Not Even Crack Heads Can Escape this Economy By Charles Delvalle Everyone’s having a hard time in this economy, even crack heads. We’ve all been talking about how wicked inflation has been over the past two years. Apparently Gus Young Jr. of West Palm Beach wasn’t listening. In a fit of rage, he destroyed a DVD case and a Plexiglass counter after his friendly neighborhood drug dealer told him that the price of a rock of crack cocaine had gone from $10 to $20. And get this: on the way to jail, he shared his displeasure of the inflated crack prices with officers. Let this be a lesson that nothing escapes the reach of inflation. Not milk, butter, or in this case, crack. This … [Read more...]
Why the Bailout Won’t Work
By Andrew Gordon The economy is now staring eyeball-to-eyeball with an activist U.S. government. It will legislate, reform, supervise, bully, give out money like cotton candy and get concessions in return. It will encourage technological development in environmental and other “future” industries. It will seek sources of energy other than the oil and gas we get from Mexico, Canada and OPEC. And it will put generous sums of money behind these initiatives. The Obama government emphatically does not want banks to sit on the money they get from the government. Nor do they want it to go to shareholders in the form of dividend payments. This is why I look for more companies to cut their … [Read more...]
The Inflation Beast is About to be let out of its Cage
By Andrew Gordon How bad is it going to get? Our reference point is the 1930’s and the Great Depression. But people in Russia and Asia only have to recall events of a little more than a decade ago. The “Asian Contagion” actually began in Russia in 1998 when the country defaulted on its national debt. The crisis then hit Thailand and within a year had spread to all of Asia with a few exceptions (Malaysia and China being the main ones). I had a front row seat. At the time, I ran a technology-transfer business in Southeast Asia and our central office was in Jakarta, Indonesia. For a while it looked like the crisis might skirt Indonesia. But it didn’t. And when it hit, it hit with a … [Read more...]
Is the United States Bankrupt?
"This is a job for the printing press." Hyperinflation here we come By Jon Herring There are so many headwinds and cross currents in the market today, it is all but impossible to predict what will happen in the short term. There is too much volatility and noise. So, it pays to keep your eyes on the horizon, focused on the long term and the biggest trends. Today, I want to tell about the biggest of all possible financial trends: the eventual bankruptcy of the United States government. Or should I say the existing bankruptcy of the U.S. government? The United States government is facing an impending fiscal crisis. Former Comptroller General David Walker calls it a “cancer … [Read more...]
Inflation Moderate? Who Does The Fed Think They Are Fooling?
By Charles Delvalle Just when you thought reality was setting in at the Fed, you get reminded how silly that idea really is. I say that because lately the Fed has been talking about how bad inflation is, and how they need to be ‘vigilant’ so that inflation expectations don’t deteriorate. If you talk to anyone on the street, I bet they have noticed that prices are higher for just about everything. I don’t know about you, but I sure think that inflation expectations are already pretty bad. So, you would think they’d be really hawkish about inflation at the meeting. Maybe that’ll happen at another meeting, because it sure didn’t happen at the one on Wednesday. … [Read more...]
Cheaper Fuel (Gas) Prices Ahead
By Andrew Gordon The stimulus package has come and gone. And retail sales are once again feeling the pinch. So, should the government put together a second package for exhausted consumers? After all, if the government can afford to throw $300 billion at Freddie and Fannie, certainly the government can spend another $145 billion to boost spending going into the holidays, right? But with gas prices going down, maybe we don’t need another stimulus package. I was asked yesterday by CNBC if lower gas prices would help spending and boost the economy. I said it wouldn’t help much. A quick look at the numbers might suggest otherwise. After all, every penny increase for a gallon of gas … [Read more...]
Zimbabwean Hyperinflation Officially Estimated At 2.2 Million Percent
This is a textbook case of how to create hyperinflation by thinking you can print all the money you want. It is interesting to note that Mugabe blames Britain for trying to undermine his regime when in fact while under British control, Zimbabwe was Africa's second richest country (behind South Africa). But under Mugabe's reign Zimbabwe has become a basket case due primarily to misguided economic policy. Several years ago Mugabe nationalized the large farms and took control from productive farmers and gave control to his cronies (who knew nothing about farming) and then he wondered why farm production fell. Duh? Now inflation is increasing so fast his central statistical office can't keep … [Read more...]
8 Steps to Cut Education Costs
By Gordon H. Wadsworth Economists predict the cost of attending state colleges will soar to $120,000 by 2015. How can you cut those costs? The following steps can help students and parents avoid the student loan nightmare: STEP ONE: The time to take advantage of available college monies starts in the 7th or 8th grade. Parents should begin preparing their students for college by encouraging them to take the SAT or ACT along with a test prep class to bolster results. With proper direction, even the average student can score well on the national achievement tests and secure a place in line for merit scholarships and grants. Check out the Princeton Review web site at Practice Test or … [Read more...]
