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    Daily Digest 3/27 – A Week Of Oil Spills, Will Inflation Make A Comeback In 2014?

    by DailyDigest

    Thursday, March 27, 2014, 3:20 PM

Economy

Tymoshenko Says She Will Run for President of Ukraine (jdargis)

“I will be the candidate of Ukrainian unity,” Ms. Tymoshenko, said at the news conference, according to The Associated Press. “The west and center of Ukraine has always voted for me, but I was born in the east, in Dnepropetrovsk.”

Ms. Tymoshenko, who is known for her trademark blonde braid, generated new controversy this week after she was heard in a recorded telephone conversation using expletives and a derogatory term for Russians, and saying that Russia should be destroyed for its invasion and annexation of Crimea.

U.S. Reports Modestly Better Economic Growth (jdargis)

“The number for gross domestic product is good,” said Lawrence Creatura, a portfolio manager at Federated Investors in Rochester, N.Y. “It is not the exciting number that is typical of postrecession recoveries, but it is good enough. This has been a stumbling sort of recovery all along, and this number is a continuation of that pattern.”

One part of the economy that has grown over all in recent years, the housing sector, seems to be slowing markedly.

The Government Inflation Scam (Thomas C.)

Through it all, government officials know exactly what they are doing. They know that it’s their central bank that is producing the problem by expanding the money supply. But they also know that most of the citizens are graduates of public schools, which teach that inflation is caused by private-sector people who are greedily raising their prices. The officials know that all they have to do is focus the blame on the private sector and the citizenry will immediately fall into line and see the government as their savior rather than the entity that is actually the cause of the problem.

Will Inflation Make A Comeback In 2014 When The Consensus Worries About Deflation (Taki T.)

In particular the commodity complex shows a significant divergence: industrial metals (especially copper) are weak while agriculturals are very strong, just like precious metals and aggregate commodities. Heinz Blasnik points to China for a better understanding of the industrial metals weakness. “Broad money supply in China (M2) is now growing at 13.2%. That is at the low end from the range of the post decade. M1 has actually collapsed to 1.5% growth from almost 40% in 2009. I think that is where the weakness of industrial metals is coming from. It’s definitely China, because money supply growth is declining and also bank-lending and total lending are declining. It actually seems that house prices are beginning to turn down as well.”

The Fourteen Year Recession (pinecarr)

Simply stated, the Greenspan/Boskin Commissions’ task was to reduce future Social Security payments to senior citizens by deceitfully reducing CPI and allowing politicians the easy way out. Politicians would lose votes if they ever had to directly address the unsustainability of Social Security. Therefore, they allowed academics to work their magic by understating the CPI and stealing $700 billion from retirees in the ten years ending in 2006. With 10,000 baby boomers per day turning 65 for the next eighteen years, understating CPI will rob them of trillions in payments. This is a cowardly dishonest method of extending the life of Social Security.

Dollar Value Could Suffer Instant Change: David Morgan (pinecarr)

Morgan thinks the world knows the dollar is in trouble. He contends, “Everyone wants to pretend that everything is OK, but everyone also knows the emperor has no clothes. . . . People might say I’m out. The dollar is toast. I want out at any price. Once that mindset takes place, it could catch fire. It’s unlikely, but you cannot rule it out. . . . 19 out of the G20 are saying we are mad as hell and we are not going to take anymore. You get it together or we are going to get it together for you. . . . Something is going to take place this year that will have such an impact. Perhaps what will be announced will go over the heads of many, but those who are awake will say, ‘that’s it.’ Might not happen initially, but the earthquake will have started, and the U.S. dollar will have lost its status on the international markets.”

A Week of Oil Spills (James B.)

And on March 25, an unidentified quantity of oil leaked from BP’s massive Whiting refinery in Indiana. The oil was discharged into Lake Michigan. No injuries occurred and the leak was stopped. Favorable winds were keeping the oil at shore and cold weather eased containment. The refinery was recently upgraded to handle Canadian heavy crude.

The Energy Intensity Of Food (Eric G.)

In February of 2014 I was invited to offer a lecture on the energy intensity of food production to an audience at the University of Vermont as part of the Campus Food and Energy Seminar Series. The lecture was recorded, and since there aren’t many talks on this topic available on the Internet I thought I’d make sure folks were aware of this one. Doug Lantagne, Dean of Vermont Extension, starts the recording with an introduction to food systems-related activities at UVM, followed by Alison Nihart, an assistant for the UVM Food Systems Initiative, introduces me.

Gold & Silver

Click to read the PM Daily Market Commentary: 3/26/14

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7 Comments

  • Thu, Mar 27, 2014 - 4:58pm

    #1

    saxplayer00o1

    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2935

    Morgan Stanley Sees More China Defaults as Cash Squeeze Tightens

    Headlines:

    1. IMF agrees to provide Ukraine with up to $18 billion
    2. Illinois Income Tax Will Likely Not Be Temporary
    3. Morgan Stanley Sees More China Defaults as Cash Squeeze Tightens
    4. Japan buyers rush to snap up gold as tax rise looms
    5. Chinese developers seek alternative financing as investors grow wary

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  • Thu, Mar 27, 2014 - 7:03pm

    #2

    Poet

    Status Platinum Member (Offline)

    Joined: Jan 20 2009

    Posts: 976

    Ostrich Retirement Plans

    I was just at a retirement savings presentation given by our 401(k) plan administrator (a major national one). The presenter was a Certified Financial Planner.

    He stated that Social Security was solvent and as a pay-as-you-go system, still received more funds than it paid out. He ignored my message to him about how the plan outflows had exceeded inflows since 2010.

    And, of course, this trend beginning in 2010 is an exponential process… A slow trickle right now…

    Poet

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  • Thu, Mar 27, 2014 - 8:23pm

    #3

    Taz Alloway

    Status Bronze Member (Offline)

    Joined: Feb 18 2010

    Posts: 461

    Run on China bank

    Customers were worried their savings would be lost -//- The panic was so widespread that the bank placed stacks of cash in bank teller windows to reassure customers that it had enough funds to meet demand.

    A Reuters journalist reported from the scene that the bank was staying open 24-hours a day, and that the cash needed to satisfy hundreds of waiting depositors was being trucked in by armored car.

    The China Banking Association issued a // statement that expressed confidence in the bank's financial health, and warned that rumor mongers would be held legally accountable.

    http://money.cnn.com/2014/03/27/news/economy/china-bank-run/index.html?iid=HP_Highlight

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  • Fri, Mar 28, 2014 - 1:42pm

    Reply to #2

    Chris Martenson

    Status Platinum Member (Offline)

    Joined: Jun 07 2007

    Posts: 4513

    Social Security is Bleeding

    [quote=Poet]I was just at a retirement savings presentation given by our 401(k) plan administrator (a major national one). The presenter was a Certified Financial Planner.
    He stated that Social Security was solvent and as a pay-as-you-go system, still received more funds than it paid out. He ignored my message to him about how the plan outflows had exceeded inflows since 2010.
    And, of course, this trend beginning in 2010 is an exponential process… A slow trickle right now…
    Poet
    [/quote]
    Well, then I guess he's just not a very up-to-date sort of fellow.
    From the SS Administration's own website:

    Social Security’s total expenditures have exceeded non-interest income of its combined trust funds since 2010, and the Trustees estimate that Social Security cost will exceed non-interest income throughout the 75-year projection period.
    The deficit of non-interest income relative to cost was about $49 billion in 2010, $45 billion in 2011, and $55 billion in 2012.
    The Trustees project that this cash-flow deficit will average about $75 billion between 2013 and 2018 before rising steeply as income growth slows to the sustainable trend rate after the economic recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.
    (Source

    So it's been bleeding since 2010, the trend is getting worse, the deficit will rise even more steeply after 2018, and the deficit is expected to persist throughout the 75-year projection period.
    Other than that your CFP was correct.

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  • Fri, Mar 28, 2014 - 1:52pm

    Reply to #2

    Rector

    Status Bronze Member (Offline)

    Joined: Feb 07 2010

    Posts: 322

    The Sad Irony

    If you made your assertions about SS publicly, the sad irony is that there were probably many in the audience who discounted your factually correct statements and accepted the CFP's error because he's an "expert" and is "certified".  My broker is a "CFP" too, along with several other industry created "credentials" and he doesn't know dog mess from peanut butter.  The tyranny of ignorance drives me crazy.  I don't even try to argue or tell anyone anymore that the market might be overvalued just a touch.
    Rector

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  • Fri, Mar 28, 2014 - 2:10pm

    #4

    HughK

    Status Gold Member (Offline)

    Joined: Mar 06 2012

    Posts: 571

    Thanks, Eric G, for the talk on the Energy Intensity of Food

    The Energy Intensity Of Food (Eric G.)

    In February of 2014 I was invited to offer a lecture on the energy intensity of food production to an audience at the University of Vermont as part of the Campus Food and Energy Seminar Series. The lecture was recorded, and since there aren’t many talks on this topic available on the Internet I thought I’d make sure folks were aware of this one. Doug Lantagne, Dean of Vermont Extension, starts the recording with an introduction to food systems-related activities at UVM, followed by Alison Nihart, an assistant for the UVM Food Systems Initiative, introduces me.

    Thanks for this talk, Eric G!  I watched it after lunch today.

    Hugh

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  • Sun, Mar 30, 2014 - 2:54pm

    Reply to #4

    Eric Garza

    Status Member (Offline)

    Joined: Sep 30 2011

    Posts: 0

    Glad you liked it!-Eric

    Glad you liked it!
    -Eric Garza

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