John Williams of ShadowStats Says Economic Data Will Get Much Worse.

CHART OF THE WEEK

In the past ten years alone, the US dollar, the Canadian dollar, the UK pound and the euro have collectively fallen 70 percent in value if measured in real (currency-debased) terms. In other words, when they are priced in terms of gold. www.bmgbullion.com/document/682

 

Bernanke: Fed Will Take "Unconventional Measures" If Needed. "...the Fed will consider making another large-scale purchase of securities if the slowing economy were to deteriorate significantly and signs of deflation were to flare."

 

Michael Pento Says Fed Will Buy Stocks And Real Estate In Its Next Attempt To Create Inflation

 

Ron Paul questions whether there's gold at Fort Knox, New York Fed. To clarify, part of his concern is that physical gold may indeed be stored there, but that it might actually belong to other parties!


Government Set to Confirm What Many Feel: Economy at a Standstill



Snapshot of an Economy About to Get a Lot Bleaker



Fed Seeks Delay of Bank Data Release



Democrats Face Economic Facts: Updraft Unlikely




Click either chart to enlarge this month’s action in Gold in PDF format with commentary from Trader Dan Norcini

 
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In The News Today

Posted: Aug 31 2010     By: Jim Sinclair      Post Edited: August 31, 2010 at 5:06 pm
Filed under: In The News
Dear CIGAs,
Even the dead are now homeless.





Jim Sinclair’s Commentary
The Consumer Confidence Index is a survey of economic statistics that is dicey at best.
Consumer confidence rose more than forecast in August. Specifically, the Conference Board’s confidence index increased to 53.5 from a five-month low of 51 in July; beating the Street’s estimate of 50.7. (From Bloomberg.com)


Jim Sinclair’s Commentary
Case-Shiller, your nose is growing.

The S&P/Case-Shiller home-price index for June increased 4.2% from June 2009. (From Bloomberg.com)

Jim Sinclair’s Commentary
Debka is rumored (unconfirmed) to be influenced by Massad.
Regardless, this development is telling.

US to sell Israel massive military fuel stocks worth $2 bn DEBKAfile Exclusive Report August 28, 2010, 12:53 PM (GMT+02:00)
On Aug. 6, the US Defense Security Cooperation Agency, DSCA, informed Congress of the sale to Israel of 60 million gallons of unleaded gasoline, 284 million gallons of JP-8 aviation jet fuel and 100 million gallons of diesel fuel at an estimated cost of two billion dollars. The date is significant, DEBKAfile’s intelligence sources find.  Ten days earlier, the Japanese tanker M.Star was attacked in Omani waters of the Strait of Hormuz with 200,000 tons of oil.
Although American experts who examined the vessel, they never attributed the damage to sabotage by Iran or al Qaeda, despite the latter’s claim of responsibility on Aug. 4 While Washington did its best to sweep the incident under the rug, Saudi intelligence were worried enough about the threat inching dangerously close to the Gulf’s oil exporting lifeline to launch an independent investigation of the incident.
Their investigators discovered it was staged by a Saudi terrorist who operates out of Iran under the orders of the Revolutionary Guards. To Riyadh, the episode looked like a blunt warning from Tehran to Washington and its allies about the consequences – not just of a direct strike against Iran’s nuclear facilities, but the possibility of sanctions upsetting the equilibrium of the Islamic regime.
Blockage of the Strait of Hormuz would cut off Israel’s primary source of fuel. Therefore, our sources report, a series of accords, some of them secret, have been transacted to back up America’s standing commitment to keep Israel supplied with its energy needs in the event of armed conflict or crisis on world fuel markets.
More…


Jim Sinclair’s Commentary
One thing is for sure. Regardless of whether the rumors are true about the Chinese central banker, you can be sure the people who run the Chinese central bank will not buy many more US Treasuries.
Yes, this statement speaks to the Chinese rating of US Treasury investments, a definite downgrade that Moody’s and Standard and Poors dare not make.

Japan debt safer than U.S. debt: China economist By Simon Rabinovitch and Aileen Wang
Posted 2010/08/11 at 7:42 am EDT
BEIJING, Aug. 11, 2010 (Reuters) — China has been buying record amounts of Japanese government debt because it is less risky than U.S. debt, at least in the short term, a Chinese government economist said on Wednesday.
Investing in Japanese bonds is safer because so much of the country’s debt is held domestically, and the yen is on course to strengthen further, said Zhang Ming, an economist with the Chinese Academy of Social Sciences, a top government think-tank.
"Even though the difference in yields is big, China has been abandoning U.S. debt and picking up Japanese debt. This definitely shows that it believes the risks of U.S. debt far exceed those of Japanese debt," Zhang said in a report issued by his research institute.
The report was issued a day after the Federal Reserve said it would buy more U.S. government debt in a form of mild quantitative easing to counter economic weakness.
Top Chinese leaders have previously registered their concerns about lax U.S. fiscal policies eroding the value of their investments in the United States.
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Jim Sinclair’s Commentary
I wonder if he just figured this out.
This has been true since they planted the buttonwood tree.

Hedge Fund Manager Dan Loeb: "The Whole System Is Rigged" Posted Aug 31, 2010 12:48pm EDT by Courtney Comstock
Provided by the Business Insider, August 31, 2010:
Apparently everyone’s forwarding around the powerful message in hedge fund manager Dan Loeb’s most recent letter to investors.
The message, from the number of chunks of quotes Dealbook pulls out of Loeb’s letter is: I don’t trust the government to do what’s best for the economy, so I’m pulling out of companies that could be impacted by public policy.
Third Point’s most recent investment strategy reflects Loeb’s belief that banks, healthcare, and for-profit education companies are "overly exposed to unpredictable government regulation."
In the startling conclusion, Loeb says:
“It is easy to see why so many people have concluded that the entire system is rigged.”
Here are the quote chunks we pulled from Dealbook’s analysis of the letter. Key points are bolded:
More…