As we predicted weeks ago, the debt ceiling vote would pass simply because it had to pass, and it would simultaneously accomplish nothing except buy the U.S. a few months of time - oh, well and it would also give the ratings agencies a nice excuse to keep the AAA+++ Triple AAA Shiny AAA debt ratings pristine. We can't be havin' the U.S. downgraded, now can we?
However, even with this record debt limit increase, it will only hold the U.S. over a few months because of the exponential nature of the debt spiral. Consider: the Treasury will issue another $72 Billion next week alone just to "pay back" some of the $250 Billion in Federal pensions they tapped to keep the lights on over the past two weeks. And here's a little tidbit of info you can bring to the dinner table tonight - the U.S. gov't currently "borrows" 40 cents of every dollar it spends. Try running your household budget that way and see how long you last.
All things being equal and barring no further increase in interest payments for the sake of argument, the debt limit increase "bought" the U.S. just 311 days (give or take a taco or two) officially until the next debt ceiling is (b)reached. However, in real time math (aka, our calculations) on the exponential
What astounds us entirely is the number of
For the sake of time, we'll recap only a few of the more important news events that occurred over the past five days. Ready? Ok, sit back and strap on your seat belt, and see if what has transpired since our last article seems reminiscent of what we have been warning about. For your viewing pleasure, we present it in a David Letterman style Top 10 Countdown.
The Top Ten Events of the Past Five Days That You Need to Know Now, or Otherwise Known As, Why You Need To Borrow a Pair of Grandma's Adult Diapers Now
10) Debt ceiling is increased after weeks and weeks of political drama. Everyone with half a
9) Euro zone manufacturing PMI collapsed to 50.4 in July from 52.0 in June. This was the worst reading since October 2009 and just above the level considered contraction. Did we mention that reading is after $2.2 Trillion was pumped into "the economy" since March. Oops.
8) July ISM manufacturing plummets 4.4% to 50.9 on Wall Street expectations of 54.9. Again, a number just above 50 is not a signal of strong growth, especially given the latest M1 money supply data which shows an astounding 12% YoY increase.
7) Detroit is now the 3rd most dangerous city in the world as crime is skyrocketing due to unemployment and the typical economic depression "kinda stuff." So congrats for making the list. Or not. And New Orleans? Try the 9th most dangerous city in the world - that says a lot when you've got to compete with gems such as Baghdad, Karachi and Caracas. We have to wonder if France would be willing to trade St. Tropez for all of New Orleans and a Twinkie.
6) Russian President Vladimir Putin said what nobody else has the balls to say wants to say when he said, "the U.S. is a parasite living off the global economy [...]" Well, sure Mr. P, but lest you forget, Russia lives off of U.S. oil consumption, just as much as China lives off U.S. consumerism and excess so what does that make you? Next.
5) Europe burns while Angela goes into hiding. Just as we predicted, Spain and Italy are crumbling as contagion spreads fast like gangrene on an open wound. Keep in mind that we have noticed that 7% is the unofficial threshold for bonds in the EU so keep an eye on those yields. Currently, Spain's 10yr is yielding 6.35% and Italy is 6.16%. Now Hu who said they would buy up Euro debt and save all of Europe? Epic fail. Note: "Foot in mouth" disease is not the bovine strain of "foot and mouth" although they seem to be closely related these days.
4) China's Dagong credit ratings agency does what no other ratings agency wants to do and should have done a long time ago - downgrade U.S. debt (along with EU and UK debt). Although this downgrade was a soft blow (from A+ to A) so as not to start a new kind of war, we're certain this is one of many to come. Remember how fast Lindsey Lohan Lehman Brothers fell and they were highly regarded and pumped by Wall Street's finest analysts.
3) Barclays PLC is set to cut another 3,000 jobs in addition to the tens of thousands of jobs other banks (i.e. HSBC bumped that 10,000 job cut last week to a whopping 30,000 this week!) have been cutting in the past 2 months due to poor trading conditions that ironically, they created. Why is this important? It's a clear indicator of things to come.
2) Food stamp usage continues to make records - this one's a biggie, and from our favorite source, ZeroHedge, but where else? We've been tracking the food stamp program (SNAP) usage since, well - forever and the chart looks very similar to our gold chart - which means a vertical trajectory not unlike the Atlantis space shuttle launch. Now, we can't wait to see what this chart will look like if today's Challenger record July jobs cuts are any indication.
1) Gold. It's up. Way up. That's all you need to know. Ok, maybe you want to know more. Last Fryday, we left a note to our readers and facetiously stated that as the global economy falls apart we may see "gold at $2000 by the time we come back" in less than a week. Of course, we were only joking about $2000, but it seems someone Hu who reads our blog took that quite literally. Only jesting. But, gold did today, hit another record high of $1672. Now the question is, when does this "tradition" become "money?" duh! #winning!
Needless to say, the global economy reminds us of those old(er) movies where it's terribly obvious that the background is totally fake; one scene from You Only Live Twice is a classic example of a projection screen blunder. Worse, often the actor who is driving, is turning the wheel in the wrong direction. Back then, people might have been fooled, as this was the best technology could offer. Today however, we laugh. The global economy is very similar, with all the smoke and mirrors set to create the illusion that things are moving forward when in reality, we're rolling back into the abyss at breakneck speed. And we mean that sincerely. One only needs to see today's Top Ten list to see what we're talking about.
Now, how's Rhode Island doing these days? Oh, never mind. We'll save that and housing for next week.
Fukushima
If you've been reading this blog since March 11th, you know we've been reporting the risks associated with the triple global catastrophes of Japan and warned everyone this event was just heating up (in so many ways) and was exponentially worse than Japan or any other gov't official ever admitted. Along the way, our "rogue" speculations have been proven true - the absolute worst case scenario has occurred, and exceeded that by many miles. Here are this week's top 5 events you need to know about Fukushima.
5) TEPCO has just now "discovered" radiation levels outside the reactors that are so high, there are no instruments in the world that can even read higher than what they are - 10Sv/hour, or enough to kill a human within seconds of exposure. Since no instrument exists that can accurately read above that level, we'll speculate that it's closer to 15Sv/hour. Of course, our guess is as good as anyone's but certainly better than underestimating the damage or taking TEPCO's word for it. After all, they told you that Fuksuhima was not even as bad as Three Mile Island, let alone 25 Chernobyls. Expect many more "discoveries" in the coming weeks ahead that will make your blood boil.
4) From Ex-SKF, we've got a great video for you to watch. Now, almost 5 months after the fact, the people are waking up to what we have already concluded and warned about. We hope that anyone who has the chance to evacuate to safety can do so, because as you saw last week, the gov't doesn't care one bit about you. We wish you all in Japan the best. Think hard about why the evacuation zone has not been expanded.
3) In addition to TEPCO's other recent "discovery" of at least 10Sv/hour outside the reactors, we learn that TEPCO has just "discovered" 5Sv/hour inside reactor 1 on floor 2. The only reason this reading was 5Sv/hour and not more was because again, the instrument could not handle anything higher than that. Incredible. As we said months ago, expect to see many "revelations" about what really was/is going on over there as they leak out to the public.
2) It gets better (or worse depending on your POV) because now, more and more of these "surprise pockets" are popping up all over but TEPCO does not plan to measure them. These sizzling pockets are not your ordinary hot pockets. They'll kill you in seconds. Of course, this could be why Japan in hiring anyone who is willing to work there for an incredible $600 per day. Not bad - so long as you don't care about living more than a few years.
1) Finally, this article sums up everything we already knew - in short, Fuksuhima is much, much worse than they admitted and about to get even worse.
Ok, that's all for now. This was supposed to be a quick update while we are away and we got all carried away with excitement and zeal. It's almost 9PM, time to retire to bed, but we look forward to providing another update soon - if things start to heat up again, and gold is $3000/oz by then.
Fukushima
If you've been reading this blog since March 11th, you know we've been reporting the risks associated with the triple global catastrophes of Japan and warned everyone this event was just heating up (in so many ways) and was exponentially worse than Japan or any other gov't official ever admitted. Along the way, our "rogue" speculations have been proven true - the absolute worst case scenario has occurred, and exceeded that by many miles. Here are this week's top 5 events you need to know about Fukushima.
5) TEPCO has just now "discovered" radiation levels outside the reactors that are so high, there are no instruments in the world that can even read higher than what they are - 10Sv/hour, or enough to kill a human within seconds of exposure. Since no instrument exists that can accurately read above that level, we'll speculate that it's closer to 15Sv/hour. Of course, our guess is as good as anyone's but certainly better than underestimating the damage or taking TEPCO's word for it. After all, they told you that Fuksuhima was not even as bad as Three Mile Island, let alone 25 Chernobyls. Expect many more "discoveries" in the coming weeks ahead that will make your blood boil.
4) From Ex-SKF, we've got a great video for you to watch. Now, almost 5 months after the fact, the people are waking up to what we have already concluded and warned about. We hope that anyone who has the chance to evacuate to safety can do so, because as you saw last week, the gov't doesn't care one bit about you. We wish you all in Japan the best. Think hard about why the evacuation zone has not been expanded.
3) In addition to TEPCO's other recent "discovery" of at least 10Sv/hour outside the reactors, we learn that TEPCO has just "discovered" 5Sv/hour inside reactor 1 on floor 2. The only reason this reading was 5Sv/hour and not more was because again, the instrument could not handle anything higher than that. Incredible. As we said months ago, expect to see many "revelations" about what really was/is going on over there as they leak out to the public.
2) It gets better (or worse depending on your POV) because now, more and more of these "surprise pockets" are popping up all over but TEPCO does not plan to measure them. These sizzling pockets are not your ordinary hot pockets. They'll kill you in seconds. Of course, this could be why Japan in hiring anyone who is willing to work there for an incredible $600 per day. Not bad - so long as you don't care about living more than a few years.
1) Finally, this article sums up everything we already knew - in short, Fuksuhima is much, much worse than they admitted and about to get even worse.
Ok, that's all for now. This was supposed to be a quick update while we are away and we got all carried away with excitement and zeal. It's almost 9PM, time to retire to bed, but we look forward to providing another update soon - if things start to heat up again, and gold is $3000/oz by then.
See you soon!