Prices of Food Going Up, Silver Purchases at Never Before Seen Levels, Fed about to Implode?

Jobless Claims Jump, Wholesale Food Costs Surge

The split between weak underlying inflation and high food and energy prices makes it harder for Federal Reserve officials to argue publicly that inflation is not a threat. A fear of inflation being too low has underpinned the Fed's efforts to support the economy by purchasing government bonds.

Another key factor is the bleak jobs picture, not helped by the Labor Department data.

The number of Americans who continued to claim benefits after an initial week of aid did retreat sharply to 3.88 million from 4.13 million, offering some reason for hope.

Still, the total number of Americans on benefit rolls, including those receiving extended benefits under emergency government programs, jumped to 9.19 million from 8.77 million.

Source:  http://www.reuters.com/article/idUSTRE70A41H20110113?pageNumber=2

US Mint Reports Unprecedented Buying Spree Of Physical Silver

Three days ago we noted that in just the first week of January, the US Mint had sold 2,221,000 ounces of silver "a number which if run-rated would be an absolutely all time monthly record," A quick glance at the tally today, shows that something very scary is going on. In the subsequent three days, the number has surged by 50% and has hit 3,407,000 ounces of silver! In just the first 12 days of the month we have already surpassed the total monthly sales of 9 separate months of 2010.

Source:  http://www.zerohedge.com/article/us-mint-reports-unprecedented-buying-spree-physical-silver?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29&utm_content=FaceBook

S&P, Moody's Warn On U.S. Credit Rating

Two leading credit-rating firms have cautioned the U.S. on its rating, expressing concern over a deteriorating fiscal situation that they say needs correction.

The warnings issued Thursday echoed prior statements by the companies, however, and financial markets largely ignored them. Treasury yields, which move in the opposite direction as prices, were lower in late-morning trade and the cost of insuring U.S. debt against the risk of default, already below that of Germany, the euro-zone benchmark, barely budged.

"My traders are shrugging it off as stuff we've heard before," said Tom Di Galoma, head of interest-rate trading at Guggenheim Partners in New York.

Moody's Investors Service said in a report that the U.S. will need to reverse an upward trajectory in the debt ratios to support its triple-A rating.

Source:  http://online.wsj.com/article/SB10001424052748703583404576079311379009904.html?mod=WSJ_hp_LEFTWhatsNewsCollection

 

Could the U.S. Central Bank go Broke?

Varadarajan Chari, an economics professor at the University of Minnesota and a consultant to the Minneapolis Fed, says that at some point during its exit from easy monetary policies, the Fed actually may go broke -- at least on paper.

"The most obvious exit strategy is, when inflation starts to pick up, to stop and reverse asset purchases," he said. "That's likely to include requiring the Fed in an accounting sense to see a significant accounting loss."

The Fed now holds just over $1 trillion in Treasuries, Chari noted, and if inflation rose by a couple of percentage points, it would dent the value of those holdings by about 10 percent, leaving the Fed with a $100 billion loss.

"I'm sure it will have some negative political fallout," Chari said. "But not economic consequences. Their ability to print money means it (insolvency) doesn't mean anything."

Source:  http://www.reuters.com/article/idUSTRE7096FE20110111?pageNumber=1

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Those of you preparing yourselves and your families by buying physical gold and silver, purchasing large quantities of long-term storage food stuffs, and putting your money into commodities such as, corn, wheat, sugar, coffee, oil, etc are to be commended; for it will be you that will be the back-bone supporting the structure of freedom.  For those whose eyes are not yet open will not be able to support themselves or their families, let alone support any type of structure, those with their eyes closed will run to the Government--as intended--begging for help.  Those with the foresight to prepare for themselves and their families will be able and ready to stand on their own.

For those not quite believing in self-reliance, ask yourself this very simple question.  Do I wish to be a slave to the Government, or do I wish to be free and stand on my own?  The answer will provide your path.