Charting Gold
Howard Katz


China Turns Tables on AAA Debt Time-Bomb Nations- Bloomberg


Canada Teaches Wall St How to Balance Books- Financial Post


Cost of Seizing Fannie/Freddie Surges for Taxpayers- CNBC


As China Aids Labor, Unrest Is Still Rising- NY Times


Dollar, Euro Fall as Yuan Change Boosts Asia- Bloomberg


China Signals End to Peg; Yuan Rising Like '05- Bloomberg


Gold at New Record High as Saudi Reserves Double- Financial Times



The U.S. Dollar Falls by Fall Posted: Jun 21 2010 By: Greg Hunter Post Edited: June 21, 2010 at 3:44 pm
Filed under: USAWatchdog.com
Dear CIGAs,

Last week, three stories acted as signposts for the direction of the U.S. Dollar. The first is about a letter President Obama sent to members of the G20 (Group of 20 major industrial countries) in advance of next weekend’s meeting in Canada. The President’s letter asked members to “reaffirm our unity of purpose to provide the policy support necessary to keep economic growth strong.” The policy he is talking about is to print money and run monstrous deficits to keep the world economy afloat. The talk in Europe is just the opposite. The EU these days is all about austerity and budget cuts which are hardly pro-growth. The Associated Press reported the story this way: In the letter, Obama said that the June 25-27 summit should also focus on efforts to stabilize public deficits in the “medium term,” a reference to the administration’s position that governments need to run huge deficits currently to provide the stimulus needed to ensure a sustained recovery but then move in future years to deficit reduction efforts. (Click here for the entire AP article.)
The second story illuminating the dollar’s path comes from Alan Greenspan. The former Fed Chief gave a warning about how the U.S. may soon reach its “borrowing limit.” A Bloomberg story quoted Greenspan saying, “The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms,” Greenspan said. The “very severity of the pending crisis and growing analogies to Greece set the stage for a serious response.” (Click here for the Bloomberg article.) Please note Greenspan’s reference for the U.S. “commitments” that it, “will be unable to meet in real terms.” That surely means the government will simply print money to pay its bills. The Federal Reserve could end up being the buyer of last resort for America’s debt, and that is highly inflationary.
This brings me to the third story indicating the future direction of the dollar. The headline says it all: “Gold hits record as investors seek alternate asset.” (Click here for the complete story.) The only conclusion you can draw is investors are seeking a stable store of wealth. According to world renowned gold expert Jim Sinclair(jsmineset.com), that spells trouble for the dollar. Sinclair said, “. . . that’s not a pleasant conclusion because it speaks of a currency system in the entire Western world that is being significantly challenged.”
In an exclusive interview with USAWatchdog.com, Sinclair compared the U.S. to Greece– the same as Greenspan. Sinclair said the dollar’s true weakness has been concealed because the attention has been on Europe. Sinclair said, “We’re rolling over in this so-called economic recovery . . . It’s not a pretty picture, and the focus will come off Europe as soon as all the currency traders have made all the money . . . (then) it’s coming right back here. . . You look over here and you see 33 states are headed towards bankruptcy. What’s the difference between that and Greece? There’s none.”
I asked Sinclair when will the dollar start plunging? He said, “The time horizon, I think, is four months.” A plunging dollar will quickly cause higher prices for goods and services and, if things get really bad, Sinclair says, “If, in fact, this thing gets out of control, you’ll see decreasing supply (of goods) because of economic disruption of the means of distribution.”
Under an extreme loss of value for the buck, you can forget about cheap oil and gasoline. Sinclair says, “If the dollar falls out of bed, they shoot to the moon.” Sinclair thinks what is taking place now is a “change in psychology and a loss of confidence that are now beginning to show themselves in market terms. You will still have the dollar around. It will still be in bank reserves, but its buying power will be severely reduced.”
This change in psychology is driving gold to one record high after another. Since 2001, Sinclair has been calling for gold to reach $1,650 a troy ounce by January 14, 2011. Some of Sinclair’s contemporaries are calling for gold to be much higher by next summer. $5,000 per ounce by June is one prediction. Sinclair says, “. . . that only occurs if the whole thing goes splat,” and that is also a real possibility.
Click to view the original article…



Jim Sinclair’s Commentary
The dollar versus the euro is purely a mirror image. Market focus is a product of media. Media is a product of those investment banks doing the work of "gawd."
The investment banks are the product of their positions taken.
The following will take place. When? When Gold Sacks wants it to.



Jim Sinclair’s Commentary
Market focus will change as soon as the gang is in their dollar short position.
California on ‘verge of system failure’ Barrie McKenna
Arnella Sims has seen a lot in her 34 years as a Los Angeles County court reporter, but nothing like this.
Case files piling up by the thousands, phones ringing off the hook, forced midweek courthouse closings and occasional brawls as frustrated citizens queue for hours to pay parking fines.
“People think we’re becoming a Third World country,” said Ms. Sims, 55. “They don’t understand.”
It’s a story that’s being repeated all across California – and throughout the United States – as cash-strapped state and local governments grapple with collapsed tax revenues and swelling budget gaps. Mass layoffs, slashed health and welfare services, closed parks, crumbling superhighways and ever-larger public school class sizes are all part of the new normal.
California’s fiscal hole is now so large that the state would have to liberate 168,000 prison inmates and permanently shutter 240 university and community college campuses to balance its budget in the fiscal year that begins July 1.
More…



Jim Sinclair’s Commentary
33 US States are heading towards a stone wall at 200mph.
Golden State, like many others, is nearly bankrupt and desperately needs a bailout

More…




Jim Sinclair’s Commentary
The mirror image that has made the dollar looks good will shift when the market is focused by the "good ole boys doing the work of gawd" on this reality.

Inside the Dire Financial State of the States By DAVID VON DREHLE Thursday, Jun. 17, 2010
In New Jersey, taxes are high, the budget’s a mess, government is inefficiently organized, and the public pension fund is blown to kingdom come. Which makes New Jersey a lot like most other states in 2010. What makes the state unusual is its rookie governor, a human bulldozer named Chris Christie, who vowed to lead like a one-termer and is keeping his promise with brio. He has proposed chopping $11 billion from the state’s budget — more than a quarter of the total — for fiscal year 2011 (which starts July 1). He’s backing a constitutional cap on property taxes in hopes of pushing the state’s myriad villages and townships to merge into more efficient units. He’s locked in an ultimate cage match with the New Jersey teachers’ union. It may be the bitterest political fight in the country — and that’s saying something this year. A union official recently circulated a humorous prayer with a punch line asking God to kill Christie. You know, New Jersey humor. And in an interview with the Wall Street Journal, Christie didn’t talk about the possibility that his fiscal initiatives might be compromised or defeated; he pictured himself "lying dead on State Street in Trenton," the state capital. Presumably that was a figure of speech.
The tone of the New Jersey budget battle may be distinctive, but many of the same notes can be heard in state capitals across the country. From Hartford to Honolulu, once sturdy state governments are approaching the brink of fiscal calamity, as the crash of 2008 and its persistent aftermath have led to the reckoning of 2010. Squeezed by the end of federal stimulus money on one hand and desperate local governments on the other, states are facing the third straight year of staggering budget deficits, and the necessary cuts will cost jobs, limit services and touch the lives of millions of Americans. Government workers have been laid off in half the states plus Puerto Rico. Twenty-two states have instituted unpaid furloughs. At least 28 states have ordered across-the-board budget cuts, with many of them adding deeper cuts in targeted agencies. And massive shortfalls in public pension plans loom as well.
More…