YOUR ALMOST OUT OF TIME...tick..tick..tick

Mark Twain once said, "If you don't read the newspaper, you're uninformed.
If you read the newspaper, you're mis-informed."





Dear Comrades In Golden Arms,
The power of the derivative manufacturers is clearly stronger than the combined power of world central banks. The mockery made of the $1 trillion Shock and Awe of the euro rescue package is telling. The public relations that Monday had to be approved by the architects of what is now a joke. The real story is that the credit default swaps derivative dealers are stronger than all central banks put together. Soon markets will see this and rush to the side of the stronger which are the currency shorts of the Western world. Gold will be purchased for a very long time to come as currencies will offer no storehouse of value. The central banks have publicly lost the battle and no cover will serve to keep this realization away from international money. The euro pulled back almost, but not quite, to the base line of the flat bottom triangle and is now looking at $1.10 support. The size of the fortunes which are being made by the attacking forces boggles the imagination. Those that will make the largest profit in gold are just the same forces now attacking Western world currencies. You must stop being driven crazy by watching the day to day action of gold which is destined only to become increasingly volatile. Good gold shares in any category of production will at one point outperform gold 5 to 1. The end of confidence in the fiat money system is behind us. From here on it is structure after structure that is going to fall. The power of the derivative manufacturers is clearly stronger than the combined power of world central banks.
Respectfully,
Jim Sinclair



Everything is being manipulated by the government, investment exec complains





Jim Sinclair’s Commentary
We are in a major leg in gold that will take us to $1650 and above.
The Gold Council (mouthpiece and transparent beard spokesman for the majors) still needs to learn that gold is money, not jewellery, and has the price potential of multi thousand dollars per ounce.
Speculators Grab Gold Faster Than Mines Can Produce It By Nicholas Larkin, Claudia Carpenter and Millie Munshi – May 24, 2010
Speculators are buying gold faster than the world’s biggest producers can mine it as analysts forecast a 27 percent rally that may extend the longest run of annual gains since at least 1920.
Exchange-traded products backed by bullion added 41.7 metric tons in the week to May 14, the most in 14 months, data from UBS AG show. China, Australia and the 15 other largest mining nations averaged weekly output of 41.6 tons last year, researcher GFMS Ltd. estimates. Even though prices have fallen 5.1 percent to $1,185.30 from a record $1,249.40 an ounce May 14, the median in a Bloomberg survey of 23 traders, analysts and investors shows it will reach $1,500 by the end of the year.
Buying accelerated as the MSCI World Index of 23 developed nations’ stocks tumbled as much as 16 percent since mid-April and the euro weakened to a four-year low against the dollar. Holders of ETPs, including George Soros and John Paulson, accumulated a record 1,938 tons by May 21, eclipsing all but four of the biggest central-bank holdings.
“You could see gold go up another $1,000,” said Evan Smith, who helps manage $2 billion at U.S. Global Investors Inc. in San Antonio and in 2006 correctly predicted that gold would reach $700 within two years. “All of the turmoil and problems we’ve seen in Europe is just another reminder that there’s a lot of value in gold as a safe haven.”
The risk to gold bulls lies in economic growth, which should buoy the prospects of metals linked to industrial demand, such as copper and silver. The world economy will expand 4.2 percent this year, the International Monetary Fund said April 21, raising its January projection from 3.9 percent.
More…






In The News Today Posted: May 24 2010 By: Jim Sinclair Post Edited: May 24, 2010 at 3:13 pm
Filed under: In The News
Jim Sinclair’s Commentary
It is not what is reported here, but the use of EU credit default derivatives that brought about the dive in the euro.
With CDS pounding and the Libor rising the bear play on the euro is successful. This mechanism will turn on all Western world currencies within 12 months, one by one. As CIGA Eric notes, this will turn money towards Gold.
Euro’s fall deals new hit to risk appetite By Jamie Chisholm, Global Markets Commentator Published: May 24 2010 08:34 Last updated: May 24 2010 16:38
Monday 16:35 BST. Another sharp drop in the euro is curtailing risk appetite, as traders again fret about the fragility of the eurozone economy.
The FTSE All-World equity index is down 0.3 per cent, while the dollar and US Treasuries are higher on haven flows.
Wall Street’s S&P 500 is off 0.5 per cent, despite some supportive home sales data.
The global session had begun in a more positive mood as some traders speculated that the regulatory and fiscal-funk induced flight from risky assets over recent days may have been overdone.
The S&P 500 fell 4 per cent last week to a three-month low, measures of volatility jumped and high-yielding, growth-focused currencies such as the Australian dollar were battered as investors worried about the damaging impact of austerity measures required to tackle nations’ huge budget deficits.
Wall Street’s late 1.5 per cent bounce on Friday also initially helped sentiment on Monday. So did a sharp rebound in Chinese stocks after hopes were raised that Beijing’s moves to damp property market speculation would not be as heavy-handed as feared, and would therefore not crimp broader economic growth too severely.
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Too Big to Fail Means Too Big to Exist Posted: May 24 2010 By: Greg Hunter Post Edited: May 24, 2010 at 2:42 pm
Filed under: Greg Hunter, USAWatchdog.com
Dear CIGAs,

Both the House of Representatives and the Senate have passed their versions of financial reform legislation. Now, the process of reconciliation takes place between both bodies of Congress to iron out a final bill the President can sign into law. There is plenty in the bill such as new consumer protection, increased power given to regulators to prevent systemic risk, and new powers to oversee the $600 trillion derivatives market. These are just a few of the highlights, and there is no telling what will actually end up in the final bill. (The derivatives problem alone can kill the U.S. economy. I wrote about this in a post called “Can The Financial System Really Be Fixed? Some Say No.”)

“Too big to fail”
The most important issues that could cause another financial crisis are not covered in the pending legislation. The biggest problem is the enormous size of the institutions being regulated. “Too big to fail” means they are simply too big, and shrinking them is not on the table. Last month, Senator Sherrod Brown (D-Ohio) explained the size problem this way: “Fifteen years ago, the assets of the six largest banks in this country totaled 17 percent of GDP. The assets of the six largest banks in the United States today total 63 percent of GDP, and that’s too (big)–we’ve got to deal with risk to be sure, but we’ve got to deal with the size of these banks, because if one of these banks is in serious trouble, it will have such a ripple effect on the whole economy.”
After the Senate passed its version of financial reform, Representative Alan Grayson said, “Too big to fail means too big to exist. We have to systematically dismantle the institution that caused the systemic risk to the economy and that, for sure, the Senate bill does not do.” I don’t see any way we are going to see a breakup of the banks. There are some amendments that will force banks to spin off risky trading operations. The banks are against any trading restrictions or spin-offs. So, getting that into a final bill is going to be tough. I don’t think the big banks will get appreciably smaller until after the next meltdown, and one is coming sooner than later.
Big institutions take big risks.
There was a time when banks were not allowed to take on too much leverage. The max was about 10 or 12 times capital. During the Bush Administration, the caps on leverage were unlocked and banks took on insane amounts of risk. During the last financial crisis, it was not uncommon for banks to be leveraged 40 times capital (sometimes even higher!) The pending financial reform legislation doesn’t really address limits on leverage. To be fair, President Bill Clinton signed into law the Gramm-Leach-Bliley Act (GLBA) in 1999. That legislation repealed the Depression era laws of the Glass-Steagall Act and allowed banks to have unlimited growth and take on much more risk. Without GLBA, also know as the Financial Services Modernization Act, the banks would have never grown “too big to fail.”
Fannie and Freddie
Neither the House nor Senate bills address failed mortgage giants Fannie Mae or Freddie Mac. The government took over these two institutions in 2008. They have a combined taxpayer liability of more than $6 trillion! There is not a mention of reform or how we are going to budget for this slow motion train wreck. I guess if Congress just ignores a problem, it doesn’t exist or it will vanish all on its own. Omitting this from financial reform legislation is too stupid to be stupid.
The Fed gets more power!
Finally, the big winner in all of this is the Federal Reserve. The regulator who stood by and watched as the financial system spun out of control is going to be rewarded by getting more power! These are the same people who fought regulation of the derivatives market and pushed for repeal of the Glass-Steagall Act. The Fed will likely get authority to oversee a new consumer protection division for businesses such as mortgages and credit cards. Also, the Fed will supervise the biggest and most complex financial companies. This is like the proverbial fox guarding the hen house. The pending legislation may force an audit of the central bank, but I wouldn’t count on any meaningful look at the secret deals of the Federal Reserve. I hope I am wrong.
Congressman Grayson recently summed up the importance of financial reform by saying, “We have a basic choice we have to make. Do we want a government of the people, by the people and for the people, or of Wall Street, by Wall Street and for Wall Street? It is disturbing how much this government is by Wall Street and, therefore, you end up with bills that are for Wall Street.”

Dear Friend of GATA and Gold:
TheStreet.com's Alix Steel today mentions GATA and our friend, market analyst Peter Grandich, in commentary headlined "Top 5 Reasons Gold Prices Move," and you can find it at TheStreet.com here:
http://www.thestreet.com/story/10760375/1/top-5-reasons-gold-prices-move.html

Societies Go From Dictatorship To Oligarchy, To Democracy, To Chaos And Back To Dictatorship.
posted by Blogger at Jim Rogers Blog - 7 hours ago
Plato said in The Republic that the way societies revolve is they go from dictatorship to oligarchy, to democracy, to chaos and back to dictatorship. China is in the early stages of oligarchy. And, America...

The Best Place To Have Your Money
posted by Blogger at Jim Rogers Blog - 18 minutes ago
“The best place to have your money is in either sound currencies or real assets. For my money, real assets are a better place to be because, throughout history, when governments have started printing a lot...



Double Dip Recession Now Guaranteed?



US Leading Indicators Drop in Sign Recovery to Cool- Sydney Morning Herald



Defaults on US Apartment-Building Loans Set Record- Bloomberg



Gold Bulls Dig In for Big Rally- The Australian



PIMCO: US, Greece, Spain in Debt "Ring of Fire"- Bloomberg



Fannie, Freddie Fix Is Federal Hot Potato- Wall Street



Stealth IRS Changes Mean Millions of New Tax Forms- CNN Money



UK Begins Budget Cuts with $8.3 Bln Slice- MarketWatch



Hu Stresses Willingness to Reform Yuan- MarketWatch



S Korea, China, Japan Building Free Trade Area- Sydney Mroning Herald



Jim Sinclair’s Commentary
If the financial bill contained no significant controls, if not elimination of the OTC derivative market, it is hollow and meaningless.
Wall St. money floods D.C. in finance bill fight Lobbyists, who have spent $1.7 billion in 10 years, seek payback By Eric Lichtblau and Edward Wyatt updated 5:06 a.m. ET, Sun., May 23, 2010
WASHINGTON – Last Wednesday, Representative David Scott, Democrat of Georgia, mingled with insurance and financial executives and other supporters at a lunchtime fund-raiser in his honor at a chic Washington wine bar before rushing out to cast a House vote.
Nearby, supporters of Representative Michael E. Capuano, Democrat of Massachusetts, gathered that evening at a Capitol Hill town house for a $1,000-a-head fund-raiser. Just as that was wrapping up, Representative Peter T. King, Republican of New York, was feted by campaign donors at nearby Nationals Park at a game against the Mets.
It was just another day in the nonstop fund-raising cycle for members of the House Financial Services Committee, which has become a magnet for money from Wall Street and other deep-pocketed contributors, especially as Congress moves to finalize the most sweeping new financial regulations in seven decades.
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