Jim Grant Discusses The Fed's 'Backward Shooting Gun', And Black Walnut Tree Treasury Replacements
Yesterday, when discussing the forthcoming implications of the Libor scandal, we said that in the barrage of coming lawsuits, "the entity that will be sued by proxy is the Federal Reserve, whose Federal Funds rate is really the setter for the baseline Libor rate." This claim came at an opportune time, just hours before one of the Fed's most vocal critics (and gold standard advocates), Jim Grant, appeared on TV to discuss precisely the same thing. Best summarizing his position is a cartoon that appeared in a recent issue of Grant's Interest Rate Observer in the context of Lieborgate, and who is really at fault here.
Forget China's Goal-Seeked GDP Tonight; This Is The Chart That Keeps The PBOC Up At Night
As
we wait anxiously for the not-too-hot and not-too-cold but just right
GDP data from China this evening, we thought it instructive to get some
sense of the reality in China. From both the property bubble
perspective (as Stratfor's analysis of the record high prices paid just this week for Beijing property
- by an SOE no less - and its massive 'microcosm' insight into the
bubbliciousness of the PBOC's attempts to stave off the inevitable
'landing'); to the rather shocking insight that Diapason Commodities'
Sean Corrigan offers that 'Hot Money Flows' have left China at a rates exceeding that during the worst of the Lehman crisis;
take a range of key indicators – from electricity usage, to Shanghai
container throughput, to nationwide rail freight ton-miles, to steel
output – and you will notice that none of these shows a rate of growth
during the second quarter of more than 4% from 2011, and some are as low
as 1%. Whatever fictive GDP number we are presented with this week, the message is clear: “Brace! Brace! Brace!”FBI Get Involved In US-China Trade Wars
With minutes left until the output of the =RAND() cell better known as China GDP is announced to the world, the US has decided not to wait and take matters into its own hands. Just as an FYI to all countries out there, this is how you escalate a simmering trade war right into the next level:You mean to say that those same Chinese who have had bilateral, USD-bypassing relations, with Iran, and who got a direct exemption from the Iran oil export embargo from Hillary herself, have been playing by their own rules? You have to be kidding. And now what: the US will sell the $1.2 trillion in Chinese debt is owns? Oh wait...FBI probes Chinese telecom giant ZTE over alleged sale of U.S. technology to Iran - RTRS
Bourses around the world in the red/Raid on silver fails/Swiss 2 year funds at negative .54%/
Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 2 hours ago
Good
morning Ladies and Gentlemen:
Gold closed down today to the tune of $10.30 to $1564.90. Silver on the
other hand rose by 19 cents to $27.14. Europe and Asian bourses were
deeply in the red today following riots in both Athens and Madrid
yesterday. The 10 yr Spanish bond yields rose starting the day at 6.5%
whereas the Italian 10 yr bond started its day at 5.85%, The big news
was the big
A Modest Proposal: Start Paying Congress the Minimum Wage
Moody's Downgrades Italy's To Baa2 From A3, Negative Outlook - Full Text
The decision to downgrade Italy's rating reflects the following key factors:
1. Italy is more likely to experience a further sharp increase in
its funding costs or the loss of market access than at the time of our
rating action five months ago due to increasingly fragile market
confidence, contagion risk emanating from Greece and Spain and signs of
an eroding non-domestic investor base. The risk of a Greek exit from
the euro has risen, the Spanish banking system will experience greater
credit losses than anticipated, and Spain's own funding challenges are
greater than previously recognized.
2. Italy's near-term economic outlook has deteriorated, as manifest
in both weaker growth and higher unemployment, which creates risk of
failure to meet fiscal consolidation targets. Failure to meet fiscal
targets in turn could weaken market confidence further, raising the risk
of a sudden stop in market funding.
Clarifying The Entirely Unremarkable Shift In ECB Deposits
We
noted the significant drop in the ECB's Deposit Facility this morning
and as the day wore on it became clear that few - if any - of the
standard talking heads on media channels had a clue what this meant
except the standard comprehension that it must be good for stocks as the
money is finally being put to good use (though as we noted bond yields
would say different). While it is true that a large chunk of money has
shifted away from the deposit facility, the money has not gone anywhere else – it is still sitting at the ECB, just that it is now in the ECB current account
where banks place money to fulfill their reserve requirements. The
catch here is that both excess reserves and the deposit facility will
earn nothing from now on - so why move it? Simple, as BofAML points out, placing the money in the current account has lower operational costs
for banks – if a bank places money at the deposit facility, it will be
returned automatically the day after; however, if placed in the current
account, it will remain there until the bank manually requests to take
the money out. So, it would seem, somewhere a young associate on the
Treasury Function desk just lost his job as he no longer needs to press
the 'send to ECB' button every night. The reality is that the information on bank lending activities that one can infer from these ECB data is minimal at best.
$10 Billion Away From $10 Trillion
According to the just released M2 update, the broadest publicly tracked monetary aggregate (because the Fed doesn't have enough money to keep track of M3) just hit $9,991.5 billion, a $43 billion increase from last week.
In other words, this is the last week in which M2 is under $10
trillion. So enjoy it while the "complete lack of penetration" of the
monetary base into broader monetary aggregates, and of the Fed's
reserves so tightly locked up in bank vaults, is still only 13 digits
(most of it comprising of bank deposits which of course represent no
inflationary threat at all). Next week it will be a record 14 digits for
the first time, and well on its way to surpassing the $15 trillion
held in the deposit-free shadow banking system as the importance (and
inflationary convexity) of the two is rapidly interchanged.
Citi: "The Market Will Form A 'Terminal' High"
Stepping
back from the trees to survey the forest (from the Moon perhaps) often
provides some clarifying picture-paints-a-thousand-words view of the
world. This is exactly what Citi's Rick Lorusso has done and while he
called for a correction back in March which was followed by a 10.9%
drop in the Dow, he was disappointed and is looking for a far greater
adjustment - no matter how many times he hears about negative sentiment
and QE and soft-landings. Starting from a truly long-term yearly chart
of the Dow Jones Industrial Average, Lorusso conjures wave patterns,
Fibonnacci, and cycles as he rotates down to monthly and daily charts
to conclude that his charts "suggest the potential for a very significant high this year," in the July/August period,
summarizing that Citi is "anticipating that the market will form a
terminal high." - even more so on a rally from here as he warns "beware of new highs" so bulls be careful what you wish for.
Dow Down Six-In-A-Row As QE-On Hopes Fade Into Close
Despite
miraculous efforts to find the right fulcrum security to pressure
stocks into the green for the day, equities end the day notably in the
red after cracking (once again on heavy volume and large average trade
size) into the close. Reverting as usual back to VWAP, the market was
typically manic today with two significant QE-on pushes
(Treasury yields lower as Stocks/Gold rallied with USD weakness) after
the better-than-expected 30Y auction ended badly for stocks as it
reverted rapidly back down to bond's reality into the close. Once again
very close to record low yields in Treasuries - with 30Y yield down over 10bps on the week.
Initial bids under Silver (which reverted up to perfectly sync with
Copper on the week) and then WTI (over $86, post further sanctions)
provided some correlated excitement for stocks but it was clear once
again that the low volume liftathon was an exit opportunity for bigger
players with financials and tech notably underperforming.
Average volume and average trade size on the day in aggregate but the
European close rally monkey just ran out of steam as 'size' stepped in
to move ES down to its 50DMA and the Dow near its 200DMA to ends it
sixth down day in a row.
This Is Your Money "Unvanished"
Remember
when various students of the Econ. PhD persuasion (not to mention
various paywall holdco-funded blogs, both desperate for
namedropping-based page views), alleged that reading Zero Hedge makes
one's money "vanish" (instead of focusing their brilliantly insightful
googling efforts on such worthier topics as MF Global or its successor,
PFG, or even Libor)? We were going to present a picture of your typical
"testosterone" addicted reader below as a reminder, but instead we
opted for a picture of MBIA's intraday price, which is up 8.5% from where we broke news that
the company may soon be worth much, much more. And to facilitate these
same academics in their abacus-based pursuits of truth, justice and
the Keynesian way, we will even calculate the annualized return:
847,801,191% (we will withhold calculating what the return on various
short-term call options may have been - we are confident even career
Economists can figure that one out after several hours of
consultations). But since when have facts ever been part of the status
quo's arsenal...
The Race for Energy Resources Just Got Hotter
Malaysia's
state-owned oil and gas company just made a multibillion-dollar bet
that Canada will choose to export its shale gas riches. Even though the
odds of securing permission to export liquefied natural gas (LNG) from
the Canadian west coast are still pretty poor, the costs of such an
endeavor immense, and the timeline in question very long, Petronas is
putting $5.5 billion on the table – far more than it has ever spent on
an acquisition before – to secure a large foothold in the British
Columbia shale gas scene.
It's yet another sign that things are getting serious in the global race for resources.
by The Daily Bell:
Proud Spain again humbles itself to the euro’s demands … The eurozone’s appetite for self harm knows no bounds. With one in four Spanish workers out of a job, output contracting by the day and Asturian miners marching through the capital, the Spanish prime minister, Mariano Rajoy, has determined to push through a further €65bn (£51bn) of austerity measures, as if deliberately set on a strategy of economic death by a thousand cuts. To say “determined” is possibly not the best way of putting it, for this is more like forced with a gun to his head; the latest austerity package is part of the conditionality attached to the eurozone loans for banking bailouts, thereby giving the lie to Mr Rajoy’s proud insistence that the Spanish bailout is in some way less of a subjugation than the others. – UK Telegraph
Dominant Social Theme: Spanish austerity boggles the mind.
Free-Market Analysis: UK Telegraph associate business editor Jeremy Warner has just written a very good appraisal of Spain’s misguided “austerity” policies being put in place by Prime Minister Mariano Rajoy.
And yet, as good as it is, we want to use it for purposes of this article to show how the mainstream media – even the best of it – simply doesn’t seem to have the vocabulary to describe what is really taking place.
Read More @ TheDailyBell.com
by Lawrence Williams, MineWeb.com
Manipulation
of all things financial, including gold, has been highlighted by the
revelations about the fixing of the LIBOR. Governments, central banks
and financial institutions all stand accused, but do they care?There has been much written about the latest financial manipulation by global bankers of LIBOR – The London InterBank Offered Rate which is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks. It is the primary benchmark, along with EURIBOR (The European InterBank Offered Rate) for short term interest rates around the world and is calculated for ten different currencies and 15 borrowing periods ranging from overnight to one year and are published daily after 11 am (London time) by Thomson Reuters. Many financial institutions, mortgage lenders and credit card agencies set their own rates relative to it. The global significance of the rate should not be underrated with estimates suggesting that at least $350 trillion in derivatives and other financial products are tied to the LIBOR, which makes the fine imposed on Barclays for its role in manipulating the rate just a tiny slap on the wrist. A fraction of a percent on this size of figure means potential gains across the financial sector of billions of dollars – so why is anyone surprised that the mechanism might be manipulated in this way?
Read More @ MineWeb.com
from Silver Vigilante:
As there are two fundamental ways of viewing history – the accidental view and the pre-determined or planned view -
so too there should also be two longterm ways of viewing markets, and,
for the purposes of this piece, the precious metals market.
Essentially, it is the same as the two views of history, so let’s take a
look at those.
In the accidental view of history, wars and revolutions are seen as random, sudden and oft surprising events. This view is expunged in public schools and in the coverage of current events by the media. This works to essentially leave current events unexplained mysteries, a cloak for the powers that be. Events transpire by way of happenchance and coincidence. The planned view of history focuses instead on the part of history that is determined by man’s planning. Wars, revolution and events are the result of planning.
Read More @ Silver Vigilante
As there are two fundamental ways of viewing history – the accidental view and the pre-determined or planned view -
so too there should also be two longterm ways of viewing markets, and,
for the purposes of this piece, the precious metals market.
Essentially, it is the same as the two views of history, so let’s take a
look at those.In the accidental view of history, wars and revolutions are seen as random, sudden and oft surprising events. This view is expunged in public schools and in the coverage of current events by the media. This works to essentially leave current events unexplained mysteries, a cloak for the powers that be. Events transpire by way of happenchance and coincidence. The planned view of history focuses instead on the part of history that is determined by man’s planning. Wars, revolution and events are the result of planning.
Read More @ Silver Vigilante
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We The Sheeplez... is intended to reflect
excellence in effort and content. Donations will help maintain this goal
and defray the operational costs. Paypal, a leading provider of secure
online money transfers, will handle the donations. Thank you for your
contribution.
from CapitalAccount:
Welcome to a very special episode of Capital Account, live from New York. We took the show on the road, taking Wall Street’s bull by the horns…and well, something else too!
JP Morgan’s Q2 earnings statement will be released tomorrow and it is expected to report a $5 billion CIO trading loss, a loss larger than the bank initially announced. Meanwhile, a press report revealed the New York Fed made major changes to its examiners at JP Morgan in mid-2011. The changes took place during a crucial time for policing risk-taking. We have plenty of evidence of the failure of regulators. However, it doesn’t appear anyone is losing the appetite for fraud, so what is the solution? We talk to Chris Whalen, senior managing director at Tangent Capital Partners.
And you could call it ‘man versus the machine.’ We will look at the impact of high frequency trading, computer algorithms on the stock market, and what dark pools have done to transparency. We have a very special New York Stock Exchange Word of the Day, with help from floor trader Stephen Guilfoyle.
And a special day is not complete without a special Loose Change, as Demetri Kofinas and Lauren Lyster banter by the Wall Street Bull about zombie theme parks in Detroit, and the possibility that regulators may run out of time in their attempts to prosecute crimes on wall street. Demetri asks if the SEC and CFTC could benefit by borrowing a pair or two from Wall Street.
Welcome to a very special episode of Capital Account, live from New York. We took the show on the road, taking Wall Street’s bull by the horns…and well, something else too!
JP Morgan’s Q2 earnings statement will be released tomorrow and it is expected to report a $5 billion CIO trading loss, a loss larger than the bank initially announced. Meanwhile, a press report revealed the New York Fed made major changes to its examiners at JP Morgan in mid-2011. The changes took place during a crucial time for policing risk-taking. We have plenty of evidence of the failure of regulators. However, it doesn’t appear anyone is losing the appetite for fraud, so what is the solution? We talk to Chris Whalen, senior managing director at Tangent Capital Partners.
And you could call it ‘man versus the machine.’ We will look at the impact of high frequency trading, computer algorithms on the stock market, and what dark pools have done to transparency. We have a very special New York Stock Exchange Word of the Day, with help from floor trader Stephen Guilfoyle.
And a special day is not complete without a special Loose Change, as Demetri Kofinas and Lauren Lyster banter by the Wall Street Bull about zombie theme parks in Detroit, and the possibility that regulators may run out of time in their attempts to prosecute crimes on wall street. Demetri asks if the SEC and CFTC could benefit by borrowing a pair or two from Wall Street.
from Silver Doctors:
The Telegraph’s Thomas Pascoe, who recently revealed that Britain’s
gold was dumped on the market by Gordon Brown in order to rescue Goldman
Sachs from a 2 tonne gold short position gone bad, follows Ned
Naylor-Leyland’s comments on CNBC this week that gold is manipulated
along with LIBOR, stating that gold manipulation may well be the next
big scandal to break.
Pascoe rightly asserts that manipulation of gold is a bigger scandal than the manipulation of LIBOR, and states (as we first suggested) that the LIBOR scandal will result in MSM attention of precious metals manipulation for the first time.
In the aftermath of the Libor scandal, the Bank of England complained that it had received no forewarning from the marketplace. Gold price manipulation may well be the next big scandal to break – if it does, this time nobody can say that they were not warned.
Read More @ SilverDoctors.com
The Telegraph’s Thomas Pascoe, who recently revealed that Britain’s
gold was dumped on the market by Gordon Brown in order to rescue Goldman
Sachs from a 2 tonne gold short position gone bad, follows Ned
Naylor-Leyland’s comments on CNBC this week that gold is manipulated
along with LIBOR, stating that gold manipulation may well be the next
big scandal to break.Pascoe rightly asserts that manipulation of gold is a bigger scandal than the manipulation of LIBOR, and states (as we first suggested) that the LIBOR scandal will result in MSM attention of precious metals manipulation for the first time.
In the aftermath of the Libor scandal, the Bank of England complained that it had received no forewarning from the marketplace. Gold price manipulation may well be the next big scandal to break – if it does, this time nobody can say that they were not warned.
Read More @ SilverDoctors.com
by Michael Snyder, Activist Post
The cracks in the ice are getting bigger. At this point it is really
hard to have much confidence in the global financial system at all.
They told us that MF Global was an isolated incident. Well, the horrific financial scandal over at PFGBest is essentially MF Global all over again. They told us that we would not see a huge wave of municipal bankruptcies in the United States. Well, three California cities have declared bankruptcy in less than a month. They told us that we could have faith in the integrity of the global financial system. Well, now we are finding out that global interest rates have been fixed by insiders for years.
They told us that Greece was an isolated problem and that none of the larger European nations would experience anything remotely similar. Well, what is happening in Spain right now looks like an instant replay of exactly what happened in Greece.
Read More @ Activist Post
The cracks in the ice are getting bigger. At this point it is really
hard to have much confidence in the global financial system at all.They told us that MF Global was an isolated incident. Well, the horrific financial scandal over at PFGBest is essentially MF Global all over again. They told us that we would not see a huge wave of municipal bankruptcies in the United States. Well, three California cities have declared bankruptcy in less than a month. They told us that we could have faith in the integrity of the global financial system. Well, now we are finding out that global interest rates have been fixed by insiders for years.
They told us that Greece was an isolated problem and that none of the larger European nations would experience anything remotely similar. Well, what is happening in Spain right now looks like an instant replay of exactly what happened in Greece.
Read More @ Activist Post
by Jean Chua, CNBC:
Merrill Lynch has added its voice to the chorus of gold bulls who have been predicting that bullion will hit $2000 an ounce.
Francisco Blanch, Head of Global Commodity & Multi-Asset Strategy Research at the investment bank, says he expects the Federal Reserve to initiate an asset-purchasing program of as much as $500 billion in the second half of the year, which will drive spot gold much higher by the end of the year.
“We think that $2,000 an ounce is sort of the right number,” Blanch said on CNBC Asia’s “Squawk Box” on Thursday. “We believe that ultimately the Fed will be forced to do quantitative easing. If it happens in September, as our economists expect, we will get a rally sooner in gold. If it happens after the election (in November), we will get the rally a little bit later; probably we will touch $2000 an ounce sometime next year.”
Read more @ CNBC.com
Merrill Lynch has added its voice to the chorus of gold bulls who have been predicting that bullion will hit $2000 an ounce.Francisco Blanch, Head of Global Commodity & Multi-Asset Strategy Research at the investment bank, says he expects the Federal Reserve to initiate an asset-purchasing program of as much as $500 billion in the second half of the year, which will drive spot gold much higher by the end of the year.
“We think that $2,000 an ounce is sort of the right number,” Blanch said on CNBC Asia’s “Squawk Box” on Thursday. “We believe that ultimately the Fed will be forced to do quantitative easing. If it happens in September, as our economists expect, we will get a rally sooner in gold. If it happens after the election (in November), we will get the rally a little bit later; probably we will touch $2000 an ounce sometime next year.”
Read more @ CNBC.com
by Bill Holter, MilesFranklin.com:
Do you remember back in 1996 when Alan Greenspan warned of “irrational
exuberance” and the stock market cratered? His warning lasted less than
24 hours and stocks were back to previous levels in less than a day or
two. It was at THAT very point in time that had the Federal Reserve
pulled the punchbowl, the bubbles to follow might not have occurred.
Not only did they not pull the punchbowl, it was during this time frame
that the Gold manipulation scheme shifted gears from “moral suasion” and
jawboning to physically and methodically suppressing the price. The
manipulation has been relentless except for one brief time while Paul
O’neill was Treasury secretary. I don’t believe that he had the stomach
for the manipulation and this was the reason for his very short tenure.
Fast forward to the present day, forget about stocks, Treasury bonds represent the definition of “irrational exuberance”. I know that I’ve written on this subject many times before but I believe that this IS the heart of what’s wrong today. 10 year Treasury yields have gone below 1.5%, think about what this really means for a moment. With your knowledge that inflation is running far above this number, what incentive is there to lend your money at these rates? What incentive is there for anyone, anywhere to “save” in Dollar accounts? …there is no incentive. Yet rates are continuing downward? How? Why? Because they have to, if they don’t the entire system will blow up in a very public fashion.
Read more @ MilesFranklin.com
Do you remember back in 1996 when Alan Greenspan warned of “irrational
exuberance” and the stock market cratered? His warning lasted less than
24 hours and stocks were back to previous levels in less than a day or
two. It was at THAT very point in time that had the Federal Reserve
pulled the punchbowl, the bubbles to follow might not have occurred.
Not only did they not pull the punchbowl, it was during this time frame
that the Gold manipulation scheme shifted gears from “moral suasion” and
jawboning to physically and methodically suppressing the price. The
manipulation has been relentless except for one brief time while Paul
O’neill was Treasury secretary. I don’t believe that he had the stomach
for the manipulation and this was the reason for his very short tenure.Fast forward to the present day, forget about stocks, Treasury bonds represent the definition of “irrational exuberance”. I know that I’ve written on this subject many times before but I believe that this IS the heart of what’s wrong today. 10 year Treasury yields have gone below 1.5%, think about what this really means for a moment. With your knowledge that inflation is running far above this number, what incentive is there to lend your money at these rates? What incentive is there for anyone, anywhere to “save” in Dollar accounts? …there is no incentive. Yet rates are continuing downward? How? Why? Because they have to, if they don’t the entire system will blow up in a very public fashion.
Read more @ MilesFranklin.com
from KingWorldNews:
With global stock markets trading in a sea of red, top Citi analyst Tom Fitzpatrick says stocks are poised to plunge another 15% to 20%. Fitzpatrick, a 28 year veteran and top analyst at Citibank, which has $1.3 trillion in assets, sent KWN some extremely powerful charts and notes. Below were his comments with three key charts:
Tom Fitzpatrick latest report:
“German 2-year yields still negative and U.S. long end yields moving lower tells us that there is a want and/or need for safety. We would still expect a test of the trend lows on U.S. 10 year yields at 1.43% and U.S. 30 year yields at 2.50% in the short term. The next support on Japanese 10 year yields is at 71-72 basis points. That does not provide a good backdrop for equities where we now see bearish outside days on all major U.S. Indices.”
Tom Fitzpatrick continues @ KingWorldNews.com
With global stock markets trading in a sea of red, top Citi analyst Tom Fitzpatrick says stocks are poised to plunge another 15% to 20%. Fitzpatrick, a 28 year veteran and top analyst at Citibank, which has $1.3 trillion in assets, sent KWN some extremely powerful charts and notes. Below were his comments with three key charts:
Tom Fitzpatrick latest report:
“German 2-year yields still negative and U.S. long end yields moving lower tells us that there is a want and/or need for safety. We would still expect a test of the trend lows on U.S. 10 year yields at 1.43% and U.S. 30 year yields at 2.50% in the short term. The next support on Japanese 10 year yields is at 71-72 basis points. That does not provide a good backdrop for equities where we now see bearish outside days on all major U.S. Indices.”
Tom Fitzpatrick continues @ KingWorldNews.com
By Chris Powell, GATA:
Dear Friend of GATA and Gold:
Commentary concurring that the gold market is or is probably manipulated by central banks for the same reasons the LIBOR interest rate was manipulated is turning up frequently now.
Jan Skoyles of The Real Asset Co. today notes, as GATA has been doing for a while, that the current manipulation just continues in secret the central bank manipulation that was conducted in the open through the London Gold Pool in the 1960s. Skoyles’ commentary is headlined “The London Gold Pool 2012″:
http://therealasset.co.uk/2012-london-gold-pool/
And MineWeb’s Lawrence Williams, in commentary headlined “LIBOR Scandal Brings Gold Price Manipulation Once More to the Fore,” writes today: “The idea of gold price manipulation, once the preserve of the much-derided Gold Anti-Trust Action Committee — derision is one of the principal tools in the armory of those wishing to diminish the views of organizations that try to expose wrongdoing — is now beginning to make an appearance in the mainstream press and among the most respected of financial commentators. Take this headline from the UK’s Daily Telegraph only yesterday: ‘The price of gold has been manipulated. This is more scandalous than LIBOR.’” Williams’ commentary is at MineWeb here:
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=154982&sn=Deta…
Read More @ GATA.org
Jim Sinclair’s Commentary
The USA has its own Greece and more to come.
Rising costs push California cities to fiscal brink
Throughout the state, local governments are slashing services to avoid bankruptcy. For some, it’s too late. By Phil Willon, Catherine Saillant and Abby Sewell, Los Angeles Times
July 12, 2012
Facing the same financial stressors that pushed San Bernardino toward bankruptcy, cities across California are slashing day-to-day services and taking other drastic actions to skirt a similar fiscal collapse.
For some, it may not be enough.
San Bernardino on Tuesday became the third California city to seek bankruptcy protection in the last month and, while no one expects the state to be consumed by municipal insolvencies, other cities teeter on the abyss.
"There are likely to be more in the future, but it’s hard to know, since a lot of struggling cities may manage to work things out,” said Michael Coleman, a fiscal policy advisor for the California League of Cities. "Some cities may not go into a bankruptcy, but they may dissolve. They may cease to exist.”
Once rare, turning to bankruptcy has become a painful but enticing option for cities whose labor costs and municipal debt far outpace anemic tax revenues. The Bay Area city of Vallejo began the current trend in May 2008, filing for Chapter 9 bankruptcy protection because, city leaders said, salaries and benefits for its public safety workers were eating up too much of the general fund.
Last month, Stockton became the largest city in the state to seek bankruptcy protection after it was unable to come to agreement with its employee unions and creditors on a plan to close a $26-million gap in its general fund. On July 2, the tiny resort town of Mammoth Lakes filed bankruptcy papers in part because it was saddled with a $43-million court judgment it couldn’t pay.
More…
Jim Sinclair’s Commentary
The Rig is Up. This week is very important. You never would have seen an article like this before from a generally accepted source.
The price of gold has been manipulated. This is more scandalous than Libor By Thomas Pascoe Economics Last updated: July 11th, 2012
The new media and the 24-hour news cycle have a great deal to answer for, not least encouraging a political class which would otherwise be happily engaged expensing duck houses into the belief that it should demonstrate perpetual action on our behalf – hence the endless stream of badly drafted legislation from the corridors of Whitehall.
It does, however, reveal things that would otherwise be ignored. The issue of manipulation in the gold market which I wrote about last week is a case in point. The ball of half-truths and downright lies which have surrounded the issue for a long time is beginning to unspool in an issue internet activists kept alive long before it was acknowledged by the mainstream media.
People ask why the issue is important at a time of naked market manipulation of the Libor rate. The answer is simple: the Libor manipulation scandal can be seen as the thin end of the wedge in terms of government market manipulation.
Although Libor manipulation affects the interest rates we pay on all number of credit products, gold market manipulation is more serious still.
The price of gold is traditionally a proxy for the value of money. A soaring bullion price is indicative of a lack of faith in fiat currency.
Our financial system is predicated on the notion that money stands as a proxy for the factors of production – capital, labour, land and enterprise.
More…
Dear Friend of GATA and Gold:
Commentary concurring that the gold market is or is probably manipulated by central banks for the same reasons the LIBOR interest rate was manipulated is turning up frequently now.
Jan Skoyles of The Real Asset Co. today notes, as GATA has been doing for a while, that the current manipulation just continues in secret the central bank manipulation that was conducted in the open through the London Gold Pool in the 1960s. Skoyles’ commentary is headlined “The London Gold Pool 2012″:
http://therealasset.co.uk/2012-london-gold-pool/
And MineWeb’s Lawrence Williams, in commentary headlined “LIBOR Scandal Brings Gold Price Manipulation Once More to the Fore,” writes today: “The idea of gold price manipulation, once the preserve of the much-derided Gold Anti-Trust Action Committee — derision is one of the principal tools in the armory of those wishing to diminish the views of organizations that try to expose wrongdoing — is now beginning to make an appearance in the mainstream press and among the most respected of financial commentators. Take this headline from the UK’s Daily Telegraph only yesterday: ‘The price of gold has been manipulated. This is more scandalous than LIBOR.’” Williams’ commentary is at MineWeb here:
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=154982&sn=Deta…
Read More @ GATA.org
Jim Sinclair’s Commentary
The USA has its own Greece and more to come.
Rising costs push California cities to fiscal brink
Throughout the state, local governments are slashing services to avoid bankruptcy. For some, it’s too late. By Phil Willon, Catherine Saillant and Abby Sewell, Los Angeles Times
July 12, 2012
Facing the same financial stressors that pushed San Bernardino toward bankruptcy, cities across California are slashing day-to-day services and taking other drastic actions to skirt a similar fiscal collapse.
For some, it may not be enough.
San Bernardino on Tuesday became the third California city to seek bankruptcy protection in the last month and, while no one expects the state to be consumed by municipal insolvencies, other cities teeter on the abyss.
"There are likely to be more in the future, but it’s hard to know, since a lot of struggling cities may manage to work things out,” said Michael Coleman, a fiscal policy advisor for the California League of Cities. "Some cities may not go into a bankruptcy, but they may dissolve. They may cease to exist.”
Once rare, turning to bankruptcy has become a painful but enticing option for cities whose labor costs and municipal debt far outpace anemic tax revenues. The Bay Area city of Vallejo began the current trend in May 2008, filing for Chapter 9 bankruptcy protection because, city leaders said, salaries and benefits for its public safety workers were eating up too much of the general fund.
Last month, Stockton became the largest city in the state to seek bankruptcy protection after it was unable to come to agreement with its employee unions and creditors on a plan to close a $26-million gap in its general fund. On July 2, the tiny resort town of Mammoth Lakes filed bankruptcy papers in part because it was saddled with a $43-million court judgment it couldn’t pay.
More…
Jim Sinclair’s Commentary
The Rig is Up. This week is very important. You never would have seen an article like this before from a generally accepted source.
The price of gold has been manipulated. This is more scandalous than Libor By Thomas Pascoe Economics Last updated: July 11th, 2012
The new media and the 24-hour news cycle have a great deal to answer for, not least encouraging a political class which would otherwise be happily engaged expensing duck houses into the belief that it should demonstrate perpetual action on our behalf – hence the endless stream of badly drafted legislation from the corridors of Whitehall.
It does, however, reveal things that would otherwise be ignored. The issue of manipulation in the gold market which I wrote about last week is a case in point. The ball of half-truths and downright lies which have surrounded the issue for a long time is beginning to unspool in an issue internet activists kept alive long before it was acknowledged by the mainstream media.
People ask why the issue is important at a time of naked market manipulation of the Libor rate. The answer is simple: the Libor manipulation scandal can be seen as the thin end of the wedge in terms of government market manipulation.
Although Libor manipulation affects the interest rates we pay on all number of credit products, gold market manipulation is more serious still.
The price of gold is traditionally a proxy for the value of money. A soaring bullion price is indicative of a lack of faith in fiat currency.
Our financial system is predicated on the notion that money stands as a proxy for the factors of production – capital, labour, land and enterprise.
More…
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