- Increase In ‘Fees’ Rankles Georgians
- Sanford Releases Proposed Spending Plan
- UC Leaders Respond To Executive Pension Request
- Tuesday’s Economic Temperature – Too Hot or Just Right?
- Race to Debase – 2010 Q4
- Rise In Copper Prices Causes Increase In Theft
- Weather, Supply and China to Dominate Grain Prices
- Corn Rationing Needs to Begin
Opposition is growing against the increasing number of fees levied by the state that are supposed to pay for specific services but wind up in the general treasury. Many critics say they’re merely a tax increase dressed up to fool voters. The practice of taking user fee money to shore up the rest of the state budget started more than a decade ago but has accelerated in recent years as the state grapples with declining income from taxes on sales and income. In the last session, the General Assembly raised dozens of fees to help plug a budget hole, from drivers licenses to court filing. With next year’s budget projected to have a nearly $2 billion shortfall, observers predict the fee swap-out will continue.
Gov. Mark Sanford released his final proposed state spending plan Tuesday, one that avoids cutting days from the school calendar as some lawmakers have suggested. But all state employees earning more than $35,000 a year would take a 5 percent pay cut, doctors and hospitals would be paid less to treat patients in the state-run Medicaid program, and colleges and universities would have to cut $100 million from their budgets. Sanford’s proposed budget also would carve out $10 million in money for a new highway trooper class, additional money for job recruitment and $7.9 million to buy and preserve land. What impact Sanford’s proposal will have on the state’s looming budget debate is unknown. Legislators return to Columbia next week and will have to cut between $800 million and $1 billion from state spending for the year that starts July 1.
University of California leaders today made their strongest statement yet in response to the revelation last week that 36 highly paid executives threatened to sue UC unless their pensions are increased….Under UC’s current formula for calculating pensions an employee earning $400,000 a year who retires after 30 years would get a $183,750 annual pension. But if the cap were lifted, the pension rises to $300,000.
What else do the top 1% want? They want commodity prices to rise. That may seem counter-intuitive as they should be input costs but, in practice, consumers are charged on a “mark-up” pricing system and companies make a percentage of profits on sales so, if input costs go up, they simply raise prices and rising prices mean rising profits as long as they avoid margin compression – that’s why “slightly” rising commodities are preferred as sharp rises can cause dislocations in pricing.
Race to Debase – 2010 Q4 (adam)
In US dollar terms gold was up 29.6% on the year. Beginning the year at $1097, gold showed a steady pace reaching $1421 to close out the year. Silver absolutely dominated the field with a flurrying finish rounding out an 83% gain for the year. Amazing! Silver lapped four fiat currencies of the more than 75 we tracked in 2010.
While gold prices have skyrocketed, a less glamorous metal has also gone way up in price and become the target of thieves across the state. Copper, which is used in plumbing and wiring, is over four dollars a pound and Cedar Rapids police spokesperson Cristy Hamblin says thieves have been bold about stealing it. “They know no boundaries, because in 2010 we’ve had just a very sharp, almost triple the amount, we’ve had 73 reported cases of copper theft,” Hamblin says. Copper thieves were brazen enough to cut part of the wiring at the Vineyard Church of Cedar Rapids while a church service was underway.
With the increases in demand from China, supply concerns are only set to compound. “I saw the news over Christmas that China was raising interest rates. It was like the markets laughed at China and said, ‘whatever. We’re not afraid of the big bad wolf.’” Much of the talk coming out the trading community right now is that commodities are the place to be, Grisafi says. With that, he expects to see speculative buying coming into the market early in 2011.
Corn Rationing Needs to Begin (dr boost)
Soaring corn prices will slice into demand, with corn exports expected to fall first followed by feed usage. Analysts anticipate the cattle industry to begin rationing earlier than other livestock sectors due to poor margins, but rationing in poultry, hog, and dairy will be close behind. “It will be very painful,” Turner adds. USDA’s latest World Agricultural Supply and Demand Estimates (WASDE) put the carryout for the 2010-11 U.S. corn crop at 832 million bushels, less than half the previous year’s carryout of 1.7 billion bushels.
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