Tuesday, May 31, 2011
Horrible economic reports offset by easing of "perceived risk of immediate Greek debt restructuring"
Monday, May 30, 2011
Saturday, May 28, 2011
Friday, May 27, 2011
Thursday, May 26, 2011
Overall, the data left the first quarter looking weaker as higher oil prices and severe weather (you know that can't last forever!) sapped the strength seen in the fourth quarter.
Final sales, which exclude inventory behavior, were revised down to a 0.6% gain in the first quarter from the initial estimate of a 0.8% increase.
The report also included revised labor-compensation data that were much weaker than first estimated.
Real disposable personal incomes increased at a revised 0.8% annual rate in the first quarter, compared with the initial 2.9% estimate. Income in the fourth quarter was also revised lower.
So why was the GDP number not revised lower? Because business inventories (stuff they've made but haven't sold) was revised upward! And of course you know they'll sell it all, and make lots of money and hire lots of people in the FUTURE!
And anyway, the economy is growing - not shrinking. You know there's lots of starving countries in Africa that would love to have a 1.8 percent growth rate. Lots of countries that go to bed hungry every night with no GDP at all!
And a survey of Leading Economists assures us that next quarter our GDP will grow by 3.4%. So there, all you Frownie Freddies!
So what if we were forced to account for our GDP the way the IMF makes those African countries account for their GDP ours would be negative too. The IMF can't tell us what to do. We're the United States of America, the Best of All Possible Countries, in the best of all possible worlds. So smile. Don't frown. And buy lots of stocks!
Or, if you're crazy, buy gold. Dennis Gartman, a long time critic of gold has now converted fully to the gold camp and writes today: "This then brings us to our daily discussion of gold of which we remain steadfastly bullish in dollar terms and in terms of other currencies. Gold, as we wish to say and as others are coming to believe and understand, is now a currency rather than a commodity. Silver, platinum and palladium are the precious commodities; gold is the precious currency.
Wednesday, May 25, 2011
Market rises on great news: U.S. Durable Goods Orders Fell 3.6%, and Home prices delined 5.5 % in April
Orders for U.S. durable goods dropped more than forecast in April, reflecting a slump in aircraft demand and disruptions in supplies of auto parts stemming from the earthquake in Japan.
The 3.6 percent decrease in bookings for goods meant to last at least three years was the biggest since October and followed a 4.4 percent surge in March that was larger than previously estimated, a Commerce Department report showed today in Washington. Economists projected a 2.5 percent April decline, according to the median forecast in a Bloomberg News survey.
“Manufacturing is likely to moderate from the explosive pace of growth in the past few months,” said Stephen Stanley chief economist at Pierpont Securities LLC. At the same time, “consumer demand and investment demand are both doing well right now,” he said.
The great news about the massive explosion of manufacturing growth here and all around the world is matched only by the tremendously good news in the housing industry:
U.S. home prices dropped 5.5 percent in the first quarter from a year earlier, the biggest decline in almost two years, as sales of discounted foreclosures undermined real estate values.
Prices fell 2.5 percent from the fourth quarter, the Washington-based Federal Housing Finance Agency said today in a report. Economists projected a 1.2 percent drop from the previous three months, according to the median of five estimates in a Bloomberg survey.
This great news was celebrated by the National Association of Realtors that noted: Home sales are expected to stay on an uptrend through 2012, although the performance will be uneven with mortgage constraints weighing on the market, according to experts at a residential real estate forum today at the Realtors® Midyear Legislative Meetings & Trade Expo here.
Hard to imagine how things could get any better. Hopefully tomorrow's GDP revisions will show a huge decline further indicating the current economic boom is accelerating.
Also MORE GOOD NEWS FROM THE EEC - There's no debt Crisis! As EU debt markets come under renewed pressure amid a broadening in the scope of downgrades to sovereign credit ratings, and ratings outlooks, we note commentary from the Union's Economic and Monetary Affairs Commissioner Olli Rehn :
... "We have contained the crisis to the three countries now in the EU-IMF programs. It is not correct to speak of a crisis of the euro or monetary union."
And GREECE is doing even better than we are! Our manufacturing only managed a 3./5 % decline, in Greece they scored with a double-digit decline in the year-year rate of Manufacturing Output, which plunged by (-) 10.3% during March, sliding from a (-) 6.8% yr-yr contraction in February, and the (-) 4.5% yr-yr decline seen in January. So if we're having a boom - they must be having a manufacturing explosion! Good for them.
If things go well enough maybe soon we'll be right up there with Greece. Things just keep getting better and better.
Tuesday, May 24, 2011
CLICK THE CHARTS TO VIEW LARGER PICTURES
Monday, May 23, 2011
This accomplishes the following:
1) It keeps the cost of DEBT: INTEREST RATES low.
2) It keeps a liquid market for our DEBT so we can keep borrowing to finance our GOVERNMENT.
3) It props up RISK MARKETS like the STOCK MARKET and the Secondary Market for RISKY DEBT like Mortgages.
The only casualty is the value of the DOLLAR which declines because more and more are created to buy the DEBT.
Consequently all real goods get more and more expensive.
Here then is the FED's DILLEMA.
CHOICE ONE: END QUANTITATIVE EASING: Then even if we were to balance the budget this year, we still need to issue 14 Trillion dollars of new debt. If the Fed doesn't buy this debt, Interest Rates will go sky high - in order to attract Real Buyers. And the cost of Financing our 100 Trillion Dollar Real Debt becomes impossible. Meanwhile the Banks have no more money to prop up the Stock Market. In fact, they will be functionally bankrupt. And Trillions in wealth will be destroyed as the stock market and risky debt markets crash. We have a real depression.
CHOICE TWO: Keep printing money to buy our own debt, and prop up the risk markets. Meanwhile destroying the value of the dollar and sending commodity prices sky high.
That's it folks. There are no other choices. Sorry.
Sunday, May 22, 2011
In October of 2008 the team of George W Bush and Dick Cheney engineered the greatest socialist coup in the history of the world as nearly 5 trillion dollars of tax payer money was transferred unencumbered to a select number of banks, investment banks and insurance companies, without rule, without restriction, without oversight and with no requirement for any sort of accounting or restitution. This 5 trillion dollars was gifted within the course of a few short months.
Today, the Real Economy Project of the Center for Media and Democracy (CMD) released an assessment of the total cost to taxpayers of the Wall Street bailout. CMD concludes that multiple federal agencies have disbursed $4.6 trillion dollars in supporting the financial sector since the meltdown in 2007-2008. Of that, $2 trillion is still outstanding. Our tally shows that theFederal Reserve is the real source of the bailout funds.
CMD’s assessment demonstrates that while the press has focused its attention on the $700 billion TARP bill passed by Congress, the Federal Reserve has provided by far the bulk of the funding for the bailout in the form of loans amounting to $3.8 trillion. Little information has been disclosed about what collateral taxpayers have received in return for these loans, sparking theBloomberg news lawsuit covered earlier. CMD also concludes that the bailout is far from over, as the government has active programs authorized to cost up to $2.9 trillion and still has $2 trillion in outstanding investments and loans.
Learn more about the 35 programs included in the CMD tally by visiting our Total Wall Street Bailout Cost Table, which contains links to pages on each bailout program with details including the current balance sheet for each program.
Compare this with Obamacare, whose cost over the next 50 years is estimated at 2 trillion dollars. My Goodness,the arch socialist Obama has a lot to learn from his Republican Masters, if he's ever to approach their talent for Arbitrary Transfer of Wealth.
Even Arch Socialist Ronald Reagan when he transferred wealth to his buddies at the Savings and Loans was only able to muster a paltry 500 billion. Of course, in 1980's dollars that's worth over a trillion of 2011 dollars. So Obama is every bit the socialist equal of Reagan. But you can lump them both together, throw in the Marshall Plan, the Korean War, the Viet Nam War, and the Iraqi War (also courtesy of GW Bush) and you still wouldn't reach the cost of Bush and Cheney's experiment with Socialist Engineering for the Banks.
Of course, to state the obvious, the US has had a CENTRAL BANK - the primary engine of SOCIALIST ENGINEERING - since 1919. This Central Bank engages in CENTRAL PLANNING of the creation, distribution, and flow of MONEY. How is it that it hasn't occurred to everyone that this makes us a socialist republic?
And again, what does this have to do with Gold?
Well, if you have to ask, consider that the people in government currently screaming loudest about socialism and the debt problem are looking to the big spending, social engineering model of Bush Cheney and Reagan as some sort cure.
Maybe you should buy some gold.
Saturday, May 21, 2011
Friday, May 20, 2011
World Gold Council Q1: ETF speculation dwindles. Central Bank, bullion demand continues to drive growth
- Global gold demand in the first quarter of 2011 totalled 981.3 tonnes, up 11% year-on-year from 881.0 tonnes in the first quarter of 2010. In value terms, this translated to US$43.7bn, compared with US$31.4bn in the first quarter of 2010, an increase of almost 40%. This was largely attributable to a widespread rise in demand for bars and coins, supported by an improvement in jewellery demand in key markets.
- During the first quarter of the year, investment demand grew by 26% to 310.5 tonnes from 245.6 tonnes in the first quarter of 2010. In value terms, investment demand was US$13.8bn. The main growth came from bar and coin demand which increased by 52% year-on-year, to 366.4 tonnes. In value terms, this represented a near-doubling of demand to US$16.3bn from US$8.6bn in Q1 2010.
- ETFs and similar products witnessed net outflows of 56 tonnes ($2.5bn). Redemptions were concentrated in January. Despite the outflows, the collective volume of gold held by global ETFs by the end of the quarter was in excess of 2,100 tonnes equating to more than $95bn.
- Jewellery demand in the first quarter of 2011 registered a gain of 7% from year earlier levels of 521.3 tonnes to reach 556.9 tonnes. This equated to a record quarterly value of US$24.8bn. India and China, the two largest markets for gold jewellery, together accounted for 349.1 tonnes or 63% of the total, a value of US$16bn. China’s jewellery demand reached a new quarterly record of 142.9 tonnes ($6.4bn) up 21% from 118.2 tonnes in the first quarter of 2010.
- In Q1 2011, gold supply declined by 4% year-on-year to 872.2 tonnes from 912.1 tonnes in the first quarter of 2010. This decline was due to a sharp increase in net purchasing by the official sector and a fall in the supply of recycled gold, which was down 6% on year-earlier levels to 347.5 tonnes from 369.3 tonnes in the first quarter of 2010. Mine production increased by 44 tonnes year-on-year, a growth rate of 7% from year earlier levels, with negligible net producer de-hedging.
- Central bank purchases jumped to 129 tonnes in the quarter, exceeding the combined total of net purchases during the first three quarters of 2010.
Thursday, May 19, 2011
Wednesday, May 18, 2011
A NEW GOLD STANDARD: Are Allen Greenspan, Steve Forbes, Ron Paul, Jim Grant, Robert Zoellick crazy fringe end-of-worlders?
“What seems astonishing today could become conventional wisdom in a short period of time. Such a move would help to stabilize the value of the dollar, restore confidence among foreign investors in U.S. government bonds, and discourage reckless federal spending."
Money comes out with real value. So over the many, many centuries, literally thousands of years, gold and silver has been used. And the founders understood this. They had runaway inflation. They explicitly said, "You can't emit bills of credit." And you want to restrain the authorities. So if you want to restrain government, you restrain the power to create money. And that's what gold does. A lot of people think, "Well, that means you're going to have to carry all that gold around in your pocket." No. There's nothing wrong with gold certificates. And it can be electronic gold. It's just that it restrains the power of individuals, especially secret individuals that have no oversight from Congress to create this money.
Leading economies should consider adopting a modified global gold standard to guide currency rates, World Bank president Robert Zoellick said on Monday in a surprise proposal before a potentially acrimonious G20 summit.
Writing in the Financial Times, Zoellick called for a "Bretton Woods II" system of floating currencies as a successor to the Bretton Woods fixed-exchange rate regime that broke down in the early 1970s.
ALSO from ABC NEWS 2011:
In a move that reflects growing anxiety over rising inflation and a weak economy, South Carolina became the newest state to propose a bill that would make gold and silver coins a form of legal tender in the state.
Utah started the trend, becoming the first state on May 9 to recognize gold and silver coins minted by the U.S. government as legal tender. More than a dozen other states are considering similar moves.
WHAT DOES THIS MEAN FOR THE PRICE OF GOLD?
You can be sure that any type of gold standard - no matter how partial, how convertible, would require a price of gold several times what it is now.
Tuesday, May 17, 2011
This is quoted directly from Shadowstats, a site that gives straight up interpretation to the government economic releases. No spin. Subscription prices are reasonable. Check out today's commentary and see if you want to subscribe. (I get nothing by plugging this site. I just think everyone should know about it.)
"The U.S. economy is not in recovery, and what ever upside bouncing there was in retail sales and industrial production increasingly appears to have been transient in nature. In this morning’s (May 17th) reporting, April 2011 housing starts continued their broad downtrend, bouncing downhill in renewed deterioration. More important than the statistically-insignificant monthly decline of 10.6%, the annual decline of 23.9% was significant, and the six-month moving-average has declined for the last three months, pushing the historic low level seen in April 2009.
Along with meaningful downside revisions to prior reporting (all post-benchmark), the Fed reported April 2011 industrial production to have been flat for the month, with the manufacturing component down by 0.4%. Without economic weakness being shifted in revision to earlier periods, the aggregate production index would have fallen by 0.5% for the month in April, with manufacturing production down by 1.1%.
In tandem with last week’s reporting of retail sales activity gaining less than 0.1%, net of higher prices (see Commentary No. 368), production activity appears to have stalled, with housing and consumer liquidity issues leading general economic activity into what eventually should be recognized as a double-dip recession.
Monday, May 16, 2011
Friday, May 13, 2011
Wednesday, May 11, 2011
Tuesday, May 10, 2011
The PHANES coin above has survived for 2500 years and is still an object of value, fascination, and contemplation. How much longer do you think the dollar will survive?
Monday, May 9, 2011
Saturday, May 7, 2011
Friday, May 6, 2011
Thursday, May 5, 2011
Wednesday, May 4, 2011
Tuesday, May 3, 2011
The South African Natura Series, with images of African Wildlife trade at a very small premium to regular bullion gold despite the tiny mintages and the quality images.