Ron Paul Says Next US Crash Will Be Comparable To That Of Soviet Union, Claims QE2 Is "Total Failure" And Fed Is A "Central Planning Cartel"

Submitted by Tyler Durden on 02/10/2011 12:59 -0500

Ron Paul has just stepped up his war of rhetoric with his nemesis the Archchairsatan Rudolf Vissarionovich von Bernankestein (because never before have we had a genocidal central planner hell bent on printing the world's fate out of a deflationary collapse), and in an interview with Larry Kudlow said what everyone who is watching the day after day melt up (and wondering what comes next) openly thinks: that when all is said and done, and there is no incremental vapor and no incremental HFT levitation effect, that the US collapse will be comparable only to that of the Soviet Union. Needless to say, we are confident he is optimistic. Some economic observations from Paul: "We have so much unemployment, it is so undercounted. The free market economists report that there is probably 22% of unemployment. They pumped in $4 trillion, they should have added a lot of jobs, but how much did it cost us, and that of course is the price inflation that will come. We are moving into another 30 year period where we are going to see a reversal of interest rates, and we are going to see a crashing of the bonds like we saw 30 years ago and it's going to last a long, long time. The Fed deserves the blame for the inflation, and for the unemployment." On the amount of damage done by the Fed: "I think it's unimaginable, it could be so devastating, and could bring a strong, worldwide run on the dollar. We are in uncharted territories. I think we will see changes in our economy and our country almost equivalent to the change that occurred in the Soviet system. I think it will bring down our empire, we won't be able to afford our welfare state, and we won't be able to afford taking care of the world." And as Zero Hedge suggested previously, Ron Paul believes that the Fed's policies will actually lead to a spike in unemployment when all is said and done. Lastly, on Ron Paul view of Bernanke's central planning:"One time when Greenspan was before the committee, I told him if you can make this fiat system work as if it is the market system working, you have repealed economic law. It is positively baffling that we as a country have accepted that one individual can control the economy."

Perth Mint, Scotia out of hundred-ounce silver bars, KWN says

Armed Forces Securing Suez Canal As Egyptian Navy Escorts Transiting Ships

 

Last Fed Hawk (Excluding The Drama Queens) Kevin Warsh To Leave Fed March 31

 

Subpar 30 Year Prices At 4.75%, 2 Basis Points Away From Multi-Year Highs

Submitted by Tyler Durden on 02/10/2011 13:13 -0500

Unlike yesterday's earthshattering and very perplexing 10 Year auction, today's 30 year auction of $16 billion in bonds was a dud. The bond priced at a high yield of 4.75%, 2 bps wide of the when issued, and just 2 basis points of the highest rates seen in the past several years, specifically the 4.77% seen in the April 2010 auction (not surprisingly, today the 30 Year Fixed Cash Mortgage printed at the highest rate since April of 2010 as well when the market topped last, as we pointed out previously). The Bid To Cover was a subpar 2.51 compared to the 12 month average of 2.67. Direct Bidders, who completely disappeared yesterday were here, taking down 8%, Indirects accounted for 43.1% and the Primary Dealing flippers bought 48.9% (a 73% hit rate). In other news, the interest in the long end is leaking, and the bulk of the fireworks continue to be in the belly, with major interest dropping in the 3-5 Year side, and a major pick up in Indirect interest in the 10 Year. Look for this trend to persist. 

 

 

 

In The News Today

Posted: Feb 10 2011     By: Jim Sinclair      Post Edited: February 10, 2011 at 12:07 pm
Filed under: In The News

Jim Sinclair’s Commentary
There is a number whereby Martin Armstrong’s reaction is nullified. Many people in finance read him but will not admit it.
His second before last missive has contributed to the reaction we have experienced.
There is no way I will say the price because why should we give the opposition more ammunition?

Jim Sinclair’s Commentary
This is the birth of a durable democracy? You have to be kidding.

Omar Suleiman warns of coup as tension rises between Egyptian demonstrators, army
Protesters occupy new territory near the Egyptian parliament building, sparking a temporary confrontation with troops. Vice President Omar Suleiman warns of tougher measures to prevent a possible coup. By Timothy M. Phelps and Kim Murphy, Los Angeles Times
February 10, 2011
Egypt’s government and protesters edged closer to violent confrontation Wednesday as demonstrators escalated their tactics and the vice president warned of a coup if the unrest continued, saying protests must end or "the dark bats of the night" would emerge to terrorize the nation.
Labor unrest continued in the nation for a second day, threatening to merge the political goals of the opposition with the more focused economic issues that have long plagued Egypt.
And violence spread to a normally peaceful desert oasis 500 miles southwest of Cairo, where police killed four people.
Protesters in central Cairo’s Tahrir Square, reenergized by a massive crowd Tuesday after turnout began to flag on Monday, promised the biggest demonstrations yet on Friday, this time nationwide as well as in multiple locations in Cairo. On Wednesday, they defied the Egyptian army by occupying the street in front of the parliament building, creating a second front in downtown Cairo.
Egyptian Vice President Omar Suleiman, in comments to Egyptian newspaper editors published Wednesday, warned sharply that the demonstrations could not continue. Suleiman, who until now has presented himself as a soft-spoken voice of reason in discussions with opposition leaders, sounded rattled as he warned of tougher measures.
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Jim Sinclair’s Commentary
Israel supports democracy with one present exception – Egypt. What do they know that the Western world media and financial TV missed?
How Egypt resolves itself is the singular most important fundamental in the political and economic world today.
Egypt is more important than Afghanistan, Pakistan, Iran and Iraq at this moment in time.

Israel urges U.S. to reaffirm support in light of Egypt unrest
U.S. officials meeting Barak stress administration’s ‘unshakeable’ commitment; Israeli envoy: Foreign aid to Israel can’t be taken for granted.
By Natasha Mozgovaya
Defense Minister Ehud Barak on Wednesday stressed the importance of U.S. support for Israeli security in light of the political unrest in Egypt, while Ambassador Michael Oren urged the Obama administration to reaffirm its commitment to that regard.
Barak met with Secretary of State Hillary Clinton, Secretary of Defense Robert Gates and National Security Advisor Tom Donilon at the White House on Wednesday evening,  to discuss the tense situation in Egypt.
The White House press office said the meeting dealt with “the need to move forward on Middle East peace, our efforts to prevent Iran from acquiring nuclear weapons, and other regional and bilateral issues.”
The U.S. officials stressed their country’s “unshakeable commitment to Israel’s security, including through our continued support for Israel’s military, and the unprecedented security cooperation between our two governments,” the White House said in its statement.
Barak’s spokesman characterized the meeting as “excellent”.
Israel envoy Oren later Wednesday conveyed a similar message when he urged the administration to reaffirm its commitment to Israel, in an address to the Congressional Israel Allies Сaucus reception on Capitol Hill.
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Jim Sinclair’s Commentary
A military coup can’t supply food at reasonable prices and jobs for the Egyptian unemployed.
Yes, but only if they draft the entire population.
This is no road to a sustainable democracy as the media would have us believe. Why anyone believes the media today is baffling to me.

Egypt’s Army Signals Transfer of Power By ANTHONY SHADID AND DAVID D. KIRKPATRICK
Published: February 10, 2011
CAIRO — The command of Egypt’s military stepped forward Thursday in an attempt to end a three-week-old uprising, declaring on state television it would take measures “to maintain the homeland and the achievements and the aspirations of the great people of Egypt” and meet the demands of the protesters. The development appeared to herald the end of President Hosni Mubarak’s 30-year rule.
Several military leaders and officials in Mr. Mubarak’s government indicated that the president intended to step down on Thursday. Some reports said he aimed to pass authority to his hand-picked vice president, Omar Suleiman, but what role Mr. Suleiman would play in a military government, if any, remained uncertain.
In testimony before the House Intelligence Committee, C.I.A. Director Leon E. Panetta said that there was a “strong likelihood” that Mr. Mubarak would step down by the end of the day. State television said Mr. Mubarak will appear tonight with an announcement.
The character of the military’s intervention and the shape of a new Egyptian government remained uncertain. A flurry of reports on state media on Thursday indicated a degree of confusion — or competing claims — about what kind of shift was underway, raising the possibility that a competing forces did not necessarily see the power transfer the same way.
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Jim Sinclair’s Commentary
Few, other than here, thought that China could do it. Few, other than here, thought India would do it.
Joseph Kahama is writing a new book – "Boom, Insights and Visions into Economic Opportunities in the African Bull Market." Africa is the best of opportunities for continued growth over the next many years.

Africa’s share of mine deals triples February 9 2011 at 05:19pm
Africa’s share of global mining deal flows tripled from 5% in 2009 to 15% in 2010, according to a report released on Wednesday by Ernst & Young.
The bulk of these deals was inbound and showed a significant growth in volume, signifying the increased interest of the rest of the world in Africa.
“In one major deal, Rio Tinto offered US$3.9 billion to buy Mozambican coal miner Riversdale, while Xstrata is paying US$513 million for Sphere Minerals, with the goal of gaining three iron ore projects in Mauritania,” said Adrian Macartney, mining sector leader for Africa at Ernst & Young.
“When one takes into account the increasing interest in Africa’s mining sector from companies in China, India, Brazil and Russia, it is easy to see why the future looks rosy,” added Macartney.
When it was suggested a year ago that Africa’s economic recovery was on track, many thought this premature. However, a quick look at current figures shows that there can be little doubt that the continent is definitely “open for business”.
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Jim Sinclair’s Commentary
This is easy. China only needs one ounce to accomplish this.

China may increase gold reserves beyond ‘Fort Knox’ level – Hale By: Martin Creamer
CAPE TOWN (miningweekly.com) – China’s central bank is being advised to increase its gold holdings nearly tenfold to a level greater than the world’s biggest bullion depository, the US’s "Fort Knox".
Global economist David Hale, who addressed the packed Mining Indaba in Cape Town attended by a record 5 700 people, says that China’s gold reserves are currently at 1 050 t – only $30-billion to $40-billion compared with the country’s total assets of $2,8-trillion.
Various officials in China have proposed the central bank should increase its gold reserves to 10 000 t, which would give China larger gold reserves than Fort Knox.
“This would be a huge development for the gold market,” he says, with global mining output of gold only at 2 500 t a year.
“China will probably start to buy gold in the near future, but they won’t report it for two or three years,” Hale says.
When China announced new gold reserves from 600 t to 1 050 t in April 2009, purchsing had been done in the preceding years..
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