....and buy more during this Black Friday Sale.
...while supplies last.
Currency Wars - Russia Officially Adds 19.5 Tonnes of Gold Reserves in October Alone
From ZeroHedge
Market participants continue to be surprised by gold’s continuing weakness and some are even questioning gold’s safe haven status. However, the fundamentals of broad based global physical demand remain very sound as evidenced by the central bank gold buying data today. Russia bought 19.5 metric tons of gold in October bringing their total gold reserves to 871.1 tons according to IMF data released today. Belarus increased holdings by 1 ton, Colombia by 1.2 tons, Kazakhstan by 3.2 tons and Mexico by 0.9 ton, the data show. Germany reduced reserves by 4.7 tons and Tajikistan cut reserves by 0.4 ton, the data show. Thus, Russia, Kazakhstan, Colombia, Belarus and Mexico added a combined 25.7 metric tons of gold to reserves in October, after gold prices corrected from record highs...Might Russia and China use gold in order to undermine U.S. political and economic dominance? There is certainly the possibility that they may use gold as a geopolitical weapon against the U.S. and as a way of furthering their growing global political and economic aspirations. Putin's endorsement in 2005 of the Russian Central Bank's plans to diversify the Russian reserves out of fiat currencies and debt instruments and into gold bullion was seen by some as as much a political act as an economic one.
Is the U.S. About to Invade Syria … and Pick a Fight with China and Russia?
by George Washington, via ZeroHedge
War in Syria: Gamble for US
by People's Daily Online
The U.S. State Department recently withdrew its ambassador in Syria Robert Ford because of serious concerns about his personal safety.
It seems that the recent changes of situations are proving that Syria will be the next Libya. Since Qaddafi was killed, the contradictions between the Untied States and Syria have been intensifying. Both countries have withdrawn their ambassadors. As the U.S. ambassador in Syria was being withdrawn, the severity of United Sates' accusations against Syria is also escalating. John McCain, a senator of the Republican Party of the United States, said that Syria is a focal point of the United States' attention and the military operation is an option for the United States.
According to the current situations faced by Syria, including the sanctions and intimidations from the United States, United Kingdom, France and other countries and the prepared Syrian rebels, it seems that Bashar al-Assad will be the next Qaddafi.
Though it may not have the same natural resources as Libya, Syria is important for its strategic geographic position. If the West launches a war in Syria, it probably will have to pay a price that is much higher than the price it had paid for the Libyan War. The war probably will even turn into a blasting fuse and lead the entire Middle East to an irremediable chaos. Therefore, it is a gamble for the West to launch a war in Syria, and it is uncertain that whether the West will win or not.
Russia Arms Syria With Missiles To Defend Against NATO Attack
By Paul Joseph Watson
We now know what those six Russian warships that reportedly entered Syrian territorial waters last week were carrying. Aside from representing a show of strength to discourage NATO powers from launching a military attack, on board were Russian technical experts ready to help Damascus set up a sophisticated missile defense system sold to them by Moscow.
“Russian warships that have reached waters off Syria in recent days were carrying, among other things, Russian technical advisors who will help the Syrians set up an array of S-300 missiles Damascus has received in recent weeks, a report in the London-based Arabic language Al Quds-Al Arabi said Thursday. Citing sources in Syria and Russia, the paper said that Moscow sees a Western attack on Syria as a “red line” that it will not tolerate,” reports Arutz Sheva.
The S-300 missiles, which according to the report will be used to “deflect a possible attack by NATO or the U.S. and EU,” are long range surface-to-air missiles developed by Russia in 1979 for the purpose of protecting large industrial and military bases from enemy attack aircraft and cruise missiles.
The system is widely regarded as one of the most powerful anti-aircraft arrays in modern warfare, having the ability to track up to 100 targets and engage 12 at any one time. Russia recently tried to sell the same system to Iran but the transaction was halted after pressure from the U.S. and Israel.
Arming Syria with such a proficient means of aerial defense would obviously not bode well for any prospective “no fly zone” being planned by western powers. Reports have been circulating this week that fighter jets from Turkey and other Arab states would soon enter Syrian airspace under “humanitarian” pretenses with logistical aid from the United States.
Does the American Government Consider Economic Rivalry to Be A Justification For War?
By
Secretary of Defense (and former CIA head) Leon Panetta may have implied last week that Brazil, Russia, India and China (the “BRIC nations” are a threat to the U.S. because they are doing well economically, while the U.S. isn’t doing so hot:
While terrorism remains a threat to national security, it is joined by cyber attacks, nuclear weapons capability and a number of rising powers among the world’s nations, Defense Secretary Leon E. Panetta said in an interview broadcast last night.
***
“We also are living in a world in which there are rising powers, countries like China and Brazil and India, not to mention obviously Russia and others, that provide a challenge to us not only in trying to cooperate with them, but making sure that they don’t undermine the stability of the world,” he added.
Panetta said his role in meeting those threats is leading the Defense Department in effective national protection.
“It’s about being in charge of the services, our men and women in uniform who have to actually go out there and do the mission,” the secretary said.
Panetta’s statement could be read to imply that the U.S. is willing to use force – i.e. “men and women in uniform … to actually go out there and do the mission”, in order to provide “effective national protection” against the BRIC’s threat to “the stability of the world” … i.e. U.S. economic dominance.
Hopefully, we are misinterpreting his comments.
But the Iraq war was really about oil, according to Alan Greenspan, John McCain, George W. Bush, Sarah Palin, a high-level National Security Council officer and others.
Former CIA director George Tenet said that the White House wanted to invade Iraq long before 9/11, and inserted “crap” in its justifications for invading Iraq. Former Treasury Secretary Paul O’Neill also says that Bush planned the Iraq war before 9/11. (The government apparently planned the Afghanistan war, and most of our current military and intelligence policy, before 9/11 as well. See this, this and this).
So the government’s stated reasons for war may not hold much water.
And Ellen Brown argues in the Asia Times that middle eastern wars in Iraq, Libya, and elsewhere stem from those countries’ leaders challenged the supremacy of the dollar and the Western banks:
Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.
What do these seven countries have in common? In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements (BIS). That evidently puts them outside the long regulatory arm of the central bankers’ central bank in Switzerland.
The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked. Kenneth Schortgen Jr, writing on Examiner.com, noted that “[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar.”
According to a Russian article titled “Bombing of Libya – Punishment for Ghaddafi for His Attempt to Refuse US Dollar”, Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar. Gaddafi suggested establishing a united African continent, with its 200 million people using this single currency.
And that brings us back to the puzzle of the Libyan central bank. In an article posted on the Market Oracle, Eric Encina observed:
One seldom mentioned fact by western politicians and media pundits: the Central Bank of Libya is 100% State Owned … Currently, the Libyan government creates its own money, the Libyan Dinar, through the facilities of its own central bank. Few can argue that Libya is a sovereign nation with its own great resources, able to sustain its own economic destiny. One major problem for globalist banking cartels is that in order to do business with Libya, they must go through the Libyan Central Bank and its national currency, a place where they have absolutely zero dominion or power-broking ability. Hence, taking down the Central Bank of Libya (CBL) may not appear in the speeches of Obama, Cameron and Sarkozy but this is certainly at the top of the globalist agenda for absorbing Libya into its hive of compliant nations.
France is pushing for a European oil embargo on Iran, breaking a diplomatic taboo that could have significant ramifications for the energy market and global economic growth, the FT reports. Paris has made the proposal to European Union members preparing a new round of sanctions following the release of a UN nuclear agency report this month. http://ftalphaville.ft.com/thecut/2011/11/24/763511/france-pushes-for-ir...
Has the euro reached a tipping point that will benefit gold and silver prices?
By: Peter Cooper, Arabian Money
What began as the eurozone sovereign debt crisis now morphs into a crisis for the euro which is devaluing against the dollar. The question for gold and silver investors is whether all this capital flow will go into the dollar and its many pegged currencies like the UAE dirham, for example, or whether a part of it will now go into the very much smaller gold and silver markets.
There is probably a tipping point for the euro:dollar rate at which money flows far more heavily into precious metals. There is good logic to this. For what is happening to the euro today could happen to the dollar, UK pound and other currencies tomorrow.
After all the same heavy debt burdens and budget deficits are weighing on the US and UK. Just as Germany was reminded yesterday the bond markets are all linked and money shifts in and out like waves on a beach.
Besides the fundamentals of huge debts point to high and not low interest rates if market forces are allowed to operate. And the central banks are losing their grip as the German bond auction illustrates.
Where do investors park their money if the entire global financial system is cracking apart under excessive debt accumulation? All the past historical examples that we have point to gold and silver as the currencies of last resort and these markets are so small that prices will go very much higher.
Zeez European politicians unt economists all zound like rocket scientists wiss all zeir charming euro-chatter. But zey must be quite dumb to machen zuch an unglaublich scheiße sturm of zee système financier. Che cazzo è?
Surely all the pretending nears its dire conclusion. Everybody is broke and everybody is in hock up to his prefrontal lobes and everybody is whirling around the drain over in the grand continental theme park of lovely cities and great eats. I'm sorry, but I don't see how they can stop the hemorrhaging as we slide into the season of holiday enchantment.
Every bank (and its uncle) is dumping everybody's sovereign bonds as though they were discovered to be croissants imported from a leper colony. Feh...! Folks of all stripes and accents desperately seek to move their money to some safe harbor - but where is this cozy mooring? To the US for the moment perhaps; but what happens Monday morning when the markets react to the weekend news that the US Senate super-committee has been utterly unable to agree on decisive action that would forestall the scheduled massive automatic budget cuts built into this red-white-and-blue doomsday machine - not to mention the ratings agencies threats to knock UST-paper down another notch upon such failure. Oy yoy yoy!
Just to be plain here: nothing is working. The global system of accounting control fraud has completely unraveled. Nobody will lend money to anybody anymore because everybody suspects everybody else is lying about their ability to meet any obligation. The whole world has become a daisy chain of schnorrers and schmiklers. All those hundreds of trillions of dollars in credit default swap insurance (ha!). Worthless and pointless, because now that a Greek default of at least 50 percent, officially, has failed to ignite a payout, then no default will. Instead, you'll just get cascades of un-hedged defaults. All the lawyers who ever lived could litigate until the sun turns into a red dwarf and they will never resolve these swindles, and the money represented in them will be so far gone that not even Ray Kurzweil in full Singularity mode will encounter a trace of it in his eternal travels through a zillion parallel universes.
So much for the hedge fund industry. I hope the folks who ran those cute operations enjoyed their years in Fairfield County, Connecticut, and Saddle River, New Jersey, because in a few weeks they'll be disguising themselves as OWSers in some makeshift urban encampment in order to line up for three-day-old bagels. Personally, I look forward to test-driving a few $5000 "must-sell" pre-owned Lamborghini Sesto Elementos, not that I'd actually buy one. The nimble might even score some bargain beachfront property in the Hamptons.
It's been about a fortnight now since John Corzine's MF Global fund went up in a vapor, including a reported $800 million or so (rumored to be actually more like $2+ billion) filched out of clients portfolios that cannot be accounted for - though there are additional rumors that it constituted a batch of collateral that was liquidated a micro-second after its arrival at JP Morgan, which had lent Corzine's firm enough money to buy the rope that it hung itself with. Notice, the story has completely disappeared from the mainstream news media (while the Kardashians soldier on).
Even poor Gerald Celente, chief of the Trends Journal forecasting group, arch-nemesis of "the white-shoe boys" got snookered in the action when MF Global somehow ended up with custodial care of the Gold ETFs Gerald was collecting and his shit just vanished! I heard him fulminating over it on a podcast and he is not somebody I'd want to be on the bad side of. Up until now, Celente was only commenting on the prospects for revolution in the streets. Now, I daresay, he'll be out in front leading it (or perhaps rappelling down Jamie Dimon's security wall with a straight razor clenched in his teeth).
The MF Global case has fast-tracked the evaporation of trust in all the places, large and small, where American One-percenters stash their cash. The redemption orders must be flying through their transoms like radioactive black swans. By lunchtime tomorrow this could include all the TBTF banks. That's what the pundits mean by "contagion." Where will that money go now (if they can get it out)?
I don't see where else it can go now except to shiny yellow and white metal, and maybe some oil positions. But the mechanisms of the precious metals trade have also been monkeyed with, and you'd best be careful where you place your order. As for oil, if lending really does seize-up, then letters-of-credit will not be issued and tankers will not be moving any product. More to the point, the global revolving debt system has depended on colossal transfers of ultra-short-term borrowed money. If short-term borrowing is simply unavailable, things could go south very quickly - and by that I mean food stops arriving at the supermarkets, which hold just a three-day supply. Wouldn't that make for an interesting Thanksgiving?
I have admittedly painted an extreme picture this week. But this week presents the most extreme convergence of events the world has seen since September of 2008, and perhaps a good bit worse.
Richard Russell last night…
November 22, 2011
At the La Jolla Rehab Center I still read 10 papers and maybe 25 magazines every week, and let's be honest. The news is so confusing that it is absolutely impossible to come to any sort of intelligible conclusion. I'm embarrassed to say that for the first time in six decades I don't really know what's going on. The Dow the last few months has traveled thousands of points and ended up nowhere -- actually as of yesterday's close the Dow and the S&P were down for the year showing net losses for all the frantic activity. My advice, is to stay with gold, some cash, and Permanent Portfolio (PRPFX). I also think silver is particularly interesting here, and I advise the purchase of 10 oz silver bars. Buy them and pile them up in your bank vault.
And that's the story from Richard Russell whose two arms and right leg are becoming ever stronger, as they must be if I'm ever going to walk again -- which I intend to do.
Pimco’s El-Erian Says U.S. Economic Setting ‘Terrifying’
By Cordell Eddings and Betty Liu
Nov. 22 (Bloomberg) -- Pacific Investment Management Co.’s Chief Executive Officer Mohamed A. El-Erian said U.S. economic conditions are “terrifying” as the nation struggles to recover from recession.
The odds of the U.S. returning to recession are as much as 50 percent, El-Erian said during an interview on Bloomberg Television’s “In the Loop” with Betty Liu. U.S. economic growth was worse than expected and congressional policy makers are gridlocked over what to do about the economy and the deficit, which risk exacerbating an already weak recovery, he said.
“We have less economic momentum than we thought we had and we have no policy momentum,” said El-Erian, who also serves as co-chief investment officer with Pimco founder Bill Gross at the world’s largest manager of bond funds.
“What’s most terrifying,” he said, “we are having this discussion about the risk of recession at a time when unemployment is already too high, at a time when a quarter of homeowners are underwater on their mortgages, at a time then the fiscal deficit is at 9 percent and at a time when interest rates are at zero.”
The economy in the U.S. expanded less than previously estimated in the third quarter, reflecting a drop in inventories that points to a pickup in growth as 2011 comes to a close.
...while supplies last.
Currency Wars - Russia Officially Adds 19.5 Tonnes of Gold Reserves in October Alone
From ZeroHedge
Market participants continue to be surprised by gold’s continuing weakness and some are even questioning gold’s safe haven status. However, the fundamentals of broad based global physical demand remain very sound as evidenced by the central bank gold buying data today. Russia bought 19.5 metric tons of gold in October bringing their total gold reserves to 871.1 tons according to IMF data released today. Belarus increased holdings by 1 ton, Colombia by 1.2 tons, Kazakhstan by 3.2 tons and Mexico by 0.9 ton, the data show. Germany reduced reserves by 4.7 tons and Tajikistan cut reserves by 0.4 ton, the data show. Thus, Russia, Kazakhstan, Colombia, Belarus and Mexico added a combined 25.7 metric tons of gold to reserves in October, after gold prices corrected from record highs...Might Russia and China use gold in order to undermine U.S. political and economic dominance? There is certainly the possibility that they may use gold as a geopolitical weapon against the U.S. and as a way of furthering their growing global political and economic aspirations. Putin's endorsement in 2005 of the Russian Central Bank's plans to diversify the Russian reserves out of fiat currencies and debt instruments and into gold bullion was seen by some as as much a political act as an economic one.
Is the U.S. About to Invade Syria … and Pick a Fight with China and Russia?
by George Washington, via ZeroHedge
War in Syria: Gamble for US
by People's Daily Online
The U.S. State Department recently withdrew its ambassador in Syria Robert Ford because of serious concerns about his personal safety.
It seems that the recent changes of situations are proving that Syria will be the next Libya. Since Qaddafi was killed, the contradictions between the Untied States and Syria have been intensifying. Both countries have withdrawn their ambassadors. As the U.S. ambassador in Syria was being withdrawn, the severity of United Sates' accusations against Syria is also escalating. John McCain, a senator of the Republican Party of the United States, said that Syria is a focal point of the United States' attention and the military operation is an option for the United States.
According to the current situations faced by Syria, including the sanctions and intimidations from the United States, United Kingdom, France and other countries and the prepared Syrian rebels, it seems that Bashar al-Assad will be the next Qaddafi.
Though it may not have the same natural resources as Libya, Syria is important for its strategic geographic position. If the West launches a war in Syria, it probably will have to pay a price that is much higher than the price it had paid for the Libyan War. The war probably will even turn into a blasting fuse and lead the entire Middle East to an irremediable chaos. Therefore, it is a gamble for the West to launch a war in Syria, and it is uncertain that whether the West will win or not.
Russia Arms Syria With Missiles To Defend Against NATO Attack
By Paul Joseph Watson
We now know what those six Russian warships that reportedly entered Syrian territorial waters last week were carrying. Aside from representing a show of strength to discourage NATO powers from launching a military attack, on board were Russian technical experts ready to help Damascus set up a sophisticated missile defense system sold to them by Moscow.
“Russian warships that have reached waters off Syria in recent days were carrying, among other things, Russian technical advisors who will help the Syrians set up an array of S-300 missiles Damascus has received in recent weeks, a report in the London-based Arabic language Al Quds-Al Arabi said Thursday. Citing sources in Syria and Russia, the paper said that Moscow sees a Western attack on Syria as a “red line” that it will not tolerate,” reports Arutz Sheva.
The S-300 missiles, which according to the report will be used to “deflect a possible attack by NATO or the U.S. and EU,” are long range surface-to-air missiles developed by Russia in 1979 for the purpose of protecting large industrial and military bases from enemy attack aircraft and cruise missiles.
The system is widely regarded as one of the most powerful anti-aircraft arrays in modern warfare, having the ability to track up to 100 targets and engage 12 at any one time. Russia recently tried to sell the same system to Iran but the transaction was halted after pressure from the U.S. and Israel.
Arming Syria with such a proficient means of aerial defense would obviously not bode well for any prospective “no fly zone” being planned by western powers. Reports have been circulating this week that fighter jets from Turkey and other Arab states would soon enter Syrian airspace under “humanitarian” pretenses with logistical aid from the United States.
Does the American Government Consider Economic Rivalry to Be A Justification For War?
By
Secretary of Defense (and former CIA head) Leon Panetta may have implied last week that Brazil, Russia, India and China (the “BRIC nations” are a threat to the U.S. because they are doing well economically, while the U.S. isn’t doing so hot:
While terrorism remains a threat to national security, it is joined by cyber attacks, nuclear weapons capability and a number of rising powers among the world’s nations, Defense Secretary Leon E. Panetta said in an interview broadcast last night.
***
“We also are living in a world in which there are rising powers, countries like China and Brazil and India, not to mention obviously Russia and others, that provide a challenge to us not only in trying to cooperate with them, but making sure that they don’t undermine the stability of the world,” he added.
Panetta said his role in meeting those threats is leading the Defense Department in effective national protection.
“It’s about being in charge of the services, our men and women in uniform who have to actually go out there and do the mission,” the secretary said.
Panetta’s statement could be read to imply that the U.S. is willing to use force – i.e. “men and women in uniform … to actually go out there and do the mission”, in order to provide “effective national protection” against the BRIC’s threat to “the stability of the world” … i.e. U.S. economic dominance.
Hopefully, we are misinterpreting his comments.
But the Iraq war was really about oil, according to Alan Greenspan, John McCain, George W. Bush, Sarah Palin, a high-level National Security Council officer and others.
Former CIA director George Tenet said that the White House wanted to invade Iraq long before 9/11, and inserted “crap” in its justifications for invading Iraq. Former Treasury Secretary Paul O’Neill also says that Bush planned the Iraq war before 9/11. (The government apparently planned the Afghanistan war, and most of our current military and intelligence policy, before 9/11 as well. See this, this and this).
So the government’s stated reasons for war may not hold much water.
And Ellen Brown argues in the Asia Times that middle eastern wars in Iraq, Libya, and elsewhere stem from those countries’ leaders challenged the supremacy of the dollar and the Western banks:
Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.
What do these seven countries have in common? In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements (BIS). That evidently puts them outside the long regulatory arm of the central bankers’ central bank in Switzerland.
The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked. Kenneth Schortgen Jr, writing on Examiner.com, noted that “[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar.”
According to a Russian article titled “Bombing of Libya – Punishment for Ghaddafi for His Attempt to Refuse US Dollar”, Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar. Gaddafi suggested establishing a united African continent, with its 200 million people using this single currency.
And that brings us back to the puzzle of the Libyan central bank. In an article posted on the Market Oracle, Eric Encina observed:
One seldom mentioned fact by western politicians and media pundits: the Central Bank of Libya is 100% State Owned … Currently, the Libyan government creates its own money, the Libyan Dinar, through the facilities of its own central bank. Few can argue that Libya is a sovereign nation with its own great resources, able to sustain its own economic destiny. One major problem for globalist banking cartels is that in order to do business with Libya, they must go through the Libyan Central Bank and its national currency, a place where they have absolutely zero dominion or power-broking ability. Hence, taking down the Central Bank of Libya (CBL) may not appear in the speeches of Obama, Cameron and Sarkozy but this is certainly at the top of the globalist agenda for absorbing Libya into its hive of compliant nations.
France is pushing for a European oil embargo on Iran, breaking a diplomatic taboo that could have significant ramifications for the energy market and global economic growth, the FT reports. Paris has made the proposal to European Union members preparing a new round of sanctions following the release of a UN nuclear agency report this month. http://ftalphaville.ft.com/thecut/2011/11/24/763511/france-pushes-for-ir...
Has the euro reached a tipping point that will benefit gold and silver prices?
By: Peter Cooper, Arabian Money
What began as the eurozone sovereign debt crisis now morphs into a crisis for the euro which is devaluing against the dollar. The question for gold and silver investors is whether all this capital flow will go into the dollar and its many pegged currencies like the UAE dirham, for example, or whether a part of it will now go into the very much smaller gold and silver markets.
There is probably a tipping point for the euro:dollar rate at which money flows far more heavily into precious metals. There is good logic to this. For what is happening to the euro today could happen to the dollar, UK pound and other currencies tomorrow.
After all the same heavy debt burdens and budget deficits are weighing on the US and UK. Just as Germany was reminded yesterday the bond markets are all linked and money shifts in and out like waves on a beach.
Besides the fundamentals of huge debts point to high and not low interest rates if market forces are allowed to operate. And the central banks are losing their grip as the German bond auction illustrates.
Where do investors park their money if the entire global financial system is cracking apart under excessive debt accumulation? All the past historical examples that we have point to gold and silver as the currencies of last resort and these markets are so small that prices will go very much higher.
The Blue Bus Is Calling US
By James Howard KunstlerZeez European politicians unt economists all zound like rocket scientists wiss all zeir charming euro-chatter. But zey must be quite dumb to machen zuch an unglaublich scheiße sturm of zee système financier. Che cazzo è?
Surely all the pretending nears its dire conclusion. Everybody is broke and everybody is in hock up to his prefrontal lobes and everybody is whirling around the drain over in the grand continental theme park of lovely cities and great eats. I'm sorry, but I don't see how they can stop the hemorrhaging as we slide into the season of holiday enchantment.
Every bank (and its uncle) is dumping everybody's sovereign bonds as though they were discovered to be croissants imported from a leper colony. Feh...! Folks of all stripes and accents desperately seek to move their money to some safe harbor - but where is this cozy mooring? To the US for the moment perhaps; but what happens Monday morning when the markets react to the weekend news that the US Senate super-committee has been utterly unable to agree on decisive action that would forestall the scheduled massive automatic budget cuts built into this red-white-and-blue doomsday machine - not to mention the ratings agencies threats to knock UST-paper down another notch upon such failure. Oy yoy yoy!
Just to be plain here: nothing is working. The global system of accounting control fraud has completely unraveled. Nobody will lend money to anybody anymore because everybody suspects everybody else is lying about their ability to meet any obligation. The whole world has become a daisy chain of schnorrers and schmiklers. All those hundreds of trillions of dollars in credit default swap insurance (ha!). Worthless and pointless, because now that a Greek default of at least 50 percent, officially, has failed to ignite a payout, then no default will. Instead, you'll just get cascades of un-hedged defaults. All the lawyers who ever lived could litigate until the sun turns into a red dwarf and they will never resolve these swindles, and the money represented in them will be so far gone that not even Ray Kurzweil in full Singularity mode will encounter a trace of it in his eternal travels through a zillion parallel universes.
So much for the hedge fund industry. I hope the folks who ran those cute operations enjoyed their years in Fairfield County, Connecticut, and Saddle River, New Jersey, because in a few weeks they'll be disguising themselves as OWSers in some makeshift urban encampment in order to line up for three-day-old bagels. Personally, I look forward to test-driving a few $5000 "must-sell" pre-owned Lamborghini Sesto Elementos, not that I'd actually buy one. The nimble might even score some bargain beachfront property in the Hamptons.
It's been about a fortnight now since John Corzine's MF Global fund went up in a vapor, including a reported $800 million or so (rumored to be actually more like $2+ billion) filched out of clients portfolios that cannot be accounted for - though there are additional rumors that it constituted a batch of collateral that was liquidated a micro-second after its arrival at JP Morgan, which had lent Corzine's firm enough money to buy the rope that it hung itself with. Notice, the story has completely disappeared from the mainstream news media (while the Kardashians soldier on).
Even poor Gerald Celente, chief of the Trends Journal forecasting group, arch-nemesis of "the white-shoe boys" got snookered in the action when MF Global somehow ended up with custodial care of the Gold ETFs Gerald was collecting and his shit just vanished! I heard him fulminating over it on a podcast and he is not somebody I'd want to be on the bad side of. Up until now, Celente was only commenting on the prospects for revolution in the streets. Now, I daresay, he'll be out in front leading it (or perhaps rappelling down Jamie Dimon's security wall with a straight razor clenched in his teeth).
The MF Global case has fast-tracked the evaporation of trust in all the places, large and small, where American One-percenters stash their cash. The redemption orders must be flying through their transoms like radioactive black swans. By lunchtime tomorrow this could include all the TBTF banks. That's what the pundits mean by "contagion." Where will that money go now (if they can get it out)?
I don't see where else it can go now except to shiny yellow and white metal, and maybe some oil positions. But the mechanisms of the precious metals trade have also been monkeyed with, and you'd best be careful where you place your order. As for oil, if lending really does seize-up, then letters-of-credit will not be issued and tankers will not be moving any product. More to the point, the global revolving debt system has depended on colossal transfers of ultra-short-term borrowed money. If short-term borrowing is simply unavailable, things could go south very quickly - and by that I mean food stops arriving at the supermarkets, which hold just a three-day supply. Wouldn't that make for an interesting Thanksgiving?
I have admittedly painted an extreme picture this week. But this week presents the most extreme convergence of events the world has seen since September of 2008, and perhaps a good bit worse.
Richard Russell last night…
November 22, 2011
At the La Jolla Rehab Center I still read 10 papers and maybe 25 magazines every week, and let's be honest. The news is so confusing that it is absolutely impossible to come to any sort of intelligible conclusion. I'm embarrassed to say that for the first time in six decades I don't really know what's going on. The Dow the last few months has traveled thousands of points and ended up nowhere -- actually as of yesterday's close the Dow and the S&P were down for the year showing net losses for all the frantic activity. My advice, is to stay with gold, some cash, and Permanent Portfolio (PRPFX). I also think silver is particularly interesting here, and I advise the purchase of 10 oz silver bars. Buy them and pile them up in your bank vault.
And that's the story from Richard Russell whose two arms and right leg are becoming ever stronger, as they must be if I'm ever going to walk again -- which I intend to do.
Pimco’s El-Erian Says U.S. Economic Setting ‘Terrifying’
By Cordell Eddings and Betty Liu
Nov. 22 (Bloomberg) -- Pacific Investment Management Co.’s Chief Executive Officer Mohamed A. El-Erian said U.S. economic conditions are “terrifying” as the nation struggles to recover from recession.
The odds of the U.S. returning to recession are as much as 50 percent, El-Erian said during an interview on Bloomberg Television’s “In the Loop” with Betty Liu. U.S. economic growth was worse than expected and congressional policy makers are gridlocked over what to do about the economy and the deficit, which risk exacerbating an already weak recovery, he said.
“We have less economic momentum than we thought we had and we have no policy momentum,” said El-Erian, who also serves as co-chief investment officer with Pimco founder Bill Gross at the world’s largest manager of bond funds.
“What’s most terrifying,” he said, “we are having this discussion about the risk of recession at a time when unemployment is already too high, at a time when a quarter of homeowners are underwater on their mortgages, at a time then the fiscal deficit is at 9 percent and at a time when interest rates are at zero.”
The economy in the U.S. expanded less than previously estimated in the third quarter, reflecting a drop in inventories that points to a pickup in growth as 2011 comes to a close.
The GLOBAL ECONOMY is related to the SILVER MOON?
ReplyDeleteLet me think about that for a " sec".
That must mean that that's the reason why TIM GEITNER and BERNANKE got into MUSSEC?
With CHUMUN?
And LA?
And if that's the case, no wonder there's so much ASOCHER and DON- KIZ.
And if that is true, there 's now great reason for YOKO ONO- STING- CROW -
BALDWIN- JAGGER- CHO- to be very ,very, nervous.
International markets are very " vulnerable" especially with ROB LOWE and DR.
BALL and TOM HANKS.
Irish are " whack".
Didn't somebody tell them?