Mish's Global Economic Trend Analysis

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• WSJ Reports New Jersey Pension Deficit at $54 Billion; Actual Deficit $174 Billion; Illinois, California, New Jersey Among Worst States
• Florida League of Cities Poll on Police and Fire Salaries Shows Public out of Touch Regarding Benefits
• Retail Recession Hits Australia; Retailers Cry for Help
• Alabama Town Defaults on Pensions, Breaks State Law; Renewed Calls For San Diego Bankruptcy; "Prichard is the Future"
• Gold is Money, What About Silver? Can Gold be Debt?

WSJ Reports New Jersey Pension Deficit at $54 Billion; Actual Deficit $174 Billion; Illinois, California, New Jersey Among Worst States Posted: 23 Dec 2010 10:31 PM PST The Wall Street Journal reports New Jersey Pension Gap Hits $54 Billion. New Jersey's pension gap grew to $53.9 billion in the last fiscal year, up from $45.8 billion, thanks to market losses and a lack of state funding, according to figures released Thursday. Gov. Chris Christie's administration said the gap, which reflected the state's investment positions as of June 30, highlighted the need for proposed cuts to current public workers' pensions. The $53.9 billion figure reflects the difference between the retirement benefits the state has promised to roughly 780,000 state and local workers over the next few decades and the amount on hand to pay those benefits. In addition, an accounting practice called "smoothing" allows the state to factor market gains and losses over several years — meaning pension funds, on paper, are still feeling the effect of the 2008 market crash. Christie, a Republican, wants to reverse a 9% pension bump workers received in 2001 under a Republican administration. Unions argue their members have an irrevocable right to benefits they have earned. The governor has challenged the unions to meet him in court. Actual Deficit Much Higher There are at least two problems with that $54 billion number. 1. It allows smoothing 2. Plan assumptions expect average annual returns of 8.25%. I highly doubt pensions return 8.25% total (let alone annual) over the next 5 years. 10-year treasury yields are a mere 3.4%. To get higher returns, requires higher risk. History shows how well that idea has worked out for the last 10 years. There is no reason to assume the next 10 years will be any different. In fact, given stretched valuations and overly optimist earnings estimates, there is every reason to suspect the next 5 years will be worse. New Jersey Pension Funding Here is a look at New Jersey pension funding from Interactive Map of Public Pension Plans; How Badly Underfunded are the Plans in Your State? see above link for a workable map New Jersey Subtotals PERS - $48 Billion Teachers - $61 Billion Police and Fire - $36 Billion Those subtotals net to a combined $145 billion. They are from March 2010 so there has likely been some improvement since then. However, those totals do not include all of the state pension plans nor any deficits in city or county pension plans. The interactive map and those subtotals are based on data from Calculating the Market Price of Public Sector Pension Liabilities, by Andrew Biggs at the American Enterprise Institute. The American Enterprise Institute report is quite detailed. However, it only includes 3 of 7 New Jersey defined benefit pension plans. New Jersey Defined Benefit Plans Teacher's Pension Annuity Fund (TPAF) Public Employees Retirement Fund (PERS), Police and Firemen's Retirement System (PFRS) State Police Retirement System (SPRS) Judicial Retirement System (JRS) There are two existing defined benefit plans closed to current workers, the Consolidated Police and Firemen's Pension Fund (CPFPF), and the Prison Officer's Pension Fund (POPF). Thus, New Jersey's liability is hugely understated, even at $145 billion. Crisis in Public Sector Pension Plans Please consider Crisis in Public Sector Pension Plans by George Mason University. Pension plans operated by state governments on behalf of their employees are underfunded by an estimated $452 billion according to official reports, with total liabilities of $2.8 trillion and total assets of $2.3 trillion in 2008. However, many economists argue that even these daunting liabilities are understated. Current public sector accounting methods allow plans to assume they can earn high investment returns without any risk. Using methods that are required for private sector pensions, which value pension liabilities according to likelihood of payment rather than the return expected on pension assets, total liabilities amount to $5.2 trillion and the unfunded liability rises to $3 trillion. The ability of governments to pay for the retirement benefits promised to public sector workers runs up against the reality of limited resources. The state reports that its pension systems are underfunded by $44.7 billion, when liabilities are discounted at the 8.25 percent annual return that New Jersey predicts it can achieve on funds' investment portfolios. However, when plan liabilities are calculated in a manner consistent with private sector accounting requirements, methods that economists almost universally agree are more appropriate, New Jersey's unfunded benefit obligation rises to $173.9 billion. This amount is equivalent to 44 percent of the state's current GDP8 and 328 percent of its current explicit government debt. This calculation applies a discount rate of 3.5 percent (the yield on Treasury bonds with a maturity of 15 years) to reflect the nearly risk-free nature of accrued benefits for workers. It is estimated if state pension assets average a return of 8 percent, New Jersey will run out of funds to meet its pension obligations in 2019. If asset returns are lower than 8 percent, they will run out of funds sooner. State actuaries estimate that under certain assumptions, New Jersey's pension plans will run out of assets to make benefit payments beginning in 2013. Governor Chris Christie signed legislation on March 22, 2010 to reduce the size of the unfunded liability. These measures include capping payments for unused sick days, banning part-time workers from receiving pensions, and requiring government workers to contribute 1.5 percent of their salaries toward health care. Legislation also adjusted the formula used to calculate benefits, returning to the pre-2001 formula where benefits equalled 1.7 percent of final salary times number of years of service, versus 1.8 percent of final salary in the TPAF and PERS plans. Also, members of these plans would have their retirement allowance calculated based on the final five years of service, instead of the final three. However, these changes to benefits would apply only to newly-hired public employees. Current workers, even those who recently entered the job rolls, would be able to continue under the current benefit formula for the rest of their careers. These measures will help at the margins but do little or nothing to address the size of the liability that has already been accrued. The rate of accrual of benefits will have to be reduced further, and employees will have to contribute more to their plans. The state must recognize that adding more workers to a system that is underfunded by $173 billion by market standards, representing over 40 percent of New Jersey's GDP, is not a tenable option. The report cites Calculating the Market Price of Public Sector Pension Liabilities, the same study used to create the interactive map. Report Recommendations Reduce benefits for newly-hired public employees All newly hired employees should be shifted to a defined contribution pension model based upon the plan already offered to New Jersey's university employees Current reforms lowering pension replacement rates should be continued and, if possible, extended to current employees. All vested benefits should be honored, but the rate at which future benefits are earned should be reduced. Current employees who are not yet vested in their benefits might be shifted along with newly hired employees to a defined contribution plan. This step could produce savings to existing DB plans while moving more quickly to a sustainable pension model for public employees. I agree with those except honoring vested benefits. I recommend taxing the hell out of benefits above a certain level. Here is a look at liabilities state by state. Unfunded Liabilities by State click on chart for sharper image California is the worst state in absolute terms. In per capita terms, Illinois appears to be in the worst shape. However that statement does not factor in all of New Jersey's pension plans. Then again, the Biggs report does not include all of Illinois' public pension plans either. The mess everywhere is far bigger than it looks. Pension Apartheid Doesn't Work Unions are screaming about an Irrevocable Right to Benefits. Leo Kolivakis at Pension Pulse sums up the situation nicely. State governments have little choice but to raise the retirement age, cut benefits, and partially or fully remove inflation protection of public sector pensions. They should also revise their rosy investment assumptions for state plans. This may seem unfair and unreasonable to public sector workers, but to quote a strategist who I spoke with yesterday, "deleveraging sucks". You can't have pensions apartheid between the private and public sector. And there are no "irrevocable rights to benefits". Just look at the mess Greece and Ireland are in right now. When the money runs out, cuts are guaranteed. Yes indeed. Not only does Greece and Ireland prove it, but so does Prichard, Alabama the first city in the country to default on pensions. Please see Alabama Town Defaults on Pensions, Breaks State Law; Renewed Calls For San Diego Bankruptcy; "Prichard is the Future" for details. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Florida League of Cities Poll on Police and Fire Salaries Shows Public out of Touch Regarding Benefits Posted: 23 Dec 2010 05:22 PM PST An interesting Poll by the Florida League of Cities on Police and Fire Benefits shows the public is way out of touch with how generous police and fire benefits are. When asked if benefits were too high, most thought no. When given actual benefit levels most thought the opposite. Here are snips from the executive summary and a few questions. EXECUTIVE SUMMARY When it comes to the pay and benefits of police and fire fighters, voters are generally unaware of the array of benefits currently afforded them. Initially and by a large margin most respondents felt these benefits are "about right" or "too low". We asked an extended series of questions identifying the assortment of pay and benefits currently provided to most police and fire fighters. Almost without exception, voters feel that most of these benefits are too generous. For example, 63% felt retirement benefits should be consistent with other government employees, 66% opposed 20 years and out, and 73% felt that adding overtime to base calculations was unfair. Further, 70% oppose DROP, 71% felt $70,000 per year average salary was too high, and a whopping 84% felt they should not make the same when they retire as when they are working! Oddly, more than 60% stated that increasing benefits could bankrupt local government yet 77% do not equate these pension benefits to taxes and instead correlate higher taxes to "other spending and other government programs". We can conclude, based on these findings, that the public is largely ignorant or agnostic to benefit packages and salaries currently available to police and fire fighters. However, once they are informed about these benefits, they believe they are excessive and have problems with several of them specifically. 1. Do you think that the salary and benefits provided to police officers and fire fighters are: Much Too High 9% Somewhat High 12% About Right 51% Too Low 28% Just over half of respondents said that salaries and benefits provided to police officers and fire fighters are just right. 3. Which of the following comes closer to your opinion? Police officer and firefighters should be allowed to retire after 20 years of service because their jobs are hard. 37% They should have retirement benefits that are consistent with other government employees. 63% 4. In some cities, police officers or firefighters can retire after 20 years of service and receive 80% of their salaries for the rest of their lives. This means that for many, they can retire in their early to mid forties and receive pensions as high as $80,000 per year for the rest of their lives. Do you: Strongly Support 16% Somewhat Support 18% Somewhat Oppose 24% Strongly Oppose 42% Support 34% Oppose 66% 9. If you knew that the retirement pay for an average police officer was over $70,000 per year would you say: That is Too Low 1% That it is About Right 28% That it is Too High 45% That it is Much Too High 26% These results show just how effective police and fire unions have been on fearmongering campaigns as well as bitching about how little they get paid and getting the public to believe it. Cities need to do a far better job at education the public just how exorbitant police and fire contracts are, and that it is tax dollars that support those untenable benefits, putting cities in financial jeopardy. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Retail Recession Hits Australia; Retailers Cry for Help Posted: 23 Dec 2010 11:57 AM PST In the face of a property bust down under, Australian shoppers have increasingly turned to the internet in search of bargains. In turn, Australia retailers are whining about $1000 duty free allowance on overseas shopping. Retailers Cry For "Reform" Please consider Retailers cry out for trading help The gloom engulfing the nation's retailers is deepening in the week before Christmas - traditionally their best period. Peak employer group the Victorian Employers Chamber of Commerce and Industry yesterday called for a stimulus-like package to help ailing retailers. Spokesman Chris James said if retail did not rebound over Christmas, which it was unlikely to do, reforms were needed. These included personal tax cuts to give people the confidence to start spending and industrial relations reform, with particular attention to lifting restrictions on businesses employing students and casuals. Shopping Slump Inquiring minds are reading Retailers cry poor as sales drop sharply Major store bosses claim Australia is experiencing a retail recession, with the quietest and slowest Christmas shopping period in 20 years. Rising utility bills, mortgage rates and rents have decimated families' disposable incomes, forcing many retailers to start Boxing Day sales one month in advance in a bid to entice shoppers. Harvey Norman boss Gerry Harvey said there would be "blood on the streets" in the retail sector because business is so bad, the worst since the recession of the early 1990s. "It's a crisis, the worst in 20 years," he said. "There is a recession in retail right now. Boxing Day sales have had to come early because retailers need to sell something to pay their staff." The news comes as the Government announced an inquiry into the future of the retail sector to examine issues of competition, and the $1000 GST and duty-free threshold on overseas shopping. Australian retailers and shopping centre owners have formed an alliance to try to persuade the government to abolish the $1000 GST-free threshold. They plan to spend millions on an advertising campaign to try to have imported goods subject to tax and import duty. Subdued Sales The West Australian reports Slow start to festive season sales Retail Traders Association of WA executive director Wayne Spencer says the sales on Boxing Day, the biggest retail trading day of the year, will be vital for struggling retailers this year. "It's make or break for the retailers," he said. Mr Spencer predicts WA's spend will slip from $2.81 billion last year to $2.8 billion this year. He said despite there being an additional 52,000 people in WA, the spend was likely to be down, close to 10 per cent a person. The Australian Retailers Association says more than 65 per cent of retailers nationally are trading worse than the same time last year. Email From Down Under I frequently get emails from down under. Here is one from "Brisbane Bear" that just came in. Hey Mish, Retailers are desperately lobbying the government to do 'something' about the dire state of the economy. Retail is being hit by the perfect storm and shoppers are turning to the internet. For example, a shirt made in China for $5, sells in the USA for $30. The same shirt might sell for Australia for $120. A pair of quality boots selling for $120 online, retails in OZ for $220. Our business models are not even remotely competitive. The internet is not only letting people buy cheaper, it is actually allowing people to compare prices. Folks are learning quick smart that they are & have been ripped off for years. The other big problem businesses are facing are these Groupon type companies offering amazing deals on just about everything. These deal prices are quickly becoming the new price. Regards Brisbane Bear Commercial Real Estate Bust Coming Sales are flat and Australian merchants are screaming. Watch what happens when sales drop 10%. Inquiring minds might be wondering how stores can be struggling so much. The answer is a massively overbuilt retail sector and stores are struggling to meet their monthly nut. The same thing happened in the US. Look for a wave of bankruptcies, vacancies, and a huge commercial real estate bust to go along with the residential housing bust. That was point number six in Ten Economic and Investment Themes for 2011 6. Property Bubble Bursts Wide Open in Australia and Canada Australia, having largely avoided the global recession runs out of luck this time around. Look for the Australian economy to fall into outright recession. Look for Canada to slow dramatically as its property bubble pops. The US property bubble is much further progressed, by years, than Australia, Canada, and China. This matters immensely. On April 18, 2008 I wrote Shopping Center Economic Model Is History. 2 years and 8 months later, Australia is about to find out the same thing. Halting the $1000 GST and duty-free threshold on overseas shopping will increase the demand for bargains. Marginal stores are in serious trouble. Look for Australia's "retail recession" to become a full blown recession. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Alabama Town Defaults on Pensions, Breaks State Law; Renewed Calls For San Diego Bankruptcy; "Prichard is the Future" Posted: 23 Dec 2010 09:19 AM PST The dubious honor of being the first city in the nation to completely default on pension obligations goes to Prichard, Alabama. The city has sought bankruptcy protection twice and is flat broke. It faces a choice of paying to keep city services like police and garbage running or pay pensions. It selected the former. The New York Times reports Alabama Town's Failed Pension Is a Warning This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry. Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full. Prichard stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain: if nothing changes, the money eventually does run out, and when that happens, misery and turmoil follow. The declining, little-known city of Prichard is now attracting the attention of bankruptcy lawyers, labor leaders, municipal credit analysts and local officials from across the country. They want to see if the situation in Prichard, like the continuing bankruptcy of Vallejo, Calif., ultimately creates a legal precedent on whether distressed cities can legally cut or reduce their pensions, and if so, how. "Prichard is the future," said Michael Aguirre, the former San Diego city attorney, who has called for San Diego to declare bankruptcy and restructure its own outsize pension obligations. "We're all on the same conveyor belt. Prichard is just a little further down the road." Many cities and states are struggling to keep their pension plans adequately funded, with varying success. New York City plans to put $8.3 billion into its pension fund next year, twice what it paid five years ago. Maryland is considering a proposal to raise the retirement age to 62 for all public workers with fewer than five years of service. Illinois keeps borrowing money to invest in its pension funds, gambling that the funds' investments will earn enough to pay back the debt with interest. New Jersey simply decided not to pay the $3.1 billion that was due its pension plan this year. Colorado, Minnesota and South Dakota have all taken the unusual step of reducing the benefits they pay their current retirees by cutting cost-of-living increases; retirees in all three states are suing. Default No Surprise I am not surprised by the default, having written about Prichard a couple of times already, the latest on March 16, 2010 Bankruptcy Court Gives Prichard Alabama 2 More Months To Figure Out How To Pay Pensioners Rule Number One You can't pay what you do not have. The problem for Prichard is a declining tax base, loss of population, declining property values, and most importantly a pension plan that was amended by the Alabama legislature more than fifteen times, over the years. Each modification increased the economic burden on the city, every Alabama city in fact. Every state in the union needs to stop meddling in the affairs of cities. Cities in Illinois are in the same boat. Prichard never would have made those promises except they were forced by the state. The question is what to do about it. Expect to see more sad cases like these end up in bankruptcy court. Promises were made that cannot be met. The state forced those promises on cities. Higher taxes are not the answer. At this point, there is no answer that will satisfy anyone, let alone everyone. If the court declares the city must pay up in full, perhaps the city should pursue dissolution. What I expect to happen is for the bankruptcy court and the city to agree to pay pensioners some minimum benefit, far less than what was promised. It's only a matter of time before a major city decides to do what Prichard Alabama and Vallejo California did: declare bankruptcy to shed illegitimate pension promises crammed down city throats by socialist state legislatures. "Prichard is the Future" The court ordered Prichard to pay money it did not have with easily predictable results. Prichard defaulted. This is what happens when government interferes in the free market, mandating benefits that cities have no way of meeting. I agree with Michael Aguirre, the former San Diego city attorney, who says "Prichard is the future." Municipal bankruptcies was my top economic theme for 2011 as noted in Ten Economic and Investment Themes for 2011 1. US Municipal Bankruptcies Head to Center Stage Look for Detroit and at least one other city in Michigan to go bankrupt. Also look for increasing discussions regarding bankruptcy from Los Angeles, Miami, Oakland, Houston, and San Diego. Those cities are definitely bankrupt, they just have not admitted it yet. The first major city to go bankrupt will cause a huge stir in the municipal bond market. Best to avoid Munis completely. To survive, many cities need bankruptcy. It's Detroit's only hope. Please see Detroit Mayor Plans to Halt Garbage Pickup, Police Patrols in 20% of City; Expect Bankruptcy, Massive Municipal Bond Turmoil in 2011 for details. The money is not there. It can't be paid and it will not be paid, by Prichard, by Detroit, by Los Angeles, by Miami, by Oakland, by the state of Illinois. How Long Before Illinois Blows Up? Illinois has pension plans that are 23% funded. For details, please see Interactive Map of Public Pension Plans; How Badly Underfunded are the Plans in Your State? How long will it be before Illinois blows up? If the stock market takes another dive, I think about 3-5 years. We need to do something about existing pensions and future accruing pensions. One part of the solution, as I proposed earlier, is to tax pension benefits above a certain amount at a very high rate of 90%. I don't know what the level should be but I talked about $120,000 or $80,000. Some wrote that my level was too low, more wrote it was too high. Some wanted to tax everything above the level of Social Security benefits. As a practical matter, if you set the number too low and you will not get public buy-ins. Set it too high and you do not accomplish much. Left alone, the market will impose its solution and it's called "default", jut like Prichard did. A second part of the solution is to privatize government services. In response, several misguided souls wrote things like "what makes you think you know what wages should be?" The irony is that I don't. The free market does. The solution is simple, let the free market decide. Others have stated preposterous things like government workers are underpaid because they tend to have more education and skills. I say let's find out. Let's entirely eliminate the department of energy as a starting point of discussion. The department of education is another one. If those jobs are needed, the free market is virtually guaranteed to pick those jobs up. I suspect a few people would make a lot more than they do now, while most would struggle to find a job. Regardless of the result, we would have free market discovery, and it would not be taxpayer dollars paying the salaries. What's Fair? Numerous people have written me that "You cannot take away what's been promised". Most say things like "It's not fair". Well Prichard shows you can take away what's been promised. Default or bankruptcy will do it. I will be the first to tell you what happened in Prichard is not "fair". But that's what happens when government interferes in the free markets. It's certainly not fair to perpetually raise taxes for the benefit of overpaid public union workers, many of whom would have a low-paying job in the free market. The second major point is most of those deals are based on fraud. Public unions bribed, coerced, and fearmongered their way to untenable benefits and salaries. Corrupt politicians went along, buying votes to get elected. Fraudulent contracts need not be honored. Regardless, they cannot be honored because mathematically the money is simply not there. No solution will please everyone. In fact, it may not please anyone. However, if nothing is done, there will be more Prichards, lots more Prichards. Public unions better come to grips with that simple reality. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Gold is Money, What About Silver? Can Gold be Debt? Posted: 22 Dec 2010 11:57 PM PST FOFOA expressed a number of controversial viewpoints regarding money in his recent article Focal Point: Gold. Specifically, he makes the case gold is money but not silver. He makes some other claims that are highly debatable to say the least. Here are a few snips (emphasis mine) .... Gold and only gold will fill the monetary store of value role. Not gold and silver. Not precious metals. Just gold. Money's most vital function in our modern world is lubricating commerce, or more specifically, keeping the essential supply lines flowing – supply lines that bring goods and services to where they are needed. Without it we would be reduced to a barter economy, eternally facing the intractable "double coincidence of wants." This is the problem whereby you must coincidentally find someone that not only wants what you have to trade, but also, coincidentally, has what you want in return. And in the modern world of near-infinite division of labor, this would be a disaster. So we need money, and lots of it. In fact, we need money in unrestricted amounts! (I'll bet you are surprised to see me write this!) Yes, I said it, we need unrestricted money in order to fulfill this most vital function in our modern society – lubrication! But here's the catch: we need the right money in order to perform this seemingly impossible task. Money is debt, by its very nature, whether it is gold, paper, sea shells, tally sticks or lines drawn in the sand.(Another shocking statement?) Yes, even gold used as money represents debt. For this reason, the money used as a store of value must be something completely separate and different from the medium of exchange. It must be so, so that the store of value unit can expand in value while the medium of exchange unit expands in quantity and/or velocity. You may be starting to encounter my thrust. Expand… and expand. Unrestricted by artificial constraints. A fixed price of gold in your currency ensures the failure of your currency. And it won't take 30 or 40 years this time. It'll happen fast. It wouldn't matter if Ben decided to defend a price of $5,000 per ounce, $50,000 per ounce or $5 million per ounce. It is the act of defending your currency against gold that kills your currency. To be honest, I really don't know if silver is overvalued or undervalued today at $30/ounce. But if you are counting on the industrial fundamentals of silver for your moonshot like the Zero Hedge article is, or on a busted paper market like the "vigilantes," you may be in for an unpleasant surprise. The same fundamental arguments that are used today were also used back in 1982. In gold, at least, we know that jewelry demand rises and falls opposite the price of gold. But then again, gold is money, right? So, is silver still money? One of the argument for silver that we hear often is that it is "the poor man's gold." So I guess gold is "the rich man's gold." Well, what is the main difference between rich men and poor men? Is it that the rich have an excess of wealth beyond their daily expenses? In fact, the really rich have "inter-generational wealth," that is, wealth that lies very still through generations. The poor do not have this. FOFOA Fallacy #1: "So we need money, and lots of it. In fact, we need money in unrestricted amounts!" No we don't. Please consider a few re-ordered sentences from Murray Rothbard's classic text What Has Government Done to Our Money? Money is a commodity used as a medium of exchange. Like all commodities, it has an existing stock, it faces demands by people to buy and hold it. Like all commodities, its "price" in terms of other goods is determined by the interaction of its total supply, or stock, and the total demand by people to buy and hold it. People "buy" money by selling their goods and services for it, just as they "sell" money when they buy goods and services. Money is not an abstract unit of account. It is not a useless token only good for exchanging. It is not a "claim on society". It is not a guarantee of a fixed price level. It is simply a commodity. What Is The Proper Supply Of Money? Continuing from the book ... Now we may ask: what is the supply of money in society and how is that supply used? In particular, we may raise the perennial question, how much money "do we need"? Must the money supply be regulated by some sort of "criterion," or can it be left alone to the free market? All sorts of criteria have been put forward: that money should move in accordance with population, with the "volume of trade," with the "amounts of goods produced," so as to keep the "price level" constant, etc. But money differs from other commodities in one essential fact. And grasping this difference furnishes a key to understanding monetary matters. When the supply of any other good increases, this increase confers a social benefit; it is a matter for general rejoicing. More consumer goods mean a higher standard of living for the public; more capital goods mean sustained and increased living standards in the future. [Yet] an increase in money supply, unlike other goods, [does not] confer a social benefit. The public at large is not made richer. Whereas new consumer or capital goods add to standards of living, new money only raises prices—i.e., dilutes its own purchasing power. The reason for this puzzle is that money is only useful for its exchange value. [Thus] we come to the startling truth that it doesn't matter what the supply of money is. Any supply will do as well as any other supply. The free market will simply adjust by changing the purchasing power, or effectiveness of the gold-unit [monetary-unit]. The online book is a great read and I highly recommend reading it in entirety. The key point above is that an increase in money supply confers no overall economic benefit. Over time, money simply buys less and less FOFOA Fallacy #2: "Gold used as money represents debt." The statement is preposterous unless one allows the lending out of more gold than exists. That practice is clearly fraudulent. From Rothbard: Curiously, many people have argued that it would be impossible for banks to make money if they were to operate on this "100 percent reserve" basis (gold always represented by its receipt). Yet, there is no real problem, any more than for any warehouse. Almost all warehouses keep all the goods for their owners (100 percent reserve) as a matter of course—in fact, it would be considered fraud or theft to do otherwise. Their profits are earned from service charges to their customers. The banks can charge for their services in the same way. If it is objected that customers will not pay the high service charges, this means that the banks' services are not in very great demand, and the use of their services will fall to the levels that consumers find worthwhile. FOFOA Fallacy #3: Gold and only gold will fill the monetary store of value role. Not gold and silver. Not precious metals. Just gold. Like FOFOA I believe gold is money. However, unlike FOFOA I think money is whatever the free market says it is. The problem is, we do not have a free market we only have government decree mandating the use of dollars, Pounds, Yen, Renmimbi, Euros, and Francs as money. From Rothbard: Coexisting Moneys: It is very possible that the market, given free rein, might eventually establish one single metal as money. But in recent centuries, silver stubbornly remained to challenge gold. It is not necessary, however, for the government to step in and save the market from its own folly in maintaining two moneys. Silver remained in circulation precisely because it was convenient (for small change, for example). Silver and gold could easily circulate side by side, and have done so in the past. The relative supplies of and demands for the two metals will determine the exchange rate between the two, and this rate, like any other price, will continually fluctuate in response to these changing forces. At one time, for example, silver and gold ounces might exchange at 16:1, another time at 15:1, etc. Which metal will serve as a unit of account depends on the concrete circumstances of the market. If gold is the money of account, then most transactions will be reckoned in gold ounces, and silver ounces will exchange at a freely-fluctuating price in terms of the gold. Would a free market settle on gold only right now, or gold and silver, or as some dreamers think, energy? Historically speaking, the market has already ruled out energy. The most likely reason is energy lacks desirable properties in regards to divisibility, storage, and transportability. Does anyone really want to go to the supermarket and buy bread based in kilowatts? The idea sounds nonsensical because it is nonsensical. That the free market has never deemed energy as money in any practical application speaks for itself. In contrast, and when available, the free market has always gravitated to gold. Why Gold? Gold has a multitude of properties that make it suitable for money. Gold is scarce, non-corrosive, easily divisible, easy portable, and it does not degrade or rot away under any atmospheric conditions. Gold's scarcity and the fact that its supply is unlikely to suffer sudden increases, makes it the prime candidate to act as a medium of exchange. Historically, gold's use as money is unparalleled in the free market. Silver as Money? Silver has many of the same properties as gold. Moreover, silver has had long-term uses as money. In theory, the free market could conceivably decide that silver is money or that both silver and gold are money. At times, in select places, the free market has settled on copper, furs, or even large stones as money, the latter on Yap Island. However, history shows that such definitions of money are fleeting or extremely localized. If the free market did decide on silver as money (or silver and gold as money), the opinion of FOFOA (or anyone else) would be meaningless. Assuming for a moment the free market did select silver and gold as money, could a dual standard work at a fixed rate of exchange between silver and gold? Here I am 100% in agreement with FOFOA: Absolutely not. No fixed valuation between gold and anything else is possible, not just gold and silver. Would the Free Market Select Both Silver and Gold as Money? While theoretically possible, in today's world silver has one huge drawback that gold does not have: Silver is used up. Gold is not. Silver is widely use in industrial applications. For example, silver is used in photography, mirrors, computer keyboards, musical instruments, numerous medicinal purposes, watches, hearing aids, batteries, and a whole slew of purposes most people are not aware of. Silver has conductivity properties unlike any other metal. Wikipedia has a nice list of Industrial Uses of Silver as well as a discussion of its metallic properties. Here are a three uses from that link, that most people would never realize. Silver is used to convert ethylene to ethylene oxide, an important industrial reaction needed to make polyesters. Because silver readily absorbs free neutrons, it is commonly used to make control rods that regulate the fission chain reaction in pressurized water nuclear reactors, generally in the form of an alloy containing 80% silver, 15% indium, and 5% cadmium. Silver is used to make solder and brazing alloys, and as a thin layer on bearing surfaces can provide a significant increase in galling resistance and reduce wear under heavy load, particularly against steel. In contrast to silver, nearly every ounce of gold ever mined is still in workable existence, not discarded and buried in a dump. Historically speaking, when silver was used as money, it did not have the wide industrial uses it has today. Would that matter? It might, or it might not. Just the Math Maam FOFOA commented on a statement I made in Still More Hype Regarding Silver; Just the Math Maam "As a deflationist who believes Gold is Money (see Misconceptions about Gold for a discussion), I am long both silver and gold and have been for years." In that awkwardly phrased sentence, I commingled two distinct ideas. 1. Gold is Money 2. I am not short silver. As noted above, the free market could theoretically accept silver as money, although there are reasons that it might not. I simply wanted to refute allegations about me being short silver, conspiring with banks, and other such nonsense. For the record, I am not short silver and I have never been short silver. Perhaps at some point I might but I certainly have no plans to do so. Email Exchange With James Turk In regards to Just the Math Maam, I received this email from James Turk. Hi Mish I would never defend JPM either. And I see blaming JPM a bit like blaming wet streets for rain. The bigger picture is of course US government intervention, which is done to make the dollar look worthy of being the world's reserve currency when we all know that it is not worthy of that esteemed position so critical to the health of the global economy. Anyway, I thought your article was good and well-reasoned - to a point. The only part I would take exception with is the last paragraph. I agree that price suppression benefits those of us getting rid of over-valued dollars and buying under-valued gold and silver. But there is a bigger issue here. Government intervention distorts the market process, one important result of which is that the market gives bad signals (one reason, for example, why so many houses were built on spec). These bad signals hurt the market process because entrepreneurs end up putting accumulated capital in the wrong places (malinvestment as the Austrian economists call it), which destroys capital and therefore erodes the backbone of capitalism. I would like to see government intervention in the market ended. Regards James I agree with what James Turk said above. I should not have said "Assuming that JPMorgan could and did suppress the price of something below its natural value, everyone should be happy, not bitching about the opportunity to buy something of value at a cheap price!" I was attempting to be cute. Unfortunately, such statements condone unfair treatment of producers, among other distortions. I was wrong and I have a simple policy about such things. When you are wrong, admit it. It's not the first and it won't be the last. In regards to government intervention in general, I could not possibly agree more with what James Turk said. Both of us want to abolish the Fed and place the world (not just the US), on a sound currency system. In regards to what JPMorgan is doing specifically, in a separate exchange James said "Unfortunately, neither of us have the hard data to prove our point of view, so we can only agree to disagree until some hard data emerges." That is a fair position. There is room for error here, lots of room, on both sides. Currently there is a mountain of hype. I asked James if he thought efforts to squeeze JPMorgan were misguided or counterproductive. James writes ... It is not counterproductive because the publicity is bringing attention to the silver market, which is good. This attention is leading to more people understanding the fundamentals of silver, which are very positive. Silver is still good value, so more people are buying silver which is also good because the silver they are purchasing will help protect them from the hyperinflation of the dollar that I expect. In fact, I see rising commodity prices and the recent collapse of T-bond prices over the last several weeks as important writing on the wall that hyperinflation is not just possible, but rather, it is rapidly approaching. However, I agree that focusing on JPM is misguided if people do not recognize who is the real culprit, which is the US government. It is the schemer behind the curtain engineering the price manipulation through the ESF and other means to preserve the unconstitutional fiat money system now prevailing. To the question "If JPMorgan is in fact under some sort of squeeze, would the exchanges act to protect JPMorgan, whatever it took?" He replied writing .... Yes, of course, the exchanges always favor the dealers because the dealers control the exchanges. Just ask the Hunts. More recently, ask those people on the LME who were long nickel when that exchange changed the rules, and there wasn't even any allegations in that case of speculators trying to squeeze the nickel shorts. The nickel longs were industrial users who bought nickel to hedge their production requirements. In short, the exchanges always protect the insiders. As the "insiders", they are also the controllers. I asked James "Regardless of what JPMorgan is or isn't doing, isn't the best approach be to quietly, accumulate metal without attempting to sponsor mass viral actions?" To that he replied ... Yes, of course. That is exactly what Warren Buffett did when he quietly accumulated 130 million ounces of silver from July 1997 until the announcement of his purchases in February 1998. Nevertheless, his quiet accumulation drove silver from $4.15 when he began buying to over $7 when he made his announcement, and back then silver was relatively plentiful, not as good value as today and very much out of favor. So if someone tried to buy 130 million ounces of silver today, it would in my view take at least as long as the 8 months it took Mr. Buffett and would probably drive the price to over $100 per ounce. I therefore have to question the reliability of SLV's supposed silver backing when I see it ostensibly adding tens of millions of ounces in just a few weeks. It just doesn't seem possible to me, particularly given prevailing market conditions where physical metal is so tight and difficult to locate compared to as recently as just two years ago. Constructive Things You Can Do I am still sticking with the belief indiscriminate complaining about silver shorts via the internet is not going to accomplish much, even if it is true. A much better use of time would be to do constructive things like sit down with your legislative representative, give them the following books and briefly explain what is going on. The Case Against The Fed by Murray Rothbard What Has Government Done To Our Money by Murray Rothbard End The Fed by Ron Paul Those are Amazon links to order books to give to your representative. Here are free online versions. What Has Government Done to Our Money? The Case Against the Fed Admittedly most won't get it, at least at first. Over time they will, if enough people are willing to present the message properly. Attitudes rule and attitudes are changing. You can help. If you want to do something more productive than whining about silver shorts, buy those books, schedule some time with your legislative representative, forget the hype about hyperinflation at least for the discussion with your representative, then calmly explain how the Fed has created these boom-bust cycles and why we need to end the Fed. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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Linkscape is Faster, Link Analysis is Improved & Other Goodies Posted: 23 Dec 2010 05:02 AM PST Posted by jennita Yea.. Kinda like this. Over the past few months our dev and product teams have been busy little bees working on some pretty exciting new enhancements and upgrades to the web app. Since it's the holiday season... we might even liken them to Santa's little elves building toys for all the good little SEOs around the world. We've been rolling out quite a few updates each week. Some you've probably noticed, like the Linkscape index being updated faster and faster (Three cheers to Chas and Bryce for that!), while others may have gone unnoticed like fixing some pagination issues. I wanted to take this time to talk about a few of the bigger items we've released recently (even today!) and a few features you should watch for in the future. Faster Linkscape Updates As I mentioned above we're all in a tizzy over here about getting the Linkscape index updated quicker. Bryce and Chas on the dev team have made some major improvements to speed, so be sure to thank them for your fresh new data. :) We just had the latest Linkscape update yesterday, check out the stats for index 35: 38,807,464,322 (38.8 Billion) Pages 360,354,116 (360 Million) Subdomains 107,159,213 (107 Million) Root Domains 393,701,245,290 (393 Billion) Links 2.11% of All Links are Nofollowed (up 1.4% since early December) 57.01% are internal (down from 57.66% in early December) 42.99% are external (down from 43.34% in early December) 6.51% of pages have rel=canonical 62.02 links/page on average Link Analysis Domain Report Remember when you used to click on the Link Analysis tab and it would look like this: Well today we're launching some amazing updates that will help you see in an instant how you're doing against your competitors. As an example, I have a campaign set up for my husband's photography site. Here's what the new Link Analysis tab looks like: You can visually see that the Photography for Real Estate site is obviously the larger domain of the 4 and clearly has more domain authority, mozTrust, etc. The interesting thing to note is that in local markets it doesn't always rank first. :) So, beyond this quick information about your site and each of the competitors, you can also do deeper analysis into the links: In this view I'm looking at the Linking Root Domains, similar to what you find in Open Site Explorer. But you can also see followed backlinks, top pages and anchor text information as well. I have only showed my site and one competitor in the screenshot but on the page you'll see all the competitors. You can quickly take a peek into all your competitor's backlinks on this one page! Plus, you can easily download a PDF report and/or export up to 10,000 links (or top pages, linking domains, anchor text) into a CSV file, all with the click of a button. Whee... Data FTW! Note: This is being launched today... so if you don't see it quite yet, don't get discouraged! Take a break, then come back and try again. :D Another Note: The top linking root domain to my husband's site is from seomoz.org because I linked to it from my profile. :) New Keyword Ranking Emails If you're using the web app, you've probably already received one of these sexy new Keyword Ranking Report emails. Now, you can quickly assess how well your keywords have been doing over the past week. Check out a sample email below: Now if that email doesn't send you into automatic geek email heaven... then heck I don't know what would. :D mozPoints Update You may have noticed... or have even been alarmed to see that your mozPoints are no longer showing up in the right nav of the blog. Plus the Top User page has been a bit, shall we say, vacant lately. Well please don't worry! Your mozPoints have not gone away, and they are still showing up properly on your profile page. We are making some enhancements to the mozPoint system which will make more sense when we release our new profiles early next year. We apologize that we didn't let everyone know ahead of time before we made the changes! We received quite a few tweets, DMs, PMs, emails and support tickets asking where their mozPoints, rankings and Top User information went. The bad news, you'll have to wait a couple weeks to see that information again on the right nav, but the good news is that there are exciting improvements coming soon! I know, I know, you all are going to ask to get more information about these improvements... I promise, all in good time. :) We have to keep some surprises around here! About Us! This is a super fun one. We've recently created a whole new About Us section that includes more information on how to contact us, more mozzers and our TAGFEE tenets, SEOmoz job openings, cool press and awards we've received, and upcoming SEOmoz events (where we're speaking + meetups and such). A Few Other Recently Released Nuggets of Awesomeness Firefox and Chrome toolbar update, with some fixes and position numbers added to the SERP overlay Improvement to the rankings overview/history to display previous ranking data during retrieval of new rankings New holiday Roger on the home page (can I get a w00t w00t!) Manual selection of URLs for On-Page reports Better canonicalization check at setup – will check for redirects as well as missing redirects Repaired the ailing Juicy Link Finder Stay On Top of What's New & Coming Soon Plus, we've recently added the PRO Feature Change Log which you can access at any time to stay up-to-date on what's coming up next, or what changes have been recently implemented. Plus we've added a "request a feature" button to this page and hope that you'll utilize it! This is the best way to get that feature you've been dying to see in the web app. Starting in January we have so many amazing new developments we're bursting at the seams over here! We hope you all have a very happy holiday season and can't wait to get the ball rolling in 2011. Be there or be square.  Do you like this post? Yes No

7 Predictions for SEO in 2011 Posted: 22 Dec 2010 04:56 PM PST Posted by randfish It's that magical time of year when all of us who foolishly assumed the mantle of clairvoyance last December check up on our abilities and repeat our arrogant presumption again. Not surprisingly, something compels me to try again, despite the odds, but I am feeling a bit whimsical tonight, so let's make a game out of the prediction practice.  For each prediction (mine and others), we can grade using the following points system: Spot On (+2) - when a prediction hits the nail on the head and the primary criteria are fulfilled Partially Accurate (+1) - predictions that are in the area, but are somewhat different than reality Not Completely Wrong (-1) - those that landed near the truth, but couldn't be called "correct" in any real sense Off the Mark (-2) - guesses which didn't come close The rule is - if the score is lower than +1, the blogger/industry leader/author isn't allowed to make predictions for the coming year. So let's mark up my 8 predictions from last year and see whether new predictions are permitted: This Real Time Search Thing is Outta Here (+1) - technically, it's still around, though far less prevalent. I said "In 2010, I think this fades away. Perhaps not entirely, but we won't be seeing it for nearly as many queries with the prevalence we do today," which, on the scoring scale, probably deserves a "partially accurate." Twitter's Link Graph is the Real Deal (+2) - my guess seems oddly prescient when compared to Google + Bing's interview a few weeks back. "Google's not going to just take raw number of tweets or re-tweets. I think we're already seeing the relevance and reputation calculations in their decisions of which tweets and sources to show in the real-time results, and I expect that algorithms/metrics like PageRank, TrustRank, etc. will find their way into how Google uses the real-time data." I wonder if my luck can last. Personalized Search is Here to Stay (-1) - The title of this guess would make you think I'd got it right, but the substance is lacking. I noted that "If it's proven that you can get organic benefits by attracting PPC clickthrough, this may be the new "paid inclusion" for 2010, and could drive bid prices up massively as companies compete not only for paid listing clicks, but for the chance to earn "organic" positioning as well." Personalization bias didn't go towards brand exposure, and it actually hasn't got much stronger (apart from the localization element, which I didn't predict). Technically, it's still around, but it didn't become the juggernaut I thought it would. It's Going to Be a Two-Engine 80/20 World (+2) - Google's market share of web searches sending external traffic is likely very close to this (although Comscore reports only 66%, those numbers are heavily biased due to non-web-search "search" activity counted in the figures). A far better source would be something like StatCounter's referral data from the 15 billion pageviews/month on 3 million+ websites, which reports 81.88% for Google, and ~18% for Bing/Yahoo!. Given that Ask.com, Cuil and Yahoo! all folded their search operations this year, and Facebook/Twitter/Somebody Else Big hasn't entered the field, I'm giving this a "Spot On." Site Explorer and Linkdomain Will Disappear (+1) - Linkdomain is gone (at least in the US, and soon in most other countries), but it appears we'll still have until 2012(ish) with Site Explorer, so I'm giving this a (possibly slightly generous) rating of "partially accurate." SEO Spending Will Rise Dramatically (-1) - This one depends on the meaning of "dramatically." SEMPO's data suggests that 43% of marketers "expect" to spend more on SEO, but this is down 2% from 2009's survey. SEOmoz's own survey unfortunately doesn't compare apples to apples (we haven't asked the same question multiple years in a row and thus can't compare well). As of now, no new sources have come forward with data we're aware of (Forrester + eMarketer being the usual suspects). Thus, I'll give a "not completely wrong," since we really don't know. 2010 is the Year of Conversion Rate Optimization (-1) - Again, I'm going to say this was "not completely wrong" but it's also very tough to measure. We've had more speakers on CRO at search and marketing events of all varieties. Anecdotal reports would indicate CRO is becoming a more common and popular practice for organic marketers, but without solid numbers, it's hard to know. We can presume, however, that if there aren't lots of studies and data reports touting it, this probably wasn't "the year." More Queries Will Send Less Traffic (-1) - Given the launch of Google Instant, the personalization and localization of results, increased ranking inconsistency and more universal/vertical results in the SERPs, I'm going to say this is possibly near the mark, but not definitively correct. Google Instant, in particular, appears not to have moved the needle much on search demand and queries sending traffic. In fact, the only reason this is "not completely wrong" is due to my clever non-prediction of how many queries would send how much less traffic. :-) Tallying the numbers, I'm seeing +6 and -4, for a total of +2, which means new predictions for 2011. I also invite you to analyze some of the many lists of predictions for this past year here. If my calculations are correct, Mashable and TechCrunch are out of the predictions business (the latter just barely) while the New York Times' Bits Blog should continue (though, like me, they made some pretty pansy predictions). Without further ado, my predictions for SEO in 2011: #1: Someone Proves (or a Search Engine Confirms) that Clicks/Visits Influence Rankings I'm taking a chance on this one, but I've been hearing from more and more SEOs that there's some correlation between earning clicks and moving up in the rankings. In 2011, we'll get confirmation, either through testing or an admission from an engine that click-through-rate from the SERPs, visit count outside of search (or diversity of sources), or other usage-based data is in the ranking algorithm (or a method they use to help ID spam). #2: Google Local/Maps Adds Filters and Sorting The big reason Yelp is so much better than Google Maps/Local for finding a good local "place" isn't just the reviews (which Google aggregates from Yelp anyway). It's the filters that let me sort by features/pricing/proximity/open status/etc. Google's been playing the silly game of forcing users to choose search queries to enable rough, imperfect filtering, but 2011 is going to see the search engine shift to a model that allows at least some important filters/feature-selection. #3: Social Search Will Rise There's power in social media search, and Google/Bing's efforts to date have been lackluster at best. I suspect in 2011, we'll see the nascent beginning of search that leverages Twitter/Facebook/LinkedIn connections to find results from your friends. It's possible this will start niche-based only (search articles your friends have shared, ala Trunk.ly), but it could also be broader - possibly something from Facebook or Twitter themselves. #4: Rank Tracking Will Be Possibly Through the Referral String Google's been slowly growing the percent of queries that contain the numeric position of the result in the referral data. Given how much this information means to marketers (even those who realize it's frequently not telling the whole story), and how much automated scraping/requests goes through each day, I'd venture to guess that Google will increase this further and maybe even add some support for it in GA (why force your engine to work harder and your impressions counts to suffer unnecessarily?) #5: Mobile Will Have a Negligible Effect on Search/SEO For years, I've heard the prognostication that SEO and search are going to be flipped on their heads once mobile query usage takes off. I'll boldly predict that not only will mobile usage of search NOT skyrocket in 2011 on the long-awaited J-curve, but that the mobile and normal web browsing experiences will continue to merge toward a single experience, thus negating much of the need for mobile-specific sites and SEO. They'll always be mobile-related marketing opportunities in games and local (though these are hardly limited to mobile devices), but  mobile SEO will pretty much just be "SEO." _ #6: Software Will Become an SEO Standard For the decade I've been in SEO, software and tools have always been a "nice-to-have" and not a "must-have" (with the possible exception of web analytics). In 2011, I see several SEO software companies growing to critical mass based on the market's demand, possibly including: Raven Tools, Conductor's Searchlight, Brightedge, SearchMetrics, RankAbove, DIYSEO and/or GinzaMetrics. Hubspot, while more of a CMS/holistic marketing tool, will also likely fit in this group as their SEO offerings get stronger. Oh, and SEOmoz's Web App could do pretty well, too :-) #7: We'll Start to Move Away from the Title "SEO" to Something More All-Inclusive For years, I've prided myself being an SEO and embraced the title, the community, the positives and the negatives that come with it. But with the search engines expanding so far afield in the signals they consider and the verticals/media types they include, I have to face facts - SEO today calls for much more of a talented generalist than a pointed specialist. We need to be savvy about and good at so many facets of organic web marketing that to call us "SEOs" is less empowering and more limiting than in the past.   Now I'd love to hear some of your predictions for 2011 and see who's earned scores predicting 2010 that gives them the right to guess about 2011. p.s. I didn't take the obvious "Google's going to crack down on more link spam" or "Social's going to be even more important" prediction gimmes, because I just don't think I'd respect myself tomorrow morning. Do you like this post? Yes No

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Happy Holidays from the White House

Good morning, The holiday season is one of my favorite times of year at the White House. The White House truly feels like the “People’s House,” as folks of all ages from across the country pass through the halls enjoying the beautiful décor and celebrating the history here at every turn. More than 100,000 visitors will come to the White House this holiday season, and we wanted to give everyone a chance to share in the magic of the White House during the holidays. That’s why one of my favorite decorations this year is the Military Appreciation Tree where visitors can leave their holiday messages for our troops and their families, many of whom will spend this holiday season far away from their loved ones. You can send your own season’s greetings to our men and women in uniform and our military families, as well as see all the holiday decorations and watch behind-the-scenes videos, on WhiteHouse.gov.  This year’s White House theme, Simple Gifts, is a celebration of the simple things that bring joy during the holidays, like spending time with family and friends and serving those in need in our communities.  And it’s a reminder to us all, particularly in these trying times, that some of the greatest gifts in our lives are those that don’t cost a thing.  On behalf of Barack, Malia, Sasha, and Bo, I wish you and your family a very happy and healthy holiday season.  Sincerely, Michelle Obama First Lady of the United States  P.S. If you are looking for ways to give back to your community this holiday season, visit Serve.gov or check out the Toys for Tots program.   This email was sent to e0nstar1.blog@gmail.com. Unsubscribe e0nstar1.blog@gmail.com | Privacy Policy Please do not reply to this email. Contact the White House The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111