Daily Digest

Daily Digest 4/29 - We'll Relive The 2008 Crash Soon, 5 Gov't Statistics You Can't Trust, Gold Reserves Per Person

Friday, April 29, 2011, 9:46 AM
  • 2008 Crash Deja Vu: We’ll Relive It, And Soon
  • 5 Government Statistics You Can't Trust
  • Currency Dead End Paradoxes
  • Reality Check - How Much is that Priced in Euros?
  • How The Comex Lost 20% Of Its "Registered" Silver In One Week, Or Where There's Smoke Of A Run, There's Probably A Run
  • Gold Hits Fresh High As U.S. Dollar Falls To Three-Year Low
  • Strong Australian dollar to help build cheap LNG export terminals, says Origin Energy CEO
  • Julia Gillard Calls For Closer Defence Ties With Beijing
  • Gold Reserves Per Person
  • Bogus Threats to U.S. Reserve Currency Status: No Country Really Wants It!
  • Bank Arbitrage (JPM, C)
  • Philadelphia Schools To See 16% Layoffs
  • Chubu Electric Eyes Restarting Hamaoka Nuke Reactor Around July
  • Tokyo Disney Resort Under Pressure To Cut Down On Power Consumption

Crash Course DVDThe next twenty years will be completely unlike the last twenty.  Watch the DVD to find out why. (NTSC or PAL)

Economy

2008 Crash Deja Vu: We’ll Relive It, And Soon (DavidC)

Yes, another crash is coming, unavoidable, just like 2008. Not because our totally dysfunctional government is collapsing into anarchy, thanks to the 261,000 Super-Rich Lobbyists. Not just because our monetary system is run by the Bernanke Printing Press Company. And not just because a soulless conspiracy of Wall Street CEOs cares nothing for democracy and the public interest, only for their stockholders and their year-end bonuses.

5 Government Statistics You Can't Trust (Jeff B.)

Two surveys examine employment — the household survey and the payroll survey. While many seem to think that the larger sample size of the payroll survey makes it more accurate and reliable, from a statistical standpoint the household survey's design is more sound, and the margin of error is usually better.

That said, the unemployment numbers give a few examples of the problems of government statistics. Starting during the 1960s, the methodology was changed to exclude discouraged workers — people who are out of work and have met with so little success in finding a new job that they have quit trying. This had the instant effect of lowering the unemployment number.

Currency Dead End Paradoxes (Claire H.)

The major currencies must be examined for some key paradoxes. As the monetary system crumbles into its final phase, the foundation under which the major currencies stand, trade, and change is breaking down. Refer to the sovereign debt structure, overly burdened by runaway government debt. The focus here is on some important paradoxes that go directly against both common sense and traditional economic logic.

Reality Check - How Much is that Priced in Euros? (Ilene)

Once again the worlds investors are pumping up bubbles that will probably explode in their faces. After the popping of a real estate bubble led to the first global recession since the 1930s, world markets are frothing like shaken Champagne. Pundits claim to have spotted price increases that are unsupported by economic fundamentals in assets ranging from U.S. farmland to Israeli biotech to Australian housing to Chinese cemetery sites. Commodities have soared. Global junk-bond issuance hit a record in the first three months of the year … this is the granddaddy of them all, an almost-encompassing bubble right at the heart of monetary systems

    Crash Course DVDThe next twenty years will be completely unlike the last twenty.  Watch the DVD to find out why. (NTSC or PAL)

How The Comex Lost 20% Of Its "Registered" Silver In One Week, Or Where There's Smoke Of A Run, There's Probably A Run (pinecarr)

A week ago we noted something peculiar: in one day, COMEX depository Scotia Mocatta (one of five in the world) saw a 25% transfer of silver from "registered" (or deliverable physical) to "eligible" (or "undefined" - a distinction discussed previously, and also below). We said: "Canada's largest bullion depository (and one of five total) reclassified a whopping 5.2 million ounces of silver from Registered to Eligible status.

In order to get a sense of how big this amount is, which amounts to just under $238 million at today's fixing price, it represents just over 25% of the total silver stored at Scotia Mocatta, and about 5% of the total silver held across all depositories."

Gold Hits Fresh High As U.S. Dollar Falls To Three-Year Low (pinecarr)

Gold price rises to $1,532.91 an ounce after US Federal Reserve chairman Ben Bernanke effectively ruled out an early interest rate rise.

Strong Australian dollar to help build cheap LNG export terminals, says Origin Energy CEO (pinecarr)

More than $100 billion of investment is planned by international energy companies in Australia over the next decade to capitalise on rising demand in Asia for clean-burning fuels. That could catapult Australia ahead of Qatar as the world's largest exporter of liquefied natural gas, or LNG.

Julia Gillard Calls For Closer Defence Ties With Beijing (pinecarr)

Julia Gillard has wound up her first visit to Beijing as Prime Minister by calling for Australia and China to gradually increase their co-operation on defence as a means to promote good relations and maintain regional peace and prosperity.

Gold Reserves Per Person (pinecarr, HT Davos)

Where are Canada, the UK, and Australia?

Bogus Threats to U.S. Reserve Currency Status: No Country Really Wants It! (WendyT)

Michael Pettis at China Financial Markets has a similar list of reasons, phrased slightly differently. However, Pettis does add one key item I overlooked: "Very deep and open domestic bond markets"

From a recent email post Pettis writes ....

Bank Arbitrage (JPM, C) (WendyT)

Rather than put insolvent institutions into reorg, we have allowed the hang on slowly getting better through a massive back door bailout: Borrowing from the Fed at near 0%, and lending it right back to Treasury at 2-3%. This is more politically acceptable than just writing them checks for $100s of billions of dollars.

Philadelphia Schools To See 16% Layoffs (June C.)

At a hearing on the district's $2.7 billion budget, Chief Financial Officer Michael Masch told the School Reform Commission (SRC) that to close a $629 million gap, the district must also make painful trims in areas ranging from gifted and alternative education to transportation and counselors. Class sizes will go up; individual school budgets will go down.

A still-soft economy, flat city revenues, and sharp cuts in state aid combined with the loss of federal stimulus money have hit the district of 155,000 students hard, Masch said.

Energy

Chubu Electric Eyes Restarting Hamaoka Nuke Reactor Around July (guardia)

Chubu Electric Power Co. is planning to restart a nuclear reactor of its Hamaoka plant, now subject to regular checkups, in Shizuoka Prefecture around July to continue stable power supply this summer season, sources familiar with the matter said Thursday.

Tokyo Disney Resort Under Pressure To Cut Down On Power Consumption (guardia)

The park has solar panels and a natural gas-powered generator with a total output of about 3,000 kilowatts. The company plans to invest 3 billion yen to install three gas-powered generators, each with an output of 5,000 kilowatts, by this coming summer, thereby increasing the output of its total power generators to 18,000 kilowatts, more than 25 percent of the park's total electric power consumption.

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)
Joined: Jul 30 2009
Posts: 4065
US Fed balance sheet approaches $2.68 trillion
1) US Fed balance sheet approaches $2.68 trillion

"The central bank's holdings of U.S. government securities

grew to $1.413 trillion on Wednesday from last week's $1.402

trillion total. The Treasuries purchase was part of its $600 billion

program, dubbed QE2, with the goal to stimulate investments and

economic activity. On Wednesday, the U.S. central bank signaled

it will complete QE2 at the end of June, but will continue to

reinvest principal from its securities holdings."

"Jefferson County, Alabama, already on the brink of bankruptcy, faces another emergency after a tornado ripped through the state’s most populous county, destroying 1,000 homes and killing at least 30 people.

The county of 660,000 people, which may run out of cash in July, was devastated yesterday when a tornado with winds of more than 100 miles an hour (161 kilometers an hour) tore through the west side and then slammed into Birmingham’s northern neighborhoods."

.................2A) County Was Struggling Even Before the Storm

"Central banks that were net sellers of gold a decade ago are buying the precious metal to reduce their reliance on the dollar as a reserve currency, signaling demand that may extend a record rally in prices.

As developing countries accelerate purchases, gold may reach $2,000 an ounce this year, compared with a record of $1,538.80 yesterday in New York, said Robert McEwen, the chief executive officer of producer U.S. Gold Corp. Euro Pacific Capital’s Michael Pento, who correctly predicted gold’s highs for the past two years, forecast a 2011 high of $1,600. "

  • Other news, headlines and opinion:

 Muni Mutual Funds See $583 Million Outflow In Latest Week -Lipper ("24th straight week of outflows")

Spain prices, unemployment soar; retail sales sink

Spain to Pass Plan on Underground Employment to Help Budget

Governor: $4.2 billion deficit, mandates provide little "wiggle room'' (Pennsylvania)

Philly schools may cut nearly 1300 teachers

Sacramento budget proposes deep cuts for police, fire departments

Houston starts laying off city workers in bid to save $80M

$69 million deficit projected for Elk Grove Unified in 2013

Coffee May Rise 40% on Frost After Kraft, Smucker Raised Prices

ICN 04/18/11 American Ticking Debt Bomb, Gold As Legal Tender, Real ID Delayed (Video) 

U.S. gets C credit rating, lower than Mexico ("Weiss judgment ‘attention-grabbing,’ says president of Egan-Jones")

and  US High Debt Rating 'Unfair': Weiss

Greek Two-Year Government Notes Drop on Restructuring Concerns; Bunds Fall

rjs's picture
rjs
Status: Gold Member (Offline)
Joined: Aug 8 2009
Posts: 445
There Goes the Data

dont know if anyone has seen this from gregor:

There Goes the Data: Major Cuts at EIA Washington -- One of my greatest concerns coming out of the financial crisis of 2008 was that, eventually, free services like government data would be reduced or lost altogether. This afternoon I learned from EIA Washington that one of the cornerstones of my own work, and also the work of others globally, is about to be suspended: the gathering of International Energy Statistics. For me professionally, this is among the most important gateways to monthly data on global oil production. As I said, after 2008 I came to recognize my own professional dependency on this free data. But, I never actually expected to lose my access. Well, that’s always the way, isn’t it? Below is a portion of today’s EIA Press Release:

 While I’ve not had time to look through the entire list of cuts, I did place a phone call to EIA Washington before publishing this post. I confirmed with an EIA spokesperson, Paul, that the cuts are immediate. While I may post again on this issue, the loss of such a large array of data is going to make work difficult for professionals across the energy, energy policy, environmental policy, and industrial and financial sectors. While we will still have IEA Paris data on a monthly basis—and BP Statistical Review data that comes once a year—EIA Washington produced alot of unique data of their own. This is big news. And, it’s bad news.

M.E.'s picture
M.E.
Status: Bronze Member (Offline)
Joined: Jul 21 2009
Posts: 81
Vermiculite shortage

Just got off the phone with someone at a professional potting mix place. She said there is a world wide shortage of vermiculite and to go tithe stock market and invest in those related commodities. Kind of funny info to get from that call which was totally unrelated. She said you probably won't be able to find it in the fall or if you can, it will be prohibitively expensive. The most I will do is pick up another 21 lb bag but others may want to look into it.

es2's picture
es2
Status: Bronze Member (Offline)
Joined: Dec 31 2010
Posts: 68
Adjusted For Inflation, Dollar Hits Fiat-Era Low

Adjusted For Inflation, Dollar Hits Fiat-Era Low http://www.cnbc.com/id/42809381
A trade-weighted measure of the U.S. dollar against a broad basket of currencies that includes the Yen, Euro and China’s Yuan is at a post-gold standard low when adjusted for inflation, according to calculations by Deutsche Bank’s economic team.

CME Group Hikes Silver Margins For Second Time This Week http://www.kitco.com/reports/KitcoNews20110429DeC_silvermargin.html
Margins needed to trade Comex silver futures are being increased by the CME Group and will take effect after the close of business on Friday, the exchange said late Thursday in a press release.

Yuan Strengthens to Post-’93 High Against Dollar as China Fights Inflation http://preview.bloomberg.com/news/2011-04-29/china-s-yuan-strengthens-be...
China’s yuan strengthened beyond 6.5 per dollar for the first time since 1993, supported by speculation the central bank will allow appreciation to help tame the fastest inflation in more than two years.

r's picture
r
Status: Gold Member (Offline)
Joined: Oct 2 2008
Posts: 262
Bernanke's Do-Nothing Plan

The Fed chairman's grand scheme not to do anything about unemployment, GDP growth, and gas prices:

http://www.slate.com/id/2292453/

Quote:

Those who managed to suffer through heard Bernanke sympathize with the common problems of common people—things like rising gas prices and slow rates of job growth—but say that the Federal Reserve's hands were tied. Three years ago, when the banks were in trouble, the Fed turned activist, dashing far outside its traditional purview to stabilize the economy and shock it into growth. But now, amid sluggish growth and a weak labor market, the Fed has become a Fed of limits.

Take gas prices. The average American is paying $3.89 a gallon, up from $2.89 just a year ago. Bernanke showed sympathy, noting that "higher gas prices are absolutely creating a great deal of financial hardship." But he described the problem as decidedly not his. "There's not much the Federal Reserve can do about gas prices, per se, at least not without derailing growth entirely. … After all, the Fed can't create more oil."

es2's picture
es2
Status: Bronze Member (Offline)
Joined: Dec 31 2010
Posts: 68
Simon Black: The Most Sound

Simon Black: The Most Sound Opportunities Are Outside the Western World http://www.financialsense.com/contributors/chris-martenson/simon-black-t...
By Chris Martenson PhD

Bernanke Falls Flat By John Browne http://www.financialsense.com/contributors/john-brown/bernanke-falls-flat
Do These Charts Look Like "Recovery"? By Charles Hugh Smith http://www.financialsense.com/contributors/charles-hugh-smith/do-these-c...
Precious Metals vs. the USD By Doug Casey http://www.financialsense.com/contributors/doug-casey/precious-metals-vs...
Are You A Smart Money Investor? By Jeff Clark http://www.financialsense.com/contributors/jeff-clark/are-you-a-smart-mo...
A Precious Opportunity in Precious Metals? Have they Topped? By Deepcaster http://www.financialsense.com/contributors/deepcaster/a-precious-opportu...

Vanityfox451's picture
Vanityfox451
Status: Diamond Member (Offline)
Joined: Dec 28 2008
Posts: 1636
Simon Black et al ...

ES2,

Very good head-up list here. Thankyou for posting!

Best,

~ VF ~

es2 wrote:

Simon Black: The Most Sound Opportunities Are Outside the Western World http://www.financialsense.com/contributors/chris-martenson/simon-black-t...
By Chris Martenson PhD

Bernanke Falls Flat By John Browne http://www.financialsense.com/contributors/john-brown/bernanke-falls-flat
Do These Charts Look Like "Recovery"? By Charles Hugh Smith http://www.financialsense.com/contributors/charles-hugh-smith/do-these-c...
Precious Metals vs. the USD By Doug Casey http://www.financialsense.com/contributors/doug-casey/precious-metals-vs...
Are You A Smart Money Investor? By Jeff Clark http://www.financialsense.com/contributors/jeff-clark/are-you-a-smart-mo...
A Precious Opportunity in Precious Metals? Have they Topped? By Deepcaster http://www.financialsense.com/contributors/deepcaster/a-precious-opportu...

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2237
Adam, these are fantastic! 

Adam, these are fantastic!  Thanks for pulling them together for us.  I forget what a treat it is to hear Chris speak in person, at ease with the most complex (yet from him, simple) concepts. 

Dogs, are you into re-starting the rally to get Chris on the Daily Show with Jon Stewart?  Now that Chris has got his book done, and is starting to do interviews, he's got a real shot at it.  I have to believe someone as sharp as Jon Stewart would find the kind of discussion going on in these interviews intriguing, that the concepts being discussed would be intriguing to him given everything that's going on right now.  What do you think?

es2's picture
es2
Status: Bronze Member (Offline)
Joined: Dec 31 2010
Posts: 68
Raising Product Prices Is a Margin Call

Raising Product Prices Is a Margin Call http://online.wsj.com/article/SB1000142405274870336700457628938267908014...
(Google News http://google.com/news/search?aq=f&pz=1&cf=all&ned=us&hl=en&q=Raising+Pr... )
Household-product makers are about to put the recovery to the test.
When consumer-products giants Procter & Gamble Co., Unilever PLC and Colgate-Palmolive Co. report earnings today they are expected to discuss plans to raise prices. Battered by rising costs for raw materials such as pulp, resin and fuel, and already running lean operations, these companies have signaled in recent months that price increases are vital to protect profit margins.

es2's picture
es2
Status: Bronze Member (Offline)
Joined: Dec 31 2010
Posts: 68
Regulators grow increasingly worried about steep cropland prices

Sowing bubbles http://www.economist.com/node/18586884
Regulators grow increasingly worried about steep cropland prices

dlsife's picture
dlsife
Status: Member (Offline)
Joined: Jul 6 2008
Posts: 5
If farrell is wrong

If Farrell is wrong and the crash doesnt come before the election, will he lose credibility with any of you or will we all still go on citing him and others who turn out to be wrong just because they support what we want to believe?

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