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

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

Submitted by Tyler Durden on 02/25/2011 11:12 -0500

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.

Your One-Trick Turd, part II

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)

Submitted by Tyler Durden on 02/25/2011 10:57 -0500

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?

Submitted by Tyler Durden on 02/25/2011 09:46 -0500

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

Submitted by Tyler Durden on 02/25/2011 09:23 -0500

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

 

Jim’s Mailbox

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.
Best,
Erik McCurdy
Prometheus Market Insight
http://www.prometheusmi.com