Newswire 1/4/2011

[The Liberty Insight Newswire is an aggregation of what we consider to be important financial and political news and commentary from across the web.]

Today’s stories cover a potential breakthrough in nuclear energy, warnings about the bond market, the numbers behind Medicare, and, of course, a little bit about gold…


China touts nuclear fuel ‘breakthrough’
Sydney Morning Herald, Jan. 4, 2011

It’s hard to say without knowing all the details, but this is potentially huge news. The article implies that they can effectively reuse uranium roughly 50 times. This would mean the problems with nuclear waste storage and finite supplies of uranium have been improved fifty-fold. (Although it’s unclear what the waste implications of reprocessing the uranium would be.) For a world facing peak oil amidst rapidly increasing energy demands (not to mention air pollution and global um warming) a breakthrough of this magnitude has enormous economic, social, and environmental implications.


Is The Federal Reserve Really Purchasing Over 60% Of 2011’s Fiscal Deficit? In A Word, Uh… Yeah.
Gonzalo Lira, Jan. 4, 2011

And that’s on the conservative side.


Bill Gross Telling Bloomberg To “Avoid Dollar Denominated Government Debt” Probably Means Bond Rout Is Over
Bloomberg News via Zero Hedge, Dec. 31, 2010

When Nassim Taleb and Marc Faber say that US government debt is a suicide investment, one can be allowed some skepticism. After all, they are likely just talking their book. On the other hand, when the manager of the world’s biggest bond fund, whose flagship fund Treasury holdings amount to almost $80 billion goes on Bloomberg and says to “avoid dollar-denominated government debt” better known as US Treasuries, and instead recommends viewers invest in “stable” currencies like the Peso, the BRL or the CAD, then you know the bottom in bonds is in.


It doesn’t add up: What you paid into Medicare is just a fraction of what your care will cost
The Baltimore Sun, Dec. 31, 2010

… Consider an average-wage, two-earner couple together earning $89,000 a year. Upon retiring in 2011, they would have paid $114,000 in Medicare payroll taxes during their careers. But they can expect to receive medical services — from prescriptions to hospital care — worth $355,000, or about three times what they put in.


IMF Completes Gold Sale Programme
Financial Times, Dec. 22, 2010

For over two decades, the official sector, which includes central banks and the IMF, has been selling gold into the market. In 2010, the official sector was a net buyer of about 15 tonnes of gold bullion. With the IMF halting its gold sales, this net buying trend by central banks is likely to continue and possibly grow in 2011. This is clearly a positive sign for the price of gold.

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