Monday, November 30, 2009

“A New Day of Economic Justice for All” (The Day the Dollar Died Part V)
22:00 by Administrator. Filed under: The Day The Dollar Died Series
by John Galt
November 29, 2009
Thou commandest me to lead forth this people; and thou dost not let me know whom thou wilt send with me, especially whereas thou hast said: I know thee by name, and thou hast found favour in my sight
Exodus 33:12
35:31. And hath filled him with the spirit of God, with wisdom and understanding, and knowledge, and all learning,
35:32. To devise and to work in gold and silver and brass,
The reality of the crisis will soon sink in on the American public in this portion of the story. The portion below is FICTION and I have not entered this section in italics at the request of several readers who have difficulty reading the font in that style.

February 24, 2010 05:18 A.M.
So sue me. This time I hit the snooze button twice. I decided I would head over to the office today to see if the owner had sobered up and elected to give it a try. My wife begged me to stay home claiming the news was filled with stories of muggings, hijackings of trucks and robberies everywhere but I knew that was not the case in our little part of Florida, not yet at least. I calmed her down as I shaved by saying “Look, if it is dangerous looking outside, I will turn back home. I will carry my pistol and call you when I get to the office. Heck honey, I have no idea if we are even going to be open but we have to try to get the business moving again.” She just shook her head and looked at me with those sad, sultry blue eyes and wanted to cry as she tends to do when the stress levels max out. I reassured her by saying “Don’t worry, the 12 gauge is loaded beside the computer desk in my office. I promise to call you on a regular basis, at least once an hour.”
As I put an extra magazine for my pistol in my briefcase, I turned to more important issues, like wondering just how the circus would get restarted after they shut it down cold with no warning. My company was obligated to fifteen construction projects throughout the state, about twenty percent of our former volume three years ago. The problem we had been experiencing with spare parts delivery on the big equipment had dragged on and on with excuses and little resolution in sight as the suppliers kept going bankrupt or endured transportation breakdowns. I never would forget the article on the cover of Business Week from the first of this month titled “The Death of J.I.T.” and laughed because they had no idea that the problems they wrote about had been ongoing for almost a year before. The funny thing is nobody noticed any problems until a local super market ran out of Raisin Bran for a week and that was just a little over ten days ago. Now on the local news program on 820 I listen to every morning here’s a local politician stirring up everyone with the warning that shortages are going to be pervasive in our state and soon if the government does not get the banks and credit systems open. “No duh” I thought to myself.
After shaving and listening to all of the depressing local news, I figured I might as well turn the television on and see what the financial networks had to report. I was too tired and depressed by this point in time to visit the internet blogs, message boards and news sites so I figured the cheery voices on CNBC, FBN or Bloomberg would have some sort of news, anything to give me a clue. Heck, it was a quarter until six in the morning and usually the networks had the biggest stock pumpers in the world on, but that would be sort of a moot point now.
As I settled in front of the television, the media attempted to portray things in a most interesting twist as I attempted to enjoy my coffee with a bagel. The first thing I saw on CNBC was a new feature titled “Investing in the New America” which caught my eye and made me ill all at the same time. Then as I switched over to Fox Business their feature a few minutes later was “A New Day for American Business” that finished my appetite off, but intrigued me enough to watch the feature to see what in the world was going through their minds. At just before six o’clock I switched over to Bloomberg for some sort of sanity. Sadly, it became apparent to me that when sanity left the building, it took our entire world with it. “Dawn of A New America” was the graphic emblazoned on the screen with the Third Movement to Dvorak’s New World Symphony blaring in the background and with my mouth dropping to my knees it seemed, on came a new group of talking heads that I had never seen on Bloomberg before nor would I have ever expected to based on what they said next.
“Good Morning! This is Sandra Williams with my co-host Tom Lewis and welcome to the new Dawn of American Business brought to you exclusively on Bloomberg Television in the United States, CNBC U.S., and the Fox Business Network every morning from 6 A.M. until 9 A.M. when the networks resume with their normal line up. This service is a joint effort between the cable news and broadcasters of the United States designed to insure that important information about America’s economy, government and regulatory agencies are brought to you unfiltered as a service of the United States Department of the Treasury and the U.S. Chamber of Commerce. We are part of a new special reporting group from the United States Information Agency designed to keep Americans and the world informed during this brief economic crisis.”
My charming wife walked in the room in time to yell at me “I’m not cleaning up that coffee spill on the sofa, you have to do that yourself and do you realize that you’re drooling? What in the world has gotten into you?” She was right of course as I had basically drooled and spilled coffee on my chin, my shirt and the sofa in stunned amazement to what I had just heard. Then after pointing to the television and explaining what I had just heard, she sat down with me to watch a bit more of this stunning first in American broadcasting.
February 24, 2010 06:19 A.M.
The talking heads basically did recaps of everything we already knew to this point but started to add some information to fill in the blanks. The target date for re-opening the entire United States banking system was now March 15th and that could not be good for the financial system but as the announcers stated, the bad institutions would be absorbed and liquidated as necessary and that had introduced inherent instability and the concerns of bank runs as many other commentators had alluded to. Before I could say a word, an advertisement appeared for the new “$ Card” which appeared to be a slick add to push a new government sponsored credit card. In reality it was something more insidious as the ad finished with the slogan “Standby for instructions tomorrow February 25th on how to obtain and use your Dollar Card, soon to be the only legally accetable method for transferring funds from failed banks and travel overseas.”
Travel overseas? What was wrong with Travelers checks or credit cards? This is getting weirder by the minute. The ads that followed were no less uncomfortable to view as my wife and I sat dumbfounded and fixated at the screen.
- An ad from Chase telling all of its cardholders to hang in there as it would soon have a 0.0% interest rate in exchange for the new per usage fees approved by the Federal Reserve and to check our mail for further instructions.
-An ad from Ameritrade assuring its customers that the impending regulations would guarantee the value of their account as of February 19, 2010 and not to sell or panic when financial markets re-open on March 8th but to be comforted by this new government guarantee under the SIPC, now a part of the Federal Reserve Economic Security Division.
-An ad from Goldman Sachs assuring all of the customers who the Federal Reserve and FDIC that are assigned to their supervision that business will return to normal soon enough and to smile at the new dawn in America.
-An ad from FEMA urging all Americans in need to register for help by February 28th so an assessment of the economic crisis and needs of its citizens can be completed as soon as possible.
My wife was shaken by this and puzzled just looking at me and uttering “Dollar Card?” with a very puzzled look on her face. “Got me,” I replied “I’ve never heard of such a thing.” She then begged me again to not go to work and stay home but I would have none of it. It was just after six thirty in the morning and I had to leave. As I tucked my cell phone into my pocket and made sure my CCW permit was in my wallet, I kissed her on the cheek, told her how much I loved her and headed out the door. Work had to be beckoning me by now and with all of the efforts by the Obama administration, some semblance of normalcy had to be on the horizon. “Yeah, right” I thought to myself. There was never to be a normal anything for the rest of our lives the way I figured it. The morning news was only a hint of the insanity to come.
February 24, 2010 07:05 A.M.
As I pulled my F-150 into the driveway of our offices, I slowed down to a crawl and almost broke down in tears. There was a Sheriff’s office squad car sitting at the end of the driveway blocking the way, a fire truck spraying water on some smoldering rubble and what appeared to be a van from the Arson squad or Coroner’s office around the back of the fire truck as it was too far away for me to see at the moment. “Halt right there!” the deputy bellowed out, hand on his sidearm with the holster unsnapped and his other hand making a stopping motion, “Identify yourself and state your business.” I squinted through the windshield and rolled my window down “Doug, is that you? What the hell are you doing here? And what happened to my company’s offices?” Doug, a fifteen year veteran of the Sheriff’s office and long time friend and partner in my bowling league looked relieved. Doug’s voice was shaking as he told me”John, good to see that it is you. We’ve had reports of looter’s trying to get in here and mess up our crime scene. I guess we won’t be bowling again any time soon since the team sponsor was found dead inside of his own building.”
I turned my truck’s engine off and stepped slowly outside of the vehicle, somewhat in shock. “Doug, uh, wh, wha, what happened?” I stuttered choked up trying to ask the question without losing it. The deputy took a sip of coffee from the cup on his squad car and took a deep breath to reply, “John, it appears now per the coroner and arson investigator to be suicide. The initial report has him going inside the office some time last night, pouring an accelerant on the floors, turning off the fire suppression system and setting the building on fire while he was in it. They’ll conduct an autopsy this afternoon. Do you have any idea why he would do this?” I must have freaked my friend out a bit as he had never seen me shaking like this as he put his hand on my shoulder in an attempt to reassure me. “Oh God Doug, he kept talking about leaving it all yesterday on the golf course as we played through but I thought he was talking about leaving town. I had no idea he meant this!” I told him slowly, my voice low and shaking. “That’s okay John, he was in a world of trouble,” Doug said in a sympathetic voice, “He was on the list of tax evaders to be arrested later this week and I think he knew it. All debtors to the Federal government who had failed to file the proper forms by December 31st of last year were going to get a visit soon. The events of the past twenty-four hours have just accelerated the process.”
I just looked at him and nodded as if to understand what he was saying and as I began to ask another question he interrupted and shocked me with “John, you’re not carrying today are you?” I looked him in the eyes and said “Of course I am Doug. You know the way things are today, I would not leave home without it.” He shook his head and firmly advised me “Look, we’ve know each other for years. I’m letting you go straight home but do not get caught by another officer again on the streets with your weapon. They will confiscate it now. Only Federal, State and Local authorities are allowed to be out in public armed for the next sixty days and that edict will become public at 9 a.m. when the President issues a series of Executive Orders we have been advised on already. Go home. Tune into the news and watch what they tell you to do. I’m being generous another officer will not be as nice.”
With that, I shook his hand, told him if there was anything I could do to call me and he promised to call me tomorrow night when his eight hour off shift began. He had been on the eight on, eight off shift now since six o’clock Monday morning and it was wearing on him. I thanked him and headed straight home, dying to know the new orders and laws of our President which apparently suspended our CCW rights among many other things. It was seven thirty-five in the morning, leaving me plenty of time to make it and start securing our home a bit more than I had previously. I called my wife and told her what had happened and she burst into tears, crying over and over again the words “Why, damnit, why?”
Why indeed.
February 24, 2010 07:35 A.M. Central Time
Mike had been up for three hours now and thankfully it was a quiet night for once. The National Guard had set up a roadblock on I-94 up by the North Dakota border to slow down the troublemakers and the punks who were trying to hijack the trucker screaming into the C.B. radio yesterday had been captured, well, two alive that is, and taken into state police custody. As Mike walked into the house he stomped the frost and muddy ice off of his boots before removing the layers of winter clothes when his wife yelled out “Breakfast honey, eggs, bacon and toast the way you like it!” Mike was somewhat tired after two days of adventure and keeping that truck and reefer ready to go should his company ever figure out how to pay him back and keep his unit fueled up yet relieved to be home where he could protect his wife and insure the safety of this little farm he had acquired after years of hard work and honest living. “Honest living, huh” he thought to himself as the radio began blaring with the local host saying “Buckle up America, the ride is about to begin. This is KBRF 1250 AM turning programing over now to the USIA and the Dawn in America program with important information from now until the President’s briefing at 8 A.M. central.”
Mike looked at his wife and said it as plainly as us Midwesteners could: “What the hell is this crap?” With that his wife started to tear up and Mike said quickly “No, No, No honey, not the breakfast, this crap on the radio! I’m sorry, I know you’ve been stressed out!” She whipped back at him with that ‘eye’ that men fear and said “Well now mister, that’s better. You know I’m stressed out too. I’ve been bottling and canning and filling up water jugs and sandbags working my butt off with you side by side. And you have YET to explain to me as to why we are doing all this!” Mike assumed the whipped puppy dog position his face staring down into the egg yolk and replied politely “I think we’ll know in about twenty minutes sweetie. Sorry I snapped at you.” She nodded, hugged him and then walked into the living room to settle down in front of the television to find some sort of coverage as to what was going on.
“Mike” she yelled out emphatically, “You won’t believe this. This Dawn in America stuff is on every channel, even ESPN and the Weather Channel!” He couldn’t resist the chance to lighten the mood and yelled back “HBO Latino and The Playboy Channel too?” That triggered the classic “Very funny mister, get your tail in here after you clean the dishes up after breakfast, now I’m worried!” she yelled back. Just as Mike finished breakfast and started to wash his plate the doorbell rang. “I’ve got it his wife yelled” and before Mike could yell “NO” and grab his shotgun she had opened the front door. “Mike, don’t shoot, it’s me Jack” and sure enough it was Deputy Monckton shaking snow and ice off of his coat in the entry way to the home. “Jack, are you nuts? Aren’t you supposed to be on duty now?” Mike asked. The deputy explained that his shift ended at eight and he wanted to watch the big announcement because as he put it “the life of the Sheriff’s department is going to get rough” with what ever the President said. “Have a seat over there, Jack, do you need some coffee?” Mike’s wife asked politely. Jack nodded and asked for black with sugar and she headed off to the kitchen. It was now 7:50 A.M. and the anticipation was building but the disgust for the almost comic like happiness on the teleivsion started to upset Mike and Jack. “Sounds a lot like the AFRTS crap from ‘Nam, doesn’t it Jack?” Mike asked. Deputy Monckton bristled and started a diatribe about how every time they lied to them in the field about how wonderful things were they got into the fire fight of their lives. Then he said something profound to Mike that he and his wife had never considered; that the fire fight was about to begin again because these clowns didn’t have a clue what they were doing.
February 24, 2010 8:55 A.M.
Tom woke up with his wife Sandy to find that she had elected to go to her Mom’s and check on her this morning and would come home some time this afternoon. Normally Tom would not be alarmed by this fact except that he had just heard that the Executive Orders were about to be issued and somewhat panic stricken his mind started to race. “What if they set up road blocks? What if she’s driving drunk? She didn’t take my car I hope. What if she didn’t check her gas? Oh now, does she have enough cash? Oh God, what do I do if she’s in trouble? What do I do?”
Not being the advanced planner he thought he was, he grabbed the phone only to find out it was dead. “Oh my God, the government has cut the lines. They are coming to get me. What did I say on the message board. Did I offend a Fed? Oh Lordy, what did I do?” and as Tom was hyperventilating into the moment his cell phone rang. It was his wife who started rambling “Honey, it’s me, Sandy. I had to go check on momma as this snow storm was a shocker this morning. It’s pretty but some idiot hit the phone pole by our house so we haven’t had phones since about 5 a.m. I didn’t want to wake you up but I’m heading over to Peachtree City to check on her while the roads are good and before they freeze up.” Tom sensing a bit of relief then realizing she was miles away said in an urgent tone “Be careful sweetie, who knows what kind of nutcases are out there.” Sandy told him to quit being a worry wart and they said good-bye right at one minute until nine. “Crap, the TV” Tom yelled and ran to grab the remote and turn on CNN for the news.
February 24, 2010 9 A.M. ET
Twenty Minutes that Would Rock The World
President Obama approached the podium with Treasury Secretary Geithner, Senator Harry Reid, and Majority Leader Pelosi and began to speak:
“My fellow Americans, citizens of the world, today we embark on a New Day of Economic Justice for All. The imbalances which have destroyed our current system of banking will be corrected to a large degree during the next thirty days. This briefing is for the purpose of informing the public via the United States Treasury Department of what actions we have taken immediately to assure the world and our citizens that this government will fulfill its obligations in full and that all citizens entitled to benefits and assistance from this nation will receive them uninterrupted. With that in mind, here is Secretary of the Treasury, Timothy Geithner to outline the executive orders that went into effect at midnight last night and with the assistance of the Legislative Branches, represented by Senator Reid and Majority Leader Pelosi, how we will come into compliance with the new regulatory oversight our nation has agreed to.”
As Secretary Geithner shook Obama’s hand and walked up to the podium, Tom, Mike, Jack and John all had the same feeling despite being miles apart and different in every aspect of their status in society. Geithner began reciting the orders which impacted his department, primarily in the banking and financial sectors but curiously leaving out the enforcement responsibilities of the IRS and ATF as to allow Americans a sense of calm. The feeling of unease the gentlemen felt at home would be amplified in the next twenty-four hours as the publication of the Executive Orders on the Internet and the resulting chaos that ensued would change America forever.

Friday, November 27, 2009

In The News Today

Home Prices Nearing a New Dip

US Will Have to Tax Consumers: Economist

Silver market analyst Ted Butler interviewed by King World News

Please click here for the pdf version of this weeks letter

Germany will buy gold soon, Max Keiser tells Russia Today

Gold council's new chairman sees $2,000 gold price next year
Cold Turkey Thanksgiving 2009

High Gold Prices: It's the Oil, Stupid

Britain Has Run Out of Money

Recession "Is Even Worse Than Feared"

Dubai Bankruptcy is a Taste of Things to Come.

FDIC Reports the Biggest Drop for Business Loans on Record

Dubai Asks For 6 Month Moratorium On Debt Obligations Posted: Nov 26 2009 By: Dan Norcini Post Edited: November 26, 2009 at 2:20 pm
Filed under: Trader Dan Norcini
Dear Friends,
Overnight news out of Dubai has sent global equity markets reeling and generated a safe haven flow into the US Dollar as carry trades are unwound and a flight away from risk occurs. Dubai has asked for a 6 month moratorium on its debt obligations, which for all practical purposes is a type of default. Needless to say, this came with little to no warning and has sent the markets into quite a tizzy.
Gold shot higher on the news and touched a record $1,195 before some light long liquidation connected with carry trade unwinding got underway. Look for it to be well bid on any setbacks in price as this sort of news is extremely disturbing. After all, we are talking about the financial hub of the Middle East. Imagine the repercussions that would occur should London have announced this sort of news and you can understand why stock markets were pummeled overnight.
Stocks have been floating higher and higher for the reasons described yesterday (increased profits due to expense cutting plus easy money and lots of liquidity) but this is the kind of news that could cut off all such rallies right at the knees. The reason – it creates fear and uncertainty, two of the prime ingredients in a selling binge. If Dubai could go under, then who or what might be next becomes the nagging question hanging over the markets like the proverbial sword of Damocles.
We are in a period in which we could experience price swings across the markets of the magnitude which will parallel those that we witnessed as the Japanese Yen Carry trade was unwound last year. Huge leveraged bets employing the Dollar as the borrowed currency have set up a situation in which billions of Dollars in one way bets are once again on the table. These idiots never learn as their greed will be the ruin of them all but unfortunately, it is always the innocent and those who play by the rules who get caught in the crossfire generated by the pond scum hedge fund community.
Be careful out there and be thankful that you own gold. Things are coming unraveled at an alarming speed. Just imagine the kind of losses that are now on the books of those banks who hold Dubai sovereign debt. Then again, that should not be a problem. The Central Banks can just print them some more money to replace those losses. Heaven help us all….
Dubai default threat rattles world stocks Nov 26 08:14 AM US/Eastern
Global stock markets tumbled Thursday on mounting anxiety over a debt default request by Dubai and tighter lending conditions in China, analysts said.
London lost 1.86 percent to 5,264.97 points in late morning trade but was suspended at about 1030 GMT owing to a technical issue.
The London Stock Exchange said it was investigating the "root cause" of the problem and would update investors when it had further information.
Elsewhere, Frankfurt dived 1.80 percent to 5,698.99 points and Paris plunged 1.89 percent to 3,737.06 points at the half-way stage.
In Asia, Beijing nosedived 3.62 percent, Tokyo fell 0.62 percent and Hong Kong closed 1.78 percent lower. Chinese shares were also hit by the prospect of tighter banking rules and worries about monetary policy next year.
New York markets is closed Thursday for the Thanksgiving Day holiday in the United States.
"We have two major factors weighing on equities and other risk markets: Dubai’s call for a moratorium on its debt repayment to May and more stringent capital adequacy requirements for Chinese banks — but Dubai is bigger," David Morrison, an analyst at financial betting firm GFT, told AFP.

Thursday, November 26, 2009

Happy Thanksgiving

Gold rush forces U.S. to clip Eagle sales

Gold price closes in on $1,200

Ambrose Evans-Pritchard: China, gold, and the civilization shift

British bank shares fall as much as 8% on Dubai debt mess

Arrogance of the Gods (The Day the Dollar Died Part IV)
05:23 by Administrator. Filed under: The Day The Dollar Died Series
by John Galt
November 25, 2009
“And Zeus gave ample plunder to their hand,
That they embark and get them to their land
With ships full-laden, even on them great fear
Falls of the Watchers in heaven who stand.”
-The Odyssey by Homer, Book Fourteenth, page 159, translated by J.W. Mackail 1905
Alas a quick note before I present the fourth entry. The proverbial “powers that be” are our collection of Gods in the minds of those married to a digital scroll of symbols and numbers flashing across their screens every day and to those unwilling to grasp the gravity of sacrificing freedom for financial security, liberty for laziness, and willing to adore false idols for the perception that these ‘men’ not deities will protect and enhance their freedoms. In this episode I shall attempt to bring thousands of years of human fascination with power into the grasp of how our willingness to sacrifice choice for security results in a situation not too much out of the reach with the actions of the elites within our financial, academic and political classes.
May you have a blessed Thanksgiving and understand that our time has been marked, our actions noted, the duty soon to be paid.
The presentation below in ITALICS is fiction……
February 23, 2010 6:30 P.M. ET
Georgia on my Mind
Tom stirred awake when the alarm on his wristwatch stirred him into a startled look around the room. “Sigh, thank God, I’m home” he said out loud then calling out to his wife “Honey, let’s talk sweetheart and I’m sorry I’ve upset you so much.” Sandy walked out of the bedroom smoking a cigarette, something she had not done since they both quit ten years ago and yelled at Tom in a drunken stupor “Okay you geek, what the hell do you want to talk about now? The end of the world? Obama having alien ears and a forked tail protruding from his butt? The local newsboy spying on us when he delivers the paper? I swear you’re a (burp) loser Tom, why the bleep am I married to you?”
Tom was stunned by this outburst then noticed she was taking another swig from a cheap bottle of wine they used to keep on the shelf for ‘those’ guests that they did not want to serve the good stuff to. “SANDY!” he exclaimed, “What in the heck is wrong with you? Why don’t you sit down and watch the national news with me tonight, let’s get close and see what is going on so we can decide what to do.” Sandy looked at him, her eyes totally glazed over mumbling “What to do? What to do? What to do? Hell boy, you ain’t got a clue as to what to take for lunch day to day and you are worried about some slicked up steaming pile on the TeeVee says about a situation that is so fake it isn’t even funny? You want me to follow you, Mr. Wimpy Boy? The Man with a plan from the internet because you read three articles on the 2012 movie? Just stay out of my way while I find another bottle, I’m going to drink until I pass out and you can eat your damned Spaghetti Freaking O’s by yourself mister.”
Tom sighed loudly and looked at her with those big puppy dog eyes and started to plead, “Baby, if I’m wrong about this, I’ll leave you alone. But if this situation is as bad as I saw at WalMart this morning, we should get ready for some bad times. Please, sit down beside me for just a half hour, we’ll watch whichever news show appeals to you.” Sandy put the empty bottle on the floor of the hallway, stumbled over to Tom’s lap and grabbed the remote control, switching around until she found Katie Couric on CBS news which was just starting. Sandy blurted out “This wench has it going on you know. She threw Tom Cruise off her sofa!” Tom sighed again, hugged her waist and watched with great interest as the news began.
CBS news sounded hauntingly like the FEMA updates, plain, bland and with repeats of information until about fifteen minutes into the show when Tom and his intoxicated wife noticed there were no commercials for Viagra, bladder issues or tingly leg syndrome. Sandy said “Okay know it all, what is this scroll at the bottom and top of the screen?” Tom looked and the top scroll was in Spanish much to his surprise and the bottom one in English stating that the broadcast was “cleared” by the Department of Homeland Security and the Bureau of Economic Oversight. “Honey, I have no idea, this is weird” he replied to her. Katie then read a story about the hardships of the inner city during this economic recession and how the government under Obama’s leadership was ending discrimination against the poor and other economic minorities. “SSDD I guess eh baby?” Sandy said in her stupor. Tom just nodded and started to worry as this was weird that all commercial television, no matter the channel he switched to, did not have any commercials. Perhaps things will be better in the morning, if he could just get Sandy to pass out he thought to himself.
Fergus Falls Down
February 23, 2010 5 P.M. CT
Mike’s shirt was soaked after several hours of chopping wood, fixing gaps in his barbed wire fence, checking locks and securing his semi. As he popped the cover off his face to drink some hot tea from his Thermos, a sound he was shocked to hear appeared in the bitter winter silence, that of his cell phone ringing as if never had owned one before. Hesitating slightly he opened the phone to check the number and sure enough it was his dispatcher finally calling him back. “Mike, are you home, I hope?” the voice on the other end sputtered out. “Larry, I’m good. The load is secured. And if you’re asking me if I am delivering tomorrow, you’ll have to guarantee that I can turn around and come home” Mike replied. Larry hesitated and spoke slowly, as if not to upset his driver, “Mike, I was planning on reloading you at Hormel with an emergency shipment for Dallas in the evening. I really need this one.” Mike was stunned. He took a deep breath and told his dispatcher of three years in a very slow speaking Midwest intonation “Larry, I’ve known you for several years now. I can not use my credit cards, my fuel card and I don’t have the cash for the trip. You’re asking me to leave my wife for a week or more by herself in a small town now surrounded by deputies guarding against God knows what AND you and the company have no damned idea on how or when you’ll pay me. If you were in my shoes, just what the heck do you think the response would be? I’ve got about a third of a load of frozen pork and no guarantees I’ll get paid, protected or anything so if you think I am going to Duluth tomorrow without being paid, you are nuttier than that FEMA broad on the radio every hour!”
Larry was somewhat shocked at this tone of voice and even more so when Mike hung up. But the reason the phone was disconnected would not be known to Mike or Larry for weeks to come. A driver in a tanker truck was run off the road by a group of thugs and took out the cell phone tower about three miles north of Mike’s house. Little did anyone know that Fergus Falls Minnesota and many other small towns would soon fall prey to the scum of the earth as the weakest links would be picked off first.
For the first time in Mike’s life since Vietnam, he took the night shift for guard duty. He prayed hard for his son in Afghanistan and wished he was home. Mike knew their lives were changing but the consequences of years of living off of the fat of the land had distorted this small town’s perception of the big world that Mike knew all so well from his trips around the country. “Fergus will fall as America is falling” he thought to himself.
As darkness enveloped his town and the bitter cold set in, he longed for the days of old when neighbor could trust neighbor. That was the first victim of this week’s events and as the shortages began, the victims would multiply.
February 23, 2010 7:10 P.M. ET
Even my wife was impressed with dinner tonight. We had agreed after a long talk to relax, take in the information and just relax. I had cooked two of the steaks in our freezer that I had started marinating in Italian dressing the night before and the smell on the grill just had to make the neighbors envious as there were so many snowbirds down here already escaping the bitter cold of up north and not used to the smell of char grilled ribeyes in February unless they were regulars down here. We cracked open a bottle of wine we had been saving since our wedding day for a special occasion and we figured that with steaks, baked potatoes on the grill, vegetable kabobs and some fantastic garlic toast from our local bakery that the end of our nation as we knew it fit as a special occasion. After all that and the last drop of wine was consumed, we needed to walk it off and despite a brisk sixty-one degree evening, we decided to head over to the Ringling Bridge.
February 23, 2010 8:00 P.M. ET
The new Ringling Bridge opened years ago lacked the character of the old draw bridge but for our little community, it was a fantastic and brisk walk up and down with the ‘largest hill’ in our area plus the traffic actually stopped backing up into downtown Sarasota once it opened. As my wife and I parked the care over by Marina Jack’s we walked down noticing the flashing lights of police cars at the base of the bridge and wondered if there was a bad accident or what could have happened now.
As my beautiful wife and I approached the southern sidewalk to the bridge a local officer approached my wife and I with his flashlight pointed in our faces and what appeared to be his other hand on his pistol. “What can I do for you two?” the officer asked. I replied we were just going for our nightly walk on the bridge like we have for years now and wanted some fresh air. “Do you have some identification on you, both of you please?” he asked somewhat insistently. I handed my license over to him and explained my wife doesn’t carry her purse on her when she walks as he basically ignored my words and walked over to the squad car, now with another officer watching us closely.
“Sir, I notice on your records you have a firearm in your ownership and a CCW, are you carrying now?” he asked with the pistol now drawn but pointing down to his side. “No sir,” I replied, “I do not carry when I walk around here, I’ve never had to.” The officer seemed satisfied with my reply and then pointed us back towards the parking lot and stated firmly as he holstered his weapon “All of the barrier islands in Florida are now closed I am afraid. We are under strict orders to restrict access out here because of fears of retaliation.”
“Retaliation?” I thought to myself and apparently so did my wife as she looked at me somewhat worried. “No problem officer, we’ll just head back home” I said to the officer as I slowly turned my back and walked with my wife back to the car. Once we were pulling out of the parking lot and heading home we noticed the marina had private security guards setting up for the night, another new feature and that prompted her to ask “Retaliation against who or what?” I told her I did not know and we headed home as I just had to get on the message boards and find out what the heck was going on.
February 23, 2010 9:40 P.M. ET
The wife, normally whining about my time talking to my friends on the phone and online said she was doing the same to try to figure out what was happening. Her first inquiries yielded a response from her friend online from Australia of “sucks to be you” or worse words to that effect. The interesting responses I saw on the message boards I frequented ranged from the bizarre to the sheeple and really failed to shed any light except that some other members noticed an upgrade in the law enforcement protection around the affluent neighborhoods in their towns.
As the banter and speculation went back and forth via email and messages alike, I tuned into CNBC and Bloomberg to see what the various opinions of our financial markets just might be for the future. CNBC-Asia actually looked relatively normal except for the scrolls at the bottom with the “ALL FINANCIAL MARKETS CLOSED UNTIL FEBRUARY 25, 2010″ over and over again with some program announcements. Bernie Lo had Jim Rogers on tonight at 10 p.m. Eastern and I could not miss this interview as I figured it was the “see I told you so moment” of all time as Singapore looked like the new financial center of the world as New York just imploded. CNBC in the United States was a different story entirely. It appeared that Cramer was sweating more than Coach Andy Reid of the Philadelphia Eagles trying to choose toppings at a sub shop and Kudlow looked as if his dog had just been hit by a dump truck. They were both trying to justify a cause for hope by parsing a speech from President Obama and speculating on just what Ben Bernanke would be saying tomorrow. In the mean time Rick Santelli upset both of them by stating that the U.S. Dollar was the equivalent of burnt toast at the now bankrupt Waffle House in the Southeastern states. Rick was in rare form tonight as he then launched into an attack of the ‘God Complex’ the central banks seemed to exhibit thinking they could manage capitalism and investors instead of letting the market do it’s job. When Cramer tried to defend the G20 meeting, Santelli cut him off and said the following which stuck in my mind from that day on:
“These arrogant fools have been acting like Gods for years now and guess what James? They have destroyed the American model for capitalism. You’ve made your money. I’ve made mine. But for the average slob on the street, they are now slaves to the dictates of these megalomaniacs who think that they are above every aspect of human society and our Constitution. You and your kind make me sick. It really doesn’t matter what you say now Jim, the markets are dead and you helped kill them.”
“Honey, are we out of port?” I yelled as she walked to the kitchen.
February 23, 2010 10:59 A.M. Hong Kong Time
Interview with a Vampire
Bernie Lo: “Jim it is good to have you back and I’m sure that with only the Chinese internal markets open, you have quite a bit you would like to discuss tonight.”
Jim Rogers: “Good morning Bernie. To say this was not going to be easy to see as a possibility of happening would be a lie.”
Bernie: “I must ask, do you think we will see the North American and European markets open again before March or April?”
Jim: “Absolutely no later than March. If they fail to open their equity markets by the middle of March you might as well just hold a massive liquidation sale. The United States has to absorb the pain they have postponed and insure that functioning capital markets are returned to operation soon or the rest of the world will just circumvent their currencies, debt and banking systems. It would be tantamount to the sinking the Titanic and selling more tickets to board it unless they open the markets up and allow capitalism to repair itself.”
Bernie: “So what happens to other equity markets as they re-open to international investment? Will they not have to impose limits or….?” (Interrupted)
Jim: “Centralized economies and banks will impose capital flow restrictions. I imagine the Asian governments will restrict the amount of withdrawals to insure their banking systems do not collapse but the silence has been deafening. I imagine everyone is going to follow the American lead but we have to wait for Bernanke and his merry band of idiots to speak tonight.”
Bernie: “I have to ask, what becomes of the dollar, a subject we have discussed many times and the price of gold?”
Jim: “That really depends on what you are pricing gold in. Gold in United States dollars will be unattainable at any price now inside of North America barring currency controls by Canada and Mexico and neither of those nations can afford the risk of alienating the Federal Reserve, especially Mexico. The price of gold in Euros should top out around one thousand to two thousand Euros only because of the exposure of ECB to dollar based debt and investments by the continent. The United Kingdom might as well join the European Union now because the Sterling is useless except for wadding. The Asian currencies, ags and precious metals are the place to be and if you really push me, the price of gold in U.S. dollars will open back up well over two thousand dollars per ounce if the markets are allowed to trade. The dollar itself though is no longer a functional measure of trade nor investment and can now be openly dismissed as a reserve currency.”
Bernie: “Then what exactly will function as the new reserve currency for world trade? I mean, uh, Jim, what you are saying is a total shock to the system and will change the nature of foreign investment activity for years to come.”
Jim: “We’ll know when Bernanke speaks. But if I am the ruler or President of a nation, the reserve currency of choice is the primary asset or commodity I have on hand. Many nations started to hoard precious metals, oil and base metals the past four years. I think they set the tone no matter the decisions of the G20 yesterday. As I told you a few years ago, farmland is investment number one if you live in the U.S. now and for the rest of the world the decoupling that many said would not happen will have to happen.”
Bernie: “With that, I must say good night Jim and thank you for another enlightening discussion.”
I did not notice it until my wife screamed at me. There was a glass tipped over with port wine soaking into our carpet. She must have been yelling at me for ten minutes.
“I’m sorry honey, I’m in a little bit of shock. Remember all those bad things I said that could happen? Well, they have. Let me find out what the plans are for the local governments online and statewide. We may have to hit the road on very short notice.”
February 24, 2010 12:21 A.M. ET
I’ll never forget the email I received in answer to my question about the bridge incident. It was from an old retired friend from the local police force and he said it best:
Are you an idiot or something? What are you still doing in town? The reason they closed the barrier islands was to prevent attacks against the homes of the bankers and investment community who created this crap hole of a disaster! They are going to do all they can to protect those clowns even if it means half the damned town burns down. Do you honestly think they will let riff-raff like you get out there on the Key with the likes of Springer and King? Not to mention all the scammers who screwed us over out of our retirements and future?
Damn. It made perfect sense now. The police were following orders and I was willing to bet that other areas like that were well guarded. Which meant my home, my cars and my “stuff” was pretty much on my own. With that in mind, I muted the television, tucked my .45 into its holster and went outside to our driveway to move my pick up right up to the bumper of my wife’s car in the carport and to scout the yard. As I searched with a flashlight, I drew my pistol at the first noise, only to see a raccoon scurry into our neighbors back yard. With the deep exhale, I started to head inside when in the distance several loud cracks rang out. It sounded like firecrackers but there was no way anyone beside those who held gold or Swiss francs would be celebrating.
I ran back inside, locked all the doors, put chairs from the dining rooms under the doorknobs and in front of the glass doors then checked all the windows. With that I went back to the computer to see what the Chinese markets were doing. I slid the holster off my side, put it up on my desk in my office and logged into my Bloomberg terminal, hoping for a news and market update. The scroll at the bottom of the screen told me that I would not get much sleep tonight:
Coffee or port were the only questions I had left now. The die has been cast…..

Monday, November 23, 2009

Sunday, November 22, 2009

Part #3

“I Have Been to the Fields of Gettysburg” (The Day the Dollar Died Part III)
23:55 by Administrator. Filed under: The Day The Dollar Died Series
by John Galt
November 21, 2009
The following story in ITALICS is what some like to call speculative fiction, what I like to call a potential scenario for the culmination of thirty-six plus years of blunders by an incompetent group of bankers hell bent on completing their one hundred year plan of world financial domination. Of course their inability to grasp or destroy the concept of nationalism and individual identity will prove to be their ultimate undoing, but you can not tell them anything, so we all get to suffer while they learn.
“Citizens of the United States, citizens of the world, I wish to bring you a message tonight of hope and dreams and most of all assurance. Decades ago one of my heroes uttered those famous words of ‘the only thing we have to fear is fear itself’ and to that theme, I too, like Franklin Delano Roosevelt call now on the citizens not just of the United States but of the world to begin a move to restoration, beyond the call to change our ethics and to begin to undertake an immediate and drastic course of action to preserve and enhance the future for billions of people.
We have assembled in Geneva to initiate a practical and realistic course of action to correct the errors of previous administrations, of prior nationalist xenophobic ideals, and to end the cursed reality of a system of capitalism which has failed because the participants within the economy refused to shoulder the responsibilities inherent with the great power and wealth the people granted them. The expansion of our ideals was fruitful, beneficial and helpful to establishing a global expansion far greater than any in the history of mankind, yet my powers and those of our central banking system were immediately tested one year ago as this very expansion collapsed as the illusion of wealth isolated within the purview of the few deprived the necessary capital to continue economic growth. This shall no longer stand. The governments of the world can no longer stand idly by and allow the minority the great responsibility of the engine of growth to become restricted opportunities for their own benefit at the expense of the citizens of the free world. Tough decisions have been made in these meetings; decisions which will impact every man, woman and child for a generation forward and impose great stresses on those unwilling to make the necessary sacrifices to preserve our nation, our freedom, and our participation as the leading light of freedom in the governance of our planet.
There are those in my nation which will demand immediate redress and accuse my administration and the Federal Reserve of abandoning our principles, our ideals and our Constitution. The future for the United States demands that the decisions here to be implemented immediately and when I depart Switzerland today, the process of legal acceptance of the World Currency Treaty of Geneva will be immediately implemented via Executive Order and those aspects requiring the U.S. Senate’s approval sent immediately to Majority Leader Harry Reid. Failure to pass and execute every aspect of this treaty is not an option. The divisions our decisions will create will not receive an immediate embrace by the American business community but that is a price we must pay for the errors of our way. In my capacity as leader of the United States and free peoples of the world, I shall do what I must to preserve the Republic and to insure we survive as a nation united.
For I have been to the fields of Gettysburg and seen what division, distrust and dissolution can do to a nation, and I wish to be remembered as a modern day Lincoln, doing what must be done in the name of God, Country and the World to preserve our nation and insure that the intentional community is not shattered by our malfeasance. The American people and our economic might will make good on all of the debts owed to the world. The American people and our economic will shall control spending and abide by the demands of the international community. The American people and our corporate citizens will absorb the necessary oversight by all world bodies agreed to in this meeting and that of the November 2007 G20 Cape Town Accords and the November 2008 G20 Washington Financial Systems Accords. Charmain Bernanke will issue a paper on Wednesday, February 24th at precisely 6 p.m. Eastern Time to outline the changes to the domestic financial system and prepare for the re-opening of our financial markets at a later date.
In the interim, we will proceed with actions to preserve the health, safety and national welfare of our citizens while initiating the undertaking of these agreements. To quote another hero of mine, Martin Luther King Junior:
‘And another reason that I’m happy to live in this period is that we have been forced to a point where we are going to have to grapple with the problems that men have been trying to grapple with through history, but the demands didn’t force them to do it. Survival demands that we grapple with them.’
Under the leadership of our Legislative branches, our people and my administration, this time and once and for all I assure the people of the United States and the free world that we shall overcome.
Good night and God Bless America and the World.”
February 23, 2010 12:21 P.M. ET
As the bartender at the country club turned the television off then smashed the remote against the wall, his next words were not the revolutionary explosion in patriotism nor compliance President Obama probably would have expected:
“Free Drinks until we run dry!”
Alas, it was not Patrick Henry nor Ben Franklin but considering that everyone in the room, including some of Obama’s supporters, all felt like we were just sold out, it was only a matter of time until anarchy began to reign supreme. The club my boss was a member of was quite exclusive but not isolated from the reality of our community. The sirens were blaring constantly in the area towards I-75 and the helicopter that serviced Sarasota Memorial Hospital seemed extraordinarily busy the entire time we were playing but this brief vacation from reality ended with President Obama’s words.
“John”, my boss spoke softly, “here’s a toast to you and your family. May you survive this nightmare and thrive on the chaos which follows.” He raised his glass, drank a shot of bourbon, poured another one from the bottle the bartender dropped off at our table then handed me two one hundred dollar bills and left with the bottle in his hands. “Uh, I don’t think you should try to drive sir, I mean I appreciate all of this but…” and before I could finish he cut me off and yelled back into the silent room “Who cares? What are they going to do, FINE ME WITH THE DEAD MONEY? The hell with everyone and this government.”
He walked out the door and barked the tires on his Cadillac Escalade out of the parking lot and away forever.
I went back inside, gave the barkeep one of the Benjamins, thanked him and he handed me a bottle of wine saying “Your wife might need this.” I nodded, headed to my car and proceeded to look for a gas station that was open. I figured I had best top things off while I still had some cash on hand because who would know what was the consequence of today’s speech outside of D.C.
February 23, 2010 1:13 P.M. ET
The Sunoco station on U.S. 41 had all of the pumps covered with bags but the store, amazingly enough was open. I elected to go on inside, buy a six pack of misery juice and converse with the young man who I had come to know since he bought the station five years after emigrating from Pakistan. Tran, as he liked to be called was somewhat nervous but also enjoying a banner day of sales being one of the few stores to be open and gambling by making manual credit card slips and accepting cash of course. I noticed the empt shelves everywhere and asked him just how he made it. “Easy,” he said, “I held inventory off site a month ago waiting for a hurricane or a day like this.” I had to laugh but then it hit me to ask him, “Does that include gasoline?”
Tran nodded and said something fascinating, “John, for you I do this. It will cost you $5 per gallon which is the new minimum legal price but I can sell it to you. You have to accept this paper and keep it in your truck until you get home.” He scribbled my name on one line and checked a box titled “Civilian Emergency Services” and then shoved it over to me asking me to sign it. The FEMA moniker at the top of the page looked almost false but the date and title froze me in my tracks:
FEBRUARY 22, 2010
Maximum Purchase Limit: 20 Gallons
STATION ID: 1137756-34231
Without hesitation nor caring about the repercussions, I signed it with an illegible signature, handed him the other one hundred dollar bill that my now apparently former boss handed me and went to the pump he directed me to so I could get that 20 gallons in my pick up and go home. As I put the handle back on the pump and covered it back up with the bag as instructed, an ill feeling started to sink in to me; this document was issued on a Sunday and since when could they get this out to so many stations so fast unless this plan was already in place!
February 23, 2010 2:30 P.M. ET
I walked in the door of my home, dropped my golf clubs, found my wife and gave her a long tight hug with a tear in my eye. She asked me “What’s wrong honey?” and the story of this day was told. But this day was far from over.
Fort Fergus Falls
“Break 9, break 9, is there anyone out there. This is John Donaldson of Whittaker Trucking out of Des Moines, IA and my rig is being shot at by unknown attackers at mile marker 56 on I-94 southbound. Anyone in Fergus Falls out there? Help please, help, I am being attacked. For God Sakes is anyone out there?”
The citizens band radio rang out again with a call for help. Mike had only been home for what seemed like a few hours and his base station was ringing with calls for help. He bypassed calling 911 and called his old pal Deputy Monckton directly on his personal cell phone. “Jack, do you have your CB on?” Mike asked before the deputy could even say hello. The deputy politely replied that he did not and Mike got somewhat excited and told him what he had heard. “I’m on it” the deputy replied and as the deputy put the phone down he could hear him calling for backup before he hung up. Mike was exhausted but now was not the time to sleep in his mind. He put his winter gear on, grabbed some chains and locks, wrapped them around the doors on his trailer and then backed the truck up against the wall of his home so the doors could not be opened.
His wife, looking at him like he was insane heard Mike snap like the old Sarge he used to be in Vietnam “Sal, you start finding anything that can hold water and start filling it up. Use totes, buckets, I don’t care and I don’t care if we put it in the garage and it freezes up. We’re going to need it!” Mike then grabbed a pistol, loaded it, put it in his pocket and went out into his barn to start chopping wood.
He didn’t stop until six o’clock that night, tears streaming down this tough vet’s face as he finished tying off each bundle.
Take Your Pork and Beans and Stick it Mister
Tom sat in front of his television after the Obama speech from Geneva in stunned silence. Sandy looked at him and said “See, I told you they had a plan and we would be fine. Here you are buying all kinds of fatty crappy foods we’ll never need to eat and end up donating to some food bank and the President has it all under control. You’re an idiot honey and if you think I’m going to sit around drinking bottled water and pork n’ beans all night you can stick it mister!”
Tom was not exactly what many would call a “Type A” personality but he had hit his limit with the lack of sleep. “Woman,” Tom yelled, “I was just trying to take care of this family and protect you from the unknown. If you think this is over, then why in the Sam Hell is your beloved QVC and Oprah still off the air?” Sandy had heard enough, uttered some very terse curse words and went to the bedroom slamming the door and locking it while screaming all of the way. Tom slinked back to his chair after putting the cans up in the pantry in a somewhat organized manner and returned to the television to see what was new. By now it was 3 p.m. Eastern Time and that meant the start of the new hourly news and information reports from FEMA and the Voice of America Domestic Services. “It beats MSNBC” he thought to himself, as he drifted off to sleep to the melodic sounds of Yankee Doodle in the background.

Jordan Roy-Byrne: Gold isn't even close to being a bubble

Obama' s feeble dollar sparks a new goldrush

Bets rise on rich country bond defaults

Fed under fire as public anger mounts

Choice of money leads humanity to liberty or totalitarianism

Vietnam hastens to import 6 tonnes of gold

Hey, diamonds say, we want to be money too, like gold!

Saturday, November 21, 2009

The following comments may frighten unprepared liberals.
Conservative Discretion Advised.
(Thanks Arachnid )

Jim Sinclair’s Commentary
The following is fiction, but based on fact. As a result, this outline may offer a better prediction of the future than what is generally available.
In my opinion it is worth your time for review.

The Day the Dollar Died by John Galt Part I November 18, 2009

The following story in italics is a potential fictional time line for the day the dollar died. I hope not to instill fear or loathing but to give everyone some perspective on a POSSIBLE outcome which does not really take much of a reach to come to any conclusion. Despite popular belief and promises from those who wish to rob you of your savings and investments, the collapse of the dollar might just be an event measured in hours, not days as their control is not what it seems…..
Mike was less than an hour from home in Minnesota after dropping his load off in Fargo but knew he needed to top his tank off this Sunday evening to insure his rig would make it home. He pulled into the Petro Truck Stop just outside of Fargo and hopped out of the cab into the bitter twenty below temperatures which he could not believe had already hit at ten o’clock at night. He slid his fuel card into the pump waiting for the next prompt when the “SEE ATTENDANT” message flashed in the screen. He blustered, figured it was another card problem and whipped out his Master Card and slid it in after the pump reset and again the “SEE ATTENDANT” message flashed up. “What the hell is going on?” he thought to himself as he wandered into the long line of drivers boisterously yelling at managers and clerks alike.
Tom finished up his shift on the docks at the Nestle warehouse in Hampton, Georgia at exactly 11 o’clock at night and decided that because of the scuttlebutt he had been reading on the message boards, it may not be a bad idea to pick up a few cans of food and some toilet paper at the local WalMart Super center. Even though it was a Sunday night, they were always stocked and it was just five minutes out of the way to his home. As he walked inside the store, his mouth dropped. It looked like the day after Thanksgiving sale with every register open and ten plus people deep at 11:30 p.m. “Oh my God!” he gasped as he walked in grabbing the last shopping cart with the wheel that was half locked up. As he walked as fast as he could to the aisle with the paper goods, he looked at all the shelves then noticed the clerk who looked stunned himself. “How in the SAM HELL does WalMart sell out of Toilet Paper son?” he screamed at the eighteen year old kid. “Sir, I don’t know what is going on. Is the world ending? I’m a little freaked out!” the clerk stammered. Tom realized that he was not to blame and as he calmed down said to the kid “Son, I don’t know what is going on either. It must be an ice storm on the way. Are you folks getting another truck soon?” The clerk said in a very low voice “Sir, I think there are two coming at 2 a.m. I would wait here if I were you.” With that information Tom slinked outside to his car and called his wife at home just before midnight to tell her he would be staying to wait on the WalMart trucks.


John Galta: American Hangover (Day the Dollar Died, Part II)

Gary North: Gov't Debt Default: How (Not If) Will It Happen

What Has Government Done To The Dollar

Commercial Real Estate Reality Check

What If The Foreigners Stop Buying Our Debt?

Friday, November 20, 2009

Glenn Beck and the Dollar Carry

“There’s no doubt in my mind that we’ll have
a mania in gold. And because the gold and
especially silver markets are so tiny, the
rush into them will be like trying to push
the contents of Hoover Dam through a
garden hose. Our positions will go
absolutely ballistic.”
— Doug Casey, September 2009

this interview with Robert Kiyosaki

World economy setting itself up for a bigger bust, says Marc Faber

UK proposal to ration carbon usage on an individual basis

Sunday, November 15, 2009

This is a Must read article.

If You Thought the Housing Meltdown was Bad...

Jim Sinclair’s Commentary
Yra Harris shares his genius with us. I
consider his summation all you need to
know to be right up to the minute of
what is real out there. All else is prattle,
blather, and simple nonsense.
It is all here.
Not only can Geithner speak Mandarin
and Japanese, but he can also evidently
moonwalk as well as Michael Jackson.
It seemed on Thursday that Geithner
was trumpeting the insertion of the phrase “market oriented exchange rates that reflect underlying economic fundamentals.”
Unfortunately for the Treasury Secretary,
the Chinese had not let this desired phrase
to be signed onto. Hu Jintao the Chinese
president would not allow it to be entered
into the final memorandum.
This was yet another slap at Geithner which
will force him to do more back stepping than
the late Michael Jackson. Not only did the US
fail to get a discussion about currency floatation,
but the USA was widely criticized for inflating
asset bubbles with their low interest rate
policies. The US was then hammered on the
lack of a free trade policy. Even Mexico jumped
on the US for its incipient protectionism.
This was not a successful meeting for the US
and we can only hope that Obama comes off
better on his trips to China and South Korea.
President Obama’s speech in Japan was met
with general acceptance and deemed to be
constructive for US – Japanese relations.
The Korea/US free trade agreement still
hangs in the balance as Congressional
Democrats prevent its passage. This is causing
more embarrassment for the President on his
Asian tour.
Geithner and company have to do less posturing
and more negotiating if the US is to be seen as
a leader on global economic issues.
Up to this moment this presidential trip has not
gone well, and we believe it will bode ill for the
Until the Fed starts removing the stimulus, the
US will continually be viewed as a serial
bubble blower.
There was a story on Bloomberg today
suggesting that the Treasury was going to
push for TARP to be extended, so we have
even more evidence of the administration’s
dedication to continual use of the liquidity
There is simply no desire to reign in liquidity
and when Obama arrives home he has
promised a full-blown White House conference
on job creation.
We see continued dollar weakness and further
curve steepening.
More importantly is that U.S. leadership is seen
as deteriorating as they fail to take the lead on
free trade.
The equity markets will like the continued
effects of the global carry trade still maintaining
its robustness.
We commented in Friday’s piece about some of
the reversal action we saw on Thursday and
noted how the gold and Aussie dollar reversed
off highs and wanted to see if the reversal action
was sustained. Friday we received our answer
and it was unequivocally a one day event as
the Aussie especially rallied on Friday, going out
on its high. Gold also turned and rallied most
of the day, also going out on its high.
We cannot stress enough that economic models
are inherently flawed as a trading indicator
because they fail to take into account the market
ramifications of political missteps. That is why
we continue to iterate that 2+2=5 is also a
beautiful thing and why we give greater
credence to the analysis directed by political
The impact of the global recession is met by
domestic policies and as long as this holds
true all the G20 meetings and APEC take
a back seat to the needs of the political nation-state.
Congress will do what it needs to do to ensure
its re-election. China will do what it needs to
do to make work for the millions displaced
from its rural economy. This thought process
will continue to drive our trading views, of
course relying on the technicals to spot
breakouts both up and down as the soundest
technique of risk management.
We also look to what we have referred to as
negative divergence, which is when markets
react contrary to the fundamentals of the
We saw this by the close of Friday when the
long end of the debt markets rallied even
with the dollar weak and the carry trade
back in full force.
This catches our attention, as we know
the underlying fundamentals of the DEBT
markets are terrible as the continuing
abundant supply weighs heavily.
We will be attentive to checking resistance
levels to see where the strength ought to ebb
but with retail sales and the empire state report
out today we hope to get a good test of resistance.
We know that the long end of the DEBT market is
viewing deflation as a greater threat but at some
point that will have to turn against itself as the
Fed and Treasury begin to panic.
That is what gold and the dollar has been
We look for the debt market to eventually
paint a similar story, especially when its
major creditors have so derisively received
the U.S.

Saturday, November 14, 2009

Check this chart out...

Jim Sinclair’s Commentary
Here is something else that will only be reported

through YouTube and cell phone pictures. Don’t

look for it on CNN or F-TV
The last 2,000,000 person march on Washington

will never be in any history book. Remember

what we said about the need for armed, trained,

personal security to OTC derivative dealers?
God help Greenwich, CT if these people find

out what populates it.
Trillions cannot buy you happiness or longevity.

Maybe Madoff prefers being chased by Big Bad

Tyrone over his investors.
Protesters Plan Huge Anti-Goldman Rally In

Washington, DC Joe WeisenthalNov. 13,

2009, 10:59 AM
Following Massive Showdown in Chicago…
Hundreds of Taxpayers to Converge on

Goldman Sachs DC Headquarters Monday
National Mobilization Continues to Demand

End to Multi-Billion Dollar Bonuses at Bailed

Out Banks and the Too Big To Fail Doctrine,

Calls for Congressional Action Now
Washington, DC—On Monday, SEIU President

Andy Stern and hundreds of taxpayers will

converge on the Washington headquarters

of Goldman Sachs to demand an end to

multi-billion dollar bonuses and the Too Big

To Fail Doctrine and call for immediate

Congressional action on real financial reform.

This is the latest in a national mobilization

launched last month as 5,000 taxpayers

from 20 states converged on the American

Bankers Association convention in Chicago

to demand Wall Street and big banks stop

fighting reforms that will protect our families

from the next crisis.
As part of Monday’s event, Public Citizen will

release a report analyzing how much the

bailed out banks and the financial sector is

spending in Congress to block financial reform.
WHAT: Hundreds of taxpayers and

community leaders to converge on the

Goldman Sachs Washington, D.C. headquarters

to demand an end to the Too Big To Fail

doctrine, request that their projected $23

billion in bonuses and compensation go to

foreclosure prevention programs, and

call on Congress to take immediate

action on reform.
WHEN: Monday, November 16, 12:00

WHERE: 101 Constitution Avenue NW;

Washington, DC (off 1st Street NW)
WHO: Andy Stern, President, Service

Employees International Union More…

The rumor about tungsten filled bars manufactured by the US has been floating around for a while. The timeline certainly makes sense. All I know is a huge scandal is coming. There is way too much demand for the limited supply of gold at current market prices.


Jim Sinclair’s Commentary

Here is Martin Armstrong’s latest.

GOLD $5000+ 11/11/09

Wednesday, November 11, 2009

Every phone call,

email and internet

click stored by '

state spying' databases

UK: Financial Mess Isn't Even at the End of the Beginning

Jim Sinclair’s Commentary

I thought you might like to read the New York

Stock Exchange Midday Report to listed companies.

Please pay attention t the last note with the smaller

dot before it.

Apparently management has not yet realized that

equity strength is a direct result of the dollar’s

poor action as well as a few trillion in liquidity




DOW 10,275 (+27 points), S&P500 1096

(+3 points), Crude $78.85/barrel (-$0.20)

MARKET DRIVERS: {3 Drivers today: 1)

“Fed-speak”. 2) New lows for the dollar 3)

Strong Chinese economic numbers…}

Several Fed officials yesterday, (including

Dallas Fed President Fisher last night),

talked about either the lack of inflation or

implied that monetary policy will remain

easy for some time. Predictably, the Dollar

Index is hitting new lows, commodities and

commodity stocks are again up.

These days, we watch Chinese Industrial

Production as closely as U.S. Industrial

Production…the Chinese October IP was

up 16.1% (a 19-month high). Japanese

Machine Orders were also up over 10 percent..

UPS CEO, Scott Davis, told Reuters that volumes

will turn positive next year as the economy

improves, and that he will increase shipping

prices as well. Fedex also announced that

they would increase prices earlier.

Gold has jumped to another record

high. (What else is new…)

Barrick shuts hedge book as world

gold supply runs out
Global gold production is in terminal

decline despite record prices and

Herculean efforts by mining companies

to discover fresh sources of ore in

remote spots, according to the world’s

top producer Barrick Gold.
By Ambrose Evans-Pritchard, International

Business Editor
Published: 7:20PM GMT 11 Nov 2009

Aaron Regent, president of the Canadian

gold giant, said that global output has been

falling by roughly 1m ounces a year since

the start of the decade. Total mine supply

has dropped by 10pc as ore quality erodes,

implying that the roaring bull market of the

last eight years may have further to run.

"There is a strong case to be made that we

are already at ‘peak gold’," he told The Daily

Telegraph at the RBC’s annual gold

conference in London.

"Production peaked around 2000 and it

has been in decline ever since, and we

forecast that decline to continue. It is

increasingly difficult to find ore," he said.

Ore grades have fallen from around 12

grams per tonne in 1950 to nearer 3 grams

in the US, Canada, and Australia. South

Africa’s output has halved since peaking

in 1970.

The supply crunch has helped push gold to

an all-time high, reaching $1,118 an ounce

at one stage yesterday. The key driver over

recent days has been the move by India’s

central bank to soak up half of the gold being

sold by the International Monetary Fund. It

is the latest sign that the rising powers of

Asia and the commodity bloc are growing

wary of Western paper money and debt.


California Controller: Overview of
the Commercial Property Markets

Buried in the California Controller’s

November analysis is a guest article:

Overview of the Commercial Property

and Capital Markets with Implications

for the State of California by Dr.

Randall Zisler. (ht picosec)

Here are some excerpts:

Whereas excessive and imprudent

leverage fed the bubble, deleveraging

not only popped the bubble, but, in the

process, destroyed record amounts

equity and debt. Most deals financed

with high leverage from 2005 to the present

are under water. The equity is gone and the

debt, if it trades at all, trades at a deep discount

to face value. Most leveraged equity invested

in real estate has evaporated since property

prices, if marked to market, have fallen

30% to 50%.

The chart [right] shows overall U.S. property

total returns, quarterly (at annual rates)

and lagging four quarters. This appraisal-based,

lagging index shows sharp negative returns

exceeding the deterioration of the RTC

(Resolution Trust Corp.)
period of the early 1990s. (See Chart 1.)

Second quarter 2009 returns indicate the

possibility that total returns, while still

negative, may have hit a point of inflection.

We expect that property values in many

sectors, especially office, retail, and

industrial, will likely deteriorate further

in 2010 with improvement beginning

sometime in 2011.