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Economics and Investing:

From SurvivalBlog.com

G.G. flagged this "must read" piece: Taxes Prompt More Americans to Renounce Citizenship

Also from G.G.:Gold bars now Italy’s fastest growing export: Italy’s exports rose last month, but only after they were boosted by a rush of gold ingots being shifted to Switzerland.

Jim Willie: Golden Eye of Hurricane

Tim Geithner Spills The Beans, U.S. Debt Crisis Looms
 
Globalization, Inflation & Taxes: 3 Key Factors That Will Destroy The Middle Class

Items from The Economatrix:

Zero Hedge reports: Central Banks Favour Gold as IMF Warns of "Collapse of Euro" and "Full Blown Panic in Financial Markets"

Insiders Tell Jim Sinclair $ 17 Trillion in Quantitative Easing Coming

Europe Will Collapse in May-June

US Roads and Bridges Being Built by Chinese Companies as American Economy Teeters on Collapse

G.G. suggested a piece by Simon Black wherein he discusses Senate Bill 1813–legislation creating passport controls and mandatory black boxes for new cars: Something is Wrong with This Picture.

Chances of another Falkland/Malvinas War?

From SURVIVING IN ARGENTINA

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There Is Not Going To Be A Solution To Our Economic Problems On The National Level

From The Economic Collapse

For those waiting for our economic problems to be solved, you can quit holding your breath.  There is simply not going to be a solution to our economic problems on the national level.  So why is that the case?  Well, it is because the economic policies of both major political parties are very, very similar when you take a close look at them.  Yes, that statement may sound downright bizarre to many Americans, but it is true.  Both major political parties supported the Wall Street bailouts, both of them fully support the job-killing “free trade” globalization agenda, both of them have dramatically increased the national debt when in power, both of them fully support the currency-killing policies of the Federal Reserve, and neither major political party would get rid of the income tax and the IRS.  And that is just for starters.  Yes, there are some minor differences when it comes to taxing and spending between the two parties, but the truth is that they are a lot more similar on economic issues than they are different.  What we desperately need on the national level is a fundamental change in direction when it comes to economic policy, but we simply are not going to get that from either the Democrats or the Republicans.  That means that there is no hope that the economic storm that is coming will be…

Huge Dilemma: Do You Protect Your Job or Your Clients’ Money?

From Mish’s Global Economic Trend Analysis

Every day I face the question: Do You Protect Your Job or Your Clients’ Money?

The above link points to an 11 page PDF by Jeremy Grantham in his latest GMO quarterly newsletter. Here are a few excerpts.

Jeremy Grantham

The central truth of the investment business is that investment behavior is driven by career risk. In the professional investment business we are all agents, managing other peoples’ money.

Missing a big move, however unjustified it may be by fundamentals, is to take a very high risk of being fi red. Career risk and the resulting herding it creates are likely to always dominate investing. The short term will always be exaggerated, and the fact that a corporation’s future value stretches far into the future will be ignored. As GMO’s Ben Inker has written,2 two-thirds of all corporate value lies out beyond 20 years. Yet the market often trades as if all value lies within the next 5 years, and sometimes 5 months.

Ridiculous as our market volatility might seem to an intelligent Martian, it is our reality and everyone loves to trot out the “quote” attributed to Keynes (but never documented): “The market can stay irrational longer than the investor can stay solvent.” For us agents, he might better have said “The market can stay irrational longer than the client can stay patient.”

Over the years, our estimate of “standard client patience time,” to coin a phrase, has

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25 Signs That Middle Class Families Have Been Targeted For Extinction

From SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You

The middle class in America is being systematically wiped out, and most people don’t even realize what is happening.  Every single year, millions more Americans fall out of the middle class and become dependent on the government.  The United States once had the largest and most vibrant middle class in the history of the world, but now the middle class is rapidly shrinking and government dependence is at an all-time high.  So why is this happening?  Well, America is becoming a poorer nation at the same time that wealth is becoming extremely concentrated at the very top.  At this point, our economic system is designed to funnel as much money and power to the federal government and to the big corporations as possible.  Individuals and small businesses have a really hard time thriving in this environment.  To most big corporations these days, workers are viewed as financial liabilities.  Most corporations want to reduce their payrolls as much as possible.  You see, the truth is that most corporations want to be just like Apple.  If you can believe it, Apple makes $ 400,000 in profit per employee.  Big corporations don’t care that you need to pay the mortgage and provide for your family.  Their goal is to make as much money as possible.  And most of the control freaks that run our bloated federal government don’t care much about middle class families either. …

Letter Re: Mortgages–WTSHF, Inflation and Deflation

From SurvivalBlog.com

Hello Mr. Rawles,
First of all, thank you for all that you do.  Your books and your site are invaluable information to me.  They have helped me to get pretty-well prepared. 
 
I have a question about debt.  Every survival type that I have listened to or read says "get out of debt".  I am out of debt, but I am considering obtaining a small mortgage in order to be able to purchase a place that will be a better refuge location for me and my family.  (Unfortunately, it will have to be on the east side of the Mississippi River.)
 
What I don’t understand is what will happen to mortgages when the economy collapses.  Surely they (if there is a ‘they’ then) can’t foreclose on everyone.  Won’t people who are heavily in debt just have their debt evaporate with the collapse of the dollar?  Can you explain or link me to a good explanation of what will happen financially in our country when the dollar collapses?
 
Thank you so very much, – M. in North Carolina

JWR Replies: I concur that installment debt from any banking institution is a bad thing. Granted, there may be mass inflation ahead, and you’d be paying off your mortgage with cheaper dollars. But you can’t count on that. Inflation is just one potential outcome. Another possibility is the prospect of continuing house price declines and a further deteriorating job market,…

The Too Big To Fail Banks Are Now Much Bigger And Much More Powerful Than Ever

From The Economic Collapse

The Democrats, the Republicans and especially Barack Obama promised that something would be done about the too big to fail banks so that they would never again be a threat to destroy our financial system.  Well, those promises have not been kept and the too big to fail banks are now much bigger and much more powerful than ever.  The assets of the five biggest U.S. banks were equivalent to about 43 percent of U.S. GDP before the financial crisis.  Today, the assets of the five biggest U.S. banks are equivalent to about 56 percent of U.S. GDP.  So if those banks were “too big to fail” before, then what are they now?  They continue to gobble up smaller banks at a brisk pace, and they continue to pile up debt and risky investments as if a day of reckoning will never come.  But of course a day of reckoning is coming, and when it arrives they will be expecting more bailouts just like they got the last time.

The size of these monolithic financial institutions is truly difficult to comprehend.  They completely dominate our financial system and everywhere you look they are constantly absorbing more wealth and more power.  The following comes from a recent Bloomberg article….

Five banks — JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc., Wells Fargo & Co. (WFC),

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Gallup Reports Mixed Picture of US Unemployment

From Mish’s Global Economic Trend Analysis

Employment in April normally picks up and Gallup surveys show a drop in the unemployment from last month not seasonally adjusted. However, by applying the seasonal adjustments the BLS uses for April it suggests the BLS may report an uptick in the unemployment rate from 8.2% to 8.5%.

Please consider U.S. Unemployment Provides Mixed Picture in Mid-April

U.S. unemployment, as measured by Gallup on a preliminary basis without seasonal adjustment, declined to 8.2% in mid-April from 8.4% in March. However, the government’s likely seasonal adjustment of 0.3 percentage points leads to a Gallup seasonally adjusted U.S. unemployment rate of 8.5% in mid-April, up from 8.1% last month.

click on chart for sharper image

Applying the government’s seasonal correction factor from April 2011 (+0.3 points) to the current mid-April data yields a seasonally adjusted estimate of 8.5% unemployment, up from March. This is much higher than the 7.9% seasonally adjusted monthly low for Gallup’s U.S. unemployment rate, seen in January of this year. If it holds, it could also indicate a significant reversal in the recent downward trend of the government’s seasonally adjusted unemployment rate.

Regardless, Gallup data show that unemployment is far below year-ago levels. April’s preliminary unadjusted unemployment rate is down 1.2 points from April 2011 and the adjusted unemployment rate is down 1.3 points year-over-year.

Overall, it doesn’t seem as if the downward trend in the seasonally adjusted unemployment rate

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25 Signs That Middle Class Families Have Been Targeted For Extinction

From The Economic Collapse

The middle class in America is being systematically wiped out, and most people don’t even realize what is happening.  Every single year, millions more Americans fall out of the middle class and become dependent on the government.  The United States once had the largest and most vibrant middle class in the history of the world, but now the middle class is rapidly shrinking and government dependence is at an all-time high.  So why is this happening?  Well, America is becoming a poorer nation at the same time that wealth is becoming extremely concentrated at the very top.  At this point, our economic system is designed to funnel as much money and power to the federal government and to the big corporations as possible.  Individuals and small businesses have a really hard time thriving in this environment.  To most big corporations these days, workers are viewed as financial liabilities.  Most corporations want to reduce their payrolls as much as possible.  You see, the truth is that most corporations want to be just like Apple.  If you can believe it, Apple makes $ 400,000 in profit per employee.  Big corporations don’t care that you need to pay the mortgage and provide for your family.  Their goal is to make as much money as possible.  And most of the control freaks that run our bloated federal government don’t care much about…

TrimTabs Blasts Retail Sales Report, Proposes Firing All Government Economists and Disbanding the BLS, BEA and Census Bureau

From Mish’s Global Economic Trend Analysis

Yesterday the US Census Bureau reported retail sales rose 0.8% in March. Is that what happened?

Charles Biderman, President & CEO TrimTabs Investment Research, has no faith in the number. Here is a video explaining why.

Biderman says Ignorance is Bliss Regarding Economic Data

Ignorance is bliss, particularly when it comes to US government economic data. The latest bad joke occurred this morning when the US Census Bureau said retail sales rose 0.8% in March.

And the financial press reported that 0.8% sales increase as gospel showing once again how totally ignorant the media is when it comes to reporting economic numbers put out by the US government. The AP headline was that US retail sales in March rose 0.8%, helped by job gains. The Wall Street Journal online site reported not only that U.S. retail sales rose 0.8% in March, but also that Americans spent more on autos.

Really? This is garbage reporting of the worst sort. Why? Well first let us look at the actual Census Bureau press release, which is entitled Advanced Monthly Sales for Retail and Food Services March 2012. Lower down the press release explains that the advance estimates are based on a subsample of the Census Bureau’s full retail and food services sample.

What is a subsample? Would you believe in this broadband world that what is reported as a hard fact by the financial media morons, is based upon

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