The Economy Guy

Oil and Gold and Iran……

A little history – back in 1973, Nixon made a pact with Saudi Arabia that the US would protect Saudi Arabia from the Russians or others, if the Saudi’s would sell oil using ONLY US Dollars.  They agreed, and by 1975, all OPEC nations were using US Dollars.  These nations took their Dollars, and invested them in US Treasuries – so these Dollars percolated back into the United States – along with all the money from other nations buying oil.

This provided a great coffer of money in the US Treasury, and allowed the US to somewhat control the price of oil, as the US controlled the value of the US Dollar.

As time went on, the price of oil increased, and the use of oil increased around the world.  The money poured into the United States, as the oil producing nations bought US securities.  All of this supported a strong US Dollar.

What’s happening now……

There are several bilateral deals being cut to price oil in other currencies – local currencies.  Even more interesting is a “rumor” that India cut a deal with Iran to price its oil in “gold,” and the deal is being brokered (banked) through a Turkish bank.

If the Dollar is not used for oil purchases, the Dollar will weaken, and weaken quickly.  The world won’t need those Dollars that are floating out there, and greasing the oil purchases today.

Did the US go to war in Iraq to protect its oil supply?  That’s what people say, but perhaps the US goes to war to protect the “petrochemical system” that props up the Dollar.  These go hand in hand.  Isn’t it interesting that in 2000, France convinced Saddam Hussein to sell its oil to Europe for Euros?  That was a blow to the Dollar, and that was the beginning of the end for the Dollar – but no one knew it at the time – at least not the public.  The invasion of Iraq finished off that foolishness for the next decade.

But, the US Reserve Currency system is under attack again today.

Iran has lots of friends around the world who need the Iranian oil for various different reasons – Greece (because the Iranians will sell oil on credit), Venezuela (who have some joint projects with Iran – like a new bank creation), India, China, etc.  Many of these countries are not “friends” of the US, and would like to see a weakened Dollar.

If this hypothesis is correct, then the chain rattling in the Straits of Hormuz has everything to do with the idea that nations want to NOT use the Dollar for oil purchases.  That is thought provoking.

My conclusion…..

Gold continues to solve many of the problems facing your personal investment decision.  Gold would only benefit from a devalued Dollar.

Thought you might like to think about this.

European War Chest…….

The Europeans have the EFSF – the European Financial Stability Facility – and it is a promise of an amount of money from each of the EU nations.  The EFSF will morph into the500B Euro ESM – European Stability Mechanism – sometime in the future.  The EFSF has a definite ending date, so it can’t last forever, and the Europeans need something in the “forever” category – to give people confidence.

Christine Lagarde, the head of the IMF, just said that the EFSF needs a date for when it will move (an additional 500B Euro) into the ESM, and the sooner the better, and it needs MORE money.  The purpose of these funds is to provide a “firewall” between Greece and the other nations – specifically Italy.  However, it is obvious to the most casual observer that the EFSF doesn’t have enough to bail out Italy, let alone Portugal and Spain and whoever else.

The German Finance Minister said this weekend that increasing the ESM is not under discussion – in other words, it is not politically correct for Germany to agree to any increase.

The reason that the IMF, with the US being the biggest contributor of its funding, has its nose in this issue is that it provides about 1/3 of the money for all the past bailouts – like Ireland, Portugal, and now Greece.

Where does this money come from……

Now let’s use some pure logic and talk about these big numbers.  The money comes from the nations in the EU, and they are “promises” only.  That means they are not real until the need to use the money happens.  Then what?

Then, the nations have to put up the money – they actually have to lend the money to the EFSF or EMS – and put that money on its fiscal books as a loan.  My first point is that more lending is not the way to solve the problem of too much debt. (It’s like solving a alcoholic problem with more alcohol.)  My second point is that every European nation suddenly looks “weaker” in the eyes of the rating agencies, and on its fiscal balance sheet.  Where does this money come from?  Will the nations have to tax more, or spend less to create the money?  I doubt it.  I think they will just carry the money on their books, and sigh.  It will be explained away as an “extraordinary” expense that will somehow, someday come back to it.

But, what if it doesn’t?  What if it’s lent to Italy, and then Italy leaves the Euro and defaults on the debt?  That’s a good way to drag all of Europe down the sewer with the Greece’s of Europe.

No nation is immune.  While Germany was spared from the rating downgrades of S&P, it was not spared by another rating agency last week, when it was downgraded one notch because it was supporting so much of the European debt.  France is spending way too much money on its government employees, and is having a major unemployment problem at the same time.  All the nations are in contraction (recession.)

My very strong belief is that Greece will not default this time around, and will be bailed out by the EU/ECB/IMF.  But, later this year, Portugal will raise its hand, and say that it needs the same “voluntary” downgrade of its debt, and another bailout.  When that happens, Ireland should be the next to raise its hand.  Somewhere along this story, the idea of a country leaving the Euro will be “seriously” discussed by the European leaders – as they look over the cliff, and don’t want to fall down there themselves.

What does this mean to you…….

The US is bailing out Europe in so many ways.  We had the “swap agreements” where the FED “loaned” the ECB an unlimited amount of money – and the ECB gave the European banks 600B Euros worth of it.  That was ALL US money.

Any IMF loans include US money – and a lot of it.  Greece, Portugal, Ireland, and now Greece again – all have IMF money included in their bailouts.

If Greece or any other nation actually defaults, the banks of Europe who hold that debt will be bankrupt immediately as their nations allow European banks to leverage their reserves by 30 times to 40 times.  So, a small default on any debt held could easily wipe of the entire reserve amount – and cause bankruptcy.  Then, there will be a massive loss in the US banks – by payout of “debt insurance – credit default swaps” and loss on any European sovereign debt held.  The FED would come to the aid of these US banks – and guess what, YOU get to bail them out again.

There are an unlimited number of ways that the FED can spend your money – and you will pay in the future through increased inflation.  Even the Federal Government may feel sorrow for Europe and spend real taxpayer money out of our fiscal budget – thereby increasing our deficit.  Doesn’t that give you a warm and fuzzy feeling?

More on Greece…..

The European leadership made a very big mistake early during the Greek crisis – about 2 years ago – and thought that Greece was having a liquidity problem (not enough money) and by lending them money via a bailout, Greece could work their way out their problem.

Then, they got smarter, and understood that more money doesn’t solve the problem, and they thought (now think) that reducing the total Greek debt (through a voluntary default – bankruptcy) and providing more money through a new bailout and having Greece reduce spending through a severe austerity program, then Greece will be able to work their way out of the problem.

In the background, the European leaders understood that a Greek involuntary default would decimate the European banking system, so the leaders became committed to “helping” Greece – and they also had the ECB give that 600B Euro liquidity injection into the European banks to bolster them.

But, the European leaders have got it wrong again.  You see, the current Greek plan won’t work.  Greece will default in the future.  Why?  Because they are;

1. contracting in their economy;
2. spending less by the government
3. decreasing their exports as they are not competitive with other parts of Europe.
   

You cannot do all 3 of these at the same time, and survive.  It is mathematically impossible.  So, Greece will come to a bad end, and the current actions regarding Greece are only “kicking the can further down the road.”

Politics, Morality and Ethics…….

In 1947 the US Government brought an Anti-Trust case against the big banks – namely Morgan Stanley, Goldman Sachs, and 15 other ones.  It was alleged that these banks colluded to fix prices in investment banking.  They were charged with keeping others out of the market so they could take the cream of the investment banking business, and started colluding in 1913.  These big banks set prices for underwriting securities and providing M&A services.  The big banks put their partners on the board of directors of the client companies – thereby insuring all business came to them.

Naturally, this went through the courts.  In 1953, a judge overruled the government and said the government only proved its case through insinuation and rumor, rather than proof.

These big banks have continued their cartel activities from that date to now.  There are fewer big banks, but they act the same way.  When an M&A activity occurs, it is priced using the “Lehman Bros formula” – even though Lehman Bros is long gone.

As you all know, there is too much self interest in the workings of our government, and no one appears to be working for the common man (and woman).  The Dodd-Frank bill did not solve anything – as the same problems the brought down the US economy in 2008 could happen again today – with no laws or government agencies standing in the way.

The more things change, the more they stay the same.

This is the end of the history lesson.

I conclude that you must protect yourself.  Do this through knowledge and insight.  Protect your wealth, and grow it by assessing the risk of each and every investment.

The End of the Sewer Project……

I am going to go out on a limb right now, and say that this sewer project will be absolutely complete this coming Monday.  I can say that because all the holes are now completely filled in and concreted over – and the only thing left to do is to remove a barrier stopping pedestrians from walking on the now dried concrete.

One of those big spots is filled in with two different colored concretes – one color is beige, and the other color is grey.  Now, why would the sewer people use two different colors?  Do they anticipate the sewer to leak again, and to stain the beige a little darker?  Only they know.

One other complaint.  They didn’t put back those pavers that they removed from the sidewalk in the first place.  So, now the walkways is both pavers – the original ones that weren’t moved – and concrete laid flat in two colors.  Perhaps it looks better in French – les deux couleurs.  I guess not.

The New Restaurant…..

Today, I will relate an adventure at a new restaurant – new to me, and new to the town of Antibes – only two months old.  To find this restaurant, you need to be lost in the alleyways of Antibes, and it would help if you had a lot to drink too – as you have to find this place that has no sign outside.

You see, according to the proprietor, she spent 4 months filling out paperwork before she could open the place – and have inspections, etc. – and she has been open for 2 months – and next week, she will get permission to put out a sign – only 6 months.  I don’t think the sign will help, as you must be lost to see the sign in the first place.

The restaurant consists of a single table – fascinating isn’t it?  The table has 10 seats – so you are eating family style with the other guests.  The restaurant serves soup.  In fact, it turns out she serves 3 different soups, so you have a choice.  Wine is cheap – and is good according to the owner.  I agree.

If you are sitting in the seat I was sitting in, you didn’t see the menu on the wall behind me.  My wife saw it, and said I should try the entire menu – 3 courses starting with soup, then a charcuterie or fromage dish, and then desert – all for 7.50 Euro.  All the food is freshly made on the day – except the charcuterie because they killed those animals a long time ago – and the cheese was prepared a long time ago because it is “aged.”  Otherwise, it is fresh.  No sugar in the desert – as it was made with honey and fresh apples – a kind of an apple pie without the shell – and no seeds either.

Archeological Site…….

From lunch we went over to see our friends who own a great restaurant called La Forge.  They have been closed for the past few days as they were demolishing a wall at the back of the restaurant.  They  wanted to expand their restaurant – knew there was a space behind that wall – and didn’t know anything else.  They had to get permission to knock down the wall – as the last person to see that space is now dead.  The space was built by the Romans – so it falls into the category known as “old.”

They had a small backhoe inside the restaurant to move the boulders that came out of the wall they dismantled.  I now think that a backhoe is an essential tool for all French projects.

We saw them working one night, but couldn’t spy all the way into the hole, as there was so much dust in the restaurant that you could only see past the first few tables – and not all the way to the bar – the essential part of any French restaurant.

They started cleaning the dust out of the restaurant last night – and they did it a second time today – as the dust keeps settling.  Those Romans must have been very dirty people.  Here is a photo of the finished hole in the restaurant.

I was hoping for Roman coins, or a nice statue of Venus, or perhaps some shields and swords – but, as luck would have it – none of that was buried in the wall, or in the room behind the wall.

Well eat there tonight – so perhaps there is much more to tell.  Perhaps there is some old Roman wine to enjoy. Or an old pizza.  Did the Romans invent the pizza – I don’t remember.

Antibes Today…….

For those of you who think I am joking about the great weather here on the Med, here is one from today:

It shows the local beach just steps from our apartment, and the Med with sailboats behind it.

Here are the closing statistics from Friday for our key indicators (01/20/12):

FINCON = 2

DJ30 – 12,720   up 97
US Treasury 10 Year Bond – 2.03%    up 0.06%
USDEUR  -  1.2935
Gold – $1658  down $4
Oil – $98.15   down  $2.24

Stocks were up for the week a very large 300 points as the markets assumed the Europeans were solving their problems. Bond interest rates were up a large 0.20% on the week.  The Dollar fell and Euro gained about 2.5 cents on the week.  Oil fell about $0.15 on the week – sideways.

Gold continued its technical climb upward, and is now $104 price at the start of the year.

Roundup of the Week’s News…….

In Europe, there was no progress on the Greek bond talks, other than talking, regarding the Greek crisis.  The talks dragged into the weekend – so we must wait for the results.  Everyone (including myself) is assuming there will be an agreement, and a compromise will be reached.

Here is what is being proposed.  The Greek government will only give the bondholders 50% of the face value of their existing bonds, and will replace the remaining 50% with a new 30 year bond paying 3.5%.  If the bondholders calculated the market value of the “new bond”, they find it is worth much less than its face value – the end result is they would be taking about an 85% haircut on their original bond investment – one that everyone thought could never default – except me who has been saying the Greek’s would default 3 years ago.  They are extremely angry over this result – as the exact, same bond held by the European Central Bank will receive 100% of their face value (rather than 15%) – and for some reason, the bondholders think this is “unfair.”

This deal would eliminate 100B Euros from Greece’s 350B Euro total debt – supposedly making it easier for Greece to pay back the remaining 250B Euros.  The deal must be reached for the EU/ECB/IMF (the troika) to approve a 130B Euro new loan to Greece – and the bonds being negotiated come due in March 2012 – so the new loan is needed now, or the repayment can’t be made – and Greece would default – kaboom.

European leaders want this agreement very badly, so lots of pressure is being made behind the scenes.  Here is what could come out of the debt talks:

1. The 3.5% interest rate on the new bonds could easily become 4.0%.
2. The ECB held Greek bonds could be cut too – interesting!
3. The bondholders could receive EFSF bonds, in addition to the new Greek bonds – so the deal is sweetened – and this smells like a deal with the ECB.
   

It appears to me that the bondholders are holding all the aces for sweetening the already bad deal in this high stake poker game – and they will win the hand.  I wonder what other concessions they might receive.  By stringing the negotiations out, their hand becomes stronger and stronger.  The bondholders can’t be too greedy, or the Greek’s will just default, and they will get 0% back.

G20 Talks in Mexico…….

The G20 wants to help the IMF raise $600B additional money in its already existing $600B bailout war chest, and needs the Europeans to agree to it.  Earlier this week, Secretary Geithner said the US would not add to the IMF money.  It is not obvious how the Europeans can afford this additional money – but if you look at it as just newly printed money, there is no problem.

In any case, why would we want the IMF to have more money?  Who are they going to bail out?  The Portuguese?  The Irish?  The Italians – impossible, of course. Etc.  This is a major power grab by the IMF, and many governments can see that by giving the IMF the power to dictate the terms of new loans – they can be left off the hook of any austerity measures.  David Cameron, UK Prime Minister, said he would support the IMF increase in bailout funds – and this is about $25B for the UK – where do they get the money?  Same place – warm up those printing presses.

But the US already bailed out the European banks with its new swap agreements that has resulted in 600B Euro loans to the European banks – and allowed those banks to buy new sovereign debt.  In effect, the US is bailing out Europe – again – all by itself.

Keystone XL Oil Pipeline……

President Obama decided to NOT build the Keystone XL pipeline, and has blamed the Republicans for not allowing him enough time to make a decision.  Naturally, the Republicans want to make this an issue during the election – and Obama has given them the issue.  The result of this decision:

1. The pipeline won’t be built, and a LOT of jobs are lost – some say 44,000 jobs, and some say 30,000 jobs – I don’t care, it’s a large number.
2. The pipeline won’t be able to do any ecological damage, or spill any oil – because it won’t be built.  One for the Democrat supporters.
3. The Canadians (where the oil originates) will be building a pipeline to their west coast, and selling that oil to the Chinese instead of Americans.  That should make you sort of angry.
   

You see, America could permanently lose a major source of oil from Canada for a long time as long term contracts would be signed with the Chinese.  Is this the type of oil independence (from the Middle East) that Americans want to have?

So, we have a real debate on our hands.  Is it better for Americans to have a “clean” America (even though it is covered with existing oil pipelines that don’t leak today – I haven’t heard of any leaks), or is it better for Americans to become energy independent?  The answer to this debate will have an outcome in November – so we will have to wait and see.

Remember – vote soon, and vote often.

Antibes Adventures……

By now you’ve guessed or perhaps wondered, if I’ve been exaggerating a few things about the French sewer project! How could one of the most famous resort areas on the Riviera, the one with the million dollar yachts, the 14th century fortress, and the perfectly manicure Monaco nearly next door, put up with such nonsense you might ask.

Well, perhaps I did exaggerate a few points, and now that the sewer is peut-etre coming to a close, I feel I must set the record straight and move onto another episode of la grande vie in France. The truth is that there were some smells in front of the restaurants for a few days. And also that heavier smells were wafting into our apartment one night when the work first started. But then, it is our choice to sleep with the window open! It’s also true that numerous trucks and men in turquoise uniforms grace the sideway across the street from our apartment daily from 8 am, and that the gorgeous woman in the white jumpsuit did appear in the hole with her computer. However the smells did die down after the first couple of days, if the truth be known! Fear not, I will keep you appraised if and when something noteworthy transpires on that exotic front.

Here is the actual project at the beginning of the work. Right behind the backhoe is a restaurant – and I bet you would love to eat out on the sidewalk there – and smell those great smells.

The project is coming to a completion – so I can confidently say that it will definitely be completed in 2012.  They are filling in the holes with gravel – not that beautiful dirt that came out, and they are putting a new manhole cover right over the spot where the trouble was in the first place.  This is like closing the barn door after the horse has bolted.

In the meantime, we’ll move onto a subject evermore more serious for the French – food. Note the photo on the front page of the all important journal ‘Le Figaro,’ which I’ve attached for you to feast your eyes upon – Olives, olive pastes from numerous regions, garlics – not like the ones you’ve ever eaten. These are marinated for 4 to 5 months – yes, months, not days – in salt water to remove the garlic taste, then delicately finished off in olive oil and herbs. Delicious! No kidding. And there you see it on the cover – Antibes – our town – it prominently announces, ‘Les meilleurs produits, nos bonnes adresses!’ The best products, our favorite places. I wish I could tell you that the man so adamantly expressive in selling garlic on the cover was our local garlic seller, Thierry, but alas it’s another. The market, however, is authentic, and if you look down the right side about half way where the red sign appears, you’ll see the restaurant where my wife and I often have our ‘menu et desert’ for 12 Euros at lunchtime, or people watch at night over our vin chaud – all 50 steps from our front door, and yes, 30 steps from the sewer project. Note that ‘Le Figaro’ makes NO mention of the sewer project in their feature article about Antibes. Huh! It seems that only the EconomyGuy readers have access to such classified and noteworthy news.

Tonight we went out to another of our favorite restaurants, and I had a great experience.  A woman invited me to come to her apartment with her.  It’s okay to tell my wife – because it was her.

Here are the closing statistics from Friday for our key indicators (01/13/12):

FINCON = 2

DJ30 – 12,422   down 49
US Treasury 10 Year Bond – 1.85%    down 0.08%
USDEUR  -  1.2660
Gold – $1640  down $5
Oil – $98.70   down  $0.40

European Downgrades……

The news of Friday the 13th was the Standard and Poors downgrade of a whole bundle of European nation’s debt.  Here are the headlines:

1. France and Austria both lost their AAA credit rating, and were downgraded one place to AA+.
2. Italy, Spain, Portugal and Cyprus all downgraded two notches.  Italy is BBB+ (the same as Kazakhstan), and Portugal is now “junk” status.
3. Malta, Slovakia and Slovenia were cut one notch.
4. No change (status affirmed) for Germany, the Netherlands, Finland, Belgium (amazing in my mind), Luxembourg, Ireland, and Estonia.
5. All European nations, except Germany, is put on a “negative outlook” for further downgrades.
   

The big news was that France lost its AAA rating, and therefore, the rating of the EU bailout fund, the European Financial Stability Facility (EFSF), which includes France is now in jeopardy of losing its AAA rating.  In my mind, it already has lost it.  In addition, Sarkozy is now fighting much harder to win the election for President of France in 100 days.  (His opponents say that now France is one place lower than Germany, its neighbor, and that is a disadvantage for France.)  The first reaction from France was “Why didn’t the UK get downgraded?”  Sounds like a spoiled child to me.

The surprise was Austria losing its AAA rating.  Austria has been hiding in the shadows, but S&P looked at their books, and came to the conclusion that they were not as stable as everyone thought they were.

So, starting today (Monday) in Europe, the situation is:

1. Downgrades of a major EU nation – France – jeopardizing the EU bailout fund – the EFSF.
2. Europe is in a recession
3. Greece said Friday that it’s talks with creditors was broken off  - as progress coult not be made – jeopardizing the Euro, as Greece would depart the Euro if the bailout of Greece cannot be agreed.
   

Not a pretty picture for Europe.

The leaders of Europe (Merkel and Sarkozy) said they would work hard to get the new EU rules in place, and push forward with saving the Euro.  Blah, blah, blah….

The Greek negotiations on their bond holders taking a 50% haircut is taking a well tread path of “brinksmanship”.  I believe it will result in some sort of settlement, but both sides have strong hands:

1. The Greek national bank says they will leave the Euro if they don’t get agreement.
2. The bond holders say its “unfair” that they take a hit, but the ECB doesn’t take any hit. (And, I agree with them.)
3. Both sides are angling for the actual interest rate to be paid on the new bonds to be issued as replacement of the existing bonds.
   

Conclusion:

I don’t think much will happen because of the downgrades.  Interest rates are supposed to rise when ratings are lowered, as the risk is higher, but I doubt France will have to pay more interest because of the downgrade.  The US didn’t pay a cent more interest because of its downgrade.  Italy is a different story, and is the center of the “bond vigilante’s attack.”  That is the place to continue watching.

The Greek negotiations will undoubtedly come to an agreement of some sort – as there is tremendous pressure on all parties to compromise.

This is just another step in the long saga of the ultimate collapse of the European debt, and the European banking system as we know it.

Iran…….

We have been waging an asymmetric, unconventional war against Iran.  I have been thinking about Iran and what’s going on for quite a few months, and thought it would be timely to discuss what is actually happening.

Here is what the US (and Israel?) have been doing:

1. More sanctions against the Iranian national bank – resulting in a 30% devaluation in Iranian currency in a single day.
2. Two US carrier groups coming to the Gulf – one of these groups replacing an existing carrier group going home for r&r.  Net increase of one carrier group.
3. Iranian war games in the Straits of Hormuz – carefully watched and avoided by US ships.
4. US – Israeli war games
5. Israeli integration into EUCOM – European Central Command for US forces.
6. The EU agreed to reduce imports of Iranian oil
7. Japan agreed to reduce imports of Iranian oil
8. China told Treasury Secretary Geithner to leave town, and refused to reduce Iranian oil purchases.
9. Computer virus sent into the Iranian nuclear facility to destroy the centrifuges.
10. In addition to the Israeli anti-missile systems, the US has place Patriot and THAAD anti-missile systems in Israel and the Middle Eastern nations.
    

The Iranians on the other hand have also been busy.

1. the Iranians are boasting that they are refining nuclear material at a second site.  Great for those who want to build a bomb.
2. Also, one of the Iranian nuclear scientists was assassinated this week – and this is a long list of assassinations (or accidents?) that have happened for those poor souls who work on the Iranian Nuclear bomb.  I wouldn’t want that job.
3. Last year, more nuclear scientists (accidentally?) died – including Russian nuclear scientists.
4. The Iranians have performed many military exercises including one in the Straits of Hormuz – plus long range missile launch exercises.
5. Gaining agreement with Chavez of Venezuela to stop oil exports to the US if an embargo is started.
   

Ask yourself (put the shoe on the other foot) – what would you feel like if another country was trying to shut down 50% of our exports?  That is exactly what we are doing to Iran – ever so slowly.  I imagine we would not be happy, and we would figure out something to defend our sovereignty.  That is probably what the Iranians are thinking too.

What does all this mean?

To me, it means we are walking down the decision tree path to bomb Iran as the Iranians eliminate all peaceful alternatives  to war.  We are in a non-declared war with Iran today, but it isn’t a war fighting war.  However, we could be much closer to sending our war fighters in.

The interesting part is that we are coming to an agreement with Israel where they don’t bomb Iran (thereby removing a reason for Iran to bomb Israel), and the US bombs Iran instead.  A coalition of Middle East and European nations would be established to give the measures some legitimacy.

What would an attack by the US look like?  First of all, it would be after hyper-inflation is wafting through Tehran, angering the people. The attack would be by air and the targets would be:

1. military airfields and aircraft
2. missile batteries
3. coastal defenses
4. the power grid to command and control centers
5. the nuclear power sites
6. naval bases
7. key anti-aircraft sites
8. key military storage sites
9. The power to the big cities
10. Avoid the population as much as possible – and create a propaganda campaign against the Iranian leadership – and encourage a popular uprising.
    

The military actions should take about one week.

What would an Iranian action logically be?

1. Block the Straits of Hormuz with many, many sea mines.
2. Launch mini submarine attacks on commercial ships if the sea mines fail to work.
3. Make all the commercial vessels so uncomfortable that they choose to NOT go through the Straits.
4. Defend itself against any bombing campaign.
   

If any of this hypothesis is correct, then you should look through all the news releases and see if we are massing Mine Sweepers in the area.  That would give you a better timetable of any possible action.  There is no way we would start a real war with Iran without those being available.

The Sewer Project – continued…….

There is so much excitement surrounding this massive sewer project going on in Rue Aubernon in Antibes.  As the newspaper said, “cette operation est complexe pour several raisons.” I have made several forays into the wild winter weather (about 60 degrees F and sun shining brightly) and crossed the road to see what is actually happening. I disguised my investigation on the pretense of going to the patisserie, the requisite French shopping bag under my arm as proof. Here are the results of my investigations.

The second hole is now pretty big – let’s say 6 feet long, 3 feet wide and 5 feet deep.  Unfortunately, the city of Antibes must have run out of money, as the second hole is not covered by plywood like the first hole each night.  Why this difference?  Had they abandoned their concern over dogs and children falling in, and decided to let them join the fate of the cats? Was it the lack of money – or perhaps they ran out of time to cover it before the bewitching hour of 4PM.  The work is continuous each day and more dirt is being taken away each day – as they wouldn’t leave that rich dirt laying around for anyone to use in their vegetable garden.

Today however could be a turning point, as my wife so astutely pointed out. You can remember that the key workers – the diggers – wear chartreuse colored uniforms.  You can see one of them in the photo shown yesterday in the newspaper article.  Also at the beginning, we found that bright red (or rose) colored uniforms meant that the person was authorized to go into the very dangerous area of the  manhole.

But today there was a new uniform.  A white jumpsuit, very impressive like a clean room uniform from the space program.  And even more amazingly, the person wearing this immaculately clean outfit was a woman.  Indeed, an attractive woman. That explains why the uniform was so clean. The men in the chartreuse uniform were given her their full attention.  She was on a ladder down a short distance into the primary hole, and brought with her a computer with very sophisticated software.  She was analyzing something in the hole with her computer.  She left without saying anything to me.  My mind is racing, trying to figure out what she was analyzing.  Could it have been an old Roman excavation site?  I doubt it.  I think she was just verifying that the shit was really shit.  And, I can emphasize from the past smells, that her analysis was entirely accurate. And that according to my wife, is the turning point. A woman to the rescue!