Jay's Daily News

Opie, I have no idea how you manage to find all these articles but I have to say that I'm pleasantly humbled and surprised. Please, keep up the good work for it it really appreciated.

The money could come from Japan. They could acquiesce to pressure and threats of protectionism.

China could buy more T-bills.

Seizing gold, declaring a bank holiday and re-write the value of gold is something that could happen...

some news for me too ?

Oversold US Dollar threatens stock, commodity, bond prices

Friday, September 25, 2009 19:01

When we wrote “Inflating a Bull Market,” we mentioned the inverse relationship between the US dollar and stock prices. In March, the US dollar peaked from overbought levels and began to decline. At the same time stocks bottomed from oversold levels and began to move up. The reason is simple – Stocks are priced in US dollars. As the dollar weakens, it takes more of them to buy stocks (or anything priced in Dollars), which causes prices to rise.

The US Dollar is now oversold and may be poised for a move-up (at least in the shorter term) which should cause the price of “things” priced in dollar to decline (Stocks, Bonds, Commodities, etc)
http://www.chartingstocks.net/wp-con...009/09/usd.png

World Bank says don't take dollar's place for granted

Sun Sep 27, 2009 2:18pm EDT

WASHINGTON (Reuters) - World Bank President Robert Zoellick said the United States should not take the dollar's status as the world's key reserve currency for granted because other options are emerging.

In excerpts released on Sunday from a speech that he is to deliver on Monday, Zoellick said global economic forces were shifting and it was time now to prepare for the fact that growth will come from multiple sources.

"The United States would be mistaken to take for granted the dollar's place as the world's predominant reserve currency," he said. "Looking forward, there will increasingly be other options."

Zoellick said that a meeting of Group of 20 rich and developing countries in Pittsburgh on Thursday and Friday had made "a good start" toward increased global cooperation but they will have accept global monitoring of their activities.

"Peer review will need to be peer pressure," he said.

Zoellick said that the G20, as the new chief forum for international economic cooperation, also must not forget the 160 countries left outside its structure and should try to open opportunity for them.

"We need a system of international political economy that reflects a new multi-polarity of growth," Zoellick said. It needs to integrate rising economic powers as 'responsible stakeholders' while recognizing that these countries are still home to hundreds of millions of poor and face staggering challenges of development.".

FDIC Discloses Deposit Insurance Fund Is Now Negative

http://www.zerohedge.com/article/fdi...d-now-negative

I see another bailout on the horizon.

This story got quickly pulled from NewsMax.

The article was written by John L. Perry, who served on the White House staffs of LBJ and Carter. Perry called for a ‘bloodless’ coup in the US. It would be "non-violent" he said because the US is not a banana republic. And he claims to have inside knowledge that this is what certain military people are presently thinking.

Deposit Insurance goes negative????????

Deposit insurance will NEVER go negative.

The inflation will surpass Zimbabwe's but as long as it exists, there will be money in the FDIC.

(Source: http://www.lewrockwell.com/faber/faber22.1.html and http://www.moneycontrol.com/news/fii...c-_417404.html)


Video at http://www.moneycontrol.com/video/fi...er_417404.html

The US markets ended lower for the second session yesterday on the back of mixed global cues and disturbing job loss data. Does this mean we’re still not out of the woods? Marc Faber, Editor and Publisher of the Gloom, Boom & Doom Report feels nothing has been solved in the US in the last 6-9 months and that a big economic crisis was still to be seen ahead. “The policy makers in the US, are still in-charge and if you look at what has happened in the US over the last 6-9 months, nothing has been solved. It has been postponed through fiscal and monetary measures, precisely the measures that brought about the crisis in the first place. So enjoy your ride in asset classes as long as it lasts but I think we are seeding the next crisis and it may happen in the next three months, maybe tomorrow, maybe five years, maybe only in 10 years but I think the big crisis is still ahead of us.” He said that the markets were overbought and that the economic news was still not good.


Here is a verbatim transcript of the exclusive interview with Marc Faber on CNBC-TV18. Also watch the accompanying video.
Q: There have been stray concerns on where the market might be headed, and whether things are approaching a bubble like proportion, especially in the equity market. What do you feel?
A: Basically, we have had huge fiscal stimulus packages and we had quantitative easing in basically all countries around the world. So asset prices have recovered strongly after March 6 this year, with stocks rising, commodity prices rising and the dollar weakening again and each time the dollar weakens it is kind of a symptom of some inflation in the system and excess liquidity building up. What we have is large cash positions around the world and zero interest rates and also the policy by the Fed to keep the matter very low level for a very long time as was the case of 2001. With this in mind, money goes out of cash balances into something, either consumption or into some kind of assets like equities or commodities or bonds or art or real estate.
Q. While the rally has been intact, there seems to be one concern which is that interest rates will soon start moving higher and that in turn will start sucking the liquidity out or the easy liquidity out. Is that a real fear for the market?
A: I don't think so. I think we have to distinguish between short-term interest rates and long-term interest rates. Long-term interest rates, the Federal Reserve does not really control them in the long run. Temporary they can somewhat control them through quantitative easing and through the purchases of 10 year bonds, 7 year bonds, 30 year bonds but what they control are the short-term interest rates in other words, the Fed fund rates. Reading through the literature and through the speeches that are being given by Mr Ben Bernanke, my impression is that the short-term interest rates will stay long for a very long time. In America the fiscal deficit this year will be around USD 2 trillion and I do not think they can cut the fiscal deficit next year because if they cut it, it will have a negative impact on the economy. So I rather think that the fiscal deficit will stay at this level or in my opinion actually even increase. That will lead the Fed to keep interest rates artificially low because should they increase short-term rates meaningfully then the cost of servicing the government debt in the US will escalate substantially. So I think as far as the eye can see, monetary policies in the US will stay expansionary.
Continued on next page... _PAGEBREAK_
Q. Will talk about sectors and markets in specific in a bit but what about the dollar? There has been almost a straight line correlation between the way emerging markets have moved and the way the dollar has been weakening. Do you sense that is going to snap back soon?
A: If I look around the world — and this is frequently missed in the inflation-deflation debate — the US current account deficit, growing from USD 150 billion to USD 800 billion between 1998 and 2007 flushed the world with liquidity and led to essential inflation in emerging economies, in particular asset inflation. We now have flats in Hong Kong, in other words condominiums selling for up to USD 9000 a square feet. In America, price levels compared to the price levels in some of the Asian cities is actually now quite low. So I think that the US dollar is no longer overvalued for the time being and the sentiment about the US dollar is so negative that we could have a rebound in the dollar for a couple of months and that would indicate some tightening of global liquidity and be bad for asset markets as was the case in 2008 when the US dollar rebounded, all asset market went down.
Q: If there were to be a snap back, how powerful do you think it might be, are we talking about a big pullback for the dollar considering how much it sold off these past few months?
A: That I doubt because the Federal Reserve and the US government pursue policies that are not conducive to a strong US dollar. But as I said we are very oversold and could see some rebound, at maybe around 10% or so. But I would not expect the US dollar to be structurally a strong currency in the next few years, quite on the contrary I think the US dollar will continue to lose its purchasing power.
Q: While the correction has been called for many months now, do you see a situation over the next few months where the liquidity can actually push markets to far higher levels and see almost a blow out like rally over the next couple of months?
A: That I doubt; we are very overbought and the economic news is not particularly good. So I think that before we would rise much more in equity markets, a correction should actually take place. But markets are unpredictable and it is conceivable that there is a kind of a blow-off phase before we go down substantially. But I would not bet on that. I think the big move to grave this out, we are up 100% in India, we are up 50% in the United States, may be we go up another 10%, but we are not going to go another 100% straight away.
Q: As you watched the markets right now, do you see any similarities with the situation that we had in 2007 and just by extension of that if there is indeed a correction who do you think will falter a blink first, the equity markets or the commodities or a completely other asset class?
A: I think equities after the peak in October 2007 collapsed around the world by plus or minus 50% and now they have rebounded but they are not at their previous highs. In the meantime, in some countries, companies have continued to increase their earnings and so the valuations are not as stretched as in 2007. But what disturbs me personally is that we had the financial crisis. The cause of the financial crisis was excessive debt growth that was essentially produced by notably the American Central Bank, the Federal Reserve. Now the same people who produced the crisis namely the policy makers in the US, are still in-charge and if you look at what has happened in the US over the last 6-9 months, nothing has been solved. It has been postponed through fiscal and monetary measures, precisely the measures that brought about the crisis in the first place. So I think enjoy your ride in asset classes as long as it lasts but I think we are seeding the next crisis and it may happen in the next three months, maybe tomorrow, maybe five years, maybe only in 10 years but I think the big crisis is still ahead of us.
Q: Where does India fit in your preferred or not preferred list right now of markets?
A: I think the Reserve Bank of India (RBI) has one of the best monetary policies in the world because they supervise the financial sector very closely. They have maintained relatively tight monetary policies and also they pay attention not only to core inflation which is not representative of the cost of living increase and is not representative of inflation in the system but the RBI also pays attention to rising and falling asset prices. So I have to give them credit for being one of the best Central Banks in the world

i just need to so post this... one of your favorite institute


Oct. 1 (Bloomberg) -- Goldman Sachs Group Inc. today said the economy probably lost more jobs in September than it previously anticipated, citing “disappointing” economic data including the number of people receiving jobless benefits.

I hope they number of job losses there is multiplied by a factor of 1000. I would love nothing more than putting them out of business.

Hi Guys - love the thread, keep up the good work!


Three Banks Fail Friday

WASHINGTON (TheStreet) -- State regulators closed banks in Michigan, Minnesota and Colorado Friday, bringing the total number of failed banks and thrifts this year to 98.


Saw this interesting tid-bit as well while I was scanning the news.

ITAR-TASS: Bank of Russia buys some $2.6 billion in 2 days - KPNews.com

The Central Bank of Russia (CBR) on Wednesday bought about 600 million US dollars on the market and on Tuesday - some 2 billion US dollars, CBR Chairman Sergei Ignatyev told journalists on Wednesday. He said that the Bank of Russia in early September ...

http://news.russiannewsroom.com/details.aspx?item=28023


Democrats Weigh Extending Key Parts of Stimulus
The Wall Street Journal, October 3, 2009
By JONATHAN WEISMAN and JOHN D. MCKINNON

WASHINGTON -- White House officials and Democratic leaders in Congress on Friday said they were weighing extending key elements of the economic-stimulus program as the nation grapples with a deteriorating job market.

Will California become America's first failed state?

"By 2010, California could lose a congressman because its population will have fallen so much – an astonishing prospect for a state that is currently the biggest single political entity in America. Neighbouring Nevada has launched a mocking campaign to entice businesses away, portraying Californian politicians as monkeys, and with a tag-line jingle that runs: "Kiss your assets goodbye!" You know you have a problem when Nevada – famed for nothing more than Las Vegas, casinos and desert – is laughing at you."

http://www.guardian.co.uk/world/2009...ing-state-debt

Program to Buy Bad Assets Nearly in Place, U.S. Says

October 5, 2009, 5:58 am The Treasury Department said on Sunday that its scaled-down program to help banks unload their troubled mortgages and mortgage securities would begin operating at full strength by the end of this month, more than a year after Congress authorized $700 billion for that purpose.


Treasury officials said that five out of the nine money-management firms it selected to buy up unwanted mortgage-backed securities had raised the minimum amount of money from private investors — $500 million each — to qualify for matching investments and loans from the federal government, The New York Times’s Edmund L. Andrews reported.

The IMF to Play Role of Global Central Bank?


The Dollar Needs to be Devalued by Half?

by Ellen Brown

Global Research, October 5, 2009

“A year ago,” said law professor Ross Buckley on Australia’s ABC News on September 22, “nobody wanted to know the International Monetary Fund. Now it’s the organiser for the international stimulus package which has been sold as a stimulus package for poor countries.”

The IMF may have catapulted to a more exalted status than that. According to Jim Rickards, director of market intelligence for scientific consulting firm Omnis, the unannounced purpose of the G20 Summit in Pittsburgh on September 24 was that “the IMF is being anointed as the global central bank.” Rickards said in a CNBC interview on September 25 that the plan is for the IMF to issue a global reserve currency that can replace the dollar.

“They’ve issued debt for the first time in history,” said Rickards. “They’re issuing SDRs. The last SDRs came out around 1980 or ’81, $30 billion. Now they’re issuing $300 billion. When I say issuing, it’s printing money; there’s nothing behind these SDRs.”

SDRs, or Special Drawing Rights, are a synthetic currency originally created by the IMF to replace gold and silver in large international transactions. But they have been little used until now. Why does the world suddenly need a new global fiat currency and global central bank? Rickards says it because of “Triffin’s Dilemma,” a problem first noted by economist Robert Triffin in the 1960s. When the world went off the gold standard, a reserve currency had to be provided by some large-currency country to service global trade. But leaving its currency out there for international purposes meant that the country would have to continually buy more than it sold, running large deficits until it eventually went broke. The U.S. has fueled the world economy for the last 50 years, but now it is going broke. The U.S. can settle its debts and get its own house in order, but that would cause world trade to contract. A substitute global reserve currency is needed to fuel the global economy while the U.S. solves its debt problems, and that new currency is to be the IMF’s SDRs.

China calls time on dollar hegemony

You can date the end of dollar hegemony from China's decision last month to sell its first batch of sovereign bonds in Chinese yuan to foreigners.
By Ambrose Evans-Pritchard
Published: 7:33PM BST 06 Oct 2009


Beijing does not need to raise money abroad since it has $2 trillion (£1.26 trillion) in reserves. The sole purpose is to prepare the way for the emergence of the yuan as a full-fledged global currency.

"It's the tolling of the bell," said Michael Power from Investec Asset Management. "We are only beginning to grasp the enormity and historical significance of what has happened."

It is this shift in China and other parts of rising Asia and Latin America that threatens dollar domination, not the pricing of oil contracts. The markets were rattled yesterday by reports – since denied – that China, France, Japan, Russia, and Gulf states were plotting to replace the Greenback as the currency for commodity sales, but it makes little difference whether crude is sold in dollars, euros, or Venetian Ducats.

What matters is where OPEC oil producers and rising export powers choose to invest their surpluses. If they cease to rotate this wealth into US Treasuries, mortgage bonds, and other US assets, the dollar must weaken over time.

"Everybody in the world is massively overweight the US dollar," said David Bloom, currency chief at HSBC. "As they invest a little here and little there in other currencies, or gold, it slowly erodes the dollar. It is like sterling after World War One. Everybody can see it's happening."

"In the US they have near zero rates, external deficits, and public debt sky-rocketing to 100pc of GDP, and on top of that they are printing money. It is the perfect storm for the dollar," he said.

Dollar tumbles on report of its demise

Gold price at record high as Independent story sends global markets into a frenzy


By Stephen Foley in New York

Wednesday, 7 October 2009


The price of gold is surging on world markets amid fears that the old economic order based on the supremacy of the US dollar could be breaking down.

A new spike has sent the cost of the precious metal to a level not seen before. The dollar slid sharply after yesterday's report in The Independent that Gulf Arab states are secretly planning to stop trading oil in dollars, and a senior UN official said that the US should be stripped of its position as the main source of currency reserves for other countries.

The developments come on top of speculation that the Obama administration is operating a policy of benign neglect of the dollar, engineering a devaluation that could help repair some of the economic damage caused by the recession.

Not since the collapse of the Bretton Woods system in 1971 has gold been treated as the equivalent of a world currency, but The Independent reported that it could form part of a basket of currencies that would be used for oil trading by the end of the next decade.

"Last month, Iran shifted its reserve currency from the dollar to the euro, a move that is likely more political than economic and a response to harsh U.S. criticism of Iran's nuclear moves."

Seriously, WTF?

So the Chinese and everybody else and their dogs are shorting the dollar because it's the fiscally responsible thing to do. But when Iran does it, it's political?

http://www.washingtonpost.com/wp-dyn...100603818.html

Good eye, Jay.

The Washington Post (or insert mainstreammedia "news" source of choice), the very best in analysis, commentary, and opinion money can buy.