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Huge raid by the cartel..gold and silver fall on massive volume

 

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Adjusted Mortgage Applications Stabilize In Last Two Weeks, Plunge On Unadjusted Basis

 

Improvement In Preliminary Jobs Report Misleading

Posted: Jan 05 2011     By: Jim Sinclair      Post Edited: January 5, 2011 at 10:50 am
Filed under: General Editorial

Dear Friends,
This morning it is the assumed improvement in the preliminary (but not official) Jobs report by ADP that has increased the value of the dollar and caused renewed selling in gold.
As I have said before, you need to have your seatbelts buckled.
The improvement in employment is strongly influenced by seasonal factors. The improvement in the US economy is statistical and weak at that.
As Armstrong said yesterday, it is not business that is the problem, it is DEBT.
Regards,
Jim

 

Inflation In Eurozone

Posted: Jan 05 2011     By: Dan Norcini      Post Edited: January 5, 2011 at 10:48 am
Filed under: Trader Dan Norcini

Dear Friends,
I missed this story from yesterday but felt it was significant enough to bring it to your attention as it has a parallel here in the US.
The headline is entitled; “Inflation Jumps in Europe”.
When you read the story note the first sentence well: “Higher prices for food, oil and other commodities are starting to stoke inflation in the euro area…”
This is precisely what we have been warning you about that was going to occur over here based on the chart of the CCI (Continuous Commodity Index). The fact is food prices are globally connected nowadays with rising prices in one quarter of the globe spilling over into the rest. Monty has spoken to rising inflation in the emerging markets in his newsletters; now it is becoming evident that inflation is surfacing in the developed world, protestations and denials by the monetary authorities to the contrary.
You will also notice that the job situation in the Euro zone is not particularly healthy, meaning wages are flat over there as well. The pundits constantly refer to this fact when they assure us that inflation is manageable. Excuse me to differ; yes – upward pressures on wages are non-existent but that does little to soothe the problems of the average citizen who are watching the cost of the essentials of life moving higher as his or her wages go nowhere. Translation – more of the disposable income of the consumer is forced to pay for the necessities of life leaving less for discretionary spending. Oil’s first foray above the $91 level already has seen the headlines trumpet the charge: “OIL PRICE ‘ENTERS DANGER ZONE’”. Wait until gasoline enters its peak demand season later this year!
The monetary authorities are playing a very dangerous game in attempting to stoke the fires of inflation to ward off the icy fears of deflation. By beating back the latter and seeking to generate “growth”, they may find their creation not so compliant and manageable as they might believe.
Perhaps there are some marching orders given to the primary dealers to see what can be done about those pesky commodity markets.

Inflation Jumps in Europe 

MATTHEW SALTMARSH, On Tuesday January 4, 2011, 7:01 am EST
PARIS — Higher prices for food, oil and other commodities are starting to stoke inflation in the euro area, data released Tuesday indicated, while British residents got their first taste of higher taxes on retail goods and services.
Annual inflation in the euro area jumped to 2.2 percent in December from 1.9 percent in November, according to an initial estimate from Eurostat, the European Union’s statistics agency.
The release was significant because it means that inflation has breached the European Central Bank’s target of just below 2 percent for the first time since November 2008.
The data “will probably raise some eyebrows at the E.C.B.,” said Martin van Vliet, economist at the Dutch bank ING.
The central bank has kept its benchmark rate at a record low 1 percent since May 2009, and has used a massive asset purchasing and bank lending program to try to bolster the recovery. So far those efforts have not proved inflationary, offset by moribund consumer activity in some countries and high unemployment.
Analysts had expected a rise in inflation to 2 percent, since recent national inflation reports from Spain and Germany have pointed to price pressures.
The increase was almost certainly driven by the recent run-up in commodity and energy prices and higher food prices, analysts said. On Tuesday, light, sweet crude oil for February delivery rose 4 cents in pre-market trading on the New York Mercantile exchange to $91.60 a barrel. That contract has climbed almost 6 percent since early December.
“With the rise in agricultural commodity prices yet to fully feed through into consumer food prices, headline inflation is likely to remain under some upward pressure in the next few months,” Mr. van Vliet said.
But he added that core inflation, excluding food, energy, alcohol, and tobacco probably remains around 1 percent, confirming that underlying price pressures in the euro-zone are subdued.
More…

 

Jim’s Mailbox

Posted: Jan 05 2011     By: Jim Sinclair      Post Edited: January 5, 2011 at 10:39 am
Filed under: Jim's Mailbox

It Doesn’t Take Much 

CIGA Eric

Beat the grass to startle the snakes. It’s doesn’t take much.
Fear and doubt interspersed with a lot of arm waving will scatter the weak hands faster than a loud knock at the door at an underage party. This is only reinforced by the fact that today’s sell-off was orchestrated on the same day as Fed’s communiqué revealed that QE2 was needed to avert another economic heart attack. May I ask what fundamental factors will be driving the dollar higher other than a mathematical manifestation of the least offensive pile of manure? Correction or time to buy? Those still seeking an answer have no chance of being in the trend towards the end.
Headline: Gold Prices: Correction or Time to Buy?
Gold prices were hammered as early morning profit taking triggered afternoon sell stops, forcing traders to exit positions to lock in gains.
Bargain hunters were then reluctant to try to catch gold’s falling knife, choosing instead to wait for prices to bottom out before buying more.
Gold prices breached but then bounced slightly higher from the 50-day moving average of $1,377 an ounce. Typically gold has moved higher from that area of support. If that level is breached, prices will have to look to the 200-day moving average of $1,265 an ounce.
Source: finance.yahoo.com
Headline: Fed minutes: Economy needs bond-buying program
Federal Reserve officials stuck with the pace of their $600 billion Treasury bond-buying program last month because the economy wasn’t improving fast enough to make a noticeable dent in unemployment.
Spending by consumers and businesses had improved heading into the final month of 2010, and Congress was on the verge of enacting a tax-cut package that would bolster the economy, Fed officials said. That made them more confident the economic recovery would gain momentum, according to minutes of the Fed’s closed door meeting on Dec. 14.
Source: finance.yahoo.com
More…