Increasing Bond Rates

This is very interesting given that increasing rates means decreasing prices for the bonds being offered.  This will be reflected in a greater cost to the federal government in terms of interest paid on the debt.  Right now that means that the deficit will increase that much faster.  Any movement by the Fed to print (i.e., buy bonds) will push commodities, especially crude oil, even higher.  So the federal government and the Federal Reserve have their butts in a crack.  This has been the case for a long time, but the instability around the Straits of Hormuz and the environmentalist choke-hold on new domestic sources of oil makes it more grossly evident.  The rate over 1% in the 5 year is a significant move up from yesterday not to mention last week. 

This is a snapshot.  Click on the table title to see the current state via Yahoo.

US Treasury Bonds Rates

Maturity	Yield	Yesterday	Last Week	Last Month
3 Month	0.05	0.05	0.06	0.06
6 Month	0.13	0.13	0.12	0.12
2 Year	0.38	0.34	0.30	0.28
3 Year	0.57	0.49	0.41	0.39
5 Year	1.10	0.97	0.83	0.83
10 Year	2.27	2.12	1.97	1.97
30 Year	3.41	3.27	3.12	3.12

A Savage Stinger

I should have known better than to talk nice about my 10/22.  My wife is not an enthusiastic shooter.  There have been a number of 'hot' burglaries over in town.  These are probably mostly drug-related with the principals being known to one another.  However, within the last year or two, someone entered the suburban residence of a retired missionary and his wife and stabbed them to death.  The case has gone cold, and no arrests have been made.  People get crazy. 

For years my wife has depended upon a .38 revolver.  She isn't comfortable with this firearm, and she does not shoot it well.  If she's close enough to hit someone with it, they are close enough to take it away from her.  We tried a couple of other weapons.  She's small and recoil-shy; the shotgun isn't going to work.  Plus it is fairly heavy and the pump-action is difficult for her to operate.  I considered an autoloading pistol with a laser, but she had trouble chambering the initial round.  Finally we tried the 10/22.  She could easily chamber a round and operate the safety.  Her shooting with it -- while no danger to Annie Oakley -- was certainly adequate at inside-the-house distances.  She liked the light weight and handiness, as well as the fact that there is no recoil and not a lot of noise.  While it is hardly ideal, ten CCI Velocitors more or less on target are far better than five or six rounds of .38 sprayed around the room.   Thus my 10/22 has become a house gun.

Never fear, though, I have back-ups.  Almost ten years ago, I happened by what was then a new gun shop looking for a particular Savage bolt-action.  The dealer did not have what I was looking for, but he did have a couple of little Savage rimfires.  One was the just introduced .17 HMR with a bull barrel if I remember correctly.  The other was a simple synthetic-stocked Mark II .22LR.  This was before the adjustable triggers.  I seriously considered the .17, but ammunition was hard to get and expensive, and I wasn't sure it was going to catch on.  A .17-caliber 20-grain bullet still seems mighty small to me.  They are good if you can get past that.  I didn't need another .22, but I figured I could use it to teach the grandkids to shoot or something.  It came with a very cheap little Simmons 3-9 scope as a combo deal.  I bought it. 

I took it out to the range and fired it a few rounds with open sights.  It seemed pretty accurate, so I stuck the scope on and tightened everything down.  I pulled the bolt and bore-sighted to get the scope at least on paper and proceeded to sight-in.  Once I got it lined up, I kept backing off the distance, but the little rifle just kept throwing dime-sized groups.  I was impressed. 

The one flaw the Savage has is that it will sometimes leave an empty in the chamber.  I have to clean it, especially if I switch between Federal or Remington bulk pack ammo and CCI -- the brands I generally use.  That is not a big deal, as bolt-actions are very easy to clean anyway, and most of the time a swipe with a Bore Snake is all that is needed to make it all right.  The tight chamber is probably a factor that contributes to the rifle's accuracy, so I'm more than happy to meet the demands.  Though the barrel length is 21 inches, the Savage Mark II is quite light and easy to carry. 

I suppose from years of being a brush-hunter and my predilection for carbines and single-action revolvers, I have an ingrained habit of carrying a firearm muzzle-down by the pistol grip -- as if it were a handgun.  Some of my rifles and shotguns are simply too long for this at my mediocre height, and I carry them muzzle-up.  The Savage will carry muzzle-down, which means, in any case, that I don't worry too much about the 10-round "banana" magazine protruding so ungraciously from the bottom.  Shooting off-hand with a small rifle, I tend to draw my left hand in anyway, bracing my upper arm against my torso.  From a sitting position, my left hand is in front of the magazine.  Usually it's not in the way, but it is always ugly.  I keep threatening to order a couple of 5-rounders from Midway, but every time I think of it, they seem to be on backorder. 

The Mark II with its blue steel and black synthetic (plastic) stock is pure utilitarian.  It does not have particularly good lines.  All it does is shoot.  As I said the newer Savage rifles, including some of the rimfires, have adjustable triggers.  Fortunately for me, the trigger on my rifle suits me well.  No doubt it is heavier than some might like.  After a very little take-up, the trigger breaks -- sharp and clean.  It is consistent, as you would expect from almost any decent bolt-action.  There's no recess on the muzzle but there is a nice crown. 

For a sporter .22 of moderate cost, I have no complaints.  Over the weekend, I had the Savage out to check its zero and make sure the scope hadn't gotten knocked off.  I sat down in a gully with my back to a log and fired at my target a measured forty-five yards away.  Without putting too much effort into it, I put three Remington Yellow Jackets into a single ragged hole.  This is not a particularly picky rifle when it comes to choosing ammunition.  I have not heard too many people tout the accuracy of Yellow Jackets -- or any Remington .22LR, but the Savage handles them quite well. 

I have been sorely tempted to get a new .22WMR rifle -- not that I need another one, but the Chuckster has great sentimental value.  I am reluctant to take it some places I go.  I may still buy one.  If I run across one of those stupid Kel-Tec semi-autos, I'll have to duct tape my wallet to keep from getting it.  Meanwhile I started wondering if the Savage would not be a good substitute part of the time when loaded with premium ammunition.  I was particularly curious about shooting CCI Stingers in the Savage. 

I should note that some people warn about Stingers because the case is too long.  The overall length of a Stinger is the same as any other .22LR, but CCI generates their 1640 fps by using a shorter, smaller bullet -- 32 grains -- and a longer case to hold more powder.  I have never had issues with Stingers.  I can understand that match chambers might be a problem, but Stingers shoot and function without any obvious difficulties in all the .22s I have tried. Nevertheless, be advised, they might damage a particular firearm.

Anyway, I decided to try Stingers with the famous water-in-a-closed-container test.  I put maybe a quart of water in a coffee can and put the lid on tightly.  Since I was pretty sure a close-range hit would be impressive,  I moved the can out to 100 yards.  My first shot went over the top of the can.  It was shooting about three and half inches high.  I lowered my crosshairs to the bottom of the can and fired.  The can exploded nicely.  The thing is that a Stinger goes below the sound barrier around, probably, 125 yards.  The water test indicates that the bullet still expands violently at a velocity in the 1150 to 1200 fps range.  

Savage makes fine rifles.  I know people who do not like them, but if a person is looking for accuracy, a Savage is simply hard to beat.    

The Fed's Flow of Funds via Denninger

The report the Federal Reserve release called the Z1 gives us an idea of what overall debt looks like.  Denninger's analysis explains the problem.  The federal government's debt is growing, which we knew, in an attempt to "buy" Gross Domestic Product.  It is not working.  We got a very sharp, needle-like spike from Bernanke's QE2 in September of 2010.  It has now fallen into the negative range.  

The federal government is sucking up all the oxygen and wondering why small businesses are sputtering.  Cutting taxes is not going to fix this.  The only option is to so drastically reduce the size of government that revenues cover expenditures.  It is true that cutting government spending will cut GDP, but probably not at a dollar-for-dollar rate.  Unemployment will grow as bureaucrats have to find new jobs.

I look at it like this.  When I am trying to lose weight, I cut back on what I am eating.  My wife's immediate response is to be somewhat insulted that I am not devouring as much of her cooking as normal.  I feel guilty.  I really hate to see food go to waste.  But if I keep the refrigerator cleaned out, I am "waisting" food instead of wasting it.  That can't be good.  Better to feed the dog and the possums than to have to buy bigger pants with more material in them.  Eventually, she adjusts her cooking volume to my eating plan.  It takes a while, and it is painful. In the end, though, I avoid both wasting excess food and waisting it.  Everybody wins.

Why Do You Think They Call Them 'Green'?

Green Firms Get Fed Cash, Give Execs Bonuses, Fail -- from ABC no less, I am impressed. 

Secretary Steven Chu declined an interview request. The department has long defended the green energy movement as a way for government to help spur development of cutting-edge products that aid the environment and economy. Sometimes, they say, investments in potential game-changing technologies simply don't work. The potential default rate, they say, is within the parameters set by Congress.

First, we do not need the Department of Energy.  We certainly do not need the government via the DOE picking winners and losers.  Handing out taxpayer money to any company that claims to be developing renewable energy and that has the right connections to politician and bureaucrats would be hard to justify constitutionally.  But they don't have to justify it because it is part of the DOE budget.  So the first thing to do is dismantle the Carter-Era Department of Energy.

As is the case with ethanol from corn, these so-called energy companies cannot produce a viable, marketable, competitive product without subsidies.   Their "profits" are, like many of the companies booming back in the dot-comm bubble, drawn largely from venture capital or, in the present case, government loans that will never be paid back.  They have not developed anything, and they do not have anything to sell, even if there was a market for it.  Sometimes, as I believe happened with Solyndra, some of the taxpayer money from DOE gets recycled back into the campaign coffers of politicians like Obama.  It is not much different from symbiotic relationship of politicians and defense contractors -- but at least the defense contractors product something we appear to need part of the time. 

The only thing clean about most of these green energy companies is the money they launder. 

Of course, nothing is going to change.

Administration officials, from Obama on down, say they continue to support the green energy mission. "There were going to be some companies that did not work out," Obama told reporters in October, after Solyndra's meltdown. "All I can say is the Department of Energy made these decisions based on their best judgments."

Can you give me an example of one that did work?  I didn't think so.  As John Kay once said, "Your best is barely good enough/ And if that's all you've got/ Then it won't do."  In a free market, the market decides where the money goes.  If a company can come up with a viable concept and a decent business plan, it will eventually find investors in the private sector.  If somebody can produce a quality solar generator or similar product that I can depend on and that gives me some value for my money, I'll be the first in line to buy it.  Government cannot create a market.  Government mandates and government intervention will, in the long run, produce nothing except a disastrous chain of unintended consequences.  

China Scales Back GDP Forecast

China numbers are always questionable, and the industrial metals may be more honest.  Inflation has been running fairly high -- I think around 6%, though, like ours, it may be worse than reported.  Here's the problem.  If you are running 6% inflation and your GDP grows 7.5%, how much is actual growth and how much is an artifact of inflation?  In China, you have the additional problem of not really being able to break out government spending versus the private sector.  I think the U.S. statistics are often made up after a few Jack-and-Cokes; I have real doubts about the validity of numbers from the Chicoms. 

Anybody who thinks China is going to be an economic powerhouse in the long-run, as long as it is a command economy, is foolish.  Communism, fascism, socialism -- any attempt at centrally planning and controlling economies is doomed to collapse on itself.  Yes, as long as you have countries where you can dump your excess production like Germany has done with the rest of Europe and China has done with the U.S. and Europe, you can create a temporary prosperity.

When the trade is based on the importing nation's increasing debt, the danger is as much to the exporting nation as the importing one.  This is especially true in that China has been fueling our buying spree by funding the U.S. government deficit via bond purchases.  As the dollar has slipped, the Chinese economy has been flooded and inflated with devalued dollars. 

Now Bernanke is signaling that there may not be a QE3 (we certainly hope not) acknowledging at last that there might be a little too much inflation in the U.S.  With the euro threatening to collapse, this could mean a much stronger dollar -- at least in the short-term.  If the U.S. government acts sensibly (stop laughing) and decreases spending in absolute terms, we get a deflationary reset.  There is a good chance the Chinese economy could flatten, if not go negative given a new Austere Europe unable to pick up any slack. 

Reality Therarpy

The markets are off a little today and the euro is slipping.  I find myself perversely pleased with this.  We have kicked this around a little, and it is hard to explain.  Unlike the Joker, I do not want to watch the world burn.  In fact I rather it did not, which is, perhaps paradoxically, what lies at the root of my desire to see things "blow up".

You see, there are people who have been telling us for years that all is well.  Paul Krugman who has Ph.Ds and a Nobel Prize and thus must know much more than I know, says that government deficits are not like household debt.  Government debts do not need to be paid off.  We can run deficits to no end.  The bankers in Europe are saying much the same thing and vow to hold the euro together. 

I do not want a financial crisis.  I want reality therapy for governments, politicians, bureaucrats, and people like Bernanke, Buffett, Soros, and Goldman-Sachs.  I want these people to be forced to face their lies and deception.  People are being fleeced and their saving destroyed even as government stooges assure us that we need not be alarmed.  I doubt that most of the financial manipulators are out to destroy our liberty and turn us into state-owned slaves or subject us to tyranny and dictatorships.  They may even be surprised when the strongman (or strongwoman) arises in Greece or Italy, France or Germany or even in America, but surprised or not, there is a good chance  things will head that way just as they did in Germany after the disastrous Treaty of Versailles and the fall of the Weimar Republic. 

I want to see the villains driven to the wall.  I want to see the dishonest and the deceitful, the stupid and deluded all admit that they were wrong.  I want banks to have to have capital before they can loan it out.  I want governments to do away with deficit spending funded by the central bankers who then exert such influence on  policies.  I would like to see governments reduced to a minimum.   I would like for the productive to have more and better than the non-productive, but  I would also like for there to be more of the productive.  

I like to see people building and creating and growing things.  Cruising around the internet encourages my optimism.  From the proliferation of people interested in heirloom seeds to the Open Source community to the guys who can turn a junked DT350 into a work of art, there are a lot of good people doing good things.  It is time they were told the truth.   

Prepping Goes Mainstream on Lifehacker

I doubt that the average prepper is going to gain much from this piece on Lifehacker.  The interesting point to me is that so many people are thinking that things may not continue as they always have.  Even at the height of the Y2K-mania, other than Art Bell listeners, no one was taking the disaster preparedness too seriously.  Lifehacker even mentions EMPs. 

Again, it isn't necessarily the ultimate apocalyptic wipe-out that worries me.  If the Yellowstone Caldera goes, all my worries go with it.  No, I'm thinking more of what happened in the financial collapse in Argentina in 2001, what is happening now in Greece, what happens in cities across America when sports teams win or the cops are involved in a questionable inner city shooting.  About 36 hours ago, we had tornadoes -- not even really big ones -- tear up miles of structures and property.  Several were injured and at least a couple were killed. 

In my immediate area, we had minimal disruption, but we had heavy straight-line winds break off a dead tree out near our fence and power line.  Of course, I have my generator, but, last year, one of the neighbors and I convinced our local electric co-op to take out a tree in similar condition in that vicinity that was much closer to the line.  Nobody in our neighborhood lost power.  Eliminating threats ahead of time is a good policy. 

We just do not know what is going to happen, but being prepared is always better than being caught flatfooted.