Expect Recession in 2013

This is being reported by a left-leaning, Obama praising media organization. 

Tangibles
Prepare
Pray

Debt Ceiling Eliminated

Well, not yet....but it is coming.

Now, if he thinks this will solve the problem he is more of an idiot than I thought. The rest of the world will see that we are fiscally irresponsible (which they are starting to believe) and will sell off any dollars they hold. If that happens the trust in the USD will drop like a rock. You will see runs on banks, but that will be too late. We will head into a hyperinflation where we will be seeing prices changing daily or even every few hours. Look at Zimbabwe, or Wiemar Republic.

Tangibles
Gold
Silver
Food
Ammo
Real Estate

This Is Bad

Well, my teenagers say that math sucks. I disagree. Math when done properly tells the truth. I bet that Spend More Ben is thinking that math sucks though as he tries to figure out another way to offset the truth. It cannot be done as the math will always win.

The UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT came out today. The seasonally adjusted initial claims was 439,000, an increase of 78,000 from the previous week's revised figure of 361,000. The 4-week moving average was 383,750, an increase of 11,750 from the previous week's revised average of 372,000.

Now, they claim that it is because of the Superstorm Sandy. I call B.S. on that. Sure it probably accounts for some of the claims, but I would bet that the majority are from the claims that had been "back-logged" from the few weeks before the election.

Watch these reports through the end of the year, if they continue to decline or plateau, watch how the market reacts. 

Hold on!
Prepare
Food
Pay off bills
Silver

True That

Enough said

It has been a while since I have posted anything. I have been busy with personal things here at the homestead.

I have still been staying in touch with what is happening economically though as well as the slow takeover of countries by the radical Islamic groups like the Muslim Brotherhood. I will post about some of this later, but first here is a video (28 minutes) that is worth watching. Peter Schiff has been correct about many things over the years, and I'm afraid that he is spot on in his thoughts. http://youtu.be/NngxJz2aBqg

Tom Brady the Best Decision and 22 More Signs and Symptoms

Well, Tom Brady is the best thing that has happened to the New England Patriots. I think they have a good chance to go all the way and capture another Super Bowl. Of course, one key injury, one bad call or one bad play can change a game around. With the top teams we have playing, one bad call/play can change the outcome.

Even though America will be focused on the playoffs this weekend, there are some other things that we all should be focusing on as well. Twenty-two of them to be exact.

Here are some that. I feel are really important.

** On Thursday it was announced that U.S. jobless claims had soared to a six-week high.

** Over the past 12 months, dozens of prominent retailers have closed stores all over America, and one
     consulting firm is projecting that there will be more than 5,000 more store closings in 2012.

** There are signs that the Chinese economy is seriously slowing down.  The following comes from a recent
     article in the Guardian….

"Growth had slowed to an annual rate of 1.5% in the second and third quarters of 2011, below the “stall speed” that historically led to recession."

** The Bank of Japan says that the economic recovery in that country “has paused“.

** Germany’s economy actually contracted during the 4th quarter of 2011.  At this point many economists
     believe that Germany is already experiencing a recession.

** According to a recent article by Bloomberg, it is being projected that the French economy is heading
     into a recession….

"The French economy will shrink this quarter and next, suggesting the nation is in a recession as investment and consumer spending stagnate, national statistics office Insee said."

 But, this one could be the nail in the coffin.

**** The major industrialized nations of the world must roll over trillions upon trillions of dollars in debt during 2012.  At a time when credit is becoming much tighter, this is going to be quite a challenge.  The following list compiled by Bloomberg shows the amount of debt that some large nations must roll over in 2012….
Japan: 3,000 billion
U.S.: 2,783 billion (That is $2.783 trillion)
Italy: 428 billion
France: 367 billion
Germany: 285 billion
Canada: 221 billion
Brazil: 169 billion
U.K.: 165 billion
China: 121 billion
India: 57 billion
Russia: 13 billion

Keep in mind that those numbers do not include any new borrowing.  Those are just old debts that must be refinanced.

Where is the WORLD going to come up with $7,609,000,000,000? I know some countries can just print money, cough, cough...America, but just think what will happen to the strength of the dollar if America prints $2.7 trillion dollars to refinance their debt.

Stay tuned and get prepared!

Cap and Balance...Will It Work?

Here is a good article I read from the Market Ticker Guy.

"Cut Cap And Balance": Scam Or Real?

 

Let's look at the proposal:

1.  Cut - We must make discretionary and mandatory spending reductions that would cut the deficit in half next year.

2.  Cap - We need statutory, enforceable caps to align federal spending with average revenues at 18% of Gross Domestic Product (GDP), with automatic spending reductions if the caps are breached.

3.  Balance - We must send to the states a Balanced Budget Amendment (BBA) with strong protections against federal tax increases and a Spending Limitation Amendment (SLA) that aligns spending with average revenues as described above.

Ok, so we go from ~$1,700 billion in deficits to $850 billion this coming fiscal year.

That's somewhere between $750 and $850 billion in spending cuts right now, depending on how you're looking at the deficit numbers (that is, if you're cheating or not.)

That will result in at least an immediate 5% hit to GDP.  Is the GOP willing and ready to accept that?  If so, let's see a statement on that, because this is the outcome of such a cut in government spending.  The reason is simple: GDP is defined as "C + I + G + (x-i)" and you're proposing to cut "G" by 5% of GDP.  Bingo.  The flow-through on that will result in an even larger decline (and economists can fight over how much that multiplier is, but it's greater than "1")

The cap does not enforce a maximum deficit size.  It therefore is defective in that the GOP can simply pass tax cut after tax cut and yank deficits back up to "stimulate", which makes the problem worse.

"Balance" fixes it, of course, but is a Constitutional Amendment and requires passage in both houses plus ratification.  It is thus not a "right now" solution.

With one modification I would support "CCB" without reservation: In year two and beyond total government debt, including public and intergovernmental, may not grow faster than GDP, with automatic spending reductions of double any violation if it does.  I would leave only one exception: In the event of Congressionally-declared war, in which case the exception would have to be voted upon and passed by a 2/3rds majority every six months.  Yes, this means that if GDP is declining debt must decline faster (that is, the government must run a surplus!)

The GOP is close on this.  Not there, but close.  Make that one change above and you're actually addressing the problem in a way that will fix it.

Incidentally, if you make that change you permanently fix the problem and avoid S&P and Moody's rating action.

Be aware, however, that such a plan, if enacted, will bring short-term economic pain, and lots of it.  You had better be prepared with a fundamental tax, "free trade" and medical system overhaul because that has to happen in short order once this goes into place as a buffer.

This plan, however, is progress compared to what we've heard from Congress and especially Obama thus far.

Debt Limit Breeched!

Bet you haven't heard this on the MSM!

Here are some excerpts...

Yesterday the Treasury sold 29 billion in bonds bringing the total U.S. debt to 14.311 trillion, the current debt ceiling is 14.294. Now with a 52.2 billion dollar buffer for the total debt, a technical default should happen within the next 10 trading days, let's see if that makes any news.

Bill Gross, the largest bond fund manager in the world, recently had this to say regarding U.S. debt, "unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies - inflation, currency devaluation, and low negative real interest rates."

Folks, read that again! This guy is not a fly by night guy, but a well respected person in the industry!

There are clues people, open your eyes and look. We have industry experts telling us what is coming. If only more people would stop worrying about who will be the next one voted off and learn what freight train is heading toward them.

Oh well, at least you are watching.

Is This Your Economic Recovery?

Well, I keep hearing on the liberal lame stream media that we are in an "economic recovery". Boy that sounds great, but I wonder how they explain these facts.

1. Forty-four million people are are now on food stamps. This is up 13.1% from this time last year.

2. The U.S. trade deficits are getting larger. The trade deficit increased by 33% from 2009, and it is expected to grow even larger in 2011.

3. The housing market continues to suck I mean stink. The new year has brought little cheer to new-home builders: Their sales fell a shocking 11.2% between December and January and 18.6% from 12 months earlier.

4. Thank goodness that the government is stepping in to save the housing industry as we now guarantee or are writing close to 97% of all mortgages in the United States.

5. The U.S. National debt continues to grow at a rapid pace, more that a million dollars per minute. In fact, the budget deficit is projected to reach an astounding $1.65 TRILLION.

6. Foreclosures continue to rise at a rapid rate. It has been reported that just last year over a million families were foreclosed on in 2010.

7. The health of household budgets declined each quarter in 2010 and is at the lowest level since the first quarter of 2009.

8. According to the liberal leaning Huffington Post, there are approximately 15,000 empty buildings in Chicago and over 60,000 vacant homes in Las Vegas.

9. We know that there are several states that are in financial trouble, California and New Jersey and Illinois come to mind. But are you aware that there are several cities and municipalities that are in trouble as well.

10. Quantitative Easing 1 and 2 have gotten us nothing. Here are 9 reasons why QE is bad for the economy.

11. Prices for consumables are getting higher. Corn has increased 33% since December 2010. Cotton is at an all time high. Oil is up to $105 a barrel and is expected to rise with all the turmoil occuring in the Middle East.

12. The unemployment rate is predicted at 10.3% by Gallup and above 20% by shadowstats.com.

America is dying a slow and painful death. I cannot see a recovery in the picture. In case you do not remember one of my very first posts when I started this blog I explained what represents a trillion dollars. If you were to spend one dollar a second ($60 per minute or $3600 per hour), it would take you over 31,000 YEARS to spend one trillion dollars.

Tell me how you see a recovery happening!

Fed Needs A Miracle

Peter Schiff was on Fast Money and was hammered by the pundits. They wanted him to give them a date on when the collaspe will come. Everyone knows that nobody can predict the time. They were trying to make him look bad and discredit him and his predictions, I feel. I have not heard them ask Bernanke or Obama the exact date that the economy will be back to normal.

Listen to Peter, as I feel he and the others like him (Celente, Zell, etc) are on the right track.

You Heard Of Sam Zell?

He is a Billionaire! I have highlighted some comments I feel are very telling.

Look at what he is saying:

ZELL ON THE DOLLAR LONG:
"YOU ASK ME ME WHAT IS MY BIGGEST SINGLE FINANCIAL CONCERN IS THE LOSS OF THE DOLLAR AS THE RESERVE CURRENCY I CAN'T IMAGINE ANYTHING BEING MORE DISASTROUS TO OUR COUNTRY THAT IF THE DOLLAR LOST ITS RESERVE CURRENCY STATUS."

Zell: Dollar's Global Fall Will Be 'Disastrous’ for US Living Standard

Thursday, 03 Mar 2011 12:27 PM
Billionaire real-estate magnate Sam Zell warns that Americans should brace for a "disastrous" 25 percent decline in the standard of living if the U.S. dollar’s reign as the global reserve currency ever ends.

He says that there are signs in the market that it could eventually happen. As it is now, a Korean manufacturer who wants to sell to Brazil must first buy dollars to complete the deal. If countries decide to bypass the dollar, the effect would be a disaster, Zell says.
Sam Zell
"Frankly, I think we’re at a tipping point. What’s my biggest single financial concern is the loss of the dollar as the reserve currency," he told CNBC in an interview. "I can’t imagine anything being more disastrous to our country than if the dollar lost its reserve-currency status."

Although he is "hoping against hope" the dollar remains the standard for international exchange, he warns that "you’re already seeing things in the markets that are suggesting that confidence in the dollar is waning."

If that happens, the impact on the United States would be deep. "I think you could see a 25 percent reduction in the standard of living in this country if the U.S. dollar was no longer the world’s reserve currency," Zell said "That’s how valuable it is."

Zell says that the bond market seems remarkably complacent about the risk. But that could turn on a dime, he warns.

"The worry in the bond market is never there until it’s there. The dollar has gone down 20 percent in the last three or four years," Zell says. "I don’t know who is buying 30-year fixed-rate debt. I don’t understand TIPs (Treasury inflation-protected bonds) that are projecting 30 years of benign inflation."

Benchmark 10-year Treasury note yields are around 3.48 percent. TIPs maturing in 2041 have a yield of 1.96 percent.

Once the world turns on the U.S. dollar, if it does, things will change fast, Zell warns. "How could interest rates not go up? Either they go up or the dollar goes down, one or the other," Zell says.

As for inflation, he estimates that actual inflation is between 5 percent and 7 percent right now, despite government figures showing the CPI flirting with low single digits. Fear of deflation — prices falling out of control — has been the primary motivator at the Federal Reserve to pump up money supply by more than $2 trillion in recent months.

Nevertheless, oil is rising fast and food riots are breaking out in developing countries. The United States has been less affected until recently. Zell points out that our Consumer Price Index tends to hide inflation by counting depressed home prices at 42 percent of the index.

"If you adjusted the CPI to reality you’re probably looking at 5, 6, 7 percent inflation today," Zell says.

"The reality out there is the costs are going up. The fact that we’ve been massive beneficiaries of Chinese mercantilist policies that have allowed us to buy goods at much less than their fair value. That has hurt us on the manufacturing side, but it has been a subsidy to America. That subsidy is coming to an end."

Others agree with Zell that the dollar’s world dominance will soon fade.

Ray Dalio, founder & CIO of Bridgewater Associates, told CNBC that it is "inevitable that the dollar's role as the world's currency will diminish from the dominant world currency to one of a few."


"It will fade probably fairly quickly so the United States which accounts for almost two-thirds of the reserves will probably go down to 50 percent of the world's reserves and it will have an effect on lending," he added.

Meanwhile, Bill Gross, found of bond giant Pimco, recently told investors that the Fed’s heavy thumb on the scales on behalf of low interests was perhaps necessary given the magnitude of the crisis. The second round of easing known as "QE2," perhaps, also had a role to play.

However, as the deadline for the second round to end looms — it is set to expire in June — there are serious questions about whether a smooth transition to private demand for U.S. debt will appear, Gross said.

Stocks have doubled from the March 2009 bottom and marked steadily upward since the second round was announced in August, which has given some stock investors pause.

"Investors should view June 30, 2011 not as political historians view Nov. 11, 1918 (Armistice Day — a day of reconciliation and healing) but more like June 6, 1944 (D-Day — a day fraught with hope for victory, but fueled with immediate uncertainty and fear as to what would happen in the short term)," Gross said in recent commentary online.

"Bond yields and stock prices are resting on an artificial foundation of QE2 credit that may or may not lead to a successful private-market handoff and stability in currency and financial markets."

-END-


People, I have said this before (pretty much from the start of this blog) you need to PREPARE. We have seen inflation (just look at your grocery bill and gas bill) and after QE2 is finished (June 30, 2011) we may see hyperinflation. If you think things are expensive now, wait until hyperinflation hits. You will need food and supplies. Here is a good place to start http://www.jrhenterprises.com/.

Hyperinflation?

12 minutes of info you need to see.

Hyperinflation 100% Guaranteed

You better be preparing for it....

Hyperinflation May Be Only 6-9 Months Away

John Williams from Shadow Stats was interviewed by Business News Network. Below is the link. It is worth the 10 minutes.

http://watch.bnn.ca/squeezeplay/december-2010/squeezeplay-december-8-2010/#clip386602