Friday, February 11, 2011

Is The Consumer "Recovering?"

Let's breakdown the December trade deficit numbers released today.  For all of December, the trade deficit was $40.6 billion, roughly in-line with expectations and up $2.7 billion from November.  The media is already pointing to the fact that imports increased by $5.1 billon from December to November as the signal that the U.S. consumer has returned and the economy is improving.

But let's look at the golden truth.  The total value of goods imported in December was $116.6 billion, up $2.9 billion from November.  Of that, $22.5 billion was oil, up $2.7 billion from November.  THUS, of the total amount of the increase in goods imported from November to December, $2.7 billion - almost 100% - of that was oil. Does that look like the consumer is spending more money on "consumables and durables?"  Rest assured, the full amount of the value of oil imported was from higher prices.  The consumer in this country is now spending an even bigger percentage of his monthly paycheck on oil.  THAT is bad for the health of the economy.

What is more interesting, in terms of the inflation picture, is the fact that China appears to be taking measures to "repatriate" inflation back to the U.S. by raising interest rates and slowly strengthening the value of the yuan.  This will cause the price of Chinese imports (i.e. Walmart, Best Buy, Target, etc) to rise in value, further exacerbating the accelerating price inflation in this country.

This will be GREAT for gold/silver.  Make no mistake about that.  And another little tidbit of news that you won't find reported on most U.S. media sources is that Viet Nam, the 5th largest importer of gold in the world, just devalued its currency by 7% - a huge amount in terms of currency devals. Here's the LINK  This will further fuel inflation in Viet Nam AND further fuel the demand for gold by the population in that country.

It's so simple to weed thru the garbage reported in this country to get at the truth. It's stunning how few people are interested in doing this.  I just heard about someone I know, who I thought had a lot of money socked away.  It turns out he's scrambling now to make ends meet.  This is someone who used to be a big corporate executive and I tried to convince him to unload his real estate and move into gold over 8 years ago...oh well, it is what it is...Have a great weekend everyone (Avete una grande fine settimane, ognuno)

16 comments:

  1. "Is The Consumer Recovering?"
    -----------------------------
    No.

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  2. Most comical excuse for a take down today, the PM's pit...those shorts will do or use any excuse to take down metals.

    Lindsay Lohan got a hair cut...Boom attack metal.

    Pure entertainment. ( Tips drink )

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  3. That flat-footed floozy got a hair-cut? Wish I knew ahead of time, would've shorted silver...LOL

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  4. Gold is a good store of wealth and how has that real estate worked out for the others? Not so good IMHO. Dave your friend is a loser who like an ostrich kept his head firmly planted in the ground. Hi Mammoth.

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  5. Re: the big corporate exec............A statistic of (investment) evolution........."It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change." Charles Darwin

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  6. Dave, was going to put “Ummm…” in there first but decided to be more succinct.
    - - - - - - -
    Hi Queenbee, I followed your blog’s link to this blog.
    - - - - - - -
    “How has that real estate worked out for the others?”
    Since I sold at the peak I guess I can’t complain.

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  7. 2/11/2011 9:33 AM EST
    Today's Quote of the day comes from no less than the Sage of Omaha. I just saw an article on Bloomberg that says Warren Buffett told the Financial crisis Inquiry Committee that we will always have institutions that are too big to fail and the government will always have to bail them out. He is quoted as saying ""You will always have institutions that are too big to fail, and sometimes they will fail. We still have them now. We'll have them after your commission report." He goes onto say that you have to believe the government will act to save those that fail. He said his investment on Goldman Sachs was essentially a bet that the government would not "shirk its responsibilities."

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  8. Part 4 video silver manipulation, enjoy!

    http://www.youtube.com/watch?v=h66R4U-Eybs

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  9. I would think the Vietnam people would be more mad that their dong got smaller, but who knows.

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  10. GYC: LOL - clever...

    thanks for the link silver/gold

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  11. Man, you were right, my dream targets may never get met on silver/gold. Cant a guy dream??

    Friday post up in a few.

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  12. http://www.zerohedge.com/article/chinese-economist-advises-country-sell-its-500-billion-gse-holdings-qe2-ends

    So if China decides to not only not buy any incremental debt issued by the US, but to fully commit to selling, this virtually guarantees QE3, as the only way to find a buyer for the debt will be to prime the Fed's printer. Which in turn will activate the timer fuse on the 21st century's first Wiemar Republic recreation. And to think of just how much of a coward Tim Geithner was forced to appear last week when he announced that China is not a currency manipulator: it will be so very fitting for the country to add insult to injury and literally take a bond dump on Geithner's front lawn.

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  13. As a fan of Ayn Rand I hope you have noticed that today Max Keiser is beside himself with hatred of her. Max Keiser says he's a collectivist" so he's finally come-out and admitted he's a Communist. No wonder he broadcasts out of Russia.

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  14. If everyone believes in individualism why are they always sycophantically following someone?

    Ayn Rand Railed Against Government Benefits, But Grabbed Social Security and Medicare When She Needed Them
    At least she put up a fight before succumbing to the imperatives of the real world.

    http://www.alternet.org/teaparty/149721/ayn_rand_railed_against_government_benefits,_but_grabbed_social_security_and_medicare_when_she_needed_them/?page=1

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  15. Ya well I would take everything I could right now that I could from the Govt ir I could get any of it because I paid a fortune in taxes and social security and medicare (NYC taxes for medicare) in my time and I'LL NEVER benefit from that.

    Rand's philosophy is about social darwinism and taking what you can is actually a social "good" because if society doesn't like what you are taking, then the "invisible hand" will create the mechanisms to prevent this taking. And that's a good thing. In other words, exploiting weaknesses in the system is a "good" because it forces the eventual imposition of checks and balances to cure these weaknesses.

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