Professor Nouriel Roubini, of New York University, says there’s no economic respite for the US and predicts at least 10 years of falling living standards: No defence left against double-dip recession
Given the state of the world, and how religious fanaticism lends its hand to violent extremism – it’s a relief to find that Stephen Hawking has finally come to the conclusion that a God is not necessary in the earthly or cosmological scheme of things: Why God Did Not Create The Universe
Much has been made of Obama’s announcement that the Iraq war is “over”. Window-dressing propaganda of course, as 50,000 troops remain and countless thousands of US-paid mercenaries.
And even as Obama has tried to say he didn’t support the Iraq war, he is following in the exact same footsteps by making the war in Afghanistan is “own”. Can he not see how the same fate awaits the misguided adventure in that country? Apparently not.
Paul Craig Roberts put all this into laser-focused perspective in his essay: The True Cost of War
A fascinating article by Ambrose Evans-Pritchard – Obama could kill fossil fuels overnight with a nuclear dash for thorium - looks at the idea of using thorium instead of uranium as fuel for nuclear power stations. Sounds like real breakthrough technology – if vested interests can get out of the way.
Some interesting figures have come out of the 2010 Q2 data published by the World Gold Council. Physical gold demand by weight rose 35%. But when expressed in dollar value, it rose a hefty 77%. This is good news for all those who expect the continuing devaluation of paper money, and who are hedging against such an eventuality by owning gold.
And as David Galland points out in Uncle Scam – today’s dollar is only worth 18 cents in 1971 terms, the year President Nixon closed the gold convertibility window.
Bond yields are tumbling, as investors seek “safe havens” for their cash. Trouble is, no country is sound enough to warrant investing in it – and those accepting rates of as low as 1.02% on 10 year Swiss bonds, and of 2.11% on German Bunds are in for a rude awakening down the track.
The desire to find “safety” is understandable enough, but to seek it in the debt of nations is foolhardy, and represents behaviour more like lemmings following each other over a cliff. Why? Because the levels of indebtedness and economic fundamentals in all developed nations does not support the idea that such bonds are “safe”.
Far from it. Investing in bonds is investing in government debt – the very same debt that is getting us all into trouble. The same debt that must be paid back by citizens of each respective country – either by taxation or the stealth tax of inflation.
If such countries and their citizens simply revolt and do not pay back their debts – then bond investors are left carrying the losses.
In my book, the very last place I’d be looking for “safety” is in government bonds. So don’t be a lemming. If you are really looking for safety, then you should be in gold - the only real money.
Ambrose Evans-Pritchard takes up the latest developments in: Fresh flight to Swiss franc as Europe’s bond strains return
Apparently “yes” – according to the latest leak of official documents by WikiLeaks – this time of a CIA memo.
As of writing this, gold is selling for US$1,241 per ounce – a bit of a surge since yesterday’s bad economic and housing news out of the USA. So the question arises … is now the best time to buy gold, or is it already too expensive?
Jeff Clark has the answer in: You’ll Buy Gold Now And Like It!
Ambrose Evans-Pritchard summarises the moves towards the financial crisis end game:
Hard-nosed Fed sends global markets reeling
Governments love fudging the numbers, especially when it comes to disclosing the actual size of the national debt. One way of discounting such a debt is to ignore what is termed “unfunded liabilities” – things like social security or pensions.
Well, the Institute of Economic Affairs has calculated the UK’s national debt – taking into account such unfunded liabilities – and come up with a total of £4.8 trillion (US$7.74 trillion), or £78,000 (US$121,000) for each and every person in the UK. That is a whopping 333% of the UK’s GDP!
It’s figures like these that underscore the severe economic situation we are really in – because if and when other countries calculate their national debt in the correct manner, I’m quite confident a similar bleak outlook will prevail.
