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The Goldbugg Report – April 13, 2010

April 13, 2010

-BOMBSHELL Whistle Blower Comes Forward With Solid Proof the Price Of Gold And Silver Is Being Manipulated By Major Financial Institutions

-Gold is the ultimate currency…

-Silver institute 2010 Q1 newsletter

GOLD

-Rob McEwen gold is the ultimate currency. Rob McEwen is sticking to his guns and his predictions when it comes to the price of the yellow metal. Speaking on the Mineweb Gold Weekly podcast, Rob McEwen, the CEO of US Gold and the founder and former Chairman of Goldcorp, retains his long-held views on the gold price (he has recently been quoted as suggesting gold will hit $2,000 this year on its way to $5,000).

He says that gold is being driven up by the massive amount of debt that’s in place right now and the huge spending programmes by the governments of the west. These countries, he says, are debasing their currencies in an effort to kick start their respective economies and, while this may work in the short term he says, “long and intermediate term we’re going to see the ramifications of this and it will look something like the Weimar Republic of the twenties”.

He adds, “First you have to appreciate that gold is money. Here it is an alternative currency, the ultimate currency because it can’t be manufactured the way all the paper currencies of the world are, the FIAT currencies. The supply of gold can only expand at the rate of annual production and that’s about 1% a year whereas the paper supply is just a question of how many zeros you put in and you can print out as much as you want.”

While McEwen admits that other factors, such as demand from Asia have a role to play in boosting the price of the yellow metal, in the end it comes down to money, how people keep it, store it and ensure its value doesn’t diminish.

“August 2007, to me that was the turning point,” he says, “that was the first time in probably the last 30 or 40 years that suddenly the entire banking system of the world appeared to be in jeopardy and the question was not of ‘how much do I earn on my money’, it is ‘how do I protect my money’, and gold has served that role over the millennium and it’s about to do it again.” Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=101862&sn;=Detail&pid;=34

-Richard Russell gold commentary. The great bull market in gold is in its tenth year. The incredible thing about this bull market is that it is still ignored by the media and the public at the same time it’s hated by the central banks, although ironically, they are now actually buying gold. On top of that, the sovereign funds of the various nations are adding gold to their currency mix.

Since the year 2000 the best asset class to be in was precious metals and gold. Yet never was a huge bull market so ignored, so dismissed, and disliked. Even today after rising from 250 in 1999 to 1150 today, only a tiny fraction of Americans own so much as one single gold coin. Most Americans have never seen a gold coin, and I ask myself how long can this go on? Read more here-http://www.321gold.com/editorials/russell/russell040610.html and http://www.321gold.com/editorials/russell/russell040210.html

-Gold’s major trend has been up for nine consecutive years, yet the investing public has barely begun to invest. It’s not well known that this bull market even exists. This in itself is bullish because it means the 375% gain over the last almost decade will be pale compared to the potential this second phase of the bull market could have.

The markets are one big ball of mass emotions. And in many ways, the first nine years of the stock market’s mega bull market rise from the mid-1970s through the 1990s was similar to this bull market rise in gold. Chart 1 shows the S&P500; from the 1974 major low to the 2000 peak, compared to the gold market from its 2001 low to the present. Here you can see the similarities of the first nine years.

In both cases, the rise wasn’t generally noticeable because another overpowering market was the main focus. In 1974-1983 the gold market was the flurry, not the stock market. Since 2001, it’s been the stock market flurry, which carried over from the tech and global boom that has had more attention.

This is not to say that gold today is where the stock market was in 1983, ready to embark upon a mega decade bull market, but it could. These similarities and many others suggest that gold’s bull market has much further to run. Aden Sisters-Read more here-http://www.321gold.com/editorials/aden/aden040110.html

-James Turk: A “New Dynamic” in the Gold Market. Read more here-http://www.fgmr.com/new-dynamic-in-the-gold-market.html

-Bill Fleckenstein says “Buy Gold to Hedge Inflation.” Watch more here-http://www.bloomberg.com/avp/avp.htm?N=video&T;=4%2F5%20Fleckenstein%20Interview%20on%20Inflation%20Outlook%2C%20Advice%20&clipSRC;=mms://media2.bloomberg.com/cache/v1yHHCS4.F6M.asf and http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/inflation-warning-etched-in-steel.aspx?page=all

-Gold to the masses-China’s top bank partners with World Gold Council. The latest news out of China of gold marketing co-operation between the country’s largest bank and the World Gold Council will likely help underpin gold prices at the very least.

The news today that the state-owned Industrial and Commercial Bank of China (ICBC), the China’s largest bank by assets, is to co-operate with the World Gold Council to help promote gold in China, is but the next sign that the Chinese hierarchy is continuing to push gold as an investment to its general population. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=101831&sn;=Detail&pid;=33

-China, other Asian countries and gold why they underpin the price. Developments in China, India and elsewhere in Asia and the Middle East, look like they are underpinning the gold price nicely and limiting downside risk. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=102255&sn;=Detail&pid;=1

-Clive Maund gold market update. Read more here-http://news.goldseek.com/CliveMaund/1270409127.php

-Ned Schmidt’s Gold Thoughts. Read more here-http://www.kitco.com/ind/Schmidt/apr052010.html

-Michael Berry: Finding Safety in the Precious Metals. Read more here-http://www.theaureport.com/pub/na/6007

-Jim Rickards: U.S. could be solvent again with gold at $5,500. Read more here-http://www.gata.org/node/8519

-Very positive on gold outlook, bullish on platinum and palladium-John Licata. Gold prices continue to climb and John Licata, chief commodity strategist at Blue Phoenix Inc., says he sees reason to be optimistic about gold’s future. Interview with The Gold Report. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=101993&sn;=Detail&pid;=33

-The U.K.’s Royal Mint, established in the 13th century, said first-quarter gold coin production shrank 50 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601012&sid;=as5Bmo1JJ97E

-Sorry Eric Sprott, There’s No Way You’re Buying Gold From The IMF. Read more here-http://www.gata.org/node/8511 and http://www.businessinsider.com/eric-sprott-gold-imf-2010-4

-Eric Sprott Talks To Us About Gold, GATA, The IMF, And The Plunge-Protection Team. Read more here-http://www.businessinsider.com/eric-sprott-gold-etf-imf-2010-4

-UK Treasury Releases FOIA on Gordon Brown’s 1998 Gold Sale, Catches Tony Blair Lying, Questions US Treasury’s Good Delivery Standards. Read more here-http://www.zerohedge.com/article/uk-treasury-relases-foia-gordon-browns-1998-gold-sale-catches-tony-blair-lying-questions-us-

-Brown defied Bank of England warning over his £6bn gold giveaway. Read more here-http://www.dailymail.co.uk/news/article-1262683/Brown-defied-Bank-warning-6bn-gold-giveaway.html?ITO=1490

-The Latest Gold Fraud Bombshell: Canada’s Only Bullion Bank Gold Vault Is Practically Empty. Read more here-http://www.zerohedge.com/article/latest-gold-fraud-bombshell-canadas-only-bullion-bank-gold-vault-practically-empty Listen here-http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/4/7_Andrew_Maguire_%26_Adrian_Douglas.html

-King World News has more evidence of unbacked gold and silver certificates. Listen here-http://www.gata.org/node/8513

-Jim Richter: Are metals markets rigged? Read more here-http://www.gata.org/node/8512

SILVER

Gold to silver ratio at 80 to 1 with gold at $1,700 the silver price would be $21.25

Gold to silver ratio at 70 to 1 with gold at $1,700 the silver price would be $24.29

Gold to silver ratio at 60 to 1 with gold at $1,700 the silver price would be $28.33

Gold to silver ratio at 50 to 1 with gold at $1,700 the silver price would be $34.00

Gold to silver ratio at 40 to 1 with gold at $1,700 the silver price would be $42.50

Gold to silver ratio at 30 to 1 with gold at $1,700 the silver price would be $56.67

Gold to silver ratio at 20 to 1 with gold at $1,700 the silver price would be $85.00

Gold to silver ratio at 15 to 1 with gold at $1,700 the silver price would be $113.33

-Silver institute 2010 Q1 newsletter. Read more here-http://www.silverinstitute.org/images/pdfs/1q2010.pdf

-James Turk: Silver Looks Ready to Soar. Everything is lining up for silver, which looks ready to soar. The catalyst to launch silver like a rocket may very well turn out to be last week’s CFTC hearing, which revealed the huge naked short position in the precious metal markets.

In my annual forecast for 2010, I said: “We need to start thinking about silver hurdling above $50. If it doesn’t happen in 2010, this important event – which is unimaginable to many – will I expect happen in 2011.” The following chart suggests that my forecast is still on target.

Silver has formed a huge accumulation pattern. One could even make the case that it is a reverse ‘head & shoulders’ pattern, with two shoulders that are shallow compared to its deep head. The right shoulder is now being completed, and the pattern will manifest its bullish significance when silver climbs above the neckline around $20.

Looking at it from a pure technical point of view, this pattern can forecast silver’s price target. The difference from the neckline to the bottom of the head is about $13.50. When this difference is added to the neckline, the near-term objective on the breakout is $33.50. In other words, the upside breakout from this pattern could be breathtaking. Read more here-http://www.fgmr.com/silver-looks-ready-to-soar.html

-Silver couldn’t be more bullish, Ted Butler tells King World News. Listen here-http://www.gata.org/node/8505

-Ted Butler urges one more letter to the CFTC on position limits. Read more here-http://www.gata.org/node/8517

-Clive Maund silver market update. Read more here-http://news.silverseek.com/CliveMaund/1270408897.php

-Silver Short Squeeze Could Be Imminent says National Inflation Association. On December 11th, 2009 NIA declared silver the best investment for the next decade. Read more here-http://www.prnewswire.com/news-releases/silver-short-squeeze-could-be-imminent-89838712.html

-The Gold-Silver Ratio: Is gold too high, or perhaps silver too low? With the gold-silver ratio still above its historic norm, will silver start to play catch-up? Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=102016&sn;=Detail&pid;=33

-Richard Daughty: The silver boom is coming. Read more here-http://news.silverseek.com/SilverSeek/1270405742.php

-Mike Maloney Discusses Silver, Gold Prices. Watch video here-http://www.bloomberg.com/avp/avp.htm?N=video&T;=Maloney%20Discusses%20Silver%2C%20Gold%20Prices%20&clipSRC;=mms://media2.bloomberg.com/cache/vUsFDWMsScsU.asf

-Have We Just Seen The End of The Big Rally in Silver? Read more here-http://news.silverseek.com/SilverSeek/1270672377.php

-Howard Ruff: Think Outside the Box: Maverick Investing in the Age of Obamanomics Part 4. Read more here-http://www.kitco.com/ind/Ruff/ruff_apr082010.html

-Marc Faber, Don’t Buy Stocks, Euro Oversold, Precious Metals the place to be. Watch video here-http://www.youtube.com/watch?v=6iqIlq3j2YY

-King World News interviews John Williams of shadowstats.com. John discusses looming hyperinflation, gives an astounding prediction on future unemployment and also discusses some surprising inflation adjusted price possibilities for both gold and silver and much more. Listen here-http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/4/3_John_Williams.html

-Premiums Play a Role in Indicating Silver Manipulation. Read more here-http://news.silverseek.com/SilverSeek/1270668537.php

-Max Keiser covers silver market rigging on Russia Today network. Watch video here-http://www.gata.org/node/8506

CHARTS OF THE WEEK-QUOTES-QUICK HITS

-BOMBSHELL Whistle Blower Comes Forward With Solid Proof the Price Of Gold And Silver Is Being Manipulated By Major Financial Institutions, http://beforeitsnews.com/story/32124/BOMBSHELL_Whistle_Blower_Comes_Forward_With_Solid_Proof_The_Price_Of_Gold_And_Silver_Is_Being_Manipulated_By_Major_Financial_Institutions.html

-Chart of the week: Why The Gold-To-Oil Ratio Suggests Oil Could Go A Lot Higher. One remarkable aspect of the recent runup in oil is that it’s decidedly not the result of a weak dollar. That was not the case in 2007 and 2008 when oil was going nuts, and New York restaurants were pricing their menus with euro symbols.

There’s no surefire way to measure oil ex-dollars, but measuring it in gold is a reasonable approach, since it’s the anti-currency. So let’s look at little further. At the end of 2008, the number of barrels you could buy with one ounce of gold surged to ridiculous highs, the combination of a deflationary collapse (the oil drop) and global fear (the gold spike).

But look since 2000 and the trend is clear. One ounce of gold is buying you less and less oil. We appear to be reverting to trend. Oil can go a lot higher. Read more here-http://www.businessinsider.com/chart-of-the-day-oil-barrels-per-an-ounce-of-gold-2010-4

Source: chartoftheday.com

-Chart of the week: If China Keeps Growing, High Oil Prices Will Crush Us. It’d be great to inhabit a world where all economic growth were positive sum. They grow, we grow, everyone’s happy.

But where there’s a shortage of key resources, not everything is so rosy.

This chart, put together by HedgEye, shows a nice correlation between Chinese oil imports (measured in tons) and the price of oil, though obviously the price of oil swings more wildly. If China keeps growing and really, how will it not? Oil seemed destined only to go in one direction. Read more here-http://www.businessinsider.com/chart-of-the-day-oil-imports-to-china-vs-oil-price-2010-4

Source: chartoftheday.com

-Chart of the week: After the Bureau of Economic Analysis (BEA) recently released its monthly personal income and outlays report, the major media cherry picked the data boasting the headline “Consumer Spending Rises Again in February” or some variant on this theme.

What wasn’t widely reported was the fall in personal disposal income together with a rise in personal consumption over this same period. The only way to balance that ledger is by taking on debt. Old habits die hard.

To get a better handle on a trend, we need a wide-angle lens. As today’s chart shows, personal income in the U.S. fell last year for the first time since 1969, the year the BEA began publishing the data. If a sustainable U.S. economic recovery hinges on an upturn in housing, neither is likely to happen if incomes in America continue falling, especially in the states most challenged by the crash in home prices. Read more here-http://www.caseyresearch.com/displayCcs.php?e=true

-Chart of the week: The Consumer Dies Again. Here it is, folks, the chart to break a million retailers’ hearts. It’s the Fed’s latest consumer credit reading, and after starting to come back, total outstanding consumer credit has fallen right back down, with a monster month-over-month decline. Read more here-http://www.businessinsider.com/chart-of-the-day-the-consumer-dies-again-2010-4

Source: chartoftheday.com

-“The urge to save humanity is almost always a false front for the urge to rule.” H.L. Mencken

-“I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant.” H.L. Mencken

-A good friend of ours at UBS, Robert Procaccianti, periodically emails us his pithy market thoughts, and yesterday he sent us the following. Great digging into some now infamous quotes after the 1929-30 bear market and the widespread view at the time that the worst was over because, of course, Mr. Market said so… erroneously as it turned out. David Rosenberg-Gluskin/Sheff

“[1930 will be] a splendid employment year.” U.S. Department of Labor, New Year’s Forecast, December 1929

“I am convinced that through these measures, we have re-established confidence.” Herbert Hoover, U.S. President, December 1929.

“While the crash only took place six months ago, I am convinced we have now passed through the worst and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.” Herbert Hoover, U.S. President, May 1930.

“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.” R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

“The Wall Street crash doesn’t mean that there will be any general or serious business depression. For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game. Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before.” BusinessWeek, November 2, 1929

“Despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation.” Harvard Economic Society (HES), November 2, 1929

“The end of the decline of the Stock Market will probably not be long, only a few more days at most.” Irving Fisher, Professor of Economics at Yale University, November 14, 1929

“For the immediate future, at least, the outlook (stocks) is bright.” Irving Fisher, Ph.D. in Economics, in early 1930

“The outlook continues favourable” Harvard Economic Society Mar 29, 1930

-Our contemporary brand of socialism has one fatal flaw. It’s too expensive. When you try to shower benefits on so many recipients, you eventually must resort to subterfuge. Foremost among those tricks is money and credit expansion. Inevitably, you debase your currency. James Cook

-You live in a bankrupt country, along with 18 other major bankrupts, and you will soon learn how you are going to lose everything you have worked a lifetime for. A rise in interest rates of 5% adds $620 billion annually to the US debt in interest alone and that is rising exponentially. The US, nor any government, can survive such debt service. Bob Chapman-Read more here-http://news.goldseek.com/InternationalForecaster/1270651222.php and http://news.goldseek.com/InternationalForecaster/1270400400.php

-So how are Americans coping with the pain? In a Harris Interactive online poll, 63% said they were purchasing more generic brands to save money, 45% brown-bagging their lunches, 39% going to the hairdresser or barber less often, 34% switching to refillable water bottles instead of purchasing bottled water and 33% canceling one or more subscriptions.

Around two in 10 said they had cancelled or cut back cable TV services and another 20% said they have considered doing so. Some are taking more drastic action. Twenty percent told Fox News/Opinion Dynamics pollsters they had taken money out of the market because of their concerns about the economy, 18% stocked up on food, bottled water or other staples, 11% bought a gun and 6% purchased gold. Read more here-http://www.forbes.com/2010/03/27/economy-polls-investing-opinions-columnists-karlyn-bowman_print.html

-Those who look upon Gold as a way to “make” money are the ones most likely to get burned. Those who understand that Gold is money, have not bothered to “time” their acquisition of it. They have simply been acquiring it as and when they can for many years now. They will continue to do so. Bill Buckler-The-privateer.com-13 March 2010

-We maintain our view that gold is in a secular bull-market and every investor should own some bullion as an insurance policy. Puru Saxena-Read more here-http://www.321gold.com/editorials/saxena/saxena040710.html

-Investors shouldn’t sell gold now as the metal may rise to “at least $2,000 by the end of the decade,” investor Jim Rogers, chairman of Rogers Holdings, said in an interview with Bloomberg Television today, reiterating an earlier forecast. Bloomberg

-In the years ahead fortunes will be made by those holding large commitments in gold. But forget profits, fortunes will be saved (preserved) by those who hold quantities of gold. Richard Russell

-The vast majority of people do not understand what is happening. The printing of money is a counterfeiting racket run against them by their own government. To avoid being robbed, they must be in gold. This is why every organ of establishment opinion denounces gold and tries to scare you away from it. If you value your hard earned wealth, do not listen to them. Howard S. Katz-Read more here-http://www.321gold.com/editorials/katz/katz040510.html

-If sovereign bonds begin to break in the coming months, then Gold should benefit substantially. Obviously there are trillions sitting in bond markets and Gold is hardly a crowded market. Fundamentally, sovereign debt and currency problems are most bullish for Gold.

Meanwhile, the technical situation favours Gold. As stocks and commodities struggle at long-term resistance, Gold, once it completes its consolidation, will have virtually no resistance in front of it. It is a potentially explosive situation. Jordan Roy-Byrne-Read more here-http://www.321gold.com/editorials/roy_byrne/roy_byrne040210.html

-Yes, the Dow is within striking distance of 11,000, which sounds impressive until you realize we were also at this same milestone back on November 18, 1999. David Rosenberg-Gluskin/Sheff

-“Huge gains in short time periods like this are not necessarily bullish. In fact, the biggest declines typically generate the biggest reflexive rallies (with retests to follow) the duration of this largely uncorrected rally since March 9, 2009, is already in extreme territory and any extension from here should be watched for ending characteristics such as catching up of laggards and the development of sentiment extremes.” Bob Farrell

-So, no matter how we slice it, whether on a Shiller P/E basis, a one-year forward basis, a Tobin Q basis or a historical profit basis, the market is anywhere between 20% and 30% overvalued. Nothing says it can’t get more overvalued or that this overvalued state cannot linger for longer.

But reversion to the mean suggests that we will in fact, at some unknown point in the future, embark on the Farrell retest phase. Now wouldn’t it make more sense to buy on that opportunity than after a 75% virtually non-stop rally? This is not a time to be tempestuous and impatient. More than ever, it is a time to be exercise discipline and not to be tempted into chasing performance. David Rosenberg-Gluskin/Sheff

-The latest Investors Intelligence poll has the bulls at 48.9%, up from 48.3% a week ago, while the ranks of the bears have slipped further, to 18.9% from 19.1%. Bullish sentiment is now up in 7 of the past 8 weeks and bearish sentiment is down for the forth week in a row we are approaching extreme levels.

What is interesting is that the bulls have no clue why they are bullish except for the fact that they feel the need to play the momentum game. Sounds like 2007 all over again. This perception that the economy is into a strong and sustainable expansion is proving difficult to break few see just how fragile the backdrop truly is. Time to go back and re-read the Depression Diary of Benjamin Roth for a post-bubble reality check. David Rosenberg-Gluskin/Sheff

-Deflation on the prowl as Bernanke shuts down his printing press. The most audacious monetary experiment in modern history ended on April Fools’ Day. America must walk without crutches, on gangrenous legs. Read more here-http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7553511/Deflation-on-the-prowl-as-Bernanke-shuts-down-his-printing-press.html

-President Obama’s fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation’s economic output by 2020, the Congressional Budget Office reported. Read more here-http://www.washingtontimes.com/news/2010/mar/26/cbos-2020-vision-debt-will-rise-to-90-of-gdp/print/

-Perhaps among the many shoes to drop are under-funded State pension plans. This is a disaster in the making and could have huge effects on asset allocation this got very little play yesterday, but an independent analysis of California’s three large pension funds found over a $500 billion hidden shortfall.

This is multiples of the $55 billion amount that had been officially reported and according to the NYT, more than six times the value of the State’s outstanding bonds. The fiscal drag that will be associated with cleaning up this massive gap is going to represent as big a tourniquet around the economy as is the case with Greece right now as it grapples with is fiscal mess. David Rosenberg-Gluskin/Sheff

-California’s three biggest pension funds are as much as $500 billion short of meeting future retiree benefits, a Stanford University report said. The California Public Employees’ Retirement System, the largest U.S. public pension fund; the California State Teachers’ Retirement System, the second-biggest, and the University of California Retirement System are understating their future liabilities by using projected rates of return that don’t properly account for investment risk, the Stanford Institute for Economic Policy said today. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aL0e5WpaHgzQ

-Social Security to See Payout Exceed Pay-In This Year. The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security. This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office. Read more here-http://www.nytimes.com/2010/03/25/business/economy/25social.html?hp

-Stephen King: A lesson in public finances history. Governments cannot increase borrowings indefinitely. Someone has to take the pain. Read more here-http://www.independent.co.uk/news/business/comment/stephen-king/stephen-king-a-lesson-in-public-finances-history-1936632.html

-Mighty America’s 5 stages of rapid decline. Read more here-http://www.marketwatch.com/story/story/print?guid=05A0DDF8-7903-409D-B7BA-C9E2F1F54833

-U.S. Standard of Living Unsustainable Without Drastic Action, Former Top Govt. Accountant Says. Who will bail out America? A longtime budget hawk and currently CEO of the Peter G. Peterson Foundation, David Walker says America’s growing long-term debt is dangerously close to passing a “tipping point” that could trigger soaring interest rates and a plummeting dollar.

In a worst case scenario, that could trigger a “global depression,” he says, warning: “Nobody’s going to bail out America.” With the U.S. facing $50 trillion in unfunded liabilities and around $62 trillion in total long-term debt, what worries Walker most is what happens after the recession dissipates, as detailed here.

“I’m less concerned with the short-term deficits than I am the fact that we’re not doing anything about those structural deficits that people used to call long-term,” says Walker, former U.S. Comptroller General and head of the Government Accountability Office.

“But the long-term is here.” What’s ultimately at stake may be nothing short of Americans’ faith in government and our standard of living. “There is a way forward. There is hope,” Walker says. “But we need to actually make some tough choices.” Read and watch more here-http://finance.yahoo.com/tech-ticker/u.s.-standard-of-living-unsustainable-without-drastic-action-former-top-govt.-accountant-says-458329.html?tickers=^dji,^gspc,dia,spy,tlt,IXJ,xlv

-Britain ‘could lose cherished AAA credit within 12 months’. Investment chief at Pimco warns of disaster facing UK’s public finances and banking. Read more here-http://www.independent.co.uk/news/business/news/britain-could-lose-cherished-aaa-credit-within-12-months-1933967.html

-U.K.’s AAA Rating, Negative Outlook Affirmed by S&P.; Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aIK7dZgqWU.E

-We all know that this recovery is based on unsound fundamentals. Massive spending and excessive stimulus have been the primary driving factors boosting the economy, which grew at an annual rate of 5.9% in the last quarter of 2009, the largest quarterly gain in six years.

So there has been a high price to pay for this recovery. It has come about because an unthinkable amount of debt has been taken on. Consider this. In the U.S., it took nearly 200 years for debt to reach the $1 trillion level. Last year alone the debt was almost twice that and it’s now near $13 trillion. This happened in a relatively short period of time and all U.S. debt now amounts to about $250,000 per person. Aden Sisters

-Nearly half of US households escape fed income tax. Recession, new tax credits have nearly half of US households paying no federal income tax. Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it’s simply somebody else’s problem.

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That’s according to projections by the Tax Policy Center, a Washington research organization. Read more here-http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1

-Los Angeles will run out of cash on May 5, city Controller Wendy Greuel said today in a release in which she requested a $90 million transfer of reserve funds to pay bills. “The question I have been asked most often during the budget crisis is, ‘When will the city run out of money?” Greuel said in the e-mailed release. “Unfortunately, we finally have the answer.” Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=arnmmSbN5qLY

-Consumer credit in the U.S. declined in February more than anticipated, indicating Americans are reluctant to take on more debt without further improvement in the labor market. Borrowing fell $11.5 billion, the most in three months. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=atP8pvCXydOA&pos;=2

-Fed Officials Saw Recovery Curbed by Unemployment. Federal Reserve officials saw signs of a strengthening recovery that could be hobbled by high unemployment and tight credit, and some warned of raising rates too soon, according to minutes of their March meeting. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=abO08IU3FAsE&pos;=1

-Job Openings in U.S. Decrease to 2.72 Million. Job openings in the U.S. fell in February for the first time in three months, a sign employers will be slow to expand staff even as firings subside. Openings decreased by 131,000 to 2.72 million, the Labor Department said today in Washington. Fewer people were hired and the number of workers fired also decreased, the report also showed. Read more here-http://www.bloomberg.com/apps/news?pid=20601103&sid;=aXb8reBRtcJk

-Jobless rate may rise as many are drawn back to labor force. The increase in jobs highlighted in the nation’s most recent unemployment report carried the sound of economic promise, but Obama administration officials said Sunday that the public shouldn’t expect any dramatic improvement in the jobless rate, largely because of the effect of thousands of “discouraged” unemployed people who have resumed their search for work.

Some economists assert that the unemployment rate, which held steady at 9.7 percent in March, is likely to be driven higher as many more such people are lured into looking for work by signs of recovery. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2010/04/04/AR2010040402964_pf.html

-33 states out of money to fund jobless benefits. With unemployment still at a severe high, a majority of states have drained their jobless benefit funds, forcing them to borrow billions from the federal government to help out-of-work Americans.

A total of 33 states and the Virgin Islands have depleted their funds and borrowed more than $38.7 billion to provide a safety net, according to a report released Thursday by the National Employment Law Project. Four others are at the brink of insolvency. Read more here-http://money.cnn.com/2010/04/08/news/economy/state_funds_jobless_benefits/index.htm

-Basic grocery prices up 6.2%. Rising demand and reduced supply drove supermarket prices for 16 basic foods up 6.2% in the first quarter, led by gains in staples such as cheese, vegetable oil and eggs, the American Farm Bureau Federation said.

The average cost of the items for a typical consumer each week rose to $45.54 from $42.90 in the fourth quarter of 2009, the group said Monday, citing an informal survey. Costs fell 4.3% from a year earlier. Rising the most were sliced ham, apples, bacon and boneless chicken breasts. Latimes.com

-Commodities are set for “violent price spikes” as constraints on investment in new supplies and emerging market demand lead to shortages, according to Goldman Sachs Group Inc. Volatility in prices is driven by limits in the production and storage of commodities, rather than by financial investors, the bank said in an e-mailed report.

“Commodity markets have faced a growing physical imbalance over the last several years resulting from a lack of investment in underlying production, distribution and storage infrastructure,” Goldman analysts said in the report. ‘Not just rising price levels, but violent price spikes likely lie ahead for much of the commodity complex.” Read more here-http://www.businessweek.com/news/2010-03-31/goldman-says-commodities-may-witness-violent-price-spikes-.html

-Crude oil is poised to rise above $100 a barrel as soon as September after breaking out of a six- month trading range, according to a technical analysis by Lind Waldock, a division of MF Global Inc. in Chicago. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aKWGq9ZX9TDg

-Santelli: $4 Gas, $150 Oil Coming This Summer. CNBC CME floor reporter explains investors could flee equity markets for commodities, including energy and put a hurt on consumers. Read more here-http://www.businessandmedia.org/articles/2010/20100405165655.aspx

-Iran’s president said on Thursday he would not plead with opponents of Tehran’s nuclear program in order to avoid sanctions as Russia and the United States said new measures might be necessary. Read more here-http://www.reuters.com/article/idUSTRE6371EY20100408

-Iran missile will strike Tel Aviv if hit: Khamenei aide. Read more here-http://www.breitbart.com/article.php?id=CNG.870e381b1ca37a08fe027aaf4f7159fb.131&show;_article=1

-About 39.4 million Americans, the most ever, received food stamps in January, the government said. The number of recipients was up 22% from a year earlier, according to the U.S. Department of Agriculture. The total of Americans getting the subsidy has hit records for 14 consecutive months.

The national unemployment rate has hovered at 9.7% since January, according to the Bureau of Labor Statistics. Beginning Oct. 1, an average of 40.5 million people are expected to get food stamps each month this year, rising to 43.3 million in 2011, according to White House estimates. Latimes.com

-The 2010 Atlantic hurricane season will produce an above-average eight hurricanes, four of them major, posing a heightened threat to the U.S. coastline, the Colorado State University hurricane forecasting team predicted on Wednesday. Read more here-http://www.reuters.com/article/idUSTRE6362ZE20100407?feedType=RSS&feedName;=topNews

-Scientists stumped as bee population declines further. The decline in the US bee population, first observed in 2006, is continuing, a phenomenon that still baffles researchers and beekeepers. Data from the US Department of Agriculture show a 29 percent drop in beehives in 2009, following a 36 percent decline in 2008 and a 32 percent fall in 2007.

This affects not only honey production but around 15 billion dollars worth of crops that depend on bees for pollination. Read more here-http://www.breitbart.com/article.php?id=CNG.bd2664988112b33ebe7091069cfec28e.8b1&show;_article=1

WWW.RARECOLOREDDIAMONDS.COM

-The Rare Colored Diamonds Historical Value Tracker system is the perfect tool for investors to view the potential future value of a rare colored diamond based on the current market trend of a particular type of diamond. Track the potential future value of colored diamonds here-http://www.rarecoloreddiamonds.com/HistoricalPriceTrackingsystem.html

-Watch BTV interview of Harold Seigel on colored diamonds and his website http://www.rarecoloreddiamonds.com/. Watch video here-http://www.rarecoloreddiamonds.com/watchnow.html and

http://www.b-tv.com/features/watch-now.html?id=326

-Blue diamond sells for $6.4m at Hong Kong auction. Watch video here-http://news.bbc.co.uk/2/hi/asia-pacific/8608286.stm

-Fierce Bidding Pushes Blue Diamond Price Up to $6.4M. A number of high bidding prices and a biding war marked the results of Sotheby’s Hong Kong Magnificent Jewels and Jadeite sale on Wednesday, totaling $52.4 million.

The diamond Rivière necklace, the top selling item, sold for $6.7 million, followed by a 5.16-carat pear-shaped internally flawless fancy vivid blue diamond purchased for $6.4 million. The Rivière necklace is set with 50 D color internally flawless brilliant-cut diamonds ranging from 1.50 to 6.55 carats, with a total weight of 107.43 carats.

The star of the evening was the fancy vivid blue diamond, one of the 11 blue diamonds that were part of the De Beers Millennium Jewels Collection. Sotheby’s reported fierce bidding for the diamond that eventually sold to Moussaieff of London for a high $1.24 million per carat.

According to Quek Chin Yeow, head of Sotheby’s Hong Kong jewelry department, buyers and collectors in the current market are driven by the search for perfection and rarity, proven by the vigorous competition from bidders from across the world and included private collectors and traders. Read more here-http://www.idexonline.com/portal_FullNews.asp?id=33893

-Moussaieff Pays $6.4 Million for Blue Diamond at Hong Kong Sale. Moussaieff Jewellers Ltd.’s founder Alisa Moussaieff paid HK$49.9 million ($6.4 million) for a 5.16-carat blue diamond at a Hong Kong auction, beating Asian rivals with a price she says is less than the gem’s real worth.

Moussaieff, 80, says the fancy-vivid, internally flawless gem has a market value of about $1.5 million per carat and that she would have raised her bid had her rival persisted. A blue diamond of that size and caliber is so rare that it’s worth about $2 million a carat and high-street stores like Moussaieff could ask for $3 million, said Donald May, a Hong Kong-based jeweler who was also at the sale. A carat is a fifth of a gram.

“It’s a bargain and I got it at this price because everyone was asleep,” Moussaieff said in an interview. Her London-based boutique will change the gem’s mounting and offer the stone “to discerning clients, possibly in Asia,” she said. Asian buyers, especially the mainland Chinese, have been buying some of the most expensive gems at auction in recent years.

For Christie’s International, Sotheby’s top rival, Hong Kong has outsold Geneva and New York for two straight years as mainlanders park their growing wealth in rare art and gems. The auction record for a blue diamond was set by Hong Kong property tycoon Joseph Lau in May with his purchase of a 7.03- carat gem in Geneva for 10.5 million Swiss francs ($9.8 million).

Mainland Chinese bidding on the blue diamond was scarce because few understand that type of gem, said May. Among colored diamonds, they also prefer hues considered as lucky, such as red or pink, he said. “The Chinese are learning very fast and have a good eye for quality,” said Tamara Moussaieff, who flew in from Tel Aviv yesterday to help her mother, Alisa, decide on the purchase.

Alisa founded Moussaieff Jewellers with husband Sam half a century ago. The company supplies gems to royalty and stars, and owns rare stones such as the 5.11-carat “Moussaieff Red,” the world’s biggest natural fancy-red diamond. Read more here-http://www.bloomberg.com/apps/news?pid=20601088&sid;=aMkjazedryaY

-Sotheby’s Magnificent Jewels & Jadeite Colored Diamond Auction Results Hong Kong April 7 2010.

-LOT 1621-IMPORTANT AND RARE FANCY VIVID BLUE DIAMOND AND DIAMOND RING, “DE BEERS MILLENNIUM JEWEL 11.” 36,000,000-46,000,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 49,940,000 HKD-Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1621

-LOT 1618-PAIR OF FANCY INTENSE YELLOW DIAMOND AND DIAMOND PENDENT EARRINGS. 1,350,000-1,550,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 1,700,000 HKD-Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1618

-LOT 1616-FANCY VIVID YELLOW DIAMOND RING. 2,200,000-2,600,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 3,980,000 HKD.  Read more here- http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1616

-LOT 1599-DIAMOND AND FANCY INTENSE PURPLE-PINK DIAMOND PENDANT NECKLACE. 1,200,000-1,500,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 1,460,000 HKD.  Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1599

-LOT 1598-VERY LIGHT BLUE DIAMOND, FANCY LIGHT ORANGY PINK DIAMOND AND FANCY YELLOW-GREEN DIAMOND RING. 1,000,000-1,200,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 1,340,000 HKD.  Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1598

-LOT 1597-YELLOW DIAMOND AND DIAMOND BRACELET. 450,000-500,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 668,000 HKD.  Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1597 

-LOT 1589-FANCY LIGHT PINK DIAMOND AND DIAMOND RING. 580,000-680,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 980,000 HKD.  Read more here-  

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1589

-LOT 1560-DIAMOND AND PINK DIAMOND RING. 3,200,000-3,800,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 4,220,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1560

-LOT 1559-DIAMOND AND PINK DIAMOND PENDANT. 400,000-460,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 500,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1559

-LOT 1555-DIAMOND AND PINK DIAMOND RING. 350,000-400,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 437,500 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1555

-LOT 1552-FANCY YELLOW DIAMOND AND DIAMOND RING. 320,000-420,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 560,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1552

-LOT 1502-PAIR OF YELLOW DIAMOND AND DIAMOND EARRINGS. 120,000-170,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 175,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1502

-LOT 1476-FANCY VIVID YELLOW DIAMOND AND DIAMOND RING. 90,000-120,000 HKD-Lot Sold-Hammer Price with Buyer’s Premium: 131,250 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1476

-LOT 1456-FANCY INTENSE YELLOW DIAMOND RING. 3,500,000-4,200,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 4,940,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1456

-LOT 1449-PAIR OF DIAMOND AND FANCY INTENSE PURPLISH PINK DIAMOND PENDENT EARRINGS. 4,100,000-4,800,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium:  4,820,000 HKD.  Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1449

-LOT 1443-CONCH PEARL, PINK DIAMOND AND DIAMOND DEMI-PARURE. 3,300,000-3,800,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 4,820,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1443

-LOT 1442-FANCY LIGHT PINK DIAMOND AND DIAMOND RING. 1,800,000-2,300,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 3,140,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1442

-LOT 1441-FANCY VIVID YELLOW DIAMOND AND DIAMOND PENDANT. 3,800,000-4,500,000 HKD. Lot Sold.  Hammer Price with Buyer’s Premium: 5,060,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1441

-LOT 1440-ALEXANDRITE, FANCY INTENSE PURPLISH PINK DIAMOND AND DIAMOND RING. 1,900,000-2,200,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium:  4,340,000 HKD.  Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1440

-LOT 1437-FANCY LIGHT BLUISH GREEN DIAMOND AND PINK DIAMOND RING. 950,000-1,200,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 1,160,000 HKD.  Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1437

-LOT 1435-COLOURED DIAMOND AND DIAMOND PENDANT NECKLACE. 550,000-650,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 740,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1435

-LOT 1432-FANCY YELLOW DIAMOND AND YELLOW DIAMOND NECKLACE AND PAIR OF MATCHING PENDENT EARRINGS. 1,400,000-1,600,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 1,700,000 HKD.  Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1432

-LOT 1425-FANCY BROWNISH YELLOW DIAMOND AND DIAMOND ‘RIBBON’ RING. 70,000-100,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 87,500 HKD.  Read more here- 

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1425

-LOT 1405-PAIR OF YELLOW DIAMOND PENDENT EARRINGS. 320,000-380,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 387,500 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1405

-LOT 1402-FANCY INTENSE GREENISH YELLOW DIAMOND AND YELLOW DIAMOND ‘CROSS’ PENDANT. 380,000-450,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 475,000 HKD.  Read more here-http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1402

-LOT 1388-YELLOW DIAMOND AND DIAMOND RING. 400,000-500,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 560,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1388

-LOT 1356-PINK DIAMOND AND DIAMOND ‘CROSS’ PENDANT. 100,000-130,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 125,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1356

-LOT 1353-PINK DIAMOND HAIR BAND. 70,000-90,000 HKD. Lot Sold-Hammer Price with Buyer’s Premium: 125,000 HKD.  Read more here-

http://www.sothebys.com/app/live/lot/LotDetail.jsp?sale_number=HK0322&live;_lot_id=1356

-Sotheby’s to Auction Rare Red Diamond in Sydney. Sotheby’s Australia will hold its first jewellery sale on April 12, 2010 in Sydney. The company will auction a collection comprised of more than 250 lots of antique and contemporary jewelry that has a total presales estimate ranging between $3.5 million and $4.7 million.

The highlight of this sale will be a fancy purplish-red Argyle diamond ring with a presale estimate range of $642,000 to $916,000. Sotheby’s described this rare red diamond as the first of its kind to be offered for public auction in Australia.

The diamond comes accompanied by a letter from Argyle Diamonds attesting to the stone’s rarity. The oval diamond weighs 0.82 of a carat and is claw-et between a pair of fancy blue diamonds in a round, brilliant-cut diamond surrounded and mounted in platinum. Read more here-http://www.diamonds.net/news/NewsItem.aspx?ArticleID=30415 and http://www.idexonline.com/portal_FullNews.asp?id=33876

MATT TAIBBI-LOOTING MAIN STREET

-How the nation’s biggest banks are ripping off American cities with the same predatory deals that brought down Greece. If you want to know what life in the Third World is like, just ask Lisa Pack, an administrative assistant who works in the roads and transportation department in Jefferson County, Alabama.

Pack got rudely introduced to life in post-crisis America last August, when word came down that she and 1,000 of her fellow public employees would have to take a little unpaid vacation for a while.

The county, it turned out, was more than $5 billion in debt meaning that courthouses, jails and sheriff’s precincts had to be closed so that Wall Street banks could be paid.

As public services in and around Birmingham were stripped to the bone, Pack struggled to support her family on a weekly unemployment check of $260. Nearly a fourth of that went to pay for her health insurance, which the county no longer covered. She also fielded calls from laid-off co-workers who had it even tougher. “I’d be on the phone sometimes until two in the morning,” she says.

“I had to talk more than one person out of suicide. For some of the men supporting families, it was so hard foreclosure, bankruptcy. I’d go to bed at night, and I’d be in tears.” Homes stood empty, businesses were boarded up, and parts of already-blighted Birmingham began to take on the feel of a ghost town.

There were also a few bills that were unique to the area like the $64 sewer bill that Pack and her family paid each month. “Yeah, it went up about 400 percent just over the past few years,” she says. The sewer bill, in fact, is what cost Pack and her co-workers their jobs.

In 1996, the average monthly sewer bill for a family of four in Birmingham was only $14.71 but that was before the county decided to build an elaborate new sewer system with the help of out-of-state financial wizards with names like Bear Stearns, Lehman Brothers, Goldman Sachs and JP Morgan Chase. The result was a monstrous pile of borrowed money that the county used to build, in essence, the world’s grandest toilet “the Taj Mahal of sewer-treatment plants” is how one county worker put it.

What happened here in Jefferson County would turn out to be the perfect metaphor for the peculiar alchemy of modern oligarchical capitalism: A mob of corrupt local officials and morally absent financiers got together to build a giant device that converted human shit into billions of dollars of profit for Wall Street and misery for people like Lisa Pack. Read more here-http://www.rollingstone.com/politics/story/32906678/looting_main_street/print

REAL ESTATE

-Prepare to Pay 15% Less for New U.S. Homes. New-home prices may have to tumble 15 percent in the U.S. before sales start to rebound, according to Michael Panzner, an author and financial blogger. Read more and view chart here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=anKm.6VTGND4

-Foreclosures Are Rising. The new foreclosure wave is here. Yes, banks are ramping up loan modifications and ramping up short sales and ramping up deeds in lieu of foreclosure, but the plain fact is that as the systems are oiled, the loans are moving through faster, and the pig in the python is showing its face.

We won’t get the numbers until next week, but sources tell me they will likely be a new monthly record. Tens of thousands of loans have been hitting the “notice of trustee sale” bin, and that means they are coming to foreclosure.

The actual foreclosure numbers have been down recently because of all the modification efforts, but as we see more loans not qualifying for modifications and more loans defaulting on modifications, the foreclosure numbers rise. Read more here-http://www.cnbc.com/id/36195838/?source=patrick.net

-Predictions have flooded the Internet in China this week about the country’s runaway property market collapsing in 2011. Much of the chatter voiced little concern about the possible severe consequences, instead expressed hope for the crash to come.

Coming at a time when complaints about mounting housing prices are on the rise, the online debate has drawn enormous attention from ordinary residents, industry insiders, experts and received substantive media coverage.

Speculation started after a comparison was made between China’s property market and that of Japan. In 1991, Japan’s property bubble burst. Following the Japanese yen’s appreciation in 1985, large amounts of capital flowed into the country’s real estate, inflating prices artificially which eventually led to a burst.

Two decades later, some say the same is happening in China, both in sequence and pace: the yuan appreciated in 2005, capital flowed to property markets in 2006, resulting in soaring housing prices in 2007, and now the burst is imminent. Read more here-http://www.chinadaily.com.cn/china/2010-04/03/content_9684907.htm

-UK house prices face prolonged bear market. The housing market may now be trapped in a long-term bear market and may not bounce back to the peaks it reached in 2007 for generations, a leading economic consultancy has warned. Read more here-http://www.telegraph.co.uk/finance/economics/houseprices/7557222/UK-house-prices-face-prolonged-bear-market.html

-Office vacancy rates are now at their highest level in 16 years, according to a report published Monday, as elevated unemployment levels across the country continue to temper the demand for space. Roughly 700 million square feet, or 17.2%, of the more than 4 billion of available office space nationwide was unoccupied as of the end of March, according to the real estate research firm Reis. The last time office vacancies were this high was in 1994. Read more here-http://money.cnn.com/2010/04/05/news/companies/office_vacancies/index.htm

-U.S. Apartment Rents Decline as Vacancies at Record, Reis Says. U.S. apartment rents dropped in the first quarter and the vacancy rate remained at a record as unemployment near a 26-year high limited tenant demand.

Actual rents paid by tenants, known as effective rents, declined 1.5 percent from a year earlier, Reis Inc. said in a report today. Asking rents fell 1.6 percent, according to the New York-based property research firm. Vacancies were unchanged at 8 percent, the highest level since 1980, when Reis began tracking the number, said Victor Calanog, director of research.

U.S. rental demand has slumped as employers cut 8.4 million jobs since the start of the recession in December 2007. The bigger drop in asking rents than effective rents in the first quarter signals that landlords are pricing their properties lower at the outset and minimizing concessions, Calanog said.

“Landlords are saying: ‘Even before we talk about the free month off, and even before we talk about the free gym, we want to lower the asking rents to get you through the door,’” he said in a telephone interview. Read more here-http://www.bloomberg.com/apps/news?pid=20603037&sid;=acQDX2fF_AHg

© 2010, Worldwide Precious Metals.
www.wwpmc.com

The Goldbugg Report – April 13, 2010
Posted by Worldwide Precious Metals on Tuesday, April 13, 2010

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