Lets move to DEFCON 2/ global situation deteriorates.

Harvey Organ, Monday, July 11, 2011

Lets move to DEFCON 2/ global situation deteriorates.

 

Quote from Harvey Organ... You have been Warned...

"The two ETF's that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.

There is now evidence that the GLD and SLV are paper settling on the comex.

Thus a default at either of the LBMA, or Comex will trigger a catastrophic event."

 

 

Gold now poised for a technical breakout to the upside

Trader Dan at Trader Dan's Market Views - 16 minutes ago

Sovereign debt fears out of the Euro Zone are filling investors' minds with fear and trepidation as many believe a contagion effect is inevitable. News concerning Italy has sent stock market bulls scurrying for cover today and has emboldened the bears who have been mericlessly squeezed out over the last two weeks once the S&P was miraculously recussitated from the 1250 level on the price charts. The thinking is that a rash of credit downgrades might commence hitting large bank balance sheets in particular which would have a similar effect on Europe as the collapse of Lehman did on th...

David Rosenberg: "How Can There Not Be A QE3?" 

How indeed...

 

Meet America's 51st (Broke) State 

Submitted by Tyler Durden on 07/11/2011 18:23 -0400

It is only fitting that a few days after South Sudan became the newest independent country to join the roster of IMF and World Bank "modernization and industrialization" targets, another Southern version of something should break apart, although some may be surprised that this latest secession is not somewhere in the middle of Africa, but in America's own insolvent back yard. Meet Southern California. "Accusing Sacramento of pillaging local governments to feed its runaway spending and left-wing policies, a Riverside County politician is proposing a solution: He wants 13 mostly inland, conservative counties to break away to form a separate state of "South California.'' Supervisor Jeff Stone, a Republican pharmacist from Temecula, called California an "ungovernable'' financial catastrophe from which businesses are fleeing and where taxpayers are being crushed by the burden of caring for welfare recipients and illegal immigrants." Ah yes, the heart of prosperity that is the Inland Empire, known for such great achievements as Hell's Angels, the most ridiculous excesses of the housing bubble, Del Taco, and... that's pretty much it. This sounds like yet another Swiss Watch plan. 

Ratio Of Insider Selling To Buying: 3,700 To 1 

This is kinda like if one is a 2nd year corp fin analyst, and just as the 300 tab excel model showing the massive synergies from the pitched M&A deal is supposed to be presented to the client, the whole thing #Refs out... And hasn't been saved for days. According to Bloomberg, in the last week the ratio of insider selling to buying on the S&P was 3,700x.... 3,700x!!!!!

Comedy Hour: Full Letter From A Pissy G-Pap Blasting His Rescuers And Confirming Beggars Can Be Choosers 

Yep. G-Pap, up until a week ago completely reliant on the good will of Europe to prevent a revolution in Athens, has now turned the tables on his saviors and has dispatched a scathing letter blasting his rescuers: ""Crunch time" has arrived and there is no room for indecisiveness and errors such as: (1) taking decisions that in the end prove 'too little, too late' to convince the markets we are serious; (2) making compromises that satisfy our internal political 'red lines' that in the end substitute tactical politics for sound management of the crisis (although I do recognize the problems some governments have and the democratic demand for a greater say of Parliaments in trying to deal with this crisis); (3) failing to use in-depth technical analysis and consultation before decisions are made; (4) allowing a cacophony of voices and views to substitute for a shared agenda, thereby creating more panic than security; (5) nd I would add more global issues such as doing nothing substantive about the destabilizing role of the rating agencies, credit default swaps, tax havens or about plausible new revenues such as a financial transaction tax....The above have in one way or another had profound effects on my country and others facing similar challenges." Yeah, it's all Europe's fault Greece is broke. And the vile, evil speculators of course. 

In The News Today

July 11, 2011, at 12:53 pm
by Jim Sinclair 

Geithner says hard times to continue for many AP – Sun, Jul 10, 2011
WASHINGTON (AP) — Treasury Secretary Timothy Geithner (GYT’-nur) says many Americans will face hard times for a long time to come.
He says President Barack Obama rescued the United States from a second Great Depression and will keep working to strengthen the economy. But Geithner says will be some time before many people feel like the country is recovering.
Geithner tells NBC’s "Meet the Press" that it’s a very tough economy. He says that for a lot of people "it’s going to feel very hard, harder than anything they’ve experienced in their lifetime now, for a long time to come."
More…





Jim Sinclair’s Commentary

Using your credit card to pay the mortgage never works. An increase of the debt limit is a terminal strategy.

U.S. Must Borrow Another $5,240 Per Household Just to Fund Gov’t at Current Level Through Sept. 30 Sunday, July 10, 2011
By Terence P. Jeffrey
(CNSNews.com) – President Barack Obama and congressional leaders seeking to negotiate a deal to increase the legal limit on the federal government’s debt, would need to agree to increase that debt by $615.865 billion between now and Sept. 30, just to keep the government going at current spending levels, according to the CBO’s latest estimate of the fiscal 2011 deficit and the Treasury Department’s latest accounting of the federal debt.
Given that the Census Bureau estimates there are now 117,538,000 households in the United States that means the federal government must borrow an additional $5,239.71 per American household just to maintain the current federal spending level through Sept. 30.
The $615.865 billion in new debt needed between now and Sept. 30 (the last day of fiscal 2011) will decrease only to the degree that Obama and Boehner and the other congressional leaders agree to cut near-term federal spending that is scheduled to take place between now and Sept. 30.
Whatever cuts the president and congressional leaders agree to make two or three years from now—when many of them may no longer be in elective office—will have no impact on the amount of money the Treasury will be forced to borrow in the remaining 82 days of this fiscal year.
Were President Obama and congressional leaders to agree to cut a half a trillion dollars ($500 billion) from the federal spending already scheduled to take place between now and Sept. 30, the federal government would still need to increase the debt another $115.865 billion during those 82 days.
According to the latest estimate of the Congressional Budget Office, which was published on April 15, the federal deficit will reach $1.399 trillion this year under current spending and taxing levels.
More…





Jim Sinclair’s Commentary

It is the rock and the hard place for economic managers.
Whichever way you go, the destination is the same – Debt Failure.

Whatever Happens, Commodities Win: Jim Rogers Published: Monday, 11 Jul 2011 | 2:46 AM ET
Patrick Allen
CNBC EMEA Head of News
Following Friday’s disappointing jobs data and a big jump in Chinese inflation over the weekend, Jim Rogers, the CEO and Chairman of Rogers Holdings, told CNBC that no matter what happens to the global economy, he will make money with his commodity positions.
“If the world economy gets better, I earn money on commodities. If the global economy gets worse then they will print more money and I will make money in commodities,” Rogers said in an interview with CNBC on Monday.
With the commodities market highly correlated with the greenback in recent months, Rogers said he is also long the dollar.
“I am long the dollar as everyone was bearish. So I am long the dollar. In five years I may not be not be long the dollar but I am now. The dollar and commodities do not have to move in correlation despite what you see on CNBC,” Rogers said.
Despite all the volatility on global markets Rogers said he was keeping it simple.
“I am long commodities and own a number of currencies. I am short long-dated US Treasuries, I am short US technology, one major US bank and emerging markets,” he said.
More…





Jim Sinclair’s Commentary

Expansion in every sense must continue in the economic political US circumstances.

Real Unemployment Rises to 16.2% in June — 25.3 Million People Friday, July 08, 2011
By Matt Cover
(CNSNews.com) – The real unemployment rate rose to 16.2 percent in June, the Bureau of Labor Statistics (BLS) reported on Friday, marking a return to levels not seen since January 2011.
The “real” unemployment rate is technically a combination of three measures of unemployment: the unemployment rate, the number of people working part-time who want full-time work, and the number of people “marginally attached” to the workforce.
Those who have left the workforce but would still like to be employed are considered marginally attached.
This figure is considered a more complete measure of unemployment because it captures a broader spectrum of those affected by the weak economy. Merely counting those who apply for unemployment benefits as “unemployed” does not fully account for everyone who is out of work or underemployed.
This real unemployment rate – known as the U6 rate – has been climbing since February 2011 when it was at 15.9 percent. Real unemployment peaked in October of 2009 at 17.4 percent, before falling into the 16 percent range for much of 2010.
It now appears that the real unemployment rate is returning to its 2010 levels, trending upward after staying slightly below 16 percent from February to May.
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Jim Sinclair’s Commentary

China’s takeover of African minerals continues unabated while the West deals with politically intractable deficits.
No wonder China is about to lead the world, but into what?
China is a Maoist nation that wishes to financially rule the world via buying key industries internationally, especially in Africa.

Vale Won’t Raise Metorex Bid, Paving Way for $1.36 Billion Jinchuan Deal By Carli Lourens – Jul 11, 2011 10:07 AM MT
Vale SA (VALE3), the world’s largest iron- ore producer, said it agreed to terminate its proposed acquisition of Metorex Ltd. (MTX), paving the way for a rival $1.36 billion bid from China’s Jinchuan Group Co. to win control of the copper company.
“Vale has no intention to match the terms of the recently announced offer for Metorex,” the Rio de Janeiro-based company said in a statement today. Metorex asked Vale to terminate its proposal after Vale notified the Johannesburg-based company that it won’t amend its 7.35 rand ($1.08) a share offer to beat Jinchuan’s 8.90 rand a share.
Vale’s withdrawal will become effective once Metorex pays Vale a previously agreed 75 million-rand ($11 million) break-up fee, Metorex spokesman Jacques de Bie said today by telephone.
The battle for Metorex’s copper and cobalt mines in Zambia and the Democratic Republic of Congo pitted Vale against China’s biggest nickel producer as companies from the largest natural- resource consumers scour Africa for mines. The Chinese are “aggressive and hungry” for raw materials, Liberian President Ellen Johnson Sirleaf said last month.
“The decision is consistent with Vale’s rigorous discipline in capital allocation,” the company said in the statement today, adding it has “significant growth opportunities.”
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Jim’s Mailbox

July 11, 2011, at 10:35 am
by Jim Sinclair 

The Dollar’s Slump Is Not Over 

CIGA Eric


Headline logic demands no further questions. I have one. If the dollar’s decline is over, what’s the basis of its strength – other fiat? That’s similar to better business councils across America suggesting that companies do business with them because they have the best garbage.
Gold is the premiere global currency that headlines cannot recognize. The definition of "best currency forecasters" (see headline below) implies a lot of flexibility.
US Gold
Euro Gold
Swiss Gold
Yen Gold
C$ Gold
Headline: Best Currency Forecasters Say Dollar Slump Over
The best currency forecasters say the dollar’s 13 percent slide over the past year is coming to an end as Europe’s deepening debt crisis discourages bets against the world’s reserve currency.
Led by Schneider Foreign Exchange Ltd., the five most- accurate firms during the six quarters through June 30 as measured by Bloomberg see the dollar trading at $1.42 per euro on average by year-end, compared with $1.43 on July 8. Against the yen, they predict the greenback will rise to 83 from 80.64.
While Moody’s Investors Service added to Europe’s woes last week by lowering Portugal’s credit ranking to junk, the dollar is regaining its status as a haven after the worst performance over the past year among 10 developed-market currencies based on Bloomberg Correlation-Weighted Indexes. The dollar is up 5.3 percent from a 17-month low on May 4 against the euro.

Source: finance.yahoo.com

More…

Ambrose Evans-Pritchard: German 'nein' leaves Italy and Spain in turmoil

Submitted by cpowell on Mon, 2011-07-11 20:59. Section: Daily Dispatches

How awful of those nasty Germans to resent paying for the loose living of others!

* * *
By Ambrose Evans-Pritchard
The Telegraph, London
Monday, July 11, 2011
http://www.telegraph.co.uk/finance/8631219/German-Nein-leaves-Italy-and-...