Economy falling over a cliff

Harvey Organ, Saturday, June 4, 2011

Economy falling over a cliff

Richard Russell: Gold will be "the last man standing"
"During hyper-inflation or deadening deflation, when 'all is lost,' gold holds its attraction..." 





Far and away, this is why the euro can't be saved
"The people of Europe want an exit from this sinking ship..."  




 

Goldman Dodges a Libyan Bullet - A MUST READ

Goldman invested $1.5 billion for the Libyan sovereign wealth fund in 2008, according to a report in The Wall Street Journal. It lost 98 percent of the money.

In an effort to placate outraged Libyan officials, Goldman executives attempted to sell preferred shares of the firm to Libya.

And this is where the feeling of relief comes in.

“The last thing we need right now would be headlines reading ‘Vampire Squid Profits Funding Libyan Dictator,’” one senior Goldman investment banker told NetNet. [We agreed not to identify him, because bankers are not really supposed to talk to reporters, except under very limited and controlled circumstances.]

The United States has been bombing Libya for months—and Gadaffi is back on the list of official villains.

I'll bet you a fair amount of coin that Rolling Stone magazine's Matt Taibbi must have laughed hysterically when he read this piece...and you should too.and the link to this must read story is here.

American Eagle silver sales so far in 2011 best in 25 years

With sales of no less than 3.65 million ounces of new American Eagle silver coins in May, silver coin sales by the U.S. Mint are reported to be at their highest ever from U.S. Mint data going back to 1986. Indeed May sales were even 30% higher than April's 2.819 million ounces, which in itself was the best ever April on record. This brings the total sale of American Eagle silver coins to 18.9 million ounces so far this year. Last year's sales over the same period amounted to 15.2 million ounces.

This is a short piece posted over at the mineweb.com yesterday..The link is here.

Remembering the Nickel Default of 2006

In August 2006, Ted Butler observed the London Metal Exchange default (excerpts below). As we get closer to the inevitable fall of the Crimex, it seems proper to recall how the nickel default of 2006 went down.

The investment world witnessed an event that has only occurred rarely in the past. I am referring to the extraordinary developments in the nickel market on the London Metals Exchange (LME), the largest base metals exchange in the world. Due to an unprecedented scarcity of metal, the LME was forced to revise the delivery terms of its nickel contracts.

Default is a simple word. Any time you unilaterally violate or negate the terms and conditions of any legal contract, that contract is in default. Period.

Moreover, a simple analysis of the situation reveals that the LME is aligning itself with the interests of the naked shorts in nickel, as common sense should tell you that no long holder asked the exchange to suspend the delivery obligation of the shorts.

This is a must read article...as is silver analyst Ted Butler's original 2006 essay entitled "First Nickel, Then Silver". and the link to both is here.

Jim Sinclair commentary


Gold’s Summer Doldrums Normally See Weakness but Fundamentals Could Lead to Surge International Business Times
Commentators such as John Embry, James Turk and Jim Sinclair who have called the market right for some time say that the extraordinary macroeconomic, monetary and geopolitical risk in the world today could see gold and silver bullion prices surge this …
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Jim Sinclair’s Commentary

Here is the latest from John Williams’ ShadowStats.com.

- Softer Employment Picture Reflected Minor Catch Up In Distorted Data � Much Weaker Data Loom Despite Ongoing Reporting Quality Issues
- Annual Growth in May Payrolls Slowed Anew
- May Unemployment Rates: 9.1% (U.3), 15.8% (U.6), 22.3% (SGS)
- Broad Money Supply Growth Jumps Again
"No. 371: May Employment and Unemployment"
http://www.shadowstats.com





Jim Sinclair’s Commentary

An act of war? An act of stupidity? A switch transaction?

Libya’s Goldman Dalliance Ends in Losses, Acrimony MAY 31, 2011
BY MARGARET COKER AND LIZ RAPPAPORT
In early 2008, Libya’s sovereign-wealth fund controlled by Col. Moammar Gadhafi gave $1.3 billion to Goldman Sachs Group to sink into a currency bet and other complicated trades. The investments lost 98% of their value, internal Goldman documents show.
What happened next may be one of the most peculiar footnotes to the global financial crisis. In an effort to make up for the losses, Goldman offered Libya the chance to become one of its biggest shareholders, according to documents and people familiar with the matter.
Negotiations between Goldman and the Libyan Investment Authority stretched on for months during the summer …
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Jim Sinclair’s Commentary

This will put extreme pressure on Saudi Arabia, helping Iran’s interest.
This is NOT spontaneous democracy. It is intrigue at the highest level.

Bahrain police open fire at protesters in capital Jun 3, 9:27 AM (ET)
By BARBARA SURK
DUBAI, United Arab Emirates (AP) – Bahraini police fired tear gas and rubber bullets at protesters marching toward the landmark Pearl Square in the country’s capital Friday, two days after authorities lifted emergency rule.
The downtown square was the focus of weeks of Shiite-led protests against Sunni rulers earlier this year. Witnesses in the tiny island kingdom said there were no immediate reports of casualties among the hundreds of opposition supporters who again took their grievances to the streets.
The country’s security force moved against the protesters shortly before Formula One’s governing body deemed the kingdom safe enough to host the Bahrain Grand Prix in October.
The annual F1 race has been Bahrain’s most profitable international event since 2004, when the island nation became the first Arab country to stage the Grand Prix. Bahrain organizers insisted they are ready to host the race this year despite the deadly crackdown. The season-opening March auto race was postponed because of political unrest.
The Bahraini government lifted emergency rule Wednesday.
Tanks and soldiers left the heart of capital, but authorities warned they were not easing pressure on anti-government protesters. Opposition groups have called supporters to return to the streets, the first such appeal since the military overran the protesters’ encampment at Pearl Square after martial law was imposed in mid-March.
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Jim Sinclair’s Commentary

More debilitating records being set.

U.S. runs up massive trade deficits with China, Mexico, Japan and Germany by G. Scott Thomas
Friday, June 3, 2011, 1:00am EDT
The United States ran up a trade deficit of more than $10 billion with four different countries. And it took just three months to do it.
America’s balance of trade with China, Mexico, Japan and Germany plummeted more than $10 billion into the red during the first quarter of 2011, according to new figures from the U.S. Bureau of Economic Analysis.
The worst imbalance is with China. American companies exported $26 billion of goods to China in January, February and March. But American consumers purchased more than $86 billion of imported Chinese goods during the same three-month span.
The resulting U.S. trade deficit with China: $60.20 billion in the first quarter alone.
The next-largest American deficits for the quarter were $16.33 billion with Mexico, $16.28 billion with Japan, $11.00 billion with Germany and $9.63 billion with Canada.
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