Interview with Nestle’s CEO

The CEO discusses food, energy and water and the challenges we face.  Interesting read.  click on this link

Dick P.

Boiling Down the Debt Solution

Someone emailed this to me so this is not mine, but I thought it was simple and effective way to make the point:

The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let’s put the 2011 federal budget into perspective:

*   U.S. income:  $2,170,000,000,000

*   Federal budget: $3,820,000,000,000

*   New debt: $ 1,650,000,000,000

*   National debt: $14,271,000,000,000

*   Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)

It helps to think about these numbers in terms that we can relate to.   Therefore, let’s remove eight zeros from these numbers and pretend this is the household budget for the fictitious Smith family:

 *   Total annual income for the Smith family: $21,700

*   Amount of money the Smith family spent: $38,200

*   Amount of new debt added to the credit card: $16,500

*   Outstanding balance on the credit card: $142,710

*   Amount cut from the budget: $385

-Billy Ray Valentine

Hoisington’s Analysis on Deficit & Debt Debate

This is fascinating analysis on the economics behind deficit spending and the current US debt levels.  It’s worth the read.

-BRV

Cleveland’s Corporate Airline Activity

http://online.wsj.com/article/SB10001424052702304070104576400073299306118.html?mod=quicklinks_jettracker

Cleveland is #4

- Ty

First to Third World In one lifetime

As currently structured and organized, the U.S. government makes infrastructure and other appropriations in the context of a legion of committees and subcommittees, each of whose chairman can be counted on to fight to the death to maintain oversight and appropriation authority of his/her piece of the budget

Our infrastructure is decaying and we’re going to have a hard time maintaining, let alone improving it.

- Dick

Schiff on the State of the Union

He makes some good points: 1)  The politicians do not understand the gravity of the situation, or at least they do not portray urgency; 2) The deficit continues to grow while there’s only cheap talk of reducing it; 2)  We’re dealing with a fundamental difference of opinion on how value and wealth is created.

-Valentine

Unemployment Calculation

Here’s an informative article describing the method used to calculate the monthly unemployment numbers that have been receiving much attention lately.  The article also comments on what to expect in the near future based on various scenarios.  Interesting stuff.

-BRV

Is Pressure on China a Good Idea?

Here’s an interesting topic discussed in this Bloomberg article- the idea of pressuring China to let the yuan float and appreciate (i.e., nix their current system that pegs the yuan to the US Dollar).  The primary thrust is coming from pro-labor (union) politicians in an attempt to level the playing field for US blue-collar workers who are competing with Chinese labor.  

At face value, this seems like it might be a good idea.  Afterall, by keeping the yuan from appreciating, Chinese made goods remain relatively cheap to US made goods.  Currently $1 US Dollar buys more goods than it would if it the yuan appreciated.  But here’s the problem, the cost of labor is a supply/demand issue, and China has the largest supply of “unskilled” labor in the world, regardless of what the yuan does.  Sure, if the yuan decoupled from the dollar Chinese goods may seem more expensive and US made good cheaper in the short-term, but in the long-term, labor wages in China would adjust and the overwhelming supply of labor would drive down wages as the real value of the wages increases (as the yuan appreciates).   Concurrently, it would give the Chinese more buying power to buy up US assets on the cheap, thereby reallocating more wealth to the Chinese.  Maybe we could use that help in the real estate market but remember how nervous it made everyone when the same thing happened with the Japanese back in the 80′s.  Either way, it’s not going to bring low value-add jobs back to the US….. they’re gone for good.

A Look into the Future Economy

An interesting presentation by Harvard prof Juan Enriquez.  About 19 minutes, but worth it.

-Billy Ray

Outstanding Gold Post

I always have a hard time putting my own feelings about gold into words. This is a great statement from one of the best managers around on gold and where it is going – the beginning of the end of the great gold bull market has begun – but it may take year’s to play out. This is worth the read.

http://www.zerohedge.com/article/contrarians-dilemma-must-read-tocquevilles-john-hathaway

- Jack

One of the Best I’ve Read

I found this piece from Australian economist Steve Keen to be absolutely outstanding. I have always considered myself to be an “inflationist” believing that the ultimate outcome of our current mess will be an inflationary spiral driven out of necessity. But these types of articles are so compelling that it makes me think that we may see another monstrous deflationary pulse before the powers that be totally crank up the printing press and destroy fiat currencies worldwide. The quality of this type of analysis makes me think that the current environment requires a probabilistic approach rather than a dogmatic approach:

http://www.debtdeflation.com/blogs/2009/12/01/debtwatch-no-41-december-2009-4-years-of-calling-the-gfc/

- Jack

Great Depression 2?

This guy Paul Farrell is one of the biggest doomers I have seen in “e-journalism” – most of them are on blogs or newsletters like Faber, Mish, Keen, my favorite Panzner – but this guy is employed by Marketwatch! I can’t believe they let him publish this stuff on such a staid site – good for them:

http://www.marketwatch.com/story/obama-leading-us-right-to-great-depression-2-2009-12-01

- Jack

Low Volume?

I have never thought the many people who follow volume are on the right path. In fact, at times volume can be a contraindicator (in my opinion), when everyone just has to be in – I would think the volume on the Nasdaq was very high in early 2000, for example. But what do I know?

http://www.marketwatch.com/story/low-volume-may-be-source-of-concern-2009-12-01

- Jack

How Economic Weakness Endangers U.S. Hegemony

http://www.newsweek.com/id/224694/page/1

- Jack

Another Interesting Post on Gold

I’ve always liked this guy:

http://www.cnbc.com/id/15840232?video=1336090735&play=1

- Jack

Dr. Doom

Dr. Doom Marc Faber with more comments that you can’t help but respect:

http://www.bi-me.com/main.php?id=42214&t=1&c=35&cg=4&mset=1011

- Jack

gold timers

attached is an update on how gold timers are viewing the markets, an interesting post for those trading gold:

http://www.marketwatch.com/story/bullishness-among-gold-timers-very-high-2009-11-20

- Jack

More on Energy Issues

Another interesting post on energy issues/problems:

http://www.economicroadmap.com/2009/11/reminder-of-an-earlier-debate.html

- Jack

Interesting Post

Jeff Matthews with an interesting post on inventory destocking and Buffett:

http://jeffmatthewsisnotmakingthisup.blogspot.com/2009/11/why-buffett-finished-off-burlington-its.html

- Jack

Hugh Hendry is Back

Hugh Hendry with deep thoughts on deflation and other matters. Enjoy!

http://www.zerohedge.com/article/deep-thoughts-hugh-hendry-eclecticas-latest

- Jack

Bernanke Attempts to Calm

Bernanke attempts to calm the markets on the dollar. We’ll see if he is serious or not in upcoming months:

http://www.ft.com/cms/s/0/0f70fbfa-d2e0-11de-af63-00144feabdc0.html

- Jack

prechter’s revenge

Here is another fun one from the uber bear Robert Prechter:

http://www.minyanville.com/articles/prechter-bob-depew-kevin-bears-elliott-wave-international/index/a/25382/from/home

- Jack

The Peak is Near!

Peak oil, the belief that supplies of oil are near the highest they will ever reach, is a concept everyone should understand. Attached is an article that reflects some of my fears that the “powers that be” are lying about the situation.:

http://www.guardian.co.uk/environment/2009/nov/09/peak-oil-international-energy-agency

Now, if you really want to crap your pants go here:

http://www.lifeaftertheoilcrash.net/

- Jack

 

The Mess

I think this nicely summarizes the mess we are in:

http://www.financialarmageddon.com/2009/11/a-growing-divide.html

- Jack

Dollar Thoughts

Some interesting insights from some sharp minds on the dollar:

http://www.bloomberg.com/avp/avp.htm?N=video&T=Faber,%20Roach,%20Rogers,%20Clarida’s%20Own%20Words%20on%20Dollar%20&clipSRC=mms://media2.bloomberg.com/cache/vuZe7ZxvpR3c.asf

- Jack

The Girl Who Silenced the World

I thought this was something you might like to watch:

http://media.causes.com/510213?p_id=58585106

- Jack

Scary

This is not a long post, but it is effective. The always interesting Michael Panzner with links to something I have been talking about – the potential protagonist for a major war:

http://www.economicroadmap.com/2009/10/on-to-something.html

- Jack

Good Earnings

Good earnings news out today. It’s unclear if this is good or bad for the market:

http://www.marketwatch.com/story/us-stock-futures-edge-up-as-apple-trounces-2009-10-20

- Jack

Watch Out Now!

Put on your helmets:

http://www.marketwatch.com/story/as-bank-earnings-begin-a-warning-from-the-occ-2009-10-09

- Jack

Gold

The black helicopters always fly about gold. Here is a good one:

http://www.financialsense.com/fsu/editorials/kirby/2009/1015.html

- Jack