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.