Update on Currency Induced Cost Push Inflation/Hyperinflation


In The News Today

Posted: Oct 17 2010     By: Jim Sinclair      Post Edited: October 17, 2010 at 6:03 pm
Filed under: In The News
Jim Sinclair’s Commentary

This is a Western World problem. Nothing has been done about the cause (OTC derivatives) so the downward spiral will continue.
Confidence this time sunders in all currencies of the Western World due to continuing violence of price. The result you are already seeing is currency induced cost push inflation. It starts moderately such as in energy and copper. As Dean Harry and I have said, all of sudden it explodes.
Hyperinflation is the extreme side of currency induced cost push inflation.

‘We’re at risk of financial collapse’: Ken Clarke’s warning for Western economies By JAMES CHAPMAN and JAMES SLACK
Last updated at 4:01 PM on 15th October 2010
The West is in ‘grave danger of financial collapse’, Kenneth Clarke warned last night.
We face ‘quite the most dramatic’ spending cuts in ‘living memory’, the former chancellor added as the Coalition prepares to unveil plans to rein in the unprecedented budget deficit left by Labour.
‘I actually am one of those who believes, with a grave danger of financial collapse, we’re not out of the woods in the Western world yet,’ he said in the extraordinary address.
‘There is an extremely serious financial crisis.’
Warning: Justice Secretary Kenneth Clarke warned the West is in ‘grave danger of financial collapse’
His remarks appeared to contradict the Prime Minister, who insisted days ago that the Coalition’s early decisions have put Britain ‘out of the danger zone’.
Mr Clarke said the UK had ‘rescued ourselves at the moment’, but added: ‘If we fail to deliver with the [cuts] programme we’re going to set out, we’ll be back there all too soon.’
Speaking ahead of next week’s comprehensive spending review, which will see most Government departments’ budgets cut by 25 per cent over four years, the Justice Secretary said: ‘These are difficult circumstances.’
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Jim Sinclair’s Commentary
Apparently media wise it is possible to make the Gulf oil spill go away.
Foreclosure Gate is here to stay!



Jim Sinclair’s Commentary
Here is why Bernanke was on the down low regarding QE last week. The fact is he has no choice. It is that or the West falls into a black hole of insolvency.
QE is therefore going to infinity.

China’s not the villain if the West tries to debase its debt through QE
Last weekend’s "currency war summit" ended in dismal failure. Future historians will wince.
By Liam Halligan
Published: 9:00PM BST 16 Oct 2010
The annual meetings of the International Monetary Fund in Washington are supposed to generate some kind of resolution. Instead, all we got was posturing and a slew of pious speeches saying that "co-operation is crucial".
What is now clear is that some of the world’s leading economies are deliberately debasing their currencies in order to make their exports more competitive and lower the real value of the massive debts they owe the rest of the world.
Tempers are rising, as are protectionist sentiments. Across the globe, governments are talking about "aggressive tariff barriers" and "trade retaliation" – language that hasn’t been used by mainstream peacetime politicians since the mid-1930s.
Yet instead of knuckling-down and addressing the urgent task of building some kind of an agreement to contain a fully-blown currency conflict, world leaders last Sunday urged the IMF only to "study the issues", and "play a stronger role in monitoring how the policies of each member state affects the others".
This was a pathetic response. The concluding statement of the fund’s policy-setting committee meekly pledged to "work toward a more balanced pattern of global growth, recognising the responsibilities of surplus and deficit countries".
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Jim’s Mailbox

Posted: Oct 17 2010     By: Jim Sinclair      Post Edited: October 17, 2010 at 5:56 pm
Filed under: Jim's Mailbox

Growing Strain of Control in Silver CIGA Eric
Commercial traders continue to cover their short positions into strength in silver and gold. The size and speed of the short covering is particularly acute in the silver market. This unusual activity relative to price, first discussed as a money flow footprint, suggests a subtle shift within highly controlled markets. Any shift should be monitored close as it can imply growing strain on control.
Silver London P.M Fixed and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:
Gold London P.M Fixed and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:

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Dear Jim,
The following article attempts to explain how Bank of America is using “creative” accounting techniques to reduce its required reserves for failed residential Mortgage Backed Securities that it claims to “hold.”
This is evidence of the “smoke and mirrors” OTC derivatives that you have been warning against for years.
With these admissions, I simply cannot understand how investors continue to buy these double-downgraded junk bonds, repackaged into AAA rated securities.
Respectfully,
CIGA Marie

Truth In Lending Audit & Recovery Services, LLC Mortgage Fraud and Forensic Analyst
Certified Fraud Examiner Marie.McDonnell@truthinlending.net

Bank of America Re-Remics Cut Mortgage Debt as Basel Rules Loom By Miles Weiss and David Mildenberg – Oct 14, 2010
Bank of America Corp., seeking to reduce risk and meet new capital standards, upgraded billions of dollars of distressed mortgage bonds by repackaging them into new securities using a variation of a Wall Street technique that failed during the credit crisis.
The transactions, known as re-remics, are designed to add a layer of protection to residential mortgage-backed securities that sustained losses, enabling them to regain investment-grade ratings. The strategy helped the bank pare its RMBS holdings by $5.2 billion in the second quarter, or about 15 percent, according to a company filing.
With bank stocks mired near historic lows in relation to book value, firms such as Bank of America and JPMorgan Chase & Co. are searching for alternative ways to meet rules set by global regulators since the 2008 financial crisis. By turning junk-rated securities into investment-grade bonds, Bank of America will need to hold less capital under rules agreed to by the Basel Committee on Banking Supervision.
“The larger banks are going to do anything and everything they can to create capital other than issuing stock,” said Matthew Pieniazek, president of Darling Consulting Group Inc., a Newburyport, Massachusetts, firm that provides asset-liability management advice to banks. “The most punitive way of raising capital is by issuing highly dilutive common equity in the current marketplace.”
‘Scrubbing’ Balance Sheets
Re-remics, short for re-securitizations of real estate mortgage-investment conduits, are one way for lenders to improve capital ratios without issuing stock, according to Pieniazek, who also runs educational programs for bank regulators. Firms such as Bank of New York Mellon Corp. have been doing re-remics since the credit crunch began in 2007, primarily to restructure private-label RMBS to make the bonds easier to divest.
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