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The Economic Forecast

Locally, stirrings of response to an unmanageably darkening financial picture are preparing to cast a searching beam of light into the gloom of impending tomorrows as area residents begin pooling their thoughts on the restructuring of the regional economy and lifestyle. Alternatives to our corporately dominated culture have long been simmering on the backburners of rural thought and it is now the corporate structure’s own anti-human business schemes that are forcing a higher flame on that simmer.
"There are already hungry people in Olive today, without cold weather," says Charles Blumstein, who is involved in a "relocalization" project to, in part, revitalize Olive’s agricultural attributes and who details the early stages of the planning in another story in these pages. "The quadrupling of oil prices guarantees a disaster this winter. Things are unfolding so fast, it’s hard to keep up but we’ve got to start meeting the crisis head-on, right here. Olive used to be net exporters of food and the land has been fallow so long because of (cultural) changes in values but we have the land and the sun and it’s time to start networking to re-center ourselves."
Gerald Celente, CEO of the Trend Research Institute, predicts that "the kinds of communities that thrived before suburban sprawl are going to thrive again" as the cost of transporting produce longer distances bloats the price-tags of industries built upon massive production and shipping. "Rural areas will do very well because microfarming will become very big business as the whole corporate agricultural model is breaking down."
Signs of community networking are sparking up in many rural regions left stranded by the explosive expansion of the major agricultural giants in the past half century as civic and church groups are scrambling to meet the needs of a sudden flood of Americans pressed by financial desperation. As banks and mortgage houses lurch at the impact of an economic iceberg and the newly jobless search the want-ads of the Diminished Expectations Press and food and fuel prices skyrocket, hauling a train of inflation behind them, we are told by USDA Undersecretary Mark Keenum that the "cupboard is bare," U.S. food surpluses are gone and food stamp programs are newly swollen as food banks for the poor around the country are overwhelmed.
In May, Germany called for a worldwide ban on oil speculation trades and India suspended trading in key commodities as the food and fuel crisis effected hundreds of millions around the world.. The BBC showed British viewers the shantytowns of homeless squatters springing up in California that U.S. media tries to downplay. Mark Wolfe, head of the National Energy Assistance Directors’ Association told USA Today they were seeing a record number of gas and electricity utility shut-offs "hitting people in the suburbs with two cars and two kids." We can’t even begin to mention the drain of long-term commitments in Iraq and Afghanistan, the trillions lost by the Pentagon or dropped on incompleted projects around Baghdad as major contractors like Halliburton move their operations from Houston to Dubai, where some perceive the world financial focus has shifted. And, as the Los Angeles Times pointed out in May, the twentyfold increase in commodity trading has given foreign investors bargain rates for the buying up of America with likely long-term results
As the White House pushes for an increase in the strategic petroleum reserve (with prices well above $100 a barrel), there is an outcry for the creation of a strategic grain reserve and last week China announced an urgent increase in its production of genetically modified crops. Therein is a subtext to the situation which we’ll address in a moment.
So, what happened? How did all of this come about? Although Celente, who is a commodities trader himself, given to accept the standard Wall Street line of increased energy demand as the major culprit, other analysts are quite specific in identifying the financial villains. One of them drawing a good deal of attention right now is F. William Engdahl, a former New York economic historian now living in Europe, whose best-selling 2004 book, A Century of War, details the role of the oil industry in world conflicts. Engdahl is among those spurning the "peak oil" myth of crude oil shortage (even OPEC admits there is no shortage of oil) and spells out explicitly how price manipulations not based on the supply and demand tradition are being worked.
Engdahl explains that the international cost of crude oil is now controlled by NYMEX in the New York Stock Exchange and ICE Futures in London, along with a new player, Dubai Mercantile Exchange (DME), which has NYMEX President and former CFTC chairman James Newsome on its board. In a nutshell, oil futures contracts or "paper oil" are driving the surge through "a process so opaque only a handful of major oil trading banks such as Goldman Sachs or Morgan Stanley have any idea of who is buying or who is selling oil futures or derivative contracts." Citing a June 2006 U.S. Senate Permanent Subcommittee on Investigations report which points to paper-oil speculation as the primary culprit, Engdahl sees deliberate regulatory omissions by the Commodity Futures Trading Commission as handmaiden to the scam.
The Senate report fingered the Commodity Futures Modernization Act of 2000 (requested by the Enron Corporation and thus known as the "Enron loophole") as opening the door to electronic futures trading beyond extensive oversight by the CFTC, as part of the final legislation of the 106th Congress under President Clinton. The finishing touch came in January 2006 when London’s ICE Futures market, which is owned by Atlanta Georgia International Commodities Exchange (founded partly by Goldman Sachs), started trading West Texas Intermediate (WTI) crude, routing the transactions through opaque and unregulated channels. At that time crude was $59 a barrel but, since the loophole allowed energy trading without daily reports, paper-oil began taking off without fear of market manipulations being observed. Engdahl estimates that at least 60% of oil prices are pure speculation and notes that "In the most recent sustained run-up in energy prices, large financial institutions, hedge funds, pension funds and other investors have been pouring billions of dollars into the energy commodities markets to try to take advantage of price changes or hedge against them." There’s been a lot of selling the dollar short and oil long.
In essence, in the eyes of Engdahl and others, this is a gigantic fraud by a financial elite with transnational interests at the expense of ordinary people and, in the end, it will make the Savings & Loan affair of the Reagan years look like a molehill. On a recent Canadian radio program, Engdahl postured that we may see a temporary manipulated decrease in prices in the run-up to the elections before they start upwards again but, since the Democratic candidate, Senator Obama, has Goldman Sachs as his largest contributor and other such players on board, it may not be seen as necessary.
Obama is also a strong supporter of ethanol and that, too, is a target of Engdahl’s analysis and, along with the aims of the agribusiness giants (Monsanto, Cargill, etc.) that re-engineered the genetics of our food supply into patentable and profitable facsimiles, a huge subtext of the current crisis. When a secret World Bank report was leaked to the British daily The Guardian in June, we learned that at least 75% of the recent food price hikes are the result of the ethanol/bio-fuel initiatives which removed too many millions of acres from the production of food rather than the 3% claimed by U.S. representatives at the recent UN food summit in Rome. The ethanol plan is also a scam, according to a legion of experts, with much more viable options less profitable to the transnational string-pullers.
There’a a lot more to this story, from the falsification of U.S. economic data to the true designs of those who decide who’s qualified to vie for the Oval Office, and never enough space to work with. (Engdahl’s recent book Seeds of Destruction: The Hidden Agenda of Genetic Manipulation is an eye-opening place to begin for those who wish to learn more about the current world agenda.) Many of us take a myopic national view of what the power brokers see as a global situation and by keeping our perspectives on that level, we miss the obvious immediately around us, even the fine print on grocery shelf boxes which, by U.S. law, cannot say anything about genetically modified ingredients. Even the very ground beneath our feet.
As the Wall Street Journal noted in 2003, Democratic Majority Leader Tom Daschle announced his determination to "raise U.S. fuel prices by $8.5 billion over each of the next five years in order to feed the ethanol lobby" and has since joined the Obama campaign, so any hope that McCain or Obama will provide a political solution to the economic crisis is undoubtedly less realistic than a stubborn and concerted stand by local residents to reclaim control over their future.
"Sounds like getting back to what we did when I was a kid," said Olive town supervisor Bertt Leifeld on Tuesday with apparent interest in hearing more about the Relocalization Project. "Victory gardens, we called them during the war."
Gardens, yes, agrees Blumstein. But there’s more. Much more.


Catskills Relocalization!

They substituted manual labor, appropriate hand and renewable powered technologies and traditional agricultural methods such as crop rotation, composting and spreading of animal manure to eliminate the petroleum based synthetic fertilizer, pesticide, herbicide and tractor fuel inputs that are an integral part of large scale industrial agriculture.
Dmitry Orlov, author of Reinventing Collapse: The Soviet Example & American Prospects, experienced the Collapse on his.wife’s family homestead in a rural part of the FSU and describes the return to the more traditional forms of local food production and preservation. Heating fuel was harvested locally and the village was largely immune to the breakdown of order occurring in the cities after the financial collapse. He describes the process of relocalization that occurred in the FSU and compares it with the worldwide movement that is developing now.
With the recent dramatic change in values and prices of essential goods and services it not only makes economic sense to produce our basic needs locally but it will also contribute to neighborhood employment and more importantly neighborhood resiliency in the case of a temporary supply disruption of essential goods and services. Quintupled petroleum prices are essentially a major supply disruption that could easily turn into a disaster this winter for moderate income households if advance planning is not carried out. Oil and gas tanks will run dry this winter, indeed some have been dry for a while in town. Everyone in town must have at least one buddy with warm refuge in case of service or supply outage. Hopefully householders will stock up on food and fuel as our elders used to do hereabouts.
I remember back in the ‘70s old man Terwilliger of Terwilliger Real Estate in Kerhonkson always had the wall to wall shelving in his office covered with 600 quarts of everything that he put up from his huge garden out back. This is beginning to happen in our towns again with numerous new and expanded gardens appearing along the highways and byways of Olive. Large fire wood piles are appearing also which is very comforting indeed.
The first formal meeting of Olive neighbors to discuss remedies and opportunities available in the Tompkins County NY Relocalization Project manual will be held at The Ashokan Center on Beaverkill Rd., Olivebridge, on Saturday, July 19 at 10:00 AM. Contingency plans to enable and ensure a safe warm winter for those neighbors in dire need will be discussed. Augmentation of the food bank and meal distribution system seems another pertinent topic. The agenda will be set by consensus. A wood fired potluck pizza brunch will be available. Bring cheese, grated or not and colorful tasty toppings. Dough and sauce supplied unless your sauce is fab. Salad and dressing is cool too.
Lemonade? Food coordinator anyone? Call 845-657-2030 for more info or to help with the food coordination.
With today’s quintupled oil price the supply has essentially been shut off to those of modest means. With slim food and fuel budgets here and now, how will many stay warm this winter? Make no mistake, this is a disaster for those of modest means who are wholly dependent on fossil fuels for heating and transportation. Given that it takes so much petroleum to grow, process and ship food to your table, the growth in the number of communities around the world that are intentionally relocalizing is no surprise. The wisdom of our elders is coming home to roost. When you grow food locally and biologically, you can reduce the calorie input by 90%. Petrochemical farming may be labor efficient but only at a great cost of fossil energy. With agricultural inputs suffering huge increases in price it now makes much more sense to produce locally for both local consumption and export as done here in centuries past. The new twist today is the need for the processing to happen in town. The value added to food when it is processed into a shippable storable form is a multiplier of approx. 8 to 10 times. This means that a local entrepreneur, grower, farmer, under or unemployed family can grow an acre of cabbage worth about 3 to 4 thousand and convert it into retail packaged sauerkraut worth about 30-35 thousand keeping the wolf at bay for another year. When properly cultivated and enriched, the land will increase in fertility and productivity over time.
With a 6 month investment of elbow grease, almost anyone can produce, process and retail or wholesale the preserved product until the next harvest. Lucky for Olive neighbors there is an abundance of pasture which is now organic due to being fallow for decades with which to produce the new bull market commodities, being pastured livestock of all kinds. A brief perusal of any farmers market reveals that a frozen pastured organic chicken sells for about 4.50 a pound or about 20 dollars per frozen and wrapped bird. Twenty bucks for a chicken.
We could be in the same position as any oil producing country, being a producer of valuable commodities excepting that pastured livestock production is biologically based, improves the fertility and productivity of the soil and is environmentally benign.
The missing ingredient needed for a real farm revival in Olive is a certified commercial kitchen where someone can take the fruits of their labor and produce packaged bar-coded product from raw local ingredients.
A revival will only work if an executive income is possible in return for a commensurate amount of labor. In days of yore the agricultural sector served as a safety release valve for a slackening industrial sector and this can indeed occur here again but only if the full value of the finished product is captured by the grower/ processor. The preserved and packaged products can be retailed at farm markets or fed into the regional distribution system.
A marketing logo such as Olive Farms featuring Krumville Spicy Kraut could become a regional delicacy brand that generates substantial income for Olive coffers.
There is always a bull market in something and we have the now well rested pastures which are really solar powered biological factories ready to be re-fenced and brought back into production. New methods of low energy input agriculture such as Permaculture can be adopted in a widely distributed landscape that features more edible perennials every year. With periodic visits by local newly formed herds of livestock, the land will steadily increase in fertility and productivity .
Ah!, but there must be a fly in the ointment and indeed on the surface there does seem to be a deficit of people who really know how to work anymore but I have to believe that between the recently developed technologies, materials and designs, a low energy and labor input system adapted to local conditions can thrive practically, economically and contribute materially to local self reliance and resilience .
The magnitude of the recent change in values and prices of food fuel and fiber makes careful planning a necessity going forward. Help start the community conversation and help ensure a warm, safe and well fed winter for all. See you at Ashokan!
Remember: The first formal meeting of Olive neighbors to discuss remedies and opportunities available in the Relocalization Project manual will be held at The Ashokan Center on Beaverkill Rd., Olivebridge, on Saturday, July 19 at 10:00 AM. Be there!


Electric Reservoirs?


The DEP, a spokesperson for the City-agency said this week, is currently operating hydro electrical plants at five of its reservoirs within the watershed.
“We have one at the Ashokan, one at the Kensico, and three in Delaware County,” said spokesperson Mercedes Padillo when asked about reports that the Olive-based reservoir’s old aerators had been shifted to hydro power in recent years. “Two belong directly to the DEP and are managed by the New York Power Authority, two belong directly to NYPA, and one belongs to Brascan, a Brazilian-Canadian enterprise. I can’t tell you more about any of them at this time.”
Addressing his grass roots energy cooperative’s big push to harness more of the reservoir system for local benefit, DCREC CEO and General Manager Greg Starhein said that he has kept his present requests, which the Catskill Watershed Corporation has joined Schumer in writing letters of support for, concentrated on overflow for the moment… and only reservoirs within his company’s membership area. But he added that the hydro system of renewable energy creation he is proposing would be just as usable at other reservoirs throughout the system. Furthermore, Starhein noted that hydro-electric engineering is being developed both here and abroad that would allow for clean turbines harnessing non-filtered aqueduct flows from the city’s vast reservoir system in the coming years.
He added that, barring any major opposition from the city to their request, he envisions having the requested hydro systems up and operating within four years. Combined with new landfill gas release technologies his company has been developing, Delaware County Rural Electrical Cooperative could be well on its way towards majority sustainable energy resources within a decade.
“Residents in the watershed region have been good neighbors and done their part to ensure the high quality of the watershed, which supplies up to 90% of New York’s drinking water. To accommodate this important mandate, the region’s residents have faced flooding issues, limitations on their capacity for economic development and other curtailments to their ways of life,” Schumer wrote in his July 7 letter to Lloyd. “Currently in the watershed system, the water that is released from the Schoharie, Cannonssville, Pepacton and Neversink Reservoirs is left unutilized and offers no economic benefit, either to New York City or to the region. As you know, New York State has made a laudable commitment to have 15% of its energy supply generated from renewable sources. At a time when we are facing record high energy costs, alternative energy sources are a critical component to ensuring the long term success and viability of New York. This unused resource presents an excellent opportunity to develop an inter-regional partnership to develop New York’s renewable sources of energy.”
Schumer’s letter goes on to reference the Cooperative’s filing of a proposal with the Federal Energy Regulatory Commission to generate electricity using proven technology from the drop in elevation associated with the water’s release from the reservoirs.
“The development of hydro plants that convert the release and spillover of water from these reservoirs into a clean sustainable form of energy will provide benefit to the surrounding communities, these same communities that support the watershed,” Schumer says. “The hydro plants are an innovative way to generate power from water released from these reservoirs, while protecting the high quality and quantity of drinking water supplies and making no alterations to the proscribed monitoring of these facilities already under the purview of DEP.”
Schumer’s letter, according to CWC Corporate Counsel Tim Cox, was preceded by a July 3 letter to NYC Deputy Mayor Edward Skyler.
Asked for a response to the Electrical Cooperative’s request, Pardillo stated the City’s official reply as: “We look forward to reviewing it and to further discussing it.”
According to Starhein, the Schumer and CWC letters come after several months of conversation with city officials about the pending hydro hook-up. He said the current plan involves water releases that flow into the Delaware River Basin, which comes under the jurisdiction of its own four-state commission… and is looking at hydro opportunities on its own, according to its website.
He added that although continuous flow with a drop of 140 to 165 feet is best for hydro-electric production, “what makes for an attractive hydro opportunity includes the amounts of water flow, which in the case of some of our reservoirs such as the Schoharie, can be very strong.”
Starhein noted that even with hydro-electrical engineering science advancing fast these days, he didn’t want to push the City too hard with his requests. At least for now.
But is his plan for using reservoir overflow doable for other parts of the reservoir outside of his cooperative’s reach?
We mentioned Jay Ungar and Molly Mason’s dream of achieving energy sustainability at their Ashokan Center once it’s split off from City property that includes the nearby reservoir’s mighty Wastewater Channel, re-opened in recent years when the Schoharie Reservoir was being drained for dam repair work.
“What we look forward to is developing a portfolio of renewable energy sources that would allow us to potentially play a more significant role as an energy provider in the wider region,” Starhein said, noting that as one of 900 rural electrical cooperatives across the country, he’s part of a larger, grass roots movement… and dedicated to helping other rural residents and businesses find sustainable, affordable energy on a non-corporate level.
New York State currently has four rural electric cooperatives, including Delaware County’s, which were created in 1941. The movement stems from a state “Rural Electric Cooperative Law” enacted during the war that permitted farmers to serve electricity to themselves that went national by 1943… . A National Rural Electrical Cooperative Association was formed the next year as a means of helping to overcome World War II shortages of electric construction materials, to obtain insurance coverage for newly constructed rural electric cooperatives, and to mitigate wholesale power problems across the nation.
Today, NRECA has more than 900 member cooperatives serving 40 million people in 47 states. NYSRECA has built up a long-term partnership with the New York Power Authority, the nation’s largest non-federal public power company, but also started a major push towards renewable resources. The Delaware County Association has over 5,000 members in 21 towns… and is open to growth, as well as helping other counties and municipalities set up similar cooperatives on their own.
And yes, Starhein said, he has been talking with Ulster County officials of late. As for his cooperative’s ideals, Starhein referred to a mission statement that focused on taking “pride providing our members quality electric service and being good stewards to our local communities” through member controls giving all equal votes, ”autonomy and independence,” cooperation with other cooperatives, and a concern for community that reflects working, “ for the sustainable development of their communities through policies accepted by their members. Sure, there have been stumbles of late. Starhein said that his cooperative was involved in several initiatives for the development of wind power that ran into significant opposition in a number of Delaware County communities. But that just opened his eyes to the subtleties of energy development these days… and doing it cleanly, in the right places. He feels, for the moment, that harnessing the region’s hydro potential is a key means of moving the Catskills, and eventually entirety of Upstate, past its current economic fears brought on by higher fuel prices. “We’ve got a diamond in the rough here,” he said. “And in our grass roots, cooperative approach, a uniquely homestyle way of doing things new.”


Hotel Debris Draws DEC Ire

Gutierrez is the contractor that demolished the remains of the Phoenicia Hotel a couple weeks ago. While much of the debris remains on the site in huge pile, some amount was allegedly trucked off site to Jameson’s property.
Rumors spread quickly that the material was being dumped at Jameson’s, although the stories of large dump truck loads appear to have been exaggerated.
Regardless, someone made a complaint to the DEC on June 25th. DEC Police investigated and charged Jameson with operating a solid waste management facility without a permit. Gutierrez was charged with unattended open burning, open burning without a permit and open burning for commercial purposes. He was also charged with two counts of unlawfully disposing of solid waste.
Jameson said that a DEC Officer came to Romer Mountain Park during a wedding party and asked to inspect the premises. Jameson said he knew what the visit was about.
“I cooperated completely,” he said.
Jameson confesses that he asked that the material be brought to his place for use as firewood when he makes outdoor bonfires, much like the one he had set up for the wedding. While that particular bonfire did not have any of the hotel material in it, Jameson expected ones later this year would.
Not any more though.
“Dave (Gutierrez) needs to come back here and take the stuff away and dispose of it properly,” Jameson said.
According to Declan Feehan, the owner of the hotel property and personal friend of both Jameson and Gutierrez, the matter has been blown out of proportion. Feehan agreed that some wood from the hotel was trucked to Jameson’s for use later this summer when Jameson holds his annual community party, the focus of which is a large bonfire come twilight.
As for the open burning charges leveled at Gutierrez, Feehan said a small amount of wood from the Hotel was also brought to another location in Lanesville for use as a fire starter to get a pile of recently cleared brush burning.
Feehan added that he feels disappointed because the charges make it sound like there was some diabolical, large scale operation to remove the debris.
He said that as a result of the publicity, Gutierrez has lost over $50,000 worth of work that had been scheduled for this year. Feehan further noted that someone has been driving around to places where Gutierrez is working and telling the landowners of the charges and urging them to think twice about using the contractor.
Both Jameson and Gutierrez were expected to appear in Shandaken Court on July 29th, but Jameson later noted that the TownJustice on duty that night, Thomas Crucet, is also his attorney. So a postponement is likely.
The current charges come as many in the area have grown heated over a new set of DEC regulations get reviewed that would ban all open burning in the state except for three foot by three foot camp fires, controlled agricultural burns on farms, and ceremonial bonfires.
The deadline for public comment on the proposed regs, which state officials have said were aimed primarily at stopping pollution caused by the burning of toxic matter in burn barrels, has been extended to August 14. Further hearings have also been set on the proposed laws…


A Jar Of Olives...
Searching Out 4 Bars
Cell Service IS Coming To Town Soon - Now Prompts County Call To Boycott Greene

The good news, however, which I heard from somebody who knew somebody, is that someone actually took pictures of some technicians actually working up on the cell tower on South Mountain. The rumor is that by the time this paper is published, or at least by the next one, we might be able to ask, “Can you hear me now?”
It does seem that cell service will be a reality by Olive Day. This is certainly a boon to that need for emergency communication, but it will be life altering for those of us who have existed for so long on landlines. Will we develop the posture of a cell phone user? Notice that cell phone users always are looking down to below waist level to punch in numbers or letters. They also have a tendency to lean left or right depending on which ear they have the phone. I predict that massage therapists and chiropractors will do a booming business soothing stressed necks until our bodies adjust to this new connection.
I will have to start carrying the phone with me along with my reading glasses so I can read the tiny buttons and menus. I have one of those designer phones that will take pictures, text, play music and do everything else except wash the dishes. So far I have mastered answering it and pushing “end.”
I vow that I will not be one of those obnoxious people who carry on a very personal conversation in a very public place. I have been privy to romantic, sexual, financial and health information that I would not share with my best friend as I overhear strangers talking as if no one could hear them. I’m so glad I retired when I did. I can’t imagine a thousand school kids texting and calling each other with a thousand ring tones producing cacophony and chaos in the classroom.
On the other hand, I am glad that I taught at Onteora when I did because I have the privilege of being Bert Breitenberger’s colleague for so many years. Mr. B passed away, but no teacher or student will ever forget him. Bert would challenge students to wheelchair races up and down the main hall, and when no one wanted to coach the cheerleaders, Bert volunteered. Teachers, like Bert, live on in the minds and hearts of their students.
How about that politician who said we should stop “whining” about the economy. This is America. I am sure that “The Right to Whine” was implied in the Bill of Rights. I have confidence in my fellow Americans that the war will end soon, a car will run on some alternative fuel, that solar and wind will energize our houses, and that someone will develop a chocolate flavored dessert guaranteed to vaporize a pound of cellulite with each serving. In the meantime, I will lightheartedly whine about the new technology or the old fossil fuel problems, but I will conclude with some good news.
Brittany Maouris, Kim Alexander’s daughter and one of my favorite students, graduated from St. Rose College in Albany.
Sherrett Chase celebrated his 90th birthday.
A company that sells liquidated and surplus hardware, houseware, and lumber operates out of the old Singer-Denman building. It’s a treasure hunt.
The Tongore Garden Club hosted a floral arranging demonstration by Andrew Kern who is the Master Gardener at Mohonk. Members brought flowers from their gardens, and dozens of arrangement were enjoyed and shared. I have a fragrant bouquet of yellow lilies on my sideboard. They are so magnificent that I should take a picture of them with my cell phone. Of course, I will never be able to retrieve, email or print that picture until someone gives me lessons on “How to use this new-fangled gadget.”