Bob Chapman
International Forecaster
May 22, 2011
The amount of money and people withdrawing from 401K’s has been
staggering and Wall Street and government do not like it one bit. There
are those who have been fired, run out of benefits, and half to cash in
part or all of their retirement. The villainous ones are those still
employed, who have taken up to three loans, many of whom have bought
gold and silver with the proceeds.
That said, Senator Herb Kohl, Senator Mike Enzi have introduced
legislation to limit citizens to tapping into their 401K’s, called “SEAL
401K Savings Accounts.” The bill would reduce and limit the number of
loans workers may take from 401K’s and give participants more time to
pay back loans after losing their jobs. In addition, employers would
have the option to reduce the number of loans for their plans.
At the end of 2010, 28% of participants had loans outstanding, a
record. The average loan balance was $7,860.00 and 58% of plans permit
participants to have two or more loans at a time. If participants are
fired or lose their jobs 70% default on their loans.
Workers generally may borrow as much as 50% of their vested account
balance up to $50,000. The loan must be repaid in five years, unless the
money was used to purchase a primary residence. The average interest
rate is 1% over prime.
We find it of more than passing interest that Mr. Kohl is not running for reelection next year.
If you are going to borrow from your 401K’s do it now, ahead of this
legislation, that could interfere with the purchase of gold and silver
shares, coins and bullion. This is the main reason for this legislation,
to stop you from protecting your assets. Of course, such loans involve
selling holdings in the 401K’s and that puts downward pressure on stock
and bond markets, or takes incoming funds destined for those markets
away from those markets.
One aspect of a new and improved federal regulatory scheme is the
seizure of 401(k) retirement plans and the subsequent
government-administered disbursement of the funds.
In Chapter 3 of the Annual Report on the Middle Class released in
February by Vice President Biden and the White House Task Force on the
Middle Class, the Obama administration calls for enhancing the
“retirement options” for the middle class by imposing “new regulations
to improve the transparency and adequacy of 401(k) retirement savings.”
[Read the entire article:
http://www.thenewamerican.com/index.php/usnews/politics/3478-obama-administration-plans-to-seize-401k-retirement-accounts
[Here is your proof, as we have been telling you over and over again,
get out of your 401Ks and IRAs before you have nothing more than a
promise to pay from a bankrupt government. Bob]
Stock up with Fresh Food that lasts with eFoodsDirect (AD)
It is difficult for observes to get the perception that very
dangerous financial and economic events are just around the corner. We
find up to a certain point those in power more often are able to pull
another rabbit out of the hat. Not that the problems have been solved.
They haven’t been solved. All of the assistance, as temporary as it may
be, has gone to the world financial community and governments. We
seldom hear the question why did these financial experts and
governments get into such a horrible state of affairs? All we hear of
is saving them and allowing them to keep two sets of books, so they can
write off their losses over the next 50 years. We don’t expect you to
get such a comforting arrangement. These are the same lenders that if
you are late on a payment your interest rate goes from 6% to 30%. To
say the least the lenders and governments are getting away with
financial mayhem. We find it of great interest that the Federal Reserve
and the European Central Bank find it appropriate to buy bonds known as
toxic waste, those are bonds containing mortgages, and find it
necessary to keep secret what they are paying lenders for these bonds
syndicated several years ago. Then previously there was the matter of
divulging who the Fed loaned money to during the credit crisis. It took
two years to get that issue adjudicated at the appeals level. The Fed
wouldn’t divulge because they said what they had done was a state
secret, a position totally untenable; which the court disagreed with.
The Fed just didn’t want anyone to know who they were bailing out. They
were bailing out select elitist corporations not only in the US, but in
foreign countries as well.
Anyone with a drop of sense knows that if official interest rates
rise, or if continuing debt expansion is halted, the bottom will fall
out of the US economy and the world economy with varying damage. Still
about 60% of foreign reserves are held in US dollars, the world’s
reserve currency. Since 1988 central banks generally speaking have been
sellers of gold at the behest of the US government and the Federal
Reserve in order to suppress prices and rid the world financial system
of gold backing. Gold acts as a control mechanism limiting a country’s
ability to create money and credit. Under neo-fascist Keynesianism the
creation of money, credit and speculation was to be allowed to run
rampant, as we have seen for some years. All of the profits went to the
transnational conglomerates, as the losses were dumped on the public.
We would call that a one-way street. The debt created from a recent
historical perspective is without precedent and continues to grow in
the US and in Europe. Over the next two years it is estimated that $3.6
trillion has to be rolled over plus new debt.
We see Greece, Ireland and Portugal essentially bankrupt and ready
to enter the fray is Spain, Belgium and Italy. Contagion is already
with us to the tune of $4 trillion, a sum Germany, France, the
Netherlands, Austria and Finland cannot finance without bankrupting
themselves. We wonder who is going to buy such debt? Probable lenders
such as China only have a limited interest, because as it cuts back on
US Treasury paper it buys gold, silver and commodities. Why shouldn’t
they when the drums of war are in the distance? Besides, China has
inflation of 10% to 15% and has seen home prices in Beijing fall almost
40% recently. That probably will spread countrywide. As in America,
Spain, Ireland and England that means mortgage defaults and bank
losses. That will lead to recessionary conditions and a drop in
imports, which will negatively affect sellers to China such as Japan. We
can assure you that a slowdown in China will affect the entire world.
That means China probably will not be a buyer of foreign bonds in the
numbers they have been in the past. The US TIC Report already bears
this out and thus; Spain will probably not get the money it is looking
for from China.
In the US the Fed probably will buy $1.6 trillion in Treasury and
Agency debt over the next year, although we see the Treasury currently
tapping government pension retirement funds to fund the lack of US debt
extension and that license could be used to relieve the Fed of some of
the burden. Needless to say, that is not a permanent solution. If that
tactic is employed private pensions, as we have warned for the past two
years, could become a victim of the government as well. At the same
time the world economy is again slowing and that does not bode well for
borrowers either. In spite of US government manipulation of markets
everything they do is only temporary. The markets are far too vast for
them to have any lasting effect. Just look at the last 11 years, gold
has gone from $260.00 to almost $1,600 and silver from $3.80 to $49.50.
As well over the past 11 years nine major currencies on average per
year have fallen more than 20% in terms of gold and silver. That means
you do not hold or invest in currencies. As an alterative, historically
gold and silver have been the safest place to be.
Those in power behind the scenes believe they can create recovery by
simply following the Keynesian model, which is print money and credit
forever. Their policies are not working in the public sector. We see
higher sales figures, but they are the result of inflation. Debt
saturation and its continuation won’t solve the problem; only purging
the system can solve the problem. The bankrupt have to be allowed to
fail. Too big to fail has to come to an end. The world financial system
has to be purged and the only way to do that is to call an
international meeting and revalue and devalue all currencies against
one another and have a multilateral default on unpayable debt. Then
nations can decide what the new world reserve currency will be and
whether it will be gold backed.
The foreclosure problems in the US and Spain are beyond
believability. In the US monthly inventory for sale is normally 4 to 5
months, presently it is 3-1/4 years and should be four plus years by
the end of the year. In Spain the visible inventory is 50,000 homes,
but in reality it is much higher than that. Worse yet, the banks are
lying about it just as they are in the US. Even at 30-year fixed
mortgage rates of 4.61% people do not quality to buy. Home prices will
fall at least 10% by yearend and more next year and into 2013. Then
they will bump along the bottom for years. In the US lending has dried
up and it is more difficult to get loans than it has been. Housing debt
is unbelievable and is unpayable. There is no recovery in sight in
spite of spending of more than $2 trillion on QE2 and stimulus 2. We
can assure you QE3 or something like that is on the way, otherwise it is
collapse. The Fed has to come up with $1.3 trillion to purchase
Treasuries and Agency securities, June to June just to stay even. Our
guess is that figure in reality will be $2.1 to $2.5 trillion, as the
dollar reaches new lows. The flipside is in spite of government
manipulation, gold, silver and commodities will move much higher in the
flight to quality and safety. There is absolutely no reason to believe
that debt will be repaid nor will there be any recovery. Every single
day people all over the world are losing purchasing power due to
inflation and the profligate policies of their governments. There has to
be a well planned or orchestrated plan for default by all nations
collectively. This is why your investible funds have to be in gold and
silver coins, bullion and shares. That is the only place investment
funds are safe. Just look at the last 11 years during which gold and
silver rose by more than 20% on average versus nine major currencies
annually. Is that not enough proof to convince you where your funds
should be? Quantitative easing has to continue and so does the upward
valuation of gold and silver coins, bullion and shares.
Food and oil demand continues to increase as the third world
experiences more prosperity and growing populations. That is one of the
results of free trade; globalization, offshoring and outsourcing
hadn’t planned on. Having created these conditions they now talk of
reducing world population, a condition they call a surplus of useless
eaters. As a result banks and hedge funds are again leveraged as they
were in 2008. Fortunately most are presently short gold and silver
related assets.
Once it becomes visible through the veil of government propaganda
that conditions are deteriorating real interest rates will rise sending
bonds down and the stock market will follow. What else can they do
with no recovery, a falling dollar, 22.2% real unemployment, 10%
inflation, a minus GDP and exponential creation by the Fed and the
Treasury of money and credit. As the printing presses roll on we see
shortages in physical gold and silver, which soon lead to higher cash
prices. As we have predicted correctly for 11 years, no matter what the
Illuminists do they cannot arrest the flight to quality in gold and
silver.
The past few weeks have seen some staggering events in the
commodities, gold and silver market. As you all know JPMorgan Chase and
HSBC have been naked short both gold and silver, but particularly
silver. In the case of silver, the CFTC, the Commodity Futures Trading
Corp., has seen fit to allow Morgan and HSBC to continue to corner the
silver market. We saw JPM and HSBC essentially stand by in the futures
market, as silver climbed higher. In the futures market they do not
seem to have altered their positions to any great degree, so they have
to be doing their trading in the opaque, unregulated derivatives
market. Then there have been the unprecedented actions by the
CME/Comex, which raised margin requirement five times in nine days.
They were elevated from $4,500 to $9,500 – previously and then the
following five changes moved margins from $9,500 to $21,600. Even more
importantly major commodity brokerages doubled those margin requirements
from $21,600 to $42,000. As a result most speculators in the small and
medium categories were wiped out. This was unprecedented as well. We,
of course, ask why all these brokerages decided to simultaneously
double core rates? We don’t believe in coincidences, thus could it be
they and the CME were propelled to do what they did by some powerful
outside force, such as our government? We cannot prove that, but the
actions of these players are very suspect.
We know that presently the CFTC, SEC, NYSE and Nasdaq are receiving
3,000 complaints a day up from 1,000 a week ago, claiming the gold and
silver markets are rigged and naked shorts are allowed to control these
markets.
Here is a response by the SEC and answer by a subscriber to the SEC.
“Thank you for contacting the SEC. Before we are able to respond to
your email, we need more information from you: including your
supporting documentation that JPMorgan is making illegal naked short
sells and its manipulating the gold and silver markets.
Here is the subscribers answer: It is my feeling because of the
large naked short position that JPM and HSBC are allowed by the CFTC to
carry, that they were in part responsible for the action of the
CME/Comex and the simultaneous conclusion by a number of major
commodity houses to double the CME margin requirements to their clients.
It is not my place to provide supporting documentation. That is your
job. Why do you think I am writing to you? Investigate and come up with
some answers. Do not defer them to me. Are you not supposed to be
protecting me as a regulator? I await your answer.”
This shows you the high handed brazen arrogance of our regulators.
They know exactly what is going on with naked shorting and won’t do
anything to stop it.
JPM is a major shareholder in the privately owned Federal Reserve,
which is no more federal than Federal Express. For years they have been
allowed to run roughshod over the markets making fortunes in the
process. Back in 2005 we recommended a long position in natural gas at
$3.80. The market ran up and we recommended sale at $14.50. At $15.00
JPM was allowed to deal in natural gas, which promptly fell to $4.50
after they participated. A very strange coincidence, which in that
process wiped out a major commodity player. We believe JPM rigged the
market, but we cannot prove it, because we cannot access their records
and the CFTC had no desire to do so. This is the same kind of treatment
we are receiving in the silver market today. You should all be writing
to every representative and senator in Washington, the CFTC, SEC,
NYSE, ASE, and Nasdaq and registering your complaints because the
squeaking wheel gets the grease. Even if they do nothing they will all
be aware that millions of investors know what they have been up too. Do
not forget this is nothing new and the regulators know that. Morgan,
HSBC, Barclays, Goldman Sachs and Citicorp among others run the markets
exactly as they please with little or no interference, because they
control the US economy and your lives.
The markets are all rigged and it is up to you to let the above
entities mentioned above know, that you know what they are doing and
you want it stopped now.
Hawaii saw a total of 2,476 initial unemployment claims for the week
of May 14, up 12.5 percent compared to the 2,201 claims filed during
the same week in 2010, according to data from the Hawaii Department of
Business, Economic Development and Tourism.
GOP 2012 hopeful Rep. Ron Paul (R-TX) thinks U.S. troops will soon
be on the ground for an occupation of Pakistan — and he said so on
MSNBC’s “Morning Joe” Wednesday morning.
Paul called America’s relationship with Pakistan “an impossible
situation,” where the U.S. hailed both its friendship with and
suspicion of the country.
“I think we are going to be in Pakistan, I think that’s going to be
our next occupation, and I fear it,” Paul said. “It’s ridiculous. I
think our foreign policy is such we don’t need to be doing this.”
Paul said he had no inside information on Congress authorizing or
ordering troops to invade Pakistan. He simply said based on U.S.
history, he wouldn’t be surprised to see further U.S. involvement there.
“Right now, Pakistan is a big problem,” he said. “We have created a
civil war there, and the fact that we go over there and we violate
their security and the people rebel against the government because they
see their government as being a puppet of the American government, so
it’s total chaos and I’m afraid, and I hope I’m absolutely wrong, but
I’m afraid we’ll be in Pakistan trying to occupy that country, and it
will probably be very unsuccessful.”
Fewer people bought previously occupied homes in April, a troubling
sign that the weak housing market remains a drag on the economy.
Sales fell 0.8 percent in April to a seasonally adjusted annual rate
of 5.05 million units, the National Association of Realtors said
yesterday. That’s far below the 6 million homes a year that economists
say represents a healthy market.
Purchases made by first-time home buyers did increase but not nearly
enough to signal a housing recovery is on the way. First-time buyers
are critical because they typically improve their properties and invest
in their communities, a combination that helps home values rise.
Foreclosures, on the other hand, force prices down. They represented
more than a third of all sales in April and more are expected in the
months ahead.
Since the housing boom went bust, sales have fallen in four of the
past five years and hit a 13-year low last year. Declining home prices
and low mortgage rates haven’t been enough to boost sales this year.
Some who want to buy can’t, mostly because banks have tightened
lending requirements and are insisting on larger down payments. Many
buyers who can qualify for loans are holding off.
Economists say it could be years before the housing market fully recovers.
A growing problem is that some sales that are under contract are
falling apart. A separate survey from the trade group found 11 percent
of realtors said a contract was canceled because an appraisal came in
below the negotiated price. And 14 percent said a contract was
renegotiated to a lower price because of a low appraisal.
The median sales price in April was $163,700. That’s down 5 percent
from the same month one year ago. The median price of a new home is now
nearly 31 percent higher than the median price for a previously
occupied home — or twice the normal markup.
The gap is largely because of the flood of foreclosures or short
sales — when the lender accepts less than what is owed on the mortgage.
Those sales are forcing down prices.
Sales of homes at risk of foreclosure fell in April. But they still made up 37 percent of all purchases.
With gasoline prices hovering at $4 a gallon nationally, many
Americans are making tough choices: scaling back summer vacations,
driving less or ditching the car altogether. And high prices are
hitting seniors harder than a month ago.
An Associated Press-GfK poll shows the share of Americans who say
increases in the price of gasoline will cause serious financial
hardship for them or their family in the next six months now tops 4 in
10.
Overall in the poll, 71 percent said rising prices will cause some
hardship for them and their family, including 41 percent who called it a
“serious” hardship. Just 29 percent said rising prices are not causing
a negative impact on their finances.
By income, 63 percent of those with annual household incomes over
$50,000 now say rising prices are causing them financial hardship, up
from 55 percent in March. Those with lower incomes already were more
likely to feel strained in March, and more than three-fourths of them
continue to report financial hardship.
For older Americans, it’s worse.
The share of seniors expressing financial hardship over gas prices hit 76 percent; it was 68 percent in March.
Nettie Cash, 65, of Dallas, Ga., is cutting back on her medicine
because of the cost of fueling up her Buick. Cash is still taking her
heart pills but is forgoing her inhaler and ulcer medicine for now.
“It’s not easy,” she said. “You have to do what you have to do.”
The public’s coping strategies are largely unchanged from March,
with 72 percent having cut back on other expenses, 66 percent saying
they’ve reduced the amount of driving they do and 48 percent changing
vacation plans.
Since January, gas prices have shot up about 90 cents, with the national average for a gallon of regular this week at $3.96.
Financial analyst Nicole Polite in Baltimore sold her Nissan Altima
recently and is taking public transportation, opting for the bus, rails
and walking to get to work. Gas prices were just too high, she says,
so she and her boyfriend downsized to a one-car household. She says they
kept their Lexus sedan, which requires pricey premium gas.
“It’s definitely a financial strain because now you have to reassess
everything,” said Polite, 32. “We don’t go out as much. That $20 that
we could have used to go to a movie — now that money has been absorbed
by the gas tank.”
But analysts say relief is coming. Fred Rozell, retail pricing
director at the Oil Price Information Service, expects the price at the
pump to drop as much as 40 cents in the next four weeks.
Until that happens, Ross Cobb in Boerne, Texas, will still try to
keep his highway miles down. Cobb says he and his wife have been
driving less and curbing trips into the city for their children’s
clothing and other supplies.
“We coordinate all of our trips into San Antonio,” said Cobb, an
associate athletic director at the University of Texas. “We don’t ever
go in anymore just for one particular errand. We wait until we’ve got
two or three things to do.”
The Associated Press-GfK Poll was conducted May 5-9 by GfK Roper
Public Affairs and Corporate Communications. It involved landline and
cellphone interviews with 1,001 adults nationwide and has a margin of
sampling error of plus or minus 4.2 percentage points.
IMF chief Dominique Strauss-Kahn was placed under a suicide
watch in jail, while pressure mounted on him to resign yesterday and
the hotel maid who accused him of attempted rape said through her
lawyer that she had no idea who he was when she reported the attack to
police.
Law enforcement officials emphasized that Strauss-Kahn had not tried
to harm himself but that guards were keeping a close watch on him just
in case.
Meanwhile, details began to emerge about his accuser, a 32-year-old
immigrant from the West African nation of Guinea with a 15-year-old
daughter.
Her story of being attacked by Strauss-Kahn in the Sofitel hotel
suite near Times Square is consistent because she is telling the truth,
her lawyer Jeffrey Shapiro said.
Maneuvering begins for Strauss-Kahn’s IMF post. B8
“There is no way in which there is any aspect of this event which
could be construed consensual in any manner,’’ Shapiro said. “This is
nothing other than a physical, sexual assault by this man on this young
woman.’’
He continued: “It’s not just my opinion that this woman is honest.
The New York City Police Department reached the same conclusion.’’ He
added, “This is a woman with no agenda.’’
After being denied bail on Monday, Strauss-Kahn, 62, is jailed at Rikers Island on charges including attempted rape.
Defense lawyer Benjamin Brafman has said he and others assisting
Strauss-Kahn in the case believe the forensic evidence “will not be
consistent with a forcible encounter.’’
He said that “significant issues’’ make it “quite likely that he will be ultimately be exonerated.’’
The maid has not been identified by name, and the Associated Press generally does not name people alleging sexual assault.
She arrived seven years ago in the United States from Guinea under
“very difficult circumstances,’’ Shapiro said, and lives in the city
with her daughter.
Shapiro said the woman did not know that Strauss-Kahn was managing director of the International Monetary Fund.
“She did not know who this man was until a day or two after this
took place,’’ Shapiro said. [If you believe this story, we have a
bridge for sale that connects Manhattan to Brooklyn. Bob]
April Industrial Production Stalled As Prior Months Were
Revised Lower. This morning’s (May17th) Federal Reserve Board release
of seasonally-adjusted April 2011 industrial production showed
aggregate production to be unchanged (down 0.5% net of
prior-period revisions) versus March, with manufacturing tumbling by
0.4% in April. In turn the aggregate March index was revised to a 0.7%
(previously 0.8%) monthly gain. The revisions the April report all were
post-benchmark revisions, with the largest change showing the
previously reported 0.1% monthly gain in February 2011 now being a 0.3%
contraction.
Year-to-year change in April 2011 production was 5.0%, down from a
revised 5.3% (previously 5.9%) gain in March. The year-to-year
contraction of 14.9% seen in June 2009 was the steepest annual decline
in production growth since the shutdown of war-time production
following World War II.
The Mortgage Bankers Association said its
seasonally adjusted index of mortgage application activity, which
includes both refinancing and home purchase demand, climbed 7.8 percent
in the week ended May 13.
The MBA’s seasonally adjusted index of refinancing applications
surged 13.2 percent, while the gauge of loan requests for home
purchases dipped 3.2 percent.
Both the overall index and the refinance index reached their highest levels since early December.
The refinance share of mortgage activity rose to 66.7 percent of total applications, the largest amount since late January.
“The 30-year fixed mortgage rate is now 53 basis points below its
2011 peak, and has decreased for five straight weeks,” Michael
Fratantoni, MBA’s vice president of research, said in a statement. “Over
this five week span, the refinance index has increased by about 33
percent.”
Fixed 30-year mortgage rates averaged 4.60 percent in the week,
easing from 4.67 percent the week before. It was the lowest rate seen
in the survey since late November 2010.
Barack Obama to back Middle East democracy with billions in
aid President pledges cash to support Egypt and Tunisia after criticism
US has been too slow to support uprisings Barack Obama is to announce
that the United States and the west will pour billions of dollars into
the Middle East in support of Egypt, Tunisia and other
countries embracing democracy, a move the White House portrayed as
being on the scale of aid to former communist countries after the fall
of the Berlin Wall…The US is to relieve Egypt of up to $1bn in debt and
lend or guarantee up to $1bn. The World Bank, the IMF and other
multilateral institutions to provide a further $2bn-3bn.
The official described Tunisia and Egypt as beacons, models to encourage others to pursue democracy.
A poll published on Tuesday by the Washington-based Pew organisation
found that President Obama remains unpopular among countries polled in
the Middle East and elsewhere in the Muslim world, except Indonesia.
Whitney Meredith: The Hidden State Financial Crisis, The
latest research into opaque state financial statements suggests
taxpayers will be surprised by how much pensions are underfunded.
Next month will be pivotal for most states, as it marks the fiscal
year end and is when balanced budgets are due. The states have racked
up over $1.8 trillion in taxpayer-supported obligations in large part
by underfunding their pension and other post-employment benefits. Yet
over the past three years, there still has been a cumulative excess of
$400 billion in state budget shortfalls. States have already been
forced to raise taxes and cut programs to bridge those gaps.
Next month will also mark the end of the American Recovery and
Reinvestment Act’s $480 billion in federal stimulus, which has
subsidized states through the economic downturn. States have grown more
dependent on federal subsidies, relying on them for almost 30% of
their budgets.
The condition of state finances threatens the economic recovery.
States employ over 19 million Americans, or 15% of the U.S. work
force, and state spending accounts for 12% of U.S. gross domestic
product. The process of reining in state finances will be painful for us
all.
Today, off balance sheet debt totals over $1.3 trillion, as measured
by current accounting standards, and it accounts for almost 75% of
taxpayer-supported state debt obligations.
Firms Fill Up on Debt Before Fed Closes Door on Easy Credit
All told, investment-grade companies sold $19 billion of bonds in the
U.S. in the past two days, according to data provider Dealogic,
setting the week up to be among the busiest so far this year. Bond
sales in May have reached $56.7 billion with two weeks left to go in the
month almost as much as the $59.6 billion sold in all of April.
Newly hired autoworkers are earning $14 an hour plus benefits, about
half of a veteran autoworker’s wage. And many experts and labor
leaders worry that the wage premium that factory workers enjoy is
eroding.
Wards Automotive has published actual unit production for
the month of April 2011. According to the data, the motor vehicle
assembly rate plunged by 12% to a 7.847 million annualized rate in
April, which compares to an 8.923 million rate in March 2011.
In the past, such a sizable drop in the assembly rate has usually
translated into a sharp decline in motor vehicle output. We project
motor vehicle output to decline by 9% in April, which would be entirely
consistent with the drop-off in the assembly rate.
We believe the pronounced weakness in the auto sector in April will
drag down industrial production, which is the reason we project
industrial production to decline by 0.4% in April after rising by 0.8%
in March.
SHORT NOTES
Consumer revenue declined 7% but large corporate sales increased 5%.
Margins increased to 23.4% from 20.5%. Dell said is saw strength in
the public sector, which is odd at the least and likely to disappear as
states and municipalities retrench in coming months.
As for the Fed’s exit strategy: In addition, nearly all
participants indicated that the first step toward normalization should
be ceasing to reinvest payments of principal on agency securities and
simultaneously or soon after, ceasing to reinvest principal
payments on Treasury securities. A few members remained uncertain about
the benefits of the asset purchase program but, with the program nearly
completed, judged that making changes to the program at this time was
not appropriate.
U.S. employers can expect an 8.5 percent increase in their
medical costs next year due in some part to the healthcare reform law,
the consulting firm PwC said in a report Wednesday.
The widely read annual report on cost trends points to three main
drivers of healthcare costs, two of which are exacerbated by the new
law.
Good thing healthcare costs are underweighted in CPI – 5.35% of CPI but 17% of GDP.
Gallup Finds U.S. Unemployment at 9.2% in Mid-May Underemployment is 19.1% — essentially the same as a year ago.
[In other words, despite trillions of dollars in government spending
and Fed intervention, there was little or no employment benefit for
average Americans but increased inflation hammered standards of
living.]
Governors and legislatures across the nation are moving to
cut the length of time unemployed workers can receive benefits, despite
historically high unemployment rates, amid concerns that states may
need to boost taxes on employers to shore up unemployment trust funds exhausted by the jobless benefits.
More than 8 million Americans are drawing unemployment, according to
the Department of Labor. Benefits levels are set and administered by
each state and vary widely.
