What's more tragic, the nonsense spewed by the US Treasury and the Fed regarding the "soundness" of our banks, "moderating inflation" and "strong growth", or the fact that so many people believe this BS and verbal diarrhea. Bumbling Ben Bernanke and Hanky Panky Paulson have been perpetually misleading and always wrong whenever they prognosticate and pontificate about the US Economy and financial system. How many times have we been told by these two monetary monkeys and their minions that "the bottom in housing is just around the corner", "inflation will moderate in the second half", "strong growth will resume in the 'second half'"? These two should be named Always Wrong and Never Right. I'm certain we'll continue to be misled by these two miscreants until they disappear from Washington. Funny thing about being misled though, we are only mislead if we chose to be.
Wrong time and time again, and Wall Street continues to fall hook, line, and sinker for every word that drops from these two hucksters mouths. Bernanke runs his mouth at some big "Fed Conference" and suddenly the housing crisis is over, energy prices are in check, inflation has evaporated, and financial stocks are bargains. My brain hurts as it works overtime to block this stupidity from defiling it. I sit here in shock with each of you. We have all been robbed by their words, and forced to absorb losses we did not deserve because we chose the Truth over the lies. But we cannot let ourselves get discouraged. Truth always prevails over deceit. Gold is our superhero. Silver it's trusty sidekick. Together, in time, our superheroes will crush the CRIMEX and the cabal of criminals on Wall Street and in Washington that perpetuate the lies and deceit that have lead our nations financial sovereignty to the brink of destruction. It's five minutes to midnight, and the bad guys can smell defeat.
Wake-Up Call
Last week, widely regarded silver analyst Ted Butler, reported on recent developments during the July 1 – August 5, 2008 time period in the precious metals complex [specifically, open-interest data in COMEX futures].
To wrap your head around “who” the perpetrator[s] must and categorically do include, just take a peek at [admittedly dated] the Quarterly Derivatives Report [Q1 / 08, pg. 30] compiled by the Office of the Comptroller of the Currency to see J.P. Morgan sporting 93 billion+ of gold derivatives [futures] on their books.
Manipulations in the capital markets are not restricted to precious metals. We regularly see the same “man-handling” of the interest rate complex when institutions such as J.P. Morgan wield amounts of 7 – 8 TRILLION in notional [largely 3 month interest rate futures based products] from one quarter to the next:
Ladies and gentlemen, the OBSCENE amounts of these financial instruments being thrust through the system – allegedly in the name of 1 bank, amounting to MULTI-TRILLIONS per quarter – CAN ONLY BE THE WORK OF A PRIVATE CENTRAL BANK [read, the FED], because no public entity – bank or otherwise - has the balance sheet maneuverability in an impaired credit environment to conduct such business.
http://www.financialsense.com/Market/kirby/2008/0825.html
It is no secret that JP Morgan is the "long-arm" of the Fed. JP Morgan has been involved in the theft of America's wealth since the early 1900s. It was their rumour mongering that created the "public demand" for the Federal Reserve in 1913. It was their rumour mongering that forced the destruction of Bear Stearns. Coincidentally they were there to pick up the pieces with a "loan" from the Fed. It should not be a shock to learn that JP Morgan is behind the manipulations of Gold and Silver at the CRIMEX via their puppet masters at the Fed. It's little wonder then that the CFTC turns a blind eye to the crimes committed in the Precious Metals Markets. The suppression of Truth is job #1 at the Federal Reserve.
Is Gold About To Decouple From The € and Rise With The $?
...we are at the point where the gold market is poised to see rising long-term demand on the physical front, as the high season for gold is about to begin and the funds on COMEX have drawn back the string of the bow to its maximum. The action in the gold market of a recovery back above $820 is in the face of a slightly weakening $ only. So we feel that it is likely that the $ can continue strong, while gold rises as well.
As the $ still holds strength, it is logical that the next phase of the evolution of gold is for the gold price to move with a strong $ upwards and upwards in the € too. This is a large step for gold and for the market, because it accepts that currencies, no matter which ones, are not effective value measurers, relative to gold, but gold is an effective counter to all currencies including the €.
Once gold is seen to have de-coupled from the € and by extension the $, the gold market will come into its own internationally. Demand from Europe as well as the Far East will ensure that it is not simply a counter to the $ but extends to a counter to rising inflation and falling markets alongside falling economic confidence in general. Then gold will have matured into a truly global investment medium capable of reaching new heights and beyond. In the next few months we expect this evolutionary step to be completed.
http://news.goldseek.com/GoldForecaster/1219786447.php
World currency: The euro and the United States dollar
Since the mid-20th century, the de facto world currency has been the United States dollar. According to Robert Gilpin in Global Political Economy: Understanding the International Economic Order (2001): "Somewhere between 40 and 60 percent of international financial transactions are denominated in dollars. For decades the dollar has also been the world's principal reserve currency; in 1996, the dollar accounted for approximately two-thirds of the world's foreign exchange reserves" (255).
Many of the world's currencies are pegged against the dollar. Some countries, such as Ecuador, El Salvador, and Panama, have gone even further and eliminated their own currency (see dollarization) in favor of the United States dollar. The dollar continues to dominate global currency reserves, with 64.6% held in dollars, as compared to 25.8% held in euros (see Reserve Currency).
Since 1999, the dollar's dominance has begun to be eroded by the euro, which represents a larger size economy, and has the prospect of more countries adopting the euro as their national currency. The euro inherited the status of a major reserve currency from the German Mark (DM), and since then its contribution to official reserves has risen as banks seek to diversify their reserves and trade in the eurozone continues to expand.[1]
As with the dollar, quite a few of the world's currencies are pegged against the euro. They are usually Eastern European currencies like the Estonian kroon and the Bulgarian lev, plus several west African currencies like the Cape Verdean escudo and the CFA franc. Other European countries, while not being EU members, have adopted the euro due to currency unions with member states, or by unilaterally superseding their own currencies: Andorra, Kosovo, Monaco, Montenegro, San Marino, and Vatican City.
As of December 2006, the euro surpassed the dollar in the combined value of cash in circulation. The value of euro notes in circulation has risen to more than €610 billion, equivalent to US$800 billion at the exchange rates at the time (today equivalent to circa US$968 billion).[2]
http://en.wikipedia.org/wiki/World_currency
Neither the Dollar OR the Euro is worthy of being a "world currency". As the world comes to realize this, particularly the Asians, it will be a race between these two to the bottom of the currency heap, and Gold and Silver will be the beneficiaries of a collapse of the Euro and the Dollar. All in good time...
The Disconnect Between Supply and Demand in Gold and Silver Markets, Part II
by James Conrad
There is no reason to believe that Europeans, with a long history of craving precious metal, and many wars and economic destruction, stretching from days of the Romans, to Napoleon, to the two world wars, do not still crave gold and silver. Collective memories of the Weimar Republic hyperinflation, and periodic bouts of severe deprivation, will cause them to react much the same as Americans. If the euro continues to sink, if banks continue to fail, and if there are increased levels of inflation, Europeans will eventually lose faith in the “coin of the realm” which, now, is the paper euro. They will buy gold.
The combined EU economy is bigger than that of the USA. When gold buying mania hits, the numbers will be significantly higher than what we will ever see in the USA. When the Euro begins to fall, and inflation starts to bite, Europeans will panic. Both pound and euro have steadily appreciated against the dollar. Inflation, up until now, has been low. So, WGC statistics show that almost no gold was purchased, at least over-the-table, by the European population, last year. However, when the European currencies begin to devalue, a lot will change.
The vast increase in physical demand is already happening to some extent, but it is mild compared to what is to come. Let’s look at Vietnam, a nation wracked by war and incompetent government, for many years. It is a nation of 86 million people, living on an average income of less than about $70 per month. According to the WGC, “net investment demand in Vietnam in the first half of 2008 totaled 56.8 tons, already outstripping the 56.1 tons recorded for the whole of 2007.” Only a very small percentage of the Vietnamese population can afford to buy significant quantities of gold.
The U.S.A., in contrast, has 3.5 times as many people, and 55 times as much income per person. This means that the gold buying potential, in America, is 192.5 times that of Vietnam. If Americans had the gold buying propensity of the Vietnamese, they would be trying to buy approximately 21,500 tons of gold every year. Europeans could purchase even large quantities.
Worldwide gold mine production is only 2,475 tons per year. It is unlikely that Central Bankers still have that much gold left in all their vaults. The reason Americans have never demanded gold, like the Vietnamese, is that they trusted their institutions, their big banks, their government, and their U.S. dollars. That trust has been deeply abused, and is in the process of evaporating. Americans are changing the way they view the world. The small beginnings are shown in a vastly increased propensity toward buying precious metals. That trend will accelerate.
http://seekingalpha.com/article/92478-the-disconnect-between-supply-and-demand-in-gold-and-silver-markets-part-ii?source=d_email
Part II of Mr. Conrad's essay on the disconnect between Gold supply and Demand should be read in it's entirety. Once again he masterfully makes the fundamental case for higher Gold and Silver prices crystal clear.
Weaker oil demand eases hurricane concern
Oil prices up on supply worry, but demand continues to weaken
SAN FRANCISCO (MarketWatch) -- Crude-oil futures climbed Tuesday on concerns that Hurricane Gustav will threaten oil production in the Gulf of Mexico, but prices closed off the day's high and fell in electronic trading after the U.S. Energy Department reported weaker year-over-year domestic demand for oil.
http://www.marketwatch.com/news/story/oil-pares-gains-weaker-demand/story.aspx?guid=FC18D3C3-21F0-49D6-9AD0-4041B61AA882&dist=SecEditorsPicks
It ceases to amaze me the lengths to which the media will go to "explain away" obvious threats to Oil supplies. Let's pretend for a moment that Hurricane Gustav grows into a Cat 5 monster hurricane and slams into Galveston Bay and floods Houston...not to mention the Oil rigs that it would steamroll en route. Are these genius telling me that this event, were it to occur, would NOT effect Oil supplies and prices because demand for Oil in the US is below last year? HA! Just such an event would cripple this nation and it's economy. The weather is one thing I'm pretty sure that the Fed cannot control...yet. Their worst fear right now, with the Presidential election just weeks away, is a catastrophic disruption in Oil supplies that sends the price of Oil into orbit. To even suggest that hurricane destruction of a portion of the nations Oil infrastructure would be "minimized" by falling demand for Oil is lunacy. Have we forgotten Katrina already?
Gustav Could Become a Giant
Gustav officially became a hurricane early this morning, and its eye made landfall on the southwest peninsula of Haiti shortly after 1 p.m. At 2 p.m., Gustav was a Category 1 storm with maximum sustained winds near 90 mph.
National Hurricane Center warned this morning: "Most indications are that Gustav will be an extremely dangerous hurricane in the northwestern Caribbean sea in a few days."
http://voices.washingtonpost.com/capitalweathergang/2008/08/gustav_could_become_a_giant.html
Dead Men Walking
by Bennet Sedacca
The title of this piece sums up how I feel about the current credit markets. When I first started in the industry in 1981 we were worried, but only about one company -the Chrysler Corporation. Prior to that, Continental Illinois was in the forefront. Later in my career, in 1998, it was Long Term Capital Management, the hedge fund founded by John Meriwether that captured our attention. Then we had Enron/WorldCom, and by early 2008 Bear Stearns became a worry and then a problem that needed fixing.
All of these events were isolated, dealt with, often with either direct assistance from Uncle Sam or an effort coordinated by our benevolent/socialist government financial authorities. Markets would become unnerved, fear would grow, and then the Government would step in to make sure that the systemic risk that had finally come to the surface didn't melt the entire planet.
But this is where it is "different this time". Not only is it different, I think it may be unprecedented in nature. When I look at my Bloomberg monitor each day that contains my 100 most important indices, companies, commodities, bonds, bond spreads, preferred shares, etc, I shudder. The reason I shudder is that my screen doesn't have just one "problem child". It looks like a screen that contains many "dead men walking" .
Who Are the Dead Men Walking?
Lehman Brothers
Zions Bancorp
KeyCorp
Fifth Third Bank
Washington Mutual
National City
Regions Financial
General Motor/GMAC
Ford/Ford Motor Credit Co
Wachovia
CitiGroup
This is NOT Shaping Up to be a Pretty Couple of Years
http://new.goldmau.com/article.php?id=590
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment