Silver in complete backwardation

We are in the process of pouring over the data from this week, and just below is something we are going to be hearing a lot more about in the coming days and weeks. As of Friday, February 4, 2011, there was near zero contango in the COMEX silver futures market.

http://harveyorgan.blogspot.com/2011/02/silver-in-complete-backwardation.html

Jim Rickards On Inflation And Currency Wars

Jim Rickards: I think there is a definite and highly significant danger of inflation coming from QE and QE2 specifically. A lot of people have said, in fact, the Fed has said, that, if you look at the key price indices, the Producer Price Index (PPI), Consumer Price Index (CPI), and the Personal Consumption (PC) price deflator, they are very, they use the phrase, “well behaved”. For the past year and a half, the critics, and I would include myself, have been saying that this situation is dangerous and unstable. The Fed has been pointing to the price indices and saying that you can’t find inflation under a rock, you can’t find inflation with a microscope, so what are you worried about?

http://investmentwatchblog.com/interview-jim-rickards-on-inflation-and-currency-wars/

Supermarket surprise: smaller servings, same price

Product Old Size New Size Difference
Tropicana orange juice 64 oz. 59 oz. 7.8%
Ivory dish detergent 30 oz. 24 oz. 20%
Kraft American cheese 24 slices 22 slices 8.3%
Kirkland signature paper towels 96.2 sq. ft. 85 sq. ft. 11.6%
Haagen Dazs ice cream 16 oz. 14 oz. 12.5%
Scott toilet tissue 115.2 sq. ft. 104.8 sq. ft. 9%
Lanacane first aid spray 113 grams 99 grams 12.4%
Chicken of the Sea salmon 3 oz. 2.6 oz. 13.3%
Classico pesto 10 oz. 8.1 oz. 19%
Hebrew National franks 12 oz. 11 oz. 8.3%

http://news.yahoo.com/s//fool/20110124/bs_fool_fool/rx109081/

More Investors Position for Possibility of U.S. Default

The net notional amount of derivatives used to hedge or speculate against a default on U.S. government debt rose 12% in late January, according to Depository Trust & Clearing Corp. figures.

The increase suggests investors are becoming more nervous about the quality of U.S. debt. It also threatens to cast a pall over the notion that Treasurys are risk-free assets investors should run to for haven from other instruments.

The net notional of credit default swaps bought and sold on U.S. debt rose from $2.67 billion to just over $3 billion between Jan. 14 and Jan. 21, ...

http://online.wsj.com/article/SB10001424052748704775604576119960455333704.html

Fed chief Ben Bernanke denies US policy behind record global food prices

Ben Bernanke, the chairman of the US Federal Reserve, has dismissed the idea that the central bank’s policies are to blame for the rise in global food prices to a record high that helped trigger political unrest in Egypt.

Mr Bernanke said that the rapid growth of developing economies was behind the increase in food prices, rather than the Fed’s decision to embark on a second, $600bn (£371bn) round of printing money. “Clearly what’s happening is not a dollar effect, it’s a growth effect,” Mr Bernanke said in a rare question and answer session with journalists at the National Press Club in Washington on Thursday.

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8302111/Fed-chief-Ben-Bernanke-denies-US-policy-behind-record-global-food-prices.html#

Fed denies policy is causing food rises

Asset purchases by the US Federal Reserve do not cause rising food prices in countries such as Egypt, the central bank’s chairman Ben Bernanke said on Thursday.

“I think it’s entirely unfair to attribute excess demand pressures in emerging markets to US monetary policy, because emerging markets have all the tools they need to address excess demand in those countries,” he said.

Mr Bernanke’s comments are a firm retort to critics who argue that by driving down US interest rates with quantitative easing the Fed is pushing capital flows into commodities and emerging markets.

http://www.ft.com/cms/s/0/5c4aeaea-2fbd-11e0-91f8-00144feabdc0.html#axzz1CztEsxVR

Companies Stock Up as Commodities Prices Rise

Companies contending with rising commodity prices are stockpiling rubber tires, cotton clothing and other goods, a maneuver that is aimed at insulating them from inflation but also could contribute to it.

John Anton, founder of Anton Sports, with his surplus supply of cotton T-shirts in Tempe, Ariz., last month.
Spice-maker McCormick & Co. stocked up on some ingredients and Monro Muffler Brake Inc. bought extra tires and motor oil, assuming prices of those goods will keep rising. Anton Sport, a small athletic-wear wholesaler in Tempe, Ariz., amped up its fabric purchases to avoid higher prices.

These pre-emptive purchases are a fraction of overall business activity, but the trend is being watched by economists and business executives. The stockpiling comes at a pivotal moment for the global economy, as central bankers scramble to judge the impact of raw-materials price increases and figure out whether or when to raise interest rates.

http://online.wsj.com/article/SB10001424052748704775604576120533736097682.html?mod=WSJ_hp_LEFTTopStories

U.S. economy, inflation, China, euro, gold

U.S. Inflation Could Rise Twentyfold

Are We Seeing a Whiff of Inflation?

Economists are pointing out that January's super strong ISM manufacturing report could be signaling early signs of inflationary pressure.

The prices paid index jumped to 81.5 from 72.5, the highest level since 2008, when oil was spiking in the mid-$140s per barrel. In November, prices paid was at 69.5.

http://www.cnbc.com/id/41370200

Four Reasons Why The Government Is Destroying The Dollar

1. Creating money out of thin air on a massive basis is all that stands between the current state of hidden depression, and overt depression with unemployment levels in excess of those seen in the US Great Depression of the 1930s.

2. It is the weapon of choice being used to wage currency war and reboot US economic growth.

3. It is the most effective way to meet not just current crushing debt levels, but to deal with the rapidly approaching massive generational crisis of paying for Boomer retirement promises.

4. Political survival and enhanced power for incumbent politicians.

http://www.financialsense.com/contributors/daniel-amerman/four-reasons-why-the-government-is-destroying-the-dollar

Authoritarian governments start stockpiling food to fight public anger

Commodities traders have warned they are seeing the first signs of panic buying from states concerned about the political implications of rising prices for staple crops.

However, the tactic risks simply further pushing up prices, analysts have warned, pushing a spiral of food inflation.

Governments in Asia, the Middle East and North Africa have recently made large food purchases on the open market in the wake of unrest in Tunisia which deposed president Zine al-Abidine Ben Ali.

http://www.telegraph.co.uk/news/worldnews/middleeast/8288555/Authoritarian-governments-start-stockpiling-food-to-fight-public-anger.html

The downsizing of America-manufactures learn creative methods of repackaging inflation.

There is a slow burn going on and it is happening in your wallet and also in the gas tank of your car. The US Treasury and Federal Reserve have made it their mission to slowly cut the value of each one of those green dollars you have. Since many Americans are struggling to make the monthly bills, many producers realize that they cannot up the price on regularly bought consumption products.

http://www.mybudget360.com/downsizing-of-america-oil-production-off-1980s-peak-repackaging-inflation-decline-us-dollar-purchasing-power/

Why the Smart Money is Trading Dollar Bills for Hard Assets

“With each passing day,” we observed last week, “inflation seems less and less a theoretical fiction, and more and more a genuine threat… No self-respecting economist or self-aggrandizing central banker is acknowledging any inflationary risk whatsoever,” we continued. “But the indifferent data points of real-world prices testify to the contrary.”

http://dailyreckoning.com/why-the-smart-money-is-trading-dollar-bills-for-hard-assets/

Silver Shortage This Decade, Silver Will Be Worth More Than Gold

A Silver Shortage?

The Most Predictable Financial Calamity in History

In November 2010, the Federal Reserve announced a second round of economic stimulus commonly referred to as Quantitative Easing (QE2). The reason, according to the Fed, was “progress toward its objectives has been disappointingly slow.” So, to try and turn the economy around, the Fed said, “. . . the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter (June) of 2011, a pace of about $75 billion per month.” QE means the Fed basically creates money out of thin air to buy debt. The current money printing orgy is financing more than half of U.S. government right now. The first round of QE bought toxic mortgage debt and bailed out the bankers.

http://usawatchdog.com/economic-stimulus-quantitative-easing-qe3/

Dead ahead: State and city pension Failures

Last week The New York Times dropped a bombshell, reporting that "policy makers are working behind the scenes to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers."

This is truly huge news, with far-reaching consequences. But it shouldn't come as a surprise if you've been reading my columns ...

http://beforeitsnews.com/story/375/477/Dead_ahead:_State_and_city_pension_FAILURES.html

Second wave of housing bust hammers more cities

A second wave of falling home prices is battering some cities that had escaped the worst of the housing market bust.

Prices in Seattle, Charlotte, N.C., and Portland, Ore., have hit their lowest points since peaking in 2006 and 2007. Denver and Minneapolis are nearing new lows. High unemployment and rising foreclosures are taking a toll even on markets that never overheated during the boom years.

Home values are dwindling in nearly every American market. Prices fell in November in all but one of the 20 cities in the Standard & Poor's/Case-Shiller index released Tuesday. Eight of those markets hit their lowest point since the housing bubble burst.

http://finance.yahoo.com/news/Second-wave-of-housing-bust-apf-411171723.html?x=0

Gold Holdings in ETPs Plunge Amid Signs of Recovery

Gold held through exchange-traded products, or ETPs, tumbled by the most in more than two years amid speculation that improving prospects for the global economic recovery are undermining demand and hurting prices.

Assets in gold-backed ETPs fell 31 metric tons yesterday to 2,043.09 tons, the lowest level since Aug. 10, according to data compiled by Bloomberg from 10 providers. That’s the biggest drop in percentage terms since October 2008, the data show. Holdings have shrunk 3.4 percent from the record 2,114.6 tons on Dec. 20.

http://www.bloomberg.com/news/2011-01-26/gold-assets-in-etps-plunge-most-since-2008-amid-signs-of-global-recovery.html

Finally, It’s the Fed That Has Become Too Big to Fail

We’re still not sure whether CNBC was making a joke or simply advertising its ignorance with a recent headline, “Accounting Tweak Could Save Fed from Losses,” This was a tweak about as subtle and ingenuous as Bernie Madoff’s balance sheet.

http://news.goldseek.com/RickAckerman/1295938860.php

An Ugly Side Effect of New 1099 Law: More Tax Evasion

Tax pros now fear that tax evasion could go viral if the health-reform bill’s new 1099 requirement takes effect next year. They say more small businesses will likely opt to do all-cash transactions under the table to avoid the 1099 reporting requirement, and all of its onerous provisions, which are worse than small businesses may realize.

That's the direct opposite effect of what lawmakers had hoped for, and it would pose a bad development for the Internal Revenue Service, which for years has been under pressure from Congress to bring in more tax revenue. That revenue is needed now more than ever, as Social Security and Medicare teeter into the red, and as more states rely on federal revenue to fill their budget holes.

http://www.foxbusiness.com/markets/2011/01/21/new-ugly-effect-tax-evasion/#

Higher pump prices coming your way this spring

Pump prices have risen nearly 9 percent since Dec. 1 and topped $3.10 a gallon this week. That's the highest level since October 2008. The price may rise or fall a little over the next few months, but analysts expect it to range between $3.20 and $3.75 gallon by March and April ahead of the summer driving season.

http://finance.yahoo.com/news/Higher-pump-prices-coming-apf-1797090788.html?x=0

Which Of The Currencies Of The World Is Going To Crash First?

The U.S. and Japan are both steamrolling toward insolvency, and several European nations would have already defaulted on their debts if they had not been bailed out. So which of the major currencies of the world is going to crash first? Will one (or more) of the big currencies fall before the end of 2011? Once one major currency collapses will the rest start to fall like dominoes? The truth is that the world has never seen a sovereign debt crisis of this magnitude in all of human history. Almost the entire globe is drowning in a sea of red ink and it has brought us right to the brink of financial disaster.

http://theeconomiccollapseblog.com/archives/which-of-the-currencies-of-the-world-is-going-to-crash-first

Fed Hides Major Accounting Change

Concerns that the Federal Reserve could suffer losses on its massive bond holdings may have driven the central bank to adopt a little-noticed accounting change with huge implications: it makes insolvency much less likely.

The significant shift was tucked quietly into the Fed's weekly report on its balance sheet and phrased in such technical terms that it was not even reported by financial media when originally announced on Jan. 6.

But the new rules have slowly begun to catch the attention of market analysts. Many are at once surprised that the Fed can set its own guidelines, and also relieved that the remote but dangerous possibility that the world's most powerful central bank might need to ask the U.S. Treasury or its member banks for money is now more likely to be averted.

http://www.economicpolicyjournal.com/2011/01/hot-fed-hides-major-accounting-change.html

Social Security Is in Far Worse Shape Than You Think

For years, politicians and policymakers have reassured the American public that the Social Security system, which sends monthly checks out to 53 million beneficiaries, is safely solvent -- and will be for decades to come. But federal spending and income data from the Treasury Department reveal that the Social Security program is already deep in the red, with outlays exceeding payroll tax revenues by $76 billion in 2010 alone.

http://www.dailyfinance.com/story/retirement/social-security-far-worse-shape-than-you-think/19804267/?icid=maing%7Cmain5%7Cdl3%7Csec1_lnk3%7C37184

12 Economic Collapse Scenarios That We Could Potentially See In 2011

So we had all better be getting prepared for hard times. The following are 12 economic collapse scenarios that we could potentially see in 2011....

http://theeconomiccollapseblog.com/archives/12-economic-collapse-scenarios-that-we-could-potentially-see-in-2011

Germany Should Prepare for Greek Default, Adviser Feld Tells Handelsblatt

Germany should set funds aside to prepare for a Greek default, Lars Feld, a designated economic adviser to the German government, was cited as saying in an interview with Handelsblatt newspaper.

“I don’t believe that Greece will manage to deal with its debts without a cut,” Feld, nominated by the Cabinet to a five- member panel of economists who advise the government and a professor at the University of Freiburg, was cited as saying. “And then German guarantees will come due.”

http://www.bloomberg.com/news/2011-01-19/germany-should-prepare-for-greek-default-adviser-feld-tells-handelsblatt.html

Nowhere to Hide" from Rising Food Prices

"Corn is a big one" in the higher prices department, Bloomberg Businessweek Assistant Managing Editor Sheelah Kolhatkar told "Early Show on Saturday Morning" co-anchor Betty Nguyen. "The Agriculture Department released a report a couple of days ago about crop forecasts for the year and predicted corn production is going to go down very significantly, which led to a spike in prices."

http://www.cbsnews.com/stories/2011/01/15/earlyshow/saturday/main7249451.shtml

Doom And Gloom

Most Americans may not care, but the food riots that are starting to erupt around the globe are actually very serious.

http://theeconomiccollapseblog.com/archives/doom-and-gloom

10 American Companies That Will Disappear in 2011

Saab USA
Office Depot
Dean Foods
Frontier Airlines
Sara Lee
Borders
Gateway
DollarThrifty
Answers Corp.
E*Trade

http://www.dailyfinance.com/story/investing/10-american-companies-that-will-disappear-in-2011/19798647/

Why supermarket stocks are getting squeezed

Rising food prices mean grocery store chains must absorb extra costs on items like meat, seafood, and produce, or they try to pass them along to customers. But many of those consumers are unemployed or have less money to spend, even on essentials. For now, the big chains are mostly choosing to absorb. As a result, profits are falling, and so are their stocks, making them one of the few dim lights in the market in 2011.

On Tuesday, Supervalu was the first of the grocers to report quarterly results, and the numbers for its fiscal third quarter were ominous: A loss of $202 million, or 95 cents a share, compared with a profit of $109 million, or 51 cents, in the same period a year earlier. The company, which operates Albertsons, Jewel-Osco, Acme and other chains, also cut its forecast for the year.

http://finance.yahoo.com/news/Why-supermarket-stocks-are-apf-904020854.html?x=0&sec=topStories&pos=5&asset=&ccode

The Black Swan Events of 2011?

Remember the sickening plunge in the stock market last spring, May 6, 2010, the mysterious flash crash?

Remember that day? It felt like the markets were in a massive power blackout.

Can it happen again? What are the Black Swan events of 2011, the unpredictable events that can wreak utter chaos in the markets?

http://www.foxbusiness.com/markets/2011/01/14/black-swan-events/?cmpid=cmty_email_The_Black_Swan_Events_of_2011%3F

China's control of rare-earth metals poses risk to U.S. solar future

China's tight control of rare metals may hurt developing domestic solar industries, according to a research director at the National Renewable Energy Lab.

"Folks are looking at, if we don't get it from China, how will we get it?" said Ryne Raffaele, director of the center for photovoltaics at NREL, the U.S. government's premier energy lab. "Can it easily be mined?"

http://www.denverpost.com/news/ci_17108810?source=rss#ixzz1BJ6R5LVx

Next shock will be high food prices

You will pay for all this water. Unless you are insulated from the normal costs of living, you can expect sticker shock at some point this year, or next, when paying for the weekly food shopping. We've had oil shocks. Prepare for food shocks.

Ten years ago, the United Nations Food and Agriculture Organisation's composite world food price index stood at 92. For the month of December it was 215.

The most expensive year on record was 2008, when 60 million people slid into poverty because of higher food costs. There were food riots. Over the past three months, the trend in the FAO's food price index was worse than 2008.

http://www.smh.com.au/opinion/society-and-culture/next-shock-will-be-high-food-prices-20110116-19sen.html

World is 'one poor harvest' from chaos

Like many environmentalists, Lester Brown is worried. In his new book "World on the Edge," released this week, Brown says mankind has pushed civilization to the brink of collapse by bleeding aquifers dry and overplowing land to feed an ever-growing population, while overloading the atmosphere with carbon dioxide.
If we continue to sap Earth's natural resources, "civilizational collapse is no longer a matter of whether but when," Brown, the founder of Worldwatch and the Earth Policy Institute, which both seek to create a sustainable society, told AFP.

http://www.breitbart.com/article.php?id=CNG.999426eed38d24123132435f3d303867.31&show_article=1

'Explosive' Food Prices the Biggest Risk

Overheating emerging markets, in China in particular, pose the biggest threat to the market and political situation in 2011 according to Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

“These economies are clearly overheating and governments are putting measures in place to slow them down to fight inflationary pressure. More than anything else, food inflation is a problem," Gijsels told CNBC.com.

http://www.cnbc.com/id/41089972

5 Simple Ways To Prepare For The Coming Food Crisis

The truth is that we are headed for large food production shortfalls, manipulated or not, while middle-class food demand grows massively in the developing world. For decades the world's agriculture community produced more than enough food to feed the planet, yet some now believe we are reaching "Peak Food" production levels. In turn, other experts believe the "food bubble" is about to burst, and not even the biotech companies can save us.

http://www.activistpost.com/2011/01/5-simple-ways-to-prepare-for-coming.html

Higher commodity prices may spur inflation

Rising wholesale prices for food and energy are putting pressure on manufacturers and retailers to pass higher costs to customers. It's a trend that could raise inflation in the United States and slow economies in Asia and Latin America.

U.S. gas prices have topped $3 a gallon, and grain prices have reached a 2 1/2-year high. Some lawmakers say the increases illustrate the need for tighter limits on speculation in commodities markets.

Airlines, clothing manufacturers and some grocery stores have already raised retail prices. And even those companies that have resisted increases because they worry that customers can't afford them may be more reluctant to hire because of the squeeze.

http://news.yahoo.com/s/ap/20110113/ap_on_bi_go_ec_fi/us_economy%3B_ylt%3DAsYHP_zuePdWDreoVGhnWDGs0NUE%3B_ylu%3DX3oDMTFocGwwZ2V2BHBvcwMyNgRzZWMDYWNjb3JkaW9uX3RvcF9zdG9yaWVzBHNsawNoaWdoZXJlbmVyZ3k-

At Least 10 States Have Introduced Gold Coins-As-Currency Bills

Legislators in at least ten states have introduced bills in the past few years to allow state commerce to be conducted with gold and silver.

As we reported, Georgia state Rep. Bobby Franklin (R) recently reintroduced legislation to force his state to conduct all monetary transactions with U.S. gold or silver coins -- including the payment of taxes.

The Georgia bill has a long way to go before become law -- but it's by no means the only state that's considering a future in gold. Lawmakers in Montana, Missouri, Colorado, Idaho, Indiana, New Hampshire, South Carolina, Utah, and Washington have proposed legislation, mostly in 2009, to include gold and silver in its accepted currency forms.

http://tpmdc.talkingpointsmemo.com/2011/01/at-least-10-states-have-introduced-gold-coins-as-currency-bills.php#

Munis Crashing For Third Straight Day, And This Is The Worst Yet

For three days now, munis have tanked, and this is the worst one yet.

http://www.businessinsider.com/munis-crashing-for-third-straight-day-and-this-is-the-worst-yet-2011-1

S&P, Moody's Warn On U.S. Credit Rating

Investors bought Treasury debt nonetheless, ignoring the comments, which echoed prior statements by the companies and may still be months or years away from having any practical meaning.

"The warning on the U.S. rating is well-founded," said Brian Yelvington, chief fixed-income strategist at Knight Capital. "However, it will probably fall on deaf ears until the peripheral Europe story plays out."

Moody's Investors Service said in a report on Thursday that the U.S. will need to reverse the expansion of its debt if it hopes to keep its "Aaa" rating.

http://online.wsj.com/article/SB10001424052748703583404576079311379009904.html?mod=WSJ_hp_LEFTWhatsNewsCollection  

'Our savings have vanished – we've lost everything'

Police in Bangladesh used tear gas and water canons to disperse angry protests by crowds of small investors after a dramatic free-fall plunge on the country's stock market caused the authorities to suspend trading.

Hundreds of outraged investors took to the streets outside the stock exchange in the Motijheel neighbourhood of the nation's capital after the worst plunge in the country's history saw the Dhaka Stock Exchange (DSE) fall by 660 points, or 9.25 per cent, in less than an hour.

http://www.independent.co.uk/news/world/asia/our-savings-have-vanished-ndash-weve-lost-everything-2181132.html#

Virginia Creates Subcommittee To Study Monetary Alternatives In Case Of Terminal Fed "Breakdown", Considers Gold As Option

In what may one day be heralded as the formal proposal that proverbially started it all, the Commonwealth of Virginia introduced House Resolution No. 557 to establish a joint subcommittee to "to study whether the Commonwealth should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System."

http://www.zerohedge.com/article/virginia-creates-subcommittee-study-monetary-alternatives-case-terminal-fed-breakdown-consid

25 Hard Questions That You Will Not See Asked On CNN, MSNBC Or Fox News

Have you ever noticed how CNN, MSNBC, Fox News, ABC, NBC and CBS all seem to come up with the exact same version of "the truth"? But over the past several years we have seen a great awakening take place. Millions of Americans are sick and tired of being spoon-fed establishment propaganda like a bunch of small children and they are searching on the Internet for alternative media outlets that are asking the hard questions and that are willing to at least explore answers that are not part of "the officially sanctioned" version of the truth.

http://endoftheamericandream.com/archives/25-hard-questions-that-you-will-not-see-asked-on-cnn-msnbc-or-fox-news

Potential For Social Unrest With Rising Commodity Prices –Jim Rogers

Rising commodity prices could trigger social unrest in some countries in the future, says noted commodities investor Jim Rogers.

Supplies for many natural resources low and demand for them high, pushing up prices. Most commodities values from corn to copper saw significant rises in 2010 and prices continue to hold solidly.

http://www.kitco.com/reports/KitcoNews20110112DeC_JIM.html

JPMorgan’s Dimon: More Cities Will Go Bankrupt

Cities including Detroit and Harrisburg, Pennsylvania, have raised the prospect of bankruptcy. Still, the number of filings has declined. Five municipal entities sought protection in 2010 compared with 10 in 2009, according to data compiled by James Spiotto, head of the bankruptcy practice at Chapman & Cutler, a Chicago law firm. The biggest last year was a South Carolina toll road with more than $300 million in debt, he said.

U.S. states will contend with about $140 billion in deficits in the next fiscal year, the Center on Budget and Policy Priorities, a Washington research group, said in a report issued Dec. 16. Edmund “Ted” Kelly, CEO of Liberty Mutual Holding Co., said yesterday that his firm had reduced holdings of municipal debt in Connecticut, California and Illinois.

http://www.moneynews.com/Headline/JPMorgan-sDimonSaysHeExpectsMoreMunicipalBankruptcies/2011/01/12/id/382555?s=al&promo_code=B72C-1

JPMorgan: Surging Food Prices Fueling Global Inflation

Rising food prices are stoking global inflation with many agricultural commodity markets driven higher by bad weather in key producing countries, a senior trader at JPMorgan said.

"If you break down the inflation numbers then the impact of food has been extremely significant," Will Shropshire, head of investor trading, product development and agriculturals for JPMorgan said in an interview.

"Increased prices for key agricultural food components (are) undoubtedly going to have an impact on inflation," he added.

High food prices have moved to the top of policymakers' agendas because of worries about the impact on inflation, protectionism and unrest.

http://www.moneynews.com/StreetTalk/JPMorganSurgingFoodPricesFuelingInflation/2011/01/10/id/382394?s=al&promo_code=B701-1

Downsized! More and More Products Lose Weight

From toothpaste to tuna fish, hot dogs to hand soap, companies have been shaving ounces and inches from packaged goods for years, usually blaming it on rising costs for ingredients and energy. They've got a point: Higher commodity and fuel costs are expected to cause a spike in food prices by as much as 3 percent in 2011. But if manufacturers are skimping when costs go up, why aren't they more generous when costs hold steady or fall?

http://finance.yahoo.com/family-home/article/111735/more-and-more-products-lose-weight

Could the U.S. central bank go broke?

With the U.S. unemployment rate at 9.4 percent and only tentative signs that businesses are beefing up hiring, Fed officials, including Chairman Bernanke, see a duty to prevent a further deterioration of economic conditions -- and have signaled a readiness to use all the tools at their disposal.

Last November, as the economic recovery appeared to falter, the Fed said it would buy a new round of $600 billion in Treasury securities through June of this year. That's on top of the $1.7 trillion in Treasuries and mortgage-backed securities it had purchased in response to the financial crisis.

http://www.reuters.com/article/idUSTRE7096FE20110111?pageNumber=2

Economy facing headwinds, but Bernanke hopeful

Jobless claims hit a 10-week high last week while producer prices shot up in December, pointing to headwinds for an economy that Federal Reserve Chairman Ben Bernanke said was showing fresh vigor.

http://www.reuters.com/article/idUSTRE70A41H20110113

Brazil Threatens Trade War Against US, China

The world is on the road to an all-out trade war unless the United States and China stop manipulating their currencies, says Brazilian Finance Minister Guido Mantega.

China and the United States have been tweaking their exchange rates to gain favorable trade advantages as well as to fuel economic growth, disrupting other nations' exchange rates in the process.

The Brazilian real has strengthened considerably recently, which hurts the country's all-important export sector.

http://www.moneynews.com/StreetTalk/FTBrazilThreatensTradeWarAgainstUS-China/2011/01/10/id/382355?s=al&promo_code=B6EE-1

The Long Swim – How the Fed Could Become Insolvent

You’ve seen the proof in real time. Once-dominant industrial companies, e.g., General Motors, can run out of money. The biggest banks, e.g., Bank of America, can run out of money. Even sovereign governments, e.g., Greece, can run out of money. Yes, all those organizations are still limping along, but only after being rescued by other giant institutions, such as the U.S. government, the less unhealthy European governments, the European Central Bank, and the International Monetary Fund.

http://www.lewrockwell.com/orig11/coxon3.1.1.html

Economists foretell of U.S. decline, China's ascension

To hear a number of prominent economists tell it, it doesn't look good for the U.S. economy, not this year, not in 10 years.

http://www.reuters.com/article/idUSTRE7082BL20110109?feedType=RSS&feedName=businessNews&rpc=23&sp=true

When Will Gold and Silver Go Down?

http://www.24hgold.com/english/news-gold-silver-when-will-gold-and-silver-go-down-.aspx?article=3285831600G10020&redirect=false&contributor=James+West

Soon The Economic Deluge

The international monetary system set up at Bretton Woods in 1944 is on the verge of breaking down. It could still be saved by heroic measures, especially if these were taken in the United States. They would include an immediate slash in projected government expenditures, an immediate balancing of the budget, and a halt in any further increase in the stock of money.

http://www.forbes.com/2011/01/06/dollar-economy-monetary-policy-opinions-contributors-daniel-oliver.html?boxes=Homepagelighttop

7 Reasons Food Shortages Will Become a Global Crisis

Food inflation is here and it's here to stay. We can see it getting worse every time we buy groceries. Basic food commodities like wheat, corn, soybeans, and rice have been skyrocketing since July, 2010 to record highs. These sustained price increases are only expected to continue as food production shortfalls really begin to take their toll this year and beyond.

http://www.activistpost.com/2011/01/7-reasons-food-shortages-will-become.html

Confirmed: We’re Literally On the Brink of Catastrophic Collapse

It’s a Catch 22 and there’s no way out.

Defaulting on or inflating away our debt are the only viable solutions. Both of these will lead to the same end - a complete and total collapse of the way of life Americans have become used to.

Just as Henry Paulson, President Bush, et. al. warned of economic collapse and depression in 2008, Mr. Geithner warns of the very same today. All of the trillions spent, all of the laws passed, and all of the manipulations of global asset markets, have done absolutely nothing to resolve the fundamental systemic problems we faced prior to the onset of the crisis.

It is, quite literally, going to be the end of the world as we know it - and it cannot be stopped.

http://www.shtfplan.com/headline-news/confirmed-were-literally-on-the-brink-of-catastrophic-collapse_01062011

As food costs rise, retailers keep prices stable by shrinking package sizes, quantities

Household brands ranging from Ivory soap to Kraft cheese singles have seen their packages downsized up to 20% over the last few years - even though shoppers are paying just as much, according to a new study by Consumer Reports.

http://www.nydailynews.com/money/2011/01/05/2011-01-05_as_food_costs_rise_retailers_keep_prices_stable_by_shrinking_package_sizes_quant.html

Forecasters’ prediction for oil prices in 2011: Up, up, up

Sanford C. Bernstein & Co., whose estimate last January was within 1 percent of 2010’s mean price of $79.60 a barrel, says crude will average $90 this year. Natixis Bleichroeder Inc., which tied with Bernstein, sees $100 a barrel, 26 percent higher than in 2010. Global oil use will increase 1.7 percent to a record 87.8 million barrels a day this year, and output will rise 0.9 percent, according to the U.S. Energy Department.

http://fuelfix.com/blog/2011/01/03/forecasters-prediction-for-oil-prices-in-2011-up-up-up/

29% Of Americans Say It's Difficult To Afford Food

Affording basic necessities remains a struggle.
51% say it is difficult to afford health care.
48% say the same about their home heating and electric bills.
29% say it is difficult to afford food.

http://www.declineoftheempire.com/2011/01/29-of-americans-say-its-difficult-to-afford-food.html

30 Reasons Why 2011 Is Going To Be Another Crappy Year For America’s Middle Class

Do you think that 2011 will be a good year for America’s middle class? Well, you might not be so optimistic after you read the 30 statistics posted below. The truth is that 2011 is going to be another crappy year for America’s middle class, and there is not a whole lot that you or I can do about it.

http://www.blacklistednews.com/index.php?news_id=12149

Barron's: US Will See Run on Treasurys, Hyperinflation

Investors in U.S. debt around the world are worryingly near a "psychological breaking point" that could force a "run on the bank" against Treasurys.

http://www.moneynews.com/StreetTalk/US-Run-Treasurys-Hyperinflation/2011/01/05/id/381925?s=al&promo_code=B684-1

World Food Prices Surge to Record

World food prices rose to a record in December on higher sugar, grain and oilseed costs, the United Nations said, exceeding levels reached in 2008 that sparked deadly riots from Haiti to Egypt.

An index of 55 food commodities tracked by the Food and Agriculture Organization gained for a sixth month to 214.7 points, above the previous all-time high of 213.5 in June 2008, the Rome-based UN agency said in a monthly report. The gauges for sugar and meat prices advanced to records.

http://www.bloomberg.com/news/2011-01-05/global-food-prices-climb-to-record-on-cereal-sugar-costs-un-agency-says.html

It's Not Your Imagination: Your Juice Has Been Downsized

According to research from Consumer Reports, many companies have been shrinking the size of the products you buy, while charging the same amount for the product.

http://www.cnbc.com/id/40909380/

TARP deadbeats pose major problems

http://www.fiercefinance.com/story/tarp-deadbeats-pose-major-problems/2011-01-01?utm_medium=nl&utm_source=internal

European nations begin seizing private pensions

The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). In this extortionate way, the government wants to gain control over $14bn of individual retirement savings.

http://www.csmonitor.com/Business/The-Adam-Smith-Institute-Blog/2011/0102/European-nations-begin-seizing-private-pensions

DUDE, WHERE’S MY JOB?

The storyline being sold to the American public by the White House and the corporate mainstream media is that the economy is growing, jobs are being created, corporations are generating record profits, consumers are spending and all will be well in 2011. The 2% payroll tax cut, stolen from future generations to be spent in 2011, will jumpstart a sound economic recovery. Joseph Goebbels would be proud.

http://www.theburningplatform.com/?p=8936

U.S. foreclosures jumped in the third quarter

About 470,000 homeowners received help either directly from banks or through government programs in the July-September quarter, according to a report released Wednesday by the Office of the Comptroller of the Currency and Office of Thrift Supervision. That's a 17 percent drop from the previous quarter and a decline of 32 percent from the same period last year.

http://www.msnbc.msn.com/id/40840683/ns/business-real_estate/

Grain Prices Heading Higher In 2011 On Tight Supplies

Prices for grains other agricultural commodities will probably continue rising in 2011 as “precariously balanced” fundamentals and a La Nina phenomenon contribute to wide price swings, Rabobank analysts said.

Corn, soybeans and coffee hold the most potential upside among about 10 commodities, Rabobank Agri Commodity Markets analysts led by Luke Chandler said in a Dec. 21 report. While corn, soybean and wheat supplies appear sufficient for the time being, record crops are likely needed next year to keep inventories from tightening further.

http://www.cattlenetwork.com/Article.aspx?oid=1293601&publishdate=2010-12-22&urltitle=Grain-Prices-Heading-Higher-In-2011-On-Tight-Supplies--Rabobank-Says&tid=Archive

Energy, agriculture, gold and silver bullion - protectors from the coming crisis

The Gold Report: Much has happened since our last discussion in September. The election, with the Republicans taking the House and the super majority in the Senate. QE2 (quantitative easing) not only discussed but actually released. The U.S. assisting in the financing in Europe. The benefactors of the 2008 bailout money finally published. And then the hottest topic in Washington for a while, extending the Bush tax credits along with an Obama unemployment tax credit. Have any of these developments changed or firmed your opinion of the U.S. economy or the international monetary crisis?

http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=117559&sn=Detail&pid=72068

Lehman 'prophet' fears second crisis if US interest rates are kept low

America is storing up a second financial crisis by keeping interest rates at record low levels, according to David Einhorn, the hedge fund manager who first publicly warned about the financial catastrophe facing Lehman Brothers.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8224338/Lehman-prophet-fears-second-crisis-if-US-interest-rates-are-kept-low.html

Outraged Yet? What if Fed Buys Munis?

California’s delay of a $10 billion municipal bond sale has only fueled existing chatter on trading floors that the Federal Reserve would take the extraordinary step of buying these securities just as it has with Treasuries.

http://www.cnbc.com/id/40259606

111th Congress Added More Debt Than First 100 Congresses Combined

The federal government has accumulated more new debt--$3.22 trillion ($3,220,103,625,307.29)—during the tenure of the 111th Congress than it did during the first 100 Congresses combined, according to official debt figures published by the U.S. Treasury.

That equals $10,429.64 in new debt for each and every one of the 308,745,538 people counted in the United States by the 2010 Census.

http://www.cnsnews.com/news/article/111th-congress-added-more-debt-first-100

Naked emperor and a conspiracy of silence

America's competitors have seen the erosion of American power as if through a time-lapse camera, and they don't like it at all. Obama's self-shrinkage of American influence may give us a civil war in Iraq, a new Israeli-Hezbollah war in Lebanon, a nuclear-armed Iran, a replay of the Cuban missile crisis in Venezuela, an unshackled rogue state in North Korea, an ungovernable Pakistan, and - worst of all - another American recession as the US Treasury struggles to fund a government deficit in excess of 12 percentage points of gross domestic product.

http://www.atimes.com/atimes/Middle_East/LL23Ak04.html

Quantitative Easing 2 as Projected and Announced

http://www.financialsense.com/contributors/bud-conrad/quantitative-easing-two-as-projected-and-announced

The US Economy Is A Complete Horror

It details the depths of the crisis the U.S. economy is truly facing, including its massive debt problem, the declining value of its currency, the unemployment crisis, and the housing crisis.

http://www.businessinsider.com/jeff-gundlach-doubleline-2010-12

Control Government Spending or Face 'Apocalyptic Pain'

"Apocalyptic pain" from an out-of-control debt could cause 18 percent unemployment and a massive contraction in the economy that would destroy the middle class, a leading Republican deficit hawk said in an interview that aired Sunday.

http://www.foxnews.com/politics/2010/12/26/coburn-control-government-spending-face-apocalyptic-pain/?test=latestnews

'We the people' to open next Congress

The Constitution frequently gets lip service in Congress, but House Republicans next year will make sure it gets a lot more than that - the new rules the incoming majority party proposed this week call for a full reading of the country's founding document on the floor of the House on Jan. 6.

http://www.washingtontimes.com/news/2010/dec/23/we-the-people-to-open-next-congress/

Citigroup fears fresh wave of sovereign defaults and bank failures in eurozone

Citigroup has warned of a fresh wave of bank failures and a string of sovereign defaults in Europe unless EU leaders come up with a credible response to the crisis.


http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8217505/Citigroup-fears-fresh-wave-of-sovereign-defaults-and-bank-failures-in-eurozone.html

$2tn debt crisis threatens to bring down 100 US cities

More than 100 American cities could go bust next year as the debt crisis that has taken down banks and countries threatens next to spark a municipal meltdown, a leading analyst has warned.

US states have spent nearly half a trillion dollars more than they have collected in taxes, and face a $1tn hole in their pension funds, said the CBS programme, apocalyptically titled The Day of Reckoning.

"There's not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizeable defaults – more. This will amount to hundreds of billions of dollars' worth of defaults."

http://www.guardian.co.uk/business/2010/dec/20/debt-crisis-threatens-us-cities

Mortgage deduction: A sacred cow whose time is up?

Perhaps the most sacred of all the sacred cows in the tax code, the home mortgage deduction has long been seen as critical to a major element in the American dream — owning your own home. It's also a boon to home builders, construction workers, the financial services industry and local governments that benefited from fatter real estate tax revenue.

But after nearly a century, the mortgage deduction may face a day of reckoning. Though out of the spotlight for the moment while the lame-duck Congress thrashes to an end, the mortgage deduction issue is likely to resurface next year when new representatives — including a lot more deficit-hawk Republicans — take their seats.

http://www.baltimoresun.com/news/sc-dc-adv-home-mortgage-deuction-20101219,0,2988379,full.story

Killing the penny makes little cents in digital world

The recommendation last week from the Senate finance committee that Canada eliminate the pesky penny may seem like a no-brainer when you consider its shrinking value, but getting rid of it is likely to create a bigger problem than the one our un-elected senators are trying to solve.

Earlier this year the committee was charged with investigating the penny's usefulness, because the cost to produce it now exceeds its actual value. During hearings, representatives from the Bank of Canada, industry, consumer groups and charities all told the committee that they wouldn't miss the penny if it were discontinued.

That problem is hoarding. According to the Bank of Canada there are a staggering 20 billion pennies in circulation. Unfortunately the vast majority are sitting in piggy banks, ice cream pails (I've got one of those) and other assorted containers instead of earning their keep.

http://www.calgaryherald.com/business/Killing+penny+makes+little+cents+digital+world/4007089/story.html

Prices soar as investors rush for commodities

COMMODITY prices are breaking records in an investment stampede inspired by extreme weather, demand from China and rising speculation.

The price surge is sweeping almost all commodity markets -- both minerals and farm goods -- and raises the prospect of government and Reserve Bank forecasts proving conservative

http://www.theaustralian.com.au/business/markets/prices-soar-as-investors-rush-for-commodities/story-e6frg91o-1225975188123

Massive Selling of US Currency Lies Ahead

John Williams today was dispatching information regarding gold, silver, M3, nearby massive selling of dollars and inflation. Here is a portion from his commentary, “Despite November 9th’s historic high gold price of $1,421.00 per troy ounce (London afternoon fix) and the multi-decade high silver price of $30.50 per troy ounce (London fix) on December 7th, gold and silver prices have yet to approach their historic high levels, adjusted for inflation.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/12/15_John_Williams_-_Massive_Selling_of_US_Currency_Lies_Ahead.html

Debt Pyramid Scheme Now the Norm in U.S.:

The tax compromise that the president, after protracted bargaining with Congress, signed into law Friday represents the worst of each party’s principles. Democrats agreed to forgo their insistence on raising taxes to narrow the widening budget deficit. Republicans forgot (again) that they are supposedly the party of smaller government.

http://www.bloomberg.com/news/2010-12-20/debt-pyramid-scheme-now-the-norm-in-u-s-commentary-by-roger-lowenstein.html

Director of United States Mint Resigns

Washington, DC-Director of the United States Mint Edmund C. Moy announced today that he has submitted his resignation to President Barack Obama. He also informed Secretary of the Treasury Timothy Geithner and Treasurer of the United States Rosie Rios of his resignation, effective January 9, 2011. Moy has accepted a position in the private sector.

http://www.usmint.gov/pressroom/index.cfm?action=press_release&ID=1190

Public Pensions Face Underfunding Crisis

An analysis by Robert Novy-Marx of the University of Rochester and Joshua Rauh of the Kellogg School of Management finds that public pension plans for America's 50 biggest cities and counties are underfunded by $382 billion--or $14,000 for every household in those same cities. Some of the biggest plans may run out of money to pay promised benefits in as little as five to eight years.

http://abcnews.go.com/Business/city-pensions-americas-50-biggest-municipal-pension-shortfalls/story?id=12366160

Doomsday for the US Dollar: Post Mortem for the World's "Reserve Currency"

Paul Volcker is worried about the future of the dollar and for good reason. The Fed has initiated a program (Quantitative Easing) that presages an end to Bretton Woods 2and replaces it with different system altogether. Naturally, that's made trading partners pretty nervous. Despite the unfairness of the present system--where export-dependent countries recycle capital to US markets to sustain demand---most nations would rather stick with the "devil they know", then venture into the unknown. But US allies weren't consulted on the matter. The Fed unilaterally decided that the only way to fight deflation and high unemployment in the US, was by weakening the dollar and making US exports more competitive. Hence--QE2.

http://www.globalresearch.ca/index.php?context=va&aid=22402

16 Reasons Why California Is The Next Greece

http://www.businessinsider.com/why-california-is-the-next-greece-2010-05#california-has-a-20-billion-budget-gap-despite-last-years-ravaging-cutbacks-1

16 Nightmarish Economic Trends To Watch Carefully In 2011

A Scary Thought Provoking List

http://endoftheamericandream.com/archives/16-nightmarish-economic-trends-to-watch-carefully-in-2011

Citigroup: Dollar May Drop 11 Percent in 2011 as Treasurys Fall

The dollar may drop 11 percent versus the euro next year as investors shun U.S. assets and drive bonds lower, according to Citigroup Inc.

“It’s a bearish U.S. asset dynamic led by the bond market,” Tom Fitzpatrick, chief technical analyst, said in a telephone interview. “This period has a set-up that is amazingly like what we saw in the ‘70s, and is similar to what we saw around 1993.”

The dollar will follow trading patterns from the 1970s, when the housing market experienced a decline similar to the recent drop, and the 1990s, which also saw a slump in the bond market, technical analysts led by New York-based Fitzpatrick wrote in a note to clients. U.S. two-year yields doubled from a low of 3.7 percent in September 1993 to a high of 7.7 percent in December of 1994, pushing bond prices lower.

http://www.moneynews.com/StreetTalk/Citigroup-Dollar-Drop-2011/2010/12/15/id/380047?s=al&promo_code=B4DA-1

General Mills to raise prices

Starting Jan. 3, General Mills /quotes/comstock/13*!gis/quotes/nls/gis (GIS 36.38, +0.00, +0.01%) plans to raise prices by up to 3% on everything from its frozen vegetables to hot snacks, a move intended to offset commodity inflation and to strengthen gross margins that have taken a hit from price wars. In November, the Minneapolis-based company raised some cereal prices.

http://www.marketwatch.com/story/general-mills-profit-rises-on-tax-benefit-2010-12-16

Inflation surges at record pace in December

Inflation accelerated in December at a record pace, prompting worries that interest rates might rise sooner than expected, though the surge was largely due to an unflattering comparison with a year earlier. The jump left markets keenly eying a speech due later from central bank governor Mervyn King for signs of the impact on the bank's medium-term inflation outlook, but most were still upbeat on the chances of inflation eventually coming back to target.

http://news.stv.tv/business/151359-inflation-at-9month-high-in-december/

Food prices rise sharply - and there's more to come

Grocery prices grew by more than 1 1/2 times the overall rate of inflation this year, outpaced only by costs of transportation and medical care, according to numbers released Wednesday by the U.S. Bureau of Labor Statistics.

But it makes sense. Since November 2009, meat, poultry, fish and eggs have surged 5.8percent in price. Dairy and related products have gone up 3.8 percent; fats and oils, 3 percent; and sugar and sweets, 1.2 percent.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/12/16/MN571GQRDL.DTL

Interesting Junk Silver article by Ol' Remus

It's doomsday plus a few weeks. Say you need to bribe the border guards at the state line but they seem to have all the wristwatches and free range eggs they can use. Hah! There's nothing like a few good ol' silver coins to become their number one tourist, let this man through. Or your gas station's not accepting Visa and the ATMs have gone dark from sea to shining sea and you've got a hard to get reservation at a fallout-free retreat. Hah! Dazzle 'em with the sheen of silver my friend, fill 'er up and happy motoring to you.

http://woodpilereport.com/html/index-194.htm

Derivatives: The Quadrillion Dollar Financial Casino Completely Dominated By The Big International Banks

The New York Times has just published an article entitled "A Secretive Banking Elite Rules Trading in Derivatives". Shockingly, the most important newspaper in the United States has exposed the steel-fisted control that the big Wall Street banks exert over the trading of derivatives. Just consider the following excerpt from the article....

http://theeconomiccollapseblog.com/archives/derivatives-the-quadrillion-dollar-financial-casino-completely-dominated-by-the-big-international-banks

Water, Meet Blood - JP Morgan Admits To, Reduces Massive Silver Short Position, Proves Millions Of Conspiracy Theorists Correct

JPMorgan was an attempt to deflect public criticism of the bank’s dealings in silver, a person familiar with the matter said. The person added that the bank’s position in silver would from now on be “materially smaller” than in the past." Of course, the latter is pure and total bullshit: as Bart Chilton indicated over the weekend, it is JP Morgan who at one point or another (and possibly very recently) controlled as much as 40% of the silver market, via a massive short.

http://www.zerohedge.com/article/jp-morgan-admits-defeat-cuts-silver-short-position-proves-millions-conspiracy-theorists-abso

Market alarm as US fails to control biggest debt in history

US Treasuries last week suffered their biggest two-day sell-off since the collapse of Lehman Brothers in September 2008. The borrowing costs of the government of the world’s largest economy have now risen by a quarter over the past four weeks.

http://www.telegraph.co.uk/finance/comment/liamhalligan/8196283/Market-alarm-as-US-fails-to-control-biggest-debt-in-history.html

Gold, silver and copper hit record highs on fears of weakening dollar

Gold reached an intra-day high of $1,432.50 an ounce, an all-time record, before profit takers moved in. Silver futures hit $30.75 - the highest level since March 1980 - before easing in afternoon trade.

In an interview on Sunday night on US television, Ben Bernanke, the Federal Reserve chairman, hinted that the central bank may launch further asset purchases to prop up the ailing US economy, although he also said that "it doesn't seem likely" that the economy would fall back into recession.

Copper prices also rose to a record in London on Tuesday, with futures for three-month delivery rising to $9,044 a tonne in intraday trade, beating the previous high of $8,966 set on November 11. Fears are mounting of a future copper squeeze as demand is soon expected to exceed supply.

http://www.telegraph.co.uk/finance/newsbysector/industry/mining/8187488/Gold-silver-and-copper-hit-record-highs-on-fears-of-weakening-dollar.html