Economy – Page 1050 – Infinite Unknown

Ron Paul: This coming crisis is bigger than the world has ever experienced

July 3, 2008 by Infinite

The following statement is written by Congressman Paul about the pending financial disaster.

He will introduce this statement as a special order and insert it into the Congressional Record next week. Fortunately, we have the opportunity to debut it first on the Campaign for Liberty blog. It reads as follows:

I have, for the past 35 years, expressed my grave concern for the future of America. The course we have taken over the past century has threatened our liberties, security and prosperity. In spite of these long-held concerns, I have days-growing more frequent all the time-when I’m convinced the time is now upon us that some Big Events are about to occur. These fast-approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed.

Though the world has long suffered from the senselessness of wars that should have been avoided, my greatest fear is that the course on which we find ourselves will bring even greater conflict and economic suffering to the innocent people of the world-unless we quickly change our ways.

America, with her traditions of free markets and property rights, led the way toward great wealth and progress throughout the world as well as at home. Since we have lost our confidence in the principles of liberty, self reliance, hard work and frugality, and instead took on empire building, financed through inflation and debt, all this has changed. This is indeed frightening and an historic event.

The problem we face is not new in history. Authoritarianism has been around a long time. For centuries, inflation and debt have been used by tyrants to hold power, promote aggression, and provide “bread and circuses” for the people. The notion that a country can afford “guns and butter” with no significant penalty existed even before the 1960s when it became a popular slogan. It was then, though, we were told the Vietnam War and a massive expansion of the welfare state were not problems. The seventies proved that assumption wrong.

Citigroup says long-term gold price could double or even triple

August 22, 2008July 3, 2008 by Infinite

Citigroup forecasts that “gold is likely to regain $1,000/oz by end-08 and to work higher through 2009-2010.”

In their recent Gold Commodity Update, Citigroup metals analysts John H. Hill and Graham Wark also predicted that “longer term, we believe that gold is capable of doubling or tripling from current levels.”

The Citi global metals forecasts have an upward bias, at $906/$950/1000 average in 2008/09/10.

The analysts said “secular and seasonal factors favor gold” during the second half of this year. “We remain positive on gold, based on macro and supply/demand factors. The forces that have propelled gold for 5 years are firmly in place.”

During the second quarter of this year, gold has averaged $896/oz, up 34% from the same quarter of 2007 and down 3% from the first quarter of this year. “Following a series of downside fundamental tests gold appears to have found a floor, and quietly climbed back to $917/oz.”

“Despite extensive hand-wringing, the ‘floor in the dollar’ has inflicted minimal damage,” the analysts noted. “We believe the drivers of the gold bull market remain intact, heading into a favorable period.”

“We see gold as well-positioned heading into Autumn, when fabrication tends to heighten the market,” they added.

The Dollar is being destroyed, Wall Street is collapsing, the U.S. are broke.
Of course Gold and Silver! will double and then triple.
Gold and Silver are the only safe haven in the coming meltdown of the financial markets.
It takes an extraordinary bright analyst to come to that conclusion!
More Information here: World Situation & Solution – The Infinite Unknown

Nevertheless, Hill and Wark warned, “It will be important for seasonal/volatility dampened fabrication demand to recover, before gold can move higher.” However, they added,” Longer term, we would not be surprised to see gold double from current levels as the global policy prescriptions for the credit crunch remain powerfully and uniformly re-flationary.”

ECB raises key rate to 4.25%

July 3, 2008 by Infinite

FRANKFURT: The European Central Bank, spooked by soaring prices for food and fuel, raised interest rates Thursday, joining several other central banks in battling a global eruption of inflation.

The quarter-point hike, which the bank had signaled last month, had little initial effect on markets, with the euro treading water against the dollar and stocks staying relatively steady. Central banks in Sweden and Norway also raised rates this week, citing inflation. On Thursday, Indonesia raised its key interest rate for the third time this year, while India raised its key lending rate twice last month.

The Federal Reserve in the United States, where short-term interest rates are only half of those in Europe, has so far declined to join them.

The European Central Bank’s decision deepens a recent divergence in monetary policy across the Atlantic, ending a long period when it tended to follow the course set by the Fed.

But the sharp rise in inflation has put Europe’s bank into a policy bind because it has been accompanied, in recent days, by evidence that the economy here is deteriorating much like that of the United States.

Manufacturing activity in the 15 countries that use the euro shrank in June for the first time in three years, according to a survey of European purchasing managers. In Spain and Ireland, where a collapse in housing prices has magnified the problems, there is a real risk of recession.

Still, the European Central Bank, hewing to its inflation-fighting mandate, pressed on with the expected increase, moving the benchmark rate to 4.25 percent from 4 percent. Among other things, it is intended as a warning to unions not to use higher inflation as a lever to demand hefty wage increases.
_____________________________________________________________________________________

Say goodbye to the Dollar and to Wall Street.
Got Gold and Silver? – The Infinite Unknown

_____________________________________________________________________________________

It was not clear, before an afternoon news conference chaired by the bank’s president, Jean-Claude Trichet, whether the rate increase would be a one-time gesture or the start of a cycle of tighter monetary policy.

Several economists said they doubted the bank could tighten much further, given the parlous economic situation.

“The ECB is hiking at a time when confidence is plummeting,” said Thomas Mayer, the chief European economist at Deutsche Bank. “The question is, ‘what do you do when asset prices fall at the same time that consumer prices rise?’ The central bankers seem to have reached the end of the line.”

Why Floods Bring America To Its Knees

July 2, 2008July 2, 2008 by Infinite

A catastrophe for Iowa farmers will not be just a catastrophe for Midwestern Americans. In the Iowa floods, we’ll see more evidence of how the problems of weird weather (climate change) combine and ramify the problems associated with Peak Oil. In this particular case they lead to an inflection point sometime around the 2008 harvest season, which will also be our time of political harvest.

These are not your daddy’s or granddaddy’s floods. These are 500-year floods, events not seen before non-Indian people started living out on that stretch of the North American prairie. The vast majority of homeowners in Eastern Iowa did not have flood insurance because the likelihood of being affected above the 500-year-line was so miniscule – their insurance agents actually advised them against getting it.

The personal ruin out there will be comprehensive and profound, a wet version of the 1930s Dust Bowl, with families facing total loss and perhaps migrating elsewhere in the nation because they have no home to go back to.

Iowa in 2008 will be an even slower-motion disaster than Hurricane Katrina in 2005. Beyond the troubles of 25,000 people who have lost all their material possessions is a world whose grain reserves stand at record lows. The crop losses in Iowa will aggravate what is already a pretty dire situation. So far, the US public has experienced the world grain situation mainly in higher supermarket prices.

Cheap corn is behind the magic of the American processed food industry – all those pizza pockets and juicy-juice boxes that frantic Americans resort to because they have no time between two jobs and family-chauffeur duties to actually cook (note: reheating is not cooking).

CBS: Report predicts $7/gallon gas 6/27/08

July 2, 2008 by Infinite

A new energy report predicts that oil will cost $200 a barrel in two years. If that happens, gas would go up to $7 a gallon. CBS News’ Priya David reports on the huge impact that would have on American lives.

Source: YouTube

US: Big Trouble for General Motors, Crysler and Ford

September 5, 2008July 2, 2008 by Infinite

Shares of General Motors are trading at prices last seen in the 1950s.

(Consider that the Dollar today is worthless compared to 1950! – The Infinite Unknown)

America’s automobile industry may be facing the biggest turnaround challenge in its history, a problem punctuated Tuesday as the carmakers released monthly sales results.

Times were tough enough in Detroit before gasoline hit $4 per gallon, but in the past two months the outlook has taken a turn for the worse.

Shares of General Motors are trading at prices last seen in the 1950s, their value cut in half in just eight weeks. Ford and Chrysler are in even worse shape, analysts say.

The sobering implication: The Big Three may have to become the Big Two, and even survivors will have a tough road ahead.

Bankruptcy is not a near-term threat, but the three carmakers are fast burning through cash reserves. And while government assistance – or perhaps an energy policy that supports new automotive technologies – could become a lifeline, it can’t substitute for the hard work of transforming product lines.

Reporter Mark Trumbull discusses the current situation for car manufacturers.

“The rate of cash usage is alarming,” says Gregg Lemos Stein, an auto analyst at Standard & Poor’s in New York, which has put all three carmakers on “credit watch” to review the default risk on their debts. “They’ve never been lower than this,” he adds, referring to S&P’s current B rating on their debt.

The current debt ratings place the Detroit automakers in what’s known as “junk bond” status, below the typical quality range known as investment grade. The good news: Bankruptcy or default isn’t an imminent risk, Mr. Lemos Stein says, because the companies headed into this crisis with cash on hand.

But the credit watch, in place as of June 20, means that analysts are concerned about a deteriorating outlook.

“We believe all three companies currently have ample liquidity for at least the rest of 2008 as measured by cash balances, available bank facilities, and … unencumbered assets” that could be sold, S&P analysts said in their recent report.

The cash-flow problem could reach “undesirable” levels by the second half of next year, they said.

Europe may push the Fed to raise rates

July 1, 2008 by Infinite

The European Central Bank is expected to boost a key rate Thursday in order to fight inflation. The move may cause a weaker dollar and force the Fed’s hand.

NEW YORK (CNNMoney.com) — The fireworks may come a day early for the financial markets if the European Central Bank, as expected, raises interest rates on Thursday.

If the ECB, Europe’s counterpart to the Federal Reserve, hikes rates, that could put even further pressure on the anemic dollar and send commodity prices even higher.

The ECB will announce its decision on interest rates early the morning of July 3 and will hold a press conference shortly thereafter to discuss the decision.

Members of the ECB, most notably its president Jean-Claude Trichet, have been talking loudly about inflation concerns in recent weeks and have hinted that a rate hike will take place at Thursday’s meeting.

If the ECB does raise rates by a quarter-of-a-percentage point, that would leave its benchmark short-term rate at 4.25%. By way of comparison, the Fed’s federal funds rate is just 2%.

Dow suffers worst 1st half since ’70

July 1, 2008July 1, 2008 by Infinite

Related articles and videos:

– Fortis Bank Predicts US Financial Market Meltdown Within Weeks

– Barclays warns of a financial storm as Federal Reserve’s credibility crumbles

– Jim Rogers: Avoid The Dollar At All Costs

– Ron Paul on Iran and Energy June 26, 2008

– Marc Faber: ‘Misleading’ Fed Should Let Banks Fail

NEW YORK (Reuters) – The Dow and S&P 500 were little changed on Monday on the final trading day of the second quarter as record oil boosted energy shares, offsetting weak financial stocks amid nagging concerns of further credit losses.

But even with the pause on Monday, the Dow and S&P posted their worst one-month drop since September 2002. The Dow also suffered its worst first half since 1970.

The Nasdaq ended the session lower, hurt by a drop in the shares of Yahoo as it battles with shareholders after takeover talks with Microsoft fell apart.

GLOBAL ECONOMY – Factories hit worldwide as commodity prices soar

July 1, 2008July 1, 2008 by Infinite

LONDON/TOKYO (Reuters) – Soaring commodity costs are denting manufacturing activity in Asia and Europe and the outlook looks bleak as new orders drop off in the face of rising prices, surveys showed on Tuesday.

Manufacturing activity in the euro zone contracted in June for the first time in three years while business confidence in Asia’s largest export markets is buckling and output has likely contracted further in the United States.

Purchasing managers indices showed manufacturing activity in the euro zone fell to 49.2 in June, China saw its index fall to a near three-year low of 52.0 while in Britain it contracted at its sharpest rate since December 2001.

The 50.0 mark separates growth from contraction. Factories worldwide have struggled in the face of soaring raw material and energy costs — oil hit over $143 a barrel on Monday.

Meanwhile, the Bank of Japan’s tankan corporate index of big manufacturers’ sentiment dropped to plus 5, from 11 in March, showing their mood has not been darker since 2003.

Starbucks to cut as many as 12,000 positions

July 1, 2008July 1, 2008 by Infinite

LOS ANGELES (Reuters) – Starbucks Corp (SBUX.O) said on Tuesday it plans to close another 500 underperforming stores and eliminate as many as 12,000 fill- and part-time positions.

The company, which now plans to close a total of 600 underperforming stores, will take related charges totaling more than $325 million.

The majority of the stores will be closed by the end of the first half of its fiscal year ended September 2009, the company said.

America’s Shrinking Groceries

July 3, 2008July 1, 2008 by Infinite

American supermarkets are epics of excess: it often seems like every item in the store comes in a “Jumbo” size or has “Bonus!” splashed across the label. But is it possible that the amount of food Americans are buying is, in fact… shrinking? Well, yes. Soaring commodity and fuel prices are driving up costs for manufacturers; faced with a choice between raising prices (which consumers would surely notice) or quietly putting fewer ounces in the bag, carton or cup (which they generally don’t) manufacturers are choosing the latter. This month, Kellogg’s started shipping Apple Jacks, Cocoa Krispies, Corn Pops, Froot Loops and Honey Smacks containing an average of 2.4 fewer ounces per box.

Similar reductions have recently happened or are on the horizon for many other products: Tropicana orange juice containers are shrinking from 96 ounces to 89; Wrigley’s is dropping its the 17-stick PlenTPak in favor of the 15-stick Slim Pack; Dial soap bars now weigh half an ounce less, and that’s even before they melt in the shower. Containers of Country Crock spread, Hellmann’s mayonnaise and Edy’s and Breyer’s ice cream have all slimmed down as well (although that may not necessarily be a bad thing).

“People are just more sensitive to changes in price than changes in quantity,” says Harvard Business School Professor John Gourville, who studies consumer decision-making. “Most people can tell you how much a box of cereal costs, but they have no clue how much is actually in it.” Other segments of the economy have made similar moves to pass on their higher costs to the consumer without raising prices directly. American Airlines announced in May that it would charge $15 each way for a single checked bag, part of what airlines have dubbed “a la carte” pricing, which – along with the industrywide drive to put price tags on former freebies like soft drinks, meals and headphones – some airline observers say is really an effort to avoid increasing base ticket prices.

Read moreAmerica’s Shrinking Groceries

IMF orders X-ray of the entire US financial system

June 30, 2008 by Infinite

IMAGINE the Reserve Bank of Australia, concerned that its friends in the city of Sydney (but perhaps Melbourne) who, having wallowed in wealth all their adult lives, were no longer gainfully employable and their wildly extravagant lifestyles were in danger, and, having the powers to intervene in the market, decided to do just that on their behalf.

Imagine them offering to enter the market and buy shares that would prop up the foolish gambles of the bankers, gambles they had encouraged them, until recently, to take by providing them with cheap money.

On top of that, they told this group they would provide hundreds of billions of dollars in credits to these same profiteers on the grounds they were so big and important to the economy they were indeed too big to fail.

Then, imagine, despite pouring untold taxpayers money into stocks and allowing their cronies access to vast sums, the system continued to fail. So they announced they would need greater power and with it more secrecy.

For its growing band of critics has, perhaps unwittingly and in the interest of public good, this has become the principal function of the US Federal Reserve.

If this was to happen in Australia the International Monetary Fund would be hammering at the door of the Reserve Bank. But Australia does not have a President’s Working Group on Financial Markets, commonly known as the Plunge Protection Team, that allows the US Government to prop up the markets by buying shares. But to imagine the IMF investigating the US financial system is unthinkable, or was. But, at the weekend, Der Spiegel reported that the IMF would conduct a full investigation into virtually every aspect of it.

Der Spiegel wrote that the IMF had “informed” Federal Reserve chairman Ben Bernanke of plans that would have been unheard of in the past: a general examination of the US financial system. The IMF’s board of directors has ruled that a so-called Financial Sector Assessment Program is to be carried out in the US.

This, Der Spiegel wrote, “is nothing less than an X-ray of the entire US financial system”, adding that “no Fed chief in US history has been forced to submit to the kind of humiliation that Ben Bernanke is facing”.

The fact that the IMF is knocking on the very doors of its parents and waving legal papers about who lost the house, the car and the kids will, if the past is anything to go by, be buried in the US by pom-pom waving on CNBC telling all what a great time it is to buy.

But the news that the US Fed has now lost its last vestige of credibility did not end with the German report.

The Telegraph from London weighed in, following the Royal Bank of Scotland’s statement last week (also lost on the US public) that it was time to head for the crags, and reported Barclays Capital’s closely watched Global Outlook analysis that said US headline inflation would hit 5.5% by August and the Fed would have to raise interest rates six times by the end of next year to prevent a wage spiral.

If the Fed hesitates, the bond markets will take matters into their own hands. “This is the first test for central banks in 30 years and they have fluffed it,” the report found. “They have zero credibility, and the Fed is negative if that’s possible. It has lost all credibility.”

Der Spiegel reports that the IMF is threatening to seriously study the accounts of America, something President George Bush is determined to prevent at least while he is in the White House, informing the IMF that it can begin its investigation but cannot complete it until he leaves office.

Jim Rogers: Avoid The Dollar At All Costs

June 30, 2008 by Infinite

Related articles and videos:

– Jim Rogers: Global Economic Outlook

– Jim Rogers: China’s Economic Advance is All But Unstoppable

– Jim Rogers: Bernanke should be fired 2008.03.19

– Jim Rogers says “Abolish the FED” on CNBC 2008.03.12

June 30 (Bloomberg) — Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, said investors should steer clear of the dollar as the U.S. economy slows and favor commodities this year.

The dollar has slipped 7.7 percent against the euro and 5.9 percent versus the yen in 2008 as the Federal Reserve cut interest rates to stave off a U.S. recession. Oil prices have doubled in the past 12 months, while gold is up 44 percent.

Avoid the dollar “at all costs,” Rogers, chairman of Rogers Holdings, said in a speech in Shanghai today. “The best investments in 2008 are commodities and natural resources. Agricultural prices have much higher to go over the next decade. We have a shortage of everything, including seeds.”

Oil and metal prices in New York have surged as a slumping U.S. currency made them cheaper for non-dollar investors to buy as a hedge against inflation in a slowing global economy. The dollar has stabilized in recent weeks, with currency volatility falling by the most since 1999 this quarter.

The comments from Rogers, 65, come two days after he told investors at a conference in Nanjing not to “give up” on Chinese shares, which have made China the world’s second worst performers this year. Rogers, who first started buying Chinese stocks in 1999, said he hadn’t sold any of his holdings.

Commodity Bull

The Dow-Crash, The Dollar, Gold, and WAR!

June 29, 2008 by Infinite

The June 2008 Dow Crash
and the coming first strike attack on Iran
herald the end of dollar hegemony.

BREAK-DOW!

They say that pictures speak a thousand words, so let’s start this with a picture:

Today, the Dow crashed through its eight-year support level at 11,750. There isn’t much below now to keep it from dropping all the way back down to the 7,500-range. What that will do to American investor psychology and worse, consumer confidence, and therefore spending, and therefore the economy, is only too apparent.

The gold-attack on Monday obviously didn’t take. Gold recovered the following day and powered up by $26 the very next day to close in NY at $911. On Friday, gold confirmed its breakout, which means there will be little holding it back – just like there is now very little that’s holding the Dow up.

Unsurprisingly, the US war machinery is in full swing at this time. Troop and military asset movements into the Iranian theater are nearly complete, the Israelis have flown their practice-attack of 100-plus fighter jets over the Mediterranean, and Congress has again prostrated itself before its banking-guild rulers who want total government (and therefore banking) of all economic activity.

Congress did this by passing the FISA Amendments Act of 2008 to give retroactive immunity to telcoms spying for the government, and by proposing a resolution (the already infamous H. Con. Res. 362) by which Congress demands that Bush completely blockade Iran in order to force it to stop enriching uranium. This, naturally, is a perfect setup for unleashing the long-planned bombing campaign on Iran. Congressmen know that Iran will not accede to these international demands.

End result: We will probably get another war because of all this, just like we got one back in 2002-03 when the Dow plunged into the chasm this recently broken support level has bridged for these past eight years (see chart above).

The problem is that this time, it is a bipartisan gang of US war mongers in our Congress who all appear hell-bent on forcing Bush to attack Iran with a preemptive strike, possibly even an unprovoked nuclear first strike – something that human history so far has not had to deal with.

It is also something that will cause the US to forfeit any legitimate claims of world leadership for the remainder of that history.

The War Currency

Wars are rarely fought over national security issues, as political leaders often claim. At rock bottom, they are mostly fought over economic issues.

Iraq and Iran (if Congress and the administration get their way) are the only two countries the US has ever attacked preemptively. They are also the only two oil-producing countries that ever went off the petrodollar. The alleged nuclear ambitions of a terrorist-sponsoring country cannot be the real reason for the planned attack – because terrorist-sponsor North Korea was not only allowed to develop nuclear weapons unmolested, it was even allowed to test-launch a potentially nuclear-tipped ICBM at the US without any military repercussions whatsoever.

There goes the “national security” rationalization for this planned attack.

This fact exposes the attacks for what they really are. tools of US monetary policy. The dollar has no real value internationally, save for the fact that the now militarily enforced necessity for countries to buy dollars in order to buy oil creates artificial demand.

The euro’s existence threatens all of this, now. Oil countries have a dollar-alternative in the euro, and so does the rest of the world. The euro is designed to not be quite as inflationary as the dollar is and has been. This is done by virtue of the ECB’s exclusive mandate of “price stability”, another word for inflation fighting.

Yet Another War Currency

The Price Of Food: 2007 – 2008

June 29, 2008 by Infinite

The meat prices will very soon go through the roof too, because the livestock is fed with corn, soybeans and hay. And the prices will continue to rise because of accelerating inflation, the missing bees, flooding and more natural disasters coming. – The Infinite Unknown
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Source: Cattle Network

		May	May	Percent
Meat & Dairy	Unit	2007	2008	Change
Ground Chuck	Lb	2.766	2.798	1.16%
Ground Beef	Lb	2.307	2.313	0.26%
Steak Round, Choice	Lb	4.134	4.178	1.06%
Bacon, Sliced	Lb	3.651	3.637	-0.38%
Pork Chops	Lb	3.194	3.268	2.32%
Chicken Breast	Lb	2.312	2.392	3.46%
Turkey, Frozen	Lb	1.146	1.258	9.77%
Eggs, Grade A	Doz	1.504	1.930	28.32%
Milk, Fresh	Gal	3.259	3.760	15.37%
Cheddar Cheese	Lb	3.976	4.397	10.59%
		Source: ERS/USDA – Retail Prices

Field Crops	Unit	2007	2008	Change
Barley	Bu	$3.12	$4.76	52.56%
Beans, Dry Edible	Cwt	$3.08	$5.06	64.29%
Corn	Bu	$3.49	$5.12	46.70%
Cotton	Lb	$0.44	$0.61	37.95%
Flaxseed	Bu	$7.08	$16.60	134.46%
Hay	Ton	$138.00	$166.00	20.29%
Lentils	Cwt	$13.20	$32.70	147.73%
Oats	Bu	$2.49	$3.46	38.96%
Peanuts	Lb	$0.18	$0.20	12.29%
Peas, Dry Edible	Cwt	$10.10	$16.40	62.38%
Potatoes	Cwt	$7.95	$9.21	15.85%
Rice, Rough	Cwt	$10.00	$15.00	50.00%
Sorghum	Cwt	$6.49	$9.18	41.45%
Soybeans	Bu	$7.12	$12.30	72.75%
Sunflower	Cwt	$16.60	$27.40	65.06%
Wheat	Bu	$4.88	$8.80	80.33%
		Source: USDA/NASS – Ag Prices Received

		May	May	Percent
Fruits	Unit	2007	2008	Change
Apples	Lb	$0.27	$0.34	26.02%
Grapefruit	Box	$4.49	$5.12	14.03%
Lemons	Box	$8.14	$20.77	155.16%
Oranges	Box	$11.12	$6.95	-37.50%
Peaches	Ton	$820.00	$948.00	15.61%
Pears	Ton	$651.00	$525.00	-19.35%
Strawberries	Cwt	$68.60	$66.70	-2.77%
Tangerines	Box	$17.01	$5.98	-64.84%
		Source: USDA/NASS – Ag Prices Received

		May	May	Percent
Vegetables	Unit	2007	2008	Change
Asparagus	Cwt	$91.90	$99.80	8.60%
Broccoli	Cwt	$26.70	$27.30	2.25%
Carrots	Cwt	$32.00	$25.50	-20.31%
Cauliflower	Cwt	$24.90	$37.40	50.20%
Celery	Cwt	$18.30	$37.70	106.01%
Cucumbers	Cwt	$28.50	$17.50	-38.60%
Lettuce	Cwt	$13.60	$16.80	23.53%
Onions	Cwt	$24.20	$31.70	30.99%
Snap Beans	Cwt	$38.80	$39.60	2.06%
Sweet Corn	Cwt	$21.40	$23.10	7.94%
Tomatoes	Cwt	$35.60	$40.40	13.48%
		Source: USDA/NASS – Ag Prices Received

Prepared By: Rob Cook, [email protected]

As Bill Evolves, Mortgage Debt Is Snowballing

June 28, 2008June 28, 2008 by Infinite

When Congress started fashioning a sweeping rescue package for struggling homeowners earlier this year, 2.6 million loans were in trouble. But the problem has grown considerably in just six months and is continuing to worsen.

More than three million borrowers are in distress, and analysts are forecasting a couple of million more will fall behind on their payments in the coming year as home prices fall further and the economy weakens.

Those stark numbers not only illustrate the challenges for the lawmakers trying to provide some relief to their constituents but also hint at what the next administration will be facing after the election. While the proposed program would help some homeowners, analysts say it would touch only a small fraction of those in trouble – the Congressional Budget Office estimates it would be used by 400,000 borrowers – and would do little to bolster the housing market.

“It’s not enough, even in the best of circumstances,” said Mark Zandi, chief economist of Moody’s Economy.com. The number of people who will be helped “is going to be overwhelmed by the three million that are headed toward default.”

OPEC Leader Khelil Says Dollar Will Drive Oil to $170

June 28, 2008June 28, 2008 by Infinite

June 28 (Bloomberg) — OPEC President Chakib Khelil predicted that the price of oil will climb to $170 a barrel before the end of the year, citing the dollar’s decline and political conflicts.

“Oil prices are expected to reach $170 as demand for fuel is growing in the U.S. during the summer period and the dollar continues to weaken against the euro,” Khelil said today in a telephone interview. The leader of the Organization of Petroleum Exporting Countries also serves as Algeria’s oil minister.

Political pressure on Iran and the depreciation of the U.S. currency have caused a surge in oil prices, Khelil said. New York- traded crude has more than doubled in a year and touched a record $142.99 a barrel yesterday on the New York Mercantile Exchange.

OPEC ministers generally say that oil output is sufficient, even as Saudi Arabia, the biggest producer, pledged to pump an extra 200,000 barrels a day next month to calm the market. “The market is completely supplied,” Venezuelan Oil Minister Rafael Ramirez said yesterday. Libya announced possible production cuts, calling the market oversupplied.

The rising cost of crude is not linked to supply, Khelil said today. “There is more than enough oil in the market to meet the international demand,” added the OPEC president, who will take part June 30 in an international energy forum in Madrid.

Prices, which are up 38 percent this quarter, are heading for the biggest quarterly gain since the first three months of 1999, when oil traded between $11 and $17.

Declining Dollar

“The decisions made by the U.S. Federal Reserve and the European Central Bank helped the devaluation of the dollar, which pushed up oil prices,” Khelil said.

Marc Faber: ‘Misleading’ Fed Should Let Banks Fail

June 28, 2008 by Infinite

Got Gold and Silver? – The Infinite Unknown

Part 1:

Part 2:

June 27, 2008

Source:
-1- You Tube

-2- You Tube

Biofuel Plants Go Bankrupt on Feedstock Costs

June 28, 2008 by Infinite

NEW YORK — Soaring corn and soy prices on top of rising construction costs and tight credit markets have pushed about a dozen U.S. biofuel plants to file for bankruptcy protection, experts said.

Prices for corn, the feedstock for most U.S. ethanol plants, hit fresh records above $8 per bushel this week as floods this month in the Midwest have caused billions of dollars of crop damage.

“Corn prices are making the feasibility of ethanol plants every day more and more questionable,” said Alex Moglia, president of Moglia Advisors in suburban Chicago, which helps biofuel companies restructure.

Meanwhile prices for soy oil, the feedstock for most biodiesel plants, have been been high on rising global demand for months, making life miserable for most producers. The miserable profit margins have pushed many makers of the alternative motor fuel to run plants at only about half of their capacity.

Moglia said about 12 small to midsize biodiesel and ethanol plants have declared bankruptcy in recent months. Renova Energy LLC, a company that owns a partially built 20 million-gallons-per year ethanol plant in Idaho, was the latest to declare bankruptcy last week. Kansas-based Ethanex Energy Inc declared bankruptcy in March.

“There will be more to follow,” said Moglia. Some plants are restructuring their debt and taking steps to manage risks, but many others are not, he said.

McCain Would Give America’s 200 Largest Corporations $45 Billion In Tax Breaks

June 28, 2008June 28, 2008 by Infinite

If you’re a CEO of one of America’s largest corporations and have enjoyed the Presidency of George W. Bush, a contribution to the McCain campaign is looking like a pretty good investment.

A new report from the Center For American Progress Action Fund finds that a key piece of John McCain’s tax plan — cutting the corporate tax rate from 35% to 25% — would cut taxes by almost $45 billion every year for America’s 200 largest corporations as identified by Fortune Magazine.

Eight companies — Wal-Mart Stores Inc., Exxon Mobil Corp., ConocoPhillips Co., Bank ??of America Corp., AT&T, Berkshire Hathaway Inc., JPMorgan Chase & Co., and Microsoft Corp. — would each receive over $1 billion a year.

The following table shows the tax savings to America’s five largest firms. See a full list of all 200 companies and their savings under McCain here:

These giveaways are just one part of McCain’s doubling of the Bush tax cuts for corporations and the wealthy which would create the largest deficits in 25 years and drive the United States into the deepest deficits since World War II.

A recent analysis by the Public Campaign Action Fund found that John McCain’s campaign has received $5.6 million from the PACs and executives of the Fortune 200.

Over the past eight years, under George W. Bush, American workers have seen their wages stagnate as corporate profits have skyrocketed. John McCain’s misguided priorities show he’s more of the same: the same $45 billion in tax cuts for America’s 200 largest companies could be used to lift over 9 million Americans out of poverty.

Barclays warns of a financial storm as Federal Reserve’s credibility crumbles

June 28, 2008June 28, 2008 by Infinite

Strategists at Barclays accuse Ben Bernanke of a policy blunder

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall “below zero.”

“We’re in a nasty environment,” said Tim Bond, the bank’s chief equity strategist. “There is an inflation shock under way. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth.”

Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands. “This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that’s possible. It has lost all credibility,” said Mr Bond.

The grim verdict on Ben Bernanke’s Fed was underscored by the markets yesterday as the dollar fell against the euro following the bank’s dovish policy statement on Wednesday. Traders said the Fed seemed to be rowing back from rate rises. The effect was to propel oil to $138 a barrel, confirming its role as a sort of “anti-dollar” and as a market reproach to Washington’s easy-money policies.

The Fed’s stimulus is being transmitted to the 45-odd countries linked to the dollar around world. The result is surging commodity prices. Global inflation has jumped from 3.2 to 5pc over the last year. Mr Bond said the emerging world is now on the cusp of a serious crisis. “Inflation is out of control in Asia. Vietnam has already blown up. The policy response is to shoot the messenger, like the developed central banks in the late 1960s and 1970s,” he said.

“They will have to slam on the brakes. There is going to be a deep global recession over the next three years as policy-makers try to get inflation back in the box.”

Fortis Bank Predicts US Financial Market Meltdown Within Weeks

August 22, 2008June 28, 2008 by Infinite

BRUSSELS / AMSTERDAM (DFT) – Fortis expects within the next few days to weeks to complete the collapse of the U.S. financial markets.

That explains the bank insurers interventions of the series Thursday at dealing with € 8 billion.

“We are ready at the last minute. It goes in the United States much worse than thought, “said Fortis chairman Maurice Lippens, who maintains that CEO Votron to live. Fortis expects bankruptcies of 6000 U.S. banks that now lack coverage. “But Citigroup, General Motors, there begins a complete meltdown in the U.S..”

Fortis took yesterday € 1.5 billion with a share issue. At the end of last year was the Belgian-Dutch group € 13 billion of new shares for the takeover of ABN Amro, for which it paid € 24 billion. Lippens bases its concern on interviews with bankers. “Two months ago we knew not so bad that it is in America. And it will be much worse. We have a thick mattress needed for the next eighteen months to come when we can bring to ABN Amro. ”

Two weeks ago reported the U.S. investment bank and adviser to Fortis Merrill Lynch certainly € 6.2 billion in additional capital was needed. The VEB yesterday demanded clarification of Fortis: CEO Jean-Paul Votron stopped in late april Fortis maintains that after the purchase of ABN Amro does not need on the capital market. In one year € 30 billion in market capitalization destroyed. After Votron last confession kelderde the share price by 19.4%, although yesterday climbed by 4.4% to € 10.65.

The massive unrest around the bank insurers, especially with our neighbours in Belgium as a bomb broken. While the fuss arose in the Netherlands to the limited financial world, it is with our neighbours the call of the day. Not only is the bank dominates the streetscape, but by the mokerslag for the Belgian volksaandeel are also hundreds of thousands of small investors hit hard.

All Belgian newspapers opened yesterday with real rampenkoppen, where the free fall of the bank insurers was wide coverage. ‘Fortis crashes, “” Rampdag for Fortis’ and’ Fortis loses 5.3 billion, “opened three leading newspapers.

This Recession, It’s Just Beginning

June 27, 2008 by Infinite

Vincent Quinones works on the floor of the New York Stock Exchange Wednesday after the Federal Reserve issued a mixed assessment of the economy. Yesterday, the Dow Jones industrial average closed down 358 points. (By Andrew Harrer — Bloomberg News)

So much for that second-half rebound.

Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal.

It ain’t gonna happen. Not this summer. Not this fall. Not even next winter.

This thing’s going down, fast and hard. Corporate bankruptcies, bond defaults, bank failures, hedge fund meltdowns and 6 percent unemployment. We’re caught in one of those vicious, downward spirals that, once it gets going, is very hard to pull out of.

Only this will be a different kind of recession — a recession with an overlay of inflation. That combo puts the Federal Reserve in a Catch-22 — whatever it does to solve one problem only makes the other worse. Emerging from a two-day meeting this week, Fed officials signaled that further recession-fighting rate cuts are unlikely and that their next move will be to raise rates to contain inflationary expectations.

Since last June, we’ve seen a fairly consistent pattern to the economic mood swings. Every three months or so, there’s a round of bad news about housing, followed by warnings of more bank write-offs and then a string of disappointing corporate earnings reports. Eventually, things stabilize and there are hints that the worst may be behind us. Stocks regain some of their lost ground, bonds fall and then — bam — the whole cycle starts again.

It was only in November that the Dow had recovered from the panicked summer sell-off and hit a record, just above 14,000. By March, it had fallen below 12,000. By May, it climbed above 13,000. Now it’s heading for a new floor at 11,000. Officially, that’s bear market territory. We’ll be lucky if that’s the floor.

In explaining why that second-half rebound never occurred, the Fed and the Treasury and the Wall Street machers will say that nobody could have foreseen $140 a barrel oil. As excuses go, blaming it on an oil shock is a hardy perennial. That’s what Jimmy Carter and Fed Chairman Arthur Burns did in the late ’70s, and what George H.W. Bush and Alan Greenspan did in the early ’90s. Don’t believe it.

Truth is, there are always price or supply shocks of one sort or another. The real problem is that the underlying fundamentals had gotten badly out of whack, making the economy susceptible to a shock. The only way to make things better is to get those fundamentals back in balance. In this case, that means bringing what we consume in line with what we produce, letting the dollar fall to its natural level, wringing the excess capacity out of industries that overexpanded during the credit bubble and allowing real estate prices to fall in line with incomes.

The last hope for a second-half rebound began to fade earlier this month when Lehman Brothers reported that it wasn’t as immune to the credit-market downturn as it had led everyone to believe. Lehman scrambled to restore confidence by firing two top executives and raising billions in additional capital, but even that wasn’t enough to quiet speculation that it could be the next Bear Stearns.

Since then, there has been a steady drumbeat of worrisome news from nearly every sector of the economy.

American Express and Discover warn that customers are falling further behind on their debts. UPS and Federal Express report a noticeable slowdown in shipments, while fuel costs are soaring. According to the Case-Shiller index, home prices in the top 20 markets fell 15 percent in April from the year before, and Fannie Mae and Freddie Mac report that mortgage delinquency rates doubled over the same period — and that’s for conventional home loans, not subprime. United Airlines accelerates the race to cut costs and capacity by laying off 950 pilots — 15 percent of its total — as a number of airlines retire planes and hint that they may delay delivery or cancel orders of new jets from Boeing and Airbus. Goldman Sachs, which has already had to withdraw its rosy forecast for stocks, now admits it was also too optimistic about junk bond defaults, and analysts warn that Citigroup and Merrill Lynch will also be forced to take additional big write-downs on their mortgage portfolios.

City Pension Funds Lose Billions

June 27, 2008 by Infinite

Taxpayers Could Be On the Hook

New York City officials are bracing for increased pressure on the budget as the city’s pension funds are reeling from the credit crisis and posting billions of dollars in losses. In the nine months leading up to March 31, the city’s five pension funds lost a total of nearly $5 billion, or 4.4%, according to data from the city comptroller’s office. This is a far cry from projections published as recently as last month, when budget planners assumed the pension system would post no losses.

If those losses are not recovered by the end of the fiscal year, which ends Monday, the city will have to pay out several billion dollars through 2015, with the first payment of $190 million set for 2010.

The government will have to make up the shortfall from the poor performance of the pension funds at a time when it is already suffering from tax revenue losses due to a souring economy.

“In itself, it’s manageable,” the research director for the Citizens Budget Commission, Charles Brecher, said of the pension fund losses. “The fact that it’s going to be combined with revenue shortfalls means that we’ve got serious problems.”

The Teachers’ Retirement System of the City of New York, which has lost 5.06% of its value in the nine months ending March 31, has been the worst performer so far this year. The New York City Employees’ Retirement System, which lost 3.98% in the same period, performed the best. Other pension funds include the New York City Police Pension Fund, the New York City Fire Department Pension Fund, and the Board of Education Retirement System of the City of New York. Numbers for the state pension system are not yet available, a spokesman for the state comptroller said.

Credit crunch forcing US middle classes to live in their cars

June 27, 2008 by Infinite

Homeless people living in cars and motorhomes across the US are being joined by a new breed: the middle class.

As mortgage foreclosures continue to rise, growing numbers of middle-class professionals are losing their homes and downsizing from four bedrooms to four wheels.

With numbers rising, New Beginnings, a homeless agency in Santa Barbara, California, has launched a safe parking scheme, whose aim is to provide a refuge of sorts for those who have nowhere to go other than their vehicle.

Guy Trevor lost his job as an interior designer when the sector contracted thanks to the foreclosure crisis. With his furniture sold and his belongings in storage, he now lives in his car, spending the nights in one of the 12 gated car parks in Santa Barbara run by New Beginnings.

“I see myself as a casualty of a perfect storm,” he said. “The people sleeping at the [car parks] are … just like me. They come from normal, everyday homes. I think a lot of people in this country don’t realise that they, too, are a couple of pay cheques away from destitution.”

In normally affluent Santa Barbara there were 150 foreclosures last month, with a total of 800 for the year ending in May, according to the county assessor’s office, which assesses property for tax purposes.

Each month, an auction of foreclosed properties is held on the steps of the Santa Barbara courthouse.

“The way the economy is going, it’s amazing the people who are becoming homeless. It’s hit the middle class,” Nancy Kapp, of New Beginnings, told CNN.

Another of Kapp’s clients, Barbara Harvey, 67, also lost her job and subsequently her home thanks to the foreclosure crisis. As with Trevor, her job as a loans processor was connected to the housing market.

Harvey now lives with her three dogs in her car, parking at night in a women-only car park run by the agency. “I didn’t think this would happen to me,” she said. “It’s just something that I don’t think that people think is going to happen to them.”

The following statement is written by Congressman Paul about the pending financial disaster.

Shares of General Motors are trading at prices last seen in the 1950s.

The European Central Bank is expected to boost a key rate Thursday in order to fight inflation. The move may cause a weaker dollar and force the Fed’s hand.

The June 2008 Dow Crash and the coming first strike attack on Iran herald the end of dollar hegemony.

BREAK-DOW!

Taxpayers Could Be On the Hook

The June 2008 Dow Crash
and the coming first strike attack on Iran
herald the end of dollar hegemony.