Daily Digest

Daily Digest 11/18 - Hyperinflation in USA, GM Stock Sale Gears Up, Stress Tests for Banks

Thursday, November 18, 2010, 11:00 AM
  • Man Makes Ridiculously Complicated Chart to See Who Owns His Mortgage
  • How Hyperinflation Will Happen In America
  • World of Worry Wednesday - The China Syndrome
  • GM Stock Sale in High Gear
  • Bernanke Makes Case to Senators
  • Fed Announces New Stress Tests for Biggest Banks
  • The Shale Gas Shell Game
  • Interview with Chris Martenson: "Prepare for peak oil while there is time."

Crash Course DVDThe Crash Course DVD, featuring live intros and outros by Chris. (NTSC or PAL)





Economy

Man Makes Ridiculously Complicated Chart to See Who Owns His Mortgage (suzie)



We all know the mortgage securitization process is complicated. But just how complicated? This chart from Zero Hedge shows the convoluted journey a mortgage takes as it morphs into a security. Dan Edstrom, of DTC Systems, who performs securitization audits, and who is giving a seminar in California next month, spent a year putting together a diagram that traces the path of his own house's mortgage. "Just When You Thought You Knew Something About Mortgage Securitizations," says Zero Hedge, you are presented with this almost hilariously complicated chart.

How Hyperinflation Will Happen In America (johan)



The Too Big To Fail banks will play a crucial part in this game. See, the problem with the American Zombies is, they weren’t nationalized. They got the best bits of nationalization—total liquidity, suspension of accounting and regulatory rules—but they still get to act under their own volition, and in their own best interest. Hence their obscene bonuses, paid out in the teeth of their practical bankruptcy. Hence their lack of lending into the weakened economy. Hence their hoarding of bailout monies, and predatory business practices. They’ve understood that, to get that sweet bail-out money (and those yummy bonuses), they have had to play the Fed’s game and buy up Treasuries, and thereby help disguise the monetization of the fiscal debt that has been going on since the Fed began purchasing the toxic assets from their balance sheets in 2008. 

World of Worry Wednesday - The China Syndrome (ilene)



Nomura Holdings joined Goldman Sachs in advising investors to cash out of China and that sent the Hang Seng down 478 points for the day (2%) along with another 2% loss on the Shanghai.  “The likelihood of a re-introduction of price controls on food is growing,” Nomura's Sean Darby said in a report today. “The recent run-up in agriculture prices worldwide and signs of hoarding appear to have pushed the authorities to reconsider draconian measures.”  Premier Wen Jiabao confirmed on state television that the cabinet is drafting measures to counter overly rapid price gains.  “Command style economic principles generally mean much lower multiples over time on the sector and stocks,” said Darby.

GM Stock Sale in High Gear 



GM sold about 478 million shares Wednesday at $33 each, a price higher than the company and its bankers thought was possible just days ago. An additional 71.7 million shares are expected to be sold by GM's bankers as part of an "overallotment" allowed when sales are stronger than expected. And it sold $4.35 billion in preferred shares. Wednesday afternoon at the Manhattan headquarters of one of the lead bankers, Morgan Stanley, GM executives were greeted by traders and bankers standing and cheering while wearing blue GM T-shirts over their shirts and ties.

Bernanke Makes Case to Senators 



The Fed chairman denied the U.S. was manipulating the currency through its plan to purchase $600 billion of U.S. Treasury bonds and pointed to research by the Federal Reserve Bank of Boston which estimated the program could create 700,000 to one million jobs over two years. Sen. Richard Shelby, an Alabama Republican, said he "wasn't persuaded" and noted that "even some Fed officials have doubts" about the central bank program. Republican lawmakers said in a letter to Mr. Bernanke released Wednesday that the Fed's move "introduces significant uncertainty regarding the future strength of the dollar and could result…in hard-to-control, long-term inflation."

Fed Announces New Stress Tests for Biggest Banks 



Officially, the new stress tests are only mandatory for banks that plan to increase their dividend or conduct stock repurchases. But the Fed makes it pretty clear that all 19 banks should submit “comprehensive capital plans” by January 7 of next year. “SCAP BHCs are encouraged to have their capital plans filed by January 7, 2011, irrespective of whether they intend to undertake any capital distributions,” the Fed writes.





Energy

The Shale Gas Shell Game (debu)



With the election frenzy behind us, and the Fed printing money like there's no tomorrow, it seems like a good time to return to the shale gas "boom" in the Marcellus. You will recall that shale gas production, not only in Pennsylvania but elsewhere in the lower 48, Canada and all over the world, is going to provide us with far more energy over the next 250 years than we could ever figure out what to do with. In Shale Gas Shenanigans, I questioned whether development (in the Marcellus and elsewhere in the U.S.) was economic with natural gas prices well below $5/MMBtu.

Interview with Chris Martenson: "Prepare for peak oil while there is time." (debu)



ASPO peak oil conference held in Washington was an unique opportunity to meet Dr. Chris Martenson. Chris is devoted to finances, economics, energy and environment and connects together these separate fields. He says that the next 20 years will be very different from the last 20 years. Peak oil “will change everything” and there is never too soon for preparations. The key is resilience, self-dependency and versatility. He is an optimist and believes that many people will survive peak oil happily – if they prepare themselves. As all people researching peak oil and its impacts, he advises people to get out of debt.

Article suggestions for the Daily Digest can be sent to [email protected]. 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."

20 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

"Nov. 18 (Bloomberg) -- The dollar may fall below 75 yen next year as it becomes the world’s “weakest currency” due to the Federal Reserve’s monetary-easing program, according to JPMorgan & Chase Co.

The U.S. central bank, along with those in Japan and Europe, will keep interest rates at record lows in 2011 as they seek to boost economic growth, said Tohru Sasaki, head of Japanese rates and foreign-exchange research at the second-largest U.S. bank by assets. U.S. policy makers may take additional easing steps following the $600 billion bond-purchase program announced this month depending on inflation and the labor market, he said.

“The U.S. has the world’s largest current-account deficit but keeps interest rates at virtually zero,” Sasaki said at a forum in Tokyo yesterday. “The dollar can’t avoid the status as the weakest currency.”"

"(Reuters) - U.S. municipal bond prices continued to slide on Wednesday, adding to the year's worst run of losses, as a torrent of new debt deals helped sink the tax-free market.

The steep increase in yields, including rises of nearly 50 basis points in benchmark maturities from November 5 through Tuesday, has forced several issuers so far this week to cancel deals worth $2.34 billion.

Market participants have been predicting for months that a rush to issue Build America Bonds heading into the end of the year, when the taxable bond program is due to expire, would depress muni prices, particularly in the long end of the market."

"MADRID (AP) - Spain has raised euro3.65 billion (nearly $5 billion) in an auction of 10- and 30-year bonds but at higher interest rates, reflecting investor concerns over contagion from the Irish debt crisis.

Both auctions Thursday were amply oversubscribed. The Treasury had hoped to sell between euro3 billion and euro4 billion in these kinds of bonds.

The Bank of Spain said the Treasury sold euro2.59 billion in 10-year bonds at an average interest rate of 4.6 percent, up from 4.1 percent at the last such auction, in September.

The Treasury sold euro1.07 billion in 30-year bonds at an interest rate of 5.5 percent, compared to 4.8 percent at the last such auction, this time in October."

"The Texas Workforce Commission, which administers the state’s unemployment insurance program, estimated it could borrow at 3 percent, compared with the 4.5 percent it expected the government to charge, according to estimates in September as the sale was being prepared.

More than half of U.S. states have run out of money in their unemployment trust funds, financed by payroll taxes, because of soaring joblessness in the recession that began almost three years ago. They have borrowed $40.9 billion from the federal government, which has been providing the cash, without charging interest, under the economic stimulus plan enacted after President Barack Obama took office. "

"Foreclosures on prime fixed-rate mortgages in the U.S. jumped to a record in the third quarter as unemployment strained household budgets of the most credit- worthy borrowers.

The inventory of homes in foreclosure financed by prime fixed-rate loans rose to 2.45 percent from 2.36 percent in the previous three months, the Mortgage Bankers Association said in a report today. New foreclosures rose to 0.93 percent from 0.71 percent. Both numbers were the highest in the 12 years since the Washington-based trade group started tracking the categories.

Homeowners are falling behind on their mortgage payments as job cuts make it difficult for them to pay bills, according to Michael Fratantoni, the Mortgage Bankers Association’s vice president of research and economics."

  • Other news, headlines and opinion:

 

New York City Mayor Michael Bloomberg is set to order layoffs for thousands of city workers

Attempt to expedite US economic recovery by QE2 seems unrealistic: BOCHK

China shouldn't add to US treasury holdings: CIC exec

Lenihan Says Ireland May Ask for Bank Package as Bailout Nears

US Could Face Loss Of Confidence If Debt Left Untackled-Panel Chairmen

Build America Sales May Surge to $40 Billion Next Month, Loop's Mier Says

Texas taxpayer burden reaches $60.8 billion, a per-taxpayer debt of $8900 (Texas Watchdog)

Greek Deficit Target May Put Bailout Terms at Risk: Euro Credit

Medicaid, jobless claims squeeze Nevada budget

School District faces $180 million budget shortfall (Clark County, Nevada)

California Bond Woe Bodes Ill for States

Philadelphia's Bond Rating Cut to A2 by Moody's on City's Fiscal Weakness

Foreclosures Decline Significantly In October Due To Documentation Issues

Rising pension costs expected to worsen Fremont's budget deficit

UMass chancellor foresees $18 million budget cut in next fiscal year

Unemployment benefits extension introduced in House

Foreclosure class actions pile up against banks

Moody's Downgrades San Francisco Bonds On Weak Balance Sheet

Realtor: 'Foreclosures To Skyrocket in 2011' (Tulare County)

Silver May Top $30 Next Year as Investors Seek Store of Value, GFMS Says

LPS: More Than 7M Mortgages Are Delinquent or in Foreclosure

Mortgage Apps Suffer Largest Drop of the Year as Rates Jump

Waters: Loan paperwork mess is 'systemic' issue

Report sees world recovery slowing (Reuters news video)

BOB RUBIN: "US In Terribly Dangerous Territory," Bond Market May Be Headed For "Implosion"

 

markf57's picture
markf57
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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

I enjoyed the interview with Chris on the EB site. One of the more interesting questions (for me) was this one:

AA: Do you prepare for peak oil and how?

CM: Very simply, I am absolutely that convinced that there is another energy crisis coming. No question about it. Is it 5 years, is it 3 years, is it 10 years,? I do not know. Is it tomorrow? I do not know. So what I am doing is making my house as energy resilient as possible, these are very personal examples, right? So I can now heat my house in four separate ways now – wood, restorable oil furnace… he have put in a whole lot of insulation, some nice windows, we have solar hot water on the roof now. And that solar hot water system can be entirely run off our solar photovoltaic array system if we want.

What were the other 2 ways that seem to have been dropped from the answer?

The other energy story about the Shale shell was also of interest to me and brings up a fundamental question about natural gas. While I understand peak oil, I'm confused if that also applies to Natural gas. Here in Colorado, we seem to have an abundance of natural gas and I'm wondering if I should incorporate NG into my long term plans to be energy resilient? While I currently have a dual fuel furnace (electric heat pump / NG furnace), I'm wondering if I should be looking at a CNG car like the Civic GX or a bi-fuel car such as the 2004 Chevy Cavalier that runs on gas or CNG. I’m also considering a NG whole house generator.

So the bottom line question is should I invest in Natural Gas products in order to increase my reliance or will NG have the same fate as oil when things get tough? 

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Quadium
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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

Mark -

When I first stumbled on the Crash Course and became a believer, my first thought was to convert to or buy a CNG vehicle. The problem is, there are no CNG stations here in Oregon, much less local to me. And I'm in a semi-rural area, so we don't have NG to the house. If we did, there are home CNG compressors, which would allow me to refill at home. That still leaves the question of long-distance travel. Dual-fuel? Starts to get complicated and expensive. So I turned my attention to ethanol. There is a station with E85 a few miles away. So I bought a flex-fuel kit, and am now running E85. Since I can run anything from E100 (100% ethanol)  to 100% gasoline, long distance travel isn't an issue.

However, I still find CNG very attractive. I should, in the fairly near future, have the option of moving. I've been looking at northern Idaho, the first stop for the big NG pipeline from Canada. A passive-solar house, with an efficient wood-fired masonry heater, and a back-up NG stove to provide heat when I'm away. Hopefully a small ethanol distillery for vehicles and farm/garden fuel. With a reliable source of feedstock (grow my own?), this would be optimum.

Would I still pursue a CNG vehicle? What would happen if the U.S. was cut off from imported oil suddenly? There would be strict rationing, ensuring those uses necessary for survival would have access, but ordinary citizens would be left to fend for themselves. All sources of liquid fuel, gasoline, diesel, propane, ethanol, would be sopped up quickly. CNG would still be available, as producing LNG requires building plants and distribution. However, even CNG would suffer from inelastic supply (pipeline constraints), so massive conversion of vehicles to CNG wouldn't be feasible. Home heating needs would have priority. Home-grown and home-produced ethanol seems the only reliable option, unless you are in Utah, where a lot of NG is produced, and they already have dozens of CNG fueling stations scattered around the state (and it's VERY cheap).

If there is a more gradual reduction in the availability of oil, i.e. peak oil without major crises interrupting supply, a lot could be done to mitigate the impact. LNG plants. More ethanol plants, using many and varied feed stocks. Imported LNG. Gradual transition to more fuel-efficient vehicles. Some benefit from solar and other forms of alternative energy. Most likely CNG would be available for many decades to power vehicles, though I'm sure it wouldn't be much cheaper than other alternatives. (Funny how that happens!)  Not that there won't be any significant changes to our life-style. I'm quite convinced there will be, a la the Crash Course.

If I were in an area with CNG stations, and if I had more than one vehicle, I would almost certainly convert one to CNG. But that's me.

Best,

Quad

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

Quad:

Thank you for the detailed response. I appreciate it. One VERY important item I forgot to include is that if I go CNG, I would also purchase a HRA (home refuling appliance). This is a device that is connected to my existing NG line and converts the NG to CNG. So I would be able to refuel at home vs. having to go to a station. The only limiter is distance. That is the value of a bi-fuel or dual fuel vehicle. It holds both types of fuel and you switch to the one you want to use.

 

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

UK Industry task force warns UK Government to prepare for peak oil. Some of the members of the group have market caps in the billions. Well I remember when a billion was real money anyway.

http://www.bbc.co.uk/news/business-11781533

 

Cheers

Russel

 

 

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

It's all very well sorting out your fuel source....  but if oil gets THAT scarce, where will you source tires, fan belts, and radiator hoses (just for starters)?

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...
Damnthematrix wrote:

It's all very well sorting out your fuel source....  but if oil gets THAT scarce, where will you source tires, fan belts, and radiator hoses (just for starters)?

It wont be that scarce there will still be a lot of it, It will be very expensive. if you travel on a full coach then you are getting roughly 300mpg  compared to travelling in a car so the oil price can be very high before it gets too expensive to travel. Anyone relying on a car for transport is going to be well and truly in deep poo  before the city dwellers. That is why the US is uniquely  vulnerable as it is so lacking in public transport infrastructure.

 

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...
markf57 wrote:

I enjoyed the interview with Chris on the EB site. One of the more interesting questions (for me) was this one:

AA: Do you prepare for peak oil and how?

CM: Very simply, I am absolutely that convinced that there is another energy crisis coming. No question about it. Is it 5 years, is it 3 years, is it 10 years,? I do not know. Is it tomorrow? I do not know. So what I am doing is making my house as energy resilient as possible, these are very personal examples, right? So I can now heat my house in four separate ways now – wood, restorable oil furnace… he have put in a whole lot of insulation, some nice windows, we have solar hot water on the roof now. And that solar hot water system can be entirely run off our solar photovoltaic array system if we want.

What were the other 2 ways that seem to have been dropped from the answer?

A little something got lost in that translation...even I am not sure what a restorable oil furnace is!  :)

I heat my house now with:

  • Wood.  ~2.5 - 3 cords/yr which does most of the heavy lifting
  • Oil furnace.  Highly efficient Bunderus that feeds a forced hot water system
  • Passive solar.  Good windows, excellent orientation, vastly improved insulation.  Next spring we're putting in a solar room off the south side.  Sealed from the house and with vented access, it could provide up to 48,000 BTU per hour on sunny days.  That's the theory anyways.
  • Back up propane heating (only for emergencies).

 

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Doug
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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

Chris

Quote:
Passive solar.  Good windows, excellent orientation, vastly improved insulation.  Next spring we're putting in a solar room off the south side.  Sealed from the house and with vented access, it could provide up to 48,000 BTU per hour on sunny days.  That's the theory anyways.

Would you mind sharing your plans for the solar room?  I've been thinking of doing something similar, but don't have a lot of guidance to go on.

Thanks,

Doug

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

Mark -

Since I gave up on CNG, I didn't thoroughly research the subject of dual-fuel. I know it can be done, and if a person only has one vehicle, it would be the answer.

As to HRAs, I'm fully supportive. I know they are (or at least were) quite expensive, and from some sources I learned they may require expensive maintenance every so many years. But they certainly add "resiliance", so it's not entirely a matter of being cost-effective. Also, I don't see how they could apply a "gas tax" equivalent, so you would be saving money there.

However, to be truly resiliant you would need back-up power, solar or otherwise, to power the HRA should electrical power be out or unreliable. Of course NG pipelines/distribution also require electrical power, but I would think if there is a shortage, these needs would be at the top of the list.

Damnthematrix has a point, but the solution is no different than the other supplies we are squirreling away. A few cases of engine oil, oil filters, air filters, and other regular maintenence items. No one can stockpile enough supplies for a lifetime, but we can hold out for a few years.

If you proceed going dual-fuel, give us an update, please.

quad

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

Silver is definitely the investment of the century.  I started following Ted Butler at the end of 2008 and his evidence was so compelling that I bought several thousand ounces at $10 to $11 per ounce.  I had the bars shipped to me and stored them in a safety deposit box.  The cost for shipping was insignificant and storage is also a non issue.  

I was unemployed last year for almost a year so I sold some silver bars to cover my bills.  If you have never owned physical silver (or gold), you need to know about the positive psychological benefit of having some 'money' available when you need it most. Unlike cash, silver takes a little more effort to sell so I was never very tempted to sell when I was still working.  Now that I'm working again, I will hold my remaining silver until the real story behind silver reaches the sheeple.  There's isn't much silver left above ground or below ground, citizens in other countries (like China) are buying it and the U.S. dollar is headed to hell in a hand basket.  For crying out loud people, buy some physical silver and you will never regret it.  

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

These items jumped out at me.  I don’t remember seeing them before.

Interview with Chris Martenson: "Prepare for peak oil while there is time."

Chris Martenson wrote:

So on the downside… if we just went straight on a line and say increase equals decrease then we would say for every 1 % decline of oil we would see about a 4 % decline in GDP. I think that actually it would be more because of the levels of leverage and debt that exist…

<snip>

You know, if I am right and peak oil has the impact I think it will have on the economy, we are going to see the unemployment rate double or triple of what we currently have.

As I remember during the worst of 2009 the GDP was down about 3% for a while  Even with massive government intervention things looked pretty scary.  If oil production declines by 3% per year, every year after peak, that indicates an ongoing 12% annual decline in GDP.  Which Chris says could be worse due to our shaky financial position.  I think our society would probably fall apart with double or triple today’s unemployment.

Am I interpreting this correctly?  I understand that speculation about what could happen, is not a prediction of what will happen.  But I have seen Chris’s speculations become reality before.  Putting numbers on this makes it much more concrete.  I realize that post peak decline rates are unknowable today,so the numbers can differ, but the principal seems sound to me.

Can anyone identify an error in my thinking? 

Travlin

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

Travlin

As much as I would like to find an error there isn't one. This is the reality we have to look forward to. Or should I say this reality is why we are becoming more resilient.

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...
Quadium wrote:

However, to be truly resiliant you would need back-up power, solar or otherwise, to power the HRA should electrical power be out or unreliable. Of course NG pipelines/distribution also require electrical power, but I would think if there is a shortage, these needs would be at the top of the list.

We had a 5.1 kw grid-tied PV system installed in July. The only issue is when the grid goes down , the panels don't produce as to not cause "backfeed" on the grid.

I'm also considering a NG backup generator.

Quadium wrote:

If you proceed going dual-fuel, give us an update, please.

Will do!

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

There's an interesting post at Zerohedge, "Man U Player Of The Century Eric Cantona Appeals For Peaceful Revolution Against Banks, Calls For Europeans To Pull Their Money"

at http://www.zerohedge.com/article/man-u-player-century-eric-cantona-appeals-peaceful-revolution-against-banks-calls-europeans-

A few weeks ago we noted that December 7 is becoming a grass roots "banker mutiny" day, in which citizens across Europe will pull money from their banks and thus force a pan-European bank run on what is already a bankrupt financial system, which survives each day only at the expense of the continent's increasingly indebted citizens, their life of increasing austerity, and of course, the US Federal Reserve and its final backstop. In some ways we discounted the potential reach of this movement. Enter Eric Cantona - just ask any sport afficionado who the most entertaining, flamboyant and skillful football player of 1990's Manchester United was and 9 out of 10 times you will hear that name. The icon (both in England and France) whose on field antics were only matched by his kung fu skills, and who has a massive popular following, has been recorded agitating viewers (many of them), to enact a bloodless revolution against French banks: "We don't pick up weapons to kill people, to start the revolution... the revolution is really easy to do nowadays. What is the system? The system revolves around the banks. It's based on the power of the banks... so it must be destroyed starting with the banks. This means that the 3 million people with their placards on the street... they go to the bank, withdraw their money from the banks and these ones collapse. 10 million people and the banks collapse and there is not real threat, a real revolution. We must go to the bank. In this case there would be a real revolution. It's not complicated. You simply go to the bank in your country and withdraw your money. If there are enough people withdrawing their money, the system collapses. No weapon, no blood, or anything like that." A peaceful anti-banking revolution, brilliantly explained so that everyone can understand.

 It's a strange thing, I have no love lost on the banks and can certainly appreciate the sentiment On the other hand, I sure could use more time to prepare, and am not sure stressing the existing broken, held-together-by-bubblegum-and-tape system is in my/our best interest in that regard.   I love the idea of flipping the banks off, but not at the expense of my family, by contributing to triggering a major collapse. Thoughts, opinions?  

edit: oops!  I didn't see that silverarg had already started a forum topic on this at http://www.peakprosperity.com/forum/possible-bank-run-dec-7th/48157

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

"After Greece and likely Ireland, analysts say Portugal may be the next country in the 16-nation eurozone to need assistance. They suggest the crisis is now being driven less by irrational fears than by a growing realization that debts are too big for vulnerable nations to refinance, never mind pay back."

"WASHINGTON (MarketWatch) — Federal Reserve Board Chairman Ben Bernanke wants to eliminate the term “quantitative easing,” at least in terms of the Fed’s current asset-buying program.

“In my view, the use of the term quantitative easing” to refer to the Fed’s policies is inappropriate,” Bernanke said in a speech prepared for delivery to the European Central Bank on Friday.

Bernanke didn’t officially suggest a catchy substitute, sticking to calling the program “securities purchases.”

The war over words offers more evidence of the strong criticism the Fed is facing: that somehow its $600 billion bond buying program is outside the norm for a central bank. "

 

 

Economists: Nation won't really rebound until 2012

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Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...
doorwarrior wrote:

Travlin

As much as I would like to find an error there isn't one. This is the reality we have to look forward to. Or should I say this reality is why we are becoming more resilient.

Thanks Doorwarrior.

Travlin 

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Posts: 12
Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

The CNG discussion is an interesting debate.  I live in UT and have enjoyed cheap fuel.  It currently at 1.52 per gallon.   I purchased a 2001 Ford f150 factory dual fuel.  Its fine but parts are proprietary and cost prohibitive.  I converted a Toyota Land Cruiser to CNG and it ran wonderfully.  It too, was expensive to convert and that was me doing the work myself.  I then had a Honda Civic CNG dedicated fuel.  Gave me nothing but trouble.  Must have been a lemon since they have come with such high reviews.  It seems that CNG is a decent  alternative for some applications but parts are very expensive and if its a dual fuel they tend to be temperamental since they are tuned to run on both fuels.  Definitely more convenient than a dedicated CNG.  The home Fueling appliance needs help too.  My colleague purchased one and it ran for about 4 months then died.  The company that manufactured them went out of business.  So he's stuck with a broken Phil unit.  It also took 8 plus hours to fill up a 10 gallon tank.  Keep in mind that its using a generous amount of electricity all that time while filling.  The other frustration is the stuff does not store like regular gas.  Its compressed to either 3000 or 3600 p.s.i.   Enough pressure to cut a digit off or worse!  If you run out of fuel on a dedicated system you'll need to be towed as there in no way to add fuel on the road.  Its also hard to hold any large quantity of fuel since the tanks are so large.  I hold 18 gallons in 2 tanks and it takes up half of my available bed space.  I can go 220 miles between filling up.  When it runs out it automatically switches over to regular fuel which is nice.  It does lose power on CNG and gets worse mpg, but at a 1.52 per gallon  I'll happily deal with it for now. I can see from an energy output standpoint that liquid fuel is a clear winner since I can see and feel the difference between the two fuels run in my truck.  I could go on but enough for tonight.  Hope this helps some of the questions out there.

Best

Ben  

SingleSpeak's picture
SingleSpeak
Status: Gold Member (Offline)
Joined: Nov 30 2008
Posts: 496
Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

CM: We have had a statistical recovery, at least with respect to the headline GDP number. That is not surprising; you know it is maybe up 1 % for the third quarter. What surprises me is that it is only up that much given that US government deficit spending is presently over 10 % GDP. So if you take out that deficit spending we actually had a minus 10 % quarter and I was expecting it to be stronger given that amount of stimulus. So that headline number we have to decompose into two parts. The actual rate of decline in the real economy plus the amount of support from government.

Now Chris is a very intelligent guy, no surprise to most of us. But this simple deduction, even I managed to suss out, so why can't the some of the Ivy League geniuses? If I hear another person tell me how great it is that we have experienced 1% growth, without mentioning the 10% of borrowing that it took to get there, my head is going to explode.Yell

 

Quadium's picture
Quadium
Status: Bronze Member (Offline)
Joined: May 5 2010
Posts: 42
Re: Daily Digest 11/18 - Hyperinflation in USA, GM Stock ...

Ben - I thought I had read that CNG in Utah was selling in the range of 80-90 cents/gallon. Maybe that was an old price, or maybe it was a wholesale price. As to the Phil, your friend's experience is similar to what I had heard, but failure happened in months, not years. Maybe he bought it used. Utah is WAY ahead of the curve, in that it has the resources and infrastructure in place to be able to respond to a liquid fuel shortage. And ... lot's of gorgeous country there. quad

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