Homestead mailing list

[Don Bowen <don.bowen AT earthlink.net>]

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.

Don Bowen                          Awl Knotted Up
http://www.braingarage.com

My travel journal
http://www.braingarage.com/Dons/Travels/journal/Journal.html