Nigel Farage – Europe is Collapsing, Buy Gold & Expect QE

from KingWorldNews:
On the heels of Fed Chairman Bernanke’s comments, Spain being downgraded and key meetings taking place in Europe, today King World News interviewed MEP (Member European Parliament) Nigel Farage, to get his take on the ongoing crisis. Farage told KWN that “when I look into the eyes of the leaders of Europe … what I’m seeing now is madness, absolute, total and utter madness.” Farage also discussed the action in the gold market, but first, here is what Farage had to say about the deteriorating situation in Europe: “Of course, over the last couple of years we’ve had two bailouts of Greece, a bailout of Ireland, Portugal. We’re now on the verge of needing a bailout in Cypress, but perhaps more significantly, a bailout in Spain.”
Farage continues @ KingWorldNews.com

Mike Krieger: China Will Blink And Gold Will Soar

The game continues.  Talk up the economy, talk down printing and pray. If the market heads into the Fed meeting at current levels it runs the risk of being disappointed.  If this is combined with continued economic weakness then the real set up happens between the June meeting and the August one.  It is in that interim period that the market could throw another one of its hissy fits and beg for more liquidity.  Money supply growth is extremely sluggish right now all over the world.  The velocity never happened and the global economy is rolling over.  The Fed is already behind the curve and so when they are forced to act the infusion will have to be huge just to stem the momentum. Mike Krieger suggests people go back and look at different asset classes from the prior two lows in China’s M2 year-over-year growth rate.  The first one occurred in late 2004.  The M2 growth rate then accelerated until around mid 2006.  In that time period gold prices went up around 65% and the S&P 500 went up 20%.  In the second period of acceleration from late 2008 to late 2009 gold was up 65% and the S&P500 was up 15%.  We are at one of these inflection points and considering the DOW/Gold ratio is still holding gains from its countertrend rally from last August of almost 40%, this is probably one of the best entry points to buy gold and short the Dow of any time in the last decade.

Systemic Risk For Dummies

Following the success of the "Dummies Guide To Europe's Problems" and the "Global Economic Collapse For Dummies", we present "Systemic Risk For Dummies". With global systemic risk at March 2009 highs and nearing November 2011 all-time peak levels, perhaps it is worth considering just what it is that all this TBTF-saving money-printing has achieved?

Gold Daily and Silver Weekly Chart - Providing Air Cover for Ben

SP 500 and NDX Futures Daily Charts

Consumer De-Leveraging?

Dave in Denver at The Golden Truth - 1 hour ago

Maybe, maybe not. The media is reporting that the consumer is "de-leveraging" per the Fed's latest "Z-1" flow of funds report (quarterly). You can look at pretty graphs here: LINK Let's get one thing straight. On the surface, the numbers may make it look like the consumer is reducing it's debt load. But we need to see more data about where this "de-leveraging" is coming from. Given that banks are processing a voluminous number of foreclosures, short sales and credit card charge-offs, I would bet a lot of money that the source of this "de-leveraging" is the banks writing off ba... more » 

Ignore the MOPE and Fabrications

Eric De Groot at Eric De Groot - 3 hours ago

Jim is right. Have no doubt, gold is going higher. Do really expect them to acknowledge reality when it looks this bad? The world's enormous debt pile is failing and continues to grow. The value or size of second and third derivative debt (or layers of debt based on debt) boggle the mind. Changing demographics and slowing economy making it impossible to service existing debt. Gold... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

More QE Signals

Dave in Denver at The Golden Truth - 3 hours ago

*I wish I could borrow big city housing the way you can borrow stocks - I would be shorting the heck out of Chicago and NYC properties right now: "what's that? you have a $500k bid? I got one to sell there and two more to go at the price if you want them"* - Dave in Denver It seems that the market status quo after Bernanke's testimony today is that QE is still on hold. For instance, the purveyor of forexlive.com had this to say: "that he’s a lot more relaxed about both the recent US data and Europe than the market thought he would be." Hmmm, really? I'd love to play poker a... more » 

Late-Day Crumble As Stocks Join Gold's Stumble

Whether it was the deterioration in Consumer Credit, downgrade rumors for US financials, Greek bank restructuring/run chatter, or a final realization that near-term QE is off at these levels of equity prices (as signaled by Bernanke and Gold this morning), the equity short-squeeze stumbled hard in the last hour of the day to end unch. Utilities managed to outperform handily as all the high beta sectors dumped into the close as Tech and Financials closed red for the day. Treasury yields and the USD were signalling considerably more equity weakness than we got though the dive caught stocks up but Gold remained the biggest loser of the day (-2% on the week against the 0.7% loss in the USD). Silver remains positive for the week - though matched gold's weakness on the day as Copper and Oil whipsawed up and down on rumor and then lack of follow-through. Equities pulled back closer to the underperforming investment grade (and less so high yield) credit market at the close. Treasury yields ended marginally lower (with the long-bond underperforming) and 7s and 10s -2bps)leaving 5Y flat still up 9bps on the week (and outperforming). Risk markets in general slid as Bernanke's speech was delivered and the Q&A proceeded but stocks went almost totally dead with financials and the S&P 500 e-mini clinging to VWAP as volumes died - until that last hour plunge. MS and BofA took the brunt of the selling pressure (ending down 3-4%) - though they are still well of the lows from a few days ago. VIX cracked back above 22% as we dropped in the end but closed down 0.5vols at 21.7% but implied correlation rose back over the somewhat critical 70 threshold and equities remain notably rich to broad risk assets in general still.

Consumer Credit Misses, As Fed Magically Creates $1.5 Trillion In Net Worth Out Of Thin Air

That the just released consumer credit update for April missed expectations of a $11 billion increase is not much of a surprise. As noted earlier, the US consumer has once again resumed deleveraging: April merely saw this trend continue with revolving credit declining by $3.4 billion, offset by the now traditional increase in student and subprime government motors car loans, which increased by $10 billion. In other words, following a modest increase in revolving consumer credit in March, we have another downtick, and a YTD revolving credit number which is now negative. Obviously the government-funded student loan bubble still has a ways to go. No: all of this was expected. What was very surprising is that as noted in the earlier breakdown of the Z1, the entire consumer credit series was revised, with the cumulative impact resulting in a major divergence from the original data series. Why did the Fed feel compelled to revise consumer credit lower? Simple: as debt goes down, net worth goes up, assuming assets stay flat. Which in the Fed's bizarro world they did! Sure enough, if one compares the pre-revision Household Net Worth data (which can still be found at the St. Louis Fed but probably not for long) with that just released Z.1, one notices something quite, for lack of a better word, magical. Ignoring the March 31 datapoint which does not exist for the pre-revision data set, at December 31, household net worth magically grew from $58.5 trillion in the original data set to $60.0 trillion in the revised one!

A Confused Spain "Rebels" Against Germany... On Twitter

Spain has not even asked Germany Europe for a formal bailout (well they did, but promptly recanted), not has Germany even granted one, and already the fiesty Iberians are protesting against Germany... if only on twitter. As can be seen below the #stopmerkel hashtags has taken Spain by storm. While we wholeheartedly support this expression of independence, we are a little confused just what Spain is protesting: a German bailout of insolvent Spanish banks? We expect once the initial "twitter revolt" subsides, and Spanish citizens realize they would rather have EURs than 95% devalued pesetas, or even Spiderman towels, in their insolvent banks, they will promptly revert to #merkelgive.

"Expect To Be Disappointed" At These Crucial Dates For Europe

The next few weeks consist of some crucial events - perhaps most notably the EU summit of 28-29 June - which create scope for governments to offer fundamental responses to the Euro crisis. Goldman Sachs, like us, expects to be disappointed and are not optimistic that resolution will be achieved in the near-term. Until the Franco-German axis at the heart of the Euro area can agree the terms at which sovereignty is foregone in return for a sharing of the debt overhang (and greater fiscal integration), other countries (potentially including larger more globally contagious nations like Spain and Italy) will be kept in a state that Goldman describes as 'suspended animation' via temporary support measures that contain - but do not resolve - their problems. This bodes ill for their real economic performance. This also fits with our ongoing cyclical travel along Einhorn's circle of death chart for Europe.

The US Deleveraging Has Resumed

Last quarter, upon the release of the Q4 2011 Z.1 (Flow of Funds) report, we penned "The US Deleveraging Is Now Over", because, well, it was: all the categories tracked by the Fed's Credit Market Debt Outstanding series posted a sequential increase over Q3.. As it turns out, the entire "releveraging" was merely a one time artifact of consumers relying more than ever on credit to purchase items in the holiday season. Because as the just released update from the Fed indicates, deleveraging is back with a vengeance. In Q1 the Household sector saw its total debt decline by $81 billion, or the most since Q1 of 2011, to $12.85 trillion. That this happened even as overall net worth supposedly soared by $2.8 trillion as noted in the previous article is truly disturbing, and confirms what everyone knows: not only is nothing fixed in the US economy, but the deleveraging wave continues on its merry way.

Record Hot Winter And LTRO Sent US Household "Net Worth" Up By $2.8 Trillion In The First Quarter

Curious why the Fed chairman has officially long given up on focusing on housing (and of course generating jobs, or worrying about inflation) as the main source of US household "tangible" net worth creation, and is mostly focusing on the Russell 2000 as per his own words? Wonder no more: as the chart below shows, as of Q1 2012, over two-thirds of household assets, or 68.8% to be specific, was financial assets, or $52.5 trillion: assets who value is dependent primarily on the S&P 500.

The Swirlogram Speaks: "The World Has Reentered Contraction"

The business cycle shifted into the Contraction phase of Goldman's 'Swirlogram' framework that we introduced here three weeks ago. The latest observations in their Global Leading Indicator (GLI) as well as the way we entered this Contraction phase suggest this could be a much more severe downturn. In their own words: "We do not yet see clear reasons for optimism in the data, and our GLI framework still suggests that the current phase of the cycle is in a challenging one." Forward S&P 500 returns are definitely biased to the downside given the angle of entry into this contraction and as Goldman notes: "We think that the macro data are providing a clear signal. And hence, we think a negative bias remains warranted."

CFTC Charges South Carolina Company With Running $90 Million Silver Bullion Ponzi Scheme

[Ed. Note: If you don't hold it, you don't own it.]
from KitcoNews:
The Commodity Futures Trading Commission is charging a South Carolina-based firm with operating a $90 million Ponzi scheme, fraudulently offering contracts on silver sales, but never actually purchasing any metal, the agency said late Wednesday.
The CFTC charged Ronnie Gene Wilson and Atlantic Bullion & Coin, Inc, both of Easley, S.C., with violating the Commodity Exchange Act and CFTC regulations, saying they have operated a Ponzi scheme dating back as far as 2001 and continuing through Feb. 29, 2012. The complaint against Wilson and Atlantic Bullion & Coin was filed Thursday in the U.S. District Court for the Southern District of South Carolina, Anderson Division.
In the suit, the CFTC said Wilson and Atlantic Bullion & Coin fraudulently obtained at least $90.1 million from at least 945 investors. The CFTC said it has jurisdiction over the two from Aug. 11, 2011 to Feb. 29 under new provisions contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Read More @ KitcoNews

Is now the time to put screws to JP Morgan?

by Daniel P Collins, The Daily Bell:
James Koutoulas made an interesting claim in a conversation with CNBC last week. He indicated that he has inside information from sources within JP Morgan that the bank is holding up to $600 million in former MF Global customer money. Basically what is nearly left of the shortfall once you take out part 30.7 money identified but currently stuck in the United Kingdom.
The MF Global Inc. trustee has been working on getting this money returned, and in fact JP Morgan discovered and returned $168 million in mid-May, which according to MFGI trustee spokesman Kent Jarrell was unrelated.
Boy, wouldn’t you love to find $168 million caught in the seat cushions of your couch while looking for the remote!
Given that we are now more than seven months into the process, it seems that the time for cooperation is over and the trustee needs to play a little hardball.
And given its current weakened position it might be a good time to play hardball with JP Morgan. All MFGI Trustee James Giddens really needs to do is follow JPM’s playbook. Seems they are awfully adept and kicking someone when they are down.
Read More @ Futures Mag.com

The Fed is Terrified of a Repeat of 2008

from John Galt FLA:

So what keeps an academic figurehead for the world’s elite banksters up at night?
A repeat of the 2008 debacle. Thus far they think they have avoided it in the United States however that creeping feeling that the disaster de jour in Europe will not be avoided is starting to permeate the thought processes of our bankers and that means the U.S. taxpayer must be extorted into another bailout of their mistakes. The problem this time is the wildcards of national sovereignty and nationalism are starting to rear their heads in this discussion and bankers hate people using free will to make decisions about their country’s future. Today’s testimony by the Bernank on Capitol Hill will give us all an insight into the next move by the Federal Reserve, up to and including more QE which is nothing more than pushing against the string at this point in time.
What happened in 2008 that has this author concerned that we may mirror 2008? Let’s all read the June 25, 2008 FOMC statement together for a refresher:
Read More @ JohnGaltFLA.com

China’s Economy… Where All is Not As It Seems

By Greg Canavan, DailyReckoning.com.au:
[Dan Denning is in Europe sorting out the financial crisis, armed with nothing but a paperclip and a very old pink hat. Along with Nick Hubble, we're manning the Daily Reckoning fort while he's gone].
We left you last week with the thought that the market looked very sick indeed. A crash, we said, wouldn’t come as a surprise. Well Friday’s action in the US wasn’t quite a crash, but it wasn’t far off either. And gold’s reverse crash – up nearly US$80 in the US session – added to the fear.
Europe is the primary fear driver at the moment. But weak manufacturing and employment data in the US on Friday cast doubts over its so-called US recovery. And last week China’s own state-doctored statistics showed the growth of the big players in the manufacturing sector ground to a halt in May.
Read More @ DailyReckoning.com.au

 

Silver: A Tier 1 Asset for All

by Dr. Jeffrey Lewis, Silver Seek:
In recent years, precious metals, most notably silver and gold, have played an unusual dual role as both monetary and non-monetary commodities. That may be in the process of changing for major financial institutions to favor holding metals as collateral as the Basel Committee ponders allowing banks to use gold as a Tier 1 capital asset.
Despite its well established and richly deserved safe haven status, gold is currently considered a Tier 3 asset. Ironically, this places the yellow metal lower on the asset totem pole than un-backed government bonds, which currently have low or even negative yields on an inflation-adjusted basis.
Furthermore, gold is generally misunderstood and ignored, while silver is largely viewed as a commodity among investors and central bankers. In fact, Fed Chairman Ben Bernanke, in response to the question of why central banks hold gold, simply answered “Tradition”.
Read More @ Silver Seek

NATO Expansion: From the North Atlantic to the South Pacific

from The Daily Sheeple:
On June 4 NATO’s Secretary General Anders Fogh Rasmussen and New Zealand’s Prime Minister John Key signed a partnership agreement at NATO Headquarters in Brussels, Belgium.
As the Western military bloc reported, the Individual Partnership Cooperation Programme conferred on the South Pacific nation “formalised ties between the two sides after almost two decades of increased cooperation.”
After meeting with Prime Minister Key, Rasmussen said, “Partnerships are essential to NATO’s success and we want to be even more closely connected with countries that are willing to contribute to global security where we all have a stake.“
Read More @ TheDailySheeple.com

Fukushima Radiation Hitting the Streets of LA

from Silver Doctors:
Independent researchers are finding rapidly increasing radiation levels on the West Coast of the US.
For those familiar with Chernobyl’s ‘China Syndrome’, the same is headed to the US and Canada.
For those who have not already, we highly recommend our readers take necessary precautions to protect themselves and their loved ones from the harmful effects of long term radiation exposure.
Checking out Long Term Effects of Low Level Radiation- and How to Prevent Them is a good place to start.
No one wants to imagine the future and what will happen even if the situation does not get worse. Radiation is pouring out of Fukushima and that radiation is hitting the streets of Los Angles quite hard. In April 2012 environmental journalist and LA Weekly contributor Michael Collins, an independent who has tested over 1500 samples since the Fukushima earthquake of 2011, was shocked to find that radiation levels in the falling rain over L.A. measured five times above normal.
Read More @ SilverDoctors.com


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