Dear LT,
Many years ago I spoke to a man who lived through the Weimar Republic. He said that their warning was when there was no longer any change or small bills around before things got bad. the reason the penny is not worth a penny is because of all the flagrant money printing the central banks have been doing to paper over the monster mountain of OTC garbage paper.
Best,
CIGA BT
Punting the penny makes sense, Senate finance committee says
By Carmen Chai, Postmedia News December 14, 2010
OTTAWA — The Canadian penny has become a nuisance in consumers’ lives and the cost of producing it exceeds its financial worth, the Senate’s finance committee said Tuesday as it recommended abandoning the copper coin.
There are about 20 billion pennies in circulation across the country and about 600 pennies for each Canadian, said Senator Richard R. Neufeld, deputy chairman of the committee.
"Most of us know the penny as no more than a nuisance that slows down the line up at the grocery store and ultimately ends up under couch cushions or in drawers," Neufeld said.
"The fact is, the penny is not much use anymore."
The one-cent coin has lost 95 per cent of its purchasing power since it was first introduced in 1908 and what used to cost a penny now costs 20 cents, according to the report.
Newswire Targets Zombie Traders
CIGA Eric
Thus, eliminating the need to think objectively.
Eric,
I just thought you’d get a kick out of Yahoo finance’s front page right now…
It reads "disagreement over EU Debt Crisis Measure Deepens" immediately followed by "Gold Prices suffer sell off" just below it…
Hilarious…
Amir
Lower Taxes AND Spend! Deficit Cuts "Will Be Self-Defeating," Economist Declares
CIGA Eric
This is not opinion but rather the message of the markets. Any material reduction in deficit spending will generate a harsh response not only on Wall Street but also Main Street. Either devalue the currency – kick the can down the road to live another day, or immediately adopt harsh fiscal discipline and get your ass served on silver platter of social order here and now. Nobody wants to be the lead scapegoat story on 60 minutes.
Damned if you do, or damned if you don’t. Those seeking the protection of gold understand the conundrum.
The U.S. Senate is soon expected to pass an across-the-board extension on the Bush-era tax cuts. President Barack Obama’s $858 billion proposal also allows an extension of jobless benefits for the close to 15 million unemployed Americans.
The bill, however, is still a long way from a done deal as it does not have the full backing of House Democrats, who want to limit the tax cuts to the first $250,000 of family income. Liberals also oppose the estate tax provisions in the bill, as discussed here with former Sen. Ted Kaufman (D-Del.).
Source: finance.yahoo.com
Senate Overwhelmingly Passes Tax-Cut Package, 81-19
In a vote of 81 to 19, the Senate on Wednesday overwhelmingly passed the tax-cut compromise struck between President Obama and senior members of the Republican Party. Despite protestations of many congressional Democrats, the House is expected to vote on the bill later Wednesday evening or perhaps Thursday, where it is likely to be approved. Obama has said he would sign it into law later this week.
The vote in the Senate nearly mirrored those from earlier in the week, which ended debate on the bill and cleared a way to final passage. The 19 dissenters were Jeff Bingaman (R-N.M.), Tom Coburn (D-Okla.), Jim DeMint (R-S.C.), Byron Dorgan (D-N.D.), John Ensign (R-Nev.), Russ Feingold (D-Wis.), Kristen Gillibrand (D-N.Y.), Kay Hagan (D-N.C.), Tom Harkin (D-Iowa), Frank Lautenberg (D-N.J.), Patrick Leahy (D-Vt.), Carl Levin (D-Mich.), Jeff Merkley (D-Ore.), Bernie Sanders (I-Vt.), Jeff Sessions (R-Ala.), Mark Udall (D-Colo.), Tom Udall (D-N.M.), George Voinovich (R-Ohio) and Ron Wyden (D-Ore).
Attention Will Turn To The U.S. Dollar Soon
CIGA Eric
The media’s intense, unbalanced focus on the troubles within the Euro Zone should be a major warning sign for astute trades. The US Union (States) are also struggling with massive budgetary holes driven by excessive consumption have already drawn from the bailout well numerous times under relative media blackout. Yet each time the bucket is dipped, it is camouflaged by ‘redirective’ headlines.
Who’s the more foolish: The fool, or the fool who follows him?
The eventual termination operation Euro necessitates the following question: what’s next? The dollar index strength, a byproduct of Euro weakness, is cyclical rather than structural. The US Union requires similar, possibly significantly more, withdrawals from the bailout well as the European Union.
Jim said it best this morning,
The momentum decline of the euro in operation short of the euro named "Shark Feed’ is the best precursor of the " Shark Feed" being a terminal attack on the US dollar very soon.
The 12/3 down gap on heavy volume has been filled on contracting volume. This suggests that the cyclical strength in the Dollar Index is weakening. A turn in the leveraged money flows from short to long by smart money will mark the turn in the dollar.
U.S. Dollar Index ETF (UUP): 
Heading: Stocks, euro hit by Spanish credit rating warning
World markets and the euro fell Wednesday after Spain was warned it may have its credit rating downgraded, echoing a similar report on Belgium the day before and renewing worries about Europe’s debt crisis.
In Europe, the FTSE 100 index of leading British shares was down 22.92 points, 0.4 percent, at 5,868.29 while Germany’s DAX fell 55.70 points, or 0.8 percent, to 6,971.70. The CAC-40 in France was 34 points, or 0.9 percent, lower at 3,868.87.
Source: finance.yahoo.com
Batême Du Feu – Baptisted By Fire Will Characterize The Recognition of Hyperinflation
CIGA Eric
The undeniable face of hyperinflation – policy desperation, shortages, and growing social discontent is everywhere yet largely unrecognized by the public. I can’t help but think of the old French phrase baptême du feu. Unfortunately, baptized by fire will characterize the public’s recognition.
Headline: Hungary Follows Argentina in Pension-Fund Ultimatum, `Nightmare’ for Some
Hungary is giving its citizens an ultimatum: move your private-pension fund assets to the state or lose your state pension.
Economy Minister Gyorgy Matolcsy announced the policy yesterday, escalating a government drive to bring 3 trillion forint ($14.6 billion) of privately managed pension assets under state control to reduce the budget deficit and public debt. Workers who opt against returning to the state system stand to lose 70 percent of their pension claim.
Headline: Anti-austerity riots erupt amid Greece strike
Protesters clashed with riot police across Athens on Wednesday, torching cars, hurling gasoline bombs and sending Christmas shoppers fleeing in panic during a general strike against the government’s latest austerity measures.
Police fired tear gas and flash grenades as the violence escalated outside parliament and spread to other parts of the capital.
Headline: Portugal Tries to Prevent Sugar Hoarding Amid Shortage, FT Says
Portugal faces a sugar shortage, the first European country to find itself in this position in more than three decades, the Financial Times reported.
Agriculture Minister Antonio Serrano asked people not to hoard the commodity after a breakdown in imports to refineries led to a run on supplies in the shops, the newspaper said.
Headline: U.S. Called Vulnerable to Rare Earth Shortages
The United States is too reliant on China for minerals crucial to new clean energy technologies, making the American economy vulnerable to shortages of materials needed for a range of green products — from compact fluorescent light bulbs to electric cars to giant wind turbines.
So warns a detailed report to be released on Wednesday morning by the United States Energy Department. The report, which predicts that it could take 15 years to break American dependence on Chinese supplies, calls for the nation to increase research and expand diplomatic contacts to find alternative sources, and to develop ways to recycle the minerals or replace them with other materials.
Dear Jim,
I think this speaks for itself. It matters more what 2 billion Asians think than what 700 million in the USA and West.
As you have said before, the US and the West is screwed. When Lehman was flushed so was the Western world financial system.
The derivative market was dead because no longer would all the OTC derivatives cancel out. That left no practical solution to the impending and then present problems. The jig was up.
Best,
CIGA BT
WikiLeaks: Bank of England Sought Global Bank Bailout in 2008
Tuesday, 14 Dec 2010 08:27 AM
(Excerpts From Article)
According to the cable, King told the U.S. ambassador and former U.S. Treasury Deputy Secretary Robert Kimitt, who was visiting London, that the Group of Seven major economies was no longer relevant to deal with global financial issues.
"The G7 is almost dysfunctional on an economic level, said King. Key economies are not included, especially those that have large and growing pools of capital. King said that a new international group was needed to address the issue," Tuttle said in the cable.
King also said, according to the cable on the Guardian’s website, it was imperative to find a way for banks to sell off unwanted illiquid securities, including mortgage backed securities, without resorting to sales at distressed valuations.
