For months, we've been reporting on the most ominous number for the economy and investors: the record drop in the nation's money supply as measured by the broad aggregate, M3: (http://markostake.blogspot.com/2010/08/unusual-uncertainty-meets-qe2.html). This one set of data virtually guarantees not only an intensifying downturn in the economy but major problems for both the financial system and the markets.
Recently, however, the first signs of a possible reversal have presented themselves. M2, which is the broadest money measure now formally tracked by the Fed, has begun rising regularly (seasonally-adjusted) on a weekly basis since the 4th of July, at an annualized pace of 7.8%. The impact on M3 has been positive but muted, with year-over-year M3 change down 4.3% as of August.
While this is a positive development, it is at best, a case of "too little", "too late". Even with the recent uptick in M3 growth, it is still in a zone consistent with both vicious economic downturns and stock market waterfalls. It would take, at the very least, a growth rate in the mid-single digits to starting turning the Titanic away from the iceburg. And, like the famous cruise ship, the economy has way too few life boats. And, the largest economy in the world, just like the largest steam liner, is thought to be unsinkable. And, there will be few survivors.
The Fed has pulled out all stops to liquefy the financial system and has had about as much success at turning the ship in time as Captain Edward John Smith. Like Smith, they didn't notice the economic iceburg until it was way too late.
The Fed, the Department of Treasury, and the Obama Administration have re-arranged the economic deck chairs by wasting valuable resources on poorly thought-out bailouts, nationalization of the banking sector and purchasing toxic assets. The bill for all this mismanagement? Who knows? A trillion here, a trillion there, and pretty soon we're talking about REAL money.
The best case scenario, assuming that M3 begins to reverse and grow, is for a solid and nasty 6 month downturn. Once the money supply turns meaningfully positive, it typically takes at least 6 months for the effects to filter through the system. Whatever turn does occur will only take place from MUCH lower levels.
The U.S. economy is like an addict requiring greater and greater doses of monetary (cocaine) injections to keep it going. Fed Chairman Ben Bernanke, like a good drug lord, has a very hooked population who now need pounds, not ounces of crack to stay stimulated. Time to switch to heroine? No, better yet LSD, so we can hallucinate ourselves into believing that "Helicopter" Ben can keep the high going.
In the interim, the beneficiaries of "Helicopter" Ben's economic crack pipe have been the stock market and Gold. Stocks remain absurdly buoyant despite a rapidly deteriorating technical and fundamental situation. Gold just benefits from economic stupidity, plain and simple.
Even if the Fed is successful in reversing M3, the "side effects" of the economic drug policy will be an overdose which ought to lead to hyper-inflation. Pick your poison. Avoid Depression but get hyper-inflation, while Murphy's Law says we'll get both.
How to survive this "do or die" situation? Use Gold as your flotation device.
Marko's Take
Showing posts with label M3. Show all posts
Showing posts with label M3. Show all posts
Sunday, September 19, 2010
Wednesday, August 11, 2010
Unusual Uncertainty Meets QE2
Ya gotta love them boys at the Federal Reserve (FED). Alan Greenspan gave us asset bubbles while warning about "irrational exuberance". Now, "Helicopter Ben" Bernanke gives us "unusual uncertainty" and "quantitative easing" (QE).
If you missed your class on QE, here's a crash course. It refers to a series of extraordinary measures that the FED is prepared to undertake to stimulate the economy. Bernanke earned his nickname by saying that the FED was prepared to throw money out of helicopters if that's what it took.
If the FED has been trying to inject liquidity into the system, they've done one helluva lousy job. The broadest measures of money supply, known as M2 and M3, are plunging at record rates. In fact, they are at Great Depression levels of reduction. Bernanke is an academic and a student of the Great Depression. Specifically, his interest has been to attempt to understand what went wrong. So, the helicopter plan was borne out of this knowledge, although clearly he was being figurative and not literal.
The dropping money supply, however, is probably not entirely Bernanke or the FED's fault. An uncontrollable variable, called "velocity", is providing a stiff headwind against the FED's efforts. Velocity is a measure of the rate at which money circulates. If everyone were to put their savings under the mattress, for example, velocity would be zero. On the other hand, if folks were to be engaging in a lot of transactions and borrowing to finance growth, velocity would be high.
Velocity is hard to control, since it's the result of trillions of personal decisions. It is a function of consumer and business confidence. Low confidence equals high risk aversion and no willingness to expand, therefore, low velocity.
It is believed that the FED will monetize its mortgage portfolio and use the proceeds to purchase long term U.S. Treasury Bonds. That will do absolutely NOTHING to increase velocity. In fact, interest rates are at generational lows already, and may go lower if the economic downturn intensifies as we expect. Japan, a decent analog, has sub 1% long term rates.
Using FED funds to purchase Treasury Bonds is nothing more than a monetization of the U.S. budget deficit, now running at $1.5 trillion per year.
Unfortunately, the FED is powerless. Yes, you read that right. The FED is virtually powerless. They can't reduce rates which are already near zero. Any policy moves like changing reserve requirements or Open Market Operations will have absolutely no effect in the current business climate. To be effective, the budget needs to be brought under control, jobs need to be created and confidence needs to be restored. However, none of those can happen as long as the FED is powerless to stimulate the economy. The very definition of a vicious cycle if I ever heard one.
We are facing an impending economic death sentence. The only remaining question is whether we die by lethal injection, electrocution or hanging.
Marko's Take
On Sunday August 22nd, I would like to invite any Southern California readers to join me for an event sponored by the California Wildlife Center, called "The "Wild Brunch: Fawntasia". For more information on this organization and to purchase tickets for the event, click here http://cwcthewildbrunch12.eventbrite.com/.
If you missed your class on QE, here's a crash course. It refers to a series of extraordinary measures that the FED is prepared to undertake to stimulate the economy. Bernanke earned his nickname by saying that the FED was prepared to throw money out of helicopters if that's what it took.
If the FED has been trying to inject liquidity into the system, they've done one helluva lousy job. The broadest measures of money supply, known as M2 and M3, are plunging at record rates. In fact, they are at Great Depression levels of reduction. Bernanke is an academic and a student of the Great Depression. Specifically, his interest has been to attempt to understand what went wrong. So, the helicopter plan was borne out of this knowledge, although clearly he was being figurative and not literal.
The dropping money supply, however, is probably not entirely Bernanke or the FED's fault. An uncontrollable variable, called "velocity", is providing a stiff headwind against the FED's efforts. Velocity is a measure of the rate at which money circulates. If everyone were to put their savings under the mattress, for example, velocity would be zero. On the other hand, if folks were to be engaging in a lot of transactions and borrowing to finance growth, velocity would be high.
Velocity is hard to control, since it's the result of trillions of personal decisions. It is a function of consumer and business confidence. Low confidence equals high risk aversion and no willingness to expand, therefore, low velocity.
It is believed that the FED will monetize its mortgage portfolio and use the proceeds to purchase long term U.S. Treasury Bonds. That will do absolutely NOTHING to increase velocity. In fact, interest rates are at generational lows already, and may go lower if the economic downturn intensifies as we expect. Japan, a decent analog, has sub 1% long term rates.
Using FED funds to purchase Treasury Bonds is nothing more than a monetization of the U.S. budget deficit, now running at $1.5 trillion per year.
Unfortunately, the FED is powerless. Yes, you read that right. The FED is virtually powerless. They can't reduce rates which are already near zero. Any policy moves like changing reserve requirements or Open Market Operations will have absolutely no effect in the current business climate. To be effective, the budget needs to be brought under control, jobs need to be created and confidence needs to be restored. However, none of those can happen as long as the FED is powerless to stimulate the economy. The very definition of a vicious cycle if I ever heard one.
We are facing an impending economic death sentence. The only remaining question is whether we die by lethal injection, electrocution or hanging.
Marko's Take
On Sunday August 22nd, I would like to invite any Southern California readers to join me for an event sponored by the California Wildlife Center, called "The "Wild Brunch: Fawntasia". For more information on this organization and to purchase tickets for the event, click here http://cwcthewildbrunch12.eventbrite.com/.
Wednesday, July 7, 2010
Hindenburg Omen Confirmed... Or, Was It?
The Hindenburg Omen (HO) was described in yesterday's blog. For more on how it works, click here http://markostake.blogspot.com/2010/07/hindenburg-omen-foretells-coming-market.html.
For the HO to be confirmed, it must happen at least twice in a 36-day window. Did we get confirmation today? Well, that's a tough one. According to Yahoo Finance, there were 102 new highs and 85 new lows out of 3,946 issues traded. That means that the new highs test was met, but the new lows test came in at 2.155% of issues traded. The trigger criteria calls for 2.2%. Are we supposed to round up?
But, the HO is not nearly the only reason to fear a market meltdown. There are a whole slew of others. Some are out there, some are not.
A man named Steve Puetz (pronounced "pits") is a student of stock market crashes. He has concluded that solar eclipses combined with full moons were somehow connected to the timing of market crashes. He does NOT suggest that full moons close to solar eclipses cause market crashes. But, his research does demonstrate that a full moon occurring close to a solar eclipse, in particular, seems to affect investor psychology in such a way as to transform investor emotions into panic.
His research found that 8 of the greatest market crashes in history fell within a time period of 6 days before, to 3 days after, a full moon that occurred within 6 weeks of a solar eclipse. Yes, you read that right!
Could this be random? Statistically, he found that for all 8 crashes to accidentally fall within the required intervals would be less than one chance in 127,000.
It's important to understand that EVERY solar eclipse must, by definition, occur within six weeks of a full moon, which occurs every 4 weeks. The combination does NOT mean a waterfall decline will ensue, but it does suggest a timing window, should one occur.
Now, here's where things get verrrrry interesting, as Arte Johnson would say. In the year 2010, there are only 2 solar eclipses: One occurred in January, and the only other one will occur on July 11! The next full moon occurs on July 26th, with one to follow on August 24th. So, if we combine the research of Robert McHugh with that of Steve Puetz, this would suggest that a crash could occur at anytime!
Don't buy that one? I don't blame you. But, there is a lot more.
Dow Theory holds that when the Industrials make a new low confirmed by a new low in either the Transportations or the Utilities, a new bear market has been indicated. This signal has been given. Dow Theory does NOT predict crashes, just suggests that the primary direction of the market is down.
Let's not forget the horrific plunge in the nation's money supply. According to adjusted numbers crunched by John Williams of ShadowStats, inflation-adjusted M3 is declining at an annualized rate of 5.9%, the steepest since the Great Depression. This drop reflects sharply reduced lending by financial institutions and foresages extreme problems in the banking sector.
According to Williams, whenever real annual M3 growth has turned negative, the economy has followed. Every time real M3 has contracted, the economy has fallen into recession shortly thereafter, or, as in the case of the 1973 to 1975 recession, where the M3 contraction took place after the recession had started, the existing downturn has intensified. Double dip, anyone?
Ignore this at your market peril.
Marko's Take
For the HO to be confirmed, it must happen at least twice in a 36-day window. Did we get confirmation today? Well, that's a tough one. According to Yahoo Finance, there were 102 new highs and 85 new lows out of 3,946 issues traded. That means that the new highs test was met, but the new lows test came in at 2.155% of issues traded. The trigger criteria calls for 2.2%. Are we supposed to round up?
But, the HO is not nearly the only reason to fear a market meltdown. There are a whole slew of others. Some are out there, some are not.
A man named Steve Puetz (pronounced "pits") is a student of stock market crashes. He has concluded that solar eclipses combined with full moons were somehow connected to the timing of market crashes. He does NOT suggest that full moons close to solar eclipses cause market crashes. But, his research does demonstrate that a full moon occurring close to a solar eclipse, in particular, seems to affect investor psychology in such a way as to transform investor emotions into panic.
His research found that 8 of the greatest market crashes in history fell within a time period of 6 days before, to 3 days after, a full moon that occurred within 6 weeks of a solar eclipse. Yes, you read that right!
Could this be random? Statistically, he found that for all 8 crashes to accidentally fall within the required intervals would be less than one chance in 127,000.
It's important to understand that EVERY solar eclipse must, by definition, occur within six weeks of a full moon, which occurs every 4 weeks. The combination does NOT mean a waterfall decline will ensue, but it does suggest a timing window, should one occur.
Now, here's where things get verrrrry interesting, as Arte Johnson would say. In the year 2010, there are only 2 solar eclipses: One occurred in January, and the only other one will occur on July 11! The next full moon occurs on July 26th, with one to follow on August 24th. So, if we combine the research of Robert McHugh with that of Steve Puetz, this would suggest that a crash could occur at anytime!
Don't buy that one? I don't blame you. But, there is a lot more.
Dow Theory holds that when the Industrials make a new low confirmed by a new low in either the Transportations or the Utilities, a new bear market has been indicated. This signal has been given. Dow Theory does NOT predict crashes, just suggests that the primary direction of the market is down.
Let's not forget the horrific plunge in the nation's money supply. According to adjusted numbers crunched by John Williams of ShadowStats, inflation-adjusted M3 is declining at an annualized rate of 5.9%, the steepest since the Great Depression. This drop reflects sharply reduced lending by financial institutions and foresages extreme problems in the banking sector.
According to Williams, whenever real annual M3 growth has turned negative, the economy has followed. Every time real M3 has contracted, the economy has fallen into recession shortly thereafter, or, as in the case of the 1973 to 1975 recession, where the M3 contraction took place after the recession had started, the existing downturn has intensified. Double dip, anyone?
Ignore this at your market peril.
Marko's Take
Thursday, May 27, 2010
Plunging Money Supply Has Ominous Implications
The lifeblood of the world financial system is money. When there's more of it sloshing around, times are typically good unless there TOO much of it, causing inflation. Econometric studies have shown that of the 10 components of the Index Of Leading Economic Indicators (LEI), 2 are the most predictive of future economic activity: growth in the Money Supply and changes in the Stock Market.
It can be argued, quite convincingly, that the Stock Market is itself is highly dependent on growth in money. In fact, it's possible, that ALL 10 components of the LEI are driven by growth in money.
The money supply is SCREAMING! Is anyone out there listening?
The broadest measure of money, called M3, is contracting at an accelerating rate that now rivals the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal orgy in history.
The M3 figures - which include a broad range of bank accounts and are tracked by monetarists for warning signals about the direction of the US economy a year or so in advance - began shrinking last summer. The pace has since quickened.
The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6%. The assets of insitutional money market funds fell at a 37% rate, the sharpest drop ever. While a rising money supply does not always translate into boom times, a FALLING M3 has historically ALWAYS been followed by an economic contraction and a falling stock market.
Record stimulus spending has been an utter failure in triggering job growth and has barely produced any economic recovery. First quarter Gross Domestic Product (GDP) was revised lower to 3% from 3.2% this morning. The economy has lost more than 8 million jobs since the downturn began.
The Obama Administratio has an entirely different explanation for the failure of stimulus measures to produce the hoped for results. They are opting instead for further doses of Keynesian spending, despite warnings from the IMF that the gross public debt of the US will reach 97% of GDP next year and 110% by 2015.
Larry Summers, President Barack Obama’s top economic adviser, has asked Congress to approve another $200 billion stimulus package to produce economic growth.
Federal Reserve head Ben Bernanke no longer pays attention to the M3 data. The bank stopped publishing the data five years ago, considering it too erratic to be of much value.
Mr. Bernanke has conveniently forgotten that double-digit growth of M3 during the US housing bubble gave clear warnings that the boom was out of control. The sudden slowdown in M3 in early to mid-2008 - just as the Fed talked of raising rates - gave a very clear warning that the economy and stock markets were about to go into freefall.
The White House appears to have reversed course just weeks after Mr Obama vowed to rein in a budget deficit of $1.5 trillion (9.4% of GDP) this year and set up a commission to target cuts. Mr. Obama, clearly a reader of "Marko's Take", has now understood that the second dip of this Double-Dip Hyperinflationary Depression is imminent.
The dominant voices in US policy-making, Nobel laureates Paul Krugman and Joe Stiglitz, as well as Mr Summers and Fed chair Ben Bernanke are all Keynesians who reject monetary theory and have an extreme distaste to any mention of the quantity of money. Once they read "Marko's Take", perhaps they ought to open up their copies of "The Monetary History of the United States" by Milton Friedman and Anna Schwartz.
The die is cast. The crash in M3 has ominous implications. It means the second dip is imminent, the stock market will have trouble and on the plus side, interest rates will NOT rise for a long time.
Marko's Take
Interested in ideas on how to fix Social Security? "Social In-Security: The Solution" will be posted in the next 24-48 hours. To familiarize yourself with the ponzi scheme called Social Security, please check out our video entitled "Social In-Security: The Problem" by clicking here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI.
It can be argued, quite convincingly, that the Stock Market is itself is highly dependent on growth in money. In fact, it's possible, that ALL 10 components of the LEI are driven by growth in money.
The money supply is SCREAMING! Is anyone out there listening?
The broadest measure of money, called M3, is contracting at an accelerating rate that now rivals the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal orgy in history.
The M3 figures - which include a broad range of bank accounts and are tracked by monetarists for warning signals about the direction of the US economy a year or so in advance - began shrinking last summer. The pace has since quickened.
The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6%. The assets of insitutional money market funds fell at a 37% rate, the sharpest drop ever. While a rising money supply does not always translate into boom times, a FALLING M3 has historically ALWAYS been followed by an economic contraction and a falling stock market.
Record stimulus spending has been an utter failure in triggering job growth and has barely produced any economic recovery. First quarter Gross Domestic Product (GDP) was revised lower to 3% from 3.2% this morning. The economy has lost more than 8 million jobs since the downturn began.
The Obama Administratio has an entirely different explanation for the failure of stimulus measures to produce the hoped for results. They are opting instead for further doses of Keynesian spending, despite warnings from the IMF that the gross public debt of the US will reach 97% of GDP next year and 110% by 2015.
Larry Summers, President Barack Obama’s top economic adviser, has asked Congress to approve another $200 billion stimulus package to produce economic growth.
Federal Reserve head Ben Bernanke no longer pays attention to the M3 data. The bank stopped publishing the data five years ago, considering it too erratic to be of much value.
Mr. Bernanke has conveniently forgotten that double-digit growth of M3 during the US housing bubble gave clear warnings that the boom was out of control. The sudden slowdown in M3 in early to mid-2008 - just as the Fed talked of raising rates - gave a very clear warning that the economy and stock markets were about to go into freefall.
The White House appears to have reversed course just weeks after Mr Obama vowed to rein in a budget deficit of $1.5 trillion (9.4% of GDP) this year and set up a commission to target cuts. Mr. Obama, clearly a reader of "Marko's Take", has now understood that the second dip of this Double-Dip Hyperinflationary Depression is imminent.
The dominant voices in US policy-making, Nobel laureates Paul Krugman and Joe Stiglitz, as well as Mr Summers and Fed chair Ben Bernanke are all Keynesians who reject monetary theory and have an extreme distaste to any mention of the quantity of money. Once they read "Marko's Take", perhaps they ought to open up their copies of "The Monetary History of the United States" by Milton Friedman and Anna Schwartz.
The die is cast. The crash in M3 has ominous implications. It means the second dip is imminent, the stock market will have trouble and on the plus side, interest rates will NOT rise for a long time.
Marko's Take
Interested in ideas on how to fix Social Security? "Social In-Security: The Solution" will be posted in the next 24-48 hours. To familiarize yourself with the ponzi scheme called Social Security, please check out our video entitled "Social In-Security: The Problem" by clicking here http://www.youtube.com/markostaketv#p/u/0/twFn9XyP2rI.
Wednesday, May 19, 2010
Is The Second Dip Imminent?
For a while, we have expected the "Second Dip" of this Double-Dip Hyper-Inflationary Depression to materialize. It sure looks like it's here.
While the economic statistics suggesting at least some economic recovery continue to pour in, behind the numbers, a much darker picture is being drawn.
The main culprit in the imminent downturn is the ongoing systemic evaporation of liquidity. The canaries in the coal mine are the world stock markets, which have suddenly begun to plunge precipitously along with world credit markets.
In addition, there are plenty of excellent and accurate leading indicators that have been screaming that a more vigorous downturn is immediately ahead.
The most ominous is the unprecedented shrink in the broad aggregates of our money supply.
Real M3, the broadest measure of money and liquidity has dropped by an unprecented 7% in the last 12 months, according to Shadow Stats (http://www.shadowstats.com/). While there have been instances when the economy has fallen into recession without money supply contracting first, there are NO examples of a prolonged drop in money which has NOT been followed by a sharp economic crunch.
Whenever real M3 has contracted on a year-to-year basis, the economy always has followed, either falling into recession, or if already in recession, intensifying. If liquidity contracts, the broad economy will inevitably suffer. The present contraction in broad liquidity is the deepest of the post-World War II era. Historically, the lead time between the liquidity signal and economic activity is roughly six-to-nine months.
A major component of money creation is the Commercial and Industrial Loan market, which according to the Federal Reserve Board, has fallen by a mind-numbing 25% from its peak in late 2008! If the economy were truly healthy and business expanding, this data set would be turning up rather than plunging. Commercial Paper outstanding has dropped by a staggering 50% since its peak in 2007!
These are both foretelling more problems in the banking sector with the reductions demonstrating just how poor the condition of the credit markets are.
The other issue to consider is that the Obama Adminstration, Federal Reserve (FED) and Department of Treasury are completely out of bullets. Given the combination of extra-ordinary stimulus packages, ZERO interest rates and aggressive market bail-outs like TARP, the economy ought to be humming along. At this point, there are few options left.
Add to that, the meltdown in Sovereign Debt in Europe, the massive worldwide budget deficits and runaway entitlement programs and it's obvious that further policy measures are not likely to be successful without experiencing a very painful period of economic adjustment.
One must ask the obvious question. Will the economic downturn bring down hard assets like GOLD? Temporarily perhaps, but ultimately the financial authorities will be forced to employ more desperate measures to restore liquidity. These measures will absolutely spark the embers of hyper-inflation which will provide a very beneficial environment to trigger the next mania in precious metals and the underlying mining stocks.
Marko's Take
For our solution to the Budget Deficit, we proposed a two-part program last weekend. The blogs can be read by clicking http://markostake.blogspot.com/2010/05/fixing-budget-mess-part-1-negative.html and http://markostake.blogspot.com/2010/05/fixing-budget-deficit-part-2.html.
While the economic statistics suggesting at least some economic recovery continue to pour in, behind the numbers, a much darker picture is being drawn.
The main culprit in the imminent downturn is the ongoing systemic evaporation of liquidity. The canaries in the coal mine are the world stock markets, which have suddenly begun to plunge precipitously along with world credit markets.
In addition, there are plenty of excellent and accurate leading indicators that have been screaming that a more vigorous downturn is immediately ahead.
The most ominous is the unprecedented shrink in the broad aggregates of our money supply.
Real M3, the broadest measure of money and liquidity has dropped by an unprecented 7% in the last 12 months, according to Shadow Stats (http://www.shadowstats.com/). While there have been instances when the economy has fallen into recession without money supply contracting first, there are NO examples of a prolonged drop in money which has NOT been followed by a sharp economic crunch.
Whenever real M3 has contracted on a year-to-year basis, the economy always has followed, either falling into recession, or if already in recession, intensifying. If liquidity contracts, the broad economy will inevitably suffer. The present contraction in broad liquidity is the deepest of the post-World War II era. Historically, the lead time between the liquidity signal and economic activity is roughly six-to-nine months.
A major component of money creation is the Commercial and Industrial Loan market, which according to the Federal Reserve Board, has fallen by a mind-numbing 25% from its peak in late 2008! If the economy were truly healthy and business expanding, this data set would be turning up rather than plunging. Commercial Paper outstanding has dropped by a staggering 50% since its peak in 2007!
These are both foretelling more problems in the banking sector with the reductions demonstrating just how poor the condition of the credit markets are.
The other issue to consider is that the Obama Adminstration, Federal Reserve (FED) and Department of Treasury are completely out of bullets. Given the combination of extra-ordinary stimulus packages, ZERO interest rates and aggressive market bail-outs like TARP, the economy ought to be humming along. At this point, there are few options left.
Add to that, the meltdown in Sovereign Debt in Europe, the massive worldwide budget deficits and runaway entitlement programs and it's obvious that further policy measures are not likely to be successful without experiencing a very painful period of economic adjustment.
One must ask the obvious question. Will the economic downturn bring down hard assets like GOLD? Temporarily perhaps, but ultimately the financial authorities will be forced to employ more desperate measures to restore liquidity. These measures will absolutely spark the embers of hyper-inflation which will provide a very beneficial environment to trigger the next mania in precious metals and the underlying mining stocks.
Marko's Take
For our solution to the Budget Deficit, we proposed a two-part program last weekend. The blogs can be read by clicking http://markostake.blogspot.com/2010/05/fixing-budget-mess-part-1-negative.html and http://markostake.blogspot.com/2010/05/fixing-budget-deficit-part-2.html.
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