Every Three Dollars Of Income

(Reuters) - Three weeks ago, President Barack Obama stood in front of a sea of gleaming solar panels in Boulder City, Nevada, to celebrate his administration's efforts to promote "green energy." Stretching row upon row into the desert, the Copper Mountain Solar Project not far from Las Vegas provided an impressive backdrop for the president. Built on public land, the facility is the largest of its kind in the United States. Its 1 million solar panels provide enough energy to power 17,000 homes. And it employs just 10 people. Three years after Obama launched a push to build a job-creating "green" economy, the White House can say that more than 1 million drafty homes have been retrofitted to lower heating and cooling costs, while energy generation from renewable sources such as wind and ...

Have you ever had any doubts about gold? Does it sometimes feel like it should be performing better? Are you concerned about its volatility? Do you worry about how it might perform in the future? Have you ever wondered about its true purchasing power? Maybe you’re nervous about a big drop in price again? I decided to go directly to the source to address these concerns: Gold himself. He put his arm around me and asked me to tell you a few things… I hear that you’ve had some worries about me. I understand. Your world is a very uncertain place right now. And when it comes to money, it looks as though your leaders don’t understand some basic monetary principles, making things even more unsettling. But I want you to know that the problems you’re experiencing are actually nothing new. I’ve ...

$100 billion down… $40 trillion left to go! Hey, don’t hold us to those figures. But yesterday European sages cut another deal to stave off the truth. Instead of defaulting openly and honestly — as Greece has done over and over again ever since 1827 — the Greeks will be ‘rescued.’ Sayeth Lucas Papademos, the technocrat leading Greece through its vale of deceit: “It’s no exaggeration to say that today is a historic day for the Greek economy.” He’s right. It’s no exaggeration. It’s an outright lie! What’s historic about the 15th rescue? And as soon as the Greeks are fished out of the water, they’re to be given a shave and a haircut. No kidding. They’re supposed to shave off more public employees, more spending, and more benefits. Already, one of 5 people is out of a job…with 2 out of ...

The Greek crisis has been solved…again. Let’s see…that’s probably about 24 “solutions” during the last 24 months. But since these solutions never seem to solve anything, Europe’s central bankers, technocrats and politicians get to huddle together every few weeks and solve the crisis over and over again. It’s kind of like Disneyland for euro-meddlers. They get to keep going on their favorite ride over and over again. Sure, they have to wait in line for a while each time, but the ride is so worth it! Lots of meddling, lots of intervening, lots of “tough negotiations,” lots of prescribing what’s best for others, while spending lots of money that belongs to someone else. If that’s not an “E-Ticket,” what is? The newest Greek solution — approved Monday by the fully employed politicians in ...

“America is back,” said the President of all the Americans, “Anyone who tells you America is in decline or that our influence has waned, doesn’t know what they’re talking about.” Well, Dear Reader, we’re here to tell you: America is in decline. We can give it to you straight because we’re not running for public office. And if we were elected, we would immediately demand a recount. Anyone who tells you America is not in decline is either running for office…or not paying attention. In 1969, more than one out of every three dollars of income in the entire globe was earned in the US. That’s what the IMF’s World Economic Outlook tells us. By 2000, that number had fallen…but not by much. The US still took home 31% of global income. But in the last 10 years, the US share has fallen hard — ...

Time and time again, Europe solves its debt problems… and every time they don’t get solved at all. Italian bond yields are edging back up. And Greece is negotiating a default. They want to avoid a naked, noisy default…so they are dressing it up as “voluntary” or ‘soft.’ But they can’t disguise the fact that Greece has bills it can’t pay. On the 20th of March it needs to come up with 14.4 billion euros, followed by billions more in the months following. That is more than 6% of national GDP. It would be as though the US had to pay a trillion dollars. Where’s the money to come from? The European Central Bank? The IMF? The Germans? Maybe. But little by little, even the fixers are beginning to realize that this is a problem than can’t be fixed with Band-Aids and bailouts. Greece has too much ...

Not much action at the end of last week… Gold closed the week over $1,600. Oil remained over $100. The show goes on! We are watching the destruction of an empire. All empires must go away sometime. They are natural things. And nature puts a time bomb in everything she creates. The US empire is doomed. Just like all the others that went before it. It is doomed by nature herself — condemned by the gods to blow up and die. None of this should be surprising to you, dear reader. We’ve seen this movie before. Hundreds of empires have come and gone. We know how this movie ends. More or less. What we know for sure is that the US is going broke. There is hardly any other plausible outcome. We’ve gone over the numbers so often we don’t need to repeat them. Yes, it is true that the feds could ...

Say what you will about John Maynard Keynes (1883-1946). However loathed (or loved) as an economist, he was, undeniably, a great investor. Keynes (pronounced “canes”) piloted the endowment fund of King’s College through the dark years of the Great Depression. He steered the fund to 10-fold gains, excluding income (which the college spent). Keynes also divulged a key insight that helped him do it, back in 1936. “There is no sense in building up a new enterprise at a cost greater than that at which a similar existing enterprise can be purchased,” Keynes wrote. On the other hand, there is an incentive to spend money on projects, even “an extravagant sum, if it can be floated off on the stock exchange at an immediate profit.” In that paragraph is an idea so powerful it helped Keynes beat ...

Yesterday when the markets closed the price of oil was only 66 cents shy of $100. What a come back. We expected oil, stocks and gold to sink down deep…and not come back for a long time. So far, we’re wrong a about that. People are still sending money to Wall Street to buy stocks and gold. Where is all this money mail coming from? We don’t know exactly, but there are foreign stamps on many of the envelopes. Foreign stock markets are down. Many of the leading foreign bonds are down too. Investors look at Italy; they see Vesuvius. They look at France; they see Dunkirk. They look India; they see a Black Hole. Investors are afraid. They look to the USA for safety. But oil? Hmmm… We don’t know the cause, but we have a pretty clear idea of the consequence. High oil prices make it harder for ...