Daily Digest

Daily Digest 4/25 - Convergence of Trouble, Phil Davis On Options and Today's Markets, Debunking Anti-Gold Propaganda

Monday, April 25, 2011, 9:59 AM
  • China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings
  • Christie v. Court: Is threat for real?
  • Convergence Of Trouble
  • Inflation vs. Hyperinflation: The Crucial Difference 
  • Phil Davis Discusses Options and Today’s Markets
  • The United States faces a crisis not seen since the Depression
  • Debunking Anti-Gold Propaganda
  • Predicting Regional And Global Peak Oil And Total Recoverable Oil

Crash Course DVDWatch the Crash Course DVD, a perceptive glimpse at our economic and energy future. (NTSC or PAL)

Economy

China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings (Claire H.)

China's foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March." "...China appears to be getting ready to cut its USD reserves by roughly the amount of dollars that was recently printed by the Fed, or $2 trilion or so." "Xia Bin, a member of the monetary policy committee of the central bank, said on Tuesday that 1 trillion U.S. dollars would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy.

Christie v. Court: Is threat for real? (June C.)

"In our system, one branch doesn't say to another: 'Sorry, you have acted in your authority, but I don't like your actions, so I don't have to follow it,' " said professor Paul Tractenberg. "Christie might not be literally standing in the schoolhouse doors and blocking them, but he's doing something very" similar.

Convergence Of Trouble (Ilene)

Assistant U.S. Treasury Secretary Mary Miller protested “We believe S&P’s negative outlook underestimates the ability of America’s leaders to come together to address the difficult fiscal challenges facing the nation.”

Inflation vs. Hyperinflation: The Crucial Difference (Alfredo E.)

America had to undergo severe economic pain as a result of the Volcker interest rate hikes. But the point is that America had the ability to endure it -- to solve the problem with the right leadership. Things had not gotten so far gone that the populace lost faith, or the government lost control.

    Crash Course DVDWatch the Crash Course DVD, a perceptive glimpse at our economic and energy future. (NTSC or PAL)

Phil Davis Discusses Options and Today’s Markets (Ilene)

...you don’t want to overemphasize POMO. Everyone says POMO, POMO, POMO. Is it POMO day or whatever? You know, it’s just the way they’re injecting money. The fact of the matter is though Japan just threw $550 billion into the market. We’re throwing $120 billion monthly to the market nonstop. Europe just doubled the size of their bail-out funds to $300 billion more than it was.

The United States faces a crisis not seen since the Depression (pinecarr)

No one I met fulminated about loss of economic sovereignty or that S&P, whose purblind approval of junk mortgage debt as triple A was one of the causes of the financial crisis, had finally over-reached itself. Bostonians seemed unconcerned. Perhaps this was because it was just one more surreal moment in the pantomime that is American economic and political life.

That was how the markets judged the news. There was a momentary tremor in the Dow Jones. Some analysts shrugged it off; others thought it profoundly serious. But soon the markets were on the rise again as if nothing had happened.

Debunking Anti-Gold Propaganda (Alfredo E.)

Over the weekend, Dian Chu proposed the "precious metals (and specifically silver) are a bubble" argument to a rather vociferous reaction from readers. Today, to keep the argument balanced, we present the counterpoint from Doug Casey: basically, there is no spoon...or bubble.

Energy

Predicting Regional And Global Peak Oil And Total Recoverable Oil (Crash_Watcher)

Part 2 and part 3 of this series presented a regional analysis of global petroleum production and consumption trends for the Middle East (ME), Former Soviet Union (FS), Africa (AF), South America (SA), Asia-Pacific (AP), Europe (EU) and North America (NA). Part 4 used this data to predict how the global petroleum export pool will likely decline to zero in about 2030-2035. Part 5 used the data to predict what petroleum consumption will look like for each of these regions as global net-export pool declines to zero.

Here in part 6, I analyze the same data to predict peak oil and total recoverable petroleum (Q∞; sometimes referred to as URR, ultimate recoverable reserves) for these seven regions, and for the world.

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
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es2
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London Source - Asian Buyers Will Take Silver Over $100

London Source - Asian Buyers Will Take Silver Over $100
The London Source continues: “Right now the silver shorts are being flushed out in Asian trading on light volume and we have options expiration ahead of us.  38,000 silver contracts are in the money and the question is how many will ask for delivery? 

Tsunami Speeds ‘Terminal Decline’ of Japan’s Fishing Industry
The wreckage of a 379-metric ton tuna boat blocks the road to the deserted fish market in Kesennuma, once Japan’s largest port for bonito and swordfish. Even after the debris from last month’s tsunami has been cleared away, the industry may never recover.

Dudley Seeing Interest on Reserves as Tool of Choice Sparks New Fed Debate
Federal Reserve officials are staking their inflation-fighting credibility on an untested tool: the power to pay interest on bank reserves.

Bill Gross Battles Bond Dealers on Outlook as Treasuries Gain
“I could join the dealers and say the 10-year’s not going to go to 4 percent, so what am I left with?” Gross said in a telephone interview April 20. “I’m left with an under-yielding, less-than-inflation security. I have better choices. As a firm we’re not going to put up with it.”

WSJ: World Is Bitten by the Gold Bug
Silver, Gold Reach Records as Dollar Falls

Silver surges 5 percent on dollar and gold at record
Spot silver surged more than 5 percent to top $49 ounce on Monday, moving closer to its 1980 all-time peak lifted by a weak dollar and strong physical demand in Asia that also sent gold to a record high for a seventh consecutive session.

China unveils new wanted, not-wanted industry list

China must watch for rising U.S. Treasury yields: researcher
(If they have already hedged U.S. debt, would this cause falling exports?)

Japan quake jolts auto output, Toyota may fall to No.3

Aussie dollar hits 29-year peak; Seoul shares shine

Russell endorses gold manipulation thesis
Commentary: Octogenarian is long-time gold bug, for inflationary reasons
The gold market is manipulated. He says it won’t work — but the ride will be rough.

CHARTS:
http://www.nowandfutures.com/metals.html

mono's picture
mono
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petrol shortage in leading industry nation....

Here´s a little taster from Germany concerning developments in energyprices.

Due to "logistical problems" there was an announcement of possible fuel shortages at petrolstations in Germany over this weekend.

At one Esso Station, the price of 1 liter petrol (unleaded higher octane super) was set to 9,99 Euro.

In the US that would amount to the price for 1 gallon of petrol beeing 54,74 US Dollars. Oops. What does that tell us?

They had to bring in the police because customers refused to pay. Why do I believe this was no funny accident?

 

http://www.handelsblatt.com/auto/nachrichten/einen-liter-benzin-fuer-9-9...

 

The "Handelsblatt", where this was reported is a credibly buisiness paper here in germany.

 

Happy Easter

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idoctor
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rjs's picture
rjs
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China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdi

"Xia Bin, a member of the monetary policy committee of the central bank, said on Tuesday that 1 trillion U.S. dollars would be sufficient."

not a big change...

China, Mainland      1.154.1 trillion  feb 2011

i've been seeing these stories since 2008...china is going to continue to be stuck with dollars as long as they want to to hold the yuan down & keep selling us trinkets through walmart...and with the yen radioactive & the euro unraveling, there isnt really anywhere else for them to go...

 

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EPA Drives Another Nail In America's Coffin

http://www.foxnews.com/us/2011/04/25/energy-america-oil-drilling-denial/

"Shell Oil Company has announced it must scrap efforts to drill for oil this summer in the Arctic Ocean off the northern coast of Alaska. The decision comes following a ruling by the EPA’s Environmental Appeals Board to withhold critical air permits.

Shell has spent five years and nearly $4 billion dollars on plans to explore for oil in the Beaufort and Chukchi Seas. The leases alone cost $2.2 billion. Shell Vice President Pete Slaiby says obtaining similar air permits for a drilling operation in the Gulf of Mexico would take about 45 days. He’s especially frustrated over the appeal board’s suggestion that the Arctic drill would somehow be hazardous for the people who live in the area. “We think the issues were really not major,” Slaiby said, “and clearly not impactful for the communities we work in.”

The closest village to where Shell proposed to drill is Kaktovik, Alaska. It is one of the most remote places in the United States. According to the latest census, the population is 245 and nearly all of the residents are Alaska natives. The village, which is 1 square mile, sits right along the shores of the Beaufort Sea, 70 miles away from the proposed off-shore drill site.

The EPA’s appeals board ruled that Shell had not taken into consideration emissions from an ice-breaking vessel when calculating overall greenhouse gas emissions from the project. Environmental groups were thrilled by the ruling.

At stake is an estimated 27 billion barrels of oil. The Environmental Appeals Board has four members: Edward Reich, Charles Sheehan, Kathie Stein and Anna Wolgast. All are registered Democrats and Kathie Stein was an activist attorney for the Environmental Defense Fund."

Johnny Oxygen's picture
Johnny Oxygen
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Re: Peter Schiff

I would love to know how much gold and silver that CNBC crew owns that they don't publically clain. They sit and smirk at Peter but you just know at this point they are thinking "Man I need to get me some PM's"

Poet's picture
Poet
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Posts: 1891
Whoa, Nelly!
jelrod3 wrote:

At stake is an estimated 27 billion barrels of oil.

Hey now, let's not get those panties in a bunch here. That 27 billion estimate includes ALL the stuff in the deep ocean - not just one drill point. This one plan being blocked (apparently because they forgot to emissions from one ice breaker into the report.) doesn't mean that America is dooooooomed (oh no!) This is an exploration drill that wouldn't come into fruition for sometime anyway. They can still submit plans for drilling next year or the year after.

But if you think Gulf of Mexico ocean drilling is tough, try it under frigid conditions in the Arctic with the kinds of arctic storms and icebergs that Alaska is known for. There are people up there who well remember the Exxon-Mobil and (still ongoing) BP disasters, and know there are no supply areas to properly service a rig (the Shell rig would be sreviced by a small fleet of supply ships instead) let alone any spill recovery effort. (Is it true that the average life expectancy of Exxon-Valdez spill clean-up crew is 51 years. Gulf Oil spill clean-up crew are reporting major illnesses, too.) So maybe some caution is warranted. Certainly this isn't the death-knell of America. Our fate is already written by our politicians and crony corporate interests and the bankers and the Fed - all done over the last 40+ years.

So what if they start drilling after Obama leaves office and a new EPA administrator is politically appointed? That'll just make the Republicans look even better, right? (So long as there's no new oil spill...)

As an aside: I wonder oil leases and royalties need to cost more so we can lessen the burden on hard-working middle-class taxpayers. Imagine if the U.S. had a system like Alaska state residents enjoy...

Poet

 

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idoctor
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(No subject)

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Poet
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Jeremy Grantham Has Watched Crash Course!! (Or Albert Bartlett)

Wow, looks like Jeremy Grantham, one of the emeritus analysts/traders/observers of Wall Street, has finally watched the Crash Course! :-P

Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever
"The world is using up its natural resources at an alarming rate, and this has caused a permanent shift in their value. We all need to adjust our behavior to this new environment. It would help if we did it quickly."
http://www.zerohedge.com/sites/default/files/GMO%20April.pdf

Poet

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Jeremy Grantham Newsletter

Spot on support for all of Chris' Work from one of the most respected names on Wall Street over the last 40+ years...Totally from a market perspective, and IMHO a "Must Read". Link Below

http://www.gmo.com/websitecontent/JGLetterALL_1Q11.pdf

 

admin's picture
admin
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Poet wrote: Wow, looks like
Poet wrote:

Wow, looks like Jeremy Grantham, one of the emeritus analysts/traders/observers of Wall Street, has finally watched the Crash Course! :-P

 

Jeremy Grantham recommended the Crash Course in his Q2 newsletter in 2009.

http://www.peakprosperity.com/blog/daily-digest-july-29/22992

http://www.peakprosperity.com/forum/jeremy-grantham/23186

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