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True Inflation 10+ %

A

Anonymous

Guest
Stagflation Exploding — Big Rate Cuts Soon
John Browne- MoneyNews

Evidence is mounting fast that we are now entering a period of economic recession and mounting financial inflation at the same time.

Indeed, the latest annualized headline inflation is now running at 2.8 percent or, annualized, at a whopping 9.5 percent and still “politically cooked” to the downside.

Worse still, the producer price index for finished consumer goods (to be passed on either as higher consumer costs or reduced corporate profits) is now rising at some 9.3 percent.

you annualize that figure, just as all the Wall Street “cheerleaders” have recently done for jobs, retail sales and GDP growth, PPI inflation is running at a staggering 47.5 percent!

Talk about exploding. At that rate, gold could potentially go to over $3,000 an ounce!

So, it appears that the stagflation I have warned of all year is now upon us — and growing — big time!


-----------------------------

Our Fed is now frozen in the box while our economy burns.

In military terms, it is like failing to deal with a divided enemy piecemeal. We now face simultaneous attacks on all fronts—not good!

-----------------------------------

Most of us who live in the real world of Main Street, eating food and using gasoline, heating oil and electricity, know that our “true” personal inflation is way, way above the official rate of just 2 percent.

We have termed this officially concealed inflation stealth inflation. I believe our Fed has long been aware of it, but was also aware than our economy has been in contraction for many months.

The Fed was therefore afraid to act for fear of causing an economic downturn.

--------------------------------

Our Fed is now in a corner facing the gigantic problems of inflation and a subprime dollar calling for higher rates and the prospect of deep recession, calling for steeply lower rates.

The Fed’s problem is now so big that it is no longer merely a financial or even an economic problem. It is a growing political problem, because both rampant inflation and deep recession can cause social unrest and trouble on the streets.

Following the 1929 stock market crash, paper money lost credibility and interest rates were kept too high for too long. This morphed the recession into the Great Depression of 1931, which lasted over 10 years.

At least some top politicians and central bankers (like Bernanke) will be painfully aware of this history.

My guess therefore, is that in the gigantic mental and political struggle that lies ahead, the conquest of recession will emerge supreme and central bank rates will be cut big time throughout most of the world.

Let us hope that the central bankers coordinate their efforts and avoid the morale damaging spate of competitive devaluations that occurred between 1929 and 1931, and that our U.S. dollar is saved from collapse, in the interests of world trade and political stability.

To achieve this, our Fed must come out of their corner fighting!
 

Tex

Well-known member
I was watching the financial news this morning and they were talking about inflation and wages. The point was made that wages were rising in some sectors which is a precursor for inflation.

It is amazing that corporate earnings can be worshiped in the financial world but that wage increases are "inflationary" and somehow bad.

It just shows who is running the show.
 

passin thru

Well-known member
I know it is bad................those darn employers lose all that money and then they can hire so many more people...............ain't losing money great.
 
A

Anonymous

Guest
I'm not sure even the World Banks can undue 7 years of Bush economics or more properly- 7 years of Bush noneconomics :roll: :wink:

Reprinted from MoneyNews.com
Rupert Murdoch Sees Recession, 5 Years of Real Estate Woes


Sunday, Dec. 16, 2007 10:10 p.m. EST


Rupert Murdoch, media tycoon and new owner of the Wall Street Journal, predicts that the U.S. faces a recession that will hit the overall economy and could undermine real estate for five or six years.

Appearing on Fox News' "Your World with Neil Cavuto," Murdoch admitted that he’s worried about the economy.

"I think we are in for a recession, probably. How bad it will be, I don't know. But I think there's a lot more bad news to come ...”

Greenspan Sees Early Signs of Stagflation

MoneyNews
Monday, Dec. 17, 2007


WASHINGTON -- The U.S. economy is showing early signs of stagflation as growth threatens to stall while food and energy prices soar, former U.S. Federal Reserve Chairman Alan Greenspan said Sunday.

Reprinted from MoneyNews.com
Central Banks Activate Liquidity Plan

MoneyNews
Monday, Dec. 17, 2007


LONDON -- Investors buffeted by the credit crisis will enjoy no pre-Christmas lull as central banks began putting a pump-priming plan into action on Monday while critical results from major American banks loom later in the week.

The Swiss National Bank offered up to $4 billion in short-term funds at a discount to the official U.S. Federal Reserve rate as part of a concerted effort to ease strains on the interbank lending market.

Bids for a similar European Central Bank operation closed at 0830 GMT. The Fed will follow suit later in the day with the Bank of England joining the fray on Tuesday.

But most experts say the scheme — whereby the Fed , SNB, ECB, Bank of England, Bank of Canada and others set up a new short-term lending facility at favourable rates — is unlikely to solve the crisis alone.
 

Tex

Well-known member
All of those trade deficits created POTENTIAL inflation, not realized. When the dollar starts falling, as it has now, that potential inflation will become real as the goods we buy from overseas are more expensive (it was deflationary when we bought cheaper goods from China) and foreigners start buying our products as a great deal.

The republicans managed for the short term interest. Now it is starting to hit home.

I just hope our country doesn't just get too sold out to the foreign buyers, but it looks like they have already started that process.
 

Texan

Well-known member
Tex said:
I just hope our country doesn't just get too sold out to the foreign buyers, but it looks like they have already started that process.


Dow's Liveris: Kuwait Plastics Deal A Milestone
by Jack Kaskey, Bloomberg News
International Herald Tribune 12/14/2007



Kuwait agreed on Thursday to buy half of Dow Chemical's plastics assets for $9.5 billion in the biggest overseas investment by a Kuwaiti company.

Shares of Dow, the largest U.S. chemical maker, rose the most in five years in New York trading after announcing it would form a joint venture with Petrochemical Industries, which is based in Safat, Kuwait.

The Kuwaiti company will gain a 50 percent stake in businesses that generated 22 percent of Dow's revenue last year, Dow said.

Gulf states, flush with cash from oil revenue, have doubled their overseas investments to a record $74.5 billion this year, including the Dow deal, Bloomberg data show.

Andrew Liveris, the Dow chief executive, said the new venture would have access to low-cost raw materials, and that Dow would use the cash to buy specialty-chemical assets.

Steve Hoedt, an analyst at National City who holds Dow Chemical shares, called it "a decent deal."

The venture will employ 5,000 people and include all Dow's plants that make polyethylene, polypropylene and polycarbonate plastics, as well as intermediate chemicals known as amines, the company said.

Shares of Dow Chemical, based in Midland, Michigan, rose $2.77, or 6.6 percent, to $44.52 in afternoon trading Thursday. A close at that price would be the biggest percentage gain since October 2002. Dow is up 11.7 percent in 2007.

"This is a landmark deal," Liveris said by telephone.

"Apart from the cash, the half we still own will be enormously benefited by Kuwait Petroleum's oil and gas position in future projects - not just the ones in Kuwait, but elsewhere, like in China," he said.

Petrochemical Industries will provide the venture with raw materials through its owner, Kuwait Petroleum, which is building refineries in emerging regions, the companies said. Kuwait Petrochemical refineries may provide half of the raw materials for the venture in 10 to 15 years, Liveris said.

Sales from specialty products like insulation and water- treatment filters will rise to two-thirds of Dow's total from half after the transaction closes late next year, Liveris said. Dow will continue to get half of the earnings from the venture.

Liveris said the deal showed that the market has undervalued Dow, because Kuwait has valued one-quarter of Dow's business at half the market value of the whole company. In January, Liveris promised to transform Dow to reduce wide swings in profit when prices for commodity chemicals like ethylene reached a cyclical trough.

At $9.5 billion, the Dow agreement is the second-biggest acquisition by a Gulf investor after the $11.6 billion purchase by Saudi Basic Industries of General Electric's plastics unit this year.

"We will see more deals like this, and there are a lot of talks going on in Qatar, Oman and elsewhere," Abdullah bin Zaid al- Hagbani, secretary general of the Gulf Petrochemicals and Chemicals Association, said in reference to the Dow joint venture.


http://www.rigzone.com/news/article.asp?a_id=54059
 

MoGal

Well-known member
www.shadowstats.com has been tracking M3 (I think that's what they call it) but some of their stuff is by subscription.

One blog I read a couple weeks ago, the guy was saying, "Diversify from gold, buy canned goods". While one can laugh, at this time, its going to be tuff next summer. Hope everyone gets a garden out.

www.Economyincrisis.org keeps up with the foreigners buying our companies. I sure hope people pay attention to these presidential candidates and pick one who is going to make sure our country has fair trade and quits selling our sovereignty out and doesn't say "we're going to be a service economy" (meaning we won't manufacture anything or have an industrial base but just providing services.............. one thing my father always told me, "stand on your own two feet, don't depend on anybody" and I want our country to be able to do the same thing.
 
A

Anonymous

Guest
I watched this speech on C-SPAN last night- and on the same day GW was saying that the economy was just "hunky-dory"-- the Comptroller General of the United States and head of the GAO (who serves a 15 year nonpolitical term) came out saying just the opposite-- and that the Bush Medicaid prescription law that was passed before they figured the total cost (like GW tried to do with the Kennedy/Bush amnesty bill) would be bankrupting the country without huge tax increases...

He said he had written and was sponsoring a bill that would require the GAO to figure the total cost in years to come- and make them public- before Congress could vote on, or a President could sign any new law....

Like DUH- only common sense---- something that D.C. is short of.... :roll: :( :mad:


The Cost Of Bush: $32 Trillion
17 Dec 2007 02:02 pm

The opinion of another shrill hysteric? Just David M. Walker, the Comptroller General of the United States and head of the GAO:

In a speech today at the National Press Club, he said, "If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up." Walker urged greater transparency and accountability over the federal government's operations, financial condition, and fiscal outlook...

"The federal government's fiscal exposures totaled approximately $53 trillion as of September 30, 2007, up more than $2 trillion from September 30, 2006, and an increase of more than $32 trillion from about $20 trillion as of September 30, 2000," Walker said. "This translates into a current burden of about $175,000 per American or approximately $455,000 per American household."



U.S. Government Financial Reporting Found Weak
Washington, D.C. (Dec. 18, 2007)
By WebCPA staff

| Serious material weaknesses continue to plague the U.S. government's financial systems, recordkeeping and reporting, according to a newly released report.

The Government Accountability Office said that for the eleventh year in a row, it was prevented from expressing an opinion on the U.S. government's consolidated financial statements because of these weaknesses.

However, David M. Walker, comptroller general of the U.S. and head of the GAO, did acknowledge that the government has made some headway. This year, the GAO was able to give an unqualified opinion on the 2007 Statement of Social Insurance, which covers mammoth government programs such as Social Security and Medicare.

Despite that improvement, Walker noted that serious financial management problems remain at the Defense Department, as well as in accounting for and reconciling intragovernmental activity and balances between federal agencies, and in the federal government's process for preparing consolidated financial statements.

"If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up," said Walker.

The federal government's fiscal exposures totaled approximately $53 trillion as of Sept. 30, 2007, up more than $2 trillion from Sept. 30, 2006, and more than $32 trillion from Sept. 30, 2000.

http://www.webcpa.com/article.cfm?articleid=26199
 

backhoeboogie

Well-known member
A deflated economy is something to fear. Inflation is bad for folks on fixed income. Deflation is bad for everyone since it is depresssion.
 

jodywy

Well-known member
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aP6EBENKxOLk
Wheat Rises in Chicago on Supply Concerns; Corn, Soybeans Fall

By Feiwen Rong

Dec. 18 (Bloomberg) -- Wheat futures gained in Chicago on expectations demand is increasing at a time of shrinking global stockpiles. Corn and soybeans declined as recent advances may have been overdone.

U.S. consumer prices rose the most in two years last month, while inflation was 6.9 percent in China and 3.1 percent in Europe. Inflation is accelerating as oil and other energy prices reached records in November, spurring investors to buy commodities as a store of value.

``The global backdrop of inflationary pressure is supportive for agricultural products as we head into 2008,'' Nie Ben, manager at Liaoning Cifco Futures Co., said by phone from Dalian in northeastern China today.

Wheat for March delivery, which reached a record $10.095 a bushel yesterday before settling at $9.66, today rose as much as 1.1 percent to $9.77 in after-hours electronic trading on the Chicago Board of Trade. They traded little changed at $9.6575 as of 12:17 p.m. local time in London. Global wheat inventories may drop 11 percent by May 31 to 110.1 million metric tons, according to the U.S. Department of Agriculture.

The sell-off in Chicago yesterday was partly stoked by a rally in the dollar to a seven-week high against the euro, said Nie.

``A strengthening U.S. dollar hurts all commodities including base metals and agricultural products,'' he said. ``Compared with base metals, the agricultural complex's performance was much more resilient.''

Weather Nerves

The wheat market has become a ``weather market'' after two years of adverse conditions cut global crops and boosted prices, Emmanuel Jayet, an agricultural commodities and biofuels analyst at BNP Paribas SA in Paris, said in an interview today. ``The market is already quite nervous about the weather and it's only December; there is going to be a lot of volatility next year.''

Milling wheat traded in Paris slid 3.75 euros, or 1.4 percent, to 263.50 euros ($379) a ton as of 1:18 p.m. local time.

Corn reached a nine-month high yesterday at $4.4325 a bushel, while soybeans extended a rally to the highest since 1973 on speculation that U.S. demand for fuel made from grain and oilseeds will surge. The Senate passed a bill Dec. 13 that may boost use of alternative fuels such as ethanol and biodiesel.

The most-actively traded ethanol contract in Chicago gained 1 percent yesterday. ``Further appreciation in ethanol is bullish for the corn market,'' Dan Cekander, analyst at Fimat USA, said in a report yesterday.

Corn, Soybeans

Corn for March delivery fell 0.8 percent to $4.3525 a bushel at 12:19 p.m. London time today. Soybeans for March delivery dropped 0.1 percent to $11.745 a bushel at the same time. The 14-day relative strength index for corn and soybeans has been above 70 since Dec. 7, signaling prices may be poised to decline.

In China, agricultural commodities traded in Dalian and Zhengzhou fell after the government said it would eliminate export tax rebates on a range of food commodities as part of measures to secure domestic supplies and control food prices.

Soybeans for September delivery on the Dalian Commodity Exchange, fell by 80 yuan, or 1.8 percent, to close at 4,446 yuan ($602) a ton. The most-active contract has gained 64 percent this year. Corn for May delivery fell by 24 yuan, or 1.4 percent, to 1,731 yuan a ton.

``There's also seasonal pressure because it's harvest time now in China and investors expect to see farmers step up selling to get cash before the New Year,'' Nie of Liaoning Cifco said.

To contact the reporter for this story: Feiwen Rong in Singapore at [email protected]
 
A

Anonymous

Guest
UNBULL-LIEVABULL--------The greed driven immoral, unethical, and quite possibly illegal actions of these lending institutions and investment banks have contributed to nearly bankrupting the US- possibly leading to years of recession/depression and tough times for the common folks--BUT they are giving out $30-40-50 million dollar BONUS's for their CEO's....
:( :( :( :( :mad: :mad: :mad:


Friday, Dec. 21 2007
Wall Street Bonuses Soar 14% Despite Bad Year


NEW YORK -- This might have been one of Wall Street's most dismal years in a decade, but that hasn't stopped bonus checks from rising an average of 14%.

Four of the biggest U.S. investment banks -- Goldman Sachs Group Inc. (GS: 209.60, +6.93, +3.41%), Morgan Stanley (MS: 54.37, +3.00, +5.83%), Lehman Brothers Holdings Inc. (LEH: 64.57, +2.24, +3.59%) and Bear Stearns Cos. (BSC: 89.95, -1.47, -1.60%)-- will pay out about $49.6 billion in compensation this year. Of that, bonuses are traditionally estimated to represent 60%, or almost $30 billion.


But that might not sit well with investors who held on to investment bank stocks this year -- and watched them plunge by up to 45%. Investment houses have been slammed by the credit crisis, and top executives this past week said they've yet to see a bottom.


Further, some of those executives have even agreed to forgo their bonuses this year to reflect the poor performance. Morgan Stanley CEO John Mack and Bear Stearns CEO Jimmy Cayne won't be collecting their payouts.


Mack received no cash bonus a year ago but received stock and options worth an estimated $40.2 million, well above his $800,000 base pay. Cayne received a bonus of $33.6 million in 2006 and base pay of $250,000.


Goldman Sachs CEO Lloyd Blankfein reportedly is in line for a bonus of up to $70 million this year, as the nation's largest investment bank has largely navigated past any mortgage-related losses. Lehman Brothers' CEO Richard Fuld was granted a $35 million stock bonus for 2007, up 4% from last year.


There had been some predictions the increase in bonuses would have been significantly higher. However, layoffs and top managers giving up their bonuses have curtailed that.

http://www.foxbusiness.com/markets/business-leaders/article/wall-street-bonuses-soar-14-despite-bad-year_416894_4.html



Goldman breaks Wall Street bonus record
Chief executive Blankfein receives $53.4 million in cash and stock


updated 7:05 p.m. MT, Wed., Dec. 20, 2006
NEW YORK - John Mack’s record for the biggest bonus ever paid to a Wall Street chief executive didn’t last even a week. It was smashed by the $53.4 million that Goldman Sachs gave its chief executive, Lloyd Blankfein.

The bonanza for Blankfein included a cash bonus of $27.3 million, with the rest paid in stock and options. He took the helm of the investment bank in June after President Bush nominated Henry Paulson to be Treasury secretary.

The record payday, disclosed by Goldman Sachs Group Inc. in a filing with the Securities and Exchange Commission on Tuesday, breaks the one set just last Thursday when Morgan Stanley disclosed that it paid CEO Mack $40 million in stock and options. Mack, who is 62, rejoined Morgan Stanley 18 months ago to turn around the company after the ouster of Philip Purcell. Mack’s short-lived record bested one set in 2005 by Goldman’s Paulson, who was given $38.3 million.

Blankfein’s bonus reflects the street’s — and Goldman’s — very profitable results this year, Worth magazine Editor in Chief Dwight Cass said.

“Blankfein’s traders — his background is trading, not investment banking — were the main drivers behind Goldman’s increase,” Cass said. “But this was an easy year to make money. Markets rallied, volatility was low, LBO (leveraged buyouts) deals kept the debt markets roiling, hedge funds continued to make prime brokerage a big winner.”

Other than Blankfein, 11 other senior Goldman executives as a group were granted slightly more than $150 million in shares and stock options, according to filings submitted by the companies to the Securites and Exchange Commission on Tuesday. The highest paid among those were Gary Cohn and Jon Winkelried, who both hold the titles of president and chief operating officer. They each received $25.6 million in shares and options in 2006.

http://www.msnbc.msn.com/id/16299324/
 

Faster horses

Well-known member
OT, I listen to David Ramsay and he talked about the mortgage "crisis".
I went to his website hoping I could find where he talked about the ARM's, but I couldn't find what I heard him talk about. I was hoping I could find it to bring it over here, as it was very interesting.

Now don't hold me to exact numbers, but I am sure that he said only 17% of all mortages in the US are ARM's. Only 15% of them are problem loans; this makes up only 1.2% of the total mortgages in the US. 1.2% and the news media has jumped on this without telling the true story!!!!!!!!!!!!!!!
He read some headlines like: "cascading forclosures" and "hundreds of thousands of mortgages are defunct". He says the news media really knows how to sensationalize things like this, but they don't know how to tell the full story.(Remember Alar apples and Mad Cow?) :wink:

Of the 15% problem loans, none are in the 6-month column; most are only 1 month behind.

Not that I think the CEO's should be paid these exhorbiant salaries; I certainly don't.

David also talked about the 20% secondary lender on these loans. They make a huge amount of money because their interest is so high (like 21%). They are high-risk loans and the lenders realize this, that is why the high interest rates; delfaulted loans are figured into the equation.

One fellow called up and said that the middle-class in America will now have the burden of these ARM's. David said "absolutely not. What the government proposed was NOT a bail-out and it would cost the American tax payer nothing."

He said what the government and the lending institutions came up with was not a solution, rather a postponement and a PR move to get the news media off the subject. since they weren't reporting it in the right light anyhow.

BTW, he said the Bush Administration went to the lending institutions and asked them to come up with a solution. The freeze was their answer.
Wasn't big government that tried to solve it, but the companies involved.
Isn't that how government is supposed to work?
 
A

Anonymous

Guest
BTW, he said the Bush Administration went to the lending institutions and asked them to come up with a solution. The freeze was their answer.
Wasn't big government that tried to solve it, but the companies involved.
Isn't that how government is supposed to work?

That only came about AFTER Congress (bipartisanly) agreed that things were bad enough that drastic measures were needed-- and were pushing to put on the freeze plus additional changes in the bankruptcy and foreclosure laws... Most (again bipartisanly) believe that after a 5 year "time out" to allow things to work out and see how bad they are-- many law changes may be needed to keep this from happening again.....I watched the hearings on C-SPAN---and all the witness's testifying (again bipartisan) and all the Senators were taking this situation very seriously- and not Pooh-poohing it away as a trivial little free market matter as GW does....Some of the testimony actually said that this could easily lead to a major "WORLD" recession/depression......

Now the other affects of this housing boodoggle are starting to appear--with many Cities, States, and School Districts tax surplus investments, retirement accounts and individual retirement accounts in danger of being found almost worthless....(Even Montana's) :( :( :mad:

Nope--its just the tip of a huge iceberg!!!!

Home Foreclosures Hit Record High

MoneyNews
Thursday, Dec. 6, 2007


WASHINGTON -- Home foreclosures shot up to an all-time high in the third quarter, fresh evidence of the problems afflicting distressed homeowners amid the housing meltdown.

The Mortgage Bankers Association in its quarterly snapshot of the mortgage market released Thursday said that the percentage of all mortgages nationwide that started the foreclosure process jumped to a record high of 0.78 percent during the July-to-September period. That surpassed the previous high of 0.65 percent set in the prior quarter.

More homeowners also fell behind on their monthly payments.

The delinquency rate for all mortgages climbed to 5.59 percent in the third quarter. That was up from 5.12 percent in the second quarter and was the highest since 1986, the association said. Payments are considered delinquent if they are 30 or more days past due.

Homeowners with spotty credit who have subprime adjustable-rate loans were especially hard hit. Foreclosures and late payments for these borrowers also reached all-time highs in the third quarter.


The percentage of subprime adjustable-rate mortgages that entered the foreclosure process soared to a record of 4.72 percent in the third quarter. That was up from 3.84 percent in the second quarter. Late payments jumped to a record high of 18.81 in the third quarter, up from 16.95 percent in the second quarter.

The association's survey covers more than 45 million home loans nationwide.
----------

Initially low interest rates that reset to much higher rates have clobbered these borrowers. Analysts estimate that nearly 2 million adjustable-rate subprime mortgages will reset to higher rates this year and next.

Doug Duncan, the association's chief economist, said in an interview with The Associated Press that foreclosures and late payments are likely to stay high or get worse in the coming quarters.

The mortgage meltdown has hit financial companies with billions of dollars in losses from bad subprime mortgage investments. Some lenders have been forced out of businesses. The situation has elevated the odds of the country falling into a recession. It has roiled Wall Street and has offered lots of fodder for Democrats and Republicans to blame each other for the mess.

http://moneynews.newsmax.com/scripts/money/printer.pl?page=http://moneynews.newsmax.com/money/archives/articles/2007/12/6/102713.cfm
 
A

Anonymous

Guest
Faster horses said:
Well, you have more documentation than I could come up with.
However, on National news yesterday, forclosures were DOWN from last month.

You just need to stay up all nite and watch C-SPAN some :wink: :lol:

You should have seen the hearings on the destroyed CIA tapes or the Halliburton employee that was raped/assaulted in Iraq- and has ran into an administrative coverup for Halliburton...

Repubs and Dems both tore into this DYSFUNCTIONAL corporate bought out administration-- and couldn't do enough apologizing to the US public for having such....
At least GW is getting some bipartisan actions going-- all agreeing how terrible he and his leadership/nonleadership is :wink: :lol: :lol:
 

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