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Economics and Investing:

From SurvivalBlog.com

The latest coinage debasement news, this time from The Philippines: Coin hoarding soon a crime? JWR’s Comment: With orchestrated currency inflation there comes the inevitable day when seigniorage costs advance to unacceptable levels, and the metallic value of any given coin greatly exceeds its face value. Rather than doing the honest thing–knocking a few zeroes off their paper currency–governments often resort to bans on coin melting and coin exportation. Anti-hoarding laws are much less common in First World countries as there are typically no limitations on the amount of a currency that someone holds in an ostensibly "sound" currency regime. The root of the problem is inflation. Honest money, pegged to–and redeemable on demand for–specie, is the solution. Debasement and the laws that go along with it, are just stopgap measures, designed to perpetuate larcenous governments. I use the word larcenous because inflation is a covert method of robbing us of the buying power of our savings. Currency inflation is effectively a hidden form of taxation.

B.B. sent this: Greek Depositors Withdrew $ 898 Million From Banks Monday

From J.B.G.: Moody‘s Investors Service has downgraded 26 Italian banks

Items from The Economatrix:

Jim Rogers:  Get Out of Stocks; Buy Gold, Silver and Agriculture

The Long-term Case For Commodities

Your Paycheck In Gold Bullion

From Modern Survival Blog

Few people understand the difference between ‘nominal’ and ‘real.’

Regarding the nominal value versus the real value of the  dollar…

Nominal: the ‘face’ value printed on a paper fiat note.
Real: what you can really buy with that note.

The buying power of fiat money (the dollar) has fallen by 96% under America’s greatest failure (the Fed) since the year it was established in 1913.

This equals the ‘invisible’ robbing of the Poor and Middle Class by the Fed. Let me give you an example of the difference between average wages in paper fiat over time, compared with equivalent ounces of Gold:

- Average wages in 1959 were $ 5,016 or 143 oz of Gold
- Average wages in 1977 were $ 15,000 or 120 oz of Gold
- Average wages in 1999 were $ 28,970 or 104 oz of Gold
- Average wages in 2008 were $ 41,335 or 53 oz of Gold
- Average wages in 2012 were $ 42,000 or 26 oz of Gold

This is not exactly rocket science, yet most folks consider that they are ‘doing better’ because their nominal wages have increased over time, when in fact it takes increasing nominal amounts of debauched fiat to buy the same ounce of Gold (in effect making Gold more valuable over time in terms of buying power, as the Dollar slides into Zimbabwe territory).

(some data above sourced from jsmineset.com)

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Why A Greek Exit From The Euro Would Mean The End Of The Eurozone

From The Economic Collapse

What was considered unthinkable a few months ago has now become probable.  All over the globe there are headlines proclaiming that a Greek exit from the euro is now a real possibility.  In fact, some of those headlines make it sound like it is practically inevitable.  For example, Der Spiegel ran a front page story the other day with the following startling headline: “Acropolis, Adieu! Why Greece must leave the euro”.  Many are saying that the euro will be stronger without Greece.  They are saying things such as “a chain is only as strong as its weakest link” and they are claiming that financial markets are now far more prepared for a “Grexit” than they would have been two years ago.  But the truth is that it really is naive to think that a Greek exit from the euro can be “managed” and that business will go on as usual afterwards.  If Greece leaves the euro it will set a very dangerous precedent.  The moment Greece exits the euro, investors all over the globe will be asking the following question: “Who is next?”  Portugal, Italy and Spain would all see bond yields soar and they would all likely experience runs on their banks.  It would only be a matter of time before more eurozone members would leave.  In the end, the whole monetary union experiment would crumble.

As I…

200,000 Lose Unemployment Benefits This Week, Nearly Half From California

From Mish’s Global Economic Trend Analysis

The grim situation in California is about to get grimmer as Unemployment Benefits Go Bye-Bye

More than 200,000 long-term jobless Americans will lose their unemployment checks this week, when eight states roll off the federal extended benefits program.

Nearly half of them live in California, and the rest reside in Florida, Illinois, North Carolina, Colorado, Connecticut, Pennsylvania and Texas.

The federal extended benefits program has provided the jobless with up to 20 weeks of unemployment checks after they’ve run through their state and their federal emergency benefits, which together last up to 79 weeks.

But the extended benefits program is expiring throughout the country as the economy improves. To be eligible for these benefits, a state must show that its unemployment rate is at least 10% higher than it was in at least one of the past three years.

Already, 25 states have rolled off the extended benefits program, with 15 of them exiting last month alone. But more unemployed folks will be affected by this week’s cessation than April’s, when about 135,000 people saw their payments end.

The jobless have been able to collect up to 99 weeks of benefits for much of the Great Recession and its aftermath. But after multiple extensions, Congress in February passed a law that starts phasing out this unprecedented lifeline.

Starting later this year, the maximum number of weeks the jobless can collect unemployment benefits will be reduced to as little as…

If You Live In California Things Just Got A Whole Lot Worse

From The Economic Collapse

Why does the state of California seem to be so incredibly hopeless?  These days California can’t seem to do anything right, and if you live in California things just got a whole lot worse.  Governor Brown has announced that the state budget deficit for this year is going to be much larger than projected, that more government services are going to be cut and that voters are going to vote on another round of tax increases in November.  Meanwhile, unemployment is sitting at 11 percent and extended federal unemployment benefits for workers in the state are ending.  Because California is one of the worst places in the nation to conduct business, there has been a steady flow of companies leaving the state.  Those companies have taken a whole lot of good jobs with them.  Due to the lack of jobs and a steady stream of impoverished immigrants coming in from Mexico and other countries, poverty in the state has exploded and crime is rapidly increasing.  California may be the land of “endless sunshine”, but for the California economy there are only dark clouds on the horizon.  The state is coming apart at the seams and there is not much hope that things are going to turn around any time soon.

These days, California is very similar to Greece in many ways.

Just like Greece, California has had round after…

“Head Start” an Abysmal Failure for Kids, a Spectacular Success for Teachers

From Mish’s Global Economic Trend Analysis

Head Start, a preschool program for low-income kids has been a spectacular success, not for kids, but for teachers and teachers’ unions.

Please consider Miami-Dade County seeks to unload Head Start program, salaries

For more than four decades, Miami-Dade County officials have managed Head Start, the storied preschool program for children from low-income families. But the county now wants out — and “generous” salaries are partly to blame.

On average, Miami-Dade paid its Head Start teachers $ 76,860 in salary and fringe benefits in 2011, county records show. That’s about 90 percent higher than the second highest-paying Head Start provider in the county, Catholic Charities, which paid its teachers an average of $ 40,418 in salary and benefits.

On the administrative side, 17 county Head Start staffers made more than $ 100,000 in salary and benefits.

Last week, the county submitted paperwork to offload much of the Head Start program to three local agencies: the Miami-Dade school system, Easter Seals of South Florida and the YWCA of Greater Miami-Dade.

But the plan has been met with resistance from some parents and politicians, who say the shake-up would hurt the current Head Start staffers.

About 400 county employees would face the prospect of either losing their jobs or accepting substantial pay cuts if the new agencies hire them.

“You’re talking about great people who worked with kids for their entire lives with the county and now we’re saying, ‘We

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Economics and Investing:

From SurvivalBlog.com

G.G. sent this: ‘High Inflation Causes Societies to Disintegrate’

Thanks to Jeff W. for this one: Greece Exit, Euro-Zone Collapse, Spain and Portugal Will Follow Within Six Months

Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO. (OBTW , the earlier report of Michelle Bachmann earning Swiss citizenship has already been overcome by events. She has declined it.)

Chartist analyst Willem Weytjens predicts: 20 Years From Now: Gold @ $ 12,000 & Silver @ $ 1,000?

Another from G.G.: Regulators Close Florida Bank; Failure Toll Rises to 23 in 2012

Items from The Economatrix:

Drop In Jobless Claims Eases Labor Market Fears

Gold Hits 2012 Low as Gold Miners Show Signs of Reversal

Poll Shows Americans’ Pessimism on Economy Growing

Producer Prices U.S. Decrease for First Time in Four Months

Five Steps To Counter $ 4 Per Gallon

Is The Food We Eat Killing Us?

From The Economic Collapse

Are we digging our own graves with our teeth?  Is the food that we eat every day slowly killing us?  When I was growing up, I just assumed that everything in the grocery store was perfectly safe and perfectly healthy.  I just assumed that the government and the big corporations were watching out for us and that they would never allow something harmful to be sold in the stores.  Boy, was I wrong!  Today, the average American diet is extremely unhealthy.  Most of the foods that we all love to eat are absolutely packed with things that will damage our health.  Many of the ingredients that make our foods “taste good” such as fat, salt and sugar can be extremely damaging in large amounts.  On top of that, most processed foods are absolutely loaded with chemicals and preservatives.  The next time you go to the grocery store, just start turning over packages and read the “ingredients” that are being put into our food.  If you have never done this before, you will be absolutely amazed.  In many of our most common foods there are “ingredients” that I cannot even pronounce.  Sadly, most Americans have no idea that eating a steady diet of these processed foods will likely leave them massively overweight, very sick and much closer to death.

Eating healthy takes more time, more effort and more money than…

Cash Cow Liquidity Comparison: Where’s the Cash and Where’s the Debt? A Look at the Top 50 Companies

From Mish’s Global Economic Trend Analysis

In light of  renewed banter about corporations being flush with cash following Apple’s stellar earnings, I thought it would be instructive to take a look at the top 50 companies by market cap in the following ways:

1. Debt and liabilities vs. cash
2. Debt and liabilities vs. cash plus short-term investments
3. Debt and liabilities vs. cash plus both short-term and long-term investments 

With thanks to Ross Perez at Tableau Software for compiling the data for my idea, please consider the following interactive graph.

Note the ability to change the “cash” metric in the upper right of the graph.

Liquidity Comparison

Richard Shaw has an excellent article on Seeking Alpha that discusses cash, short-term investments, and long-term investments and what they mean: Comparing Liquidity Of Microsoft And Apple And Both Compared To Other Cash Rich Companies.

Bottom line: net cash on hand at the top 50 companies is negative to the tune of $ 1.479 trillion. If one considers short-term investments to be cash equivalents, then net cash is negative $ 1.251. Only if long-term investments are included does the number go positive.

Clearly there is not as much “sideline cash” as most are led to believe. By the way, the notion of sideline cash is bogus in the first…

Economics and Investing:

From SurvivalBlog.com

G.G. flagged this: One in Three Young U.S. Workers Are Underemployed

John Williams: The Real Unemployment Rate: 22%−Not 8.1%–The coming fiscal cliff: hyperinflation on track for 2014

The wrecking ball of hidden inflation and Fed based strategies – food inflation far outpacing overall inflation and eating away at the purchasing power of 46,000,000 Americans on food stamps.

Jim Willie: Gold Cover Clause Guidance

Items from The Economatrix:

Anti-Gold Propaganda Push, Gold Cover Clause For Enabling Competing New Currencies

The Fed, Wall Street Prepare To Unleash Crisis 2.0

Faber Sees Crash Like in 1987 if US Stocks Climb Higher

The Economy Is Muddling Along a Cliff’s Edge