UK Government urged to reveal 'true' national debt of £4.8 trillion

From the UK Telegraph: The Institute of Economic Affairs (IEA) has calculated that the national debt is £4.8 trillion once state and public sector pension liabilities are included, or £78,000 for every person in the UK....read on

John Williams interviewed

John Williams of Shadowstats.com is interviewed by Eric King of King World News. John discusses the loss of purchasing power of the average US household, with inflation adjusted income levels now below those in 1973.....listen here

Bill Fleckenstein interviewed

Bill Fleckenstein is interviewed by Eric King of King World News, Bill argues the case for stagflation over deflation in some assets classes. Bill also brings up an issue I have rallied about for years, large companies focusing on their performance in current quarter at the determent of their long term survival and perception of the quality of their goods & services.....listen here

A case in point is large, mainly US, service companies offshorring jobs from higher cost, higher skilled locations to lower cost, lower skilled countries. What many of these companies have seem to have forgotten over the last 10yrs is that customers where first attracted to their offerings not because they were the cheapest in the market, but because they were American (or at least Western) and that gave those companies a veneer of quality, trust and reliability.

This race to the bottom of cost and quality is not only massacring western job markets it is occurring in the lower cost/skilled countries as well, with some US firms shifting work that had been previously offshorred to Brazil to China, not because the Brazilians did not have the skills or that the Chinese were superior - it was simply down to saving a 1 or 2 dollars per hour. The Chinese in most cases have no relevant skills and the Brazilians have to be sent to China to desperately train their replacements before they are sacked - can you imagine a scene where 2 people from radically different backgrounds try to communicate in their shared 2nd language (English) when one is going to be sacked when the training is complete (regardless of the quality of the training provided). Throw your typical Brazilian's outspoken nature and hatred of military dictatorships (as China is) and anyone can just see it is not going to work well.

But no matter the US is already thinking ahead, to when China's labour is no longer the cheapest and is setting up facilitates in Vietnam (this is why the US is conducting military exercises with Vietnam and supporting their claims to the Spratly Islands). I can't wait for the day when Chinese workers are sent to Vietnam to train the low skilled Vietnamese workers to take their jobs......then where do we go after Vietnam? Cambodia?, then Bangladesh?....maybe we should be investing in green fields sites in Chad in preparation for the end state.

"Never mind the quality Sir, feel the price" - Tears of the Moon c2003.

Print, Baby, Print!

By Steve Saville: According to an article by Jonathan Laing in the 9th August edition of Barrons magazine:

"The Fed should, and probably will change its tune by the fall and fire up the printing presses. Its current stance of watchful waiting in the face of slowing economic growth, inflation cycling below its preferred target rate of 1.7% to 2% and naggingly elevated unemployment strikes some observers as nothing short of mind-boggling. With good reason, these critics are pushing the Fed to adopt the deflation-fighting strategy that Bernanke mentioned in 2002, when he was a newly minted Fed governor. He suggested that the Fed could always buy long-term government bonds and corporate debt to mainline more liquidity into the financial system to counteract incipient deflation."....read on

Bullion As An Alternative To 'Shorting'

By Jeff Nielson: In a recent commentary, I characterized gold and silver bullion as a "superior" asset-class, versus virtually any other investment options. In this series of commentaries, I'm going to focus upon the versatility of bullion as an investment.

Experienced precious metals investors are familiar with the many "drivers" which have been identified for the precious metals market. However, this is simply another way of saying that bullion is a good proxy for many of the dynamics in markets (and the overall economy) today.

This is a concept which is especially useful with respect to investing in a "short" position (i.e. betting that a particular investment will go down rather than up). "Shorting" a market is inevitably a much more high-risk investment than going "long".

To begin with, there is the potential for infinite losses. Bet "long", and you can never lose more than 100% of your investment (assuming we avoid the insanity of "margin" in our accounts). Bet "short" however, and there is no limit to potential losses, since there is no (theoretical) limit on how high any particular investment could rise (except for bonds). Add to that the further risk of being forced-out of your short-position, and we can see that this is a particularly precarious form of investing, best left to trading experts.....read on

Silver Has Potential To Be One Of Best Performing Assets Over The Next Five Years

By David Levenstein: Much of what applies to gold also applies to silver. And, as I have mentioned in previous articles, silver is also a monetary metal whose price is influenced by similar factors that influence the gold price. Invariably, the price of silver mirrors that of gold and more often than not, its moves are greater in percentage terms than the moves in gold. So if the price of gold moves 1% silver can be expected to move between 2%-6%. With the price of silver being so undervalued at the moment, the percentage moves we can expect to see in the future are going to be quite spectacular.

According to World Silver Survey2010 released in May by The Silver Institute, silver has continued to make gains as the European sovereign debt crises continues. "Silver's status as a precious metal was unequivocally reaffirmed last year by investors who purchased it not only as a speculative commodity-play on economic recovery but also as a safe haven asset, particularly at a time when the global financial crisis was raging," the Survey noted....read on

Gerald Celente

Gerald discusses trend analysis, future forecasting and fascism.....watch here

Chinese Inflation to Boost Gold Prices?

From ArabianMoney.net: A recent report from Credit Suisse has warned that wage inflation in China is going to put pressure on the profit margins of major Western brands dependent on Chinese manufacturing over the next 12 months.

Over the past decade Chinese manufacturing salaries have risen from $1,000 to $3,900, according to The Daily Telegraph yesterday. But a series of strikes at key factories have sent wage inflation soaring to 25-30 per cent this year.

The low cost of manufacturing in China has been the secret of low inflation in the West in the 2000s. That deflationary force is gone. This is inflation at a very basic level. Eventually manufacturers will have to pass this higher cost on with higher prices or inflation.

Now we hear the selling of gold by Chinese banks is being liberalized. The Chinese are not immune to inflation either and will want to buy protection in the form of gold, the one currency that cannot be printed...read on

Gold & Silver charts

Thanks to Jesse's Cafe Americain for the charts....click on each chart to see in detail.

Tensions Rise in Greece as Austerity Measures Backfire

From Spiegel Online: The austerity measures that were supposed to fix Greece's problems are dragging down the country's economy. Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70 percent in some places. Frustrated workers are threatening to strike back.

The feast of the Assumption of Mary on Aug. 15 is the high point of summer in the Greek Orthodox world. Here in one of the country's many churches, believers pray to the Virgin for mercy, with many of them falling to their knees.

The newspaper Ta Nea has recommended that the Greek government adopt the very same approach -- the country's leaders have to hope that Mary comes up with a miracle to save Greece from a serious crisis, the paper writes. Without divine intervention, the newspaper suggested, it will be a difficult autumn for the Mediterranean state.....read on