomes a nuclear power. That red line, experts say, could be just a year away." IMO, GB wants that moment to come on his watch. By acting in Oct '06, he gets 2 birds with one net. If the Pentagon can't do it in Oct 06, then Oct 08 could work for the Nov 08 election. Flip a coin.
••• CNN interviewed Mr.Bush on 9/20. GB said if he gets evidence Iran is building a bomb, he'd take pre-emptive action. An Asian cynic commented "Israel could always manufacture it." (more Déjà vu)
•••• I hope most of the above doesn't take place, & normal odds say most won't. But power corrupts; power literally changes the human brain to do things beyond normal odds & expectations. So, dear reader, hunker down & put your house in order "just in case."
If U reread this Big Pic U'll see what to do; read between the lines.
UH
Archives
© Copyright 1964-2006 F.E.R.C.
Please Visit our Links for more related material.
~ For THINKING humanoids ~ (in 80 nations)
Hunker down and put your house in order
Harry Schultz
extracted from the Harry Schultz Letter [HSL] #656, dated Oct 1, 2006 - DJIA 11,679
Oct 23, 2006
HSL Only US$382 for a 2-yr subscription, an Absolute Must Buy! click
Big Picture
For this double-birthday (mine & HSL) edition, I'm going to boldly go where no one has skateboarded before. If U find it brain-boggling, blame the fumes from scores of birthday-cake candles. This ties in with our cartoon of the month, reflecting that if U want to help "fix the world," U have to stick your neck out -- which I have done for 42 years in HSL. Our seemingly-random choice of the long-neck giraffe as our mascot/symbol was apparently no accident. Here we go, with neck out-sticking:
October 2006 is potentially the most dangerous, risky month in modern history. That's mostly because US elections come on Nov 7. Geopolitically (where HSL "lives"), the US is bound like Gulliver (the giant tied down by the little people, the Lilliputians). Its military is stretched to a danger point & its mostly bumbling politicians (red & blue) are unable to escape the clutches of 2 losing & unwinnable wars... literal tar pits. That makes the following otherwise-illogical moves as logical possibilities in October, when Washington would be acting or failing to act, for election reasons:
1. Washington's so-called neo-cons coerce Bush to bomb Iran & immediately declare Martial Law or a state of war in the US, to stem dissent. This could swing enough disillusioned conservative voters & some war-frightened swing-voters to vote Republican & prevent a Democrat Congress election win, which would in turn block the widely rumoured plan by Democrats (if they control the House) to impeach Bush &/or try Bush&Cheney for war crimes.
••• Flash: 9/20 NYT/CBS poll shows public very unhappy with Congress, favour voting OUT all incumbents. This puts big pressure on White House to reverse public opinion (via radical action?). Or:
2. Israel bombs Iran, alone. Highly unlikely due to govt unpopularity, but if successful would make govt popular again, & may be necessary if they fear Bush won't act, ever. Rumour says it's being considered. Or:
3. Israel bombs Iran with US help/blessing, & both declare a state of war.
4. Russia invades (liberates) Abkhazia & South Ossetia & gets into position to invade or isolate north Georgia. This prediction is certain to come true, if not now, then a bit later. But, Oct would be an ideal month -- when Bush would be loathe to support or help Georgia with US under pressure elsewhere, & when he dare not risk any new US military commitment, strongly opposed by voters. Russia will ignore world outrage. They couldn't care less. They hold all the aces (oil / gas / nuclear / natural resources / public support).
5. If Israel &/or US declare state of war, look for US & Israel foreign exchange controls with immediate effect. Sending funds abroad blocked/limited. (word to wise is-)
6. If any of the above occur, commodity / metal / oil mkts will move notably higher. Oil would lead the way. If Iran is bombed (now or later) they'll close the Strait of Hormuz in the Persian Gulf -- through which most regional oil must pass, increasing oil's price by 50% in one day. Don't be without 1-2 good oil stocks.
7. I'm told in the 3rd week of Oct, US history's greatest personal/character attacks will take place against politicians in key red/blue states, near enough to Nov 7 to prevent a proper defence by the accused, mainly by Republican neo cons who fear losing the power they've come to love. It'll be akin to the attack on John Kerry & his Swift boats -- which probably cost him the election.
8. Some geo-political wild card may be played during Oct when Washington is in limbo, something as wild as a China invasion of Taiwan, or China takeaway of the Spratly Islands, or a No. Korean mega missile test, or a No. Korean attack on So.Korea, or a coup d'état in Pakistan - putting nukes under control of militants, etc. Oct is a free pass month for wild/risky moves.
9. A crisis is brewing at the US Fed. Reread my 6/4 pg 2 report re Fed vice chairman Ferguson, in charge of crisis management, who resigned suddenly - with 8yrs left to serve. Will he blow the whistle in Oct on "illegal" or outrageous Fed actions, to stop the rot? Oct might tempt him.
10. Beans spilling has just begun with revelations that US govt spending/deficits are vastly bigger than reported (& the reported ones are already horrors). This may have political repercussions in Oct. Congressman Jim Cooper (D-Tenn) says US Financial Report by US Treasury Dept (which nobody reads or knows exists) reveals "US debt & commitments total not the $8.3 trillion reported, but $49 trillion, 6x more than reported! Also, the US deficit is not 2.6% of GDP & shrinking, but 6.2% of GDP & growing fast." Also, the true 2005 deficit was not PB's $318.5 billion, but $760 billion. There's more & an explanation of the different yardstick mirror tricks (U can check it out here - to The Financial Report of the United States, which Congressman Cooper is now publishing for the whole world to read. - U can also vet the data from: The Financial Report of the USA [you can buy from Amazon], published by Nelson Current & called by Cooper "the official report the White House does not want you to read." Also contains letters from David M. Walker, Comptroller General & head of the US Govt Accountability Office (GAO), who matter-of-factly states that America has a "broken business model."
11. Nations secretly buying gold, £'s & euros may do so more heavily in Oct, knowing DC unlikely to punish them (being too busy politicking), & sensing a change in Congress & thus US policy via Nov election.
12. Psychologically, the world is moving en masse into a disillusion & despair phase, replacing former fear & aggression phase. Disbelief is becoming dominant. We saw it strongly recently in Thailand, Lebanon, Japan, Germany, Italy, Sweden, UK & in the US - where its effect on US elections will favour the less aggressive Democrats. The Republicans can outspend the Dems 5 to 1, & US Oct TV will be choked with poli-ads. But negative ads may backfire per my observation above.
13. Hezbollah may kick up trouble in Oct, a surprise. US & Israel may be slow or reluctant to act, per # 11.
14. Oct may see a surge into deflation. This reflects less govt credit creation & money pumping. No helicopters dropping $'s. Also reflects rapidly deflating housing bubble. Commodities May-Sept washout may continue into Oct, or if not, can have spillover effect. This probably relates to my 5-year forecast cartoon in HSL640 (5/9/04) showing the transition from rising inflation to disinflation to deflation to recession to X (economic chaos? Depression?).
15. One psychological study sent me pinpoints Mar-Aug 2011 as the "1931" of our future (ie, mid depression). This fits my prediction cartoon if projected 2 more yrs. Cheerful, eh? But nothing is to be feared if one is aware & prepares for various scenarios.
••• Since writing those words, The Economist mag headlines: Weapons of mass disinflation. They note "Cheaper goods from China do not just reduce the prices of our imports, but the prices of all goods sold in [our &] competing domestic mkts." !! And competition from emerging nations holds down inflation not just in traded goods but also in non-traded ones, by restraining wages" !! So cheap goods from China, etc, is a very sharp 2-edged sword that is doing karate-chops to biz profits & wage earners. This is an unexpected (by govt/public) deflationary surge, linking up with a commodity correction. For the shorterm, at least, deflation is a real worry (as friend Hugh Hendry predicted--see last GCRU) & if it gets out of control, it will quickly lead to a mega recession. This will affect US election also, as Oct news reports it daily.
16. This isn't a forecast, but historically, Oct has been the month-of-choice for major stock mkt crashes. I've been moderately bullish on US stocks, but S&P chart is in a bearish rising wedge. Not much left to go; make or break in Oct. Nasdaq is stronger, but is possibly in a year 2000-type blow-off stage. History repeats? DotComs caused the 2000 NAS blow-off. Will the Aug-Sept bursting of the housing bubble cause the Oct 2006 NAS blow-off?
17. If US stks fall, world will follow.
***This list sounds radical, but are we not in radical times? TIME mag thinks so, features Iran's president on its Sept 25 cover & interviews him. Buy a copy. TIME says a US cruiser, minesweepers & mine hunters are ordered to be ready to move (to the Gulf) by Oct 1. There's that word October again. Mine sweeping is essential if Iran plants mines as in last Iraq war. This reminds me of ship movements before the Iraq invasion. It was a giveaway that Bush planned to invade before he heard from UN inspectors or told Congress; he put troopships in place & pretended he had not yet decided. I reported this deceptive anomaly at the time, but the media didn't see it or want to report it. Déjà vu.
Time's excellent analysis notes: "On the face of it, a war with Iran is absurd." But they quote Ali Ansari, top think-tank Iran analyst: "We are headed for conflict." TIME quotes some who say Iran could become able to enrich enough uranium to fuel a bomb well before it actually assembles a nuclear device. "Some believe that is when a nation becomes a nuclear power. That red line, experts say, could be just a year away." IMO, GB wants that moment to come on his watch. By acting in Oct '06, he gets 2 birds with one net. If the Pentagon can't do it in Oct 06, then Oct 08 could work for the Nov 08 election. Flip a coin.
••• CNN interviewed Mr.Bush on 9/20. GB said if he gets evidence Iran is building a bomb, he'd take pre-emptive action. An Asian cynic commented "Israel could always manufacture it." (more Déjà vu)
•••• I hope most of the above doesn't take place, & normal odds say most won't. But power corrupts; power literally changes the human brain to do things beyond normal odds & expectations. So, dear reader, hunker down & put your house in order "just in case."
If U reread this Big Pic U'll see what to do; read between the lines.
UH
Archives
© Copyright 1964-2006 F.E.R.C.
Please Visit our Links for more related material.
