Japan's Economy Implodes Again: No Scapegoats This Time

While the easily amused were obsessing with choosing the best one line punchlines to describe the status quo posturing on TV in the form of another highly irrelevant political spectacle, Japan's economy imploded, only this time for real. Unlike back in Q2 when every downtick in the economy was blamed on the Tsunami and on the Fukushima explosion, we just got, 6 months later, the report for Japanese machinery orders which collapsed 8.2% in the month of July, for the biggest drop in 10 months, over and above anything seen during the Fukushima days. This is exactly 100% worse than the 4.1% drop predicted. The reasons according to Reuters: "companies are delaying investment due to worries about a strong yen, slackening global growth and slow progress in reconstruction from the March earthquake." Of these the Yen is by far the most relevant. And thanks to the SNB, the Bank of Japan, whose currency has suddenly become the only safe risk haven, will have no choice but to add balance sheet insult to economic injury and resume JPY interventions, only this time the duration will be even shorter than the last such episode which lasted all of 3 days (see below). This in turn will force all other central banks to do more of the same until relative devaluation, and the biggest currency lower, is the name of the only game in a few weeks. As for the winner: the only real currency which can not be printed, well, that story is very well known by now.

 

 

Hilsenrath Speaks: "Fed Prepares To Act"

Anyone who may have been harboring doubts that the Fed will pull yet another economically destructive policy out of its bag of genocidal tricks on September 21 can now relax. Jon Hilsenrath has spoken, and while we don't know just what form QE3 will take place (as a reminder any form of duration extension, and hence, artificial risk shit can be reduced to the broad definition of Quantitative, or otherwise, easing), he does give us a menu of three options: i) Operation Twist, as first discussed by Zero Hedge back in May, ii) a reduction in the Interest on Overnight Excess Reserves (IOER) from 0.25% to something... lower, a move that would wreak havoc and completely destabilize money markets, and iii) more jawboning -  a step the would merely make existing promises, such as the ZIRP through mid-2013 even less effective. Bottom line: like it or not, in two weeks we all do the twist.

 

Ambrose Evans-Pritchard: German court curbs future bailouts, bans EU fiscal union

Let's Just Raid Social Security

Posted by : testosteronepit

Post date: 09/07/2011 - 21:42

Out of one side of its mouth, our political system talks about reforming Social Security to preserve it for a few more years, and out of the other side of its mouth, it proposes to expedite its...

Swiss franc's devaluation, impending disaster make gold look good, Faber says

 

 

Agitation against gold price suppression can produce good stuff

 

Hathaway calmly confident; for candor, Davies losing respectability fast

 

 

Look who's watching GATA

 

In The News Today

September 7, 2011, at 12:39 pm
by Jim Sinclair in the category In The News |  Print This Post |  Email This Post

Jim Sinclair’s Commentary

Let’s go back to visit with Master Kenny:

On August 25th Kenny suggested that a correction of $212.50 in two days seldom finishes quickly. However, the chance that the low of $1700 was the bottom was 50/50, which is good after such a waterfall correction.

Kenny suggested that as a minimum, this correction would last 15 to 18 days and 36 to 40 days maximum.

$1917.90 is the challenge that keyed the pre Swiss action selling to contain gold. This is the hard chop that Kenny has called for before gold sees above $2000.

Jim Sinclair’s Commentary

QE to Infinity in the entire Western financial world.

Court Rejects Challenges to German Euro Bailouts By NICHOLAS KULISH and ALAN COWELL
Published: September 7, 2011
KARLSRUHE, Germany — In a widely followed ruling on Wednesday, Germany’s Constitutional Court upheld the legality of Berlin’s rescue packages for debt-stricken euro zone countries, but said any future bailouts must be approved by a parliamentary panel.
The decision was viewed by some analysts as a rare triumph for Chancellor Angela Merkel and seemed to place fewer restrictions than some had expected on her ability to react to the European debt crisis. At the same time, the high public standing of the court should lend broader legitimacy to government efforts to shore up the European currency.
But, other analysts said, the ruling could hamper Mrs. Merkel’s power to take quick measures.
The court’s president, Andreas Vosskuhle, said the ruling did not represent a “blank check for additional rescue packages.”
Speaking at a parliamentary budget debate in Berlin, Mrs. Merkel said the ruling had “absolutely confirmed” her government’s “transparent” handling of Europe’s debt crisis in close consultation with Parliament. “That is exactly the path we have followed,” she said.
Mrs. Merkel again underlined her country’s commitment to the single currency and European integration, saying the euro was “much more than a common currency.”

More…

 

 

Jim’s Mailbox

September 7, 2011, at 12:34 pm
by Jim Sinclair in the category Jim's Mailbox |  Print This Post |  Email This Post

Obama to propose $300 billion to jump-start jobs
CIGA Eric

 QE(n) or infinite liquidity includes both monetary and fiscal injections.

Headline: Obama to propose $300 billion to jump-start jobs
WASHINGTON (AP) — The economy weak and the public seething, President Barack Obama is expected to propose $300 billion in tax cuts and federal spending Thursday night to get Americans working again. Republicans offered Tuesday to compromise with him on jobs — but also assailed his plans in advance of his prime-time speech.
In effect, Obama will be hitting cleanup on a shortened holiday week, with Republican White House contender Mitt Romney releasing his jobs proposals on Tuesday and front-running Texas Gov. Rick Perry hoping to join his presidential rivals Wednesday evening on a nationally televised debate stage for the first time.
Lawmakers began returning to the Capitol to tackle legislation on jobs and federal deficits in an unforgiving political season spiced by the 2012 presidential campaign.
Adding to the mix: A bipartisan congressional committee is slated to hold its first public meeting on Thursday as it embarks on a quest for deficit cuts of $1.2 trillion or more over a decade. If there is no agreement, automatic spending cuts will take effect, a prospect that lawmakers in both parties have said they would like to avoid.

Source: news.yahoo.com

More…





Gold Leading The Gold Shares
 
CIGA Eric

Any investor pessimistic about the gold stocks is not listening to the message of the market. What’s that message? Gold leads and the gold stocks follow. The most recent yellow box (green lined) illustrates this leadership. When gold stocks follow in the coming weeks/months will anyone but the talking heads be surprised? Let’s hope not.
Gold and Gold Stocks Side by Side Comparison:


Headline: Mining stocks – On the runway, ready for take-off
September 5, 2011 – Gold has been rising faster than the price of mining stocks. Here are some statistics to prove this point.
In the twelve months ending August 31st, gold has risen 46.5%, but the XAU Index of precious metal mining stocks climbed only 17.7%. By itself, that is a good rate of return for mining stocks, but not what one would expect given gold’s appreciation over this period.
The current year-to-date results are even more telling. Gold has risen 28.7% this year, compared to a -3.8% loss in the XAU Index.
In the last two months, gold has risen 21.7%, while the XAU Index climbed 8.4%. You might notice from these results that the XAU Index is finally starting to show some relative strength compared to its year-to-date results, which is one sign that things may be turning in favor of the mining stocks. Here is another.
The following chart simply measures the difference between the annual rate of change of gold and the XAU Index at each month end. So for example, using the 12-month results ending August 31st reported above, the last point plotted on this chart is 28.8%, which reflects gold’s outperformance over this period.

Source: fgmr.com

More…

Please consider making a small donation, to help cover some of the labor and cost for this blog.

Thank You

I'm PayPal Verified