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Is the Worst Over?

Saturday, December 12, 2009 15:49

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May 1, 1930 “While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.” – President Hoover

June 29, 1930

“The worst is over without a doubt.” – James J. Davis, Secretary of Labor.

Federal Employee Pay raises, TARP, Climategate, Consumer Sentiment, Short Sales

Congressional appropriators agreed Tuesday night to give civilian federal employees a 2 percent pay increase — which includes a locality pay increase President Obama didn’t want.

Government workers will get a 1.5 percent nationwide increase in base pay and a 0.5 percent average increase in locality pay. The final agreement goes against the wishes of Obama, who called for a flat 2 percent jump and no locality increase.

Locality pay helps address the gaps between federal pay and private sector wages in high-cost areas of the country. The Federal Salary Council estimates the current private-public gap is about 26 percent, on average. Locality increases mean a federal worker in Cincinnati might get a smaller increase than a worker in Washington, D.C., because of local costs of living. [Why aren’t Social Security recipients and disabled veterans receiving their COLA raises for the next few years as well?]

The U.S. Freight Transportation Index fell in October to its lowest level for October since 1996, as industry shipments decreased for two months in a row.

Shipments suffered their biggest October year-on-year decline, falling 10.5 percent, since the department began calculating the index 20 years ago.

More of America’s largest companies will shrink their staffs than will hire in the next six months, according to a quarterly survey from the Business Roundtable, a group of large-company CEOs released Tuesday.

Nineteen percent of the CEOs expect to expand their work forces, while 31 percent predict a decrease in the next six months, the survey found. That’s slightly better than the 13 percent who expected to increase hiring three months earlier. At that time, 40 percent forecast cuts.

Treasury has told Congress that TARP funds will be extended to October 2010.

Excessive spending sent America into the abyss and our President now tells us we are going to spend our way out of the downturn. What wisdom – it intones going for broke. The call is for more leverage and more debt. Mr. Obama will defy the natural economic laws that caused this mess in the first place. This, of course, has horrified the Fed, which wanted to remove $1.5 trillion from the economy. Now Obama wants a large chunk of the incoming TARP funds that the Fed wanted to retire. Inflation is on the way big time, and at best we will go sideways for another year. The dollar will fall and test its old lows at 71.18 and gold and silver will reach new heights. As 2010 progresses credit will tighten further and eventually interest rates will begin to rise.

Meredith Whitney says the government is out of bullets, but she failed to deal with what the Fed is capable of. She is very good, but still doesn’t see the entire picture and what is behind all this. Then again, maybe she is only willing to go so far to protect her business.

Downgrades in Greece and Spain will trigger hidden credit default swap liabilities. This is our fear. Some may not be able to meet their obligations. A default would affect markets worldwide.

The world would cut greenhouse-gas emissions at least 50 percent by mid-century under a United Nations draft proposal being debated by 192 countries in Copenhagen.

The plan obtained by Bloomberg News says nations should collectively reduce the heat-trapping pollution that many scientists say could lead to catastrophic climate change between 50 percent and 95 percent from 1990 levels by 2050.

Industrialized countries as a group are called on to reduce their combined gas discharges by 75 percent to more than 95 percent in the period.

The UN draft, set for more reviews and final consideration on Dec. 18, requires nations and their polluting industries to limit the planet’s temperature rise to between 1.5 degrees Celsius and 2 degrees Celsius from pre-industrial times to “avoid dangerous climate change.”

Financing efforts by developing countries to mitigate the damage of climate change, as well as pay for emissions reductions, was absent from the draft. [Can you imagine these outrageous lies in the face of the emails that have been exposed revealing the true fraudulent nature of global warming.]

Consumer sentiment improved markedly in early December, according to media reports on Friday of the Reuters/University of Michigan index. The consumer sentiment index rose to 73.4 in early December from 67.4 in November. The increase was larger than expected. The consensus forecast of Wall Street economists was for sentiment to rise to 69.0. This is the highest level of consumer sentiment since September. The strong stock market and last week’s better-than-expected job report were seen boosting consumer moods.

Banks are beginning to go along with short sales in increasing numbers, three years into a U.S. housing slump that pushed the economy into a recession and cut resale values by 30 percent from the peak in July 2006. Short sales almost tripled to 40,000 in the first six months of 2009 from the same period a year earlier. Yet for each short sale, there were 25 foreclosures started or completed in the first half of this year, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency.

In time we will find out whether Dubai was the biggest construction crash of all time. The government of Dubai has washed its hands in the collapse saying it is a private matter. London banks, now owned by the taxpayers have lost some $50 billion. These two banks, the Bank of Scotland and HSBC, are already on life support. There are several European and US banks that will be taking losses as well. One of the interesting aspects to the Dubai problems is the reflection on two banks that have been involved in the gold and silver suppression. The Bank of Scotland had a somewhat minor role, but HSBC had a major role. These events in Dubai will make it difficult for these banks to overcome their problems. The Bank of Scotland could go under, but under the circumstances neither will again be able to affect gold and silver prices in the way they have in the past. Their disservice to humanity should soon come to an end. The lesson to be learned over the past six thousand years is that printing money can never replace gold as the only real money. Gold holds its own as currencies all eventually fall. In just the past ten years, since we had our subscribers go long gold in June of 2000, gold has appreciated 80% versus the dollar and Agnico Eagle (AEM-NYSE) has risen from $5.00 a share to $83.50 and is currently $64.00. As you can see its performance is far beyond 80%. That is where the real money is made.

We have certainly exposed Climategate and well we should have. The Russians, by hacking East Anglia University’s Climate Research Unit, saved the world from onerous taxation and from world government. The bottom line was the emails revealed a giant hoax, which had been going on for years, headed by Al Gore, Obama’s Science Czar John Holdren and Phil Jones, head of the CRU who quit his post and Michael Mann of Penn State. As a result of this exposure the Academy Awards have asked Gore for his award statue to be returned. “An Inconvenient Truth, a film, showed at the Awards was a total fabrication. Then there was Copenhagen, where 16,500 freeloaders from 192 countries flew in on private jets to consume 200,000 meals and produce an estimated 41,000 tons of carbon dioxide.

What we have here is purely academic fraud and criminal acts. The result of which is the UN Copenhagen Conference, where the exposure of the fraud is simply ignored. At the conference developing countries have reacted furiously to leaked documents, called the Danish Text, where world leaders will be asked to sign a document, which relieves the UN’s future participation and puts it in the hands of the World Bank. People in rich countries will be permitted to emit twice as much carbon per person as allowable for the Third World. Effective control of climate change will be passed to the World Bank, the Kyoto protocol will be abandoned and Wall Street and the City of London will make the decisions. The Third World leaders found out that they are not going to get tax revenue from the First World. They are going to pay taxes to the World Bank just as the First World and everyone else is. There will be abortion on order, and a limit as to who will be allowed to breed.

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