We are about to find out how socialism works.
http://www.kitco.com/ind/Turk/turk_dec212009.html
Monday, December 28, 2009
Sunday, December 27, 2009
John Williams of shadowstats.com
John Williams, founder of the website shadowstats.com, is infamous for publishing true unemployment and underemployment numbers. He is now oft-quoted and cited even among government economists, so his statistics have legitimacy behind them. He is not viewed as a wild-eyed radical extremist, which make his forecasts extremely discomfiting, if not alarming.
http://www.fairfieldweekly.com/article.cfm?aid=16014
http://www.fairfieldweekly.com/article.cfm?aid=16014
2009 Quarter 3 GDP numbers
Officially reported as 3.5%, 2009 Quarter 3 GDP numbers were then revised to 2.8% several weeks later, as our national's gross domestic product did not grow as fast as originally measured. Several weeks later, economic growth was revised downward again to 2.2%, much of the gains coming from inventory replenishment and the one-time Cash-for-Clunkers auto rebate program.
With most recoveries from deep recessions, GDP growth on the other side of the valley approaches a positive 6 to 8%. It will be interesting to see what the current quarter economic growth numbers will be.
With most recoveries from deep recessions, GDP growth on the other side of the valley approaches a positive 6 to 8%. It will be interesting to see what the current quarter economic growth numbers will be.
Friday, December 25, 2009
John Embry on gold
John Embry of Sprott Asset Management on the supply/demand dynamics of gold:
http://www.sprott.com/Docs/InvestorsDigest/2009/12_24_2009%20Gold%20bull%20has%20many%20years,%20thousands%20of%20dollars%20to%20go.pdf
http://www.sprott.com/Docs/InvestorsDigest/2009/12_24_2009%20Gold%20bull%20has%20many%20years,%20thousands%20of%20dollars%20to%20go.pdf
Tuesday, December 22, 2009
Christmas in Vegas
After a few days of intermingling with folks in Las Vegas, I've come to the conclusion most Americans are aware of our nation's problems, but they refuse to think much about it, hoping our economy will somehow transform itself and recover. Call it the Santa Claus effect. Well, I hate to be the "Scrooge", but this editorial unfortunately sums up the state of our country accurately and honestly.
http://realityarbiter.com/2009/12/american-purgatory/
Thursday, December 17, 2009
Ben Bernanke
By Olivier Garret, CEO, Casey Research
Ben Bernanke is a dubious choice to be named “Person of the Year” by Time magazine. While Time’s Managing Editor Richard Stengel credits him with recognizing early and reacting appropriately to the ongoing financial crisis, in reality, he was wrong time and again with both his predictions and his remedies. Just remember these gems:
* On July 1, 2005, Bernanke stated without hesitation that we were not experiencing a housing bubble: “I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit.”
* November 2005, on derivatives: “With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.” And “the Federal Reserve’s responsibility is to make sure that the institutions it regulates have good systems and good procedures for ensuring that their derivatives portfolios are well managed and do not create excessive risk in their institutions.”
* February 15, 2006: “Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”
* February 2008: “I expect there will be some failures of smaller banks” (Bear Stearns collapsed a couple of weeks later).
* But then again, I guess in regards to his nomination we are talking about achievements in 2009. That was the year Bernanke said, "Currently, we don’t think [the unemployment rate] will get to 10 percent."
This is the same chairman of the Federal Reserve who told us that Fannie and Freddie were “adequately capitalized” and “in no danger of failing.”
Unfortunately, he has not just been wrong about housing, unemployment, banking, and derivatives – his policies have directly contributed to all of the problems we now face.
High unemployment and the weak dollar threaten to further undermine our economy, yet his policy is to just keep borrowing. The massive debt his policies have foisted on the American taxpayer is weakening the U.S.’s position as global economic leader and hurting already tenuous relations with foreign governments. Bernanke has supported the policies of Greenspan and our current and previous administrations – the very policies that got us into this mess. He has supported the leveraging of the American economy to rescue companies long past saving and the borrowing of billions from foreign governments to line the pockets of corrupt investment bankers.
I could recommend a few alternative names for runner-up, if Time’s criteria are really as dubious as they appear:
* Lloyd Blankfein from Goldman Sachs for robbing taxpayers legally
* Rick Wagoner of GM for taking the world’s largest car maker to bankruptcy in a quarter-century
* Tim Geithner for ensuring that all of our bankers prospered during the worst financial crisis since the ‘30s
* Tiger Woods for providing the nation with great dinner conversations and helping to spur tabloid sales.
Bernanke is insistent on using inflation to make our personal debts seem small, all the while setting the country up for a much larger disaster long term. Bernanke is borrowing from Peter to pay Paul… and robbing taxpayers to pay Peter.
As you may have noticed, the government will not save you from the reverberations of a declining U.S. economy. You’ll have to take matters into your own hands.
Ben Bernanke is a dubious choice to be named “Person of the Year” by Time magazine. While Time’s Managing Editor Richard Stengel credits him with recognizing early and reacting appropriately to the ongoing financial crisis, in reality, he was wrong time and again with both his predictions and his remedies. Just remember these gems:
* On July 1, 2005, Bernanke stated without hesitation that we were not experiencing a housing bubble: “I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit.”
* November 2005, on derivatives: “With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.” And “the Federal Reserve’s responsibility is to make sure that the institutions it regulates have good systems and good procedures for ensuring that their derivatives portfolios are well managed and do not create excessive risk in their institutions.”
* February 15, 2006: “Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”
* February 2008: “I expect there will be some failures of smaller banks” (Bear Stearns collapsed a couple of weeks later).
* But then again, I guess in regards to his nomination we are talking about achievements in 2009. That was the year Bernanke said, "Currently, we don’t think [the unemployment rate] will get to 10 percent."
This is the same chairman of the Federal Reserve who told us that Fannie and Freddie were “adequately capitalized” and “in no danger of failing.”
Unfortunately, he has not just been wrong about housing, unemployment, banking, and derivatives – his policies have directly contributed to all of the problems we now face.
High unemployment and the weak dollar threaten to further undermine our economy, yet his policy is to just keep borrowing. The massive debt his policies have foisted on the American taxpayer is weakening the U.S.’s position as global economic leader and hurting already tenuous relations with foreign governments. Bernanke has supported the policies of Greenspan and our current and previous administrations – the very policies that got us into this mess. He has supported the leveraging of the American economy to rescue companies long past saving and the borrowing of billions from foreign governments to line the pockets of corrupt investment bankers.
I could recommend a few alternative names for runner-up, if Time’s criteria are really as dubious as they appear:
* Lloyd Blankfein from Goldman Sachs for robbing taxpayers legally
* Rick Wagoner of GM for taking the world’s largest car maker to bankruptcy in a quarter-century
* Tim Geithner for ensuring that all of our bankers prospered during the worst financial crisis since the ‘30s
* Tiger Woods for providing the nation with great dinner conversations and helping to spur tabloid sales.
Bernanke is insistent on using inflation to make our personal debts seem small, all the while setting the country up for a much larger disaster long term. Bernanke is borrowing from Peter to pay Paul… and robbing taxpayers to pay Peter.
As you may have noticed, the government will not save you from the reverberations of a declining U.S. economy. You’ll have to take matters into your own hands.
Jim Rogers
Legendary billionaire investor and hedge fund manager Jim Rogers gives his summary on asset classes in a CNBC interview. It is instructive to watch the whole video to the end.
Rogers is especially critical of Fed Chairman Bernanke, US Treasury Secretary Geithner, and President Obama for printing too many USDollars, and castigates central banks worldwide for turning on the printing presses.
The only disagreement I have is on owning certain foreign currencies. He suggested the Swiss Franc, Japanese Yen, and Canadian Dollar. The Swiss Franc has traditionally been a stable currency due to their conservative monetary policies, but even Swiss banks have veered away from financial discipline, making bad real estate loans to the Baltic States and eastern Europe. Japan is in worse fiscal shape than the US, as their national debt has grown to monstrous levels relative to gross domestic product. On the other hand, the Canadian Dollar is a safe bet, as they are a resource-rich country which will benefit from the appreciation of hard assets (precious metals, rare earth metals, energy). The Brazilian real, Australian Dollar, and Norwegian Krona are other foreign currencies which should do well going forward, since they are creditor nations with sound fiscal policies and exporters of natural resources.
Disclosure: no position in foreign currencies, long gold and silver mining shares, long natural gas pipeline master limited partnerships.
Rogers is especially critical of Fed Chairman Bernanke, US Treasury Secretary Geithner, and President Obama for printing too many USDollars, and castigates central banks worldwide for turning on the printing presses.
The only disagreement I have is on owning certain foreign currencies. He suggested the Swiss Franc, Japanese Yen, and Canadian Dollar. The Swiss Franc has traditionally been a stable currency due to their conservative monetary policies, but even Swiss banks have veered away from financial discipline, making bad real estate loans to the Baltic States and eastern Europe. Japan is in worse fiscal shape than the US, as their national debt has grown to monstrous levels relative to gross domestic product. On the other hand, the Canadian Dollar is a safe bet, as they are a resource-rich country which will benefit from the appreciation of hard assets (precious metals, rare earth metals, energy). The Brazilian real, Australian Dollar, and Norwegian Krona are other foreign currencies which should do well going forward, since they are creditor nations with sound fiscal policies and exporters of natural resources.
Disclosure: no position in foreign currencies, long gold and silver mining shares, long natural gas pipeline master limited partnerships.
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