economics only

ECONOMICS ONLY


Well, it’s that time of year when Uncle Sugar needs to give me back the money I loaned him interest free. I look at it as another tax, bribing him so there are no surprises the beginning of April, such as I owe the bitch more than the 50-75% I already pay through all the layers of hidden taxes. After refunds I might actually only pay Social Security taxes, but no matter who you are you pay most of your income in the taxes you never see. Surely you’ve seen the studies showing that, for instance, pizza is 25% taxes, beer 50%, etc. And that is just the taxes they could track down and find. I’m used to being sodomized financially so this barely registers on my Rage-O-Meter. When I do my taxes is when I find out how much I make in writing income. Last year was a nice round number, $3,333. And forty cents. It would have been really cool if it had been 33 cents, but you can’t have everything. My e-books are an embarrassingly low $30 a month ( all amounts averaged ), my Google Ad revenue twice that at $66 a month. And the big pay-out is from Amazon links at $186 a month. $282 a month. Of course, without Christmas added on the numbers would probably be closer to averaging $200 a month, so I am just as dependent as any retail chain on the Giving Season for yearly revenue. For the longest time I had to pay money for people to read me, so $282 a month is wonderful. I don’t expect it to last forever, but I’ll enjoy it while I can. Thank you one and all for your support.

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We’re having quite the wet season in our corner of the desert. The dirt is saturated everywhere. I barely got home Friday in the truck as it started bogging and fishtailing on the side dirt road leading to the Compound. And the one spot NOT soft and gooey? The trench for the earth pipe. Hard as a fricken rock at the bottom of the thing. Past two feet is nearly rock-like. If my trailer sinks at least I know it won’t go too far. I’m seriously starting to consider paying for a backhoe to dig the thing. If I’m paying for a day I can get more than one trench dug so per pipe it won’t be too much. If I go that route I’ll use the remainder of the tax return ( after my daughters plane ticket ) plus the next few months of writing income to pay for the rental, labor and more pipe. My goal is two pipes to the living room, one to the bedroom and one underneath the skirting. It could be totally useless or it could be the next best thing to sliced bread. But worth the gamble as this might potentially solve a big problem of freezing to death after the propane is gone ( the pit is my current solution and better than nothing ).

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Okay, you all know how I feel about peak oil. We are all doomed. The lower 48 peaked in 1970, and today we are half that dates production even including adding Alaska and the Gulf Of Mexico. We peaked in coal BTU in 1998 ( we have plenty of coal left but it is all crap coal of low heat output ). Frac gas is going to be short lived. But forget all of that for today. Today, just focusing on economics, we are screwed. And I’m not talking about the usual business book screaming about trade balances or deficits. We can never pay off the deficit, so it is a non-concern in itself ( when we can’t even pay its interest, then it makes itself felt ). And trade balances will resolve themselves shortly IF we don’t run out of food surpluses. The coming skyrocketing prices will also make that a non-issue. Just looking at the last three years, we are in for a world of financial hurt. If no other problem asserts itself, the financial collapse will still be enough in and of itself. I don’t believe we will only have a financial collapse, but for those that don’t believe we are running out of energy, you should at least be very concerned about the economy. First, nobody else is buying our debt anymore. The reason we were on a dollar economy worldwide since the 1970’s when we abandoned the gold convertibility was because other countries returned our dollars for our debt ( for the simple reason that they needed interest- no interest, no growth ). That was a sweetheart deal, and we came to expect that to be normal. But the world has started to in whole or in part to abandon our debt. They aren’t buying more and they are even selling us back what they already had. As a consequence we are buying our own debt, which can never last long before the currency is trash.

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In effect, we used our dominant financial control to go into debt for all the imported oil we needed for the last forty years. Like a credit card junkie, it was high times since only the interest payments needed to be made. That is now over, our cards are being canceled and we are writing rubber checks trying to keep the free stuff coming. If you ignore global oil drawdown, the only explanation for our five year long oil import decline is that we can no longer finagle others into giving us that oil for debt we can no longer pay back. Instead, the oil is going to China and India for what is perceived as payments rather than IOU’s ( it is reckoned their checks won’t bounce nearly as quick as ours ). Our unemployment numbers continue to approach nearly half a million new claims a month. One month it might be 300,000 instead of 400,000 and so a huge deal is made how we are having a rebound in employment. But all that happened was that the rate of increased unemployment simply decreased. For a short time. Anything under a positive 150,000 job growth per month figure doesn’t make up for population gain. Hence, a zero unemployment rate is still an additional 150,000 people without jobs. And we have millions of unoccupied homes. Less folks can afford those every month. What recovery do you think you see?

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Food prices have basically doubled in the last three or four years. Oil has doubled. Even forgetting worldwide weather related crop losses, just the fact that half our corn crop goes to ethanol and our own homegrown inflation are kicking our ass year after year. If we took the corn back for food, our gas supply would shrink 10% ( on top of the twenty percent decline already here from import declines ). I’m pretty sure that would give the economy another huge drop. Energy is economic growth. Even though ethanol is a net energy loss, the bankers still profit from each stage of its manufacture ( you got to go in debt for all that equipment ) which might be the best explanation why the program is still going strong. Not because a few farmers are making a killing but because the bankers are. Again, it is all about the banks. The rest of our economy is serving them, right up until the end. The sad part is without propping them up we most likely would have already collapsed. As much as that rankles. The bail-outs continue. Unemployment never stops growing ( even if the rate fluctuates ). House foreclosures continue climbing. More and more government entities face insolvency as their tax base shrinks. House equity shrinks as food and oil prices climb. Seriously, you think there will be a recovery? Good luck with that.

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My e-mail is jimd303@netzero.com
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