G7 meeting tomorrow/silver and gold rise/nuclear problems in Japan intensifies

Harvey Organ, Thursday March 17, 2011

G7 meeting tomorrow/silver and gold rise/nuclear problems in Japan intensifies

Alasdair Macleod: How precious metals will replace fiat money

 

Western central banks join Japan's in rigging yen market

 

We Are Off To The Races: BOJ Intervenes In FX Market, Sends Nikkei Surging As G7 Agree On Plaza Accord V2

Submitted by Tyler Durden on 03/17/2011 20:07 -0400

And we are off. The JPYUSD is up nearly 200 pips as the Bank of Japan buys billions in dollars, using freshly printed Yen, following an agreement with the G7 which will likely see a new plaza accord to keep the Yen low despite ongoing repatriation. This follows earlier news that the BOJ will underwrite a ¥10 trillion in earthquake recovery bonds as Japan is now lurching from one monetization step to another. Keep an eye out for intervention aftershocks as the BOJ now can not allow the USDJPY to drop below 80 or it will be all over. This is what global reflation gone nuts looks like. On the other hand, if the BOJ fails to keep the USDJPY above 80 following this action, and the inflows of yen are far greater than anyone expected, most certainly the G7, then we have big problems.

 

The Following is a Must See video...

Jim’s Mailbox

Posted: Mar 17 2011     By: Jim Sinclair      Post Edited: March 17, 2011 at 7:37 pm
Filed under: Jim's Mailbox

Jim Sinclair’s Commentary
Courtesy of CIGA Yahn.

Jim,
This report took a lot guts for both MSNBC and for the reporter that presented the story. But the key point for me sending this out is the mainstream media is actually starting to blow the whistle, which I am very happy to see. However, enlightened ones beware, it is my opinion that the demolition of the Federal Reserve and Central Banking as we know it is part of the Banker’s plan to centralize things even further when the chaos really hits. If we are enlightened to these things we won’t be fooled as easy.
The first link is directly off of MSNBC’s webpage and the story is 12-minutes and 45-seconds long. The second video is a YouTube video that carries the story, but is only 7-minutes long. Nevertheless, rip this video if you can, and have a copy of it for yourself, just in case it may need to be reposted, because, well, you know how things like this can accidentally disappear.
CIGA Yahn
Click here to watch the MSNBC video…

Mike Krieger Asks What Is More Dangerous: Building Nuclear Power Plants On Major Fault Lines Or Allowing Central Bankers To Play God?

Submitted by Tyler Durden on 03/17/2011 13:46 -0400

Ben Bernanke has surrounded all of earth’s inhabitants within a Ring of Fire that will create a monetary earthquake that will very soon ravage the livelihoods of billions (the tremors have already started in MENA). While the headlines are now focused on Japan, the dominos continue to fall in the Middle East and Saudi Arabia and Iran seem to be fighting a proxy war in Bahrain. All of the themes I have discussed in earlier emails are only exacerbated by the Japanese quake as the response has been and will be to print infinite amounts of confetti money and try to secure resources to rebuild with it. The problem is that EVERY nation is doing the same thing. So worthless fiat is being expanded exponentially and will compete for real things and why should the holders of the necessities of life, gold and silver (real money and true financial security) as well as food and energy sell their goods for colored confetti or even worse digital entries in a bank account. If you don’t think the governments of all countries that posses massive resources will not export less and in order to keep more internally to quiet their restless populations you aren’t paying attention. This liquidation selloff in commodities since the Japanese earthquake is probably already over and I expect a HARD reversal to the upside to new highs in food and especially oil. The Asia Tapis benchmark is closed at just under $117/b last night and it a whopping 3% off of the high. Wholesale gasoline prices traded here in the U.S. are down about 4% from the high but are a terrifying 15% higher than a month ago. I expect another major surge in the price of oil imminently. Remember last week I wrote that I thought the Dow and gold would ultimately meet at around 5,000. Can’t imagine how this can happen? Watch the next few months. 

- Mike Krieger 

 

 

 

Barclays Kills Yen Trading During USDJPY Flash Crash, Pulls All Liquidity To Protect Prop Positions

Submitted by Tyler Durden on 03/17/2011 14:46 -0400

In an eerie recreation of the events that transpired during last year's flash crash, among the reasons for the spectacularly wide spreads during yesterday's dramatic yen surge (which was more than just a selloff of in the USDJPY but virtually all carry pairs as we pointed out previously) is that various brokers pulled away their entire market making in the currency. While the full list is those who turned the machines off is still unknown, one company is. According to Dow Jones, "Barclays Capital pulled yen prices off its Barx dealing system for a short period Wednesday, as the Japanese currency fizzed to its strongest levels on record, a person familiar with the situation said Thursday." The reason: "to protect themselves during hectic trading conditions" - but why, remember there is no more prop trading on Wall Street (wink wink). And had others followed suit in Barclays footsteps and withdrawn markets due to a stop loss triggered wipe out in the FX market, compounded by fundamental uncertainty, it is easy to see how the yen may well have surged far, far higher. Luckily, it did not happen this time, although the USDJPY is trading at all all time lows today. On the other hand, if the market, despite trillions in capital injected by the central planners is so jittery it can take out all bids in what is supposedly to be the world's most liquid market on literally a moment's notice, we wonder just what will happen if and when Bernanke announces the end of QE3 and we have a repeat crisis...

Guest Post: Currency Wars: RIP Shadow Banking System, Long Live QEx!

Submitted by Tyler Durden on 03/17/2011 17:50 -0400

The collapse of the Shadow Banking is not resulting in the degree of asset deflation you might expect because the assets deflating are what has been referred to as toxic debt. The underlying basis for these instruments is real estate which is correspondingly being stopped from collapsing by the halting of Mark-to Market and other Fed sanctioned accounting gimmickry. Meanwhile the offsetting Money creation by the Fed is flowing into equities and bonds. This is creating the asset inflation that the Fed wants and needs. A major problem for the Fed is not just being able to generate the amount required to offset the Shadow Banking System erosion, but also the rate at which the it can realistically make this happen. The Fed needs to buy more time. Unfortunately there are other major problems that are boxing them in. 

 

 

 

There Goes Oil

Submitted by Tyler Durden on 03/17/2011 19:08 -0400

An hour ago we said: "Watch for the reaction in crude following the vote passage, and especially following Bloomberg headlines that France has launched an all out attack." Well the attack is still pending, but the oil reaction is here (and nobody could have seen it coming). WTI just passed $103. Demand destruction or no demand destruction, here we come. And just imagine what happens when Japan is fully back on line again (in about a year at which point the US will be between QE 4 and 5). 

 

 

 

And Here Comes The First Batch: Japan To Issue ¥10 Trillion In Earthquake Relief Bonds

Submitted by Tyler Durden on 03/17/2011 19:39 -0400

As was perfectly expected by Zero Hedge, Japan is issuing its first batch of Earthquake relief debt to the tune of ¥10 Trillion. And with massive repatriation flows (as confirmed today when Steve Liesman denied the very concept), and little demand out of domestic purchasers, Japan is about to (re)discover the pleasures of massive quantitative easing. 

 

 

 

And Back To Fukushima, Where Fresh Steam Is Rising From Debris, Which "May Be An Explosion" Or It May Not

Submitted by Tyler Durden on 03/17/2011 21:24 -0400

This is just getting way too deja vu'ish. From Reuters: "White smoke or steam was rising from three reactors, Nos. 2, 3 and 4, at a quake-damaged nuclear plant in northeaster Japan, the nuclear safety agency said on Friday. It said it believed there was still water in the spent fuel pool at reactor No.3." But isn't the whole point of this exercise to get bloody water in the spent fuel pool? And then this: "Smoke or steam rising from the crippled No.2 reactor in northeastern Japan could be coming from the spent fuel pool or from an explosion in the suppression chamber, the nuclear safety agency said on Friday. It said it hoped to fix a power cable to two reactors on Friday and to two others by Sunday." Oh, it could be an explosion. Well, that's ok. It might not be... At least someone somewhere knows something. It sure as hell ain't the nuclear safety agency. But at least the Nikkei couldn't care less about its troubles as it wakes up with a St Paddy's day hangover: a few days of breathing room have been bought. As to how the can is kicked next week, that's a bridge Bernanke's glass house can worry about crossing on Monday.