Was there another increase in margin requirements on silver contracts this past week? TD
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
CME Group announced another series of margin requirement increases for several commodity futures contracts, including silver, copper and palladium, effective after the close of business on Friday.
CME Group, owner of the New York Mercantile Exchange and the COMEX, also announced margin requirement changes for several other markets, including natural-gas index swap futures, Treasury note and bond futures, and federal-funds futures. In its press release the CME group stated that the changes were made as a part of “normal review of market volatility to ensure adequate collateral coverage.”
The initial margin requirement for silver was raised to $10,463 from $9,788 for speculators, and the margin for hedgers and the maintenance margin for speculative accounts was increased to $7,750 from $7,250.
The initial speculative margin in Comex copper was raised to $6,413 from $5,400, and the margin for hedgers and the maintenance margin for speculators were increased to $4,750 from $4,000.
For the primary Nymex palladium contract, the initial margin requirement for speculators was increased to $5,500 from $4,950, and the margin for hedgers and maintenance margin for speculators was raised to $5,000 from $4,500.
While raising margins is normal and healthy in a rising bull market, what doesn't make sense is driving the margins of the specs higher than the hedgers/commercials. The biggest and most dangerous "speculators" in PM's are the banks. They shouldn't be given lower margin requirements when they hold a high % of the total short position. While JPM may be trimming down it's silver short position, they are probably just transferring it over to other players.
Would have expected more action on Friday with these margin changes. Maybe it will be on Monday.
<< <i>Would have expected more action on Friday with these margin changes. Maybe it will be on Monday. >>
I actually wouldn't expect a whole lot of action. I'm not sure how large speculators operate, but I'm guessing they aren't fully leveraged.... in other words, they maintain a healthy margin/reserve for market fluctuations. An increase of 5% in the margin requirements shouldn's upset anything too much. I know a few months ago when PMs had a big pullpack the day that new margin requirements were announced that was the excuse given for the large pullback, but I didn't buy it. But that was a much bigger increase than this one. Interestingly, my broker seems to 'grandfather' margin requirements. That is, on the contracts I already owned there is no change to my requirements - only if I buy new contracts do the new requirements apply. Not sure how universal this is.
Shorting of metals shifting to non-US banks!! and gives us an overall increase in shorting activity! I wonder what prompted this move (and I don't believe for a second that it's merely a coincidence). Are the US banks feeling regulatory heat and thus attempting to move their activities outside US jurisdiction? What does this act (of desperation?) portend for the metals markets? How close are we to the busting of the Comex and other futures markets? How close are we to real divergence of paper prices and physical prices?
.....GOD
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
I agree with Ron Paul. Every time I hear that the government is going to "give" me a "tax cut", it makes me wonder why I work at all. The warp-age of our language is going to cause everyone, conservatives and liberals alike - more grief in the long run than we can imagine. When "change" for the sake of change becomes our way of doing things, we speed right past the flashing red lights and into the busy intersection without missing a heartbeat. In doing so, I only hope that it's not our last heartbeat.
Then I come to my senses and realize that I still work because I practice skills that help me live a decent existance. I pity those who sit around and practice nothing while waiting for that government handout. I pity them, but I also have disdain - both for what they become and for that bureaucracy that enables such sloth while penalizing industry and the industrious amongst us.
Q: Are You Printing Money? Bernanke: Not Literally
What lies ahead is a new era of rising interest rates, soaring consumer prices, increasing unemployment, economic stagnation, and lower living standards. Instead of stimulating the economy, quantitative easing and deficit spending will prove to be a lethal combination. Bondholders beware, the bell tolls for thee-from the Schiff article posted above.
I notice my PIMCO Total Return Bond Fund in my 401K went from 12% to 7% in just a few weeks. It is full of derivatives and the irony is it is classified in my 401k as a low risk fund. Time to get out I guess.
Corrected from stated above. This is from the Pimco Total Return Fund Prospectus:
In pursuing its investment objective, the Fund may (but is not obligated to) use a wide variety of exchange-traded and over-the-counter derivatives, such as options (including swaptions and interest rate caps and floors), futures contracts, and swap contracts (including credit default swaps, total return swaps, interest rate and currency swaps), for hedging or investment purposes as a substitute for investing directly in securities, including for purposes of enhancing returns
Disclaimer: I am just a regular joe with a 401K so please don't let me influence your investment decisions on here.
<< <i>What lies ahead is a new era of rising interest rates, soaring consumer prices, increasing unemployment, economic stagnation, and lower living standards. Instead of stimulating the economy, quantitative easing and deficit spending will prove to be a lethal combination. Bondholders beware, the bell tolls for thee-from the Schiff article posted above.
I notice my PIMCO Total Return Bond Fund in my 401K went from 12% to 7% in just a few weeks. It is full of derivatives and the irony is it is classified in my 401k as a low risk fund. Time to get out I guess.
Corrected from stated above. This is from the Pimco Total Return Fund Prospectus:
In pursuing its investment objective, the Fund may (but is not obligated to) use a wide variety of exchange-traded and over-the-counter derivatives, such as options (including swaptions and interest rate caps and floors), futures contracts, and swap contracts (including credit default swaps, total return swaps, interest rate and currency swaps), for hedging or investment purposes as a substitute for investing directly in securities, including for purposes of enhancing returns
Disclaimer: I am just a regular joe with a 401K so please don't let me influence your investment decisions on here. >>
I know PIMCO has always been a highly rated bond outfit, but I have never looked into their holdings. It was a " safe, secure" money market fund investing in derivatives that started the big tumble. If I found one of my investments holding volatile items I would get rid of them in a second. I've sold a good deal of my bond portfolio off in the last few months. They have had a great run but I just don't see any upside for them in the near future. I have tried to avoid "market timing" in the 25 or so years I have been investing in bonds and equities but I am retired now and just don't have the time frame to recover from big paper losses. Some of the money went into dividend paying equities but most just to cash where it will sit for the meantime, some may go into PM's if there was to be a pullback. I haven't entirely written off the nations economic future, but I sure feel a lot different about it than I did even a year ago. If I was a young fellow I would still be investing in "paper" but also putting away PM's in some form (I happen to like low MS state gold coins). There is just no way of telling what the future holds and I would just try and keep my resources divirsified.
PS I had income producing property when I was younger, it can be a pain in the ass but it is another way to spread the wealth around.
The guys from PIMCO have been saying in interviews for weeks now that they are going to be chasing higher yields over in Asia and elsewhere. I can't comment on the advisability of holding their stuff, but they've always seemed to know what they are talking about. Big money kinda demands that they do.
The commentary on CNBC has continued to tout an economic recovery, but they've also veered into making commodities their poster child of the moment.
So much for commercial TV.
Sinclair also knows what he's talking about. If you really want to be concerned, just start paying attention to the lame duck session.
And the Fed's actions. Are we now bailing out European banks? Is that correct?
Q: Are You Printing Money? Bernanke: Not Literally
Take the time to watch this award winning video about the massive debt Americans have accumilated. It is a wake up call for all Americans. The producers attempt to be apolitical, so it is not a us vs them arguement. Perhaps you will be enlightened before it is too late. http://topdocumentaryfilms.com/iousa-one-nation-under-debt-in-stress/
<< <i> Then I come to my senses and realize that I still work because I practice skills that help me live a decent existance. I pity those who sit around and practice nothing while waiting for that government handout. I pity them, but I also have disdain - both for what they become and for that bureaucracy that enables such sloth while penalizing industry and the industrious amongst us. >>
Well said, jmski52. After working 9 1/2 hrs. today and driving 120 miles to do it, I couldn't agree more.
Inflation seems to be picking up everywhere, won't inflation help the U.S. debt?
A lot of companies are sitting on a lot of cash, as rates pick up and the market bubbles up, won't these companies begin to cash assets? Won't that asset chasing push inflation up even higher?
I realize the Federal Reserve thinks it can pull money out of the economy to prevent inflation but with stubbornly high unemployment, the political will to do so will likely be slow in coming.
I am beginning to fear the churn and the chaos that seems to be coming in the next 6 to 9 months.
I'm seeing more and more signs of inflation, especially here over the holidays. Shopping at the grocery store, $3 gas, regular Hallmark greeting cards $4-5 (used to be ~$3), the news said that airline tickets were up ~7%. I don't care what the government says, noticeable inflation is here!
Inflation seems to be picking up everywhere, won't inflation help the U.S. debt?
A lot of companies are sitting on a lot of cash, as rates pick up and the market bubbles up, won't these companies begin to cash assets? Won't that asset chasing push inflation up even higher?
I realize the Federal Reserve thinks it can pull money out of the economy to prevent inflation but with stubbornly high unemployment, the political will to do so will likely be slow in coming.
I am beginning to fear the churn and the chaos that seems to be coming in the next 6 to 9 months.
Good post. That's the whole reason for inflation. To lower the costs of government liabilities. The two most difficult things for any politician to do is to overtly raise taxes and to cut benefits. Inflation "solves" that problem. The problem is that inflation merely shifts the costs around, instead of reducing them. Lower government spending is the only way to reduce the costs, duh.
The wage-price spiral is incidental but symptomatic. Rising wages are not the cause of inflation, only a symptom. The ecomomic problem is that raising rates will kill off any chance of a tax increase being able to generate sufficient revenues because it will also kill off any chance of new job creation, just when it is needed most. Again, inflation is their "solution" to the problem, all the while they are hoping that nobody will notice.
Q: Are You Printing Money? Bernanke: Not Literally
Sugar appears to have tripled while no inflation has been busy occuring.
I'm pondering this one from roadrunner's link, above. One quick read from Wikipedia on Goldman Sachs causes one to engage in contemplation over what type of justice should be meted out to the likes of the false moneyers.
"1125 A.D. In this year before Christmas King Henry sent from Normandy to England and gave instructions that all moneyers ... be deprived of their members ... Bishop Roger of Salisbury commanded them all to assemble at Winchester by Christmas. When they came hither they were then taken one by one, and each deprived of the right hand and the testicles below. All this was done in twelve days between Christmas and Epiphany, and was entirely justified because they had ruined the whole country by the magnitude of their fraud which they paid for in full." - The Laud Chronicle (E)
<< <i>I'm pondering this one from roadrunner's link, above. One quick read from Wikipedia on Goldman Sachs causes one to engage in contemplation over what type of justice should be meted out to the likes of the false moneyers.
"1125 A.D. In this year before Christmas King Henry sent from Normandy to England and gave instructions that all moneyers ... be deprived of their members ... Bishop Roger of Salisbury commanded them all to assemble at Winchester by Christmas. When they came hither they were then taken one by one, and each deprived of the right hand and the testicles below. All this was done in twelve days between Christmas and Epiphany, and was entirely justified because they had ruined the whole country by the magnitude of their fraud which they paid for in full." - The Laud Chronicle (E) >>
ah!!......The good'ole days.
"Gold is money, and nothing else" (JP Morgan, 1912)
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
believe it or not, they do have the biggest sails on the united states of america's financial system's "ship" and HMS G.S. Lollipop has a pretty dam^ big rudder, too.
I've thrown away my toys, Even my drums and trains, I want to make some noise, With real live airplanes. Some day I'm going to fly, I'll be a pilot to, And when I do, How would you, Like to be my crew?
On the good ship Lollipop Its a sweet trip To the candy shop Where bon-bon's play, On the sunny beach Of peppermint bay Lemonade stands, Everywhere Crackerjack bands, Fill the air, And there you are, Happy landings on a chocolate bar. See the sugar bowl Do a tootsie roll In a big bad devils food cake, If you eat too much, Oh, oh, You'll awake, With a tummy ache.
On the good ship Lollipop Its a nice trip, In to bed you hop, And dream away, On the good ship Lollipop
I think it's come up and I have always wondered, how can a treasury auction fail if the fed can simply just print money and buy all of the treasuries? This is how... there is a limit of how much they can purchase... it used to be 35%, now it is 70%. Of course it is self-imposed, so it is meaningless. If this isn't a sign of doom, I don't know what is.
<< <i>I think it's come up and I have always wondered, how can a treasury auction fail if the fed can simply just print money and buy all of the treasuries? This is how... there is a limit of how much they can purchase... it used to be 35%, now it is 70%. Of course it is self-imposed, so it is meaningless. If this isn't a sign of doom, I don't know what is.
So, does this mean that they just have to issue a higher face value of worthless paper to get the results they want, since they can only buy 70% of it????
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
they seem pretty unlikely, but they are true if/when they happen. with easy to follow reasoning and explanations. and written by a PM bull more as a note to caution and probably a contrary article to get a piece of internet space this slow week.
another note is mentioned on silver being over-bought
Check out these results - from January 1970 to December 17, 2010
Gold was $35.40 Now $1376 Up 3786%
Silver was $1.88 Now $29 Up 1453%
Aluminum was $606.20 Now $2307 Up 280%
Copper was $1569 Now $9102 Up 480%
Lead was $324.70 Now $2379 Up 633%
Nickel was $2881.60 Now $24695 Up 757%
Tin was $3818 Now 26225 Up 587%
Zinc was $309.90 Now $2241 Up 623%
S&P 500 gained 1400% during this period while gold was up 3786%. >>
You are choosing individual commodities and comparing to a broad basket of stocks. I could just as easily choose individual stocks and compare to a broad basket of commodities. Would make those commodity gains look pretty tame.
<< <i>wage increases will come later when people know there is inflation
Glen >>
Only in China. Nobody (unions , they set wages for everyone else), is gonna see a wage increase for a decade. In fact, wages as defined as hourly income and benefits are declining. And will decline further as taxpayers voice opinion on public retirement and healthcare benefits. The violence that I see concerns me much more than the improbable US default on its bonds.
Once these states (starting with Michigan and California) that are so over burdened with medicare and union pensions start going bankrupt then the smelly stuff will hit the fan.
<< <i>Once these states (starting with Michigan and California) that are so over burdened with medicare and union pensions start going bankrupt then the smelly stuff will hit the fan. >>
I could just as easily choose individual stocks and compare to a broad basket of commodities. Would make those commodity gains look pretty tame. >>
No one can pick and choose individual stocks and have as much success. There are way too many stocks to do that. There are not that many commodities.
If you feel it's so easy, then go ahead and pick 10-20 stocks that will gain 3000% over the next thirty years. We will sit back here on these boards and watch them. If it's so easy, then please take the time to give us these companies.
Cohodk's point was that you can cherry-pick commodities and stocks and paint any picture you want. If the cherry-picking claim is true, I guess the challenge here would be to find commodities that have NOT outperformed stocks/SP500. Anyone up for that challenge?
<< <i>Cohodk's point was that you can cherry-pick commodities and stocks and paint any picture you want. If the cherry-picking claim is true, I guess the challenge here would be to find commodities that have NOT outperformed stocks/SP500. Anyone up for that challenge? >>
to both
to ef, your point is taken, though and the increases were interesting, but i doubt anyone sold their investment souls 40 years ago and bought gold or any of the others.......AND hung onto it the whole time...i would a sold after the 80's peak and then rebought at the low point for both silver and gold and then i'd have some really big numbers.
I could just as easily choose individual stocks and compare to a broad basket of commodities. Would make those commodity gains look pretty tame. >>
No one can pick and choose individual stocks and have as much success. There are way too many stocks to do that. There are not that many commodities.
If you feel it's so easy, then go ahead and pick 10-20 stocks that will gain 3000% over the next thirty years. We will sit back here on these boards and watch them. If it's so easy, then please take the time to give us these companies. >>
Of all the commodities you picked, only one gained 3000% (per your numbers). How much is corn up since 1970, wheat, soybeans? I dont need to pick 10 or 20 stocks to go up 3000%. Did you know that MSFT went up on average of 1% a week from the day it went public in 1986 to its peak in 2000. You wanna do the compounding on that return? I could pick 19 stocks that go bankrupt and have only one (MSFT) and blow away any commodity returns. In fact, many of those commodity returns are weak compared to real estate prices in select areas. My point is, you must compare specifics to specifics, or generalities to generalities. You cant mix them up.
FWIW---Minimum wage is up 335% since 1970. So how much are some of these commodities really up? Aluminum is down.
But to get back on the inflation discussion. Here is a table of minimum wages. Notice how the rise in most commodities--which started to move in 2007 with the ethanol mandates-- coincides with the increase in wages. Its simple, if people dont have the money they cant spend it. And if they cant spend it, prices can only go so high. There is a lot of money being spent on silver and thats why the price went up. Unless wages go higher, any gains in prices will be lost.
Now I do see where the minimum wage is set to go higher in 7 states next week. This will certainly help the inflation cause. And if Obama can get the Federal minimum up to his proposed $9.50, then we'll have something to worry about.
BTW---My local car dealer has a glut of Toyotas and is pricing them 12-15% lower than 6 months ago. Why does Bernanke and most others fight lower prices? I love 'em (lower prices), but I'd never buy a Toyota.
Well Ladies and Gentlemen it is that time of year that those of us that would like to make our predictions for the up coming year.
Here are mine:
1. During the next year spot Gold will go above $1,550.
2. I agree with Meredith Whitney, at least 50 cites in the U.S. will default on their Muni bonds next year causing a panic in the bond market. The States, and Obama, will fight tooth and nail to keep the cites from filing bankruptcy.
3. The spot price of Silver will breach $40 next year.
4. The spot price of oil will breach $110 per barrel. Get ready for $3.50 gas.
5. A great deal of the housing market will see additional declines of as much as 15%.
6. Most interest rates will see increases, as investors become leary of notes and bonds in general.
7. The Fed will be forced to buy an additional TRILLION dollars worth of mortgages, and muni bonds, as well as unwanted treasuries.
8. Although the government will continue to claim we have NO inflation the cost of nearly everything, with the exception of housing, will increase by over 15%.
9. Someone credible will discover that the real losses in Freddie and Fannie is at least a TRILLION dollars, and not the 200 billion claimed by the administration. The new congress, which claims they want to bankrupt these entities, and privatize them, will do NOTHING.
10. The unemployment rate will stay above 9% as many companies do as much Business as possible outside the U.S. to avoid a whole new set of Taxes passed by desperate states and cities.
<< <i>But to get back on the inflation discussion. Here is a table of minimum wages. Notice how the rise in most commodities--which started to move in 2007 with the ethanol mandates-- coincides with the increase in wages. Its simple, if people dont have the money they cant spend it. And if they cant spend it, prices can only go so high. There is a lot of money being spent on silver and thats why the price went up. Unless wages go higher, any gains in prices will be lost. >>
The biggest flaw in your statement is ignoring the impact of a weakening currency and other economic forces which cause inflation (increases in expenses, reduction in purchasing power) but have ZERO to do with wages in this country.
Oil and energy prices are a HUGE factor in the price we pay for everything we buy. If the USD continues to weaken against other currencies, oil and other commodities will continue to increase in price. Even if the US buys less because wages are lower, these are international markets and the price of oil has little to do with wages. So if energy prices continue to climb (in USD) and all else stays the same with stagnant wages, prices are going UP, not down or flat. The same argument can be made for the raw materials and other commodities. Oil is currently at $91 because of the USD, not because of world demand or consumption.
The US imports an extremely large portion of all consumer products. If the USD goes down versus most other currencies (as it has all year), particularly the Chinese yuan, will prices for US consumers go up or down? Again the prices will INCREASE, and it has nothing to do with wages. Prices on imported goods are not going any lower simply because Americans are making the same or less in wages and can't afford to buy as much.
A TV set costs what it does not because of how much Americans make, but because of the costs to acquire the raw materials to make it, the labor and machines to put it together, and energy to transport it, and the retailer who sells it, the costs to market it, and what a competing set is sold for. Even if no one can suddenly afford a $1000 TV doesn't mean that the price of a $1000 TV will drop to some lower price. Market forces will cause the mfr to stop or reduce production, and if a mfr can no longer stay in business, then factories will close, rather than discount product below mfr cost or work for free.
Then there are taxes, which are destined to increase everywhere and for everyone in the US. If corporate taxes increse, they get passed onto the consumer which results in higher prices, but not necessarily higher wages. And you could argue that an individual tax increase is the same as either earning less or paying more for everything. Again we have prices/expenses going up, purchasing power going down with no increase in wages.
While there may be valid correlations such as you've described, inflation does not require increasing wages. In fact, you could argue that inflation could cause increasing wages. Who is going to work for $7/hr if it takes 1 hour to buy a loaf of bread? Most would rather logically take government aid then work for peanuts. Absent slave labor (i.e., illegal immigrants), business owners are forced to pay more for labor which gets passed on to the consumer in prices.
The residents of ZMB are probably making more today (in $ZMB) than they were a few years ago, but I think if you looked at the numbers their overall purchasing power has probably declined.
Stagflation = Sluggish economic growth coupled with a high rate of inflation and unemployment.
I remember the 70s well as I entered the workforce after completing college.
American Numismatic Association Governor 2023 to 2025 - My posts reflect my own thoughts and are not those of the ANA.My Numismatics with Kenny Twitter Page
Unemployment will remain stubborn in the private sector and for municipalities and regional govts. For fed gov, employment will rise steadily with mass hirings into security and regulatory areas (read what you want into that). Short of a WPA/CCC type of effort to repair and develop infrastructure, there looks to be little job growth in the cards for J6P. For cube dwellers, they are ready to leap from the austere last couple of years of no cola, no merit increases, increased workloads, and considerably more supervision to something better...hell, anything better, even if it is in La Paz. Cube dwellers are likely to get more expensive for owners to keep but it's doubtful there will be a significant increase in their numbers. Small business will grow slowly in '11 as new marketing, new products, new levels of service separate the wheat from the chaff but they will become even bigger tax magnets and more regulated so the net effect on job growth will likely be near 0. Not a very optimistic outlook for employees but on the other hand, the boomers are going to be quietly slipping out the back door; short visit to HR, a few handshakes and a plaque, and it's Social Security and a pension/annuity, baby, we're outta here and that may leave some room for the up'n comers that have the qualifications.
Home interest rates/housing should remain stagnant, at best. Most all of the paper goes directly to fannie once it's made...the gov has this industry by the neck. There is buying and lending but it's a tricky market for consumers hunting foreclosures, short sales and other distressed properties...many pitfalls to trying to get this inventory off of the books, uphill at best. For straight up buyers and sellers, it's a stalemate. Buyers are expecting a discount from full asking price (like 20%) and sellers that don't need to sell aren't moving off their number, preferring to lease their properties into a booming market of renters just to cover their nut. Legitimate properties are moving but very slowly. No game change here in '11.
Gold at 1500 seems pretty realistic, particularly if it settles above 1400 for a month or two, I'm still amazed at +1200 myself but there are some strong forces at work here. Silver at 40 may be the new bench, hard to see what would keep it from settling there, much less making a few runs at 50.
Social services, govt programs...all soon to be under withering fire from the newly minted congress. Social unrest might get to be more conspicuous, particularly from those that rely on these things to keep their i-phones and HDTV accounts going. We are at an untested social nexus here: The gov has become more and more strident in caring for the underserved and as govt grew, the underserved got more service (read: entitlements and programs). Now that govt budget is shrinking from the township level on up, the gains from the earlier growth must diminish, considerably. Folk are going to realize, in a reality type of way, that you have to cut spending. The outrage at having schools shut down or consolidated, lunch/after school programs being done away with, very reduced public service as in firefighting, no more library hours, police, hospital services will mean...less service. Can a family be on the evening news with their home burning and no firefighters dispatched? Does it take a handgun involved situation to get the overstrapped police force to issue a dispatch? If you are sick, go to Walgreens because there are 8 hour waits in ER's, the few that aren't on "Drive-By" status. The fed can mandate and regulate the munis to keep services on but if there is no money to do it, how's it going to happen...is the fed going to be responsible for keeping the lights on at the shelter? And then, there's the newly minted congress.
Cost of gas, and electricity has been rising and will continue to do so. Gas at $5 and oil at 100+ is in the cards for '11, I think $3.50 or even $4 is unrealistic. As the gov regulates the energy producers (petroleum in particular) more, it will cost more. Mandate all the clean air, environmental compliance, drilling bans, what ever you little mind can work up, and it will raise the cost of refining oil into gasoline and getting it to the consumer. The strangle hold of regulations that the gov has and will be having on the energy producers will drive the cost to the consumer up, up, up. Now, add on the new taxes that the states and fed are going to be putting on fuel just to keep the gov doors open and you're going to see some fear and loathing on the highways and byways.
Food has to be transported, that costs gas/diesel and that means folk will be paying more for food even if the shippers use trains more than 18 wheelers. Throw in some foul weather, a dock strike or two, union unrest, and we could be seeing a whole different food distribution expense and that means higher prices. The reality is that food must continually go up to support growth and profit. When has food ever had a sustained period of reduced prices...all God's people gotta eat and there's more people. So hopefully, things go up across the board as in wages, PM, other assets so we can all afford plenty of food in '11.
I'm optimistic for '11. I think we will see some very large changes in the way things are done and a lot of the Norman Rockwell Americana stuff is being slowly moved to the history books and old magazines but we will go forward in what ever fashion. Those that keep their heads in the game and work at staying successful should do just fine but it's likely going to take a little more effort to do so. Those that are looking for some help will probably find less of it. Prices are going up, it just cost more to play now and I don't think we're talking about credit...we're talking cash and real assets.
weird that the headline said "population changes" which in my book many times can have little or nothing to do with demographics which is what the article was about and your use of the word in your post.
i am naive to assume that the headline writers have any clue as to the content of the story? they must be just trying to fit a type font and size, i guess. sometimes the headline is all that is read..but i digress
Comments
TD
TD
CME Group, owner of the New York Mercantile Exchange and the COMEX, also announced margin requirement changes for several other markets, including natural-gas index swap futures, Treasury note and bond futures, and federal-funds futures. In its press release the CME group stated that the changes were made as a part of “normal review of market volatility to ensure adequate collateral coverage.”
The initial margin requirement for silver was raised to $10,463 from $9,788 for speculators, and the margin for hedgers and the maintenance margin for speculative accounts was increased to $7,750 from $7,250.
The initial speculative margin in Comex copper was raised to $6,413 from $5,400, and the margin for hedgers and the maintenance margin for speculators were increased to $4,750 from $4,000.
For the primary Nymex palladium contract, the initial margin requirement for speculators was increased to $5,500 from $4,950, and the margin for hedgers and maintenance margin for speculators was raised to $5,000 from $4,500.
While raising margins is normal and healthy in a rising bull market, what doesn't make sense is driving the margins of the specs higher than the hedgers/commercials. The biggest and most dangerous "speculators" in PM's are the banks. They shouldn't be given lower margin requirements when they hold a high % of the total short position. While JPM may be trimming down it's silver short position, they are probably just transferring it over to other players.
Would have expected more action on Friday with these margin changes. Maybe it will be on Monday.
roadrunner
<< <i>Would have expected more action on Friday with these margin changes. Maybe it will be on Monday. >>
I actually wouldn't expect a whole lot of action. I'm not sure how large speculators operate, but I'm guessing they aren't fully leveraged.... in other words, they maintain a healthy margin/reserve for market fluctuations. An increase of 5% in the margin requirements shouldn's upset anything too much. I know a few months ago when PMs had a big pullpack the day that new margin requirements were announced that was the excuse given for the large pullback, but I didn't buy it. But that was a much bigger increase than this one. Interestingly, my broker seems to 'grandfather' margin requirements. That is, on the contracts I already owned there is no change to my requirements - only if I buy new contracts do the new requirements apply. Not sure how universal this is.
Ron Paul on C-Span’s ‘Newsmakers’ 12-19-2010
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
New Wikileaks via Max Kaiser
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
Distorting the Tax Policy Debate
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Then I come to my senses and realize that I still work because I practice skills that help me live a decent existance. I pity those who sit around and practice nothing while waiting for that government handout. I pity them, but I also have disdain - both for what they become and for that bureaucracy that enables such sloth while penalizing industry and the industrious amongst us.
I knew it would happen.
i found this an intersting bit of potion to add to one's crystal ball
I notice my PIMCO Total Return Bond Fund in my 401K went from 12% to 7% in just a few weeks. It is full of derivatives and the irony is it is classified in my 401k as a low risk fund. Time to get out I guess.
Corrected from stated above. This is from the Pimco Total Return Fund Prospectus:
In pursuing its investment objective, the Fund may (but is not obligated to) use a wide variety of exchange-traded and over-the-counter derivatives, such as options (including swaptions and interest rate caps and floors), futures contracts, and swap contracts (including credit default swaps, total return swaps, interest rate and currency swaps), for hedging or investment purposes as a substitute for investing directly in securities, including for purposes of enhancing returns
Disclaimer: I am just a regular joe with a 401K so please don't let me influence your investment decisions on here.
Box of 20
<< <i>What lies ahead is a new era of rising interest rates, soaring consumer prices, increasing unemployment, economic stagnation, and lower living standards. Instead of stimulating the economy, quantitative easing and deficit spending will prove to be a lethal combination. Bondholders beware, the bell tolls for thee-from the Schiff article posted above.
I notice my PIMCO Total Return Bond Fund in my 401K went from 12% to 7% in just a few weeks. It is full of derivatives and the irony is it is classified in my 401k as a low risk fund. Time to get out I guess.
Corrected from stated above. This is from the Pimco Total Return Fund Prospectus:
In pursuing its investment objective, the Fund may (but is not obligated to) use a wide variety of exchange-traded and over-the-counter derivatives, such as options (including swaptions and interest rate caps and floors), futures contracts, and swap contracts (including credit default swaps, total return swaps, interest rate and currency swaps), for hedging or investment purposes as a substitute for investing directly in securities, including for purposes of enhancing returns
Disclaimer: I am just a regular joe with a 401K so please don't let me influence your investment decisions on here. >>
I know PIMCO has always been a highly rated bond outfit, but I have never looked into their holdings. It was a " safe, secure" money market fund investing in derivatives that started the big tumble. If I found one of my investments holding volatile items I would get rid of them in a second.
I've sold a good deal of my bond portfolio off in the last few months. They have had a great run but I just don't see any upside for them in the near future. I have tried to avoid "market timing" in the 25 or so years I have been investing in bonds and equities but I am retired now and just don't have the time frame to recover from big paper losses. Some of the money went into dividend paying equities but most just to cash where it will sit for the meantime, some may go into PM's if there was to be a pullback.
I haven't entirely written off the nations economic future, but I sure feel a lot different about it than I did even a year ago. If I was a young fellow I would still be investing in "paper" but also putting away PM's in some form (I happen to like low MS state gold coins). There is just no way of telling what the future holds and I would just try and keep my resources divirsified.
PS I had income producing property when I was younger, it can be a pain in the ass but it is another way to spread the wealth around.
The commentary on CNBC has continued to tout an economic recovery, but they've also veered into making commodities their poster child of the moment.
So much for commercial TV.
Sinclair also knows what he's talking about. If you really want to be concerned, just start paying attention to the lame duck session.
And the Fed's actions. Are we now bailing out European banks? Is that correct?
I knew it would happen.
have accumilated. It is a wake up call for all Americans. The producers attempt to be
apolitical, so it is not a us vs them arguement. Perhaps you will be enlightened before
it is too late.
http://topdocumentaryfilms.com/iousa-one-nation-under-debt-in-stress/
Merry Christmas and Happy New Year
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
link
http://finance.yahoo.com/video#video=23584502
<< <i> Then I come to my senses and realize that I still work because I practice skills that help me live a decent existance. I pity those who sit around and practice nothing while waiting for that government handout. I pity them, but I also have disdain - both for what they become and for that bureaucracy that enables such sloth while penalizing industry and the industrious amongst us. >>
Well said, jmski52. After working 9 1/2 hrs. today and driving 120 miles to do it, I couldn't agree more.
"having money's not everything and not having it is."
-Kanye West
more from the Schiff (Browne) i really do understand this reasoning
if we go that path with more QE, which seems to be where we are headed
Inflation seems to be picking up everywhere, won't inflation help the U.S. debt?
A lot of companies are sitting on a lot of cash, as rates pick up and the market bubbles up, won't these companies begin to cash assets? Won't that asset chasing push inflation up even higher?
I realize the Federal Reserve thinks it can pull money out of the economy to prevent inflation but with stubbornly high unemployment, the political will to do so will likely be slow in coming.
I am beginning to fear the churn and the chaos that seems to be coming in the next 6 to 9 months.
Groucho Marx
Glen
Inflation seems to be picking up everywhere, won't inflation help the U.S. debt?
A lot of companies are sitting on a lot of cash, as rates pick up and the market bubbles up, won't these companies begin to cash assets? Won't that asset chasing push inflation up even higher?
I realize the Federal Reserve thinks it can pull money out of the economy to prevent inflation but with stubbornly high unemployment, the political will to do so will likely be slow in coming.
I am beginning to fear the churn and the chaos that seems to be coming in the next 6 to 9 months.
Good post. That's the whole reason for inflation. To lower the costs of government liabilities. The two most difficult things for any politician to do is to overtly raise taxes and to cut benefits. Inflation "solves" that problem. The problem is that inflation merely shifts the costs around, instead of reducing them. Lower government spending is the only way to reduce the costs, duh.
The wage-price spiral is incidental but symptomatic. Rising wages are not the cause of inflation, only a symptom. The ecomomic problem is that raising rates will kill off any chance of a tax increase being able to generate sufficient revenues because it will also kill off any chance of new job creation, just when it is needed most. Again, inflation is their "solution" to the problem, all the while they are hoping that nobody will notice.
I knew it would happen.
A concise article by Boy Hoye. I like the solution in the last paragraph as well.
Commodities Index
No inflation there since fall of 2008. That formation currently hints at another 50%+ increase in commodity prices once a handle is added.
roadrunner
I'm pondering this one from roadrunner's link, above. One quick read from Wikipedia on Goldman Sachs causes one to engage in contemplation over what type of justice should be meted out to the likes of the false moneyers.
"1125 A.D. In this year before Christmas King Henry sent from Normandy to England and gave instructions that all moneyers ... be deprived of their members ... Bishop Roger of Salisbury commanded them all to assemble at Winchester by Christmas. When they came hither they were then taken one by one, and each deprived of the right hand and the testicles below. All this was done in twelve days between Christmas and Epiphany, and was entirely justified because they had ruined the whole country by the magnitude of their fraud which they paid for in full." - The Laud Chronicle (E)
Wikipedia Version - The Goldman Sach
Goldman's Business Principals - Look what's dead last on the list (besides, they had their fingers crossed).
I knew it would happen.
<< <i>I'm pondering this one from roadrunner's link, above. One quick read from Wikipedia on Goldman Sachs causes one to engage in contemplation over what type of justice should be meted out to the likes of the false moneyers.
"1125 A.D. In this year before Christmas King Henry sent from Normandy to England and gave instructions that all moneyers ... be deprived of their members ... Bishop Roger of Salisbury commanded them all to assemble at Winchester by Christmas. When they came hither they were then taken one by one, and each deprived of the right hand and the testicles below. All this was done in twelve days between Christmas and Epiphany, and was entirely justified because they had ruined the whole country by the magnitude of their fraud which they paid for in full." - The Laud Chronicle (E) >>
ah!!......The good'ole days.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
<< <i>
Goldman's Business Principals - Look what's dead last on the list (besides, they had their fingers crossed). >>
believe it or not, they do have the biggest sails on the united states of america's financial system's "ship" and HMS G.S. Lollipop has a pretty dam^ big rudder, too.
I've thrown away my toys,
Even my drums and trains,
I want to make some noise,
With real live airplanes.
Some day I'm going to fly,
I'll be a pilot to,
And when I do,
How would you,
Like to be my crew?
On the good ship
Lollipop
Its a sweet trip
To the candy shop
Where bon-bon's play,
On the sunny beach
Of peppermint bay
Lemonade stands,
Everywhere
Crackerjack bands,
Fill the air,
And there you are,
Happy landings on a chocolate bar.
See the sugar bowl
Do a tootsie roll
In a big bad devils food cake,
If you eat too much,
Oh, oh,
You'll awake,
With a tummy ache.
On the good ship
Lollipop
Its a nice trip,
In to bed you hop,
And dream away,
On the good ship
Lollipop
Federal Reserve Places 70% Per-Security Limit on Treasury Debt Holdings
<< <i>I think it's come up and I have always wondered, how can a treasury auction fail if the fed can simply just print money and buy all of the treasuries? This is how... there is a limit of how much they can purchase... it used to be 35%, now it is 70%. Of course it is self-imposed, so it is meaningless. If this isn't a sign of doom, I don't know what is.
Federal Reserve Places 70% Per-Security Limit on Treasury Debt Holdings >>
So, does this mean that they just have to issue a higher face value of worthless paper to get the results they want, since they can only buy 70% of it????
they seem pretty unlikely, but they are true if/when they happen. with easy to follow reasoning and explanations. and written by a PM bull more as a note to caution and probably a contrary article to get a piece of internet space this slow week.
another note is mentioned on silver being over-bought
Great video from 60 minutes.
LINK
http://www.cbsnews.com/video/watch/?id=7166293n&tag=cbsnewsMainColumnArea.5
Why is China building ghost cities?
If China stops building cities that have no (or very few) living in them, does that mean commodities will crash?
If you want to see what I mean google China and Ghost cities.
Link to Business Insider article from 14 Dec 10
Lots going on here I don't understand.
<< <i> does that mean commodities will crash?
. >>
Check out these results - from January 1970 to December 17, 2010
Gold was $35.40 Now $1376 Up 3786%
Silver was $1.88 Now $29 Up 1453%
Aluminum was $606.20 Now $2307 Up 280%
Copper was $1569 Now $9102 Up 480%
Lead was $324.70 Now $2379 Up 633%
Nickel was $2881.60 Now $24695 Up 757%
Tin was $3818 Now 26225 Up 587%
Zinc was $309.90 Now $2241 Up 623%
S&P 500 gained 1400% during this period while gold was up 3786%.
<< <i>
<< <i> does that mean commodities will crash?
. >>
Check out these results - from January 1970 to December 17, 2010
Gold was $35.40 Now $1376 Up 3786%
Silver was $1.88 Now $29 Up 1453%
Aluminum was $606.20 Now $2307 Up 280%
Copper was $1569 Now $9102 Up 480%
Lead was $324.70 Now $2379 Up 633%
Nickel was $2881.60 Now $24695 Up 757%
Tin was $3818 Now 26225 Up 587%
Zinc was $309.90 Now $2241 Up 623%
S&P 500 gained 1400% during this period while gold was up 3786%. >>
You are choosing individual commodities and comparing to a broad basket of stocks. I could just as easily choose individual stocks and compare to a broad basket of commodities. Would make those commodity gains look pretty tame.
Knowledge is the enemy of fear
<< <i>wage increases will come later when people know there is inflation
Glen >>
Only in China. Nobody (unions , they set wages for everyone else), is gonna see a wage increase for a decade. In fact, wages as defined as hourly income and benefits are declining. And will decline further as taxpayers voice opinion on public retirement and healthcare benefits. The violence that I see concerns me much more than the improbable US default on its bonds.
Knowledge is the enemy of fear
<< <i>You cant get true inflation without wage increases... >>
You just keep believing that...
Once these states (starting with Michigan and California) that are so over burdened with medicare and union pensions start going bankrupt then the smelly stuff will hit the fan.
<< <i>Once these states (starting with Michigan and California) that are so over burdened with medicare and union pensions start going bankrupt then the smelly stuff will hit the fan. >>
It will be called QE3.
<< <i>
I could just as easily choose individual stocks and compare to a broad basket of commodities. Would make those commodity gains look pretty tame. >>
No one can pick and choose individual stocks and have as much success. There are way too many stocks to do that. There are not
that many commodities.
If you feel it's so easy, then go ahead and pick 10-20 stocks that will gain 3000% over the next thirty years. We will sit back
here on these boards and watch them. If it's so easy, then please take the time to give us these companies.
<< <i>Cohodk's point was that you can cherry-pick commodities and stocks and paint any picture you want. If the cherry-picking claim is true, I guess the challenge here would be to find commodities that have NOT outperformed stocks/SP500. Anyone up for that challenge? >>
to both
to ef, your point is taken, though and the increases were interesting, but i doubt anyone sold their investment souls 40 years ago and bought gold or any of the others.......AND hung onto it the whole time...i would a sold after the 80's peak and then rebought at the low point for both silver and gold and then i'd have some really big numbers.
nobody invests this way is my point
<< <i>
<< <i>
I could just as easily choose individual stocks and compare to a broad basket of commodities. Would make those commodity gains look pretty tame. >>
No one can pick and choose individual stocks and have as much success. There are way too many stocks to do that. There are not
that many commodities.
If you feel it's so easy, then go ahead and pick 10-20 stocks that will gain 3000% over the next thirty years. We will sit back
here on these boards and watch them. If it's so easy, then please take the time to give us these companies. >>
Of all the commodities you picked, only one gained 3000% (per your numbers). How much is corn up since 1970, wheat, soybeans? I dont need to pick 10 or 20 stocks to go up 3000%. Did you know that MSFT went up on average of 1% a week from the day it went public in 1986 to its peak in 2000. You wanna do the compounding on that return? I could pick 19 stocks that go bankrupt and have only one (MSFT) and blow away any commodity returns. In fact, many of those commodity returns are weak compared to real estate prices in select areas. My point is, you must compare specifics to specifics, or generalities to generalities. You cant mix them up.
FWIW---Minimum wage is up 335% since 1970. So how much are some of these commodities really up? Aluminum is down.
But to get back on the inflation discussion. Here is a table of minimum wages. Notice how the rise in most commodities--which started to move in 2007 with the ethanol mandates-- coincides with the increase in wages. Its simple, if people dont have the money they cant spend it. And if they cant spend it, prices can only go so high. There is a lot of money being spent on silver and thats why the price went up. Unless wages go higher, any gains in prices will be lost.
wage table
Now I do see where the minimum wage is set to go higher in 7 states next week. This will certainly help the inflation cause. And if Obama can get the Federal minimum up to his proposed $9.50, then we'll have something to worry about.
BTW---My local car dealer has a glut of Toyotas and is pricing them 12-15% lower than 6 months ago. Why does Bernanke and most others fight lower prices? I love 'em (lower prices), but I'd never buy a Toyota.
Knowledge is the enemy of fear
make our predictions for the up coming year.
Here are mine:
1. During the next year spot Gold will go above $1,550.
2. I agree with Meredith Whitney, at least 50 cites in the U.S. will default on their Muni bonds next year causing a panic in the bond market. The States, and Obama, will fight tooth and nail to keep the cites from filing bankruptcy.
3. The spot price of Silver will breach $40 next year.
4. The spot price of oil will breach $110 per barrel. Get ready for $3.50 gas.
5. A great deal of the housing market will see additional declines of as much as 15%.
6. Most interest rates will see increases, as investors become leary of notes and bonds in general.
7. The Fed will be forced to buy an additional TRILLION dollars worth of mortgages, and muni bonds, as well as unwanted treasuries.
8. Although the government will continue to claim we have NO inflation the cost of nearly everything, with the exception of housing, will increase by over
15%.
9. Someone credible will discover that the real losses in Freddie and Fannie is at least a TRILLION dollars, and not the 200 billion claimed by the administration.
The new congress, which claims they want to bankrupt these entities, and privatize them, will do NOTHING.
10. The unemployment rate will stay above 9% as many companies do as much
Business as possible outside the U.S. to avoid a whole new set of Taxes passed by desperate states and cities.
<< <i>But to get back on the inflation discussion. Here is a table of minimum wages. Notice how the rise in most commodities--which started to move in 2007 with the ethanol mandates-- coincides with the increase in wages. Its simple, if people dont have the money they cant spend it. And if they cant spend it, prices can only go so high. There is a lot of money being spent on silver and thats why the price went up. Unless wages go higher, any gains in prices will be lost. >>
The biggest flaw in your statement is ignoring the impact of a weakening currency and other economic forces which cause inflation (increases in expenses, reduction in purchasing power) but have ZERO to do with wages in this country.
Oil and energy prices are a HUGE factor in the price we pay for everything we buy. If the USD continues to weaken against other currencies, oil and other commodities will continue to increase in price. Even if the US buys less because wages are lower, these are international markets and the price of oil has little to do with wages. So if energy prices continue to climb (in USD) and all else stays the same with stagnant wages, prices are going UP, not down or flat. The same argument can be made for the raw materials and other commodities. Oil is currently at $91 because of the USD, not because of world demand or consumption.
The US imports an extremely large portion of all consumer products. If the USD goes down versus most other currencies (as it has all year), particularly the Chinese yuan, will prices for US consumers go up or down? Again the prices will INCREASE, and it has nothing to do with wages. Prices on imported goods are not going any lower simply because Americans are making the same or less in wages and can't afford to buy as much.
A TV set costs what it does not because of how much Americans make, but because of the costs to acquire the raw materials to make it, the labor and machines to put it together, and energy to transport it, and the retailer who sells it, the costs to market it, and what a competing set is sold for. Even if no one can suddenly afford a $1000 TV doesn't mean that the price of a $1000 TV will drop to some lower price. Market forces will cause the mfr to stop or reduce production, and if a mfr can no longer stay in business, then factories will close, rather than discount product below mfr cost or work for free.
Then there are taxes, which are destined to increase everywhere and for everyone in the US. If corporate taxes increse, they get passed onto the consumer which results in higher prices, but not necessarily higher wages. And you could argue that an individual tax increase is the same as either earning less or paying more for everything. Again we have prices/expenses going up, purchasing power going down with no increase in wages.
While there may be valid correlations such as you've described, inflation does not require increasing wages. In fact, you could argue that inflation could cause increasing wages. Who is going to work for $7/hr if it takes 1 hour to buy a loaf of bread? Most would rather logically take government aid then work for peanuts. Absent slave labor (i.e., illegal immigrants), business owners are forced to pay more for labor which gets passed on to the consumer in prices.
The residents of ZMB are probably making more today (in $ZMB) than they were a few years ago, but I think if you looked at the numbers their overall purchasing power has probably declined.
I remember the 70s well as I entered the workforce after completing college.
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Unemployment will remain stubborn in the private sector and for municipalities and regional govts. For fed gov, employment will rise steadily with mass hirings into security and regulatory areas (read what you want into that). Short of a WPA/CCC type of effort to repair and develop infrastructure, there looks to be little job growth in the cards for J6P. For cube dwellers, they are ready to leap from the austere last couple of years of no cola, no merit increases, increased workloads, and considerably more supervision to something better...hell, anything better, even if it is in La Paz. Cube dwellers are likely to get more expensive for owners to keep but it's doubtful there will be a significant increase in their numbers. Small business will grow slowly in '11 as new marketing, new products, new levels of service separate the wheat from the chaff but they will become even bigger tax magnets and more regulated so the net effect on job growth will likely be near 0. Not a very optimistic outlook for employees but on the other hand, the boomers are going to be quietly slipping out the back door; short visit to HR, a few handshakes and a plaque, and it's Social Security and a pension/annuity, baby, we're outta here and that may leave some room for the up'n comers that have the qualifications.
Home interest rates/housing should remain stagnant, at best. Most all of the paper goes directly to fannie once it's made...the gov has this industry by the neck. There is buying and lending but it's a tricky market for consumers hunting foreclosures, short sales and other distressed properties...many pitfalls to trying to get this inventory off of the books, uphill at best. For straight up buyers and sellers, it's a stalemate. Buyers are expecting a discount from full asking price (like 20%) and sellers that don't need to sell aren't moving off their number, preferring to lease their properties into a booming market of renters just to cover their nut. Legitimate properties are moving but very slowly. No game change here in '11.
Gold at 1500 seems pretty realistic, particularly if it settles above 1400 for a month or two, I'm still amazed at +1200 myself but there are some strong forces at work here. Silver at 40 may be the new bench, hard to see what would keep it from settling there, much less making a few runs at 50.
Social services, govt programs...all soon to be under withering fire from the newly minted congress. Social unrest might get to be more conspicuous, particularly from those that rely on these things to keep their i-phones and HDTV accounts going. We are at an untested social nexus here: The gov has become more and more strident in caring for the underserved and as govt grew, the underserved got more service (read: entitlements and programs). Now that govt budget is shrinking from the township level on up, the gains from the earlier growth must diminish, considerably. Folk are going to realize, in a reality type of way, that you have to cut spending. The outrage at having schools shut down or consolidated, lunch/after school programs being done away with, very reduced public service as in firefighting, no more library hours, police, hospital services will mean...less service. Can a family be on the evening news with their home burning and no firefighters dispatched? Does it take a handgun involved situation to get the overstrapped police force to issue a dispatch? If you are sick, go to Walgreens because there are 8 hour waits in ER's, the few that aren't on "Drive-By" status. The fed can mandate and regulate the munis to keep services on but if there is no money to do it, how's it going to happen...is the fed going to be responsible for keeping the lights on at the shelter? And then, there's the newly minted congress.
Cost of gas, and electricity has been rising and will continue to do so. Gas at $5 and oil at 100+ is in the cards for '11, I think $3.50 or even $4 is unrealistic. As the gov regulates the energy producers (petroleum in particular) more, it will cost more. Mandate all the clean air, environmental compliance, drilling bans, what ever you little mind can work up, and it will raise the cost of refining oil into gasoline and getting it to the consumer. The strangle hold of regulations that the gov has and will be having on the energy producers will drive the cost to the consumer up, up, up. Now, add on the new taxes that the states and fed are going to be putting on fuel just to keep the gov doors open and you're going to see some fear and loathing on the highways and byways.
Food has to be transported, that costs gas/diesel and that means folk will be paying more for food even if the shippers use trains more than 18 wheelers. Throw in some foul weather, a dock strike or two, union unrest, and we could be seeing a whole different food distribution expense and that means higher prices. The reality is that food must continually go up to support growth and profit. When has food ever had a sustained period of reduced prices...all God's people gotta eat and there's more people. So hopefully, things go up across the board as in wages, PM, other assets so we can all afford plenty of food in '11.
I'm optimistic for '11. I think we will see some very large changes in the way things are done and a lot of the Norman Rockwell Americana stuff is being slowly moved to the history books and old magazines but we will go forward in what ever fashion. Those that keep their heads in the game and work at staying successful should do just fine but it's likely going to take a little more effort to do so. Those that are looking for some help will probably find less of it. Prices are going up, it just cost more to play now and I don't think we're talking about credit...we're talking cash and real assets.
Got CASH?
http://noir.bloomberg.com/apps/news?pid=20601070&sid=a6D7iUFmqYgo
Knowledge is the enemy of fear
<< <i>I often mention the importance of demographics and here is just another story with some points to ponder.
http://noir.bloomberg.com/apps/news?pid=20601070&sid=a6D7iUFmqYgo >>
weird that the headline said "population changes" which in my book many times can have little or nothing to do with demographics which is what the article was about and your use of the word in your post.
i am naive to assume that the headline writers have any clue as to the content of the story? they must be just trying to fit a type font and size, i guess. sometimes the headline is all that is read..but i digress
oh btw more good tidbits