United States Heading towards a Depression?

Silver has been going strong and if you want in on the action try SLV.

 

The FED is adding $60 Billion a month through bi-monthy auctions of 30 Billion. No wonder the dollar is tanking and commodity prices are going through the roof. It's starting to look the the 1970s all over again.

The Fed said it will make $30 billion available to cash-strapped banks at each of two auctions, on March 10 and 24.

The central bank has held six auctions so far, two each in December, January and February, providing $160 billion in extra reserves through short-term loans to cash-strapped banks.

In its announcement Friday, the central bank said that it intended to keep holding the auctions every two weeks "for as long as necessary to address elevated pressures" in the credit markets.

http://news.yahoo.com/s/ap/20080229/ap_on_bi_ge/fed_credit_crisis;_ylt=AiF2J6vq0eRp2O5D6y3jevOyBhIF

 

The DJ is only a reaction and not really a good metric of the difficulty facing economy.

Consumer spending is bound to increase but most of the gains are due to inflation.

This is an election year and the Fed is a political animal. The most likely time for a recession is after a lame duck president leaves office.

 

Bernanke is walking a tightrope between recession or inflation.

Another good article:
http://dss.ucsd.edu/~jhamilto/jdh_comments.html

 

Good quote from the first article:

A country that will not accept the possibility of a small recession will end up having a big one when the politicians at last respond to the public's complaints about inflation.

 

The DJ is also taking a hit due to the decline in the 'carry trade' The yen went to 103 per dollar today. Japanese investors are moving currency into Europe, Australia and New Zeland where the rate of return is higher.

 

Are the prices of food going up because of the price of oil?

I'm not as economically superior as you all.. Does that mean the "perfect storm" is nearing?

Guess that also means Hawaii is screwed.

 

There's a world wide wheat shortage caused by supply shortages and increased demand.

http://cid-yama.livejournal.com/113065.html

 

Warren Buffett has released his annual shareholder letter, here it is (PDF):
http://www.berkshirehathaway.com/letters/2007ltr.pdf

They are always good reads.

And if you want to read his previous ones they are here:
http://www.berkshirehathaway.com/letters/letters.html

 

I believe the current economic crisis is more like the inflationary period of the 1970's and early 1980s.

Subprime is the new Third World Debt crisis of the 1970's and 1980's

Just like the 70's commodities prices are going sky high. Even like the 1970's the US cent is becoming worth more than melt value. I'm thinking about hording pennies as opossed to gold.

$100 1982-2008 Lincoln Zinc Cent - Melt Value $71.11
$100 1909-1982 Lincoln Copper Cent - Melt value $255.45

Coin Metal Value Calculator (useful tool to calcualte the melt value of your change)
http://www.coinflation.com/coins/basemetal_coin_calculator.html

 

LOL, coinflation! I spent 2 hours the other night sorting change for silver content.

If anyone knows where I can get info on melting, green rep will be the reward!

 

$100 1946-2008 Jefferson Nickel - Total melt value is $140.85.

http://www.coinflation.com/coins/basemetal_coin_calculator.html

Hoarding nickels actually looks interesting. The melt value is 40% more than the face value.

Statistics:

» There are 16.5347 pounds of copper and 5.5116 pounds of nickel in $100 face value of nickel(s).

» A roll of nickel(s) has 40 coins and is valued at $2.82 when copper is at $3.8574 / lb and nickel at $13.9827 / lb (exact value is $2.8169455295919).

 

I'm laughing on this one. Travelers may legally carry up to $5 in 1- and 5-cent coins out of the USA

the value of the metal in a nickel is now 6.99 cents, while the penny's metal is worth 1.12 cents, according to the U.S. Mint.

Under the new rules, it is illegal to melt pennies and nickels. It is also illegal to export the coins for melting. Travelers may legally carry up to $5 in 1- and 5-cent coins out of the USA or ship $100 of the coins abroad "for legitimate coinage and numismatic purposes."

Violators could spend up to five years in prison and pay as much as $10,000 in fines. Plus, the government will confiscate any coins or metal used in melting schemes.

http://www.usatoday.com/money/2006-12-14-melting-ban-usat_x.htm

 

I know that.

I was just curious about melting, I would *never* melt down $30 in change.

Besides, if there is martial law, all bets are off.