Jim Sinclair – Gold Milestone at $1,764 Paves Way to $12,000

July 15, 2011, at 7:20 am
by Eric King in the category King World News |  Print This Post |  Email This Post

 

Dear CIGAs,

With gold hitting new all-time highs yesterday in dollars, euros and pounds, today King World News interviewed legendary trader Jim Sinclair and Dan Norcini to get their take on where things stand in the gold market.  When Sinclair was asked about the action in gold he stated, “Gold at $1,764 is as important as gold at $524.90, and above $524.90 the gold market went into a runaway.  It’s the exact same setup at $1,764, but having said that $1,764 should bring in some significant supply. 
However, a move above $1,764 would be the equivalent of $524.90 in the sense that you would go from the runaway that was born at $524.90, into a hyperbolic market.  The key to all of this is $1,764 and you will go above that level, but what that does is lock in four figures on the price of gold.  A move above $1,764 brings into focus prices as high as $12,000, so we are are approaching the most critical milestone in the entire gold bull market…
Click here to read the full interview…

 

 

Moody's Downgrades 7 Portuguese Banks 

Moody's which is already not all that loved in Portugal, is about to make some more friends after it just downgraded the 7 biggest Portuguese banks, all of which, incidentally, passed the Stress Test that nobody remembers any more. 

 

 

 

 

 

...Weiss Chimes In: Verdict - C Minus 

Weiss Ratings, an independent rating agency of U.S. financial institutions and sovereign debts, has downgraded the debt of the United States government from C to C-minus. 

 

 

 

 

Rosenberg On The Debt Ceiling 

When it comes to the debt ceiling, we have heard everyone and the kitchen sink's opinion on this issue at this point. Yet one person who has been silent so far is the original skeptic David Rosenberg. Summarized: "Despite the fear mongering, the U.S. government is not going to default. Any backup in bond yields from a failure to cobble together a deal will drive market rates down because of the deflationary implications from the massive fiscal squeeze that would ensue at a time of a huge 5% output gap. Even if there were to be some sort of "buyer's strike" if the U.S. were to be defaulted, rest assured that the Fed would step in aggressively." Obviously to a mega bond bull like Rosenberg, this is the only possible outcome. After all an alternative would mean the central planners have failed, and the most artificially inflated security in the history of man: US bonds, which are only there because they are the "best of all evils" was enjoying an extended "ignore the emperor's nudity" sabbatical... which alas does not change their evilness, nor is this equilibrium stable once more and more realize it is all about gold at the end of the day. And as yesterday demonstrated when existential fear grips the market, the impossible does happen, and both bonds and stocks can sell off, and in the process lead to all time records for gold. Bookmark July 14: it is a harbinger of what is coming. 

 

 

 

 

Goodbye Teenage Wasteland: Bank Of America Pulls A Benjamin Button, Reenters Single Digits 

It was fun while it lasted. Next up: 1 to 10 reverse split? At least that way the bank will now only hit but triple John Paulson's $30 price target by the end of 2011. In the meantime, only $50 cents or so to go until BAC hits Paulson's cost basis. 

 

 

 

 

 

 

 

No, There Is Nothing Strange About The Surge In The Adjusted Monetary Base In The Past Two Weeks 

In the past two days, both UBS Andy Lees, Dennis Gartman (of the world renowned Gartman ETF which is just off its all time lows), and now even Art Cashin, have been stumped by the "dramatic" increase in the M2 and the Adjusted Monetary Base. To wit, per Art Cashin's take of Andy Lees' recent note: "US M2 money supply surged by USD88.7bn for a 2 week gain of USD165.6bn without any compensatory rise in the Fed’s balance sheet. Andy goes on to ponder whether this has been conscientious attempt by the government to beef up as QE2 ends. There is some evidence but not fully conclusive." Actually no, there is no evidence, and unlike many other instances of shadiness involving the Fed, this is not one of them.

  

Von Rompuy Just Tweeted A Financial Stability Meeting Will Be Held July 21: "Soft" Greek Default Coming? 

Herman Van Rompuy just tweeted the following:

I have decided to convene a meeting of the Euro area Heads of State or Government on Thursday, 21 July, at 12.00 in Brussels. Our agenda will be the financial stability of the Euro area as a whole and the future financing of the Greek programme. I have asked the preparatory work to be brought forward inter alia by the Finance Ministries.

Perfect timing for the announcement of a "soft" Greek default: just a day before the US debt ceiling legislative deadline. Are we going to see a major market crash next week just so everyone is reminded of what all is at stake?

Stress Test 2 Results Are Out: 8 Banks Fail - 5 Spanish, 2 Greek, 1 Austrian 

The farce continues: Moody's predicted 26 failures, Eurostat gives us 8. EBA says 5 Spanish, 2 Greek, 1 Austrian Bank fail as of April 30; EBA says 7 Spanish, 2 German, 2 Greek, 2 Portuguese barely pass. EBA says 16 of 90 banks had core capital of 5% to 6% and will have to take action to improve capital buffers. EBA says EU banks average CT1 7.7% in adverse Scenario, as of April 30. Looking forward to next year's Stress Test. As expected, risk is broadly on in the EUR, as the "sell the farce" moment approaches. The reason why the bank rollover is so urgently pushed is because two thirds of all Greek debt is held by Greek banks who then pledge it back to the ECB at par. Specifically, 67% of Greek debt is held by Greek banks, 9% by German banks, and 8% by French banks. Then these same Greek banks that "roll" their Greek sovereign debt receive even more cash handouts from the Greek central Bank, which in turn is funded from the ECB, while at the same time providing collateral to the standalone banks. Biggest Ponzi clusterfuck ever.

  

Here Are The 29 Public Companies With More Cash Than The US Treasury 

As was pointed out yesterday, courtesy of a blistering $80 billion cash burn in the first half of July, Tim Geithner managed to reduce Treasury cash balances from $130 billion to $39 billion. Granted this number will increase next week after this week's $66 billion in Treasury auctions settle, only to drop once again when another batch of Bills mature and are not rolled. So in response to various inquiries we present the 29 public companies that hold more cash than the US Treasury does as of July 13 (Geithner is tied with Google at $39 billion). Not very surprising, two of the top 3 are Chinese companies. The third? Bank of America... Surely there is a good reason why BAC is preparing for rainy days. 

 

 

 

 

 

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