Thursday, December 31, 2009

"Government ‘help’ to business is just as disastrous as government persecution… the only way a government can be of service to national prosperity is by keeping its hands off." –Ayn Rand

The Day The Dollar Died (Part 10): The Dented Crown and Worthless Pound

U.S. in fiscal peril with $12.1 trillion debt

Move Your Money

Commodities Heading for Best Year Since 1970 on Chinese Demand

Mortgage Bond Rally May End, Rates Rise as Fed Stops Purchases

3 reasons home prices are heading lower

FDIC plans to seek stakes in buyers of failed banks

Economists React: Prices Have Further to Fall

"Through the first three quarters of 2009 state and local tax revenues totaled $875 billion, nearly 8% below the $951 billion collected in the first three quarters of 2008. In the same period, federal receipts were down nearly 19%."
State, Local Tax Revenues Decline 7%

World Stock Market Rally Seizes Up

AFP California Presents: The 2009 Top 12 List: Common Sense Missing in California
Dear friend of AFP,
It’s hard to believe, but 2010 is almost here. AFP California was hard at work in 2009. While the state continues on its track towards fiscal ruin, AFP has become the voice of reason in Sacramento and throughout the state.
As we reflect back on 2009, Americans of Prosperity of California decided to compile a list of the top 12 examples of the lack of common sense in California government. The video we put together displays some of the worst examples of government mismanagement.
It may be frustrating to be reminded of these instances of a complete lack of common sense in our state government, but they should spur us on towards reclaiming the Golden State. In 2010, AFP California will continue our fight to bring common sense to Sacramento.
Watch AFP’s Top 12 List.

Wishing you a prosperous 2010,
Peter FoyChairman, Americans for Prosperity of California

Squeeze The People – The Album Posted: Dec 31 2009 By: Jim Sinclair Post Edited: December 31, 2009 at 3:19 pm
Filed under: General Editorial
Dear CIGAs,
Please help me get the message across. We have written much and spoken at various venues.
Still the media makes fun of gold investors and pumps out MOPE daily.
I financed the creation of an album of contemporary folk music that tells the story quite accurately. I am not looking for remuneration for this project, I simply want to share the work of a great artist with you. Click here to preview Bill Carleton’s new album…
I believe this album communicates a message that should be heard.
It would make a hard money and ethics gift for Christmas and the New Years.
It should be heard by those young and old that appreciates good music and proper monetary management.
From the artist, Bill Carleton’s, website,
Squeeze the People is the most sincere act of patriotism I can offer to my fellow neighbor. It is an album of Freedom Music of the People who are being squeezed to death by Fat Cat Wall Street banksters. Its purpose is to encourage alternative perspective and hopefully a greater sense of things. I invite you to listen. And please know that I am grateful for your time, because time is the most valuable commodity we have to share.
- What cannot be felt in prose or oratory can perhaps be sensed in music.
- Every major cause in history has had its music.
- Soldier went to war based on the themes of why. – We are in a war few understand.
- It is the survival of WESTERN CIVILIZATION, as we have understood it.
- It is the survival of a BUSINESS PHILOSOPHY that gave opportunity to everyone.
- It is the very survival of the rights to BELIEVE what you chose to believe.
Be sure to support this independent artist and share his excellent work with everyone who may enjoy it.
Follow the links at to get your MP3 or hard copy CD version of the album.
Respectfully yours,
Jim Sinclair

Wednesday, December 30, 2009

Gold rush grips China as people on buying spree

2010: I Expect a Lot Of Volatility Up And Down

Treasuries Set for Worst Year Since 1978 as U.S. Steps Up Sales

GMAC to get $3.5 billion more in government aid

Gold and Silver to Explode with Treasury Issuance in 2010

Jim Sinclair’s Commentary
This is the basic premise of the school of economic thought called "Management of Perspective Economics," expounded in public testimony by former Chairman Greenspan. The premise is if you can manage markets in a manner of significant public improvement then you can influence the thinking of business decision makers resulting in an improvement of business conditions. This is the first time in 79 years that MOPE has been applied in a situation of severe balance sheet deterioration to destruction. What the speaker promised below is "QE to infinity." I am sure she was in total shock when she ran into rampant disbelievers among the real estate group that are mainly born bulls.
Extend and Pretend ( Pray?) "What do want we should do, bankrupt all the banks??"
CRAIG: In George Ure’s column today (see link) he discusses comments from a friend who attended a very senior level CRE conference. To protect the banks from massive write-downs and bankruptcy it appears the Treasury is working towards a policy of "extend and pretend" on the massive amount of CRE mortgages that are coming due.
"Here is the real stunner. A senior person at Treasury said to a small group of us that it is now official Treasury policy to extend and pretend on [commercial] real estate loans. In other words, the policy statement from last week says, if you can make an analysis that says even if the current value is less than the loan, if you can do a spreadsheet that shows if you extend for 3-5 years, and if the economy gets better, and if the loan can be amortized down to where the loan is no longer more than the value, then the lender does not have to take an impairment -write down. Loans are to be modified by rate reductions, deferral of reserves, deferral of amortization or what ever.
Just NOT principal reduction. This is just like they are doing in housing.
Giant make believe. The free market seeking an equilibrium price is no longer economic policy. In short, the working of the free market is suspended. She went on to say it was administration policy that they will create new employment and by doing so they will boost the economy, and so then real estate values will return to old levels. There were 50 of the most senior and smartest real estate people in the room. They ripped her to pieces. It looked like one of the town hall meetings of August, except everyone there was a very senior, polished professional. At one point everyone was calling out or moaning at her. It was clear to all she had been given a few talking points and she was told to stick to them no matter how foolish she looked. The group told her in no uncertain terms this is terrible public policy. They said for jobs to be created you need to lower rents so the cost of occupancy was at a level to encourage more hiring. If the loan is kept at old levels and building values not reduced, then landlords can’t reduce rents to where they need to be to make taking space by tenants economically viable. Retailers costs remain higher than they should be making it harder to lower prices to induce sales. So there is a massive make believe going on. When I pressed the issue of political interference she said -what do you want us to do, bankrupt all the banks.

Tuesday, December 29, 2009

Not A Bear In The Woods

Fannie Clears Way for ‘Large-Scale’ Buyouts

FIREARMS REFRESHER COURSE 1. "Those who hammer their guns into plows will plow for those who do not." Thomas Jefferson

2. "Those who trade liberty for security have neither." John Adams

3. Free men do not ask permission to bear arms.

4. An armed man is a citizen. An unarmed man is a subject.

5. Only a government that is afraid of its citizens tries to control them.

6. Gun control is not about guns; it's about control.

7. You only have the rights you are willing to fight for.

8. Know guns, know peace, know safety. No guns, no peace, no safety.

9. You don't shoot to kill; you shoot to stay alive.

10. Assault is a behavior, not a device.

11. 64,999,987 firearms owners killed no one yesterday.

12. The United States Constitution (c) 1791. All Rights Reserved.

13. The Second Amendment is in place in case the politicians ignore the other Amendments.

14. What part of 'shall not be infringed' do you NOT understand?

15. Guns have only two enemies; rust and politicians.

16. If you remove the people's right to bear arms, you create slaves.

17. The American Revolution would never have happened with gun control.


Chinese power company refuses to pay derivatives losses to Goldman

Instead of paying Goldman, China buys mine in Ecuador

It Will Be More Difficult To Make Money In 2010

'Meltdown' is Coming for Bond Market, Strategist Says

Krugman: High Chance of Double Dip Recession

Credit-Card Writeoffs Increase and Could Get Worse

Monday, December 28, 2009

In the Eye of the Storm: Updating the Economics of Global Turbulence

Bloomberg Video Interview: December 28

The Worst Investment In The Long Run Will Be U.S. Treasuries

The Dollar May Appreciate 5 to 10 Percent Against The Euro In The Near Term

Burlington Northern's Tepid Outlook is a Warning

This video explains what is happening and why...

The Dollar Bubble

Things are really improving right?

Berkshire Eliminates 21,000 Jobs as Manufacturing, Retail Slump

Last Decade Worst Ever in Stock Market

Really... recovering?

Even as the US Economy Recovers, a Decade of Joblessness and Flat Wages Could Lie Ahead

US Treasury Bonds a Ponzi Scheme Waiting to Crash

Just what we need...

First Case of Highly Resistant TB Seen in U.S.
Brace For Impact: In 2010, Demand For US Fixed Income Has To Increase Elevenfold... Or Else

Jim Sinclair’s Commentary
Get those electronic printing presses prepared for "QE to Infinity."
There is no other alternative from the political standpoint. 2008 and 2009 stand witness to that fact.
Once started QE cannot end until it moves to its hyper-inflationary implications.
Stay the course and ignore the Fabers, Rogers, Buffets and Soros PR hounds baying at the moon.
Brace For Impact: In 2010, Demand For US Fixed Income Has To Increase Elevenfold… Or Else By: Tyler Durden Saturday, December 26, 2009 12:52 PM
As everyone is engrossed by assorted groundless Christmas (and other ongoing bear market) rallies, and oblivious to the debt monsters hiding in both the closet and under the bed, Zero Hedge has decided it is about time to present the ugliest truth faced by our ‘intellectual superiors’ and their Wall Street henchman who succeeded in pulling off Goal #1 for 2009 – the biggest ever bonus season (forget record bonuses in 2010… in fact, scratch any bonuses next year if what is likely to transpire in the upcoming 12 months does in fact occur).
If someone asks you what happened in 2009, the answer is simple – two things. There was a huge credit and liquidity crunch, and then there was Quantitative Easing. The last is the Fed’s equivalent of band-aiding a zombied and ponzied corpse, better known as the US economy. It worked for a while, but now the zombie is about to go back into critical, followed by comatose, and lastly, undead (and 401(k)-depleting) condition.
In 2009, total supply of all USD denominated fixed income, net of maturities, declined by $300 billion from $2.05 trillion to $1.75 trillion. This makes sense: the abovementioned crunches stopped the flow of credit from January until well into April, and generally firms were unwilling to demonstrate to the market how clothless they are by hitting the capital markets until well into Q2 if not Q3. What happened was a move so drastic by the Fed, that into November, the worst of the worst High Yield names were freely upsizing dividend recap deals (see CCU) – the very same greed and stupidity that brought us here. Luckily, so far securitization and CDOs have not made a dramatic entrance. They likely will, at which point it will be time to buy a one-way ticket for either our southern or northern neighbor, both of which, in the supremest of ironies, transact in a currency that will survive long after the dollar is dead and buried.
Back to the math… And here is the kicker. Accounting for securities purchased by the Fed, which effectively made the market in the Treasury, the agency and MBS arenas, but also served to "drain duration" from the broader US$ fixed income market, the stunning result is that net issuance in 2009 was only $200 billion. Take a second to digest that.

UN to Produce Bullion Coins as World Currency // Current

Just Like The Old Days

Why Gold Will be the "Greatest Trade Ever"

An Introspective Look at the Future of America Craig Harris.

Bob Chapman: The Credit Crisis is Not Over

Hyperinflationary Depression - No Way of Avoiding Financial Armageddon

After the Bailouts, Washington's the Boss

U.S. May Prop Up Housing Further Via Fan, Fred

Sunday, December 27, 2009

Dollar won't do anymore, FT's Martin Wolf says, without mentioning gold

Treasury Yield Curve Steepens to Record on Debt Demand Concern

If you think...that the dollar will be better tomorrow... then it is will lose everything...

Jim Sinclair’s Commentary
The reverse of this is the dollar ready to be denominated in Asia.
Renminbi set to replace US dollar for trade in Asia Pacific Author: Georgina Lee Source: Asia Risk 27 Dec 2009
Hong Kong moves to position itself as clearing hub for renminbi-based transactions
The Chinese renminbi is taking on an increased role in the Asia-Pacific region, and is expected over time to replace traditionally dominant currencies such as the US dollar and the euro for certain transactions.
Chinese government policy changes have enabled Asian corporates to settle trades with their Chinese counterparts in renminbi. And increased intra-Asian trading volume may lead Beijing to also consider allowing other trade-related insurance and derivatives denominated in renminbi to be done offshore, according to bankers and regulators in Hong Kong
Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority (HKMA), said Beijing is studying the idea of introducing more renminbi-denominated investment products in Hong Kong, expanding on the authorities’ approval for renminbi-denominated bonds issued by mainland financial institutions being made available for Hong Kong investors.
Currently, the renminbi is not fully convertible, but the Chinese government has made a number of arrangements with various countries so that trades between China and these countries could be settled directly in renminbi, instead of US dollars.

Jim Sinclair’s Commentary
Come on now. This is the work of the god of greed.
Goldman Sachs and Others Investigated for Betting Against Securities They Created Sunday, December 27, 2009
Betting against their own securities has prompted numerous investigations of Goldman Sachs and other Wall Street institutions. Prior to the financial collapse, Goldman and others figured out a way to package risky securities, such as subprime mortgages, and sell them to investors who were told they were buying sound investments. Little did the investors know that the firms selling the synthetic collateralized debt obligations (or CDOs) turned around and bet that the CDOs would fail—costing pension funds and insurance companies billions of dollars.
“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” Sylvain Raynes, an expert in structured finance at R & R Consulting in New York, toldThe New York Times. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”
In addition to Goldman, CDOs were sold and bet against by Deutsche Bank, Morgan Stanley and Tricadia Inc.—an investment company whose parent firm’s CDO management committee was overseen by Lee Sachs. Sachs is now a special counselor to Treasury Secretary Timothy Geithner

Friday, December 25, 2009

Treasury pledges unlimited bailouts for Fannie and Freddie

Zero Hedge: Stocks would be flat without after-hours goosing

Zero Corner, Debt Costs & Isolation

Why Gold and Silver Will Be the Next Currency

James Turk: Government overspending causes hyperinflation

Special thanks to Mike Hoy, for reposting this for everyone.

I wrote this article five years ago in an attempt to help investors reach out to family members in an effort to help them survive the unfolding economic events of the future. Several subscribers have asked me to re-submit the article for public posting a second time as the message contained within the article is as important today as it was then.
I have not updated the content as I want to refresh investor’s memories of the economic events leading up to the writing of this article. These events were directly responsible for the financial collapse in 2008. I plan to write a follow-up to this article as the unfolding events of today represent risks that I believe will challenge the very foundation of life as we know it in the years ahead.
Merry Christmas, Seasons Greetings and a Happy New Year to all,
This is a special article that I am writing for the Holiday Season. I have had several requests to write an article to help educate and awaken our loved ones to the reality of the future. If I am successful in bringing to words, the thoughts that rattle around in my head, then I hope this article will make the Holiday Season a little less argumentative and a lot more friendly than many prior Holiday’s experienced by some families, including my own. Arguments and tensions tend to rise when the subjects of the economy, world uncertainties and the markets come up for conversation.
This is an article that all of you can e-mail or share directly with those you really want to help but have never had the chance to quiet, long enough, for them to hear and understand why you think and feel the way you do. You and I both know that reaching these people has been very difficult, if not impossible. As in the past, you are probably wasting your time but you are going to give it another shot simply because you do care about them and know that one day they will awaken to the future. You can only hope they will wake-up before it is too late. These “less than totally informed people” have an opportunity to invest in an industry that is in the infant stages of what could be the greatest bull market in history. If just a fraction of this bull market materializes, investors in these markets have the opportunity to change the financial futures of themselves and their families forever.
To understand the risks associated with the coming events of the future, one does not have to be a rocket scientist. All one really needs to do is spend a little time reading the numerous articles that are posted on the websites you and I read every day.
Most of you, like me, have paid a heavy price for trying to help your family and friends. You have been labeled as negative, un-American, off your rockers and simply not in touch with the rest of the world. Well, the fact of the matter is, you are none of the above. It’s time they realize they are the one’s out of touch with reality. If they do not wake up soon, they will find that one day, all their hard work and labor has been for nothing as it could evaporate overnight. If they don’t wake up they will also miss the greatest investment opportunity of a lifetime.
Now I am going to talk to “them;” the third party, the people this article is being written for.
I do not plan to sugarcoat what I have to say because I know that very few of you will even read this article from start to finish and many of those who do, still won’t get it. If I try to write everything that I feel and want you to think about, this will be a long article and that is counter-productive. So I hope to keep it shorter, than I should, and still stir you to begin to question and seek knowledge of what the true facts are and the long lasting effects they will have on your life.
I am going to enjoy writing this article because this is the one time that none of you can interrupt me with the never ending phrase of “you are always so negative and quite frankly I am tired of listening to it” as a response to not listening and learning. Instead maybe you will read and begin to comprehend the risks you face with being in the dark. You know that if you ever do listen and begin to understand that the changes you would be forced to make in your own lives would be totally against everything that you want to believe. Do you think for one minute that we do not want to believe and have faith in the same things that you believe? Do you know how many times we have said to ourselves that “I wish I didn’t know now all the things I didn’t know then?”
For most of you, it is so much easier to believe that the people leading this country really have your best interest at heart and that one day you will wake up and everything will be just fine. Well, I’ve got some real bad news for you; that is never going to happen under the current paths and policies that our country is now pursuing. One day you will wake up and realize that the only interest they have is to gain or keep political power. This is accomplished by trying to give everyone what they want without having to pay for it.
Most of you don’t realize that we have no choice in the way we think. We never wanted to be labeled as un-American and negative. We never wanted to get family upset at holiday gatherings. Believe it or not we really do love you people and when family gatherings turned into nightmares we are the ones who suffer the most.
We realize that the real arguments happen as a result of blind loyalty and stubbornness on your part to believe what you are being led to believe by those you trust. What you fail to realize is the fact that your blind loyalties are terribly misplaced. We would truly love to believe the way you do but unfortunately we have taken the time and made the effort to not give our loyalties blindly. We have spent hours upon hours doing research in search of the truth. This research continually feeds upon itself because the more research we carry out the more we realized the depth of our country’s and the world’s problems. We know for fact that things are absolutely not the way we have been led to believe.
Remember when you got your teeth kicked in as the tech stock bubble burst? Do you remember how you were so sure that things were different this time and that people like Warren Buffett, during the tech bubble, were labeled as “has beens?” Do you remember how you bought into the game of “old economy” versus the “new economy?”
The reality of that period of investing came down to the fact that there was absolutely no justification to support the lofty “.com” market caps. As a result, analysts created a totally separate category called “new economy” in a successful bid to move these exorbitant market caps even higher. It was a fantastic game until the end came. When that happened they recreated another category called “bagholder!
Even today I am beginning to hear the words “new economy” again. What do you think this should be telling you about traditional stock and bond market investments? Do you think they could be approaching the overvalued levels again? Of course you can always invest using the “greater fool theory.” This just means that there may be a bigger fool, than you, to buy your stock from you at higher prices.
How do all you ex-owners of Kmart and Enron stock feel seeing how you received nothing for your bankrupt company while those who wound up with your assets are reaping the rewards of your failed investments? Do you really want to be involved in a market that runs over you like this?
How do all you investors feel when Elliott Spitzer finds wrong doing in corporations and then settles with the criminals, collects a ton of money for “his” cause and you receive nothing. Then to add insult to injury, he allows the guilty parties to walk away absolutely free without admitting or denying any guilt. What an insult; Spitzer gets his and the guilty parties settle for a paltry fine, which you shareholders pay for, and no one is held accountable, except Martha Stewart, and I have yet to figure out what she did wrong.
Enron collapsed as a result of derivatives and offshore corporations. Our elected officials swore they would get to the bottom of that mess and make changes that could keep it from ever occurring again. So what happened? How come the politicians and Spitzer have not forced other corporations to unwind their financially destructive derivative positions and close their offshore corporations? Did you ever wonder why they buried Anderson as quickly as they did? Since Anderson was the accounting firm that was largely responsible for setting up the fraudulent offshore enterprises; do you think it might have been to cover up the paper trail to all the other illegal offshore corporations?
Derivatives are financial weapons of mass destruction and the brightest financial minds in the world do not have the answers on how to keep our financial markets together when the derivatives implode. Do not forget the failure of Long Term Capital Management in 1998 and how that fiasco almost caused the financial markets to fail. Today, Fannie Mae and Freddie Mac are possibly the largest derivative abusers and they are in the news right now. These derivative positions will encounter all kinds of problems as interest rates rise. Rising interest rates will cause horrible financial problems for the economy and the shareholders of their companies. You should take every opportunity to learn as much as you can about the risks associated with derivatives and rising interest rates.
The saddest part to this story is the possibility that the state of New York will eventually elect this man, Spitzer, as Governor of New York. Now that is a crime that the residents of New York should be held accountable for.
Have you ever taken the time to understand how the money was created to propel this economy forward? Do you think that the creation of debt is a healthy environment to build a strong and solid economy?
How many of you have been conned into the debt game? How many of you are in a situation where you now have accumulated debt up to your eyeballs? Low interest rates have been a two sided event. On one hand you have the benefits of refinancing your homes at unbelievable low mortgage rates; on the other you have succumbed to the drawdown of all equity from your homes to buy and live beyond your means. The sad truth to this event is; as interest rates begin to rise the equity that has been built up as a result of the low interest rates will evaporate leaving only the debt behind. There is no doubt that at some point in the future you will be underwater and rising interest rates will be the culprit. Do you think that you will be able to sell your homes? Do you think that you will be able to afford the new increased mortgage payments you will be forced to pay on your adjustable rate and interest only mortgages
These are questions you must deal with now because tomorrow may be too late! For those of you who own interest only loans, you better start praying now. With mortgage rates at all time low levels how can you possibly opt for an adjustable rate mortgage or an interest only mortgage when you have the opportunity to lock in long term historically low interest rates and payments?
How many of you seniors have pulled your money out of the safety of cd’s and short term governments to receive a higher rate of return? I know the returns you have received for the last two to three years have been horrible but I also know that rising interest rates are just around the corner and rising interest rates will destroy the value of your principle in these new long term fixed investments. If you have invested in long term bonds, where your capital is tied up for years, you need to be fully aware of the risks you face. The major risk you face is loss of principal in the event rates rise and you need to cash in your long term bonds.
I won’t even begin to talk about the risks associated with Junk Bonds and Ginnie Mae’s, because that is a whole separate topic. If rates rise dramatically, these long term bond investments may be worth a fraction of what you paid for them in the event you need to sell and get your money before they mature
Very few investors understand the circumstances surrounding the high interest rates experienced in the late 70’s and early 80’s. The important point to know and understand is that the circumstances surrounding the events that gave us a 20.5% prime interest rate in 1980 are in place today and the magnitude of seriousness dwarfs the events of the late 70’s and early 80’s. Debt is the most serious event that a consumer, corporation and government must deal with in securing the sound financial and economic future of that entity.
Entities do not go broke when they have no debt. Debt is the cancer that has destroyed every democratic society ever created. The disastrous amounts of debt in our society today, on every level, family, corporate and governmental are unprecedented in the history of mankind. There is very little chance that most of this debt can be collected. Our elected officials are doing everything in their power to continue this debt buildup.
The sole purposes of several years’ worth of falling and low interest rates were to force savings out of traditional investments in an attempt to resurrect the “.com boom” and to give added liquidity and buying power to other industries, such as housing, in an attempt to try and borrow our way to prosperity. Our leaders have done everything in their power to stimulate and resurrect the “Good Old Days” but it seems that the only thing they have succeeded in achieving is building an unprecedented amount of debt that eventually will have to be paid back or defaulted upon.
There is no question that when the time comes to pay our debts that growth in the economy will slow. When this time comes families will be forced to make budget cuts and there are a lot of industries that will suffer. The only long term solution is to pay off or pay down debt and build savings. Investment capital for economic growth should be fueled from savings rather than borrowing.
The important point that many of you do not realize is that the price of running huge budget and trade deficits is higher interest rates. This is not a complicated subject to understand as all one has to recognize is the fact that there is only so much of a good thing that anyone can want or have. Take our dollar for instance; for years foreigners and foreign central banks have collected huge quantities of our dollar. In the beginning this made sense as the dollar had value to it and these foreigners enjoyed a huge trade advantage in the currency game, by owning a strong dollar versus their own currency. After years of excessively huge increases in debt, both trade and budget, these foreigners are asking themselves whether they need to accumulate any more dollars, particularly when the dollar has fallen by more than 30% in the last two years.
These foreign countries have taken a beating by owning the dollar versus other options that are available to them, and they are tired of seeing their wealth destroyed simply because the US is completely out of control in its spending.
If our Government were a business would you want to loan it money when their debt is running at unprecedented and out of control levels with no end in sight? At what point do you begin to ask yourself whether the US can pay its bills with anything other than more “worth less paper?” Very few American people have asked themselves this question; foreigners, who are getting creamed, by owning our dollars, are asking themselves this question every day.
As these foreign holders of our debt begin to realize they no longer have an appetite for funding the frivolous buying habits of the American consumer they will then turn to other investments. This change of direction will offer benefits to their own people and wealth that is not created by a printing press. Interest rates will rise and in the end there will be a major challenge to exactly what “full faith and credit” means to you the American Taxpayer.
We know, in our own personal lives, the debt we have accumulated is about all we can afford. Just imagine having to tack on another $25,000 per person to satisfy the government’s part of the debt that YOU OWE INDIVIDUALLY! Are you thinking yet? This is a conservative figure that does not include the Governments obligations to the future amounts it “hopes” to be able to pay for programs like Social Security, Medicare and Medicaid. This is serious business and measures must be taken to change the path we are on. These foreign owners of our debt have us at their mercy and they possess “financial weapons of mass destruction” which they will use for their own benefit and at their own time of choosing. Americans also have short memories and therefore we forget that these foreign countries do not have American interests at heart but their own interests at heart. Turn the calendar back twenty-five years and remember the relationship we had with these foreign countries. We may have short memories but do they?
When they decide they no longer want to own our debt they will begin to spend those dollars to buy the natural resources to build their own countries. I do not blame them in the least for thinking of themselves. I believe they will buy the best companies in the world to meet the supply shortfall they have in their own countries. These foreigners own hundreds of billions of dollars and when they make up their minds to liquidate their dollar positions we will have some very serious problems in this country. Not only will they buy our best companies and force interest rates to much higher levels, but they will also force us to deal with inflation as we try to absorb these dollars coming home.
This is a very complicated issue to understand but it is an issue that you must begin to deal with or be swept away in the losses that will result in the changing of the guard. The Asian Countries are beginning to gain a taste of what Americans have taken for granted for years and they want more. The Asians are beginning to awaken to the 21st Century and this is creating a huge demand on the dwindling supply of the world’s natural resources. This will cause huge natural resource shortages and inflation that will only worsen as the years pass.
The Chinese are coming and they want what you and I have and there are 1,300,000,000 of them. Ten years from now it will be the Chinese that are calling the shots and we may find ourselves dancing to their tune. This does not have to be a bad thing if you properly plan and prepare. You need to recognize that the affordability of things like cheap sources of fuel is a thing of the past. Fuel to run our economy, heat our homes and drive our cars is going to be more expensive and the things we take for granted may become luxury items down the road. Very few Americans have the foresight to see and understand these unfolding events. The Chinese are going to exert tremendous new demand on the world’s natural resources at a point in time where the supply of the world’s natural resources has peaked and begun to fall. I believe that five years from now the US will be very sorry we ever outsourced a single job overseas.
I hope I have been able to generate a series of questions in your head that propel you to seek answers. I hope you begin to listen to those who are so desperately trying to reach you. You must realize that they are only trying to help you. They have websites that they can share with you where you will be able to more clearly understand the reasons why we think the way we do. If you were to have an understanding of the events that we feel are about to unfold then we believe you may view things differently and adjust your investment portfolios and your thinking accordingly.
You must begin to realize that a dollar bill is not a payment of debt but an IOU. You must begin to realize that those people who have accumulated the most dollar bills are beginning to take offense to the fact that the US just prints more dollar bills as a means to spend money it does not or will not have. They realize they must liquidate these dollars to protect themselves against the further printing, or devaluation, of their reserves. When you begin to realize that that IOU will someday be converted into hard assets then you will begin to understand why we think and feel the way we do.
One day when the light does come on, you will be leading the discussion and others will call you negative. It will be at this point in time that you will fully understand how we feel and why we think the way we do; welcome to the “Real World!”
Yes we are “gold bugs” and damned proud of it! We know that the only true money is gold. Gold is pure wealth and it stands on its own.
To discover a body of ore and turn it into a producing gold mine takes seven years on average. To mine gold from the ground is a very expensive and time consuming event. Gold must first be found, then reserves proved up through drilling, then capital must be raised to put the mine into production.
In essence; what you have above ground is what you “got!” This is why gold maintains its value. From the beginning of the monetary system gold has been used, universally, as money. An ounce of gold is an ounce of gold; it stands on its own merit, it is not an IOU or a piece of paper that can easily be duplicated.
Those people who fully understand this have been quietly accumulating gold for years and they now have a great deal of it and one day they know that paper will crash and gold will be back and those who have the gold will make the rules.
I hope this article will be of help to all in understanding that you need to be responsible for yourselves and the decisions you make which will dictate your financial futures. You need to learn as much as you can so that you will better understand how the future will unfold. I would love to say that I have the answers, but I don’t and I have yet to meet anyone who does. I only know that exponentially expanding our debt is the absolute worst thing that your families and our nation can do in an attempt to resurrect a period of time that was fueled, by the invention of the internet and Y2K, and not to be repeated. You must begin to pay down your debts and start to save. You must fuel growth from savings and not debt. I only hope it is not too late.
This is a very serious subject and I hope I have been successful in reaching, a few of you, to stir the desire to learn and educate yourselves. Do not accept, blindly or as gospel, the explanations that you are being given today by those who have a vested interest in the outcomes they hope to achieve, by encouraging and practicing the worst of unsound financial practices available to man.
As money dries up for all the “free-be” programs of the future, you will recognize that you are responsible for the poor decisions you make along the way. The time will come where the topics, I have, just touched upon here, will become painfully and blatantly obvious to all; the only question you need to answer for yourself is the question of whether you will be a survivor or a victim. You are the only one who can decipher the outcome to this question; at that point in time you will have only yourself to blame for not taking the time to educate yourself to the truth.
For those of you on my e-mail list I hope to have a complete article for you shortly after the beginning of the year. I am very excited about what I am working on. For those of you not on my FREE e-mail list there is room as I am completely up to date and can accommodate new subscribers. You can get on my e-mail list, at no charge, by responding to the e-mail address below.
I wish all of you a Very Merry Christmas, Seasons Greetings and a Happy New Year. I hope the future brings great happiness and prosperity.

Mike Hoy December 23, 2009

Thursday, December 24, 2009

'871 Billion' Reasons to Buy Gold: Strategists

Britain Joins Italy in Debt House

2010: The year of bankrupt governments

Treasury removes cap for Fannie and Freddie

Jim Sinclair’s Commentary
You think Euroland has problems?
"The Washington Post reported Tuesday that in 25 states unemployment benefit programs have already run out of money due to record numbers of people losing their jobs. The state’s unemployment insurance programs have had to borrow $24 billion from the federal government to continue functioning.
By 2011, according to government figures, 40 states will have exhausted their benefit pools and will need to borrow an additional $90 billion from the federal government to keep afloat."

Wednesday, December 16, 2009

"Yes, we did produce a near-perfect republic. But will they keep it? Or will they, in the enjoyment of plenty, lose the memory of freedom? Material abundance without character is the path of destruction." - Thomas Jefferson

“CQ, CQ, is Anybody out there?” (The Day the Dollar Died Part VIII)

Gulf petro-powers to launch currency in latest threat to dollar hegemony

More countries at risk of default

World Losing Faith in Debt-Laden UK

The Return of Gold and Silver Eagle Rationing

Airlines in Deeper Trouble than Forecast

EU/IMF Revolt: Greece, Iceland, Latvia May Lead Way

Bond Price Crash is Surest Bet in Town

Poll Reveals Trauma of US Joblessness

Squeeze The People – The Album Posted: Dec 16 2009 By: Jim Sinclair Post Edited: December 16, 2009 at 2:11 pm
Filed under: General Editorial
Dear CIGAs,
Please help me get the message across. We have written much and spoken at various venues.
Still the media makes fun of gold investors and pumps out MOPE daily.
I financed the creation of an album of contemporary folk music that tells the story quite accurately. I am not looking for remuneration for this project, I simply want to share the work of a great artist with you.
I believe this album communicates a message that should be heard.
It would make a hard money and ethics gift for Christmas and the New Years.
It should be heard by those young and old that appreciates good music and proper monetary management.
From the artist, Bill Carleton’s, website,
Squeeze the People is the most sincere act of patriotism I can offer to my fellow neighbor. It is an album of Freedom Music of the People who are being squeezed to death by Fat Cat Wall Street banksters. Its purpose is to encourage alternative perspective and hopefully a greater sense of things. I invite you to listen. And please know that I am grateful for your time, because time is the most valuable commodity we have to share.
- What cannot be felt in prose or oratory can perhaps be sensed in music.
- Every major cause in history has had its music.
- Soldier went to war based on the themes of why. – We are in a war few understand.
- It is the survival of WESTERN CIVILIZATION, as we have understood it.
- It is the survival of a BUSINESS PHILOSOPHY that gave opportunity to everyone.
- It is the very survival of the rights to BELIEVE what you chose to believe.
Be sure to support this independent artist and share his excellent work with everyone who may enjoy it.
Follow the links at to get your MP3 or hard copy CD version of the album.
Respectfully yours,
Jim Sinclair

Schiff: A Tough Year Ahead

Aussie Leader Warns of Coming US Default

John Browne concedes gold price manipulation

Tuesday, December 15, 2009

Bankruptcy of U.S. now certain

Foreign Demand for US Long-Term Assets Slows

Darryl Schoon: Deflationary Economic Depression 2010, Ready or Not, Here it Comes!

Greece Defies Europe as EMU Crisis Turns Deadly Serious

How To Make Convincing Fake Gold Bars Posted: Dec 15 2009 By: Jim Sinclair Post Edited: December 15, 2009 at 9:23 am
Filed under: General Editorial
Dear CIGAs,
Where there is so much smoke you can bet there is fire.
The first step you must take is to store your own gold.
Soon I may be able to direct you to a means of verification.
How to Make Convincing Fake-Gold Bars The "masterminds" behind the false-gold scandal at the Ethiopian central bank might not have gotten caught if they’d used Theo Gray’s formula By Theo GrayPosted 03.14.2008 at 11:37 am

On Wednesday, the BBC reported that millions of dollars in gold at the central bank of Ethiopia has turned out to be fake: What were supposed to be bars of solid gold turned out to be nothing more than gold-plated steel. They tried to sell the stuff to South Africa and it was sent back when the South Africans noticed this little problem.
This is an amazing story for two reasons. First, that an institution like a central bank could get ripped off this way, and second that the people responsible used such a lousy excuse for fake gold.
I consider myself something of an expert on fake gold (I’m not really, I just think I am) ever since I was asked to give advice on the subject to the author Damien Lewis for his recent thriller, Cobra Gold. I worked out in detail for him how you could make really convincing fake gold, and ended up as a minor character in the novel, where I am known as "Goldfinger Gus".
The problem with making good-quality fake gold is that gold is remarkably dense. It’s almost twice the density of lead, and two-and-a-half times more dense than steel. You don’t usually notice this because small gold rings and the like don’t weigh enough to make it obvious, but if you’ve ever held a larger bar of gold, it’s absolutely unmistakable: The stuff is very, very heavy.
The standard gold bar for bank-to-bank trade, known as a "London good delivery bar" weighs 400 troy ounces (over thirty-three pounds), yet is no bigger than a paperback novel. A bar of steel the same size would weigh only thirteen and a half pounds.
According to the news, the authorities have arrested pretty much everyone involved, from the people who sold the bank the gold, to bank officials, to the chemists responsible for testing and approving it on receipt.
The problem is, anyone who so much as picked up one of these bars should have known immediately that they were fake, no fancy test required. The weight alone is an instant dead giveaway. Even a forklift operator lifting a palette full of them should have noticed that his machine wasn’t working hard enough. I think they must have been swapped out while in storage: Someone walked in each day with a new fake gold bar and walked out with a real one. If they were fake on arrival then everyone who handled them in any way must have either had no experience with gold or been in on the scam.
Now, for me the more interesting question is, how do you make a fake gold bar that at least passes the pick-it-up test? The problem is that there are very few metals that are as dense as gold, and with only two exceptions they all cost as much or more than gold.

Public Debt Risk Rising, Turbulent Year Ahead: Moody's

US Credit Card Charge-Offs Rise in November

Venezuela Now Has World's Riskiest Debt

Wholesale Inflation Heats Up; NY Manufacturing Weak

Friday, December 11, 2009

If the price drops a little- buy a little, If it drops alot then buy alot...

Gold Not a Bubble, Silver a Better Buy: Rogers

Please sell your Gold...

Technicals: US Bear Market to Last until 2018

Greece Teeters on Bankruptcy

Federal Budget Deficit for November Hits $120.3 Billion

Geithner Says Treasury Faces Losses from Autos, AIG

Market Jitters as Spain Joins Dubai on Danger List

How to lose $127 million

I wonder how many Bankers and Politicians are currently reading about the French Revolution?

Jim Sinclair’s Commentary
How they have escaped this for so long is a testament of the sheeple as pussy cats.
Bankers might be feeling public’s wrath — literally By Daniel Tencer Thursday, December 10th, 2009 — 4:13 pm
A Los Angeles lawyer who had represented a failed subprime mortgage lender is found dead outside his home, having been shot in the head.
Three men allegedly invade the home of a former subprime lender, and are arrested after reportedly injuring three people inside.
Vandals target the home of the former CEO of the Royal Bank of Scotland, smashing windows in the banker’s home and car.
Those are just three notable incidents of violence aimed at people who were in some way linked to the financial crisis that has unfolded over the past year. And while in many of those cases it’s unclear whether the incidents were politically motivated, or motivated by financial issues, or just a coincidence, the cases fit into a pattern of escalating crime and violence in the wake of the recession.
Matthew Padilla of the Orange Country Register reports on a series of violent incidents in California in some way linked to the financial collapse.

Jim Sinclair’s Commentary
Down under has a poor opinion of the economic recovery and the thesis of "Pretend and Extend."
The question right now is which place is Oz?
Joyce warns of US ‘Armageddon’ MARK DAVIS AND PHILLIP COOREY December 11, 2009
THE OPPOSITION finance spokesman, Barnaby Joyce, believes the United States government could default on its debt, triggering an ”economic Armageddon” which will make the recent global financial crisis pale into insignificance.
Senator Joyce said yesterday he did not mean to alarm the public but there needed to be a debate about Australia’s ”contingency plan” for a sovereign debt default by the US or even by a local state government.
”A default by the US means complete economic collapse around the world and the question we have got to ask ourselves is where are we in that,” Senator Joyce said.
His warning came as the Rudd Government ramped up its attack on Senator Joyce as an economic extremist by highlighting his strong opposition to Chinese sovereign investment in Australia.
The Treasurer, Wayne Swan, said it was a cause for concern that Senator Joyce had been elevated ”from the reactionary fringe of our economic debate to the second-most senior economic policymaking job in the alternative government”.

Thursday, December 10, 2009

Don't make me have to say...I told you so...

"Empires and currencies rise and fall, but gold stands strong, monolithic and proud, casting an enormous shadow over all monetary history." - Adam Hamilton, April 2, 2002

10 Countries most likely to default (California is listed...)

FEMA Suggests Disaster Readiness Christmas Gifts

If the rich are taxed too much, they will simply leave and take the jobs and their money elsewhere...
Voters to Pres: Spend for Jobs, Send Bill to Rich

Finally... they are going to teach real economics in the U.S.
Univ of Iowa Offers Austrian Econ Class

The FED will print money, till we run out of trees...think Weimar Germany and Zimbabwe...
Hyperinflation is on it's way...
Dems to Lift Debt Ceiling by $1.8T

Financial Reform: I Don`t Think The Government Will Reform The Industry That Much

World Gold Council's new chairman seeks 'lasting prominence' for gold

American Dream 2.0: Default, Then Rent

Emergency Jobless Insurance Claims Surge to Record

US Foreclosures to Reach 3.9M in 2nd Record Year

Wednesday, December 9, 2009

US Monetary Expansionary Policies

King World News interviews the British Ron Paul

John Hathaway: Gold is now a contrarian's dilemma

CBO: US Already $292B in the Red for 2010

Geithner Seeking TARP Extension Until Next October

The New Underground Economy

What Recovery? Most Still See Recession

Food Stamps Go to a Record 37.2 Mln

Pretend and Extend: The Reason Gold Will Reach $1650 And Beyond Posted: Dec 09 2009 By: Jim Sinclair Post Edited: December 9, 2009 at 5:24 pm
Filed under: General Editorial
Dear CIGAs,
In my opinion there are two reasons why gold will, without any reservation, trade at $1650 after which it will seek both Alf and Martin’s price objectives.
For those with ears to hear it was outlined this morning in an interview with the top man of Starwood Real Estate on, of all places, F-TV.
The first reason is that we do in fact we have a 90s type Resolution Trust, but it carries another name. This time the Resolution Trust is the Federal Deposit Insurance Corporation. When you examine the mode of operation and consider what they will be required to do over the next two years and on into the future at an increasing rate, there is no question this is correct.
The second fact is that the ENTIRE plan for financial recovery is to “PRETEND and EXTEND.”
Federal and State bank examiners are being extremely lenient in allowing real estate loans of all categories, from commercial to residential, to be carried on the books of the institutions at full value even if they are behind on payments and indebtedness to the institution is greater in size than the asset’s worth is in liquidation.
This is crystal clear when you examine the numbers that are public as the FDIC takes over the bankrupt institutions.
This defines the word “PRETEND.”
The word “EXTEND” refers to all the rescue programs that wholly depend on stimulus to work. The financial industry is worse than the walking wounded. It is the walking dead. Therefore applying the name “Zombies” to major corporations and financial institutions is appropriate.
We also know that the economy of the USA is bouncing along a bottom, but far from what would have been anticipated in light of the degree of stimulation initiated. There are definitive reasons for the lack of expected results but they are not germane to this review.
In conclusion you must know that whatever the cost in terms of continued and increased stimulation, all that is required to infinity will be provided. There will be no serious attempts to drain any liquidity. Interest rates will be held at practically zero for as long as it takes or even if the economic recovery fails.
That strength in the US dollar is at best transitory as it is totally contra-indicated for business recovery in the US.
Fundamentally, PRETEND and EXTEND will create an ever increasing supply of dollars and demand for borrowing, both of which stand as the last pillar in the erection of gold as a permanent building.
So to those that understand what gold is (insurance) these wild gyrations mean nothing whatsoever to the upward trend of the entity.
The outrageous moves about to occur are simply what gold is multiplied in orders of magnitude by the total madness of the hedge funds and their automated trading systems pushing hundreds of billions of dollars into and out of markets, churning them incessantly without any regard in the case of gold. Gold cannot handle funds that size.
If you cannot stand gold’s heat then you must leave the arena now. If you choose to leave the arena please do not come back because it is only going to get harder.
Truly Main Street is in the hands of a casino.
In a sense hold my hand as we go through these outrageous machinations, as the price that gold is going to is much higher than I have anticipated.

Monday, December 7, 2009

US Monetary Expansionary Policies

Green Acres Is the Place to Be; The Recession Is Inspiring More Young Families and Singles to Head Back to the Country

North Koreans Burn Bills in Anger Over Currency Reform

Green Acres Is the Place to Be; The Recession Is Inspiring More Young Families and Singles to Head Back to the Country

Security for Liberty for All (The Day The Dollar Died Part VII)
04:44 by Administrator. Filed under: The Day The Dollar Died Series
by John Galt
December 7, 2009
First a brief commentary. I want to personally thank everyone who has forwarded, copied, reposted, and promoted this web site and the series as it exists today. I was not attempting to present a “professionally written” speculative series novel online (also called a ‘blovel’ I have learned) but rather a series of stories that tied the reality of what could happen to the average person. While many people view this as a potentially good novel to proceed with, I’ll take a pause on this matter and simply remind people of why I wrote this:
To make you and I think about the future.
What mistakes will the powers in charge make? How does this reality set in on the average household? Will America survive? What will the world do to us in retaliation? What do I need to do to get my house in order and survive the insanity?
Those questions and I am sure thousands of others come to mind. I know that it seems somewhat insane to consider this story as a potential reality but in my book, all stories have some merit, except maybe those with the Mad Max twist and shout angles that I do not believe will occur in the short to intermediate term and are only possible should there be an all out war in the world we live in. Instead, I fear we will live in the world of a bifurcated dollar where the rest of the world decouples from the United States in an effort to survive the collapse of the empire we have created. Pax Americana could indeed lead to a resurgence in or ascendancy within the nations of Asia, led by China and crossing the Steppes, much like the Mongolian hordes did a millennium ago. Thus I continue this series and shall start one new chapter every Wednesday so I can continue focusing on every event and finishing another work at the same time.
I hope you enjoy this blovel and continue to provide feedback as you see fit. There is no right or wrong, only opinion as everything from this point forward is FICTION…..
February 24, 2010 10:55 A.M. Eastern Time
Lillian was sipping coffee by the cash register when Sandy ran back inside and yelled “Mama, I need your help with the State Patrol.” Lillian carefully placed the cup down and complemented the cashier on her courtesy and understanding, realizing that this could well be the last cup of coffee she got from her favorite restaurant for a long time to come. As she approached her somewhat bedraggled daughter the trooper was getting his report book out and starting to interview his daughter. The trooper started to speak in that South Georgia drawl to Sandy, “Ma’am, I hate to say this, but you really shouldn’t be this far from home ’cause their aren’t any gas stations open with fifty miles of here and I’m not sure if I can help you.” Sandy looked somewhat distraught at her mother who asked the most basic question that anyone could have and should have asked of the officer; “Sir, do you happen to have any spare gas that I can purchase from you?” Sandy looked relieved until the officer snapped at both them in a very firm voice “We can’t spare a drop at this point in time. There is too much going on and I have spent enough time on a case that will never be processed. We are only working major felonies, monetary crimes and area enforcement cases at this time.” Lillian had heard this before as her mother had to deal with the rations manager in the small town of Adel during the big war. Lillian batted her eyes in that adoring grandmother pose and looked into the trooper’s eyes as she said “Sonny, I’ll give you all my money, forty bucks, if you can just spare five gallons so she can get home. I promise that she’ll drop me off west of town and then head on to her house.”
The trooper, exhausted after twenty hours of solid duty, nodded, popped open his trunk and handed Sandy a full five gallon can from one of the six he had in his trunk and then looked over at the smiling little old lady and said “Ma’am, you can keep your money. It’s not worth a thing anyways. Y’all need to get home, lock the doors and hunker down for a few days until this thing sorts out. Hopefully they’ll get the grocery stores and banks open in a few days.” Sandy snapped right back in a submissive voice, “Sir I promise you, we’ll go to her house, pick up some supplies and lock up at my house. I promise!” The trooper nodded and Lillian smiled and handed him a small gold ring on her pinky and whispered into his ear “Sonny, God Bless you. I have had a full life and now I have my daughter for whatever is next because of you. Take this as a token of thanks, it isn’t much but we’re all going to need real money for what is next.” The officer smiled, kissed her on the cheek and ducked into his car to hear the radio call “10-34 in progress, all units near Pitts Shell off Highway 54 in Peachtree City respond immediately. Officer is down on scene and requesting assistance.” He confirmed the call, slammed the door and peeled out of the parking lot lights and siren blazing away. Sandy was finishing up pouring the gas into her car and looked up at her Mama and tearfully said “I wish I was as strong as you Mama!” Lillian could tell her daughter was upset by today’s events and looked back at her with a reassuring smile with the words only a mother could say, “You’ll be stronger than ever after this honey, that’s a promise.”
February 24, 2010 12:00 P.M. Central Time
Mike’s phone rang as if almost on schedule, except instead of his dispatcher being on the company phone, it was the Federal Department of Transportation. The voice on the other end was quite blunt “Unit 1204, Mike Elmendorff, is this you on the line?” Mike hesitated and replied, “Yes, it is me, can you please identify yourself?” The female voice blurted out “This is Sandra Tillens with FDOT calling all truckers currently with foodstuffs on their trailers under dispatch in the Minnesota district. According to the information submitted by your company on Pro number 47762IBP1011 you have approximately 15,000 lbs. of boxed frozen pork destined for Duluth Meat Supply in Duluth, MN.” The hesitation in Mike’s voice turned into concern when he told her “Your information is correct. How can I help you?” Ms. Tillens replied sternly “You are hereby instructed to deliver this order to Superior Cold Storage at 1123 Mullins Avenue in St. Cloud, Minnesota at 0400 in the morning. We will send an escort from the State Police to insure you arrive safely.” Mike’s blood pressure hit a boiling point by now as he was not in any mood to be dictated to after all that has happened in the last seventy-two hours. “And Missy, when do I get paid for hauling this load and will I get my fuel reimbursement my jack ass dispatcher said I would get when I spent my own money to keep this unit running for the last two days?” She was not going to take any huff from the old driver “Sir, you are under orders as this load has been transferred to FEMA for redistribution. You can fulfill this delivery and contact your company on Monday about settlements which will be processed by the state of Minnesota or we can send a unit with the proper escort to take the trailer from you and deliver it back to you when we are finished unloading it or a time of our choosing.”
Mike knew he was licked, “Ma’am, I will be there at 0400. For your sake, I hope my wife is safe while I am gone.” The lady hung up at that point and Mike called grabbed his personal cell phone to try to get in touch with Deputy Monckton. “Jack, I need a huge favor” Mike asked when he picked up the phone. “Mike, I’m in no position to do anything. We’ve been issued full body armor and I have roadblock duty with a National Guard unit out at 210 and 75 north of Breckenridge. I can’t do a thing to help you old friend” Jack replied. “Damnit man, my wife is going to be all alone tomorrow and I fear that those nuts we heard on the interstate are still around!” Mike said somewhat exasperated. Jack paused and said “Mike, I wouldn’t sweat it. You’re going to have an escort and anyone caught out after dark without proper authorization is shot on sight. This is the old days new again old buddy, just like the crap sandwiches we ate in ‘70 in the jungle. I’ve got to go, we’re mounting up now to get into position before dark. I’ll call you on Friday or Saturday when we’re relieved.” Mike said his goodbyes and walked into the other room where his wife was sitting looking at him with that glare that only a woman you’ve known for years could give. She started speaking before Mike said a word as he started to open his mouth and told him “Just leave me a pistol and a shotgun. And you had best identify yourself mister when you knock at the door or I’ll blow your butt away.” Mike smiled, walked over and hugged his wife and whispered in her ear “I love you baby. I’ll leave you the 357 and I’ll take the peashooter. You’re the greatest.”
February 24, 2010 3:00 P.M. ET
“This is the Voice Of America Domestic News Service, welcome to the afternoon update from Washington, D.C.” the voice boomed over the television. I turned the volume up because some information was better than none at all and I needed to find out anything about what was happening in the world beyond the canned garbage coming out of the radio. At the conclusion of the five minute update, of all things, CNBC returned to “normal” programming except that instead of the afternoon market update, it was a bizarre studio setting with a very exhausted looking Federal Reserve Chairman about to be interviewed by Maria Bartiromo. For this, I had to stay tuned in and called my wife into the room to watch the show as this could set the course for years for this nation.
Maria Bartiromo: “Good afternoon Chairman Bernanke and welcome to the Voice of America’s Business Report. ”
Stunned, I immediately did what about half the nation did and hit the “INFO” button on my remote control to insure that yes, I was on Channel 39 and the Comcast ID did say “CNBC” so I guess the insanity I was witnessing was not about to end.
Chairman Bernanke: “Thank you Maria, I hope to enlighten everyone about the great success we have accomplished in Geneva.”
Bartiromo: “With the financial markets shut down worldwide and the banking system paralyzed in this country, what actions were agreed to in Geneva to restore the system?”
Bernanke: “The meetings we held were basically an acceleration of the prior agreements signed off on at the last G20 and G8 meetings. The first priority will be to open the Asian and European financial markets since the nations in those blocs have established an accelerated schedule to use the new Universal Currency Unit for international trade and to discontinue the current single nation reserve currency system. In the interim, the United States will operate under the emergency declaration issued by the Federal Reserve banks and the President of the United States for the next ninety days.”
Bartiromo: “With the emergency declaration set to expire in a few months, does this mean our equity and bond markets will not reopen any time soon or will they have to wait for other actions to be completed before we restart the system?”
Bernanke: “The actual process is not that complicated. The devaluation agreements have been completed and now we are in the process of assigning new valuations to all equity and bond holdings traded openly on the markets plus issuing new domestic debt bonds to substitute for Treasury issues held by domestic institutions and individuals. After the new issues and exchange process is completed for Federal, State and municipal securities, the markets will reopen after the pricing configuration for non-Government issues and forced defaults are assigned within the new system. The pricing process has been assigned to committee within the Federal Reserve system at the New York branch and should be completed by March 8th. The financial markets are projected to open under the new six hour trading rules on that date at 9 a.m. Eastern time barring something unforeseen.”
Bartiromo: “Why six hours and not the traditional hours as set by the exchanges?”
Bernanke: “Per the new international regulatory authority, IFROB or the International Financial Regulatory Oversight Board, which reports to the International Monetary Fund and the United Nations, we must comply with all transaction authority until the Federal Reserve system is one hundred percent compliant and merged with the new World Reserve Bank established in Geneva as per the G20 Washington Accords of 2008. The stability from using international regulations over domestic oversight, which has failed and created the situation we find ourselves in today, shall enhance the power of the reserve bank branches via internationalization yet prevent the gaming of the system and creation of untested financial instruments that destabilize world markets.”
Bartiromo: “Mr. Chairman you hinted in previous statements from Geneva that despite the domestic issues which are vexing the systemic restart, there would be a major impact felt by individual investors and the average citizen, changes which would revolutionize our economy and create a true free market with controls to insure stability. Could you please expand on those statements?”
Bernanke: “Certainly Maria. The accords which have been working on are designed to prevent a default by the United States and to stabilize the currency exchange process via a non-singularity which was the weakness originally designed in the post war Bretton Woods agreement. The approach of a unified currency system and allowing individual nations to opt out and continue financial transactions or economic activities in their own domestic monetary units will allow for a slower compliance period for debtor nations needing to fulfill obligations and balance their national books before accepting the new international system. The United States is the largest debtor thus the compliance period for our country will be ten years, of which the President has signed off on the austerity accords which the Reserve banks concurred with and allows the United States to return to a stable economic participant in the world by 2021.”
Bartiromo: “What does this mean for Main Street?”
Bernanke: “Ultimately it will return us to an era of prosperity we have not enjoyed for almost fifty years ago. It provides a budgetary discipline which allows the country to provide economic security for the citizens and to preserve the important liberties for all. Soon enough, as the price stability quotas are implemented, things will start to calm down and the business of America will return to being focused on the economic growth engine of the world.”
Bartiromo: “Are there new regulations for equity and financial markets that will be issued? There are many viewers concerned about their 401K’s and IRA’s who are watching this afternoon.”
Bernanke: “Yes Maria, and fortunately for all participants in retirement programs or investment vehicles like that, the United States Government with the approval of the IMF has agreed to insure and guarantee the market values of all of these instruments as of the close of business on Friday, February 22. The price and valuations are locked in place and can be converted to the new DTI’s or Domestic Treasury Issues on March 8th or submitted to the Social Security Administration for the new Civilian Retirement Fund Management Program which opens for subscriptions on March 2, 2010. Either solution should re-assure the average investor that their life savings will not be lost during this turbulent transition period.”
Bartiromo: “Thank you Mr. Chairman for your time this afternoon and back to the new VOA studios for a panel discussion on today’s revelations.”
I was stunned silent again when my wife nudged me and said “I guess this means we will never really see our retirement funds, will we?” I nodded my head with a very saddened negative connotation and asked her one important question which was bothering me since this began, “Will you still love me if I dig ditches or become a bureaucrat?” She hugged me tight and kissed me with a whispering “yes” in my ear. The untenable situation had hit home and hopefully tomorrow the mailman will bring us information about what happened to the tens of thousands of dollars we had been saving for our future or at least give us a hint as to what the future may bring. I knew one thing though, I had to find some sort of communications outlet beyond the new government controlled media or I would go insane. With that in mind, I told my wife “Honey, I’m going for a walk at five. Why don’t you stay home and guard the house with our neighbors. I have to go a few blocks over and see if old man Lewis still has his amateur radio gear all hooked up and see what the news is not telling us.”
Little did I know what you don’t know might hurt you far worse than the truth.
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