By Eldon Mast, on April 13th, 2010
Last year’s stimulus package included a program for states and municipalities entitled “Build America Bonds.”
The U.S. Treasury announced that so far it is on target to save those local governments $12.3 billion in borrowing costs with federally subsidized taxable bonds already sold during the first year of the program.
Since the stimulus passed last April, the Treasury has helped state and local governments sell $90 billion of these bonds to assist their jurisdictions with new liquidity to fund their local projects.
While most government agencies traditionally issue tax-exempt bonds, the Build America Bonds are taxable bonds with a 35 percent federal subsidy on interest costs. This means that a jurisdiction ultimately pays much less in interest to provide the same capital improvements or service upgrades to their constituents.
Denver Water which was one of the first agencies to take advantage of the program in order to effect need upgrades to the Denver water system. Chips Barry, manager of Denver Water stated that they were “pleased to be able to sell bonds at a very reasonable rate in the current market environment. For ratepayers, this means we are able to keep costs as low as possible while providing us the funding to improve our system.”
California issued seven of the top 10 bond deals according to analysis of Treasury Department data. The state also issued roughly one-quarter of the $90 billion worth of bonds since last April. Most of the bonds issued by the sunshine state are now in the midst of funding transportation and educational improvements.
“People originally said it would eliminate the issuance of municipal bonds,” says John Cummings, who is head of muni-bond investments at money-management firm PIMCO. “Instead they have stabilized the market and helped to create jobs.“
By Trace Mayer, on April 13th, 2010
The exciting news from the CFTC gold and silver hearings seem to have coinincided with the predictable gold move. The past six months have had tremendous events and it appears black swans are flying in flocks. Now the gold price appears poised to reach my earlier predictions but this may not be easily played for profit. 
EARLIER PREDICTIONS
With gold trading around $995 on 9 September 2009 in Gold Party Barely Started I wrote, “This puts $1,300 gold and $25 silver within range without greatly exceeding previous trading norms”.
Slightly later on 9 October 2009 with gold below $1,050 I was interviewed on BNN:
BNN HOST: You said the credit crisis has not been calmed but intensified. Why? … So as we get more and more concerned with the top of that pyramid, the derivatives play, you are talking about $1,300 bullion. How do you get to that figure?
TRACE: $1,300 bullion comes from looking at the 200 day moving averages and where gold has consolidated and where it goes based on the usual uplegs. It looks like we are following the same thing that happened in 2004 with the rise in 2005, the consolidation in 2006, which went to the rise in 2007, and the consolidation in 2008, and it looks that it will lead to a similar rise in 2009 and 2010 which will take gold to $1,300 which should be a little bit above its 200 day moving average. But in the same trading ranges as we saw in 2005 and 2007.
SIX MONTHS OF BLACK SWANS
In the last six months many important events have transpired. The credit crisis intensified with CIT, Dubai and looming sovereign defaults. Commercial real estate is still frozen and about $600B needs to be refinanced during 2010. Massive fraud is being revealed on a grand scale such as with the 2,000+ page report on Lehman brothers. Greece is holding the Euro-zone hostage while Russia, as usual, most likely mass executed their political opposition. The spread between 2 and 10 year Treasuries has been getting omnious at highs not seen since the early 1980’s. Haiti and Chile rocked out. Civil unrest is increasing throughout the world from Bangkok to Paris. And to cap it off the CFTC gold and silver hearings led to some amazing convergence of opinions between Christian and GATA.
However, I did slightly jump the gun on timing as this late Jan 2010 chart shows.
 The consolidation lasted longer than I anticipated. But that only leads to greater strength for the upleg. And given the past events in the last six months, any of which could lead to chaotic fingers of instability, I would rather be a little early than a little late.
I still think the probability of $1,300 gold in Q2 is very probable while $25 silver may not be so likely; although there will likely be good returns in the white metal. Of course, I still like platinum and the current gain is about $600/ounce from when I recommended buying platinum.
JEFFERY CHRISTIAN’S DANGEROUS IDIOICY
Zero Hedge did an excellent analysis of Jeffery Christian’s interview on Financial Sense Newshour. Because Whiskey and Gunpowder recently featured my article Survivialism In The Suburbs and it stirred up some good discussion I thought I would hone in on some of Christian’s comments that have been lost in the kerfuffle.
Mr. Christian said, “If you look at fishes and loaves of bread, the ratio of derivatives transactions to physical underlying it’s 5 to 1; if you look at aluminum or copper it is about 15 to 1.” During his CFTC testimony he downplayed the implications of shortages, “Another thing is that there are any number of mechanisms allowing for cash settlements”.
CASH SETTLEMENTS AND EMPTY BELLIES
Using Mr. Christian’s logic about always being able to use cash settlements instead of delivery is ludicrous. How helpful is cash settlement of commodities for the people in Haiti and Chile? But then again, Mr. Christian is from Goldman Sachs and their CEO thinks they are ‘doing God’s work’. But last I checked while one can eat cash, like they can eat gold, neither are very nutritious.
Government deficits are generally funded by inflation. Inflation is used as a weak excuse for ineffective price controls. Price controls lead to shortages. These artificial, yet real, shortages lead to rationing. If shortages are too acute and in this case if the Federal Reserve is unable to turn their colored coupons or derivatives into actual physical loaves and fishes, like Jesus did, then the shortages can and will lead to starvation and death.
The attempt by government to disable the chief numeraire to mask the effects of inflation indirectly acts as a price control on all goods and services; particularly raw materials such as commodities which should be viewed as competing currencies. This treasonous policy is fraught with tremendous societal risk. While no one knows precisely how it will play out; my gold chips are on the outcome that it will not end well.
GATA warned about this in the WSJ advertisement:
The objective of this manipulation is to conceal the mismanagement of the U.S. dollar so that it might retain its function as the world’s reserve currency. But to suppress the price of gold is to disable the barometer of the international financial system so that all markets may be more easily manipulated. This manipulation has been a primary cause of the catastrophic excesses in the markets that now threaten the whole world.
A LIFE HEDGE
As a basic life hedge I recommend a three month supply of food and a 72 hour kit. These will provide protection against the vast majority of probable scenarios. Just to be clear, for the extremely dense ones, I recommend taking physical possession of the food and not relying on another institution who engages in fractional reserve food storage at a 100:1 or even 5:1 ratio. When I am hungry I do not appreciate a waiter’s promise of cash settlement instead of my giant steak.
For the truly risk averse who want to ensure the safety of their family then what is the 72 hour kit for? To get somewhere else; like a cabin or for the lazy and social: La Estancia De Cafayate. As with everything just weigh the risk and probability, perform your value calculation and implement your decision. We all have different risk preferences; for example some people want meteorite insurance but I do not.
CONCLUSION
The entire worldwide financial and economic system is a Ponzi scam and will evaporate. No one knows how this will play out but those who are farsighted and understand the Austrian school of economics know this is extremely serious. I was in Chile a few weeks before the massive earthquake. Upon small hinges the wide arc of our lives turn.
The massive imbalances in the gold and silver markets and the entire worldwide economy will not be quickly corrected nor easily played for profit. Too many adhere to the cult of government for that to happen quickly and without too much disruption. But Daybreakers is a good primer so simply be prepared with every needful thing. Tell me, what do you think?
DISCLOSURES: Long physical gold, silver and platinum with no interest in the problematic SLV, Streettracks Gold ETF Trust Shares or the platinum ETFs.
By B.P.T., on April 13th, 2010
At 7:45 AM EDT, the weekly ICSC-Goldman Store Sales report will be released, giving an update on the health of the consumer through this analysis of retail sales.
At 8:30 AM EDT, the International Trade report for February will be released. The consensus is a deficit of $39 billion, which would be a increase of $1.7 billion over January. Weaker oil prices in that month are expected to be offset by increases in consumer spending and corporate investments.
At 8:55 AM EDT, the weekly Redbook report will be released, giving us more information about consumer spending.
Also at 8:30 AM EDT, the monthly Import and Export Prices index for March will be released, providing some data that can be used to monitor the threat of inflation.
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By Richard Daughty, on April 12th, 2010
I am happy to note that the Tea Party, which appeals to me personally, is gaining traction and power, which adds more political overtones to my life and gets me, a shameful Republican, away from the loathsome Republicans (except Ron Paul), which have acted almost as despicably as the Democrats.
I cheerfully denounce them all with a snotty, disrespectful tone in my voice and a condescending sneer on my lips, also an indicator of disrespect, because I am a guy who has spent a lifetime reading about what happens when governments try this “increasing the money supply” crapola that, since the 1960s, the Democrats made into a political mainstay and the Republicans went “grudgingly” along with it, and I am, in a word, horrified and disgusted.
The truth is that I am now continuing to write, as after writing that last horrific sentence about “increase the money supply”, I took the rest of the morning off to think about it, hopefully to calm my shattered nerves. Now I am back at work after discovering that I am more, much more than horrified, and instead am in a Raging Mogambo Snit (RMS) because, according to Fox News, “Sen. Max Baucus, D-Mont., chairman of the influential Finance Committee” said that the “overhaul” of the healthcare system was “an ‘income shift’ to help the poor”, which is not what I am angry about because it’s exactly true, else why do it? So you can’t fault him for saying what is true! Hahaha!
However, I can fault Senator Baucus for just being a typical laughable-yet-loathsome modern Democrat, entirely emblematic as he is of the egotistical big-hearted people who love, and live to love, and love to live to love, and who think that the Beatles were right when they sang “All you need is love”, and use their arrogant “more-compassionate-than-thou” conceit as a bloody bludgeon to beat into submission common sense, economics, the entire history of fiat currencies, and the eternal problem of what to do with the poor people, the crippled people and the old people.
The part that really makes me despise Democrats slightly more than I despise Republicans is that Democrats ridiculously try to “help” the poor by tearing down the only system that has been shown to actually help the poor; namely, supplying them with jobs and keeping consumer prices from rising, but instead – wonderfully! – prices gently come down so that the poor have a rising standard of living because their money buys more.
“And what could such a wonderful system be?” you ask, unable to believe your ears. I reply, “It’s what you automatically get from a system of free enterprise powered by a stable money supply. It works like magic! It always has! It always will!”
Instead, the Federal Reserve will be forced to create so Monstrously Much Money (MMM) to finance a cancerously enlarging government to drown us in total debt, and thus continuously, massively enlarge the monetary base, which must make prices rise and rise continuously, prices which the poor can’t afford to pay and which makes them poorer, which makes Congress borrow and spend more money, which makes the money supply rise and rise, with prices always rising and rising as the monetary base gets larger and larger, round and around, whirling and twirling, spinning, spinning, spinning until you fall to the ground, crying out, dramatically, “Noooooo! More money only creates, paradoxically, more poor working people to add to the huge existing population of poor people because wage increases always lag price increases!”
Senator Baucus does not acknowledge my scorn or compliment me on my fine acting performance, and I hope everyone noticed how he would not meet my gaze, either, and instead lamely talks about “income mal-distribution” by saying that “Wages have not kept up with increased income of the highest income in America”, like this is some kind of news to him or something.
To this I say, “Hahahaboohoohoohahahaboohoohaboohaboohaha!” which shows that I am laughing and crying, and then laughing, and then crying, and then laughing, and then crying while laughing at the sheer idiocy of it, which proves that it must be idiotic for me to be laughing that way, QED.
Then, to show that he is a true Democrat, he says, “This legislation will have the effect of addressing the mal-distribution of income in America”, although he did not elaborate by saying, “by taking it away from somebody richer and giving it to someone poorer” and he did not say, “it will be paid for with fiat money created by the Federal Reserve so that Congress can borrow and spend it” and he did not say, “this unprecedented avalanche of new money will monstrously drive up prices paid by the poor, making them much, much poorer and angrier” but he could have and he should have.
Apparently, though, Senator Baucus is kind of stupid, as he does not understand that when a government deficit-spends, it does so by borrowing the money, but since the poor don’t have any money to loan to the government, the rich end up borrowing the money to loan to the government, whereupon the rich, over time, get all their money back, plus interest, making them richer, while, unfortunately, the poor get poorer because prices have risen.
All of these things he could have said, and he might as well have said, as it is all there in black and white at Mises.org, or it should be, and might well be!
And while neither he nor Mises.org said to buy gold, silver and oil as protection against this sheer economic idiocy and insanity, they might as well have, and while I cannot imagine either of them saying, “Whee! This investing stuff is easy” I certainly will! Whee!
Stable Money Supply: The Real Way to Help the Poor originally appeared in the Daily Reckoning.
By Ajay Shah, on April 12th, 2010
India has long operated a `silo system’ where the financial industry was sought to be broken up into vertical silos associated with regulatory agencies. The word `regulation’ is relatively little understood in India. Instead, there has been a central planning notion of comprehensive `control’ of a given financial firm vesting in a given regulator, so that a somewhat feudal arrangement prevails in each silo.
This is not how an efficient financial system works. As Percy Mistry’s report says, in the future, government needs to to reorganise itself to fit the regulatory requirements of a sophisticated financial system, instead of trying to force financial firms to reorganise themselves to fit the almost accidental regulatory architecture that prevails in India today.
In recent years, many changes in finance have hinged on breaking the strictures of this silo system. Two success stories that come to mind include ETFs on gold and currency futures.
In this setting, we have a big new development in across-silo thinking: an order by SEBI against insurance companies selling mutual-fund-like products without being regulated as mutual funds are. [pdf]
We need the Financial Stability and Development Council (FSDC) yesterday.
By Claus Vistesen, on April 12th, 2010
After a week where the deck of cards that make up the Eurozone got its so far largest jolt and where there is now not only an imminent danger of a total economic collapse in Greece but also, much more worryingly, signs that Germany herself are beginning to tire of a common monetary union I thought it would be nice to take a longer term and structural perspective on the global economy. And what better way to do this than to dig into the world of academia.
As some of you may know I recently earned my degree from the Copenhagen Business School and on that occasion I also produced a thesis which I’d like to share here.
This thesis is built upon two core arguments. The first is the notion that the demographic transition should be narrated through the perspective of ageing rather than population growth and the second is that ageing on a macroeconomic level represents a strong driver of international capital flows. These two arguments are used to discuss the standard prediction in a life cycle framework that ageing leads to dissaving in the aggregate and thus how old economies should tend towards running current account deficits. Using Japan and Germany as the subjects of analysis, this thesis develops the idea that rapidly ageing societies are not, in the main, characterized by dissaving but rather by the fight against it. Finally, a small empirical exercise acts as a perspectivation on the results to suggest why ageing might lead to a reliance on exports and foreign asset income to achieve growth and what this means in a global context.
In many ways, the ideas, thoughts and arguments that have gone into this work are shaped by the discussions and the activity here at this space and my interaction with the people I have come to know through my online presence. In this way, it is only apt that I present it here I think.
I believe that works such as this (and any other academic/economic piece of research) should be judged on two separate accounts. One is its contribution to the methodology, discourse and lingo of its specific academic field which in my case is international macroeconomics and the second is on its contribution to the more market and policy oriented aspect of its topical sphere which in this case is the international economy and in particular global current account imbalances. I believe my thesis has something to offer on both accounts.
On the first, I will immediately disappoint the purists in announcing that my thesis does not develop a new model although I believe there are clear pathways from the arguments for anyone who likes to tinker with neo-classical modelling. In stead, I think there are two important points that I would like to emphasize as future reference and working points for my academic colleagues.
The first is that economists need a much more broad and dynamic theory of demographic changes than is the original idea of a demographic transition. In my thesis I present this through an attempted coup de grace of the notion that demographic changes should be seen through the perspective of population growth. As an alternative I propose a focus on population ageing. In itself this is not controversial and is already an inbuilt narrative in many (if not most) macroeconomic studies that deal with demographic change [1]. However, my aim here is more fundamental. What I consequently want to establish is the simple fact that the demographic transition is not over and not only that, it is non-linear and path dependent. Once we realize this, it opens up a whole new area of research in which macroeconomics is fused with anthropology and life course theory (sociology) in a way which I believe is crucial in order to truly understand what the macroeconomy, as we tend to call it, actually is.
Second, I raise and discuss the issue of dissaving as a function of old age. Specifically, I imply (although I do not show formally) that what may appear obvious on the microeconomic level may not be so obvious on the macroeconomic level. In other words, there is a an aggregation problem [2] here and it is exactly tied to the fact that while dissaving may seem imminently rational and inevitable in a microeconomic perspective it is not all obvious to me why societies as a whole should want to dissave in the context of persistently low fertility rates and rapid population ageing. Realizing that dissaving will at some point be a binding constraint for e.g. an economy such as a Japan in which ageing simply continues relentlessly, I develop the idea that rapidly ageing societies are not, in the main, characterized by dissaving but rather by the fight against it which has come to represent the key proposition of my thesis. I show this in relation to Germany and Japan as the two oldest economies in the world and try to build frame of reference on which to examine and judge other economies who will inevitably move in the same direction as these two economies.
Finally, and on the second overall account it is with no hesitation whatsoever that I claim how my thesis goes a long way to frame the Gordian knot currently facing the global economy as it exits its worst recession since the great depression. In short, if ageing economies find it difficult to create growth based on domestic demand and momentum and if they are reluctant to rapidly dissave into a very uncertain future where they would rely on foreign credit, the logical consequence is that they must be dependent on exports to grow. Now, the onset and path of this export dependency may vary from country to country, but in a world where all economies are ageing and where, worryingly, a large host of economies are converging to very low levels of fertility, it creates an obvious and practical problem. Who is going to run the deficits to match the desired level of savings of all these ageing economies?
Naturally, not everybody can export at the same time but just take a look at the discussions currently characterising the global economy. Everyone who is claiming a recovery is claiming one on the basis of growth in external demand, but this obviously cannot be true. So, you get the trade wars between China and the US, you get internal squabbles in the Eurozone over whether Germany should sacrifice its competitiveness and just how Greece, Spain etc are suppose to pay down their debt while seeing some form of growth at the same time. All this is about a lot of economies feeling the real and future pressure of deleveraging while only a few brave souls dare to proclaim that they seek growth through domestic sources. Something has to give and one obvious result will be lower trend growth quite simply because there will be lower accumulation of debt either because the capacity to pay off debt has shrunk or because the current level of liabilities disallows any further rapid debt accumulation. However, another consequence will also be an externality represented this higher level of desired external savings present in so many economies at the same time and behind it all, as a the underlying current, I believe is demographic change and how it affects the working of modern capitalist systems.
So, am I going for an early catch of the nobel here?
Hardly and thus the thoughts above represent my attempt to take the conclusions of my work as far as possible (and possibly way too far) on an overall conceptual level. Consequently, if you care to leaf through the thing, you will see lots of concrete empirically rooted points and arguments which are more down to earth than the barrage you have just worked your way through above.
In the end and because of my desire to continue my studies on a PhD level, I have (unconsciously I think) written my thesis with an open end and with many strings that can and should be picked up later. This is naturally what I hope to do in the future. For now, I invite you to have a look and by all means do not read it all, but you may just find some it interesting. Comments of all kinds are naturally welcome.
—
[1] – After all, it goes back to the idea of a life cycle and more formally the notion of overlapping generations which are two classic methodological concepts in macroeconomics.
[2] – Aggregation problems are not new of course and have haunted macroeconomic representative agent modelling for a long, long time. However, I think that the specific issue in the context of the life cycle in many ways represent the original sin in the context of aggregation problems (but I may be wrong here).
By B.P.T., on April 12th, 2010
At 2:00 PM EDT, the Treasury budget for March will be released. The consensus is a deficit of $62 billion, after a deficit of $220.9 billion due to spending on stimulus projects and TARP outlays. Historically, the U.S. Treasury has run an average deficit of $108 billion over the last 10 years, so if the deficit is near the consensus, it will actually be unusually low.
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By Richard Daughty, on April 9th, 2010
I was rudely awakened by the Mogambo Fed Credit Alarm (MFCA) ringing its little heart out, as it does a lot these days, and sure enough, the monthly increases in Total Fed Credit are still rising as smartly as they have for the past 12 (pause) freaking (pause) months, and it has now reached a staggering $2.3 trillion.
Fed Credit is, in case you forgot, the stuff that the Federal Reserve creates out of, literally, thin air and, again literally, puts into the books of the banks and the Fed itself, and which, again literally, becomes money when (and if!) somebody walks up (literally or figuratively) to a bank and wants to (and does) borrow the money that can be made out of this new credit. That’s how money is created these days! Just like that! Easy!
If you are like my wife or children, you don’t care about where money ultimately comes from, and the only money in which they are interested is the kind that you get as payment for working, which they want me to do, but I don’t want to do, or at least look for a job like they want me to do, but I don’t want to do, either, and it’s a constant sore point around here because the wife and kids just won’t freaking shut up about it.
I see you are quizzical at this apparent news, whereupon I, in turn, am quizzical as to why you are quizzical when I have always made it perfectly clear, in words and deeds, that I am a lazy, undependable guy who doesn’t give a crap anymore, and so for you to think that I would want to work or even look for a job lest I find one, seems kind of, ummm, stupid of you, if you don’t mind my saying so.
What? You were only wondering why I bring this up? Oops! Sorry!
I see that my mistake was that I should have introduced the subject with narrowed eyes, gritted teeth and hands clenched into Fists Of Mogambo Rage (FOMR) with which to set the “tone” of the conversation, which I happily do now (Grrrr!) when I note that last April, which was only 12 (pause) freaking (pause) months ago, Total Fed Credit was $1.9 trillion, and now it has increased by $400 billion, whereas 12 (pause) freaking (pause) years ago, Alan Greenspan, who was the odious former chairman of the Federal Reserve, started destroying the economy with his insane multiplications of the money supply when Total Fed Credit was a piddly (in comparison) $450 billion. Now it is $2.3 trillion! Grrrr!
And remember, this original $450 billion was enough to have powered 97 years of economic growth despite the persistent inflation you unfortunately get, which means this new astounding level of Fed Credit is an unbelievable, in comparison, increase of $1.497 trillion, up over 500% in 12 (pause) freaking (pause) years!
This rate of increase comes out to an increase of 14.5% per year, all of which was multiplied many, many times over by an insanely-generous fractional-reserve requirement in the banking system where the corrupt, greedy banks did not even have the decency to keep any new reserves against losses in new assets and new liabilities!! Hahaha! Not a penny!
Hell, even today total bank reserves are still a laughable $66 billion, which are admittedly suddenly up from the average of about $42 billion of the last decade! The funny part is that bank losses have busted the FDIC, but the banks were, and are, holding, almost literally, the same bit of nothing in reserves! Hahaha!
In this case, it is worse than it looks, even though it looks like the worst: monetizing debt by printing the money to buy it up. And sure enough, most of the new money being created by the Federal Reserve is actually being borrowed by the Federal Reserve to buy some of the avalanche of government bonds (paying full book price, of course), and miscellaneous toxic private-sector securities (again at full book price, but which are probably less than worthless, in that revealing their real, market value would cause more collapses, cascading through the economy, in other toxic securities!), judging by the phenomenal increases in their “Securities owned outright” account, which is now up to $2.01 trillion, whereas last April the Fed had just a little more than $513 billion, which is about the same amount that the Fed has had in this “Securities bought outright” account for years and years, which is significant, not in the $513 billion, or that it has usually run at about this level, but that it was, perhaps coincidentally, in April of last year that the Federal Reserve really Lost Its Freaking Mind (LIFM) and got cranking on a rabidly stupid plan to desperately create money and use it to buy up this kind of crap!
The Fed now has a whopping $2.01 trillion of this garbage sequestered away from prying eyes who will look at it and whose mouths will ask, “What in the hell is going on here? You are destroying the dollar with over-issuance and killing the American people with a horrendous, ruinous inflation in prices that will match the horrendous, ruinous inflation in the money supply so that a bunch of investing moron hotshots won’t lose their nasty, stupid butts like they are supposed to when they acted so stupidly? What in the hell is going on here?”
You can check the math if you want, but the way I figure it is that in 12 (pause) freaking (pause) months, the Fed has, with this one move, removed “$1.497 trillion” of assets (actual value: zero) from the economy and replaced it with $1.497 trillion in cash (actual value: $1.497 trillion), which seems an irreconcilable imbalance until you remember that everybody is a lying sack of crap.
Oddly enough, the change in the money supply is, now that you mention it, only up about $500 billion in the selfsame 12 (pause) freaking (pause) months. Hmmm!
Adding to the mystery is the story of what happened to the money raised with the sale of $1.7 trillion in bonds that has been added to the national debt in the last 12 (pause) freaking (pause) months, thanks to Congress borrowing and spending it like the desperate little pea-brained corrupt rats they are.
I assume all this is as confusing and incomprehensible to you as it is to me, and that you don’t know what to do, either, except panic.
Thrillingly and just in time, heroically in the face of such chaos, onto the scene bursts The Mogambo to tell you what to do, which is to buy gold, silver and oil, because precious metals and a source of energy have always proven to be the only things that will survive the terrifying evils of a long series of corrupt Congresses, moronic local and state governments, the despicable neo-Keynesian econometric halfwits infesting Federal Reserve and the majority of the nation’s universities, who have destroyed us with an avalanche of excess money because their precious little computer models have been tortured into telling them it was OK! Hahahaha!
A computer model that they made let them act like idiots and do economic things that have always failed every time one of them was used in the last 4,500 year, a degree of stupidity that rates at least a “Hahahaha!”
Fortunately, the best part – the wonderful, fabulous, glorious best part! – is that buying gold, silver and oil is still so easy, and at such bargain prices, which means that, again, if you are like me, then you like this because you like things that are so easy that you squeal with delight “Whee! This investing stuff is easy!”
Total Fed Credit: A Credit to Fed Stupidity originally appeared in the Daily Reckoning.
By Eldon Mast, on April 9th, 2010
On Thursday, retail stocks rose to 52-week highs as retailers continue a string of strong reports on a resurgent U.S. consumer.
Gap, Ross, and Target all jumped 3% or more on their March sales which easily beat analyst expectations.
More broadly, retail firms reported that collectively their March sales rose a record 9.1%, according to Thomson Reuters data.
And the growth is broad-based. From high-end retailers like Saks Inc. and Nordstrom Inc. to deep discounters like Costco and Target Corp., revenue gains of more than 10% were commonly reported.
Target, Kohls, TJX Cos., Ross Stores Inc. and Aeropostale Inc. all raised their first-quarter earnings guidance, with Target in particular saying it would beat the consensus estimates by 10 cents a share or more.
Thursday retail results continue to paint a picture that points to very strong Q1 GDP growth.
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By B.P.T., on April 9th, 2010
At 10:00 AM EDT, the Wholesale Trade report will be released for February, showing inventory levels for wholesalers in the U.S. If inventory growth lags behind the strong retail sales that have been reported recently, it could be a sign that increased production will be needed in the upcoming months.
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