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    Daily Digest 12/9 – The Mother Of All Bank Runs, The Chinese Century

    by DailyDigest

    Tuesday, December 9, 2014, 3:37 PM


NIRP Arrives In The US: TBTF Banks Tell Customers To Move Their Cash Or Be Charged Fees (pinecarr)

As the WSJ reports, far from paying for the privilege of holding other people’s cash (and why would they with nearly $3 trillion in positive carry excess reserves sloshing around) US banks – primarily of the TBTF variety – “are urging some of their largest customers in the U.S. to take their cash elsewhere or be slapped with fees, citing new regulations that make it onerous for them to hold certain deposits.”

What I’m Reading: The Divide, Matt Taibbi (pinecarr)

Taibbi’s thesis is simple: the U.S. justice system is set up to reinforce the wealth gap, harassing the poor with stop-and-frisk policies that trigger big penalties and jail time for minor violations such as misrepresenting income on a welfare application or driving to work as an illegal immigrant. In the meantime, the government gives major corporations that steal millions of dollars repeated fines which are nothing but a slap on the wrist and never pursues jail time.

The Mother Of All Bank Runs (westcoastjan)

Why does it even matter what the ratio is? Let’s walk this through, because we are talking about the issue of “trust”. The only reason one would repatriate gold is because they want it in hand. If you believed your gold was safe and sound, protected and “actually there,” no one would ask for their gold back. Belgium has displayed their confidence by holding $400 billion worth of U.S. Treasuries …but apparently not with the U.S. holding less than $5 billion worth of gold? Why the dichotomy of trust? Actually, I will use a better word, “bifurcation” of trust, and yes there is a pun within this one too.

The Chinese Century (jdargis)

Of course, in many ways—for instance, in terms of exports and household savings—China long ago surpassed the United States. With savings and investment making up close to 50 percent of G.D.P., the Chinese worry about having too much savings, just as Americans worry about having too little. In other areas, such as manufacturing, the Chinese overtook the U.S. only within the past several years. They still trail America when it comes to the number of patents awarded, but they are closing the gap.

Oil Falls to 5-Year Low, and Energy Companies Start to Retrench (jdargis)

So far, the drop in oil prices has been a boon for consumers. The national average price for a gallon of regular gasoline was $2.67 on Monday, according to the AAA auto club, 27 cents lower than a month ago and 59 cents below a year ago. Energy experts say that every 10-cent drop in gasoline prices translates into a $120 in annual savings for the typical family that consumes 1,200 gallons a year.

Ten Reasons Why A Sustained Drop In Oil Prices Could Be Catastrophic (Evan K.)

If the price of oil is too low, it will be left in the ground. With low oil prices, production may drop off rapidly. High price encourages more production and more substitutes; low price leads to a whole series of secondary effects (debt defaults resulting from deflation, job loss, collapse of oil exporters, loss of letters of credit needed for exports, bank failures) that indirectly lead to a much quicker decline in oil production. The view is sometimes expressed that once 50% of oil is extracted, the amount of oil we can extract will gradually begin to decline, for geological reasons. This view is only true if high prices prevail, as we hit limits. If our problem is low oil prices because of debt problems or other issues, then the decline is likely to be far more rapid. With low oil prices, even what we consider to be proved oil reserves today may be left in the ground.

BP’s oil spill settlement appeal rejected by U.S. Supreme Court (jdargis)

BP Vice President Geoff Morrell said Monday that the company remains “concerned that the program has made awards to claimants that suffered no injury from the spill — and that the lawyers for these claimants have unjustly profited as a result.”

Louisiana’s Moon Shot (jdargis)

Maps of southeastern Louisiana have always been misleading, visually lumping wetlands and dry land together. Some of those wetlands are too soft to walk on, but they are critical to the dry land where people live because they provide a cushion against damaging storm surge. They also drive the state’s bountiful seafood production.

Gold & Silver

Click to read the PM Daily Market Commentary: 12/5/14

Provided daily by the Peak Prosperity Gold & Silver Group

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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