This could be the only way to stop a U.S. credit downgrade

From Washington's Blog:

According to Reuters, a majority of economists now think U.S. credit will be downgraded.

The debt ceiling plans being proposed likely will not avoid a debt downgrade.

Indeed, as Zero Hedge notes, the cuts being proposed in the debt ceiling proposals would be offset by the costs of the downgrade...

The U.S. downgrade alone, now virtually taken for granted by everyone, will offset any beneficial impact from any deficit reduction that will have to happen for the debt ceiling to be increased.

Indeed, many are starting to say a downgrade is inevitable.

In truth and in fact, we could still avoid a downgrade ... but only if we immediately...

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More on the "End of America":

Jim Rogers: The U.S. has already lost its triple-A status

Ron Paul BLASTS Obama's fear-mongering on the debt ceiling

The Ron Paul op-ed everyone will be talking about this weekend

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Six world-class stocks that could pay larger and larger dividends for decades

From Dividend Monk:

When building a dividend-growth portfolio, finding high-quality companies that will continue paying larger and larger dividends for decades rather than just the next few years is important. The longer you can hold onto shares of a company, the lower your trading costs and taxes will be compared to what they would be if you trade often.
But this is only a good strategy if the companies you hold onto continue growing shareholder value.
So the key is to look for companies that, among other things:
a) Have a large and sustainable competitive advantage.
b) Are in an industry that is timeless, or nearly so.
c) Are in a solid financial position.
Here are six sample companies... JNJ, LOW, MCD, WMT, MDT, CVX
Read full article...
More on dividend stocks:
These stocks are an income investor's dream
This list of top stocks for 2011 has something for everyone

Four criteria the world's greatest dividend stocks have in common
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Casey Research: What the Australian floods could do to coal prices

By Marin Katusa, Casey’s Energy Report:

The most important metallurgical coal basin in the world is underwater. Open pits have become lakes, stockpiles are soaked, and rail lines are submerged... and, in places, destroyed. Damage is estimated at $5 to $6 billion.

Australia accounts for almost two-thirds of global coking coal production. Much of it comes from Queensland, where an area the size of France and Germany combined is underwater. That includes the Bowen Basin coal region, which produces almost a third of the world's coking coal. The Bowen Basin was hit with 350 mm of rain in December, against an average of 102 mm.

Floods are now receding from the Bowen, giving some miners an opportunity to ship from existing stockpiles. Other mines are still inaccessible, and several rail lines are still submerged or damaged. And since open pits are still flooded and will take weeks to drain, shipping from stockpiles only postpones the inevitable: a reduction in met coal supply. Analysts think a recovery to pre-flood coal production levels will take at least three months.

At least six major global coal miners have declared force majeure, which means they can miss contractual shipments because of circumstances out of their control. The list includes Anglo American, Aquila Resources, BHP Billiton, Macarthur Coal, Rio Tinto, Vale, and Xstrata. Mines responsible for between 100 and 140 million tons of annual coking coal production are now under force majeure, representing as much as 40% of global supply.

And it's probably not over yet. Australia's Bureau of Meteorology predicts both eastern New South Wales and southeastern Queensland have a 60% to 70% chance of receiving higher-than-average rainfalls between January and March 2011.

What does it mean for coal prices and coal equities?

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More on coal:

The easiest way to profit from skyrocketing coal prices

Why the breathtaking rally in coal could be going much, much higher

China will soon be the world's largest importer of this essential energy commodity

View the original article here

This could be the No. 1 investment of 2011

From Forbes:

Don't let the People's Bank of China spook you with its anti-inflationary fifth hike in bank reserve requirements this year. China's economic growth will continue to be robust and so will its need for the world's natural resources. Some raw materials will be more in demand than others.

The investment mantra for 2011 is called differentiation, meaning there will be relative differentials in performance among commodities, precious metals, energy, agricultural, and base metals. Unlike 2008 when the commodity bubble burst and the entire asset class went down with stocks, or the early part of 2010 when expectation of a cheaper dollar rallied stocks and commodities, 2011 will be starkly different. QE2 will "provide cyclical stimulus" to the most...

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More on commodities:

How the commodities bubble could burst

Legendary investor Mark Mobius: Buy commodities... and buy 'em big

T. Boone Pickens makes outrageous claim on America's natural gas supply

View the original article here

Why a runaway move in gold could be just around the corner

From The Reformed Broker:

Richard Russell, James Cramer and my mom all agree now – gold is on the move.

That doesn't tell me there's a top in gold – that tells me the parabolic, hyper-speculative phase is imminent. You know the one I'm talking about... Where the chart becomes an Empire State Building and Donald Trump announces the first-ever Mine & Casino somewhere out west.

Read this recap of last night's "Mad Money" and get scared:

"Gold is not just another commodity," Jim Cramer told the viewers of his "Mad Money" TV show as he once again urged investors to put up to 20% of their portfolios into gold....Cramer once again gave the nod to Eldorado Gold and Agnico-Eagle Mines, along with the speculative Novagold, a stock which he owns for his charitable trust...

Seriously, after a 10-year run, a recommendation to the least sophisticated audience imaginable to put 20% of their assets in gold. Yes, he said "assets", not "portfolio" on the show, but we'll assume he meant "portfolio" and give him the benefit of the doubt. Oh, and he sent his viewers to buy...

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More on gold:

How to know if you own enough gold

Brace yourself for the coming gold shortage

Casey Research: Four big signs that it's time to sell your gold

View the original article here

A huge buying opportunity in silver could be coming

From Trader's Narrative:

... [Y]esterday the CME raised the margin requirements for silver from $5,000 to $6,500. While this is being credited with causing the reversal, I don't think it completely explains what happened. It definitely contributed to it but often we grasp at news or reasons for the market's moves when all you need to do is watch the price action itself.

Anyone paying even cursory attention would know the precious metal was already extremely overstretched to the upside and had been sporting extreme bullish sentiment for some time. I outlined just how extreme in late September when silver reached a new 30-year (nominal) high accompanied by a 95% bullish DSI.

Silver managed to shrugged that off and went on a parabolic rise peeking above $29. Personally, I was expecting it to reach the nice, round number $30 before reversing. But it doesn't look like it is going to now.

There is currently a rare technical occurrence in silver...

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More on silver:

The worst silver trade you could make right now

Three new reasons to buy silver that many investors aren't aware of

Top resource investor Berry: Silver could triple in the next five years

View the original article here

World Bank president: Gold could replace the dollar

From Mish's Global Economic Trend Analysis:

The current dollar-based global monetary system known as "Bretton Woods II" is on its last legs. We all know it, but what none of us know is what will replace it.

Inquiring minds should be interested to discover that World Bank President Robert Zoellick mentioned a role for gold in the development of a new monetary system to succeed...

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More on the U.S dollar:

This region's food riots could set off the dollar crisis

The first signs of a dollar crash are showing up here

MUST READ Op-Ed: The world's monetary system is melting down...

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How the commodities bubble could burst

From Mineweb:

Whatever was the real reason for the Fed to initiate another round of quantitative easing (QE), the end result is fairly clear: the Fed is wittingly or unwittingly in the process of creating new bubbles - in equity and commodity markets.

What we had feared would transpire from spring 2011 until around mid-2012 may now be starting to play out. One of our friends eloquently described QE as nothing more than another great government Ponzi scheme with a fancy name…

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More on commodities:

Legendary investor Mark Mobius: Buy commodities... and buy 'em big

Commodity prices are about to explode as power shifts from West to East

Stunning chart shows the "real" rate of inflation

View the original article here