Food Inflation Kept Hidden in Tinier Bags

Clifford, and Rampell, www.nytimes.com, 03/28/2011

Chips are disappearing from bags, candy from boxes and vegetables from cans.

As an expected increase in the cost of raw materials looms for late summer, consumers are beginning to encounter shrinking food packages.
With unemployment still high, companies in recent months have tried to camouflage price increases by selling their products in tiny and tinier packages. So far, the changes are most visible at the grocery store, where shoppers are paying the same amount, but getting less.
For Lisa Stauber, stretching her budget to feed her nine children in Houston often requires careful monitoring at the store. Recently, when she cooked her usual three boxes of pasta for a big family dinner, she was surprised by a smaller yield, and she began to suspect something was up. Read more»

Q4 2010 “Flow of Funds”

Doug Noland, Credit Bubble Bulletin, www.prudentbear.com, 03/25/2011
Federal debt has increased $4.450 TN, or 66%, in just the past 10 quarters… Comparing Q4 federal receipts/expenditures to pre-crisis Q4 2007, it is worth noting that receipts were down 12.1% from three years earlier, while expenditures were up 21.1%.  Receipts would now have to increase 60% to match federal expenditures. Read more»

Long-term bearish on China and the US

Steve Saville, Interim Update, www.speculative-investor.com, 03/24/2011 [Excerpt]

”Monetary inflation also leads to mal-investment by creating the impression that there is a greater amount of real savings than is actually the case.”
When it comes to their outlooks for China’s economy, most analysts fall into one of two groups. The first group is outright bullish on China’s prospects over all time frames, while the other is very optimistic on a long-term basis but is concerned about the potential for a painful short- and/or intermediate-term ‘correction’. In other words, most analysts are long-term bullish.??As discussed in the past, we fall into neither of these groups.

We also can’t be counted amongst the naive souls who labour under the delusion that the US is still the “land of the free” and that China is still a Soviet-style basket case.??We are long-term bearish on the economies of both the US and China, primarily because the governments of both countries are now headed down paths that involve using monetary inflation and greater government control of the economy in an absurd effort to counteract the disastrous effects of earlier monetary inflation and controls (China spent much of the past three decades in a bullish trend as far as government involvement in the economy is concerned, but that trend appears to have ended). Read more»

The Fed Is Wrecking the Dollar

Joseph T. Salerno, www.lewrockwell.com, 03/21/2011

Testimony before the US House of Representatives, Committee on Financial Services, Subcommittee on Monetary Policy, March 17, 2011

The old argument has recently come back into vogue that moderate inflation is desirable to prevent the far greater evil of deflation. What used to be roundly condemned as “creeping inflation” in the 1950s by Fed officials and mainstream economists alike is today given the scientific-sounding name “inflation-targeting” and hailed as the proper goal of monetary policy.1 In the past decade, this view has been promoted by many mainstream economists, most notably former Fed Chairman Greenspan and current Fed chairman Bernanke. But this view is based on a fundamental confusion. It conflates deflation and depression, which are two very different phenomena. Falling prices are, under most circumstances, absolutely benign and the natural outcome of a prosperous and growing economy. The fear of falling prices is thus a phobia – I call it a “deflation-phobia” – which has no rational basis in economic theory or history. Read more»

QE: Hyper-inflation to Oblivion

U.S. Debt Jumped $72 Billion Same Day U.S. House Voted to Cut Spending $6 Billion

Terence P. Jeffrey, cnsnews.com, 03/16/2011

The national debt jumped by $72 billion on Tuesday even as the Republican-led U.S. House of Representatives passed a continuing resolution to fund the government for just three weeks that will cut $6 billion from government spending.
If Congress were to cut $6 billion every three weeks for the next 36 weeks, it would manage to save between now and late November as much money as the Treasury added to the nation’s net debt during just the business hours of Tuesday, March 15.

Everybody Knows Bernanke Is a Joke

Editor’s Comment: In a fiat money system, one in which there is no inherent or intrinsic value to the monetary unit, no exchangeability with anything of essential value, confidence in the central banking institution is paramount. What’s more, in our personalized age, THE Chair of the Fed must be held in awe, he must be reverenced as a monetary and economic wizard, as the high priest at the summit of the secular realm. Otherwise, there’s a problem. Mr. Murphy’s article below, speaks well to this issue.

Robert P. Murphy, www.mises.org, 03/17/2011

As YouTube and other digital media move beyond computer-savvy young people into the ranks of even stodgy businessmen, these subversive outlets become serious problems for the ruling elite. This trend is epitomized by the radical change in the Federal Reserve’s image. In just a few short years, the Fed has transformed in public opinion from a mysterious, wise, and boring institution into a fascinating engine of corruption and comedy. Read more»

Can the Fed realistically shrink its burgeoning balance sheet in the current economic environment?

Dan Norcini, www.traderdannorcini.blogspot.com, 03/12/2011

Please note carefully the chart I have created here detailing the growth in the Federal Reserve Balance Sheet in comparison to the level of the S&P 500, the broader level of the US equity markets. I should point out here that I have chosen to use the actual amount of Securities being held by the Fed as representative of its entire balance sheet since it is mainly these that we are interested in for our purposes instead of overall reserve credit. The reason for this is because all of the growth in the Fed’s balance sheet has either come from the purchase of MBS securities, Treasuries and US Agency Debt.

The first thing to note about this chart are the two points noted on the chart; where QE1 began and then when QE2 was announced and then later commenced.

Read more»

Time to Get Precious Metals Out of Storage in London?

Avery Goodman, seekingalpha.com, 03/09/2011
There are six primary players in the London based precious metals storage market. Generally speaking, these six are the ones who store and transfer a vast majority of all gold, silver, platinum and palladium traded on the London Bullion Market Association (LBMA) and the London Platinum and Palladium Market. In alphabetical order, they are Barclays Bank (BCS), Deutsche Bank (DB), HSBC (HBC.B), J.P. Morgan (JPM), Scotia Mocatta and UBS (UBS).

Together, the “big six” have formed a corporate entity, named “London Precious Metals Clearing Limited” (LPMCL). It is the primary standards-setting entity for the alleged fractional banking scheme that is spoken about so much by the Gold Anti-Trust Association (GATA). GATA alleges, among other things, that this group of banks is promising to “store” gold, silver, platinum and palladium in what is known as “unallocated storage,” while keeping almost no metal in their vaults. The issue was made infamous at hearings held by the Commodities Futures Trade Commission (CFTC) in America on March 25, 2010. Read more»

Doug Noland’s Credit Bubble Bulletin

www.prudentbear.com, 03/11/2011
Selected Notes:
March 7 – Bloomberg (Zachary R. Mider and Jeffrey McCracken):  “The merger boom that started in 2010 isn’t looking like any of the past three. The takeover binge of the 1980s was fueled by Michael Milken’s junk bonds; the late- 1990s wave of Internet and telecom deals, by inflated stock prices; and the private-equity frenzy that produced a record year for deals in 2007, by leveraged loans.  The more recent surge comes from the expanding BRIC economies — Brazil, Russia, India and China — and beyond.  Deals are rising among the companies that supply raw materials to these countries. Worldwide deals in energy, power and basic materials made up about a third of the merger and acquisition market in 2010, compared with about 20% in the previous decade… Emerging-market acquisitions helped the total value of announced deals for 2010 grow 27% to $2.2 trillion, driving up advisory fees.” Read more»