Sprott's John Embry is in fine form today: in a just released oped in the Investor's Digest of Canada, the Chief Investment Strategist of Sprott Asset Management LP, and one of the biggest fans of shiny metals in history, makes the following bold prediction, which also explains how he views the concerted attempts by the LBMA to keep gold below the $1,420 all time high: "I am not in the least bit concerned about these shenanigans because I believe considerable additional quantitative easing is inevitable, irrespective of what the Fed says or does in the short term. Goldman Sachs's chief U.S. economist Jan Hatzius clearly shares my view as he has suggested that ultimately as much as $4 trillion maybe required although he anticipates that it will be staged. In my opinion this will act as catnip for gold and silver prices, which could go ballistic by year-end." Presumably, he means 2011. So forget all you have heard about interest rate (real or otherwise) correlations: they don't exist. All that does exist is the willingness of the Fed to 'print.' And with China increasingly starting to tighten, the Fed will need to do double duty if it wishes to keep global liquidity well-offered with near-free fiat paper. While we don't quite share Embry's enthusiasm for gold's imminent escape velocity, we are confident that as long as loose monetary policy is the only means to extend and pretend the ponzi, gold will, in turn, be well-bid.
Congressman Miller Joins Economists and Financial Experts In Demanding a Stop to Mortgage Servicer Fraud -- a Significant Cause of ForeclosuresSubmitted by George Washington on 12/22/2010 20:10 -0400
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If you can't beat them, might as well get paid by them. Such were the prevailing thoughts in the head of New York Fed veteran Theo Lubke, who after 15 years at Liberty 33, most recently as head of reform efforts in the private derivative market, famous due to its size of roughly €583 trillion which may or may not take the financial system down with it during the next market meltdown. And so, after realizing the derivatives reform is impossible, and further realizing that getting paid a grossly exaggerated government salary for what is basically a lobby job, Lubke has instead decided to get paid an even more exorbitant amount by everyone favorite monopolistic bloodsucking parasite. What is most ironic is that during an ISDA conference in Beijing in April 2009, Ludke said: “It is simply unacceptable in today’s environment that the design and structure of the OTC derivatives market can be controlled by a handful of large dealers.” Oh well - an average government salary is $119,982, an average Goldman Sachs salary is about 4 times greater, an infinite amount of hypocrisy - priceless. For everything else there is the taxpayer bailout debit card.
The American Dream is dead, and we are responsible. Yes, I know what you are thinking. How can I possible say this when corrupt politicians and even more corrupt bankers are responsible for killing the American Dream? Of course I acknowledge this fact, but without our willing, gleefully ignorant participation in their “Death Race to the Bottom 2014” game, the death of the American Dream would not be possible.
The current recession is the deepest economic downturn since the Great Depression of the 1930s, inviting comparisons with President Franklin Delano Roosevelt. FDR had the advantage of taking office three years into the Depression when the unemployment rate was near 25 percent. The verdict was in: the system needed change. President Obama took office as the crisis was deepening. Those who had designed the system could still argue it could be revived and as establishment insiders they had the upper hand. But that argument is done and today the prospect is of long stagnation.
Last November it was Dubai, this November it's Ireland. And the fear mongering continues, allowing the big banks and top hedge funds to set themselves up for the next leg up...
The mainstream media attacks on precious metals were so extreme last year that they began to border on the bizarre. The “cult of fiat” was relentless in their attempts to slander gold investors and it seemed as though no matter how well the yellow stuff did, or how dismal the dollar’s performance was, they would never get tired of the disinformation game. Fast forward a year later, however, and they have been utterly silenced. What a difference twelve short months can make…
Not even 48 hours after Dagong dared to tell the truth about America's sad state of affairs (again) and downgraded the developed world's most insolvent nation for the second time in half a year, Moody's has confirmed that in the creditor-debtor relationship, it is the latter who wears the kneepads. As of a few hours ago, Moody's has upgraded China from A1 to Aa3. The reason cited: "we need China to keep buying our debt" - well, not really, we have the Fed to do that, and in 2 weeks, China's top holding of US paper will be a distant memory. But the last thing the US needs is to piss off the one country whose security dump could be too big even for the Fed to monetize. Ergo: throw Moody's in the wolves' den. After all nobody respects, cares or in any way pretends to even listen to the disgraced and Wells Noticed rating agency (speaking of which, whatever happened to that Wells Notice?).
America, that grand experiment created to probe the limits of human freedom, liberty and equality, has succumbed to its many injuries and passed away. The exact time of death is uncertain, the causes many. America was always, until its demise, a work in progress, but that progress stopped. The country lost its way, forgot where it was headed, and fell prey to a host of enemies, all of them coming from within.
The rise in oil and grain prices over the last several months will be reaching Main Street by this winter. Gonzalo Lira argues that those price rises, coupled with the Federal Reserve's Quantitative Easing 2—scheduled for announcement in the coming two weeks—as well as the escalating Currency War with China will inevitably lead to runaway inflation: And he is prediciting it will start this March of 2011. —Gonzalo Lira
An avalanche is not an “event”, it is an epic; a series of smaller events drifting and compacting one after another until the contained potential energy reaches an apex, a point at which it can no longer be managed or inhibited. A single tremor, an inopportune echo, an unexpected shift in the winds, and the entire icy edifice, the product of countless layered storms, is sent crashing down the valley like a great and terrible hand. In this way, avalanches in nature are quite similar to avalanches in economies; both events accumulate over the long span of seasons, and finally end in the bewildering flash of a single moment. The problem that most people have today is being unable to tell the difference between a smaller storm in our economy, and an avalanche. Very few Americans have ever personally witnessed a financial collapse, and so, when confronted with an initiating event, like the stock market plunge of 2008, they have no point of reference with which to compare the experience. They misinterpret the crash as a finale. Untouched, they breathe a sigh of relief, unaware that this is merely the beginning of something much more complex and threatening. So, without personal experience on our side to help us recognize a trigger point incident; the catalyst that brings down our meticulously constructed house of cards, how will we stand watch? Will we miss the danger parading right in front of our faces? Will we be caught completely off-guard?
The PBOC caught markets off guard on Tuesday after the central bank raised its 1y lending and deposit rates by 25bps in what was the first official tightening move since 2007. As such, in what looked like an attempt not only to suppress inflation expectations but also an attempt to ease potential trade wars between China and the US caused markets to fret over the potential implications on growth and also demand for commodities in the region. In turn, the USD continued to rebound from current oversold levels and gained over 1.00%. As a result, commodity linked currencies such as AUD, NZD and CAD posted heavy losses against the greenback.
Looming losses from the mortgage scandal dubbed “foreclosuregate” may qualify as the sort of systemic risk that, under the new financial reform bill, warrants the breakup of the too-big-to-fail banks. The Kanjorski amendment allows federal regulators to pre-emptively break up large financial institutions that—for any reason—pose a threat to U.S. financial or economic stability.
A quick look at gold price action demonstrates that someone somewhere is actively debasing currencies. An even quicker scan of headlines confirms this to be the case: per Reuters "Bank of Japan Governor Masaaki Shirakawa said on Wednesday the central bank will consider expanding a new scheme for buying assets ranging from government bonds to exchange-traded funds when deemed necessary." Harakiri Shirakawa continued: "We have taken a very bold measure ... If the need arises in the future, making further use of the new fund as part of monetary policy is one of our strongest policy options." Judging by the chart below, either gold has a tent in its pocket or was really happy to hear this announcement.
For different reasons, the Federal Reserve and the Bank of Japan are trying to weaken their respective currencies. China is allowing its currency, the yuan, to strengthen, but not quickly enough for the U.S. This amounts to a two-fer for central banks in that they can accomplish two seemingly diverse tasks. It reminds me of an old spoof television commercial showing a couple fighting over whether a product was a floor wax or a dessert topping–”It’s a stimulus program. No, it’s currency manipulation. No kids, it’s both.”