S.3930 65-34 passed

I've finished reading it. Let's put aside the ranting and wailing and myriad details.

Our Congress has just passed a law that makes Abu Ghraib legal.

For the first time in my life I will vote a straight Democratic ticket. It's not a question of whether the Democrats have a good plan. It's a question of whether I'm going to allow the current villains to profit from their evil.

On Georgia's voter id law

I actually agree in principle with the alleged intent of the law - ensuring that only those eligible vote. My problem has been that the implementation appears to be intended to deny access to otherwises eligible instead of to the ineligible. Oh, it's subtle, but there are two parallel issues that make me lean toward this opinion.

First, it's a "right now" law. A problem was identified - the difficulty of a proportion of eligible voters in getting photo ID cards. Two solutions were possible: A massive ID program so as to minimize the effect for the upcoming elections; a lesser intensive ID program that would still be functionally effective for all potential voters by the time the law took effect in XX years. The solution chosen was a less intensive program (six mobile units that went to high-density locations only, with minimal notice of their appearance) for the then-upcoming election. The appearance was for denial of certain groups.

Second, and actually more important, is that while the voter ID fraud for polling places is uncommon, voter ID fraud on absentee ballots is one of the most common such frauds. Yet the legislature not only didn't tighten those laws, they loosened them so that committing such fraud is EASIER.

I've a solution to the latter problem, one which would actually make it more likely that I accept the alleged intent is the real intent. Add a simple three requirements for absentee ballots in Georgia. Note that applications can be submitted by mail, by fax, or by direct submission at the office of the county registrar. The requirements plus some commentary are:

1 - An absentee ballot application submitted by mail or by fax must be notarized. The notary block must include a 'how identified' section (which happens to be something already required of the notaries of almost every state).
2 - Absentee ballot applications turned in at the county registrar's office require the submitter to present ID as though they are voting.
3 - Absentee voter applications that are "on behalf of" applications can only be submitted at the registrar's office. Yes, you can submit on someone else's behalf in Georgia. It's done, for example, when the actual voter is in the hospital, or college student says to Mom "Help, I need an absentee ballot", or... It's a rather generous list of people who can submit applications on behalf of others. However, this line creates a traceable line for fraudulent applications while allowing the 'on behalf of' clause to continue.

On a list to which I submitted this, another person wanted to add the requirement of the ballot going to the home of registration. That rather defeats the intent of the absentee ballot, unfortunately.

Oh - regarding item one. A requirement of the registrar office shall be to contact the notary public to verify they notarized the document. For those who haven't dealt with notary publics in depth, this is a fairly easy requirement. The state - every state in the US - maintains a record of contact for registered notaries public. And the notary is required to maintain a log of all items notarized. Two phone calls, then, complete the verification. No contact for the notary or notary cannot confirm the signing? Ballot application denied.

About the previous post

Note how I seem to have two potentially conflicting predictions running. Yep. I was tired and forgot I think we're going to be at war with Iran before the turnaround.

Odds are that silver won't bump up high enough to do my "sell half" task within the next two weeks. That's my cutoff. I don't intend to sell anything that I think will jump that high if we go to war.

As to the predictions, the previous post is my general view of the path we'll take till some bombs go off. Recession gradually being recognized by everyone, with a dismal Christmas in terms of sales. Hints of deflation that are actually disinflation, and quietly some safe havens start doing well. The Fed tries to jumpstart - to overcome the doldrums - and we reach our fork. If you're a kapoom follower, the result is an inflationary blast to new highs. If you're a deflationist the belief is that the Fed will be doing too little too late.

If you're me, we're not going to get the chance. War. Inflation. And beyond that, well, my crystal ball is too dark.

yep, I don't know much

Specifically, on silver I've proven to be a bit of an idiot. That is, I've been acting on ignorance. Two things...

First, a swing of 20% in silver in a few days isn't as wild as I thought. Silver is a small market with a low price per unit.

Second, there are some very good macro reasons for silver to be turning down that have little to do with manipulation - well, in a way.

See, what appears to be happening is summed up this way:
1) Some key investors (size/quantity) think we're entering a recession;
2) THE major component of a recession is that because businesses are slowing down they buy fewer raw materials;
3) Those investors see this as lower demand for commodities, which means lower prices for commodities, which means they SHORT commodities;
4) shorts push the price down in anticipation. If that seems like a self-fulfilling prophecy it mostly is, especially in as small a market as silver.

By the way, as near as I can find out only about 10% of silver is for investment. Something on the order of 45% is for industrial applications of one sort or another, and another 35% is for jewelry and other end-products. Now I've seen press that because of the ETF the investment proportion is climbing, but the highest I've seen so far is 15%. Unlike gold, most of silver is not (at this time) a safe haven for money. Most being the key...

I'm noticing a lag in silver relative to other commodities other than gold. I'm going to guess - almost wish - as to what's going on. I think it's two subtle points reinforcing one another.

First, there is that slight increase in the monetary psychology of silver. It's not large but it's there. And unlike gold, silver is the 'refuge of the middle class'. I can buy the nominal minimum - an ounce - on almost any paycheck.

Second, and possibly even more wishful, is the jewelers. See, there are indicators that the autumn Indian Gold boost isn't happening this year. That's the boost that happens as jewelers in India buy gold to make their products for the holiday sales window. Thing is, they seem to be a bit unhappy this year about the price of gold. They also may be anticipating the recession - slower sales. But it's quite possible - and there are subtle signs (or maybe seeing what I want to see) - that they're making more silver instead of gold due to that same affordability.

All that said, here's what I think we'll see.

Commodities - including gold and silver - drop some more.
Since recessions are defined by poorer business performance, we'll see stocks decline. Bonds... I'm ignorant, but my guess here is that the inflationary pressures will keep bonds from moving into higher prominence. Thus the 'safe haven' will be dollars - with a subsequent strengthening.
As it becomes much more apparent we're in a recession - that is, when it's not the discussion of investment houses and economist but rather Newsweek and Fox/CNN - then gold and silver will shift to their hedge roles, joining dollars.

Gold may touch $450, and will certainly stare at $500. Silver, well, I wouldn't be shocked at $9, though $8 would be a bit too far.

But that's short term. Again, as the recession is recognized the precious metals will climb again. Possibly by the holidays, and certainly by March, they'll be back near today's levels.

If I get a bounce (possible) between now and then I'm going to sell half my silver for short-term gains and buy it when it drops. Half, because (grin) I could be wrong.

economics talking out loud

I'm puzzling through what I consider an economic conundrum. So this post is going to be a bit muddled, and the conclusion I reach (if I reach one) may not be the real answer. Bear with me - and comment if you have something to educate me, please.

I'm back on the subject of inflation/deflation, and creation of money. The specific question is how to apply credit to the thing. In general the monetarists - heck, almost all the economic schools - agree that credit is money "till it isn't". It's a money substitute. Now what I'm trying to do in this little walkthrough is play with the monetarist side of the discussion and apply credit more rigidly.

Let me do a bit of background. Monetarists define inflation as increasing the supply of money. Now in a monetarist's perfect world (as I understand it), fixed money supply leads to gradual price declines as both people and products increase (the latter due to the former's needs and capabilities). To maintain price equilibrium, then, the money supply needs to grow at a rate nominally equal to population and that population's supply and demand capacities.

I'm going to interject here a working definition. My working definition of capital is that it's a supply enhancer. That is, because of capital you are able to produce more than you could without it. It shifts the supply curve outward. This may be relevant - my mind insisted I get it down, anyway. Back to inflation and money supply, and specifically credit.

Credit frustrates the monetarist, or so it seems to be in what I've read. It always gets treated vaguely, with no real means of testing. So the conundrum I've been trying to resolve is:
When is credit money, and when does it cease being money?

Credit is money, obviously, when it is first lent. And in the end, it ceases being money when it's destroyed - that is, when it's returned to the lender. But that's the extremes, and I am still left with the question of money between those two instances. And for that matter, how and when the repayment should be applied in calculation of money supply.

Interjection, again. It appears to me I'm actually trying to decide how to calculate 'total money' - that is, either M2 or MZM PLUS the money that exists due to credit. Or restated, determining monetarist inflation/deflation modified by population demand/supply to include the effect of credit.

OK, let's take a first swing. I lend you $1000, and you agree to repay me $100 per month. (Yes, that's a steep rate, but it makes the math easy). Assuming that before the loan there was $100,000 in the money supply, then the month of my loan to you there is 101,000. This declines by 100 per month till we get a nominal money supply of 99,800. Actually, what we get is 100,000, but now I've got 200 of the 'real' money supply. So 'really', the boosted supply deflates at about 83 1/3 dollars per month. Obviously the simple answer is that I should add the credit as it exists and remove it as it's repaid. Outstanding Debt, in other words. (Note that as I was writing I was thinking I'd have to assume all the loans as repaid the next period. That's not necessary because of the tracking done. Hooray, and an example of not knowing where I'll end when I've started.)

I can do this as it's in the Fed charts. It's got a flaw that's going to niggle at me, of course. That's the fact that I have to deal with default loans that are wiped off the books - forgiven, settled for a loss, etc. Let's use the example to explain and maybe while I do that I'll see a solution (or that it's not a problem).

You stop repaying me after six months - still owing me 600 dollars, and having the money supply still inflated by $500. We fuss and fight, I send a bill collector, and we eventually settle with you paying half - $300. The loan no longer shows as outstanding and so doesn't sit in the Fed's numbers, but we have $200 still in the money supply that needs tracked.

Hmmm. No, it doesn't. It's in the M2. On the other hand, the credit is in there too once it's passed the first iteration. Which means just using 'outstanding debt' is probably a wrong answer. Nuts, but I guess not a surprise as simple answers to human issues do tend to be mistaken.

Or... maybe not. If it showed up, then outstanding debt wouldn't have been multiples of M3. (while M3 was being measured, of course.)

Digression. If you miss the M3, really, really miss it, you can recalculate it from existing reports. My preferred method if I really, really need it is to take MZM and add Small and Large denomination time deposits. Alternately, you can take M2 and add Institutional Money Funds, Large denomination time deposits, and Repurchase agreements. This latter is missing Eurodollars. Both methods can be done using the Federal Reserve's reports. The latter - missing the Eurodollars - is going to be over 99% accurate to M3 when tested historically. The MZM method is accurate as far back as I've taken it. I hesitate to claim 100% because the reports I download are rounded, but it LOOKS like it's 100%.

hmmm. I think I'm going to chart MZM plus outstanding debt - no, let's make it outstanding household debt. The other components of debt are commercial and government, and I am near certain the latter has notes that are already measured and suspect the same of commercial debt. heh - don't you like the back and forth? in my copious free time I'll do both household and household plus commercial outstanding debt as part of the 'money' measure. I'll write about it when it's done.

Silver once more

I was going to start my test of theory today. Then I saw the plunge. And I went back through every article I could find to try and figure out why silver would drop just short of 10% over the weekend.

Ten percent.

The last time we saw an approximate 10% drop in a couple of days, the experts had been saying silver was in a small bubble and a correction was due. They'd been saying so for almost a week. The same goes for the time before that. And prior to that, well, it's been decades since silver dropped 10% over a fairly short time period - that is, less than a week.

The dollar didn't improve that much. There was no news to indicate a sudden glut of silver. Friday's decline was relatively steep but nothing like that - and it'd begun turning around before the weekend ended.

I am really and truly beginning to wonder if the conspiracy minded folk aren't right - that there's an active attempt to keep gold and silver prices suppressed for a while longer. If true, the response will be shocking. The least drastic kicks it up to around $15 over the next week and a half in a 'simple' correction with everyone trusting paper. A more radical explosion happens if there's a call to show the metal being shorted.

More study, but I think I'm going to buy some more metal.

A curious observation

I paid $1.26 a gallon for gas today. That's the lowest I've seen it in two, maybe three years.

Now, the first thing that crossed my mind was the recognition that oil's price per barrel has fallen. But it's still not as low as it was two years ago - in fact, it's still above the average price for last year (~$50 per gallon).

I think I may go digging.

Silver Sept 8

Testing yesterday's theory, the 10:00 to 10:15 arrow is UP. I'll update this later.

[UPDATE]
OK. If I'd purchased at 10:15 and sold at 11:15 per my theory, I'd have spent $12.06 and received $12.08. That's not a lot - this appears to be one of the days where the massive move stops the run. My guess (yes another update) is that it'll stay between $12.05 and $12.10 for the rest of the day, creeping slightly above that if anything. I'll update again after the market closes.

[FINAL UPDATE]
Closed the day at $12.31. So if I'd just ridden to the end of the day - the other idea I was playing with - I'd have "made" 25 cents instead of 2 cents.

I think I'll run this as a paper investment for two weeks starting Monday (with a couple of caveats). I'll assume I can do this with TD-Ameritrade's $9 per action which is $18 per day cold. And I'll trade an even 100 ounces. If the 10:15 is higher than the 10:00, I'll buy, then sell at 11:15. I'll also note what the 1:00 price was for comparison. In all of these I'm going to use bid price - I'm a neo and don't want to get tripped too far on my ignorance.

Anyway, I'll see if I'm up or down at the end of two weeks of paper trade - and by how much.

The caveat is if I buy a bunch of silver due to foreseeing a huge spike nearterm. The two conditions I'm watching are:
Silver busts $15 per ounce;
Immediate percursor to a shooting war with Iran. This latter includes but isn't exclusively such minor things as:
- Sanctions by the UN;
- Iranian attacks;
- Military (US) movements into the region.
Oh - and actual shooting (grin). At that point I'll be chasing not leading, but it'll still be worth it.

Silver again - the witching hour

[UPDATED - SEE BELOW]
OK, it's gone beyond funny.

Looking at the past 90 days of data, on days when the NY exchange is open, 10 to 11 am Eastern is a witching hour. There is almost always a (relatively) large move in that hour. Most of the time it's downward though there've been a few exceptions. By large, I mean moving the spot price of silver (bid) by at least 10% of its then-current price.

It's both regular and large enough that I'm glad I don't have a connection that allows me fast trades on the metal market. Elsewise I'd look about 10:15 to see what the market's going to do and place based on where it's going to be by 11:00. That is, short sell it if it's going down, and buy it to sell it if it's going up. I'd "only" plan for 5% profit each day - more would be gravy.

I'm going to see if I can find the same detail dailies for further back. I'm curious how long this has been going on...

[UPDATE]
OK, the biggest thing I've discovered is that I really, really need to check my math. 1%, not 10%. Half a percent, not 5%. Sheesh. Oh, it still looks, well, manipulated, and relatively speaking that's a huge change, but the math error does tend to cut credibility...

blush.

More silver

So yesterday I finally wrote of the 10:00 flush. And what happens today? A spike - one that almost exactly reverses yesterday's flush.

Of course it then began a steady decline...

I'm staying with silver, but it's going to be a wild ride.

I'm staying with silver because I'm pretty much convinced it's undervalued. I'm becoming convinced that there has been dumping - in some cases a LOT of dumping - to keep it relatively depressed. I've been researching monthly production vs monthly use numbers and the latter keeps exceeding the former. And since silver has a LOT of uses, this means it's probably going to keep happening.

I don't know if the goldbugs are right - if it's going to go back to the 15:1 ratio with gold. I will say, however, that I have no doubt the current 45:1 is way out of line. Which means I expect to profit even if my doomsayer predictions are wrong.

And I hope they are.

On nuclear weapons

There is a loud group of folk who say Iran has, or at worst is on the brink of having, nuclear weapons. When confronted with the enriched uranium production capacity of Iran, they fall back to one of two positions - imports, and gun-type nukes. I'd like to discuss the latter here.

The general argument is that a gun-type fission bomb is still a nuke, and it's a lot easier to build than a fusion bomb, and that takes a lot lower quality uranium to be effective which, they claim, Iran has. Let's look at these briefly.

A gun-type fission bomb is still a nuke. Yes. It's approximately 15KT (using the Hiroshima bomb as an example). Which means pretty much all damage occurs at under 3 miles from the blast point - all damage meaning burns are first degree or greater, and civil (non-reinforced) buildings suffer at least moderate damage (roof and windows, no collapsed walls), and the radiation dosage is nonfatal. Basically, as long as you weren't looking at the blast you're shaken but that's about it if you are more than three miles from the blast. If you're inside a typical WalMart, you're fine if you're more than 2 miles from the blast. If you're in a concrete building, you could be as close as a mile from the blast and be 'just shaken' - though the flying glass will be dangerous. 3KT is big and nasty and a lot of people get hurt and die. It's far from devastating for ANY modern nation. If we were to make an analogy between the US capacity and this, we're seeing a set of brass knuckles facing a .50 cal machine gun supplemented by perrsonal side arms.

A lot easier to build. Yep. Easier doesn't mean easy. Look, the principle is well known. You shove two pieces of uranium, each not quite large enough to attain critical mass, together. They achieve critical mass and you have an explosion. Except that's not quite true. Let's start by looking at another explosive - black powder. If I've got a pile of black powder and I set it on fire, it burns really fast. Things get hot, and there's a flash, but ... "where's the kaboom?" To get the explosion the stuff's got to be contained - the expansion has to be trapped. The critical mass explosion is kind of similar. You can't just have a pile, you've got to have it come together so the burning caused by the critical mass is trapped. This means the stuff has to come together in a near-perfect form and REALLY fast to go "boom" instead of just fizzling. You can supposedly compensate by having more stuff, but it still matters.

One of the interesting things that's publicly known about the bomb used in Hiroshima is that the actual bomb part wasn't the majority of the "bomb". It was basically a big pipe bomb, less than a foot in diameter and only about nine feet long. All the rest, though, was either to ensure it didn't go off early or to ensure it DID go off when it WAS supposed to. Just as one example ... picture the pipe being just a little bit warped when the smaller slug is fired toward the bigger. Oops, it stuck.

Again, "easier" isn't "easy".

Final point - Iran has enough uranium of that strength to make a gun-type nuclear bomb. Maybe. Actually, assuming they ARE trying to reinforce for more effective nuclear weapons, I'll go so far as to say probably - enough for one, maybe two. But if they build a gun nuke with what they've got, well, then they ate their seed corn for more powerful weapons and it puts them WAY behind on that process.

All in all, it makes me doubtful that Iran has a home-made nuclear weapon at this time.

Inflationary Projects

In the last post I mentioned monetary injection through grand projects. Let's start by admitting the problems and providing some counters. I'll use some example grand projects to demonstrate those counters.

Problem one is that it's inevitably inflationary. Government sponsored grand projects are almost a casebook example of how to inject money into the system - either directly as wages or indirectly as contract payments. Directly managed projects can - and have - interfered with civilian businesses. Contracts defeat that, but are often both MORE expensive and get less money into worker's wallets. And getting money into worker's wallets is a critical reason for such a project. It's an intentional attack on unemployment AND an attempt to counter deflation. Oh - another strength of contracts is that if/when the government quits paying the industry is still there.

Problem two is that it's probably not directly cost efficient. Grand projects that need government financing tend to have payoffs on long timelines -- and they're also sustaining goals other than the bottom line. Consequently they seem wasteful to 'annual profit' standards. If they're keeping a large number of people employed - better yet, employed in something that will be a useful skill down the road - vs just sucking at the welfare teat, well, that's a bonus on several levels, but it may not be profitable. And while we're at it, sometimes the profit's indirect. As an example, consider the Tennessee Valley Authority. There are a lot of flaws with it. But due to its existence, the Tennessee Valley is NOT "poor ignorant crackers on a backwater in the nation's trading network." Instead, it contributes. And the people who live there are surprisingly well off. Not all of them, but a lot more than it would be if the valley hadn't been improved with roads and electricity and all that sort of thing.

A major project would work. Our government as it presently exists won't do it, and we'd have some nasty resistance from folk who don't believe in anything past "me and today." And it'd be inflationary - bad or good, it'd be that. There'd be waste and fraud and all the other things. But some projects...

The first, and to me the least desirable, would be rebuilding the Katrina Devastation. The biggest flaw is that the majority of the work would benefit one state - Louisiana. That has problems for a national program.

Something that could encompass the Katrina devastation but cover more states equitably would be a Southern version of the Tennessee Valley authority. That area is POOR, largely because it's underdeveloped with no logistics networks of note, and very little power support. There are draft plans so it wouldn't be a cold start. Again, it's got a problem in that it's regional - better than national, but still somewhat constrained.

Another project - and I admit to some personal desire - is a high-speed train network. It'd be EXPENSIVE. It'd be long-term. It'd hurt the airlines, and that's actually a negative. It'd push a lot of places toward mass transit, cutting into the fuel problem, which is good.

The main point here is that the projects have, from the simple accounting principle, a lot of downsides. But from the polity view they've advantages.

Not that it matters at this time. I can't see any major project being floated for at least three more years.

Yet more economics

In my predictions post I said short term deflation followed by a serious inflation spike - almost but not quite kapoom. Were it not for my predicted war with Iran I'd have pegged it a bit differently, and I'd like to get down that bit of comment as well.

I think we're getting ready to enter a deflationary cycle. Now I need to define again - deflation is when the used/usable money supply contracts. It's tied to prices declining as they compete for those scarcer dollars. As I've described before, there's a chicken-egg debate between economic schools as to whether the declining prices is cause or effect. Me, I think it can be started by either.

Now we've been in an inflationary cycle - more money into the system causing higher prices chasing the money causing more money to enter the system... But that's about to stop - heck, it might have stopped already and we're coasting over the hump. BUT... the higher prices only work if the consumer has more money to spend. For most inflationary cycles of history the money injection is from wages. For the past decade, however, we've been experiencing the injection via credit -- mostly through home loans.

Now, however, home sales are about to stop. Well, go into severe curtailment. There are a lot of reasons, but they boil down to people suddenly having a LOT of their income tied up in paying for houses that aren't selling like they were. And that, combined with some 'necessities' increasing in price are what are triggering the upcoming deflation.

Waitaminute - RISING prices triggering deflation? Yep. Remember that the prices can go up as long as income leads or keeps up. But wages are flat and credit's basically going to stop. So here's the way the trigger works.
I have a bunch of stuff on which I can spend money. As the price goes up I have to quit buying some of that stuff - and while I cut everything a bit, I cut necessities the least. Multiply me by a LOT of people no longer buying stuff and it starts hitting the companies selling things. They will try several things to try and get us back, but eventually someone will reduce prices -- and that'll succeed, which pulls more price declines, and so on and so forth. Eventually this turns around because businesses don't like making less than they did before. So every so often they test the market, and sooner or later the people have enough extra money that they succeed - and eventually enough do that to end the deflation (and maybe even reverse into inflation).

The problem is that in our current mentality deflation is a bad thing. Actually it's not just our mentality, it's our society. We're a debtor nation. Worse, our NATION is a debtor nation. As I've discussed before, deflations are bad for the borrower and good for the lender as the effective money transferred is larger than the nominal money. Making things worse, any deflationary period is also a depression - most of GDP is due to consumers purchasing, and as already pointed out deflations are triggered by sales declining. Which means that all things being equal our government prefers inflation to deflation.

So if everything were left alone, we'd see a longish period of deflation till income (cash or credit) once more balanced expenses. I'm not good at guessing but I can't see less than a year of this - with a long side of a decade. Ugliness indeed. And it's what we're looking at if the government can't inject more money.

The deflationists don't think money can be injected. After all, more credit can't be pushed, and wages have an intermediate step of getting the companies to pass it along instead of absorbing it as profits. So how, they ask, are we going to inject more money.

There are three possibilities. The first for you readers is my prediction - war. Now it could be done with an internal major project. And believe it or not I think that in the long run this would be the ideal fix -- pick a HUGE project that requires thousands (even hundreds of thousands) of employees over several years to accomplish, and pay them with new money. The Tennessee Valley project revisited. There are several very good opportunities for this - in fact, I think I'll write another post about them. But that's because I don't see them happening. Of course, the war isn't intended to solve that problem, it's due to other issues that are far less noble. But it's got the potential to work as well -- IF (and it's a big if) enough of the United States gets involved in receiving money from the government trough. If it's another 'war on the cheap', it's no help at all.

The second possibility for injecting money is to make more credit palatable. Most of the means of doing this are variations of 'debt relief acts' - credits or waivers or forced reductions or some such which have all been used in the past with varying degrees of success.

The third method is one I dread the most, and amounts to some sort of con game with taxes. My specific example of this is the FairTax (HR25) on which I've written enough already. While terrible for everyone in the long run, the immediate effect of its implementation would be to increase the size of everyone's takehome pay by a large amount. (It just leaves by way of sales tax - it and more, but again I've ranted long enough.)

The point is, while all the reasonable pointers are for deflation, the government would prefer inflation and has the means to force inflation for a little bit longer. Thus my prediction: deflation for a few months followed by severe inflation.

silver odd datapoint

So far it's just a peculiar datapoint, but it tends to support the position of certain hard currency fanatics.

I've been watching the daily numbers for silver on Kitco. An interesting pattern has developed.

Every day, between 10 and 11 am eastern (New York) time, the silver spot prices plunge appreciably - within a 30 minute time frame, and often inside ten minutes. Today, for example, it plunged from about $13.50 at 10:20 (a price it'd been orbitting for most of the morning) to about $12.99 by 10:50. Some days it climbs from the drop, some days it stays with the drop, and sometimes it drops further, but every day there's been a plunge near the 10:30 time.

Just something that's making me go "hmmm".

Nuke Proliferation Rules

Over on Balloon Juice, someone gave Fester a Coin of Wisdom that he spent on a post. I'm stealing his rules - the RULES he recommends for the age of nuclear proliferation:

1) The builder is responsible for the entire life of a nuclear weapon (passing a bomb off to a 3rd party for detonation against Americans does not allow the first party to escape retaliation)

2) The US, and other major nuclear powers have the capability of conducting isotopic analysis and determining which reactor produced the weapon and thus establishing ownership of the weapon.

3) The US, UK, France, Russia and China are willing to extend their technical assistance to upgrade command and control abilities as well as other confidence building measures to the smaller nuclear powers to reduce the risk of accidental release.

Look, as I've said before the cat's out of the bag for nuclear proliferation. The question isn't who CAN build a bomb, it's who IS building one - and with Khan's little game it could be just about anyone these days. So we need to have rules based on controlling what's out there, not on preventing 'those other people' from getting them. I like these.

nuclear fears

For what it's worth, I don't fear state actors aka nations and their leaders (at least for most states) getting a nuclear weapon. I fear the non-state actors getting them.

An amusing point to that is that I cannot see a state actor 'giving' these weapons to non-state actors. Not least is the danger that they'd threaten the giver at a later time with use.

See, as long as the weapons are in the hands of nations they are functionally tied to a MAD doctrine. Mutually Assured Destruction. Actually, for most of the smaller nations it's worse. Use of the weapon against most parties becomes Nuclear Suicide.

Seriously. Let's assume that Iran - to take a particular example - has five - or even ten - 1MT nuclear weapons available. It can pretty much cripple Israel, or it can hurt the US. What happens in return?

Why yes. The World's Largest Nightlight gets created just south of the Caspian Sea. Forces from around the world go in to ensure that the idiots willing to use nuclear weapons as a first strike never see the light of day, and the culture that allowed them to come to power becomes a footnote in history books.

And that is probably reason number one why North Korea hasn't used its weapons. I'm sure Kim il Jung has been tempted, but the end of the good life is a serious threat - and for Kim it's still a good life regardless of what it's like for everyone else.

Now, non-state actors aren't tied to location. Far too often they're not living the good life. The belief that they will escape the consequences has some basis for many of them. So yes, the thought of such agencies - be they corporations or political groups or terrorist groups or anything else - getting nuclear weapons can give me cold sweats. The only saving grace is that I don't see them getting it from a willing state. The surrender of THE weapon to someone out of authority requires extraordinary trust, so even those otherwise willing would be hesitant. Gas? maybe. Nukes and bio? ummm, not so much.