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

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.

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?

The 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
China is in a different situation that most other nations as it has a growing trade surplus, which stood at $40 billion as of November. As a result of disappearing Asian demand for luxury items and commodity prices plunging, imports to China crashed 17.9 percent in November while its exports only fell 2.2 percent. 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 revenues
The 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 packageE) 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 2007
In 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.

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Hawaiian Government

SUBHEAD: A response to others who questions Hawaiian's fight for justice.

image above: NASA shot of Hawaiian islands. Kauai in foreground looking southeast

GOAL: Is to educate the people of HAWAII and the WORLD that the Reinstated Lawful Hawaiian Government has INITIATED the process of RECLAIMING all of the NATIONAL lands that belongs to the INHERENT SOVEREIGNTY the key word is inherent sovereignty. (KANAKA MAOLI)

MISSION: To PEACEFULLY demonsrtate that the Reinstated Hawaiian Nation OWN'S all the NATIONAL lands ( Real and Chattel Property) prior to the Overthrow of the Kingdom of Hawaii on January 17-1893. ( Queens Proclamation stated to reinstate our country not reorganize it for America).

By Kane Pa on 31 December 2008 in Island Breath -
(http://islandbreath.blogspot.com/2009/01/reinstated-hawaiian-government.html)

Where is our Hawaiian Nation's Hawaiian government that they acknowledge was violated under international law, this is the BIG question. Reinstating our Hawaiian Government (RHG) is the only sollution, Kanaka maoli don't own ceded lands, we own our national lands. Which includes Government, crown and all national lands.

The State of Hawaii didn't overthrow our country, they received stolen property that was illegally ceded to the U.S. from the Republic of Hawaii that was and still is the DE-FACTO Provisional Government.

You want justice without a Hawaiian government. Who do you expect the courts to agree is the government it belongs to. Public Law 103-150 stated that it belongs to our Hawaiian government and that Queen Lili'uokalani preserved our inherent sovereignty's perfect right to reinstate the nation. Please tell me why do we continue to protest that it belongs to our people and yet our people don't follow the very laws that stated we have the right to form and select a government of our own choice.

I don't disagree on your intentions, but there is a proper claimant and it's the Hawaiian Government that our ancesters created. Prime Minister Henry Noa is the first to educate our people about reinstatement and why we need to reinstate our former Hawaiian government first and most.

Yes you may disagree, but we choose to reinstate the Hawaiian government, manifest our political authority, so we can prove that we lawfully exist.

We are doing this for you and your children. Understand how international law works.

If the Supreme Court ask you where's your government, what is your response? Do you have one? Will you tell the Supreme Court and the world that you didn't build one yet? You came this far without a government, or a citizen base, (Hawaiian Nationals). Where do you go from there? The United States won't give up our lands, we need to take it back by law using International law. Kahoolawe is the first step then in reinstating the Hawaiian government's properties. Please understand how the law works.

We will be their for the march. We must come together as everyone says. Sign up and run for office. The RHG never excluded anyone from participating in our process. Why should we wait for others to say when we can or cannot reinstate our former Hawaiian Government? We exercised our perfect right by not waiting anymore.

An important detail of Public Law 103-150 is that it has a seven year statue of limitation to respond to the claim. That began November 23 1993. The RHG reinstated the Hawaiian Nation March 13 1999. Support our ancestors support your kupuna's and support our RHG for all.

Reinstated Hawaiian Government 31st constitutional convention at Io'lani Palace on January 16-18, 2009. January 17th is the big march expecting 10,000 to 15,000 people.

Prime Minister Henry Noa will meet with DLNR. The rules have change, thanks to individuals claiming individual status.

RHG is moving forward as planned on what ever the dicussion is between RHG and DLNR.

We are recording Human rights violations for our law firm in Europe, so they can begin to build our case in the Hague.

Federal and State of Hawaii passed into law H.R.S. Act 359, 1999. To be govern by an sovereign nation of our own choosing.

The key word is Sovereign Nation. The Akaka bill is merely to pass our sovereignty to the United States - Nothing more and nothing less.

They intend to violate the very laws that they passed that acknowledge we have the right to form our government.

Why do they pass these laws and punish our people for violating the very law that gives us our rights?

That seems a human rights violations upon our Reinstated Hawaiian Nationals.

KAUAI RHG MEETINGS : Every Mondays @ 6:00 p.m. till 9:00 p.m. (Everyone is invited)

District -1 position is open for the House of Representative. Person got real sick and ask to step down.
Noble Timithy Oga ( 808-652-1608)

District - 2 KOLOA BASEBALL PARK in the far lefthand corner.
Representative: Leland Yadao
Noble : Kekane Pa Contact number : 808-645-1838

District - 3 ANAHOLA CLUBHOUSE Hawaiian Homesteads
Representative : Keohukui Kauihana
Noble : Stewart Kopa Akana (808-639-2610)

Minister of Interior Naliko Markel : (808-828-0914) home. (808-346-9663) cell.

Kauai Island organizer:

Kane Pa - email: kekanepa@hotmail.com

Biophysical Economics

SUBHEAD: In the future, economists will return to earth

by Rex Weyler on 1 January 2009 in The Tyee
http://www.thetyee.ca/Views/2009/01/01/Economics/

The year 2009 will witness a tsunami of appeals to economists to fix, as disgraced Federal Reserve chairman Alan Greenspan put it, the "flaw" in their thinking. Most will get it wrong.

The proposals for bailouts, regulations and government spending sprees all share one tragic flaw: they assume no physical or biological limits to human growth. Most economists cling to an 18th century mechanical universe that conjured an "invisible hand" of God, that would allegedly convert private greed into public utopia.

image above: Mechanical Universe - a giant astrolabe photographed in Alaska in 2004

Indeed, a few got rich, but the meek inherit an earth featuring child slavery, sweatshops, a billion starving people, toxic garbage heaps, dead rivers, exhausted aquifers, disappearing forests, depleted energy stores, lopped-off mountain tops, acid seas, melting glaciers and an atmosphere heating up like a flambé.

Meanwhile, a rigorous subculture of scientists and economists have been working to free economics from its 18th century quagmire by reconciling human enterprise with the laws of physics, biology and ecology.

Their time has come. This year, 2009, will signal the birth of a genuinely innovative economics that will eventually displace the patchwork rationalizations for greed. The new ecological accounting is variously called "dynamic equilibrium," "steady-state" or "biophysical" economics.

What about technology?
Ignoring nature remains the tragic conceit of conventional economists, who presume we can grow our economies forever without regard to quantities of materials, energy and pollution. Biophysical economics, on the other hand, acknowledges that there exist no cases in nature of unlimited growth.

Dr. Albert Bartlett, emeritus professor of physics at Colorado University, urges economists to learn the laws of nature. Non-material values -- creativity, dreams, love -- may expand without limit, but materials and energy in the real world remain subject to the requirements of thermodynamics and biology. "Growth in population or rates of consumption cannot be sustained. Smart growth is better than dumb growth," says Bartlett, "but both destroy the environment."

What about technology? Some economists imagine that computer chips or nanotechnology will save us from the laws of nature, but every technical efficiency in history has resulted in more consumption of energy and resources, not less. Remember when computers were going to save paper? That never happened. Computers increased paper consumption from about 50 million tons annually in 1950 to 250 million tons today. Meanwhile, we lost 600 million hectares of forest.

Nor is the Internet a celestial realm where ideas are exchanged for "free." Computers require copper, silicon, oil, toxic chemicals, massive energy for server networks, and garbage heaps for techno-trash. In every industrialized nation, energy and material consumption is increasing, not decreasing. Technology is not energy. It costs energy.

Malthus revisited
In the 1970s, World Bank economist Herman Daly wrote "Steady-State Economics," to outline the future of ecological economics. Daly makes a distinction between "sustainable growth," which is "impossible" and "sustainable development," which is natural. "The larger system is the biosphere, and the subsystem is the human economy," says Daly. "We can develop qualitatively, but we cannot grow beyond the biosphere's limits."

A U.K. commission chaired by Sir Nicholas Stern called global warming "the greatest market failure ever seen." Pavan Sukhdev, economist for Deutschbank, estimates that forest destruction erases $2.5 trillion in "natural capital" annually. Mark Anielski, an economist in Edmonton, estimates that "ecological services" from Canada's boreal forests -- carbon capture, water filtration -- are worth about $93 billion per year.

In the 19th century, Thomas Malthus and John Stuart Mill introduced ecological economics, warning that human expansion would eventually meet natural limits. Industrialists have mocked Malthus and ignored Mill for two centuries, but the evidence now suggests that the discovery of petroleum only postponed the effects.

Many economists now recognize that Malthus and Mill were essentially correct. A 2008 Goldman-Sachs report about commodity shortages stated, "we see parallels with Malthusian economics." Popular investment advisor James Dines told a New York investment conference in May that food and fuel scarcities are a "result of a Malthusian planetary limit."

"Limits to growth are real," says Anita M. Burke, former Shell Oil and B.C. Hydro sustainability advisor. "We must embrace adaptation strategies that create new ways of being in relationship to each other and the planet. The solutions offered by growth economics are inadequate. These will be replaced by an economics that accepts the limits and laws of nature."

Biophysical Economics
"Energy used by the economy is... a proxy of the amount of real work done in our economy," says Charles A. Hall, at the State University of New York. In the 1980s, Hall and others hypothesized, "Over time, the Dow Jones should snake about the real amount of work." Twenty years later, a century's market and energy data shows that whenever the Dow Jones industrial average spikes faster than U.S. energy consumption, it crashes: 1929, the 1970s, the dot.com bubble, and now with the mortgage collapse.

World oil production plateaued in 2005, and as the price of oil rose from $35/barrel in 2004 to $147 in 2008, it added a $3.5 trillion annual cost to human civilization. "That reduced discretionary income," says Hall, "the domino that led to a decline in aggregate demand, particularly for suburban real estate." Jeff Rubin, chief economist at CIBC World Markets, agrees: "Oil shocks create global recessions."

A popular Wall Street publication, The Corporate Examiner, is planning a special edition this year on "the end of faith-based economics," with an article by Hall and his colleagues. In October, Hall convened the first International Conference on Biophysical Economics in Syracuse, New York, and will publish a book this year. "Since economics is about the production and transfer of physical things or services that require energy," says Hall, "it is a biophysical science, not a social science."

Robert Costanza, director of the Gund Institute for Ecological Economics at the University of Vermont, will launch two periodicals this year: an annual academic anthology, The Year in Ecological Economics, and a bimonthly magazine, Solutions, for technical and popular articles about ecology and economics. "To repair our economic system," explains editor Ida Kubiszewski, we must realize that "the mounting environmental and social problems we face are systemic. Articles in Solutions will employ whole-systems thinking."

The editorial board includes pioneers of ecological economics -- Herman Daly, Ernest Collenbach and Vancouver's Bill Rees, who developed "ecological footprint" analysis at the University of British Columbia. Rees calculates that human consumption of the biosphere is "already 30 per cent into overshoot," consuming more than the ecosystem can replenish. "We must account for the environment," says Rees, "reduce total consumption, and then address equitable distribution."

'Sooner or later…'
"We are dying of consumption," says Peter Dauvergne, sustainability advisor at UBC and author of The Shadows of Consumption. "The unequal globalization of the costs of consumption is putting ecosystems and billions of people at risk."

To honestly achieve a "sustainable" economy, humanity must step through a paradigm shift, as profound as the transition in the sixteenth century, when Copernicus showed that the earth is not the centre of the universe. Likewise, ecology teaches us that humanity is not the centre of life on the planet. Just as the Pope's henchmen refused to look through Galileo's telescope, some economists avoid looking out the window to see what keeps humanity alive: photosynthesis, precious materials, and concentrated energy.

"Sooner or later," as ecologist David Abram puts it, "technological civilization must accept the invitation of gravity and settle back... into the rhythms of a more-than-human earth."
In the 21st century, human enterprise has reached the scale of the planet. We have to account for ourselves on nature's balance sheet. This is biophysical economics. It appears inevitable. Biophysical culture is what we will make of it.

It's Universal

SUBHEAD: How the US Marines live in Okinawa illustrate how crazy we are

By Juan Wilson on 1 January 2009 -

I was checking out the "free book bin" outside the Hanapepe Public Library a day before New Year's Eve and stumbled on the September issue of "Okinawa Living". It is a sixty-four page color glossy extravaganza and a U.S. Marine Corps Community Service Publication. It is geared towards military service personnel, and is an eye-opener on how alien Americans have become not only to the world, but to themselves.

image above: detail of cover of September 2008 "Okinawa Living"

The cover article was about the Camp Fuji Martial Arts Expo that brought together practitioners of a variety of Japanese traditional forms of combat. It pays homage to Japan's historic military values and disciplines and even features a vignette of our US marines carrying on that tradition.

Of course, the Japanese have a continued discomfort with United States troops in Okinawa. I imagine that this puff piece is in part to assuage the Japanese who may find "Okinawa Living" left behind at a local McDonalds, and in part an effort to "orient" the Marines to the customs of the land they occupy.

The magazine is sprinkled with ads for restaurants with knife wielding Japanese chefs. There are many ads for seafood restaurants and articles making local seafood more "familiar".

To make this distant and alien place seem more familiar and fun the Marines have arranged to make available all kinds of recreation from Bingo to Texas Hold'em Tournaments. More than one ad bragged of American styled bars that feature "Lady's Night".

image above: Detail of DOD ad (see http://www.thatguy.com) to shame women on Lady's Nights

Obviously the call to women in the service or married to men who serve has worked. A cautionary ad from the Department of Defense is aimed at women who imbibe. The ad's title is "WARNING BEWARE OF: that Drama Queen" and goes on to say "she gets more obsessive, jealous and weepy with every cocktail" and "loses her sex appeal due to puke stains on her blouse".

The ad seems an attempt to shame the unhappy gals stuck in Okinawa who go out seeking Happy Hour on Lady's Night and end up disappointed and drunk.Their website is http://www.thatguy.com.

The back-cover of the magazine is a full color ad for Universal Studios Japan with an invitation to hop on a plane and join the Halloween fun between September 4 - Nov 4. It is truly spooky. The ad synergistically coincides with a feature article inside.

The big feature article in the magazine is about the Japanese Universal and Disney theme parks and how they'll make the family feel good to be Americans. If this is America, I'm glad I live in the Nation of Hawaii, even if a few Hawaiians think Las Vegas is the eighth island.

Below is the article on "getting away" -

image above: detail of illustration for feature article on vacation-get-aways

[Editor's Note: Who are the aliens here? Who feels at home when they get to a place with tarantasaurus rex roam the land, ogres fly dragons through the sky and heroes are hybrids of half-spider/half-man... Ahh! Home Sweet Home!]

by Mike Daley in September 2008 Okinawa Living

Japan can seem like an alien landscape for the first-time visitor, light years away from the familiar sights of home. But did you know that a generous slice of Hollywood is only a island hop away?

Although many consider being stationed in Japan a vacation in itself, living in a foreign land for an extended period of time can leave families longing for a vacation from their vacation. But traveling back to the U.S. (with family in tow) to its comforting familiarity can be an expensive and hectic proposition.

Universal Studios Japan, located in Osaka, is celebrating seven fun-filled years of bringing the magic of Hollywood (and a heavy dose of the good 'ol U.S. of A.) to the Far East. Known locally simply as USJ, Universal Studios Japan consists of rides, attractions, shops and favorite characters such as Woody Woodpecker, Snoopy, Shrek, Elmo, Big Bird and the Cookie

Monster (from Sesame Street), and more wandering about in nine distinct themed areas. There are a total of I5 attractions and 20 restaurants. Some of the attractions, such as Snoopy Studio and Universal Studios Motion Picture Magic, are unique to USJ and cannot be experienced at any other Universal theme park.

USJ features a multitude of familiar rides and attractions based on blockbusters such as Jaws, E.T., Back to the Future, Jurassic Park, and Spider Man, but USJ also introduces visitors to characters that are a bit more "local" such as Nature, Hello Kitty, and others. The park features a number of live-action shows, mountains of movie- and character- inspired memorabilia, and even themed decorations and shows based on holidays such as Christmas and Halloween. Because USJ is the only Universal Studios theme park located outside of the U.S., much of the park is centered around American-styled sights and restaurants, (ranging from San Francisco and New York to fictional locales such as Jurassic Park).

Although Tokyo's Disneyland and Disney Sea may be the favorite kids destination in Japan, USJ also features plenty for children. The major attraction at Universal Studios Japan that is unique to the park is Snoopy's Playland-a must-see for anyone traveling with children (and the young- at- heart). All the Peanuts characters are featured (some boasting their own themed rides such as Peppermint Patty's Stunt Slide).

Fans of Charles Schultz's comic strip will also enjoy a trip to Snoopy's Sound Stage Adventure, which places kids in charge of their own movie (with a world-famous beagle's assistance, of course). Here visitors can catch a ride on a roller coaster that circles USJ. Similarly, anyone with kids who has spent more than a day in Japan will have developed at least a cursory knowledge of Hello Kitty characters. Children will be delighted by the daily Hello Kitty parade that winds its way throughout the park. Universal Studios Japan also features children's favorite characters from Sesame Street - including the almighty Elmo. The 20-minute Sesame Street 4D Movie Magic presentation will have kids squealing with excitement.

Many local Travel Agencies, such as Omega World Travel, OTS, and HIS offer package tours to Universal Studios Japan. Prices vary, but begin at around $400 per adult complete with hotel accommodations (two or three days), making it a great latesummer vacation locale. From September 4 until November 3 USJ will be featuring a Halloween theme. For more information about travel, contact a local travel agency. For more information about USJ visit their website: www.usj.co.jp

Peak Oil - Civil Unrest

SUBHEAD: Will we need marshal law to avoid Mad Max living?

by Tom Whipple on 31 December 2008 in the Falls Church News Press
http://www.fcnp.com/index.php?option=com_content&view=article&id=3947:the-peak-oil-crisis-civil-unrest&catid=17:national-commentary&Itemid=79

Before grappling with 2009, it might be useful to remind ourselves that there is a dark side to what lies ahead.

There was a little flurry in the news last week when it was discovered that the Army War College had released a report talking about preparing for civil unrest in the U.S. When you read the report, it turns out to be yet another warning about generals preparing for the last war. It devotes only three pages to the idea that the Army might soon find itself so embroiled in helping local authorities cope with civil unrest that international commitments, such as the war on terrorism, could become secondary concerns.

image above: National Guard face residents of Newark, New Jersey during unrest in the summer of 1968.

Since the close of the Civil War, America has enjoyed nearly 150 years of domestic tranquility. There were, of course the Indian wars, some labor disputes and a handful of urban riots in recent decades, but these were isolated and did not last for long. Even during the great depression of the 1930's America's social fabric stayed largely intact. Signs that these idyllic decades may be coming to close are starting to arise. In the last few weeks the deteriorating economic situation has seen serious disturbances in Greece and Thailand. We are beginning to read of disturbances in Russia and China.

Most realists foresee that 2009 will be a bad year with stock markets declining, unemployment rising, real estate values falling, government bailouts continuing, deflation morphing into inflation, the dollar falling, and oil prices rising. Thus far the economic downturn has not had a serious social impact. However, food banks are running short, shoplifting and other property crimes are on the rise, child neglect is increasing as is infant mortality. However, considering the pace at which people have been thrown out of work during the last year most seem to be getting by - so far.

Of all the world's nations, America is probably the worst prepared to deal with deep, prolonged economic hardships, for more of us have disconnected from 19th century, rural, somewhat self-sufficient, lifestyles than in most other countries. In the 1930's many found that they could still return to the family farm, where food, shelter, and meaningful work was available. In 2010 that option exists for very few; we have become dependent on a complex infrastructure fueled by oil for our food, water, clothing and warmth. Start reducing the flow of oil and increasing numbers of us are going to become increasingly desperate.

There are too many turns in the twisting paths that the current economic and oil depletion crises could take to speculate on the details of what is likely to happen. However, there are many potential "failed states" around that we are likely to have concrete examples, shortly, of what happens in the 21st century when civil order breaks down.

It is clear that we are already seeing the opening ripples of what might turn out to be the major social problem of the century - caring for large numbers of destitute people. Most of the social nets in America such as unemployment insurance, charities or shelters have strict time or limited resources. Already charity and religious contributions are starting to drop.

As the situation worsens, it is going to be much cheaper for governments at all levels to provide essential food, shelter and other services, rather than wait for desperate people to start stealing and become ensnared in the criminal justice system. One of the key benchmarks of the next few years is how quickly governments will redeploy resources away from 20th Century priorities such as space travel, expensive weapons systems, and highways towards simply getting people through the decades of transition from current lifestyles. The change will not be an easy one.

Before we get to mobs in the streets, we are likely to go through a time of increasing petty crime and the ensuing pressures on the criminal justice system. Somebody is going to have to think through the appropriate response to major increases in shoplifting and burglaries by people who are trying to feed children after having exhausted all other avenues of assistance.

It is likely that who is kept in prison and for what is going to have to be rethought. State and local revenues are already dropping rapidly and the day is not far away when choices between funding school systems and maintaining vast prison systems will need to be addressed. Alternative forms of deterring criminal behavior and forms of punishment will need to be devised. Indeed the economic situation could deteriorate so rapidly that some of these changes may need to be made in months rather than years.

It is likely that part of the of the solution to getting hundreds of millions through decades of shortages will involve increasing infringement on what many now consider their civil liberties. Better forms of personal identification will be necessary. It is likely that rationing of many things we take for granted such as fuel, food, medical services and travel and even places of residence may become necessary. Other societies have found such measures necessary in times of crisis.

America has not faced a serious domestic crisis for 150 years. We have never faced a situation where 300 million of us bound up in a complex and interdependent society has had to make major involuntary changes in our lifestyles.