Sunday Night Special - Rethinking How to Feed the World...with Bill Gates...
HIGHLIGHTS VERSION...for the full program version, click on bottom right of the video after starting highlights version...

The End for Greece in the EU?... The Guardian reports that investors have pulled a stunning €8-10 billion since the Greek crisis commenced in earnest last November... Zero Hedge: "If true, this is the beginning of the end for the troubled EMU-member country... If you will recall....., the one factor that truly exacerbated the pre- & post-Lehman fiasco, both domestically & globally, was investors' loss of confidence in the system"... http://www.guardian.co.uk/world/2010/feb/07/greek-rich-pull-out-billions-debt

Wells Fargo Bets a Billion$... cuts bond holdings, betting interest rates will rise... http://moneynews.com/StreetTalk/Wells-Fargo-Rates-Rise/2010/02/05/id/349134 (3*)

Will the US Lose Its AAA Debt Rating?:
"Absolutely not... That will never happen to this country."

- Timothy Geithner

http://www.bloomberg.com/apps/news?pid=20601087&sid=ahGwg7V3u3Gs&pos=3

Problems will be contained....(to planet earth)... contagion is a fact of life in our interconnected global economy & financial markets says Gretchen Morgenson ... quotes David Rosenberg: "...to save the world from economic collapse we have transferred the liabilities of the private sector to the public & not every country has the money to service or repay that debt..... We are in a post-bubble credit collapse and there are going to be periods of calm and stormy weather. Investors will have to navigate through the volatility... Unfortunately, I think we are still in the early stages. The next recession will happen more quickly than people think."... http://www.nytimes.com/2010/02/07/business/economy/07gret.html (4*)

Food Prices to Rise... says Goldman Sachs... "We remain constructive on corn prices .... Over the medium-to-long term, soybean offers the most compelling drivers, as... demand growth from emerging economies will likely leave the market particularly sensitive to negative supply shocks"... http://www.agrimoney.com/news/buy-into-corn-not-fears-for-china-says-goldman--1312.html (3*)

"Allowing for competing currencies will allow...(free citizens)... to choose a currency that suits their needs, rather than the needs of the government. The prospect of American citizens turning away from the $ towards alternate currencies will provide the necessary impetus to the US government to regain control of the $ & halt its downward spiral. Restoring soundness to the $ will remove the government’s ability & incentive to inflate... & keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off...." Ron Paul
-Cliff Note: understand that the founding fathers wrestled with this question & tried to enshrine in the Constitution a system that would not allow government to control the people's money....what citizen has freedom when someone else owns & controls that citizen's money ? We believe the Constitution should have been cherished, not forsaken.

"My own favorite illustration of their views was Bernanke's comment in late 2006........ : 'The US housing market merely reflects a strong US economy.' He was surrounded by statisticians and yet could not see the data... His profound faith in market efficiency, & therefore a world where bubbles could not exist, made it impossible for him to see what was in front of his own eyes."

- Jeremy Grantham

On Sovereign Debt Defaults: "We're concerned about Greece which represents 2% of the Euro Zone... we should be concerned about California which represents 20% of the US"...
- Tom Sowanick, OmniVest Group on FOX Business

G-7 Vows to Keep Stimulus... Even as Budget Deficits Grow... meeting in remote Iqaluit of the northern Canadian arctic, G7 finance ministers pledged to press ahead with economic stimulus measures: "We need to continue to deliver the stimulus to which we are mutually committed and begin looking at exit strategies to move to a more sustainable fiscal track"... http://www.bloomberg.com/apps/news?pid=20601087&sid=aHNY95xmqjwM&pos=1 (3*)

Europe's Debt Problem, Effects on Euro, US$, Gold...

Courtesy of Lisa Benson

G7 Leaders Meet In Remote Canadian Arctic... Finance ministers & central bank governors from 7 of the world's richest countries are meeting to discuss financial-system reform, the need to address China's undervalued currency, when & how nations should deal with mounting deficits, Haiti reconstruction... http://www.cbc.ca/canada/story/2010/02/05/g7-north.html (2*)

Top Central Bankers Meet Secretly in Australia... top central bankers began arriving in Australia to meet at a "secret location", as renewed fears about the strength of the global recovery gripped world markets, to discuss concerns about global growth & debt... http://www.news.com.au/business/secret-summit-of-top-bankers/story-e6frfm1i-1225827289543 (2*)

Special - The Failure of the Keynesian State... Mises Institute, Thomas Woods presents.. 39 minutes(5 min.intro-fluff)...

Short Selling Ban Coming ?... Zero Hedge reports on the interesting prospect of new restrictions..
http://www.zerohedge.com/article/here-comes-short-selling-ban-more-money-market-restrictions (2*)

"Governments are trying to ensure cheap cost of capital to create jobs & spur economic activity. After our recent credit crisis, year-over-year money supply (M-2) in the U.S. is up only 3%,... down dramatically from its peak. But the monetary base has increased massively. That's supposedly money that's gone to the banks for lending, but in fact they're not using it for loans because it's not showing up in the velocity of money supply. At the end of the day, we're still wrestling with deflation. It's something we're going to live with. We'll get pockets of inflation, commodity by commodity."
- Frank Holmes
(chart above courtesy of US Global Investors, click to enlarge)
http://www.theaureport.com/pub/na/5564

Bill Gross sees Sovereign Debt Crisis... not on the same magnitude as the subprime crisis, but thinks a similar dynamic is at play... could get contagion

Courtesy of Gary Varvel

$ to fall vs Asian currencies?... Nouriel Roubini expects the US$ to weaken as much as 15% against Asian & “commodity” currencies such as the Brazilian real over the next 2 or 3 yrs... "There’s going to be for a couple of quarters better economic news out of the US... temporary factors, such as restocking, fiscal stimulus, & base effects... In the second half, economic weakness is going to reappear again. On a trend basis, the $ has to weaken."... http://www.bloomberg.com/apps/news?pid=20601087&sid=aikb19gdRT3A&pos=5 (3*)

Pathetic Returns By Pensions & Insurance says IM Vronsky...world's 3 largest depositories of investments are Pension Plans, Retirement Programs (IRAs) & Insurance Companies. Recently the total investment assets of these depositories amounted to about $43 Trillion - "In recent years the above investment groups have suffered horrifically grievous losses via their traditional investment vehicles".. most of these investment funds are invested in assets with little growth or negative returns... provides the following chart on different asset classes, showing gold to be outperforming by far...

some insurance companies & pension funds beginning to diversify into gold... quotes Nick Barisheff: "By one estimate, if the world's pension funds and hedge funds moved just 5% of their assets into gold, it would trade at $5,000"... Vronsky concludes: "Soon the global investment managers of Pension Plans, Insurance Companies & Retirement Programs (IRAs) will be allocating sizable investments to gold, because the yellow metal's total return has far out-performed all other alternative investment vehicles during the past decade. This will forge new record high gold prices on a yearly basis."... http://www.financialsense.com/editorials/vronsky/2010/0204.html (4*)

Deficits Threaten US Credit Rating...

Is The Reflation Trade Over?... collection of thoughts & articles by Mish Shedlock, exploring whether we are at a crossroads between reflation back to deflation, whether commodities, junk bonds, corporate bonds & foreign equities are overcooked... http://globaleconomicanalysis.blogspot.com/2010/02/commodities-kiss-of-death-is-reflation.html (4*)

Courtesy of Doug Short

Graph of Economic Downturns

(click to enlarge)

Courtesy of Ed Stein

"The stimulus we experienced in 2009 is unlikely to be repeated in 2010 for a number of practical and political reasons... Based on official projections, the U.S. government debt-to-GDP ratio will soar above 100% within the next two years — levels in the past that only occurred in periods of war... it also looks as though Bernanke & Company are going to try and craftily withdraw from its unprecedented incursion into the mortgage market. If 2009 was the year of the policy reflation, then 2010 is likely to be the year renewed deflation... Within the next three years, expect to see more than half the fiscal deficit being accounted for by interest costs on the growing stock of government debt."
- David Rosenberg

"Every single human should have that trade".... says Nassim Taleb on shorting US Treasury bonds... emphasizes it is a "no brainer" to bet on a rise in long-term US Treasury yields, which move inversely to prices, as long as Bernanke & White House economic adviser Lawrence Summers are in office... http://www.bloomberg.com/apps/news?pid=20601087&sid=a3E4uC5VIFeo&pos=5 (3*)

Sovereign Debt Fears Spur Selloff... fears of country debt defaults spreading from Greece to Portugal sent global financial markets lower... Credit Analyst Gaven Nolan: "The latest catalyst was [Wednesday’s] bond auction in Portugal, which was scaled back and which has reignited fears that the likes of Portugal and Greece will not be able to fund their deficits without a bail-out"... http://www.ft.com/cms/s/0/a37ab63c-1166-11df-9195-00144feab49a.html (2*)

Courtesy of John Trever
Cliff Note:How many years have U.S. citizens believed that it was possible to increase spending while lowering taxes? How long until the country understands what the forefathers understood: There is no such thing as a free lunch. What Vice-President said "Deficits don't matter"? What book says "borrower becomes servant to the lender"?

Courtesy of Sean Brodrick

Jim Chanos on China...

On CHINA: "The fun fact I'll give you is there is almost 70 billion sq. feet under construction right now in high rises, commercial, residential & light manufacturing. We estimate about 30 billion sq. feet is commercial, what we would consider as office space. That's a 5x5 cubicle for every man woman & child in China. They are building high rises in cities with already 15-20% vacancy rates, & those are the government's numbers. The real vacancy rates are higher... The Chinese banking system is the problem, it is loaded with bad debt...Our geostrategic position is a lot better than China. Keep in mind China imports almost all its essential materials... They send us stuff, we send them pieces of paper, who would you rather be."
- Jim Chanos
(Cliff Note: I'd rather have money to lend than need to borrow)

Volcker Rule Not Dead Yet... "There's a real need to shout and be populist and beat up the bankers. Whether there's any seriousness about getting a bill through is another question."...

Contrarians Take Note: "Investors Intelligence", the NY-based company that tracks the opinions of newsletters, reported that the number of newsletters that expect a 10% decline in the US stock market reached the highest level since April 1984.
- courtesy of Plaza Futures Group @ ScotiaMcLeod

US deflation no longer a risk?... Tom Braithwaite reports that according to James Bullard, member of the Fed's key policy-setting committee, the US has escaped the danger of Japanese-style deflation... http://www.ft.com/cms/s/0/bd820288-0ed2-11df-bd79-00144feabdc0.html (3*) (may need to register with FT for free first)

A Japanese Hyperinflation Could Cause US Hyperinflation... click on image above to activate slide show, courtesy of Business Insider...as clear & incisive as a picture presentation can be (5*)

Courtesy of Lisa Benson

Deficit Turns Into National Security Threat...President of the Council on Foreign Relations Richard Haass: "We've reached a point now where there's an intimate link between our solvency and our national security."... http://online.wsj.com/article/SB10001424052748703422904575039173633482894.html (4*)

Budget Forecasts vs. Reality... New York Times cool interactive on how accurate past White House budget forecasts have been... just 2 yrs ago, surpluses were predicted by 2012... click on image above to activate...

“How long can the world’s biggest borrower remain the world’s biggest power?” Who is being quoted ? __ Ronald Reagan __ Larry Summers __ Ron Paul ? ...read & find out....
http://www.nytimes.com/2010/02/02/us/politics/02deficit.html?th&emc=th (4*)

Future of US Debt... Pimco's Market Strategist Tony Crescenzi weighs in on the fixed income market...

Deflation's turn to bat ?... Al Friedberg: 1) January 2007, positioned for a coming crisis in credit, which indeed came... 2) January 2009, positioned for a coming reflation in asset prices, which indeed came... 3) January 2010, positioning for a coming deflation in asset prices... points to a flattening in aggregate money & credit towards the end of 2009 & now a contraction ... sees sharp downward move in asset prices... but likes gold, Asian currencies, German bunds... audio about 30 minutes... http://www.niagaracapital.ca/00AnalysisFol/ADFConferenceCall02.03.10.mp3

Courtesy of Gary Varvel

Rogers Responds to Chanos on China Bubble... Jim Rogers does not agree with contrarian investor Jim Chanos who suggests that China's bubble may lead to a Dubai-style implosion...

US Was Close to Financial Collapse,

says Hank Paulson

Click on image above to activate Bloomberg video

China Growth Expectations Unsustainable?... Stratfor explores the answers... "Both investors and countries whose economies are dependent on China start February increasingly worried about the direction of the Chinese economy. Monetary tightening and allocations of resources mean that present growth expectations are unsustainable"...

International Currency Crisis Coming ?... former deputy Treasury Secretary Roger Altman says yes unless the govt addresses debt problem pro-actively...

Can the Bull Market Last?... Mohamed El-Erian sees a gap between the consensus market expectations & key political & economic realities... "If the gap isn’t bridged by the validation of the more optimistic expectations, investors may well find that January’s global equity sell-off was just a precursor to a disappointing year for several asset classes, including stocks."... http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNx3T04fUldY (4*)

Where is Oil Heading?... 11.5 week cycle?

Click on image above to activate video

Courtesy of Adam Hewison and INO

Courtesy of Axel Merk
http://news.goldseek.com/MerkInvestments/1265123764.php

What the world must do to sustain recovery... Martin Wolf sees the biggest challenges are political - global co-operation... "We have a globalised economy, but politics remains local. In times of crisis, the pressure to look after the former dominates the latter. But now we face a different task: that of convalescence & the associated return to politics as usual. Nobody can imagine that managing this transition will prove easy. But, as the global balance of power continues to shift year by year, the challenge must be met. If it is not, the global economy & global co-operation might yet founder."...
http://www.ft.com/cms/s/0/c7682f76-1034-11df-841f-00144feab49a.html (4*) (may need to register with FT for free first)

Volcker Rule to pass but it's wrong says Dennis Gartman predicts the rule to separate commercial banking from proprietary trading will end up being enacted... says prop trading had nothing to do with the crisis, which was about the govt pushing bad loans... predicts it will cause havoc in financial markets... Cliff thinks Gartman is a very good trader & Volcker is a great central banker (within the context that "great central banker" is an oxymoron)

Sean Brodrick: Is it Time to Buy Gold?
Brodrick - is It Time to Buy Gold

The Case Against China's Economy...
Jim Chanos speaks...(57 minutes)

A Lower US $?: "We need to increase employment, decrease our deficits and to help do this we need to increase exports... We need to be competitive with countries around the world."
- Timothy Geithner CliffNote: Doesn't everyone?

Frank Holmes talks of the Supercycle...says this time the cycle is much bigger because of the big growing middle-class sizes of China & India... discusses infrastructure spending going on in China & India... graduate students in US are Chinese & Indian students most of whom go back to their countries to develop them... sees nuclear energy demand increasing... points out gold has seasonal pattern peaking this month going into August as a low... video 7 articulate minutes ... http://watch.bnn.ca/#clip262430

Do creditors prefer inflation?: "They would rather get paid in cheaper $'s than not get paid at all."
- Jim Rickards

The New Depression & the Fed’s Illusion... Jim Rickards: "we are experiencing massive deflation, exactly as seen in the history of depressions. And we are experiencing massive inflation exactly as monetary theory predicts. The conundrum of tame price indices is solved when we realize that we are experiencing inflation & deflation at the same time. This is not the same as price stability; it is something new & far more dangerous.
Imagine a tug-of-war between two teams of footballers. Enormous force is being exerted in opposite directions, yet little happens at first as the teams are evenly matched. Suddenly one team collapses..... price signals today resemble this tug-of-war. The natural deflation that comes with depressions is being masked by the policy inflation of the Fed. The result is no change in the price indices but enormous hidden stress.... We see deflation in the rolling collapse of....real estate values. We see inflation in asset bubbles... This situation cannot persist; sooner or later one side will prevail. The longer the force of inflationary policy leans against the force of generalized deflation, the more disorderly the collapse will be. This is not the stuff of soft landings." http://dailycaller.com/2010/02/01/the-new-depression-and-the-feds-illusion/ (4+*)

20 reasons Global Debt Bomb explodes soon... Paul Farrell lists 20 made-in-America trigger mechanisms that could ignite Great Depression II...
1. Federal Budget Deficit Bomb.
2. U.S. Foreign Trade Bomb.
3. Weakening U.S. $ as Foreign Reserve Currency Bomb.
4. Cheap Money Bomb: Credit Ratings Down, Rates Up.
5. Global Real Estate Bomb.
6. Peak Oil & the Population Bomb.
7. Social Security Bomb.
8. Medicare: A Nuclear Bomb.
9. Health-care Insurance Bomb.
10. State & Local Government Budget Bombs.
11. Underfunded Corporate Pensions Bomb.
12. Consumer Debt Bomb.
13. Personal Savings Bomb.
14. War & Military Defense Deficits.
15. Homeland Insecurity Bomb.
16. Fed/Treasury Bailout Bombs.
17. Insatiable Washington Lobbyists Bombs.
18. Shadow Banking: The Derivatives Bomb.
19. Dysfunctional Two-Party Political Bomb.
20. The Coming Populous Rebellion Bombs.
http://www.marketwatch.com/story/our-debt-time-bomb-is-ready-to-go-ka-boom-2010-02-02?dist=beforebell (4*)

Will US Govt Use 401K Funds to Buy US Bonds?... "According to widespread media reports, both the U.S. Treasury Department and the Department of Labor plan are planning to stage a public-comment period before implementing regulations that would require U.S. savers to invest portions of their 401(k) savings plans & Individual Retirement Accounts (IRAs) into annuities or other "steady" payment streams backed by U.S. government bonds."... with foreign buyers like China & Japan buying less US bonds, & the Fed saying it will stop printing money out of thin air to buy them also, it's easy to understand why the US govt is now looking on its citizens with retirement savings as a source of funds to buy its bonds... http://moneymorning.com/2010/01/27/retirement-plans/ (4*)

"The Mint's primary cost driver is the price of metal, a factor over which it has no control. Daily spot prices of copper & zinc, the Mint's two main metallic materials, have fluctuated in excess of 100 percent, & the price of nickel by 500 percent. This contributes to volatile & negative margins on both the penny & nickel: in recent years the penny has cost approximately 1.8 cents & the nickel approximately 9 cents to produce. Costs have exceeded the value of these two coins by over $100 million in prior years."
- White House Budget Documentation

Courtesy of Lisa Benson

Exclusive Youtube Interview with Obama...

Japan - It's Beginning... the largest buyer of Japanese Government Bonds (JGB) is under pressure to diversify its holdings... the Japanese financial services minister urges Japan Post Bank to diversify its investments into US Treasuries & corporate bonds in an effort to reduce the risks of over-concentration in JGBs... http://www.ft.com/cms/s/0/209e34e2-0f62-11df-a450-00144feabdc0.html (3*) (may need to register with FT for free first)

US Government borrowing

has replaced private borrowing

(click to enlarge)
Courtesy of Niels Jensen

Canada - Good & Boring... Paul Krugman points to Canada for lessons in financial stability & risk management... "We need to learn from those countries that evidently did it right. And leading that list is our neighbor to the north. Right now, Canada is a very important role model... Canada has an independent Financial Consumer Agency, and it has sharply restricted subprime-type lending."... http://www.nytimes.com/2010/02/01/opinion/01krugman.html?emc=eta1 (4*)

Matt Simmons - At Risk, The Sustainability of Oil & Gas...
AON Annual Energy Insurance Symposium

How Trillion $ Deficits are Created... great chart from the NY Times above...
http://www.nytimes.com/2009/06/10/business/economy/10leonhardt.html?_r=3&src=tptw (4*)

S&P Has Peaked for 2010?... yes says Christian Bendixen, worries selling is on high volume, buying is on low volume for several weeks now - these indications are bearish... "High volume on down days and low volume on up days is a sign of distribution that we’re going to head significantly lower"... also worries on the fundamentals relating to sovereign debt, continued stimulus & the US housing market recovery - "All the assumptions made in 2009, fundamentally, are up in the air right now"... finally sees a broken rising wedge (see chart above) that is also technically bearish... http://pragcap.com/peak-year (3*)