The Future Of Quantitative Easing

Posted: Oct 31 2010     By: Jim Sinclair      Post Edited: October 31, 2010 at 9:36 pm
Filed under: General Editorial

My Dear Friends,
Tomes have been written this week about quantitative easing, many written by those who didn’t know what QE meant twelve months ago. Tomes are silly as very few actually read them. Those that do read are comatose by the end. We do not do tomes here. We present conclusions.

QE to infinity means the economic can gets kicked down the road again at the cost of the dollar’s value and therefore sparks the event of accelerated currency induced cost push inflation.
No QE means a violent collapse of general business within 90 days. That takes the camouflage off of the following:
1. False balance sheets of financial entities, thanks to the sale of the FASB’s soul to political pressure, are exposed.
2. Further collapse of tax revenue to states brings about a financial crisis much larger than anyone presently anticipates.
3. The malaise in the US destroys what little is left of general confidence in the austere Euro region.
4. The rape of pension funds is exposed.
Gold will go to a figure equal to all foreign debt of the USA divided by the number of ounces that the US is assumed to have. This is how you can calculate the potential price.
If moderate levels of QE are utilized, that means the can gets kicked down the road once again at the cost of the dollar and therefore the event of accelerated currency induced cost push inflation. It might in this case take a few days before the markets figure it out. If moderate QE is announced that means QE to infinity but only revealed a little at a time or not revealed at all. To do QE to infinity without revealing it violates the tool of communication recently discuss by the Fed which means MOPE. It will be revealed.

In The News Today

Posted: Oct 31 2010     By: Jim Sinclair      Post Edited: October 31, 2010 at 9:05 pm
Filed under: In The News

Jim Sinclair’s Commentary
There is no question about whether we will experience state failures on debt. In truth it is already locked and loaded into many states of the USA.
It is one of the items that the Fed has considered as it embarks on the unprecedented course of QE to infinity, regardless of how QE is presented this week.
QE to infinity is an attempt to once again kick the can of economic problems down the road to perdition.
Everything we have spoken about for years has happened. The final act in this play of disintegration will unfold exactly as we anticipate.
Do not allow the madness of algorithms to impact your emotions to the degree that you throw away your insurance.


State of default Oct 25th 2010, 18:24 by Buttonwood
WHAT happens if an individual state defaults? That was the question posed to a panel of luminaries at the Buttonwood gathering in New York, including Robert Rubin, Josh Bolten, Glenn Hubbard, Laurence Meyer and Laura Tyson.
The panel was assumed to be a bunch of Presidential advisers faced with a request for funding from New Jefferson, a fictional state with many of the problems of a typical state – unfunded pension promises, years of fiddling the numbers to balance the budget and a government divided between the parties. New Jefferson is shut out from the markets and asks the Federal government for $1.5 billion to meet a debt repayment due 48 hours away. There could be systemic risks if default occurs with the Chinese government raising the issue of contagion and with some state banks owning a substantial portion of the state’s bonds.
The panel reluctantly agreed to provide temporary funding for the state – say for 30 days – but to require the state to sort out its mess. But it suggested a whole series of stringent conditions, including the use of proper accounting and a requirement to fund its pension plans properly. they were divided over what would happened if New Jefferson failed to save its problem within 30 days.
One suggestion for the long-term was that failed states might see their finances taken over, as happened to Washington DC, with the Federal government taking the decisions. The tricky issue is whether they legally could take such a power.
The panel didn’t really have time to consider whether the long-tem pension problem can be tackled if the courts decided that existing pension rights are legally protected. If they are, then the only answer would be substantial tax rises to pay for them, the last thing the Federal government might want if the economy remains weak.
More…

The Utility of Gold

Posted: Oct 31 2010     By: Jim Sinclair      Post Edited: October 31, 2010 at 5:18 pm
Filed under: General Editorial
Courtesy of CIGA Pedro

Dear CIGAs,
A popular argument against the utility of Gold at times of crisis is regularly offered up through the rather facile statement that it can’t be eaten. This is then given as reason why, in times of great crisis Gold will not “perform” the way food stocks and other inferior alternatives will. Even the Financial Times’ excellent journalist, Gillian Tett recently sang this refrain. It’s becoming a tiresome argument, and it needs to be deconstructed.
It is welcome that people are beginning to see the dichotomy between paper and hard assets. The predominant paper asset is (un-backed, fiat) currency. Hard assets, of course, are many and varied.
But if people believe that wealth preservation can be reduced to a simple juxtaposition between paper representations of wealth and tangible wealth, they are misguided. That is only a partial explanation. There are other issues. One of them is the issue of portability.
In times of economic disaster you can stock-pile food, yes, but what happens if you have to abandon your dwelling due to security issues. What happens if your “home garden” and livestock have to be defended? It is not a nice thought. In preparation for possible dislocations it is unwise to think that you may be able to remain in one place. This is one of the undervalued aspects of Gold. You can pack it up in a small case. Your wealth is mobile. At today’s prices, half a million (USD equivalent) is easily portable. In a years’ time a million or two may be just as easy to cart off in your hand. Things like paintings (especially miniatures) and gems perform a similar function. During a serious crisis like social-breakdown or war, it is not reasonable to assume you will be able to take all of your canned goods, water-filters, generators et al with you, in a vehicle that needs constant refuelling and repair… you’re going to have to be lean, mean and fast on your “feet”. Not weighed down by encumbrances. Ever wonder why people escaping Nazi Germany chose diamonds? Maximum wealth with smallest possible mass and weight. Quite simply, these “you can’t eat Gold” theories, that supposedly undercut Gold’s value, do not hold water.
When people live in crisis situations, one usually finds not that goods aren’t available – but that they are expensive. Fantastic food, caviar champagne and other “accoutrements” were available all over the Soviet Union (Mostly in hard-currency “bereoska”); a bottle of whiskey could even be found in remote American barracks during World War II – but the price, then, depending on location, was about a crisp $100 bill. (Then! … Not now.) Hoarding resets prices when demand goes up and supply crashes. Gold, a hoarded, not consumed, vehicle, performs perfectly in an environment when sought after goods are being restricted from the market and more so if paper currencies are under attack.
Let’s take the consumable issue one step further. If you buy a one lot of European barge delivered (ARA) gasoil, you can, theoretically, take delivery. But how, exactly does a non-configured layman deal with that reality? With great difficulty is the answer. Leaving aside the configuration issues of delivery (which are significant if you’re not a professional oil product transport or storage entity), are you going to transfer it and then store it on your own while meeting legal safety and environmental requirements so that you don’t (literally) blow up the neighbourhood? That’s unlikely. Your parcel will likely become distressed and no one is going to even pick up the telephone to talk to you about how to get rid of your 100 tons of gasoil. Moreover, the owner of the much larger parcel your piece is consigned within will demand that you meet all sorts of other regulations to siphon off your little piece. (Doesn’t this sound a little like sawing off your corner of that 400oz. London Good Delivery bar you were told by some Gold pool was “yours”?). It’s no different in coffee, cocoa and sugar, the grains and other “softs”. You’ll never be able to store in proper condition, and even if you did, deterioration would set in after a few weeks/months. So you’d have to unload it quick, which defeats the whole purpose for which you took delivery. Commodity professionals have noses like bloodhounds for distressed parcels – so you will have your financial eyes gouged out when trying to get rid of your inventory. In something less than a perfect environmental regime, your physical will become worthless and you’ll probably have to pay to get rid of it.
What should additionally be evident from the above is the inherent price potential for physical Gold if delivery demands rise. Not many people are going to know what to do with a one lot of gasoil, coffee, wheat, etc., if they want it delivered. But one hell of a lot of people know EXACTLY what to do with a 100oz bar of Gold. Namely: Hold on to it – i.e. store it. This is what gives the possibility for a delivery squeeze in Gold such massive price outcomes – delivery and storage does not rely solely in the realm of the professional. The amount of people who could demand delivery of paper contracts, and feasibly take delivery is potentially massive. Of course, by the time such demands become manifest, it is unlikely paper claims will be honored. Just the scent of a delivery squeeze (as we learned from the Hunt Brothers experience) can cause mayhem.
Lastly – for the “you can’t eat Gold” crowd – how the logistics of an economic implosion play out vis a vis Gold are already evident in Zimbabwe. The forlorn and starving, including the elderly and sick, spend much of their day panning rivers and streams to amass the miniscule amounts of raw, unrefined, Gold, which is the only thing the hoarders will accept in exchange for the foodstuffs necessary to stay alive. For those who would like a real-life, current example of the “You can’t eat Gold” theory in practice, go to You Tube and search under: “Gold for Bread – Zimbabwe”, for a very harsh dose of reality (the video is not suitable for children and the faint of heart – it is, however, reality).
CIGA Pedro



Nitty Gritty Numbers Suggest Downward Spiral


Imminent Big Bank Death Spiral


Piercing The Mystery of the Gold Market


Shipping The Housing Market Overseas


The Coming Silver Shortage


Bank Failures in Slow Motion


The market is ‘baking in” significant inflation. Investors are buying United States government bonds that effectively had a negative rate of return, because these bonds offer a guaranteed protection against inflation. (TIPS). The investors who took part in the $10 billion auction are betting that inflation, now at about 1 percent annually, will rise to a level that more than compensates for the premium they paid.



The Inflation ‘Genie’ Unleashed: "By reducing real interest rates and trying to break the psychology of ‘Why spend today when I can buy goods cheaper tomorrow,’ they are hoping to drive growth that would be more commensurate with a pickup in employment,” said Dan Greenhaus, chief economic strategist at Miller Tabak & Co. in New York."

 

'End of Liberty'. The most important film you will ever see. Please spread the word about 'End of Liberty' to everybody you know on this Halloween day.

To watch 'End of Liberty' immediately, please go to our video page at: http://inflation.us/videos.html

This movie was made possible by all of the thousands of warning signs that were submitted to us by thousands of NIA members. It is very important for millions of Americans to see this movie. It is the only way we can prevent America from seeing a complete societal collapse!

 

Gonzalo Lira's Redux On Signs Of An Upcoming Hyperinflation

 

Why The Downside To The Fed's "All In" Attempt To Spike Shadow Monetary Velocity Is A $4.5 Trillion Drop In GDP (And The "Upside" Is Hyperinflation)

 

Is The Fed TRYING To Force A Surge In Commodity Prices And Input Costs? Diapason Explains Why Hyperinflation Is Blackhawk Ben's End Goal

 

Guest Post: Concentrated Wealth and the Purchase of Political Power: Democracy's Death Spiral

 

Watch The Political Central Planners: We're Doomed

Jim’s Mailbox

Posted: Oct 31 2010     By: Jim Sinclair      Post Edited: October 31, 2010 at 12:33 pm
Filed under: Jim's Mailbox

Dear Eric,
If financial entities get away with clear and unquestioned CRIME, this society has ended.
Bankruptcy law is state law. Only a massive takeover of state rights would allow Washington to declare what is criminal (backdated false documents, false testimony in writing, etc.) as legal.
Right now this matter is fully the bastion of state Attorney Generals.
Regards,
Jim

Big Banks Told Not To ‘Fix’ A Fraud CIGA Eric
A student of history will notice that while technology advances, certain things within the core of society remain the same. The boom bust cycle, while maintaining subtle differences in description, remains largely the same. Extended periods of easy money based on lax credit terms tends to culminate in what few call acceptable rewards relative to the risks and many other’s depict as outright fraud. The description chosen depends always depends on who received those rewards.
In two letters released Friday, Attorney General Richard Cordray criticized a number of banks and loan-servicing companies, including Wells Fargo & Co.; Ally Financial Inc.’s GMAC Mortgage; Bank of America Corp.; and J.P. Morgan Chase & Co. Mr. Cordray said the banks are trying to paper over fraud committed in foreclosures with temporary fixes that don’t address underlying problems in the banks’ practices.
Source: online.wsj.com
More…


Peter Schiff: Bernanke's QE 2 Will Sink Just Like the Titanic


30 Reasons Why People Should Be Getting Really Nervous About The State of the U.S. Economy.

International Forecaster October 2010 (#9) - Gold, Silver, Economy + More

By: Bob Chapman, The International Forecaster - 31 October, 2010

 

Gold and silver are money again, Eric Sprott tells King World News

 

Is The Fed TRYING To Force A Surge In Commodity Prices And Input Costs? Diapason Explains Why Hyperinflation Is Blackhawk Ben's End Goal

A Fed paper released in September, which we luckily missed as otherwise it would have led to the collective death through uncontrollable foaming in the mouth of the entire Zero Hedge staff, was "Oil Shocks and the Zero Bound on Nominal Interest Rates", in which author Martin Bodenstein (an econ Ph.D.) argues that oil price shocks (i.e., surges in the price of oil such as the one we are about to experience courtesy of a fresh trillion in liquidity about to be unleashed by the Fed) are... wait for it... beneficial to GDP and stimulative to the interest-rate sensitive parts of the economy. To wit: "In fact, if the increase in oil prices is gradual, the persistent rise in inflation can cause a GDP expansion.". Yes you read that right. The Fed is stealthily floating the idea that a surge in oil prices will be for the greater good. In essence, the Fed is telegraphing that while it acknowledges that oil is about to jump to over $100, it won't be as bad as those with a functioning brain dare to claim. And, as we show below, it will actually be a very good thing! While we would probably get a massive lethal subdural hemorrhage if told to argue a view so blatantly and stupefyingly demented, insane and, simply said, wrong, as that espoused by Bodenstein, we are glad that Sean Corrigan of Diapason has gone the extra mile to not only expose the Fed charlatans for their voodoo gimmickry in this narrow topic, and brings up an even more critical idea, which is that the Fed "actually welcomes the current surge in the prices of many of the staples of everyday life; that it actually exults in the drain being exerted on family budgets; that it revels in the squeeze on profit margins being suffered by already-struggling small businesses, because it imagines this will serve to lower the reckoning of the ethereal construct of a generalized, future real interest rate and that this alone will serve to shower riches upon all who are presently suffering, in comparison for the present woes." That nobody has reached this conclusion before is explainable - it is something only the brain of an illogical, demented, perverted genocidal madman's brain can come up with. Which is why we are now convinced the Fed is hoping for not only mild inflation, but an outright surge in prices.

 

Unemployment Figures Confirm the Precious Metals Bull

 

Funny Money and the Banks that Make Us Laugh



The Economy in Pictures

Monthly Gold Charts From Trader Dan

Posted: Oct 30 2010     By: Dan Norcini      Post Edited: October 30, 2010 at 8:04 pm
Filed under: Trader Dan Norcini

Dear CIGAs,
Click either chart to open this months action in Gold in PDF format with commentary from Trader Dan Norcini





 

Show Me The Money

Posted: Oct 30 2010     By: Jim Sinclair      Post Edited: October 30, 2010 at 2:36 pm
Filed under: General Editorial

Dear CIGAs,
Click image to open Martin Armstrong’s latest in PDF format.

 

 

Jim’s Mailbox

Posted: Oct 30 2010     By: Jim Sinclair      Post Edited: October 30, 2010 at 2:32 pm
Filed under: Jim's Mailbox
Unusual Pattern of Buying Rather Than Selling Strength in Silver CIGA Eric
The unusual pattern of buying rather than selling strength by ‘connected’ money in the silver market illustrates a subtle yet distinct change in money flows not see since the price spike of 2005-2006. The massive spike in spreading activity suggests that connected money is unlikely to be the bag holders during a price spike.
Silver London P.M Fixed and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:

COT Money Flow Upper Table:


More…

Will QE2 Impact Equity Market Fundamentals: Consensus And Fringe Views

Gold Forecaster - Repeated, Fraudulent Efforts at and Deviously Controlling Silver Prices - What Next?

MUST READ Op-Ed: The world’s monetary system is melting down...
... And only gold will be left standing.

Gerald Celente: Market Self-Deception Continues

Commitment Of Traders: The Speculative Treasury Bubble Pops As Dollar Longs Continue Rising

Guest Post: Trigger Points, Black Swans, And Other Unpleasant Realities

Essential Preparation for 2011


The German Mark Had Significant Rallies On Its Way To Zero


Gold and 12 Zeroes, Part I


US Debt: A Recipe for Economic Disaster?


At The Daily Bell: The US $200-Trillion Debt Which Cannot Be Named. "Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 percent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. 'Let's get real,' Prof. Kotlikoff says. 'The U.S. is bankrupt.'" 




Dollar Printing Feeding China Inflation


Pimco likens US to 'Ponzi' scheme


HSBC Accused of Silver Manipulation


Baby Boomers: Get Out of the Stock Market Now, the Rug is Being Pulled Out By Insiders. CNBC reports insider selling-to-buying ratio for top firms is a staggering 3,177 to 1.

 

Silver Money for Americans

 
Gold at Foothill of a Mania

North And South Korea Exchange Border Gunfire

 

UPS Cargo Flight From Yemen To Chicago Stopped In London, Found To Contain Ink Toner Cartridge Converted To Bomb, Two Other Bomb Scares

 

John Embry Sees Hyperinflation If Fed Continues On QE Path, Expects Silver At $50

 

Halloween/"1929 Crash" Anniversary Thoughts From Art Cashin

 

How GE Paid A Total Of $5 Billion In Domestic Taxes Between 2002 And 2009 On $639 Billion In Domestic Revenues

 

John Hathaway: Gold will outlive dollar once slaughter comes

 

Do you want to join the class-action lawsuit on silver price manipulation?

 

Vietnam orders banks to stop acting like LBMA members

 

The Fed Bought Fraud

Posted: Oct 29 2010     By: Greg Hunter      Post Edited: October 29, 2010 at 9:39 am
Filed under: Greg Hunter, USAWatchdog.com
Courtesy of Greg Hunter’s USAWatchdog.com

Dear CIGAs,
In the wake of the financial meltdown of 2008, the Federal Reserve announced it would buy mortgage-backed securities, or MBS.  The January announcement by the Fed said it would buy MBS from failed mortgage giants Fannie Mae and Freddie Mac in the amount of $1.25 trillion.  At the time, the Fed said in a press release, “The goal of the program was to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally.”  (Click here for the full Fed statement.) It did provide “support” to the mortgage market, but did it also buy fraud and cover the banks that sold it?  The evidence shows, at the very least, it bought massive amounts of fraud.
We now know the Fed definitely bought valueless MBS because it has joined other ripped-off investors to demand Bank of America buy back billions in sour home debt.  A Bloomberg story from just last week, featuring Philadelphia Fed President Charles Plosser,  reports, “The New York Fed, which acquired mortgage debt in the 2008 rescues of Bear Stearns Cos. and American International Group Inc., has joined a bondholder group that aims to force Bank of America Corp.to buy back some bad home loans packaged into $47 billion of securities.  On the one hand, the Fed has “a duty to the taxpayer to try to collect on behalf of the taxpayer on these mortgages,” Plosser said today at an event in Philadelphia.”
Mr. Plosser lamented the “difficult spot” the central bank is in because it is both bank regulator and plaintiff.  He said, “Should we be in the business of suing the financial institutions that we are in fact responsible for supervising?” (Click here to read the complete Bloomberg story.) To that question, I ask shouldn’t the Fed have done a much better job of supervising the big banks in the first place?  The whole financial and mortgage crisis from sour securities to foreclosure fraud is in the process of blowing sky high.  The entire mess is clearly the biggest financial fraud in history!  It looks to me like the regulators were just supervising their pay checks being deposited into the bank.
And remember, the $1.25 trillion of mortgage-backed securities the Fed bought from Fannie and Freddie?  How much of that is fraud?  William Black, the outspoken Professor of Economics from the University of Missouri KC, says all the big banks were committing “major frauds”in the mortgage-backed security market.  Black says, at Citicorp, for example, “. . . 80% of the mortgage loans it sold to Fannie and Freddie were sold under false representations and warranties.” (Click here for the complete Black interview.) Black claims the frauds increased at some banks, and it is sill going on today!   (I admit I used this same video in a recent post.  I use it again, because it is the single most important and damning indictment of the big banks out there.  Professor Black defines the size of the entire fraudulent mortgage mess.)
More…

In The News Today

Posted: Oct 29 2010     By: Jim Sinclair      Post Edited: October 29, 2010 at 11:43 am
Filed under: In The News

Thought For The Morning
1.4% of the GDP growth of 2% was inventories.
That is scary.

Jim’s Mailbox

Posted: Oct 29 2010     By: Jim Sinclair      Post Edited: October 29, 2010 at 2:00 pm
Filed under: Jim's Mailbox
Jim,
It really doesn’t take much to get to 1650. It’s just a matter of time.
CIGA Stefaan



Economy grows at slightly faster pace in Q3 CIGA Eric
The operative phrase is spent a little more freely.
Private and government (Federal, State & Local) consumption account for 70% and 20% of GDP, respectively. This means that 90% of US GDP comes from a combination of private and public consumption. While some will argue that government consumption expenditures and gross investment also contains "investment", it is nowhere near as efficient and productive as private sector investment. Private sector investment has fallen to 13% as of the third quarter 2010. This is well below the 50’s, 70’s and 80’s highs that exceeded 20%.
Personal Consumption Expenditures (PCE) As A %GDP and Personal Consumption Expenditures As A %GDP Average from 1947:
Government Consumption Expenditures and Gross Investment (GCEI) As A %GDP Average from 1947:
Gross Domestic Private Investment (GDPI) As A %GDP and Gross Domestic Private Investment (GDPI) As A %GDP Average from 1947:
The economy grew at a slightly faster pace over the summer as Americans spent a little more freely.
The Commerce Department said Friday that the economy expanded at a 2 percent annual rate in the July-September quarter. It marked an improvement from the feeble 1.7 percent growth in the April-June quarter.
Source: finance.yahoo.com
More…

Hourly Action In Gold and Silver From Trader Dan

Posted: Oct 29 2010     By: Dan Norcini      Post Edited: October 29, 2010 at 1:58 pm
Filed under: Trader Dan Norcini
Dear CIGAs,
Click chart to enlarge today’s hourly action in Gold and Silver in PDF format with commentary from Trader Dan Norcini

Gerald Celente: The Economy, Wars, What's Next?


Night Of The Living Fed

  
Federal Reserve Balance Sheet Update: Week Of October 27: A Look At Fed Asset Durations

Nic Lenoir: "People Stop Trading When The Market Is Not Reflecting Any Reality"

 

Guest Post: The Stealth Coup D'Etat: U.S.A. 2008-2010 

 

Brett Arends: Warning: Retirement Disaster Ahead


Jim Sinclair’s Commentary
Here is an update of the Exter Pyramid.
Exter, then an officer of First National City Bank in the 70s, presented a similar illustration. First National City Bank became CITI Corp.

Custodial Holdings Charts From Trader Dan

Posted: Oct 29 2010     By: Dan Norcini      Post Edited: October 29, 2010 at 1:02 am
Filed under: Trader Dan Norcini

Dear CIGAs,
Click either image to enlarge today’s Custodial Holdings charts in PDF format with commentary from Trader Dan Norcini

From Zero Hedge: A Quick Glance at Real World Inflation The chart says it all. The official hedonic-adjusted inflation figures are laughable.


National 17.5%, California 22% Global Food Crisis Forecast As Prices Reach Record Highs




Federal Reserve Asset Buying May Reach $2 Trillion, Goldman's Hatzius Says 


The Monetization of Lumber


Greece reignites Europe debt woes

William Black Tears Larry Summers Apart, Again Calls Out Obama To Place Bank Of America In Receivership

 

Exclusive: 4 Dealers Respond With "$1+ Trillion" To Fed Reverse Inquiry Into How Much QE2 Is Necessary

 

Guest Post: Currency Wars: Debase, Default, Deny!

Silver to $30 in 18 days, Turk tells King World News

 

Charles W. Kadlec: Gold vs. the Fed -- the record is clear

 

Gold Continues to Outshine the Field



Crooks Stealing Consumable Goods: Beer & Food A sign of things to come..."A crime alert in Chesterfield [Virginia], where robbers want your food and beer -- and will use violence to get them. Right now police are handling 16 investigations in which crooks snatched edible goods from homes, cars and people on the street."




California Is Broke: 19 Reasons Why It May Be A Good Time To Leave "The unemployed in California is equivalent to the populations of Nevada, New Hampshire, and Vermont."

 

In The News Today

Posted: Oct 28 2010     By: Jim Sinclair      Post Edited: October 28, 2010 at 3:18 pm
Filed under: In The News
Dear CIGAs,
This illustration was done by our own CIGA Eric. Please note where the Federal Statisticians are.




Jim Sinclair’s Commentary
Will he continue with QE? Will he not continue with QE? How much QE will he do?
The answer is simple, he will do QE. Whatever amount is announced, he will do more. In fact he will do whatever is required to attempt to paper over the fraud in the OTC derivative securitized mortgage debt market. He will do whatever is required in his mind to paper over the awful condition of the FASB massaged phony asset values carried by the financial industry.
It matters little what he does or says on any single day because QE is going to infinity.
Yesterday the crazy market had the opinion that QE was not going to happen at all. Today it is on again.



Dollar falls as Fed credibility questioned By Peter Garnham
Published: October 28 2010 11:24 | Last updated: October 28 2010 11:24
The dollar lost ground on Thursday as the recent rally in the currency faltered.
The dollar has performed strongly over the past week as investors have covered short positions in the currency, on speculation that the Federal Reserve would take a less aggressive approach to quantitative easing than previously anticipated in its policy meeting next week.
But the dollar fell on Thursday as news that the Fed had sent out a survey asking primary Treasury dealers of their expectations of the size and impact of further asset purchases.
Maurice Pomery at Strategic Alpha said the credibility of the Fed might come into question as the news suggested the central bank had no idea of how much, or how, to throw additional quantitative easing into the market.
“The faith in the dollar is likely to be tested and the credibility of the Fed may be as well,” he said. “Holding US assets might just become as fashionable as kipper ties and large collared shirts.”
The dollar fell 0.5 per cent to $1.3836 against the euro, lost 0.4 per cent to $1.5841 against the pound and was 0.5 per cent weaker at $0.9857 against the Swiss franc.
More…




Jim Sinclair’s Commentary
The blatant lies will never end in this most degraded financial group that has ever existed in human history.


Jim Sinclair’s Commentary
Here is a very interesting interview that I suggest you review.
Click here to watch the interview…



Jim Sinclair’s Commentary
Gold rallies and the dollar falls because he used the QE words.
What a crock. QE to Infinity will come, serialized, but it will come.

NY Fed solicits QE2 opinions. The New York Federal Reserve has asked bond dealers and investors for their projections of how large the central bank’s asset purchases will be over the next six months, with the options to choose from listed as zero, $250B, $500B and $1T. The survey also asks respondents how those purchases are likely to affect yields, how often they anticipate the Fed will re-evaluate the program and what its ultimate size would be. Fed officials are trying to get a better handle on market expectations for a second round of quantitative easing, which investors believe will be announced next week.

A Paralyzed Fed Defers Decision On Monetary Policy To Primary Dealers In An Act That Can Only Be Classified As Treason

 

Goldman: "The Dollar Needs To Fall A Lot Further From Here"

 

Guest Post: The Tipping Point has Arrived

 

Hourly Action In Gold From Trader Dan

Posted: Oct 28 2010     By: Dan Norcini      Post Edited: October 28, 2010 at 1:57 pm
Filed under: Trader Dan Norcini

Dear CIGAs,
If yesterday was “the Fed is going to take our expected punch bowl away from us” day, today was, “the Fed is going to not only bring the punch bowl, but spike it with white lightning”. Word from a Bloomberg story that the Fed is consulting with the primary dealers was enough to dispel the doubts from yesterday. “She loves me; she loves me not; she loves me; she loves me not”. And thus the waiting game goes on….
Seriously, the markets are moving back and forth based on the changing expectations and psyche of the speculative trading community. Expect this to continue until we get more definitive amounts when the FOMC makes it announcement next week. The phrase of this week, and until then, is “range trade”.
Gold bounced from $1320 on the bottom of the range and is running towards $1,350 at the top of the range. To repeat myself ad infinitum, ad nauseum, a break out of this range on decent volume that closes either above $1,350 or below $1,320 on two consecutive trading days, will give us the direction of the next trend. The reason – The Dollar will either rise or fall depending on that announcement next week. Make no mistake – QE is coming. The only question is the amount and the timing.
The Dollar was of course beaten with an ugly stick today as the giddiness surrounding the Bloomberg story motivated Forex traders to unload on it. That it has fallen so sharply is evidence of the dangers inherent in the Fed’s policy. As I said yesterday, the Fed can either save the Dollar or the stock market; they cannot do both.
The HUI bounced off the bottom of its range, following the metals, and moved back towards 520. Until it takes that out and follows through, it will be trapped in a consolidation mode.
Wheat is slowly grinding higher on dryness fears in the winter wheat growing areas here in the US. The entire grain complex continues to experience supply concerns which is working to push food prices inexorably higher, notwithstanding the load of BS being dished out by the official government agencies that tell us food inflation is tame. I guess they think that we are too damn dumb to believe our own eyes. Corn is slowly closing in on the $6.00 mark while wheat is back above $7.00. Soybeans are over $12.
If that were not enough, Sugar is now up near $0.30 pound, an incredible price. Coffee, while weaker today, is at levels last seen in September 1997! Nope – no rising food costs anywhere in sight….
Once again the saving grace for the beleaguered consumer is the energy sector, especially natural gas, which is mired in an oversupply glut that has kept it subdued for some time now. Crude oil also cannot seem to get much going as it struggles with the region near $83 – $84. Until it can push past there, consumers will be able to enjoy relatively cheaper energy costs even as they dig deeper into their wallets for grocery money.
Bonds remain rather lackluster. They are however perched rather precariously above an important chart support level near 129 ^10. If they are going to bounce and move back within the rather broad range they have carved out over the last two months, they had better do so quickly or we could see them drop towards 126. At some point the multi decade bull market in bonds is going to come to a rather inglorious end but I am not ready to make that call just yet; not with the probability of massive Fed buying of Treasuries waiting in the wings. At least they are buying them because if the Dollar drops through 77 and especially 76, no one else is going to want them.
Until we get past next week’s FOMC announcement and the upcoming election, there really isn’t a whole lot more worth saying.
Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini

This time it will be Hyperinflation...

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Oil Could Hit $100 Barrel Soon, Says JPMorgan



Coffee at 13-Year High, Sugar Surges 



Rising Cost of Kimchi Alarms Koreans



Global food crisis forecast as prices reach record highs

Hyperinflation is certain, John Embry tells King World News   Imminent Big Bank Death Spiral By: Jim Willie CB Soc Gen's Albert Edwards: The US Public is About to Revolt

In 15 of Last 25 Months, The Treasury Needed to Borrow Money for Social Security Benefits


Pension Age Increases to Get Far Worse

Of Course He Will

Posted: Oct 27 2010     By: Jim Sinclair      Post Edited: October 27, 2010 at 11:20 pm
Filed under: General Editorial

Dear CIGAs,
How can anyone be so silly as to be riveted on "Will he QE" next week? Of course he will QE to infinity. The date he announced however does not mean a damn thing.
To throw away good gold anything on the madness of the trading crowd and algorithms is just plain STUPID.
Gold is going to $1650 and likely a great deal more. Don’t join the Lemming Society.
The scary actual U.S. government debt NEIL REYNOLDS
Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 per cent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. “Let’s get real,” Prof. Kotlikoff says. “The U.S. is banrupt.”
Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the U.S. is in terrible fiscal trouble – far worse than the Washington-based lender of last resort has previously acknowledged. “The U.S. fiscal gap is huge,” the IMF asserted in a June report. “Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 per cent of U.S. GDP.”
This sum is equal to all current U.S. federal taxes combined. The consequences of the IMF’s fiscal fix, a doubling of federal taxes in perpetuity, would be appalling – and possibly worse than appalling.
Prof. Kotlikoff says: “The IMF is saying that, to close this fiscal gap [by taxation], would require an immediate and permanent doubling of our personal income taxes, our corporate taxes and all other federal taxes.
“America’s fiscal gap is enormous – so massive that closing it appears impossible without immediate and radical reforms to its health care, tax and Social Security systems – as well as military and other discretionary spending cuts.”
He cites earlier calculations by the Congressional Budget Office (CBO) that concluded that the United States would need to increase tax revenue by 12 percentage points of GDP to bring revenue into line with spending commitments. But the CBO calculations assumed that the growth of government programs (including Medicare) would be cut by one-third in the short term and by two-thirds in the long term. This assumption, Prof. Kotlikoff notes, is politically implausible – if not politically impossible.
One way or another, the fiscal gap must be closed. If not, the country’s spending will forever exceed its revenue growth, and no one’s real debt can increase faster than his real income forever.
Prof. Kotlikoff uses “fiscal gap,” not the accumulation of deficits, to define public debt. The fiscal gap is the difference between a government’s projected revenue (expressed in today’s dollar value) and its projected spending (also expressed in today’s dollar value). By this measure, the United States is in worse shape than Greece.
Prof. Kotlikoff is a noted economist. He is a research associate at the U.S. National Bureau of Economic Research. He is a former senior economist with then-president Ronald Reagan’s Council of Economic Advisers. He has served as a consultant with governments around the world. He is the author (or co-author) of 14 books: Jimmy Stewart Is Dead (2010), his most recent book, explains his recommendations for reform.
More…

The Six Trillion Dollar Problem

Posted: Oct 27 2010     By: Greg Hunter      Post Edited: October 27, 2010 at 5:28 pm
Filed under: Greg Hunter, USAWatchdog.com
Courtesy of Greg Hunter’s USAWatchdog.com

Dear CIGAs,
When I was an investigative reporter at the networks, the first question we would ask when trying to decide if we wanted to do a story was: How many?  How many people have been hurt by a defective product?  How many defective products of a certain kind were in use? How many dollars will it take to fix the problem?  In the case of the recent mortgage crisis – “Foreclosuregate,” the question of how many has been answered.It has been widely reported that there are a little more than 60 million home mortgages in the Mortgage Electronic Registry System (MERS).  If every one of the 60 million mortgages are worth $100,000, that would mean a total of at least $6 trillion in home mortgages that are electronically filed.  In MERS, there is no physical written record of a “Promissory Note.”  In almost all states, you need that original “Note” to prove ownership of a home.  That means in almost every single state, the banks cannot legally foreclose on your home without this document.  Some say the loan documents were lost on purpose because the bankers did not want their massive fraud to see the light of day.  Whether or not the “Notes” were lost on purpose or accident, the fact is the original “Notes” are nowhere to be found.  That is what the “Robo Signing” part of the story is all about.  It has been widely reported that “foreclosure mills” were creating massive amounts of counterfeit Promissory Notes so banks could legally foreclose on homeowners.
In the post I did earlier this week called “The Perfect No-Prosecution Crime,” I laid out several layers of fraud and white collar crime of mortgage and foreclosure fraud.  The lack of the Promissory Note is the biggest of all the problems in this chain of chicanery.  Here’s why.  A Promissory Note is a financial instrument.  It is in the same family as a Federal Reserve Note.  For example, if you copied a $100 bill and then tried to spend that copy in a store, because you lost the original, is it still money?–Of course not. You need the original financial instrument (in this case, $100 Federal Reserve Note) to make a legal transaction in a store.  The same is true for a Promissory Note. You need the original Promissory Note to legally complete a foreclosure.  A counterfeit, or copy, of a Promissory Note is not a financial instrument, just like a counterfeit or copy of a $100 bill is not a financial instrument!
Can you see how big this problem really is for the banks?  This is $6 trillion in real estate that fat cat bankers cannot legally prove they own. Likewise, that means trillions of mortgage-backed securities HAVE NO BACKING.   I think this is the biggest financial fraud in history.  This was not an accident made by someone pressing the wrong button or a few documents that weren’t handled properly, but fraud on a massive scale that took years and tens of thousands of people to pull off.  Ironically, this is all playing out against a backdrop of outrageous Wall Street pay.  This year the big banks are going to pay a record $144 billion!  (Click here for more on that story.)
One of my regular readers thinks Congress can simply pass a law and make all the crimes retroactively legal.  To that I said, “So Congress is going to change hundreds of years of real estate document law in each and every state? Along with IRS tax laws broken, trust laws broken, security laws broken and on top of that, make crimes retroactively not crimes anymore? That’s a lot even for Congress. I think the path of least resistance is more likely printing money to paper over the problem. . . . I hope you are wrong on Congress because if they do change all of these laws to comfort the criminal banksters, we might as well change the name of the country to the United States of Crime.”
More…

 Portugal Budget Discussions Break Down, Government Collapse Imminent

Gene Arensberg: Silver is strong mainly because it's remonetizing

Treasury Shields Citigroup as Deletions Undercut Disclosure




Dollar at Risk of Becoming 'Toxic Waste': Charts



99 Weeks: When Unemployment Benefits Run Out

Is There Life After Sudden Death?*

Hourly Action In Gold From Trader Dan

Posted: Oct 27 2010     By: Dan Norcini      Post Edited: October 27, 2010 at 1:44 pm
Filed under: Trader Dan Norcini
Dear CIGAs,
Today was all about trader trepidation over the size of next week’s expected QE announcement to the extent of future purchases by the Fed. There was a growing fear among a certain segment of the trading community that the Fed was going to disappoint with the amount. That led to a rush out of commodities in general and brought selling into both gold and silver. Equities were also knocked lower in a foretaste of what is going to happen if the Fed does indeed fail to meet the hyped up expectations that they themselves initially created. We now see some of the FOMC members attempting to somewhat tamp down expectations without pulling the punch bowl away completely. In other words, they are trying to walk a very fine line as criticism mounts over the policy that they have embarked upon.
You could see the same effect in the bond market as those were down on the exact sentiment. Traders there are looking over the huge supply and are wondering who is going to buy them if not the Fed.
Gold did run down to the lower portion of the recent trading range and bounced from near the $1,320 level. If that fails to hold, it will more than likely drift down towards $1,300 where I would expect powerful buying to surface. As previously stated, gold could drop as low as $1,280 and it would do nothing to hurt the powerful uptrend on the charts.
Silver ran past the top of its range near $24 in overnight trading but then puked when it came into New York and moved lower. It still looks to me like it wants to consolidate in this general region for the time being.
Next week is going to bring one helluva ride in these markets so hold on to your hats. For example – copper put in an outside reversal day after making a new yearly high and then promptly selling off. Cotton, after running limit up for 3 out of the last 5 sessions, is now limit down. Volatility is going to go through the roof as traders place their bets. Some are going to win big and others are going to lose big. The result is going to be a significant increase in activity in the already extremely jumpy markets. If you are a trader, my advice is to be careful. You might want to lighten up a bit. What you are doing is surrendering a bit of potential profits in order to sleep well at night and not become a splot on the pavement of the market roads.
The HUI dropped back down below 500 once again as it too works a range between 490 on the bottom and 510 or so on the top. A breach of 490 on two consecutive trading days would not be welcomed by the bulls. Some of the shorter term technical indicators are down in the oversold zone for the HUI so that might serve to keep the bears from getting too aggressive ahead of the FOMC meeting next week. We will just have to see who blinks first.
The Dollar is currently the beneficiary of the above mentioned fears regarding the size of the QE. The Fed either saves the Dollar or saves the stock market. They cannot have it both ways.
Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini

Final Thought For The Day

Posted: Oct 26 2010     By: Jim Sinclair      Post Edited: October 26, 2010 at 10:48 pm
Filed under: General Editorial
Dear CIGAs,
Right now an exhausted group of manic speculators in all markets are tied to the question of "Will he or will he not QE on November 3rd."
The recent small upticks in international economic statistics is not a sign of economies turning strong for GB or the US. They are the normal play of government statistics.
Britain is not on the threshold of a turn towards the better. In fact it is the absolute opposite that GB will experience in the next 12 months.
Regardless of what comes on November 3rd, the only choice the Fed has is QE to infinity. This won’t be because it is good, but because all else is not.
November 3rd is only relevant date to the mad short term gambleholics. QE to infinity is what is coming and November 3rd is meaningless to that. Whether it comes November 3rd, December 3rd, January 3rd or any other date, QE to infinity is coming.
All the new converts to austerity in the Western World are going to do a 180 degree turn as their economies crater and their populations swear to vote every politician out of office no matter what party they are.
Good night,
Jim

Marc Faber Expects Market Sell Off On QE2 Announcement

 

The Fed Wants to Unleash a BIG QE 2 Program… But CAN It?


Project Weimar: Why QE2 Could be More Inflationary Than You Think

 

China Retaliates Again, Accuses US Of "Out Of Control" Dollar Printing

In The News Today

Posted: Oct 26 2010     By: Jim Sinclair      Post Edited: October 26, 2010 at 4:26 pm
Filed under: In The News


Jim Sinclair’s Commentary
This certainly sounds good. Let see if it is for real as the only people with rights over the past many years have been the Banksters.
An honest man in an amoral world?

CFTC’s Chilton raises alarm about silver market WASHINGTON | Tue Oct 26, 2010 9:30am EDT
WASHINGTON Oct 26 (Reuters) – There have been repeated attempts to influence prices in silver markets, Bart Chilton, a commissioner at the U.S. futures regulator, said on Tuesday.
"There have been fraudulent efforts to persuade and deviously control that price," Chilton said in prepared remarks before a Commodity Futures Trading Commission meeting.
Chilton said he could not pre-judge the outcome of the CFTC’s ongoing investigation of the silver markets, but said public deserves some answers to their concerns.
More…



CFTC Takes Aim at "Runaway Robotic Trades": Chilton By Christopher Doering
October 25, 2010
WASHINGTON (Reuters) – Computer-generated algorithmic trades have run amok in markets more than once this year, and U.S. regulators should look for ways to hold traders accountable, a top official on the Commodity Futures Trading Commission said on Monday.
Bart Chilton, a commissioner with the futures regulator, said "mini-flash crashes occur all too often" following a surge in high-frequency trading.
Securities and futures regulators have been trying to determine ways to prevent another event like the May 6 "flash crash" when markets temporarily plunged. The CFTC on Tuesday will unveil new draft rules to clamp down on disruptive trading practices.
"They don’t cause as much of a disruption as that of May 6, but more than once this year, runaway algos have disrupted markets. By that I mean, cost people money," Chilton said in prepared remarks for an energy conference in Las Vegas.
"We should explore ways to hold those who set off runaway robotic trades accountable," he said.
More…




Jim Sinclair’s Commentary
Be sure to check out this video on the truth about unemployment...
http://www.cbsnews.com/video/watch/?id=6987699n


Jim Sinclair’s Commentary
A bet on inflation, or on the government statistics of inflation?

TIPS dip into negative territory. For the first time ever, inflation-protected Treasury bonds sold with a negative yield. Investors bought $10B of five-year TIPS yesterday with a yield of negative 0.55%, in a bet that the Fed will be successful in stimulating the economy, boosting inflation and making the TIPS more valuable. If the investors turn out to be wrong and inflation doesn’t appear as they expect, they could end up paying to lend money to the government.



Jim Sinclair’s Commentary
This says it well concerning the Forex market.

WORLD FOREX: Dollar Rises; GDP Boosts Sterling By Nicholas Hastings
Of DOW JONES NEWSWIRES
Fresh warnings from Japanese officials about the strength of the yen helped to push the dollar higher in European trade. However, the U.S. currency’s gains continued to be limited by the debate over just how much more quantitative easing the Federal Reserve will need to introduce early next month
More…

Jim’s Mailbox

Posted: Oct 26 2010     By: Jim Sinclair      Post Edited: October 26, 2010 at 4:14 pm
Filed under: Jim's Mailbox
Jim and Dan,
Here’s today’s update:

CIGA Stefaan

Home prices fell in August, near lows: S&P CIGA Eric
Sluggish to falling home prices are not keeping pace with the rate of currency devaluation. This underperformance is illustrated by a declining median home price to gold ratio. The chart reveals that the bounce within the steps is not only weakening but also shortening as the price of gold accelerates.
U.S. Median Home Price (MHP) to Gold:
Falling constant currency or “real” home prices means homebuilders struggle to remain profitable.
S&P Homebuilders (HB) to Gold Ratio:
Prices of single-family homes fell in August, hovering around recent lows after the expiration of popular homebuyer tax credits, according a Standard & Poor’s/Case-Shiller home price report on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.3 percent in August from July on a seasonally adjusted basis, as expected in a Reuters poll. The dip followed a 0.6 percent July gain.
Source: finance.yahoo.com
More…




TIPS Yield Goes Negative for First Time CIGA Eric
The threat has never been deflation. Yet, that’s what they’ll continue to spin, thus, many will believe. Those that suggest that 2000-present represents a comparison to 1929-1954 ignore the key difference in the U.S. dollar between the two periods. Roosevelt, desiring inflation through currency devaluation, had to confiscate gold as it was directly tied to the dollar. Once gold was confiscated (at $20/oz), it was promptly revalued at $35/oz by executive order.
Check you pockets once. Do you find any $20 gold pieces? Any Federal Reserve notes convertible to gold?
The U.S. dollar has no anchor and can be devalued at will. On going default through inflation is the real threat.
The up turn in the TIPS to nominal long bonds reflects another reacceleration of inflation. It’s not the magnitude of the ratio but rather than direction and acceleration that matters to capital.
TIPS to Nominal Bond Ratio:
In its bid to fight deflation, the Federal Reserve seems to be gaining some traction.
On Monday, investors snapped up government securities designed to protect against inflation, generating so much demand that the Treasury was able to sell them with a negative yield, the first time that has happened.
Source: online.wsj.com
More…




The Fiscal Disaster Set to Explode in December CIGA Eric
Expect the moratorium on interest payments to be extended beyond December. The budgetary strains of the States have been and continue to be transferred to the Federal level. This transfer is increasingly supported by currency devaluation – better known as quantitative easing.
US Federal Budget (Surplus or Deficit As A % of GDP, 12 Month Moving Average) and Gold London P.M. Fixed:
As businesses lay off workers, fewer payroll tax dollars go into each state’s unemployment insurance
Since March of 2009, 31 states have borrowed billions from the federal government to continue paying out unemployment benefits while keeping their UI trust funds from insolvency. The federal stimulus provided for a moratorium on interest payments until December, 2010. And, as you likely know, that’s a month from now.
Source: minyanville.com
More…

Hourly Action In Gold From Trader Dan

Posted: Oct 26 2010     By: Dan Norcini      Post Edited: October 26, 2010 at 2:05 pm
Filed under: Trader Dan Norcini
Dear CIGAs,
The silver market was abuzz with news today about CFTC Commissioner, Bart Chilton, concerns over price manipulation. The fact that he has come out so publicly took many, outside the camp of GATA and others, by surprise and lit a fire under that market which took it up into a resistance area near $24 on the charts. Strength in silver then worked to pull up gold which had been under pressure from the falling Euro and the subsequent bounce towards 78 in the Dollar.
You have to wonder about the many who have insulted GATA and its fine work over the years and ridiculed them in such a derogatory fashion whether they will now have the common decency to apologize for their shameless and contemptuous treatment of my friends Bill Murphy and Chris Powell and all the other dedicated members of the GATA board. The fact that Commissioner Chilton has come out so forcefully and chosen to use the words, “fraudulent” and “devious” in regards to the silver market is remarkable for its clarity and frankness. He was careful not to come to a conclusion about actual manipulation but as he pointed out, attempted manipulation is an entirely different matter. Based on his own words, it is evident that he strongly believes that attempted manipulation has been occurring regularly.
From here on, those who refer to GATA and its supporters as “the tin foil hat” crowd are only making fools out of themselves and revealing themselves to be mere hacks of the bullion bank crowd. GATA can no longer be dismissed as some sort of rogue band of disgruntled “gold bugs” but as the fine group of people that they are; people who share a genuine concern for the integrity of our financial markets and whose tireless research and efforts on the part of the precious metals markets deserves to be given the respect that is due to any organization which has produced work of the nature and quality that GATA has. I am not holding my breath however; very few are able to conquer their own pride and remain slaves to it all their lives. It takes a man of real character to admit he was wrong. Generally speaking, the most vocal opponents of GATA seem lacking in this department.
Hats off also to Commissioner Chilton for having the integrity to follow through on this even in the face of what no doubt must have been some very strong opposition. It is refreshing to see a man who actually takes what he does seriously and is working in the interests of the general public and not just a few favored special interests. If you have not done so, please take the time to send him an email encouraging him and thanking him for his efforts. So often men in his position only get emails or letters haranguing them.
Back to gold – it has reinforced its range trade after failing to take out $1,350 on the topside and moving lower back within its box that is defined by $1320 on the bottom and $1350 on the top. I still think it will work this range ahead of the next FOMC meeting in early November barring any drastic moves in the Dollar. Silver, even though it responded nicely to the Chilton news, has yet to break above $24 on the topside, which is the level it needs to best to give it a shot at $25 once again.
The HUI is up but below the strong chart level of 520 that needs to be vanquished before it can mount another assault on its recent peak. As long as it holds 490 on the downside it should be okay and continue consolidating.
The Dollar is also working in a range between 78 on the top and 77 on the bottom. The longer these markets range trade ahead of the FOMC, the more significance that meeting and what comes out of it is going to be.
There is some pressure in the bond market over the amount of supply coming. Until bond traders see the extent of any QE announcement, they are going to be bit worried whether demand will be sufficient to absorb it all.
We are all basically reduced to sitting around waiting for the Fed to act. A week is going to seem like an eternity.
Oh by the way, I have enjoyed the comments on my comments about the cotton market. For those of you are might be interested, they increased the limit to 600 points for today’s trading. It is up over 500 as I write this. The madness will continue until it just stops and then that will be that. That market is looking like a huge disaster just waiting to happen.
Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini