A Deafening Silence

With recent events across North Africa and the Middle east, Western Governments were quick to comment on "the rights of democracy" and "the call of the people for freedom" in Tunisia, Egypt and Libya in particular. Cameron's recent speech stated that "the UK would no longer support authoritarian Arab regimes in pursuit of regional stability." which was ill thought out to say the least, especially when there were rumblings of protest in Saudi Arabia and Bahrain.

Surely someone within the UK Government could see the approaching trap?

If Cameron expressed an opinion such as this, then this would apply to all States within the Middle East? If the people of Saudi Arabia and Bahrain decided they wanted freedom and change, then the ruling families must allow peaceful protests to take place? After all, according to Amnesty International it is a breach of International Law NOT to allow peaceful protests?

Apparently not.

There has been a deafening silence from both the US and UK Governments with Hillary Clinton insisting that there should be "talks" and the violence and unrest should stop. This blogger has yet to hear Obama make any kind of statement directly associated with these protests in Bahrain and Saudi Arabia. So why?

This change of tack is not coincidental. The US Administration knows that it is obligated to keep it's nose out of Saudi affairs. In 1943, President Franklin Roosevelt made Saudi Arabia eligible for Lend-Lease assistance by declaring the defense of Saudi Arabia of vital interest to the U.S. In 1945, King Abdel Aziz and President Roosevelt cemented the tacit oil-for-security relationship when they met aboard the USS Quincy in the Suez Canal.

Unfortunately for the people of Saudi Arabia and Bahrain, the US is in no rush to oust the ruling families. This may be conjecture, but there's no rush by the US to implement a no-fly zone unilaterally unlike Iraq, because the US Administration, unlike the UK Government can see the impending trap.

The message from Cameron and Obama, has always been to denounce the violence and support democracy and freedom. That is why we are in Afghanistan, and Iraq isn't it?

Listen closely in the near future to whether we hear that message extend to Saudi Arabia, Kuwait and Bahrain. I'll wager we don't!

"No-Fly's" on Gaddafi.

Would it be possible to create a "no-fly" zone over Libya?

Unfortunately at the moment, it would be virtually impossible. The first job when creating a no-fly zone is to take out any anti-aircraft batteries. You can't have US or NATO planes flying with those still operational, and that will take a lot of planes. I Have noticed various bloggers commenting on technology to take these out from a distance, possibly off the coast of Libya, however in order to secure the entire country, and make the no-fly zone safe, they would all have to be taken out.

The problem is, many of these mobile AA units are in civilian hands, so there's the risk of killing the protestors which would be internationally unacceptable. No country, without at least a UN sanction for military action, would condone killing protesters in order to secure a no-fly zone. There would have to be a ceasefire first and the hope that the civilians relinquish those guns so they can be destroyed. There can't be any left operational in case they get back into the hands of Gaddafi's forces to be used against NATO or US planes. It's doubtful any protester would give up these arms because if they do, then there is no resistance to Gaddafi's military.

It has to be remembered as well that perhaps the uprising civilians don't want help and may see it as an excuse for more Imperialism by the West. Iran has certainly made noises along those lines.

Cameron needs to calm down the rhetoric. After Hague announcing that Ghaddafi was en-route to Venezuela, these knee-jerk responses are making our Government look incompetent. Even the US is cautious about no-fly zones and is distancing itself from the UK announcement.

There's no quick fix here. We need to get humanitarian help to those trying to flee, and get back to the UN to increase the pressure on Ghaddafi to go. Other than that, the International Criminal Court needs to examine if he has committed war-crimes or crimes against humanity and arrest him by force if there's grounds to do so.

There is a possibility that NATO might actually be patient here, at least until after March 11th, because if a no-fly zone is in Libya, then it will be expected in Saudi if events are similar and that can't happen because of the US military involvement. After all, we support all democracy don't we? If the Saudi people rise-up for freedoms, democracy, and change then we'd support them too...

Wouldn't we?

It appears not. Reports suggest that Faisal Ahmed Abdul-Ahadwas who was calling for a day of unrest on March 11th via facebook has been murdered. However, this has not been reported on any mainstream media only the independent press. It seems we support those poor oppressed citizens of Libya, Tunisia, Egypt, Yemen, Oman, etc but not those in Saudi Arabia.

This puts the West in a very difficult position because if there were to be unrest in Saudi, where would they stand? They have already made it clear that if the people want democracy and are prepared to die for it, then they must be supported. But there are so many reasons why we cannot support it in Saudi, the first and foremost is oil, and the second is because the US has such a military involvement. Where would the US stand if Saudi turns it's (UK/US) made) guns on it's own people like Ghaddafi?

We have already seen a Western media blackout on the transportation of Saudi tanks into Bahrain to "assist" the Bahraini Government. If there was a contagion from Bahrain to Saudi, we have a serious problem on our hands, and not just because of the disruption to the oil supply, but also politically.

It's no secret that US corporations made huge in-roads into Saudi in the 1970's ("Confessions Of An Economic Hitman" - John Perkins) via The U.S.-Saudi Arabian Business Council. So the US depends on Saudi for it's economy as well as it's oil.

This is escalating fast, hence I have recently increased the warning on my website to "critical". TroubledTimes.co.uk If March 11th passes without incident, I will drop it down again, but until then, be vigilant, and don't listen to people that haven't taken the time to actually read what's going on. A recent post I made on this subject at a forum board sent one respondent into a tirade of "what is the answer then?" and another into comments about the capabilities of Libyan Anti-Aircraft Guns. If they are being manned by civilians, and they will be a threat to US/NATO planes, a No-Fly Zone CANNOT be implemented.

But what if....

... it was beyond or cognitive capacity?

We believe in science, we believe in a rational explanation when confronted by a problem. But perhaps there really is a whole branch of science that we have absolutely no capacity to understand.

I run the risk of sounding like a hippy here, but I'll run that risk for the sake of exploration of thought. I am not alone in thinking that there may be something that affects our lives in many ways, but we have no knowledge or capacity to understand.

I'll be brief, but imagine trying to explain a simple crystal radio set to someone in 1AD? Even the most intelligent of people of the day would not be able to understand, regardless of how well we explained it. But, these days, it's not unreasonable to assume that the average person, with a few text books and a good teacher could understand the principle of a crystal radio set. So we have become more intelligent.

Now let's skip forward a couple of millennia.

Could we assume that the average person in a few thousand years time could understand some scientific advances, but we could have no possible comprehension of today. So, if that's a possibility, perhaps there is lots more to investigate, but because we "feel" intelligent and advanced, we immediately dismiss them as fantasy. Would the same be said for our crystal radio set in 1AD? Wpould people then have dismissed it as pure fantasy?

The point of this post is, that we've been seeing some serious global fluctuations recently. Floods, earthquakes, volcano eruptions, cyclones and hurricanes, food shortages... and don;t start me on the economy!

So is this a sign? Could it be possible that we are being sent warnings by a branch of science that we have no comprehension of? Are the religious texts correct, but we just cannot understand them?

I understand you will be thinking... all those things have been happening for thousands of years, it's because we're seeing them on a 24/7 news channel. I get that, and I don't dismiss it... but what if?

Only time will tell.

Playing Footsie !

It isn't difficult...

... to understand how it works, but to just reiterate what happened before the 2008 crash, it was built on the assumption that imaginary money has a real value.

THE MYTH: As stock markets and commodities increase, so the wealth of the country increases.

Even after all what we've gone through, that myth still prevails. I see politicians and pundits gauging what the economy will be like in the future by the value of stocks, commodities and in particular the Footsie (FTSE) index. They watch the Footsie climb, along with others like the CAC, DAX, DOW, NIKKEI etc and it gives the false impression that the global ecomony is healthy, but this is absolute nonsense.

Inflation.

If inflation is nominal, say at 2% and the FTSE rises then that is a reasonable assumption, using the financial paradigm we are in, that the economy is fairly healthy. It still doesn't show actual value because it is creating imaginary money on paper.

If inflation is running at 5% and the FTSE climbs 10% then in real terms, it has only risen 5% because inflation has to be countered. For example in very simplistic terms for ease of explanation:

Company A on Jan 1st is worth £1,000,000, over the course of a year it turns a profit of £50,000. It's shares rise from £1.00 on Jan 1st to £1.05 on Dec 31st of the same year. It's share price on the FTSE index has risen, and along with all other companies making a 5% profit in a year, the FTSE rises 5%.

This company on paper has made a perceived profit of 5%. The shareholders are happy as they're savings are only getting 1% in the bank, so a 5% increase is quite adequate.

However, inflation is running at 5% per year. The value of £100,000 on Jan 31st falls in real terms (spending power) by 5%, so on December 31st, it's actually only worth £95,000. Prices throughout the year have risen 5% which means you can buy 5% less of goods and services. On Jan 1st you could buy 100 loaves of bread at £1 each with £100, now you can only get 95.

This is inflation.

So getting back to our "successful" company, it is actually worth exactly the same despite it's balance sheet showing a profit and it's share price on a steady increase.

This is why we MUST NOT put weight on the FTSE as an indicator of the health of an economy. It's really amateurish and to see politicians doing this is quite appalling and unnerving. It would be easy to assume that they are knowledgable about these things but in fact they aren't. Economics are a complete mystery to them, but they listen to financiers and advisors, and look at the FTSE index as a yardstick.

Realise yourself, that an increase in the FTSE index in times of high inflation is not good. If inflation increases very soon in 2011 (and it will), then expect the FTSE to go up and everyone to assume we are in recovery. We aren't. If inflation is at 5%, we would need a FTSE increase of 20% to counter inflation.

Inflation is a killer, be very careful where you put your savings.


As a footnote, it is well known that inflation is a wonderful "Stealth Tax" by Government. It decreases citizens spending power (remember the bread example above?) and lessens debt. If you have inflation at 5% per year and owe a friend £100, within 14 years the debt is change you would find down the back of a sofa because of inflation.

Governments increase inflation so they pay out less to their debtors who hold their bonds when they mature.

Apocalypse ...er... soon!

EDIT: This post was first created in December 2010, prior to the revolutions that have occurred in Tunisia and Egypt. Societal collapse can occur within days as is sadly being borne out in these countries. It would be prudent therefore to always be prepared for collapse, and the only reason there is likely to be stability in these countries os because the outside world is still in one piece. If economic collapse occurred for example, the whole globe would be dragged in with no hope of recovery because no-one on the poutside would be able to help due to their own problems.

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As human beings, especially as human beings in a society that is used to answers because of the wealth of information at our fingertips, we find it very difficult to accept when perhaps there is no direct answer.

We tend to scoff at opinions which are open-ended so to speak; opinions that can have do black and white answer. Do aliens exist? Will oil run out? Apocalypse now?

We are accustomed to asking a question of Google, and Google provides a definitive answer. But there are some questions that Google cannot answer definitively, and yet we know by probability alone what the answer must be. Take the questions above as an example.

Economic collapse?
An economic collapse although not destructive to the human population as a pandemic, would cause just as much damage and is capable of bringing complete collapse within a few hours. Alistair Darling who was the UK Chancellor of the Exchequer during the financial crisis of 2008 is quoted as saying that the global financial system was just three hours from meltdown. No banking system, no commerce, no money, no economy. A computer system with everyone's storage of wealth inside is absolutely worthless, only those with a storage of wealth to hand could possibly help in a collapse of society. Paper money has no value unless a government or economic system says it has. This is the most difficult thing for people to understand because they trust money implicitly. Over decades, paper, fiat money has been used to buy whatever we need, so it's natural to see a banknote as value.
The best way to explain this, is to imagine you live in the UK and find an Indian 500 Rupee banknote in the street. What is it's worth? The initial feeling you get when you see it lying there is excitement because you can see it's real, and you know that it has value, but then the realisation set's in that actually, it has no value to you at all. You cannot go and buy anything with it because no one will accpet it here. The best thing you could do is take it to a bank and get it converted to your own currency. But then how much is a 500 Rupee note worth? Will you get the bus fare to the bank back if you cash it in? For all you know, it may only be worth 10 pence!

So it's easy to understand the value of paper money in context and the same is true for many things in that regard. One more example is also easy to understand. Whilst visiting a theme park that uses a "token" system to use the attractions, you buy several tokens at £3.00 each and enjoy your day out. Three days later, you find a token from the theme park in your pocket. It has a date on it which says it expires in a months time, and you know you will never go back that soon, so what do you do with it?
You throw it away, because it has no value. However on the day when you were at the park, it had a value of £3.00, but now it's worthless.

Storage of value
This is the way paper money works in a post-collapsed society. Be warned and store your money as "wealth" in a good storage of value. this can be gold, silver, food even coal, anything that you know will be valuable in a post-collapsed society. The only thing you need to be careful of is that the storage can withstand time. Food is great in initial collapse, but it will soon go rotten and be worthless, whereas bags of coal will last another million years... well it has already done so hasn't it!

Will oil run out? I get asked this a lot because of my opinions on the subject, and the simple and truthful answer is no, it will never "run out", but add a caveat to say that for how we use it in our current paradigm, then yes, it will become a resource that won't be available at some point. There will always be oil under the ground, but it will run out in the sense that we won't be using it to power our lives in the same way as we do today.

To think slightly differently, even if the whole planet was hollow, at some point, like a huge fuel tank, it will run dry. That's an example that anyone can understand.

Apocalypse now? This is the purpose of this post today. I spoke to a good friend, who is not stupid by a long shot, but he laughed at my usual rhetoric of a collapse in society. I'm not one to dictate, so the conversation stopped there. I never convince people, it's usually futile so I don't bother, but let's look at an apocalypse, what do we mean?

A biblical apocalypse would be similar to the flooding like Noah's ark, or a flu-like disease that pretty much decimates the human population.

A societal collapse can be from a breakdown in government or an economic collapse.

Both of these scenarios appear very unlikely and there's a simple reason for people to think like this. We are complacent.

As human beings, we enjoy a continued lifestyle with no upsets.

The "value" of money.

Firstly, my apologies for the long gap between posts. Work prevailed I'm afraid, but as we begin a new year, I thought I'd look at an issue that just seems to be beyond the understanding of most people.

The value of money.

Let me start with two scenarios. The point is to take this to an extreme, but I hope that it will "flick a switch" with you the reader; a kind of "Eureka" or epiphany moment.

You are dying of thirst in a desert. You know the next village with water is a day away, but you've travelled 3 days already and you won't make it without water. You will definitely die without a doubt, and you know that as fact. You also have a million dollars in a rucksack on your back.

A nomad wanders by on his camel, sees your plight and offers you a bottle of water which you know will get you to the village and survival... but at a cost. Yes, one million dollars!

What would you do? How much is that million dollars of paper worth now?

It's worth a bottle of water. That's all.

Another scenario about "paper", be it money or otherwise.

You walk to a shop to buy a newspaper. The newspaper has a value of one dollar. You are willing to pay that one dollar because you want the newspaper.

You buy the newspaper and walk out of the shop. What is the value of the newspaper now? If you stopped 100 people in the street, how many would give you one dollar for the newspaper?

The answer is, that if you found someone on the way to the shop to buy a newspaper, you *might* get your dollar back, however this is highly unlikely. You may get 10 0r 20 cents if you were lucky because people don't like picking up, holding, using old newspapers.
Let's step forward one day. How much is your newspaper worth now?

The answer is nothing. It has no value in dollar terms anymore.

So you see that an article has a value but to state that value in monetary terms is the wrong way to value it. Some may say this is a capitalist paradigm that we have all been hoodwinked into using, and there may be an element of truth in that. However, we have to look at commodities differently now, and value them for what they are actually worth to us as individuals and not in monetary terms.

This blog is about a potential collapse of the "system" as we know it today. It's already crumbling due to the economic crisis, but we can negate most of this by thinking very differently. I am a member of a forum which is supposed to be full of forward thinking people. These people are supposedly very understanding of the issues we may face in the near future, especially peak oil. However a recent post of mine revealed the true misunderstanding that even these people just don't get.

I asked a question regarding electric heating as opposed to oil based heating which I have in my home. The premise is, that if oil becomes scarce, I will need an alternative to keep my house warm. Post after post reveals the comparison with money.

Electric Radiators Forum Post by Troubled Times.

"It will be more expensive", "The costs will be high" etc etc. This misunderstanding is quite frightening because these are people I thought were thinking differently, however they are still comparing the value of something with a fiat, paper based monetary system.

There is also the possibility that my oil boiler will fail. This is very likely within the next 10 years and will be an expensive item to replace, if there are still engineers to do the work. They could be as rare as thatchers are today, but what was a boom industry 100 years ago. And when my boiler does go wrong, do I replace it anyway, or will that be the point at which to convert to electric heating?

If you are freezing in your home because oil is just not available, then what would you do? You have lots of money, in fact you could probably buy BP even with all their troubles, but the oil that fires your heating system is just not there.

However, the electric radiators your neighbour installed before oil was unavailable, are still going strong because electricity has managed to continue to be generated, thanks mostly to the renewables program encouraged in the previous 5 years by the Government. He has also installed a wind turbine in the back garden which he told you was £12,000 and you laughed and laughed at his stupidity, because at the time, £12,000 would have filled up your oil tank for the next 10 years!

But you look out of your window and his turbine is spinning, and he has one warm room in the house. He knows that the turbine may at some point fail, but for the time being, the £12,000 he spent seems very worthwhile. You on the otherhand have £12,000 in paper money that you saved under the mattress. You could burn it to keep warm, but then you'd probably be better off trying to build a wind turbine. You'd like to buy one, but unfortunately because of demand and inflation, they are now almost £100,000 in paper money, and you just don't have it.

So the point of this new post in a new year is to see the true value of your paper money, and to remember that what it buys today, it won't buy on systemic breakdown and to think on a different level to even the most forward of thinkers.

As for me, I shall be buying my electric radiators and storing them in my garage until they are needed. If (and its a big if) oil becomes scarce or prohibitively expensive in paper money compared to electricity, then I shall pull them out and plug them in to keep warm. The true value of money is not what it can buy today, but what it can buy if everything changes. Think differently to everyone else.

Good luck and have a peaceful new year.

As a footnote, it must be stressed that the radiators I am looking to fit are not the same as the portable, heavy cast-iron types you can buy very cheaply. These are made of aluminium with full climatic control and 98% efficient. They are commonly used in eco-homes and can be carbon neutral if connected to a renewable energy source which I intend to do.