Wednesday, November 11, 2009

Remember Our Fallen

Jay Taylor: Turning Hard Times Into Good Times

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Paterson: NYS Will Be Broke Before Christmas

Governor David Paterson called an unusual joint session of the Legislature Monday to implore recalcitrant lawmakers to close the state's huge budget gap before New York runs out of money.

To some lawmakers it's nothing more than a photo op to help Paterson get re-elected. But the governor is dead serious. He said if the Legislature doesn't cut the budget now the state could run out of money by next month.

"We're going to run out of cash in four and a half weeks. We are going to run out of money. Unless we do something about it, (it will) threaten generations," Paterson said. (more)

Billionaire Fisher Sees S&P 500 Above 1,300 as Economy Recovers

The Standard & Poor’s 500 Index will probably exceed 1,300 as early as February because the economy continues to rebound from the worst recession since the 1930s, billionaire Kenneth Fisher said.

The benchmark index for U.S. stocks has surged 62 percent to 1,093.08 after sinking to a 12-year low in March. It will add up to 25 percent from last week’s close in the next three months, said Fisher, 58, who oversees $35 billion as chairman of Woodside, California-based Fisher Investments Inc.

“It’s just a reversal of excessive pessimism,” Fisher, ranked by Forbes magazine as the 289th-richest person in the U.S., said in an interview yesterday. “We still have a lot more bull market to go because we had such a huge bear market.” (more)

If You Thought the Housing Meltdown Was Bad…

…wait until you see what’s in the cards for commercial real estate.

That’s right, the next train wreck will be in commercial real estate. Couldn’t be worse than last year’s residential market crash? That remains to be seen. But it’s coming soon, probably as early as the second quarter of next year, and there’s nothing that can prevent it. The government will intervene, trying desperately to delay the day of reckoning, and may even succeed. For a while. But make no mistake about it, that train is going off the tracks no matter what.

Every part of the sector – from multifamily apartment buildings to retail shopping centers, suburban office buildings, industrial facilities, and hotels – has accumulated a huge amount of defaulted or nonperforming paper. It’s an impossible, swaying structure that cannot long stand. (more)

Gold To 5K-Peter Schiff on Fox Business

Shocking numbers: Real unemployment tops 22%

The true rate of unemployment for October 2009 may be 22.1 percent, not the 10.2 percent reported by the Bureau of Labor Statistics, Jerome Corsi's Red Alert reports.

Unemployment at 22.1 percent, if accurate, would be at numbers not seen since peak unemployment during the 1973 to 1975 recession.

Economist John Williams, publisher of, estimates that the peak of unemployment in nonfarm unemployment in the Great Depression of the 1930s would, by his methodology, have registered at 34 to 35 percent in 1933.

So, how does the Obama administration get away with reporting the lower unemployment percentage? (more)

Who Has water and Who Does Not

“China is the largest importer of soybeans and has been since 2000,” notes Chris Mayer, always searching for investment opportunities amid the rubble. “China was once the largest exporter of soybeans, but flipped to a net importer in 1995. It may well be impossible for China to meet its demands for soybeans by producing more of its own. Passport Capital, an astute hedge fund, estimates that in order to grow enough soybeans to become self-sufficient, China would need to cultivate an area about the size of Nebraska.

“That looks impossible against China’s arable land base, which has been in decline since 1988 — this despite the fact that China’s subsidizes agriculture. Another reason is the low level of water resources in China. (See the nearby chart ’Who Has Water… And Who Doesn’t.’) Soybeans require a lot of water — 1,500 tonnes of water for one tonne of soybeans.

“This chart is telling. Who has lots of water? Brazil. So it is no surprise to discover that the increase in demand for soybeans from China has largely been met by increasing soybean acreage planted in Brazil. (Brazil is the second-largest exporter of soybeans in the world, behind the United States and ahead of Argentina and Paraguay.)

“The easiest way for China to get around its water shortage is to import soybeans. By importing soybeans, Passport calculates that China is effectively importing 14% of its water needs…

“So now we are in a position to connect some dots. China’s increasing population and affluence will drive its soybean imports. These imports will come mainly from Brazil. And Brazil, as it converts more arable land to producing farmland, will need a lot of potash and phosphate. What is true of soybeans is also true of wheat and corn and rice and other agricultural commodities. We’ll need more of all of them. And all of them face the same challenges for water and land. All of them require lots of fertilizer.”

Investor Demand for Gold Soars

Wealthy speculators and governments rushing to boost their gold reserves are sending demand sky high, a level some expect prices to reach as well.

“It’s not that gold has changed, but gold buyers have changed,” Suki Cooper, a precious-metals strategist for Barclays Capital told The New York Times.

“It’s a structural shift we’re seeing on the investing side, from Asian central banks right down to individual investors buying ingots and coins.”

The World Gold Council says that gold demand for jewelry plunged 20 percent while investor demand for gold increased 51 percent during the second quarter. (more)

The Fate of Paper Money

The first well-documented widespread use of paper money was in China during the Tang (618-907 A.D.) dynasty around 800 A.D.1 Paper money spread to the city of Tabriz, Persia in 1294 and to parts of India and Japan between 1319 to 1331. However, its use was very short-lived in these regions. In Persia, the merchants refused to recognize the new money, thus bringing trade to a standstill.

By 1455, after over 600 years, the Chinese abandoned paper money due to numerous problems of over issuance and hyperinflation. An in-depth description of China's first experience with money can be found here.

Paper Money in Europe

The first instance of paper money in Europe allegedly occurred in Spain in 1438 during a Moorish invasion. A Spanish military leader issued paper notes to his soldiers that circulated around the city. No known notes have survived. (more)

CNBC - Dollar Will be Utterly Destroyed, Global Currency, New World Order