The Ultimate Currency Is Gold

Admin at Marc Faber Blog - 1 hour ago

The ultimate currency is gold...and silver. - *in KWN* *Related: SPDR Gold Trust (ETF) (NYSE:GLD), iShares Silver Trust (ETF) (NYSE:SLV)* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.*

Guest Post: Should I Buy Gold At Its All-Time High?

There’s one question that I’ve been seeing over and over for the last several weeks as the price of gold has taken out its all-time highs and continued a nearly uninterrupted ascent: Should I buy gold now? It’s understandable, especially for people who don’t own precious metals yet. Nobody wants to be the sucker who buys gold at the top, only to watch it crater back to $1200 or below. But here’s some food for thought...

Direct Bidders Push Very Ugly 5 Year Auction Through Finish Line

SSDD in the just completed 5 Year $35 billion auction. With the When Issued trading at 1.565% into the pricing, the auction came at 1.58%, confirming there was some serious lack of understanding into the close. The Bid To Cover was 2.62, a modest jump from June's 2.59, but still on par among the lowest BTCs in the last year. The ugliness behind the headlines was once again concentrated, with directs surging to the highest since November at 14.6%, obviously an artifact of the end of QE2 as "someone" has to pick up the slack. Indirects dropped to 36.6%, well below the average LTM 41.3% in the past year. Dealers were left on the hook with 48.8% of the take down. Altogether this was a very ugly auction which spooked the bond market, which received another punch in the face after the Treasury admitted that despite rosy estimates by Barclays and others it has not seen a surge in tax receipts (thank you unemployment) and will not have enough cash to last it through August 15 (at which point all the case runs out period).

Durable Goods Tumble! <- Proof the Economy is Busting

Author: goldnews | Filed under: Economic News Durable goods orders for June fell -2.1% while expectations were for a rise of 0.3% and the previous reading was 1.9%. This is a clear sign the economy is back in the bust phase of the business cycle.
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This Time The Debt Ceiling Hike Really Is Different

Yes, indeed it is. While everyone and their grandmother is foaming at the mouth how both republicans and democrats hiked the debt ceiling for umpteen times over the past x years, the truth is that never before has the ratio of the proposed debt ceiling to the tax receipt ratio been as high as it is now. At nearly 6 times, this means that the top line (forget bottom line) cash inflows into the Treasury are 6 times lower than the current debt ceiling. And following the upcoming $2.5 trillion this number will surge to almost 8 times. So please ignore the next "pundit" who is complaining about the hypocrisy of not agreeing to an outright debt ceiling hike this time around - as usual they have no idea what they are talking about.

Washington Soap Opera Update

Apparently the GOP has cancelled its press conference scheduled for 10am, however now we have the democrats taking their place at  11:45 as Harry Reid is now expected to hold a conference 15 minutes before noon. In other news, there is some unconfirmed and likely 100% wrong rumor that a debt deal has been reached.
Update to the update:

• No deal: U.S. SENATE DEMOCRATIC LEADERSHIP AIDE SAYS "THERE IS NO DEAL" YET ON DEBT LIMIT, IN RESPONDING TO MARKET RUMORS

Boehner v Reid Proposals: A Compare And Contrast Cheat Sheet

If anyone actually cares, the Committee for a Responsible Federal Budget has released the following handy summary cheat sheet which compares and contrast the key aspects of the Boehner and Reid proposals. We suggest nobody spend more than 2 seconds skimming through these as both will be vastly reworked by the end of trading today.

Watch Harry Reid's First TV Appearance Of The Day

Submitted by Tyler Durden on 07/27/2011 - 11:52 MSNBC The trite soundbites:

• Senator Reid holds news conference on debt limit talks, says Democrats have compromised on debt limit, time for Republicans to “face facts.”
• Says Senate bill can reach $2.4 trillion cut
• “Confident” final bill will raise debt limit through 2012
• Schumer says it is time for Boehner to pull the plug on his plan
• Schumer says block of republicans can't lead nation off a cliff
• Says Reid's plan offers potential to break impasse
• Says Senate bill "is the better bill"

Nomura: US Downgrade May Cause Repo Market Liquidity Freeze

Tired of all the lies that a US downgrade will have no impact whatsoever on unsecured funding be it money markets, repo or so many other shadow banking system components (full list is below)? So are we. Which is why we were very interested to read the following summary of a Nomura research report that a US downgrade "may cause a repo liquidity freeze." Remember the Ice-9 in money markets following Lehman? Well, it may not be quite as big as money markets (last at $2.7 trillion), but at $1.3 trillion, frozen Repos will certainly cause a lot of headaches, especially with a dramatic scarcity of short-term Bills available in the market place for replacement capital flow. For all those wondering why the Fed and the BIS have been writing paper after paper (here, here and here) warning about the potential complications arising from the shadow banking system, this is precisely the reason.

Bad News For Bank Of America Imminent? Attorney General Says Completing BofA Fraud Analysis

Just out from the office of David Grais of Grais & Ellsworth: "We also conferred, per the Court’s request, with the office of Attorney General of the State of New York. The Attorney General’s office has asked us to inform the Court that it is completing its analysis."

Guest Post: Road Map To Ruin

S&P Downgrades Greece To CC From CCC, Expects Recovery Of 30-50% By Principal Bondholders

We view the proposed restructuring as one that would amount to a "distressed exchange" under our criteria because, based on public statements by European policymakers, the debt exchange or rollover is likely to result in losses for commercial creditors, and the objective of the debt exchange/rollover is to reduce the risk of a near-term debt payment default. Under our criteria, we characterize a distressed borrower as one that would--in the absence of debt relief--fail to pay its debt on time and in full.  While no exact date has been announced to initiate Greece's debt restructuring, we understand that it will commence in September 2011 at the earliest. Our recovery rating of '4' for Greece remains unchanged, indicating an estimated 30%-50% recovery of principal by bondholders.






Let's Walk The Path Of A Potential Pan-European Bank Run, Then Construct Trades To Profit From Such

Posted by: Reggie Middleton

Post date: 07/27/2011 - 11:20

As we get closer to that point where economic reality and financial fact override/overpower politics & concerted central financial planning that attempts to outlaw insitutional failure, we...






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City to Firefighter and Police Retirees:  Give Up 50% of Your Pension or Risk Losing it All




The Worst May Still Be Ahead For Housing




Gold And Silver:  We Were Right, They Were Wrong

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