1) Growth will slow to just 1.1% in 2013 because of tax increases, spending cuts, and other factors. CBO projects 2012 GDP to increase just 2%.
2) Unemployment rate will stay above 7% until 2015. It will increase to 8.9% at end of this year and hit 9.2% at the end of 2013.
3) Deficit will be $1.1 trillion in 2012, the fourth consecutive year above $1 trillion.
Are you kidding me? This is Japan all over again...Worse!
1. Unemployment in Spain has risen to its highest level for almost 15 years. It is now at 21.5%, which confirms that Spain has the highest jobless rate among industrialised countries. Europe's unemployment is averaging above 10%. While the real unemployment rate in the US is around 15% with a background of spiralling debt, the moment of truth for the industrialized countries is getting closer. None of this augers well for our children.
2.Corn, soybeans, rice and wheat are the most important food staples consumed in the world. The majority of countries do not produce more than what their populations can consume. Output from exporting countries is an important geopolitical issue. Increased demand for global food supplies can cause localized shortages and price spikes. Food shortages and price increases, in turn, can lead to political turmoil and social unrest in countries whose populations depend on these imports for survival. Expect shortages to continue while cute expressions like "arab spring" are just that. A cute expression for a nightmare economic scenario.
3.Last week, despite the strong dollar, silver surged and closed above its 50-day MA. It may be that the action of strong silver will rub off on gold, taking gold above 1700. Below is a 3 year chart for silver. Looking bullish, but a break above $35.70 would confirm this. The ratio between gold and silver is 50 (one ounce of gold buys 50 ounces of silver). Historically it would be about 15. On this basis silver is cheap.
4.Rare Earth Elements have a range of sophisticated uses from missile systems, precision-guided weapons (laser guided smart bombs), night vision and radar systems to hybrid cars, batteries, cellphones and wind turbines. I read that sentence over and over to understand the implications of shortages of these metals. They have unique magnetic (GM has moved its whole magnets division to China), optical and other properties crucial for miniaturization, lasers and energy efficiency. China controls about 90-95% of world supply....and we thought that oil was a vital commodity!
5.The Germans are proposing that Greece, a sovereign country, transfer its right to national self-determination to an overseer. The Germans argue that given the failure of the Greek state, and by extension the Greek public, creditors have the power and moral right to suspend the principle of national self-determination. Given that this argument is being made in Europe, this is a profoundly radical concept. About 40 percent of German gross domestic product comes from exports, much of them to the European Union. The Greeks are well aware of this, so don't expect them to sit back and take the bullying. They still haven't forgotten the Nazi occupation in the forties.
6.WSJ: A unit of China National Petroleum Corp. agreed to buy a big slice of a shale-gas play in Canada from Royal Dutch Shell PLC, bolstering Beijing's footprint in North America's energy patch, as two other Chinese companies sealed energy deals in the U.S. and Europe. Next week, Prime Minister Stephen Harper travels to China, where he has promised to promote Canada's energy potential to Chinese officials and executives. Mr. Harper's government has also said it is eager to export its growing oil-sands production to China, after the U.S. recently rejected a proposed pipeline from Canada to Texas. Currently, Canada sends almost all of its oil exports to the U.S. KISS: Bad move Mr. Obama. This is a perfect example of how a top down government functions.
7.Richard Russell: If you listen carefully, you can hear the heart-beat of the market. It's a slow, heavy beat, as if the market is waiting for something. That something is going to be BIG. Bigger than what anyone is expecting. 2012 is fated to be a monster year. Keep your eyes on the dollar and gold, and the newspaper headlines!
Too many people miss the silver lining because they're expecting gold - Maurice Setter
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