China May Buy $1 TRILLION of Gold: Bloomberg

In an otherwise quiet article about central banks today, Bloomberg quoted an analyst who says China may use up to a third of their $3 trillion in foreign reserves to purchase gold.

China has been moving away from the dollar, and into alternative stores of wealth for years now.

But $1 trillion into gold? If it happens, such a large move would further threaten the dollar's status as reserve currency. It would also provide further buying pressure in gold for years to come (as the dollar crumples into a pitiful heap on the floor).

http://www.wealthwire.com/news/headlines/1090

Our taxes barely cover our social-welfare programs; everything else is on credit.

All federal revenues—from income taxes, Social Security and Medicare payroll taxes, corporate taxes, excise taxes, customs duties, estate and gift taxes and user fees—are consumed to pay Americans myriad federal benefits. These include Social Security, Medicare, Medicaid, veterans' benefits, food stamps, farm subsidies and the many other forms of social insurance and welfare, including economic stimulus and job-creation.

Put another way: The federal government borrows everything it needs to operate what we ought to think of as the government as an institution, such as defense (including the support of troops in Afghanistan and Iraq); highway construction; foreign aid; aid to states and localities; land management and pollution control; regulation of this, that and all the other things; scientific research; payment of federal employees' salaries; and payment of interest on the national debt.

http://online.barrons.com/article/SB50001424052970203703404576291230749135162.html

10 States Where Pensions Are Running Out of Money

Corporate pensions, municipal pensions, state pensions — each category has funds that have run out of money and certainly many are running low. The fate of the UAW pensions was a critical part of the US bailout of the auto industry. Eventually, the unions received equity in Chrysler and GM, among other things. They are not the only large American companies with underfunded pensions; they are just the most recent and visible examples.

http://finance.yahoo.com/retirement/article/112640/states-pensions-public-sector-247

World Food Prices Rise to Near-Record High as Inflation Speeds Up, UN Says

An index of 55 commodities rose to 232.1 points from 231 points in March, the United Nations’ Rome-based Food and Agriculture Organization said in a report on its website today. The gauge climbed to an all-time high of 237.2 in February before dropping 2.6 percent in March.

The cost of living in the U.S. rose at its fastest pace since December 2009 in the 12 months ended in March, the same month in which Chinese consumer prices rose by the most since 2008. The European Central Bank raised interest rates on April 7, joining China, India, Poland and Sweden in a bid to control inflation partly blamed on food costs. Costlier food also contributed to riots across northern Africa and the Middle East that toppled leaders in Egypt and Tunisia this year.

http://www.bloomberg.com/news/2011-05-05/food-prices-approach-record-high-as-grain-prices-fuel-inflation-worldwide.html

Obamaflation Arrives

President Obama's approval numbers in a state he carried by over ten points in 2008 has him with a disapproval rating of 52% -- and within the margin of error with three potential Republican presidential candidates.

http://spectator.org/archives/2011/04/26/obamaflation-arrives/1

U.S. States Pension Fund Deficits Widen by 26%

The deficits, or the difference between the retirement and health-care benefits states have promised their employees and the assets set aside to fund them, grew to $1.26 trillion by the end of the 2009 budget year from $1 trillion a year earlier, the Pew Center on the States said in a report released today. The fiscal year ends in June for all but four states.

The gaps are straining governments that have yet to fully recover from the recession and are stoking political fights in states such as New Jersey, Ohio and Wisconsin over the workers’ benefits. They have also drawn scrutiny in Congress, where Republicans have held hearings into the risks posed by underfunded pensions and backed legislation that would bar the federal government from bailing out any ailing funds.

“The states dug themselves a big hole before the recession ever hit,” Susan Urahn, the managing director of the Pew Center in Washington, said in a conference call with reporters yesterday. “We can see how the Great Recession and states’ severe budget problems made a serious problem even worse.”

http://www.bloomberg.com/news/2011-04-26/u-s-states-pension-fund-deficits-widen-by-26-pew-center-study-says.html

S&P cuts Japan rating outlook to negative

Standard & Poor’s cut its outlook on Japan’s sovereign rating to negative from stable Wednesday to reflect the potential for a downgrade if the country’s fiscal situation deteriorates more than expected in the wake of last month’s disaster.

http://www.marketwatch.com/story/sp-cuts-japan-rating-outlook-to-negative-2011-04-26

The 9 places where inflation is crushing us

The Federal Reserve would have you believe that everything is fine, focusing on core inflation rates and ignoring broader measures of inflation as they affect food and energy. These commodity-driven prices, as our central banking overlords would have you believe, are naturally more volatile and shouldn’t be overstated.

High gas prices could hurt ObamaNeil King looks at whether soaring gas prices will hurt President Obama's chances for re-election in 2012 and how Republicans in Congress are trying to put the blame on Obama for consumers' pain at the pump.

You would think after Fed bureaucrat William Dudley was castigated for talking up the affordability of iPads while ignoring real family expenses, our Federal Reserve officials would have woken up to reality. But after the publicity stunt by Chairman Ben Bernanke on Wednesday, it’s clear that the Fed — and perhaps many Americans as a result — is in denial when it comes to the inflationary trends crippling U.S. households.

http://www.marketwatch.com/story/the-9-places-where-inflation-is-crushing-us-2011-04-28?link=home_carousel