We The Sheeplez- The Coming Economic Collapse.."A Nation Of Sheep Ruled By Wolves" Thomas Jefferson

The Great "Depression"

Are Republicans Preparing For A Push To Eliminate The "Maximum Employment" Part Of The Fed's Dual Mandate?

Think You Are Better Than Obama? Here Is Your Chance To Balance The Budget

Insanity or Ingenious?

Posted: Nov 15 2010     By: Greg Hunter      Post Edited: November 15, 2010 at 12:27 pm
Filed under: USAWatchdog.com

Jim Sinclair’s Commentary
The Fed is not trying to help business. It hopes that QE might by some miracle do that, but this is not the main motivation.
The Fed has been feeding the banks by sending them money at almost no cost with which they buy treasuries, a camouflaged form of QE. Now the Fed is directly buying Treasury issues, which is QE in daylight.
The evidence of this is in the less than enthusiastic action of the bond market in all maturities.
The primary reason why QE is now, and why it will continue to infinity is the need of the Treasury to borrow in order to finance.

Courtesy of Greg Hunter’s USAWatchdog.com
Dear CIGAs,
What is happening in the economy is signalling enormous changes for the U.S. and the world. The scale of what the Federal Reserve is doing is unparalleled in human history. No country has ever produced so much money and so much debt in such a short amount of time.   The Fed has embarked on another round of money printing (Quantitative Easing or QE2). It has been reported that it will buy $600 billion in Treasuries and another nearly $300 billion in mortgage-backed securities. In a statement nearly two weeks ago, The Fed left its plan of money printing open-ended. It said it would, “regularly review the pace of its securities purchases and the overall size of the asset-purchase program in the light of incoming information and will adjust the program as needed.”
All the fancy financial terminology and complicated skullduggery can be boiled down to a simple phrase or two. The dollar is being debauched at the hands of the Fed, and the massive debt and future commitments we owe will never be paid off in “real” money.   Boston University Economist Laurence Kotlikoff says the real amount America is on the hook for is $202 trillion. For perspective, just one trillion dollars is a stack of $100 bills nearly 68 miles high!
The Fed is trying another round of QE, even though the first instalment of $1.7 trillion did not work to actually repair the economy. We spent another $2 trillion in TARP and other stimulus that was, also, supposed to fix the economy. It’s a grand total of $3.7 trillion just in the last two years. (Some say it’s more than $12 trillion spent or committed.) All this money printing did inflate stock prices. It also helped out the big banks. It worked so well they are paying a record $144 billion in bonuses this year. What did the man on the street get?–foreclosure fraud and higher unemployment (22.5% according to Shadowstats.com).   Now, the money is running out, and the Fed is back to printing to keep the economy from falling off a cliff–again. Nothing has been fixed; the day of reckoning has just been postponed, but this cannot go on forever. At some point, the U.S. dollar will take a severe plunge, and inflation will hit America with a vengeance.
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Jim Sinclair’s Commentary
The ECB will QE to infinity. That you can bank on.
Currency problems anywhere have had an impact on gold everywhere.

Greece admits breach of bailout terms as audit begins
ATHENS (AFP) – – Greece acknowledged Monday it would breach conditions for a new instalment of a 110-billion-euro bailout as the IMF and European Union began an audit of the country’s austerity measures.
Greece’s Socialist government faced a week of tough talks with its benefactors and although bolstered by sweeping successes in local elections on Sunday, the outlook is still overshadowed by gloom on the economic front.
The Eurostat statistics agency issued its final revision of Greece’s accounts for the past four years, triggering a new forecast by Athens that its public deficit in 2010 would reach 9.4 percent of output, well above the 8.1-percent target.
Greek bond yields, a measure of investor confidence in the country’s finances, rose on Monday, with the rate on 10-year paper up to 11.280 percent from 11.184 percent on Friday.
Having flirted with insolvency until it was rescued by the International Monetary Fund and EU in May, Greece on Monday sought to reassure its partners that despite the latest figures, it remained on course.
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Jim Sinclair’s Commentary
The entire Western world will go QE to infinity before this story is over.

Europe stumbles blindly towards its 1931 moment
It is the European Central Bank that should be printing money on a mass scale to purchase government debt, not the US Federal Reserve. By Ambrose Evans-Pritchard 10:00PM GMT 14 Nov 2010
Unless the ECB takes fast and dramatic action, it risks destroying the currency it is paid to manage, and allowing a political catastrophe to unfold in Europe.
If mishandled, Ireland could all too easily become a sovereign version of Credit Anstalt – the Austrian bank that brought down the central European financial system in 1931, sent tremors through London and New York, and set off the second deeper phase of the Great Depression, the phase when politics turned ugly.
“Does the ECB understand the concept of contagion?” asked Jacques Cailloux, chief Europe economist at RBS. Three EMU countries have already been shut out of the capital markets, and footloose foreign creditors hold €2 trillion of debt securities issued by Spain, Portugal, Ireland and Greece.
“If that is not enough to worry about financial contagion, what is? The ECB’s lack of action begs the question as to whether it is fulfilling its financial stability mandate,” he said. That is a polite way of putting it.
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Jim Sinclair’s Commentary
Sure, it is because of pirates just after the US took 1/4 of its fleet out to dinner for some curry.

Iran Dispatches 10th Fleet of Warships to Gulf of Aden
TEHRAN (FNA)- The Iranian Navy dispatched its 10th flotilla of warships to the Gulf of Aden to defend the country’s cargo ships and oil tankers against the continued threat of attack by Somali pirates.
The Iranian Army’s Navy announced in a statement on Monday that it has dispatched its 10th fleet to the Gulf of Aden and Northern Indian Ocean after a special ceremony in Iran’s first naval zone attended by Lieutenant Commander of the Islamic Republic of Iran’s Navy Rear Admiral Gholam Reza Khadem Biqam and other senior commanders.
Also during the ceremony, Biqam praised the successful performance of the Navy’s 9th fleet of warships which returned home after accomplishing a 75-day mission in the Gulf of Aden.
The intelligence-operational fleet of warships, which consisted of Khark warship and Alvand destroyer, had been dispatched to the Gulf of Aden on September 1 to fight Somali buccaneers and guard Iranian cargo ships in the volatile region.
Iran’s measure to dispatch the 10th fleet of warships to the Gulf of Aden will boost Navy’s operational range in international waters since the Iranian Navy is considered as a strategic regional force with a long operational range.
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Jim Sinclair’s Commentary
A bailout of Ireland or any euro member is the buying of bonds by the singular currency union of a member state of QE, yet they scream at the US Fed for doing exactly what is proposed here.

Germany urges Ireland to accept EU bailout. Eager to stop a bond sell-off at the edges of the eurozone, Germany pushed Ireland into talks with the EU’s Finance Ministry regarding a likely request for aid worth €80B ($110B) between 2011 and 2013. Irish officials, however, deny that there is a crisis, stress the country is "fully funded till well into 2011," promise a credible austerity budget next month, and say their country won’t give up its "hard-won" sovereignty by being forced to tap the European Financial Stability Facility. A European diplomat took little comfort in Ireland’s position, saying, "Even a denial is seen as some sort of affirmation that there is something to deny." Ireland did mention that its banks could use a little help. Euro -0.6% vs. the dollar (7:00 ET).

In The News Today

Posted: Nov 15 2010 By: Jim Sinclair Post Edited: November 15, 2010 at 12:23 pm
Filed under: In The News
Jim Sinclair’s Commentary
This is going to be quite interesting. I have to wonder if the Fed will be the only buyer.
The rate will tell the story. If the rate is reasonable then it is illogical. If it is illogical then QE has started to bail out states.
Troubled California begins $14bn bond sale By Nicole Bullock in New York
Published: November 14 2010 19:43 | Last updated: November 14 2010 21:10
California on Monday kicks off about $14bn of debt sales, hoping that investor desire for yield will outweigh concerns over the US state’s fiscal trouble in a weak market for local government debt.
The Golden State is the starkest example of the financial difficulty facing US local governments. Worries are mounting of a possible rise in defaults or a reassessment of risk in the $2,800bn municipal bond market, hitherto perceived as a safe place to invest.
California’s plans to sell its debt come just days after Arnold Schwarzenegger, the state governor whose term ends in January, called a special session of the legislature to address a state deficit projected to be more than $25bn over the next 18 months.
Orders begin on Monday for a $10bn, two-part sale of so-called revenue anticipation notes (Rans), an annual event that allows California to bridge the gap to its tax season in the spring. The notes, due in May and June, are targeted mostly at individual investors who benefit from tax breaks on so-called “munis.”
Muni bonds generally last week sold off on concerns about shaky finances and the looming end of federal subsidies for the Build America bonds (Babs) programme, which has boosted the market since the credit crunch.
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