Monday, February 28, 2011

China Forced To Deny It Will Experience HYPERinflation In 2011, As Russia Unexpectedly Hikes Interest Rates

And now for this evening's stunner, via Dow Jones. "There won't be hyperinflation in China this year, the state-run China Securities Journal reported Tuesday, citing Yao Jingyuan, the chief economist of the National Bureau of Statistics. The abundant stocks of grains and main agricultural products in China are key factors in stabilizing consumer prices, the newspaper quoted Yao as saying. China's consumer price index rose 4.9% in January from a year earlier, picking up from December's 4.6%." So putting aside what official denial means about the validity of a story, not to mention this utterly bizzare and completely out of left field statement, China's best and only reason why it won't have hyperinflation is that it has "abundant stocks of grains and agricultural products."... We can, at best, hope that this has to be some early version of an April Fool's joke, or else things are truly far worse than anyone expected. Also, just where does China put the threshold cut off on "hyper" - 10%? 20%? 50%? Is it at least safe to say that China may well experience mega, turbo, or nitrous inflation (and we generously put all three terms to the left of "hyper" on the X-axis)? 
Celente:  "When the Money Stops Flowing Down to the Man in the Street, the Blood Starts Flowing in the Streets"  

China's Holding of US Debt Jumps 30% 

Dollar's safe-haven status hangs in the balance


Prospective Homebuyers: Time Is on Your Side

GoldSeek Radio interviews GATA Chairman Murphy, GoldMoney's Turk


US Military Counter-Libya Preparation Update: USS Enterprise Now Back In Mediterranean

Earlier today, we reported that the US military is in the process of repositioning its forces in the area around Libya "to be able to provide flexibility and options." And while we have yet to get an updated US naval map for this week (the last one can be found here), it appears that the USS Enterprise which was previously on its way to the Straits of Hormuz has made a 180 and has now backtracked completely through the Red Sea and is now once again north of the Suez, where it has joined the big deck amphibious warfare ship Kearsarge. This means that the USS Vinson is again left alone to protect the highly combustible gulf region, which now includes both Bahrain and Oman, in addition to Yemen and of course Iran and Saudi, on revolutionary watch. It may be time to send Abraham Lincoln, which in turn is patrolling the South China Sea, back to the Persian Gulf as the possibility of a flashpoint escalation there is far greater than around Indonesia (which however would leave all of Korea and China unguarded). Keep an eye out on CVN 74 and 76 - Stennis and Reagan. If those two start making a move west, then next steps can be extrapolated quite easily. 
Harvey Organ 2-28-11

Silver deliveries 21.25 million oz/Civil war intensifies in Libya


Jim Rogers: "Saudi Arabia Is Lying About Being Able To Increase Its Oil Production"

Jim Rogers joins Zero Hedge in being highly skeptical about just how credible Saudi's call for a 1MM + boost in its oil supply is: "Saudi Arabia has been lying about the reserves for decades. Saudi Arabia the last two times said they are going to increase production and they couldn't increase production. Don't fall for that. The reason oil is going up is the world is running out of known reserves of oil." Of course, then there is the question of do we trust the Quantum fund creator who retired at 37, or do we go with the sellside lemming brigade of monkeys with typewriters who will groupthink anything and everything to death, just to get paid another completely unwarranted bonus. As to those who are concerned that the commodity "bubble" is about to pop, Rogers says: "It's still years away." And some reinforcement for the gold and silver bulls: "Gold will certainly go over $2,000 by the end of the decade, and silver will pass $50." And as a hedge to his great commodity bull market call, Rogers continues to be short Nasdaq stocks. His thesis: "If the economy gets better I am going to make money in commodities, if it doesn't get better, I am going to make money in commodities cause they are going to print huge amounts of money." Call it the adjusted Tepper call. 

Chinese Treasury Holdings Revised $268 Billion Higher To $1.12 Trillion, Fed Still Top Holder Of US Debt


How Ireland Can Leave The Euro: One Expert's View


The Calm Before the Storm

Are You Prepared For a Food Shortage?

I will post more as they become available...

Food Shortage Series Part 1


Food Shortage Series Part II


Food Shortage Series Part III


Paul Krugman (Nobel prize-winning Princeton economist) recently spoke to students at The University of Oklahoma.  The local paper had a very short article about his speech. The last line in the article sums it up pretty well: “We’re eating our seed corn,” he said. “We are very far from being over the financial crisis.”

What You Need To Know About Buying Silver Today

Gold $2,300, Silver $150 and Looming Stock Market Crash  


Gold coiled, hyperinflation possible, Davies tells King World News


Today's Precious Metal Close Banging Moment Brought By The Fine People At The Comex

It's 1:30 pm, the close of trading on the COMEX pit: do you know who is banging the close in your silver? Silver pits close at 1:25 pm, just as the flood in silver peaked. Gold followed suit, with its 1:30 pm close. This blatant attempt to dump PMs into the pit close and have silver and gold end trading on the books near the lows of the day merely confirms that "someone" is truly desperate to avoid an avalanche of margin calls. Of course, this uber-cheap trick works at best for a day or two. 

After $456 Billion In Treasury Monetizations Since The Start QE Lite, A Half-Time POMO Summary

Now that the Fed is by far the biggest institutional holder of US debt, it is time to conduct a periodic review of what, how and when Brian Sack has been monetizing in the past two years. As a reminder, as part of QE1, the Fed purchased $300 billion worth of Treasurys, the balance going to MBS and agency securities. QE Lite and 2 have, so far, focused only on USTs: as Morgan Stanley summarizes, as of today, the NY Fed has purchased a total of $456bn Treasuries / TIPS since August 10, or the announcement of QE Lite. Since additional LSAPs were announced in November (or QE 2 proper), the Fed has purchased $380bn. As the Fed is now roughly half completed with QE2, here is where we stand. 

Simon Black: "The Market Is Telling Us That The Dollar Is Finished"

There’s major shift occurring right now in financial markets. Sure, the food and freedom riots that are spreading across the globe are a major indicator that civil unrest follows very closely behind resource shortages and economic turmoil… but there’s something else that I’ve noticed recently– it’s a sea change in the financial system. In the past, major crises normally caused investors to seek safe haven assets, and everything else equal, the dollar would rise. They call it a ‘flight to safety’, and investors would flock towards the perceived stability of US Treasury securities. Fast forward to today. Mubarak. Gaddafi. Khalifa. Al Said. Ben Ali. Etc. There is no shortage of turmoil right now… yet we are seeing the dollar get clobbered while gold, silver, and smaller currencies like the Swiss franc rise. This represents a major shift in the way that the market views risk. Ironically, this makes precious metals among the most attractive safe haven alternatives– the fact that they have no real functional value is a net positive. In other words, $20 wheat means blood in the streets. $2,000 gold only makes for pithy headlines, and its significance is easily dismissed when highly regarded sages like Warren Buffet dispute the notion of holding precious metals (nevermind he bought oodles of silver in the late 90s). 

CME Preempts NYSE Treasury Derivative Trading, Offers 65% Margin-Reducing Treasury Trading Solution


Primary Dealers Violently Expel Just Auctioned Off Three Year Bond, As Fed Monetizes Over Half PD Holdings In Under Two Weeks


Posted: Feb 28 2011     By: Greg Hunter      Post Edited: February 28, 2011 at 1:42 pm
Filed under:
By Greg Hunter’s

Dear CIGAs,
Looking around the Middle East you can find turmoil and conflict almost everywhere you turn.  Morocco, Tunisia, Libya, Yemen, Bahrain, Jordan, Syria, Oman and Egypt have all been caught up in a fire storm of anti-government protests.  Some appear to be mostly peaceful, such as the pro-democracy movement in Egypt; and some are descending into bloody civil conflict, such as Libya.  The multiple revolutions unfolding in the Middle East are really just getting started.  Even in the Kingdom of Saudi Arabia, the smell of revolution is in the air and on the Internet.  Organizers in the Kingdom are calling for “DAY OF RAGE.”  Saudi King Abdullah is so worried he recently announced $37 billion dollars in subsidies and giveaways.  That’s enough to pay everybody in Saudi Arabia around $1,500 each.  Some look at it as a bribe to encourage citizens not to protest.  (Click here to read more.)  If Saudi Arabia falls, war will surely follow.
This changing of the guard across the Middle East will be much more impactful to the rest of the world than the fall of the Berlin Wall.  The main reason is oil.  The Middle East produces most of the world’s petroleum.  If supplies are curtailed and shipping lanes are cut, the world could plunge into economic ruin.
It took a little more than 2 years after the fall of the Berlin Wall to collapse the Soviet Union.  I look for the same pace of change in the Middle East.  The first domino to fall was tiny Tunisia, followed by mighty Egypt with a population of more than 80 million.  Egypt has an up-to-date army outfitted with the latest U.S. made weapons.  After Egyptian President Hosni Mubarak stepped down, the military took control of the country. A writer at recently described the fall of Mubarak this way, “I wish I could be there today, in solidarity with the thousands of young and old Egyptians, to celebrate the demise of his dreadful regime. But what we are witnessing is more than the end of a government — it is nothing less than the birth of a new liberal order in Egypt. And that’s not only good news for the beleaguered citizens of Egypt, but also the United States and Israel.”

Sunday, February 27, 2011

Marc Faber: "I Think We Are All Doomed"

All who enjoy hearing a meaty Marc Faber fire and brimstone sermon, that cuts through the bullshit, will be happy to know that the Gloom, Boom and Doom author conducted a 40 minute interview with the McAlvany Financial Group, which covers all the usual suspects: gold, silver, precious and industrial metals, the "crack up boom", the future of the Ponzi and capital markets in general and much more. Of course, it wouldn't be a Faber interview without the requisite soundbite: "I think we are all doomed. I think what will happen is that we are in the midst of a kind of a crack-up boom that is not sustainable, that eventually the economy will deteriorate, that there will be more money-printing, and then you have inflation, and a poor economy, an extreme form of stagflation, and, eventually, in that situation, countries go to war, and, as a whole, derivatives, the market, and everything will collapse, and like a computer when it crashes, you will have to reboot it." Of course, on a long enough timeline...

A Look At Events In The Week Ahead: Global PMIs, US Payrolls And Middle East Deterioration


Egypt Bans Export Of Gold "In Any Form"


Rate Of Spread Between GBP And JPY Spec Bets Cut In Half, And Other Commitment Of Trader Observations


Technical Observations On An Extremely Overbought Market With 123 Consecutive Closes Above The 55 DMA


The Not So Funny Funnies...

Silver ishares SLV Anomolies Part 4- Guest post Video



Market Crash 2011: It will hit by Christmas.

The End of the US Dollar?

Silver Train is a Comin', are You on Board? 

Prepare to Give Up All Private Data for Any Gold Purchase Over $100

Why I'm Buying Silver at $30

Guest Post: Analysis of the Global Insurrection Against Neo-Liberal Economic Domination and the Coming American Rebellion

Join The MovementIn previous Revolution Roundups, before we were knocked offline, we featured mass protests by the people of Ireland, Italy, Britain, Austria, Greece, France and Portugal, as the Global Insurrection contagion spread throughout Europe. And now, as we have seen over the past month, North African and Middle Eastern nations have joined the movement as the people of Egypt, Tunisia, Jordan, Morocco, Gabon, Mauritania, Yemen, Bahrain, Libya, Palestine, Iraq, Sudan and Algeria have taken to the streets en masse. The connection between this latest round of uprisings and the prior protests throughout Europe is one the mainstream media is not making. We are witnessing a decentralized global rebellion against Neo-Liberal economic imperialism. While each national uprising has its own internal characteristics, each one, at its core, is about the rising costs of living and lack of financial opportunity and security. Throughout the world the situation is the same: increasing levels of unemployment and poverty, as price inflation on food and basic necessities is soaring...The global banking cartel, centered at the IMF, World Bank and Federal Reserve, have paid off politicians and dictators the world over — from Washington to Greece to Egypt. In country after country, they have looted national economies at the expense of local populations, consolidating wealth in unprecedented fashion – the top economic one-tenth of one percent is currently holding over $40 trillion in investible wealth, not counting an equally significant amount of wealth hidden in offshore accounts. IMF imperial operations designed to extract wealth and suppress populations have been ongoing for decades. As anyone researching economic imperialism will know, a centrally planned Neo-Liberal aristocracy controls the global economy. 

Civil War Breaks Out In Tripoli


First Peaceful European Revolt, As Irish Tsunami Ends 60 Years Of Fianna Fail Rule Following Banker Bailout Fury


Irish Remedy for Hard Times: Leaving

A new age of uncertainty: Why Arab turmoil could mean an orgy of bloodletting and rocketing oil prices rather than a Utopian world order.

U.S. crop boom not enough to rebuild thin supplies.

State and Local Budget Cuts are Slowing US Economy 

Saturday, February 26, 2011

Rumors swirling: The U.S. gov't is planning to confiscate gold
Controversial report reveals the tricky way they could do it... 

These are the 12 riskiest countries in the world today
Includes the country most likely to go "belly up." 

posted by Trader Dan at Trader Dan's Market Views - 4 hours ago
The following chart details this ratio from which one can determine the performance of the gold shares in general against the price of the actual metal. It was in 2006 when I believe that the hedge fund wo...

posted by Trader Dan at Trader Dan's Market Views - 5 hours ago
Following are some price charts of the US Dollar to give an overview of where it stands from a technical analysis perspective. We will look at all three major time frames, the daily, weekly and monthly as ...

posted by Turd Ferguson at Along The Watchtower - 2 hours ago
First of all, here are your charts to ponder over the weekend. The CRB made its seventh, consecutive higher weekly close yesterday. Again, your house may be going down in value and the banks may be insolve...

posted by Turd Ferguson at Along The Watchtower - 9 hours ago
Its early Saturday am in the US. Reader Eric posted this link in the comments section of last night's thread and several other readers suggested that I link to it here so that everyone will be encouraged t...

Protests Spread To Vietnam

After protests recently shifted to Korea, they have now migrated to very tightly controlled Vietnam (and some were wondering what the reason for the orchestrated take down of rice in the past week was), in the first public demonstration by unhappy farmer against the controlling regime in many years. In the meantime, as the media blackout over developments in Korea, Bahrain and just as importantly Algeria continues (not to mention China), keeping in mind that as Nomura predicted, a shut down in Algerian and Libyan oil production is all that is needed for crude to hit $220, we now look forward to Venezuela to join the revolutionary ranks, with the culmination being when Afghanistan and Pakistan, and associated nukes, go in play.

Will AIG Implosion 2.0 Lead To QE 3.0?

There was a time when everyone thought CDOs are perfectly safe. That ended up being a tad incorrect. It resulted in AIG blowing up, recording hundreds of billions in losses and almost taking the rest of the financial world with it, leading ultimately to the first iteration of quantitative easing. A few years thereafter, several blogs and fringe elements suggested that munis are the next major cataclysm and will likely require Fed bail outs (some time before Meredith Whitney came on the public scene with her apocalyptic call). It would be only fitting that the same AIG that blew up the world the first time around, end up being the same company that does so in 2011, and with an instrument that just like back then only an occasional voice warned is a weapon of mass destruction: municipal bonds. AIG dropped over 6% today following some very unpleasasnt disclosures about its muni outlook, and corporate liquidity implications arising therefrom: "American International Group Inc., the bailed-out insurer, said it faces increased risk of losses on its $46.6 billion municipal bond portfolio and that defaults could pressure the company’s liquidity." So how long before we discover that Goldman has been lifting every AIG CDS for the past quarter? And how much longer after that until someone leaks a document that the company's muni strategy was orchestrated by one Joe Cassano?

Must Read...Harvey Organ 2-26-11

Gold and silver Repel Raid/Balance Sheet of Fed Balloons/Libya oil stops as civil war approaches


Paper metals markets will blow up, Rickards tells King World News


Haynes and Norcini review metals' week at King World News


Dollar precarious, silver backwardation grows, gold explosive, Turk says


Posted: Feb 25 2011     By: Jim Sinclair      Post Edited: February 25, 2011 at 9:12 pm
Filed under: General Editorial

Dear Friends,
Between now and Monday, February 28th be prepared for panicked short sellers who cannot make delivery to try every trick in the book to buy back their short positions.
The following is information from Dr. Jim Decosta:

Here is the URL:

Quote: There’s 3 new laws gaining attention in the NSS market reform arena: FINRA 4320 goes into effect on 2/28/11. It mandates 13 day buy-ins for open delivery failures FINALLY applying to shares of non-reporting corporations. FINRA 2010-043, also starting on 2/28/11 reinstates the “short sale exempt” (SSE) marking requirements for trade reporting and the OATS system. Those MMs accessing the bona fide MM exemption from executing pre-borrows or “locates” before admittedly naked short sales must now FORMALLY acknowledge the accessing of that universally-abused exemption. Being that these trades are theoretically being made to “inject liquidity” then the excuse to hide the related trade data from the public’s eyes goes out the window. You can’t have it both ways and claim the bona fide MM exemption and later claim that the related trade data needs to be kept secret because it might reveal a “proprietary trading strategy”.

Truly bona fide MMs that are able to legally access that universally-abused exemption cover their naked short position on the next downtick after their short sale when buy side liquidity is in need of being ejected as share prices fall. The 3rd new rule which is in effect now states that the offers and bids that MMs post must be of approximately the same size. No longer can the offers be of 1 million shares and the offsetting bid good for the minimum 5,000 shares.

The verbiage in 4320 is especially well done as it FINALLY puts the clearing firms that aid and abet this crime wave on the spot. With the FFETF, which is made up of 25 different agencies, now on the scene the transparency has increased markedly. You can imagine how critical the lack of transparency is to a crime involving selling nonexistent securities and then refusing to ever deliver that which you sold AFTER being allowed access to the funds of the investor being defrauded.

Here are the links to the rules SR-FINRA-2010-028 and SR-FINRA-2010-043:

Notice the part I marked in bold in the quote above: 
"FINRA 4320 goes into effect on 2/28/11. It mandates 13 day buy-ins for open delivery failures FINALLY applying to shares of non-reporting corporations."

Booms, Busts, and Food Prices

The Well-Traveled Funds of Fed Money Creation

Friday, February 25, 2011

BIG silver NEWS

Heard from an undisclosed source. The OI decline was NOT from cash settlements. The 30-50% cash premiums were a rumor. Break the COMEX is STILL on! No bullshit here.

More to come...

Still waiting for the mean time this is a must watch, get ready to laugh

Posted: Feb 25 2011     By: Jim Sinclair      Post Edited: February 25, 2011 at 9:12 pm
Filed under: General Editorial

Dear Friends,
Between now and Monday, February 28th be prepared for panicked short sellers who cannot make delivery to try every trick in the book to buy back their short positions.

The following is information from Dr. Jim Decosta:
Here is the URL:
Quote: There’s 3 new laws gaining attention in the NSS market reform arena: FINRA 4320 goes into effect on 2/28/11. It mandates 13 day buy-ins for open delivery failures FINALLY applying to shares of non-reporting corporations. FINRA 2010-043, also starting on 2/28/11 reinstates the “short sale exempt” (SSE) marking requirements for trade reporting and the OATS system. Those MMs accessing the bona fide MM exemption from executing pre-borrows or “locates” before admittedly naked short sales must now FORMALLY acknowledge the accessing of that universally-abused exemption. Being that these trades are theoretically being made to “inject liquidity” then the excuse to hide the related trade data from the public’s eyes goes out the window. You can’t have it both ways and claim the bona fide MM exemption and later claim that the related trade data needs to be kept secret because it might reveal a “proprietary trading strategy”.
Truly bona fide MMs that are able to legally access that universally-abused exemption cover their naked short position on the next downtick after their short sale when buy side liquidity is in need of being ejected as share prices fall. The 3rd new rule which is in effect now states that the offers and bids that MMs post must be of approximately the same size. No longer can the offers be of 1 million shares and the offsetting bid good for the minimum 5,000 shares.
The verbiage in 4320 is especially well done as it FINALLY puts the clearing firms that aid and abet this crime wave on the spot. With the FFETF, which is made up of 25 different agencies, now on the scene the transparency has increased markedly. You can imagine how critical the lack of transparency is to a crime involving selling nonexistent securities and then refusing to ever deliver that which you sold AFTER being allowed access to the funds of the investor being defrauded.
Here are the links to the rules SR-FINRA-2010-028 and SR-FINRA-2010-043:

Notice the part I marked in bold in the quote above: 
"FINRA 4320 goes into effect on 2/28/11. It mandates 13 day buy-ins for open delivery failures FINALLY applying to shares of non-reporting corporations."

Dollar precarious, silver backwardation grows, gold explosive, Turk says


Gene Arensberg: Comex commercials not aggressively shorting silver


We're Rapidly Approaching the Crisis to Which 2008 Was a Warm Up


Paging Blythe, we hear there are 19,500 silver contracts standing still, paging Blythe


The Impact Of Surging Oil Prices On The US Consumer: A Primer

Wondering how surging oil prices will impact the average American? Forgotten what life was like in the first half of 2008? Then this chart is for you.

posted by Turd Ferguson at Along The Watchtower - 2 hours ago
First of all, we should all be very pleased by the action overnight. All who BTFD late yesterday are lready about a dollar to the good on silver and $10+ on gold. For all the angst, wailing and grinding of...

Guest Post: So is Everyone Printing Money? (Short And Sweet)

Japan has found out the perils of a long term zero interest rate policy means the banks have no incentive to assume credit risk and lend to each other or anyone else, so they trade their own book. The performance of the FTSE 100 and S&P500 suggest the true extent of the banks continuing to use cheap government money to trade bonds and equities. Japan knows what happens when the “extend and pretend” gravy train stops rolling. Equities should continue to rise while government stimulus money can find no other home. This is why politicians are irked at bankers bonuses, because they wouldn’t be making fat profits without cheap government money raised at the expense of the tax payers. All tangible assets, commodities (metals, energy, agricultural) and rare artifacts are likely continue rising until growth is undermined. The threat of rampant inflation and civil unrest will eventually cause the US, UK, Eurozone, Japan and China to rethink stimulus packages. 

It Starts: JPM Cuts Q1 GDP Forecast From 4% To 3.5%, Sees CPI Growing At 4%


Marginal Lending Facility Borrowings Plunge - Is The European Liquidity Situation Back To Normal?

After having surged for 6 days starting with a major jump on February 16, from €1.2 billion to €15.8 billion, borrowings under the ECB's 1.75% Marginal Borrowing Facility plunged overnight from €14.9 billion to €2.2 billion. As was reported previously, the supposedly responsible banks for this surge in borrowings were Ireland's two most insolvent financial entities: "The FT reports that "Anglo Irish Bank and the Irish Nationwide Building Society, Ireland’s two most troubled lenders, were behind a spike in overnight borrowings this week from the European Central Bank, according to people familiar with the transactions." A senior figure familiar with the transaction said it was “to facilitate” the sale of deposits by Anglo Irish and Irish Nationwide under the restructuring plan. Under the ECB’s normal refinancing operations, the collateral is locked up for a week. Tapping the ECB’s overnight or “marginal lending” facility, although more expensive “gives the banks the freedom to have the assets at their disposal immediately if there is a quick sale" he said." So does this mean that AIB and the INBS have completed their asset sales and the collateral has been unwound from overnight activity? That would be the logical explanation, especially as today is an important day for Ireland with Enda Kenny expected to become Taoiseach imminently. What will be curious is if the MLP borrowings surge once again in the coming days: at that point the "Irish" excuse will no longer be applicable. 

Federal Reserve Balance Sheet Update: Excess Reserves Surge, Fed Owns 37% More Treasurys Than China

There are two key datapoints to present in this week's Fed balance sheet update: the surge in excess reserves, and the comparative Treasury holdings between the Fed and other foreign countries. But first the basics: the total Fed balance sheet hit a new all time record of $2.5 trillion. The increase was primarily driven by a $23 billion increase in Treasury holdings as of the week ended February 23 (so add another $5 billion for yesterday's POMO) to $1.214 trillion. With rates surging, QE Lite has been put on hibernation and there were no mortgage buybacks by the Fed in the past week: total MBS were $958 billion and Agency debt was also unchanged at $144 billion. The higher rates go, the less the QE Lite mandate of monetization meaning that the Fed will be continuously behind schedule in its combined QE2 expectation to buy up to $900 billion by the end of June. Yet most notably, as we touched upon yesterday, the Fed's reserves with banks surged by $73 billion in the past week, as more capital was reallocated from the unwinding SFP program. As noted previously, we expect the total bank reserves held with the Fed to jump from the current record $1.29 trillion to at least $1.7 trillion by June. 

Big Miss To Second Q4 GDP Read: Comes At 2.8% On Expectations Of 3.3%, Previous Estimate Of 3.2%


Visual Atlas Of Distressed Oil Production


Posted: Feb 24 2011     By: Jim Sinclair      Post Edited: February 24, 2011 at 4:06 pm
Filed under: Jim's Mailbox

Greetings Jim,
Gold closed moderately higher today, reconfirming the short-term uptrend from late January and approaching the all-time high of the secular bull market near $1,424.
Technical indicators have strengthened further on the daily chart and are now extremely bullish overall, strongly supporting a continuation of the advance. The daily chart of the Gold Currency Index (GCI) is bullish to a similar degree, confirming the underlying strength of the uptrend.
From a temporal perspective, the cycle following the Short-Term Cycle Low (STCL) on February 14 is right translated to an extreme degree, just like its predecessor, suggesting that a breakout to new all-time highs is becoming more likely.
The gold market has tracked our computer model almost exactly since we anticipated the development of a meaningful bottom in late January, and the next technical objective for the rally off of the latest Intermediate-Term Cycle Low (ITCL) is a breakout to new all-time highs.
The sharp rebound during the past 3 weeks indicates that the latest Annual Cycle Low (ACL) likely occurred at the end of January, so the current advance must break out and move up to meaningful new highs in order for the long-term uptrend to remain healthy.
If the rally is unable to move up to new all-time highs and prices subsequently decline below the January low near $1,310, a potential long-term inflection point will form, suggesting the possible development of a substantial correction. It will be important to monitor gold closely during the next few months as the secular bull market attempts to reassert itself.
Erik McCurdy
Prometheus Market Insight


Thursday, February 24, 2011

Harvey Organ Feb 24-11

Libya set for civil war/expect a raid tomorrow.

What You Need To Know About Buying Silver At A Time When Even The Canadian Mint Says It Is "Difficult To Source" The Metal

Even as silver performed some unprecedented fireworks today, plunging on what was a margin hike in... crude, the metal continues to trade just below its post-Hunt Brother highs. So for those who still have not decided whether or not to take the plunge and buy into the precious metal (which, granted, was selling at $8.80 three years ago, and has since nearly quadrupled in price), we present the following discussion between Jeff Clark of Casey Research and The Daily Crux, which answers "what you need to know about buying silver today." But before that, here are some disturbing observations from King World News on something we highlighted a week ago yet which has received little prominence until now: namely, the inability of the Canadian Mint to easily procure silver, "as sourcing silver is becoming very difficult."

On-going Overnight Short Squeeze Takes Silver to Fresh 31-Year High   

Paul Mylchreest's Latest Must Read Report: Gresham’s Law Squared – Gearing Up For Game Over

So here we are, waiting for the “event” which triggers a loss of confidence across the system. Will it be a sovereign, a US state, a bank, QE3 or QE5, the oil price, Chinese fixed investment, a false flag event (a convenient distraction/excuse) or a revolution? When it happens, the speed at which capital will move in today’s over-liquefied world will take people’s breath away. Where will it go? This is the global end of normal (baby) so that, first and foremost, it will go into the strategic assets - gold/silver, energy, food/agriculture, rare earths, etc, (as well as the equities of the financially strongest economies). Bernanke’s QE2 is nothing short of economic warfare, in the form of a wave of inflation, directed at the rest of the world and even his own population (at least anybody without a large stock market, commodities or precious metals portfolio). This inflation is not temporary, as per the false reassurances, it’s baked in. In response, creditor nations have no other choice than to cut purchases of US Treasuries (China is selling), leaving the Fed increasingly standing alone. Rampant or hyperinflation results from the complete loss of confidence in a currency and we are being steered in this direction by the gentlemen above. Sure, they are smartly dressed, well educated (kind of) and pretend to know what they’re talking about with their carefully worded “policies”. It’s all NONSENSE. All they’re doing is leading us down a well-trodden path which has happened time and again throughout history.

Adjusted Monetary Base Goes Vertical

Just in case there was any confusion in the interpretation of the M2 chart, here is the latest just released Adjusted Monetary Base.

The Weekly Chart That Needs No Introduction Or Explanation


Bob Chapman: Public debt: unsustainable and simply unpayable

Credibility Blown (The Mogambo Guru)   

Silver Bankers May Be Sitting On Big Derivatives Losses And The Fed May Be Funding Them 

Silver Backwardation Surges To Over $1.00

The last time we presented the silver backwardation chart, it was "only" $0.50 or so between the front month and the long end. In the week since then the difference has jumped to what we believe is a new record of $1.50 or so. Now that the CBOE is issuing CEBOs and allowing plain Jane investors to bet on imminent corporate bankruptcies, would it be so kind to issue a contract or two on the COMEX... Pretty please?

FMX Connect Sees Gold Hitting $1,550 Within 8 Weeks


Gaddafi's Private Plane, Reportedly Loaded With Gold, Ready To Leave For Zimbabwe As Early As Tomorrow

Mike Krieger Asks The Logical Question: "How Long Until Obama Starts Writing Checks"?


Liquidations Coming: Hedge Fund Margin Debt Surges - Total Free Cash Lowest Since July 2007, Just Prior To Quant Wipe Out


S&P To Withdraw All US Rating On May 24, Convert Everything To "Unsolicited"


Here Comes The Weapons Of Mass Destruction "Get Out Of Peace" Card Again 


Bullard Says "Never Say Never" To QE3


New Home Sales Plummet 13% To 284,000 Annualized Rate, 19K Actual Homes Sold Lowest Monthly Ever

While the quant funds are desperately seeking modelers for a "deranged middle east dictator" algo, the US economy continues to prolapse. From the release: "Sales of new single-family houses in January 2011 were at a seasonally adjusted annual rate of 284,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.6 percent (±11.2%) below the revised December rate of 325,000 and is 18.6 percent (±15.4%) below the January 2010 estimate of 349,000. The median sales price of new houses sold in January 2011 was $230,600; the  average sales price was $260,300. The seasonally adjusted estimate of new houses for sale at the end of January was 188,000. This represents a supply of 7.9 months at the current sales rate." Less than 500 homes (Z) sold in the over $750,000. And the stunner: only 19k non-annualized homes were sold. The lowest monthly total ever. (and as JT Smith points out, of the 19K, 53% were vacant lots or under construction).

Wednesday, February 23, 2011

100 oz bars about to be extinct, We only need 10K Silver contracts for BOOM, we still have 40K, Nuff said


Posted: Feb 22 2011     By: Dan Norcini      Post Edited: February 22, 2011 at 2:03 pm
Filed under: Trader Dan Norcini

Dear CIGAs,
Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini

Socialism Gone Apeshit: Obama Wants To Use Proceeds From $20 Billion Fraudclosure Settlement To Reduce Underwater Mortgages

Ever wonder why the banks have been stowing away cash as if in anticipation of a torrential rainy day? Well, it just started pouring. According to the WSJ: "The Obama administration is trying to push through a settlement over mortgage-servicing breakdowns that could force America's largest banks to pay for reductions in loan principal worth billions of dollars…Terms of the administration's proposal include a commitment from mortgage servicers to reduce the loan balances of troubled borrowers who owe more than their homes are worth, people familiar with the matter said. The cost of those writedowns won't be borne by investors who purchased mortgage-backed securities, these people said…some state attorneys general and federal agencies are pushing for banks to pay more than $20 billion in civil fines or to fund a comparable amount of loan modifications for distressed borrowers…Regulators are looking at up to 14 servicers that could be a party to the settlement…Banks would also have to reduce second-lien mortgages when first mortgages are modified…Under the administration's proposed settlement, banks would have to bear the cost of all writedowns rather than passing them on to other investors. The settlement proposal focuses on pushing servicers who mishandled foreclosure procedures to eat losses, by writing down loans that they service on behalf of clients. Those clients include mortgage-finance giants Fannie Mae and Freddie Mac, as well as investors in loans that were securitized by Wall Street firms.” In other words, we have just reached the pinnacle of banana republic socialist insanity. In one fell swoop the teleprompter will not only grant reprieve to the banks for decades of fraudulent mortgage activity, but undercapitalize themselves and have them at risk for another liquidity run, which would of course mean another record multi-trillion taxpayer bailout. And the worst case: the 10 million or whatever underwater mortgages will get an average reduction of $2000 each. This is unfuckingbelieveable!

Lassonde sees EU collapse and $1,500 gold this year


Hey, Hoenig, those oversize banks are rigging markets for your boss


Helicopter Ben Step Aside, Meet Enola Gay Abdullah: Whorism Goes Global


Five People Killed As Protests Shift To North Korea: Government Mobilizes In Preparation For Violent Demonstrations



Harvey Organ Feb 23-11

violence in Bahiarn, Violence in Libya. Violence in Greece,,silver and gold rocket northbound


IMF Says It Is Prepared To Feed The World's Hungry (While Invoicing US Taxpayers For Its Services)

In a report released earlier summarizing the fund's findings from the irrelevant G-20 meeting over the weekend, "Global Economic Prospects and Policy Challenges", the IMF finally acknowledges what pretty much everyone has been warning about for over two years now. Namely: "From an external perspective, however, there is concern that quantitative easing in the United States could result in a flood of capital. In economies where recovery is already well established, policymakers will need to pay increasing attention to building inflationary pressure. Central banks should continue to stand ready to address liquidity problems in the banking sector, particularly in the euro area." Actually the liquidity area that should be addressed is that in the 3rd subbasement of the Marriner Eccles building where the printers work on full blast 24/7. Furthermore, the IMF points out another glaringly obvious factoid of today's global ponzi economy, namely the Chinese property bubble: "Residential real estate prices in some of China's larger cities have risen rapidly since the crisis, spurred initially by stimulative policies aimed at easing restrictions on real estate lending and subsequently by strong income growth, high savings, and limited alternate investment vehicles. While it is difficult to predict how significant the stress from potential property price correction would be, if these risks are realized, there could  potentially be global ramifications." But arguably the most interesting observation in the report is that the ongoing tsunami of Fed-driven food price surges across the world, in most cases leading to outright revolution, will end up being invoiced to... you - dear US taxpayer.

CIA Agent Caught Red-Handed Aiding Pakistani Terrorism? 

Peripheral Europe Cheat Sheet - Update

Ahead of what is shaping up to be a brutal March for Europe, here is a refresh of all the key European data. Keep this handy as there will be much selling (and, respectively, much buying by the ECB) over the next month. From Nomura: "We refresh the Cheatsheet in the lead-up to a period of key events for euro sovereigns. On 25 February Ireland is set to hold elections, which could ultimately be positive for the sovereign in settling some of the political turmoil that is gripping the country in the post-bailout world. The upcoming ECOFIN (14/15 March) and EU Council (24/25 March) meetings are crucial for the future of the crisis resolution mechanism based on the proposed timeline of the EU treaty change." 

It's A Skewed, Skewed World


Prepare For A Trading Revolution: Here Come CDS For Retail Investors



Eric Sprott: "There Is No More Silver Left"

Eric Sprott made an appearance at Casey Research Gold and Resource Summit where in addition to providing a succinct summary of all his monthly letters from the past year, whose forecasts are all gradually panning out, he spoke about the prospects for gold, and particularly silver. We will leave it to readers to parse through the brief must watch clip, but here is the punchling for those wondering why increasingly more distributors are reporting indefinite lack of physical silver inventory: "There's $22 billion of silver available in the world, of which the ETFs already own half, and between you guys and us we probably own the other half... Which means there's nothing left."

And So Gold Is Under $10 From All Time Highs

Remember when all "experts", pundits, and all other idiot verietals couldn't shut up how gold was going to triple digits imminently? Yes, neither do we.



Gaddafi Son Says Army Will Protect Oil Infrastructure, Blames Al-Qaeda For Carpet Bombing As 10,000 Now Reported Dead

And so we go from one lunatic to another. In an "exclusive interview" with the FT, Muammar Gadaffi's son, al-Saadi, told the newspaper, whose parent Pearson PLC is 3% owner by the Libyan Sovereign Wealth Fund, "made it clear that he believed any such new regime would still include his father. “My father would stay as the big father who advises,” he told the Financial Times, adding that direct administrative powers should be handed over to a new generation." And further confirming the soon to be deposed ruler's break with reality, were accusations that the reason why the Libyan airforce has been shooting at protestors over the past week, was to protect the country from "thousands of al-Qaeda" infiltrators who had taken over the eastern part of the country. Touching on a topic discussed yesterday, namely that the Gaddafi regime may engage in sabotage against its oil industry, al-Saadi “said that the army would be sent to guard facilities if necessary. The army is still very strong,” he said. “If we hear anything, we will send some battalions. When people see the army, they will be afraid.” In other words, expect to hear news of major disruptions in the country's oil infrastructure which will promptly be blamed on al-Qaeda by the Gaddafis. And going back to reality, we read that the death toll in Libya has surpassed 10,000 people.

Very Weak 5 Year Auction Raises Speculation That Neither US Dollar Nor Treasurys Are Flight To Safety Any Longer


And Wow: Fed's Hoenig Says United States Has "Deeply Undermined Free-Market Capitalism"









  • Geithner Says Not To Worry About Surging Oil Prices: "Central Banks Have A Lot Of Experience In Managing These Things"

    You really can't make this shit up: "The economy is in a much stronger position to handle” rising oil prices, Tim Geithner said today during a Bloomberg Breakfast in Washington. “Central banks have a lot of experience in managing these things." We are, all of us, now doomed. 

    Tuesday, February 22, 2011

    Harvey Organ 2-22-11 Part B

    PART B silver open interest still very high..Libya in a mess!!


    Korean Bank Run Spreading: Eighth Bank Closes Following "Massive Withdrawals"

    The quietest bank run that has so far completely evaded mainstream attention, that of Korea, is spreading, and an eighth bank has now shuttered after "Domin Bank, a savings bank with a capital adequacy ratio below 5 percent, voluntarily decided yesterday to suspend its operations temporarily because of massive withdrawals." As JoongAng reports: "The decision took both depositors and financial regulators by surprise since it was the first time that a local bank shut its doors on its own." Apparently the courageous decision by the Financial Services Chairman Kim Seok-dong to deposit $17,864 in a troubled bank has not done much if anything to prevent the locals from realizing that their banking system is built on a house of cards.

    A Visual Reminder Of US Social Stratification

    While many watch the revolutions starting virtually on a daily basis in the "developing world", few are concerned that these have any chance of occurring in the United States: "our society is far more cohesive and far less stratified" the rebuttal logic goes. Is it? Over the past two years, the one social class that has received the most voluminous amount of opprobrium is the ubiquitously derogatory "bankster" which represents far more a wealth and income qualification, that a job description. Americans it appears are becoming increasingly sensitive to the stratification within our own society, even if on a subliminal level. And while we have repeatedly shown before in visual terms just how polarized US society is, it worth reminding every few months or so, that the US is rapidly becoming a banana republic not only in its approach to legislative and judicial matters (not to mention regulatory), but toward the distribution of income and wealth. Not that there is anything wrong with a stratified society: after all, that is the purest hallmark of a capitalist society. However when one introduces the basest elements of socialism (and, ostensibly, communism and fascism according to some) in its midst, then things get far more transparent and subjective. Below we once again bring to our readers attention, in easily digestible format, the dramatic schisms that continue to tear through the fabric of US society. And if there is anything that the revolutions in the Maghreb should have taught us by now is that extreme social polarization can only last for so long before a violent snapback restores equilibrium, usually through bloodshed and death.

    How Much More Demand Can Silver Handle?  
    A Tipping Point Is Nearing  
    Fear Of "Catastrophic" Crash Rising Despite Bull Market

    Harvey Organ 2-22-11 Part A, Part B to follow in a few hours...

    silver remains resilient/silver/gold withstand massive raid:


    Silver, 1980, and why we shouldnt drive while looking in the rear view mirror


    Six Charts Which Prove That Central Banks All Over The Globe Are Recklessly Printing Money

    Federal, state and local debt hits post-WWII levels

    Pan American Silver Shifts Assets to Canadian Dollars


    Which US Banks Are Managing Billions For The $32 Billion Libyan Sovereign Wealth Fund?

    Following the previous post taking a tangential if insightful peek into Gaddafi's personal eccentricities, we next look at something far more important, where once again courtesy of Wikileaks disclosure, we find that the Libyan Sovereign Wealth Fund (Libyan Investment Authority, or LIA), whose holdings were first dissected on Zero Hedge, and whose AUM is supposedly a massive $32 billion, has "several American banks each managing USD 300-500 million of the LIA's funds." Perhaps now that UniCredit has plunged by 12% in the past few days due to the recognition of Libya's involvement in the bank it is time for the US banks who manage billions in capital for the LIA, to step up. After all even most of the country's ambassadors have vocally recused themselves of any association with the government. Perhaps our banks can show a comparable level of objectivity and at the loss of a few million in management fees clean their conscience, before someone does it for them. Also curious is the fact that the LIA appears to have had its own direct involvement with a certified ponzi after having been approached by both Stanford (with a rumored investment by the LIA being the end result) as well as the one, the only, original (post-modern) ponzmaster, Bernie Madoff.

    Egyptian 'Net Killed By Intimidation, Not a Switch.
    Posted: Feb 22 2011     By: Jim Sinclair      Post Edited: February 22, 2011 at 1:33 am
    Filed under:
    Courtesy of Greg Hunter’s
    Dear CIGAs,
    Saturday, the House of Representatives passed legislation with more than $60 billion of budget cuts.  It is the proverbial “drop in the bucket” when compared to the $14.1 trillion (and counting) outstanding federal debt.  Soon, this ever increasing national debt will eclipse the Gross Domestic Product (GDP.)   That means America will owe more than all the goods and services it produces in one year.  When you owe more than you make, isn’t that a sign you need to change course?  The new Speaker of the House, John Boehner, said this just after the budget cut vote, “We will not stop here in our efforts to cut spending, not when we’re broke and Washington’s spending binge is making it harder to create jobs.” I think it is ironic Congress wants to cut $60 billion today and then turn around and consider raising the debt ceiling $1 trillion tomorrow.  This is crazy, but that is exactly what’s going to happen because if we don’t, Treasury Secretary Tim Geithner says it could cause, “catastrophic damage to the economy.”
    I don’t think most people grasp just how serious America’s budget problem really is. When Mr. Boehner says, “we’re broke,” he’s not kidding.  America is broke. The only reason this has gotten so out of control is the U.S. dollar is the world’s reserve currency, and the government can just print money whenever it needs funds.  Right now, the Fed is creating $75 billion a month to help finance government operations.  This is met with a shrug, like it is no big deal.  But, it is a big deal, and it comes with a significant downside—inflation.  Sure, there is deflation in housing, but everything else is going up in price.     
    It is not just the federal government that’s swimming in red ink, but more than 40 states in the union are also tens of billions of dollars underwater in deficits, pensions and health-care obligations.  The union protests in Wisconsin are just the tip of the iceberg.  Contrary to what left wing commentator Rachael Maddow says, the $137 million deficit problem in Wisconsin was not caused by Governor Walker’s tax-cut bills approved in January.  Here’s how The Wisconsin Journal Sentinel summed up the false story, “There is fierce debate over the approach Walker took to address the short-term budget deficit. But there should be no debate on whether or not there is a shortfall. While not historically large, the shortfall in the current budget needed to be addressed in some fashion.” (Click here to read the entire Sentinel story.)

    Jim Sinclair’s Commentary
    QE to infinity or Time Square will be filled with unemployed people seeking new leadership in Washington.

    Federal, state and local debt hits post-WWII levels By Steven Mufson
    Washington Post Staff Writer 
    Sunday, February 20, 2011; 11:33 PM

    The daunting tower of national, state and local debt in the United States will reach a level this year unmatched just after World War II and already exceeds the size of the entire economy, according to government estimates.
    But any similarity between 1946 and now ends there. The U.S. debt levels tumbled in the years after World War II, but today they are still climbing and even deep cuts in spending won’t completely change that for several years.
    As President Obama and Republicans squabble over whose programs to cut and which taxes to raise, slow growth and a rising tide of interest payments – largely beyond their control – are making the job of fixing the budget much harder than in the past. Statehouses and governors face similar challenges.
    After World War II, the federal debt – including debt purchased by the Social Security Trust Fund – hit nearly 122 percent of gross domestic product. State and municipal debt back then was minimal. By the time Dwight Eisenhower was elected president six years later, the federal government’s debt had dipped to about three-fourths of GDP.
    The key factor in the rapid drop in government debt, said Harvard University economist Kenneth Rogoff, was fast economic growth. Spurred by a young labor force, world-leading manufacturers, high personal savings rates, a pent-up demand for consumer goods after years of war and the Depression, and a bout of inflation, the economy grew 57 percent in six years. Thanks to sharp postwar cuts in defense outlays, federal government spending also tumbled for a couple of years.

    Guest Post: Why I'm Buying Silver At $30

    The silver price has bounced 27% since January 28, a huge advance for a measly 16 trading days. It's already soared past its 2010 high and was selling for less than $16 this time last year, a double in 12 months. So, is it pricy? Or should we ignore the run-up and keep buying? I've read a few articles that say we should expect silver to drop to the $25 level, and one pinpointed $22. Others, of course, see bullish tea leaves for the near term and believe it's headed higher. Of those that assert silver will decline, most believe it will be temporary, though one writer claims the bull market in precious metals is over (I think he's a holdout from the gold-is-a-bubble camp). These authors could be right about a near-term decline, but I'm less concerned with what the price does this month or even the next few months, and more focused on where it's likely headed over the next few years. Caution: the chart ahead may cause excitement. While there are lots of reasons to be bullish on silver, what everyone really wants to know is how high the price can go. Here's one hint, based strictly on historical price performance. 

    Mohamed El-Erian Says We Can Not Assume The Dollar Will Retain Its Reserve Currency Status

    Mohamed El-Erian made one of his regular media appearances today (in addition to his almost daily Op-Ed, released earlier) appearing on Bloomberg Surveillance with Tom Keene and talking the developments in the Maghreb. While the full highlights are presented below, there are two items of note. El-Erian once again hits on what we believe will be the keyword of 2011: stagflation. To wit: "we have to appreciate that in the west, what is happening in Egypt and North Africa results in stagflation in the short term. So higher inflation and lower growth because of higher oil prices that take away purchasing power and transfer wealth somewhere else; because of higher geopolitical risk, which tends to diminish animal spirit and therefore impact investment; and let's not forget that the Middle East is a market, particularly for European exports. So from an economic perspective, it is important for the west to understand that these are stagflationary winds that have been added to the global economy." It is important, but not necessary: as long as the manipulated, liquidity glutted market continues to misrepresent the true state of the economy, nobody will care until it is too late. And speaking of "too late", validating our sarcastic observations over the past several weeks that the dollar is no longer the "flight to safety" currency (that would be the PM complex, and the swiss franc if anything), is the Pimco CIO's suddenly very dour outlook on the weakening US Dollar: "It is a warning shot to America that we cannot simply assume flight to quality, flight to safety. That people are starting to worry about the fiscal situation in the U.S., worrying about the level of debt and what they're hearing about states and municipalities. I would take this as a warning shot that we cannot assume that we will maintain the standing of the reserve currency as we have in the past." That's a given - the question however remains, which fiat currency, if any, is willing and ready to step in and replace the USD? With all eyes continuing to be look at the CNY, how long before China finally takes the plunge to find out just who is the real reserve currency in the world?

    With NYSE Short Interest At The Lowest Level In Years Following A Record Short Collapse... Who Will Be The Bid?