The Mess That Greenspan Made - Part 415

Friday Morning Links

Greece, creditors edge closer to deal – Reuters
IMF’s Lagarde warns on austerity and growth – BBC
The IMF is no longer serving its purpose – Telegraph
Ireland passes latest austerity test – CNN/Money
Bonds Show Return of Crisis Once ECB Loans Expire – Bloomberg
Moody’s warns it will likely cut ratings on big bank – Reuters
Financial Crisis Narrative Flunks Reality Check – Weil, Bloomberg
FAQ: What’s next for SOPA, PIPA in Congress – Washington Post
More Evidence JP Morgan Stuck the Knife in MF Global – Naked Capitalism
How Deflationary Forces Will Be Turned into Inflation – Mises
The ‘Perils’ of a Gold Standard? – Implode-O-Meter
Alan Greenspan’s ship of fools – Baker, Guardian

Oil prices slip under $100 per barrel – AFP
Gold below $1,650 as euro rally fades – Reuters
Where to put your money if the bond bull stumbles – MarketWatch
Investors exit big-name funds as stars fail to shine – Reuters
JPMorgan alone in raising Q4 commodity risk exposure – Mineweb
Gold ETF remains top investment option last year – Bullion Street
Central bank gold buying hits 430 tons, highest since 1964 – Commodity Online
Paper and Physical Silver Prices Are Not Decoupling Yet – Kid Dynamite
“The Chinese really love gold” – Banks pushing citizens to buy – Reuters
“A Longer-Term Perspective On Gold” And More, From Nomura – Zero Hedge

Shilling says new global recession is here – MarketWatch
About Faster Inflation, Please Stay Worried – Kinsley, Bloomberg
Industrial Production Is Why LEI Is Being Revised – Financial Sense
China’s Manufacturing Contraction Boosts Case for Monetary Easing – Bloomberg
UK retail sales up for December as shoppers shrug off economic fears – Guardian
Abandoning Ship: Italian Paper Likens Merkel to Shipwreck Captain – Spiegel
Is Canada’s economy really dependent on global trade? – Globe & Mail
Housing: Record Low Total Completions in 2011 – Calculated Risk
‘Robo’ Foreclosure Settlement Turns Political – CNBC
O.C. foreclosures take year to complete – O.C. Register
The Fed missed the housing bubble and its effects – O.C. Housing News
A Quartet of Fed Chairmen Body Slam Bernanke – auontrarian


Food at Home ≈ Food Away from Home?

After looking over this morning’s report on consumer prices and examining the details in the food category, it occurred to me that either there are a lot of people in this country spending a lot of money eating out or the Labor Department’s weightings are wrong.

As shown below, the Food and beverages category accounts for nearly 15 percent of the overall price index (which seems about right), but Food at home accounts for only 53 percent of that spending whereas Food away from home accounts for 40 percent.

The Food away from home share seemed high to me, but it certainly explains how, as shown in the “from- Dec. 2010″ column, you can have  grocery prices rising at a rate of six or eight percent a year while the overall Food and Beverages category is up only 4.5 percent.

Though you can save huge amounts of money by eating at home more or packing a lunch (it always amazes me when couples lament their money troubles and their inability to save while, at the same time, noting that they eat out all the time – as if the two aren’t connected), the table above indicates that the frugal are being punished more than the spendthrifts once again… All part of Ben Bernanke’s master plan, apparently.

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It could be that GOP Presidential hopeful Newt Gingrich is just trying to siphon off some of Rep. Ron Paul’s supporters as Gingrich narrows Mitt Romney’s lead in South Carolina, but, whatever the motivation, his recent talk about the U.S. returning to a gold standard has made this a more interesting race in recent days as reported at CNN/Money.

Republican presidential candidate Newt Gingrich is calling for the United States to think about returning to the gold standard.

Speaking at a foreign policy forum in South Carolina on Tuesday, Gingrich advocated a “commission on gold to look at the whole concept of how do we get back to hard money.”

Gingrich, a former Speaker of the House, has spoken in favor of a “hard money” policy in the past, but these were his strongest comments to support reinstating the gold standard.

Gingrich would model his “gold commission” after one put in place after Ronald Reagan was elected, when the nation was battling double-digit inflation. But even then, the commission overwhelmingly rejected the idea of a return to the gold standard.

One of only two members of the 17-member commission to endorse a return to the gold standard was Ron Paul, one of Gingrich’s rivals for the GOP nomination.

Gingrich is shown above indicating how much the U.S. dollar is worth relative to the last time the U.S. was on a gold standard (no, not really).

Also see this story at the New York Sun where more details are revealed about how Gingrich and the rest of the GOP field feel about the shiny yellow metal and its role in the world.

Consumer Prices Flat, Jobless Claims Plunge

The Labor Department reported that overall consumer prices were unchanged in December for the second month in a row as falling energy costs offset price increases elsewhere and, for the entire year of 2011, inflation came in at 3.0 percent.

Gasoline prices that fell 2.0 percent from November to December combined with household energy costs that were down 0.4 percent to push the energy index 1.3 percent lower, however, energy prices remain up 6.6 percent from a year ago with many analysts now predicting a sharp increase in pump prices this spring.


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Thursday Morning Links

Kodak files for bankruptcy – CNN/Money
Spain passes key bond test, France in demand – Reuters
Investors Are Facing Up to Reality of Greek Debt Default – CNBC
European debt crisis: Critical Greek debt deal talks continue – Guardian
IMF push for $1 trillon rescue fund to cost UK £15bn – Telegraph
Keystone pipeline permit is denied by Obama administration – Washington Post
Why The Conference Board Is Changing Its ading Economic Indicator – Business Insider
Man accused of illegally flipping 235 Ohio homes ends extradition fight – Naples News
Gingrich: U.S. should reconsider gold standard – CNN/Money
A new stimulus: Have Wall Street bail out Main Street – Fortune
One Million Homeowners May Get Mortgage Writedowns – CNBC
Defending Our Freedom to Share – The Big Picture

Oil above $101 on hopes IMF to curb Europe crisis – AFP
Gold climbs as rising risk appetite lifts euro – Reuters
Saudis target ‘triple-digit’ oil price for the first time – Globe & Mail
What the Next Decade Holds for Commodities – U.S. Global Investors
Natural gas prices rebound after touching 2012 lows – Reuters
Saudi comments on oil have bullish implications for gold – Commodity Online
Is Bullion Back? ‘Gold Is Still In a Super Bull Market’ – CNBC
Chinese demand, macroeconomic tensions to drive gold prices – Mineweb
The three real risks to continuing gold price advance – Mineweb
India’s gold duty hike stalls orders – Reuters

Few U.S. Cities Recoup Jobs in Recovery – Bloomberg
Warm Winter Deflates Prospects for Retailers – NY Times
Does Austerity Promote Economic Growth? – Shiller, Project Syndicate
Nigeria reels after oil subsidy row turns into country’s biggest ever protest – Guardian
PBOC Conducts Reverse Repurchase Agreements – China Daily
The euro is pushing Italy into depression – Telegraph
Foxconn chairman likens his workforce to animals – Want China Times
China Reduced Treasury Holdings for Second Straight Month – Bloomberg
As Home Buying Returns, Do Apartments Face a Bubble? – CNBC
2012: The year of a housing turnaround? – Housing Wire
Local currencies: ‘In the U.S. we don’t trust’ – CNN/Money
Bernanke’s Housing-Market Meddling Tarnishes Trust – Bloomberg

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