Saturday, December 22, 2012

75 Economic Numbers From 2012 That Are Almost Too Crazy To Believe

What a year 2012 has been!  The mainstream media continues to tell us what a "great job" the Obama administration and the Federal Reserve are doing of managing the economy, but meanwhile things just continue to get even worse for the poor and the middle class.  It is imperative that we educate the American people about the true condition of our economy and about why all of this is happening.  If nothing is done, our debt problems will continue to get worse, millions of jobs will continue to leave the country, small businesses will continue to be suffocated, the middle class will continue to collapse, and poverty in the United States will continue to explode.  Just "tweaking" things slightly is not going to fix our economy.  We need a fundamental change in direction.  Right now we are living in a bubble of debt-fueled false prosperity that allows us to continue to consume far more wealth than we produce, but when that bubble bursts we are going to experience the most painful economic "adjustment" that America has ever gone through.  We need to be able to explain to our fellow Americans what is coming, why it is coming and what needs to be done.  Hopefully the crazy economic numbers that I have included in this article will be shocking enough to wake some people up.
The end of the year is a time when people tend to gather with family and friends more than they do during the rest of the year.  Hopefully many of you will use the list below as a tool to help start some conversations about the coming economic collapse with your loved ones.  Sadly, most Americans still tend to doubt that we are heading into economic oblivion.  So if you have someone among your family and friends that believes that everything is going to be "just fine", just show them these numbers.  They are a good summary of the problems that the U.S. economy is currently facing.
The following are 50 economic numbers from 2012 that are almost too crazy to believe...
#1 In December 2008, 31.6 million Americans were on food stamps.  Today, a new all-time record of 47.7 million Americans are on food stamps.  That number has increased by more than 50 percent over the past four years, and yet the mainstream media still has the gall to insist that "things are getting better".
#2 Back in the 1970s, about one out of every 50 Americans was on food stamps.  Today, about one out of every 6.5 Americans is on food stamps.
#3 According to one calculation, the number of Americans on food stamps now exceeds the combined populations of "Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming."
#4 According to one recent survey, 55 percent of all Americans have received money from a safety net program run by the federal government at some point in their lives.  (more)

Public Debt – Japan is the Worst / By Martin Armstrong
So many people only look at the US debt and yell and scream while jumping up and down in their yellow rain coats preaching the end is near. True, the US has the largest public debt, but it is far from the worst for it has the largest economy. That distinction being the worst debtor belongs to Japan and if Japan had to pay its debt back, it would be an economic Tsunami of untold proportions. Here are the facts just from the CIA and it is 2 years old. It is far worse and we may see the final capitulation of Japan in 2013.
Public Debt Top 20, 2010 estimate (CIA World Factbook 2011)
CountryPublic Debt (in billion USD)

 % of GDPper capita (USD)Note (2008 estimate)

 USA$9,13362%$29,158($ 5,415,   38%)
 Japan$8,512198%$67,303($ 7,469, 172%)

Mickey Fulp – Uranium Market Going Critical

from FinancialSurvivalNet
Mickey Fulp, the Mercenary Geologist, has his hand in so many markets it’s hard to keep track of them all. But he’s been a devoted follower / investor in Uranium for many years. In the past month, the price has gone up 12%, off of a bottom of around $40. There’s a myriad of factors involved in Uranium pricing, many political considerations and nuclear disarmament to boot. The bottom line is that nuclear power is clean, (believe or not) safe, abundant, and here to stay. The investment prospects have never been better and we’re even seeing new reactors getting built in the US after a generation of no new construction. China and the developing world can’t bring nukes on fast enough to satisfy their ever increasing electrical power demands.
Click Here to Listen to the Audio

WOOD: Time for Timber (Vardy)

by Nicholas Vardy,
Timber is a longtime favorite of some of the top investors in the world. Value investing legend Jeremy Grantham believes that timberland is the single best long-term investment. And last year, the Harvard Endowment Fund had about a 10% weighting in timber and has increased its weighting for the coming year.

The best way to invest in timber is through the S&P Global Timber & Forestry Index Fund (WOOD), an exchange-traded fund.

Taking a long-term view as they do, it is easy to see why Grantham and Harvard are so enthusiastic about timber. After all, trees grow through bear markets. Trees grow through bull markets. Trees simply grow through everything.

The price of timber has grown at a remarkably consistent rate throughout the years, increasing in price by an average of 6% every year for the past century, including during two World Wars, the rise and fall of the Soviet Union and 9/11.

Between 1971 and 2010, timber boasted average annual returns of over 14%. In 2008, while the S&P 500 fell 38%, the value of timberland rose 9.5%. If there is a way for you to protect yourself against a crash in financial markets, timber is it.

Timber offers higher returns than the overall stock market. Timber also offers substantial downside protection and has a history of performing well during inflationary times. That’s a hard combination to beat.

Global timber supply is falling. Thanks to a combination of urban development, agriculture and illegal logging, 10% of the world’s forests have disappeared in the last 25 years. At the same time, there has been a surge of demand for timber from across the globe, primarily from Asia, specifically Japan, South Korea and China.

The most straightforward way you can invest in managed timberlands is by buying an exchange-traded fund such as the S&P Global Timber & Forestry Index Fund, which tracks the performance of forestry and timber firms worldwide.

A big chunk of WOOD — 44.52% — is invested in companies based in the United States. But an even bigger portion is invested in global stocks. Japan accounts for 9.29% of the ETF, while there are large allocations to Canada (9.28%), Brazil (8.78%), Finland (7.63%) and Singapore (7.47%).
WOOD’s three top holdings — together accounting for 22.88% of its portfolio — are U.S.-based timber companies that you can invest in individually, as well: Weyerhaeuser, Rayonier and Plum Creek Timber.

From a technical perspective, S&P Global Timber & Forestry Index Fund has broken out recently to the upside and is now in a solid uptrend. Don’t worry; there is plenty of upside left.

Whistleblower: CBs Buying, Who’s Supplying & Is Paulson Selling

from KingWorldNews:
On the heels of another smash in the gold and silver markets, today renowned silver market whistleblower Andrew Maguire addressed rumors that Paulson is being forced to sell his gold. Maguire also spoke with King World News about the amount of tonnage that central banks have been buying over the past few days and who he suspects is actually supplying the gold.
This is the third in a series of interviews with Maguire lifting the curtain on what is going on behind the scenes in the gold and silver war.
Maguire: “I can say that over the last few days we’ve seen order sizes of 6 tons, 12 tons, and today I’m still getting reports but it looks like between 20 and 25 tons (of physical gold being purchased by central banks)…”
Andrew Maguire continues @

This line could set off a "major sell signal" for stocks

The stock market action this year is eerily similar to 2007.
Back then, the S&P 500 started off the year with a strong rally before a summertime correction gave back all the gains. Stocks rallied again and hit their highs of the year in October. Then we got a sharp drop in November and a rally to a lower high in December.
Stocks started off strong in 2012. Then a summertime correction gave back nearly all the gains. The S&P 500 rallied to hit its high of the year in October. Then we got a sharp drop in November and a rally to a lower high (so far) this month.
By the end of 2007, I turned bearish. Not because of anything mentioned above – but because the monthly chart of the S&P 500 closed below its 20-month exponential moving average (EMA).
The 20-month EMA is the line in the sand that separates bull markets from bear markets. As long as the S&P 500 is trading above the line, stocks are in a bull market. But when the index drops below the line, the bear is in control. As you can see from the following chart, this indicator timed the bear markets of 2001 and 2008 almost perfectly...
S&P 500 20-Month EMA Indicated 2001 and 2008 Bear Markets
Today, the monthly chart is well above the 20-month EMA – which is down around 1,350. So there's no risk of closing beneath it at the moment.
But here's what I can't stop thinking about in the back of my head...
What if the folks in Washington finally solve this whole "fiscal cliff" issue, and the market reacts to it like it reacted to the debt ceiling deal last year? Back then, the S&P 500 fell 15% in just a couple weeks.
Similar action today might lead the market to retest its November lows – and offer the great buying opportunity I've been looking for. But if it happens near the end of the month, the S&P 500 stands a risk of ending December below its 20-month EMA.
For now, there are a lot of "ifs" that have to happen for things to turn bearish. But it's something to keep an eye out for.

Energy Markets Outlook For 2013

The energy markets contended with historic headline news in 2012, yet for the most part, weathered the storm.  Let's look back at the year that was and project what the sector faces in 2013.
The crude oil markets were peppered with bullish headlines from the major OPEC region throughout 2012.  The markets nervously watched as new regimes took power in Libya and Egypt. The civil unrest in Syria threatened stability in the region.  Iran continued their defiance and bluster with their attempts to develop nuclear capabilities.  Meanwhile, escalating violence between the Israelis and Palestinians added to the Middle East uncertainty.   Normally, with this much uncertainty in the major oil producing region of the world, we would expect prices to skyrocket.  However, after rallying early in the year, the crude oil overcame these obstacles and traded in the $80-$100 range for the majority of the year.  In fact, as of this writing, the crude oil looks like it will finish down on a year over year basis.

Crude Oil
Much of crude oil's resistance can be attributed to the supply side of the equation, primarily outside of the OPEC cartel.  Domestic oil production in the United States is at 15 year highs.  New technology is helping to unlock vast amounts of Canadian oil sands that were previously deemed uneconomical. Meanwhile, worldwide consumption continues to fall as higher fuel economy standards are beginning to have an impact and global economic growth remains tepid.  The increase in North American production and decrease in demand has helped to drive crude stocks well above their five year average:  (more)

The housing market is about to do something we haven't seen in six years

Home values gained an estimated 6% in the U.S. this year, the first increase since 2006, as the housing market began to recover from its worst slump since the 1930s, Zillow Inc. (Z) said today.

Values have climbed more than $1.3 trillion to $23.7 trillion since the end of last year and probably will continue to rise in 2013, the Seattle-based home-listing service said in a statement. Residential values had declined each year since 2007, with the biggest drop in 2008, when homes lost more than $3.2 trillion in value, Zillow said.

Low interest rates, improving employment, and prices that remain almost 30% below their July 2006 peak have drawn buyers back into the market. A limited inventory of homes for sale has helped push up prices.

"The housing market really turned a corner in 2012, as historic affordability and sustained investor interest helped keep demand at a boil," Stan Humphries, Zillow's chief economist, said in the statement. "As home values rise, and more homeowners are freed from negative equity, we can expect a continued slow transition to a more normal housing environment."

Sales of previously owned homes jumped 5.9% in November from the previous month to reach an annual pace of 5.04 million, the most in three years, the National Association of Realtors reported today from Washington. The median resale price was $180,600, up 10% from November 2011.

Permits to build new homes, a proxy for future construction, rose to a four-year high last month, the Commerce Department said yesterday.

"Virtuous Cycle"

Rising demand is expected to fuel a "virtuous circle" that will drive economic growth, housing construction and price increases, Michael Widner, an analyst with Stifel Nicolaus & Co., wrote in a note to investors yesterday.

Los Angeles added $122 billion in home value this year, the most of any metropolitan area, bringing the value of residences in the region to $1.8 trillion, Zillow said. New York-area values rose $11.1 billion, also to $1.8 trillion, after losing $66.3 billion last year.

Philadelphia was the only metro area of the U.S.'s 30 largest with a loss in value, declining $1.6 billion to $513.4 billion, the firm said.

Nationwide, home values remain down about $5.8 trillion from their peak of $29.5 trillion in the third quarter of 2006, according to Zillow.