Tuesday, January 19, 2010

All Hail The Republican Voters Of Massachusetts!

Republican Scott Brown Defeats Democrat Martha Coakley in Mass. Senate Race
Democrats Lose Super Majority in Senate; Brown Supporters Chant 'John Kerry's Next'
In a dramatic upset that will end Democrats' super majority in the Senate, Massachusetts Republican Scott Brown defeated Democrat Martha Coakley to claim the seat held by the late Ted Kennedy for more than 46 years.

Coakley called Brown to concede the race shortly before 9:30 p.m., a Democratic aide told ABC News.

After Brown's victory was announced, the throng of supporters at his campaign headquarters chanted "John Kerry's next."

Brown, 50, a lawyer and former model, will be the 41st Republican in the Senate, meaning Democrats will no longer be able to prevent a GOP filibuster -- a major complication for President Obama's agenda and the health care legislation currently pending in Congress.

Obama called Brown to congratulate him on his victory and told him "he looks forward to working with him on the urgent economic challenges facing Massachusetts families and struggling families across our nation," White House press secretary Robert Gibbs said.

Massachusetts Secretary of State William Galvin said he would notify the Senate on Wednesday that Brown had been elected, even though he had said earlier it could take more than two weeks to certify the special election results.

That delay could have given Democrats time to try to push through final passage of Obama's health care plan.

Senate Majority Leader Harry Reid, D-Nev., said tonight that Brown would be seated "as soon as the proper paperwork has been received."


Gold and Silver together today defied a rising US Dollar to break thru resistance and close up strongly on the CRIMEX today. Gold hurtled the bar set at 1137 and closed at 1139.70, +9.80 from last Friday's close in NY. Silver scaled the wall at 18.62 to close on the CRIMEX at 18.78, +0.39 from last Friday's close in NY.

The Gold Seeker Closing Report observes the U.S. dollar index rose on worries over Greece that sent the Euro markedly lower. Concerns over economic growth in Germany added to uncertainty over Greek debt and increased pressure on the European currency. Funny how concerns over economic growth in the US and uncertainty over California debt doesn't increase pressure on the US Dollar. Greece is a pimple on an elephants ass compared to the broken nose on the Hollywood starlet that California is.

ECB—Greece No California
Source: Axel Merk
Asked about any threat to the euro because of Greece's problems, [European Central Bank (ECB) President] Trichet pointed out that Greece's Gross Domestic Product (GDP) is a mere 2.5%–3% of the euro zone GDP. In California, which has its own set of severe fiscal challenges, the magnitude of the problem is far larger (California's GDP is over 12% of U.S. GDP). He went on to stress that euro zone budget deficits currently amount to about 6.5%–7% in the aggregate, compared to 12% in the U.S.

Clearly ECB President Trichet gets it. Where Greece is concerned, a mountain is being made out of a molehill. The economic volcano that is about to erupt is California. If California were a country, it would have the World's 7th largest GDP. This nonsense that Greece is going to destroy the European Union has got to stop. A debt default by California poses a far graver threat to the United States than does Greece to the EU.

As to concerns over economic growth in Germany. How can they be any worse than concerns over growth in the US? At least Germany has a manufacturing base to hang their hopes on. Germany is the World's second leading exporter [China is number one]. The US has a manufacturing base that is in moth balls at best. The US Dollar is no safe haven. I think I have been clear on that.

Greek worries, German data boost dollar versus euro
NEW YORK (MarketWatch) -- The U.S. dollar firmed against most major counterparts on Tuesday, with the gains especially strong against the euro amid continued worry about Greek debt and further signs that Germany's economic recovery may be losing momentum.

The euro traded at $1.4301 versus the dollar, down 0.9%. Losses were extended after the Mannheim-based Center for European Economic Research, or ZEW, said its expectations index declined more than expected in January, to 47.2 from 50.4.

The reading reinforces ideas that the modest pace of recovery seen by the euro zone's largest economy is losing steam, economists said.

Worries about Greece's debt woes, however, remain the largest shadow over the euro, strategists said.

Joaquin Almunia, the European commissioner for economic and monetary affairs, said Monday night that Greece's budget plans appear "adequate" but required further study by European Union policy makers. European finance ministers and E.U. officials met in Brussels Monday.

On Tuesday, ratings company Moody's said Greece's plan to cut its deficit from more than 12% of gross domestic product last year to below the E.U.'s 3% target by 2012 was relatively well designed for at least the short term. The Greek government's ability to implement the measures, however, remained a key uncertainty, the agency said.

Moody's kept a negative outlook on Greece.


Heaven forbid Moody's should ever put a negative debt rating on the World's largest debtor, The United States Of America. I don't see anything worse in the German confidence numbers than those reported here in the US recently. How does anybody figure that EU debt problems and the German economy are worse than those of the US? THE U.S. IS THE WORLD'S LARGEST DEBTOR NATION...of all-time! The US Economy is on government life support. In effect, there is no US Economy. The private sector is all but dead in the water right now. Sell the Euro and buy the Dollar? Go ahead, I think I'll buy some more Gold and Silver. The World's anti-currencies.

Today, we all need dollars to pay our bills and expenses. But the day is coming when the US Dollar will fail to function as money. Do yourself a favor and trade some of your dollars for some real money, Gold and Silver.
-Mark J. Lundeen

Huge government debts mean you should hang on to gold
By David Stevenson
The consensus is that governments and central banks pulled us back from the brink in 2008. And now it's onwards and ever upwards for asset markets.

But markets are becoming increasingly vulnerable. And while we can't be sure of what will trigger another slide, the higher they rise, the more severe the correction will be. And when it comes, governments will be in no fit state to bail the economy out again. Here are five reasons to be on your guard…

1. Stock markets are expensive

2. There are signs of complacency

3. The supply of bears is running out

4. The bond issue glut

5. The real economy is too weak to support forecasts


U.S. government, on its way to bankruptcy[educating read]
By Michael Pollaro
The U.S. government is quite literally out of control.

I’m not talking about a government which shows an almost total disregard for the U.S. Constitution. I’m not talking about elitist politicians in Congress who think they know what’s best for you, who think it’s their job to take care of you from cradle to grave, whether you like it or not. I’m not even talking about an administration whose policies sometimes appear to have more in common with the command and control societies of Benito Mussolini or Karl Marx than they do with the freedom loving societies of Thomas Jefferson and James Madison.

No, what I’m talking about is a government whose fiscal finances are a mess. I’m talking about a government that, because of these policies, thinks nothing of spending what it does not have, of committing to obligations that it can not possibly keep, and then trying to stick someone else with the bill.

One of the basic tenets of Austrian Economics is that actions have consequences. And when the government spends money, someone has to pick up the bill.

If you are an American taxpayer, a holder of U.S. government debt, or simply a holder of U.S. dollars take heed. This is your bill.


U.S. Economic Data Is Almost Criminal
By: Gene Koprowski
Former White House economist Michael J. Boskin says American investors no longer place much credibility in the economic and fiscal statistics being reported by the U.S. government, and are “increasingly inclined to disbelieve them.”

Boskin, the one-time economic adviser to President George H.W. Bush, says that solid, reliable information is needed by investors, because “as a society, and as individuals, we need to make difficult, even wrenching choices, often with grave consequences.”

To base those decisions on misleading, biased, or manufactured numbers, is not just wrong, “but dangerous,” he wrote in The Wall Street Journal.

But, due to the obvious fudging of numbers involved in the government’s health care insurance industry reform effort, most Americans now believe the health-care legislation will actually raise their insurance costs, rather than reduce them, and increase the federal budget deficit, rather than contain it.

That’s not the only area where cynicism over official statistics is growing.

“Most Americans are highly skeptical of the claims of climate extremists,” writes Boskin, now a professor of economics at Stanford University and a senior fellow at the Hoover Institution.

And because of the spin over “jobs created and saved” by the stimulus, they have a “more realistic reaction to the extraordinary deterioration in our public finances than do the president and Congress,” Boskin adds.

Squandering their credibility with these numbers games will only make it more difficult for America’s elected leaders to garner support for difficult decisions from a public increasingly inclined to disbelieve them, writes Boskin.

For example, touting the claim that the U.S. economy came out of recession last summer, while Germany’s economy last year suffered its worst post-war slide, according to Der Spiegel online, strains credulity among economic observers.


The Tiny Market that is the Worlds Biggest!
By Adrian Douglas
There is a myth among even knowledgeable gold investors and analysts that the gold market is tiny, when in reality it is the biggest physically traded commodity market in the world. The perception of gold being a tiny market comes from the fact that the production of gold is tiny. Global gold production is only 2200 mt per year, which is equivalent to the gross trade in gold on the LBMA in just one day.

In a previous article I analyzed the LBMA market numbers and deduced that it was impossible for the LBMA to have enough gold in its vaults to trade such large daily volumes. The inescapable inference is that the LBMA is operating a fractional reserve system and has sold much more gold than it has or could ever have. The amount of gold that has been sold is estimated to be around 65,000 mt while the maximum amount of London Good Delivery bars that exist in the world is around 15,000 mt. So even if the LBMA possesses all of the world’s entire stock of LGD bars there are 50,000 mt of obligations that can not be met if the owners ask for delivery. To put that quantity of gold into perspective it is equal to all the gold reserves that remain to be mined in the earth.

Gold is unique among all commodities because its very nature and function enables such a fraud to be perpetrated. Gold has very few uses that consume gold. It’s main function is to store wealth and gold can perform that function while in your house, in your vault, or even on the other side of the world in someone else’s vault. When it is acting as a store of wealth in someone else’s vault you have to trust them that there is any gold at all in their vault.

Many wealthy individuals, institutions and sovereign states buy gold through the LBMA in unallocated accounts and leave the gold they supposedly own in the custody of the LBMA.

The fact that people are buying and selling gold without ever taking delivery means that there is the opportunity for the bullion houses to sell gold that doesn’t exist. The bullion houses probably don’t view this as illegal or dishonest because they will operate a fractional reserve type system just as the banks do with fiat currency and make sure they have enough gold on hand for what would be the maximum estimated volume of gold that could be called for delivery at any one time.

In order for this fraud to continue without being exposed, no requested delivery of gold by an LBMA customer must ever be defaulted upon or else a massive “run on the bank” would be triggered. When the bullion banks get into trouble and don’t have enough gold on hand to meet delivery demands the central banks lease or sell them gold to meet the short fall. The central banks are willingly to aid and abet the crime because the selling of “paper gold” has the same suppressive effect on the gold price as selling real gold. It accommodates the central banks to mask their promiscuous fiat currency creation by suppressing the gold price. In this way the traditional inflation “canary in the coal mine” is muted. This is the basis of the “strong dollar policy” which allows interest rates to be lower than they should be and it in turn lowers the price of commodities and imports as it artificially enhances the dollar’s buying power. Furthermore, the central banks are able to earn a lease rate on their gold hoards.

If commission fees are 3% then the annual commission earned by the LBMA is approximately $585 Billion on only $500 Billion of assets. 100% return on investment is certainly a handsome profit by any standards!

It should be noted that the much heralded Bank of England public auction of half of their gold stock was only open to members of the LBMA.

From the thesis presented here it can be seen that the suppression of the gold price suits the central banks and for the LBMA running a fractional reserve gold inventory is extremely lucrative, especially when it is back-stopped by the central banks.


And we thought the CRIMEX was a fraud. In the end, physical demand, is what is going to disrupt both the LBMA and the CRIMEX and force both to default. There is no substitute for REAL Gold and Silver.

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