Sovereign debt problems worsen, support metals, Turk tells King World News

Mayors Flock to D.C. in Hopes of Federal Aid

More than 200 mayors descend upon Washington to urge President Obama to help cities out of their fiscal morass as state and federal aid dries up

House GOP Lists $2.5 Trillion in Spending Cuts. Now if they'll just stand firm on not raising the Federal Debt Ceiling...

M2 Update

Submitted by Tyler Durden on 01/20/2011 20:29 -0500

As usual, one chart is worth a thousand words, and a couple hundred billion in real, incremental dollars. 

 

 

Inflationary Guerilla Tactics Resume As Comex, Nymex Hike Margins On Gold, Silver, Cracks, Spreads And Other Products

Submitted by Tyler Durden on 01/20/2011 20:11 -0500

No...there was no leak this time. We promise.

Center On Budget And Policy Priorities Issues Report On Muni Crisis, Blasts "Misunderstandings That Create Unnecessary Alarm"

 

John Taylor: The Fed's Rightful Chairman

 

"All In All It Appears That Eisenhower’s Worst Fears Have Been Realized And His Remarkable And Unique Warnings Given For Naught"



The Biggest Lie in Finance Today 

In The News Today

Posted: Jan 20 2011     By: Jim Sinclair      Post Edited: January 20, 2011 at 6:45 pm
Filed under: In The News

Jim Sinclair’s Commentary
Another voice you might consider.

Anthony Bolton: ‘Gold is the only commodity to buy’
It’s too late to join commodities party, the Fidelity fund star says. By Emma Wall 6:30AM GMT 17 Jan 2011
Commodities enthusiasts are investing five years too late, according to legendary fund manager Anthony Bolton.
"The best time for commodities was in 2006, when the whole world was growing above trend," said Mr Bolton, who manages the Fidelity China Special Situations investment trust.
"Western economies are anaemic at the moment, and I am not sure emerging market growth is enough to keep commodities going."
Despite many managers believing that commodities are a key part of the emerging markets story, Mr Bolton holds only one commodities stock in his fund, a gold mine.
It is uncertainty about America that is keeping Mr Bolton from increasing his exposure to commodities. While China is experiencing a bull market, he warned that the "stars of one bull market are not necessarily the stars of another".
More…

 
 
Jim Sinclair’s Commentary
To close your gold insurance policy is quite illogical.

World needs $100 trillion more credit, says World Economic Forum
The world’s expected economic growth will have to be supported by an extra $100 trillion (£63 trillion) in credit over the next decade, according to the World Economic Forum. By Emma Rowley 8:49PM GMT 18 Jan 2011
This doubling of existing credit levels could be achieved without increasing the risk of a major crisis, said the report from the WEF ahead of its high-profile annual meeting in Davos.
But researchers warned that leaders must be wary of new credit "hotspots", where too much lending takes place, as the world emerges from a financial catastrophe blamed in large part "to the failure of the financial system to detect and constrain" these areas of unsustainable debt.
"Pockets of credit grew rapidly to excess – and brought the entire financial system to the brink of collapse," said the report, written in conjunction with consulting firm McKinsey. "Yet, credit is the lifeblood of the economy, and much more of it will be needed to sustain the recovery and enable the developing world to achieve its growth potential."
The global credit stock has already doubled in recent years, from $57 trillion to $109 trillion between 2000 and 2009, according to the report.
The WEF said the continued demand for credit could be met "responsibly, sustainably – and with fewer crises". However, it cautioned that to achieve this goal, financial institutions, regulators, and policy makers need more robust indicators of unsustainable lending, risk, and credit shortages.
More…

 
 
Jim Sinclair’s Commentary
For those of our Gang that are not having the best of days, relax.
Algos run the short term but this gold market hit the 1440s based on fundamental realities.
Now factor the following in.

Brace for a ‘perfect storm’ in gold By Thomas Kaplan
Published: January 18 2011 15:32 | Last updated: January 18 2011 15:32
Investment implies moving some part of one’s assets from financial safety to a position of acceptable risk with the hope of increasing wealth over time. What qualifies as “acceptable risk” may thus be seen to be the gating question for the investment criteria of a “prudent man”. This has come to be known as the Prudent Man Rule to guide persons entrusted with the finances of others.
Although the rule remains a guiding principle in the fund management industry to this day, at least one key element has changed. In 1971, our understanding of ultimate safety was transformed when President Nixon ended the US government’s certification that each dollar in circulation was, in effect, worth exactly 1/35th of an ounce of gold.
Since all major currencies had been linked to gold via the US dollar since 1945, when the US held the majority of monetary reserves, the announcement provoked a momentous change in the financial culture. Cash no longer meant gold: the amount of dollars the Federal Reserve could print would not be restricted to some degree by a stored metallic tangible asset with a finite supply. In a great leap of faith, paer dollars and traded US federal liabilities became “risk-free” assets while gold, long regarded as money itself, was disdained as a “commodity”, a volatile “risk asset”.
This historically radical new notion was validated by the arbiters of money themselves. Central bankers dumped gold, driving prices down sharply during the 1990s. They thereby reinforced the MBA textbook perceptions that the dollar and US Treasury bonds were “risk-free” assets and gold a “barbarous relic,” as John Maynard Keynes famously called it.
Even today, as the gold rally has reached the 10-year mark (following a 20-year bear market), the metal represents a mere 0.6 per cent of total global financial assets (stocks, bonds and cash). This is near the all-time low (0.3 per cent) reached in 2001, and significantly below the 3 per cent it accounted for in 1980 and the 4.8 per cent it was in 1968.
More…

 
 
Jim Sinclair’s Commentary
You would be amazed how accurate Zillow is on the price of real estate. In fact if you have not checked this site before buying or selling you have ignored your best resource. What they say below can be accepted as true.

Home price drops exceed Great Depression: Zillow By Al Yoon
NEW YORK | Tue Jan 11, 2011 8:40am EST
NEW YORK (Reuters) – Home prices fell for the 53rd consecutive month in November, taking the decline past that of the Great Depression for the first time in the prolonged housing slump, according to Zillow.
Home prices have fallen 26 percent since their peak in 2006, exceeding the 25.9 percent drop registered in the five years between 1928 and 1933, the housing data company said in a report on Monday. Prices fell 0.8 percent over the month.
It is a dubious milestone for the U.S. housing market which has failed to gain much traction despite a host of government programs to reduce delinquencies and encourage demand with temporary tax credits and lower interest rates. Many economists expect further price drops, even if there are some anecdotal signs of growing demand, such as in pending home sales data.
"For the next six to nine months, the larger factors affecting the housing market that will produce more home price declines will be the excess inventory of homes, high negative equity and foreclosure rates, and weakened demand due to elevated employment, Stan Humphries, Zillow’s chief economist, said in a blog post.
Declines are accelerating, and it will take a while before falling unemployment and other signs of economic improvement support the market, Zillow said.
More…