Rising Prices, Falling Purchasing Power, Contraction in Benefits and Health Coverage, etc

Rising prices, falling purchasing power, contraction in benefits and health coverage suggest falling standard of livings across America despite suggestions that everything is normal. There are all byproducts of a crippling debt burden.

Headline: Blue Shield of California proposes 59% premium rate hike

One of California's largest health insurers - Blue Shield - announced plans to hike its premiums by as much as 59%.

The jacked up premium rates are set to take effect on March 1, pending review from state insurance regulators. The move impacts 193,000 Blue Shield policy holders.

The company, a member of the Blue Cross Blue Shield Association with 3.3 million members, which announced the move late Thursday, stressed that its decision has "almost nothing to do with the federal health reform law" and that ultimately the law will help slow down health care costs.

Source: finance.yahoo.com

The Problem Is Debt

Those with power (in power) will do anything to maintain it. Even if anything includes shooting the economy in the foot in the process. The problem is excess debt and taxation within a framework of global competition. Raising taxes will not solve either problem.

Total Credit Market Debt As A% GDP:


Source: What Price Is High Enough

Headline: Bond Buyers' Eyes Are on Illinois

As Illinois lawmakers huddle behind closed doors this week trying to find ways to plug the state's $13 billion deficit, municipal-bond investors are sizing up how to wager amid the state's woes.

Investors who have been skeptical about the state's ability to right its finances got a ray of good news late Thursday, when the governor and key Democratic leaders reached an agreement that would raise the state's income-tax rate.

If approved, an income-tax increase would be the state's first in roughly two decades. The proposal would raise the rate to 5.25% from 3%, according to a person familiar with the matter. The person said the negotiations were "still fluid" and the deal was not final.

Source: finance.yahoo.com

Labor Market Remains Weak

While the headlines try to spin today's employment numbers as strong, they will likely ignore the fact that early stages of the liquidity driven recovery remain comparatively weak. Roughly 1.1 million jobs were created in 2010. This represents a 45% reduction in total job creation in comparison 2004. In addition, over 500,000 thousand jobs, 45% of the total jobs created, were estimated by the birth/death model (BDM). In other words, the reliance of job creation on BDM also increased in comparison to 2004.

Birth/Death Model (BDM) Contribution to Nonfarm Net Payrolls (NFP) Added/(Lost):


What really paints the picture of labor and economic weakness is the jobs creation histogram (JCH). The jobs creation histogram measures the number of jobs created or destroyed relative to the labor force expansion or contraction. Straight to the point, the number of jobs created has been unable to keep pace with the labor force demands since 2007. Yes, that's 2007. One of the ways the household employment survey keeps the unemployment rate below 10%, reported at 9.4% today, is to reclassify the number of workers within the civilian labor force. In other words, they modify the denominator to influence the calculation. The JCH was specifically created to remove statistical ‘massages’ (bias) from the study of labor market trends.

Job Creation Histogram (JCH): Net Nonfarm Payrolls Added/(Lost) less Civilian Labor Force Added/(Lost), 12 Month Average:


Headline: Unemployment rate falls to 9.4 percent, hiring up

The nation's unemployment rate dropped to 9.4 percent last month, its lowest level in 19 months. That was because more people found jobs, but also because some people gave up on their job searches.

The Labor Department says employers added 103,000 jobs in December, an improvement from November's revised total of 71,000 but far below most analysts' expectations.

Long Range Weather Forecast

WANews11No01

2011 - Another year of weather extremes warns Piers “Solar-lunar driven major jet stream blocking will continue through January and the whole of 2011 giving more extreme cold and snowy / blizzardy spells in parts of USA, Britain and Europe though January continuing into February and then not the sort of Spring and Summer the warmists want.

Source: weatheraction.com

Geithner says U.S. could hit debt limit by March 31

Kicking the can down the road requires more debt. It is foolish to assume that this debt will be repaid in anything by devalued dollars.

Headline: Geithner says U.S. could hit debt limit by March 31

The United States may hit the legal limit on its ability to borrow by March 31 and faces serious consequences unless Congress acts by then to raise it, Treasury Secretary Timothy Geithner said on Thursday.

"Even a short-term or limited default would have catastrophic economic consequences that would last for decades," Geithner said in a letter to U.S. Senate Majority leader Harry Reid that was issued by Treasury.

Source: finance.yahoo.com

Plan To Trade Gold in Renminbi

The trading of gold in renminbi opens the door for arbitrage with dollar. This will allow the Chinese to continue attacking the dollar as "the reserve currency".

Headline: Gold demand to zoom in China in 2011

There are a lot of things in this world that I do not understand, and perhaps it is because of this persistent befuddlement that, for some mysterious reason, I think it is Highly, Highly Significant (HHS) that the Chinese Gold & Silver Exchange is planning "a first" – an international gold contract denominated in Renminbi, writes the Mogambo Guru from his lair in Tampa, Florida for The Daily Reckoning.

Agora Financial's 5-Minute Forecast notes that "Right now, the Hong Kong-based exchange settles all its trades in Hong Kong Dollars," which should be enough to get the job done, you would think. So why a new international gold contract denominated in Chinese Renminbi? I don't know, which is not unusual because I actually know so little about anything, but The 5 says, "Adding Renminbi to the mix could boost the exchange's trading volume by 20%, to a daily total of $6 billion," which I assume means that commissions, fees and money made by middlemen would increase, for one thing! Hahaha!

Source: commodityonline.com

As Expect Drama In The Silver Market

As expected, the silver market has been characterized by drama on both sides of the trade. The rhetoric from both sides of the nontransparent operation has approached spiritual levels. The message of the market to the dismay of some has not changed.

The energy of the tape accelerated in November 2010 as price began its battle with upper channel resistance. This surge in trend energy, or the kinetic energy should not be ignored. The law of conservation of energy suggests that energy can neither be created nor destroyed; it can only be transferred into one state from another. A lot of paper creation will be required to absorb the massive surge in kinetic energy of the tape. Can the market handle more paper creation? The market, either upside or downside break from the upper channel bands (circled green), will answer that question.

Silver ETF (SLV):