Banking Problems and Canaries

Banking Problems: “Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman” by Mark Deen and David Tweed is the 9/13/09 article at Bloomberg.com (via Drudge Report on 9/13/09). It speaks to a banking system that was in bad shape and is now getting worse. Here’s some it:

• “Joseph Stiglitz, the Nobel Prize-winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.”
• “In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview today in Paris. “The problems are worse than they were in 2007 before the crisis.”

Canaries: At LewRockwell.com on Saturday, 9/12/09, Peter Schiff’s article “Canary in a Coal Mine”  (via prisonplanet.com) discusses why gold appears so appealing as an investment and why many are accumulating it. Here are a couple of the articles key points:

• “When individuals choose to accumulate savings in the form of gold rather than interest-bearing paper deposits in government insured accounts there is only one reason for doing so, they fear that the interest will not be enough to compensate for expected loss of purchasing power through inflation. This fear reflects both current inflation and the expectation of future inflation. While there are some who buy gold to speculate on its appreciation, the underlying factor that drives the appreciation in the first place will always be inflation. If governments were not creating inflation, there would be little investment advantage to owning gold.’
• “The bottom line is that gold is continuing it’s long-term bull-run, and those who dismiss the message behind its rise do so at their own financial peril. When it comes to inflation, gold is the canary in the coal mine. Just as unseen toxins kill the canary before the miners succumb to the fumes, a spike in gold is a harbinger of reckless monetary devaluation. Our leading commentators think that since they can’t see or smell the gas, all those canaries (gold prices, commodity prices) must be dying of natural causes. Good luck to them when the toxins flood the mine.”

S & P’s (Symptoms & Peripherals): It comes to Mike Folkerth – King of Simple again (mikefolkerth.com) to bring a lot of information down to a clear, accurate and usable/manageable size. He does it this time in his 9/11/09 post “Majoring in the Minors:”

Here are some of the distillations:

• “… focus on solving the core problem rather that dwelling of the symptoms and peripherals.”
• “The United States reached peak oil production in 1970. Today we produce some 40% less oil than in 1970 and utilize some 40% more. In some months we are 75% dependent on foreign nations to provide us with our life sustaining oil.“
• “Thirty nine years after peak U.S. oil, our plan is to grow the economy, utilize more oil, sell more cars, reduce green house gases, export more jobs to foreign nations, grow our population by importing millions of poor non-English speaking people, increase per-capita production resulting in greater resource use and increased unemployment, increase deficit spending and the National Debt, engage in foreign wars, grow the government, and get free health care.”

Hope your plans for a winter garden are well along !

Until next time; keep your eyes on the horizon as the weathers changing fast.