Thursday, May 14, 2009

How Unexpected...

If it wasn't so sad, it would be funny. More of the lies we were fed last month, last week for that matter, were uncovered today for all to see. Read 'em and weep.

US Jobless Claims +32K To 637K In May 9 Week; Survey +10K
WASHINGTON -(Dow Jones)- The number of idled workers filing new unemployment benefit claims climbed more than expected last week, driven higher by filings in car-industry states.

The total number of unemployed drawing jobless benefits also rose, to a record 6.56 million; the increase suggests how hard it is for the jobless to find new work amid the recession.

Initial claims for state jobless benefits increased 32,000 to 637,000 in the week ended May 9, the Labor Department said in a weekly report Thursday.

Wall Street economists had expected a 10,000-claim increase to a level of 611,000, according to a Dow Jones Newswires survey. The prior week's level was revised to 605,000 from a previously estimated 601,000.

The four-week average, which aims to smooth volatility, rose by 6,000 to 630,500.

The larger-than-expected increase in new jobless claims was a disappointment, given a report last week that indicated a mild moderation in layoffs. The Labor Department had said 539,000 non-farm payroll jobs were lost in April. Payrols fell by 699,000 in March. Since the recession began in December 2007, the U.S. has shed 5.7 million jobs.

A Labor Department analyst said most of the increase in new claims last week happened in states that are home to the automotive industry. "A good part of the increase is due to automotive," the analyst said.

The tally of continuing jobless claims - those drawn by workers collecting benefits for more than one week - rose 202,000 in the week ended May 2 to 6,560,000, the highest level since the government started keeping track in 1967. Continuing claims lag new claims by one week.

Again, "unexpected" bad news. How naive. Last weeks suggestion that job losses were bottoming out was a cruel joke. Does anybody, can anybody, even conceive how many jobs are going to be lost because of the Chrysler Bankruptcy? And the doubled by the GM Bankruptcy? The automobile industry is a tapestry, pull on one thread and the whole thing unravels. A whole new meaning to "the domino theory" is about to be christened.

Folks, last year Wall Street blew up, this year Main Street blows up. Bottom? The bottom lies far below...

US Producer Prices Climb More Than Expected
WASHINGTON (Dow Jones)--U.S. producer prices climbed in April more than expected because of a jump in food costs, but core wholesale inflation rose only mildly as the recession robs companies of pricing power.

The producer price index for finished goods increased a seasonally adjusted 0.3%, the Labor Department said Thursday. The PPI fell 1.2% in March.

Economists surveyed by Dow Jones Newswires expected prices would increase 0.1% in April.

The core PPI, which excludes food and energy costs, inched 0.1% higher last month from March. Economists expected a 0.1% increase.

Companies have been shedding inventories in the recession, forcing orders and production lower. Consumer spending remains weak; retail sales fell 0.4% during April, the government said this week. This climate makes it difficult for firms to hike prices.

A separate report Wednesday said U.S. import prices rose last month by the most in nearly one year, reflecting a third-straight increase in oil prices. Import prices climbed 1.6% in April from March, the Labor Department said Wednesday. Prices were down 16.3% compared to April 2008, largely due to sharp drops in crude during the period. Excluding petroleum, import prices in April were down 0.4% from March.

Oil rises despite dismal demand numbers
NEW YORK (AP) -- Oil prices hopped above $58 a barrel Thursday even though U.S. unemployment continued to rise and a new report predicted the world's petroleum appetite will shrink even more than expected this year.

Benchmark crude for June delivery climbed 60 cents to settle at $58.62 a barrel on the New York Mercantile Exchange. Prices fell as low as $56.55. In London, Brent prices lost 65 cents to settle at $56.69 a barrel on the ICE Futures exchange.

And natural gas futures fell despite a government report that showed storage levels did not rise as much as expected last week. Stores of natural gas, a major energy source for power plants, have been building since mid-March as factories shut down and people lose jobs. They remain well above historical levels.

Energy prices have recently neared five- to seven-year lows in a global economic downturn. Refiners have slashed production of gasoline in anticipation of fewer sales, which is part of the reason why prices at the pump are going up. Gasoline futures are rising on Nymex as well.

U.S. retail gas prices rose to a new national average of $2.281 a gallon (about 60 cents a liter) overnight, according to auto club AAA, Wright Express and Oil Price Information Service. That's about 23 cents more per gallon than last month, but still about $1.48 cheaper than a year ago.

Inflation isn't caused by rising prices, it is caused by a rising money supply. As the value of the Dollar falls, the prices of things sold in Dollars rise. Oil for instance. The glut of Oil on the market "may" be real, but the size of the glut is greatly exaggerated by the media. The price of Oil is rising simply because the value of the Dollar is dropping. At this point in time, there is no other reason. Gasoline prices are rising because refiners have cut production due to expected weak demand. Yes, there may be plenty of Oil, but there is an overabundance of Dollars as well. This is inflation in a nutshell, despite what you have been lead to believe about rising prices.

Inflation is just a spark today. Wait a few months. Wait until supplies of Oil and other commodities go into shortage because of across the board production cuts taking place today. Many because of a lack of financing. Wait until the shortages and the expanding money supply come face to face. Then you'll really get to see some serious inflation. There won't be a lot of extra cash for Christmas gifts this year. The price of everything you need is going to rise as the price of everything you don't need falls. The Fed will be powerless to to put out the inflation inferno once that little spark jumps the fire line.

Dollar's Purchasing Power Annihilated - The Chart They Don't Want You to See
This is the chart they don't want you to see: the purchasing power of the dollar over the past 76 years has declined by 94%.

Is America Overstretched?
Poor Obama. He seems like such a likable fellow. He would probably make a good college president. Or a good butcher. You’d enjoy going into his shop to buy cutlets.

But now the poor man finds himself in what has to be one of the tightest spots in history. At least in economic history. The crash of ’08-’09 clipped stock market investors for half their nominal wealth. The bear market in property has put one out of every four homeowners underwater. And now the recession/depression threatens to knock the stuffing out of the rest of the economy.

How can he get us out of this jam? He hasn’t a clue. So, he turns to his advisors… his hacks… his pollsters and his hangers-on…

…and what do they come up with?

“U.S. deficit four times last year’s record,” comes the press report. “Federal government will borrow almost 50 cents of every dollar it spends this year.”

This news would have taken our breath away. If we had any breath left. But after so many wonders, each one more breathtaking than the last, our lungs are all squeezed out. We can’t even give an audible sigh. Hold a mirror up to our nose and you would think we were dead.

You’ll recall that President Obama announced that he had found budget savings of $17 billion. We were exhaling on that for a moment until we realized that it represented less than 36 hours’ worth of federal spending. Then came news a week later that instead of cutting the budget, the latest estimates showed it going up by some $89 billion.

Let’s face it, at this point $89 billion is chicken feed. Here at The Daily Reckoning we carry that much in our wallet. We pass it out to subway bums and use it to tip cab drivers. So, we’re not about to get excited about such a trivial amount.

But coming on top of a budget deficit already estimated at four times the record deficit set last year…and we begin to think of straws and camels.

The idea of spending twice as much as you earn should take even a camel’s breath away. An ordinary man…hearing that fact…would feel like breaking the glass and pulling the alarm. “You can’t do that…you’ll go broke,” he would say. Basic arithmetic reveals the trap. In one year, you’ve built up debt equal to all of next year’s revenue. In two years, you’ve got debt of 200% of annual revenues. In 10 years, you’ve got debts equal to 1,000% of your annual receipts. Let’s see…say you only pay 5% interest…then, the interest alone takes up HALF your revenues. What creditor would lend you money?

Ron Paul's rEVOLution Versus the "One Ring" of the Federal Reserve
"One Ring to Rule them All... and in the Darkness Bind Them."
- from J.R.R. Tolkien's 'The Lord of the Rings'

Today's FED is a group of bankers who have the "Money Power" over all other banks and the money supply. This awesome power is like that of Tolkien's One Ring, which controlled all of the other Rings of Power worn by men, elves, and dwarves. Can you imagine what YOU could do if you could snap currency into existence simply by writing a check to yourself? I've described this money power here "The Money Matrix - How the FED Works (PART 6/15)".

Washington, DC is like Mount Doom. It is the only place that the Ring can be unmade, destroyed, and the money power returned to We the People. Only the Congress or the Supreme Court has the power to abolish the FED, and the battle royale of the moment is simply to audit the FED via HR 1207.

Frodo Baggins is no other than Congressman Ron Paul (R-TX). For most of his political career spanning 30 years, he has been isolated, sounding the clarion call for honest money from the fraudulent bankers upon the deaf ears of his fellow lawmakers. He has been struggling to place the banker's precious Ring in the fires of Mount Doom, and return prosperity to the land by ridding it of an evil, barbarous, immoral relic, the FED.

"On account of [the Federal Reserve], we ourselves are in the midst of the greatest depression we have ever known. From the Atlantic to the Pacific, our Country has been ravaged and laid waste by the evil practices of the Fed and the interests which control them. At no time in our history, has the general welfare of the people been at a lower level or the minds of the people so full of despair... They are the victims of the Fed. Their children are the new slaves of the auction blocks in the revival of the institution of human slavery."
- Congressman Louis T. McFadden, Pennsylvania's 15th District, from the 1934 Congressional Record

It is time for this farce to end. Led by the Gray Champion, freedom will come to our land once again if the people recognize that yet again we are all oppressed, that we all wear a gigantic ball and chain that is our monetary system and idiotic government behavior. If monetary policy must be the first shackle that draws noticeably amounts of blood before the chains are broken, so be it.

Trampled Green Shoots
By: Jim Willie CB,
The so-called ‘Green Shoots’ have been trampled by people walking to their Unemployment Insurance Offices to collect jobless claims in order to pay their bills. The so-called ‘Green Shoots’ have been trampled been people walking (or running) away from their homes as they are being foreclosed. The so-called ‘Green Shoots’ will continue to suffer from most water and nutrients heading to the Elite Gardens, diverted from those on Main Street. The so-called ‘Green Shoots’ have been killed off by a stubborn frost from the USEconomy. A prevailing sentiment and motivation has sadly and perversely entered into the public and financial sectors, with clear deceptive intention. The stretch of the data, the desperate misinterpretation the data, the false facade painted atop a USEconomy, such deceptions cannot stand even the most gentle taste tests and sanity checks. Then again, Wall Street and the USGovt (victim of the financial Coup d’Etat) must promote a positive sentiment in order to reinvigorate confidence. After all, the USDollar-based system depends upon trust and confidence, since no gold backs the financial foundation and debt permeates every crevice. Heck, not even much industry backs the USEconomy, the famed financially engineered miracle gone awry. The principal characteristic of a body that is bankrupt, deeply mired in debt, and must sustain itself by selling debt securities to foreigners is deception. One must struggle mightily to find much of any honesty in USGovt finance or US bank system accounting, economic statistics, or establishment of future prospects.

GOLD WILL REACH $3000 BEFORE THIS CHAPTER OF US HISTORY IS FULLY WRITTEN. SILVER WILL REACH $100 BEFORE THE LAST CHAPTER IS WRITTEN. These are easy targets. A tipping point comes just over the horizon, and the Hat Trick Letter is prepared to identify it. A massive spillover is due soon, from the money printing coffers into the streets where they people live and work and shop. When they finally receive the so-called money, it will be worth less than before, and might be worthless altogether. We are witnessing the heart attacks and seizures to the banks, the ambulances for the people, the weeds for the businesses, and the alzheimers for the press, as Pied Pipers run rampant and the USGovt vacillates between touches of fascism and communism. Sit back and watch, because we are in for a wild ride on the Weimar roller coaster. Not one in a thousand Americans even knows what that means. Try to avoid being a lamb at the slaughterhouse.

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