I write this blog out of an ever growing cynicism and sometime flabbergasted realization of how this country’s and the world’s economies have been total screwed up for such a long time.

The posts I tend to make reflect that cynicism and that fact, combined with the new wordpress theme I am using (by devolux) that pulls posts randomly to fill the block above may provide some startling introductions to BungeeBones.

But I believe we live in some serious econmic times. I believe I’ve faced the truth that we have been lied to by our government, teachers, parents and we have even lied to our selves. And while many of the things I write about are controversial (and as some may say “opinionated”) and while it is often not considered prudent to talk about things like that as part of business, i don’t believe one should leave their ethics outside the door when they enter the business world.

At the heart of BungeeBones, I’m asking web site owners to trust me with their web traffic. If they are going to do that they are entitled to know me (warts, thistles, thorns and all). It’s pretty hard to hide when you are blogging about what you see going on around you on a regular basis.

At the root of the economic problems of our nation and the entire western world, I believe, is the fact no one (except the Almighty Himself) can print money out of thin air. But the entire Western world has followed a path that claims such is possible. We (the people) may have been as gullible as the proverbial Ginger Bread Man and we are now on the fox’s back and are now way out in the middle of the stream. In fact, I think we are on top of the fox’s head ready to be tossed in the air for that one final event (being devoured). But many, too, have gone along willingly and enjoying the ride while it lasts.

I blog about quite a few things including economics, gold, silver, survivalist issues, minimalism (getting by with less), the real estate collapse, corruption in the real estate industry, religion, current events, etc.. I’ve been asked many times where I get these “crazy” ideas. Well, I’ll let you read some of them for yourself and let you decide how crazy they are before I answer that. On a lighter note I’ve started studying guitar in a very unconventional manner and have a thread about that. Enjoy!

No tags

Here is the link to Dr. Ron Paul’s address to CPAC (Conservative Political Action Committee)
http://www.youtube.com/watch?v=3BWEBXKOkaI

One thing that really strikes me about this video is the huge level of support Dr. Paul has there. While I did see his YouTube videos when he was running for President I did get a large dose from the main stream media. For the most part, I would say the main stream media treated Dr Paul unfairly and were a “hostile” crowd.

If that was where you got to view Dr. Paul also then I suggest you take a look at this video to see him with a friendly crowd. While his message is the same in front of either, this one is so much better. Ron Paul’s supporters LOVE him. How many politicians can claim that?

No tags

In this kitco.com commentary the following quote is included

But according to economist Geng Xiao, director of the Brookings-Tsinghua Center for Public Policy, it’s still in China’s—and the world’s—best interest not to dump the dollar just yet….
In an interview with McKinsey Quarterly, Xiao noted that there’s no argument on either side about the trade imbalance between China and the US. However, there are some philosophical differences between the two as the US places more emphasis on the short-term adjustment through price and the RMB exchange rate, whereas the Chinese put more emphasis on medium and long-term structural and institutional change.

As I highlighted in bold, the main point behind the call to revaluing the Yuan is to cause the prices of Chinese goods sold in this country go up. That’s it, there is no big, complicated formula that one needs to run to come up with the effect. No, the cause and effect of revaluing a currency are widely recognized and understood… and the proponents of it want their prices to go up.

But there are other methods that would have the same effect. If one bothers to read the US Constitution it is spelled out that Congress has the authority to impose tariffs. In fact, I believe that authority is so clearly spelled out that a grammar school student could recognize it there.

Placing a tariff would a) immediately make the prices higher and b) would bring huge sums of money into the treasury. So, the question is… why hasn’t Congress met its responsibility and protected its citizens from unfair trade and currency practices? In case the members of Congress are cognizant of the fact that collaborating with an enemy is an act of treason then they need to recluse themselves from serving.

But are we in an economic war with China? The answer to that question determines whether our own Congress is treasonous or not doesn’t it? But wait! Isn’t it Congress that is supposed to be the one to declare war? Well in this case, if they did declare we are in a state of economic war with China then they would also be sending the clear signal they are traitors (or have been) and have been collaborating with what has now become an economic enemy wouldn’t it? Is it possible, then, that our own Congress has been bought and paid for by the Chinese and are powerless to do anything against the financial onslaught coming from them?

No tags

I met a psychiatry student on the bus yesterday while on my way to an entrepreneur MeetUp. We had discussion on a wide array of issues and among them I asked if he had come across anything proving or disproving the claim that we humans only use 10% of our brains. His reply, for what it is worth, was that there was not, and a major area of his own studies was to “unleash” the unused potential of our brains”.

I would not have bothered writing about this except an article appeared in the BBC about “sophisticated” ancient humans etching on ostrich eggs. that brought my bus conversation back to my memory. The article puts a date on the etchings at 40,000 years ago.

I may be wrong, but it is my understanding that in order for a “creature” to be classified “human” it requires that the creature have the same brain capacity that we have today. In other words, a larger brain is a trait of being human and our brains have not “evolved” anymore beyond that point where humans became a distinct species. If it had, we would have different species and subspecies of humans, each with larger brains than its predecessor.

So, based on my assumption then, I would believe the brain of the egg etchers were the same as ours but they were “primitive” by our standards because they lacked knowledge (specifically the knowledge written by previous generations which has accumulated over time). Had they had access to the wealth of knowledge we have today their brains would have been able to assimilate that knowledge as well as we do.

So now back to my bus buddy. I pointed out to him how odd it would be for a “creature” to evolve any unused capacity since evolutionary theory states that the traits that enable better survival are passed on. If evolving a brain with higher capacity resulted in higher survival that creature would flourish. If it was a detriment to survival it would diminish in the population. But it makes absolutely no sense that a creature would evolve any capacity and then NOT use it?

From what I gathered from my bus buddy, it is commonly accepted that we, as humans, have untapped potential. That is easy to accept just as presented but to then say that the untapped potential evolved would require some supporting scientific evidence. For example, how much “untapped” brain power does a chimp have? Are they at 10%? 20%? 50%? If they have, then in theory, at least, they could be also trained to surpass their used portion, tap into their unused portion, and the total then could easily surpass what humans utilize as a norm.

Evolutionist put forth a lot of ideas but the ideas they put forth also lead to other questions. If we look at the Creationist view, and the Biblical account of that event, then the explanation of why we have untapped brain power is readily explained. The entire Creation story has humans starting at a higher level, falling from that higher level, and being restored to that higher level. That seems to line up better with the unused brain capacity observation than the evolutionary theory does.

But what do I know, I’m still trying to tap into my own untapped brain power as I write.

No tags

And here we go… I’m certain the blogosphere is just ablaze with posts about President Obama’s proposal or initiative for “dramatic reductions” in the US nuclear weapons arsenal.. That is going to be one of the most historical undertakings of this century and I, for one, applaud you and salute you, Mr. President.

We, as a people, have been living under a huge cloud caused by our creation and use of nuclear weapons for too long. If you don’t think of it as “a cloud” I suggest you take a look at Atomic Cafe which is described as a Disturbing collection of 1940s and 1950s United States government issued propaganda films designed to reassure Americans that the atomic bomb was not a threat to their safety.. I’m sure it wasn’t “funny” living through the era but looking at the footage now is absolutely hilarious.

But we, as a people, stand dumfounded that someone could strap themselves with explosives and walk into a crowded store, mall or office building and blow themselves up. Well, maybe its time you all woke up and see that is exactly the same thing we “threaten” with our nukes. It was called “Mutually Assured Destruction” (M.A.D. for short) and it was the ruling attitude here in the US since WWII and the start of the Cold War. So, since both we and the suicide bombers are willing to take ourselves “out” along with the enemy by the use of the nukes then, realistically, the only difference between us and that suicide bomber is the size of the “bang”.

But it may be a worse morality for us than that suicide bomber because we are not limiting our threat to just us and our enemy. No, we really threaten the entire world (more specifically we HAVE BEEN threatening the entire world for years). Along with our enemy, and ourselves, we have threatened every man, woman, and child on this planet. That has, I’m sure, placed them in constant fear, as it has ourselves as seen in the Atomic Cafe.

Some may say that we hold them (nukes) under the most stringent “restraint”. Well, need I remind them 1) we did use them (twice) and are the only ones to do so 2) we were so stupid with them that we conducted above ground testing with them causeing thousand upon thousands of premature deaths and 3) we still “threathen” to use them on a constant basis. The mere threatening and maintaining of a system meant to maintain constant fear is, by definition, terrorism.

So, we threatened the world with nuclear destruction for 60 years and haven’t used them YET. Are we willing to? I say, if so, then we are either terrorists (if we threaten the use of them to muscle our political will) or suicide bombers if we are willing to use them for “self defense”.

Besides, they are pretty much archaic anyway. Why use nukes when you can spread biologicals or wipe out satellites, economies and infrastructures electronically?

Our best defense is a sound economy and a well armed citizenry as the Constitution specifies. We ourselves are on the receiving end in Afghanistan and Iraq of what happens when you invade a country with a well armed local citizenry. The same would be true of any foreign invader here.

No tags

This BBC article brings focus to an interesting dilemna created by the transient nature of information on the Internet and whether it should be archived or not. According to the article, a group that does, in fact, do archiving of websites describe how the vast majority of what gets posted on the web eventualy vanishes forever. It made me realize there is a paradox, a big one, in our current understanding of “right” when it comes to printed and written information.

The point that triggered this was when they said they needed the owner’s permission in order to archive the material. Well, that was news to me, and kind of a surprise, but I don’t live in the UK. Would the same permission be ruined if I wanted to place someone’s book in a time capsule for 1000 years?

There lies the paradox. We obtain certain rights when we get possession of written material. We can hide that book away for whatever time or reason we want. Why can’t that be done with information on a website?

The difference must be in the licenses conveyed, or more specifically the license that government or society is imparting to what I put on the web. In this case it is the government placing the curb on the uses of the material. But it seems this is an over-reach because they would not/could not do the same for books, movies, video, audio etc.

it all other mediums it is understood that there is a point when the material has left the control of the creator and it become the property of the holder to do with it almost whatever they choose. It is well understood that they do not have the right to distribute the material. That is not the case mentioned in the article.

So, I guess I’m at a loss as to why the UK government is maintaining such a position? It seems more like a power grab than it does of their protecting intellectual property.

No tags

In my recent blog post “Evidence Our Money System Is A Ponzi Scheme!” I mention a NY POST article that lists Great Britain as the US’s third highest lender.

Well, here are a just a few days later and we have the BBC writing this article about how the Brits have to reign in their deficit spending.

Again, how and/or why would a nation on the brink of economic colapse be lending money to another country? It makes absolutely no sense unless, of course, it is in-fact a Ponzi or check kiting scheme and all the Western countries are just passing rubber (phoney) checks.

Open the two article side by side and compare them.

No tags

In this BBC article they report on a study done and they use the headline “Obesity ‘often set before age of two’ “.

Later in the article they say

“Although the reason for rapid weight gain in early life is not well understood, contributing factors are likely to be poor diet, early introduction of solid food, and not getting enough exercise, the researchers said.”

Perhaps the reason for the researchers lack of understanding is that they haven’t figured out how the infants are raiding the refrigerators when the adults aren’t looking and stuffing their faces. That must be the key so if they can figure out how to keep the toddlers out of the fridge (and the cupboards of course) then they will have the answer. Keep the little tikes from the feed bag and their weight will remain in the prescribed range.

Well of course it is non-sensical to think that children under two are helping themselves to the fridge. No, rather it is the adults that are stuffing their kids and encouraging their over-eating. That, and that alone, is what makes kids obese. No one, not one single person, gets obese on breathing air and water. It takes calories to put on weight… period. More specifically, it takes more calories than what one burns with their metabolism in order to add weight.

So these researchers are at a loss as to the “reason for rapid weight gain in early life” and to them the reasons are ” not well understood”.

Well, it’s not really any of my business, but if I had paid for that research and gotten back that kind of rubbish I would ask for my money back.

No tags

If you needed a loan would you go to the local homeless shelter? Would you ask your next door neighbor who is one step away from foreclosure? Of course not. You don’t go to paupers to borrow money.

But if you go to this NY Post article you can see that exact thing being done by the US today.

The main point of the article (i.e. the potential that China could use our debt as a weapon) isn’t what caught my attention. I’ve written about that a number of times. Nor was it the number two lender (Japan) that caught my attention No, nothing unusual there. But what really caught my attention was the third lender in our list – the United Kingdom. How can the UK, who itself is on the ropes economically, be lending anything to anybody? I don’t believe they can, or are.

The only thing that provides a reasonable explanation of how one debtor nation (the UK) can be “lending” to another debtor nation (the US) is that the two are conducting their own “check kiting” scheme. Check kiting is writing one worthless check to make your accounts look solvent and getting to the bank it is drafted on to deposit another worthless check to cover the first worthless check. In the old days of banking, before computers, it would take long enough for checks to clear that such a scheme worked. As long as you kept getting there with another rubber check before the other one came back to be redeemed you could use the system’s money for free.

But in the case of sovereign nations there is no electronic “check cashing” so they have a much longer time before the rubber check they wrote comes home to roost. The UK obviously is writing rubber checks to buy and support the US debt while it, itself, is teetering financially. I would venture a bet that the US Fed has written rubber checks to the Bank of England as well. That, my friends, is an international check kiting scheme.

No tags

If the economic world (as we know it) were to end tomorrow are you in the least bit prepared? Well, if you are like most modern Americans the answer is an unequivicoble and resounding “no” because you are so far in debt you have no ability to prepare at all for tomorrow’s emergencies as you are too busy putting out today’s fires. How can you save for a rainy day when you are drowning now?

Well, grab a small pile of change and place it on your desk, and you will learn how to:

• Earn an immediate, guaranteed 200% return on your money absolutely risk free
• Start an emergency savings fund that could become life saving in a catastrophe – for little or no money
• Store your savings in an inflation proof investment
• Store it in a form relatively safe from thieves and government confiscation
• Pay absolutely no broker fees for either acquiring or selling the investment

Open up another browser window to the website http://www.coinflation.com/ for a quick lesson on an investment that will give you all the above. Scroll down to the “United States Circulating Coinage Intrinsic Value Table” and notice the coins are ordered bt the coin’s Metal % of Denomination (far right column). And notice which coin is at the top of the list … the penny. But not just any penny; it must be a pre-1982 penny.

Ok, I can hear the snickers now. You live in a quarter of a million dollar house, drive a forty thousand dollar car, and I’m talking about pennies? Well, if you have all those things AND a savings account then you probably already are aware of these principles but if YOU DON’T HAVE ANY SAVINGS then you have to start saving… and start NOW!

So, you are strapped and underwater. How do you save money when they are about to foreclose or turn off your power? The answer really is in that old proverb “save your pennies”. But I’m proposing you take it a step further and sort your “good pennies” from your “bad pennies”.

Have you ever heard of Gresham’s Law? It says “Bad money drives out good under legal tender laws”. We, the American people, have had our money system hijacked by “bad money” people and the only evidence of that remaining is the lowly penny. By looking through your coin pile setting on your desk you will see and feel Gresham’s Law and take the first steps to start, not only saving, but knowing and saving “good money”.

Look through and separate your coins into their respective groups (groups being pre-’82 pennies, post-’82 pennies, nickels, dimes, quarters). Now using the chart at http://www.coinflation.com/ tally up their values. See the difference now? Do you see the “good money” and the “bad money”?

So the bottom line, if you are strapped, is to at least save the BEST money you can if you are only able to save a little. At least, in a catastrophe, the good money will retain its value. But speaking of future value in a catastrophe consider this about the pre-1982 penny. If you notice in the chart the penny was produced from 1909 to 1982. That is a long time. It outlasted the production of gold and silver coins but during that entire time, in an era when people more clearly understood the difference between “bad money” and “good money” the lowly penny traded on par with gold and silver coins. What I am saying is that during that entire time you could always exchange 100 pennies for one silver dollar coin. The value of the various metal coins are all relative to each other. Yes, they vary through history, but there is indeed a relationship.

You can purchase silver coins today, minted by the US Mint, for approximately $20 in Federal Reserve Notes. You will have to pay insurance and shipping charges to get them to you. Or, you can go to a bank, supermarket, department store etc and ask them for a few rolls of pennies. When you cash your check ask for $20 in pennies.

From $20 worth of pennies you can expect to harvest 15% pre-82. That would be $3.00 nominal value. Now, according to the chart they have a “melt” or true value of $6.00 (you just double your money absolutely risk free). There is also a premium on coins and they are always worth more than their melt value so it never pays to melt them. Just trade them for fiat (if the need arises) with someone that understands the difference (a coin dealer or scrap metal dealer).

But when we consider the potential catastrophe insurance the lowly penny could provide it starts to get really interesting. The intrinsic value of real copper pennies has throughout history maintained a ratio with silver. While you can acquire one dollar silver for 20 “dollars (FRNs)” you can acquire one dollar copper for one FRN.

If it all collapses, and there is “no money” the lowly penny will become the coin of everyday commerce, not silver or gold. While writing this I tried to find a list of prices during the depression to compare to today and, well, they are hard to find. But I did find the Barter Theater was an interesting way to compare prices then (and how business was conducted without money). Apart from the fact they would take local produce in exchange for a ticket they charged 40 cents. You can visit their site today and see they charge close to $40 so their ratio of today to the depression era is 100 to 1. With that sort of ratio one could expect to buy a loaf f bread for a penny, a bag of groceries for 30 pennies etc. You see how potentially valuable they could become in a catastrophe.

In ending, saving pennies also includes a “redemtion” embarrassment factor that helps one not cash them in to pay the electric or buy groceries. When you are behind, but want to pay, it is easy to give in and redeem the savings to stay current. Saving pennies provides a little embarrassment to help keep you saving them. And, their potential return (in a catastrophe) is among the highest of any potential place to place your savings. The worst place to store your pennies, obviously, is in a bank’s savings or checking account. They will take your “good money” and return paper when you go to take it out. Anyone know the melt value of paper?

No tags

I like most of what Peter Schiff says. I think he is extremely accurate when he talks about the causes of our current woes. Where I differ with him though, is in his proposed cures. I’ve listened to him quite a alot and, even though it is difficult to nail him down, I believe it is safe to say he is in favor of maintaining the current Federal Reserve system and is favor of just managing it better (with “better” deing defined as – in his and his investor’s favor- I assume).

Having now inserted my Peter Schiff disclaimer, I’ll say he did do an excellent job with this YouTube Video about the recent pay bonuses to Fannie and Freddie executives. I want to elaborate on his points from something I noticed about the connection between real estate prices and the availability of mortgage money.

Fannie and Freddie were always “quasi” governement agencies even though they were private corporations. But until this recent real estate bubble, the “business model” of Fannie and Freddie affected a relatively small portion of the market. That market share that the business model affected grew dramatically, however, when the private sector took it, re-packaged it, and greatly expanded it to a huge part of the real estate market and made it the single largest cause of the real estate price spike.

What is this “business model” I am referring to? It is the one where a bank is willing to issue a mortgage to someone with little money down. That was originally the sole domain of the Fannie, Freddie, and VA group but then things such as “private mortgage insurance’, ‘mortgage backed securities’,'derivatives’,'teaserrates’,'ARMs’ etc entered the market. What all these new methods did was to increase the amount of money available for mortgages and as we all know, prices are determined by supply and demand. Increasing the supply of mortgage money increased the demand and boosted prices. As prices rose, mortgages became more secure (more equity backing them).

The bottom line on all this is that the price of real estate is, for all intent and purposes, 100% dependent upon mortgage availability. When the availability of private mortgage money stopped then prices dropped drastically. The government stepped in keeping Fannie and Freddie afloat with infusions of billions. Without those infusions “The Last of the Mortgage Lenders” could be the title to a follow up of the movie “The Last of the Mohicans” but would probably have to be even bloodier.

What I am getting to here is a point related to what Peter Schiff is discussing… where is this all going to end? In his video, around the 8 minute mark, he states a cause for the private sector’s lack of desire to write real estate loans as tied to real estate “prices are still too high”. I think that is off the mark and the more accurate reason they are unwilling to lend is that real estate prices are falling. When prices are falling, the risk of the loan keeps getting higher. In other words, a downward trend in real estate prices fuels a downward trend in real estate prices.

So when does it end? In my opinion, it ends at “cash”. The only true measure of the worth of a property is what someone would pay for it without any undue influence on them. Unreasonably cheap or easy to get mortgages are an “undue influence” on buyers. Fannie Mae and Freddie mac are still trying to exert undue influence on the buyers in an effort to prop up prices. Private mortgage money is gone from the picture until prices turn around. The end of the downward spiral is “cash”. We are at that point in a large part of the condo market. It just needs to filter over to residential and commercial and then… its over and we have reached “the bottom” (or the beginning depending on your perspective).

No tags