Thursday, September 30, 2010

A Broke FDIC Expands Checking Account Insurance From $250,000 To Infinity


posted by Eric De Groot at Eric De Groot - 4 hours ago
The bailout will be ongoing. Congress recently passed a $26 billion jobs bill to plug holes in state payroll budgets. The move was intended to save thousand of teacher and government jobs. "Free money" is ...
Ben Davies - The World Monetary Earthquake.
Here is a quote: "Within a single week 25 nations have deliberately slashed the values of their currencies. Nothing quite comparable with this has ever happened before in the history of the world. This world monetary earthquake will carry many lessons."

Bullion Banks are Losing Control of Gold and Silver

Ambrose Evans-Pritchard: Shut Down the Fed (Part II)

If The Recession Has Ended, Why Is The Fed So Worried?

Boomer Suicides On Rise in US

U.S. Mint says it has run out of Buffalo gold coins

Federal Reserve Balance Sheet Update: Week Of September 29


M2 Update: 11th Consecutive Weekly Increase


Charting Statistical Fraud At The BLS: 22 Out Of 23 Consecutive Upward Revisions In Initial Jobless Claims 


Welcome to the Mania
By: Jeff Clark, Editor, Casey’s Gold & Resource Report

An Inflationary Cocktail in the Making
By: Richard Benson, SFGroup

Ecuador Calls For Help After Coup Attempt


Bernanke's Evil Peruvian Clone Gets Serious About FX Intervention, As Country Shuts Down Border With Revolutionary Ecuador


Here Is How The World's Biggest Bond Funds (And Others, Just Not You) Get Advance Notice Of What The Fed Is About To Do

War Has Broken Out And Your Savings Are At Stake


Is Europe Preparing To Ban Rating Agency Downgrades, As It Sets Off On Weekly Farce Tests?


Listing The Best Replacements For Larry Summers


Michael Tennenbaum Explains Why $50 Billion In Distressed Debt Could Default In Next Two Years


Ireland Cancels All Remaining 2010 Bond Auctions Due To Market "Turbulence" 


Posted: Sep 30 2010     By: Jim Sinclair      Post Edited: September 30, 2010 at 2:48 pm
Filed under: In The News

Jim Sinclair’s Commentary
Something here is going on that does not pass the smell test.

Emanuel to Depart White House for Chicago Mayoral Bid By MICHAEL D. SHEAR AND JEFF ZELENY
1:22 p.m. | Updated President Obama will give his chief of staff, Rahm Emanuel, a send-off Friday as Mr. Emanuel officially announces his departure from the West Wing to run for mayor of Chicago, officials familiar with the decision said.
The White House press secretary, Robert Gibbs, at his daily briefing on Thursday afternoon said that the president would give two personnel announcements on Friday morning from the East Room of the White House. Mr. Gibbs, admitting that he was being purposely “oblique,” would not confirm whether the announcements would concern Mr. Emanuel.
The two officials, who declined to be named in advance of the official announcement, confirmed that Mr. Obama planned to name Pete Rouse, a senior adviser, to replace Mr. Emanuel. Mr. Rouse has been at the president’s side since Mr. Obama arrived in Washington nearly six years ago as a senator, serving as his chief of staff.
Mr. Rouse will not be an interim appointment, but rather will formally take over Mr. Emanuel’s title. While Mr. Rouse has expressed reservations about holding the chief of staff job for an extended period, he has agreed to do the job – for now.
Mr. Rouse has a low profile outside the White House and across Washington, but he is extraordinarily close to the president and is respected inside the West Wing and on Capitol Hill, where he was known as the “101st Senator” in his role as an adviser to Senator Tom Daschle of South Dakota, then the Democratic leader.

Jim Sinclair’s Commentary
Strategic metals, rare earths and materials are weapons that can close down the high tech industry of any country that China wishes.
Maybe it would be better if the dopes in the US legislative got off the bash China kick they have been playing on.

Pentagon Loses Control of Bombs to China Metal Monopoly By Peter Robison and Gopal Ratnam – Sep 29, 2010 3:49 PM MT
A senior manager at a company that churns out metals routinely used in U.S. smart bombs pauses in mid-sentence when his phone rings: a Wall Street stockbroker looking for information. He makes a note to have an assistant call back — someone who is fluent in English, not just Chinese.
“It’s a seller’s market now,” says Bai Baosheng, 43, puffing a cigarette in his office in Baotou, China, where his company sells bags of powder containing a metallic element known as neodymium, vital in tiny magnets that direct the fins of bombs dropped by U.S. Air Force jets in Afghanistan.
A generation after Chinese leader Deng Xiaoping made mastering neodymium and 16 other elements known as rare earths a priority, China dominates the market, with far-reaching effects ranging from global trade friction to U.S. job losses and threats to national security.
The U.S. handed its main economic rival power to dictate access to these building blocks of modern weapons by ceding control of prices and supply, according to dozens of interviews with industry executives, congressional leaders and policy experts. China in July reduced rare-earth export quotas for the rest of the year by 72 percent, sending prices up more than sixfold for some elements.
Military officials are only now conducting an inventory of where and how U.S. suppliers use the obscure but essential substances — including those that silence the whoosh of Boeing Co. helicopter blades, direct Raytheon Co. missiles and target guns in General Dynamics Corp. tanks.

House passes bill targeting China’s yuan policy. The House easily passed legislation to penalize China’s foreign exchange practices, sending a powerful signal to Beijing to boost the value of its currency but risking a backlash that could harm U.S. companies and consumers. The measure allows but does not require the U.S. to levy tariffs on countries that undervalue their currencies. Chinese Premier Wen Jiabao has said China would suffer "major social upheaval" if it acquiesces to demands for a 20%-40% rise in the yuan. Earlier today China warned that the bill could seriously affect bilateral ties.

Jim Sinclair’s Commentary
Salvos from the currency war front. The US legislative has made the kick off. Here is the 90 yard return.

China criticises weak U.S. dollar policy Wed Sep 29, 2010 12:15pm EDT
GENEVA, Sept 29 (Reuters) – China said the United States should take action to stabilise the dollar, criticising Washington’s expansionary monetary policy for weakening the currency despite its key role in the global financial system.
The comments by a Chinese official at a meeting of the World Trade Organization came as the U.S. House of Representatives was set to pass a bill putting pressure on China to let the yuan rise faster. [ID:nN28172488]
China’s ambassador to the WTO, Sun Zhenyu, told a review of U.S. trade policy that the dollar played a unique role in the international monetary system while U.S. policy had a significant impact globally.
"We are very much concerned about how the U.S. would take practical and responsible measures to prevent the dollar glut and maintain the stability of the currency," Sun said.
China had raised the same question at the last U.S. trade review in 2008 but had not received an answer.

Jim Sinclair’s Commentary
This must result in QE to infinity in the entire Western World.
Thank you OTC derivative manufacturers and distributors that are still busy at their business.

Spain: Ten million workers take part in general strike By Paul Mitchell
30 September 2010

Nearly 70 percent of Spanish workers10 milliontook part in Wednesdays general strike. In some sectors, such as mining, metal, auto manufacture, electronic, fishing and other industries, participation was nearly 100 percent. The movement also encompassed many self-employed workers and small businesses.
Although the government tried to downplay the effects of the strike, the national grid operator Red Electrica Corp. said that electricity consumption was down by 20 percent.
The strike dealt a blow to business leaders, politicians and the media who claimed it would not be well supported. But without the minimum service levels agreed by the unions, which allowed the government and local authorities to determine how many airplanes, trains and buses had to be provided, the country would have ground to a complete halt. Union leaders bent over backwards during the day to show that they were complying with minimum service agreements.
Workers went on strike in opposition to the austerity measures and anti-labour reforms implemented by the Spanish Socialist Workers Party (PSOE) government of President Josapatero.
The strike was called by the Communist Party-aligned Comisiones Obreras (CC.OO) and the PSOE-dominated Unieneral del Trabajo (UGT) trade union federations. It is the second major protest this year that the unions have been obliged to call. But it only went ahead after the reforms had become law, refuting claims by union leaders that they could be watered down by Congress.

Jim Sinclair’s Commentary
Smile, you are on candid camera no matter where you are or go.

U.S. Tries to Make It Easier to Wiretap the Internet By CHARLIE SAVAGE
Published: September 27, 2010

WASHINGTON Federal law enforcement and national security officials are preparing to seek sweeping new regulations for the Internet, arguing that their ability to wiretap criminal and terrorism suspects is going dark as people increasingly communicate online instead of by telephone.
Essentially, officials want Congress to require all services that enable communications including encrypted e-mail transmitters like BlackBerry, social networking Web sites like Facebook and software that allows direct peer to peer messaging like Skype to be technically capable of complying if served with a wiretap order. The mandate would include being able to intercept and unscramble encrypted messages.
The bill, which the Obama administration plans to submit to lawmakers next year, raises fresh questions about how to balance security needs with protecting privacy and fostering innovation. And because security services around the world face the same problem, it could set an example that is copied globally.
James X. Dempsey, vice president of the Center for Democracy and Technology, an Internet policy group, said the proposal had huge implications and challenged fundamental elements of the Internet revolution including its decentralized design.
They are really asking for the authority to redesign services that take advantage of the unique, and now pervasive, architecture of the Internet, he said. They basically want to turn back the clock and make Internet services function the way that the telephone system used to function.

Jim Sinclair’s Commentary
Here is a link to a map of failed banks that was put together by the Wall Street Journal.
Click here to view a map of failed banks from January 2008 to the present

Jim Sinclair’s Commentary
This is evidence that the real screw up is in the construction of the securitized debt of these same mortgages.

J.P. Morgan will halt foreclosures By Ariana Eunjung Cha
Washington Post Staff Writer
Thursday, September 30, 2010

J.P. Morgan Chase, one of the nation’s leading banks, announced Wednesday that it will freeze foreclosures in about half the country because of flawed paperwork, a move that Wall Street analysts said will pressure the rest of the industry to follow suit.
The bank’s decision will affect 56,000 borrowers in 23 states where allegations of forged documents and signatures and other similar problems are being used to try to overturn court-ordered evictions. Yet the impact may be much broader, given J.P. Morgan’s stature in the industry. If other banks adopt the same approach, the foreclosure process in many parts of the country will grind to a halt.
Officials at Fitch Ratings, a credit-rating firm that measures the health of companies, said the "defects" found in foreclosure documents at J.P. Morgan are industry-wide. Underscoring that concern, Fitch said it is considering whether to lower the grades it gives to the mortgage servicing divisions of the nation’s largest lenders.
"Over the next few weeks, we expect to see more and more companies come out with similar announcements," said Diane Pendley, a managing director at Fitch.
The paperwork problems at J.P. Morgan mirror those uncovered last week at another large mortgage lender, Ally Financial. But J.P. Morgan’s decision is expected to have a much greater effect on the industry because it is held in high regard by its peers. By contrast, Ally, formerly known as GMAC, is still under the cloud of a $17 billion federal bailout package that it has been unable to pay back.

Posted: Sep 30 2010     By: Dan Norcini      Post Edited: September 30, 2010 at 2:37 pm
Filed under: Trader Dan Norcini
Dear CIGAs,
It was a rather strange day today in the commodity world with the Dollar seeing a bit of a bounce but with crude oil breaking an upside resistance level even as a goodly portion of the rest of the commodity complex was experiencing some hefty fund selling. The grains in particular were whacked by an unexpected and rather confusing USDA stocks report which sent corn and wheat sharply lower as a mass exodus of speculative fund longs occurred early in both markets. Sugar was slammed quite hard and even cotton did not seem to get much help from overnight news that China’s cotton crop might be hit by some freezing weather. Palladium notched a 28 month high before it too saw a wave of selling surface.
Gold and silver had set fresh highs in overnight trade with gold hitting yet another all time record while silver too scored another 30 year high above $22.10. As the commodity selling wave hit during the US session, gold and silver were also taken down but gold did see buyers come in on the dip towards $1,300, the former capping level by the bullion bank crowd. The push back from session lows in gold which at one point today was down $13 is most impressive. It ended the pit trading session down only a minor amount for the day! Bulls are for the most part refusing to run and that is against a backdrop of the HUI losing the initial support level of 510.
Both bonds and equities were down in tandem which is part of the “weird” nature of today’s trading session but the bonds are holding fairly well even after losing their battle to hold above last week’s high.
Looking at the chart patterns across a wide number of commodity markets today leaves me with the distinct impression that can be summed up in one or perhaps two words: “Confusion” or “Uncertainty”.
The catalyst for all this was the release of two data pieces – one was the Chicago PMI which came in better than expected (60.4 vs 56.7) while the other was a combination of a GDP report of second quarter growth at 1.7 versus an expected 1.6. That had some rethinking the timing or even the necessity of the Fed’s QE2 engagement. It did appear from the price action as the session wore on that many are not quite that confident about the overall strength of the economy. One thing is for certain, it was not a quiet day in most of the markets as volatility was on display in ample portion sizes.
The technical take on gold is pretty much the same as we have been seeing of late. The bullion banks attempt to cap at intervals of $15 dollars. When that fails, they retreat to the next multiple of “5”, dig in, and try again. Pit locals are piggybacking the bullion banks and when the buyers do not run en masse and price refuses to break down, these locals cover and price moves back up. This has been the same pattern for some time now and as long as it continues (the key being the willingness of the bulls to stand their ground and refuse to be stampeded) prices are going to continue moving up.
Considering that not only is it the last day of the month but also the last day of the third quarter, for the bulls to stand this resolute is remarkable. One typically sees the side that has gained the victory over the past month taking some money off the table, particularly if it is managed money as they like to book some paper gains to show their clients how well they have done on the upcoming statements.  In the case of gold, with managed money heavily on the long side, to see only this amount of selling which did meet with buying at this time is unusual.
Open interest dropped in gold yesterday with once again the chief culprit being a drawdown in the October contract. That is not a heavily traded month and is heading into delivery this week. Between the two day’s unwind we have seen about 18,000 contracts closed out in that month. I still suspect that shorts do not want to have to stand for delivery and that is why they are exiting in such a hurry. They did not roll into the December yesterday either which I also find interesting. I want to continue monitoring this to see if we can glean anything by all these antics.
The monthly charts of gold and of silver are most impressive. I will get a copy of the gold chart up later on this afternoon.
The Dollar is getting a bit of a bounce today but considering the “happy” news about the Chicago PMI, the GDP numbers and the mild drop in initial unemployment claims, it ain’t much of a bounce. The Yen is within a mere hairsbreadth of the point at which the BOJ intervened. As said previously here on this site, they either intervene and knock it back down or they are finished as a market force to be reckoned with as the spec crowd will have called their bluff. What  sea change that would be if the BOJ was defeated by the Fed’s QE2 and the Yen was going to soar onto new heights.
There is some chatter from the former “Mr. Yen” that intervention is a waste of time because it is not being done in coordination with the Fed nor with their consent and ultimately will prove to be a waste of time. Should his views hold sway and begin to gain a majority, it would signal that just like the Swiss Central Bank, the Bank of Japan has given up trying to fight the sinking Dollar. The implications for gold are obvious as it would remove a bit of further support under the USDX and probably allow the Dollar to quickly break 78 and head down towards 75 quite rapidly. Stay tuned. We might just yet see them in the market this evening.
Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini

Europe's austerity anger grows

The first story is from The Telegraph... and has to do with the riots, strikes and social unrest in Europe yesterday.  Here's an Ambrose Evans-Pritchard offering on this subject courtesy of reader Roy Stephens.  It was filed late last night from London... and bears the headline "Europe's austerity anger grows".  More than 100,000 marchers converged on Brussels from across the EU to protest austerity measures on Wednesday, while Spanish unions took the extraordinary step of breaking ranks with Spain's socialist government by launching a general strike.  This story is more than worth your time... and the link is here.


Initial Claims Come at 453K, While Prior Print Is Revised Higher, As 300K Claimants Fall Of Benefits


Guest Post: The FED Cannot Keep Stocks Up


Senator Franken Sends Letter To Bernanke, Bair And Holder Demanding Criminal Charges For All Responsible For Biggest Alleged Mortgage Fraud In History


Anonymous Blogger Speculates Spanish GDP Is Inflated By €40 Billion, Goldman Gets Involved


Moody's Downgrades Spain To Aa1, As Goldman Rushes To Explain How It Was All Priced In


Murray Pollitt: As intervention fails, only gold market has a pulse


Philip Manduca Says There Has Never Been An Empire So Willing To Give Its Wealth And Power Away Like America Gregory White | Sep. 29, 2010, 4:23 PM
Philip Manduca of ECU Group spoke to CNBC this afternoon about the dollar’s decline, the rise in gold, and the failure in decision making by the U.S. government.
0:30 There has been a covering up of the cracks in the EU. They will resurface in 2011 because the problem of a lack of fiscal union in a monetary union persists. Growth will not rise to the point where tax revenues will be high enough to combat deficits.
1:15 Money push, QE, is what is being priced in. There’s loads of money out there, that’s not the problem. When everyone stops worrying about this, the focus will return to the eurozone.
2:00 The problem is not supply, it’s the velocity of money. The government in the UK may be tempted to push cuts to 2012 and 2013. The pound may be underpriced at the moment.


Posted: Sep 30 2010     By: Dan Norcini      Post Edited: September 30, 2010 at 11:40 am
Filed under: Trader Dan Norcini
Dear CIGAs,
Click chart to enlarge in PDF format with commentary from Trader Dan Norcini

Wednesday, September 29, 2010

Distrust In US Media Hits Record High, As CNBC (And Especially Mad Money) Viewership Drops To Multi-Year Low


John Taylor On Why TARP II Will Follow Promptly After QE II


House Passes Legislation To Somehow Revalue Chinese Yuan


 Is Inflation “Too Low”? 

By: Richard Daughty, The Mogambo Guru

WSJ Finally Notices Gold’s Bull Market
By: Rick Ackerman, Rick's Picks

Competing Currency War in View
By: Jim Willie CB

European Central Banks Halt Gold Sales

Banks Keep Failing, No End in Sight

U.S. Economy "Close to a destructive tipping point" Glenn Hubbard Says.

Mike Maloney lecture video.

Cold Hard Reality Hits Oregon

Supply Squeeze of Physical Gold and Silver May Be Heating Up

The Currency Crisis of 2010-2011

A Hazard of Buying Bond Funds Now

A Red Alert Threat To The Regime

Sour Economic Mood in Living Room and Board Room

Recession Rips at US Marriages, Expands Income Gap

21st Sequential Weekly Outflow Confirms Investors Refuse To Be Suckered Into Stock Market

U.S. Mint Suspends Sales of American Eagle Gold Coins (Update1) 

By Vincent Del Giudice – August 21, 2008 16:19 EDT
Aug. 21 (Bloomberg) — The U.S. Mint suspended sales of its 1-ounce “American Eagle” gold coins after soaring commodity prices led collectors and investors to deplete supplies.
It is the first time in two decades that the Mint halted sales of the coins, which are made of 22-carat gold from domestic mines. The coins also contain small amounts of alloy for hardening.
In a memo to dealers dated Aug. 15, Cathy Laperle, a Mint official, said: “Due to the unprecedented demand for American Eagle Gold One Ounce Bullion coins, our inventories have been depleted. We are therefore temporarily suspending all sales of these coins. We are working diligently to build up our inventory and hope to resume sales shortly.”
Gold prices soared over the past year, with the most active gold futures reaching a record $1,033.90 an ounce on March 17 as the price of crude oil increased and the dollar weakened against the euro and other currencies. Commodity prices have since retreated.
American Eagle coins, introduced in 1986, are also available in other weights as well as silver and platinum. The suspension was reported in today’s editions of The Wall Street Journal.


Plosser Says 2010 GDP Outlook "Somewhat Lower Than What It Was", Sees Very Limited Amount Of Things That Can Be Done To Improve Economy

Posted: Sep 29 2010     By: Dan Norcini      Post Edited: September 29, 2010 at 2:39 pm
Filed under: Trader Dan Norcini
Dear CIGAs,
Another day, another leg lower in the US Dollar, another violation of an important technical support level, ho hum! The manner in which the dollar is falling through one support level after another is rather disturbing, and that is putting it mildly. Side note – the Yen is continuing to move back toward the level which forced the BOJ to pull the intervention trigger and yet there is no action from Japan. As I said yesterday, if the Yen breaks through their recent cap, and they do nothing, it is going to be an ENORMOUS defeat for the prestige of the BOJ and a sign that they have lost to the Fed and its QE plan. I would view it as historical and a game changer. Stay tuned for this one. Tonight might possibly be quite interesting in the Forex markets especially if the yen puts on another full point.
Gold put in another record high price in late Asian/early European trading last evening with silver also following closely behind as it too set another 30 year high during the same interval. As a matter of fact, all of the “precious” metals were higher today with platinum and palladium continuing to work higher on the charts. Palladium is probably the sleeper among the group as it has quietly managed to rally from $160 in late 2008 to nearly $570 as of today. That is a 250% increase in 2 years.
One of the things about the palladium rally is that it now leaves silver as the least expensive precious metal to own. Yes, I know that palladium and platinum are considered industrial metals but they too, as does silver, often act as precious metals. Gold is now over $1300, platinum is over $1650, and palladium is near $570. None of them could be considered especially cheap for the average citizen to buy. Silver however, even after its strong rally is shy of $22. Tell me that the average citizen who has a few hundred dollars laying around and is becoming increasingly worried about the future of the Dollar as they become informed about the woes of the current monetary system, will not look at these metals and feel very comfortable plopping down some cash on the counter for a few rounds of silver.
I keep reading comments about the “Overbought” condition of the metals and the “oversold” condition of the US Dollar. All such comments are true – by all measures of any technical indicators, they are overbought and the Dollar is oversold. The problem however in attempting to pick a top or a bottom is that “overbought” and “oversold” are subjective terms. Markets can continue in such conditions for far longer than many analysts imagine. I should know having been on the wrong side of an “overbought” trade a fair number of times throughout my trading career after boldly initiating short positions in a market I just knew was “overbought” and was going to fall. Oh yes, it did eventually fall but that was after net sum of my trading account value fell first!
One thing about bull markets versus bear markets – one can eventually find relief as a long if you are on the wrong side of a bear market – the price can only fall to ZERO and then you are done with any pain! Being a bear in a bull market however is an entirely different matter. Price can keep rising and rising and rising long after your trading account is wiped out because there is no ultimate price at which the market must stop. In other words, there is no ZERO line to save you. Price will only stop moving higher until the fear, or panic or shortage or whatever it was that took the price to the launching pad subsides. Who can say when that will happen?
The reason the Dollar continues to drop even though it is technically “oversold” is because the Fed has made it perfectly clear that there is essentially no limit to the amount of liquidity that they are willing to inject into the economy in order to stave off a stall in the economic “recovery”. A trillion here, a trillion there, a trillion everywhere and pretty soon the host currency is rendered valueless for all practical purposes.
Compound that with the fact that we now seem to have entered an era in which there is a race to devalue currencies by the respective central banks and monetary authorities around the globe and you have the reason why gold is continuing its ascent. Quite simply, it is acting as a currency and it will continue to attract buying on dips in price as long as there is fear, uncertainty and doubt about the “health” of the current monetary system and a lack of confidence in the willingness of the global monetary authorities to change their tactics of systematically undermining the value of their own domestic currencies. When the metals do get a correction in price, and they will at some point, we will see how the speculative crowd reacts to the dip lower. Thus far every single dip has been shallow and very short-lived. As long as that pattern continues, the path of least resistance for them is higher. Once the dips no longer attract strong buying, we will see a deeper correction but even at that, it would take a huge setback in price to alter the long term bullish chart patterns.
Gold is insurance against the depradations of the central banking class and the parasitical monetary authorities. Do not throw away your insurance because of another effort by some analyst or “expert” trying to make a name for himself by predicting a market top. Such people come and go as they seem to be insecure souls constantly needing some new mountain to climb in order to feel good about themselves, but they will not be around to write you a check should you be foolish enough to listen to their advice and try to time a market moving up on a crisis involving the current global monetary system. Leave the top picking to traders who sometimes get it right and sometimes get it wrong but who can run in or run out quickly enough to minimize the damage resulting from a bad call on a particular market. If you are an investor with a bit of a trading streak in you, and you get nervous about deeper corrections, you can always sell a few calls or buy a few puts for some downside protection. If the market drops you can cover those and make some money to offset the paper loss on the position but just realize you are going to have to be nimble to react fast enough in today’s warp-speed markets.
Keep your eye on the long term consequences of the Fed’s actions and their signaling to all who can see that they intend to sacrifice the Dollar to achieve their goals. That is set in stone and it will take a huge about face on their part (scrapping QE2 completely) to cause anything more than a bounce in the Dollar. Besides, the US has now past the point at which it is mathematically possible to ever repay all of its outstanding debt. Either it defaults which is unthinkable as it would send the entire global economic system into absolute chaos or it effectively defaults by devaluing the Dollar. Which path do you think it will choose to follow? I don’t think this is a secret to anyone on the planet at this point which is why we are seeing Central Banks all over the planet attempting to stem the rise of their own currencies against the Dollar. Everyone knows that the Fed is killing the Dollar by design.
Back to gold –
Open interest readings are a bit murky from yesterday’s session. The exchange released numbers this AM showing an increase of a relatively modest 3200 contracts. Considering the volume of 243,155, a large amount of short covering took place. That would make sense since the price range was $35 from top to bottom – shorts got trapped by the buying interest that came in at yesterday’s low and drove the market past the unchanged level. Once price took out $1300, it was too much for them. However, the big drop in open interest came in the relatively thinly traded October gold contract where over 13,000 contracts were closed out. Open interest in the active December actually increased by over 11,000 contracts. I am not quite sure what to make of this as of yet but I wonder about the October gold contract. Were shorts fearful of possible delivery issues and did they roll to avoid being confronted with that or what?  I need to see some more data and the delivery numbers when that process begins later this week to form a better view of what might be occurring.
Gold is encountering opposition to its rise right near another level of “5”. Remember first it was $1260, then $1,285, then $1,300 and now it is $1,315 where the sellers are or were making their stands. They were driven out of their dens at the first three levels and have now retreated to another “5” den. If they get smoked out from there, price will make a rise towards $1,330. If they are able to hold the line, price should drop towards $1,300 first and then towards $1,285 if that fails to hold.
One thing about the enemies of gold is that they are not the sharpest tacks on the planet as it is too easy to see their tactics on the price chart but they do have lots of financial firepower. Were it not for that, they would be easily dismissed for their clumsiness. Smart traders have learned how not to leave footprints. Then again, this crowd does not care since it is evident that bravado is all part of their strategy when it comes to the gold price. Intimidation is one of their tactics and for many years it has served them well. The problem is that the long term chart shows that while they have won many a battle, they are slowly losing the war for gold.  The rising economic powerhouses of Asia are too powerful of a force to contend with in the gold market and they have made it quite clear that they intend to hold gold as part of their official reserves. Price capping efforts by the West only serve to provide a discounted gold price to buyers from the East who must no doubt in private scratch their heads and marvel at such short-sighted madness on display by their debt-plagued counterparts on the other side of the globe.  I have said it once and will say it again – the war for gold is the war for economic supremacy in the 21rst century.
My hope is that at some point the US elects leaders who understand the significance of a strong national currency and who will hopefully work to bring gold back into the monetary system in some form to salvage the Dollar. Perhaps things will need to become much worse before wisdom reasserts herself in US monetary matters.
Silver has the more impressive chart of the two metals (gold and silver) as it continues its relentless rise having encountered some light resistance just above $22. There does not seem to be much between that level and $23 to hold it in check from a technical perspective. Support levels are at yesterday’s low which is about $1.00 below its current price.
The HUI is holding above 510 which is constructive but it will still need a closing push past 520 to see the mining shares accelerate as a sector. I would prefer to see it maintain its footing above 510 but as long as it holds above 500, the bulls have the advantage. Bears will start growling if it falls below 495 and fails to recover the 500 level. It is showing some signs of uncertainty today.
Bonds are a tad lower but remain above last week’s high at this point in the trading session. That they will need to do in order to keep the trend moving higher. Failure to hold this line will result in a drop back towards 129.
One thing is for certain, at the current rate of decline there is not much technical support on the price charts for the US Dollar until the region near 75 on the USDX. If that gives way, I think even crude oil is going to respond and move higher as the OPEC nations are not going to exchange their lifeblood for a paper currency that is imploding in value. The supply of easily-accessible crude is finite; the supply of easily-printed Dollars seems to be infinite.
Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini


U.S. Economy "Close to a Destructive Tipping Point," Glenn Hubbard Says Posted Sep 28, 2010 07:30am EDT by Aaron Task
"America is very close to a destructive tipping point," co-authors Glenn Hubbard and Peter Navarro warn in their new book Seeds of Destruction. "We must change how we conduct our politics and economics…or we will inevitably go the way of all once-great nations and suffer an irreversible decline."
Hubbard, dean of Columbia Business School, joined Dan Gross and I to discuss the "major structural imbalances" facing America, chief among them being the government’s profligate spending.
Hubbard, you may recall, was chairman of the President’s Council of Economic Advisers during George W. Bush’s first term. As you might expect, he is a strong advocate of smaller government and lower taxes. But Hubbard and Navarro, a business professor at UC Irvine, are also harshly critical of Bush’s "gross mismanagement" of the fiscal stimulus bequeathed to his administration by President Clinton. Specifically, Hubbard chastises his former boss for the creation of a new unfunded federal mandate, Medicare Part D.
But if Bush was a big spender, President Obama is "taking it to a whole other level," Hubbard says, citing the familiar critiques of ObamaCare and Financial Reform and "excess government spending" in general.
In short, Hubbard believes Obama inherited a mess but has made it worse with nearly every one of his major policy initiatives and general governing philosophy.

Jim Sinclair’s Commentary
Thank you to all of you OTC derivative manufactures and distributors. This never needed to happen. You turned a normal four year economic correction into a disaster.

Recession rips at US marriages, expands income gap By HOPE YEN (AP) – 16 hours ago
WASHINGTON — The recession seems to be socking Americans in the heart as well as the wallet: Marriages have hit an all-time low while pleas for food stamps have reached a record high and the gap between rich and poor has grown to its widest ever.
The long recession technically ended in mid-2009, economists say, but U.S. Census data released Tuesday show the painful, lingering effects. The annual survey covers all of last year, when unemployment skyrocketed to 10 percent, and the jobless rate is still a stubbornly high 9.6 percent.
The figures also show that Americans on average have been spending about 36 fewer minutes in the office per week and are stuck in traffic a bit less than they had been. But that is hardly good news, either. The reason is largely that people have lost jobs or are scraping by with part-time work.
"Millions of people are stuck at home because they can’t find a job. Poverty increased in a majority of states, and children have been hit especially hard," said Mark Mather, associate vice president of the Population Reference Bureau.
The economic "indicators say we’re in recovery, but the impact on families and children will linger on for years," he said.

Jim Sinclair’s Commentary
"But only after rising to 90." Now there is some classic MOPE.

Wall Street Breakfast: Must-Know News by SA Editor Eli Hoffmann
Government’s AIG exit imminent. Sources say AIG (AIG) and the government are finalizing a plan that would accelerate repayment of some of AIG’s debt to taxpayers and allow the government to exit its 79.8% stake, but only after rising to over 90%. The conversion price of the Treasury’s $49B in preferred shares is the main point of contention, with AIG officials trying to ensure shareholders "don’t lose all the upside," and the Treasury concerned about leaving too much meat on the bone. The plan, which needs the approval of AIG’s board, the Treasury, the Fed, and three trustees who oversee the government’s stake, could be released as soon as today if parts fall into place.

Posted: Sep 29 2010     By: Greg Hunter      Post Edited: September 29, 2010 at 11:49 am
Filed under: Greg Hunter,
(Courtesy of Greg Hunter of

Dear CIGAs,
I was pulling up to a store yesterday in my car, listening to CNBC on XM Radio, when an interview with banking analyst Meredith Whitney came on.  I shut the car off and listened because, over the years, I have learned when Whitney talks, everybody should pay attention.  There are only two reasons why I think this way:  (1) Whitney has a track record of many good calls on the economy and banking.  (2) Her predictions are usually spot on.   
For those of you who are not familiar with Ms. Whitney, in November of 2007, she first raised the specter that Citigroup might have to cut its dividend because of losses in mortgage backed securities.  At the time, Citigroup stock was trading for around $50 a share, and everybody looked at her like she had two heads.  Whitney never backed off that call in her many interviews in the months that followed.  Citigroup, of course, did cut the dividend and almost went bankrupt.  The stock now sells for less than 4 bucks a share.
In June of this year, when everybody in the mainstream media was still hyping “Green Shoots” and the so-called “Recovery,” Whitney predicted on CNBC, “Unequivocally, I see a double-dip in housing.  There’s no doubt about it . . . prices are going down again.”  Bang!–another direct hit.  I wrote about this in a post called “Double Dips Coming Everywhere.”

Posted: Sep 29 2010     By: Jim Sinclair      Post Edited: September 29, 2010 at 11:48 am
Filed under: Jim's Mailbox

U.S. Dollar Is `One Step Nearer’ to Crisis as Debt Level Climbs, Yu Says CIGA Eric
The old idiom of the writing’s is on the wall suggests doom or misfortune. The recent breakdown of yet another head and shoulders pattern provide further support that the writing’s is on the wall for the U.S. dollar. The minimum measured move forecasts a break of the 2009 lows. In time the public will come to recognize the severity of these technical break downs through real world consequences that cannot be ignored.
U.S. Dollar Index ETF (UUP): clip_image001
The U.S. dollar is “one step nearer” to a crisis as debt levels in the world’s largest economy increase, said Yu Yongding, a former adviser to China’s central bank.
Any appreciation of the dollar is “really temporary” and a devaluation of the currency is inevitable as U.S. debt rises, Yu said in a speech in Singapore today.

Dear Eric,
It is my informed opinion that "Direct Dealers" executing QE are the Fed via beards, nothing else.
This is exactly what the ECB is doing in the Irish, Spanish and Greek auctions. It is hiding in plain view.

5-Year Auction Results CIGA Eric
The term direct bidders suggest US institutional investors that circumvent the primary dealers that traditional underwrite the bulk of government bond sales. Direct bids, as compared to Dealer bids, are impossible to trace. The trends of decreasing dealer and increasing direct participation reflects a significant change in how these auction are being funded since 2009. This change in money flows most likely reflects the growing strain within the sovereign debt markets that certain interests would rather not be recognized.
I will be watching the coming 7-, 10- and 30-year auction results.
Average Percentage of Total Accepted Bids Primary Dealers, Direct and Indirect Bidders since 2009: clip_image002

Dear LT,
As you warned us before, do not do anything you are not afraid to disclose. We move ever closer to total authoritarian free enterprise, another blow against economic freedom in the "Land of the Free."

Regulators to expand anti-terrorism rules for tracking money transfers By Martin Crutsinger, Associated Press
WASHINGTON The Obama administration is proposing that banks report all electronic money transfers in and out of the country, expanding its anti-terrorism requirements for financial institutions
Officials at the Treasury Department’s Financial Crimes Enforcement Network said Monday that the new requirement would boost their ability to track the source of funding for terrorists.
Currently banks are required to only report cash transactions above $10,000. They are also required to keep records on all electronic transfers of money in and out of the country above $3,000 and provide that information to law enforcement officials if asked to do so.
James H. Freis Jr., the director of the Treasury agency, said that widening the reporting requirement would provide benefits with only a "modest cost to industry"

On the Secret Committee to Save the Euro, a Dangerous Divide

Taleb Says Unawareness of Deficit Risk Has Him `Extremely Bearish' on U.S.

The Credit Meltdown and the Shadow Banking System: What Basel III Missed

Recession Not Over, Double-Dip or Worse Coming

Martin Weiss: Three Government Warnings of Financial Fiascos!

Facts About the Deindustrialization of America 

Does Silver's "Smooth Ride" Lead Past $30? 

Gold is the Final Refuge Against Universal Currency Debasement 

Once 1-oz Gold = One Year's Wage; 1-oz Silver = One Month's Wage

Gold: Attention Deficit Disorders (ADD)
posted by Eric De Groot at Eric De Groot - 6 hours ago
I picked up my last Eagle just a week ago. Well, there goes the lowest premium one ounce. European Central banks are curtailing selling gold. Asian central banks are buying gold. $1650 is within reach. ...

posted by Eric De Groot at Eric De Groot - 10 hours ago
It's called consolidation of power through culling of the weak and the protection of the connected. The largest number of bank failures in nearly 20 years has eliminated jobs, accelerated a drought in len...

Tipping points Commodities, USD, Gold, Yuan 

Gold Forecaster - Why Did the Gold Price Start Rising From $275, in 2000 and Why is it Still Rising Through $1,300? 

Posted: Sep 28 2010     By: Jim Sinclair      Post Edited: September 28, 2010 at 4:42 pm
Filed under: In The News

My Dear Friends,

We cannot take pleasure in the things that have caused gold to move above $1300. However, going forward we can take both pride and comfort in the fact that we have secured a solid foundation for our families. $1650 can now be seen over a very near horizon.
This has been an important week and day for you and me in the bush of Africa. I am writing to you from an office made from a shipping container with A/C, WIFI and all kinds of technical equipment. I miss the good folk who joined us here. We had fun at an ongoing fireside seminar and great camaraderie. For me today will remain a milestone in my life, my work of eight years and total business career.
My reward is your security going forward.
Jim Sinclair

Jim Sinclair’s Commentary
I picked up my last Eagle just a week ago. Well, there goes the lowest premium one ounce.
European Central banks are curtailing selling gold. Asian central banks are buying gold.
$1650 is within reach.

U.S. Mint Suspends Sales of American Eagle Gold Coins (Update1) By Vincent Del Giudice – August 21, 2008 16:19 EDT
Aug. 21 (Bloomberg) — The U.S. Mint suspended sales of its 1-ounce “American Eagle” gold coins after soaring commodity prices led collectors and investors to deplete supplies.
It is the first time in two decades that the Mint halted sales of the coins, which are made of 22-carat gold from domestic mines. The coins also contain small amounts of alloy for hardening.
In a memo to dealers dated Aug. 15, Cathy Laperle, a Mint official, said: “Due to the unprecedented demand for American Eagle Gold One Ounce Bullion coins, our inventories have been depleted. We are therefore temporarily suspending all sales of these coins. We are working diligently to build up our inventory and hope to resume sales shortly.”
Gold prices soared over the past year, with the most active gold futures reaching a record $1,033.90 an ounce on March 17 as the price of crude oil increased and the dollar weakened against the euro and other currencies. Commodity prices have since retreated.
American Eagle coins, introduced in 1986, are also available in other weights as well as silver and platinum. The suspension was reported in today’s editions of The Wall Street Journal.

Thoughts On Gold From The Bush In Africa
This is nothing more than your standard round number action in anything.
Gold is headed for $1650 and nothing will stop it.

Jim Sinclair’s Commentary
The flag is going up the pole to see if it is saluted. Greenspan has practically said the same thing. Let’s see if his bagged man Bernanke goes for it as things spiral out of control.
The likely result is a virtual bag of currencies tied to gold not by conversion or interest rates, but by a relationship to a broad number for Western international liquidity, sort of a Western world M3.

Gold is the final refuge against universal currency debasement
States accounting for two-thirds of the global economy are either holding down their exchange rates by direct intervention or steering currencies lower in an attempt to shift problems on to somebody else, each with their own plausible justification. Nothing like this has been seen since the 1930s.
By Ambrose Evans-Pritchard
Published: 6:01PM BST 26 Sep 2010

“We live in an amazing world. Everybody has big budget deficits and big easy money but somehow the world as a whole cannot fully employ itself,” said former Fed chair Paul Volcker in Chris Whalen’s new book Inflated: How Money and Debt Built the American Dream.
“It is a serious question. We are no longer talking about a single country having a big depression but the entire world.”
The US and Britain are debasing coinage to alleviate the pain of debt-busts, and to revive their export industries: China is debasing to off-load its manufacturing overcapacity on to the rest of the world, though it has a trade surplus with the US of $20bn (£12.6bn) a month.
Premier Wen Jiabao confesses that China’s ability to maintain social order depends on a suppressed currency. A 20pc revaluation would be unbearable. “I can’t imagine how many Chinese factories will go bankrupt, how many Chinese workers will lose their jobs,” he said.

Jim Sinclair’s Commentary
With the FDIC on the Federal teat it is you who are going to make all the claims good.
Eventually the FDIC will pay in Federal scrip.
You have not seen anything yet.

FDIC faces costly WaMu claim Posted by Colin Barr
September 28, 2010 11:04 am

The hits keep coming for the Federal Deposit Insurance Corp.
The FDIC, busy cleaning up after the biggest run of bank failures in 20 years, now faces a costly legal battle with perhaps the biggest beneficiary of the financial meltdown of 2008, JPMorgan Chase (JPM).
The bank wants the FDIC to cover the cost of defending lawsuits facing JPMorgan following its September 2008 fire sale acquisition of Washington Mutual, the Seattle thrift whose collapse ranks as the biggest-ever U.S. bank failure.
The JPMorgan-WaMu tie-up ranks as one of the all-time sweetheart deals, ranking alongside JPMorgan’s acquisition earlier in 2008 of Bear Stearns for less than the price of Bear’s Manhattan headquarters.
JPMorgan paid just $1.9 billion for the banking assets of a bank with a huge West Coast presence and $188 billion in deposits. Asked the evening of the deal to comment on what rival bids JPMorgan might have bested, CEO Jamie Dimon (right) said, "We don’t know and we don’t care."
The FDIC arranged the deal just over a week after the failure of Lehman Brothers and the bailout of AIG (AIG), and billed the arrangement, favorable as it was for JPMorgan, as "a transaction in which neither the uninsured depositors nor the insurance fund absorbed any losses."

Tuesday, September 28, 2010

Bank of England tells savers: Screw you; we're debasing the currency


Ambrose Evans-Pritchard: Fed is out of control, arranging debt default by stealth


CNBC Europe explains the Plunge Protection Team in action


Goldman Releases Most Bearish 2011 Outlook Presentation Yet, Sees S&P In 725-800 Range In QE2 Case


Gross, El-Erian Rumored Replacements For Larry Summers


POMO Completed, New York Fed Injects $550 Million To Get Apple, Amazon And Netflix Back To Unchanged


Posted: Sep 28 2010     By: Jim Sinclair      Post Edited: September 28, 2010 at 5:37 am
Filed under: In The News

Jim Sinclair’s Commentary

Here is the flow of money:
1. Banks mark up their junk paper to full value.
2. This mark up was accounted for in the prop trading accounts.
3. Because it was a mark up there was no cash income but only a balance sheet change and artificial prop trading department profit.
4. Major sickening bonuses were paid to all members of these firms because it was the last draw from the well.
5. TARP money came into the firms to pay for the bonuses.
6. Where TARP was repaid it came from stock and bond issue.
7. Therefore the public paid for the bonuses on a flow of funds basis.
8. Flow of funds is the true measure.
9. Now all investment banks will have to do business to profit. Their only business left that can generate real money are credit default swaps and tax fiddling OTC derivatives. Now the prop trading department must be sold so you do not witness the daily major winner flopping big time. The buyers of bank prop trading departments are in for a shock.

Morgan Stanley Said to Freeze Investment-Bank Hiring for 2010 By Michael J. Moore – Sep 27, 2010 10:40 PM PT
Morgan Stanley, the sixth-largest U.S. bank by assets, halted hiring at its investment-banking group for the rest of 2010, a person briefed on the decision said.
The firm ruled out layoffs through the end of the year, the person said, speaking anonymously because the matter hasn’t been publicly disclosed. Jim Wiggins, a spokesman for Morgan Stanley, declined to comment on the hiring freeze. He said the company intends to hire brokers for the Morgan Stanley Smith Barney unit, a joint venture with Citigroup Inc.
The freeze, which includes the New York-based firm’s sales and trading units, comes as weak trading and equity underwriting volume may lead the five largest Wall Street banks to post their lowest revenue from investment banking and trading since the fourth quarter of 2008. Bank of America Corp. is firing as many as 400 employees in its global banking and markets division, a person briefed on the matter said last week.
Fox Business Network reported Morgan Stanley’s decision to suspend hiring yesterday.
Companies including Barclays Capital and Credit Suisse Group AG also have started reducing staff in Europe. Securities firms around the world will cut as many as 80,000 jobs in the next 18 months as revenue growth begins to slow, bank analyst Meredith Whitney of Meredith Whitney Advisory Group LLC said in a report dated Aug. 31.

Jim Sinclair’s Commentary
The isn’t a snowballs chance in hell that this will happen, although it should.

Shut Down the Fed (Part II) By Ambrose Evans-Pritchard Economics Last updated: September 27th, 2010
I apologise to readers around the world for having defended the emergency stimulus policies of the US Federal Reserve, and for arguing like an imbecile naif that the Fed would not succumb to drug addiction, political abuse, and mad intoxicated debauchery, once it began taking its first shots of quantitative easing.
My pathetic assumption was that Ben Bernanke would deploy further QE only to stave off DEFLATION, not to create INFLATION. If the Federal Open Market Committee cannot see the difference, God help America.
We now learn from last week’s minutes that the Fed is willing “to provide additional accommodation if needed to … return inflation, over time, to levels consistent with its mandate.”
NO, NO, NO, this cannot possibly be true.
Ben Bernanke has not only refused to abandon his idee fixe of an “inflation target”,  a key cause of the global central banking catastrophe of the last twenty years (because it can and did allow asset booms to run amok, and let credit levels reach dangerous extremes).

Jim Sinclair’s Commentary
The legislators pandering to the voters on this issue are both insane and dumb.
What do you expect China to do, sit there and smile?

China May Retaliate for Currency Measure, U.S. Businesses Say By Mark Drajem – Sep 27, 2010 3:41 PM PT
China may retaliate against U.S. businesses operating in the country if Congress passes legislation intended to force a revaluation of the yuan, representatives of those companies said.
China “is looking for another bad guy” after decades of tension with Japan, Robert Roche, the chairman of the American Chamber of Commerce in Shanghai, said at a briefing in Washington yesterday. “We are going to fit that bill.”
The House of Representatives is set to consider legislation this week that would let companies petition for higher duties on imports from China to compensate for the effects of a weak yuan. Representatives of the American Chambers of Commerce in China were in Washington warning congressional aides, administration officials and lobbyists about rising commercial tensions between the nations.
The group includes representatives from the China offices of General Electric Co., Citigroup Inc. and Baxter International Inc.
“This step would make it harder for us to export to China, not easier,” Timothy Stratford, a partner in Beijing at Covington & Burling LLP and a former U.S. trade official, said of the legislation that was approved by the House Ways and Means Committee on a voice vote last week.

Jim Sinclair’s Commentary
Effort to fight terrorism? Sure.

Money transfers could face anti-terrorism scrutiny By Ellen Nakashima
Washington Post Staff Writer
Monday, September 27, 2010; 2:50 AM

The Obama administration wants to require U.S. banks to report all electronic money transfers into and out of the country, a dramatic expansion in efforts to counter terrorist financing and money laundering.
Officials say the information would help them spot the sort of transfers that helped finance the al-Qaeda hijackers who carried out the Sept. 11, 2001, attacks. They say the expanded financial data would allow anti-terrorist agencies to better understand normal money-flow patterns so they can spot abnormal activity.
Financial institutions are now required to report to the Treasury Department transactions in excess of $10,000 and others they deem suspicious. The new rule would require banks to disclose even the smallest transfers.
Treasury officials plan to post the proposed regulation on their Web site Monday and in the Federal Register this week. The public could comment before a final rule is published and the plan takes effect, which officials say will probably not be until 2012.
The proposal is a long-delayed response to the 2004 Intelligence Reform and Terrorism Prevention Act, which specified reforms to better organize the intelligence community and to avoid a repeat of the 20S01 attacks. The law required that the Treasury secretary issue regulations requiring financial institutions to report cross-border transfers if deemed necessary to combat terrorist financing.

Jim Sinclair’s Commentary
Your children and grandchildren must learn Mandarin so they can speak with their boss.

US Is ‘Practically Owned’ by China: Analyst Published: Monday, 27 Sep 2010 | 6:08 AM ET
By: Antonia Oprita
Web Producer,

The US supremacy as the top world economy will end sooner than many people believe, so gold is a better investment than the dollar despite it hitting a new record, Tom Winnifrith, CEO at financial services firm New Rivington Street Holdings, told Monday.
Gold hit a new record high Monday and silver rose to another 30-year peak as investors were worried about the dollar weakening further after the Federal Reserve hinted at more quantitative easing last week.
The US trade deficit and debt continue to grow and the authorities are reluctant to address the problem, preferring to print money, Winnifrith said.
"America is practically owned by China," he said.
He reminded of the fact that in 1900, sterling was the world’s reserve currency but by 1948, that was no longer the case as the British Empire collapsed.
"America is doing what Britain did," Winnifrith said. "America spends much more than it can afford and it’s not addressing the issue."

Jim Sinclair’s Commentary
Now let’s see European central bankers turn buyers, which they will.

European Central Banks Halt Gold Sales Published: Monday, 27 Sep 2010 | 4:27 AM ET
By: Jack Farchy, Financial Times

Europe’s central banks have all but halted sales of their gold reserves, ending a run of large disposals each year for more than a decade.
The central banks of the euro zone plus Sweden and Switzerland are bound by the Central Bank Gold Agreement, which caps their collective sales.
In the CBGA’s year to September, which expired on Sunday, the signatories sold 6.2 tons, down 96 per cent, according to provisional data.
The sales are the lowest since the agreement was signed in 1999 and well below the peak of 497 tons in 2004-05.
The shift away from gold selling comes as European central banks reassess gold amid the financial crisis and Europe’s sovereign debt crisis.
Bernanke Says U.S. Economic Growth Too Slow Even With Fed Bond Purchases. Gee, if the Fed just buys lots and lots of stocks and bonds, we'll all be multi-trillionaiares, just like those wealthy Zimbabweans.

Zero Hedge: Debunking The Great Myth Of US Consumer Deleveraging, Or Why The US Economy Will End Not With A Whimper But A Bang

15 Bone Chilling Signs That Part Two Of The Double Dip Housing Crash Has Begun

Revisiting option ARM data – Bank of America, Wells Fargo, and JP Morgan still have over $160 billion in option ARM loans outstanding. Over 250,000 option ARMs in California still active.

Trashing the dollar to save the economy

Those Who Know Will Understand 

Silver Futures Jump to 30-Year High; Gold Rises to Record, Topping $1,300

Gold Through The Ages

Undervalued Silver in a Government Spending Frenzy

Did the Fed Really Say Inflation Isn't High Enough?

Introduction To The Road Through 2012: Revolution or World War III


Brazil Crops Shrivel as Amazon Dries Up to Lowest in 47 Years.

 Pneumonic Plague in China.

Australia faces worst plague of locusts in 75 years

Jim Sinclair’s Commentary
See what happens if a rating agency tells the truth!

Chinese Ratings Agency That Gave The US A Bad Rating Blasts The SEC Joe Weisenthal | Sep. 26, 2010, 5:54 PM
Dagong Global Credit Rating Co. LTD is a Chinese ratings agency that got some attention earlier this year for ratings the US a mere AA, in contrast to the AAA-rating offered by the big three.
Last week the SEC rejected Dagong’s bid to be recognized as an official National Statistical Ratings Agency.
That prompted Dagong to blast the SEC, saying it would take a legal action.
The SEC’s official line is that it can not conduct proper cross-border supervision.
A report in Xinhuanet quotes an expert saying that the SEC is probably just looking to keep the oligopoly in place, and well, the answer to that is… well, duh.

Jim Sinclair’s Commentary
It is only going to get worse as we enter the predictable effect of ineffectual QE to Infinity

Banks Keep Failing, No End in Sight
Since WaMu Fell, 279 Lenders Have Collapsed; Lost Jobs, Curtailed Lending and the Big Get Bigger
* SEPTEMBER 27, 2010
The largest number of bank failures in nearly 20 years has eliminated jobs, accelerated a drought in lending and left the industry’s survivors with more power to squeeze customers.
Some 279 banks have collapsed since Sept. 25, 2008, when Washington Mutual Inc. became the biggest bank failure on record. That dwarfed the 1984 demise of Continental Illinois, which had only one-seventh of WaMu’s assets. The failures of the past two years shattered the pace of the prior six-year period, when only three dozen banks died.
Two more banks went down on Friday, and failures are expected to "persist for some…

Jim Sinclair’s Commentary
This is prevalent and worse. Control of documents was lost in the boom in sales of securitized debt. A special meeting was called in 2008 by the New York Federal Reserve about this calamity.
Manufacturers of this toxic crap promised to fix the loss of documents and duplications of mortgages found in securitized paper, but never did.
There is a great amount of securitized debt on mortgages that has no chance whatsoever of recovery.

JPMorgan Based Home Foreclosures on Faulty Court Documents, Lawyers Claim By Lorraine Woellert and Dakin Campbell – Sep 26, 2010 9:00 PM MT
JPMorgan Chase & Co. faces a legal challenge next month that could cast doubt on thousands of foreclosures after a mortgage executive at the bank said she didn’t verify documents used to justify home seizures.
Lawyers for a Palm Beach County, Florida, homeowner asked a judge to throw out a foreclosure as a penalty for misleading the court, according to attorney Tom Ice of Ice Legal PA. They’re citing a May 17 deposition in which the JPMorgan executive said she signed thousands of affidavits and documents supporting the New York-based bank’s claims without personally checking loan records. The court is scheduled to hear arguments Oct. 19.
The Chase Home Finance operation supervisor, Beth Ann Cottrell, said in May she was among eight managers who together sign about 18,000 documents a month, according to a transcript of her sworn deposition provided by Ice. Asked how they were prepared, she said she relied on other people at the firm.
“My review is more or less signing the document unless it’s questionable,” she said. That means, “somebody has a question and brings it to me and says, ‘Beth, can you take a look at this?’”
Inaccurate statements by banks in foreclosure documents may give borrowers who have lost their homes a legal basis to challenge the seizures, derailing resales and casting doubts on property titles. A Florida court sanctioned Ally Financial Inc.’s GMAC Mortgage unit for faulty affidavits in 2006, and the firm suspended evictions in 23 states this month after finding employees still signing affidavits without checking the data.

Jim Sinclair’s Commentary
The recent auction of Irish bonds went well. The euro rescue fund of $1 trillion bought it.
The euro rescue funds bought the Greek auctions as well. Only fools are fooled.

Anglo Irish Debt Rating Cut by Moody’s on Guarantee September 27, 2010, 7:34 AM EDT
By Joe Brennan

Sept. 27 (Bloomberg) — Anglo Irish Bank Corp.’s senior debt was cut to the lowest investment grade rating by Moody’s Investors Service, which said it may reduce the rating to junk unless the government guarantees bondholders against losses.
The ratings company cut the lender’s senior unguaranteed debt to Baa3 from A3, Moody’s said in a statement today. Anglo Irish’s subordinated debt, guaranteed by Ireland’s government until Sept. 29, was also downgraded to Caa1 from Ba1. The firm said it may reduce its senior debt ratings.
Ireland first provided the guarantee to prevent a collapse of the country’s financial system after Lehman Brothers Holdings Inc. filed for bankruptcy. The government nationalized Dublin- based Anglo Irish in January 2009 after the lender was battered by losses from the collapse of the country’s real estate bubble. Ireland, which has injected 22.9 billion euros ($31 billion) into the bank, will outline the bailout’s final cost this week.
“Moody’s expects a continued asset quality deterioration in the loan book of Anglo Irish that will require further government support,” Ross Abercromby, vice president and lead analyst for Anglo Irish at Moody’s, said in today’s statement. “In the absence of explicit government guarantees, the senior unsecured debt ratings could be further downgraded.” Moody’s rates anything below Baa3 as sub-investment grade.
The ratings company reduced its rating on Anglo Irish’s mortgage-covered bonds to A2 from Aa2.

Jim Sinclair’s Commentary
A fine and well based suggestion.

Czech president tells UN to stay out of economics Sat Sep 25, 2010 11:01pm BST
By Louis Charbonneau

UNITED NATIONS, Sept 25 (Reuters) – Czech President Vaclav Klaus on Saturday criticized U.N. calls for increased "global governance" of the world’s economy, saying the world body should leave that role to national governments.
The solution to dealing with the global economic crisis, Klaus told the U.N. General Assembly, did not lie in "creating new governmental and supranational agencies, or in aiming at global governance of the world economy."
"On the contrary, this is the time for international organizations, including the United Nations, to reduce their expenditures, make their administrations thinner, and leave the solutions to the governments of member states," he said.
Klaus appeared to be responding to the address of the Swiss president of the General Assembly, Joseph Deiss, who said on Thursday at the opening of the annual gathering of world leaders in New York that it was time for the United Nations to "comprehensively fulfill its global governance role."
Deiss suggested the world body should get more involved in economic and financial issues and not leave them solely in the hands of forums like the Group of 20 club of key developed and developing nations.

"We have no patrol units. There is no one on the streets. We respond to only crimes in progress. We don’t respond to property crimes." - Ashtabula County, Ohio Deputy Sheriff Ron Fenton, as quoted by Maclean’s, September 22, 2010