Thursday, March 18, 2010

Squeeze The Trigger

After touching 79.50 yesterday, and closing near that low of the day, the Dollar "miraculously" found a bit today to move it up and away from the cliff. Shockingly, this bid was not warranted by ANY positive change in the Dollar's fundamentals. Further weakness in the Euro because of never ending indecision regarding the fate of Greece "forced" the Dollar higher, as the Euro wilted under the continued uncertainty surrounding Greece.

In spite of the Dollar's "false sense of security", Gold was once again able to hold it's own, and gave no ground to the CRIMEX goons. Gold actually closed up on the day at 1127.60, missing our squeeze trigger by just 30 cents.

Silver waffled around unchanged all day as the entire commodity complex was corralled by the "mighty" Dollar... My growing curiosity with Silver is the CRIMEX warehouse numbers. Today there is almost 8 MILLION "more" ounces of Silver in the CRIMEX warehouse than there was at the beginning of March...AND 25 MILLION onces have stood for delivery. How can this be? Are they covering their shorts with Silver from the SLV ETF? One wonders how this Houdini act is being propagated.

The Precious Metals appear poised and prepared for a major battle. The Treasury Department said it will sell $44 billion in two-year notes, $42 billion in five-year debt, and $32 billion in seven-year notes next week. We can only imagine the Herculean efforts of the CRIMEX goons next week to persuade investors to shun Gold for that safe-haven of safe-havens, US Treasuries.

Between $118 BILLION of IOUs and the March 25 CFTC hearing regarding position limits in the Gold and Silver futures markets, the CRIMEX goons are going to be working overtime. They have already thrown the kitchen sink at these markets in an effort to suppress them. What's left?

Unemployment claims show long-term problem
NEW YORK ( -- The number of Americans filing continuing claims for unemployment insurance spiked last week, the Labor Department said Thursday, as sluggish hiring continues to drag on the labor market's recovery.

The number of people filing continuing claims jumped to 4,558,000 in the week ended Feb. 27, the most recent data available. That was up 37,000 from the preceding week's upwardly revised 4,521,000 claims.

Economists were expecting continuing claims to remain unchanged at 4,500,000.

Continuing claims reflect people filing each week after their initial benefit week until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved into state or federal extensions, or people whose benefits have expired.

"Continuing claims represent the pool of workers who have been unable to get back into the labor market quickly," said Robert Dye, senior economist at PNC Financial Services Group. "Long-term unemployment remains a significant problem and will remain a drag on the economy, as it has for some time now.

Senators back bill to pressure China on currency
WASHINGTON (AP) -- A group of 14 U.S. senators unveiled legislation Tuesday that seeks to increase pressure on China to let its currency to rise in value against the dollar, saying Chinese "currency manipulation" is hurting the U.S. economy.

The bill calls for stiff trade sanctions if China does not act.

Treasury Secretary Timothy Geithner says the legislation is a sign of how strongly China's trading partners feel about the issue. In an interview on Fox Business Network, Geithner said that he believes Chinese officials "ultimately will decide it is in their interests to move."

Geithner declined to respond directly to a question of whether the Obama administration would support the bill backed by Sens. Charles Schumer, D-N.Y., Lindsey Graham, R-S.C., Debbie Stabenow, D-Mich., and 11 other senators.

"We are sending a message to the Chinese government," Schumer said in a statement. "If you refuse to play by the same rules as everyone else, we will force you to."

He said the issue is of critical importance at a time of high unemployment in the United States.

"There is no bigger step we can take to promote U.S. job creation, particularly in the manufacturing sector, than to confront China's currency manipulation," Schumer said.

American manufacturers contend that China's currency is undervalued by as much as 40 percent and is a big reason for the huge U.S. trade deficit with China, which totaled $226.8 billion, last year, the largest imbalance with any country.

A stronger yuan versus the dollar would make American products less expensive in China, while making Chinese goods more expensive for American consumers.

Be careful what you wish for you knuckleheads. A stronger Yuan will equal a weaker Dollar. So I fail to see how Geithner can continue to run around the world touting a "strong Dollar policy" if he believes the Yuan is undervalued.

Govt rewarded bank auditors with big bonuses
WASHINGTON (AP) -- As banks gambled on the risky mortgages that helped create the worst financial crisis in generations, the U.S. government handed out millions of dollars in bonuses to regulators at agencies that missed or ignored warning signs that the system was on the verge of a meltdown.

The bonuses, detailed in payroll data released to The Associated Press, are the latest evidence of the government's false sense of security during the go-go days of the financial boom. Just as bank executives got bonuses despite taking on dangerous amounts of risk, regulators got taxpayer-funded bonuses for doing "superior" work monitoring the banks.

The bonuses, released in response to a Freedom of Information Act request, were part of a reward program little known outside the government. Some government regulators got tens of thousands of dollars in perks, boosting their salaries by almost 25 percent. Often, though, rewards amounted to just a few hundred dollars for employees who came up with good ideas.

During the 2003-06 boom, the three agencies that supervise most U.S. banks -- the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the Office of the Comptroller of the Currency -- gave out at least $19 million in bonuses, records show.

Nearly all that money was spent recognizing "superior" performance. The largest share, more than $8.4 million, went to financial examiners, those employees and managers who scrutinize internal bank documents and sound the first alarms. Analysts, auditors, economists and criminal investigators also got awards.

After the meltdown, the government's internal investigators surveyed the wreckage of nearly 200 failed banks and repeatedly found that those regulators had not done enough:

The headline should have read: Government Bank Auditors Paid To Look The Other Way

Central Bank Gold Holdings Expand at Fastest Pace Since 1964
March 18 (Bloomberg) -- Central banks added the most gold to their reserves since 1964 last year amid the longest rally in bullion prices in at least nine decades, data compiled by the World Gold Council show.

Combined holdings rose 425.4 metric tons to 30,116.9 tons, an increase worth $13.3 billion at last year’s average price, according to the data. India, Russia and China said last year they added to reserves. The expansion was the first since 1988, the data from the London-based council show.

Central banks, holding about 18 percent of all gold ever mined, are expanding their holdings for the first time in a generation as investors in exchange-traded funds amass bullion as an alternative to currencies. Holdings in the SPDR Gold Trust, the biggest ETF backed by the metal, are at 1,115.5 tons, more than the holdings of Switzerland.

“There’s clearly been a renaissance of gold in central bankers’ minds,” said Nick Moore, an analyst at Royal Bank of Scotland Group Plc in London. “It’s not just been central banks taking on gold, but a general shift for physical gold in the investment sector.”

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