"Americans Show Clear Concerns on Bush Agenda"
"Concerns" will be an understatement soon...
- Captain Hook, which you gotta admit is a great name, has a new essay entitled "Commercial Short Squeeze Underway" He writes that "At the moment, we are working on a macro-oriented study that will blow people's socks off when they realize the future implications." And I jump up to my feet and say "Socks, schmocks! My Mogambo Macro-Oriented Study (MM-OS) will blow your whole freaking head off like you got hit with a grenade launcher! I snort contemptuously at your puny socks!" He ignores me, and like I wasn't even there goes on to write "Here is a glimpse into the future for you now, where factors such as price inflation in foodstuffs has been relatively subdued literally since the birth of modern US modeled finance, but where it appears technological gains in production are finally to be overrun by global demand side constraints, with the net effect being a potentially large catch-up move in prices commensurate to the monetary inflation that has occurred over the past 80 years."
The good Captain then proceeded to show a graph of inflation-adjusted corn prices, and man, oh man, it looks scary, which probably is what prompted him to include the phrases "coiled spring" and "there's no free lunch."
"Corn, along with the rest of the grains complex, is very cheap at present from a historical perspective, especially considering nominal prices are trading at levels seen in peak instances back in the 20's."
Not only did he give us a nice tip to start amassing some corn and grain futures, but he has also included, at no extra cost, a nice little Technical Tidbit, and reveals that "gold has a non-lagged relationship to the PPI." Which means that as commodity prices go up, gold will march along with them in lockstep. Nice to know!
- Chuck Butler, the currency wizard who writes the Daily Pfennig at DailyReckoning.com, says "John Snow has signaled to the markets that there is no floor on the dollar," which shows that John Snow is not as stupid as he sounds. In fact, Mr. Snow sounds downright educated when he says, "The history of efforts to impose non- market valuations on currencies is at best unrewarding and checkered.''
- If you are cruising around the Kitco site, and take a look at the gold lease rate. The various durations of the leases were kind of tending down, until November 15, when the year-rate went bananas.
- Addison Wiggin, who is also one of the big shots from the Daily Reckoning and who could crush me like a bug with just the emanations from his powerful brain, is actually in China, and I assume that he is buying me a nice camera, and he writes "While haggling for a digital camera in Beijing's famous pearl market, a cohort on the trip threw down $200 in U.S. dollars, rather than Chinese yuan. The woman sneered in disgust. 'Those no good. No good here.' We'd had become accustomed to U.S. dollars carrying a little extra bargaining power, but not here. She wouldn't settle for anything in U.S. dollars, demanding remminbi, the people's currency, instead."
When a vendor in the street won't take your money because she deems it to be of little value, you know you are in trouble.
In the same vein, Peter Schiff of Euro Pacific Capital says that interest rates around the world tell an interesting story. For instance, interest rates on "Hong Kong dollars (another pegged currency) are now negative. The last time this happened to a currency was the Swiss franc during the 1970's, when people all over the world were fleeing dollars. In other words, depositors would rather pay to own Hong Kong dollars than get paid to own U.S. dollars."
There has been a lot of speculation that since "everybody" is so bearish on the dollar, that the market's natural perversity should mean that the dollar is destined to go up, instead. And so, maybe this is the perfect time to go long the dollar? The problem with that is that there must be some huge group of people who want to buy dollars! Would you?
- There has also been a lot of loose talk about oil going down in price in the future. I laugh! If you were an oil producer, would YOU lower the price of your product when the price is denominated in a currency (the dollar) that is falling in value? Of course not! And neither will they.
- The Islamic Mint is issuing the Islamic Gold Dinar again. The gold coins are available in the United Arab Emirates and the Dubai Islamic Bank. The coin is 4.25 grams of 22 carat gold.
If the Muslims wanted to rule the world, all they would have to do is to insist on being paid for their oil with these dinars. The sudden demand would increase the price of gold, and so they would make money as their money went up in price! And with every new barrel sold, they would increase the demand for gold, which would drive up the price of their dinars some more!
Maybe I have said too much. If you are a Muslim oil producer, forget I even said anything.
- G. Lammert, who is a guy who appears on the site UrbanSurvival.com, writes "The overriding factor - the overriding factor- in a contracting credit system that makes the fractals so precise is the enormous debt that burdens the US and world credit system at this point in history- debt that must be serviced or attempted to be serviced. In the US there is an estimated 37-40 trillion dollars in financial, corporate, private and governmental debt. At an average of 5 percent interest this represents an annual debt service load of 1.8 trillion dollars in yearly interest payments in an economy growing only by 0.35-0.4 trillion dollars annually." So interest payments are five times total growth? And somebody thinks this is sustainable? Hahahaha!
From a slightly different perspective, the Daily Reckoning folks write, "On the surface of it, a modest 10% decline in the dollar would mean a loss of some $15 trillion - or more than the total GDP of the United States... and more than 30 times all the profits of all the publicly traded companies in America."
321gold.com |
