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Showing posts from September, 2010

Are There Any Doors Open for the Fed?

Jim Willie, AKA the Jackass, thinks we're like Japan only worse.
Japan has proved without confusion that 0% is a permanent stuck position. The United States will repeat the path, but with a vast mudslide. Japan has had the advantage of a strong industrial base, a sizeable trade surplus, and no war budget. Thus it has been capable of funding much of its own deficits. It does possess a big debt burden. But the US has $1 of new debt for every $1 in government revenue. The US war budget is almost as large as its total revenue. The US depends upon foreign creditors, many of whom have been thoroughly alienated.Read the rest.

Where is gold going in the near term?

No one knows for sure, of course, especially in the case of gold, since there is evidence of and rational grounds for suspecting government price suppression of both gold and silver.

In attempt to anticipate where gold might go, Jeff Clark of Casey's Gold and Research Report has looked at some possibilities. If the price of gold matches the 23.5% average of price surges since 2001, gold would hit $1,428 in the current run-up. If it matches the maximum surge of 35.5% since 2001, it would settle at around $1,567.
Regardless of what gold does over the next few months, I think 20%+ surges will continue throughout this bull market, with the occasional 30% punch. And a doubling of the gold price in a matter of months is also likely in our future, a sure sign of the Mania phase. Gold surged 128.5% from October 8, 1979, to January 21, 1980. A similar vault today would have the price jumping from, say, $2,400, to $5,484 in less than four months. Yes, I think that's entirely possible an…

Fighting Your Enemy by Building Him Up

As Adrian Ash notes, countries that wanted to destroy their enemies would secretly inflate their enemies' money - printing tons more of it - to ruin their economies and thus impair their ability to defend themselves. The British did it to the infant U.S. states, you will recall, during the American Revolution.

Weakening the enemies' currency is out in this Alice in Wonderland fiat world. Now the strategy is the exact opposite.

Japan is seething over China's recent mass-purchases of the Yen. Quoting Peking's finance minister, Michael Pettis, Ash writes that "China's Yen purchases this year equal $27 billion, more than six times China's combined Yen buying in the previous five years."
"Everyone is playing the same game," says Pettis – "trying to force the brunt of the adjustment abroad...and here we have China and Japan squabbling over Chinese attempts to recycle its trade surplus into Japan rather than into the US or Europe."

China b…

Gold: Demand Growing, But Not Supply

In a weekend commentary, Przemyslaw Radomski writes:

Gold prices are rising from the long-term perspective and it’s no wonder. Central banks that had one time liked nothing better than to get rid of their gold reserves, are amassing major gold positions. The International Monetary Fund said last week that it sold 10 metric tons of gold to the central bank of Bangladesh raising $403 million. The IMF has already sold 212 tons of gold to the Reserve Bank of India, the Bank of Mauritius and the central bank of Sri Lanka, all in November last year.

So far in 2010 Russia has increased its gold holdings by 2.8 million ounces, $3.6 billion at current prices giving the Russian government a total of almost $30 billion. Saudi Arabia and the Philippines have disclosed new gold buying in 2010, plus India, Sri Lanka and Mauritius bought gold in 2009. We know that the People's Bank of China is also is a major accumulator of gold, gobbling up its local mining production in hopes of having a hedge …

Dan Winters Shoots Bernanke

Who is this man with a vault door fronting his palatial office?

Why, of course - Time's Person of the Year, 2009. The man who saved the world from financial ruin.

And here at work we see the secret to his success.

Photos from Dan Winters, celebrity photographer.

The War on Wealth Generators

In his August 2 NY Times Op-Ed "Welcome to the Recovery," Timothy F. Geithner, head bureaucrat of the government's Treasury Department, claimed that
the recession that began in late 2007 was extraordinarily severe, but the actions we took at its height to stimulate the economy helped arrest the freefall, preventing an even deeper collapse and putting the economy on the road to recovery.That's half-true. The actions of the government and Federal Reserve did prevent a deeper collapse. The false part is the claim that the economy is on "the road to recovery." The economy needed to correct the mistakes of the preceding boom, and the various stimulus programs only prevented this from happening.

Today's Labor Department employment figures are surprisingly good, considering the determination of the government and Federal Reserve to keep the recovery from happening. The LA Times reports that
Nearly 15 million workers were counted as jobless last month. Includi…