"Office landlords in the U.S. will confront vacancy rates approaching 20 percent next year as employers hold off hiring, commercial property brokers Jones Lang LaSalle Inc. and Grubb & Ellis Co. said today."
"The U.K.’s Royal Mint, established in the 13th century, more than quadrupled production of gold coins in the third quarter after demand for the metal increased as investors sought to hedge against a weakening dollar."
(Dallas Fed President Richard Fisher)
"On the other hand, in terms of its inflationary input, unless it becomes disorderly, a depreciating dollar -- a gradually depreciating dollar -- doesn't necessarily add an enormous inflation impulse."
"The surge in the price of gold is likely to continue, in the face of a weakening dollar and the threat of hyper-inflation in the United States.
The yellow metal remains the "best wealth preserving asset", analysts told a conference in Zürich this week."
"“There is all this cash available in the world for the moment in search of a home, and the home is rare, precious objects,” Curiel said. “There is this talk that there should be inflation someday because governments have printed so much money.”
The auction houses set world records for green diamonds, intense blue diamonds and so-called “chameleon” diamonds this week in Switzerland. Johann Rupert, the South African billionaire who controls luxury brands including Cartier and Van Cleef & Arpels, said last week that hyperinflation concern may lead to people running into jewelry stores."
"Analyst Charlie Sernatinger of Fortis Clearing Americas echoed the sentiment. "The money supply keeps increasing, it's up 18 percent for this year and some of the money is going into commodities."
"The real problem is that interest rates are too low so speculators are borrowing money and buying stocks and commodities, anything that has value," he said.
Some experts and politicians have warned that a period of hyper-inflation lies ahead, including soaring commodity prices if the money supply continues to grow, pressuring the dollar."
"The chief investment strategist for Key Private Bank said Wednesday morning that the employment outlook along the Wasatch Front is more dismal than the national average.
As evidence, Bruce McCain cited job growth after the 2001 recession."
"Most of McCain's presentation Wednesday featured national economic trends, including inflation and hyperinflation. Inflation can occur when government needs to spend money and doesn't have any money to spend, he said.
Typically a government obtains money by borrowing overseas, but when the debt is high a government cannot borrow. So the only other way to obtain cash is by printing more of it, which causes inflation, McCain said.
The federal government can reverse the course toward inflation by keeping interest rates low and cutting government spending, which is politically risky.
"We do think, however, there are several warning stages along the way to hyperinflation," McCain said, noting that they include a high deficit, high interest rates and a weak dollar."
- 8) World Gold Council Says Central Banks Will Continue To Diversify Dollar Exposure
"The World Gold Council (‘WGC’) said that demand for Gold is likely to remain well supported by continued economic and currency uncertainty, inflation concerns and the search for diversification. According to the industry’s lobbying group, central banks were likely to continue ‘diversifying their dollar exposure in favour of the proven store of value represented by gold’."
"The bankrupt investment firm is contending with more than 64,000 claims from creditors with a face amount value of more than $820 billion. Lehman's chief executive, turnaround specialist Bryan Marsal, said in bankruptcy court on Wednesday it was possible the claims could reach $1 trillion due to certain unresolved issues."
- 10) More members of middle class file for bankruptcy (USA Today)
"Spend, spend, spend
During the boom years, many middle-class Americans lived beyond their means.
"People have been negligent with their finances," says Doan. "They've taken a lot of money out of their homes like it's an ATM."
Middle-class families were encouraged to spend. But that often turned into a disaster when their bills increased and wages dwindled."
"Banks in recent years have been hammered by losses on home mortgages, buyouts and corporate defaults. Now, lenders face big losses from loans backed by commercial real estate, where a stagnant economy will eventually take its toll, financial services executives told the Reuters Global Finance Summit.
"The commercial real estate business still has not been marked down. It's not been marked to market," Cantor Fitzgerald LP Chief Executive Howard Lutnick said. "The economy can't, in my opinion, grow fast enough that the tenants are going to go out and start hiring and growing and building and take up all these rents at $60 a foot. It's nonsense."
U.S. banks held $1.65 trillion of commercial real estate loans on their balance sheets as of November 4, according to the Federal Reserve. Total assets were $11.8 trillion."
(More info at the Wall Street Journal: "A sector too tough to save")
"NASHVILLE, Tenn., Nov. 19 /PRNewswire/ -- HealthLeaders-InterStudy, the leading provider of managed care market intelligence, reports that nationwide, Medicaid enrollment grew by two million lives in the first half of 2009 to more than 52 million, reflecting the economic downturn and exacerbating many states' budget concerns. According to data from Managed Market Surveyor-Rx, Medicaid growth nationwide increased nearly five percent, with 25 states, including Florida and Michigan, experiencing enrollment growth of more than five percent."
"Unused money might be used to reduce U.S. debt
The Obama administration is poised to extend the life of the highly unpopular $700 billion financial bailout and, to display a commitment to fiscal responsibility, is planning to use much of the leftover funds to reduce the national debt, government sources said."
"Delinquencies and foreclosures set 9th straight record in 3rd quarter as layoffs keep rising
WASHINGTON (AP) -- A rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure, adding to concerns about the strength of the economic recovery.
Driven by rising unemployment, such loans accounted for nearly 33 percent of new foreclosures last quarter. That compares with just 21 percent a year ago, when high-risk subprime loans made during the housing boom were the main reason for default.
At the same time, the proportion of homeowners with a mortgage who were either behind on their payments or in foreclosure hit a record-high for the ninth straight quarter."
- 15) Hyperinflation On the Way (Eric Sprott, CEO of Sprott Asset Management)
"Eric Sprott, CEO of Sprott Asset Management, says quantitative easing is "just debasing the currency, which will eventually lead to hyperinflation."
The recent extension of the homeowner credit and giving corporations loss carry-backs while paying unemployment benefits for an additional 20 weeks augur an inflationary if not an hyperinflationary scenario, Sprott notes.
“I really think that once the Fed has spent the $1.25 trillion buying the GSE paper that we might yet see another level of quantitative easing in the States,” he says."
- 16) California
......A) "The budget crisis had pushed California, which would have the world's eighth largest economy if it were a country, to the brink of bankruptcy, sending the state's credit-rating plunging and forcing it to start paying bills with IOUs."
.......B) "California's finances have been so bad that the governor's finance director, Mike Genest, told a budget forum in Washington last week that back in February he had combed through the U.S. Constitution to research whether California could legally declare bankruptcy -- or revert to some kind of territorial status. (Neither was realistic, he determined.)"
.....C) "What to expect in the next 5 years "
"Medi-Cal funding is expected to grow by $7.4 billion.
Prison spending will grow by nearly $2 billion."
- 17) Treasury to sell $118 billion in notes next week
(Details at MarketWatch)
"HARTFORD, Conn. — Connecticut lawmakers learned that the state's budget woes may get much worse in 2012, possibly growing to $3.4 billion from the current $385 million.
Both the governor's budget office and the General Assembly's Office of Fiscal Analysis on Wednesday told legislative budget committees they expect the deficit will reach $3.2 billion to $3.4 billion.
"We're in a world of hurt," Robert Genuario, Gov. M. Jodi Rell's budget chief and head of the Office of Policy and Management, said."
- 19) Connecticut pensions (editorial)
"As of June 2008, the state teachers retirement fund had a $6.5 billion unfunded liability. The state employee retirement fund has only half the assets needed to meet its expected obligations and an unfunded liability of $9.3 billion. The estimates of total unfunded pension liability for state employees, when other retirement benefits are included, range from $11.4 billion to $21.7 billion"
- 20) Alaska pensions
"Alaska has about $16 billion set aside to pay future retirement costs, but expects those costs to total $23.5 billion, giving it an unfunded liability of $7.5 billion, as of its most recent annual accounting."
"Depletion of the trust fund used to pay unemployment benefits has triggered what the state Revenue Department is calling a record tax increase in 2010 for Florida's half-million employers.
The minimum annual rate — charged to an employer with a solid history of retaining employees — will jump almost twelvefold, from $8.40 per employee to $100.30, revenue officials said Wednesday."
"About one million laid-off workers will see their unemployment benefits end in January unless Congress acts quickly to renew existing federally paid extensions, according to a new survey and legislators and state officials."
"Some nine million people now receive unemployment benefits, five million on the initial state programs and four million through federal extensions."
(Thank Nathan's Economic Edge for catching that last number)
- 23) Geithner Asked to Resign, Geithner responds (Video)
.............Maybe Little Timothy Geithner wouldn't be in so much trouble if this wasn't his top employee at the treasury.
................Please read your headline before posting your news story.
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