Have ya heard what's going on here in The (formerly) Golden State with gasoline? We've got a bit of a Perfect Storm going on here: Last month, a refinery in Northern California had a big fire, and is down for a while. Now, a refinery in Southern California is having some problems. On top of all of that, because we actually have two different kinds of gas here - a Summer Blend and a Winter Blend - and they were already in the process of dropping production as they switch over to the Winter Blend, we're getting hammered on prices and availability.
I saw gas jump on Wednesday by $0.10 in an 8 hour period. It's up another $0.30 since then. In some city down south, the price for regular is at $5.70 a gallon!
[sarcasm]Shockingly [/sarcasm] all of these problems can be laid on the doorstep of the pols in Sacramento. Since gasoline is evil - only toxic lead-laden battery-powered cars are welcome here - the state EPA hasn't allowed a new refinery to be built in this state in over 30 years. Yeah, 30 years. And since we have got to have this idiotic Summer or Winter Blend crap, if one of our ancient refineries goes down, we can't import gasoline from another state.
Since I still have the putrid taste of California Idiocy on my lips, I might as well make all of you non-Californians feel good about yourself and your state.
Many folks have heard about Berkey filters. These things rock. You can put polluted water (not just dirty, but polluted with insecticides, etc.) through these things and you get clean water out the other end.
Well, in California's quest to protect its fair citizens, they passed a drinking water law a few years back. Supposed to protect us against ingesting lead. Great.
So, the law says that anything that comes into contact with drinking water has got to be certified and approved by the state. Berkey contacts the state and tells them that not only don't any of their products contain lead, they don't contain ANY metal, so they'd like an exemption from the law.
Surely you jest, said Da State!
The state wanted something like $2500 per product for a testing fee, plus ongoing fees and all kinds of crap.
Berkey, to their credit, told the state to shove it where the sun ain't golden. They stopped selling these top-of-the-line, literally life-saving products in our state because of the red tape involved.
I don't blame them one bit (BTW, I just pick up new filters whenever I'm in Nevada or Oregon. They appreciate my business).
Fast forward to the past couple of weeks. I was going to buy one of my brothers a fancy air filter. It's actually not a filter, it uses ions to attach to the stink in the air, and it goes away. Quickly.
I called up to order, and they told me ...... can't sell in California because of some state EPA regulation they're not going to try and fight.
Literally 10 minutes later, I was on a website looking at sleeping bags. Great coldness rating for a great price. There was a little note at the bottom of the page: Can't sell in California because of their specific BEDDING laws.
Lord, give me strength.
Then today, I got an email from a surplus site. They were having a sale on military gas cans. I almost couldn't bring myself to look, but there it was. "Not available for sale in California". Wow, what a shock.
Are the pinheads in Sacramento REALLY surprised that native Californians are fleeing in droves? Businesses, too. Comcast Cable just announced 1,000 jobs leaving the state. Campbell soup just announced the cutting of another 700 jobs, and the closing of their plant that's been around since 1947.
Salmonella scare. We've had a couple of back-to-back outbreaks.
Tainted Peanut Butter in 19 states.
Tainted melons in 26 states that resulted in 3 deaths.
These are Government Inspected facilities, right? OK, just checkin'. Must be government approved salmonella then...
It all gets back to Regulation vs. Operation. A food regulator would require labeling, for instance. "You are buying raw milk. Some believe that unpasteurized milk has a higher incidence of making you sick." You don't tell people what they can buy or sell, but you can require a business to disclose what's in their product. Grass fed beef vs. corn fed. Genetically modified fruits, veggies and meat vs. non-GMO.
When you have government approve a product or service - as it is doing when it certifies that it has inspected a food plant - the consumer always loses. You've taken the responsibility from the owner for the quality and safety of the food being produced and transferred it to the government.
I can hear it now, "So, you libertarian piece of crap, you don't want the government inspecting your meat, dairy and vegetables? You want to go back to the Stone Age of food safety?"
Nope. I want private industry to perform these quality tests.
Back in the day when I was in banking, every year we had an external audit. A CPA firm would come in, look at our books, and certify that everything we were stating to our shareholders was true.
If after certifying us, it later became evident that we were cooking the books, and the value of our stock was actually lower, the CPA firm was financially on the line. THEY would have to come up with money to compensate our shareholders for their sloppy audit.
Since they had a potential financial liability, they checked and double-checked our financials, procedures, policies and practices to ensure our audit reflected our true financial condition,.
When the USDA or FDA lets salmonella-tainted food enter the marketplace, who in government is held accountable?
No one. So why do we need them? To maintain the facade of having a safe food production process?
The regulators should simply produce law that states that any third-party certification companies may not have any financial ties to any company they certify. Just like CPA firms.
Food producers would then have to make the business decision as to whether or not they wished to be certified, e.g. being UL Listed. Consumers would then be able to determine from which certified and uncertified companies they wished to make purchases.
Have you seen the movie, Food, Inc.? If not, see it as soon as possible. It makes the whole, "getting back to nature, grow your own, be one with your local community" prepper lifestyle make a whole lot more sense.
Seriously, if you have family members that scoff at your self-sufficient lifestyle, invite them over for a screening of the movie. If they're not full of questions and at least a bit interested, move on. They're hopeless.
The Dodd-Frank Bank Protection and Government Enrichment Act may REALLY be rearing its ugly head in the next couple of months.
Part of the Act was a provision that companies holding derivatives will be required to hold high-quality assets as collateral in case the derivatives go sideways.
On the surface, it sounds like a good idea. But whenever you have the government operating business instead of regulating, you get snapped in the ass.
It seems things may go off track for two reasons. First, the derivative market is in the $650 TRILLION range. Big, ugly number. One of the authorized assets to be held are US Treasuries. Oops. There are only $11 trillion worth of them.
Obviously, everyone wanting to buy Treasuries on the secondary market won't be able to get them. BUT, those that are sold, will sell for a premium. That means that the yield on the Treasury will decrease (you're paying more for a fixed return). This phenomena in turn, will be reflected in the market when the Treasury sells new bonds. Everyone's gotta get 'em, so Uncle Sam doesn't need to pay as much to the buyers.
Nice scam if you can get it. You get to set the market regulation, and it just coincidentally funnels lots o' bucks your way. Sweet deal.
The second snap o' the buttocks is with banks. They hold a ton of this stuff (somewheres north of $140 trillion). One of the other acceptable assets is cash. So the banks will have a decision to make: Use your cash reserves as collateral for your derivatives (OMG! Fiat currency securing gambling tokens), or lend the money to your customers and buy the limited amounts of Treasuries by borrowing more money from the Fed.
The banks have already shown they're in no mood to lend money to anyone
In one fell swoop, a government regulation simultaneously lowers the return people will make when buying Treasuries, and also constricting the amount of money available to the few banks that want to lend.
And you didn't think you'd be affected by the derivatives market. Silly you!
Oh. No, I'm not pissed that the cost of borrowing for the government will go down. Less money coming out of my pocket and going to Nanny is always a good thing. What I'm pissed about is that this BS regulation - white washed as a way to protect every-day Americans - is nothing but a way to require companies to pay Uncle Sam.
On a personal note, I'll be gone for a week or so. A buddy and one brother are headed up to Eagle Lake in Lassen County.
This lake is only open 6 months out of the year, and contains the coveted Eagle Lake Trout.
I am NOT one of those catch-and-release fisherman. I'm a catch-and-eat fisherman, and I hope to have a belly full of this special trout all of next week!
I'm going to try and pre-load some posts, but no promises.
Copyright 2012 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com