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An Egyptian Firebrand Away from $400 Oil

Investors are remarkably sanguine about the events in Tunisia and Egypt… Oil actually fell yesterday to $88.27. The Dow has been on a hot streak and is up again today — as it has been for months — to 12,149. History suggests events in the Middle East go from bad to worse. According to the Democracy Index put out by The Economist , there are no “established democracies” in the region. Israel is listed as a “flawed democracy.” Lebanon and Turkey were listed as “hybrid regime,” along with Palestinian territories, Pakistan, Armenia, and Iraq (Lebanon is now run by Hezbollah). The rest are categorized as “authoritarian regimes.” The last free vote saw Hamas sweep the Palestinian elections in 2006. Hamas started as an offshoot of the Muslim Brotherhood in Egypt. On gaining power, they started lobbing rockets into Israel. In 2007, the Battle of Gaza was fought between Hamas and the Palestinian security forces. Hamas is listed as a terrorist organization in most G-20 countries. In the aftermath, Israel and a Hosni Mubarak-ruled Egypt imposed an economic blockade on Gaza that is still in effect. Population and scarcity Jack Andrew Goldstone points out in his book, Revolution and Rebellion in the Early Modern World , that all revolutions from the French to the Russian, from China to Japan, occur where there is a rising population and diminishing resources coupled with an inflexible ruling party. (Note: The population in Russian doubled between 1850 and 1913.) Today, the Arab world has the fastest growing population on earth— and the youngest. In Yemen, the average age is 17.9 years with a birth replacement rate of 2.71, which puts it at number 23 in the world. The United Arab Emirates is in fourth place with 3.56, Kuwait is fifth with 3.50, the Gaza strip is six with 3.29. Libya, Chad, Egypt, Oman, Syria, and Iraq all make the top quintile. These young people will be the next rulers of the largest oil-producing region within the next ten years — mostly because all of the current leaders are in their 80s… with the exception of Qaddafi…

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How to Replace Austerity with Freedom, Independence and Prosperity

The Economic Collapse Blog has this list of examples of how European-style “austerity” is already hitting the U.S., including cities closing schools and fire stations, and states eliminating whole state agencies and raising taxes. That includes the state of Illinois whose legislature has passed a “temporary” 66% personal income tax hike that the Democrat governor will sign. Rest assured, this income tax hike will be as “temporary” as the one in Massachusetts , still in place since 1989. Such austerity measures may lead to the same kind of social unrest Europeans have been experiencing. The Economic Collapse Blog concludes, We are entering a time of extreme financial stress in America.  The federal government is broke.  Most of our state and local governments are broke.  Record numbers of Americans are going bankrupt.  Record numbers of Americans are being kicked out of their homes.  Record numbers of Americans are now living in poverty. The debt-fueled prosperity of the last several decades came at a cost.  We literally mortgaged the future.  Now nothing will ever be the same again. To say that “nothing will ever be the same again” is just pessimistic and unnecessary. We actually can return to the prosperity of the past, by replacing debt and austerity with freedom and independence. There is no need for Americans to suffer through what European countries are suffering, because nearly all the problems we face are caused by governmental intrusions into many aspects of our personal and economic lives — intrusions by federal, state and local governments. Regardless of the good intentions that the welfare and military socialism statists have in justifying their use of compulsory government powers, what America needs is to cut the shackles of State-imposed dependence, restrictions, regulations, taxation, all those policies of moral relativism that involve violations of the Rule of Law: theft, trespass, denial of Due Process, and other acts of State-initiated criminal aggression. Freeing Americans includes repealing all forms of intrusive presumption-of-guilt regulations and restrictions that are in place having nothing to do with whether any individual is suspected of any crimes against others. Regulations are before-the-fact demands by the government that presume the individual and one’s business guilty, in which one must submit one’s private personal or financial information to the government to prove one’s innocence. Government regulations and arbitrary restrictions are literally searches and seizures by the government of information that is none of anyone else’s business, and effect in the stifling of everyday citizens’ growth and prosperity. Ending all personal income taxes , corporate taxes, estate taxes, and capital gains taxes frees people who own or share in the ownership of businesses — i.e. employers and prospective employers — to invest in their own research and development and in the expansion of their businesses, which is the genuine force behind jobs creation, in both blue collar and white collar sectors. Ending all personal income taxes frees people to explore their own ideas and inventions, and to start their own businesses that will employ more people and advance society further. Also…

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How Would You Grade President Obama’s State of the Union Speech?

Filed in gld, Gold Spot Market, o, obama, sov by on January 26, 2011 0 Comments

The president called this time “our generation’s Sputnik moment.” “Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik¸ we had no idea how we’d beat them to the moon…” Obama said. “But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.” Were you inspired?

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Is the ENSO a nonlinear oscillator of the Belousov-Zhabotinsky reaction type?

Filed in Bank Gold, Gold, Gold Spot Market, o, sov by on January 25, 2011 0 Comments
Is the ENSO a nonlinear oscillator of the Belousov-Zhabotinsky reaction type?

Alternative title: “Standing on the shoulders of Giant Bob” Guest post by Phil Salmon Introduction One of the themes to emerge from the climate debate here on WUWT, concerns “chaos” and nonlinear system dynamics and pattern. Anyone acquainted at all … Continue reading →

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Why Theft Is Never OK, Even When the Government Does It

Filed in BP, deflation, economy, lead, New Gold, o, sov by on January 19, 2011 0 Comments

Yesterday was the morning of my 35th anniversary on the planet. The well-wishing phone calls started early. I missed the first — from my younger sister, who is always the first to call on my birthday — and made a note to call her back later. I was awake enough to take the second call from my dad. “I realized this morning that if it’s been 35 years since you were born,” he said, “then I must be a little older than 35. I’m really just calling to remind you that you’re getting old too. I need the company.” Thirty-five is one of those milestone birthdays…the neat halfway point between the big three-oh and the bigger four-oh. In my case I got to look around and panic: I hadn’t gotten started on all those grown-up things you were supposed to start by 30 and have nearly completed by 40. Grown-ups are usually on their second or third spawn by this age. They have cars and mortgages. I’d only recently got as far as making my own meals. But at least I’d gotten exposed to enough good reading to understand that no one owed me anything, that I had to earn everything that I wanted. I feel more grown-up than most when it comes to lacking a sense of entitlement. Not only am I not entitled to goods and services; I also have to earn the goodwill of those whose help I’d count on in case disaster struck and I hadn’t prepared sufficiently. I had to be a good son and a good brother…a good friend and a good neighbor. Even if I had no loving relatives or concerned friends to rely on, however, I still wouldn’t demand the tax-born kindness of strangers. Any charity I would receive would have to be voluntarily given. And there should be enough shame involved to keep me from growing to rely on it forever. This is not a popular sentiment these days. Every effort is made by the intelligentsia and the media to convince people of the opposite… We are all children, they tell us. We need to be taken care of. And we are all owed something by someone else. That’s what governments are really for. They guide. They prohibit. They shuffle earned income to grasping hands. And they’re proud of it… Paul Krugman, cheerleader of the state writes: “One side of American politics considers the modern welfare state — a private-enterprise economy, but one in which society’s winners are taxed to pay for a social safety net — morally superior to the capitalism …

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Picture du Jour: U.S. at risk of losing its AAA status?

While the debate about the U.S. debt ceiling is taking place, Société Générale is of the opinion that a downgrading of the country’s sovereign debt is just a matter of when and how fast interest rates on its borrowings rise.

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Afghanistan, Iraq, Collateral Damage and the Banality of Killing

Filed in AMAG, BP, deflation, New Gold, o, sov by on January 14, 2011 0 Comments

The standard explanations for the Arizona killings are now being set forth, such as widespread violence in America and right-wing extremism. I’d like to weigh in with another possible factor, one that I can’t prove but one that I think Americans ought to at least consider: the fact that killing has now become an accepted, essential, normal, and permanent part of American life. No, I’m not referring to the widespread gun violence in America that liberals point to as part of their gun-control agenda. I’m not even referring to the widespread violence that accompanies the decades-long drug war, especially in Mexico. I’m instead referring to the U.S. government’s regular killing of people thousands of miles away in Afghanistan and Iraq, killing that has now gone on regularly for some 10 years and that has become a fairly hum-drum part of our daily lives. Six people were killed and 14 were injured in the Arizona shootings, including a woman who was shot through the head and a 9-year-old girl whose life was snuffed out. Everyone is shocked over the horror, which is detailed on the front page of every newspaper across the country. But let’s face it: Such killings go on every week in Afghanistan and Iraq and have for some 10 years. Parents, children, brothers, sisters, cousins, grandparents, friends, brides, grooms, and wedding parties. People are killed in those two countries …

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Soybean Bulls Fade a Bit on Some Early Bearish Clues

Filed in AMAG, Gold, Gold Investing, Gold Prices, o, sov by on January 8, 2011 0 Comments
Soybean Bulls Fade a Bit on Some Early Bearish Clues

March soybean futures at the Chicago Board of Trade have backed off from Monday’s contract and two-year high of $14.09 a bushel. Profit-taking has been featured and no serious chart damage has yet been inflicted. However, the soybean bulls have faded a bit and there are some worrisome early technical clues that have developed this week. Price action on Monday and Tuesday produced and confirmed a bearish “key reversal down” on the daily bar chart for March soybean futures. Prices Monday hit a fresh contract high and then promptly backed off to close lower, near the session low and score a bearish “outside day” down on the daily chart. An outside day down occurs when a trading session’s high is higher and low is lower than the previous session’s trading range, with a lower close. A key reversal down occurs when a market makes a fresh for-the-move high and then backs off to score an outside day down, with follow-through selling pressure the next trading session to confirm it. The Moving Average Convergence Divergence technical indicator overlaid on the daily bar chart for March soybean futures is just now producing a bearish line crossover signal, whereby the MACD line crosses below the “trigger” line of the indicator. Importantly, however, near-term and longer-term price uptrends on the charts are still firmly in place, which at present suggests the present price downturn in March soybeans is just a significant correction in an overall price uptrend. The soybean market bulls would regain some fresh upside near-term technical momentum by pushing and closing prices back above strong overhead technical resistance at this week’s contract high of $14.09. The bean market bears would gain better downside near-term technical momentum by producing a close below psychological support at $13.00 a bushel. Stay tuned! Jim Wyckoff

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What happens when SNB is stopped out?

We have brought up the Swiss National bankers and what they have been doing for last several months by buying Euros in their attempt to weaken the Swiss Franc but the market keep pushing the Franc higher and Euro lower. A while back SNB kneed down to the market in a statement by the central bank in which the bank stated they wouldn’t buy Euros anymore. Well, SNB banker did pause for a while and guess what? Swiss Franc actually weakened instead of gaining strength versus the Euro. Perhaps it was that very market move which forced the SNB bankers to get to the kill again. What amazes us is that Swiss take pride in banking and thus are known as the smartest of bankers, but what have they been doing since past year? Are they not worried about their jobs? For we have stated several times in the past we’d hate to be at the helms of SNB when it had such a large exposure of Euros. A year earlier the pair stood at 1.48 whereas today and as we write it stands at 1.249s. The interventions efforts which we can imagine would have been discussed and deliberated upon many many times in closed rooms shall prove to the stupidest decision the bank has ever taken. This reminds

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Bloomberg Sues Trichet & European Central Bank

Bloomberg News filed a lawsuit against the European Central Bank, seeking the disclosure of documents showing how Greece used derivatives to hide its fiscal deficit and helped trigger the region’s sovereign debt crisis. Video — Dec. 22 Bloomberg — Matthew Winkler, editor-in-chief of Bloomberg News, discusses the news agency’s lawsuit against the European Central Bank. —

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Gold and Silver Prices to Spike Next Week

Gold and Silver Prices to Spike Next Week

Gold and silver prices have remained volatile in both directions since October. But indications from the COMEX show suggest we may see a spike in these precious metals prices next week… As prices moved higher over the past two weeks, strong bouts of profit taking have hit the gold and silver markets in each instance, stalling the next attempt to hit another new high. World Gold and Silver Demand World investment demand for gold has increased 250% in the past ten years. Investment demand for silver has skyrocketed 522% since 2007. Sales of official gold coins (like the American Gold Eagle) have increased 618% since 2007. World governments are hoarding silver; official sales have plummeted 83% in the past three years. Gold demand for ETFs has increased 20,470% since 2002. Above-ground silver supplies dropped 86% last year. Industrial demand for silver has increased over the past decade, despite a 236% increase in prices. On the downside action over the past two weeks, strong buying support has come in as precious metals prices looked like they were going to sell off— thus our current holding pattern in gold and silver prices. This will change to the upside within the next two weeks as major buying of physical metal will need to take place in order to meet contractual obligations on the COMEX before December 31, 2010. Contracts for gold and silver December futures that demand physical metal must be met by then. But there appears to be a significant shortfall in the actual physical metal required to meet these demands — especially in silver… If these contractual obligations are not met by the 12/31/10 deadline, then we could see a default scenario, which would drive the metals prices even higher and cause great instability for other markets as well. This potential default is due to the fact that JP Morgan Chase, the largest fractional stock holder of the Federal Reserve, has been wildly shorting silver and is now caught between a rock and a hard place. Word on the street is that JP Morgan Chase has opted to go massively long copper in an attempt to hedge their losses in silver, which could be enormous. This is…

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Sell, Sell, Sell

Filed in BP, earnings, economy, Gold, GOld juniors, mongolia, Netflix, o, sov by on December 20, 2010 0 Comments
Sell, Sell, Sell

Here it is, the end of another fantastic year. The NASDAQ is up 26% over the last 52 weeks, the S&P500 is up 24%, and the DJIA is up 20%. Heck, it’s been a great year at Crisis & Opportunity as well. Readers have seen gains of 759% in a small Mongolian oil company, 52% on a cruise ship in a week, and 251% gains on a safety syringe maker. Lets face it: greed is back. The speculators have returned and the fast money is seeking risk. Froth is back There is no better example of this froth than the hot Chinese IPO’s Youku.com. Called the “Netflix of China,” it returned 161% on the first day. All sorts of companies are running. New Energy Technologies (NENE.OB)— one of Jeff Siegel’s picks — went from 0.31 to $3.29 in a month. And lastly, one of my garbage stocks, Madcatz (ASE: MCZ), a purveyor of video game accessories, shot up 250% in a few weeks. That type of momentum chasing doesn’t happen in bear markets; in fact it’s more indicative of a top. I’ve written before that this market is setting up just as it did in 2004. We are three years after a massive market correction. The Fed and Congress are doing everything they can to shoot money into the economy. We’ve just had a major stock market rally similar to 2003, and the vast spectrum of negatives from housing to jobs seems to be getting better… Here is what 2004 looked like: There’s a chart that will give you indigestion on the way to a 10% gain. Every rally was sold hard, blowing out the longs. Every dip reversed strong destroying the shorts. Double dip was the dominant fear. And every sell-off got run over by easy money from the Fed. Looking at this chart, there is no easy way to tell when a …

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