Thursday, January 13, 2011

Successful Sale Of Bad Debt Cures All

The US Dollar is getting the ass whuppin it has long deserved today. Strangely however, the prices of the Precious Metals are taking a drubbing as well. I can smell the CRIMEX here, south of the Mason/Dixie line. What a wretched rot.

What's this? Have the CRIMEX goons gone to the well one last time in the face imminent position limits?

Gov't moves to limit speculative commodity trades
Marcy Gordon, AP Business Writer
WASHINGTON (AP) -- Federal regulators took a step Thursday to limit speculative trading of oil, food products and other commodities, responding to critics who say that has driven up consumer prices.

The Commodity Futures Trading Commission proposed limiting the volume of futures contracts that financial investors can trade for 28 commodities. The panel voted 4-1 to advance the rule, which opens it to public comment.

The restrictions are aimed at Wall Street firms and others who trade them to profit from swings in market prices. Agricultural companies, airlines and others who use futures trading to hedge against price changes would not be affected.

Lawmakers had proposed establishing limits on speculative trading of commodities as part of the financial overhaul law enacted last summer. But they left the details of the rules to regulators to sort out.

Eight senators -- seven Democrats and one Independent -- sent the regulatory commission a letter Thursday raising concerns about lobbying efforts by the financial industry aimed at watering down rules. The senators urged regulators to enact rules that place limits all traders other than those with "bona fide hedge positions."

The letter was sent on the same day that the Labor Department reported that higher oil and food costs pushed wholesale prices up last month by the biggest amount in nearly a year.

"The growing role of hedge funds, financial traders, and long-term passive investors in energy and other commodity markets has had devastating consequences for the average American," the senators wrote. "These speculators have contributed to rising volatility and periodic price spikes in the cost of gasoline and food."

Hmmm..., no mention of the US Governments debasement of the US Dollar as a factor in the rising prices of commodities? Well, I guess it's just easier to blame somebody else, than it is to look in the mirror. Funny that the legislator's focus is on the "rising costs" of energy and food prices, as completely ignore the suppression of the prices of Gold and Silver. Who are they going to blame when energy and food prices keep rising even after position limits are enacted AND enforced?

Jobless claims jump, wholesale food costs surge
By Pedro Nicolaci da Costa
(Reuters) - U.S. jobless claims jumped to their highest level since October while food and energy costs boosted producer prices, pointing lingering headwinds for an economic recovery that had been showing renewed vigor.

A surge in exports to their highest level in two years helped narrow the trade deficit, however, an encouraging sign.

Despite the more positive outlook for growth in recent weeks, the job market still appeared to be struggling.

The number of Americans filing for first-time unemployment benefits rose unexpectedly to 445,000 from 410,000 in the prior week, the Labor Department said on Thursday. It was the biggest one-week jump in about six months, confounding analyst forecasts for a small drop to 405,000.

U.S. stock index futures added to losses after the jobless claims data, while government debt prices rose.

"The jobless number highlights the patchy recovery we've seen in the job market and reinforces that it will be a slow process bringing down the jobless rate," said Omer Esiner, market analyst at Commonwealth Foreign Exchange in Washington. "The one bright spot was a further decline in the trade deficit, which should contribute positively to fourth-quarter" growth.

A Labor Department official did note the rebound in benefit claims occurred following the holidays, which may have hindered new applications and created a backlog. Without the seasonal adjustment, claims were up by nearly 200,000 to 770,413.

As last year drew to a close, food and energy costs were rising relentlessly at the wholesale level despite a tame underlying inflation trend, complicating the outlook for monetary policy.

U.S. producer prices climbed 1.1 percent in December after a 0.8 percent rise in November, according to another Labor Department report. Economists had been looking for a repeat of that 0.8 percent advance in December.

But didn't the President of these United States just tell us this past Saturday that our economy is heading in the right direction? Didn't that funny man with a beard just tell the US Senate that America has entered a "sustainable recovery"? Oh damn what was that clowns name? Pinocchio? No wait, I remember...Bumbling Ben Bernanke!

Damn, things sure look great if you don't use Energy or food products, or own a home. :-0

2011 to top 2010 record of 1 million foreclosures
After a record 1 million home foreclosures in 2010, this year is likely to be even worse
Janna Herron, AP Real Estate Writer
NEW YORK (AP) -- The bleakest year in the foreclosure crisis has only just begun.

Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and industry experts say more people will miss payments because of job losses and also loans that exceed the value of the homes they are living in.

"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year.

The blistering pace of foreclosures this year will top 2010, when a record 1 million homes were lost, RealtyTrac said Thursday.

Didn't somebody about this time last year make the claim that 2010 was going to be the "peak" in forclosures? Yeah right, and the unemployment rate rally fell from 9.8% to 9.4% last month. LOL!

There is still TOO MUCH HOPE out there in land of talking heads and financial media writers. As long as there is hope, there will not be a bottom.

Yep, things are so good in the American economy that the Dollar is being slapped around like a beach ball on the Fourth of July today. Geez, I wonder if Turbo tax Timmy Geithner's comments on the Chinese currency had any impact on the Dollar today?

Geithner warns Beijing on currency policies
Geithner says undervalued Chinese currency is increasing inflation risks in China
Martin Crutsinger, AP Economics Writer
WASHINGTON (AP) -- China's currency is substantially undervalued and Beijing is moving too slowly to fulfill its promise to let it rise, Treasury Secretary Timothy Geithner said Wednesday.

Geithner said it's in China's own interests to accelerate the pace of currency reform. He said the undervalued yuan is increasing the risk of inflation that will harm Chinese growth.

"This is not a tenable policy for China or for the world economy," Geithner said. "We believe it is in China's interests to allow the currency to appreciate more rapidly in response to market forces. And we believe that China will do so because the alternative will be too costly -- for China and for China's relations with the rest of the world."

What?! Little Timmy Geithner, who promised the WORLD that the US would NOT devalue its currency, is no lecturing the Chinese on the perils of inflation? Little Timmy fancies himself an economist, eh? I wonder if he has considered that the rapidly devaluing US Dollar is the cause of inflation in China and THE REST OF THE WORLD?

Aye, I am feeling a wee bit salty today, YES! This BS in the Precious Metals today has got me stirred up like a hornets nest. What a load of C.R.A.P.

Now this IS funny!

Here's Why The Credit Picture Isn't All Bad
From CNBC [where else do you get gnius like this?]
Consumer-credit delinquencies are on the rise again, but that doesn't mean the consumer credit picture is worsening, according to FICO CEO Mark Greene.

"We're sort of tentative and cautious," Greene said in an interview with CNBC.

"Our view at FICO is we probably have 2011 as another year of working through these issues, particularly on the housing side-the mortgage industry is the one we're most troubled by at the moment-and we are probably into 2012 before we see clear signs of recovery, so this is a period of tentative recovery at this time," Greene said.

Despite the increase in credit-card delinquencies in the third quarter, Greene expects that credit quality has been improving overall.

He explained that many people have focused on consumers with lower credit scores, many of whom have seen their credit scores worsen as job loss and a poor economy have hurt their ability to repay consumer loans.

However, FICO also has seen those with higher credit scores experience further improvement in their credit quality as they tightened their belts and paid off debt during the economic downturn.

In other words, credit scores continued to push both higher on the top and lower on the bottom.;_ylt=AqaUUbHVs8ESXhm.0vxpMLq7YWsA;_ylu=X3oDMTE1bXAzYm5hBHBvcwMzBHNlYwN0b3BTdG9yaWVzBHNsawN3aHl0aGVjcmVkaXQ-?x=0&sec=topStories&pos=main&asset=&ccode=

Um, in other words, things are rosy as a peach...if you ignore the truth. The American economy has been driven by credit for the past 50 years...without it there is no economy. The rich can't support the economy...and certainly not if you "tax the rich".

Is this a joke, or am I just having a bad dream today?

Why $4 Gas Will Cause Less Pain This Time
Rick Newman, US NEWS
When gas prices hit $4 per gallon back in the summer of 2008, America's drivers had a collective breakdown. No other single item affects the American psyche like gas prices, which are advertised on every street corner and magnified by the media every time they hit an uncomfortable threshold. No wonder car sales stalled, consumer-confidence collapsed, and some motorists even mothballed their cars, switching to buses or bicycles to get around.

Gas prices retreated during the recession, plunging all the way to $1.60 by the end of 2008--a much-needed break for consumers at a time when many other things were going wrong. But a recovering economy has once again lifted the price of gas above $3, an unusual spike during the winter months, when motorists typically drive less. With the global economy heating up--especially in oil-thirsty China--many forecasters expect oil prices to keep rising, bringing gas prices along with them.

The next gas-price spike, however, won't be quite as painful as the last one. Here's why:

Drivers have downsized.

Cars have smaller engines.

Hybrids have gathered steam.

People are driving less.

The government has mandated better mileage.

If the economy wasn't moving in the right direction, I'd swear it was because 22% of the workforce is unemployed and don't need to buy any gas, cause they have no place to go!

Here's a little propaganda busting Molotov for you Mr. Newman:

"Gas prices retreated during the recession, plunging all the way to $1.60 by the end of 2008..." Yes, they did. And the US Dollar rose to a THREE YEAR HIGH at the end of then fell HARD during the entire year of 2009...AS GAS PRICES ROSE. Gas prices fell again in the spring of 2010...and have been rising since the Fourth of July. ODDLY enough the US Dollar rose in the Spring of 2010, and has been falling since the Fourth of July. The value of the US Dollar is about 12% LESS today than it was in the Fall of 2008. THAT IS WHY GAS PRICES HAVE RISEN...and NOT because of a "recovering economy".

...and we sit here dumbfounded as the prices of Gold and Silver decline. NOTHING! Absolutely NOTHING justifies the fall in the price of Gold and Silver today.

The US Dollar is getting jack booted, soft commodities are rising [food stuffs], energy is flat, and the Precious Metals are getting beat up as if they were the Dollar. I guess this is how free markets work then, eh? Successful sales of bad debt in Europe equals superior reason to sell Gold and Silver? Apparently...

Bah, it's just another day of BS. Just another day of pouring fuel into the tanks of the rockets that are going to carry the Precious metals to heights never seen. Buy while the sale prices last.

Silver: From $30/oz to over $500 by 2020
By: Jason Hommel, Silver Stock Report
(And from $500 to $5000 by 2030!)
Silver: From $30/oz. to over $500 by 2020. In under a minute, I can tell you why that price must happen, and likely when. It seems to me that the public will one day wake up and start buying silver to protect from inflation. Thus, long before, say 10-20% of people buy silver, at least 1% of the American public will buy silver. We can calculate what might happen to the silver price when that happens.

The amount of money in US Banks is about $18 trillion. 1% of that is $180 billion.

Very little silver is left; it's mostly all been consumed, so most of what is available to buy is the annual new mine supply which is 700 million ounces.

$180 billion is $180,000 million. Divide that by 700 million, and we get an implied price of $257 per ounce. Do the math yourself. I'll wait.

But that price would mean that there is no newly mined silver left over for any industrial use, and that nobody else outside of the USA could buy any of the world's newly mined silver. Clearly that can't happen; those two groups would continue to buy silver, competing to buy, and driving up the price even more.

Thus, silver is very likely to be about $500/oz., by about the time that 1% of the American public wakes up and starts to buy silver. That will be the very beginning of the bull market in silver, when measured by "popular demand" -- and at that price, silver would still be very unpopular.

Just remember these key facts, and don't let anyone, or even yourself, trick you out of this developing bull market in silver. Don't try to time the peaks, don't wait for dips, just buy and hold real silver, not any kind of paper silver promise.

James Turk - Momentum Toward Hyperinflation is Accelerating
Eric King,
With gold and silver strengthening off of the lows, King World News interviewed James Turk out of Spain. When asked about the action and gold and silver and increasing inflation Turk stated, “So what we’re seeing here is the money being printed by central banks around the world is going to useful and valuable tangible assets. These rocketing prices are a clear warning that the momentum toward hyperinflation is accelerating.”

Turk continues:

ou have to look at the big picture here. You’ve got commodity prices up across the board, but let’s look more closely at what’s happening. Corn prices have nearly doubled since June, wheat and soy bean prices are up more than 50% since June. People can blame bad crops and bad weather, but the reality is there is too much money chasing the availability of food.

Which brings us to gold and silver, the CRB continuing commodity index is at a record high. What King World News readers need to understand is that there is a direct correlation between the CCI and gold and silver prices.

With the CCI poised to climb even higher because of the increasing attention paid to food prices being at record levels, you should understand this will translate into higher gold and silver prices going forward.

Remember, last Friday when I was talking about the black-box trend followers reversing their positions and feeding the pockets of the commercials, that’s the first half of the story. The second half of this story is that the black-box trend followers will reverse their positions once again and become buyers above $1,400 gold and $30 silver. When that buying comes in, that will be the momentum to drive both gold and silver to new highs.

Investors should continue to accumulate both gold and silver with their monthly buy programs.

Bullishness by gold traders has dropped to shockingly low levels at this point in the bull market. I would say that we will need to have an increase of almost 25% more bulls for this move in gold to crescendo.

In order for that to take place gold will have to put on one hell of a move to the upside. If the sentiment numbers turn out to be a proper guide, I would say the gold shorts are about to be butchered once again, much to the delight of hard money advocates around the globe.

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