Daily Digest

Daily Digest - March 4

Thursday, March 4, 2010, 10:49 AM
  • New Ghost Towns: Industrial Communities Teeter On The Edge
  • Peter Schiff: Don't Bet On A Recovery
  • Mish: I'm Sure Glad The Recession Ended
  • Sweden Unexpectedly Slides Back Into Recession In Q4
  • U.S. Dollar Money Supply Is Underreported
  • Ron Paul: Bizarre Spending Habits
  • Pictures of a Market Crash: Beware the Ides of March, And What Follows After
  • The Media-Lobbying Complex
  • 8 Reasons Wall Street Loses Another 20% in This Decade
  • German TV Channel Finds 500 Gram Tungsten Bar At Gold Foundry With Bank Origin 
  • Economists: Another Financial Crisis on the Way
  • U.S. Dollar Money Supply Is Underreported
  • Soros signals gold bubble as Goldman predicts record
  • Consumerism "Doomed", Investment Forum Told
  • Governor Christie: "Time to Hold Hands and Jump Off the Cliff"
  • Jim Sinclair: The Skinny On Greece And What It Means To Gold
  • We're All PIGS Now
  • Icelanders Brace For Impact Of Expected 'No' Vote
  • Rat Out a Tax Cheat, Collect a Reward
  • David Morgan: Silver In The Next Decade
  • Barney Frank Demands Bernanke Probe Fed Involvement In Watergate Scandal And Iraq Arms Sales Following Ron Paul Questioning
  • Miner Digs for Ore in the Outback With Remote-Controlled Robots
  • Saudi Crude Output Still Down From 2008
  • Food Security Tests Africa's Unity Agenda

Economy

New Ghost Towns: Industrial Communities Teeter On The Edge (mhoop, Christian W.)

Ravenswood, with 4,000 people and one big factory, is like many towns in the USA where things still are made: caught in a winter between recession and recovery, hoping the latter will arrive before the former kills the last decent blue-collar job.

If the rest of the aluminum works closed, "would this become a ghost town?" muses Jim Frazier, principal of the Henry J. Kaiser Elementary School.

Peter Schiff: Don't Bet On A Recovery (mhoop)

It is astounding how many economists, government officials, and Wall Street strategists construe the current economic conditions as evidence of a bona fide recovery. It is a testament to the power of the rose colored glasses handed out by our nation's leading universities that such a feeling could be widely held despite the clear and present danger that compounds daily. The myopia leads us to enact policies that actually exacerbate our problems. The "remedies" are postponing, perhaps indefinitely, a true recovery.

Mish: I'm Sure Glad The Recession Ended (mhoop)

If you believe retail sales are going up because of government reports on Advance Sales, then please think again.

Sweden Unexpectedly Slides Back Into Recession In Q4 (mhoop)

The third-quarter GDP figure was revised to show a 0.1 per cent quarterly decline from an original 0.2 per cent gain, the statistics office said. This meant the economy fell back into recession, based on a widely held definition of the term.

U.S. Dollar Money Supply Is Underreported (pinecarr)

From December 2002 until the collapse of Lehman Brothers in September 2008, the quantity of deposit currency created by the Fed averaged $11.8 billion, an amount that is relatively insignificant compared to total M1. Presently, it stands at a record high of $1,246.2 billion, which of course is highly significant. 

Ron Paul: Bizarre Spending Habits (pinecarr)

Rather than expanding the Federal budget in the face of economic downturn, we should be focusing on eliminating waste and being the very best stewards of public funds that we can possibly be…Instead, the State Department is building a $1 billion embassy in London, the most expensive ever built. The plans even include surrounding it with a moat!

Pictures of a Market Crash: Beware the Ides of March, And What Follows After (pinecarr)

There are a fair number of private and public forecasters with whom I speak that anticipate a significant market decline in March.

The Media-Lobbying Complex (pinecarr)

In a single hour, two men with blatant, undisclosed conflicts of interest had appeared on MSNBC. The question is, was this an isolated oversight or business as usual? Evidence points to the latter.

8 Reasons Wall Street Loses Another 20% in This Decade (SolidSwede)

So why bet on the house? Why bet with the Wall Street casino for another decade? Why? You're betting in a rigged casino. Worse, they keep adding powerful new tools, scams and algorithms to their "financial weapons of mass destruction" arsenal, as Warren Buffett calls this mysterious $670 trillion global shadow banking world of derivatives. You cannot win.

German TV Channel Finds 500 Gram Tungsten Bar At Gold Foundry With Bank Origin (Video) (mhoop)

German TV station ProSieben finds what appears to be some evocative proof of gold counterfeiting, in the form of tungsten gold substitutes coming to the W.C.Heraeus foundry, which is the world's largest privately-owned precious metals refiner and fabricator, located in Hanau, Germany. The foundry has isolated at least one 500-gram tungsten bar due for melting, originating from a (so far) unnamed bank, which as the head of the foundry stated made the unpleasant discovery that "not all the glitters is gold."

Economists: Another Financial Crisis on the Way (mhoop)

In the report, the panel, which includes Rob Johnson of the United Nations Commission of Experts on Finance and bailout watchdog Elizabeth Warren, warns that financial regulatory reform measures proposed by the Obama administration and Congress must be beefed up to prevent banks from continuing to engage in high-risk investing that precipitated the near-collapse of the U.S. economy in 2008.

U.S. Dollar Money Supply Is Underreported (Claire H.)

Regardless how the Federal Reserve pays for the paper it purchases – cash currency or deposit currency – it is creating dollar currency and perforce expanding the money supply. But the traditional definition of M1 does not accurately capture this process when the Fed uses deposit currency to pay for its purchase. In fact, it is totally excluded. Because the Federal Reserve did not create deposit currency in the past, none of the Ms take it into account.

Soros signals gold bubble as Goldman predicts record (Christian W.)

In a Jan. 28 Bloomberg Television interview, the 79-year- old billionaire recalled that former Federal Reserve Chairman Alan Greenspan warned of “irrational exuberance” in financial markets three years before the technology bubble burst in 2000. The Standard & Poor’s 500 Index rose 89 percent in the period. Buying at the start of a bubble is “rational,” Soros said.

Consumerism "Doomed", Investment Forum Told (Christian W.)

Jack Lifton, an expert in rare earth metals, said that many of the green ambitions of governments around the world — particularly ones involving wind farms and other high-tech responses to climate change — would be thwarted by upstream supply issues.

Particularly troubling, he said, is an impending inflection point that may arrive within the next couple of years when China becomes a net importer of rare earth ores.

Governor Christie: "Time to Hold Hands and Jump Off the Cliff" (nncita)

In an amazingly candid appraisal of the sorry state of affairs in New Jersey, Governor Chris Christie laid it on the line in a speech to about 200 mayors at the New Jersey League of Municipalities.

Jim Sinclair: The Skinny On Greece And What It Means To Gold (Tom A.)

If Greece is bailed out it will take longer for the establishment of the single virtual reserve currency. If Greece is flushed it will happen so fast you will lose your breathe. Either way I see gold as the only reliable fundamentally correct safe harbor. Gold will play a part at a very high price with the single virtual reserve currency in order to keep gold from being a competitor with it.

We're All PIGS Now (Ben Johnson)

The fact of the matter is, wherever you go in the OECD, we’re all PIGS now. That’s because we mistook an energy shock for a financial crisis and bailed out everyone under the sun. But we are soon going to find out that today’s bailouts are tomorrow’s spending cuts. The enormity of the government cutbacks that lie ahead is yet to be appreciated.

Icelanders Brace For Impact Of Expected 'No' Vote (Nickbert)

According to the latest poll, nearly three quarters of Icelanders are expected to vote down the deal, despite widespread expectations that a "no" vote could impede the Nordic country's recovery from its deep economic crisis, block its entry into the European Union and cause political turmoil.

Rat Out a Tax Cheat, Collect a Reward (Nickbert)

To weed out the bogus reports from bitter ex–husbands and disgruntled employees, the IRS requires informants to fill out a detailed form and provide intimate information about the tax evader, including the person's social security number, address and date of birth. "That's a lot of information that I'm not sure the average person has available," said Gagnon. "They're kind of asking the person to be a detective or work for them and go hunt all this information down, and I don't know how comfortable people would feel trying to do that."

David Morgan: Silver In The Next Decade (tomadkins)

Barney Frank Demands Bernanke Probe Fed Involvement In Watergate Scandal And Iraq Arms Sales Following Ron Paul Questioning (Ben Johnson)

Well, Paul may not be as kooky as people are trying to make him out to be. None other than "consumer protection advocate" Barney Frank has demanded that Bernanke do a full probe based on these allegations.

Energy

Miner Digs for Ore in the Outback With Remote-Controlled Robots (Nickbert)

The innovation is born from necessity. Easy and accessible mineral reserves have been largely tapped, pushing miners to search more remote locations for iron ore, copper, coal and other metals and minerals. The shift could help Rio and other miners recruit employees who don't want to work in remote locations that might be more politically and environmentally hostile."

Saudi Crude Output Still Down From 2008 (Christian W.)

Saudi Arabia's oil production is still down compared with 2008, having fallen in 2009, state oil company Saudi Aramco's chief executive was reported as saying on Tuesday. Oil drilling for production has declined, although exploration activities are increasing, Khalid al-Falih was also quoted as saying in the Asharq al-Awsat newspaper.

Environment

Food Security Tests Africa's Unity Agenda (Christian W.)

If we combine the consequential realities that emerge from the dominance of the global market with the climatic changes we are faced with and will continue to face, there can only be one logical approach to the future – proactive and visionary interventions.

There is bound to be some intervention in the established path from us all, as peoples, as communities, as governments and as regional and multilateral organisations.

Please send article submissions to: [email protected]

35 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest - March 4

"March 4 (Bloomberg) -- Distress is creeping back into the high-yield bond market for the first time in almost a year on concern economic growth will slow as governments curb swollen budget deficits.

The percentage of junk bonds with yields at least 10 percentage points more than Treasuries rose to 16 percent as of March 3, from 15.8 percent at the end of January, according to Bank of America Merrill Lynch’s Global High-Yield Index. The so- called distress ratio on European securities jumped the most since November 2008."

.................1A) JPMorgan, Citi Lead Bond Market as High-Yield Issues Set Record

"Democratic City Comptroller John Liu in the report forecast that Mayor Michael Bloomberg's $64 billion plan for the budget that starts on July 1 could spring a $1.2 billion deficit.

By law the mayor must submit a balanced budget."

"ATHENS/BERLIN, March 4 (Reuters) - Debt-burdened Greece drew strong demand for a crucial bond issue on Thursday but paid a steep risk premium that underscored its plea to Germany and other EU partners for support to help lower its borrowing costs.

A day after the government announced draconian new austerity measures, a 5 billion euro 10-year syndicated bond was more than three times oversubscribed at a final price of about 6.4 percent -- twice what Berlin pays, banking sources said."

"With the February numbers being released by the Governor’s office, and the budget down nearly 14 percent from 2009, things look ominous for the State Government.

And District 12 State Senator Brad Lager thinks that that might mean wholesale changes in the way the state of Missouri governs itself."

"“Are there going to be some programs that aren’t here 24 months from now, there probably will be,” he said. “Can I tell you today, what they are? I sure can’t. But what I do know is this: assuming this trend continues, which there are no economic indicators to assume otherwise, the reality is the Missouri State Government will much different 24 months from now.”"

"PHILADELPHIA - Facing a budget mega-shortfall, Philadelphia Mayor Michael Nutter will present his budget proposal to city council today.

Nutter is set to propose new fees that'll be paid by city residents to fill a $120- to $150-million gap.

One of the elements of the budget plan calls for a so-called "Clean Philly Fee," a $300-a-year fee for trash pickup. That breaks down to about $5.77 a week."

Toledo Mayor Mike Bell revealed last night at a citizens' forum his "backup plan" for closing the city's $48 million budget hole, should City Council fail to get onboard his current proposal:

He'll start laying off everybody.

"Depending on how large [the deficit] gets, the only thing left for us to do, after this, are major cuts in our staffing," Mr. Bell told an audience of more than 60 in the cafeteria at Waite High School. "And whatever number we don't have is how far we'll cut."

The mayor added: "And everybody - everybody - is inclusive in those cuts."

"Peyton proposes doubling garbage fee"

"Preliminary projections show a $58 million gap between revenue and expenses, mainly because of rising employee-related costs like health care.

He wants to cut costs by reducing employee pay by 3 percent, increasing the amount workers pay toward health care and raising fees for various city services — including more than doubling the garbage fee to $151.80 a year.

But Peyton said that would only trim the projected shortfall to about $18 million."

"Officials say the closings are needed to keep the district from plowing through what little is left of its dwindling reserve fund. Covington said the district could face bankruptcy if nothing is done."

"THE STATE HOUSE — With the City of Lawrence facing a $25 million budget shortfall, House lawmakers approved a measure that would allow the city to borrow up to $35 million to avoid bankruptcy.

“This is an important first step for the city,” said North Andover Rep. David Torrisi, whose district includes part of Lawrence. “The bill strikes the right balance between local control with state oversight.”

House members approved the bill by a vote of 106-51. The measure now goes to the state Senate."

"Mortgage rates will rise, home prices will fall and the supply of credit will diminish when the US Federal Reserve and other central banks wind down emergency programmes, a group of global banks warned on Wednesday.

In a stark prediction for the fallout of the end to the Fed’s programme of purchasing mortgage-backed securities, the Institute of International Finance’s Market Monitoring Group cautioned that there would be “considerable repercussions for mortgage rates and home prices”."

"Today’s report showed the number of people who’ve used up their traditional benefits and are now collecting extended payments increased by about 198,000 to 5.87 million in the week ended Feb. 13. "

""Folks, there's no money," Crespo said in House floor debate. "We're not talking about scholarships; these are tuition waivers. (We tell universities) take these kids and we're not going to pay you."

Rep. Bill Black, R-Danville, said that situation is especially egregious during a budget crisis in which universities aren't even getting their budgeted state funding.

"We owe the University of Illinois $475 million, (Southern Illinois University) says they don't know how to make payroll in April, and we're sitting here arguing about waivers we will not fund and we will not pay for!" Black shouted."

"SAN JOSE, Calif. — A new report says it would cost California taxpayers $2.3 billion to replace jobs lost from the closure of a factory that makes Toyota cars and trucks.

The report released Wednesday also says the layoffs that result from closing Fremont-based New United Motor Manufacturing Inc. will translate to a loss of $90 million in state and local taxes.

The report was prepared by a University of California, Berkeley, professor for a panel studying the plant's closure. The facility employs 4,600 people and supports about 25,000 other related jobs in the state."

"March 4 (Bloomberg) -- The number of contracts to buy previously owned U.S. homes unexpectedly declined in January, showing the extension of a tax credit is sparking little interest.

The index of purchase agreements, or pending home sales, fell 7.6 percent after a revised 0.8 percent increase in December, the National Association of Realtors announced in Washington. In November, the measure slumped a record 13.7 percent. Snowstorms in February probably limited contract signings and sales that month as well, the group said. "

"Teachers, parents and students are all across California are coming together on Thursday to protest against cutbacks in education.

The so-called "Day of Action" is in response to the 18,000 pink slips that are expected to go out statewide by March 15th. "

Greece should sell islands to keep bankruptcy at bay, say German MPs

State gets downbeat economic forecast (Montana)

South Brunswick school chief warns "hundreds" of layoffs may loom

State runs out of cash to clean up toxic sites (Michigan)

French unemployment rate jumps to 10 percent (highest in a decade)

Twin Rivers Unified to issue 500 pink slips

WA farmers say killing tax exemption could drive them out of business

Pension Liability Could Linger 40 Years (Omaha...on $500 million unfunded pension liability)

Up to 1125 school employee notices will be sent March 15 (Elk Grove)

Johnny Oxygen's picture
Johnny Oxygen
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Swaps and Robbers

Swaps and Robbers

http://theautomaticearth.blogspot.com/2010/03/march-3-2010-swaps-and-robbers.html

Here are three views of credit default swaps, by Gretchen Morgenson at the New York Times, Wolfgang Münchau at the Financial Times, and Ann Pettifor at the New Economics Foundation, from which I extracted bullet points. I hope they will give you a better understanding of what’s involved, beyond what I personally have to say.

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Don't hold your breath

Hello everyone

I've been reading this part of the website with great interest for more than a year now.  I've also followed the interviews that Jim at Financial Sense and Eric at King World have conducted, and read widely elsewhere.  Although the premise of these discussions is correct, I think the the timing is way off.

About two weeks ago I attended a lecture given by the chief economist of the Royal Bank of Canada, this country's largest bank.  He was giving some two-year predictions for the Canadian and other economies and accepted questions at the end of the lecture.  When asked about the end game of the American debt, this is what he said:

"The Americans are running large government debts and their balance of trade is loading up other parts of the economy with debt as well.  However, you have to understand that the American economy is huge and they can print the world's reserve currency, so the crisis is way off in the future.  They will have no problem selling the debt for perhaps six to ten years before they will have to look at addressing the spending problem.  In the meantime, as other world currencies falter, there will be a rush into the American dollar and therefore a demand for treasuries and other debt instruments for years to come.  Look at Japan - ten years ago everyone predicted problems selling their debt but they continue to do so with no trouble."

Everyone is predicting increasing and then parabolic gold prices.  That may happen, but not for a long time.  All the money managers that have moved their clients into gold are doing a disservice to them.  It seems to me that holding commodities, other hard assets, precious metals etc. is a strategy for years from now.  Dr. Faber's "collapse of the American dollar" might be right, but he'll have to wait ten to twenty years to see it.

If you're waiting for the collapse, don't hold your breath, won't happen anytime soon.

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Johnny Oxygen
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Re: Don't hold your breath

Everyone is predicting increasing and then parabolic gold prices.  That may happen, but not for a long time.  All the money managers that have moved their clients into gold are doing a disservice to them.  It seems to me that holding commodities, other hard assets, precious metals etc. is a strategy for years from now.

Hi truenorth!

Maybe. But remember inflationary collapses, and I suppose all collapses, are exponential. So how good is your timing? You may be able to make short term money in commodities or other hard assets but will you know when to get out? Everybody thinks there're smart enough to beat the collapse but history shows most aren't unless they have real inside info.

Why not just play the end game? Being that fiat will die and PM's will once again rule. You may have to hold a while but it's only a matter of time before you are rewarded.

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Re: Daily Digest - March 4

Dont forget that Japan was able to pay its debt because it benefitted from the global economic boom. Japan's deflationary problem was big but they were able to export like crazy to China, EU, USA. Now that EU, US, and China are having or are going to be having problems the situation is completely different. Now, you have so many countries trying to issue gov bonds, 4 trillion amongst EU and US. Also, you have gov balance sheets going to hell in a handbasket at the same time. Things are different 20 yrs later. Japan going bust in 89 is different as US is going bust. Imagine having a Japan style event worldwide.

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Re: Don't hold your breath

[quote=truenorth]

[...]  Although the premise of these discussions is correct, I think the the timing is way off.

Everyone is predicting increasing and then parabolic gold prices.  That may happen, but not for a long time. All the money managers that have moved their clients into gold are doing a disservice to them.  It seems to me that holding commodities, other hard assets, precious metals etc. is a strategy for years from now.  Dr. Faber's "collapse of the American dollar" might be right, but he'll have to wait ten to twenty years to see it.

If you're waiting for the collapse, don't hold your breath, won't happen anytime soon.

[/quote]

Welcome to the comments TrueNorth. 

One of the things that we try to be very careful about around here is making firm predictions over timing, or even any predictions beyond the idea that "the next twenty years are going to be completely different from the last twenty years."

Here's the funny thing about the future - nobody knows what's going to happen or when.  Given this, are we more comfortable trusting the opinions of a central banker in Canada, or our own assessments?

What I try to preach around here is that we are each most responsible for deciding for ourselves what sort of risk mitigation strategies make the most sense to us.  This will vary tremendously across individuals and we here don't really have a single point of view on the subject as you implied.  Trust me, this is a quite varied crew around here.

For the record I have long been advocating that everybody have a minimum of 10% exposure to gold, but much higher for some, because nobody know when the next big shift will come.  Nobody.

I will note that this site called the downturns well in advance and that we were quite alone if you compared our views to the entire cast of central bankers, Canadian included, and so if we are weighting predictions by past results then we might be tempted to think that the central banker's advice could/should be trading at a discount right about now.

But my main criticism of the centrist, status quo views as usually espoused by various economists, central bankers and even people whose views I respect, is that they are only useful if viewed entirely in the context of just one "E", that of the economy. 

When we factor in the risks originating from within either/both of the other two "E's" that exist to our plans for a future filled with continued exponential accumulation of debt, then the conventional views appear anachronistic and possibly quite dangerous to one's wealth.

So, no, I am not holding my breath that a collapse is imminent but neither am I 100% reliant on this being true.  It could be that the structural shift to commodities you allude to is still several years off, or it could happen much much sooner than that.  Personally, I am quite leery of any and all opinions that rest upon a firm sense of timing.

Play the odds, weigh the evidence, trust yourself.

Best,
Chris

P.S.  I have heard arguments each and every year since I first bought gold in 2003 why "now is not a good time" or "it's in a bubble" or some other reason to not hold it.  It's gone up each year, by a lot.  Conversely, I have not been able to locate more than a small handful of articles espousing the same views about stocks, bonds and other financial assets.   Just saying....

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Re: Don't hold your breath

truenorth,

Please, do not take financial advice from someone working for the Royal Bank of Canada. Or any bank, for that matter. He doesn't have your best interest in mind. Banks would love for the current climate to continue forever - remember, they can borrow money at 0% and lend it out at more than 0%. It's the greatest racket ever, and requires no work on their part.

CM keeps bringing up the exponential function for a reason - it's very difficult to know where one is on the curve. Remember the example of the stadium filling with water? I recommend you revisit that example. (Question : When is the stadium half full?) When the end game arrives for the world economy, it will be too late to prepare.

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Re: Don't hold your breath
TtotheA wrote:

CM keeps bringing up the exponential function for a reason - it's very difficult to know where one is on the curve. Remember the example of the stadium filling with water? I recommend you revisit that example. (Question : When is the stadium half full?) When the end game arrives for the world economy, it will be too late to prepare.

An excellent point I forgot to mention...the economy is a non-linear system, a difficult point to grasp without a lot of effort.

The danger for most people, myself still among them, is that we base our plans, hopes and dreams upon linear extrapolations but history seems to unfold as a series of little hockey sticks.  Nothing much happens for a very long time then all hell breaks loose.

Niall Ferguson just had an excellent article on this process thoughout history that I read earlier this week. 

It is my contention that by the time it is apparent that 'the game is afoot' it will be more or less too late to make any significant shifts to one's portfolio of holdings.  Which leads to my personal motto:  I'd rather be a year early than a day late.

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Re: Daily Digest - March 4

Timing has to be the hardest thing to guess. Looking at past charts after major breaks in the markets like 1929 or the more recent Japanese crash it did not take 10 years for further significant declines. This time could be different but I just don't see where the jobs are going to come from. Please read Peter Schiff's Peter Schiff: Don't Bet On A Recovery  article again.....it makes a lot of sense from what I am seeing at the street level.

If you're waiting for the collapse, don't hold your breath, won't happen anytime soon.

I don't know about a collapse or what that would really look like. We are not going to zero no matter what......to many resources in the US for that to happen IMHO. What I feel sure of is we are all going to have to get use to living with less for some time to come. I feel the next few years I am better to try to put as much effort in preserving as well as making. 

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Re: Daily Digest - March 4

I read the Niall Ferguson article and I think he is right. It isn't that difficult to predict the trend of things, but it is very difficult to predict the specific timing of major turning points.

The DC region had some recent experiences of this type of thing over the past winter, as we received two absolutely massive snowstorms. By the time most of the people realized a storm was a brewin' it was too late to get a snow shovel or salt - the shelves were bare. In 2008, I  worked in New Orleans as Hurricane Ike and Gustav came through. perhaps everyone was gun shy after Katrina, but 2/3 of the gas stations ran out of fuel quickly, and the ones that had it limited fill ups to 10 gallons max. Needless to say, stores ran out of food overnight. How would you feel if you saw these sorts of things in your town and you had not prepared? How would your feelings drive your actions?

The key that we have to understand is this: If we take action early, it is intellectually easy to reason through the process, because we are not presently in a dramatic crisis, and we are not in a panic. But if we act early, it can be emotionally harder, because we are acting before an understanding of the dangers becomes obvious to all society. Perhaps we risk appearing "weird" to our friends, relatives, and coworkers. So acting in advance is intellectually easier but emotionally more challenging. The flip is also true. If we wait until after the crisis is upon us, we will have full support of our friends and society in our recognition of the dangers. Thus, it will be emotionally easy to act. But, since we didn't prepare in advance, we are far more likely to be in a panicked state, which will make it harder to think clearly, limiting our intellectual ability to act. And further, there will be very few doors remaining open. Ex post facto "preparation" is somewhere between a nightmare and damage control.

I particularly liked an analogy that Chris made a while back, in reference to a school of fish taking a turn. They all do it together, almost perfectly instantaneously. You, as an observer, would be hard pressed to find which fish initiated the turn a millisecond before the rest. So goes society, at least to some degree. History suggests that large groups of people can act in a cohesive (though perhaps irrational) manner in very short order and precipitated by seemingly insignificant or random events. Do you dare attempt to anticipate these specific rogue events in advance? Can you spot which fish in a school of 100 initiated the turn first???

Mike

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How to Invest for a Global-Debt-Bomb Explosion

How to invest for a global-debt-bomb explosion - Paul B. Farrell

Start by looking past the endless cable skirmishes between Rush, Glenn, Bill and Shawn versus Harry, Nancy, Ben and Barack. Look way past the insurgency bonding Sarah and her diehard Tea Party revolutionaries with Ron Paul's Neo-Reaganite ideologues, Fat-Cat Bankers and the Party of No, all planning a massive frontal assault on the 2010 elections, hell-bent on destroying the presidency. All that's the sideshow.

http://www.marketwatch.com/story/how-to-invest-for-the-debt-bomb-explosion-2010-02-09

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10% gold holdings ratio
cmartenson wrote:

For the record I have long been advocating that everybody have a minimum of 10% exposure to gold, but much higher for some....

Not sure if I just missed this- I am an avid reader, but usually zone out when it comes to investment advice, ( I do not have any funds to invest, but rather am focussing on paying down debt and becoming self sufficient, growing my own food, etc).

Isn't 10% gold holdings ratio for everyone absurdly unsustainable?  Granted, the CC/doomer community is relatively small compared to the masses (aka- sheep), but is there even enough physical gold out there for everyone who wants to have a piece of this pie?

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Re: 10% gold holdings ratio

but is there even enough physical gold out there for everyone who wants to have a piece of this pie?

Yep. While there may be a lot of people investing in PM's very few are investing in physical PM's.

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Re: Don't hold your breath

Truenorth,

 

Inherent in any system, no matter how dysfunctional,  is the feature to maintain itself!

You have to watch out for the spin when you hear banker´s talk. If you find a banker that tells you to stop buying stocks and get into PM, I show you a Lawyer with his hand in his own pocket. Both very unlikely, pardon the joke.

Bankers and obviously particularly central banker hate gold for a simple reason, it uncovers their incapacity and the only and last time they can get a cut from your gains is when they sell it to you. After that, they´re basically out.

 

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Damnthematrix
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Posts: 3998
Re: Daily Digest - March 4
Katrina victims seek to sue greenhouse gas emitters

WASHINGTON — Victims of Hurricane Katrina are seeking to sue carbon gas-emitting multinationals for helping fuel global warming and boosting the devastating 2005 storm, legal documents showed.

The class action suit brought by residents from southern Mississippi, which was ravaged by hurricane-force winds and driving rains, was first filed just weeks after the August 2005 storm hit.

"The plaintiffs allege that defendants' operation of energy, fossil fuels, and chemical industries in the United States caused the emission of greenhouse gasses that contributed to global warming," say the documents seen by AFP.

The increase in global surface air and water temperatures "in turn caused a rise in sea levels and added to the ferocity of Hurricane Katrina, which combined to destroy the plaintiffs' private property, as well as public property useful to them."

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rhare
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Re: Daily Digest - March 4 - Dead skunks in the road

Katrina victims seek to sue greenhouse gas emitters

Well I think this shows why the world is going to hell.  Too bad southern Mississippi wasn't the global lawyer center, would have been a good start.  I wonder how many of these people use no electricity, no gas cars, no chemicals?  A bunch of hypocrites seeking to leech from others.

I think I'll vomit now....

 

An oldie but apropos:

What's the difference between a dead skunk and a dead lawyer in the road? Skid marks in front of the skunk. Smile

 

 

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dps
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Re: Daily Digest - March 4

Broomfield, Colorado, January sales tax revenue results.  SCFD = Scientific & Cultural Funding District

The January 2010 SCFD sales and use tax revenue was $2,791,471.19.

This compares to January 2009 tax revenue of $2,730,508.89. The variance is $60,062.30.

This is a 2.23% INCREASE in 2010 over month-to-date (MTD) and year-to-date (YTD) 2009.

This is the third consecutive month of reported MTD increases since August 2008.

Hugs ... dons

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alcatwize
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Re: Daily Digest - March 4

 

Yoshhash,
The gold play is for the non-debt slaves that have a positive net worth.  If you have a negative net worth, you have no wealth to preserve and would probably welcome a hyper inflation blow up because it will erase your debts.  Unfortunately, it will also destroy all stability in effect causing much more hardship.  Get out of debt and get gold.
The 2nd part of question is exactly why the price of gold is way under priced.

 

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spinone
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Re: Daily Digest - March 4

If you want to see what a collapse looks like, just look all around you.

TrueNorth is right on, in a sense.  The US is a big ecoomy, and can print the world reserve curency, so a collapse will be slow.  But remoreseless.  I expect it will  seem like a staircase going down; we will suffer a crisis, then level out.  The pundits will report that we have hit bottom and are on the verge of recovery.  Then we drop down another stair, another crisis, and level out.  Again, the MSM reports we have hit bottom.  Then another drop, and another, and another,  until our standard of living is much less energy intensive.  The standard of living we can afford based on our debt level, or level of production, and the cost of oil.

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HowardBeale
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Re: Don't hold your breath

Dear True North,

We're all full up on crazy  here. Go peddle it somewhere else. Sound harsh? I that convinced of my assessment that I think you're either talking your book or you're not paying attention to reality. It's surely true that you can't trust anyone anymore. What a world we "live" in... Not quite what I imagined my life would be; i.e., spending all my time guarding myself against a criminal organization masquerading as a government and being able to believe nothing I hear or see on any of the stations that pay to play on my television...

Sincerely,

Howard Beale

P.S. It's too late to cover your gold shorts. The U.S. dollar is going to Zero! Zimbabwe will look like a slight decline.

http://www.youtube.com/watch#!v=yge311sFhC8&feature=related

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Erik T.
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Posts: 1234
WELCOME, truenorth

Truenorth,

Just a note to say welcome to CM.com. As you can see, many of us here are pretty passionate in our beliefs, and several people disagree with your inclination to put faith in the words of a central banker.

But setting that aside, I just wanted to say WELCOME! This is a friendly place, and I hope you won't be put off by the number of people who disagreed with you. CM put it best himself: nobody knows what the timing will be. The big blow-up could come this year or not for 10 years; nobody knows for sure. Anyone (including a central banker) who says it is certain not to come for 10 years should be ignored as quickly as the alarmists who insist it's certain to come this week. History shows that macroeconomic outcomes can and have been forecast accurately, but timing of those outcomes is far less predictable.

Welcome!

Erik

 

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West Oz 9999
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Posts: 53
Re: Daily Digest - March 4

Yes true...

 There is enough gold for everyone on earth that has a positive net worth to own physical gold..

Problem is (in the future) it may be a very small amount and very expensive.

Best to get some now whilst the price is attemted to be smashed lower by.... dare i say it..

Central banks and their insider mates.. Yes even in Canada and Australia

West

Eye's picture
Eye
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Posts: 88
Re: Daily Digest - March 4

Hey True, welcome. 

The banker you listened too failed to recognize that Japan has been a nation of savers and much of their national debt is owned by their own citizens.  The exact opposite is true for the US.  There are many other differences between the US and Japan so you have to be careful with comparisons.

Once you are of like mind with the conclusions of the CC the timing becomes a secondary issue.  We can only prepare at a rate our finances and lifestyles allow.  No one can be completely prepared for every eventuality. 

The spirit of the members of CM.com is summed up by Chris' admonition that it is better to be a year early than a day late.  We are each growing in our preparedness and use this site and our friends here towards that end.

Again, welcome,

Eye

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mwtukwila
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Re: Don't hold your breath

Hey, just for accuracy's sake, TrueNorth was referring to the Royal Bank of Canada (RBC) a publicly traded company with US offices in Raleigh, NC and Canadian offices in Montreal and Toronto.  http://en.wikipedia.org/wiki/Royal_Bank_of_Canada

The Bank of Canada is our equivalent of the Federal Reserve and is currently headed by Mark Carney.  http://en.wikipedia.org/wiki/Bank_of_Canada  This is our Central Bank and TrueNorth wasn't referring to it.

It's really easy to confuse the two... and I trust Mark Carney more than a sponsored economist who may or may not be selling advisory services. 

That being said, nothing operates in a vacuum, even here in Canada. 

I love this site, and after enjoying so many thoughtful comments, I should really contribute more.  As an American living in Canada, I felt that I left the USA for the right reasons, and I hope Canada can muddle through what's about to happen better than my former homeland.  If civilization declines, we have the largest fresh water supply in the world, and climate change will most likely make our winters more bearable.

 

 

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ppanza
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Re: Don't hold your breath

Quote: ... and I trust Mark Carney more than . . .

Wow, really? . . . . Mark Carney - the GoldmanSachs alumnus?

I am hoping that is a relative comparison to a very small amount and that you do mathematics like I do . . . 

2 X 0 = 0

Cheers.

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SagerXX
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Johnny Oxygen's picture
Johnny Oxygen
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Posts: 1443
Re: Faked stores for faked recovery?

OK, now that is just creepy.

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cmartenson
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Posts: 5568
Re: Faked stores for faked recovery?

I see the "Broken Windows Theory" is on vivid display in the UK.  They do excel at such social engineering leading, as they do, in surveilance cameras and other forms of gross social control.

The intellectual equivalent over here is the monthly Job Report which is even more obviously fake than a rolled on store front.  Today was a doozy...still waiting for the Birth Death additions to be posted...they are over an hour late so far in providing this information.  My guess is that the additions are going to be outlandish and so they are being temporarily withheld.  Either that or "weather" has prevented the updater fro getting to their desk this morning...:)

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SagerXX
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Posts: 2219
Greece is the word...

This story made me shake my head with disbelief...

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSDLV4EUnj8k&pos=8

...until I thought it through and put the US in Greece's shoes.

1.  You've got the classic "The people support our plan"/actual polls show 'the people' hate it moment:

Quote:

“Opinion polls show that a very large majority of Greeks understand that this in the interest of the country,” European Central Bank President Jean-Claude Trichetsaid today in an interview with Belgium’s RTBF radio.

...

Most Greeks oppose plans to cut wages and increase value- added tax, according to the first opinion poll published since the austerity moves were announced on March 3.

Seventy-two percent of 530 people surveyed by Public Issue for Skai Television said they disagreed with a drop in bonus- vacation payments, while 68 percent opposed a value-added tax increase. 

 

2.  The part that made me shake my head was the idea that people went on strike wanting to keep their bennies/pensions/vacations but don't want to take steps to rectify the financial situation (leaving aside, of course, whether or not 'the people' actually caused the problems).  Then of course I imagined what would happen in the US if we ever have similar austerity measures imposed.  Protests, riots, strikes?  Not that farfetched.  Although IMO we'll end up with 'austerity' arriving via inflation so there may not be any particular moment where common protest breaks out.  It's one thing to read a headline such as "Workers went on strike and marched on Congress to protest pension and wage cuts" and quite another to imagine "Workers went on strike and marched on Congress to protest the way creeping inflation is robbing them of their wages."

 

It's an interesting world, boyo.

 

Viva -- Sager

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: Don't hold your breath
mwtukwila wrote:

If civilization declines, we have the largest fresh water supply in the world, and climate change will most likely make our winters more bearable.

Don't be so sure dude..

Get This: Warming Planet Can Mean More Snow
http://www.npr.org/templates/story/story.php?storyId=123671588&ft=1&f=1007
With snow blanketing much of the country, the topic of global warming has become the butt of jokes. "The fact that the oceans are warmer now than they were, say, 30 years ago means there's about on average 4 percent more water vapor lurking around over the oceans than there was, say, in the 1970s," he says.

Samuel

guardia's picture
guardia
Status: Platinum Member (Offline)
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Posts: 592
Re: Don't hold your breath
ppanza wrote:

Quote: ... and I trust Mark Carney more than . . .

Wow, really? . . . . Mark Carney - the GoldmanSachs alumnus?

I am hoping that is a relative comparison to a very small amount and that you do mathematics like I do . . . 

2 X 0 = 0

Cheers.

As additional information, yup I see him right there orbiting the Center of the Universe:

http://blog.vanityfair.com/online/politics/2009/12/08/goldman-chart-lg.jpg

Samuel

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saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4060
Re: Faked stores for faked recovery?

The intellectual equivalent over here is the monthly Job Report which is even more obviously fake than a rolled on store front.  Today was a doozy...still waiting for the Birth Death additions to be posted...they are over an hour late so far in providing this information.  My guess is that the additions are going to be outlandish and so they are being temporarily withheld.  Either that or "weather" has prevented the updater fro getting to their desk this morning...:)

Mish posted the numbers and doesn't seem to have much faith in their accuracy:

http://globaleconomicanalysis.blogspot.com/2010/03/jobs-contract-by-36000-unemployment.html

mwtukwila's picture
mwtukwila
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Posts: 3
Re: Don't hold your breath

You are correct... it was a relative comparison, but I give Bank of Canada and the country credit for having the world's most stable banking system thus far.

mwtukwila's picture
mwtukwila
Status: Member (Offline)
Joined: Aug 12 2009
Posts: 3
Re: Don't hold your breath

Nice reference, and thanks... but the "more bearable" part I stated had nothing to do with snow amounts.  You have to take snow as a given in Canada... so to be more clear... I would rather have 0 to -5 C than say -25 to -30 C.  And I doubt that the extreme Northern latitudes will benefit from all that extra precipitation... I believe the report was referring to US geo-climates and population zones.

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: Don't hold your breath
mwtukwila wrote:

You are correct... it was a relative comparison, but I give Bank of Canada and the country credit for having the world's most stable banking system thus far.

In my personal opinion, Canada has profited much from the tar sands.. nothing to do with competent leaders.

Besides, your postitive opinion of Canada will rapidly change once the housing bubble bursts. :) There are a lot of articles, but here is one FYI: http://thetyee.ca/Opinion/2009/10/22/BubbleWillBurst/

Samuel

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