Good morning from Cape Town

It’s Earnings, Stupid! Or so it seemed during the past week as the stock market took its cue from a host of better-than-feared earnings reports, propelling the S&P 500 Index 4.3% higher – a bigger gain than for the entire 2007. And what a swift turnaround it was after the market got “GE’d” and was in sackcloth and ashes by the close of the previous week!

Read all about this in my weekly blog post, highlighting some thought-provoking news items and quotes from market commentators during the past week.

Here is the link to the “Words from the Wise”: http://tinyurl.com/3lwxlj

Enjoy the read.

Bill/All,

What's the real story behind this article. Anyone care to guess?

Citibank: To Stop Making Obligatory Precious Metals MarketsLast update: 4/21/2008 6:02:42 AMLONDON (Dow Jones)--Citibank has stopped making obligatory precious metals markets for other banks but is continuing its precious metals business for customers, a spokesman for Citibank, a subsidiary of Citigroup Inc. (C), said Monday. "We continue to make aggressive markets in precious metals for our customers, and when it suits us we will also make markets for our competitors. We are no longer going to be part of the obligatory market-making scheme for our competitors," Citibank spokesman Jeffrey French told Dow Jones Newswires. The bank said it stopped making the obligatory spot, forwards and options markets for other banks since late autumn. Citibank services the precious metals markets 24 hours a day from its London and Singapore offices, the bank said. The bank said the changes were made due to balance sheet constraints and not related to subprime mortgage market losses and the changes haven't resulted in job losses. A message via the Reuters dealer

Last line my previous posting was truncated. It should continue to say...

A message via the Reuters dealer system was sent around out of Singapore earlier Monday to brokers.

BOE King: Rate Cuts May Be Passed On If MBS Scheme SucceedsLast update: 4/21/2008 5:50:38 AM
LONDON (Dow Jones)--

U.K. banks may pass recent cuts in the Bank of England's key interest rate on to borrowers if a new facility that will swap Treasury bills for mortgage-backed securities succeeds in restoring confidence in the banking system, BOE Governor Mervyn King said Monday. Speaking to reporters after the scheme was unveiled, King said its launch wasn't conditional on U.K. banks speeding up the disclosure of impaired assets or raising new capital. And he rejected allegations that the BOE was belatedly bailing out the U.K.'s banks, arguing they have and will continue to pay the price for their investment decisions. "It is not the intention of the scheme to prevent desirable changes in the mortgage market from taking place," King said. "But it may make it more likely that rate changes by the Monetary Policy Committee feed through."

-Paul Hannon, Dow Jones Newswires; +44 20 7842 9491; paul.hannon@dowjones.com (END) Dow Jones NewswiresApril 21, 2008 05:50 ET (09:50 GMT)

Good morning.

There are no Cara 100 Ratings Changes to report at this time.

----------------------------------------------------

Have a great week.

Bill regarding Novartis and "Why didn’t Novartis post net earnings in “lc” (local currency)? Does the truth hurt?

They've been doing it this way for as long as I remember. No conspiracy theory here for this Quarter if you check back on past reports.

Report:

Shell energy scenarios to 2050

http://tinyurl.com/33ueqj

Bloomberg this morning:

Dennis Gartman, author of the $500/month Gartman Letter, said "he is abandoning ship on his outlook for higher gold prices"

expects gold to rise in price today and will sell on that rise

vinod- we agree on FXP, but not so sure about DUG/SMN-> i'm looking for another entry...

DCR-> will be liquidated june 25:

http://tinyurl.com/45byqh

hulbert: "So, for now at least, according to contrarian analysis, the sentiment winds are continuing to blow in the direction of a higher stock market."

http://tinyurl.com/48xghj

Re: falling currencies, aren't there really two mechanisms at work here? The first, and most obvious, is dilution, where the more they "create" the lower the value of each one.

But the second, less tangible and more insidious, is the devaluation of the whole fiat system, where the marketplace simply has less faith in the assets of the issuers. So regardless of how many units are out there, the totality of them is worth less.

It strikes me as a race between the two. On the one hand, the dilution is inflating all asset prices, while the devaluation is shrinking the values of those assets in real terms.

I've been thinking a lot about this lately, and what I want to know is, Am I stumbling ignorantly onto Econ 600, or am I just howling at the moon?

UYG- in at 32.23

SMN at 30.14...

bet is financials up, commodities down...

WFC down on Meredith Whitney call they may be under-reserved...picking some up at 29.42...

As is usually the case in NY, gold and silver have again been forced off a cliff. This is even despite a weaker USD this morning. I guess the golden alarm bell had to be disconnected again after the worrying results from Bank of America and National City were issued.

is anybody having trouble connecting with KCAST?

anyone see DJIA 13000/SPY 140 before the week is out?

Re: POG

I generally take it that the price fundamentals are linked to moves in world currencies against the dollar. It will probably take the entirety of this week in particular for the ¥/$ trade to establish a bottom before moving higher.

It seems that an "inverse" hard money situation is occurring in the forex, since any addition of liquidity seems to bolster a basket of world currencies against the $US.

Any central bank could add liquidity while offloading fiat depreciation risk onto the dollar. I would have though that the ¥ leading higher would have dragged the dollar with it, but that certainly hasn't been the case.

Beware talking heads everywhere, not just Financial Entertainment TV:
http://tinyurl.com/3l36dz
NT Times:
"By early 2002, detailed planning for a possible Iraq invasion was under way, yet an obstacle loomed. Many Americans, polls showed, were uneasy about invading a country with no clear connection to the Sept. 11 attacks. Pentagon and White House officials believed the military analysts could play a crucial role in helping overcome this resistance.

Torie Clarke, the former public relations executive who oversaw the Pentagon’s dealings with the analysts as assistant secretary of defense for public affairs, had come to her job with distinct ideas about achieving what she called “information dominance.” In a spin-saturated news culture, she argued, opinion is swayed most by voices perceived as authoritative and utterly independent.

And so even before Sept. 11, she built a system within the Pentagon to recruit “key influentials” — movers and shakers from all walks who with the proper ministrations might be counted on to generate support for Mr. Rumsfeld’s priorities.

In the months after Sept. 11, as every network rushed to retain its own all-star squad of retired military officers, Ms. Clarke and her staff sensed a new opportunity. To Ms. Clarke’s team, the military analysts were the ultimate “key influential” — authoritative, most of them decorated war heroes, all reaching mass audiences."

Re: Information Dominance

It could only occur in a country whose media is financially controlled by a very narrow interest.

2nd: look at the long bond ETF (IEF).....it tells the story lately.

Anyone following TSL? Looks like some interesting earnings/prospects. Any Caraistas with more info?

I listened to Don Coxe's most recent weekly webcast this weekend. Having never listened to him before, I must say how impressed I was with his no-spin outlook. He was very clear in identifying long-term market trends.

One his main concerns for the future was an outlook for increased electricity prices that has not yet manifested itself. As an employee in the utility industry, I can say that I agree with this outlook - as far as electricity is concerned, consumers are living on borrowed time. Electricity is a bargain at the moment. I see much higher prices in the future.

Re: Don Coxe

For most countries which haven't seen currency depreciation, inflation is less of a problem because of the ability to export fiat currency risk to the $US, but inflation is till there since the housing bubble is just beginning to roll over with its high prices, so this means more foreign capital going into commodities-related investment.

Goldman updated his best picks in solar in China: (STP) and said it likes SPWR with $105 target price
http://wallastoninvestments.com/monday-morning

Re: POG

(once again, sorry)

If I were the Federal Reserve, I would seriously consider my new role as the newly-ordained primary monopoly broker for all comers and release the parking-brake when it comes to gold prices, and throw the rear view mirror out the window. This would hand a round, black object with a burning wick into the hands of foreign central banks.

But I wouldn't do that until the last gasp in treasury bill declines occurred.

Just speculatin' is all I'm sayin'.

I am looking at the bond ETF's, with the idea of going long till interest rates go up, maybe in some weeks or months.

Comments, reactions?

RE: Don Coxe

http://tinyurl.com/5xpn38

Look at the most recent EIA data on coal exports from the U.S. Up 20% YOY as of end of 2007. The problem here is that most of the U.S. baseload power production uses domestic coal supplies denominated in dollars. With the declining USD, foreign countries are purchasing more and more of our domestic coal supply as inflation runs rampant. But b/c many U.S. electric companies are still working off market hedges, the true electric prices (based on the current price of coal) are not fully realized just yet.

Also, most utilities are granted fixed rates of return by state governments, which are in denial about the true economic costs of delivering electric generation and planning new supplies. In many states, government efforts to suppress returns for utilities are causing market impediments that could wreak some serious havoc down the road. Many states are failing to encourage necessary levels of competition into the market.

It sure would have been nice if some of our politicians had used taxpayer dollars over the last decade to help fund costs of licensing the U.S.'s next round of nuclear reactors instead of burning all our cash on colonial crusades in the middle east. But none of our politicians want to plan more than a couple years ahead, right?

Hi!

Fun quote:

"There are two sides of the balance sheet - the left side and the right side. In the case of US banks, on the left side, there is nothing right, and on the right side, there is nothing left!"

Listening to a talking head about the price of oil (he agrees on speculation versus the dollar) should be in the $85/bbl. area. However, consumption is definitely increasing in the emerging countries, especially those that subsidize oil, which gets me to the point I was trying to make yesterday. The floor on oil prices is rising, so even if the dollar strengthen at some point, it will likely bottom at some point above $80.

maromatics- LOL...could probably say the same about the two sides of the brain in reference to trading the market last week...

Big pensions slash stock investments...

"Instead of trying to gobble up big gains on the stock market, increasing numbers of the corporate sponsors of traditional pension plans are adopting a lower-risk strategy of only going for returns that match the plans' liabilities, according to a recently released study of pension funding."

http://tinyurl.com/3ssbbf

days like today test the mettle of gold investors,
especially gold stock investors.

violent corrections aside we are sitting several years since gold stocks had their epic run, gold is reacting poorly today and the US dollar isnt exactly pushing weight.

banks are up on the notion that all is well yet my bio-techs are sagging.

its one of those days where it feels as though everything is working agaist my investment thesis.

my main concern is that the Federal reserve gets their cake and eats it too in that they can still drop rates but the mere nod towards less or no future rate cuts will likely boost the dollar.

a dollar boost, a stock market rally led by the financials, supposedly good earnings from some tech names and commodities softening, other than oil... its a fiscal win win for the window dressers of the economy.

i need to take a break from watching the markets until gold either breaks above $960 on strenght from the miners, or we drop below $820-800 and a buy signal comes into play.

I topped of the U.TO position this morning - averaged in my position at 8.50 CAD so slightly underwater.

Chart is looking solid today. If it holds strong today it could indicate at least a near term bottom. Friday's late action indicated some nice capitulation.

ALOHA !!

One of the many hallmarks of corrupt "fiat monetary" systems is "scarcity"! As prices rise people hoard in an attempt to hedge higher prices. Producers who cannot keep their doors open due to escalating price components for manufacturing create more scarcity of goods and services.

In past fiat monetary system collapses producing farmland became extremely valuable. Farmland prices continue to rise as residential real estate prices and commercial properties continue to plummet.

All more signs of a return to "real wealth" and "real value". Now it appears even Silicone Valley gets it! How many GOOG execs own central valley real estate? Suburbia ... IT WORKS UNTIL IT DOESN'T!

I have not seen this here in Hawaii yet, but the most populated area like Honolulu, may see some signs. I would think you would have to use alternatives. Rice is a starch, so here where I live I would switch to Ulu(breadfruit) and Taro, which is what the British Navy wanted and why there was a "Mutiny On The Bounty"! I suspect in the Bay Area a lot more people will turn to fishing either in the Bay itself or out on the Sacramento River Delta. Then smart people would turn their lawns into gardens and plant more fruit bearing trees!

I would bet not even the Silicone Valley engineers at COSTCO would guess that any of this rationing could ever be tied to the pieces of paper in his wallet!

Protectionism is here and that is yet another fiat monetary sytem symptom! Over a year ago I posted a chart here showing grain inventories down to a nine week supply. Also last year I posted a chart showing inflation rates for the BRICs that was running over 40% in some countries. Egypt and India are closing their grain export doors so I am sure the USA will do the same with their wheat supplies. So much for the "global community"! Globalization ... IT WORKS UNTIL IT DOESN'T!

Nobody gets that these all corrupt fiat monetary system symptoms! When money has no value then the basics to survive do! Money has no value because it has lost its main reason for existing ... as a store of value! The politicians and bankers have corrupted our money and yet the fools that we are, we will look to them for guidance and reassurances. We will put our trust in these "experts" that created the problems we are now facing! They must be "experts" because they are on TV and they got elected! They are only experts at "wealth redistibution" from us to them ... thats their expertise! That's what has been going on for the past eighty years since 1913! The only real cure for all our financial ills is to abolish the Federal Reserve Bank and the IRS. We've all been brainwashed into thinking that NO FED and NO IRS is something radical and crazy! In actuality it has been the norm throughout our entire history as a Nation. Prior to 1913 we never had a FED or an IRS and somehow we managed to survive. If the US CPI accounted for "real taxes" it would occupy 46% of our cost of living and we don't even have socialized medicine ... yet! The reality is we're broke and we are now redefining the word "broke"! Even our US Comptroller General of the GAO quit! Thats like the financial Captain of the USS Titanic jumping ship on the first lifeboat ...

IT ALL WORKS UNTIL IT DOESN'T !

Place your bets accordingly ...

READ ON:
Food Rationing Confronts Breadbasket of the World
By JOSH GERSTEIN, Staff Reporter of the Sun | April 21, 2008

MOUNTAIN VIEW, Calif. — Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing.

Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.

At a Costco Warehouse in Mountain View, Calif., yesterday, shoppers grew frustrated and occasionally uttered expletives as they searched in vain for the large sacks of rice they usually buy.

“Where’s the rice?” an engineer from Palo Alto, Calif., Yajun Liu, said. “You should be able to buy something like rice. This is ridiculous.”

The bustling store in the heart of Silicon Valley usually sells four or five varieties of rice to a clientele largely of Asian immigrants, but only about half a pallet of Indian-grown Basmati rice was left in stock. A 20-pound bag was selling for $15.99.

“You can’t eat this every day. It’s too heavy,” a health care executive from Palo Alto, Sharad Patel, grumbled as his son loaded two sacks of the Basmati into a shopping cart. “We only need one bag but I’m getting two in case a neighbor or a friend needs it,” the elder man said.

The Patels seemed headed for disappointment, as most Costco members were being allowed to buy only one bag. Moments earlier, a clerk dropped two sacks back on the stack after taking them from another customer who tried to exceed the one-bag cap.

“Due to the limited availability of rice, we are limiting rice purchases based on your prior purchasing history,” a sign above the dwindling supply said.

Shoppers said the limits had been in place for a few days, and that rice supplies had been spotty for a few weeks. A store manager referred questions to officials at Costco headquarters near Seattle, who did not return calls or e-mail messages yesterday.

An employee at the Costco store in Queens said there were no restrictions on rice buying, but limits were being imposed on purchases of oil and flour. Internet postings attributed some of the shortage at the retail level to bakery owners who flocked to warehouse stores when the price of flour from commercial suppliers doubled.

The curbs and shortages are being tracked with concern by survivalists who view the phenomenon as a harbinger of more serious trouble to come.

“It’s sporadic. It’s not every store, but it’s becoming more commonplace,” the editor of SurvivalBlog.com, James Rawles, said. “The number of reports I’ve been getting from readers who have seen signs posted with limits has increased almost exponentially, I’d say in the last three to five weeks.”

Spiking food prices have led to riots in recent weeks in Haiti, Indonesia, and several African nations. India recently banned export of all but the highest quality rice, and Vietnam blocked the signing of new contract for foreign rice sales.

“I’m surprised the Bush administration hasn’t slapped export controls on wheat,” Mr. Rawles said. “The Asian countries are here buying every kind of wheat.”

Mr. Rawles said it is hard to know how much of the shortages are due to lagging supply and how much is caused by consumers hedging against future price hikes or a total lack of product.

“There have been so many stories about worldwide shortages that it encourages people to stock up. What most people don’t realize is that supply chains have changed, so inventories are very short,” Mr. Rawles, a former Army intelligence officer, said. “Even if people increased their purchasing by 20%, all the store shelves would be wiped out.”

At the moment, large chain retailers seem more prone to shortages and limits than do smaller chains and mom-and-pop stores, perhaps because store managers at the larger companies have less discretion to increase prices locally.

Mr. Rawles said the spot shortages seemed to be most frequent in the Northeast and all the way along the West Coast. He said he had heard reports of buying limits at Sam’s Club warehouses, which are owned by Wal-Mart Stores, but a spokesman for the company, Kory Lundberg, said he was not aware of any shortages or limits.

An anonymous high-tech professional writing on an investment Web site, Seeking Alpha, said he recently bought 10 50-pound bags of rice at Costco. “I am concerned that when the news of rice shortage spreads, there will be panic buying and the shelves will be empty in no time. I do not intend to cause a panic, and I am not speculating on rice to make profit. I am just hoarding some for my own consumption,” he wrote.

For now, rice is available at Asian markets in California, though consumers have fewer choices when buying the largest bags. “At our neighborhood store, it’s very expensive, more than $30” for a 25-pound bag, a housewife from Mountain View, Theresa Esquerra, said. “I’m not going to pay $30. Maybe we’ll just eat bread.”END

from a sentiment standpoint, getting a nice set-up for a rally-> XLF needs to take out 26.50, FXI needs to take out 151...

re-opening a position in NWA at 9.16...

Bill: please take some time off. I know you view this blog/analysis/community as a retirement project and contribution to Joe Investor's understanding of the markets, but all things in moderation.

with the exception of bonds and commodities, i would be closing all shorts here...

setting sights on ROM/USD...

FXP about to join EEV in the sixties?

Re: Junior Precious Metals Focus

Action in the juniors today is coming from a friendly takeover offer of FRP.V from ELD.TO.

FRP.V comments:

http://www.frontierpacific.com/viewnews.php?id=126

Essentially, FRP.V are saying this is a below fair value offer.

Just finished listening to the Don Coxe webcast (http://tinyurl.com/2htvq3) and noticed that he addressed the 'hog culling' going on in canada. Interesting to hear the true reason for it (mismatched input costs/output pricing). I've been b*tching about this to anyone who would listen all weekend that the gov't is spending $50M of our tax money to cull hogs so that we can soon enjoy higher meat prices. Lovely.

Also, he fielded a question about oil producers and seemed to frown upon big oils prospects. That reminded me of Bill's XOM trade, so I pulled up a chart, and wouldn't you know it, XOM's been on a tear up to $94/share and daily RSI(7) of 84.

Perhaps this trade will be worth a revisit shortly?

http://tinyurl.com/3ztf8n

Amid U.S farm boom, fears grow of a collapse

At a time of record agricultural profits, concerns are mounting that U.S. farmers could be edging toward a financial crisis not seen since the 1980s farm-economy collapse.

The potential problem, economists said, is that strong demand for corn and other grains sent crop prices to historic highs. That has led to record farmland values and steadily increasing debt as farmers borrow to buy more land, finance the higher costs of fertilizer and seed and upgrade their equipment.

http://tinyurl.com/4kuvnk

Aloha Kaimu,

Regarding your comments, I am starting to see early signs here on Oahu. Rice being the primary staple for the locals are leaving the pallets at a faster rate than before. The cost of the rice that I buy are at least 2-3 dollars higher than 6 months ago.
Switching to breadfruit or Taro (poi) isn't a viable alternative since the prices for these commodities have also risen. I feel that this is only the beginning of "sticker shock" for the people of Hawaii where we have to import most of our food.

Kaimu and Yukes,
Unfortunate for the Hawaiians that they chose real estate over agriculture years ago. Sticker shock is an understatement my Sister lives in Maui and prices for all staples is up significantly. Good luck to you both.

Sprott Inc.

Short Description: Offering of Common Shares
Price: $9.50- $10.50 CDN
Settlement: On or About May 15.

Buyer beware, or deal of a life time?

SNCR: up 1.82 at 22.80 (More buying in May 22.5/25 calls too).

telestar3d: Are you still holding?

Food Rationing Confronts Breadbasket of the World

Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing. Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.

http://www2.nysun.com/article/74994

QQQQ over 47...pressing the ROM/USD positions...

JogyP, SNCR, sold a while ago at a loss when it hit my mental stop. No regrets on to other things.

out of ROM/USD...

"A real shareholder wouldn’t sue us"
http://tinyurl.com/4o9sdz

"The lawsuit says we did something wrong in not disclosing a lot of important information about our investments, particularly about Financial Guaranty Insurance. Because of that and other investments -- like Freescale Semiconductor -- we’ve been hit hard with some earnings losses (89% to be exact).

But so what? Of course we don’t disclose important information. This is PRIVATE equity. That means we keep important information private, duh!

Also, an 89% drop in earnings is no reason to panic (we were aiming for 69%—private joke). It just means our earnings later are going to be that much better. This is the time to invest even more money with Blackstone in one of our many diverse side funds."

...
"Besides, things are fine. Our investment just requires a little time horizon adjustment. Once we do a few more add-on acquisitions, change the name, and take a few more dividends for ourselves, we’ll be able to sell Financial Guaranty for a profit during the next buyout boom, which we expect to be sometime around 2077.

Think long term. "

Vinod:
Here is some encouraging news for your AMZN short

Amazon: AmTech Says Short It Ahead of Wed. Earnings
http://tinyurl.com/3gt8ua

Gotta' question.

Thinking about all this "mark to market" on the CDOs and other derivative products. Well, wasn't the problem with this stuff that 1) There is no transparency and 2) There was no market. What is the opinion of the likelihood that this stuff could actually end up being marked up?

I heard that we reached short term top last Friday
And I did not have good feel about direction
So, I enjoy Boston Marathon whose finish line is next to our building.
25000 runners, bright sunny sky with 55F weather
I will always cherish this moment

Bill
My favorite Boston Bruins is playing tonight with Montreal Canadian in Montréal
7th game of best of seven
Boston lost 11 straight against Canadian and lost all 8 game of regular season this year
But it is playoff that count and it look like Bruins is going to kick Canadian to night

Anyone here live in Dallas Ft Worth? Long term what are the prospects? I am getting sick of the hyper inflation in in the tristate nyc area. The thought of yr round warmth, no state income tax, $60/sq ft on a brand new construction house = low payments or just pay it off and not have a mortgage at all at age 31. Growing city etc etc.

Vinod,

Boston vs. Montreal - good series with some wonderful history behind it.

My pick: Montreal will win tonight 4-3, no overtime. Koivu with the game winner, broken bone and all...

Disclosure: I'm a philly fan

Cheers

Regarding Dallas Fort Worth

I used to work for EDS and used to have to go their often. I also have friends in the area. I prefer Fort Worth to Dallas. I always thought Dallas was a bit "plastic" for lack of a better word. Fort Worth was more comfortable. Hot is an understatement down there from May to September. So minimal heating but lots of air conditioning. Make sure you have a garage for your car. The sun will fade your finish. .

Re: Intervention

Nowandfutures.com has this to say:

"Intervention still present, in spades...
4/20/2008

Total repos (TOMO, TIO, TAF) are currently about $214 billion, not far off the all time record of $236.4 billion established on March 24, 2008 ($235.6 billion on April 15th comes close). M3 annual growth rate has topped 20%, which does not look good for inflation on the intermediate and longer term. So far, so good on the now medium to large long hog & cattle positions. "

http://blog.nowandfutures.com/index.html

today's TA on the miners vs. bullion (XAU/$gold)

http://jglobal.blogspot.com/2008/04/gold-miners-xau-vs-gold-bullion.html

looking for the ratio to retest the support levels on any plunge towards $800 on gold.

your thoughts are always welcome.

2nd
I am watching DUG. we need to see all the shorts throwing in the towel and saying OIL is going to 150. it is getting closer to be in DUG

POG:

SInclair's latest post indicates that gold stops its descent by May 7. Hope he is right. I have no free time during the days anymore, so I might put in some low bids ..

ALOHA !!

Yukes and yvrapx ... The Big Island is not Maui nor is it Honolulu. I live on a farm on the Big Island of Hawaii because I planned to for the simple reason I did not want to pay for food or water. Here I have abundant fruit and vegetales and fish growing year round! Maui is what I call LA WEST! Its full of condos and houses and rich ex-pat SO CAL types. Honolulu is simply another Pac Rim banking center! Go rural ...

Here on the island of Hawaii we do not import food. We have the largest family run cattle ranch in the USA, the Parker Ranch, some 235,000 acres of cattle and sheep! Not to mention chicken farms and egg farms in Waimea. I drive past a gazillion Farmers Markets on a 30minute drive to Hilo and there is even a Hawaiian style Farmers Market right in front of WalMart in Hilo! We grow much of our own fruits and vegetables. About the only food we need to import is the processed junk like Marie Calendars Lasagna or Swansons! Electricity here is geothermal, solar or wind! This is about the most self-sufficient place on Earth! Self-sufficiency is like saying "inflation proof"! Gasoline here is $3.65USD per gallon and yes that is imported because we have no producing oil fields here in Hawaii! Sticker shock for me would apply to gasoline, but after just coming back from Australia I won't be shocked by gas prices until they get to about $6USD per gallon, which is what the Aussies are paying right now.

Kaimu,

Point well taken. Like I said, unless you live on a farm and can grow your own food, inflation is going to rip a hole as big as the kilauea in our pocketbooks. I do envy your situation as most of us here aren't so fortunate. Honolulu is no different unless your retired on a farm on the north shore. It's a good thing I started buying my gold coins and shares in 2001 after listening to Jim Sinclair. Oh how I wish for the simple life. Take it easy bruddah.

ALOHA !!

jk484 ... posted ...
Amid U.S farm boom, fears grow of a collapse

At a time of record agricultural profits, concerns are mounting that U.S. farmers could be edging toward a financial crisis not seen since the 1980s farm-economy collapse.

That entire article did not even touch once on the underlying reasons why the commodities will not return to 1980s prices ... "global fiat money"! These statist trained university professors will never understand fiat money and the relationship between growing global money supplies and rising prices!

Besides the global grain supplies were at record lows(nine week supply)before Bush got the whole biofuel Ethanol craze started here in the USA. We were already headed for shortages, food crop biofules only hastened the crisis!

Naturally any farmer who runs up a lot of debt is at risk, just as any suburbanite who also runs up a lot of debt is at risk! What's the difference? There isn't any! Stay out of debt and your odds of survivng any crisis greatly increase ...

I would only own year round food producing farmland. Places in the USA like Hawaii and Florida and South Texas come to mind.

Both Richmond Federal Reserve President Jeffrey Lacker and Richard Fisher, president of the Dallas Fed, in separate speeches cited the dangers of delaying moves to rein in inflation.
"Inflation is a problem now. It is too high and personally I would be uncomfortable in just waiting for economic slack to bring it down," Lacker told reporters on the sidelines of a symposium

http://tinyurl.com/6xkpwd

Looks like the FED thinks we're headed for a deeper recession than Wall Street with this statement.

Rob.

Hi,

So it seems that several of us are hoping for 800 for PoG to fill up the truck... it may happen or not, let's see.

So was the £50 billion pounds offered by the BOE enough yesterday,some think it is only 10% of what will be required.

http://tinyurl.com/5y2oam

Analysts said the sum equated to about 10 per cent of banks’ wholesale funding needs of £550 billion and less than 5 per cent of the total outstanding mortgage stock of nearly £1.2 trillion.

Thats pounds by the way , double it for USdollars,phew better crank up the prtinting machines on over time.

So was the £50 billion pounds offered by the BOE enough yesterday,some think it is only 10% of what will be required.

http://tinyurl.com/5y2oam

Analysts said the sum equated to about 10 per cent of banks’ wholesale funding needs of £550 billion and less than 5 per cent of the total outstanding mortgage stock of nearly £1.2 trillion.

Thats pounds by the way , double it for USdollars,phew better crank up the printing machines on over time.

maromatics, regarding the question of the POG

i was thinking something similar last night after reading a string of analyst predictions that gold will pull back to the mid-low 800's making it a buy. too many folks may be sitting with too much $$ on the sidelines expecting the same thing. we all know how these types of situations tend to turn out.... a large scale run may happen if gold breaches $975 to the upside in may, traders not wanting to miss the TOG... though that in itself could be the final trap before the actual TOG set up....

i feel like that guy in the lord of the rings that doesnt know whats going on...

Jim Sinclair is being very specific in his call at the moment for golds correction to finish by early may. enlightening as usual:

Posted On: Monday, April 21, 2008, 11:11:00 PM EST

In The News Today
Author: Jim Sinclair

Discussions on the Price of Gold:

The subjects of today's discussions amongst gold people were:

Interest rates.
Seasonality.

1. We are already into what the Fed will do. The going opinion amongst the gold people who always seems to want to be wrong about being bullish is what will the effect of a 1/4 point drop be? Will that not strengthen the dollar and then hurt gold?

What they seem not to note is that there is little room between the present discount level and zero. Interest rates are useless in the present situation outside of a short period of spin. If the Fed sliced hard there would be little room to do it again. It does not take a genius to know they will have to keep some ammunition for emergency drops and shock PR.

The dollar and the euro know the expectations and therefore have priced in the 1/4 point reduction. Outside of no change in rates I see no dollar rally with even one leg on a 1/4 drop. It should be a non-event.

2. Seasonality is quite meaningful to gold when it is a commodity and meaningless when gold is a currency. Jeweler's demand is no factor when gold is running as a currency. Other than a modest impact from those in anticipation of commodity demand running the market, I see seasonality as a non-factor in the present gold market.

The prime mover of gold will be the US dollar which has not done much of anything as a result of the "Please listen to us" G7 meeting.

Whatever Gold has to do on the downside is done by early May.

Good morning.

Here are your Cara 100 Ratings Changes:

New Coverage:

DELL - Equal-Weight @ Lehman Bros.
GRMN - Neutral @ JP Morgan

--------------------------------------------------

Have a great day.

RBS exposure: another $11.7B in losses tied to mortgages.
http://tinyurl.com/3gb7ut

How will the street spin this one. Is it "ONLY" 11.7B in losses?

More RBS color from forbes
http://tinyurl.com/4x3nzg

If you haven't read Paul Farrel's article today,do. The pass it on to all your friends.

http://tinyurl.com/6mrep2

If all US citizens read & understood this, fireworks ahead.....

Morning Bill,

Took a SWEET ride on some BQI Oilsands Quest this am.

Chris