Silver bars likely to be gone within days, dealer tells King World News

 

Money's not worth paper it's printed on, China Investment Corp. exec says

 

Chinese rating agency blames U.S. for debt-depreciating 'credit war'

 

Gold's fundamentals unchanged, debt must be written off, Rickards tells King World News

 

Substantial Future Home Price Declines Predicted By Goldman Sachs And Peak Theories

 

Guest Post: The Big Squeeze, Part 2: Abused Fundamentals And Fake Markets: How They Play Out

 

Quant Wipeout In Process?

Europe Considering Extending Greek, Irish Bailout Loan Duration From 3 To 30 Years

Gold Flash Smash

Submitted by Tyler Durden on 01/28/2011 11:50 -0500

Gold is the only asset that takes the escalator down and the express elevator up. Incidentally, the 3% surge in WTI was predicted by Zero Hedge yesterday on what is completely common-sensical assumptions. What kind of idiots are running this market if someone is surprised by what is happening today?

Suez Canal Closure Concerns Go Viral

Submitted by Tyler Durden on 01/28/2011 12:38 -0500

Shockingly, the "pundits" have suddenly realized that courtesy of the upheaval in Suez, the canal with the same name may be closed, which would wreak havoc on shipping costs. Once again, Zero Hedge was just ahead of the curve: "Egyptian Stock Market Plunges Over 11% To Fresh Multi-Year Lows; Is A Suez Canal Transit Halt Imminent?" The just announced countrywide curfew will not make Suez Canal operability any easier. For those who are concerned about what a Suez closure means, we recreate what we wrote previously on the topic. And just in from Reuters, Energy Secretary Steven Chu has declined to say if he is worried Egypt protests may disrupt Mid-East oil, but believes that serious disruptions will have oil prices. By harm he means make them surge higher. 

 

 

 

In The News Today

Posted: Jan 28 2011     By: Jim Sinclair      Post Edited: January 28, 2011 at 1:33 pm
Filed under: In The News

Jim Sinclair’s Commentary
Egypt has shut down both internet and cell phone access amidst protests. The fact that the US also has the ability to do the same is frightening.
This possibility makes the ownership of direct satellite phones most inviting. I am re-installing my Motorola radio system that I have used in the past to keep lines of communication open to my office in the old non-tech world.

Egypt Withdraws From Internet After Protesters Take to Streets By Jonathan Browning – Jan 28, 2011 8:41 AM PT
Egypt, which has one of the most advanced telecommunications markets in the Middle East and Africa, “withdrew” from the Internet, after Egyptian authorities shut connections to the outside world.
Internet traffic volumes into and out of Egypt slumped at about 12:20 a.m. Egyptian time today, according to Internet security company Arbor Networks. Mobile-phone services run by local units of Vodafone Group Plc and France Telecom SA were also halted.
“Rather abruptly, in a coordinated fashion, all of the major Internet providers that have traffic in and out of Egypt basically withdrew from the Internet,” said Craig Labovitz, chief scientist at Arbor Networks.
Egyptian authorities shut the connections after anti- government demonstrators took to the streets inspired by an uprising that ousted Tunisian President Zine El Abidine Ben Ali on Jan. 14. Internet traffic volumes slumped at about 12:20 a.m Egyptian time today, Arbor Networks said. The Egyptian authorities couldn’t immediately be reached for comment.
Vodafone said it was ordered to suspend mobile-phone services in selected areas. “Under Egyptian legislation, the authorities have the right to issue such an order and we are obliged to comply with it,” Vodafone said in an e-mailed statement. “All mobile operators in Egypt have been instructed to suspend services in selected areas.”
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Jim Sinclair’s Commentary
Of sorts, yes!

Russia Moving to Gold Standard? Written by Christian Gomez
Friday, 28 January 2011 11:24
With the value of the U.S. dollar exponentially declining since the establishment of the Federal Reserve Bank in 1913, it comes as no surprise that many world leaders and international economists have expressed their desire for a new world reserve currency. In light of the global financial crisis, Russia may be moving toward a sound economic solution — gold.
On Monday, January 24, the First Deputy Chairman Georgy Luntovsky of the Central Bank of Russia (CBR), announced plans to purchase over 100 metric tons of gold every year — increasing the bank’s gold reserves by 13 percent in 2011.
Last year alone, the CBR expanded its gold holdings by 23.9 percent to 790 tons. Why the sudden increase? “The current set of reserve currencies and the main reserve currency — the U.S. dollar — have failed to function as they should,” Russian President Dmitry Medvedev told a Shanghai Cooperation Organization summit on June 16, 2009, adding that he would like to see the Russian ruble become a global reserve currency.
Medvedev’s desire for the ruble to be a global reserve currency, or part of a new economic world order, may not be the only reason for the sudden gold increase. With the signing of the Customs Union treaty last month, the leaders of Russia, Belarus, and Kazakhstan agreed to establish a free-trade zone among themselves with a common currency. The Customs Union — set go into effect on January 1, 2012 — has been regarded as the economic restoration of the Soviet Union.
A new gold ruble could serve as the basis for a common currency between the three old Soviet republics, much as the former Soviet ruble once was.
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Jim Sinclair’s Commentary
I have told you that farming was the greatest opportunity in Tanzania.
Tanzania is recognized as the greatest opportunity in Africa. This article tends to underscore that.

DAVOS-Firms seek to up food output to counter more unrest Fri Jan 28, 2011 5:27pm GMT
By Emma Thomasson
DAVOS, Switzerland, Jan 28 (Reuters) – Some of the world’s top firms agreed on Friday to invest in agriculture projects in Tanzania and Vietnam, warning of more unrest in the developing world if food production does not keep pace with population growth.
Business leaders announced a plan at a news conference at the World Economic Forum (WEF) to increase food production by 20 percent, while cutting greenhouse gas emissions by 20 percent and reducing rural poverty by 20 percent in a decade.
"This is timely given the news of continued rises in crop prices," said Hugh Grant, chief executive of Monsanto (MON.N), the world’s biggest seeds company.
"The expectation is that by 2050 we will have to double the amount of food that our little planet produces.
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Jim Sinclair’s Commentary
States will go broke.

Moody’s to Include Unfunded State Pension Liabilities, NYT Says By James Kraus – Jan 27, 2011 1:17 AM ET
Moody’s Investgors Service plans to include unfunded pension liabilities into its credit rating for U.S. states’ debt, the New York Times reported, citing Robert Kurtter, managing director for public finance at Moody’s.
States haven’t included those liabilities until now, prompting growing unease among investors in municipal bonds, the newspaper said.
The new system will be comparable to the way Moody’s now rates corporate and sovereign debt, the newspaper said. States with the highest total indebtedness include Connecticut, Hawaii, Illinois, Kentucky, Massachusetts, Mississippi, New Jersey and Rhode Island, as well as Puerto Rico, the Times reported.
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Jim Sinclair’s Commentary
The ideas that a spread financed at $10,000,000 can control the total production of gold from South Africa shows you the madness of credit, debt and markets now.

Huge U.S. gold position liquidated by fund-WSJ LONDON | Fri Jan 28, 2011 5:44am EST
LONDON Jan 28 (Reuters) – Hedge fund SHK Asset Management liquidated a U.S. gold futures position this week valued at over $850 million, more than 10 percent of the main U.S. futures market, the Wall Street Journal reported on Friday.
As a result of the move, which was made on Monday, the number of gold contracts on CME Group Inc.’s Comex division plunged by more than 81,000, to about 500,000, in their biggest single fall ever, the WSJ reported. It said an average daily move is about 3,000 to 5,000 contracts.
Daniel Shak, who runs the $10 million fund, told the newspaper that the trade had been profitable for him for years, but it stopped working and the exchange kept raising his margin requirements, forcing him to put up more money.
Shak said that when the exchange raised it by 25 percent on Monday, he decided to cut his losses and end the trade, the newspaper said.
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Jim Sinclair’s Commentary
This period is more degraded than that of Sodom and Gomorrah. Pompei was kindergarten compared to the sociopaths of Wall Street.
The problem is that the present day demons own the place. Who need enemies when you investment bankers.

Wall Street Rocket Scientists Revive CDOs in Derivatives Battle 2011-01-28 00:01:00.10 GMT
By Simon Clark and Elisa Martinuzzi
The U.K. is losing about 38 billion pounds ($61 billion) a year to fraud, with the finance industry bearing the largest loss in the private sector of 3.6 billion pounds, the government said.
The financial-services industry in the U.K., which saw a 14 percent increase in online-banking fraud, is losing 1 billion pounds a year to mortgage fraud and 2.1 billion to insurance scams, the National Fraud Authority, a unit of the U.K. Attorney General’s office, said in a statement yesterday.
The public sector is losing 21 billion pounds to fraud, and the private sector loses an estimated 12 billion pounds, according to the NFA. Fraud costs individuals another 4 billion pounds a year and charities 1.3 billion pounds, it said.
The estimate “shows that 55 percent of fraud — a massive 21 billion pounds — is committed against the public sector,” Francis Maude, a minister for the Cabinet Office, said in the statement. “Ripping off the taxpayer will not be tolerated.”
The Serious Fraud Office, which prosecutes complex fraud and white-collar crime in the U.K., said in a separate statement yesterday that it has achieved an 80 percent conviction rate in its cases since April last year, and has 103 open cases.
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Jim Sinclair’s Commentary
CIGA Green Hornet submits this as an example of brain surgeons at work in Finance.

Fitch downgrades Egypt outlook to negative By TAREK EL-TABLAWY – Jan 28, 2011 10:36 AM ET
By The Associated Press
CAIRO (AP) — Fitch Rating on Friday revised down its outlook for Egypt, dropping it to "negative" as mass protests in the country turned violent, engulfing the capital and other cities in the most serious challenge to President Hosni Mubarak’s regime in years.
Fitch said it was holding steady Egypt’s other ratings, including its long-term foreign currency issuer default rating, which was held at the investment grade BB+.
"The Outlook revision reflects the recent upsurge in political protests and the uncertainty this adds to the political and economic outlook ahead of September’s elections," said Richard Fox, head of Fitch’s Middle East and Africa Sovereign Ratings. Egypt is slated to hold presidential elections in the fall.
The revision came after the Egyptian stock exchange’s benchmark EGX30 plummeted about 17 percent in two days, a drop fueled by investor panic over Tunisia-inspired protests that erupted Tuesday in the Arab world’s most populous nation. The demonstrations have focused on the economic disparity in the country, spiraling food prices and the grinding poverty that afflicts nearly 40 percent of Egypt’s 80 million people.
Analysts have downplayed the likelihood that President Hosni Mubarak’s regime would be ousted as a result of the protests. But the mass rallies in which tens of thousands have clashed with riot police have pushed to the surface latent concerns about Egypt and raised questions about the economic impact on the country.
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