The currency markets continued their consternation today over the future of Greece, her debts, and the supposed effect it will have on the Euro community. This of course again weighed on the Precious Metals as "uncertainty' once again drove the lemmings into the safe-have we laugh at, the US Dollar.
The Dollar once again found stiff resistance to any move higher just above 81 on the US Dollar Index. The Dollar began a slow fade around 9AM est. and sits near it's low of the day here mid afternoon. I can only chuckle at the madness.
The Precious Metals got whacked right on schedule as the CRIMEX opened at 8:20AM est this morning. Gold QUICKLY fell from 1105 to 1092 in about 30 minutes wherein the Dollar topped out, rolled over, and Gold began a bounce that lasted until 30 minutes before the CRIMEX close, topping at 1102 around 1PM est.
Gold bounced at support near 1090 as many have suggested it would. It remains to be seen how much follow thru we can expect in light of this weeks $144 BILLION in Treasury Auctions. Every effort will be made to persuade investors that US Debt is a much safer investment than Gold.
Today's Dollar bid and hit on Gold both appear ridiculous considering the US Congress had managed to throw another $1 TRILLION log onto the all consuming debt inferno overnight with the passage of the historically flawed Health Care Bill. Only in American can a politician convince doubters that he is saving money and cutting the federal budget deficit while spending money. Money he doesn't even have mind you.
Bored by the deceit on the CRIMEX I turned to review the other crime being committed in Washington. The passage of Obamacare. Talk about crimes of the century... Change nobody believes in.
Governments never give us anything; they simply take. Small governments take a small amount and large governments take…everything.
-Larry LaBorde, Silver Trading Company
It was more than amusing last evening listening to the Democrats tout their health care bill. More than one misguided advocate compared their health care bill to the passing of Medicare in 1966 and Social Security in 1935. I suppose if you look at these "social programs" as the unfunded liabilities that they are, then yes the Democrats health care bill is comparatively another burden of debt on an already overburdened society of unfunded debt. In many respects, the Democratic health care bill has simply pushed America one step closer to a hyperinflationary depression.
Healthcare Bill to Cause U.S. Hyperinflation By 2015
The National Inflation Association today issued a warning to all Americans of a potential outbreak of hyperinflation in the U.S. by year 2015 caused primarily by the healthcare bill and rising interest payments on our national debt.
Medicare was created in 1966 at a cost of $3 billion per year and the House Ways and Means Committee estimated in 1966 that in 1990 the cost of Medicare would reach $12 billion per year. Instead, the actual cost of Medicare in 1990 was $107 billion (792% more than what was projected) and today Medicare costs $408 billion annually. In 2003, the White House Office of Management and Budget estimated that the Iraq War would have a total cost of $50 to $60 billion. So far, we have already spent $713 billion on the Iraq War (over 1,000% more than what was projected).
The Congressional Budget Office is estimating that the health care bill will cost $940 billion over the next 10 years, but if history is any indication, the actual cost will likely be several trillion dollars. NIA believes the health care bill will be the final nail in the coffin of the U.S. economy and will just about guarantee that we will see hyperinflation by the year 2015.
The U.S. government last week reported a record monthly budget deficit for February 2010 of $220.9 billion. Total tax receipts for the month were only $107.5 billion compared to outlays of $328.4 billion. The total U.S. deficit for the first five months of fiscal year 2010 was $651.6 billion, with tax receipts of $800.5 billion and outlays of $1.45 trillion. The deficit was up 10.5% for the first five months of fiscal year 2010 over the same period in fiscal year 2009.
We are now at a point where if the U.S. government taxed Americans 100% of their income, the tax receipts generated would not be enough to balance the budget. Likewise, if the U.S. government cut 100% of its spending including defense, but kept paying Social Security, Medicare and Medicaid, we would still have a budget deficit. NIA believes it will be impossible for the U.S. to have a balanced budget ever again.
http://inflation.us/hyperinflation2015.html
Medicare, the crutch every Democrat leans on to support their Health care Bill, has proven over the life of it's existence to be horrifically more costly than the politicians who created it lead us to believe. Will Obamacare be any different?
House sends health care overhaul bill to Obama
On the cusp of succeeding where numerous past congresses and administrations have failed, jubilant House Democrats voted 219-212 late Sunday to send legislation to Obama that would extend coverage to 32 million uninsured Americans, reduce deficits and ban insurance company practices such as denying coverage to people with pre-existing medical conditions.
"This is what change looks like," Obama said later in televised remarks that stirred memories of his 2008 campaign promise of "change we can believe in."
"We proved that this government -- a government of the people and by the people -- still works for the people."
"We will be joining those who established Social Security, Medicare and now, tonight, health care for all Americans," said Pelosi, D-Calif., partner to Obama and Senate Majority Leader Harry Reid in the grueling campaign to pass the legislation.
"This is the civil rights act of the 21st century," added Rep. Jim Clyburn of South Carolina, the top-ranking black member of the House.
GOP lawmakers attacked the legislation as everything from a government takeover to the beginning of totalitarianism, and none voted in favor. "Hell no!" Minority Leader John Boehner, R-Ohio, shouted in a fiery speech opposing the legislation. "We have failed to listen to America and we have failed to reflect the will of our constituents."
The nonpartisan Congressional Budget Office said the legislation awaiting the president's approval would cut deficits by an estimated $138 billion over a decade. For the first time, most Americans would be required to purchase insurance, and face penalties if they refused. Much of the money in the bill would be devoted to subsidies to help families at incomes of up to $88,000 a year pay their premiums.
http://finance.yahoo.com/news/House-sends-health-care-apf-2440271559.html?x=0&sec=topStories&pos=8&asset=&ccode=
O puh-leeeeze! Stop the parade of lies and twisted facts right here. Obamacare is in no way, shape, or form a 21st century civil rights act. Shout that dowm immediately. If the Democrats want to hang their hats on the same rack as Medicare and Social Security, let them. The two combined represent the bulk of the debt burden the nation faces today. Obamacare is sure to be the rock that tips the scales towards default on that debt.
If this is what change looks like, then somebody please poke my eyes out.
"We proved that this government -- a government of the people and by the people -- still works for the people."
Uh, yeah right... By hook and by crook, backroom handshakes, and public bribes this "legislation" was passed into law completely against the wishes of a majority of Americans. If America still had a "government of the people and by the people" this bill would have never been brought to a vote, let alone passed into law. This isn't leadership. This is the dawn of facism in America.
The single most amusing, and abused, claim of the Democrats voting for this bill was their mantra that Obamacare will "cut the deficit by $138 BILLION over the next ten years." Well BFD [big f***ing deal]! $138 Billion Dollars is a pittance when looked at in the context of America's national debt. At over $12.5 TRILLION and growing today, that $138 Billion represents ONLY 1% of the total deficit today. Considering that the deficit is projected to rise to $14 TRILLION by October of this year, it is a completely insignificant claim. To put their $138 billion Dollar savings into context, the Treasury will auction off $144 TRILLION Dollars of new debt JUST THIS WEEK! Nancy pelosi is completly full of....
Inside the Pelosi Sausage Factory
Last week Republican Rep. Mike Pence posted on his Facebook site that famous Schoolhouse Rock video titled "How a Bill Becomes a Law." It's clearly time for a remake.
Never before has the average American been treated to such a live-action view of the sordid politics necessary to push a deeply flawed bill to completion. It was dirty deals, open threats, broken promises and disregard for democracy that pulled ObamaCare to this point, and yesterday the same machinations pushed it across the finish line.
Perhaps the most remarkable Democratic accomplishment this week was to make the process of passing ObamaCare as politically toxic as the bill itself.
President Obama was elected by millions of Americans attracted to his promise to change Washington politics. These were voters furious with earmarks, insider deals and a lack of transparency. They were the many Americans who, even before this week, held Congress in historic low esteem. They'll remember this spectacle come November.
http://online.wsj.com/article/SB10001424052748703775504575136133814210008.html?mod=WSJ_newsreel_opinion
America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.
– Abraham Lincoln
Got Gold Report - Letter to CFTC on Position Limits for Gold, Silver
By: Gene Arensberg
Dear Chairman Gensler and Commissioners,
Certainly you all would agree with this statement: “No futures trader should be able to dominate the market or be able to achieve such an overwhelming size of positioning on one side of the market that it would intimidate the majority of traders in that market.” Such a statement should be foremost in the policy totem pole of futures market regulators. However, the fact is that just such an egregious situation currently exists today in the U.S. precious metals futures markets, up to now apparently with the Commission’s blessing.
The American people want to know why this Commission tolerates obvious and unfair market dominance by just a few well-connected, well-informed, well-funded and politically clever entities. Further, the American people look to you to end this inequity as one goal of this historic meeting.
Market dominance by a privileged few traders can only be accomplished if those few traders are granted a trading advantage, either by the rules themselves or by the regulator’s granting of exemptions to the rules. Truly fair and free markets cannot exist so long as one or just a few traders are allowed trading dominance.
...more:
http://news.goldseek.com/GoldSeek/1269237840.php
Monday, March 22, 2010
Saturday, March 20, 2010
Bullion Banks To The CFTC: "Up Yours!"
Well, I've got to say, it sure looks as if the despotic CRIMEX goons have told CFTC Chairman Gary Gensler where he can stick his commodities markets position limits. At exactly 10:10AM est, the wanton criminal of the CRIMEX dropped a 6,000 Gold contracts bomb on the market, and laughed in Mr. Gensler's face.
6,000 Gold contracts is the "equivalent" of 600,000 ounces of Gold. [6000 x 100 oz each] Of course, since these were CRIMEX short contracts, no real "physical Gold was sold Friday...just the illusion was.
If Mr. Gensler needed any more proof of the scam that these CRIMEX goons run day in and day out in New York, he need look no further than Friday's bogus Gold raid described above.
Please excuse me for wondering out loud, but is it not against the law "across the entire nation" to sell something you don't own?
I the Commitment of Traders report [for positions held at the close of trading on Tuesday, March 16th], the net short position in gold is a pretty chunky 242,295 contracts... 24.2 million ounces. The '4 or less' bullion banks are short 18.0 million ounces of that... and the '8 or less' traders [which includes the '4 or less'] are short 22.7 million ounces. This 22.7 million ounces represents 94% of the entire net short position.
As of March 17th there was ONLY 10,021,864 ounces of gold in the CRIMEX warehouses. The CRIMEX goons have clearly sold over 14 MILLION ounces of Gold than they have warehoused. This is against the law! No if, ands, or buts about it Mr. Gensler. If I can see the crime here, why can't you?
Why was Gold bombed in this particular fashion on this particular day? Friday was Quadruple-Witching:
Quadruple Witching occur 4 times per year on the 3rd Friday of March, June, September and December. It refers to the expiration day of stock options, index futures, index options and single stock options futures. This day use to be referred to simply as Triple Witching prior to the advent of single stock futures in 2002.
Obviously a major hit on Gold would stand to benefit those short the Gold shares and their indexes. Factor in the huge number of in the money options on Gold between 1100 and 1150 set to expire late next week [not to mention $144 BILLION in new treasury debt to be sold next week] and the raid on Gold is easily comprehended. That doesn't justify it, or make it legal, but simply explains why it "probably" occurred.
As seen on Harvey Organ's - The Daily Gold [http://harveyorgan.blogspot.com/], Richard Guthrie in a letter to CFTC Commisioner Bart Chilton yesterday afternoon wrote:
Subject: Fw: Price Plunge orchestrated from the dumping of 6,000 sell orders
Bart,..
Inquiring with my broker as to what initiated today's almost instantaneous $20 plunge in the price of Gold, he said that one of the Bullion Banks had reputably dumped 6000 sell orders onto the Comex!..
If correct, this is an enormous single sell order and difficult to see as for any other purpose than manipulation in order to lower prices!.. After all there is no way any seller could hope to maximize his price by selling in such a manner!..
I can't help but feel this is something to do with the fact that there's some 50,000 April call and put options due to expire a week today, within the $1,100-$1,150 strike range,.. With contracts equating to the equivalent of circa 160 tonnes of gold at stake, there is a serious interest from a major short or two in seeing the price down below $1,100!..
What a circus the Futures Market has become,.. Please, please, please will the CFTC get a grip of this, as it's inevitable outing sometime in the future will make liable fools of all those who were in the knowledge but did nothing to arrest the irregular,..
Any individual stopped out or panicked to sell from today's orchestrated price plunge has been robbed in the same way as a woman mugged of her purse by a crack addict,.. The only difference is that when caught the crack addict must contemplate the error of his ways from a prison cell, whilst a banker does it from the confines of his New York Mansion!..
Yours faithfully,..
Richard Guthrie
Better to rig the markets, than pay out to those that bet the shares indexes would be higher come options expiration. Can it get anymore crooked than this? Probably...
The Greece Bailout Is Falling Apart
The Greek premier is now threatening to go to the IMF for help if the Eurozone won't come up with hard bailout numbers soon.
These are pretty tough words for someone asking for money:
Telegraph:
"We have the worst of the IMF and none of the advantages. This is where Europe must come in and provide what the IMF can offer. Or Greece will have to go to the IMF. We hope that will not be necessary," he said.
"I prefer a European solution as part of the eurozone, to show the world that Europe can act together. This is not to ask for money but to have an instrument on the table to stop the speculation. We expect the EU to live up to the challenge facing it. We are a eurozone country," he said.
Some believe Greece can borrow money more cheaply from the IMF than from Europe.
Sources in Washington say Greece can expect to borrow from the IMF at around 3.25pc. While the EU has not specified its own terms, the Eurogroup said this week that any help would come at a punitive rate above the borrowing costs for other EU states, suggesting a rate of 4pc to 5pc.
So what's the problem? Why might Europe be scared into caving to Greek demands? Because if Greece goes to the IMF, some believe credibility in the euro would be shattered since it would be seen as unable or unwilling to support its member countries when in trouble. Thus Mr. Papandreou is playing a game of chicken he thinks he can win.
http://www.businessinsider.com/the-greece-bailout-is-falling-apart-2010-3
I don't recall a bailout ever being announced...so how can it fall apart?
Euro retreats vs dollar on nagging Greece worries
NEW YORK, March 19 (Reuters) - The euro fell on Friday and was headed for its worst week since January as traders fretted whether Greece will secure euro-zone aid to tackle its debt crisis, while worries about the UK economy hit sterling.
A report on Thursday that Greece saw limited prospects for euro-zone assistance raised doubts about the country's ability to service its debt. On Friday, the euro fell as far as $1.3502, its lowest level in more than two weeks. It was down 1.7 percent this week, its worst showing since late January.
Greece also said it may have to turn to the International Monetary Fund for help, though it dismissed news reports that it was planning to do so as early as April. [ID:nLDE62H0LL].
"The tensions surrounding Greece are escalating. This whole IMF situation has become a game of brinkmanship and the whole uncertainty is undermining the euro," said Michael Woolfolk, senior currency strategist, at BNY Mellon in New York.
http://www.reuters.com/article/idUSN1916082120100319?type=usDollarRpt
I've said it before, and I'll say it again:
"Greece is but a pimple on an elephant's ass when compared to California."
If the only thing keeping the US Dollar from falling off a cliff is "uncertainty" about the Euro, then the Dollar is in a whole lot worse shape than we can imagine. The financial truth about the "states" here in America is bubbling just below the surface of the media's attention. The Euro would be better off without Greece, I don't think the USA can say the same about California. Or New York, or Illinois, or New Jersey, or Pennsylvania, or... Absent the media's unending "coverage" of the Obamacare Disgrace, the front pages would be covered with stories about the impending demise of over half the States in the Union. Of course by the time the media gets around to "reporting this news", it will be old news.
Unemployment soars in U.S. metropolitan areas
WASHINGTON (Reuters) - Unemployment rates in 363 U.S. metropolitan areas rose in January, and 346 areas reported year-on-year declines in their number of jobs, the Labor Department said on Friday.
Nearly 200 metropolitan areas reported jobless rates of at least 10 percent in January, showing that unemployment problems persist at the local level.
http://finance.yahoo.com/news/Unemployment-soars-in-US-rb-2832842271.html;_ylt=AkCJ2ZnFfNc_P1A_nCG2FhO7YWsA;_ylu=X3oDMTE1YXRuNGFnBHBvcwM3BHNlYwN0b3BTdG9yaWVzBHNsawN1bmVtcGxveW1lbnQ-?x=0&sec=topStories&pos=5&asset=&ccode=
This data seems to run counter to what the Federal Government is telling us about employment. It would appear things are not quite as rosy as they would like us to believe with their convoluted unemployment numbers. Not only that, but this sure looks like a great reason to dump 6,000 Gold contracts onto the CRIMEX exchange on a Friday morning.
Federal Reserve Must Disclose Bank Bailout Records
March 19 (Bloomberg) -- The Federal Reserve Board must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a federal appeals court said.
The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Brothers Holdings Inc. The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released.
The Fed had argued that disclosure of the documents threatens to stigmatize borrowers and cause them “severe and irreparable competitive injury,” discouraging banks in distress from seeking help. A three-judge panel of the appeals court rejected that argument in a unanimous decision.
The U.S. Freedom of Information Act, or FOIA, “sets forth no basis for the exemption the Board asks us to read into it,” U.S. Circuit Chief Judge Dennis Jacobs wrote in the opinion. “If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute.”
The opinion may not be the final word in the bid for the documents, which was launched by Bloomberg LP, the parent of Bloomberg News, with a November 2008 lawsuit. The Fed may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aUpIaeiWKF2s
The Fed was assuredly not happy with this news. This was probably an even better reason to dump 6,000 Gold contracts onto the CRIMEX Friday morning. This is huge news. Just the fact that a US Court ruled AGAINST the Fed is huge news, but the implications of this for the Fed going forward as the public seeks disclosure about the Fed's shenanigans are immense.
GATA Chairman Murphy's planned testimony to the CFTC
The formal statement GATA Chairman Bill Murphy plans to submit as a witness at the U.S. Commodity Futures Trading Commission's hearing next week on position limits in the precious metals futures and options markets has been posted at GATA's Internet site, complete with footnotes, here:
http://www.gata.org/files/CFTCLetterUP2-03-18-2010.doc
Now this could be reason to dump 6,000 Gold contracts onto the CRIMEX on a Friday morning.
"Put that in your pipe and smoke it Mr. GATA!" crow the CRIMEX goons.
This from Warren Bevan's weekly email:
John Williams of Shadowstats calculates government numbers as they
were once reported before the inputs were changed in order to make results
appear better than they are in reality.
Using metrics of days gone by and not using seasonal adjustments he
calculated the inflation adjusted 1980 high of $850, to be $7,494/oz in today’s
devalued dollars. That’s more like it!
Using the same metrics he calculated that silver would have to hit, sit
down now, $436/oz in order to hit it’s 1980 high of 49.45 in today’s dollars.
Watch the Bond Market, not Bank Lending or Velocity
The important point to note is that deflationary forces lead to hyperinflation. Once again, it is not demand, bank lending or increased velocity. Those things do not trigger severe inflation; they merely can be a symptom after the trigger. And by the way, increased velocity is basically another form of increased demand. Fundamentally, they are no different.
Is anyone paying attention to the first domino in the sovereign debt crisis?
Iceland’s Economy Shrinks 8% as Prices rise by 11%. Deflationary forces are causing severe inflation, as Iceland’s government is bankrupt. Moreover, bank lending in both the US and the UK has been sliding, yet we see price inflation increasing in the UK and starting to pickup in the US. Even amidst deflation in the private sector, Gold has risen to an all time high against both the Dollar and the Pound and also the Euro.
The deflationists have it backwards. As we’ve illustrated, severe deflation is what leads to hyperinflation. Debt crisis’ go hand in hand with currency crises. In fact, if we had an increase in bank lending, consumption and velocity, we’d be assured we wouldn’t have hyperinflation. We’d end up with rising price inflation for certain, but not hyperinflation. Hyperinflation has never occurred at a time of strong or growing demand.
So what is the real debate then?
The debate and discussion should be about the bond market. If one were against the hyperinflation scenario, then they would have to think the bond market is going to hold up. If one believes we will see severe inflation then they have to believe in a major break in the bond market. We don’t believe in Weimar or Zimbabwe style hyperinflation. That is just too extreme. We do believe that we will see severe inflation worldwide as a result of a loss of confidence in governments and currencies. Falling bond markets and rising interest rates will reflect this.
For Gold watchers, now is the time to start watching the relationship between Gold and bonds. According to Wikipedia, the worldwide bond market is $82 trillion and the US bond market is $34 trillion. Clearly, the crowded trade is bonds. Gold’s bull market will accelerate when money starts to move out of bonds and into Gold.
http://news.goldseek.com/GoldSeek/1269010800.php
6,000 Gold contracts is the "equivalent" of 600,000 ounces of Gold. [6000 x 100 oz each] Of course, since these were CRIMEX short contracts, no real "physical Gold was sold Friday...just the illusion was.
If Mr. Gensler needed any more proof of the scam that these CRIMEX goons run day in and day out in New York, he need look no further than Friday's bogus Gold raid described above.
Please excuse me for wondering out loud, but is it not against the law "across the entire nation" to sell something you don't own?
I the Commitment of Traders report [for positions held at the close of trading on Tuesday, March 16th], the net short position in gold is a pretty chunky 242,295 contracts... 24.2 million ounces. The '4 or less' bullion banks are short 18.0 million ounces of that... and the '8 or less' traders [which includes the '4 or less'] are short 22.7 million ounces. This 22.7 million ounces represents 94% of the entire net short position.
As of March 17th there was ONLY 10,021,864 ounces of gold in the CRIMEX warehouses. The CRIMEX goons have clearly sold over 14 MILLION ounces of Gold than they have warehoused. This is against the law! No if, ands, or buts about it Mr. Gensler. If I can see the crime here, why can't you?
Why was Gold bombed in this particular fashion on this particular day? Friday was Quadruple-Witching:
Quadruple Witching occur 4 times per year on the 3rd Friday of March, June, September and December. It refers to the expiration day of stock options, index futures, index options and single stock options futures. This day use to be referred to simply as Triple Witching prior to the advent of single stock futures in 2002.
Obviously a major hit on Gold would stand to benefit those short the Gold shares and their indexes. Factor in the huge number of in the money options on Gold between 1100 and 1150 set to expire late next week [not to mention $144 BILLION in new treasury debt to be sold next week] and the raid on Gold is easily comprehended. That doesn't justify it, or make it legal, but simply explains why it "probably" occurred.
As seen on Harvey Organ's - The Daily Gold [http://harveyorgan.blogspot.com/], Richard Guthrie in a letter to CFTC Commisioner Bart Chilton yesterday afternoon wrote:
Subject: Fw: Price Plunge orchestrated from the dumping of 6,000 sell orders
Bart,..
Inquiring with my broker as to what initiated today's almost instantaneous $20 plunge in the price of Gold, he said that one of the Bullion Banks had reputably dumped 6000 sell orders onto the Comex!..
If correct, this is an enormous single sell order and difficult to see as for any other purpose than manipulation in order to lower prices!.. After all there is no way any seller could hope to maximize his price by selling in such a manner!..
I can't help but feel this is something to do with the fact that there's some 50,000 April call and put options due to expire a week today, within the $1,100-$1,150 strike range,.. With contracts equating to the equivalent of circa 160 tonnes of gold at stake, there is a serious interest from a major short or two in seeing the price down below $1,100!..
What a circus the Futures Market has become,.. Please, please, please will the CFTC get a grip of this, as it's inevitable outing sometime in the future will make liable fools of all those who were in the knowledge but did nothing to arrest the irregular,..
Any individual stopped out or panicked to sell from today's orchestrated price plunge has been robbed in the same way as a woman mugged of her purse by a crack addict,.. The only difference is that when caught the crack addict must contemplate the error of his ways from a prison cell, whilst a banker does it from the confines of his New York Mansion!..
Yours faithfully,..
Richard Guthrie
Better to rig the markets, than pay out to those that bet the shares indexes would be higher come options expiration. Can it get anymore crooked than this? Probably...
The Greece Bailout Is Falling Apart
The Greek premier is now threatening to go to the IMF for help if the Eurozone won't come up with hard bailout numbers soon.
These are pretty tough words for someone asking for money:
Telegraph:
"We have the worst of the IMF and none of the advantages. This is where Europe must come in and provide what the IMF can offer. Or Greece will have to go to the IMF. We hope that will not be necessary," he said.
"I prefer a European solution as part of the eurozone, to show the world that Europe can act together. This is not to ask for money but to have an instrument on the table to stop the speculation. We expect the EU to live up to the challenge facing it. We are a eurozone country," he said.
Some believe Greece can borrow money more cheaply from the IMF than from Europe.
Sources in Washington say Greece can expect to borrow from the IMF at around 3.25pc. While the EU has not specified its own terms, the Eurogroup said this week that any help would come at a punitive rate above the borrowing costs for other EU states, suggesting a rate of 4pc to 5pc.
So what's the problem? Why might Europe be scared into caving to Greek demands? Because if Greece goes to the IMF, some believe credibility in the euro would be shattered since it would be seen as unable or unwilling to support its member countries when in trouble. Thus Mr. Papandreou is playing a game of chicken he thinks he can win.
http://www.businessinsider.com/the-greece-bailout-is-falling-apart-2010-3
I don't recall a bailout ever being announced...so how can it fall apart?
Euro retreats vs dollar on nagging Greece worries
NEW YORK, March 19 (Reuters) - The euro fell on Friday and was headed for its worst week since January as traders fretted whether Greece will secure euro-zone aid to tackle its debt crisis, while worries about the UK economy hit sterling.
A report on Thursday that Greece saw limited prospects for euro-zone assistance raised doubts about the country's ability to service its debt. On Friday, the euro fell as far as $1.3502, its lowest level in more than two weeks. It was down 1.7 percent this week, its worst showing since late January.
Greece also said it may have to turn to the International Monetary Fund for help, though it dismissed news reports that it was planning to do so as early as April. [ID:nLDE62H0LL].
"The tensions surrounding Greece are escalating. This whole IMF situation has become a game of brinkmanship and the whole uncertainty is undermining the euro," said Michael Woolfolk, senior currency strategist, at BNY Mellon in New York.
http://www.reuters.com/article/idUSN1916082120100319?type=usDollarRpt
I've said it before, and I'll say it again:
"Greece is but a pimple on an elephant's ass when compared to California."
If the only thing keeping the US Dollar from falling off a cliff is "uncertainty" about the Euro, then the Dollar is in a whole lot worse shape than we can imagine. The financial truth about the "states" here in America is bubbling just below the surface of the media's attention. The Euro would be better off without Greece, I don't think the USA can say the same about California. Or New York, or Illinois, or New Jersey, or Pennsylvania, or... Absent the media's unending "coverage" of the Obamacare Disgrace, the front pages would be covered with stories about the impending demise of over half the States in the Union. Of course by the time the media gets around to "reporting this news", it will be old news.
Unemployment soars in U.S. metropolitan areas
WASHINGTON (Reuters) - Unemployment rates in 363 U.S. metropolitan areas rose in January, and 346 areas reported year-on-year declines in their number of jobs, the Labor Department said on Friday.
Nearly 200 metropolitan areas reported jobless rates of at least 10 percent in January, showing that unemployment problems persist at the local level.
http://finance.yahoo.com/news/Unemployment-soars-in-US-rb-2832842271.html;_ylt=AkCJ2ZnFfNc_P1A_nCG2FhO7YWsA;_ylu=X3oDMTE1YXRuNGFnBHBvcwM3BHNlYwN0b3BTdG9yaWVzBHNsawN1bmVtcGxveW1lbnQ-?x=0&sec=topStories&pos=5&asset=&ccode=
This data seems to run counter to what the Federal Government is telling us about employment. It would appear things are not quite as rosy as they would like us to believe with their convoluted unemployment numbers. Not only that, but this sure looks like a great reason to dump 6,000 Gold contracts onto the CRIMEX exchange on a Friday morning.
Federal Reserve Must Disclose Bank Bailout Records
March 19 (Bloomberg) -- The Federal Reserve Board must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a federal appeals court said.
The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Brothers Holdings Inc. The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released.
The Fed had argued that disclosure of the documents threatens to stigmatize borrowers and cause them “severe and irreparable competitive injury,” discouraging banks in distress from seeking help. A three-judge panel of the appeals court rejected that argument in a unanimous decision.
The U.S. Freedom of Information Act, or FOIA, “sets forth no basis for the exemption the Board asks us to read into it,” U.S. Circuit Chief Judge Dennis Jacobs wrote in the opinion. “If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute.”
The opinion may not be the final word in the bid for the documents, which was launched by Bloomberg LP, the parent of Bloomberg News, with a November 2008 lawsuit. The Fed may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aUpIaeiWKF2s
The Fed was assuredly not happy with this news. This was probably an even better reason to dump 6,000 Gold contracts onto the CRIMEX Friday morning. This is huge news. Just the fact that a US Court ruled AGAINST the Fed is huge news, but the implications of this for the Fed going forward as the public seeks disclosure about the Fed's shenanigans are immense.
GATA Chairman Murphy's planned testimony to the CFTC
The formal statement GATA Chairman Bill Murphy plans to submit as a witness at the U.S. Commodity Futures Trading Commission's hearing next week on position limits in the precious metals futures and options markets has been posted at GATA's Internet site, complete with footnotes, here:
http://www.gata.org/files/CFTCLetterUP2-03-18-2010.doc
Now this could be reason to dump 6,000 Gold contracts onto the CRIMEX on a Friday morning.
"Put that in your pipe and smoke it Mr. GATA!" crow the CRIMEX goons.
This from Warren Bevan's weekly email:
John Williams of Shadowstats calculates government numbers as they
were once reported before the inputs were changed in order to make results
appear better than they are in reality.
Using metrics of days gone by and not using seasonal adjustments he
calculated the inflation adjusted 1980 high of $850, to be $7,494/oz in today’s
devalued dollars. That’s more like it!
Using the same metrics he calculated that silver would have to hit, sit
down now, $436/oz in order to hit it’s 1980 high of 49.45 in today’s dollars.
Watch the Bond Market, not Bank Lending or Velocity
The important point to note is that deflationary forces lead to hyperinflation. Once again, it is not demand, bank lending or increased velocity. Those things do not trigger severe inflation; they merely can be a symptom after the trigger. And by the way, increased velocity is basically another form of increased demand. Fundamentally, they are no different.
Is anyone paying attention to the first domino in the sovereign debt crisis?
Iceland’s Economy Shrinks 8% as Prices rise by 11%. Deflationary forces are causing severe inflation, as Iceland’s government is bankrupt. Moreover, bank lending in both the US and the UK has been sliding, yet we see price inflation increasing in the UK and starting to pickup in the US. Even amidst deflation in the private sector, Gold has risen to an all time high against both the Dollar and the Pound and also the Euro.
The deflationists have it backwards. As we’ve illustrated, severe deflation is what leads to hyperinflation. Debt crisis’ go hand in hand with currency crises. In fact, if we had an increase in bank lending, consumption and velocity, we’d be assured we wouldn’t have hyperinflation. We’d end up with rising price inflation for certain, but not hyperinflation. Hyperinflation has never occurred at a time of strong or growing demand.
So what is the real debate then?
The debate and discussion should be about the bond market. If one were against the hyperinflation scenario, then they would have to think the bond market is going to hold up. If one believes we will see severe inflation then they have to believe in a major break in the bond market. We don’t believe in Weimar or Zimbabwe style hyperinflation. That is just too extreme. We do believe that we will see severe inflation worldwide as a result of a loss of confidence in governments and currencies. Falling bond markets and rising interest rates will reflect this.
For Gold watchers, now is the time to start watching the relationship between Gold and bonds. According to Wikipedia, the worldwide bond market is $82 trillion and the US bond market is $34 trillion. Clearly, the crowded trade is bonds. Gold’s bull market will accelerate when money starts to move out of bonds and into Gold.
http://news.goldseek.com/GoldSeek/1269010800.php
Thursday, March 18, 2010
Squeeze The Trigger
After touching 79.50 yesterday, and closing near that low of the day, the Dollar "miraculously" found a bit today to move it up and away from the cliff. Shockingly, this bid was not warranted by ANY positive change in the Dollar's fundamentals. Further weakness in the Euro because of never ending indecision regarding the fate of Greece "forced" the Dollar higher, as the Euro wilted under the continued uncertainty surrounding Greece.
In spite of the Dollar's "false sense of security", Gold was once again able to hold it's own, and gave no ground to the CRIMEX goons. Gold actually closed up on the day at 1127.60, missing our squeeze trigger by just 30 cents.
Silver waffled around unchanged all day as the entire commodity complex was corralled by the "mighty" Dollar... My growing curiosity with Silver is the CRIMEX warehouse numbers. Today there is almost 8 MILLION "more" ounces of Silver in the CRIMEX warehouse than there was at the beginning of March...AND 25 MILLION onces have stood for delivery. How can this be? Are they covering their shorts with Silver from the SLV ETF? One wonders how this Houdini act is being propagated.
The Precious Metals appear poised and prepared for a major battle. The Treasury Department said it will sell $44 billion in two-year notes, $42 billion in five-year debt, and $32 billion in seven-year notes next week. We can only imagine the Herculean efforts of the CRIMEX goons next week to persuade investors to shun Gold for that safe-haven of safe-havens, US Treasuries.
Between $118 BILLION of IOUs and the March 25 CFTC hearing regarding position limits in the Gold and Silver futures markets, the CRIMEX goons are going to be working overtime. They have already thrown the kitchen sink at these markets in an effort to suppress them. What's left?
Unemployment claims show long-term problem
NEW YORK (CNNMoney.com) -- The number of Americans filing continuing claims for unemployment insurance spiked last week, the Labor Department said Thursday, as sluggish hiring continues to drag on the labor market's recovery.
The number of people filing continuing claims jumped to 4,558,000 in the week ended Feb. 27, the most recent data available. That was up 37,000 from the preceding week's upwardly revised 4,521,000 claims.
Economists were expecting continuing claims to remain unchanged at 4,500,000.
Continuing claims reflect people filing each week after their initial benefit week until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved into state or federal extensions, or people whose benefits have expired.
"Continuing claims represent the pool of workers who have been unable to get back into the labor market quickly," said Robert Dye, senior economist at PNC Financial Services Group. "Long-term unemployment remains a significant problem and will remain a drag on the economy, as it has for some time now."
http://money.cnn.com/2010/03/11/news/economy/jobless_claims/?postversion=2010031112
Senators back bill to pressure China on currency
WASHINGTON (AP) -- A group of 14 U.S. senators unveiled legislation Tuesday that seeks to increase pressure on China to let its currency to rise in value against the dollar, saying Chinese "currency manipulation" is hurting the U.S. economy.
The bill calls for stiff trade sanctions if China does not act.
Treasury Secretary Timothy Geithner says the legislation is a sign of how strongly China's trading partners feel about the issue. In an interview on Fox Business Network, Geithner said that he believes Chinese officials "ultimately will decide it is in their interests to move."
Geithner declined to respond directly to a question of whether the Obama administration would support the bill backed by Sens. Charles Schumer, D-N.Y., Lindsey Graham, R-S.C., Debbie Stabenow, D-Mich., and 11 other senators.
"We are sending a message to the Chinese government," Schumer said in a statement. "If you refuse to play by the same rules as everyone else, we will force you to."
He said the issue is of critical importance at a time of high unemployment in the United States.
"There is no bigger step we can take to promote U.S. job creation, particularly in the manufacturing sector, than to confront China's currency manipulation," Schumer said.
American manufacturers contend that China's currency is undervalued by as much as 40 percent and is a big reason for the huge U.S. trade deficit with China, which totaled $226.8 billion, last year, the largest imbalance with any country.
A stronger yuan versus the dollar would make American products less expensive in China, while making Chinese goods more expensive for American consumers.
http://finance.yahoo.com/news/Senators-back-bill-to-apf-2627813146.html?x=0&sec=topStories&pos=3&asset=&ccode=
Be careful what you wish for you knuckleheads. A stronger Yuan will equal a weaker Dollar. So I fail to see how Geithner can continue to run around the world touting a "strong Dollar policy" if he believes the Yuan is undervalued.
Govt rewarded bank auditors with big bonuses
WASHINGTON (AP) -- As banks gambled on the risky mortgages that helped create the worst financial crisis in generations, the U.S. government handed out millions of dollars in bonuses to regulators at agencies that missed or ignored warning signs that the system was on the verge of a meltdown.
The bonuses, detailed in payroll data released to The Associated Press, are the latest evidence of the government's false sense of security during the go-go days of the financial boom. Just as bank executives got bonuses despite taking on dangerous amounts of risk, regulators got taxpayer-funded bonuses for doing "superior" work monitoring the banks.
The bonuses, released in response to a Freedom of Information Act request, were part of a reward program little known outside the government. Some government regulators got tens of thousands of dollars in perks, boosting their salaries by almost 25 percent. Often, though, rewards amounted to just a few hundred dollars for employees who came up with good ideas.
During the 2003-06 boom, the three agencies that supervise most U.S. banks -- the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the Office of the Comptroller of the Currency -- gave out at least $19 million in bonuses, records show.
Nearly all that money was spent recognizing "superior" performance. The largest share, more than $8.4 million, went to financial examiners, those employees and managers who scrutinize internal bank documents and sound the first alarms. Analysts, auditors, economists and criminal investigators also got awards.
After the meltdown, the government's internal investigators surveyed the wreckage of nearly 200 failed banks and repeatedly found that those regulators had not done enough:
http://finance.yahoo.com/news/Govt-rewarded-bank-auditors-apf-3698670682.html?x=0&sec=topStories&pos=6&asset=&ccode=
The headline should have read: Government Bank Auditors Paid To Look The Other Way
Central Bank Gold Holdings Expand at Fastest Pace Since 1964
March 18 (Bloomberg) -- Central banks added the most gold to their reserves since 1964 last year amid the longest rally in bullion prices in at least nine decades, data compiled by the World Gold Council show.
Combined holdings rose 425.4 metric tons to 30,116.9 tons, an increase worth $13.3 billion at last year’s average price, according to the data. India, Russia and China said last year they added to reserves. The expansion was the first since 1988, the data from the London-based council show.
Central banks, holding about 18 percent of all gold ever mined, are expanding their holdings for the first time in a generation as investors in exchange-traded funds amass bullion as an alternative to currencies. Holdings in the SPDR Gold Trust, the biggest ETF backed by the metal, are at 1,115.5 tons, more than the holdings of Switzerland.
“There’s clearly been a renaissance of gold in central bankers’ minds,” said Nick Moore, an analyst at Royal Bank of Scotland Group Plc in London. “It’s not just been central banks taking on gold, but a general shift for physical gold in the investment sector.”
http://www.bloomberg.com/apps/news?pid=20601012&sid=amBRPzwyB9SY
In spite of the Dollar's "false sense of security", Gold was once again able to hold it's own, and gave no ground to the CRIMEX goons. Gold actually closed up on the day at 1127.60, missing our squeeze trigger by just 30 cents.
Silver waffled around unchanged all day as the entire commodity complex was corralled by the "mighty" Dollar... My growing curiosity with Silver is the CRIMEX warehouse numbers. Today there is almost 8 MILLION "more" ounces of Silver in the CRIMEX warehouse than there was at the beginning of March...AND 25 MILLION onces have stood for delivery. How can this be? Are they covering their shorts with Silver from the SLV ETF? One wonders how this Houdini act is being propagated.
The Precious Metals appear poised and prepared for a major battle. The Treasury Department said it will sell $44 billion in two-year notes, $42 billion in five-year debt, and $32 billion in seven-year notes next week. We can only imagine the Herculean efforts of the CRIMEX goons next week to persuade investors to shun Gold for that safe-haven of safe-havens, US Treasuries.
Between $118 BILLION of IOUs and the March 25 CFTC hearing regarding position limits in the Gold and Silver futures markets, the CRIMEX goons are going to be working overtime. They have already thrown the kitchen sink at these markets in an effort to suppress them. What's left?
Unemployment claims show long-term problem
NEW YORK (CNNMoney.com) -- The number of Americans filing continuing claims for unemployment insurance spiked last week, the Labor Department said Thursday, as sluggish hiring continues to drag on the labor market's recovery.
The number of people filing continuing claims jumped to 4,558,000 in the week ended Feb. 27, the most recent data available. That was up 37,000 from the preceding week's upwardly revised 4,521,000 claims.
Economists were expecting continuing claims to remain unchanged at 4,500,000.
Continuing claims reflect people filing each week after their initial benefit week until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved into state or federal extensions, or people whose benefits have expired.
"Continuing claims represent the pool of workers who have been unable to get back into the labor market quickly," said Robert Dye, senior economist at PNC Financial Services Group. "Long-term unemployment remains a significant problem and will remain a drag on the economy, as it has for some time now."
http://money.cnn.com/2010/03/11/news/economy/jobless_claims/?postversion=2010031112
Senators back bill to pressure China on currency
WASHINGTON (AP) -- A group of 14 U.S. senators unveiled legislation Tuesday that seeks to increase pressure on China to let its currency to rise in value against the dollar, saying Chinese "currency manipulation" is hurting the U.S. economy.
The bill calls for stiff trade sanctions if China does not act.
Treasury Secretary Timothy Geithner says the legislation is a sign of how strongly China's trading partners feel about the issue. In an interview on Fox Business Network, Geithner said that he believes Chinese officials "ultimately will decide it is in their interests to move."
Geithner declined to respond directly to a question of whether the Obama administration would support the bill backed by Sens. Charles Schumer, D-N.Y., Lindsey Graham, R-S.C., Debbie Stabenow, D-Mich., and 11 other senators.
"We are sending a message to the Chinese government," Schumer said in a statement. "If you refuse to play by the same rules as everyone else, we will force you to."
He said the issue is of critical importance at a time of high unemployment in the United States.
"There is no bigger step we can take to promote U.S. job creation, particularly in the manufacturing sector, than to confront China's currency manipulation," Schumer said.
American manufacturers contend that China's currency is undervalued by as much as 40 percent and is a big reason for the huge U.S. trade deficit with China, which totaled $226.8 billion, last year, the largest imbalance with any country.
A stronger yuan versus the dollar would make American products less expensive in China, while making Chinese goods more expensive for American consumers.
http://finance.yahoo.com/news/Senators-back-bill-to-apf-2627813146.html?x=0&sec=topStories&pos=3&asset=&ccode=
Be careful what you wish for you knuckleheads. A stronger Yuan will equal a weaker Dollar. So I fail to see how Geithner can continue to run around the world touting a "strong Dollar policy" if he believes the Yuan is undervalued.
Govt rewarded bank auditors with big bonuses
WASHINGTON (AP) -- As banks gambled on the risky mortgages that helped create the worst financial crisis in generations, the U.S. government handed out millions of dollars in bonuses to regulators at agencies that missed or ignored warning signs that the system was on the verge of a meltdown.
The bonuses, detailed in payroll data released to The Associated Press, are the latest evidence of the government's false sense of security during the go-go days of the financial boom. Just as bank executives got bonuses despite taking on dangerous amounts of risk, regulators got taxpayer-funded bonuses for doing "superior" work monitoring the banks.
The bonuses, released in response to a Freedom of Information Act request, were part of a reward program little known outside the government. Some government regulators got tens of thousands of dollars in perks, boosting their salaries by almost 25 percent. Often, though, rewards amounted to just a few hundred dollars for employees who came up with good ideas.
During the 2003-06 boom, the three agencies that supervise most U.S. banks -- the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the Office of the Comptroller of the Currency -- gave out at least $19 million in bonuses, records show.
Nearly all that money was spent recognizing "superior" performance. The largest share, more than $8.4 million, went to financial examiners, those employees and managers who scrutinize internal bank documents and sound the first alarms. Analysts, auditors, economists and criminal investigators also got awards.
After the meltdown, the government's internal investigators surveyed the wreckage of nearly 200 failed banks and repeatedly found that those regulators had not done enough:
http://finance.yahoo.com/news/Govt-rewarded-bank-auditors-apf-3698670682.html?x=0&sec=topStories&pos=6&asset=&ccode=
The headline should have read: Government Bank Auditors Paid To Look The Other Way
Central Bank Gold Holdings Expand at Fastest Pace Since 1964
March 18 (Bloomberg) -- Central banks added the most gold to their reserves since 1964 last year amid the longest rally in bullion prices in at least nine decades, data compiled by the World Gold Council show.
Combined holdings rose 425.4 metric tons to 30,116.9 tons, an increase worth $13.3 billion at last year’s average price, according to the data. India, Russia and China said last year they added to reserves. The expansion was the first since 1988, the data from the London-based council show.
Central banks, holding about 18 percent of all gold ever mined, are expanding their holdings for the first time in a generation as investors in exchange-traded funds amass bullion as an alternative to currencies. Holdings in the SPDR Gold Trust, the biggest ETF backed by the metal, are at 1,115.5 tons, more than the holdings of Switzerland.
“There’s clearly been a renaissance of gold in central bankers’ minds,” said Nick Moore, an analyst at Royal Bank of Scotland Group Plc in London. “It’s not just been central banks taking on gold, but a general shift for physical gold in the investment sector.”
http://www.bloomberg.com/apps/news?pid=20601012&sid=amBRPzwyB9SY
Tuesday, March 16, 2010
No More Crying Wolf
Yeah Baby, Yeah! Gold broke smartly out of the gate this morning, disrupting the CRIMEX goons morning coffee raid on the market. The bounce 1101 Monday afternoon was the tinder that lit this fire today. A close above 1127.90 Wednesday should open the door for a test of the neckline in the building Reverse Head & Shoulder now at 1140.
Silver followed Gold higher this morning rising once again above key resistance at 17.23. A close above the March 9 swing high at 17.63 opens the door for a short squeeze in Silver at the major downtrend line, now near 18.
The Euro retest of the consolidation breakout last Friday followed though fashionably today, and may have triggered a squeeze alert in the Euro.
The Dollar slipped below it's uptrend line today threatening to sqaush the "Bull Rally" [better known as a bear Market Rally, or SUCKER'S RALLY] and push the Dollar over the cliff at 79.55. A breakdown through 79.55 could se a VERY swift drop in the Dollar to the 78.50s or high 77s.
It's Going To Implode: Buy Physical Gold - NOW
By: Gordon Gekko
Any unbiased observer who knows how to put two and two together will be able to tell that something very fishy is going on. The urgency with which trillions in debt is being shoved down the market's throat at the worst possible time for the US Economy has the distinct smell of the government trying to extract every last bit of money from those stupid enough to buy the bonds before it all blows up. Rest assured, a huge chunk of this money is being funneled to the insiders who are most likely covertly using it up to buy real assets for themselves while keeping the crowds distracted with the stock market circus.
The bond market is the backbone of the US Ponzi Finance system. When it goes – and the day is not far in my opinion - the whole enchilada will come crashing down. Any type of financial asset that has a counterparty – which is pretty much all the paper assets in the world – bonds, futures, any and all derivatives and yes, even the paper currency – will crash. What will they crash against? Yes, that’s right - Gold. All the world’s capital – trillions, perhaps quadrillions of it - will come rushing into the very tiny physical (NOT paper) Gold market. Remember, the world’s real physical capital – real assets such as land, oil-refineries, mines, infrastructure, etc. will not vanish, only it will be re-priced in terms of Gold and its ownership transferred to those who hold it. Since everything stays on this planet, it is a zero-sum game and the winner will be Gold. In other words, an ounce of physical Gold will command a lot more in real purchasing power than it does today. Just like a national currency is a claim on goods and assets within that country, Gold will be a claim on global goods and assets worldwide.
http://news.goldseek.com/GoldSeek/1268425088.php
Gold: Get Some
by Bill Sardi
And now for the big kicker question – how much physical gold is actually in the vaults of the gold exchanges? It has been estimated that just one ounce of gold backs 20 ounces of gold sales. The banksters have done it again. They have sold more gold on paper than is actually being held in the vault.
There are irregularities and delays in the delivery of physical gold by the New York Mercantile Exchange and Commodity Exchange, Inc (COMEX) which is the world's largest physical commodity futures exchange. It appears that COMEX vault doesn’t have all the gold it claims on its books. Some holders of gold IOUs are being offered cash instead.
You’re going to miss the major significance of all this fraud because you probably aren’t an investor in gold and think these developments will not touch your financial nest eggs.
On a supply-and-demand basis, if gold is not in vaults, then the gold supply has been artificially inflated. If it is revealed that gold supplies are in fact much lower, then physical gold will rise in value beyond comprehension and the value of paper money will crash. Investors will rapidly move to gold and out of the stock market, which will crash pension funds, etc. Such a collapse could cause a complete loss of confidence in paper money, which has no backing whatsoever, no more than the phony gold IOUs. It is no wonder these phony gold IOUs are such a guarded secret.
Investment advisor Marc Faber argues the price of gold today at $1100 an ounce is comparatively less than when it was sold for $300 per ounce a few years ago because it is in greater demand and far more scarce.
Gold should now be a part of every American’s investment portfolio.
Most Americans feel investment decisions should be delegated to others and often, when they have decided to invest their own money, don’t have the gumption to stand up to their stock brokers and investment counselors to pull out of their eroding 401k plans Americans have lost nearly a third of their wealth in 401k plans in the recent economic downturn. Americans will not be able to rely upon Social Security checks in their retirement and most private pension plans are under-funded.
While the public can only participate in commodity markets by investing in futures and stocks, the public has opportunity to participate in the physical gold market even though it is many times larger than the market for crude oil.
There is evidence that gold exchanges have issued more gold IOUs than gold in their vaults, which if discovered, would dramatically raise the price of physically-held gold.
In a currency crisis, US gold and silver coins would be the most recognized and accepted alternative to paper money.
While there is an increased demand for US gold and silver coins, the number of Americans who purchase gold coins for investment is still very, very small.
In the event of a currency crisis, individual holders of physical gold are not likely to make their stockpile of gold coins available for sale.
Newly issued gold coins are in greater demand than realized because (a) so little gold is directed for use in coinage and (b) the US mint can only supply a limited quantity of newly-issued US gold eagle 50-dollar pieces.
The spot price of gold is both a speculative price and a manipulated price, and is certainly not its true value in a currency crisis.
The barometer of the increased value of gold is the increase in the supply of money, which has reached unprecedented heights.
In light of the fact the government will soon not be able to pay interest on its overwhelming debt and has decided to print more and more money to meet its obligations to the public, it behooves every American to become their own banker with gold.
Gold is scarce and far more valuable than imagined.
Get some.
http://www.lewrockwell.com/sardi/sardi157.html
More Fed minutes document gold market manipulation[MUST READ]
By Adrian Douglas
The Federal Reserve's Federal Open Market Committee (FOMC) meets eight times per year to discuss and set interest rate policy. The minutes of these meetings are not released for five years. This ensures that few people will ever read them. Furthermore, the minutes are heavily redacted and edited.
In his 2008 book "Deception and Abuse at the Fed," Robert Auerbach documents how Fed officials perjured themselves when they lied to Congress about the existence of verbatim transcripts of FOMC meetings. The Sunshine Act of 1976 required all "agencies" to promptly make available to the public any transcripts, recordings, or minutes of discussions in official meetings. For 17 years Fed officials misled Congress in denying that verbatim transcripts or tape recordings existed. They claimed that recordings were taped over and transcripts were destroyed, leaving only the redacted and edited minutes in their archives. However, because of direct questioning by U.S. Rep. Henry Gonzalez before the House Banking Committee in 1993, it became clear the Fed had been lying. Shortly thereafter Fed Chairman Alan Greenspan ordered tapes and transcripts to be destroyed.
It is clear from such actions that the information contained in those transcripts must be very damaging or incriminating to the Federal Reserve.
After reading Auerbach's book I was inspired to dredge through published FOMC minutes. My thinking was that if an organization is so inept at covering up that detailed transcripts were retained, then perhaps it is also inept at completely redacting sensitive and incriminating information. What I found is quite astounding and serves as documented evidence by the Federal Reserve itself that it manipulates the gold market.
http://www.gata.org/node/8429
FOMC Press Release
Release Date: March 16, 2010
For immediate release
Information received since the Federal Open Market Committee met in January suggests that economic activity has continued to strengthen and that the labor market is stabilizing. Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly. However, investment in nonresidential structures is declining, housing starts have been flat at a depressed level, and employers remain reluctant to add to payrolls. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability.
With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve has been purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt; those purchases are nearing completion, and the remaining transactions will be executed by the end of this month. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.
In light of improved functioning of financial markets, the Federal Reserve has been closing the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities and on March 31 for loans backed by all other types of collateral.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability.
Monday, March 15, 2010
Dollar Up On Poor Economic Data And News...Imagine That
Another amusing day in the Precious Metals and World currency markets. You had to figure that Friday's breakout in the Euro and breakdown in the US Dollar would not be permitted a follow thru ahead of tomorrow's Fed meeting. A raft of Dollar negative news and data hit the wires today, but all eyes remained on the on again/off again bailout of Greece. So buy the Dollar!
Pathetic!
No EU Accord on Greek Bailout
BRUSSELS—Euro-zone finance ministers meeting here Monday are set to discuss how Greece could be bailed out if its financial condition worsened, but they are unlikely to adopt any firm measures.
The hurry-up-and-wait attitude reflects a growing divide between Europe's power centers. On one side are some other southern European countries, the Brussels-based European Commission and, of course, Greece itself, who all fear the nation may be unable to refinance its debt this spring without some measure of support—if only enough to bring down the punishingly high interest rates Greece must pay to buyers of its bonds.
On the other, principally, are Germany and France, the union's two largest economies and the de facto paymasters for any bailout, who are reluctant to pay for Greece's long-time profligacy. Germany, which would have to foot the lion's share of any bill, insists that no specific promises be made to Greece until it is on the verge of defaulting on its debt.
German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble oppose even reaching a European agreement on how a bailout would work, believing such an accord would be a strong signal that a bailout is imminent. European leaders' promise in February that they would act to protect the euro zone's stability if needed was a clear enough message to financial markets, German officials say.
That European leaders are moving at very different speeds is evident in the public postures of two of them: economy commissioner Olli Rehn and French Finance Minister Christine Lagarde.
In recent weeks, officials in Mr. Rehn's directorate have been working on possible bailout plans, and "the scope of possible options has narrowed," says a person familiar with the matter, adding that demonstrating the EU is ready to step in is a "credibility test" of sorts for the bloc. Monday, Mr. Rehn seemed to advance talk of a bailout, saying the commission, the EU's executive arm, is "ready to develop a proposal for a European framework of coordinated assistance."
http://online.wsj.com/article/SB10001424052748703909804575123050570059106.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsThird
But the world is full of surprises. What a shock it will be when the US finds itself in Greece's shoes!
-Bill Bonner, The Daily Reckoning
Is The Euro Breaking Out?
Revisiting yesterday's post regarding a breakout in the Euro... Today we retested the breakout much sooner than I expected. I don't view this as a positive or a negative. A retest of the breakout was expected, and today we got it. The fact that we bounced off the retest at 1.3660 is a positive. Some follow through tomorrow would be even more positive. I have a chart video that further analyzes Friday's breakout in the Euro and discusses where it may be headed in the weeks ahead.
This morning we were given four excellent reasons to dump the Dollar , yet miraculously it rose back above the 80 handle. When we last looked at the Dollar Friday afternoon it was hanging by a thread, so today's "miracle" should be of no surprise.
U.S., U.K. Move Closer to Losing Rating, Moody’s Says
March 15 (Bloomberg) -- The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.
The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.
Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.
“We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”
http://www.bloomberg.com/apps/news?pid=20601068&sid=a0a8xAghPS8I
Hey, Little Timmy Geithner told us just the other day that the USA "will never lose it's triple-A credit rating". And CNBC's Steve Liesman told us that again this morning...much to the dismay of Rick Santeli. US debt must be the ultimate safe-haven! Hardly...
Bottom line: Dollar negative.
Snowstorms curb industrial output, rebound seen
(Reuters) - U.S. industrial production braked sharply in February, held back by severe winter storms that slammed parts of the country, while manufacturing activity in New York state stalled this month.
Analysts said Monday's data did not alter their views that the factory-led economic recovery remained on track, given weather disruptions and the fact details of the reports showed underlying strength. They expect a rebound in industrial production in March.
While U.S. manufacturing output fell in February, it rose outside of the auto sector, and mining activity posted a strong gain, leading overall industrial output to rise slightly. In addition, factory employment, shipments and unfilled orders in New York state all rose this month.
"The two reports were positive for the economy and they do indicate that the factory sector will make a positive contribution to growth in the first quarter," said Kenneth Kim, an economist at Stone & McCarthy Research Associates in Princeton, New Jersey.
http://www.reuters.com/article/idUSTRE62945320100315
Blame the weather. LOL! Sure they "expect" a rebound in industrial production in March. "they've" been "expecting" a rebound for month already, why not next month too. Of course it will probably rain too much, and industrial production will be abysmal yet again. I guess it's all about how you interpret the data and report the facts. Look at this report on industrial production:
Industrial production is up, thanks to mining, utilities
WASHINGTON — Industrial production edged up 0.1% in February, beating expectations and marking the eighth monthly increase. But the key manufacturing sector produced less.
The Federal Reserve reported Monday that manufacturing output, the index's largest component, fell 0.2%; while output at mining companies and utilities increased 2.0% and 0.6%, respectively.
Manufacturing took a hit from winter storms that shut down most of the Northeast in February, decreasing hours worked at factories and restraining workers' earnings. However, the storms increased demand for energy, boosting mining and utility production.
http://www.usatoday.com/money/economy/2010-03-15-industrial-production_N.htm
So it snowed in the Northeast. Is manufacturing ONLY done in the Northeast? I think all the cars are built in the Midwest... In the first story the claim is that reports indicate that the factory sector will make a positive contribution to growth in the first quarter. The second story makes it clear that manufacturing sucked wind, and that "because" of the bad weather utilities were a major contributor to there being any growth in industrial production at all in February. So blame the weather... Without it industrial production would have been negative.
Bottom line: Dollar negative.
U.S. suffers net capital outflow in January
(Reuters) - Foreign investors, led by central banks, were net sellers of all U.S. securities in January but continued to buy U.S. Treasuries, the Treasury Department said on Monday.
China remained the largest single holder of U.S. government debt, with $889 billion in hand in January, down from $894.8 billion in December. Japan was second with $765.4 billion compared with $765.7 billion the prior month.
Net outflows from all U.S. securities, including short-term instruments such as Treasury bills, totaled $33.4 billion in January, reversing a $53.6 billion inflow seen in December.
Official investors -- primarily central banks worldwide -- were the biggest sellers, unloading a record net $34.1 billion, the most since they sold $26.3 billion in September 1998 following financial crises in Asia and Russia.
Long-term securities saw a net inflow of $19.1 billion, though that was below December's $63.3 billion tally.
http://www.reuters.com/article/idUSTRE62E2JU20100315
The government refuses to admit it, and the financial media refuses to acknowledge it...the World is running away from the US Dollar and Dollar based assets as quickly as it can. China has now lightened it's load of Dollar securities three months in a row. A net capital outflow means the US did not take in enough investment money to fund the current account deficit.
Bottom line: VERY Dollar negative.
China trims holdings of Treasury securities
WASHINGTON (AP) -- China retained its spot as the biggest foreign holder of U.S. Treasury debt in January even as it trimmed its holdings for a third straight month. The string of declines underscored worries that the U.S. government could face much higher interest rates to finance soaring budget deficits.
The Treasury Department said Monday that China's holdings dipped by $5.8 billion to $889 billion in January compared with December. Japan, the second-largest foreign holder of U.S. government debt, also trimmed its holdings but by a much smaller $300 million, to $765.4 billion.
Net foreign purchases of long-term securities, a category that includes both government and corporate debt, totaled $19.1 billion in January, as net purchases of private corporate bonds fell by $24.8 billion, the biggest drop on record.
http://finance.yahoo.com/news/China-trims-holdings-of-apf-1411556921.html?x=0
Now what was Moody's talking about in the first story above? The US could lose it's triple-A debt rating if costs to service that debt continue to rise. I fail to see how the Chinese lightening their load of US debt refutes Moody's assertion. If anything, it confirms it.
Bottom line: Dollar negative.
Clearly, NOTHING Dollar positive can be gleaned from these four data/news releases this morning. Yet somehow, the Dollar managed to pull back from the cliff this morning and rise above it. Well of course...one must buy the Dollar with all those troubles over in Euroland with little Greece facing a debt crisis. I know, it's hilarious, right?
Dollar Bulls Beware
By: Peter Schiff, Euro Pacific Capital, Inc.
By late 2009, as the U.S. dollar flirted with multi-year lows against most foreign currencies, big investment players crowded into trades that shorted the greenback. Commentators noted that the anti-dollar momentum had taken on a life of its own and that the trade had become too crowded. It is true that markets have a nasty tendency to move against the crowd. When a lot of traders agree on a particular trade, it's more likely that in the short-run the opposite trade will be a winner.
The 2008 "flight to safety" rally of the U.S. dollar was a once in a lifetime event that presented huge opportunities for aggressive currency traders. By December 2008, after rallying 25% over the previous five months, the dollar topped out. However, there were many speculators who had come somewhat late to the party, as well as many others who had ridden the dollar up and were thus sitting on huge unrealized gains.
Those technical reasons, combined with the re-emergence of strong growth in emerging markets and solid earnings from overseas companies, redirected investment flows away from the dollar. 2009 became a year of dollar weakness, with the buck giving back nearly all of its gains. At that point, most people made the reasonable conclusion that the decline would continue.
As is often the case, an unforeseen event came along that made mincemeat out of the consensus' well-conceived strategy. Once some fiscal squabbling grabbed headlines in the eurozone, the negative sentiment that had built up on the dollar was suddenly diverted to the euro. Catalyzed by the Greek debt crisis, the greenback surged by about 8% in six weeks.
From a technical standpoint, the short dollar trade of late 2009 was too crowded; but from a fundamental standpoint, I don't think it was crowded enough. As with stocks, there can be no long-term substitute to examining a government's fundamentals to determine its currency's worth. Based on the fundamentals, far too many investors remain far too confident about the greenback's underlying viability.
In fact, I do not think I have ever seen so rapid a change in sentiment in my career. The crowd had completely switched sides, with most now betting on the demise of the euro rather than the dollar. This is looking like July 2008 all over again, with the dollar poised to put in over-sized gains. It also presents a good opportunity for those who keep their heads.
In my opinion, the market is now perfectly positioned for a massive dollar sell-off. The fundamentals for the dollar in 2010 are so much worse than they were in 2008 that it is hard to imagine a reason for people to keep buying once a modicum of political and monetary stability can be restored in Europe. In fact, the euro has recently stabilized.
My gut is that the dollar sell-off will be sharp and swift. Once the dollar decisively breaks below last year's lows, many of the traders who jumped ship in the recent rally will look to re-establish their positions. This will accelerate the dollar's descent and refocus everyone's attention back on the financial train-wreck unfolding in the United States.
http://news.goldseek.com/EuroCapital/1268423013.php
The Great Credit Squeeze
by Martin D. Weiss, Ph.D.
If you think that the sovereign debt crisis is mostly behind us … that America’s federal deficit is turning into a non-issue … or that we can just go back to business as usual … you’d better consider the drama now unfolding in the hard numbers just released last week:
February deficit: In February alone, the official U.S. federal deficit was a monstrous $221 billion, far greater than anything we have ever experienced in history.
Back in the 1980s, for example, President Reagan was plagued with the worst string of federal deficits ever recorded until that time. But with February’s deficit, Washington has managed to run up just as much red ink as it did in all of 1986, the single worst deficit year under Reagan.
Going back further, to the 1970s under President Nixon, we also had a rash of deficit spending that sent chills up the spines of economists. But last month’s deficit of $221 billion was more than TRIPLE the sum total of ALL deficits during the six years under Nixon.
Ever since America’s Declaration of Independence, deficit spending has been a recurring theme in Washington that invariably returns with a vengeance, especially during wartime. But it took 169 long years and seven major wars — from 1776 to 1945 — to rack up a cumulative deficit that matches the gaping budget hole of just 28 short days in February.
What does the government resort to in order to finance these humongous deficits? The answer is obvious …
http://www.moneyandmarkets.com/the-great-credit-squeeze-2-38306
Despite the Dollar's miraculous resilience today in the face of overwhelmingly negative news and data, Gold and Silver stood strong and actually eked out modest gains on the day. Not surprising really considering the Precious Metal's performance the past couple weeks in the face of obvious manipulative efforts by the CRIMEX goons. The TRUTH is out there. And as each day passes, the TRUTH gains strength as the bright lights begin to focus ever more brightly on the fiscal blight choking America.
Pathetic!
No EU Accord on Greek Bailout
BRUSSELS—Euro-zone finance ministers meeting here Monday are set to discuss how Greece could be bailed out if its financial condition worsened, but they are unlikely to adopt any firm measures.
The hurry-up-and-wait attitude reflects a growing divide between Europe's power centers. On one side are some other southern European countries, the Brussels-based European Commission and, of course, Greece itself, who all fear the nation may be unable to refinance its debt this spring without some measure of support—if only enough to bring down the punishingly high interest rates Greece must pay to buyers of its bonds.
On the other, principally, are Germany and France, the union's two largest economies and the de facto paymasters for any bailout, who are reluctant to pay for Greece's long-time profligacy. Germany, which would have to foot the lion's share of any bill, insists that no specific promises be made to Greece until it is on the verge of defaulting on its debt.
German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble oppose even reaching a European agreement on how a bailout would work, believing such an accord would be a strong signal that a bailout is imminent. European leaders' promise in February that they would act to protect the euro zone's stability if needed was a clear enough message to financial markets, German officials say.
That European leaders are moving at very different speeds is evident in the public postures of two of them: economy commissioner Olli Rehn and French Finance Minister Christine Lagarde.
In recent weeks, officials in Mr. Rehn's directorate have been working on possible bailout plans, and "the scope of possible options has narrowed," says a person familiar with the matter, adding that demonstrating the EU is ready to step in is a "credibility test" of sorts for the bloc. Monday, Mr. Rehn seemed to advance talk of a bailout, saying the commission, the EU's executive arm, is "ready to develop a proposal for a European framework of coordinated assistance."
http://online.wsj.com/article/SB10001424052748703909804575123050570059106.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsThird
But the world is full of surprises. What a shock it will be when the US finds itself in Greece's shoes!
-Bill Bonner, The Daily Reckoning
Is The Euro Breaking Out?
Revisiting yesterday's post regarding a breakout in the Euro... Today we retested the breakout much sooner than I expected. I don't view this as a positive or a negative. A retest of the breakout was expected, and today we got it. The fact that we bounced off the retest at 1.3660 is a positive. Some follow through tomorrow would be even more positive. I have a chart video that further analyzes Friday's breakout in the Euro and discusses where it may be headed in the weeks ahead.
This morning we were given four excellent reasons to dump the Dollar , yet miraculously it rose back above the 80 handle. When we last looked at the Dollar Friday afternoon it was hanging by a thread, so today's "miracle" should be of no surprise.
U.S., U.K. Move Closer to Losing Rating, Moody’s Says
March 15 (Bloomberg) -- The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.
The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.
Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.
“We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”
http://www.bloomberg.com/apps/news?pid=20601068&sid=a0a8xAghPS8I
Hey, Little Timmy Geithner told us just the other day that the USA "will never lose it's triple-A credit rating". And CNBC's Steve Liesman told us that again this morning...much to the dismay of Rick Santeli. US debt must be the ultimate safe-haven! Hardly...
Bottom line: Dollar negative.
Snowstorms curb industrial output, rebound seen
(Reuters) - U.S. industrial production braked sharply in February, held back by severe winter storms that slammed parts of the country, while manufacturing activity in New York state stalled this month.
Analysts said Monday's data did not alter their views that the factory-led economic recovery remained on track, given weather disruptions and the fact details of the reports showed underlying strength. They expect a rebound in industrial production in March.
While U.S. manufacturing output fell in February, it rose outside of the auto sector, and mining activity posted a strong gain, leading overall industrial output to rise slightly. In addition, factory employment, shipments and unfilled orders in New York state all rose this month.
"The two reports were positive for the economy and they do indicate that the factory sector will make a positive contribution to growth in the first quarter," said Kenneth Kim, an economist at Stone & McCarthy Research Associates in Princeton, New Jersey.
http://www.reuters.com/article/idUSTRE62945320100315
Blame the weather. LOL! Sure they "expect" a rebound in industrial production in March. "they've" been "expecting" a rebound for month already, why not next month too. Of course it will probably rain too much, and industrial production will be abysmal yet again. I guess it's all about how you interpret the data and report the facts. Look at this report on industrial production:
Industrial production is up, thanks to mining, utilities
WASHINGTON — Industrial production edged up 0.1% in February, beating expectations and marking the eighth monthly increase. But the key manufacturing sector produced less.
The Federal Reserve reported Monday that manufacturing output, the index's largest component, fell 0.2%; while output at mining companies and utilities increased 2.0% and 0.6%, respectively.
Manufacturing took a hit from winter storms that shut down most of the Northeast in February, decreasing hours worked at factories and restraining workers' earnings. However, the storms increased demand for energy, boosting mining and utility production.
http://www.usatoday.com/money/economy/2010-03-15-industrial-production_N.htm
So it snowed in the Northeast. Is manufacturing ONLY done in the Northeast? I think all the cars are built in the Midwest... In the first story the claim is that reports indicate that the factory sector will make a positive contribution to growth in the first quarter. The second story makes it clear that manufacturing sucked wind, and that "because" of the bad weather utilities were a major contributor to there being any growth in industrial production at all in February. So blame the weather... Without it industrial production would have been negative.
Bottom line: Dollar negative.
U.S. suffers net capital outflow in January
(Reuters) - Foreign investors, led by central banks, were net sellers of all U.S. securities in January but continued to buy U.S. Treasuries, the Treasury Department said on Monday.
China remained the largest single holder of U.S. government debt, with $889 billion in hand in January, down from $894.8 billion in December. Japan was second with $765.4 billion compared with $765.7 billion the prior month.
Net outflows from all U.S. securities, including short-term instruments such as Treasury bills, totaled $33.4 billion in January, reversing a $53.6 billion inflow seen in December.
Official investors -- primarily central banks worldwide -- were the biggest sellers, unloading a record net $34.1 billion, the most since they sold $26.3 billion in September 1998 following financial crises in Asia and Russia.
Long-term securities saw a net inflow of $19.1 billion, though that was below December's $63.3 billion tally.
http://www.reuters.com/article/idUSTRE62E2JU20100315
The government refuses to admit it, and the financial media refuses to acknowledge it...the World is running away from the US Dollar and Dollar based assets as quickly as it can. China has now lightened it's load of Dollar securities three months in a row. A net capital outflow means the US did not take in enough investment money to fund the current account deficit.
Bottom line: VERY Dollar negative.
China trims holdings of Treasury securities
WASHINGTON (AP) -- China retained its spot as the biggest foreign holder of U.S. Treasury debt in January even as it trimmed its holdings for a third straight month. The string of declines underscored worries that the U.S. government could face much higher interest rates to finance soaring budget deficits.
The Treasury Department said Monday that China's holdings dipped by $5.8 billion to $889 billion in January compared with December. Japan, the second-largest foreign holder of U.S. government debt, also trimmed its holdings but by a much smaller $300 million, to $765.4 billion.
Net foreign purchases of long-term securities, a category that includes both government and corporate debt, totaled $19.1 billion in January, as net purchases of private corporate bonds fell by $24.8 billion, the biggest drop on record.
http://finance.yahoo.com/news/China-trims-holdings-of-apf-1411556921.html?x=0
Now what was Moody's talking about in the first story above? The US could lose it's triple-A debt rating if costs to service that debt continue to rise. I fail to see how the Chinese lightening their load of US debt refutes Moody's assertion. If anything, it confirms it.
Bottom line: Dollar negative.
Clearly, NOTHING Dollar positive can be gleaned from these four data/news releases this morning. Yet somehow, the Dollar managed to pull back from the cliff this morning and rise above it. Well of course...one must buy the Dollar with all those troubles over in Euroland with little Greece facing a debt crisis. I know, it's hilarious, right?
Dollar Bulls Beware
By: Peter Schiff, Euro Pacific Capital, Inc.
By late 2009, as the U.S. dollar flirted with multi-year lows against most foreign currencies, big investment players crowded into trades that shorted the greenback. Commentators noted that the anti-dollar momentum had taken on a life of its own and that the trade had become too crowded. It is true that markets have a nasty tendency to move against the crowd. When a lot of traders agree on a particular trade, it's more likely that in the short-run the opposite trade will be a winner.
The 2008 "flight to safety" rally of the U.S. dollar was a once in a lifetime event that presented huge opportunities for aggressive currency traders. By December 2008, after rallying 25% over the previous five months, the dollar topped out. However, there were many speculators who had come somewhat late to the party, as well as many others who had ridden the dollar up and were thus sitting on huge unrealized gains.
Those technical reasons, combined with the re-emergence of strong growth in emerging markets and solid earnings from overseas companies, redirected investment flows away from the dollar. 2009 became a year of dollar weakness, with the buck giving back nearly all of its gains. At that point, most people made the reasonable conclusion that the decline would continue.
As is often the case, an unforeseen event came along that made mincemeat out of the consensus' well-conceived strategy. Once some fiscal squabbling grabbed headlines in the eurozone, the negative sentiment that had built up on the dollar was suddenly diverted to the euro. Catalyzed by the Greek debt crisis, the greenback surged by about 8% in six weeks.
From a technical standpoint, the short dollar trade of late 2009 was too crowded; but from a fundamental standpoint, I don't think it was crowded enough. As with stocks, there can be no long-term substitute to examining a government's fundamentals to determine its currency's worth. Based on the fundamentals, far too many investors remain far too confident about the greenback's underlying viability.
In fact, I do not think I have ever seen so rapid a change in sentiment in my career. The crowd had completely switched sides, with most now betting on the demise of the euro rather than the dollar. This is looking like July 2008 all over again, with the dollar poised to put in over-sized gains. It also presents a good opportunity for those who keep their heads.
In my opinion, the market is now perfectly positioned for a massive dollar sell-off. The fundamentals for the dollar in 2010 are so much worse than they were in 2008 that it is hard to imagine a reason for people to keep buying once a modicum of political and monetary stability can be restored in Europe. In fact, the euro has recently stabilized.
My gut is that the dollar sell-off will be sharp and swift. Once the dollar decisively breaks below last year's lows, many of the traders who jumped ship in the recent rally will look to re-establish their positions. This will accelerate the dollar's descent and refocus everyone's attention back on the financial train-wreck unfolding in the United States.
http://news.goldseek.com/EuroCapital/1268423013.php
The Great Credit Squeeze
by Martin D. Weiss, Ph.D.
If you think that the sovereign debt crisis is mostly behind us … that America’s federal deficit is turning into a non-issue … or that we can just go back to business as usual … you’d better consider the drama now unfolding in the hard numbers just released last week:
February deficit: In February alone, the official U.S. federal deficit was a monstrous $221 billion, far greater than anything we have ever experienced in history.
Back in the 1980s, for example, President Reagan was plagued with the worst string of federal deficits ever recorded until that time. But with February’s deficit, Washington has managed to run up just as much red ink as it did in all of 1986, the single worst deficit year under Reagan.
Going back further, to the 1970s under President Nixon, we also had a rash of deficit spending that sent chills up the spines of economists. But last month’s deficit of $221 billion was more than TRIPLE the sum total of ALL deficits during the six years under Nixon.
Ever since America’s Declaration of Independence, deficit spending has been a recurring theme in Washington that invariably returns with a vengeance, especially during wartime. But it took 169 long years and seven major wars — from 1776 to 1945 — to rack up a cumulative deficit that matches the gaping budget hole of just 28 short days in February.
What does the government resort to in order to finance these humongous deficits? The answer is obvious …
http://www.moneyandmarkets.com/the-great-credit-squeeze-2-38306
Despite the Dollar's miraculous resilience today in the face of overwhelmingly negative news and data, Gold and Silver stood strong and actually eked out modest gains on the day. Not surprising really considering the Precious Metal's performance the past couple weeks in the face of obvious manipulative efforts by the CRIMEX goons. The TRUTH is out there. And as each day passes, the TRUTH gains strength as the bright lights begin to focus ever more brightly on the fiscal blight choking America.
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