My friend Don Bowen sent me the following email to share here at Incredible Fukn.us
I did not get much sleep last night because I followed a link on another list. If you choose to read this rather long description you may not get much sleep tonight. Maybe you will lie awake thinking of how you will buy that piece of self sufficient land and hone your homesteading skills. Warning it is rather long.
The link mentioned our upcoming invasion or attack on Iran and made a link I had forgotten about. Oil purchases are in US dollars. China, Japan, everybody has to purchase USD to purchase oil. This has the affect of creating an artificial demand for USD and keeping the price high. During the late 90s one of the behind the scenes pressures on the bushie oil fortunes was a threat by Iraq to go to requiring Euros for oil purchases. This was at a time when the USD was low against the Euro and many countries supported the shift. The USD has recovered a little but not much, today it is trading at $.833.
Starting this coming March Iran will no longer take USD but will require Euros. No big deal except when taken in light of the recent Iran bashing and war drum beating. The bushies are beating their chest about Iran but do not have the military power to do much more than sending a squadron of fighter bombers to knock out the Iranian nuclear facilities. That would trigger a with holding of oil by Iran which could trigger a speculative run up in oil prices, trading at USD63 today. We cannot attack nor can a proxy such as Israel. The shift to Euros will cause a slump in USD so how is the administration handling it? By starting in March, no longer publishing the M3 money supply.
M3 is the sum of all monies in the US economy. M1 is the sum of all cash, M2 is the sum of M1 and government securities, all bank deposits, and CDs less than $100,000. M3 is M1 M2 our store of Euros, CDs over $100,000, short terms inter bank loans, in short a sum of all the money the US has access to. Typically the GDP which is a sum of all economic activity tracks the M3 closely. It takes a certain amount of money to maintain a certain level of economic activity. In recent years the M3 money supply has grown much faster than the GDP and the CPI. This reflects the increased government deficient. As I continued research I found the latest M3 is $9.7 trillion. The national debt ceiling is $8.18 trillion. Sometime in the next few weeks congress will have to vote on a new debt ceiling. The budget just submitted has an on the book deficient of over $400 billion and off book deficient of around $200 billion. In addition a separate budget proposal for the war in Iraq for $120 billion has been submitted for this fiscal year. This years deficient before the war budget is already close to $400 billion on budget and nearly $200 billion off budget. This is a total budget projected deficient of almost $1.2 trillion for the next two years not counting any budget requests for the war and natural disaster rebuilding.
Projected deficient at the end of the bush thievery in three years is well over $10 trillion. M3 money supply is projected to be right around $10 trillion. One definition of bankruptcy is when your debts are greater than your assets. Granted the M3 does not includes such real assets such as our government owned land but it is something to think of. Also something to ponder is the recent run up in gold, from around $300 for many years to $552 today with a projected mid term rise to $900 and maybe a spike to $2000.
This one has some interesting comments in an appendix about the adjustments to the CPI over the years.
Don Bowen Awl Knotted Up http://www.braingarage.com My travel journal http://www.braingarage.com/Dons/Travels/journal/Journal.html