Thomas Kaplan: Brace for a 'perfect storm' in gold

 

International Forecaster January 2011 (#6) - Gold, Silver, Economy + More

 

Total Global Debt Has To Double To Over $200 Trillion By 2020 To Preserve Economic Growth

 

Russell 2000 Is Down... No, This Is Not An April Fool's Joke

Submitted by Tyler Durden on 01/19/2011 15:06 -0500

Sorry but this is really worth a post. The last time the market actually dipped more than 0.001% was on November 26, as such this is a historic event (in a country whose attention span is +/- about 15 minutes). The Russell 2000, which his Chairness indicated is the only metric tracked by the Fed's third mandate is down. And since the Fed controls (insert best Tepper voice) everything, this can only indicate that the Bernank is finally starting to get concerned about those food riots he has been reading all about in assorted fringe blogs.

Fitch Finds US Worst Of The AAA-Rated Best, Sees QE2 As Stoking Inflation Expectations

In The News Today

Posted: Jan 19 2011     By: Jim Sinclair      Post Edited: January 19, 2011 at 1:36 pm
Filed under: In The News

Dear CIGAs,
Today a significant amount of deals have been announced between US interests and China.
The majority, if not all of these deals, were in place prior to the meeting of the Administration and President Hu.
The deals announced today were for big ticket items like aircraft and machinery. You do not make that in one day.
Do you have any idea how long it takes to make a deal in China?

Jim Sinclair’s Commentary
It is not Mr. William’s one liners that are the meat of the matter. It is his in depth explanation of the present and his view of the future.
Housing Starts Collapse Accelerates Anew, Down an Annualized 30% in 4th- versus 3rd-Quarter
"No. 346: December Housing Starts"
Web-page: http://www.shadowstats.com?p=636

Jim Sinclair’s Commentary
Not buying is one thing, cutting is another and extremely serious.

China cuts Treasury holdings in November By Chris Oliver
Jan. 18, 2011, 10:59 p.m. EST
HONG KONG (MarketWatch) — China cut its holding of U.S. Treasurys in November by $23 billion, though its overall holdings remained the largest of any foreign nation at $895.6 billion, according to data released Tuesday by the Treasury Department. The decline followed net purchases by China of more than $23 billion in October, which lifted its holdings $906.8 billion, the highest level since November 2009, according to data contained in the monthly Treasury International Capital report.
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Jim’s Mailbox

Posted: Jan 19 2011     By: Jim Sinclair      Post Edited: January 19, 2011 at 12:59 pm
Filed under: Jim's Mailbox

QE1 and QE2 Not Helping Real Estate CIGA Eric
2010 was not only the second worst year for home construction in half a century, it also occurred during an aggressively-hyped economic recovery. What does extreme weakness despite the economic recovery reveal about the state of real estate?
It suggests that real estate is weak and the liquidity-driven recovery of QE1 and QE is not helping.
Housing starts and building permits saw their upside momentum broken in 2009 and 2010, respectively.
Housing Starts And Change YOY:
Building Permits And Change YOY:
New home sales, while show signs of bottom bouncing recently, establish new all-time lows in 2010.
New Home Sales And Change YOY, SA:
Falling “real” or constant currency prices, continues to be the real shocker to household net worth. Real median home prices continue to decline and remain firmly entrenched within the aggressive downtrend established 2005.
Median Home Price to Gold Ratio (MHPGOLDR) And YOY Change:
A quick review of the credit and loan creation suggests why real estate continues to struggle. The number correspond to labels within the table enclosed below,
(1) Total loan and lease creation as a percentage of total credit peaked in December 2008. This represents the point from which derivatives, securitization, and leverage, i.e. the great credit machine emanating from New York began its great decay.
(2) Real estate loans are not only contracting but also encompassing an increasingly smaller percentage of total credit created since late 2009. Real estate loan as a percentage of total credit has fallen to 39% in December 2010. This is the second lowest percentage reading since the onset of the crisis in 2008; the lowest reading was recorded in November 2010.
(3) Home equity loans, a loan sold on the plateau of prosperity in real estate, began to roll over in early 2010 as a combination of declining access to credit, rising unemployment, and illiquidity strangled household finances. The rate of deterioration began to accelerate as 2010 progressed.
(4) Residential loans (closed-end mortgages), once a steady and consistent sub sector, began to chop and waffle 2010. This sub sector ‘wants’ roll over, but there’s a lot officially-sponsored liquidity propping it up. This is a politically sensitive loan series.
(5) The forces pushing residential closed-end loans can be seen in commercial real estate sub sector. These loans, as large and influential to credit creation as residential, began their aggressive deterioration in late 2009. The increased rate of deterioration into year’s end suggests that this could be a problem spot in 2011.
(6) Consumer loans, while not as influential as business or real estate loans in terms influence on total credit creation; nevertheless, provide a glimpse to the state of the US consumer. While consumer loans continue to expand after a record year in 2010, they have begun a slow decay since the spring of 2010. This subtle weakness bares close attention in 2011. The mantra of “never underestimate the strength of the US consumer” over the years has trained many to assume that spending and borrowing have no limits. History suggests that this is a false assumption.
Total Bank Credit Table for All US Commercial Bank:
Headline: 2010 ends as 2nd worst year for home construction
Builders began work last year on the second fewest number of homes in more than half a century, as the weak economy kept people from buying houses.
Builders broke ground on a total of 587,600 homes in 2010, just barely better than the 554,000 started in 2009. Those are the two worst years on records dating back to 1959.
And the pace is getting worse. The Commerce Department says builders started work at a seasonally adjusted annual rate of 529,000 new homes and apartments last month, a drop of 4.3 percent from November.
Source: finance.yahoo.com
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Defining Economics