US Trade Deficit Deteriorates As US Import Price Index Surges By Most Since June 2009

Submitted by Tyler Durden on 04/12/2011 08:43 -0400

Another month, and another confirmation that the US export segment is non-existent. In February the US posted a $45.8 billion trade deficit compared to $47 billion in January, but worse than expectations of $44 billion. Importing our way to prosperity and #Winning_the_Future continues. Comparing the Chinese reported trade surplus with the US and the US reported trade deficit with China we get just a 100%+ difference: $7.8 billion versus $18.8 billion. Gotta love two administrations that just make up numbers trying to reconcile their fraud. This number also means that Q1 GDP will see another major revision lower. And so will Q2, Q3 and so forth, leading to QE3. And while we are at it, let's just make it stagflation: the US import price index surged from 1.4% to 2.7% on expectations of 2.1%: the largest rise since June 2009.

Gold Over £900/oz As British Pound Falls Sharply - Soaring Inflation Sees UK Retail Sales Plunge Most On Record

Submitted by Tyler Durden on 04/12/2011 07:06 -040

Gold is marginally lower in all currencies today except sterling after UK retail sales plunged the most on record in March due to deepening inflation. Consumer’s finances in the UK and internationally are being negatively impacted by food and energy inflation showing the UK’s vulnerability to a double dip recession and stagflation. Gold rose 0.5% in sterling over the £900/oz mark again. Silver has recovered somewhat from yesterdays sell off and is nearly 1% up against major currencies and 1.5% higher against the pound. Yesterday’s selling was likely primarily due to speculators taking profits and locking in recent gains. Households in the UK are seeing their spending power eroded at the fastest rate in more than 60 years as food and energy costs soar and the faltering recovery restrains wage increases. Concerns about the tentative economic recovery as well as the government’s VAT increase and the deepest spending cuts since World War II are undermining consumer confidence. 

 

 

 

UK Inflation Plunges As Retail Sales Drop By Most On Record

Submitted by Tyler Durden on 04/12/2011 07:20 -0400

Earlier today UK economic data confirmed that the recent hike by the ECB may well have been the dumbest decision taken in Europe in 2011 (aside from continuing to bail out continental bankers with impunity). Consumer prices rose 4 percent from a year earlier after a 4.4 percent increase in February, the Office for National Statistics said today in London. The cost of food fell the most in almost four years. Consensus inflation was for another 4.4% rise. The reason why inflation plunged - a complete obliteration in retail sales, which fell by a record in March, the British Retail Consortium said today, removing any pricing power by retailers. Of course, in America where the government is doing all it can to prevent deadbeats from paying their mortgage, we still have a long ways to go before retail sales actually drop to the point where inflation is constrained by actual real "pro forma" wages. Most importantly, this outcome confirms that the BOE was lucky enough not to rush and hike ahead, leaving the ECB as the only central bank with a tightening regime and one which will soon bring Spain to the brink of insolvency. 

 

 

 

Got Food?

"End Of The World" Inflation: 47% In Six Months

Submitted by Tyler Durden on 04/11/2011 22:22 -0400

Back in October, Zero Hedge discussed a Costco offer for Shelf-Reliance THRIVE's one year's supply of dehydrated, freeze dried food, better known as "apocalypse rations." Six months ago a one year's supply of food for one person which included 5,011 total servings (84 #10 cans) could be purchased for $799.99 (the link for the offering is here, or rather was, here). A series of events made us encounter a comparable THRIVE offering at Costco. To our amazement in six months, the real price inflation in apocalypse rations, when factoring proportioning, is almost 50%! While the original set that was presented back in October is no longer available, what Costco does offer is a Shelf Reliance THRIVE 6 month supply supply for the price of $579.99: this represents the pinnacle of that ultimate in inflation disguising techniques: cutting the price by X while cutting the amount offered by Y>>>X. Indeed, to last a person a full year, one would need to be two of the 6 month supplies for a price of $579.99 or $1,159.98. And even that has to be indexed: the current set has 2,470 total servings, whereas the previous offer had 5,011, or 203% more. In other words, to index for the proper serving ratio the final price is actually $1,176.65. We can only hope that there are those who purchased this product when we first presented it (and don't worry, with a 25 year shelf life, it lasts a looooong time) and saved themselves the 47% inflation in 6 months! And then there are non THRIVE product offerings, such as the one below for 2 people for 3 months for $999.99 (and includes its own 55 gallon water storage set), which represents price inflation well over 100% for those who need a little extra caloric kick (and, naturally, post-apocalypse social status with the neighbors). Something tells us in another 6 months, the Costco price today will be just as lamented as the price from 6 months ago currently is.

More Lies At Berkshire: Revised Proxy Reveals Previously Undisclosed Contact Between Sokol And Lubrizol Bankers Ahead Of Stock Purchase

Submitted by Tyler Durden on 04/11/2011 23:52 -0400

The story that continues to expose the dirty laundry of Berkshire, much the Octogenarian of Omaha's chagrin, refuses to go away. According to the a newly released version of the Lubrizol proxy statement, it appears that there was a modest change in the "recollection" of events from Lubrizol's perspective, most notably a change in language describing the amount of information relayed to Sokol by Citi's bankers expressing just how seriously LZ was taking Berkshire's preliminary interest in the firm ahead of Sokol's major $10 MM stock purchase. 

 

 

 

Jan Hatzius Warns Of Further GDP Downside Following Trade Deficit Update

Submitted by Tyler Durden on 04/12/2011 09:16 -0400

Recently Jan Hatzius cut his Q1 GDP as was reported first on Zero Hedge, to 2.5%, even as the Goldman chief economist is still (we give it 2 weeks) keeping his FYE GDP outlook constant (who says bulge brackets don't believe in hockeysticks). Following the just released ugly trade data which as we suspected would lead to even more GDP downgrades, Dudley's successor is out with yet another warning that should come as manna from heaven to those who continue to believe in non-dilutable assets: "Through February, the trade data suggest a large drag on GDP growth in the first quarter and suggest downside risk to our 2.5% forecast." Gee whiz, Jan, if Q1 when the bulk of the tax stimulus is concentrated (which was the reason for Goldman's December bullish 180 on the economy) is unable to post an economic improvement, what is left for the rest of the year, when no more fiscal stimulus is projected, and when, gulp, QE3 is ending? We can't wait to hear your explanation for this. 

 

 

 

All Carry Unwinding Fast - General Collateral Hits Unprecedented 1 Basis Point

Submitted by Tyler Durden on 04/12/2011 11:04 -0400

While the sell off in stocks and commodities following Goldman's latest two-ply hit job had left the FX carry alone, it appears that even the funding desks have given up and are now dumping the core carry pairs, sending the JPY once again back to the intervention border. As the chart shows all FX carry pairs just got trampled, which in the perverse vicious loop that the market has become courtesy of peak leverage, means further weakness across all assets is likely imminent. As for that other source of funding that we have been talking about for a week now: the GC-Repo rate, forget about it. General Collateral just hit an unprecedented 1 basis point! 

 

 

 

 

Why outlaw private gold and silver coins?

 

 

 

Money Problems That Never Seem To End: 25 Reasons To Be Absolutely Disgusted With The U.S. Economy

 

 

 

Gold’s Slow Rise To The Top

Posted: Apr 11 2011     By: Jim Sinclair      Post Edited: April 11, 2011 at 10:32 pm
Filed under: General Editorial

My Dear Friends,
Today was full of business meetings in New York. Having spent 27 years on Wall Street, getting me into that city is not easy. When duty calls however, who am I to argue.
I watched the gold market today somewhat displaced from the action. In fact it is via a CME app on an iPhone. A few times I was asked a question, but my mind was on gold. I had to on more than one occasion ask for the question to be repeated.
What I saw impressed me. All during the USA night gold held its highs nicely. The trend certainly confirmed that the drama of closing down the US government shined the light of day on the over the top US debt position.
Today was an operation in the gold market because it was scary for it to have held its high. Just as the Exchange Stabilization Fund thinks a strong dollar policy is that it dies in front of our eyes slowly, control of the gold market is only that it does not go straight up to $3000 – $5000.
Gold is heading to $1500 plus, will get blasted back to these levels and then on to $1521, $1600 and $1650. There is no desire to stop it but only to make the climb challenging.
Stay focused on debt. Do not accept any of the hawkish central bank governor’s MOPE. They simply like to hear their own voices and to see their sketches in the Journal.
There is no practical way to drain the liquidity put in by QE everywhere in Western World finance. The operative word is PRACTICAL. Academically there are many ways with the risk inherent of bombing the weak recovery and running the Western World into a depression of all time.
Alf and Martin may well be right with their predictions of gold going to $3000 to $5000 and maybe beyond.
Regards,
Jim