Monthly Trade Balance

The Trade Balance report for January 2011 was released today with a worse than expected result.  The Trade Balance number is the difference in value between imported and exported goods and services during the reported month. A positive number indicates that more goods and services were exported than imported and a negative number indicates more goods and services were imported than exported.  We have been negative for quite some time and diving further, but not the lows of 2010 yet.  The forecasted number called for -41.4 billion, but the actual number was -46.3 billion dollars.  

You can see how that gap between imports and exports is widening again but are on the rise (imports more than exports).  

Courtesy of BEA

Weekly Initial Unemployment Claims

Last weeks Initial Unemployment Claims were released today with worse than expected results.  Initial Unemployment Claims is the number of persons that filed for unemployment benefits for the first time in the prior week.  The forecasted number called for 375k, but the actual number came in at 397k.  The prior weeks number of 368k was revised up to 371k.

FED to Print $102 Billion in Next Month

The FED released its next purchase schedule in which it plans to print $102 billion dollars in POMO (Permanent Open Market Operation) purchases by April 11th 2011.  This will total $528.733 billion by April 11th 2011, leaving $71.267 billion to print over 1/2 of April, all of May and June.  I think the printing will be well over the $600 trillion, should be closer to the $900 billion they discussed originally.

FED POMO Purchases

The FED made three POMO (Permanent Open Market Operation) purchases this week of $6.610 billion on 3/7, $7.657 billion on 3/8 and $6.690 on 3/9.  This brings the aggregate for three days to $20.957 billion dollars.  This brings the total since November 11th  2010 to $426.733 billion and $491.193 billion since August 17th 2010.  Multiple hints in the media toward a QEIII to happen after QEII.

Weekly Money Flows

This week the money flows report showed a reversal in the purchasing of Domestic stocks (let's hope QE II holds up to continue holding up the stock market).  This week Domestic stocks lost -$3.134 billion dollars, while Foreign stocks saw in-flows of $1.091 billion dollars.  Bonds continued their trends as -$711 million dollars flowed out of municipal bonds, while $4.784 billion flowed into Taxable bonds.

King World News Interviews

King World News interviews John Hathaway, Ben Davies & James Turk.  Topics cover Gold/Silver, the Middle East, QE II and beyond, as well as the food crisis created by inflation, the U.S. Dollar's decline in status in the world as reserve currency and interest rates.

John Hathaway - Says the move in gold right now is due to geo-political unrest and the QE policies of the U.S. which is causing weakness in the U.S.  Between John and Ron Paul this is a make believe recovery and that the real unemployment rate is much higher than being reported.  If QE goes past June 30th, silver will go to 50/60 dollars per ounce.  John then goes on to talk about metals  (specifically gold/silver and the minors for both).  John says if we take out a new low of 71 then their could be a dollar panic, but currently is just hanging around the lows.

Ben Davies - Discusses how the revolts in the Middle East are becoming a domino effect and will be drawn out over the next decade having an impact on oil for quite a while.  He says that this problem is going to act very inflationary and will cause food, fertilizer and other prices to rise.  Ben believes the fact that the metals are going up isn't due to geopolitical risk, but due to tight supply.  Ben also discusses how Japan will increase QE and we may see strengthening in the Yen as a short term oddity.  

James Turk - Discusses the U.S. Dollar where we took out the 77 level and believes we are going to go lower from here.  He also talks about how the concept of the U.S. Dollar losing its status in the world is declining and will be a hard crash.  James points out that the dollar didn't bounce as it should have, as the safe haven currency, with all the unrest in the Middle East.  He also talks about Trichet's announcements to hold rates at current rates, but hinting toward raising rates in May.  James is forecasting 1800 dollars for gold as the dollar has been moving sideways to slightly down and gold has moved up, so when the dollar really goes, gold and silver should spike up.  James points out that this is a global debasement of currencies and in the 70's you could go to safe haven currencies, but cannot now.

Weekly Unofficial Problem Bank List

CalculatedRisk released their updated Unofficial Problem Bank List this week which increased the number of problem banks to 962.   No bank failures occurred this week, but as CalculatedRisk points out their was one removal due to a terminated action, as well as 3 additions to the list (see article for more details).  The states that added to the list were Florida, Ohio and Pennsylvania and the one bank removed from the list was in Delaware.

M1 & M2 Money Supply

The weekly M1/M2 money supply was released this week with both increasing this week.  M1 money supply, which is defined as Currency, Traveler's checks, demand deposits and other checkable deposits, rose +1.37% from last month and +9.12% from a year ago.  M2 money supply, which is defined as M1 plus; Retail Money Market Mutual Funds, Savings and Small Time Deposits, rose +0.12% from last month and +3.80% from a year ago.