Harvey Organ, August 01, 2011
Raid on Gold and Silver Upheld / Key Voting in House of Representatives/JPMorgans warns jobs report will fall short
Guest Post: Snake Oil Economics
It is of course the case that so deeply engrained are statistics such as these in the vocabulary of both the market and the voodoo of Maynardian macro-economics that it is unrealistic to expect any practitioner to avoid any reference to them whatsoever. What is absolutely crucial, however, is (a) constantly to bear in mind that these are nothing but examples of a convenient shorthand which often conceal as much as they reveal - in the same way a mean height above sea level or an average annual temperature tells us little about the topography or climate of a region, much less about how those features may be changing – and (b) that the generation of a positive change in the metric is not an end in itself (as far too many policy jockeys and talking heads seem to believe). An amphetamine junkie getting his next fix by spending the contents of the old woman’s purse he just snatched generates more instant GDP than an engineer sitting quietly at his desk, trying to puzzle out a radical new way to create more useful output with less input, but it should be fairly obvious which man is likely to do more to improve both his own material comforts and those of the people around him.Word War Two: After Calling Bernanke A "Hooligan", Putin Now Says America Is "A Parasite" Living Off The Global Economy
Three weeks ago Putin called Bernanke a hooligan. Since that remark came from the (allegedly) largest oil producing country in the world, it provoked nary a peep from America's foreign department. Today, he decided to ratchet up the rhetoric, and in a speech to a Kremlin youth group told his listeners what the bulk of the rest of the world thinks of America: ""They are living beyond their means and shifting a part of the weight of their problems to the world economy," Putin told a Kremlin youth group while touring its summer camp north of Moscow. "They are living like parasites off the global economy and their monopoly of the dollar."" Russia has not made its distrust of America clear in the past, and while others (ahem China) have been jawboning about selling Treasurys even as they continue buying US one-ply paper, Russia has been actively dumping its Treasury paper to the lowest in years. The reason for the unprovoked outburst? The insanity in Congress. "Thank god," Putin said, "that they had enough common sense and responsibility to make a balanced decision." The former KGBer's solution? Other, and more deserving, reserve currencies.Deal's Big Secret: Tax Hikes Possible
Bipartisan committee to be formed in debt deal would be free to look at anything to find $1.5 trillion in spending cuts — including tax revenue — contradicting claims by House Speaker Boehner that tax increases are 'impossible' under plan.
The Imminent $2.5 Trillion Debt Ceiling Hike Will Unleash A Gold Price Surge To $1,950 And Higher
Two weeks ago we presented a chart that shows the uncanny correlation between the debt ceiling and the price of gold. Now that we know the final amount of the next debt ceiling hike, somewhere in the $2.5 trillion ballpark, it allows us to extrapolate where gold will end up as a result of the debt ceiling hike which will likely be voted into law at 7pm PDT. A simple correlation rule of thumb allows us to predict that gold will be at $1,950 by the end of the year if it simply retains it close correlation to the debt ceiling. Should Bernanke announce that he will additionally need to monetize some or all of this incremental debt amount, we anticipate that gold will be well over $2,000 by the end of the year, courtesy of yet another round of accelerated dollar debasement, which also means that real gains in US stocks will be negated courtesy of the devaluation of the currency in which they are priced. The same, however, does not apply for gold, which with every passing day is priced in nothing but itself.Bank of Korea buys gold for the first time in 13 years
Trader Dan at Trader Dan's Market Views - 46 minutes ago
Dow Jones News is reporting this afternoon that the Bank of Korea has
confirmed that it purchased 25 metric tons of gold between June and July of
this year and now has gold reserves of 39.4 tons of gold as of the end of
July.
The move is noteworthy because it confirms a move towards diversifcation by
a large Asian Central Bank away from the Dollar.
While Korea is certainly not among the largest holders of gold in the world,
(it ranks 45th in gold holdings according to the World Gold Council data),
it indicates another Central Bank's desire to acquire additional gold. So
much for th...
Friday Treasury Cash Balance: $65 Billion
With total Treasury cash dropping by $15 billion on Thursday, many were expecting a far uglier print as of the close of last week. Instead, total cash in the Federal Reserve Account staged a dramatic bounce on Friday, and is now back to $65 billion, following tax revenues offsetting contractual spending and another $13.7 billion coming in from the settlement of public debt issues. From here on out it is only downhill, and the cash is likely about $20 billion lower as of market close today (we will know for sure tomorrow). If the burn rate is smaller it means that Tim Geithner is dipping far more aggressively in Government retirement and Social Security trust funds than anyone could have imagined (Bruce Krasting discussed this previously). And yes, for those with a double digit IQ, the Treasury has less cash than Apple still.Economic Armageddon: Gold Standard is a MUST - Bob Chapman 1 of 2
Graham Summers’ Weekly Market Forecast (At Support Edition)
08/01/2011 - 14:47
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