Category: Economics & Investing

Readers “Bigbird” and Trapper Mike both sent this: Brazil and China eye plan to axe dollar John Hussman warns: Inflation Ahead! The Destructive Implications of the Bailout – Understanding Equilibrium (Thanks to GG for the link) Frequent content contributor GG sent us this: Tax Revenues Tanking. Yikes! Look at the tax receipts for April of ’08 versus April of ’09. I suspect that the panic reaction in Congress will be raise the marginal tax rates. Thanks to DS for sending this: Stocks waver after surprise drop in housing data (This leads me to ask: Why are journalists so surprised that …

From frequent content contributor GG: China holds sway over US Dollar “The U. S. should be afraid, very afraid. China is questioning the dollar’s status as a reserve currency and, at US $1,000 an ounce, gold has become the world’s de facto currency.” – John Ing, Maison Placements in Canada Mike S. suggested a piece titled “Obsessive Housing Disorder” on Michelle Malkin’s blog, that describes the history of our dysfunctional housing market. HPD sent us a link to a piece by economic commentator Mish Shedlock: If You’re Not Petrified of Obama, You’re Not Paying Attention Items from The Economatrix: AP …

GG sent us this: CBO admits for first time chance IMF may default From The Daily Bell: Jim Rogers: Food prices will skyrocket. Raise rates soon or face inflation disaster, experts warn… Items from The Economatrix: Hot In Recession: Cheaper Wine, Chocolate, Running Shoes, Spam GM, Chrysler Dealership Cull to Cost 100,000 Jobs The Return of the Banker’s Bet $3 Trillion Later… “Could there be a better time to be a bank? Governments are endorsing high leverage and guaranteeing huge parts of the financial system, so you get to keep the profits and palm off the losses on the taxpayer.” …

Yishai was the first of several readers to mention this “must read” piece: US speeding towards financial crash   Jimmy G. sent this: Stocks still face deflationary collapse: Prechter. I agree that there will be deflation, but only in the short term. I still see Uncle Sugar’s only viable option is inflating their way out of this mess. This leads me to coin a new motto: Never underestimate the ability of governments to print money. Items from The Economatrix: Six Insurers to Get Billions in Bailout Money (JWR Notes: The MOAB won’t stop growing!) GM to Close 1,100 Dealerships Consumer …

James, My experience with [US Mint] Silver Eagles is similar to your description [of their lack of widespread recognizability]. I traded 1 silver eagle for some merchandise at $20 USD per Eagle. The person was happy. I explained to them that this was 1 oz. of silver and at the time of the trade it was equal to the amount that I told them. A few days later I went back seeking to trade again and they told me that since the face value [marked] on the coin was $1 USD that it was all the value they would exchange …

Dimitri Orlov on The New Money (A hat tip to Ruby and Vlad’s Mom) The truth escapes the lips of BHO: Obama Says U.S. Long-Term Debt Load ‘Unsustainable’ I’m praying that he does the right thing, but given the composition of Big Government/Big Taxes/Big Deficits policy wonks that were picked for his Cabinet, I have my doubts. Thanks to B.H. for this video link: “The Worst Is Yet to Come”: If You’re Not Petrified, You’re Not Paying Attention GG sent us this: China’s yuan ‘set to usurp US dollar’ as world’s reserve currency Items from The Economatrix: Even BoE Has …

Dear Sir, Regarding comments made in the letter on which form of precious metals to buy, readers should be aware that numerous Chinese fake silver dollar coins exist in today’s market. I recently became aware of these by an honest seller who identified the fakes as such, and sold me a couple for comparison purposes. They are available as common Morgan and Peace dollars as well as more numismatically valuable styles such as draped bust and trade dollars. They look surprisingly realistic and appear to have normal aging and wear consistent with what you would expect. Believe me when I …

Just as I envisioned three years ago, derivatives are now in thes spotlight: Treasury Seeks More Financial Regulations in Shadowy Markets. (Thanks to Danny S. and KAF, for the link.) From the Appenzell Daily Bell: Beginning of the end? Fed cannot account for $9 trillion KAF sent us this: David Frum: Quick fix today, crisis tomorrow in Obama’s White House Redaer GG flagged this: Strong appetite for silver boosts coin production “Mints around the world almost doubled their silver coin production in the first quarter in response to a surge of investor interest in the metal.” Items from The Economatrix: …

Dear Sir, During a discussion with a friend today, we chatted about which format of silver would be most viable as a form of a tangible asset. We discussed the recognized value of Silver American Eagle coins versus”silver rounds”, and found ourselves asking more questions than being able to provide reasonable answers. The conversation was based on my recent decision to convert US currency into silver rounds at a price of $0.90 over spot price (at the time $11.91 per ounce). This was a much lower price than the $3.59 over spot price for Silver American Eagles, so it seemed …

Greg C. mentioned some commentary by Howard Rich: The United Fiefdoms of America. “For the first time ever, federal aid – not property, sales or income tax – is the top revenue source for state budgets, the paper reported.” GG flagged this by Karl Denninger: Nothing Suggests We’re Anywhere Near the Bottom CJB suggested this article: Social security to run out of money… And, in a disturbing echo, GG suggested this: Medicare already in the red Items from The Economatrix: Social Security and Medicare Worsens (since yesterday’s article) “The trust funds — which exist in paper form in a filing …

White House forecasts higher budget deficit: ” …a $1.75 trillion deficit, or 12.3 percent of GDP.” Skip sent me this: Is America About to Go Broke? WSJ Video: Dow 4,000 Still in the Cards (Thanks to Chris for the link.) From Greg: Commodities – Shortages stir coffee and sugar prices From Tom S.: Where are Argentina’s coins? Items from The Economatrix: US Red Ink Rises Even Higher, $1.8 Trillion The Federal government will have to borrow nearly 50 cents for every dollar it spends Chinese Deflation Picks Up Speed Local UK Governments Lose 2.5 Billion Income Enjoy The “Rally”…Sucker Punch …

Now, the truth comes out: Banks Won Concessions on Tests. I figured the “tests” were rigged, but not quite so blatantly. And here are some more details on the “Buddy-Buddy” Creative Accounting: Fed cut banks’ deficits after negotiations: report. (Thanks to Roger Y. for the links.) Reader D.D. sent his one: Next challenge for banks: Credit card losses Number usually tracks unemployment, but this time it may be worse Items from The Economatrix: Global Financial & Economic Crisis: How Much Time Do We Have Left? “The US-Dollar has been technically hyper inflated, even though no one is saying “the king …

From Eric S.: 24,700,000 Unemployed or Underemployed Americans: Job Losses Accelerate with 6 million unemployed over last year. Real Unemployment rate now at 15.8 Percent. Also from Eric: FDIC Insures $4.7 Trillion in Deposits with a $13.6 Billion Deposit Insurance Fund. This is Like Going into a Hurricane with a 99 Cent Store Umbrella. Items from The Economatrix: UK House Prices Continue To Plummet 401(k)s Hit By Withdrawal Freezes Global Crisis “Vastly Worse” Than 1930’s, Taleb Says “The global economy is facing “big deflation,” though the risks of inflation are also increasing as governments print more money, Taleb told the …

Swine Flu: Worst to Come in Autumn “Doctors are being warned to prepare for a second, “much worse” wave of swine flu hitting Britain in the autumn, the Health Secretary has disclosed.” Tamiflu Linked to Abnormal Behavior KAF sent this: Economic crisis in European Union Items from The Economatrix: Real Unemployment 15.8%; Highest Since ADA Began Tracking The Greatest Boondoggle in History Skousen: Bailouts & Bankruptcy: Undoing The Rule of Law GM Spots Bankruptcy In Rearview Mirror as it Burns Tankfuls of Gas Toyota First Annual Loss Stress Tests Show 10 Biggest Banks Need to Raise $75 Billion China Fears …