Inflation Running Rampant....Portugal Bonds Spike

What's going on in the world today? It's almost like being on the edge of a quantum singularity, and we've just crossed the event horizon.

At the same time Ben Bernanke is telling everyone he can "control inflation" and not to worry, commodities of every sort are at an all time high.

And yet many in the media seem convinced it has nothing to do with the unraveling of the world reserve currency. Just look at the long list of bullshit excuses.

http://www.washingtonpost.com/wp-dyn/content/article/2011/02/09/AR2011020903759.html

(the weather sucks, ethanol is taking all the corn... blah blah blah)

Here's what's really happening.

1. Uncle Benny prints a shitload of money.




2. Speculators know the free money can't last forever, and move their money into Commodities and foreign investments.



3. The stock market is flooded with free money, creating a "recovery". Only in this strange universe of inverse logic can the stock market rally while money is flowing OUT. It's like raising prices while sales are down 50%.



4. Inflation surges around the globe.

http://www.businessweek.com/news/2011-02-09/stocks-fall-on-inflation-concern-treasuries-wheat-corn-gain.html

http://www.thehindubusinessline.in/2011/01/18/stories/2011011852680101.htm


5. The elected officials try to cover it up by changing how inflation is calculated.

http://online.wsj.com/article/SB10001424052748704013604576104351050317610.html

6. A Cocaine Bear buys gold and silver, places it in his safe, stops by the liquor store on the way home, collects mail.

Now onto the next subject.

This again from our heroes at ZeroHedge.

http://www.zerohedge.com/article/portuguese-10-year-bond-yield-hit-fresh-lifetime-highs

With all the discussion over how "stable" Europe is in the past month, one might actually take the European bankercrats' word at face value. And nothing could be more hazardous to one's health than believing a corpulent gentleman from Brussels. Because while Herman Van Rompuy is literally sending out haikus via twitter, his continent continues to burn. Today, the Portuguese 10 year hit a fresh lifetime high yield (and low price for those who failed bond math 101). One would think that with virtually everything backstopped by the ECB, Europe would show at least some resiliency. No such luck. In fact, things are getting progressively worse as Germany continues to procrastinate on the one decision that has any hope of being at least a stop-gap interim solution, namely a united bond issuance authority. Instead, Europe continues to go all in on its failed EFSF contraption which will work for a few months, and then will have to be bailed out with an even bigger CDO: an EFSF3? The only question around this time is who is indicating (wink) that they are long the equity tranche? As for Portugal's completely non-viable interest rate: just close your eyes and stick your hand in the sand. Trust Bernanke- it works for him (and he is a Ph.D.).



So far Ireland, Iceland, Greece and soon Portugal and Spain will be suckling at the teat of Germany, who was mocked for it's modest approach before the financial meltdown.

Add all this up with the Tunisian meltdown and the Egyptian riots and it's an interesting time to live.

So do I have any advice for you? Buy Gold, Buy Silver (the physical metal, not the paper crap) and prepare for judgment day. If it doesn't happen at least you will have been prepared, unlike the masses of sheeple who expect the government or Uncle Benny to bail them out.

Oh wait... the next bailout is already on the way! Get ready for QE3 folks.

Suez canal disruptions begin

And here we go:

Suez Canal Company workers from the cities of Suez, Port Said, and Ismailia began an open-ended sit in today. Disruptions to shipping movements, as well as disasterous econmic losses, are expected if the strike continues. Over 6000 protesters have agreed that they will not go home today once their shift is over and will continue their in front of the company's headquarters until their demands are met. They are protesting against poor wages and deteriorating health and working conditions.

Keep an eye on oil.

http://www.zerohedge.com/article/here-we-go-suez-canal-workers-go-strike

Insanity Builds, Commodities poised for explosion, Internet BS etc.

Today I want to talk about the idea of the "Internet Kill Switch" that has been discussed and some interesting observations made by Jim Rogers about commodities.

This image below is somewhat off topic, but I like how it illustrated the USA's relationship to China, yet another broken part of our society.



Currently listening to: E-40 "It's all bad"



First off, can the internet be turned off in America? Secondly... Obama is completely isolating his base (which was built from an online buzz) by supporting this outrageous idea.

According to KurzweilAI.net, the internet is too decentralized in America for the switch to work like it does in Egypt where they just call the top 6 ISPs and there's no connectivity in under 1 hour.

What kind of a world do we really live in? If you think we have moved on to a new era of enlightenment and the Egypt, Tunisia style riots can't happen here; consider the following from ZeroHedge.


Jim Rogers, in his latest interview, cuts right to the chase: "I don't own many equities, because I don't know what is going to happen in the world economy. I expect more currency turmoil, more social unrest, more governments collapsing. So I am investing in currencies and commodities rather than stocks." Pretty much like everyone else, as we have been suggesting for quite a while. Rogers snaps at the trademark CNBC question of what he would be investing in: "I have been explaining to everybody on CNBC for a year and half or two now that food prices are going to go through the roof, they're going to explode. We have serious shortage of everything developing, including shortages of farmers... The average age of farmers in one major agricultural state is 58 years old. In 10 years it will be 68 years old. In parts of Japan they have no farmers... It takes 7 years for a coffee tree to mature. Orange trees, palm trees: you don't just suddenly snap your fingers and suddenly get some more palm oil. All of this takes time." So all those who believe that the surge in people rushing to fill the ag arbitrage holes will produce immediate results, may need to wait 3-7 years, dependant on access to manure.

On whether this is not a demand-led inflation in commodity prices:

Whenever governments have printed money throughout history, people put their money in real assets, whether it's rice or silver or natural gas. People protect themselves, they don't just say "give me some more paper money." And if you say it's not demand: go to India, go to China, see how people are changing their lives and using more." As for supply: "Commodities are based on supply and demand. You can have demand go down, but if supply goes down more you are going to have a bull market."

Not surprisingly, Rogers see oil at $150, and the exchange between Rogers and some CNBC guy discussing the role of speculators (it is all the evil speculators' fault, never the Chairsaint) is worth watching the clip alone.

Rogers' response to CNBC's desperate attempt to get him to list a stock or two for the lemmings to buy into, the response is priceless: "Commodities have outperformed stock by 10 times over the last 10-12 years. Why aren't you doing only commodities. It's outperformed stocks by 1,000%. To me it's pretty simple, you should change the name to CommoditiesNBC."

And, finally, his response to what his stock exposure is is not what CNBC wanted to hear. "I am short emerging markets ETFs, short Nasdaq ETFs."

Brilliant as always.



Remember when Tunisia collapsed, the president fled with 1/4 of the countries gold reserves. In Egypt gold was intercepted in airports hidden in pillow cases.



So what's going to happen when our welfare state finally cracks? Where will you flee to? You wont be able to escape with your gold, your dollars will be worthless and then we see why Obama is pushing for an internet kill switch.

Because at your most hopeless moment you will find yourself trapped in this rat cage that we call the USA and this text will never leave your Droid.

"Hey bro let's skip the gym today, there's a violent squatter in my car."

Buy gold, guns and stockpile canned goods.

Peace out for today,
Cocaine Bear