Bill Bonner (The Daily Reckoning, UK):

Leading economists have a one-stop solution for just about everything: stimulate consumer spending.

When the price of oil hit $150 a barrel, the first major alarm sounded. Something was wrong. Now we have a clearer idea of what it was.

To make a long story short, leading economists have a one-stop solution for just about everything: stimulate consumer spending. But $150 oil warned us: continue down that road and you will run out of gas. There isn’t enough oil in the world to allow US-style consumption for everyone.

Two weeks ago, Dubai gave us another wake-up call. Thought to be risk- free, since it was implicitly backed by all the oil in the Middle East, Dubai World nevertheless stopped paying its debts. And last week yet another bell banged our eyes open. Greece announced first that it would not try to reduce its deficits… then, that it would. Hearing the news, the financial world rolled over and went back to sleep. But The Wall Street Journal offered a hint of trouble to come: “Markets force Greek promise to slash deficit,” said its page one headline.

If markets could force the Greeks to trim their deficit – about 13% of GDP… not far from the US level – could they not force Britain and America too? Coming right to the point, the fixers face not just one crisis, but many. They have a growth model that no longer works. They have aging populations and social welfare obligations that can’t be met. They have limits on available resources, including the most basic ones – land, water, and energy. They have a money system headed for a crack-up, and an economic theory that was only effective when it wasn’t necessary. Now that it is needed, the Keynesian fix is useless. If a recovery depends on borrowed money, what do you do when lenders won’t give you any?

But let us backtrack to a smaller insight. Then we will stretch for a bigger one. Americans are supposed to be insatiable shoppers. For at least three decades, the world counted on it. It was the growth model for almost all the Asian manufacturing economies… and for resource producers everywhere. But as we approach the biggest shopping season of the year, a survey of consumers signals an earthquake. Americans plan to spend an average of 15% less during this holiday season than the year before. Only 35% say they will take advantage of post-Christmas sales, traditionally when the stores unload unwanted inventory. They seem to be satiable after all.

Push come to shove, Americans react like everyone else. Now, they are being shoved into a new world, very different from the one they have come to know. In 1973, the American working stiff went into a decline. His weekly earnings, in real terms, went down for the next 36 years. The typical worker earned the equivalent of $325 a week in 1973… adjusted to constant 1982 dollars. By US official accounting he was down to $275 a week in 2009. Unofficial estimates put the loss as high as two-thirds of his purchasing power.

Yet, his spending increased anyway. How? He squeezed the rest of the world. The US trade gap began to go seriously negative in 1992. By 2006-2007, foreigners were shipping to America nearly $900 billion more per year in goods and services than they received in exchange. This gave the typical American a standard of living few people could afford; too bad, he wasn’t one of them.

Now he’s up against billions of Patels and Hus. They work for less. They save more. They want more stuff too. And they’re suspicious of the dollar.

Their economies are growing faster…

Click here for the rest of Mr. Bonner’s commentary at The Daily Reckoning, UK Edition.

Baltimore — (TFN): We all have a friend like him. For me it’s a guy named Greg. He has some great ideas and his entrepreneurial spirit runs deep, but for some reason, his plans never seem to make it to fruition. Somewhere from the drawing board to the production line, he runs into a debilitating snag.

Most of the time, it’s money.

He’s got great ideas but nary a penny to his name. That’s why I told him to ring up old Uncle Sam… collect. Washington’s handing out all sorts of dollars these days. He might as well put his hand under the waterfall.

According to the Wall Street Journal, the Department of Energy is handing out some $40 billion just to the so-called “clean energy” sector. Greg needs to paint a tree on his latest invention, call it organic and break into 21st century politics, er, business.

From here on out, it’s not what you know, it’s who you know. With Obama acting as economic maestro-in-chief, it’s a whole new world for us business folks.

Which brings me to a sore subject. You see, I recently told Hot Stock Confidential members to buy shares of a tiny little up-and-comer named Raser Technologies (NYSE:RZ).

Now, before I go any further, I don’t want to hear any complaining that I only talk about my winning plays in Notes, because this one was a loser. A big fat flop. Right now, we’re down 45%. It was one, if not the worst recommendations I made this year.

But I’m not selling. Even though I got plenty of heat from internal and external “forces,” I am still not ready to suck it in and lock in the loss.

I’m not holding out because the company’s got a breakthrough product or is about to get bought out. I’m holding on because Uncle Sam is ready to cut Raser a big ole’ check.

When I initially recommended the company in late August, headlines were abuzz with “green” spending. But then, just as suddenly as it started, it stopped. Congress switched gears to healthcare and Raser shareholders were left in the dust.

But Washington never stays in one place too long. It makes for an easy target. So once again, the clean energy industry is heating up. The article in today’s Journal proves it.

With Stimulus 2.0 ready to be released and the DOE spending like an eighteen-year-old who just unlocked his trust fund, this is a fantastic time for Raser and its geothermal electricity production.

After all, just last week it announced it was applying for a Treasury Department grant that could put $33 million into the company’s coffer.

For a firm with a market value of just $90 million, $30 million can do great things.

This play may not have followed a traditional route and is certainly a move that would make any financial advisor soil his suit, but in today’s financial environment, when the government acts as the lender of choice, traditional rules are out the window.

While fundamental investments still have long-term merits, for us short-term traders and especially us contrarians, some of the best investment opportunities can be uncovered by following the White House press pool.

*** Speaking of money, how about Exxon’s big deal today? For us contrarians, the $31 billion, all-stock deal proves the world’s largest oil producer believes its stock is overpriced and ready to fall.

If you’ve read my work for any length of time, you likely know that I am a big fan of signaling theory. According to the common-sense notion, Exxon’s unwillingness to use any of its massive pile of cash is a sign that company executives feel a $69 share of the company is worth less than $69 in cash.

It is no wonder we are watching shares drop by more than 4.7% today. In the long run, today’s news will boost Exxon’s performance. But in the short term, investors have an awful lot to think about.

By far, the biggest news surrounding this story is not what it will do for Exxon or XTO shareholders, but what it will do to the natural gas market.

It’s exciting stuff, especially for those of us that just racked up triple-digit gains thanks to the industry’s recent meanderings. I’m talking to you TFN Strategic Trader members.

Here’s what I wrote for the TFN site today:

“You don’t become one of the world’s largest and most profitable companies by making dumb moves. Exxon Mobil (NYSE:XOM) proves it once again.

“The Street is buzzing today thanks to news that Exxon is printing some $31 billion worth of new shares in order to purchase XTO Energy (NYSE:XTO), one of the nation’s natural gas producing giants. It’s a major deal that has hearts skipping across a variety of sectors.

“Of course, nobody is as excited as XTO shareholders. They woke up to news of a buyout worth a 17% premium to Friday’s closing price.

“Shares of the oil and gas producer slipped by double-digit proportions over the past few months as natural gas prices slide. But now that demand is rising and gas prices are following suit, Exxon officials saw it was time to make their move. With XTO prices reaching short-term lows, Exxon made its move.

“Now that a major non-conventional gas player is making headlines, investors have their eyes on all sorts of potential buyouts. It’s almost impossible to find a company in the energy industry not trading in higher territory today.

“Two stocks you will hear a lot about over the next couple of weeks are Chesapeake Energy (NYSE:CHK) and Range Resources (NYSE:RRC).

“So far today, Chesapeake is up by over 6%, with shares trading close to $25.50 each. The company, with major holdings in all of the popular shale regions, has been a long-term target of buyout rumors. Maybe this time the speculators will be right.

“But my money is on Range Resources. It is a major player in the Marcellus region that just happened to announce significant expansion in the area this morning. Coincidence? Doubt it. It looks more like advertising.

“Range is the right size for a buyout. With a current market value of $7 billion and another $3 billion or so in debt, a buyout could come with a price tag of just over a third of Exxon’s purchase. Whoever decides to grab the company (think Shell or BP) would automatically get more than 180 Mmcf of daily gas production out of the Marcellus region.

“Of course, this is a long-term play. With gas prices plunging to ultra-low territory in recent months, any company purchasing gas assets now has a long-term outlook. With non-conventional plays hotter than a barroom pistol, major producers like Exxon are flocking to the sector in hopes of finding larger profits than their current low-margin deepwater prospects.

“For all of you fans of deepwater drilling, that is bad news, even horrid.”

Read why here.

*** Hey, lookie there. Gold’s up today. With word that Congress is ready to budget yet another couple trillion bucks, the dollar’s a tad bit weaker today.

As I write, gold is up by $3.70 per ounce and the dollar’s down just $0.0019 against the euro. Doesn’t look like buyers of either asset have much conviction.

Today’s just a short-term turnaround in the recent trend. Expect more strength from the greenback and more weakness from the gold market. By the time we sing Auld Lang Syne in a couple of weeks, gold will be trading for $1050 per ounce. That’s when you should be a buyer again.

This story goes well beyond Murdoch’s decision to start charging for his company’s online news content. It is a debate about monopolies and the government’s role in protecting or destroying them.

In case you missed it, there is a great editorial in today’s Wall Street Journal by the CEO of Google, Eric Schmidt (scroll down for link). In the piece, the doctor doesn’t necessarily lash out at Murdoch and his recent attacks aimed at Google, but the desire to call Murdoch a crybaby is obvious.

Schmidt makes it clear that Murdoch’s woes are not Google’s fault, but are the fault of an industry that has sat on its hands for the last decade as competition quietly, but firmly snuck up to the back door.

Now that Murdoch owns a very expensive media empire, his plans are to use his massive industrial weight to keep the media industry from swaying in any direction. He’s certain that charging for his content will force his customers from straying to competitors.

Of course, Schmidt has something very different to say. Essentially, the CEO tells Murdoch to start getting creative. His company is dumping 100,000 clicks a minute onto the online news sector. If the industry can’t find a way to profit with some four billion hits a month, well, it’s not Google’s fault.

The answer lies somewhere in the middle. But of course, Washington thinks it can solve the problem. As you read this, Murdoch and his gang are discussing the “future of journalism,” with the Federal Trade Commission.

They are not down there asking for a bailout or inquiring about tickets to the next state dinner. They are asking for (or flat-out buying) protection from the anti-trust gang.

Just like a Manhattan businessman goes to Guido looking for some “fire insurance,” Murdoch and company are in Washington asking for protection from the ankle-biting competition.

What does Murdoch want from Obama?

He wants what every man wants, the ability to buy more. Under current regulations, Murdoch is unable to make purchases in certain rival publications and media outlets. But with the notion of critical mass on his side, if he could get the right to buy and control his rivals, he would have a much better shot at coercing the industry to move in the “right” direction. He could save journalism as we know it.

Will Washington bite?

Um, let’s see. With a horde of newspaper and television ad space on his side, does Murdoch have anything to give to politicians in exchange? This one’s a no-brainer.

If politicians can get on the good side of Murdoch or his competitors, the political campaign process may not be quite so expensive in 2012.

So here’s my first official prediction for 2010: Washington is going to take action and the media industry is going to be a hot one.

We got a first glimpse of what’s to come early today with the finalized deal from GE and Comcast. The next year, especially if Murdoch makes the right moves, will be filled with similar stories of consolidations and acquisitions.

Giants like Time Warner and Liberty Media are going to be players. And little guys like Virginia’s Media General and McClatchy will be in play.

It is going to be an interesting year as the industry finally gets serious about finding a clear strategy for the future.

Smart investors will make good money from the action and smart contrarians will know the money flows right back to Washington.

*** You have got to love the action from the natural gas markets these days. Even I, the bear of bears, wasn’t expecting yet another injection into the nation’s gas storage facilities this week, but what’s investing without surprises?

Thanks to today’s news, we were sitting on gains of as much as 415% on one of our three remaining natural gas plays. The lower gas prices go, the higher that figure will climb.

Here’s what I told TFN readers today about the nation’s natural gas glut:

“I am about as bearish as it gets when it comes to natural gas, but even I underestimated how bad the situation really is.

“While most analysts were expecting the year’s first official drawdown in the nation’s natural gas inventories, I conceded and said they were right. I expected a drop in supplies of one, maybe two, billion cubic feet of gas.

“Most analysts expected twice that figure as the nation starts to crank up its thermostat. After last week’s smaller-than-expected gas infusion, a withdraw this week looked like an easy call.

“I was so certain, I recommended TFN Strategic Trader members lock in gains on a couple of our natural gas plays. We locked in gains of 56% by selling half of our position in one play and 50% gains by unloading another play in its entirety.

“It looks like we jumped the gun.

“According to the Energy Information Agency’s latest report, released at 10:30 this morning, the nation managed to produce more gas than it consumed once again.

“This time last week, the agency showed a gain of one billion cubic feet. This week, the figure doubled to a weekly increase of two billion cubic feet.

“Under normal circumstances, this would not be much of an issue. But the nation’s storage facilities are 99.9% full and pipeline pressures are rising as suppliers try to squeeze in as much of the fuel as possible.

“So far, natural gas futures have not reacted too strongly to the news (which helps prove my theory about selling yesterday). December gas contracts are down by just $0.035 so far, which puts the price at $4.495.

“As the winter rolls on and investors and analysts finally realize this winter will be unlike any other for the natural gas market, that price will sink lower and lower.”

Keep reading here to read about several of the ways to take advantage of the situation.

*** Finally, there’s a celebration in my hometown tonight. We got word early this morning that Harley Davidson has officially decided to keep the doors open at the factory that employs nearly 2,000 local workers.

Of course, at least half of those workers will be asked to leave over the next couple of years and the remaining workers will be working harder and getting paid less, but isn’t that the way it works these days?

Maybe we shouldn’t blow up the celebratory balloons just yet.

Now, I don’t care who makes what. That’s between bosses and their worker bees. But I do get a little peeved when Uncle Sam tries to tell some worker he can’t get paid per his contract.

Before you go shouting about how Washington saved Wall Street and therefore we, as taxpayers, get a say over pay, let me ask you this. Does your mortgage company tell you what color to paint little Johnnie’s room? Does your car loan provider tell you how fast to drive? Does your health insurance provider tell control your diet?

Didn’t think so.

If some congressman came barging in this office right now, demanding I slash my pay, his goons would have to hold me back as I try to kick the lunatic’s shins. But if the owner of the company came with the same request, I’d have no choice but to open my wallet (and possibly refresh my resume).

But that’s the way business works. The guys that own the joint make the decisions, not the banks and certainly not government. If the workers don’t like it, they leave. It’s supply and demand and nothing else.

As taxpayers, if we want to be angry about anything, we should be angry that our government used our money to cover somebody else’s dangerous bets.

But now that Goldman shareholders are asking the company’s top brass to reduce the size of the corporate bonus pool and pass the money onto shareholders, the company had better act. If not, the free markets are going to take charge.

Shareholders are going to hit the sell button. Prices will drop. Capital will be reduced. And Goldman executives will be in pinch once again.

That’s the way the business world really works, no matter what Nancy Pelosi and Barney Frank want.

When Obama was knocking on the door, Goldman said go away. But now that Mr. Common Shareholder is on the line, next Friday’s paychecks will have a few less zeroes.

Doesn’t that make you feel good? Capitalism is still alive.

***I have my eye on China and its quickly growing, yet fragile, economy.

Earlier today, I wrote a piece for TodaysFinancialNews.com that helps illustrate the potential of the Chinese markets. Instead of nervously awaiting every bit of economic data to hit the Street, savvy international investors are racking up big gains.

Here’s a bit of what I wrote:

You could say it is the tale of two economies. The best of times in Asia, the worst of times here in the States.

While domestic investors wonder when some rogue piece of data will kick out the wobbly legs supporting the top-heavy equities market, savvy Chinese investors are raking in gains from an economy soaring ahead a 7% per year clip.

Where would you rather have your money?

A look at two of today’s winning stocks will help you decide.

Zumiez is a sports-related retailer based in Everett, Washington. With 343 stores in over 30 states, its operations are as exposed to the nation’s economy as it gets. A look at the company’s third-quarter results prove how low our expectations have gotten.

Over the past three months, the $375 million company racked up profits of $5.1 million, down from last year’s corresponding figure of $6.8 million. The earnings-per-share figure of $0.17 beat expectations of $0.15, which helps explain why shares are up by over 10% so far today.

But that’s the only reason investors have to celebrate.

The company’s fourth-quarter expectations leave little room for joy. After booking revenues of $113 million last quarter, the company expects sales of just $122 million to $126 million over the next three months, which include the critical holiday shopping period. Last year’s Q4 was worth sales of $125.

Analysts, which were expecting a figure closer to $131 million, have plenty of reasons to feel disappointed with the news.

Of course, Zumiez is not the only retailer worried about a slower-than-expected fourth quarter. Keep reading here.

*** Finally, I cannot help but smile when I see the Associated Press reporting that gas prices have fallen by more than 15% so far this month. Here’s a hot tip for their reporters: It ain’t over yet!

As you probably know, over at TFN Strategic Trader, we’ve been all over this story. In fact, just yesterday we took profits on one of our four gas-related plays. But we didn’t dump it all. Instead, we sold half of our position, locking in gains of 400%.

Now we’re playing with the house’s money.

Want to know the move that led to these massive gains? Easy… read all about it here.

• A parade of bellwether U.S. companies reported disappointing earnings results yesterday (Tuesday) and cut their outlook for the future. Caterpillar Inc. (CAT) reported its first loss since 1992 and cut its projection for the full year by 50%. Pharmaceutical giant Merck & Co, Inc. (MRK) and chemical maker E.I. du Pont de Nemours & Company (DD) said profits fell 57% and 59% respectively, as both cut forecasts for the full year.
• After acquiring Citigroup Inc.’s (C) Smith Barney retail brokerage unit, Morgan Stanley (MS) is considering buying U.S. regional banks in a move to boost the company’s retail brokerage operations, MarketWatch reported, citing an article in the Nikkei newspaper. “We are looking for potential opportunities to buy a bank that has a presence in an important market in the United States,” Morgan Stanley’s Chief Executive Offer John Mack said in an exclusive interview.
• Continuing to reel from the shift of advertising to the internet, the New York Times Co. (NYT) reported a first-quarter loss of $74.5 million, or 52 cents a share, MarketWatch reported. Excluding special items, the company reported a loss of 34 cents a share as first-quarter revenue tumbled 19% to $609 million. The Times, like many newspapers and magazines, is having a difficult time coping with an advertising downturn.
• Computer spies were able to copy and siphon data related to the design and electronics systems of the $300 billion Joint Strike Fighter project, The Wall Street Journal reported yesterday (Tuesday).  The newspaper quoted current and former government officials as saying the intruders have repeatedly breached the Pentagon’s computer networks, making it potentially easier to defend against the plane.  The spies could not access the most sensitive material, which is kept on computers that are not connected to the Internet. Lockheed Martin Corp. (LMT) is the lead contractor on the Defense Department’s costliest weapons program.
• Senior officials at the Federal Deposit Insurance Corp. (FDIC) have privately discussed who might replace Citigroup Inc. (C) Chief Executive Officer Vikram S. Pandit if the embattled banking giant needs additional federal capital infusions, The Financial Times and MarketWatch both reported. The FDIC identified Chief Financial Officer Edward J. “Ned” Kelly III and ex-CFO Gary Crittenden as possible successors. However, the published reports also state that any initiatives to change Citigroup’s top management will be initiated by the U.S. Treasury Department.
• The U.S. Treasury Department’s plan to excise $1 billion of so-called “toxic” assets from the balance sheets of U.S. banks is vulnerable to all types of abuse and fraud and needs the protection of tough conflict-of-interest rules, government bailout watchdog Neil Barofsky said in a report released yesterday (Tuesday). Barofsky, the special inspector general for the $700 billion Troubled Asset Relief Program (TARP), said subsidies for public-private investment partnerships (PPIP) to buy assets could expose taxpayers to higher losses – without offering accompanying increases in the profit opportunities this program is supposed to create, Reuters reported. During the rest of this week, the Treasury Department is accepting applications from asset managers to manage public-private investment funds to buy the hard-to-value, illiquid securities that are backed by troubled mortgages still owned by banks.
• In a report released yesterday (Tuesday), The International Monetary Fund (IMF) says banks and other financial institutions face aggregate losses of $4.1 trillion in the value of their holdings because of a global financial crisis that is “likely to be deep and long lasting.” In that Global Financial Stability Report – which has become a closely watched barometer of the severity of the crisis – the IMF estimated that financial institutions around the world will have to write down about $2.7 trillion worth of loans and securities that originated in the U.S. financial markets between 2007 and 2010. That estimate is up from $2.2 trillion in the fund’s report in January, and is way up from its October estimate of $1.4 trillion, according to The New York Times. Conditions have especially worsened in the emerging markets – and particularly in Europe – where banks face more write-downs and may require fresh equity, even as companies attempt to refinance existing debt. The IMF said banks will endure two-thirds of the write-downs, but noted that pension funds and insurance companies also face steep losses.
• The Reserve Bank of India yesterday (Tuesday) lowered its key borrowing rate by 25 basis points to 3.25% and its lending rate by 25 basis points to 4.75%.”The further policy rate cuts affected as part of this policy should be a definite signal for banks to reduce lending rates,” RBI Governor Duvvuri Subbarao said at a press briefing.

Source: Global Investment News Briefs Wednesday April 22, 2009

…since it is concerned primarily with providing information and news about stocks and bonds so that you will be motivated to constantly buy and sell stocks and bonds.

So I was surprised to read where it starts out with, “Large investors, including some who anticipated deep troubles for the housing and financial sectors, have been buying gold, concerned that moves by governments world-wide to shovel money at problem areas could cripple leading currencies.”

This is exactly true! That is exactly why I am buying gold, and why smart people are buying gold and why large investors are buying gold!

Well, since the WSJ is traditionally concerned with stocks and bonds and so is historically unconcerned and disdainful of gold, I figure that Mr. Zuckerman will follow that “gold bug” news with some disparaging remark like “which only proves how stupid large investors are, since everyone knows that gold is for morons and raving lunatics like, for instance, The Mogambo, who is forever wailing about how you should be buying gold, silver and oil with your very waking breath because the Federal Reserve, which caused all of the world’s problems by their decades-old regimen of constantly over-creating money and credit which produced massive inflations in the prices of stocks, bonds, houses and size of government, is now going to make the money supply go Freaking Super-Nova (FSN) with even MORE excess creation of money and credit to accommodate the panicky, unbelievable, desperate deficit-spending plans measured in the multi-trillions of dollars by the incompetent, brain-damaged Congress and the ridiculous Obama administration comprising, as it does, the worst of the worst, and that means consumer prices are going to explode one day – say people like The Mogambo, within a year or so, and for a long, long time afterward, too.”

Although Mr, Zuckerman does not mention me directly, he says, “For years, big gold fans were fast-moving traders and so-called gold bugs, a crowd of bears ever-convinced that the underpinnings of global economies and markets were set to crumble” which not only describes me to a freaking T, but is exactly what happened!

He also describes me pretty well, too, when he says, “Gold has disappointed some investors because it hasn’t been a home-run investment despite continuing financial ills” which is also the fault of the Federal Reserve, which is on record as saying that “the Fed stands ready” to dump as much gold onto the market as is needed to keep its price from rising.

And the reason they are openly manipulating the price of gold, which is the advice of former Fed chairman Paul Volcker, is because they are concerned about the price of gold rising, which is a clear signal that inflation is raging because the Fed is a bunch of money-maddened morons and the economy is in Big Freaking Inflationary Trouble (BFIT) because of them and their mismanagement of monetary policy with their ridiculous neo-Keynesian econometric stupidities! Hahahaha!

And it is going to get worse, as Junior Mogambo Ranger (JMR) Wayne T. sent a clip from ft.com that announced that “Barack Obama’s top economic adviser has urged world leaders to pump more public money into the economy in a coordinated effort to boost demand and lift the world out of recession.”

And how are we going to do this amazing feat? By engineering a “global demand-led recovery” where everybody starts buying! Buying! Buying!

And in fact, Laughable Larry Summers thinks, “There’s no place that should be reducing its contribution to global demand right now. It is really the universal demand agenda.”

I cannot believe what I am reading! Perhaps in a feeble attempt to make me shut up my screaming in outrage at the inflation in prices that such irresponsible economic stupidity will cause, he does allow that, as ft.com terms it, “While the US and other western nations should return to living within their means in the medium term, everyone should raise spending sharply now.” Hahaha! Unbelievable!

And why in the hell would anyone in their right mind say such a bizarre thing that is directly contraindicated by the entire stinking corpus of world economic history for the last 4,500 years which proves that, 100% percent of the time, increasing the money supply of a fiat currency with government deficit-spending has been what we in the economics biz officially call a Big, Big, Bad, Bad, Bankrupting Bust (BBBBBB).

Well, don’t look at me for an answer as to why someone would say such a ridiculous thing and make us laugh with scorn and contempt, but, “In an interview with the Financial Times, Lawrence Summers said the urgent need for a short-term increase in spending by governments temporarily overrode the longer-term goal of tackling the global imbalances many economists believe caused the financial crisis.” Hahahaha!

“Temporarily overrode”! Hahaha! This is the economics of Larry Summers? Hahahaha! No wonder he wound up in the Obama administration! Hahaha! No wonder we are so freaking doomed!

I am struggling to contain my laughter, as I want to make sure that I write this down because people in the future are not going to be satisfied with me merely recalling the moment and laughing and guffawing all over again, but probably drooling more than I do now.

So I officially make note that Larry Summers, “Barack Obama’s top economic adviser” thinks that things will be better by having the government spend more money! Hahahaha!

This is after, I assume, getting it from the Federal Reserve, which can merely push a button to create all the money and credit one can even imagine, at perpetually low interest rates, so that untold trillions of dollars of new money can be borrowed from banks so that untold trillions of dollars in new Treasury bonds can be bought, worsening horrific imbalances that are already so staggering that they could only have been produced during rampant government corruption and/or pandemic stupidity! Hahaha!

I knew I could not get into the interview itself, and, as usual, am stopped long before I can even get near, although sometimes I can break free of the grasp of security guards long enough so that you can barely hear me in the background yelling, “We’re freaking doomed, you morons! The damned increase in the money supply by government deficit-spending will increase prices and produce Really, Really Weird (RRW) economic distortions!”

Well, this is not one of those times, and I couldn’t hear a thing they were saying, and thus they could not hear me, and I had to read in the Financial Times article that Mr. Summers says, in another of those things that must be written down because nobody is going to believe it, that “The US administration had no choice but to take strong public action to ‘save the market system from its own excesses.’” Hahahaha!

“Save the system from its own excesses” with more excesses! Hahahaha!

But this is not about how much disrespect I have for Mr. Summers’ opinion (because, as Milton Berle said, “Never trust the opinion of a man in trouble” as to the necessity of more governmental deficit-spending to correct the bankrupting imbalances of previous governmental deficit-spending until fully half – half! – of the economy is now composed of local, state and federal government spending, which is not even to mention all the borrowing by the local and state governments floating bonds to pay for sewers and fire houses and playgrounds where most of the “children” are probably drug-addled adolescent criminals and brain-damaged mutants, judging by the way they look, dress and act.

No, this is about how you should buy gold; but perhaps the best reason to buy gold is provided by Mr. Zuckerman himself, who says, “Since 1971, the dollar has been backed not by gold but by faith in the U.S. government”! Hahaha! Faith in the U.S. government! Hahahaha!

If anybody has any faith whatsoever in the U.S. government, then they have not been paying attention and deserve to lose their money, as the price of freedom, they say, is eternal vigilance, but that is not exactly true. It looks like the saying should be “The price of freedom is either eternal vigilance or all your money.”

The good news is that the real, lazy man’s secret is that gold is “eternal vigilance” in a handy, compact yellow metal, and sometimes, like now, you will actually get richer in terms of fiat money due to the depreciation of the over-produced fiat money!

Whee! This investing stuff is easy!

Source: There’s No Place Like Gold

The venture – Areva Newport News LLC – will emanate from a $360 million investment, and will lead to the construction of a 300,000-square-foot production-and-engineering facility, the two companies said yesterday (Thursday). It will employ 500 workers when completed in 2011, according to an MSNMoneycentral report.

Mike Petters, president of Northrop Grumman Shipbuilding, the unit that has signed on to work with Areva, told The Wall Street Journal that “we’ve watched manufacturing wane in shipbuilding and we’ve watched for other opportunities to go into adjacent areas…We think a nuclear renaissance is coming and we have the work force.”

The facility will promote U.S. market sales of Areva’s “evolutionary power reactor,” or EPR. Areva is seeking to get the reactor design certified by the Nuclear Regulatory Commission (NRC) for use in the U.S. market, The Journal reported.

The deal is also the latest illustration that commercial nuclear power – which has been on a more or less permanent hiatus in the U.S. market since the 1979 near-meltdown at the Three Mile Island nuclear powerlant near Harrisburg, Pa.— may finally be making a comeback in the energy-starved U.S. market.

There hasn’t been a single new nuclear plant built since the Three Mile Island accident; this new manufacturing facility will be the first of its kind built in this country in 35 years, the Newport News Daily Press reported.

The state-run Areva is trying to compete in an industry in which Japanese firms – such as  Hitachi Ltd. (ADR: HIT) and Toshiba Corp. (OTC: TOSBF), have come to play a large role. No surprise, too, that China is building up its nuclear capabilities, and has global objectives for that business.

“Our target is 80% U.S. content” for U.S. nuclear power plants, Anne Lauvergeon, chief executive of Areva, told  The Journal. Lauvergeon believes Areva’s linkup with Northrop will give the French company a competitive advantage over rivals that are more reliant on imported goods. That’s why she said that she’s emphasizing the need to have 80% of the content for U.S. reactors to be built domestically.

Orders from U.S. nuclear operators could top $100 billion in coming years, and some are hoping that a wave of nuclear construction could also bolster the U.S.’s ailing manufacturing sector.

Areva’s Lauvergeon said her company’s existing heavy manufacturing facility at Chalon/Saint Marcel, France, is operating at capacity with a five-year backlog of orders. Nucelar plants built with Areva’s design are under construction in France, Finland and China. Three U.S. utilities have selected Areva’s design including Constellation Energy Group Inc. (CEG), PPL Corp. (PPL) and Ameren Corp. (AEE).

With its decision to invest so heavily in the U.S. market – and to involve a partner – it’s clear Areva is highly confident that plans to build new nuclear plants in North America will move forward, The Journal reportedSource: French Nuclear Giant Areva Links Up With Northrop in Groundbreaking Production Venture

I got a real kick out of The Week Ahead column in the Wall Street Journal on Monday, as Sudeep Reddy starts out saying, “Inflation is too high because of soaring global commodity prices.” Hahaha!

Apparently this doofus does not know that inflation in prices comes AFTER inflation in the money supply, and so while “inflation is too high”, it is NOT because of soaring global commodity prices: It is because the staggering increases in global money supply have created so damned much money that all that dough has to go somewhere, and it is going into the marketplace to bid up the prices of things, like commodities, creating the higher prices!

But stupidity about inflation is so rampant that I actually tried this fascinating philosophy that very day as I was driving along in my car. I had the radio blaring and the “pedal to the metal” as I happily raced along, passing other cars with a big “whoosh!” and honking at the pretty girls hoping that they would say, “Oh, you are so handsome! Take me for a ride and I will let you do whatever you want, over and over again, until you are exhausted!”

After a while I was pretty grumpy because none of the girls wanted to go for a ride and most of them threatened to call the police if I did not stop bothering them and honking the horn at them, which was prophetic in its own way because the police soon pulled me over.

Anyway, the thought of being pulled over by the police would normally have me in a panic, but this time I was ready! So as I pulled over to the side of the road, I smiled smugly to myself as the grim-faced cop came sauntering up to my car, whereupon he started predictably yammering about giving me a ticket for speeding.

Coolly, and with a sneer on my face, I told him that it wasn’t my fault! I explained that, yes, I had my foot on the accelerator, but the car went fast all by itself! In fact, the more I stepped on the accelerator, the faster the car went! It’s obviously one of the mysteries of the universe!

He just kept calmly writing out the citation in that damned little pad of his, and I kept explaining how this is the exact same scenario that Ben Bernanke, chairman of the Federal Reserve and Sudeep Reddy, ace reporter for the Wall Street Journal, keep yammering about! They say that roaring inflation in prices, like the roaring inflation in my vehicle’s speed, happens all by itself, and if he wanted to hand out tickets for mysteries of the cosmos like this, then why doesn’t he get his fat, stupid cop butt back into his stupid little cop car and arrest Ben Bernanke, Alan Greenspan and Sudeep Reddy?

Of course, I naturally figured that with these kinds of references, he would soon see the powerful validity of my argument about how I was right that the speed of my car was not my fault, and send me merrily on my way, again happily speeding, the radio blaring and honking at the pretty girls. But he didn’t. He started giving me a hard time! The bastard!

Then I decided to play my trump card, and told him that I can’t be given a traffic citation because I had already given myself a pardon for any crimes I may have committed, including traffic infractions, just like Bush and Cheney have given themselves a pardon-in-advance against being charged with war crimes of which they are obviously guilty.

My argument is simple: If these two despicable creeps could pass legislation that trumps international laws and conventions to which we are signatory members, then surely I can be above the law, too! It’s just a matter of creating the right pieces of paper!

It didn’t work. He knew I was an idiot. And I know a couple of other idiots, but they didn’t get tickets for speeding. See the kind of discriminatory crap I have to put up with every damned day of my life it seems?

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Source: Monetary Joyride

• The U.S. Treasury Department announced yesterday (Wednesday) that it would bring back the one-year Treasury bill at its next quarterly refunding auction, MarketWatch reported. “The majority of members believe that the addition of the year bill combined with increases to the size and frequency of existing coupon debt over coming quarters will still not be sufficient to satisfy the increased financing needs of the Treasury over the intermediate and longer term,” a panel of experts said in a government report, stating the next option could be to bring back the 3-year note as well.

• United Online Inc. (UNTD), the owner of Internet service providers NetZero and Juno, announced it would acquire online florist FTD Group Inc. (FTD) for about $456 million in cash, stock and notes, The Wall Street Journal reported. “This transaction will meaningfully diversify our revenue base within a large global market experiencing significant migration to the Internet,” said United Online Chief Executive Mark R. Goldston.

• Descendents of oil scion John D. Rockefeller, the founder of Standard Oil from which both Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) can trace early roots, have called upon Exxon to be more environmentally conscious, despite the company’s record recent profits, Forbes reported. Neva Rockefeller Goodwin, a great-granddaughter of John D. Rockefeller, said yesterday (Wednesday), “The truth is that Exxon Mobil is profiting in the short term from investments and decisions made many years ago, and by focusing on a narrow path that ignores the rapidly shifting energy landscape around the world, including developing nations.”

• Slowing demand and increasing competition are to blame for Garmin Ltd. (GRMN), navigation device maker, to miss market estimates for the first quarter. Garmin’s shares dropped as much as 14.4% on the day to its 52-week low of $39.75 a share as it posted a profit of $147.8 million, or 67 cents a share. Analysts expected the company to earn 74 cents a share, according to Reuters Estimates.

• Soft-drink titans PepsiCo. Inc. (PEP) and The Coca-Cola Co. (KO) continue to push their battle into uncharted waters, as Pepsi announced it acquired V Water, Britain’s vitamin-enhanced bottled water, for an undisclosed amount. V Water is very similar to vitaminwater, which Coca-Cola bought last year for $4.1 billion. Sales of non-carbonated drinks are growing considerable faster than carbonated beverages, and Pepsi already owns SoBe Life Water, Gatorade sports drink and Aquafina bottled water. 

• Brazil’s Bovespa stock index jumped to a record after Standard & Poor’s unexpectedly raised the country’s credit rating to investment grade. The Bovespa Index of the most-traded stocks on the Sao Paul exchange surged 6.38% to 67,896.13 at 3:32 pm EST, its biggest gain in three months.

• Kraft Foods Inc. (KFT) reported first-quarter profit of $608 million, a 13% drop from a year ago, yesterday (Wednesday). Though sales improved 21% despite economic pressures and rising commodities prices, as Kraft raised prices on 90% of its products.

• Kellogg Co. (K) reported yesterday (Wednesday) that first-quarter profit fell 2% despite recent price increases. Net earnings fell to $315 million compared with $321 million a year ago. Earnings per share increased from 80 cents a share to 81 cents a share because of a $650 million share-repurchase program, the Associated Press reported.

According to the WSJ, there is a “rapid rise” in default rates on ARM mortgages,  mortgages that give borrowers with good credit several different monthly-payment options, reports. And a report by Citigroup says losses on ARMs may be “close to subprime” in some cases.

These mortgages, which are sometimes known as “pick-a-pay” or payment-option mortgages but are generically called option adjustable-rate mortgages, are turning out, in some cases, to be even more caustic than subprime loans, in part because the loan balance and the monthly payments on some loans is growing even as home prices are falling.

These loans have become the focus of investigations and a spate of lawsuits by borrowers who believe they were misinformed about the mortgages’ complicated structure.

“Buying real estate isn’t a popular view right now, says Floyd Brown, over at InvestmentU.com. “But that’s what being a contrarian is all about.”

Floyd thinks we could be closer to the end of the bear market in real estate, than the beginning. “This doesn’t mean we are out of the woods yet, but its time to start scouting for under-priced values in real estate, especially in the commercial sector…”

Floyd has found a way to buy $10,000 worth of real estate for $6,700. To find out more, click here.