"Inflate Or Die!"

First, a quick word to ALL the criminals at the NY CRIMEX.

"Kiss my rosy red ass."

What you witnessed today at exactly 3PM on the CRIMEX was just that...a crime in progress. Never in all the months of criminal activity witnessed there have I seen the desperation observed today. Does ANYBODY for even a nano second believe that there was any Gold actually sold this afternoon? NO! None was.

Gold held it's own all day today. The CRIMEX criminals were exasperated by this. How could Gold NOT go down with the DOW up over 400 points? Simple... Gold got it's orders from the Fed on Wednesday afternoon. The Fed has chosen to destroy the US Dollar, and Gold has booked a one way ticket to infinity and beyond.

The US Dollar was as weak as a tit on a bull today. Gold will not go down with the Dollar now paralyzed by the Fed's decision to print money out of thin air. The rally in the equities markets may be as phony as the money the Fed is printing to buy US Treasury debt, but as long as the equity markets rally, the Dollar will go down...and Gold will go up.

Doesn't it strike anybody as "odd" that the ONLY "commodity" that was down today on Dollar weakness was Gold, soon followed by Silver? Oil was up, Copper was up, Corn was up...you name it, if it was a commodity, it was up. The handwriting is very clearly written on the White House Wall. "Inflate Or Die!"

The CRIMEX can play games with Gold, but the games will all be in vain. The jig is clearly up. Bernanke and Company have obviously failed to "prevent" deflation of asset prices, so now they must resort to the cure. And the cure is MASSIVE INFLATION. How else do you think they expect to get the prices of banks Toxic Assets back to par? There is ONLY one way now: "Inflate Or Die!"

Little Timmy Geithner's big new plan depends on MASSIVE INFLATION. Without massive inflation his plan is just a pipe dream. His plans success depends on the Toxic Asset prices rising. And the ONLY hope for them to rise is through MASSIVE INFLATION...because they don't have a snowball's chance in Hell of rising otherwise.

"Inflate or Die!"

First up is a series of interviews with noted economist James Galbraith. Please watch BOTH clips. This man pulls no punches, and tells it like it is. The Geithner "plan" is a joke.

Part I: Geithner's Plan "Extremely Dangerous," Economist Galbraith Says
...the plan is yet another massive, ineffective gift to banks and Wall Street. Taxpayers, of course, will take the hit

Why does Tim Geithner keep repackaging the same trash-asset-removal plan that he has been trying to get approved since last fall?

In our opinion, because Tim Geithner formed his view of this crisis last fall, while sitting across the table from his constituents at the New York Fed: The CEOs of the big Wall Street firms. He views the crisis the same way Wall Street does--as a temporary liquidity problem--and his plans to fix it are designed with the best interests of Wall Street in mind.

If Geithner's plan to fix the banks would also fix the economy, this would be tolerable. But no smart economist we know of thinks that it will.

We think Geithner is suffering from five fundamental misconceptions about what is wrong with the economy. Here they are:

The trouble with the economy is that the banks aren't lending. The reality: The economy is in trouble because American consumers and businesses took on way too much debt and are now collapsing under the weight of it. As consumers retrench, companies that sell to them are retrenching, thus exacerbating the problem. The banks, meanwhile, are lending. They just aren't lending as much as they used to. Also the shadow banking system (securitization markets), which actually provided more funding to the economy than the banks, has collapsed.

The banks aren't lending because their balance sheets are loaded with "bad assets" that the market has temporarily mispriced. The reality: The banks aren't lending (much) because they have decided to stop making loans to people and companies who can't pay them back. And because the banks are scared that future writedowns on their old loans will lead to future losses that will wipe out their equity.

Bad assets are "bad" because the market doesn't understand how much they are really worth. The reality: The bad assets are bad because they are worth less than the banks say they are. House prices have dropped by nearly 30% nationwide. That has created something in the neighborhood of $5+ trillion of losses in residential real estate alone (off a peak market value of housing about $20+ trillion). The banks don't want to take their share of those losses because doing so will wipe them out. So they, and Geithner, are doing everything they can to pawn the losses off on the taxpayer.

Once we get the "bad assets" off bank balance sheets, the banks will start lending again. The reality: The banks will remain cautious about lending, because the housing market and economy are still deteriorating. So they'll sit there and say they are lending while waiting for the economy to bottom.

Once the banks start lending, the economy will recover. The reality: American consumers still have debt coming out of their ears, and they'll be working it off for years. House prices are still falling. Retirement savings have been crushed. Americans need to increase their savings rate from today's 5% (a vast improvement from the 0% rate of two years ago) to the 10% long-term average. Consumers don't have room to take on more debt, even if the banks are willing to give it to them.
http://finance.yahoo.com/tech-ticker/article/216311/Part-I-Geithner


Part II: Geithner, Obama Kowtowing to "Massively Corrupted" Banks, Galbraith Says
Like it or not, many people seem to be resigned to the idea there's no alternative to the public-private investment fund scheme Treasury Secretary Geithner detailed this morning.

That's hogwash, says University of Texas professor James Galbraith, author of The Predator State. Of course there's an alternative: FDIC receivership of insolvent banks.

Aside from being legally proscribed, the upside of FDIC receivership is the banks are restructured and reorganized for potential sale (either in whole or parts), Galbraith says. Such was the fate in 2008 of, most notably, Washington Mutual and IndyMac.

Crucially, FDIC receivership also means new management teams for insolvent banks; and Galbraith notes new leaders will have no incentive to cover up the fraudulent or predatory lending practices of their predecessors. Given the entire system was "massively corrupted by the subprime debacle," the professor believes criminal prosecutions on par with the aftermath of the S&L crisis - when hundreds of insiders went to jail - is a likely (and necessary) outcome of the current crisis.

But don't expect to see many "perp walks" if Geithner's current plan comes to fruition. That's one reason Galbraith called the plan "extremely dangerous" in part one of our interview.

So why isn't the Obama administration pushing for FDIC receivership? "Political influence of big banks," the economist says.
http://finance.yahoo.com/tech-ticker/article/216480/Part-II-Geithner-Obama-Kowtowing-to-%22Massively-Corrupted%22-Banks-Galbraith-Says?tickers=XLF,FAS,SKF,C,BAC,JPM,%5EDJI?sec=topStories&pos=3&asset=TBD&ccode=TBD

My Plan for Bad Bank Assets
By TIMOTHY GEITHNER

http://online.wsj.com/article/SB123776536222709061.html

Little Timmy just doesn't get it. His entire plan revolves around creating MORE debt...and MORE securitization of that debt. TIMMY! You f**king idiot! This is EXACTLY what caused the financial crisis.

And Timmy, what makes you think that the banks are going to sell their trash. They have had plenty of opportunities to unload this crap, but have repeatedly refused. Why? Because by selling at distressed prices they will have to book MASSIVE losses. They, like you, FOOLISHLY believe that this garbage is worth something...and if they just wait long enough, the prices will rise "back to normal". Sorry, NO THEY WON'T. You have seen to it that they won't.

Your whole "plan" revolves around the false idea that by continuing to lower the cost of money, people will begin to spend money they don't have again...and everything will get back to "normal". LOOOOOOOOOOOOOOOOOOOOOOL! Ain't never gonna happen pal. You can lead a horse to water, but you can't make him drink. The people do not want anymore debt. The only reason people are going to begin to spend money again is because the value of it will be dropping so fast, they will be afraid that if they don't buy today, the price will be higher tomorrow. Timmy, you and your pals have set in motion an Inflation Tsunami that is going to even shock you, the originator. Asset prices are going to rise again, eventually, but not because you "fixed the credit markets". They are going to rise in a hyper-inflationary mushroom cloud.

I hope you're already working on your next plan...because this one is going to fail like all those of yours and your predecessors preceding it. God help us all....

Dangerous Unintended Consequences [MUST READ]
by Martin D. Weiss, Ph.D. 03-23-09

The Fed Chairman, the Treasury Secretary and Congress have now done more to bail out financial institutions and pump up financial markets than any of their counterparts in history.

But it’s not nearly enough — and, at the same time, it’s already far too much.

Two years ago, when major banks announced multibillion-dollar losses in subprime mortgages, the world’s central banks injected unprecedented amounts of cash into the financial markets.

But that was not enough.

Six months later, when Lehman Brothers and AIG fell, the U.S. Congress rushed to pass the TARP, the greatest bank bailout legislation of all time.

But as it turned out, that wasn’t sufficient either.

Subsequently, in addition to the original goal of TARP, the U.S. government has loaned, invested, or committed $400 billion to nationalize the world’s two largest mortgage companies … $42 billion for the Big Three auto manufacturers … $29 billion for Bear Stearns, $185 billion for AIG, and $350 billion for Citigroup … $300 billion for the Federal Housing Administration Rescue Bill … $87 billion to pay back JPMorgan Chase for bad Lehman Brothers’ trades … $200 billion in loans to banks under the Federal Reserve’s Term Auction Facility (TAF) … $50 billion to support short-term corporate IOUs held by money market mutual funds … $500 billion to rescue various credit markets … $620 billion in currency swaps for industrial nations … $120 billion in swaps for emerging markets … trillions to cover the FDIC’s new, expanded bank deposit insurance, plus trillions more for other sweeping guarantees.

And it STILL wasn’t enough.

If it had been enough, the Fed would not have felt compelled this week to announce its plan to buy $300 billion in long-term Treasury bonds, an additional $750 billion in agency mortgage backed securities, plus $100 billion more in Fannie Mae and Freddie Mac paper.

Total tally of government funds committed to date: Closing in on $13 trillion, or $1.15 trillion more than the tally just hours ago, when the body of this white paper was printed.

And yet, even that astronomical sum is still not enough!

Why not? Because of a series of very powerful reasons:

First, most of the money is being poured into a virtually bottomless pit.

Second, most of the money from the government is still a promise, and even much of the disbursed funds have yet to reach their destination.

Third, the government has been, and is, greatly underestimating the magnitude of this debt crisis. Specifically,

The FDIC’s “Problem List” of troubled banks includes only 252 institutions with assets of $159 billion. However, based on our analysis, a total of 1,568 banks and thrifts are at risk of failure with assets of $2.32 trillion due to weak capital, asset quality, earnings, and other factors. (The details are in Part I of our white paper, and the institutions are named in Appendix A.)

When Treasury officials first planned to provide TARP funds to Citigroup, they assumed it was among the strong institutions and that the funds would go primarily toward stabilizing the markets or the economy. But even before the check could be cut, they learned that the money would have to be for a very different purpose: an emergency injection of capital to prevent Citigroup’s collapse. Based on our analysis, however, Citigroup is not alone. We could witness a similar outcome for JPMorgan Chase and other major banks. (See Part II of our white paper.)

AIG is big. But it, too, is not alone. Yes, in a February 26 memorandum, AIG made the case that its $2 trillion in credit default swaps (CDS) would have been the big event that could have caused a global collapse. And indeed, its counterparties alone have $36 trillion in assets. But AIG’s CDS portfolio is just one of many: Citibank’s portfolio has $2.9 trillion, almost a trillion more than AIG’s at its peak. JPMorgan Chase has $9.2 trillion, or almost five times more than AIG. And globally, the Bank of International Settlements reports a total of $57.3 trillion in credit default swaps, more than 28 times larger than AIG’s CDS portfolio.
Clearly, the money available to the U.S. government is too small for a crisis of these dimensions.

Fourth, but at the same time, the massive sums being committed by the U.S. government are also too much:

In the U.S. banking industry, shotgun mergers, buyouts, and bailouts are accomplishing little more than shifting their toxic assets like DDT up the food chain.

And the government’s promises to buy up the toxic paper have done little more than encourage banks to hold on, piling up even bigger losses.

But the money spent or committed by the government so far is also too much for another, relatively less-known reason: Hidden in an obscure corner of the derivatives market is a unique credit default swap that virtually no one is talking about — contracts on the default of United States Treasury bonds. Quietly and without fanfare, a small but growing number of investors are not only thinking the unthinkable, they’re actually spending money on it, bidding up the premiums on Treasury bond credit default swaps to 14 times their 2007 level. This is an early warning of the next big shoe to drop in the debt crisis — serious potential damage to the credit, credibility, and borrowing power of the United States Treasury.

This trend packs a powerful message — that there’s no free lunch; that it’s unreasonable to believe the U.S. government can bail out every failing giant with no consequences; and that, contrary to popular belief, even Uncle Sam must face his day of reckoning with creditors.
http://www.moneyandmarkets.com/dangerous-unintended-consequences-2-32820

That credit default swaps are still being sold against ANY debt should be alarming in and of itself. Have these clowns learned nothing? Why are these financial WMD still being manufactured?

Soon there may be nobody left to lend to America
So here is where we are at. The combination of the Fed’s surprise attack on the credit markets and the president’s decision to borrow-and-spend will give the economy a lift. My own guess, and that of many economists with whom I have spoken, is that by the middle of next year, if not sooner, the economy will start growing again at a decent rate.

At that point, Bernanke will have to decide whether to start pulling money out of the system by selling off some of the assets on his swollen balance sheet, and the Obama administration will have to decide how to bring down the fiscal deficit. Bernanke is keenly aware that during the Great Depression the Fed tightened the money supply prematurely, nipping a nascent recovery in the bud. So he is likely to stall.

Meanwhile, there is little prospect that Congress will do what is necessary to bring spending and borrowing down to levels that do not trigger inflation. Politicians just don’t worry as much about inflation as about catering to their multiple constituencies. So the Treasury will have more trillions in IOUs to peddle.

But its best customers just might be unenthusiastic about adding significantly to their holdings. Wen already owns trillions in Treasury bills that are depreciating in value. Besides, China’s mounting needs for infrastructure and an improved safety net will sop up funds once used to buy American securities. Japan, another large customer, is now running a current-account deficit, and so it won’t have as many dollars to recycle. Nor will Middle East buyers, no longer receiving a flood of dollars from $140-a-barrel oil. Little wonder that Larry Lindsey, former economic adviser to President George W Bush, says he “cannot figure out what combination of foreign buyers is going to acquire . . . [the] debt” that Obama’s plans will generate.

Which leaves Americans and the Fed as customers. Even if they save more, domestic consumers can’t absorb all the Treasury bonds that will be on offer. And if the Fed keeps buying, it will pour fuel on the inflationary fires.
http://business.timesonline.co.uk/tol/business/columnists/article5950258.ece?openComment=true

Interesting to note: In spite of the CRIMEX hit on Gold this afternoon, Gold held support at old resistance, now support, at 935. 935 is also a 38% retracement of the rally off of Wednesday's low prior to the Fed's announced plans to destroy the US Dollar. Gold is going higher, much higher. Discontinue looking for reasons to sell Gold. Rest easy with the knowledge that the equity markets have rallied following every new government sponsored "plan" to free up the credit markets and "return things to normal"...and subsequently tanked to new market lows.

This time might just be different ONLY because the Fed is now committed to destroying the Dollar via MASSIVE inflation of the money supply...but should the markets continue to rally for a time...the Dollar will subsequently fall, and Gold and commodities will rise substantially. You can't lose with Gold...the currency of choice.

The Fed Is Now The Official Sugar Daddy

In a never ending effort to "spend our way back to prosperity", the US Federal Reserve this past week finally threw the kitchen sink into the fray. All but admitting complete failure in it's efforts to date to stop the financial sytem from unraveling completely, the Fed announced that they will throw even MORE money at the Fannie Mae and Freedie Mac Black Hole, AND proudly announced [as in confirmed the obvious] that they will commence [as in continue] buying long dated US Treasury notes.

There is no turning back now. The Fed has officially chosen to destroy the US Dollar so that they may continue the charade of propping up this nations insolvent fiancial institutions. The question now becomes, who is going to bail out the Fed?

This lead to a weekend of reading, I encourage you all to peruse the following. I don't believe the answer to our question will be found, but plenty of reason to ask it will be:

From Jim Sinclair:
The Federal Reserve moves to self financing by buying tons of US Treasury instruments in a clear message that:

Inflation = Good
Deflation = Bad
Therefore:

Higher price of Gold = Good
Lower price of Gold = Bad

Which also infers that:

Higher dollar = Bad
Lower dollar = Good.

This simple formula seems to be too complex for the talking heads who seem to have a difficult time making simple adjustments to their broadcasts, such as no smiling when reporting the Dow is down 500 points or now looking incredulous when reporting gold isup $1.

Fed quantitative easing via financing themselves put a floor under gold. When you have a floor under a market it will seek the ceiling.

The first floor temporary ceiling is at $1224. After that look to $1650
http://www.jsmineset.com/

Deficit Projected To Swell Beyond Earlier Estimates
President Obama's ambitious plans to cut middle-class taxes, overhaul health care and expand access to college would require massive borrowing over the next decade, leaving the nation mired far deeper in debt than the White House previously estimated, congressional budget analysts said yesterday.

In the first independent analysis of Obama's budget proposal, the nonpartisan Congressional Budget Office concluded that Obama's policies would cause government spending to swell above historic levels even after costly programs to ease the recession and stabilize the nation's financial system have ended.

Tax collections, meanwhile, would lag well behind spending, producing huge annual budget deficits that would force the nation to borrow nearly $9.3 trillion over the next decade -- $2.3 trillion more than the president predicted when he unveiled his budget request just one month ago.

The result, according to the CBO, would be an ever-expanding national debt that would exceed 82 percent of the overall economy by 2019 -- double last year's level -- and threaten the nation's financial stability.

"This clearly creates a scenario where the country's going to go bankrupt. It's almost that simple," said Sen. Judd Gregg (N.H.), the senior Republican on the Senate Budget Committee, who briefly considered joining the Obama administration as commerce secretary. "One would hope these numbers would wake somebody up," Gregg said.
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/20/AR2009032001820.html?hpid=topnews

Commodities Jump on Inflation Concerns; Silver, Gold, Oil Surge
March 19 (Bloomberg) -- Commodities surged, led by precious metals and energy, on speculation that the Federal Reserve’s steps to revive the U.S. economy will spur demand for raw materials as a hedge against inflation.

“We’ve got a massive increase in the Fed’s balance sheet, and the markets are taking it to be both inflationary and as devaluing the dollar,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “This reinforces the potential for hyperinflation, which would drive commodity prices higher.”

Gold futures for April delivery surged $66.50, or 7.5 percent, to $955.60 an ounce on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest gain since Sept. 17. Before the Fed announcement yesterday, the metal touched $882.70, the lowest since Jan. 29.

Silver futures for May delivery soared $1.555, or 13 percent, to $13.49 an ounce. A close at that price would be the biggest gain for a most-active contract since Dec. 31, 1979.

The dollar fell for the eighth straight session against a weighted basket of six major currencies. Central banks are lowering interest rates and spending trillions of dollars in response to the deepest economic slump since the Great Depression.

“Investors are worried the Fed will print as much money as they need to, and this is going to lead to some insanely hot inflation, so they’re out buying gold,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “The dollar got clobbered. You print more money and it buys you less.”
http://www.bloomberg.com/apps/news?pid=20601081&sid=aLczKs0963FU&refer=australia

U.N. panel says world should ditch dollar
LUXEMBOURG (Reuters) - A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar.

Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.

Persaud, chairman of consultants Intelligence Capital and a former currency chief at JPMorgan, said the recommendation would be one of a number delivered to the United Nations on March 25 by the U.N. Commission of Experts on International Financial Reform.

"It is a good moment to move to a shared reserve currency," he said.

Central banks hold their reserves in a variety of currencies and gold, but the dollar has dominated as the most convincing store of value -- though its rate has wavered in recent years as the United States ran up huge twin budget and external deficits.

Some analysts said news of the U.N. panel's recommendation extended dollar losses because it fed into concerns about the future of the greenback as the main global reserve currency, raising the chances of central bank sales of dollar holdings.
http://www.reuters.com/article/newsOne/idUSTRE52H2CY20090318

Quant Easing: Central Banks Unleash the 'Nuclear' Option [good read]
Beijing now owns an estimated $1.7-trillion in US-dollar assets, $900-billion of Treasury bonds and short-term bills, $550-billion in agency bonds, $150-billion in corporate bonds, $40-billion in US-equities, and $40-billion in short-term deposits. The State Administration of Foreign Exchange (SAFE), part of the People’s Bank of China, manages the bulk of Beijing’s $2-trillion FX reserves, while, China’s state banks and sovereign wealth fund, oversee $250-billion.

Spelling out China’s dilemma, any effort by Beijing to unload a significant part of its massive Treasury and agency holdings could flood the market and trigger a selling panic, with devastating impact on the value of its foreign currency reserves. If China stops buying them, it needs to worry about the Fed monetizing the debt, which could lead to hyper-inflation and a bond market rout, once the US-economy stabilizes.

Ironically, the US economic slump has already caused a massive drop in American purchases of Chinese goods. Chinese exports plunged 25.7% in February from a year earlier, slashing the country’s trade surplus from a record $40.2-billion in November to $4.8 billion in February. A continuation of this downtrend means Beijing would earn fewer dollars to recycle into US-dollar bonds. Therefore, the Fed felt compelled to fill the void, as the buyer of last resort for the Treasury’s IOU’s.
http://seekingalpha.com/article/127008-quant-easing-central-banks-unleash-the-nuclear-option?source=email

Inflation: Making Sure "It" Happens Everywhere
SO BEN BERNANKE SAYS the United States has plunged into a deflationary depression.

Really, that's what Wednesday's Fed announcement said, shouting it loud and shouting it proud.

Because Bernanke's deflation-prevention policies have failed. So he's gone to applying the cure instead.

"The US government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many US dollars as it wishes at essentially no cost."

"As I have stressed already," Bernanke explained back in late 2002, "prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation."
http://news.goldseek.com/BullionVault/1237562796.php

*****Fed Planning 15-Fold Increase In US Monetary Base***** [must read]
The fed is planning moves that would more than double its balance-sheet assets by September to $4.5 trillion from $1.9 trillion. Whether expressing approval or concern over the fed’s intentions, most commentators fail to understand the real magnitude of the projected expansion of the US monetary base because they don’t take into account the amount of dollars circulating abroad.

At least 70 percent of all US currency is held outside the country, and this means the US monetary base is considerably smaller than the fed’s overall balance sheet. Take, for example, the true US domestic money supply at the beginning of September 2008, before the fed started its quantitative easing. From the Federal Reserve’s website, we know that currency in circulation was 833 Billion. This translates as 583 Billion dollars circulating abroad (70 percent), and 250 Billion dollars circulating domestically (30 percent). Since the bank reserve balances held with Federal Reserve Banks were 12 billion, that gives us a 262 Billion domestic monetary base as of September 2008. Now compare that to the projected US domestic monetary base for September 2009 which is 3,818 billion (4,500 billion – 583 billion (dollars circulating abroad) – 99 billion (other fed liabilities not part of the money supply)). The fed’s planned balance sheet expansion results in a 15-fold increase in the base money supply.


262 Billion = US monetary base as of September 2008 (minus dollars held abroad)

3,818 Billion = projected US monetary base in September 2009 (minus dollars held abroad)

3,818 Billion / 262 Billion = 15-Fold Increase in US monetary base


This is a staggering devaluation of the US currency! It means that for every dollar in America in September 2008, the fed is going to create fourteen more of them!
http://www.marketskeptics.com/2009/03/fed-is-planning-15-fold-increase-in-us.html

The Mother of all Bells
By: Peter Schiff, Euro Pacific Capital, Inc.
There is an old adage on Wall Street that no one rings a bell at major market tops or bottoms. That may be true in normal times, but as many have noticed, we are now completely through the looking glass. In this parallel reality, Ben Bernanke has just rung the loudest bell ever heard in the foreign exchange and government debt markets. Investors who ignore the clanging do so at their own peril. The bell's reverberations will be felt by everyday Americans, whose lives are about to change in ways few can imagine.

While nearly every facet of America's economy has been devastated over the past six months, our national currency has thus far skipped through the carnage with nary a scratch. Ironically, the U.S dollar has been the beneficiary of the global economic crises which the United States set in motion. As a result, our economy has thus far been spared the full force of the storm.

This week the Federal Reserve finally made clear what should have been obvious for some time - the only weapon that the Fed is willing to use to fight the economic downturn is a continuing torrent of pure, undiluted, inflation. The announcement should be seen as a game changer that redirects the fury of the financial storm directly onto our shores.

There is a growing consensus that if China no longer wants to buy our bonds, we can simply print the money and buy them ourselves. This naïve view fails to consider the consequences implicit in such a change. When the Treasury sells bonds to China, no new dollars are printed. Instead, China prints yuan which it then uses to buy treasurers. This effectively allows America to export its inflation to China. However, now that we will be printing the money ourselves, the full inflationary impact will fall directly on us.
http://news.goldseek.com/EuroCapital/1237572152.php

AIG Larry Summers and the Politics of Deflection [must read]
By: F. William Engdahl
Larry Summers is the man directly responsible for the mess. As Clinton Treasury Secretary from 1999-January 2001 he shaped and pushed the financial deregulation that unleashed the present crisis. He was Treasury Secretary after July 1999 when his boss, Robert Rubin left to become Vice Chairman of Citigroup, where Rubin went on to advance the colossal agenda of deregulated finance directly.

As Treasury Secretary in 1999 Summers played a decisive role in pushing through the repeal of the Glass Steagall Act of 1933 that was instituted to guard against just the kind of banking abuses taxpayers now are having to bail out. Not only Glass-Steagall repeal. In 2000 Summers backed the Commodity Futures Modernization Act that incredibly mandated that financial derivatives, including in energy, could be traded between financial institutions completely without government oversight, 'Over-the-Counter' as in where the taxpayer is now being dragged. Credit default Swaps, at the center of the current storm, would not have been possible without Larry Summers and the Commodity Modernization Act of 2000. He is now the White House Economic Council chairman, mandated to find a solution to the crisis he helped make along with Tim Geithner, his friend who is Treasury chief. Foxes should never be asked to guard the henhouse.

This all makes great food for tabloid headlines and popular outrage. They can write that elected politicians are finally acting in taxpayer interests. Until we look a bit more closely. Paying $165 million in employee bonuses or any amount for a company that is in the middle of a multi-trillion dollar fraud that is bringing the world economy down with it is 'outrageous.'

The problem is the tax bailout haemmorrhage will go on. The reason is the Obama Administration like its predecessor refuses to take consequent action with AIG, despite the fact today the US Government owns at least 80% of AIG stock, bought for $180 billion of, yes, taxpayer dollars. To demand AIG 'pay back the government' is absurd as the government is in effect demanding it pay itself back with its own money. The latest claim that the Treasury will subtract the $165 million bonus money from the next $30 billion tranche it will give AIG says it all.

Fortunately there is a simple way out of the AIG debacle. The US Government can step in and fully nationalize AIG, 100%, kick out responsible management, declare AIG's CDS contracts null and void and let holders sue the US government to regain value for what were in reality lottery gambles not loans to the real economy. They own 80% so the step is small to 100%. Doing that would end the global market in CDS and open the door for countless legal challenges. But AIG's counterparties, as we begin to learn, were exactly the big Wall Street players like Goldman Sachs, Citigroup, even Deutsche Bank. They have gotten enough taxpayer bailouts to cover their risk in CDS. Let them recognize risk is the heart of banking, not the opposite.

Myron Scholes, the 'father' of financial derivatives, who won a Nobel Prize in economics in 1997 for inventing the stock options model that led to financial derivatives back in the 1970's, has declared that derivatives and Credit Default Swaps have gotten so dangerously out of hand that authorities must 'blow up' the market.

Scholes says derivatives traded over the counter should be shut down completely. Speaking at York University Stern School of Business recently, he said the "solution is really to blow up or burn" the over-the-counter market and start over. He included derivatives on stocks, interest rate swaps and credit default swaps that should be then moved into regulated markets.

The idea is simple and not that radical. A US law banning OTC derivatives and moving them to regulated exchanges would end a colossal 'shadow banking' fraud. Banks would not lose much more than already, but the world financial system would get back to 'normal.' OTC derivatives are unregulated precisely to hide risk and enable fraud by the banks. It is past time to end that. That is where the US Treasury and other Governments must focus, not on meaningless 'transparency' calls or trading bonus 'justice.'
http://www.321gold.com/editorials/engdahl/engdahl031909.html

Obama's toxic assets plan greeted with skepticism
The Obama administration's latest plan to help banks get credit flowing again is drawing a tepid reaction from investors and academics, who say the proposal comes with too many strings attached and is unlikely to stimulate lending industrywide.

The plan Treasury Secretary Timothy Geithner intends to announce Monday aims to create a new government entity -- the Public Investment Corp. -- to help buy up to $1 trillion in toxic assets on banks' books.

The initiative will seek to entice private investors, including big hedge funds, to participate. It will do so by offering billions of dollars in low-interest loans to finance the purchases and by sharing risks if assets fall further in value.

Analysts agree that stabilizing the banking system is crucial. But some wonder whether the proposal will create more problems.

"It's quite possible we could make bad banks out of good banks," Sung Won Sohn, professor of economic and finance at the Smith School at California State University, said Sunday.

Sohn wonders whether the sale of assets at bargain prices, to remove them from banks' balance sheets, would then force other banks to have to write down the value of similar assets they might not want to sell. He suggests it might be better if the government offered insurance that banks could buy to protect the toxic assets or offered some sort of loan guarantees.
http://biz.yahoo.com/ap/090322/bank_rescue_reactions.html?sec=topStories&pos=2&asset=TBD&ccode=TBD

For The Dollar, Fed News Goes Over Like A Lead Balloon

SEEING THE HANDWRITING ON THE WALL, THE U.S. GOES FOR QUANTITATIVE EASING
China has been the biggest buyer of U.S. Treasury securities due to their large trade surplus with the United States. Now, Chinese officials have made it clear that they will not be buying as many U.S. Treasury bonds, agency bonds, and government securities of other nations, due to the fact that their trade surplus with the rest of the world is falling and their huge foreign exchange reserves have stopped growing rapidly.

Further, the Chinese have been spending more of their money purchasing raw materials as they continue to buy up base metals, oil, and other reserves to stoke their economic machine. Chinese officials have made statements recently that their purchases of bonds will fall as their trade surplus falls.

This is the primary reason that the U.S. yesterday announced the purchase of $300 billion of U.S. Treasury bonds by the Federal Reserve over the next six months. This is Quantitative Easing, or to put it more plainly, printing money. The long term effect is highly inflationary.

We predict that this is only the first of many Quantitative Easing activities, and the U.S. will have to print more money to buy much of the $2 trillion in new bonds that are going to be issued in the coming year. This will have large effects, including:

1. A decline in the value of the U.S. dollar. (The decline began yesterday as soon as the announcement was made.)

2. Substantial inflationary pressures.

3. Long-term upward pressure on the prices of fixed assets, gold, commodities, real estate that produces steady income, stocks that can grow.

4. Serious negative effects on the economic future of coming generations of Americans (personally, I blame the U.S. political class for their unmitigated shortsightedness.)”
- Monty Guild, JSMineset.com

The gold market has seen two significant pulse-up moves in the last 24 hours and in general, the gold trade was able to consolidate those gains. The bull camp clearly seems to have embraced the prospect of inflation but with some players in the stock market questioning the recent moves from the US Fed one can't discount the prospect of ongoing flight to quality buying interest in the precious metals. With another massive range down pulse in the Dollar, soaring oil prices and general strength seen in a long list of physical commodity markets, the number of bullish influences for gold was rather extensive. In fact, given the weakness in US economic readings on Thursday morning, the bull camp could probably suggest that the state of the economy was also supportive of their case.

The silver market also managed two distinct upward thrusts on the charts over the last 24 hours and in general the market was able to consolidate a good portion of those gains. Clearly inflation expectations are more prevalent than at the beginning of the week and certainly the declines in the US Dollar are becoming significant enough for the bull camp in silver to use the Dollar action as another justification for silver price gains. Apparently silver and other industrial metals markets were undaunted by the patently weak flow of scheduled US data on Thursday morning.”
- The Hightower Report, Futures Analysis and Forecasting

Federal Reserve Will Fail With Quantitative Easing
Quantitative easing; everybody is doing it like the Bank of England, Japan and even Switzerland. Quantitative easing is a tool of monetary policy. The effect is an increase in the quantity of currency without regard to maintaining its quality. Quantitative is relating to, measuring, or measured by the quantity of something rather than its quality. On 18 March 2009 Bloomberg reported that the Federal Reserve announced the intent to purchase $300B of longer-term Treasuries. Predictably, the Federal Reserve has decided to exacerbate the quantitative easing party.

What is really going on is the great credit contraction. The system does not collapse but evaporate. As the evaporation has continued and intensified capital, both real and fictitious, has sought safer and more liquid assets by moving down the liquidity pyramid. A significant, but still miniscule amount, of capital has already evaporated over the past year. This is basic economic law being asserted. A predictable consequence has been for Treasury rates to near 0% because they are considered among the safest and most liquid assets.

But the United States Treasury bubble is the biggest of all and there are reasons how and why the Treasury bubble will burst.

At all times and in all circumstances gold remains money. Gold is the ultimate form of payment and is always accepted. Gold is the safest and most liquid asset. As I surgically explained, the ETFs GLD and SLV are NOT gold or silver. The question then becomes: Will capital move up or down the liquidity pyramid?

How did gold perform in reaction to Bernanke’s announcement? A monstrous and almost immediate rise of about $60 per ounce. The gold cartel GATA has shined a light on must of had its hands full today. This is all the more ominous because gold is not just a commodity or portfolio asset but a currency which, through tools like GoldMoney, can be used in ordinary daily transactions. Because silver is also money; the chronic silver backwardation is equally if not more ominous.
http://www.runtogold.com/2009/03/federal-reserve-will-fail-with-quantitative-easing/

China said to support Russia on replacing dollar
MOSCOW -- China and other emerging nations back Russia's call for a discussion on how to replace the dollar as the world's primary reserve currency, a senior Russian government source said on Thursday.

Russia has proposed the creation of a new reserve currency, to be issued by international financial institutions, among other measures in the text of its proposals to the April G20 summit published last Monday.

Calls for a rethink of the dollar's status as world's sole benchmark currency come amid concerns about its long-term value as the U.S. Federal Reserve moved to pump more than a trillion dollars of new cash into the ailing economy late Wednesday.
http://www.gata.org/node/7279

Gold to Soar
By: Clive Maund
You may have heard the old saying that "the Market is the news", and it is true. You don't have to look for explanations regarding yesterday's response by the markets to the Fed's announcement that it will buy $300 billion of Treasuries, you only have to look at the reaction of the markets. The dollar index tanked by nearly 3% - it's biggest drop for over 2 decades. That alone tells you all that you need to know.

While the Fed is certainly very much to blame for the horrible dilemma in which it now finds itself, which has its roots in a litany of crassly irresponsible policies going back years, such as the slashing of interest rates to near zero in 2003 which ignited the housing boom and fuelled rampant leveraged speculation, one can understand why its present reactions to the financial crisis can be classed at best as clueless and at worst as desperate and reckless. Right now the hackneyed old saying "between a rock and a hard place" applies very well to the unenviable situation it finds itself in. Up until yesterday it had to make one of two choices, to support the Treasury market or not support it. Vast quantities of money have to be raised to finance the deficit, the government and to pay for the numerous bailouts, requiring the issue of a flood of new Treasuries. The problem is that overseas buyers are abandoning ship - they don't want them anymore because they have a miniscule yield, and besides they have plenty of problems at home that require urgent attention. This means that the US Treasury market is verging on collapse, and in the absence of intervention it will collapse. To prevent this and the resulting ruinous spike in interest rates, the Fed and the Treasury would have to monetise the new Treasuries, in other words, buy their own rubbish, and to do this this they will have to create vast quantities of new dollars. Yesterday was a momentous day because the Fed came down off the fence and announced that this is exactly what they they are going to do. Of course, major financial news networks tried to put a positive spin on it by proclaiming that this "would ensure adequate liquidity for the upcoming economic recovery", but the real news was the reaction of the dollar, which plummetted like a lead balloon. This news telegraphs that the course has been set towards collapse of the dollar and hyperinflation because yesterday's announcement has opened the floodgates - they can't stop with buying $300 billion of this stuff, just like the bailouts they will find themselves obliged to buy more and more until they crumple up completely like an exhausted junkie. If the Fed thinks it can prop up the Treasury market by creating money to backstop it, it is in for a rude awakening - the huge near 3% drop in the dollar index yesterday will have scared the **** out of foreign investors in US government paper. So Treasuries spiked yesterday, but the gains were almost entirely erased by the drop in the dollar, and then you have to factor in the drop in the yield for potential new buyers. So in an environment where the Fed and Treasury are going to have to create dollars, i.e. dilute the currency, to prop up financial instruments which have almost zero yield, due to a serious shortfall of demand, meaning that their real worth will decline because of the steeply depreciating currency, who but a complete imbecile is going to buy them? Less and less investors is the answer, and that being the case the Treasury market will collapse in due course anyway despite, and perhaps even because of the Fed's desperate and reckless attempts to backstop it.
http://news.goldseek.com/CliveMaund/1237478622.php

In Case You Missed It

US Feb Housing Starts Unexpectedly Surge
WASHINGTON -(Dow Jones)- Home construction unexpectedly surged in February, rebounding somewhat from seven consecutive declines as apartments soared and single-family housing rose weakly.

Housing starts increased 22.2% to a seasonally adjusted 583,000 annual rate compared to the prior month, after plunging 14.5% in January to 477,000, the Commerce Department said Tuesday. Originally, Commerce reported January starts down 16.8% to 466,000.

But the stunning data don't reverse the grim fundamentals that have eroded the housing sector. Year over year, housing starts were 47.3% below the pace of construction in February 2008. High inventories and declining sales are discouraging builders. A report Monday showed their confidence remains in the dumps. The National Association of Home Builders' housing market index held constant at 9 in March. Recent government data said new-home sales sank in January a sixth month in a row, down nearly 50% from the year-earlier level. The supply of new homes at the current sales rate on the market rose to 13.3, a very high number that's helping drive down prices. The falling prices, in turn, are pushing would-be buyers away from signing off on property. Rising layoffs and tight credit are also turning them away. Buyers are snapping up distressed properties that have multiplied with increased foreclosures; this prices new homes out of the market and further idles builders.

Driving the surge in starts was apartment construction. But construction in February of single-family homes and apartments rose, too. Single-family starts increased 1.1% to 357,000. Construction of housing with two or more units climbed 82.3% to 226,000; within that category, groundbreakings of homes with five or more units - or multi-family - were 79.7% higher.
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=af865331-6d71-4e1b-ae44-a14e5268d41c

The headline flat out LIES!

US PPI Up 2nd-Straight Month; Easing Deflation Risk
WASHINGTON (Dow Jones)--U.S. producer prices rose for a second-straight month in February, easing worries somewhat about the risk of protracted, economy-wide price declines known as deflation.

Still, the overall increase was less than expected, and with pipeline measures of intermediate and raw materials prices both down for a seventh-straight month, a resurgence of inflation doesn't seem likely either.

That should in turn free up Federal Reserve officials to continue pursuing expansionary policies to stabilize financial markets and revive the economy.
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=7eff5df1-2b41-4fcf-aed4-d4337a3fbd88

Somebody, please explain to me how a "resurgence of inflation doesn't seem likely" if Federal Reserve officials "continue pursuing expansionary policies...to revive the economy." That is the most pathetic reporting I've found today...

US capital flows negative in January
WASHINGTON (AFP) — Foreign investors sold a net 43 billion dollars in long-term US securities in January as the flow of capital turned negative, US Treasury data showed Monday.

The decline in foreign holdings was the steepest since August 2007.

The Treasury data showed a decline in both private purchase and official government or central bank purchases of US securities, including US Treasury and agency bonds, and to a smaller degree, equities.

When short-term securities are added to the figures, it shows a capital deficit of 148.9 billion dollars.
http://www.google.com/hostednews/afp/article/ALeqM5gb0pEBUTG_1hyqKl2RsoE-Ms28jQ

Considering last months $36 BILLION Trade Deficit, these TIC flows numbers for January should be ALARMING. The country came up $79 BILLION short of covering the most recent monthly Trade Deficit [-$43 + -$36 = -$79 BILLION ].

The monthly Treasury International Capital report [TIC flows] measures net capital flows crossing U.S. borders, or how much capital comes to the U.S. from other countries and how much capital leaves the U.S. for other countries. The difference between the two reflects the current account balance.

This is "potentially" very bad news for the US Treasury Bond market moving forward. US Dollar negative, and a huge positive for Gold.

And last on our news you may have missed list:

President Obama and Sen. Dodd were the two largest recipients of campaign contributions from the beleaguered company, and the only politicians to garner six-figure amounts from AIG in 2008 — $103,100 for Sen. Dodd and $100,332 for presidential candidate Obama.

This little revelation should gather some legs as the week moves along. The Obama "outraged"?
Yeah, right....

Needless to say: BUY GOLD!

Actually, Gold Poised To Rally WITH Stocks

Quite possibly, one of the biggest fears in Gold Bugs minds today is that if stocks should rally, Gold should crash. History says that does not seem likely. Golds natural inverse relationship to the US Dollar would also say that is unlikely.

Gold has rallied twice to $1000 now, mainly on waves of safe haven buying. Gold buying based on its usefulness as an inflation hedge has hardly been recognized yet. Consider if you will the fact that the Dollar has been rallying as stocks have been tumbling. Strangely, Gold has rallied right along with the Dollar as stocks fell, particularly over the past two months. But is it that strange? Gold is and always has been a "safe haven" during times of financial crisis. In many ways, so has the Dollar.

The not-so-safe haven [must read]
Like it or not, the US dollar still constitutes the de facto central framework of the present global financial order - the dollar is its fundamental support structure, much like the steel framework that supported the Twin Towers in New York. The global crisis is sending shockwaves of ever increasing intensity throughout the present order. Few thought the shaking would reach its present intensity and scope, and no one really knows how powerful and destructive the shaking might get before the crisis is over.

The initial, knee-jerk reaction in this situation has been to reach out and grab tightly onto the framework with both hands (that is, in an exceptionally risk-averse reflex, flee into the dollar for relative safety) and hold on for dear life. This reaction of global investors is motivated partly by logic but also in large part by the strong psychological components of uncertainty, fear and even panic.

The massive global rush into the dollar as a safe haven would appear to indicate that we don't have much to worry about respecting international trust and confidence in the dollar. That might well be true if it could be clearly established that such a global move has been strategic in nature and well thought-out and as such has come as a result of rationality, logic and reason much more than being merely a tactical move as a result of fear and panic. Some important questions must be posed here:

Are investors such as China, which likely holds 70% of its reserves in dollar-denominated assets, satisfied to remain in the dollar for the foreseeable future, and satisfied to increase exposure to the dollar, or do its central bank governors increasingly find themselves having to hold their noses, as it were, with respect to their exposure to the dollar? Is their concern flaring?

Are global doubts and fears mounting with respect to the appeal of the dollar as a safe store of wealth beyond the short term?

If the answer to the question above is yes, then is the appeal of the dollar being undermined mostly because of fears over the potential effects of the dollar-debasing policies that are now irreversibly being implemented in Washington?

Are key investors like China's central bank increasingly looking for ways to reduce exposure to the dollar?

Is the dollar facing significantly increasing competition from other safe haven stores of wealth, such as gold?

Gold's increasing appeal as a safe haven, demonstrated by its ongoing surge, adequately answers the last question. From the start of January 2009 until mid-February, gold has surged from around $800 per ounce to near $1,000 per ounce and is likely to rise further. This surge coincides with the raft of official data releases since the start of 2009 that demonstrate the US and global financial systems and economies are moving deeper into crisis. Investors increasingly see the value of investing in hard assets, and in times of uncertainty and crisis gold and other precious metals are usually the ultimate investment in that category.
http://www.atimes.com/atimes/China_Business/KC17Cb02.html

And what happened to the Twin Towers when the steel framework melted? And what do suppose will happen to the World Economy when the US Dollar melts down? Bin laden knew exactly what he was doing....

But we were wondering about a rally in stocks. Will Gold crash with a rally in stocks? NO. The US Dollar will. And once the Dollar begins to crumble, inflation takes over and the price of everything begins to rise: Oil, wheat, copper, corn, Gold, Silver. If it's a commodity, the price will rise with a falling Dollar. The price of stocks will rise, the prices of homes will rise...the price of EVERYTHING will rise. The US government has set us on a path of destruction far worse than anything we are witnessing today. Far, far worse... Shortages created by the "scare" of deflation today, will exponentially force prices of commodities ever higher, much higher than just the inflation will.

Gold and the SPX [must read]
Adam Hamilton March 13, 2009
As you know, between March 2003 and October 2007 the SPX powered 95.5% higher in a mighty cyclical bull market within a secular bear. With so much stock strength, if there was ever a time when demand for safe-haven assets faded this period had to be it. So was gold beaten to a pulp as the stock markets reached for the heavens, like traders expect today?

Not so you’d notice! To the very days of this long and strong 55-month SPX cyclical bull, gold powered 110.4% higher which exceeded the stock markets’ gains. Gold, marching to the beat of its own inherently bullish fundamentals, moved higher in a parallel bull market. Powerful multi-year bulls in the stock markets and gold are clearly not mutually exclusive. Gold can and does thrive even when stocks are strong as long as its own independent fundamentals remain bullish.

There is certainly some interplay between the fortunes of the stock markets and capital flowing into gold. Gold’s appeal as an alternative asset is definitely higher when traditional investments are not faring well. But realize that the relationship between gold and the SPX is far more nuanced and complex than merely a direct inverse or even parallel relationship. The SPX is not, and never has been, gold’s primary driver.

I looked at gold versus the SPX over a variety of major spans which are noted above. Gold was not only up more than the SPX during stocks’ long bull, but it far outperformed the SPX during the nasty bear we’ve suffered. Between October 2007 and this past Monday, a horrific span where the SPX lost 56.8% of its value, gold actually rallied 24.8% to the very days. Gold tends to thrive during stock bears in history.

But this is a general relationship that is most apparent over long spans. If you carve the data into shorter spans, every possible relationship between gold and the SPX can be observed. For example, from gold’s all-time nominal high in March 2008 to its panic low in November 2008, this metal fell 29.3%. Over this same slice of time the SPX bled 33.2%. Periods like these when gold travels parallel with the SPX cause problems for the gold-opposing-stock-markets thesis.
In the most recent major period for gold, from its November lows until late February, the metal powered 39.6% higher. Over this period of time the SPX fell 12.8%. This particular period buttresses the gold-opposing-stock-markets argument and is the major reason why this thesis is growing in popularity today. But just like during gold’s parallel bull market with the SPX from early 2003 to late 2007, gold’s behavior relative to the SPX since its extreme volatility erupted last summer is also nuanced and complex.

During the most intense stock-market months seen in our lifetimes, gold paralleled the SPX’s direction. This is provocative because the coming SPX rally ought to be extreme too given the incredible degree of oversoldness it has weathered. You can certainly build the case based on gold’s recent performance that it is far more likely to follow an extreme SPX rally higher than wither and die as many traders expect.

It is not that gold is positively or negatively correlated with the stock markets, but that gold is simply not correlated with the stock markets lately! Sometimes gold and the SPX happen to both be rising, other times they both happen to be falling, and still other times they diverge for a spell.

During the stock panic, investors dumped everything (including gold at times) to exit the chaos and raise cash fast. They moved this cash into short-term US Treasuries, which seemed like the safest place for capital at the time. But foreign investors, after selling stocks in their local markets, had to first buy US dollars before they could park in US Treasuries. This drove an unprecedented dollar rally. As futures traders saw the dollar skyrocket, they sold gold aggressively. It was really something to behold.

The inverse correlation between the SPX and the US Dollar Index (USDX) was stellar, especially on particularly fear-laden days of intense SPX selling. The USDX hit new rally highs on the very days the SPX fell to new lows in October and November and then again in the last couple weeks. Falling to new bear lows in the SPX always drove dollar buying, and the resulting incredible USDX strength often hit gold. So in an indirect way via the dollar, the stock panic did indeed affect the gold price.

Provocatively though, this indirect relationship actually means that a major SPX rally will be very bullish for gold, not bearish. As the inevitable SPX recovery rally accelerates, this USDX trend will reverse. Capital hiding in Treasuries will exit to hunt for the widespread bargains in the stock markets. Foreign investors will sell their Treasuries and then sell their dollars to repurchase their local currencies to buy stocks on their local exchanges. Thus the US dollar should fall fast in an accelerating SPX rally.

And a falling dollar means futures traders will get really interested in gold and bid it up rapidly. So due to the dollar’s unique role in this crazy stock episode, there is actually a very high probability that the SPX’s recovery will indirectly lead to a big surge in gold. This relationship is only apparent through careful study though. If you let your emotions take a recent day or two of gold opposing the stock markets out of context, you’ll totally miss it.
http://www.zealllc.com/2009/goldspx.htm

The bottom line is this. Gold Bugs need to immediately quit looking for reasons to sell their Gold, and start embracing the countless reasons to own Gold. The daily nonsense on the CRIMEX is just that, NONSENSE! No physical Gold is being bought OR sold on the CRIMEX. The CRIMEX is a den of derivatives managed by the long arm of the US Federal Reserve: JP Morgan. JP Morgan is a financial nuclear accident waiting to happen...it's days are numbered. If you have paid in full, and taken possession of your Gold and Silver, you have NOTHING to fear, but fear itself. If you control Gold and Silver with margin you know, or should know, that there is risk, but the risk is more to the upside now than down. Shorting these markets is a fools game. Traders, buy weakness and sell strength, pure and simple...don't focus on the tops and the bottoms in moves, focus on the middle of the moves if you must trade...that's where there's money to be made. Above all else, scoff at any suggestion that Gold is in a bubble. Nothing could be further from the truth.