BREAKING ECONOMIC NEWS
You Can’t Eat Gold,Robert Morley
April 29, 2008 From www.theTrumpet.com
How good is money when you can’t buy food? The Japanese are finding out—and Americans are only a drought away.
Robert Morley The world teeters on the edge of economic crisis. The main question now seems to be how big and how long. Numerous financial experts warn of a Great Depression repeat. But surviving the next Great Depression won’t be so easy. Last time, few people had money, but if they did, for the most part there was food available. This time, the depression may well be accompanied by widespread food shortages. As the Japanese are coming to realize, when there is no food, the value of money rapidly approaches zero.
Many economic analysts clearly see the economic problems facing America: the crashing housing market, insolvent banks, massive monetary inflation, the devaluing dollar, falling real wages, rising food and oil prices, and so on. Many also see the danger in the global food shortages. But at the same time, it is amazing how many think that all you need to do is invest in gold, or silver, or buy some agricultural commodity stocks, and you will be okay.
There is a fatal flaw in this thinking. Yes, as the United States continues to unravel, the price of gold may temporarily soar into the stratosphere. But no matter how many gold coins you have, if food supplies run out, bars of gold won’t quell the hunger pains. You can’t eat gold.
TheAge.com reports that Kazakhstan, the world’s fifth-biggest wheat exporter, is the latest major country to prohibit grain exports. If Kazakhstan were alone, it might not be a big deal—but unfortunately Kazakhstan is joining a growing list of other countries, including Russia, Ukraine and Argentina, that are also limiting wheat exports.
At the same time, America’s wheat stockpile is at dangerously low levels—levels not seen in over 60 years. And 60 years ago, America had a population of less than 150 million. That figure has more than doubled since that time.
The Department of Agriculture says that in the year ending May 31, U. S. wheat inventories could be down 47 percent to 6.6 million tons. That means there is a U. S. emergency wheat reserve supply of only about 43 pounds per person.
Expecting record-low food reserves to provide for record-high populations is asking for record-breaking hunger.
But wheat is only one of many foods in short supply; rice, corn and other agricultural commodities are near multi-decade lows too. All it would take is one bad global harvest and America, along with the rest of the world, would be in big trouble. Just one bad year! We had seven of them in a row during the 1930s.
It wouldn’t matter how much money a person had; money can’t buy what doesn’t exist.
Take Japan for example.
Japan is the world’s largest net food importer. The nation imports 86 percent of its wheat and approximately 60 percent of its daily food requirements.
Japan’s problems began when countries such as Thailand, Vietnam and China imposed export curbs on rice to conserve food for domestic populations. Then Japan got hit again when global shortfalls in cattle feed led to a butter shortage, and again when global wheat prices went through the roof.
Food shortages have intensified to the point that, as Bloomberg reports, Japan will ask the World Trade Organization (wto) to introduce rules to prevent countries from restricting exports of wheat, rice and other grains. Japan may be about to find out that wto rules don’t mean much when people are at risk of starvation.
The shortages have come as quite a shock to many Japanese who, like Americans, are accustomed to being able to buy whatever they want as long as they have the money. “Until now Japan could rely on purchasing food from anywhere in the world because consumers can afford to pay,” relates Yasuhiko Nakamura, head of the government’s food education council. “In the future, it may be impossible to import even if we have money” (emphasis mine throughout).
There is nothing like a food shortage to wake up a nation.
Obviously, America isn’t Japan—we don’t import two thirds of our food. But we are much more vulnerable than many realize.
In 2005, the Wall Street Journal reported that America had become a net importer of food. Bill Bonner, writing for the Daily Reckoning, confirms: “If we understand that correctly, there is no longer enough food Made in the USA to feed Americans’ appetites” (February 25). That means that even if America cut all exports, it would still need to import food to maintain current consumption levels.
America used to be the world’s breadbasket. Now, as is the case in just about every other former category of production, America is becoming a gigantic food-consumption sinkhole.
“[O]utsourcing your supply of food and water … depending on unfriendly or unreliable trading partners to keep sending fresh fruit and poultry … or thinking the global system of trade will forever expand and never again contract … these are all dangerous assumptions that could leave you with an empty national stomach at night,” warns the Daily Reckoning (ibid.).
Yet for the most part, Americans remain on the sidelines of the current food shortages—at least so far. Besides some comparatively minor rice and cooking oil rationing at a few Costcos and Sam’s Clubs, most Americans are content to grumble about rising food and fuel prices and watch the food riots in Haiti, Indonesia, and elsewhere—so far.
But the fact that there is rationing at all should be a big wake-up call!
“Living in the ‘Breadbasket of the World,’ it is hard for most Americans to even conceive of the idea that food could become scarce in this country,” writes author Monica Davis. Even America, she says, “is not immune from the potential for food shortages, food riots and food insecurity. We’re just blind to the possibility.”
America’s days of comparative economic prosperity are ending. Most Americans look at the world and think that they are rich and increased with goods, and in need of nothing. But they don’t realize that all that separates the U. S. from becoming poor, destitute and hungry is one big drought. What good will riches be then?
America only has 43 pounds of wheat per person in case of emergency. That’s just four and a half months’ worth.
A page out of the Bible is applicable here: Joseph, when he was in Egypt, prepared the nation to withstand seven years of drought. When drought came, not only did Egypt have food for its entire population, but for the surrounding nations as well. In that case, money bought food—because Joseph had stored it up. In fact, that drought made Egypt a global power.
Today, the world lives from one harvest to the next. There are no significant global food reserves, and America doesn’t even have enough to handle one really bad year. What would happen if another multi-year, 1930s-style drought occurred again?
“Load up the pantry,” says Manu Daftary, one of Wall Street’s leading investors and the manager of the Quaker Strategic Growth mutual fund. “I think prices are going higher. People are too complacent. They think it isn’t going to happen here. But I don’t know how the food companies can absorb higher costs.”
Unfortunately, loading up the pantry isn’t more than a short-term stop-gap. And in the long-term, neither is stockpiling treasure chests of precious metals.
The Bible talks of a future time when people will throw their gold and silver into the streets—a time when money won’t be able to buy food (Ezekiel 7:19).
The current global food shortages are the first rumbles of thunder from the approaching storm.
But shelter from the coming food storm can be found. God promises to not only protect those who obey Him, but to bless and magnify their food supplies even when everyone else is being pummeled with agricultural curses. God challenges you to test Him—to see if He will not open to you the windows of heaven in time of need.
To see how a country with such vast agricultural resources could get itself into such a food dilemma, read The United States and Britain in Prophecy.
How Far is the US From Food Shortages and Food Riots?
"....this artificially generated food crisis has not yet peaked."
by Monica Davis
Saturday Apr 12th, 2008 2:37 PM
Even the United States is not immune from the potential for food shortages, food riots and food insecurity. We’re just blind to the possibility.
As Americans complain over high gasoline and food prices, many third world countries are experiencing food riots over price and scarcity of food. In some parts of the word rice is so expensive that it is transported in heavily guarded convoys and farmers guard their fields from thieves.What has put many world leaders on notice is the fact that this artificially generated food crisis has not yet peaked. As of this writing, no one knows when the situation will reach a crescendo, or to what extent this demand will affect food security and political stability in the world. Many believe that the food crisis is in its infancy and they worry about increasing food-based political instability worldwide.
Food riots are becoming more common, as more land and crops are being diverted from the food chain by the world biofuels industry. According to an investment magazine, the crisis shows no signs of weakening. Food, the bread of life, is fast becoming the “gold” of the Twenty-first century.
The face of food security is rapidly changing around the world and there are no quick fixes experts say. What worries many is that food stockpiles are at historic lows. In the United States alone, stockpiles of wheat hit a 60-year low in the United States as prices soared. Almost all other commodities, from rice and soybeans to sugar and corn, have posted triple-digit price increases in the past year or two.Experts say the high prices will continue for years, putting billions of people at risk for malnutrition or starvation. World leaders continue to cast fearful eyes at the burgeoning bio-fuels industry, noting that the competition generated by the industrial biofuels industry and food agriculture is pushing up food prices and making it more profitable to grow fuel crops for industrialized countries than it is for big farmers in Third World countries to grow food for their own citizens.So far, Americans have been able to weather the storm. While rising fuel and food prices have generated grumbling from the populace and hand wringing from the politicians, this country has yet to experience the level of social unrest and rioting that high food prices have generated in other parts of the world.A few analysts believe that the United States is on the verge of a major economic revolution, a process, which will change where we live, what we eat, and how we view agriculture. Looking at the rumbles from around the world we are already seeing wars over oil and energy resources, not to mention the violent eviction of traditional farmers in South America and other parts of the world by the industrialized bio-fuels industry.
A few analysts believe that the United States is on the verge of a major economic revolution, a process, which will change where we live, what we eat, and how we view agriculture. Looking at the rumbles from around the world we are already seeing wars over oil and energy resources, not to mention the violent eviction of traditional farmers in South America and other parts of the world by the industrialized bio-fuels industry.
Economist Dr. Hazell has said that filling an SUV tank once with ethanol consumes more maize than the typical African eats in a year.
The food riots in Haiti are mirrored by riots in parts of Africa and Asia, sending shock waves throughout the Third World. According to a report from the United Nations, the 60 per cent price increase in the price of corn and feedstock over the past two years can be directly traced to the increased demand on corn and soybeans made by the biofuels industry. The United States, as the world’s largest exporter of corn, has diverted millions of pounds of corn and soybean crops to the growing biofuels industry, creating a market that makes fuel crops more profitable than food crops. National surpluses of grains have give way to increased demand for biofuels, driving up the price of corn and grains around the world. (World Bank)
So far, Americans are mostly bystanders in the game, content to grumble at the gas pump and complain in the grocery aisles. As a “First World” nation, the United States so far has not been subject to the food riots, which we have seen in Haiti and other parts of the world. Americans have more per capita income than much of the world; hence the crisis of the Third World, so far, is inconvenience in the “First World” and in developed nations such as the United States.
That said, however, we must understand that this situation is not sustainable. While Americans do have more disposable income than the rest of the word, that income is not unlimited and our food supply is much more vulnerable than we think. When it comes to food security, both in terms of supply and accessibility, this country is much more vulnerable than we think.
As one retired grain salesman noted, most of the nation’s grain is moved around the country by just TWO railroads. Little is stored in the event of disaster and the whole system is extremely vulnerable. While we in the United States look at the food riots in other countries with a sense of disbelief, we are not immune. Under the right circumstances, we could be in the same boat. (Ibid)
In order for riots to break out the whole food supply doesn't have to be wiped out. It just has to be threatened sufficiently. When people realize their vulnerability and the fact that there is no short-term solution to a severe enough drought in the Midwest they will have no clue as to what they should do. Other nations can't make up the difference because no other nation has a surplus of grain in good times let alone in times when they are having droughts and floods also. (Robert Felix, “US Food Riots Much Closer than You Think”)
The concentration of food processing, cultivation and distribution into the hands of a few companies is wrecking havoc around the world. A Canadian reporter noted the connection between market concentration and price increases around the world: In Mexico and most other countries, a handful of international companies is controlling more and more of the food production line—from growing crops to purchasing crops from farmers, to warehousing, processing and distribution.
Carlsen said investigations following the tortilla crisis found that huge stores of corn in warehouses had cut down the supply and led to a jump in prices. (Matthew Little, Epoch Times, “Food Prices Skyrocket Amidst Growing Shortages.”)
Even the United States is not immune from the potential for food shortages, food riots and food insecurity. We’re just blind to the possibility.
The author is an activist/writer/public speaker based in the Midwest. She has written articles on the mortgage crisis, land theft, mis-education of ethnic youth and food security. Books include: Land, Legacy and Lynching: Building a future for Black America, and Urban Asylum: Politics, Lunatics and the Refrigerator Woman.
http://www.Lulu.com/davis4000_2000
March 24, 2008
Black Swans Everywhere
Kunstler
http://www.kunstler.com/index.html
After a one-day reprieve from total meltdown in the financial
markets, news media cheerleaders for the most reckless gang of bankers
in world history declared the crisis over on Good Friday (with the
markets safely closed). Whew, that's a relief. Problem solved. And
just in time for baseball season, too, so none of the Banker Boyz have
to sell their sky box leases.
Commodities Drop, Rally in Dollar, Stocks Vindicate Bernanke
What is meant by "meltdown," by the way, since the word is used so
promiscuously by myself and others. I'd define it as the shock of
recognition that many big institutions are worse than flat broke and
are therefore powerless to conduct normal operations. By "worse than
flat broke" I mean they are so deep in hock that all the accountants
who ever lived, in the life of this universe and several others like
it, using the fastest parallel processing computers ever built, could
not keep up with their compounding accelerating losses (now
approaching the speed of light).
The current vacation from reality on Wall Street may last a few more
days, or even a couple weeks, but it seems as though a whole flock of
black swan events is circling the sky over Financial-land and is about
to blot out the sun. By black swan, I refer to the concept popularized
by Nassim Nicholas Taleb in his recent book of that name, namely
unexpected events of great power that tend to change the course of
history.
For the moment, with the crisis "contained," and the Boyz getting
ready to air out their Hampton villas for the coming season, we are
once again primed to be blindsided by potent random events that nobody
saw coming. The trouble is, there are enough potent potential fiascos
already visible on the horizon.
<snip>
Outside View: The end of capitalism as we know it?
Independent.co.uk Web
By Phillip Blond
Sunday, 23 March 2008"The trouble is that nobody in power recognises this crisis for what it is – an asset insolvency crisis brought about by massive debt leverage. Neo-liberals are still reacting as if the emergency was one of liquidity. They are wrong. Governments should bail out not banks and speculators but the customers who now have every reason to fear for the future."
The Western world is in an economic crisis similar in scale to the oil shock of 1973. What we are seeing is nothing less than the unravelling of neo-liberalism – the dominant economic and ideological model of the last 30 years.
The disintegration of Anglo-Saxon-inspired markets has come about largely because of the confluence of two tendencies of the "free market": speculation and monopoly capitalism. Contrary to received opinion, free markets – unless subject to civil regulation, asset distribution and persistent intervention – always tend to monopoly.
Similarly, there is nothing inherently efficient about free markets – they do not of themselves promote sound investment or wise management. Rather, when markets are conceived wholly in terms of price and return, and when asset wealth and the leverage that this provides becomes as concentrated as it was in the 19th century (which is a scenario we are approaching), then markets encourage nothing other than gambling masking itself as sound investment.
For example, before 1973 the ratio of investment to speculative capital was 9:1; since 1973, these proportions have reversed. So huge have the numbers, leverage and derivative instruments become that their value now far exceeds the total economic value of the planet. For instance, in 2003 the value of all derivative trading was $85 trillion, while the size of the world economy was only $49 trillion.
These ratios have risen with the latest estimates that the value of all traded paper instruments exceeds the underlying value of the assets on which they are written by 3:1. The fact that these assets may themselves be devaluing by up to 50 per cent (US housing values have declined by 25 per cent in two years) means that the overall ratio of global paper value to its leveraged base may indeed double.
This average global figure itself masks even more extreme levels of leverage. The Carlyle Group de-faulted on $16.6bn (£8.4bn) of debt last week. The private equity firm had been speculating assiduously on its AAA-rated mortgage base – by some estimates, at the end of its life, Carlyle's loan-to-value ratio and hedge exposure was at 36:1. There are, of course, many other private equity firms in a similar position.
This incalculable level of speculation is abetted by the huge concentration of wealth that has occurred since 1973. Why? Because if markets tend to monopoly then smaller groups of people control larger amounts of assets. The latest figures demonstrate this admirably: the richest 10 per cent of the UK population increased their share of the nation's marketable wealth (excluding housing) from 57 per cent in 1976 to 71 per cent in 2003. Over the same period, the speculative capital that could be deployed or invested by the bottom 50 per cent of the British population fell from 12 per cent to just 1 per cent. Indeed, the wealthiest 1 per cent of the population, on current government figures, now control more than a third of all the marketable wealth – and this ignores the vast sums held in offshore tax havens.
The New Economics Foundation has shown that global growth has not aided the poor. In the 1980s, for every $100 of world growth, the poorest 20 per cent received $2.20; by 2001, they received only 60 cents. Clearly neo-liberal growth disproportionately benefits the rich and further impoverishes the poor.
Real wage increases in the top 13 countries of the Organisation for Economic Cooperation and Development (OECD) have been below the rate of inflation since about 1970 – a situation compounded in Britain as the measure of inflation massively underestimates the real cost of living.
Thus wage earners – rather than asset owners – have faced a 35-year downward pressure on their standard of living. Indeed, the golden age for the salaried worker, as a share of GDP, was between 1945 and 1973 – and not this vaunted age of liberalisation.
The trouble is that nobody in power recognises this crisis for what it is – an asset insolvency crisis brought about by massive debt leverage. Neo-liberals are still reacting as if the emergency was one of liquidity. They are wrong. Governments should bail out not banks and speculators but the customers who now have every reason to fear for the future.~~~~~~~~~~
IT AIN'T OVER 'TILL THE FAT LADY SINGS
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_U/threadview?m=tm&bn=18771&tid=97738&mid=97738&tof=10&frt=2
By John Spence Last update: 11:35 a. m. EDT March 21, 2008
BOSTON (MarketWatch) -- Standard & Poor's Ratings Services on Friday revised its outlook on the U. S. brokerage industry to negative, saying despite "relatively good" earnings from the group this week, it has become more worried about the general profit outlook for broker/dealers as a result of "increased unpredictability of business trends." The firm said its ratings factor in a 20% to 30% fall in revenue for the industry as a whole, and there is the risk that revenue could fall even further.~~~~~~~~~~~~
Five reasons to start worrying
http://www.thestar.com/printArticle/349667
TheStar. com - Canada -
–David Olive Financial world's woes are spilling over to Main Street, and threatening Canada
March 22, 2008 David Olive Columnist
"The basis for optimism is sheer terror." – Oscar Wilde
This week began in trauma.
It was announced Monday that one of the world's largest securities firms, Bear Stearns & Co. Inc., had effectively gone bankrupt. And that, in a most unusual step, the U. S. Federal Reserve had hastily arranged a forced marriage between Bear Stearns and the larger JP Morgan Chase & Co., America's third-largest bank. Stock markets worldwide plunged in response.
The week ended with traumatized speculation about which illustrious bank or brokerage would be next to go toes up, and whether the Fed, other central bankers worldwide, and cool heads at the financial institutions themselves had the collective wit to stave off a meltdown in the global financial system.
Oh, and the United States appears to be heading into the worst recession in a generation.
<snip>~~~~~~~~~~
U.S. crashes - China breaks
By Michalis Firillas
Ha'aretz--Israel
http://www.haaretz.com/hasen/spages/966762.html
News from America is bleak. Earlier this week the Federal Reserve came to the rescue and backed a deal for the sale of a paragon of Wall Street culture, Bear Stearns, to JP Morgan Chase, for a mere $2 per share. Lehman Brothers, another major investment bank, was also felt to be tottering. Responding to the crisis of liquidity - the availability of money for banks to loan, primarily to other smaller banks and then on to Joe in the street - the Fed dropped the rate by a further 0.75 percent. After weeks of dire financial instability, and months of efforts by Fed Chairman Ben Bernanke to stem the downward spiral sparked by the subprime collapse, mostly by repeated cuts in the interest rate, the question on everyone's lips is one of anticipation: How long will this go on? Perhaps they should also be asking, "How much worse can this get?"
Even the most optimistic forecasts do not exclude the possibility that a recession, or worse, stagflation (high prices on top of no jobs), will go on for many months. Realists will also tell you that unless the legacy of former Fed chief Alan Greenspan, primarily of averting recession by adding cash to the economy through interest-rate manipulation and lax lending regulation, is adjusted to the current international conditions, we are all in for lean times. The condition of the number one economy in the world will obviously affect the rest of the world. But as you watch America tumble into what may be the biggest economic crisis since World War II, from an international perspective, China is the one to keep an eye on.
<snip>
Michalis Firillas, an editor at the Haaretz English edition, blogs at
http://firillas.blogspot.com.`````````````
Silver Shortage gets Worse, Price Drops Again!
(If you don't hold it, you don't own it)
Silver Stock Report
by Jason Hommel, March 20, 2008
Three more major silver dealers are reported to be out of silver today: The U. S. Mint, Kitco, and Monex. This, on top of the major dealers yesterday, Amark, Perth Mint, CNI Numismatics, and APMEX, all reported sold out. Further, nearly all of Canada is reported to be out of silver, from Vancouver to Toronto.
This is unprecedented, and is a perfect case of market manipulation in the paper market at COMEX and other futures exchanges to see silver prices continue to drop down to below $17/oz. today. Paper promises can be created endlessly, but real silver cannot.
This is NOT a case of the dealers getting spooked, and selling out to the refiners just in time, at peak prices. This is a case of the public buying up the stock at coin shops across the world ever since gold hit $1000/oz.. That event finally sparked a little of the public's buying of silver and gold. Thus, the typical coin shop flow of silver to the refiners just stopped in the last few weeks, and especially the last two days.
This is NOT a case of the public creating a top with 'everyone' in silver, because nobody's in silver yet. In 2006, only $1 billion was spent on investment silver, which is 0.007% of the $13.5 trillion of money in the banks. As I have long reported, the silver market is so small, there is no room for new investor demand, not even 0.1% of money could be spent on silver, because that would be $13 billion, which would push silver prices to $200/oz., and we are seeing only the tiniest beginnings of that.
$13 billion would be almost enough to buy all the silver produced by the mines in one year, which would leave nothing for industry. It would essentially double demand, but supply would remain the same.
Furthermore, this is not a top because the public continues to get to the coin shops, and is now getting on waiting lists for silver. The public is not yet in, so how can the price drop?
This is a case of price fixing and manipulation, like communism. Sausage is reported to cost 1 link per ruble, but there is no sausage. Silver price is quoted, but there is little to no silver.
Shortages are evidence of price fixing. Price fixing results in shortages. They are price fixing silver at a below market price over on the paper exchanges in New York and around the world.
How long can it go on? Until people stop trusting the paper exchanges, which could be after they default and fail to deliver silver. Or we could see a severe backwardation, as people refuse to trust and buy futures contracts, which would thus sell at a discount to real silver. Then, the spot price will really go up, maybe about double or more very quickly.
Regarding Monex and Kitco:
Monex has a shortage of 100 oz bars and silver eagles. They say that they are 5-7 days behind on orders for 100 oz bars and at least 10 days behind on silver eagle orders.
"This message has been placed on KITCO's buying board in large red letters. TT
IMPORTANT: Due to the volatility of the market, we are experiencing a significant increase in the volume of products that are being sold to Kitco. Although Kitco and HSBC Bank are working hard to stay on top of this, you may experience a delay in your package being processed. We apologize for any inconvenience this may cause, and appreciate your patience and understanding."
bulliondirect says:
High Activity Market Alert The precious metals industry is experiencing a substantial surge in activity which may increase the possibility of logistical delays; including customer service response time and product processing (incoming and outgoing). Our goal is to keep our prices competitive while still delivering an exceptional transaction experience.
I now have 4 pages of reports that I posted to my member's forum, from people saying that dealers around the world are out. Here is a summary of their comments:
Apmex out.
CNI out.
One in the UK.
One in New Port Richy, Florida.
Ebay is selling silver over spot.
Toronto out except overpriced Eagles and Maples.
Kitco in Montreal is out of Silver Maples.
Local shop in Victoria BC is out of all bullion.
Mexico City's "Consultoria casa de cambio" is out of bullion.
There is no silver for sale in eastern Canada.
Perth Mint is out.
A world class gold and silver bullion dealer in Dubai, Lakhoo Jewelry, is almost out.
Most Utah coin shops say there is a critical shortage of silver available for purchase
in Utah.
(Johnson Matthey, the largest refiner, is in Utah!)
www.argentarius.de , there where 637 Mexican Libertad still left. Now, two hours later:
nothing.
We could not find silver in canada from two days now.
Conejo Coin and Stamp run out of 100 oz silver bars too.
I just cleaned out the last 25 oz. of silver at my local coin shop.
scotia bank told me that they have no silver for about 2 days now.
Camino Coin of Burlingame, CA says, There seems to be a silver shortage.
In the Detroit, Michigan area, very few coin shops have any, I got the last 2 bars at
one shop.
Bulliondirect having trouble mostly with Silver Eagles and Canadian Silver Maple Leafs.
The US Mint has said they are out of silver eagles - at least for a few weeks.
Portland, OR, Alder Gold Exchange., just a few bars, bought them out.
The dealers in Vancouver are offering 100 oz bars at $1875 preorder, but we wont get
them for months.
==============
Paul Mladjenovic, author of Precious Metals for Dummies, said to me today, the following about the current price manipulation and shortage of real silver:
Outside of Oil, there is no other commodity with more diversified uses. Silver will probably hit $50/oz. within 3 years, and exceed its all time high on an inflation adjusted basis ($150-$350/oz.) and hit tripple digits by the early part of the next decade.
Everything has a natural and artifical price, and an artificial low price stimulates demand, and creates shortages, but the false appearance of plenty, which will blindside those in the paper markets.
Artifical intervention only works in the short term, whereas natural supply and demand forces always triumph in the long term.
==============
I want you to be able to buy on this dip, and not be discouraged by sold out coin shops. This is why I asked people to report to me who had silver in quantity, ready to sell.
"If you don't hold it, you don't own it" (And can't sell it!)
Yesterday, Robert Mish was slammed by my mention of his shop in my report. Next time, he says he can only handle orders for $10,000 or more at one time.
Here is the specific page at their website: www.austrianmint.at/silberphil?l=en
Sources sent by the owner of:
www.alchemianova.com
===============
Sincerely,
Jason Hommel
www.silverstockreport.com
www.miningpedia.com
_________________
Leery lenders demand more from borrowers
The Associated Press March 20, 2008, 8:37PM ET
http://www.businessweek.com/ap/financialnews/D8VHG7NO0.htm
By ALAN ZIBEL and J.W. ELPHINSTONE
WASHINGTON
Just when consumers and the U.S. economy need banks to lend more freely, the mortgage industry is making it harder to borrow -- even for those with good credit.
Mortgage insurers, whose backing is required for borrowers who can't afford the traditional 20 percent down payment on a home, have already flagged nearly a quarter of the nation's ZIP codes where they refuse to insure some home loans.
That encompasses a wide variety of neighborhoods: McMansions in Scottsdale, Ariz.; luxury Miami condos; 1960 ranch houses in Flint, Mich.; and early 20th century kit homes in Metuchen, N.J.
The entire states of California, Florida, Arizona, Michigan, Ohio and Nevada -- which have seen the highest foreclosure rates and the worst price declines -- are blackballed on some mortgage insurers' lists.
Banks that have lost billions because of bad bets during the housing boom are now reverting to strict lending standards not seen in nearly 20 years, according to industry data and interviews with lenders.
For new home buyers and those seeking to refinance, it can mean higher down payments and a higher bar for credit scores, among other requirements. The toughest restrictions are in markets where home prices are falling, though regions where property values are rising are not immune.
"We're in the midst of an epic, broad, sweeping change in the mortgage industry," said Chris Sipe, a loan officer with America East Mortgage in Frederick, Md.
The reluctance to extend credit comes despite a flurry of government initiatives, including steady interest rate cuts by the Federal Reserve, intended to make it easier for would-be borrowers and those facing interest-rate resets on their mortgages.
Lenders' growing leeriness threatens to dampen sellers' already soggy prospects for the spring home-buying season -- and that means more pain for the already battered housing sector and the broader economy.
In recent weeks, mortgage insurers have flagged more than 9,600 ZIP codes in at least 34 states where they won't insure certain types of home loans -- those for investment properties or second homes, those with riskier adjustable-rate or interest-only mortgages, or for buyers making down payments of less than 3 percent.
With banks and mortgage insurers pulling back, state and federal programs for first-time buyers and people with poor credit are attempting to fill the void.
Don Brekke, an equipment operator from Colorado Springs, Colo., tried to buy a bank-owned 1950s ranch home for $113,000. At first he couldn't get a loan because the house was in a potentially declining market, and lenders required a 10 percent down payment, more than he could afford.
Ultimately, he was able to qualify for a 100 percent loan from Colorado's state financing authority, and he plans to close in the coming days.
"It was a bunch of headaches -- going around and around to get this done," Brekke said.
The combination of sinking home prices and tighter lending standards has been a major aggravation for Ron Broussard, a 38-year-old sales representative for a home builder.
Broussard took advantage of soaring Southern California property prices three years ago to refinance a loan on a house he had owned since the late 1990s. Today he's still stuck with a $720,000 mortgage and has been renting it out since moving with his family to Texas a year ago. Once appraised for $1.1 million, Broussard's lender now says it's worth about $300,000 less.
He does not yet owe more than the property is worth, but Broussard worries that is a possibility.
"The way the market's going, you know, who knows?" he said.
Broussard has found little sympathy from his lender, Countrywide Financial Corp. While Broussard accepts responsibility for taking out a mortgage whose monthly payments are due to skyrocket once the unpaid principal exceeds the home's value by 15 percent, he feels betrayed by the lender's unwillingness to negotiate better terms.
The stinginess of banks is showing up in home loan statistics: The value of all new mortgages plummeted to $450 billion in the fourth quarter of 2007, down 38 percent from a year earlier, according to trade publication Inside Mortgage Finance.
Subprime loans, made to borrowers with poor credit, virtually disappeared from the market, plummeting 90 percent to $13.5 billion in the October-December quarter.
There is a silver lining: The Federal Reserve has repeatedly cut interest rates, helping borrowers whose mortgages were just about to reset to higher rates and people with student loans. Reflecting the Fed's efforts, rates on 30-year mortgages dropped below 6 percent this week for the first time in more than a month.
But the long-term impact of the Fed's move is far from certain, and the central bank's actions could end up feeding inflation and pushing up long-term rates.
"The credit crunch is much like the movie villain that refuses to die," said Greg McBride, a senior financial analyst at Bankrate.com. "The effects are spilling out, far beyond what was originally seen."
Amid the turmoil, the mortgage industry is playing hardball with borrowers.
Wells Fargo & Co. now requires a 25 percent down payment in the most distressed markets, according to a document sent to mortgage brokers last month. A company spokesman said in an e-mail message that Wells Fargo is "focused, as we've always been, on fair and responsible lending and sound credit risk management."
Some borrowers who took out home-equity loans or second mortgages are being blocked from refinancing. The problem is most common among consumers using two different lenders.
Companies that made second mortgages are now denying requests -- common in a refinancing transaction -- to take secondary status in the event of a foreclosure. Especially in markets where prices are declining, holders of those loans want to be paid off before a loan is refinanced rather than take on the risk of default, industry experts say.
Lenders' changes have removed 30 to 40 percent of the borrowers who could have qualified in recent years, estimated Tom LaMalfa, managing director at Wholesale Access, a Columbia, Md.-based mortgage research firm.
Lenders and mortgage insurers are also requiring proof of income and employment, something they didn't always do during the housing boom.
"It's no longer people buying pools of loans, strictly written by a computer, and no one knowing what's in a pool," said Marc Schwaber, chief executive of Preferred Empire Mortgage Co. in New York. "The loan is going to have to make sense."
Many in the real estate industry hope that the economic stimulus legislation signed by President Bush earlier this year allowing Fannie and Freddie to back loans larger than their former limit of $417,000 will kick-start the housing market.
And while this week's interest rate cut by the Federal Reserve could tempt banks to lend more, experts say they are likely to remain skittish for months to come.
"It's going to take time for banks to tiptoe back into the water," said Jefferson Harralson, a banking industry analyst with Keefe, Bruyette & Woods Inc.
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| 6. Kerosene heaters and cookers | 7. Lighting | 8. Wood cooking and heating |
| 9. Communications | 10. Essential Tools | 11. Home built items |
| 12. Electrical; generators and power | 13. War preparedness | 14. Gardening |
