Germany Formally Requests That Greece Hand Over Its Fiscal Independence
It was tried previously (several times) under "slightly different" circumstances, and failed. Yet when it comes to taking over a country without spilling even one drop of blood, and converting its citizens into debt slaves, Germany's Merkel may have just succeeded where so many of her predecessors failed. According to a Reuters exclusive, "Germany is pushing for Greece to relinquish control over its budget policy to European institutions [ZH: read ze Germans] as part of discussions over a second rescue package, a European source told Reuters on Friday." Reuters add: "There are internal discussions within the Euro group and proposals, one of which comes from Germany, on how to constructively treat country aid programs that are continuously off track, whether this can simply be ignored or whether we say that's enough," the source said.' So while the great distraction that is the Charles Dallara "negotiation" with Hedge Funds continues (as its outcome is irrelevant: a Greece default is assured at this point), the real development once again was behind the scenes where Germany was cleanly and clinically taking over Greece. Because while today it is the fiscal apparatus, tomorrow it is the legislative. As for the executive: who cares. At that point Goldman will merely appoint one of its retired partners as Greek president and Greece will become the first 21st century German, pardon, European colony. But at least it will have its precious euro. We can't wait until Greek citizens find out about this quiet coup.Fitch Gives Europe Not So High Five, Downgrades 5 Countries... But Not France
Festive Friday fun:- FITCH TAKES RATING ACTIONS ON SIX EUROZONE SOVEREIGNS
- ITALY LT IDR CUT TO A- FROM A+ BY FITCH
- SPAIN ST IDR DOWNGRADED TO F1 FROM F1+ BY FITCH
- IRELAND L-T IDR AFFIRMED BY FITCH; OUTLOOK NEGATIVE
- BELGIUM LT IDR CUT TO AA FROM AA+ BY FITCH
- SLOVENIA LT IDR CUT TO A FROM AA- BY FITCH
- CYPRUS LT IDR CUT TO BBB- FROM BBB BY FITCH, OUTLOOK NEGATIVE
- In Fitch's opinion, the eurozone crisis will only be resolved as and when there is broad economic recovery.
US Dollar fails at 82
Since the late spring of last year, the US Dollar has been the recipient of
a fair amount of "safe haven" flows, mainly in response to the woes
afflicting Europe and by consequence, the Euro. We have said repeatedly
that the US Dollar rally was not based on any desire to own the Dollar out
of bullish economic fundamentals but rather out of fears concerning the
viability of the Euro.
What this translates to is that any news or developments that seem to
lessen the severity of the European sovereign debt situation, whether
through concerted Central Bank action or from any other front, ... more »
The Three Biggest Lies the Government Is Telling You
by Charles Goyette, LewRockwell.com:
Government lies are legion.
So many are its lies, that narrowing them down to three of the most important is a demanding task. But our current crisis has been chiefly enabled by monetary policy, fiscal policy, and the global military empire. So I have chosen to focus on lies about each: the Federal Reserve, the orchestrator of monetary policy; the U.S. budget, the accounting of government fiscal policy; and a few of the Empire’s war lies. I am sharing just a smattering of this astonishing record of duplicity in these areas, for life is short, or at least far too short to recount all of the state’s lies about each.
Lie #1: The Federal Reserve Is a Bank
Practically everything the government says about banking is a lie. Central banks are not banks. The Federal Reserve, the central bank of the United States, is not a bank.
Read More @ LewRockwell.com
Government lies are legion.
So many are its lies, that narrowing them down to three of the most important is a demanding task. But our current crisis has been chiefly enabled by monetary policy, fiscal policy, and the global military empire. So I have chosen to focus on lies about each: the Federal Reserve, the orchestrator of monetary policy; the U.S. budget, the accounting of government fiscal policy; and a few of the Empire’s war lies. I am sharing just a smattering of this astonishing record of duplicity in these areas, for life is short, or at least far too short to recount all of the state’s lies about each.
Lie #1: The Federal Reserve Is a Bank
Practically everything the government says about banking is a lie. Central banks are not banks. The Federal Reserve, the central bank of the United States, is not a bank.
Read More @ LewRockwell.com
Debt Ceiling 101, Santelli Sounds Off
In
an effort to reach the angry mob, CNBC's Rick Santelli goes all Sesame
Street on the numbers behind the US Debt Ceiling Rise. Focusing for
two minutes on what this practically means for every man, woman, child,
and politician, the shouting Chicagoan points out that when the US
breaches this new limit then the world's entire population will be on
the hook for $2,346 each (and $52,409 per US person).
from Silver-Investor.com:
David
Morgan, publisher of The Morgan Report, a monthly newsletter that
covers economic news, currency and precious metals, believes that silver
will be persistent this year in trying to break through its resistance
of $50 an ounce. A tightly held silver supply, continued sovereign debt
concerns in Europe and a strong appetite for the white metal at the
start of the year are factors that he says will make silver a leader in
the commodity sector in 2012. HAI Managing Editor Drew Voros recently
caught up with Morgan to discuss what’s in store for the silver market
this year.
Hard Assets Investor: Silver is starting out 2012 strongly. Is it following gold or is it blazing its own path?
David Morgan: Silver is following gold, but if you study silver carefully, there are times when silver leads and gold lags.
A quick example was last year. We saw silver basically double from around the $25level to $48, in a matter of months. That ended about May 1. Gold did a similar parabolic move, but not quite the percentage gain that silver outlined, but it did it later in the year. So who went parabolic first, silver or gold? Well, in this case, silver did.
Read More @ Silver-Investor.com
David
Morgan, publisher of The Morgan Report, a monthly newsletter that
covers economic news, currency and precious metals, believes that silver
will be persistent this year in trying to break through its resistance
of $50 an ounce. A tightly held silver supply, continued sovereign debt
concerns in Europe and a strong appetite for the white metal at the
start of the year are factors that he says will make silver a leader in
the commodity sector in 2012. HAI Managing Editor Drew Voros recently
caught up with Morgan to discuss what’s in store for the silver market
this year.Hard Assets Investor: Silver is starting out 2012 strongly. Is it following gold or is it blazing its own path?
David Morgan: Silver is following gold, but if you study silver carefully, there are times when silver leads and gold lags.
A quick example was last year. We saw silver basically double from around the $25level to $48, in a matter of months. That ended about May 1. Gold did a similar parabolic move, but not quite the percentage gain that silver outlined, but it did it later in the year. So who went parabolic first, silver or gold? Well, in this case, silver did.
Read More @ Silver-Investor.com
HUI notes
Trader Dan at Trader Dan's Market Views - 55 minutes ago
We are seeing a definite reversal in the price action of the gold miners in
comparison to the action in the broader equity markets in today's session.
I am not sure of the reason but whatever it is, the result is that the
mining shares are finally seeing a strong bid in comparison to the broader
equity markets.
As most gold mining shareholders have been all too painfully aware of by
now, the mining shares have been lagging the broader market for the last 6
months or so now. Notice the peak last summer and the progression lower,
particularly at the end of last year.
Trying to deciph... more »
Subtle Changes In Paper Control Will Mark Big Money's Transition Into Gold
Eric De Groot at Eric De Groot - 1 hour ago
Big money will be forced to act with or without understanding. So, rather
than listening to their words, I watch the little things, such as sutble
changes in paper control, to time the inevitable shift in capital. Scatter
Plot: Net Long As % of Open Interest (NL%OI) for Commercial Traders vs
6-Week Natural Logarithmic Change in POG Since 2002 Hi Eric, Have been
reading most all your...
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]
Friday Fraud Transitioning Into Friday Perfection
Dave in Denver at The Golden Truth - 2 hours ago
*Gold provided the best returns of all commodities in the past five years
when adjusted for volatility, and Goldman Sachs Group Inc. says the rally
will continue as options traders signal no change in the metal’s relatively
low risk. **LINK*
I hate to beat a dead horse but I wanted to share the truth about Obama's
policies with the people out there who still give him some benefit from
doubt, especially as I'm sure his latest round of hot air and empty
promises last Tuesday evening was probably well-received by the dopes who
still have Hope. It turns out that ABC News ran a brief... more »
US GDP remains mired in mediocrity
Trader Dan at Trader Dan's Market Views - 2 hours ago
Reports out this morning show that US GDP for 2011 was a pathetic 1.7%
compared to 3.0% for 2010. Imagine what it would have been without all that
QE! No wonder the FOMC is giving the green light to hedge funds to jam the
stock market higher with their stupid zero interest rate policy now
extended out for another two years.
Negative Interest Rates Forces People To Speculate
Admin at Marc Faber Blog - 3 hours ago
With negative interest rates, your money in the bank doesn't give you any
return, and it forces people to speculate, on things like real estate,
equities and government bonds. That creates bubbles. And in a bubble, the
majority of people lose money. - *in Edmonton Journal*
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Euro Gold right at Resistance level
Trader Dan at Trader Dan's Market Views - 3 hours ago
Take a look at the following chart of gold priced in Euros, or "Euro-Gold"
as I prefer to term it. I have mentioned here and on some of my KWN Weekly
Metals Wrap that this chart is one that all gold traders must continue to
reference if they are to get a proper handle on the technical aspects of
this market. The reason for this is that the issue most shaking the gold
market during the "risk off" trades was the mess in the sovereign debt
situation of many countries in the Euro-Zone.
Fears over that factor were seeing European-based buying of gold as doubts
over the integrity of the ... more »
Is High Yield Credit Over-Extended?
"Reach for yield"
is a phrase that never gets old, does it? Whether it's the "why hold
Treasuries when a stock has a great dividend?" or "if this bond yields
3% then why not grab the 7% yield bond - it's a bond, right?" argument,
we constantly struggle with the 100% focus on return (yield not
capital appreciation) and almost complete lack of comprehension of risk
- loss of capital (or why the yield/risk premium is high). Arguing
over high-yield valuations is at once a focus on idiosyncrasies
(covenants, cash-flow, etc.), and technicals (flow-based demand and
supply), as well as systemic and macro cycles, which play an
increasingly critical part. Up until very recently, high yield
bonds (based on our framework) offered considerably more upside (if you
had a bullish bias) than stocks and indeed they outperformed
(with HYG - the high-yield bond ETF - apparently soaking up more and
more of that demand and outperformance as its shares outstanding
surged). With stocks and high-yield credit now 'close' to each other in
value, we note Barclay's excellent note today on both the seasonals
(December/January are always big months for high yield excess return)
and the low-rate, low-yield implications (negative convexity
challenges) the asset-class faces going forward. The high-beta
(asymmetric) nature of high-yield credit to systemic macro shocks,
combined with the seasonality-downdraft and callability-drag suggests if
you need to reach for yield then there will better entry points later
in the year (for the surviving credits).Explaining Modern Finance And Economics Using Booze And Broke Alcoholics
Courtesy of reszatonline, who brings us the following allegory by way of Tim Coldwell, we are happy to distill (no pun intended) all of modern economics and finance in a narrative that is 500 words long, and involved booze and broke alcoholics: in other words everyone should be able to understand the underlying message. And while the immediate application of this allegory is to explain events in Europe, it succeeds in capturing all the moving pieces of modern finance.
Jim Sinclair’s Commentary
The Formula of 2006 still rules!
2011 GDP: 1.7% Joe Weisenthal
That’s the final, pathetic growth number for 2011.
From the just-released GDP report:
Real GDP increased 1.7 percent in 2011 (that is, from the 2010 annual level to the 2011 annual level), compared with an increase of 3.0 percent in 2010.
The increase in real GDP in 2011 primarily reflected positive contributions from personal consumption expenditures (PCE), exports, and nonresidential fixed investment that were partly offset by negative contributions from state and local government spending, private inventory investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
Not exactly a barnburner.
More…
Jim Sinclair’s Commentary
Mainstream media has Arab Spring totally backwards.
Flash back to the glee of financial TV reporters and talking heads as Egypt disintegrated into what was then called a spontaneous outbreak of democracy.
God help Western interests with the present Middle Eastern conditions.
As Tensions Rise, Egypt Bars Exit of Six Americans By STEVEN LEE MYERS and DAVID D. KIRKPATRICK
Published: January 26, 2012
WASHINGTON — Building tensions between the United States and Egypt flashed into the open Thursday when Cairo confirmed that it had barred at least a half-dozen Americans from leaving the country and the Obama administration threatened explicitly to withhold its annual aid to the Egyptian military.
The travel ban came to light on Thursday after the International Republican Institute, an American-backed democracy-building group, disclosed that the Egyptian authorities had stopped its Egypt director, Sam LaHood, at the Cairo airport on Saturday before he could board a flight to Dubai in the United Arab Emirates.
Mr. LaHood is the son of Ray LaHood, the secretary of transportation and a former Republican congressman from Illinois. He is one of six Americans working for the Republican Institute or its sister organization, the National Democratic Institute, whom Egypt has blocked from leaving as part of a politically charged criminalinvestigation into their activities.
Just a day before Mr. LaHood was detained temporarily, President Obama had warned Egypt’s leader, Field Marshal Mohamed Hussein Tantawi, that this year’s American military aid hinged on satisfying new Congressional legislation requiring that Egypt’s military government take tangible steps toward democracy, said three people briefed on the conversation.
Mr. Obama referred specifically to the criminal inquiry into several democracy-building groups with foreign financing, including the Republican Institute, the people who were briefed said, and he made clear that Egypt had not fulfilled the Congressional requirements, but Field Marshal Tantawi did not seem to believe him.
More…
My Dear Friends,
I have made it a practice not to comment on other people’s opinions as everyone has a right to voice how they see things and express themselves. I also know that no one really knows to the penny or exact day. Having said that, we in the community have given a stage to an expert on long term cyclical economic and political events.
Martin Armstrong is a master of this discipline and may have no real competition between cycle and historic commentary. However, as you can see from one example of the large amount of incoming mail I am getting over the past few days, I need to answer Martin’s third bearish call.
The first two calls for $1100 did not materialize. In fact, gold twice went in the opposite direction with a fervour.
I do not agree with Martin here and now.
By normal measures, the US dollar is violently oversold. The dollar and gold has been tied whether I like it or not.
There are special circumstances in the dollar now as the Fed has turned the light on domestic QE. I cannot see a significant dollar rally as a result. I also cannot see gold doing worse than chopping into the $1700 range.
If there is anything correct to his bearish prediction, which I doubt, it would take this action to a chop between $1650-1764, but I think we are now moving into the $1700-2111 range.
Martin Armstrong is the master at the long term cyclical events. To abandon gold now to try and buy it cheaper in 60 to 90 days with the world of finance in the condition it is in, is in my mind MADNESS.
Sincerely,
Jim
The New New Gold Rush – Don’t Think So CIGA Eric
The flow of capital from the public to private sector as the sovereign debt crisis intensifies has been sending the price of movable assets higher since 1999. Subtle difference among these assets, such as varying degrees of liquidity, sensitivity to currency devaluation, and global demand and control translates into difference in money flows and rates of appreciation.
While a rising tide of currency devaluation has been lifting all boats, it favors certain assets. My Gold and Equities, Gold Wins This Cycle commentary provide but one example of this favoritism.
As retail money ponders the seemingly unanswerable headline dilemma, “So why is gold, the quintessential safe haven/fear trade, up about 7% in 2012 too? That’s about the same as the Nasdaq.”
Gold has kept pace equities in 2012, not because of the distinction between risk-on and risk-off but rather its preference by global capital flows as the world’s premiere movable asset while confidence decays.
Chart 1: Nasdaq Composite Index (OTC) to Gold Ratio
Headline: The new new gold rush
NEW YORK (CNNMoney) — The market is off to a scintillating start in 2012 and many of last year’s worst performers are leading the charge.
Europe debt worries seem to be dissipating a bit, helping the the euro bounce back. And investors are dumping stodgy Treasury bonds, pushing yields higher in the process. Risk is back.
So why is gold, the quintessential safe haven/fear trade, up about 7% in 2012 too? That’s about the same as the Nasdaq.
Source: money.cnn.com
More…
Jim Sinclair’s Commentary
As usual, John Williams of ShadowStats.com tells us how it really is.
- U.S. Hyperinflationary Great Depression Moves Ever Closer
- U.S. Government and the Federal Reserve Effectively Have Destroyed Global Confidence in the U.S. Dollar
- Systemic-Solvency and Economic Crises Have Not Abated
- Precursors to Ultimate Dollar Disaster Are in Place; 2014 Remains the Outside Timing for Same
No. 414: Hyperinflation Special Report 2012
http://www.shadowstats.com
Jim Sinclair’s Commentary
The condition of…
Jim Sinclair’s Commentary
The huge securitized debt on housing is because the FASB allowed it to be valued by whatever the bank or institution thought it was worth.
For almost all of this crap there simply is no meaningful market. This debt is therefore valued in a free market at or near zero.
They call that a legacy Asset. It is a cute name meaning nothing.
New home sales fall in December Posted 2012/01/26 at 10:04 am EST
WASHINGTON, Jan. 26, 2012 (Reuters) — New single-family home sales unexpectedly fell in December for the first time in four months and the median home price dropped, dampening some of the hopes the housing sector will boost the economy this year.
The Commerce Department said on Thursday sales decreased 2.2 percent to a seasonally adjusted 307,000-unit annual rate.
Economists polled by Reuters had forecast sales at a 320,000-unit rate. November’s sales pace was revised slightly lower.
The housing market remains constrained by high unemployment, falling prices and an oversupply of unsold homes following a bust that triggered the 2007-09 recession.
Sales fell in two of the country’s four regions, including a 10.1 percent drop in the South, where most new homes were sold.
The median sales price for a new home fell 2.5 percent to $210,300 last month, the biggest drop in four months. Compared to December last year, the median price was down 12.8 percent.
More…
Jim Sinclair’s Commentary
The following chart is courtesy of CIGA Stefaan.
Dear Jim,
Your comments today on institutions investing in gold were right on. Having worked for one of the world’s largest actuarial consulting firms and having spent years in the pension funding industry, I know that many pension funds, especially governmental funds, are severely underfunded and would need annual gains in excess of 20% to maintain their validity.
The recent embarrassing run for President by our governor of Texas might leave the impression that Texans are not too smart, however, the Texas Teachers Retirement Fund has invested 5% of total assets in physical gold. They made another large commitment last year when it was $1486/oz. Mr. McGuire, the fund manager, originally started investing the fund’s assets in 2007 when gold was $650. That is a significant profit to date. Other fund managers will follow as pointed out in the article you can find by clicking here…
Another interesting news excerpt from Bloomberg in 2011 is below:
The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.More…
The fund, whose $19.9 billion in assets ranked it behind Harvard University’s endowment as of August, according to the National Association of College and University Business Officers, added about $500 million in gold investments to an existing stake last year, said Bruce Zimmerman, the endowment’s chief executive officer. The holdings are worth about $987 million, based on yesterday’s closing price of $1,486 an ounce for Comex futures.
Sincerely,
CIGA DM
Hi Jim,
Though I’m sure you’ve seen this already, I wanted to share just in case. You were the first and only to mention Tanzania (which of course is part of East Africa) of all people I listen to or read over the years.
All the best,
CIGA Omid
My dear friend Omid,
If you were there with me in the 80s and I told you a leading international manufacturing nation was taking form along with China you might have laughed at me.
The ascendancy of Africa, lead by Tanzania and its present president is taking place.
Tanzania is loaded with natural gas at their Songo Songo project.
In the 1990s I wrote a book about India, China and Tanzania called Boom (click here to view it on Amazon.com). What you are seeing now is all contained there.
Regards,
Jim
East Africa Hosts Biggest Natural Gas Finds
Jan. 17 (Bloomberg) — One of the world’s poorest regions is also home to the biggest natural-gas discoveries in a decade, luring investors from steel billionaire Lakshmi Mittal to Royal Dutch Shell Plc. Lara Setrakian reports from Dubai on Bloomberg Television’s "Countdown." (Source: Bloomberg)
More…
Good morning Jim,
Once again, fantastic interview with Eric and amazing foresight regarding the mainstream entities that will begin to enter the gold market. The beauty of all this is the fact that the world is now waking up to the fact that gold is not a commodity, but currency with many functions such as performing insurance, liquidity, store of value, etc all because of gold’s absence of counter party risk. Gold’s risk has been paid forward. That is how it became a coin. When one holds physical gold they are paid in full at that moment. All the blood, sweat, tears, intellect, etc that went into not only discovering a mineral deposit but the shear amount of man’s time, energy, and effort to extract, refine, mint etc that yellow element is trapped inside that physical asset. In a world awash in liabilities and the "daisy chains" of counterparty risks, very few assets stand outside that realm. Gold, the wealth and reserve asset of the ages, is coming back and will leave many a wondering
"How did we miss this?"
Have a wonderful day,
CIGA PM
Dear CIGA PM,
What I tell you is not a personal conclusion but personal information derived from fact, not speculation.
Mainstream entities are entering the gold market quietly. After June the rush will start because these guys are follow the leader types.
Regards,
Jim
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