Monday's VUE 04/08/2013

Opening Viewpoint - 04/05/2013

Good Morning World...   My wife and I went to Canada yesterday to observe an Indian families nursery, farm and Retail Store.  It was larger than any small farming effort on the USA side of the border.  The closest we have observed is a small family farm in Colville, Wa named Front Porch.

There were many things we observed about the operation, but the thing that impressed me most is they had onions growing outside already.  Now be aware in our area every night is freezing, and some nights are still in the low 20s.    The land was already prepared for cool weather crops; although even they have not planted broccoli and cabbage.  We have ours in (but not on this scale of course).  

The greenhouses while older were clean, organized and well just downright beautiful if you like that sort of thing (which we do).  

Morning News

• Last week, the market was pulled in every direction, and in the end it could best be related, it went nowhere.  Traders can loose lots of money in this kind of whiplash markets.  First there was the potential war with North Korea, then soft economic data, political insanity in the Eurozone, and Japan's economic insanity with unprecedented stimulus.  By percentage, Japan's stimulus dwarfs the US stimulus.  
• Friday's job report was awful.  Business appears reluctant to hire.  Small business sentiment will come out this weak, and it will be difficult for any optimism by small business.  THis will certainly keep QEternity in place. 
• The trade deficit narrowed. As reported last week energy exports are a major growth point for the US.  
• There is no clear indication of which way the market should go today or the rest of the week.  At the moment after opening, the financial sector, Google are down.  However, TLT (Notes) are down which usually indicates an up market.  Mixed signals coming out of the chute.  Price is actually above Friday's close.  
• I'm told by my friends in NY this morning that most traders are optimistic about earnings season.  Earning seasons starts after the market closes. tonight.  
•  Alcoa (NYSE:AA) will release quarterly reports this evening.
• Dr. Bernanke will give a speech in Atlanta talking about the bank stress test.
• S&P futures -- 1500 is major support and remains crucial.  On Friday, the market broke through this area, then rallied from there on the rest of the day.  There is no way with the Federal Reserve buying at whim to say which way the market will break.

USA

• The world’s financial situation, the economies and the Politicians are all dislocated.  Of course this has happened before, but there is no instance that compares with now.  Dislocation comes when the economies are doing one thing and the markets are doing something else that is not connected.  This disconnect now is on a level that has never been observed before.
• Political nonsense is the normal world’s (not just USA) banter, and the media is just printing noise (except as reported last week with the reporting of rich people’s financial transactions).   Basically, the news media in the USA is just re-hashing the Obama administration’s rah-rah statements on labor, housing and anything else they can find positive (which there isn’t much positive, and so it indicates the disconnect in the USA specifically).
• Talk about political fantasy:  The employment numbers on Friday are pure fiction.  It is done by NOT counting the amount of people no longer in the work force so the data is skewed.  
• A good indicator of the economy was Friday’s employment numbers.  The BLS puts out the B.S. regarding unemployment, but they still estimate the real numbers if you want to find them.  But the media (and the white house) focus on the B.S. numbers.  Of course, you will have to combine all the different numbers from U1-U6.  U6 shows 14% unemployed, but if we look at the way the government reported during the Great Depression (and dropped in 1994), the unemployment rate is > 22%.  http://www.shadowstats.com/alternate_data/unemployment-charts
• The disconnect between the economy and the markets are all due to the Fed’s outpouring of money into a system which is devastating small business and fixed income (Social Security), and savings accounts.  
• The Fed money has pushed the stock market beyond anyplace the economy can rationally support.  
• Irrational (exuberance)? 
• At the moment, the actions of the central banks are irrational. The money created must go somewhere, and so it does by going into the stock markets and other liquid markets.  Has that improved the American economy?  Not by much.  
• My mentor in NY disagrees with me vehemently, but I maintain that instead of printing all this money and giving it to banks, the Fed should have dropped the money from helicopters, given to the consumer, and let them spend it. Even if that was only temporary, it would have caused demand to soar.  
• Inflation?
• The Bureau of Labor Statistics indicates inflation in the U.S. economy has caused prices to increase by only 12% since 2007 – what costs $1.00 in 2007 now costs $1.12.  Using BLS figures again, the PPI (Producer Price Index) rose .7% in February, which indicates an annual rate of 8.4% if that continues.  Corn, wheat, and many other staples are on the rise, and this has been reported in my blog as inflation in general food prices.  
• However, the way the Federal Reserve tracks inflation (and what is reported to the US citizen) is we have no inflation and certainly nothing approaching the 2% target.
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Euro

• New Trouble of Euro – Portugal.  Portugal warns they will be forced to cut spending more and that people’s lives will become more difficult.  http://www.nytimes.com/2013/04/08/business/in-portugal-more-cuts-on-way-to-ease-debt-crisis.html?nl=todaysheadlines&emc=edit_th_20130408&_r=0

Great Britain (United Kingdom)

• Margret Thatcher passes on.   Good by Margret…  In the Great Britain, the USA had no better friend and ally than you.  “"the problem with socialism is that you eventually run out of other people's money" - Margaret Thatcher
• http://www.cnn.com/2013/04/08/world/europe/uk-margaret-thatcher-dead/?hpt=hp_t1

China

• March is the time for a DELUGE of economic data from Mainland China.
• CPI is expected to moderate to 2.5% from the 2.6% average in January/February
• New YUAN loans will be reported this week.  It is expected to climb substantially
• Exports are expected to rise 12% year over year
• Imports will rise, but slow from the February 16% rise. 
• Manufacturing will increase
• H7N9 – There is s spread of the bird flu, and it is quite alarming.  This will have an affect on farm produce – specifically pigs and chickens.

Precious Metals

Paul Craig Roberts speaks out:  The Assault on Gold

http://www.paulcraigroberts.org/

When gold prices hit $1,917.50 an ounce on August 23, 2011, a gain of more than $500 an ounce in less than 8 months, capping a rise over a decade from $272 at the end of December 2000, the Federal Reserve panicked. With the US dollar losing value so rapidly compared to the world standard for money, the Federal Reserve’s policy of printing $1 trillion annually in order to support the impaired balance sheets of banks and to finance the federal deficit was placed in danger. Who could believe the dollar’s exchange rate in relation to other currencies when the dollar was collapsing in value in relation to gold and silver.

The Federal Reserve used its dependent “banks too big to fail” to short the precious metals markets. By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Federal Reserve was able to drive the price of gold down to $1,750 and keep it more or less capped there until recently, when a concerted effort on April 2-3, 2013, drove gold down to $1,557 and silver, which had approached $50 per ounce in 2011, down to $27.

The truth is offensive  Here is Paul Craig Robers on being an enemy of the state:

I am offensive. Michael Hudson is offensive. Gerald Celente is offensive. Herman Daly is offensive. Nomi Prins is offensive. Pam Martens is offensive. Chris Hedges is offensive. Chris Floyd is offensive. John Pilger is offensive. Noam Chomsky is offensive. Harvey Silverglate is offensive. Naomi Wolf is offensive. Stephen Lendman is offensive. David Ray Griffin is offensive. Ellen Brown is offensive.

Fortunately, many others are offensive. But how long before being offensive becomes
being “an enemy of the state”?