sound money

Bernanke: I’m Clueless About Gold

"Chmn. Bernanke: When we buy securities from a private citizen, we create a deposit in their bank, and it shows up as reserves. So if you look up our balance sheet, our balance sheet balances. We have Treasury securities on the asset side. On the liability side we have either cash or reserves at banks, and on the margin that’s what has been building up as excess reserves at banks. Rep. Rothfus: You create the reserves? Chmn. Bernanke: Yes. Rep. Rothfus: Is that printing money? Chmn. Bernanke: Not literally." Continue reading →

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Detroit Suffers the Biggest Municipal Bankruptcy Ever — Are Your Muni Bonds Safe?

"The move is clearly a tragedy for Detroit residents, workers and retirees. Many will see their health-care and pension benefits slashed. But, ultimately, Detroit felt it had no choice to get out from under its crushing burden. But what about the broader implications? What does this mean for the $3.7 trillion municipal-bond market? Well, many market pundits will claim Detroit is an isolated case. Many bond-fund managers will try to downplay the significance of this. Do not fall for it. First, Detroit is far from alone. While it is certainly the largest municipality to go broke, the city is just the latest in a long line of troubled municipal borrowers to tumble into bankruptcy." Continue reading →

Continue ReadingDetroit Suffers the Biggest Municipal Bankruptcy Ever — Are Your Muni Bonds Safe?

101 Million Americans Received Food Aid Last Year

"Nearly one-third of Americans received government-funded food aid in 2012, according to a new report from the U.S. Department of Agriculture (USDA). There are roughly a dozen federal food assistance programs operating today. The USDA reports that 59 percent of households that participated in one of the four largest food assistance programs—food stamps, school breakfasts, school lunches, and WIC—end up receiving benefits from 'two or more programs.' This indicates significant duplication, 'providing participants total benefits in excess of 100 percent of daily nutritional needs.'" Continue reading →

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Orphans: Adding Company Value in the Biotech Space

"While orphan drugs' share of the $880-billion global pharmaceuticals market remains small—at $50 billion as of the end of 2011, or just 6% of the total—their growth curve has been steep. Thomson Reuters reports that between 2001 and 2010, orphan drugs posted a compound annual growth rate of 25.8%, outstripping the 20.1% CAGR returned by a matched non-orphan control group. With these kinds of eye-popping profits being raked in by orphan drug makers, the investment world has taken notice." Continue reading →

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Going, Going, Gone: Crisis-Plagued Madrid Sells Out City Assets

"Mayor Ana Botella would like to bring the Summer Olympics to Madrid in 2020, following the city's third attempt to capture the games. Her predecessors have already invested more than €6 billion in the effort, and she needs at least another €2.5 billion. That might explain why, in recent months, Botella has begun to sell off public buildings and properties -- even if she hasn't managed to raise very much money so far. A Chinese bank snatched up a magnificent building near the Prado Museum at a price discount of almost a third. The fire sale also included 26 works by Spain's best-known contemporary artists, which were part of the city hall's inventory." Continue reading →

Continue ReadingGoing, Going, Gone: Crisis-Plagued Madrid Sells Out City Assets

The Jobs Number Is B.S., Says Former Head Of B.L.S.

"Keith Hall believes the US economy is a lot sicker than the 7.6 percent unemployment rate would lead you to believe. And he should know. Hall was, from 2008 until last year, the guy in charge of Washington’s Bureau of Labor Statistics, the agency that compiles that rate. 'Right now [it’s] misleadingly low,' says Hall, who believes a truer reading of those now wanting a job but without one to be more than 10 percent. The fly in the ointment is the BLS employment-to-population ratio, which is currently at 58.7 percent. 'It’s lower than it was when the recession ended. I think that’s a remarkable statistic.'" Continue reading →

Continue ReadingThe Jobs Number Is B.S., Says Former Head Of B.L.S.

Detroit Declares Bankruptcy; Citizen Layoffs Begin

After decades of mismanagement, decay, and taxpayer flight led to one of the largest municipal bankruptcies in U.S. history Friday, city officials have begun circulating notices informing citizens that their continued residence would no longer be required. "Look, there's really no need to spell out what everyone knows: Detroiters are a net drain on the Detroit economy," said city emergency manager Kevyn Orr. "The city services they consume cost far in excess of what they can afford. The sooner we complete this restructuring, which will unfortunately require a significant reduction in headcount, the sooner we will be back on track as a city." Continue reading →

Continue ReadingDetroit Declares Bankruptcy; Citizen Layoffs Begin

Obama Flashback: “We Refused to Let Detroit Go Bankrupt”

"In October of 2012, President Barack Obama triumphantly declared he 'refused to throw in the town' and 'let Detroit go bankrupt.' On July 18, 2013, Detroit went bankrupt. 'We refused to throw in the towel and do nothing. We refused to let Detroit go bankrupt. We bet on American workers and American ingenuity, and three years later, that bet is paying off in a big way,' Obama said in his weekly address. To be fair, it seems that Obama was touting Detroit of an example of how his administration 'saved' the automobile industry. Clearly though, this administration’s big government policies were still not enough to save the city from economic ruin." Continue reading →

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City of Detroit Files for Chapter 9 Bankruptcy

"If the Chapter 9 filing is approved, Detroit’s case would be the largest municipal bankruptcy in the history of the United States. The tax base has been destroyed. Detroit lost a quarter-million residents between 2000 and 2010. A population that in the 1950s reached 1.8 million is struggling to stay above 700,000. Much of the middle-class and scores of businesses also have fled Detroit, taking their tax dollars with them. Likely those holding any of the $11 billion in unsecured debt will get next to nothing. Per person, the debt of the U.S. government ($54K/person) is about twice as large as the debt of the City of Detroit ($26K/person)." Continue reading →

Continue ReadingCity of Detroit Files for Chapter 9 Bankruptcy

7 Ways The Obama Administration Has Accelerated Police Militarization

"In many of these examples, Obama is merely continuing policies that began in previous administrations. And there are some areas where he has made progress, notably by apportioning a greater portion his anti-drug budget to treatment instead of enforcement. But in several of the examples above, he has actually stepped up the policies he inherited. Obama the candidate made some unusually frank and critical statements about the drug war, incarceration, and the criminal justice system. His drug czar then showed some rare insight into the dangers of war rhetoric when discussing domestic policing. Obama the president has been more of the same, and in some cases worse." Continue reading →

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