World Bank

We are right on track for the next American revolution but it's a slow train so grab those fish while you can, my friends - you may need them to barter with down the road!

• Most Dealers See Fed Keeping Rates Near Zero (Reuters)
• Japan Economic Data Underscore Impact of Disasters (WSJ)
• China’s Population Flocks to Cities, Grows Older, Census Shows (Bloomberg)
• China Property Slowdown Poses Growth Risks, World Bank Says (Bloomberg)
• Asian Currencies to Appreciate Against Greenback in Second Half, ‘Mr Yen’ Says (Taipei Times)
• Syria's Assad Facing Dissent over Deraa Crackdown (Reuters)
• Spain Calls Draghi ‘Excellent’ Choice for ECB President, Isolating Merkel (Bloomberg)
• German Unemployment Falls Below 3 Million to 19-Year Low (Bloomberg)

The Chinese yuan is going strong again, breaking the 6.5-dollar-level over night: Thanks Ben! In the meantime, gold demand in China is surging... what does this all mean?

When I met Phil the other night, he was on fire, enraged by what he believes is the scam of the century that no one wants to talk about, because so many powerful people armed with legions of lawyers want unquestioning allegiance, and will sue you into silence.

As competition for food supplies increases, food prices are going to go up. In fact, at some point they are going to go way up.

Gold has breached the $1500 level and reached new record nominal highs at $1,505.65/oz. Since yesterday it has gradually risen in all currencies and is approaching record nominal highs in all major currencies. $2,400/oz is the inflation adjusted (CPI) high of 1980 and given the very uncertain macroeconomic climate of today and concerns about the dollar and all major currencies, arguably even more uncertain than the 1970’s, the real high remains a very viable target. It is important to remember that while gold has risen some 6 times in 11 years ($250 to $1500) it rose by 24 times in 9 years in the 1970’s – from 1971 to January 1980 ($35 to $850). This puts the recent reasonably gradual increase in gold prices in perspective and should give gold bears and top callers pause for thought.

Things are certainly speeding up, and it is my conclusion that we are not more than a year away from the next major financial and economic disruption. Alas, predictions are tricky, especially about the future (credit: Yogi Berra), but here's why I am convinced that the next big break is drawing near. In order for the financial system to operate, it needs continual debt expansion and servicing. Both are important. If either is missing, then catastrophe can strike at any time. And by 'catastrophe' I mean big institutions and countries transiting from a state of insolvency into outright bankruptcy.

Things like this don't all happen at once, today just happens to be a day that the S&P happens to mention that we are standing dangerously close to the ledge. Brazil was much smaller than Greece when they defaulted in 1983 and they took the US economy down with them...

• Debt Ceiling Increase Is Expected, Geithner Says (NYT)
• Zhou Pledges More Tightening as China Raises Reserve Ratios (Bloomberg)
• Fed to Signal End of Monetary Easing (FT)
• Finnish Populist Party Surge Clouds EU Bailout (Reuters)
• Glencore worth up to $69 billion (Reuters)
• Libyan Rebels Gain Ground in Fierce Fight (WSJ)
• Capitalism is failing the middle class (Reuters)
• Inflation in China Poses Big Threat to Global Trade (NYT)

There are many ways this can end badly and only a few it can end well.

Today has been a busy day for central planners around the world: the IMF and the World Bank are holding their spring meetings which has resulted in an avalanche of Bloomberg excerpts. Courtesy of Reuters, here is a full summary of the key statements by various high level officials. As usual anything that is being denied is about to hit us head on. Of particular note are the statements by TeflonTurboTaxTim Geithner.

World Bank president Robert Zoellick is currently speaking live on Reuters Newsmaker, and is discussing numerous topics related to the future of the monetary system, notable among them most likely being the fate of the dollar, and whether or not he still stand behind his recent statement that a return to the gold standard is needed for the world.

On this side of the rainbow, “How much money should an uncreditworthy entity be allowed to borrow?” is a rhetorical question. In Washington DC, it’s a topic of much rhetoric. In fiscal year 2009 Congress borrowed 53.5 cents of every dollar they spent. In FY2010 they borrowed 48 cents of every dollar (*check your numbers, Santelli). So they’ve borrowed and spent 3.5 Trillion to produce 255 Billion in GDP growth (7% efficiency!), never even bothered to pass a budget for FY2011, and still haven’t managed to get a single bankster put in jail. Now these whores are lecturing us about “moral obligations.” They also swear they’re gonna straighten up and fly right this time. There is one little detail they forgot to mention – no one actually wants to lend them money. Welcome to the last resort.

And some more bullish news for inverse consumption from JPM's Lawrence Engles Daily Note On Oil: 'As long as key economies remain on track, and given the tensions still manifest on the supply side, we remain positive on near-term price outlook and expect 2Q2011 Brent crude to average $118/bbl, prices possibly spiking towards $130/bbl, if OPEC fails act in time and raise production." Basically we are no recreating the "goldilocks" economy from late 2007/early 2008 when everyone thought crude at $150 was sustainable. And back then there wasn't quite as much "speculative actions driven by too much liquidity" as noted earlier by Charles Plosser.

The goal of Alt-Market is to facilitate barter networking and the exchange of knowledge and ideas for thriving in a faltering monetary environment.