WASHINGTON (MarketWatch) -- U.S. consumer sentiment dipped in early March, according to media reports on Friday of the Reuters/University of Michigan index. Amid signs that the labor market is approaching a trough but remains frail, the consumer sentiment index declined to 72.5 in March from 73.6 in February. Economists surveyed by MarketWatch had been expecting the sentiment index to hit 74 in March.
Among other things, excessive monetary inflation means that the US dollar cannot function as a store of value. Mounting evidence points to systemic instability, a lower US dollar and ultimately to a hyperinflationary outcome:
Sixteen months after they were seized to prevent their collapse, the companies remain wards of the state, running a tab that has now exceeded $125 billion in what has become the single costliest component of the federal bailout for the financial system.
Financial Chaos – probably in many nations in the next five years. Increasingly often, people ask my opinion on what is likely to happen financially. I am now thinking that the dangers are more numerous and larger than ever before in my lifetime. Quite likely, in the early months of 2005, the peak of prosperity is behind us.
In the past century, protection could be obtained by keeping your net worth in cash or government bonds. Now, the surplus capacities are so great that most currencies and bonds are likely to continue losing their purchasing power.
WASHINGTON — Regulators on Thursday shut down LibertyPointe Bank in New York City, boosting to 27 the number of bank failures in the U.S. so far this year following the 140 brought down in 2009 by mounting loan defaults and the recession.
The US government economists and politicians aren't totally naïve; they know what they'll have to do to pull off a profit for the taxpayer, and they'll be willing to do it at any cost. Each recession the solution is the same: inflate yourself out of the problem. However, this time the problem is much bigger, and the solution is just as big. Protect yourself, your assets, and what you've worked so hard for. With inflation being assured, you'll want precious metals.
Gordon Gekko via ZeroHedge) Evidence seems to be mounting that we are headed towards some sort of implosion in the paper Gold market, and perhaps the currency/bond markets in general. Let’s take a look:
“Non-FDIC Insured Metals Select Changes” -
Section 6.3.7. General Terms: We have added language clarifying our right to close your account. We may close your Metals Select Account at anytime upon reasonable notice to you. If we believe that it is necessary to close your account immediately in order to limit losses by you or us[GG: We really don’t give a s**t about you; it’s us that we care about], we may close your account prior to providing notice to you. Notice from us to one of you is notice to all of you [GG: the nerve of these people!]. If we close your account, we reserve the right to convert your Precious Metals to U.S. dollars and tender the balance to you by mail [GG: I am willing to bet my entire Gold stash that when you receive these "converted" dollars, they will be nowhere near the market price of physical. What did you think that whole "limit losses" thing meant?] .
While the world's largest economy - the United States - struggles to stem the bleeding of jobs in its ailingeconomy, its biggest creditor - China - has been quietly increasing its gold reserves in an apparent effort to hedge the weakening value of the US dollar and stabilize the value of its massive foreign exchange (forex) reserves.
Reality: On a net net basis (while surely *some* Americans are paying off some debt) almost the entire total of "paid down" debt was simply banks finally writing off unpaid debts as never to be collected.
The global economy is entering a next "supercycle" phase that will generate inflation necessary for recovery, a strategist and protege of noted economist Nouriel Roubini told CNBC.
Governments may have to raise taxes and slash spending to cope with swelling deficits after borrowing unprecedented amounts to stave off the global financial crisis, said El-Erian, 51, who shares his job title with Bill Gross. A failure to carry out fiscal measures in time would raise the possibility of governments seeking to eliminate excessive debt through inflation or default, he said.
The gold price has an eerie sense of stabilty about it, a false stability in my view. Absolutely nothing has changed in the global pursuit of ruinous monetary inflation, as all Western currencies are fatally damaged. The monetary growth is at full throttle. Estimates for USGovt deficits are periodically being revised upward.
NEW YORK -(Dow Jones)- Commercial real estate owners are walking away from properties that have become untenable as investments, just as homeowners have walked away from houses they can no longer afford to pay off or sell.
The BLS has released the January state unemployment update: the unemployment rate increased in 30 states, while somehow nonfarm payrolls increased in 31 states.
The excess of spending over revenue increased to $221 billion last month, compared with a shortfall of $194 billion in February 2009, according to Treasury Department figures released today in Washington. The figures show the deficit this year will likely surpass the record $1.4 trillion in the fiscal year that ended in September.
In this interview JIm discusses the IMF gold sales today and in the 70’s, China’s moves in the gold market, Greece and other EU problems and the accompanying QE, attacks on currencies and countries and the eventual end game, where he sees the US Dollar headed, suspicions of the Greek bond offering, mining company’s strategies and their cash position and much more.
(Reuters) - With economic policy stimuli already at full tilt, no government wants an overvalued exchange rate to slay recovery, and the rival "soft currency" needs are producing some elaborate rhetorical jousting.
Poor economic data in the US coupled with Europe's debt crisis are contributing to an increase of the risk of the US economy going through a double-dip recession, Nouriel Roubini, who predicted the 2007 financial crisis, wrote in a research paper.
A big “yeah right” to this story. China is screwed…yeah the gold market is too small, that’s because you can’t just print more and guess what they have $1.4 trillion in foreign currency reserves…you know fiat money…and only 1.8% of that in gold versus 10% that the rest of the world has…they can buy it here at these prices or later at possibly much higher prices…either way if they want to be a modern economic force and not watch their massive fiat foreign currency reserves be devalued away…they need it and they need it now….
The euro is under attack like never before, as the promises on which it was based turn out to be lies. Hedge funds are speculating against Greek debt, while euro-zone politicians work behind the scenes to cobble together rescue packages. But fundamental flaws in the monetary union need to be fixed if Europe's common currency is to survive.
Voters rejected the bill because “ordinary people, farmers and fishermen, taxpayers, doctors, nurses, teachers, are being asked to shoulder through their taxes a burden that was created by irresponsible greedy bankers,”
U.S. credit default swaps currently trade in euros. After all, if the U.S. defaults, who will want payment in devalued U.S. dollars? The euro recently weakened relative to the dollar, and market participants are calling for contracts that require payment in gold. If they get their way, speculators on the winning side of a price move will demand collateral paid in gold. The market can create an unlimited number of these contracts very rapidly. The U.S. wouldn't have to ever default to trigger a major disruption in the gold market. Spreads (or prices) on the credit default swaps could simply move based on "news," and demand for gold would soar.
As we reported last week, the cash levels in the mutual funds are near record lows. Stocks do not typically rally unless there is large scale buying. All well and good, but until selling volumes show up, the market can continue to drift higher, especially with the support of the monetary magicians and the Wall Street wi
Now, Harvard's Niall Ferguson, one of the world's leading financial historians, echoes Diamond's warning: "Imperial collapse may come much more suddenly than many historians imagine. A combination of fiscal deficits and military overstretch suggests that the United States may be the next empire on the precipice." Yes, America is on the edge.
Lost in the headlines over the dollar's resurgence in 2010 is the fact gold is still rising in most worldwide currencies. It is also still faring well in dollar terms. Gold is trading at around $1,120 per ounce, up about $60 in the last month. Frank Holmes, CEO and CIO of U.S. Global Investors, a long time gold bull sees no reason for this trend to end.
Dumping the so-called dirt bonds at a discount was a better bet, the Boston-based Metzold said, than taking over 218 empty acres (88 hectares) from the project’s builder and waiting for a real-estaterebound that may not come until the early 2030s, according to a Moody’sEconomy.com forecast.
NEW YORK (CNNMoney.com) -- The percentage of American workers with virtually no retirement savings grew for the third straight year, according to a survey released Tuesday.
“I have been saying for over five years: by the end of this year, we will be at $2 000 and, when the game is over for gold, it will be over $5 000 an ounce,” he said in an interview on the sidelines of the Prospectors and Developers Association of Canada's annual convention. McEwen is the former CEO of Goldcorp, the second-biggest gold miner by market value.
China could end its near two-year currency peg on the dollar by as soon as next month, according to respected economist Professor Nouriel Roubini, in a prediction that could have major implications for global trade markets.
Embry, an industry expert in precious metals, has researched the gold sector for over 30 years. Read about why he thinks gold could gain another 30% this year as a greater proportion of the public realizes the degree of difficulty that sovereign debt is in.
If GATA is not bluffing and indeed has evidence of massively uncoverable physical positions, and should this evidence be made public, the repercussions for the price of gold will be unprecedented.
Joseph Stiglitz explained to Maria Bartiromo why he thinks the Fed is desperately in need of reform. Basically, it comes down to the influence the banks have in selecting the Fed chairman. How can we expect effective regulation or fair financial rescues from men who owe their power to the heads of the biggest banks?
And it actually gets worse: as we have pointed out, states are now running on fiscal fumes, as record unemployment insurance claims bleed the vast majority of state not only dry, but well in credit to the Federal government. "At the same time, the recession has driven up the number of people needing various state services.
Over 140 U.S. lenders folded in 2009 alone. To remedy the financial void left in their wake, the Federal Deposit Insurance Corporation wants public pension funds, which safeguard the retirement funds of millions, to buy in part or in whole the banks that couldn't manage to keep their depositors' funds.
It has long been assumed that China is surreptitiously building up its gold reserves through buying local production. Russia is another major gold miner where the Central bank has been purchasing gold from another state entity, Gokhran, which is the marketing arm and central repository for the country's mined gold production. Now it has been reported by Bloomberg that the Venezuelan Central Bank director, Jose Khan, has said that country will boost its gold reserves through purchasing more than half the gold produced from its rapidly growing domestic gold mining industry.
Since 2000, the U.S. has lost 5.5 million manufacturing jobs, with 2.1 million of those jobs being lost in the last two years alone. Since 2001, over 42,400 factories have closed in the U.S., and another 90,000 are considered at severe risk of closing. The last time so few were employed in manufacturing was in 1941, before World War II spending pulled that sector out of its Great Depression slump.
“This whole thing is a mess waiting to happen across the country,” said Geoffrey Miller, a professor of securities law at New York University and director of the Center for the Study of Central Banks and Financial Institutions.
In this interview JIm discusses the loss of confidence in paper, the 24 hours the Dollar was in doubt, gold, negative interest rates, the liquidation for the Hunts, what the Hunts believed and what their mistake was, another individual/entity with a large position in silver, the final pillar in the gold bull market, attacks on currencies and much more.
Expansionary monetary policies, exploding national debt and global currency devaluations, are creating a very favorable scenario for the price of gold.
As you know, Russia, India, China and some of the BRIC-like countries will continue to push hard for a gold and silver content in the new formulation of the SDR this year. The US and UK are vehemently opposed.
PARIS - Speculators beware: The euro zone’s biggest powers will back Greece through its debt crisis, which has jeopardized all 16 nations using the common currency, French President Nicolas Sarkozy said yesterday.
While administration leaders tout the positive effects of the stimulus, the big guy, Paul Volcker is realistic about the economy, and recognizes that it can't stand on its own two feet.
The US dollar is about to be replaced by the Amero at a rate of two dollars to one Amero, according to a high level financial source in Switzerland. The Amero will replace the US and Canadian dollars and the Mexican peso, he says. It will be backed by Mexican and Canadian gold, the source adds. The decision was made at a high level within the Western secret government, he says. The introduction of the Amero will be followed by a dismantling of the Federal Reserve Board, he says. Once the announcement is made, people will have exactly 30 days to convert their dollars to Ameros before the dollars become worthless. The Western government does not want to cede control of its financial system to China so a decision was made to go with the gold-backed Amero, he says. Of course many holders of dollars may decide to opt away from the Amero and trade their dollars for other currencies, notably the Chinese yuan and the Hong Kong dollar. We will seek to confirm this news from other sources and will provide updates if necessary.
This year, more Americans and businesses may be asking: Where's my tax refund? That's because cash-strapped states such as North Carolina, Alabama and Hawaii have been forced to slow down issuing income tax refunds to individuals and businesses because of a lack of funds in their budget.
There is no motivation to hold dollars rather than gold, while there might be in other currencies where governments have begun to raise rates. “The real interest rate is what you get paid to hold a currency, and right now the real rate on the dollar is extremely low, so you are not getting paid to hold dollars. Accordingly, as the real rate goes down in a currency, the price of gold in that currency should rise because there is greater value in holding the real asset.”
The price of the precious metal rose 277 per cent during the past decade, with investors particularly attracted to gold during the recession as they sought a safe haven for their money.
President Obama's proposed budget would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday. Proposed tax cuts for the middle class account for nearly a third of that shortfall.
WASHINGTON – A new congressional report released Friday says the United States' long-term fiscal woes are even worse than predicted byPresident Barack Obama's grim budget submission last month. The nonpartisan Congressional Budget Office predicts that Obama's budget plans would generate deficits over the upcoming decade that would total $9.8 trillion. That's $1.2 trillion more than predicted by the administration.
The head of China’s central bank has given the strongest signal yet that the country will move away from pegging its currency to the dollar, but he said any changes would be gradual.
The Canadian federal government announced in its budget that paper Canadian currency will become plastic and have new security features next year. Its $2 and $1 coins will also receive new changes.
Silver has the potential to break its previous highs of around $50 (R375) within the next 3 years, and at current levels it looks totally undervalued, Lakeshore Trading precious metals analyst David Levenstein said on Thursday. "For this reason, I suggest every single investor should own some silver," said Levenstein.
Taking the total number of bank failures to 26, regulators closed down banks in Maryland, Illinois, Florida and Utah, a development which has put increased pressure on the Federal Deposit InsuranceCorp. to rapidly try and dispose off the mounting toxic assets.
Many analysts expect gold prices to correct in the short term. "I think gold starting to march to its own drummer now," says David Morgan, founder of Silver-Investor.com.
Jeffrey Nichols, senior economic adviser to Rosland Capital, talks with Bloomberg's Pimm Fox about the outlook for gold. Nichols also discusses his investment strategy for gold.
Citigroup Inc., the bank minority- owned by the U.S. government, is boosting its commodities business over the next three years with plans to increase staff about 40 percent.
The official national unemployment rate remained unchanged at 9.7 percent in February, the Bureau of Labor Statistics said moments ago. Forecasters predicted the rate would rise from 9.7 in January to 9.8 percent in February.
March 5 (Bloomberg) -- Striking Greek workers shut down transport and tried to storm parliament as lawmakers passed 4.8 billion euros ($6.5 billion) in budget cuts, including wage reductions, needed to trim the region’s biggest budget deficit. Police with riot shields fired tear gas as demonstrators wearing biker helmets and gas masks pelted them with stones outside parliament in Athens where lawmakers approved the measures.
March 4 (Bloomberg) -- Gold priced in euros will continue setting records, Fortis Nederland said, citing trading patterns. Gold denominated in the 16-nation currency reached an all- time high of 836.98 euros an ounce on March 2
The U.S. is investing billions of dollars in drones, the unmanned aircraft that are key to the modern military. With names like Sky Warrior and Vulture, these radar-proof spy planes can stealthily track -- and secretly kill -- terrorist targets.
Joseph Stiglitz - former head economist at the International Monetary Fund (IMF) and a nobel-prize winner - said yesterday that the very structure of the Federal Reserve system is so fraught with conflicts that it is "corrupt" and undermines democracy.
WASHINGTON (AFP) – The House of Representatives passed Thursday a 15-billion-dollar bill to help reduce the stubbornly high USunemployment rate, which has held for several months at nearly 10 percent.
WASHINGTON -- The number of buyers who agreed to purchase previously occupied homes fell sharply in January, a sign that demand for housing is sinking this winter, especially after stormy weather hit much of the country.
Bill Gross, co-founder of PIMCO, the world’s largest bond fund and an expert in matters of debt, wrote in 2006, the way a reserve currency nation [such as the US]gets out from under the burden of excessive liabilities is to inflate, devalue, and tax. Inflation destroys the value/cost of liabilities by eroding the value of money. Debts are paid back with inflated currencies, a process which benefits the debtor and injures the creditor. This is why reserve currency nations usually inflate their way out of debt by printing what they owe.
The economic recovery effort has not slowed consumer bankruptcy filings. They surged 14% in February compared with a year earlier, according to the American Bankruptcy Institute. Business bankruptcy filings are rising, too. In February, there were 6,557 business filings, compared with 6,390 a year earlier, according to Automated Access to Court Electronic Records.
“Three top US economists urge the Fed to generate higher inflation for years with a view to reduce the UNEMPLOYMENT RATE.” The reason is because: HIGH INFLATION IS PREFERRED OVER HIGH UNEMPLOYMENT.
The bleak warning of social and financial collapse was given in Tokyo, Japan last week at a meetup of 700 of the world’s most powerful investors. “The next war will be a dirty war,” he told fund managers: “What are you going to do when your mobile phone gets shut down or the internet stops working or the city water supplies get poisoned?”
The first and simplest answer is that there is an increasing sense that the alternate store of global wealth, the euro, is likely to depreciate substantially
March 3 (Bloomberg) -- China’s hidden borrowing may push government debt to 96 percent of gross domestic product next year, increasing the risk of a financial crisis in the world’s third-biggest economy, Professor Victor Shih said. “The worst case is a pretty large-scale financial crisis around 2012,”
It is becoming increasingly likely Greece may ask the International Monetary Fund for a bail out now that Germany is making it all to clear it won't be providing aide.And since the United States is the largest contributor to the IMF, US taxpayers will find themselves footing the bill for the Greek debt crisis.
FLORIDA, USA (Commodity Online):A new breed of credit cards backed by gold bullion is soon to become a reality in USA. Sweeping changes in credit card industry is set benefit not only consumers, but gold bugs too, who'll be able for first time to charge purchases against 'liquid gold.'
Greece getting bailed out means QE (printing of money) to infinity. That means gold would rise from here to $1650 by January of 2011, or as Martin Armstrong said, by June of 2011. The dollar would fall. Equities and commodities would rise.
"The accounts of our governments are a scandal. They're complete scandalous and the U.S. is not an exception. It's just one of many governments whose accounts that tell us nothing about the true state of its finances and the long-term obligations association with that. We would never allow that with any private business."
LONDON, March 2 (Reuters) - Gold priced in both euros and sterling hit record highs in Europe on Tuesday as the precious metal benefited from volatility in the currency markets, with spot gold prices XAU= also extending earlier gains.
To meet the Obama administration’s targets for cutting greenhouse gas emissions, some researchers say, Americans may have to experience a sobering reality: gas at $7 a gallon.
NEW YORK (CNNMoney.com) -- America's total debt load is on pace to top $13 trillion this year, and $22 trillion by 2020 -- and that's just the debt we're counting. What's not being counted: potential debt bombs that don't get factored into most budget analysis.
German TV station ProSieben finds what appears to be some evocative proof of gold counterfeiting, in the form of tungsten gold substitutes coming to the W.C.Heraeus foundry, which is the world's largest privately-owned precious metals refiner and fabricator, located in Hanau, Germany. The foundry has isolated at least one 500-gram tungsten bar due for melting, originating from a (so far) unnamed bank, which as the head of the foundry stated made the unpleasant discovery that "not all the glitters is gold."
No, you are not reading that chart wrong. Gold just surged to near two month highs, hitting $1130/oz, or $12 higher, even as the dollar is green for the day. The fiat currency inferno is picking up, as traders refuse to keep their money in anything but gold or dollars - proof of tungsten gold counterfeiting is not helping the gold shorts. From the 2010 lows, the currency devaluation "safety trade" has been Gold and the USD, in a ratio of 5-1! Intraday chart...
Following up on the earlier post in which German TV station ProSieben has disclosed proof of the existence of tungsten "gold" bars in circulation within the bank community, we share with you the following highly informative presentation by Adrian Douglas of Market Force Analysis titled "LBMA OTC Market - "Alchemists" Turn Paper Into Gold." For anyone who has even a passing interest into what, as the author characterizes, could possibly be "the next Madoff scandal, except multiplied by 100", we recommend reading this paper.
(Bloomberg) -- Fannie Mae will seek $15.3 billion in U.S. aid, bringing the total owed under a government lifeline to $76.2 billion, after its 10th consecutive quarterly loss.
LONDON, March 2 (Reuters) - Gold priced in both euros and sterling hit record highs in Europe on Tuesday as the precious metal benefited from volatility in the currency markets, with spot gold prices XAU= also extending earlier gains.
To meet the Obama administration’s targets for cutting greenhouse gas emissions, some researchers say, Americans may have to experience a sobering reality: gas at $7 a gallon.
As of Tuesday, March 2, a big chunk of the U.S. Department of Transportation will be shut down temporarily because of a lack of funding. Just how long it lasts will depend on Congress. The stunning news came Friday after the Senate adjourned without passing legislation to extend surface transportation programs that were set to expire Sunday, Feb. 28. As a result, 4,000 DOT employees will be at home without pay starting Tuesday, leaving only a skeleton crew to deal with matters of immediate safety. Affected agencies include the Federal Highway Administration, Federal Motor Carrier Safety Administration, Federal Transit Authority and National Highway Traffic Safety Administration.
If you think that the upcoming energy shortage is going to be bad, it will pale in comparison to the nextwater crisis. Investment in fresh water infrastructure is undeniably going to be a recurring long term investment theme. One theory about the endless wars in the Middle East since 1918 is that they have really been over water rights. Although Earth is often referred to as the water planet, only 2.5% is fresh, and three quarters of that is locked up in ice at the North and South poles.
IsraelNN.com) Following a government decision to begin distribution of gas masks to the populace, the Israel Postal Company began the distribution of gas masks in the city of Or Yehuda. The distribution will continue over a period of six days and will thereafter be extended to the Kiryat Ono and surrounding area.
If core sovereigns such as the U.S., Germany, U.K., and Japan “absorb” more and more credit risk, then the credit spreads and yields of these sovereigns should look more and more like the markets that they guarantee. The Kings, in other words, in the process of increasingly shedding their clothes, begin to look more and more like their subjects. Kings and serfs begin to share the same castle.
The quantity of dollars in circulation is being underreported by relying upon the traditional and now outdateddefinitions used to calculate M1 and M2. These ‘Ms’ are calculated and reported by the Federal Reserve based on the following guidelines that identify the several different forms of dollar currency used in commerce:
March 1 (Bloomberg) -- George Soros is helping drive up gold prices by doubling his bet in a market even he considers a “bubble” as Goldman Sachs Group Inc., Barclays Capital and HSBC Holdings Plc predict more gains before it bursts.
NEW YORK (AP) -- Regulators shut down banks in Nevada and Washington on Friday, marking the 21st and 22nd failures this year of federally insured banks.
There have been multiple reports of some kind of deal worth $30-$34 billion, and yet check out what Germany's Angela Merkel told German TV, according to the Sydney Morning Herald: ...the German chancellor denied any such plan was in the works, saying "there is absolutely no question of it".
Dominique Strauss-Kahn, the head of the International Monetary Fund, suggested Friday the organization might one day be called on to provide countries with a global reserve currency that would serve as an alternative to the U.S. dollar.
Ben Bernanke can talk tough, but the economy would sputter if the cash stopped flowing. Also: The inflation or stagflation that's probably in our future.
Summary: - Imperial collapse may come much more suddenly than many historians imagine. A combination of fiscal deficits and military overstretch suggests that the United States may be the next empire on the precipice.
In this Part II interview Mr. Dines covers the Federal Reserve, gold, inflation, hyperinflation, repeated currency crises, violence and revolution, Depression and survival of the fittest, every gambler’s secret desire to lose, mass psychology, must own insurance, countervailing forces, will the people gain a sound currency and freedom, how will this all end and what is the hope for people and much more.
SocGen's Dylan Grice provides a gripping account of Germany's hyperinflationary episode, in which he charts the extended parallels between not just the precursor economy that lead to a 16,579,999% inflation in 1923 Weimar Germany, and modern day developed (and highly leveraged) countries, but between Germany's then central banker Rudolf von Havenstein, and the Greenspan-Bernanke duo. And while we know how "der Geld Marschall's" Weimar experiment ended, the future before the U.S., as a result of the Maestro's (both Senior and Junior) almost identical policy response is still open-ended.
Operating a website requires monitoring to make sure there are no problems but doing so can uncover very interesting nuggets of information. For example, on 24 February 2010 at 11:15 EST in the evening someone at Goldman Sachs Company in the main NYC office found RunToGold through Google by searching for the phrase ‘buying silver‘.
When investors unwinding those dollar-carry trades and are left holding the greenback, they will question why they're holding the currency when the U.S. economy is "in shambles," he said. "At that stage, investors will massively buy gold and silver." There are "definitely changes brewing worldwide" and "gold is in transition right now
Feb. 27 (Bloomberg) -- An earthquake registering 8.8 magnitude struck Chile early this morning, killing at least 147 people, severing the country’s main highway, destroying bridges and apartment buildings and knocking out electricity.
“We don’t really foresee the European Union coming apart.” California, on the other hand, could pose a problem. The state is huge. “There could be contagion” if the state were to have problems servicing its debts, Dimon warned.
GREECE has touched Germany's rawest nerve by accusing the EU powerhouse of not fully compensating it for gold stolen by the Nazis during the Second World War.
The number of Americans filing first-time claims for jobless benefits rose to the highest level in three months last week, indicating companies are waiting to see sustained sales before adding to payrolls. An unemployment rate that’s forecast to average 9.8 percent this year may restrain gains in consumer spending, which accounts for about 70 percent of the economy.
WASHINGTON -- Sales of previously occupied homes took a large drop for the second straight month in January, falling to the lowest level since summer. It was another sign the housing market's recovery is faltering.
For all those who expect to see a strong dollar result in lower gold prices: our condolences. Gold is now as much a flight-to-safety target, as the the ra(p/b)idly devaluable dollar (and all other fiat currencies), as has been repeatedly observed on Zero Hedge. The chart below demonstrates that over the past three weeks, not only has dollar strength resulted in gold strength, it has resulted in gold strength at a 6X multiple.
It is one thing when credit agencies downgrade the sovereign debt of modest-sized nations such as Greece or Spain. It is quite another when the world’s largest economies like Japan or the UK go into the crosshairs of analysts.
With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.
The US is heading for a debt-driven “financial meltdown” within five to seven years, according to Judd Gregg, the outgoing Republican senator for New Hampshire.
He believes Goldman is entering the transaction for two reasons: (1) it believes it will make an acceptable return on its investment, both in the contexts of both an annual return and subsequent capital appreciation (2) it believes in the future of world resources is economically important going forward. On the surface, this business seems too unsophisticated for the bright minds at Goldman. Metal producers, traders and end-users all use the LME. Apparently, having control over the cost of carry in the metals trade is part of God’s, err I mean, Goldman’s plan.
The dollar rally will soon end and speculators should begin to take short positions. All the good news for the dollar is out. For the moment it is the best of a bad lot. Then only real money is gold and silver. In the future more and more people worldwide will realize that and eventually there will be a stampede into the two precious metals. America will produce a debt to GDP ratio or 95% to 100% this year.
Five days ago a great white hope appeared for the great bankrupt Golden State (Baa1/A-), in the form of $2 billion in GO bonds, which were supposed to be promptly syndicated via underwriters JPMorgan and Morgan Stanley. This would have been the first bond sale for California since November: a critical milestone as the state creeps ever closer to a full-on default.
Paul Mylchreest submits the following exhaustive Thunder Road report (from October 15, 2009), which is a follow-up to the previously posted Redburn Partners report. A detailed analysis on some of the less discussed aspects of the gold market, this is another must read for all who have even an incipient interest in the gold market.
So as far as gold goes, my money's on Soros getting his timing right, rather than the IMF. It'll be a rocky ride, but I don't think there's too much to worry about.
Regardless of their expensive annual fees, frequent tracking errors, and the simple fact that you'll never be able to actually touch the gold or silver your ETF claims to hold, there are several more reasons ETFs should never be used by precious metals investors. An important rule change by COMEX, the American commodity exchange, allows ETF substitutes for precious metal delivery. ETF investors are clearly at a disadvantage, although the chance of manipulation is only a bullish signal for physical investors. COMEX rules have allowed artificial inflation of the amount of silver futures available prices, and it is sure that physical metals will only gain in value as this comes to light. There is simply no better investment than physical metals both for the short and long term.
Marc Faber, editor of the Gloom, Boom and Doom Report, sits down with Ben McLannahan, Asia Lex Writer of the Financial Times, to discuss a variety of pertinent economic and investment topics. In short, he suggests investors should make 2010 the year of “capital preservation”.
Consequently, one is either on-board...or left at the station with a bag full of fiat paper, wringing his hands and screaming his lungs out: "I KNEW I SHOULD HAVE BOUGHT GOLD!" However you want to say it, never leave home without some investment in precious metals. Your personal real wealth depends on it. Unfortunately, by yearend some hapless investors who only listen to CNBC will be crying in their beer, mumbling, "I cudda, I wudda, I shudda..."
WASHINGTON (MarketWatch) - The U.S. economic recovery is still not yet on a sustainable path, and near-zero interest rates are still needed, Federal Reserve Board Chairman Ben Bernanke told lawmakers on Wednesday.
Feb. 24 (Bloomberg Multimedia) -- Record U.S. debt may hamper the ability of spending and interest-rate policies to soften the extremes of the business cycle, an analysis shows.
With high unemployment appearing to be a permanent part of the economic picture, the long-term poor are turning to increasingly desperate measures to survive. Many are selling food stamps for cash. Over 6 million people today report food stamps as their only source of income.
The Senate easily passed a $15 billion jobs bill on Wednesday morning amid hope that the measure could provide a blueprint for other items onPresident Obama's agenda.
“You’re not going to go a decade without having a bump in the business cycle,” Rogoff, former chief economist at the International Monetary Fund, said in an interview in Tokyo yesterday.
WASHINGTON -- Sales of new homes plunged to a record low in January, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.
“The Obama administration has been obscuring the true cost of the GSEs to taxpayers by not including them on the federal budget,” said Bachus of Alabama. “When you hide your debts, it just leads to a bigger day of financial reckoning down the road. Greece is facing that as we speak. The United States is certainly facing that.”
Evidence is mounting that Chinese sales of US Treasury bonds over recent months are intended as a warning shot to Washington over escalating political disputes rather than being part of a routine portfolio shift as thought at first.
European banks need to roll over €1 trillion (£877bn) of debt over the next two years at a much higher cost and in direct competition with hungry sovereign states, according to a report by Morgan Stanley.
Neither the US financial press nor the US bank leaders take the sovereign debt crisis seriously. Even the USCongress seems totally unaware of the growing global intolerance for government debt out of control. The issue is rollover of short-term debt, size of the overall debt burden, borrowing costs to sustain the debt, annual deficits that accumulate further debt, and size of debt versus economic size. TheUnited States projects a certain degree of arrogance that foreigner must continue to finance the USGovt debt at a time when the evidence gathers on loud suspicious activity in the USTreasury auctions. The US travels down a road to debt default also, as the mask of corrupt USTBond management is removed. The plight of Europe will strike the United States and United Kingdom, as contagion is ripe. The claim of containment incites laughter. The Euro currency has finally begun to stabilize, which will make all the more apparent a global bull market in the Gold price. The Gold price in almost every major currency is rising. In the US$ it will be last.
Feb. 23 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said the financial crisis was “by far” the worst in history and called the recovery from the global recession “extremely unbalanced.”
NEW YORK/WASHINGTON (Reuters) - The only time the U.S. dollar ever took a serious shellacking in the marketplace, the wounds were almost entirely self-inflicted. Facing mounting inflation and the escalating cost of the Vietnam War, President Richard Nixon, on Aug. 15, 1971, took the United States off the gold standard, which had been in place since 1944 and required that the Federal Reserve back all dollars in circulation with gold. The move amounted to a made-in-America double-digit devaluation, shocking the country's foreign creditors.
This week Max Keiser and co-host Stacy Herbert report on the scandals of George Soros and the IMF shaking out the gold market; US bank lending falling at the fastest rate in recorded history; and the trickle up unemployment pyramid. Keiser also speaks to The Market Ticker's Karl Denninger about CDOs, synthetic CDOs and hiding Greek debt.
That lack of disclosure shows how the government has obstructed a proper accounting of what went wrong in the financial crisis, author and former investment banker William Cohan says. “This secrecy is one more example of how the whole bailout has been done in such a slithering manner,” says Cohan, who wrote “House of Cards” (Doubleday, 2009), about the unraveling of Bear Stearns Cos. “There’s been no accountability.”
Feb. 23 (Bloomberg) -- Confidence among U.S. consumers fell in February to the lowest level since April 2009 as the outlook for jobs diminished, a sign spending may be slow to gain traction as the economy recovers.
Ferguson, who has become one of the leading intellectuals of the deficit hawk camp, theorizes that empire's don't decline in the slow, cyclical process long assumed. Instead it is dramatic events that push them over the edge to oblivion.
Feb. 23 (Bloomberg) -- Ballooning public debt is likely to force several countries to default and the U.S. to slash spending, according to Harvard University ProfessorKenneth Rogoff, who in 2008 predicted the failure of big U.S. banks. Following banking crises, “we usually see a bunch of sovereign defaults, say in a few years. I predict we will again,” Rogoff, a former chief economist at the International Monetary Fund, said at a forum in Tokyo
The current crisis is not merely a failure of the US housing bubble, that is but a symptom of a much wider and far-reaching problem. The nations of the world are mired in exorbitant debt loads, as the sovereign debt crisis spreads across the globe, entire economies will crumble, and currencies will collapse while the banks consolidate and grow. The result will be to properly implement and construct the apparatus of a global government structure. A central facet of this is the formation of a global central bank and a global currency. The people of the world have been lulled into a false sense of security and complacency, living under the illusion of an economic recovery. The fact remains: it is only an illusion, and eventually, it will come tumbling down. The people have been conned into handing their governments over to the banks, and the banks have been looting and pillaging the treasuries and wealth of nations, and all the while, and making the people pay for it.
The yuan strengthened the most against the greenback yesterday on speculation that the government may allow more flexibility in the currency exchange rate, even as analysts cautioned on risks from increased "hot money" flows.
Charlie Munger, Warren Buffett’s longtime business partner in Berkshire Hathaway, warns in a new column that the U.S. economic empire is crumbling before our eyes, thanks to federal debt and poor planning.
A must read paper by Redburn Partners, "Gold War - Gold is money and nothing else", written in November 2007, which due to its extreme prescience on not only the shift of the economy following the bursting of the credit bubble, but being virtually spot on in its prediction on the price of gold, can serve as an sufficiently comprehensive introduction to anyone wishing to get up to speed with the primary forces determining the price of gold and its implications in a fiat-money world (and especially the prevailing current variant in which competitive devaluations galore).
Count David Einhorn, the head of Greenlight Capital, among the hedge fund stars betting big on gold. The stake puts him in the company of luminaries like John Paulson and George Soros, who both reported large year-end stakes in gold-oriented equities.
Yet it is not just us, but the administration's very own Peter Orzsag who was pushing for consolidated GSE accounting two years ago. Yet with GSE debt most recently at $6.3 trillion, or about half of the existing Treasury debt, this would mean total US debt would not only explode by 50% overnight, but the recently increased debt ceiling would be immediately breached and America would find itself in technical default (where it really is right now for all technical purposes).
A makeshift assistance should be enough to rescue Greece but bigger problems facing Europe would leave the future of the euro currency in question, billionaire investor George Soros said.
Nothing would derail the Fed’s great reflation/recovery experiment like higher interest rates.Several notable investors including David Einhorn (see Einhorn’s thoughts here) and Julian Robertson (see Robertson’s thoughtshere), have expressed their concerns over the potential for higher interest rates.
If you thought Wall Street’s debt crisis was traumatic, wait till you the see the consequences of Washington’s debt crisis! Never before in history has a world power like the U.S. been so utterly buried in debt! And never before has that debt been financed so massively by foreign investors!
A UN nuclear watchdog report suggests Iran could be developing a nuclear bomb, apparently confirming long-held suspicions in the West. But Tehran denies the claims, again insisting that its atomic intentions are peaceful. Michel Chossudovsky, who's from an independent Canadian policy research group, believes that what Iran says hardly matters, because the U.S. is planning for war.
Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits. Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.
In this interview Mr. Dines covers gold, silver, deflation, inflation, hyperinflation, government embezzlement of savings, financial corruption, the Bank of International Settlements, nobody knows who owns the BIS, their immunity from jurisdiction and arrest, the need for an audit of a BIS, the doubling of the currency because of the Genoa Conference and much more.
Silver is in a potential inverse H&S formation that targets $30 per ounce. There are two or three big bullion banks that are massively short silver, that cannot possibly cover their short positions without significant pain, including a risk of default if a higher price fuels demand and breaks the confidence of the paper market. If this is true, it is a big problem for the US government, because unlike gold, the central banks have no ready store of silver to sell into the markets, having exhausted their strategic stores some years ago. If silver explodes because of a paper default, gold will follow. The central banks view that as a very risky development since several of the banks are already breaking ranks with the ECB, BofE, and the Fed over this issue of the de facto dollar reserve currency regime.
In regards to whether or not China truly sold down its holdings of U.S. treasuries recently, the situation remains a bit murky. But Citi's Alan Heap thinks it happened for sure. Moreover, he thinks China has a plan for the cash they pulled out of the U.S. -- They'll use it to buy 191 tonnes of gold from the IMF.
Britain's public finances may end this year in a worse state than those of Greece, economists warned yesterday, raising serious fears over the economic stability of the country.
In February 2010, a year after us stating that the end of 2009 would mark the beginning of the phase of global geopolitical dislocation, anyone can see that this process is well established: states on the edge of bankruptcy, remorseless rise in unemployment, millions of people coming to the end of their social security benefits, falling wages and salaries, limiting of public services and disintegration of the global governance system (failure of the Copenhagen summit, growing Chinese/US confrontation, return of the risk of an Iran/Israel/USA conflict, wars worldwide… (1)). However, we are only at the start of this phase for which LEAP/E2020 will supply a likely timeframe in the next GEAB issue.
Rogers, who has been a strong voice of caution since before the global economic collapse occurred, stated that he’s surprised China didn’t drop more, “The US should be worried about everyone lightening up – not just China.”
If Chinese demand for Treasuries disappeared and it started selling, US interest rates would rise, analysts say. This could throttle a US economic recovery, damage Chinese exports, and also reduce the value of China’s existing vast holdings of Treasuries as yields rose and prices fell, damaging a key plank of its currency reserves.
In this video, Chair Elizabeth Warren of the TARP Congressional Oversight Panel introduces the COP February report, "Commercial Real Estate Losses and the Risk to Financial Stability.
The final Pillar in the gold bull market is a bear market in US Treasuries. The increase in the discount rate to 0.75% is driven by market realities and a desire to be able to sell US Treasuries as foreign demand falls off. The bull market in gold moved from $400 to $887.50 in the 1970s as interest rates rose from 3% to 14 7.8% on Ten Year money. Once again the knee jerk reaction is to sell gold and buy the dollar. Be assured this must happen. Because the final Pillar is falling while Gold is over $1000, you can look at Armstrong’s $5000 prediction as a realistic possibility.
NEW YORK (MarketWatch) -- The dollar jumped against major counterparts on Thursday, after the Federal Reserve delivered a surprise hike in its discount rate after the close of U.S. markets.
It was January 2007 when I first discovered the information released by the Federal Reserve Bank, Boston that changed my understanding of the gold & silver markets, the financial markets, the energy markets, the monetary system as well as the true essence of my country, the United States of America. My understanding of the way the world worked was blown to bits and replaced with a more unified theory on all things monetary... all things that lead us down The Road to Roota otherwise known as the Road to the Gold Standard. The Road to Roota Theory postulates that there is a group of people in the United States as well as around the world that are working to remove and destroy the financial banking powers that have secretly controlled all aspects of our lives for hundreds of years. The original idea of this group sprang from the mind of Alan Greenspan and involved rigging markets with computer programs that he had invented in the 1960's. The original articles can be found here:
The Enronization of US financial structures is gradually being exposed, replete with false accounting, diverse hidden tentacles, and prolific slush funds. The credit climax will be a global shock wave, a grand restructure of financial structures, tremendous disorder & chaos, dislocations of important supply chains, and enormous challenge. Prepare! Gold, silver, and platinum will be survivors left standing!!
That means we are setting up for a classic supply demand squeeze. I think we could run to the old high of $50/ounce in the next economic cycle, if another monetary crisis doesn't get us there first. Since silver can trade with double the volatility of gold, this forecast could prove conservative.
China is a formidable adversary whose ultimate strength is not its military hardware but its economic prowess, and whose diplomatic weapon is not saber rattling but great patience.
I agree fully with Trader Dan’s assessment of the IMF statement. This is a duplicate of the IMF action in the 1970s. It turned out to be the most positive event as each time the IMF held an auction of their gold they facilitated entry for large investors at singular prices. It will be no different this time around. Gold will rise because of IMF selling as it did in the 1970s. I assure you that history will repeat itself on the same circumstances.
Gold rose in euro terms to a record high as investors returned to perceived safe-havens amid euro zone debt fears. Rozanna Wozniak from World Gold Council considers the outlook for the precious metal.
Bill Fleckenstein on CNBC’s Fast Money taling about all the “money printing”. Likes direct beneficiaries of all the money printing like gold. Video below…Fleckenstein segment starts at the 1:42 mark
South Carolina Rep. Mike Pitts has introduced legislation that would mandate that gold and silver coins replace federal currency as legal tender in his state.
Obama will outspend and out-borrow the admittedly profligate George W. Bush, a man Obama and his lieutenants routinely malign for fiscal recklessness and who, when in office, was often hailed even by his allies as a Big Government Republican. Obama will even outspend—but not quite out-borrow—his fellow welfare-state liberal FDR, who had to contend with both the Depression and World War II.
Homelessness in rural and suburban America is straining shelters this winter as the economy founders and joblessness hovers near double digits—a "perfect storm of foreclosures, unemployment and a shortage of affordable housing," in one official's eyes. "We see a spiral in food stamps, heating assistance applications; Medicaid is skyrocketing," Blass added. "It is truly reaching a stage of being alarming."
An apparent change in behaviour by these institutions may be affecting investors' approach to the metal, according to the World Gold Council's 2009 report.
MOSCOW (Reuters) - Global central banks will be net gold buyers in 2010 as they review their reserves policies, the head of the World Gold Council told Reuters on Wednesday.
Feb. 17 (Bloomberg) -- Billionaire George Soros’s Soros Fund Management LLC more than doubled its holding in the biggest gold exchange-traded fund in the fourth quarter after bullion advanced 8.9 percent to a record.
How can we tell if a market is about to go parabolic? Trendlines are one way. Another way is to look at the length of corrections. How long is it taking the market to correct? Are the corrections becoming shorter and shorter?
Feb. 16 (Bloomberg) -- Gold rose the most in three months on speculation that concern over Greece’s sovereign debt will spur demand for the metal as an alternative to holding currency.
Tue 02/16/10 NEW YORK (TheStreet) — Peter Grandich, chief commentator on Agoracom.com, says that if gold prices can hold above $1,125 an ounce for two trading days that gold will be in for another leg up.
The US must fix its growing debt problems or risk a new financial crisis, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, warned on Tuesday, adding a mounting deficit could spur inflation.
Gradually we are getting confirmation that Chinese "posturing" about offloading US debt is all too real. The most recent TIC data confirmed the Treasury's greatest nightmare: China is now dumping US bonds.
The economic elite have robbed us all. The amount of suffering in the United States of America is literally a crime against humanity.The mainstream news media will numb us to this horrifying reality by endlessly talking about the latest numbers, but they never piece them together to show you the whole devastating picture, and they rarely show you all theimmense individual suffering behind them. This is how they "normalize the unthinkable" and make us become passive in the face of such a high causality count.
In this interview Jim discusses the wreckless actions of an out of control banking system and also shares information that has never before been broadcast to the public, the gold market, criminal banking syndicates, their control of markets and governments as well as the fact that they are sociopaths, these sociopaths out of control and are now attacking countries - not just companies, loss of confidence in currencies, the problems in Greece, the fact that many states are bankrupt, bankruptcy of the system, why the little guy gets hurt, Bert Seligman & Jesse Livermore, JP Morgan’s appeal to Jesse Livermore, and more.
Gold Prices will climb to $5,000 within two years due to US dollar weakness and significant buying by players in the hedge fund industry looking to preserve the value of their funds. That is the opinion of New Zealand market trading expert Welles Wilder, who has previously been highlighted by publications such as Forbes and Barron's for his skill in the markets, stuff.co.nz reports.
The US Federal Reserve is no longer able, in reality, to continue its multi-decade combat against the « barbarous relic » in order to guarantee the supremacy of the US currency at the centre of the international monetary system. For LEAP/E2020 the decade which has just begun will be clearly marked by a complete KO of the Dollar (and the fall of most major international currencies) by gold.
I think and ponder and wonder. I believe current unsustainable debt is literally "eating up" the world. This should end in both deflation plus monetary inflation through the production of junk, fiat money. Ultimately, the survivor, the "last man standing" will be gold. Ironically, Americans have lost or forgotten the meaning of gold. Which is why only a tiny percentage of Americans now own any gold.
For the U.S., the crushing weight of its debt threatens to overwhelm everything the federal government does, even in the short-term, best-case financial scenario — a full recovery and a return to prerecession employment levels. The government already has made so many promises to so many expanding "mandatory" programs. Just keeping these commitments, without major changes in taxing and spending, will lead to deficits that cannot be sustained. Take Social Security, Medicare and other benefits. Add in interest payments on a national debt that now exceeds $12.3 trillion. It all will gobble up 80 percent of all federal revenues by 2020, government economists project.
(Commodity Trade Alert) Listen to Obama and Geithner lately? Notice that they keep reading from the same playbook? The US needs to increase employment now. How do we do that? Well, they both keep saying the same thing: We need to increase exports. How do we do that? We need to be competitive on the world stage. In other words we need a weaker US dollar.
The European single currency is facing an 'inevitable break-up' a leading French bank claimed yesterday. Strategists at Paris-based Société Générale said that any bailout of the stricken Greek economy would only provide 'sticking plasters' to cover the deep- seated flaws in the eurozone bloc.The stark warning came as the euro slipped further on the currency markets and dire growth figures raised the prospect of a 'double-dip' recession in the embattled zone.
"What we should have done in this crisis is to simply freeze all CDS transactions. Once you pause the system, we could have then made the proper decisions. The refusal to do that and just hand out 100% pay-outs to those that did not even form anything within the economy but speculators, wiped out the public confidence and did not prevent the contagion on Wall Street from infecting Main Street. Just sometimes, you have just hit the pause button. What we now have is a massive acceleration in public debt that has increased the time table for sheer economic disaster. The year 2012 will in fact now be a year that history will indeed remember."
As part of his continuing series of reports making sense of business and the economy, Paul Solman examines the inner workings of investment powerhouse Goldman Sachs and how it makes money.
Credit Suisse has come up with its own list of the riskiest countries using such measures as credit rating, CDS spreads, potential for GDP growth, government debt, private sector credit, and the budget balance. Those factors are all compiled into a single score and then ranked. And unlike with the previous list yes, the US is on it.
Last year, the US Treasury ran out of blanks for one ounce $50 American Gold Eagle coins, now worth about $1,160. Competitive devaluations by almost every central bank, except Japan, mean that currencies are not performing as the hedge that many had hoped. It all has the makings of serious gold shortage for the future. The current downturn has to be just a blipin the long term bull market. Now that we are solidly over $1,000, and recently kissed $1,225, the match could hit the fuel dump at any time. Just let thiscurrent risk reversal burn out before you load the boat
Feb. 12 (Bloomberg) -- China ordered banks to set aside more deposits as reserves for the second time in a month to cool the fastest-growing major economy after loan growth accelerated and property prices surged. The reserve requirement will increase 50 basis points effective Feb. 25, the People’s Bank of China said on its Web site today. The current level is 16 percent for big banks and 14 percent for smaller ones. China’s policy makers aim to avert asset bubbles and restrain inflation after flooding the economy with money last year to drive the nation’s recovery from the first global recession since World War II.
Nowhere is self delusion more prevalent that in the workings of the Federal Reserve duo of Greenspan and Bernanke. The issue is that any weakness, or any affirmation of faulty policy by the head money printer, will immediately be seen as weakness that could destabilize the reserve currency format. For a monetary system based on flawed assumptions that would be the beginning of the end.
Today's $16 billion 30 year auction also saw weakness, with a yield of 4.72% and a bid to cover of 2.36 providing more data to confirm deteriorating demand.
INTERNATIONAL. Marc Faber the Swiss fund manager and Gloom Boom & Doom editor said the governments of every developed economy will eventually default on their sovereign debts, so the one thing he will never do in his life is 'sell my gold.'
The non-bailout bailout is here. Or is it? They really should have used Larry Summers. Van Rompuy says "determined and coordinated action if needed" will be provided. Uh, it is needed. But what is the deal? And what are the details? Greek 2s10s 40 bps steeper to +93 bps as 2 Year trades 56 bps lower to 4.97%.
Yet even a casual look at the fiscal position of the federal government (not to mention the states) makes a nonsense of the phrase “safe haven”. US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941. On reflection, it is appropriate that the fiscal crisis of the west has begun in Greece, the birthplace of western civilization. Soon it will cross the channel to Britain. But the key question is when that crisis will reach the last bastion of western power, on the other side of the Atlantic.
Today's latest report from the Congressional Oversight Panel makes it very clear that while things may feel relative lty stable right now on the commercial real estate front, the real bomb hits in 2011. Banks could lose $200 - $300 billion, and 'every American' could be affected:
The dollar’s recent rally, which has taken it to a six-month high, will soon fade against Asian and commodity currencies, says star economist Nouriel Roubini.
It is not a secret to anyone who has been closely following the FDIC's quasi criminal bank takeover practices over the past year, that acquirors of failed banks end up receiving a massive and risk-free gift in the form of taxpayer benefits via the FDIC when it comes to funding losses on a given bank acquisition. Should there be a short sale resulting in a loss to the full principal (not the cost basis mind you)? Not to worry, Sheila Bair is there to hand out taxpayer money to the hedge funds/banks owning the newly transferred assets.
You are witnessing a fundamental breakdown of the American dream, a systemic breakdown of our democracy and our capitalism, a breakdown driven by the blind insatiable greed of Wall Street: Dysfunctional government, insane markets, economy on the brink. Multiply that many times over and see a world in total disarray. Ignore it now, tomorrow will be too late.
Telegraph.co.uk) First the hedge fund manager, Jim Rogers, co-founder with George Soros of the Quantum Fund, says “sell any sterling you might have. It’s finished”. Then along comes another veteran of the hedge fund scene, Bill Gross of Pimco, to insist that “the UK is a must avoid. Its gilts are resting on a bed of nitroglycerine”.
The Telegraph also reports that Stiglitz said that the U.S. ability to print money to pay off its debt made default even less likely. Stiglitz also called for a second stimulus to provide certainty in global markets.
"The longer they keep the pedal to the meddle, the more disruptive the unwind will be," says Boockvar, who last November told Tech Ticker the Fed was wrong to keep rates at zero. "When you dig a deep hole, it takes a lot of climbing to get back out."
Don't expect Greeks to swallow their medicine willingly. Civil servants in the massive default risk country launched a 24-hour strike today to protest government cutbacks. Mob chants included "We won't pay for their crisis!" and "Not one euro to be sacrificed to the bankers!" according to the New York Times.
Home values in an additional 29 markets, including the Los Angeles and New York metropolitan statistical areas (MSAs), increased on a month-over-month basis each month throughout the fourth quarter. However, the rate of increase slowed from November to December in 21 of those markets, and several appear likely to experience several months of sustained decline in early 2010.
GOLD rose above $1 080 an ounce in Europe today as the euro rebounded versus the dollar on prospects of an imminent rescue package for Greece, increasing the metal’s appeal as an alternative asset.
The US trade deficit widened sharply in December to 40.2 billion dollars, capping a year that saw a massive drop in the trade gap, government data showed Wednesday.
Alan Heap, an analyst at Citi Investment Research, adds a bearish voice to a crowded debate over where the precious metal is headed. Billionaire investorJames Rogers and perma-bear David Tice say gold will hit $2,500. James Turk , Author of GoldMoney, predicts $8,000, while author Mike Maloney is betting on $15,000.
Gold has spoken out both before and after US trading hours for two days now on the developments taking place in the darkened central bankers meeting room. This is the same room with the shades pulled down, military and police guards out front and air support flying above. The floating exchange system as it now exists is going be folded. We are moving toward a one Western world currency, and one Western world central bank of central banks. Because all Western world federal budget deficits are out of control and there is no PRACTICAL method to reverse this condition in the foreseeable future, there is no other alternative. That means the two major Western World currencies will be Gold and the SDR (type entity).
A lot of people are very upset about the rapidly increasing U.S. national debt these days and they are demanding a solution. What they don't realize is that there simply is not a solution under the current U.S. financial system. It is now mathematically impossible for the U.S. government to pay off the U.S. national debt. You see, the truth is that the U.S. government now owes more dollars than actually exist.
Most of the Fed and Treasury's looting of America to funnel trillions in bailouts, loans, guarantees, and other favors to the too big to fails was done under the justification of an "emergency". I don't know whether the official declaration of a "state of emergency" in effect from September 2001 to today was directly used for financial looting. But again, the fear of an existential threat to our country was used to justify the looting.
t appears that this time China's posturing is for real. Following up on our earlier post that Chinese military officials want to "punish" America by selling Treasuries, Asia Times Online is reporting that an explicit directive by the Chinese government has notified reserve managers to sell all risky US assets, including asset backed and corporates, and just hold on to explicitly guaranteed Treasuries and Agency debt.
Now that some sort of Greek bailout is imminent, most likely in asset guarantee form, it is high time to evaluate the full impact of Europe's decision to jettison monetary prudence at the expense of patching a crumbling fiscal dam holding back trillions in bad investment decision cockroaches, accumulated over the years.
And you were worried about Iran. China's People Liberation Army has come out and openly said that the nuclear option, i.e., selling US Treasuries, is now on the table and should be exercised as "punishment" for U.S.' arms sales to Taiwan. China undoubtedly realizes that this is a prime example of sado-masochism as the resultant plunge in Treasuries that would follow would hurt the US certainly, but also have a "mild to quite mild" impact on China's $700 (and likely much greater) UST holdings. Game theory 101 just got interesting.
It appears that the ECB is set to hold an emergency meeting on the sovereign debt crisis that threatens to tear apart the EU. According to the Australian Broadcasting Company (ABC), ECB chief Jean-Claude Trichet is leaving a Sydney summit of Central Bankers early in order to fly back to Europe for the emergency talks. He had been scheduled to stay in Sydney until Wednesday.
One of the less-reported events this weekend was the not so secret central banker meeting that is taking place in Sidney Australia. Now that factual details are finally emerging it is appropriate to collect some information tidbits about this shindig which has some claiming is reminiscent of a modern day version of the Jekyll Island meeting.
NEW YORK—Precious metals gained modestly Monday, recouping some of last week's sharp losses as investors saw the dip as an opportunity to buy the metals at bargain prices.
Allowing inflation to soar would reduce the real burden of the huge nominal debts that have been run up by Greece and other European countries. Of course, diluting the euro might be seen as a desperate remedy to these countries’ problems, but, as Straubhaar points out, there are no good options in this predicament.
We are in unchartered seas of international financial turmoil. The mega rich have no loyalty to anyone or anything. I know some of them, made one of them from scratch, and I assure you would put their mothers in a microwave for the right price. This is a financial world war taking place behind top secret meetings that are deciding our fate while not even knowing they are out of control.
Need proof the Chinese are piling into Gold? Here it is…only $2 Trillion more to diversify out out of fiat money…(Roubini Global Economics) CIC is heavily exposed to resources, especially metals and mining, consistent with the sector’s weight within China’s foreign assets. The share of gold alone is particularly noticeable.
(guardian.co.uk) Sir Richard Branson and fellow leading businessmen will warn ministers this week that the world is running out of oil and faces an oil crunch within five years. The founder of the Virgin group, whose rail, airline and travel companies are sensitive to energy prices, will say that the coming crisis could be even more serious than the credit crunch.
In this interview John discusses looming hyperinflation, staggering unemployment, the reality of the US economy, bottom bouncing and a weakening economy, the coming collapse of the US Dollar, ongoing downturn which is structural in nature, the Fed’s debasement of the Dollar, an intensifying great depression, insolvency in the banking system, the fact that so many states are in financial trouble and more.
“We should retaliate with an eye for an eye and sell arms to Iran, North Korea, Syria, Cuba and Venezuela,” declared Liu Menxiong, a member of the Chinese people’s political consultative conference. War pulled America out of the First Great Depression. It is only fitting that war will be the result of the Second one. The only problem is this one won't be won by America.
Did I miss much while staring at the Bali sea? Oh, the usual shop of horrors. The ghost of Osama bin Laden released a new audio hit blasting the US for global warming and inciting everyone to dump the US dollar (the ghost is right on both counts). Pakistani Taliban supremo Hakeemullah Mehsud may or may not have been blasted to bits by a US drone (who cares? His replacement is already in business). US President Barack Obama's surge duly proceeds as a Kill Bill-style killing spree on both sides of the AfPak border. TheCentral Intelligence Agency swears al-Qaeda will try another hit inside the US within the next six months. There was a corporate takeover of American democracy (so why not "elect" US politicians by auction, once and for all?) and neo-cons are now rehashing the mantra "Bomb, Bomb Iran" as the only way for Obama to save his presidency.
Remember the proverbial run on the bank? Well, that was the norm (or rather the outlier) before governments decided to backstop entire financial industries residing within their territory. As a result, the post-Lehman version of "the bank run" will henceforth be referred to as "the country run" and for an example of one in practice, look no further than Greece. TheGuardian reports that investors have pulled a stunning €8-10 billion since the Greek crisis commenced in earnest last November. If true, this is the beginning of the end for the troubled EMU-member country.
1. Bretton Woods was folded. 2. The floating exchange rate system is about to be folded. 3. By default or design we are going to a one-world currency and a one-world central bank of central banks. 4. For Portugal, Ireland, Italy, Greece or Spain to break off from the euro would be an expansion of the floating exchange rate system under present conditions. 5. There are presently 3 major currencies. That is the US dollar, the euro and gold. 6. The SDR was an attempt to form a single reserve currency that never took flight. 7. The SDR is an accounting unit made up of an index of currencies much like the USDX
Bretton Woods is taking place in the Arctic up towards the top of the world, and now down under. Markets fell on their respective asses, not for the reasons listed below, but for the MOPE about when the Fed will drain liquidity, Great Britain will cease QE, and maybe because of the experiments on whether the system can be drained. Consider the repeated Fed statements on draining, repo tactics and the halt of down under rate increases. The answer is international liquidity injected cannot in any practical way be drained. The operative word is PRACTICAL. Here comes the IMF as the one world central bank of central banks. It is sort of the fund of funds liquidity wise. Where is the next meeting, on the space station?
THE world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets.
The credit rating of the United States is at risk, according to ratings agency Moody's. It's threatened to downgrade the countrys triple 'A' status, if the economy grows at a slower pace than expected.
very once in a great while, the market offers a unique opportunity to buy precious metals ‘on the cheap’. I believe today is one of those moments. There is ‘panic in the air’ and ‘blood in the streets’, which are conditions that open up unique opportunities. People who have used leverage to carry trading positions have been forced to sell their precious metals – throwing out the ‘baby with the bathwater’ – much like the panic that occurred after the Lehman Brothers collapse. The trigger this time though is not an over-leveraged investment bank, but rather, the sovereign debt of Greece and Spain.
Charlie Gasparino over at the Daily Beast points out a new development in the neverending Ken Lewis saga, which if true, may mark the beginning of the end of the pristine image of Ben Bernanke and Hank Paulson:
1) Short the S&P vs Long Gold, in a 5 to 1 ratio. By gold Taleb means a basket of precious metals including gold.
2) Hyperinflation bet that could very well not work but if it does “you will never fly in a public jet again” He prefers to play this bet with way out of the money call options on both gold and silver.
3) His “no-brainer” trade is short US treasury bonds , Taleb cites current policy and Larry Summers in Davos
The sharp exchange over China’s currency is only the latest symptom of rising tensions in American relations with China. Internet censorship, hacking attacks directed at American companies, arms sales to Taiwan and the pending visit of the Dalai Lama to Washington have all cropped up in the last month as points of conflict. China is exhibiting a brash sense of confidence as its economy continues to boom while much of the world remains mired in a recession.
Gold is down today because stops got run on the paper gold exchange. That came on the back of a strengthening dollar due to a weaker euro as a mirror effect. Please return to December of 2009 when the impending dollar rally was sold based on a sustainable US economic recovery. That was enough to convince money managers. That demand then triggers the algorithms which fires off huge fund buying for what today is no reason at all.
The Congressional debate over raising the debt ceiling by a ludicrous $1.9 trillion is now in session, with a vote expected at 2 pm. As a reminder, the Senate already passed this proposal last week. The debt "ceiling" raise by Congress seems like a done deal, but Congress will likely propose a statutory PayGo proposal to go along with the debt ceiling rise. Watch it live here on C-Span.
We've been talking about sovereign debt for a long time now, but it feels like we're tipping over today, and that the very real matter of countries defaulting on their debt is starting to get serious attention.
Feb. 4 (Bloomberg) -- Nouriel Roubini, the New York University professor who predicted the credit crisis, expects the dollar to weaken against Asian and “commodity” currencies such as the Brazilian real over the next two or three years.
The partnership strikes at the core of one of the most sensitive issues for the government and private industry in the evolving world of cybersecurity: how to balance privacy and national security interests. On Tuesday, Director of National Intelligence Dennis C. Blair called the Google attacks, which the company acknowledged in January, a "wake-up call." Cyberspace cannot be protected, he said, without a "collaborative effort that incorporates both the U.S. private sector and our international partners."
Feb. 4 (Bloomberg) -- Nassim Nicholas Taleb, author of “The Black Swan,” said “every single human being” should bet U.S. Treasury bonds will decline, citing the policies of Federal Reserve Chairman Ben S. Bernanke and the Obama administration. It’s “a no brainer” to sell short Treasuries, Taleb, a principal at Universa Investments LP in Santa Monica, California, said at a conference in Moscow today. “Every single human being should have that trade.”
Don't look now. But even as the bank bailout is winding down, another huge bailout is starting, this time for the Social Security system. But this year's Social Security cash shortfall is a watershed event. Until this year, Social Security was a problem for the future. Now it's a problem for the present.
