If you read only one thing today, read this statement by GATA's Bill Murphy posted below. I never post anything in it's entirety. Today I make an exception. This statement is exceptional and should be read by any and all Gold Bugs.
Bill Murphy: The 'strong dollar' policy was gold price suppression
Address by Bill Murphy, ChairmanGold Anti-Trust Action Committee Inc.GATA Goes to Washington -- Anybody Seen Our Gold?Hyatt Regency Crystal City Hotel, Arlington, VirginiaFriday, April 18, 2008
GATA has been working for nine years to expose the manipulation of the gold market by a very cunning Gold Cartel, but one who is now on the ropes. Nonetheless, over a short period of time, they can make life very miserable for our gold/silver camp, as they did a few weeks ago with their orchestrated raid on both markets. Yet, what is so stunning, is that after all these years, the gold and investment world still doesn't get it, or "won't go there." The fact is the now heralded President's Working Group on Financial Markets met on a Monday in March and then gold was bombed for more than $100 an ounce.
Days before this takedown Treasury Secretary Paulson said, "The United States will do what it takes to calm markets," he meant it. So we got deja vu all over again. In May 2006, according to a U.S. senator, the U.S. government ordered the price of gold down after it reached $730 per ounce. That rear-guard action, as with the one of a few weeks ago, only stalled gold's inevitable advance to much higher prices. However, this constant market interference has kept the price of gold to at least half of what it would have been without the price suppression scheme. There are numerous benchmarks to make that claim, including inflation adjusted measures, gold's historic price relationship with oil, platinum, etc.
What is so astonishing to me, after all these years, is that almost no one outside of the GATA camp will come to terms with this market manipulation or even discuss it publicly in a civilized manner. The press will not even acknowledge GATA exists, despite hosting two world class gold conferences in Durban, South Africa and the Yukon's Dawson City. There was not even one financial press inquiry about GATA's $264,00 full page color ad in the Wall Street Journal.
It seems the GATA blackball began nine years when I was interviewed on CNBC by Ron Insana, for the first and last time. As soon as they heard what I had to say in GATA's behalf, that was it -- not only for CNBC, but the WSJ, the Washington Post, NY Times, Barron's, Fortune and Forbes magazine, and the rest of the US financial market press.
Early on, my colleague Chris Powell stated that it appeared we are dealing with an issue that is more sensitive than revealing the secrets about making a nuclear bomb. Perhaps so. For sure, the US financial market media is loathe to give any press time to an ad hoc group taking on the richest and most powerful people in the world. They have made a mockery of the notion we have a free US financial market press. We do not. We have a bought press.
This stifling of the gold truth has also made this conference, at the doorstep of the Fed and Treasury, a useful and timely one. Is using the term "stifling" an exaggeration? I think not.
Five months ago GATA (via Dr. Edwin Vieira, a Washington law firm, and the Freedom of Information Act) requested the US Treasury and Fed explain the true status of US gold reserves. Supposedly the US has 8300+ tonnes of unencumbered bullion in our vaults. If that is the case, it should have taken the Fed and Treasury about 5 minutes to respond to GATA's request, not 5 months, as is now the case. The fact is the Fed is withholding 137 pages from GATA, after making other redactions, is all you need to know how right we are. 137 pages+ we are not allowed to see to explain US gold reserves are all there and not encumbered in any way?
The Treasury remains silent.
There is so much I could get into after 9 years, and so little time, so I thought what might be most valuable today is to deal with what all this means; not only for those of you here who have come from all over the world, but for so many others in my country. And most importantly, to point out how YOU can benefit from knowing what the GATA camp knows.
That certainly was the case for those who came to our GATA African Gold Summit on May 10, 2001 when the price of gold had slumped to the $256 per ounce area. Reg Howe, James Turk and Frank Veneroso explained, utilizing three different methodologies, how the central banks (orchestrated by the US) were going through their available reserves to suppress the price -- as demand for physical gold was FAR greater than mine and scrap supply, as is still the case today. We knew this surreptitious flooding of central bank gold into the market was unsustainable -- that the price of gold would have to rise sharply to ration future demand.
This is just what happened. Our African conference marked the bottom of the 20 year gold bear market.
Fast forward 5 1/2 years later to our Yukon conference -- with the price of gold at $436 per ounce. Our highlight film of that conference is available at our GR 21 website. If you have not seen it, I strongly suggest you do so. At that conference numerous speakers explained what The Gold Cartel was doing and why they were going down to a defeat. Several speakers, including myself, predicted the price of gold was going to $3,000 to $5,000 per ounce -- which is no big deal when you think of it in inflation adjusted terms.
One of the delegates was Andrey Bykov, a top economic advisor to President Putin, who told me it was the finest conference he ever attended. Two days later, a quiet gold market erupted, breaking the $6 Price-Capping Rule in the process. The price went up $300 per ounce in the ensuing nine months before the US ordered the takedown, just like they did a few weeks ago.
The price of gold nearly doubled from our first conference to our second and more than doubled since Dawson City. The amount of time for the doublings was cut in half. Will this pattern continue, meaning we get $1900 gold in the next year and ½? I think so. I surely wouldn't bet against it.
The reasons are simple and will be discussed at this conference. The most important one is that The Gold Cartel is running out of available central bank gold to meet surging demand for physical gold. It is the opinion of the GATA camp that the central banks only have half the gold they say they have in their vaults -- not the commonly bandied about 30,000 tonne number, but less than 15,000 tonnes. A vast portion of what is left isn't going anywhere, so The Gold Cartel's scheme is hitting the wall. This is the main reason the rate of ascent in the price of gold is accelerating. The central banks are running out of ammo. What they have available for sale, compared to growing demand, is a fraction of what it was when they started their price suppression scheme. Surely it is a reason The Gold Cartel is begging the IMF to dump some of its gold.
No matter what others might say about GATA's claims, NO ONE has a better track record over the years predicting what the price of gold would do and why, starting at the bottom of the market. We have never wavered. You would think others might be more curious to know how GATA could get this move so right and most of the gold analysts on Planet Wall Street got it so wrong all this time. Heck, you only have to go back to Barrick and AngloGold's hedging below $300 to know how wrong most of them have been. Funny thing is, they still don't get it. At present, most of the mainstream pundits/analysts are neutral to bearish at these price levels.
The bottom line for me is that anyone who doesn't understand, or deal with, the gold price suppression scheme, doesn't understand the key to the gold market. Therefore, it is impossible for them to do any kind of effective gold market analysis. AND, they don't realize how this perverted scheme has led to the growing financial market crises in the US.
Cutting to that chase, the gold price suppression scheme was the cornerstone of Secretary Treasury Robert Rubin's "strong dollar" policy.
What else was this policy all about, outside of rhetoric? No one over the years has been able to explain this policy to me. Having a policy means doing something and we know what that doing was, and is.
Reg and James can do this more justice, but there is a historic relationship between the price of gold and interest rates -- called Gibson's Paradox, acknowledged by no less a Gold Cartel figure than former US Treasury Secretary, Lawrence Summers. By suppressing the gold price, the US wanted to keep US interest rates lower than they normally would be, keep the dollar stronger, and enhance our stock market -- real estate too.
Simply put, had the price of gold been allowed to trade freely, like oil, the price would already be double what it is today. US interest rates would have been much higher in years past. Thus, the Fed would not have been able to take our Fed Funds rate down to where it was, and is. Therefore, to some degree, a free gold price would have curtailed a fair amount of the US mortgage/housing fiasco and prevented much of the Moral Hazard issues of the day.
This notion is very easy to comprehend. What is the talk from those who live on what I call Planet Wall Street when the price of gold is soaring? It is about INFLATION, CRISIS, or DOLLAR COLLAPSE. None of it is positive for US interest rates, our economy, or financial market for those in the Planet Wall Street crowd. The suppression of the gold price suppresses that line of media chatter.
That is the essence of what you need to know about "the why" of the price suppression scheme. In my opinion it was the lynchpin operation leading to the systemic financial market crises of the day.
We all know how one bad habit can lead to yet another. The recently highly touted Working Group on Financial Markets, the Counterparty Risk Management Group, Exchange Stabilization Fund, and The Gold Cartel went from active management of the gold price to an ever present role in manipulating the stock market, and upping the heralded Moral Hazard problem even further.
This propping up of the stock market kicked into high gear after 9/11. I suspect those doing the constant stock market rigging initially used the national security issue as justification for their interference in the free market process. The problem is this now constant interference is gradually leading to the destruction of our free markets.
As the US real estate bubble grew, Americans were led to believe real estate prices would go up forever: that they could refinance their mortgages to raise cash and go on a spending binge, thereby enjoying a much enhanced lifestyle -- leading to, in many cases, a temporary feel good illusion. Many of us in the Planet GATA camp have a pretty good idea where that illusion is taking us: an escalating disaster.
What most Americans don't realize is that the US stock market is a bit of an illusion too. It just doesn't trade like a free market. Every time the market is about to fall apart, it miraculously turns around. Planet GATA stock market watchers know all too well about the Plunge Protection Team's patented last hour Hail Mary play -- in which the DOW rallies hundreds of points for no apparent reason.
The point here is that these market managers have upped the Moral Hazard ante with their antics. They have taken away the "fear scenario" pertaining to our markets -- why worry, investors think, since "the market always comes back." Thus, the Orwellians in New York and Washington have lulled to sleep the average investor about the downside risk of the markets and potential capital loss. Just as gold is a key financial market barometer, so is the DOW. How many times have we heard the past months how well the DOW was acting despite horrendous economic news? The market managers in New York and Washington know the negative impact a reeling DOW would have on the sentiment and psyche of the average American. Thus, the PPT manages the DOW to manage "expectations."
So they prop the DOW up to foster the notion that everything is fine. For years I have compared this to a Stepfordville, or Matrix, way of thinking/operating. The problem is we are not talking about the movies here. It is our well being and status of our future existence.
It is a main reason we are having this conference in Washington -- to expose the manipulation of the gold market, managing of other financial markets, and also to focus on the distortion of US economic stats, which has led us further and further away from our true underlying economic reality.
This is not the first time GATA has come to Washington to expose the truth. It is ironic that GATA is seen as anti-establishment because we have gone the establishment route to make our findings known in Washington.
-- In addition to our Wall Street Journal ad, we have taken out full-page ads in Washington's Roll Call.
-- Met with U.S. Rep. James Saxton, vice chairman of the House Joint Economic Committee.
-- House Speaker Denny Hastert.
-- The vice-chairman of the sub-Committee on Domestic and International Monetary Policy, U.S. Rep. Spencer Bachus of Alabama.
-- Gone to Austin, Texas, the state capital to meet with two of President's Bush's boyhood friends from Midland, Texas. One, Tom Craddick, is the speaker of the Texas House. He sent a two-page executive summary of GATA's findings to President's Bush's private fax, the day after I met him. I received a postmarked letter that same day from the President's economic advisor at the time, Larry Lindsay.
-- The GATA Army has sent thousands of letters to various Congressman over the years. One prompted Kentucky Sen. Jim Bunning, the Hall of Fame baseball pitcher, to query Fed Chairman Greenspan to clarify legal counsel Virgil Mattingly's use of the term "gold swaps," which GATA found in prior Fed minutes.
Mattingly replied: "I have no knowledge of any 'gold swaps' by either the Federal Reserve or the ESF. I believe that my remarks, which were intended as a general description of the authority possessed by the secretary of the Treasury to utilize the ESF, were transcribed inaccurately or otherwise became garbled."
Fed minutes garbled? RIGHT!
So, here we are again -- back in Washington -- going the establishment route again and in the American way.
And this conference could not have come at a more opportune time. GATA has long pointed to Goldman Sachs and JP Morgan as The Gold Cartel's hit men -- with Goldman acting for the Treasury and Morgan for the Fed. To appreciate how incestuous these relationships are, we only need go the instantaneous JP Morgan/Fed bailout of Bear Stearns. It is universally accepted that this swift, precedent setting deal was arranged to prevent a systemic US financial market collapse.
But, by doing so, the aptly named Working Group on Financial Markets upped the Moral Hazard/Greenspan put ante once again. Out of nowhere the Bear Stearns shareholders were mostly wiped out -- in part due to the consequences of the market rigging, Market Hazard issue, perhaps a FIRST of many other unintended consequences of the US market manipulation. As our free market process is further interfered with, one day it might lead to 25 Bear Stearns, kicking in one after another -- perhaps due to a derivatives neutron bomb going off. Chaos could reign. The average American won't know what hit him, as life savings go down the drain.
More on that later in the conference.
We are also here to better understand how to profit from the mess the market managers created. In my opinion the best way to do that is to build a conviction the GATA camp knows what we are talking about. This is just what occurred after our other two conferences.
Fortunes have been made and there are more fortunes to come. The price of gold has gone up 3 to 4 times since our first conference. Silver went up around 5 times. If a number in our camp are correct, those prices will go up 3 to 5 times again from present levels. There is a great deal of money on the table here -- money that most on Planet Wall Street don't want you to know anything about. Because of them, the investing public is totally clueless about the gold/silver investment opportunities that have been, and are, clear as can be.
I hope you enjoy this conference as much as I have enjoyed the other two, and that this one will be just as meaningful for you. My GATA experience has been the most fulfilling of my life, as my GATA journey has been a Triple Ph.D. learning experience about the gold market, as well as to how our US financial system is really operating. This new found knowledge is very empowering and I am extremely grateful for this fascinating education.* * *
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Original Post: http://gata.org/node/6251
Wednesday, April 23, 2008
Tuesday, April 22, 2008
FOOD FIGHT!
Stocks Sink on Earnings, Oil- AP
Wall Street pulled back Tuesday as investors appeared largely unimpressed by a rush of quarterly results from bellwethers like AT&T Corp., DuPont and McDonald's Corp. Oil prices also touched fresh highs, raising some concerns about inflation.
Wall Street pulled back Tuesday as investors appeared largely unimpressed by a rush of quarterly results from bellwethers like AT&T Corp., DuPont and McDonald's Corp. Oil prices also touched fresh highs, raising some concerns about inflation.
Raising some concerns about inflation? News bites like the one attached to the headline above from YahooFinance is why America is doomed, and this Fall's Presidential Election is going to be the mother of all farces. HIGH OIL PRICES DO NOT CAUSE INFLATION! HIGH OIL PRICES ARE CAUSED BY INFLATION! Tell everybody you know this fact. If the argue or disbelieve you, tell them again. The price of Oil is $119 a barrel because the US Dollar is all but worthless, pure and simple.
Some concerns about inflation? Just some? Inflation should be this country's NUMBER ONE concern, 24/7. The inflation that this country has in store for it, not to mention the entire world, is most likely going to cause the biggest period of social unrest in this country since Civil Rights and Vietnam War riots of the 60's. It may cause pandemonium around the globe. Check that, the freight train of inflation barreling down on this country, gathering speed by the day, is going to cause the biggest social uprising these shores has ever witnessed. The Government and the Media are already at work trying to convince us that the blame belongs on "big oil" and OPEC. No, the blame belongs unequivocally with the irresponsible monetary policy of the US Government and it's political pawn the US Federal Reserve.
Food Rationing Confronts Breadbasket of the World
MOUNTAIN VIEW, Calif. — Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing. Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.
At a Costco Warehouse in Mountain View, Calif., yesterday, shoppers grew frustrated and occasionally uttered expletives as they searched in vain for the large sacks of rice they usually buy.
"Where's the rice?" an engineer from Palo Alto, Calif., Yajun Liu, said. "You should be able to buy something like rice. This is ridiculous."
ECB increased holdings of Japanese yen in 2007
FRANKFURT, April 21 (Reuters) - The European Central Bank said it favoured Japanese yen over U.S. dollars when it used the proceeds of gold sales to boost its foreign currency reserves in 2007.
Dollar Drop Slows With G-7 Blessing; Shows No Endgame
April 21 (Bloomberg) -- Traders betting on intervention by the Group of Seven nations to stem the dollar's 9 percent decline against the euro this year may be disappointed.
``It's not about levels but the volatility,'' said Geoffrey Yu, a foreign-exchange strategist in Zurich at UBS. ``If the dollar drops in a gradual fashion, they are unlikely to act. There's not really a meeting of minds as to when intervention is needed.''
A stronger euro benefits Europe by helping to temper inflation. Maintaining price stability is ``of paramount importance,'' European Central Bank President Jean-Claude Trichet said in Frankfurt on April 15. Inflation in the 15-nation euro region accelerated to 3.6 percent last month, the fastest in almost 16 years.
ECB policy makers will have to ``tolerate a stronger euro'' or raise interest rates if they want to bring inflation down, said Thomas Mayer, the London-based chief European economist at Deutsche Bank.
Commercial Banks Heading for Huge Derivatives Losses- Credit Crisis Turning into Credit Armageddon
While most investors are focused on the latest stock market rally, hidden from view is a monumental change that few recognize and fewer understand: Unprecedented amounts of old debts are coming due in America, and many are not getting refinanced.
This is not a mere “slowdown” in new lending, which would be relatively routine. This is an actual reduction in the short-term loans outstanding, which is anything but routine ... which implies a rupture in the nation's credit spigots ... and which could deliver a new shock to the U.S. economy.
If this represented a planned and voluntary effort by lenders to begin trimming America's debt excesses, it might actually be a good thing.
But that's not the case here, not even close. Rather, this debt reduction is almost exclusively forced on lenders by the pressure of events — the plunging value of mortgages, the surging defaults by debtors, and the huge losses that have caught both banks and regulators off guard.
The trillion-dollar mortgage time bomb
Risks are rising that Fannie Mae and Freddie Mac may need a government bailout that could cost far more than previous rescues.
Risks are rising that Fannie Mae and Freddie Mac may need a government bailout that could cost far more than previous rescues.
NEW YORK (CNNMoney.com) -- Among the nightmares lurking around the corner for the already battered housing and credit markets would be a meltdown at mortgage financing giants Fannie Mae and Freddie Mac.
Although few are predicting an imminent need for a bailout just yet, credit rating agency Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money.
Monday, April 21, 2008
Another Day, Another Dead Dollar
Thought For The Day
On Friday, Citibank posts a $5.1 BILLION loss, but it's not as bad as expected and the stock market goes up 200+points.
This morning, Bank of America posts a $1.23 BILLION profit but its 18 cents a share worse than expected and the stock market is down to flat.
So, it's better to buy stocks in companies that lose money but do better than the experts predict, than to buy companies that make money and do worse than the experts predict. Hmmm, what would Warren Buffet do?
Another bizarre day for the Precious Metals: The Dollar gives back 2/3 of it's gains from Friday, Oil hits ANOTHER record high above 117 and Gold is flat and Silver gets taken to the woodshed?
I think a key factor in the short term is the Euro. Traders are absolutely reluctant to take it through the 1.60 level. To date, as soon as the Euro clears 1.5950 the bids disappear, the Dollar catches a bid and the Precious Metals get sold. It's all very mechanical, and somewhat amusing. The G7 is powerless to stop the fall of the Dollar. Their jawboning may slow it's decent for a few days, but it will do nothing to save it from it's demise. The Bull in any market is going to do the best it can to throw as many off it's back as it can. 953 Gold and 18.50 Silver remain our breakout targets. A move thru 1.60 in the Euro could set off a cascade of events in these markets that will be a wonder to behold.
The May Silver contract is in the process of being rolled into July this week and could keep a cap on Silver until late in the week. Gold is presently at the mercy of the timid Euro traders. Today's move higher in Oil should have had the Gold Bulls squeezing the COMEX shorts without mercy. Irrational behavior to be sure, but who ever said the Precious Metal markets, or any market, are supposed to act rationally?
Bob Chapman, The International Forecaster
What everyone keeps forgetting is that bond prices are at 50-year highs due to plummeting rates of interest that are destroying the dollar. If the Fed keeps lowering rates, speculation and inflation will get worse, and gold will soar. But if they start to stabilize rates, or to raise them to support the dollar, bond principal will get cremated and a goodly portion of those many trillions of dollars in bonds will flee in terror and find their way to precious metals as a safe-haven and inflation hedge.
http://news.goldseek.com/InternationalForecaster/1208412540.php
USDOLLAR REBOUNDING… NOT !!!
The USDollar has been trying to rebound for a month. With growing federal deficits, widening trade deficits, an underwater banking capital core, and rising homeowner negative equity, the US financial fundamentals resemble a banana republic on four primary pillars, unworthy of any currency rebound. Look for a breakdown to 70 and below in the next several weeks. The downtrend is stronger than any newly formed basis for a bottom bounce. The impact on gold will be to send it over the 1000 level again, this time as floor support for the summer advances. The next USFed rate cut could be the impetus. A game of chicken is being played by the Euro Central Bank, which refused to cut rates since last summer.
-Jim Willie CB
http://news.goldseek.com/GoldenJackass/1208358000.php
There are no markets anymore, just interventions
What other agency of a democratic government could get away with the principle that was articulated on national television in 1994 by the vice chairman of the Federal Reserve, Alan Blinder? Blinder declared: "The last duty of a central banker is to tell the public the truth."
http://news.goldseek.com/GATA/1208711352.php
40 Years of Inflation, 80 Years of Dow/Gold
IF WALL STREET STOCKS can surge 160 points on falling earnings, an 11% drop in housing starts, and a 16-year record for consumer-price inflation, then so can everything else that doesn't carry a picture of George Washington.
http://news.goldseek.com/GoldSeek/1208357744.php
On Friday, Citibank posts a $5.1 BILLION loss, but it's not as bad as expected and the stock market goes up 200+points.
This morning, Bank of America posts a $1.23 BILLION profit but its 18 cents a share worse than expected and the stock market is down to flat.
So, it's better to buy stocks in companies that lose money but do better than the experts predict, than to buy companies that make money and do worse than the experts predict. Hmmm, what would Warren Buffet do?
Another bizarre day for the Precious Metals: The Dollar gives back 2/3 of it's gains from Friday, Oil hits ANOTHER record high above 117 and Gold is flat and Silver gets taken to the woodshed?
I think a key factor in the short term is the Euro. Traders are absolutely reluctant to take it through the 1.60 level. To date, as soon as the Euro clears 1.5950 the bids disappear, the Dollar catches a bid and the Precious Metals get sold. It's all very mechanical, and somewhat amusing. The G7 is powerless to stop the fall of the Dollar. Their jawboning may slow it's decent for a few days, but it will do nothing to save it from it's demise. The Bull in any market is going to do the best it can to throw as many off it's back as it can. 953 Gold and 18.50 Silver remain our breakout targets. A move thru 1.60 in the Euro could set off a cascade of events in these markets that will be a wonder to behold.
The May Silver contract is in the process of being rolled into July this week and could keep a cap on Silver until late in the week. Gold is presently at the mercy of the timid Euro traders. Today's move higher in Oil should have had the Gold Bulls squeezing the COMEX shorts without mercy. Irrational behavior to be sure, but who ever said the Precious Metal markets, or any market, are supposed to act rationally?
Bob Chapman, The International Forecaster
What everyone keeps forgetting is that bond prices are at 50-year highs due to plummeting rates of interest that are destroying the dollar. If the Fed keeps lowering rates, speculation and inflation will get worse, and gold will soar. But if they start to stabilize rates, or to raise them to support the dollar, bond principal will get cremated and a goodly portion of those many trillions of dollars in bonds will flee in terror and find their way to precious metals as a safe-haven and inflation hedge.
http://news.goldseek.com/InternationalForecaster/1208412540.php
USDOLLAR REBOUNDING… NOT !!!
The USDollar has been trying to rebound for a month. With growing federal deficits, widening trade deficits, an underwater banking capital core, and rising homeowner negative equity, the US financial fundamentals resemble a banana republic on four primary pillars, unworthy of any currency rebound. Look for a breakdown to 70 and below in the next several weeks. The downtrend is stronger than any newly formed basis for a bottom bounce. The impact on gold will be to send it over the 1000 level again, this time as floor support for the summer advances. The next USFed rate cut could be the impetus. A game of chicken is being played by the Euro Central Bank, which refused to cut rates since last summer.
-Jim Willie CB
http://news.goldseek.com/GoldenJackass/1208358000.php
There are no markets anymore, just interventions
What other agency of a democratic government could get away with the principle that was articulated on national television in 1994 by the vice chairman of the Federal Reserve, Alan Blinder? Blinder declared: "The last duty of a central banker is to tell the public the truth."
http://news.goldseek.com/GATA/1208711352.php
40 Years of Inflation, 80 Years of Dow/Gold
IF WALL STREET STOCKS can surge 160 points on falling earnings, an 11% drop in housing starts, and a 16-year record for consumer-price inflation, then so can everything else that doesn't carry a picture of George Washington.
http://news.goldseek.com/GoldSeek/1208357744.php
Sunday, April 20, 2008
Rudderless On A Sea Of Debt
Gold is up $4.30 and rising this evening, Sunday April 20, 8PM. The Asians thanking the dumb Americans and their Western pals for dumping it this past Friday.
"Gold is on sale." "The Dollar is up, sell now and cut your losses before it bellies up again," Asian traders were over heard cajoling with one another as they steal America's wealth.
The day is not that far off when Asia will own America. Conquering her without firing a single shot. American Dollars represent one thing and ONE THING ONLY...DEBT. It says so right on the money: This note is legal tender for all debts, public and private. For the past 37 years Americans have duped the rest of the world into believing that her Dollars represented wealth. When in fact they represent an unfathomable mountain of I.O.U.s. American debt equals 340% of her annual GDP. THREE HUNDRED AND FORTY PERCENT! What's gonna happen when the Asians call in their share that debt?
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
http://www.treas.gov/tic/mfh.txt
America is drowning in debt. US Government debt is in excess of $9 TRILLION...about $30,000 for each man, woman, and child in the country. The US debt is growing at light speed—$1.4 billion a day or $1 million a minute. Sadly our "leaders" and "would be leaders" [it's a stretch to even use the word "leader" and "politician" in the same sentence.] simply accept this overwhelming burden as a "fact of life". It is criminal what America's Government has done to her people. The burden we as a nation will be forced to bear for untold generations to come cannot yet be put into words. And yet few stand up and call these "leaders" out on the carpet, demanding to know why our nation's wealth has been irretrievably squandered.
But then that would be a bit like the pot calling the kettle black. American consumers possess a rather gargantuan mountain of debt themselves. $2.48 TRILLION of consumer credit debt. Credit card debt alone has hit a record $915 BILLION. There is $900 BILLION of sub prime debt blowing up right now. The $915 BILLION of credit card debt is not only jaw dropping, but it is held at interest rates 3-5 times higher than the sub prime debt. Imagine when this little debt bomb blows up... Who said the American bank's self made credit crisis has passed? LOL, this crisis has barely gotten out of the gate.
Not to worry, the US Government in it's never ending infinite wisdom, has arranged a special deal with the counterfeiters at the US Treasury that will surely fix EVERYTHING. In just a couple of weeks mailboxes across the nation will be opened to the wonders of wonders...FREE MONEY! Who ever said money doesn't grow on trees was absolutely right. It grows in mailboxes!
A $600 BILLION cash stimulus is being doled out to Americans that are $2.48 TRILLION in debt. The handout won't even cover 2/3 of the nation's credit card debt. And heaven forbid you use this free money to pay off debt. The money comes with explicit instructions as to your civic responsibility, and in the name of patriotism, to spend that money like a drunken sailor on shore leave. Spend it frivolously, and save your economy and way of life...even if the real effect of $600 BILLION on the American economy would be akin to pissing into the wind. Seriously, our great leaders have gone to great length to convince our nation of sheep that all of the country's financial ills can be cured with the grand sum of $600 BILLION.
$600 BILLION is less than 25% of $2.48 TRILLION. $600 BILLION is less than 7% of $9 TRILLION. $600 BILLION is chump change and it isn't going to fix a damn thing. My $600 cut of the $600 BILLION pie won't even cover my annual expense on beer. [Beer prices have gotten way out of hand.] Not only is the money chump change, it's not really even free. It's an advance on next year's tax rebate. Which leads one to wonder, "If you lose your job and don't make any money this year to earn a tax rebate next year, do you have to pay the advance back next year?"
Damn, great country innit?
Hey would somebody PLEASE explain to Barrak Bin Laden that imposing "windfall profit taxes" on the Oil Industry will not solve a damn thing. Explain to this Oprah Winfrey puppet, and leader wannabe, that the high price of gasoline is NOT because of EXXON gouging people at the gas pumps. The high price of Oil, and in turn gasoline, is the direct result of the US Federal Reserve and the US Treasury debasing the US Dollar. Tell Mr. I Don't Know Jack About The World Financial System that monetary inflation is driving the price of Oil and all commodities higher. Clue this clueless clown into the fact that inflation is a tax on ALL Americans, rich and poor. Barrak buddy, you wanna see some real high gasoline prices, and maybe some gas lines at the pumps? Slap a windfall profit tax on the Oil companies. You'll wish your momma never wished you grew up to be President. And please share this truth about Oil and Inflation with the others coveting the White House. None of you is worthy of the office...there is not a thread of leadership among the lot of you.
Please pardon my rant this evening, I just had to get some of this stuff out of my head.
This past Friday. Call it what you will, currency intervention, Gold Cartel take down, or just plain bullshit...it really was/is just noise. Inflation is only just now beginning to be noticed and squawked about by the financial media. Remember that the effects of Fed interest rate cuts are usually not felt until 6-9 months after the cut. The Fed began cutting interest rates in September 2007, a 1/2 point cut. Recent inflation data is thru March 2008...6 months down the road from that first rate cut. Bear in mind that when we are told about the "effects" of Fed rate cuts, the effect most often referred to is "growth in the economy". To date we have seen little in the way of growth, but a lot in the way of inflation. March 2008 is six months from the FIRST Fed rate cut....and Inflation is just now starting to get peoples attention and we only have the "effect" of a 1/2 point cut. The Fed's most recent rate cut was one month ago, 3/4 of a point. Since September 2007 the Fed has cumulatively cut rates by three points thru the cut in March 2008. Imagine now, what the potential for inflation will be by September 2008. Stop choking, and just think of how bad inflation may be six months from now. Oh, the pain... Inflation will dominate the headlines as the country goes to the polls in November. Sadly, none of the choices we'll be offered will have an answer for why inflation is so high. ALL will tell you it's because the price of Oil is too high and Exxon must be made to pay for our pain. We will know differently. And we will all be sitting fat in our Gold and Silver positions having weathered the noise of March and April, and all attempts to take our Precious Metals to come. It can't be emphasised enough. Investing in Gold is a marathon, not a sprint. Riches will find their way to those that are right, and sit tight. Focus on Inflation. As the Inflation numbers rise through the Spring and Summer, so too will the level of investment in Gold and Silver. The Rush to Gold is fast approaching.
__________________________________
News you can use:
Goldman Sachs and Wells Fargo warn 'delusional' investors on stocks
David Kostin, the chief US investment guru for Goldman Sachs, expects the S&P 500 index of Wall Street equities to plummet a further 15pc over the "near term" as companies scramble to lower their outlook for this year.
Scott Anderson, chief economist at Wells Fargo, is equally pessimistic, describing the bullish views of some market players as "bordering on delusional".
http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/04/14/bcngold114.xml
Banks in line for £40bn bail-out - paid for by the taxpayer
Rescue: The Bank England has been asked to take mortgages off banks' books
Vince Cable, the LibDem Treasury spokesman, said: "We cannot have a situation where the banks are able to privatise their profits and nationalise their losses.
"The Government must now insist on a orderly programme for identifying the losses in the banking system to ensure the banks themselves cover those losses.
"This looks like rewards for failure and irresponsibility."
http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=559973&in_page_id=1770
Citigroup May Need to Sell Assets to Bolster Capital
April 19 (Bloomberg) -- Citigroup Inc. shareholders, cheered by a $5.1 billion first-quarter loss that wasn't as big as some analysts forecast, face growing concern that the bank may have to sell assets, reduce the dividend and attract outside investment to bolster capital.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aElaUvS1sxzw&refer=us
Talking heads cheer Citicorp’s earnings because Citicorp lost less than predicted by the Street, declaring now that the OTC derivative problem is over. Talk about world class BS!
-jim sinclair
"Gold is on sale." "The Dollar is up, sell now and cut your losses before it bellies up again," Asian traders were over heard cajoling with one another as they steal America's wealth.
The day is not that far off when Asia will own America. Conquering her without firing a single shot. American Dollars represent one thing and ONE THING ONLY...DEBT. It says so right on the money: This note is legal tender for all debts, public and private. For the past 37 years Americans have duped the rest of the world into believing that her Dollars represented wealth. When in fact they represent an unfathomable mountain of I.O.U.s. American debt equals 340% of her annual GDP. THREE HUNDRED AND FORTY PERCENT! What's gonna happen when the Asians call in their share that debt?
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
http://www.treas.gov/tic/mfh.txt
America is drowning in debt. US Government debt is in excess of $9 TRILLION...about $30,000 for each man, woman, and child in the country. The US debt is growing at light speed—$1.4 billion a day or $1 million a minute. Sadly our "leaders" and "would be leaders" [it's a stretch to even use the word "leader" and "politician" in the same sentence.] simply accept this overwhelming burden as a "fact of life". It is criminal what America's Government has done to her people. The burden we as a nation will be forced to bear for untold generations to come cannot yet be put into words. And yet few stand up and call these "leaders" out on the carpet, demanding to know why our nation's wealth has been irretrievably squandered.
But then that would be a bit like the pot calling the kettle black. American consumers possess a rather gargantuan mountain of debt themselves. $2.48 TRILLION of consumer credit debt. Credit card debt alone has hit a record $915 BILLION. There is $900 BILLION of sub prime debt blowing up right now. The $915 BILLION of credit card debt is not only jaw dropping, but it is held at interest rates 3-5 times higher than the sub prime debt. Imagine when this little debt bomb blows up... Who said the American bank's self made credit crisis has passed? LOL, this crisis has barely gotten out of the gate.
Not to worry, the US Government in it's never ending infinite wisdom, has arranged a special deal with the counterfeiters at the US Treasury that will surely fix EVERYTHING. In just a couple of weeks mailboxes across the nation will be opened to the wonders of wonders...FREE MONEY! Who ever said money doesn't grow on trees was absolutely right. It grows in mailboxes!
A $600 BILLION cash stimulus is being doled out to Americans that are $2.48 TRILLION in debt. The handout won't even cover 2/3 of the nation's credit card debt. And heaven forbid you use this free money to pay off debt. The money comes with explicit instructions as to your civic responsibility, and in the name of patriotism, to spend that money like a drunken sailor on shore leave. Spend it frivolously, and save your economy and way of life...even if the real effect of $600 BILLION on the American economy would be akin to pissing into the wind. Seriously, our great leaders have gone to great length to convince our nation of sheep that all of the country's financial ills can be cured with the grand sum of $600 BILLION.
$600 BILLION is less than 25% of $2.48 TRILLION. $600 BILLION is less than 7% of $9 TRILLION. $600 BILLION is chump change and it isn't going to fix a damn thing. My $600 cut of the $600 BILLION pie won't even cover my annual expense on beer. [Beer prices have gotten way out of hand.] Not only is the money chump change, it's not really even free. It's an advance on next year's tax rebate. Which leads one to wonder, "If you lose your job and don't make any money this year to earn a tax rebate next year, do you have to pay the advance back next year?"
Damn, great country innit?
Hey would somebody PLEASE explain to Barrak Bin Laden that imposing "windfall profit taxes" on the Oil Industry will not solve a damn thing. Explain to this Oprah Winfrey puppet, and leader wannabe, that the high price of gasoline is NOT because of EXXON gouging people at the gas pumps. The high price of Oil, and in turn gasoline, is the direct result of the US Federal Reserve and the US Treasury debasing the US Dollar. Tell Mr. I Don't Know Jack About The World Financial System that monetary inflation is driving the price of Oil and all commodities higher. Clue this clueless clown into the fact that inflation is a tax on ALL Americans, rich and poor. Barrak buddy, you wanna see some real high gasoline prices, and maybe some gas lines at the pumps? Slap a windfall profit tax on the Oil companies. You'll wish your momma never wished you grew up to be President. And please share this truth about Oil and Inflation with the others coveting the White House. None of you is worthy of the office...there is not a thread of leadership among the lot of you.
Please pardon my rant this evening, I just had to get some of this stuff out of my head.
This past Friday. Call it what you will, currency intervention, Gold Cartel take down, or just plain bullshit...it really was/is just noise. Inflation is only just now beginning to be noticed and squawked about by the financial media. Remember that the effects of Fed interest rate cuts are usually not felt until 6-9 months after the cut. The Fed began cutting interest rates in September 2007, a 1/2 point cut. Recent inflation data is thru March 2008...6 months down the road from that first rate cut. Bear in mind that when we are told about the "effects" of Fed rate cuts, the effect most often referred to is "growth in the economy". To date we have seen little in the way of growth, but a lot in the way of inflation. March 2008 is six months from the FIRST Fed rate cut....and Inflation is just now starting to get peoples attention and we only have the "effect" of a 1/2 point cut. The Fed's most recent rate cut was one month ago, 3/4 of a point. Since September 2007 the Fed has cumulatively cut rates by three points thru the cut in March 2008. Imagine now, what the potential for inflation will be by September 2008. Stop choking, and just think of how bad inflation may be six months from now. Oh, the pain... Inflation will dominate the headlines as the country goes to the polls in November. Sadly, none of the choices we'll be offered will have an answer for why inflation is so high. ALL will tell you it's because the price of Oil is too high and Exxon must be made to pay for our pain. We will know differently. And we will all be sitting fat in our Gold and Silver positions having weathered the noise of March and April, and all attempts to take our Precious Metals to come. It can't be emphasised enough. Investing in Gold is a marathon, not a sprint. Riches will find their way to those that are right, and sit tight. Focus on Inflation. As the Inflation numbers rise through the Spring and Summer, so too will the level of investment in Gold and Silver. The Rush to Gold is fast approaching.
__________________________________
News you can use:
Goldman Sachs and Wells Fargo warn 'delusional' investors on stocks
David Kostin, the chief US investment guru for Goldman Sachs, expects the S&P 500 index of Wall Street equities to plummet a further 15pc over the "near term" as companies scramble to lower their outlook for this year.
Scott Anderson, chief economist at Wells Fargo, is equally pessimistic, describing the bullish views of some market players as "bordering on delusional".
http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/04/14/bcngold114.xml
Banks in line for £40bn bail-out - paid for by the taxpayer
Rescue: The Bank England has been asked to take mortgages off banks' books
Vince Cable, the LibDem Treasury spokesman, said: "We cannot have a situation where the banks are able to privatise their profits and nationalise their losses.
"The Government must now insist on a orderly programme for identifying the losses in the banking system to ensure the banks themselves cover those losses.
"This looks like rewards for failure and irresponsibility."
http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=559973&in_page_id=1770
Citigroup May Need to Sell Assets to Bolster Capital
April 19 (Bloomberg) -- Citigroup Inc. shareholders, cheered by a $5.1 billion first-quarter loss that wasn't as big as some analysts forecast, face growing concern that the bank may have to sell assets, reduce the dividend and attract outside investment to bolster capital.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aElaUvS1sxzw&refer=us
Talking heads cheer Citicorp’s earnings because Citicorp lost less than predicted by the Street, declaring now that the OTC derivative problem is over. Talk about world class BS!
-jim sinclair
Wednesday, April 16, 2008
Rush To Gold
I volunteer to rain on Wall Street's pompous parade today. Repeat after me: "Short squeeze."
Wall Street surges higher after upbeat earnings reports
NEW YORK (AP) -- Wall Street rallied Wednesday after better-than-expected quarterly results from JPMorgan Chase and two other Dow Jones industrials raised investors' hopes that companies and the economy are indeed recovering from the protracted global credit crisis. The Dow rose more than 250 points as investors shrugged off any concerns about oil passing $115 a barrel for the first time.
A market anxious about corporate earnings and their effect on the economy was relieved after JPMorgan Chase & Co., Coca-Cola Co. and Intel Corp. all topped first-quarter projections.
The battered financial sector advanced after JPMorgan beat analysts' expectations despite a 50 percent drop in quarterly profit. The nation's third-biggest bank, which is in the process of acquiring ailing Bear Stearns Cos., reported $2.6 billion of write-downs tied to its loan portfolio.
http://biz.yahoo.com/ap/080416/wall_street.html
Stop right there! "...beat analysts' expectations despite a 50 percent drop in quarterly profit." Ignore the fact that anal-ysts have been lowering earnings estimates from one end of Wall Street to the other for the past six weeks. Focus on the FACT that JPMorgan's earnings DROPPED 50% from a year earlier. Last time I checked you bought companies with growing earnings, and dumped those with falling earnings. Please, somebody correct me if I'm wrong, but I think that is the general theory behind "investing" in stocks of companies. JPMorgan's earnings DROPPED 50% and their shares were bid up 5% today because they beat reduced earnings expectations? No, their shares were bid up by shorts in JPMorgan covering their trades.
Nobody was really buying JPMorgan shares today. The media cannot comprehend a short sale of a company's stock, let alone the unwinding of it. Instead you get headlines like: Stocks stage big rally after earnings from Intel, JPMorgan, Coca-Cola ease profit anxiety. Stocks rallied today for one reason alone, short covering.
JPMorgan's earnings results were hardly a picture of recovery. After JPMorgan insiders unloaded their soon to be worthless shares onto the public they announced this less than glowing news:
JPMorgan Plans to Sell $6 Billion of Preferred Stock
April 16 (Bloomberg) -- JPMorgan Chase & Co., hours after saying the credit-market crisis is almost over, made plans to sell $6 billion of perpetual preferred stock, according to a person familiar with the offering.
Chief Executive Officer Jamie Dimon, 52, said on a conference call with reporters that the credit-market crisis is more than halfway finished as financial firms reduce leverage, and may be as much as 80 percent over.
http://www.bloomberg.com/apps/news?pid=20601087&sid=adwVNdeq_.jU&refer=home
Things are going so well at JPMorgan they have to go begging to the Street for $6Billion? CEO Jamie Dimon claims the credit-market crisis may be 80% over? That's wishful thinking Jamie. The credit-market crisis may have reached the end of it's beginning, but isn't even close to 80% over. I'd be surprised if it was just 20% over.
I could gleefully beat this horse to death for several more paragraphs. Suffice it to say that today's rally in stocks was little more than a Bear Market Rally. Yes, there were some legitimately good earnings reports today. Coca-Cola, Intel, and IBM. Bear in mind that these three companies are "multinationals" and stand to benefit in the biggest way from a falling Dollar. And speaking of a falling Dollar:
Dollar falls to record low against euro
SAN FRANCISCO (MarketWatch) -- The dollar remained under pressure against most major counterparts Wednesday, notching a fresh low against the euro after mixed U.S. economic data.
The euro was changing hands at $1.5950, after rising as high as $1.5977, according to FactSet Research data.
That marked the loftiest level since the single European currency began trading in January 1999. It moved up from $1.5799 in late North American trading Tuesday.
http://biz.yahoo.com/ap/080416/wall_street.html
Annual EU inflation hits record 3.6 percent on rapid pace
BRUSSELS, Belgium
Yearly inflation in countries using the euro jumped to record highs, pushing the currency to a new heights against the dollar Wednesday as oil prices soared above $114 a barrel.
The 15-nation currency hit $1.5978 after the EU's statistical agency Eurostat said that annual euro inflation for March rose 3.6 percent on higher prices for energy and food.
It was the most rapid ascent in 16 years, stifling chances of a near-term euro interest rate cut by the European Central Bank. The weak dollar sent oil prices to new highs as investors fled the struggling U.S. currency in favor of commodities.
http://www.businessweek.com/ap/financialnews/D90341I00.htm
The US Dollar is in a world of hurt, and is once again staring into a free falling abyss. As I mentioned yesterday, the ECB is mandated to control inflation in the Eurozone. The Dollar got crushed today as hopes for an ECB rate cut all but vanished. All the hot air from the G7 this past weekend is now left to contribute to global warming. Gold blasted through resistance at 935. Gold is, has been, and as long as there is a world of fiat currency smothering the planet always will be, a hedge against inflation. The 2008 "Rush to Gold" by global investors looking to insure their wealth begins today. Silver investors will be along shortly, and I presume rabidly.
Higher energy and food prices boost March consumer inflation; bigger increases expected
WASHINGTON (AP) -- Inflation rose again last month, reflecting big jumps in the cost of energy and airline tickets. And the forecast is for even bigger energy-related increases to come, including the possibility of $4 per gallon gasoline by Memorial Day.
The Labor Department said consumer prices rose by 0.3 percent in March, after being unchanged in February, as energy prices jumped by 1.9 percent and airline fares, reflecting higher fuel costs, increased 3 percent, the biggest one-month gain in six years.
Food prices, which have been steadily rising for more than a year, were up by 0.2 percent in March and 4.4 percent over the past 12 months. The price of some food staples showed even bigger increases over the past year, including a 14.7 percent rise in the price of bread and a 13.3 percent increase in milk prices over the past year.
U.S. March housing starts down 11.9 pct
WASHINGTON (Thomson Financial) - Housing starts and permits fell faster than expected in March, to levels not seen in sixteen years.
The Commerce Department said U.S. March housing starts fell 11.9 percent to a 947,000 unit annual rate, down from an upwardly revised 1.075 million units in February. That is the lowest level since March 1991.
http://www.forbes.com/markets/feeds/afx/2008/04/16/afx4896655.html
Crude Oil Rises to Record Above $114 a Barrel as Dollar Plunges
April 16 (Bloomberg) -- Oil rose to a record above $114 a barrel for a second day in New York as the dollar plunged to an all-time low against the euro.
The appeal of oil and other commodities as a hedge against inflation grew as the dollar sank as low as $1.5968 versus the euro. Oil is also gaining on demand from China, the world's second- biggest crude consumer, where the economy expanded 10.6 percent in the first quarter, government statistics showed today.
http://www.bloomberg.com/apps/news?pid=20601116&sid=ayel99Uc.hbc&refer=africa
China GDP grows strongly; inflation high
BEIJING (AP) — China's robust economy slowed only slightly in the first quarter despite global gloom, while inflation stayed above 8 percent in March, the government said Wednesday, adding to pressure to rein in prices that are battering Chinese consumers.
The world's fourth-largest economy expanded by a still impressive 10.6 percent in January-March from a year earlier, down from the previous quarter's 11.2 percent rate, amid weaker global demand for exports and government steps to cool an investment boom.
Consumer prices rose 8.3 percent in March over the same month last year, down only slightly from February's 8.7 percent, the highest rate in nearly 12 years, according to the National Bureau of Statistics.
http://ap.google.com/article/ALeqM5i_GnchsrOsWq07cOXj7f17XcUnjQD902TJLO0
There are too many headlines to post that would lend storm clouds to my raining on Wall Streets euphoric Bear market rally today. Inflation is running hot globally. The facade of contained inflation in the US by the governments BOGUS inflation numbers is realized by ALL outside the beltway in Washington. The emperor is stark naked. Wall Street can dream about the "end" of the credit-market crisis all day and all night. They wish it would go away...it is not. The price of Oil and gasoline is NOT the fault of Exxon as countless forwarded emails would have you believe. The US Dollar is crumbling before our eyes, and the last to realize it will be Americans too glued to their reality TV, incessant gossip magazines, and their belief that their government can fix everything for them while feeling no pain. Pain is on the way baby. PAIN...
Wall Street surges higher after upbeat earnings reports
NEW YORK (AP) -- Wall Street rallied Wednesday after better-than-expected quarterly results from JPMorgan Chase and two other Dow Jones industrials raised investors' hopes that companies and the economy are indeed recovering from the protracted global credit crisis. The Dow rose more than 250 points as investors shrugged off any concerns about oil passing $115 a barrel for the first time.
A market anxious about corporate earnings and their effect on the economy was relieved after JPMorgan Chase & Co., Coca-Cola Co. and Intel Corp. all topped first-quarter projections.
The battered financial sector advanced after JPMorgan beat analysts' expectations despite a 50 percent drop in quarterly profit. The nation's third-biggest bank, which is in the process of acquiring ailing Bear Stearns Cos., reported $2.6 billion of write-downs tied to its loan portfolio.
http://biz.yahoo.com/ap/080416/wall_street.html
Stop right there! "...beat analysts' expectations despite a 50 percent drop in quarterly profit." Ignore the fact that anal-ysts have been lowering earnings estimates from one end of Wall Street to the other for the past six weeks. Focus on the FACT that JPMorgan's earnings DROPPED 50% from a year earlier. Last time I checked you bought companies with growing earnings, and dumped those with falling earnings. Please, somebody correct me if I'm wrong, but I think that is the general theory behind "investing" in stocks of companies. JPMorgan's earnings DROPPED 50% and their shares were bid up 5% today because they beat reduced earnings expectations? No, their shares were bid up by shorts in JPMorgan covering their trades.
Nobody was really buying JPMorgan shares today. The media cannot comprehend a short sale of a company's stock, let alone the unwinding of it. Instead you get headlines like: Stocks stage big rally after earnings from Intel, JPMorgan, Coca-Cola ease profit anxiety. Stocks rallied today for one reason alone, short covering.
JPMorgan's earnings results were hardly a picture of recovery. After JPMorgan insiders unloaded their soon to be worthless shares onto the public they announced this less than glowing news:
JPMorgan Plans to Sell $6 Billion of Preferred Stock
April 16 (Bloomberg) -- JPMorgan Chase & Co., hours after saying the credit-market crisis is almost over, made plans to sell $6 billion of perpetual preferred stock, according to a person familiar with the offering.
Chief Executive Officer Jamie Dimon, 52, said on a conference call with reporters that the credit-market crisis is more than halfway finished as financial firms reduce leverage, and may be as much as 80 percent over.
http://www.bloomberg.com/apps/news?pid=20601087&sid=adwVNdeq_.jU&refer=home
Things are going so well at JPMorgan they have to go begging to the Street for $6Billion? CEO Jamie Dimon claims the credit-market crisis may be 80% over? That's wishful thinking Jamie. The credit-market crisis may have reached the end of it's beginning, but isn't even close to 80% over. I'd be surprised if it was just 20% over.
I could gleefully beat this horse to death for several more paragraphs. Suffice it to say that today's rally in stocks was little more than a Bear Market Rally. Yes, there were some legitimately good earnings reports today. Coca-Cola, Intel, and IBM. Bear in mind that these three companies are "multinationals" and stand to benefit in the biggest way from a falling Dollar. And speaking of a falling Dollar:
Dollar falls to record low against euro
SAN FRANCISCO (MarketWatch) -- The dollar remained under pressure against most major counterparts Wednesday, notching a fresh low against the euro after mixed U.S. economic data.
The euro was changing hands at $1.5950, after rising as high as $1.5977, according to FactSet Research data.
That marked the loftiest level since the single European currency began trading in January 1999. It moved up from $1.5799 in late North American trading Tuesday.
http://biz.yahoo.com/ap/080416/wall_street.html
Annual EU inflation hits record 3.6 percent on rapid pace
BRUSSELS, Belgium
Yearly inflation in countries using the euro jumped to record highs, pushing the currency to a new heights against the dollar Wednesday as oil prices soared above $114 a barrel.
The 15-nation currency hit $1.5978 after the EU's statistical agency Eurostat said that annual euro inflation for March rose 3.6 percent on higher prices for energy and food.
It was the most rapid ascent in 16 years, stifling chances of a near-term euro interest rate cut by the European Central Bank. The weak dollar sent oil prices to new highs as investors fled the struggling U.S. currency in favor of commodities.
http://www.businessweek.com/ap/financialnews/D90341I00.htm
The US Dollar is in a world of hurt, and is once again staring into a free falling abyss. As I mentioned yesterday, the ECB is mandated to control inflation in the Eurozone. The Dollar got crushed today as hopes for an ECB rate cut all but vanished. All the hot air from the G7 this past weekend is now left to contribute to global warming. Gold blasted through resistance at 935. Gold is, has been, and as long as there is a world of fiat currency smothering the planet always will be, a hedge against inflation. The 2008 "Rush to Gold" by global investors looking to insure their wealth begins today. Silver investors will be along shortly, and I presume rabidly.
Higher energy and food prices boost March consumer inflation; bigger increases expected
WASHINGTON (AP) -- Inflation rose again last month, reflecting big jumps in the cost of energy and airline tickets. And the forecast is for even bigger energy-related increases to come, including the possibility of $4 per gallon gasoline by Memorial Day.
The Labor Department said consumer prices rose by 0.3 percent in March, after being unchanged in February, as energy prices jumped by 1.9 percent and airline fares, reflecting higher fuel costs, increased 3 percent, the biggest one-month gain in six years.
Food prices, which have been steadily rising for more than a year, were up by 0.2 percent in March and 4.4 percent over the past 12 months. The price of some food staples showed even bigger increases over the past year, including a 14.7 percent rise in the price of bread and a 13.3 percent increase in milk prices over the past year.
U.S. March housing starts down 11.9 pct
WASHINGTON (Thomson Financial) - Housing starts and permits fell faster than expected in March, to levels not seen in sixteen years.
The Commerce Department said U.S. March housing starts fell 11.9 percent to a 947,000 unit annual rate, down from an upwardly revised 1.075 million units in February. That is the lowest level since March 1991.
http://www.forbes.com/markets/feeds/afx/2008/04/16/afx4896655.html
Crude Oil Rises to Record Above $114 a Barrel as Dollar Plunges
April 16 (Bloomberg) -- Oil rose to a record above $114 a barrel for a second day in New York as the dollar plunged to an all-time low against the euro.
The appeal of oil and other commodities as a hedge against inflation grew as the dollar sank as low as $1.5968 versus the euro. Oil is also gaining on demand from China, the world's second- biggest crude consumer, where the economy expanded 10.6 percent in the first quarter, government statistics showed today.
http://www.bloomberg.com/apps/news?pid=20601116&sid=ayel99Uc.hbc&refer=africa
China GDP grows strongly; inflation high
BEIJING (AP) — China's robust economy slowed only slightly in the first quarter despite global gloom, while inflation stayed above 8 percent in March, the government said Wednesday, adding to pressure to rein in prices that are battering Chinese consumers.
The world's fourth-largest economy expanded by a still impressive 10.6 percent in January-March from a year earlier, down from the previous quarter's 11.2 percent rate, amid weaker global demand for exports and government steps to cool an investment boom.
Consumer prices rose 8.3 percent in March over the same month last year, down only slightly from February's 8.7 percent, the highest rate in nearly 12 years, according to the National Bureau of Statistics.
http://ap.google.com/article/ALeqM5i_GnchsrOsWq07cOXj7f17XcUnjQD902TJLO0
There are too many headlines to post that would lend storm clouds to my raining on Wall Streets euphoric Bear market rally today. Inflation is running hot globally. The facade of contained inflation in the US by the governments BOGUS inflation numbers is realized by ALL outside the beltway in Washington. The emperor is stark naked. Wall Street can dream about the "end" of the credit-market crisis all day and all night. They wish it would go away...it is not. The price of Oil and gasoline is NOT the fault of Exxon as countless forwarded emails would have you believe. The US Dollar is crumbling before our eyes, and the last to realize it will be Americans too glued to their reality TV, incessant gossip magazines, and their belief that their government can fix everything for them while feeling no pain. Pain is on the way baby. PAIN...
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