UK will 'utterly destroy' North Sea industry

Oil and gas leaders will on Wednesday make a last-ditch effort to persuade the Government to abandon a £10bn tax grab on North Sea energy companies, amid warnings the levy will "utterly destroy" the industry.

Chief executives are expected to tell the energy select committee that the tax will close down fields early and mean the majors find it difficult to sell older fields to new owners.

Meanwhile, Chris Huhne, the Energy Secretary, will have to defend the impact the tax is likely to have on oil and gas production at a time when Britain needs to bolster its energy security.

The hearing comes three days after Centrica warned it may partially shut the UK's biggest gas field as a result of the tax. The move has recently been criticised by John Whiting, head of the Office for Tax Simplification, Ed Balls, the Shadow Chancellor, and numerous industry figures.

On Tuesday, Bill Transier, chief executive of Endeavour International, a major investor in the North Sea, said British governments had made doing business in the UK "more of a political risk than West Africa or the Middle East", after making four major tax changes within seven years.

"The North Sea is the second-largest oil-producing region in the world after Saudi Arabia. It's a national treasure for the UK. The government is utterly destroying that," he told The Daily Telegraph. "I wish people would step up and say you just can't do this. You're killing the industry. Capital is leaving the country and going elsewhere. The politicians seem to be ignorant of the facts and then they do something stupid as a political mechanism to offset a fuel tax. It's a critical time in the future of the North Sea and some of these reserves are going to be lost forever. They need to eat some humble pie and say they made a mistake." (read more)

Silver Forming Another Bullish Flag Formation as US dollar continues stumbling

With silver down just over 4%, the dollar continuing to grind lower and gold consolidating, today King World News interviewed James Turk out of Spain. When asked about gold and silver Turk responded, “Nearly all of Europe is closed today to celebrate May Day, and Asian markets are notoriously thin even in the best of circumstances. So when the news of Bin Laden's death hit the tape, the dollar bounced in an emotional knee-jerk reaction. Silver was pummeled, and gold ended slightly lower. The important point Eric, is that both metals are bouncing back.”

When asked about the violent action in the metals Turk replied, “The volatility scares a lot of people, which is understandable. It can be heart-stopping to see silver drop 10% like it did, but silver is not unique in this regard. Even blue-chip stocks or other high-quality assets drop in price during certain periods. Unfortunately, those big price drops can easily cause you to take your eye-off-the-ball or shake you out of a position. Don't let that happen to you in a bull market such as we are seeing in gold and silver.

What's worse is that these occasional price gyrations play into the hands of the anti-gold crowd, who claim that gold is a volatile commodity. Of course, the real volatility comes from central bank interventions that distort the market process as well as the huge amount of leverage used in the paper-gold market. The point is, Eric, long-term price trends are caused by underlying fundamental factors that determine the true value of an asset, not news items. And the underlying fundamentals for both gold and silver remain very bullish.

Look for example, at the US Dollar Index, which is trading at a new low as we speak. The trading day just ended, and the "Bin Laden bounce" is already history. (read more)

Corporate Kingpins vaccuum up $26,000,000 worth of silver shorts in bizarre commodity rush

I hope precious metals newbies have not been emotionally derailed by last night's obvious ambush of silver by the corrupt Wall Street bullion bank cartel. It's funny because just yesterday I was chatting with my significant other, who happens to be from Las Vegas, about organized crime. She mentioned that Vegas is full of organized crime gangs, not just the casino mafia. I replied that any area that generates tons of cash flow is mired with organized crime and extreme corruption: Vegas, DC and Wall Street most prominently (obviously there are others but those are the biggest). Little did I know that several hours later the action in electronic silver trading would ironically highlight my point about Wall Street!

Make no mistake about it, what occurred last night right at the open of electronic futures trading in gold and silver was nothing more than a very aggressive attempt by the big Wall Street banks who are irrationally short paper silver to shake out weak hands in order to reduce the fraudulent short positions in paper silver. Anyone who thinks last night's action - as reported in the mainstream media - was connected to a feared slowdown in China or the Bin Laden thing or the Bolivian mining news is either hopelessly naive or pathetically ignorant of the facts.

So let's look at some facts. First, no other commodities were hammered. If China slowdown fears were the culprit, shouldn't all of the base metals used in industrial production have been hit hard along with silver? Seriously. Even more telling was the fact that the dollar barely moved in either direction last night - and it's below 73 right now. The media loves to explain movements in gold/silver with inverse movements in the dollar. How come the dollar was not doing a moonshot in response to the gold/silver cliff-dive? (read more)

US Debt Rating Should Be 'C': Independent Agency

There have been increasing concerns about the fate of United States' prized triple-A sovereign debt rating. While Standard and Poor's recently downgraded its U.S. debt outlook to negative from stable, implying that a ratings cut could happen in two years, one independent ratings agency has given the U.S. sovereign rating a "C".

"A 'C' is equivalent to approximately a triple-B on the S&P, Moody's and Fitch scales. It's two notches above junk and one notch above the equivalent of a single A," Martin Weiss, President of Weiss Ratings, told CNBC Tuesday.

Weiss was quick to add that while the rating seems weak, the debt situation is not in a danger zone that would trigger panic, noting that there was still broad market acceptance for Treasurys.

The grade reflects the U.S. massive debt burden, low international reserves and the volatility in the American economy, he said.

The U.S. government debt is fast approaching the $14.3 trillion ceiling, with the debt-to-GDP ratio close to 100 percent. And a downgrade of U.S. Treasurys - one of the most widely held assets - could theoretically raise borrowing costs and in a worst case scenario, trigger a default on the government's debt obligations. (read more)

Sociapitalism: How the Government Became the Next Bubble

In the last thirteen years, a new financial order replaced capitalism in America. With cat-like tread, this transformation has caught most Americans unaware, let alone some of country’s best financial minds (many of them fascist anyway).

This new order constitutes the socializing of risk, a concept I have termed: Sociapitalism. Sociapitalism is different than Social Capitalism – a European concept. Social capitalism is the redistribution of wealth through social programs, such as unemployment benefits, food stamps, and government housing. Sociapitalism is not a redistribution of wealth, but a redistribution of risk. The government transfers risk from one entity to the system, securing the safety of the entity.

Social capitalism allows corporate failure. Sociapitalism does not, reducing the only possibility of failure to the sovereign state.

For the most part, our country was founded on the principle that success or failure should be predicated on one’s own merits. The weak died, the strong survived. Depressions and recessions cleansed the system, firming up the foundation for the next economic advancement. Capitalism brought corruption – true - but that corruption was eventually punished with failure. Failure distinguishes capitalism from all other economic systems.

That model has changed, and it became visibly apparent in 1998 when the government orchestrated the bailout of Long Term Capital Management. In hindsight, this intervention may have been the biggest mistake in American financial history. If Long Term Capital Management would have failed, Lehman Brothers would have likely failed at that time, and the United States would have fallen into a recession. Positively, the United States would have averted an equity bubble, Glass Steagall would have never been repealed, and the system would have been cleansed from the froth of the late nineties. (read more)

"Deflation or Hyperinflation?" -- an either-or scenario is rapidly approaching

Chapter 84 – Bond salesmen's propaganda that "a dollar is a dollar" should be rewritten to say "a dollar is 3¢"

Since most ordinary people, bankers, and company presidents have never studied currency theory, they swallow it hook, line, and sinker when the bond salesmen tell them, "a dollar is a dollar." That piece of propaganda should be rewritten to say "a dollar is 3¢." The nominal dollar is officially worth no more than 14¢ of its 1940 value, unofficially only 3¢.

If computed in 1940 constant dollars, not more than $1,380 exists of the US $46,000 per capita gross public and private debt. More than $44,628 has been destroyed by inflation. But sadly, the owners of this debt do not want to hear about it. They do not wish to know that bonds are issued by governments with the sole purpose of debasement.

To my knowledge, no government in history has paid its debts in currency equal to the purchasing power of the currency lent to them. The people always lose their money on bonds.

It angers me. Bond salesmen should be thrown into the East River.

-The above was written in 1985 by Dr. Franz Pick, in the book "The Triumph of Gold" sent to me by one of my readers. The photos are from Time Magazine. (read more)

Africans are asking whether China is making their lunch or eating it

ZHU LIANGXIU gulps down Kenyan lager in a bar in Nairobi and recites a Chinese aphorism: “One cannot step into the same river twice.” Mr Zhu, a shoemaker from Foshan, near Hong Kong, is on his second trip to Africa. Though he says he has come to love the place, you can hear disappointment in his voice.

On his first trip three years ago Mr Zhu filled a whole notebook with orders and was surprised that Africans not only wanted to trade with him but also enjoyed his company. “I have been to many continents and nowhere was the welcome as warm,” he says. Strangers congratulated him on his homeland’s high-octane engagement with developing countries. China is Africa’s biggest trading partner and buys more than one-third of its oil from the continent. Its money has paid for countless new schools and hospitals. Locals proudly told Mr Zhu that China had done more to end poverty than any other country.

He still finds business is good, perhaps even better than last time. But African attitudes have changed. His partners say he is ripping them off. Chinese goods are held up as examples of shoddy work. Politics has crept into encounters. The word “colonial” is bandied about. Children jeer and their parents whisper about street dogs disappearing into cooking pots.

Once feted as saviours in much of Africa, Chinese have come to be viewed with mixed feelings—especially in smaller countries where China’s weight is felt all the more. To blame, in part, are poor business practices imported alongside goods and services. Chinese construction work can be slapdash and buildings erected by mainland firms have on occasion fallen apart. A hospital in Luanda, the capital of Angola, was opened with great fanfare but cracks appeared in the walls within a few months and it soon closed. The Chinese-built road from Lusaka, Zambia’s capital, to Chirundu, 130km (81 miles) to the south-east, was quickly swept away by rains. (read more)

The United States faces a crisis not seen since the Depression

Maybe it's because Boston is different, a semi-detached city in one of the US's most liberal states. But the news that the world's biggest economy had had its creditworthiness challenged for the first time by the upstart rating agency Standard & Poor's (S&P) hardly seemed to register with the locals.

No one I met fulminated about loss of economic sovereignty or that S&P, whose purblind approval of junk mortgage debt as triple A was one of the causes of the financial crisis, had finally over-reached itself. Bostonians seemed unconcerned. Perhaps this was because it was just one more surreal moment in the pantomime that is American economic and political life.

That was how the markets judged the news. There was a momentary tremor in the Dow Jones. Some analysts shrugged it off; others thought it profoundly serious. But soon the markets were on the rise again as if nothing had happened.

The Obama administration played it down. Tim Geithner, the secretary of state for the Treasury, said that S&P was behind the political curve; the prospects for a bipartisan deal were now better than they had been for months. If the hope was to provoke a change in the debate about the US's record budget deficit, S&P must have been disappointed.

The Republicans rehearsed their battle cry that Obama was mortgaging the future and that the only plan in town to respond to the agency's "wake-up call" was their own – to take federal spending back to pre-modern levels, while offering further tax relief to the rich. To all this Democrats are ferociously opposed. (read more)

Silver demand in China and India is set to rise 30 percent in 2011

Silver prices for July delivery surged $1.058, or 2.2 percent, to $48.599 an ounce.

Silver prices have risen 5.5 percent this week and 57.1 percent in 2011.

China said its net imports of silver nearly quadrupled to more than 3,500 metric tons in 2010, boosted by sharp increases in demand by the industrial sector and the jewelry industry.
Silver demand in China and India has increased sharply in recent months as more investors use silver as a store of value.

About 70% of China’s silver demand comes from the industrial sectors. Silver is widely used in the production of electronic products, jewelry, industrial production, such as medical, solar power and water purification industries.

China is the world’s largest producer of solar power and electronics.

Silver price increased more than 80% in 2010.

Demand for silver in China and India is up 30 per cent in 2011.

In 2010 India consumed about 2,800 tonnes of silver, this year’s consumption is expected to rise to 5,000 tonnes, according to Albanian_Minerals President Sahit Muja and trading experts. (read more)

Costly gasoline clouds Obama re-election prospects

With gas prices climbing and little relief in sight, President Barack Obama is scrambling to get ahead of the latest potential obstacle to his re-election bid, even as Republicans are making plans to exploit the issue.

No one seems more aware of the electoral peril than Obama himself.

"My poll numbers go up and down depending on the latest crisis, and right now gas prices are weighing heavily on people," he told Democratic donors in Los Angeles this past week.

In fact, Obama raised the issue unsolicited in a series of town meetings in Virginia, California and Nevada that were ostensibly about his deficit-reduction plan. And he made the gas spike the subject of his weekly radio and Internet address Saturday.

"It's just another burden when things were already pretty tough," he said.

As Obama well knows, Americans love their cars and remain heavily dependent on them, and they don't hesitate to punish politicians when the cost of filling their tanks goes through the roof. Indeed, for presidents, responding to sudden surges is a recurring frustration.

"These gas prices are killing you right now," Obama said at Facebook headquarters in Palo Alto, acknowledging that many Americans can't afford new fuel-efficient cars and must drive older models.. For some, he said, the cost of a fill-up has all but erased the benefit of the payroll tax holiday that he and congressional Republicans agreed on last December. (read more)

Stansberry's Investment Advisory Video on the coming collapse of US Dollar -- A must watch (with caveats)

Three important things you need to know before watching this video:

Thing #1: It is, in the end, nothing more than a giant infomercial.

Thing #2: It's being posted because the first two thirds (the last third is where the selling is done) contains superbly researched financial information regarding the possible coming collapse of the US dollar, including historical tidbits.

Thing #3: Stansberry has nothing on the Sham-Wow guy. This poster makes nothing off of mentioning this video, and he recommends you watch the first hour or so until you reach the overly obvious sales part and then turn it off.

Hedge funds increase bets dollar will decline: US Dollar crisis gains momentum

Hedge funds increased their bets against the dollar to a massive $28.6bn (£17.1bn) in advance of Ben Bernanke's historic first press conference as chairman of the Federal Reserve last week.

The sum held in short positions against the world's reserve currency on April 26 is the highest in more than month and $3bn more than the previous week.

The figures, released over the weekend by the Commodity Futures Trading Company (CFTC), indicate that hedge funds have made hundreds of millions of dollars from the recent collapse in the value of the greenback.

The dollar hit a three-year low against a basket of currencies on Friday, and has fallen for the last five months straight. It fell 3.8pc against the basket in April, and is down 7.5pc down so far this year.

The data shows that investors are pulling out of the dollar in favour of almost every other currency except the Japanese yen.

Camilla Sutton, chief currency strategist at Scotia Capital, said: "It's an ongoing build of short-dollar positions overall. Generally, sentiment remains very negative against the dollar." (read more)

What happened to America? -- A superb collection of quotations to explain the current situation in a dying republic

Hi folks and especially you newbies,

I posted this list of quotes several months ago, but a lot of the new people haven't seen this yet, so I'll do it again. Just by reading through these quotes, you will have a very clear picture of what happened to America and how we got in this fix in the first place.

It took me a while to compile this list, but it really belongs to each of you. Feel free to copy it to your hard drive and post quotes from this list on other forums so that others can understand what happened to America.

1. "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." - Thomas Jefferson

2. "History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance." - James Madison

3. "If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations." - Andrew Jackson

4. "The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity. " - Abraham Lincoln

5. "I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the Nation and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the world - no longer a Government of free opinion no longer a Government by conviction and vote of the majority, but a Government by the opinion and duress of small groups of dominant men.... Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the U.S., in the field of commerce and manufacturing, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.” – President Woodrow Wilson, In The New Freedom (1913) after signing into passage the Glass Owen Act of 1913 that established the Federal Reserve System. (read more)

Silver Rally No Bubble as Price Will Top Record, Coeur d’Alene Chief Says

The rally in silver to a 31-year high in New York shows no sign of ending because tight supply and robust demand will send the metal to a record, according to Coeur d’Alene Mines Corp. (CDE), the largest U.S. producer.

“We’re in a legitimate market driven by financial interest in silver and strong industrial demand,” Chief Executive Officer Dennis Wheeler said today at the Bloomberg Link Precious Metals Conference in New York. “Supplies are relatively inelastic.”

Silver has surged 162 percent in the past year, outpacing the 31 percent gain in gold. Investment demand for silver jumped 40 percent in 2010 as inflation rose, currencies lost value and Europe’s debt crisis escalated, said researcher GFMS Ltd. Industrial use gained 21 percent last year and may climb to a record this year, London-based GFMS said.

The rally is “very different” from the surge in the late 1970s, when the Hunt brothers tried to corner the market, and in 1980, when prices touched a record $50.35 an ounce, Frank McGhee, the head dealer at Integrated Brokerage Services, said at the conference.

“There is no manipulation going on in this market,” McGhee said. “It does not take a lot to stop the market until this market decides to go. I’d like to categorize silver as a freight train.”

Silver futures for July delivery rose $1.554, or 3.4 percent, to close at $47.541 on the Comex in New York. Silver reached $49.845 on April 25.

Discovering new deposits has become more difficult, while “older mines cease production at a time when demand continues to grow,” said Wheeler, whose company is based in Coeur d’Alene, Idaho. High prices are not “a short-term phenomenon,” and the metal may jump to $55 by the end of 2011, he said. Integrated Brokerage’s McGhee predicted $62. (read more)

Precious Metals vs. the USD: Signs of Economic Collapse

One sure upshot of the quantitative easing money flooding the stock market will be further distortions, chaos and unpredictability that make the value-investing proposition difficult, if not impossible, according to Casey Research Chairman Doug Casey. On the eve of a sold-out Casey Research Summit in Boca Raton, Florida, Doug returns to The Gold Report. In this exclusive interview, he warns, "Like it or not, you're going to be forced to be a speculator."

The Gold Report: When the average investor turns on the news, even on financial channels, they hear that the U.S. economy is in the best shape it's been in for three or four years. While the experts say the recovery is slower than anticipated, they expect its slow recovery will equate to a long, slow growth cycle similar to that after World War II. You have a contrary view.

Doug Casey: The only things that are doing well are the stock and bond markets. But the markets and the economy are totally different things—except, over a very long period of time, there's no necessary correlation between the economy doing well and the market doing well. My view is that the market is as high as it is right now—with the Dow over 12,000—solely and entirely because the Federal Reserve has created trillions of dollars, as other central banks around the world have created trillions of their currency units. Those currency units have to go somewhere, and a lot of them have gone into the stock market.

As a general rule, I don't believe in conspiracy theories and I don't believe anything's big enough to manipulate the market successfully over a long period. At the same time, the government recognizes that most people conflate the Dow with the economy, so it is directing money toward the market to keep it up. Of course, the government wants to keep it up for other reasons—not just because it thinks the economy rests on the psychology of the people, which is complete nonsense. Psychology is just about the most ephemeral thing on which you could possibly base an economy. It can blow away like a pile of feathers in a hurricane.

TGR: So, you're saying we're confusing the market's performance with the economy's performance?

DC: Yes. The fact is that the economy, itself, is doing very badly. The numbers are phonied up. I spend a lot of time in Argentina. Anybody with any sense knows you can't believe the numbers coming out of the Argentinean Government Statistical Bureau, nor can you (any longer) believe the numbers that come out of Washington D.C. The inflation numbers consider only the things the government wants to look at and are artificially low. It's the same with the unemployment numbers. None of these things is believable. (read more)

Asia taking a pass on next round of Quantitative Easing, the threat of debt, prices, inflation, and slowdown, big names dumping US dollars

We believe there will be something similar to a QE3 by another name and the Fed will probably have to create some $2.5 trillion to buy Treasuries, Agencies, and toxic waste and perhaps inject funds into the economy. Japan certainly won’t be a buyer and probably will be a seller. China has indicated that they won’t be purchasers in the future either. The question also arises concerning the continued purchase of these securities by countries in the oil producing Gulf States, which are in turmoil. The three countries make up 45% of Treasury purchases. As we pointed out in previous issues the second half of 2011 should be monstrous. Even if the fed buys all the Treasury and Agency bonds they’ll still have to deal with a lower dollar and high inflation. Then there is high unemployment and raging gold and silver prices. There is also the question of US debt, federal, state and municipal debt, along with wars in the Middle East and North Africa. How many US Treasuries will Japan have to sell and how deeply will its slowdown effect American industry? As you can see America has much to contemplate.

The creation of monetary inflation will last at least two more years. Its end will only come when the Fed takes its foot off of the pedal. Like almost zero interest rates this policy cannot be allowed to stop. The system cannot function without it. The whole concept of throwing money at a problem simply doesn’t work and the elitists know this only too well.

Monetary and fiscal creations are not the only mistakes being made by the Fed and our Congress. US and world markets are being subjected to non-stop manipulation. This corruption has destroyed all free markets. Stock and bond markets are supported and gold, silver and commodities attacked. Fortunately markets now recognize what the elitists are up too and each time they interfere they lose a little more power. It points up that a criminal syndicate is running our country. These tactics are used to extend the looting period allowing further harvesting of elicit profits. The US and many other nations have been allowed to live beyond their means for many years and that condition is being brought to a conclusion. This, of course, is very true of the US due to the dollar being the world’s reserve currency. That is changing, as nations want this unfair advantage ended, especially in view of the fact that the American government and financial community have so abused their privilege.

The profits of the military industrial complex continue to flourish as we have war after war. We notice that both parties are willing to cut spending on Social Security and Medicare, but they refuse to cut military spending, the most expensive item on the budget at 26%. Our government has billions for Fannie Mae, Freddie Mac, Ginnie Mae, the FHA, the FICA and the worthless SEC and CFTC, but no cuts for the average American. (read more)

China May Buy $1 TRILLION of Gold: Bloomberg

In an otherwise quiet article on central banks today, Bloomberg quoted an analyst who says China may use a third of their $3 trillion in foreign reserves to purchase gold.

China has been moving away from the dollar, and into alternative stores of wealth for years now.

But $1 trillion in gold? If it happens, such a large move would be a sharp rebuke to the dollar's status as reserve currency, to say the least.

Bloomberg:

China’s Gold Reserves

China, which has just 1.6 percent of its reserves in gold, may invest more than $1 trillion in bullion, [Michael Pento of Euro Pacific Capital] said. “China wants to be an international player, and they need to own more gold than they currently have.”

...“China is out to have more gold than America, and Russia is aspiring to the same,” [Robert] McEwen, [the chief executive officer of producer U.S. Gold Corp] said yesterday in an interview in New York. “When you have debt, you don’t have a lot of flexibility. China wants to show its currency has more backing than the U.S.”

...China, with more than $3 trillion in foreign-currency reserves, plans to set up new funds to invest in precious metals, Century Weekly reported this week. Russia purchased 8 tons of gold in the first quarter. (read more)

Oil Corporation profits surge while regular people feel pressure at pumps with no relief in sight

Chevron and Total became the latest big oil companies to post sharp increases in profits as crude prices surged and refining margins improved along with global fuel demand.

The price of oil has risen comfortably above $100 a barrel, putting a squeeze on drivers and raising talk of a U.S. legislative pushback, as global energy demand and unrest in the Middle East and North Africa darken the oil supply picture.

"Growing geopolitical tensions and the aftermath of the earthquake in Japan will shift the balance of the global energy markets," Total Chairman Christophe de Margerie said.

The surge in the price of crude, the oil refiners' main input, has led to a $1 surge in the price U.S. drivers pay for a gallon of gasoline, angering consumers already beleaguered by years of recession, while crimping the recovery. (read more)

Government assistance outpacing tax intakes in US: Dangerous

There's a sad story making the rounds which should be Front Page News in this great land of ours, but it has received scant attention. USA Today reports that Americans depend more on government aid than ever.

Americans depended more on government assistance in 2010 than at any other time in the nation's history, a USA TODAY analysis of federal data finds. The trend shows few signs of easing, even though the economic recovery is nearly 2 years old.

A record 18.3% of the nation's total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs in 2010.

Wages accounted for the lowest share of income — 51.0% — since the government began keeping track in 1929...

From 1980 to 2000, government aid was roughly constant at 12.5%. The sharp increase since then — especially since the start of 2008 — reflects several changes: the expansion of health care and federal programs generally, the aging population and lingering economic problems.

Americans got an average of $7,427 in benefits each in 2010, up from an inflation-adjusted $4,763 in 2000 and $3,686 in 1990. The federal government pays about 90% of the benefits.

"What's frightening is the Baby Boomers haven't really started to retire," says University of Michigan economist Donald Grimes of the 77 million people born from 1946 through 1964 whose oldest wave turns 65 this year. "That's when the cost of Medicare will start to explode." (read more)

How Goldman Sachs Created the Food Crisis

Demand and supply certainly matter. But there's another reason why food across the world has become so expensive: Wall Street greed.

It took the brilliant minds of Goldman Sachs to realize the simple truth that nothing is more valuable than our daily bread. And where there's value, there's money to be made. In 1991, Goldman bankers, led by their prescient president Gary Cohn, came up with a new kind of investment product, a derivative that tracked 24 raw materials, from precious metals and energy to coffee, cocoa, cattle, corn, hogs, soy, and wheat. They weighted the investment value of each element, blended and commingled the parts into sums, then reduced what had been a complicated collection of real things into a mathematical formula that could be expressed as a single manifestation, to be known henceforth as the Goldman Sachs Commodity Index (GSCI).

For just under a decade, the GSCI remained a relatively static investment vehicle, as bankers remained more interested in risk and collateralized debt than in anything that could be literally sowed or reaped. Then, in 1999, the Commodities Futures Trading Commission deregulated futures markets. All of a sudden, bankers could take as large a position in grains as they liked, an opportunity that had, since the Great Depression, only been available to those who actually had something to do with the production of our food. (read more)