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duane
Joined: 07 Mar 2007
Posts: 511
Location: western pennsylvania
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 Posted: Sun May 23, 2010 6:54 pm Post subject: |
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""Essentially, the Americans know we are broke and we are getting blokes killed for no good reason."
so he would be alright with the killing if the price were right?
maybe Obama could get his buds at Goldman Sacs to loan the UK some money to help fight terrorism. a win-win all around.
things could turn bad over there real quick
reservations are being accepted for the helicopter flights leaving the embassy roof
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Fintan
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| Posted: Sun May 23, 2010 7:29 pm Post subject: |
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| Quote: | The Anglo-American Alliance had been at the center
of the New World order since they won WWII.
It had transcended left and right politics. - Fintan |
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MichaelC
Joined: 06 Jul 2006
Posts: 1855
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| Posted: Mon May 24, 2010 3:49 am Post subject: |
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The photo of churchill and roosevelt reminds me of something.
One night while churchill was an overnight guest at the white house fdr was making the rounds of the family quarters in his wheel chair when he observed churchill sneaking out of eleanor roosevelt's bedroom!
" Winston - I'll have no more of that"!!!! admonished fdr.
Taking his cigar from his mouth churchill replied: " And neither will I"!!! |
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Fintan
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Joined: 18 Jan 2006
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| Posted: Tue May 25, 2010 10:44 am Post subject: |
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Tue 11:30am
Red ink runs......
Except for gold...
| Quote: | 
http://www.marketwatch.com/story/korean-spanish-worries-slam-us-stocks-2010-05-25
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| Quote: | As stock markets plunge anew, sovereign debt
threatens secondary banking crisis
By Jeremy Warner UK Telegraph Economics - May 25th, 2010
Stock markets are in trouble again. The FTSE100, for one, plunged back through the 5,000 barrier this morning, taking it back to where it was last August.
You don’t have to look far to see why. The worst affected sectors are banks, oils and mining. Oil and commodity prices are falling because of fears about a double dip recession; banks are slumping anew for much the same reason.
With banking there is a simple, arithmetic relationship between the level of economic activity and bad debt experience. As a crude rule of thumb, every one percentage point of contraction in the economy will result in a roughly equivalent impairment in the value of assets. Despite all the government money thrown at the problem, capital in the banking sector has barely recovered from the last, sub-prime and recessionary hit to its integrity. Now there is every possibility of a fresh round of bad debts.
In its last Global Financial Stability Report, the IMF reduced its estimate of prospective bank write-downs and loan loss provisions in advanced economies for the 2007-10 crisis and recession from $2.8 trillion to $2.3 trillion, of which the GFSR estimated that approximately two thirds had already been recognised. Note however, that these are the write-offs the IMF thinks appropriate for the last crisis. They say nothing about a new one.
Already interbank lending rates – the rates at which banks lend to each other – are back at elevated levels. True enough, spreads are not yet nearly as wide as they were in the immediate aftermath of the Lehman Brothers collapse, but after a brief return to normality, they have been moving steadily higher for some months now. Those banks flush with excess deposits, such as HSBC, are again being extra careful who they lend to.
Nor is this just about the sovereign debt crisis in the eurozone, though plainly it doesn’t help matters. German and French banks are particularly exposed to Greek sovereign debt. If you include Portugese and Spanish debt, then exposures are bigger still.
But the wider concern is that the austerity being demanded of all economies in Europe will tip them back into recession and thereby cause a new round of conventional bad debts. Liquidity is being withdrawn in anticipation.
Just as everyone thought the banking crisis largely over, it threatens to begin anew. The banking crisis helped prompt a sovereign debt crisis, which now threatens to reinfect the banking sector with a secondary bad debt experience. Markets are beginning to believe there is no way out. More worrying still, few if any can afford another round of bank bailouts. At the weekend, Spain was forced to come to the rescue of another of its regional banks, CajaSur. How many more of these overexposed mini-banks will the Government have to bail out, and can Spain’s already stretched public finances afford it? Unsurprisingly, the markets are doubtful.
There’s still room for confidence to revive and the problem to go away, at least for the time being. But it’s not looking good, not good at all.
http://blogs.telegraph.co.uk/sovereign-debt-crisis-threatens-secondary-banking-crisis/ |
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Fintan
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| Posted: Tue May 25, 2010 4:46 pm Post subject: |
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Could it be that somehow
the stock market bad news
is linked to this good news:
| Quote: | Treasurys stay higher after 2-year note auction
Fears about Korean tensions, Spanish banks spark rally in U.S. debt
May 25, 2010, 1:39 p.m. EDT - By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices jumped on Tuesday, pushing 10-year yields to the lowest since April 2009, and stayed higher after there was sufficient investor demand at the government's auction of 2-year notes to make it the lowest yield on record.
Bonds traded higher before the much-anticipated auction as investors fled stock markets and the euro on concerns about a variety of factors -- heightened tensions on the Korean peninsula, worries over Spanish banks, and rising stresses in inter-bank lending markets.......
http://www.marketwatch.com/treasury-yields-fall-to-lowest |
So it's out of the stocks/euro fire and
into Treasury's welcoming frying pan.
In fact late last year, Tyler Durden predicted that a
stock market crash would be deliberately staged in 2010
to scare cash out of stocks and into bailing out the US bond market.
Flight to safety, doncha' know.
| Quote: |
Brace For Impact: In 2010, Demand For US Fixed Income
Has To Increase Elevenfold... Or Else
By: Tyler Durden Saturday, December 26, 2009 12:52 PM
......we wish Tim the best of luck. Why our generous best intentions to the US Treasury?
Because... We already know that China is a major question mark, and will aggressively be looking at pumping capital into its own economy instead of that of Uncle Sam's - at some point the return on investment in its own middle class will surpass that of funding the rapidly disappearing US middle class. That tipping point could be as soon as 2010......
What options does this leave for the administration? Very few, and all of them are ugly. As we stated earlier on, the options for the Fed are threefold:
1 Announce a new iteration of Quantitative Easing. This will be met with major disapproval across all voting classes (at least those whose residential zip codes do not start with 10xxx or 068xx), creating major headaches for Obama and the democrats which are already struggling with collapsing polls.
2 Prepare for a major increase in interest rates. While on the surface this would be very welcome for a Fed that keeps hinting that deflation is the biggest concern for the economy, Bernanke's complete lack of preparation from a monetary standpoint (we are surprised the Fed's $200 million reverse repos have not made the late night comedy circuit yet) to a forced interest rate increase, would likely result in runaway inflation almost overnight. The result would be a huge blow to a still deteriorating economy.
3 Engineer a stock market collapse.
Recently investors have, rightfully, realized there is no more risk in equities, not because the assets backing the stockholder equity are actually creating greater cash flow (as we demonstrated recently, that is not the case), but simply because taxpayers have involuntarily become safekeepers for the entire stock market, due to Bernanke's forced intervention in bond and equity markets. Yet the President's Working Group is fully aware that when the time comes to hitting the "reverse" button, it will do so. Will the resultant rush into safe assets be sufficient to generate the needed endogenous demand for Treasuries is unknown. It will likely be correlated to the size of the equity market drop.
If the Fed decides on option three, we fully believe a 30% drop (or greater) in equities is very probable as the new supply/demand regime in fixed income becomes apparent.
http://www.istockanalyst.com/article/viewarticle/articleid/3739425 |
Do I have to remind you that times of increased volatility are
an opportunity for vast profits by those who know beforehand
when and in which direction that volatility will be moving.
But the thing of it is, is:
Is there enough money to support both
the stock market and the bond market?
No. Not without yet more money printing.
Thus:
| Quote: | Bullard Says Fed Should
Keep Asset Program Past March
Nov. 23 (Bloomberg) -- Federal Reserve Bank of St. Louis President James Bullard said the central bank should retain the flexibility to respond to any weakening in the economy by extending beyond March its authority to buy mortgage-backed securities and agency bonds......
.....“If the economy came in very weak, let’s say, in 2010, weaker than expected, we would have the option of doing further quantitative easing” through additional asset purchases, Bullard said. “If the economy came in stronger than expected and inflation expectations started to ratchet up a little bit we could maybe sell off some of these assets and remove some of the accommodation from our quantitative easing program.”.....
http://www.bloomberg.com/apps/news?pid=20601103&sid=act_vr3x0Ofc |
Ok, so sovereign debt means QE & Gov cutbacks > means poor revovery.
And, more US QE (& eventual inevitable cutbacks!) > means ditto.
Which is a W recovery, at best.
And interest rates getting out of the box.
How long does it take the market to figure this out?
BTW:
| Quote: | Obama Approval Tuesday, May 25, 2010
Overall, 42% of voters say they at least somewhat approve of the president's performance. That is the lowest level of approval yet measured for this president. Fifty-six percent (56%) now disapprove of his performance.
http://www.rasmussenreports.com/obama_approval_index_history |
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whej
Joined: 17 Mar 2010
Posts: 11
Location: The Former Republic of the U.S.
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| Posted: Tue May 25, 2010 6:35 pm Post subject: |
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Fintan, Do you think the Feds are pumping the market to keep it afloat, and if so how long can they keep it up? I don't see the huge fall yet and there seems to be little panic in the U.S... But I do see a great deal of activity in derivatives and the like.
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Fintan
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| Posted: Wed May 26, 2010 5:02 pm Post subject: |
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Well from what I can see the Fed are still
using derivatives/futures to steer the market.
Along with heavy doses of propaganda.
However, permabear Paul Farrell is as unconvinced
as I was in last Friday's audio. I'm waiting for that
Black Monday event - any day. Or even over
a few day's of sustained bloodletting.
I still find it hard to envisage breaking 6,470 tho.
It's possible. But they'll write-off & liquidate debt
rather than deflate that badly.
| Quote: | Warning: Crash dead ahead.
Sell. Get liquid. Now.
'Game's in the refrigerator.'
Power's turning off.
Dow sinking below 6,470
PAUL B. FARRELL - 25th May, 2010
ARROYO GRANDE, Calif. (MarketWatch) -- "This game's in the refrigerator! The door's closed, the lights are out, the eggs are cooling, the butter's getting hard and the Jell-O is jiggling ..."
That was legendary Lakers' radio announcer Chick Hearn's signature way of calling a game early, telling fans the home team won ... you can head for the exits before the final buzzer. Chick wrote the book with popular sports phrases like "slam dunk," "air ball," "charity stripe," and a "bunny hop in the pea patch" for a traveling violation.
Chick's our inspiration today: Last March I wrote "6 reasons I'm calling a bottom and a new bull." Today it's time for a new call. We've had a good year. Net gains over 50% in 2009. But now: "Game over, head for the exits." Bears beating bulls.
No, no, "it's a buying opportunity," says another legend, hedge fund manager, Barton Biggs. Buying opportunity? For who? Remember, Biggs isn't advising Joe Lunchbox about what to do with his little 401(k). Biggs' customers are mega-millionaires in his $1.5 billion Traxis Partners Fund. Main Street investors like Joe are prey in his casino.
Read on, you decide: As you stare from high up in the nose-bleed bleachers watching the game, staring at a Dow that not long ago was above 11,000 and heading for 12,000. Now the Dow's sitting on the bench, ready for the showers, weak after a couple air balls around 10,000. No more timeouts. "This game's in the refrigerator."
How bad is your bookie's point spread in this game? A blowout? Will the Dow drop below 9,000 again? Now that it's broken technical supports, will it drop below 6,470, where the last bull rally started in early 2009?
Can you handle the nerve-racking volatility generated by Wall Street's high-frequency traders playing the game at warp-speed with algorithms making thousands of micro-bets in milliseconds, betting billions daily?
So who should you listen to? Barton and I arrived at Morgan Stanley about the same time. He stayed decades longer, became one of the world's leading strategists, advising the kind of high-rollers who also bet at private tables in a Vegas casino.
You remember Biggs: In his book "Wealth, War & Wisdom" he advises his high rollers to prepare for a "breakdown of the civilized infrastructure." Buy a farm: "Your safe haven must be self-sufficient and capable of growing some kind of food ... It should be well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc. Think Swiss Family Robinson." Biggs is not advising small investors on what to do with their 401(k)s.
If you're gambling at Wall Street's casino, folks, the odds-makers are betting against Biggs. It's "game over."
Main Street lost 20% last decade ... yet like sheep keep going back
Yes, if you're channeling Chick, here's your "mixed metaphor" cue card: "This game's in the refrigerator ... Wall Street won (proof, Goldman's $100-million-profit trading days and Blankfein's $68 million bonus) ... Main Street's headed for another losing streak ... Congress' lights are out ... the refrigerator door's closing on financial reforms ... the lobbyists are laying some rotten eggs, poisoning capitalism ... the Tea Party-of-No-No ideologies are hardening ... the bull's Jell-O is jiggling to a flat line ... and this market's going into hibernation, with the bears ... run, don't walk, to the exits, folks."
But will Main Street exit? Will we ever learn? No. The Wall Street casino makes mega-billions for insiders like Blankfein and the Goldman Conspiracy. Yet "The Casino" is still below the 2000 record of 11,722. So after accounting for inflation, Wall Street lost over 20% of Main Street's 401(k) retirement money between 2000 and 2010. Yes, Wall Street's a big loser the past decade. Their advice is self-serving. Period.
Given their miserable track record, only a fool would bet with Wall Street. Betting odds are Wall Street will lose another 20% in the next decade from 2010-2020. Yes, today's market is a "buying opportunity," but only for Wall Street casino insiders like Biggs, Blankfein and even low-level staffers inside "The Casino." But not for our 95 million Main Street investors, there's more pain ahead, this market's dropping.
Correction? New crash imminent, worse than 2008
More proof: Earlier economist Gary Shilling said price-to-earnings ratios are at a "nosebleed 22.5 level." The Dow was around 11,000. Money manager Jeremy Grantham recently said the market's overvalued 40%. That could mean a collapse to 6,600. Last week in Reuters' "Markets Could Be Derailed Again," George Soros echoed a "game over" warning with a "stark warning ... that the financial world is on the wrong track and that we may be hurtling towards an even bigger boom and bust than in the credit crisis."
Now Dow Theory's Richard Russell is warning the public of an imminent crash: "Sell ... get liquid ... by the end of this year they won't recognize the country."
A bigger meltdown than the credit crisis? Yes, Bush's team drove America into a ditch. But now Obama and his money men, Summers, Geithner, Bernanke, are digging the hole deeper. Soros says we have not learned "the lessons that markets are inherently unstable." As a result, "the success in bailing out the system on the previous occasion led to a super-bubble." Now "we are facing a yet larger bubble." Worse than 2008?
Yes, the game may be "in the refrigerator," the lights will go out, but as Soros hints, the electricity may get turned off too. Get it? This may not be a correction. Not even a bear. What's coming could be worse than the 2000 dot-com crash and the 2008 meltdown combined, a "Super-Bubble" says Soros. And the biggest reason, Nouriel Roubini and Stephen Mihm tell Newsweek, is that "the president's half-measures won't fix our failed financial system" because he refuses to "bust up the too-big-to-fail banks."
Yes, Congress will pass something. But unfortunately, as reported on MSNBC, Senator Dodd, the reform bill's sponsor, is a turncoat, working overtime with Wall Street lobbyists "to weaken financial reform," leave us vulnerable to a new, bigger crash in the near future. And Wall Street lobbyists are spending hundreds of millions to kill reform.
'White Swans:' 2000 and 2008 crashes were predictable, next one too
Recently Roubini was interviewed by Charlie Rose in BusinessWeek. His message confirms the worst. Roubini was questioned about his new book, "Crisis Economics." Rose began by asking, "what have we learned from these crises of capitalism?" Roubini could easily have said, "nothing, we learned nothing." His actual reply:
"The first lesson is that crises are not 'black swan' events ... they're not just random outcomes. They are the result of a buildup of financial and policy vulnerability and mistakes -- excessive risk-taking, leverage, debt, and so on." They are 'White Swans' "because these events are predictable. But generation after generation, we seem to forget the past. When there's a bubble, there's euphoria. There's irrational exuberance. Consumers can use their homes like ATM machines. Governments and policy makers are happy because they get reelected. Wall Street makes billions of dollars of profits. Everybody's delusional."
Sound familiar? Yes indeed, in "This Time Is Different: Eight Centuries of Financial Folly," economists Carmen Reinhart and Kenneth Rogoff pinpoint the key signal that will blow the whistle and call the game: The "90% ratio of government debt to GDP is a tipping point in economic growth." For 800 years "you increase it over and beyond a high threshold, and boom!"
Warning, fans, the numbers on the game-clock are flashing wildly. America's ratio is now 92%, thanks to Obama's $1.7 trillion budget, future deficits, exploding debt. Soon, Ka-Booom! Another great nation bites the dust. Depression follows. Goodbye retirement.
Warning: 800 years of history are calling 'game over'
But can't we change destiny? Or are Dodd, Congress, Obama, Wall Street, the Party of No-No and 300 million Americans all just playing their parts in a historical script well-known to historians like Reinhart and Rogoff, Kevin Phillips, Niall Ferguson and others? The message of "This Time Is Different" is very simple:
"We have been here before. No matter how different the latest financial frenzy or crisis always appears, there are usually remarkable similarities from past experience from other countries and from history. ... no country, irrespective of its global importance, appears to be immune to it. The fading memories of borrowers and lenders, policy makers and academics, and the public at large do not seem to improve over time, so the policy lessons on how to 'avoid' the next blow-up are at best limited."
So please listen closely: All the TARP bailouts, stimulus debt and Fed loans won't work. Neither will a new conservative government. This is not a basketball game. We are not channeling Chick Hearn, calling this game before the final buzzer. While we prefer the illusion that "this time really is different," eight centuries of history suggest otherwise:
"The lesson of history, then, is that even as institutions and policy makers improve there will always be a temptation to stretch the limits. ... If there is one common theme to the vast range of crises ... it is that excessive debt accumulation, whether it be by the government, banks, corporations, or consumers, often poses greater systemic risks than it seems during a boom. ... Highly indebted governments, banks, or corporations can seem to be merrily rolling along for an extended period, when bang -- confidence collapses, lenders disappear and a crisis hits. ... Highly leveraged economies ... seldom survive forever ... history does point to warnings signs that policy makers can look to access risk -- if only they do not become too drunk with their credit bubble-fueled success and say, as their predecessors have for centuries, 'This time is different'."
No, "this time" it's never different. Get it? In the end, it doesn't matter what happens to the Dodd-Obama financial reforms. The endgame's never a Black Swan, it's a very White Swan well known to historians -- guaranteed, inevitable and inescapable. This time is never different.
The clock's flashing. Huge point spread. Think bear, think crash, think end of capitalism, think Great Depression II ... This is no buying opportunity, this game's in the refrigerator, call it.
http://www.marketwatch.com/story/crash-is-dead-ahead-sell-get-liquid-now-2010-05-25 |
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Fintan
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Joined: 18 Jan 2006
Posts: 4103
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| Posted: Wed May 26, 2010 6:04 pm Post subject: |
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In the audio I suggested that Iran would not
do a uranium-safekeeping deal with Russia
(preferring Brazil) because the Ruskies are
still allied to the NWO.
See latest development just out in the NYT:
| Quote: | Iran and Russia Exchange
Acerbic Barbs on Sanctions
By ELLEN BARRY - May 26, 2010
MOSCOW — Russia and Iran publicly traded barbs on Wednesday, showing strains in their longstanding alliance because of Moscow’s support for a new set of American-backed sanctions over the Iranian nuclear program.
During a televised speech in Iran, President Mahmoud Ahmadinejad lashed out at his Russian counterparts, who last week agreed, along with the other permanent members of the United Nations Security Council, on the draft language for the proposed new sanctions, which would punish Iranian financial institutions and countries that offer Iran nuclear-related technology.
“We do not like to see our neighbor supporting those who have shown animosity to us for 30 years,” Mr. Ahmadinejad said in the speech broadcast from the southern city of Kerman. “This is not acceptable for the Iranian nation. I hope they will pay attention and take corrective action.”
“If I was in the place of Russian officials, I would adopt a more careful stance,” he said.
The comments came a day after Iran’s ambassador to Moscow said he hoped that Russia would dissuade the other Security Council members from imposing sanctions, and warned that Russia risked manipulation by the United States.
“Russia should not think that short-term cooperation with the United States is in its interest,” said the ambassador, Mahmoud-Reza Sajjadi. “The green light the United States is showing Russia will not last long.”
A top Kremlin aide said Wednesday that Russia was guided by its own long-term interests, and that “our position can be neither pro-American, nor pro-Iranian.”
The aide, Sergei Prikhodko, went on to say that Russia rejected extremism and unpredictability in the global arena, and that “those who speak on behalf of the fraternal people of Iran” should not forget this.
“No one has ever managed to save his authority by making use of political demagoguery,” Mr. Prikhodko said in remarks carried by Interfax, a Russian news agency. “And I am sure that the thousand-year-long history of Iran itself proves that.”
Russia has historically opposed sanctions against Iran, which it considers an important regional ally. That position began to shift late last year when Iranian leaders rejected a United Nations-brokered uranium enrichment plan, which Russia had helped draft, to defuse the standoff over Iran’s nuclear program.
A number of countries led by the United States suspect that Iran has been enriching uranium because it wants nuclear weapons. The Security Council has repeatedly requested that Iran halt the enrichment. The Iranians have ignored the requests, saying they are within their rights to enrich uranium to relatively low levels for use in nuclear-power reactors.
Last week, Russia’s foreign minister, Sergey V. Lavrov, offered cautious support for a draft Security Council resolution that would impose a fourth set of sanctions on Iran. But he emphasized that the draft needed approval from the council’s nonpermanent members, and he encouraged Secretary of State Hillary Rodham Clinton to consider Tehran’s newest proposal to enrich uranium in Turkey.
Friction has also been building between Moscow and Tehran over a proposed sale of S-300 anti-aircraft missiles to Tehran, a contract that Russia has suspended but not canceled. Washington has pressed Moscow not to deliver the weapons, which could help Iran shoot down American or Israeli warplanes should either try to bomb its nuclear facilities. Iran’s ambassador said on Tuesday that further delays “will harm Russia’s reputation as a reliable supplier of weapons.”
http://www.nytimes.com/2010/05/27/world/middleeast/27iran.html?src=mv |
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moonview
Joined: 07 May 2010
Posts: 1
Location: London
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| Posted: Wed May 26, 2010 8:38 pm Post subject: a paranoids perspective |
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Hi, my first post on this site and one in which I'd like to preempt with gratitude for opening eyes up to things I have given thought too but never really accepted as possible until I'd begun to listen to some of the arguments put forward within these pages. So thx Fintan, and though it's all a bit shocking and unbelievable at times I'm coming to accept that there is some form of underlying manipulation from an elite who do hold the actual power. It's raised a lot more questions for me but nevertheless I now accept the underlying theme put forward. It's just that if it's true it's unlike the very transparent fascist regime's of the past and propaganda now comes in the form of news, entertainment and advertising instead of a propaganda doc.
I won't go on now accept to say, if much of it is true, and we are in the grips of a fascist regime that hides it's true face. Given the events of recent years, at those times, when the loss of power has been at it's most vulnerable, isn't it also true that they've conspired to manufacture events that take our attentions away from the real perpetrators and to create absolute havoc. So now we have the near collapse of the Euro, with countries and banks beginning to creek again and a possible double dip into the unknown, isn't it at just these moments when we are at our most vulnerable. I'm thinking now, with the hardening of apposing factions, re Korea, Iran, South America and the west wouldn't it be just the right time to speed up the timeline and conspire us to war.
In summary, although things seem to be going in the right direction it's also possibly just about now when things might shift to something much worse. |
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MichaelC
Joined: 06 Jul 2006
Posts: 1855
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| Posted: Sat May 29, 2010 4:40 am Post subject: |
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Fintan wrote:
| Quote: | n fact late last year, Tyler Durden predicted that a
stock market crash would be deliberately staged in 2010
to scare cash out of stocks and into bailing out the US bond market. |
The master criminals owning/running the Fed will continue to buy the US govt. bonds, thus creating ever more inflation and 'saving' the govt. bond market. Inflating is all they know how to do. Having never worked for a living, these slimebuckets have little understanding of the fair and square world of dollars and sense economic reality. They prefer to deal at gunpoint only.
My very clever Dutch friend - who made several hundred thousand euros on the short side in 2008 - believes the Dow is going to 1000 and the bottom will be reached in 2016. He continually exhorts me to buy puts. Should I?
Time will tell! |
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MichaelC
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Fintan
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| Posted: Sun May 30, 2010 1:47 pm Post subject: |
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English Translation of the article: http://bit.ly/cR7fo9
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Fintan
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| Posted: Sun May 30, 2010 7:47 pm Post subject: |
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As usual Jim Willie hits a lot of sweet spots
in his latest analysis below.
However I'm taking the section on Interpol
under advisement until confirmed elsewhere.
And I'm not to sure about a two-tier Euro either.
Nevertheless...........
| Quote: | HIDDEN DOLLAR SWAP HAMMER
Jim Willie CB - May 26, 2010
Editor of the "HAT TRICK LETTER"
Let me start the article with a personal note. For the last six years, my pen has put forth a public article almost every week. Since the end of 2009, a change has come from that pattern, for four reasons. First, articles take time and serve as free volleys sent into cyberspace. They are attempts to raise awareness of a broken corrupt system, to encourage increased investment protection by the investment community, and to make repetitive messages that can sink in. Second, many of the warnings have come true of a monetary system in tatters, an insolvent banking system, a failed central bank franchise system, and a discredited amalgam of sovereign bond markets. There is no need to repeat warnings of further events toward breakdown when the forecasted breakdown has arrived in full glory. Third, I wanted to both digest the crisis myself, to discuss and ruminate over the disaster with my trusted colleagues, and to permit folks to digest the disaster, ruin, and continued breakdown themselves. Fourth, more time has been devoted to Hat Trick Letter subscribers, and less to the public. Events never occur according to a script, or forecast, or plan. Too many unintended consequences come. Too many complex elements take a toll within the system. Too many corrupt players defect or are badly weakened. This is history in the making, a highly important chapter of history being written before our eyes. This is World War in Finance with the AngloSphere under great pressure of losing its hegemony in the control of global financial structures. Entire national economies are at high risk. These are historic times.
THE USDOLLAR SWAP FACILITY
USDollar swap lines have been revived, rejuvenated, and applied. They are critical in sharing the workload in monetary expansion, the inflation machinery. The US Federal Reserve issued the following press release on May 9th, heralding the facility. It enabled the printing of money for immediate usage by foreign nations, as they essentially print their own money but use the USDollar wellspring as conduit. See the USFed press story (CLICK HERE). This announcement should be viewed as a response to debt abuse, and an open license to continue the great game of Inflation. The public balance sheets have systematically built up greater debt in order to rescue private banks from ruin. The government leverage upward has enabled a private bank leverage downward, with little success however, as perception of wreckage is pervasive and turning universal. The bond market recognizes the ruinous situation and has shifted attacks from banks to sovereign accounts, the government debt arena. So the USFed will produce mountains of new money. Gold noticed the debasement process and reacted strongly, in almost all currencies. So an ambush was planned. The USFed press release read as follows.
"In response to the reemergence of strains in US dollar short-term funding markets in Europe, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing the re-establishment of temporary US dollar liquidity swap facilities. These facilities are designed to help improve liquidity conditions in US dollar funding markets and to prevent the spread of strains to other markets and financial centers. The Bank of Japan will be considering similar measures soon. Central banks will continue to work together closely as needed to address pressures in funding markets.
The Federal Open Market Committee has authorized temporary reciprocal currency arrangements (swap lines) with the Bank of Canada, the Bank of England, the European Central Bank (ECB), and the Swiss National Bank. The arrangements with the Bank of England, the ECB, and the Swiss National Bank will provide these central banks with the capacity to conduct tenders of US dollars in their local markets at fixed rates for full allotment, similar to arrangements that had been in place previously. The arrangement with the Bank of Canada would support drawings of up to $30 billion, as was the case previously. These swap arrangements have been authorized through January 2011. Further details on these arrangements will be available shortly."
This spigot is precisely what lifts the gold price along the powerful long-term trend. It is the great monetary inflation lever. However, in the last two weeks, the accommodative official credit lines have been taken advantage of to supply funds to central bank partners who have a constant habit of selling huge contracts of gold futures, all out of proportion to economic need, and in concentrated fashion. It should come as no surprise that the gold price was pushed down $60 and the silver price pushed down $2.20 after the Dollar Swap Facility kicked in, yet the gold community seems unaware. Harken back to the autumn 2008, to the crisis acceleration events and banking system demise. Recall the $132 billion payment made to JPMorgan on a Saturday morning before dawn before a bankruptcy court judge in Manhattan. The official story was one of the private Lehman accounts compensated for. In the following two weeks, the gold price and silver price plummeted amidst claims of a grand liquidity drain. Last week was a sort of replay with ample funds similarly reloaded with Dollar Swap Facility funds, courtesy of the USFed.
OPTIONS EXPIRATION
If the Commodity Trading Futures Commission truly wished to observe the details of highly suspicious anomalies in the precious metals market, they need only monitor large trades in this current week when futures options expired for gold. Many gold futures options expired worthless. Notice the gold price stayed below the critical $1200 waterline until Tuesday afternoon. A heap of options went worthless, and the gold price moved over $1200 in the wake of the strained event. Huge paper gold sales were recorded. Positions by gold traders who expected mammoth monetary inflation to push gold toward $1300 per ounce were laid to waste. Referring to options expiration day of Tuesday May 25th, Jesse of the Cafe Americain said "Gold traded all day below 1200, at times rising to within fifty cents of the key strike price of 1200 where a large concentration of call options were clustered. Well, since the call options at 1200 have expired worthless, why bother using the energy to continue to suppress the price?" The tactics used to prevent the gold price from advancing are more easily seen in the open. One must wonder if the CFTC officials are actively doing their jobs.
DOLLAR SWAP RESCUED USTREASURYS
The USTreasury Bond functions with two roles. It competes as safe haven with gold during crises and sudden asset price stormy declines. But it also serves as funding agent for the powerful monetary inflation. Confidence in the USTreasury market was at high risk. Notice the IEF bond index fund of long-term 7-10 year USTreasurys, lifted at a critical juncture. It was at the point of decision, breakdown or rally. The Dollar Swap Facility was used to bail out big banks with a heavy inventory of Greek and other PIGS nation sovereign debt. The banks turned around with their impaired bonds redeemed for cash, and placed a great deal of the resulting funds in USTreasurys. The Dollar Swap Facility was critical. So the Bond Vigilantes were scattered by a flurry of inflation machinery in an indirect glancing blow after the USFed gave strong aid to European banks which relieved pressure on the USTreasurys at the precipice.
HAPHAZARD GOLD BUBBLE TALK
Whenever talk turns to gold being a bubble, regard the message as flirting with desperation. The true bubble is USTreasurys, if not all government debt including UKGilts, the PIGS national debt, and much more. The AngloSphere is replete with asset bubbles in the last 20 years, from tech stocks to housing & mortgage bonds to USTreasurys in a march over the cliff on the path of fiat folly. The phenomenon most striking in the last two to three years has been the transfer of wrecked assets from private banker balance sheets to the government balance sheets, themselves now under siege. The tragedy is that the private banks remain deeply mired in insolvency, while the debt ratios and extreme leverage of the sovereign debt is coming to light. Thus gold has begun to be openly recognized as a legitimate safe haven in full competition with the USTreasurys and the major currencies. The rout of the Euro currency has opened the floodgate of criticism against ruinous governmental policies centered upon bailouts for banks and futile stimulus plans. Grand errors by policy makers regarding indefensible fiat paper monetary systems might be working toward a climax. They appear stuck without alternatives.
The untold story of the gold correction in the last two weeks has been that it was funded by the Dollar Swap Facility, but the good news is that its price movement abides by the parameters of a breakout correction. The 1180 level has been honored, not broken. The moving averages are still in uptrend. The powerful reversal since the Dubai and Greek crises were unleashed has resulted in a breakout, a correction that typically revisits the point of breakout, and a continuation. The monetary system fights to avoid ruins. The central bank franchise model struggles to avoid wreckage. The sovereign debt is in danger of discredit. The entire globe seeks a solution, but the banking leaders and political leaders in charge can only reach for the same debt based elixir that renders great damage to the body economic. They have ordered $1 trillion more from the same tainted fountain for distribution, seemingly oblivious to its ineffectiveness. Worse, they are unaware how the continued monetary excess kills capital formation and leads to enduring recessions that morph to depression.
Each new round of Quantitative Easing and gold price suppression assures an even higher potential gold price as long-term forecast target. The official policies are ruinous, and even destroy capital, eroding capital formation, and circumvent job creation. The eventual gold target in my view has moved from $5000 to $7000 in the last few months. No remedy is in the works. No solution is even pursued. No liquidation of toxic assets is underway. More stimulus is planned for the USEconomy, as home foreclosures continue and bankruptcies continue and bank closures continue and lending is obstructed. The more money the syndicates and governments in partnership create in futility, the higher the gold target becomes. The golden crafts are true lifeboats for the great ship listing badly.
FINANCIAL REGULATION & THE FLASH CRASH
The Wall Street financial barons deserve credit. The well timed 1000-point stock market descent occurred on the very day (May 6th) the Financial Regulatory bill had a key provision being scripted for auditing the US Federal Reserve. The US Senators blinked, and stern provisions were changed. They will force an audit but only for certain TARP-related events. At least it is a foot in the door to its august halls. The Flash Crash, as it is known, has turned the US stock market even more into a round robin competitive backyard for Wall Street firms, where 73% of the NYSE trading volume used to be derived from their computer program trades. Figure even more now. The US stock market has become the scene of added scrutiny if not derision. Miraculous recoveries after 3:30pm are standard these days, like Tuesday. Even the NASDAQ was 3.3% down late in the day, only to stage a recovery. The Plunge Protection Team is operating much more in the open. As they ply their trade, they have rendered the US stock market into something far from an equilibrium based system seeking proper valuation. Recall its foundation for recovery one year ago was relaxation of the financial accounting rules, thus converting equity valuation into over $1 trillion in added value supposedly. The most striking and predictable aspects of the Fin-Reg Bill are how the USFed has even more power than before. The original plan was to limit its power. The banking elite took the honorable motive to limit syndicate powers and to audit the USFed, and turned it into even more USFed powers, like the rod to dissolve any financial firm that endangers the US financial system. This power is ripe for potential abuse.
INTERPOL & THE LIST
Word has come to the Jackass desk from a very different location, two of whose university chums serve on an elite commission in Central Europe. Recall the stories of a mid-December landing of a planeload of Interpol agents. Recall the announcement by President Obama in January of strong subpoena power granted to Interpol operating in the United States, a story that should have sent shivers through the financial sector. Instead, it was duly reported with no followup. The subpoena power is not to be dismissed. It enables Interpol agents to obtain documents, to force testimony, and to investigate with some teeth. My source tells of how the Interpol has been ON THE GROUND IN THE UNITED STATES FOR MONTHS doing their work in banker investigations. The same source told of how last August 2009, at least thirty former USDept Treasury officials and Wall Street executives together appealed to Interpol, turned state's evidence, and were granted asylum. They arrived with much crucial evidence in the form of documents, emails, CDs, trading logs, and personal testimony. The information gained has been used for several months in criminal investigations of very high order. Much progress has come, but it is not shared publicly. Finally, lists are being compiled for Arrest Warrants of US & UK & West Europe bankers and politicians complicit with banking center corruption. The story mentioned London bankers working for Goldman Sachs as having their passports lifted. More to come on this showdown. It begs the question who delivers the warrants and what happens if they are rebuffed in defiance, especially if armed bodyguards are present. The list reportedly reads like a Who's Who, not yet seen by Jackass eyes though. A climax is coming, but unclear when.
ENDLESS Q.E. ROUNDS
The public is told that each Quantitative Easing round is the last, the one and only. Just as my forecast was for absolute bond contagion two years ago, and my forecast was for frequent unending AIG & Fannie Mae bailouts, and my forecast was for no Exit Strategy with a steady unerring path of 0% policy, next my forecast recently has been for numerous announced formal QE rounds. In fact, they will become a global round robin, as each continent announces theirs, which opens the door politically for a redux on ours. Then ours invites another of theirs like a merry-go-round with exposed heightened risk. Great Britain is on course for a powerful second QE round. The US by virtue of the revived Dollar Swap Facility has its second QE round, although hidden, the first being in the autumn months of 2008. This month we see the first big QE round in Europe. Combine these QE rounds with government stimulus designed to resuscitate the many moribund economies that stand unresponsive, and surely monetary debasement is on a clear path.
MORE ECONOMIC STIMULUS DIRECTLY AHEAD
Meet Lawrence Summers, head of the White House Council of Economic Advisors. His reputation is of brilliance, but laden with obnoxious and arrogant behavior. He tends to become bored at policy meetings. He is reported to be pushing for another USGovt stimulus package. He must not be reading about the nascent economic recovery that blesses the US nation, endorsed and promoted by USGovt agencies and the President himself, echoed by his Cabinet of ministers lacking in business experience. Perhaps Summers read the recovery reports and was put to sleep. Perhaps the policies seem more like Politburo pablum, certain sedatives. We the People can count on Summers to serve us vigilantly and diligently. Somebody should tell Larry there is a crisis to manage!!
GREEK DRAIN PLUG & FAILURE PLAN
Key provisions are outlined in the European Union Bank Bailout plan that permit backdoor scuttles. The first provision states that the aid package will be "immediately and irrevocably cancelled" if it is found to breach the EU Treaty's official No Bail-out clause. Such finding can come in a ruling by the European court or the Constitutional courts of any EuroZone nation. The second provision states that if any country finds it cannot raise funding for the rescue at interest rates below the 5% level agreed for Greece, it may opt out of the bail-out. One might soon observe the biggest sellers of European Govt debt and speculators in the EuroBond sovereign Credit Default Swap contracts might be the governments themselves. That includes both the distressed nations in the PIGS group, and the core healthier nations themselves which have born the brunt of the intramural welfare system in fracture. In my view, the Greek Govt debt crisis has been used as a distraction from the extreme problems not only in Spain, Italy, and Portugal, but in the United Kingdom as well. The sovereign debt rejection in the bond markets serves as an indirect repudiation of the global monetary system, whose backbone is not gold but rather debt. The climax will be the UKGilt default followed by its partner default in the USTreasurys. The primary truth in the sovereign debt market is that these bonds cannot be rescued, since the device for any rescue under consideration is more fiat currency, whose basis is indebted acid in the mix.
Notice the string of failed sovereign bond auctions, most notably in Germany. Rejections are in progress, in lands that do not possess the Printing Pre$$. Expect the bailout in Europe to lead to little remedy. Its litmus test is the Euro currency itself. It has fallen to a lower level than before the announced bailout. These are band-aids applied to a potentially fatal wound, in need of more than tourniquets. It needs a new monetary vehicle upon which to build a new foundation. Its failure can also be seen in the separation effect. The rising Euro no longer spreads good tidings or provides favorable winds for US stocks. See the above graph.
NORTHERN EURO CURRENCY
Word has come to the Jackass desk from the War Room itself, where important decisions were made in a series of meetings inside Germany. The new Northern Euro currency is finally in its formative stage. Contracts have been forged. Relationships with the more independent Central European central banks have been arranged. Market mechanisms with the commodity markets have been delegated to Finland. A role for Russia is being planned, source of many commodities. The timing of the new Northern Euro is planned for June 2011, with perhaps little if any formal news releases. The key element of the new Northern Euro will be its gold component. Permit a Jackass conjecture of a 1% or 2% cover clause, meaning $100 million in Northern Euros could be redeemed for assets that contain $1 or $2 million in gold bullion. The new currency will be born in crisis. One must wonder if Saudi crude oil will eventually require payment in Northern Euros. Maybe it will contain not only a gold component but a crude oil component.
For over a year, my openly stated belief has been that the first nations to create a monetary and banking system with clear distance set from the USDollar will be the next global leaders emerging. It will be Germany and its cohorts that include the Benelux nations and Austria. In debate is the future role of France, which might be assigned squire duty for the Germans who hold 94% of their sovereign debt. By the way, the Northern Euro as planned is a USDollar Killer, since the present day world reserve currency will fall rapidly in valuation, finding its true value versus direct competition, after proper evaluation of its hemorrhage of USGovt deficits. Its debt ratios place the USTreasury debt securities in the same PIGS pen as the Southern Europe nations heaving in convulsion.
FASCIST BUSINESS MODEL
Take a minute to be reminded of the model at work for almost two decades, ever since Goldman Sachs took control of the USDept Treasury in 1992, the start of a dangerous trend. Much has been written in the past few years in these columns about the Fascist Business Model, where large corporate interests are merged with the state. Federal policy actually melds with those of Wall Street, or the former is directed by the latter. Much has been written about the near total lack of remedy, lack of reform, lack of liquidation, and lack of law enforcement. The key characteristic of the Fascist Business Model is that its conflict of interest and inefficiency lead to an eventual breakdown of the system. At high risk on the path toward conclusion is the failure of the state and breakdown of the economy. The housing market failure and chronic insolvency is its bitter fruit. The insolvent banking system is its backfire blast. The TARP Fund fiasco was a huge flag signal of the unchecked flow of funds in the shadows. The Louisiana Oil Volcano is one further point of aroused suspicion. The ultimate breakdown will be seen as a USTreasury default, whether technical or actual.
http://www.gold-eagle.com/editorials_08/willie052710.html |
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Fintan
Site Admin
Joined: 18 Jan 2006
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| Posted: Sun May 30, 2010 8:59 pm Post subject: |
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This assessment by gold bull Eric Sprott
is a must read reality check.
It's a short analysis and to the point:
A Busted Formula PDF
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Big Boss
Joined: 04 May 2008
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| Posted: Mon May 31, 2010 1:37 am Post subject: |
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| Nice analysis pdf. I was reading Bloomberg Magazine (1st time I ever read through one) out of boredom in a friends kitchen where the article was about Geithner's visit to China a few days ago. It has mentioned that one of his primary goals (or his handlers lol) was to strengthen the Yuan against the Dollar? I was trying to assess a motive for the NWO for attempting to do that. He seems to have some good connections there, although the Chinese do not seem to be interested in any of his rhetoric. Any ideas? |
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