Paid over $4.00 a gallon this weekend. This high this early in the year brings the gas price back on the macro radar screen.
The EIA notes,
Gasoline expenditures in 2012 for the average U.S. household reached $2,912, or just under 4% of income before taxes, according to EIA estimates. This was the highest estimated percentage of household income spent on gasoline in nearly three decades, with the exception of 2008, when the average household spent a similar amount.
For as picked over and criticized as the Fiscal Cliff deal has been over the last few days, a tax break getting less attention than may have been expected is the one thing that impacts anyone taking home a paycheck. With the expiration of a temporary Social Security payroll tax everyone’s take home pay just fell 2%. The question is whether or not the reduction is going to be more of a problem than most investors think.
“This hurts seriously,” says Brian Sozzi, chief equities analyst NBG Productions, warning that next week Americans will feel “payroll shock.”
As countries try to weaken their currencies to boost exports, the risk of a currency war similar to events seen in the 1930s has heightened, and policymakers are making sure they are on the winning side, according to Morgan Stanley.
The balance of power now rests with Japan, according to the bank, as Japan’s policy-makers’ more dovish approach looks set to bring the world a step closer to a currency war.
A Currency War Has Broken Out And Is Intensifying: Japan Will Keep Printing Until Nikkei Hits 13,000, The Fed Is Buying $85 Billion A Month Until Unemployment Hits 6.5%, ECB Launched Unlimited Bond Buying To Cap Governments’ Borrowing Costs, Venezuela And Egypt To Devalue Their Currency…
Currency wars Are Starting To Look A Bit Much Like 1931
Gold faces a “supply crunch” that could help propel the price to $2,000
Currency war, also known as competitive devaluation, is a condition in international affairs where countries compete against each other to achieve a relatively low exchange rate for their own currency. As the price to buy a particular currency falls so too does the real price of exports from the country. Imports become more expensive. So domestic industry, and thus employment, receives a boost in demand from both domestic and foreign markets. However, the price increase for imports can harm citizens’ purchasing power. The policy can also trigger retaliatory action by other countries which in turn can lead to a general decline in international trade, harming all countries.
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Advisors say in the fear-greed battle, investors are finally dropping their fear and they are becoming more active in the stock market. Mutual fund companies are putting money into stocks and bonds.
How can anyone not see that the U.S. economy is collapsing all around us? It just astounds me when people try to tell me that “everything is just fine” and that “things are getting better” in America. Are there people out there that are really that blind? If you want to see the economic collapse, just open up your eyes and look around you. By almost every economic and financial measure, the U.S. economy has been steadily declining for many years. But most Americans are so tied into “the matrix” that they can only understand the cheerful propaganda that is endlessly being spoon-fed to them by the mainstream media. As I have said so many times, the economic collapse is not a single event. The economic collapse has been happening, it is is happening right now, and it will continue to happen. Yes, there will be times when our decline will be punctuated by moments of great crisis, but that will be the exception rather than the rule. A lot of people that write about “the economic collapse” hype it up as if it will be some huge “event” that will happen very rapidly and then once it is all over we will rebuild. Unfortunately, that is not how the real world works. We are living in the greatest debt bubble in the history of the world, and once it completely bursts there will be no going back to how things were before. Right now, we are living in a “credit card economy”. As long as we can keep borrowing more money, most people think that things are just fine. But anyone that has lived on credit cards knows that eventually there comes a point when the game is over, and we are rapidly approaching that point as a nation.