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

Europe Near 'Major Financial Collapse': Guggenheim CIO

Gold Hits New Highs in At Least Eight Different Currencies

Author: goldnews | Filed under: Forex News, Precious Metals News This morning gold prices have cleared fresh, new all time highs in Canadian dollars, British pounds, euros, Japanese yen, Hong Kong dollars, Indian rupees, Mexican pesos, and, of course, US dollars.
See the new highs in each currency:
Gold CAD$/oz = $1,572
Gold GBP£/oz = £1,006
Gold EUR€/oz = €1,148
Gold JPY¥/oz = ¥126,519
Gold HKD$/oz = $12,769
Gold INR₹/oz = ₹72,590
Gold MXN$/oz = $19,251
Gold USD$/oz = $1,642

US Yields Hit Multi-Year Low of -93 Basis Points, Very Bullish for Gold

Author: goldnews | Filed under: Central Bank News, Forex News, Precious Metals News Today US lenders and savers were face-planted with the lowest return on investment since October 2008. The term “return” can be misleading as the actual fact is lenders and savers are paying borrowers for the privilege of using their funds.
Bill Gross, manager of the world’s biggest bond fund at PIMCO, explains in his monthly investment outlook: Read the rest of this entry »

Dow Sinks Below 12,000 as Obama Signs Debt Reduction Bill

Treasury Curve Pancaking As Stocks Approach 1252 Support

The worst possible news for financials, which basically never managed to tick higher in all of 2011, is now here as the entire Treasury curve has virtually pancaked today, making sure that the perfect storm for banks is here, with nobody trading (no sales revenue), prop trading dismantled (no trading revenue), and no lending revenue soon either (2s10s heading to 0%). The closed loop will send even more money into the 10 and 30 Year, causing even more pain for banks, and so on ad inf until Bernanke relents. And you can be certain that the CEOs of the TBTFs are on the phone with the New York Fed as we speak. Luckily, the next FOMC meeting is August 9 which means the market will only have to deal with this non QE3 uncertainty for a few days. Naturally when QE3 is announced, gold will promptly leave $2000 in the rearview mirror.

Pre-/Post-Default Cash Management Bill Spread Collapses... To Negative

Back on July 28, we conceived of an alternative trade to the "sell CDS" on a defaulting US as a win-win proposition, in the form of compressing the August 2/August 4 Cash Management Bill spread, which at the time was as high as 20 bps. Since a default would mean nobody would be there to collect, betting everything and the kitchen sink on a levered compression to zero in this trade would be a sure way to make money as the August 4 CMBs would mature and pay off par, or else the US would be insolvent. Specifically, we said: "the reason why this trade, with lots of leverage would be ideal, is that, as mentioned above, if the US does default, Repo desks and Prime Brokers will have much much bigger problems, and two, as we pointed out, it will imminently become "uncovered" that the Fed has a secret stash of cash, up to the amount of about half a trillion, which may easily carry the Treasury through the new year, in which case the spread will immediately collapse. Of course, we could be wrong, and everyone who plays the compression will blow up in an epic supernova that will make Boaz Weinsten's legendary basis trade annihilation seems like amateur hour." We were not wrong. And in fact, as of last check, with the August 2nd CMBs already matured, the spread is negative 1.2 bps due to the scramble into ultra near term securities courtesy of the collapse of the ponzi equity stock market left and right. To those who made money on this trade: congratulations.

The Two ‘Faces’ of U.S. Debt-Ceiling Deal

Mercifully, it appears that the U.S. debt-ceiling farce has finally ended – with an anti-climactic “thud”. It is only fitting that the two-faced regime which negotiated such an agreement should present us with a scenario which has two distinct interpretations. However, before getting into how this deal came to be, it’s necessary to spend a moment doing a reality-check on the actual terms of the deal.

In any rational assessment, this can only be defined as another complete failure for the hopelessly dysfunctional U.S. government. While the talking-heads in the mainstream media will do their best to spin this as “the best compromise available”, the mere failure to commit suicide cannot be construed as a “victory” when this deadbeat economy teeters on the brink of bankruptcy.

The ability of the Federal Reserve to (supposedly) “fund” the U.S. government via its magic printing press ends permanently once hyperinflation officially drags the worthless greenback to zero. As I have detailed previously, in unofficial terms the “fundamental” value of the U.S. dollar has already reached zero.

With the “Emperor” (i.e. B.S. Bernanke) clearly wearing no clothes, each time the Federal Reserve cranks-out a new truck-load of Bernanke-bills (backed by nothing) to “pay” the bills of the U.S. government for one more month, the probability increases that the the sycophantic masses will finally notice this chronic nudity. And by “sycophantic masses” I’m naturally referring to the “experts” in charge of our global monetary system.

Because this absurd “deal” does nothing to reduce the steady stream of those truck-loads of Bernanke’s confetti, in any/every meaningful way it is a complete failure. As is always the case with governments which only wish to pretend to be engaging in fiscal tightening, this deal is heavily “back-loaded”, meaning that any noticeable reduction in the deficit doesn’t commence until 2016, while virtually nothing is being done until 2013. When a chronic deadbeat solemnly proclaims his intent to start acting responsibly two years from now, this impresses no one.

Indeed, in the first year of this “deficit-reduction” a mere $200 billion is being trimmed from the latest, massive increase in U.S. debt. Given the $1.6+ trillion size of the current deficit, this is nothing more than “a rounding error”. With the relentlessly (and intentionally?) “optimistic” revenue projections which this regime has engaged in, by the time the first year of this supposed deficit-reduction is finished, the “unexpected increase” in the size of the U.S.’s annual deficit could easily exceed the total amount of “deficit reduction”. Translation: in the first year of this “deficit fighting”, the U.S. deficit will very likely increase rather than decrease.

This becomes more probable by the day. With this credit-junkie economy now (apparently) deprived of additional stimulus and more of the Fed’s “easy money”, it had already sagged noticeably simply in anticipation of being deprived of its next “fix”. When the withdrawal-pains really begin to set in, we will see this debt-crippled economy once again plummeting like a rock.

Given that the “optimists” in the U.S. government have (as always) proclaimed their expectation of a “stronger second half” for 2011, the actual numbers for this revenue-starved economy are sure to be a “disappointment”. This makes the mere failure of this new deal the best-case scenario. The worst-case scenario is that this feeble attempt at “deficit fighting” will be abandoned before “the ink is even dry”; with either more government stimulus, more Fed money-printing – or both. Read more: The Two ‘Faces’ of U.S. Debt-Ceiling Deal

Guest Post: You Want To Create Jobs? Here's How

If the nation is serious about encouraging new businesses, then government has to strip away the inefficiency and bloat which inhibit growth for essentially zero payoff. Permits are important, and oversight is important; but it is merely common-sense that these functions be centralized and speeded up to foster "best practices" without stultifying new businesses. Government employees who want to do their jobs efficiently and productively would be delighted to work for a stripped down, centralized agency which was designed to approve or disapprove projects quickly, and regulate the economy like vitamins--enough for safety, but not too much, i.e. a self-serving fiefdom. It's that simple: lower the cost structure of the economy, and remove the impediments to starting new businesses and hiring workers.

Metals do well despite debt deal, Turk tells King World News

Gold Clearing New All Time Highs, AGAIN – See Why…

Author: goldnews | Filed under: Central Bank News, Economic News, Political News, Precious Metals News This headline is being used so often recently its almost not necessary to repeat. However, gold is the story of the decade and is on the way to being the story of the century.
This morning gold has cleared another NEW all time high, hitting $1,644/oz in world market trading before the US market opening. Lets review some of the factors which are driving gold higher: Read the rest of this entry »

Gregg Easterbrook: The phony-as-a-three-dollar-bill debt deal

Submitted by cpowell on Tue, 2011-08-02 09:37. Section: Daily Dispatches

By Gregg Easterbrook
for Reuters
Monday, August 1, 2011
http://blogs.reuters.com/gregg-easterbrook/2011/08/01/the-phony-as-a-3-b...
Maybe Washington can start paying invoices with $3 bills -- because the "dramatic" agreement to "reduce the national debt" is as phony as a three-dollar bill.