Category: Economics & Investing

Dollar hit on Fed’s signal of low rates. Meeting minutes show Fed has strong lean to more debt monetization. (Thanks to GG for the link.) Brian H. sent us a link to a piece in Zero Hedge. that quotes Money magazine: “Now 5 institutions hold 97% of the notional value [face amount] and 88% of the market value in derivatives, and they are all basically in the same business and all basically hedge with each other. It is not a true hedge when the other side can’t pay, and history has clearly proven how easy it is for the other …

Karen H. mentioned this sobering piece, also subsequently sent in by several other readers: Foreclosures: ‘Worst three months of all time’ The latest from Dr. Housing Bubble: A Comprehensive Look at the Southern California Housing Market: 60,000 Properties Listed on the MLS but over 100,000 in Shadow Inventory. California and Nationwide Median Home Price Trends since 1968. Say Good-Bye to Option ARMs. Also from Karen: Dollar to Hit 50 Yen, Cease as Reserve IRS Intensifies Global Hunt for Secret Offshore Bank Accounts Desperate Dollar Heading to the Basement. (BTW, they concur with my comments on the USDI‘s crucial support level: …

GG sent us this New York Post article: Dollar loses reserve status to yen & euro Fed’s Bullard warns on inflation, unemployment. (Thanks to GG for the link.) Value of UK farmland could double in five years. Jeff mentioned this piece at Zero Hedge: Why Did U.S. SDR Holdings Increase Five Fold in the Last Week of August? Items from The Economatrix: Weak Dollars, Strong Euro Combine to Create Eurozone Pain Rogers Sure Gold to Hit $2,000, Dollar to Lose Reserve Why Soaring Gold Prices Should Set Off Alarm Bells Unintended consequences of deflation: Colorado Minimum Wage to Drop as …

Dear Jim and Family, I wanted to comment on the alleged threat of the Saudis to decouple the US Dollar from Oil sales. They’ve been saying that for a decade. The Iraqis promised to do it, one of the primary reasons for the invasion. The Iranians did it, but nobody cares because they’re an oil importing nation so they don’t actually matter much. The Venezuelans have been trying to get the rest of OPEC to do it since we nearly got Chavez ousted in a coup backed by the US. Pity that failed, but there will be a next time …

Karen H. sent this: Dollar Facing ‘power shift Also from Karen: Stone Calls U.S. Economic Growth Outlook “Troublesome” in 2010 GG sent this: Silver Lining: Jim Rogers Talks Up Commodities Reader D.D. sent the link to a good piece by Bill Fleckenstein: Your dollars are just Monopoly money Items from The Economatrix: Gary North: The Fed’s Schizophrenic Monetary Economist Failed Financial Policies and Rising Unemployment in the US Stocks Bear Market Rally Will Soon Be Over Government Deficit Spending Killing the US Free Market

Reader Brian S. sent this: Dutch DSB Bank Nationalized After Bank Run By Clients. “The Netherlands’ central bank said Monday it has taken control of DSB Bank NV after clients began a run amid fears the regional lender might collapse.” Brian notes: “People can [presently] only take 250 Euro per day from their accounts.” Icahn: Risk of Double Dip, Investor ‘Bloodbath’. (Thanks to Flavio for the linkio.) A piece by Charles Hugh Smith posted over at Housing Storm: Deflation or Inflation: Who Cares? Analysis from Greg Fielding (also at Housing Storm): Did the FHA make bad loans with taxpayer money …

Mara spotted this: First Fannie and Freddie, Now the FHA? Mara’s comment: “Every time I read about more bailout money for existing “customers” or new bailout money for new “customers,” I start to get woozy and lightheaded! Good thing I am sitting down when I read this stuff!” GG flagged this New York Times piece: Failures of Small Banks Grow, Straining F.D.I.C. (100th US bank failure thusfar for 2009.) Items from The Economatrix: The Great Recession: The Numbers Tell The Story Investors to Companies: Show Us Higher Sales State Budgets Get Adrenaline Shot From Clunkers World’s Largest Shopping Mall is …

The Other Chris sent the link to a New York Times piece: Foreclosures Mark Pace of Enduring U.S. Housing Crisis. Here are some key quotes: “Every 13 seconds in America, there is another foreclosure filing. That’s the rhythm of a crisis that threatens to choke off hopes for a recovery in the U.S. housing market as it destroys hundreds of billions of dollars in property values a year.” “Michael Barr, the Treasury Department’s assistant secretary for financial institutions, said more than 6 million families could face foreclosure over the next three years.” “The Centre for Responsible Lending says foreclosures are …

Reader KAF forwarded this: U.S. Budget Deficit Hit Record $1.4 Trillion in 2009 Illinois State Comptroller Dan Hynes Says State Finances A Mounting Crisis, Things Getting Worse. (Thanks to Jeff B. for the link.) Matt in Tennessee alerted us to this video clip from Gerald Celente: The Dollar is Finished. And, BTW, Peter Schiff agrees. He announced “The carry trade [in US Dollars] is on!” Items from The Economatrix: Roubini: Housing Market Hasn’t Bottomed Yet Treasuries Fall After Weaker-Than-Average Demand at Bond Sale US Budget Deficit Balloons to $1.4 Trillion Questions Remain About Iceland’s Banking Collapse Latvia Threatens Foreign Banks …

Reader CP suggested a column piece by Malcolm Berko: Taking Stock. CP’s comment: “While Berko runs an investment advice column, he’s generally not a cheerleader for irrational exuberance. This response to a reader’s question is an general indictment of the markets and those who might as well be donning grass skirts dancing on a beach to appease the financial gods.” Commentary from Dan Denninger: Consumer Credit: Disaster, Down $12 billion Items from The Economatrix: US Consumers Cut Borrowing by $12 Billion in August Mortgage Rates Below 5% Fuel Re-Fi Boom Gold Price Hit Record High on Report to Ditch Dollar …

Thanks to reader GWC for this: U.K. Faced ‘Bank Runs, Riots’ as RBS and HBOS Neared Collapse GG spotted this key data point: Hours worked plummets to all time low Thanks to Damon for this news item: Venezuela inflation estimated at 26%, annually. (Prices were up 2.5% in September. But don’t worry. Comrade Hugo has a plan.) Mark G. found an interesting New York Times blog article: What Happened to Argentina? Items from The Economatrix: UN Calls For New Reserve Currency Australia Rate Hike Good Sign for World Economy National Retails Groups Forecasts Weak Holiday Season Weak Dollar, Strong Stock …

GG was the first of more than a dozen readers to mention this article by Robert Fisk (an outspokenly leftist journal list, so take it with a grain of salt.): The demise of the dollar; In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading. Given the import of the preceding (if it is true), is it any wonder that the USDI is tanking, and the future and spot prices of precious metals are going through the roof? You’ve had plenty …