The Corporate Bank Run Has Started: Siemens Pulls €500 Million From A French Bank, Redeposits Direct With ECB
In a shocking representation of just how bad things are in Europe, the FT reports that major European industrial concern Siemens, pulled €500 million form a large French bank, which is not BNP and leaves just [SocGen|Credit Agricole] and deposited the money straight to the ECB. The implications of this are beyond stunning, as it means that even European companies now refuse to work directly with their own banks, and somehow the ECB has become a direct lender of only resort to private non-financial institutions! As Bloomberg reports further on the FT story, in total, Siemens has deposited between 4 billion euros and 6 billion euros, mostly through one-week deposits, with the ECB, FT says, cites the person. It isn’t clear from which bank Siemens withdrew its deposits, per the FT... but it is hardly difficult to figure out. BNP Paribas isn’t the bank involved, FT reports, cites unidentified person familiar with the bank. This story should be having far more impact on the EURUSD than any rumors about Greece lying it will fire all of its public workers only to make sure Eurobanks can survive one more day.Andy Lees Kills The Argument Of Endless Debt-Funded Stimulus
There are those who watch quietly from the sidelines as month after month, year after year, decade after decade, the Keynesians among us (especially those who only focus on the upswing in the business cycle and always ignore the downswing) announce that the only thing the economy needs to grow is a just a little more debt... more debt.... much more debt.... And for the most part it worked: for years every dollar in additional debt generated a little less than a dollar of economic growth, or GDP. Alas, slowly but surely, we have been pushed to the point where incremental debt generates no incremental growth: an event that if it were to be recognized for the debt-stimulus dead end it is, would put an end to years of flawed economic thought taught in the world's most prestigious universities. Yet there is more to it, and as always it goes to the age-old question of capital allocation efficiency, and specifically how with time, any centrally-planned attempt to allocate capital effectively always fails, usually accompanied by incurring insurmountable leverage. Probably one of the best and most succinct summary of this core quandary facing the entire developed world and the voodoo economics profession in general, was done by UBS's Andy Lees today, who in one note, deconstructed the primary flaws, and outright lies, at the base of the last ditch economic rescue effort planned by Obama, by the world's army of "fiscal stimulants" and by the western world in general.Greece Announces Troika Call Is Over - Announcement Expected Shortly
Update 2: here comes the rhetoric:- Greek finance minister official says Greece is close to a deal with the Troika
- Greek finance minister says some work is still needed to quantify measures
Greece Announces Troika Call Is Over - Announcement Expected Shortly
Update: looks like just more talk:- VENIZELOS, EU, IMF CONFERENCE CALL 'PRODUCTIVE,' MINISTRY SAYS
- GREECE SAYS CALL WAS `PRODUCTIVE AND SUBSTANTIVE DISCUSSION
- VENIZELOS, EU, IMF TO HOLD ANOTHER CALL AT SAME TIME ON SEPT 20
- GREECE SAYS CALL WILL BE REPEATED AT THE SAME TIME TOMORROW
- GREECE SAYS EXPECTS TEAM TO ELABORATE FURTHER ON DATA TOMORROW
- GREEK FIN MINISTRY SAYS TROIKA CONFERENCE CALL OVER, ANNOUNCEMENT EXPECTED SHORTLY - RTRS
-
09/19/2011 - 11:58
A Keynesian Wet Dream: "700 Trillion Cars And Light Trucks Need Recalling"
And for today's fake press du jour release we go to Marketwatch which amusingly carries the following headline/story, which has since been rebroadcast by Bloomberg and other wire services:- 700,000,000 Million Cars and Light Trucks Need Recalling
Europe Retorts To Geithner With Some Lecturing Of Its Own, Demands The World Promptly Fix Itself
Demonstrating that when it comes to "lecturing" Europe is no better than America's own Tim Geithner (who was loudly jeered at last week's FinMin meeting in Poland after he came, he saw, and told Europe to do everything that the US had done before with such 'stunning success'), is an exclusive report from Reuters which references an EU document according to which "the European Union will call on China this week to boost domestic demand and on the United States and Japan to tackle their public deficits." Furthermore "the consolidation plans to be undertaken in most EU countries, in the U.S. and in Japan need to be accompanied by appropriate policies in other regions of the world so as to avoid an undesired compression of global demand." In other words, if the rest of the world could promptly go ahead and fix itself and fall bak in line so the status quo can resume its dutiful creep to previously unseen Ponzi heights asap, that would be wonderful and much appreciated by Brussels, and Europe can pretend its monetary union is still a viable long-term
September 19, 2011, at 11:19 am
by Greg Hunter in the category USAWatchdog.com |
Print This Post | 
Email This Post
by Greg Hunter in the category USAWatchdog.com |
Print This Post | Email This Post
By Greg Hunter’s USAWatchdog.com
Dear CIGAs,
It doesn’t seem that anyone is worried much about another enormous bailout to stabilize the world financial system that kicked off last week. According to one top European banker, many of the biggest banks there are insolvent. The problem is so large that the European Central Bank along with the Bank of Japan, Bank of England, Bank of Switzerland, and the U.S. Federal Reserve will all team up and bailout Europe—again. The ECB is setting up a $600 billion European bank bailout fund, and according to Treasury Secretary Tim Geithner, $600 billion is not enough for the European share of the bailout! According to Reuters, “In a 30-minute meeting with euro zone finance ministers on Friday, Geithner pressed for the 440 billion euros (more than $600 billion) European Financial Stability Facility (EFSF) to be scaled up to give greater capacity to combat the bloc’s debt malaise, a senior euro zone official said. . . . Geithner’s presence at the meeting underscored the depth of U.S. alarm but ministers were resistant to Washington telling the 17-country euro zone and its finance chiefs what to do.” (Click here for the complete Reuters story.)
If more than $600 billion is not enough for the EU’s share of bailout money from four of the biggest central banks in the world, then you have yourself one big insolvency problem. Once again, the solvency of the entire system is threatened. This is not just an EU bailout. The last global meltdown caused the Federal Reserve to create and hand out $16 trillion. That $16 trillion figure is a solid number. It came from the Government Accountability Office (GAO) compliments of a little provision Senator Bernie Sanders tagged on to last year’s Wall Street reform bill. (Click here for the complete report. This is an outrage!) So, if the U.S. Federal Reserve doled out $16 trillion the last time, how much will stopping this global meltdown cost? We will never know because the GAO Fed audit was an OTO (one-time only.)
Nothing has been truly fixed since the last bailout bonanza at the end of 2008. The banks are still allowed to use phony accounting to appear solvent. There is no public market for over-the-counter (OTC) derivatives market. The Bank of International Settlements says the OTC market is around $600 trillion. (Some say the OTC derivatives market is more than twice that size, yes more than a quadrillion bucks!) Not a single big banker on the planet has gone to jail for wrecking the global economy, and there is still almost zero transparency at the banks. How many problems get better when you ignore them? My guess is that this crisis is, at least, just as bad as the last one. It will take many more trillions of freshly created dollars to get it under control for a second time.
What’s the downside for printing all this money to try and avoid a meltdown? Economist John Williams at Shadowstats.com lays it out in his most recent report. Just last week, he said, “To the extent that euro-area problems threaten to trigger a global or U.S. systemic collapse, the Fed—most likely with other parties—will create, spend, loan, or guarantee whatever money is needed to prevent a collapse. This has been the case for some time, but the cost to the system is inflation. . . “ Check out trajectory of the government’s most recent “Core” inflation numbers below:
More…
Jim Sinclair’s Commentary
China’s Gold Investment to Top Record: Cheng By Joe Richter – Sep 18, 2011 6:16 PM MT
Gold investment demand in China is likely to top a record 200 metric tons this year, the World Gold Council said.
The country’s investment demand surged 70 percent in 2010 to an all-time high of 187 tons, said Albert Cheng, the Far East managing director at the World Gold Council.
China’s “investment demand has picked up exponentially,” Cheng said yesterday in an interview in Montreal. “The financial crisis has triggered people to be cautious of anything they don’t understand,” boosting demand for bullion as an alternative asset.
Gold futures have surged 29 percent this year, touching a record $1,923.70 an ounce on Sept. 6. The metal climbed as escalating debt woes in Europe and the U.S. boosted demand for haven assets. India is the world’s top bullion buyer followed by China. The two countries accounted for 54 percent of world gold consumption in the second quarter, Cheng said.
The council has estimated demand from China may double in 10 years. The forecast may be “too conservative,” Cheng said.
More…
Jim Sinclair’s Commentary
Tom Stevenson: ETFs have potential to become the next toxic scandal
Who says regulators are only good for slamming the barn door after the horse has bolted? By Tom Stevenson
3:45PM BST 17 Sep 2011
Back in April, the Financial Stability Board (FSB), an international super-regulator, wrote a prescient if less than catchily-titled paper "Potential financial stability issues arising from recent trends in Exchange Traded Funds (ETFs)".
Its central warning – that ETFs are not the cheap and transparent vehicles the marketers would have us believe – was spot on. When UBS’s $2bn black hole hit the screens on Thursday, no one who read the FSB report was surprised to see the words ETF and rogue trader in the same sentence.
The past ten years have seen an explosion in the popularity of ETFs. In part this reflects some of their acknowledged benefits – relatively low costs and the ability for investors to trade them throughout the day. A third claim, that ETFs are simple products, may once have been true but it no longer holds water. Many of these funds are now fiendishly complicated and way beyond the comprehension of the individual investors and professionals alike who are buying them.
Here are just a few of the reasons why ETFs are not all they are cracked up to be.
First, around half of the ETFs in Europe today do not match the index they are designed to track by holding all of its constituent shares. Unlike the plain vanilla "full replication" ETFs which do, 45pc of the market is in the form of so-called "swap-based" ETFs which instead use derivative agreements, often with investment banks, to simulate the performance of the underlying assets.
More…
Jim Sinclair’s Commentary
Dutch Socialist Party has asked the Secretary of the Treasury for the whereabouts of the Dutch Central Bank’s gold
On Friday 16 September, the Dutch Socialists Party (SP)’s spokesman for financial affairs, Mr. Ewout Irrgang, has asked the Dutch Secretary of the Treasury 10 detailed questions about the gold supposedly held by the Dutch Central Bank. Questions vary from: where is the gold? why are gold and gold receivables one line item? how much gold is loaned out? All questions (in Dutch) can be found here and cpied below.
This is potentially a big breakthrough for global awareness on how central banks hide crucial info from the public and the disastrous effects central banks have on society. The society benefits from competitive currencies, chosen voluntarily by the people.
The Questions:
1. Did the Dutch Central Bank (DNB) loan part of their gold?
If yes, how much and to whom?
2. Why are gold and gold loans stated as one line item in the annual report 2010 instead of mentioned as 2 separate items?
3. Can you give an overview of the yearly yields of the gold loans during the past years?
4. Where IS the physical gold of DNB? At which locations and how much is where? What is the reason that the gold is still at these locations?
5. What was the most important reason for DNB to sell the gold in the past? Are the storage costs a reason?
What are the actual costs to store the gold?
6. Can you confirm that since 1991 of the 1700 tons of gold about 1100 tons have been sold?
Is the remark of journalist Peter de Waard correct that because of these historic sales there is a loss of about 30 billion euro?
If not correct, what is the right amount?
More…
Jim Sinclair’s Commentary
Central Banks Net Buyers of Gold for 1st Time in 20 Years Published: Monday, 19 Sep 2011 | 2:55 AM ET
By: Jack Farchy,
European central banks have become net buyers of gold for the first time in more than two decades, the latest sign of how the turbulence in the currency and debt markets has revolutionized the bullion market.
The purchases are minuscule compared with the size of the global gold market, but highlight a remarkable turnaround from a wave of heavy selling by European central banks.
The role of central banks in the gold market will be a central topic of debate at the annual London Bullion Market Association conference, the largest gathering of the gold industry, in Montreal this week.
The switch from large selling to buying has helped propel the gold price more than 25 percent higher so far this year, hitting a nominal record of $1,920 a troy ounce this month. The shift in Europe comes as central banks in emerging markets are also loading up on gold.
Mexico, Russia, South Korea and Thailand have all made large purchases this year, in a move to reduce their exposure to the dollar. Globally, central banks are set to buy more gold this year than at any time since the collapse of the Bretton Woods system 40 years ago – the last time the value of the dollar was linked to gold.
More…
Greek Officials Hold Urgent Talks With Creditors
Dear CIGAs,
It doesn’t seem that anyone is worried much about another enormous bailout to stabilize the world financial system that kicked off last week. According to one top European banker, many of the biggest banks there are insolvent. The problem is so large that the European Central Bank along with the Bank of Japan, Bank of England, Bank of Switzerland, and the U.S. Federal Reserve will all team up and bailout Europe—again. The ECB is setting up a $600 billion European bank bailout fund, and according to Treasury Secretary Tim Geithner, $600 billion is not enough for the European share of the bailout! According to Reuters, “In a 30-minute meeting with euro zone finance ministers on Friday, Geithner pressed for the 440 billion euros (more than $600 billion) European Financial Stability Facility (EFSF) to be scaled up to give greater capacity to combat the bloc’s debt malaise, a senior euro zone official said. . . . Geithner’s presence at the meeting underscored the depth of U.S. alarm but ministers were resistant to Washington telling the 17-country euro zone and its finance chiefs what to do.” (Click here for the complete Reuters story.)
If more than $600 billion is not enough for the EU’s share of bailout money from four of the biggest central banks in the world, then you have yourself one big insolvency problem. Once again, the solvency of the entire system is threatened. This is not just an EU bailout. The last global meltdown caused the Federal Reserve to create and hand out $16 trillion. That $16 trillion figure is a solid number. It came from the Government Accountability Office (GAO) compliments of a little provision Senator Bernie Sanders tagged on to last year’s Wall Street reform bill. (Click here for the complete report. This is an outrage!) So, if the U.S. Federal Reserve doled out $16 trillion the last time, how much will stopping this global meltdown cost? We will never know because the GAO Fed audit was an OTO (one-time only.)
Nothing has been truly fixed since the last bailout bonanza at the end of 2008. The banks are still allowed to use phony accounting to appear solvent. There is no public market for over-the-counter (OTC) derivatives market. The Bank of International Settlements says the OTC market is around $600 trillion. (Some say the OTC derivatives market is more than twice that size, yes more than a quadrillion bucks!) Not a single big banker on the planet has gone to jail for wrecking the global economy, and there is still almost zero transparency at the banks. How many problems get better when you ignore them? My guess is that this crisis is, at least, just as bad as the last one. It will take many more trillions of freshly created dollars to get it under control for a second time.
What’s the downside for printing all this money to try and avoid a meltdown? Economist John Williams at Shadowstats.com lays it out in his most recent report. Just last week, he said, “To the extent that euro-area problems threaten to trigger a global or U.S. systemic collapse, the Fed—most likely with other parties—will create, spend, loan, or guarantee whatever money is needed to prevent a collapse. This has been the case for some time, but the cost to the system is inflation. . . “ Check out trajectory of the government’s most recent “Core” inflation numbers below:
More…
September 19, 2011, at 11:28 am
by Jim Sinclair in the category In The News | Print This Post | Email This Post
by Jim Sinclair in the category In The News |
Print This Post | Email This PostJim Sinclair’s Commentary
It is hard not to be bullish on gold.
China’s Gold Investment to Top Record: Cheng By Joe Richter – Sep 18, 2011 6:16 PM MT
Gold investment demand in China is likely to top a record 200 metric tons this year, the World Gold Council said.
The country’s investment demand surged 70 percent in 2010 to an all-time high of 187 tons, said Albert Cheng, the Far East managing director at the World Gold Council.
China’s “investment demand has picked up exponentially,” Cheng said yesterday in an interview in Montreal. “The financial crisis has triggered people to be cautious of anything they don’t understand,” boosting demand for bullion as an alternative asset.
Gold futures have surged 29 percent this year, touching a record $1,923.70 an ounce on Sept. 6. The metal climbed as escalating debt woes in Europe and the U.S. boosted demand for haven assets. India is the world’s top bullion buyer followed by China. The two countries accounted for 54 percent of world gold consumption in the second quarter, Cheng said.
The council has estimated demand from China may double in 10 years. The forecast may be “too conservative,” Cheng said.
More…
Jim Sinclair’s Commentary
This is not new news to CIGAs.
Tom Stevenson: ETFs have potential to become the next toxic scandal
Who says regulators are only good for slamming the barn door after the horse has bolted? By Tom Stevenson
3:45PM BST 17 Sep 2011
Back in April, the Financial Stability Board (FSB), an international super-regulator, wrote a prescient if less than catchily-titled paper "Potential financial stability issues arising from recent trends in Exchange Traded Funds (ETFs)".
Its central warning – that ETFs are not the cheap and transparent vehicles the marketers would have us believe – was spot on. When UBS’s $2bn black hole hit the screens on Thursday, no one who read the FSB report was surprised to see the words ETF and rogue trader in the same sentence.
The past ten years have seen an explosion in the popularity of ETFs. In part this reflects some of their acknowledged benefits – relatively low costs and the ability for investors to trade them throughout the day. A third claim, that ETFs are simple products, may once have been true but it no longer holds water. Many of these funds are now fiendishly complicated and way beyond the comprehension of the individual investors and professionals alike who are buying them.
Here are just a few of the reasons why ETFs are not all they are cracked up to be.
First, around half of the ETFs in Europe today do not match the index they are designed to track by holding all of its constituent shares. Unlike the plain vanilla "full replication" ETFs which do, 45pc of the market is in the form of so-called "swap-based" ETFs which instead use derivative agreements, often with investment banks, to simulate the performance of the underlying assets.
More…
Jim Sinclair’s Commentary
Transparency in government gold. There is a radical idea.
Dutch Socialist Party has asked the Secretary of the Treasury for the whereabouts of the Dutch Central Bank’s gold
On Friday 16 September, the Dutch Socialists Party (SP)’s spokesman for financial affairs, Mr. Ewout Irrgang, has asked the Dutch Secretary of the Treasury 10 detailed questions about the gold supposedly held by the Dutch Central Bank. Questions vary from: where is the gold? why are gold and gold receivables one line item? how much gold is loaned out? All questions (in Dutch) can be found here and cpied below.
This is potentially a big breakthrough for global awareness on how central banks hide crucial info from the public and the disastrous effects central banks have on society. The society benefits from competitive currencies, chosen voluntarily by the people.
The Questions:
1. Did the Dutch Central Bank (DNB) loan part of their gold?
If yes, how much and to whom?
2. Why are gold and gold loans stated as one line item in the annual report 2010 instead of mentioned as 2 separate items?
3. Can you give an overview of the yearly yields of the gold loans during the past years?
4. Where IS the physical gold of DNB? At which locations and how much is where? What is the reason that the gold is still at these locations?
5. What was the most important reason for DNB to sell the gold in the past? Are the storage costs a reason?
What are the actual costs to store the gold?
6. Can you confirm that since 1991 of the 1700 tons of gold about 1100 tons have been sold?
Is the remark of journalist Peter de Waard correct that because of these historic sales there is a loss of about 30 billion euro?
If not correct, what is the right amount?
More…
Jim Sinclair’s Commentary
The barrel rolled!
Central Banks Net Buyers of Gold for 1st Time in 20 Years Published: Monday, 19 Sep 2011 | 2:55 AM ET
By: Jack Farchy,
European central banks have become net buyers of gold for the first time in more than two decades, the latest sign of how the turbulence in the currency and debt markets has revolutionized the bullion market.
The purchases are minuscule compared with the size of the global gold market, but highlight a remarkable turnaround from a wave of heavy selling by European central banks.
The role of central banks in the gold market will be a central topic of debate at the annual London Bullion Market Association conference, the largest gathering of the gold industry, in Montreal this week.
The switch from large selling to buying has helped propel the gold price more than 25 percent higher so far this year, hitting a nominal record of $1,920 a troy ounce this month. The shift in Europe comes as central banks in emerging markets are also loading up on gold.
Mexico, Russia, South Korea and Thailand have all made large purchases this year, in a move to reduce their exposure to the dollar. Globally, central banks are set to buy more gold this year than at any time since the collapse of the Bretton Woods system 40 years ago – the last time the value of the dollar was linked to gold.
More…
Greek Officials Hold Urgent Talks With Creditors
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![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_2.gif)
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