Congressman John Campbell's Moment Of Epiphany - Realizes US Is One Big Ponzi

Submitted by Tyler Durden on 03/14/2011 13:43 -0400

Zero Hedge first observed the duration mismatch in US Treasury holdings back in November 2009, when we highlighted the concerning amount of debt that the government has to roll every year courtesy of about 30-40% in outstanding paper that is of very short duration (under 2 years or so). We have also been pretty adamant that by now the US economic system is nothing but a ponzi scheme pure and simple. Today, we observe how this epiphany manifests itself when it occurs to a congressman, in this case John Campbell (California). The punchline: "I understand that the Fed and the Treasury are trying to keep interest rates low and improve the economy and the deficit. But, when coupled with the huge deficits, these moves look a bit like a Ponzi scheme that will soon unravel." Amen brother.

Baseline Japan Disaster Cost Estimates: 3-5% Of GDP; Could Be As High As $1 Trillion

Submitted by Tyler Durden on 03/14/2011 14:27 -0400

All those hoping (here's looking at you Mo) to see a prompt bounce back in Japan to baseline economic levels may be in for some disappointment. Reuters reports that according to various sellside analysts, the impact to Japanese GDP (which is virtually tied with China for the world's second largest economy), could be anywhere between 3 and 5%. "Quake-hit Japan  faces a recovery and reconstruction bill of at least $180 billion, or 3 percent of its annual economic output and more than 50 percent higher than the total cost of 1995's earthquake in Kobe. The Kobe earthquake is estimated to have cost $115-118 billion, or 2 percent of GDP in 1995 terms. This time -- in a still unfolding disaster -- initial estimates from Credit Suisse and Barclays put the cost at $180 billion. Mitsubishi UFJ Securities and Sarasin expect the cost could run as high as 5 percent of GDP. Mitsubishi's estimates take into account a wider economic cost including a loss of tax revenues, subsidies to various industries of the affected area, loss of productivity following rolling blackouts on top of straight reconstruction costs." And it could be far, far worse: "some extreme projections of the longer-term cost look at figures closer to $1 trillion over several years." And as we first quantified over the weekend, the reinsurance caps for real estate losses are maxed out at about $60 billion. Which means either the government will leave those with insurance policies to split pro rate proceeds that refunds amounts owed at a big haircut, or in tried US fashion, will have to step in with emergency transfer funding measures, capitalized through the issuance of tens if not hundreds of billions of new debt. As for who will buy that debt, we look forward to Bill Gross' next letter for clues thereto. In the meantime, look for global GDP to be cut by at least 1-2% by the sellside pundits "shortly" especially as the way for QE3 is paved by the likes of Jan Hatzius who is lucky to have a force majeure on his second "Golden Age" call.

Eric Sprott Debunks The Gold Bubble Myth

Submitted by Tyler Durden on 03/14/2011 14:07 -0400

Gold’s continuous ten-year rise hasn’t sheltered it from controversy. Despite producing consistent returns in virtually all currencies year after year, some market pundits still question its validity as an asset class. It’s true that gold doesn’t pay any interest, and it’s also true that much of the gold produced throughout history still exists in some form today. But these characteristics shouldn’t inhibit it from performing as a monetary asset. Cash, after all, doesn’t pay real interest either, and there is more fiat money in existence today than ever before. So why does gold still receive such harsh criticism? We believe much of it stems from a widely held misconception that gold is forming a financial bubble. It’s a fairly straightforward view – that gold buyers are merely foolhardy speculators buying on a whim with no rationale other than to sell to the ‘greater fool’ at higher prices in the future. It’s a view that assumes that gold has no intrinsic value and is simply a speculative asset that has captured investors’ imaginations. We don’t take these views on gold lightly. We’ve seen bubbles before and fully know how they end. We have no interest whatsoever in participating in some sort of speculative frenzy – that’s a recipe for disaster in the investment business. Thankfully, however, our gold investments present no such risk. As our analysis has revealed, gold is actually a surprisingly under-owned asset class – and one that has generated far more attention in the media than it probably deserves. While its exemplary performance since 2000 is certainly worthy of discussion, gold simply hasn’t commanded enough investment to warrant the bubble fears it seems to have aroused among market pundits and business commentators. The truth about gold is that most people simply don’t own it…yet. 

 

 

 

Hackers Stretch Their Wings, Deface Chinese Government Site

Submitted by Tyler Durden on 03/14/2011 12:45 -0400

Team Greyhat has just hacked the website of the Jishou Audit Office, a Chinese government property. Following Saturday's announcement by the Anonymous hacker syndicate of "civil disobedience" until Ben Bernanke steps down, how long before some US government websites are defaced in a comparable way? And just how hackerproof is Fedwire anyway?

Satellite Photo Of Reactor 1 and 3 Explosions At Fukushima

Submitted by Tyler Durden on 03/14/2011 12:21 -0400

This is what the recent explosions look like when looked at from space, per the BBC. 

 

 

 

 

 

 

 

In The News Today

Posted: Mar 14 2011     By: Jim Sinclair      Post Edited: March 14, 2011 at 1:09 am
Filed under: In The News

Jim Sinclair’s Commentary

This will soon be your lawnmower gas gauge.





Jim Sinclair’s Commentary
MOPE is everywhere, truth is nowhere.

Japan nuke plant blast may be worse than Chernobyl: Indian experts 2011-03-13 16:06:42
NEW DELHI, March 13 (Xinhua) — Some Indian experts have warned that the explosion at Japan’s Fukushima Daiichi nuclear complex may be worst than Chernobyl even as the quake-hit nation seeks to reassure its people that the country would not experience a full- blown nuclear disaster.
At least 15 people have been reportedly admitted to hospital with symptoms of radiation poisoning after a blast ripped through a reactor at the Fukushima nuclear power plant yesterday. The emergency cooling system is said to have been failed at another reactor at the Fukushima plant.
The authorities, who have ordered the evacuation of 170,000 people from the area within a radius of 20 km at Fukushima, 250 km northeast of capital Tokyo, however, said there are no health concerns though fluctuations in the radiation level can be expected.
But some Indian experts are not convinced.
"There are a total of 10 reactors at the two plants at Fukushima nuclear complex. Yesterday, there was an explosion at the No. 1 nuclear plant in the wake of 8.9 magnitude quake and tsunami in the region, which destroyed a reactor and reports suggest that another reactor may also explode," said Delhi-based nuke security expert V.K. Duggal.
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Jim Sinclair’s Commentary
All problems are met by QE.

BOJ injects record 7 trillion yen to soothe markets Sun Mar 13, 2011 8:14pm EDT
TOKYO, March 14 (Reuters) – The Bank of Japan on Monday injected a hefty 7 trillion yen ($85 billion) into the money market in a same-day market operation aimed at soothing market jitters after a massive earthquake and tsunami hit northeastern Japan.
This was the central bank’s first so-called same-day operation since last May, when the Greek debt crisis roiled the global financial markets.
BOJ Governor Masaaki Shirakawa said on Sunday that the central bank would provide huge amounts of liquidity to the banking system on Monday, reinforcing the bank’s determination to keep markets stable in the wake of the disaster. ($1 = 81.915 Japanese Yen)
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