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"Get this... the Pentagon is now trying to sell the sheeple
on the idea that the Bankster-Gangster heist of 2008 was not
the "(S)quid Pro Quo" systematic, criminal looting of the
the financial system accomplished by repealing Glass-Steagall,
by arm-twisting the SEC to allow Wall Street to self-regulate
and lift leverage limits, by turning Fannie Mae & Freddie Mac
into a toxic waste dump for their fraudulent mortgage paper,
and by unleashing the derivatives golem via the Commodity
Futures Modernization Act..."
In a word- BULLSHIT
foxy- After the indictment was announced Alex resigned as president of the company. News to that effect was released, however in the same release it was stated he would be kept on as a consultant. If that is still the case I don't know. He is now involved with some sort of barter website. I tried to get more info from that company on the extent of his involvement but my requests went unanswered. Not surprised at all. Many people would advise you to run, not walk, away as fast as possible from anything Alex Kanakaris is involved with. As far as WiFi TV, it was a good idea before Twitter and Facebook were even thought of. From the filings (unaudited) I have read Alex was was paying himself so much to support his lifestyle that there was too little left over to give WiFi TV a chance to make it. Last filing listed an accumulated deficit of $90 million. It seemed Alex's main income came from selling stock and reverse splitting it 5 or 6 times in as many years. That is all history. New management is in control now. What they will do is anyone's guess. I don't own any stock in this company but have watched it over the years as a decade ago I bought some for 1¢ and saw it rise to $7. That kind of return does make one a little sentimental, LOL.
.........al
from Jim Sinclair, new FINRA rules in effect tomorrow:
Dear Friends,
Between now and Monday, February 28th be prepared for panicked short sellers who cannot make delivery to try every trick in the book to buy back their short positions.
The following is information from Dr. Jim Decosta:
Here is the URL:
http://www.finra.org/Industry/Regulation/RuleFilings/2010/P121892?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+FINRARuleFilings+(FINRA+Rule+Filings)
Quote: There's 3 new laws gaining attention in the NSS market reform arena: FINRA 4320 goes into effect on 2/28/11. It mandates 13 day buy-ins for open delivery failures FINALLY applying to shares of non-reporting corporations. FINRA 2010-043, also starting on 2/28/11 reinstates the "short sale exempt" (SSE) marking requirements for trade reporting and the OATS system. Those MMs accessing the bona fide MM exemption from executing pre-borrows or "locates" before admittedly naked short sales must now FORMALLY acknowledge the accessing of that universally-abused exemption. Being that these trades are theoretically being made to "inject liquidity" then the excuse to hide the related trade data from the public's eyes goes out the window. You can't have it both ways and claim the bona fide MM exemption and later claim that the related trade data needs to be kept secret because it might reveal a "proprietary trading strategy".
Truly bona fide MMs that are able to legally access that universally-abused exemption cover their naked short position on the next downtick after their short sale when buy side liquidity is in need of being ejected as share prices fall. The 3rd new rule which is in effect now states that the offers and bids that MMs post must be of approximately the same size. No longer can the offers be of 1 million shares and the offsetting bid good for the minimum 5,000 shares.
The verbiage in 4320 is especially well done as it FINALLY puts the clearing firms that aid and abet this crime wave on the spot. With the FFETF, which is made up of 25 different agencies, now on the scene the transparency has increased markedly. You can imagine how critical the lack of transparency is to a crime involving selling nonexistent securities and then refusing to ever deliver that which you sold AFTER being allowed access to the funds of the investor being defrauded.
Here are the links to the rules SR-FINRA-2010-028 and SR-FINRA-2010-043:
www.finra.org/Industry/Regulation/RuleFilings/2010/P121522
Notice the part I marked in bold in the quote above:
"FINRA 4320 goes into effect on 2/28/11. It mandates 13 day buy-ins for open delivery failures FINALLY applying to shares of non-reporting corporations."
Insider Report: US Government Will Confiscate Gold When It Touches $2000
http://www.shtfplan.com/precious-metals/insider-report-us-government-will-confiscate-gold-when-it-touches-2000_02182011
It’s no secret that the US government is broke, the US dollar is crashing and losing credibility globally, and the IMF, China, France and others have publicly stated their desire to eliminate the dollar as the world’s primary reserve currency. The IMF, for example, recently issued a call to replace the Federal Reserve’s fiat paper, ironically suggesting that it should be replaced with yet another synthetic instrument known as the SDR, or Special Drawing Right. The SDR is essentially a monetary unit made up of a basket of other global monetary units that include the euro, Japanese yen, pound sterling, and U.S. dollar. Incidentally, prior to the collapse of the Bretton Woods gold-backed US dollar monetary system in 1973, the SDR was actually ‘backed by gold,’ with one SDR being worth roughly 0.88 grams of gold, or at the time, $1 US dollar.
It’s been suggested that a new SDR, which would likely include the Chinese Yuan within the basket, may also require some non-synthetic units of exchange such as gold.
We’ve learned from well known metals analyst and commentator Roger Wiegand, in an email to silver analyst David Morgan which was subsequently published in Morgan’s latest Silver Investor newsletter available only to subscribers, that several of Wiegand’s high level inside sources have reported that the puppeteers behind the US government, in order to facilitate a move into a new world currency are considering, or may have already begun moving forward with, a plan to confiscate gold and silver from the American public.
The following “Red Alert” was sent by Wiegand to other precious metals experts and analysts and is republished verbatim:
via Sherri Questioning All:
Editor: There is a plan to use the IMF (AKA US Treasury and Wall Street) to be the front man for the new world order and one currency.We also got disturbing news yesterday from an impeccable source that when gold touches $2,000 it’s confiscated in the USAfor about $200. Then it’s to be reissued by the Treasury for $10,000 per ounce to back the new IMF world currency using SDRS in 2011. Large physical gold is being moved to Canada.
We’ve previously commented on the possibility of gold confiscation and other steps that may be taken by our financier controlled government in the event that gold does reach certain thresholds. Reaching these new thresholds, for example $2000 or $5000 per ounce, would suggest that the US dollar has likely crashed or begun a final collapse into oblivion, at which point, all credibility for this unit of exchange will have been lost in the eyes of the rest of the world.
Will this lead to confiscation? Even David Morgan himself, in a recent Youtube interview, suggested that confiscation in the traditional sense was “ridiculous” and an argument that he doesn’t buy.
Confiscation, however, may happen in other forms, as has been suggested by trend forecaster Gerald Celente and precious metals expert Jerry Western.
Celente, who has been forecasting $2000 gold for years, says that governments will intervene if the price gets too high:
We are projecting gold to go to $2000. It can go way higher, but we think that’s going to be the limit because the world governments will do something to push the price down.
The free market will certainly value gold appropriately over the long-term, but in the short-term we cannot underestimate the power of interested banking conglomerates and their marionettes within the halls of Congress and the White House to force the price of gold to whatever value they choose through the use of price controls, much like governments have attempted to do with things like rents and food in various parts of the world throughout history. In the case of Mr. Wiegand’s red alert email, it could be as low as $200 per ounce.
In his timely book Got Gold? Get Gold! covering everything you ever needed to know about precious metals, author Jerry Western writes:
So, will it happen again? I’d have to say overtly, probably not. Never say never, but I believe that covertly it has already begun.
Mr. Western suggests that, while the government will not overtly confiscate, as they did in 1933 when the US dollar was backed by gold, there are other ways that the financial powers that be, who essentially own our government, will strip the people of their precious metals.
…there’s the matter of gold and silver Exchange Traded Funds. Many of these funds, including the largest, are thought by many informed individuals, not to hold the metal they are purported to. At some point, if they don’t have the metal, they will default on their obligations to shareholders. Those shareholders who thought they owned gold will not…They will have had their gold taken from them. Confiscated.
The two largest gold and silver ‘backed’ commodity ETFs currently have a total of nearly $70 billion in market capitalization. If the gold and silver aren’t there, as the fund managers claim, then if and when investors start requesting delivery of the physical metals, the funds will crash in the style of Ponzi and the paper representing their physical holdings will become worthless.
The other real possibility will be confiscation through taxes, writes Western:
The final implementation of confiscation will probably be in the form of confiscatory taxes. If taxes rise to 90% on any profit I must report, then it will be discouraging and not worth the effort to hold the metal.
With the passage of President Obama’s health care bill, the American people found out, after the fact as usual, of the new 1099 requirements which will force gold/silver merchants to declare all precious metals transactions over $600. Thus, the mechanism for tracking and taxing even small cash transactions has already been put into place.
We cannot, however, dismiss outright the suggestion that precious metals will be physically confiscated from the people. The reasoning behind the 1933 confiscation and ban on owning gold until the mid 1970's was primarily because the US dollar was backed by gold. One US dollar represented a specific amount of gold, 0.888 grams in fact. Today, no such backing exists, and gold has been called a relic of the past by modern day monetary experts.
However, if the IMF gets its wish, and it very well may if the US dollar’s long term plunge continues unabated, then gold will become a part of the new world reserve currency unit, currently being referred to as the SDR.
If the United States is to retain a portion of that SDR basket, we will not be able to do it with our current monetary unit, the Federal Reserve Note, and a new currency domestically would be required. Sure, it may still be called the dollar, but it will likely need to be pegged to some physical asset, at least in part, for it to have any credibility globally and within the SDR basket. This means that the government is going to need to get its hands on some gold. There are supposed to be tons of it in Fort Knox, but we really don’t know because no accounting of those assets have been done for some 50 years. In the event we don’t have as much gold as the Federal Reserve says we do, then those precious metals are going to need to come from somewhere.
For this reason, we can’t dismiss the idea that confiscation may become reality.
So, if you’ve taken our past advice and hold physical precious metals, we recommend looking into some creative ways of making sure they don’t exist if someone ever comes knocking.
Author: Mac Slavo
Date: February 18th, 2011
Visit the Author's Website: http://www.SHTFplan.com/
U.S. Fed's Hoenig Says U.S. Should Break Up Largest Financial Firms
http://www.bloomberg.com/news/2011-02-23/fed-s-hoenig-says-top-financial-firms-should-be-broken-up-to-avert-crises.html
Federal Reserve Bank of Kansas City President Thomas Hoenig said U.S. regulators should avert another crisis by breaking up large financial institutions that pose a threat “to our capitalistic system.”
“I am convinced that the existence of too-big-to-fail financial institutions poses the greatest risk to the U.S. economy,” Hoenig said today in a speech in Washington. “They must be broken up. We must not allow organizations operating under the safety net to pursue high-risk activities and we cannot let large organizations put our financial system at risk.”
Hoenig, the lone dissenter from every Fed meeting in 2010, has argued that the most sweeping overhaul of U.S. financial regulation since the Great Depression won’t prevent the largest banks from taking excessive risks and increasing market share. Regulators, including the Fed, are implementing the law.
“In my view, it is even worse than before the crisis,” Hoenig said at a luncheon for Women in Housing and Finance. “As well-intentioned as the Dodd-Frank Act may be, it will not improve outcomes,” he said.
The Dodd-Frank Act, named after its chief sponsors Massachusetts Representative Barney Frank and former Connecticut Senator Chris Dodd, both Democrats, created a resolution authority to unwind the largest financial institutions. It also adopted the Volcker rule, which aims at reducing the odds that banks will make risky investments and put their federally insured deposits at risk.
‘Public Purse’
“Protected institutions must be limited in their risk activities because there is no end to their appetite for risk and no perceived end to the public purse that protects them,” Hoenig said.
The Financial Stability Oversight Council, established under the legislation, is working to flesh out the Volcker rule.
“We must break up the largest banks, and could do so by expanding the Volcker rule and significantly narrowing the scope of institutions that are now more powerful and more of a threat to our capitalistic system than prior to the crisis,” Hoenig said.
The Kansas City Fed chief cited research from the regional bank indicating that large banks enjoyed savings of 1.6 percentage points on debt with a two-year maturity and over 3.6 percentage points for seven-year debt.
“In a competitive marketplace, where just a few basis points make a difference, these funding advantages are huge and represent a highly distorting influence within financial markets,” he said.
Economic Outlook
In response to audience questions, Hoenig said the Fed’s monetary policy “invites speculation” with its current pledge to keep interest rates low for an “extended period.”
Hoenig cited the case of rising farmland values. The Chicago Federal Reserve reported last week that the price of such land rose 12 percent in the fourth quarter of 2010 from a year earlier. In Congressional testimony last week, Hoenig said the Kansas City Fed has recorded farmland prices nearly 20 percent above year-earlier levels in Kansas and Nebraska.
The Fed’s policy is “encouraging asset buildups,” Hoenig said. “My point is monetary policy isn’t just about inflation,” he said, it’s also “about asset values.”
Fed presidents rotate voting on monetary policy and Hoenig, 64, will not vote this year. He joined the Kansas City Fed in 1973 as an economist in banking supervision after earning his doctorate at Iowa State University. Hoenig became president of the Kansas City Fed in 1991.
“The substantial incentives that large organizations have to take on more risk, with the government expected to pick up the losses should they incur, unfailingly lead to undue risks throughout the balance sheet,” he said.
To contact the reporters on this story: Joshua Zumbrun in Washington at jzumbrun@bloomberg.net.
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
Dan, I just read that piece a few minutes ago. If Obama won't jerk Bernanke's leash most assuredly the bond holders will, eventually.
.........al
bbotcs, can't say for sure but I'll bet the military would be put on high alert if not deployed. I would think the response would depend on how heavily armed the protesters were. For the same reason that the Japanese navy did not continue on to our west coast after Pearl Harbor, the idiots inhabiting Washington should fear we the people. Especially with what they have and have not been doing for us. If they could get off their knees in front of the bankers long enough they might be able to see a very angry citizenry watching them. JMHO
.............al
Corporations Want to Help Out
http://thevoiceofmarke.com/?cat=9
What if I told you that the Chairman and CEO of IBM, Samuel J. Palmisano, approached President Obama and members of his administration before the healthcare bill debates with a plan that would reduce healthcare expenditures by $900 billion? Given the Obama Administration’s adamancy that the United States of America simply had to make healthcare (read: health insurance) affordable for even the most dedicated welfare recipient, one would think he would have leaned forward in his chair, cupped his ear and said, “Tell me more!”
And what if I told you that the cost to the federal government for this program was nothing, zip, nada, zilch?
And, what if I told you that, in the end and after two meetings, President Obama and his team, instead of embracing a program that was proven to save money and one that was projected to save almost one trillion dollars – a private sector program costing the taxpayers nothing, zip, nada, zilch – said, “Thanks but no thanks” and then embarked on passing one of the most despised pieces of legislation in US history?
Well, it’s all true.
see video: http://video.foxnews.com/v/4366002/did-white-house-snub-fraud-fighter/
Samuel J. Palmisano, the Chairman of the Board and CEO for IBM, said in a recent Wall Street Journalinterview that he offered to provide the Obama Administration with a program that would curb healthcare claims fraud and abuse by almost one trillion dollars but the Obama White House turned the offer down.
Mr. Palmisano is quoted as saying during a taping (click here to see ) of The Wall Street Journal's Viewpoints program on September 14, 2010:
"We could have improved the quality and reduced the cost of the healthcare system by $900 billion...I said we would do it for free to prove that it works. They turned us down."
A second meeting between Mr. Palmisano and the Obama Administration took place two weeks later, with no change in the Obama Administration's stance. A call placed to IBM on October 8, 2010, by FOX News confirmed, via a spokesperson, that Mr Palmisano stands by his statement.
Speaking with FOX News' Stuart Varney, Mort Zuckerman, Editor-in-Chief of US News & World Report, said,
"It's a little bit puzzling because I think there is a huge amount of both fraud and inefficiency that American business is a lot more comfortable with and more effective in trying to reduce. And this is certainly true because the IBM people have studied this very carefully. And when Palmisano went to the White House and made that proposal, it was based upon a lot of work and it was not accepted. And it's really puzzling...These are very, very responsible people. They don't have a political ax to grind.. They are very familiar with the subject; they understand exactly what the issues are."
Given the fact that Mr. Obama’s own Centers for Medicare & Medicaid Services actuary debunked the claim that health insurance costs would diminish over the next decade and given that the budget deficits for 2010 and 2011 are in the $1.2 trillion–$1.4 trillion ballpark, the question begs to be asked: Why would Mr. Obama balk at a sure-thing savings of almost $1 trillion?
Cost projections prepared by economists at the Centers for Medicare & Medicaid Services (CMS), revealed the nation's healthcare spending, as a share of the economy, will be 0.3 percentage points higher in 2019 than estimated before the law was passed. That CMS report, published September 9, 2010, in the journal Health Affairs, also revealed healthcare spending will grow by an average of 6.3 percent each year over the next decade, whereas pre-reform projections pegged annual growth at 6.1 percent.
CMS actuaries also say that Medicare cuts mandated by the law are unrealistic and unsustainable. An April 22, 2010, CMS report about the financial and coverage effects of selected provisions of the new law estimates that about 15 percent of hospitals and other healthcare providers could lose money treating Medicare beneficiaries as a result of the proposed cuts.
And the Congressional Budget Office is projecting that the deficit for the 2010 budget year, which ended Sept. 30, will total $1.29 trillion. The Obama administration has projected that the deficit for the 2011 budget year, which began on Oct. 1, will climb to $1.4 trillion and that over the next decade, it will total $8.47 trillion.
So, again, I ask you, with the main issue being the economy, including the audacious spending habits of elected officials in Washington DC, why would Mr. Obama and his team balk at facilitating not only the saving of almost $1 trillion in healthcare expenditures, but the opportunity to affect an issue victory in the 2010 midterm election cycle?
Mr. Zuckerman concluded,
"When you are in a situation where this country is facing a huge deficit and where anybody who knows anything at all about the healthcare system knows how much waste, fraud and abuse is involved in that system...not to take this offer up, frankly, does not make sense."
Mr. Zuckerman is correct, but only to a point. It doesn’t make sense if Mr. Obama is trying to reduce waste and fraud, and make health insurance affordable for all Americans. It does make sense if those were never the goals in the first place.
As I wrote in an article titled, Cloward, Piven & Obamacare,
“...the goal of the Progressives is to crash the system; to overwhelm the system to such an extent that it fails. It is at this moment of failure that Progressives believe they can enter the situation as the “knight in shining armor.” It is at this particular moment of vulnerability that Progressives believe the American public will acquiesce to the false choice of “something is better than nothing”; to a government-run universal healthcare plan to rescue the devastated American healthcare system, a system Progressives themselves threw into chaos, courtesy of their ridiculous health insurance reform law.
“As an aside, keeping this plan in mind, it makes perfect sense that Progressives and Liberal Democrats wouldn’t waste their time reading the massive health insurance reform bill. They never intended for it to be around long enough for it to matter.”
It is one thing to be – as a good many elected officials in Washington DC are – arrogant, self-absorbed spendthrifts, so detached from the actualities of what Americans require and want from their government. It is quite another to willfully abuse the system – and the American people – in an attempt to bring about and ideological “change” – a “fundamental transformation” – of the very system of government that has made the United States the most prosperous nation in the history of the Western Civilization and the last best hope for freedom and liberty for all in the world.
In Mr. Obama’s shunning of a private sector program that would have saved our country almost $1 trillion in healthcare expenditures, presented to him as he declared a “crisis in healthcare,” he proves two things beyond any doubt: that he is anti-Capitalist and anti-private sector in nature and that he can no longer be trusted to tell the truth in both his political declarations or espoused goals.
Some thoughts on Analysts and the Silver market
I have been reading with some amusement the comments of some who seem as if their sole raison d’etre is to provide a perpetual example of folly masquerading under the supposed guise of wisdom.
By this I mean to say the comments of those who continue to deny that there currently exists a shortage of silver in the market. They cite their reasons, and offer their opinions, which I might add here, they are welcome to and should have the opportunity to voice, even when they are consistently wrongheaded and yet apparently feel under no sense of honor to modify even when proven wrong.
Let me first begin by saying that as a trader of more than two decades’ experience, there have been, and I am sure, will be, times when I have been wrong about a market. I feel no shame in admitting that – why should I, as I am a mere mortal and am not infallible. To give a recent example – I have been a bear on the US equity markets beginning back in 2008 and continuing to hold that bearish opinion until November of last year. It was not until that time that I realized that no matter what I thought about the reasons why US stocks should not be rallying, the stock market was going to continue to rally especially now that the Fed had announced a fresh QE program. The old trader’s adage, “You cannot fight the Fed” was proven to be true once again.
I might add here that I had also been wrong about the bond market for some time and was of the opinion that a falling Dollar would result in a falling bond market. That too was not the case during the credit crisis of 2008. I learned a good lesson about all that back then.
I still have my doubts about the veracity of this move higher in US equities or of its ability to endure but the fact is that the stock market is moving higher, regardless of what I think about it.
Now, as a trader I can do one of three things with this.
One – I can continue to stubbornly insist that the stock market should not be going up and take out a huge short position and continue until my trading account is no more, declaring that the US stock market should not be moving higher. At some point in the future, the market will no doubt correct and move lower at which time I will perhaps feel vindicated. The problem is that by that time I will have not made a dime off of my views and very possibly could have lost my entire trading account and with it my livelihood, although at the very end I will have the self-satisfaction of telling myself and others: “SEE, I was right all along. I told you so”. Result – I am broke and busted but feel proud and smug.
Two – I can do nothing and stay flat because while I see the market moving higher am greatly suspect of its lasting power. I will not make any money following this course of action but neither will I get hurt financially either.
Three – I can see the trend and while I greatly suspect its lasting power, can take a long position and attempt to ride that trend higher until such time I see it nearing an end. This course of action, while fraught with peril because of my own views of the market, will make me money as a trader if I employ sound money management techniques and use wisdom and do not get careless or complacent.
Here is the lesson in all this, a lesson I might add, learned the painful way through many years experience. THE MARKETS DO NOT CARE ONE BIT ABOUT OUR OPINION.
The sooner one learns this lesson, the better a trader/investor they will become.
I remember earlier in the past decade reading the reports from a rather well known and respected analyst who was consistently bearish on the copper market. Back in 2006, when copper was trading closer to $2.00, having rallied up from down near $1.40 - $1.50, he kept producing studies adamantly denying any reports suggesting that there was a tightness in the copper supply based on real fundamental supply/demand statistics. He cited reasons such as hedge funds artificially distorting the supply by taking huge sums of copper off the market and storing it in warehouses thereby creating the drawdown in stocks at the LME and in Shanghai that were being registered. He stated that copper was therefore overpriced and was primed for a fall.
This he continued doing while copper rose towards $2.50 - $2.60 pound. He was still bearish while copper went on to hit $3.00. “Still overpriced”; “No real shortage”; “Supply is being artificially reduced – the copper is still there just not in the public warehouses”, etc. all the while the price of copper kept rising. Before it all ended, copper had moved up to over $4.00 in May 2006 before it finally sold off. It then retreated all the way down to $2.40 before it turned around and went back up again reaching nearly $4.30 in 2008 before it crashed alongside the rest of the commodity complex when the credit crisis erupted.
Maybe this analyst was right; maybe he was wrong; maybe hedge funds were indeed taking copper out of storage in public warehouses and stashing it into private warehouses. Who knows and who really cares at this point? Here is the point in all this recapping. One could have followed the three options just cited.
Option one: “Well Mr. respected analyst says that copper is overpriced and should not be moving higher. Therefore I will listen to Mr. respected analyst and take a short position”. What would the result have been for the average trader/investor? Answer – the average trader/investor would have lost the entire amount invested on a short copper position if not more due to the leverage effect. Question – was this a good course of action? Answer – obviously it was foolhardy.
Option two: “Mr. respected analyst says that copper is overpriced and should not be moving higher. He is probably right because he knows more than me but I see the price chart is moving higher and therefore I will do nothing because he must be smarter than me and I must be wrong”. Question – how would that have worked out? Answer – no harm done but neither did the average trader/investor make a single dime. He is no richer or no poorer for his choice and is as well off as he was before. He has however lost a very good opportunity.
Option three: “Mr. respected analyst says that copper is overpriced and should not be moving higher. The price chart however tells me that the market does not care one whit about what Mr. respected analyst thinks because IT IS MOVING HIGHER”. I will therefore take out a long position in copper because I believe that the combined opinions of ALL MARKET PLAYERS is outweighing the opinion of one Mr. respected analyst. Question – how did this choice work out? Answer – the average trader/investor made money and profited from his action. He has increased his wealth and has used a market trend to his advantage.
Let’s now take this a bit further and run it back to silver. We have the same persistently negative analysts who continue to assert that there is no shortage of silver and that silver is overpriced. Maybe they are wrong; maybe they are right. I personally happen to believe that they are wrong but even at that, who am I and why does what I think about this even matter. The key is that the COMBINED OPINIONS OF ALL PLAYERS that trade in the silver market presently believe that there is a shortage of silver. How do I know this? Simple – the price chart tells me so. Which way is it going, higher or lower? If the combined opinion of the players in the silver market believed that there was more than enough supply around, more so than current demand supported, the price would not be going higher; it would be going lower.
Not only that, but the backwardation type price structure on the silver board is also saying with a clear and loud voice: “Silver demand is currently extremely strong – so strong that buyers are willing to pay up to obtain the metal right now rather than wait for it”.
Now, we have come full circle and are back to facing the same three choices that I have listed earlier in this commentary.
Option one – the trader/investor listens to the persistently negative analysts who tell him there is no shortage, takes out a short position expecting price to be obedient to their assertions and move lower, only to get run over and left for dead on the trading floor with huge paper losses. He not only does not make a dime, he loses all the money he bet against the rise in silver.
Option two – the trader/investor listens to the persistently negative analysts who tell him there is no shortage but he sees price moving higher and doubts his own judgment. Therefore he does nothing. He makes no money; he loses no money either but then kicks himself for following their opinion and second guessing himself.
Option three – the trader/investor listens to the persistently negative analysts who tell him there is no shortage of silver but he sees the price chart and then comes to the conclusion “ the market is telling me in no uncertain terms that it does not agree with the assertions of the persistently negative analysts because its price chart is telling me so. I will therefore trust my own judgment and take a long position in silver. Question – how did the average trader/investor who followed this course of action fare thus far? Answer – it depends on when they instituted their long positions but let’s just assume that they went long when silver closed above the $30 level and held that tough resistance level refusing to break lower. So far, so good. Now, by employing proper money management techniques, they will be able to lock in a healthy profit if they are a trader or at the very least will have managed a return or gain on the silver bullion they might have purchased.
Here is the final point in this. I have been around this industry for a very long time. Over that time I have seen countless “analysts” come and go. I have also seen some traders who have survived and thrived over that same period. Here is a vital and important distinction that needs to be kept in mind.
Analysts get paid to “analyze” and give opinions on markets. They make money whether their opinion is right or wrong. In that sense they are no different than the TV weatherman. He gets paid to produce a forecast. Sometimes he gets it right; sometimes he gets it wrong but regardless he gets paid. He suffers no consequence for failure. However, those who rely on his forecast and make business plans based on those forecasts may suffer terribly if they act on his forecast.
Take the example of a guy running a concrete company who plans a big pour for a certain day because the weatherman has given his forecast for no rain in sight. The big day comes, the contractor spends thousands of dollars on material and pours only to have a downpour wash it out. The Result – the weatherman goes on TV the next day, issues another forecast and collects his paycheck at the end of the week. He has no accountability or suffers any consequence whatsoever. The unfortunate concrete contractor, who put his faith in the weather forecast, is entirely a different matter. He has lost his thousands and suffered immense pain as a result. Life goes on for the weatherman but the concrete contractor might possibly have been ruined.
Analysts are the same – they can issue opinions all day long and suffer not the least bit of consequence for their failure. However, those who listen to them and make decisions based on those opinions can suffer immense harm. Life goes on for the analyst, no matter how often he is utterly and completely wrong; life can be extremely difficult however for those who took their guidance from him.
Analysts therefore make their living OFF of the market – not IN the market. This is a vital distinction.
Traders on the other hand, make their living IN the market. If we are wrong, we suffer the consequences of our actions. If we are right, we enjoy the reward. If we are wrong, we are forced by the nature of the business to QUICKLY realize and ADMIT we were wrong. By doing so, we survive and even prosper. Failure to admit when one has erred is not only stupid and foolish, it is ruinous.
Analysts on the other hand generally cannot make a living trading a market. The reason is because many of the ones that I have seen over the decades have had one huge failing that hinders them from ever becoming successful as a trader – their EGO prevents them from admitting error.
Remember this well the next time you read an opinion by an “analyst”.
Good traders are confident but are also humble. If they survive long enough it is because the markets have humbled them and they have learned to respect it above all others. That is why as a trader we let the markets tell us what the COLLECTIVE OPINION of the market players are at any given time. That opinion is always right, even it may happen to be “wrong” in our own minds. Learn to respect only THIS OPINION and you will be successful. Learn to ignore those whose opinion contradicts this COLLECTIVE OPINION, and you will thrive.
The goal in trading is not to be “right” but to make money. Everything else is noise.
Good read:
Saturday, February 19, 2011
Some thoughts on Analysts and the Silver market
I have been reading with some amusement the comments of some who seem as if their sole raison d’etre is to provide a perpetual example of folly masquerading under the supposed guise of wisdom.
By this I mean to say the comments of those who continue to deny that there currently exists a shortage of silver in the market. They cite their reasons, and offer their opinions, which I might add here, they are welcome to and should have the opportunity to voice, even when they are consistently wrongheaded and yet apparently feel under no sense of honor to modify even when proven wrong.
Let me first begin by saying that as a trader of more than two decades’ experience, there have been, and I am sure, will be, times when I have been wrong about a market. I feel no shame in admitting that – why should I, as I am a mere mortal and am not infallible. To give a recent example – I have been a bear on the US equity markets beginning back in 2008 and continuing to hold that bearish opinion until November of last year. It was not until that time that I realized that no matter what I thought about the reasons why US stocks should not be rallying, the stock market was going to continue to rally especially now that the Fed had announced a fresh QE program. The old trader’s adage, “You cannot fight the Fed” was proven to be true once again.
I might add here that I had also been wrong about the bond market for some time and was of the opinion that a falling Dollar would result in a falling bond market. That too was not the case during the credit crisis of 2008. I learned a good lesson about all that back then.
I still have my doubts about the veracity of this move higher in US equities or of its ability to endure but the fact is that the stock market is moving higher, regardless of what I think about it.
Now, as a trader I can do one of three things with this.
One – I can continue to stubbornly insist that the stock market should not be going up and take out a huge short position and continue until my trading account is no more, declaring that the US stock market should not be moving higher. At some point in the future, the market will no doubt correct and move lower at which time I will perhaps feel vindicated. The problem is that by that time I will have not made a dime off of my views and very possibly could have lost my entire trading account and with it my livelihood, although at the very end I will have the self-satisfaction of telling myself and others: “SEE, I was right all along. I told you so”. Result – I am broke and busted but feel proud and smug.
Two – I can do nothing and stay flat because while I see the market moving higher am greatly suspect of its lasting power. I will not make any money following this course of action but neither will I get hurt financially either.
Three – I can see the trend and while I greatly suspect its lasting power, can take a long position and attempt to ride that trend higher until such time I see it nearing an end. This course of action, while fraught with peril because of my own views of the market, will make me money as a trader if I employ sound money management techniques and use wisdom and do not get careless or complacent.
Here is the lesson in all this, a lesson I might add, learned the painful way through many years experience. THE MARKETS DO NOT CARE ONE BIT ABOUT OUR OPINION.
The sooner one learns this lesson, the better a trader/investor they will become.
I remember earlier in the past decade reading the reports from a rather well known and respected analyst who was consistently bearish on the copper market. Back in 2006, when copper was trading closer to $2.00, having rallied up from down near $1.40 - $1.50, he kept producing studies adamantly denying any reports suggesting that there was a tightness in the copper supply based on real fundamental supply/demand statistics. He cited reasons such as hedge funds artificially distorting the supply by taking huge sums of copper off the market and storing it in warehouses thereby creating the drawdown in stocks at the LME and in Shanghai that were being registered. He stated that copper was therefore overpriced and was primed for a fall.
This he continued doing while copper rose towards $2.50 - $2.60 pound. He was still bearish while copper went on to hit $3.00. “Still overpriced”; “No real shortage”; “Supply is being artificially reduced – the copper is still there just not in the public warehouses”, etc. all the while the price of copper kept rising. Before it all ended, copper had moved up to over $4.00 in May 2006 before it finally sold off. It then retreated all the way down to $2.40 before it turned around and went back up again reaching nearly $4.30 in 2008 before it crashed alongside the rest of the commodity complex when the credit crisis erupted.
Maybe this analyst was right; maybe he was wrong; maybe hedge funds were indeed taking copper out of storage in public warehouses and stashing it into private warehouses. Who knows and who really cares at this point? Here is the point in all this recapping. One could have followed the three options just cited.
Option one: “Well Mr. respected analyst says that copper is overpriced and should not be moving higher. Therefore I will listen to Mr. respected analyst and take a short position”. What would the result have been for the average trader/investor? Answer – the average trader/investor would have lost the entire amount invested on a short copper position if not more due to the leverage effect. Question – was this a good course of action? Answer – obviously it was foolhardy.
Option two: “Mr. respected analyst says that copper is overpriced and should not be moving higher. He is probably right because he knows more than me but I see the price chart is moving higher and therefore I will do nothing because he must be smarter than me and I must be wrong”. Question – how would that have worked out? Answer – no harm done but neither did the average trader/investor make a single dime. He is no richer or no poorer for his choice and is as well off as he was before. He has however lost a very good opportunity.
Option three: “Mr. respected analyst says that copper is overpriced and should not be moving higher. The price chart however tells me that the market does not care one whit about what Mr. respected analyst thinks because IT IS MOVING HIGHER”. I will therefore take out a long position in copper because I believe that the combined opinions of ALL MARKET PLAYERS is outweighing the opinion of one Mr. respected analyst. Question – how did this choice work out? Answer – the average trader/investor made money and profited from his action. He has increased his wealth and has used a market trend to his advantage.
Let’s now take this a bit further and run it back to silver. We have the same persistently negative analysts who continue to assert that there is no shortage of silver and that silver is overpriced. Maybe they are wrong; maybe they are right. I personally happen to believe that they are wrong but even at that, who am I and why does what I think about this even matter. The key is that the COMBINED OPINIONS OF ALL PLAYERS that trade in the silver market presently believe that there is a shortage of silver. How do I know this? Simple – the price chart tells me so. Which way is it going, higher or lower? If the combined opinion of the players in the silver market believed that there was more than enough supply around, more so than current demand supported, the price would not be going higher; it would be going lower.
Not only that, but the backwardation type price structure on the silver board is also saying with a clear and loud voice: “Silver demand is currently extremely strong – so strong that buyers are willing to pay up to obtain the metal right now rather than wait for it”.
Now, we have come full circle and are back to facing the same three choices that I have listed earlier in this commentary.
Option one – the trader/investor listens to the persistently negative analysts who tell him there is no shortage, takes out a short position expecting price to be obedient to their assertions and move lower, only to get run over and left for dead on the trading floor with huge paper losses. He not only does not make a dime, he loses all the money he bet against the rise in silver.
Option two – the trader/investor listens to the persistently negative analysts who tell him there is no shortage but he sees price moving higher and doubts his own judgment. Therefore he does nothing. He makes no money; he loses no money either but then kicks himself for following their opinion and second guessing himself.
Option three – the trader/investor listens to the persistently negative analysts who tell him there is no shortage of silver but he sees the price chart and then comes to the conclusion “ the market is telling me in no uncertain terms that it does not agree with the assertions of the persistently negative analysts because its price chart is telling me so. I will therefore trust my own judgment and take a long position in silver. Question – how did the average trader/investor who followed this course of action fare thus far? Answer – it depends on when they instituted their long positions but let’s just assume that they went long when silver closed above the $30 level and held that tough resistance level refusing to break lower. So far, so good. Now, by employing proper money management techniques, they will be able to lock in a healthy profit if they are a trader or at the very least will have managed a return or gain on the silver bullion they might have purchased.
Here is the final point in this. I have been around this industry for a very long time. Over that time I have seen countless “analysts” come and go. I have also seen some traders who have survived and thrived over that same period. Here is a vital and important distinction that needs to be kept in mind.
Analysts get paid to “analyze” and give opinions on markets. They make money whether their opinion is right or wrong. In that sense they are no different than the TV weatherman. He gets paid to produce a forecast. Sometimes he gets it right; sometimes he gets it wrong but regardless he gets paid. He suffers no consequence for failure. However, those who rely on his forecast and make business plans based on those forecasts may suffer terribly if they act on his forecast.
Take the example of a guy running a concrete company who plans a big pour for a certain day because the weatherman has given his forecast for no rain in sight. The big day comes, the contractor spends thousands of dollars on material and pours only to have a downpour wash it out. The Result – the weatherman goes on TV the next day, issues another forecast and collects his paycheck at the end of the week. He has no accountability or suffers any consequence whatsoever. The unfortunate concrete contractor, who put his faith in the weather forecast, is entirely a different matter. He has lost his thousands and suffered immense pain as a result. Life goes on for the weatherman but the concrete contractor might possibly have been ruined.
Analysts are the same – they can issue opinions all day long and suffer not the least bit of consequence for their failure. However, those who listen to them and make decisions based on those opinions can suffer immense harm. Life goes on for the analyst, no matter how often he is utterly and completely wrong; life can be extremely difficult however for those who took their guidance from him.
Analysts therefore make their living OFF of the market – not IN the market. This is a vital distinction.
Traders on the other hand, make their living IN the market. If we are wrong, we suffer the consequences of our actions. If we are right, we enjoy the reward. If we are wrong, we are forced by the nature of the business to QUICKLY realize and ADMIT we were wrong. By doing so, we survive and even prosper. Failure to admit when one has erred is not only stupid and foolish, it is ruinous.
Analysts on the other hand generally cannot make a living trading a market. The reason is because many of the ones that I have seen over the decades have had one huge failing that hinders them from ever becoming successful as a trader – their EGO prevents them from admitting error.
Remember this well the next time you read an opinion by an “analyst”.
Good traders are confident but are also humble. If they survive long enough it is because the markets have humbled them and they have learned to respect it above all others. That is why as a trader we let the markets tell us what the COLLECTIVE OPINION of the market players are at any given time. That opinion is always right, even it may happen to be “wrong” in our own minds. Learn to respect only THIS OPINION and you will be successful. Learn to ignore those whose opinion contradicts this COLLECTIVE OPINION, and you will thrive.
The goal in trading is not to be “right” but to make money. Everything else is noise.
Silver and Opium
http://www.thedailybell.com/1766/Antal-Fekete-Silver-and-Opium.html
Thursday, February 17, 2011 – by Dr. Antal Fekete
The opium wars do not belong to the glorious episodes of Western history. Rather, they were instances of shameful behavior the West still has not lived down. Mercantilist governments resented the perpetual drain of silver from West to East in payment for Oriental goods (tea, silk, porcelain) that were in high demand in the Occident, facing low demand in the Orient for Occidental goods. From the mid-17th century more than 9 billion Troy ounces or 290 thousand metric tons of silver was absorbed by China from European countries in exchange for Chinese goods.
The British introduced opium along with tobacco as an export item to China in order to reduce their trade deficit. Under the disguise of free trade, the British, the Spanish and the French with the tacit approval of the Americans continued sending their contraband to China through legitimate as well as illegitimate trade channels even after the Chinese dynasty put an embargo on opium imports. Because of its strong appeal to the Chinese masses, and because of its highly addictive nature, opium appeared to be the ideal solution to the West's trade problem. And, indeed, the flow of silver was first stopped, and then reversed. China was forced to pay silver for her addiction to opium smoking that was artificially induced by the pusher: the British.
Thus silver was replaced by opium as the mainstay of Western exports. In 1729 China, recognizing the growing problem of addiction and the debilitating and mind-corrupting nature of the drug, prohibited the sale and smoking of opium; allowing only a small quota of imports for medicinal purposes. The British defied the embargo and ban on opium trade, and encouraged smuggling. As a result, British exports of opium to China grew from an estimated 15 tons to 75 by 1773. This increased further to 900 tons by 1820; and to 1400 tons annually by 1838 – an almost 100-fold increase in 100 years.
Something had to be done. The Chinese government introduced death penalty for drug trafficking, and put British processing and distributing facilities on Chinese soil under siege. Chinese troops boarded British ships in international waters carrying opium to Chinese ports and destroyed their cargo, in addition to the destruction of opium found on Chinese territory. The British accused the Chinese of destroying British property, and sent a large British-Indian army to China in order to exact punishment.
British military superiority was clearly evident in the armed conflict. British warships wreaked havoc on coastal towns. After taking Canton the British sailed up the Yangtze River. They grabbed the tax barges, inflicting a devastating blow on the Chinese as imperial revenues were impossible to collect. In 1842 China sued for peace that was concluded in Nanking and ratified the following year. In the treaty China was forced to pay an indemnity to Britain, open four port cities where British subjects were given extraterritorial privileges, and cede Hong Kong to Britain. In 1844 the United States and France signed similar treaties with China.
These humiliating treaties were criticized in the House of Commons by William E. Gladstone, who later served as Prime Minister. He was wondering "whether there had ever been a war more unjust in its origin, a war more calculated to cover Britain with permanent disgrace." The Foreign Secretary, Lord Palmerston replied that nobody believed that the Chinese government's motive was "the promotion of good moral habits", or that the war was fought to stem China's balance of trade deficit. The American president John Quincy Adams chimed in during the debate by suggesting that opium was a "mere incident". According to him "the cause of the war was the arrogant and insupportable pretensions of China that she would hold commercial intercourse with the rest of mankind not upon terms of equal reciprocity, but upon the insulting and degrading forms of the relations between lord and vassal." These words are echoed, 160 years later, by president Obama's recent disdainful pronouncements to the effect that China's exchange-rate policy is unacceptable to the rest of mankind as it pretends that China's currency is that of the lord, and everybody else's is that of the vassal.
The peace of Nanking did not last. The Chinese searched a suspicious ship, and the British answered by putting the port city of Canton under siege in 1856, occupying it in 1857. The French also entered the fray. British troops were approaching Beijing and set on to destroy the Summer Palace. China again was forced to sue for peace. In the peace treaty of Tianjin China yielded to the demand to create ten new port cities, and granted foreigners free passage throughout the country. It also agreed to pay an indemnity of five million ounces of silver: three million to Britain and two million to France.
This deliberate humiliation of China by the Western powers contributed greatly to the loosening and ultimate snapping of the internal coherence of the Qing Dynasty, leading to the Taiping Rebellion (1850-1864), the Boxer Uprising (1899-1901) and, ultimately, to the downfall of the Qing Dynasty in 1912.
The present trade dispute between the U.S. and China is reminiscent of the background to the two Opium Wars. Once more, the issue is the humiliation and plunder of China as a "thank you" for China's favor of having provided consumer goods for which the West was unable to pay in terms of Western goods suitable for Chinese consumption. The only difference is the absence of opium in the dispute.
Oops, I take it back. The role of opium in the current dispute is played by paper. Paper dollars, to be precise. In 1971 an atrocity was made that I call the Nixon-Friedman conspiracy. To cover up the shame and disgrace of the default of the U.S. on its international gold obligations, Milton Friedman (following an earlier failed attempt of John M. Keynes) concocted a spurious and idiotic theory of floating exchange rates. It suggests that falling foreign exchange value of the domestic currency makes it stronger when in actual fact the opposite is true: it is made weaker as the terms of trade of the devaluing country deteriorates and that of its trading partners improves. Nixon was quick to embrace the false theory of Friedman. No public debate of the plan was permitted then, or ever after. Under the new dispensation the irredeemable dollar was to play the role of the ultimate extinguisher of debt, a preposterous idea. The scheme was imposed on the world under duress as part of the "new millennium", shaking off the "tyranny of gold", that "barbarous relic", the last remnant of superstition, the only remaining "anachronism of the Modern Age". The ploy was played up and celebrated as a great scientific breakthrough, making it possible for man to shape his own destiny rationally, free of superstition, for the first time ever. Yet all it was a cheap trick to elevate the dishonored paper of an insolvent banker (the U.S.) from scum to the holy of holies: international currency. The fact that fiat paper money has a history of 100 percent mortality was neatly side-stepped. Any questioning of the wisdom of experimenting with is in spite of logic and historical evidence was declared foggy-bottom reactionary thinking.
The amazing thing about this episode of the history of human folly was the ease with which it could be pushed down the throat of the rest of the world, including those nations that were directly hurt by it, such as the ones running a trade surplus with the U.S. Their savings went up in smoke. The explanation for this self-destructing behavior is the addictive, debilitating and mind-corrosive nature of paper money, in direct analogy with that of opium. The high caused by administering the opium pipe to the patient (read: administering QE) had to be repeated when the effect faded by a fresh administration of more opium (read: more QE2).
If the patient resists, like China did in 1840, then a holy opium war must be declared on it in the name of the right of others to free trade. 170 years later a New China once more demurred against the paper-torture treatment it was subjected to by the American debt-mongers and opium pushers.
But beware: if the West starts another Opium War, this time it is not China that will be on the losing side.
Karl Denninger on Wisconsin
Two "S" Words For Saturday
The first one: STATE.
You know, that thing that has all of the powers of government not explicitly delegated in The Constitution to The Federal government? Yes, that thing. There are 50 of them in The United States.
Notice that we don't call the nation "The United Federal Government." We call it "The United STATES." That's because States have supremacy. Always have. They originally joined together under a promise of a limited Federal government, which was mostly about the common defense - and little more.
Now as for the second word..... Sedition.
–noun
1. incitement of discontent or rebellion against a government.
2. any action, especially in speech or writing, promoting such discontent or rebellion.
3. Archaic . rebellious disorder.
I'm going to draw the line between the word sedition and the act of seditious conspiracy; the latter is a federal offense. At least today, that line may still apply. It may be true, however, that as facts develop we will discover that this line has been crossed.
In America we have these things called elections. After the 2008 election Barack Obama was having a discussion with Republican lawmakers where they were objecting to some of his plans. They asked him why they should negotiate with a wall, effectively, and his answer was simple:
"I won."
Ok. Fair enough. Elections have consequences, right, and one of the key points that Barack Obama himself has put forward time and time again as justification for his alleged "mandate" was that he won the 2008 election.
Never mind that he lied about virtually everything he said he was going to do. Among other things he said he did not come to Washington to favor the banksters, but in point of fact he has provided more Lewinskis to them than Monica ever did to Bill Clinton. His so-called Attorney General, Eric "Place" Holder, can't even find a felony to indict and prosecute when they're apparently admitted to under oath before the FCIC.
It is clear at this point that the game is to run the Statute of Limitations so that prosecution becomes impossible. That is, for those who elected Barack Obama, you by doing so - yes, this includes me - provided every bankster a "never go to jail" card for what they did.
In fact, Angelo Mozilo had the criminal probe against him dropped yesterday, if reports are correct.
Of course McStain was going to do the same thing. So it's not like we really had a choice between "D" and "R" in this regard, right? Well, no.
We were also told our health insurance payments would go down. Mine went up - more than 20%. This, despite being told it wouldn't. That we would get "relief." Well, no, we didn't get relief. We got cornholed.
After two years of this blatant abuse Americans had enough. They went to the polls again. And this time they threw a lot of Demoncrats out of office. One of the newly-elected politicians was Republican Governor Walker in Wisconsin.
He ran on a platform that, among other things, promised to do away with collective bargaining for teachers for all items other than pay. That is, pensions, health insurance, work rules, everything else. All those things, if they were going to be larded up on the public, would have to survive a public vote by the people.
What's wrong with this, may I ask? Teachers are employed by the people. Did you notice your property tax bill? You're the boss. You pay the check. You make the rules. And in a representative government, you hire people through the ballots to do as you demand.
Wisconsin did exactly that.
Governor Walker did exactly what he promised. Faced with a monstrous budget problem that was gimmicked and gamed by his predecessor to appear smaller than it really was (just as occurred in New Jersey with Governor Christie) he put forward a bill.
Remember now, the standard is "I won" when it comes to justification - by our own President.
Mr. Walker won.
So what did our President's campaign organization - "Organizing For America" - do?
OfA Wisconsin's field efforts include filling buses and building turnout for the rallies this week in Madison, organizing 15 rapid response phone banks urging supporters to call their state legislators, and working on planning and producing rallies, a Democratic Party official in Washington said.
Really?
Our own President's campaign apparatus is attempting to prevent a vote from taking place? To overturn an election? To incite discontent against a duly-elected government, perhaps by importing people who aren't actually Wisconsin residents? And to spread that discontent to other states?
Really? Our own President is doing this?
That's textbook stuff folks. As in Mubarak's textbook.
Didn't we just see a government go down with our support in Egypt over this exact same thing? A government where the people said "do X", government did "Y", and the people rose? And let us not forget that in Egypt it was not the people who were shooting, it was government goons - rifles are prohibited from private ownership in Egypt.
These acts have a word folks: Sedition.
Just a month ago we heard from our very same President that we had a "responsibility" to tone down the political rhetoric. This, incidentally, is why these bussed-in protesters who aren't Wisconsin residents are waving signs that claim Walker is Adolph Hitler and have targets on him?
To anyone who believes that these teachers are in some way deprived, I've run the analysis. The average teacher in Wisconsin receives about $86,000 in total pay and benefits annually. Like all teachers they also get three months off every year. That $86,000 has a huge benefit component, like all public employees - including pension and health care. But the important point is this figure is roughly $25,000 more than the average private-sector worker makes - even when you include the ridiculously over-compensated people like those at Goldman Sachs.
Here's the reality folks: We're broke. The States are broke and so is the Federal Government. We've allowed political hacks from both sides to make promises that can't be kept. That's a fact and no amount of spin is going to change it. We must cut the Federal Budget by more than half and at the same time raise taxes in order to start to pay down the debt.
Five entitlement programs: Social Security, Medicare, Medicaid, Welfare and Unemployment consume more than half of the entire Federal Budget. We borrow 42 cents of every dollar. You can cut to zero every other program, including defense, and we can't balance the budget if we do not severely cut these five programs.
This is not a problem for the future, it's a problem that must be solved right now. We could have cut the budget by 10 or 20% a decade ago, but we didn't. Now it's half. Soon it will collapse. And this same picture exists in the States.
The pension and health care cost issues are particularly severe. There is no solution to these problems that "keeps the promises" people believe were made to them. It's not possible, no matter what you wish to believe or who is speaking. These are mathematical facts.
But today, the issue is this: We have a President who is attempting to overturn the results of an election in a State. That election was held, the people spoke, and the majority of Wisconsin residents support what Governor Walker is doing. The President has exactly zero right to interfere in the sovereign matters of a State's Government in violation of the expressed will of The People and by doing so he has, in my opinion, committed an impeachable offense.
There are also serious issues in Wisconsin with the Teachers and also with State Senators. If you are a parent with children in a Wisconsin school you must demand that any teacher who falsely called in sick to protest be debarred from teaching your child. It is absolutely essential that our children understand and be taught that the representative process of government is sacred and that violating that premise is unacceptable. No parent who honors our form of government can permit their child to be instructed by a teacher who participated. I therefore call upon all parents to perform a "KidOut" and demand these teachers be immediately fired and replaced, or their children will not return to class. There are millions of unemployed people in this nation and many are qualified to teach. There is no shortage in the labor pool. Force the Superintendents to fire every one of these teachers - right now.
Second, Governor Walker needs to sign an executive order declaring a State of Emergency and ordering the Senate to come to order. If the Democrats refuse he should then declare their seats abdicated and hold special elections. The Democrats need only lose one seat in that special election to be irretrievably screwed. It is fine to disagree but the fact remains that a legislator has a job, and that is to legislate. That means showing up, speaking your peace, debating in a civil manner and voting. That's how we do things in America.
Finally, to those in Organizing for America who are playing these games, let me make this very, very clear: You set the standard in 2008 when your President, who heads your group, said "I won" as justification for refusing to compromise on his bills. Well, this time you lost. Live to your own standards or you risk the people deciding to shut down commerce. To de-fund the government and your goon squads by doing an entirely-legal thing - deciding to cease all commerce and demonstrate via peaceful means exactly as was done in Egypt.
Government exists only because it has a believed ability to raise revenues via taxation. That's what allows government at all levels to sell bonds and transact business.
We the people, via peaceful and lawful means, always have the right to revoke that belief among those who buy those bonds and transact business, and I believe we are not far from a critical mass in this country of people who are willing to do exactly that, particularly when our government refuses to honor the just results of a fair election of representatives and governors.
I call upon all Ticker readers to call Darryl Issa's office Tuesday, along with their Representative and Senators, and demand an immediate halt to this interference in the affairs of Wisconsin and other States. And while you're at it, demand that Mr. Issa issue subpoenas and find out exactly where the money came from for those buses, where the people came from, and who's coordinating what.
There may be a federal offense in there.
Speaking of which, is it time to impeach Eric Holder yet?
http://market-ticker.org/
CME Lifts Gold, Silver Margins by 50%
http://www.goldalert.com/2011/02/cme-lifts-gold-silver-margins-by-50/
CME Group announced yet another series of margin requirement increases for gold and silver futures contracts.
Effective after the close of business today, initial and maintenance margin requirements on gold and silver will increase 50%, according to CME Group. CME is the owner and operator of the New York Mercantile Exchange and Commodity Exchange (COMEX), on which precious metals futures contracts are traded.
Today’s announcement follows several margin increases over the past year, as the exchange seeks to limit speculation as precious metals continue to surge higher.
While these decisions have often led to short-time sell-offs in gold and silver, history has shown that these measures have little to no effect over the longer-term.
If the CME and federal policymakers are trying to suppress the price of gold and silver, as many have suggested, they would be much better served urging Federal Reserve Chairman Ben Bernanke to end his reckless quantitative easing programs instead.
The 10 economic charts that you are about to see are completely and totally shocking. If you know anyone that still does not believe that the United States is in the midst of a long-term economic decline, just show them these charts. Sometimes you can quote economic statistics to people until you are blue in the face and it won't do any good, but when those same people see charts and pictures suddenly it all sinks in. What is great about charts is that you can very easily demonstrate what has been happening to the economy over an extended period of time. As you examine the economic charts below, pay special attention to what has been happening to the U.S. economy over the last 30 or 40 years. The truth is that what is wrong with the U.S. economy is not a great mystery. All of the economic problems that we are experiencing now have taken decades to develop. Hopefully the charts in this article will help people realize just how nightmarish our economic problems have become, because until people start realizing how incredibly bad things have gotten they will never be willing to accept the dramatic solutions that are necessary to fix our financial system.
The sad fact of the matter is that we have been living in the biggest debt bubble in the history of the world over the last 40 years. All of this debt has purchased a wonderful standard of living for the vast majority of us, but all of this debt has also destroyed the economic future of our children and our grandchildren. Someday future generations will look back on what we have done in absolute horror.
The 10 economic charts posted below are meant to shock you. Most Americans today need to be shocked before they will be motivated to take action. Please share these charts with as many people as you can. Hopefully we can wake enough people up that something will be done about all of these problems while there is still time.
1 - Government spending is expanding at an exponential rate. As you can see from the chart below, federal spending is almost 18 times higher than it was back in 1970. Now Barack Obama has proposed a budget that would increase U.S. government spending to 5.6 trillion dollars in 2021. Just imagine what the following chart would look like if that happens....
2 - U.S. government debt is absolutely exploding. The U.S. national debt is currently $14,081,561,324,681.83. It is more than 14 times larger than it was back in 1980. Unfortunately, the national debt continues to grow at breathtaking speed. In fact, the Obama administration is projecting that the federal budget deficit for this year will be an all-time record 1.6 trillion dollars. Can we afford to continue to accumulate debt at this rate?....
3 - Unless something changes right now, the outlook for U.S. government finances in future years is downright apocalyptic. The chart posted below is from an official U.S. government report to Congress. As you can see, it is projected that interest on our exploding national debt is absolutely going to spiral out of control if we continue on the path that we are currently on....
4 - Household debt has soared to almost unbelievable levels over the last 30 years. The sad truth is that it is not just the U.S. government that has a massive debt problem. U.S. households have also been accumulating debt at a staggering rate. Total U.S. household debt did not pass the 2 trillion dollar mark until the mid-1980s, but now total U.S. household debt is well over 13 trillion dollars....
5 - The total of all debt (government, business and consumer) in the United States is now well over 50 trillion dollars. For the past couple of years this figure has been hovering around a level that is equivalent to approximately 360 percent of GDP. This is a debt bubble that is absolutely unprecedented in U.S. history....
6 - As tens of thousands of U.S. factories get shut down and as millions of our jobs get shipped overseas, the number of unemployed Americans continues to go up and up and up. As you can see from the chart below, there has been a long-term trend of increasing unemployment in the United States. In fact, there are about 3 and a half times as many unemployed workers in the United States today as there were when 1970 began. These jobs losses are going to continue as long as we allow our corporations to pay slave labor wages to workers on the other side of the globe. All of the major trends in global trade are very bad for the U.S. middle class. For example, the U.S. trade deficit with China for 2010 was 27 times larger than it was back in 1990. How long will our politicians stand by as our nation bleeds jobs?....
7 - The median duration of unemployment in the United States is in unprecedented territory. For most of the post-World War 2 era, when the median duration of unemployment in America reached 10 weeks that was considered a national crisis. Well, today competition for jobs is so intense that the median duration of unemployment is now well over 20 weeks....
8 - Since the Federal Reserve was created in 1913, the value of the U.S. dollar has declined by over 95 percent. One of the reasons given for the existence of the Federal Reserve is that the Fed helps control inflation. But that is a huge lie. The truth is that the United States never had consistently rampant inflation until the Federal Reserve took control. In particular, once the U.S. totally went off the gold standard in the 1970s inflation really started escalating out of control....
9 - Now the Federal Reserve says that the solution to our current economic problems is to print even more money out of thin air. The games that the Federal Reserve is playing with our money supply are simply inexcusable. Just look at what the Federal Reserve has done to the monetary base since the beginning of the recession....
10 - All of this new money is creating tremendous inflation. In particular, the price of oil is now ridiculously high. A high price for oil is very, very bad for the U.S. economy. Our entire economic system is based on being able to use massive quantities of very cheap oil. Unfortunately, that paradigm is starting to break down and the consequences will be very bitter. Back in mid-2008, the price of oil hit an all-time record of $147 a barrel and subsequently the world financial system imploded a few months later. Well, the price of oil is on the march again and that is very bad news for the U.S. economy....
Needless to say, if the economic trends documented by the charts above continue the U.S. economy will be totally wiped out. The U.S. economy as it currently exists is unsustainable by definition. It is only a matter of time before we slam into an economic brick wall.
We have developed an economy that cannot function without debt, and at this point it seems like almost everyone is drowning in red ink. The federal government is massively overextended, most of our state and local governments are massively overextended, most of our major corporations are massively overextended and the majority of U.S. consumers are massively overextended.
The only way that the game can continue is for the Federal Reserve to print increasingly larger amounts of paper money out of thin air and for everyone in the economic food chain to go into increasingly larger amounts of debt.
But no debt spiral can go on forever. At some point this entire house of cards is going to collapse.
When that happens, there is going to be economic pain that is greater than anything that this country has ever seen before.
Someday we will all desperately wish that we could go back to the "good times" of 2011. A great economic collapse is coming, and all of us had better get ready.
http://theeconomiccollapseblog.com/archives/what-is-wrong-with-the-u-s-economy-here-are-10-economic-charts-that-will-blow-your-mind
Austerity In America: 22 Signs That It Is Already Here And That It Is
Going To Be Very Painful
Over the past couple of years, most Americans have shown little
concern as austerity measures were imposed on financially troubled
nations across Europe. Even as austerity riots erupted in nations
such as Greece and Spain, most Americans were still convinced that
nothing like that could ever happen here. Well, guess what?
Austerity has arrived in America. At this point, it is not a formal,
mandated austerity like we have seen in Europe, but the results are
just the same. Taxes are going up, services are being slashed
dramatically, thousands of state and city employees are being laid
off, and politicians seem to be endlessly talking about ways to make
even deeper budget cuts. Unfortunately, even with the incredibly
severe budget cuts that we have seen already, many state and local
governments across the United States are still facing a sea of red ink
as far as the eye can see.
Most Americans tend to think of "government debt" as only a problem of
the federal government. But that is simply not accurate. The truth
is that there are thousands of "government debt problems" from coast
to coast. Today, state and local government debt has reached at an
all-time high of 22 percent of U.S. GDP. It is a crisis of
catastrophic proportions that is not going away any time soon.
A recent article in the New York Times did a good job of summarizing
the financial pain that many state governments are feeling right now.
Unfortunately, as bad as the budget shortfalls are for this year, they
are projected to be even worse in 2012 .
While state revenues, shrunken as a result of the recession, are
finally starting to improve somewhat, federal stimulus money that had
propped up state budgets is vanishing and costs are rising, all of
which has left state leaders bracing for what is next. For now,
states have budget gaps of $26 billion, by some estimates, and foresee
shortfalls of at least $82 billion as they look to next year's
budgets.
So what is the solution? Well, for state and local politicians from
coast to coast, the answer to these financial problems is to impose
austerity measures. Of course they never, ever use the term
"austerity measures", but that is exactly what they are.
The following are 22 signs that austerity has already arrived in
America and that it is going to be very, very painful .
#1 The financial manager of the Detroit Public Schools, Robert Bobb,
has submitted a proposal to close half of all the schools in the city.
His plan envisions class sizes of up to 62 students in the remaining
schools.
#2 Detroit Mayor Dave Bing wants to cut off 20 percent of the entire
city from police and trash services in order to save money.
#3 Things are so tight in California that Governor Jerry Brown is
requiring approximately 48,000 state workers to turn in their
government-paid cell phones by June 1st.
#4 New York Governor Andrew Cuomo is proposing to completely
eliminate20 percent of state agencies.
#5 New York City Mayor Michael Bloomberg has closed 20 fire
departments at night and is proposing layoffs in every single city
agency.
#6 In the state of Illinois, lawmakers recently pushed through a 66
percent increase in the personal income tax rate.
#7 The town of Prichard, Alabama came up with a unique way to battle
their budget woes recently. They simply stopped sending out pension
checksto retired workers. Of course this is a violation of state law,
but town officials insist that they just do not have the money.
#8 New Jersey Governor Chris Christie recently purposely skipped a
scheduled 3.1 billion dollar payment to that state's pension system.
#9 The state of New Jersey is in such bad shape that they still are
facing a $10 billion budget deficit for this year even after cutting a
billion dollars from the education budget and laying off thousands of
teachers.
#10 Due to a very serious budget shortfall, the city of Newark, New
Jersey recently made very significant cuts to the police force.
Subsequently, there has been a very substantial spike in the crime
rate.
#11 The city of Camden, New Jersey is "the second most dangerous city
in America", but because of a huge budget shortfall they recently felt
forced to lay off half of the city police force.
#12 Philadelphia, Baltimore and Sacramento have all instituted
"rolling brownouts" during which various city fire stations are shut
down on a rotating basis.
#13 In Georgia, the county of Clayton recently eliminated its entire
public bus system in order to save 8 million dollars.
#14 Oakland, California Police Chief Anthony Batts has announced that
due to severe budget cuts there are a number of crimes that his
department will simply not be able to respond to any longer. The
crimes that the Oakland police will no longer be responding to include
grand theft, burglary, car wrecks, identity theft and vandalism.
#15 In Connecticut, the governor is asking state legislators to
approve the biggest tax increase that the state has seen in two
decades.
#16 All across the United States, conditions at many state parks,
recreation areas and historic sites are deplorable at best. Some
states have backlogs of repair projects that are now over a billion
dollars long. The following is a quote from a recent MSNBC article
about these project backlogs .
More than a dozen states estimate that their backlogs are at least
$100 million. Massachusetts and New York's are at least $1 billion.
Hawaii officials called park conditions "deplorable" in a December
report asking for $50 million per year for five years to tackle a $240
million backlog that covers parks, trails and harbors.
#17 The state of Arizona recently announced that it has decided to
stop paying for many types of organ transplants for people enrolled in
its Medicaid program.
#18 Not only that, but Arizona is do desperate for money that they
have even sold off the state capitol building, the state supreme court
building and the legislative chambers.
#19 All over the nation, asphalt roads are actually being ground up
and are being replaced with gravel because it is cheaper to maintain.
The state of South Dakota has transformed over 100 miles of asphalt
road into gravel over the past year, and 38 out of the 83 counties in
the state of Michigan have transformed at least some of their asphalt
roads into gravel roads.
#20 The state of Illinois is such a financial disaster zone that it is
hard to even describe. According to 60 Minutes, the state of Illinois
is six months behind on their bill payments. 60 Minutes correspondent
Steve Croft asked Illinois state Comptroller Dan Hynes how many people
and organizations are waiting to be paid by the state, and this is how
Hynes responded .
"It's fair to say that there are tens of thousands if not hundreds of
thousands of people waiting to be paid by the state."
#21 The city of Chicago is in such dire straits financially that
officials there are actually toying with the idea of setting up a
city-owned casino as a way to raise cash.
#22 Michigan Governor Rick Snyder is desperately looking for ways to
cut the budget and he says that "hundreds of jurisdictions" in his
state could go bankrupt over the next few years.
But everything that you have just read is only the beginning. Budget
shortfalls for our state and local governments are projected to be
much worse in the years ahead.
So what is the answer? Well, our state and local governments are
going to have to spend less money. That means that we are likely to
see even more savage budget cutting.
In addition, our state and local politicians are going to feel intense
pressure to find ways to "raise revenue". In fact, we are already
starting to see this happen.
According to the National Association of State Budget Officers, over
the past couple of years a total of 36 out of the 50 U.S. states have
raised taxes or fees of some sort.
So hold on to your wallets, because the politicians are going to be
coming after them.
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.
The above article published by The Economic Collapse.
Bernanke's Free Ride Is Over
http://www.lewrockwell.com/north/north944.html
by Gary North
Ben Bernanke took over as Chairman of the Board of Governors of the Federal Reserve System on February 1, 2006. On February 9, 2011, his free ride ended. On that day, Paul Ryan's House Budget Committee grilled him.
Bernanke has yet to appear before Ron Paul's Subcommittee on Monetary Policy. Whether Bernanke will ever agree to testify before that subcommittee remains an open question. If the House does not compel him to show up, he may be able to escape stiff cross-examining. If the House refuses to compel him to testify, then the House once again has capitulated on a bipartisan basis. We shall see.
Bernanke is not used to tough questions. Some of the questioning wound up on YouTube within hours.
You may not perceive the extraordinary nature of all this. You can be sure that he perceives it. For almost a century, representatives of the Federal Reserve have been dealt with deferentially by Congress. In theory, the Federal Reserve answers to Congress. In fact, Congress asks few questions.
The sign of the FED's operational autonomy is the absence of any independent audit by any agency of the United States government. This includes any audit of the gold that the FED legally has stored for the government since 1933. The last audit of the gold in Fort Knox was in 1953. There has never been an independent audit of the gold inside the vault of the New York Federal Reserve Bank (privately owned) at 33 Liberty Street, New York City.
FT. KNOX
Between 1953 and 1974, no one got inside the vault at Ft. Knox, where (supposedly) 147 million ounces of gold are stored. In 1974, Congressman Phil Crane (R-Ill) strongly suggested to the Secretary of the Treasury that a group of citizens and a few congressmen be allowed to tour the facility. Secretary Simon got this approved. This was the first tour of the Ft. Knox vault since Roosevelt toured it during World War II. That had been the only other tour. An account of the 1974 tour is here.
Ron Paul has introduced a bill to audit all of the nation's gold. His 2009 bill to audit the FED was held up by Barney Frank. Although a majority of the House co-sponsored the bill, Frank never allowed it to get to the floor of the House for a vote. A gutted version was allowed into the bank reform law of 2010.
Any full-scale audit of the FED by the General Accounting Office or other government agency should determine three things: (1) how much U.S. gold is in all depositories; (2) the fineness of the gold (coin melt is only 90% gold and is not suitable for delivery to the metals markets); (3) which nations and central banks have title to the gold in the vaults.
The FED has of course strenuously resisted any audit. An audit is officially rejected by the FED for this reason: it would be an infringement on the autonomy of the FED. Bernanke told Congress what the situation was in 2009. The FED, not Congress, was in charge. He said that the FED should not be subject to an audit by Congress.
We will continue to work with the Congress to provide the information it needs to oversee our activities effectively, yet in a way that does not compromise monetary policy independence.
"Wait a minute," you may be thinking. "The Federal Reserve is legally an agency of the U.S. government. The government should audit every agency." That sounds nice, but the government does not audit agencies with real autonomy and serious power, such as the CIA and the National Security Agency (NSA). The FED is different. Unlike those agencies, 12 of its administrative agencies, the regional FED banks, are privately owned organizations. This is why their Web addresses end in .org, not .gov.
Whenever we find a government agency that is not subject to an audit by the government, we can be sure we are dealing with an agency that possesses real power. The FED possesses such power.
UNTOUCHABLE NO LONGER
The chairmen of two Congressional committees are openly critical of the FED. This has not happened before. The only chairman as hostile to the FED as Ron Paul is, was Wright Patman of east Texas. He was a left-wing Populist. He was a greenbacker. He favored a pure fiat currency, unbacked by even the pretense of gold. From 1929 to 1976, he was a thorn in the side of the FED. During World War II, he teamed up with Jerry Vorhis, a California Congressman who shared his greenback views. Together, they got a law signed that forced the FED to repay to the Treasury all interest income from Treasury bonds that was not used for operating expenses. That has put a significant lid on FED income over the last six decades. In 2010, it paid back $78.4 billion, up from $47 billion in 2009.
Patman was removed as chairman of the Banking Committee in a coup engineered by Democrats. He died in March of 1976, a month before Ron Paul was elected to Congress in a special election to fill a recently vacated position. Paul is as hostile to the FED as Patman was, but on a different basis: a free market monetary standard in which the U.S. government is not involved. He thinks gold would become the monetary unit of preference.
Patman never had another House chairman share his views of the Federal Reserve. Ron Paul knows that, within the Tea Party, there is significant hostility to the FED. For the first time in post-World War I history, there is a significant minority of voters who know that the FED is an autonomous agency in control of monetary policy. They do not think the FED should be trusted by Congress or anyone else.
Bernanke now faces a situation never faced by a FED Chairman before. What he says is not simply reported in the financial press. It winds up on YouTube within a few minutes. This is not what he meant by "transparency." YouTube existed for only a year before Greenspan left office. Bernanke is subject to criticism on the Web in a way that Greenspan avoided, because Greenspan was always ready to inflate to overcome recession. Today, the FED inflates, but unemployment remains persistently high – higher than it did in any post-World War II recession. His statement to the Budget Committee was subdued.
While indicators of spending and production have been encouraging on balance, the job market has improved only slowly. Following the loss of about 8-3/4 million jobs from 2008 through 2009, private-sector employment expanded by a little more than 1 million in 2010. However, this gain was barely sufficient to accommodate the inflow of recent graduates and other new entrants to the labor force and, therefore, not enough to significantly erode the wide margin of slack that remains in our labor market. Notable declines in the unemployment rate in December and January, together with improvement in indicators of job openings and firms' hiring plans, do provide some grounds for optimism on the employment front. Even so, with output growth likely to be moderate for a while and with employers reportedly still reluctant to add to their payrolls, it will be several years before the unemployment rate has returned to a more normal level. Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.
There was not much lipstick for this pig. The job market is locked in recessionary mode, and nothing that the FED or the government has done has put people back to work. Bill Clinton's promise to end welfare as we have known it looked good for a decade, but it has been replaced by a politically permanent dole.
The public remains concerned about the stubborn resistance to recovery in the job market. People know that an economy that cannot provide jobs is a sub-par economy. Yet the total number of Americans employed today is the same as in 1999, while the population has moved from 279 million to 313 million.
The job market is paralyzed. This is why Bernanke cannot hide. The voters are pressuring Congress to do something. The Democrats lost the House in 2010 because of the lack of jobs. If unemployment had been at 6%, the Democrats would probably have won. It was not the Federal deficit that did them in. It was the deficit plus no jobs.
The situation is so bad today that something in the range of 17 million college graduates are working in jobs that require only high school graduate's skills. These people serve as the reserve army of the underemployed.
There is little likelihood that new college graduates will find an improved job market in the next two years. For high school graduates, it will be even worse. They are in competition for jobs that are being filled by college graduates – low pay, low responsibility, entry-level jobs.
Bernanke cannot talk his way out of this corner. He is not an inspiring speaker anyway. Greenspan was lively, even though he spoke in gibberish. Paul Volcker was something of a spellbinder, if only because of his 6'7" frame and his Red Auerbach cigar. Nobody remembers G. William Miller, who served for 18 months under Carter. Arthur Burns smoked a pipe and had the air of a kindly banker explaining things to a small businessman looking for a loan. That takes us back to 1970. So, Bernanke's dishwater dull testimony puts him at a disadvantage in the era of YouTube. He makes his case the way a professor makes his case to a group of freshmen at a community college. He drones on and on about how things are getting better, but not much better.
The public wants things to get much better. The public is going to remain disappointed.
PUSHING ON A STRING
This phrase has been applied to Federal Reserve policy since at least 1935. The FED expands the monetary base, but commercial banks may not lend as much as they are legally entitled to lend, given the increase in the FED's holdings of paper, meaning the FED's balance sheet, meaning the monetary base. Until 2008, there was no post-War case of pushing on a string. It was discussed by analysts who predicted price deflation in the early 1970s, but that turned out to be the most inflationary peacetime decade in American history. The deflationists looked silly – even more silly than Keynesians who said that price inflation would end recessions. It didn't.
Today, the Keynesians are in high cotton. They are seen by the financial media as the only economists with a plan of action. Bernanke is their most highly placed representative. But, in the area of job creation, the old magic is no longer working. The monetary base is rising, but there is not much consumer price inflation, but there is also no consumer price deflation. Why? The answer appears to be the theory of pushing on a string.
You can lead a horse to water, but you can't make him drink. You can lead a banker to a business in need of financing, but you can't make him lend. The fact that an opportunity exists is not the same as a booming economy.
Losses lie ahead for local banks. Businesses are sitting on near-cash assets because the economy is fragile, and managers want liquidity in any future crisis. They cannot trust the banks to lend in a recession. The banks are not lending today. The solution is near-cash reserves. So, the fact that businesses are sitting on liquid reserves is no guarantee that they will put these reserves to work by starting new projects, buying new equipment, and hiring unemployed workers.
This recession is like no other. The level of skepticism has persisted. This is why Bernanke's words ring hollow.
More recently, however, we have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold. Notably, real consumer spending rose at an annual rate of more than 4 percent in the fourth quarter. Although strong sales of motor vehicles accounted for a significant portion of this pickup, the recent gains in consumer spending appear reasonably broad based.
Cuba Gooding's line in "Jerry McGuire" seems appropriate: "Show me the money!" Clara Peller's line in the 1984 Wendy's ads ring even truer: "Where's the beef?"
The deficit is now out of control. Bernanke keeps hammering on this, because it is true. He told the Budget Committee that the projections of the Congressional Budget Office regarding the budget deficits are grim. Then he tossed this hand grenade. Its projections are low-ball.
The CBO's long-term budget projections, by design, do not account for the likely adverse economic effects of such high debt and deficits. But if government debt and deficits were actually to grow at the pace envisioned, the economic and financial effects would be severe. Sustained high rates of government borrowing would both drain funds away from private investment and increase our debt to foreigners, with adverse long-run effects on U.S. output, incomes, and standards of living. Moreover, diminishing investor confidence that deficits will be brought under control would ultimately lead to sharply rising interest rates on government debt and, potentially, to broader financial turmoil. In a vicious circle, high and rising interest rates would cause debt-service payments on the federal debt to grow even faster, resulting in further increases in the debt-to-GDP ratio and making fiscal adjustment all the more difficult.
Don't bother to look for the silver lining. He did not offer any. He ended with this: "Our nation cannot reasonably expect to grow its way out of our fiscal imbalances, but a more productive economy will ease the tradeoffs that we face."
Read it again. He has broken with the dominant Keynesian-monetarist-supply side mantra. He has said that, if Congress does not cut spending, there is no way to grow our way out of a fiscal crisis.
Congress is not going to cut spending. He knows that. We all know that. The reality of this can be seen in this clever video on the deficit as a row of shot glasses.
So, we find ourselves on the highway to fiscal hell. The Congress is unrepentant. The President has proposed a $53 billion, six-year expenditure on high-speed trains. As to who will ride on these trains, we are not told. At what price per ticket? We are not told. To get from where to where? Why? It is all a little vague, but the fact that it will cost $53 billion to build, let alone operate, is not a consideration.
CONCLUSION
Bernanke will give lots more testimonies. He will not find an audience of subservient listeners. The members of the committees are aware that the economy back home is in bad shape. Bernanke is trying to pass on the Old Maid of unemployment to them. "It's Congress's fault. Blame Congress." They are not going to cut spending. Then how will they shift blame away from themselves? The target is obvious: the FED.
Bernanke's free ride is over. So is the Federal Reserve's.
February 12, 2011
US silver term structure inverts as supply tightens
http://www.reuters.com/article/2011/02/11/silver-backwardation-idUSN1133112820110211
Fri Feb 11, 2011 12:58pm EST
* COMEX silver stocks falls to four-year low
* First silver futures backwardation since '97-98
* Strong industrial, coins demand, producer hedging cited
By Frank Tang
NEW YORK, Feb 11 (Reuters) - The tightest physical silver supplies in four years have tipped the U.S. silver futures market into backwardation this week, making near-term prices more expensive than more distant months.
Market watchers said that it has been more than 10 years since silver futures were last in backwardation, an unusual term structure, associated with shortage of physical supply. Warehouse stocks of the white metal have dropped to a four-year low on surging demand, while miners have hedged their future production.
Booming industrial demand for silver and record U.S. coin sales, combined with a surge in demand from mining companies to borrow the metal for their hedge programs have led to a squeeze in the physical silver market.
"The problem is that there is great industrial demand for a specific grade of silver, and there is not enough coming fresh from the mines," said Miguel Perez-Santalla, vice president of Heraeus Precious Metals Management.
"The stocks are being pulled for all the high grade and better materials, and that essentially put a squeeze on the physical market," he said.
Perez-Santalla said that silver futures have not been in backwardation since billionaire Warren Buffett bought 130 million ounces of silver between 1997 and 1998.
Backwardation is a condition where cash or nearby delivery prices are higher than the price for delivery dates further in the future. Usually, forward prices are higher than cash prices to reflect the costs of storage and insurance for stocks deliverable at a later date.
"The extent of the backwardation in silver is unprecedented. It suggests that retail investment and industrial demand internationally is very robust and the small silver bullion market cannot cater to the level of demand for refined coin and bar product," bullion dealer GoldCore said in a note on Friday.
Warehouse data from COMEX showed that silver stocks fell to a four-year low at 102.5 million ounces (3,188 tonnes) on Feb. 5, about 30 percent below a peak at over 141 million ounces (4,395 tonnes) in June 2007.
"There are regional markets that are quite tight. Certainly, some retailers are saying they are juggling to replenish stock," said Suki Cooper, precious metal analyst at Barclays Capital
Strong silver coin sales have more than offset outflow from the world's largest silver-backed exchange traded fund iShares Silver Trust (SLV), which notched its biggest one-month drop in its silver holdings in January. [ID:nLDE7100MW]
"This month, we have seen the retail interest has stayed strong but the exchange traded product slowdown is not as negative," Cooper said.
"If both of them slow down, I think silver could be in trouble," she said.
Sales of the one-ounce American Eagle silver coins by the U.S. Mint surged to a record at nearly 6.5 million, the highest since the coin's introduction in 1986.
U.S. March futures SIH1 advanced 15 percent to $30 an ounce in the past two weeks, near a 31-year high at $31.22. Year to date, the contract was 3 percent lower after the price of silver nearly doubled in 2010.
BACKWARDATION
Some precious metals dealers said that backwardation in silver was related to the forward sales program by silver producers.
"When a silver mine company has to put on a hedge, it has to sell forward and borrow a lot of silver from the market, and that put a tremendous amount on the market," said Bruce Dunn, vice president at precious metals dealer Auramet.
Silver six-month lease rates also spiked to their highest level in 18 months on producer buybacks. [ID:nLDE7181VA]
Hedging, which allows producers to guarantee prices for future output, tends to push up lease rates and nearby contract prices.
Cooper, however, said that the global silver market should remain in surplus despite the current squeeze. She forecast the world market to end 2011 with an excess of 4,900 tonnes in silver, versus a surplus of 5,300 tonnes in 2010. (Editing by Alden Bentley)
Hate to say this but we have some serious dilution going on IMHO. Can't prove it but if the volume today was a lot of buying the pps would not be languishing at it's present level. Watching the past few weeks I have suspected an increase in the available float and today is the proof I needed. I may be wrong but I seriously doubt it. Yes some flipping may account for some of the volume, but not 84 million shares. We are being diluted!!
............al
The Fall of Detroit, Then the US:
by LivingGodsDream.com on Tuesday, January 11, 2011 at 6:44am
By Frosty Wooldridge
For 15 years, from the mid 1970's to 1990, I worked in Detroit , Michigan. I watched it descend into the abyss of crime, debauchery, gun play, drugs, school truancy, car-jacking, gangs, and human depravity. I watched entire city blocks burned out. I watched graffiti explode on buildings, cars, trucks, buses, and school yards. Trash everywhere!
Detroiters walked through it, tossed more into it, and ignored it. Tens of thousands, and then hundreds of thousands today exist on federal welfare, free housing, and food stamps!
With Aid to Dependent Children, minority women birthed eight to 10, and in one case, one woman birthed 24 children as reported by the Detroit Free Press, all on American taxpayer dollars.
A new child meant a new car payment, new TV, and whatever mom wanted. I saw Lyndon Baines Johnson's 'Great Society' flourish in Detroit. If you give money for doing nothing, you will get more hands out taking money for doing nothing.
Mayor Coleman Young, perhaps the most corrupt mayor in America, outside of Richard Daley in Chicago, rode Detroit down to its knees... He set the benchmark for cronyism, incompetence, and arrogance. As a black man, he said, "I am the MFIC." The IC meant "in charge".
You can figure out the rest. Detroit became a majority black city with 67 percent African-Americans.
As a United Van Lines truck driver for my summer job from teaching math and science, I loaded hundreds of American families into my van for a new life in another city or state.
Detroit plummeted from 1.8 million citizens to 912,000 today. At the same time, legal and illegal immigrants converged on the city, so much so, that Muslims number over 300,000. Mexicans number 400,000 throughout Michigan, but most work in Detroit. As the whites moved out, the Muslims moved in.
As the crimes became more violent, the whites fled. Finally, unlawful Mexicans moved in at a torrid pace. Detroit suffers so much shoplifting that grocery stores no longer operate in many inner city locations. You could cut the racial tension in the air with a knife!
Detroit may be one of our best examples of multiculturalism: pure dislike, and total separation from America.
Today, you hear Muslim calls to worship over the city like a new American Baghdad with hundreds of Islamic mosques in Michigan, paid for by Saudi Arabia oil money. High school flunk out rates reached 76 percent last June, according to NBC's Brian Williams. Classrooms resemble more foreign countries than America. English? Few speak it! The city features a 50 percent illiteracy rate and growing.
Unemployment hit 28.9 percent in 2009 as the auto industry vacated the city. In Time Magazine's October 4, 2009, "The Tragedy of Detroit: How a great city fell, and how it can rise again," I choked on the writer's description of what happened. "If Detroit had been ravaged by a hurricane, and submerged by a ravenous flood, we'd know a lot more about it," said Daniel Okrent. "If drought, and carelessness had spread brush fires across the city, we'd see it on the evening news every night."
Earthquake, tornadoes, you name it, if natural disaster had devastated the city that was once the living proof of American prosperity, the rest of the country might take notice.
But Detroit, once our fourth largest city, now 11th, and slipping rapidly, has had no such luck. Its disaster has long been a slow unwinding that seemed to remove it from the rest of the country.
Even the death rattle that in the past year emanated from its signature industry brought more attention to the auto executives than to the people of the city, who had for so long been victimized by their dreadful decision making."
As Coleman Young's corruption brought the city to its knees, no amount of federal dollars could save the incredible payoffs, kickbacks, and illegality permeating his administration. I witnessed the city's death from the seat of my 18-wheeler tractor trailer because I moved people out of every sector of decaying Detroit.
"By any quantifiable standard, the city is on life support. Detroit 's treasury is $300 million short of the funds needed to provide the barest municipal services," Okrent said. "The school system, which six years ago was compelled by the teachers' union to reject a philanthropist's offer of $200 million to build 15 small, independent charter high schools, is in receivership. The murder rate is soaring, and 7 out of 10 remain unsolved. Three years after Katrina devastated New Orleans, unemployment in that city hit a peak of 11%. In Detroit, the unemployment rate is 28.9%.
That's worth spelling out: twenty-eight point nine percent." At the end of Okrent's report, and he will write a dozen more about Detroit, he said, "That's because the story of Detroit is not simply one of a great city's collapse, it's also about the erosion of the industries that helped build the country we know today. The ultimate fate of Detroit will reveal much about the character of America in the 21st century. If what was once the most prosperous manufacturing city in the nation has been brought to its knees, what does that say about our recent past? And if it can't find a way to get up, what does that say about our future?"
As you read in my book review of Chris Steiner's book, "$20 Per Gallon", the auto industry won't come back. Immigration will keep pouring more, and more uneducated third world immigrants from the Middle East into Detroit, thus creating a beachhead for Islamic hegemony in America . If 50 percent illiteracy continues, we will see more homegrown terrorists spawned out of the Muslim ghettos of Detroit . Illiteracy plus Islam equals walking human bombs.
You have already seen it in Madrid , Spain; London, England and Paris, France with train bombings, subway bombings and riots. As their numbers grow, so will their power to enact their barbaric Sharia Law that negates republican forms of government, first amendment rights, and subjugates women to the lowest rungs on the human ladder. We will see more honor killings by upset husbands, fathers, and brothers that demand subjugation by their daughters, sisters and wives. Muslims prefer beheadings of women to scare the hell out of any other members of their sect from straying. Multiculturalism: what a perfect method to kill our language, culture, country, and way of life.
I PRAY EVERYONE THAT READS THIS REALIZES THAT IF WE DON'T STAND UP, AND SCREAM AT WASHINGTON , AND OUR STATE, CITY, AND LOCAL LEADERS THIS IS WHAT AWAITS THE REST OF AMERICA . IF YOU FOLLOW THE NEWS AT ALL YOU KNOW THIS HAS HAPPENED IN ENGLAND , AND FRANCE AND SPAIN .
IF YOU THINK THIS IS JUST A BUNCH OF HOOEY AND YOU FEEL NO DUTY TO FIGHT FOR THIS COUNTRY, THEN I DON'T KNOW WHAT IT WILL TAKE FOR YOU TO STAND AND FIGHT.
"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote.”
-- Benjamin Franklin--
Hi Mark, I've always said watch Detroit for the troubles to begin.
..........al
The Fall of Detroit, Then the US:
by LivingGodsDream.com on Tuesday, January 11, 2011 at 6:44am
By Frosty Wooldridge
For 15 years, from the mid 1970's to 1990, I worked in Detroit , Michigan. I watched it descend into the abyss of crime, debauchery, gun play, drugs, school truancy, car-jacking, gangs, and human depravity. I watched entire city blocks burned out. I watched graffiti explode on buildings, cars, trucks, buses, and school yards. Trash everywhere!
Detroiters walked through it, tossed more into it, and ignored it. Tens of thousands, and then hundreds of thousands today exist on federal welfare, free housing, and food stamps!
With Aid to Dependent Children, minority women birthed eight to 10, and in one case, one woman birthed 24 children as reported by the Detroit Free Press, all on American taxpayer dollars.
A new child meant a new car payment, new TV, and whatever mom wanted. I saw Lyndon Baines Johnson's 'Great Society' flourish in Detroit. If you give money for doing nothing, you will get more hands out taking money for doing nothing.
Mayor Coleman Young, perhaps the most corrupt mayor in America, outside of Richard Daley in Chicago, rode Detroit down to its knees... He set the benchmark for cronyism, incompetence, and arrogance. As a black man, he said, "I am the MFIC." The IC meant "in charge".
You can figure out the rest. Detroit became a majority black city with 67 percent African-Americans.
As a United Van Lines truck driver for my summer job from teaching math and science, I loaded hundreds of American families into my van for a new life in another city or state.
Detroit plummeted from 1.8 million citizens to 912,000 today. At the same time, legal and illegal immigrants converged on the city, so much so, that Muslims number over 300,000. Mexicans number 400,000 throughout Michigan, but most work in Detroit. As the whites moved out, the Muslims moved in.
As the crimes became more violent, the whites fled. Finally, unlawful Mexicans moved in at a torrid pace. Detroit suffers so much shoplifting that grocery stores no longer operate in many inner city locations. You could cut the racial tension in the air with a knife!
Detroit may be one of our best examples of multiculturalism: pure dislike, and total separation from America.
Today, you hear Muslim calls to worship over the city like a new American Baghdad with hundreds of Islamic mosques in Michigan, paid for by Saudi Arabia oil money. High school flunk out rates reached 76 percent last June, according to NBC's Brian Williams. Classrooms resemble more foreign countries than America. English? Few speak it! The city features a 50 percent illiteracy rate and growing.
Unemployment hit 28.9 percent in 2009 as the auto industry vacated the city. In Time Magazine's October 4, 2009, "The Tragedy of Detroit: How a great city fell, and how it can rise again," I choked on the writer's description of what happened. "If Detroit had been ravaged by a hurricane, and submerged by a ravenous flood, we'd know a lot more about it," said Daniel Okrent. "If drought, and carelessness had spread brush fires across the city, we'd see it on the evening news every night."
Earthquake, tornadoes, you name it, if natural disaster had devastated the city that was once the living proof of American prosperity, the rest of the country might take notice.
But Detroit, once our fourth largest city, now 11th, and slipping rapidly, has had no such luck. Its disaster has long been a slow unwinding that seemed to remove it from the rest of the country.
Even the death rattle that in the past year emanated from its signature industry brought more attention to the auto executives than to the people of the city, who had for so long been victimized by their dreadful decision making."
As Coleman Young's corruption brought the city to its knees, no amount of federal dollars could save the incredible payoffs, kickbacks, and illegality permeating his administration. I witnessed the city's death from the seat of my 18-wheeler tractor trailer because I moved people out of every sector of decaying Detroit.
"By any quantifiable standard, the city is on life support. Detroit 's treasury is $300 million short of the funds needed to provide the barest municipal services," Okrent said. "The school system, which six years ago was compelled by the teachers' union to reject a philanthropist's offer of $200 million to build 15 small, independent charter high schools, is in receivership. The murder rate is soaring, and 7 out of 10 remain unsolved. Three years after Katrina devastated New Orleans, unemployment in that city hit a peak of 11%. In Detroit, the unemployment rate is 28.9%.
That's worth spelling out: twenty-eight point nine percent." At the end of Okrent's report, and he will write a dozen more about Detroit, he said, "That's because the story of Detroit is not simply one of a great city's collapse, it's also about the erosion of the industries that helped build the country we know today. The ultimate fate of Detroit will reveal much about the character of America in the 21st century. If what was once the most prosperous manufacturing city in the nation has been brought to its knees, what does that say about our recent past? And if it can't find a way to get up, what does that say about our future?"
As you read in my book review of Chris Steiner's book, "$20 Per Gallon", the auto industry won't come back. Immigration will keep pouring more, and more uneducated third world immigrants from the Middle East into Detroit, thus creating a beachhead for Islamic hegemony in America . If 50 percent illiteracy continues, we will see more homegrown terrorists spawned out of the Muslim ghettos of Detroit . Illiteracy plus Islam equals walking human bombs.
You have already seen it in Madrid , Spain; London, England and Paris, France with train bombings, subway bombings and riots. As their numbers grow, so will their power to enact their barbaric Sharia Law that negates republican forms of government, first amendment rights, and subjugates women to the lowest rungs on the human ladder. We will see more honor killings by upset husbands, fathers, and brothers that demand subjugation by their daughters, sisters and wives. Muslims prefer beheadings of women to scare the hell out of any other members of their sect from straying. Multiculturalism: what a perfect method to kill our language, culture, country, and way of life.
I PRAY EVERYONE THAT READS THIS REALIZES THAT IF WE DON'T STAND UP, AND SCREAM AT WASHINGTON , AND OUR STATE, CITY, AND LOCAL LEADERS THIS IS WHAT AWAITS THE REST OF AMERICA . IF YOU FOLLOW THE NEWS AT ALL YOU KNOW THIS HAS HAPPENED IN ENGLAND , AND FRANCE AND SPAIN .
IF YOU THINK THIS IS JUST A BUNCH OF HOOEY AND YOU FEEL NO DUTY TO FIGHT FOR THIS COUNTRY, THEN I DON'T KNOW WHAT IT WILL TAKE FOR YOU TO STAND AND FIGHT.
"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote.”
-- Benjamin Franklin--
I am surprised that Alex the former CEO is not in jail.
http://www.prlog.org/11256162-alex-kanakaris-turns-passion-for-cars-into-museum-idea-for-kids-and-adults.html
Alex Kanakaris Turns Passion For Cars Into Museum Idea For Kids And Adults
Museum To Foster Global Involvement Of Children Through The Internet
FOR IMMEDIATE RELEASE
PRLog (Press Release) – Jan 27, 2011 – Santa Ana, CA-- Remembering the restrictions at typical car museums and shows on the participation of children, Alex Kanakaris has turned his passion for cars into a unique vision to benefit children and adults alike. One Of One™, The Car Museum For Kids (and Adults)™ is Kanakaris’s concepts for bringing something new and different to the world of cars, kids, art, history, culture, technology, environment and education. Starting with a flagship location in Santa Ana, Orange County, California, the Museum would break the mold of what a car museum is all about by adding a new and exciting perspective.
The goal of One of One, the Car Museum for Kids (and Adults) is to create of one of a kind car museum for kids (and adults) that lets boys and girls from the age of two to teen years share an experience both in the Museum and online. The goal of the experience is to instill learning about cars, art, technology, life and the possibilities of individual imagination, to inspire youth to make informed choices as they grow older, to have high self esteem, to learn the value of positive individual creativity, and to be given the tools and education to overcome adversities. It is also to support the creation and growth of new technologies that will preserve both the environment and the personal freedom that the automobile represents.
How It Differs From Other Museums
Unlike some car museums that have minimum age visitation requirements and emphasize cars that rarely are driven and conform to strict original production presentations, One of One features one-of-a-kind artistic interpretations (many created expressly for the Museum). In addition, the Museum uses the universal appeal that cars hold to young people as a backdrop for educational events to bring boys and girls knowledge and appreciation for being unique themselves. The Museum is an open door to the excitement of life that can be had without the distractions of drugs, alcohol abuse, or poor choices influenced by peers or resulting from broken families. The Museum uses computers and interactive technology to provide children with a multi-tiered learning experience.
A Catalyst To The Imagination Of A Child And Helping Those At Risk
The One of One is a wonderland for the mind of the young to see the possibilities for their future, a challenge to learn and create, and a positive social environment for interaction in a troubled world. The One of One will offer events that showcase the great power of diversity. The One of One will make its facility available for fundraisers and educational events to help all boys and girls and also boys and girls from troubled families or impoverished backgrounds and young women at risk.
Hands-On Opportunities For Youth At The Museum And Online
Naturally, the One of One will also offer young people many opportunities to actually be involved with the cars on display. In keeping with the innovations of the One of One concept, this is the first car museum in the world that will have its own 360 degree interactive companion web site. Young people the world over will be able to explore the collection by navigating in, around, even over and under our cars, thanks to 360 degree online photography technology. The website will even feature tools that will allow young people to create and submit design ideas to the Museum for possible use on cars in the collection.
Cars, the Environment and Tomorrow
The One of One’s Environmental Technology Learning Lab will be aimed at assisting young people in creating new technology ideas for the cars of the future, including all elements that can make future cars friendlier to the environment. Alternative power technologies, recyclable components, and other new design and science solutions will be showcased and explained.
Screening Room For Kids And Stars
The One of One’s Screening Room will be a place for both educational and entertaining films promoting the mission of the Museum. One of One is working with leading Hollywood talent, including actors, writers, and producers to interact with children at the museum through special screenings and Q & A sessions.
Alex Kanakaris is the Chairman and Co-Founder of GlobalBarterBanc.com . For more information send an email to info@globalbarterbanc.com
What The Silver Vigilantes Understand That You Probably Don't (Arithmetic, Human Nature and other Stuff)
Mark McHugh
Sorry about the insulting headline, but every last shred of evidence I can find suggests that the most people remain utterly clueless about silver, despite the efforts of the silver vigilantes, led by Max Keiser and Mike Kreiger. Their brilliantly simple plan (go get some physical silver) promises to topple the criminally insane fraud that has become US economy. It doesn't require politicians or regulators to lift a finger either, you simply take advantage of what is undoubtedly an artificially low price. I can completely understand anyone who is skeptical of that last statement; I'm sure you've been burned before, but that doesn't mean you should stop seeking truth.
Part 1. A little math
I'm not sure when performing basic arithmetic made you a conspiracy theorist, but here we are.
The 2009 World's population was about 6.8 Billion. According to the Silver Institute, total silver supply in 2009 was 889 million ounces. That means there was .13 ounces of silver produced for every human being on the planet. That looks like this:
Yep, your fair share of Worldwide silver production is a little less than the silver content of two pre-1965 dimes. That's all. A bargain at about four bucks when you consider the amazing properties of this element. FYI: World oil production per capita is 190 gallons.
This represents more than ten years of worldwide silver mining production divided by 2009 population. Less than $35, and hell of lot easier to transport than 7,600 quarts of Quaker State. Please note that so-called "World production" includes government sales and scrap. Government sales and "scrap" have accounted for more than 25% of "World Silver Production" from 2000 to 2009. I'm not sure I believe that one out of every four ounces of silver gets recycled, but understand that without that bonus production, demand exceeds supply by 37%.
Part 2. Who needs silver?
Just about everybody, it turns out. Sadly, another way to get yourself labeled a conspiracy theorist is by reading government documents like the Constitution, or the Department of the Interior's 2009 U.S. Geological Survey which states:
The physical properties of silver include ductility, electrical conductivity, malleability, and reflectivity. The demand for silver in industrial applications continues to increase and includes use of silver in bandages for wound care, batteries, brazing and soldering, in catalytic converters in automobiles, in cell phone covers to reduce the spread of bacteria, in clothing to minimize odor, electronics and circuit boards, electroplating, hardening bearings, inks, mirrors, solar cells, water purification, and wood treatment to resist mold. Silver was used for miniature antennas in Radio Frequency Identification Devices (RFIDs) that were used in casino chips, freeway toll transponders, gasoline speed purchase devices, passports, and on packages to keep track of inventory shipments. Mercury and silver, the main components of dental amalgam, are biocides and their use in amalgam inhibits recurrent decay.
Yet you can actually find dunces out there claiming that digital cameras have made silver obsolete. You should live so long…
Fun Fact: Silver (not gold, copper or anything else) is the element with the highest electrical conductivity.
Part 3. People lie…..
"…I want to make it equally clear that this nation will maintain the dollar as good as gold, freely interchangeable with gold at $35 an ounce, the foundation-stone of the free world's trade and payments system." - John F. Kennedy, July 18, 1963
"That we stand ready to use our gold to meet our international obligations-down to the last bar of gold, if that be necessary-should be crystal clear to all." - William McChesney Martin, Jr. (Federal Reserve Chairman) December 9, 1963
And…..
Lesson: When someone says you can exchange paper for precious metals - make the swap before they change the rules.
Since the invention of paper, people have been writing bogus notes, and if there are two time-tested methods to become wealthy beyond your wildest dreams, they are: 1)Selling stuff that doesn't exist and 2) Selling stuff you don't actually own. Unless you believe there has been a sudden outbreak of integrity in the banking industry, there's no reason to believe these dynamics are not still in play, is there? As recently as 2007, Morgan Stanley settled a class-action lawsuit with 22,000 clients who bought and paid storage on "phantom" silver (check out the Ted Butler article Money for Nothing).
At today's prices, a million dollars in gold weighs less than fifty pounds, but a million dollars in silver weighs more than 2,300 pounds! So ask yourself, how many rich people are storing their own silver? How many hedge funds hold physical silver in their own storage facility? Or have they entrusted the storage to the big banks?
JP Morgan is the custodian of the ishares Silver Trust (SLV), which now holds over 350 million ounces of silver, provides sovereign and corporate investors with precious metals solutions (JP's website), and is the largest short seller of silver in the history of the world. Berkshire Asset Management's Eric Fry writes:
Based on some of the latest conjecture, Morgan's short position totals a whopping 3.3 billion ounces. If, therefore, the buzz about J.P. Morgan and silver is even half true, the prestigious investment bank could be cruisin' for bruisin'.
For perspective, 3.3 billion ounces is roughly equal to:
1) One third of all the world's known silver deposits;
2) Two times the world's approximate stockpiles of silver bullion;
3) Four times the annual mined supply of silver;
4) 30 times the inventory of silver at the COMEX.
If you can, forget about the conflict of interest, and ponder the enormity of the explosion.
Part 4. A little more math
Estimates of total silver production since the dawn of man range from 46 to 53 billion ounces (roughly 11x gold production), but unlike gold, we've used pretty much all of it (although squandered might be a better word). It's in our cemeteries (fillings) and scattered throughout our landfills. There hasn't been a significant surplus since 1990. Ted Butler and others estimate that there is far less silver bullion in the world than gold bullion and they back up their case with numbers that the paperbugs have never even bothered to refute. So why does gold trade at more than 45 times the price of silver? Because JP Morgan, the US government, and every other psuedo-capitalist parasite wants it that way. But that's a truth for another day.
Part 5. Other things you should know
The Treasury has sold 34 million one ounce American Eagles so far in 2010. Those sales total less than one Billion dollars. Apple (AAPL) trades about that much every hour the market is open. Meanwhile the Treasury has issued more than 1.5 Trillion in new debt (1,500 times more) in 2010. Just for fun, let's multiply 1500 by 34 million. A transaction of that size would have equaled every last bit of silver ever discovered at $30 an ounce. Yet you can actually find people who believe silver is the bubble.
Treasury doesn't make it easy to buy silver
They'll sell you bills, bonds and notes directly online, but not precious metals at anything close to market price. The mint only does business with 11 Authorized Purchasers (a list can be found here), Why the lack of savvy?
China can blow up the COMEXs silver market in the blink of an eye, at any moment. They can do it with their pocket change, as a goof. And if we piss them off enough, they will.
Part 6. So what's silver worth?
The short answer is: more. If silver were priced based on its occurrence relative to gold, it would be over $125/oz. If it were priced on its availability - somewhere around $2,000. But if you are content to let the likes of Blythe Masters dictate the value based on truckloads of worthless paper promises, you can expect ultra-low prices until the whole thing blows up. Of course at that point, we'll be so busy killing each other for food no one will have time to say, "I told you so."
The silver vigilantes just want you to re-learn what the phrases like, "cold, hard cash," and "payment in full" are supposed to mean. There not asking you to sink everything you have into physical silver, just a little. Silver can't be printed into oblivion, or stolen by a cyber attack. Why wouldn't you want to own some of your very own?
A paper dollar from 1960 is worth exactly the same as a paper dollar in 2010, but four quarters from 1960 are worth more than $21. Given the fiscal insanity of the US government, I can't imagine the US dollar surviving another 50 years, but I'm quite sure that silver will still be useful.
Please consider getting some.
http://www.silverbearcafe.com/private/12.10/vigilantes.html
TSA caught in more radiation lies
TSA claims about the safety of its radioactive full-body scanners are falling apart -- and now, even the agency's pals are backing away.
Here's the deal: In a desperate attempt to prove those scanners are safe, the TSA named all sorts of agencies and organizations that it claimed was helping to test and maintain them.
Just one little problem: That was news to all those organizations and agencies.
Even the FDA wants nothing to do with this one -- a spokesman told AOL News that, despite TSA claims to the contrary, it has no role in testing the machines or inspecting the manufacturer.
They couldn't even do it even if they wanted to -- since the machines aren't medical devices, they're outside of the FDA's legal authority.
That's the first time I've ever heard of the FDA setting limits on itself!
In addition to the FDA, the U.S. Army Public Health Command, the Johns Hopkins Applied Physics Laboratory and the Health Physics Society all quickly backed away from the TSA's assertions that they had somehow signed off on the safety of these machines, according to the AOL report.
Sounds like the TSA might be adding some new names to its "enhanced patdown" list.
Even the TSA's own parent agency, the Department of Homeland Security, isn't helping out here -- because it refuses to release its own safety report on the full-body scanners.
I'm sure we'll see that report one of these days... just as soon as they're done fabricating it.
If the idea of an untested radioactive device being used to zap millions of innocent American travelers doesn't bother you, maybe this will: They're easily fooled.
A new report in the Journal of Transportation Security -- yes, we now live in a world that needs a scientific journal for transportation security -- finds that the "structural noise" of the human body can interfere with the scans just enough to hide a "pancake" of explosives taped to the abdomen.
And no amount of radiation would ever find it.
"Even if exposure were to be increased significantly, normal anatomy would make a dangerous amount of plastic explosive with tapered edges difficult if not impossible to detect," the researchers wrote.
Congratulations, America. You just bought a dangerous, intrusive, and expensive new security system -- and it doesn't even work.
Crashing the gate,
William Campbell Douglass II, M.D.
LOL, bring back susan007, the pps was much better when he/she was posting, and no PRs. LOL.
..........al
Sure would. Desparation and/or urgent need can forgo a wish for higher pps. With very few exceptions I always expect the worst, It has saved me taking more than a few haircuts and outright scalpings, LOL.
........al
90% of the time here in pinkyland, when I have seen this happen, it means someone is dumping shares big time. Legal expenses perhaps? It is not unusual to sned out a few news releases that sound real good, all the while dumping shares as the unwary buy into the news. Not saying this is happenning here, but I am suspicious. Large OS and much smaller float.
........al
You're insane if you don't own gold, investors told
http://www.telegraph.co.uk/finance/personalfinance/investing/gold/8253166/Youre-insane-if-you-dont-own-gold-investors-told.html
Robin Griffiths, a technical strategist at Cazenove Capital, told CNBC: "I think not owning gold is a form of insanity. It may even show unhealthy masochistic tendencies, which might need medical attention."
He added that the dollar was heading for "oblivion".
Mr Griffiths predicted that gold's 10-year bull run would continue and even intensify. "Although it's been a top performer for each of the last 10 years, it's still in a linear trend," he said. "Eventually it will go exponential and make more in the last little bit than the whole of the 10-year trend."
He said investors should regard any short-term falls in the gold price as a buying opportunity, adding that gold was still not an "over-owned trade".
His comments come against the background of the US Federal Reserve's huge monetary stimulus from quantitative easing, which many believe will result in inflation and a fall in the value of the dollar.
The downward trend in the dollar is awesomely powerful," Mr Griffiths said. "It's vital to get yourself out of the dollar long-term on any significant rally. Continuing to own a currency that is going to be printed virtually into oblivion – that's the official policy – is crazy."
He added: "Real assets hedge paper money being printed into oblivion, so you've got to own gold and you've got to own other commodity-related investments still."
Gold hit an all-time high of $1,432 last month and is currently trading around $1,375.
Meanwhile, the gold price would have to exceed $2,000 for the metal to be considered in a bubble, according to an analyst at Deutsche Bank. "We believe gold will continue to compete aggressively for investment capital," said Michael Lewis in a report.
OK guys and gals, they have returned 35 mill to the treasury. I think most of could agree it wasn't the best of moves to issue them in the first place especially in the recent shadow of a R/S. Just for my own info would everyone that contacted either the company or IR to voice their displeasure on the 35 mill share issue please drop me a blurb either here on in PM. It would just take a couple of seconds to just say "I did". My thanks to all.
............al
from Richard Russell:
“Perhaps Lord Keynes’ wisest admonition was when he said, “The market can stay irrational longer than you can stay solvent.”
Let’s take the current situation. The dollar is under attack, housing is still sick. unemployment remains a chronic problem, stocks are rising on a sea of liquidity. Iran and North Korea both have nuclear capabilities and are both “wildly unstable.” With this background, a stock market that is rising might easily be termed “irrational.”
I’m not the only analyst who considers a rising market in this area as “irrational.” My strategy, in view of what I just wrote, is to stay solvent. What’s my strategy for remaining solvent? Easy, I feel more comfortable out of the stock market and on the sidelines. I’m not saying that the stock market isn’t going higher. My PTI and my Lowry’s studies say that it is. But this stock market advance is a “pitch” that I’m not going to swing on. The bull market in gold is enough for me. I can sleep with my gold and silver positions. And frankly, I couldn’t sleep with a large position in the stock market. The reason — this market is too “irrational” for me. And I don’t say it’s irrational because of outside news events. I’m not saying that it’s just the unsolved housing mess that bothers me. No, it’s the fact that the dividend yield on the S&P is a micro 1.86%.
Buying a selection of stocks when the dividend yield is flashing “danger” is not my cup of tea. I’ve been around too long to feel that I have to be in the market every time it advances.. There’ll be other opportunities; the market is always there. I’ll enter the stock market when I like the “pitch.” In baseball, it’s three strikes and you’re out. In the stock market, one incorrect swing of the bat, and you can take a bath that will set you back financially for years — if not for life.”
This may be what you are looking for. It's a long form and will take time to fill out>
.......al
https://denebleo.sec.gov/tcr/add.action?c=12
Try this link:
http://www.sec.gov/complaint/selectconduct.shtml
If you are looking to file a complaint, this is the menu to choose from. Good luck with it.
..........al
lawrenzo, thanks for posting the numbers from the filings.
All along I had thought that NAR was the third party whenever I read about a promotion. While not totally conclusive, those numbers do point a finger at them.
I also remember this post:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=25180816
racerx992 Share Monday, December 10, 2007 2:48:46 PM
Re: None Post # of 195976
Good afternoon I am the investment advisor of North Atlantic Resources. I assure you it is not a defunct Gold Mining Company or anything of the sort. It is a fund that sources and capitalizes young emerging UNDISCOVERED companies. In fact to date we have provided capital in excess of 25 million dollars to small and mid cap companies. ETIM is one of those companies. We feel along with others that ETIM represents an aggressive small cap company. One that we feel as well will bring our investors a significant return within the next 12 months. If we had to speculate we would place these shares at approximately .50 by year end. We have not sold are not selling shares until it reaches are target price. So for all the bashers who feel the company is not worth buying great. If you're shorting the company even better (although that doesn't make any sense). And for those of you who are nervous I ask one question... What changed about the company since you bought your shares? The answer is quite simple... it has gotten better, stronger financially and closer to the goal of being listed on the Bulletin Board. In fact it's everything Management has told you they would do. So don't panic relax and enjoy the ride. Happy Holidays to all.
I wonder if the SEC should be notified of Mr Bogdon's attempt to manipulate the stock of TYTN. I can think of at least one regulation that was violated. There are also numerous grounds for civil suits if anyone sold at a loss based on his allegations posted here. Just FYI
...............al
Hi Don-
I wonder who the third party was. Who's eating these expenses?
I know it's tough defending the company after the actions of the past week, but I think the key phrase here is third party. Whatever you or myself or anyone else may think, we can't blame the company for what an outside party does. I've always thought it was NAR doing the third party thing, myself. Not sure but it makes sense.
.......al
CHANGES ARE COMING. Very sobering facts!!!!
Apologies, don't know the author and don't have a link. Just received it in an email and thought it worthy of a post.
........al
There is nothing political about this email.. It simply points out very probable changes that are in our future.
CHANGES ARE COMING ---- Whether these changes are good or bad depends in part on how we adapt to them. But, ready or not, here they come!
1. The Post Office. Get ready to imagine a world without the post office. They are so deeply in financial trouble that there is probably no way to sustain it long term. Email, Fed Ex, and UPS have just about wiped out the minimum revenue needed to keep the post office alive. Most of your mail every day is junk mail and bills.
2. The Check. Britain is already laying the groundwork to do away with checks by 2018. It costs the financial system billions of dollars a year to process checks. Plastic cards and online transactions will lead to the eventual demise of the check. This plays right into the death of the post office. If you never paid your bills by mail and never received them by mail, the post office would absolutely go out of business..
3. The Newspaper. The younger generation simply doesn't read the newspaper. They certainly don't subscribe to a daily delivered print edition. That may go the way of the milkman and the laundry man.. As for reading the paper online, get ready to pay for it. The rise in mobile Internet devices and e-readers has caused all the newspaper and magazine publishers to form an alliance. They have met with Apple, Amazon, and the major cell phone companies to develop a model for paid subscription services.
4. The Book. You say you will never give up the physical book that you hold in your hand and turn the literal pages. I said the same thing about downloading music fromiTunes. I wanted my hard copy CD. But I quickly changed my mind when I discovered that I could get albums for half the price without ever leaving home to get the latest music. The same thing will happen with books. You can browse a bookstore online and even read a preview chapter before you buy. And the price is less than half that of a real book. And think of the convenience! Once you start flicking your fingers on the screen instead of the book, you find that you are lost in the story, can't wait to see what happens next, and you forget that you're holding a gadget instead of a book.
5. The Land Line Telephone. Unless you have a large family and make a lot of local calls, you don't need it anymore Most people keep it simply because they've always had it. But you are paying double charges for that extra service. All the cell phone companies will let you call customers using the same cell provider for no charge against your minutes
6. Music. This is one of the saddest parts of the change story. The music industry is dying a slow death. Not just because of illegal downloading. It's the lack of innovative new music being given a chance to get to the people who would like to hear it. Greed and corruption is the problem. The record labels and the radio conglomerates are simply self-destructing. Over 40% of the music purchased today is "catalog items," meaning traditional music that the public is familiar with. Older established artists. This is also true on the live concert circuit. To explore this fascinating and disturbing topic further, check out the book, "Appetite for Self-Destruction" by Steve Knopper, and the video documentary, "Before the Music Dies."
7. Television. Revenues to the networks are down dramatically. Not just because of the economy. People are watching TV and movies streamed from their computers. And they're playing games and doing lots of other things that take up the time that used to be spent watching TV. Prime time shows have degenerated down to lower than the lowest common denominator. Cable rates are skyrocketing and commercials run about every 4 minutes and 30 seconds. I say good riddance to most of it. It's time for the cable companies to be put out of our misery. Let the people choose what they want to watch online and through Netflix.
8. The "Things" That You Own. Many of the very possessions that we used to own are still in our lives, but we may not actually own them in the future. They may simply reside in "the cloud." Today your computer has a hard drive and you store your pictures, music, movies, and documents. Your software is on a CD or DVD, and you can always re-install it if need be. But all of that is changing. Apple, Microsoft, and Google are all finishing up their latest "cloud services." That means that when you turn on a computer, the Internet will be built into the operating system. So, Windows, Google, and the Mac OS will be tied straight into the Internet. If you click an icon, it will open something in the Internet cloud. If you save something, it will be saved to the cloud. And you may pay a monthly subscription fee to the cloud provider. In this virtual world, you can access your music or your books, or your whatever from any laptop or handheld device. That's the good news. But, will you actually own any of this "stuff" or will it all be able to disappear at any moment in a big "Poof?" Will most of the things in our lives be disposable and whimsical? It makes you want to run to the closet and pull out that photo album, grab a book from the shelf, or open up a CD case and pull out the insert.
9. Privacy. If there ever was a concept that we can look back on nostalgically, it would be privacy. That's gone. It's been gone for a long time anyway. There are cameras on the street, in most of the buildings, and even built into your computer and cell phone. But you can be sure that 24/7, "They" know who you are and where you are, right down to the GPS coordinates, and the Google Street View. If you buy something, your habit is put into a zillion profiles, and your ads will change to reflect those habits. And "They" will try to get you to buy something else. Again and again.
All we will have that can't be changed are Memories.
Nineteen Facts About The Deindustrialization Of America That Will Blow Your Mind
The United States is rapidly becoming the very first "post-industrial" nation on the globe. All great economic empires eventually become fat and lazy and squander the great wealth that their forefathers have left them, but the pace at which America is accomplishing this is absolutely amazing. It was America that was at the forefront of the industrial revolution. It was America that showed the world how to mass produce everything from automobiles to televisions to airplanes. It was the great American manufacturing base that crushed Germany and Japan in World War II.
But now we are witnessing the deindustrialization of America . Tens of thousands of factories have left the United States in the past decade alone Millions upon millions of manufacturing jobs have been lost in the same time period. The United States has become a nation that consumes everything in sight and yet produces increasingly little. Do you know what our biggest export is today? Waste paper. Yes, trash is the number one thing that we ship out to the rest of the world as we voraciously blow our money on whatever the rest of the world wants to sell to us. The United States has become bloated and spoiled and our economy is now just a shadow of what it once was. Once upon a time America could literally out produce the rest of the world combined. Today that is no longer true, but Americans sure do consume more than anyone else in the world. If the deindustrialization of America continues at this current pace, what possible kind of a future are we going to be leaving to our children?
Any great nation throughout history has been great at making things. So if the United States continues to allow its manufacturing base to erode at a staggering pace how in the world can the U.S. continue to consider itself to be a great nation? We have created the biggest debt bubble in the history of the world in an effort to maintain a very high standard of living, but the current state of affairs is not anywhere close to sustainable. Every single month America goes into more debt and every single month America gets poorer.
So what happens when the debt bubble pops?
The deindustrialization of the United States should be a top concern for every man, woman and child in the country. But sadly, most Americans do not have any idea what is going on around them .
For people like that, take this article and print it out and hand it to them. Perhaps what they will read below will shock them badly enough to awaken them from their slumber.
The following are 19 facts about the deindustrialization of America that will blow your mind....
#1 The United States has lost approximately 42,400 factories since 2001.. About 75 percent of those factories employed over 500 people when they were still in operation.
#2 Dell Inc., one of America 's largest manufacturers of computers, has announced plans to dramatically expand its operations in China with an investment of over $100 billion over the next decade.
#3 Dell has announced that it will be closing its last large U.S. manufacturing facility in Winston-Salem , North Carolina in November. Approximately 900 jobs will be lost.
#4 In 2008, 1.2 billion cell phones were sold worldwide. So how many of them were manufactured inside the United States ? Zero.
#5 According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.
#6 As of the end of July, the U.S. trade deficit with China had risen 18 percent compared to the same time period a year ago.
#7 The United States has lost a total of about 5.5 million manufacturing jobs since October 2000.
#8 According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30 percent to 10.1 million. During that exact same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million.
#9 In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent.
#10 Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger in St. Paul , Minnesota . Approximately 750 good paying middle class jobs are going to be lost because making Ford Rangers in Minnesota does not fit in with Ford's new "global" manufacturing strategy.
#11 As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans were employed in manufacturing was in 1941.
#12 In the United States today, consumption accounts for 70 percent of GDP. Of this 70 percent, over half is spent on services.
#13 The United States has lost a whopping 32 percent of its manufacturing jobs since the year 2000.
#14 In 2001, the United States ranked fourth in the world in per capita broadband Internet use. Today it ranks 15th.
#15 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.
#16 Printed circuit boards are used in tens of thousands of different products. Asia now produces 84 percent of them worldwide.
#17 The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States .
#18 One prominent economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.
#19 The U.S. Census Bureau says that 43.6 million Americans are now living in poverty and according to them that is the highest number of poor Americans in the 51 years that records have been kept.
America is in deep, deep trouble folks. It is time to wake up
I think most of us knew that. If not the owner at least someone with a monied interest. Way too much negative posting with info no one else could seem to locate to be a non involved entity. I guess he/she will be in bankruptcy court next to avoid paying the settlement. JMHO
..........al
Iceland is the only country that has so far stuck it to the bankers. While the rest of the world is doing nothing but cater to the bankers and seems to be sliding deeper into recession/depression, Iceland is now emerging and chugging along. Are any of our elected representatives seeing this? Could they possibly crawl out of the back pockets of the bankers long enough to take a good look at what has worked, the only thing that has worked so far? I'm in a dreamworld again, LOL.
...........al
Yet no one is talking about Iceland. They told the banks and bond holders, sorry you knew the risks. Now thier exports are up, unemployment is down and the economy is chugging along just fine according to reports out of Iceland. A good lesson to teach the Eurozone and the USA?
.........al
What I am seeing right now is-
A company with $2 million in sales with a market cap of $375K. Even with the threat of the R/S still hanging in the air, those numbers are not even close to being in line. Either sales will have to decrease or the pps will have to increase. When enough people that want to make some serious $$$ see this, I think you get my drift. GL2 all.
..........al
Deepening crisis traps America's have-nots.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8249181/Deepening-crisis-traps-Americas-have-nots.html
The US is drifting from a financial crisis to a deeper and more insidious social crisis. Self-congratulation by the US authorities that they have this time avoided a repeat of the 1930s is premature.
There is a telling detail in the US retail chain store data for December. Stephen Lewis from Monument Securities points out that luxury outlets saw an 8.1pc rise from a year ago, but discount stores catering to America’s poorer half rose just 1.2pc.
Tiffany’s, Nordstrom, and Saks Fifth Avenue are booming. Sales of Cadillac cars have jumped 35pc, while Porsche’s US sales are up 29pc.
Cartier and Louis Vuitton have helped boost the luxury goods stock index by almost 50pc since October. Yet Best Buy, Target, and Walmart have languished.
Such is the blighted fruit of Federal Reserve policy. The Fed no longer even denies that the purpose of its latest blast of bond purchases, or QE2, is to drive up Wall Street, perhaps because it has so signally failed to achieve its other purpose of driving down borrowing costs.
Yet surely Ben Bernanke’s `trickle down’ strategy risks corroding America’s ethic of solidarity long before it does much to help America’s poor.
The retail data can be quirky but it fits in with everything else we know. The numbers of people on food stamps have reached 43.2m, an all time-high of 14pc of the population. Recipients receive debit cards – not stamps -- currently worth about $140 a month under President Obama’s stimulus package.
The US Conference of Mayors said visits to soup kitchens are up 24pc this year. There are 643,000 people needing shelter each night.
Jobs data released on Friday was again shocking. The only the reason that headline unemployment fell from 9.7pc to 9.4pc was that so many people dropped out of the system altogether.
The actual number of jobs contracted by 260,000 to 153,690,000. The “labour participation rate” for working-age men over 20 dropped to 73.6pc, the lowest the since the data series began in 1948. My guess is that this figure exceeds the average for the Great Depression (minus the cruellest year of 1932).
“Corporate America is in a V-shaped recovery,” said Robert Reich, a former labour secretary. “That’s great news for investors whose savings are mainly in stocks and bonds, and for executives and Wall Street traders. But most American workers are trapped in an L-shaped recovery.”
It is no surprise that America’s armed dissident movement has resurfaced. For a glimpse into this sub-culture, read Time Magazine’s “Locked and Loaded: The Secret World of Extreme Militias”.
Time’s reporters went underground with the 300-strong `Ohio Defence Force’, an eclectic posse of citizens who spend weekends with M16 assault rifles and an M60 machine gun training to defend their constitutional rights by guerrilla warfare.
As it happens, I spent some time with militia groups across the US at the tail end of the recession in the early 1990s. While the rallying cry then was gun control and encroachments on freedom, the movement was at root a primordial scream by blue-collar Americans left behind in the new global dispensation. That grievance is surely worse today.
The long-term unemployed (more than six months) have reached 42pc of the total, twice the peak of the early 1990s. Nothing like this has been seen since the World War Two.
The Gini Coefficient used to measure income inequality has risen from the mid-30s to 46.8 over the last quarter century, touching the same extremes reached in the Roaring Twenties just before the Slump. It has also been ratcheting up in Britain and Europe.
Raghuram Rajan, the IMF’s former chief economist, argues that the subprime debt build-up was an attempt – “whether carefully planned or the path of least resistance” – to disguise stagnating incomes and to buy off the poor.
“The inevitable bill could be postponed into the future. Cynical as it might seem, easy credit has been used throughout history as a palliative by governments that are unable to address the deeper anxieties of the middle class directly,” he said.
Bank failures in the Depression were in part caused by expansion of credit to struggling farmers in response to the US Populist movement.
Extreme inequalities are toxic for societies, but there is also a body of scholarship suggesting that they cause depressions as well by upsetting the economic balance. They create a bias towards asset bubbles and overinvestment, while holding down consumption, until the system becomes top-heavy and tips over, as happened in the 1930s.
The switch from brawn to brain in the internet age has obviously pushed up the Gini count, but so has globalization. Multinationals are exploiting “labour arbitrage” by moving plant to low-wage countries, playing off workers in China and the West against each other. The profit share of corporations is at record highs across in America and Europe.
More subtly, Asia’s mercantilist powers have flooded the world with excess capacity, holding down their currencies to lock in trade surpluses. The effect is to create a black hole in the global system.
Yes, we can still hope that this is a passing phase until rising wages in Asia restore balance to East and West, but what it if it proves to be permanent, a structural incompatibility of the Confucian model with our own Ricardian trade doctrine?
There is no easy solution to creeping depression in America and swathes of the Old World. A Keynesian `New Deal’ of borrowing on the bond markets to build roads, bridges, solar farms, or nuclear power stations to soak up the army of unemployed is not a credible option in our new age of sovereign debt jitters. The fiscal card is played out.
So we limp on, with very large numbers of people in the West trapped on the wrong side of globalization, and nobody doing much about it. Would Franklin Roosevelt have tolerated such a lamentable state of affairs, or would he have ripped up and reshaped the global system until it answered the needs of his citizens?