good car modification

Keep your Gold and Silver juniors for inflation part of the future and search for pockets of growth in stagnation. We are cynical, but there is the edge and we are too close not to take notice. Picture is too bad to be worst - after last March call we have never been short. Half of the New Deal is to keep Dead Banks Walking - financial system will be protected with insolvent banks' balance sheets with waved mark to market, now is time to bring money velocity back and make credit flowing. Deflationists do not take into the account the power of government and that credit could be given directly to consumer passing the insolvent banking system in the form of Tax Cuts, mailed tax rebates and other incentives.

Clean Energy is the only chance to stimulate economy and bring high tech manufacturing base which will create wealth again. Currency will be destroyed in the end: there is no way to repay all obligations without default, but we need to think already in a different terms - how for society to survive.

U.S. has already became a broken state with a record number of its citizens on the food stamps, now the only chance left is to protect its core - middle-class from total extinction.

You can play all day long with guys from Wall Street, but without middle-class America will shrink to the size of NYSE very fast. Middle-class is the last productive force in the falling apart society, it is under constant threat of rising taxes, debt and unemployment. It is the only part of American society which made it the land of "freedom and prosperity". Middle-class has families, was buying homes and cars before and is filling restaurants and shopping malls. Middle-class are people who are smart and educated enough to produce goods and services with added value, but who has to take only part of it in form of salary, leaving to the State its cut in the form of taxes and to State owners its cut in the form of profits. Usefulness of the middle-class for the State can not be overemphasized - if we can, we would put a middle-class statue right in front of the White House in order that nobody forgets who holds this society intact. Who would buy all those houses, cars and shares if we lose such an asset? Who will be taxed on its income, which you can not hide? Try to build an economy with Bill Gates selling shares to Warren Buffett and vise verse. How can you justify a bailout if nobody apart from Wall Street guys has any accounts in the banks? Situation is getting very tricky. On another hand find a magic: free it from its debt, negative equity in its largest investment, adjust its cash flow and they will shop again till they drop keeping society intact. We are encouraged to see that Obama is moving into this phase.

Where are electric cars in all this pretty bleak picture and why do we need to pray to get it?

First, why we can not live without Electric cars.

Dealing with the first part of the problem - saving State owners and Keep Dead Banks walking Inflation was out of the bottle with every created US Dollar. It was desirable effect - it is the only way to inflate obligations away. It will bring nominal house prices back, erase negative home equity and make those banks walking dead close to technical solvency, when middle-class will be allowed to service its debt further. It is first part of Status Quo. We have a small technical side effect here - with debasement of local currency, US Dollar this time, Oil price is going up strongly above 100 USD/ barrel. There are some estimations that in 2008 US Corp has transferred more then 600 billion dollars in payments for Oil in a largest voluntary wealth transfer to a number of not so democratic and friendly states around the world. There are some rumours that maybe even some wars were fought actually for the right to pump the gas in the car. With oil above 150 USD/barrel middle class stop shopping and with oil above 250 USD/barrel it will freeze to death during Kondratieff Winter. With California close to bankruptcy price of protection for Ocean Ways for Oil to flow even at this prices will be too high. World Police function will have to shrink in order to protect Home.

Second, why do we need to prey for Electric Cars?

Car is the second largest purchase after the house for the middle-class. It is never really an investment in contrast to the house (according to the logic before the Crash - house was an investment). Electric cars allow to sell the second biggest item in the household "second time". Family gets an instant cash flow adjustment with electric cars economics: 2.5 cent cost per mile against 12 cents in conventinal vehicle (CV). Government gets the way to send money to consumers to fight Deflation Death Spiral and take it away in the value chain, hopefully of domestic production cycle. Way of doing it - stumulus for production in order to bring prices down, like today, and direct Tax Rebates on purchaces of EVs - already in place. With GM Volt battery strategy price for EV could reach very fast the same level as for CV, in this situation Electric Car could become an investment in household balance sheet as it will be producing "an alternative income" relative to cost of ownership of CV. Here is our "adjusted" cash flow.

Third, why do we think it could happen at all?

About it Obama, below:

CNBC Video

Obama Debuts Clean Energy Tax Breaks, Talks Jobs

By: Reuters
President Barack Obama unveiled a $2.3 billion tax credit Friday to boost jobs by promoting clean energy, as new data showed the country's unemployment rate remained stuck in the double digits.
Obama said the credit, from funds earmarked under a $787 billion stimulus package he signed last February, would create 17,000 U.S. jobs and be matched by an additional $5 billion in private capital.
"Building a robust clean energy sector is how we will create the jobs of the future, jobs that pay well and can't be outsourced," Obama said.
"This initiative is good for middle-class families. It is good for our security. It is good for our planet," he said.
High unemployment is one of Obama's most pressing domestic challenges and a monthly payroll report released Friday served as a reminder labor market conditions remain grim. U.S. unemployment was unchanged at 10 percent in December, while businesses unexpectedly shed 85,000 jobs.
"The jobs numbers that were released by the Labor Department this morning are a reminder that the road to recovery is never straight," Obama said.
Climate change, alongside healthcare and financial regulation reform, is a core goal of Obama's White House.
All require support from Congress, where his Democratic Party may suffer a setback in November congressional elections unless he can start to push the jobless figures down.
The tax credits have been granted to 183 projects across the country involved in technologies that include solar, wind and other initiatives to improve energy efficiency.
On top of the employment resulting directly from the tax credit, Obama said it would lead to "tens of thousands" of additional new jobs.
The White House says the stimulus money has helped prevent the deepest U.S. recession in 70 years from getting much worse, and has renewed its push to boost job creation, which many analysts say warrants more public spending.
Obama held a jobs summit and met with bankers last month to boost lending to small businesses in the hope that would encourage them to hire more workers.
In addition, the House of Representatives has approved an additional $155 billion jobs package to boost hiring, although the Senate has yet to take up its version of the legislation and will first tackle Obama's signature healthcare reforms.
"We have to continue to explore every avenue to accelerate the return to hiring," he said."