Monday, January 11, 2010
The bullish case for gold continues to build. The old adage ‘more dollars chasing fewer goods’ is particularly apt for gold.
- For the first time in history practically every Central Bank is adding to the money supply of its respective country.
- Despite a record high gold
price, new supply from mines is declining, due to the fact that the ‘easy to find gold’ has already been found.
- Comparing the current gold rush to the price rise in 1980 we find that there are currently 2.4 billion people in the world who were not alive in 1980. That is an increase of 53%.
- A large percentage of this huge increase has occurred in China and India. By coincidence the people in those two countries love to own gold. (more)
Ordinary copper, a common and cheap metal, was last year's commodities superstar. It brilliantly outshined the precious metals and even easily eclipsed 2009's massive 86.3% gain in crude oil. Investors and speculators like our subscribers who were long base-metals stocks rode this copper surge to tremendous gains. It's been an exceedingly fun and profitable rally. (more)
Everyone knows that the too big to fails and their dishonest and footsy-playing regulators and politicians are largely responsible for trashing the economy.
But the military-industrial complex shares much of the blame.Nobel prize winning economist Joseph Stiglitz says that the Iraq war will cost $3-5 trillion dollars.
Sure, experts say that the Iraq war has increased the threat of terrorism. See this, this, this, this, this, this and this. And we launched the Iraq war based on the false linkage of Saddam and 9/11, and knowingly false claims that Saddam had WMDs. And top British officials, former CIA director George Tenet, former Treasury Secretary Paul O'Neill and many others say that the Iraq war was planned before 9/11. But this essay is about dollars and cents. (more)
The number of Americans filing for personal bankruptcy rose by nearly a third in 2009, a surge largely driven by foreclosures and job losses.
And more people are filing for Chapter 7 bankruptcy, which liquidates assets to pay off some debts and absolves the filers of others. That is significant because a 2005 overhaul of federal bankruptcy laws aimed to encourage Chapter 13 filings, which force consumers to sign onto debt-repayment plans in exchange for keeping certain assets.
The changes were designed to make it more difficult for people to shed their debt, particularly in a Chapter 7 filling. A "means" test, for example, was introduced to separate those who could afford to repay their debt from those who couldn't. A Chapter 7 filing is off the table if the means test determines a person is able to pay back at least a portion of the debt after it is restructured.
It looks like a scene from an apocalyptic science-fiction movie. High on the frozen plains of Inner Mongolia, giant trucks rumble across the floor of a lunar-like crater so vast that it looks as if it might have been gouged out by a meteorite.
As we peer down at the eerie spectacle from the crater's edge, a security guard behind us barks out in Mandarin: 'Explosives! Move away!' Seconds later, a deafening crack rings out and part of a 660ft high rock face is brought crashing down. (more)
“Losses from commercial real estate will be quite high by historic standards,” Ludwig, now chairman of consulting firm Promontory Financial Group, told Bloomberg.
“Hundreds of banks will fail or will be resolved over the course of the cycle.”
Last year, 140 banks failed.
Problems abound for real estate loans involving malls, office buildings, hotels and apartment/condo buildings.(more)