Scenario 2020

SUBHEAD: The Future of Food in Mendocino County.

By Jason Bradford on 5 January 2009 in the Oil Drum 
http://www.theoildrum.com/node/4884#more 
Image above: Burned out combine in winter field from "Agricultural Law http://aglaw.blogspot.com/2006_10_01_archive.html
  
I was asked to give a presentation to a group called Leadership Mendocino. Every year about 30 people in our County, usually from a mix of businesses, government agencies, and non-profits, meet monthly for a full day and intensively study a particular topic. Nov. 14th 2008 was their Ag day, and my presentation followed the Ag Commissioner’s, who reviewed the County’s history and present.

I didn’t want to talk about the future as if I knew what was going to happen, but I did want to highlight the vulnerabilities and tensions I saw building and suggest some alternatives to our predicament. Hence I created a storyline in which I was now the County Historian in 2020 giving a talk to the group about the past decade of change.

While the details are specific to where I live, the general lessons apply to the whole world. For Mendocino County the key date was December 12, 2009. The trucks didn’t show up that day. Why weren’t the trucks running? I’ll give a quick overview of what led up to the Little Death.

Let’s start with the credit market break down in 2008. What followed was a plunge in the volume and reliability of global trade. Without access to the free flow of credit, countries experienced food and fuel shortages. People began rioting. We saw how developing countries were in profound crisis, but most of us didn’t imagine how those awful scenes would so quickly be in our own neighborhoods too. Everyone knows the story…

Pakistan devolved into anarchy and was unable to keep all of its nuclear weapons secure. Several went missing and the world didn't find out where they went until it was too late. South-Central Asia and the Middle East were on fire. The nuclear exchange was contained within the region, but the effects spread globally. The world’s largest oil production facilities and ports were destroyed or inaccessible.

The daily flow of supertankers from the Middle East was over. It was common knowledge at the time that crude oil was the lifeblood of our economy, but little had yet been done to reduce our dependency on oil. The modern world was suddenly without sufficient transportation fuels and totally unprepared.

The specific numbers are staggering. Only a quarter of U.S. crude oil consumption was domestically produced in 2009. The trucking system was the key part of what was called the "Just in Time" delivery system. Warehousing and stockpiling were no longer practiced significantly and so no buffer existed when the trucks stopped. Our "Just in Time" system unraveled over a period of several weeks. "J-I-T" now stood for "Just Isn't There."

As the flow of goods and services slowed dramatically and then in some cases stopped moving altogether, we were subject to cascading, compounding failures in key sectors of the economy. Just a couple of examples…

Without constant truck movement, spare parts and basic supplies ran short. Electricity production relied on coal, which relied on diesel. Most dire of all was that within three days of the halt to trucking, the grocery stores were out of food. Looking back at historical records it is clear that, while shocking, this was no surprise. Community-based organizations had been warning of this exact possibility for years.

Nowadays we have buffers and resiliency built into our systems, but that was not the case in 2009. Government hadn’t prepared, having placed its faith in the market to provide for basic goods such as food and energy. Global food stockpiles had been declining for over a decade, and in any case they were not under any government control.

Although some people had stockpiled food and essentials, most people hadn't because either they never thought this could happen or were simply distracted. It might be good to remind everyone what life was like in 2009. Most of us tended to spend our free time in front of the television or interacting with various media and communication devices.

Gardening, food preservation, community meals and stuff like that wasn’t cool and exciting for the majority of people, although interest in food security had been increasing for a few years preceding the crisis. After a week everybody became scared, and most started to feel hungry. This was so unthinkable that many also became profoundly disillusioned and angry. This was not supposed to be happening to “us.”

The Five Stages of Grief were on full display. Events began to run their natural course. Scared, hungry people saw that some households still had food. This led to looting in some areas.

A handful of police and sheriffs couldn’t protect private property from a desperate populace. In other areas looting was averted (barely) as neighbors and authorities agreed to pool private food holdings and distribute them evenly. As the crisis deepened, a triage system was established. Food was preferentially given to those who could work, and the young. All sorts of questions that had been ignored for decades became very important.

“What about the local farms,” the people asked. “Can they feed us?” “It’s the middle of winter,” the farmer’s replied. “We can plant potatoes and grains in the spring but they won’t be ready until summer.” “And where are the seeds going to come from? We are hay farmers, cattle ranchers and grape growers. We don’t even have the right equipment for this.” Three months passed without relief. Clearly, household preparation wasn’t enough, and now the population was starving. Other problems arose too.

Electricity was spotty. Every bit of gasoline and diesel were needed in generators to keep pumps for water and sewer systems going, to keep the hospitals powered, and to cook food in community kitchens. But by spring these supplies, commandeered from the storage tanks of gas stations, were gone. FEMA didn’t arrive with supplies of food, fuel and medicines in the major valleys until March 2010.

These were barely enough to end starvation and give tractors some fuel. When the railroad cars arrived in May 2010 we finally had enough of the basics again. Freeways were abandoned for hauling freight. They were in disrepair from winter storms and far too expensive to maintain for the now minimal trucking system. In addition to supplies of grain and beans (25,000 lbs per trailer load), enough seed potatoes were brought in to plant. Potatoes became our survival food for a few years.

As we all know, it is hard to eat enough of them to keep the weight on! Health care providers estimate that the average person lost twenty pounds between 2009 and 2012. Here’s another graphic from the archives. Food security organizations in the County knew that storage foods with high caloric density were essential, and had even started to import and store them in the County.

The grain and bean silos established in Willits in 2009 really helped that area weather the crisis better than elsewhere. Silos were quickly built along the railroad tracks in every town. All of us began to learn some of the basic facts about nutrition and agriculture, such as how many calories we need per day and how to eke that out of the soil.

Even with farm supplies brought in by rail car, we lacked much of the needed energy infrastructure to irrigate crops as electricity was still unreliable. Few well pumps ran off solar panels. So in most cases, yields weren’t as large as we’d hoped. It was terribly frustrating; we could see the water 30 ft down in the well but couldn’t get it out fast enough to make a difference.

Ever since the Little Death, precious tractor fuel has been limited. Much more is now done with manual labor than in the past. This was a difficult adjustment, both physically and psychologically. Some people were excited by the challenge and adapted well. On the bright side, “unemployment” is nearly non-existent and we are a fit and industrious people. Explicit warnings of our vulnerabilities, and an alternative vision had been given by local community groups as early 2004.

In August 2010, a plan for a local food economy was adopted by local governments based on the research of community activists that preceded the crisis. The food system we have today is by and large based on those plans. The ranching community was familiar with the concept of carrying capacity, but usually called it the “stocking rate.” Good ranchers made sure not to put more cattle on a piece of land than it could handle. A local food system plan had to think about the sustainable population of humans in the County too. Some basic facts that were used to frame the plan:1.

The County’s population in 2010 was estimated at 80,000 (down from a peak of 90,000 before the crisis).2. Somewhere between 35,000 and 50,000 acres of prime ag land remained in the county (after an initial endowment of 95,000).3. To supply enough food to feed one person requires about one acre.

The plan also recognized that a local food system had to overcome serious capital deficits with respect to: renewable energy, equipment, infrastructure, education and worker skills, business to business relationships, and public law and policy. In any environment it would be difficult to overcome these deficits, but the crisis was a mixed blessing. Everybody now recognized that a new system had to be built.

Nearly all resources were allocated according to this need. Ideology was replaced by practicality. What people were “willing to do” changed overnight. Now I will shift gears and contrast the food system of 2009 with what we have today. I’ll start with a review of the 2009 food system.

Here are a couple of graphs that summarize data at the national scale when the crisis hit. At that time, one calorie of food energy depended on several calories of fossil fuel energy. Basically, all parts of the system were highly dependent upon fossil fuels, long-distance supply chains, and complex financial markets. Today’s food system has many features that improve our resiliency and security. Key attributes are: Diverse.

A complete and balanced diet can be had within the agricultural base of the County. Local. Food produced here is consumed here, and the agricultural landscape is no longer dominated by grapes and cattle for export. Renewable. Energy inputs for agriculture, transportation and processing are based on solar, wind, hydro and other non-fossil sources. Non-toxic. Artificial pesticides and herbicides are no longer available and we use biological controls and landscape management to dampen pest cycles. Cyclical. Soils are improved rather than depleted through conservation tillage, smart land-cover rotation patterns, and composting of all human and animal wastes. Adaptable.

As climate changes and new farmers learn what works best, systems are in place to exchange information and perform needed research. Buffered. The future is always uncertain. Always be prepared for trouble by storing extra of what we really need. Today’s food system is completely different. The plan recognized the web of relationships needed for a sustainable system. Fossil fuels are nearly eliminated. Transportation distances are very short. Waste becomes the new fertilizer. While mechanized to the extent energy availability allows, the farm of 2020 uses efficient hand tools when those suffice.

Compost today is very expensive. Farmers work very hard to create the fertility they need on site as best they can. Food scraps are highly valued and used in vermiculture systems. Human wastes are professionally handled and sold to farmers certified disease free. Imported chemical pesticides and herbicides are also very costly. More knowledge and labor is now used, including beneficial insect plants that add a lot of color and interest to farms.

Off the farm society has changed just as dramatically. People often use solar ovens to cook, and disposable packaging is rarely seen anymore. Because a transportation fuel crisis was the proximate cause of the crisis, people were especially keen on eliminating reliance on long-distance supply chains. Households began sourcing as much food locally as they could.

In 2009 a trip to the grocery store would mean a 1500 mile diet. Today that could be more like a 150 yard diet. Bikes with trailers can now handle much local transport. Streets are quieter, and the air less polluted. Not only have on the farm practices changed, but farms are cooperating like never before. This creates synergies at the landscape level we all benefit from.

For example, this goat dairy sows a hay crop rich in wildflowers, thereby supporting a local beekeeper. The beekeeper’s hives also service orchards and row crops in the area, ensuring good pollination and food for all of us. We have much to be proud of now. We made it through very tough times together by mostly keeping our heads on straight and making good decisions when it really counted.

But we also live with the pain of loss and regret, asking ourselves over and over, “How did we let this happen?” What does the last 10 years teach us about the importance of leadership? I look at this issue in two ways.

First, good leaders do their best to prevent crises. This requires the ability to help people accept the reality of unsustainable tensions before they go too far. Just talking to people can establish new conversations that propagate. Only when enough people are having similar conversations are social changes possible.

Of course human history is full of one account after another of societies that failed to recognize their obvious problems before it was too late. When disaster strikes, good leaders manage their shock and the loss of normalcy. They model the proper attitude, reducing panic and heightening clear thinking. The best crisis leaders are those that combine awareness of the problem before it arrived with a sense of direction and clarity.


Because they saw what was coming, they often have a plan to deal with it as soon as the population is forced by circumstances out of denial, distraction and inaction. Since what people are willing to do changes in a crisis, wise leadership can make a lot happen for the good very quickly.

Residents want beach access

SUBHEAD: Once again the residents of Kauai are bared from a Poli Hale State Park by the DLNR  

[IB Editor's Note: We have a right to access this sacred site! We wonder what happened to the military's promise to maintain the roads at Polihale when they took over control on the 6,000 acres of the Mana Plain, including the road to the State Park.]
 
By Nathan Eagle on 4 January 2009 in The Garden Island News  
http://www.kauaiworld.com/articles/2009/01/04/news/kauai_news/doc496070b1d12f6971042339.txt
 

Image above: Southern end of Polihale State Park looking toward the Pacific Missile Range Facility. Photo courtesy of HawaiiGaga.com

Flooding from heavy rains last month caused damages to a bridge, large holes in the access road and erosion around the water system at Polihale State Park as seen in these photos taken on a state Department of Land and Natural Resources site assessment the week of Decemeber 22md. The closure of Polihale State Park due to damage caused by flooding has irked some Westside residents who want access to the remote beach and surf spot.

The state Department of Land and Natural Resources Division of State Parks said in a statement on Friday that it is closing Polihale State Park “indefinitely until significant repairs are made to areas of the park that were damaged by recent heavy rains.” “We are asking for the public’s patience and cooperation during this closure,” said Laura Thielen, DLNR chair, in a release. “It is necessary for all vehicles to stay off the roadway to Polihale State Park in order to protect public safety. The park itself is closed and no camping permits are being issued due to the washed out roads.”

Kekaha resident Bruce Pleas said yesterday that there is a viable alternative. “Instead of DLNR sending people out there to make sure you don’t use the park, the solution is to post one personnel at the gate and make sure only residents with four-wheel drive are allowed to pass,” he said. Pleas, an avid surfer, said those familiar with such conditions should be granted access. “Even after the flood we recently had, the road is still in far better condition than it was before the 2006 flooding,” he said.

“It’s even in as good of condition as it was when the sugar cane production company was there. So, my main gripe is why can’t local residents who are familiar with these conditions and who have a specific purpose get out there?” State Sen. Gary Hooser, D-Kauai and Ni‘ihau, said he plans to meet with Thielen tomorrow to learn more about the department’s budget.

“I know that budgets are in very bad condition, but I am hopeful and optimistic that the road will be re-opened soon,” he said yesterday. “I met with the Kaua‘i delegation — Reps. Tokioka, Sagum and Morita — and we briefly discussed the situation and we agreed to work together to support the re-construction that will be involved in the process.” Heavy rains last month caused significant damage to the park’s main entrance road including damage to one of the bridges. Continued use of the road before it dried caused it to further deteriorate, according to the DLNR.

Additionally, the park’s new water system and restroom facilities remain inoperable due to damages sustained by the heavy rains. “Certainly, local residents should be allowed to access their state parks and I think visitors not familiar with the roads or without the proper vehicles, it would be appropriate to discourage them from going down there,” Hooser said. “It could be just a matter of moving boulders and letting local residents through or it could require something greater. DLNR is simply concerned about people’s safety.” With the temporary lack of infrastructure and limited emergency access, the area will remain closed until repairs are made, a DLNR news release states. There were no estimates of when the park might reopen or how much the work might cost, but the DLNR said it will issue regular updates as repairs proceed.

“There are many issues regarding management of the state park system here and we’ll be speaking about that this Monday, all the way from Polihale to Koke‘e to the Napali Coast,” Hooser said. “Even though the budget situation is very distressing right now, we’re going to push as hard as we can to get funds that are available.”
 .

Sitting on top of the world

SUBHEAD: Comments about our new president, on a positive note to begin the new year. By Garrison Keillor 13 November 2008 Image above: Barrack Obama palms a basketball. Be happy, dear hearts, and allow yourselves a few more weeks of quiet exultation. It isn't gloating, it's satisfaction at a job well done. He was a superb candidate, serious, professorial but with a flashing grin and a buoyancy that comes from working out in the gym every morning.
He spoke in a genuine voice, not senatorial at all. He relished campaigning. He accepted adulation gracefully. He brandished his sword against his opponents without mocking or belittling them. He was elegant, unaffected, utterly American, and now (Wow) suddenly America is cool. Chicago is cool. Chicago!!! We threw the dice and we won the jackpot and elected a black guy with a Harvard degree, the middle name Hussein and a sense of humor - he said, "I've got relatives who look like Bernie Mac, and I've got relatives who look like Margaret Thatcher." The French junior minister for human rights said, "On this morning, we all want to be American so we can take a bite of this dream unfolding before our eyes." When was the last time you heard someone from France say they wanted to be American and take a bite of something of ours? Ponder that for a moment. The world expects us to elect pompous yahoos and instead we have us a 47-year-old prince from the prairie who cheerfully ran the race, and when his opponents threw sand at him, he just smiled back. He'll be the first president in history to look really good making a jump shot. He loves his classy wife and his sweet little daughters. He looks good in the kitchen. He can cook Indian or Chinese but for his girls he will do mac and cheese. At the same time, he knows pop music, American lit and constitutional law. I just can't imagine anybody cooler. Look at a photo of the latest pooh-bah conference - the hausfrau Merkel, the big glum Scotsman, that goofball Berlusconi, Putin with his B-movie bad-boy scowl, and Sarkozy, who looks like a district manager for Avis - you put Barack in that bunch and he will shine. It feels good to be cool and all of us can share in that, even sour old right-wingers and embittered blottoheads. Next time you fly to Heathrow and hand your passport to the man with the badge, he's going to see "United States of America" and look up and grin. Even if you worship in the church of Fox, everyone you meet overseas is going to ask you about Obama and you may as well say you voted for him because, my friends, he is your line of credit over there. No need anymore to try to look Canadian. And the coolest thing about him is the fact that back in the early Nineties, given a book contract after the hoo-ha about his becoming the First Black Editor of The Harvard Law Review, instead of writing the basic exploitation book he could've written, he put his head down and worked hard for a few years and wrote a good book, an honest one, which, since his rise in politics, has earned the Obamas enough to buy a very nice house and put money in the bank. A successful American entrepreneur. The last American president to write a book all by his lonesome self, I believe, was Theodore Roosevelt, who, on graduation from Harvard, wrote "The Naval War of 1812," and in my humble opinion, Obama's is the better book for the general reader, but you be the judge. Our hero who galloped to victory has inherited a gigantic mess. The country is sunk in debt. The Treasury announced it must borrow $550 billion to get the government through the fourth quarter, more than the entire deficit for 2008, so he will have to raise taxes and not only on bankers and lumber barons. His promise never to raise the retirement age is not a good idea. Whatever he promised the Iowa farmers about subsidizing ethanol is best forgotten at this point. We may not be getting our National Health Service cards anytime soon. And so on and so on. So enjoy the afterglow of the election awhile longer. We all walk taller this fall. People in Copenhagen and Stockholm are sending congratulatory e-mails - imagine! We are being admired by Danes and Swedes! And Chicago becomes The First City. Step aside, San Francisco. Shut up, New York. The Midwest is cool now. The mind reels. Have a good day. Garrison Keillor is the author of a new Lake Wobegon novel, "Liberty." Distributed by Tribune Media Services. .

Kauai Water and Power

SUBHEAD: The nexus of water, energy, and survival. By David Ward on 5 January 2009 for Island Breath (http://islandbreath.blogspot.com/2009/01/kauai-water-and-power.html) Image above: Wailua Falls on Kauai, Hawaii, at full throttle. There are several plausible futures, not simply one "official future." If the future is unpredictable, we're much better off looking at a range of possible outcomes than just at a single best guess. A forecast doesn't need to be exactly right to be useful; in fact, a mix of divergent, plausible futures (sometimes referred to as scenarios) can offer insights into the strengths and weaknesses of a given system or strategy.
With foresight tools such as scenarios, we can test how well our present environment and plans would respond to complex changes; if we see that a particular aspect of how we are today tends to weaken or fail under certain (unpredictable, but reasonable) conditions, we know that it's likely that we'll need to strengthen or change that potential point of failure. Where is the scenario planning for the disruption to our economy, if oil becomes suddenly unobtainable? For example, the collapse in the value of the dollar or the grim possibility of war in the oil-producing regions, oil tanker transport choke points, i.e. the Straits of Hormuz (40% of world’s oil exports pass through the straits). To quote Colin Campbell (2004): The second half of the age of oil will be characterized by a decline in the supply of oil, and all that depends upon it, including eventually financial capital. That speaks of a second Great Depression and the end of economics as presently understood. It is an unprecedented discontinuity of historic proportions, as never before has a resource as critical as oil become scarce without sight of a better substitute. All countries and all communities face the consequence of this new situation. There certainly is cause for alarm when talking about the oil crisis. However, When it comes to WATER, there is no comparison when we consider our dependency on water. A person can live without food for over a month, but only a few days without water. We need to ask whether our access to water is both sufficient and assured. Here on Kauai the answer is NO! Our power and water utilities are interdependent. Water distribution is energy-hungry. The Department of Water is KIUC’s largest consumer, satisfying its energy needs almost exclusively by burning fossil fuels. Both utilities are unable to withstand interruptions to their energy source for more than a few days at the most. KIUC's Strategic Plan 2008 – 2023 calls for generating at least 50% of our electricity without burning fossil fuels within 15 years. However admirable this plan may be, it is too little too late. Long before 2023; with the economy teetering on the edge of a depression at the impending peak in the world’s production of oil; we face the possibility of KIUC being unable to remain in operation. It is imperative that the Water Department immediately begin a program to become energy independent as soon as possible. There is a need to adjust existing policies, programs, and resources so that the water and wastewater departments could be converted from high-energy users to net renewable energy producers. We use fossil fuels simply because they currently represent the cheapest solution. Since market forces always optimize with a short time horizon of two years or less, our Water Board and business managers will invariably be tempted to embrace the scenarios that offer the best short-term perspectives, and consequently, we could be meeting our demise with our eyes wide shut. Living on a small island, we need to stop living beyond our means and return to a sustainable life style. The water demand and income projections that have been made in the Water Departments 2020 plan cannot be relied upon because of the global instability. We ought to behave as if fossil fuels have already become essentially unavailable. This commodity should only be used for purposes where they are absolutely essential and to help us create a sustainable energy infrastructure for the future. Sustainability is about closing the circle, replacing wasteful extractive models of resource use with recycling models that enable resource use to continue without depletion over the long term. As water works its way from source to tap, it typically requires many infusions of energy. We need to move it from its source, treat it, pipe it into our homes, and treat it before disposal. It is only when we look at the energy consumed in the entire water cycle that we get a clear sense of how much energy is required. This kind of whole-system calculation is called energy intensity. Energy intensity is defined as the total amount of energy required to use a specific amount of water in a specific location. Kauai relies almost exclusively on pumped water for its residents. Pumping groundwater is one of the most expensive and energy-intensive ways of delivering water to consumers. This should be reevaluated. This cannot continue to be the preferred method of water delivery. It is essential that the Department work to make the system as resilient as possible and maximize energy efficiency. We need to start talking about occupying the landscape differently. What is called for are not "solutions" but "adaptations." One does not "solve" inevitable change, but one might adapt to it. The developable renewable energy potential owned by the water and wastewater departments is not yet known. It would be beneficial to identify, assess and prioritize these resources, and find the technical and financial assistance to help develop renewable energy. In addition to micro-hydro generation, the Department could generate electricity through dedicated photovoltaic solar cells. Most buildings and water tanks are potential sites for photovoltaic solar generation. Third-party installations may offer faster adoption and financial benefits. Water conservation by consumers eliminates all of the “upstream” energy required to bring the water to the point of end use, as well as all of the “downstream” energy that would otherwise be spent to treat and dispose of this water. The best way for increasing water efficiency is to reduce the use of drinkable water for non-consumption purposes. There are two ways to do this: collect rainwater and reuse indoor wash water. The rain that falls on the roof should, if used innovatively, be sufficient for the majority of home uses, including gardening. Rainwater harvesting can be supplemented by treatment of grey water (wash water from the bathroom, laundry, and kitchen) e.g., through gravel reed beds for subsequent use in the garden. Even blackwater (from the toilet) can be treated and re-used on site in some circumstances, or a waterless composting toilet can be installed to ensure water goes to more productive uses. Closing the nutrient cycle, from human waste to fertile, food-producing soil is, in the long term, one of the most critical factors in the sustainability of our population. Our food supply is a vulnerable link between the environment and the economy. While the use of oil dominates the production end of the food system, electricity dominates the consumption end. The oil-intensive modern food system that evolved when oil was cheap will not survive as it is now structured with higher energy prices. We will not be able to continue to import 90% of our food. Most of us will have to grow at least some of our own food. Among the principal adjustments will be movement down the food chain as we react to rising food prices by buying fewer high-cost imported foods and livestock products. The economic benefits of expanding urban agriculture will become much more obvious. The Water Department’s policy of not supporting agriculture must be changed. If we are to feed ourselves we must expand our water use with “victory gardens” in every yard, park, school, and diversified agriculture on all prime land. The irrigation systems associated with the now closed plantations are available for conversion into supplying irrigation water for diversified agriculture farming. The Water Department must take a leadership position in working with DLNR and the Department of Agriculture to insure both our water and our food. I sincerely believe that we should be using the still affordable fossil energy that we have,to invest in infrastructure that requires very low energy to run (e.g. gravity flow). We need to rapidly reduce our dependence on off-island sources. We need to replace systems that are inherently limited by available imported energy (e.g. groundwater pumping). Aggressive restructuring of the system for resiliency and energy efficiency and purchases of renewable energy systems are powerful steps that can be taken to improve our water security while combating global warming. We could all learn from how the Hawaiians and the early plantations operated. These necessary steps to save finite fossil fuel resources and finite biosphere must be done soon.
We have no other choice.
See also:
Petrocollapse: Can you live without indoor running water?

Israel as a Failed State

SUBHEAD: It's time Barrack Obama reconsider his Middle East policy. [Note added by author: Originally this post was titled "Israel as a Fascist State", but a comment by JF (and a another by fellow editor Jonathan Jay) made me realize how incendiary that title is - if fruitful discourse is the goal. In any case, I am damn mad about the slaughter in Gaza.] Image above: Gaza family in shock after air attack. From (http://www.ft.com/cms/s/0/fdfd186a-d4f0-11dd-b967-000077b07658.html). By Juan Wilson on 4 January 2009 - Message to Barack Obama: It would be wise for you to reevaluate your Middle East policy before you take office in a couple of weeks. Once you set the tone at your inauguration it will be hard to wash your hands of current atrocities. It is time the United States stopped pretending that the State of Israel is a friend. The Zionists' relation to their neighbors is the linchpin of all that is wrong with the "western" approach to Middle east culture. Israel has become a dictatorial, reactionary, militaristic rogue state. Unfortunately, it is our client state run amok. It controls the Palestinians in Gaza like the Germans controlled the Polish Jews in the Warsaw Ghetto. Even though I was the great grandson of a Baptist preacher, I was raised without religion on Long Island. My maternal grandparents might be described as atheists, or more accurately, agnostics. My immediate family never attended a church or described itself as Christian. I spent much of my youth close to American Jews in New York City and the metropolitan area. There was a secular, intellectual and artistic ambiance to their culture that attracted me. When I was a young teenager I attended meetings of the Society for Ethical Culture. It espoused secular humanism and I liked the mostly Jewish progressive intellectual young participants. The "Jewish Encyclopedia" says of the Society: "Its chief supporters in New York and Philadelphia are Jews, as is its founder and leader, though the society does not in any degree bear the stamp of Judaism." In 1958 my first love was a Jewish Russian girl who wrote beautiful poetry and was the best mathematician in my algebra class. Wow! Over the years I came to appreciate Jewish humor and the expressiveness of Yiddish. In 1963 I attended Boston University in their College of Fine Arts. The school had a large number of Jewish kids from Long Island. I felt at home. On the first day of Freshman orientation they had about a 1000 fine arts students in the department's auditorium. BU was a parochial school and in its wisdom would separate all students by religion. The Catholics were invited to reassemble at their church near the student union. The Protestants were directed to their facility at center focus of the campus. The Jews were asked to stay in their seats. As the middle of the campus was a trolley-car ride away, I stayed in my seat and thus became, for many present, jewish (with a small J"). Later in the 1960's my sister married a Jewish artist from Brooklyn and, with starry eyes and a baby, moved to a kibbutz near the Golan Heights border with Syria. It was what we call now an "intentional community". They operated a large apple orchard. They all shared the farming and child raising duties together. At the time I though my sister very idealistic. It was not until 1967 that I got even a hint that the Jewish state was anything but a modern, progressive group with humanitarian interests at heart. My sister described the occasional rocket attacks coming into their kibbutz from Syria. I began to realize that the placement of the kibbutz was an irritant to those in the disputed Golan Heights. I felt my sister was in harm's way unnecessarily. Why were so many kibbutzes located in places sure to raise hackles? Yet, I was appalled by the brazen attack on Israel in May of 1967. I rooted for Moshe Dayan and Yitzhak Rabin's efforts in the Six Day War. I was impressed with Abba Eban's smooth representation of Israel at the United Nations. The good guys had kicked some ass. It took years for me to realize that Israel was never going to release the Palestinian land they grabbed. It took longer for me to see the cohesiveness of the "Jewish settlements" in the occupied territories. It took longer for me to separate Zionism from Judaism from Semitism from Jewish culture. Over the years, on this issue of Israel, my heart has had to travel a great distance. Today I think that the American, Polish, Russian and other European Jews that occupy today's Israel will need to dismantle that operation. I feel all illegal settlements must be abandoned and turned over to the Palestinians. To me there should be no Jewish state or Islamic state or Christian state. Any religious state is repellent to me. There are "converted" Jews but essentially Jews are defined by the mother's bloodline, and a religion (and thus citizenry) defined by inheritance of genes seems barbaric. Unfortunately, Barrack Obama has already set a course that will likely lead to more conflict in the Middle East (more conflict in Afghanistan, Pakistan and perhaps Iran). His past support of Israel does not bode well for a peace process. His silence over the disproportionate atrocities being committed by Israel in Gaza is disturbing. I hope he "gets it' and changes course before his inauguration. .

Better Way to Make a Living

SUBHEAD: Going back to tribalism may be the key to survival. by Chuck Burr on 2 January 2009 in Culture Change - (http://culturechange.org/cms/index.php?option=com_content&task=view&id=273&Itemid=1)
Image above: Photograph by Timothy Allen. From (www.photojournal.co.uk/timothy_allen
)
We are no more able to find our way forward living as Homo modern as we are living as Homo hunter-gatherer. Both ways are blocked. Living today on the infinite growth treadmill as Homo modern results in the death of our planet. Homo sapien has exploded our population to a level that we can no longer run back into the forest to make a living like the Mayan did. So what are we to do? The questions is actually, not “what are we going to do?”, but “how are we going to make a living?” First let’s rule out the obvious: we can no longer make a living as Homo consumer. Peak oil will put an end to our happy motoring and consuming lifestyle before we get the chance to consume the world.
A new International Energy Agency (IEA) report shows the decline of global oil production has been recalculated at 9.1% per year, up from 5.8% earlier in 2008. The weakened global economy will buy us a couple more years, but after that the decline of world oil production will be far steeper than its rise. We started the last century slowly, but we are now running our fossil fuel economy full speed with the easily extracted oil gone and only the hard or impossible to extract left. The end of plentiful cheap energy will mean a reduction in the complexity of our society so significant that few today comprehend it. I wonder if President-elect Obama has any idea what is in store for us. Watch to see if restoring “growth” is his mantra when inaugurated. This year we saw the end of investment banking and the beginning of the end of suburbia in the form of the mortgage crisis. Peak oil’s curtailment of happy motoring has not even kicked in yet. Next, the experiment of the agricultural revolution fails, as it has created overpopulation and overshoot of carrying capacity via a "food race." The food race drives population growth with growth in food production; every increase in human population is met with an increase in food production. The agricultural revolution made us powerful, but it has also meant the greatest mass extinction since the end of the dinosaurs 65 million years ago. Just when we need earth’s resilience in her biodiversity the most, Homo modern is destroying it by converting what is left into human biomass. Combine agricultural-revolution population with peak oil and you get a nightmare. At the start of the last century, there were only one billion on the planet, today there are almost 6.8 billion. That means that 5.8 billion people are here one way or another because of oil, and oil is about to run out. The obvious being eliminated, that we are not going to make a living as fossil fuel consumers nor as hunter-gatherers, how are we going to make a living in the future? What if I told you I had a way to make a living that has worked for 150,000 generations and it does not involve running into the forest? The answer is tribalism, or, as I describe in my book Culturequake: The Fall of Modern Culture and the Rise of Earth Culture, tribal communities. Tribalism is misunderstood by Homo modern as “living a hunter-gatherer lifestyle.” Hunting and gathering is only one way of making a living; there are a million other ways to make a living. The important point is not “what” you do to make a living, but “how” you make a living. Make a living doing what ever you are best at, whether it is on a permaculture farm or fixing bicycles, it makes no difference. Tribalism has over three million years been the evolutionarily proven form of human social organization. Bees make a living in hives, deer in herds, whales in pods, birds in flocks, and humans in tribes. There is no getting around it. If you think that civilization is the new answer, you are deeply mistaken. In the mere blink of an eye, 500 generations, civilization has brought the world the point of mass extinction. It might be working for a wealthy westerner, but it is not working for the other 95 percent of the human population nor the 30 million other species on the planet. Tribalism has two primary components that enable the average person to make a living from generation to generation without being stressed out or exploited. First, a tribe is simply a group of people making a living together. Everyone in the tribe does not even have to have the same beliefs; they just have to want to make a living together. Second, tribe members have a strong incentive to share what they have made or found with other tribal members. This gives everyone else a strong incentive to share as well. There is no one leader or boss as in our hierarchic agricultural revolution culture. Being the main scheduler, for example, is just another job. When food is scarce everyone goes hungry; no one keeps a surplus to him/herself. Generally, tribes are thought to be fewer than 150 people. British anthropologist Robin Dunbar theorized this number of people to be the limit with whom we can maintain stable social relationships in which we know each person. He suggests that numbers larger than this require more restrictive rules, laws, and enforcement. I suggest this number does not require a hierarchy; everyone can be an equal. So what should you do? The universal advice I got from older people when I was growing up was “do what you love to do and you will be good at it.” You will make the biggest impact with your life that way. Find like-minded people and find a way to make livings together that you all enjoy. Based on my experience as an entrepreneur I would also say follow the path of least resistance and watch for serendipity. Try multiple things and see which one gets the most traction. Also, walk before you run. Try your ideas on a hobby, part-time, or club scale to get started. You could start with your neighbors and each could plant a different fruit or nut tree and you could exchange harvests in the fall. Create a micro-neighborhood edible perennial nursery business. The possibilities are endless. Have fun with it. One idea I am considering is to start by creating a virtual tribal community. We cannot all move in next door to each other overnight, but like-minded people could put their properties into a land trust for the benefit of the community. This would create a patchwork to start with within the existing suburban culture. You could coalesce closer together over time as the opportunities arise. In regards to finding like-minded people, try hosting a potluck to discuss how things might change toward neighborhood sustainability; see who shows up. Also I cannot emphasis enough about learning about permaculture and even taking a two week intensive permaculture design course (PDC). You will meet your tribe of like-minded people there. See the permaculture resources below. Have no hierarchy; work from a group consensus. Produce no surplus; make just what you need locally and your population will be stable and will not be in overshoot. Do this and you give your children a bright future. The one great benefit of a tribal community is cradle-to-grave security. In our Homo modern culture, we “make things to get things.” In a tribal or Leaver culture, you “give support to get support.” It is a completely different story or cultural meme. Memes are to cultures what genes are to people. Also, by living a better story, we create a new cultural meme that is more likely to be replicated than our current modern cultural story or meme that, “civilization must continue,” and “the world was made for man.” I mean really, how poor a story are these? A far better story is that our children and we can make a living without destroying most of the other life on earth. The real exciting part is that not only can we survive, but we can thrive! We can thrive amid a riot of cultural diversity among different tribes all making a living differently. We will also be living within the natural carrying capacity of our surroundings; a far greater result than what we have today. So this is our resolution for the new year: To find “our people” and to make a living together. Maybe being laid off from building pyramids for someone else could be a blessing in disguise as an opportunity to walk away from modern consumer culture. Postscript: Use this winter as a time to catch up on your reading. Besides reading Culturequake.org, I recommend:
  1. Gaia’s Garden: A Guide to Home-Scale Permaculture, by Toby Hemenway
  2. Permaculture for Beginners DVD, coming soon from Geoff Lawton at Permaculture Research Institute of Australia
  3. Beyond Civilization, by Daniel Quinn
  4. Dunbar’s Number:en.wikipedia.org
  5. The Meme Machine, by Susan Blackmore
  6. Overshoot: The Ecological Basis of Revolutionary Change, by William Catton
  7. Culturequake: The Fall of Modern Culture and the Rise of Earth Culture, by Chuck Burr
  8. Permaculture Activist magazine, edited by Peter Bane
 Visit Culturequake.org to learn more about the Culturequake book and the online Magazine. Chuck Burr LLC
  9. "A Return to Tribes" by Jan Lundberg, Culture Change Letter #114:cuturechange.org

The Last Road Trip

SUBHEAD: Freakishly cheap gas? Nation broke? Just hit the road! By Mark Morford on 31 December 2008 in SF Gate - http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2008/12/31/notes123108.DTL
Image above: Those who bet on cheap oil are once again being rewarded... but for how long? Something is deeply wrong. Something is bizarre and upside-down and perverse and it's not just fish pedicures or Rod Blagojevich's hair or the fact that people still care in the slightest about the sad and toothless chyme that is Britney Spears' White Trash Lite™ career. It's gas. The price of oil. Or I should say, the stunning, creepy, impossibly low price of Satan's lubricant, Bush's blood, our own personal Jesus. Have you noticed? How could you not? It's one of the more disturbing indicators in recent memory, easily the most ironically depressing sign of doom and downturn you get to see every single day as you careen around the city streets and look at the signs and blink a few times and go, wait wait wait, what year is it again? Are you kidding me? A buck seventy five? For premium? WTF? It is the frightening rule du jour: the cheaper gas gets right now, the more completely screwed you know we are. At the same time, a cheap tank of gas is one of the few strokes of fiscal relief we have right now, a tiny reprieve from the brutal economic turmoil. What a thing. But on the whole, it is not good news. Normally, the price of a barrel of crude drops a couple hundred percent in less than a year and we'd be out celebrating, joyous in the knowledge that ExxonMobileShellScrewYou must've just shoved an enormous drill bit the size of Sarah Palin's vacuity deep into Russia or Venezuela or a precious Alaskan wildlife preserve and come up with enough pure, sweet crude to last us until you're very, very dead and your grandkids are using the burned-out hull of your Chevy Tahoe XLT as a bomb shelter against the global warming food riots. Not this time, baby. No one, not even the most right-wing, SUV-loving Peak Oil denier, is claiming the crash in oil prices is actually a righteous and positive sign overall, despite how some economists say it's the one thing that's kept us from complete fiscal Armageddon, at least for now. This is what it really means: massive production slowdown, worldwide. It means: Auto industry collapse. It means: demand is so freakishly low that even coddled Saudi sheiks are parking their chrome Mercedes McLaren SLRs at the guest mansion and driving the lowly Cayenne Turbo to their gilded office towers made of diamonds and virgins and cheap immigrant labor. See? Bleak all around. But like any bizarre, inverse hunk of temporary reality that shouldn't really exist right now, if you close your eyes just right and spin yourself around and pretend the world is made of honeysuckle and pie and dreamy roadside cafes, you can make yourself see the tiny, tasty upside. Shall we? You have but to ask yourself: What can I do in the midst of one of the most savage economic recessions since the Depression, when Americans can't afford a good latte anymore and retail's in a tailspin and no one's buying anything over ten bucks? Is the answer not obvious? Did you not read the headline to this column? That's right: Road trip. A big one. Cross-country, all over the map (maybe wait until Spring for the northern regions), see the sights, burn off any number of tanks of cheap petrol for the last time ever and get the Saturn/Chevy/Chrysler serviced one more time before all dealerships close and your creaky American car is suddenly worth less than a used skateboard. Doesn't it sound about right? Really, the signs all seem to be aligned. Gas back to pennies per gallon for perhaps the last time in your lifetime, trips abroad still impossibly expensive, America on the verge of her next big leap forward, roads less congested (due to everyone being laid off), lots of free parking at the roughly 10,000 strip mall Targets and Wal-Marts and that still plague the land like a big-box cancer, a thousand small businesses scattered across a hundred small towns that could sure as hell use your patronage. What's not to like? Imagine the sights: All those bizarre new ghost towns, huge, tract-home megadevelopments with no one around to mow the perfect 13-foot squares of sod; tumbleweeds rolling like lost macho dreams across all those shuttered Hummer dealerships; bigwig bankers out in the street, begging for alms, $4,000 Armani suit in tatters. Or at least, a bit smudged. Honey, get the camera. Plus, you can wave a final farewell to George Bush's America, the sour megachurches and the gun shops and the liquor barns (usually all in the same mini mall), the giant industrial feedlots and the creationist museums and the prisons overflowing with white collar criminals and hey! Isn't that Scooter Libby, hitchhiking down the highway toward Sodom? Can we take a quick detour up to the Minneapolis airport so I can take one last snapshot of Sen. Larry Craig's favorite "I am not gay" totally gay restroom before it vanishes from the tourist map forevermore? Cool. More seriously: A shift is nigh. It feels like it just might be the end of that classic, nostalgic America of yore, the last gasp of that sweet, impossible snapshot you might have of the classic road trip, all charming roadside attractions and funky cafes and strange, tiny towns dotting the byways like weird hallucinations. Plus, filling the tank for 25 bucks? That's just ridiculous. After all, America is changing, and not a moment too soon. Our once noble but greedy land of cheap gas and giant cars and hot concrete ribbons stretching to the horizon is finally be shifting to something slightly more... I'm not quite sure what. Responsible? Mindful? Shrewd? Less oily? We can only hope. What we know for sure: Principal Obama is about to step in and take away much of our unchecked gluttony, the belt tightening will go all the way to the spine, cheap, plentiful oil is going the way of the rain forest, giant, lumbering cars are more irresponsible than letting your kids watch Fox News and even Wall Street kingpins are being slapped down a few dozen rungs on the ladder of respect and admiration. End of an era? Sort of. More like: End of an identity. Does it not seems like the road is beckoning, one last time? Hell, right now a good road trip is cheaper than a plane ticket. You need no new clothes. You need no real agenda. Stock up the cooler with a giant bag of trail mix and a case of cheap Sauvignon Blanc from Trader Joe's, map out a loose route on the iPhone, fill your tank, take aim, see the nation one more time before the economy recovers and gas leaps back up to eight bucks a gallon and we all come to our senses and start driving Smart cars to the corner market to pick up our monthly allotment of basic decency and newfound global humility. Fun!

Mars Rover's fifth anniversary

SUBHEAD: It’s the fifth anniversary the Mars mission of “Spirit” and “Opportunity”
by Juan Wilson on 3 January 2009 for Island Breath -
(http://islandbreath.blogspot.com/2009/01/mars-rovers-fifth-anniversary.html

Image above: Computer generated image by NASA of Mars Rover exploring.
 
One of the first articles on IslandBreath.org was one noting the landing on Mars of the two Rover mission solar powered robots. There was worry at the time that NASA had lost contact with the rover "Spirit".
That was five years ago, and my wonder, like that of so many others, is that these two representatives of planet Earth are still roving the red planet, just a little dustier for all the time spent exploring. This is the best kind of work we can do in space... explore the near solar system and determine how life may come from, and go to a planet.

Many might feel, reading this website, that I am a Luddite and do not support or respect technology of the space program. Actually, I was an enthusiastic supported of NASA's space program and eye-witnessed the Apollo 11 takeoff that landed the first men on the moon. At that time, 1969, the plan was to land men on Mars by 1990.

But people quickly tired of the bleak, gray, dead, landscape of the Moon and lost the their stomach for space exploration. President Richard Nixon helped convince the American people that what they needed was not another spaceship, but the Shuttle program. The Shuttle was billed as a re-usable ship that would build the space platform to reach Mars.

In my opinion the Shuttle program has been a dangerous and pathetic failure. The manned space program is history. The Untied States could not build another spaceship to reach the moon if it wanted to. The engineers, plants, jigs and dies needed to put together a Saturn Five rocket capable of reaching our nearest neighbor don't exist.

We are left with a sub-orbital rocket plane so dangerous we dare not risk sending any beloved citizen aloft in it.

In 1998 the always foolish Jerry Bruckheimer produced a movie titled "Armageddon" that starred Bruce Willis as a Shuttle jockey on a mission into deep space to save the Earth from an approaching asteroid. This required shooting off into deep space, landing the Shuttle on the approaching asteroid. Drilling several deep holes into its surface, inserting timed nuclear devices, rocketing away from the asteroid before the detonations engulfs the ship and and returning to earth. Wow!

This in reality would be an impossible task for the Shuttle so in the movie it was "modified as required". It is amazing how little idea most Americans about what their technology can and cannot do.
Image above: Poster promoting Jerry Bruckheimer movie "Armageddon" featuring NASA Shuttle in deep space.

That is all the more reason to be impressed when something like the Mars Rovers work so well, for so long with so little investment.

As Joyce Gramza noted in an article titled "Tenacious Twins" on www.ScienceCentral.com

"As the twin rovers emerge intact from yet another Martian winter, lead scientist Steve Squyres reflects on the incredible milestone, and the future.

The twin Mars Exploration Rovers “Spirit” and “Opportunity” landed in January 2004 with the mission of exploring Mars for three months. As the years passed we may have begun to take them for granted, but they’ve never ceased to amaze lead scientist Steve Squyres.

 “The previous landings on Mars– there had been three: two Vikings and Pathfinder — all involved stationary landers, they couldn’t go anywhere,” Squyres recalled. “And what we wanted to do was to explore in the truest sense of that word.” That meant giving the robots wheels to travel, camera eyes to see and computer brains to record and communicate – as well as some toolsgeologists would want along.

After the landings, the biggest challenge continues to be the threat ofMartian dust coating their solar power supplies.

The Rovers weathered severe dust storms in July, and are now poised to weather yet another Martian winter. The rover operations teams have driven both rovers to northward-facing slopes to maximize the winter sunlight falling on their solar panels.

Both rovers accomplished the mission of finding evidence of water on Mars within their allotted 90 days, then soldiered on to make more surprising discoveries. Recently, Spirit even capitalized on its dragging right wheelby analyzing the soil it turned up, providing new evidence that Mars may have once harbored life.

While relying on smart maneuvering, conservation and a certain amount of good luck, Squyres learned to accept the missions’ successes while anticipating their eventual end.

“There’s always going to be some tantalizing thing just beyond our reach that we didn’t quite get to,” he said. “And that’s, I guess, the nature of exploration and so we just live with it.”

NASA has extended the rovers’ missions five times, most recently in October, 2007.

“We’re going to keep operating these vehicles until they drop dead,” said Squyres. “And that could be days, weeks, years, I have no idea.”

Video above: Interview with Steve Squyres, NASA. Produced by Joyce Gramza — Edited by James Eagan

See also:
 Island Breath: Mars Rover Lands 1/9/04

2009 New Years Resolution

SUBHEAD: My plan is to follow the bicyclist.

 By Brad Parsons on 2 January 2009 in Aloha Analytics -  
(http://alohaanalytics.blogspot.com/2009/01/new-year.html)

  
Image above: "Cat Card" #4729 from publisher Alfred Mainzer Inc, Long Island City, New York, From (http://mainzercats.com/).

About a decade ago I visited Kauai for the first time for me. The one key thing I remember from that visit was riding in a van through Hanalei Valley, looking out the window at a pedestrian and thinking to myself "this has got to be the one most likely place in the world, that I have been, where the more logical thing to be doing would be to be a pedestrian or bicyclist rather than being in the car that I am currently in."

That image of Kauai's Northshore stuck with me for more than a decade. Now I am here and I am still looking out the window at pedestrians and bicyclists.

It's hard to change, I mean really change. Hopefully someday I will be forced to become a pedestrian or bicyclist on Kauai's Northshore. Today, I was driving from Kilauea toward Hanalei and I saw a regular bicyclist coming from the opposite direction. As far as I can tell, there are somewhere between 5 to 10 regular bicyclists who actually use bikes to commute on the Kauai Northshore.

I think part of the reason for that is many of the shoulders on Kauai are narrow and dangerous for the bicyclists. Because of my training, I watch people's posture, and so I noticed again that this person has near perfect posture even while riding a bike, except that her head was turned a little bit toward the side, usually an indication of a past fall or of concentration on something other than the task at hand. Anyway, this person riding her bike on the Northshore of Kauai, I know her; in fact, she'll probably read this post.

But, the thought on my mind, will I ever break away from dependence on the automobile and become like my observation of a decade ago in Hanalei Valley and of today in Kalihiwai Valley and actually become more of a pedestrian and bicyclist like my admirable friend has made a conscious effort to do? I think this is one of the big questions of the coming decades for Americans.

I like to think that I can do it, but maybe even I will have to be forced into it by the events. Maybe this will be my New Year's Resolution, to make some progress this year on becoming a regular pedestrian and bicyclist.

As for my friend, she and her mom are a great example to the community. I worry about her on her bike, and I hope that other motorists are watchful and recognize who she is and that she is a very special person who chooses to commute on her bike rather than in a car. On related matters, David Ward of Kauai independently sent to me the following link today including on the psychology of Peak Oil. Also, Lance Armstrong is riding on the shoulders of North Kohala and the Kona Coast as he reports here.

Watch out for him, he's a special person, too. On related matters, David Ward of Kauai independently sent to me the following link today including on the psychology of Peak Oil. Also, Lance Armstrong is riding on the shoulders of North Kohala and the Kona Coast as he reports here. Watch out for him, he's a special person, too.


Ten threats facing the dollar


SUBHEAD: America's massive debts aren't going to be paid for by any future generation.  

By Eric deCarbonnel on 2 January 2009 in Market Skeptics -  
(http://www.marketskeptics.com)

Image above: "The Last Days of the Empire" By Mark Bryan - 2006, From (http://www.artofmarkbryan.com/?s=The+Last+Days+of+the+Empire)
 
Most of the nations which have been financing the US's massive current account deficits in recent years have either begun to sell their dollar reserves last year or are planning on selling them this year in order to support their currencies. These nations generally fall into three categories:

A) Oil Producing Nations
Oil producing nations have built up lavish spending habits and large dollar reserve in recent years as a result of profits from rising oil prices. Now that commodity prices have crashes, those profits are gone, and those Oil producing nations will have to bankroll their spending by selling their accumulated dollar assets. Saudi Arabia, for example, is projecting a 2009 Budget Deficit=, which it intends to finance by selling off its US holdings. Russia, meanwhile, has already sold over 20% of its $598.1 billion reserves, and it can be expected to continue doing so this year.
B) Emerging markets
that have been relying on capital flows to fund their trade deficits Many emerging markets around the world have been running trade deficits in recent years financed by capital flows. The most prominent example from this group is India. India's strong capital flows from tourism, software services, and remittances not only financed its trade deficit, but also increased its foreign reserves to an all-time high of 316.2 billion in May of 2008. However, due to the global slowdown and selloff of emerging markets, those capital flows have now reversed. India's central bank, for example, has been forced to sell off its US holdings to curb its currency's decline, and its total reserves have decreased by $62.2 billion. The central bank's dollar sales in October alone exceeded purchases by a record $18.7 billion. India now has $254 billion foreign reserves left, the majority of which will be sold this year to protect its currency.
C) "Developed" Nations
The US isn't the only "developed" nation in trouble. Other "developed" nations (ie: nations that chose to outsource the polluting and labor-intensive parts of their economies) are also collapsing. Japan, for instance, has seen a disastrous drop in demand for good.Japan's Industrial production fell 8.1% in November from the previous month (the biggest drop in the measure since the government started releasing comparable figures in 1953). Demand for Japanese exports is vanishing: November shipments of automobiles plunged 31.9 percent and shipments of microchips and other electronics components fell 29.0 percent. Due to this disappearing demand, Japan has incurred a trade deficit for two straight months for the first time since October-November of 1980. With their own economic problems to deal with, it will not be other "developed" nations like Japan which will fund the US trade deficit in 2009. In fact, should the dollar begin to collapse, these nations could even be forced to sell their dollar reserves to protect their own currencies.
 1) The dollar implications of this should be clear
After years of bankrolling US consumption with the purchase of dollar assets, most nations are going to be net sellers of dollars in 2009. Just Russia, Saudi Arabia, India, and Japan alone have around $2 trillion in US holdings, and, if the current trade trends continue, America can expect foreign central banks to sell at least 1 trillion dollars this year. This begs the question: who exactly is going to be buying all these assets?

 2) he worsening US Trade deficit
The US Trade deficit is worsening because, while imports to the US are falling, exports are falling even faster. Demand for the big ticket durable and capital goods produced by "developed" nations is plummeting much faster than demand for cheap consumer imports, causing widening trade deficits with nations like China. The US's increasing trade and current account deficits means that America needs to attract over 700 billion dollars this year to keep the dollar from weakening.  

3) Treasuries
It is extremely important to understand that treasuries are the modern day equivalent of money under the mattress, and that, when a crisis confidence hits the dollar, treasuries will be redeemed for printed cash from the fed. This is due to the fact that the US can't allow treasury prices to crash, for fear of having the world's financial system break down and global trade collapse. So a sustained selloff in treasuries would therefore force the fed to expand its balance sheet by trillions to monetize much of the outstanding federal debt. Why the government can't let treasuries collapse Even if the government does not step in to support treasury prices amid a selloff, the end result will be the same. Allowing a crash in treasury market would make the financial system insolvent and cause runs on the bank. The fed would then have to print money to make good on the 6.5 trillion insured deposits around the country, the 1.5 trillion insured senior bank debt, etc... Since trillions of printed dollars would be hitting the marketplace in either case, the fed will choose the least disruptive option of putting a floor under treasury prices with printed money. Selling treasuries is equivalent to printing money It is deceptive to think that, because the government is borrowing to fund its deficits and bailouts, it isn't printing money. This is false. Treasuries should be seen for what they really are: "promises to print money".  

4) Gold
Rising demand for physical gold is a threat to the dollar because it signals a growing loss of confidence in the paper currency. It is also key to understand that gold prices aren't rising because of the changing fundamentals of gold, but because of the changing fundamentals of the dollar. In other words, gold isn't rallying, THE DOLLAR IS FALLING.

Gold is history's oldest and most stable currency. Its utility is simply that it is rare, and for 5,000 years people have used it to store value for the future. All the gold that has ever been produced would fit in a solid cube of about 19 meters on each side, and this cube is only expanding by about 12 centimeters a year (2%). Since the value and supply of gold itself is fairly constant over long periods of time, the main drivers of gold price fluctuations are the ebb and flow of confidence in paper currencies.

Rising gold prices are, therefore, a signal of a weakening currency, which is why governments hate them and try to suppress them. Right now, there is unprecedented worldwide demand for physical precious metals. As a result of this surging demand, gold futures have experiencing backwardation, a rare market condition where gold futures trade under spot prices. It is a signal that gold prices are headed higher and that confidence in our currency is fading quickly. When gold prices break above 1,000 again, the event should be recognized for what it is: the herald of a dollar collapse.
5) China and the yuan
This leaves China with a problem the US could only dream of: huge, unsustainable upward pressure on its undervalued currency. In order to maintain the dollar peg, China would need to fund not only a large part of the US's gigantic trade deficits, but also the trade deficits of those nations around the world which are selling their dollar reserves.

If imports keep falling at their current pace, China will have to buy close to 1 trillion dollars this year alone, which leads to yet another problem: right now, China is not interested In any kind of risky US assets, and what "safe" assets does the US have to sell? (Please don't say treasuries.

All dollar denominated assets are inheritably unsafe due to the currency's horrible fundamentals.) Trying to prop up the dollar would end up destroying its currency without benefiting its economy, and China knows this, which is why you have Chinese central bankers on record as saying that, "The US dollar is unlikely to be stable next year".

Even more ominous for the dollar, China stealthily announced its plan to make the yuan an international currency on Christmas Eve last year. Whether intentional or not, by allowing Chinese exporters to settle their trades in yuan, China is taking a major step towards supplanting the dollar with the yuan as the world's reserve currency.'
6) Never ending bailouts
Although many Americans such as myself are growing tired of America's never ending bailouts, it is important to brace yourself because there are a lot more on the way. Here are a few of the bailouts we will be seeing this year which haven't gotten much media coverage.
A) State government bailouts
State budget troubles are worsening. States have already begun drawing down reserves, and the remaining reserves are not sufficient to weather a significant economic downturn. Also, many states have no reserves and never fully recovered from the fiscal crisis in the early part of the decade. The vast majority of states cannot run a deficit or borrow to cover their operating expenditures. As a result, states must close budget shortfalls by either drawing on reserves, cutting expenditures, or raising taxes. These budget cuts often are more severe in the second year of a state fiscal crisis, after reserves have been largely depleted. The federal government will eventually be forced to step in and offer states some form of assistance to prevent economic collapses and humanitarian disasters. This means another bailout.
B) Unemployment bailout
State-funded trusts which pay unemployment benefits are running out of money. The federal government has increased these funding problems through its repeated extensions of unemployment benefits, with the total run of the benefits now being 10 months. Since there is a massive, post-holiday wave of layoffs on the way, shortfalls in unemployment funding are going to come faster and be bigger than most anyone expects. In response to these shortfalls, congress will loan the states whatever is necessary to keep unemployment benefits coming, even if they have to print every last penny. After propping up financial institutions and indirectly paying their executives billions of dollars, they now have, politically speaking, no choice.
C) Pension Benefit Guaranty Corporation (PBGC) bailout
PBGC is an agency established by Congress to insure participants in defined-benefit pension plans against losing their pension in the case their employer goes under. Nearly 44 million Americans in more than 29,000 private-sector plans are protected by PBGC, and some 1.3 million workers are already covered by plans that have been taken over by the agency. Although the PBGC is financed from insurance premiums collected from companies and the assets it assumes from failed pension plans, it is a widely presumed that the federal government would bail out PBGC. if it became unable to meet its obligations for retirees. There are several reasons to expect that PBCC might need such a bailout this year. First, PBCC is underfunded by $11 billion (based on very optimistic projections).
Second, the economic downturn and financial market meltdown will likely cause PBCC to take over many private pension plans this year and most of these will be severely underfunded. Third, the agency's board decided recently to move a large share of the portfolio out of safe assets like Treasury bonds and into riskier assets like stocks. So, depending on how underfunded the pension plans it takes over next are and how badly its investment portfolio does, it is possible the PBCC might require a federal bailout by the end of the year.
D) Housing bailouts Since a recovery from our downward spiral is unlikely until the housing markets stabilize, there is a good possibility that we will see another, bigger federal housing bailout this year as congress tries to jumpstart the economy. It is important to note that with every new bailout congress passes, it becomes harder to say no to such a homeowner bailout.
The true moral hazard of bailouts
Most commentators misunderstand the true moral hazard of bailouts. While bailouts might have an adverse effect on the future actions of individuals and businesses by encouraging risk taking, the real problem is their effects on future actions of the government.

Specifically, each bailouts makes it harder to say no to the next bailout. This pressure to fund future bailouts is made far worse if those receiving bailout money are truly undeserving. After all, If the government is going to give $45 billion to Citigroup (one of the banks responsible for our current mess) and insure $306 billion of its riskiest assets, then how can it say no to bailing out the state of California or South Carolina?

This "me too" phenomenon will get much worse after the treasury market collapses, and the fed starts monetizing the treasuries that were sold to fund the current bailouts. If fed printed money to bailout the banks, why shouldn't it print more money to fund unemployment benefits? Politically speaking, you can't bailout the irresponsible and then let the responsible sink, which means congress isn't going to be saying no to a lot of the bailout requests this year.

Unfortunately, these bailouts will become increasingly meaningless because, when you bail out everyone, you bail out no one as you destroy your currency.

7) US budget deficits and (lack of) Tax revenuesThe federal government is a facing record breaking budget deficit in 2009. According to the latest government figures, the deficit currently is expected to be $438 billion. For a reliable idea of what our 2009 deficit will look like, to this number we need to:
A) Add the cost of funding the on-going wars in Iraq and Afghanistan
B) Add the cost of recent programs such as the TARP
C) Add the cost of current and future bailouts for the auto companies
D) Add the cost of another stimulus package
E) Add the cost of the programs promised to us by the new administration 
 After subtracting a further 500 billion for lost tax revenues due to our collapsing economy, it is easy to project a budget deficit of at least 2 trillion. So far, the deficit now totals $401.6 billion in just the first two months of this budget year, and, at this annual rate, the budget shortfall is already on track to exceed our expected number. All this isn't even taking into consideration our long term funding shortfall vis-a-vis baby boomers (the future of social security and Medicare is, unfortunately, clear: I would not expect it to be there when you retire (at least not anything like it is today)).

 Our 2009 budget deficits will force the government to sell at least another 2 trillion treasuries this year. Taken together with planed sales by foreign central banks and the expected 1 trillion new bailouts mentioned above, at least 4 trillion treasuries will be sold in 2009. The question remains: who is going to buy them? The answer is that the fed will buy them with printed money.  

Don't worry about the children
For years Americans have worried about passing on our enormous federal debts to our children. Well there is good news on this front: you don't have to worry about the children anymore. America's massive debts aren't going to be paid for by a future generation. They will be paid for today through a massive devaluation of our currency.

What the dynamics of hyperinflation will do to the federal deficits
The current $2 trillion deficit projections being circulated in the media will prove woefully understated should the dynamics of hyperinflation take hold of the economy. A dollar collapse would cause our tax system to break down. Individuals whose income isn't keeping up with inflation will forgo tax payments to spend all their cash on food and basic necessities. Businessmen will find that by merely delaying tax payments, depreciation in the dollar will virtually eliminate their true value.

Even the tax revenue that is paid will have lost most of its value by the time the government collects it. Meanwhile, the rising cost of everything will drive up the federal spending. The government, lacking adequate income to cover these rising expenses and unable to borrow due to the collapse of the treasury market, will be forced to resort more and more to money creation. If/when hyperinflation takes hold of America, do not be surprised to see 1% of government income come from taxes and 99% come from the creation of new money.

8) The "flight to quality"

During the second half of 2008, a "flight to quality" began as hedge funds sold foreign assets to meet redemptions requests. These forced repatriations by hedge funds combined with dollar's outdated reputation as a safe haven produced a record breaking rally in the treasury markets. This "flight to quality" is not something that hasn't seen before. The phenomenon of investors blindly piling into an asset class while ignoring all warnings about the horrible fundamentals and deteriorating outlook has been so common lately that I am growing tired of seeing it. They are called bubbles, and the pattern is always the same:

A) Stock market, October 2007In October 2007, stocks rallied to new all time highs while commentators made insane predictions about the Dow going to 20000. While this was happening, credit markets collapsing, growing mortgage default were threatened bond insurers with insolvency, and the off-balance sheet vehicles of financial institutions were imploding. Considering that the frozen credit markets are the lifeblood without which the economy can't function, these new highs made as much sense as subprime CDOs squared. It should not have surprised anyone that stocks collapsed.
B) Commodities, July 2008
In July 2008, commodities rallied to new all time highs while commentators made insane predictions about oil going to $200. All this was happening while thousands of factories in China were shutting down due to rising costs and falling orders. In the face of the world's plunging demand, the only reason that could possibly have justified $147 oil would have been a complete collapse of the dollar. That was not the case, and the oil bubble burst sending commodity prices plunging.
C) Treasuries and the dollar, January 2009
The current rally in treasuries and the dollar is the latest in a long line of bubbles. Those same commentator which got it wrong on previous occasions are now predicting months of deflation and a new multi-year bull market for the dollar (worst prediction ever). Out of all the bubbles so far, this current rally in treasuries and the dollar is the most ridiculous. The fundamentals behind the dollar, as outlined in this article, are horrendous. There is simply no rational reason to believe the dollar will retain an ounce of value by the end of 2009.
Side note on how to deal deflationists
When faced with a deflationist (one of those individuals who believe in months of deflation and a dollar bull market), ask them this: who is going to finance our trade deficit and bailouts? If they say the world or foreign nations, then list off all the countries with trade deficits who will not be financing the US: Japan, India, Saudi Arabia, Russia, most European countries (with the possible exception of Germany), other oil producers, etc. If they insist on the notion that China alone will pick up the tab for everything, point out that during the great depression, when the US had massive manufacturing overcapacity, America shut down factories rather than extend credit to over indebted foreign nations.

A true "flight to quality" will soon begin Dollar inflows due to hedge fund are over now, as is the dollar rally. As a true "flight to quality" begins, foreigners will start selling their gigantic holdings of US debt. With America's total external debt standing over $14 trillion, this move will cause the dollar's value and purchasing power to plunge.
9) A loss of confidence
Confidence is the single biggest factor in determining a currency's value, and periods of deflation, such as America has been experiencing these last few months, tend to undermine that confidence and create hyperinflation. Economic troubles, deteriorating debt ratios, and scary charts are a few of the factors resulting from a deflating economy that can lead investors to lose confidence in a currency.  

US economic troubles
The US has boatloads of economic troubles ahead which are sure to eradicate what little confidence is left in our economy. Here are just a few of the negative economic developments to expect this year.
A) Post-holiday wave of layoffs
There is a wave of post-holiday layoffs in the pipelines. Since employers don't like to layoff workers right before or during the Christmas/New Year's holidays (bad publicity), there is a slew of pent-up job cuts about to occur this month. Chicago, for example, is preparing for mass layoffs in 2009, and we are likely to see at least 1 million jobs lost in the first two months of this year.
B) Manufacturing sectors problems
After having outsourced its polluting and labor-intensive industries abroad, the US manufacturing sector has been left heavily concentrated in durable and capital goods. Orders for these types of big ticket items are set months, if not years, in advance. Even before Lehman brothers went under, new orders for these products were falling drastically. The full effect of last year's big drop in orders, including job and production cuts, will only be felt throughout the course of this year. 2009 is not going to look pretty for what is left of our manufacturing sector.
C) New state taxes and spending cuts
As mentioned above, State budget troubles are worsening. Even with the eventually federal bailout, states will still need to drastically reduce spending and raise taxes. When states cut spending, they lay off employees, cancel contracts with vendors, eliminate or lower payments to businesses and nonprofit organizations that provide direct services, and cut benefit payments to individuals. These cuts, like new taxes, drain an enormous amount of money out of circulation. This leaves business and individuals with less cash and thereby removes demand from the economy, causing state and federal GDPs to contract.
Deteriorating debt ratios
With federal debt growing and our GDP shrinking, our debt ratios are rapidly deteriorating. Especially with 2008 over now, economists are going to start putting numbers together and making estimates which will be truly scary. Although official figures aren't available yet, common sense can give us a good idea of what to expect.

Take, for example, our net international investment position. US's net international investment position = US owned foreign assets - Foreign owned US assets America's net international investment position (what the US owes the world) has likely worsened enormously in 2008. For one, US stock markets have outperformed most foreign markets last year (easy to do since fed can print dollars to prop up the market), meaning that the valuation of US assets abroad decreased far more than the valuation of foreign owned assets at home.

Hedge fund deleveraging and redemptions forced the selling of US assets abroad at those discounted prices, decreasing the amount of US assets held abroad and locking in the losses in crashing foreign stock markets. Furthermore, the misguided "flight to quality" which began in the second half of the year undoubtedly increased foreign claims on US assets as money flowed into treasuries. Finally, our trade and current account deficits likely increased foreign dollar holdings by at least $600 billion.

Taken together, these factors have most probably doubled the US's negative investment position in 2008, from 2.5 trillion to 5+ trillion. Since our GDP for 2009 will shrink below 10 trillion, the US now owes around half this year's GDP to the rest of the world. News that the US owes foreigners half its GDP will not exactly inspire confidence in the dollar.

Scary charts
Charts and other visuals can fully convey the magnitude of our current economic crisis in a way words cannot. With 2008 over now, expect to see some truly terrifying graphics depicting just how badly the US economy self-destructed last year. Here are two examples of what these charts will look like:  

10) The dollar's former self 

The US dollar in 1944
Following the end of World War II, the United States was a global powerhouse whose domestic industries were producing half of the world's manufactured goods. At this time, the US was also a creditor nation and held over half the world's foreign reserves. As the US was running a huge balance of trade surplus, these immense foreign reserves were growing fast. In additions to foreign currencies, the United States also held $26 billion in gold reserves, approximately 60 percent of the world's estimated $40 billion.

Finally, the dollar was the only post-war currency fully backed by gold. The strength of the US economy, the fixed relationship of the dollar to gold at $35 an ounce, and the dollar's full convertibility into gold at that price made the dollar as good as gold. In fact, the dollar was better than gold: it earned interest and was more flexible than gold. It was under these strong fundamentals that, in 1944, the Bretton Woods agreement was signed and the dollar became the world's reserve currency.
Today's dollar
The fundamentals backing today are just as amazing as they were back in 1944, except in a negative sense. The US has managed to outsource its industry to the point of total dependency on foreign imports for its basic consumer goods, energy, and, to an extent, even food. The US can today claim the exalted status of the most indebted nation in human history, with every level of society (individuals, corporations, local/state/federal governments, etc) owing an unpayably large amount of money.

The US capital markets have been tarnish by widespread financial failures, haphazard bailouts, and blatant corporate corruption, the latest being the Madoff's ponzi scheme. There are also growing doubts about how much gold, if any, are left in our reserves. Perhaps the most damning Indictment of our currency comes from this contrast between its past and current self. How can today's dollar be anything but a joke when compared to its former greatness?

The dollar's status as the world's reserve currency
The dollar became the world's reserve currency through its strong fundamental and by having the longest reliable history of increasing purchasing power. Today's dollar has long since lost both those qualities. Those pointing to the dollar's special status and expecting a new dollar bull market should realize that not everything about being the favored international reserve currency is positive. The downside of being the world's reserve is that everyone is sitting on a great pile of your money, which they could decide to dump back into circulation.