Dear Extended Family,
There is a certain extremely important market reality that must be kept in mind as you listen to all the bearish gold predictions.
What is good for the dollar is bad for gold.
This is wrong because it depend what dollar related factors are giving a positive dollar price action.
If the good for the dollar was strong US economic activity, sound balance sheets in the US financial industry and a US consumer ready and credit able to expand, the answer would be yes if these activities were for the long term
That strong dollar would not be good for gold.
However there is only one dollar positive out there. That is the largest currency market on the planet is the dollar vs. euro market in which the so called vigilantes (International Investment Banks) are shorting the euro to infinity. That downward pressure on the euro creates a mirror image of dollar strength but give that strength no greater legs than the euro problem posses.
What happens the third weeks post and euro settlement be that a changed euro or no euro.
There will be an end to the euro’s problems one way or another sometime sooner than later as that is the nature of failing euro hopes as today and fruitless euro financial programs as every proposal has been so far.
That process brings you closer to a crisis rather than further away. Even if there was a miracle that saved the euro at today’s price, the soap opera then ends.
Within three weeks from whatever date is the final act in the euro soap opera the US dollar will be the primary focus of the vigilantes via US dollar and long bonds.
There is enough knowledgeable money sources that know if any resolution is coming will begin to prepare for it. That preparation may be why at in this din of gold bearishness gold still may well be resolving the accordion chop.
So far on the unique studies done only by my dearest friend Kenny Adams and shared only with me, scream a clear refusal to confirm serious long term top indications.
If anyone will see the point of gold’s terminal overvaluation, it will be Kenny Adams and myself. That simply does not exist now nor is there full confirmation of the intermediate down with the depth so many are putting in their headlines.
Gold investors stand tall and stay committed. It is time for a glass of cold water and a long walk. Traders will be guided well now by the Angels.
Up to $1764 the Angel has and will continue to herald the market. After that and the gold price move goes in the 2000s things will be somewhat more difficult, if you can imagine more difficult.
Email or call me if you need me.
Respectfully,
Jim
My Dear Extended Family,
I am posting this article from John Williams of www.shawdowstats.com for two reasons. First, you need to subscribe to John’s service simply because it is that good and important. The second reason is to put in a proper light the assumption that good economic progress in the US is taking place and that is a constituent of the stronger US dollar, which it is not.
Regards,
Jim
COMMENTARY NUMBER 408
November Housing Starts and Existing Home Sales
December 21, 2011
3.5 Million Home Sales Just Disappeared
Housing Starts Still Bottom Bouncing
PLEASE NOTE: The next regular Commentary is scheduled for Friday, December 23rd, covering the third estimate (second revision) of third-quarter 2011 GDP, November new orders for durable goods and new home sales. No major economic releases are scheduled and no Commentaries currently are planned in the week between Christmas and New Year’s Day.
Official release status of the 2011 Financial Report of the United States Governmentstill is “to be determined.” We shall keep you posted. See Schedule for month ahead.
Best wishes to all for a most joyous holiday season and for a happy, healthy and prosperous New Year! — John Williams
Opening Comments and Executive Summary. The National Association of Realtors (NAR) corrected its estimates of existing home sales today (December 21st), and 3.54 million previously reported home sales vanished, in revision, since January 2007. Put in perspective, the amount of sales wiped out was the total amount of seasonally-adjusted existing home sales that previously had been reported in 2011, through October. Post-2006, 14.3% of existing home sales were eliminated, with sales in the Northeast taking a 30.9% hit, followed by a 14.2% reduction in the Midwest, 12.3% loss in the South and 5.3% loss in the West.
In revealing recognized reporting problems, the NAR has addressed issues not commonly taken on by trade groups that report industry data, or by the federal government. Where the nature of some of the problems (overly optimistic underlying assumptions) are common with many government series, including payroll employment and retail sales, the government would do well to overhaul much of its reporting.
Reflecting adjustments for some double-counting, mis-estimates of homes for sale by owner, and some improper inclusion of new home sales, the revisions were structured in such a way as to preserve as much as possible of the previously reported month-to-month and year-to-year patterns. Sales levels were reduced by 10% to 11% starting in 2007, hitting a peak reduction of 17% in late-2008, and averaging around 14.5% in the most-recent reporting.
As the dust settles around the massive revisions, issues such as an historic break in the series likely will be addressed. Where NAR suggests that the annual revision for 2007 leaves the data there consistent with the unrevised number for 2006, the above graph—showing the monthly number—is not reflective of a smooth transition from the old series (blue line), to the first point (January 2007) on the red line. Also the pattern of post-2008 narrowing of the level of downside revision still may reflect some relatively positive (but unrealistic) underlying economic assumptions based on the official end of the 2007 recession.
While the new numbers reflect a weaker housing industry than previously had been reported, the picture in terms of November housing starts remains one of a full-fledged disaster, with activity in the residential construction industry now having completed three years of bottom-bouncing at historically low levels of activity, subsequent to a three-year collapse in industry activity.
The reported 9.3% monthly gain in November housing starts was not statistically meaningful, and it was dominated by an irregular surge in apartments starts. Net of apartments, monthly single-unit housing starts were up a statistically-insignificant 2.3%.
The broader economic picture will be discussed in the December 23rd Commentary.
More…
Jim Sinclair’s Commentary
Why do you still resist taking delivery of your gold and silver? Why will you not become your own clearing house via the direct registration System?
So few of you have protected yourselves.
December 21, 2011, at 12:01 pm
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,
Today marks the official one year countdown to the end of the Mayan calendar. 365 days from today will be December 21, 2012. Some say it marks the end of the world, but others say it is really the end of an era. An Associated Press (AP) report, yesterday, about Mexican tourism said, “It’s selling the date, the Winter Solstice in the coming year, as a time of renewal. Many archeologists argue that the 2012 reference on a 1,300-year-old stone tablet only marks the end of a cycle in the Mayan calendar. “The world will not end. It is an era,” said Yeanet Zaldo, a tourism spokeswoman for the Caribbean state of Quintana Roo, home to Cancun. “For us, it is a message of hope.” (Click here for the complete AP story.)
I don’t know exactly what’s going to happen in 2012, but I am betting a dramatic change is coming. For most, life will be much harder and people will be much poorer. You’ve heard of peak oil? Well, peak credit is also topping out, and it looks like everything will hit the fan next year. Charles Hugh Smith has a similar 2012 economic outlook, and wrote an in-depth post yesterday where the title describes the entire story: “2011: The Last (Debt-Consumerist) Christmas In America.” Mr. Smith said, “A funny thing happens when you depend on expanding debt to fund your consumption: eventually the cost of servicing your rising debt reaches the limit of your income, and you can’t borrow any more, unless interest rates decline so you can leverage your income into higher debt. . . .Lowering interest rates extends the era of debt-based consumption, but it only puts off the inevitable crash when the ability to borrow runs out. Eventually the cost of servicing this lower-interest debt absorbs all your disposable income, and the borrowing skids to an abrupt stop.” (Click here to read the most excellent post from Charles Hugh Smith.)
Of course, when the borrowing stops, the money printing will begin. I think we are somewhere between borrowing and money printing with the emphasis on the printing part. $12 trillion are held outside the U.S. in liquid dollar assets. In the end, the world will face a currency crisis as dollar holders rush to cash out of an increasingly debased buck. Is 2012 the year? We will see.
On the European front, the problem there is getting worse, not better. Yesterday, the head of the International Monetary Fund (IMF), Christine Lagarde, said, “Currently the world economy stands at a very dangerous juncture.” Former chief of the IMF, Dominique Strauss-Kahn (DSK), was just as downbeat on the solvency crisis facing the EU. Renowned market expert, Yra Harris reported on his site yesterday, “DSK was adamant that the EUROPEAN CRISIS was a three-pronged problem: A DEBT CRISIS; A GROWTH CRISIS; and A LEADERSHIP CRISIS. The CRISIS IN EUROPE is further aggravated by the fact that the European leaders seem that time is not of the essence where DSK believes time is not a friend of the Eurocrats. It is of the utmost importance that the CRISIS be dealt with now and not later. Nothing like a dishonored and wounded leader to finally speak the truth.” (Click her for more from Mr. Harris.)
More…
Dear CIGAs,
Today marks the official one year countdown to the end of the Mayan calendar. 365 days from today will be December 21, 2012. Some say it marks the end of the world, but others say it is really the end of an era. An Associated Press (AP) report, yesterday, about Mexican tourism said, “It’s selling the date, the Winter Solstice in the coming year, as a time of renewal. Many archeologists argue that the 2012 reference on a 1,300-year-old stone tablet only marks the end of a cycle in the Mayan calendar. “The world will not end. It is an era,” said Yeanet Zaldo, a tourism spokeswoman for the Caribbean state of Quintana Roo, home to Cancun. “For us, it is a message of hope.” (Click here for the complete AP story.)
I don’t know exactly what’s going to happen in 2012, but I am betting a dramatic change is coming. For most, life will be much harder and people will be much poorer. You’ve heard of peak oil? Well, peak credit is also topping out, and it looks like everything will hit the fan next year. Charles Hugh Smith has a similar 2012 economic outlook, and wrote an in-depth post yesterday where the title describes the entire story: “2011: The Last (Debt-Consumerist) Christmas In America.” Mr. Smith said, “A funny thing happens when you depend on expanding debt to fund your consumption: eventually the cost of servicing your rising debt reaches the limit of your income, and you can’t borrow any more, unless interest rates decline so you can leverage your income into higher debt. . . .Lowering interest rates extends the era of debt-based consumption, but it only puts off the inevitable crash when the ability to borrow runs out. Eventually the cost of servicing this lower-interest debt absorbs all your disposable income, and the borrowing skids to an abrupt stop.” (Click here to read the most excellent post from Charles Hugh Smith.)
Of course, when the borrowing stops, the money printing will begin. I think we are somewhere between borrowing and money printing with the emphasis on the printing part. $12 trillion are held outside the U.S. in liquid dollar assets. In the end, the world will face a currency crisis as dollar holders rush to cash out of an increasingly debased buck. Is 2012 the year? We will see.
On the European front, the problem there is getting worse, not better. Yesterday, the head of the International Monetary Fund (IMF), Christine Lagarde, said, “Currently the world economy stands at a very dangerous juncture.” Former chief of the IMF, Dominique Strauss-Kahn (DSK), was just as downbeat on the solvency crisis facing the EU. Renowned market expert, Yra Harris reported on his site yesterday, “DSK was adamant that the EUROPEAN CRISIS was a three-pronged problem: A DEBT CRISIS; A GROWTH CRISIS; and A LEADERSHIP CRISIS. The CRISIS IN EUROPE is further aggravated by the fact that the European leaders seem that time is not of the essence where DSK believes time is not a friend of the Eurocrats. It is of the utmost importance that the CRISIS be dealt with now and not later. Nothing like a dishonored and wounded leader to finally speak the truth.” (Click her for more from Mr. Harris.)
More…
LTRO in Europe: a touch less than 500 billion euros printed first day/gold and silver hold on minor raid
Good
evening Ladies and Gentlemen:
Today's commentary will be kind of short as really there is not that
much action due to the Christmas season.
There are further developments in the MFGlobal scandal that I will
highlight for you.
Gold finished the comex session at $1611.90 down $3.70. Silver fell by
30 cents to $29.19. Both metals fell instantly on news of a huge 500
billion LTRO that I
Fear Hides Signs of Strain
People (traders) are bearish on silver and gold because standing with the
crowd is easier than standing against it without emotion. This London
trader is no fool. The money flow analysis confirms the strains in the
silver and gold market discussed below. Someone is borrowing central bank
gold to run important pivots to scare the hell out of the TA followers.
Real Silver Lease Rates (1-Month...
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]
December 21 2011: The forest feels denser and darker all the time
Gustave Doré Little Red Riding Hood 1883 Ilargi: Haven't we been here
before?It's the sort of question you would expect a child to ask in one of
those Grimm Brothers fairy tales, a child that walks so far into the woods
that it gets lost, and takes another wrong turn and then another, and the
forest feels denser and darker all the time, and it doesn't even run around
in circles to return to its
Europe Has Made Serious Mistakes
Europe has made serious mistakes. What they should do is let Greece go
bankrupt, reorganise and start over. Will they do that? No, they want the
easy way. - *in Investment Week*
*Related stocks, National Bank of Greece ADR (NBG)*
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The
Financial Times and is a regular guest on Bloomberg and CNBC.*
The Comex Exposed
I just saw another "worse than 2008" post linked on Zerohedge.com. I don't
know about anyone else, but I just don't find that commentary helpful.
That's old news. It's no-value-added to comment on that.
I was going to post on the ECB Long Term Refinancing Operation (LTRO) today
and explain why it's just another "back door" QE operation, but I'm too
busy to get into that at the moment. I'll try to post something on it
tomorrow. I explained in a comment response under yesterday's post what
the basics are.
At any rate, celebrity hedge fund manager Kyle Bass has been commenting... more »
Mark Faber: "I Am Convinced The Whole Derivatives Market Will Cease To Exist And Will Go To Zero"
Anyone
seeking joyous holiday greetings and cheerful forecasts for the new
year is advised to not listen to the following most recent Mark Faber
interview, in which in addition to his predictions for 2012 (led with
"more printing" by the dodecatupling +1 down central planners of
course, and far less prosperity), we get the following: "I am convinced
the whole derivatives market will cease to exit. Will become zero.
And when it happens I don't know: you can postpone the problems with
monetary measures for a long time but you can't solve them... Greece
should have defaulted - it would have sent a message that not all
derivatives are equal because it depends on the counterparty."
And on the long-term future: "I am ultra bearish. I think most people
will be lucky if they still have 50% of their money in 5 years time.
You have to have diversification - some real estate in the countryside,
some gold and some equities because if you think it through, say
Germany 1900 to today, we had WWI, we had hyperinflation, WWII, cash
holders and bondholders they lost everything 3 times, but if you owned
equities you'd be ok. In equities in general you will not lose it all,
it may not be a good investment, unless you put it all in one company
and it goes bankrupt." As for gold: "I am worried that one day the
government will take it away." As for the one thing he hates the most?
No surprise here -government bonds.13 Observations On The New Holiday Spending Normal
While the rest of the world enjoys the New Normal, which lately has primarily and mostly negative connotations, when it comes to such "legacy" aspects of life as holiday shopping, we all enjoy the fall back to a simpler time assuming that at least such basic behavior as buying presents for the loved (and not so loved) ones can hardly change much with the years. Alas, even this last bastion of nostalgic simplicity has now been swept away: Nick Colas and his team from ConvergEx, have once again decided to educate us about the folly of assuming the old ways are with us, and has created a useful compilation exposing the finer nuances of the "twelve days of online Christmas" which show that just like everything else, holiday shopping patterns are rapidly changing as well. "This holiday season consumers aren’t quite as concerned with finding “cheap gifts” as in recent years, though traditional luxury items such as jewelry and cashmere sweaters are still losing traction with gift-givers. They’re seeking sales on electronics, becoming increasingly enamored with real vs. artificial Christmas trees, and backing off catering services in favor of home-cooked ham. New York City is the most popular place to spend Christmas and New Years (hey, it’s cheaper than a ski destination), but interest in the Radio City Rockettes and Broadway shows is dwindling. All these observations come courtesy of two of our favorite online gauges of consumer behavior – Google Trends and search engine autofills from Google, Yahoo and Bing. We’ve compiled a collection of 13 visuals (12 for the days of Christmas plus a bonus for Hanukkah) that ultimately show consumer spending patterns are still decidedly cautious."
Flowcharting Europe's Sovereign And Bank Debt Problems
Keeping track of all the various verticals of instability in Europe, which is now forced to improvise on a day to day basis with a leaking dam wall of increasingly insurmountable problems, and is torn between plugging holes in the EFSF/ESM mechanism, Bank recapitalization, generating an overarching fiscal union and, last but not least, getting the ECB involved, has become virtually impossible. Which is why we are happy to present the latest updated UBS flowchart summarizing Europe's sovereign and bank problems. Because there are many. We hope this makes it clearer.
Retail Investors Pull $132 Billion From Domestic Equity Funds In 2011, 33 Of 34 Sequential Weeks Of Outflows
Yesterday, before today's latest ICI release of the weekly mutual fund flow report, we predicted that
"Tomorrow ICI will reaffirm the retail investor boycott of stocks with
the 33rd out of 34 equity fund outflows." Sure enough, the report came
and, as expected retail investors have pulled money from domestic (and
foreign) equity funds for 33 of the past 34 weeks, with last week
another $4 billion getting redeemed as mutual funds, now unchanged for
the year, somehow have to deal with a $133 billion lower cash balance
than at the beginning of the year. Because if anyone thought last year
was bad with the flash crash and all, the $98 billion that was pulled in
all of 2010 is a pale imitation of what 2011 is setting up to be. And
this year we didn't even need a 1000 point DJIA drop.It's Official: US Debt-To-GDP Passes 100%
With precisely one year left for the world and all of its inhabitants, at least according to the Mayans, not to mention on the day of the Winter Solstice, it is only fitting that US debt, net of all settlements for all already completed bond auctions, is now at precisely $15,182,756,264,288.80. Why is this relevant? Because the latest annualized US GDP, according to the BEA, was $15,180,900,000.00. Which means that, as of today, total US debt to GDP is 100.012%. Congratulations America: you are now in the triple digit "debt to GDP" club!Presenting The Winners And Losers In The Ongoing Currency Wars
Rather than focus simply on the actual adjustments in the real effective exchange rates which shows the UK and US as having used monetary policy to devalue/weaken their currencies since the 2008 crisis really took shape, we look at an intriguing chart from Nomura's EEMEA FX research team. Google Trends shows, that in the year since Brazil's finance minister Mantega warned of a currency war's immediacy, a dramatic pickup in searches for both 'Currency Wars' and 'Recession' and we believe, like them, that 2012 will see further engagement of the vicious circle of antagonism around the world (with the EUR the obvious next chapter). Only EUR, USD, and TRY are actually weaker since the 2009 lows with most of the Emerging Market over 16% higher on average. It would appear that whether Europe escalates or US retaliates, gold will eventually benefit from this fiat fiasco and the search patterns set a rather nasty precedent. Simply put, you can't grow fast enough, you can't cut rates, that leaves only one option (call it what you want), currency devaluation.
Greek "Voluntary" Restructuring On Verge Of Collapse As Hedge Fund Vega Threatens To Sue Greece For Excessive Haircut
Back in June, which now seems like a lifetime ago, we wrote an article titled: "A Few Good Hedge Funds May Have Called The ECB's Bluff, And Hold The Future Of The EUR Hostage" in which we discussed the weakest link in the Eurozone bailout and in which we warned, rather prophetically as it turns out, "that not only is Bailout #2 in jeopardy of not passing the Greek parliament, but that we may suddenly find ourselves in the biggest "activist" investor drama, in which voluntary restructuring "hold out" hedge funds will settle for Cheapest to Delivery or else demand a trillion pounds of flesh from the ECB in order to keep the eurozone afloat. In other words, the drama is about to get very, very real. And, most ironically, a tiny David is about to flip the scales on the mammoth Goliath of the ECB and hold the entire European experiment hostage..." Why prophetic? Because the FT has just reported that "One of the most prominent hedge funds holding Greek bonds has threatened legal action against officials negotiating the country’s debt restructuring if losses are too deep, raising a hurdle to eurozone leaders’ hopes of quickly reducing the country’s debt levels." Well, Vega may not be quite the David we envisioned but it will do. The bottom line is that the weakest link in the Eurozone rescue, precisely the one we predicted over six months ago, has now been exposed. We fully expect other "activist" funds to be buying up or have already bought up the debt of the other PIIGS, and hold the future of the Eurozone ransom for the princely sum of 1 million dollars.... Or realistically, much, much more. Oh, and so much for ISDA's carefully conceived plan of a "voluntary" restructuring - should Vega proceed to indeed sue Greece it is game over for the worst laid plan of mice and corrupt derivatives organizations.
S&P Joins Moody's In Downgrading Hungary To Junk, Outlook Negative - Full Note
On November 25, Moody's cut Hungary to junk. Now it is S&P's turn: "The downgrade reflects our opinion that the predictability and credibility of Hungary's policy framework continues to weaken. We believe this weakening is due, in part, to official actions that, in our opinion, raise questions about the independence of oversight institutions and complicate the operating environment for investors. In our view, this is likely to have a negative impact on investment and fiscal planning, which we believe will continue to weigh on Hungary's medium-term growth prospects. Moreover, in our opinion, the downside risks to Hungary's creditworthiness have also increased as the global and domestic economic environments have weakened."Guest Post: Legality Of MF Global Asset Transfer Questioned
Commodity Customer Coalition founder James Koutoulas is requesting that MF Global bankruptcy Judge Martin Glenn investigate three potential legal issues that are said to have occurred in transferring of MF Global assets. The key issues include the fact that JP Morgan was able to purchase MF Global bonds at a discount without any open bidding process and the assets were apparently sold without disclosure to or approval from the U.S. bankruptcy court or trustees. The third issue centers on JP Morgan seeking special favors from the Federal Reserve to receive priority treatment over investor segregated fund accounts.Did S&P Just Telegraph An Imminent French Downgrade?
Just hitting the tape are these quite perplexing headlines out of Bloomberg:- EFSF LENDING CAPACITY MAY DROP TO EU293 BLN, CULLINAN SAYS
- EURO RESCUE FUND'S CAPACITY MAY FALL BY A THIRD, CULLINAN SAYS
- EURO RESCUE FUND MAY SHRINK ON FRANCE DOWNGRADE, CULLINAN SAYS
- S&P SOVEREIGN RATINGS DIRECTOR CULLINAN COMMENTS IN E-MAIL
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