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Nov. 23, 2009, 11:44 a.m. EST New gold bugs making gold investments mainstream Tudor, Paulson, Greenlight, Hayman bring precious metal in from the fringe By Alistair Barr, MarketWatch SAN FRANCISCO (MarketWatch) -- Gold has long been favored by a fringe of the investment world, but this year some of the world's leading hedge-fund managers have loaded up on the precious metal amid concern government efforts to avoid another Great Depression that could undermine major currencies and fuel rampant inflation. "I have never been a gold bug," Paul Tudor Jones, chairman of hedge-fund giant Tudor Investment Corp., wrote in an Oct....

In 2010, as protectionism and the economic and social depression will gain momentum, a large number of States will be compelled to choose between three brutal options: inflation, high taxation or defaulting on their debt.

Japan Government Says Economy Back In DeflationRolfe Winkler Fri Nov 20, 2009 1:03am EST TOKYO, Nov 20 (Reuters) - Japan's government said for the first time since 2006 that the economy was back in deflation, warning of the risk that price falls may pressure a fragile economy barely out of its worst recession in decades. The announcement came as the Bank of Japan kept interest rates near zero and upgraded its economic assessment, despite grumblings from the government, which is worried about price falls and the risk of another recession. "Recent price developments show that the Japanese economy is in...

http://www.youtube.com/watch?v=33UU6MKuWSE&feature=player_embedded

The national debt is now at 12,031,299,186,290.07. That is not chump change. We are in hock big time and even if we were to pawn off all our national parks and pimp out every member of congress, it would be a long, long time for us to pay it off. Suffice to say, we will never live to see a huge chunk out of the debt paid off, nor will our children or their children or their children's children or their children's children's children. In fact, we would have to open a big book of biblical begats before the debt...

NEW YORK/LONDON (Reuters) – Gold rose to a record high above $1,150 an ounce on Wednesday as stronger-than-expected U.S. consumer prices and a steadily weakening dollar stirred inflation fears. Spot gold hit an all-time high of $1,152.75 an ounce and was at $1,142.55 an ounce at 3:08 p.m. EST (2008 GMT), against $1,141.50 late in New York on Tuesday. U.S. December gold futures settled up $1.80 at $1,141.20 an ounce on the COMEX division of NYMEX.

Deflationists Are WRONG, Prepare For The INFLATION Mega-Trend Economics / Inflation Nov 18, 2009 - 12:58 AM By: Nadeem Walayat The jist of the deflationists argument is that debt deleveraging MUST trigger huge consumer and asset price deflation. Whilst we have all witnessed huge asset price deflation and some consumer price deflation during 2008 and into 2009. However we have also witnessed unprecedented government and central bank actions of this year, which have ignited asset price inflation with more to come that is now starting to feed into consumer price inflation. Why do deflationists have it wrong ? It is...

Interesting imo The danger in those years [2011/2012] will be that Ben Bernanke will attempt yet again to refloat the U.S. economy through inflation, buying government debt to fund the deficit and forcing short term rates well below the inflation rate. This danger is exacerbated by the Obama administration's insouciance about deficits. Ben Bernanke on his own (and his predecessor Alan Greenspan) bears a large share of responsibility for the 2008 crash, but the Bernanke/Obama combination is potentially even more dangerous. If expansionary monetary and fiscal policies are pursued regardless of market signals, the U.S. will head towards Weimar-style trillion-percent...

We've seen this over and over again.While Americans seem to recognize that there's been this thing called the housing crash, they don't believe it's happened to them, or at least a lot don't. [snip]Nationwide, when asked about their own home’s value over the past year:• 25% think their home’s value has increased • 26% think their home’s value has stayed the same • 49% think their home’s value has decreasedIn reality, 72 percent of U.S. homes lost value over the past year, and 22 percent of homes increased in value. That’s fewer homes declining versus Q2(83%), and a smaller Misperception Index of 10 (vs....

UK Inflation Rises For The First Time Since FebruaryInflation rose for the first time in eight months in October in what economists say is the start of a string of increases as fuel costs climb across the economy. Published: 11:36AM GMT 17 Nov 2009 The Consumer Price Index (CPI) - the measure used by the Bank to set interest rates - is now 1.5pc higher than a year ago, thanks in part to the steep fall seen in oil prices a year ago. City experts had forecast that CPI would climb to 1.4pc. October's rise was also spurred by a...

Only A New Credit Bubble (That Isn’t Coming) Staves Off Deflation Economics / Liquidity Bubble Nov 16, 2009 - 09:03 AM By: Chris_Galakoutis The next issue I wanted to write about in this post is this whole notion of ballooning reserves at the Fed, and how we get to hyperinflation if this money were to ever be lent out and multiplied across the economy. Reserves might have gone from 10 Billion in August 2008, to about 1 Trillion today, but in fact, this money is not being lent out – it is simply sitting there at the Fed, earning interest....

Gold prices are currently trading at the record level of $1,100/oz. Looking at the long-term loss of value in the dollar, and the damage caused by the financial excesses of the last quarter century, the question is whether this is just the kickoff phase for the precious metal. Many experts expect gold to trade above $1,300 by the first quarter of 2010. They ultimately see the correlation between peak gold and weak dollar resulting in gold above $2K. Gluskin Sheff Chief economist David Rosenberg thinks that as the world keeps losing confidence in paper currencies, and as investors worldwide seek...

Where You Find Inflation In A Deflationary World By Rocky Vega 11/13/09 Oslo, Norway – Deflation or inflation? It’s the ongoing debate that Dr. Duru tackles in tracking creeping inflation throughout the economy. Sure, deflationary fears have been stoked by credit destruction, but he believes quantitative easing and stimulus are causing inflation to rear its ugly head, “here and there.” And far beyond “here and there,” his biggest concern is of inflation “here, there and everywhere.” He cites Bill Fleckenstein to explain… “[I]n a period where fears of deflation rage and too much capacity exists for so many products, it...

One of the best economic minds of our generation is Dr. Arthur Laffer of Laffer Curve fame. So when he talks, I listen. You should, too. In a report published yesterday entitled, Market Expectations and Causative Reasons For Inflation he argues that conditions are ripe for the CPI to move rapidly from deflation to "the 2.5% to 3% range" over the next three months. And higher from there. His argument is two-fold but is driven largely by the Federal Reserve's decision to increase the monetary base. "The current increase in the monetary base (Sept-08 to the present) is more than...

The past two weeks have brought two massive paradigm shifts to a Gold market that has been morphing literally on a daily basis for the past few months. During this time, the pundits and purveyors of misinformation and tripe have done their best to ‘student body left’ Gold back into obscurity as an ancient, barbaric relic. They certainly get an ‘A’ for effort. Now that Gold has made its debut above $1100 an ounce, they’ve switched their tactic and are now calling it a bubble. We’ll deal with why this cannot be the case in a bit. For the past...

Marc Faber Says Bernanke Is Mugabe's Hyperinflation Apprentice Stock-Markets / Financial Markets 2009 Nov 11, 2009 - 03:58 AM By: Submissions Market Morning's Pat Bolland is joined by special guest host Marc Faber, editor and publisher, "The Gloom, Boom, & Doom Report" Marc Faber says the US Dollar is going to zero in the long-run but a bounce is overdue which will hit asset prices.[snip]

Demand continues to be strong – even Harrods, the famous Knightsbridge store, is getting in on the act by selling gold bars and coins to its upmarket customers. Gold has returned more than 20pc over the past year but the question remains: how high can the price of gold go? Here are the thoughts of analysts taken from around the globe. Suki Cooper, commodities analyst, Barclays Capital Ms Cooper said: “We expect prices to maintain their upward momentum through to at least the first half of 2010, where we expect prices to average $1,140 in the second quarter. The unexpected...

The Path To Runaway U.S. Inflation Economics / Inflation Nov 06, 2009 - 10:35 AM By: Ganesh_Rathnam "I see green shoots," said Fed Chairman Ben Bernanke on 60 Minutes back in March, doing his best rendition of Haley Joel Osment from the movie The Sixth Sense. Since then, every poor economic headline in the lapdog media has been preceded with the word "unexpected," as if the clueless chairman's pronouncements were suddenly the Gospel, and the economy had indeed recovered. Phantom US Economic Recovery Common sense tells us that if phenomenon A causes problem B, then B cannot be rectified unless...

NEW YORK, Nov 6 (Reuters) - Gold futures in New York rose to a record above $1,100 per ounce on Friday as the dollar eased in the wake of disappointing U.S. employment data. At 9:48 a.m. EST (1448 GMT) December gold GCZ9 was up $10.20 at $1,099.50 an ounce at the COMEX division of the New York Mercantile Exchange, having topped at $1,101.90 in morning trade. Spot gold XAU= reached a record at $1,100.90 per ounce.

... Buried in Nancy Pelosi's health-care bill is a provision that will partially repeal tax indexing for inflation, meaning that as their earnings rise over a lifetime these youngsters can look forward to paying higher rates even if their income gains aren't real. In order to raise enough money to make their plan look like it won't add to the deficit, House Democrats have deliberately not indexed two main tax features of their plan: the $500,000 threshold for the 5.4-percentage-point income tax surcharge; and the payroll level at which small businesses must pay a new 8% tax penalty for not...

{snip ...] "Since interest rates are zero, you can borrow dollars at no cost at all and use them around the globe," says Jeffrey Kleintop, chief market strategist of LPL Financial, a privately held brokerage firm based in Boston. "For example," explains Kleintop, you can borrow dollars at zero, and invest in Brazilian bonds yielding 5.2%. As the real (Brazil's currency) has risen 26% against the dollar so far in 2009, such a carry trade would have earned 31%, or double the loss of value in the dollar. Gold and oil, especially, have an inverse relationship to the dollar, underscores...

Commentary: Rates to stay low as long as unemployment stays highWASHINGTON (MarketWatch) -- The Federal Reserve isn't going anywhere until the unemployment rate drops. In answer to all those who are clamoring for the central bank to begin raising interest rates or to at least explain when higher rates might come, the Federal Open Market Committee gave a simple response on Wednesday: Show us the jobs. Rates will stay "exceptionally low" as long as the unemployment rate is rising and inflation trends are subdued, the FOMC said. After its two-day meeting ended on Wednesday, the FOMC made essentially no changes...

Four Reasons Hyperinflation Hasn’t Hit The US... Yet Keith Fitz-Gerald Nov 04, 2009 11:30 am This uncertain limbo isn't good now, or ever. Everything we know about classic economic theory suggests the US economy should be experiencing Zimbabwe-like hyperinflation right now, thanks to the nearly $2.2 trillion the US Federal Reserve has pumped into the system. But we’re not... yet. Classic economic theory says that money supply can be used to stimulate the economy and our central bankers seem to agree. That’s why they’ve pumped more than $1 trillion dollars into the economy, engineered countless bailout bonanzas for zombie institutions,...

The Federal Reserve pumped $1 trillion into the financial system during a year of harried efforts to rescue the economy. Brian Sack's job is to figure out how to get the money back out. Mr. Sack, 39 years old, is an economist who runs the markets group at the Federal Reserve Bank of New York. The group runs the Fed's trading, making it the bridge between the marble corridors of the Federal Reserve in Washington and the bustling trading floors of Wall Street. In normal times, it buys and sells Treasury securities to influence the level of interest rates. During...

Rethinking relativity: Is time out of joint? EVER since Arthur Eddington travelled to the island of Príncipe off Africa to measure starlight bending around the sun during a 1919 eclipse, evidence for Einstein’s theory of general relativity has only become stronger. Could it now be that starlight from distant galaxies is illuminating cracks in the theory’s foundation? .... Yet it is still not clear how well general relativity holds up over cosmic scales, at distances much larger than the span of single galaxies. Now the first, tentative hint of a deviation from general relativity has been found. While the evidence...

Is Debt-Deflation Economic Depression Just Beginning? Economics / Great Depression II Nov 02, 2009 - 03:12 AM By: Mike_Shedlock Last Thursday I received an email from David Meier, Associate Advisor at the MotleyFool concerning Debt-Deflation. David asked if I had any comments on his article Debt-deflation: Just the beginning? Here is a partial listing: The debate rages on. Is inflation or deflation the bigger threat? There are lots of people -- lots of smart people -- on both sides of the debate and they present lots of good arguments. One thing that I have not seen -- and maybe I...

The U.S. dollar is falling steadily against the Euro and many other major currencies. If this trend continues, the repercussions for the U.S. economy would be significant: higher inflation, higher interest rates, and a lower standard of living. It could also lead to the rapid dethroning of the dollar as the world's primary reserve currency. Perhaps most worrisome, the slide in the dollar risks becoming a rout that could trigger another global financial crisis. The Obama Administration has advanced a broad slate of policies sharing the consistent side effect that they would weaken the economy soon and indefinitely. For example,...

The National Inflation Association today released the following statement to its http://inflation.us members: "While most mainstream economists such as Nouriel Roubini are warning of deflationary threats to the U.S. economy, it is our belief that massive price inflation has already begun. The Federal Reserve's policy of massive monetary inflation in 2009 has caused the Dow Jones to bounce over 50% from its low, oil to rise 100% from its low, and gold to surge to a new all time nominal high. One NIA co-founder just saw his health insurance premium rise 16% over a year ago; and the average tuition...

Now that the Obama administration is attempting to take a victory lap on the U.S. economic recovery, claiming the $787-billion stimulus passed earlier this year was what did the trick, despite a cost of $160,000 per 'stimulus' job, as ABC's Jake Tapper pointed out, it has come at the cost of the U.S. dollar. Since then, the stock market has rebounded nicely. The Dow Jones Industrial Average (DJIA) is off a March low of 6,547 points, even topping the 10,000-mark recently. But what has caused this nearly 50-percent jump? According to CNBC's Larry Kudlow - loose monetary policy by the...

"... the U.S. economy is likely to shed more jobs in the coming days ..."

United States Catching The Argentinian Economic Disease Of Hyperinflation? Economics / US Debt Oct 31, 2009 - 12:54 AM By: John_Mauldin I have been in South America this week, speaking nine times in five days, interspersed with lots of meetings. The conversation kept coming back to the prospects for the dollar, but I was just as interested in talking with money managers and business people who had experienced the hyperinflation of Argentina and Brazil. How could such a thing happen? As it turned out, I was reading a rather remarkable book that addressed that question. There are those who believe...

When the Fermi team did the calculations, using the most conservative estimates for how astrophysics plays into this, they determined that the mass scale must be at least 1.2 times the Planck mass, and by using reasonable but less conservative assumptions, they derived lower limits on the mass scale of up to 100 times the Planck mass. One way to interpret this is to say that there is no variation of the speed of light coming from any quantum gravity effects at less than 1.2 times the Planck mass. And given that some quantum gravity frameworks predict that effects should...

What would happen if any other political party pushed for a cap and trade bill that could create green jobs of which 9 out of 10 created would be unsustainable, require government subsidizing and cost the nations economy millions of real jobs? And this is not to mention the increase in manufacturing costs that would be passed on to us in time of depression. No matter if you are a Democrat, Republican, Libertarian or an Independent, what do you think is going to happen when the government revenues are down and spending is quadrupled? As one senator from Florida was...

Reach in your wallet, and pull out a dollar bill. Look at it for a moment. Now ask yourself, “What is this worth?” This isn’t a trick question. Don’t think about anything but that dollar in your hands. Don’t think about a soft drink. Don’t think about a bag of chips, or a handful of screws at the hardware store. Think about that dollar in your hands without thinking about what it can buy. Can you do that? It’s pretty difficult, isn’t it? That’s because a dollar, qua a dollar, isn’t worth anything more than the paper and ink on...

Buy Food – Price Rises Are Almost Guaranteed By Garry White Published: 7:50PM GMT 25 Oct 2009 There are two main drivers of commodity prices – supply and demand. This is just as true with soft commodities such as wheat, rice, sugar and cocoa as it is with copper and tin. The big problem for your weekly shopping budget in the future is that there are problems on both sides of the equation that are likely to squeeze prices higher, permanently. However, this also provides a great investment opportunity and now is a good time to buy into many areas...

 Glenn Beck got this from one of his economic "deep throats" who knows the way the world works This was on today's show  Fresh from Glenn Beck show a very good explanation of economic affairsUnder Jimmy Carter the money supply was jacked up 13% to stimulate the economyStagflation set in so Paul Volcker tightened up the money supply by jacking up rates to 20%So 20% cured 13%This time around the money supply has been increased by 130%The Fed is loaning banks and Wall Street money at essentially 0% interestThe Vast majority of this money is retained and not lent out...

A fierce war of words has erupted in recent weeks between the two major camps in monetary circles. The first camp - the gold bulls/dollar bears - have been loudly voicing their twin belief that the gold price is poised to skyrocket while the dollar price is perched for a collapse. The other side - the gold bears/dollar bulls - are making the counter claim the gold price is setting up for a crash. There is another train of thought espoused by some that a slow, steady decline of the dollar's exchange value, rather than being a catastrophic event, is...

http://www.zerohedge.com/article/marc-faber-death-fiat-money-dollar-will-go-value-exactly-zero

Before we consider what the consequences of inflation are in specific cases, we should consider what its consequences are in general. Even prior to that, it seems desirable to ask why inflation has been constantly resorted to, why it has had an immemorial popular appeal, and why its siren music has tempted one nation after another down the path to economic disaster. The most obvious and yet the oldest and most stubborn error on which the appeal of inflation rests is that of confusing “money” with wealth. “That wealth consists in money, or in gold and silver” wrote Adam Smith...

Most of us are gathered at the station, watching for the Inflation Express to come rumbling in. But we've been waiting for a while now. Just when should we expect the big locomotive to arrive and start pushing the prices of most things uphill? We'd all like to know the exact date, of course, but no one can know for sure. Not even a careful reading of the Mayan calendar will help. What we can do is estimate a time range for price inflation to show up, and that alone should have some important implications for investment decisions. Why It's...

U.S. Faces Second Lost Economic Decade Because Of Misguided Stimulus Economics / Great Depression II Oct 23, 2009 - 04:00 PM By: Mike_Shedlock Japan has gone through two lost decades, in and out of deflation, with nothing to show for it but increasing debt to GDP and a stock market still 70% below its peak. Now, Richard Koo of Nomura Research Institute Ltd. says U.S. Risks Japan-Like ‘Lost Decade’ on Stimulus Exit. U.S. officials contemplating an exit from record fiscal stimulus are in danger of repeating mistakes that plunged Japan into its lost decade of stagnant growth, according to Richard...

Dollar’s Doom Puts a Face on New $1 Million Bill: David Reilly

US Hyperinflation? By Chuck Butler10/20/09 St. Louis, Missouri – The finance ministers of the Eurozone met yesterday and they’ve tried to stem the euro’s (EUR) rise… But they’ll need more than words to get the job done! And so we begin a new day… Front and center this morning, the currencies – which had given background overnight to the dollar – are back in rally mode, and are taking liberties with the dollar once more. For most of the night, that was not the case, though. The dollar had rallied back and sent the euro, for instance, to the 1.48...

Producer Prices Plunge Joe WeisenthalOct. 20, 2009, 9:15 AM Today's PPI for October showed deeper deflation than anyone expected. The Producer Price Index for Finished Goods declined 0.6 percent in September, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decrease followed a 1.7-percent rise in August and a 0.9-percent decline in July. In September, at the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 0.2 percent and the crude goods index fell 2.1 percent. On an unadjusted basis, from September 2008 to September 2009, prices for finished...

            All of the following experts expect the U.S. stock market to decline at some point in the future.  One interesting question is whether the dollar will continue to weaken or turn around and become strong. The answer to that question can affect future investment alternatives.              Some experts like Peter Schiff and David Tice believe that the dollar will loose value and we should expect inflation in prices and not lower commodity prices. If the dollar continues to weaken then perhaps as Tice suggests “Being in foreign assets, precious metals, and select equities may prove safer than shorts.”             ...

Inflation Fears Drove Rate Rise, RBA Minutes Show (Australia) James Glynn October 20, 2009 Article from: Dow Jones Newswires GROWING concerns that inflation could increase were a decisive factor in the Reserve Bank's decision to raise interest rates, the central bank's minutes released today showed. The elevated rhetoric on inflation supports the prevailing view in financial markets that the RBA is set to continue hiking the cash rate target over coming months and through 2010, seeking a return to more normal levels around 5.0 per cent. "Underlying inflation was still, on the latest data, above the target and, while current...

Three Asset Classes That Can Actually Outpace Coming Inflationary Price Increases by: Paco Ahlgren October 19, 2009 This “Excess capacity is temporarily suppressing global prices. But I see inflation as the greater future challenge." - Alan Greenspan, June 25, 2009 "The US economy may witness double-digit inflation in a few years unless the central bank tightens up its monetary policy… Unless we roll in this whole degree of expansion, we will be in trouble… I am not talking 3-5 per cent inflation, I am talking double-digit inflation in the US.” - Alan Greenspan, September 9, 2009 -- Man, the Dow...

It’s a good day to go cross border shopping as our Canadian Loonie is buying more in the US. The Loonie is almost on par withe the US dollar. Fueled by high oil prices and a declining US dollar the high loonie hurts employment in Canada. “Canadian Prime Minister Stephen Harper said yesterday in remarks to reporters in Toronto that he shares Bank of Canada Governor Mark Carney’sconcern that gains in the country’s currency could slow recovery. Carney said in a speech on June 4 that a persistently strong Canadian dollar would “work against” positive factors such as improved trade.”...

Major institutions should be broken up if necessary, Greenlight manager says NEW YORK (MarketWatch) -- Greenlight Capital manager David Einhorn said Monday that his hedge-fund firm is betting on the possibility of a major currency collapse and a surge in interest rates, citing ballooning government deficits in some of the world's most developed countries.The hedge-fund manager, who warned about Lehman Brothers' frailty before it collapsed last year, also said financial institutions that are deemed as "too big to fail," such as Citigroup Inc. /quotes/comstock/13*!c/quotes/nls/c (C 4.57, -0.02, -0.38%) , should be broken up. ReutersDavid Einhorn of Greenlight Capital. Greenlight has...

In 2001 the late Jude Wanniski observed in the American Spectator that "Only when we fully grasp the importance of this definition of inflation or deflation will we be able to understand how to rid the world of these twin evils." Wanniski knew well that it is the instability in the value of the money that drives major economic error. When money is fluctuating in value, the money prices of all investments become distorted and mistakes are made. During periods of inflation, capital moves into the assets of the earth such as housing and gold that are least vulnerable to...