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Global Economy Bursting?

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Trust in Gold Not Bernanke as U.S. States Promote Bullion

http://www.bloomberg.com/news/2013-...t-bernanke-as-u-s-states-promote-bullion.html

Distrust of the Federal Reserve and concern that U.S. dollars may become worthless are fueling a push in more than a dozen states to recognize gold and silver coins as legal tender.

Arizona is poised to follow Utah, which authorized bullion for currency in 2011. Similar bills are advancing in Kansas, South Carolina and other states.
 
Sinclair: “The entire world is on fire and most people don’t even realize it. The world is literally ablaze with the creation of money, and there will be hell to pay for what is taking place right now. The monetary policy of Japan has now spread out from Japan to Europe and will eventually infect the entire globe.

With the printing presses wide open what we are really witnessing is monetization of debt.

This reckless behavior is obviously being caused by the terror of some disaster that has yet to be disclosed. I guarantee you whatever it is has to do with the legacy over-the-counter derivatives, which total in the one quadrillion plus dollar range.

This is a mountain of paper, floating in space, and it has no financing. This is why you are seeing an explosion of the printing presses. God help us because I can assure you that another cataclysm is headed our way."

http://kingworldnews.com/kingworldn..._Now_On_Fire_&_There_Will_Be_Hell_To_Pay.html
 
Japan at War

http://www.zerohedge.com/contributed/2013-04-09/japan-war

I see the big losers as Korea, China and the rest of SE Asia. America is going to get hit fairly hard as both tourism and trade react to the cheaper currency. Europe is so screwed up today the consequences of the Yen devaluation will be masked, but the German car exporters will get beat to pieces as the exchange rate adjustment flows through on car prices. Places like Brazil will feel the consequences as well, liquidity out of Japan will leak into local capital markets, it will be the source of unwanted inflation.

In my years of watching FX, I've never seen a soft landing from a devaluation. I don't think Japan in 2013 will be any different. Japan Inc. may be happy to see the 100/dollar exchange rate, but I doubt that the Bank of Japan can achieve equilibrium at this level. The risk is that the USDJPY overshoots (they always do). There is a very real possibility that things get out of control and a move to USDJPY 120 is in the cards. I see a near zero chance that the BOJ is going to step into the currency market and do reverse intervention to contain Yen the weakness. If enough speculators believe as I do, then we are in for a hell of a ride in the coming months.

Japan is desperately seeking to export its deflation - I think they will succeed. But when the deflationary consequences hit Japan's trading partners, a global slowdown will be the result. Japan's trash is being passed around the globe. I wonder how long the rest of the world is going to stand for it. Give it six months (or less) for the damage to be felt in the USA, and then the backlash will start. That, or China does something ugly. Either way, those who are singing praise for Japan and it's effort to undermine its currency are going to be singing a different tune.
 
Here's how to create high-speed rail systems. Reduce the speed limits to a maximum of 25 mph. Then, viola! We have high-speed rail systems.

All kidding aside, except for the northeast and the LA corridor, rail travel is a losing proposition. We have a very expensive light-rail here that routinely runs with very few or no passengers. Air travel and car travel is cheaper, easier, and quicker. High-speed rail works well in Japan, because of the nature of the country. Long, narrow, small. In Texas, we could have high-speed rail between Dallas and Austin or Houston. But you still have to pay a cab to get around, etc. I can drive to Austin in about 3 hours, less than a tank of gas, and have my car there. Just not effective.
 
Light rail in Minneapolis got shut down by freezing rain. Busses had to be called in to transport the stuck & waiting passengers. Too bad it wasn't diesel-electric powered, or never built in the first place. The electric overhead track was coated with ice.
 
Brown wants China aboard California's high-speed rail project

http://www.latimes.com/news/local/la-me-brown-china-train-20130412,0,1126817.story

Gov. Jerry Brown's trade mission to China this week is intersecting with one of the most controversial issues of his governorship: California's $68-billion bullet train.

The governor has staked part of his legacy on the rail network, a centerpiece of his vision for California. He is hoping that China, which is enjoying an economic boom and spent $77.6 billion on overseas investments last year, according to official figures, will pump some of its cash into the troubled project.

The Chinese interest in California's project is a welcome boost for Brown. Although state voters approved $10 billion in bonds for a high-speed railway in 2008, they have soured on it as cost estimates have ballooned by tens of billions of dollars. The governor, who has vowed repeatedly to see the train system built, needs at least an additional $55 billion to make it happen.
 
The Insult: California biofuel company considers move to Colorado

http://www.bizjournals.com/denver/news/2013/04/11/california-company-considers-move-to.html

Cool Planet Energy Systems, a California biofuel company, may relocate its headquarters to the Denver area and open a manufacturing plant here — and that could create as many as 393 new jobs within three years.

The headquarters jobs it would bring to Colorado would pay an average executive salary of about $170,000 a year — roughly three times the average pay of the Denver or Greenwood Village areas. And the manufacturing jobs would have an average annual wage of $57,929.68, 137 percent of the average Adams County wage.

Cool Planet is a 3-year-old startup in the Los Angeles suburb of Camarillo that’s developed a patented process to turn biomass into gasoline. The process it uses is carbon-neutral, meaning that the more of the Cool Planet fuel an engine burns, the more carbon dioxide is taken out of the atmosphere, said Michele Bremer, director of human resources for the company.

Though the company hasn’t begun selling products or making profits, it expects to begin generating revenue in a couple of months, Bremer said. From there, it plans to open about 400 small facilities across the country in order to produce about 10 million gallons of fuel by 2020, she said.

Cool Planet’s financial backers include major fuel companies such as BP, ConocoPhillips and General Electric Co., Bremer said. Google also has made a major investment in the company.
 
[url]http://blogs.reuters.com/macroscope/2013/03/21/is-slovenia-the-next-shoe-to-drop/[/URL]

Is Slovenia the next EU courntry to face a crisis? And then it is on to Latvia and the "BELLS" countries that tied their currency to the Euro. Latvia bailout was "successful" but according to some, the growing economy masks a serious need to revalue the currency - which might trigger another bailout...

Is Europe going to have to face one crisis after another? As one analyst remarked..." If they cannot handle the small crises (Cypriot and Slovenian) then how are they going to handle the big ones if they come (Spanish and Italian.)
 
The Stock Market Feels Like The Housing Market Of 2006

http://www.zerohedge.com/news/2013-04-10/sam-zell-stock-market-feels-housing-market-2006

Instead of the endless procession of "different this time", "buy-the-dip", "money-on-the-sidelines" asset-gathering, Muppet-fleecers that CNBC so typically trots out, Sam Zell graced them with his presence and the truth was allowed a voice for a few minutes. Joined by David Rosenberg, who clarifies the insanity that engulfs US equities, explaining in wonderment that it is "not surprising the market rises even in the face of bad ISMs, worse jobs, and worst NFIB data, because Japan and the US are embarking on a gargantuan quantitative easing that is the lynchpin behind the stock market." It is not about being bullish, or bearish, or agnostic, it is understanding the driver of this market - and that is not the economy, not earnings, "it is the mother of all liquidity-driven rallies."

"This is a very treacherous market," Zell explains - thanks to the giant tsunami of liquidity, "the problems of 2007 haven't been dealt with," and given the poor macro data and earnings, "we are suffering through another irrational exuberance," leaving the entire CNBC audience speechless when he concludes, "the stock market feels like the housing market of 2006."
 
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