Segment 1: Weathering the Economic Fallout SEGMENT BEGINS AT 00:38 Due to poor economic policies, there is an even greater slowdown in the global economy on the horizon. Listen as economist Jerry Robinson gives us a glimpse into 2023 and shares a simple way to...
Good morning friends! In the news today: Rising food and oil prices could complicate U.S. “recovery” efforts, the Libyan “Butcher” stands defiant, and more…
Oil Price Shock + Food Price Shock = End of America’s “Jobless” Recovery… Rising oil prices coupled with the dramatic rise in global food prices could threaten to derail the U.S. economic “recovery.” The Fed has been maniacally pumping in new money through its QE2 program and keeping interest rates near zero in an effort to stimulate consumption. While they have achieved a sort of “wealth effect” with higher stock prices, the house of cards is now in jeopardy, thanks to rising oil prices fueled by the uncertainty in the Middle East and rising food prices due to a variety of factors.
Oil futures touched $100 per barrel on Wednesday – the highest since the pre-crisis era of 2008. Oil now up over 7% for the year… Supply-driven oil shocks (think 1973, 1979) have a track record of commencing U.S. recessions. But economists argue no real threat posed until oil reaches a sustained level of $120. These levels will put massive pressure on airlines, transportation, chemicals, and would threaten the Fed’s “golden calf”… U.S. discretionary spending (think big-screen TV’s, dining out, new cars, movie tickets, etc.)
Add a sustained food price shock to the system, and it is “lights out”…
And now… New worries over inflation in Asia.
Singapore: 5.5% Jan. CPI…
Vietnam: 12.31% Feb. CPI…
Hong Kong: Expects 4.5% inflation rate this year…
India: 25,000 protesters in the streets over increasing prices. Food prices rising 18% per week in December…
The ‘Butcher’ Clings to Power… Despite massive losses of territory and numerous angry defectors from his own regime, the Libyan butcher, Moammar Gaddafi, remains defiant, refusing to leave power. So far, the major towns of Baida, Benghazi, and Misrata have fallen to opposition forces. But fear looms in the streets of the capital as Tripoli still under Gaddafi’s rule… Reports of a “bloodbath.”
(Note: The “spineless” U.N. reaffirms that Libya’s seat on their Human Rights body is secure… Do we need any more reasons why this is a completely bogus organization?)
And now… New fears in Washington over Libya’s aging stockpile of weaponry including Scud B missiles, 1,000 tons of uranium yellowcake, mustard gas and other chemcial agents, as well as vast amounts of conventional weapons.
Yesterday, President Obama spoke out against the Libyan government’s tactics, for the first time, calling the bloodshed “outrageous and unacceptable.”
(Iranian president Ahmadinejad also condemned the violence calling the butcher’s actions “grotesque.” Classic ‘foot in mouth’ moment…)
And now… Talk of a wide range of possible U.S. sanctions including freezing assets, halting foreign investment, and more.
Meanwhile new “reforms” in Saudi Arabia… Saudi King Abdullah back at home now after 3 month stay in U.S. hospital… Desperate $36 billion bribe to keep the masses in check… The money pump seems to be keeping the working class docile… However, some still calling for “day of rage” in March.
In Bahrain, 308 political prisoners released; opposition lays out their demands…
In Iraq, anti-government protests planned for Friday…
Also in the news…
1) FDIC: Over 1 in 10 U.S. banks are at risk of failing – the highest level in 18 years.
2) Goldman Sachs: U.S. budget cuts and other austerity measures would greatly damage economy.
3) Wisconsin Update: State lawmakers agree to advance budget talks without the ‘derelict Dems.’
4) Tax Tango: Under IRS rule change, same-sex couples may get tax break.
5) WSJ: President Obama proposes seeks multibillion-dollar settlement of loan-servicing cases.
Finally… Some good reasons why buying silver – even above $30 per ounce – is not a bad idea.
Why So Serious?… It’s time to laugh a little.
“Libyan dictator Moammar Gaddafi said that people protesting against him are under the influence of “hallucination pills.” In a related story, Charlie Sheen just boarded a plane to Libya.” –Conan O’Brien
“A Russian airline is hiring clowns, actors, and musicians to entertain passengers during flights. When I’m on a stuffy plane with babies crying and people complaining, my first thought is always, “There should be clowns here.”
“Gaddafi said he will fight the protestors until the end and he will die as a martyr. The protestors responded by saying, “Deal.” –Jay Leno
“A recent study found that men who go bald in their early 20s have an increased risk of developing prostate cancer. So I guess going bald in your 20s isn’t as great as you thought.” –Jimmy Fallon
“Libyan dictator Moammar Gaddafi was on TV and he was angry and defiant. Then he went off the air and no one has seen him since — kind of like Keith Olbermann.” –Jay Leno
Cartoon of the Day…
Jerry Robinson – FTMDaily.com
Jerry Robinson is an economist, published author, columnist, international conference speaker, and the editor of the financial website, FTMDaily.com. 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.