Category: Economics & Investing

The welfare state, firmly entrenched: Benefit spending soars to new high (1 in 6 dollars of income come from governments checks. Let’s not forget: Every dollar that is “given”, must first be “taken” from someone.) Thanks to G.H. for the link. Currie sent us this: Latvian debt crisis shakes Eastern Europe. When sovereign debt markets disintegrate, you can expect governments to topple. And it won’t just be pipsqueak nation states like Iceland and Latvia that are at risk. From reader C.S.: Medical bills underlie 60 percent of U.S. bankruptcies: study Julian Robertson’s Steepener Swap Play (Shorting US Treasuries) When Julian …

Frequent content contributor GG sent this: Toxic assets ‘bridge too far’ Also from GG: come this from mainstream (Wall Street Journal) commentator Brett Arends: Is Your Portfolio Ready for Hyperinflation? Germany Blasts ‘Powers of the Fed’ Reader A.C. flagged this: Experts Fear U.S. Will Suffer Zimbabwe-Level Inflation From Trapper Mike: Dollar Declines as Nations Mull Reserve Currency Alternative Items from The Economatrix: Bernanke: Start Work Now to Curb Deficits “Rep. Paul Ryan of Wisconsin, the panel’s highest-ranking Republican, raised concerns about the budget deficits and the Fed’s own actions to stimulate the economy, including buying government debt. “This can be …

GG sent this: Europe Unemployment Rate Rises to Highest Since 1999 Also from GG; India Exports Fall by Record Amid Global Recession Wow! Spot silver is pushing $16 per ounce. I stand by my long-term prediction: The Dollar in the dumpster, and silver “sky high.” Note that there will probably be another sell-off during the upcoming Summer Doldrums for the precious metals. It is just about as predictable as the hills turningbrown golden in California each summer. Just look at that dip as another buying opportunity. Items from The Economatrix: Peter Schiff: Wall Street Unspun GM Bankruptcy Watch: Woe to …

In what must be one of the the most monumentally bad investments in history, the American taxpayers are now the majority owners of General Motors (GM), which presently has a market capitalization of around $480 million. The cost? We bought our 70% stake in GM for a paltry $50 billion. When I last checked, shares of GM were selling at 64 cents each, and GM (now nicknamed “Government Motors”) has filed for bankruptcy protection. I suppose that they’ll tell us that we can “make up for it, on volume.” Not wanting to miss out on a piece of the action …

Reader DEK sent this: Zoellick Warns Stimulus ‘Sugar High’ Won’t Stem Unemployment Long known as a propaganda outlet, Pravda occasionally gets a few things right: American capitalism gone with a whimper.(This piece was mentioned by more than a dozen SurvivalBlog readers.) Items from The Economatrix: GDP Drops For Second Consecutive Quarter Troubled Bank Loans Hit Record High BofA Lead Director Resigns; More Pressure on CEO Jefferson County, Alabama, Out of Money in Two Weeks After Tax Repealed Financial Markets And Economic Crash, The Next Leg Down Will Be Worse “Make no mistake – we are selling off our future and …

Leap in U.S. debt hits taxpayers with 12% more red ink GG flagged this: Silver poised for biggest monthly gain in 22 years; gold rises Items from The Economatrix: Economy Shrinks 5.7% in First Quarter Taxpayers Could Lose Billions in GM Revamp “GM expected to file bankruptcy on Monday.” Ford’s Top Supplier Files for Bankruptcy “Visteon bankruptcy protection filing is another blow to auto supply base.” Bond Markets Defy Feds as Treasury Yields Spike “The US Federal Reserve may soon be forced to launch fresh blitz of quantitative easing whatever the consequences for the US dollar, or risk seeing economic …

Hungary’s Economy Minister warns of currency crisis, “social collapse” without deep reform GG sent this Los Angeles Times piece: From deflation fear to inflation panic, so soon? Items from The Economatrix: Exploding Debt Threatens America With no change in policy, US debt will equal US GDP in just five years. Coming Dollar Bust–All But A Few Have No Clue “The failure of the housing market is only 40% to 50% over. All this is happening as policymakers, Goldman Sachs, JP Morgan Chase, Citicorp, etc., and the rest of the elitists are shifting all the debt from the financial sector to …

D.S. suggested this Gerald Celente audio clip “When this Bubble blows – it’s over” Also from GG: U.S. Inflation to Approach Zimbabwe Level, Faber Says Yet another from GG: Roubini says U.S. economy may dip again next year Items from The Economatrix: About 12 percent of U.S. homeowners late paying or foreclosed Signs of More Trouble For Housing “Wall Street is so hungry for good news that stocks rallied at the barest hint of upbeat indicators several times this month.” The Greatest Swindle Ever Sold Insanity Gone Rampant (Mogambo Guru) Stocks Down Amid Worries About US Debt 1Q Home Prices …

Frequent content contributor GG sent this Los Angeles Times article: Early retirement claims increase dramatically Cities disincorporating? Towns Rethink Self-Reliance as Finances Worsen. (Thanks to GRK for the link.) I found this linked at The Drudge Report: IRS tax revenue falls along with taxpayers’ income Items from The Economatrix: Carmakers’ Woes May Cost Six Million Jobs Oil Down to Around $61 Ahead of OPEC Meeting Stunning Reversal: Russian Economy Shrinks 23% Is the US Dollar Heading for a Mighty Crash? The Credit Default Swaps Cancer Inflicting the Financial System “CDS is the root-cause of systemic risk which connects hundreds of …

Reader Mike W. sent this: At Estates of the Fabulously Rich, Gilded Era is Going, Going, Gone D.S. recommended the ShadowStats primers series. D.S. comments: “Most folks that read SurvivalBlog are economically savvy – still, the ‘primers’ by John Williams at Shadowstats.com are excellent and help us understand the systematic distortion (okay, bald faced lies) about the real US Economy … I think this may aid folks as the economy ‘sails off the map’ or as flat earth maps stated ‘beware, beyond here lye Dragons’. Hmmm, think there is a correlation between ‘flat earth cartographers’ and today’s sheeple?” From Jack …

GG sent us this: Gold bugs at last have their perfect trinity Also from GG: The American peso. JWR Adds: As I’ve mentioned before in the blog, 72 is the crucial level to watch for in the US Dollar Index (USDI) . Anywhere south of there for more than two weeks could signal a collapse in international confidence in the dollar. Mike W. flagged this piece by Caroline Baum: Inflation ‘Cure’ Exposed When In-Laws Move In Also from Mike W comes this Wall Street Journal article on self-employment: Ready to Be the Boss? From HPD: Jesse’s Café Américain: Bernanke’s Wager …

Kevin A. sent us the link to a video clip about Mandelbrot protege Nicholas Taleb, of “Black Swan” fame: The Risk Maverick: Present Economy Worse than Depression. Mac F. recommend this basic, commonsense article: Money Shaky? 10 Ways to Get Your Financial Footing Items from The Economatrix: Fed President Says Inflation To Increase GM Borrows Additional $4 Billion From Treasury Didn’t publicly disclose how it would use the money. Fed Changes Rules to Benefit Government Carmakers California Faces its Fiscal Day of Reckoning Propane Suppliers Quietly Reduce Size of Refills Consumers unaware they are getting less for the same price …

From frequent content contributor KAF: Congressional Budgeters Predict 10.5 Percent Unemployment Rate Next Year Also from KAF: The Inside Story of Bank United. (How all those Option ARM loans came back to bite them.) Items from The Economatrix: Three More Banks Closed This Week Federal Reserve Cannot Account for $9 Trillion The Economy is Down But The Cost of Living is Going Up (Most canned vegetables at Wal-Mart were 50 cents per can last summer, now they are 72-to-74 cents per can.) US to lose AAA Rating? Dollar Falls to Four-Month Low Against Euro Stocks Hit ’09 Low on Ratings …

Reader GG suggested: Uncle Sam’s ‘F’-rated bonds GG also mentioned this piece by Mish Shedlock: FDIC to Open a Temporary East Coast Satellite Office. (Could they be expecting more bank failures or perhaps bank runs? The MOAB keeps expanding: Feds give $50 Million in aid to towns hit by auto layoffs. (Thanks to Tony Y. for the link.) Items from The Economatrix: Here Comes the Option ARM Explosion Russia Dumps US Dollar as Basic Reserve Currency Fannie and Freddie in “Critical” Condition Real Unemployment, GDP, Etc. Numbers Britain’s AAA Rating Threatened by S&P’s Stark Warning Conjuring Monster (The Mogambo Guru)

HPD found this: Mish’s Global Economic Trend Analysis: Automotive Pension Disaster; $42 Billion in Pension Promises Completely Unfunded Also from HPD comes word that another bank has bit the dust: BankUnited Bidders Said to Be Told Bank to Be Seized GG sent this bit of MOAB expansion news in the Wall Street Journal: Fed Boosts Efforts to Aid Commercial Real Estate Items from The Economatrix: Geithner: Major Banks Have Raised $48 Billion (Under the new FASB accounting rules or the old?) China Grows More Picky About Debt Local Banks Face Big Losses “Study of 940 lenders shows potential for deep …