I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people where it properly belongs.

- Thomas Jefferson, 1802

Trillions of our capital is handed out (loans on our future which we must pay interest on), we ask where and to whom the dollars went, the monopolistic monetary powers that be - tell us nothing. Awesome.

Central banks and their genie bottles of cash and credit have fostered a fertile environment where State and corporate powers merge, what Mussolini described as corporatism, what some have even referred to as fascism or fascism-lite.

OK so its obvious, the monetary monopoly is capitalizing on the situation hence one should never refer to this current economic system as capitalistic.

Total bank owned residential mortgage debts have now surpassed total individual home equity holdings in the United States. See the chart below:

Perhaps feudalism is the system we now serve under?

Call it what you want but don't mistakenly refer to this as capitalism for true free market capitalism we have not. Remember free markets require free market money and interest rates. Our free markets have been lost for almost a century now.

Free markets and crony printing presses for a select few are like oil and water, they will never mix.

Fiat currency in conjunction with highly leveraged fractional reserve banking is the inflationist tool to create all sorts of rigged market mischief. Inflation, the expansion on the monetary supply simply increases boom-bust economic cycle severities and occurrences; inflation is the indirect theft of the average saver's capital. It allows nations to initiate and more easily fund endless wars. It enables a select few to more easily confiscate the wealth of the many.

"Inflationism, however, is not an isolated phenomenon. It is only one piece in the total framework of politico-economic and socio-philosophical ideas of our time. Just as the sound money policy of gold standard advocates went hand in hand with classical liberalism, free trade, capitalism and peace, so is inflationism part and parcel of imperialism, militarism, protectionism, statism, and socialism."

- Ludwig von Mises

It is Time for You to Capitalize

Ask the common man on the street about gold and silver money, most are simply ignorant or misinformed on the subject and especially the implications of a world moving back in favor of hard and sound monies, silver and gold.

History simply repeats and repeats. When the public becomes desperate for precious metals they will offer goods, services, and investments at fire-sale values. By selling your gold and silver at that time, you will have taken full advantage using your current knowledge and understanding. The full weight of the upcoming wealth transfer will have swung in your favor.

We believe now is the time to capitalize on ignorance by acquiring and holding physical gold and silver bullion coins and bars.

In The News Today

Posted: Jul 20 2010 By: Jim Sinclair Post Edited: July 20, 2010 at 3:59 pm

Filed under: In The News

Dear CIGAs,

Goldman Sachs reported a significant miss in earnings. The rest of the financials are looking as if their earning will stink as well.

Do you need any more proof that the financials’ earnings were in the great majority paper profits produced by the FASB’s capitulation to political pressure to allow crap to be blessed as valuable?

Profits from a marked up position constituted most of the earnings via the trading department in terms of reporting. Do you need more proof that the outrageous bonuses were created because this is a generational last dip at the profit well?

Now that the derivative gang has ruined the world (see today’s illustration) they are cannibalizing their own firms. They kill everything they touch.

Jim Sinclair’s Commentary

Ireland, Spain and Greece debt sales saw solid demand today. Now the question is who were the buyers, and how are the advertised trillion dollar rescue funds being used?

Jim Sinclair’s Commentary

Here is the nuts and bolts of the Formula. Mis-focused and ineffective intervention was applied by saving the Fat Cats

You don’t get a person with a drug addiction a haircut if you want to help them solve their problem.

The downward spiral of the Formula grinds on to bankruptcy of states and government. Since a government by definition can never go bankrupt, it simply prints and reschedules the currency. That is what bankrupts the marketplace.

Payrolls Fall in 27 U.S. States, Led by California
By Courtney Schlisserman – Jul 20, 2010

July 19 (Bloomberg) — Walter "Bucky" Hellwig, a senior vice president at BB&T Wealth Management, talks with Bloomberg’s Mark Crumpton about the possibility that the U.S. economy may fall back into recession. Hellwig also discusses the outlook for the U.S. labor market and stocks. Bloomberg’s Joe Brusuelas and Dominic Chu also speak. (Source: Bloomberg)

Payrolls decreased in 27 U.S. states in June, led by California and New York, signaling the slowdown in hiring is broad-based.

Employers in California cut staff by 27,600 workers last month and those in New York reduced employment by 22,500, the Labor Department said today in Washington. Tennessee, Arizona and New Mexico rounded out the five states with the biggest job losses.

The U.S. lost 125,000 jobs last month as the government cut temporary workers conducting the 2010 census and private payrolls rose a less-than-forecast 83,000, according to Labor Department figures issued July 2. The data signal companies are becoming reticent to hire as the economy cools.

“Businesses are looking at what’s going on in Europe and the stock outlook and people are becoming a little more skittish,” Marisa Di Natale, a director at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “We may see that for a couple of more months until we start to see some real momentum in some sector of the economy

More…

Jim Sinclair’s Commentary

Keep the police, teachers and firefighters, fire the egg sucking politicians

California Official’s $800,000 Salary in City of 38,000 Triggers Protests
By Christopher Palmeri – Jul 20, 2010

Hundreds of residents of one of the poorest municipalities in Los Angeles County shouted in protest last night as tensions rose over a report that the city’s manager earns an annual salary of almost $800,000.

An overflow crowd packed a City Council meeting in Bell, a mostly Hispanic city of 38,000 about 10 miles (16 kilometers) southeast of Los Angeles, to call for the resignation of Mayor Oscar Hernandez and other city officials. Residents left standing outside the chamber banged on the doors and shouted “fuera,” or “get out” in Spanish.

It was the first council meeting since the Los Angeles Times reported July 15 that Chief Administrative Officer Robert Rizzo earns $787,637 — with annual 12 percent raises — and that Bell pays its police chief $457,000, more than Los Angeles Police Chief Charlie Beck makes in a city of 3.8 million people. Bell council members earn almost $100,000 for part-time work.

City Attorney Edward Lee said the council members couldn’t discuss salaries in public without advance notice. The council then adjourned for a private session. About an hour later, the council members returned, and Hernandez read a statement saying the city would prepare a report on the salaries and seek public comment at the next council meeting, scheduled for Aug. 16.

Residents shouted in protest. Lee said he would have the room cleared if people continued to speak out of line. Police Chief Randy Adams said the fire department wanted to end the meeting because the crowd outside was blocking the door.

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Jim Sinclair’s Commentary

Care to attach any names to this illustration? This is so true!

Jim Sinclair’s Commentary

An essential by subscription service:

- Housing Starts Show Bottoming-Bouncing, Approaching Renewed Decline

"No. 311: June Housing Starts"
http://www.shadowstats.com/

Jim Sinclair’s Commentary

Dollar negativity is building like a compressed spring.

When it breaks out it is going to confirm the recent dollar break down in spades.

Home construction sinks to lowest level since Oct.
By ALAN ZIBEL (AP)

WASHINGTON — Home construction plunged last month to the lowest level since October as the economy remained weak and demand for housing plummeted.

Construction of new homes and apartments in June fell 5 percent from a month earlier to a seasonally adjusted annual rate of 549,000, the Commerce Department said Tuesday. May’s figure was revised downward to 578,000.

Driving the June decline was a more than 20 percent drop in the volatile condominium and apartment market. Construction of single-family homes, the biggest part of the market, was down slightly. It dropped 0.7 percent.

One bright area of the report was an increase in building permit applications, which is a sign of future activity. They rose 2.1 percent from a month earlier to an annual rate of 586,000.

Still, the slumping job market and competition from foreclosed properties have forced builders to limit construction, especially after tax credits that spurred sales expired at the end of April.

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Jim Sinclair’s Commentary

How about Moody’s "is history" if it downgrades US Debt?

The US Will Collapse Before Moody’s Gets Around To Downgrading Its Debt
Joe Weisenthal | Jul. 19, 2010, 8:03 PM

I t probably bears worth repeating that if there were much about about Moody’s clout in the sovereign debt arena, it should have be erased today: Moody’s has no clout.

A downgrade of Ireland early on barely produced a blip on any market anywhere.

That follows a recent spectacularly uneventful downgrade of Portugal.

Every once in a while Moody’s lobs a very vague warning about debt and spending in the direction of London and Washington DC, and occasionally the subject of the US losing its AAA rating comes up.

But really, Moody’s is NOT going to be ahead of the US downgrade curve. And they certainly don’t want to be responsible for it. As Niall Ferguson points out, collapses come suddenly.

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Jim Sinclair’s Commentary

Mercenaries fought for Rome in its last days.

National Security Inc.
Posted at 12:24 AM, 7/20/2010

In June, a stone carver from Manassas chiseled another perfect star into a marble wall at CIA headquarters, one of 22 for agency workers killed in the global war initiated by the 2001 terrorist attacks.

The intent of the memorial is to publicly honor the courage of those who died in the line of duty, but it also conceals a deeper story about government in the post-9/11 era: Eight of the 22 were not CIA officers at all. They were private contractors.

To ensure that the country’s most sensitive duties are carried out only by people loyal above all to the nation’s interest, federal rules say contractors may not perform what are called "inherently government functions." But they do, all the time and in every intelligence and counterterrorism agency, according to a two-year investigation by The Washington Post.

What started as a temporary fix in response to the terrorist attacks has turned into a dependency that calls into question whether the federal workforce includes too many people obligated to shareholders rather than the public interest — and whether the government is still in control of its most sensitive activities. In interviews last week, both Defense Secretary Robert M. Gates and CIA Director Leon Panetta said they agreed with such concerns.

The Post investigation uncovered what amounts to an alternative geography of the United States, a Top Secret America created since 9/11 that is hidden from public view, lacking in thorough oversight and so unwieldy that its effectiveness is impossible to determine.

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Jim Sinclair’s Commentary

The West gave it all away. Greenspan simply wrapped greatness in a gift box and presented it to Asia.

China, regardless of the host of bashers that seem never to cease, is going to lead the economic world.

China Passes U.S. as World’s Biggest Energy Consumer, IEA Says
By Grant Smith and Christian Schmollinger – Jul 20, 2010

China overtook the U.S. as the world’s biggest energy user last year, emphasizing that developing nations are driving global growth, according to the International Energy Agency.

China consumed 2,252 million metric tons of oil equivalent in 2009 in the form of crude, coal, natural gas, nuclear power and renewable sources, IEA Chief Economist Fatih Birol said yesterday. That exceeded the 2,170 million tons used by the U.S.

“It’s one of those major turning points,” Tilak Doshi, the chief economist at the Energy Studies Institute at the National University of Singapore, said in a phone interview. “China is growing by leaps and bounds. You’ve got OECD countries where you’re talking about oil demand peaking, meanwhile the emerging countries like China and India will keep growing their energy demand.”

China’s gross domestic product expanded 10.3 percent in the second quarter even as the government took measures to cool growth. China, with Hong Kong included, was the biggest energy user in 2009, consuming 2.2 billion tons of oil equivalent, BP Plc said in its annual Statistical Review of World Energy in June. The U.S. was second and Russia ranked third, BP said.

“As China overtakes the U.S. as the world’s largest energy consumer, it is not only a domestic issue for China, but has repercussions for the rest of the world not only in supply terms, but also in how the energy is consumed,” Birol said in an interview by phone from Paris. “If China uses electric cars, hybrids and so on, they will impose the manufacturing line on most of the rest of the world.”

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