Today’s Call:Dow Jones Industrial Average to rise. Currently 12,004.
Rationale: Despite the fact that there is simply no good news or reason to buy stocks right now, the increases in the M2 Monetary base generally go into the stock market first. The only question is whether or not it will overwhelm the shorts. Our guess is that in 72 hours it will.
*See FED Perceived Economic Effect Rate Chart at bottom of blog. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.
*See FED Perceived Economic Effect Rate Chart at bottom of blog. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.
For anyone who has attempted to manage their own finances, the sheer amount of paperwork involved in documenting the daily economic impact of a “normal” modern life makes simply keeping bills paid a task. To pull your head out of the woods to see the forest, that is, take stock of your current financial situation, is nearly unheard of.
Heck, if we truly did see the forest, many people would panic at the wildfire decimating their personal balance sheets. What to do? The experts would tell you that you need to make a budget and stick to it. Budget? Not even our most gifted politicians can manage that daunting task.
If you don’t have the extra $3,000 + per year to hire a personal bookkeeper or even if you do but can’t hold on to a receipt to save your life, is there any hope of getting above the forest to spot and put out the fires before they even start?
What is the average Joe or Jane public to do? Seriously, if you are a busy person without a lot of time or money to dedicate to money matters yet have this deep nagging feeling (most non-politicians call it a conscience) that it is time to be responsible, is there any hope or must you wander aimlessly until the fires get too hot to ignore and it is too late to right the ship?
Hope for Joe and Jane financial comes in the form of a humble mint. Mint.com, that is. Mint.com is a miracle product which allows you to manage all of your checking, savings, loans, credit cards, investments, and mortgages in a single place. How’s that for simple?
Mint.com accomplishes this seemingly mammoth task with the greatest of ease and minimal user maintenance beyond the initial set up. Once your accounts are set up, you are almost instantly elevated above the forest and ready to identify your hot spots.
If you are ready to attack, create a budget at Mint.com and then simply live your life. Mint.com will warn you when you are overspending. Mint.com cannot, however, keep you from overspending. They leave that unpleasant task to the banks.
This miracle product requires minimal technical skills to operate which, if you are reading this on a computer, it is highly likely that you possess them.
Once over the technical hurdle, which most of us already are, use of Mint.com requires a decent level of trust (think about how you would respond to Aladdin’s question “do you trust me?” to the princess) as the service logically needs your online banking login information to perform its modern bookkeeping miracle.
By using 128-bit SSL encryption (the same as banks) and validation by VeriSign and TRUSTe, Mint.com has gained the trust of over 4 million persons and growing.
Did we mention that this service is free?
While many products exist to help people with their bookkeeping, investments, and budgeting, Mint.com is by far the solution which requires the least amount of maintenance and offers the greatest benefit of any service. By offering this service for free, Mint.com is in a class of its own.
More than miraculous, the creators of Mint.com offer what by most stretches is a premium bookkeeping and planning service for free.
So what are you waiting for? If you are ready to tackle and dominate your personal financial situation, bring in Mint.com for backup. The two of you will have your personal finances in custody in no time!
Rationale: News from the Eurozone, specifically Greece, is almost overwhelmingly negative. Anticipation of short covering on any good news out of the Eurozone. Conversely, there is upward pressure on the dollar that may seek short term relief via central bank intervention.
Result of Call for June 10, 2011:Dow Jones Industrial Average to rise. Was 11,952, Currently 11,897. Bad Call.
Calls to Date: Good Calls: 28, Bad Calls: 22, Batting .560
*See FED Perceived Economic Effect Rate Chart at bottom of blog. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.
TheRose Festival has dominated the city’s waterfront park for the past two weeks. Carnival rides have been up since Memorial Day weekend and an assortment of ships from the US and Canadian Navy (affectionately known as the “Canavy”) arrived late last week. After no fewer than four parades, the annual Dragon Boat Races rounded out the festivities.
The Festival usually marks the beginning of summer, which is defined as the absence of rain for four delightful months, here in Portland. While the rain seems to have done its part, the weather remains colder than one would expect.
This year was the first year that anyone can remember the roses not being in full bloom during most of the festival. An uncharacteristically cold spring has caused many of the plants to hold back here from showing off their blooms. When they do finally bloom, it tends to happen quickly and spectacularly.
For some reason the plight of the roses has us worrying about inflation. We have been certain that inflation is on the horizon for some time now, and while there has been an uncomfortable rise in food and gasoline prices, it is hardly the degree of inflation that we had been anticipating.
Are we early or just plain wrong about inflation? The question is troubling. What is certain is that many of the things that we have speculated would happen are coming to pass. Most significantly, the US Government appears to be approaching a moment of truth regarding its dire finances. The simple question of whether or not to raise the debt ceiling has opened a Pandora’s box of questions about the nation’s spending priorities.
Now the 2012 election cycle is beginning and US lawmakers have rushed out the door to the campaign trail and have left Pandora’s box wide open on the Capitol floor with its questions racing about the room:
Should we cut entitlements?
Enact more economic stimulus?
Will the Government really go bankrupt on August 2nd?
Is the activity on Twitter accounts really open to the public?
With the national political circus about to go into full swing, any hope of a serious discussion about a realistic budget or debt ceiling is gone. What we are now left with are desperate pleas for action from none other than Ben Bernanke, the ace lobbyist for the nation’s largest banks.
Mr. Bernanke, in his classic, diplomatic style, told the Republican leadership in attendance that he appreciated what they were trying to do in trying to get the nation to live within its means, but that their use of the debt ceiling as a hostage was not an appropriate tool for the job. Instead, he advocates deficit reduction goals which trigger automatic cuts if they are not met.
Leading Lobbyist for the Banking Sector
The United States is one of the few countries with a congressionally mandated debt ceiling. Contrary to Mr. Bernanke’s belief (which we must say defies logic), the debt ceilingis the perfect tool to use if a lawmaker wants to put an end to out of control spending but doesn’t have the time to gain consensus for a reasonable budget plan. It is the ultimate way to “trigger automatic cuts.”
Perceptive readers will note that what Mr. Bernanke’s proposes is the same fiscal spending control model that has worked spectacularly in Europe. Just ask the Greeks!
Still, the question remains, where is the inflation? Our simple analysis led us to believe that under current circumstances the FED would print money to give both to its member banks and to the US Treasury until things either got better or the dollar was completely worthless in exchange for goods. Our money is on the latter passing before the former.
It now appears that the US government has temporarily thrown a wrench in those plans.
But this should come as no surprise. As Henry Hazlitt so eloquently explains in his book Economics in One Lesson, government intervention in the economy always fails to achieve its desired ends and almost uncannily brings about results contrary to those that the government intended.
Would it not make sense, then, that the current efforts to produce price inflation turn out to be dramatic failures as well?
Then, long after the government has abandoned its inflationary policies, a tidal wave of cash will appear quickly and spectacularly, not unlike the rose blooms in Portland this year.
This inflation will occur when the US Government, whether on its own or under compulsion from the bond markets, turns its clumsy machinations towards austerity. In other words, when it least wants or expects it.
*See FED Perceived Economic Effect Rate Chart at bottom of blog. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.
Rationale: It appears that the march out of US Treasuries and into cash has begun. Big banks really have no choice. With the US political establishment in gridlock on the debt ceiling there is now growing principal risk in holding US Treasuries. Without the prospect of further debt expansion to mop up all of the excess cash in the system in the short term, the Fed is resorting to the tactic of deflationary propagandain a futile attempt to quell inflationary pressures.
*See FED Perceived Economic Effect Rate Chart at bottom of blog. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.
Rationale: Nearly all asset classes are going to begin to cave in to a perceived deflationary spiral that is taking hold as inflation in food and energy costs begins to take its toll. This will temporarily bring Gold and other precious metals down with it. Government likely to announce new stimulus plans in the near future.
Result of Call for June 8, 2011: Yield on 10yr US Treasury bond to fall (price to rise). Was 2.962%, Currently 2.991%. Bad Call.
Calls to Date: Good Calls: 28, Bad Calls: 20, Batting .583
*See FED Perceived Economic Effect Rate Chart at bottom of blog. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.
*See FED Perceived Economic Effect Rate Chart at bottom of blog. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.
In the past two weeks we have had two well delivered speeches brought to our attention here at The Mint. One speech was delivered in Spain at the IU de Extremadura in 1999 by Julio Anguita Gonzáles, the coordinador general de Izquierda Unida at the time of this speech.
Don Julio is a communist. In this speech, which is billed on youtube as “El Gran Discurso Antisistema” (The great anti-establishment speech), he makes compelling arguments against the establishment and the inequality which it creates and fights to maintain amongst its members. You can see it below or by clicking here:
What is amazing about his speech is that he makes some of the same arguments that Tom Woods, who is perhaps the eloquent Libertarian thinker speaking today. Mr. Woods’ recent speech on Nullification is quickly becoming an anti-establishment sensation. You can see his speech below or by clicking here:
As Mr. Woods alludes to at the end of his speech, could it be that the anti-establishment thinkers of the far left and far right are closer together ideologically than they are to their mainstream liberal and conservative counterparts?
Today’s Call: July Corn Price Per Bushel to rise. Currently $7.85-4.
Rationale:USDA Report released today revealed the expected corn surplus to be 23% less than already low expectations. This will cause tremendous price pressure up and down the food chain. Corn is to food production what oil is to manufacturing. As such, we have decided to add it to our Key indicators.
*See FED Perceived Economic Effect Rate Chart at bottom of blog. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.
Today’s Call: Yield on 10yr US Treasury bond to fall (price to rise). Currently 2.962%. Rationale:China warned today that a US default would be very harmful to many nations of the world, most of all China. While we believe that the US will eventually default, in the short term this type of news should be traded against. Short term safe haven buying will overwhelm any selling on this news. Result of Call for June 3, 2011: Caterpillar (CAT) to fall. Was $101.10, Currently $97.91. Good Call. Calls to Date: Good Calls: 27, Bad Calls: 18, Batting .600
*See FED Perceived Economic Effect Rate Chart at bottom of blog. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.
Summer has arrived in Portland. We had hoped that it would arrive months ago but as with 41% of our predictions here at The Mint, we were early, which is a polite way to say that we were wrong.
In the financial markets, it continues to rain. The authorities have done everything in their power to stop the effects of the rain, hoping to simply ride it out. They are now exhausted and the ominous prospect of rising flood waters to accompany the constant drizzle adds to their misery.
The storm began innocently enough and that was the problem. Despite the dark clouds forming on the horizon, most people thought that they simply needed to stay indoors for a while, maybe move the patio furniture inside, and wait it out.
As it turns out, loading up the wagon and moving to higher ground is the only thing that can save them. In a practical sense, this means paying off debts and moving assets into precious metals or anything else real. It means cutting ties with any and all counter-parties because the probability of default is increasing and can strike without warning.
This financial storm did not necessarily require the divine insight afforded Noah in his day but to adequately prepare for it one needed to at least have in mind the possibility that this storm was no ordinary storm.
Yes, fellow taxpayer, the world economy is not in a recession or a depression (unless you are trying to describe a certain level of misery and not an economic phenomenon). The economy is in the process of being completely retooled. Bill Bonner at the Daily Reckoning calls it the “Great Correction.” We do not have a name for it here at The Mint but Mr. Bonner’s term seems a bit mild to us.
Now that the FED’s firepower and credibility are completely expended, the economy is set to experience something akin to random “rolling blackouts.” As the cash and credit that flowed steadily downstream for the past 50 plus years begins to dry up, a wall of water in the form of stimulus and monetary accommodation is barreling down the canyon and is literally destroying everything in its path and is PERMANENTLY changing the river’s channel.
Beyond the wall of water is a dry riverbed. This has been confirmed as the FED’s credibility is shot. Even if they could continue sending what water is left down the canyon it wouldn’t even come close to filling the new channel or be capable of forming anything that resembles the river that once was.
It is difficult to imagine a more desperate state of affairs. This is one of the miracles of central planning, that it always and in every sense is a failure for everyone. In some rare cases the planners benefit but for the most part, in the long run, even they are poorer for their efforts.
So what awaits the economy are unpredictable rolling blackouts as the lack of water causes random and unexpected defaults and quasi-defaults to occur until all participants learn to not trust each other. Oddly enough, only then will something resembling organic growth begin anew.
An interesting idea was brought to our attention yesterday. The idea is that the FED’s charter as America’s Central Bank is set to end on December 21, 2012, which nicely coincides with the final date on the Mayan Calendar. We then further investigated and saw that someone with the Youtube user name “Man of Truth” predicted that the FED would be bankrupt in December of 2012 back in 2009.
While back in 2009 the Man of Truth may have sounded like a lunatic, circa 2011 his prediction seems not only possible but highly likely. While the December 2012 date is arbitrary, all of this taken together with the fact that many people believe the Mayan Prophecy may be enough to disrupt life as we know it for an extended period of time.
Courtesy of http://bizarrocomics.com/
While we at the Mint do not personally believe in the Mayan Prophecy or the FED for that matter, we have a feeling that enough people do believe to warrant being prepared for an extended period of random rolling economic blackouts which will probably begin early in 2012, making the best time to prepare for them, well, now.
How to prepare? First and foremost, accept Jesus Christ as your personal savior. Then, not matter what happens, you have absolutely nothing to fear, not even death.
Second, financially act as if a flash flood is coming down the canyon and get whatever you think you may need to ride out the blackout period close at hand because the probability of obtaining it later is diminishing with each passing day.
Third, help others to do likewise. In the process of helping others, you will literally be laying the foundation for the bright future that awaits you.
Piece of cake, right?
Meanwhile, the security situation in Palestine the Middle East continue to deteriorate. Will it be enough to distract the West from its own perilous situation?
*See FED Perceived Economic Effect Rate Chart at bottom of blog. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.
Rationale: Stocks of Oil tanker transporters are turning slightly higher which generally leads to an increase in the spot price of oil. This, combined with the effects of Bernanke’s market soothing words today should push commodity prices more than stock prices. This is the new trend, fresh money is moving into higher commodity prices which will eventually erode stock prices on a relative basis.
We came across this video today posted by the “Man of Truth” who apparently makes these sort of predictions. He made his in 2009 and we have to admit that every day that passes the financial world is careening towards this inescapable outcome. Last week we read how it is technically possible, no, probable, that this will occur. What do you think? The “Man of Truth” has his opinion, enjoy!
The U.S. Custom House has sat magnificently vacant since its last tenant, the U.S. Army Corps of Engineers, vacated it nearly five years ago.
This grand old building, which graces the block surrounded by NW Broadway, Park, Davis and Everett streets, was declared unfit for service. Ironically, the very thing that makes the building magnificent, its timeless masonry, makes it especially vulnerable to an earthquake.
The U.S. Custom House is a beautiful example of Italian Renaissance Revival style of architecture. It was built in 1897 by the architect Edgar M. Lazarus and was beautifully restored in 1992. Since May of 2010, the Federal Government has been searching for a buyer for this gem in the pearl. While the building initially allures would be buyers with its stately exterior, up until now none has been able to stomach the roughly $10 million estimated cost of retrofitting it to withstand an earthquake.
And so it sits, a beautiful, lonely museum piece.
The musuem was brought to life one year later. During the month of May 2011, the normally stoic U.S. Custom House became the center of a flurry of activity.
First came the cables, which began to across the sidewalks,up the walls, and into the windows of the Custom House from all sides. Next, the lights, generators, and scaffolding were installed. Was the long awaited retrofit about to begin?
Then appeared the costume trucks and the catering vans. Lights, camera, action! The set of “Gone“, a thriller written by Allison Burnett, directed by Heitor Dhalia, and starring Amanda Seyfried, Jennifer Carpenter and Wes Bentley, had taken shape right under the nose of the inhabitants of Old Town China Town.
Action on the set of "Gone" filmed at the U.S. Custom House
When the last of the cast a crew support vehicles took their familiar places at NW Sixth and Davis, the suspicions were confirmed. The U.S. Custom House was to be a star on the silver screen. The month of May saw countless extras roaming the streets of Old Town and generally breathing much needed life into the neighborhood.
Then, as quickly as they had appeared, the support vehicles pulled away, the power cables slithered out of the building and the booms were put away. “Gone” was…gone.
Do not despair! “Gone” is set to give chills to audiences across the nation in February of 2012. Will one of those viewers, upon seeing this Gem in the Pearl, have the vision to transform the U.S. Custom House from dormancy into a functional, modern, and vibrant space?
Rationale: Banks, of which Bank of America, being the largest consumer bank, is an indicator, had some very bad press today as far at their prospects. While we believe that in the long run these stocks are nearly worthless, B of A is likely to rise in the face of such negative sentiment.
Result of Call for June 1, 2011:Greek 5-YR Sovereign Credit Default Swap to fall. Was 1608.50, Currently 1390.97. Good Call.
Calls to Date: Good Calls: 25, Bad Calls: 18, Batting .581
Rationale: Caterpillar has risen dramatically over the past year. The sudden downturn in economic indicators and commodity prices will mute demand for its products which will reflect in a share price that drifts quietly downwards through the summer months.
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