KICKING THE CAN DOWN THE ROAD

The inflation I've warned about and the social unrest that goes with it are here compliments of the Federal Reserve's money printing insanity. Coal and oil are trading at two-year highs. Corn, soybeans, wheat, and sugar are trading at multiyear highs. Cotton has reached 140 year highs. Gold and copper are trading at record highs. Silver is trading at a 30-year high.

When Americans go shopping for food and clothing, their eyes cross in disbelief. What is merely an inconvenience for most of them is a matter of survival for countless millions in the developing world. So, while there is a political component to the protests in Egypt, Tunisia, Yemen, Jordan etc., the trigger is rocketing food prices.

While the government's infamous Plunge Protection Team buys S&P futures to support the fantasy stock market and the Federal Reserve prints up the money to buy the Treasury's (printed-up) Treasury Bonds in a desperate attempt to prevent the bond market from evaporating, the world's investors are running for their lives away from the U.S. dollar. And with most of our state and local governments broke, the municipal bond market has already crashed. Housing prices continue their decline.

The debt bubble is searching for a pin. The government's only solution is to lie to the American people while "fixing" the unfixable debt by adding more debt. This is called "kicking the can down the road" or "extend and pretend." It's a desperate attempt at buying time. But anyone with a certain body part on top of his or her neck knows that it will not end well. We are closing in on the tipping point. Once again, get ahead of the curve. Protect yourselves.

February 1, 2011