Daily Digest

Daily Digest 8/15 - Mass Delusion, Rising Energy Prices, Mauldin On The Gulf Oil Spill

Sunday, August 15, 2010, 9:49 AM
  • Is This Finally The Economic Collapse?
  • Mass Delusion - American Style
  • N.Y. City Cemeteries Face Gridlock
  • Scissors, Glue, Pencils? Check. Cleaning Spray?
  • Consumer Prices Rise On Higher Energy Costs
  • Mauldin: The Gulf Oil Spill Disaster

Crash Course DVDThe deluxe Crash Course DVD: a fantastic tool to align your community (NTSC or PAL)


Is this finally the economic collapse? (jdargis)

Despite the many differences between Japan and the US, there is one similarity that continues to matter most in the risk management model my colleagues and I use at Hedgeye, our research firm -- debt as a percentage of GDP. Now that the US can't cut interest rates any lower, the only option left on the table is what the Fed just announced it would start doing -- buying Treasury debt. And that could lead the country to the brink of collapse: According to economists Carmen Reinhart & Ken Rogoff, whose views we share, crossing the 90% debt/GDP threshold is the equivalent of crossing the proverbial Rubicon of economic growth. It's a point from which it's almost impossible to return.

Mass Delusion - American Style (JimQ)

“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.” – Ben Bernanke – 2005

N.Y. City Cemeteries Face Gridlock (joemanc)

And in the parts of town where a burial plot is still available, the cost has in some cases more than tripled in less than a decade; aboveground mausoleums can fetch upward of $3 million. Cemeteries are scrambling to create more space, and as plot prices have soared, the number of cremations has also risen, with a quarter of New Yorkers choosing the less expensive alternative.

    Crash Course DVDThe deluxe Crash Course DVD: a fantastic tool to align your community (NTSC or PAL)

Scissors, Glue, Pencils? Check. Cleaning Spray? (jdargis)

Schools across the country are beginning the new school year with shrinking budgets and outsize demands for basic supplies. And while many parents are wincing at picking up the bill, retailers are rushing to cash in by expanding the back-to-school category like never before.

Now some back-to-school aisles are almost becoming janitorial-supply destinations as multipacks of paper towels, cleaning spray and hand sanitizer are crammed alongside pens, notepads and backpacks.


Consumer Prices Rise On Higher Energy Costs (jdargis)

A key index of consumer prices rose in July from a year earlier amid higher energy costs, the government said Friday. Prices also increased on a monthly basis for the first time in four months.


Mauldin: The Gulf Oil Spill Disaster (JRB)

First, let’s begin with the "good" news. The ecological destruction that was first feared is not going to be as bad as once thought, for a variety of reasons. It is not good, but it is not the unmitigated disaster it could have been.

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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Re: Daily Digest 8/15 - Mass Delusion, Rising Energy ...

KABUL - Afghanistan said on Sunday it had discovered an oilfield with an estimated 1.8 billion barrels in the north of the war-ravaged country, where U.S. and other foreign forces are trying to tame a Taliban-led insurgency.

The discovery of the basin between northern Balkh and Shiberghan provinces was made after a survey conducted by Afghan and international geologists, said Jawad Omar, a spokesman for the ministry of mines.

"I do not know its price in the market. But the initial survey says there are 1.8 billion barrels of oil and I think there will be more than what it is estimated," he told Reuters.

Various estimates of Afghanistan's hidden wealth have been made in recent years, but the challenge of exploiting the resources in a country at war and with little mining infrastructure is daunting for most investors.

Omar gave no more details on how the estimates were made but said the country will offer the reserves for development along with other minerals in the coming months.

Afghanistan hopes that untapped mineral deposits valued at $3 trillion could help reduce the need to rely on Western cash for bankrolling its impoverished economy and for its soldiers to maintain security when foreign troops draw down numbers.

But ravaged by three decades of foreign interventions and civil war, the central government now faces the Taliban insurgency and relies on foreign forces for control of many parts of the vast Central Asian country.

The U.S. Department of Defense estimated earlier this year that Afghanistan's mineral resources could top $1 trillion, but experts say the fragile security situation could delay seeing the benefits of this wealth for years.

Omar said an earlier plan for the tender of a 1.6 billion barrel Afghan-Tajik oil block in early 2011 was still on track.

He said Afghanistan will retender by year-end a deposit of iron of 1.8 billion tonnes it had scrapped earlier this year due to the global recession and changes in the world markets.

The untapped mineral resources include iron ore, copper, lithium, oil gas and gems which Afghanistan hopes to put for developing in coming years despite rising insecurity in recent years, the bloodiest period since U.S.-led troops ousted the Taliban in 2001.

China's top integrated copper producer, Jiangxi Copper Co and China Metallurgical Group Corp, in 2007 became the first major investor in Afghanistan.

They are involved in the exploration of the vast multi-billion dollar Aynak Copper Mine to the south of Kabul. Omar said the actual exploration of the mine will start after three years.

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Re: Daily Digest 8/15 - Mass Delusion, Rising Energy ...

There is a good video out there by Tony Robbins called "A Note of Caution". It is very good. It is his warning about a potential fall in the stock market. I don't know how to upload it, otherwise I would, but I thought it re-affirmed a lot of the information that we already know. He is quite convincing.

Sometimes I hear Marc Faber say that the equity market will do well with inflation, but this video by Tony Robbins is convincing otherwise.

If someone can find it and upload it, I think it might be worthy of viewing.


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Re: Daily Digest 8/15 - Mass Delusion, Rising Energy ...
idoctor wrote:

KABUL - Afghanistan said on Sunday it had discovered an oilfield with an estimated 1.8 billion barrels in the north of the war-ravaged country, where U.S. and other foreign forces are trying to tame a Taliban-led insurgency.

Three weeks of global demand.......



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Re: Daily Digest 8/15 - Mass Delusion, Rising Energy ...

Have you read 'The Grand Chessboard' (1997) by Zbigniew Brzezinski?

Brzezinski discusses the energy and mineral wealth of Eurasia.

"It is imperative that no Eurasian challenger emerges capable of dominating Eurasia and thus of also challenging America. The formulation of a comprehensive and integrated Eurasian geostrategy is therefore the purpose of this book.” (p. xiv)

"How America 'manages' Eurasia is critical. A power that dominates Eurasia would control two of the world's three most advanced and economically productive regions. A mere glance at the map also suggests that control over Eurasia would almost automatically entail Africa's subordination, rendering the Western Hemisphere and Oceania geopolitically peripheral to the world's central continent. About 75 per cent of the world's people live in Eurasia, and most of the world's physical wealth is there as well, both in its enterprises and underneath its soil. Eurasia accounts for about three-fourths of the world's known energy resources." (p.31)

“Never before has a populist democracy attained international supremacy. But the pursuit of power is not a goal that commands popular passion, except in conditions of a sudden threat or challenge to the public's sense of domestic well-being. The economic self-denial (that is, defense spending) and the human sacrifice (casualties, even among professional soldiers) required in the effort are uncongenial to democratic instincts. Democracy is inimical to imperial mobilization." (p.35)

“The momentum of Asia's economic development is already generating massive pressures for the exploration and exploitation of new sources of energy and the Central Asian region and the Caspian Sea basin are known to contain reserves of natural gas and oil that dwarf those of Kuwait, the Gulf of Mexico, or the North Sea." (p.125)

"In the long run, global politics are bound to become increasingly uncongenial to the concentration of hegemonic power in the hands of a single state. Hence, America is not only the first, as well as the only, truly global superpower, but it is also likely to be the very last." (p.209)

"Moreover, as America becomes an increasingly multi-cultural society, it may find it more difficult to fashion a consensus on foreign policy issues, except in the circumstance of a truly massive and widely perceived direct external threat." (p. 211)

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Re: Daily Digest 8/15 - Mass Delusion, Rising Energy ...

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Re: Daily Digest 8/15 - Mass Delusion, Rising Energy ...

 Japan's Growth Slows Down Sharply Amid Yen Worries

Japan's economic growth slowed markedly in April-June and analysts predict further slowdown, adding to policymakers' difficulties as they grapple with deflation and a rise in the yen that threatens an export-reliant recovery.

Yen coins and banknotes
Image Source | Getty Images

Slowing growth in Japan's key export destinations such as the United States and China clouds the outlook, while policymakers step up efforts to talk down the yen after it surged to a 15-year high against the dollar this month of 84.72 per dollar.

Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa are likely to meet later this week to discuss the yen's strength and possible responses, although analysts say likely options would be limited.

"I think the Bank of Japan and the government need to take decisive action against currency moves. Solo currency intervention is possible if the yen approaches 80 to the dollar. If that is accompanied by monetary easing by the Bank of Japan, it may have a certain effect," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.

The quarterly expansion of 0.1 percent in gross domestic product (GDP) translates into an annualised growth of 0.4 percent, well below the median market forecast of 2.3 percent annualised growth and much less than the 2.4 percent annualised growth in the United States in the same quarter.

That followed a revised 4.4 percent annualised growth in the first quarter, as export growth moderated and a stimulus-driven recovery in consumption ran out of steam.

It was the third straight quarter of expansion.

"Consumption was flat, showing government payouts to households with children didn't give much of a boost to private spending," Minami said, adding that the yen's rise may begin to hurt export growth in the latter half of the current fiscal year.

Japan's economy has been spotty since emerging from its worst recession since World War Two in the second quarter of 2009 on the back of exports, particularly to Asia, and government stimulus for spending on energy-efficient cars and electronics.

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Re: Daily Digest 8/15 - Mass Delusion, Rising Energy ...

Absolutely outstanding article by Heinberg. Sorry, if already posted:



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