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Daily Digest 7/30 - Gold And Euro Hedge Higher, Asia Readies For QE3 Coaster

by Daily Digest
Monday, July 30, 2012, 10:32 AM

Economy

Gold Prices and Euro Edge Higher, Fed Moving Closer to more QE (Taki T.)

“The current levels of interest rates on sovereign debt markets don’t correspond to the fundamentals of the Spanish economy,” said a joint statement issued yesterday by German finance minister Wolfgang Schaeuble and Spanish economy minister Luis de Guindos.

Here in the UK, the economy shrank by 0.7% in the second quarter – the third consecutive quarterly fall and the steepest since Q1 2009 – according to preliminary GDP estimates published Wednesday.

D.C. food bank to open $37 million facility to combat ‘growing hunger crisis’ (A. Woll)

The 123,000-square-foot facility at 4900 Puerto Rico Ave. NE is designed to help bridge that gap. The facility over time will double the current food bank’s capacity, with more refrigerated and freezer space for meat, produce and dairy products, a roomy teaching kitchen for nutrition classes and space for volunteers to pack more “weekend bags” of food for children to take home from school.

Asia readies for QE3 roller coaster (cmurray)

China also looks to be getting serious about getting stimulus underway. Last week came the unexpected news that the city of Changsha has launched an 829 billion yuan ($130 billion) investment plan, raising expectations other localities will follow suit.

As Syrian War Drags On, Jihadists Take Bigger Role (jdargis)

Idlib Province, the northern Syrian region where resistance fighters control the most territory, is the prime example. In one case there, after jihadists fighting under the black banner of the Prophet Muhammad staged significant attacks against Syrian government targets, the commander of one local rebel military council recently invited them to join. “They are everywhere in Idlib,” said a lean and sunburned commander with the Free Syrian Army council in Saraqib, a strategic town on the main highway southwest from Aleppo. “They are becoming stronger, so we didn’t want any hostility or tension in our area.”

A Big Beast To Tackle (jdargis)

At first glance, Mr Obama’s critics have ample ammunition. Federal spending during his term was the highest relative to GDP since the end of the second world war. A record number of the population now gets federal entitlements such as Medicaid and food stamps. The federal government backs 90% of new mortgages, up from half before the financial crisis, as well as a growing share of student loans. Staffing levels at regulatory agencies have ballooned, and they churn out more and costlier rules than their predecessors.

My Big Fat Belizean, Singaporean Bank Account (jdargis)

I ended up working with A&P Intertrust, a Canadian company that I chose largely because I liked its Web site the best. (The other two companies’ sites appeared stuck in a late-’90s style with lots of flashing boxes.) A&P works with the governments of Panama, the British Virgin Islands and Belize. (Other companies that I contacted prefer the Seychelles, Cyprus or the Cayman Islands, where Mitt Romney has been reported to have money.) I decided to start my shell company in Belize because it would be exempt from all Belizean taxes and, as A&P’s site explained, “information about beneficial owners, shareholders, directors and officers is not filed with the Belize government and not available to the public.” And I’ve been to Belize and like the place.

US Opens Public Land for Utility Scale Solar Projects (James S.)

Steven Chu, the US Energy Secretary, said that “developing America’s solar energy resources is an important part of President Obama’s commitment to expanding American-made energy, increasing energy security, and creating jobs. This new roadmap builds on that commitment by identifying public lands that are best suited for solar energy projects, improving the permitting process, and creating incentives to deliver more renewable energy to American homes and businesses.”

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."

6 Comments

Mon, Jul 30, 2012 - 12:15pm
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Foreigners reduced their investment in Spanish debt

Headlines:

  1. Spanish GDP contracts 0.4% in second quarter
  2. Obama Sees 2012 Deficit Down to $1.2 Trillion, GDP at 2.6%
  3. Italy Yields Drop at Auction on Prospect of ECB Bond Buying
  4. Court lets Stockton, Calif., cut retiree healthcare
  5. Moody's Says ECB Can't Resolve Euro-Zone Debt Crisis
  6. Pa. cities underfund pension plans by $6B+
  7. Foreigners reduced their investment in Spanish debt at nearly 80,000 million
  8. Euro zone crisis heads for September crunch

...............I just looked at #5 and for some strange reason started thinking of those good old days of Davos and the "M" word.

Mon, Jul 30, 2012 - 1:36pm
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Mississippi Nears Record Lows, Transport Impacted

Along with the drought, this river traffic issue will have an effect on food and bulk commodity prices and delivery...

The Not-So-Mighty Mississippi: How the River’s Low Water Levels Are Impacting the Economy (July 30, 2012)
"Along the 2,500 miles of the Mississippi, America’s most important waterway, signs of the country’s worst drought in 50 years can be found at almost any point. Near Memphis, the river is about 13 ft. below its normal depth, according to the National Weather Service. In Vicksburg, Miss., it’s more than 20 ft. below. Overall, the river is about 13 ft. below normal for this time of year - that’s 55 ft. below last year’s flood levels."
http://business.time.com/2012/07/30/the-not-so-mighty-mississippi-how-the-rivers-low-water-levels-are-impacting-the-economy/

Poet

Mon, Jul 30, 2012 - 3:06pm
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Treasury raises quarterly borrowing estimate

"The U.S. government expects to borrow $276 billion in the July-September quarter, an estimate about $11 billion more than previously forecasted, the Treasury Department said Monday. Treasury assumes an end-of-September cash balance of $60 billion. In April, Treasury projected third-quarter borrowing of $265 billion. The increase is partly due to projections of more spending and less receipts than expected. The Fed's sales of short-term government securities as part of its Operation Twist plan also were a factor in the borrowing increase, Treasury said. Treasury issued $172 billion in net marketable debt in the April-June quarter and ended with a cash balance of $91 billion. For the October-December quarter, Treasury projects borrowing of $316 billion with a cash balance of $91 billion. "

Mon, Jul 30, 2012 - 6:23pm
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Struggling Calif. cities looking to tax hikes

"There's a new twist emerging as some of California's most financially troubled cities look for ways out of their predicaments: They're declaring fiscal emergencies so they can quickly get tax hike initiatives on local November ballots.

Leaders are turning most often to an increase in the local sales tax. But there also are proposals for hikes on utility taxes, parcel taxes and, in the Los Angeles-area city of El Monte, a proposal to tax sugary drinks.

Last month's bankruptcy filing by Stockton, quickly followed by one in Mammoth Lakes and then San Bernardino's sudden declaration of a fiscal emergency and plan to file for bankruptcy drew attention to an increasingly common theme — some communities battered by the economy and unable to control costs now are heading toward insolvency."

Mon, Jul 30, 2012 - 6:26pm
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Greek PM's allies seek more time for austerity cuts

"Greek Prime Minister Antonis Samaras's allies are pushing for two more years to implement unpopular austerity cuts before they sign off on them, sources close to the parties said on Monday, potentially delaying a deal on the savings demanded by lenders.

The three parties in Samaras's coalition have agreed on the bulk of the nearly 12 billion euros in cuts that Greece must produce to satisfy inspectors from the European Union and International Monetary Fund bailing out the nation.

But his two leftist partners insisted during an inconclusive meeting on Monday that Greece needed more time to implement them in the wake of a deeper than expected recession.

"There is agreement on the strategic plan. Discussions will continue, there will be another meeting in the next few days," Democratic Left leader Fotis Kouvelis told reporters after the two-hour-long talks.

Hours before the three leaders resumed talks to nail down the final 1.5 billion euros in cuts, the socialists and moderate leftists backing Samaras banded together to demand the cuts be spread out over four years instead of two, party sources said. Greece's bailout insists on the cuts in 2013 and 2014."

"Greek Prime Minister Antonis Samaras and his coalition partners missed their own deadline on July 30 to reveal the details of a $14.16 billion savings plan demanded by international lenders to keep rescue loans coming as the talks were expected to continue for several more days, leaving anxious Greeks uncertain what is coming next for them after previous waves of pay cuts, tax hikes and slashed pensions.

Democratic Left leader Fotis Kouvelis told reporters that he, Samaras, and PASOK Socialist leader Evangelos Venizelos didn’t even discuss how to close a remaining $2.5 billion hole in a previously outlined plan to make the cuts insisted upon by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is holding back a second bailout of $173 billion until the government reaches a consensus. Kouvelis said instead that the leaders talked about the social problems that the austerity measures they support have caused, worsening a five-year-recession, putting nearly 1.1 million people out of work, shrinking the economy by 7 percent and closing 1,000 businesses a week."

Tue, Jul 31, 2012 - 10:05am
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India Hit By 2nd, Even Larger Power Outage: 600 Million Affected

Roughly 1 in 12 people in the world are suddenly without power.

India Hit By Second, Even Larger Power Outage (July 31, 2012)
"India suffered its second huge, crippling power failure in two days Tuesday, depriving as much as half of the vast and populous country, or up to 600 million people, of electricity and disrupting transport networks. The first power grid collapse, on Monday, was the country's worst blackout in a decade. It affected seven states in northern India that are home to more than 350 million people. But Tuesday's failure was even larger, hitting eastern and northeastern areas as well."
http://www.cnn.com/2012/07/31/world/asia/india-blackout/index.html

Are you prepared for a power outage? Backup power if you can afford it, batteries, small solar panel to recharge batteries perhaps, flashlights, candles, cooking stove, heating or cooling alternatives?

Poet

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