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December 20th, 2014
   "The U.S. economy has not recovered. It’s still in trouble. The numbers, as we move forward into 2015, are going to get much weaker. That’s going to, again, increase the speculation of a QE4. That will all be very negative for the dollar and very positive for gold.

   "Relative government stability is another big factor in a currency’s value. Over the last year, we’ve seen the domestic political circumstances go from bad to worse. I think the political situation is going to continue to deteriorate."  Dollar may dip in 2015.

< One year ago ShadowStats John Williams was predicting tough sledding for the U.S. economy, but government statistics indicate 2014 was a brighter year than he predicted.  If he blew it a year ago why should we pay attention to him again?

     First of all, his explanation of what happened in 2014 peels back some of the Fed'l Reserve's smoke and mirrors, and his forecast for 2015 reflects the change in the global economy in which the U.S. offers a cheery economic forecast while most of the rest of the world is battling recession.  

From 2004 to 2011, hospital ownership of physician practices increased from 24 percent to 49 percent.
Just 39 percent of doctors can now be considered old-fashioned family doctors.

    Among subjects that puzzle us is MEDICAL CARE. It has become so expensive and so complicated that we aim to spend more time in 2015 trying to figure out the mystery of medical pricing schemes.  

  As a boy in the early 1930s we recall the doctor coming to our house and charging $2.00 for the visit.  We understand what inflation has done to the dollar and why a modern doctor must charge a patient more than 100 times that amount for a ten-minute visit to his office. But there is more to it than inflation.  The fact that people 1/ believe sickness care is an entitlement, and 2/ someone else will pay for it, has contributed to runaway costs for medical services.  

  Joel Zinberg, writing in NYC's City Journal, contends: "The primary reason for this shift is physicians’ anxiety over compliance with expensive and burdensome government regulations, mandates, and reporting requirements."  Goodbye, Family Doctor


    "The fall of the price of oil is bad for people who invested in junk bonds issued by lots of high-flying shale oil firms, whose stocks have fallen about 60%. Their bonds are doing almost as bad. What is good for the American customer, and every other customer, is low-cost oil that is sold at low, low prices. This enables customers to achieve their goals more effectively. The fact that it is going to bankrupt a lot of high-flying companies that borrowed way too much money is neither here nor there for consumers. 'Not our problem.'"  OIL AND THE ECONOMY  

     A lot of excellent teaching moments abound with the declining price of crude oil.  Some economists are saying it's a bad thing because it is leading to unemployment in the oil industry and a breathtaking drop in profits.  Others are applauding the price decline pointing out it means more dollars in consumers' that can be spent on other things.  Sad to say, it's a very dull subject and not many people are interested.

          Dr. Gary North lays out the economic fundamentals, comparing the advantages of a free market approach to the customary Keynesian method.  

         President Obama is being denounced by several commentators for his speech yesterday revealing negotiations with Cuba that may (or may not) lead to a lifting of economic and political sanctions against  the hated Castro regime.  Others are praising Obama arguing that more trade and tourism would boost the island economy and lead to a boost in the lives of average Cuban residents.  

          Somehow, the notion of free trade sounds more promising than continuing a half-century program of political sanctions.  Besides, we would no longer have to smuggle those Havana cigars into the U.S.  


1/ There is no material that can make cent production cheaper. 

2/ Currently, the costs to industries that make use of coin-accepting machines (such as vending, parking meter or change machines, etc.) far outweigh the savings incurred by using the most promising alternative coin composition. 

3/ what changes might be made to smaller denominations. Zinc-based compositions aren’t good enough for denominations over one cent; multi-ply and nickel plated steel aren’t good enough for denominations higher than a quarter. 

4/Therefore, the US Mint does not recommend changing coin compositions at this time, though research is ongoing.                                                                 U.S. Coin Manufacturing 

    Note:  Even if the mint changed the cent composition to aluminum it would still cost more than a cent to manufacture and distribute them.  It's likely the future of the cent and nickel are doomed despite pressure from metals suppliers to keep them in production. 

    "What would you do if you were Vladimir Putin? What would you do if you were a Russian citizen? Russia´s economic problems -- slowly incubating in recent months -- are about to get a lot worse. And that should make all of us nervous. The stomach-turning free fall of the ruble, the Russian currency, revealed the impending crisis. It may seem like a matter of economics, but at this level it is about politics, and when it comes to Putin, politics does not stop at the Russian border. Putin will try to blame Russia´s problems on the West."  Putin's Woes < Frida Ghitis labors under the impression that economics is one thing and high level political issues are another.  Actually, the study of economics involves all aspects of human endeavor - up to and including the political machinations to which Vladimir Putin may resort - trapped as he is in a currency crisis. 

    We armchair economists can't do anything about it, but observing how the Russian dilemma plays out and affects our personal lives will be useful.  If this leads to a serious disruption of the European Union  we'll have troubles a-plenty.

   2014 is rapidly drawing to close and only 31 percent of Americans say they are making resolutions concerning their finances in 2015.  (According to a survey by Fidelity Investments.)

   Of those who ARE making financial resolutions just over half say they plan to save more.  The median goal is $200.00 per month.  Only 20 percent said they planned to pay off debt, and a mere 17 percent said they wished to spend less money. 

   Our own resolution for 2015 is not to make any resolutions.  We just plan to stick to an old habit of trying to live within our means and avoid buying things we don't need with money we don't have.  This is not what the retail sector wants to hear, but our old habits are hard to break. 

   "The $3.8 trillion in new debt that the federal government has accumulated under the spending deals approved by a Republican-controlled House of Representatives over the past 3.8 years equals $2,772,736,422.84 in new debt per day."  

   It's almost heretical to point out that federal debt rises at the rate of almost $3 billion per day under the noses of a Republican House majority, but when it calls to mounting debt the nation is way overdue in slamming on the spending brakes.  OUT OF CONTROL DEBT

      In a related recent commentary, David Stockman flies the warning flag on debt.   Stockman was the Budget Director in the Reagan administration when the United States public debt first topped $1 trillion.  This gives him a slightly better perspective than most of the rest of us.  

     It took 205 years to pile up a $1 trillion debt, and only 33 years to hit $18 trillion in public debt. This seems like a worthy predicament to ponder! " PUBLIC DEBT

(More Stockman)
"The Fed is pushing on a string."

Surely, this won't affect average folks. Will it?

    "The central banks are now out of dry powder—– impaled on the zero-bound. That means any resort to a massive new round of money printing can not be disguised as an effort to “stimulate” the macro-economy by temporarily driving interest rates to “extraordinarily” low levels. They are already there.

    "Instead, a Bernanke style balance sheet explosion like that which stopped the financial meltdown in the fall and winter of 2008-2009 will be seen for exactly what it is—-an exercise in pure monetary desperation and quackery.

    "So duck and cover. This storm could be a monster." The Storm is Nigh 

  There's not much point in worrying about what the Fed'l Reserve and other central banks around the world are doing.  There is almost nothing average folks can do about it, although our private lives will be heavily impacted by their bookkeeping shenanigans.  David Stockman 's analysis is too lengthy - but it's loaded with information for the individual who knows there's something in the wind and they're trying to find out what's gone wrong and build a defense against the consequences.

     It's a pity the subject of money and finance is blanketed with such boring jargon .

This is either nonsensical double-talk or a reasonable expectation.  

   "And by the way, keep your eyes on the 'key round number' of €1,000/oz. gold – which we are just a few Euros away from; and ¥154,000/oz. gold – i.e., Yen-priced gold’s all-time high, which we are just 5% away from.  When one – or both – of these levels are breached, massive technical buying programs will likely kick in; which in and of themselves, could bury the Cartel in an inevitable 'unstoppable tsunami of reality.' " Unstoppable Reality

   Andrew Hoffman pens an interesting review of the quandary in which the Federal Reserve finds itself and the long running manipulation of markets, including the pressure on the price range of gold/silver.  

   Bottom line:  Manipulation can only work for a certain length of time before reality nudges its way into the scene.  This cycle has been going on since the Sumarian Republic began keeping records in ancient times.  

    Footnote:  Hoffman contends money and fiscal manipulation affects some 99 percent of the world's population.  As a member of that 99 percent we try to figure out where the high ground will be when a tsunami rolls in.

     "A problem that the internet poses for newspapers is the divide between the intelligent and the rest. Again we see two opposed poles, though in this case blending imperceptibly into one another. The major media are not comfortable with intelligence. Television is worst, the medium of the illiterate, barely literate, stupid, uneducated, and uninterested. It cannot afford to air much that might puzzle these classes."  The News Racket < This comment from the curmudgeonly veteran newspaper guy, Fred 

     Many people recognize the slogan of the New York Times..."All the news that's fit to print."  Not many know that its official CREDO is: "To give the news impartially, without fear or favor, regardless of any party, sect, or interests involved."  Obviously, the Times tossed its credo overboard long ago.