With the Fed announcement today and the resulting tremendous volatility in gold and silver, King World News interviewed the legendary Jim Sinclair. When asked about the action in gold Sinclair responded, “We had two periods today where the offerings were being made in huge amounts and the bids were running for cover. I mean it’s your standard manipulation. But you can be sure that there is a designed effort to hold the dollar and to oppose gold going to the positive side so that the action of the Federal Reserve will not be analyzed as extreme, even thought it is.”
November 3, 2010
Jim Sinclair continues:
“I think the most salient point of what has taken place today is not the number but more so the fact that the Fed took a stand in the face of both national and international, in fact fierce international criticism of the policy.”
How did you know that there was going to be a large number for QE?
“Well you have to get a feel from people who do business with the Fed on a day to day basis, and what they found unusual was that Bernanke actually came out well before the meeting and gave an indication of exactly what he had intended to do. Now you have to look at what the cost would be of backing off from that. And you really wonder whether or not Bernanke actually set up all of this criticism, to come out and look for the first time like a very strong Fed, even if their direction might be misguided.
I don’t think QE is good, and I wouldn’t defend the economics of it but I don’t think there was any alternative. The need for the QE basically to infinity and that’s I think what you can call today as a watershed event, the need basically is because the balance sheets of the financial community are all a product of FASB’s permission to value assets that don’t exist, that aren’t there, that are entirely fabricated.
The Fed has a better picture of the financial condition of US entities than any central bank anywhere. The Fed has the entire picture of what it’s holding on its balance sheet, the Fed knows the extent and difficulty of the problem. The Fed has kicked the can down the road one more time because there is no other choice.
If the Fed hadn’t acted to bail out the international investment banks when the over the counter derivative meltdown first came, you would have had a roll over you wouldn’t believe. So you are stuck between a rock and a hard place, it isn’t right what they are doing but there is no other alternative.”
Why was QE reported at $600 billion when it is really $900 billion?
“Because that’s management of perspective economics.”
Are we in a depression?
“We are in unchartered waters with business folding over. We don’t know what the name will be for this. One thing we do know is it’s not dollar positive and that the only insurance out there that would react positively to things we can’t control such as Fed decisions is gold.”
Is it ok to let gold run in a day or two?
“I don’t think you can really control it. I think that gold will run but as of today, whenever the boss speaks, we’ll call him the financial boss, there is always intervention to make the boss look good. It’s never failed, it will always be so, and it is so today.”
When asked about the US dollar Sinclair responded, “72 right now is the price objective, then I think some modest strength, and then into the sixties.”
Jim Sinclair also mentioned the dollar index, “could eventually fall to 56.”
But theoretically if we can hold in that level and that’s the low, it’s not the end of the world?
“I don’t think it has to be the end of the world, I think it’s the end of doing business as has been done. I think it’s the tail end of the darkest period we have ever had in finance and the dollar will reflect that.”
When asked about how his father Bert Seligman and his business partner Jesse Livermore would be trading gold going forward Sinclair responded, “I believe firmly that Bert would have considered it (today) a bottom, and now they (Bert and Jesse) would be looking to pick it up on any dips.”
Well there you have it from one of the greats, gold has bottomed. Assuming Sinclair is correct, for all of you dip buyers, if you blinked you missed it.
November 4th, 2010, 16:15
vector7
Re: America will face Riots, Marches, and Revolution
The unofficial start date of the current financial crisis is around the month of February 2007 and since that time to say Americans have witnessed history would be an understatement. The complete and total collapse our financial system was allegedly averted by the “bold” action of our political leadership and the first wave of Quantitative Easing engaged in by the Federal Reserve. Despite these false proclamations of hopeful change to our economic condition, the pictures of what has happened since the Fed expanded its reserves tells a different tale. I shall let you, the reader, decide if in fact the first wave of QE was effective before the second program is announced this afternoon.
The conclusions should be quite obvious, unless you are blind.
Today's announcement of Quantitative Easement 2.x was not a surprise. QE2.x refers to the fact that the FED had previously revealed it would be purchasing Treasury's with incoming moneys from mortgage payments of principal and interest and mortgage payoffs. This had been estimated as between $200 and $300 billion over the next year.
Today added $600 billion to that in instant money creation, also known as "printing" over the next six months. Hints have been dropping everywhere lately that the goal actually IS to create inflation and to devalue the US dollar in an orderly manner. Most aware investors have known intuitively for some time that inflation and devaluation is the inevitable outcome, but it has been confirmed by people in the know a number of times recently. The puzzling part has been why QE2.x is necessary at this time. It came down to "what do THEY know that we don't know?"
We've all seen the lists of possible causes existing behind the screen. This in itself has resulted in political and market anxiety. Volatility. Where is the shoe that hasn't dropped yet? Bank failures we don't know about but they do know about? The lists go on.
Why couldn't Bernanke produce a clear explanation?
He's the self-admitted expert on curing depressions, but he's been amazingly silent or vague. Why did some peripheral FED officers--Kansas
City's Hoenig comes to mind--keep insisting QE wasn't necessary and could be dangerous? It could be part of an overall plan or perhaps he's simply out of the loop. What were the G7, IMF/World Bank, G20, and US/Chinese meetings really all about? Did the looming elections keep a lid on it all.
How does it all fit together? It comes together just the way it looks, as a friend always refers to clues being hidden "right out in the open". One key to "getting it" is the size of QE2.x, of about $900 billion which is close to the size of Chinese Central Bank holdings of US Treasury's. The real deal in QE2.x is that China and the US have negotiated to redeem China's T Notes and Bonds over the next six to twelve months during which time there will be a staged progressive float of the yuan.
This deal is the inflation and devaluation the FED thinks we need, the currency float the Treasury and Congress think we need, and the cashing in of their huge hoard of Treasurys the Chinese think they need.
This is the equivalent of Roosevelt's resetting the gold price in 1934, greatly devaluing the dollar, and supposedly jump-starting the economy.
This is China's long hoped-for gain on their US bonds. This is the capstone of Bernanke's career of studying the 1930's. This will be done, they all hope, in an orderly manner. Only the citizens of the US will suffer an enormous loss of purchasing power! The clear judgement is that they are too dumb to know what's happening to them. Central banks never want us to know.
November 4th, 2010, 17:47
vector7
Re: America will face Riots, Marches, and Revolution
Unbelievable video has surfaced from Virginia’s 5th district, where a supporter of Rep. Tom Perriello (D) went on a rampage against supporters of Republican Robert Hurt.
In the video, the man can be seen ripping up signs and verbally assaulting a group of people assembled not far from Perriello’s headquarters. He especially hones in on a black female Hurt supporter, who he calls a “sellout” and a “f****** black b****“ and asks how she can associate with ”racist-a** white people.“ He then goes on to call the group and the woman the ”N” word.
The profanity and rage are remarkable. And according to the video’s narrator, police nearby did not intervene.
Again, GRAPHIC CONTENT WARNING:
Editor’s note: This story has been updated with additional content.
November 5th, 2010, 15:13
vector7
Re: America will face Riots, Marches, and Revolution
Submitted by Tyler Durden on 11/05/2010 08:51 -0500
Another highlight you may not hear in the President's address from this morning: according to the last Department of Agriculture update, Americans on foodstamps has increased by over half a million in August, hitting a fresh all time high of 42.4 million people relying on the government for basis sustenance. At least now we know where that labor force is going. The August number is a 17% rise from the same time a year ago. That number is up 58.5% from August 2007, before the recession began.
As the WSJ reports:
By population, Washington, D.C. had the largest share of residents receiving food stamps: More than a fifth, 21.1%, of its residents collected assistance in August. Washington was followed by Mississippi, where 20.1% of residents received food stamps, and Tennessee, where 20% tapped into the government nutrition program.
Idaho posted the largest jump in recipients in the past year. The number of people receiving food stamps climbed 38.8% but their rolls are still fairly low. Just 211,883 Idaho residents collected food stamps in August.
The average benefit size per person nationwide in August was $133.90. Per household it was $287.82.
Food stamps have become a lifeline for workers who have lost their jobs, particularly among the growing share of unemployed Americans who have also exhausted their unemployment benefits. Lines at grocers at midnight on the first of the month have signaled that, in many cases, those benefits aren’t tiding families over and they run out before their next check kicks in.
Even during the summer children returned to schools to take advantage of free lunch programs where they were available. Nearly 195 million lunches were dished out in August and 58.9% of them were free. Another 8.4% were available at reduced prices. That number will surge when the fall data are released because children will be back in school. Last September, for example, more than 590 million lunches were served, nearly 64% of which were free or reduced price.
Children whose families have incomes at or below 130% of the poverty level — $28,665 for a family of four — can access free meals. Those families earning between 130% and 185% of the poverty level — $40,793 for a four-person family — are eligible for reduced-price meals that can’t cost more than 40 cents.
We also fail to see just what Fed-induced wealth effect these 42.4 million Americans will receive courtesy of the Fed's generosity targetting Wall Street, corporate insiders, and nobody else. h/t Papaswamp
November 8th, 2010, 07:55
vector7
Re: America will face Riots, Marches, and Revolution
Saturday, November 06, 2010
by Mike Adams, the Health Ranger
Within a decade, a loaf of wheat bread may cost $23 in a grocery store in the United States, and a 32-oz package of sugar might run $62. A 64-oz container of Minute Maid Orange Juice, meanwhile, could set you back $45.71. This is all according to a new report released Friday by the National Inflation Association which warns consumers about the coming wave of food price inflation that's about to strike the western world.
Authored by Gerard Adams (no relation to myself, Mike Adams), this report makes the connection between the Fed's runaway money creation policy ("quantitative easing") and food price inflation. (http://inflation.us/foodpriceprojec...)
"For every economic problem the U.S. government tries to solve, it always creates two or three much larger catastrophes in the process," said Adams. "Just like we predicted this past December, the U.S. dollar index bounced in early 2010 and has been in free-fall ever since. Bernanke's QE2 will likely accelerate this free-fall into a complete U.S. dollar rout."
The upshot of a falling dollar will mean rampant price inflation on the basic goods and services that Americans depend on to survive. Food in particular is likely to be hit hard by price inflation within the decade.
The National Inflation Association has released its food price projections and are not to smile at while drinking.
It offers statements like this: "NIA is confident that the upcoming monetization of our debt will send nearly all agricultural commodities soaring to new all time inflation adjusted highs."
The Federal Reserve, of course, is currently engaged in the most massive money counterfeiting operation the world has ever witnessed. And it seems determined to keep printing money until all the dollars the rest of us hold are near-worthless.
It's not just the NIA that sees a future with much higher food prices, by the way: Both the Organization for Economic Co-operation and Development as well as the U.N. Food and Agriculture Organization also predict rising food prices (although not to the same prices as the NIA).
This is based on the trend of rising energy prices which directly translate into higher costs for farming, harvesting, transporting and processing foods.
I also predicted "food disruptions".
(Many of those predictions have already come true, by the way!)
Make no mistake: Food prices are on the rise. And with the Fed watering down the dollar thanks to its insane money counterfeiting policies, the U.S. is headed into a price inflation / dollar deflation scenario that mean you will have to spent a lot more dollars to buy the same food in 2015 as you did in 2010. (If the dollar even exists in 2015, that is...)
What does this all mean to you and me? As the spring comes back in a few months, it might be a good time to start thinking about growing a little garden for yourself. We'll be covering this story in much more detail in the spring, including details on where to get heirloom seeds, how to practice "preparedness" gardening (or "gardening when it counts") and other similar topics.
November 8th, 2010, 22:54
vector7
Re: America will face Riots, Marches, and Revolution
(CH) Chinese rating agency Dagong Global Credit downgrades US credit rating due to QE program (update) - Chinese press
- Cut long term US sovereign rating one notch to A+ from AA, with a negative outlook.
- "The serious defects in the U.S. economy will lead to long-term recession and fundamentally lower the national solvency. The credit crisis is far from over in the United States and the U.S. economy will be in a long-term recession." Weaker dollar will hurt US ability to attract dollar capital reflow. "In essence, the U.S. government's move to devalue the dollar indicates its solvency is on the brink of collapse"
- NOTE: Dagong cut the US sovereign rating from AAA in July 2010
November 9th, 2010, 17:37
vector7
Re: America will face Riots, Marches, and Revolution
Precious metals have now entered their parabolic phase.
The latest catalyst for gold having traded north of $1,420 is not only the ongoing collapse of Europe via surging spreads and accelerating ECB bond monetization, which in tried and true bizarro fashion have lead to a more than 100 pip move higher in the EURUSD, but the latest speech by PBOC academic advisor Li Daokui, who said that it is "absurd" that the dollar is still the reserve currency of the world.
We are confident that pretty much everyone in China agrees.
The likelihood that China is about to do something big in FX land was also confirmed by the biggest move higher in the CNY which rose by 0.51%, the most since the revaluation period, and also by the high yield in the one week auction, which has led some to believe that China may be willing to hike rates once again, and further weaken the dollar peg.From Bloomberg:
Li Daokui, an academic adviser to China’s central bank, said it could be seen as “absurd” that the dollar remains a reserve currency after the financial crisis.
To a visitor from outer space, it would seem “absurd” that the dollar holds that role, given problems in U.S. financial regulation and the country’s economic difficulties, Li said at a forum in Beijing. The same assessment could be made of the nation’s ability to keep issuing currency according to its own needs, he said.
To a visitor from outer space, it would be more absurd that after precipitating the biggest Depression in history Bernanke is still in charge of the world.
November 9th, 2010, 17:55
Ryan Ruck
Re: America will face Riots, Marches, and Revolution
James Rickards is Senior Managing Director for Market Intelligence at Omnis Inc. He has also served as a consultant to the various branches of the US Military, focusing on financial threats to national security.
In this interview with King World News, he discusses recent US Militrary war games exercises based on global economic collapse and civil disorder, as well as World Bank President Robert Zoellick's recent comments on a gold standard, Fed QE2, the IMF and G20, the ongoing currency war, and recent gold market activity.
Keep in mind that the US Military always prepares for possible threats.
These war games have been named: "Unified Quest 2011." I don't want to be an alarmist, and I don't think we're facing anything like that anytime soon, but it's always best to prepare.
Re: America will face Riots, Marches, and Revolution
Went shopping last night at Sam's Club again and noticed more price increases...
24-pack of Lo-Carb Monster Energy Drink has gone from about ~$25 to ~$29. Big box of POM brand toilet paper which used to be ~$15 is now ~$18.
These prices on each item might not seem like a huge deal individually but when you go in and buy 30 items and even half of them have increased in price $2-$4, you are taking about quite a jump in your checkout price.
By the way, these prices are price jumps I've seen in the last ~2-3 years. Before that, prices had been fairly stable.