Daily Digest

Daily Digest 1/24 - Ireland Government Crumbles, Silver is the New Gold, Heating Oil Rises on Cold Weather Forecast

Monday, January 24, 2011, 12:00 PM
  • Ireland Government Crumbles As Green Party Pulls Out Of Ruling Coalition
  • Mauldin: The Unsustainable Meets the Irresistible
  • Conserving Doomed Systems (Or, Why We're Staying On The Titanic)
  • Silver Is The New Gold
  • U.S. Jobs Outlook Rises to Decade High, Survey Says
  • Heating Oil Rises on Cold Weather Forecast for U.S. Northeast
  • Citi Warrant Sale On Tap for Treasury

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Economy

Ireland Government Crumbles As Green Party Pulls Out Of Ruling Coalition (pinecarr)



It has been a while since we had one of those "before Asia opens" kind of Sundays. Today just may be one. BBC has just reported that the Irish Green party has pulled out of the ruling coalition with Fianna Fail which is "expected to bring forward the general election from 11 March." In other words suddenly the entire Irish "rescue", taken for granted for over a month, will have to be reexamined, once the new ruling party, which will certainly be from the current opposition reevaluates the terms. Elections are now expected to come some time in mid-February. Look for peripheral bond spreads to go whooosh tomorrow.

Mauldin: The Unsustainable Meets the Irresistible (jrb)



A few more thoughts on state and local spending. First, Congress needs to go ahead and authorize a bill allowing states to file for bankruptcy. At the very least, this send s very clear message to the states that the federal government will not come to their aid. It is not fair to ask states that have done what they need to do to keep their fiscal houses in order, to support states that have overspent, typically by trying to fund their pensions and run other well-intentioned but underfunded programs.

Conserving Doomed Systems (Or, Why We're Staying On The Titanic) (pinecarr)



We have a choice: discomfort or collapse. The voices in favor of discomfort (i.e. sacrifice of something inessential to help others with less) are so few and the voices of critique and naysaying are so cacophanous and loud they drown out the few. Look, if everyone who "earned" their $1,100 monthly Social Security benefit takes a 50% cut to "save the system," what does that mean? To me, it means the household drawing $6,000 a month in other pensions receives a 7.7% cut-- a trivial sum that won't damage the prospects of the household in the slightest. ($6,000 + $1,100 = $7,100 - $550 = $6,550, and $550 / $7,100 = .077)

Silver Is The New Gold (doug)



Suffice to say, most people in the investment world have been conditioned to believe that a silver shortage is impossible, in addition to being fixated on gold as the only insurance you need for your portfolio. This is the power of recent history, of the language that is used to describe silver (its industrial), and a view that is still encouraged by some gold dealers. While I haven’t done a poll, I would bet many in the gold industry assume that a genuine silver shortage for industrial purposes is highly unlikely. This perception is largely reinforced by the major world market maker in the white metal, the COMEX division of the New York Mercantile Exchange.

U.S. Jobs Outlook Rises to Decade High, Survey Says



The report adds to evidence, including a drop in claims for unemployment benefits, showing the job market is strengthening in early 2011. Payrolls rose by 103,000 workers in December, less than the median forecast of economists surveyed by Bloomberg News, and the unemployment rate fell to 9.4 percent from 9.8 percent a month earlier, according to Labor Department figures released Jan. 7. Economists surveyed by Bloomberg this month forecast unemployment will average 9.3 percent this year.

Heating Oil Rises on Cold Weather Forecast for U.S. Northeast



Heating oil gained for the fifth time in six days as below- normal temperatures were projected in the U.S. Northeast Jan. 29 through Feb. 6, according to the National Weather Service’s Climate Prediction Center. The Northeast is the largest user of heating oil. “It’s cold and that’s the most logical explanation why heating oil is so strong and is probably providing the support that the market has today,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.

Citi Warrant Sale On Tap for Treasury



The Treasury announced on Monday that it plans to sell 465 million warrants to purchase Citi shares, some with an exercise price of $17.85, which expire on Oct. 28, 2018, and others with an exercise price of $10.61, which expire on Dec. 31, 2018. The offerings will take place in modified Dutch auctions on Tuesday.

Article suggestions for the Daily Digest can be sent to dd@PeakProsperity.com. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

18 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

"Downgrades of bonds issued by state and local governments could increase this year, according to a report to be issued Monday by credit-rating agency Standard & Poor's.

The $2.9 trillion municipal-bond market has been thrown into tumult in recent months, in part because of growing fears that some state and local governments will default on their debt. Investors have pulled out record amounts from muni-bond mutual funds, while the yields on muni bonds, which move inversely to price, have hit their highest levels since the depths of the financial crisis.

A downgrade of a government borrower would likely put downward pressure on the price of its bonds, resulting in higher borrowing costs and potential losses for investors."

"European Central Bank President Jean-Claude Trichet signaled the bank won’t react to a temporary jump in inflation caused by higher commodity prices as long as it doesn’t fuel wage increases, or so-called “second-round effects.” "

  • Other news, headlines and opinion:

Kan Says Japanese Public Must Shoulder Burden Amid `Severe' Fiscal Strain

High-Frequency Trading Is 77% of UK Market, Tabb Group Says

Yuan soon to be currency of choice

Mo. Medicaid spending projected to rise by 5.5 percent during the next fiscal year

Texas' love/hate relationship with D.C.

Slow-Growth U.S. Now Ripe for Consumption Tax: Kevin Hassett

Europe struggles with the pension puzzle

NIA Inflation News Update (Video)

Treasuries Decline Before $99 Billion in Note Auctions, Reports on Economy

Japan Pledges to Take Bold Action on Yen If Abrupt Gains Threaten Outlook

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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

For me, the CHS piece "Conserving Doomed Systems" was a classic and worth everyone's time. It reinforces my concern that we will not manage the "difference" of the next twenty years very well.

Another one worth your time today is Mish's column.

http://globaleconomicanalysis.blogspot.com/2011/01/world-economic-forum-endorses-fraud.html

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earthwise
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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

MarkM wrote:

For me, the CHS piece "Conserving Doomed Systems" was a classic and worth everyone's time. It reinforces my concern that we will not manage the "difference" of the next twenty years very well.

Another one worth your time today is Mish's column.

http://globaleconomicanalysis.blogspot.com/2011/01/world-economic-forum-endorses-fraud.html

On a similar note, check out a quick observation from Denninger on why we're doomed.

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mobius
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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

From across the pond (Europe)

Hubby and I were watching BBC's latest edition (UK version) of Top Gear, the car TV magazine, and even the presenter Jeremy Clarkson, a very, hmmm, chauvinist car hugging hedonist, admitted to rising gasoline prices due to Peak Oil.  This is quite a shock for us to hear from him.  Peak Oil on a TV programme that glorifies gas-guzzling luxury cars?

Also out the Euro-media front :  on the Dutch national news:  oil fields in the province of Drenthe are coming back on-line since 1995.

This isn't empirical evidence, but on a Pop-culture Index : it's an all-time High score.

Hold on tight 'cos this year is gonna be a bucca-roo!

Cheers, Joanne.

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Damnthematrix
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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

Following the links from that CHS piece led me to another article by Steve Keen (one of my favorite Australians!) here.

"Foolish me: here was I, thinking that credit might also be used to fund Ponzi Schemes."

I was also interested to see the comment below from Keen in reply to another:

Steve Keen says:

Will do Atticus: as you know, I agree with you on the need for a Jubilee.

See.....  I'm not he only one rooting for debt cancellation!

Mike

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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

DTM wrote:

See.....  I'm not he only one rooting for debt cancellation!

Mike

It's a strange, but intriguing idea, isn't it Mike?  On one hand, if I put myself in the place of the US's major creditors, like China, and I think, why the heck would I want to cancel debts and let my debtors screw my country over like that?

The problem with that choice, tho, it that then they continue to risk going down with their debtors.

So then, on the other hand, I put myself in the place of the US's major creditor's, like China, and I think, why the heck WOULDN'T I be willing to cancel debts, if it reduced the risk of a global financial collapse, possibly saving my own country?

-It's a very strange trade-off to consider! 

I'll admit, I have some assumptions built into my black-and-white, either-or scenario that may not be rock solid.  E.g., is it more of a risk for China to let the US economy collapse vs cancelling its debts?  What if, instead, China (and others) decoupled from the US reserve currency tentacle by tentacle (as they currently seem to be doing, if for no other reason than as a defensive maneuver)?  I believe that is high risk also, but is it necessarily riskier?  I envision that scenario as being like the magician who is trying to pull a tablecloth out from under a heavily laden table without disturbing everything sitting on top of it!

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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

goes211 posted this in the 'Social breakdown and the risk of violence' thread, seems to be worthy of a repost.

http://www.realclearmarkets.com/articles...

The U.S. Rests On a Foundation of Violence

By Bill Frezza

Much ink has been spilled debating the proposition that "vitriolic rhetoric" can spur a madman to violence. Politicians were quick to distance themselves from any association with violence, which is ironic since the power to compel the rest of us to obey the laws that they make ultimately rests on violence or the threat thereof.

Yes, government sponsored violence is controlled and sanitized to the point that it is invisible to most of us. You wouldn't want it any other way. A government that has to resort to frequent displays of violence is a government that has lost legitimacy.

Yet anyone who believes that a government could govern lacking the ability to arrest, imprison, and shoot people is a utopian dreamer. In order to maintain legitimacy, however, the government must abide by the terms under which it was empowered. When we-the-people granted a monopoly on the lawful right to initiate force to our duly constituted government we did so under a historically unique set of rules..

The very idea that citizens can confer sovereignty on a national government is, of course, a modern invention brought to us by the violent revolutionaries that founded our country. Prior to their decision to take up arms against their king the idea that a government should be constituted by and for the people was considered madness.

Because the American people went on to demonstrate the virtues of life, liberty, and the pursuit of happiness the consent of the governed is now modern civilization's sine qua non. A civil war was fought when this consent broke down, but after the federal government violently overpowered secessionist state governments the experiment resumed.

Despite that bloody interlude the founding formulation that the government should not wield absolute power but only limited and enumerated powers persisted into the 20th century. Only the unprecedented federal response to the Great Depression overwhelmed these limits. Their final destruction and the advent of unlimited majoritarianism is the central political question of our age.

The founders were not omniscient; hence our Constitution was designed to be amended allowing future governments to meet the needs of a growing nation. But the bar for granting powers beyond those originally listed was set high. Neither executive action nor popular legislation nor the sophistry of judges was supposed to be sufficient to grant new powers to the federal government. This unique architecture was designed to prevent the country from descending into a tyranny of the majority, the end stage of all prior experiments in democracy.

A growing segment of the public has come to fear that the American experiment is in danger of failing precisely because we have abandoned this concept of limited government. The list of things that American citizens are either compelled or forbidden to do under threat of violence has exploded, with no end in sight. The mystery is not understanding why so many people are angry. The mystery is understanding how anyone could be surprised that the uniquely American spirit of individual liberty is making so much noise as it mounts its last stand.

Close your eyes and imagine the vitriol that would spew from the pen of Thomas Jefferson or the lips of Patrick Henry or the tar and feathers of the Sons of Liberty if they were handed a copy of the federal register and could see how many nooks and crannies of our lives and businesses have been invaded by the government.

This state of affairs came about because the American people traded away their liberties piecemeal in return for promises of collectively financed economic security. Who wouldn't like to live at the expense of his neighbor? Besides, everyone knew that the day of reckoning would be far away.

This worked until an economic tsunami revealed the rotten pillars of our debt-fueled illusion. The day of reckoning has dawned. What happened next was entirely predictable. The federal government went on a binge intent on demonstrating that its bankrupt promises could somehow be kept.

This was not just a spending binge but a power binge. The binge was not restricted to tackling proximate economic problems, which might have been tolerated even if ineffective. Power was also arrogated to enact a broad Progressive agenda, unfinished business left over from that movement's last high water mark. A new set of even more expensive promises were born.

The politicians behind this agenda suspected they might hold the upper hand for only a moment, so after biding their time for decades they were determined to make the most of it. They laughed when challenged with the idea that the new powers they were grabbing had no basis in the Constitution. Limits? What limits? We have the majority and we will do as we please!

This is what sparked tea party rage. This is what drives the vitriolic rhetoric. This is what has people handing out copies of the Constitution with the second amendment underlined. More and more citizens seem to be shouting words to the effect that if ruling elites insist on using government sponsored violence to impose a Eurosclerotic social democracy on a people that still claim to value freedom, they had better be prepared to be answered in kind.

This is not the madness of a paranoid schizophrenic. It is neither thoughtless nor random nor misdirected anger. The nation is boiling with the rage of millions of citizens who understand and cherish their own history, realizing perhaps too late that they have foolishly squandered their patrimony.

Politicians claiming to represent these angry people may soon regain the majority. If this happens will these politicians be able and willing to stuff the genie of government power back in the bottle? Don't count on it. Power once obtained is more often abused than relinquished.

More importantly, will the American people mend their profligate ways and return to the historic values of economic prudence, individual liberty, and personal responsibility that made this country great? Will a majority be willing to surrender their illusions of unsustainable entitlements and stop rewarding politicians who promise more, returning instead to a life of self-reliance while limiting public charity to only the most needy?

History suggests that this is unlikely.

saxplayer00o1's picture
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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

"HARTFORD, Conn. (AP) — Gov. Dannel P. Malloy is ruling out any thought of Connecticut declaring bankruptcy, despite the state's deficit problems, saying the idea is wrong-minded and would endanger the municipal bond market.

Malloy told reporters on Monday that it's "crazy talk" to float the idea of states seeking bankruptcy protection.

While states are prevented from taking such an action, some like Illinois and California are facing fiscal situations so dire that bankruptcy has been discussed as a possible way to break union contracts and reconstitute their financial situations.

Malloy says the marketplace for state and local bonds would disappear if states began filing for bankruptcy.

Connecticut's deficit for the new fiscal year is predicted to be $3.4 billion to $3.67 billion."

House GOP leader says no federal bailout of states

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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

I often wondered why Glenn Beck would actively encourage his listeners to invest in Silver.  Beck works for Fox News, Roger Ailes then ultimately Rupert Murdoch and I my opinion the Globalists, so he does not speak independently but instead tows the company line.  So the real question is why is Fox News encouraging Americans to buy Silver?  

I posted earlier that several people who I encouraged to prepare did not take heed until Beck began to champion many of these same ideas;  food storage ,buying precious metals, etc.  then these same people wanted to know how to buy Silver then did, at the height.  Now they are pissed that they are losing money.  I wonder how many times this same scene played out across our Country.

Someone has a vested interest in destroying Precious Metals as a store of wealth in the common man' eye.  Possible effective tactic to accomplish this ; build up Silver as a store of wealth to the common man's eye using a sustained, convincing campaign delivered by one of their heros, encourage them to buy and when they do, in mass,  pull the rug right out from underneath their feet then kick 'em where it hurts; the wallet.

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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

Well Nacci, the trick is to be ahead of the curve.  Right now, I'm "investing" in antique furniture primarily because its quality that has no equal from its contemporary counterparts that are made in China.

Quite frankly, with a bit of digging around the Net and some good 'ol hitting the pavement there are some gorgeous pieces out there that are a steal!

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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

mobius wrote:
 Well Nacci, the trick is to be ahead of the curve.

Mobious, I believe the trick is in destroying the thought of Gold and Silver as a store of wealth in the people's mind.  When Glen Beck and Fox News starts encouraging Their viewers to but antique furniture I suggest you sell.

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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

Nacci wrote:
Now they are pissed that they are losing money.  I wonder how many times this same scene played out across our Country.

You are looking for conspiracy where none exists.  Lets look at some approximate close prices on a couple of dates:

2/29/2009  -  $14.40

4/17/2009  -  $12.00   (wow! a $2.40 loss -  down 17%)

---------------------

12/31/2010 - $30.75

01/24/2011 - $27.00  (down about 12%)

But if that's your worry, you probably shouldn't be buying silver.  I look at the neat 100% gain in a year!  Yes - it's volitile, conspiracy, I doubt it... 

I'm salute Fox news for suggesting precious metals to their viewers.  It will be quite a coup when the Fox viewers aren't flat broke like the CNN viewers in a few years. Wink

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Nacci
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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

rhare wrote:
 But if that's your worry, you probably shouldn't be buying silver.  I look at the neat 100% gain in a year!  Yes - it's volitile, conspiracy, I doubt it...  I'm salute Fox news for suggesting precious metals to their viewers.  It will be quite a coup when the Fox viewers aren't flat broke like the CNN viewers in a few years. Wink 

I am not worried,  I have been squared away for a hell of a lot longer than a year.  I was commenting on the timing of so many of the people I know who just now bought into Silver at the suggestion of Glen Beck and Fox News just before this take down as well as the possibility that if you were looking to destroy confidence in the minds of new purchasers this might be an effective tactic.  As for seeing conspiracies where none exist; I freely admit my post is speculation but would be grateful if you could show me the facts you used to determine that for your post.

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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

Glenn Beck has had Goldline as an advertiser for about 10 years... I think silver was about $2 bucks back then....perhaps you have just started watching him?

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Damnthematrix
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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...
Resolution Calling to Amend the Constitution Banning Corporate Personhood Introduced in Vermont

On the anniversary of the Citizens United decision, Vermont politicians are moving to deny corporations the rights that humans enjoy.

By Christopher Ketcham

January 22, 2011 "AlterNet" -- - A year ago today, the Supreme Court issued its bizarre Citizens United decision, allowing unlimited corporate spending in elections as a form of “free speech” for the corporate “person.” Justice John Paul Stevens, writing for the dissent, had the task of recalling the majority to planet earth and basic common sense.

"Corporations have no consciences, no beliefs, no feelings, no thoughts, no desires," wrote Stevens. "Corporations help structure and facilitate the activities of human beings, to be sure, and their 'personhood' often serves as a useful legal fiction. But they are not themselves members of 'We the People' by whom and for whom our Constitution was established."

Fortunately, movements are afoot to reverse a century of accumulated powers and protections granted to corporations by wacky judicial decisions.

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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

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Re: Daily Digest 1/24 - Ireland Government Crumbles, Silver ...

World needs food system overhaul: report

The world needs fundamental changes to the global food system to feed the expanding population, according to a British government report on how to feed the planet until 2050.

Governments must take action to change dietary habits, cut waste, reduce subsidies and embrace genetically modified food, said the Global Food and Farming Futures report.

The study led by Professor John Beddington, the British government's chief scientific adviser, said that with the global population forecast to reach nine billion in 40 years' time, radical changes were needed to a system already struggling to feed the existing population.

"With the global population set to rise and food prices likely to increase, it is crucial that a wide range of complementary actions from policy makers, farmers and businesses are taken now," Beddington said.

"Urgent change is required throughout the food system to bring sustainability centre stage and end hunger. It is also vital for other areas, such as climate change mitigation, conflict, and economic growth."

The report found that the threat of hunger could increase, saying that current efforts were already stalling and food prices could rise substantially over the next 40 years.

As hunger spread, the threat of migration and conflict would increase, while wider economic growth would also be affected, it said.

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world needs food system overhaul

Monsanto will rule the world!

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