What Destroyed Rome Was Its Unfunded Government Employee Pensions

May 20, 2011, at 7:50 am
by Jim Sinclair

Jim Sinclair’s Commentary

Our favorite historian is predicting again.
Click image to read Martin Armstrong’s latest in PDF format

Jim Sinclair’s Commentary

Somebody read the prospectus!

Gold Investors Choose Bars Over ETFs in Q1: WGC Published: Thursday, 19 May 2011 | 4:23 AM ET
Investors forsook gold exchange traded funds in the first quarter in favor of coins and bars, the World Gold Council said, with buying of physical investment products helping lift
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Dear CIGAs,

Bank failures since the beginning of this year continued to provide evidence of three realities observed consistently in the past:
(1) the reported value of the banks’ assets turned out to be greatly exaggerated upon failure, when these assets had to be assigned a more realistic, dissolution value;
(2) the
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Domino #2: S&P Downgrades Largest French Retail Banking Group, Credit Agricole, To A+ From AA-, Due To "Greek Exposure" 

Submitted by Tyler Durden on 05/20/2011 13:32 -0400

Yes, banks are indeed on the hook should Greece file. Keep an eye on those Deutsche Bank puts. From S&P: "We consider that French banking group Crédit Agricole (GCA) has a significant sensitivity to Greece's creditworthiness and economic prospects, primarily through subsidiary Emporiki's funding needs and exposure to local credit risk. The downgrades reflect our view that reduced creditworthiness of the Greek sovereign puts pressure on GCA's financial profile, given its exposure to the troubled Greek economy, mostly through its subsidiary Emporiki Bank of Greece (not rated). The downgrade reflects our view that persistent deterioration of the Greek economy induces negative prospects for the local banking sector, which could translate into further material credit losses at Emporiki and/or a sharp decrease in its customer deposits. " 

 

 

 

 

 

Guest Post: Priced In Gold, Is Housing A Buy? 

Submitted by Tyler Durden on 05/20/2011 13:57 -0400

What is the relative value of housing if we price it in ounces of gold? My basic point of view is that nominal prices and broad terms such as deflation, inflation and growth should be viewed with extreme skepticism. The more useful approach is to examine the purchasing power of various assets and the the purchasing power of the income streams generated by those assets. Put another way: to value housing, let's compare the price of a house priced in loaves of bread, or ounces of gold, or barrels of oil to historical norms. Secondly, let's look at the income stream generated by the median-priced home (that is, the median rent and net income after all expenses of maintaining and paying for the rental home are deducted) and ask how many loaves of bread, ounces of gold and barrels of oil that net income can buy. In terms of the median price, it took almost 600 ounces of gold to buy the median priced house in 2005. Then housing collapsed, and gold rocketed from $500/oz to $1,500/oz. As a result of housing declining by 40% and gold tripling, the ratio has plummeted by 80%, from 500 to just above 100. How low can the ratio go? Some might look at the second chart and conclude that the previous bottom around 90, in 1980 when gold shot up to $800/oz, might well mark a bottom in the ratio. 

 

 

 

 

 

Can't a man even Die in Peace?

Suspicious Man In Inflatable Boat With Unknown Device Chained To Neck Close To Surrey, VA Nuclear Power Plant Scrambles Bomb Squad, Sniper Team 

Submitted by Tyler Durden on 05/20/2011 13:03 -0400

A man in a boat has a suspicious device attached to himself several miles away from the nuclear power plant in Surry, Va., according to officials. A Virginia State Police representative said that there is a man on a boat or a raft on the James River, according to WTVR-TV in Richmond. The man is in an inflatable boat and drifting with the current, Bull said. He has a metal chain around his neck and the chain is attached to a black box. Bull said officials have a bomb squad and snipers near the scene out of caution. He said they have tried talking to the man, and that he is coherent and lucid at times, but that it does not last for long. The airspace around the incident is closed, according to WBBT in Richmond, and boaters are being rerouted around the scene.