Do You Know What Goes Into the CPI Numbers?

The following pie chart and graph are extracted from Doug Short.  The pie chart gives the components and its weights.  That is, food is weighted at 15.3% of the CPI; while housing is weighted at 41%.

The next chart shows the annualized rate of change (solid lines) and the cumulative change (dotted lines) in CPI and Core CPI, or core inflation, since 2000.  Core inflation is the overall inflation rate (CPI) excluding Food and Energy, which doesn't make any sense at all to exclude those two components.  Why?  Well, it would only make sense if you do not eat nor heat your home or put gasoline into your car.  But, then again, what do I know.  However, I am sure that our policy makers at the Bureau of Labor and Statistics and the Federal Reserve System would provide you with a perfectly sane and rational explanation. 

Looking at the bottom part of the above chart, one just might conclude that an annualized CPI rate of 2.5% is not that bad to your wallet.  However, when you look at the cumulative (dotted) lines, it takes on a whole new perspective.  That is, what cost you $100 in 2000 would now cost you $140, or a 40% increase.  Now, tell me has your "real" income and/or wages gone up by at least 40% since 2000?  I didn't thing so!

Student Loan Debacle

Direct Federal Loans to students have exploded higher, from $93 billion in 2007 to $560 billion in early 2013, or a 602% increase.  This dollar amount exceeds the Gross Domestic Product (GDP) of entire nations, such as Sweden ($538 billion) and Iran ($521 billion) just to name tow countries.  Now, if you add in non-Federal student loans of $500 billion, you get a grand total of $1.081 trillion.


The following chart illustrates just another "financial bubble" that is going to burst.  Does anyone remember the "sub-prime mortgage" debacle of 2007/08?  What is the common denominator between the student loan bubble and sub-prime mortgage bubble?  Look no further than the monetary polices of the Federal Reserve System.  Does anyone really care?  I do!  But, then again, my rants wouldn't matter to anyone until they matter to everyone.

How to Make the Dow Jones Industrial Average Stay Permanently Higher

Simply eliminate the losers.  And, that is exactly what Dow Jones will do!  The DJIA will eliminate such recent losers as Alcoa, Hewlett Packard, and Bank of America, and they will be replaced by Goldman, Nike and Visa.  Next, I guess the Dow Jones will be adding such companies as Herbalife, Tesla, Netflix, and, of course, Apple.  By the way, of the 30 Dow stocks in the Dow Jones Industrial Average, only 10 are industrial stocks.  That alone should tell us something about our manufacturing base in America.

$INDU: 14,600 Remains Critical for the Bears and Bulls

Syria: Our Achilles Heel

What is the difference, if any, between the "Free Syrian Army and the Al Nusra Front?"  What is the media not telling us about the Syrian chemical attack?  If you want to know the answers to those questions, you better watch the following video by Ben Swann.

$INDU: Break of 14,600 Has Significant Postive Consequences for the Bear Case

Friday's Update on $SLV

Point & Figure Charts are really good at identifying a stock's stage.  That is, accumulation (Stage 1), advancing (Stage 2), distribution (Stage 3), and selling (Stage 4).  For $SLV, its current stage is "selling, or Stage Four."  That is why the recent rally would simply be categorized as a throw-back to resistance at $24 to relieve an overbought condition within a Stage 4 phase, which is clearly observed with a Point & Figure Chart.

Detroitification

Detroit had everything.  Now, it has nothing. Over the past sixty years, Detroit has gone from one of the most prosperous cities in the world to one of the poorest.  Its average annual per capita income is approximately $13,969, which is less than the average per capita income of Belarus, Botswana, and Romania.

Detroit has over 150,000 abandoned buildings. It has 11,000 unsolved homicides. Police response times average almost an hours.  Forty percent of the city's stoplights don't work.  Almost half of all property owners are refusing to pay property taxes.  In other words, Detroit is America's first third-world city.  However, it is not going to be the only city to collapse.  Other cities in various stages of Detroitification are Chicago, Baltimore, New York, Los Angeles, Oakland, San Diego, Portland, Providence, and Houston.  Welcome to Eschaton!

Investment Instrument That Benefits From a Rising Interest Rate Environment

Vulnerability of the Economy Based on Wal-Mart's (WMT) Performance

Since our economy, as measured by GDP, constitutes approximately 70% of consumer expenditures, the trend of the revenue growth for WMT is definitely not an encouraging sign.

Common Core for Math: New National Curriculum for Public Schools

The emphasis on the "New Math Common Core" is moving more towards the explanation, and the how, and the procedures at arriving to get an answer, rather than on the correct solution.  In other words, as long as a student can explain the process to a math problem, say 3*4,  but arrives at 11, not 12, it would be close enough, because the student was able to explain the process involved.  Welcome to the new "normal."  Please tell me what was wrong with the basic fundamentals of "reading, writing and arithmetic?" 
 

Real Median Household Income

Since the consumer accounts for approximately 70% of GDP, the above chart of household income does not portend well for GDP going forward.  The current real income level for consumers is at the same level as it was in 1995. 

$SLV: Is This the Time to Bet the House?

The Big, Bad Bear

Is the "BEAR" finally coming out of hibernation?

DJIA: Short-term Price Objective Has Been Reached!

On July 26, 2013, my comments on the DJIA were as follows: "DJIA is in the early phase of declining to its 50-day EMA at 15,198, or 360 lower!  Full Stochastics and PPO are in "overbought" and turning down from these levels."  Currently, we have reached that level on the DJIA (15,136).  On a daily basis, the DJIA has just reached oversold levels, based on Full Stochastics and Wm%R.  Further weakness is still possible; but, given these oversold readings, a relief rally should occur over the next several days to relieve the current selling pressure.  However, what happens after any sort of relieve rally needs to be watched carefully.  Why?  Because it's 200-day EMA is currently 14,526, which would be the next major support level.

The Day of Cheap Money is Over!

Over the past month or so, my focus has been on the outlook for interest rates, specifically the rate on the 10-year Treasury Note.  This is the "key rate" that determines the rates on car loans, consumer loans, and mortgages.  During this time, my forecast has called for a major trend change in interest rates.  If you are not convinced that rates are heading higher, you may want to go back and read my following posts: "Interest Rates Going Forward from July 3, 2013," "$TNX: Stage 2 Advancing Phase for 10-Year Treasury Rate Confirmed from July 5, 2013," "Don't Buy Bonds from July 30, 2013," and "Avoid Bonds, Period from August 2, 2013." 

I believe you have now been sufficiently warned.  How you use this information is totally up to you.

$SLV: No Change in My Price Forecast Since June 21, 2013

My post on $SLV from June 21, 2013 stated the following: "The derivative for silver is closing in on my downside price objective of $18, which should provide some near-term support and possible reflect rally back to $21. If $18 is penetrated, the next downside price objective is $14. All of the current price action is taking place in a Stage 4 -- Declining Phase."  Since June 21, $SLV did reach $18 and has retraced back to a close of yesterday at $21.09.  Currently, $SLV has entered into the overbought levels, based on the Full-Stochastics and Wm%R.  If $SLV weakens from the $21 level, $18 remains the key support price.  The proverbial bottom-lines remains that $SLV is in a "Stage 4 Selling Phase."

Gallup: President Obama Falls to a 41% Approval Rating

Watch out President Obama, because you are fast approaching the average approval ratings for a second-term President set by Presidents Bush, Nixon, and Truman.

Second-Term Approval Averages

President	Dates of second term	Ave. Rating
		%
Harry Truman	January 1949-January 1953	36.5
Dwight Eisenhower	January 1957-January 1961	60.5
Lyndon Johnson	January 1965-January 1969	50.3
Richard Nixon	January 1973-August 1974	34.4
Ronald Reagan	January 1985-January 1989	55.3
Bill Clinton	January 1997-January 2001	60.6
George W. Bush	January 2005-January 2009	36.5

Government Motors (GM) Cuts Volt's Price by $5,000 Plus Free Fire Insurance

The first Volt, a 2010 model, cost $41,000.  Today, you can purchase a Volt for $34,995 with free fire hazard insurance for 100,000 miles or 10 years, which ever comes first.  Volt sales in July totaled 1,788.  For the first seven months of the year, Volt sales were 11,643.  I really like that free fire insurance.

Avoid Bonds, Period!

Part-time Employment: The New Normal

Of the 953,000 jobs created so far in 2013, only 23%, or 222,000 were full-time jobs.  That means, of course, part-time jobs created were 731,000.  Welcome to the new, normal economy where it is extremely difficult to get a full-time position.

Source: ZeroHedge

Don't Buy Bonds!

Dow's Short-term Outlook

$SLV: Critical Price Support at $18

The Great Bamboozle Perpetuated by the Financial Accounting Standards Board (FASB) and Wall Street

Yes, you, “Main Street,” have been bamboozled into believing that all is well with the “Too Big to Fail Financial Institutions.”  (Why do you think they are called “Too Big to Fail Institutions”?  There must be a reason.)  And, that reason is due to “Mark-to-Market” accounting, which went away in 2009.  Securities, such as mortgages, with exposure to interest rates are now defined as being “Available For Sale (AFS)” as per FAS 115, which in turn prevents any profits or losses from hitting the income statement even if they did impact retained earnings through the “Accumulated Other Comprehensive Income (AOCI) line.   In other words, as interest rates rise, prices of debt securities like mortgages will decline.  However, with the elimination of “Mark-to-Market” accounting, financial institutions do not have to reflect those losses as such.  Therefore, the financial position of those institutions will appear to be healthier that what they are. 

Case in point is Bank of America’s most recent quarterly financial report.  It reported a profit of $4.012 billion.  Well done, indeed! Not so fast, “Main Street.”  See, this is the great bamboozle.  That profit of $4,012 billion absent of “Mark-to-Market” accounting should have been a loss of $221 million.  (See the following Chart).  Oh, since the fourth quarter of 2011, Bank of America has effectively swept under the rug some $7.6 billion in cumulative losses, which are not losses only thanks to the demise of “Mark-to-Market.” 

Which Is Greater: Full Time Jobs or Americans on Food Assistance and Disability?

The answer is "full-time jobs."  I bet you thought I was going to say that Americans on "Food Assistance and Disability."  I can hear you give a sigh of relieve.  Be careful!  Why?  According to the Bureau of Labor Statistics (BLS), there are 116 million Americans with full-time jobs, which includes 21.9 million government workers.  (Keep-in-mind that government workers are not the productive ones within our society when it comes to increasing ones standard of living.  That is, these workers do not produce goods and services that we Americans buy.  If anything, these workers are to some extent a necessary evil.)  Now, on the other hand, there are 112.5 million individuals on food assistance and disability, or something like 1 out of 3 Americans.  Therefore, there are only 3.5 million more Americans with full-time jobs than there are Americans who are reliant on the government for their daily bread.  And, if you exclude government workers from the productive side of society, then, you have 40.3 million more Americans on government support than those Americans who actually produce something of value.  Let me be very clear on the state of the economy, given these statistics, it is dismal and only going to get worse.

Too Big to Fail Banks Now Extended to the U.S. Economy

"If the economy is so fragile that the government cannot allow failure, then we are indeed close to collapse.  For if you must rescue everything, then ultimately you will be able to rescue nothing." So, stated Seth Klarman.  Who is Mr. Klarman.  He is an American billionaire who founded the Baupost Group, a Boston-based private investment partnership and the author of Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor.

TBT-ProShares UltraShort the Long Treasury Bond (20+Years)

$TNX: Stage 2 Advancing Phase for 10-Year Rates Confirmed!

Quality of Jobs for June 2013

The following chart depicts the "quality vs. quantity" aspect of job creation in America for the month June.  For June, 360,000 part-time jobs were created; 240,000 full-time jobs were lost.  Can anyone say "Obamacare?"

10-year Treasury Note: Point & Figure Perspective

The following "Point & Figure Chart" illustrates the interest rate objective for the 10-year Treasury Note at 4.55%.

Interest Rates Going Forward

The rates on the 10-year Treasury Note correlates inversely with risk assets, such as stocks.  Why is this important?  Well, according to the following chart, the interest rate trend on the key 10-year Treasury Note is now up.  The infamous exponential moving average strategy has signaled a reversal in trend for the 10-year rates on Treasury Notes.  That is, the 15-week EMA has exceeded the 40-week EMA, which simply means that the trend for this key rate has shifted from a declining trend to a positive, rising, trend.  In addition, if 2.65% is penetrated, that will be a clear break of the downward resistance line from 2007 and further confirmation of a rising interest rate trend going forward.

Please, Tell Me This is Not True

Electric cars, despite their supposed green credentials, are among the environmentally dirtiest transportation options, a U.S. researcher, Zehner, suggests.  Writing in the journal IEEE Spectrum, Dr. Zehner says electric cars lead to hidden environmental and health damages and are likely more harmful than gasoline cars and other transportation options.  He further states, "Upon closer consideration, moving from petroleum-fueled vehicles to electric cars starts to appear tantamount to shifting from one brand of cigarettes to another."  Dr. Zehner is a visiting scholar at the University of California, Berkeley, which is definitely not a bastion of conservatives.

$SLV: Stage Four

Government Motors (GM) to Invest $691 Million in Mexico

GM announced on Wednesday that it will spend $691 million to build and expand its factories in Mexico.  Mexico President Ernest Hernandez said the move will boost Mexican employment and development.  (That is great for Mexico; however, I thought the United States bailed out GM, not Mexico.  And, by last count, the United States needs to boost its own employment.  In addition, American taxpayers have lost nearly $10 billion on the GM taxpayer-funded bailout.)

You Think Now is a Good Time to Buy That House Because Rates Are So Low -- Well, You Better Think Again!

Realtors love to claim that today's low interest rate environment is the best time to purchase your dream home. Well, I contend that propaganda from realtors will lead directly to your next nightmare.  So here is the economic reality from Wells Fargo, in which the national average 30-year Fixed Mortgage has gone from 3.40% on May 1, 2013 to 4.875%, as of today.  The matching affordability collapse (See the following graph.) has gone from $450,000 to $375,000, or a 16% equilibrium price drop in under two months! 

 

What this graph definitely illustrates, absent an increase in disposable income, is the average home affordability plunges as rates go up; and, of course, the value of your home declines!

Questions That American Taxpayers Would Like to Know the Answers

Why did the U.S. Government spend $2.6 million to train Chinese prostitutes to drink responsibly?  Why did the U.S. Government spend $175,587 "to determine if cocaine makes Japanese quail engage in sexually risky behavior?"  Why did the U.S. Government spend nearly a million dollars on a new soccer field for detainees being held at Guantanamo Bay?  Why is the U.S. Government going to be leaving $7 billion worth of military equipment behind in Afghanistan?  Why did the National Science Foundation give $384,949 to Yale University to do a study on “Sexual Conflict, Social Behavior and the Evolution of Waterfowl Genitalia?"  And, the questions go on and on.  As a matter of fact, there are 66 absurd spending programs put forth and, of course, funded by you Mr. and Mrs. U.S. Taxpayer.  For a detailed list of these programs, click-on "The Waste List: 66 Crazy Ways That The U.S. Government Is Wasting Your Hard-Earned Money." 

$SLV: Now What?

The Mandate of the Federal Reserve System

"The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."  Now, stable is defined as not subject to sudden or extreme change or fluctuation.  With that definition in mind, let's see how the Federal Reserve System has performed since 1913 in regard to its goal of stable prices. 

A dollar in 1913 would be worth only four cents today, or it has lost 96% of its value.  (So much for stable prices!)  In other words, its performance on stable prices has been a complete disaster.  Why the comparison with 1913?  That is the year of the birth of the Federal Reserve System.  Therefore, my recommendation would be to eliminate the Federal Reserve System, which is based on a fiat currency, and replace it with a sound currency system, such as gold. See, the Federal Reserve System can inflate, create, as many dollars as they want without anything backing those dollars.  By the way, that is what we mean by monetary inflation, which must be distinguished from price inflation.  Price inflation is the rise in the prices we pay for goods and services. Price inflation is caused by monetary inflation, which is solely controlled by the Federal Reserve System.  That is why monetary inflation is so insidious, because it may take years before it shows up as price inflation.

Don't expect Congress to make the Federal Reserve System accountable for its utter failure to defend the stability of the dollar.  Why?  Because Congress is as complicit and culpable as the Federal Reserves System.  If it wasn't for the Federal Reserve System providing the trillions of dollars to finance the federal deficits year after year, Congress would not be able to deficit spend.  And, therein lies why Congress is complicit and culpable to the actions of the debasement of the dollar by the Federal Reserve System.

You've Lost That Loving Feeling

Back on September 13, 2012, my post, which was entitled, "And the Winner of the 2012 Presidential Election Is?" made the following statement: (Pay close attention to the last sentence.)

"Underlying social mood as manifested in the stock market remains positive going into the November election.  Therefore, the probability of President Obama being re-elected is high!  So, how can one use the above information against the backdrop that the next four years will usher in the largest economic/financial disaster known to man with the DJIA selling for 1,000?  (Yes, the coming economic downturn will be greater than the Great Depression of the 1930s.)  Given the scenario, I don’t consider who ever occupies the White House will win any popular contests.  Remember that over the next four years the expected social mood of this country will change from positive to very “bleak.”  Therefore, the man that occupies the Presidency will undoubtedly be highly despised."

Here we are eight months into President Obama's second term, and his popularity has drastically shifted against him.  CNN reports that for the first time in his presidency, half of the public doesn't think that Barack Obama is honest and trustworthy.  So far into his second term, we have had one scandal after another -- "Associated Press, IRS, Unwarranted Electronic Surveillance of U.S. Citizens, and Benghazi." And, this is after only eight months.  So, the trend change in social mood for President Obama and Wall Street is only going to get much worse.  In regard to Wall Street, the manipulation of financial assets (stocks and bonds) by the Federal Reserve System will end in disaster over the next three years, specially the date to watch is September 13, 2015.  (See my post of November 19, 2012 by clicking here for the reason why September 13, 2015 is significant.)

Forget Gold and Silver, Buy Ammo!

Since May 2012, 22 ammunition is up over 400%. It was approximately $21 to $23 per 500 rounds (full brick) in May 2012, and it is now $100 to $135 for 500 rounds, if you can find it. Over the same time period, gold and silver are down approximately 15% and 27%, respectively.  So what we have in place is a de-facto gun control in the United States.  That is, one can buy all the guns one wants; however, buying the ammo for those guns is another matter! Therefore, if one does not have the ammo for one's gun, what good is it?  

Too Good to be True, But This is True!

The Federal Reserve System and Wall Street, i.e, "Too Big to Fail Financial Institutions," have devised another real estate scam in which you, the American tax payer will be left holding the proverbial bag of toxic paper.  Their scam goes as follows: First, these financial institutions (Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley) buy a house, say for $100,000. Then sell the house to someone who has absolutely no money and only a marginal credit history, taking a loan of $120,000 in return.  In real estate terms, this is called a 120% LTV (loan-to-value).  Second, the Federal Reserve enters the picture to monetize the loan from the above mentioned financial institutions.  The Fed buys $45 billion of such mortgages at face value (LTV) every month.  These financial institutions just sell these mortgages in the example to the Fed for $120,000 and pocket a $20,000 profit, all with no risk.  The victim is the family who is paying interest on a 120% LTV loan on a house that may never be his unless the value appreciates by at least 20%. 

$SLV (Derivative for Silver) Update

Nothing has really changed on my outlook for $SLV.  My downside target is still in the $18 to $20 range.  From my "Stage Analysis Approach," $SLV continues at Stage Four, which is the selling phase, or that phase were supply is greater than demand. 

Institute for the Works of Religion or The Vatican Bank

"God’s new banker brings Teutonic thoroughness to Vatican."  That is a headline in today's (May 31, 2013) Financial Times.  That title sparked by interest.  Why?  Ask a Natsari!

Is Bernanke Out as Chairperson of the Federal Reserve System?

Bernanke's term as a "Board Member" does not end until January 31, 2020.  However, as the chair of the Fed, that ends on January 31, 2014.  Now, the question to ponder is as follows:  Will Obama reappoint Bernanke again?  My response to that question is "no!"  Why?  Under Bernanke, the Fed has injected more than $3 trillion into the financial system since March of 2009.   What has been the results of all this liquidity?  No sustainable economic improvement.  That in itself should be reason enough to not appoint Bernanke.  However, since Obama does ascribe to Bernanke's monetary policies, why the change?  Obama has to blame the failed monetary policies on someone, and that someone is Bernanke. Will such a move to appoint a new Fed Chair make a difference?  Absolutely not, in my humble opinion. 

Who does the smart money say will be appointed as the new "Chair," if Bernanke is not reappointed?  That individual would be Janet L. Yellen, who is the current Vice Chair of the Board of Governors of the Federal Reserve System.  Dr. Yellen earned her Ph.D. in Economics from Yale University in 1971.  (In other words, she would be another elitist just like Bernanke with the same failed monetary approach to the economy.  To make matters worst, she is a member of the Council on Foreign Relations.)  Therefore, nothing will change for the better, just a name change at the top.

The Real Truth of the Operational Federal Deficit for 2013

Yesterday's economic comments centered on the approximate ($488) billion in operational deficits from October 1st to April 30th of this year, which is a complete falsehood.  The so-called economic/financial pundits were declaring that this was a major accomplishment for the Obama Administration.  Why?  Because Obama stated during his 2007 campaign that he would reduce the size of the federal deficit by half during his first administration. 

Let's look at the real truth of the size of the federal deficit for the past seven months from the following table:

The above table is taken directly from "Treasury Direct," which was reproduced from the Market Ticker.  The first column is the public debt, the next is Social Security and Medicare, and the third is the total federal debt.  What does it illustrate?  Since September 28, 2012,  there has been a net $762.6 billion of new debt added to the Federal balance sheet, not $488 billion!  And, if one extrapolates the remaining five months for the current fiscal year,  the federal deficit is $1.307 trillion.

Remember the "real truth" always comes out.  

Pet Food Stamps

 Well, what do we have here?  And, no, I am not making this up.  We now have a "Pet Food Stamp" program for low-income families. Wow!  To keep Americans from having to choose between feeding their pets or themselves, dog and cat owners who are currently receiving public assistance can apply for help.  Applicants will need to provide a photocopy of their state identification and the address on the ID must match the address on the public assistance award letter.  Once all that is verified, you then get enrolled to get six months of free home delivery of pet food from petflow.com.   And after six months time if you still need the service, you are able to reapply without a wait for another six months

Taking the Lemmings' Wealth

I am going to be more than happy to acquire the wealth of all those financial lemmings, who have not learned a thing from 2008.  Therefore, I have taken on the following positions: "SPY 70 December 2015 Puts."

The Significance of the Decrease in the "Average Work Week" for April 2013

The Bureau of Labor Statistics (BLS) reported that "Total nonfarm payroll employment rose by 165,000 in April, and the unemployment rate was little changed at 7.5%."  The BLS also reported the following information on the number of hours worked: "The average workweek for all employees on private no-farm payrolls decreased by 0.2 hour in April to 34.4 hours."  Now, why is the decrease in the number of hours significant?  Thanks to Karl Denninger over at the Market Ticker, he explains the decrease in hours worked this way: " If we look at the "employed" figure of 143,724,000 people, a drop of 0.2 hours is a full-time-equivalent decrease of 1/2% (.2/40 hour work week = .005).  Applied to the employed population, this amounts to an imputed economic decrease of 718,620 jobs (143,724,000 x .005)!" He further mentions that this is a huge problem going forward, because the trend of cutting hours back to get under Obamacare limits (30 hours) is picking up steam and will continue for the rest of 2013 and into 2014.

Nonsexist Alternative Language or Effemination of our Society

This whole "nonsexist alternative language" has me thinking about the "effemination" of our society.  (You may want to research the effects of effemination of males in regard to their traditional roles within society.)

Therefore, in keeping with current nonsexist terms, please refrain from using the following words and substitute the words following the "colon:"

1. Master Bedroom: Please use "Owner's Suite."
2. Freshman: Please use "First-year Student."
3. Chairman of the Board: Please use "Chair of the Board."
4. Mankind: Please use "Humanity."
5. Policeman: Please use "Police Officer."
6. Fireman: Please use "Fire Fighter."
7. Congressman: Please use "Member of Congress."
8. Cleaning Lady: Please use "Cleaner."
9. Fisherman: Please use "Fisherfolk."
10. Man-size Task: Please use "Demanding Task."
11. Master Key: Please use "Master Copy."
12. Railwayman: Please use "Railway Worker. 

Men, I would appreciate your total cooperation in the utilization of the above "nonsexist alternative language" in your daily conversations.  Only you can speed-up the "effemination process" of our gender.

Sallie Mae

As WSJ reports, Sallie Mae (SLM), the nation's largest non-government student lender just cancelled a $225 million debt offering as investors decided they simply were not getting paid enough for risk - amid rising student loan defaults.  This sounds a whole lot like 2007 when the leaks to the sub-prime mortgage bubble were first notices.  And, of course, that did not end well.  Oh, by the way, he total student loans outstanding are in excess of $1 trillion.  Simply look at the following chart, and one might conclude that this is 2007 all over again.  But, this time is going to be worse. 

Record Number of Households on Food Stamps

The latest available data from the United States Department of Agriculture (USDA) shows that a record number 23 million households in the United States are now on food stamps.  That equates to 1 out of every five (20%) households are on food stamps (EBT Cards).

Elliott Wave Theorist: Lows of Generational Proportions?

Please keep-in-mind that I am simply the messenger of the following forecasts put-forth by Robert Prechter of “The Elliott Wave Theorist." 

The latest edition of  “The Elliott Wave Theorist,” dated April 23, 2013, puts forth the following projections for Gold, Silver, and the Dow Jones Industrial Average between now and 2016:

1. Silver will eventually take out its 1993 low of $3.51/ounce.
2. Gold will fall below $200/ounce.  
3. Equity markets should top out no later than Friday, May 3, for a 90% decline.  From today’s close of 14,719.46 on the DJIA, which would put the average at 1,472. 

What kind of economic scenario would bring about such low price levels for financial assets between now and 2016?  Answer: Deflation/Depression
 

$SLV: How Low Can It Go?

Happy Tax Day!

 In regard to taxes, how many miles constitute the U.S. Tax Code?  Answer: ≈13 miles!  The U.S. Tax Code is 73,954 pages long.  A standard sheet of paper is 8.5 inches in width by 11 inches in length.  If we multiply the length of the paper (11 inches) by 73,954 pages, we get 813,494 inches, which equals 67,791 feet.  A mile is 5,280 feet long.  Divide the 67,791 feet by one mile and you get 12.84 miles of tax code!

Spring Cleaning

I decided to take a couple of days off from posting on my blog in order to do some office cleaning. From the looks of it, I may need more than a couple of days :-(

How Many Working Age Americans do not Have a Job?

The answer is 101,709,000!  Yes, over 101 million working age Americans do not have a job. But, everything is just great in the "World of Oz"  At least, that is what we are being told.  As of July 2012, the population of the United States stood at 313,914,040.  Therefore, in relation to the population, 32.4% of working age Americans do not have employment.  But wait, you say the unemployment rate that was just announced last week was only 7.6%.  In other words, we have a major disconnect?  The Obama Administration is getting unemployment to go down by pretending that millions upon millions of unemployed Americans simply do not want jobs anymore.  We saw this once again in March 2012.  According to the U.S. Bureau of Labor Statistics (BLS), more than 600,000 Americans dropped out of the labor market during that month alone.

I guess is just doesn't pay to work anymore. Various studies support that conclusion.  One study reported that a family of four, collecting all the benefits for which they were entitled, would have to earn $65,000 per year to have the same after-tax purchasing power.   According to Gary Alexander, the Secretary of Public Welfare for the state of Pennsylvania, a "single mom is better off earning gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045." If you work, you must be a sucker.

Now, back to the construction of the 101 million working age Americans that do not have jobs.  According to the U.S. Bureau of Labor Statistics (BLS), there are 11,742,000 working age Americans that are officially unemployed.  Plus, the U.S. Bureau of Labor Statistics says that there are 89,967,000 working age Americans that are not in the labor force.  Therefore, the sum of the two equates to 101,709,000 or 32.4% of the population of the United States of American do not have employment. 

Check out the details of the above content at Zero Hedge.

$SLV, Now What?

Let the Truth be Told!

David Blanchflower, a former Bank of England policy maker who now teaches at Dartmouth, said the following: “The reason that stocks have erased all their losses is entirely because of QE (fallacy of so-called free money).  To argue that that’s independent of the actions of the Fed shows no understanding of what the Fed is doing and what they did.”  So, there you have it.  Through the Fed's policy of so-called "free money," not real economic growth or real job growth, you have the explanation on why the market is completely disconnected from economic reality.  As I stated many time previously, the main benefactor has been Wall Street, not Main Street.