Network Archives

Bill Bonner: What does money represent?

"Higher wages do not get you anywhere if prices rise too. What you really need is higher productivity. How do you get that? You need to save money (rather than spend it) and invest in things that produce more...thus providing the profits necessary to pay more to the people who produce it. Really. Is that so difficult to understand? For the last 42 years, the feds have encouraged Americans to spend their money, rather than save it. And they've encouraged people to buy things made by foreigners, rather than make things themselves. This was the consequence (perhaps unintended) of Richard Nixon's pure paper money system." Continue reading →

Continue ReadingBill Bonner: What does money represent?

Estate auction set for $6.5 million gold coin fortune amassed by Nevada recluse

"The final treasures of a quiet man who collected a fortune in gold coins will be auctioned off Tuesday in Nevada. The body of Walter Samaszko Jr. was found in his Carson City home in June 2012. A cleaning crew hired to tidy his modest, ranch style home where he had lived for four decades came upon a stunning discovery — boxes and boxes full of gold coins and bullion collected over an unassuming lifetime. It was enough to fill two wheelbarrows. The fortune, after taxes, will go to Samaszko's only surviving cousin, Arlene Magdanz of San Rafael, Calif. A substitute teacher, Magdanz has shunned media attention and not spoken publicly about her new-found riches." Continue reading →

Continue ReadingEstate auction set for $6.5 million gold coin fortune amassed by Nevada recluse

BIS blames European banks for eternal euro crisis

"Europe's creditor powers bear as much blame as debtors for the eurozone's eternal crisis and are blocking recovery by failing to play a full part in righting the ship, according to the Bank for International Settlements. The BIS said European banks played a huge role in stoking the pre-Lehman credit bubble. They rotated $1.25 trillion into US debt alone between 2003 and 2007, greater than the combined purchases of Asia and OPEC. It said banks funnelled money into southern Europe regardless of risk in 'expectations of a bail-out' if any country got into trouble." Continue reading →

Continue ReadingBIS blames European banks for eternal euro crisis

IMF sees no end to French jobless crisis this decade

"The IMF said the jobless rate will rise yet further to 11.6pc in 2014 and will not drop below 10.6pc within Mr Hollande’s five-year term. If this grim scenario unfolds, it will be a political hammer blow for Mr Hollande. He asked the nation to judge him on his record in 'bending the unemployment curve'. The Fund said efforts to bring down the budget deficit should focus on spending cuts rather than fresh taxes, 'which are among the highest by international standards and have a negative effect on investment and job creation'. Two-thirds of Mr Hollande’s fiscal squeeze has come from taxes, to the fury of the business lobby Medef." Continue reading →

Continue ReadingIMF sees no end to French jobless crisis this decade

40% Of US Workers Now Earn Less Than 1968 CPI-Adjusted Minimum Wage

"40.28% of all workers make less than $20,000 a year in America today. So that means that more than 40 percent of all U.S. workers actually make less than what a full-time minimum wage worker made back in 1968. That is how far we have fallen. Good paying full-time jobs are disappearing, and they are being replaced by low paying part-time jobs. So far this year, 76.7 percent of the jobs that have been 'created' in the U.S. economy have been part-time jobs. That would be depressing enough, but what makes it worse is that wages for many of these low paying jobs have actually been declining over the past decade even as the cost of living keeps going up." Continue reading →

Continue Reading40% Of US Workers Now Earn Less Than 1968 CPI-Adjusted Minimum Wage

Bond Losses at Federal Reserve Top $192 Billion In 3 Months

"Granted, the Bernanke & Co. does not value its massive bond portfolio on a mark-to-market basis. But the surge in interest rates has already erased almost $200 billion in the Federal Reserve’s capital. But that’s not all. If interest rates continue to head higher, the value of the Fed’s liquid assets that it could sell would decline and further undermine its capital cushion. And if the velocity of rate increases intensifies, the Fed, with only $62 billion in capital, could see its entire capital base completely wiped out. This could have a serious domino effect. It could paralyze the Fed’s ability to defend the dollar’s purchasing power." Continue reading →

Continue ReadingBond Losses at Federal Reserve Top $192 Billion In 3 Months

Poor Economy = Low Gold Price?

"By the time 1979 hit, inflation was rising, gas prices were soaring, incomes were dropping, and mortgage rates were climbing. The S&P was rising, but not so much in real terms. GDP growth was high, but it was clearly not a rosy time for consumers or workers. So how did gold perform during this challenging economic environment? The gold price rose 23% in 1977 and 37% in 1978, both of which are considered economic expansion years. But as things worsened in 1979, the price accelerated and went into a mania, ending the year with an incredible 127% return." Continue reading →

Continue ReadingPoor Economy = Low Gold Price?

Housing…”For-Sale” Supply Wave Hitting Market?

"The housing market has been turbocharged by the greatest direct stimulus in history over the past 18 months. I hear so much that the past year 'recovery' has to be 'organic' because the 'government' is not providing any stimulus or subsidies. Perhaps, technically they are correct because the Fed is not a government agency. But when you factor in the power of the Fed buying rates down from 5.5% in 2011 to 3.25% in 2012/13 on demand and 6.5 million mortgage mods on supply you come up with a very volatile situation if that go-go-juice is ever taken away. And it was just taken away." Continue reading →

Continue ReadingHousing…”For-Sale” Supply Wave Hitting Market?

The Case for Fed Tapering Sooner Rather Than Later

"The best way to (ahem) get the attention of the political class is to taper now, trigger a stock market decline and speak directly to the elected leadership's need to put the fiscal house in order. This is the only way the Fed can escape taking the bullet during the next financial crisis. 'We told you so' is much better than 'we did everything we could and it still fell apart.' Better to engineer a mini-crisis while you're still in control than let a crisis you can't control run away from you, and better to pass the ticking time-bomb to the elected leadership while you still can." Continue reading →

Continue ReadingThe Case for Fed Tapering Sooner Rather Than Later

This Could Shake Muni Bonds to the Core

"Detroit went bankrupt, but so what? Its own decades-long gross political mismanagement, corruption and incompetence pushed the city over the cliff into bankruptcy. Why should we care? The largest Chapter 9 filing in U.S. history will reverberate well beyond this once- bustling city and its creditors. What's most threatening to muni bond investors, and in fact all investors, is whether the city's general obligation bonds are secured or unsecured issues. General obligation bonds, backed by a city's ability to levy taxes to pay interest and principal, are thought to be the safest of all munis. Detroit is putting this to the test." Continue reading →

Continue ReadingThis Could Shake Muni Bonds to the Core