Monday, October 15, 2012

Let's Talk About Facts, Not Fear

Let’s step away from the noise for a moment and look at the big picture. This isn’t about doom and gloom, or fear, but objective facts. Undoubtedly, the Western hierarchy dominated by the United States is in a completely unsustainable situation. Across the West, national governments have obligations they simply cannot meet—both to their citizens and their creditors. Once again, this is not the first time history has seen such conditions. In our own lifetimes, we’ve seen the collapse of the Soviet Empire, the tragi-comical hyperinflation in Zimbabwe, and the unraveling of Argentina’s millennial crisis. Plus we can study what happened when empires from the past collapsed. The conditions are nearly identical. Is our civilization so different that we are immune to the consequences?
However, one of the things that we see frequently in history is that this transition occurs gradually, then very rapidly.

Market Thoughts From David Rosenberg

"The consensus view was that QE3 was going to send the stock market to the moon. Yet the peak level on the S&P 500 was 1,465 on September 14th, the day after the FOMC meeting. The consensus view was that the lagging hedge funds were going to be forced to play some major catch-up and take the stock market to the moon too. Surveys show that the hedge funds have already made this adjustment...Q3 EPS estimates are still coming down and now stand at -3% YoY from -2% at the start of October....this is the first time the Fed embarked on a nonconventional easing initiative with the market overbought and with profits and earning expectations on a discernible downtrend. Not only that, but the fact the pace of U.S. economic activity is still running below a 2% annual rate, which is less than half of what is normal at this stage of the business cycle with the massive amount of government stimulus, is truly remarkable. Keep an eye on the debt ceiling being re-tested — the cap is $16.394 trillion and we are now at $16.119 trillion. This is likely to make the headlines again before year-end — the rating agencies may not be taking off much time for a Christmas break."

US CEOs Opine On America's Debt And The Fiscal Cliff

While earlier we were presented with an extra serving of hypocrisy courtesy of the Fed's James Bullard who lamented the lack of income for America's "savers", next we get a less than random selection of US CEOs, those of UPS Scott "Logistics spending would be great if only world trade hadn't completely collapsed" Davis, Honeywell's David "Look over there, Isn't Iran bombing something" Cote, NASDAQ's Bob "I destroyed IPOs" Greifeld, and, of course, Larry "About to switch jobs with Tim Geithner" Fink, who via Bloomberg TV get to opine on such issues as the fiscal cliff and America's $16.2 trillion, and very rapidly rising debt. Some of their views: "It's Washington's fault we're not hiring and not spending." Honeywell's Cote says, "If we were playing with fire in the debt ceiling, we'll be playing with nitroglycerine now when it comes to the fiscal cliff." Larry Fink says, "We need to speak out as  CEOs…Politicians generally address things when their back's against the wall…We have the threat of going into a recession in the first quarter…This is a very uncertain moment." And thanks to the Fed, which has come at just the wrong moments, and always bailed out Congress every time a difficult decision had to be taken, the likelihood of a benign outcome on the fiscal cliff is far worse, than even Goldman's latest worst case scenario which sees just a 33% probability of resolution before the year end.

NYSE Short Interest Drops To 5 Month Low

One place where the S&P level still does have a modest influence is the number of shorts in the market, which are strategically used by repo desks and custodians (State Street and BoNY), to force wholesale short squeezes at given inflection points, usually just when the bottom is about to drop out. The problem is that even short squeezes are increasingly becoming fewer and far between, for the simple reason that the Fed has managed to nearly anihilate shorters as a trading class with its policy of Dow 36,000 uber alles. This was demonstrated with the latest NYSE Group short interest data, which tumbled to 13.6 billion shares short as of the end of September, or the lowest since early May, just as the market was swooning to its lowest level of 2012 to date.

How Welfare and Warfare are Stealing Your Wealth

by Greg Canavan, Daily
Christine Lagarde, former student at the Holton Arms school in Bethesda, Maryland, and now head of the IMF, wants Europe to ease up on austerity. Wolfgang Schauble says Lagarde should keep her mouth shut.
Schauble points out that Europe has a hard, steep path to follow. Reducing debt is like climbing up a mountain. If you decide that it’s too hard, and you turn and go the other direction, ‘then the mountain will get even higher’, he says.
Lagarde probably doesn’t know whether she’s going up or down. But at least she’s not alone. Ben Bernanke, Mario Draghi, Larry Summers, Joseph Stiglitz, Paul Krugman – all of them are hopelessly lost.
But here’s a report from the Wall Street Journal that may help these hikers find their bearings.
Read More @

Ron Paul: 22.8% Real Unemployment!

from RonPaul2008dotcom:

Gold Slides Even As Ongoing South African Gold Miner Strike Means No Production On The Horizon

Anyone wondering what the reason for today's dramatic gold price dump is, look no further than South Africa, where we learn that after nearly two months of endless strikes in the metals and mining complex, the country - the world's fifth largest producer of gold - is nowhere nearer to restoring its mining output. This of course means that less and less gold will hit the market. Which in centrally planned and regulated markets, means gold will collapse far more than the 1% so far, and likely close limit down, with Bernanke's compliment (don't worry that none of this makes logical sense: Heidelberg toner cartridge did a hostile take over of logic long, long ago).

You Decide...

US Govt to Confiscate All Precious Metals & Use IRS To Enforce “Cashless Society”…?

[Ed. Note: We hesitate to post this piece at all, so take it with a grain of salt because the hyper link provided in this article does not link with the original article. We are searching - if you find the link to the original, as posted on Selig & Assoc. or elsewhere, please provide the link in the comments below. Thanks.]
from Dont-Tread-On.Me:

US Govt to Confiscate All Precious Metals & Use IRS To Enforce “Cashless Society”
Federal Tax Practitioner David Selig ( says Americans better get ready quickly for a cashless society.
“As a Federal Tax Practitioner who defends and represents people and businesses before the Internal Revenue Service, I have a unique vantage point to some of the issues that are going to affect the way we shop, purchase, buy and acquire items. First and foremost, the groundwork has already been laid for a “cashless society”. In fact, starting November 11, 2012, you will not be able to cross a certain New York toll bridge without e-z pass or its non-cash equivalent. And this “paradigm” is soon going to be extended to supermarkets and restaurants. Moreover, the IRS has devoted considerable resources to “barter exchanges” and will insinuate itself of nearly every transaction that exceeds $10.  To legitimize the new “cashless currency”, the government will confiscate gold, silver and all other precious metals that are privately held and owned, with the exception of wedding rings. However, all future wedding rings will be made from a non-precious alloy.”
Read More @ Dont-Tread-On.Me

Gold And Silver Fall, Stocks Soon To Follow

from Gregory Mannarino:

No Liberty = No Republic: Some States Not Sending Absentee Ballots to Military 

by William Bigelow, Breitbart:

Jurisdictions in Vermont, Michigan, Mississippi and Wisconsin have failed to mail absentee ballots to military members by the Sept. 22, 2012, deadline established by the MOVE Act. That was 45 days before the November 6 elections, which was what was required.
Rep. Buck McKeon, R-Calif., chairman of the House Armed Services Committee; Rep. Daniel E. Lungren, R-Calif., chairman of the House Administration Committee; and Rep. Lamar Smith, R-Texas, chairman of the House Judiciary Committee, sent a letter to the Defense and Justice departments reading:
“We are concerned that, absent prompt and effective remedial action, some men and women in uniform will be deprived of the 45-day window to vote guaranteed by the Military and Overseas Voter Empowerment Act. While implementation and enforcement of the MOVE Act appear on course as an improvement over the poor performance we saw in the 2010 elections, we are concerned about the currently reported shortcomings. If any element of local, state or federal government does not abide by the MOVE Act, the result should not ever be the disenfranchisement of any member of the armed services.”
Read More @

What To Expect Next With Gold & Silver Under Pressure

from KingWorldNews:

With continued pressure in the gold and silver markets, today Michael Pento writes about what is happening in the gold market, and what to expect going forward. Pento has been incredibly accurate regarding his predictions in these areas. Today Michael Pento writes exclusively for King World News to let readers know what is taking place in this critical market, and how he is positioning his clients. Here is Pento’s piece:
There are two reasons why the price of gold has been under pressure in the last week. One of them is legitimate; while the other is completely without grounds.
Michael Pento continues @

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Fassbeck: Low Wages and High Unemployment Paralyzing Western Economies

The IMF and World Bank Use Arab Uprisings to Expand Control Over Nations

by Susanne Posel, Occupy Corporatism:

Many oil-producing nations such as Saudi Arabia, the US, the UK, Japan and Kuwait have pledged $165 million to fund an intitative of the World Bank that will allegedly prop up countries that have been affected by manufactured Arab Spring uprisings.
Along with the approval of the UN, International Monetary Fund (IMF), the World Bank, the Islamic Development bank and the OPEC fund for International Development are supporting the partnership.
The IMF and the World Bank, at a meeting in Tokyo, focused talks on the Middle East and their economies of which recent Arab Springs have paved the way for globalist influence in the region. Kim Yong-Yim, newly appointed president of the World Bank remarked that these revolutions have allowed for the international community to refine their development of such areas.
Read More @

Precious relic

Gold remains popular, despite the doubts of economists
from The Economist:
GOLD is the most difficult asset class to analyse. For a start, it divides opinion so sharply. Its supporters have a quasi-religious fervour, regarding the metal as the one true source of value. Its detractors (a group that includes many economists) treat it, in John Maynard Keynes’s phrase, as a “barbarous relic” that has no place in serious discussions of monetary policy.
The task of valuing gold is made harder by the fact that it lacks a yield, let alone a profit from which you can calculate a price-earnings ratio. The best you can do is see how its price has performed relative to other things (see chart). Since 1971, when its link to the dollar was severed, gold has easily outpaced American consumer and house prices; it has beaten the S&P 500 and oil as well. The picture is not quite as clear if you compare the price with the 1980 peak; gold is still lower now in real terms than it was then.
Read More @

Keeping an Eye on Rockefeller’s Gatekeepers: CFR Asks, ‘Economic Decline or American Renewal?’

from CFR:

Panel members discuss issues highlighted in CFR’s Renewing America initiative, including the U.S. fiscal cliff, government regulations, the state of U.S. infrastructure, and the economic consequences of political polarization.

Fiat Currency and the Emerging Police State

by John Rubino,
Our transition from more-or-less free country to police state is accelerating. The NSA’s Utah data mining facility, ever-tighter restrictions on offshore accounts, the Internet “kill switch”, the Patriot Act’s many assaults on the Bill of Rights, the militarization of local police, the spread of drones for domestic surveillance; each has a role in the high-tech updating of a very old idea: that the state is paramount and the individual a slave to public order and national power.
But why is this happening now, rather than in 1950 or 2050? The answer is that we’re reaping the whirlwind that always accompanies fiat currency. We created a central bank in 1913 and freed it from the constraint of gold in 1971. Give the government or the big banks the power to create money out of thin air and you eventually get a dictatorship. “Eventually” just happens to be now.
Read More @

Showdown at WalMart on Friday: Solidarity Not Quite Forever

by Gary North, Lew Rockwell:
Back in 1956, I first heard Pete Seeger sing “Solidarity Forever.” He is still singing. But forever seems to have been cut a little short.
The American labor union movement is in its death throes in the private sector. I did not expect to see this in my youth.
On Friday, November 23 – Black Friday – WalMart workers are threatening to walk out if WalMart does not agree to stop retaliating against union organizers. But they have yet to prove that WalMart has in fact retaliated.
This is mission impossible.
This is a suicide mission.
Read More @

Phony ‘Analysis’ Can’t Hide Metals Manipulation

by Jeff Nielson, Bullion Bulls Canada:
It is very hard to resist the urge to label members of the mainstream media “parrots”, when time after time we see this herd unanimously regurgitating the exact, same drivel – no matter how vacuous or absurd the pseudo-reasoning on display.
We observe this sad truth again and again in precious metals markets, with the recent pullback in prices being a classic example. Today was a down-day for commodities – all of them – as the propaganda machine decreed that with a slowing global economy that they were “too risky”.
The simple fact that we see the entire commodities complex moving in lock-step on most days is conclusive proof by itself of the rampant manipulation of commodities markets in general, and precious metals markets in particular. Each individual commodity market is composed of two sets of parameters: “global” parameters (applicable to most/all commodities), and the individual parameters particular to each commodity – separately.
Read More @

Now the Kiwis join Gold race

from Bullion Street:
Gold investment finally catching up with the Kiwis as a resurgence of interest in gold and other precious metals is widely seen nowadays in New Zealand.
Many investment broking firms in the island nation attributed such a dramatic rise to speculations that the price of gold could go past $2000 an ounce by the end of the year.
Ongoing and possibly worsening economic crises in Europe, the US Government’s policy of unlimited quantitative easing and the Chinese Government’s efforts to build up its gold reserves also prompted the kiwis to gold, they added.
Read More @

Coal miners ask Obama to stop ‘absolute lies’

by Casey Junkins, Herlad Star:

Miners gathered Friday afternoon to express their opposition to Obamas energy and environmental policies, which they believe threaten their jobs. Miner Mitch Miracle read aloud a letter the miners mailed to Obama that outlines some of their concerns.
The miners said Obamas campaign team is running ads filled with blatantly false statements about the miners regarding their participation in Republican presidential candidate Mitt Romneys August campaign stop at the Century Mine. These ads assert that the miners were forced to attend the event by the mines owner, Robert Murray.
There are numerous false statements and absolute lies concerning our participation in this event, mostly started by a local shock jock radio host, the miners letter to Obama states. Why would you (Obama) lie about the 500 working miners who have signed this letter? We, the employees of the Century Mine would request you immediately stop these false ads.
Read More @

The Bernank – I Want To Pick A Fight With China...

by Bruce Krasting, Bruce Krasting Blog:
Ben Bernanke has been “littering” all over the globe for years. Quite a few countries have had to clean up after he has scattered some “trash”. Bernanke acknowledged that he has been littering outside of US borders in a speech in Tokyo on Saturday (Link). Ben defended his global scattering of bits of paper with:
Assessments of the international impact of (QEIII) should give appropriate weight to their beneficial effects on global growth and stability.
So Ben thinks that US trash is good trash.
Ben did not go to Japan to defend US monetary policy. He traveled around the world to deliver a very specific message. He was very pushy about the need for Emerging Market economies to allow their currencies to appreciate versus the dollar. Ben’s words that will, no doubt, raise some eyebrows in Beijing:
Read More @

Your CRIMINAL Government is trying to make garage sales illegal

from Hang the Bankers:

Kirtsaeng v. John Wiley & Sons will center on whether or not an individual can buy copyrighted material outside the United States, then resell it inside the US. The first-sale doctrine, established 1908, permits individuals to sell copyrighted products to others. According to the doctrine, the copyright holder only has control over the first sale. But for products manufactured abroad – which include almost all popular electronics, including those Chinese-made gadgets consumers are so used to swapping annually – this law is being challenged.
The trial, which begins October 29, follows a Thai student at Cornell University’s choice to buy his textbooks abroad. Noticing that the books, required for class, were cheaper in Thailand, Supap Kirtsaeng had his relatives gather and mail them to him. Eventually, the graduate student began selling those books online at a profit.
Read More @

On currency swaps and why Gartman may be wrong in focusing on the adjusted monetary base

from, “A View from the Trenches“ via Mises:

Today, we were supposed to follow up on our last topic (how to shift to a commodity-based standard, with a 100% reserve requirement). However, we will have to leave that for quieter times. Right now, we have to address a few points that we have been making since 2009:
There’s a truly “must-read” book, for anyone who is really interested in understanding how central banks have run the show since the 1920’s: “The monetary sin of the West”, by Jacques Rueff. In his memoirs, M. Rueff makes it clear that the rally that ended in October 1929 was fueled by what we call today currency swaps. Indeed, in 1931 (Robert Triffin was still a student) M. Rueff was writing:
“…There is one innovation which has materially contributed to the difficulties that are besetting the world…(…)… Under this system, central banks are authorized to include in their reserves not only gold and claims denominated in the national currency, but also foreign exchange. The latter, although entered as assets of the central bank which owns it, naturally remains deposited in the country of origin.
Read More @

Quote Of The Day: Unbelievable Hypocrisy Edition

Jim Bullard, of the St. Louid Federal Reserve, is currently answering questions following the delivery of prepared remarks. As a reminder, Bullard is a non-voting member of the FOMC this year who in 2010 was the first Fed official to call for a second round of QE. He just said the following:
  • Fed’s Bullard Says He’s Concerned About Low Returns to Savers
Now this is beyond mere sheer hypocrisy and pathetic "good Fed cop, bad Fed cop" routine (still waiting for Bill Dudley to disclose what is the deflating hedonic equivalent of food inflation in a NEW iPad world). This is similar to Stalin saying, several days after completing the purges which saw tens of millions of people quietly "disappeared", that he is concerned that the price of graveyard real estate might be in a bubble.

Jeff Macke On Citi's Earnings: "These Numbers mean NO-THING"

  Several years ago Jeff Macke had his brief run in with comedic immortality courtesy of the "Car People" Fast Money episode which promptly cost him his job, if generating countless hours of Wall Street laugh out loud humor in the process. Ever since then he has more or less fallen off the financial pundit horizon, which in retrospect is sad, because as he shows here, he still has a fascinating ability to cut through the BS. Because while earlier we explained why Citi's numbers were nothing short of garbage, with the headline spin being used just to fool algos and various other non-carbon based trading lifeforms, using run-on sentences and pretty charts, Macke does this far, far more efficiently, and with far more exuberance than even we thought possible: "There's a genius to it. These numbers mean NO-THING, because they can report whatever they want." The man's still got it, even if no car people were destroyed in the filming of this segment.

Timberrrrr!... Will Be The Best Performing Asset In Next 7 Years Per Jeremy Grantham; Large Caps To Return 0.0%

Going forward, when traders yell "Timberrrrrr!" it just may mean the diametrical opposite of what said announcement has traditionally implied. At least according to the latest just released 7 year forecast of various asset class returns as per Jeremy Grantham's GMO. In it, the $100 billion asset manager sees Timber returning an annualized 6.5% over the next 7 years (as of September 2012), outperforming virtually every other asset class tracked by GMO, with Emerging Market stocks (supposedly Africa is envisioned here, as China's debt encumbrance is almost maxed out) second at 6.1%, and International Large stocks in third place. Those who hope to retire with their holdings of US Large Cap firms may want to reconsider, following a 0.0% return in 7 years, underperforming such simple things as cash which GMO sees as returning 0.1% (arguably this implies modest to quite modest deflation in the future). The worst of the worst? US and International bonds, with Inflation Linked bonds underperforming virtually everything with a -2.7% return.

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