THE MANIA STAGE IS STARTING...GOLD WILL BE THE WORLD RESERVE CURRENCY...

Gold regaining its place as the ultimate money


Jim Sinclair’s Commentary
This says it correctly. The problem is the Western world as a whole.
Investors are still in denial but that is starting to change.
Gold will trade at $1650.
The Western world keeps spending its way to disaster Neil Reynolds

The Swiss-based Bank of International Settlements (BIS), the oldest international financial institution in the world, has functioned as the central bank of central bankers for 80 years. In a working paper written by three senior staff economists (“The future of public debt: prospects and implications”), released in March, BIS warns that Greece isn’t the only Western economy with hazard lights flashing.
Indeed, it names 11 more: Austria, France, Germany, Ireland, Italy, Japan, the Netherlands, Portugal, Spain, Britain – and the United States. Without “drastic measures,” BIS says, all of these countries will hit a wall of debt.
When the senior economists at BIS warn 12 of the richest countries on Earth that they must take drastic action to reduce debt, you know that it’s time to check the air bags. The only thing you don’t know, that you need to know, is the precise time of the crash. The lesson is already obvious: Governments can’t drive recklessly, use only the accelerator for braking and not eventually crash.
The BIS paper notes that the public debt of 30 OECD countries will (on average) exceed 100 per cent of GDP within the next year, “something that has never happened before in peacetime.” But it warns that conventional debt-to-GDP ratios are misleading – missing “enormous future costs” that are already authorized by past fiscal commitments, that will inexorably inflate public debt further still.
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Jim’s Mailbox Posted: May 12 2010 By: Jim Sinclair Post Edited: May 12, 2010 at 2:17 pm
Filed under: Jim's Mailbox
Dear Friends;
I admit that I am a fan of Jonathan Anderson. Like Jim Sinclair he knows his subject matter intimately. This is another of his digging down and understanding pieces.
In recent years with the advent of financial TV, I have been astounded by how much market perceptions diverge from reality. That is why we strive to understand the facts behind the so called news, wherever that news has originated. One way is to read news media from around the world for more balanced reporting; a better way is to examine the economic facts and compare them to the so called news.
In my opinion, it boils down to why believe the jabber on US financial TV when it is grossly misstated and exaggerated?
Monty Guild http://www.guildinvestment.com/


Still Time to Cash in on Gold: Analysts

Much of the demand for the precious metal is reportedly coming from Germany, where the memory of hyperinflation continues to significantly influence thinking.
Rally to Go On?
Overlooked Gold Factor


You Can Still Buy Gold


Where Rally May Be Headed



Not a Single Set of Cajones
Europe officially joined the Moral Hazard club in a big way over the weekend. Having put off the Greek issue for five months they finally caved, launching a $1 trillion bailout AND their own variation on the Fed's Quantitative Easing Program at the same time.
The implications of this are two-fold:
1) The Euro is going to parity with the US Dollar
2) Gold is now the top currency in the world
Regarding #1, the Euro only bounced for a brief 24 hours before continuing its slide. It is now clear that the world markets are like a drug addict, needing a bigger and bigger "fix" just to stay "high."
Regarding #2, Gold has broken out to a new all time high in both the US Dollar AND the Euro. In plain terms, Gold is no longer an inflation hedge or anti-Dollar trade. It is a stand-alone currency. In fact, it has traded higher at the same time as the Dollar!
The fact that Europe launched the largest single bailout in history and only bought a day's worth of gains tells you all you need to know about just how saturated with debt the entire world is.
Regarding #2, Gold has broken out to a new all time high in both the US Dollar AND the Euro. In plain terms, Gold is no longer an inflation hedge or anti-Dollar trade. It is a stand-alone currency. In fact, it has traded higher at the same time as the Dollar!
If you do not already own Gold, you should strongly consider buying some now. Europe's moves were a clear signal to the world that it?s a "race to the bottom" in terms of currency devaluation. With every central bank in the world willing to turn their currency into toilet paper, why not own a currency that you CAN'T wipe with?


Gold Flies To Record High As Investors Seek Safety- Reuters


US Trade Deficit Widens to $40.4 Billion- Bloomberg



Bailout Is ‘Nail in the Coffin’ for Euro, Rogers Says (Update1)
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By Shiyin Chen and Haslinda Amin
May 12 (Bloomberg) -- Investor Jim Rogers said Europe’s bailout of indebted nations to overcome the sovereign-debt crisis is just “another nail in the coffin” for the euro as higher spending increases the region’s debt.
The 16-nation currency weakened for a second day against the dollar after rallying as much as 2.7 percent on May 10, when the governments of the 16 euro nations agreed to make loans of as much as 750 billion euros ($962 billion) available to countries under attack from speculators and the European Central Bank pledged to intervene in government securities markets.
“I was stunned,” Rogers, chairman of Rogers Holdings, said in a Bloomberg Television interview in Singapore. “This means that they’ve given up on the euro, they don’t particularly care if they have a sound currency, you have all these countries spending money they don’t have and it’s now going to continue.”
U.S. and European stocks fell yesterday on concern the plan to rescue debt-laden governments in the region will fail to reverse the euro’s worst start to a year since 2000, forcing the European Central Bank to keep rates at a record low for longer.
New York University professor Nouriel Roubini said Greece and other “laggards” in the euro area may be forced to abandon the common currency in the next few years to spur their economies. The euro will remain the currency for a smaller number of countries that have “stronger fiscal and economic fundamentals,” he said in an interview on Bloomberg Television.
Greece’s budget deficit of 13.6 percent of gross domestic product is the second-highest in the euro zone after Ireland’s 14.3 percent. As part of the bailout plan, Spain and Portugal also pledged deeper deficit reductions than previously planned.
Lagging Growth
The euro weakened against 13 of its 16 major counterparts and fell to $1.2644 from $1.2662 in New York yesterday. Last week, the currency fell to the weakest level against the dollar since January 2009 as stocks dropped globally and borrowing costs soared in nations from Greece to Portugal and Spain.
Economic growth in the nations that share the euro will lag behind the U.S. by almost 1.5 percentage points next year, Bloomberg surveys of economists show.
All paper currencies are being “debased,” with the euro currency union at risk of being “dissolved,” Rogers said, adding that he continues to own the dollar, the Swiss franc, the Japanese yen and the euro.
“It’s a political currency and nobody is minding the economics behind the necessities to have a strong currency,” Rogers said. “I’m afraid it’s going to dissolve. They’re throwing more money at the problem and it’s going to make things worse down the road.”
Shorting Emerging Markets
Investors should instead buy precious metals including gold or currencies of countries that have large natural resources, Rogers said. Among other asset classes, he favors agricultural commodities as the best bet for the next decade as well as silver because prices haven’t rallied.
Rogers started short-selling emerging markets in the past two weeks after last year’s rally, he said. Still, the investor will seek to add to his Chinese holdings if shares fall further.
Chinese stocks are the world’s second-worst performers this year as government officials sought to curb accelerating inflation and speculation in the nation’s real estate market. The Shanghai Composite Index yesterday entered a bear market after falling 21 percent from its Nov. 23 high.