Fed Hides Major Accounting Change

From the article:

The Fed, [sneaking] into a regular weekly report... will move off the capital part of its balance sheet any losses the Fed may have on paper it purchased from Goldman Sachs, or anybody else for that matter. Here's Reuters via CNBC (My emphasis):

Concerns that the Federal Reserve could suffer losses on its massive bond holdings may have driven the central bank to adopt a little-noticed accounting change with huge implications: it makes insolvency much less likely.

The significant shift was tucked quietly into the Fed's weekly report on its balance sheet and phrased in such technical terms that it was not even reported by financial media when originally announced on Jan. 6.

But the new rules have slowly begun to catch the attention of market analysts. Many are at once surprised that the Fed can set its own guidelines, and also relieved that the remote but dangerous possibility that the world's most powerful central bank might need to ask the U.S. Treasury or its member banks for money is now more likely to be averted.

But they are averting asking the Treasury for money in the future by an accounting gimmick that will simply dump the debt off the capital part of the balance sheet, so it won't be reported as a loss, and make it a liability to the Treasury.

Grocery prices skyrocket faster than official inflation

David Gutierrez, staff writer of NaturalNews.com, states in his article that:

Grocery prices increased at more than 50 percent the rate of inflation in 2010, according to data from the U.S. Bureau of Labor Statistics.

Food prices increased an average of 1.7 percent between November 2009 and November 2010, in comparison with a general inflation rate of only 1.1 percent. The greatest price increases were seen among meat, poultry, fish and eggs, which went up in cost by 5.8 percent. The price of sugar and sweets increased 1.2 percent, the price of fats and oils increased 3 percent and the price of dairy-based products increased 3.8 percent.

The only commodities to go up in price more than food were medical care and transportation.

From our research here at LA 4 Liberty, Education (Universities and Colleges) is the only sector in America to have price increases greater than food and medical care over the past several decades.  We believe a bubble is about to burst in that sector, because the increases are due to the student loan subsidies from the Federal government.  Student loans now make up the majority of personal loan debt in the US.

The Day of Rage

The Day of Rage: Thousands clash with police as protests boil over on streets of Egypt and Lebanon

Thousands of anti-government protesters inspired by the Tunisian revolution clashed with riot police in the centre of Cairo today demanding the overthrow of president Hosni Mubarak.
Police responded with water cannon and attacked crowds with batons and  tear gas to clear crowds demanding an end to the country's grinding poverty.
The prostest, the largest Egypt has seen for years, began peacefully, with police showing unusual restraint in what appeared to be a concerted government effort not to provoke a Tunisia-like mass revolt.
As the crowds in central Cairo's main Tahrir square continued to build, however, security personnel changed tactics and the protest turned violent.

NIA Inflation News Update - January 21st, 2011

Quote for January 24, 2011.

"Many politicians are in the habit of laying it down as a self-evident proposition, that no people ought to be free till they are fit to use their freedom. The maxim is worthy of the fool in the old story, who resolved not to go into the water till he had learned to swim." 

- Thomas Babington Macaulay (1800-1859)

CIA Fun Facts, Submitted by Bruce Krasting of FinancialSense.com

I would not say that these Facts are Fun, but they are instructive.  Every year, and updated weekly, the CIA publishes the World FactBook, a publication that Wikipedia says is:

A reference resource produced by the Central Intelligence Agency of the United States with almanac-style information about the countries of the world.

It provides a two- to three-page summary of the demographics, geography, communications, government, economy, and military of 267 entities^[3] including U.S.-recognized countries, dependencies, and other areas in the world.

The World Factbook is prepared by the CIA for the use of U.S. government officials, and its style, format, coverage, and content are primarily designed to meet their requirements.^[4] However, it is frequently used as a resource for academic research papers.^[5] As a work of the U.S. government, it is in the public domain in the United States.^[6]

Here are some quite telling excerpts from the article that demonstrate an ominous economic future:

The Global Economy...

The fiscal stimulus packages put in place in 2009-10 required most countries to run budget deficits - government balances have deteriorated for 14 out of every 15 countries. Treasuries issued new public debt - totaling $5.5 trillion since 2008 - to pay for the additional expenditures. To keep interest rates low, many central banks monetized that debt, injecting large sums of money into the economies. As economic activity picks up, central banks will face the difficult task of containing inflation without raising interest rates so high they snuff out further growth.

Public debt is on the rise... a small increase... from 56.2% to 58.3% of GDP. Only 2.1% [increase]. That doesn’t seem like a big change, right? But look at the implications. Total PSD [Public Sector Debt] rises by 3.4T while global GDP rises by only 3.2T. This means that it takes $1.06 of new debt to create $1 of growth. What better evidence do you need that what we are doing is unsustainable?

The US Contribution to the Global Economy...

World GDP [is] up 4.6% to 74.4 trillion (3.2T YoY).

The US is 20% of total GDP. It contributed only 14% of the total growth. Just a bit more evidence the US economic clout is on the wane.

The US Money Supply...

M1 and M3 (indicators of the total supply of US Dollars)... are rising at 7 and 11% respectively.

If the yearly growth of the US GDP is 3%, then the supply of money is growing twice as fast.  This is another reason to buy Precious Metals, true money, such as Gold and Silver.

The US Consumer Debt...

Domestic credit increases by $10 Trillion (10%) in just one year! Total credit is rising at a rate of 3Xs that of real GDP. Guys like [Economist Paul] Krugman will tell you that this is a good thing. To me it is a sign that hyperinflation can’t be very far off.

Again, go buy "The Metals"!

Global Farming...

More than one-third of the global population are farmers. But they only produce 6% of GDP. Conclusion(s)? We have inefficient farmers all over the world. Food prices are going up...

26 states join Obama health care lawsuit in US

State nullification at its best!