The global trend of nations “repatriating” their gold reserves from the custodial vaults where it has long been stored continues. The issue, as WealthCycles has reported extensively, is the near certainty that not all the gold recorded to be held in the bullion banks is really there. Much of it has been pledged and repledged against the debt that keeps the world’s monetary system afloat. The more physical gold that is reclaimed and delivered to sovereign treasuries, the less that remains to back up all the pledges. When the chips are called in, many of those who believe they own gold will find themselves holding nothing but pieces of paper. At that point, “price will solve everything.”
Mandated wages & unions hurt unprotected workers
Minimum wage laws & mandating union contracts (closed shop) are designed to help a small segment of workers gain economic advantage while actually hurting unprotected workers. Long term, even the beneficiaries suffer from the unemployment that excessive wage demands bring about. High wages are great, but if there are no jobs they become meaningless. In a free society with free markets, workers should always negotiate for the highest wage, while businesses should always strive for maximum profits. And if left to the market, the consumer will decide which businesses thrive, and wages must go up, not because of coercive legislation but because under the circumstances there would be competition by businesses to seek out the best workers and reward them with the best wages. Coerced union wages and dictated minimum wages grossly distort the market process and contribute to the malinvestment initiated by the Federal Reserve policy and guarantee that in the correction, wages must come down.
Source: Liberty Defined, by Rep. Ron Paul, p.309-310 Apr 19, 2011
via Ron Paul on Jobs.
Since Obama was elected President on November 4th, 2008, the U.S. dollar has lost 48% of its purchasing power. Americans today spend 48% more for gasoline than they did the day of the last election. Americans today also spend 105% more for sugar, 78% more for coffee, 58% more for corn, with similar gains for many other agricultural commodities. The U.S. government and Federal Reserve created all of this inflation in an attempt to reinflate the Real Estate bubble, yet the median U.S. home price declined by 2.4% during this time period. Meanwhile, the real unemployment rate has increased from 16.8% to 22.3%.
Warren Buffett recently remarked that you can’t value gold like an oil company or farmland, so we should forget gold and buy equities. But he misses the point! Gold doesn’t produce value because it is value; in other words, gold is money.
It’s sad to see Mr. Buffett go to the dark side. But, as I’m about to show, he’s losing company when it comes to his views on gold.
It’s difficult to fathom why a professional money manager – someone who looks at markets all day long and tries to make money for his clients – doesn’t see the in-your-face arguments for buying precious metals. It’s borderline irresponsible. You may think that’s a strong statement, but I ask: what would you do if you were responsible for investing other people’s money and found yourself in the following investment environment:
U.S. Food Inflation Spiraling Out of Control
The Bureau of Labor Statistics (BLS) today released their Producer Price Index (PPI) report for March 2010 and the latest numbers are shocking. Food prices for the month rose by 2.4%, its sixth consecutive monthly increase and the largest jump in over 26 years. NIA believes that a major breakout in food inflation could be imminent, similar to what is currently being experienced in India.
Some of the startling food price increases on a year-over-year basis include, fresh and dry vegetables up 56.1%, fresh fruits and melons up 28.8%, eggs for fresh use up 33.6%, pork up 19.1%, beef and veal up 10.7% and dairy products up 9.7%. On October 30th, 2009, NIA predicted that inflation would appear next in food and agriculture, but we never anticipated that it would spiral so far out of control this quickly.
The PPI foreshadows price increases that will later occur in the retail sector. With U-6 unemployment rising last month to 16.9%, many retailers are currently reluctant to pass along rising prices to consumers, but they will soon be forced to do so if they want to avoid reporting huge losses to shareholders.
Food stamp usage in the U.S. has now increased for 14 consecutive months. There are now 39.4 million Americans on food stamps, up 22.4% from one year ago. The U.S. government is now paying out more to Americans in benefits than it collects in taxes. As food inflation continues to surge, our country will soon have no choice but to cut back on food stamps and other entitlement programs.
Most financial experts in the mainstream media are proclaiming that the recession is over and inflation is not a problem in the U.S. Unfortunately, they fail to realize that rising food and gasoline prices accounted for 58% of February’s year-over-year 3.85% rise in retail sales. NIA believes price inflation is beginning to accelerate in many areas of the economy besides food and energy, and all increases in U.S. retail sales this year will be entirely due to inflation.
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