Daily Digest

Daily Digest 6/29 - Debt-Laden Greece Finds No Buyers For Assets, More Debt Talks In The Works, Russia To Halt Belarus Electric

Wednesday, June 29, 2011, 10:42 AM
  • Chris Martenson on the Debt Crisis in Greece and What’s Ahead For the U.S.
  • Debt-laden Greece finds no buyers in 'fire sale' of national assets
  • Worst demand in a year for U.S. 5-year note sale
  • Report predicts chaos if U.S. prioritizes payments
  • Failure to Raise U.S. Debt Ceiling Would Idle 800,000 Workers, Group Says
  • Obama to hold more debt talks with Senate Democrats
  • French Greek Rollover Plan Depends on No Default Rating
  • California budget proposal hinges on $4-billion in revenue
  • California lawmakers to vote on budget that would close $9.6 billion deficit with cuts, fee hikes
  • State parks face deep cuts in tough economy
  • In California's Rich Farm Country, How the Poor May Get Poorer
  • Grand jury appalled at Oakland building inspectors
  • Major banks may give away discarded residences to cut losses
  • Moody's warns Spanish provinces over deficit
  • Florida's government prepares for thousands of layoffs
  • Berlusconi ally warns of government fall over austerity plan
  • Worst drought in 60 years hitting Horn of Africa-UN
  • Harrisburg School Budget Passes With More Than 200 Layoffs
  • Teen unemployment hits an all-time high in Utah
  • Bridging the gap; Lack of funding clouds future for state’s bridges
  • Senate passes $4 billion school cuts, TWIA bills
  • Russia to halt electricity deliveries to Belarus
  • Moody's Lowers Connecticut Outlook On Limited Flexibility
  • Blinder Says Budget Impasse Should Raise Wall Street Concerns
  • $38bn cuts and tax hikes spark massive Greek strike
  • The state is shutting down its tourism agency

Crash Course DVDThe Special Edition DVD, in a unique 3-disc format with presenter’s pack to guide live showings. (NTSC or PAL)

Economy

Chris Martenson on the Debt Crisis in Greece and What’s Ahead For the U.S. (adam)

Jim Puplava welcomes Chris Martenson on Financial Sense Newshour to discuss the debt crisis in Greece and its implications for the US. Chris sees a political failure in both countries in coping with skyrocketing debt. The implications for the US are dire if policies do not change soon regarding the explosion of debt at all levels in the US.

Debt-laden Greece finds no buyers in 'fire sale' of national assets

While Greece erupted in protest again, representatives of the country's government were at Claridge's hotel trying to drum up international investors' interest in a "fire sale" of its national assets.

Up for sale are 39 airports, 850 ports, railways, motorways, sewage works, a couple of energy companies, banks, defence groups, thousands of acres of land for development, casinos and Greece's national lottery. George Christodoulakis, Greece's special secretary for asset restructuring and privatisations, said the sell-off would raise €50bn (£44bn) to help pay back the country's €110bn bailout debt.

The private equity bosses gathered in the hotel's ballroom for the parade of Greece's national treasures showed little interest in buying anything.

Worst demand in a year for U.S. 5-year note sale

The U.S. government sold $35 billion worth of five-year debt on Tuesday in its weakest auction for such bonds in a year, which could raise worries the market has become too expensive after a long rally.

It was also the second auction in as many days to attract weak demand, which could put pressure on the U.S. Treasury if this proves to be a sign that investors are fretting about budget problems in the United States.

Report predicts chaos if U.S. prioritizes payments

Any attempt to prioritize federal payments if Congress fails to raise the U.S. debt limit and the country defaults would rapidly descend into chaos, according to an independent study released Tuesday.

If the U.S. government cannot borrow more money to meet its obligations past Aug. 2 -- the Treasury's deadline for raising the federal borrowing limit -- it will be unable to pay between 40 to 45 percent of the 80 million payments it makes every month, the report says.

Failure to Raise U.S. Debt Ceiling Would Idle 800,000 Workers, Group Says

The U.S. government wouldn’t be able to fund about 50 percent of its obligations and would have to furlough about 800,000 federal workers if Congress fails to approve an increase in the $14.3 trillion debt ceiling, a coalition of former budget officials says. Sometime in the first half of August, no funding would be available for the Departments of Veterans Affairs, Education and Housing and Urban Development as well as unemployment insurance and Internal Revenue Service refunds, according to a report by the Bipartisan Policy Center in Washington.

Obama to hold more debt talks with Senate Democrats

President Barack Obama will hold another round of talks with Senate Democratic leaders on Wednesday on raising the U.S. debt ceiling, the White House said on Tuesday.

The president met with Senate leaders of both parties on Monday to keep talks alive on raising the country's $14.3 trillion debt ceiling, after negotiations led by Vice President Joe Biden stalled. But neither side has hinted at compromise.

French Greek Rollover Plan Depends on No Default Rating

A proposal by French banks to roll over Greek debt depends on credit-rating firms not cutting Greece and existing or newly issued government securities to default, according to a draft of the plan.

European banks and insurers are using the French proposal as a blueprint for discussions toward an agreement to meet politicians’ calls that they contribute to Greece’s second rescue in two years. Fitch Ratings will “very likely” deem Greece in default if the European Union goes ahead with a plan to get private investors to roll over their Greek bonds as part of the Greek rescue.

California budget proposal hinges on $4-billion in revenue

The California Legislature is set to vote on a budget this afternoon, which Governor Brown says he’ll sign. The deal sidesteps Republican support and relies on $4-billion in newly projected revenue.

Bob Dutton (R-Rancho Cucamonga) said in a statement “This latest budget is based on the hope that $4 billion in new revenues will miraculously materialize but does absolutely nothing to change government as usual.”

Calif. lawmakers to vote on budget that would close $9.6 billion deficit with cuts, fee hikes (Page 2)

However, the University of California system criticized the pending $650 million in cuts to the UC system, saying it will drive up tuition. The state attorney general’s office stands to lose $71 million plus an additional $40 million in federal matching funds for California’s 55 gang task forces, said Larry Wallace, director of the state Division of Law Enforcement. He said that could mean the loss of 600 state law enforcement officers, including those who have focused on mortgage fraud, drug smuggling and criminal gangs. “This will really handcuff California law enforcement,” Wallace said

    Crash Course DVDThe Special Edition DVD, in a unique 3-disc format with presenter’s pack to guide live showings. (NTSC or PAL)

State parks face deep cuts in tough economy

Many Americans are planning to hit the road today for the upcoming long holiday weekend and a lot of folks are heading to state parks. Historically, these parks have been a cheap and accessible vacation. However, as National Correspondent Ben Tracy reported on "The Early Show," the economy and state budget cuts are changing that.

In California's Rich Farm Country, How the Poor May Get Poorer

This week, Linda Garibay's monthly welfare check will drop by $43. The unemployed mother of two will struggle to afford clothes, soap and shampoo. She'll be squeezing by on an income of $490 per month, all of which comes from welfare, and spending it all on shared rent for her sister's apartment and diapers and clothes for her kids. She's trying to find a job, but says she's had no success since a clothing store fired her last year. "Times are hard," says Garibay, 25, outside the welfare office in Visalia, California. "You apply for jobs and no one calls you back."

Grand jury appalled at Oakland building inspectors

In one case, city inspectors tagged an Oakland property with a blight order for what turned out to be children's toys in the yard. The city moved forward with the cleanup, demolished a garage legally converted to a recreation area two decades earlier, and charged the owner $18,000, the report said.

"There is a perception by property owners that the fees are simply a way for the city to generate funds for the city without regard for the residents' due process," the report said.

Major banks may give away discarded residences to cut losses

How the early discussions will shake out is unknown, but a potential outcome includes transferring some properties clogging up bank balance sheets to a land bank or some other public entity, a move that occurred earlier this year in Chicago.

In May, Bank of America announced a collaboration with the city of Chicago and a community group to give away 150 vacant and abandoned properties in and around the city. A bank spokesman said the bank agreed to pay as much as $10,000 per home for demolition, according to the Chicago Sun-Times.

Moody's warns Spanish provinces over deficit

If Spain's provincial goverments do not take steps to improve their fiscal positions, their ratings are likely to face downward pressure, Moody's Investors Service warned on Tuesday. "Several of Spain's regional governments are likely to exceed the 2011 deficit targets of 1.3% of GDP," said Moody's in a statement. It cited the local governments' "overly optimistic" revenue forecasts and difficulties in controlling spending in healthcare and education.

Florida's government prepares for thousands of layoffs

Florida's capital city is bracing for thousands of public employee layoffs due to spending cuts in the new state budget.

The city joined with other governmental and private interests in the Tallahassee area Tuesday to launch a re-employment effort. It features a website that includes job, networking and unemployment compensation information along with retraining opportunities.

Berlusconi ally warns of government fall over austerity plan (Italy)

Prime Minister Silvio Berlusconi's main coalition ally on Tuesday warned the government could collapse over an unpopular austerity plan.

The 43 billion euro ($61 billion) plan, seen by economists as vital to avoid contagion from Greece's debt crisis, is Berlusconi's biggest test since suffering two major political defeats and has raised tensions within the ruling coalition.

Worst drought in 60 years hitting Horn of Africa-UN

The worst drought in 60 years in the Horn of Africa has sparked a severe food crisis and high malnutrition rates, with parts of Kenya and Somalia experiencing pre-famine conditions, the United Nations said on Tuesday.

More than 10 million people are now affected in drought-stricken areas of Djibouti, Ethiopia, Kenya, Somalia and Uganda and the situation is deteriorating, it said. "Two consecutive poor rainy seasons have resulted in one of the driest years since 1950/51 in many pastoral zones," Elisabeth Byrs, spokeswoman of the U.N. Office for the Coordination of Humanitarian Affairs, told a media briefing.

Harrisburg School Budget Passes With More Than 200 Layoffs

The Harrisburg School Board passed a $124 million budget Monday that will close four schools and cut more than 200 workers.

The board approved laying off 153 teachers, 22 administrators and 39 support staff members. Also, sports programs will be cut for middle school students, and kindergarten will be reduced to half days.

Teen unemployment hits an all-time high in Utah

Utah teens are more likely to be unemployed if they stay in the state this summer, as experienced workers take entry-level jobs from an already abundant youth group seeking summer employment.

Utah unemployment for 16- to 19-year-olds reached 26.2 percent during the first quarter, according to the Department of Workforce Services, up from the 2009 rate of 21 percent. That compares to the national teen unemployment rate of 24.7 percent, according to the Bureau of Labor Statistics.

Bridging the gap; Lack of funding clouds future for state’s bridges (Wisconsin)

David Goldberg, the organization’s spokesman, agreed most deficient bridges don’t pose immediate risks—it’s the future he’s worried about.

The average U.S. bridge is 42 years old. There’s an unwritten rule that bridges are generally built with a 50-year lifespan, forcing many people to consider what the paved landscape will look like a decade from now, he said.

Senate passes $4 billion school cuts, TWIA bills (Texas)

The Texas Senate has passed bills to formalize a $4 billion cut to public education and restructure the association that provides private property insurance coverage on the Gulf coast.

The bills are two of the most essential items of the special session that expires Wednesday. The House was expected to vote on the bills later Tuesday to send them to Gov. Rick Perry.

Russia to halt electricity deliveries to Belarus

Russia will cut off electricity deliveries to Belarus at 00:00 a.m. on June 29 for its failure to pay a $43-million debt, said a spokesperson for the Inter RAO electricity exporter on Tuesday morning, BelaPAN said.

“The due payment for electricity had not been made before 8:30 a.m. on June 28,” the spokesperson told Russia’s news agency RIA Novosti. “In this respect… we will fully halt electricity deliveries to Belarus at 00:00 a.m. (Moscow time) on June 29. We expect our Belarusian partners to settle the debt and make the next payment in full.”

Moody's Lowers Connecticut Outlook On Limited Flexibility

Moody's Investors Service lowered its outlook on Connecticut to negative, citing the state's depleted reserves with slim prospects for near-term replenishment, as well as high fixed costs and a weak pension-funded ratio.

The ratings agency said it rates Connecticut's general-obligation bonds at Aa2, which is two notches below Aaa. Roughly $14 billion in outstanding debt is affected by the action. Moody's said the state's pension-funded ratios are among the lowest in the country and are likely to remain well below average. Meanwhile, the state has a number of high costs for debt service and post-employment benefits relative to the state's budget. In the absence of a clear plan to improve its pension woes and reduce fixed costs, as well as build up adequate reserve levels, Connecticut's rating could be downgraded, Moody's said.

Blinder Says Budget Impasse Should Raise Wall Street Concerns

The risk that lawmakers will fail to reach an agreement on the U.S. debt ceiling may be underestimated by financial-market participants, said Alan Blinder, a former Federal Reserve vice chairman.

"I find too many market people, Wall Street people, unconcerned, which tells me that if this actually happens, it's going to be like a cold slap in the face," Blinder said today in a Bloomberg Radio interview. "I don't know what probability to put on this. It's not huge. It's certainly way under 50 percent. But it's not zero."

$38bn cuts and tax hikes spark massive Greek strike

More than 5000 police were guarding Athens's city centre, with union protest rallies due to head to parliament. The strike disrupted or halted most public services. Everyone from doctors and ambulance drivers to casino workers and actors at a state-funded theatre joined the protest, which is to continue tonight (AEST).

Hundreds of flights were cancelled or rescheduled as air-traffic controllers walked off the job for four hours from 8am (3pm AEST), and were to also strike between 6pm and 10pm. Public transport workers also joined the strike, snarling traffic across the capital. About a dozen protesters cordoned off one of Athens's busiest avenues, which runs past parliament.

Unions are angry at a new E28 billion ($38bn) austerity program that would slap taxes on minimum-wage earners and other struggling Greeks, following months of cuts that have pushed unemployment above 16 per cent.

The state is shutting down its tourism agency (Washington)

Washington State is shutting down the official tourism agency that unifies its marketing message and abandoning all public support for one of its largest industries. By the end of next week, we will be the only state in the nation without any money to spend on self-promotion.

Washington’s tourism spending dropped in recent years from about $7 million annually to about $2 million annually.

Senate Republican Leader Mike Hewitt, who has for years sat on a commission that guides the state’s tourism strategy, says the full elimination of that money was an unfortunate consequence of the current budget crisis.

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."

15 Comments

saxplayer00o1's picture
saxplayer00o1
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IMF Urges U.S. Debt-Ceiling Increase to Avoid a 'Severe Shock'

"More than 5,000 Connecticut public employees would be laid off and another 1,000 positions left vacant under a deficit-closing plan unveiled by Governor Dannel Malloy on Tuesday.

The Democratic governor proposed laying off 5,466 state workers to help close a $1.6 billion budget gap. The proposal comes after state labor unions rejected a labor deal that would have averted layoffs. Malloy has recalled the legislature for Thursday.

The move came the same day that Moody's Investors Service cut Connecticut's outlook to negative from stable because the state has burned through reserves and has some of the country's most underfunded pension systems."

"General Mills Inc forecast weaker fiscal-year earnings than Wall Street expected as the food company gets hammered by higher costs for ingredients and fuel.

The maker of Cheerios cereal and Progresso soups, whose shares fell nearly 2 percent in premarket trading, said it expects costs to rise 10 percent to 11 percent in its fiscal year 2012, which began May 30. That is more than double the inflation it had forecast for the previous year."

...................2A) General Mills trims forecast on inflation fears

"A majority of Greek lawmakers have voted in favor of a 78 billion euro package of additional austerity measures and asset sales. News reports said more than 150 lawmakers in the 300-seat chamber backed the plan as voting continued. The package has been deemed a prerequisite for the release of a 12 billion euro installment of aid from the European Union and International Monetary Fund seen as necessary to avoid a default. A further vote on legislation implementing the measures is scheduled for Thursday. If ultimately approved, it would clear the way for euro-zone finance ministers to agree to release the aid tranche at a July 3 meeting."

"Canada’s inflation rate unexpectedly accelerated in May to the fastest since March 2003, with quicker price gains seen in every major category except shelter, led by gasoline.

The consumer price index rose 3.7 percent from a year earlier, Statistics Canada said today in Ottawa, a gain that exceeded all 24 forecasts in a Bloomberg survey of economists. Inflation was 3.3 percent in March and April, a 30-month high and a rate economists said would be matched today."

"There are significantly fewer foreclosure sales today than there were before foreclosure moratoria were put into place during the Robogate scandal last fall and foreclosure sales are declining.

The precipitous drop in foreclosure sales is keeping foreclosure inventories high in many markets. In fact, the number of mortgages that are 90 or more days delinquent, combined with the foreclosure inventory at the end of May outpaced foreclosure sales by 50:1.

The May Mortgage Monitor report released by Lender Processing Services, Inc. shows that mortgages that are 90 or more days delinquent combined with the foreclosure inventory totaled 4,084,557. With foreclosure sales at 78,676 at month end, the volume of serious delinquencies and foreclosures remains high.

The May data shows that the biggest drop in foreclosure sales has been seen in East Coast states, with a decline of 96 percent in DC, 80 percent in Maryland, 79 percent in New York, and 75 percent in New Jersey. Additionally, inventories of foreclosures in judicial states have increased twice as much as inventories in non-judicial states over the last year. The average time spent in foreclosure continues to extend, with more than 33 percent of borrowers in foreclosure not having made a payment in over two years."

"“Nobody believes that United States is going to walk away from its obligations. But I’m going to tell you, Sean, when I said this is the moment and this is the opportunity, it’s exactly what I mean,” Boehner said. “Dealing with this debt problem and this deficit problem is far more important than meeting some artificial date created by the treasury secretary — we cannot miss this opportunity."

  • Other news, headlines and opinion:

IMF Urges U.S. Debt-Ceiling Increase to Avoid a 'Severe Shock' to Economy

Chile May Hold Back on Bond Sale Amid European Debt Crisis, Larrain Says

Portugal Faces More Deficit Woe and Portugal 1Q Budget Deficit Higher Than Expected At 8.7% Of GDP

War costing US at least $3.7 trillion

Pennsylvania Senate threatens state control of Harrisburg and Harrisburg citizens: Failed by the government at every level (Opinion)

Zapatero Faces Calls for Early Election as Support Wanes (Spain)

European June Economic Confidence Declines to Lowest Level in Eight Months

The True History of Money in America (McAlvany audio)

Danish Banks Face International Funding Wall

Stockton's credit rating is reduced

UK faces mass strikes as civil servants feel sting

Santa Cruz Council makes 10 percent cut in social services

Pasadena cuts 150 jobs and transfers $15.4 million from PWP to balance budget

Florida to lay off 1600 state workers by Friday

Cuts To State Courts "pose grave risks to public services," Chief Justice Warns (California)

Grandparents raising kids among victims of budget ax (NY)

Debt-Burdened Italy Found Riskier Than Hungary, Ireland in BlackRock Index

Global Agriculture Supply Keeps Worsening

Marteen's picture
Marteen
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Posts: 40
Greece, kicking the can down the road

Off-course has Greece parliament agreed with the more austerity but this is a sweet offer to the rest of the euro zone. Nobody really believes that any of this sweet talk of the Greek politicians will really take place. They have only lied so far so why do we have to believe these stories.

Delay and pray. extend and pretend. In this case till autumn when Greek gov will hold up their hand again.

Marteen.

 

 

 

Wendy S. Delmater's picture
Wendy S. Delmater
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Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
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Posts: 1443
safewrite

Read the comments too.

Its hard to imagine anyone doubting a major collapse at this point but I guess they are out there.

saxplayer00o1's picture
saxplayer00o1
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Posts: 4164
S&P Would Cut US to D on Default, Moody's May Lower to Aa

(For 6/30 News)

"Standard & Poor’s would cut the U.S. credit rating to its lowest level and Moody’s Investors Service said it will probably reduce its ranking if the government fails to increase the debt limit, leading to a default.

S&P would lower its sovereign top-level AAA ranking to D, the last rung on its scale, John Chambers, chairman of the company’s sovereign rating committee, said in an interview yesterday. Moody’s said it would probably assign a position in the Aa range, or within three steps of its highest level.

“We believe the debt ceiling will be raised and the government won’t default,” Chambers said in New York. “Otherwise we wouldn’t have a AAA rating on the U.S. government. It’s evolving as we expected.”"

.....................1A) S&P Would Cut U.S. Rating to Lowest on Default, Expects Debt-Limit Rise

........................1B) Moody's warns may downgrade US muni debt ratings

"Moody's on Wednesday warned it may downgrade some Aaa-rated U.S. states and municipalities if the country loses its top-notch rating or if federal funding falls significantly as part of a plan to reduce the nation's deficit.

Most states and some municipalities rely on federal funding for operational purposes. The most susceptible to federal budget cuts would be those with greater economic volatility and that rely more heavily on capital markets to refinance their debt, Moody's senior analyst Anne Van Praagh told Reuters in an interview."

  • Other news, headlines and opinion:

US Sovereign Debt Risk Outweighs EU Debt Crisis - Bank Of China

State of Illinois $800000 in arrears to Knox County

Brazil Says Fifth Rate Increase Not Enough to Hit CPI Target

US Fed set to extend emergency liquidity facility for ECB, BOE

For Many Greeks, Here's What Austerity Will Really Look Like

Rahm Emanuel: 625 city worker layoffs if union won't accept reforms (Chicago)

Thornton reveals 519 layoffs, including 354 teachers (Milwaukee)

Universities, redevelopment agencies ponder the budget ax (California)

Florida Joins U.S. States in Budget Stress Adding Pension Costs to Workers

Marion County scales back to four-day school week (Florida)

Energy Cos Face Big Tax Hit If Congress Ends Accounting Method

Mayor Ed Lee seeks San Francisco sales tax hike as California's rate falls

Japan Pledges to Double Sales Tax by the Middle of This Decade

California tells online retailers to start collecting sales taxes from customers

Mining Boom Makes Truck Tires Pricier Than Porsches, Miami Condominiums

U.K. Schools, Courts Shut as Government Workers Protest Curbs on Pensions

Analysis: Stimulus ends, state healthcare on life support

Senate to Cancel July 4 Recess for Debt Talks

 

 

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crash_watcher
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Posts: 146
RE: A warning from Rich dad

It looks like the examiner article is based on this article and it’s embedded video, which you might get a kick out of watching.  When Robert Kyosaki starts to sound like a prettied-up Jack Spirko, you know that the prepping and survival movement is about to go main-stream.   

saxplayer00o1's picture
saxplayer00o1
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Posts: 4164
Debt ceiling talks still far apart

 

"The White House rejected an invitation to President Barack Obama from Senate Republican Leader Mitch McConnell to meet at the Capitol on Thursday to talk about deficit reduction. White House spokesman Jay Carney said the administration knows Republican positions about taxes and spending and has met repeatedly with Republicans including McConnell. Obama insists that revenues be part of a deal to cut the deficit and raise the U.S. debt ceiling. Hearing Republicans repeat their opposition is "not a conversation worth having," Carney said."

......................GOP chilly to Obama's call to deal with debt ceiling, skip the fireworks

....................Obama adviser expects new debt ceiling guidance

 

Aaron M's picture
Aaron M
Status: Diamond Member (Online)
Joined: Oct 22 2008
Posts: 2369
The Audacity...

Of Nope.

Did anyone else see the article with, of all people, Timothy Geitner evoking the 14th Amendment!?

http://money.cnn.com/2011/06/30/news/economy/debt_ceiling_constitution/index.htm?hpt=hp_t2

For some reason, that picture just seems... devious.

Cheers,

Aaron

Poet's picture
Poet
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Posts: 1891
Kiyosaki's Got Some Good Thoughts

Kiyosaki has actually been rather prescient about gold and silver prices. He was suggesting buying several years ago. I suggest checking out hsi articles on Yahoo! Finance before making a full judgment:

http://finance.yahoo.com/expert/archive/richricher/Robert-Kiyosaki/1

Example:

Investing: Go for Gold and Silver, Not Green (03/21/2006)
http://finance.yahoo.com/expert/article/richricher/2987

Poet

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rjs
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Posts: 445
Poll: 40% Of Americans
Poll: 40% Of Americans Believe Economy Is In Permanent Decline -- Another sign of economic pessimism from the latest CBS/New York Times Poll: Nearly 4 in 10 Americans say they think the economy is in permanent decline, a new polls shows as deep pessimism about the economy becomes more widespread. Thirty-nine percent of those surveyed for a New York Times/CBS News poll released late Wednesday say they see the economy headed on a downward path – significantly worse than when the question was last asked in October and 28 percent of Americans said the economy was in permanent decline. At the same time, fewer Americans see the economy as having the potential to eventually recover, with 57 percent of those surveyed saying they think things will, in time, be better. That’s down from 68 percent in October. 
 
Damnthematrix's picture
Damnthematrix
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Posts: 3998
The global economy is facing "a slow motion train wreck"

The global economy is facing "a slow motion train wreck" with Greece only the
first nation to be hit, Reserve Bank director Warwick McKibbin has told a
Melbourne conference.

Referring to the most recent global economic crisis as a mere "blip" he said the
coming crisis could undo the mining boom and bring on inflation of the kind not
seen since the 1970s.

Professor McKibbin told the Melbourne Institute conference dozens of European
countries now had gross government debts on track to exceed 60 per cent of GDP.

"Japan is forecast to be 200 per cent of GDP, the US is forecast to be over 100
per cent of GDP," he said. "At zero interest rates that can be sustained, but at
5 per cent interest rates countries have to put aside 5 per cent of their GDP
every year just to service the debt."

"That is not sustainable. Already consumers aren't spending and investors aren't
spending because of the tax increases that are in prospect."

"Greece, Portugal and Ireland don't just need to have their debts written off,
they need to have a 30 to 40 per cent depreciation of their real exchange rate,"
he told the conference.

"There are two ways to do that, either pull out of the euro and depreciate by 40
per cent, or have deflation of 40 per cent over the next 12 months."

"I do not believe any society can survive having a a 40 per cent deflation..
that's been imposed by the International Monetary Fund and the European Central
Bank."

As the US created more dollars to inflate away its debt repayment obligations
countries linked to the dollar including China, India and parts of Latin America
would suffer 1970's style inflation.

`In India inflation is 9 per cent, in China it is 6 per cent. that inflation is
pushing up resource prices for now, but it will have to be brought under control
with much higher interest rates.

Joking that he could not talk about Australian interest rates which were in any
event "always appropriate" the Reserve Bank board member warned the inflation
would spread worldwide.

Australia needed a sovereign wealth fund to store mining income while it lasted,
ideally stored in a separate account for each taxpayer so the government could
not raid it.

The $50 billion national broadband network epitomised the sort of waste
Australia could not afford.

"I would say to any politician who thinks that spending is worthwhile, take your
salary as shares in NBNCo. If you think it's a good investment, you'll be
ahead," he said.

http://www.petermartin.com.au/2011/07/that-was-blip-this-is-slow-motion-train.ht\
ml

rhare's picture
rhare
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Posts: 1326
Does this mean the fiat money issue is going main stream?

I didn't see this posted to the forums, so sorry if it's a duplicate.  The following is a tweat from Lindsay Lohan:

Lindsay Lohan wrote:

Have you guys seen food and gas prices lately? U.S. $ will soon be worthless if the Fed keeps printing money!

Source: https://twitter.com/#!/lindsaylohan/status/85502735482494976

I wonder if she's a prepper now? Surprised

Johnny Oxygen's picture
Johnny Oxygen
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Posts: 1443
rhare wrote: I didn't see
rhare wrote:

I didn't see this posted to the forums, so sorry if it's a duplicate.  The following is a tweat from Lindsay Lohan:

Lindsay Lohan wrote:

Have you guys seen food and gas prices lately? U.S. $ will soon be worthless if the Fed keeps printing money!

Source: https://twitter.com/#!/lindsaylohan/status/85502735482494976

I wonder if she's a prepper now? Surprised

Yep someone posted it yesterday but I just saw this today:

http://5minforecast.agorafinancial.com/a-solution-that-solves-nothing/

 

The fallen Disney teeny-bopper sent out this tweet on Monday to her 2,132,086 followers…

…which caught the attention of a writer at The Atlantic, who customarily panned it. Yawn.

Then we learned the National Inflation Association (NIA) “sponsored” the tweet. Excuse us, paid her to send it.

Stretch.

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darbikrash
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Posts: 573
Shocker

[quote=]

Then we learned the National Inflation Association (NIA) “sponsored” the tweet. Excuse us, paid her to send it.

 

Much like Heritage Foundation and Rush Limbaugh, it seems no one in the entertainment business does anything for free anymore:

 Link

The Heritage Foundation pays about $2 million to sponsor Limbaugh’s show and about $1.3 million to do the same with Hannity’s – and considers it money well spent.

“We approach it the way anyone approaches advertising: where is our audience that wants to buy what you sell?” Genevieve Wood, Heritage’s vice president for operations and marketing. “And their audiences obviously fit that model for us. They promote conservative ideas and that’s what we do.”

Wendy S. Delmater's picture
Wendy S. Delmater
Status: Diamond Member (Offline)
Joined: Dec 13 2009
Posts: 1988
I believe it

Mining Boom Makes Truck Tires Pricier Than Porsches, Miami Condominiums

Yes, the Michelin truck tire plant a few miles from us is expanding and hiring. I know the safety manager there and did a tour. 12-ft ot 14-ft tall tires that are eight feet wide and three feet thick - whew.

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