plunging at the international level, disappears (aside from the Fed of course: the Fed will always be a happy last ditch monetizer of one-ply US paper), here is the Treasury's just released schedule for bond issuance for Fiscal Q1 (Oct-Dec 2011), and Q2 (Jan-March 2012), which amounts to $305 billion and $541 billion, respectively, or a total of $846 billion in 6 months, a $141 billion run rate per month. This compares to a total of $628 billion issued over the comparable period a year ago (although granted the Treasury did burn a whopping $225 billion in cash in Q1 of 2010). In other words, the US Treasury is planning on issuing 35% more in the first half of the fiscal year than a year previously, even though this time last year the Fed was monetizing all gross issuance, and even though the European EFSF was not about to ramp up issuance and soak up hundreds of billions of excess fixed income targeted capital. Now we only have some vague, ineffectively sterilized duration transfer operation which is doing nothing to lift belly demand, and merely takes care of the long end (while the Fed's promise to keep rates at zero until 2013 makes all bonds 2 years and less to be off zero effective duration). We doubt this schedule is even remotely sustainable without some imminent form of Large Scale Asset Purchase program being implement (with or without MBS monetization: for a definitive answer on this issue, please call
949-720-6226 end_of_the_skype_highlighting), and none of that Nominal GDP targeting mumbo jumbo. Unlike Europe, the Fed knows that money talks, and bullshit targeting walks.
Dear Extended Family,
Gold is headed into the $2000s. The mess in Europe is incurable and can only be damage controlled by QE.
MF Global got busted because credit default swaps did not work. MF Global had their Greek and Euro bond position covered by credit default swaps that they thought would protect them. SURPRISE!
They did not work because the Greek situation of a 50% haircut was given another name than “default” by a select group of Banksters and related parties.
97% of all credit default swaps written are carried by the major US banks. That means 97% of all the credit default swaps are the US usual Bankster suspects that swore to be more conservative in their ways.
If the Greek referendum is determined to represent a Greek default, major US banks will return to public insolvency and be bailed out yet another time because of the fraudulent nature OTC derivatives.
You think that game was rigged? China is coming to the rescue of no one. China specializes in picking up the pieces from troubled areas, not being troubled by troubled areas.
After Europe comes the US as media has been successful in keeping the focus of the problems off the US dollar. The only problem with gold shares is the hedge fund wild men and women that will in the end fail to stop the super bull market that is sure to come.
What is good for gold (QE) is also good for general equities so be careful on those that see doom everywhere.
Playing any one currency today is hard. Better hold a spread and seek to maintain buying power only. Competitive forced devaluation is the tool of strong currencies making it hard for exports in that currency. This is another example of making the Western world economic problems worse by curing the strong currency using liquidity to weaken it.
What today’s economic managers don’t know is Titanic in nature. There is no practical solution to the economic problems of today making gold in all forms desirable long term.
Now that the affdavit of MF Global COO Bradley Abelow has been filed, we finally get the inside scoop of just what the events were that brought the company to its knees, and what specifically were the precipitating catalysts that ultimately led to the Halloween massacre. The relevant part begins with section E, paragraph 33, on page 13. "As a global financial services firm, MF Global is materially affected by conditions in the global financial markets and worldwide economic conditions. On September 1, 2011, MF Holdings announced that FINRA informed it that its regulated U.S. operating subsidiary, MFGI, was required to modify its capital treatment of certain repurchase transactions to maturity collateralized with European sovereign debt and thus increase its required net capital pursuant to SEC Rule 15c3-1. MFGI increased its required net capital to comply with FINRA’s requirement...." Read on.
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