Tag: Quantitative Easing

Out of Egypt: Protests are Headed for America

Filed in BP, Debt, frontline, Gold, Gold Market, inflation, Lear, o, Quantitative Easing by on February 12, 2011 0 Comments
Out of Egypt: Protests are Headed for America

Don’t think that what happened in Egypt can not possibly happen here. Because the truth is when a big swath of the population is no longer served by the festering status quo, they wake up one day and decide not play ball after all. And once that faith is lost, it is gone forever. I actually think we are much closer to that moment than most people would think. You see, I work all day in an office full of 20-somethings. They are a diverse bunch. They’re smart and they work hard. But the one thing they all have in common is they are stuck on a ladder with no where to go.  Buried in debt from student loans and various other sources, they are trapped in time unable grab the next rung. Among them the most common refrain is: “I can’t” They would like to further their education…but they can’t. They would like to buy a house…..but they can’t. They would like to buy a car….but they can’t. They would like to have children….but they can’t. There’s more to the list…but you get the picture. Of course, when you look at their list of wants you realize that what they want is no different than what everyone else has wanted at one time or another. The difference is in their world it’s a lot harder to attain—if not impossible in some cases. The reason for this is pretty simple: The cost of their dreams can’t be met with their incomes and adding more debt for them is not much of an option . Everything single thing on their list and then some simply costs too much. As a result, they go without. One day I suspect they will take to the streets. By the way, here’s a great video I found this morning on zerohedge.  It’s your life according to the government… The status quo cannot possibly be maintained. Related Articles: Government Run Amok: Unintended Consequences Trouble in Retail: Three Charts from the Frontlines How Uncle Sam Fiddles with the Figures Quantitative Easing For Dummies To learn more about Wealth Daily click here Advertisement Samurai Super Alloy It was the secret ingredient that turned an ordinary sword into the legendary Samurai Katana — the deadliest weapon before the arrival of modern rifles. Today, it’s crucial to the $987billion/year global steel industry… And the world’s supply is quickly running out. Find out how a tiny mining company sitting on one of the last untapped deposits of this metal could hand you 2682%  — in the next 12 months! Out of Egypt: Protests are Headed for America originally appeared in Wealth Daily . Wealth Daily is a free daily newsletter featuring contrarian investment insights and commentary.

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Recovery Chronicles: Tales From the Modern Food Line

Filed in BP, frontline, Gold, GOld juniors, inflation, Lear, o, Quantitative Easing by on February 4, 2011 0 Comments
Recovery Chronicles: Tales From the Modern Food Line

Here’s one from the recovery chronicles: food stamp usage is up 14% from last year. Today, the Supplemental Nutrition Assistance Program (SNAP) serves about one in seven Americans. Of these, about half are children USDA officials say. From the Wall Street Journal by Sara Murray entitled: Some 43 Million Use Food Stamps “Nearly a year and a half into the economic recovery, some 43.6 million Americans continued to rely on food stamps in November. More than 14% of the population drew food stamps in November to purchase groceries as high unemployment and muted wage growth crimped budgets. The number of recipients was up 0.9% from October, according to the new report by the U.S. Department of Agriculture. Compared to a year ago, the number of people receiving food stamps was up 14.2%. In both Washington, D.C. and Mississippi more than a fifth of residents received food stamps — the highest recipiency rates of any state. But demand has grown stronger in the past year in a handful of other states that recorded significant increases on a per capita basis. In New Mexico, 19.4% of the population tapped into food stamps. That’s up 3.2 percentage points from the same month a year ago, the largest increase for any state. Idaho reported a similar jump: 14% of residents received food stamps, up 3.1 points from a year ago. Washington, D.C., Florida, Delaware and Texas all experienced similar year over year increases.”  For comparison sakes here’s how the food stamp roles have grown

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Anticipating a Budget Deficit

Filed in AIG, AT T, BP, Debt, o, Quantitative Easing, silver by on February 2, 2011 0 Comments

I am constantly amazed at the number of people who think that a budget deficit is the same thing as the total federal deficit, which it ain’t. Actually, I remember one time early in my career where I was so desperate to cover up the results of my own incompetence that I tried to exploit Anticipating a Budget Deficit originally appeared in the Daily Reckoning . Recent articles featured in The Daily Reckoning include the impact of quantitative easing and US debt .

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The Great American Snooze Button

The Great American Snooze Button

I’ve been known to hit the snooze button on occasion. My long-suffering editor can attest to that. Just ten more minutes, then I’ll… Imagine if each press of the snooze button made the next BEEP-BEEP-BEEP happen a little bit sooner than the last. Eventually, you wouldn’t be able to sleep at all. Time to either wake up or smash the alarm clock. America has been hitting the fiscal snooze button for the last 30 years. The alarm is getting shriller these days, and it beeps more often than it used to. So, what’s the plan? In essence: smash that stupid alarm clock to bits and worry about consequences later. Social Security, and pensions, and Medicare, oh shit my! In 2011, Social Security will pay out $130 billion more in benefits than it collects in revenue. The program’s deficit this year would have been a paltry $45b, if not for Obama’s one-year deal lowering SS payroll deductions from 6.2% to 4.2%… The CBO admits the system will be completely drained by 2037. But even their own analysts don’t buy that, as reported by the Christian Science Monitor . By the way, did America really enact a tax break that lasts one year ? Yes, we did. The social security payroll tax cut is a 12-month deal — for now. Short-sightedness is at all-time highs in D.C. Now don’t get …

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Bank of America (NYSE:BAC) on U.S. Dollar, Euro

Bank of America Corp.’s (NYSE:BAC) head of Americas G- 10 currency strategy at Bank of America Corp. in New York, Paresh Upadhyaya, commented on the relationship of the U.S. dollar and the euro after the U.S. payrolls report, which was considered disappointing. Upadhyaya said, “Overall, the tone for the dollar should be stronger as most of the data has been coming in on the stronger side and

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It’s Funny How We Get The Perfect Job Number

It’s Funny How We Get The Perfect Job Number

Earlier this week on January 5th, 2011 the payroll processing company ADP reported that the U.S. economy had added 297,000 jobs. The economists went wild raising the expectations of today’s government non-farm payroll report to over 200,000 jobs. However, today the job report was released at 8:30 am EST and the U.S. Labor Department only reported a headline number of 103,000. This is quite a disappointment for all those who thought the economy was adding much more jobs as the ADP report suggested. It is important to note that all of these reports cannot be trusted. Even in modern times with all the wonderful technology in the world it seems that the readings when it comes to economic data should be taken with a grain of salt. All that really matters is if the Federal Reserve Bank will continue with it’s U.S. Treasury purchases called QE-2. As long the central bank continues to create capital reserves by buying bonds and keeps the fed funds rate at zero percent the economy will inflate overall. That has been seen throughout history. Investors should just look at when the former Federal Reserve Bank Chairman, Alan Greenspan, lowered the fed funds rates(overnight lending rate to large major banks) to 1.00 percent in 2002. The economy inflated higher for five straight years. However, once interest rates began to increase the economy had already created one of the biggest bubbles in recent times. That was obviously the housing and credit bubble of 2007-2008. We can only wonder how bad this bubble will be that is being created now? The Federal Reserve Bank tells us that there is no inflation. However, the economies in Asia are trying to fight inflation. If this is a global economy how could one part of the world have inflation and the other part have no inflation? It is simply because of the labor market and the fuzzy math that is used by the economists. When a country has high unemployment there is never signs of inflation. However, if one looks at the price of copper, gold, silver, gasoline, oil, or food they will easily see that there is inflation. Leading commodity stocks such as Freeport McMoRan Copper & Gold Inc.(NYSE:FCX), Southern Copper Corp.(NYSE:SCCO), Silver Wheaton Corp.(NYSE:SLW), and many others are trading at or near all time highs. You see today’s weaker than expected job number gives the Federal Reserve an excuse to say that we need to continue their quantitative easing program. Remember quantitative easing is the catalyst for the rally as traders and investors continue to buy the dip. If today’s government job report would have been near 300,000 new jobs the U.S. Dollar would have spiked along with higher U.S. Treasury yields. This would have caused a major sell off. Therefore, you can see how a not so good or even a disappointing job number can be good for the stock market. It’s simply amazing how this all works. Nicholas Santiago InTheMoneyStocks

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Money to Burn: 10% of Cash Supply to be Destroyed

Money to Burn: 10% of Cash Supply to be Destroyed

  Here’s a story that is sure to leave the gold bugs shaking their heads. It seems as though Uncle Sam can’t even print his own fiat currency without screwing it up. A full 10% of all existing U.S. currency is going to be quarantined and burned at a cost of over $120 million. From Yahoo News by Zachary Roth entitled: Government can’t print money properly   “ As a metaphor for our troubled economic and financial era — and the government’s stumbling response — this one’s hard to beat. You can’t stimulate the economy via the money supply, after all, if you can’t print the money correctly. Because of a problem with the presses, the federal government has shut down production of its flashy new $100 bills, and has quarantined more than 1 billion of them — more than 10 percent of all existing U.S. cash — in a vault in Fort Worth, Texas, reports CNBC. “There is something drastically wrong here,” one source told CNBC. “The frustration level is off the charts.” Officials with the Treasury and the Federal Reserve had touted the new bills’ sophisticated security features that were 10 years in the making, including a 3-D security strip and a color-shifting image of a bell, designed to foil counterfeiters. But it turns out the bills are so high-tech that the presses can’t handle the printing job. More than 1 billion unusable bills have been printed. Some of the bills creased during production, creating a blank space on the paper, one official told CNBC. Because correctly printed bills are mixed in with the flawed ones, even the ones printed to the correct design specs can’t be used until they ‘re sorted. It would take an estimated 20 to 30 years to weed out the

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Ultra-Deepwater Rigs are Back

Ultra-Deepwater Rigs are Back

Ben Bernanke, head of the Federal Reserve, went on 60 Minutes over the weekend and talked about a third round of quantitative easing (QE3).  I’m of the opinion that you can’t spend your way out of a debt crisis, but Ben believes in “priming the pump” by spending — or loaning to banks, anyway. And by banks, we mean the massive trading companies that got us into this mess to begin with. Bernanke thinks that by giving money to banks so that they can loan it will spur small business growth and other spending… The problem is that money is like your ex-girlfriend; it goes where it is treated best. And right now, the market believes that the commodity super-cycle spurred by emerging market demand and inflationary fears will continue to push higher. Unintended consequences As I write this, oil is running just shy of $90 a 26-month high. Gold popped up to $1,424 — a near record. Silver is at a 30-year high. According to the Associated Press , Bernanke said he hopes the Fed’s bond buying will lower bond yields and encourage investment in stocks, boosting business activity and economic growth in the country. But what is happening is that — at a time when we need inexpensive commodities to lower costs — we have record prices in coal and gasoline will average more than $3.00 a gallon by Christmas. If you remember the sharp rise in commodity prices (most notably oil to $147 a barrel) crushed the U.S. economy back in 2008. The low price of oil ($33bbl) coincided with the bottom in March of 2009. (Oil is black, SP500 is gold in the chart below):   The shakeout in commodities also took out a host of highly-leveraged hedge funds as they got crushed with margin calls. The New York Times reported in March 2009 that more than 200 hedge funds went under with losses of $84 billion. In December 2008, I recommended buying four gold companies that were trading at less than cash at the time. This was back when gold miners were sold off to a negative market value during a severe economic crisis, and when the gold price was moving up as a safe haven. That is the power of speculators in the commodities market.   And right now, the speculators are being fed free money from Ben…

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Robert Prechter Explains The Fed, Part I

November 19, 2010 The world’s foremost Elliott wave expert goes “behind the scenes” on the Federal Reserve The ongoing financial crisis has made the central bank’s decisions — interest rates, quantitative easing (QE2), monetary stimulus, etc. — a permanent fixture on six-o’clock news. Yet many of us don’t truly understand the role of the Federal

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Moody’s (NYSE:MCO) Upgrades China’s Credit Citing Strong Economy

Moody’s (NYSE:MCO) upgraded China’s debt today from A1 to Aa3, saying the sound balance of payments and the strong economic performance of the company has found support and will continue on, generating a positive outlook for their credit. Moody’s senior vice president Tom Byrne noted, “The record of the past year demonstrates that China’s policy response to the 2008 crisis has been effective.

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Market Wrap-Up for Nov.9 (ABX, AU, MOS, CF, WFC, PNC, more)

There was a recent CNN/Opinion Research Corporation survey out that said 75% of Americans are unhappy with the direction of the country. The Federal Reserve’s move for a second round of quantitative easing is intended to help keep stock prices going higher, and interest rates locked in at historically low levels. You would think that the sentiment would be starting to improve somewhat, since we are up over 85% on the S&P since the March 2009 lows, but yet many Americans are still unhappy with how things are shaping up for the economy. I continue to believe efforts to create new jobs are going to be the real foundation of what will truly turn sentiment around. The ironic thing for corporate America and investors is that the current situation is actually helping companies regarding profits. There is a “do more with less” mantra that has taken shape across numerous industries. Margins remain robust for plenty of companies we follow, helping push stock prices higher, as well as dividend payouts and stock buybacks (not our favorite use of cash, but Wall Street goes gaga over it). The best thing we can do is to continue to invest in companies that will continue to thrive if things remain as they are now. Practice fiscal discipline as much as possible. If you can hustle more and make some extra coin at work, don’t hesitate to grab the opportunity to make some extra bucks. You can also try starting your own business. There are plenty of ways to do so without putting the family’s financial foundation at risk. Many of you have skills that can lend itself to some freelancing/consulting opportunities. Aside from that, the retail space continues to be an area that needs good talent to fill in the gaps. Getting a second job should not be overlooked if you can find a way to juggle your career and family obligations. I know that…

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Gold Prices Today Explode in a Delayed Reaction to Fed’s QE

Everyone was waiting to see how long it would take the market to punish the U.S. dollar and reward gold and silver investors, and it happened today, as prices have soared to over $1,380 an ounce, another new record.Gold prices before the anticipated announcement had been more benign than expected, and even though no one believed there wouldn’t be another round of quantitative easing by the

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