Daily Digest

Daily Digest 12/16 - Fractional Gold System in Central Banks?, China's Wind Power, U.S. Rare Earth Shortages

Thursday, December 16, 2010, 12:00 PM
  • Are The Central Banks Running A Fractional Gold System?
  • Merk Commentary: Fed - Inflation, Inflation, Inflation
  • Canary In The Coal Mine
  • Toppy Tuesday - Can the Dollar Fall Faster than our Indexes?
  • To Conquer Wind Power, China Writes the Rules
  • U.S. Called Vulnerable to Rare Earth Shortages
  • Energy Department Seeks 'Rare Earth' Security

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Economy

Are The Central Banks Running A Fractional Gold System? (claire)



Central banks were offered two different types of account at the BIS, earmarked and sight: earmarked accounts recorded gold held separately and specifically for a central bank, and sight accounts were non-specific. Earmarked gold is allocated, while sight gold is unallocated; earmarked is custodial and sight is co-mingled. The flexibility of the system allowed a central bank to diversify its gold reserves in a number of centres through a politically neutral institution, and it made sense to allocate some of this into a fungible account to settle transactions with other central banks. But that was pre-war, and before the US, with the co-operation of the IMF and other European central banks, demonetised gold.

Merk Commentary: Fed - Inflation, Inflation, Inflation (joe)



In August, Federal Reserve (Fed) Chairman Bernanke stated inflation was too low; in October, the Fed's Minutes lamented that the market appeared not to take Bernanke's August statements seriously enough. In our assessment, today's Fed statement of the Fed's Open Market Committee (FOMC), with an almost verbatim repetition of the previous FOMC statement, screams: "markets: trust us, we mean what we say." When former Fed Chairman Volcker raised rates in the 80's to root out inflation, initially, the markets didn't take him seriously. But persistence eventually made the market price in lower inflation expectations. Similarly, as the markets appear slow to embrace the Fed's at higher inflation target. We have little doubt, however, that the Fed will succeed in raising inflation expectations.

Canary In The Coal Mine (jim quinine)



Just these nine well known retailers alone, have added 6,435 stores since 2007. Some of the stores were international, but the vast majority were opened in the U.S. This increase in store counts in the face of reality is the ultimate in CEO hubris. Inflation adjusted retail sales since 2007 in the U.S. are down 19%. This is a recipe for disaster. Americans must deleverage over the next decade. They have no choice. Their retirement savings levels are pitiful. They will be forced to stop buying crap. The boomers are leaving their high spending years and entering the forced saving phase of their lives, whether they like it or not. Every retail CEO in the country should recognize these facts. But still, they relentlessly expand. A fool and his company are soon parted.

Toppy Tuesday - Can the Dollar Fall Faster than our Indexes? (ilene)



At least sliver hasn't been used since the Hunt Brothers crashed the market back in 1979 but that was long enough ago that we have an entirely new generation of suckers who are willing to believe that JPM has been foolish enough to be short 3.3Bn ounces worth of silver ($99Bn) to the point where if everyone in America bought an ounce (300M ounces for $10Bn) it would bankrupt them.  Aside from the fact that the math doesn't work in the first place (10% isn't going to blow out JPM), what are the odds you could get more than 2% of the people in this country to do something so stupid as to buy silver for about 100% above it's 5-year average based on some idiotic rumor.

Energy

To Conquer Wind Power, China Writes the Rules

 (woodman)

Nearly all the components that Gamesa assembles into million-dollar turbines here, for example, are made by local suppliers — companies Gamesa trained to meet onerous local content requirements. And these same suppliers undermine Gamesa by selling parts to its Chinese competitors — wind turbine makers that barely existed in 2005, when Gamesa controlled more than a third of the Chinese market. But in the five years since, the upstarts have grabbed more than 85 percent of the wind turbine market, aided by low-interest loans and cheap land from the government, as well as preferential contracts from the state-owned power companies that are the main buyers of the equipment. Gamesa’s market share now is only 3 percent.

Environment

U.S. Called Vulnerable to Rare Earth Shortages (joemanc)



At least 96 percent of the most crucial types of the so-called rare earth minerals are now produced in China, and Beijing has wielded various export controls to limit the minerals’ supply to other countries while favoring its own manufacturers that use them. “The availability of a number of these materials is at risk due to their location, vulnerability to supply disruptions and lack of suitable substitutes,” the report says, which also mentions some concerns about a few other minerals imported from elsewhere, such as cobalt from the Congo.

Energy Department Seeks 'Rare Earth' Security (will)



A senior Energy Department official on Wednesday will discuss efforts to ensure U.S. access to rare-earth elements, critical to manufacturing a range of low-carbon energy technologies including wind turbines and electric vehicles. The remarks come amid growing fears that China could restrict access to the materials. Some lawmakers and U.S. officials fear the absence of domestic rare-earth production, and heavy reliance on China, could limit the growth of clean energy. The big worry: trading reliance on foreign oil for reliance on foreign rare earths.

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."

12 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
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Posts: 4167
Re: Daily Digest 12/16 - Fractional Gold System in Central ...

"Spain raised 2.4 billion euros (3.2 billion dollars) in a bond sale Thursday but it had to pay higher rates on the debt a day after Moody's threatened to downgrade the country's credit rating.

The treasury sold 1.782 billion euros of 10-year bonds at an average yield -- the rate of return paid to the holder -- of 5.446 percent, the economy ministry said.

That was up sharply from the 4.615 percent paid when similar dated securities were last sold on November 18.

It also sold 619 million euros of 15-year bonds at 5.953 percent, compared with 4.541 percent in October when similar dated bonds were last issued."

.........................1A) Spain debt auction pushes borrowing costs to decade high

"New York state would face a $14 billion deficit for the year starting April 1 if it measured with a more accurate system, Lieutenant Governor Richard Ravitch said.

The state’s use of cash accounting, in which spending and revenue are recorded only as they occur, is “misleading,” Ravitch, 77, said today in an interview on Bloomberg Television’s “InBusiness with Margaret Brennan.”"

"New York City Comptroller John Liu said looming budget deficits in the most populous U.S. city will be bigger than Mayor Michael Bloomberg anticipates.

Although the city experienced less economic turbulence than most of the U.S. during the recession that began in December 2007, it faces budget gaps of $3.6 billion, $6 billion and $6.6 billion in the next three fiscal years, a report by the comptroller’s office said today. "

 

  • Other news, headlines and opinion:

 

Junk Spreads Tumble to Lowest Since '07 as Fed Prints Cash: Credit Markets

Bank of Japan Buys Stocks to Lift Asset Prices

Basel Capital Rules Would Have Cost Banks $797 Billion

US Muni Issuance May Top $499.5 Billion in 2011, SIFMA Says

Medicaid spending concerns Wyoming lawmakers

Ind. may cut Medicaid services to check costs

ECB Boosts Capital Base by $6.6 Billion to Protect It From Losses on Bonds

The current-account deficit in the U.S. widened to $127.2 billion in the third quarter, reflecting an increase in imports.

Fund investors head out of bond funds

Foreclosures Fall to Lowest Level Since 2008 on Robo-Signing Delays

100,000's Protests In Greece...........ITALIAN RIOTS IN ROME.........LONDON STUDENT RIOTS AGAINST THE GOVERMENT

Special Report: Is America the sick man of the globe?

vinnya's picture
vinnya
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Posts: 27
Re: Daily Digest 12/16 - Fractional Gold System in Central ...

Donald Trump interview about China and America

http://vinceseconomicblog.wordpress.com/2010/12/16/trump-china-laughing-...

 

littleone's picture
littleone
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Posts: 203
Federal Reserve Inspector General...clueless!

Surprised

 

 

idoctor's picture
idoctor
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Posts: 1731
Re: Daily Digest 12/16 - Fractional Gold System in Central ...

msnrochny's picture
msnrochny
Status: Bronze Member (Offline)
Joined: Nov 4 2010
Posts: 60
Re: Daily Digest 12/16 - Fractional Gold System in Central ...

Will the last person in America with a manufacturing job please remember to turn out the lights...

http://news.yahoo.com/s/nm/20101216/bs_nm/us_usa_economy_special

 

mono's picture
mono
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Posts: 70
Re: Daily Digest 12/16 - Fractional Gold System in Central ...
vinnya wrote:

Donald Trump interview about China and America

http://vinceseconomicblog.wordpress.com/2010/12/16/trump-china-laughing-...

 

Hello Vinnya,

I think Donald Trump got it not at all right. In fact, I think he´s got it pretty wrong. The first thing I notice is, his view of the world is rather xenophobic. To him, it´s the Opec and the Chinese that brought all the problems that the US are encountering right now.

Thats is real nonsense. It´s the FED and the unwanted consequences of the so called "monetary policy" and Wall Street with their synthetic derivate Inventions that brought the financial system worldwide to the brink of collapse.

Marketmanipulation for the benefit of a few, at the cost of all. That is what it all boils down too!

Trump´s remark where he says that the americans don´t need chinese goods, is a giveaway of how far his life is removed from ordinary people´s lifes. Off course, that´s to expect with someone like him, but what he clearly does´nt get is, cheap chinese goods are about the last thing people nowadays can afford. Take that away and it will become even more apparent how bad the american People have been conned by the FED, Wall Street and their own political Class. Without cheap chinese goods in the US right now, you`d probably have riots on the streets.

His "Buy american" approach might seem honorable but, even if all US Billionaires would buy american and full of honor and pride would propagate that idea, the claim would have to be" Buy american, if you can afford too".

 

mono's picture
mono
Status: Martenson Brigade Member (Offline)
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Posts: 70
Re: Daily Digest 12/16 - Fractional Gold System in Central ...

A member of the german Parliament, Peter Gauweiler, has officially asked about the whereabouts of the physical goldreserves of the german Governement.  He wants to know when this Gold, which is kept and stored by the US Governement,  has been last seen and counted.

 

I can´t help thinking that this could develop rather interesting.

rmurfster's picture
rmurfster
Status: Bronze Member (Offline)
Joined: Apr 17 2008
Posts: 84
Re: Daily Digest 12/16 - Fractional Gold System in Central ...
mono wrote:

A member of the german Parliament, Peter Gauweiler, has officially asked about the whereabouts of the physical goldreserves of the german Governement.  He wants to know when this Gold, which is kept and stored by the US Governement,  has been last seen and counted.

 

I can´t help thinking that this could develop rather interesting.

Germany gave us their gold for safekeeping?  How nice of them.

mono's picture
mono
Status: Martenson Brigade Member (Offline)
Joined: Nov 13 2008
Posts: 70
Re: Daily Digest 12/16 - Fractional Gold System in Central ...
rmurfster wrote:

Germany gave us their gold for safekeeping?  How nice of them.

 

Yes, sounds funny , but was´nt that unusual. Fort Knox is a damn safe place and after all we´re allies .

Germany is not the only european country that did that. The hungarian crownjuwels are also stored at Fort Knox. An hungarian soldier gave them to the american army to avoid confiscation by the soviets, at the end of the 2nd world war.

matters's picture
matters
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Posts: 22
Re: Daily Digest 12/16 - Fractional Gold System in Central ...

 

http://www.cbsnews.com/8301-501465_162-20025919-501465.html?tag=stack

December 16, 2010 3:37 PM

How to Survive a Nuclear Attack

Touching on a subject most people prefer to avoid, the Obama administration is planning to educate the public about dealing with the effects of a nuclear bomb......

The Department of Homeland Security has published a guide, "Nuclear Detonation Preparedness: Communicating in the Immediate Aftermath," which offers the following advice:

  • Find the nearest building, preferably built of brick or concrete, and go inside to avoid any radioactive material outside......

Uh huh.....  that'll help.  Great distraction from the reality in Washington... this will fix everything when poverty stricken Americans living in tents all decide to spend $14 trillion on underground bunkers and hydroponics...

 

TNdancer's picture
TNdancer
Status: Silver Member (Offline)
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Posts: 127
Re: Daily Digest 12/16 - Fractional Gold System in Central ...

How to Survive a Nuclear Attack

Rule #1:  Spend as little time as possible in, or down wind of, any major population center.

junkyard71's picture
junkyard71
Status: Member (Offline)
Joined: Sep 7 2009
Posts: 22
Re: Daily Digest 12/16 - Fractional Gold System in Central ...

i drew the line at protection against nukes.  if we're going that far it will be mad max and while i'll try to survive, cause that's what life does. 

who's most likely to nuke us?  one nuke on dc wouldn't be the worst outcome of the looming disaster, would it?

hmmm, last month china launched a missle from a sub 35 miles off california's coast.  and later a chinese sub surfaced amid a us carrier group.  surprised like 25 battleships tasked with detecting threats to the carrier.

does it make sense to nuke any other us city and spare dc?

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