Tuesday, June 14, 2011

Troublin' Tuesday- Severe Weather Puts Damper On "Recovery"; Missouri River Overflows, Threatens Nuclear Power Plant; West Palm Beach Florida Has 22 Days of Water; Chilean Volcano Covers 5 Nations, Threatens Economy; New Zealand Updates Earthquake Status, Now M6.3; Greek Bonds On Last Leg, Greece On Last Leg; England's Largest General Strike In Over 100 Years; One Million Amercian's Ready To See Austerity; U.S. Postal Service Insolvent; John Embry Says U.S. Has Two Months Left Before SHTF; Facebook Membership Declines, What's Goldman To Do?; Apple To Sell Unlocked iPhones, Last Resort?; Fukushima Updates Galore; More

Editors Note: Today, at 9:00 am EST, after collecting news from a link in the "UK Daily Mail," a reputable source we often quote from, our main computer went down from advertising. We will no longer provide links to that site until they remove the viruses hidden as Java based advertising and we recommend everyone take extra caution when visiting even "reputable" sites. Sorry for the delay.

Update 1: Countdown to the end of POMO. Explains everything you wanted to know about fake markets.

Main Article
The main reason why we focus so much of our attention on natural disasters is simply because nothing else has the potential for greater devastation on the world's financial situation than what the natural elements of the earth can dish out. More recently, the earth has been giving warnings on a magnitude never seen before and contrary to what the talking heads on CNBS spew on a regular basis, natural disasters are not "bullish" for the global economy.

Therefore, we are observing with keen interest the developments along the Missouri River as the crisis in the mid-West escalates into a full blown catastrophe as one levee after another fails and floods many industrial complexes along the river and near Hamburg, Missouri and continuing on down into St. Louis. Currently, the Ft. Calhoun Nuclear Power Plant is in a state of emergency, as they try desperately to keep the water away. As Arnie Gundersen stated last week, this has the potential for being America's "Fukushima."

While 40% of the nation is experiencing flooding, another 40% is experiencing severe drought. In Florida, West Palm Beach has just 22 days of water remaining. And there is no end in sight.

An excellent article in the Guardian entitled, "Warning: Extreme Weather Ahead" highlights what many scientist have feared for a long time. The term "global warming" is now being replaced with the term "global weirding."

In Chile, we find a dramatic volcanic eruption which is having a severe impact on the environment. As we reported last week, over 80,000 square miles of land were being covered in ash from the plumes. Since then, the situation has only deteriorated and now millions of people in 5 South American nations are facing food shortages, lack of clean water, and even a full economic collapse. Once again, main stream media is silent. We're sure this is also bullish for the insurers and for the "BRIC" members who support on their South American friends for growth. Ask Warren if Munich Re will be issuing bigger dividends this year.

In New Zealand we find that yesterday's magnitude 6.0 earthquake was upgraded overnight to 6.3, leaving dozens of people inured, at least 1 dead and hundreds of buildings damaged. Now, the gov't is being very quite after the most recent quakes. Do they expect more to come?

Back in March, we warned that Greece was on the verge of collapse and within 6 months, they would default restructure. Today, we are getting conformation that this prediction is coming to fruition. Greek bond yields hit a new record, making Greece the most risky nation in the world to invest. In other words, investing in Iraq is a safe bet compared to Greece. And the ratings agencies as always are late to the game, managing just now to downgrade Greece to junk when Greece has been officially insolvent since May of 2010.

Of course, those of you that have been reading this site for all of its three months of existence, have already determined by the due diligence provided here, that England is just as insolvent as Greece, which is just as insolvent as the whole EU which is just as insolvent as the U.S. So what is an insolvent nation to do? How about implement more austerity? England's population is reacting with mass protests and the largest General Strike in over 100 years. The U.S.'s population has yet to really riot react to austerity, but once the combined proposed layoffs of 1+ million workers hits the fan, something else will be simultaneously hitting the fan as well. And that's putting it nicely. At last check, the U.S Postal Service was about $16 Billion in the red and has about 5 months remaining before it goes totally under. Unless of course, someone gets another handout bailout. The full enormity of this has yet to be seen, let alone felt.

All of this should have already been clear since 2008 to astute investors that read Zero Hedge and Fiat's Fire and now others are picking up on the reality of it all - Today, King World News interviewed John Embry, Chief Investment Strategist of Sprott Asset Management and when they asked him about the U.S. debt situation, Embry said “They’ve got this market in a lockdown because they don’t have any answers to anything. So they’re just kicking the can down the road, but we’re getting close to when the can is going to hit the wall, then we’re going to have some action and I suspect that’s going to happen in the next two months." In other words, if John Embry were to vote on our newest poll, he'd pick answer number 3 - "Yes, in 6 months," a Great Depression is coming. Read the full interview - it's interesting to see how slow the big guys are to Main Street's indicators.

Speaking of big guys (not the CEO of LinkedIn), Facebook's membership rolls are declining in the developed world and may have already seen growth slow in other parts. We wonder how Goldman Sachs will spin this as they try to pawn off billions of worthless shares onto investors. As of last check, Goldman was looking to "value" Facebook at $100 Billion. If current trends are forecasting anything, Facebook won't be worth $20 Billion in 2 years. Remember, fads come and go but there is a sucker (retail investor) born every minute. LinkedIn proves that to still be true.

In yet another sign that even megacorps are getting desperate, Apple announced it will begin selling unlocked iPhones in the U.S. Of course that means they now realize that AT&T service/data networks/customer service business model sucks has reached its peak. It's all downhill from here boys. How much more growth can cell phone providers expect to squeeze out? Watch as they feed on one another for desperate sales. At this point, even iPhone 5.x with a holographic display won't be able to turn things around.

Ok, by now you know by the time you've reached this section of the article, I usually comment on Fukushima. I promise you, today's news reel comes hot and heavy off the press so be ready. Very little commentary is necessary.

- Curium 244 detected for first time outside Fukushima plant. (Requires lead shield 2 inches thick, or 20 times greater than Plutonium. In other words, unstoppable.)

- New assessment by Japanese gov't on Fukushima: “The situation has become extremely severe.” (Only about 93 days too late, guys.)

- Fukushima cover up. It's bad. (Must watch. Everything we have been saying since day 2. Pay attention.)

- Radiation 1000 (One Thousand) times "safe level" detected outside evacuation zone. (We wonder if this is 1000 times the "new safe limit" which was more than doubled after the disaster.)

- Experts don't know how radioactive Cesium ended up hundreds of kilometers from Fukushima. (Well, we don't know how these "experts" ended up working for TEPCO. Oh wait. Scratch that. Yes we do.)

- Finally, a new plume forecast map which answers the previous problem the "experts" can't answer.

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