Economics

Inflation is rotten to the core: Regardless of what Fed says, prices are rising

"You might be just a trifle curious about how the use of the core rate of inflation (leaving out food and energy) came into being. The core rate of inflation was the brainstorm of Arthur F. Burns, chairman of the Federal Reserve during the early 1970s. The object of this exercise was to take people’s eyes off what was really happening to prices so that the Fed of that era could run an ultra-easy monetary policy. The professorial Burns managed to convince the Congress, the government’s statistical agencies, the press and his fellow economists that excluding food and energy was the right way to look at prices." Continue reading →

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Bill Bonner: How America’s Working Stiffs Got Stiffed

"The Party leadership is not infallible. Neither in China nor in the US. In both countries, the feds – looking out for themselves – make policy decisions that are disastrous for others. We have no idea what calamity the central planners will cause in China. But we can take a fair guess of what they will do to America. Broadly, China’s feds build too many factories, malls and apartments. America’s feds encouraged the opposite error – borrowing and spending too much for consumption purposes. China’s real wages doubled in the last 10 years… after doubling in the previous 10 years. That is why the Chinese feel so much better off. They ARE much better off." Continue reading →

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Peter Schiff: Buy Gold and Silver Now, Money Printing Until We Have A Currency Crisis & More

"Fed Chief Ben Bernanke is going to be replaced by the end of this year. CEO of Euro Pacific Precious Metals, Peter Schiff, speculates on his replacement by saying, 'If it's solely based on which Fed Chairman is the most bullish for gold and silver, I would say that would be Janet Yellen. No matter who's put in at the Fed, they are going to keep printing because that's all they can do.' Schiff warns, 'They're going to keep printing until we have a currency crisis . . . and that is the most bullish environment for gold. Don't wait for the crisis to buy because you are not going to like the price.'" Continue reading →

Continue ReadingPeter Schiff: Buy Gold and Silver Now, Money Printing Until We Have A Currency Crisis & More

The Debt Ceiling Battle Is Coming

"A working paper by economist James Hamilton, of UC San Diego, for the National Bureau of Economic Research indicates that the official federal debt, $16.7 trillion, is the tip of the iceberg. Currently, the feds are $86.8 trillion in debt, according to Hamilton. The Treasury department has been looting government pensions to hold the debt ceiling at bay. This can go on for another month or so until the battle in Congress begins again. Sunday, Treasury Secretary Jack Lew pre-empted the debt ceiling fight with a strike against the GOP on Meet the Press. Lew predictably blamed the debt ceiling for the S&P crash of summer 2011." Continue reading →

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Chicago’s Cash-on-Hand Plunges

"Mayor Rahm Emanuel closed the books on 2012 with $33.4 million in unallocated cash on hand — down from $167 million the year before — while adding to the mountain of debt piled on Chicago taxpayers, year-end audits show, reports the Chicago Sun Times. Last week, Moody’s Investors ordered an unprecedented triple-drop in the city’s bond rating, citing Chicago’s 'very large and growing' pension liabilities, 'significant' debt service payments, 'unrelenting public safety demands'." Continue reading →

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Cities’ Strategy in Health Insurance for Retirees: “Dump Them Into ObamaCare!”

"The 61 largest U.S. cities in 2009 were in the hole by about $118 billion to retirees’ health insurance obligations. They now think they have a way out: default on these obligations and force retirees into ObamaCare. This gets the obligations off their backs and onto the backs of the federal government. This is what Detroit is doing. Other cities’ officials are impressed. But Detroit is declaring bankruptcy. How can the other cities get out from under without declaring bankruptcy?" Continue reading →

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Obamacare panel approves free cancer screenings for heavy smokers

"Using a highly sensitive test like a CT scan to look for early signs of lung cancer will undoubtedly result in high rates of false positives. The NLST found that 320 high-risk smokers had to be screened to prevent one lung cancer death. Because of that, and the risk from radiation from the CT scans, LeFevre stressed that the screening should only be used in the high-risk groups specified by the guidelines. What worries LeFevre and others is that some doctors and hospitals will try to profit from screening, which costs a few hundred dollars a test. 'We hope that physicians will not use this recommendation to exaggerate the benefits of screening,' he said." Continue reading →

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Enforcement of immigration laws could be making human trafficking tougher to detect

"The threat of arrest and deportation is a common tool traffickers use to control their victims, experts say. Even those immigrants who arrive on a legitimate work-related visa have become trafficking victims. These visas usually bind the worker to an employer, who can hold that requirement over their head and even become their trafficker. 'If employment ends, then so does visa status,' says Avaloy Lanning, a senior director at Safe Horizon, a New York-based victim's services agency. 'The trafficker uses that against them, [saying], if you run then you're going to be illegal, then immigration is going to pick you up, arrest you and deport you.'" Continue reading →

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Bill Bonner: Goodbye, Motor City

"Motor City has been flattened. Now it’s being scrapped. The largest municipal bankruptcy in history. Detroit was once one of the richest…and most dynamic…cities in the world. And it was the centre of America’s most profitable industry: automobiles. German and Japanese automakers had the good fortune to be bombed out in World War II. But Detroit grew bigger…more prosperous…and full of zombies. Yes, dear reader, Detroit is a zombie story. Since 1971, almost all big stories have a zombie angle. Because the credit-based monetary system that Richard Nixon put us in is a perfect habitat for zombies." Continue reading →

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Should Detroit’s Bankruptcy Be an Early-Warning Sign for Washington?

"There’s no way a bailout of Detroit goes through the House of Representatives. Heck, I don’t even think it could make it through the Senate. So some folks on the left would be justified if they asked why the high rollers on Wall Street supposedly deserved a bailout a few years ago but they don’t get one today. The answer, of course, is discrimination by color. But I’m not talking black vs white. The color that matters in politics is green. The financial industry dispenses huge campaign contributions to both sides of the aisle, and the bailout was their payoff. Public employee unions, by contrast, give almost every penny of their money to Democrats." Continue reading →

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