Italians to join Europe’s needy, the parable of the Chiropractor

7/11/2011 Portland, Oregon - Pop in your mints…

Investors woke up today and wasted little time in marking down Italian sovereign debt, along with Spanish and Portuguese debt issues.  Why?  The story of the Italians is eerily similar to that of the Greeks, the Portuguese, and the Spanish.  Their government spends more than it takes in.

At this point, all readers of The Mint know that it is impossible for any Government to produce value.  Yet somehow, in our upside down, insane monetary system, it has become acceptable for the western governments to run a reasonable deficit to help pay for their role as the Robin Hood in the current welfare state model.  The European Union even went so far as to attempt to define what constitutes a reasonable deficit as 3% of a nation’s GDP per year.

Now if the government takes in 25% of national income in the form of taxes, which is not an unheard of (if anything it is a low estimate) and then borrows an additional 3% (which has proved an elusive target), then 28% of the welfare state’s economy is devoted to income “redistribution.”

While the term “income redistribution” does not fly well with most voters, the Government’s "investment" decisions are cleverly disguised as Social Security, Health Care, Defense, and Education.  Most will recognize that these are important investments, which leads us to the logical question:
Why leave these investment decisions up to the Government?

This question is rarely asked, and most seem content to let the Government continue in their collective role as Robin Hood.  It should come as no surprise, then, that a great deal of time and what would otherwise be productive energy goes into influencing Robin Hood’s decisions as to whom the poor are at the moment.  Bill Bonner at The Daily Reckoning calls this outsized effect of Government in the economy a “Zombie Takeover.”

With the Zombies creatively destroying a minimum of 28% of GDP in a modern welfare state, perhaps it is a testament to the resilience and productivity of the citizenry that any real progress can be made under such circumstances.

Fortunately (or unfortunately for those in the zombie class) the insanity is coming to an end.  As the government’s destruction of wealth accelerates, even elected officials will have to admit that the bad decisions that all of this accumulated debt represents do not go away just because one denies that they exist.

In fact, attempts to solve the problem of too much debt by creating more currency are futile, as each unit of currency creates a unit of debt which must be dealt with at a later date.  This is the glory of modern monetary theory.  It binds the world together in slavery.  It is also its Achilles heel, which is now exposed, waiting to be stricken.

How and when will this finally occur?  It will be like the man with back pain who finally goes to visit the chiropractor.  The gradual spinal realignment that he had hoped to achieve by doing simple stretching exercises (austerity) is not taking place, in fact, his back problems have gotten worse.  Once in the exam room, he will be laid down swiftly on the chiropractor’s table.

Then chiropractor will move into place, interest rates will rise, and a series of pops will go off in the patient’s spine.  Naturally, the popping sounds are the troubled EU nations defaulting on their sovereign debt in unison, which is what is about to occur.

Will the patient then get up and go on his way, sore but better off for the treatment?  Or perhaps the better question is; do zombies even use chiropractors?

Meanwhile in the US, the political theater that is the debt ceiling negotiations may be the catalyst that sends the US Treasury market into a much deserved tailspin.  We have speculated about this almost incessantly and still cannot believe that it may happen.

But while the EU goes to the chiropractor, the US may prefer to rely on the prescription drugs of fiscal and monetary stimulus for as long as they appear to work in a futile attempt to reassure the zombies that all is well.

The US will simply destroy the value of the currency, completely and irreversibly.  Why else would they pick a fight with Iran at this point?

That makes each dollar that one holds like holding an M80 firecracker with a lit fuse.

How long will you hang on?

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

P.S.  For more ideas and commentary please check out The Mint at www.davidmint.com 

Key Indicators for July 11, 2011

Copper Price per Lb: $4.32
Oil Price per Barrel:  $94.99
Corn Price per Bushel:  $6.81
10 Yr US Treasury Bond:  2.92%
FED Target Rate:  0.07% JAPAN HERE WE COME!
Gold Price Per Ounce:  $1,554 PERMANENT UNCERTAINTY
MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.2%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  12,506 TO THE MOON!!!
M1 Monetary Base:  $2,020,000,000,000 RED ALERT!!!
M2 Monetary Base:  $9,112,300,000,000 YIKES!!!!!!!


*See the MINT Perceived target Rate Chart.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

A US Default? Into the Great Unknown

6/29/2011 Portland, Oregon – Pop in your mints…

Much has happened in the financial markets in this past week, and much will happen in the coming weeks.  But perhaps what is most notable is what has not happened.

Namely, the US Congress has not raised its self imposed credit card limit.  For an entity that is already $14.3 Trillion in debt ($4 Trillion of which reportedly comes due in the next 12 months) with no realistic plan to pay for it, this is suicide.  What are they thinking?

The two parties are in agreement one count, they need to save $2 Trillion dollars over 10 years.  Why this sum has been identified as the cure for what ails the country's finances is anybody’s guess.  Unfortunately, but not surprisingly, there is no agreement as to how to get there.

Where will they find $2 Trillion?  Tax the rich, screams Obama, repeating the eternal populist sentiment.  Stop spending, say the Republicans, using the circumstances to make a push for “limited government.”

Editors Note:  There is no hope for limited government with the current two party system in place, therefore the Republican’s stance is entirely a façade.

The President has taken the extraordinary step of asking Congress not to recess over the Fourth of July, as is their custom, calling their lack of agreement akin to his daughters not completing their homework.  While the President makes a quaint metaphor, we believe that Obama’s daughter’s homework is probably more challenging than Congress’s task of balancing the budget.

Obama tells the GOP to get their "homework" done

 Balancing a budget is simple.  It just takes courage.  It seems that courage is in short supply in Washington DC these days.

Without internal fortitude to press the Americans along, a little external pressure is beginning to be applied.  First, the Treasury’s latest 7 year bond auction did not go as well as planned as investors demanded 2.43% to hold US paper for a sabbath cycle.  Without the FED at the table, it is hard to imagine how it could have gone well.  Bond Market participants are beginning to wring their hands.

Then comes word that the IMF is beginning to apply pressure, eloquently reminding the Americans of what they should do and why they should do it.  It is worth noting that the IMF appears to be the last to know about such things so we will excuse their apparent surprise at the lack of inaction (they are most likely not informed MINT readers like yourself):

“…the federal debt ceiling should be raised expeditiously to avoid a severe shock to the economy and world financial markets,"

Yeah, tell us something we don't know.  And then, true to their holier than thou, infallible status, they give the Americans advice on how to do it:

"We see early political agreement on a comprehensive medium-term consolidation plan based on realistic macroeconomic assumptions as a cornerstone of a credible and cyclically appropriate fiscal adjustment strategy,"

Great!  Thanks for the incomprehensible and totally impractical advice.  This type of drivel simply solidifies our opinion that the IMF is a worthless institution and could be categorically ignored if it were not so insistent upon meddling in financial matters on a global basis.

Meanwhile, we are getting to see first hand what happens to a country that gives up control over its currency and then listens to the IMF for advice and is forced to take a loan from them.  Greece, is giving the world a glimpse at how popular austerity is with the masses.


The scene that was carried out in the Middle East in the Spring is set to take place in Europe and England over the summer months.


How long until it crosses the Atlantic?


Another event that may occur as interested parties begin to reduce exposure to US Treasury debt is a liquidity crunch that will start in early July.  Apart from the debt ceiling uncertainty, the Dodd-Frank financial reform rules are set to begin to do their damage to the financial system on July 15th.  

If they do not forestall these rules as many banks are begging them to do, the US and global economy will take their first tender steps into the great unknown, a world without political or real capital to act a a backstop for failures.


It will be dangerous and exciting.  And, just like a fireworks show, will be best enjoyed from a safe distance.  Keep your money close at hand, meaning out of banks and preferably in precious metals or anything tangible, and enjoy the show!

Stay Fresh!

David Mint

Email:  davidminteconomics@gmail.com

P.S.  Please check out our latest 72 Hour Call at www.davidmint.com

Key Indicators for Wednesday, June 29, 2011

Copper Price per Lb: $4.20
Oil Price per Barrel:  $94.93 A FAILURE TO INFLATE, WILL TREND LOWER

Corn Price per Bushel:  $6.98   MONETARY POLICY IS NOT WORKING
10 Yr US Treasury Bond:  3.11%
FED Target Rate:  0.08%  UH OH!

Gold Price Per Ounce:  $1,511 BENEFITING FROM PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.25% 
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  12,261
M1 Monetary Base:  $1,895,400,000,000 RED ALERT!!!  
M2 Monetary Base:  $9,086,900,000,000 YIKES!!!

*See the MINT Perceived target Rate Chart.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

Grants for Democracy? It’s Getting Ugly in Spain, US Housing Capitulates, Greek Government to Default on Austerity and then Simply Default

5/27/2011 Portland, Oregon – Pop in your mints…

We've said it before, things are beginning to happen at a rapid pace and the authorities are absolutely and completely helpless to do anything about it.  Not for lack of money, have you, for they are second in line behind the banks to pick at the money tree.  No, the authorities lack the one thing that is indispensable to getting things done.  Credibility.

Have things improved for you, fellow taxpayer?  Unless you are a banker, lobbyist, are a contractor who works for a banker or lobbyist, the answer is probably no.

And we haven't even begun to talk "austerity" on US shores.

But first, we are obligated to take a peek at what the G-8 is doing.  We suspect we know but it is important to confirm ones suspicions.

From the Associated Press:

DEAUVILLE, France (AP) -- Rich countries and international lenders are aiming to provide $40 billion in funding for Arab nations trying to establish true democracies, officials said at a Group of Eight summit Friday.

Officials didn't fully detail the sources of the money, or how it would be used, but the thrust was clearly to underpin democracy in Egypt and Tunisia -- where huge public uprisings ousted autocratic regimes this year -- and put pressure on repressive rulers in Syria and Libya.

We suspected more aid to someone but this appears even more misguided than we thought.  The first line of the second paragraph is especially laughable but you can see where this is going.  We speculated Wednesday about the events in Palestine getting ready to take center stage, largely as a distraction to the "utter and complete collapse" of the world's current financial system.

The G-8 is now throwing what is left of their credibility into extending their influence in the Middle East.  They have Iraq, Afghanistan, and now Egypt and Tunisia as footholds.  Will they be strong enough to hang on to this newfound influence?  Only time will tell if the new regimes can be bribed as easily as the old ones.

The credibility of the Western Governments and their worn out welfare state economic models is nearly spent.  In Greece, the IMF / Eurozone bailout participants are finding out that the Greek politicians don't have the collective stomach to play the repo man on their countrymen's future.

It appears that the government is refusing more austerity measures and is rethinking whether or not this whole Euro adventure is such a good idea.  Failure to agree now places the spotlight on the IMF / Eurozone plunge protection team.  Will they have the stomach to let Greece default?

The gauntlet has been thrown down, and what happens to Greece will set the tone for how the inevitable sovereign defaults of the Western Governments are likely to play out.  Are the Greeks the Lehman Brothers of Sovereigns?

On the other side of the world, Japan's sovereign debt was officially downgraded as if to underscore the fact that the world monetary system is hurtling towards a catastrophic failure.

Back in Europe, a sequel to the Greek experience is now playing itself out across the Mediterranean Sea on the Iberian Peninsula.  The youth in Spain are finally arising as they clearly see that the politicians have shamelessly "handed their future" to the nation's banks.

With protests in nearly every major city, their resolve grows with every passing day.  In Barcelona, one day before Barça plays for the Champions Cup against Manchester, the authorities attempted to clear Plaça Catalunya to clean it in anticipation of the celebrations that would surely take place there when Barça, led by the great Liionel Messi, wins the cup.

With over 100 persons injured between protestors and police officers, they will now have to clean up blood in the square.  The Spanish authorities, not unlike their western peers, just don't get it.  The old way of doing things is over, fini.  The youth are taking matters into their own hands.  With 45% of the Spanish youth unemployed, their sheer numbers, if they stay at it, will simply overwhelm the authorities.

All the same, we are pulling for Barça tomorrow.

A final piece of news to share with you here at The Mint, the US Housing Market has finally capitulated. In other words, it is now safe to buy a house.  The hope that the US Government and Central Bank could somehow revive this market has left town on the same train as the US Government's credibility.

The US Government lost its credibility most recently as it continues to bicker over meaningless spending cuts as the nation thunders towards an imminent default on its sovereign debt and by affirming the Unconstitutional Patriot Act, which essentially gave legislative authority for the US to become the wards of an international police state.

The brave souls who gave their lives to create and protect a free America must be rolling over in their graves this Memorial Day.

Will there be a generation brave enough to reclaim it?

Stay Fresh!

David Mint

Email:  davidminteconomics@gmail.com

P.S.  Please check out our latest 72 Hour Call at www.davidmint.com

Key Indicators for Friday, May 27th, 2011

Copper Price per Lb: $4.16
Oil Price per Barrel:  $100.74

10 Yr US Treasury Bond:  3.06%
FED Target Rate:  0.09% FED IN DESPERATION MODE!!!!

Gold Price Per Ounce:  $1,537

MINT Perceived Target Rate*:  2.25% INFLATION HERE WE COME!!!!
Unemployment Rate:  9.0%
Inflation Rate (CPI):  0.4%
Dow Jones Industrial Average:  12,441
M1 Monetary Base:  $1,892,800,000,000 THE CRACK-UP BOOM BEGINS!!!!
M2 Monetary Base:  $9,036,600,000,000 MORE FUEL FOR THE CRACK-UP BOOM!!!!

*See FED Perceived Economic Effect Rate Chart at bottom of blog.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

Greece to exit Euro and Palestine to take Center Stage

5/25/2011 Portland, Oregon – Pop in your mints…

If the events of the past week have not convinced you that there has been a permanent, fundamental change in the financial markets, perhaps nothing will.  As much as the numbers seem to stay the same, one has the sense that something is very, irreparably, wrong.

Trust that sense.

If you are trying to put your finger on what is causing the uneasiness you are feeling, allow us to offer our humble opinion.  The world is coming to the realization that all of the financial rescue programs that have been floated as the "cure" to the financial crisis by various Central Banks and Governments have done nothing useful.

To put it harshly, they have not only failed, they have made things worse.

What they have done is to buy time for the banks to sell out of their losing positions and be made whole at the taxpayers' expense.  Now, the gig is up.

The taxpayers see that the fix is in and are calling for the heads of their elected officials.  For the most part, the heads have been handed over peacefully via democratic elections.  Those that still have their heads are quickly backpedaling and distancing themselves from any Government sponsored bailouts.

With the resolve of the Governments of the west to continue "bailing out" the financial sector clearly in doubt, the heavy lifting is left to the ultimate and most deserving scapegoats, the central banks.

But what can they do?  Their only solution involves further exposing themselves for the fraud they are.  "If the central bank can simply print the money to pay debts, why should I work?" is the cry from the Proletariat.

That cry is being heard steadily in Greece and now Spain.

Austerity Protests in Athens today courtesy of occupiedlondon.org

It has taken a different tone in the Arab world, where revolution has increasingly been the rule ever since the Gregorian calendar turned to 2011.  The media explains what is happening in the Middle East as a "cry for democracy," as if all of these people would be appeased if they could simply have the pleasure of voting for their dictator, as we do in the west.

No, the Middle East is burning due to the confluence of 1,300 years of festering hatred which for the past 90 years has had the Israeli / Palestinian conflict as its flashpoint and rapidly rising prices for basic necessities, which have always been dear in the desert regions.

These rising prices, of course, are the direct result of the debauchery of the currencies by western central banks.

From our vantage point, it is clear that the central banks have no more room to maneuver and that they will soon throw in the towel as well.  Central banking as we know it is expiring.

So who will bail out the western governments and central banks?  The taxpayers who have grown to loathe them?  Don't count on it.  The simple answer is that no one will.  What logically follows is that the world is about to embark upon an amazing journey called "price discovery."  A journey that has been delayed for three long years by the meddling of the authorities will now begin without further delay.

One of the first discoveries will be to find out what are Greek Bonds are worth.  Nobody really knows, but unofficially the 10 year note is trading at 51 cents on the dollar.  And now the barbarians from the north are storming down demanding that the Greeks make good on their austerity measures or else lose their support which would mean an almost immediate default by the Greeks.

But with riots becoming a way of life, the Greeks are beginning to wonder aloud whether or not the pain is worth it.  Our guess is that the barbarians will relent in an attempt to save the Euro.  You see, the Greeks still hold the ultimate trump card, as do we all, of defaulting on their debt and doing business in another currency.  For the Greeks, it would mean a return to the drachma.

Will they play it?

With the utter and complete failure of the world financial system at hand, those who soberly decided not to heed Harold Camping's rapture warning and are looking forward to a world that will exist post October 21.  We believe that the world will increasingly turn their collective attention to Palestine.

We recently read The Haj in an attempt to beef up our understanding of the conflict.  You can read our review of this book at http://davidmint.com/?p=361.

The summary is that Palestine needs a miracle for there to be peace between the Israelis and the Palestinians.  This conflict will move to center stage as a distraction to the aforementioned utter and complete failure of the world financial system.

What has become crystal clear to us over the past two months is that if there is not peace in Jerusalem, there cannot be peace in the world.  Those of us who believe in Jesus (if you do not, please accept this as an invitation to believe) will not be raptured until there is peace in Jerusalem.   We do not know exactly why, we simply know that this is true.

For if there is peace in Jerusalem, there will be peace in our hearts.

Once we are raptured, the tribulation will begin, which is why we urge you to accept Jesus now.  You have nothing to lose and eternity to gain.

Stay Fresh!

David Mint

Email:  davidminteconomics@gmail.com

P.S.  Please check out our Affiliates!

Key Indicators for Wednesday, May 25th, 2011

Copper Price per Lb: $4.10
Oil Price per Barrel:  $101.47
10 Yr US Treasury Bond:  3.13%
FED Target Rate:  0.10% FED IN DESPERATION MODE!!!!
Gold Price Per Ounce:  $1,526
MINT Perceived Target Rate*:  3.25%
Unemployment Rate:  9.0%
Inflation Rate (CPI):  0.4%
Dow Jones Industrial Average:  12,395
M1 Monetary Base:  $1,880,400,000,000 THE CRACK-UP BOOM BEGINS!!!!
M2 Monetary Base:  $9,011,900,000,000 DESPERATION!!!!

 *See FED Perceived Economic Effect Rate Chart at bottom of blog.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

Deflation has been Defeated, Woe to us All!

4/19/2011 Portland, Oregon – Pop in your mints…

It is hard to imagine that the amount of negative news has ever been more abundant.  Reasons to worry abound.  At The Mint, we have speculated that bad news and the worry it causes is, to some extent, a seasonal phenomenon.  Not that the events that cause the news only occur during certain seasons, rather that mankind is more apt to worry about the news during the Spring and Fall in either hemisphere than during other times of the year.  It is a time when preparations for the upcoming summer or wintertime are being made and it is natural to worry as to whether or not one's preparations are adequate.

However, even discounting seasonal worry, the combination of troublesome events that are being reported at present is staggering.  Under normal circumstances, any of the catastrophic events and wars that have occurred recently on its own would be reason for a stock market collapse.  Taken together, it is a wonder that stocks even have a pulse.

Yet in what can only be described as the eighth wonder of the world (ninth, if you count Andre the Giant), the stock, bond, and commodity markets are all racing higher at various speeds.

Can the Economic Recovery rival Andre the Giant

 as the 8th wonder of the world?

What to make of it?  Here at The Mint, we look at the data and believe that there is only one reasonable conclusion:

The Central Bankers have won:  Deflation has been Defeated.

Mint.com for Android – Keep Your Money in Your Pocket

As you may recall, three and one half years ago, give or take, the Financial authorities realized that there was a four alarm fire occurring in the financial markets.  Soon, every major Central Bank and Government were on the scene and proceeded to pump liquidity into the system to avoid a deflationary collapse that, as we were told, would bring an end to the world as we know it.

Now, much like George W. Bush in Iraq, we survey the landscape in the financial markets and, with equal confidence declare "Mission Accomplished."

Just like the US Military in Iraq, the financial authorities are announcing plans for an "orderly handover of power" from the public sector to the private sector.  

Just like the US Military in Iraq, the financial authorities are finding the handover of power to be much easier in word than deed.

Now that the financial authorities have defeated deflation (or Saddam Hussein if you are still following the Iraqi war parallel), they are finding that instead of the smooth transition of power that they apparently had hoped for there exists a cadre of violent elements in the economy which are jousting to fill the vacuum that the financial authorities and governments of the world will leave as they begin to pull liquidity out of the markets.

Instead of supply and demand being in balance, even more grotesque ratios of debt to equity and skyrocketing commodity prices are emerging as the rule of the day and equity, bond and commodity markets are walking time bombs.  Essentially, the later condition of the markets is worse than the former.

Didn't Jesus say something about this in Luke 11:24-26?  More than a clean heart, Man needs to have his sinful nature cleansed from him.  In the same way, more than liquidity, the financial system needs to have its bad debts written off, no matter how painful it may be.

Free money (or liquidity) is not the ultimate answer to the imbalances in the financial markets just as democracy does not appear to be the ultimate solution to a peaceful and prosperous Iraq.  It may even be breaking down in the United States if the recent partisan wrangles over the budget and debt ceiling are any indication. 

No, we are just now beginning to see the "unforeseen" (yet strangely logical) consequences of flooding the world with liquidity.  The war against deflation has been won, but the pent up demand and distorted production patterns that the war has left in its wake are now threatening to unleash inflation on a scale not seen for nearly a century.

Woe to dollar holders everywhere, for this inflation is now taking on a life of its own.

Stay Fresh!

David Mint

Email:  davidminteconomics@gmail.com

P.S.  Please check out our latest 72 Hour Call at www.davidmint.com

Key Indicators for Tuesday, April 19th, 2011

Copper Price per Lb: $4.26
Oil Price per Barrel:  $108.40 SKYROCKETING!!!!
10 Yr US Treasury Bond:  3.36%
FED Target Rate:  0.10% FED IN DESPERATION MODE!!!!

Gold Price Per Ounce:  $1,495  SKYROCKETING!!!!

MINT Perceived Target Rate*:  3.25%
Unemployment Rate:  8.8%
Inflation Rate (CPI):  0.5%
Dow Jones Industrial Average:  12,267
M1 Monetary Base:  $1,954,200,000,000 DESPERATION!!!!
M2 Monetary Base:  $9,045,900,000,000 DESPERATION!!!!

*See FED Perceived Economic Effect Rate Chart at bottom of blog.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

Is it Seasonal or is the US Dollar Losing Reserve Status more quickly than we think?

4/14/2011 Portland, Oregon – Pop in your mints…

This week we have witnessed a relentless increase across the board in the price of most commodities.  Some of this action is attributable to seasonal factors.  Spring is the time to plant in the Northern Hemisphere and the time to Harvest in the Southern.  These events create a flurry of activity in commodities because at this point there are many unknowns. 

In the North, they are trying to decide what to plant which creates a sort of statistical vacuum for speculators to fill with the assumption that there will be scarcity.  In the South, they are beginning to tally what the combination of the earth along with their toil has afforded them as sustenance for the winter.  Naturally, as when the votes of a big election are being tallied, there is a lot of speculation.  Speculators jump on this informational vacuum and the feeling of scarcity causes them to, you guessed it, bid up commodities.

The whole flurry of activity itself involves lots of John Deere tractors and combines, fertilizer, water and manpower and, you guessed it, oil.  All of which involves increased demand for various commodities and helps to create a general anxiety which sweeps the planet.

It should come as no surprise that God chose to ordain the two great feasts during these times.  The Passover in the spring of the North and the Feast of Trumpets in the autumn.

Some of this seasonality in commodity prices is new phenomena, some of this has been around since man first was called into being on the sixth day.  Whatever the underlying reason, the confluence of these events tends to cause prices to rise in money terms in the autumn and spring in both hemispheres.  Modern transport methods and global trade have helped to smooth this out but natural forces have always trump man's efforts.  Even the advent of the internet has not changed this fact.

But what to make of the recent run up in the prices of just about everything except paper money?  There is something more to these increases than the regular seasonal trends.  Yes, fellow taxpayer, it appears that the inflation that the FEDS of every nation on the planet have been baking in over the past three years is beginning to set up.   

George Soros, a famous investor who made a great deal of his fortune and reputation by shorting the British Pound in the early 1990's held an April 8^th conference that some are hailing as "Bretton Woods III", an homage to the past two conferences which reformed currencies and in turn created the present world order that we now live in, appears to have called for an end to the dollar as the world's reserve currency.  This is from an interview with Mr. Soros by the Financial Times in November of 2009:

You can read more about the speculation on Mr. Soros' intentions here.

Please follow this link for a long and interesting Q & A at the conference with Mr. Soros and Paul Volcker fielding questions.

The fact that this conference is being held, taken along with the fact that China has been amassing large amounts of gold and silver, is giving credence to the speculation that the Chinese currency may be in a position to take the baton of reserve currency status from the dollar.  If this is true, we cannot overstate what this means for currency and bond markets and more importantly the cost of everyday items for those attempting to pay for them in dollars.

To state what may be obvious, the US dollar will be worth much less in trade than it is today.

While the European and Chinese Central Banks have recently raised rates, the US FED still has the printing press on full throttle.  If our speculation here at The Mint is correct, the FED, like the driver of a semi-truck that is careening down a steep mountain road, may not be able to apply the brakes and save the remaining value of the US dollar.

Then again, maybe they don't want to.

Stay Fresh!

David Mint

Email:  davidminteconomics@gmail.com

P.S.  Please check out our latest 72 Hour Call at www.davidmint.com

Key Indicators for Thursday, April 14th, 2011

Copper Price per Lb: $4.26
Oil Price per Barrel:  $109.41 SKYROCKETING!!!!
10 Yr US Treasury Bond:  3.485%
FED Target Rate:  0.08% FED IN DESPERATION MODE!!!!

Gold Price Per Ounce:  $1,462  SKYROCKETING!!!!

MINT Perceived Target Rate*:  3.25%
Unemployment Rate:  8.8%
Inflation Rate (CPI):  0.5%
Dow Jones Industrial Average:  12,285
M1 Monetary Base:  $1,954,200,000,000 DESPERATION!!!!
M2 Monetary Base:  $9,045,900,000,000 DESPERATION!!!!

*See FED Perceived Economic Effect Rate Chart at bottom of blog.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

US Government Borrowing Nominally Breaches Debt Ceiling as Congress “Argues Over a Bar Tab on the Titanic”, One step closer to an International conflict in Libya

4/4/2011 Portland, Oregon – Pop in your mints…

The Western Governments and their respective Central Banks, (save Germany and Ireland), are in denial.  They are bankrupt.  You can only hide bankruptcy so long before economic law begins to reign.  Not even the world's most powerful monetary authority nor its most powerful military can stop it.  The laws of economics are as immutable as the God who put them in place.  

Our current speculation at The Mint is that the Western Governments are about to play what they believe to be their trump card, a large scale conflict otherwise known as a world war.  Why else would the US be "reluctantly" tangled up in a military operation in North Africa?  Now there is talk of an Obama Doctrine which, like the Monroe Doctrine, will give credence to further military intervention in far off lands.  This is a sad state of affairs, but as our wife gently reminds us if we begin to fret, "es lo que nos toca vivir (it is what we have been chosen to experience)."

Meanwhile, back at home, the US Congress continues to neglect its duties.  Former U.S. Comptroller General David Walker equated the current budget debate on Capitol Hill to "…arguing about the bar tab on the Titanic."  We love the analogy but shudder at what it implies.

As the bickering continues at the Federal level, the problems with US State and Local government finances are beginning to come home to roost.  Jamie Dimon, Chairman and CEO of JPMorgan Chase, thinks that 100 municipalities will not make it.

And out of nowhere, the latest US Treasury auctions sent the total outstanding US Debt over the debt ceiling.  OOOOOOOOPPPSSS!  According to zerohedge.com:

"the most recently disclosed total debt was 14,211,567,662,931.23 as of March 28. This excludes the settlement of all of this week's auctions which amount to $35 + $35 + $29 billion (including today) or $99 billion. Adding the two amounts to $14,310,567,662,931.23. As a reminder the debt ceiling is $14,294,000,000,000.00. In other words, the total US debt just passed the debt limit - break out the Champagne! Granted there is a buffer of $52.2 billion between the total debt and the debt actually subject to the ceiling, meaning that America is not in default, yet."

As we have speculated here at The Mint, Armageddon is upon the bond markets.  Perhaps not coincidentally, on Friday the EU gave approval to undertake military operations on the ground in Libya to support the humanitarian mission, which up until now has involved dropping bombs from jets. 

The world is about to undergo what historians will call a "fundamental" shift.  At least they will have the benefit of know what happened.

For those of us who are here now, "es lo que nos toca vivir."  We will sit glued to our seats watching the end of the world as we know it!

And I feel fine!  If you trust Jesus, you probably do as well.

Stay Fresh!

David Mint

Email:  davidminteconomics@gmail.com

P.S.  Check out our new 72 hour call at www.davidmint.com!

Key Indicators for Monday, April 4th, 2011

Copper Price per Lb: $4.26
Oil Price per Barrel:  $107.94 SKYROCKETING!!!!
10 Yr US Treasury Bond:  3.45%
FED Target Rate:  0.10% DESPERATION!!!!

Gold Price Per Ounce:  $1,429

MINT Perceived Target Rate*:  3.25%
Unemployment Rate:  8.8%
Inflation Rate (CPI):  0.5%
Dow Jones Industrial Average:  12,377
M1 Monetary Base:  $1,911,900,000,000 DESPERATION!!!!
M2 Monetary Base:  $8,980,000,000,000

*See FED Perceived Economic Effect Rate Chart at bottom of blog.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

No Blood, No Life - The Lifeblood of The Currency Regime Running Dry

4/1/2011 Portland, Oregon – Pop in your mints…

"The life of every creature is in its blood..."

Leviticus 17:14

There is so much happening! maybe it is just April fool's day, maybe something more.  We left off on Tuesday attempting to explain why debt (i.e. slavery) is essential to the survival of a currency regime.  The expansion of debt has been the sole goal of the Western Governments and their Central Banks ever since the Central Banks got their foot in the door on currency matters.  Given what we know about government efforts and the inherent laziness bred by the money lending profession, it should come as no surprise that they are failing to attain this sole aim.

Until autumn of 2007, they were succeeding.  People saw credit as a boon, a way to bring future consumption into the present, which is exactly what it is.  In this sense, credit is like time travel.  Then, out of nowhere, the people decided that they had enough debt and decided to begin paying it down.  It turns out you can have too much of a good thing, even consumption.

Take this exhaustion of consumption together with Mankind's awakened desire to be free and the debt peddlers don't stand a chance with the people.  Seeing that the game with the public was up, the Central Banks turned to the "People's Government" to further enslave them.  This is where we are today.

Unfortunately, the Western Governments are insolvent, so the Central Banks are now printing money (popularly known as quantitative easing or QE) in order to keep the system of debt on life support.  What the world is coming to realize is that the existence of QE = the failure of a Central Bank's currency regime. 

The Central Banks are now fighting a losing battle against a predominant bias to deleverage (pay down debt).  Their game was easy when they were riding the trend.  They will now go bankrupt, in shockingly rapid fashion, trying to fight it.

Justice Preparing to Mete itself out

 But a Central Bank does not go bankrupt the way a normal institution goes bankrupt.  They do not come out and announce insolvency, send notices to creditors, and wait for the judge to divide what is left of their assets.  Oh no, fellow taxpayer, it is much more entertaining than that!

The Central Bank's only judge is merciless and quick to execute both judgment and sentencing.  That Judge is called "public opinion," and you can read his verdict against the currency regime in the commodity markets over the next two months.

Will war in the Middle East be enough of a distraction?

Stay Fresh!

David Mint

Email:  davidminteconomics@gmail.com

P.S.  Check out our new 72 hour call at www.davidmint.com!

Key Indicators for Friday, April 1st, 2011

Copper Price per Lb: $4.26
Oil Price per Barrel:  $107.94 SKYROCKETING!!!!
10 Yr US Treasury Bond:  3.45%
FED Target Rate:  0.10% DESPERATION!!!!

Gold Price Per Ounce:  $1,429

MINT Perceived Target Rate*:  3.25%
Unemployment Rate:  8.8%
Inflation Rate (CPI):  0.5%
Dow Jones Industrial Average:  12,377
M1 Monetary Base:  $1,911,900,000,000 DESPERATION!!!!
M2 Monetary Base:  $8,980,000,000,000

*See FED Perceived Economic Effect Rate Chart at bottom of blog.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.