Bernanke delivers blunt warning on U.S. debt
posted by Eric De Groot at Eric De Groot's Insights - 8 hours ago
With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the c...
Jim Sinclair's commentary
Dear Extended Family,
I believe the most important event at our Toronto CIGA meeting was the testimony of two attendees.
Two men spoke independently. One is a Canadian resident from Russia and the other from Poland.
Both said the same thing, "All the signs that preceded our inflation of more than 100% per year are here now in the West."
What more do you need to know?
Regards, Jim
Jim Sinclair’s Commentary
Ask yourself the following two questions:
1. Is California the only state of the USA that will experience bankruptcy?
2. Is Greece the only nation to have dealt in deceptive OTC derivatives?
California is a greater risk than Greece, warns JP Morgan chief Jamie Dimon, chairman of JP Morgan Chase, has warned American investors should be more worried about the risk of default of the state of California than of Greece’s current debt woes. By James Quinn, US Business Editor in New York Published: 8:20PM GMT 26 Feb 2010
Mr Dimon told investors at the Wall Street bank’s annual meeting that "there could be contagion" if a state the size of California, the biggest of the United States, had problems making debt repayments. "Greece itself would not be an issue for this company, nor would any other country," said Mr Dimon. "We don’t really foresee the European Union coming apart." The senior banker said that JP Morgan Chase and other US rivals are largely immune from the European debt crisis, as the risks have largely been hedged.
California however poses more of a risk, given the state’s $20bn (£13.1bn) budget deficit, which Governor Arnold Schwarzenegger is desperately trying to reduce.
Earlier this week, the state’s legislature passed bills that will cut the deficit by $2.8bn through budget cuts and other measures. However the former Hollywood film star turned politician is looking for $8.9bn of cuts over the next 16 months, and is also hoping for as much as $7bn of handouts from the federal government.
Earlier this week, John Chiang, the state’s controller, said that if a workable plan to reduce the deficit and increase cash levels is not reached soon, he will have to return to issuing IOU’s, forcing state workers to take additional unpaid leave and potentially freezing spending.
Last summer, California issued $3bn of IOU’s to creditors including residents owed tax refunds as a way of staving off a cash crisis.
"I can’t write checks without money; that’s against the law. My main goal is to keep the state afloat, but I won’t be able to do it without the help of new legislation," said Mr Chiang.
More…
Greenspan: Worst Financial Crisis Ever, Including the Great Depression.
Bernanke delivers warning on U.S. debt
Something Very Strange Is Happening With Treasuries
Bank Failure Map and Interactive Job Loss Map
China Will Drag US Stocks Down 20%: Dr Doom
Sunday, February 28, 2010
Saturday, February 27, 2010
Greeks Scramble To Pull Out €8 Billion From Local BanksZeroHedge ^ 2/21/10 Tyler Durdin
Posted on Tuesday, February 23, 2010 12:42:02 PM by FromLori
We previously wrote about the possibility of a bank run in Greece following unsubstantiated reports that Greek citizens don't trust the Greek financial system all that much anymore, courtesy of the whole bailout and GDP reporting fraud thing. The rumor was not only just confirmed and also quantified: Dow Jones reports that in the past three months Greeks have moved about €8 billion out of local banks "fearing a possible new tax on bank accounts, increased government scrutiny on assets and a run on the banks if Athens is forced to turn to the International Monetary Fund." This represents over a quarter of the money held by private banks in the country. This also represents about €400 billion in total money leaving the system courtesy of fractional reserve banking and the money multiplier. Yet the worst news for Greeks: money controls are coming.
"There is a lot of uncertainty out there," said a senior private banker at a Greek bank. "We've had a number of customers asking to move funds out of Greece, mostly to Cyprus, Luxembourg and Switzerland."
Clients of private banks also fear that Greece may be unable able to raise the EUR54 billion it needs this year to pay back maturing bonds and will therefore have to turn to the IMF for help.
"Some of our clients are concerned about a run on the banks if the IMF gets involved," said another private banker, this one from a foreign bank. "They believe the situation in Greece will get worse before it gets better. There is also very little clarity from the government about its intentions on new tax measures."
"We estimate that €8 billion has moved out of Greece to accounts abroad since December. It's money from bank accounts, stock sales, property sales and other sources. This is pretty substantial considering that there is only €30 billion under management in private banks here," he added. All is fine and well if this was all: just your plain vanilla run on the bank. But it's not - the Greek response to this capital outflow: upcoming money controls.
Wealthy individuals may have good reasons to be concerned, however. Finance Minister George Papaconstantinou earlier this month urged Greeks with accounts abroad to repatriate their money and said the capital will be taxed at a 5% rate. He said those who choose to keep their money abroad should declare their deposits and pay a tax of 8% for the first six months.
Thereafter he threatened that Greece will use all laws at its disposal, such as double-taxation agreements, to ask foreign banks for information on Greek account holders.
"For us this is the first step towards taxing all accounts in Greece," said the chief financial officer of a major Greek shipping company. "The line is minimum deposits here and moving all assets abroad," And now back to your regularly scheduled program of curling and no mention of the imminent collapse of Greece in the mainstream media whatsoever.
Trader Dan’s Commentary
The financial health of any state is directly related to the financial health of its various cities and towns. Here is further evidence of the mounting crisis that is yet to erupt and make itself felt in the larger scheme of things.
The rating of a city’s or state’s bonds is related to its fiscal condition. As their debt gets downgraded by the various rating agencies, the cost of borrowing increases, further compounding the already tenuous condition of these cities and states.
Remember those scenes of social unrest from Greece that we saw earlier this week? Wait until these deep cuts in services begin to take effect.
City of Angels on brink of abyss Los Angeles, the second-largest US city, is facing a crisis of funding not seen since the darkest days of the Great Depression Friday 26 February 2010 15.00 GMT Sasha Abramsky
Two and a half years after the official start of the worst economic downturn and fiscal crisis in nearly 80 years, America’s economy is supposedly growing again, the stock market is halfway recovered from the lows of 2008 and early 2009, and the unemployment plunge seems to have been halted.
Yet, built-in time lags in how revenues are raised and budgets calculated mean that many states and cities around the country are only now starting to feel the worst of the pain. This year has been, quite simply, abysmal for local and state governments, and next year promises to be even worse. With easy cuts long-ago made, these days basic services are increasingly seen as luxuries, and public sector employees are increasingly vulnerable to wage cuts, benefits rollbacks, and unemployment.
While the federal government has considerable wiggle room to borrow or simply increase the supply of money to help fight its way out of financial collapse, smaller government units in America don’t have those options; increasingly cities, counties and states are facing the sorts of austerity measures we’ve come to associate with third world countries in crisis, or, in recent years, with vulnerable European nations such as Greece or Latvia.
In Arizona, a cash-pinched legislature put the Capitol building up for sale, proposing to lease it back for state use. In the small Colorado town of Colorado Springs, officials shut off half the street lamps and one-third of the traffic lights, told residents who wanted short grass in public parks to bring their own lawnmowers, and auctioned off a police helicopter on eBay. Around the country, libraries have been shuttered, after-school programmes have been curtailed, mental health services have been decimated.
In Los Angeles, the nation’s second largest metropolis, the Democratic mayor, Antonio Villaraigosa, addressed a full session of the city council on 9 February to detail just how grim the city’s finances had become. Miguel Santana, the city administrative officer (the CAO is the mayor and council’s chief financial adviser) had recently informed the mayor’s office that LA was facing a $200m shortfall through the end of this financial year and another half billion dollar-plus shortfall in the years to come if it didn’t radically, and rapidly, restructure its budget. Santana didn’t mince words. His nearly 300-page report (pdf) opened with this stark warning:
More…
Trader Dan’s Commentary
The Fed chairman’s concerns are well founded. Please especially note the paragraph I highlighted in blue. That is translated as monetizing debt which will bear directly on the well being of the Dollar….
Bernanke delivers blunt warning on U.S. debt Stage is set in U.S. for a Greek tragedy By Patrice Hill
With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.
Recent events in Europe, where Greece and other nations with large, unsustainable deficits like the United States are having increasing trouble selling their debt to investors, show that the U.S. is vulnerable to a sudden reversal of fortunes that would force taxpayers to pay higher interest rates on the debt, Mr. Bernanke said.
"It’s not something that is 10 years away. It affects the markets currently," he told the House Financial Services Committee. "It is possible that bond markets will become worried about the sustainability [of yearly deficits over $1 trillion], and we may find ourselves facing higher interest rates even today."
It was some of the toughest rhetoric to date about the nation’s fiscal and budgetary woes from the Fed chief, who faces a second round of questioning Thursday before a Senate panel.
Mr. Bernanke for the first time addressed concerns that the impasse in Congress over tough spending cuts and tax increases needed to bring down deficits will eventually force the Fed to accommodate deficits by printing money and buying Treasury bonds — effectively financing the deficit on behalf of Congress and spurring inflation in the process.
More…
Trader Dan’s Commentary
With the exception of some within the gold community, how many would have imagined this 5 years ago?
Head of IMF proposes new reserve currency IMF’s Strauss-Kahn suggests IMF may one day provide global reserve asset By HARRY DUNPHY Associated Press Writer WASHINGTON February 26, 2010 (AP)
Dominique Strauss-Kahn, the head of the International Monetary Fund, suggested Friday the organization might one day be called on to provide countries with a global reserve currency that would serve as an alternative to the U.S. dollar.
"That day has not yet come, but I think it is intellectually healthy to explore these kinds of ideas now," he said in a speech on the future mandate of the 186-nation Washington-based lending organization.
Strauss-Kahn said such an asset could be similar to but distinctly different from the IMF’s special drawing rights, or SDRs, the accounting unit that countries use to hold funds within the IMF. It is based on a basket of major currencies.
He said having other alternatives to the dollar "would limit the extent to which the international monetary system as a whole depends on the policies and conditions of a single, albeit dominant, country."
Strauss-Kahn, a former finance minister of France, said that during the recent global financial crisis, the dollar "played its role as a safe haven" asset, and the current international monetary system demonstrated resilience.
More…
Friday, February 26, 2010
THE GLOBAL BANKING CRISIS CONTINUES…
Market Commentary From Monty Guild Posted: Feb 26 2010 By: Monty Guild Post Edited: February 26, 2010 at 5:36 pm
Filed under: Guild Investment
THE GLOBAL BANKING CRISIS CONTINUES…
STAGE 2: EUROPEAN SOVEREIGN DEBT UNDER ATTACK
Taken together, the Icelandic and Greek financial crises can be seen as the second stage of the larger global banking crisis. The first stage of the global banking crisis, which began in late 2007, was centered in the European and U.S. mortgage and mortgage derivative market. The second stage began with Iceland’s monetary and fiscal crisis in 2009 and continues with the current Greek crisis, and is centered in European sovereign debt.
The global crisis banking crisis is a multi-phase global economic crisis caused by years of over-borrowing followed by the current deleveraging. This deleveraging was, of course, set in place by all those who gambled with their own and other people’s money. As time passes, more and more of these gamblers will be unmasked and there will be more countries, companies, industries, and individuals who will lose face and capital in coming months and years. We anticipate that these problems will continue as various sectors delever over the next six to eight years.
Many believe that the other European nations will act to bail out Greece, and then perhaps Spain or other over-levered nations in Europe who experience debt problems. We disagree. In our opinion, the International Monetary Fund (IMF) is the lender who will bail out the damaged European nations. In our opinion, it is too hard for European nations to go to their taxpayers and tell them that they are directly or indirectly guaranteeing the debt of a foreign country.
As is their custom, the IMF will extract a high price in terms of the deep cuts in expenditures and increases in taxes demanded of the borrower. In our opinion, the period of easy borrowing is over for the Greeks, and probably for several other European nations whose debt will come under attack in coming months and years.
The current chaos is creating substantial demand for gold and other precious metals. Holders of Euros are seeking to acquire more gold, and holders of other currencies such as the Japanese Yen and U.S. dollar are undoubtedly thinking of following suit. Buying gold to hedge against the probability that the Yen and U.S. Dollar will be under attack in the not too distant future is not unwise.
THE FUTURE OF THE DELEVERAGING CRISIS
The coming phases of the deleveraging crisis will simply be different flavors of one major phenomenon with one major cause. We are saying this because we do not believe that most investors realize how long and pervasive this deleveraging crisis will be. If this were a baseball game, we would only be in the 2nd inning (for non baseball fans among you, that means we are only 20-25 percent through the crisis).
Furthermore, crises are still brewing with respect to the solvency of U.S. states, and the legal subdivisions within the countries in the European Union. These crises have yet to become globally recognized. In order to bail out the states and other governmental entities below the national level, a huge quantitative easing (money printing) process will eventually be instituted in many countries. The effect will be to keep the developed nations economies (and their currencies) under pressure for years.
Governments are not alone. Many industries, such as banking, financial services, and insurance remain under pressure to decrease their leverage and raise capital.
GLOBAL ECONOMICS
OIL DEMAND UP STRONGLY
The global demand for oil is created by demand for energy in China, India, and other Asian nations. The world’s supply is not sufficient to handle all of the demand. Although some pessimists talk about gluts, any price declines in oil will be short-lived. We are buyers of oil on dips and we continue to expect oil prices to top $90/barrel by the end of 2010.
GOLD IS IN DEMAND BY EUROPEANS
Europeans have been buying gold (which is at a new high in Euro terms). The obvious reason for their purchases is to hedge the negative effect of a declining Euro. Many Europeans remember that two world wars were fought on their territory, and that owning some gold has saved many lives and many fortunes. During times of crisis they gravitate strongly to gold, and the current crisis is no exception. European central banks and the IMF may sell gold, but the average European is more likely a buyer than a seller.
U.S. STOCKS
U.S. stocks have been gradually rallying, and we believe that this rally could continue for a few months. It will cease when short term interest rates in the U.S. rise one or two more times. We continue to see a broad range of U.S. companies that are overpriced, but there are also values to be found for those who are bargain hunters.
INTEREST RATES
Interest rates in the U.S. and other parts of the world are starting to rise. The U.S. raised the Discount Rate last week and many pundits argued that the increase was of no importance. We disagree. For many decades, we have seen interest rate increases as a warning signal to get out of markets. In every country, stocks compete with short term interest rates for investors.
If short term rates start to rise, stocks always correct. U.S. interest rates have seen their lows. Historically, after the second or third rise in rates, U.S. stocks undergo a larger correction. When will the second and third rate increases take place? We imagine that they will happen before the end of 2010.
CHINA
China’s economy continues to expand in spite of concerns among uninformed observers that a slowdown is looming on the horizon.
It is worth noting the many internal changes taking place in China during its continued growth phase.
Change #1
For the past twenty years, migrant workers have streamed into the Eastern seaboard from the nation’s interior agricultural centers in search of manufacturing work, but today, that trend is changing. Farming families are now making money in agriculture or finding work closer to home. Migrants are no longer pouring into the East coast and the resulting shortage of migrant workers is sending up the price of labor. In many manufacturing areas wages are up 20 percent or more.
Change #2
Economic growth is now taking place in many regions of China, and the once ubiquitous assembly line manufacturing for export is now a smaller percentage of economic activity. Most new jobs are to be found in retail, consumer products, infrastructure, and heavy industry. These jobs are located throughout the country.
Change #3
A consumer economy is gradually developing. The savings rate, which we believe to be about 30 percent in China, will gradually fall as the government installs the beginnings of a social safety net. Currently, the (extended) family is the only social safety net and saving is key to family survival.
Change # 4
China has been building out their infrastructure for many years. The infrastructure development is by no means complete, but the build-out is very impressive not only in big cities but in second tier cities as well. This infrastructure will give China a competitive advantage in developing faster economic growth.
Change#5
China is targeting new industries to lead the world in the 21st century. Clean energy in all forms is one of their major undertakings.
Also worth noting:
Food price inflation in China and India is another worry. We expect inflation to be 5 percent in China in 2010.
China’s stock market has been consolidating and moving sideways due to a concerted raising of reserve requirements to stop speculation on real estate. We believe that about six months before rates peak China’s market will rise strongly. In the interim, we are selecting low P/E, fast growing companies.
INDIA
India’s economy is booming and, in our opinion, the Indian stock market is currently overpriced. Inflation is rising and we expect interest rates to follow. Although we applaud the job that Prime Minister Singh has done on the economic front, we will wait for a correction before moving into Indian shares. The growth areas include many sectors of the economy such as construction, pharmaceuticals, technology, consumer banking, real estate, and consumer goods. The nation’s infrastructure is slowly improving but will take decades to become first-world.
As many have heard, the IMF is selling a large amount of gold that was contributed to them by member countries in order to raise cash to help countries with problems. The countries who deposited the gold with the IMF have agreed to the sale, yet even with this large sale hanging over the market, gold prices remain strong. It is widely rumored that India will be the purchaser of the IMF’s gold.
Indian officials have stated from time to time in the world press that they are buyers of gold at market prices.
ATTRACTVE INVESTMENT AREAS
Bargains continue to be available, but one must be thorough and careful in picking them.
We continue to see growing countries that are well situated to supply the Chinese economic machine with raw materials or partially manufactured products as attractive investment opportunities.
We are concerned about some emerging markets due to high valuations. This has kept us out of India and Taiwan. We are currently focused on U.S. and European technology and energy companies, fast growing companies in the developed world, gold bullion and Canadian gold mining companies, companies with new oil discoveries (wherever they may be located), Indonesia, Thailand and some specific Chinese companies.
Thanks for listening.
Monty Guild and Tony Danaher http://www.guildinvestment.com/
Concerns grow over China's sale of US bonds; Evidence is mounting that Chinese sales of US Treasury bonds over recent months are intended as a warning shot to Washington over escalating political disputes rather than being part of a routine portfolio shift as thought at first.
Gerald Celente Predictions Owner of Trends research.
US will suffer its own Greek crisis Why worry about Greece? California and 40 other states owe alot more and are bankrupt.
FDIC's Problem Banks List: Where Will it End?
Market Commentary From Monty Guild Posted: Feb 26 2010 By: Monty Guild Post Edited: February 26, 2010 at 5:36 pm
Filed under: Guild Investment
THE GLOBAL BANKING CRISIS CONTINUES…
STAGE 2: EUROPEAN SOVEREIGN DEBT UNDER ATTACK
Taken together, the Icelandic and Greek financial crises can be seen as the second stage of the larger global banking crisis. The first stage of the global banking crisis, which began in late 2007, was centered in the European and U.S. mortgage and mortgage derivative market. The second stage began with Iceland’s monetary and fiscal crisis in 2009 and continues with the current Greek crisis, and is centered in European sovereign debt.
The global crisis banking crisis is a multi-phase global economic crisis caused by years of over-borrowing followed by the current deleveraging. This deleveraging was, of course, set in place by all those who gambled with their own and other people’s money. As time passes, more and more of these gamblers will be unmasked and there will be more countries, companies, industries, and individuals who will lose face and capital in coming months and years. We anticipate that these problems will continue as various sectors delever over the next six to eight years.
Many believe that the other European nations will act to bail out Greece, and then perhaps Spain or other over-levered nations in Europe who experience debt problems. We disagree. In our opinion, the International Monetary Fund (IMF) is the lender who will bail out the damaged European nations. In our opinion, it is too hard for European nations to go to their taxpayers and tell them that they are directly or indirectly guaranteeing the debt of a foreign country.
As is their custom, the IMF will extract a high price in terms of the deep cuts in expenditures and increases in taxes demanded of the borrower. In our opinion, the period of easy borrowing is over for the Greeks, and probably for several other European nations whose debt will come under attack in coming months and years.
The current chaos is creating substantial demand for gold and other precious metals. Holders of Euros are seeking to acquire more gold, and holders of other currencies such as the Japanese Yen and U.S. dollar are undoubtedly thinking of following suit. Buying gold to hedge against the probability that the Yen and U.S. Dollar will be under attack in the not too distant future is not unwise.
THE FUTURE OF THE DELEVERAGING CRISIS
The coming phases of the deleveraging crisis will simply be different flavors of one major phenomenon with one major cause. We are saying this because we do not believe that most investors realize how long and pervasive this deleveraging crisis will be. If this were a baseball game, we would only be in the 2nd inning (for non baseball fans among you, that means we are only 20-25 percent through the crisis).
Furthermore, crises are still brewing with respect to the solvency of U.S. states, and the legal subdivisions within the countries in the European Union. These crises have yet to become globally recognized. In order to bail out the states and other governmental entities below the national level, a huge quantitative easing (money printing) process will eventually be instituted in many countries. The effect will be to keep the developed nations economies (and their currencies) under pressure for years.
Governments are not alone. Many industries, such as banking, financial services, and insurance remain under pressure to decrease their leverage and raise capital.
GLOBAL ECONOMICS
OIL DEMAND UP STRONGLY
The global demand for oil is created by demand for energy in China, India, and other Asian nations. The world’s supply is not sufficient to handle all of the demand. Although some pessimists talk about gluts, any price declines in oil will be short-lived. We are buyers of oil on dips and we continue to expect oil prices to top $90/barrel by the end of 2010.
GOLD IS IN DEMAND BY EUROPEANS
Europeans have been buying gold (which is at a new high in Euro terms). The obvious reason for their purchases is to hedge the negative effect of a declining Euro. Many Europeans remember that two world wars were fought on their territory, and that owning some gold has saved many lives and many fortunes. During times of crisis they gravitate strongly to gold, and the current crisis is no exception. European central banks and the IMF may sell gold, but the average European is more likely a buyer than a seller.
U.S. STOCKS
U.S. stocks have been gradually rallying, and we believe that this rally could continue for a few months. It will cease when short term interest rates in the U.S. rise one or two more times. We continue to see a broad range of U.S. companies that are overpriced, but there are also values to be found for those who are bargain hunters.
INTEREST RATES
Interest rates in the U.S. and other parts of the world are starting to rise. The U.S. raised the Discount Rate last week and many pundits argued that the increase was of no importance. We disagree. For many decades, we have seen interest rate increases as a warning signal to get out of markets. In every country, stocks compete with short term interest rates for investors.
If short term rates start to rise, stocks always correct. U.S. interest rates have seen their lows. Historically, after the second or third rise in rates, U.S. stocks undergo a larger correction. When will the second and third rate increases take place? We imagine that they will happen before the end of 2010.
CHINA
China’s economy continues to expand in spite of concerns among uninformed observers that a slowdown is looming on the horizon.
It is worth noting the many internal changes taking place in China during its continued growth phase.
Change #1
For the past twenty years, migrant workers have streamed into the Eastern seaboard from the nation’s interior agricultural centers in search of manufacturing work, but today, that trend is changing. Farming families are now making money in agriculture or finding work closer to home. Migrants are no longer pouring into the East coast and the resulting shortage of migrant workers is sending up the price of labor. In many manufacturing areas wages are up 20 percent or more.
Change #2
Economic growth is now taking place in many regions of China, and the once ubiquitous assembly line manufacturing for export is now a smaller percentage of economic activity. Most new jobs are to be found in retail, consumer products, infrastructure, and heavy industry. These jobs are located throughout the country.
Change #3
A consumer economy is gradually developing. The savings rate, which we believe to be about 30 percent in China, will gradually fall as the government installs the beginnings of a social safety net. Currently, the (extended) family is the only social safety net and saving is key to family survival.
Change # 4
China has been building out their infrastructure for many years. The infrastructure development is by no means complete, but the build-out is very impressive not only in big cities but in second tier cities as well. This infrastructure will give China a competitive advantage in developing faster economic growth.
Change#5
China is targeting new industries to lead the world in the 21st century. Clean energy in all forms is one of their major undertakings.
Also worth noting:
Food price inflation in China and India is another worry. We expect inflation to be 5 percent in China in 2010.
China’s stock market has been consolidating and moving sideways due to a concerted raising of reserve requirements to stop speculation on real estate. We believe that about six months before rates peak China’s market will rise strongly. In the interim, we are selecting low P/E, fast growing companies.
INDIA
India’s economy is booming and, in our opinion, the Indian stock market is currently overpriced. Inflation is rising and we expect interest rates to follow. Although we applaud the job that Prime Minister Singh has done on the economic front, we will wait for a correction before moving into Indian shares. The growth areas include many sectors of the economy such as construction, pharmaceuticals, technology, consumer banking, real estate, and consumer goods. The nation’s infrastructure is slowly improving but will take decades to become first-world.
As many have heard, the IMF is selling a large amount of gold that was contributed to them by member countries in order to raise cash to help countries with problems. The countries who deposited the gold with the IMF have agreed to the sale, yet even with this large sale hanging over the market, gold prices remain strong. It is widely rumored that India will be the purchaser of the IMF’s gold.
Indian officials have stated from time to time in the world press that they are buyers of gold at market prices.
ATTRACTVE INVESTMENT AREAS
Bargains continue to be available, but one must be thorough and careful in picking them.
We continue to see growing countries that are well situated to supply the Chinese economic machine with raw materials or partially manufactured products as attractive investment opportunities.
We are concerned about some emerging markets due to high valuations. This has kept us out of India and Taiwan. We are currently focused on U.S. and European technology and energy companies, fast growing companies in the developed world, gold bullion and Canadian gold mining companies, companies with new oil discoveries (wherever they may be located), Indonesia, Thailand and some specific Chinese companies.
Thanks for listening.
Monty Guild and Tony Danaher http://www.guildinvestment.com/
Concerns grow over China's sale of US bonds; Evidence is mounting that Chinese sales of US Treasury bonds over recent months are intended as a warning shot to Washington over escalating political disputes rather than being part of a routine portfolio shift as thought at first.
Gerald Celente Predictions Owner of Trends research.
US will suffer its own Greek crisis Why worry about Greece? California and 40 other states owe alot more and are bankrupt.
FDIC's Problem Banks List: Where Will it End?
Thursday, February 25, 2010
Hyperinflation Watch
http://www.fgmr.com/us-treasury-takes-another-step-on-the-road-to-hyperinflation.html
DOOMED SOVEREIGN ALCHEMY
A leading bank analyst believes that ultimately, sovereign alchemy will fail. Egon von Greyerz is manager of the Matterhorn Asset Mgmt fund. He said, "When we look at the world economy today, wherever we turn, we see a wall of risk. And sadly this is an insurmountable wall of risk with risks that are totally unprecedented in history. There has never before been a potentially catastrophic combination of so many virtually bankrupt major sovereign states (US, UK, Spain, Italy Greece, Japan, and many more) and a financial system which is bankrupt but is temporarily kept alive with phony valuations and unlimited money printing. But governments will soon realise that they are not alchemists who can turn printed paper into gold. The consequences of the global financial crisis are potentially catastrophic." He describes an era coming to a close. The era was identified by a grand illusion, that governments through their central bankers could create prosperity from virtually unlimited money creation, vast expansion of debt, and migration away from industry. It will end in disaster. The folly was an insult to Economic Mother Nature. See "Sovereign Alchemy Will Fail" on the Matterhorn website (CLICK HERE).
Over-Arching Sovereign Debt Crises
The various state budget crises are increasing in severity. Here is the news from California, and Illinois.
Greece leads Europe's winter of discontent
What, Me Worry? Credit Default Swaps on US Treasuries. Oh, don't miss his advice at the end of the article: "Although sovereign defaults are hardly unknown, things would have to get incredibly bad for the US to default on Treasuries. And if they got that bad, you'd probably have been better off investing in a survivalist camp than CDSs."
Quantitative Easing May Have to Restart. (They're talking about monetization, folks. Be ready for some serious inflation, in coming years.)
A Desperate FDIC Begs Americans to Open Savings Accounts During "America Saves" Week
Chart of the Day: Banks Continue to Pull the Rug Out From Under the Economy
The Expanding Economics of Austerity
A trend to watch? Spokane Tax Assessor Wants Low Altitude High Resolution Photos of Private Property.
http://www.fgmr.com/us-treasury-takes-another-step-on-the-road-to-hyperinflation.html
DOOMED SOVEREIGN ALCHEMY
A leading bank analyst believes that ultimately, sovereign alchemy will fail. Egon von Greyerz is manager of the Matterhorn Asset Mgmt fund. He said, "When we look at the world economy today, wherever we turn, we see a wall of risk. And sadly this is an insurmountable wall of risk with risks that are totally unprecedented in history. There has never before been a potentially catastrophic combination of so many virtually bankrupt major sovereign states (US, UK, Spain, Italy Greece, Japan, and many more) and a financial system which is bankrupt but is temporarily kept alive with phony valuations and unlimited money printing. But governments will soon realise that they are not alchemists who can turn printed paper into gold. The consequences of the global financial crisis are potentially catastrophic." He describes an era coming to a close. The era was identified by a grand illusion, that governments through their central bankers could create prosperity from virtually unlimited money creation, vast expansion of debt, and migration away from industry. It will end in disaster. The folly was an insult to Economic Mother Nature. See "Sovereign Alchemy Will Fail" on the Matterhorn website (CLICK HERE).
Over-Arching Sovereign Debt Crises
The various state budget crises are increasing in severity. Here is the news from California, and Illinois.
Greece leads Europe's winter of discontent
What, Me Worry? Credit Default Swaps on US Treasuries. Oh, don't miss his advice at the end of the article: "Although sovereign defaults are hardly unknown, things would have to get incredibly bad for the US to default on Treasuries. And if they got that bad, you'd probably have been better off investing in a survivalist camp than CDSs."
Quantitative Easing May Have to Restart. (They're talking about monetization, folks. Be ready for some serious inflation, in coming years.)
A Desperate FDIC Begs Americans to Open Savings Accounts During "America Saves" Week
Chart of the Day: Banks Continue to Pull the Rug Out From Under the Economy
The Expanding Economics of Austerity
A trend to watch? Spokane Tax Assessor Wants Low Altitude High Resolution Photos of Private Property.
Wednesday, February 24, 2010
Jim Rogers says that the UK will lose its AAA bond rating this yea, ,and that inflation and a currency crisis inevitable.
World Economy to be Hit by Several Sovereign Defaults
Really...I can't imagine why...Idiots...
Consumer Confidence Down Again
Think Outside the Box: Maverick Investing in the Age of Obamanomics
Concerns Grow over China's Sale of US Bonds- The Daily Telegraph
FDIC: List of Troubled Banks at 16 Yr Peak- NY Times
Nearly 25% of US Mortgages Underwater- CNN Money
It won't be long before Greece falls.
Nationwide Strike Paralyzes Greece- Wall Street Journal
World Economy to be Hit by Several Sovereign Defaults
Really...I can't imagine why...Idiots...
Consumer Confidence Down Again
Think Outside the Box: Maverick Investing in the Age of Obamanomics
Concerns Grow over China's Sale of US Bonds- The Daily Telegraph
FDIC: List of Troubled Banks at 16 Yr Peak- NY Times
Nearly 25% of US Mortgages Underwater- CNN Money
It won't be long before Greece falls.
Nationwide Strike Paralyzes Greece- Wall Street Journal
Tuesday, February 23, 2010
Dear Jim, (Jim Sinclair http://www.jsmineset.com/)
The recent revelation from the Foundation for the study of cycles shows the massive loss of purchasing power of the US dollar begins in the third quarter of this year. We have about 3 months to prepare for this, if we believe this likely to happen. The US dollar, according to the foundation, will skid until 2012.. Others maintain it will go the way of all paper currencies to its intrinsic value, which is nothing.
Comment from a Porter Stansberry newsletter recently….his observations should give us pause to think more than just a little.
Porter comment: The most important thing to realize about a currency crisis is the U.S. dollar will lose a tremendous amount of its purchasing power.
You might think that’s great if you’ve got lots of U.S. dollar obligations – like a mortgage. But the reality is, the consequences of this kind of massive debt repudiation can’t be predicted… and will be extremely bad. Extremely bad.
For example, the economy will slow tremendously because of the disruption to the currency. Common services you take for granted today will become unavailable. Your credit cards will not work. There won’t be gas at the gas station. The grocery store will be empty. State and local employees won’t be paid on time – and may stop working. So while you might think there’s a silver lining to a currency crisis, there’s really not. The consequences of such a crisis will far outweigh any of the short-term profits you might think you’ve accrued.
Yes, technically, the smart thing to do now would be to borrow as much money as you can (at fixed interest rates) and then use the money to buy hard commodities – like gold, silver, oil, and farm land. Someone with a large income or a lot of wealth might be able to pull off this trade. My friend Doug Casey, for example, is essentially making this trade via large land holdings in Argentina and big investments in cattle. But Doug isn’t borrowing any money. And here’s why you probably shouldn’t either: You can’t know how the rules will change – but you can be sure they will.
For example, in the last big currency collapse I witnessed first hand (in Argentina in 2001/2002), the government simply closed all of the banks and forced a conversion of U.S. dollar savings into pesos. The government literally stole billions of U.S. dollars from its citizens. But that could never happen here, right?
Wrong. It already happened once in 1933. FDR stole about $250 billion worth of gold during the Great Depression. And discussions are underway right now in D.C. about taking all 401(k) savings and "exchanging" them for new government securities to "insure" the retirements of the American people. If the banks are all going bust because they can’t afford the fixed-rate loans they made before the crisis, what’s to say the government won’t simply allow the banks to unilaterally change interest rates on all of their existing loans? It could surely happen.
The point is, we’re facing a major, major crisis. I can’t tell you when the walls will come crashing down, but I can tell you it will happen at some point soon. Our government is bankrupt. Eventually that’s going to be very, very bad for anyone who isn’t prepared to get out of harm’s way.
The best advice I can offer you to survive is:
1. Hold gold bullion in a safe and secure place. Don’t tell anyone else you own it or where you’ve hidden it. (Personally, I’m fond of self-storage units outside the U.S.)
2. Do your best to get out of debt. If you can’t, make sure all of your obligations are in fixed-rate, nonrecourse loans. If possible, borrow from a foreign bank.
3. Don’t keep a penny saved in paper currency.
4. Own real estate – particularly productive real estate, like a farm. If possible, buy the same outside the U.S.
5. Get a second passport. It’s not as hard as you might think. If you’ve got $250,000 to spend and know the right people, you can even get a diplomatic assignment from another sovereign government, making you nearly invulnerable to the risk of currency/travel restrictions common during a currency crisis.
6. Stockpile anything you can’t live without – food, water, ammunition, medicines, toilet paper.
I’m sure this sounds crazy to most of you. But think about this.
In Argentina, the banks were closed for six weeks. There was no way to get cash. There was no way to use credit cards. People were selling their real estate for 10 cents on the dollar – but only if you had U.S. dollars. That’s how desperate they were for money. And when the banks re-opened, 75% of everyone’s cash savings had been stolen by the government. Plus, prices on every kind of basic commodity had tripled. The middle class was completely wiped out – and may never recover.
That will happen here at some point. I promise. And the way things are going, it will happen sooner than anyone expects.
CIGA Eric
How Long Can the US Dollar Defy Gravity?- Reuters
Harvard's Ferguson: US Empire on Thin Ice- The Business Insider
Nearly 20% of US Workers Underemployed- Yahoo! News
US Housing Market Hit by "Walkaways"- Financial Times
States Reported 5th Drop in Tax Revenue in 4Q:09- Rockefeller Institute
NY State Budget Gap May Grow 43% to $2B- Bloomberg
Protesters Blockade Greek Stock Market- Yahoo! Finance
Deathbed of Keynesian Economics Will Be in UK- Bloomberg
The recent revelation from the Foundation for the study of cycles shows the massive loss of purchasing power of the US dollar begins in the third quarter of this year. We have about 3 months to prepare for this, if we believe this likely to happen. The US dollar, according to the foundation, will skid until 2012.. Others maintain it will go the way of all paper currencies to its intrinsic value, which is nothing.
Comment from a Porter Stansberry newsletter recently….his observations should give us pause to think more than just a little.
Porter comment: The most important thing to realize about a currency crisis is the U.S. dollar will lose a tremendous amount of its purchasing power.
You might think that’s great if you’ve got lots of U.S. dollar obligations – like a mortgage. But the reality is, the consequences of this kind of massive debt repudiation can’t be predicted… and will be extremely bad. Extremely bad.
For example, the economy will slow tremendously because of the disruption to the currency. Common services you take for granted today will become unavailable. Your credit cards will not work. There won’t be gas at the gas station. The grocery store will be empty. State and local employees won’t be paid on time – and may stop working. So while you might think there’s a silver lining to a currency crisis, there’s really not. The consequences of such a crisis will far outweigh any of the short-term profits you might think you’ve accrued.
Yes, technically, the smart thing to do now would be to borrow as much money as you can (at fixed interest rates) and then use the money to buy hard commodities – like gold, silver, oil, and farm land. Someone with a large income or a lot of wealth might be able to pull off this trade. My friend Doug Casey, for example, is essentially making this trade via large land holdings in Argentina and big investments in cattle. But Doug isn’t borrowing any money. And here’s why you probably shouldn’t either: You can’t know how the rules will change – but you can be sure they will.
For example, in the last big currency collapse I witnessed first hand (in Argentina in 2001/2002), the government simply closed all of the banks and forced a conversion of U.S. dollar savings into pesos. The government literally stole billions of U.S. dollars from its citizens. But that could never happen here, right?
Wrong. It already happened once in 1933. FDR stole about $250 billion worth of gold during the Great Depression. And discussions are underway right now in D.C. about taking all 401(k) savings and "exchanging" them for new government securities to "insure" the retirements of the American people. If the banks are all going bust because they can’t afford the fixed-rate loans they made before the crisis, what’s to say the government won’t simply allow the banks to unilaterally change interest rates on all of their existing loans? It could surely happen.
The point is, we’re facing a major, major crisis. I can’t tell you when the walls will come crashing down, but I can tell you it will happen at some point soon. Our government is bankrupt. Eventually that’s going to be very, very bad for anyone who isn’t prepared to get out of harm’s way.
The best advice I can offer you to survive is:
1. Hold gold bullion in a safe and secure place. Don’t tell anyone else you own it or where you’ve hidden it. (Personally, I’m fond of self-storage units outside the U.S.)
2. Do your best to get out of debt. If you can’t, make sure all of your obligations are in fixed-rate, nonrecourse loans. If possible, borrow from a foreign bank.
3. Don’t keep a penny saved in paper currency.
4. Own real estate – particularly productive real estate, like a farm. If possible, buy the same outside the U.S.
5. Get a second passport. It’s not as hard as you might think. If you’ve got $250,000 to spend and know the right people, you can even get a diplomatic assignment from another sovereign government, making you nearly invulnerable to the risk of currency/travel restrictions common during a currency crisis.
6. Stockpile anything you can’t live without – food, water, ammunition, medicines, toilet paper.
I’m sure this sounds crazy to most of you. But think about this.
In Argentina, the banks were closed for six weeks. There was no way to get cash. There was no way to use credit cards. People were selling their real estate for 10 cents on the dollar – but only if you had U.S. dollars. That’s how desperate they were for money. And when the banks re-opened, 75% of everyone’s cash savings had been stolen by the government. Plus, prices on every kind of basic commodity had tripled. The middle class was completely wiped out – and may never recover.
That will happen here at some point. I promise. And the way things are going, it will happen sooner than anyone expects.
CIGA Eric
How Long Can the US Dollar Defy Gravity?- Reuters
Harvard's Ferguson: US Empire on Thin Ice- The Business Insider
Nearly 20% of US Workers Underemployed- Yahoo! News
US Housing Market Hit by "Walkaways"- Financial Times
States Reported 5th Drop in Tax Revenue in 4Q:09- Rockefeller Institute
NY State Budget Gap May Grow 43% to $2B- Bloomberg
Protesters Blockade Greek Stock Market- Yahoo! Finance
Deathbed of Keynesian Economics Will Be in UK- Bloomberg
Monday, February 22, 2010
This is the entire story.
First the job losses must be stopped completely. Second, job creation must offer valid hope of returning to normal levels. Until then all talk of a sustainable economic recovery is economic propaganda.
A consumer based economy requires consumers, a fact not often discussed.
Obama giving black farmers $1.25 billion in reparations
Monday, February 22, 2010Text Size:
From Newsmax:Black farmers – possibly over 70,000 of them – will get cash payments and debt relief from the federal government totaling $1.25 billion, in reparation for alleged racial discrimination suffered under the Department of Agriculture’s loan programs, the Obama Administration has agreed.The president announced the deal on Thursday, applauding Agriculture Secretary Tom Vilsack and Attorney General Eric Holder for “bringing these long-ignored claims of African American farmers to a rightful conclusion.”Read full article...
I'm afraid were next...
Argentina Seizes Central Bank.
Time magazine: How Big is the Threat from Option ARMs?
FICO and the Credit Card Financial Prison: How a Three-Digit Credit Score Reflects Consumerism and Not Financial Independence
What Recession?
Boeing Sends More than 1,000 Layoff Notices
This is just a test to see if the Sheeplez are paying attention...ARE YOU???
Citigroup Warns Customers it May Refuse to Allow Withdrawals
Fastest Shrinking Restaurant Chains
This is EXACTLY what the mainstream media did during the depression...Don't fall for it, Protect yourself A.S.A.P.
Poll: Economists See "Healthy" Expansion Underway. (Cheery folk, those mainstream economists. They almost always look on the bright side...)
Millions of Unemployed Face Years Without Jobs
Here's the 100 TRILLION DOLLAR Question...
So Where Did All The Money Go?
They get rid of this guy and replace him with ...Guess who... A former Goldman sacks buddy.
Is it any wonder? Goldman sold secret derivatives to Greece to help them hide their dept...
Greece Changes Chief Debt Manager as Pressure Grows
Atleast California wasn't first to completely fall... but next inline.
Jim Sinclair’s Commentary
Every state of the USA and every state of the EU will be bailed out by one method or another. The effect will be "QE to Infinity" in the Western world.
‘Doomsday is here for the state of Illinois’ It will take a massive tax increase — and $2 billion more in cuts — to reach solvency, group says February 22, 2010 BY DAVE McKINNEY Sun-Times Springfield Bureau Chief
SPRINGFIELD — To become solvent, the state must enact the largest tax-increase package in Illinois history, whack another $2 billion from already starved government programs and wrest major financial concessions from the state’s unionized work force, a nonpartisan government watchdog contends.
In a new analysis of Illinois’ "horrific" finances, the Civic Federation lays out the painful choices awaiting Gov. Quinn and the Legislature as they stare down an epic $12.8 billion budget deficit that has choked the flow of state cash to public universities and schools, transit systems and social-service agencies to the point of economic collapse.
"Doomsday is here for the State of Illinois," said Laurence Msall, the organization’s president.
The Civic Federation recommends that the state income tax be increased from 3 percent to 5 percent for individuals, that retirees’ pension and Social Security checks be taxed for the first time at the same rate as workers’ paychecks, and the tax on cigarettes be raised by another $1 per pack. The group also favors getting rid of $181 million in corporate tax breaks.
Those tax increases, which would generate more than $8 billion, should come only if the state first can persuade its unionized employees to pay more toward their pensions and health care, cut pension benefits for new workers and reduce overall spending by $2.1 billion to 2007 levels. Medicaid programs and elementary and secondary schools would be spared from those cuts to avoid sacrificing federal stimulus dollars, Msall said.
More…
First the job losses must be stopped completely. Second, job creation must offer valid hope of returning to normal levels. Until then all talk of a sustainable economic recovery is economic propaganda.
A consumer based economy requires consumers, a fact not often discussed.
Obama giving black farmers $1.25 billion in reparations
Monday, February 22, 2010Text Size:
From Newsmax:Black farmers – possibly over 70,000 of them – will get cash payments and debt relief from the federal government totaling $1.25 billion, in reparation for alleged racial discrimination suffered under the Department of Agriculture’s loan programs, the Obama Administration has agreed.The president announced the deal on Thursday, applauding Agriculture Secretary Tom Vilsack and Attorney General Eric Holder for “bringing these long-ignored claims of African American farmers to a rightful conclusion.”Read full article...
I'm afraid were next...
Argentina Seizes Central Bank.
Time magazine: How Big is the Threat from Option ARMs?
FICO and the Credit Card Financial Prison: How a Three-Digit Credit Score Reflects Consumerism and Not Financial Independence
What Recession?
Boeing Sends More than 1,000 Layoff Notices
This is just a test to see if the Sheeplez are paying attention...ARE YOU???
Citigroup Warns Customers it May Refuse to Allow Withdrawals
Fastest Shrinking Restaurant Chains
This is EXACTLY what the mainstream media did during the depression...Don't fall for it, Protect yourself A.S.A.P.
Poll: Economists See "Healthy" Expansion Underway. (Cheery folk, those mainstream economists. They almost always look on the bright side...)
Millions of Unemployed Face Years Without Jobs
Here's the 100 TRILLION DOLLAR Question...
So Where Did All The Money Go?
They get rid of this guy and replace him with ...Guess who... A former Goldman sacks buddy.
Is it any wonder? Goldman sold secret derivatives to Greece to help them hide their dept...
Greece Changes Chief Debt Manager as Pressure Grows
Atleast California wasn't first to completely fall... but next inline.
Jim Sinclair’s Commentary
Every state of the USA and every state of the EU will be bailed out by one method or another. The effect will be "QE to Infinity" in the Western world.
‘Doomsday is here for the state of Illinois’ It will take a massive tax increase — and $2 billion more in cuts — to reach solvency, group says February 22, 2010 BY DAVE McKINNEY Sun-Times Springfield Bureau Chief
SPRINGFIELD — To become solvent, the state must enact the largest tax-increase package in Illinois history, whack another $2 billion from already starved government programs and wrest major financial concessions from the state’s unionized work force, a nonpartisan government watchdog contends.
In a new analysis of Illinois’ "horrific" finances, the Civic Federation lays out the painful choices awaiting Gov. Quinn and the Legislature as they stare down an epic $12.8 billion budget deficit that has choked the flow of state cash to public universities and schools, transit systems and social-service agencies to the point of economic collapse.
"Doomsday is here for the State of Illinois," said Laurence Msall, the organization’s president.
The Civic Federation recommends that the state income tax be increased from 3 percent to 5 percent for individuals, that retirees’ pension and Social Security checks be taxed for the first time at the same rate as workers’ paychecks, and the tax on cigarettes be raised by another $1 per pack. The group also favors getting rid of $181 million in corporate tax breaks.
Those tax increases, which would generate more than $8 billion, should come only if the state first can persuade its unionized employees to pay more toward their pensions and health care, cut pension benefits for new workers and reduce overall spending by $2.1 billion to 2007 levels. Medicaid programs and elementary and secondary schools would be spared from those cuts to avoid sacrificing federal stimulus dollars, Msall said.
More…
Banana Republics Need Compliant Central Banks. Here is an excerpt: "Wait a minute. Huge increase in government spending. Fast-rising debt. Tax the rich. Appoint political advisors to run the central bank. That’s us! "
Buffett's Partner: 'It's Over' for U.S. Economy Charlie Munger, Warren Buffett’s longtime business partner in Berkshire Hathaway, warns that the U.S. economic empire is crumbling before our eyes, thanks to federal debt and poor planning. The article leads with this headline: “Basically, It’s Over.” Read the Entire Article — Go Here Now.
Slowly We Turn
Howard Katz
Bloomberg Video Interview: February 22
posted by HMS at Marc Faber Blog - 56 minutes ago
Marc Faber, the publisher of the Gloom, Boom & Doom report, talks with Bloomberg's Mike Firn about his forecast for U.S. stocks. Faber, speaking in Tokyo, also discusses Federal Reserve monetary policy, t...
Governors: It's Going to Get Worse- NY Times
Stimulus Actually Raised Unemployment- Investors' Business Daily
Gold Survives IMF Dumping & Fed Tightening- The Business Insider
4 More US Banks Fail; Total Now 174- Epoch Times
China Taps More Saudi Crude than US- Financial Times
Jobless Claims, Inflation Jumps as Economy Wobbles
Monetary Inflation and the 32 Cent Gallon of Gas (The Mogambo Guru)
Law of Diminishing Returns of Credit Expansion
Governors Brace for More Economic Turmoil
Great time to fill the pantry.
US Consumer Prices Fall for First Time in 27 Years
Pound Slides Further on Surprise Fed Rate Raise
”Hold on, my friends, to the Constitution and to the Republic for which it stands. Miracles do not cluster and what has happened once in 6,000 years, may not happen again. Hold on to the Constitution; for if the American Constitution should fail, there will be anarchy throughout the world." - Daniel Webster
Buffett's Partner: 'It's Over' for U.S. Economy Charlie Munger, Warren Buffett’s longtime business partner in Berkshire Hathaway, warns that the U.S. economic empire is crumbling before our eyes, thanks to federal debt and poor planning. The article leads with this headline: “Basically, It’s Over.” Read the Entire Article — Go Here Now.
Slowly We Turn
Howard Katz
Bloomberg Video Interview: February 22
posted by HMS at Marc Faber Blog - 56 minutes ago
Marc Faber, the publisher of the Gloom, Boom & Doom report, talks with Bloomberg's Mike Firn about his forecast for U.S. stocks. Faber, speaking in Tokyo, also discusses Federal Reserve monetary policy, t...
Governors: It's Going to Get Worse- NY Times
Stimulus Actually Raised Unemployment- Investors' Business Daily
Gold Survives IMF Dumping & Fed Tightening- The Business Insider
4 More US Banks Fail; Total Now 174- Epoch Times
China Taps More Saudi Crude than US- Financial Times
Jobless Claims, Inflation Jumps as Economy Wobbles
Monetary Inflation and the 32 Cent Gallon of Gas (The Mogambo Guru)
Law of Diminishing Returns of Credit Expansion
Governors Brace for More Economic Turmoil
Great time to fill the pantry.
US Consumer Prices Fall for First Time in 27 Years
Pound Slides Further on Surprise Fed Rate Raise
”Hold on, my friends, to the Constitution and to the Republic for which it stands. Miracles do not cluster and what has happened once in 6,000 years, may not happen again. Hold on to the Constitution; for if the American Constitution should fail, there will be anarchy throughout the world." - Daniel Webster
Sunday, February 21, 2010
Jim Sinclair’s Commentary
Until the consumer can participate, no significant or sustainable recovery can occur.
Worse than this is the pain in Main Street gifted from the Dark Side in the form of OTC derivatives.
Millions of Unemployed Face Years Without Jobs By PETER S. GOODMAN NY Times
BUENA PARK, Calif. —
Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.
Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.
Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.
Yet the social safety net is already showing severe strains. Roughly 2.7 million jobless people will lose their unemployment check before the end of April unless Congress approves the Obama administration’s proposal to extend the payments, according to the Labor Department.
Here in Southern California, Jean Eisen has been without work since she lost her job selling beauty salon equipment more than two years ago. In the several months she has endured with neither a paycheck nor an unemployment check, she has relied on local food banks for her groceries.
More…
People around the world are so stupid they will believe anything....Cap and trade tax...
is a tax on breathing...
1. Global Warming Scientist Admits Doubts
Proponents of man-made global warming have suffered a serious blow as leading climate change scientist Phil Jones now acknowledges that the earth may have been warmer in medieval times than now.
Jones also conceded in an interview with the BBC that during the past 15 years there has been no “statistically significant” warming.
“The admissions will be seized on by skeptics as fresh evidence that there are serious flaws at the heart of the science of climate change and the orthodoxy that recent rises in temperature are largely made-made,” Britain‘s Daily Mail observed.
Jones recently stepped down as director of the University of East Anglia’s Climatic Research Unit in Britain after leaked e-mails indicated that scientists there were manipulating data to strengthen the argument for man-made global warming.
The data have been used to support efforts by the United Nations’ Intergovernmental Panel on Climate Change (IPCC) to urge governments to cut carbon dioxide emissions and to produce the “hockey stick graph” that shows temperatures relatively stable for centuries before rising sharply in recent decades.
Critics of global warming crusaders believe there is evidence that the world was warmer than today between about 800 and 1300 A.D., during the so-called Medieval Warm Period (MWP), due to evidence of high temperatures in northern countries.
“There is much debate over whether the Medieval Warm Period was global in extent or not,” Jones said in the interview.
“The MWP is most clearly expressed in parts of North America, the North Atlantic, and Europe and parts of Asia.
“For it to be global in extent, the MWP would need to be seen clearly in more records from the tropical regions and the Southern Hemisphere. There are very few palaeoclimatic records for these latter two regions.
“Of course, if the MWP was shown to be global in extent and as warm or warmer than today, then obviously the late 20th century warmth would not be unprecedented.”
Marc Sheppard, environment editor of American Thinker, declares: “As the entire anthropogenic global warming theory is predicated on correlation with rising CO2 levels, this first-such confession from an IPCC senior scientist is nothing short of earth-shattering.”
He also writes: “Indeed, we know that, during the MWP, ice-free seas allowed the Vikings to settle a then comfortably warm Greenland, where colonies flourished for many centuries. Modern archaeologists digging through [Greenland’s] permafrost have uncovered bones and artifacts attesting to the villages established there.”
Despite his concession that there has been no “statistically significant” warming over the past 15 years, Jones still maintains that he is “100 percent confident” the climate has warmed and said “there’s evidence that most of the warming since the 1950s is due to human activity.”
Until the consumer can participate, no significant or sustainable recovery can occur.
Worse than this is the pain in Main Street gifted from the Dark Side in the form of OTC derivatives.
Millions of Unemployed Face Years Without Jobs By PETER S. GOODMAN NY Times
BUENA PARK, Calif. —
Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.
Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.
Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.
Yet the social safety net is already showing severe strains. Roughly 2.7 million jobless people will lose their unemployment check before the end of April unless Congress approves the Obama administration’s proposal to extend the payments, according to the Labor Department.
Here in Southern California, Jean Eisen has been without work since she lost her job selling beauty salon equipment more than two years ago. In the several months she has endured with neither a paycheck nor an unemployment check, she has relied on local food banks for her groceries.
More…
People around the world are so stupid they will believe anything....Cap and trade tax...
is a tax on breathing...
1. Global Warming Scientist Admits Doubts
Proponents of man-made global warming have suffered a serious blow as leading climate change scientist Phil Jones now acknowledges that the earth may have been warmer in medieval times than now.
Jones also conceded in an interview with the BBC that during the past 15 years there has been no “statistically significant” warming.
“The admissions will be seized on by skeptics as fresh evidence that there are serious flaws at the heart of the science of climate change and the orthodoxy that recent rises in temperature are largely made-made,” Britain‘s Daily Mail observed.
Jones recently stepped down as director of the University of East Anglia’s Climatic Research Unit in Britain after leaked e-mails indicated that scientists there were manipulating data to strengthen the argument for man-made global warming.
The data have been used to support efforts by the United Nations’ Intergovernmental Panel on Climate Change (IPCC) to urge governments to cut carbon dioxide emissions and to produce the “hockey stick graph” that shows temperatures relatively stable for centuries before rising sharply in recent decades.
Critics of global warming crusaders believe there is evidence that the world was warmer than today between about 800 and 1300 A.D., during the so-called Medieval Warm Period (MWP), due to evidence of high temperatures in northern countries.
“There is much debate over whether the Medieval Warm Period was global in extent or not,” Jones said in the interview.
“The MWP is most clearly expressed in parts of North America, the North Atlantic, and Europe and parts of Asia.
“For it to be global in extent, the MWP would need to be seen clearly in more records from the tropical regions and the Southern Hemisphere. There are very few palaeoclimatic records for these latter two regions.
“Of course, if the MWP was shown to be global in extent and as warm or warmer than today, then obviously the late 20th century warmth would not be unprecedented.”
Marc Sheppard, environment editor of American Thinker, declares: “As the entire anthropogenic global warming theory is predicated on correlation with rising CO2 levels, this first-such confession from an IPCC senior scientist is nothing short of earth-shattering.”
He also writes: “Indeed, we know that, during the MWP, ice-free seas allowed the Vikings to settle a then comfortably warm Greenland, where colonies flourished for many centuries. Modern archaeologists digging through [Greenland’s] permafrost have uncovered bones and artifacts attesting to the villages established there.”
Despite his concession that there has been no “statistically significant” warming over the past 15 years, Jones still maintains that he is “100 percent confident” the climate has warmed and said “there’s evidence that most of the warming since the 1950s is due to human activity.”
Saturday, February 20, 2010
"Crisis of Confidence": Risks of US Defaults are Very Real
Credit Markets Flash Hottest Warning Signal Since Crisis
Federal deficit at $430.69 billion through January
Butler tells King World News metals are 'locked and loaded' for rally
Jim Sinclair’s Commentary
This is totally shocking. The bank advises clients that the bank can have a bank holiday by simple declaration.
Citigroup Warns Customers It May Refuse To Allow Withdrawals John Carney Feb. 19, 2010, 2:57 PM
The image of banks locking their doors to keep customers from making withdrawals during a bank run is what immediately came to mind when we heard that Citigroup was telling customers it has the right to prevent any withdrawals from checking accounts for seven days.
"Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change," Citigroup said on statements received by customers all over the country.
What’s going on? It seems that this is something of an error. The seven day notice policy only applies to customers in Texas, Ira Stoll reports at The Future of Capitalism. It was accidentally included on customer statements nationwide.
"Whatever the explanation, it doesn’t exactly inspire confidence in Citi," Stoll writes. "But it’s hard to believe a bank would be sending out a notice like that on its statements."
More…
Five Million Workers to Exhaust Unemployment Benefits by June.
I hope for your sake you have filled the pantry and freezer...
Expiration dates mean very little.
What to expect from the commercial real estate crisis
Greece loses EU voting power in blow to sovereignty
Four more US banks are closed.
Premiums Jump 14% on Private Medicare Plans
Asian Markets Drop On Surprise Fed Rate Hike
Credit Markets Flash Hottest Warning Signal Since Crisis
Federal deficit at $430.69 billion through January
Butler tells King World News metals are 'locked and loaded' for rally
Jim Sinclair’s Commentary
This is totally shocking. The bank advises clients that the bank can have a bank holiday by simple declaration.
Citigroup Warns Customers It May Refuse To Allow Withdrawals John Carney Feb. 19, 2010, 2:57 PM
The image of banks locking their doors to keep customers from making withdrawals during a bank run is what immediately came to mind when we heard that Citigroup was telling customers it has the right to prevent any withdrawals from checking accounts for seven days.
"Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change," Citigroup said on statements received by customers all over the country.
What’s going on? It seems that this is something of an error. The seven day notice policy only applies to customers in Texas, Ira Stoll reports at The Future of Capitalism. It was accidentally included on customer statements nationwide.
"Whatever the explanation, it doesn’t exactly inspire confidence in Citi," Stoll writes. "But it’s hard to believe a bank would be sending out a notice like that on its statements."
More…
Five Million Workers to Exhaust Unemployment Benefits by June.
I hope for your sake you have filled the pantry and freezer...
Expiration dates mean very little.
What to expect from the commercial real estate crisis
Greece loses EU voting power in blow to sovereignty
Four more US banks are closed.
Premiums Jump 14% on Private Medicare Plans
Asian Markets Drop On Surprise Fed Rate Hike
Friday, February 19, 2010
"But make no mistake: the dollar is in trouble —
one foot in the grave and the other on a banana peel."
Bill Jenkins
"It is not the function of our Government to keep the citizen from falling into error; it is the function of the citizen to keep the Government from falling into error." - American Communications Association v. Douds, 339 U.S. 382,442
With the lowest price, you better own at least 100 of these. Think of it as an insurance policy for your savings.
http://bullion.nwtmint.com/silver_stagecoach.php
FDIC Opening New Offices to Handle Failing Banks- Chicago Tribune
South Carolina Lawmaker Seeks to Ban Federal Currency
Asia Leads the Global End to Cheap Money- NY Times
In DC, More Evidence Comm RE Is Faltering- Washington Post
If things are improving..then why do we need this???
Obama to Unveil Additional Homeowner Aid- Wall Street Journal
Murray Pollitt: Farewell to all the emperors
Urge Ventura's TV show to report gold, silver suppression schemes
J.S. Kim: IMF gold sales vs. the alchemy of gold futures
Gold Stock Bull sees the IMF as GATA does
Now that China is selling Dollars as fast as it can, Japan holds the largest amounts of U.S. dept.
Who Owns America? Top Holders of US Debt
one foot in the grave and the other on a banana peel."
Bill Jenkins
"It is not the function of our Government to keep the citizen from falling into error; it is the function of the citizen to keep the Government from falling into error." - American Communications Association v. Douds, 339 U.S. 382,442
With the lowest price, you better own at least 100 of these. Think of it as an insurance policy for your savings.
http://bullion.nwtmint.com/silver_stagecoach.php
FDIC Opening New Offices to Handle Failing Banks- Chicago Tribune
South Carolina Lawmaker Seeks to Ban Federal Currency
Asia Leads the Global End to Cheap Money- NY Times
In DC, More Evidence Comm RE Is Faltering- Washington Post
If things are improving..then why do we need this???
Obama to Unveil Additional Homeowner Aid- Wall Street Journal
Murray Pollitt: Farewell to all the emperors
Urge Ventura's TV show to report gold, silver suppression schemes
J.S. Kim: IMF gold sales vs. the alchemy of gold futures
Gold Stock Bull sees the IMF as GATA does
Now that China is selling Dollars as fast as it can, Japan holds the largest amounts of U.S. dept.
Who Owns America? Top Holders of US Debt
Thursday, February 18, 2010
I hope you have been paying attention...
If not.. one day it will dawn on you and it will be too late.
Fed Raises Discount Rate By Quarter Point to .75%
January wholesale prices jump 1.4 percent. "That equates to a 16.8% annual wholesale price inflation rate!"
And now, news that the ratcheting-up has begun: Fed bumps up rate banks pay for emergency loans.
Gold May Advance to $1,400 in 12 Mths
Pew: US State Pension Funds Have $1T Shortfall- Reuters
Muni Threat: Cities Weigh Chapter 9- Wall Street Journal
Recession's Uneven Toll - Nebraska v California- USA Today
National Debt, Budget Deficit Scary Forecast for Taxpayers: Obama to Sign Fiscal Reform, Economists Predict Cutbacks, Tax Increases
Foreigners cut Treasury stakes; rates could rise
US Looks to Reluctant Foreign Investors to Help Fund the Housing Market
Chimerica's Monetary Management: China Has a Plan, US Doesn't
China Sells $34.2 Billion of US Treasury Bonds
German Economic Expectations Deteriorate
US States with High Jobless Rates Outsource Food Stamp Services Jobs...To India!
Sacramento, California: Region's Shuttered Stores Tell a Thousand Stories
Market Commentary From Monty Guild Posted: Feb 18 2010 By: Monty Guild Post Edited: February 18, 2010 at 5:00 pm
Filed under: Guild Investment
“He who asks is a fool for five minutes, but he who does not ask remains a fool forever.”
-Chinese Proverb
DEBT LEVELS IN G-7 COUNTRIES
We continue to be positive on Asia. One of the major reasons we currently favor Asia is the fact that public debt in the G-7 nations (U.S., Britain, France, Canada, Germany, Japan, and Italy) is expected to be over 119% of their combined GDP in 2014; a stunning figure.
Imagine owning a business with gross revenues of $1 million, outstanding debts of $1.19 million, and cash flow from your business to service the debt of about 5% of gross revenues. This means the company has only $50,000 per year to service the outstanding debt. If the average interest rate on the company’s debt is 5%, the debt load on your company would be increasing your debt each year. Your repayment of $50,000 would be less than your interest expense about $59,500.
Imagine further that you forgo using the cash from the business for debt payment, and choose to borrow more to keep your debt payments current. Bankruptcy would seem to be only a matter of time for the company. At some point, finding suckers (lenders) will be difficult.
DEBT LEVELS IN EMERGING ASIA By 2014, emerging Asia is expected to see their debt burden decline from 35% of GDP to 32% of GDP.
THE CRISIS OF THE EUROPEAN SOCIALIST MODEL
Greece’s problems have been widely reported. It is rumored and expected that Ireland, Spain, Portugal, and Italy may soon join them in asking for handouts from their neighboring European countries.
The problems stem from the countries’ highly-paid government employees and the long-term promises made to government employees. Relative to the private sector, public sector employment does little to generate GDP growth. The European welfare states handed out politically-expedient gifts to large public employee unions, and now the countries are facing bankruptcy as a result.
In a recent London Telegraph article by Ambrose Evens-Pritchard, the author captures German sentiment by quoting an article in a German newspaper, the Frankfurter Allgemeine. The German paper asked why taxpayers should bail out the debts of a country that thinks it an outrage to raise the retirement age to 63. “Should Germans have to work in the future until 69 instead of 67 so that Greeks can enjoy early retirement?”
Evans-Pritchard goes on to say, “Europe’s leaders still refuse to face the awful truth: that monetary union is unworkable as constructed. That different labour markets, different sensitivities to interest rates, different economic structures, have caused the gap between north and south to grow ever wider; that a chunk of Europe…is on the cusp of a debt deflation spiral.”
This spells big belt-tightening in the aforementioned five heavily indebted European countries. It also puts the entire Euro community in danger of losing its common currency over time; it is possible that several countries will have to leave the Euro and reestablish their own currencies at devalued levels.
Below is a link to an important New York Times article about how global investment banks helped Greece and other countries hide the truth about their finances for many years.
To Read Article Click Here.
OUR MARKET VIEWS
GOLD AND CURRENCIES
We believe the current and ongoing European crisis gives gold an impetus to move higher. We have been adding to our gold positions at current levels and will continue to buy if prices fall.
Yesterday’s transparent attempt by the IMF to scare the gold market down by announcing a sale of gold by European IMF contributors has been a failure. This reminds us very much of the situation in the 1970’s when the IMF gold sale was met with strong demand. When the markets recognized that there was strong demand in spite of the IMF sales, gold moved much higher within a few months.
Today, it is clear that there is large demand for gold from central banks. China, India, Sri Lanka, and Russia have been buyers at these price levels, and we are sure there are others. Many nations have openly discussed their intention to expand the gold component of their reserves. Technically, gold look remarkably strong in the face of attempted downward manipulation.
The Australian and Canadian dollars appear to be building technical bases and will resume their rise. On the other hand, we remain bearish on the Euro and prefer the U.S. dollar to that currency.
GLOBAL STOCKS
On dips, we are gradually accumulating Chinese, Thai, Malaysian, Indonesian, and other undervalued foreign stocks.
Within the developed world, we are focusing on Canadian and Australian energy and precious metals companies, and a few U.S. technology companies which are fast-growing and selling at low valuations.
OIL
We are buying oil related companies which we believe will make substantial new discoveries in coming months.
SUMMARY
In general, we prefer to be conservative; making purchases on market weakness to capitalize on the current volatile, and often irrational, markets. After China finishes raising interest rates to reign in run-away real estate prices, and rising food prices, we expect the faster growing countries’ stock markets will resume their rising pattern.
Thanks for listening.
Monty Guild and Tony Danaher www.GuildInvestment.com
If not.. one day it will dawn on you and it will be too late.
Fed Raises Discount Rate By Quarter Point to .75%
January wholesale prices jump 1.4 percent. "That equates to a 16.8% annual wholesale price inflation rate!"
And now, news that the ratcheting-up has begun: Fed bumps up rate banks pay for emergency loans.
Gold May Advance to $1,400 in 12 Mths
Pew: US State Pension Funds Have $1T Shortfall- Reuters
Muni Threat: Cities Weigh Chapter 9- Wall Street Journal
Recession's Uneven Toll - Nebraska v California- USA Today
National Debt, Budget Deficit Scary Forecast for Taxpayers: Obama to Sign Fiscal Reform, Economists Predict Cutbacks, Tax Increases
Foreigners cut Treasury stakes; rates could rise
US Looks to Reluctant Foreign Investors to Help Fund the Housing Market
Chimerica's Monetary Management: China Has a Plan, US Doesn't
China Sells $34.2 Billion of US Treasury Bonds
German Economic Expectations Deteriorate
US States with High Jobless Rates Outsource Food Stamp Services Jobs...To India!
Sacramento, California: Region's Shuttered Stores Tell a Thousand Stories
Market Commentary From Monty Guild Posted: Feb 18 2010 By: Monty Guild Post Edited: February 18, 2010 at 5:00 pm
Filed under: Guild Investment
“He who asks is a fool for five minutes, but he who does not ask remains a fool forever.”
-Chinese Proverb
DEBT LEVELS IN G-7 COUNTRIES
We continue to be positive on Asia. One of the major reasons we currently favor Asia is the fact that public debt in the G-7 nations (U.S., Britain, France, Canada, Germany, Japan, and Italy) is expected to be over 119% of their combined GDP in 2014; a stunning figure.
Imagine owning a business with gross revenues of $1 million, outstanding debts of $1.19 million, and cash flow from your business to service the debt of about 5% of gross revenues. This means the company has only $50,000 per year to service the outstanding debt. If the average interest rate on the company’s debt is 5%, the debt load on your company would be increasing your debt each year. Your repayment of $50,000 would be less than your interest expense about $59,500.
Imagine further that you forgo using the cash from the business for debt payment, and choose to borrow more to keep your debt payments current. Bankruptcy would seem to be only a matter of time for the company. At some point, finding suckers (lenders) will be difficult.
DEBT LEVELS IN EMERGING ASIA By 2014, emerging Asia is expected to see their debt burden decline from 35% of GDP to 32% of GDP.
THE CRISIS OF THE EUROPEAN SOCIALIST MODEL
Greece’s problems have been widely reported. It is rumored and expected that Ireland, Spain, Portugal, and Italy may soon join them in asking for handouts from their neighboring European countries.
The problems stem from the countries’ highly-paid government employees and the long-term promises made to government employees. Relative to the private sector, public sector employment does little to generate GDP growth. The European welfare states handed out politically-expedient gifts to large public employee unions, and now the countries are facing bankruptcy as a result.
In a recent London Telegraph article by Ambrose Evens-Pritchard, the author captures German sentiment by quoting an article in a German newspaper, the Frankfurter Allgemeine. The German paper asked why taxpayers should bail out the debts of a country that thinks it an outrage to raise the retirement age to 63. “Should Germans have to work in the future until 69 instead of 67 so that Greeks can enjoy early retirement?”
Evans-Pritchard goes on to say, “Europe’s leaders still refuse to face the awful truth: that monetary union is unworkable as constructed. That different labour markets, different sensitivities to interest rates, different economic structures, have caused the gap between north and south to grow ever wider; that a chunk of Europe…is on the cusp of a debt deflation spiral.”
This spells big belt-tightening in the aforementioned five heavily indebted European countries. It also puts the entire Euro community in danger of losing its common currency over time; it is possible that several countries will have to leave the Euro and reestablish their own currencies at devalued levels.
Below is a link to an important New York Times article about how global investment banks helped Greece and other countries hide the truth about their finances for many years.
To Read Article Click Here.
OUR MARKET VIEWS
GOLD AND CURRENCIES
We believe the current and ongoing European crisis gives gold an impetus to move higher. We have been adding to our gold positions at current levels and will continue to buy if prices fall.
Yesterday’s transparent attempt by the IMF to scare the gold market down by announcing a sale of gold by European IMF contributors has been a failure. This reminds us very much of the situation in the 1970’s when the IMF gold sale was met with strong demand. When the markets recognized that there was strong demand in spite of the IMF sales, gold moved much higher within a few months.
Today, it is clear that there is large demand for gold from central banks. China, India, Sri Lanka, and Russia have been buyers at these price levels, and we are sure there are others. Many nations have openly discussed their intention to expand the gold component of their reserves. Technically, gold look remarkably strong in the face of attempted downward manipulation.
The Australian and Canadian dollars appear to be building technical bases and will resume their rise. On the other hand, we remain bearish on the Euro and prefer the U.S. dollar to that currency.
GLOBAL STOCKS
On dips, we are gradually accumulating Chinese, Thai, Malaysian, Indonesian, and other undervalued foreign stocks.
Within the developed world, we are focusing on Canadian and Australian energy and precious metals companies, and a few U.S. technology companies which are fast-growing and selling at low valuations.
OIL
We are buying oil related companies which we believe will make substantial new discoveries in coming months.
SUMMARY
In general, we prefer to be conservative; making purchases on market weakness to capitalize on the current volatile, and often irrational, markets. After China finishes raising interest rates to reign in run-away real estate prices, and rising food prices, we expect the faster growing countries’ stock markets will resume their rising pattern.
Thanks for listening.
Monty Guild and Tony Danaher www.GuildInvestment.com
Wednesday, February 17, 2010
Fed Should Sell Mortgage-Backed Securites: Plosser
The Federal Reserve should sell its U.S. mortgage-backed securities holdings sooner rather than later as the economic recovery gathers steam in order to extricate itself from fiscal policy, a senior central bank official said.
Jim Sinclair’s Commentary
Quite scary, yet totally logical.
Drowning in Debt: What the Nation’s Budget Woes Mean for You Economists Predict Cutbacks, Tax Increases That ‘Aren’t Even Imaginable’
By DEVIN DWYER WASHINGTON, Feb. 17, 2010
American political and economic leaders have sounded the alarm for years about the red ink rising in reports on the federal government’s fiscal health.
But now the problem of mounting national debt is worse than it ever has been before with — potentially dire consequences for taxpayers, according to a report by the nonpartisan Peterson-Pew Commission on Budget Reform.
"It keeps me awake at night, looking at all that red ink," said President Obama in Nashua, N.H., on Feb. 2. "Most of it is structural and we inherited it. The only way that we are going to fix it is if both parties come together and start making some tough decisions about our long-term priorities."
Obama will sign an executive order tomorrow that establishes a bipartisan National Commission on Fiscal Responsibility and Reform to make recommendations on how to reduce the country’s debt.
Over the past year alone, the amount the U.S. government owes its lenders has grown to more than half the country’s entire economic output, or gross domestic product.
More…
Fed Pres: Dollar Threatened by Federal Debt
New Wave of Foreclosures Feared by End of 2010- LA Times
Ron Paul: Are U.S. taxpayers bailing out Greece? Audit Fed to find out
For America, the Future Is Greek
On China Selling, Japan Again Top Treasury Holder
I told you... Soros was buying gold as he made a statement at Davos saying gold was a huge bubble.
Soros Doubled Gold ETF Stake in 4Q- Bloomberg
Foreigners Cut Treasury Stakes; Rates Could Rise
Are US Taxpayers Bailing Out Greece?
Credit Card Holders Face "Crippling" Rates
Collapse of Euro Inevitable, Bailing Out Greek Economy is Futile
L.A. Budget Crisis Threatens Jobs, Credit Rating
"An armed republic submits less easily to the rule of one of its citizens than a republic armed by foreign forces. Rome and Sparta were for many centuries well armed and free. The Swiss are well armed and enjoy great freedom. Among other evils caused by being disarmed, it renders you contemptible. It is not reasonable to suppose that one who is armed will obey willingly one who is unarmed; or that any unarmed man will remain safe among armed servants." - Niccolo Machiavelli, "The Prince" (1532)
Tuesday, February 16, 2010
Even Esquire magazine is trumpeting: "Inflation is coming, buy gold!"
most recent interview with Eric King of www.KingWorldNews.com.
Jim Sinclair
Click here to listen to the interview…
Jim Sinclair’s Commentary
Here is a definition and argumentation for the Management of Perspective Economics:
"The conscious and intelligent manipulation of the organized habits and opinions of the [public] is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country." – Edward Bernays
Jim Sinclair’s Commentary
Business has certainly changed. It was once done for profit, but is now done for blood.
Jim Sinclair’s Commentary
After reviewing these articles and knowing the ECB has given Greece two weeks to disclose every particular concerning the swap arrangements made between Greece and the usual suspects, the following are reasonable conclusions.
1. The over the counter derivatives are, without any doubt whatsoever, the culprit that took a normal recession into what may well be a decade of economic suffering. 2. The manufacturers of over the counter derivatives in all cases are the usual suspects. 3. Swaps can be used to make camouflaged loans which might well be to some degree what occurred between the US Fed and EU governments in the liquidity crisis. 4. Governments, even poor ones, have the capacity to defend themselves via their intelligence agencies if attacked.
Wall Street is made up of cowards that rush to turn each other in if it is in their benefit. The strategy of breaking countries could easily prove contra-productive as the deed lies in the paper trail.
Jim Sinclair’s Commentary
Iceland, Dubai, Greece and then six others. Do you not have the eyes to see what is happening?
Only gold will survive as a currency that is a storehouse of value.
This is a war that will be no less destructive than the two previous world wars. Being shot might be a more merciful way to die than at the hands of the takedowners.
Foreign Demand for Treasuries in Record Drop
Companies Pull Most Bond Sales since '07 Crisis
Gold Rises Most in 3 Mths on Dollar-Dumping Demand
F'closures Keep Downward Pressure on Home Prices
Goldman's O'Neill says 'something's brewing' with China's currency
Another argument for gold revaluation to avert debt deflation
China: the world’s next great economic crash; Like Dubai at the beginning of last year, China is now reaching the peak of a bubble.
Forget Greece, The US Almost Had a Failed Treasury Auction
Depression 2010: Western Fiat-Money Finished?
http://thedailybell.com/800/Depression-2010-Western-Fiat-Money-Finished.html
Sovereign Alchemy Will Fail
US Banks facing $1.2 Trillion Crisis Over Commercial Property Loans
Treasuries Tumble on Supply
The Wall Street Journal: A Growing Obsession: Rare Seeds. (When The Wall Street Journal starts to report about heirloom seeds, then it is time to batten down the hatches!)
most recent interview with Eric King of www.KingWorldNews.com.
Jim Sinclair
Click here to listen to the interview…
Jim Sinclair’s Commentary
Here is a definition and argumentation for the Management of Perspective Economics:
"The conscious and intelligent manipulation of the organized habits and opinions of the [public] is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country." – Edward Bernays
Jim Sinclair’s Commentary
Business has certainly changed. It was once done for profit, but is now done for blood.
Jim Sinclair’s Commentary
After reviewing these articles and knowing the ECB has given Greece two weeks to disclose every particular concerning the swap arrangements made between Greece and the usual suspects, the following are reasonable conclusions.
1. The over the counter derivatives are, without any doubt whatsoever, the culprit that took a normal recession into what may well be a decade of economic suffering. 2. The manufacturers of over the counter derivatives in all cases are the usual suspects. 3. Swaps can be used to make camouflaged loans which might well be to some degree what occurred between the US Fed and EU governments in the liquidity crisis. 4. Governments, even poor ones, have the capacity to defend themselves via their intelligence agencies if attacked.
Wall Street is made up of cowards that rush to turn each other in if it is in their benefit. The strategy of breaking countries could easily prove contra-productive as the deed lies in the paper trail.
Jim Sinclair’s Commentary
Iceland, Dubai, Greece and then six others. Do you not have the eyes to see what is happening?
Only gold will survive as a currency that is a storehouse of value.
This is a war that will be no less destructive than the two previous world wars. Being shot might be a more merciful way to die than at the hands of the takedowners.
Foreign Demand for Treasuries in Record Drop
Companies Pull Most Bond Sales since '07 Crisis
Gold Rises Most in 3 Mths on Dollar-Dumping Demand
F'closures Keep Downward Pressure on Home Prices
Goldman's O'Neill says 'something's brewing' with China's currency
Another argument for gold revaluation to avert debt deflation
China: the world’s next great economic crash; Like Dubai at the beginning of last year, China is now reaching the peak of a bubble.
Forget Greece, The US Almost Had a Failed Treasury Auction
Depression 2010: Western Fiat-Money Finished?
http://thedailybell.com/800/Depression-2010-Western-Fiat-Money-Finished.html
Sovereign Alchemy Will Fail
US Banks facing $1.2 Trillion Crisis Over Commercial Property Loans
Treasuries Tumble on Supply
The Wall Street Journal: A Growing Obsession: Rare Seeds. (When The Wall Street Journal starts to report about heirloom seeds, then it is time to batten down the hatches!)
Monday, February 15, 2010
BETTER START READING UP ON WEIMAR REPUBLIC AND ZIMBABWE...
Like I keep saying...They will print money till we run out of trees...
Stiglitz: U.S., U.K. Should Keep Printing, Spending Money
Faber: Buy Gold Even if the Price Falls
Americans stock up to be ready for end of the world
Debt Interest Will Lead to Default, Then War
Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says French banking chief. In the short term this could push the US Dollar up, and gold down.
The Least-Trusted Banks in America
The Debt Contretemps Everybody's Ignoring
Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says French banking chief. In the short term this could push the US Dollar up, and gold down.
The soon-to-be-released Generation Zero documentary looks like is destined to be a success. I noticed that Andrew Sullivan of The Daily Dish is giving it some coverage.
Greek FinMin unveils tax reform, wage policy
The latest from Mish Shedlock on "revenue enhancement" in the land of Ouzo: Greece Outlaws Cash Transactions Above 1500 Euros, Unveils New Taxes
Bipartisan Jobs Bill Won't Add Many Jobs
A European Crisis, Not a China Slowdown, Will Trigger a Global Collapse
Bankruptcy Bloodbath May Hit Muni Bond Owners Next
Euro Currency Union Showing Strain
Desolate Malls, Empty Offices May Come Soon
Doing the Dead Cat Bounce
Obama Says New Budget Rules Will Rein in Spending (Gee, it must be a matter of one's perspective, to have "out of control spending" seem "conservative"...)
Like I keep saying...They will print money till we run out of trees...
Stiglitz: U.S., U.K. Should Keep Printing, Spending Money
Faber: Buy Gold Even if the Price Falls
Americans stock up to be ready for end of the world
Debt Interest Will Lead to Default, Then War
Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says French banking chief. In the short term this could push the US Dollar up, and gold down.
The Least-Trusted Banks in America
The Debt Contretemps Everybody's Ignoring
Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says French banking chief. In the short term this could push the US Dollar up, and gold down.
You Should Be Long Wheat, Corn And Soybeans.
Greek Probe Uncovers ‘Long-Term Damage’ From Swaps Agreements
The Exit Strategy Will Be More Money Printing, More Monetization
posted by HMS at Marc Faber Blog - 5 hours ago
"The exit strategy in my view will be more money printing, more monetization. And whereas Ben Bernanke may talk about interest rates increases at some point, you could go to 10 percent interest rates or 20...
The soon-to-be-released Generation Zero documentary looks like is destined to be a success. I noticed that Andrew Sullivan of The Daily Dish is giving it some coverage.
Greek FinMin unveils tax reform, wage policy
The latest from Mish Shedlock on "revenue enhancement" in the land of Ouzo: Greece Outlaws Cash Transactions Above 1500 Euros, Unveils New Taxes
Bipartisan Jobs Bill Won't Add Many Jobs
A European Crisis, Not a China Slowdown, Will Trigger a Global Collapse
Bankruptcy Bloodbath May Hit Muni Bond Owners Next
Euro Currency Union Showing Strain
Desolate Malls, Empty Offices May Come Soon
Doing the Dead Cat Bounce
Obama Says New Budget Rules Will Rein in Spending (Gee, it must be a matter of one's perspective, to have "out of control spending" seem "conservative"...)
MAJOR UPDATE ON GLOBAL WARMING FRAUD.
Climategate U-turn as scientist at centre of row admits: There has been no global warming since 1995
Sunday, February 14, 2010
Rome (then the Western world) is burning!
Just like minorities did not see or wish to understand what the rise of Hitler meant to them, just like those that ran out onto the new beach revealed as the water retreated from Hawaiian beaches only to be inundated by the Tsunami, many are ignoring the organized and strategized attack now on Greece as the prelude to an attack on Spain, Italy, Ireland, Portugal and then major debts.
The US stands third in the line of weak structures, debt to GDP, and will come under attack by the ever-increasing wealth of the bear raiders via the CDS OTC derivative market.
Iceland, the weakest of all, was taken down. Now the target is Greece. Just as Europe fell to the Nazis, so might it to the Blitzkrieg by financial entities.
When J.P Morgan, the man, sought to settle a liquidity crisis, he asked Jesse Livermore to come and visit with him. He proposed that the famous Bear, Livermore, cease his short raids for the benefit of the country. Livermore, impressed by Morgan’s appeal, did so.
Quite to the contrary, we have made the most successful of the short raiders (derivative manufacturers) rich, and taken no meaningful action to restrict their mode of doing business.
Rome is burning and few understand why. Even less give a damn.
Jim Sinclair
Obamas an IDIOT and will do no such thing...If you don't believe me go to USDebtClock and write down the deficit amount today and compare it in a week-month or year...The fed will print money till we run out of trees...
President Obama Says US Must Tighten Economic Belt
Finally someone with a little common sence, but obama won't listen to him until there is no other option...obama will continue to bail out his buddies...
Volcker Says Must Let Big Financial Firms Fail
Wall Street Helped Cover Up Greek Debts, Fueling Crisis
U.S. debt will keep growing even with recovery
Seeking to crack the Fed's secrecy around the bank bailout
Bank of England falsified gold data to rig interest rates from 1925-31
Inflation: Ignoring Doesn't Make It Go Away
Commercial Real Estate's Coming $1.4 Trillion Crisis
Why Silver Price Will Boom to $50/Oz.
Bernanke Says Discount Rate May Rise "Before Long"
Trade Gap Unexpectedly Rises on Imports
How A New Jobless Era Will Transform America This raises interesting questions: What do all the jobless people do to survive now? What happens when the unemployment runs out? Will government increase welfare, which will raise taxes even more?
Wall Street Helped Cover Up Greek Debts, Fueling Crisis
Tactics like the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro, reports the New York Times.
Just like minorities did not see or wish to understand what the rise of Hitler meant to them, just like those that ran out onto the new beach revealed as the water retreated from Hawaiian beaches only to be inundated by the Tsunami, many are ignoring the organized and strategized attack now on Greece as the prelude to an attack on Spain, Italy, Ireland, Portugal and then major debts.
The US stands third in the line of weak structures, debt to GDP, and will come under attack by the ever-increasing wealth of the bear raiders via the CDS OTC derivative market.
Iceland, the weakest of all, was taken down. Now the target is Greece. Just as Europe fell to the Nazis, so might it to the Blitzkrieg by financial entities.
When J.P Morgan, the man, sought to settle a liquidity crisis, he asked Jesse Livermore to come and visit with him. He proposed that the famous Bear, Livermore, cease his short raids for the benefit of the country. Livermore, impressed by Morgan’s appeal, did so.
Quite to the contrary, we have made the most successful of the short raiders (derivative manufacturers) rich, and taken no meaningful action to restrict their mode of doing business.
Rome is burning and few understand why. Even less give a damn.
Jim Sinclair
Obamas an IDIOT and will do no such thing...If you don't believe me go to USDebtClock and write down the deficit amount today and compare it in a week-month or year...The fed will print money till we run out of trees...
President Obama Says US Must Tighten Economic Belt
Finally someone with a little common sence, but obama won't listen to him until there is no other option...obama will continue to bail out his buddies...
Volcker Says Must Let Big Financial Firms Fail
Wall Street Helped Cover Up Greek Debts, Fueling Crisis
U.S. debt will keep growing even with recovery
Seeking to crack the Fed's secrecy around the bank bailout
Bank of England falsified gold data to rig interest rates from 1925-31
Inflation: Ignoring Doesn't Make It Go Away
Commercial Real Estate's Coming $1.4 Trillion Crisis
Why Silver Price Will Boom to $50/Oz.
Bernanke Says Discount Rate May Rise "Before Long"
Trade Gap Unexpectedly Rises on Imports
How A New Jobless Era Will Transform America This raises interesting questions: What do all the jobless people do to survive now? What happens when the unemployment runs out? Will government increase welfare, which will raise taxes even more?
Wall Street Helped Cover Up Greek Debts, Fueling Crisis
Tactics like the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro, reports the New York Times.
Saturday, February 13, 2010
YOU DON'T PISS OFF YOUR BANKER...
China orders retreat from risky assets
We are so screwed...
The Dumping Begins: Chinese Reserve Managers Notified That Any Non-USG Guaranteed Securities Must Be Divested
Stocks Swoon After China Brakes Spending Again
Monopoly "Money "
Bailout panel cites commercial real estate danger
I told you they will print money till they run out of trees...and so will the U.S.
UK central bank says it may restart debt monetization
Money Supply Data Reveals "New Major Dip" Ahead
Famous Last Words: US Will "Never" Lose AAA Rating
THERE IS NO RECOVERY...PERIOD.
Jobless Claims Figures Raises Hopes for Recovery
Now why would they need to do this...any guesses?
Citi Plans Crisis Derivatives
Darryl Robert Schoon--Davos: The Bomb Shelter
Eurozone Economy Falters, Germany Flat
China orders retreat from risky assets
We are so screwed...
The Dumping Begins: Chinese Reserve Managers Notified That Any Non-USG Guaranteed Securities Must Be Divested
Stocks Swoon After China Brakes Spending Again
Monopoly "Money "
Bailout panel cites commercial real estate danger
I told you they will print money till they run out of trees...and so will the U.S.
UK central bank says it may restart debt monetization
Money Supply Data Reveals "New Major Dip" Ahead
Famous Last Words: US Will "Never" Lose AAA Rating
THERE IS NO RECOVERY...PERIOD.
Jobless Claims Figures Raises Hopes for Recovery
Now why would they need to do this...any guesses?
Citi Plans Crisis Derivatives
Darryl Robert Schoon--Davos: The Bomb Shelter
Eurozone Economy Falters, Germany Flat
Friday, February 12, 2010
The US is headed towards the same economic conditions of the second leg of the Great Depression. A 1933-1934 type unwind is coming. The only argument for a sustainable equity market in the Western World is the Weimar case.
All currencies are headed in one direction: down in storehouse of value character.
Gold is the only storehouse of value. Gold has demonstrated that clearly even in the face of the Crimex and the gold banks fighting it.
Respectfully,
Jim
Dear Comrades In Golden Arms,
Doesn't it get tiring to hear the propaganda of government and business over the airwaves telling us exactly what isn't correct? I started this morning on the note of the Fed going to drain one trillion by negotiations with money funds which I know is absolute bunk. Then I see two events today of blatant QE while I hear how the Fed is going to drain huge amounts of the liquidity that was added to the market. Coming up next will be the EU having a plan to bailout Greece, but the ECB will not say what that plan is because they have no plan, only intentions. Some people have observed that I know what gold is doing without looking because I feel it. Well, I do. Right now I feel totally frustrated by the degree of misinformation spewing out of every form of media. Nobody can be that stupid. They are either all kissing up, or there is a Propaganda Czar who runs it. I will go with the former and a tad of the later plus the fact that Wall Street is a major investor in F-TV. Is it possible that gold is fed up with the lies and distortions that are so apparent Mr. Fred barks at the TV? It is, and I sense it happened today. We have been discussing over the last few days the fact that no currency on the planet is any longer a storehouse of value. We are headed into a system of taking a ticket to get bailed out sovereign wise. The relationship between leading currency and gold is never going to be cancelled, but it is loosening. Gold is your only good insurance policy. Who knows, we may be long gold for a much greater period of time and price than I anticipated in 2001. Respectfully yours,
Jim
Jim Sinclair’s Commentary
Change the words “could be” to “are.”
Think the PIGS Are in Trouble? These 7 U.S. States Could Be Heading for Something Worse
Gregor Macdonald
The inevitable coming of the sovereign debt panic finally engulfed Europe this week as the derisively (or perhaps affectionately) named PIGS spilled their slop on the continent. But Portugal, Ireland, Greece, and Spain are hardly worthy of so much attention. In truth, they are little more than the currently favored proxies among the leveraged speculator community (cough) for the larger problem of all sovereign debt. Indeed, the credit default swaps on these smaller European satellite states were not alone this week in making large moves higher. UK sovereign risk rose strongly, and so did US sovereign risk. With a downgrade warning from Moody’s to boot.
Notable among three of the PIGS are their relatively small populations, and small contributions to either world or European GDP. While Spain has a population over 45 million, Portugal and Greece have populations roughly equal to a US state, such as Ohio–at around 10 million. And Ireland? The Emerald Isle has a population similar to Kentucky, at around 4 million. While the PIGS are without question a problem for Europe, whatever problems they present for Brussels are easily matched by the looming headache for Washington that’s coming from large US states such as California, Florida, Illinois, Ohio, and Michigan.
I’ve identified seven large US states by four criteria that are sure to cause trouble for Washington’s political class at least for the next 3 years, through the 2012 elections. These are states with big populations, very high rates of unemployment, and which have already had to borrow big to pay unemployment claims. In addition, as a kind of Gregor.us kicker, I’ve thrown in a fourth criteria to identify those states that are large net importers of energy. Because the step change to higher energy prices played, and continues to play, such a large role in the developed world’s financial crisis it’s instructive to identify those US states that will struggle for years against the rising tide of higher energy costs.
First, let’s consider a large state that didn’t make my list. Texas didn’t make the list because its unemployment rate has not risen high enough to reach my cutoff: a state must register broad, U-6 underemployment above 15%, and currently Texas has only reached 13.7% on that measure. Also, Texas’s total energy production nearly perfectly matches its total energy consumption. Of course, Texas has indeed had to borrow more than a billion dollars so far to pay unemployment claims, thus technically bankrupting its unemployment trust fund. That meets my criteria. But, it’s instructive to note Texas’ energy production capacity in this regard, as that produces dollars. And one of the big reasons US states are under so much pressure, like their European counterparts, is that they cannot print currency. Being able to produce oil and gas is the next best thing to printing currency. So, Texas doesn’t make my list.
More…
Jim Sinclair’s Commentary
Be prepared. The Money Vultures will be circling the dollar soon.
Credit Suisse Declares the U.S. a Riskier Investment Than Indonesia By Megan Carpentier 2/12/10 1:47 PM
Amid fears that Switzerland might come to an agreement with the United States on banking privacy and tax evasion disclosures, Credit Suisse issued a report identifying those countries it determined to have the highest risks of default on their sovereign debts. Number 16 on the list was the United States, based primarily on its 2009 budget deficits and government debt.
Countries ranked less likely to default include corruptocracy Kazakhstan, less-than-reform-minded Indonesia, the debt-ridden Philippines and violence-ridden Colombia. By comparison, U.S. Treasuries prices are up today despite a new issuance this week.
More…
China Dumps Dollar-Denominated Risk Assets
Factbox: China, the US Treasury's Top Creditor
Economists: Lost Jobs Aren't Coming Back
Just How Ugly Is The Sovereign Default Truth?
Cash-Strapped Local Govs Wary of Bankruptcy
Welcome to Slumburbia
This Time Is Different, It's Global!
Ponzi Scheme
Big Government's Big Shortfall
The Fed's "Exit Plan" is Just Another Secret Gift to Wall Street
Think PIGS are in Trouble? These Seven US States Could be Headed for Something Worse
http://seekingalpha.com/article/187051-think-the-pigs-are-in-trouble-these-7-u-s-states-could-be-heading-for-something-worse?source=article_sb_popular
And finally CHANGE YOU CAN BELIEVE IN...
Notice from Committee for Economic Value of Individual LivesDue to the current financial situation caused by the slowdown in the economy, Congress has decided to implement a scheme to put workers of 50 years of age and above on early retirement, thus creating jobs and reducing unemployment.This scheme will be known as RAPE (Retire Aged People Early).Persons selected to be RAPED can apply to Congress to be considered for the SHAFT program (Special Help After Forced Termination).Persons who have been RAPED and SHAFTED will be reviewed under the SCREW program (System Covering Retired-Early Workers).A person may be RAPED once, SHAFTED twice and SCREWED as many times as Congress deems appropriate.Persons who have been RAPED could get AIDS (Additional Income for Dependents & Spouse) or HERPES (Half Earnings for Retired Personnel Early Severance).Obviously persons who have AIDS or HERPES will not be SHAFTED or SCREWED any further by Congress.Persons who are not RAPED and are staying on will receive as much SHIT (Special High Intensity Training) as possible. Congress has always prided themselves on the amount of SHIT they give our citizens..Should you feel that you do not receive enough SHIT, please bring this to the attention of your Congressman, who has been trained to give you all the SHIT you can handle.
Sincerely,
DirectorThe Committee for Economic Value of Individual Lives (E.V.I.L.)
All currencies are headed in one direction: down in storehouse of value character.
Gold is the only storehouse of value. Gold has demonstrated that clearly even in the face of the Crimex and the gold banks fighting it.
Respectfully,
Jim
Dear Comrades In Golden Arms,
Doesn't it get tiring to hear the propaganda of government and business over the airwaves telling us exactly what isn't correct? I started this morning on the note of the Fed going to drain one trillion by negotiations with money funds which I know is absolute bunk. Then I see two events today of blatant QE while I hear how the Fed is going to drain huge amounts of the liquidity that was added to the market. Coming up next will be the EU having a plan to bailout Greece, but the ECB will not say what that plan is because they have no plan, only intentions. Some people have observed that I know what gold is doing without looking because I feel it. Well, I do. Right now I feel totally frustrated by the degree of misinformation spewing out of every form of media. Nobody can be that stupid. They are either all kissing up, or there is a Propaganda Czar who runs it. I will go with the former and a tad of the later plus the fact that Wall Street is a major investor in F-TV. Is it possible that gold is fed up with the lies and distortions that are so apparent Mr. Fred barks at the TV? It is, and I sense it happened today. We have been discussing over the last few days the fact that no currency on the planet is any longer a storehouse of value. We are headed into a system of taking a ticket to get bailed out sovereign wise. The relationship between leading currency and gold is never going to be cancelled, but it is loosening. Gold is your only good insurance policy. Who knows, we may be long gold for a much greater period of time and price than I anticipated in 2001. Respectfully yours,
Jim
Jim Sinclair’s Commentary
Change the words “could be” to “are.”
Think the PIGS Are in Trouble? These 7 U.S. States Could Be Heading for Something Worse
Gregor Macdonald
The inevitable coming of the sovereign debt panic finally engulfed Europe this week as the derisively (or perhaps affectionately) named PIGS spilled their slop on the continent. But Portugal, Ireland, Greece, and Spain are hardly worthy of so much attention. In truth, they are little more than the currently favored proxies among the leveraged speculator community (cough) for the larger problem of all sovereign debt. Indeed, the credit default swaps on these smaller European satellite states were not alone this week in making large moves higher. UK sovereign risk rose strongly, and so did US sovereign risk. With a downgrade warning from Moody’s to boot.
Notable among three of the PIGS are their relatively small populations, and small contributions to either world or European GDP. While Spain has a population over 45 million, Portugal and Greece have populations roughly equal to a US state, such as Ohio–at around 10 million. And Ireland? The Emerald Isle has a population similar to Kentucky, at around 4 million. While the PIGS are without question a problem for Europe, whatever problems they present for Brussels are easily matched by the looming headache for Washington that’s coming from large US states such as California, Florida, Illinois, Ohio, and Michigan.
I’ve identified seven large US states by four criteria that are sure to cause trouble for Washington’s political class at least for the next 3 years, through the 2012 elections. These are states with big populations, very high rates of unemployment, and which have already had to borrow big to pay unemployment claims. In addition, as a kind of Gregor.us kicker, I’ve thrown in a fourth criteria to identify those states that are large net importers of energy. Because the step change to higher energy prices played, and continues to play, such a large role in the developed world’s financial crisis it’s instructive to identify those US states that will struggle for years against the rising tide of higher energy costs.
First, let’s consider a large state that didn’t make my list. Texas didn’t make the list because its unemployment rate has not risen high enough to reach my cutoff: a state must register broad, U-6 underemployment above 15%, and currently Texas has only reached 13.7% on that measure. Also, Texas’s total energy production nearly perfectly matches its total energy consumption. Of course, Texas has indeed had to borrow more than a billion dollars so far to pay unemployment claims, thus technically bankrupting its unemployment trust fund. That meets my criteria. But, it’s instructive to note Texas’ energy production capacity in this regard, as that produces dollars. And one of the big reasons US states are under so much pressure, like their European counterparts, is that they cannot print currency. Being able to produce oil and gas is the next best thing to printing currency. So, Texas doesn’t make my list.
More…
Jim Sinclair’s Commentary
Be prepared. The Money Vultures will be circling the dollar soon.
Credit Suisse Declares the U.S. a Riskier Investment Than Indonesia By Megan Carpentier 2/12/10 1:47 PM
Amid fears that Switzerland might come to an agreement with the United States on banking privacy and tax evasion disclosures, Credit Suisse issued a report identifying those countries it determined to have the highest risks of default on their sovereign debts. Number 16 on the list was the United States, based primarily on its 2009 budget deficits and government debt.
Countries ranked less likely to default include corruptocracy Kazakhstan, less-than-reform-minded Indonesia, the debt-ridden Philippines and violence-ridden Colombia. By comparison, U.S. Treasuries prices are up today despite a new issuance this week.
More…
China Dumps Dollar-Denominated Risk Assets
Factbox: China, the US Treasury's Top Creditor
Economists: Lost Jobs Aren't Coming Back
Just How Ugly Is The Sovereign Default Truth?
Cash-Strapped Local Govs Wary of Bankruptcy
Welcome to Slumburbia
This Time Is Different, It's Global!
Ponzi Scheme
Big Government's Big Shortfall
The Fed's "Exit Plan" is Just Another Secret Gift to Wall Street
Think PIGS are in Trouble? These Seven US States Could be Headed for Something Worse
http://seekingalpha.com/article/187051-think-the-pigs-are-in-trouble-these-7-u-s-states-could-be-heading-for-something-worse?source=article_sb_popular
And finally CHANGE YOU CAN BELIEVE IN...
Notice from Committee for Economic Value of Individual LivesDue to the current financial situation caused by the slowdown in the economy, Congress has decided to implement a scheme to put workers of 50 years of age and above on early retirement, thus creating jobs and reducing unemployment.This scheme will be known as RAPE (Retire Aged People Early).Persons selected to be RAPED can apply to Congress to be considered for the SHAFT program (Special Help After Forced Termination).Persons who have been RAPED and SHAFTED will be reviewed under the SCREW program (System Covering Retired-Early Workers).A person may be RAPED once, SHAFTED twice and SCREWED as many times as Congress deems appropriate.Persons who have been RAPED could get AIDS (Additional Income for Dependents & Spouse) or HERPES (Half Earnings for Retired Personnel Early Severance).Obviously persons who have AIDS or HERPES will not be SHAFTED or SCREWED any further by Congress.Persons who are not RAPED and are staying on will receive as much SHIT (Special High Intensity Training) as possible. Congress has always prided themselves on the amount of SHIT they give our citizens..Should you feel that you do not receive enough SHIT, please bring this to the attention of your Congressman, who has been trained to give you all the SHIT you can handle.
Sincerely,
DirectorThe Committee for Economic Value of Individual Lives (E.V.I.L.)
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