Western Economies Face Hyperinflation

Hindenburg Omen Confirmation #1 Prepare in August for Hyperinflationary Holidays  On Monday, Richard Russell had this to say about the Dow... "The Dow appears to be in a huge head-and-shoulders top. Note that this top has formed almost three years after the Dow hit its high back in October 2007. The fact that we now have declining tops, meaning a lower distribution pattern [below the primary top of October 2007] is bearish. In the most recent pattern, the Dow seems to be working on an expanded "right shoulder" of its H&S top.  The breakdown of the whole formation would come with a Dow close of 9600 or lower.   The RSI has turned down decisively... and the on-balance-volume is in an ominous downtrend." "As I see it, the top we are witnessing began forming in October 2007... and is still in the process of formation. This makes it the greatest top, in duration, in history. Fantastic."  Click here to enlarge. Hinde Capital On Why Silver Velocity Will Be The Bullet That Sends The Metal Much Higher Submitted by Tyler Durden on 08/19/2010 18:46 -0500 Hinde Capital's Ben Davies, long known for his expansive analyses of gold's undervaluation, this time focuses on silver, and the metal's relative value  vis-a-vis gold and other commodities. In the report below, posted initially on King World News, Davies lays out the case for a violent move higher in the price of silver, predicated by the inability of the value suppression  cartel to keep the price artificially low going forward, as well as a return to silver's fundamental value. Ex-Bank of England Official: Dumping Bush Tax Cuts May Bring Depression "Faber: Don't Touch U.S. Government Bonds" Hourly Action In Gold From Trader Dan Posted: Aug 19 2010     By: Dan Norcini      Post Edited: August 19, 2010 at 6:19 pm Filed under: Trader Dan Norcini Dear CIGAs, Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini Greece enters a "death spiral" "Tax revenues are falling and unemployment has hit an unbelievable 70% in some places..." Connecticut may have just a week's worth of cash posted by Eric De Groot at Eric De Groot - 58 minutes ago New York, Illinois and California are not hogging the headlines any more. Here comes Connecticut. Like everywhere else these guys think short term and thumb in the dike. The Formula will grind on here and

Silver Has the Potential to be One of the Best Performing Assets Over the Next Five Years  Bulls and bears could both get slaughtered... A great read on the "non-dogmatic" approach to investing.

The biggest unemployment news of the year so far
First time jobless claims are heading higher again...


Jim Sinclair’s Commentary
The Formula of 2006 grinds on.

• Applications for unemployment benefits in the U.S.  unexpectedly increased last week to 500,000, indicating that companies are stepping up the pace of layoffs as the economy slows.
• The Index of U.S. Leading Indicators rose in July by 0.1% in July. This was the second time in 4 months that extends a see-saw pattern that indicates slower growth through the end of the year.
• The Federal Reserve Bank of Philadelphia’s general economic index dropped in August to -7.7% from 5.1% in July.
• The Congressional Budget Office forecasted that the U.S. budget deficit will be slightly less in 2010 than projected in March, at $1.342 trillion. The deficit for 2011, however, will be modestly higher than the March estimate at $1.066 trillion

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Jim Sinclair’s Commentary
QE to infinity. Currency Induced Cost Push Inflation is set in cement.
The deflation emphasis is simply ignorant of what is happening now.

Fed May Need to Buy More US Treasurys: Bullard Published: Thursday, 19 Aug 2010 | 1:33 PM ET
The Federal Reserve may need to ramp up its purchases of U.S. Treasury debt if price levels in the U.S. economy continue to show signs of softening, St. Louis Fed President James Bullard said on Thursday.
Bullard said such actions were not yet warranted at the moment, given expectations for a continued economic expansion.
But he added that, if further signs of easing price pressures were to emerge, the central bank should not be shy about using the remaining tools in its policy arsenal.
"Should economic developments suggest increased disinflation risk, purchases of Treasury securities in excess of those required to keep the size of the balance sheet constant may be warranted," he said in prepared remarks.
In a significant policy shift last week, the Fed announced it would begin using the proceeds from maturing mortgage securities in its portfolio to buy Treasury notes, an effort to prevent monetary conditions from tightening.
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Jim’s Mailbox

Posted: Aug 19 2010     By: Jim Sinclair      Post Edited: August 19, 2010 at 11:16 am
Filed under: Jim's Mailbox
Jim,
Where California goes, so goes the country.
CIGA BJS

Dear BJS (Bertram J Seligman?)
All trends start on the West Coast and work their way all the way to Maine.
Regards,
Jim

Schwarzenegger Orders Furloughs to Start After Top California Court Rules By Michael B. Marois – Aug 18, 2010 7:08 PM ET
California Governor Arnold Schwarzenegger said 150,000 government workers must begin taking time off without pay starting Aug. 20 following a court ruling lifting an injunction temporarily blocking the furloughs.
The California Supreme Court, saying it would review the governor’s plan, stayed decisions by lower courts that had halted the furloughs. Schwarzenegger directed state workers to take three unpaid days off each month to save cash. The high court set a Sept. 8 hearing on a challenge to the order.
California began its fiscal year on July 1 without a spending plan after Schwarzenegger and Democrats who lead the Legislature remained deadlocked over how to fill a $19.1 billion deficit. The Republican governor on July 28 issued an executive order for the monthly furloughs until a budget is passed.
“The result of the Supreme Court ruling today means that the furloughs will continue until the court says otherwise,” Aaron McLear, a Schwarzenegger spokesman, said by e-mail.
A union for state engineers has sued to block the plan.
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Senior NOAA Scientist Admits He Lied That Gulf Spill Oil Is Gone, Puts Administration's Spill-Disclosure "Credibility" In Question