United States Heading towards a Depression?

(Coin Shortage Means a Penny Could Be Worth 5 Cents Soon)

Francois Velde, senior economist at the Chicago FED said that the best solution would be to "rebase" the penny by making it worth five cents rather than one cent.

http://www.foxnews.com/story/0,2933,247479,00.html

 

This is how all empires fall. When the Imperial Banks start to clip the coins...

 

Have any of you read Ugly Americans by Ben Mezrich? About some hedge funds that make all kinds of money in Japan / Singapore / China. It is an account of a trader who worked for a few firms, and actually worked for Nick Leeson (He was responsible for the bankruptcy of Barings Bank). But overall a very good book even if you are not into stock markets and all. Details all of their exploits.

I recommend it, I just read it in a few hours, couldn't put it down.

 

The 1999 Wide "AM" Reverse Lincoln Cent can be worth as much as $600. I found a 1969-S Lincoln Cent next to my pc but damn it's not the Doubled Die Obverse which is worth $35,000.

Here's some good ones

2004-D Wisconsin State Quarter With an Extra Leaf
Approximate Value: $200-$300 in MS-60 or so.

2005-D Speared Bison Reverse New Design Jefferson Nickel
Approximate Value: From $75 in AU-50 to $1,400 in MS-66

State Quarter Die Axis Rotation Errors
Approximate Value: Full 180 degree rotations are worth about $20 in EF-45 or so. Lesser rotations are worth much less.

1995 and 1995-D Doubled Die Obverse Lincoln Cents
Approximate Value: About $20 to $75 in AU-50, more in higher grades.

http://coins.about.com/od/uscoins/tp/errorvarieties.htm

 

2% of the population actually throws pennies into the trash!

 

Yeah, but monkeys throw their feces, so this really shouldn't surprise us!

 

Pizza makers in a pinch over rising wheat prices - soaring grain costs driving up the price of pizza

Spring wheat for March delivery fell $1.75 Thursday to close at $18.25 a bushel on the Minneapolis Grain Exchange. It traded as high as $25 a bushel this week. Wheat historically trades at $3 to $7 a bushel.



Pizza makers have seen their cheese costs soar this year from $1.30 a pound to $1.76 a pound. Even worse, the flour used to make the dough has gone from $3-$7 dollars a bushel to $25 a bushel in less than a year.
Beer makers have been forced to raise their prices because of the skyrocketing price of hops – one of the principle ingredients. The price of hops has gone from about $4 a pound in September to $40 a pound. The price of barley, beer’s other main ingredient, has nearly doubled.

Bagel shops have struggled to hold the line on prices and keep their customers. The exploding wheat prices have made the $1 bagel a fact of life in big cities such as New York. Donuts are averaging $1.50. And many shop owners fear a wheat shortage will drive prices even higher.

http://www.msnbc.msn.com/id/23396365/

 

Maybe finally fat America will wake up and realize there's a problem?

Nah who am I kidding, they'll just scurry closer to Big Brother.

 

Sometimes, you just have to laugh...

 

Sovereign Funds May Not Save Citigroup

These banks have some serious capital problems, while Bernanke is trying to solve a liquidity problem, fun. I've been preaching how worthless Citigroup and Lehman Bros. are, and they just drop precipitously. I wonder how much money these funds have lost due to these stock price drops.


Fed Chief: Mortgage Crisis to Continue

 

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/03/ccview103.xml

Excerpt

HAHA! An Austrian Purge! I love it.

 

I see three primary reason for the subprime mess 1) the appraisal are bad 2) little or no down payments 3) unqualified buyers

Bernanke can do all he want but the bottom line is that the Banks made loans for too much (with no down payments ) to people that can't afford it.
1.5 million subprime loans are resetting to 9%+. Trying to solve the problem with inflation and a dollar crash will cause more people to default as their income is reduced due to inflation.

The next key date is the March 18 FED meeting. If Bernanke does as expected the FED will lower rates 3/4% which will lower the FED rate to 2.25%

The ECB rate will be 2% higher and the dollar is sure to loss more ground against the yen and euro.

Infaltion is running 4.1% and a FED rate of 2.25% is sure to add more points to the inflation rate.

Lastly China is getting killed with the 7.14 yuan to dollar rate and food prices are rising 10%+ in China. The Chinese at some point will be forced to revalue causing even greate US inflation at a Walmart near you.

 

That and these straw buyer scams no one is talking about or including in the equation. A lot of out of state banks lent money to buyers/developers for house flipping.. Meanwhile the banks never bothered to get their own appraisals, much less look at the actual house. In one case here in Lake Geneva 12 homes were involved. That meant, appraiser made money, developer made money, broker made money, etc., etc.. Buyers lost money, banks lost money and homes mysteriously burned to the ground.. At least in this case one of the guys involved is going to a federal fuck me the a$$ prison as a result.

Moral? Only stupid people lose money.

 

I have a question for the economic experts on this thread..

If and when we reach a depression, how long from now would that be approximately? Months, years?

 

wow? some buyer(s) burned the houses? seriously? man, the fee guys should get some of that prison time also!

Flipping is done all the time with more liquid investments. Flipping properties in real estate has an added risk in that property is less liquid.

That same group of flippers might have made money 3 or 4 times earlier in the cycle. That same group of fee guys might have orchestrated several earlier flips.

but arson....ugh.

 

I wouldn't say a Depression is imminent, but you can kiss short term prosperity goodbye, and with our long term entitlement obligations, this could be the long slow decline of the empire.

Things may never be "as good as they used to be".

But to put dates on it, no one can tell for sure. Typically, it takes 6 months for credit injections to manifest themselves. Based on the article I posted earlier, which has a very important graph, we are not even halfway through the sub-prime meltdown yet. In fact, the FED rate adjustments might prove to be a killing blow if we are in hyperinflation by the end of the summer.

Be careful, because the MSM and government are working very hard to overhaul the english language, to remove words like recession or depression from the popular vernacular when discussing the current and continuing condition.

I think a Depression is possible, but unlikely because there are too many boom economies outside the US to have it become a global cascade.

No, stupid people use the ballot box to make sure the smart people pay as well. Politicians love playing to a crisis, eroding the good decisions of the few, to win the votes of the many. Remember, socialism doesn't reward smart decisions or punish bad ones. It makes us all equal, regardless of how we perform.

That's why the government has been pushing to give houses to people who are credit risks to begin with. More pandering, more moral hazard.

 

I think you might have missed the point here.. These flippers were not paying the mortgages back..

 

I got it. The flippers walked on the mortgages? Was one of the flippers the arsonist?