International Forecaster October 2010 (#1) - Gold, Silver, Economy + More
By: Bob Chapman, The International Forecaster


In Gold We Trust - The Fed Can’t Print It
By: Przemyslaw Radomski





Buying Gold Before the “Blow Off Phase”

 

Redefining The "Art Of The (Im)Possible" As The Last Gasp Of A Failed Politico-Economic Regime

 

Are Or Aren't France And China Plotting An Alternative To The Dollar?

 

On Tomorrow's Secret Meeting To Plot The End Of High Frequency Trading

 

Palladium Explodes to the Upside

In The News Today

Posted: Oct 03 2010     By: Jim Sinclair      Post Edited: October 3, 2010 at 11:18 am
Filed under: In The News
Jim Sinclair`s Commentary
Clearly anything is possible, but let’s take this one step at a time. $1650 will come first, more later.
Clearly this article in China will have an effect.

$10,000 Gold? By Kenneth Rogoff (chinadaily.com.cn)
Updated: 2010-10-02 10:59
SAN FRANCISCO – It has never been easy to have a rational conversation about the value of gold. Lately, with gold prices up more than 300% over the last decade, it is harder than ever. Just last December, fellow economists Martin Feldstein and Nouriel Roubini each penned op-eds bravely questioning bullish market sentiment, sensibly pointing out gold’s risks.
Wouldn’t you know it? Since their articles appeared, the price of gold has moved up still further. Gold prices even hit a record-high $1,300 recently. Last December, many gold bugs were arguing that the price was inevitably headed for $2,000. Now, emboldened by continuing appreciation, some are suggesting that gold could be headed even higher than that.
One successful gold investor recently explained to me that stock prices languished for a more than a decade before the Dow Jones index crossed the 1,000 mark in the early 1980’s. Since then, the index has climbed above 10,000. Now that gold has crossed the magic $1,000 barrier, why can’t it increase ten-fold, too?
Admittedly, getting to a much higher price for gold is not quite the leap of imagination that it seems. After adjusting for inflation, today’s price is nowhere near the all-time high of January 1980. Back then, gold hit $850, or well over $2,000 in today’s dollars. But January 1980 was arguably a “freak peak” during a period of heightened geo-political instability. At $1,300, today’s price is probably more than double very long-term, inflation-adjusted, average gold prices. So what could justify another huge increase in gold prices from here?
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Jim Sinclair`s Commentary
This assumes $1650 is in the bag.

How to Bet Like John Paulson
Hedge fund tycoon John Paulson is the man who made his name, and a fortune, betting against subprime mortgages when no one else even knew what they were.
And he’s just made three big financial calls that you need to know about.
Speaking to the University Club in New York, he said, first, that gold could go to $2,400 an ounce based on the fundamentals–and that momentum could carry it to $4,000 an ounce. Right now it’s around $1,300. Second, he said you should get out of bonds while you can: You’re much better off investing in blue chip stocks with good dividend yields than bonds.
And third, he said you should buy a home. Now.
"If you don’t own a home, buy one," he reportedly said. "If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home."
(A spokesman for Mr. Paulson did not challenge the accounts of the meeting.)
Among the New York commentariat there’s been a lot of head-scratching about Mr. Paulson’s take–especially this contrarian stance on housing.
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Jim Sinclair`s Commentary
Slowly but surely this path leads to securitized debt and a disaster for the banksters in paperwork screw ups. How many mortgages repeat themselves in securitized debt?

JP Morgan Must Show Foreclosures Are Legal, Brown Says October 01, 2010, 3:47 PM EDT
By Joel Rosenblatt
(Updates with Brown’s statement in fourth paragraph.)
Oct. 1 (Bloomberg) — JPMorgan Chase & Co., the third- biggest U.S. mortgage servicer, must prove its home foreclosures are legal, and if it can’t, must stop the practice, California Attorney General Jerry Brown said.
JPMorgan is asking courts to delay judgments in pending foreclosure cases while the bank reviews and possibly resubmits statements. JPMorgan said this week it is re-examining foreclosure filings after learning employees may have signed affidavits without personally reviewing underlying records, relying instead on other personnel.
Brown made a similar demand on Sept. 24 of Ally Financial Inc.’s GMAC Mortgage unit, which is being investigated by attorneys general in Texas, Iowa and Illinois after the lender said it would halt some evictions following a discovery of faulty documentation.
“JP Morgan Chase, like GMAC’s Ally Financial, has admitted that its review of key foreclosure documents was a ruse,” Brown said today in an e-mailed statement.
JPMorgan can’t record defaults on mortgages made from Jan. 1, 2003, to Dec. 31, 2007, unless, with “limited exceptions,” the lender had tried to determine whether the borrower is eligible for a loan modification, according to Brown.
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Jim Sinclair`s Commentary
QE to infinity.

NY Fed’s Dudley: More action likely warranted By Steve Goldstein
Oct. 1, 2010, 8:43 a.m. EDT
WASHINGTON (MarketWatch) — Putting himself firmly in the pro-quantitative easing camp, New York Fed President William Dudley said Friday that "further action is likely to be warranted" as current levels of unemployment and inflation are "unacceptable." He estimated that $500 billion of purchases of government bonds would provide about as much stimulus as a reduction in the federal funds rate of between half a point and three quarters of a point. He also suggested being "more explicit" on the inflation rate the committee views as compatible with price stability by stating an explicit target.
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Jim Sinclair`s Commentary
Confidence killers are building daily.

California to enter fourth month without budget By Jim ChristiePosted 2010/10/01 at 12:30 am EDT
SACRAMENTO, California, Oct. 1, 2010 (Reuters) — California will enter the fourth month of its fiscal year on Friday without a state budget in place after Governor Arnold Schwarzenegger and top lawmakers failed to agree on Thursday on a spending plan.
A spokesman for the governor told reporters in the state capital of Sacramento that Schwarzenegger and top lawmakers did not reach a budget agreement after meeting throughout Thursday but that they were inching toward a deal.
"Every day they meet they get closer," spokesman Aaron McLear said Thursday night, adding that budget talks would resume Friday.
The state government of the most populous U.S. state is in the midst a record stalemate pitting Schwarzenegger and fellow Republicans in the legislature’s minority against Democrats who control the body over a spending plan to balance the state’s books. Thursday marked the 92nd day of the impasse.
California’s leaders must close a $19.1 billion shortfall caused by weak revenue, the result of a state economy battered in recent years by recession, double-digit unemployment and housing, mortgage industry and financial market turmoil.
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Meredith Whitney Says U.S. May Face Bailout for States: Video CIGA Eric
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 flowing everywhere. It’s no surprise that the dollar has rolled over again.
Whitney, speaking with Betty Liu on Bloomberg Television’s “In the Loop,” says the U.S. government may face a bailout for states over the next 12 months.
Source: bloomberg.com
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Jim Sinclair`s Commentary
The real why of this is camouflaged y lax procedures. The real situation is a disaster in back office paperwork brought on by the extreme pressure of wild activity in manufacturing trillions of dollar in nominal value OTC derivatives.

Bank of America delays foreclosures in 23 states CIGA Eric
Bank of America is delaying foreclosures in 23 states as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents.

Hi Eric:
Question as to your opinion on the fall out of foreclosure suspension due to faulty paperwork. Will this ultimately lead to reduced mortgage amounts to borrowers and what will happen to the secured bonds issued by Wall Street in which these properties were collateral? Will this ramp up bank failures?
Question #2 is somewhat related. If widespread bank failures increase where would you feel we should keep our cash for daily living transactions such as groceries and doctor visits. I know you don’t make recommendations but could you give us some options?
Thanks,
Daniel


Daniel,
Securitization of mortgages allowed risk and reward to be sliced and diced into packages to the global investment community. This opened the door to the "breathe on a mirror" application process. That is, anyone able to breathe on a mirror was able to secure a loan. Faulty paperwork was inherent byproduct of this greed-driven process. When the musical of the credit game of musical chairs finally stopped in 2008, the faulty paper, began seeping to the surface through the legal process.
What does it mean? It means quantitative easing part 1 and 2 to infinity, possibly in the form of government sponsored or supported mortgages through the now defunct GSEs – Fannie Mae and Freddie Mac. Why? The problem is simply too large and corrupted to permit a through examination as far as the US dollar is concerned.
Any ‘official solution’ will be designed to allow an acceptable and manageable bank failure rate. A similar rate we see today.
Smart investors know that quantitative easing (part 1 and 2) to infinity means global currency devaluation. Those seeking to maintain purchasing power during periods of aggressive currency devaluation seek refuge in gold and silver. The faster confidence deteriorates, the stronger the push for a new currency. History clearly suggests that gold (and lesser degree silver) have always filled the void during transitions.
RY,Eric
Source: news.yahoo.com
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