We The Sheeplez- The Coming Economic Collapse.."A Nation Of Sheep Ruled By Wolves" Thomas Jefferson

Monday, July 11, 2011

If You Thought 2008 Was Bad...

Posted by: Phoenix Capital Research

Post date: 07/11/2011 - 13:59

Politicians who have all been bought out by the banks have fallen for this charade so far. But it won’t last much longer. Banks may get you elected… but they can’t keep you safe from a populace that is rioting outside your door. So the banks will all be taking a BIG hit in the future. This in turn will kick off another 2008 episode along with food shortages, civil unrest, outbreaks in crime, bank holidays, and the like. It will, in short, be like what’s going on in the Middle East today (though NATO won’t be bombing us).

Spanish Region "Discovers" Its Budget Deficit Is Double What Was Previously Thought

There was a time when countries would use Goldman's "innovative" currency swaps to hide billions of debt off the books. Those days are gone. Now governments, at both the state and regional level, just outright lie about what their deficit and debt is. Case in point, Spain's Castilla La Mancha region, best known for being the stomping ground for one Don Quixote, where the cities of Toledo and Albacete are located, has just announced that it has "a budget deficit more than twice as large as previously thought, raising new concerns over the true state of regional finances and helping to send Spain's risk premium to new historic highs. Castilla La Mancha President Maria Dolores de Cospedal said her government will present Tuesday the first results of the audit she announced after being elected in nationwide regional and municipal elections on May 22." What? Politicians lying about the state of their finances only for it to be uncovered that things are 100% worse? Say it isn't so. And why on earth couldn't Spain just open a local branch of the BLS: it would have absolutely no problem hiding its manipulated economic data. Too late now...

Euro Finance Ministers Break As Greek PSI Plans Crumble

Submitted by Tyler Durden on 07/11/2011 15:40 -0400
In other words, as Dow Jones reports, negotiations over participation of European banks in the Greek bailout at Eurofin meeting have broken down. That is all.

Oxford Economics Looks At The Role Of Gold Under Inflation And Deflation, Finds Average Gold Holdings Should Be At Least 5% Of AUM

Predicting the future in general is a fool's game, while anticipating inflection points, we have often said, is for market oracles and dummies. That said, one can easily anticipate general themes. The inevitable implosion of an unsustainable economic model is one of them. The only question is how does one hedge best for an event like this. In the past 3 years, precious metals, primarily gold, have served as arguably the best hedge to the absolute loss of purchasing power of the global fiat system. And with increasing global instability, the prominence of gold will only rise. A just released must read analysis by Oxford Economics titled "The impact of inflation and deflation on the case for gold" finds just that, and culminates with the dramatic conclusion that "gold's optimum share of a portfolio to be around 5% in a base long-term case for the UK featuring 2.25% growth and 2% annual inflation. This is higher than levels found in typical mainstream investment portfolios, although this may be in part because the analysis does not include other assets such as index-linked bonds, foreign securities and other commodities." Based on anecdotal analyses, gold holdings on average at the institutional level are about 1% or less. Which means that a qunitupling in buying interest will have dramatic implications on the future price of gold (it is no secret that we have been and continue to be very bullish on gold). And just like "nobody could have predicted" the implosion of Italy, so soon nobody will have been able to predict gold rising to $2,000, $3,000 and other multiples of $1,000. Which is precisely what will happen as the next and possibly final lap in the global currency devaluation game is nearly upon us. The only beneficiary will be the one instrument that retains its absolute value as fiat around the world is relatively devalued against one another. Regardless, while the attached study does not break any undiscovered secrets, it is a must read for everyone who is still on the fence, or is considering taking profits with gold once again just shy of its all time nominal price.

Advance Look At Bernanke's Humphrey-Hawkins Testimony - Will Jackson Hole Come Early This Year?

It's that time again when almost half a year after his first 2011 presentation to Congress and Senate in the semi-annual Humphrey-Hawkins, Bernanke will update the Hill with his latest outlook on monetary policy. And while the first such testimony earlier in the year was uneventful as it occurred at a time when the flawed belief that the US economy was growing was still prevalent, there is a peculiar sense of deja vu'ness. As JPM's Michael Feroli observes: " it may be helpful to recall last July's Humphrey-Hawkins testimony when, like now, the growth data had been seriously disappointing. Bernanke's testimony fell flat: the Chairman sounded tone-deaf, discussing plans for exit strategies, and markets rolled over, with stocks off over 1% on the day." Feroli continues: "The Chairman does seem to learn from his miscues -- there haven't been any further Maria Bartiromo incidents -- and we expect he will be more mindful of the downward momentum of the recent data." Does this mean that the Chairman may hint at a change in monetary strategy, especially if July regional Fed updates confirm the ugly NFP data? Most say no, but not Bill Gross, who as is well known, expects the first QE3 hints to be dropped in August. Perhaps Bernanke will decide to surprise the market again and pull that forward by one month? Read the full Feroli note below.

Commentary From the Resident BoomBustBlog Trader: Focus on Currencies

Posted by: Reggie Middleton

Post date: 07/11/2011 - 13:56

Now it could be time to look at charts on the EUR again. the natural fundamental trade is not EUR against USD or JPY, but to find a currency in a country will little or no debt. despite their own real estate bubble, from what i read, CAD or much better AUD and NZD might be candidates. CHF despite UBS and CSFB should be as well. notice how the Swiss authorities have tightened the management of these 2 institutions, pressing them to recapitalize as much as possible and targetting higher capital ratios than Basel III.