Many are familiar with the Internet’s dark side, the spammers, the viruses and the sites you dare not visit while the boss is looking. Of course, as the Internet made this amazing shift from a nerd’s toy into the engine of commerce that it now is, those with malevolent motives wrote their exploits trying to earn a quick dollar or their fifteen minutes of fame.

We, as Internet users all had to make adjustments in order to protect ourselves from harmful things, such as web browser exploits, viruses, trojan horses, but as we made such preparations something happened: We didn’t stop with just protecting ourselves from the real threats, we also protect ourselves now from the inconveniences, such as Spam and Advertising.

I know what you are thinking by now, “Is he crazy? Does he really think I need Spam?” The short answer is No, however; something happened on the way to a Spam-free Internet. Congress got involved and, as many of you know, the opposite of Progress is Congress.

The Can Spam act of 2003, which took effect on January 1, 2004 effectively told Spam operators that they no longer could use their United States-based server farms to send out billions of unwanted messages to the unsuspecting. Now, normally, you would think this to be a good thing, however; congress unwittingly assisted Spammers in building even more cost effective business structures for their sub-prime, anyone is approved mortgages, their ‘enhancement’ products and other wares.

In 2003, a spammer likely warehoused emails and servers in their own compound. The server’s sole job was to keep sending you all those emails you did not want. In 2004, all of that changed. The Spammers had to shut down their server farms, which they likely were paying tens if not hundreds of thousands per month to maintain. Not surprisingly, this presented a short-term problem for Spammers, however; they did what anyone does in times of need – they improvised.

Spammers, realizing they no longer could house their servers here had to find new ways to deliver their messages, ways that would not be traced back to them. At the same time, in Eastern Europe, Russia and Asia, economies were beginning to get their first taste of Capitalism. Most enterprising spammers then approached computer programmers, nerds and hackers in these countries asking them to write the first of the Spam viruses.

These newly acquired spam viruses would compromize individual computer users’ systems in order to harvest the addresses in their inbox and check elsewhere on the Internet for instructions on what emails to send. Now spams were coming from everywhere, not just the server farms of old which were easy to block.

This was still an easy fix, all you needed to do was hit reply when you got a spam from a friend and say, “You need to run a virus scan.” Unfortunately, however; the Spammers quickly found their way around this too. They began mixing and matching addresses in order to make sure the person who appears to have sent the message didn’t. This new practice of forging message headers made it extremely difficult to find whose computer was sending the Spammers’ messages.

Of course, all this new innovation means new protections were needed. Companies began building all kinds of Spam killing solutions. For example, users of Outlook and Windows Mail know there is a Junk Mail folder. These work by looking at the message and sorting it if it looks like Spam. This is, in my opinion the best way as it allows the user to see messages that were flagged as Spam in order to make sure no legitimate emails got flagged.

In a perfect world, this would be where things stopped … we would have reached the solution by allowing the end users to decide what they get or do not get. Unfortunately, we did not stop there.

Most Internet Service Providers and larger companies realized that Spam was using their bandwidth as it routed its way through the Internet toward its final destination on the end user’s PC. Many companies came along and began building mysterious black boxes or pieces of software that would blacklist suspected spammers and then prevent the messages from reaching the end user. Most end users were none the wiser as their ISP would then decide what pieces of mail to deliver and which to discard.

Now, this probably still sounds good to some of you, however; what if your postman decided that you were getting too much mail and began sorting it for you, throwing away things he or she didn’t think you’d want? Chances are, you’d probably begin losing bits of mail that you really did need, maybe the cable bill or the electric bill if the envelope were too brightly colored or looked like a spam mail. The problem here is simply that someone else is making that decision for you, however; if they get the decision wrong, you must live with the consequences.

Recently, this has happened to me. My domain, where I manage my own server has been blacklisted by a company called Barracuda Networks (www.barracuda.com). Let me show you what comes back in the mail when I send something to someone who uses a Barracuda firewall with email filtering:

user@domain.com
SMTP error from remote mail server after end of data:
host mail.domain.com [127.0.0.1]: 554 Service unavailable; Client host [mailserver.hostingcompany.com] blocked using Barracuda Reputation; http://bbl.barracudacentral.com/q.cgi?ip=127.0.0.1

(I have changed the IP address, emails and domains here in order to protect the innocent)

The end result is that my legitimate email, containing photos the recipient had requested will not reach their destination because someone in between decided what was best for the user.

Barracuda insists it cares and will review the situation, however; they seldom remove you from the blacklist once you are on it. After all, they get money from ISPs and companies for making sure your email never arrives.

This, unfortunately, is quickly becoming another form of censorship thereby preventing some from sharing legitimite communications, all in the guise of keeping Spam away. Of course, you can use EmailReg for a fee of $20 per domain name in order not to be blacklisted, however; this just means companies like Barracuda are charging ransom for legitimate communications. Consider this article which further analyzes the situation: The Email Protection Racket.

At this point, I am losing communication with my customers and friends because of such issues. If you are also in this situation, I’d be interested to know. The users need to be in control of what emails are legitimate, and until they are, good communications will be lost due to overprotective ISPs and companies who do not understand how best to protect their users.

“The control of information is something the elite always does, particularly in a despotic form of government. Information, knowledge, is power. If you can control information, you can control people.” – Tom Clancy

First, I spoke with a friend and local business owner about how I saw things in the future, those familiar with this blog know that I expect the future to hold some very inconvenient events.

Yesterday evening, I found myself at the Alpharetta Golden Coral for a meeting with the Atlanta Pet Chickens group, which has now grown to be the largest regional poultry club in the country. I became curious about what led most people to the meeting that night, many said their fears of our economic future had led them to choose chickens as pets in order to have access to low cost food staples, mainly eggs. Ironically, this too is what has led me to join and to attend the meeting last evening.

Last night, knowing I needed to be in Cartersville, I decided to get a nearby hotel room in order to get a jump start on the day. As I lay there trying to sleep, I listened to WGST in Atlanta, I heard Alex Jones on the air. Normally, I think Alex leans a bit to the tinfoil hat side, however; today I am beginning to wonder if he’s onto some things.

As I listened, one of the bumper songs caught me, and as music often does, it made me think. My friends know well that I am a very musical person, and many wonder where I find the songs and artists I do. Tonight’s selection which inspired me was performed by Jackson Browne, who often can be found on my playlist.

Jackson Browne – Lives in the Balance
I’ve been waiting for something to happen
For a week or a month or a year
With the blood in the ink of the headlines
And the sound of the crowd in my ear
You might ask what it takes to remember
When you know that you’ve seen it before
Where a government lies to a people
And a country is drifting to war

And there’s a shadow on the faces
Of the men who send the guns
To the wars that are fought in places
Where their business interest runs

On the radio talk shows and the TV
You hear one thing again and again
How the U.S.A. stands for freedom
And we come to the aid of a friend
But who are the ones that we call our friends–
These governments killing their own?
Or the people who finally can’t take any more
And they pick up a gun or a brick or a stone
There are lives in the balance
There are people under fire
There are children at the cannons
And there is blood on the wire

There’s a shadow on the faces
Of the men who fan the flames
Of the wars that are fought in places
Where we can’t even say the names

They sell us the president the same way
They sell us our clothes and our cars
They sell us every thing from youth to religion
The same time they sell us our wars
I want to know who the men in the shadows are
I want to hear somebody asking them why
They can be counted on to tell us who our enemies are
But they’re never the ones to fight or to die
And there are lives in the balance
There are people under fire
There are children at the cannons

It’s time to begin asking some questions. Here are some to ponder:

• Why are so many states beginning to enact or consider Sovreignty under Article 10 of the United States Constitution?
• Why does the Obama Stimulus bill have so many Trojan Horse government programs and restrictions?
  • Health Care Czar? Soon the U.S. Government may be able to approve or deny health care that you need, furthermore; you may be implanted with microchips in the not too distant future in order to track your medical history. (Could those chips then be used for other uses, such as the buying or selling of food and other goods, as the Bible warns regarding the Mark of the Beast from Revelation chapter 13?)
  • Gun Control? Could the Government enact new, much more strict gun regulations by hiding them in the stimulus package? Could they confiscate your guns?
• Should we be worried that, in the event of a market crash, any form of civil unrest or other disturbance could result in a federal suspension of Constitutional law? (It should be noted that declaration of martial law can be enacted by the Office of the President of the United States without risk of Congressional review for a period of 6 months.) What would happen to those who do not agree with suspension of Constitutional Law? One audio recording found here suggests FEMA is preparing detention centers and mass graves.
• Why were members of Congress threatened with the enactment of Martial Law in the event the Obama Stimulus Plan was not passed? (this video is frightening)
• Could the Federal Deficit problem lead to a collapse in markets and a declaration of martial law?

With all this being said, I am sure you will have questions of your own. If you do, let me know and also let your representatives know. We should all voice the concerns we have while we still enjoy the freedoms to do so. Just remember the words of some of our founding fathers …

“They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.”
“Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote.” – Benjamin Franklin

“I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man.” – Thomas Jefferson

“Experience teaches us to be most on our guard to protect liberty when the government’s purpose is beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.” – Louis Dembitz Brandeis

“He who would make his own liberty secure must guard even his enemy from oppression; for if he violates this duty he establishes a precedent that will reach to himself.” – Thomas Paine

If some of you still question the motives or ideals of our founding fathers and their vision of what our government should become, I highly recommend reading the Federalist Papers, which can be found online. You will quickly find the stories of our founding fathers are much different than what we heard and were told in our classrooms. Should we choose to honor their memories, we should be well advised to know their ideals well so that our homage may be paid in accuracy, knowledge and wisdom with reverence to that which is right for our country and its future.

Yore hair is like cornsilk
a-flapping in the breeze.
Softer than Blue’s
And without all them fleas.

You move like the bass,
Which excite me in May.
You ain’t got no scales
But I luv you anyway.

You’re as graceful as okry
Jist a-dancin’ in the pan.
Yo’re as fragrant as SunDrop
Right out of the can.

You have all yore teeth,
For which I am proud;
I hold my head high
When we’re in a crowd.

On special occasions,
When you shave yore armpits,
Well, I’m in hawg heaven,
I’m plumb outta my wits.

Still them fellers at work
They all want to know,
What I did to deserve
Such a purty, young doe.

Like a good roll of duct tape
Yo’re there fer yore man,
To patch up life’s troubles
And stick ‘em in the can.

Yo’re as strong as a four-wheeler
Racin’ through the mud,
Yet fragile as that sanger
Named Naomi Judd.

Yo’re as cute as a junebug
A-buzzin’ overhead.
You ain’t mean like no fire ant
Upon which I oft’ tread.

Cut from the best pattern
Like a flannel shirt of plaid,
You sparked up my life
Like a Rattletrap shed.

When you hold me real tight
Like a padded gunrack,
My life is complete;
Ain’t nuttin’ I lack.

Yore complexion, it’s perfection,
Like the best vinyl sidin’.
Despite all the years,
Yore age, it keeps hidin’.

And when you get old
Like a ’57 Chevy,
Won’t put you on blocks
And let grass grow up heavy.

Me ‘n’ you’s like a Moon Pie
With a RC cold drank,
We go together
Like a skunk goes with stank.

Some men, they buy chocolate
For Valentine’s Day;
They git it at Wal-Mart,
It’s romantic that way.

Some men git roses
On that special day
From the cooler at Kroger.
“That’s impressive,” I say.

Some men buy fine diamonds
From a flea market booth.
“Diamonds are forever,”
They explain, suave and couth.

But for this man, honey,
These will not do.
For you are too special,
You sweet thang you.

I got you a gift,
Without taste nor odor,
Better than diamonds
it’s a new trollin’ motor!

Happy Valentines Day

And labor conditions at the North Pole,
Were alleged by the union to stifle the soul.
Four reindeer had vanished, without much propriety,
Released to the wilds by the Humane Society.
And equal employment had made it quite clear,
That Santa had better not use just reindeer.
So Dancer and Donner, Comet and Cupid,
Were replaced with 4 pigs, and you know that looked stupid!

The runners had been removed from his sleigh;
The ruts were termed dangerous by the E.P.A.
And people had started to call for the cops,
When they heard sled noises on their roof-tops.
Second-hand smoke from his pipe had his workers quite frightened.
His fur trimmed red suit was called “Unenlightened.”

And to show you the strangeness of life’s ebbs and flows,
Rudolf was suing over unauthorized use of his nose,
And had gone on Geraldo, in front of the nation,
Demanding millions in over-due compensation.

So, half of the reindeer were gone; and his wife,
Who suddenly said she’d enough of this life,
Joined a self-help group, packed, and left in a whiz,
Demanding from now on her title was Ms.

And as for the gifts, why, he’d ne’er had a notion,
That making a choice could cause so much commotion.
Nothing of leather, nothing of fur,
Which meant nothing for him. And nothing for her.
Nothing that might be construed to pollute.
Nothing to aim. Nothing to shoot.
Nothing that clamored or made lots of noise.
Nothing for just girls. Or just for the boys.
Nothing that claimed to be gender specific.
Nothing that’s warlike or non-pacific.
No candy or sweets…they were bad for the tooth.

Nothing that seemed to embellish a truth.
And fairy tales, while not yet forbidden,
Were like Ken and Barbie, better off hidden.
For they raised the hackles of those psychological,
Who claimed the only good gift was one ecological.
No baseball, no football…someone could get hurt;
Besides, playing sports exposed kids to dirt.
Dolls were said to be sexist, and should be passe;
And Nintendo would rot your entire brain away.

So Santa just stood there, disheveled, perplexed;
He just could not figure out what to do next.
He tried to be merry, tried to be gay,
But you’ve got to be careful with that word today.
His sack was quite empty, limp to the ground;
Nothing fully acceptable was to be found.

Something special was needed, a gift that he might,
Give to all without angering the left or the right.
A gift that would satisfy, with no indecision,
Each group of people, every religion;
Every ethnicity, every hue,
Everyone, everywhere…even you.
So here is that gift, it’s price beyond worth…
“May you and your loved ones enjoy peace on earth.”

It should be well noted that none of these enterprising minds seem to be working on Wall Street, which we might as well call Wal-Mart Street with the current price of stocks, nor are these innovative minds members of Congress. Consider the following playlist of videos, Money as Debt, which shows the error of fractional reserve economics.

“Everything that is really great and inspiring is created by the individual who can labor in freedom.”
- Albert Einstein

One of the common occurrences in times of economic turmoil is the emergence of local barter economies. This allows trade to continue at a local level while business at state and national levels may be economically impaired. A good example of this may well be brought to us by two Milwaukee, Wisconsin suburbs as they will be meeting next Wednesday in order to set up a locally-based currency which can be used to barter and buy goods from local businesses.

Such barter economies tend to protect local groups of people from enduring the full extent of economic hardship related to economic downturns. This, of course, assumes that the goods needed by that barter economy can be locally produced.

With local production of needs in mind within the barter economy, in order to improve odds of success during large scale economic collapse or in the face of a rapid inflation of the dollar and other world currencies which I predict will happen so that banks can cover their deposits and governments can pay debts, a local barter economy must do two main things: Produce what it needs locally and Place the value of its currency, in the event that a local barter economy creates a local currency, in something tangible, such as gold, silver or commodities required for life. The act of local production ensures prosperity in times when shipping channels are inoperable and tying of their barter or local currency to real-world commodities helps hedge against inflation or hyper inflation of currencies, such as the Dollar which are not pegged properly to commodities and precious metals.

With all of this in mind, and in preparation for the possibility and, ever increasing likelihood of economic hardship, readers in their local communities may well wish to form neighborhood barter associations and watch groups to improve their probabilities of survival in an economic collapse. Furthermore, individuals undertaking such actions should pay keen attention to the abilities of themselves and other group members to supply needed skills and goods in the event of monetary collapse or the unavailability of shipped goods and commercially-bought services.

Certainly, I do hope that such preparations are never actually needed, if they are, one should be as prepared as possible in order to implement such an economy in short order for the protection and benefit of neighbors and friends. Similarly, if such times get tight, a network of barter economies may well be in order such that one barter economy can provide goods or services to another which lacks the ability in order to do so itself. Such basic arrangements will prove most helpful in the event of a severe economic downturn.

History shows us that many communities turned to farming and barter during the Great Depression. Should such a collapse happen again, it would be wise to be prepared. Some thoughts to consider include the following:

• In an economic collapse, energy may be hard to come by, therefore:
  • Electricity may become unreliable; you may wish to invest in solar cells to supplement energy use, or to look at natural methods of heating as well as non-electric means of baking, opening cans, etc.
  • Natural Gas and Water may also become unreliable, therefore someone if someone in your area has a well, make sure there is enough capacity for the group and be prepared to drill additional wells if needed.
  • Implementing grey water systems may also be in order so that you have water available for crops, plants and secondary uses.
  • Gas and Diesel will become difficult or impossible to find, be prepared to have alternate transportation methods at hand (bicycle, horse, etc.)
• Food and goods also become hard to find in a depression, therefore:
  • Make sure you have spare items of anything you will likely either need or need to replace.
  • Owning some land is a good idea, furthermore; make sure you have crop seeds in hand before the downturn hits, otherwise, the feed and seed stores may be sold out.
  • For goods that you commonly need, or commonly replace, be sure you have a local source of production or a barter arrangement with someone who does produce such things.
• When local governments, state governments and the federal government become bankrupt, they may no longer be able to offer effective protections of right to property and life, therefore; the ability to defend oneself becomes necessary.

While these may seem like extreme steps to take, in the event of another Great Depression, the persons having made such provisions will be well prepared to deal with the situation at hand. I certainly hope such preparations are not needed, however; If our economy does fail, don’t count on anyone else, including government, to make these provisions for you.

I fear, given our current status of economic decline, time for preparations will be limited. Talk to your friends and family, share what you know to be true, face the fears and prepare for what may come. Many will say that my tinfoil hat has slipped off, but to them, I respond with the words of General David M. Shoup:

The day before Thanksgiving, on November 26th, I warned FallenRepublic’s readers about the dangers of Credit Default Swaps. This, unfortunately, seems only to be the tip of the iceberg. There are many more items out there, with financial dollar amounts making the CDS catastrophe seem small as a mouse in a warehouse. For those who have not read my previous commentary on the dangerous nature of Credit Default Swaps, here is a most useful video explaining the problem and quantifying the CDS portion thereof.

Now, this is not the only problem. As I stated before, CDS were only the tip of the iceberg, tipping in at a whopping $50-60 trillion dollars. You normally would not look at $60,000,000,000,000.00 and find it to be a trivial figure, however; you have not yet seen how large the problem actually is. In the following article, I wish to describe the issues directly facing us financially which do explain Washington, D.C.’s haste to prevent bank failures.

First, let us look at risk. Initially we saw risk begin to blow up the CDS market when roughly 6% of the mortgages in the US began to falter. CDS were no more than a repackaged insurance instrument, as the above video states, however; calling them Swaps instead of Insurance allowed the banks to bypass insurance regulations and therefore, not to have funds on hand to pay these Swaps in the event of mortgage failure.

That was just the mortgages. That bubble has now burst. People struggling to pay for expenses, including their homes, do not have surplus money for large ticket items. You can see this in the trends where fancy stores are seeing sales decline while Wal Mart and other discount stores are posting larger sales. The reason is simple – People are trying to save what little money they have, and when they do purchase, they do so at the largest discount(s) that can be found.

As people save money and struggle to pay their debts, sellers of large ticket items, like cars, are being financially obliterated. This, of course, has led to the domestic auto makers begging Congress for any fiscal crumbs which may fall from the bailout tables. Auto makers are not alone here, many companies are announcing layoffs, AT&T alone will lay off 4% of its workforce – some 12,000 people soon.

Here is the rub: People being laid off cannot pay mortgages they already have trouble affording. As a result, the process will begin to accelerate, in spite of the now $7.6 trillion dollars in bailouts.

The bailout of the banks did not work in the 1930′s, what makes us think it will work now? Let us consider some numbers in order to properly understand the $7,600,000,000,000.00 in bailouts which have been promised and/or supplied. Let us adjust some historical numbers for inflation and commence to adding them up. You see, the current $7.6 trillion bailout is larger than:

The Marshall Plan ($115,300,000,000.00)
The Louisiana Purchase ($217,000,000,000.00)
The Moon Race ($237,000,000,000.00)
The Savings & Loan Crisis ($256,000,000,000.00)
The Korean War ($454,000,000,000.00)
The New Deal ($500,000,000,000.00)
The Iraq War ($597,000,000,000.00)
The Vietnam War ($698,000,000,000.00)
NASA’s budget history ($851,200,000,000.00) and
World War II ($3,600,000,000,000.00)
COMBINED! ($7,525,500,000,000.00)

The bailout has cost so far: $7,600,000,000,000.00, or 74,500,000,000 more than all of the above programs combined.

So you see, we have spent enormous sums of money on this problem and still have not found a solution. Credit markets are still frozen, sales, production and job creation have all stagnated or declined in spite of the monies spent on this issue. The stock market is stagnated around the 8,300 point level – for now.

The next question becomes what will be the next shoe to drop?

I believe the answer to this lies in the health of emerging economies. You see, emerging economies are cash hungry, frequently borrow to finance expansion and infrastructure development, yet they still are very fragile in turbulent economic times. This tells us that there will be economic failures in places like Argentina, Ecuador and other places where economies are young, inexperienced and ill-equipped to handle the slowdown.

First, let’s consider Ecuador. On November 15th Ecuador, who uses the US Dollar as their currency, missed a loan interest payment on the government’s $4,000,000,000.00 debt. On December 15th, they must pay the interest payment from November plus the interest payment from December, otherwise they are in default.

Argentina also has a large debt which was refinanced following a deflationary spiral which occurred from 1995 through 2001. Given the current state of the world economy, Argentina may well be at risk to default once more.

This raises an interesting question: Since emerging economies owe so much, someone must be lending to them. With this in mind, the question becomes, Who is most vulnerable to defaults in emerging markets? A newsletter article produced by Money and Markets suggests that Europe will take this fall as they have lent far more to emerging economies than the US and Japan combined. I predict this means the US dollar and Japanese Yen will perform better than the Euro for the coming months. I furthermore predict that this puts more EU banks in perilous risk of failure. As early as 2003, the IMF was warned by one of their own about the risks of emerging markets.

In order to explain how this risk of default is most devastating, remember the video above, which shows that bankers bought Credit Default Swaps as insurance mainly for the riskiest of investments. Credit Default Swaps are a class of unregulated, privately traded commodities known as Derivatives. A Derivative is basically nothing more than a bet on something happening or not happening. There are numerous kinds of Derivatives and such bets have even been made on such silly outcomes as whether or not the weather will be nice on the day of an event, presumably in order to recoup event costs in the event of bad weather.

So, just how big is the Derivative bubble? (now if you are reading this, please strap yourself to your seat so you do not fall down when you faint)

Currently, the most recent numbers on the size of the Derivative bubble were provided in 2007 by D.K. Matai, Chairman of the ACTA Open at the staggering sum of $1,144,000,000,000,000.00 (1.144 quadrillion dollars). This is $190,000 for every man, woman and child on Earth. Additionally, by comparison, if you wanted to time 1.144 quadrillion seconds, it would take you 36,251,172 years and 168 days in order to do so.

Remember, Derivatives are bets made on a condition, generally through a financial contract where the condition is known as the “underlying”. Such bets often are placed based on rational assumption, steady growth curves and the status quo. Events, such as the current economic downturn are frequently unforseen in derivatives purchased before the event and exasperated by derivatives purchased after the event, which bet on the downturn to continue. Derivatives can get quite confusing, however; I would like to provide the following audio interview of author Ellen Hodgson Brown, J.D. whose book, “The Web of Debt” explains the issues well.

Just like the Credit Default Swap market, a receding economy will also wipe out the Derivatives market, probably claiming the $548 trillion Credit Derivative market as its first victim, post CDS crash. Unfortunately, the main media ignores these issues, however; they most likely do so because of misunderstanding or the fear of creating a panic.

Considering what we now know and the scope of the problem, one must be prepared to survive. Such times will be at the very least, unpredictable. My advice here will simply be, don’t be in a city, have access to arable land where you can grow your own food, and be ready to protect yourself in the event that a bankrupted state or federal government cannot.

It seems we are indeed headed for interesting times. If you have questions, comments or suggestions, I welcome you to talk back using the comment button below, or you can email me at nero@fallenrepublic.com.

“The question is: how bad do things have to get before you will do something about it? Where is your line in the sand? If you don’t enforce the Constitutional limitations on your government very soon, you are likely to find out what World War III will be like.” – Michael Badnarik (Libertarian candidate for President, 2004)

All of this also reminded me of an old story …

After Quasimodo’s death, the bishop of the Cathedral of Notre Dame sent word through the streets of Paris that a new bell ringer was needed. The bishop decided that he would conduct the interviews personally and went up into the belfry to begin the screening process. After observing several applicants demonstrate their skills, he had decided to call it a day.

Just then, an armless man approached him and announced that he was there to apply for the bell ringer’s job. The bishop was incredulous.

“You have no arms!”

“No matter,” said the man. “Observe!” And he began striking the bells with his face, producing a beautiful melody on the carillon.

The bishop listened in astonishment; convinced he had finally found a replacement for Quasimodo. But suddenly, rushing forward to strike a bell, the armless man tripped and plunged headlong out of the belfry window to his death in the street below.

The stunned bishop rushed to his side. When he reached the street, a crowd had gathered around the fallen figure, drawn by the beautiful music they had heard only moments before. As they silently parted to let the bishop through, one of them asked,

“Bishop, who was this man?”

“I don’t know his name,” the bishop sadly replied, “but his face rings a bell.”

The following day, despite the sadness that weighed heavily on his heart due to the unfortunate death of the armless campanologist, the bishop continued his interviews for the bell ringer of Notre Dame. The first man to approach him said,

“Your Excellency, I am the brother of the poor armless wretch that fell to his death from this very belfry yesterday. I pray that you honour his life by allowing me to replace him in this duty.”

The bishop agreed to give the man an audition, and, as the armless man’s brother stooped to pick up a mallet to strike the first bell, he groaned, clutched at his chest, twirled around, and died on the spot.

Two monks, hearing the bishop’s cries of grief at this second tragedy, rushed up the stairs to his side.

“What has happened? Who is this man?” the first monk asked breathlessly.
“I don’t know his name,” sighed the distraught bishop as he fought back tears, “but … [bishop sobs] … he’s a dead ringer for his brother.“

Following some of the news stories and taking some recommendations from friends about what to write in recent days, I decided to explore the health of society itself. Such topics are not usual for me to share in writing, however; given these interesting times in which we live, the greatest wrong may be to say nothing at all.

Some of what I write today, I learned from unusual sources, such as my pets like Tiny (pictured here in a Hibiscus pot). There is something simple about an animal, a simplicity that we humans seem to lack, things like unconditional loyalty and love (although some debate whether an animal can love). Some reading this have never owned a pet, for those, this may seem disjointed and nostalgic, however, to the rest of us who can easily recognize such loyalties in the eyes, meows or barks of our pets as they greet us when we arrive.

In light of all this, I began thinking of how Society itself works. For example, hundreds of years ago, our forefathers settled this land. They came here in small, close knit groups seeking a better life free from encumbrances of too much government, taxation and religious restriction. Much of the reason we became a country lies in the fact that these groups of settlers were closely knit, caring for one another and working for a better, freer future for themselves and their posterity. Anything short of that genuine care and compassion for one another may have resulted in a far different America than we know today.

All of this in mind, I began to wonder what’s wrong with Society in general. Why do we no longer care for those around us as our forefathers did? You can see it in cities across the world where saying Hello to a stranger, opening a door for someone, or doing a good deed seem unthinkable, yet it was such mentality on which our very society was founded. Consider some of the following news stories:

• In China, residents who have been evicted by government riot, a college student wanting a hug is mauled by a panda (how to you get that lonely that a panda becomes your only option for a hug?) and Chinese civilians attacked the police who caused a fatal motorcycle wreck.
• In Thailand, a country normally considered stable, protesters have succeeded in closing all international airports.
• Pakistan and India face new tensions following terrorist attacks in Mumbai, India. These two countries, both nuclear powers, have been at war 3 times since the 1947. Furthermore, as recently as six years ago, the two were on the brink of nuclear war with each other. Could it really happen? See these links for more: [1] [2] [3] [4] (Of course, if such a war happens, where will companies direct our calls now?)
• Within the next few months, Iran will assemble its first nuclear weapon.
• A little closer to home, half-way across the Atlantic, tensions are rising in Iceland where the government-backed banks have failed and the country is on the brink of both bankruptcy and revolution.
• Of course, such things could not happen here, right? Americans are much more civilized, right?
  • A Wal-Mart worker trampled to death in New York as shoppers race for bargains. It has been rumored on Talk Radio that the worker was trying to protect a pregnant woman who was injured as the hoards of shoppers broke the doors down.
  • At another Wal-Mart, shoppers scuffled over an Xbox 360 console. Why? What’s the point? You can get one just fine on the other 364 days of the year.
  • Vermont actually passed a resolution to secede in 2005.
  • In fact, Secessionist movements are taking place worldwide, with many of the supporting groups in the US.
  • Gay advocates protest marriage bans across the US. (Is it really Government’s job to decide what makes up a family, or should that decision be made at the family level? How much else do we want Government to decide for us?)
  • A Russian scientist is predicting the decline and breakup of the US.
  • The United States government may wind up being replaced by a North American Union. Additional sources: [1] [2] [3] [4]
  • The Pentagon is training 20,000 troops to be stationed domestically in order to keep peace within our borders – troops that could be commanded to fire upon US citizens.

With all these things in mind, it appears our society has transfigured into something completely different than it once was. This has happened both locally and globally. As a people, we no longer seem to care for one another. When was the last time you said hello to your neighbor? When was the last time you said Hello to a stranger? Held a door for someone? Let someone in ahead of you in traffic? Did a good deed for someone who needed it? Even as trivial as such tasks may seem, I do believe they are healthy for us to do; they show we care, and that we have not lost our moral fabric, our obligations and loyalties to each other as a society.

So, what is causing these changes in Society?

Over the Thanksgiving holiday, I began to wonder if such changes are part of nature, if we somehow do change when populations increase. There is a natural precedent for such a thing, consider the locust. Alone, or in small numbers, locusts are relatively harmless; however, they undergo a series of very remarkable biological changes when they reach a certain population density. When grouped together, the normally peaceful locust changes from green into a more colorful and much more harmful specimen. These changes are suspected to be triggered by hormones in the insects as population density increases.

Similarly, I suspect that we change as well. Consider the fact that inner-city areas have often supported Democrats in US federal elections and their social policies which regulate wealth more closely whereas more rural voters often favor more fiscally conservative values at the polls. Is this simply politics, or is it evidence of a change in humanity? While in the country, one tends to value survival of the fittest, yet in cities, many desire strength in numbers and, therefore, support policies and politicians granting them the most government-backed security.

Additionally, one can find end-time scenarios in the writings of most western and mid-eastern religions. Could they be wrong, or is there something fundamental about the human condition which drives us to a precipice of social collapse? This does become a very prominent question for theologians, philosophers and scientists everywhere, but should such thought be relegated only to those professions, or should we be asking ourselves too? So, what have you done today to make the world a better place? Have you done a good deed? Have you helped a stranger?

If society is to survive, we must do so out of understanding, kindness and compassion rather than through misunderstanding, misdirection and wars against those with whom we do not agree.

In summary, I believe the duty lies within us all to help one another. Should we fail in this duty, we put our society at risk of failure. In conclusion, I leave you with a favorite quotation of mine from Sir Arthur Conan Doyle. Many think this quote supports communism, however; I find that it actually begs us to be more responsible for our own deeds.

“Few people will dispute that in the world of nature everything reacts to an exact law; and physical as these laws seem in their outworking, they all originate from the spiritual universe. There can be no haphazard methods, for nature is very drastic with delinquents. This also happens in the spiritual spheres where the smallest action calls forth an exact reaction. This means that man’s thoughts become his creations, that they become like angels of good and evil to him; so that when he views his life from some higher plane of existence, he well realizes the disastrous nature of those mental creations of his – of gloom, depression and selfishness – which were and are his mental children. This has affected me deeply since my arrival here, for I was wont to create such characters, scenes and word-pictures. Mine was a vivid imagination; and, while I gave forth many a picture of joy, homeliness and beauty, my pen also depicted scenes of crudity, ugliness, crime and horror. While recognizing that such pictures may by their very contrast teach their lesson, on the other hand creations of ugliness and terror are apt to live on in men’s minds, and fill them with violent and unhealthy vibrations. Now I gaze down into the lives of men and women who have been considerably influenced by me for either good or ill. This I tell you only to illustrate the lesson. Some day every man will attain either the joy or the terror of seeing the effect of his creations, beautiful or the reverse; no matter whether they are merely fictitious characters or actual conditions of life resulting from actions of his which have considerably influenced the lives of others. He will then see his own personal contribution, be it positive or negative, to the collective whole.“

- Sir Arthur Conan Doyle

What exactly is Thanksgiving? Historians tell us one of the first Thanksgiving feasts was held on December 4th, 1619 in the newly-established Virginia Colony as a celebration of the freshly reaped harvest. The average person today will tell you it is a day when Americans gather around the table for oven-roasted turkey, stuffing, cranberry sauce and the traditional trimmings followed by long bouts of watching American football. The first idea, albeit functional, and the second idea, modernized toward the standard pomp and circumstance of a modern-day commercialized holiday in my own eyes fail to capture the meaning of Thanksgiving.

Again, I ask; What is Thanksgiving? It is not a day, nor a meal, nor a celebration or a reason to rush to the shopping malls across America. Thanksgiving is a spiritual place inside us all, a place we sometimes seldom visit, and a place we should find ourselves each day.

When we are given something in this crazy world, we not only should be thankful for it, however; we also should share what we have with those who need our help. Only then will we see the true meaning of Thanksgiving. Only then, in the reflected eyes of the ones we share our lives with, the ones we do a kindness for who could not have enjoyed something they need without our help, and those who we call friends. When in their eyes we see their thankfulness for our presence, our friendship, our kindness and love, we too should be thankful to our creator for the gifts he graces our lives and the lives of others through our acts of kindness.

So today, in this time of Thanksgiving, commit yourselves to looking at those you love, those who are your friends and family, and those with whom you have something to share in kindness and give thanks. Give thanks for their presence in your life, for the times you share, for the kindnesses you are capable of doing and for all who do a kind deed for you.

God is watching. Open the eyes of your heart and see the world around you. Know you can change someone’s life today, tomorrow, and beyond. Change their lives with love, with kindness, with compassion and most of all, with Thanksgiving in your heart that You were able to be the one to share what you have with those in need. God knows this is a dark, dreary world, however; God also knows he placed the capability to change that fact within the hands and hearts of all who read this by sharing what we have in life, one kind deed, one hug, one hello, one kind act at a time.

Don’t just sit back, eat turkey and watch football this Thanksgiving, be the reason someone can be thankful instead. Share your Thanksgiving with those you love and encourage them to share theirs. And on Friday, when the china is back in the china cabinet, do not put away, alongside that china, your thankfulness. Remember, there are 364.25 days each year to be thankful for in addition to Thanksgiving day.

“If one could only learn to appreciate the little things…
A song that takes you away, for there are those who cannot hear.
The beauty of a sunset, for there are those who cannot see.
The warmth and safety of your home, for there are those who are homeless.
Time spent with good friends for there are those who are lonely.
A walk along the beach for there are those who cannot walk.
The little things are what life is all about.
Search your soul and learn to appreciate.” – Shadi Souferian

Have a happy, wonderful, memorable Thanksgiving that lasts all year long. Remember, you hold the power to change this world, one life at a time. Be thankful, be happy, and be kind to all and for all you meet. As Ralph Waldo Emerson once said, “You cannot do a kindness too soon because you never know how soon it will be too late.“

This is, of course, the traditional model, but there is a historical precedent when both stocks and bonds declined at the same time. That time was the Great Depression. As you watch and wonder what market downturns mean, also keep your eye on many things which can tell you what is coming next. Factors such as drops in stocks and bonds at the same time, which signal wealth being cashed in and removed from the markets, increases in CDS (not CD’s that banks offer, but Credit Default Swaps) which tell us the likelihood of bankruptcy of the issuer of the CDS.

Credit Default Swaps are a very misunderstood element of the economy. Watching their default rate tells us the health of the organization and the loans/bonds it makes or acquires. When a company, government or entity sells a CDS, it is basically acquiring the debt via investment instrument where the buyer pays the seller installments and, in the event of a default in the loan(s) and/or bond(s) in the CDS, the buyer gets a payoff. If it sounds confusing, it is. CDS are a relatively new invention first put forward in 1997 by JP Morgan Chase as an investment vehicle designed to limit losses on defaulted loans and lessen the necessary reserve holding by banks in order to service new loans via risk reduction and artificial inflation of the balance sheets.

All of this being said, lets look more at how CDS can tell us about the health of the agencies selling them. The higher someone’s CDS rate is, the more likely that they are to default, file bankruptcy or just outright fail. Money Week published a good article in March 2008 with a list of CDS rates of banks and an explanation of how to spot vulnerable banks which may fail. The list of banks on this list has been updated, surprisingly to most, a majority of the banks listed are not US-based. The spreads are measured in basis points, therefore 100 basis points is equal to 1%. Warren Buffett even referred to CDS as “financial weapons of mass destruction.”

So where did it all go wrong? Now, remember, when a bank makes a loan, it must have a reserve on hand to cover deposits, possibilities of default, etc. Such reserves are defined in Modern Money Mechanics, a discontinued publication on the Fractional Reserve Monetary System produced by the US Federal Reserve. The book, “The Web of Debt” better explains such principles in more understandable English. Banks, knowing that they must keep reserves began to try and find ways to make loans and investment vehicles which did not require the reserves to be kept on hand, in other words, ways to make money free of obligation. The idea was to create a product that could be sold as an investment which protected the bank from suffering losses in the event of a loan default. Banks then, invested in their own and each others CDS in order to, in theory, limit losses due to defaulting loans or crashing bonds. The error in thinking was that they no longer needed reserves to cover defaults and that the newly invented CDS instruments would function like bad loan insurance. Money Week does an excellent job of conscisely explaining the issues with CDS in an October, 10, 2008 article.

Now that you should have an idea of what CDS are, and how they have destabilized the global financial system, you can begin to see why default rates become so pivotal in gauging risk of failures within organizations issuing CDS. This is, unfortunately, not the end … it is only the beginning. With the knowledge you now have, let us examine together some frightening CDS rates held by things we think are too large to fail.

• Passing of the $700 billion bailout bill caused US CDS rates for Treasury Bonds to soar by 40% (report from Bloomberg on October 29, 2008)
• MarketWatch reported that spreads on CDX North America Investment Grade index, which tracks debt of 125 companies in the US and Canada climbed to a record of 275 basis points on Thursday, November 20, 2008 signaling that the worst may yet be to come. Before Thursday’s report, the CDX spread had already doubled during the 2008 year.
• As of October 17, 2008, Iceland’s government had a CDS rate of 948 basis points prior to its financial collapse. Those watching the news would know that this has deeply affected Iceland as citizens are protesting and demanding accountability.
• The United Kingdom’s CDS rates have climbed to 88 basis points on November 24, 2008, a new record, amongst fears that the UK may be headed in the same direction as Iceland.
• Following Barack Obama’s speech and pledge of $800 billion in additional bailout funds, US CDS rates soared to a new record of 56 basis points on November 26, 2008. Furthermore, fears abound that the US’ AAA credit rating will soon be downgraded as deficit spending nears $1 trillion dollars for the current year.
• If you do not believe that the US could go bankrupt, consider the fact that, based upon CDS rates, California (CDS rate of 165) poses a greater risk of bankruptcy than Slovakia (CDS rate of 150) and Michigan (CDS rate of 192) is more in danger of bankruptcy than California.

These are just a few reasons why you should watch CDS rates and be prepared as CDS markets may become the next victim of the slumping economy. As CDS rates increase, business and governmental failures mount, and the guarantees made by CDS sellers cannot actually be kept, we could be entering a new tidal wave of economic loss inundating our already weakened global financial markets. The result of such events could very well be the demise of many nations, banks and companies.

Furthermore, should our government continue haphazardly giving money away, their own CDS rates against US treasury bonds will continue to soar, resulting in loss of the US’ AAA credit rating which will escalate interest rates on US debts and make further borrowing to finance deficit spending almost impossible to acquire. In short, we could be watching the beginning of the end for the US government as fears of bankruptcy spread from the tinfoil hat community into the financial markets and beyond. Economies, such as ours, who have constructed such elaborate pyramid schemes as the CDS market will be most difficult to repair.

“The major difference between a thing that might go wrong and a thing that cannot possibly go wrong is that when a thing that cannot possibly go wrong goes wrong it usually turns out to be impossible to get at or repair.” – Douglas Adams