Daily Digest

Daily Digest 3/1 - J.P. Morgan Opens Gold Window, Green Growth Or No Growth, Food Prices And Revolutions

Tuesday, March 1, 2011, 10:54 AM
  • China Forced To Deny It Will Experience HYPERinflation In 2011, As Russia Unexpectedly Hikes Interest Rates
  • J.P. Morgan Opens Gold Window
  • Green Growth or No Growth
  • Disasters Rocking U.S. Dollar?
  • Protesters in Yemen Return to Streets
  • No Oil for Freedom? 
  • Will Increasing Food Prices Lead To More Revolution?
  • After the Spill, a 10-Year Health Study

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China Forced To Deny It Will Experience HYPERinflation In 2011, As Russia Unexpectedly Hikes Interest Rates (pinecarr)

So putting aside what official denial means about the validity of a story, not to mention this utterly bizzare and completely out of left field statement, China's best and only reason why it won't have hyperinflation is that it has "abundant stocks of grains and agricultural products."... We can, at best, hope that this has to be some early version of an April Fool's joke, or else things are truly far worse than anyone expected.

J.P. Morgan Opens Gold Window (pinecarr)

Earlier this month, J.P. Morgan made an important announcement that received scant coverage in the media: the bank would now accept gold as collateral for loans. The move appears to have been well-timed, for in the ensuing weeks, the price of gold and silver climbed steeply, based largely on political turmoil in the Middle East. But why should Morgan's decision be of interest to anyone outside the bank?

Green Growth or No Growth (AJC)

We face serious environmental problems. People are looking for answers in a green economic future. But what would it look like? IDEAS host Paul Kennedy moderates a debate at the University of Ottawa on the resolution: Be it resolved that building an environmentally sustainable society will require an end to economic growth. Participants include Peter Victor, author of Managing Without Growth: Slower By Design, Not Disaster, Tim Jackson, author of Prosperity Without Growth: Economics for a Finite Planet; Richard Lipsey, one of Canada's pre-eminent economists, and Paul Ekins, author of Economic Growth and Environmental Sustainability: The Prospects for Green Growth.

Disasters Rocking U.S. Dollar? (Joe P.)

To understand the dynamics unfolding we have to dig a little deeper into the “it’s all contained” argument. People don’t like autocratic rule but we have argued that people may put up with oppression as long as they can feed themselves. Escalating food prices may be a key reason revolts and revolutions are happening now.

Protesters in Yemen Return to Streets (jdargis)

Mr. Zindani’s appearance coincided with an unusual display of anti-American sentiment by Mr. Saleh, who accused Washington and Israel of fomenting unrest to destabilize the Arab world — an accusation that seemed more remarkable because the United States has been Mr. Saleh’s most powerful Western backer during his three decades in power.


No Oil for Freedom? (jdargis)

The question may offend, but the answer is obvious: A sudden popular uprising in Saudi Arabia to overthrow the Saudi monarchy would almost certainly bring about a worldwide recession. As the Council on Foreign Relation's Rachel Bronson noted in the Feb. 27 Washington Post, "Washington does not want the Saudi monarchy to fall."


Will Increasing Food Prices Lead To More Revolution? (jdargis)

Robert Zoellick, president of the World Bank, added that food prices have risen 30 percent in the past year, close to the high prices reached in 2008. In 2008, food prices ignited riots across the third world, from Argentina to Bangladesh. In many ways, the current crisis has the opportunity to be worse than 2008.

After the Spill, a 10-Year Health Study (jdargis)

The first 1,000 invitations to take part in the study were sent out on Monday, said Dale Sandler, chief of the epidemiology branch of the institute. The goal, she said, is to eventually extend invitations to around 100,000 people who were involved in the cleanup, most of whom live in Louisiana, Mississippi, Alabama or Florida.

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."


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Green Growth!

Couldn't have said it better-

My husband and I decided we would start growing our own in 2007 with a goal of “growing what we needed” and in 2008 we expanded that plan because we learned of the peak oil “bump”.

We wanted to meet and join forces with others in our endevour but we find few people who think as advanced as we do so we keep expanding our goals to fill our own needs and hope in the coming future-we can share the knowledge, skills and seeds we develop here. We podcast about our northern farm which has a different flavor of farming than a southern farm. The listener base has grown from 30 a day to over 600 in the past few months which says the demand for information is out there.

But be aware- there are people who think they can have what they want by taking it with guns but that wouldn’t make sense cause if you shot someone who is growing food – where will you continue to get it? And I have to remind myself – hungry people aren’t the enemy – they just need to learn to feed themselves.

I recently listened to a guy named Woody T who parroted the thing we are all hearing – Buy Gold, Buy Gold for security. And, I emailed him to let him know – if he came here with gold looking for the last of my food – why would I not just let him starve and take the gold if I wanted it after he’s dead? The only solution right now is to learn to grow your own food – even if only small amounts.

Here’s some tips I have for others who are looking for land (which I think there will be plenty of when farmers who did not plan for the transition of fuel and leave fields barren).

When looking for land:

  • Find land with a waterway – creek, river or other kind of water flow. You will need this for:
    • Hydro-power (no matter how small – small amounts of power is better than NO POWER at all – and that happens when the sun doesn’t shine and wind doesn’t blow here in MN).
    • You can also use waterways for raising fish.
    • You may need water for crops.
    • It has the possibility of a water-wheel for work.
  • Fertile soil! Most mono-cropped land is dead of micro-organisms and can take 5 – 50 years to revive.
  • Start stocking your animals as soon as possible because they are key to fertilizing your soil.
  • Look for either good space for a wood lot or land that already has it growing. Up north, a well managed woodlot can be the backbone of a good northern farm. Learn about the most effiecent wood burning technologies because at one point in the Mini-Ice Age history of Europe - whole forrests dissapeared and planning needs to be done and so sustainable fuel becomes a managed commodity.
  • If you can not grow your own food now – start collecting seeds of things you like to eat. Those seeds may be hard to come by in the future. Or, offer to work at a local grower in exchange for food and to learn skills. The final option - start buying your food locally now since few farmers will take on new customers if things get risky.
  • If you do grow food now – save seeds because others will need them in the future! This is like a bank!

People should remember the stories from the Great Depression- Here’s one people should not forget:

A woman found herself stuck when her husband died and she was left with a mortgage and 5 children to feed. Faced with feeding her children – she started a garden by saving the seeds of the food she fed her family (mostly tomatoes). She got manure from a generous farmer and started growing food. Her kids spent summers working the garden and not only eating but selling the food.

As hyperinflation set the price of food from $.01 per tomato to $2.50 – she was able to grow enough food to sell to pay off her mortgage. Thus, the name of the tomato- Mortgage Lifter Tomato became a Great Depression phenomenon.


We have a lot of more tips for small scale farming on our website but believe everyone should be joining local gardening clubs and learning more about how to be ready for the big “whatever”.  Our website and be ready to share your abundance! MyBackAchers.com

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Making ends meet

The things people will do when faced with hardship are inspirational.

          I know of a woman who, after tragically losing her husband and not being able to make ends meet built a cabin in her garden for her children to live in, then rented out her rooms in the house to students.  Of course that was in a good economy, when things get bad food will be the most important thing of all.

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With gold attacking all-time highs and silver making new multi-decade highs, today King World News interviewed Rick Rule of Global Resource Investments, now part of the $8 billion Sprott Asset Management.  Rick has been calling these markets with remarkable precision as of late and his latest comments continue to surprise me only because these statements are coming from one of the most street smart level-headed individuals in the business.

When asked about gold Rule remarked, “In terms of gold it is no longer a contrarian buy, it’s no longer a lonely trade.  But in the first instance we need to remember that all of world demand is denominated in US dollars and if the denominator is declining, the numerator only needs to hold even to rise in price. 

So the baseline move in the gold price is accounted for by the deterioration in the US dollar.  On top of that we have continued currency crises in Europe, widespread and serious political instability in the Middle-East and North Africa and surprisingly strong physical demand from India and China. 

This environment is creating what we spoke about last time which is fear demand.  This could be the prelude to an upside blowout.”

When asked about silver specifically Rule stated, “The situation in silver seems to be a shortage in the March delivery.  There is more silver called for delivery than there is silver to deliver.  This has created backwardation in silver and this is an extremely unusual situation in this market.  This occurs when there is scarcity of silver.  Anecdotally, my sources tell me that demand for physical silver is outstripping demand for gold on dollar for dollar basis in European and North American markets.

Certainly what is of interest to me is the limited availability of new mine supply including byproduct supply in view of increasing demand.  Meaning in addition to the near-term you could see explosive action in silver in the future.  You could also see a sustained two or three year bull market in silver simply because supply isn’t sufficient to meet intermediate-term demand.

I don’t know how you solve a structural failure to deliver.  I don’t know if regulators or exchange officials would allow a force majeure until markets could stabilize.  What I do know is that set of circumstances would further destabilize the silver market and markedly increase speculative interest.”

I think Rick Rule’s comments are supported by the upside action we have been seeing in both gold and silver.  Rick is also correct that we could see even more speculative interest enter the silver market.  Because Silver is such an extraordinarily tiny market, that would create explosive conditions.

Things is gettin interesting.


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Ponzi schemes Peter Schiff

Ponzi schemes Peter Schiff

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Heads-Up on "Inside Job" Documentary

For those who might be interested in this...

I just watched this documentary on the financial industry and I highly recommend it. It's easily the best crafted and most comprehensive work on the subject I have ever seen.

3 thumbs up! (I had to "borrow" a thumb from a Wall Street bankster for this rating) Laughing

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"The US Has a Deeply Counterfeit Economy"

A new article from Charles Hugh Smith that takes off from Bernie Madoff's comments about our Gov't being a giant ponzi scheme, The Counterfeit Economy, @ http://www.oftwominds.com/blogmar11/counterfeit2-11.html 

Charles Hugh Smith wrote:

As Bernie Madoff recently observed--and we can suppose he is an expert in manufacturing facsimiles, fraud, embezzlement and counterfeiting authenticity out of lies--the U.S. is a giant Ponzi scheme.

The financial "reforms" are counterfeit reforms.

The "balancing the budget cuts" are counterfeit.

The projections of future growth are counterfeit.

The unemployment numbers are counterfeit.

The inflations statistics are counterfeit.

And of course, the "news" which drives the stock market ever higher is also counterfeit.


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RE: possible silver shortage

It doesn't matter what any regulator, bank or anybody does if any significant deliveries are not made or drastically stalled.  The heat this would cause would trigger a black market craze that would ultimately feed back into the paper markets only to exasperate the situation further which would potentially let loose a high-engery upward spiral into the summer.  Those are my thoughts.  Silver is kind of risky.  I'm currently only holding AU/UNC Morgan dollars.  You either have a $30 collector coin  if silver gets a flat tire, or you eventually dump for bullion profits if it goes up.  Nearly zero downside risk.

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Crude Import Cost May Rise 29% for U.S., EU, Japan, IEA Says
By Lananh Nguyen - Mar 2, 2011 1:55 AM GMT+1000

The cost of oil imports for the U.S., European Union and Japan may rise about 29 percent to $900 billion this year if crude prices average $100 a barrel, according to estimates from the International Energy Agency.

This would be almost $200 billion more than the U.S., Europe and Japan might have to spend on crude imports this year, “potentially threatening their economic recoveries,” Fatih Birol, the Paris-based agency’s chief economist, said today in an e-mail.

The U.S. may pay $385 billion for oil imports this year if crude averages $100 a barrel, compared with $305 billion in 2010, the IEA estimated. Fuel shipments to the EU are projected to cost $375 billion, versus $299 billion last year, it said.

The agency previously estimated oil import costs for its 28 member countries at $790 billion at the end of 2010, according to a Jan. 5 statement on the IEA’s website.

The increase in import costs, “triggered by high oil prices, is equal to a loss of income of 0.5 percent of the OECD countries’ combined gross domestic product,” the agency said.

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The latest from Mish- "Peak Everything"

I usually read Mish every day but his latest entry I thought was a particularly good and concise summary of where we appear to be....


Well worth a read...


PS. I loved EndGamePlayer's comments above.... I've got a long to do-list of preps but I need to keep remembering that being able to grow food should always be at the top of the list. How do you grow a green thumb again?

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Rossi's demonstration.(Or how the whole world is wrong.)


Here is Rossi's patent.

Apparently the Swedish Academia is not as dismissive as some.


Perhaps Professor Emeritus at Uppsala University, Sven Kollander is humbled by what he does not know.

Nothing breeds certainty like ignorance.

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NZsailor, the Mish post on

NZsailor, the Mish post on Jeff Rubin's article linking oil and food price effects seems important to understand the bigger picture,

also there's some scary charts in MIsh's next post:




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