Category: Economics & Investing

Several readers sent this: S&P Cuts Credit Ratings for Nine Euro Zone Nations J.J.H. recommended a satirical short film comparing the National Debt to the finances of a family. More monetization ahead: Fed to Weigh Further Easing Amid Doubts About Recovery. The government is now fully addicted to artificial money creation. Items from The Economatrix: There Goes The Neighborhood:  Cleveland To Demolish 20,000 More Foreclosed, Looted Homes Poverty In America Getting Worse China’s Collapse “Will Bring Economic Crisis to Climax in 2012”

R.C. sent this troubling bit of news: America Again Drops in Global Ranking of Economic Freedom Here is an article penned by Pat Buchanan: “Last May, Ron Paul filed his financial disclosure form, and The Wall Street Journal enlisted financial analyst William Bernstein to scrutinize his investments. The article includes this: “Paul’s portfolio isn’t merely different,” said an astonished Journal, “it’s shockingly different.” Twenty-one percent of his $2.4 to $5.5 million was in real estate, 14 percent in cash. He owns no bonds. Only 0.1 percent is invested in stocks, and Paul bought these “short,” betting the price will plunge. …

Reader RBS mentioned this great piece in Coin World: Strangeness in the 1960s–1964, 1965 like day and night SurvivalBlog’s own Pat Cascio sent this: Hungary Folds, Ready To Change Its Laws To Get European Bailout Money A reader sent this: Food inflation done quietly: Same store, same shelf, same price. Smaller package. 1.2 Billion Indians signing life away for biometric ID cards   Items from The Economatrix: Fed Officials Signal More Action May Be Needed. (Warm up that helicopter and monetize, Ben!) Crude Nears $103 $9 Gallon Gasoline Will Crash World Economies if WWIII Starts

G.G. flagged this: With Work Scarce in Athens, Greeks Go Back to the Land Farmers Sue Jon Corzine Over Missing Millions Items from The Economatrix: Unemployment Drop Masks On-going Decline Fed Seen Unveiling QE3 Bond Plans By Summer. Government Set to Sell Foreclosures in Bulk. (Here comes the initial haircut, at taxpayer expense.) US Bank Failures Declined in 2011

Absurd Gold/Silver Price Ratio; Why $500/oz Silver Is Now A Certainty In The Future I recommend watching this commentary on “the coming storm” for the economy: Afterburner with Bill Whittle: Facing the Arithmetic. While more of a pep talk than practical instruction, Whittle’s comments are spot on. G.G. sent this: Six million households have only five days’ savings One end result of derivatives counterparty risk: MBS fallout could hit Wells Fargo, JPMorgan. (Mortgage backed securities are derivative securities.) Items from The Economatrix:

B.B. sent this: Illinois Debt Downgraded Again, Worst in Nation Haircuts ahead! Merkel Meets Sarkozy to Draft EU Fiscal Rules as Part of Euro-Rescue Plan. The article includes a quote from IMF Chief Economist Olivier Blanchard: “‘The numbers are not good’ for Greece, Blanchard said on CNBC television. ‘There’ll have to be substantial haircuts.’” [JWR Adds: Along with currency revaluations, be ready for banks runs and currency export controls that may be enacted in many nations. And don’t be surprised if Ben Bernanke comes to the rescue–whether overtly or covertly–with trillions of Dollars from America. This will be money created …

John R. recommended a podcast interview of Martin Armstrong: Capital Controls Coming In The US Stephen M. sent this: Record Consecutive Treasury Dump From Fed’s Custody Account. [JWR’s Comment: And this comes amidst Eurozone turmoil when U.S. Treasury paper should be seen as a relative safe haven. So this some very bad news!] The fragility of “Just In Time” inventory processes: Global Economy Could Endure Disaster For Only a Week. (Thanks to Steve H. for the link.) Items from The Economatrix: The Possibility of $1,000 Silver Before Hyperinflation Factory Orders Rise, But Business Investments Slip Oil Price Stays Around $103 …

If you’d like some insight on the derivatives market, then don’t miss this interview: Ann Barnhardt & Warren Pollock Have an Open Conversation Joe W. sent this news from Germany: Fearful Investors Stash Money in Luxury Goods Items from The Economatrix: 34 Shocking Facts About US Debt That Should Set America On Fire With Anger Eight Analysts See Gold Going to $3,000 to $10,000 in 2012 Silver Sales Up As Supplies Slip Gold Jumps As Citi Says Gold Sell Off Over, Reiterates $2,400 Gold

Diana W. sent this: Cost to Make Penny and Nickel Rises, Annual Loss Reaches $116.7 Million. [JWR’s Comment: Presently, the U.S. Treasury is in effect giving you some of your taxes back, by minting nickels at a loss. Stock up ASAP, before this window of opportunity closes! (Debased steel nickels are coming soon!)] Mike T. suggested this: Bill Gross Warns Of Financial Market Implosion And The End Of Economic Life As We Know It Bailout concerns mounting for Federal Housing Agency F.G. mentioned some interesting background: Cracking The Credit Card Code Items from The Economatrix: 10 Predictions for Work and …

Fallout in America from Europe’s debt bomb, as a hedge fund perishes: WJB Faced 25% Interest on Debt Ahead of Brokerage Shutdown AmEx (American Expat) sent us this: In Greece’s Sour Economy, Some Shops Are Thriving Cue the dramatic gloom and doom music: Hungarian Yields Soar, CDS Hits Record As Bill Auction Fails Greek Prime Minister warns of March default–Lucas Papademos says Greece may default on its debts in March unless unions accept further cuts to salaries. Items from The Economatrix: Against Euro And Yen, Dollar Defied Reality Peter Schiff:  Now’s A Perfect Time For A Gold Rally What’s In …

Greeks must avert economic collapse, euro exit: leader R.B.S. sent this: GAO 2011 Annual Report Reveals: The United States is Still Broke! Patrick S. suggested this: Signs Point to Retreat in Consumer Spending.   Items from The Economatrix: US Job Market Ends Year In Better Shape Crisis Conditions Grip Eurozone US Factory Growth Shows Jobs Might Be Picking Up Oil Begins 2012 With A Bang, Prices Up 4%

Renewed Investor Interest For Silver In 2012 Sue C. sent this: Becoming Zimbabwe: When Nations Regress The Economy In 2012:  Handle With Care B.B. flagged this: Jim Rogers isn’t too optimistic about stock markets in 2012, sees longer term systemic collapse Items from The Economatrix: Euro Hits 11-Month Low Against The Dollar As Banks Hoard ECB Cash Merkel’s Economic Advisor Won’t Rule Out Eurozone Break-up 30 Statistics that Show that the Middle Class is Dying Right Before Our Eyes as We Enter 2012 Mish Shedlock’s 2012 Predictions; 2011 Year In Review

Michael I. recommended this great article: The Long, Long Depression. Michael’s comment: “This is by a National Review writer who predicts a two decade depression.  He discusses similarities with the 1873 depression.” Reality check: Mt. Washington Parking Space Assessed At Nearly $300,000 Verizon reverses on $2 fee for one-time payments Chinese financial bubble update: China eclipses US as top IPO venue. Four Risky Places To Swipe Your Debit Card Items from The Economatrix: You Thought 2011 Was Tough? NASDAQ Wraps Up 2011 In The Red (But then we read: Gold’s 10 percent gain in 2011 extends run to 11th year.) …

G.G. flagged this bit of confirmation my predictions: Urban Institute: Foreclosure backlog to ‘take decades to complete’ Mortgage Aid Programs Still Have Trouble Helping Homeowners In Distress Foreclosure Free Ride:  Three Years, No Payments Items from The Economatrix: US Mint Says Has Enough Gold, Silver Eagles Coins A Look At Economic Developments Around The Globe Asian Stocks Advance On US Optimism Consumer Comfort In US Receded Last Week

G.G. flagged this: John Williams: The US Has $100 Trillion in Debts & Obligations R.B.S. sent this one: Nation’s largest welfare state makes deep cuts. Over at Alt-Market: New Asian Union Means The Fall Of The Dollar Items from The Economatrix: Signs Of The Times: Metal Thieves Steal 26 Train Wheels Will Gold Deliver Another Glittering Year In 2012? Budget Collapse:  Too Much Free Money The Case For Austerity