Thursday, June 12, 2014

A spike in the price of garlic

New unemployment claims were up last week but are still close to seven year lows. The number of job opening increased about 9% from March to April and were up 17% compared to April 2013. At 4.5 million this is the largest number of jobs that employers reported that they were recruiting for since 2007. Job opening have held at over 4 million for 3 consecutive months suggesting a general upturn in business.

The number of workers voluntarily quitting their jobs was up 11% over last year and people willing to change jobs suggests that the internal mood at companies is more positive. Of course some of these people may be motivated by their ability to always get insurance under ObamaCare reforms and no longer feel locked in at their current employer.

Russia appears to be moving aggressively to do a good deal of its trading in the Chinese Renminbi and some lesser Asian currencies, basically anything but the USD or the euro. China has been actively positioning itself to have a major world currency by persuading Australia, Britain and others to hold large reserves of Yuan. This makes it unnecessary to use the USD as an intermediate currency for trade with any number of smaller countries.  

Euro zone banks have begun to charge interest on cash deposited by large account holders. US banks have been doing this to some degree on dollars for years but it's only recently that the European Central Bank felt the need to do something about cash hoarding. It's always been the hallmark of the boom and bust cycles of capitalism that the rich begin to hang onto money when they smell the blood in the water of a deflationary collapse. The austerity measures that have been imposed on the debtor countries of southern Europe require significant deflation and this brings potential pennies on the euro buying opportunities down the road.

Andrew Mellon who was Sec of Treasury for three Republican Presidents in the 1920s summarized a deflation collapse as "when assets return to their rightful owners". He meant himself of course, it's difficult to estimate Melon's actual wealth as he was dodging the financial disclosure requirements of his job as well as income taxes, but he was perhaps a trillionaire in today's dollars. The Koch family fortune was made by using the boat load of cash Daddy Koch got from Josef Stalin for strategic oil well technology to buy up assets for 10 cents on the dollar.    

The price of oil is up sharply because of the imminent collapse of the oil companies' puppet government in Baghdad. Oil still has a long way to go to get to the $140/barrel price that Bush achieved during his Presidency. Starting with oil at $18/barrel, a price that analysts thought would be unsustainable once Saddam Hussein was out from under sanctions, Bush did pretty well for his cronies. That "Mission Accomplished" banner Bush got into trouble for was simply displayed at the wrong event. It was switched with the one that went to the country club that said "Go Navy".

It's a Full moon tomorrow on Friday the 13th, this rare event won't happen again for 35 years. If you live near Dick Cheney or any other Neo-Cons you'll want to hang extra wreaths of garlic before sunset.

Twitter @BruceEnberg - it's going to be nothing but garlic bread all next week.


Anonymous said...

A little known fact about President Bush's carrier landing. That carrier was in the Persian Gulf for over a year because of an extension of it's tour. When approaching their home port of San Francisco the were ordered to go back out to sea for two extra days so the president could do his stunt. Meanwhile families of the sailors had to wait for the homecoming celebration.