The Pending Crisis And Growing Analogies To Greece

From the “Are we having fun yet?” files comes this bit of happy commentary from Former Federal Reserve Chairman Alan Greenspan.

See: Greenspan Says U.S. May Soon Reach Borrowing Limit

“The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms,” Greenspan said. The “very severity of the pending crisis and growing analogies to Greece set the stage for a serious response.”

Greece?

That will suck.

Greedy Democrats Lusting For A Tax On Gold

Democrat greed knows no bounds. Hungry for revenue from any source that She and her fellow Democrats can think of, the Governor Of Washington State is lusting for a sales tax on gold and other precious metals.

See: Is Washington's tax exemption on bullion a gold mine?

Gov. Chris Gregoire repeatedly has singled out the bullion tax break since she ran for her first term in 2004 as an example of the sort of preferential treatment that ought to end.

The governor followed through this year, proposing to start taxing bullion sales as part of her budget proposal to the Legislature. State-employee unions, interested in staving off job cuts, have come out in support.

The State-employees unions are the most powerful lobbies in the state of Washington. They have the Democrats by the short hairs. What they want, they get.

Unfortunately, the real world will not cooperate as slavishly as the Democrats and their State-employee union puppet-masters would like.

The association estimates there are now at least 100 coin and bullion dealers in the state — small coin shops and larger dealers who also sell gold as an investment for retirement accounts. Their businesses would be in jeopardy if the state reinstitutes the sales tax, Robinson said.

As an added blow, national coin-dealer trade shows no longer would consider meeting in Washington.

Because the price of gold is set like a stock on a national market, dealers operate on only a 1 to 3 percent markup, said Karen Feldman, who owns Tacoma Mall Blvd Coin Stamp & Jewelry.

Gold is selling at more than $1,000 an ounce, so if Washington dealers had to tack on a sales tax of nearly 10 percent, it would add about $100 to the price of a 1-ounce gold Krugerrand, Feldman said. Customers simply would buy gold on the Internet or in Oregon and Idaho, which don't tax bullion sales.

A tax on precious metal trades in Washington State would just move the transactions somewhere else. It is a predictable result. The Democrats are just too possessed by greed to give a tinker's damn.

HT: Fenway Nation

See Comment in Do You Deserve To Have Your 401k And Your IRA Confiscated?

7% of all U.S. banks are on the list and face a higher probability of failure

An article in the Wall Street Journal talks about the growing number of banks that are at risk of failure.

The FDIC's quarterly banking profile, which analyzed data from 8,099 federally insured banks, reported that 552 financial institutions, with combined assets of $345.9 billion, were on the government's problem list at the end of September, up from 416 with $299.8 billion of assets at the end of June. That means roughly 7% of all U.S. banks are on the list and face a higher probability of failure.

FDIC officials don't disclose the names of banks on the list, in part because it could lead to bank runs.

With the dollar crashing and hyperinflation looming on the horizon, hard times seem to be a real and growing possibility.

Will the Real Jobless Rate Please Stand Up!

There is something a little “Slim Shady” about the official US jobless rate of 10.2%.

Jeff Cox at CNBC.com has an article posted that is worth reading.

According to the government's broadest measure of unemployment, some 17.5 percent are either without a job entirely or underemployed. The so-called U-6 number is at the highest rate since becoming an official labor statistic in 1994.

The number dwarfs the statistic most people pay attention to—the U-3 rate—which most recently showed unemployment at 10.2 percent for October, the highest it has been since June 1983.

Pray for recovery, prepare for depression.

Get off your ass and get a job!

The truth behind much of the economic happy-talk that the Obama administration is putting out is that we are in hard times at the moment, with the probability of things getting far worse.

Nouriel Roubini has an article in the New York Daily News that is worth taking a few moments to read.

Think the worst is over? Wrong. Conditions in the U.S. labor markets are awful and worsening. While the official unemployment rate is already 10.2% and another 200,000 jobs were lost in October, when you include discouraged workers and partially employed workers the figure is a whopping 17.5%.

While losing 200,000 jobs per month is better than the 700,000 jobs lost in January, current job losses still average more than the per month rate of 150,000 during the last recession.

If you have a job, try to keep it.

If you don't, then you had better be busting your ass to get one. Every day that goes by that you remain unemployed increases the number of people that are in line with you looking for work. Many o these people will be better qualified and more desirable for a company to hire than you are.

Do not rest on your laurels – you don't have any.

Be prepared for some rough times.

What We Witnessed in the 1970s

Kudlow talks about the weak dollar.

We know that gold is soaring.

And we know the dollar is slumping. But, did you know that year-to-date, while the S&P 500 is up 18 percent—a great showing no doubt—gold is up even more.

The precious metal is up 21 percent. In other words, measured in true, gold-backed purchasing power, stocks have really done nothing this year. Zip. It is most disappointing.

I try to be optimistic about better earnings, a stock market rally and economic recovery. And I’m sticking to my guns. But what we’re seeing right now is pretty darn close to what we witnessed in the 1970s—the rise in gold and inflation really cuts into the stock market.

Kudlow is a supply-sider. His solution is to do what has worked in the past. Lower taxes and reduce Federal spending.

Fat chance that Obama will follow Kudlow's advice.