Mike Krieger Deconstructs Commodity Inflation: "You Ain't Seen Nothing Yet"

Submitted by Tyler Durden on 01/13/2011 13:00 -0500

History is littered with the carcasses of men that in their exaggerated hubris attempted to stop the forces of nature and the markets only to fall flat on their faces. We tell the stories of these men in history books and myths from prehistory, but it never stops men of successive generations from trying it all over again. What the current political class the world over (at the behest of Wall Street financial terrorists and other big corporate interests) are doing falls into the same exact formula of prior historical failures. Some of the historical figures that attempted to beat back nature were great warriors or kings that just reached too far. Some of them were evil megalomaniacs whose desire was nothing short of absolute power in their hands over any of the unfortunate human beings that happened to be in the way. Ben Bernanke is neither of these. He is a just a little dweeb with an electronic printing press. Tragically, because of modern technology and the way the monetary system works today he has the ability to cause more damage than any other one person in the history of mankind and he is doing it. I shudder to contemplate the ultimate effects of the inflationary holocaust he has unleashed on the six billion mesmerized and helpless souls present on earth at this time. The signs are starting to show up again just like in early 2008. Food is becoming scare at a “reasonable” price in many parts of the globe and the symptoms of this are starting to bubble up to the surface. For example in recent days we have witnessed food riots in Algeria and Tunisia where at least 14 people are reported to have died in each country. These types of events were easily predictable and have been predicted by people like me and many other whose views will never be seen in the mainstream media. Fortunately, the alternative media is taking over (which is why the Obama administration is certain to increase its crackdown on the internet) and people are becoming very informed and linked all over the world. The divide and conquer strategy that has worked so well for millennia will be much harder to pull off this time around.

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In The News Today

Posted: Jan 13 2011     By: Jim Sinclair      Post Edited: January 13, 2011 at 11:29 am
Filed under: In The News
Jim Sinclair’s Commentary
The meeting next week between the US Administration and President Hu of China is at best a photo opportunity.
The Administration’s desire that China will cease military operations before the next G20 is a waste of words.

 
Jim Sinclair’s Commentary
If they do this and the free speech defence concerning the false ratings fails. Following that the rating agencies will be litigated out of business in six months.
That would be a pre-emptive bankruptcy due to an overabundance of legal claims with sound defence.

America’s Credit Rating to Take a Hit? by Matt Pressman
January 13, 2011, 7:54 AM
Moody’s and Standard & Poor’s, the two leading credit-rating agencies, have warned that they might downgrade the United States’s triple-A rating because of the country’s deteriorating fiscal situation. Yes, these are the same ratings agencies that helped cause the country’s deteriorating fiscal situation by giving triple-A ratings to dodgy subprime-mortgage-backed bonds (but they had a good excuse—they were being paid to do so by the banks issuing those bonds!). [Wall Street Journal]
• In a stirring speech last night at the University of Arizona, President Obama hoped that the tragedy in Tucson would “usher in more civility in our public discourse” and warned against “simple explanations.” He also announced that Representative Giffords opened her eyes yesterday for the first time since her shooting. [NY Times]
• All of Arizona’s federal judges have been ordered to recuse themselves from the Jared Lee Loughner cause, since among his alleged victims was one of their own, Judge John Roll. Instead the case will be heard by Judge Larry Burns, of the Southern California district court. [Politico]
More…




Jim Sinclair’s Commentary
Sure, business is getting better…

Banks repossessed 1 million homes last year — and 2011 will be worse
First quarter of the year will likely show a rebound in foreclosure activity By JANNA HERRON – NEW YORK — The bleakest year in foreclosure crisis has only just begun.
Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home’s value, industry analysts forecast.
"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc.
The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating back to 2005.
One in 45 U.S. households received a foreclosure filing last year, or a record high of 2.9 million homes. That’s up 1.67 percent from 2009.
For December, 257,747 U.S. homes received at least one foreclosure-related notice. That was the lowest monthly total in 30 months. The number of notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.
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Jim Sinclair’s Commentary
Why do you not hear screaming and crying on this? Could it be because the great profits of all these bankers was a mark up on the crap paper they held after FASB sold their souls to the devil?
Getting rid of the trading departments is akin to what you do with a restaurant after using it as a money laundering facility – you burn it down.

Morgan Stanley to spin off prop trading desk By Justin Baer in New York
Published: January 10 2011 21:33 | Last updated: January 10 2011 21:33
Morgan Stanley agreed to spin off its last big proprietary trading desk by 2012 in a move that brings it a step closer to meeting new US rules on banks betting their own capital.
Last year’s sweeping financial regulatory reform legislation outlawed large US banks from betting their own capital on trades where clients’ interests were not being served, setting in motion a wave of departures and restructurings at trading desks that were once among the most coveted and lucrative spots on Wall Street.
Morgan Stanley began to retreat from prop operations during the financial crisis as its risk-taking businesses racked up losses. Other banks, including Goldman Sachs and JPMorgan Chase, have followed suit.
Morgan Stanley is spinning out Process Driven Trading, which has traded equities with the bank’s own capital since 1993 and has been the last meaningful prop business in Morgan Stanley.
The bank had shut down its four credit-trading desks after a multibillion-dollar trading loss three years ago, and in October agreed to sell FrontPoint to the hedge fund’s employees.
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