Taco Bell: One taco worth more than gold

Infowars.com
March 14, 2011

Media analyst, author and activist Mark Dice pulled through a Taco Bell, attempting to pay for one $.99 taco with an American Eagle 1 ounce gold coin. The employee refused, preferring payment with two Federal Reserve notes instead, commenting that the coin was ‘for collecting.’ The spot price for 1 oz. of gold is at $1428 today, so the worker passed up an absolute steal (depending on policy, she could have paid her company for the taco herself and netted the coin).

Mark Dice was trying to make a point about our cultural ignorance of real money (but of course he was probably relieved not to lose his gold ounce.



The Taco Bell employee is not alone. Back in 2009, when a gold coin was worth about $1100, Mark Dice couldn’t sell the coin to people on the street for $50, $5 or even give it away! In fact, many of the people he spoke with looked suspiciously at the Canadian coin, seemingly uncomfortable even looking at it.

Ron Paul: The Dollar Will be Rejected

GAO Proposes Eliminating One Dollar Bill

Seth Fiegerman
Yahoo Finance
March 9, 2011

Washington has come down with a case of fiscal fever as the Obama administration proposes everything from spending freezes on domestic programs to selling off unused government property to bring the budget back in line. Now, one study argues that the government can save billions of dollars simply by making a change to the currency itself.

Earlier this month, the U.S. Government Accountability Office issued a formal proposal to the Treasury and Federal Reserve noting that if it eliminated the $1 bill and replaced it with the $1 coin, the country could save roughly $5.5 billion during the next 30 years. The reason, according to the agency’s report, is that dollar bills have a shorter lifespan than dollar coins because they wear much faster, which in turn requires the government to spend more to print new bills.

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Oil Price Shock; You Ain’t Seen Nothing Yet

Jeremy Warner
London Telegraph
Friday, March 4, 2011

The most common cause of a spiking oil price is supply shock. We may be seeing just such a phenonenon right now with the effective shut down of Libyan oil. But sometimes it’s excessive demand that does the damage.

Forget the present turbulence, which may or may not be temporary. You don’t have to look far into the future, perhaps as little as a year to 18 months, to see that a major demand challenge is looming which even assuming no further disruption to existing production, will challenge the present supply base to breaking point.

As it is, it’s fair to assume the world is closer to full capacity than producers care to admit. Rewind to the last oil price shock in the summer of 2008, and Saudi Arabia, pumping out oil at the rate of around 9.5 million barrels a day, was having to draw on inventories to meet demand. It’s therefore reasonable to assume that 9.5 million bpd then represented maximum capacity.

Since then, the Saudis have brought a further two fields on stream with a capacity of around 2 million bpd, bringing total capacity up to some 11.5 million bpd. But there is generally reckoned to be an attrition rate of around 6pc per annum on existing fields, taking us back to square one in terms of maximum daily output. This is perilously close to what the Saudis are already producing, and makes the assumed buffer of Saudi spare capacity considerably smaller than the Saudis claim. There’s not much slack anywhere else either.

Now look at growth in demand, virtually all of which is coming from China and other emerging markets. Chinese demand at around 10 million bpd annually is already around half that of the world’s biggest oil consumer, the US. But unlike the US, where demand is in gentle decline, in China it’s rising like a rocket.

Last year Chinese demand rose by close to 1 million bpd. It’ll probably be a bit lower this year, but not much. More cars are now being bought in China than the US, and they’ve got to run on something.

Full story here.

Why the Dollar’s Reign Is Near an End

BARRY EICHENGREEN
The Wall Street Journal
March 3, 2011

The single most astonishing fact about foreign exchange is not the high volume of transactions, as incredible as that growth has been. Nor is it the volatility of currency rates, as wild as the markets are these days.

Instead, it’s the extent to which the market remains dollar-centric.

Consider this: When a South Korean wine wholesaler wants to import Chilean cabernet, the Korean importer buys U.S. dollars, not pesos, with which to pay the Chilean exporter. Indeed, the dollar is virtually the exclusive vehicle for foreign-exchange transactions between Chile and Korea, despite the fact that less than 20% of the merchandise trade of both countries is with the U.S.

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Gas Prices Jump 4 Cents Overnight

Ben Rooney
CNN Money
Thursday, March 3, 2011

NEW YORK (CNNMoney) — Gas prices jumped 4 cents overnight, with the average American driver now paying more than $3.40 a gallon.

The national average price for a gallon of regular gasoline rose to $3.427 on Thursday, according to a daily survey by motorist group AAA. That’s up from $3.387 a gallon on Wednesday.

Gas prices have not averaged more than $3.40 a gallon since October of 2008. The record high was over $4.11 a gallon in July 2008.

The highest gas prices were in Hawaii, where drivers pay an average of $3.82 a gallon.

Full story here.

China “Attacks The Dollar” – Moves To Further Cement Renminbi Reserve Currency Status

Tyler Durden
Zero Hedge
March 3, 2011

In a surprising turn of events, today’s biggest piece of news received a mere two paragraph blurb on Reuters, and was thoroughly ignored by the broader media. An announcement appeared shortly after midnight on the website of the People’s Bank of China.

The statement, google translated as “Pragmatic and pioneering spirit to promote cross-border renminbi business cum on monitoring and analysis to a new level” is presented below:



Reuters provides a simple translation and summary of the announcement:

“China hopes to allow all exporters and importers to settle their cross-border trades in the yuan by this year, the central bank said on Wednesday, as part of plans to grow the currency’s international role. In a statement on its website www.pbc.gov.cn, the central bank said it would respond to overseas demand for the yuan to be used as a reserve currency. It added it would also allow the yuan to flow back into China more easily.”

To all those who claim that China is perfectly happy with the status quo, in which it is willing to peg the Renmibni to the Dollar in perpetuity, this may come as a rather unpleasant surprise, as it indicates that suddenly China is far more vocal about its intention to convert its currency to reserve status, and in the process make the dollar even more insignificant.

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IMF Austerity Measures Lead to Violent Riots in Greece

AFP
February 24, 2011

Police fired tear gas near the Greek Parliament yesterday as clashes broke out with stone-throwing protesters during a demonstration against austerity measures, an AFP reporter said.



The confrontation occurred near the finance ministry with police seeking to block protesters from approaching the building as thousands marched in Athens and other major cities in this year’s first general strike against wage and pension cuts.

At least 36,000 people according to police demonstrated in Athens, Thessaloniki and the port of Piraeus to reject economic policies dictated by Greece’s narrow bankruptcy rescue by the EU and the IMF last year.

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As The Obamas And The Ultra-Wealthy Live The High Life Most Americans Are Going Through Economic Hell

The Economic Collapse
Feb 22, 2011

Barack Obama recently made the following statement to American families that are struggling to survive in this economy: “If you’re a family trying to cut back, you might skip going out to dinner, or you might put off a vacation.” A few days after making that statement Obama sent his wife and children off on yet another vacation, this time to a luxury ski hotel in Vail, Colorado.  But the Obamas are not the only ones enjoying the high life.  Wealthy corporate executives and greedy Wall Street fatcats insist that profit margins are too tight to hire more American workers, and yet sales of luxury cars, private jets and vacation homes are soaring.  Meanwhile, most American families are going through economic hell right now.  In 2010, more Americans than ever before were living below the poverty line.  Over 4 million Americans have been unemployed for more than a year, and over 5 million Americans are at least two months behind on their mortgage payments.  As the Obamas and wealthy corporate executives jet off to fancy ski resorts, half of all American workers are earning $505 or lessper week and 55 percent of American families are living paycheck to paycheck.  Something is very wrong with this picture.

So is there anything wrong with working hard and enjoying the fruits of success?  Of course not, as long as it was done honestly and not on the backs of the American taxpayers.  But the truth is that many of the corporate executives that are enjoying luxury vacations right now would not even have companies to run if the American taxpayers had not stepped in and bailed them out during the financial crisis.  Thanks to the U.S. government and the Federal Reserve, Wall Street bankers and top corporate executives are once again enjoying bonuses that most of us would consider obscene.

Meanwhile, most of the rest of the country is suffering very deeply.
Over the past several decades, the biggest financial institutions and the biggest corporations have worked really hard to “fix” the rules of the game in their favor.  The truth is that our economy is no longer a “free market” capitalist system.  Rather, what we have now is more accurately described as “corporatism” or “neo-feudalism”.  The big corporations dominate almost everything, and whatever they don’t dominate the government does.

One of the key features of a “corporatist” system is that it tends to funnel all the wealth to the very top.

Back in 1976, the top 1 percent of earners in the United States took in 8.9 percent of all income.  By 2007, that number had risen to 23.5 percent.
Ouch.

There are two different Americas today.  There is the America of the gated communities, the private planes and the good life, and there is the America of declining wages, thrift stores and rising desperation.

What is saddest of all is that the most vulnerable people in society often suffer the most from all of this.

According to one recent study, approximately 21 percent of all children in the United States were living below the poverty line in 2010.

Do you think that the Obamas are thinking about any of this while they are enjoying their stay at a luxury ski hotel in Vail, Colorado?

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Making Fortune on Poverty: JP Morgan's Big Food Stamp Business