Governmentium

Zombie Banks & Gold Trigger
By: Jim Willie CB
Lawrence Livermore Laboratories has discovered the heaviest element yet known to science. The new element, Governmentium (symbol=Gv), has one neutron, 25 assistant neutrons, 88 deputy neutrons, and 198 assistant deputy neutrons, giving it an atomic mass of 312. These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lepton-like particles called peons. Since Governmentium has no electrons, it is inert. However, it can be detected, because it impedes every reaction with which it comes into contact. A tiny amount of Governmentium can cause a reaction that would normally take less than a second, to take from 4 days to 4 years to complete. Governmentium has a normal half-life of 2 to 6 years. It does not decay, but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places. In fact, Governmentium's mass will actually increase over time, since each reorganization will cause more morons to become neutrons, forming isodopes. This characteristic of moron promotion leads some scientists to believe that Governmentium is formed whenever morons reach a critical concentration. This hypothetical quantity is referred to as critical morass. When catalyzed with money, Governmentium becomes Administratium (symbol=Ad), an element that radiates just as much energy as Governmentium, since it has half as many peons but twice as many morons.

The USEconomy is in the early stages of disintegration, not yet recognized as such. The USFed is not helping the system, but rather draining the system, in order to fund Wall Street bailouts, to redeem its fraud, and to ward off foreigners in a global dollar swap policy. The competitive currency devaluations are in full swing. The competing currency war is best seen from the standpoint of official interest rate by nations. Yesterday, desperate rate cuts were ordered atop previous desperate rate cuts done on November 6. The Euro Central Bank cut this time by 75 basis points to 2.5% (last time by 50 bpts). The Bank of England cut this time by 100 basis points to 2.0% (last time by 150 bpts). Even the central bank of Sweden cut by 175 basis points. The rate cuts one month ago were a parade, a cavalcade of discredited bankers, who have increasingly lost confidence of the public. The confusion on monetary policy is aided by observation of the money supply figures, which are growing rapidly. The irony in my mind is that the monumental money supply growth has not entered the mainstream economy, but does not result in economic response, zero traction. The reason is that the USFed has directed funds only to New York banks, thus feeding a black hole. The central bankers are not asleep at the wheel as much as operating a machine with a built-in breakdown mechanism after a few decades. Their time is up.

Many dismiss the threat of a USTreasury default, but they do so in blind faith. They ignore confirmation signals, such as the in the 30-year USTreasury swap spread. It has been negative for a few weeks. Some call this development inconceivable, illogical, impossible. Yet it is the reality. The swap contract exchanges a floating rate for a fixed rate, and pays a price to do so. Imagine paying a small fixed amount to render an adjustable ARM mortgage loan with a fixed rate, a similar concept. Some experienced analysts have interpreted this as meaning that investors are somehow reckoning that they are more likely to be redeemed on their USTBond investments by a private counter-party than by the government itself! One can call this event the ‘proverbial canary in the coalmine’ as a threat to the current system. Last week, arguments were put forth that the central bank franchise concept is in danger of demise. Evidence in the signals supports the view. Currency wars are heating up, even as investors are anxious about fiat currencies in general, and their offered debt securities. The Iceland situation rocked the system, to be sure.

The laws of Supply & Demand have not gone away. Yet we have grand disparities to pressure price structures. A) The supply of USTreasury Bonds is huge, yet yields are low and price is high. That is ass backwards. B) The creation of truly vast sums of USDollars is huge, needed to pay for the bond swaps, bailouts, stimulus packages, and nationalizations. Yet the USDollar index rises, due to liquidations and payouts. That is ass backwards. C) The demand for physical gold and silver is huge, motivated by crisis, yet their prices are determined by corrupt paper pricing systems. That is ass backwards. Soon, all three stresses on price structures will be addressed. A strange day occurred on Monday. Gold was down hard, the euro currency was down a little, but the pound sterling was down 500 bpts. Some attributed it to lousy economic news in England. Not completely so! Another factor might be at work. A clearer perception of a struggling UK Economy would not take down the gold price. My sources tell of possible shipments of gold from England to the US-based COMEX, in order to satisfy gold demands for delivery. It is hard to verify. Time will tell.
http://news.goldseek.com/GoldenJackass/1228442400.php

Home loan troubles break records again
WASHINGTON (AP) -- A record one in 10 American homeowners with a mortgage were either at least a month behind on their payments or in foreclosure at the end of September as the source of housing market pressure shifted from risky loans to the crumbling U.S. economy.
http://biz.yahoo.com/ap/081205/home_foreclosures.html

Grim Job Report Not Showing Full Picture
As bad as the headline numbers in Friday’s employment report were, they still made the job market look better than it really is.

The unemployment rate reached its highest point since 1993, and overall employment fell by more than a half million jobs. Yet that was just the beginning. Thanks to the vagaries of the way that the government’s best-known jobs statistics are calculated, they have overlooked many workers who have been deeply affected by the current recession.

The number of people out of the labor force — meaning that they were neither working nor looking for work and that the government did not consider them unemployed — jumped by 637,000 last month, the Labor Department said. The number of part-time workers who said they wanted full-time work — all counted as fully employed — rose by an additional 621,000.

Take these people into account, and the job market may be in its worst condition since the early 1980s. It is still deteriorating rapidly, too.

Already, the share of men older than 20 with jobs was at its lowest point last month since 1983, and very close to the low point of the last 60 years. The share of women with jobs is lower than it was eight years ago, which never happened in previous decades.
http://www.nytimes.com/2008/12/06/business/economy/06idle.html?_r=2&hp=&adxnnl=1&adxnnlx=1228707632-aRADS5iAfZna2YP/aVM0yw

Bernanke's Playbook
The playbook is buried deep in his November 21, 2002 speech, "Deflation: Making Sure 'It' Doesn't Happen Here."

What is in store for America? Monetary inflation on a scale not seen since World War II.

"As I have mentioned, some observers have concluded that when the central bank's policy rate falls to zero – its practical minimum – monetary policy loses its ability to further stimulate aggregate demand and the economy. At a broad conceptual level, and in my view in practice as well, this conclusion is clearly mistaken. Indeed, under a fiat (that is, paper) money system, a government (in practice, the central bank in cooperation with other agencies) should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero. . . .

What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

Then Bernanke gave us two of his key plays from his playbook. Nobody paid any attention. They pay attention now.

"To stimulate aggregate spending when short-term interest rates have reached zero, the Fed must expand the scale of its asset purchases or, possibly, expand the menu of assets that it buys. Alternatively, the Fed could find other ways of injecting money into the system – for example, by making low-interest-rate loans to banks or cooperating with the fiscal authorities."

I therefore suggest that you take him seriously.

"If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation."
http://news.goldseek.com/LewRockwell/1228405927.php

International Forecaster
By: Bob Chapman
We have watched over and over again since 10/19/87 our government dump gold on the market to suppress prices. From 10/19/87 until 8/20/88 that was an illegal enterprise. As we moved into the early 1990s, we saw commercials on the Comex shorting and increasing shorts as prices rose, which is not a normal procedure. It exposes one to the possibility of major losses, unless your shorting is covered by the US government. The result has been suppressed gold prices for 30 years, especially over the past 16 years. These methods have been augmented by the selling and leasing of gold by a large number of central banks. These sales were made over and over again to break the back of any gold rally. Due to overwhelming physical demand over the years gold has still managed to achieve new highs.

During this month of December we see unusual physical delivery of Comex futures contracts. We have been reporting those figures to you as we receive them. The registered gold available at the Comex for delivery is being depleted something that has never happened before. Due to the fact that the CFTC has never audited the registered Comex holdings we really do not know how much gold is available for delivery. If the demand is high default could occur. We’ll know that by the end of the month or perhaps sooner.

A short seller must be 90% covered by gold or by offsetting long contracts. The CFTC is supposed to oversee such activity and if they haven’t then we can assume that the US government is behind the naked shorting of gold contracts without gold as collateral or offsetting long positions. The pros, specs, and traders have seen this going on during 2008 and they have been abandoning the market in droves. Open interest has fallen from 625,000 contracts to 264,000 as a result. Players are tired of being stolen from by their own government.

Normally ½% to 1% of contracts are delivered when the contract expires. Thus far into the delivery month we are seeing about 6% take delivery. Over the next three weeks we will find out just what a fix Comex is in. It won’t be a positive event no matter what happens. Large deliveries will force gold higher and default will send gold upward like a rocket.

Our government needs much higher gold prices to devalue the dollar. If the Fed curtails the availability of money and credit the stock market will collapse, as well will the economy and the Second Great Depression will be underway.

As this transpires we are seeing the beginnings of a trade war as export countries deliberately devalue their currencies, this is a confluence of very bad events. This we believe is about to force the Fed and the Treasury to abandon their gold suppression of many years.

The Fed has to devalue the dollar versus gold - it has no other choice. If it doesn’t everything else, financial and economic, collapses. We are at a great crossroads - the event we’ve been waiting years to see. This is the only way Fed Chairman Ben Bernanke can void many years of depression. He knows if gold goes to $6,000 an ounce, debt will be mitigated and pressure will ease on the economy. This is why we are starting to hear insider Illuminists talk of $2,000 gold. They want to be recognized as having forecast the event and they also want to set a mental barrier at $2,000 an ounce. This revaluation of gold and return to the gold standard will neutralize hyperinflation by absorbing excess currencies. Why else would JP Morgan Chase and Citigroup be predicting $2,000 gold?

We see Morgan, Citigroup, Goldman and Hong Kong Shanghai Bank HSBC, taking large deliveries of gold because they know what is coming and they can buy cheaper on the Comex. The trade is a lock because they take delivery on the futures market and if they want to they can sell on the spot market and take a profit due to massive physical demand. We are close to seeing a great breakout in the gold price. Stand by we’ll let you know when to add to your positions.
http://news.goldseek.com/InternationalForecaster/1228637760.php

With the "threat" of "severe" production cuts by OPEC by mid -December now looming over the Oil markets, expect Oil to catch a bid this week. Gold, Silver and the entire commodity sector should benefit. As the Dollar continues to gasp for air at this altitude, Gold Bulls could become emboldened should the Dollar slip into the low 85s. Near-term resistance for Gold lies between 764 and 769 with 786 as our next mountain to climb. Silver, as always, tags along in the shadow of big brother Gold.