Higher silver prices fail to put a dent in demand Industrial demand for silver rose for the sixth year in a row, and jewellery fabrication slipped by only 2% last year, as high and volatile prices for the metal failed to deter buyers, according to an industry report published on Wednesday. In their World Silver Survey 2008, launched in New York, GFMS and the Silver Institutue report that the average silver price last year, at $13,38/oz, was 16% higher than in 2006. Further, investment demand, which has played a key role in driving prices upwards, had continued to grow since, and had sent silver prices to fresh highs above $20/oz, earlier this year. However, despite the higher prices, industrial demand for silver increased by 7%, to 455,3-million ounces.
Steel Cents Debated in House, No Decision Yet The debate to change the metal composition of U.S. coinage was waged on the House floor Tuesday. With the surging prices of metals like zinc and copper, it now costs more than a penny to make a penny and about 7.5 cents to make a nickel. A new House bill entitled "H.R. 5512, the Coin Modernization and Taxpayer Savings Act of 2008" would seek to change that and it was that bill, which was in debate. The proposed legislation would give the Treasury Secretary the power to change the composition of coins and use less expensive metals. It also would require the United States Mint to produce steel pennies within six months of the bill’s enactment.
Calendar shift lifts April sales; tough trends ahead Consumers seeking value and buying groceries and other necessities bolstered April sales at discounters, and a tighter hold on wallets led to cautious spending in discretionary items, yielding mixed results for apparel retailers. Overall, retailers' sales in April rebounded from a downbeat March, boosted by warmer weather in the first half of the month and a calendar shift in Easter that resulted in an extra selling day. Record-high oil prices and declining housing and credit markets have curtailed consumer spending and sentiment, making spending on discretionary items, such as apparel, not a priority. While the calendar shift lifted April results, and economic stimulus checks may provide some lift to sales in the next two months, retailers are not out of the woods and it may be too early to predict what impact those check may have, retailers and analysts said.
Vallejo Votes For Bankruptcy After nearly five hours, the Vallejo City Council voted unanimously late Tuesday night to file Chapter 9 bankruptcy protection. The city faces a $16 million deficit in the 2008-2009 budget starting July 1 and unsuccessfully negotiated with its police, firefighter and electrical workers unions for contract concessions through 2012. Public safety salaries comprise 74 percent of the city's general fund budget. Most of Tuesday night's 30 speakers urged the council to file bankruptcy so the city can restructure its finances. John Riley, president of the International Association of Firefighters, said he is disappointed by the 7-0 vote to file bankruptcy. "I think it was premature. I don't think they exhausted all their options," Riley said.
Inflation, Wages & The Consumer Shutdown Of 2008 "...Now that cheap money's vanished, where will consumers find enough cash to pay the bills...?" THE CHEAP MONEY BUBBLE might have gone pop. But everywhere we look, the mischief of cheap money continues to cause mayhem for investors, savers, retirees, even school children."I've been in school service for 27 years and this is the worst it's ever been," said Sara Gasiorowski, a food services director for the school board in Indianapolis, to CNN Money on Wednesday. "I have never seen food prices jump up so far." Ms. Gasiorowski is now shuffling ingredients and switching menus to make her budgetary dollars stretch where they used to. But with each dollar buying ever less stuff, "there isn't enough money to go around," grumbles Lynnelle Grumbles, the wonderfully-named food service director of Visalia Unified School District in central California.
U.S. Consumer Debt Rises More Than Forecast in March U.S. consumer borrowing jumped more than double the amount economists forecast in March, indicating a slowing economy is forcing Americans to accumulate credit-card and other forms of debt. Consumer credit increased by $15.3 billion for the month to $2.56 trillion, the biggest monthly rise since November, the Federal Reserve said today in Washington. In February, credit rose by $6.5 billion, previously reported as an increase of $5.2 billion. The Fed's report doesn't cover borrowing secured by real estate, such as home-equity loans. Consumers are turning to credit cards after banks tightened standards for home-equity loans and other borrowing. The March figures brought U.S. consumer borrowing in the first quarter to $34 billion, the most since the first three months of 2001, when the economy entered its last official recession.
Merrill Expects U.S. Consumer Loan Defaults to Rise Merrill Lynch & Co. expects defaults on U.S. consumer loans and credit cards will rise, putting strain on the world's largest economy, Chief Executive Officer John Thain said. ``Continuation of falling home prices, rising food prices, rising energy prices and higher unemployment will result in a pull back on the part of U.S. consumers,'' Thain said at a press briefing in Mumbai today. That ``will continue to drag the U.S. economy for the next 6 to 12 months.'' The largest U.S. brokerage has no immediate plans to raise more capital, Thain said. Merrill has written down $31.7 billion in assets while its stock plunged 45 percent since the beginning of 2007 as the meltdown in the U.S. subprime-mortgage market spawned a global credit squeeze.
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