Not a peep from Bill today...apparently his family hasn't rebelled against him and dragged him somewhere with Internet access and hot water yet.
No matter, there is plenty to talk about.
We heard on NPR this morning that Americans are fleeing big cities in droves in search of cheaper homes. A report released by the Census Bureau today showed that almost every large metropolitan area has more people move out than move in from 2000 to 2004.
"Among the 25 largest metropolitan areas," continues the report, "18 had more people move out than move in from 2000 to 2004. New York, Los Angeles and Chicago - the three biggest metropolitan areas - lost the most residents to domestic moves. The New York metropolitan area had a net loss of more than 210,000 residents a year from 2000 to 2004."
We can understand why this happens - it gets too expensive to live in the city, especially on the coasts, so people migrate to the outer suburbs, or "exurbs." But then you're posed with another problem: what do you do when it costs you $50.00 to fill up your Suburban and you have to commute a total of three hours everyday?
That's not as farfetched as it sounds. At a Brooklyn, New York, gas station yesterday, a gallon of premium gasoline cost $4.50 a gallon. Regular gas wasn't cheap either - if you paid with cash, it would have cost you $4.14 and $4.26 if you paid with credit.
Of course, people were more than a little perturbed by these prices and enlisted Senator Chuck Schumer to call for an investigation by the Federal Trade Commission to be sure that the rising gas price was not due to gas companies trying to make a quick buck.
"It's not hurricane season, but the oil companies are just raising the price up and up and up," Schumer said. "And the question is are they doing this dictated on the laws of supply and demand, or is something else at work?"
Apparently (and not surprisingly) Sen. Schumer hasn't been paying attention to the news. Yes, "something else" is at work. Continued fears that Iran will cut off its exports of crude if the U.N. Security Council imposes sanctions, not to mention consistent attacks on Nigerian pipelines, and Venezuela's Victor Chavez threatening to blow up its own oilfields if the United States were to attack Venezuela.
All of this happening, and Schumer is right - it's not even hurricane season yet, or peak driving season. Just wait until the end of the summer.
"If things keep up the way they are, I fully expect to see a sustained $4.50 or even $5 price this summer - if we have significant disruption and get hit with one or two major hurricanes," says Resource Trader Alert's Kevin Kerr.
"Now Nigeria is on the brink again, on top of everything else. What else can possibly happen?"
[Ed. Note: We're not sure what will happen, but our guess is that this boom in natural resources and commodities is nowhere near over. In fact, we believe it has just begun. Find out the whole story here:
8 Times Better Than Stocks!
Now, for the news from our team at The Rude Awakening...
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Eric Fry, reporting from Manhattan:
"This delicious combination of emotions may be appropriate in a roller-coaster car...or maybe even in a bedroom, but not while sitting in front of a quote screen."
For the rest of this story, and for more market insights, see today's issue of The Rude Awakening:
Blowoff!
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Short Fuse, back in Baltimore:
*** Oil is heading up, up, up...and taking the price of our favorite yellow metal with it.
Investors tend to flock to gold during tense times, and now is no exception. Gold reached a 25-year high this week, with the Iranians themselves buying the precious metal in large quantities.
According to Gareth Smyth, a Financial Times correspondent in Tehran, "The rush to gold reflects both growing tension over Iran's atomic activities and the destabilizing economic policies of fundamentalist President Mahmood Ahmadi-Nejad," whose government took office last August.
All we can say is - we don't see the price dropping anytime soon. We'll keep you updated.
[Ed. Note: Justice Litle has found a way for you to buy gold for as little as one-tenth what other bullion investors will pay... while making as much as 12 times what they'll make on every move upward in the gold price. Sound too good to be true? Find out for yourself:
Zero-Downside Gold
*** From Finster, a regular contributor to the Daily Reckoning Discussion Board:
"A log chart of the foreign direct investment (FDI) over the past seven years, shows in grisly detail the decline and fall of the U.S. dollar. By this measure, the U.S. dollar has lost 13.8% of its value over the past two years, with prices increasing an overall 16.0% over that time frame. That works out to an annualized rate of inflation of 7.7%. No wonder gold, silver, platinum, copper, oil, gas, etceteras have been going crazy. When inflation roars, they usually do.
"Folks, this means that you had to have an after-tax nominal gain on your investments of 7.7% just to break even. If your pay has gone up by the average amount of 3%-4%, you have been taking a cut in pay, not getting an increase. Real wages in the U.S. have been falling. Nominal GDP has grown by 6.7% on average over the period, so in fact real GDP has been in contraction by some 1% per annum."
To view the chart and comment, go to the DR Discussion Board and click on:
The Crashing Dollar
*** We received so many messages on what the Great Depression, Part Deux would entail, there is no way we could have gotten through each message today. So for this issue, we will only publish one reader comment, but we promise to print more tomorrow - and keep them coming! Write Short Fuse at kincontrera@dailyreckoning.com
"The dollar of my childhood is worth about 7¢ today and I expect to see it plunge to 2¢ or less before I die," writes John Wrisley, of Columbia, SC. "It's a shame inflation can't be suspended and attempts made to restore the dollar to a little of its former glory, but that's not the way long episodes of monetary inflation end. Unfortunately, the chips must fall where they will, the chickens must return to the roost, and people will notice the punch bowl is empty and the party will be over.
"As a child of Great Depression 1, I grew up believing 'they' would never let anything like that happen again. Not that being raised by grandparents in a small rented house was an unhappy experience. They couldn't afford luxuries like an automobile or vacation trips, but life was not unbearable. Besides, radio entertainment was free! Not until I became an adult did I realize how Spartan my childhood was.
"I don't look forward to enduring Great Depression 2 because I think it will be far more unpleasant than the episode of the 1930s. I fear the level of violence most of all, as young people trained by movies, videos, and vicious 'music' notice the raunchy party is winding down and they must go out and take what they want to sustain themselves.
"I remember the adults of the 1930s being very adept at growing food in the backyard and raising a few chickens to augment the vegetables. Clothes were repaired when necessary, and no one worried particularly about drifters coming through town looking for handouts. You either helped them if you could, or shrugged in sympathy if you couldn't. They usually understood and roamed on.
"Not only will average people be less self-sufficient in Great Depression 2, but the new social phenomenon of huge numbers of old people must be faced. In the '30s, the over-65 crowd usually lived with family when they couldn't work any more. Now, they live apart from their families and science is keeping them alive longer. A preview of things to come can be found in the mailing piece of an upscale retirement center in our town, which asks for contributions to help certain residents who have 'outlived their reserve.' Imagine! These are people who thought they had provided for their future and plunked their money down to be taken care of until the Grim Reaper came to fetch them. And now, they have 'outlived their reserves!' (There's a book title there.)
"There is no way to avoid this difficult economic setback, unless the laws of nature have been rescinded. No inflation has ever not ended amid pain and confusion. And no economic boom, funded mainly be debt, ever led to anything but a depression. We've been very clever devising ways to postpone the grim payoff, but an awareness of the fictions is creeping across the land, and here and there people are saying, 'Wait a minute! Maybe all this debt is not such a good thing! Let's find the guy who told us we could borrow ourselves rich and hang him!'
"Arnold Toynbee remarked, 'The fall of a great nation is always a suicide.' I have a vague understanding of why all the great empires of the past did themselves in, but I never expected to live long enough to witness this strand of history repeat itself in the United States.
"However, it will only be another transition. It will be grossly painful for some, and a minor inconvenience for others. Life will continue. When the going gets tough I shall walk the streets with a sign that quotes Thomas Paine; 'We have it in our power to begin the world over again!'"
