A rising stock market and rising gold price is a product of currency induced cost push inflation.
If you have eyes to see, the future is hiding in plain sight.

Nice Try But No Cigar!

Posted: Oct 18 2010     By: Jim Sinclair      Post Edited: October 18, 2010 at 3:45 pm
Filed under: General Editorial

Dear CIGAs,
A rising stock market and rising gold price is a product of currency induced cost push inflation.
If you have eyes to see the future is hiding in plain sight.
Click image to open Martin Armstrong’s latest in PDF format

In The News Today

Posted: Oct 18 2010     By: Jim Sinclair      Post Edited: October 18, 2010 at 3:42 pm
Filed under: In The News

Jim Sinclair’s Commentary
I wrote a book on this subject years ago, available here at Amazon.com.

China to remain top rare earth metals producer: Silmet By Michael Taylor
LONDON | Mon Oct 18, 2010 11:28am EDT
LONDON (Reuters) – China looks set to remain the leading producer of rare earth metals for years to come, with prices to double next year, top European producer AS Silmet of Estonia said on Monday.
China is the world’s biggest producer of rare earth metals, vital for the auto and electronics industries.
But concerns over global supplies have increased in recent months, after tensions rose between China and top consumer Japan, over imports.
"There are more than 200 rare earth projects outside of China," David O’Brock, chief executive at the privately-owned AS Silmet told Reuters. "There are a lot of very optimistic projects out there — which may never be realized.
"If the Chinese leave the quotas at what they are today, I would guarantee that prices will at least double for next year."
China accounts for more than 90 percent of the world’s total production of rare earth, mining around 120,000 tonnes in 2008.
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Jim Sinclair’s Commentary
The word "unexpected" is MOPE. Subjectively, what is unexpected is an aberration. Therefore of course this is short term and the opposite must reinstate itself.
See how they play with the market’s head?

Production in U.S. Unexpectedly Falls for First Time in a Year By Courtney Schlisserman and Bob Willis – Oct 18, 2010 8:53 AM PT
Production in the U.S. unexpectedly dropped in September for the first time in more than a year, evidence of the slowdown in growth that is concerning some Federal Reserve policy makers.
Output at factories, mines and utilities fell 0.2 percent, the first decline since the recession ended in June 2009, according to figures from the Fed today. Another report showed builders were less pessimistic than projected this month.
Slackening production means it will take longer for the economy to make a dent in the excess capacity that is containing prices and prompting Fed Chairman Ben S. Bernanke to consider additional monetary stimulus. Improving demand from overseas and gains in business investment indicate orders at manufacturers like Alcoa Inc. will not weaken much more.
“It’s just not the kind of pace we need to create jobs and make inroads into reducing unused capacity and reduce unemployment,” said John Ryding, chief economist at RDQ Economics LLC in New York. “It is encouraging to see a little more optimism on the housing side, which might mean the sector is starting to stabilize.”
Confidence among U.S. homebuilders rose in October to the highest level in four months, a sign residential construction is steadying near record lows, a report from the National Association of Home Builders/Wells Fargo also showed today.
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Jim Sinclair’s Commentary
Why it could be? It simply is!

Why Gold Could Be the Safest Investment Out There
A look at the past 177 years of the gold price reveals that unexpected write-offs are non-events—gold could be the safest investment out there.
Investing into anything is usually preceded by the thought: what is there to win and what is there to lose? There has been a lot of discussion about the upsides of the gold rally. But little if nothing has been said about the potential losses. Clearly, many people are wary of investing in gold because they fear that the gold price could suddenly crash.
Gold has so far attracted only $5.4 billion worth of private investment in 2010. At the same time, investors poured $22 billion into emerging market mutual funds and $155 billion into bonds. While some commentators have labeled gold a bubble, these numbers show the exact opposite. Being a tiny fraction of the bond market’s value, gold remains a niche investment. The fear of the unknown holds savers away from gold, and the media hype is not helping.
Most people perceive gold as speculative, whereas cash (CDs), bonds, real estate and managed investment plans are considered to be safe, conservative investments. But how likely is a sudden crash of the gold price? If history is any guide, it’s not likely at all. In fact, gold has less surprises for you than any of the assets mentioned above. If you are a conservative investor, you must have a closer look at gold.
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Jim Sinclair’s Commentary
There simply is no choice. QE to infinity must occur. The downside is beyond your wildest dream of a crash if it does not occur and FAST.
QE is not correct, but the effect immediately of not applying this is akin to a celestial supernova turning the economy of the West into a collapsed star so heavy it will never rise again.

Federal Reserve urged to act on economy By Robin Harding in Washington
Published: October 17 2010 22:37 | Last updated: October 17 2010 22:37
A senior member of the Federal Reserve has warned that the US economy is in a “liquidity trap” and signalled support for more action to boost the recovery.
Charles Evans, president of the Chicago Fed, said that “in my opinion, much more policy accommodation is appropriate today” because “the US economy is best described as being in a bona fide liquidity trap”, a point where ultra-low interest rates and high savings rates conspire to make monetary policy ineffective.
Speaking in Boston on Saturday, he said the Fed should consider using a temporary target for the level of prices instead of the rate of inflation in order to drag the economy out the trap by convincing businesses and consumers to stop saving and start investing and spending.
Such a move would be in addition to a fresh asset purchase programme, or quantitative easing, now under consideration.
“I think there are special circumstances when price-level targeting would be a helpful complement to our current and prospective strategies,” Mr Evans said.
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Jim Sinclair’s Commentary
CIGA Gord, one of the most accomplished in our community, recommends we all study the following.
In the Toronto circle failing to heed Gord is known as total foolishness. Therefore I will study what Gord sent and suggest you do as well.


The Second Leg Down of America’s Death Spiral TUESDAY, OCTOBER 12, 2010
I swear to God Almighty: Mortgage Backed Securities are America’s Herpes—the gift that keeps on oozing.
Last Friday, Bank of America announced that it was suspending all foreclosure proceedings, presumably until further notice. Other banks have already suspended foreclosures in a whole truckload of states. A nationwide moratorium on foreclosures might soon happen—which would be a big deal:Global Financial Crisis, Part II—Longer, Wider and Uncut.
But the mainstream media—surprise-surprise—has downplayed the whole shebang. They’re throwing terms out there into the ether, but devoid of context or explanation: “Robo-signings”, “foreclosure mills”, forged signatures, “double booking”, MERS—it’s confusing as all get-out.
So the mainstream media just mentions it casually—“and in other news tonight . . .”—like it’s no big deal: A couple-three lines, lots of complicated, unfamiliar terms, an attitude like it’s a brouhaha overpaperwork of all things!—and thenzappo-presto-change-o!: They’re showing video footage of a cute koala nursing in the arms of a San Diego zookeeper.
But even the koalas know that something awful is heading America’s way. Smart little critters, they’re heading for the treetops, to get away from this mess.
So what the hell is going on with the God forsaken mortgage mess in the United States?
It’s got a lot of bells and whistles, but it’s basically quite simple: It’s all about the fucking Mortgage Backed Securities (MBS). Again.
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Jim’s Mailbox

Posted: Oct 18 2010     By: Jim Sinclair      Post Edited: October 18, 2010 at 3:33 pm
Filed under: Jim's Mailbox

Dean Harry Schultz Letter to the Editor
Financial Times
October 18, 2010

Letters to editor                  0ct 18, 10
Sirs; Your otherwise great AND objective newspaper continues to manifest its blind spot regarding gold. Last week you printed a columnist urging the US to dump its gold. Today you print a column calling gold a current “fever” and refer to its end. This is consistent with FT policy for the last 40 years or more. There is no gold fever or bubble which would mean a large part of the public is buying it. They are not. Ask the next 10 people you meet if they have bought even one gold coin. None have. Ask 100 people and you may find one. The fever/bubble stage will come, but not until gold is 2 or 3 times higher and the public is in the market. Please spare us this biased scare mongering. I hope you have the courage to publish this letter. I remain, otherwise, an ardent FT fan.
Sincerely
Harry D. Schultz, KM, KCSA, KHC,  
Monaco




Eric,
Housing market uptick? That is another statistical farce.
Regards,
Jim

Builders glum on housing market despite uptick CIGA Eric
Builders are pessimistic about the housing market, but are seeing a little more foot traffic after the worst summer for home sales in a decade.
The National Association of Home Builders says its monthly index of builders’ sentiment rose in October to 16, the first increase in five months. The index had been at 13 for the past two months, the lowest level since March 2009.
The chart below illustrates the evolution of another step down in housing. Don’t bother with surveys or indices, follow the money.
Housing Stocks to Gold Ratio:
Source: finance.yahoo.com
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Dear Eric,
Remember all the BS that surrounded the dollar, the currency of refuge, at 89? 30 year long bonds will collapse in time for the same reason.
Bernanke "on the down low" with QE is also raving BS. The Fed has no choice whatsoever. The mortgage crisis impacts two trillion dollars of fraud alone.
QE must go to infinity or the financial black hole that will come will suck in Western world economies from the gravity of fraud in all OTC derivatives.
This will happen for generations to come. Bernanke knows this.
If you would like to hear the depth of the fraud in mortgages alone then I recommend the following video.
Regards,
Jim



‘Real Panic Going on’ in Dollar Index: Charts CIGA Eric
A characterization the dollar’s decline as a ‘real panic’ could still be viewed as premature in 2010. This does not suggest, however, that this trader’s comments should be dismissed as “talking one’s book” (position).
The technical damage in the dollar is undeniable. The neckline of the head-and-shoulders pattern (an inflection pattern) has been smashed on a surge in trend energy. This is clearly illustrated by the sharp drop in REV(E) in the dollar index ETF chart.
The breach of the neckline (NL) yields a minimum downside projection. These are illustrated as blue and green columns in the dollar index ETF and dollar index, respectively. Both projections imply a retest of the 2008 lows.
A break of the 2008 lows, likely in 2011, will generate some ‘real panic’.
U.S. Dollar Index ETF (UUP):
U.S. Dollar Index (DXY):
The dollar index looks set to continue its rapid decline and could fall below 72 point before the end of October, a level not seen since mid-2008, independent trader and technical analyst Bill McLaren told CNBC Friday.
Source: cnbc.com
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A Video Reminder Of Wall Street's Criminal Activities

 

As French Strikes Continue, Country Runs Out Of Gas

 

Brown Brothers Musings On The "Broken Cash Register" And Why Economic Prosperity May Never Again Return

 

Visualizing A POMO Market: How The Fed Added 400 Points To The S&P