Archive - Mar 18, 2013 - Blog entry

Most investors are nervous now and need to hold things together to include the Fed meeting announcement Wednesday. If bulls are lucky they’ll get their Turnaround Tuesday.  

So, adding it all up so far, who has gotten the immediate benefit of this Cyprus fiasco?

Why does this matter? Because it indicates what we’ve been saying since June 2012, the entire European “fix” was one enormous lie. NOTHING was fixed in Europe at all. ON top of this, your SAVINGS in Europe can be seized at any time if things get bad.

I was a little early, but just as I promised, those European bank runs are coming as expected. Wait until I release my newest EU crash analysis, Lehman x 3, nearly guaranteed!!!

Assume you're a crook of some sort. You have ill gotten gains. How do you spend it?

Yi Gang, Vice Governor of the People's Bank of China (PBOC), recently made the headlines with his comments on Chinese gold reserves. On Wednesday, Mr. Yi stated that China's gold reserves remain static at 1,054 tonnes, and suggested that a sizeable increase in those reserves would be unlikely in the future. "We need to take into account both the stability of the market and gold prices," Mr. Yi stated, adding that as the world's largest gold producer and importer, China produces about 400 tonnes of gold annually, and imports an additional 500 to 600 tonnes of gold every year. "Compared with China's 3.3-trillion-U.S.-dollar foreign exchange reserves, the size of the gold market is too small," Yi said, rejecting speculation that China would further diversify its foreign reserve investments into the precious metal. "If the Chinese government were to buy too much gold, gold prices would surge, a scenario that will hurt Chinese consumers ... We can only invest about 1-2 percent of the foreign exchange reserves into gold because the market is too small," Yi stated.

Just a reminder: this time won't be different.

An update on Cyprus and what else the week has in store.

The root of the problem is the manufacture of counterfeit credit. Examples of counterfeit credit include Greek government bonds... Depositors are paid the lowest interest rate of all, and in return are promised to be made whole, even if it means every other class in the capital structure is utterly wiped out. In Cyprus, they were not. This reckless and politically-expedient decision has consequences.