In what analysts say is another indication that the economy will get worse in the not-too-distant future, recent filings by billionaire financier George Soros show he dumped virtually all his holdings in major financial companies like JP Morgan, Goldman Sachs, and Citigroup. His multi-billion-dollar U.S. fund also loaded up on gold, with the portfolio now holding more than $130 million worth of the precious metal.
Meanwhile, other experts like legendary investor Jim Rogers are warning of "financial Armageddon" as governments and central banks continue to print and spend currency they don't have. Some economic analysts even believe food and energy systems could collapse along with the economy in an unprecedented global calamity unknown in human history.
The prices that Americans pay for gas at the pump may reach an all-time high this summer. The average price is $3.70 per gallon, which is an increase of 30 cents since July and the climb in price from July to August was 9 percent. The increase is particularly concerning because a reduction in global demand, caused by a persistent world-wide recession, has kept demand for gas relatively low. Some have predicted that the price of gas will reach $3.90 per gallon before Labor Day. Gas prices have risen each month for seven straight months this year.
The current drought afflicting the country is driving up the price of corn and reviving the debate over ethanol mandates that redirect corn from food to fuel.
Because of the drought, corn yield per acre this year will be the lowest since 1995, while the actual production of corn will be the lowest since 2006. A congressional mandate to turn corn into ethanol in order to reduce emissions requires converting nearly 40 percent of that harvest into 13.2 billion gallons of ethanol. That leaves precious little to feed cattle and people, driving up the price.
President Obama made sure that Iowa farmers knew that he was “there for them” during a campaign stop in Council Bluffs, Iowa, on August 13, by announcing another package of “aid” during the drought. The aid will involve the purchase of $100 million of pork, $50 million of chicken, and $10 million each of lamb and catfish. This comes on top of $30 million of aid announced last week.
The latest numbers from China on its gross domestic product, factory output and electricity usage all show a bubble bursting. Kevin Yao, writing from Beijing for Reuters, expressed surprise when the latest numbers about China’s factory output came in at its lowest level in three years: “China’s factory output growth slowed unexpectedly in July…[due to] stiff global headwinds…”