More current events

Before I start talking economy and anyone who reads this in the next 2-3 months wonders why I can't see that things are improving, let me start with a little anecdote that may serve to get us into the proper frame of mind.

I read an article in the paper last week that pondered why the general public thinks that crime rates are on the rise when statistics show that crime in this country has been dropping for the last twenty years. The author quoted a slew of sociologists and basically interpreted the divergence as a function of the natural human tendency to idealize the past. Ha ha ha. Oh, you silly rubes.

Of course there is an alternative explanation. It could be that the reason people think that crime is on the rise is because... um, crime is on the rise.

I know. I know. But the stats. How do you explain those away? Pretty easily actually. Since I'm not a socialist looking at bar graphs, but a police officer who has spent the last fifteen years looking at real, honest-to-goodness crimes, I can tell you exactly what those stats are worth. And no, the answer isn't toilet paper. It's not even worth that because the ink from the paper would just come off on your butt, and nobody wants a bar graph smudged all over their butt.

What the stats don't tell you is that law enforcement doesn't tally crimes the same way that it did twenty years ago. The three big drivers for this are the district attorneys: who place additional barriers on the prosecutions of certain crimes to try keep their dockets from overflowing, some police administrations: who discourage the reporting of certain crimes to make themselves look good, and finally -- and most importantly -- the demographic changes in the criminal world itself that none of these rosy charts seem to have any interest in documenting.

The next time you hear someone tell you that thefts are down, and that robberies have dropped by such and such, or that burglaries are down so and so just ask, "When you say 'theft', you are including identity theft in those statistics. Aren't you?" Then sit back and enjoy the stammering on the part of the sociologist or politician or whoever.

Put simply, the stats are lying. The reason that robberies, burglaries, and petty thefts are down, is because a lot of the people who used to get their hands dirty committing those sorts of crimes have found that it's much easier these days to just go online and take someone's personal information and steel money that way. In most states this isn't actually a kind of theft, it's considered a fraud and that little bit of hair-splitting keeps those bar graphs from having to include the one bar that has skyrocketted over the last few years. So although technically yes, thefts and such are down, the underlying premise that you are any less likely to become a victim of crime (and a crime that feels suspiciously like a theft) is simply not true.

Now, for the economy.

Last week's jobs number told the tale that the US had added 162,000 jobs. Simply the fact that we didn't shed jobs is seen as a sign that the recovery is well under way. The major markets are all trending up. Commodities are moving higher. The housing market is improving. So why am I still pushing the cart and calling, "bring out your dead," to anyone who will listen? Because the stats don't tell the whole story.

Nation killer #1) At the current rate of increase the United States will reach something economists call 'debt saturation' within four years. Unless something changes -- drastically -- in four years time we will have reached the point that additional increases in debt do nothing to add to our overall productivity. That means that stimulus will no longer be very 'stimulating' and the possibility of jump-starting the economy through short term debt increase will have evaporated. That will leave us with three options: hyperinflating the debt away (this means your dollars will become very nearly worthless. Coupon cutting will take on a whole new significance when a loaf of bread cost ten bucks!), defaulting on the debt (this will have a number of effects, but the first thing you will likely notice is your aging relatives calling and wanting to move in with you because their retirement funds suddenly ceased to exist) and the third -- and probably most likely -- is that we can try and seize the necessary assets from other nations (you may have heard of this; it's called war, and the upshot here is that we are running out of countries like Iraq that have resources but lack viable militaries. In other words the next country we shoot at may actually shoot back).

Nation killer #2) Did I mention that commodities are moving higher?

Considering how contentious the whole drill/don't drill debate was two years ago it's interesting that Obama's announcement to open up offshore drilling barely even made the news. Another 'non-newsworthy' event occurred when the US Department of Energy announced that the DOE was expecting world oil supplies to start dropping within the next few years unless someone starting ponying up 1.3 trillion dollars a year to find and drill more oil. Oh, in case you're curious, no one is spending even a fraction of that at the moment. In fact Conoco Phillips recently added their name to the list of companies (Exxon, etc.) who are cutting the search for new oil fields altogether. This government admission was odd for a couple of reasons. First, the last time I checked, the DOE was insisting that oil supply would continue to increase for the next 20 years or so. Second, at the moment those oil supplies actually start to show a measurable decline you're going to see the price shoot up in something that looks very much like the fun we had when gas went to $4.00 a gallon two years ago. And that will only be the beginning.

The maximum price for oil that still allows for reasonable economic growth is somewhere in the area of $70 a barrel. Right now it is at $86 a barrel (owing to the fact that the dollar gets a little weaker every time we print a couple hundred billion new greenbacks) and the only reason it hasn't gone higher still is that worldwide demand is in the gutter. If we see something like a bonafide recovery that'll change in a hurry. Even without a recovery the potential for another run up is looking more and more likely. It could happen this summer.

I haven't even gotten to the nation killers like Iran's soon-to-be nuclear arsenal, the continuing climate change problems, social breakdown, etc. etc. This is enough for now.

To sum up: I think we're in for a mild spring on the news front. America's privileged place in the world economic pecking order is allowing up to continue to rack of staggering debts without any of the messy debt implosion stuff that is currently taking Greece and starting to spread to Spain and Portugal. The summer could be unpleasant with high energy prices and the global political instability that comes with them breathing uncomfortably down our collective necks.

By the fall the economy should take its next serious leg down. Any marginal job growth will have been snuffed out by the rising business costs associated with high energy prices and by then the worst of this year's municipal and state employee layoff should be well under way. The public will scream at the usual suspects -- politicians and oil companies. In November I think we will see massive turnover in Senate and the House. This will accomplish nothing.

If we can stay out of any major wars during this time we may have two to three relatively prosperous years left. After that, shrinking oil supplies will turn the world into a madhouse of fear and uncertainty. Servicing all that debt will be impossible, and that fact will be obvious to everyone. The final resource grab will get well and truly underway. Saudi Arabia is going to find itself the last eligible male in a world of psychotic old maids desperate to court, and to undermine the competition any way possible. War will be inevitable at this stage.

And that brings us to the tribulation.