Thursday, December 10, 2009

Crimes In Broad Daylight

The International Forecaster
By: Bob Chapman
Our government continues to do its best to suppress gold and silver and commodity prices. Their ham-fisted presence was quite evident this past week and it was only marginally successful. All they accomplished was to make an unnatural correction in a market that could have needed a natural correction. The underlying fundamental factors are still very bullish. The technicals and the long-term charts as well as pro-gold and silver psychology are still in place. The reality is that gold, silver and commodities are still in bull markets and intervention by the President’s “Working Group on Financial Markets” cannot and are not capable of stopping what are going to be the biggest bull markets in history. In both gold and silver bullion and shares the shorts eventually have to cover and that could prove to be one of the biggest bloodbaths of all time and the American taxpayer will get to pay for the losses. What else can one expect with the world financial system collapsing and hyperinflation on the way. Today’s strength in gold and silver have nothing to do with inflation and everything to do with a flight to quality. It has nothing to do with a falling dollar and a great deal to do with a loss of confidence and trust in the G-10. The other factors will add to the fire a bit later. The sophisticated of world finance are starting to realize the US financial system has been run by criminals for a long time. The ringleader of this gang of thieves is the Federal Reserve. That is why S604, HR1207, now attached to HR3996 is so important. It will lead to exposure of what the Fed has been up too for 96 years. These are the people who own the Fed, who have had a revolving door between Wall Street and Washington, particularly our Treasury Department, for many years. They created Fannie Mae, Freddie Mac, Ginnie Mae and FHA. Socialist-Fascist programs initiated by Wall Street to bring great profits to the wealthy lenders and great debt to the American people. Worse yet, there are no longer rules, regulations and laws, because the government regulators at the SEC and CFTC are always looking the other way under government guidance. These agencies absolutely refuse to protect the public against crooks in the fields of banking, ratings, investments and insurance. They are an integral part of the problem. Who in their right mind would take over these agencies instead of letting them fail, as they should have along with AIG, GM and Chrysler? The bottom line is the dollar and every other currency in the world has been falling against gold for six years and almost all general stock market indices have fallen 50% to 80% versus gold for the past nine years. Why don’t CNBC, CNN and the major media tell you that? It is because they are all bought and paid for – that is why. What market couldn’t go up in value with $12.7 trillion at its disposal? This has nothing to do with a healthy economy and everything to do with the Fed creating money out of thin air for its owners and throwing it at the stock market creating the second such bubble in the last 13 years. Do not be fooled readers. This is all just another scam that every American will get to pay for.

An Obvious Question About The U.S. Government Gold...
Given the "robust" inventory of 100 oz. gold bars being reported by the Comex, how on earth is it possible that the U.S. has to keep suspending production of gold eagle and gold buffalo coins due to "a shortage of supply of gold?" The U.S. Mint announced yesterday that it is suspending production of 1 oz. gold eagles and buffalos for the balance of 2009. This is, I believe, the third time this year the Mint has suspended production:

"U.S. Mint now suspends all one ounce gold coin sales due to shortage of physical gold"

Here's the article link:
U.S. Supends Gold Eagle/Buffalo Production

As a matter of fact the Gold Bullion Act of 1985 authorizes the U.S. Mint to use U.S. Government gold reserves if necessary:

In the absence of available supplies of such gold at the average world price, the Secretary may use gold from reserves held by the United States to mint the coins issued under section 5112(i) of this title. The Secretary shall issue such regulations as may be necessary to carry out this paragraph”.

It would seem that if the United States has 8100 tons of gold, as reported by the Federal Reserve and U.S. Treasury, then there should NEVER be a shortage of gold with which to mint coins. What gives?

Here is the complete text of Gold Bullion Act of 1985:
Where's Our Gold Coins?

A London Silver Trader Challenges The CFTC
The following letter is from a London-based silver trader to CFTC Commissioner Bart Chilton. I wanted to post this letter, which appeared in Friday's Midas report, for those who do not subscribe to Anyone who follows the gold and silver markets knows about the severe imbalance which has occurred for several years between the size of the short interest in gold and silver futures vs. the amount of physical gold and silver sitting in Comex warehouses. As an example, JP Morgan and HSBC combined (and it's mostly JPM's short) have a short position which represents 199 million ounces. This is nearly 4 times the amount of silver currently listed as "registered," or available for delivery.

In any other instance,with any other commodity, the CFTC (Commidity Futures Trading Commission), which is the Governmental body which regulates commidities trading, has always enforced "market concentration" regulations and restricted the size of the long or short position which can be held by any firm in that specific commodity. There is usually a standard applied which measures the amount of short/long interest in a given commodity vs. its available supply on the exchange. As Ted Butler has been pointing out for years, never in the history of commodity futures trading has the short interest in silver (and gold) come even remotely close to degree of concentration and nominal amount vs. available supply as it is in the silver market.

The issue here concerns the CFTC's refusal to impose the same standards to the silver market which have been applied and enforced in every other commodity market. Why does the CFTC refuse to address this issue in the silver (and gold) market? Bart Chilton represented to Bill Murphy last December that he would address the problem in the silver market. Since that time, a new chairman - Gary Gensler - was installed by Obama. Gensler is a former partner at Goldman Sachs (surprise surprise). He was also part of Robert Rubin's Treasury Department in the late 1990's. The egregious and balantant manipulation in the Comex gold and silver markets is largely attributed to policies implemented by Robert Rubin.

I wanted to post the following letter to demonstrate how blatantly the CFTC is enabling the massive manipulation in the silver market to continue. In my view, there is a very distinct connection between the appointment of yet another Wall Street crook to the CFTC post and the lack of enforcement in gold and silver trading.

Today is December 10th. By my estimate, the last day of "early" December. Gary Gensler, CFTC Chairman promised a decision on CRIMEX position limits by "early December". Well Gary, spit it out! Either enforce the law, or close the CRIMEX. The future of the financial system needs your response to these "crimes in broad daylight" NOW!

New jobless claims rise more than expected to 474K
WASHINGTON — The number of newly laid-off workers seeking jobless benefits rose more than expected last week, after falling for five straight weeks.

Initial claims for unemployment insurance rose by 17,000 to a seasonally adjusted 474,000, the Labor Department said Thursday. That was above analysts' expectations of 460,000 new claims.

The number of people continuing to claim benefits fell by 303,000 to 5.16 million, the lowest level since February. The total unemployment benefit rolls have fallen in 11 of the past 12 weeks.

But the so-called continuing claims do not include millions of people that have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.

About 4.6 million people were receiving extended benefits in the week ended Nov. 21, the latest data available. That's an increase of about 130,000 from the previous week, and is partly due to an extension of benefits that Congress enacted last month.

Damn those little details. The unemployment rolls are not getting better, continuing claims don't even count those still collecting benefits via benefits extensions. Why does the government go to such great lengths to deceive with their "statistics"? Could it be they are in the business of "hiding the truth"? The US Government lie? Not outright, but their statistical reporting methods leave little to be desired.

Administration extends $700B bailout until Oct. 2010
WASHINGTON (AP) -- The Obama administration has extended the $700 billion financial bailout program until October, setting up a struggle between Democrats who favor using some of the leftover money to help generate jobs and Republicans who say it should be used to shrink soaring budget deficits.

The administration insists the bailout fund is still needed to prevent further turmoil in the banking system. In announcing the decision Wednesday, Treasury Secretary Timothy Geithner said extending the program also will help homeowners struggling to avoid losing homes to foreclosures and small businesses having trouble getting loans.

The decision came on the same day the administration acknowledged two key bailout programs lost a total of $61 billion. The bailout of insurance giant American International Group Inc. and the lifeline thrown to struggling automakers each cost more than $30 billion, according to Treasury data disclosed in a report from the Government Accountability Office.

"One of the fundamental lessons of the [financial] crisis is that when we underestimate financial risks and focus only on the short term, we set the stage for a future catastrophe," says ECB president Jean-Claude Trichet in an interview with the Belgian press published today.

Sovereign Debt Defaults Likely Over Next Several Years, Says Rogoff
Global markets tumbled overnight amid fresh concerns about the global economy, and more specifically, the prospect of sovereign debt defaults.

Standard & Poor’s lowered its outlook for Spain's debt grade as the country's finances worsened. A day earlier, Fitch cut Greece's long-term debt to BBB+ from A minus, marking the first time in a decade the country has seen its rating pushed below an A grade.Sovereign Debt Defaults Likely Over Next Several Years, Says Rogoff

As Dubai's recent debt crisis shows, more sovereign debt defaults will be likely over the next several years, he says.

The International Monetary Fund will try to prevent any global economic crisis in the near term says Rogoff, a former IMF chief economist. But, longer-term, difficult decisions remain about how to tackle mounting debt among G8 nations. "We can barely have the political will to raise taxes to pay our own debts," which means less money to pay for bailouts of other creditors, he predicts.

"In a couple of years as U.S. debt explodes, as German debt explodes, and they're all going to be pushing difficult levels, they're really going to start thinking. 'Hmm. Do we really want to cast this safety net?' We've got to scale back," says Rogoff, also co-author of a new book, "This Time Is Different: Eight Centuries of Financial Folly." The book outlines how periods of boom and bust are marked by bouts of overspending and mounting debt, whether by consumers, banks or governments -- just like the current crisis.;_ylt=Avi5Cj95IjpwoL2Br1wwy.S7YWsA;_ylu=X3oDMTE2Nmw3YWZxBHBvcwMxMQRzZWMDdG9wU3RvcmllcwRzbGsDc292ZXJlaWduZGVi?tickers=xlf,EEM,VWO,TIP,GLD,IEV,%5EDJI&sec=topStories&pos=9&asset=&ccode=

Speaking of sovereign credit rating credibility, the U.S. Treasury has $2 trillion in short term Treasury debt which has to be refinanced in the next 12 months. This does not include the net Treasury borrowing that will be required to fund the 2010 spending deficit. Back of the cocktail napkin guesstimate - the U.S. has to borrow an additional $3 trillion next year to fund everything. Does this sound like a recipe for a rally in the US Dollar?

Treasuries Extend Losses After $13 Billion 30-Year Bond Auction
“At these low levels of yield there is just not enough sponsorship to make the debt attractive, especially because more is coming on the longer end,” Jim Caron, head of U.S. interest- rate strategy at Morgan Stanley in New York, said before the sale. Morgan Stanley is one of the primary dealers, which are required to bid at Treasury auctions. “We’ve had two very bad auctions and that may start to change the psychology of the market and signal that it’s time to worry.”

Federal budget deficit for November hits $120.3B
WASHINGTON (AP) -- The federal deficit for the first two months of the new budget year is piling up faster than last year's record imbalance.

Economists worry the flood of red ink could push interest rates higher and raise the cost of borrowing for consumers and businesses, a potential drag on the fragile economic recovery.

The November deficit totaled $120.3 billion, the Treasury Department said Thursday. That's less than analysts had expected and down from a $176.4 billion imbalance in October. It was a record 14th straight monthly deficit.

Even with the improvement, the deficit is 5.7 percent higher than the first two months of the 2009 budget year when it hit a record $1.42 trillion. The Obama administration expects the 2010 deficit will set a new record at $1.5 trillion.

In a sign of the recession's depth, the government said individual income tax collections totaled $63.9 billion in November, less than the $70.5 billion the government collected in Social Security taxes and taxes for Medicare and disability insurance programs.

Dollar rally? Why? Because some fool anticipates some rate hikes from 0-0.25% to 1%? 1.5%?1% used to be considered an extraordinary low rate, and we're going to panic because Ben raises rates to levels that Alan caused massive bubbles with? Any Dollar rally[s] will be because of short covering and little else. I hope you're using these reactions in the Precious Metals to buy at a discount. 'Tis the season...

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