Saturday, March 5, 2011

+ 7.75 % Also In February Fifth Good Consecutive Month For Our Galaxy Portfolio Systems

Nella sottostante tabella sono raffigurate le equity line mensili dei trading systems che compongono il nostro portfolio systems Galaxy ed il riassunto MTM dell’operatività dal Novembre 2009. Galaxy chiude con un ottimo risultato anche il mese di Febbraio, dopo un equivalente risultato nel mese di Gennaio, portando a 15.29 % la performance del 2011. Quello appena chiuso è il quinto risultato utile consecutivo a livello mensile dopo la breve pausa alla fine dell’estate dello scorso anno. L’equity continua a svilupparsi in maniera armonica mantenendo un’inclinazione positiva e costante grazie all’elevata diversificazione all’interno del portfolio. I risultati storici di Galaxy Portfolio System sono disponibili ai seguenti link:, I risultati dei singoli trading systems sono a disposizione al seguente link:

In the table below you can see the monthly equity line of the trading systems that make our Galaxy portfolio systems and the MTM performance summary since November 2009. Galaxy ends with a good result also the month of February, after a similar result in the month of January, bringing the performance to 15.29 % in 2011. One just closed is the fifth consecutive positive months after the brief pause at the end of the summer last year. The equity continues to grow in harmony while maintaining an upward slope and steady thanks to high diversification within the portfolio. Historical results of Galaxy Combined Portfolio System are available at the following links:, Historical results of single trading systems are available at the following link:

Galaxy Risultati Febbraio

Equity Line Trades, Giornaliera e Mensile di Galaxy / Trades, Daily and Monthly Galazy Equity Line
Galaxy Trades Galaxy Time Galaxy Settimanale

Performance MTM Mensile di Galaxy Portfolio System con un capitale iniziale di $ 200.000
Monthly MTM Performance of Galaxy Combined Portfolio System with $ 200K initial capital


1.19 %
2.90 %
(4.28 %)
24.49 %
2.99 %
1.76 %
15.62 %
4.35 %
10.60 %
(0.41 %)
(4.73 %)
1.75 %
12.80 %
1.50 %
7.54 %
7.75 %

Material in this post does not constitute investment advice or a recommendation and do not constitute solicitation to public savings. Operate with any financial instrument is safe, even higher if working on derivatives. Be sure to operate only with capital that you can lose. Past performance of the methods described on this blog do not constitute any guarantee for future earnings. The reader should be held responsible for the risks of their investments and for making use of the information contained in the pages of this blog. Trading Weeks should not be considered in any way responsible for any financial losses suffered by the user of the information contained on this blog.

Fed Emperor Nakedly Monetizing Debt, Desperately Seeking Stability

By: Jesse

The Fed is monetizing debt, colloquially known as 'printing money.'

At this point you either understand this or you do not,  and if not it is probably because you will not to do so. 

But it is the reality we have, and presents fairly volatile conditions for the world financial system. And the limit to the monetization are the value of the US bonds, and the American dollar which are notes of zero duration.

The monetization cannot revitalize the economy because most of the problems that led to the financial crisis remain as they were.  The government of both parties is caught in a credibility trap, and under obligations to the monied interests for campaign funds and compromised by past favors granted.

Adding liquidity and stimulus at this point is like pouring enormous quantities of gasoline into a car that has just been towed out of a ditch, with four flat tires, a seized transmission, and a crushed radiator, and saying, "We'll be back on the road anytime now once we fill 'er up."   And austerity is like making the passengers get out and push.  The Congress, who failed to properly maintain the vehicle by taking kickbacks from dishonest mechanics, the Banks, sits in the front seat eating doughnuts, urging the middle class to stop whining and push harder. And Bernanke is bouncing up and down on his seat saying 'vrooom, vrooom,' and the corporate media and economists marvel at his accomplishments. It is less a recovery than a tragedy.

The Fed has tried this twice now. First in response to the Asian/Russian currency crisis and Y2k panic, with the resulting tech bubble. And then in response to the tech bubble collapse and 911, with the resulting housing bubble and a bloated and virulently fraudulent financial sector. And we expect the result to be different this time because....?

All that is required is a stray spark, and you will see the results. If you enjoyed the Russian currency crisis, you will love the US currency crisis. Just be sure to wear sunglasses and watch from a distance, and higher ground. Unfortunately the taxis in this area only take hard currencies.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained recovery. And reform does not mean selectively defaulting, a nice form of stealing, from the old and the weak.

Fed Treasury Purchases `Monetizing Debt,' May Spur Inflation, Hoenig Says
By Steve Matthews and Caroline Salas
Mar 2, 2011 9:56 AM ET

Federal Reserve Bank of Kansas City President Thomas Hoenig said the central bank is “monetizing debt” with its purchases of U.S. Treasuries, a program that he says may spur inflation.

“Yes, we are monetizing debt,” Hoenig said today in a speech in New York. “You buy bonds and you monetize debt.  Right now, a lot of that is going into excess reserves so it is not having an immediate effect on inflation. It will initiate inflationary impulses. It takes time.”

Hoenig, the lone dissenter from every Fed meeting last year, warned that the central bank’s near-zero interest rates and record monetary stimulus could lead to asset price bubbles and increase inflation in a few years. He voted against the Fed’s plan to purchase $600 billion in U.S. Treasury securities through June during the final two meetings of 2010.

Hoenig told the Council on Foreign Relations the Fed needs to explain how it plans to reduce its record $2.54 trillion balance sheet. While he would avoid “shock therapy” of selling assets all at once, “we want to begin to show how we will withdraw that.”

Policy makers were divided over whether further evidence of a strengthening recovery would warrant slowing or reducing the $600 billion of purchases, according to minutes of their January meeting...."


See the original article >>

Informa upgrades South American soybean forecasts


US farm officials will on Thursday implement hefty upgrades to estimates for South American soybean crops – at least, if a preview from Informa Economics is anything to go by.
Informa analysts lifted by 2.1m tonnes to 71.4m tonnes their forecast for Brazil's soybean crop, the world's second biggest, which would set a record by a margin.
The estimate for Argentine production, the third-ranked crop, was hiked by 3.0m tonnes to 52.0m tonnes.
The upgrades come amid a scramble of revisions as analysts position ahead of the US Department of Agriculture's next monthly Wasde report on world crop supply and demand, a key event of the farm commodities calendar.
Harvest doubts 
Many observers are declining to upgrade estimates for the crops.
Informa Economics and (USDA) estimates for South American crops
Argentine soybean production: 52.0m tonnes, (49.5m tonnes)
Brazilian soybean production: 71.4m tonnes, (68.5m tonnes)
Argentine corn production: 21.0m tonnes, (22.0m tonnes) Brazilian corn production: 53.8m tonnes, (51.0m tonnes)
Informa's estimates came hours after the USDA's Buenos Aires office cautioned against overoptimistic forecasts for the Argentine soybean harvest, warning that drought had in some places not broken sufficient to spare significant yield losses.
Other observers have warned that rainfall in the Brazil, which has halved the pace of harvesting in some northern areas, may take some of the gloss off the crop, with a few reports of quality concerns.
"The northern harvest is slowed by rain, however the southern harvest weather is near ideal," US Commodities said.
Freight costs leap 
The weather is also gumming up Brazil's underdeveloped logistics, as harvest delays concentrate demand for lorries, while rains hamper unloading.
Unusually, the two biggest soybean producing states in Brazil, Mato Grosso and Parana, "are harvesting at the same time, and there are not enough trucks", Michael Cordonnier at Soybean and Corn Advisor said.
Freight rates in Mato Grosso have risen 10-15% year on year, with those in Parana up25%.
In-country consultant Kory Melby reported a 12-mile queue of some 1,000 trucks waiting to unload at the port of Paranagua.

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1 In 5 Workers Are Underemployed, What is Capitalism?

Decline of the Empire writes: The Bureau of Labor Statistics (BLS) redefined the "official" jobs reality today, as it does every month. The BLS provides the data Americans incapable of thinking outside the box will cite over and over to reassure themselves and any remaining doubters that the economic "recovery" is on track, though that recovery been a bit slower than the True Believers would like to see.

Nonfarm payroll employment increased by 192,000 in February, and the unemployment rate was little changed at 8.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in manufacturing, construction, professional and business services, health care, and transportation and warehousing.

My view now and forever after, is that government statistics should be scrupulously avoided if you have any choice in the matter. If I might quote from my post Blowing Off The BLS Monthly Numbers
The situation has now gotten beyond absurd. I refuse to play this monthly BLS game. It's time to blow off the BLS' monthly numbers. I no longer want my jobs data smoothed, crunched, massaged and otherwise tampered with in any way. I want the data straight, no chaser. It is a matter of confidence and trust—I don't have either. What is the unemployment rate? It stood at 9.8% at the end of January. How do I know this? Gallup polling told me so.
Fortunately for us, Gallup is still polling Americans to determine the reality on the ground.
Unemployment Rate
PRINCETON, NJ -- Unemployment, as measured by Gallup without seasonal adjustment, hit 10.3% in February -- up from 9.8% at the end of January. The U.S. unemployment rate is now essentially the same as the 10.4% at the end of February 2010.

The underemployment rate adds part-time workers who want a full-time job to those who don't have a job.
Underemployment Rate
Underemployment, a measure that combines part-time workers wanting full-time work with those who are unemployed, surged in February to 19.9%. This resulted from the combination of a sharp 0.5-point increase since the end of January in the percentage unemployed and a 0.5-point increase in the percentage working part time but wanting full-time work. Underemployment is now higher than it was at this point a year ago (19.7%).

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A Strong NYSE Stock Market Index

The NYSE Index is an exceptionally important index to follow because of its size, composition, the fact that it embodies so many program trades, and because of the focused activity coming from Institutional Investors.
So, what the NYSE Index is doing, how it is trending, and how strong it is are all very important elements relative to what the rest of the market is doing.
In terms of measuring Strength, using a 9 day and 30 day Relative Strength indicator can be very powerful. As you probably know, the Relative Strength index moves from a value of 0 to 100 with 50 being neutral. Since it is a continuum move from 0 to 100, a level of 50 can seem just part of the movement ... when in fact, it is a critical division level between being Positive and Negative.

This is THE reason why we zero base the Relative Strength Index and call it the C-RSI on our charts. To zero base the RSI index, we simply subtract a value of 50 from each daily reading. That way, a RSI reading of 50 becomes a C-RSI value of 0 which is Neutral. Then ... above or below zero becomes a very clear visual picture of what is happening without having to interpret RSI values.
Here is what is important:

When the 30 C-RSI goes positive with the 9 C-RSI above it, then that is a very strong up condition. When the 9 C-RSI falls below the 30 C-RSI, then market strength is waning. And when the 30 C-RSI goes into negative territory, then the market is in trouble.

When we use the C-RSI indicator, we use it with Market Trending Models, Institutional Accumulation/Distribution data, and with inflowing or outflowing Liquidity data.The combination not only g accurate market shifting signals, it also tells investors WHY a shift is occurring.

So ... take a look at the chart below and see what happened to the Stock Market's strength yesterday.

See the original article >>

Who’s Really Affected By Rising Food Prices

It is certainly old news around here that terrifying inflation in prices, thanks to the monstrous inflation in the money supply caused by the Federal Reserve creating So Freaking Much Money (SFMM) for the last few decades, has caused me to venture to that dangerous precipice between being merely weird and obnoxious, to being a raving lunatic screaming from the rooftop “We’re freaking doomed!”

Of course, I also thunder, “Buy gold and silver! Buy gold and silver! Buy gold and silver!” until my voice is raspy and my throat is sore, only to have my words of wisdom and financial salvation drowned out by the roar of the assembled crowd chanting, “Jump! Jump! Jump!” and I’m trying to yell loud enough to tell them that they have it all wrong, and that “I have no intention of jumping to my death, you morons! But if you don’t buy gold and silver against the horrific inflation in prices unleashed by the Federal Reserve creating so much money, then you are, ironically, jumping to YOUR financial deaths! Hahaha! Go to hell, all of you!”

I even threw down some leaflets of the essay “A Vale of Dollars” by Joel Bowman, Managing Editor here at The Daily Reckoning, in which he writes, “According to data released by the World Bank, food prices rose a stunning 15% from October through January. The World Bank’s own food index now sits just 3% below its 2008 record.”

This revelation did cause some discussion amongst the, apparently few, literate crowd members, and the calls for me to “Jump! Jump! Jump!” faded, and people started talking about how much more food and gas cost.

But for me, I shut up when Mr. Bowman noted that “the price spike prompted” World Bank chief Robert Zoellick to, I assume, rise up out of the neo-Keynesian fog befuddling his apparently congenital stupidity and to remark that “Global food prices are rising to dangerous levels and threaten tens of millions of poor people.”

Well, first off, I gotta tell say that Mister “They calls me Clueless” Zoellick is, again, demonstrating a stunning, complete lack of any real grasp of the situation by laughably estimating that “tens of millions” of people will be adversely affected by food prices soaring, when the real figure is at least ten times that great, if not a hundred times greater, or (more likely) hundreds of times greater than his ridiculous lowball estimate, as everyone in the Whole Freaking World (WFW) will, to one degree or another, be affected by inflation in the price of food because there are very, very few people, if any, in that aforementioned Whole Freaking World (WFW) to whom a soaring price of food is completely insignificant.

So, again, what a moron! Although, this is what you would expect from him having happily participated in the whole monetary insanity, every step of the way, so as to be a direct cause of the world’s economic misery!

It’s too bad that Mr. Zoellick didn’t anticipate this whole thing, like the Austrian Business Cycle Theory did, years ago by saying something like, “Global money supplies are rising to dangerous levels and threaten tens of millions of poor people,” although, even then, it would have still been a gross understatement, but on the right track, anyway!

And before you think that I have such a low opinion of Mr. Zoellick because I am naturally hateful, The Daily Bell asked John Perkins, author of the best-selling Confessions of an Economic Hit Man, his opinion of the World Bank.

He replied, “The World Bank is a tool of economic hit men, there is no question about it. It’s the tool of big corporations, the IMF and most of what we call intelligence agencies of the United States, CIA and NSA. Essentially the job of all these organizations is to help what used to be just US businesses – now we call them multi-nationals – get themselves established around the world in positions where they can exploit the world’s resources, natural resources and human resources.”

And now Mr. Zoellick is shedding crocodile tears about the poor having to pay higher prices after he, as a head banker, aided and abetted the creation of all the excess money, to finance the takeover of “the world’s resources, natural resources and human resources” that made prices go higher? Hahaha! Too, too much! Hahahahaha!

Wiping the tears from my eyes, I note that this kind of treachery by banks and bankers, I assume, is what prompted George Bernard Shaw to say, “You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the government. And, with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.”

And it is also what makes me say, “Buy gold, silver and oil stocks when your stupid government is allowing the evil Federal Reserve to keep creating staggering amounts of money, week after week, month after month, year after year, decade after decade!”

And so while both Mr. Shaw and I agree that buying gold is the way to go, there is, alas, no evidence of Mr. Shaw saying, “Whee! This investing stuff is easy!” although I think that he would at least agree with it being easy! Whee!

See the original article >>

Tale of Two Jobs Surveys.

By one measure the labor market is much stronger than the gain of 192,000 nonfarm jobs in February suggests.

To gauge employment, the Labor Department uses two separate surveys. The jobs figures come from establishment payrolls, while the unemployment rate comes from a survey of U.S. households.

But the Labor Department also releases jobs figures from the household survey that it has adjusted (by subtracting farm workers and so on) to reflect the same sort of jobs the establishment survey covers. By this count, the economy added 342,000 jobs last month, after adding 153,000 in January and 498,000 in December.

In fact, the household gauge shows that the economy didn’t erase quite as many jobs in the recession as the establishment survey did, and that there’s been a significantly stronger rebound in employment. But why?

Both of the Labor Department surveys have downsides. The sample size for the household data is much smaller than the establishment figures, for example. 

But the establishment figures can’t always keep up with shifts in the makeup of U.S. businesses. So economists generally think the establishment figures are better, but sometimes argue that the household ones are better at picking up turning points in the labor market.

There could be other reasons for the mismatch, a 2009 paper by economists Katharine Abraham and John Haltiwanger at the University of Maryland, Kristin Sandusky at the Census Bureau and James Spletzer at the Labor Department suggests.

Analyzing a data set that allowed them to match people in the household survey with people on employee payrolls from 1996 to 2003, the economists found “substantial discrepancies” between the two.

Some 6.4% of people who showed up as holding jobs on employee records were recorded as unemployed in the household survey. Many of them were 65 and older — which suggests they were people who considered themselves retirees even as they continued to draw some sort of paycheck. An even larger 17.6% of people who counted as employed in the household survey didn’t show up on employee records. Many of them had demographic characteristics, such as low education levels, that suggested they were working off the books.

The economists also found that from 2001 to 2003 — the period that covers the brief recession and the jobless recovery that followed it — the number of people on employer records who counted in the household survey as unemployed declined. But the number of people who didn’t show up on employer rolls but who were counted in the household survey as employed rose. That’s a pattern that might be repeating itself, with fewer senior citizens taking jobs here and there to round out their retirement income, and more people getting paid under the table.

An Ugly Breakup -- A Look at the Relationship Between Oil and Stocks

by Bespoke Investment Group

From the start of the bull market back in March 2009 until just recently, oil and the stock market had a seemingly wonderful relationship.  Most of the time, when stocks moved higher, oil moved higher as well.  On the rare occasion that equities headed lower, oil tagged along to the downside.  This wonderful relationship has recently become strained, however, and the two have seemingly chosen to go their separate ways.

Below is a chart highlighting the rolling 1-month correlation between the S&P 500 and oil (using daily % changes) since the start of the equity bull market on March 9th, 2009.  The higher the number on the positive side, the more closely the two are moving together.  The lower the number on the negative, the more the two are moving in the opposite direction.  As shown, the correlation between the stock market and oil remained positive up until just recently, but the breakup between the two has been swift and extreme.  At the moment, the one-month correlation between the two stands at -0.70.

The correlation chart is a good way of showing how high the stock market was allowing oil to go before oil's price began to affect stocks.  Oil rallied alongside stocks from the $30s to the $80s, but once it got into the high $80s and then broke $90 and finally $100, the stock market began to break away and move lower.  With oil now into the triple digits, stocks are simply heading in the opposite direction of the commodity on a daily basis. 

The question everyone has now is whether the stock market can adjust to oil at these levels, or whether oil will need to pull back before stocks can start to head higher again.

See the original article >>

Four lawsuit for Berlusconi in Milan, but the case of Ruby, "will be fast-tracked '

by Il Sole 24 Ore

Il processo a Silvio Berlusconi per concussione e prostituzione minorile in riferimento al caso Ruby «avrà una corsia preferenziale». È quanto hanno riferito fonti della procura di Milano in merito al rischio affollamento udienze per il premier, coinvolto in quattro procedimenti al tribunale di Milano. Il fatto che il processo sia con rito immediato «ha di per sé tempi celeri», inoltre visto che «la parte offesa è una minorenne (all'epoca dei fatti Karima El Mahroug, detta Ruby, non aveva 18 anni, ndr), ha diritto a una corsia preferenziale».

Cassazione: decide il giudice se il reato è ministeriale o no

La questione delle udienze dei quattro procedimenti a carico del premier è stata affrontata venerdì mattina in un incontro tra Niccolò Ghedini, legale di Berlusconi, e Livia Pomodoro, presidente del tribunale di Milano. La procura, da parte sua, ha fatto sapere che «i processi li vogliamo fare tutti e in tutti i giorni liberi e poi non è un problema della procura, poiché ha tanti magistrati pronti ad andare in udienza». 

Il Pd: Dopo la Cassazione la maggioranza rinunci al conflitto di attribuzione
«Dopo la decisione di ieri della Cassazione, i capigruppo di maggioranza dovrebbero avere il buon senso di ritirare la lettera con cui chiedono alla presidenza della Camera di sollevare un conflitto di attribuzioni tra poteri dello stato relativamente al caso Ruby». Lo ha detto la capogruppo democratica nella giunta per le Autorizzazioni a procedere della Camera, Marilena Samperi, in merito alla decisione della VI sezione penale della Cassazione che ieri, relativamente al processo che vede l'ex ministro Mastella imputato a Napoli per alcuni reati, tra cui la concussione, ha chiarito che è solo il giudice ordinario a stabilire la natura ministeriale del reato. 

«Se non fossero state sufficienti le abbondanti pronunce giurisprudenziali e la dottrina, la decisione di ieri mette una pietra tombale sull'ipotesi peregrina proposta dai capigruppo Cicchitto, Reguzzoni e Sardelli - ha aggiunto Samperi -. Per la Cassazione non ci sono dubbi sul fatto che è il giudice ordinario a dover stabilire se un reato ha natura ministeriale e, una volta esclusa la ministerialità, non ha l'obbligo di informare la Camera di appartenenza dell'imputato-ministro. I riflessi sul caso Ruby sono evidenti: alla maggioranza chiediamo di fare un passo indietro ed evitare di fare scelte che avrebbero solo l'effetto di avvelenare il dibattito politico e alimentare uno scontro istituzionale senza precedente, mortificando la Camera e costringendola a difendere una tesi indifendibile».

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People Of Earth: Prepare For Economic Disaster

by The Economic Collapse

It is not just the United States that is headed for an economic collapse.  The truth is that the entire world is heading for a massive economic meltdown and the people of earth need to be warned about the coming economic disaster that is going to sweep the globe.  The current world financial system is based on debt, and there are alarming signs that the gigantic global debt bubble is getting ready to burst.  In addition, global prices for the key resources that the major economies of the planet depend on are rising very rapidly.  Despite all of our advanced technology, the truth is that human civilization simply cannot function without oil and food.  But now the price of oil and the price of food are both increasing dramatically.  So how is the current global economy supposed to keep functioning properly if it soon costs much more to ship products between continents?  How are the billions of people that are just barely surviving today supposed to feed themselves if the price of food goes up another 30 or 40 percent?  For decades, most of the major economies around the globe have been able to take for granted that massive amounts of cheap oil and massive amounts of cheap food will always be there.  So what happens when that paradigm changes?

At last check, the price of U.S. crude was over 104 dollars a barrel and the price of Brent crude was over 115 dollars a barrel.  Many analysts fear that if the crisis in Libya escalates or if the chaos in the Middle East spreads that we could see the all-time record of 147 dollars a barrel broken by the end of the year.  That would be absolutely disastrous for the global economy.

But it isn't just the chaos in the Middle East that is driving oil prices.  The truth is that oil prices have been moving upwards for months.  The recent revolutions in the Middle East have only accelerated the trend.

Let's just hope that the "day of rage" being called for in Saudi Arabia later this month does not turn into a full-blown revolution like we have seen in other Middle Eastern countries.  The Saudis keep a pretty tight grip on their people, but at this point anything is possible.  A true revolution in Saudi Arabia would send oil prices into unprecedented territory very quickly.

But even without all of the trouble in the Middle East the world was already heading for an oil crunch.  The global demand for oil is rising at a very vigorous pace.  For example, last year Chinese demand for oil increased by almost 1 million barrels per day.  That is absolutely staggering.  The Chinese are now buying more new cars every year than Americans are, and so Chinese demand for oil is only going to continue to increase.

Much could be done to increase the global supply of oil, but so far our politicians and the major oil company executives are sitting on their hands.  They seem to like the increasing oil prices.

So for now it looks like oil prices will continue to rise and this is going to result in much higher prices at the gas pump.

Already, ABC News is reporting that regular unleaded gasoline is going for $5.29 a gallon at one gas station in Orlando, Florida.

The U.S. economy in particular is vulnerable to rising oil prices because our entire economic system is designed around cheap gasoline.  If the price of gas goes up to 5 or 6 dollars a gallon and it stays there it is going to have a catastrophic effect on the U.S. economy.

Just remember what happened back in 2008.  The price of oil hit an all-time high of $147 a barrel and then a few months later the entire financial system had a major meltdown.

Well, as the price of oil rises it is going to create a whole lot of imbalances in the global financial system once again.

This is definitely a situation that we should all be watching.

But it is not just the price of oil that could cause a global economic disaster.

The global price of food could potentially be even more concerning.  As you read this, there are about 3 billion people around the globe that live on the equivalent of 2 dollars a day or less.  Those people cannot afford for food prices to go up much.

But global food prices are rising.  According to the United Nations, the global price of food has risen for 8 consecutive months.  Last month, the global price of food set a brand new all-time record high.  Many are starting to fear that we could actually be in the early stages of a major global food crisis.

The price of just about every major agricultural commodity has been absolutely soaring during the past year....
*The price of corn has doubled over the last six months.
*The price of wheat has more than doubled over the past year.
*The price of soybeans is up about 50% since last June.
*The price of cotton has more than doubled over the past year.
*The commodity price of orange juice has doubled since 2009.
*The price of sugar is the highest it has been in 30 years.

Unfortunately, the production of food in most countries around the world is very highly dependent on oil, so as oil goes up in price this is going to make the food crisis even worse.

Hold on to your hats folks.

Also, as I have written about previously, the world is facing some very serious problems when it comes to water.  Due to the greed of the global elite, there is not nearly enough fresh water to go around.  The following are some very disturbing facts about the global water situation....

*Worldwide demand for fresh water tripled during the last century, and is now doubling every 21 years.
*According to USAID, one-third of all humans will face severe or chronic water shortages by the year 2025.
*Of the 60 million people added to the world’s cities every year, the vast majority of them live in impoverished slums and shanty-towns with no sanitation facilities whatsoever.

*It is estimated that 75 percent of India's surface water is now contaminated by human and agricultural waste.
*Not only that, but according to a UN study on sanitation, far more people in India have access to a mobile phone than to a toilet.

*In northern China, the water table is dropping one meter per year due to overpumping.

These days, one of the trendy things to do is to call water "the oil of the 21st century", but unfortunately that is not a completely inaccurate statement.  Fresh, clean water is something that we all need, but right now world supplies are getting tight.

Our politicians and the global elite could be doing something about this if they really wanted to, but right now they seem perfectly fine with what is happening.

On top of everything else, the sovereign debt crisis is worse than it has ever been before.

All of the major global central banks have been feverishly printing money in an attempt to "paper over" this crisis, but it is not going to work.

Most Americans don't realize it, but right now the continent of Europe is a financial basket case.  Greece and Ireland would have imploded already if they had not been bailed out, and now Portugal is on the verge of collapse.  The interest rate on Portugal's 10-year notes has now been above 7% for about 3 weeks, and most analysts believe that it is only a matter of time before they are forced to accept a bailout.

Sadly, if the entire global economy experiences a slowdown because of rising oil prices, we could see half a dozen European nations default on their debts if they are not bailed out.

For now the Germans seem fine with bailing out the weak sisters that are all around them, but that isn't going to last forever.

A day or reckoning is coming for Europe, and when it arrives the reverberations are going to be felt all across the face of the earth.  The euro is on very shaky ground already, and whether or not it can survive the coming crisis is an open question.

Of course there are some very serious concerns about Asia as well.  The national debt of Japan is now well over 200% of GDP and nobody seems to have a solution for their problems.  Up to this point, Japan has been able to borrow massive amounts of money at extremely low interest rates from their own people, but that isn't going to last forever either.

As I have written about so many times before, the biggest debt problem of all is the United States.  Barack Obama is projecting that the federal budget deficit for this fiscal year will be a new all-time record 1.65 trillion dollars.  It is expected that the total U.S. national debt will surpass the 15 trillion dollar mark by the end of the fiscal year.

Shouldn't we have some sort of celebration when that happens?

15 trillion dollars is quite an achievement.

Most Americans cannot even conceive of a debt that large.  If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.

But the United States is not alone.  The truth is that wherever you look, there is a sea of red ink covering the planet.

The current global financial system is entirely based on debt.  If the total amount of debt does not continually expand, the system will crash.  If somehow a way was found to keep this system going perpetually (which is impossible), the size of global debt would keep on increasing infinitely.

Now the World Economic Forum says that we need to grow the total amount of debt by another 100 trillion dollars over the next ten years to "support" the anticipated amount of "economic growth" around the world that they expect to see.

The entire global financial system is a gigantic Ponzi scheme.  It is designed to keep everyone enslaved to perpetual debt.  If at some point the debt spiral gets interrupted in some significant way, we are going to witness an economic disaster that is going to make what happened in 2008 look like a Sunday picnic.

The more research that one does on the current global economic situation, the more clear it becomes that we are absolutely doomed.

So people of earth you had better get ready.

An economic disaster is coming.


By Charles Rotblut, CFA, AAII

Warren Buffett discussed corporate cash in his latest letter to Berkshire Hathaway shareholders, a group that I am part of. Specifically, he focused on both the creation and use of cash. His commentary contained lessons that are applicable to all investors.

Regarding the creation of cash, Buffett said that not only is the Burlington Northern Santa Fe addition working out better than expected, but Berkshire has already refilled its coffers of the $22 billion spent on the acquisition–a sign of a good merger.

Though earnings make headlines, cash flow deserves considerably more attention than most people give it. Earnings are an accounting figure; cash flow is the difference between what a company brings in and what it spends. Well-run companies consistently generate cash over the long term.

How a company uses its cash is also very important. Buffett has long been an advocate for shareholders, criticizing CEOs for not being good wards of corporate cash. In this year’s letter, he pointed out that Berkshire only spent $301,363 on equipping the home office, an amount that includes the Coke dispenser. He also, however, emphasized how critical it is to ensure that a company turns every dollar of retained earnings into two-dollar bills, not 50-cent pieces.

As Buffett explained, “This ‘what-will-they-do-with-the-money’ factor must always be evaluated along with the ‘what-do-we-have-now’ calculation in order for us, or anybody, to arrive at a sensible estimate of a company’s intrinsic value. That’s because an outside investor stands by helplessly as management reinvests his share of the company’s earnings. If a CEO can be expected to do this job well, the reinvestment prospects add to the company’s current value; if the CEO’s talents or motives are suspect, today’s value must be discounted. The difference in outcome can be huge. A dollar of then-value in the hands of Sears Roebuck’s or Montgomery Ward’s CEOs in the late 1960s had a far different destiny than did a dollar entrusted to Sam Walton.”

This is why a high current ratio (current assets divided by current liabilities) raises my level of skepticism when I look at a company. Yes, companies should have adequate reserves and enough cash to take advantage of profitable opportunities, but not so much that a hole is burnt in the CEO’s pocket. I worry about excess cash because while some executives are very effective at redeploying cash or smartly deciding that a higher dividend is in the best interest of shareholders, many more aren’t. Corporate history is littered with failed projects and acquisitions that built empires for executives, but not value for shareholders.

Individual investors may have little say in how the money is spent, but they can vote with their feet. The cash flow statement will show you whether cash is being created or spent. I particularly look at cash from operating activities, which shows whether normal business operations are printing dollars or if there is a stream of smoke from the cash being burnt through. I also look at gross and operating margins to see if they are widening (good) or shrinking (bad). Even a quick glance at general and administrative expenses (G& A) can tell you if a company’s overhead is expanding at a faster pace than revenues (rarely a good sign).

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