All Hands on Deck..Economy Imploding/DEFCON ONE imminent/gold and silver skyrocket

Harvey Organ, Saturday, Sept 3, 2011

Harvey Organ's - The Daily Gold and Silver Report - 4 minutes ago

Good morning Ladies and Gentlemen: The USA government released their jobs report and the report showed zero jobs was created. I will discuss the numbers with you in the body of my commentary.First I would like to report that two banks entered the morgue last night taking their last breath before the FDIC entered and pronounced them dead: 1.  Creekside Bank of Woodstock Georgia 2.  Patriot Bank

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In The News Today

September 2, 2011, at 6:58 pm
by Jim Sinclair 

On Gold: Team Sinclair-Turk 1, Marc Faber 0 Posted by Dominique de Kevelioc de Bailleul on Sep 02, 2011 | No comment

Unless the gold price tumbles $400 in response to a surprise 500,000 rise in the Labor Department’s Non-farm Payroll Report, scheduled to be released prior to the NY open today, it appears the team of James Sinclair and James Turk have won the gold in the fight to be right on the move in gold this summer.

On June 23, as gold settled at $1,511, Sinclair stated, “Be prepared for covert QE between July 1st and late August when stimulation goes wild.  Be prepared for gold to take out $1,650 on the upside as magnets at $12,544 come into play.”
At that time, the gold community opined that Sinclair’s multi-year $1,650 gold price prediction may not be reached this year, after all.  Not only was the Sinclair call a gutsy one in the wake of 30+ years of seasonal data which suggested otherwise, it showed a man who’s willing to put his reputation on the line for the greater good of the investment community.  He sells nothing on his Web site, takes calls from anyone seeking his advice at all hours of the day—gratis, and doesn’t grumble or seek credit for his deeds.
And the other man of the gold medal team, James Turk, a man whose knowledge base and, more importantly, integrity, within the global bullion community, had said repeatedly the move in gold during the summer of 2011 will emulate the 50 percent move in the precious metal during the summer of 1982—the time of the Mexican peso devaluation.  He warned traders in June to hold gold during strength, not sell into the seasonal low period as is the custom.
James Turk is founder of bullion storage service GoldMoney.com.
On June 14, Turk told King World News to expect the unexpected in the price of gold during the summer’s intermission period of June-August.
“Everything is all set for new record high prices in both metals this summer, which is going to surprise a lot of people,” he said.  “I just think that people don’t really understand what can happen this summer.  We’ve spoken before about the summer of 1982 when the gold price rose 50% from June to September, propelled back then by the Mexican debt default.”
Turk added, “This summer, you could see a move higher in gold and silver that literally shakes the world.” And shake the world they did.
For the first time in the infomercial CNBC’s 20-year history, the echo chamber of Wall Street’s tread-worn stock hucksters such as the likes of Morgan Stanley’s David Darst, decided it’s best to hedge its bet against plunging into the credibility abyss along side Morgan Stanley, or worse, Standard & Poor’s, by finally covering gold’s 11-year rally and by beginning to admit that the world may not be flat after all.

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Jim Sinclair’s Commentary

The financial crisis never ended, it was only MOPEd into Europe only.

This is a crisis of the total Western financial system.

Europe’s Banking System: A Slow-Motion Bank Run in Progress? By Kash Mansori Sep 1, 2011, 3:57 PM
Last week The Economist described what it called a “slow-motion run in the funding markets” in Europe — in other words, a gradual but steady run on European banks, as depositors remove their money from European banks and put it in places that are seen to be safer. It’s worth taking a look at some data to see how significant this phenomenon is.
First, let’s look at the troubled euro-zone perihpery countries. The following chart shows the total level of deposits with monetary financial institutions (“MFIs”, which basically means banks and money market accounts) in Greece, Ireland and Portugal. For comparison, the total level of deposits within the entire euro-zone is also presented. (All data is from the ECB and is through the end of July 2011 unless otherwise noted.)

Ireland clearly stands out as having experienced a large net withdrawal of deposits over the past year. Perhaps surprisingly, banks in Greece have seen their deposits fall by only a relatively modest amount (about 10%) since the summer of 2010. And for the euro-zone as a whole, total deposits have been essentially flat.
But this hides some important details. If we compare the three most troubled periphery countries with other euro-zone countries, we find that Cyprus has actually seen the greatest percentage decrease in deposits since the start of 2010. But Germany has also seen total deposits shrink by a bit, and, perhaps alarmingly, even though it is not in the euro-zone, the UK has experienced a very significant fall in total deposits with its MFIs. (Note: UK data is through June 2011.)


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Jim Sinclair’s Commentary

Yes, gold is going to become part of the monetary system, most likely by 2016.

Few people understand how. It is not going to be convertible. It will be tied to a Western World type M3. It will be part of a virtual reserve currency that you cannot buy or sell.

Gold Standard Comeback Enjoys Support Published: Thursday, 1 Sep 2011 | 12:32 PM ET
By: Jessica Naziri
An age-old idea — the gold standard — is attracting new fans, amid growing investor concern that enormous government borrowing is weakening the dollar and spark hyper-inflation.
The day of realization is coming, James Grant, editor Grant’s Interest Rate Observer told CNBC Thursday. "What can be said for the gold standard is that it is time tested. It has monetary properties. It worked imperfectly but consistently for a 100 years until it was interrupted," said Grant
The old standard, which fell out of use by the 1930s, was conceived to control money supply growth (and thus inflation and asset bubbles) by requiring currencies be backed by physical gold.
The concept has gained new currency in the wake of the 2008 financial crisis wherein governments and central banks tried to stimulate economic growth through extraordinary fiscal and monetary stimuli.

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Jim Sinclair’s Commentary

What global recovery? It was all the masterful smoke and mirrors of MOPE.

Hopes for global recovery take a hit By Chris Giles in London
The global manufacturing recovery appeared to have come to a grinding halt in August, activity surveys suggested on Thursday, undermining hopes of a vigorous economic recovery in the second half of the year.
Across Asia, Europe and the US, surveys of purchasing managers produced the lowest readings of manufacturing activity and orders since mid-2009, when the world economy was only crawling out of recession.
The figures, better than feared in the US, gave little reason to think the world economy would quickly recover from the twin summer political crises of the US debt ceiling debate and the wider loss of confidence in sovereign debt from the peripheral eurozone countries.
Global equity markets expressed relief that some of the figures – particularly those in the US – were not worse, but US equities were trading down by the afternoon in New York.
The global purchasing managers’ index, compiled by JPMorgan, fell to 50.1 in August from 50.7 in July, indicating the manufacturing sector was again struggling to increase output, having been growing strongly at the start of the year.
Although PMIs are far from perfect indicators of the health of the manufacturing sector, the generalised malaise across developed and emerging economies in measures of output and orders suggested a weakness in underlying global demand.

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Jim’s Mailbox

September 2, 2011, at 6:53 pm
by Jim Sinclair in the category Jim's Mailbox |  Print This Post |  Email This Post

Jim Sinclair’s Commentary

CIGA Luis is spot on. There is a quiet but definitive technical turn taking place in the group.

Are Gold and Silver Bubbly?  
CIGA Eric

Are gold and silver extended? Or, as the media often presents them as bubbly? Remember, the media bias towards talking down precious metals means gold and silver will be position as bubbly after every up thrust. This bias will only worse as the sovereign debt crisis expands and evolves. The challenge for long-term investors will be to know the difference between biased talk and reality.
Historical bubbly leaves a distinctive mathematically footprint.
Gold, London P.M. Fixed (Gold) and Z Scores of Secular Trend
Silver, London P.M. Fixed (Silver) and Z Scores of Secular Trend
Gold to Silver Ratio (GSR), Monthly Average Price:

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A Weak Labor Report – Again  
CIGA Eric

Today’s labor report was weak.
While JCH reveals net job creation (up thrust into positive territory), it does so only because the labor force continues to contract (see second chart).
Job Creation Histogram (JCH): Net Nonfarm Payrolls Added/(Lost) less Civilian Labor Force Added/(Lost), 12 Month Average.
The labor force has been contracting steadily since 2009.
Civilian Labor Force (CLF) And Year-Over-Year (YOY) Change
The birth/death model provides a comparison of today’s liquidity injection job recovery with that of 2004-2007. It’s obvious that current phase is much weaker. This point is not missed by gold and silver.
Birth/Death Model (BDM) Contribution to Nonfarm Net Payrolls (NFP) Added/(Lost)
Headline: Employers add no net jobs in Aug.; rate unchanged
Employers added no net workers last month and the unemployment rate was unchanged, a sign that many were nervous the U.S. economy could be at risk of slipping into another recession.
The Labor Department said Friday that total payrolls were unchanged in August, the weakest report in almost a year. It’s the first time since February 1945 that the government has reported a net job change of zero. The unemployment rate stayed at 9.1 percent.
A strike by 45,000 Verizon workers lowered the job totals. Those workers are back on the job.
Job gains in June and July were revised lower, to show 57,000 fewer jobs added. The downward revisions were all in government jobs. The average work week also declined and hourly earnings fell by 3 cents to $23.09.
Source: finance.yahoo.com
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TARPed, RETARPed, And Then DETARPed

To sum up today's mass bank lawsuit news: first the taxpayers were asked to save Freddie and Fannie, then they were asked to save the banks, now when it is politically expedient to do so, the first entity which is still being saved ($200B of taxpayer funded capital injections later) is suing the second saved entity. In the interim, on a day when job growth in this country was essentially ZERO, we are going to lose another 30,000 private sector jobs. Finally, it is worth mentioning that these lawsuits are suggesting that Fannie Mae and Freddie Mac were semi-clueless when it came to the mortgage securitization process. Something that may be a tad difficult to prove given that they were major players in the mortgage markets. If readers are confused, they are not alone.





The Imminent Failure Of The Eurozone

Posted by : Econophile

Post date: 09/02/2011 - 15:31

You know those movies with the bomb set to a timer ticking down to øø.øø where the sweaty hero nervously cuts one wire at a time while holding his breath and then at øø.ø1 he stops the bomb? Well...




 

Bloody September

Posted by: ilene

Post date: 09/02/2011 - 17:05

Evidence suggests that the conomy has already been in recession, mainstream conomist pundits continue to argue about whether the conomy will have a double dip or not. While they are trying to figure...