Daily Digest

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Daily Digest 6/12 - U.S. In Eye Of 'Gigantic Financial Hurricane', IEA Says the Party’s Over

Thursday, June 12, 2014, 10:09 AM

Economy

Shrouding China's gold trade, more imports go under radar (June C.)

"If gold enters China via Shanghai then it is not going to be easy anymore to draw conclusions about Chinese demand by just looking at Hong Kong data," said Carsten Fritsch, an analyst with Commerzbank AG.

The Shanghai Gold Exchange (SGE) - the world's biggest platform for physical gold trade - is in talks with foreign banks and producers on the new exchange in the city's pilot free trade zone.

School officials meet again with Council members on funds (Thomas C.)

Bryan said the district was now asking to borrow money as well as keep the proceeds of the building sales because of a "desperate fiscal situation" that could lead to 800 teacher layoffs and 40 students per class.

"We get that it's not what we talked about" last year," she said. "We're not trying to be cute. There's a big hole next year."

The Council committee eventually approved a bill allowing the city to borrow $27 million - about half what the district asked for, but enough to pay the bills for the rest of the fiscal year.

Great Moderation 2.0 Seen Lasting by JPMorgan Until Fed Shifts (jdargis)

While that happened for 45 business days as of the end of last week, the average timeframe of similar episodes since the 1980s is 150 days. They ranged in length from three months when the Federal Reserve paused its easing of monetary policy in 2002 to almost two years during the so-called Goldilocks era of the late 1990s when the U.S. economy was neither too hot nor too cold.

The Mental-Health Consequences of Unemployment (jdargis)

A new poll from Gallup attempts to gauge the consequences of those losses and finds that "unemployed Americans are more than twice as likely as those with full-time jobs to say they currently have or are being treated for depression—12.4 percent vs. 5.6 percent, respectively." Moreover, for those who have been unemployed for 27 weeks or more (the "long-term unemployed," currently numbering 3.4 million people), the depression rate is 18 percent, nearly one in five.

Doug Casey: US in Eye of ‘Gigantic Financial Hurricane’ (Herman J.)

“It’s my opinion, that perhaps by the end of the year, certainly by the middle of next year, we will go into the trailing edge of the hurricane,” he said. “It’s going to last much longer, be much more serious and be quite different than the unpleasantness we remember from 2008 and 2009.”

U.S. Researchers Open Door To Plastics Replacing Hot Lithium In Batteries (James S.)

Lithium has long been the material of choice for high-performance, long-lasting batteries. It’s the lightest known metal and can hold the most electricity. The downside, as any laptop user knows, is that they can overheat, even to the point of bursting into flames.

IEA Says the Party’s Over (James S.)

The International Energy Agency has just released a new special report called “World Energy Investment Outlook” that should send policy makers screaming and running for the exits—if they are willing to read between the lines and view the report in the context of current financial and geopolitical trends. This is how the press agency UPI begins its summary.

Jobless Claims in U.S. Increased Last Week to 317,000 (jdargis)

Consumers took a break in May after a three-month surge in shopping that has underpinned growth. A 0.3 percent increase in retail sales followed a revised 0.5 percent advance that was much larger than previously estimated, Commerce Department figures showed today.

Stock-index futures were little changed after the reports, with the contract on the Standard & Poor’s 500 Index expiring this month falling 0.1 percent to 1,943 at 8:50 a.m. in New York.

Gold & Silver

Click to read the PM Daily Market Commentary: 6/11/14

Provided daily by the Peak Prosperity Gold & Silver Group

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1st quarter worse than previously published

U.S. Economy’s First-Quarter Contraction Could Be Even Worse Than You Thought -- The U.S. economy may have contracted more than previously thought during the first three months of 2014, private economists said Wednesday based on new health care-sector data from the government. Some analysts said economic output may have contracted at a 2% pace in the first quarter. That would be its worst performance since the recession.  The Commerce Department’s latest estimate of gross domestic product, the broadest measure of output across the economy, said GDP shrank at a seasonally adjusted annual rate of 1% in the first quarter. A revised estimate will be released June 25, and it could show an even larger contraction. That’s based on the Commerce Department’s Quarterly Estimates for Selected Service Industries report for the first quarter, released Wednesday. It showed that revenue in the U.S. health-care and social-assistance sector fell 2% in the first quarter from the fourth quarter of 2013, not adjusted for seasonal variations or price changes. Hospital revenue fell a seasonally adjusted 1.3% from the prior quarter. The Commerce Department’s last GDP report, though, said inflation-adjusted spending on health-care services surged to a seasonally adjusted annual level of $1.848 trillion in the first quarter from $1.808 trillion in the fourth quarter of 2013. That incorrect estimate for spending on health care boosted overall GDP growth by 1.01 percentage point, keeping the 1% contraction from being even worse.

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