Ruble Trouble

On Russia, the fall of the Ruble.

This is an interesting event on which to test out our various frameworks for thinking about macroeconomics and monetary economics.

Theories

There are three basic perspectives on exchange rates.

1. Multiple equilibria. Lots of words are used here, "speculative attacks," "sudden stops," "hot money," "self-confirming equilibria" "self-fulfilling prophecies" "contagion" and so on. Basically, the exchange rate can go up or down on the whims of traders. There is often some news sparking or coordinating the bust.  Some of the mechanism is like bank runs, pointing to "illiquidity" rather than "insolvency" as the basic problem.

This has been a dominant paradigm since the early 1990s. I've been a bit suspicious both on the nebulousness of the economics (lots of buzzwords are always a bad sign), and since the analysis seems a bit reverse engineered to justify capital controls, currency controls, (i.e. expropriation of middle-class savers and poor currency-holders), IMF rescues, and lots of nannying by self-important institutions and their advisers who will monitor "imbalances," "control" who can buy or sell what, and so forth. But models are models and facts are facts.

2. Monetary. Exchange rates come from monetary events, and primarily the actions of central banks. For example, much of the analysis of the dollar strengthening relative to euro and yen attributes it to the idea that the US Fed has stopped QE and will soon raise rates, while the ECB and Japan seem about to start QE and keep rates low.

3. Fiscal theory. Exchange rates come fundamentally from expectations of future fiscal balance of governments; whether the governments will be able and willing to pay off their debts. If people see inflation or default coming, they bail out of the currency, which sends the price of the currency down. Inflation follows; immediately in the price of traded goods, more slowly in others.

Craig Burnside, Marty Eichenbaum and Sergio Rebelo's sequence of papers on currency crises, starting with  JPE "Prospecitve Deficits and the Asian Currency Crisis" (ungated drafts here) was big in my thinking on these issues. They showed how each crisis involved a big claim on future government deficits.  Prices fall, banks get in trouble, governments will bail out banks, so governments will be in trouble.  Inflation lowers real salaries of government workers. And so on.

The "future" part is important. Earlier work on crises noticed that current debts or deficits were seldom large, governments in crises often had surprisingly large foreign currency reserves, and there were no signs of sudden monetary loosening.  This earlier absence of a cause problem had led to much of the multiple-equilibrium literature. But money is like stock, and its value today depends on future "fundamentals."

Monetary and fiscal views are related. The question really is whether the central bank can stop an inflation and currency collapse by force of will, or whether it will have to cave in to fiscal pressures.

Most basically, a currency, like any asset, has a "fundamental" value, like a present value of dividends; it may have a "liquidity" value, like money; and it may have a "sunspot" or "multiple equilibrium value." The question is, which component is really at work in an event like this one -- or, realistically, how much of each? The money and fiscal views also much more clearly bring the currency into the picture.

So, as I read the stories of Russia's troubles, I'm thinking about which broad category of ideas best helps me to digest it. You can guess which one I think fits best. Yes, everyone likes to read the paper and see how it proves they were right all along. But at least being able to do that is the first step.


On a second level, of course, there is the question whether prices and wages are sticky, whether "demand" or "supply" accounts for fluctuations, whether devaluations are great things to "stimulate" economies, and so forth.

Facts

1. Oil prices have gone down by half. Russia is a big exporter, and the Russian government gets a lot of revenue from oil exports, 45% by one media account.

2. The Ruble is collapsing. The graph below (from Bloomberg.com) shows the fall's slow slide, the sharp slide in early December, the big collapse two weeks ago, a rebound following various moves (more below) and a new sharp decline as I write.

5. Sanctions are biting. Sanctions cut off Russian businesses and banks from foreign financial markets. The big problem is not so much financing new investment, but that they now cannot roll over debts. (Sanctions seem to mean you can't borrow new money, but you still have to repay the old money.)

Paul Gregory, who among other things writes a blog about Russia, had a presicent Forbes article last August:

Russia, with its thin capital markets, obtains half of its capital abroad. If cut off from European, American, and Japanese capital cold turkey, Russia might be able to replace some of its losses from non-sanctioning countries, like China, but only partially and at a high price. [Many stories now in the news about Russia-China financial links.] 

Refinancing is a particularly harsh problem for Russia with its absence of rule of law. Lenders will lend only for short maturities. According to Russia’s central bank (CBR),  24 percent of the foreign debt of Russian banks and companies, or $157 billion, comes due in 2014 alone. Sanctions take the option of refinancing off the table.  Rosneft, the national oil company, has $15.9 billion maturing this year and $16.2 billion the next, for example, and it is only one of many companies in this fix. 

Remarkably, even unsanctioned Russian companies are frozen out of Western credit markets.  

5. There is a very interesting and quite murky debt situation, especially in banks.  Russian banks and businesses have a lot of foreign currency debt they can't repay or roll over.

The government debt/GDP ratio isn't that bad, and past deficits are not the trouble. Russia ran big trade surpluses, meaning there are foreign assets somewhere. But those may have all ended up as Russian owned London apartments and Swiss banks and not available to Russian banks and businesses.

Chain of events

The mid-December collapse happened around the Roseft bank story (below).  As I read it,  if markets sniff that foreign reserves are going to get spent fast to bail out favored cronies, then capital flight is on.  Fiscal theory and multiple equilibria paint similar pictures here. In a fiscal interpretation, news can come about how much of state assets are going to be used to support currency and government debt, and how much is going to line pockets of insiders. 

In addition, it must be on everyone's mind when capital controls are coming. Naturally, you want to get your money out ahead of capital controls. The fact that so much of our policy establishment now approves of capital controls means that controls are more likely, which means that crises are more likely. If capital controls were considered an awful step, like expropriating property or invading other countries, then people would be less likely to try to jump in advance of capital controls. 

The central bank responded by sharply raising interest rates to 18%, and interbank rates rose to 25%. That didn't seem to have much effect.  Long term rates went up sharply, all on their own. Inflation is already rising, with an official forecast of 11.5% for next year. We'll see what actually happens. 

Russian 10 year bond yields. Source: Financial Times

At this point, I was about to hit "send" on this post. Burnside Eichenbaum and Rebelo redux.  But then the Ruble bounced back.

On 12/25 Russia's finance minster declared the crisis "over" (WSJ "Russia Says Ruble Is Stable, but Economic Troubles Remain"). In addition to the interest rate increase, designed to make Rubles more attractive, factors cited included

exporters converted their dollar holdings to rubles to meet local tax payments due by the end of the month. [JC: and soaking up some Rubles] 

The ruble’s recovery this week was steered by the government’s order that major state companies sell foreign currencies, which applies to big exporters including Gazprom and Rosneft. Within the next two months, the companies will need to cut their foreign-currency holdings to levels of early October, which will fulfill the market demand for dollars and euros needed to repay foreign debt.

These are "voluntary" capital controls of the offer-you-can't-refuse sort. But none of these moves address the fundamental problems, so some frictions or multiple equilibrium story does come to mind first. The articles also mention thin markets around holidays. It's easier to move prices in thin markets.

But then as of the end of the year, the Ruble is heading down again, which looks to me like fundamentals taking over.

On 12/26 "Ruble’s Recovery Runs Out of Steam'' says the Wall Street Journal. Interestingly, Russian Finance Minister Siluanov has become a fiscal theorist when it comes to steps to help the Ruble.

 Mr. Siluanov admitted that Russia will need to adapt its budgets to “new economic realities.” 

The minister said that Russia will need to reassess its military spending amid slowing economic growth and reduced access to global capital markets as falling oil prices have hit the domestic economy hard. 

...“The budget structure is extremely ineffective. It needs to be changed in the conditions when we have limited access to new sources of income,” Mr. Siluanov said.

The macroeconomic stories are interesting as well.  WSJ echoed the interest-rate-centric view of macroeconomic effects :

...the sharp interest-rate increase that the central bank imposed last week to stem the ruble’s slide, along with widening problems in the banking sector, has darkened the outlook for Russia’s economy dramatically.

Really? Of all the problems in Russia's economy too high interest rates and lack of "demand" are the most important?  Also, we will see whether 18% turns out to be a low or a high real interest rate.

Devaluation and inflation are  supposed to boost economies because prices and wages are sticky. There were great news stories about a crush to buy Ipads at the Apple store in Moscow, and Apple eventually closing it down because they couldn't keep up with currency changes. Ipads seem to be the new Krugerrands. So, there's a little bit of sticky price demand, I guess. Lasting maybe a day.

Some additional readings

Falling oil, rising cucumber prices: how much trouble is Russia in?

Recent calculations show that Russia needs oil to stick to around $105 a barrel for its budget to break-even. .

Russia’s external debt amounted to $731bn in June 2014. 74% of this is denominated in foreign currency, meaning that the depreciation of the rouble makes it more expensive to repay... $35bn of debts are due in December alone.

The largest component of debt is attributable to banks and other non-government sectors, which together owe more than $650bn to foreign lenders, 17% of which is short-term, and much of which (46%) is attributable to state-owned banks and enterprises.

Sanctions too are starting to bite. Companies directly under western sanctions account for about 60% of the total debt due by the end of 2015 (£).

While most of these companies are (for now) relatively cash rich, the fact that many are sanctioned from raising finance means that they cannot simply roll over debt by borrowing externally, and need to instead buy dollars in the market. There also appears to be growing evidence (£) of concerned western banks and financial institutions refusing to finance even those Russian companies that are not on the blacklist.

It is worth keeping in mind at this point that while not being state-run, private companies are often merely quasi-sovereign in Russia, and ownership structures are rather fluid and can change quite rapidly - the potential weight of debt on government finances goes beyond only state-run companies.

... banks alone have $192bn external debt (about 10% of GDP), up from $170bn in 2008, and from $18bn in 1998....The key point here is that Russia’s banks have few dollar assets to set against their dollar debts.

As an example of some of this debt issues, lies the Rosenft loan: Leonid Bershinsky (Dec 15)

Russia's state-owned oil company, Rosneft, raised 625 billion rubles ($10.8 billion at that day's exchange rate) with a bond issue that had a lower yield than Russian government bonds of similar maturity. The Central Bank quickly added the bonds to the list of securities it would accept as collateral from banks seeking liquidity. The deal was opaque,...

Central Bank technocrats have been worried that the government would force them to print rubles for the direct funding of industries, primarily the military industrial complex and the state companies run by Putin friends. The Central Bank's obvious complicity in the Rosneft deal means the pressure is on, and the Central Bank is caving.

Andrew Kramer at the New York Times (dec 16)

He [Putin] faces a particularly delicate dance with Russian companies, which are under significant financing strains. Russian corporations and banks are scheduled to repay $30 billion in foreign loans this month.

And next year, about $130 billion will be due. There is no obvious source for these hard currency payments other than the central bank, whose credibility is now being called into question.

Rosneft, for example, had been clamoring for months for a government bailout to refinance debt the company ran up while making acquisitions when oil prices were high. Because of sanctions, those loans cannot be rolled over with Western banks. Debt payments are coming due later this month.

... With the oil giant in a bind, the central bank ruled that it would accept Rosneft bonds held by commercial banks as collateral for loans.

Rosneft issued 625 billion rubles about $10.9 billion at the exchange rate at the time, in new bonds on Friday. The identities of the buyers were not publicly disclosed, but analysts say that large state banks bought the issue.

When these banks deposit the bonds with the central bank in exchange for loans, Rosneft will have been financed, in effect, with an emission of rubles from the central bank. The deal roiled the ruble on Monday, according to analysts.

The reason for Monday’s currency crash is “well known,” Boris Y. Nemtsov, a former deputy prime minister who is now in the political opposition, wrote on his Facebook page. “The central bank started the printing press to help the Sechin-Putin business, and gave Rosneft 625 billion newly printed rubles. The money immediately appeared on the currency market, and the rate collapsed.” Rosneft, in a statement, denied it had exchanged funds raised from the bonds for hard currency.

Holman Jenkins at Wall Street Journal

Which brings us to Rosneft . This week’s sharp plunge in the ruble was less linked to oil than to a mysterious “bond offering” by the state-controlled Russian oil giant, indirectly financed by Russia’s central bank. 

On Monday, Rosneft felt obliged to issue a one-paragraph statement denying that the ruble proceeds would be used to buy foreign currencies to meet Rosneft’s hefty foreign-debt repayments.

On Why the Ruble is Collapsing,

The value of the ruble dropped as much as 19 percent in the last 24 hours, the worst single-day drop for the ruble in 16 years. Now Russians are reportedly bum-rushing malls to swap cash for washing machines, TVs, or laptops—anything that seems as if it might hold value better than paper money, whose worth is evaporating in real time....

Russia's Central Bank has been trying to fight this trend, first by using its stockpile of foreign currencies to go out into the market and buy rubles, hoping to prop up the price. Then, early in the morning on Tuesday in Moscow, the Central Bank announced a gigantic interest rate increase. The idea is that if you offer people higher interest rates, they're more likely to keep their money in rubles.

Neither move has worked. 

Neil Irwin at New York Times

But interest rate increases aren’t free. Higher interest rates are sure to choke off any chance for growth in a Russian economy that is already reeling from falling oil prices.

Financial Times

The main reseller of Apple in Moscow, re:Store, saw sales two to three times higher than normal at one central branch, according to a salesman, reports Jack Farchy in Moscow.
Another store visited by the FT had sold out of iPhone 6's and iPad Airs entirely by Tuesday night (see first picture).

Marginal revolution commentary and links.

A nice graph from Bloomberg's Henry Meyer and Ilya Arkhipov capturing some of the events:

Paulina Peavy Interview on Long John Nebel Radio Show 1958

The intelligence speaking through Paulina Peavy said: " . . . we are using her exactly as you use your microphone.  We are beings existing in a world of too high frequency for your comprehension."  (This photo of  'Pauline Peavy' is from the 1971 book The Age of Flying Saucers by Paris Flammonde.)

  

 

Upon listening to a commercial audio CD with MP3 files of 1950s radio shows hosted by 'Long John Nebel,' the most intriguing guest was described in the show descriptions with her name misspelled: "A Mrs. Pievey went into a trance and communicated with spirits."  The expression 'channeler' wasn't a commonly known term at the time so there was some difficulty for Nebel when he attempted to explain her circumstances.  Joining Nebel in asking questions of the interview guests were a couple of "The Party Line" recurring panelists.

During this January 1958 broadcast, the predominant interview subject was 'the mystic barber' of Brooklyn, Andy Sinatra, who wore a metal headband and professed to have experience with astral projection.  At one point Sinatra said: "The public likes to laugh and wants a little comedy once in a while . . . I'm putting on a show . . . It's based on certain real things . . . This [astral projection] is my own experience."

When Nebel first spoke about the possibility of talking with Peavy later in the broadcast, he mentioned that she had brought with her one painting and a number of photos of other paintings plus some masks.  He said: "And this lady goes into a trance.  She goes to different dimensions and when she's in these different dimensions she paints these pictures.  Now I know nothing about the trance state or the other dimensions but the pictures are beautiful.  There's no two ways about that."

Approximately two hours later, Nebel introduced Paulina Peavy as "a lady who goes into a trance and during the time that she's in the trance she receives inspirations to paint.  Now I possibly have not phrased this right but this is about all I know at the moment.  I can say this to you though — that Pauline Peavy is an artist, inventor, designer, sculptor, poet, writer and lecturer."  Nebel continued:

And she was born in Colorado City.  She lived most of her adult life on the West Coast.  And she has received degrees in art and education from leading colleges and schools as well as honors and awards in art and architecture.  Possibly some of you people have seen her work at the various art galleries.  Now, Miss Peavy is sitting to my right.  To her left opposite me is Dave Bell.  To my left, opposite Miss Peavy is Charles Leedham.  Miss Peavy has a very, very unusual mask on.  To describe the mask, I would say that it looks like a base color of chartreuse with gray stripes — sort of charcoal gray stripes running through it diagonally.  There are many fancy trimmings around it.  It's a very large mask that covers at least three-quarters of her face.  There are pearls on both sides of the mask and a number of pieces of metal.  I would say it's a very, very attractive and a very beautiful work of art as far as masks are concerned.  And she tells us that it's important that she wears this mask during the time that she's in the trance state.

Nebel began the interview by asking her when did she first realize that she could go into a trance.   Peavy showed none of Sinatra's jocularity as she answered questions and this sensibility was consistent throughout the interview.  She replied: "At least twenty-five years ago.  I heard voices — very strange voices coming through me."  Nebel said, "Coming through you?"  She replied, "Yes — startled me a very great deal although I had been investigating the mystery of my paintings, which started coming twenty-five years ago."  As Nebel began asking her a new question, Peavy began loudly grunting.  She attempted to explain while going in and out of trance.

Now — now — I explain — when — when such power moves in, the strange sounds are caused by the power taking over.  You see Paulina squirming about because we are putting into her being high voltage and in order to receive us and maintain herself, she has had to build up her electrodes to meet our high voltage.  (change in voice tone)  Well that's the way they come in.  And then they release me and then apparently I talk.

Nebel asked her, "How do you feel when you're in a trance, Pauline?"

Well, I feel very exhilarated and (change in voice tone) now, as you will see, this is not the voice of Paulina for we have not released her entirely.  Although we have prepared her that when we come through we are using her exactly as you use your microphone.  We are beings existing in a world of too high frequency for your comprehension.  And we need to lower our frequency by this manner that our thought will be audible to you.  We use Paulina who uses us.  Together, we have painted many thousands of paintings in her — several hundred, probably near a thousand for the purpose of introducing ourselves to you in the way that we desire to be introduced.  For you have many ideas regarding us that are your ideas and they are not our reality.  And as we come to you in many ways and you call us 'flying saucers,' 'space men,' 'Venusians,' and other of your names we need to introduce ourselves in our language.  And our language is not a babble tongue for we communicate with each other in our world by sending or radiographing, as you would say, pictures.  (change in voice tone)  I think the pause is for questions.

Peavy went on to explain:

The beings that I entertain are universal beings who do not render (change in voice tone) individual personalities as you do in your world.  We are universal beings.  We do not place upon ourselves labels as do you to call ourselves John Doe forever for we now, hold your hats — for we have found perpetuity of life.  And it would be very droll if we called ourselves Paulina Peavy for the rest — from now on.  Therefore, we come and many times when you hear one voice you hear a multitude of us.  For we are in a world whereby we have thoughts simultaneously with uncountable legions of us.  We do not give Paulina personal names for us.  She has a name which is her name when she speaks to us.  We do not use your names in our world. 

There was another pause and Dave Bell asked, "Are the people in this world like we are?"

We are your elders.  We ages ago were like you, as you.  We have progressed by many eons of time beyond your station and now we exist as a perfected—you would say—seed.  When you see us and we are able to reduce our high frequency waves to come into your sight in your skies; and you see us as flying saucers, we are showing you our planetary form for we are a single cell with one eye.  The original eye.  Out of that single cell we mutate into creature form as you take your birth.

Dave Bell said, "Then the explanation of the flying saucers is an attempt of these people to enter into our world?"

We have never departed you and your world.  And the world is not as you think you see it with your two outer eyes.  You might say the world, id (or "ID"), an atomic nature of matter.  We do not see skies like you see skies.  We see into the eye of the atom.  Even the eye of the atom that you smash.  And you know that when you smash an atom you see volumes of infinity emerging from that microscopic eye.  We indwell, ourselves, our eye — we are interspacial beings coming out, emerging or slowing up our molecular rate that you might perceive us. 

Nebel asked Dave to give her a glass of water and permit her to rest.  Before Peavy resumed her participation in the broadcast, Andy Sinatra was interviewed further.  At one point Nebel asked Sinatra to "do a little spacetalk for us."  Sinatra cooperated and the syllables sounded to Leedham as being like American Indian languages.  Nebel and his panelists were soon wisecracking and convulsing with laughter.  At one point Andy mentioned having been with Peavy when he experimented with her guide: "He said to us that if there was nine people there . . . he would make himself visible.  But we didn't have nine people that were in harmonious vibration."  Later, Nebel directed Peavy to ask her spirit mentor to translate the space language that would be given by 'the mystic barber.'  After Nebel stated that Peavy had her mask on again and he reintroduced her to the listening audience, she began groaning and there was a resumption of the trance communication.

We travel in space from a point of time to a point of time, which tells you absolutely nothing, meaning that we are almost as bewildered as you about space travel.  (pause)  We make our food by the power of thought.  The best that we can explain to you is that we counteract the disintegration of atoms in space.  And our food is wholly made by the power of thought as we travel in our state of electronic fluidity.  (pause)  You have a saying that your home is where you hang your hat.  Our home is where we think it is.  As we know no boundaries like you, we move through walls—your walls—faster than the speed of light like your radio beams move through obstacles that are obstacles only to you.  (pause and then the voice makes sounds similar to Andy's chanting)  Oh ho ho ho ho — ho ho ho, yes Andy, ha aa ah — yeah ha ha.  We did visit you in behalf of our work.  As you saw it.   When we thank you for your currupo — cooperation in our bequest.  For we asked you not to tamper with Paulina and us in our connection and you so graciously acceded.  Time writes a heavy hand for seers.  We need all the cooperation from your men of science that we can get.  We need to work with you to make this matter understandable which means scientific — this matter of the sensitives of your world who have been contacting us throughout the ages and who have not been understood.  We see no more burning of your Joan of Arcs but we do see ridicule by those who are not enlightened regarding this relay system.  A voice projection — astro-projection as you call it.  Andrew, when we take you to a planet called the moon, we take you to a solar system within yourself in correlation to the outer, as you call, solar system.  (pause)  We have helped you make your headband.  We have given you all the secrets for such a headband we placed upon Paulina twenty years ago — an unseen magnetic headband.  We placed a magnetic field upon her head and upon her right ear which has been there for twenty-fi(ve) — twenty years.  And longer but twenty years to her knowledge.  Permitting us to motivate through her vocaluary gland with her ego still conscious.  Ha ha ha ha ha ha — (utterances like Indian chanting) — We are so elated that such a program as this is possible in your age.  We are so happy to find your open-minded attitude toward our contact with you to the state whereby you can broadcast our voice — our voices.   Andrew, the bread of life is life.  Your questions.  (pause then change of voice tone)  If you wish to ask about their world — now, you see, I — when I think I'm out of the trance (change of voice tone) I'm not.  I mean that their voices and mine sometime are simultaneous. 

Nebel asked, "I wonder if you could — could we get any information about Sputnik?  The Earth satellite."

We regret to say that matter made by the hand cannot sustain by safe travel.  We know that you gain great knowledges.  What a fantastic thing to send — a body hurtling out into an orbit.  How wonderful if you could gather together your admiration for scientific achievement forgetting your desire to blow somebody to bits.  We ask you to please change the subject.  We are too adamant.  You would not like it were we to go all out.

Charles Leedham stated, "You would prefer questions on another subject, is that it?"

Questions about our existence we shall ask.

Nebel then said, "I think in all fairness, Charles, I've been informed by one of the — Miss Peavy's friends who happen to be up here at the present time that she's under terrific strain and that we shouldn't talk any more to the spirit voice — permit Miss Peavy to relax."  Then Andy Sinatra was interviewed once more.  

This January 1958 broadcast recording is now available for listening on You Tube.

This week I conducted an Internet search to see what other information is available about Pauline/Paulina Peavy (1901-1999).  In addition to a short biography at AskART citing Artists in California 1786-1940 by Edan Hughes, there is a patent description for Beneficial skin and tissue cover device, Trademark data, and artist file data for holdings at the Frick Collection and Frick Art Reference Library.  

Two noteworthy articles were found.  In an archive.org text entitled Architect and Engineer with the date of January 1944, an article was found with the headline "California Artist's Work Reviewed by 'Art Digest.'"  There was commentary about the "astonishing paintings" by "Mrs. Pauline Peavy of California."  A reviewer with the initials 'M.R.' compared her work with Salvador Dali's and wrote: "The keynote of the exhibition of 59 paintings, the work of the last seven years, is a 14-foot long panel of 'The Last Supper.'  In colors like Byzantine enamels, she has painted the figure of Christ as compassionate, of pure thought and absolute justice and the disciples as representing various aspects of our character."

An article published in the Brooklyn Eagle on November 25, 1946 included a photograph of Peavy and quoted Peavy about how life on Earth would improve once the secret of atomic energy is discovered: "We should then be able to make use of atomic energy to multiply, rather than use its power to disintegrate as the atomic bomb does now."

 

Merry Christmas! | Copper Tannenbaum Ornaments

I write this curled up on the couch, sipping hot holiday spice tea (compliments of Santa), with the Christmas tree lighting the room. Gathering Blue by Lois Lowry is on the couch beside me, and the rest of my family is asleep. This Christmas was beautiful; while we officially began our celebration with Mass on Christmas Eve, we really began Christmas break a few days ago when both my brother and I returned from college and my dad took off work.

A tornado of little children tore through our living room on a mission to create messes. The remainders of a long day are strewn every which way. Instrumental Christmas music is playing and there is the promise of a day of unwinding and cleaning before more family events.

I hope that all of you have had beautiful Christmases, full of family and friends and crazy weird traditions!

My Christmas gift, both to myself and from my parents, is a TORCH!

That's right-- I now have a propane/oxygen little torch that can heat up to, you know, just a couple thousand degrees. I also now have a crockpot labeled "poison" (for heating up pickle, a substance which cleans metal when it is discolored from heat and flux). I can now solder!!!!!

My little sister and I test-ran the torch, my metal stamping set, and my miniature hacksaw to create  these Christmas gifts! These Christmas tree ornaments are handmade from copper and brass.

My eleven-year-old sister cut out the brass banners and stamped the numbers on them. (Can you believe it?!) She requested to be my apprentice over Christmas break, and while she sometimes makes things take forever, on the whole she's actually been very helpful and is becoming quite skilled.

The trees are hand-cut from copper which I etched and then drilled.

Normally I would etch copper with ferric chloride, but I recently ran out and discovered that buying more would be quite expensive. I was using etchant from my grandpa's old PCB etchant kit before. So, I did some research, and my dad and I mixed up an acid bath that is essentially a cupric chloride --> cuprous chloride etchant. So now I also have an apple juice container with bright yellow duct tape that shouts "DANGER: Poison" in thick Sharpie!

Unfortunately I had already etched quite a few pieces of copper by the time I got around to etching the trees and didn't properly reconstitute the solution, so the etch was not very deep. That or my resist came off. I'm not 100% sure what went wrong.

I think that the idea of little handdrawn ornaments comes through nonetheless.

I then soldered the stamped brass banner onto the tree (THAT was a process because I had a difficult time getting the whole copper tree up to temperature).

As you can see, my sister and I had a lot of stamping to do. Each letter is hammered in by hand.

At the very end of the process, we submerged the ornaments in a Liver of Sulfur solution, sanded it down, and sealed the pieces with a spray expoy resin.

Then, we strung glass pearls onto headpins, and made a pearled tree hook from an eye pin!

I am so fascinated by all of these new metalwork processes that I am discovering. :)

My grandparents gifted me a dip pen for calligraphy (and for my upcoming illustration class) so I'll be experimenting with that, too! I've been using a worn-out fountain pen with three nibs since I was eleven or twelve.

But that is not now. Now is time for bed, and visions of sugar plum fairies-- it's almost surreally peaceful tonight.

Inequality at WSJ -- the oped

This is a Wall Street Journal oped on inequality. With 30 days passed, I can post it here. It's a much edited version of my evolving "Why and How we Care About Inequality" essay.


What the ‘Inequality’ Warriors Really Want

Progressives decry inequality as the world’s most pressing economic problem. In its name, they urge much greater income and wealth taxation, especially of the reviled top 1% of earners, along with more government spending and controls—higher minimum wages, “living” wages, comparable worth directives, CEO pay caps, etc.

Inequality may be a symptom of economic problems. But why is inequality itself an economic problem? If some get rich and others get richer, who cares? If we all become poor equally, is that not a problem? Why not fix policies and problems that make it harder to earn more?


Yes, the reported taxable income and wealth earned by the top 1% may have grown faster than for the rest. This could be good inequality—entrepreneurs start companies, develop new products and services, and get rich from a tiny fraction of the social benefit. Or it could be bad inequality—crony capitalists who get rich by exploiting favors from government. Most U.S. billionaires are entrepreneurs from modest backgrounds, operating in competitive new industries, suggesting the former.

But there are many other kinds and sources of inequality. The returns to skill have increased. People who can use or program computers, do math or run organizations have enjoyed relative wage increases. But why don’t others observe these returns, get skills and compete away the skill premium? A big reason: awful public schools dominated by teachers unions, which leave kids unprepared even to enter college. Limits on high-skill immigration also raise the skill premium.

Americans stuck in a cycle of terrible early-child experiences, substance abuse, broken families, unemployment and criminality represent a different source of inequality. Their problems have proven immune to floods of government money. And government programs and drug laws are arguably part of the problem.

These problems, and many like them, have nothing to do with a rise in top 1% incomes and wealth.

Recognizing, I think, this logic, inequality warriors go on to argue that inequality is a problem because it causes other social or economic ills. A recent Standard & Poor’s report sums up some of these assertions: “As income inequality increased before the [2008 financial] crisis, less affluent households took on more and more debt to keep up—or, in this case, catch up—with the Joneses. ” In a 2011 Vanity Fair article, Columbia University economist Joe Stiglitz wrote that inequality causes a “lifestyle effect . . . people outside the top 1 percent increasingly live beyond their means.’’ He called it “trickle-down behaviorism.”

I see. A fry cook in Fresno hears that more hedge-fund managers are flying in private jets. So he buys a pickup he can’t afford. They are saying that we must tax away wealth to encourage thrift in the lower classes.

Here’s another claim: Inequality is a problem because rich people save too much. So, by transferring money from rich to poor, we can increase overall consumption and escape “secular stagnation.”

I see. Now we need to forcibly transfer wealth to solve our deep problem of national thriftiness.

You can see in these examples that the arguments are made up to justify a pre-existing answer. If these were really the problems to be solved, each has much more natural solutions.

Is eliminating the rich, to eliminate envy of their lifestyle, really the best way to stimulate savings? Might not, say, fixing the large taxation of savings in means-tested social programs make some sense? If lifestyle envy really is the mechanism, would it not be more effective to ban “Keeping Up With the Kardashians”?

If we redistribute because lack of Keynesian “spending” causes “secular stagnation”—a big if—then we should transfer money from all the thrifty, even poor, to all the big spenders, especially the McMansion owners with new Teslas and maxed-out credit cards. Is that an offensive policy? Yes. Well, maybe this wasn’t about “spending” after all.

There is a lot of fashionable talk about “redistribution” that’s not really the agenda. Even sky-high income and wealth taxes would not raise much revenue for very long, and any revenue is likely to fund government programs, not checks to the needy. Most inequality warriors, including President Obama, forthrightly advocate taxation to level incomes in the name of “fairness,” even if those taxes raise little or no revenue.

When you get past this kind of balderdash, most inequality warriors get down to the real problem they see: money and politics. They think money is corrupting politics, and they want to take away the money to purify the politics. As Berkeley economist Emmanuel Saez wrote for his 2013 Arrow lecture at Stanford University: “top income shares matter” because the “surge in top incomes gives top earners more ability to influence [the] political process.”

A critique of rent-seeking and political cronyism is well taken, and echoes from the left to libertarians. But if abuse of government power is the problem, increasing government power is a most unlikely solution.

If we increase the top federal income-tax rate to 90%, will that not just dramatically increase the demand for lawyers, lobbyists, loopholes, connections, favors and special deals? Inequality warriors think not. Mr. Stiglitz, for example, writes that “wealth is a main determinant of power.” If the state grabs the wealth, even if fairly earned, then the state can benevolently exercise its power on behalf of the common person.

No. Cronyism results when power determines wealth. Government power inevitably invites the trade of regulatory favors for political support. We limit rent-seeking by limiting the government’s ability to hand out goodies.

So when all is said and done, the inequality warriors want the government to confiscate wealth and control incomes so that wealthy individuals cannot influence politics in directions they don’t like. Koch brothers, no. Public-employee unions, yes. This goal, at least, makes perfect logical sense. And it is truly scary.

Prosperity should be our goal. And the secrets of prosperity are simple and old-fashioned: property rights, rule of law, economic and political freedom. A limited government providing competent institutions. Confiscatory taxation and extensive government control of incomes are not on the list.

Mr. Cochrane is a professor of finance at the University of Chicago Booth School of Business, a senior fellow at the Hoover Institution, and an adjunct scholar at the Cato Institute.

Autopsy

Autopsy for Keynesian Economics. (I don't get to pick the titles BTW) A Wall Street Journal Oped. I'm trying for something cheery at Christmas, and a response to the many recent opeds that ISLM is just great and winning the battle of ideas.  As usual, the whole thing will be here in a month.

This year the tide changed in the economy. Growth seems finally to be returning. The tide also changed in economic ideas. The brief resurgence of traditional Keynesian ideas is washing away from the world of economic policy.

No government is remotely likely to spend trillions of dollars or euros in the name of “stimulus,” financed by blowout borrowing. The euro is intact: Even the Greeks and Italians, after six years of advice that their problems can be solved with one more devaluation and inflation, are sticking with the euro and addressing—however slowly—structural “supply” problems instead.

Read more at WSJ...

Update: Hoover has an ungated version here;  Cato has an ungated version here.

Metaphorical Correlations Among 'Paranormal' Cases

This article offers some examples of recurring metaphors that can be found among diverse case studies involving 'paranormal' or 'unexplained phenomena,' encompassing clairvoyance and diverse cases of transcendental communication, including Electronic Voice Phenomena reported by Friedrich Jürgenson, an incident from contemporary spiritual medium Rosemary Altea's autobiography, a Leslie Flint Direct Voice audio recording, Ouija board communication in the 'Messages from Michael' case, Instrumental Transcommunication chronicled by Anabela Cardoso, an event in the career of physical medium Alec Harris, and an incident reported as chronicled in the nonfiction case study Testament.  Metaphorical parallels in these instance include an oceanic 'ship in the dark' and face masks.  The article concludes with several excerpts from the Edgar Cayce channeled reading transcripts. 

Voice Transmissions With The Deceased, an English translation of Sprechfunk mit Verstorbenen (1967) by Friedrich Jürgenson (1903 - 1987) can be read at www.worlditc.org.  Jürgenson was born in Odessa, Russia.  His early professional career in the fine arts spanned nine years of training and two years performing as a singer.  He then became a painter and his new occupation included exhibitions and traveling.  He also had done a few radio specials on cultural history with the Swedish Broadcasting Company, including a show about the end of the Tzarist empire that motivated him to research the case of Anastasia.  He was living in Stockholm in 1959 when on the morning of January 12 he set out to record birdsongs in a countryside garden.  When he listened to what had been recorded, he discovered what is now known as Electronic Voice Phenomena (EVP).  The book describes his investigation of the phenomena.  Further remarkable experiences occurred in July, as he wrote:

After some hours of concentrated listening, and getting used to the disturbing noises, a pleasant male voice started to emerge from the chaos of sounds.  The voice spoke English with deep conviction and an unusual intonation.

After a small pause the name "Churchill" was audible, then suddenly another male voice started to speak in German. Though speaking without an accent, the sentence came through ungrammatically.  The voice literally said, "Tsar-region we must springtime speak about . . ."

"Tsar-region," didn't that sound strange?  I immediately had to think about Anastasia.

"Friedrich, you're being observed . . ." added the same voice with firm emphasis.

Before the transmission ended, a sentence was thrust out very hurriedly: "Friedrich" the voice called out my name, "When you translate and interpret into German during the day, try to solve the truth every evening with the ship . . . with the ship in the dark!"

This charade-like phrase set my fantasy in motion. Though it left me puzzled, it became clear to me that the transmission was meant for me personally.

Many living well-known mediums who've written autobiographies include Rosemary Altea, John Edward, Sally Morgan and James Van Praagh.  Rosemary Altea chronicled how she came to be on a first name basis with her spirit guide while recounting the first part of her life story in The Eagle and the Rose (1995).  The beginning portion of the book is about her life in England where Altea was a divorced mother raising a ten-year-old daughter when she experienced her first unexpected trance.  It happened while she was describing her psychic experiences to a small gathering hosted by a local healer and his wife. 

The more I talked, the more I found I had to say, and then I saw it, quite naturally and quite clearly.  It was just like being in a cinema when the lights grow dim and the people all around you fade into the background.  Then the screen lights up, showing the picture bright and clear and larger than life, so all-consuming that it pulls you through the void which separates the real from the unreal, allowing you to become part of the scene being unfolded before you.

Altea recounted a vision of an ocean and an enormous gray battleship approaching.  She became aware of a lady standing on the deck wearing a gray dress with a badge and on her head was a gray bonnet that appeared similar to those seen worn by ladies of the Salvation Army.  Altea realized that the lady had no face.

I know this sounds incredible, but where her features should have been, there was none. No eyes, no nose, no mouth . . . just a blank mask.

As I watched, her arms reached out to me beseechingly, and I heard her voice, as if from nowhere, crying out for help.

The ship was sinking and just when Altea thought the vision was over, the whole thing started again "as though someone were rerunning a film."  As Altea's mediumship abilities began to develop, she was getting into bed one night and asked God to give her a sign if what she was doing was right.  The immediate response was Altea hearing what she described as "Angels — singing!"   They were singing the twenty-third psalm, "The Lord is my shepherd . . . "

Two weeks later, Altea went on her first visit to a spiritualist church in the city of Doncaster.   The following Friday, she attended another small gathering where the speaker, Mick McGuire, was a practicing healer who revealed himself to work with a spirit guide that was a Native American chief known as Red Feather.  When McGuire held her hands, she began to shake as she felt "strange and strong vibrations" run through her body.  He explained that the surge of energy was the result of his guide acknowledging her guide.  Researching the subject, she was struck by the fact that so many of these guides seemed to be American Indians.  It was something that seemed "farfetched" to her at the time.

In her book, Altea described her progress.  She participated each week in a 'circle' where she developed her mediumship abilities.  She eventually began to give psychic readings and found herself experiencing trance states.  In February 1982, her spirit guide made himself known by introducing himself speaking through her: "My name is Grey Eagle, and I am Apache."

Altea discovered that healing was an extension of her mediumship ability and today she is the founder of the Rosemary Altea Association of Healers, a charitable association based in England with patients worldwide.  To explain how this healing works, she mentioned "energy, universal . . . God . . . energy, that healing energy which a healer can 'plug' into in the same way we might use electricity, I liken it to that same electric power, unseen and intangible, but nevertheless just as real and much more powerful."

Infrared photo (leslieflint.com)

 

 

Direct Voice medium Leslie Flint's autobiography is Voices in the Dark: My Life as a Medium (1972).  In another book chronicling Flint's mediumship The Voice of Valentino (1965) by Lynn Russell, Direct Voice (disembodied) communications from an entity identifying himself as Hollywood actor Rudolph Valentino were contemplated by the author who mentioned that at times an "higher aspect" of Valentino could be distinguished.  Among the quoted communications presented by Lynn as manifesting the "higher aspect" were the following statements.

 

"We are one spirit although we are separate in ourselves, and because of that one spirit which flows through us all, we can forget ourselves; in humbleness only do we find our true selves, and in love our true service.  You are 'bodies' in a material world yet you are with me, One in Truth and Spirit.  WE ARE ALL OF THE SAME SOUL GROUP."

 

"We give you certain threads from This Side of life, certain facts connected with yourselves and your past existences, but you have to try to put them into pattern.  We help you, but it still depends on you yourselves, and by your own efforts, to make something of them."

After Rudy's discourse of December 16, 1958, the voice Lynn recognized as that of Dr. Charles Marshall was quoted: "You have received a talk . . . sermon . . . call it what you will, not from ONE, but from MANY, all flowing through the SAME CHANNEL OF SPIRIT.  All entwined one with the other into a COMPLETE WHOLE.  We work in harmony as one body of people.  That is why the work we hope to do through you can only be done when you yourselves are in harmony."

Personality variation is also noticeable upon listening to the different recordings of the Direct Voice medium's guide 'Mickey.'  The following excerpts are from "Mickey - 8402K - 44 minutes" / "Flint's guide Mickey on love and marriage," which is one of the audio recordings that may be heard at the website of The Leslie Flint Educational Trust (and at this site).  Mickey's discourse begins with his customary humorous banter with a noticeable Cockney accent yet his speech evolves into a dignified and purposeful meditation on the meaning of love.  Many familiar metaphors and terms found in diverse chronicles of transcendental communication are heard during this discourse, including words such as "unit," "brotherhood" and "peoples."

. . . [and if] people are mentally and spiritually as one, then obviously they'll be together but people don't see marriage as you do on this side.

 

 

. . . you're not exactly tied in any one direction or to any one person.  It's when you loosen the bonds and the shackles - I don't mean just marriage I'm talking about - you begin to open up and perceive that you're all part of the same Spirit.

 

 

. . . you're a mighty something in the great cosmos field . . . 

 

 

You've got to realize that you're part of a tremendous, well, something so enormous that your mind can't grasp it really but it's the same Spirit, the same Power, and everyone is part of it, a minute part, and yet can develop and become a huge part.  You must never sort of make yourself feel that you are restricted in a certain direction or with a certain one person.

 

 

All the time evolvement is taking place.  Change.  But it's so subtle.  All the time you're living in your world you're changing.  You're not now what you were yesterday completely and wholly so.

 

 

. . . the person you've known and loved is also comingling with enormous numbers of souls on this side.  They are all working together in a harmonious way not just for one person but for all humanity.

 

 

You see, over in your world it's as if you've got a facade.  And you to some extent can control that facade.  And sometimes you can say one thing and mean something else.  Sometimes you can be smiling at a person and yet deep down you're not feeling a bit like smiling.  And you're putting on a face.  People put on a face.  They have to learn how to put on a face in your world.  It's one of the tragedies of your world.  That you have to try to put on a face.  To hold yourself together.  To keep yourself whole.  ("TO")  To struggle against all sorts of things that happen that you don't even want other people to be conscious and aware of.  And then indeed I think it's true to say that to some extent everybody is living a lie.  Very few people are completely honest.  Even if they want to be they can’t be.   You see — if only you could see yourselves as we see you — and we love you for all your weaknesses.  And we love you for your strength.  And above all we love you because you're struggling.  And when a person's struggling, everyone who has a heart — and we all have that — want to help you.  We sometimes see humanity as if they're like drowning people who've been shipwrecked.  They thought they were going on a beautiful voyage and everything was going to be marvelous.  And suddenly something happens and the ship begins to go down.  And they're lost.  They can't swim.  They make the attempt and they're struggling in the water of life.  We look upon humanity as struggling to survive.  And what seemed when you started out to have been a wonderful voyage is full of disillusionments and disappointments.  Things don't turn out quite the way you think.  And it's a struggle and a fight to reach the shore.  And the shore is the realm of the spirit where you'll be welcomed with open arms.  But all the time you're struggling in the water we are there and we are trying to lift you out and to help you.  To keep your head above water.  Trying to teach you and make you realize ("THE") tremendous power of love that supports you and sustains you.  Don't get too depressed, don’t get so down. Try to realize that behind all the darkness there is the light.  Try to realize that the heat that is the sun that will come forth and illuminate the path.

A somewhat clearer recording of the tape of Mickey identified as having the topic of love and marriage is offered at http://psychictruth.info/DIRECT_VOICE_4.htm.

The 'Messages from Michael' case was profiled in a two-part article three years ago.  The book Messages from Michael (1979) recounts how a 32-year-old publicist became involved with Ouija board communication from a source quoted as having informed her group: "WE ARE AN ANCIENT ENTITY THAT COMES TO ALL WHO ASK.  OUR PURPOSE IS TO TEACH SOME UNDERSTANDING OF THE EVOLUTION ON THE PHYSICAL PLANE . . ."  After 'Michael' instructed that nurturing and food gathering are "INSTINCTIVE," the question was given: "But isn't instinct often really fear?"  This is the portion of the transcript that follows as presented in the book.

WORDS CAN BE USED AS A MASK.

A discourse followed about human fear of loss of control and of the unknown.  One of the group investigating the Ouija Board communications was described as being "concerned about the religious implications of what Michael has been saying" and was quoted as having asked:

"The Bible says that perfect love casts out all fear.  Are you saying that it doesn't?"

DO YOU THINK YOU HAVE EXPERIENCED PERFECT LOVE, EMILY?  LOVING THE CREATIVE FORCE ITSELF REQUIRES SEPARATION FROM ANY PERSONIFICATION.



Anabela Cardoso wrote about her research and experiences with Instrumental Transcommunication in Electronic Voices (2010). The career diplomat based in Spain recounted her experimentation and observations about the phenomena. 

I have tried, in this book, to convey to the reader without exaggeration the process of deep transformation and of consciousness expansion that this extraordinary life experience has brought about in me.

She recounted her great surprise upon hearing her first 'Direct Radio Voice' from the loudspeaker of an old valve radio in March 1998: "The speech was quite long and consisted of a number of sentences . . . but at the time, under the shock, I could only understand 'dificil' (difficult) and 'outro mundo' (another world).

Another DRV message in Portuguese was understood and translated to English as: "We speak from Rio do Tempo Station . . .," thus correlating with the contact source (Zeitstrom in German and Timestream in English) known to Anabela from what she had learned about the research of other investigators.  One incident described utilized "the transpicture of a mask."  Anabela wrote, ". . . the beautiful, elusive face of a woman half-covered by a sliding mask appeared recorded on the video tape."  A preceding ITC message had also included the expression "máscara de escultor" (sculptor's mask).  She "asked Rio do Tempo what the deep meaning of the mask was."  The English translation of the reply is "The mask is our way to tell you that our world unveils the truth."

Anabela commented about the Technician's voice that she had heard in some of the Harsch-Fischbacks' recordings, ". . . I suppose the high entity known as the Technician can produce many different voices. This would justify what Rio do Tempo once told me about communications with the high entity whom I longed to speak with — 'But you have spoken with him many times!'"

Considering ITC experimenters' impressions that the unseen communicators seem 'to know all their thoughts,' she concurred: "This certainly seems to be true . . ."

Anabela advised that one should avoid generalizations about ITC voices and research —

I often employ the word 'sometimes' when I speak of psychophonic events because, in my opinion, this is an important precaution.  To my knowledge, there have always been exceptions to any generalization about Instrumental Transcommunication research and its results.

As mentioned in the previous blog article "The Ectoplasmic Flying Saucer", there was an incident involving masked being at a seance of entranced physical (or materialization) medium Alec Harris in South Africa.

A tall Spirit materialised wearing a mask which covered his whole face leaving only his eyes visible.  This figure approached Hyman and taking him by the hand led him to the cabinet.  Then in a serious voice he said: "I want to tell you that flying saucers do exist, although your world is sceptical of any reports of such.  But I say to you that they will one day be an established fact, and will arrive on your planet before man destroys himself; but the time is not yet ripe."

With that he turned and disappeared into the darkness of the cabinet, only to return a few seconds later carrying a large model of a flying saucer . . .

 

Similarly, when Truman Bethurum (the topic of some previous blog articles) described his visits aboard a flying saucer he encountered a beautiful female captain just over four feet tall and men estimated as being between four feet eight inches to around five feet tall: "Their dark olive hued faces were bland and without lines or blemishes, like the skin was taut and hard over their bone structure."  He described the faces as "masklike" and being "without beard or mustache."

An incident involving a mask is chronicled in Testament (1997), the case study of my surprising spiritual awakening (Tape #5, Side #2B).  Prior to attending the funeral for Jearld Carlton Bell, I was interviewing the family and Twyla Eller described an odd incident that had occurred involving the audible voice phenomena that the family often heard. 

Once he told Mama he was going to show itself.  He said, "COME ROLL YOUR BLANKET BACK AND I'LL SHOW YOU MYSELF."  It looked like there was a body laying there and she pulled the blanket back.  There was a mask there.  Wasn't it a Halloween mask that you found after Michael told you to pull back the blanket to see what was there?  He said "HA HA HA HA HA HA HA HA."

In several of the Edgar Cayce channeled reading transcripts among the many that have been preserved, the mask and ship metaphors are topics for commentary by the transcendental communicator speaking through the body of the hypnotically entranced Edgar Cayce.  In 1223-4 of October 28, 1940, a housewife received instruction about "the sojourns in the earth and their expression, their influence in the present" prior to some observations about "the abilities of the entity then in the present" with the following being stated.

42. At once the entity may ask, - as so much gain was made, why the path so often seeming uneven; oh, so rocky?

43. "BE THOU FAITHFUL UNTO THE END!"

44. Hence the meaning of the shield, the feathers, the mask; all that He has given to all.

45. Hold thou to the faith in Him.

46. As to the abilities, - the home, the young - THAT is the developing way.

47. As to the expression or outlet, - let it be in art, especially as in the decorating of china. And in the decorating, forget not the sea blues, the sea greens - as combined with nature.

48. What a beautiful pattern would be the seaweed and the greens of same!

When the housewife said: "Do I have any latent talent that should be developed?," the answer was given —

The abilities of influencing groups, as indicated.  Do not feel that self is causing a closing of possibilities; rather with the practical manner give expressions to those things that have a spiritual import; not as in a dictatorial manner - as the shield or the mask would indicate, but rather in that manner as will cause others to THINK.  For, the mind is the builder; and how oft in many is the thinking done by others!

In 900-102 of July 31, 1925, a stockbroker sought "interpretation and lessons" from two dreams he had experienced.  Here is the portion of the transcript relating to the second of these dreams.

4. (Q) Wednesday Morning, July 29, 1925, at home in Deal.  Was seated in a sort of grandstand seat on the beach and another man sat next to me.  We looked out to sea and there close to the beach was what seemed the hulk of a wrecked boat, rising and lowering in the sea.  "It is now coming mighty close to land and to us," I said to my companion.  "Yes," he nodded, "They can't pump the water out of that!"  Up and down, up and down, rising and lowering with the waves, rose and fell this monster and nearer and nearer it came to us, until it was almost on top of us and I could see the water filling up and rushing out of the holes in the side. Then the monster hulk, that appeared as a drifted wreck ship, seemed up on the beach, still rising and falling, the water filling it up and rushing out of it again.  I wondered why they didn't pump all the water out and again the other man said, "THEY CAN'T DO IT - THEY CAN'T PUMP THE WATER OUT OF THAT!"  Then I ran up this monster, still rising and falling, filling and emptying with water, and I noticed the old wooden step affair of the body and thought how the water would act to deteriorate and disintegrate those wooden steps and how they would return to another form of matter and then in last analysis were the atom, which is but the phenomenon of a spiritual force.  Then I entered the stage part of a theatre and looked back to find [137], [140] and my usual companions.  I looked at the audience.  I went back and joined my crowd.  "What will we do to-night?" they asked.  "Play 21 or gamble," they said.  I looked back at the theatre. Something felt wrong.

(A) In this representation of the action of subconscious force on mental proclivities of body-mind, with the spiritual elements and truths as are being studied by the individual, are brought through the vision, the lessons, as has been given, of the oneness of all force, and the recognition of same by the individual mind, yet the inability of some others, with whom the entity contacts, to at first gain such conception of truths as are presented from time to time.  In the boat, as a wreck, we find there presented the truth in religious thought as is adrift, and bearing down upon others in no uncertain manner, recognized by others as might be made whole by action from within, yet this seems inaccessible to many.  The resting on shore representing the position to which same has come.  The going on same, with the taking of cognizance of conditions as were apparent on same, the entity's entering into that ability to be of assistance and aid to such conditions at the present time, with the knowledge of the necessity of the stepping stones to the new thought must be made safe and secure for all.  The seeing in the theatre representing the manner in which some would view such conditions, by the action of the individual, yet the knowledge of each, or of some of group, that something must be attempted and done, the recognition of conditions unsettled in the minds of many, and the ability of the one to settle same.  More of these will be seen again.  Follow then in that channel and way in which has been shown that these are presentations of thought and lesson from which the body must gain that knowledge to which it will gradually build to that position in which he must present the lessons and the truths that are to be given to the peoples.

12/28/14 Update:  In 2014 nineteen articles were published at this blog that considered aspects of the JZ Knight/Ramtha case, including "Ramtha: An Introduction to Unlimitedness" and "Guidelines for Spiritual Healing".  During a 2014 interview, Ramtha mentioned soon after beginning the conversation with radio talk show host Rob Simone, ". . . we in the end have to live with our thoughts and our nightmares — and put on a mask the following day and be a jolly entity.  And no one would deeply suspect how deep the scars of insecurity truly lie."  Ramtha was discussing the movie "What the Bleep Do We Know" and observed: " . . . its cult supremacy opened the door for so many documentaries to be made and telly shows to be made without the commentation of detractors . . . and that was a great breakthrough in mind control."  Ramtha also commented: "All of the scientists loved that woman who spoke in the beginning.  Until they were notified I was a channel to being and then they threw it away.  My my."  Ramtha laughed.