Despite the fact that tomorrow's supposed to be the day to show love and affection, it looks like Canadian firearms enthusiasts aren't much in love with parts of the government right now. The reason? A report making the rounds in Canada that says officials have it on "good authority" that our State Department may be on the verge of cutting off all imports of certain calibers of ammunition.Ammos listed for this rumored ban include the .50BMG, 7.62x39mm Soviet, 7.62x51mm NATO, .308 Winchester, 5.56 NATO and .223 Remington. Additionally, we're hearing that an expansion of this proposed ban might be broadened to include the 6.8mm SPC, 9mm Parabellum, .40 S&W, and .45 ACP- among others.In other words, State Department officials may be floating a trial balloon to see if there are howls of protest, or whimpers of compliance. Canadian elected officials who have directed this information to me say the move seems to be motivated by "emboldened" anti-gun officials who think they have a kindred spirit in President Obama. Additionally, Canadian officials tell me they are hearing rumblings of blanket export bans on certain firearms to Canada and the attachment of DSP-83 End Use Certificates (with their $250 Export Fee) attached to all other types of American firearms. Should that happen, opposition leaders remind Canadian firearms owners, it will not affect European Union imports. Firearms and ammo exported from Europe would be unaffected- and certainly at far more appealing prices than comparable U-S firearms. In effect, the State Department would be hammering gun manufacturers, distributors and exporters in the United States while simultaneously making firearms -and ammunition - ownership and acquisition more difficult for Canadians. To antigun politicians, this must smell like roses. To pro-gun politicians in Canada, it smells fishy, and they're trying to drum up awareness on both sides of the border because it is "still being fought and the battle isn't over yet."But it looks like an indirect campaign against firearms and ammo may have already begun. You read it first here - and we'll keep you posted.Meanwhile, back in the contiguous 48, four states are considering removing their bans on open-carry firearms. Texas, Oklahoma, South Carolina and Arkansas are each considering legislation that would remove the ban on open-carry handguns.Surprisingly, open carry is legal in all but six states, including those where concealed carry is not. The other states that ban open carry are New York and Florida. As expected, Paul Helmke of the Brady Center has offered his opinion on why any carry is a bad idea. "…the more guns you have in a situation," Helmke says in USA Today, "the more likely you are to have gun violence."Nice quote, despite the fact that facts prove exactly the opposite. These four states didn't suddenly decide to abolish their rules against open carry. In one case, Texas legislators were motivated by a groundswell of public opinion. 55,000 signatures on a petition and $25,000 in contributions for an ad campaign helped open eyes in Austin. South Carolina has a measure supported by thirty-seven legislators, while only Representative Mike Ritze (Rep.) is listed on the Oklahoma bill filed earlier this month. No matter which side of the border you're watching, we'll keep you posted.--Jim Shepherd
Watching the perverted circus of corrupt politicians and administrators in Washington and New York the last six months is enough to make anyone with a brain want to shout a primal scream of disgust and anger. I use the word "brain" because it is becoming increasingly apparent that many Americans unfortunately are no longer using the gray matter that exists between their ears with regards to what is going on in our country. The rapidly accelerating chain of events moving us faster and faster towards economic oblivion is beyond shocking. It is happening much quicker than I anticipated.
The numbers these stooges in Washington and New York are throwing around for the bailouts and economic stimulus package are simply too big for the average person to comprehend. This is one of the reasons why they can get away with it, because they know the average citizen can't understand it. The old adage "if you can't convince them, then confuse them" comes to mind and the politicians certainly have become very adept at doing that lately. (But why we let them get away with this is another story in and of itself for another time).
At some point large numbers simply become figures on the page, well beyond human scale and intuitive understanding. And yet as discussion about the economy and the gargantuan numbers that come along with it continue to dominate the news, it may be more important than ever to try to understand what these numbers actually represent. The politician's figure as long as they can keep you in the dark, you won't demand any accountability from them. And accountability to a politician is what a heart attack means to your average 55 year old.
So before I go any further let's do a quick study of what a trillion dollars represents in order to understand why the U.S. Government is completely out of control at this point and soon on its way to utter collapse.
With the economic stimulus package estimated to cost around one trillion dollars, and Obama stating on January 7th that "he is admitting to trillion dollar budget deficits for years to come" here are some analogies that express the absurdity of the current situation in the United States.
Now the analogies: First analogy: If someone spent one million dollars per day each and every day since Jesus was born, it would take another 731 years (beyond today) before one trillion dollars was spent. $1,000,000,000,000 / $1,000,000 per day = one million days one million days / 365 = 2740 years 2740 - 2009 = 731 (years remaining) Second analogy looks at a million, a billion, and a trillion in terms of seconds. One million seconds comes out to be about 11½ days. A billion seconds is 32 years. And a trillion seconds is 32,000 years! The third analogy puts dollar bills end to end. If you laid one dollar bills end to end, one trillion dollars would stretch nearly from the earth to the sun. It would take a military jet flying at the speed of sound, reeling out a roll of dollar bills behind it, 14 years before it reeled out one trillion dollar bills! But the last analogy is the one that absolutely blows my mind. If you took freshly minted brand new $1,000 dollar bills and starting stacking them one on top of another, it would take a stack over 68 miles high to reach one trillion dollars! It's become almost surreal, like we are in a bad dream or something!
It is clear that Obama's Keynesian (another word for head up your back end) economic advisors are telling him that they don't know what to do other than continue the Bush policy of create more money out of thin air in a desperate attempt to stimulate the economy. This is akin to a fireman trying to put out a massive blaze by pumping gasoline through the hose instead of water.
Richard Maybury of the "Early Warning Report" had a great quote this month related to this when he said the following: "Expecting your life to be improved by politicians is to believe in one of the most unlikely events imaginable."
I couldn't agree more with his observation. But we seem to have a large portion of America that is in complete denial of what is actually happening to our country. Watching educated, but uninformed Americans put so much trust and hope in government is flabbergasting to me. Listening to those who take sides and want to blame the "other party" shows just how out- of-touch the average citizen in America has become. It is not about Republicans and Democrats anymore. We are way beyond that now. Forget about trying to assign blame to one party of the other because this mess got started back in the 70's and both parties are guilty, guilty, and guilty.
Looking at the dismal record of fiat currencies throughout history, no country that has disconnected their currency from a gold or silver standard has ever made it past the 40 year mark before inflationary panic and disaster unfolded. The United States is now in the 37th year of its fiat currency experiment since Nixon took us off the gold standard in 1972. Obama has already stated he plans on trillion dollar budget deficits for years to come. This is completely unsustainable! My take is we would be lucky to make it another eighteen months before the whole enchilada blows sky high.
The latest so called "economic stimulus package" is nothing more and nothing less than creating money out of thin air. It absolutely guarantees hyperinflation within eighteen months time frame, possibly much less which provides us colossal opportunities to profit in non-dollar assets such as the precious metals.
And what we were originally told about the stimulus package, is suddenly no longer the case. As always, what we the people were led to believe in the beginning with the bailouts and now the economic stimulus is totally changed. The economic stimulus is mostly pork barrel spending and socialism on a grand scale with little in the way of infrastructure job creation which was how this was originally billed. It is very conceivable that the first year budget deficit of Obama's administration will exceed $3 trillion dollars. This is absolutely unsustainable by any definition you want to use.
As Jim Sinclair recently said, "There is no longer any means of reversal of the final terminal phase of the downward spiral now solidly set in motion."
It is coming whether you or I want it to or not. All you can do is take the positive approach and prepare for it, and profit from the debacle. The time to do so however is rapidly running out. The million dollar question remains, how much time do we really have before the system implodes? For me I wouldn't be surprised to see the next shoe drop at any moment as the "Obama Hope Rally" quickly fades into the next wave of financial panic. This next wave down is going to be a whopper because it will involve the popping of the commercial real estate bubble and its associated derivatives. Again, the PTB (Powers That Be) don't want you to understand what these derivatives are and how they are affecting the financial system. The government media complex keeps providing disinformation to prevent you from understanding the true nature of this derivative liability that exists worldwide. What the exact amount of this liability represents is not exactly known, but what we do know is that what we have seen thus far is only the tip of the iceberg.
In these kinds of volatile environments, things can go from looking good to sheer panic at the drop of a hat. The Fed is working feverishly at the moment to avoid deflationary panic, but their only solution is to throw money, lots of money at the problem. This in the end will only prove disastrous as hyperinflationary forces take over. The reason for this is because of the sheer number of new dollars that are being created and thrown into the system. The exact timing of when this hyperinflation will show up taking "Cash is King" to "Cash is Trash" will depend mostly on what is called the velocity of money as I have explained before.
If the newly created money starts to change hands quickly as people begin to buy whatever they can of value before there money buys even less, then you can expect the hyper-inflation to show up sooner than eighteen months, possibly much sooner. If however the velocity is slower and the newly created money does not change hands very quickly then we may get the full eighteen months before things really begin to unwind. Personally, my take is we will be lucky to make it through the end of the year without a major financial catastrophe.
So get prepared as quickly as possible for disruptions to the distribution network typical in periods of hyper-inflation.
1. Get a food storage and emergency supplies in place. (Including at least a three month supply of prescription drugs). 2. Own physical gold, silver and the quality precious metals mining shares. Start thinking and taking short-term profits with the shares with every opportunity you get. Make sure you own the American Eagle silver coins if you live in U.S., or Canadian silver Maples if you live in Canada. 3. Keep some $1's, $5's, $10's and $20's safely in your home (at least a couple thousand dollars worth), I'm not recommending stuffing your mattresses, just some cash in case of "Bank Holidays" that seem sure to happen. 4. Consider buying or having a safe haven place at least two hours away from a major city. 5. Take a global perspective with regards to protecting your hard earned dollars. In other words, don't have so much U.S. Dollar exposure. Transfer accounts to countries or 6. Currencies better than the U.S. dollar. Currencies of choice that come to mind are the Canadian Dollar, the Singapore Dollar, and the Hong Kong Dollar. 7. Continue to educate yourself and others about the realities of what is happening. Don't believe the hype and outright lies that come from the Fed or U.S. Government. 8. Read the Constitution for yourself and help others read it so the public can know how we get back on track to liberty, prosperity, and abundance once more.
We are witnessing the undoing of what our founding fathers worked so hard to provide for us. They created a republic but were worried we would be able to keep it. See if the quotes below from our founding fathers don't ring true to you and really hit the nail on the head.
Yes, we did produce a near perfect republic, but will they be able to keep it? Or will they in their enjoyment of plenty, lose memory of their freedom. Material abundance without character is the surest way to destruction. -Thomas Jefferson
Benjamin Franklin's admonition as he left the final meeting of the Constitutional convention to his wife who asked what the new government would be. Franklin replied: "A republic madam, if you can keep it."
The people of the United States are the rightful masters of both the Congress and the Courts, not to overthrow the Constitution but to overthrow those who pervert the Constitution. -Abraham Lincoln
The bottom line is we are losing the country the founding fathers so diligently worked and strived for. The enemy is power seeking politicians on both sides of the isle and the unbelievably greedy fractional stock holders of the Federal Reserve who have now hijacked America from the people. They are the very perverts that Abraham Lincoln warned us of.
Are you willing to fight to save the country from those who desire to pervert the Constitution? This will be the ultimate decision that all of us will be faced with if the country is to be saved. Some say it is already too late. I believe there still is a chance.
A very well written piece by Richard Maybury best describes how we the people can get ourselves out of the mess that we now find ourselves. I think Richard Maybury is one of the brightest minds that we have available to us today on topics of liberty, economics and freedom. I would highly recommend you subscribe to his newsletter which you can access at www.richardmaybury.com.
The following paragraphs in italics are excerpts from Richard's February 2009 newsletter:
Why I am Optimistic , Long-Term The timing of the economic crisis is a historic stroke of good luck. The disaster began under republican leadership, and is virtually certain to grow worse under democratic leadership. So, most Americans will soon see that both major parties are failing them catastrophically.
Everyone therefore, is awakening to the fact that they must seek and alternative. And there, in all the libraries and on the internet, is the Constitution, waiting to be discovered. At bottom, the present crisis is... more than anything else, a demonstration of the fact that he who expects peace, liberty, and abundance to endure, in a country with statist schools, is expecting what never was and never will be.
I remember the Vietnam War, what enraged young people the most was the betrayal. They had been taught all their lives to trust government, and now it was sending them to die for a pack of lies. They began to doubt everything, and to hate "the establishment," which meant anyone with any kind of power. Result: riots
Searching for an alternative to the conservative trust-the-government faith they had been taught, they veered sharply left. This is another stroke of luck for us today. The centerpiece of socialism was the empire of the Union of Soviet Socialist Republics. On the day the Berlin Wall came down in 1989, the credibility of socialism and everything that resembles it was smashed. Every person could now see that state control of the economy means slavery, and poverty for all but the ruling class.
So today the credibility of both the left and right of the mainstream political spectrum has been demolished, and over the next few years, as conditions worsen, millions will be looking for something that is not main-stream. A window of opportunity will open. Those who believe in what was known in 1776 as the "system of liberty" - that is, the system enshrined in the Constitution---will finally have audiences so desperate they will not be only receptive but eager to give the system a try.
America is one of the few countries to have been founded on a set of ideas, as opposed to simple loyalty to a ruler or piece of real estate.
These ideas are clearly stated in the Declaration of Independence and Constitution, especially the 9th and 10th amendments to the Bill of Rights. These two amendments say the federal government is allowed to do to us only what the Constitution says it can, which isn't much. For instance, Washington is not authorized to establish the Federal Reserve, inflate the money supply, manipulate interest rates, sanction subprime mortgages, give military aid to foreign tyrants, or spend $190 million on a bridge to nowhere.
The Constitution is not perfect, but it is close enough. And, it enjoys a wonderful prestige. This isn't to say many have read it or know what it is. But they have heard good things about it, and some can read well enough to understand its high school level language. (The reason government does not want you to discover the Constitution is, the founders did not write it in legal-ease; any ordinary person can understand it and see where it is being violated. Is this why so few Americans today have been taught to read well?)
To most the Constitution will always be just a symbol, like the Liberty Bell and the Statue of Liberty. But as long as they are desperate enough to give it a try, this will start the country back in the direction of peace, liberty, and abundance.
In short, and this is another key point in the realm of economics, there's no other ideology left to try. Fascism and its variations went down in flames in the 1940's. Socialism and its variations followed in the 1980's and 90's. Now thanks to Bush and Obama, conservatism is on the ash heap and liberalism isn't far behind.
This isn't to say power holders won't try a lot of crazy schemes. But what they do will be all tactics and no strategy. There will be no model, no ideology, just euphemisms for print money! From all the panicky fire fighting incidents, we will experience forms of chaos never seen before. In a few years people will realize Obama's "plan" was the same as Bush's: pour all the conflicting suggestions from my advisors into a blender and hit the "muddle" button. People will long for some sort of coherent, logical system in which they can have faith. They won't go to the system of liberty because they like it or because they understand it; they'll go because it's the only thing left. In a few years, John Q. Citizen will regard both major parties as his enemy, and he will be so desperate he will be ready to try anything, even freedom.
I leave this with you in the hopes that we all find our way back to what made America great in the first place. In the meantime it looks like we are about to find out just how deep the consequences for decades of abuse of our system of credit and Constitutional values will be.
The opportunities for profit in the coming economic meltdown will be amazing. While many will be losing most of their wealth and suffering in many untold ways, the few who were prepared will be able to come through the storm financially, physically and emotionally intact.
The time to prepare is coming to a close. Please be advised.
Just wanted to let everyone know that I will be celebrating Texas Independence Day by working support for my nephew, Mike the Tall, and his fellow teammates (12 in all) on March 7th and 8th during the Texas Independence Relay. I plan to have a good time and hopefully I will see a lot of my fellow Texans out cheering the different groups of runners as they pass through the different towns.
Here is a brief description of the event from the official website:
“The Texas Independence Relay is composed of 40 relay legs of various lengths, totaling over 200 miles. The course starts in Gonzales, TX, where the Texas Revolution began, and it finishes at the San Jacinto Monument, where Texas Independence was won! To tackle this formidable task, your team will be composed of 8 to 12 members (your choice!), and you'll have an exceptional time either furthering good friendships or making new ones! You'll encourage each other along the way while you visit the small towns of Shiner, Moulton, Flatonia, Schulenburg, Weimar, Borden, Columbus, Altair, Eagle Lake, Wallis, Orchard, Simonton, and Fulshear. Then, you'll make your way through the paramount city of Houston, experiencing it in a way you never have before! Racing on a team with your friends in this unique format over an incomparable span of Texas steeped with momentous history all amounts to a GREAT time that you’ll fondly remember for years to come! This all takes place over Saturday and Sunday, March 7-8, 2009. Come and take it… if you have what it takes!”
The Carroll National Guard unit will train on urban military operations by holding a four-day exercise at Arcadia.The purpose of the April 2-5 drill will be to gather intelligence, then search for and apprehend a suspected weapons dealer, according to Sgt. Mike Kots, readiness NCO for Alpha Company.Citizens, law enforcement, media and other supporters will participate.Troops will spend Thursday, April 2, staging at a forward operations base at Carroll. The next day company leaders will conduct reconnaissance and begin patrolling the streets of Arcadia to identify possible locations of the weapons dealer.The primary phase will be done Saturday, April 4, when convoys will be deployed from Carroll to Arcadia. Pictures of the arms dealer will be shown in Arcadia, and soldiers will go door to door asking if residents have seen the suspect.Soldiers will knock only at households that have agreed to participate in the drill, Kots noted."Once credible intelligence has been gathered," said Kots, "portions of the town will be road-blocked and more in-depth searches of homes and vehicles will be conducted in accordance with the residents' wishes."One of the techniques we use in today's political environment is cordon and knock," Kots explained. "We ask for the head of the household, get permission to search, then have them open doors and cupboards. The homeowner maintains control. We peer over their shoulder, and the soldier uses the homeowner's body language and position to protect him."During this phase of the operation, troops will interact with residents and media while implementing crowd-control measures and possibly treating and evacuating injured persons.The unit will use a Blackhawk helicopter for overhead command and control, and to simulate medevacs.The drill will culminate in the apprehension of the suspected arms dealer.Alpha Company will conduct a review of the drill on Sunday, April 5.A meeting to give residents more information and accept volunteers will be held 7 p.m. Monday, March 2, in the Arcadia American Legion hall.Kots said the exercise will replace Alpha Company's weekend drill for April."We have a lot of extended drills this coming year," he added.In addition to surveillance, searching and apprehension, the exercise will also give the troops valuable experience in stability, support, patrol, traffic control, vehicle searches and other skills needed for deployment in an urban environment."This exercise will improve the real-life operational skills of the unit," said Kots. "And it will hopefully improve the public's understanding of military operations."The pre-drill work with residents is as important at the drill itself."It will be important for us to gain the trust and confidence of the residents of Arcadia," said Kots. "We will need to identify individuals that are willing to assist us in training by allowing us to search their homes and vehicles and to participate in role-playing.""We really want to get as much information out there as possible, because this operation could be pretty intrusive to the people of Arcadia."
Brown calls on world to strike 'grand bargain' to solve economic crisis!
“From the discussions I have had and am about to have... I think we are fashioning for the future a global deal, a grand bargain, where each continent accepts its responsibilities and its obligations to act to deal with what is a global problem that can only be solved with a global solution,” he told reporters. "
Stopping what it called a “massive ongoing fraud,” the Securities and Exchange Commission on Tuesday accused Robert Allen Stanford, the chief of the Stanford Financial Group, as well as two top executives and some affiliates of fraud in the sale of about $8 billion of high-yielding certificates of deposit held in the firm’s bank in Antigua. In the complaint, filed in Federal District Court in Dallas, the S.E.C. accused Mr. Stanford and two associates — James M. Davis, a director and chief financial officer of Stanford Group and the Antigua-based bank affiliate, and Laura Pendergest-Holt, the chief investment officer of both organizations — with misrepresenting the safety and liquidity of the uninsured CDs......
The time has come for us all to be very, very wary of where our money is. Actually, the time passed a while ago, but Texas has been rather stable in light of the banking fiasco. Not any more.....
Today we mourn the passing of a beloved old friend, Common Sense, who has been with us for many years.
No one knows for sure how old he was, since his birth records were long ago lost in bureaucratic red tape.
He will be remembered as having cultivated such valuable lessons as: - Knowing when to come in out of the rain; - Why the early bird gets the worm; - Life isn't always fair; - and maybe it was my fault.
Common Sense lived by simple, sound financial policies (don't spend more than you can earn) and reliable strategies (adults, not children, are in charge). His health began to deteriorate rapidly when well-intentioned but overbearing regulations were set in place.
Reports of a 6-year-old boy charged with sexual harassment for kissing a classmate; teens suspended from school for using mouthwash after lunch; and a teacher fired for reprimanding an unruly student, only worsened his condition.
Common Sense lost ground when parents attacked teachers for doing the job that they themselves had failed to do in disciplining their unruly children. It declined even further when schools were required to get parental consent to administer sun lotion or an aspirin to a student; but could not inform parents when a student became pregnant and wanted to have an abortion.
Common Sense lost the will to live as the churches became businesses; and criminals received better treatment than their victims.
Common Sense took a beating when you couldn't defend yourself from a burglar in your own home and the burglar could sue you for assault.
Common Sense finally gave up the will to live, after a woman failed to realize that a steaming cup of coffee was hot. She spilled a little in her lap, and was promptly awarded a huge settlement.
Common Sense was preceded in death, by his parents, Truth and Trust, by his wife, Discretion, by his daughter, Responsibility, and by his son, Reason.
He is survived by his 4 stepbrothers; I Know My Rights, I Want It Now, Someone Else Is To Blame and I'm A Victim
Not many attended his funeral because so few realized he was gone. If you still remember him, pass this on. If not, join the majority and do nothing.
RW, I have not checked in quite a while, glad to see that the Preppers' Networks have taken off.
I was doing a garage cleanout and realized I needed to rotate my gas. Here are some thoughts. My gasoline storage serves one primary purpose: keeping enough gas on hand for the generator. During Ike, I had three plastic gas cans (about 20 gallons total), in addition to the gas in the generator itself. All told, I had enough for several days of running the generator to keep the fridge/freezer cold and running the window unit in the house. This allowed me the flexibility to stay for three days after the storm to evaluate damage, clean out freezers (mine, my parents, and my mother in laws), and check on loved ones houses.
Once those days passed, I went ahead and evacuated since it became apparent that we would be without utilities for 2-3 weeks. Once I returned, I dutifully refilled my gas cans, minus one I returned from where I borrowed it, and promptly forgot about them. This past weekend, I caught myself letting my car's tank run near empty. I rarely let it get below half a tank. Since I needed to rotate the gas, I filled up with the cans. Easy enough, I thought. Wrong. The bigger can (about 8 gallons), has one of the new over-engineered, locking, no emission, childproof caps. This “expletive deleted” of a gas cap was not long enough to fit in my car's tank. So, I had to use the smaller gas can, empty it into the gas tank. Then refill it using the bigger can. This took significantly longer than it should have. I am not too young to remember long metal spouts that simply dispensed gas when the can was tilted. Now, the locking hub has a separate set of directions on proper usage.
The part of this episode that worries me is the secondary reason that I keep gas at the house. The proximity to refineries and a rail line keep me on alert for an emergency evacuation due to a spill or chemical cloud. I like to think I could be out the door with wife, baby, dogs, BOBs, food, etc in only a few minutes. If I were relying on the stored gas to top off the tanks, I would waste that much more time. This 'dry run' for filling up the car showed me how reliant I am on a simple task I had never performed before.
In a real emergency, the highways would be filling up while I was still in my driveway. Keeping a proper amount of fuel on hand is not the hard part (for now, at least). An item as simple as a funnel can mean the difference between getting my loved ones out of harm's way and getting stuck in traffic. This seemingly minor thing could have a tremendous impact should an emergency arise. True, I could likely improvise a funnel to speed the process along, but I'd rather know for sure. This humbling experience has fortunately caused me to pause and re-evaluate many of my preps and plans. I hope this can be of some use to readers at TPN.
Luke N Beaumont
This continuing economic landslide we are in is showing itself more and more in this area, long considered to be insulated from the mortgage meltdown and its fallout. Refineries are shuttering expansion projects and starting small scale layoffs. First, contractors are let go, then maybe a few workers or a 'temporary' shutdown of a unit happens. I have also begun to see more homeless out on the streets along with some increases in our crime rate. Down the road in Port Arthur, gang and street violence continues to escalate. Keep your eyes open, and be careful.
and here is one I check every couple of months. it is from Europe so they give a little better read of things as it seems the Continent across the pond is much freer with respect to more disclosure and news reporting. These guys have been pretty much on for the last few years.
”Will Refiner’s Struggles Lead to Higher Gasoline Prices?
February 5, 2009 6:54 AM ET By Tom Waterman
New York, NY—After 4th quarter earnings reports confirmed how bad the downturn in the U.S. and European refining sectors has been there is a concerted effort underway to cut costs at every corner. The real danger looking beyond 2009 is that expansion and upgrading projects are being delayed and in some cases indefinitely postponed.
Already there are questions being asked on Capitol Hill about why retail gasoline prices are rising even as crude oil has fallen so sharply in recent months. The answer is very simple. Refiners that had been producing gasoline at a loss in the latter part of 2008 have been cutting back on overall utilization as well as deemphasizing gasoline production in favor of more profitable distillates.
Refinery utilization rates in January averaged below 84% for the first time in a very long time. In fact the American Petroleum Institute says that overall in 2008, refinery utilization averaged 84.9%, the lowest rate since 1988. The API also calculates that gasoline demand fell in 2008 compared to the prior year by an unheard of 3.3%. It may be even higher once the Energy Information announces official data sometime in April, 2009, and it marks the first year-over-year decline in gasoline demand since 1991.
With the ethanol mandate requiring 11.1 billion gallons of ethanol blended into gasoline in 2009, one might think that gasoline demand could slip further this year. That is a possibility but further “demand destruction” will be dictated by how deep the economic recession cuts.
Frankly, efforts underway to lessen the impact of reduced demand for products will alter the supply/demand equation during 2009. Valero, the nation’s largest refiner has already cut back to about 75% of capacity, and there is no reason to believe that the company will change that pattern unless profit margins improve. Others are certain to follow, which could keep utilization rates at historically low levels.
Naturally there will be some refiners that try to take advantage of improving margins—which are substantially higher this month than at any time since September, 2008, but have a long way to go to convince refiners to boost overall output.
There will have to be signs that gasoline demand is picking up. Perhaps the first sign came yesterday when the EIA reported that “implied demand” ticked higher by 4.2%, or 365 million bpd.
That number was startling, given the economic mess we’re in right now, but until we see a few weeks of data like this, it’s too early to declare that demand is coming back.
This is not good news for Houston and the greater Gulf Coast region. In Texas alone there are 25 refineries employing thousands of workers, representing more than 25% of U.S. refining capacity.
I feel it’s too early to bury the industry as these cycles can be corrected in one of two ways. Either demand starts to improve again or production is scaled back until they do. It seems this sector is intent on making certain that margins improve so that it remains at least profitable to operate.
This is a trend we saw as far back as October, and we have no reason to believe it won’t continue. We felt that gasoline would lead the next rally, and that has been the case.
On November 17, 2008, we wrote: “Even as gasoline gets battered again and again, it gets clearer every day that gasoline is going to lead the market higher at some point, and that could very well be after January 1 when the winter begins to wind down and suddenly depleted gasoline stocks become a concern. When we replace the calendar at the New Year, spring does not look so far away.”
Suddenly spring does not look far away and we are in the midst of what some refiners tell us is the largest maintenance period we have seen in years. We just don’t see gasoline production increasing at a rate that we normally see.
We also wrote: “However, the near-term issue is that gasoline prices will rise versus crude oil. The chances that gasoline production worldwide will slow are greater than OPEC’s ability to shave crude production, therefore it makes sense that there will be more than enough feedstock but as refiners cut back on gasoline production, tightness could develop in the U.S. and elsewhere.”
On November 17, 2008, NYMEX prompt WTI settled at $54.95 per barrel while RBOB gasoline settled at $1.1746 per gallon, or the equivalent of $49.33 per barrel, 10.2% under the value of crude oil.
Yesterday, WTI settled at $40.32 per barrel compared to RBOB, which settled at $1.2184 per gallon, or the equivalent of $51.17 per barrel, 26.9% above crude oil. Since then, crude oil has fallen by 26.6% while gasoline has gained 3.7%. We see this trend continuing as spring approaches.
Whether it's in your car, RV, boat, or part of your off grid power system, batteries are important and need regular maintenance. To do this, you need a few things. First off is a battery brush. These make the job of cleaning the crud that accumulates on the terminals and posts quick and easy. To do this, disconnect the terminals, negative first, using the proper tool for the fasteners. Be extremely careful not to touch metal with the tool, especially on the positive side. Also avoid shorting the battery across the posts, or you'll get a crash course in arc welding! Push the brush onto a post, and turn it clockwise. Just a few twists will do it, and when finished, the post will be bright and clean. Use the male brush to clean the terminal lugs.
To prevent that crud from building up in the first place, get some terminal protectors. Don't know how they work, but they do! It's PFM for all you former military folks.... Also, spray those terminals with protectant for even better crud prevention.
Always keep the top of the battery clean. Moisture, crud, dirt, they can all conduct current and cause your battery to slowly discharge. Never leave a battery in direct contact with the ground for the same reason. Place it on a board, rubber mat, or some other dry, insulating material. In a vehicle, make sure the battery is properly secured in it's tray. For boats, RVs, or other purposes, it's a good idea to keep the battery in a marine battery box, which will prevent objects from falling on the terminals and shorting the battery, possibly causing an explosion or fire.
Make sure the battery box is well ventilated. Charging batteries give off hydrogen gas, which is extremely explosive. Always charge batteries in a well ventilated area!
The last thing maintenance wise is keeping the electrolite level topped off. Lots of batteries today are "maintenance free", but if there are removable caps on top, they are not. Use distilled water only when topping off the cells on a lead acid battery. Tap water will cause scale to build up on the lead plates, reducing battery life. And remember, it might go in as water, but it comes out as acid! It will burn you, and eat clothing, paint, and other stuff. Be careful!
For long term storage, it's best to keep the battery on a trickle charger. Never dishcarge a battery below 50%, as this will reduce it's life. Use deep cycle batteries for power systems, and cranking batteries for starting engines. Choose battery size by the amperage required from the intended load. And there ya have it, battery 101!
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