Know your future... read this book...better safe then sorry...
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Betting against gold is the same as betting on governments. He who bets on governments and government money, bets against 6,000 years of recorded human history.
- Charles de Gaulle


There is no way out of this "greater depression" without a massive repudiation of debt at all levels of society. This will only be possible with a hyper-inflationary depression... as the thought of a deflationary depression is not in the cards for the world's banking system. But, in the end, they may have no say in how it turns out... as the market may decide that for them.

Media Spin Will Not Stop the Coming Downturn

Posted: Jul 14 2010 By: Greg Hunter Post Edited: July 14, 2010 at 11:07 am

Filed under: USAWatchdog.com

Dear CIGAs,

There is hardly a day goes by I don’t hear some spin about the economy and how the so-called “recovery” is progressing. Last week’s job numbers is a classic example. It seems the jobless claims fell to an eight week low. Here’s how the Washington Post reported the news, “The number of new jobless claims filed last week dropped by 21,000 to 454,000, the lowest number in eight weeks. Even more promising, the number of continuing claims dropped by 224,000 to 4.4 million.” (Click here for the entire article.) This article and others that reported the story started with Bureau of Labor Statistics hype and ended with hope the job market is turning around.

John Williams at shadowstats.com is just as disappointed with the mainstream media spin as I am. Williams is frequently interviewed by financial news networks and major publications. I interviewed him during my days at CNN, before the meltdown Williams predicted was coming. (Click here for William’s 2008 prediction on CNN.)

In his latest report, Williams writes about last week’s jobs numbers and media hype. He says, “More recently, following an interview on a major cable news network (not CNBC), I was advised off-air by the producer that they were operating under a corporate mandate to give the economic news a positive spin, irrespective of how bad it was. I know from other personal experiences that these circumstances are commonplace. A simple example of recent distortion was . . . positive hype over an unexpectedly-low weekly jobless claims number. Widely known — at least I have discussed the matter frequently — is that the Department of Labor cannot adjust the weekly claims numbers meaningfully for regular seasonal variations. Accordingly, reporting around holidays invariably results in unusually large and unexpected swings in the weekly numbers. Yesterday’s data covered the onset of the Fourth of July weekend. It would not be at all unusual to see a similarly-meaningless reverse-gyration in next week’s release.”

I say, all of this “good news” was reported when there really was no news at all. The real news is a downturn that is now hitting the U.S. Williams has been predicting this for months, and we are seeing confirmation. Williams says, “. . . the economy has entered a phase of re-intensifying downturn, a circumstance that may be referred to more popularly as renewed recession, or a double-dip recession. “

In his latest Op-Ed column, even economist Paul Krugman says, “. . . we already have painfully slow growth, very high joblessness, and intractable financial problems. And what is the Fed’s response? It’s debating — with ponderous slowness — whether maybe, possibly, it should consider trying to do something about the situation, one of these days. . . . Washington seems to feel absolutely no sense of urgency. Are hopes being destroyed, small businesses being driven into bankruptcy, lives being blighted? Never mind, let’s talk about the evils of budget deficits. (Click here to read Krugman’s complete Op-Ed article.)

It is no secret that Mr. Krugman wants more money printing and deficit spending to “fix” the bad economy. Whether you like this kind of action or not, people like Mr. Krugman are listened to by government officials–especially ones who want to win elections, like the one coming in November.

Some banking analysts are betting that deficit and money printing policies are going to win out. “Get ready for the cliff-edge,” warned Royal Bank of Scotland credit chief Andrew Roberts in a note to clients late last week. He said “monster” quantitative monetary easing (money printing) is coming and that investors should “Be long gold. Think the unthinkable. We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe), and for the global economy (particularly in the US/Europe),” Roberts added. “This all sounds somewhat doomsdayish, so we should update how the real economy/banking is panning out for us. It is saying: the end-game approaches.” (Click here to read the complete article.)

In the “end-game” it looks like inflation is going to be a major player. The only question is how long will it take to play out?

More…

Jim,

This will not last. It is another kicking of the can down the road to ruin.

CIGA BJS

States Dodge Defaults as California May Cut Worker Pay
By William Selway – Jul 14, 2010

Illinois let $5 billion of bills go unpaid. Washington closed state offices. California may cut 200,000 workers’ pay to the minimum wage. Minnesota is delaying tax refunds for a second year.

As fiscal 2011 budgets took effect July 1, state and local governments coping with revenue declines from an economic slowdown are fulfilling legal obligations to balance their books by shaving costs and raising taxes to protect a key constituency: owners of $2.8 trillion of municipal bonds.

“States have taken all measures so far to make sure they keep capital markets open by honoring their debt payments,” said Richard Ciccarone, a managing director for McDonnell Investment Management LLC in Oak Brook, Illinois, which owns $7 billion of municipal bonds. “They are doing everything they can.”

More…

What Is Wrong With Our Financial Markets

Posted: Jul 14 2010 By: Dan Norcini Post Edited: July 14, 2010 at 5:28 pm

Filed under: Trader Dan Norcini

Dear CIGAs,

Here is a perfect example of what has gone wrong with our financial markets and why they are becoming irreparably destroyed as an indicator of true value. As I have said repeatedly, the influx of hedge fund money under the control of black box algorithms instead of providing liquidity as they falsely claim is actually working to undermine the integrity of our financial markets.

We no longer have a venue where buyers and sellers meet to determine “value” but rather where computers push prices in attempts to generate price movement so that they can create profits out of that movement based on their ability to fire off a series of rapid fire Buy or Sell orders. This has absolutely nothing to do with balancing the forces of supply and demand and everything to do with separating the investing or trading public from their capital who are the minnows swimming in this sea of unethical and unprincipled sharks.

Trader Dan

High-Speed Washing Under Scrutiny In Futures Mkt
Wed Jul 14 14:54:43 2010 EDT

1854 GMT [Dow Jones] Regulators are trying to get a handle on how to make sure electronic trading firms aren’t trading with themselves. At CFTC roundtable on market technology issues, FIA officials warn that trading firms running multiple algorithms sometimes end up unintentionally hitting their own orders, and while exchanges like CME Group (CME) and IntercontinentalExchange (ICE) have made efforts to identify such issues, it’s an ongoing process. Rules around wash trades — riskless transactions that are prohibited in US mkts — may have to be clarified, according to FIA.

"How complacent we become when we sit secure, hedged round by laws and protections a government may provide! How soon we forget that but for these governments and laws there would be naught but savagery, brutality and starvation. For our age-old enemies await us always, just beyond our thin walls. Hunger, thirst and cold lie waiting there, and forever among us are those who would loot, rape and maim rather than behave as civilized men.
If we sit secure this hour, this day, it is because the thin walls of law stand between us and evil. A jolt of the earth, a revolution, and invasion or even a violent upset in our own government can reduce all to chaos, leaving civilized man naked and exposed."
- Louis L’Amour, Fair Blows the Wind