The Safe Banking Fantasy
By: Gary North




International Forecaster June 2011 (#3) - Gold, Silver, Economy + More
By: Bob Chapman, The International Forecaster








Gold Falls Along With Stocks As Euro "Faces First Default", Fed's Low-Rate Policy "Will Push Gold Higher"
By: Ben Traynor, BullionVault




Investing in Precious Metals: Comex Taking Physical Blows Left and Right 

Death By Debt 

One of the conclusions that I try to coax, lead, and/or nudge people towards is acceptance of the fact that the economy can't be fixed. By this I mean that the old regime of general economic stability and rising standards of living fueled by excessive credit are a thing of the past. At least they are for the debt-encrusted developed nations over the short haul -- and, over the long haul, across the entire soon-to-be energy-starved globe. The sooner we can accept that idea and make other plans the better. To paraphrase a famous saying, Anything that can't be fixed, won't. The basis for this view stems from understanding that debt-based money systems operate best when they can grow exponentially forever. Of course, nothing can, which means that even without natural limits, such systems are prone to increasingly chaotic behavior, until the money that undergirds them collapses into utter worthlessness, allowing the cycle to begin anew.

Much Ado About OPEC: Russia Is The True Wildcard, And Just Got Even More Powerful 

Submitted by Tyler Durden on 06/08/2011 11:56 -0400

Today the world is transfixed with the dissolution of OPEC courtesy of yet another polarizing response to the most recent set of US MENA policies, with Saudi siding with the US (it has no choice in this: recent violent developments in the MENA region means Saudi Arabia is now even firmer attech to Uncle Sam's armed sleeve), yet the truth is that this is a completely non-event from a pure crude supply/demand perspective. Why? Because the real marginal supplier, in light of OPEC's secular decline in output, has been Russia for a long time. The Globe and Mail's Jeff Rubin explains: "Other than a gratuitous gesture to their concerns, any announced OPEC production increase isn’t going to pump more gasoline into U.S. gas tanks or, for that matter, the tanks of motorists anywhere in the OECD... Khalid al Falih, chief executive officer of state-owned Saudi Aramco, recently warned in April that at the country’s current rate of growth in domestic oil consumption, Saudi Arabia would burn a staggering 8.3 million barrels a day of its own oil by 2028. That is almost its current level of production." In other words, Saudi would promote unilateral actions regardless of the other 6 countries that just isolated the Middle East country, simply to keep its population happy with ever greater bribes, but also due to the expansion of its own economy (as transient as it may be). The real story is here: "Russia, the one country actually capable of producing 10 million barrels a day, isn’t even at the table at the OPEC meeting. And it’s been Russia that has been adding the most to world exports over the better part of the last decade as OPEC exports have faltered." In other words, now that the former cartel is finished, and supply bickering and uncertainty portend extreme crude volatility, Russia's role in the energy output scene, and thus in political in general, is about to become that much more important.

Your Chance For A Live Q&A With CBO Founding Director Alice Rivlin On "The Nation's Debt And Fiscal Health" 

Submitted by Tyler Durden on 06/08/2011 12:29 -0400

Beginning at 12:30 pm, the Brookings Institute is hosting a live Q&A via CoverItLive with Congressional Budget Office director Alice Rivlin, who will field questions relating to the nation's debt and fiscal "health." Click on the screen below to be taken to the live Q&A.

Troica Report: Next Aid Disbursement Can Not Take Place Until Greece Corrects Underfinancing In Adjustment Program 

Submitted by Tyler Durden on 06/08/2011 12:58 -0400

Reuters has obtained an advance peek at the crucial Troica report whose findings will determine Greece's fate, and according to Andreas Rinke the conclusion is not very palatable: "The EU, ECB and IMF mission to Greece said in a report obtained by Reuters on Wednesday that the next disbursement of Greek aid could not take place until it corrected the under-financing in its adjustment program." More from Reuters: "The long-awaited report by the so-called "troika" said Greece risked missing its deficit targets without further consolidation measures and that its recession appeared to be longer and deeper than initially expected. "The financing strategy needs to be revised. Given the remoteness of Greece returning to funding markets in 2012, the adjustment program is now under financed," it said. "The next disbursement cannot take place before this under financing is resolved." The troika said a privatization agency with an independent board, to which the European Commission and euro zone member countries could nominate members, would be set up shortly." We fail to see how the Troica can be satisfied by Greek economic data in the next month or so when Greece is expected to run out of money. Hopefully there is more to this because otherwise this ia very unpleasant conclusion for the insolvent country.

US Prices First Sub-3% 10 Year Bond Since November 

Submitted by Tyler Durden on 06/08/2011 13:13 -0400

Today's 10 Year bond (CUSIP: QN3) priced at a solid 2.967%, just wide of the when issued 2.961%, the lowest high yield since November's 2.636% when QE2 was starting (in the form of POMOs, QE2 had long been priced in). The Bid To Cover confirmed the strength of the auction coming at 3.23, a jump from May's 3.00, and higher than the LTM average of 3.10. Indirect Bidders for the first time in 3 months surpassed 50%, taking down 50.6%, with Dealers allotted 41% and the remaining 8.3% going to Directs. Look for QN3 OTR to dominate POMOs over the next 2 weeks. Since there will likely be at most two more 10-year focused buybacks, Dealers will be able to promptly flip this bond to the Fed. As for next month, when the US is on the verge of a full blown default, it is unclear what happens.

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