Benefit Spending, Laughing At Tim, Chinese Gold, and Hyperinflation Bets

Benefit Spending, Laughing At Tim, Chinese Gold, and Hyperinflation Bets

Benefit Spending: “Benefit Spending hits $2 Trillion, Highest Percent Since 1929; One Dollar Out Of Every Six From Vouchers” is the title of Mish Shedlock’s 6/4/09 post at his web site  globaleconomicanalysis.blogspot.com.  Here are some highlights;

“As economic conditions deteriorate and unemployment continues to soar (now @ 9.4%/PH) one in nine Americans are now on food stamps (Note: In 20 states as many as one in eight or 12 1/2%/PH).  Moreover, a staggering one of every six dollars of American’s income is coming in the form of a federal or state check or voucher.”

Laughing At Tim: “Why The Chinese Laughed At Geithner” says the Paul Craig Roberts post headline at prisonplanet.com today (Paul Craig Roberts is an economist-PH D from UVA, Assistant Sec. of Treasury under Ronald Regan, and editor/columnist for WSJ, Business Week, et al). Here’s a small piece from Mr. Roberts article:

“Treasury Secretary Geithner … told China that he stood for a ‘strong dollar’ but that China should let its currency appreciate relative to the dollar, which, of course, would mean a weaker dollar. He simultaneously told China that their investments in US Treasury bonds were safe. The Chinese university students, being economically literate, laughed at Geithner.”

Chinese Gold: “Chinese Begin Buying Up Gold” is the title of the Julie Crenshaw post at money newsmax.com on 6/4/09. Here are a couple of her key points:

• “Individual Chinese investors are now rushing to hoard the precious yellow metal, hoping it will retain value if the dollar collapses.”
• ‘Analysts say they expect the Chinese government would continue to raise its gold holdings as the yuan becomes increasingly internationalized.”
• “If I look at 10 years from now, I do believe that the purchasing power of the dollar is going to be substantially less,” portfolio manager Axel Merk told The U.K. Guardian.”

Hyperinflation bets: “Black Swan Fund Bets on Hyperinflation” is Dan Weil’s headline in his post for newsmax.com on 6/4/09. His points contain these highlights:

• “Univera Investments, a hedge fund manager known for it ties to contrarian investor Nassim Taleb, is opening a fund to benefit from a surge in inflation, The Wall street Journal reports.
• The fund is betting that massive fiscal and monetary stimulus around the globe will lead to huge price increases.”
• “The fund will also bet on losses for treasury bonds.”
• “Warren Buffett shares Taleb’s concern about inflation.
• “A country that continuously expands its debt as a percentage of GDP and raises much of its money abroad to finance that, at some point, it’s going to inflate its way out of the burden of that debt,” Buffett told CNBC.”

If the views presented in the foregoing articles are accurate, then the average American family will find it more difficult to adequately prepare for hard times in the future/as time passes.  This then is a wake-up call to prepare now; as much as you can, as rapidly as you can.

Until next time, keep your eyes on the horizon as the weather’s changing fast.