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FTMDaily News Update – Inflation is Here + JP Morgan Admits Gold is a Currency

February 8, 2011

by Jerry Robinson

Good morning friends! In the news this morning: more Chinese rate hikes, more proof of inflation, new developments in Egypt, and more…

Inflation is Here… The lag factor between the Fed’s money printing and realized inflation is nearly over… Inflation is showing up everywhere: food prices, energy prices, etc… Now it’s showing up in the U.S. Bond market… Over the last week, Treasury bond yields have jumped to their highest levels in almost a year… 10 year Treasury yields at 3.7%… 30 year yields are well over 4.7%… creeping inflation will drive rates even higher.

A new report in China will show today that inflation in that country is rising at the fastest pace in the last 30 months… The Chinese responded today with another interest rate hike… 25 basis points… the third rate increase since  last October.

Asia, in general, fears the effects of economic overheating… Thailand, South Korea, Indonesia, and India have all committed to similar rate increase campaigns…

This morning, Asian currencies are up as investors seem to appreciate responsible and proactive measures by central bankers… (The Fed does well to pay attention)

Egyptian Revolt Running out of Steam?… Increasing signs of normality are returning to Cairo… Are the protests beginning to lose steam? It may be too early to tell, however, the government appears to be gaining the upper hand… Washington also now appears to be changing their tune towards Egypt… So far, a reported 297 people have been killed during the protests…

In Case You Missed It… President Barack Obama talks Egypt and the economy with Bill O’Reilly from the Fox News channel. You can watch it below…

Paulson’s Midas Touch… Hedge Fund Manager, John Paulson, racked up a record $5 billion in personal profits in 2010… How? Here’s the breakdown… $1 billion from fund performance and management fees… $4 billion through investing his personal wealth into his own firm’s hedge funds… Interestingly, he turbocharged his hedge funds with full exposure to gold futures by borrowing 20 cents of every dollar in the hedge fund and purchasing $1 worth of gold futures… The result: 45% returns… The brilliant strategy is one of the reasons why he is one of the most sought after hedge fund managers today…

JP Morgan Admits Gold a Currency… This week, JP Morgan Chase said it will begin accepting physical gold as collateral in transactions. Watch as gold and silver begin taking back their rightful place as legitimate currencies as the paper monetary system continues to spiral…

AOLHuffingtonPost – The Expensive Bet… Desperate for acceptance and in hopes of survival, AOL has offered a  staggering $315 million for the Huffington Post, a liberal-leaning daily internet news service… AOL hopes to use the site to drive its online ad revenue… AOL is on the ropes and has now spent 40% of its cash on the Huffington Post… Not promising…

When I grow up, I wanna be a… With college costs going up dramatically, here are 8 alternatives to consider instead of the traditional college route…. If you prefer video, then click here.

Another Solution to the Budget Crisis… Senator Rand Paul, Congressman Ron Paul’s son, recently unveiled his strategy for cutting government spending at the Federal level… You can read about it here

Finally… According to a massive study out of the U.K., toddlers who have a diet high in processed foods may have a slightly lower IQ in later life… Perhaps we really are what we eat…

Why So Serious?… Here’s a sampling from some of the late shows this week…

“Congress is proposing a bill that would give President Obama a kill switch that he could use to freeze all activity on the Internet if there were a national emergency. The kill switch goes by the top-secret name Microsoft Windows.” –Conan O’Brien

“Egypt continues its angry street protests. Secretary of State Hillary Clinton is calling for calm. Because nothing calms an enraged Arab country like a powerful woman ordering it around.” —Conan O’Brien

“Now Egyptians are demanding to see President Mubarak’s birth certificate. There’s a rumor he was born in New Jersey.” –Jay Leno

“Chinese President Hu Jintao was hinting that China may not loan the U.S. any more money. President Obama is now talking to him about a reverse mortgage.” –Jay Leno

Until tomorrow,

Jerry Robinson –


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Jerry Robinson is an economist, published author, columnist, international conference speaker, and the editor of the financial website, In addition, Robinson hosts a weekly radio program entitled Follow the Money Weekly, an hour long radio show dedicated to deciphering the week’s economic news.

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