Tag Archives: Economic Slowdown

A Fierce One-Two Punch Wallops Financial Markets

9/2/2011 Portland, Oregon – Pop in your mints…

Just when you thought it couldn’t get any worse, Friday delivered a doozy of a one-two punch to the financial markets.  The jobs report everyone watches showed that no new jobs were added in August.  While this should come as no surprise to the sober and observant, most traders and economists took it square on the jaw with their gloves down at their sides.

The Chart of the Day, courtesy of the Money Game, shows what intelligent people like yourself, fellow taxpayer, already know.  This recession is not like anything the current authorities have ever dealt with before.  It is a balance sheet problem that has only one solution, widespread default.

The second punch came in the form of a lawsuit filed by the US Government against some of the heavyweights in the banking industry.  A list of the defendants can be seen here and lo and behold, Bank of America is one of them.

There is much to think about over the coming weekend, but we think Michael Pento of EuroPacific Capital summed it up best in and interview yesterday:

“…do not keep money in the bank.  You have to buy something that the government cannot duplicate by fiat.”

By fiat, he means currency or, by extension, bonds that are denominated in them.  Starting in January, the FED’s cheapest money ever begins to hit main street.  Then inflation will be on everybody’s mind.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for September 2, 2011

Copper Price per Lb: $4.12
Oil Price per Barrel:  $86.45

Corn Price per Bushel:  $7.50  
10 Yr US Treasury Bond:  1.99%

FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,884 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.5%!!!   UP 0.7% IN ONE MONTH, 8.4% ANNUALLY AT THIS PACE!!!
Dow Jones Industrial Average:  11,494  TO THE MOON!!!

M1 Monetary Base:  $2,108,800,000,000 RED ALERT!!!
M2 Monetary Base:  $9,473,600,000,000 YIKES!!!!!!!

Is America becoming ungovernable?

8/17/2011 Portland, Oregon – Pop in your mints…

Almost nothing of consequence happened today in the markets.  Just what one would expect on a quiet August day.   Silver and other commodities are poised to go higher, but our guess is that it will wait a month to really hit its stride.  At that point, inflation could really be a problem.

August is a time for reflection and relaxation.  Casting off the cares of the past 11 months and charging the batteries for another run.  At The Mint, we are pondering a great many things.  Our dear German friend who has been with us here in Portland the past nine months left for Frankfurt today.  She will be missed dearly by all.  It seems that Oregon had a special impact upon her as well and she commented that this season has been one of the most pleasant of her life.

Yes, Oregon is a special place.

“There is so much nature here!” she commented upon returning from a trip to Montana.  Apparently in Germany every square mile is spoken for, leaving wild animals little room to roam.  One of her chief concerns on these excursions was the bears.  Who can blame her, with the news coming out of Yellowstone at the time? 

She is heading to Barcelona to start a ministry and we wish her well, for she is now one of the family.  Hospitality blesses one in ways they cannot imagine.

August thoughts in the US are being rudely interrupted by the presidential campaigns that are warming up in Iowa and are heading to New Hampshire to continue the race in which the winner will declare themselves King of the Americans. 

As Bloom County fans may recall, when the Meadow party nominated Bill the Cat and Opus for the job, they concluded that only a complete idiot would apply after careful consideration of the job description which in there estimation included “being blamed for every problem on the planet.”

The complete idiot label came to mind after we heard a comment in a video shared with us by a friend in which Bill Hybels, the Pastor of Willow Creek, a large church in Illinois, noted that the tendency in American dialogue today is to “throw stones first” and ask questions later.  He explained that people grab onto comments and statements made by others and publicly villianize them without bothering to consider the context or verify the validity of said statements.

His remarks were made at the Willow Global Leadership Summit while addressing the interesting situation in which Howard Schultz, the CEO of Starbucks, backed out of his contract to appear at the summit after receiving threats of a boycott from a group who claimed that Willow Creek was anti-gay.

He went on to say that this phenomenon is making America “ungovernable.”

Mr. Hybels did not go into detail as to how this phenomenon would make the country ungovernable, but the idea got us thinking.  What makes a country governable in the first place?  Do people naturally need government in order to survive?

In the sense that people need to feel protected and able to care for themselves and their loved ones, people may need the concept of government.  People, knowing their weak state on this planet, need to believe that someone is looking out for them.  This need leads them to subject themselves to the idea of government.

Inevitably, those who are entrusted with embodying the idea of government find that they are given quite a bit of power over the lives of others and quickly learn to abuse it.

This leads the subjects to seek freedom from the government while at the same time looking for someone of something else to fulfill the basic needs of protection and material well-being.  Seen this way, when a people become “ungovernable” they are rejecting the government under which they are because of a perceived or actual abuse.

It is important to note that, for people to reach this state, they must feel that they are out of options under the current government.  Economic hardship has a lot to do with how people perceive their options.  It should come as no surprise then that economic hardship is a result of policies which restrictive freedom.

Free men are infinitely more productive than slaves.  A policy change in either direction will express itself in economic results.  The results in America prove that we are a people becoming enslaved.

When things go well, no one cares who is governing.  When things go badly, they become unnaturally preoccupied with the political process.  America circa 2011 is moving towards this unnatural preoccupation.

Ironically, the more one concentrates on the government and its political processes, the more it becomes evident that the very existence of a government organized by men may be more a threat to than a protector of the basic needs of protection and material well-being.

We have stated before that in practice the governments of the world today operate like competing defense agencies.  It may be, then, that Americans are tired of the current contractor and are searching for another one; one that is less intrusive and has fewer overhead costs to cover.

Will they find it before they are completely enslaved by the current one?

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for August 17, 2011

Copper Price per Lb: $4.03
Oil Price per Barrel:  $87.43

Corn Price per Bushel:  $7.11  
10 Yr US Treasury Bond:  2.16%

FED Target Rate:  0.10%  TIGHTENING?  NOT!

Gold Price Per Ounce:  $1,789 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  -0.2%!!!  PULL OUT THE HELICOPTERS!!!
Dow Jones Industrial Average:  11,410  TO THE MOON!!!

M1 Monetary Base:  $2,140,300,000,000 RED ALERT!!!
M2 Monetary Base:  $9,404,000,000,000 YIKES!!!!!!!

Crash! The Mother of all Calls illustrated by Dave Kingman

8/4/2011 Portland, Oregon – Pop in your mints…

Today the Dow fell some 500 points.  Looking further, everything seemed to fall today.  We hope you have a good umbrella,  fellow taxpayer, it could be quite a storm.

Three noteworthy things seemed to have taken place in no particular order and for no apparent reason other than to unite to tank financial asset prices all over the globe, which is no small feat.  We will take them one by one.

First, overnight, the Japanese Central Bank intervened to prop up the dollar (or weaken the Yen, however you prefer to look at it).

Second, the world gave a collective thumbs down to the Eurozone’s “effort” to stabilize its bond markets.  The Euro Feds appear over matched in their currency union’s first true fidelity test.

This uncoordinated action led to the third event which we will call the “mother of all calls” on the US Dollar.  With short and long interest rates skipping around a zero as far as the eye can see, speculators have taken swings at the dollar like Dave Kingman at the 2-0 fastball.  The dollar is already sold short on an almost unimaginable scale.

Today, those speculators, ala Dave Kingman, whiffed and nearly fell over.  The only way this “mother of all calls” could be satisfied was for those short the dollar to quickly and injudiciously exit other positions.

This exiting injudiciously of  other positions is colloquially called a crash.

This crash, along with the foul smelling economic datacoming out of the US will give the Fed and Congress all the ammunition they need to launch both QE3 and any and every fiscal stimulus program they can dream up.

QE3 and fiscal stimulus on steroids will soon prove those speculators short the dollar right and the final, sordid chapter of the US Dollar’s history is about to begin!

Dave Kingman may have whiffed at the 2-0 fastball, but he has two more swings…

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for August 4, 2011

Copper Price per Lb: $4.19
Oil Price per Barrel:  $85.60

Corn Price per Bushel:  $6.93
10 Yr US Treasury Bond:  2.46%
FED Target Rate:  0.12%  TIGHTENING?  NOT!

Gold Price Per Ounce:  $1,649 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.2%
Inflation Rate (CPI):  -0.2%!!!  PULL OUT THE HELICOPTERS!!!
Dow Jones Industrial Average:  11,384  TO THE MOON!!!
M1 Monetary Base:  $2,012,200,000,000 RED ALERT!!!
M2 Monetary Base:  $9,226,100,000,000 YIKES!!!!!!!

*See the MINT Perceived target Rate Chart.  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.

72 Hour Call for June 3, 2011

Today’s Call:  Caterpillar (CAT) to fall.  Currently $101.10

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.

Result of Call for May 31, 2011:  GSG Commodity Index to rise.  Was $36.38, Currently $36.05.  Bad Call. 

Calls to Date:  Good Calls: 24, Bad Calls: 18, Batting .571

72 Hour Call for May 26, 2011

Today’s Call: Dow Jones Industrial Average to fall. Currently 12,402.

Rationale:  Dow rose today on mostly bearish news.  Ripe for a selloff.  Key Dow financials components are being seen as weak. Combination of selling and stronger dollar to lower Dow.

Result of Call for May 23, 2011: USD Index to rise. Was 76.14, Currently 75.57. Bad Call

Calls to Date: Good Calls: 22, Bad Calls: 15, Batting .594

72 Hour Call for May 24, 2011

Today’s Call:  Copper price to Fall.  Currently $4.00 / lb

Rationale – Copper is currently in a large oversupply and with news of a European Debt Crisis and a further slowing economy copper will continue a slow trend downwards.

Result of Call for May 19, 2011:  Linkedin Corporation to Fall.  Was $104.25. Currently $94.45.  Good Call

Calls to Date:  Good Calls: 21, Bad Calls: 14, Batting .600