Category: Economics & Investing

John R. sent a Seeking Alpha article with some confirmations of my warnings to SurvivalBlog readers since 2006: Derivatives: The Real Reason Bernanke Funnels Trillions Into Wall Street Banks. Here is a quote from the article: “Of course, Bernanke tells the public and Congress that the reason we need low interest rates is to support housing prices. He doesn’t mention that $188 TRILLION of the $223 TRILLION in notional value of derivatives sitting on the Big Banks’ balance sheets is related to interest rates. Yes, $188 TRILLION. That’s thirteen times the US’ entire GDP, and nearly four times WORLD GDP.” …

America’s inflation alarm is growing ever louder, (Thanks to G.G. for the link.) News from formerly Merry Olde England: Staple Food Prices Fastest Rise in Five Years . Corn’s rally feeds a ‘global food fight’ Kraft says more price increases ahead

Pierre M. sent: Egypt Crisis Puts Spotlight on Weakness in US: El-Erian A few industries are bucking the trend and doing well in the recession. The newspaper article from Montana highlights one: Bitterroot Valley ammunition makers see ever-growing demand. Don’t miss the comments on buyers’ concerns about “the world falling apart”, near the end of the article. (A hat tip to Mara for the link.) More mainstream media feel-good journalism: Everything You Ever Wanted To Know About The World’s Battle With Inflation But Were Afraid To Ask. From their standpoint, inflation is a good thing. As if we’re supposed to …

Several readers sent this: IMF calls for dollar alternative. Non-Dollar SDR bonds could replace the US Dollar in some international trade. This may hasten the demise of the US Dollar. Fiscal Insanity: Here we are in the midst of a recession-cum-depression and the Federal government is swimming is a sea of red ink. They’ve amassed a National Debt that exceeds $45,500 for every man woman and child in the nation. But now Vice President Joe Biden is pushing for a $53 billion Federally-funded high speed rail system. Air Force Dad sent this: Fed’s Warsh Quits; Bernanke Adviser Questioned QE2 The …

John R. recommended this editorial: Ben Bernanke and The Confidence Men Aaron A. suggested this televison news item: Economy keeps parts out of auto body shops. (It includes yet another sob SAAB story.) C.D.V. sent this: China’s Wheat Basket Faces Its Worst Drought In 200 Years Items from The Economatrix: Job Openings Fall for Second Straight Month   Business Travel Bounces Back as Economy Improves   AP Analysis:  Foreclosures Raise US Economic Stress   Treasurys Fall After Weak Auction of Three-Year Notes   Silver to Soar in 2011, Says Investment Guru  

McDonald’s likely to raise prices in 2011 Seven Things That Will Cost More in 2011 and What You Can Do About Them Wheat/Cattle Prices Moo-ving Up Can China Tame Its Inflation Dragon? C.D.V. sent this: Grocery Bills are on the Rise

Jeff in Virginia and Yishai both mentioned this: WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on price. Count this as further evidence that Peak Oil is reality. Michael Pollaro writes in Forbes: America, poised for a hyperinflationary event? Air Force Dad sent us this: US Dollar Index: Momentum selling could be swift and steep. As Quantitative Easing (monetizing the National Debt) continues, look for plenty of downward momentum in the USDI. C.D.V. sent: 10 Ways Weather is Wreaking Havoc on the Global Economy Items from The Economatrix: 9% Unemployment Rate is a Statistical Lie   …

As I’ve mentioned before in SurvivalBlog, U.S. Five cent pieces (“Nickels”) should be considered a long-term hedge on inflation. I recently had a gent e-mail me, asking how he could eventually “cash in” on his cache of Nickels. He asked: “Are we to melt them down, or sell them to a collector? How does one obtain their true 7.4 cents [base metal content] value?” My response: Don’t expect to cash in for several years. I anticipate that there won’t be a large scale speculative market in Nickels until their base metal value (“melt value”) exceeds twice their face value (“2X …

The Daily Bell ran this interview: Richard Maybury on the Collapse of the Anglo-American Empire and What It Means for You Eric K. sent this: China Raises Rates to Counter Accelerating Inflation. Eric’s comments: “Three things of note in the article: 1.) They mention a report due next week that will show a 5.3% increase in January for consumer prices. 2.) They are starting a campaign to crackdown on speculation and hoarding. 3.) The Chinese inflation is largely driven by rising food costs. Their formula for calculating their inflation is different to the one used to calculate ours. For one, …

John R. flagged this: Egypt’s Super-Rich Begin Moving Their Money to Switzerland Also from John comes a bank run news article: Egyptian Banks Open, And The Government Is Forced To Use Cargo Planes Full Of Cash Mal sent us this: Why You Need to Own Nickels, Right Now Reader M.B. highlighted this one: South Korea must prepare for food crisis Bob Chapman: Almost a Total Dollar Devaluation By The Fed In his video blog, Peter Schiff warns of rapidly-rising bond yield rates. Andy A. suggested this: Silver in complete backwardation

Avalanche Lily spotted this: Report Card on Obama’s First Two Years. Those commodity inflation numbers look very troubling. What we are now witnessing is not so much commodities going up as it is the U.S. Dollar going down in purchasing power. If you haven’t done so already, then start shifting out of Dollar-denominated investments and into tangibles! Don’t overlook buying long term storage foods as both a hedge on inflation, and as a survival reserve for your family for times of scarcity. Analyst Warns of 2015 Bank Crisis Amid ‘Upbeat’ Davos. “The fundamentals haven’t been addressed at all,” Wilkinson, a …

Companies Stock Up as Commodities Prices Rise. (This sort of hedging can of course start a snowballing effect.) Why Global Food Price Inflation Really Matters   Reader B.B. highlighted this: As World Becomes Zimbabwefied, Cotton Futures Surge 17% In One Month Treasury TIPS: A Looming Disaster for Small Investors Inflation ‘Higher Than Official Statistics Reveal’. (An interview with Marc Faber.) Supermarket surprise: smaller servings, same price. Bond Market Flashes Inflation Warning: Jump in U.S. Treasury yields signals market fear that Fed is behind the curve on prices

Darin H. flagged a blog piece by Chris Martenson: How long can the party in stocks last? Several readers mentioned this new video from Future Money Trends: Gold This Decade. Jim Rickards on Reserve currency, hot money and global food price inflation. (Thanks to David W. for the link.) Items from The Economatrix: Stocks Shrug Off Mixed Unemployment Reports   Unemployment Falls to 9%, Lowest Since 2009   Regulators Shut Three Small Banks; 14 Failures in 2011   Why You Should be Buying Gold as the Fed Prints Money   Jim Rogers:  Obama is Ruining America  

E.M.B. sent this: Coming Soon: A 300-Percent Increase in Foreclosures Smoot-Hawley Redux: As the Greater Depression continues along a parallel pathway with the Great Depression of the 1930s, Congress is about to commit the same blunder it made in 1930. (Thanks to C.D.V. for the link.) From Brett G. comes this link: Copper, Gold May Jump 30 Percent on Inflation Fear CoinWeek reports: Threat of Counterfeit Morgan Silver Dollars from China (Thanks to loyal content contributor R.D.F. for the link.) FDIC Friday Follies: Two more banks bit the dust on Friday, February 4th. (Both in Georgia.) Items from The Economatrix: …