Category: Economics & Investing

Letter: Stocks, Gold and Gas

HJL, My wife and I were giving a home school economics lesson at the pumps the other day. We talked to our kids about how most people live and work and the daily driving it requires. My wife and I concluded that this gas price drop has put $350 per month back in the pocket of the average neighbor around here. That is no small thing. I saw sales at my antique store rise in the last half of December and continue at a brisk pace this month. That people are buying used stuff points to the new frugality that …


Economics and Investing:

Brandon Smith: The Advantages of Barter and Localism. Something that we all need to be good at in the coming crisis. o o o The Deflation Monster Has Arrived – G.G. o o o Items from Professor Preponomics: US News Credit Crunch Could Be Worse that the Housing Crisis (CNBC) Excerpt: “Oil and gas companies borrowed heavily when oil prices were soaring above $70 a barrel. But in the past 24 months, they’ve seen their values and cash flows erode ferociously as oil prices plunge — and that’s made it hard for some to pay back that debt. This could …


Economics and Investing:

Puerto Rico ‘in midst of economic collapse’ – G.G. o o o Keith Neumeyer – Triple Digit Silver Is Coming – The Daily Coin o o o Items from Professor Preponomics: US News Evidence Mounting that the Fed Made a Mistake (Washington Examiner) In light of the decisions made across many years involving everything from monetary and fiscal policy to international trade and other global financial agreements, it could easily be argued that any Fed decision at this point would have produced adverse consequences. The take home message may be that there is no easy way out of the economic …


Economics and Investing:

Dow slides 391; oil and China drops rattle investors (Warning: Auto-starting video) o o o Items from Mr. Econocobas: A Recession Worse Than 2008 is Coming – Don’t pay much attention to the video, as it is not related to article.. Retail Sales in U.S. Decrease to End Weakest Year Since 2009 Bill Gross’ Advice To Traders As Stocks Crash Items from Professor Preponomics: US News Stocks Get Crushed (Business Insider) U.S. markets will be closed on Monday for Martin Luther King Day, although we will see additional trading activity in other parts of the world which should offer some …


Economics and Investing:

Maybe Valuations Do Matter – J.Q. o o o Audit the Fed Legislation Sinks: Plan Accordingly This article, sent in by C.T., should run right along side that one: Vote to Audit the Federal Reserve, guess who didn’t vote? o o o Items from Professor Preponomics: U.S. News Puerto Rico’s Slide (Bloomberg) Excerpt: “Puerto Rico has the population of Oklahoma and a gross domestic product smaller than Kansas. It also has more debt— $70 billion— than any U.S. state government except California and New York. This fact and the reasons behind it help explain why the territory has tumbled over …


Letter Re: Baltic Dry Crashes–Zero Hedge article

Gentlemen, The discussion in the Zero Hedge article Baltic Dry Crashes contains a blatant misinterpretation of the use of the AIS system. The author acknowledges that he is not a maritime expert, yet he attempts to use a maritime tracking system as evidence of his already determined conclusion. The reason the referenced map from marinetraffic.com shows no ships in the middle of the Atlantic is that there are no ports there with AIS receivers used to manage port traffic, the source of the data for this site. Using the filters for the map, you can remove ships anchored and in …


Economics and Investing:

The International War On Cash – Sent in by G.G. o o o Reader H.L. sent in this depressing link: This is how much the average American investor made last year o o o Items from Professor Preponomics: US News Oil Plunge Sparks Bankruptcy Concerns – Energy Journal (Wall Street Journal Money Beat) Excerpt: “As many as a third of American oil-and-gas producers could flirt with bankruptcy and restructuring by the middle of next year unless oil prices stage a big rebound…” Is the Auto Loan Bubble Ready to Pop? (Mises Institute) Excerpt: “While the media claims that this record …


Economics and Investing:

RBS cries ‘sell everything’ as deflationary crisis nears – G.G. o o o Record Numbers Of Retired Americans Are Working Part-Time Jobs – G.G. o o o Items from Professor Preponomics: US News All of the World’s Money and Markets in One Visualization (Visual Capitalist) An excellent (and terrifying) representation beginning with Bitcoin and ending with derivatives. Oil Could Fall to $20 but NOT for the Reason You Think (Market Watch) Excerpt: “While oil markets are undoubtedly oversupplied, after a certain point, deteriorating fundamentals have little to do with the price action. ‘Oversupply may have pushed oil prices under $60, …


Economics and Investing:

“Unprecedented Demand” – US Mint Sells Nearly As Much Gold On First Day Of 2016 As All Of January 2015 – G.G. o o o Shipping Said to Have Ceased… Is the Worldwide Economy Grinding to a Halt? – B.B. o o o Items from Professor Preponomics: US News More Trouble Ahead for US Oil Industry (Houston Chronicle) Excerpt: “The tentacles of the energy sector run deeper in the US economy than most understand…” Why Sugar, Once a Big Business in Hawaii, is Disappearing (Christian Science Monitor) Excerpt: “The company hopes to shield itself from the vulnerability of a single …


Economics and Investing:

A sobering, yet mind-blowing visualization of the world’s money: All of the World’s Money and Markets in One Visualization – Sent in by V.M. o o o U.S. Silver Production Drops Significantly Again In October… Has Peak Silver Arrived? o o o Items from Professor Preponomics: US News When the Salsa Stops (The Economist) Excerpt: “PUERTO RICO’S creditors have plenty to complain about, but they can’t claim they weren’t warned. Last June Alejandro García Padilla, the governor of America’s Caribbean outpost, announced that its $72 billion public debt was “unpayable”, and that a “unilateral and unplanned non-payment of obligations” loomed.” …


Guest Article: Federal Reserve’s “Net Worth” Collapses 33% in Two Weeks, by Simon Black (Sovereignman)

In case it weren’t completely obvious how completely screwed up the financial system is, please allow me to introduce Exhibit A: the Federal Reserve’s own balance sheet. First, we need a quick accounting background, and stay with me, because this is important. Think about your own finances. You, me, everyone… we all have assets and liabilities. Your assets might be things like cash, your house, car, baseball card collection, et cetera. And your liabilities are loans, credit card debt, et cetera. The difference between the two can be thought of as your “net worth”. Hopefully, it’s positive, i.e. your assets …


Economics and Investing:

46 Months Of Accelerating Deflation Mean Beijing Is Now Trapped – JFJ o o o Apple has dumped $100B in market value in past month – RBS o o o Items from Mr. Econocobas: Study Finds Higher Minimum Wage Hurting Youth Employment – Not sure why they needed a study to realize this…. Puerto Rico Defaults on Debt Payments – Not sure how, but this news seemed largely ignored probably due to such market volatility Items from Professor Preponomics: US News End Injustices Now, Not Later (Mises Institute) Excerpt: “We’ve been robbing from Peter to pay Paul, and Paul’s taken …


Economics and Investing:

Items from Mr. Econocobas: Dow Tumbles Nearly 400 Points on China Worries- Dow and S&P Off to Worse Start Ever – I would expect a relief rally very soon, otherwise I don’t see how we don’t get a serious intervention by world central banks. Silver Seen Beating Gold as Ratio Rises to Near Historical Peaks– And we are not even talking about the historical average of around 16:1. Most Americans are One Paycheck Away from the Street Items from Professor Preponomics: US News Watchdog Says Government Agencies Ignore Billions in Savings (Taxpayers for Common Sense) Excerpt: “Agencies have a “too …


Economics and Investing:

GOLD & SILVER: Up In A Sea of Red… Get Used To Days Like This o o o The Bankers’ India Gold Grab o o o Items from Professor Preponomics: US News The “Services” Based Economy Delusion (Contra Corner) Excerpt: “In short, the service economy may well be doing fine, though I doubt it, but in the end it won’t be nearly enough to save anyone.” Macy’s to Cut Up To 4,800 Jobs After Weak Holiday Sales (ABC News) The real data is incoming no matter the tendency to blame the weather. Excerpt: “Macy’s said that unseasonably warm weather that …


Economics and Investing:

Saudi Arabia is running out of money The cash crunch is so bad in Saudi Arabia that the government just hiked the price of gasoline by 50%. Yep, you read that right. Instead of paying the equivalent of $0.64USD for a gallon, they will now have to pay a whopping $0.96USD per gallon. – P.S. o o o Petro Currencies Under Fire As Oil Keeps Sliding o o o Items from Professor Preponomics: US News U.S. Shale Companies: Bankers are Quietly Tightening the Liquidity Noose (Zero Hedge) Watch out for the effects of possible liquidity triggers like this one. Excerpt: …