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Saturday, July 23, 2011

More Thoughts on the Financial Rewards of a Good Imagination

D.R. U.S. versionThe Daily Reckoning U.S. Edition Home . Archives . Unsubscribe
More Sense In One Issue Than A Month of CNBC
The Daily Reckoning | Saturday, July 23, 2011

  • The destructive power of a currency crisis...lessons from history,
  • Readers weigh in on education, a(nother) failure of government and starting from scratch,
  • Plus, all the rest of this week's reckonings, archived for your after school reading...
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Joel Bowman, hecking in from Buenos Aires, Argentina...

We're trying something a little different this weekend, Fellow Reckoner. We're "using our imagination," as Eric might say. Actually, it's not that exciting...not like a new bike or a free lunch. Really, it's just a format change. Instead of posting a link to the week's featured column, we're just going to drop the whole thing in here. That's one less click for you...and a whole lotta extra email length for us.

Let us know what you think, both about Eric's featured column (below) and the new format (umm...also below). Enjoy...

Dots
Investing Ahead of the Curve
More Thoughts on the Financial Rewards of a Good Imagination
Eric Fry
Eric Fry
A fertile imagination is usually the enemy of successful investing.

Imaginative investors tend to see their stocks as the "next Microsoft" or the "next Berkshire Hathaway," even when the stocks they own are much closer to being the next Enron or WorldCom. That's why successful investors are much more likely to possess a skeptical eye than a fertile imagination.

"But on the threshold of a crisis," as we observed in yesterday's Daily Reckoning, "a fertile imagination can be an investor's most valuable asset. [During normal times], investors can focus only on buying quality stocks one-by-one from the bottom up, without also trying to envision what tragedies might befall them from the top down. But in the context of a euro crisis that could become a dollar crisis that could become a global monetary crisis, it may be time to begin imagining the unimaginable."

It may be time, in other words, to begin considering that the next phase of the global monetary system might not include the US dollar as its reserve currency...or that the next two decades of life in America might not look anything like the last two decades.

Not just any sort of imagination will do. The wrong kind of imagination is already running rampant in the US economy. As Bill Bonner put it recently, "the dollar pretends to be real money. Debt pretends to be capital. And regulators pretend to be smarter than capitalists."

This game of make-believe is not likely to end well.

Therefore, to prepare effectively for the end game of the world's make-believe monetary "system" will require the imagination of a Sean Egan, at least, if not the imagination of a Vladimir Lenin.

Over the weekend, Egan-Jones Ratings Co., of which Sean Egan is president, cut its rating on US government debt from AAA to AA+, becoming the first of the four credit-rating agencies to do so. The downgrade will not likely cause any noticeable ripples in the financial markets because the financial establishment considers Egan-Jones to be an also-ran. It is not Moody's or Standard & Poor's which, from our perspective, is precisely the reason to pay attention to Egan-Jones' assessment. This ratings agency has distinguished itself numerous times for being ahead of the curve.

But honestly, it doesn't take much imagination to envision the United States as a AA+ credit instead of a AAA credit. Investors may need to think even farther outside the box than Egan, perhaps as far outside as Vladimir Lenin.

When most of us think of imaginative individuals, we might think first of J.R.R. Tolkien, and then maybe J.K. Rowling. Lenin would be third, at best. But way back in 1917, as Joel Bowman observed recently, Lenin offered some shockingly prescient predictions for the century ahead:

Germany will militarize herself out of existence,
England will expand herself out of existence,
and America will spend herself out of existence.


"Had he known the inherent shortcomings of his own political ideology," Joel remarked, "Bolshevism's bad boy might also have added, 'And Russia will plan herself out of existence.'

"As for the United States," Joel continued, "it seems she is not content with simply spending more than she produces, foisting the unfunded obligations onto future generations; instead, she militarizes, expands, spends AND plans toward her own demise...as all once great empires eventually do."

The process Joel described is the process Bill Bonner dubs, "Imperial Suicide" – the inevitable tendency of empires to implode upon themselves. Some form of this process appears to be underway in the "wealthy nations" of the West, not excluding the United States.

As empires implode, so do their national currencies. As some point, cause and effect become indistinguishable from one another. The economy and the currency of the imploding empire begin circling the drain together.

Imagination is the best protection. A fertile imagination will not prevent a euro crisis or dollar crisis, but it could protect an investor from the consequences of such a crisis.

To illustrate the destructive power of a currency crisis, let's examine a few pages from recent history...

During the Argentine peso crisis of 2002, the shares of the Argentine oil giant, YPF, climbed more than 50% in five months, even while MERVAL Index of Argentine stocks fell. Unfortunately, YPF's impressive, market-beating returns occurred in the context of a massive currency crisis, during which the Argentine peso lost about three quarters of its global purchasing power. In US dollar terms, therefore, YPF did not gain 53%, it fell 55%!

Argentine Oil Company YPF in Argentine Pesos and US Dollars During 2002 Crisis

An identical story played out in Brazil, as the real unraveled during the second half of 2002. Shares of the Brazilian mining company, "Vale," climbed 40% between March and October of 2002, while the Bovespa Index of Brazilian stocks fell 40%. In dollar terms, however, Vale's "strong" 40% gain was actually a 15% loss.

Four years earlier, the Russian ruble suffered an even more spectacular collapse than the Brazilian real. Amidst this harrowing currency crisis, Russian stocks soared nearly 300%... in ruble terms. But they went absolutely nowhere in US dollar terms.

Russian Stock Performance in Rubles and US Dollars During 1998-1999 Crisis

Just a wee bit of imagination enabled some investors to steer clear of these crises. But shockingly, the vast majority of professional investors failed to imagine these crises, even though Argentina, Brazil and Russia all possessed a rich history of monetary incompetence and chicanery.

In 1969, for example, the Argentine government trimmed two zeros off the existing Peso Moneda Nacional to create the new Peso Ley. In 1985, the government slashed four zeros off the Peso Ley to create the Peso. Then in 1992, the government cut three zeros off the Peso to create the Austral, simultaneously linking it to the US dollar, one-for-one. Ten years later, this peg to the dollar ruptured and the Argentine currency swiftly lost 75% of its purchasing power...again.

In other words, investors required almost no imagination to envision the Argentine currency crisis of 2002. Today, however, investors will require an imagination so vivid and wild that it would border on hallucinogenic. They must not merely imagine that an Argentina might have a currency crisis...again...they must try to imagine that the euro might splinter apart...or that the dollar might suffer a disastrous hyperinflation. Today, the looming potential crises are not unfolding in banana republics or in chronic economic basket cases, they are unfolding in the world's strongest economies.

As your editor pens these words, he is sitting in a beach chair, digging his toes into the warm sand of one of Laguna's nicest beaches. The sites before his eyes are beautiful, tranquil and comforting. The folks lounging in chairs nearby are playing cards, drinking beer and sharing laughs. A short distance away, others are a playing in the surf.

Life is good, even if the economy isn't perfect. A true crisis seems unimaginable. After all, even the 2008 crisis wasn't that bad. And today, the Apple store in the mall is always packed, most of the restaurants in town are full...and the dollar is still strong enough to buy a nice vacation almost anywhere in the world.

A currency crisis that triggers an economic crisis – or vice versa – just feels like a bunch of wacky, doom and gloom stuff. And it may well be. We hope it will be.

But what if it's not? To prepare effectively for a large-scale currency crisis requires a lot of time and energy, as well as a dose of good luck. So a lack of imagination is no longer a viable luxury.

In the context of America's legendary resilience and economic might, a catastrophic currency crisis seems almost unimaginable... But the time has arrived to begin imagining it...not because it is certain, but because it has become less unimaginable.

A Brazilian newspaper recently featured the following photo:

US Dollar as Toilet Paper

It's just a joke, right?

Regards,

Eric Fry
for The Daily Reckoning

Joel's Note: It would be nice if this were a joke, yes. Unfortunately, as all-too-many Americans are fast discovering, the demise of their currency – and the Empire it supports – is something far more serious.

A once proud nation is now on the verge of bankruptcy. Even the ratings agencies have caught on. This week S&P restated its warning that Uncle Sam faces a downgrade if he fails to get his house in order. What would that mean for you? For your financial security? Your retirement?

If you're curious and have a few minutes you might like to check out this presentation from Addison Wiggin, detailing exactly what will happen when America's credit card is finally cut up. It's not pretty, to be sure, but sometimes beauty and the truth diverge in unpleasant ways. That's life.

So sit back, click here and have a listen to what's already going on in your country...and, perhaps more importantly, what's coming down the pipes. Addison, take it away...

Dots
ALSO THIS WEEK in The Daily Reckoning...
The "Holy Grail" of Medicine
By Patrick Cox
Marco Island, Florida


Transformational breakthroughs have taken place across the scientific spectrum. But the most remarkable and important are in medical biotechs.

Many of the breakthroughs I'm talking about will have a direct and dramatic impact on your healthy life span, or your "health span," as well as your portfolio. One breakthrough that stands out is a nutraceutical that contains anatabine citrate, a naturally occurring food substance found in solanaceous plants. It directly addresses auto[innate]immune disorders associated with chronic low-level inflammation.


Gold Hits $1,600!
By Chris Mayer
Gaithersburg, Maryland


The European crisis is deepening. Couple that with the ills in the US and it makes for a grim picture. Concerning the EU crisis, Barron's ran a fascinating interview over the weekend with Sean Egan, the head of Egan-Jones, an independent credit ratings agency. "Independent" means that Egan-Jones earns money from subscribers seeking insight, not from companies seeking the rosiest assessment possible. Egan-Jones' revenue model, therefore, is in direct contrast to S&P and Moody's, who earn money from the companies they rate.


Debt vs. Gold: The Hidden Link Explained
By Ben Traynor
London, England


Europe and Washington's debt ceiling squabble has seen the gold price breach $1600 per ounce and €36,500 per kilo. The financial media's standard line is that investors are scared and gold represents a "safe haven". But how? What are investors scared of that's led some of them to bid the gold price higher?


The US Government's Spectacular Failure
By Charles Kadlec


Spectacular failure. These words came to mind as the dismal employment data for June were released on July 8. After the biggest spending binge in peacetime American history, the unemployment rate is stuck above 9%, while in May fewer than 20,000 jobs were created in what was once a vibrant US economy. Adding in discouraged workers drives the combined rate to 16.2%. Wage rates fell, as did the average workweek.


100 Basis Points to Armageddon
By Bill Bonner
Paris, France


Is there a fender anywhere in Christendom that the financial authorities have not dented yet? They are lost without a compass. They are up the river without a paddle. At the automatic teller without a pin number. They have no theory that has not been discredited. They have no experience which does not contradict them.


Dots
Obama's Burning Shame Revealed Here...

This is the unspoken, burning shame that could kill Obama's presidency...

It could spell the end of his short political career...

It's all revealed in this extremely urgent and controversial documentary report.

Dots
The Weekly Endnote...
And now, a few thoughts from the Daily Reckoning reader mail inbox...

First up, this one from Reckoner R. Russell:

I don't think I have ever read a more complete and detailed explanation of money than the article that Mr. Kadlec just wrote. This is excellent and Right On. I sent it to all my friends, most of which have no idea of economics and are baffled by all the economic news. It may seem elementary to one schooled in economics but very informative to those who are not and they are many. Thank you, Mr. Kadlec.

Perhaps you might want to do an article on Inflation and Deflation and their inherent problems so we can identify each when they come up and try to protect against them.

And this, from Reckoner Dale W.:

Just a thought in regards to the economic progress of Germany. For years I reasoned that the German people were a very disciplined and educated people and that was the reason for their progress but after many discussions and years observing the destruction of the American economy I now feel the German people had the great advantage of starting from scratch with a clean slate.

Just think of the progress this country could make with just a few million less regulations and enforcers.

The little towns and businesses are closing their doors by the thousands due to over-regulation and the greed of the very people we put in power.

You have such foresight and information at your disposal, I would so much enjoy a comment or an article addressing this thought in regards to Germany.

And finally, from Reckoner Scott G., this:

Thank you, Bill, for again pointing out that the benefits of a college education are often oversold. Please keep writing about this from time to time.

The idea that universal college education is necessary and desirable is a commonly-held falsehood and is perpetuated by the American public education establishment.

I see the following benefits to a college education:

1. If you properly select your college, if you properly select your teachers, if you properly select your courses, and if you apply yourself diligently to your studies, you can learn valuable skills and knowledge. Of course, these are a lot of "ifs", which I believe are often unmet.

2. A college degree has a signaling effect. In the absence of better data, it suggests that the degree holder has skills, knowledge, and diligence. Bill noted this in his column.
Like all benefits, these should be carefully weighed against the related costs before taking an action.

A final point: Colleges are now being used to remediate deficiencies in public K-12 education, and they are often failing at this.

Keep up the informative and entertaining writing. It is appreciated!

---

And that, Fellow Reckoners, is all we have time for today. Next week we'll be checking in from our annual Agora Financial Investment Symposium in Vancouver. If you're planning to join us...well...we'll see you there. If, however, you are unable to make the trip, remember you can still get the entire show on audio (CDs or MP3s). Right now we're taking pre-conference, advanced orders. They come with a pretty hefty discount...but that ends the minute the event begins. If you wish to secure an audio set for yourself, feel free to do so here.

Enjoy your weekend.

Cheers,

Joel Bowman
Managing Editor
The Daily Reckoning

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Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com
Dots
The Bonner Diaries The Mogambo Guru The D.R. Extras!

100 Basis Points to Armageddon
Is there a fender anywhere in Christendom that the financial authorities have not dented yet? They are lost without a compass. They are up the river without a paddle. At the automatic teller without a pin number. They have no theory that has not been discredited. They have no experience which does not contradict them.

The Costs of Printing Money

Visions of Phony Economic Growth

China: Where Money Is Treated Best
I am sure that Mr. Pento is right because every country on the Face Of The Planet (FOTP) is desperately creating more and more money, and the money will eventually find its way to the place where it is treated best and/or has the best prospects, which is, in this case, Bob. Oops! I meant "China."

Buying Gold on the Price Inflation Guarantee

Awaiting the "Zero Hour" of Available Credit

Devastating Portrait of a US Government Default
In a recent article, Simon Johnson, a former IMF chief economist and senior fellow at the Peterson Institute for International Economics, paints an revealing picture of how he envisions a debt default devastating the US economy. The portrait is that of a series of ever more destructive dominoes toppling over...

Ray Dalio: A Deleveraging Period for Ten Years or More

A Debt Ceiling Deadlock Resolution?

Dots

The Daily Reckoning: Now in its 11th year, The Daily Reckoning is the flagship e-letter of Baltimore-based financial research firm and publishing group Agora Financial, a subsidiary of Agora Inc. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas. Published daily in six countries and three languages, each issue delivers a feature-length article by a senior member of our team and a guest essay from one of many leading thinkers and nationally acclaimed columnists.
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Founder
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Today's Chapter: A Dog's Purpose

 
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A Dog's Purpose
by W. Bruce Cameron
 

One day it occurred to me that the warm, squeaky, smelly things squirming around next to me were my brothers and sister. I was very disappointed. Though my vision had resolved itself only to the point where I could distinguish fuzzy forms in the light, I knew that the large and beautiful shape with the long wonderful tongue was my mother. I had figured out that when the chill air struck my skin it meant she had gone somewhere, but when the warmth returned it would be time to feed. Often finding a place to suckle meant pushing aside what I now knew was the snout of a sibling seeking to crowd me out of my share, which was really irritating. I couldn’t see that my brothers and sister had any purpose whatsoever. When my mother licked my stomach to stimulate the flow of fluids from under my tail, I blinked up at her, silently beseeching her to please get rid of the other puppies for me. I wanted her all to myself.

Gradually, the other dogs came into focus, and I grudgingly accepted their presence in the nest. My nose soon told me I had one sister and two brothers. Sister was only slightly less interested in wresting with me than my brothers, one of whom I thought of as Fast, because he somehow always moved more quickly than I could. The other one I mentally called Hungry, because he whimpered whenever Mother was gone and would suckle her with an odd desperation, as if it were never enough. Hungry slept more than my siblings and I did, so we often jumped on him and chewed on his face.

Our den was scooped out underneath the black roots of a tree, and was cool and dark during the heat of the day. The first time I tottered out into the sunlight, Sister and Fast accompanied me, and naturally Fast shoved his way to the front. Of the four of us, only Fast had a splash of white on his face, and as he trotted jauntily forward this patch of fur flashed in the daylight. I’m special, Fast’s dazzling, star- shaped spot seemed to be declaring to the world. The rest of him was as mottled and unremarkably brown and black as I was. Hungry was several shades lighter and Sister shared Mother’s stubby nose and flattened forehead, but we all looked more or less the same, despite Fast’s prancing.

Our tree was perched on a creek bank, and I was delighted when Fast tumbled head over heels down the bank, though Sister and I plummeted with no more grace when we tried to make the same descent. Slippery rocks and a tiny trickle of water offered wonderful odors, and we followed the wet trail of the creek into a moist, cool cave— a culvert with metal sides. I knew instinctively that this was a good place to hide from danger, but Mother was unimpressed with our find and hauled us unceremoniously back to the Den when it turned out our legs weren’t powerful enough to enable us to scale back up the bank.

We had learned the lesson that we couldn’t return to the nest on our own when we went down the bank, so as soon as Mother left the nest we did it again. This time Hungry joined us, though once he was in the culvert he sprawled in the cool mud and fell asleep.

Exploring seemed like the right thing to do— we needed to find other things to eat. Mother, getting impatient with us, was standing up when we weren’t even finished feeding, which I could only blame on the other dogs. If Hungry weren’t so relentless, if Fast weren’t so bossy, if Sister didn’t wiggle so much, I knew Mother would hold still and allow us to fill our bellies.

Couldn’t I always coax her to lie down, usually with a sigh, when I reached up for her while she stood above us?

Often Mother would spend extra time licking Hungry while I seethed at the injustice.

By this time, Fast and Sister had both grown larger than I— my body was the same size, but my legs were shorter and stubbier.

Hungry was the runt of the litter, of course, and it bothered me that Fast and Sister always abandoned me to play with each other, as if Hungry and I belonged together out of some sort of natural order in the pack.

Since Fast and Sister were more interested in each other than the rest of the family, I punished them by depriving them of my company, going off by myself deep into the culvert. I was sniffing at something deliciously dead and rotten one day when right in front of me a tiny animal exploded into the air—a frog!

Delighted, I leaped forward, attempting to pounce on it with my paws, but the frog jumped again. It was afraid, although all I wanted to do was play and probably wouldn’t eat it.

Fast and Sister sensed my excitement and came stampeding into the culvert, knocking me over as they skidded to a stop in the slimy water. The frog hopped and Fast lunged at it, using my head as a springboard. I snarled at him, but he ignored me.

Sister and Fast fell all over themselves to get at the frog, who managed to land in a pool of water and kick away in silent, rapid strokes. Sister put her muzzle in the pond and snorted, sneezing water over Fast and me. Fast climbed on her back, the frog— my frog!— forgotten.

Sadly, I turned away. It looked as though I lived in a family of dimwits.

I was to think of that frog often in the days that followed, usually just as I drifted off to sleep. I found myself wondering how it would have tasted.

More and more frequently, Mother would growl softly when we approached, and the day she clicked her teeth together in warning when we came at her in a greedy tumble I despaired that my siblings had ruined everything. Then Fast crawled to her, his belly low, and she lowered her snout to him. He licked her mouth and she rewarded him by bringing up food, and we rushed forward to share. Fast pushed us away, but we knew the trick, now, and when I sniffed and licked my mother’s jaws she gave me a meal.

At this point we had all become thoroughly familiar with the creek bed, and had tracked up and down it until the whole area was redolent with our odors. Fast and I spent most of our time dedicated to the serious business of play, and I was beginning to understand how important it was to him for the game to wind up with me on my back, his mouth chewing my face and throat.

Sister never challenged him, but I still wasn’t sure I liked what everyone seemed to assume was the natural order of our pack.

Hungry, of course, didn’t care about his status, so when I was frustrated I bit his ears.

One afternoon I was drowsily watching Sister and Fast yank on a scrap of cloth they’d found when my ears perked up— an animal of some kind was coming, something large and loud. I scrambled to my feet, but before I could race down the creek bed to investigate the noise Mother was there, her body rigid with warning. I saw with surprise that she had Hungry in her teeth, carrying him in a fashion that we’d left behind weeks ago.

She led us into the dark culvert and crouched down, her ears flat against her head. The message was clear, and we heeded it, shrinking back from the tunnel opening in silence.

When the thing came into view, striding along the creek bed, I felt Mother’s fear ripple across her back. It was big, it stood on two legs, and an acrid smoke wafted from its mouth as it shambled toward us.

I stared intently, absolutely fascinated. For reasons I couldn’t fathom I was drawn to this creature, compelled, and I even tensed, preparing to bound out to greet it. One look from my mother, though, and I decided against it. This was something to be feared, to be avoided at all costs.

It was, of course, a man. The first one I’d ever seen. The man never glanced in our direction. He scaled the bank and disappeared from view, and after a few moments Mother slid out into the sunlight and raised her head to see if the danger had passed. She relaxed, then, and came back inside, giving each of us a reassuring kiss.

I ran out to see for myself, and found myself disheartened when all that remained of the man’s presence was a lingering scent of smoke in the air.

Over and over again the next few weeks, Mother reinforced the message we’d learned in that culvert: Avoid men at all costs.

Fear them.

The next time Mother went to hunt, we were allowed to go with her. Once we were away from the security of the Den, her behavior became timid and skittish, and we all emulated her actions. We steered clear of open spaces, slinking along next to bushes. If we saw a person, Mother would freeze, her shoulders tense, ready to run. At these times Fast’s patch of white fur seemed as obtrusive as a bark, but no one ever noticed us.

Mother showed us how to tear into the filmy bags behind houses, quickly scattering inedible papers and revealing chunks of meat, crusts of bread, and bits of cheese, which we chewed to the best of our ability. The tastes were exotic and the smells were wonderful, but Mother’s anxiety affected all of us, and we ate quickly, savoring nothing. Almost immediately Hungry brought up his meal, which I thought was pretty funny until I, too, felt my insides gripped in a powerful spasm.

It seemed to go down easier the second time.

I’d always been aware of other dogs, though I’d never personally met any except those in my own family. Sometimes when we were out hunting they barked at us from behind fences, most likely jealous that we were trotting around free while they were imprisoned. Mother, of course, never let us approach any of the strangers, while Fast usually bristled a little, somehow insulted that anybody would dare call out to us while he lifted his leg on their trees.

Occasionally I even saw a dog in a car! The first time this happened I stared in wonderment at his head hanging out the window, tongue lolling out. He barked joyously when he spotted me, but I was too astounded to do anything but lift my nose and sniff in disbelief.

Cars and trucks were something else Mother evaded, though I didn’t see how they could be dangerous if there were sometimes dogs inside them. A large, loud truck came around frequently and took away all the bags of food people left out for us, and then meals would be scarce for a day or two. I didn’t like that truck, nor the greedy men who hopped off it to scoop up all the food for themselves, despite the fact that they and their truck smelled glorious.

There was less time for play, now that we were hunting.

Mother snarled when Hungry tried to lick her lips, hoping for a meal, and we all got the message. We went out often, hiding from sight, desperately searching for food. I felt tired and weak, now, and didn’t even try to challenge Fast when he stood with his head over my back, thrusting his chest at me. Fine, let him be the boss.

As far as I was concerned, my short legs were better suited for the low, slinking run our mother had taught us anyway. If Fast felt he was making some sort of point by using his height to knock me over, he was fooling himself. Mother was the dog in charge.

There was barely room for all of us underneath the tree now, and Mother was gone for longer and longer periods of time.

Something told me that one of these days she wouldn’t come back. We would have to fend for ourselves, Fast always pushing me out of the way, trying to take my share. Mother wouldn’t be there to look after me.

I began to think of what it would be like to leave the Den.

The day everything changed began with Hungry stumbling into the culvert to lie down instead of going on the hunt, his breathing labored, his tongue sticking out of his mouth. Mother nuzzled Hungry before she left, and when I sniffed at him his eyes remained shut.

Over the culvert was a road, and along the road we’d once found a large dead bird, which we’d all torn into until Fast picked it up and ran off with it. Despite the danger of being seen, we tended to range up and down this road, looking for more birds, which was what we were doing when Mother suddenly raised her head in alarm. We all heard it the same instant: a truck approaching.

But not just any truck— this same vehicle, making the same sounds, had been back and forth along our road several times the past few days, moving slowly, even menacingly, as if hunting

specifically for us.

We followed Mother as she darted back to the culvert, but for reasons I’ll never fully understand, I stopped and looked back at the monstrous machine, taking an extra few seconds before I followed Mother into the safety of the tunnel.

Those few seconds proved to make all the difference— they had spotted me. With a low, rumbling vibration, the truck came to a stop directly overhead. The engine clanked and went quiet, and then we heard the sounds of boots on gravel.

Mother gave a soft whimper.

When the human faces appeared at either end of the culvert, Mother went low, tensing her body. They showed their teeth at us, but it didn’t seem to be a hostile gesture. Their faces were brown, marked with black hair, black brows, and dark eyes.

“Here, boy,” one of them whispered. I didn’t know what it meant, but the call seemed as natural as the sound of the wind, as if I had been listening to men speak my whole life.

Both men had poles, I now saw, poles with ropes looped on the end. They appeared threatening, and I felt Mother’s panic boil over. Her claws scrabbling, she bolted, her head down, aiming for the space between the legs of one of the men. The pole came down, there was a quick snap, and then my mother was twisting and jerking as the man hauled her out into the sunlight.

Sister and I backed up, cowering, while Fast growled, his fur bristling on the back of his neck. Then it occurred to all three of us that while the way behind us was still blocked, the tunnel mouth in front of us was now clear. We darted forward.

“Here they come!” the man behind us yelled.

Once out in the creek bed, we realized we didn’t really know what to do next. Sister and I stood behind Fast— he wanted to be the boss, so okay, let him deal with this.

There was no sign of Mother. The two men were on opposite banks, though, each wielding his pole. Fast dodged one but then was snagged by the other. Sister took advantage of the melee to escape, her feet splashing in the water as she scampered away, but I stood rooted, staring up at the road.

A woman with long white hair stood there above us, her face wrinkled in kindness. “Here, puppy, it’s okay. You’ll be all right.

Here, puppy,” she said.

I didn’t run; I didn’t move. I allowed the loop of rope to slip over my face and tighten on my neck. The pole guided me up the bank, where the man seized me by the scruff of the neck.

“He’s okay; he’s okay,” the woman crooned. “Let him go.”

“He’ll run off,” the man warned.

“Let him go.”

I followed this bit of dialogue without comprehension, only understanding that somehow the woman was in charge, though she was older and smaller than either of the two men. With a reluctant grunt, the man lifted the rope off my neck. The woman offered her hands to me: rough, leathery palms coated with a flowery smell. I sniffed them, then lowered my head. A clear sense of caring and concern radiated off of her.

When she ran her fingers along my fur I felt a shiver pass through me. My tail whipped the air of its own accord, and when she astonished me by lifting me into the air I scrambled to kiss her face, delighting in her laughter.

The mood turned somber when one of the men approached, holding Hungry’s limp body. The man showed it to the woman, who clucked mournfully. Then he took it to the truck, where Mother and Fast were in a metal cage, and held it up to their noses. The scent of death, recognizable to me as any memory, wafted off of Hungry in the dry, dusty air.

We all carefully smelled my dead brother, and I understood the men wanted us to know what had happened to Hungry.

Sadness came from all of them as they stood there silently in the road, but they didn’t know how sick Hungry had been, sick from birth and not long for the world.

I was put in the cage, and Mother sniffed disapprovingly at the woman’s smell, which had been pressed into my fur. With a lurch, the truck started up again, and I was quickly distracted by the wonderful odors flowing through the cage as we moved down the road. I was riding in a truck! I barked in delight, Fast and Mother jerking their heads in surprise at my outburst. I couldn’t help myself; it was the most exciting thing that had ever happened in my whole life, including almost catching the frog.

Fast seemed overcome with sadness, and it took me a moment to understand: Sister, his favorite companion, was gone, as lost to us as was Hungry.

There was, I reflected, much more complexity to the world than I had supposed. It wasn’t just about Mother and my siblings hiding from people, hunting, and playing in the culvert. Larger events had the ability to change everything— events that were controlled by human beings.

I was wrong about one thing: though we didn’t know it at the time, Fast and I would meet up with Sister again in the future.

Copyright © 2010 by W. Bruce Cameron

(Continues...)

 
 
 
 
 
 
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Excerpted from "A Dog's Purpose" by W. Bruce Cameron. Copyright (C) by W. Bruce Cameron. Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher. Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
 

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