Stubborn Ireland Refuses To Yield To European Banking Interests, And Exchange Senior Note Recoveries For Austerity

The ECB’s Camouflaged Quantitative Easing

Posted: Nov 16 2010     By: Jim Sinclair      Post Edited: November 16, 2010 at 10:40 am
Filed under: General Editorial

Dear Friends,
How many times have we gone through the standard operation for the international investment banks to profit on the short of the euro, as is occurring today?
The OTC derivative (credit default derivative prices moving higher) market turns against the Irish.
Media turns focus directly on both the OTC derivative action (credit default derivatives moving higher), and runs multiple stories of the dire circumstances.
The government in question opens negotiations on a form a rescue. Other euro states jump up and down saying why should we finance the country in question.
The media calls this a non-united euro zone. The euro declines into and during the event, consolidating rises thereafter.
The ECB camouflages a great deal of its Quantitative Easing in secretly being the buyer in the bond offering of the country in question. The media lauds the UNEXPECTED good buying in the euro. The euro moves back into the $1.40s where the international investment banks put out their short and do it all again against this time Spain and/or Portugal.
The bad news is that Europe is courting a business disaster by their actions on austerity while at the same time doing QE in the bailout and covert bond buying at auction.
Greece has 110 billion committed which is without any doubt covert QE.
The so called good news if that the perps continue to make a million per minute on the days of covering the euro short. How many times do you have to see this to know it is gold positive and deleterious to the entirety of the Western world’s finances.
Please review the illustration above that will in time be proven totally correct. We will have an outrageously volatile euro and the dollar lower on balance.
Respectfully,
Jim



Jim Sinclair’s Commentary
The media is really working it to get that cover in the euro for the usual suspects.
The only thing financial TV and the media are working harder on is getting the GM issue oversubscribed.

Greek deficit much bigger than estimate
Greek deficit for 2009 was 15.4% of GDP, not 13.6%, says EU statistics agency Helena Smith in Athens
Monday 15 November 2010 21.17 GMT
Greece’s goal of reducing its gargantuan debt received a fresh blow today when the EU statistics agency announced that the country’s 2009 budget deficit was much worse than first thought.
Six months after Athens received €110bn (£93bn) in emergency loans from EU nations and the International Monetary Fund to prop up its near-bankrupt economy, Eurostat revealed that Greece’s budget deficit reached 15.4% of GDP last year, substantially higher than its previous estimate of 13.6%.
In April, Eurostat had estimated the debt-to-GDP ratio would reach 115.1%. The revised data meant that Greece’s debt ratio has eclipsed those of every other EU state, officials said. By the end of 2009, its debt is projected to account for 126.8% of GDP.
Greece’s poor bookkeeping was blamed for the budget black holes.
As a team of visiting inspectors from the IMF, the European commission and the European Central Bank arrived in Athens, there was widespread acceptance that the new figures would throw out the fiscal and structural reform programme the socialist government has agreed to in return for the loans, the biggest bailout in history.
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Jim Sinclair’s Commentary
Look at how the media is working it. The USA is fine. States of the USA are fine. The euro zone is bad.
This looks like a cover to me.

Eurozone facing ’survival crisis’ 16 November 2010 Last updated at 06:38 ET
The European Union is in a "survival crisis" over eurozone debt problems, the EU Council president has warned.
Speaking hours before eurozone ministers meet to address threats to the bloc’s economic stability, Herman Van Rompuy said that if the euro failed, so too would the EU.
Members such as the Republic of Ireland and Portugal are under fresh scrutiny.
Questions have been raised over whether they can manage their debt without help from EU funds.
Mr Van Rompuy said he was "very confident" the problems could be overcome.
But he added: "We all have to work together in order to survive with the eurozone, because if we don’t survive with the eurozone we will not survive with the European Union."
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Jim Sinclair’s Commentary
You have to notice that there is no media comment on this collapse. If the media was being straight with us why not call attention to what looks like the beginning of the end market wise for munis and states of the US zone?


Jim Sinclair’s Commentary
It is interesting that this is mentioned just after the US showed China their naval forces.

China, India, Russia vow to deepen cooperation Nov 15 05:00 PM US/Eastern
The foreign ministers of developing giants China, India and Russia pledged on Monday to step up cooperation in trade, energy and geopolitical affairs including climate change.
The pledges were made in a joint communique after two days of meetings in the central Chinese city of Wuhan by Chinese Foreign Minister Yang Jiechi and his Russian and Indian counterparts Sergei Lavrov and S.M. Krishna.
The communique also said China, India and Russia had deepened cooperation on international and regional issues during the talks, but stressed that such cooperation would not target "any other country".
The foreign ministers said they supported a "multi-polar, equitable and democratic world order" and expressed their commitment to the use of "multilateral instruments" for finding solutions to global and regional issues.
China and Russia are members of the Shanghai Cooperation Organisation, a grouping of mostly central Asian states that many view as a bid by China and Russia to counter global US influence.
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Jim’s Mailbox

Posted: Nov 16 2010     By: Jim Sinclair      Post Edited: November 16, 2010 at 12:00 pm
Filed under: Jim's Mailbox

Hi Dan,
Casey Research posted the article below very recently and it gave me a mild shock, I admit. I would very much appreciate any comment. Have you or Jim mentioned any of these issues in the past, which I might have overlooked?
Kindest regards,
CIGA Rick

Rick,
If the US were to actually default on its debt, it would potentially risk a war with China whose national wealth would be wiped out overnight.
Gold will be brought into the monetary system at some point in the future and will then stay at a permanent higher level. The US does not need to outlaw private ownership of gold. That is idiotic thinking. What it needs to do is to only allow the price of gold to move to much, much higher levels. The reason that Roosevelt passed an executive order forbidding private ownership of gold in the US back during the Great Depression was because at that time, the US was on a direct gold standard domestically and needed the gold to ramp up the money supply. The first thing that then happened was they devalued the dollar or a better way of saying it, they let the price of gold move higher.
The US claims to have 8000+ tons of gold. We have no idea if that is true because we cannot audit our own gold. But assume that they did – they still have the damn stuff valued at an asinine price on their books. They need to simply allow the price to rise to an equilibrium value to balance the amount of liabilities. That would bring the total “Dollar value” of the gold that is held to a significantly higher level.
The World Bank President let the cat out of the bag last week when he said that gold was acting as a sort of defacto reserve currency. That tells us what the international monetary lords are already thinking.
When the Dollar loses its reserve currency status, the new reserve currency will be a unit made up of a basket of major currencies – with the yen, the euro, the yuan, the real and perhaps the ruble or even the rupie part of that basket. I am also confident that gold will be in the mix.
I do not know why we have so many people in the gold community who are constantly looking for a reason for gold to collapse in price. I have lived through and traded many, many bull markets in an assorted variety of commodities and I HAVE NEVER SEEN a market that has so many people who follow it and write about it who are ready to trash that market so quickly. It is almost perverse.
One more time – there is not a shortage of gold for the government to use in bringing a return of the metal to the monetary system. All that is needed is to let it rise to a natural price. That would be so staggeringly high that most will not believe it can happen.
Trader Dan
“In the late 1970s, then Fed Chairman Paul Volcker, wielding an ax made up of high interest rates, lopped the head off the gold bull. Leading up to Volcker’s draconian solution, I can well remember the broadly held impression that gold could only go higher. His extreme actions changed that impression almost overnight.
That scares me, because there is a similar – albeit not nearly so widespread – meme going around today.
Let me share with you a couple of “out of the box” ideas for how the U.S. government might torpedo gold’s further advance today, in the same way that Volcker did back then.
· Overt debt default. In this scenario, Uncle Sam rolls out of bed one morning and announces that Treasury debt will henceforth be redeemed at only pennies on the dollar. To lessen the domestic political blowback, perhaps he announces a process whereby domestic holders are redeemed at a higher rate than foreigners… or maybe he most disadvantages debt held by those foreigners labeled as currency manipulators. There is much historic precedent for this extreme action – and, other than some negative consequences over a relatively short initial period of time, countries that have defaulted have suffered no lasting effect. Case in point, both Russia and Argentina now have debt-to-GDP ratios well under 10% – among the lowest in the world. In concert with resolving the debt, the government could promise a new regime of austerity, as well as issue a new dollar with at least some limited backing. Change-o, presto, problems solved, and gold heads into the tank.
· As the coming default becomes obvious to a broader universe, is there any way the Fed will be able to keep a lid on interest rates? Again, the answer has to be “no.”
· Tired of dealing with the “gold vigilantes,” Uncle Sam simply outlaws gold ownership. Hey, it’s happened before. But what about the price of gold in this scenario?
· Prohibition would force U.S. holders to sell, which by itself would tend to depress the price. However, I’d bet on the price going up because the prohibition would be a signal to the rest of the world that the dollar’s sponsor had gone completely off the rails.
· Still, who knows, maybe an international consortium of nations could agree to ban gold – kind of like how they all now ban heroin? Unlikely, but desperate times call for desperate measures.
· The U.S. adopts a gold standard. In this scenario, Uncle Sam, his back against the wall, agrees to henceforth link the dollar to gold at some fixed price. With concerns over unlimited government spending capped, gold might hold at the fixed price while awaiting further signals. Of course, what that fixed price might be is anyone’s guess – although it would almost certainly be a lot higher than it is today.
Our own Marin Katusa has identified one possible sleight of hand that could be deployed should the U.S. decide to return to a gold standard – and that would be to nationalize all the nation’s gold deposits, then use the inferred resources in the ground as backing for the currency. An interesting thought, as it would greatly reduce the price of gold necessary to reach full backing of the dollar.
While each of those three scenarios carries further implications, they may just pass the test of being politically feasible – which, in this government-dominated world of ours, is all-important.
Unfortunately, only the first – overt default – would actually make a dent in solving the gargantuan overhang of debt that now torments the global economy. As such, only overt default mitigates the need for the government to cntinue its insane deficit spending or the debt monetization required to support that spending.”


Media-Driven Hard Sell of The Euro Crisis CIGA Eric
Jim,
Any guesses on how the big players were positioned before the media-driven hard sell of the Euro crisis?
If you want to push up the dollar index, thus supporting the gold and silver crush, send the Euro lower. As we have said before, there are no coincidences.
Euro and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:


Eric
Look at how media is working it.
The USA is fine.
States of the USA are fine.
The euro zone is bad.
Looks like a cover to me.
Jim

Headline: Eurozone facing ’survival crisis’
The European Union is in a "survival crisis" over eurozone debt problems, the EU Council president has warned.
Speaking hours before eurozone ministers meet to address threats to the bloc’s economic stability, Herman Van Rompuy said that if the euro failed, so too would the EU.
Members such as the Republic of Ireland and Portugal are under fresh scrutiny.
Questions have been raised over whether they can manage their debt without help from EU funds.
Source: bbc.co.uk
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Eric,
Be prepared for QE in the entire Western financial world.
Regards,
Jim

1929-1944 & 2000-2015 Cycle Comparison: Are You Ready For The Next Step Down? CIGA Eric
The more things change, the more the cycles stay the same. Are you ready for the next step down?
1929-1944 & 2000-Present Comparison: S&P 500 to Gold ($/oz) Ratio:
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Jim,
I say 20 years of jail time, 3 meals a day, a boyfriend named Tubby, and all illegal gains made by the upper management given back to those that were bilked. That would be a good start.
Anything less is a crime against the American Public
CIGA JB Slear

BofA CEO says foreclosure probe settlement needed Posted 2010/11/16 at 9:15 am EST
CHARLOTTE, North Carolina, Nov. 16, 2010 (Reuters) — Bank of America Corp Chief Executive Brian Moynihan said on Tuesday a quick settlement of the 50-state attorneys general probe of the foreclosure crisis is the best solution for all involved.
"It is in everyone’s best interest to get this settled and behind us," said Moynihan, speaking at the Bank of America Merrill Lynch Financial Services conference in New York.
Moynihan said the industry and lawmakers need to look at streamlining foreclosures. He said the current system is a "difficult process" for homeowners to navigate.
The largest U.S. mortgage lenders, including Bank of America, have been at the center of a public and political firestorm in recent weeks, as critics allege banks cut corners by using shoddy, improperly reviewed paperwork in foreclosures.
In October, Bank of America instituted a nationwide halt on home repossessions as it reviewed its internal processes. JPMorgan Chase & Co and Ally Financial Inc’s GMAC Home Mortgage each instituted 23-state foreclosure moratoriums, pending similar reviews.
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