Inflation Trends, Debt Ceiling Breached, and Silver

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Third Largest Silver Producing Mine Workers on Strike for Sixth Day

A Strike at the San Cristobal Silver Mine enters its sixth day. With the silver market as tight as it is, this certainly can not help. Not only does the San Cristobal Mine account for HALF of Bolivia’s exports, this mine is the third largest silver producing and the sixth largest zinc producing mine in the WORLD! This strike started last Friday when workers demanded better working conditions and the firing of several officials. Mining production has been completely halted now for almost an entire week. This has been completely ignored by the financial media.

U.S. Government Breaking the Law

Yesterday the debt ceiling was officially breached, eight days earlier than forecasted. Actually, Timothy Geithner gave us a range between April 7th through May 31st when the debt ceiling would be breached, but like all government forecasts, the Treasury Department’s forecast was too rosy and ended up being completely wrong. So, technically the world is supposed to stop at this point, no more borrowing is allowed, the media should be going crazy, and the complete collapse of the dollar should be big news. Yet instead, nothing. The U.S. continues to borrow (now illegally), the media is not talking about it, and the bond market which is supported by freshly digital printed dollars doesn’t seem to care either. The Fed now accounts for 70% of treasuries being purchased and the U.S. government has breached its own self imposed debt ceiling, yet no one seems to care. In our opinion, any sane minded person will at this point (if they haven’t already done so) accept t hat nothing is going to change and prepare for the inevitable dollar crisis.

Yesterday the Treasury sold 29 billion in bonds bringing the total U.S. debt to 14.311 trillion, the current debt ceiling is 14.294. Now with a 52.2 billion dollar buffer for the total debt, a technical default should happen within the next 10 trading days, let’s see if that makes any news. Bill Gross, the largest bond fund manager in the world, recently had this to say regarding U.S. debt,

unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies – inflation, currency devaluation, and low negative real interest rates.
We should note that Bill Gross currently holds no Treasuries, however most Americans, especially retirees, have plenty of Treasuries since they are told they are ultra safe by conventional advisers. In case anyone wanted to know, our staff is loading up on energy, agriculture, mining, alternative energy, and any investment that can potentially do well during a time of a systemic currency crisis.

Japan, Energy, and the US Economy

Already we have recently seen reports from Nissan that they have been forced to reduce or even halt production in some plants due to missing parts that they depend on from Japan. With the recent news yesterday, Bloomberg reported that it looks like Japan is preparing to bury the Fukushima reactor with thousands of tons of concrete. Bloomberg reported that they are currently considering pouring concrete into the atomic plant to reduce radiation and to try and contain the disaster. Now judging by the last few weeks, we would assume that if Japanese officials are openly considering this option, more than likely this means that it is already going to happen and is in the works. This is going to have a huge impact on Japan, the U.S., and energy markets overall. Any relief investors thought would come from the Tsunami, will be short lived. With Japan losing some or all of its nuclear energy for an extended perio d of time; watch out, energy markets could go parabolic. Natural gas, petroleum, and other sources of energy will be in HIGH demand, Japan will now have an enormous energy void to fill. FutureMoneyTrends.com is working hard on finding a ground floor alternative energy company to present to our members, hopefully by this weekend. Our goal is to present an alternative energy company to our members before any official announcement comes from Japan regarding the fate of Fukushima. With the sovereign debt crisis, Middle east, and now Japanese nuclear problems, energy companies are going to see a lot of money flow into them. Of course our trademark is, “smart money invested in future trends.” So, we will be working overtime in order to present an energy profile to our members as soon as possible. Our last energy profile went up 10% on the first day on record breaking volume, so as you can see, sometimes the news travels fast.

Gold and Silver Bubble Analysis

We believe precious metals are far away from turning into a bubble (for reference please see our article titled, ‘Gold 1980 Vs. Today’). However, from time to time we like to point out some shocking statistics in order to counter the barrage of froth talk coming from the media. PDAC, the largest mining show in the world, took place just a few weeks ago in Toronto, Canada. This is a show where investors, industry analysts, companies, and mining representatives all come together.

Now with gold rising from $300 to $1,440 in the past 10 years, you would think that this type of show would receive a lot of attention, especially if gold was in a bubble. If you look at some of the real estate seminars that were going on in 2006, thousands of them all across the country, every single weekend, certainly 1 mining show would bring at least a few hundred thousand interested investors. So, how many people attended the largest mining exhibit in the world? 27,700…. Need we-say-more.

Food Prices Headed HIGHER Corn is not only used in animal feed and now fuel, but over 4,400 grocery store products. The primary fertilizer for corn is anhydrous ammonia, this time last year farmers were paying roughly $425/ton. This year post QE1 and during QE2 the cost is north of $750/ton. Not only will this cause corn and food prices to rise in general, but because of the high cost of fertilizer, this situation could even get worse because many farmers have been priced out of the corn market due to this high production cost. So, they have chosen to NOT plant corn, instead they are planting other crops like soybeans. A higher cost of production and less production is going to effect food prices significantly. PLEASE, use this information wisely, if you haven’t read our food inflation report, do so now, share this and other information with as many people as possible. Remember, there are many factors all coming together that are telling us there is going to be much higher food prices in the NEAR future. Just this morning the CEO of Walmart, Bob Simon, warned consumers that he expects serious inflation in the months ahead for food, clothing, and other products. When discussing Walmart’s costs he told USA Today,

We’re seeing cost increases starting to come through at a pretty rapid rate.
Focus on the trends and share our emails with friends and family.

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