Oil prices surged more than 7.5% on Thursday on concern civil unrest
will choke crude supply in Libya, the world’s 12th biggest oil exporter.
Meanwhile, Brent crude futures hit $120 a barrel on concern the turmoil
will spread to other oil-rich countries in the region.

http://money.canoe.ca/money/business/canada/archives/2011/02/20110224-113243.html

Saudi Arabia Raises Oil Output By 8% To Over 9 Million Barrels Per Day

I guess I am not the only one predicting the demise of USD reserve status.

http://www.businessinsider.com/economic-warfare-risks-and-responses-2011-3

Roubini: $100 billion of municipal-bond defaults

Gold purchases in China, the world’s
largest producer, climbed to 200 metric tons in the first two
months of 2011 as faster inflation boosted consumer demand,
according to UBS AG, which said the price may gain to $1,500.

“China is the big buyer,” Peter Hickson, global
commodities strategist at Switzerland’s largest bank, said by
phone yesterday, without giving a comparable figure for 2010.
The estimate for the two-month period compares with full-year
consumer demand from China of 579.5 tons for last year,
according to the World Gold Council, a producer-funded group

http://www.bloomberg.com/news/2011-03-02/gold-buying-in-china-totals-200-tons-so-far-this-year-ubs-says.html

$35, New Record!

http://www.businessinsider.com/march-4-silver-2011-3

15 year gold price history in US Dollars per ounce.

http://www.goldprice.org/gold-price-history.html

http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html

I wonder if silk undies is going to be cheaper than cotton one ....

March 4 (Bloomberg) -- Alok Industries Ltd., an Indian
supplier of textiles to Wal-Mart Stores Inc. and Target Corp.,
cut the length of its sales contracts to about three months from
one year after volatility surged in the cotton market.

“Customers want to pay according to the prevailing cotton
prices,” Alok Agarwal, the chief executive officer of Alok’s
international unit, said in a telephone interview from New York.
“It is very difficult to evaluate the cost of cotton on a long-
term basis.” 

Cotton for May delivery gained 5.1 cents to $2.057 a pound
yesterday on ICE Futures U.S. The commodity touched a record
$2.0893 on Feb. 18.

Mumbai-based Alok is selling its textiles to clients with
contracts based on cotton prices in the range of $1.80 to $1.90,
Agarwal said. The retail price of a towel may rise by as much as
40 percent because of cotton jumping to above $2 from $1 in
September, he said.

http://noir.bloomberg.com/apps/news?pid=20601109&sid=ab_4nTxQO260

We often focus on housing as a reason the Fed
wants to boost growth, but we can also focus on
WalMart: in the 13 weeks that ended January 29,
WalMart's sales declined 1.2%. Keep in mind that
unlike government statistics, WalMart's sales are
not inflation adjusted. Also keep in mind that
WalMart has been expanding its produce section in
recent years - the section very much exposed to
food inflation. As a result, on a real basis,
sales have had rather substantial declines. Given
that WalMart's sales comprise more than 10% of
total US retail sales, we don't believe there is
such a thing as "company specific" problems;
WalMart's problems are those of the US economy.

http://www.atimes.com/atimes/Global_Economy/MC03Dj02.html

squashed said:

I wonder if silk undies is going to be cheaper than cotton one ....

March 4 (Bloomberg) -- Alok Industries Ltd., an Indian
supplier of textiles to Wal-Mart Stores Inc. and Target Corp.,
cut the length of its sales contracts to about three months from
one year after volatility surged in the cotton market.

“Customers want to pay according to the prevailing cotton
prices,” Alok Agarwal, the chief executive officer of Alok’s
international unit, said in a telephone interview from New York.
“It is very difficult to evaluate the cost of cotton on a long-
term basis.” 

Cotton for May delivery gained 5.1 cents to $2.057 a pound
yesterday on ICE Futures U.S. The commodity touched a record
$2.0893 on Feb. 18.

Mumbai-based Alok is selling its textiles to clients with
contracts based on cotton prices in the range of $1.80 to $1.90,
Agarwal said. The retail price of a towel may rise by as much as
40 percent because of cotton jumping to above $2 from $1 in
September, he said.

http://noir.bloomberg.com/apps/news?pid=20601109&sid=ab_4nTxQO260

No.. silk has shot up too.  As have all the raw materials as demand has gone up as more people like me look for cotton alternatives. Poly has taken the smallest hit in my world.  In the end, you'll be paying more money for your clothes. 

I am thinking of opening store selling guillotine. Or at least sharpening service.

A lot of heads are going to roll. The folks on the street are not going to like being bamboozled like that.

Days
Of (Inflationary) Rage Are Here: Man Goes On Shooting Rampage After
Learning Taco Bell Hikes Prices On Beefy Crunch Burrito By 50%

Days of inflatiory rage come to the US: "Police say a San Antonio Taco
Bell customer enraged that the seven burritos he ordered had gone up in
price fired an air gun at an employee and later fired an assault rifle
at officers before barricading himself into a hotel room. Brian
Tillerson, a manager at the Taco Bell/KFC restaurant, told the San
Antonio Express-News that the man was angry the Beefy Crunch Burrito had
gone from 99 cents to $1.49 each."

BANKER ON HOW TO SOLVE DEBT CRISIS: The Public Needs To Work Harder For Less Money And 50% Fewer Benefits

http://www.businessinsider.com/hans-jorg-rudloff-barcap-work-more-less-benefits-2011

double dipping hard. Can't sustain economic growth with 4$/gal gas.

http://www.businessinsider.com/february-factory-orders-2011-3

Factory orders in February missed expectations big time. Estimates were for growth 3%.

Instead: -0.1%.

From the Census Department;

New orders for manufactured goods in
February, down following three consecutive monthly increases, decreased
$0.4 billion or 0.1 percent to $446.0 billion, the U.S. Census Bureau
reported today. This followed a 3.3 percent January increase. Excluding
transportation, new orders increased 0.1 percent.

Shipments, up
six consecutive months, increased $1.4 billion or 0.3 percent to $448.3
billion. This followed a 1.7 percent January increase.

US/UK: Separated by a Common Financial Crisis

Want to understand how utterly corrupted the US has become by its own banks?

Consider the regulatory difference between the United States and Britain — whom Jesse Eisinger describes as “two countries separated by a common financial crisis.”

“[In the UK], major government figures speak openly about
requiring substantially higher bank capital. The governor of the Bank
of England, the head of the Financial Services Authority (the equivalent
of the Securities and Exchange Commission) and even the conservative
chancellor of the Exchequer have backed a bigger crackdown on the
banking sector. While the international banking rules, called Basel III,
settled on 7 percent as the minimum standard for a certain kind of
capital, it’s acceptable in Britain to talk about having significantly
higher standards. A recent Bank of England paper contemplated capital on
the order of 15 to 20 percent.

Here, that thought is restricted to cranks and university professors . . .”

My shorter version of what Jesse is saying:

-The banks own Congress

-Regulators have long been captured

-7% capital reserves = 14 to 1 leverage is unacceptable to banks
(pre-crisis levels used to be 12 to 1 before waivers were granted)

-The Obama White House, tainted by Robert Rubin pro-bank staffing
recommendations, missed their window to really fix what is broken on
Wall Street.

-Another major financial crisis is inevitable

http://www.ritholtz.com/blog/2011/03/usuk-separated-by-a-common-financial-crisis/

By early next year, spring, people are going to protest on the street. Think WATTS riot. Living cost will easily go double while economy is double dipping. unemployment is going to spike hard too.  California best hope probably will be a big earthquake/tsunami to kill all those rioting peasants and start new.

http://www.zerohedge.com/article/wal-mart-ceo-america-prepare-serious-inflation

The
world's largest retailer is working with suppliers to minimize the
effect of cost increases and believes its low-cost business model will
position it better than its competitors.

Still, inflation is "going to be serious," Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY's editorial board. "We're seeing cost increases starting to come through at a pretty rapid rate."

http://seekingalpha.com/article/262640-treasury-purchases-a-strong-correlation-to-commodity-and-consumer-inflation

The result of QE2 has not lived up to administration, or Krugman's
expectations, according to Koo. Instead, we're left with only two policy
choices: protectionism and dollar devaluation, or more fiscal stimulus.

It's important here, to note, WHY QE2 doesn't work, according to Koo...
essentially all that happened is that by buying up Treasuries,
investors were forced to look for returns elsewhere, in places like
stocks and commodities. The latter, the commodity gains, ended up
slowing down the economy. What's more, QE2 has had no positive impact on
bank lending whatsoever.

Koo notes that, because of the current political situation, fiscal
stimulus now seems unlikely. Consensus has formed around austerity, and
that would need to change for more government spending to be put in
place. Standing in the way is Republican opinion, Democrat acquiescence,
and ratings agencies who seem prepared to downgrade the U.S.

The alternative, protectionism and dollar devaluation, could be disastrous if history is any example, according to Koo.

http://www.businessinsider.com/richard-koo-paul-krugman-qe2-2011-6

And then DeLong adds this:

Two
and a half years ago I remember asking a couple of newly-chosen Obama
appointees: That's fine, but what if it isn't enough and we don't get a
strong recovery. What is Plan B? You have to be thinking about Plan B.



Now it is clear: there is no Plan B. There never was a Plan B.

This isn't hyperbole. He's joined the list of those who sound really frightened.

http://www.americablog.com/2011/06/delong-obama-administration-didnt-have.html

OPEC-member Angola is comfortable
with current prices for Brent crude of $114 to $115 a barrel,
the country’s oil minister said before flying to Vienna for the
group’s meeting to review its target for oil production.

“At that level it can be considered acceptable,” Jose Maria Botelho de Vasconcelos said today in the country’s capital
city, Luanda. “For us, the price is reasonable, is good.”

http://www.bloomberg.com/news/2011-06-07/angola-sees-current-114-brent-crude-price-as-reasonable-1-.html

Amazingly this administration is picking a fight with everybody who supply US with oil.

Saudi (bahrain, Palestinian independence) Second biggest oil supplier except can/mex.

Invading Libya

Fighting with Venezuela (biggest US oil supplier!!!! except can/mex )

More fighting with Iran

Not too hot with Russia (third biggest outside can/mex) ... etc.

http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm

Krugman is a confidence artist. He doesn't know jack about how world money flow in real term, despite having his nobel on the subject. It's like the difference between a smart talking statistician and a real card shark playing poker. Both knows the rules and all the bullshit theory, but only one knows how the human game will unfold on table.

so, everybody else in the planet who actually have money and make real trade decision simply bet against his ass. $1.4T? big friggin' deal. The entire asia absorb that much in 2-3 years via inflation and trade surplus. Krugman co. now is in $10T hole deeper than when it all begun.

And this is before Asia adjust and taming inflation via production adjustment and various monetary policy, 3-4 years from now when that is done, when asia is in easing cycle, US will be swamped with the effect of cheap money, it will make 2006 bubble looks like walk in the park. Huge swatch of remaining US industrial base will die then.

The domestic option isn't gonna be much. devaluation, protectionism, and forever shut up about "defender of capitalism and free trade". The size isn't there anymore to dictate like it's the 80's. Moment of truth will come soon after second crash or another medium size arm conflict. That's when oil seller suddenly says "pay us with real money, your paper is no good here". Then things will get funky.

David Rosenberg provides the key bulletized market observations that
have marked the broad capital markets over the past few months.

• $950 billion of paper equity wealth has been wiped off the map in the past six weeks.
• The Dow is below 12,000 for the first time since March 18th.
• The Transports are down more than 8% from the nearby highs and are down for the year as well
• The Transports/Utilities ratio has broken down to its lowest level since November 9th of last year.
• The Nasdaq is now down for the year (-0.3%)
• The Russell 2000 index is also down for the year (-0.5%).
• The S&P 500 is just 1.1% away from seeing the same fate.
• The S&P 500 has declined in each of the past six weeks, the longest losing streak since June-July 2008.
• The
  S&P 500 has fallen below its 150-day moving average after breaking
  below the 50-day and 100-day trendlines earlier in this corrective
  phase; the 200-day is the next level of support.
• For the Dow, this is the longest string of weekly declines since the Fall of 2002.
• The total six-week decline in the broad market is nearly 7% ... a slow bleed.
• Junk bond spreads widened 25 basis points last week, more evidence of risk re-rating.
• Investment-grade bond spreads widened out 14bps and new issue activity ($0.63 billion) was the lowest of the year.
• Bank
  of America is back to being a $10 stock after a two week 8% slide — how
  do the bulls dismiss this out of hand? It's the biggest consumer bank
  in the country.
• In the past six weeks, Energy, Industrials,
  Materials, Financials and Consumer Discretionary have all rolled over
  significantly. The defensives have outperformed dramatically — Healthcare, Utilities, Telecom, and Consumer Staples.

http://www.zerohedge.com/article/rosenberg-why-things-are-getting-interesting-and-what-ailing-market

 second phase of the crisis is coming. (the one after "bail out" is exhausted, while the original structural problem and crimes are still largely intake and destroying everything.)

btw, if I have to make cynical guess. The above are just show biz. 3-4 months from now when nobody remember. It'll end as some lame settlement, slap on the wrist fine. few hundred millions. Then it's election circus.

But rest assure, the fraud and shadow banking still destroying global economy. Nothing fundamentally change. Plus, by then maybe QE3 is in play. More free money for bankster.

China and Germany have
signed trade deals worth $15bn (£9bn) following meetings between the two
country's leaders in the German capital Berlin.

Chinese Premier Wen Jiabao and German Chancellor Angela
Merkel also targeted an increase of bilateral trade to 200bn euros
($284bn; £178bn) over the next five years.

Germany is by far China's biggest trading partner in the European Union.

http://www.bbc.co.uk/news/business-13954148