Category: Economics & Investing

Economist Duncan: Next Depression May Be So Severe Civilization May Not Survive Don’t miss this important news spotted by G.G.: Here Comes the Catch in Home Equity Loans The twin lost decades in housing and stocks – baby boomers selling homes to a less affluent young American population. The impact of baby boomers on the housing market. Reader Sue C. sent this: IMF cuts global growth forecast as emerging economies slow Items from The Economatrix: Why Gas Prices Are Heading Back Up IMF Cuts Global Growth Forecasts As Emerging Economies Slow America Heading Towards A Collapse Worse Than 2008 AND …

B.B. suggested: Don’t fear the fiscal cliff — fear the welfare cliff Sue C. spotted this item: Political feuds, denial drove San Bernardino to bankruptcy SurvivalBlog’s G.G. suggested this by humorous economic commentator Richard Daughty (“The Mogambo Guru”): So Freaking Obvious (SFO) Items from The Economatrix: When Bankers Get Nervous, Watch Out Retail Purchases In U.S. Unexpectedly Decrease 0.5% Oil Declines From Seven-Week High Amid Global Economic Concern Fewer US Companies are Planning to Hire

Those pesky derivatives: How Jamie Dimon hid the $6 billion loss The latest from Yohay at FOREX Crunch: US Gained Only 12,000 Jobs in May According to Bernanke’s Highlighted Indicator Steven M. sent this: It’s Not Just Free Cell Phones… The Government Is Handing Out Free Air Conditioners Too. JWR Adds: Oh, and to make it even worse, the LG Global Electronics brand air conditioning units they are giving away are made in China. (“Your tax dollars at work.”) Items from The Economatrix: Jim Willie:  Extreme Danger Signposts Gold 22% Rally to Record Seen by Eric Sprott:  Commodities Buffet Says …

Six charts that show the Welfare State run amok. (Thanks to SurvivalBlog’s Poet Laureate G.G. for the link.) Doug C. sent this: Is Bankruptcy Coming to a City Near You? The looming student loan bubble – Almost half of all student borrowers were not making payments. 1 out of 4 in debt repayment past due on student debt. G.G. sent this: Gold for Oil: Turkey has exchanged nearly 60 tons of gold for several million tons of Iranian crude oil, despite its promises to uphold Western sanctions on Iran’s energy sector Items from The Economatrix: Inflate Or Die Four Reasons …

Dominique de Kevelioc de Bailleul: Gold Prices: Brace For Bizarre QE3 Hail Mary and Hyperinflation Gold to Hit $2000 on Fed Easing: Merrill John Embry – Hang On Because The Chaos is Going to Accelerate Jim Rogers: Duck and Cover, Your Cash Is NOT Safe; Buy Physical Gold Where are the markets heading? The chartists are uncertain. (JWR’s Comment: It is difficult to predict manipulated markets. In the era of Quantitative Easing (monetization), ALL markets are manipulated to some extent.) Items from The Economatrix: We Are Near An Epic Collapse In Confidence Higher US Unemployment In A Year:  Pimco’s Bill …

G.G. flagged this: Bank’s idea for tackling the financial crisis: six bicycles. The article begins: “The Bank of England considered buying bicycles so that its officials could continue to move around in the event of a full-scale financial meltdown, the former City minister disclosed last night.” San Bernardino seeks bankruptcy protection: San Bernardino, facing the possibility of missing payroll, becomes California’s third city in weeks to authorize a bankruptcy filing. FHA bailout inches closer – FHA defaults surge 26 percent while upping mortgage insurance premiums to make loans more expensive. Foreclosure starts outnumber foreclosure sales 3 to 1. RBS sent …

Want Precious Metals? Forget Mines, Go to Landfills. (A hat tip to Diana V. for the link.) C.D.V. sent this: As More Cities Go Broke, Is Muni Crisis Finally Here? G.G. sent this: Arizona Police Bust The Biggest Counterfeit Coupon Ring Ever Also from G.G., a piece about Ka-Bar: Inside The Company That’s Made Knives For The Marines Since World War II Items from The Economatrix: Mish’s Global Economic Trend:  Global Collapse in Auto Sales Coming Up Why The LIBOR Scandal Matters:  Destruction of Confidence to the Nth Degree Was Gold Manipulated Like LIBOR Rates?

Reader B.D. sent this: Spain Will Have to Cede Most Control of Banks: WSJ Terry in Idaho recommended: The Libor Scandal: History’s Largest Market Fraud? Did someone say $800 trillion? The future of futures is uncertain: PFG Collapses Amid Fraud Allegations B.B. sent this over at Noisy Room: Nations will be Nations: ‘Euro Zone Fragmenting Faster than EU can Act’ 21% sales tax! Spain Deepens Austerity Under European Pressure. (Thanks to K.A.F. for the link.) Also from B.B.: Austerity, American Style: Scranton City Employees’ Wages Reduced to $7.25 per Hour – This Is Your Future America A clash of generations …

Some effects of bad monetary policy: The war on baby boomers. (Thanks to C. Matt for the link.) V.T.P. sent this: France is selling bonds at a negative interest rate Roubini: My ‘Perfect Storm’ Scenario Ii Unfolding Now. (Kudos to C.D.V. for sending this link.) Items from The Economatrix: As Foreclosures Ramp Up, New Roadblocks Ahead There Will Never Be Enough Jobs in America Again Government Overpaid $14 Billion in Unemployment Benefits US Economy:  Things Could Get Much Worse

James Wesley: I understand saving gold and silver for preservation of wealth but I’m not sure of copper pennies or nickel five cent pieces. Gold and silver have been used for thousands of years as stored wealth but I’m not sure I could convince anyone to take pennies and nickels that are made with industrial metals. The copper value of the coin may be greater than the value marked on the coin but who is going to have a desire to gather up copper and nickel over silver or gold? Thanks for the great blog and the help. – Mark …

Several readers have written to ask about the recent slump in precious metals. This can be attributed to the ongoing sovereign debt and derivatives crisis in Europe, where there are wholesale liquidations of everything. Folks are scrambling to raise cash to settle CDO contracts and to meet margin calls. The crisis will keep the price of metals down until perhaps October. It doesn’t mean that the bull market in metals is over. Far from it! Just look at this as a good buying opportunity. Like a Hollywood set, housing inventory looks to be low only because that is what is …

Cordelia Hebblethwaite of the BBC asks: The US penny: Should it be scrapped? [JWR’s Comment: The real solution is to admit the chronic inflation since 1933 and revalue the Dollar, by dropping a zero. Gasoline and milk would both then sell for around 33 cents a gallon, and a bottle of sodapop would again sell for a dime. This move would restore realism to the values of our pocket change. I also predict that it would spur a short term economic revival, since everything would seem inexpensive.] Items from The Economatrix: Signs We Are Approaching a Zombie Economy Exposure of …

Reader Ian R. sent this: Japan to go broke by October? Standoff threatens to ‘collapse’ budget Some fascinating reading: Monetary Laws. Items from The Economatrix: A Crash Warning Has Been Issued for the Economy:  Buy Gold and Silver IMF to Cut Growth Outlook as Global Economy Weakens Jobs Selloff Erases Wall Street’s Gains for the Week Dismal Hiring Shows Economy Stuck in Low Gear

Pierre M. sent me something to file under: Why Am I Not Surprised?: Report: Countrywide won influence with discounts More and more young adults leave Idaho’s family-run farms Items from The Economatrix: Could Gold Hit $6,000?  Analysts Think So. Home Sales Show Bernanke’s Low Rates Are Gaining Traction What’s Behind The LIBOR Scandal?