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.

What do Farmland Real Estate and Student Loans Have in Common?

Both "farmers and students" are taking on mounting debt that is totally unsustainable going forward, which has "bubble" written all over both of them.  Student loan debt today exceeds $1 trillion. Yes, that is trillion.  As of December 31, 2012, the delinquency rate on student loans has surpassed that of credit card debt.  Why?  According to a TransUnion study’s analysis of government data, more than half of the college graduates under the age of 25 are unemployed or underemployed.  

Now, in regard to farm real estate, farmland prices in the heart of the "Corn Belt" have increased at a double-digit rate in six of the last seven years, according to a study by the Federal Reserve.  "The study states that farmland prices were up 15% last year in the most productive part of the corn belt, and 26% percent in the western corn belt and high plains."  (In other words, the Fed's QEs have not only manipulated equity prices but farmland prices.)  With the rise in farmland prices has come a disturbing trend in the balance sheets of farmers.  According to the Kansas Farm Management Association (see the above link), the number of farmers with debt to equity ratios (financial leverage or risk factor) today of at least 40% is higher than it was in 1979, shortly before the farmland crash of the 1980s.  Further, those farms with a debt to asset ratio of over 70% are "three times as numerous today.

Therefore, we have the real potential of "TWO BUBBLES for the PRICE of ONE."  And, we thought the sub-prime mortgage bubble was bad.  However, we haven't seen anything yet with these two bubbles getting ready to burst!

Lies, Lies, and More Lies

The following memo from the Central Bank of Cyprus sent on February 11, 2013 to ensure everyone that "restricting the property rights of depositors" is unconstitutional."  In other words, the entire memo was one "big lie."  Worse yet, according to a "confidential memo," a “haircut” of 50% on its sovereign bonds is the next step, which will destroy the financial sector of Cyprus.

 

Deja Vu Again?

I know those infamous words on everyone's tongue, which are, "But, it is different this time." Maybe, but I doubt it!  Just take a look at the following chart, and you may just agree that it may not be so different this time.

$SLV Update

The critical price support for $SLV remains at $26. As indicated in the following chart, the odds do favor an eventual break of that price support.  The main factor for a break of $26 is due to its current Stage 4, Selling Phase.

Savers Beware!

The Cyprus Banking Woes Should Not Have Been a Surprise to Anyone!

Three weeks ago the Cyrus banking system passed the so-called European stress test for financial institutions.  That means that the ECB and IMF did not have Cyprus or its banks on any watch list.  Therefore, one would conclude that what has happened in Cyprus is not a "one off" situation but systemic throughout the entire European banking community.  Just as the following chart implies, the Cyprus banking implosion should not have come as a surprise to anyone!  Who is next in European?

Obama’s Limo Breaks Down

 

Israeli workers had to scramble Wednesday, March 20, to find transportation for President Obama after his limousine that was to have taken him around the country broke down.  I know it is the fault of "sequestration."  The Administration just could not afford the cost of changing the oil.  By the way, is that limo in the picture a GM vehicle.  Yes, indeed!  Well, I guess it is just poetic justice for all those GM bondholders who lost everything so that the UAW could remain whole. 

Obamacare: Projected Premium Increases by State

"I (President Obama) will sign a universal health care bill into law by the end of my first term as president that will cover every American and cut the cost of a typical family's premium by up to $2,500 a year."  So much for that political promise.

The House Energy and Commerce Committee has put together the following table that projects premium increases by state:

Yes, I know ObamaCare advocates are saying that generous subsidies will be forthcoming to offset those ominous premium increases.  But wait!  Someone has to pay for those increase premium costs.  Right?  To that end, Obamacare’s exchange subsidies are estimated by the Congressional Budget Office to cost over $1.2 trillion over 10 years.  Pray tell, how are we, as a Nation, going to pay for this trillion dollar plus subsidy?  Oh, I know!  It will be accomplished through deficit spending that will be monetized by the Federal Reserve System, which will further debase your purchasing power of your dollar.  So, your health insurance premiums will definitely go up along with the debasement of your dollars.  My advise.  Get a large jar of K-Y Jelly, or better yet, buy two; because the reamer is within sight.

Do You Really Know the Legal Ramifications of Your Bank Deposits?

Between 1929 and 1933, 9,000 banks in the United States closed their doors.  President Roosevelt shut down all banks for a short time after his inauguration.  In December 2001, the government of Argentina froze virtually all bank deposits, barring customers from withdrawing the money they thought they had.  Over the weekend, Cyprus decided to confiscate up to 10% of bank depositors' funds on orders from the ECB and IMF.  As of today, Tuesday, March 19, Cyprus banks and stock exchanges are still closed while waiting on a vote by its Parliament.  Sometimes such restrictions happen naturally, when banks fail; sometimes they are imposed as Cyprus found out over the weekend.  Sometimes the restrictions are temporary; sometimes they remain for a long time.

Why do banks fail?  For nearly 200 years, the courts have sanctioned an interpretation of the term “deposits” to mean not funds that you deliver for safekeeping but a loan to your bank.  Let’s repeat that in another way.  Your bank balance, then, is an IOU from the bank to you, even though there is no loan contract and no required interest payment. Thus, legally speaking, you have a claim on your money deposited in a bank, but practically speaking, you have a claim only on the loans that the bank makes with your money.  If a large portion of those loans is tied up or becomes worthless, your money claim is compromised.  A bank failure simply means that the bank has reneged on its promise to pay you back.  The bottom line is that your money is only as safe as the bank’s loans.  In boom times, banks become imprudent and lend to almost anyone.  In busts, they can’t get much of that money back due to widespread defaults.  If the bank’s portfolio collapses in value, say, like those of the Savings & Loan institutions in the U.S. in the late 1980s and early 1990s, the bank is broke, and its depositors’ savings are gone, or as Cypriots are finding out those savings can be simply confiscated by the government. 

Why Wealth Confiscation Will Occur in the United States

Well, it seems that Cyprus has decided to extend its so-called bank holiday until Thursday of this week.  (Banks in Cyprus were suppose to open on Tuesday.)  Who is next in line to confiscate wealth of its citizens? Italy? Spain? United States?

Ok, why will the United States have to confiscate a portion of your wealth?  The answer lies in the simple fact that within two years the government of the United States will only have sufficient tax revenues to fund "Medicare, Medicaid, Social Security, and Interest on its National Debt," which by the way corresponds to the end of the Shemitah on September 13, 2015.  For example, last year Medicare took in slightly more than $200 billion; however, between Medicare and Medicaid, our government spent slightly more than $1 trillion.  Now, keep-in-mind, our government only took in approximately $2.3 trillion.  That leaves $1.3 trillion for everything else, which, of course, was not enough because our deficit was over $1 trillion.  That deficit of $1 trillion was for all practical purposes monetized (Created money out of thin air to buy the debt, which in itself is illegal. But then again, our government doesn't seem to be too concerned about the rule of law.  Remember GM bondholders.) by the Federal Reserve System.  If the Federal Reserve System stops its policy of monetizing the debt, or is forced to by the market, the only option for the government will be a Cyprian type measure of wealth confiscation.  If the Fed continues to monetized the debt, your wealth (currency) will be completely debased (destroyed) through hyper-inflation, which will be the same as a direct confiscation of your bank and retirement accounts.  Therefore, you just might want to consider a greater allocation of your wealth into precious metals.  

Wealth Tax (Confiscation) a Cometh; No, It is Here!

Cypriots will have money taken directly out of their bank accounts come Tuesday.  Monday is a bank holiday in Cyprus; but by the time banks open on Tuesday, all depositors will have money confiscated, or stolen by their government, taken directly out of their account and into the government accounts.  Accounts with less than €100,000 will face a levy of 6.75 percent.  Those with more, will be taxed at 9.9 percent.  This deposit confiscation is expected to raise nearly €6 billion.  Also, the government blocked all electronic transfers over the weekend.  In addition to the wealth tax on depositors, Cyprus will raise its corporation tax from 10 percent to 12.5 percent. 

Oh, but you say that you, as an American, live in a land of "rules and laws."  Yes, say that to the GM bondholders who that thought, according to "contract law," had a first lien against GM assets.  How will did that work out for those GM bondholders?  Of course, our government completely ignored contract law and GM bondholders lost everything.  So, do you still believe that our government would never confiscate a portion your checking accounts, saving accounts, CDs, retirement accounts, and pension funds for its own self-preservation?  Finally, remember that $100 in your hand will be worth approximately 7% to 10% more come Tuesday than the $100 in that Cyprus bank account.  By the way, where is your $100? 

Florida Lawmakers Look to Ban "EBT" Use at Strip Clubs, Casinos, Liquor Stores, and Gun Shops

Florida lawmakers "are considering legislation" that would ban those receiving government assistance from using their Electronic Benefits (EBT)" cards at strip clubs, casinos, liquor stores, and gun stores.  Wait one minute. Florida lawmakers are just considering doing it. Make it a top priority of your state legislation and "Just Do It."  Come-on Floridians put pressure on your state legislators and get this bill on the docket. Ever single state of the Union should have similar legislation either already passed or pending. 

This IMF Chart is Just Completely Laughable

The IMF is forecasting that Greece (Yes, Greece!) will show the fastest rate of growth in relaltion to its European counterparts for 2016.  Poor Germany,which is the strongest of the EU, comes in dead last. Well, I guess hope really is eternal.



Why is Healthcare in This Country so HIgh?

Look no further than what the "Healthcare Lobby" spends in Washington? Nearly five times what the "Oil & Gas Lobby" spends, or for that matter any other lobby.

Foodstamp Recipients Hit Record: 20% of Eligible Americans on EBT

From "Zero Hedge:" Another record market close for the DJIA, record US debt ($16,701,846,937,879.74), and record number of Americans on food-stamps.  According to the USDA, an all time high of 47,791,966 Americans at year end 2012 were in possession of the highly desire EBT cards.  As a matter of fact, 20% of eligible Americans are on Food-Stamps and growing monthly. 

The New U.S. Petroleum Pipelines

Who needs the "Keystone Pipeline" when you have railroads and crony capitalism? Warren Buffett, who has given plenty of tax advise to this Administration, has been aggressively attempting to corner the railroad market to haul the oil!  The following chart tells it all!

BLS Reports That Payrolls Surge by 236,000 in February

Big surge in "seasonally adjusted" employment numbers on expectations of 150,000. The optimal phrase in the former sentence being seasonally adjusted employment numbers.  You know those so-called statistical jobs that will be revised downward within the next two months.  Oh, that infamous "birth-death phantom jobs" statistic added 102,000 to the unadjusted job number.  So, if we subtract the statistical, phantom jobs of 102,000 from 236,000, you arrive at 134,000 jobs, which is really less than the expectations of 150,000.  (That is the main reason why I like to use in my analysis "year over year" data that eliminates any need for seasonal adjustments.)  In other words, we, as a nation, still need approximately 200,000 new jobs each month just to absorb those new entrants into the job market every month.  And, one more statistic from the BLS is that the unemployment rate went from 7.9% to 7.7%.  For some reason I just don't buy into what the BLS reports.  However, you can read the full report and judge for yourself by clicking on BLS.

$SLV Bounce

I would expect a $2 increase in $SLV, based on some very oversold levels on the daily bar charts. (See details within the following Daily Bar Chart.) Long-term $SLV remains in Stage 4, Selling Phase based on Point & Figure Charts. And, of course, $26 remains the so-called critical mass support level for the metal.

Bear's Last Hope

One of my favorite technical tools is the Exponential Moving Strategy (EMA) that incorporates the 15-week EMA and 40-week EMA.  The strategy simply states that if the 15-week EMA is above the 40-week EMA, the primary trend is up and "Bullish."  If the 15-week EMA is below the 40-week EMA, the primary trend is down and "Bearish."  Just as valid as the EMA strategy has been since 1994 is the potential set-up of a "Triple Top" at 1560 to 1580, based on the 15/40 week EMAs.  A "Double Top" occurred in  2000 and 2008 with subsequent price declines from 2008 (January) to 2009 (March).  A "Triple Top" from the current levels would portend to even greater price declines than that occurred from 2008.

Employment Rate of the U.S. Population -- No Change Since 2009!

Bear Market for Gold Mining Stocks ($GDX)

Sequestration Madness

Let the cuts begin.  What I have been hearing and reading is that these $85 billion in cuts will bring America to its knees.  Sequestration will cause planes to fall from the sky; lawlessness in the streets (I thought that is what we have now, especially in Chicago.); no meat inspectors; no IRS agents (According to the Administration that will happen only after April 15. Someone has to collect all those tax dollars.); no teachers; no national defense; no health care; no police; and the list goes on-and-on.  Another words, one scare tactic after another.  Just complete madness. Then, we have the absurd coming from Maxine Waters, U.S. Representative for California's 43 Congressional District.  She states that sequestration has the potential for the U.S. to lose 170 million jobs. The problem with that statement, Ms. Waters, is that we only have something like 140 million jobs in American.  But, then again, why bother with facts when one can simply make things up as facts!

Speaking of facts, let's look at these facts.  Our national debt is $16,687,289,180,215.37 (That is in trillions.).  The sequestration amount is $85 billion, or 0.5% of our national debt.  For the 2013 fiscal year, our federal government will spend $3.6 trillion.  Sequestration is $85 billion, or approximately 2.3% of what the government will spend. 

Let me put this whole sequestration in perspective using Apple as an example.  At the end of December 2012, Apple had a total of $137.1 billion in cash, cash equivalents, and marketable securities.  One company has $137.1 billion in cash, and our government is screaming bloody murder in having to find $85 billion in cuts.  Will someone please tell me why our government can not find $85 billion to cut out of the $3.6 trillion in spending?  By the way, government spending will actually go up again this fiscal year, not go down, and tax revenues are at a record level.  I just thought you would like some additional, "real" facts.

Delinquencies On Student Loans Surpass Those On Credit Card Debt

This is not good at all. For those of you that I been following this blog know that I consider "Student Loan Debt" to be the latest asset bubble ($1 trillion) that will surpass in severity the sub-prime mortgage debacle of 2007-08.  It is only a matter of time.

The Delusional Bernanke

Earlier in the week, Senator Bob Corker asked Bernanke to respond to his dismal record on debasing the dollar and his record on price inflation.  Bernanke responded proudly that be believes his "inflation record is the best of any Federal Reserve Chairman in the post-war period." I know "facts" can get in the way of anyone; however, Bernanke is totally delusional about his record on inflation. Simply look at the following chart.

Do You Know Your U.S. Constitution? Do You Know Your Fourth Amendment Rights?

But, It's All Different This Time.

Bernanke's Twin

David Lereah, Chief Economist for the National Associate of Realtors (NAR), has made some pretty amazing (wrong) prognostication since 2005. Unlike Bernanke, he left his post at the NAR in 2007.  However, he did work for an organization whose motto is, "Its Always the Best Time to Buy." Therefore, I guess he was just carrying out the party line.  Just look at what he has said between 2005 and 2007.  Pretty amazing stuff, indeed!

“The continuing shortages of housing inventory are driving the price gains. There is no evidence of bubbles popping.” – David Lereah, NAR – August 2005

“The steady improvement in home sales will support price appreciation despite all the wild projections by academics, Wall Street analysts, and others in the media.” – David Lereah, NAR – January 10, 2007

However, in 2009, he then admitted in an interview with Money Magazine that he was nothing but a shill for the real estate industry.  (I wonder if Bernanke will ever have one of those truth moments when he leaves the Fed.)  More specifically, he states, “I was pressured by NAR executives to issue optimistic forecasts — then was left to shoulder the blame when things went sour. I was there for seven years doing everything they wanted me to. I worked for an association promoting housing, and it was my job to represent their interests. If you look at my actual forecasts, the numbers were right in line with most forecasts. The difference was that I put a positive spin on it. It was easy to do during boom times, harder when times weren’t good. I never thought the whole national real estate market would burst.”  I am always amazed at how humanity operates after they have one of those righteous moments after the fact.  I am sorry Mr. Lereah but you still have no creditability in my book.

And, for the NAR, they replaced Mr. Lereah with Lawrence Yun, who continues in the great footsteps of Mr. Lereah.  Mr. Yun recently assured the public that it was the best time to buy a home during the entire housing slide.  All what I can say is that Mr. Bernanke must be very proud of the work that Mr. Lereah did and the work that Mr. Yun is currently doing. 

For a more insightful reading on this topic, go to "Zero Hedge."

 

Yod-Gimel

To write "13" in Hebrew is simply two Hebrew letters, "yod-gimel."  The number "13" means rebellion and depravity.  Welcome to 2013!

Sequestration

For the current fiscal year, our Federal government is going to spend $3.565 trillion.  Trouble is that the Federal government is only going to take in something like $2.3 trillion.  So, our nation will have another trillion dollar deficit plus for the current fiscal year.  Now, where am I going with this since it  is not nothing new?  The answer is "sequestration."  The debate going on now between the Administration and Congress is how do we cut $85 billion from the current projected spending of $3.565 trillion.  Yes, that is only $85 billion, or 2.3%.  Are you telling us that all this debate is over trying to cut 2.3% from this year's budget?  Yes, that is correct.  However, to be more specific, the Obama Administration, which by the way put forth and approved the "sequestration plan," stated that the $85 billion cut could only be from discretionary spending, not the mandatory spending.  Since discretionary spending amounts to 35% of government spending, the true percentage of cuts amounts to approximately 7%.  But, I have a real problem with our government who can not find $85 billion of cuts when it comes to spending $3.565 trillion.  Just with all the fraud and waste that goes on within Washington, that amount should be easy to find.  So give us all break, Administration and Congress, and do your job. You put us into this mess, now fix it! Trouble is, I really don't believe that they will fix it, which will cause our economy will spiral out of control. 

Bernanke: Total Lack of Creditability

I wonder how he gets to keep his job. Over and over again from 2005 to 2007, he stated that the economy was on sound footings, and the Fed had the all those sub-prime mortgages contained.  That is, no real estate contagion would occur!  Now in 2013, Bernanke declares to an audience with dealers and investors the following: "Concerns that the central bank’s easy monetary policy has spawned economically-risky asset bubbles is over stated." In other words, he simply brushed off any concern that the Fed has once again engineered a likely asset bubble in debt securities and student loans.

For further enlightenment to Bernanke's total lack of any creditability going forward, review the following video:

Cost of Health Care

What is wrong with the following chart?

$GLD: $150 or Bust!

$SLV: $26 or Bust?

What Does Wal-Mart Know That We Don't

For those of you that have been following my posts, you know that my Wal-Mart post of Friday, November 16, 2012 was not a ringing endorsement to go out and buy the stock. As a matter of fact, I was and am still extremely bearish on the stock. Given the above statement by its Vice President of Finance, I just might be right on the future direction of WMT's stock.

Institute for Works of Religion (IOR)

 

The "Institute for Works of Religion, or the IOR" sounds innocuous enough.  Doesn't it?  I would garner that most people have never heard of it, but they have heard of the Vatican Bank. Why am I blogging about the IOR?  Well, I believe, as many do, that the IOR is a very powerful banking entity throughout the world that operates without much transparency; and the Vatican has just named its new president.  He is Ernst von Freyberg, a German attorney.  And, why is Mr. Freyberg significant?  Not that he is so significant, but his country definitely is in regard to the "Eschaton."   There has always been a very close relationship between Germany and the Vatican.  And, I believe that as time progresses that relationship will become even closer.  As I have blogged in the past, Germany is definitely the country to watch very closely going forward not only as a financial power but as a military power.

Germany, Spain Set To Pull The Plug On Green Energy

What do we have here?  Germany and Spain are refusing to subsidize the "Green Industry," just when the U.S. is still trying to make it work.  I guess consumers in Germany and Spain got tired of paying a surcharge of 14% of their electric bills to subsidize the totally unprofitable "Green Monster." Check out the story at "Zero Hedge."

Unemployment Tops 55% for the 15-24 Age Group in Greece and Spain

Six out of ten, 15-24 years of age, in Greece are unemployed.  Spain's 15-24 years of age are not that far behind at 55.6% unemployed.  I am sorry but all this talk coming from Europe and in American that the economies of the world are finally starting to turn around is a bunch of you know what.  Simply look at the chart below and you tell me what the future holds for all these young individuals with all kinds of time on their hands.  Would you say the possibility of riots?

23% of Americans are Illiterate in America

Please include attribution to OnlineCollegeCourses.com with this graphic.

Five Million College Grads in Jobs that Don't Require a High School Diploma

A new study by the "Center for College Affordability and Productivity" finds that 48% of recent college graduates are now in jobs that do not require a bachelor’s degree, and 37% hold jobs that require just a high school diploma.  The median starting salary for students graduating from four-year colleges in 2009 and 2010 was $27,000, down from $30,000 for those who entered the work force in 2006 to 2008, according to the study.  As a matter of fact, college graduates are fortunate to find any job in today’s bleak economy.  In 2006 and 2007, 90% of all college graduates found a job within a year of graduating.  Since 2011, just 56% of college graduates are able to find work.

The choice of major is extremely important in finding that first job, according to the New York Times. "Young graduates who majored in education and teaching or engineering were most likely to find a job requiring a college degree, while those who majored in Latin American studies and humanities majors were least likely to do so."  Among all recent education graduates, 71.1 percent were in jobs that required a college degree; of all area studies majors, Latin American studies and humanities majors, the share was 44.7 percent. 

Socrates

The America Way

 

What is the American way?  Debt and more debt!  Our national debt exceeds $16.5 trillion, which is greater than our GDP.  Our federal deficit for 2013 will probably exceed $1 trillion for the fifth year in a row.  Households carry $12.8 trillion in consumer and mortgage debts.  One-third of Americans has no savings and approximately half are one to two paychecks from being bankrupt.  Food stamp recipients are at a all time high.  Interest rates on all types of savings accounts for all practical purposes are "zero," which penalizes savers, or those individuals that are prudent about their financial affairs.  Since there is no incentive to save at a zero interest rate, individuals are forced to invest in high-risk investments in order to reach for yield.  The problem with that investment strategy is that with high yield comes high risk.  High risk simply means that there is a good chance that one will lose part or the entire principal that one has invested. 

So, who is responsible for this American way of life?  I hate to be redundant, but the answer is yet again the Federal Reserve System.  See, the Fed realizes that this phantom growth over the past decade in GDP has only been due to debt.  Therefore, in order to keep this game afloat, the Fed is trying to persuade the American public through the “wealth effect,” which would be the rising stock market, that its expansionary policies are really working.  If you are outside of Wall Street, say Main Street, I don’t believe that argument carries any weight. The reason being is that you want to see tangible signs of real benefits, like job growth, increase real wealth, not illusory stock market gains.  (Remember what the market gives it can as quickly take it all away.)

No More Saturday Mail Delivery

From the AP, "The U.S. Postal Service will stop delivering mail on Saturdays but continue to deliver packages six days a week under a plan aimed at saving about $2 billion, the financially struggling agency says."

The completely broke U.S. Postal Service, which last fiscal year lost $16 billion, will eventually have to be bailed out by the government.  (Just like Fannie Mae, Freddie Mac, and Wall Street.)  Stopping mail delivery one day a week, with the exception of packages, will simply buy some time, not much, for the 500,000 postal workers.

CBO Forecast: Dire -- But Wait, Prosperity is Just Around the Corner

The Congressional Budget Office's (CBO) just-released economic forecast for 2013 is nothing to write home about, to say the least.  GDP is expected to grow by only 1.4%, which I consider is way too high, the unemployment rate will "stay near" 8%, which I consider will reach at least 8.7%, the federal deficit will reach $845 billion, which I believe will be at least $1.2 trillion, and ObamaCare will cost 7 million their health insurance, which I estimate to be at least 10 million.

The CBO then goes on to say that the economy will improve after this year.  Do you really believe the CBO?  After three years of being told by this government that "prosperity" is just around the corner, I just don't see how anyone can believe what they tell us.

$INDU: Extremely Overbought

The Most Hated Form in the United States

Today, I grief the 100th birthday of the overturning of  Article I, Section 9 of the U.S. Constitution that explicitly prohibited a general income tax.  In its place, Congress ratified 16th amendment, which established the right to impose a Federal income tax on Americans.

A copy of the original "1040 Form" is as follows with its tax rates between 1% and 6%:

After seeing the above "1040 Form" in its total simplicity, don't you yearn for the good old days when you did not need a CPA or a tax attorney to file your income taxes?  I know, I do!

Employment to Population Ratio, or Where are the Jobs?