Marc Faber on the Economy

I thought this was an interesting interview. 

Stop the Lies

Interesting collage video. 

The Desert Blooms

I remember the propaganda I believed years ago. In particular it was the idea that the modern state of Israel was causing the desert to bloom. This was supposedly a fulfillment of Bible prophecy. 

Isaiah 41:18-20

I will make rivers flow on barren heights, and springs within the valleys. I will turn the desert into pools of water, and the parched ground into springs. I will put in the desert the cedar and the acacia, the myrtle and the olive. I will set pines in the wasteland, the fir and the cypress together, so that people may see and know, may consider and understand, that the hand of the Lord has done this, that the Holy One of Israel has created it.

And this:

Isaiah 51:3

The Lord will surely comfort Zion and will look with compassion on all her ruins; he will make her deserts like Eden, her wastelands like the garden of the Lord. Joy and gladness will be found in her, thanksgiving and the sound of springs.

Has Israel has caused the desert to bloom?  The statistics do not bear this out. 

But even if Israel has made the desert bloom, and I would say Israel, to some extent, has; there is an unasked question that bears on the story of the Pima Indian. 

Again I quote from Why We Get Fat: And What to Do About it. 

With the California gold rush, the relative paradise of the Pima came to an end and, with it, their affluence. Anglo-Americans and Mexicans began settling in large numbers in the region. These newcomers—“some of the vilest specimens of humanity that the white race has produced,” wrote Russell—hunted the local game near to extinction, and diverted the Gila River water to irrigate their own fields at the expense of the Pimas’.

The Jordan ValleyA portion of the success of Arizona agriculture was based on stolen water. The unasked question when we see a blooming desert in Israel is—Where did the Israeli farmer get the water? Where did the Israeli farmer get the land? 

When we see the abysmal conditions of a Palestinian settlement camp, remember the Pima Indians and ask the important question. Who "owns" the water? If you wonder why the Moslems and Jews cannot sit down and settle their differences “like good Christians”—one answer is the issue of who controls the water. 

Modern Economics Explained

Former FDIC chair Sheila Bair has an astounding proposal that will solve all our problems!

 

Under my plan, each American household could borrow $10 million from the Fed at zero interest. The more conservative among us can take that money and buy 10-year Treasury bonds. At the current 2 percent annual interest rate, we can pocket a nice $200,000 a year to live on. The more adventuresome can buy 10-year Greek debt at 21 percent, for an annual income of $2.1 million. Or if Greece is a little too risky for you, go with Portugal, at about 12 percent, or $1.2 million dollars a year. (No sense in getting greedy.)

Think of what we can do with all that money. We can pay off our underwater mortgages and replenish our retirement accounts without spending one day schlepping into the office. With a few quick keystrokes, we’ll be golden for the next 10 years.

...

And while that deal blew bigger holes in the deficit, my proposal won’t cost taxpayers anything because the Fed is just going to print the money. All we need is about $1,200 trillion, or $10 million for 120 million households. We will all cross our hearts and promise to pay the money back in full after 10 years so the Fed won’t lose any dough. It can hold our Portuguese debt as collateral just to make sure.

 

Sheila Bair for president!

 

This makes perfect sense to me, as does this classic Abbot and Costello routine. 

 

Headed to a Bank Near You?

Our Friendly "Neighborhood" BankerI mostly agree with "Mish" Shedlock's presentation. The problem is severe and it will spread like falling dominos. Spain, Portugal and Ireland have huge problems that are not fully appreciated in the US. What is also not well understood it that our modern banking system is all interrelated to each other. Under normal conditions a bank in Germany could count on a transfer from Spain to actually happen. But the amount of government debt owned by Spanish banks dwarves the bank's reserves. This means that a German bank might be left "holding the bag" when the Spanish banks fail. The problem spreads rapidly. (Hmm, the bank I use in California is owned by a Spanish bank ...)

Japan is in particularly bad shape, as Mish discusses in this video.